Indonesia’s most popular fast food chain, KFC, is in the midst of a labor controversy after a workers’ union says that it unilaterally and without notice furloughed hundreds of employees from stores throughout Java as the economy struggles under the weight of the COVID-19 pandemic.

According to labor union group the Indonesian Workers Solidarity Struggle (SPBI), KFC, operated by franchise holder PT Fast Food Indonesia, placed at least 450 employees on indefinite leave amid the pandemic, with those furloughed getting a pay cut of 30 percent if they’re paid under the provincial minimum wage (generally around IDR3 million or US$191.60) or 50 percent for higher earners.

“They were furloughed without any clarity on when they can return to work,” SPBI Secretary General Fatkhul Khoir said during a teleconference yesterday, as quoted by Katadata.

Fatkhul added that PT Fast Food Indonesia did not give sufficient notice to its furloughed employees nor consult the matter with the fast food chain’s workers’ unions.

SPBI is demanding that PT Fast Food Indonesia pay furloughed employees their salaries in full, based on its interpretation of the 2003 Law on Manpower. However, legal experts have disagreed on the issue, especially in the context of the COVID-19 pandemic, with some arguing that unpaid furloughs are necessary in times of crises to avoid layoffs.

PT Fast Food Indonesia confirmed that it furloughed KFC employees, but denied that they were placed on leave without notice.

“They will return to work when the government declares the COVID-19 situation to be manageable,” PT Fast Food Indonesia Director Justinus Dalimin Juwono told Kumparan yesterday.

The trouble at KFC is unfortunately but a mere snapshot of a much greater economic hardship reverberating throughout Indonesia. According to official data, 1.6 million workers in Indonesia have been laid off or furloughed during the COVID-19 outbreak. To put that in perspective, Indonesia’s latest unemployment count from August 2019 stood at 7 million.

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