The omnibus bill on job creation is designed to improve Indonesia’s investment climate and create jobs. However, the regulation should not neglect the rights and welfare of workers.
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JAKARTA, KOMPAS —The government submitted a presidential letter and a draft law on job creation to the House of Representatives on Wednesday (12/2/2020). The move marked the start of deliberations of the draft law formulated using the omnibus law concept.
The bill on job creation was submitted by Economic Coordinating Minister Airlangga Hartarto to House Speaker Puan Maharani.
As the bill was being submitted, workers were protesting in front of the House complex in Senayan, Central Java. They opposed the bill because the process of drafting it was closed and did not involve the workers. It is feared that the bill, particularly nine points included in the bill, would ignore the rights of workers and harm their interests.
One of the points in the omnibus bill on job creation has caused concern because it reduces the severance pay for laid-off workers. Under Law No. 13/2003 on manpower, severance pay for laid-off workers is equal to nine months’ wages and can double to 18 months’ wages for certain types of layoffs.
In the omnibus bill on the job creation, a change in the formula means a reduction of severance payments.
"We support the inflow of investment, but workers should not be considered a barrier to investment and harm workers\' rights and welfare," said the president of the All-Indonesia Workers Union Confederation (KSPSI), Andi Gani Nena Wea.
Involving workers
According to Andi, the government involved workers to discuss the draft bill on Tuesday night (11/2/2020), while its drafting started when President Joko “Jokowi” Widodo unveiled plans to simplify a number of regulations through the issuance of omnibus laws in his inaugural speech following his appointment as president for the 2019-2024 term on Oct. 20, 2019.
"We hope that when deliberations start in the House later, workers can be included in the deliberating team," he said.
Before involving 14 labor unions and confederations, the government also formed a public consultation coordination team on the omnibus law on job creation on Feb. 7. The team consisted of representatives of employers, the government and academics.
Bonus as sweetener
Manpower Minister Ida Fauziyah confirmed there is a reduction in severance pay in the omnibus bill on job creation from those stipulated in the current Manpower Law because there is a change in the formula. However, there will be compensation offered by the government through a new formula that provides a loss of employment guarantee in the form of cash allowances, vocational training and access to new job placements.
"So, there are pluses and minuses. The severance pay is indeed lower, but there are other [forms of compensation] for workers who are laid off," Ida said.
Another form compensation offered by the government is a bonus that can reach five times the salary for active workers, not workers who are laid off.
Ida added that the reduction in severance pay was needed because not all entrepreneurs could afford to pay a high severance pay. Another form compensation offered by the government is a bonus that can reach five times the salary for active workers, not workers who are laid off.
This bonus will be given once in a year after the bill is passed. This bonus applies only to employees of large companies, not small micro and medium enterprises.
The chairman of the Indonesian Employers\' Association (Apindo), Hariyadi Sukamdani, hopes that the new law can encourage an inflow of new investments so that more jobs can be created. Commenting on the obligation imposed on companies to provide bonuses for employees, he said that it would certainly burden the employers. Therefore, the government should be able to balance the interests of workers and employers, he said.
"So far, not all companies have been able to meet the stipulations on wages and severance in the Manpower Law," he said.
When meeting with workers\' representatives, House Deputy Speaker Rachmat Gobel promised that the DPR would prioritize the welfare workers in the deliberation of the omnibus bill on job creation.
"We have to be able to attract investment, but our workforce should also be able to benefit from investments," he said. (AGE / REC)