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Update: Labor Woes at Aston Bali Resort and Spa

Deadline Looming for Staff at Aston Bali Resort and Spa to Accept New Jobs and Severance Payout.

(8/7/2010) As reported on Balidiscovery.com, the recent bankruptcy of PT Dewata Royal International (DRI) - the former owners of Aston Bali Resort and Spa [See: Labor Woes at Aston Bali Resort and Spa], has placed the fate of employees at the popular hotel at risk.

According to Bisnis Bali, hundred of the hotel's workers are in danger of becoming jobless and losing their severance entitlements. To date, 48 employees at the Aston including the general manager have received a total of Rp. 1.2 billion (US$ 130,435) in separation benefits.

The bankruptcy of the "old" owners of PT Dewata Royal International (DRI) and the appointment of a "new" owning entity PT Karya Teknik Hotelindo (KTH) means that all employees "technically" lost their jobs, received negotiated severance pay and were then offered similar positions with the new company. Members of the worker union, however, are unhappy with this arrangement, refusing the status of "new" employees in their "old" jobs minus their years of seniority entitlements and protections.

"If the employees don't want to take the severance pay offered by the curator, the employees will suffer greatly. They will lose (both) their jobs and severance pay," said Nadrullah Nawawi, a member of the curator team for PT Dewata Royal International (DRI). Nawawi said the workers have until August to take up the offer or risk losing both their jobs and their separation pay.

The curator went on to describe how he felt the DRI employees are making a serious misstep in refusing to accept the offer of severance pay and a new job under the new owning company. He said that whoever eventually wins the bank auction for the hotel, they will continue to operate the hotel and will need people to work there.

In total, 286 permanent employees and 70 daily "contract" workers were employed at the hotel. Of this total, only 48 workers and the general manager have accepted their severance pay. A total of Rp. 7-10 billion (US$761,000 - $1.1 million) has been allocated by the curator to pay severance benefits.

He also underlined how the commercial courts in Surabaya have formally declared the owning company of the hotel, held by the Rustandi Yusuf family, as bankrupt. The curator alleged that the case is finished legally and that the old owners were attempting to use their old employees as pawns in an attempt to reclaim the property.

The curators have valued DRI at Rp. 182 billion (US$19.7 million) against outstanding liabilities of Rp. 214 billion (US$23.26 million. Funds needed for severance pay equal Rp. 7-10 billion and unpaid hotel and restaurant taxes have hit Rp. 7 billion. Said Nawawi: "the debts of the company are massive. The winner of the auctions will have to address a number of outstanding debts left by the old owner."