Friday, March 29, 2024 | 05:03 WIB

GOV’T ISSUES EMERGENCY REGULATION ON JOBS LAW: What does it mean to the Employment Sector?

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Timboel Siregar, SSi, SH, MM i
Timboel Siregar, SSi, SH, MM is an observer of social security systems. He graduated from the Bogor Institute of Agriculture (IPB) in 1994, majoring in Statistics. Later, he furthered his study in Human Resource Economics at Trisakti University, Jakarta. He has been active in BPJS Watch since 2010, also as Secretary General of Indonesian Workers Organization (OPSI) since then. He is currently serving as a national trainer for industrial relations with the Ministry of Manpower. He is a prolific opinion writer/ contributor to many national media and is often invited as a lecturer on campuses.

Fourth, Article 88D(2) of the Job Creation Law is revised in the Perppu by adding the phrase “certain indices” into “The formula for calculating the minimum wage as referred to in paragraph (1) takes into account the variables of economic growth, inflation and certain indices.” 

This addition is believed to be related to the issuance of Manpower Minister Regulation (Permenaker) 18/2022 on 2023 minimum wage which shows that the Government is aware that that Article 26 of PP 36/2021 on the formula for a minimum wage increase is unable to maintain the purchasing power of workers and their families. The 1.09 percent increase in minimum wage has been eroded by inflation which reached 5.51 percent year-on-year (YoY). Workers’ purchasing power has weakened significantly, and this will adversely affect household consumption which accounts for 52 percent of Indonesia’s GDP. 

Fifth, the Government also added Article 88F in Perppu 2, which reads “In certain circumstances the Government may stipulate a formula for calculating a minimum wage that is different from the one in Article 88D(2).” 

This addition also adds to the uncertainty which can potentially spark protests by employers and labor unions. The Government should have had a clear formula to determine the increase of minimum wage. 

The issuance of Perppu 2, which adds and revises several articles in the Job Creation Law, can be interpreted as the Government’s way of correcting mistakes it made in several articles of the Job Creation Law that contradict other laws. 

This is what happens if a law is made hastily with lack of public consultation. It also demonstrates that the quality of the Government and the House as the law-making authority is very low. 

Read: Deemed unconstitutional, Job Creation Perppu challenged at MK

Many fear that Perppu 2 can increase incidents of industrial dispute not only due to the reason behind its issuance but also because the new articles in it can potentially create more uncertainties, going forward. 

Thus, it is advisable that the Government withdraw Perppu 2 and immediately follow up on MK decision by inviting the public to discuss the revision to Job Creation Law. Workers today are facing a mass of problems that make them feel more insecure at work, such as expanded types of outsourceable work, longer work hours, more reasons to lay off workers with reduced compensation, liberal minimum wage determination that subsequently hits workers’ purchasing power. Therefore, the Government must renegotiate the employment cluster of the Job Creation Law, alongside its implementing regulations, that are beset with controversies. (Timboel Siregar)

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