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Omnibus Law on Job Creation Accomodates Severance Pay for Workers

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By: Putu Prawira )*

The loss of severance pay became a wild issue during the discussion until the work creation Omnibus Law was ratified. The public is also expected not to be affected because the policy does not eliminate severance pay for workers.

Prior to the ratification of the Job Creation Law, the Legislation Body (Baleg) of the DPR and the government agreed to amend the provisions for termination of employment (PHK) in the omnibus law draft of the Job Creation Bill.

Taufik Basari, a member of Panja Baleg DPR from the Nasdem Party faction, said that the severance pay for layoffs was fixed 32 times in accordance with Law Number 13 of 2003 concerning manpower.

However, there is a difference, namely that the employer and the government provide severance pay through the Job Loss Guarantee program (JKP). According to Taufik, the severance pay scheme will be included in the norms of the Job Creation Law.

He said that the results of the agreement at the Panja meeting would later be synchronized in the meeting of the formulating team (thymus) and the synchronization team (timsin).

Meanwhile, Member of Commission I of the Indonesian House of Representatives (DPR) Nurul Arifin confirmed that the discussion of the Omnibus Law on the Job Creation Law (Ciptaker Law) had been completed. Discussions including labor issues have been carried out by the Government, employers from the Indonesian Employers ‘Association (APINDO) and the Indonesian Chamber of Commerce and Industry (KADIN), as well as representatives of 16 workers’ federations.

One of the highlights of the omnibus law is the obligation of employers to provide bonuses to workers. He said that the issue of giving workers bonuses would be discussed more deeply, while still protecting workers’ rights but also paying attention to company capabilities.

Nurul explained, in the discussion of the Omnibus Law on the Job Creation Law, there was indeed a clause regarding the provisions regarding worker bonuses. The provision of bonuses is regulated in Article 92 Chapter IV concerning Manpower. Here it states the provisions regarding the company’s obligation to provide a bonus of up to 5 times the wages for workers or laborers who have worked for at least 12 years.

He added that the Omnibus Law could change the industrial approach that previously relied on low wages from workers to the concept of human capital, namely workers with education and skills according to industrial needs, having flexibility and the ability to innovate.

Nurul added, the change in the business landscape is on the one hand beneficial for workers or skilled and professional workers because they have a strong bargaining position in the industry. The Job Creation Law was created in the context of providing increased protection and increased welfare to workers.

This DPR’s initiative is certainly in line with the Ministry of Manpower’s efforts in finding common ground that accommodates continuity of work, increased worker protection, and sustainable business continuity.

Minister of Manpower Ida Fauziyah said the importance of this law is to accommodate the need for wider employment opportunities, but there we must maintain continuity of work and increase protection of workers and laborers, as well as sustainable business continuity.

Ida also emphasized that it was not true that the Job Creation Law was only intended to create wider employment opportunities by facilitating investment. He said the Job Creation Law was part of the efforts taken by the government to realize Indonesia’s vision of becoming a developed and prosperous country.

The need for a balanced work creation law became even more pronounced when the Covid-19 pandemic had an impact on decreasing economic growth, as well as of course on the health aspect.

Therefore, the community will soon be able to obtain various legal certainties, including severance pay.

Secretary of the Coordinating Ministry for the Economy, Susiwijono Moegiarso, said that the Government had completed discussion of more than 7,000 Inventory Lists of Job Creation Law Issues, which were carried out together with the Legislation Body (Baleg) of the DPR RI. With the completion of the DIM discussion, the process of completing the Job Creation Law in substance has been discussed.

With the completion of the discussion of the substance of the Job Creation Law, the public can get guarantees and severance pay from the government if there is a termination of employment (PHK).

The Job Creation Law is not only a certainty for MSMEs who want to get up and develop their business, but also a legal certainty for workers or workers when they are laid off or their work expires, so that company or industry owners do not arbitrarily provide severance pay or bonuses.

)* The author is a contributor to the Cikini Press Circle and Students

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