By: Amanda Nurlita Cahya )*
The Job Creation Law (UU) can increase protection for workers, including in situations of layoffs. By regulating better compensation, clearer procedural standards, and promoting investment and economic growth, this law is expected to create a more stable and fair working environment for all parties.
The Job Creation Law regulates the compensation that must be given to workers who are unfairly laid off. In this law, employers are required to provide greater compensation to dismissed workers, depending on the length of service and the reason for the layoff. This is considered a positive step in protecting workers from the economic impact that may arise due to job loss.
Workers affected by layoffs receive protection from the state to ensure their survival. One form of this protection is providing severance pay. Provisions regarding the amount of severance pay for workers who are victims of layoffs are regulated in Government Regulation in Lieu of Law (Perppu) No 2/2022 concerning Job Creation. This Perppu was passed into law at the 19th Plenary Session of the DPR RI during the fourth session of the 2022-2023 session, on March 21 2023.
The Job Creation Law stipulates that workers who have worked for a maximum of 8 years or more and are victims of layoffs will receive severance pay of 9 months’ wages. Meanwhile, for workers who have only worked for 1 year, the severance pay they will receive is 1 month’s wages. It is hoped that this provision will provide sufficient financial security for workers affected by temporary layoffs.
The Job Creation Law regulates various important aspects regarding protection for workers affected by layoffs. One of the protections regulated in this law is the provision of reward money and replacement money for laid-off workers. This provision provides legal certainty and financial support for workers who lose their jobs.
Based on the Job Creation Law Article 153 Paragraph 3, the amount of reward money given to workers is adjusted to their length of service. The longer a worker has worked, the greater the reward money he or she will receive. This provision aims to appreciate the contribution and loyalty of workers while working at the company.
Apart from reward money, the Job Creation Law also regulates other rights for laid-off workers, namely replacement money. This is stated in Article 156 Paragraph 4 which regulates that workers who are laid off have the right to receive compensation which is calculated based on their length of service and type of work contract. This replacement money includes compensation that has not been received by workers, such as leave rights that have not been taken and other benefits that should have been received. This provision ensures that laid-off workers receive their rights fairly and in accordance with the contributions they have made while working.
In addition to reward money and replacement money, the government also provides Job Loss Insurance (JKP) as a form of extra protection for workers affected by layoffs. Coordinating Minister for Economic Affairs, Airlangga Hartarto, explained that JKP provides various benefits to laid-off workers, including financial assistance ( cash-benefit ), skills improvement training ( upskilling and upgrading ), as well as access to the labor market. The aim of JKP is so that workers can quickly find a new job or open their own business, so that they are not down for too long due to losing their job.
Cash-benefit benefits from JKP provide temporary financial support for workers who have lost their jobs, helping them meet basic needs while looking for new work. The upskilling and upgrading program which is part of the JKP is designed to improve workers’ skills and competitiveness in the ever-growing labor market. With improved skills, workers have a greater chance of getting a job that suits their abilities or even starting a new business.
Minister of Manpower Ida Fauziyah emphasized that the employment substance contained in the Job Creation Law is the government’s effort to provide adaptive protection for workers. This is important considering employment challenges are increasingly dynamic and complex. Minister of Manpower Ida emphasized that the government is committed to protecting workers’ rights, especially in situations of layoffs which can occur at any time. With the JKP and provisions regarding reward money and replacement money, the Job Creation Law is expected to provide comprehensive protection and help workers face various dynamics in the world of work.
The Job Creation Law is designed to create a balance between company interests and workers’ rights. With the existence of regulations regarding reward money and replacement money, it is hoped that workers affected by layoffs can receive adequate financial support to help them in the transition period to find new work. Apart from that, it is also hoped that this provision will encourage companies to be more careful in making layoff decisions, taking into account the impact it will have on workers.
Thus, the Job Creation Law is an important instrument in providing protection and certainty for workers facing layoffs. Through this law, the government seeks to respond to increasingly dynamic employment challenges by providing adaptive and comprehensive protection mechanisms. The hope is that this step can provide a sense of security and justice for workers in Indonesia.
)* The author is a Labor Observer living in Jakarta