Rushed validation of Job Creation Draft Law a risky move – many dangerous loopholes in labor law cluster

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Timboel Siregar Advocacy Coordinator of BPJS Watch and General Secretary of All Indonesian Workers’ Organization-Indonesian Workers’ Society Confederation (Organisasi Pekerja Seluruh Indonesia-Konfederasi Rakyat Pekerja Indonesia – “OPSI-KRPI”)

IO – The House of Representatives (Dewan Perwakilan Rakyat – “DPR”) and Government have agreed to validate the proposed Job Creation Draft Law at the upcoming Plenary Meeting on 8 October. They have agreed to accelerate the validation process, even though discussion on issues contained or implied therein was hardly qualified and only touched on stipulations “to be made using Government Regulation” instead of being regulated properly through a primary law.

Let’s take the example of the Draft Law’s Article 66. Members of the House’s Legislative Committee agreed that the provisions of Article 66 of Law Number 13 of 2003 “need not be amended, but shall be stipulated using Government Regulations.” In order to avoid confu-sion and misinterpretation, the contents of this Article 66 should have been spelled out clearly in the Job Creation Law and not be left to provisions in a Government Regulation. The Government might well resort to its own inter¬preta¬tions to suit its own needs instead of pri-oritizing the needs of the people (in this case, the common worker or laborer).

Such carelessness about setting out clear rules may also be seen with other important issues such as Specific Duration Job Agreements (Perjanjian Kerja Waktu Tertentu – “PKWT”), minimum wages, job relation severance (pemutusan hubungan kerja – “PHK”), severance pay and post-PHK compensa¬tion, and Job Loss Security (Jaminan Kehilangan Pekerjaan – “JKP”). This is unconscionable. These issues are related to the basic human rights of obtaining a good livelihood, good work, and decent social security, and should therefore be clearly regulated in Laws. In other words, they are within the jurisdiction of the DPR as the people’s representatives, and must not be left in the hands of the Government. The norms for these crucial issues were already set out in detail in Law Number 13 of 2003, but this is now being dissipated through Government Regulations (which are, of course, created by the Government).

The validation of Job Creation Draft Law into Law in the upcoming Plenary Meeting means that protection towards workers will be lowered. With restrictions towards PKWT and outsourcing removed, workers will lose job security, as they can be replaced at any time once their work agreements end. With PHK processes being simplified, job security will erode further. The constitutional right to secure decent work is being degraded by Job Creation Law. This is actually detrimental to the Government as well: simpler PHK meansmore people will lose their jobs and will thus need JKP assistance. This will be a great strain on the JKP program, and the Government will have to intervene to cover the burdens.

Now, about the minimum wage. The wording goes “regency/municipal minimum wage ‘may’ be replaced by a provincial minimum wage”. We all know that provincial minimum wage is set according to the lowest regency/municipal minimum wage level in the region. For example, this would mean that the minimum wages of Bekasi township will be matched with the minimum wage levels of Ciamis Regency at IDR 2 million a month. This is much lower than Bekasi’s current level of IDR 4.6 million a month. Therefore, implementing the provincial minimum wage will erode workers’ buying power and negate the mandate of the Constitution that all citizens deserve a decent livelihood.

Lower buying power means lower aggregate consumption, which will in turn dampen the circulation of goods and services. Poorer circulation means lower investment in goods and services, because if nobody buys or uses then why bother producing and providing them in the first place? This will in turn affect our economic growth. Public consumption contributes 55% to 60% to economic growth. The Government is seeking to raise economic growth to a positive level on the one hand, while weakening consumption levels on the other. This policy is simply contradictory.

Another detriment to the Government is that lower minimum wages means correspondingly lower National Health Security (Jaminan Kesehatan Nasional – “JKN”) fees, while the payment made by formal workers is the second-highest contribution to JKN income. Lowered formal worker fee payments will eventually increase the JKN deficit. This will mean a steeper Health Social Security Administrator (Badan Penyelenggara Jaminan Sosial – “BPJS”) deficit, which will have to be covered by the State Budget.

Other than lower income from JKN fees, income from the remaining four labor social security programs (Job Accident Security, Death Security, Old Age Security, and Pension Security) will also be less. Therefore, Labor BPJS has a weakened obligation to buy National Securities (Surat Berharga Negara – “SBN”), causing fewer funds available to cover State Budget deficits. Each of these is detrimental to the State Budget, no matter what.

In short, validation of the Job Creation Draft Law, specifically the Labor Law Cluster, is to prove a detriment to workers, entrepreneurs, and the Government. I hope that the Government and DPR will reconsider the validation of this Draft Law. Obviously, Workers/Labor Unions (Serikat Pekerja/Serikat Buruh – “SP/SB”) and workers/laborers will reject this validation. I myself consider this rejection to be correct, and support all workers/laborers in voicing their rejection.

I have heard of plans to implement national job strikes and protests to reject this Draft Law, but doing so will increase the risk of COVID-19 infection among workers/laborers. This is a very high risk. True, my friends in the SP/SB have calculated this risk. However, I really believe that they should find other ways to show their rejection of this Draft Law – ways that will avoid the spread of COVID-19. We don’t want crowds in strikes and protests to cause COVID-19 to spread among workers and their families and neighborhoods. I only hope that the Government and DPR take full responsibility and help prevent the spread of COVID-19 among workers/laborers. Therefore, the validation of this Draft Law must be delayed, and SP/SB must be brought in for more detailed and in-depth discussion of the Labor Law Cluster.

Montesquieu, the French political thinker from the Age of Enlightenment, discussed the separation of powers. The three State institutions – the Executive, the Legislative, and the Judicial – must be strongly insulated in their functions of daily State administration. The agreement between DPR and Government to validate the Job Creation Draft Law shows how DPR has blatantly ignored Montes¬quieu’s counsel in performing State administration. DPR has sold out the nature and philosophy of its duties and functions, only possible because the Government’s coalition political parties are the majority power in the House of Representatives. Essential decisions like this are made based on fear of the parties’ General Chairmen, who have declared their unanimity with the Government.

The only move SP/SB can make now is to wait to see how the Judicial institution, represented by the Constitution Court and the Supreme Court, will test the Job Creation Law as validated in the Plenary Meeting and relevant Government Regulations, to be created by the Executive Power, respectively.