Riani Rachmawati: Pandemic, Employment and Social Partnership
Hana Fajria – FEB UI Public Relations Officer
DEPOK, Wednesday, 10/6/2020 –detiknews.com published an article written by Riani Rachmawati, a lecturer at the Department of Management, FEB UI, entitled Pandemic, Manpower and Social Partnership. Below is the article.
Covid-19 has left a negative impact not just on the health sector but also on job security and workers’ salary. The International Labor Organization (ILO) predicted that globally, the pandemic will cause about 195 million people to lose their jobs. The ILO also predicted that four out of five workers (81%) will be affected by the cessation of company operations or a reduction in working hours.
Data from the Indonesian Ministry of Manpower in April 2020 showed that around two million formal and informal workers have been laid off due to the pandemic. The number could continue to increase as new Covid-19 infections are reported daily, which is worrying. In a bad scenario, the unemployment rate will increase by 2.9 million; in fact, in a worst case scenario, 5.2 million people could lose their jobs.
Accommodation, food services, manufacturing and retail are the sectors most affected by the business downturn due to Covid-19. This is bad news for anyone, for the business world and for workers and their families.
Naturally, workers’ restlessness deserves serious attention. This is the time to change the view of workers: they are not just an economic factor that can be “discarded” when not needed, but one of the main pillars of the process of producing goods and services that can be tested; that workers are not just an economic object but the main actor in the economy.
Business sluggishness due to the pandemic is the main reason employers furlough or dismiss workers, especially in labor-intensive sectors that are most affected by the current condition such as retail and manufacturing. Even so, this can never justify unilateral decisions by employers on employment availability.
The pandemic occurred at a time when Indonesia was struggling to provide employment opportunities for its people, most of them in their productive age or popularly known as the “demographic bonus” that will end in 2030. The demographic bonus is a clear indication that Indonesia needs to provide many job opportunities.
This condition will cause workers who were furloughed and laid off (which caused them to feel insecure about future job availability) due to Covid-19 will return to the labor market as job seekers together with people in the productive age group who have yet to find employment.
Therefore, it is understandable that workers’ unions warn employers not to arbitrarily lay off workers on the pretext of sluggish business due to the pandemic. Not only because of the economic demands of the workers, but also the state’s interest in preventing an increase in the number of unemployed people that will cause a heavy burden on Indonesia’s labor market.
The International Employers Organization and the International Trade Union Confederation recently issued a joint statement regarding Covid-19. The joint statement underlines, among other things, the importance of business continuity, income security and solidarity as well as social dialogue and shared responsibility in dealing with the impact of the pandemic in the workplace.
The joint statement is in line with the ILO’s recommendations in addressing the impact of Covid-19 in the world of work. The ILO’s recommendations are: (1) providing stimulus for the economy and the labor market through fiscal and monetary policies; (2) providing support for companies, jobs and workers’ salary through social protection, retaining workers and fiscal/tax relief for companies; (3) protecting workers in the workplace through the application of the principles of occupational safety and health (K3); and (4) using social dialogue to find common solutions through capacity building of employers, laborers and government.
Unfortunately, mass layoffs in various regions in Indonesia are still rampant. Businesses feel they can no longer maintain their workers. They close down their businesses and lay off thousands of employees. However, it should be noted that companies unilaterally lay off workers without dialogue. This shows that economic players in Indonesia have a low capacity to engage in social dialogue, especially in the face of “disasters” such as the current pandemic.
Management prerogatives have once again become dominant and workers are only expected to accept company decisions. So far, no sound mitigation plan have been proposed. Many people are not convinced the Pre-Employment Card could be a solution to the employment problem. The same is also true for the various incentives that are planned for a short-term only, with a nominal value that is far from sufficient to support decent living standards.
Time for Social Partnership?
Richard Hyman (2001) in his book Understanding European Trade Unionism: Between Market, Class and Society states that the concept of social partnership was originally known in Austria in the early 1900s. At the time, employers’ associations and trade unions in Austria were engaged in a heated confrontation that led to the collapse of Austria’s economy and paved the way for Nazi Germany’s smooth occupation of Austria in 1938.
The rise of Austria was marked by a new spirit of cooperation and collaboration between employers’ associations and trade unions, replacing class struggle. Policy formulation was carried out by means of communication and cooperation between the two parties with a focus on increasing economic growth and employment opportunities. Each party saw itself as the main pillar of economic and social stability.
As in Austria, the concept of social partnership is also known in Germany, the Netherlands and the UK, although their implementations vary. According to Ackers & Payne (2011), there are at least three principles of social partnership that need attention: (1) the involvement of trade unions as the center of industrial relations; (2) workers ‘participation based on workers’ rights; and (3) involvement of all related parties (stakeholders) at the national level.
The implementation of these principles certainly requires the willingness and adequate capacity of all parties to sit together and engage in a dialogue to find alternative solutions. When associated with the concept of justice, the dialogue of all stakeholders fits the principles of procedural justice and will result in decisions that are more acceptable to various parties.
Furthermore, social partnership revives the principle of “deliberation for consensus”, which is one of the key principles in Indonesia.
The main problem that must be resolved immediately is the creation of employment for 70% of the productive age group. The Job Creation Bill, which was actually intended to solve the problem, was flatly rejected by workers’ unions because of their minimal involvement since the beginning of the drafting of the bill so that their aspirations were not accommodated in the bill.
This is despite the fact that trade unions have key resources, namely knowledge, especially information on labor conditions that other actors in policy making lack. It is therefore important to ensure the involvement of specific group members as they often have the best knowledge about their area of concern (Howlett & Ramesh 2003).
In addition, job creation is not just about ‘work’ but should fit the concept of ‘decent work’ promoted by the ILO. Labor market flexibility, which is translated into contract labor, becomes a very dangerous practice if it is not accompanied by strong social security and comprehensive employee skill development.
We should bear in mind that MSMEs absorb around 96% of the workforce who are very vulnerable to fluctuations in the goods and services markets and technology developments. Solutions to create (decent) jobs must be comprehensive and involve various parties through social partnerships. The Covid-19 pandemic provides valuable lessons on the importance of a strong social partnership to jointly find the best solution to derivative problems caused by the pandemic. Everything happened so fast it was almost out of control, and no one knows when it will end. Work that was once a source of income suddenly disappeared without a meaningful backup plan. What will the fate of this nation be if the demographic bonus and high unemployment rate due to the Covid-19 pandemic are not offset by the creation of adequate (decent) jobs? Inevitably, it’s time to sit together through social partnerships to find solutions that can be implemented immediately before it gets too late. (hjtp)
Source: http://news.detik.com/kolom/d-5048219/pandemi-ketenagakerjaan-dan-social-partnership
(lem)