Textiles Companies’ THR Troubles

Oct 18th, 2006, in Business & Economy, by

The number of companies experiencing difficulties in paying workers their annual bonus has increased, particularly in the textiles sector.

Towards the end of the Muslim fasting month of Ramadan companies are obliged to pay staff Tunjangan Hari Raya (THR), a bonus of one month’s salary. According to the chairman of the Indonesian Businessmens’ Association (Asosiasi Pengusaha Indonesia), Sofjan Wanandi, the number of small to medium sized companies that are unable to fully comply with the regulations on bonus payments has increased in comparison to last year. Large companies, he says, have generally already paid the bonus but many smaller companies are only able to pay a part bonus, or unable to pay any at all. He says:

This shows that the national economy is not yet sound. The industrial sector has not yet recovered.
(Ini menunjukkan ekonomi nasional belum membaik. Sektor industri belum pulih.)

Sofjan goes on to say that, in particular, companies in the textiles, footwear, rattan, and electronics industries are facing the greatest problems. He attributes the matter to the rise in imports, both legal and illegal, of goods from China and elsewhere in these sectors. Indonesian producers cannot compete on price, especially in the textiles area.

There’s no profit any more in the textiles industry.
(Industri tekstil domestik sudah tak mampu lagi meraup untung.)

Lili Asdjudiredja of the West Java branch of the Indonesian Textiles Association (Asosiasi Pertekstilan Indonesia) agreed that fulfilling bonus payment obligations was more difficult for her members this year.

Just surviving is very hard, even more so with [the obligation to pay] tunjangan hari raya.
(Untuk bertahan hidup saja sudah sangat sulit. Apalagi membayar tunjangan hari raya.)

Lili says there are 900 small to mid sized textiles concerns in West Java with 30% of their number being export focused.

Companies oriented to the domestic market are more likely to be unable to pay THR.
(Perusahaan berorientasi lokal yang terancam tak bisa membayar THR.)

However if such problems are being faced by companies, Muzny Tambusai, the Director General of a section of the Labour department, has not heard about it. He says he has not received any requests from struggling companies to postpone the payment of THR to workers.

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