Chevron’s plan to cut jobs in Indonesia rejected

JAKARTA. Chevron Pacific Indonesia is facing resistance to its plan to lay off workers as the government and a labor union have requested that the company allow the natural process to take place to reduce its workforce by at least 1,200.

The oil and gas company recently announced a plan to lay off 25 percent of its 6,000 employees between January and April. It planned to offer mutual termination agreements (MTAs) until it had reduced its workforce by 1,500 employees.

An MTA is normally subject to employees’ voluntary agreement. However in Chevron's case, employees who reject the MTA will be obliged to accept “labor reassessment”, said Chevron Indonesia Labor Union spokesperson Indra Kurniawan.

"The labor union has no problem with the MTA, but reassessment is being forced by the company; it’s one sided. An MTA should be offered without coercion," Indra told thejakartapost.com on Tuesday, underlining that the union strongly rejected the plan.

He said the labor union considered the plan a violation of regulations as the company had simply applied to the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) for approval without properly discussing the issue with the labor union.

By law, layoffs should be the last option after going through eight steps, including reducing management staff’s benefits, reducing shifts, cutting overtime, slashing work hours, giving leave to shift workers, not renewing contracts and offering staff retirement.

The steps are stipulated in a Manpower Ministry circular issued in 2004, Indra said, urging Chevron to hold three-party negotiations on the layoff plan involving the union, the management and the government.

Meanwhile, the Energy and Mineral Resources Ministry's director general of oil and gas, I Gusti Ngurah Wiratmaja Puja, acknowledged that Chevron had requested permission to lay off workers, but he said the government had objected to the plan.

"We urged [Chevron] to reduce the number of its workers naturally. If there is a retirement plan, then let it happened through that," said Wiratmaja in Jakarta on Monday.

SKKMigas head Amien Sunaryadi said Chevron planned to lay off 1,200 employees in an efficiency program.

Amien said the layoffs would be gradual, explaining that initially people would be asked to voluntarily resign while others would be offered early retirement. (Ayomi Amindoni and Anton Hermansyah)