25 February, 2009Workers in Indonesia take things into their own hands after management abscond, leaving US$2.5 million in unpaid entitlements.
INDONESIA: Workers at a Batam EPZ company have succeeded in regaining the majority of their unpaid wages by auctioning all of the factory's moveable assets.
Minutes after announcing the abrupt closure of the electronics components company, all of PT Livatec's managing directors absconded by ferry to nearby Singapore.
They left owing around US$2.5 million in unpaid wages and severance pay to the 1600 mostly women workers.
But with the assistance of IMF Affiliate FSPMI, the workers defied bank claims by occupying the factory and auctioning everything they could, including three Mercedes Benz cars left by the managing directors.
While the bank retained ownership of the land and other fixed assets, the workers succeeded in regaining around $1.5 million or 60% of what they were owed.
"The workers were successful because they stayed united in the face of adversity," said FSPMI President Iqbal Said.
IMF South East Asia Representative Arunasalam said the case should serve as a warning for other companies trying to evade paying workers their rightful entitlements.