Job Creation Perppu is considered to contain unclear provisions and the process for the establishment has not included menaingful public participation.
Heaptalk, Jakarta — The Indonesian government officially issued Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation (12/30). According to Coordinating Minister for the Economy Airlangga Hartarto, the Perppu was issued taking into account the urgent need to anticipate global conditions, both related to the economy and geopolitics.
“The government needs to accelerate anticipation of global conditions, related to the economy, we are facing a global recession, rising inflation, then the threat of stagflation,” said Airlangga. On the geopolitical side, the world encounters the Ukrainian-Russian war and other conflicts that are also unfinished. In addition, almost all countries have to deal with crises of food, energy, finances, and climate change. The existence of this Perppu is expected to provide legal certainty, including for business actors.
President Joko Widodo responded to the controversy over the issuance of the regulation calmly. “Yes, in every policy, in every regulation issued, there are pros and cons. But we can explain everything,” said Joko Widodo during a visit to Tanah Abang, Jakarta (1/2).
Points in the Perppu which are considered detrimental to workers
According to the Indonesian Trade Union Confederation (KSPI), most of the articles in the employment cluster in the Job Creation Perppu have no differences from the Job Creation Law which previously also caused controversy. KSPI President Said Iqbal said that the position of workers remained weak despite changes to the contents of the article, as quoted by BBC Indonesia.
Said mentioned several points in the Perppu which were considered unclear and tended to harm workers, one of which was related to the regency/city minimum wage. In Job Creation Perppu, wages are regulated in articles 88C to 88F but the provisions governing sectoral wages are omitted. Meanwhile, regency/city minimum wages become unclear as stated in article 88C paragraph 2, “The governor can set the regency/city minimum wage.”
In addition, article 88D paragraph 2 contains, “The formula for calculating the minimum wage takes into account the variables of economic growth, inflation, and certain indices.” According to Said, certain index terms raise questions. “Wage determination is usually a survey of 60 items of decent living needs or inflation plus economic growth. Meanwhile, who determines a particular index?” voiced Said in a virtual press conference in Jakarta, as cited by BBC Indonesia (1/1).
Further, the Perppu does not explain in detail the types of work that can be carried out by outsourced workers. KSPI asked the government to return the regulations for outsourced workers to Labor Law No. 13 of 2003 which limits five types of work, namely drivers, cleaners, security, catering, and mining oil and gas services. Said delivered, “Since it is not mentioned, the matter became even more unclear. This means that the regulation liberates all types of work to be outsourced.
KSPI highlighted that the rules for contract workers are still the same as those written in the Job Creation Law which is not explaining a time limit. Instead, the Labor Law has stipulated that workers can be contracted for a maximum of two years and extended for one year.
Apart from that, the severance pay regulated in the Job Creation Perppu is still duplicating the Job Creation Law, with slight differences namely the removal of the phrase ‘at least’ which was previously listed in the Labor Law. According to Said, this provision resulted in workers not being able to negotiate severance pay, which normally could receive an amount two or three times greater than the stipulation according to the company’s ability.
Said also stated that the long leave stipulations no longer apply. Previously, the Labor Law required companies to provide long leave of at least two months. However, these provisions are not regulated in the Job Creation Perppu. Article 79 paragraph 5 of the Perppu states, “Certain companies can provide long breaks as stipulated in work agreements, company regulations, or collective labor agreements.”
Due to the unclear provisions in the Perppu, Said firmly asked for the rules to be returned to the previous law, namely the Labor Law.
The formation of the Job Creation Perppu is dubious
The issuance of the Perppu on Job Creation sparked controversy as it was inconsistent with the results of the Constitutional Court decision which previously assessed the Job Creation Law to be formally flawed.
Deputy Chairperson of Commission IX at the House of Representatives Kurniasih Mufidayati said that in consideration of the Constitutional Court’s decision, the Job Creation Law was formally flawed since the procedure for its formation was not based on a definite, standardized method, and aligned with the systematics of forming a law. With the issuance of the Perppu, the government actually eliminated the legislative function of the House of Representatives.
Apart from having problems in terms of substance, the process for establishing the Job Creation Law is also questionable since the public experienced difficulty in accessing the draft. In addition, the draft also changed frequently.
“Both the process and substance are dubious. The Constitutional Court decided that conditional unconstitutionality with a term of two years must be corrected. If not, officially the entire Job Creation Law will be declared unconstitutional. This issuance of a Perppu does not improve at all both in terms of process and substance,” said Kurniasih.
Kurniasih also questioned the urgency that forced the government to issue this Perppu. She explained, “In terms of global conditions, there are inconsistencies. When it comes to achievements, President Jokowi has just boasted that Indonesia’s economic growth is the highest among the G20 countries. But the reason for issuing the Perppu is as if Indonesia is in an emergency and underperforming.”
Aligned with Kurniasih, the Jakarta Legal Aid Institute (LBH) stated that the Job Creation Perppu is not issued under a compelling predicament. In addition, the Constitutional Court considers that the process of forming the Perppu did not include meaningful public participation, the same as in the process of forming the previous Job Creation Law.
Therefore, LBH Jakarta urged President Joko Widodo to withdraw Perppu No. 2 of 2022 and the parliament not to approve the issuance of the Perppu. The institution also asked the President and the parliament to stop all forms of disobedience to the constitution and stop bad legislative practices. Further, LBH Jakarta emphasized that all processes of forming laws and regulations should be returned to the principles of the constitution, a democratic rule of law, and human rights.
