Protests against Holcim Indonesia's planned lay-offs

Protests against Holcim Indonesia's planned lay-offs
Published: 15 May 2015

Tagged Under: Holcim Indonesia 

The labor union of Holcim Indonesia has demanded that the company hold further discussions on its plan to lay off hundreds of workers, according to a report by the Jakarta Post.

Following a weak company financial performance and dipping overall domestic cement sales, Holcim announced last Friday that it planned to lay off workers aged below 45, with a number of workers having yet to be notified of such a plan. That was after Holcim cancelled its deal with its labor union in late April that agreed on a mutual voluntary separation program deemed beneficial for both parties.

Holcim then proposed another plan – early retirement for workers aged between 53 and 55 years
of age – which had been approved by the union but was not implemented.

"The firm should have had to invite the labor union for discussion so a decision could be made
together. However, these steps were not carried out," said Holcim Labor Union chairman Bakhtiar
Rusli on Sunday.

The union also protested unfavorable measures, such as the revocation of worker identity cards
without prior notification, Bakhtiar further said.

The corporate restructuring will affect around 350 Holcim employees out of more than 2,600
employees, according to the labor union.

The planned lay off came up after Holcim Indonesia saw a 89.7 per cent drop in net profit to IDR33bn
(US$2.51m) in thefirst quarter of this year from last year driven by a high increase in financial costs. This poor result comes after a poor performance throughout 2014. The company also saw a five per cent drop in quarterly revenues to IDR2.25trn as it booked a seven per cent decline in cement sales by volume in line with the market trend. Domestic cement sales dipped four percent to 13.9Mt. Moreover, increased competition by the government's instruction to lower the price of cement by IDR3000 for state-owned cement makers also affected the whole industry.

But the labor union argued the firm was experiencing normal conditions and that there was no financial evidence of bankruptcy from public accountants.

In response to the union's demand, Holcim claimed that it had offered selected companies an early
retirement package and limited separation package as part of the company¹s reconfiguration process.
"These arrangements have been finalized after extensive internal engagements with various levels
of our employees, including unions," said Holcim Indonesia CEO and president director Gary Schutz
in a statement.

The firm also considered its separation offers in compliance with prevailing regulations, including the fulfillment of all rights of affected employees and covered outplacement support plan for workers wishing to carry out such arrangements. (Source: Jakarta Post)