Law (UU) Number 11 of 2020 concerning Job Creation is an omnibus law that regulates changes to various sector regulations with the aim of improving the investment climate and realizing legal certainty. The Omnibus law breakthrough allows 80 laws and more than 1,200 articles to be revised with the Job Creation Law which regulates multi-sector. Thus, the revision cuts out articles that are not effective.
This breakthrough is needed to improve the business climate, improve horizontal and vertical policies that conflict with each other, increase Indonesia’s regulatory index which is still low, overcome the phenomenon of hyperregulation and inefficient policies, as well as laws that are sectoral and often out of sync.
The Job Creation Law aims to encourage investment, accelerate economic transformation, harmonize central-regional policies, provide ease of doing business, overcome overlapping regulatory problems, and eliminate sectoral egos.
Even though the Constitutional Court (MK) ruled that the Job Creation Act was unconstitutional, the government still guaranteed that investment in Indonesia had legal certainty. The Constitutional Court in its ruling stated that, although it contradicts the 1945 Constitution, the Job Creation Law will still apply until the government and the DPR make improvements. President Jokowi has ordered related ministers to follow up on the Constitutional Court’s decision.
The government guarantees that investments that have been invested and will be invested in Indonesia based on Law Number 11 of 2020 concerning Job Creation, are safe and have legal certainty. For this reason, investors, both domestic and foreign, are expected not to be afraid or hesitant to invest in Indonesia.
The Job Creation Law is expected to create a conducive investment climate, and will absorb more workers, thereby reducing unemployment, increasing economic growth, and increasing worker productivity. The Job Creation Law has several strategic policies. These policies are improving the investment ecosystem and business activities, protecting and welfare of workers, facilitating, empowering, and protecting Micro, Small and Medium Enterprises (MSMEs).
In addition, other policies include increasing government investment and national strategic projects.
In addition, the Job Creation Law has a myriad of benefits for workers, one of which is the Termination Guarantee Program (PHK). This program provides benefits in the form of cash benefits, and training as well as upgrading, reskilling and access to the labor market.
In the midst of a pandemic, layoffs haunt workers. This program is later considered to be able to protect workers who have been laid off for a certain period of time. During this time, workers can take advantage of the time to look for other jobs. This protection is not only given to formal workers, but also ensures protection for workers in the micro and small business sector.
In addition, the Job Creation Law will encourage investment with a simple licensing system. The business activity licensing process has now been changed from permit-based to risk-based. A system called Risk-Based Licensing can be obtained online through the Online Single Submission Risk Based Approach (OSS-RBA). An easier and faster licensing system will certainly help improve the country’s economy. This is because a good licensing system will make potential investors more interested in investing in Indonesia.
In the future, with the revision of the Job Creation Law, it is hoped that it will encourage the entry of quality investment so that it will have an impact on employment and increase economic growth in Indonesia.
)* The author is a socio-economic observer