All Giant Outlets Closed, KSPI Says 3,000 Employees Threatened With Layoffs: Because Hong Kong Investors Escaped?

Illustration. (Photo: Doc. Between)

JAKARTA - Retailer PT Hero Supermarket Tbk decided to close all giant outlets by the end of July 2021. This HERO-coded issuer is still under pressure from the COVID-19 pandemic until its revenues fall 32 percent. This decision will affect thousands of employees who are threatened with termination or layoffs.

The Confederation of Indonesian Trade Unions (KSPI) assessed that the management plan to close Giant outlets throughout Indonesia would affect 3,000 workers who were threatened with layoffs. To that end, KSPI President Said Iqbal asked the company's leadership to negotiate the issue with the Hero Group trade union accompanied by the Central Leadership Council of ASPEK Indonesia.

"There is information, the cause of the closure of 80 Giant outlets throughout Indonesia is due to the withdrawal of shares coming from Hong Kong investors from Hero Group," he said in a written statement received by VOI, Wednesday night, May 26.

However, judging by the data as of May 12, Hero Supermarket is still controlled by Mulgrave Corporation, a Company based in the Netherlands. The company holds a 63.59 percent stake in HERO.

Meanwhile, Hong Kong-based retail giant The Dairy Farm narrowed its 17.45 percent stake in HERO. Thus, the actual KSPI statement remains to be questioned.

Switch employees to another company

KSPI asked the head of Hero Group company to continue hiring giant employees who were laid off to other units of hero group. Like other Supermaket, Guardian, and IKEA Heroes throughout Indonesia. If there are Giant employees who cannot be channeled to other units of Hero Group's companies, then the company is obliged to pay employees' rights plus other compensation.

Iqbal said this is in accordance with the agreement stipulated in the Collective Labor Agreement (PKB) that has been agreed between the leadership of hero group companies and hero group trade unions.

"If there are workers who are not channeled to other companies, KSPI asks companies not to use severance calculations stipulated in the Omnibus Law copyright work law," he said.

Allow time for negotiation

In addition, iqbal said, KSPI asked the company to give enough time to the union in socializing about the layoff plan of nearly 3,000 giant employees.

"The company should not rush and impose the will against the case of massive layoffs at Giant. KSPI together with ASPEK Indonesia will control the process of layoffs of thousands of workers in Giant," he said.

Iqbal said the layoffs of nearly 3,000 workers showed that the omnibus law copyright law No. 11 of 2020, especially the employment cluster is not in accordance with the explanation of the ministers. Because, all this time they say that Omnibus Law will open new jobs, bring investment, and prevent layoffs.

"The facts in the field explain, the existing investors even attract investment from Indonesia," he said.

According to Iqbal, this is the right time for the Constitutional Court Judges to grant the demands of Indonesian workers represented by KSPSI AGN and KSPI to cancel and repeal the Omnibus Law copyright work law, especially the employment cluster. As it proves, the promise of the Omnibus Law is far from baked from the fire.

"It is not true that the Employment Cluster Copyright Law will attract new investment into Indonesia, because the fact is that it is detrimental to workers where massive layoffs occur with low severance, replacing permanent employees with out sourcing and contract employees, and excessive working hours," he said.

Companies lose billions, revenues fall 32 percent

Giant's managing retail company in Indonesia, PT Hero Supermarket Tbk is still mired in pandemic conditions. The Company recorded a decrease in revenue and still losses in the first quarter of 2021. Quoted from the financial report of the issuer coded HERO shares, Wednesday, May 26, the company posted revenues worth Rp1.76 trillion in the first quarter of 2021.

This achievement decreased by 32.20 percent compared to the same period last year which was worth Rp2.60 trillion. The decrease in operating expenses was recorded to Rp514.89 billion in the first quarter of 2021 from Rp774.48 billion in the first quarter of 2020. As a result, hero's current period losses are thinning.

Ikea and Guardian's current period loss was Rp1.64 billion in the first quarter of this year, reduced compared to a loss of Rp43.55 billion in the first quarter of 2020.

Hero Supermarket President Director Patrik Lindvall said the company still faces significant challenges in the first three months of this year due to the COVID-19 pandemic that restricts the movement of people which leads to a decrease in visitor traffic.

"Groseri business and the health and beauty of the company significantly continue to be negatively affected by this pandemic. The restrictions led to a change in customer shopping behavior," Patrik said.