With no sign of a decrease in the number of new COVID-19 infections, I have a feeling that the current situation will continue for a long time. On the other hand, while there may be some industries where work results can be achieved by working from home, in manufacturing industries where work results cannot be achieved unless employees come to the office, the labor costs incurred as usual even with operational restrictions and self-isolation are weighing heavily. In order to keep the company afloat, it is essential to reduce fixed costs, especially personnel costs, and what is on the mind is wage cuts and layoffs. However, I don't really know how to proceed. This time, let's focus on these two points and look for hints.

[Wage cut]

2020According to the Minister of Labor's notification dated March 17, 2017, the Indonesian government has notified that wages can be deducted if there is agreement between labor and management. However, obtaining ``agreement between labor and management'' is extremely difficult. Have you given up because it's impossible? On the workers' side, transportation allowances and meal allowances have stopped on days when they are self-isolating at home, and overtime work has stopped, so their actual incomes have decreased, so it may be a sincere wish that they don't lose any more. However, it can be said that a reduction in wages is better than zero. Be as open as possible and explain the company's current situation and take a stand. A reduction in basic salary is a last resort. First, let's negotiate a reduction in allowances that you feel comfortable with logically reducing. Also, although there is a lot of resistance to simply reducing the amount, it is also possible to pay the reduced amount in one lump sum later. One way is to combine this with bonuses, set goals that can be achieved with effort on the part of the employee, and make it possible to earn a bonus that is more than the total reduction amount. If an agreement is reached through labor-management negotiations, be sure to create a written agreement. If there is a trade union, it is a good idea to draw up a document between the trade union officers, or if there is not one, the members of the bipartite council, or if the bipartite council has not yet been established, the people who can be considered the worker representatives.

【Staff arrangement】

There may be more pressing situations, such as when wage deductions are not enough and an entire department has to be shut down. Generally, this kind of situation is called "termination of the employment relationship due to rationalization," but in Indonesia, it has been ruled unconstitutional, so it is not possible to apply for dismissal based on rationalization. Therefore, the only option in this case is to terminate the employment relationship by agreement between labor and management.

In this case, careful simulation in advance is very important. Legally, the final payment in this case is the sum of twice the retirement allowance, one time the continuous service award, one time the loss compensation (15% of the total of the retirement allowance and continuous service award), and the purchase of unused annual paid leave rights. However, whether or not it is possible to reach a legal agreement with workers whose future income is cut off and who find it difficult to find work at a time like this varies greatly depending on the state of labor-management relations at each company and the extent of external interference with workers.

Even regulations: 2020 Minister’s Notice No.M/3/HK.04/III/2020, 2003 Law No. 13