House and Government Convinced
The House of Representatives’ (DPR) decision to approve and pass the job creation bill into law has sparked different responses.
JAKARTA, KOMPAS -- A House Plenary Session on Monday (5/10/2020), at the legislative complex, approved the job creation bill to be passed into law. The session, which also saw the closing of the first 2019-2020 sitting period, was held sooner than earlier planned on 8 October 2020, considering the increasingly massive threat of Covid-19.
Indonesian Employers Association (Apindo) deputy chairperson Shinta Widjaja Kamdani welcomed the passing of the bill. The job creation bill is expected to improve the economy and investment through the creation and expansion of employment opportunities.
If there is no job creation bill, the competitiveness of our job seekers is relatively low compared to other countries.
She said the bill would be able to answer problems that have so far become obstacles to investment, namely overlapping regulations and permits. This bill is expected to encourage investment by 6.6 percent to 7 percent to build new businesses and develop existing ones. That way, household spending will also surge in the range of 5.4 percent to 5.6 percent.
"If there is no job creation bill, the competitiveness of our job seekers is relatively low compared to other countries. Employment opportunities will move to other countries that are more competitive and our unemployed population will be higher," she said.
Coordinating Economic Affairs Minister Airlangga Hartarto emphasized that one of the reasons for the drafting of the job creation bill was to prioritize programs related to the handling of the Covid-19 pandemic. Airlangga made the statement after the Democratic Party faction walked out of the plenary meeting on the passing into law of the job creation bill at the House building, in Senayan, Jakarta, on Monday (5/10).
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Airlangga Hartarto, who represented the government in drafting the bill along with nine other ministers, said that the job creation bill was made to prioritize programs for handling the Covid-19 pandemic. Feedback from (House) factions becomes input for the government. The drafting of the bill was carried out through studies and the government had also identified the things that were needed in opening up investment and creating jobs.
Regarding input on labor rights, Airlangga said the issue had been protected in the new law. "In fact, with this [new] law the state is present in industrial relations. Pancasila [value] is present in the tripartite relationship between the government, workers and employers, namely with the creation of the JKP [unemployment fund]," he said.
Labor welfare
On the other hand, the job creation bill, which was deliberated in the last six months, was considered to contain a number of provisions that reduce labor rights and protection in industrial relations. The bill, which was drafted to attract investment in the midst of a pandemic, was seen as making it easier to layoff employers, create job uncertainty and put more burden on the state finance.
Secretary-general of the All-Indonesian Workers Organization, Timboel Siregar, said Monday that the job creation bill had worsened the face of industrial relations, which is full of conflict and disadvantaged workers.
In the midst of uncertainty over the future of Covid-19, the presence of this job creation bill has increasingly reduced the protection and welfare of workers.
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The job creation bill, among others, makes it easier for employers to terminate employment (PHK). Article 161 of Law No. 13/2003 concerning manpower regulates the obligation for employers to first issue warning letters three times before dismissing workers. This article no longer exists in the job creation bill.
Timboel also highlighted a number of crucial provisions which the House passed on the government, which will later produce legislation in the form of government regulations. Generally, the making of government regulations is carried out unilaterally and is usually made behind closed doors.
A number of provisions allow workers to be recruited without certainty of becoming permanent workers. Articles 59 and 65 concerning contract workers and outsourced workers do not regulate the time limit of the contract. In the prevailing Manpower Law, workers could only be recruited as contract workers for a maximum of three years – a maximum of two years with an extension of one year.
In the job creation bill, it simply says that contract-based employment will be “in a short period of time”. Further provisions regarding the contract period and the time limit as well as the type and nature of work that can be included in the contract-based employment are regulated in the government regulation. This gives the workers uncertainty in their chance of being recruited as permanent workers. Contract and outsourced workers’ fate are increasingly uncertain, without job security.
As a form of protest, 32 federations and confederations of trade unions will rally and strike on 6-8 October 2020.
25 times the wage
Another provision that is on the spotlight is the reduction in the amount of severance pay for workers, from previously at a maximum of 32 times the monthly salary to 25 times wages. The company would pay 16 times the wages of the worker. The state would bear the remaining 9 times the wages through the JKP scheme.
He claimed the substance of the bill is to increase protection for workers.
In Article 42 Paragraph 2 of the job creation bill, it is stated that the initial capital for the JKP program is set at least Rp 6 trillion which is earmarked in the State Budget (APBN). Further provisions regarding severance pay will be regulated in the government regulation.
Secretary general of the Indonesian Forum for Budget Transparency (Fitra) Misbah Hasan said that the regulations on severance pay would burden state finance in the medium and long term. The new regulation also has the potential to make layoff easier.
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BP Jamsostek social security program admits that it does not yet know the details of the JKP scheme plan. BP Jamsostek deputy director of public relations and inter-agency, Irvansyah Utoh Banja, said that there is still a need to discuss with the government on the simulation of the calculation of contributions and benefits, including the source of funding.
Chairman of the working committee on the job creation bill, who is also chairman of the House’s Legislation Body, Supratman Andi Agtas, denied opinions that the bill is detrimental to workers. He claimed the substance of the bill is to increase protection for workers. One of the rules that protects the workers is the JKP which is managed through the Workers Social Security Agency (BPJS Ketenagakerjaan) mechanism which is fully borne by the state.
After the passing of the bill into law, Manpower Minister Ida Fauziyah wrote an open letter to the labor union. She said the government tries to find a balance between protecting people who are employed and giving opportunities to those who are still unemployed. (AGE/REK/KRN/MTK/DAN/ FRD/FAI/JOG/VIO/NDU/HRS/ IKI/NIK/MEL/XTI/IDO)