By: Gavin Asadit )*
The Indonesian government has shown proactive steps in maintaining national employment stability by planning to establish a Termination of Employment Task Force (Satgas PHK). This step comes amidst growing concerns about the increasing number of layoffs as a result of the increase in the Provincial Minimum Wage (UMP) in 2025 which will reach 6.5%. The plan to establish this Task Force deserves appreciation, considering the increasingly complex challenges of the world of work due to changes in policy, global economic conditions, and digital transformation that affect work patterns and industrial structures.
The Coordinating Ministry for Economic Affairs, led by Airlangga Hartarto, said that the PHK Task Force will be a temporary institution tasked with reviewing and handling the potential and reality of layoffs that occur as a direct or indirect impact of the wage increase policy. The government is aware that the increase in the UMP, although intended to improve worker welfare, can cause additional pressure on the business sector, especially labor-intensive industries such as textiles, garments, footwear, and other manufacturing sectors.
Responding to the plan to form a PHK task force, Minister of Manpower (Menaker) Yassierli also said that the formation of the PHK Task Force is in line with the Ministry of Manpower’s long-standing plan. The formation of this Task Force has been a long-standing discourse and has been discussed internally. On the President’s orders, we will immediately execute it.
Based on data from the Ministry of Manpower, until October 2024 the number of workers affected by layoffs has reached 63,947 people. This figure is almost equivalent to the number of layoffs throughout 2023 which reached 64,884 people. This spike certainly indicates serious pressure faced by the business sector, both in terms of increasing operational costs and decreasing market demand. If not anticipated immediately, this trend has the potential to cause a new wave of unemployment which will impact people’s purchasing power and national economic growth.
Through the Layoff Task Force, the government wants to ensure that wage policies do not backfire on the world of work. This task force will not only monitor and analyze data related to layoffs, but is also expected to provide strategic recommendations based on accurate and factual data. One of the main tasks of this task force is to identify the sectors most vulnerable to layoffs and to map the main causes of layoffs, both from internal company factors and external factors, such as macroeconomic conditions and international trade policies.
This step shows that the government is trying to balance the protection of workers’ rights with business continuity. This is important because basically workers and employers are two interdependent entities. Workers’ welfare cannot be separated from business continuity, and vice versa, business productivity and competitiveness are greatly influenced by the welfare of the workforce. Therefore, the formation of the PHK Task Force is also an important momentum to strengthen social dialogue between the government, employers, and trade unions.
Meanwhile, the Director General of Industrial Relations and Social Security for Workers (PHI and Jamsos) of the Ministry of Manpower, Indah Anggoro Putri, said that the focus of the Task Force’s work will involve many ministries and stakeholders across sectors. Its function is not only to handle layoffs, but also to mitigate and expand employment opportunities.
Given this, appreciation also needs to be given to this initiative because it shows a collaborative approach. In its work process, the PHK Task Force is expected not to work in a closed manner, but to involve many parties, including employer associations, labor unions, academics, and labor research institutions. The involvement of all parties will ensure that every recommendation produced truly reflects the reality on the ground and can be implemented effectively.
It is hoped that the presence of the Layoff Task Force will also encourage more adaptive employment policy reforms to the changing times. In this digital and automation era, work patterns and workforce needs continue to change. Therefore, the government also needs to prepare long-term steps, including improving skills and retraining (reskilling and upskilling) of the workforce so that they remain relevant in the new job market. Thus, the potential for layoffs can be reduced not only with short-term mitigation policies, but also through the development of a more resilient employment system.
Another step that can be developed by the Task Force is to encourage the role of the business world to develop more adaptive, sustainable, and innovation-based business models. When the industry is able to adapt to changing global trends, the risk of layoffs can be minimized. The Task Force can also be a bridge between the business world and the government in voicing structural obstacles that may be faced, such as regulatory burdens, access to financing, and increasing production costs.
This step will also strengthen public trust that the government is present and cares about the fate of workers. On the other hand, business actors will also feel that their voices are heard and considered in public policy making. If managed well, the PHK Task Force can become a model of modern, responsive, and solution-oriented labor governance.
)* The author is an observer of social and community issues
