Indonesia: Important Points Of The New Government Regulation In Lieu Of Law On Job Creation

IMPORTANT POINTS OF THE NEW GOVERNMENT REGULATION IN LIEU OF LAW ON JOB CREATION

The new Government Regulation in Lieu of Law No. 2 of 2022 regarding Job Creation (Peraturan Pemerintah Pengganti Undang-Undang No. 2 tahun 2022 tentang Cipta Kerja, "Perppu Ciptaker") was officially enacted by the government on 30 December 2022. This regulation repeals Law No. 11 of 2022 regarding Job Creation ("Job Creation Law"). The Government provides that the Perppu Ciptaker was issued in anticipation of possible economic and geological challenges and therefore committed towards amending the Job Creation Law prior to November 2023, which was the deadline set in Constitutional Court Decision No. 91/PUU-XVIII/2020.

The Perppu Ciptaker amends all four laws regarding manpower, much like the original Job Creation Law. However, in today's BILLawFact we will start a series going over a few important points regulated in the Perppu Ciptaker.

Short Term Employment Agreement (Perjanjian Kerja Waktu Tertentu, "PKWT")

The Job Creation Perppu does not regulate the contract period. It is interesting to note that workers have voiced their rejection towards this, reasoning that this allows employers to repeatedly create short term employment agreements. On the other hand, Law No. 13 of 2003 regarding Manpower ("Manpower Law") regulates the contract period.

Severance Pay

The Perppu Ciptaker does not amend the provisions regarding severance pay. Workers or laborers who experience layoffs will still receive severance pay, long service pay, and also compensation money in accordance with statutory regulations. Victims of layoffs can receive severance pay depending on their length of service, with a maximum severance pay of 9 times their monthly wage.

Foreign Manpower

Article 42 paragraph (1) of the Perppu Ciptaker explains, every employer who employs foreign manpower is required to have a plan for using foreign workers which is approved by the Central Government. It should be noted that this faced rejection from the labor party and requested that there must be written permission from the minister or official appointed to be responsible for foreign manpower.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.