The Job Creation Law, or better known as the Job Creation Law, the universal sweep law and the omnibus law , has been a hot and controversial topic since its initial discussion. This law is a major reform in labor and business law in Indonesia. The Job Creation Law or Law Number 11 of 2020 concerning Job Creation is a law in Indonesia which was passed on October 5 2020 by the DPR RI and promulgated on November 2 with the aim of creating jobs and increasing foreign and domestic investment. country by reducing regulatory requirements for business permits and land acquisition.
Even though it is controversial and has been debated in various circles because it is feared that it will benefit company owners and harm workers’ rights and increase deforestation in Indonesia by reducing environmental protection, in fact there are many benefits or advantages that can be identified from the implementation of the Job Creation Law which are believed to be able to protect workers. laborers and workers and of course supporting Indonesia’s economic progress.
One of the main benefits expected from the Job Creation Law is an increase in foreign investment in Indonesia. This law creates a friendlier environment for foreign investors by simplifying business procedures, reducing bureaucracy, and providing fiscal incentives. Thus, Indonesia becomes more attractive for multinational companies to invest in various sectors, from manufacturing to technology. Increasing foreign investment can produce a number of positive impacts. First, it can create new jobs, help reduce unemployment rates, and raise people’s living standards. Second, foreign investment also brings the latest technology and business practices, which can help increase the productivity and competitiveness of domestic industry.
Furthermore, the Job Creation Law aims to eliminate administrative obstacles that have been disrupting business activities. By simplifying licensing procedures and reducing complicated regulations, this law makes it easier for business actors, especially small and medium entrepreneurs, to start and manage their businesses. This ease of doing business can bring significant benefits. Firstly, entrepreneurs will be able to allocate more time and resources to growing their businesses rather than getting bogged down in complicated bureaucracy. Second, it can increase Indonesia’s attractiveness as an investment destination and encourage private sector growth.
Not only for business actors, workers will also get better benefits and increased protection compared to the Employment Law. The Job Creation Law provides a guarantee of certainty in providing severance pay by implementing the Job Loss Guarantee Program (JKP). JKP is a form of protection for workers affected by Termination of Employment (PHK) in the form of cash benefits, upskilling and upgrading , as well as access to the labor market. With this new program, workers who are victims of layoffs are protected by the state for a certain period of time to find new jobs. Apart from that, with the opening of fixed-term work agreements (PKWT) for all types of work, job opportunities will become more widely open.
Meanwhile, for Micro, Small and Medium Enterprises (MSMEs), the benefits obtained from the Job Creation Law are in the form of support in the form of convenience and certainty in the licensing process through OSS (Online Single Submission ) . MSME players are also given convenience in registering Intellectual Property Rights (IPR), establishing an individual Public Company (PT), as well as simplified requirements and low costs. For example, in establishing a PT, a notarial deed of company establishment is not required, but only requires company statements made electronically and ratified by the Ministry of Law and Human Rights. This can certainly encourage certainty of legality for MSME players.
Through the Job Creation Law, the Indonesian government has more flexibility to develop much-needed infrastructure. Increased private investment, especially in infrastructure sectors such as transport and energy, could help speed up the development of these projects. Infrastructure improvements are key to sustainable economic growth. A good transportation network, for example, can facilitate the distribution of goods and reduce logistics costs, which will ultimately increase the competitiveness of domestic companies.
Increased investment, economic growth and infrastructure improvements expected to result from the implementation of the Job Creation Law can all contribute to reducing poverty levels in Indonesia. New jobs created by foreign investment and business sector growth can provide employment opportunities for people who were previously unemployed or worked in the informal sector.
Through incentives for companies to innovate and protect intellectual property rights, the Job Creation Law can encourage technological development and innovation in various sectors. This can help Indonesia become more competitive in the global market and reduce dependence on technology imports.
The existence of the Job Creation Law is very important for national interests, considering that various international institutions predict that the global economy will be filled with uncertainty throughout 2023. So the Job Creation Law is an anticipatory step for the government in dealing with this uncertainty and at the same time to guarantee the creation of legal certainty.
