Omnibus Jobs Bill

[Dave70]

Nobody would be hiring permanent workers if you can hire temporary ones indefinitely.

The severance pay situation is shitty, but the problem is there are no unemployment benefits/insurance in Indonesia. Instead the government has downloaded that responsibility to the employer.

Exactly, now nobody would be hiring permanent workers.

Before 2003, temporary workers were uncommon.

Businesses actually prefer permanent workers because loyalty is good for business.

How can we expect worker's loyalty and dedication if they are temporary workers?

 

[JoePel]

I think it is a great law. The more control the government has the better. Just need to jail those protesters.
Should follow China’s lead. Hopefully more Chinese businesses will come, creating jobs. The Chinese have shown the world how sensible they are maintaining law and order. Their response to uprising in west China has been outstanding. The closer we slide to communism the closer to equality for all. I do needs to open manufacturing and farming. Get people out there working. Might sound a little rough but better than living in poverty for decades.

 

[harryopal1]

So what do we make of Mr JoePel? A right wing, gun carrying, shoot first ask questions later redneck but a Chinese Communist enthusiast?

I cant help but wonder if he is actually a mainland Chinese plant tasked with stirring up conflict between bourgeois muddle headed westerners and other running dog imperialists?

 

[JoePel]

Can’t put everyone into the one box , my views differ on many complex things, I will protect my family and clients but I dislike weak people. The Chinese government, much like Putin are tough, many aspects of communism is fantastic. Limiting sizes of families if no money to pay is good. But capitalism is also good. A head scratcher. Need to take the best from each side of politics.
If only AI could be used instead of people to govern.

 

[JoePel]

And it’s rude to call someone redneck. Unless you are an old man dribbling on your keyboard warrior.

 

[harryopal1]

And it’s rude to call someone redneck. Unless you are an old man dribbling on your keyboard warrior.

Okay, I withdraw "redneck" and apologize if that seemed rude even if I now come across as a "weak" old man dribbling on my keyboard. Given the views you have expressed, how would you prefer to describe yourself?

 

[HappyMan]

Yup, should've read 2+1.

My reading of the old regulations was that the work was also meant to be of a non-permanent nature. So, a temporary contract for someone refurbishing the floors in a shopping mall would be okay, but a temporary contract for someone routinely cleaning them would not.

 

[Bad_azz]

Okay, I withdraw "redneck" and apologize if that seemed rude even if I now come across as a "weak" old man dribbling on my keyboard. Given the views you have expressed, how would you prefer to describe yourself?

I still love you HarryO dribbling or not
Funny how someone objecting to 'redneck' has to respond with ageist crap.
I guess I shall have to pop another plank on my ignore list... one who dislikes weak people- says volumes doesn't it.

Hatred and the attachment to negative emotions really only fks up the life of the toxic person it emanates from, so sitting back watching them implode is kinda fun in a deep sadistic way (my way) .

 

[Helpful Herbert]

From what I have heard people look on the severance payment as their pension. So it is an attack on people's pensions, which will never go down well.

 

[rabbit_39]

I'd hire people permanently if the system was not debilitating for a bootstrapped start up company. I can't even fire someone for gross misconduct without having to pay severance pay.

 

[macvert]

sitting back watching them implode is kinda fun in a deep sadistic way (my way) .

The entertainment value is priceless

 

[dafluff]

The damn thing is 900+ pages long. Here is a LINK.

It basically replaces sections of a bunch of laws, from fishing laws, to environmental protection, to hospitals, to investment. Of particular interest to the forum maybe the changes in the the Employment Law (UU 13/2003 - Ketenagakerjaan) and Immigration Law (UU 6/2011 - Keimigrasian)

I had a quick browse through, the only thing that I found interesting in the immigration law is that there is now the possibility of a second home KITAS/P. There is also the possibility for foreigners to own apartments with a hak milik title, however the land it sits on is still HGB.

Also a possibility to immediately convert VITAS to KITAS at the border (no need to go to immigration to convert).

Please note that all of these are contingent on further regulations as usual (PP, Perpres, Permen...etc).

Will post more if I find anything else interesting.

So the official version to be signed by the president is 1,035 pages long. An explanation why it is that much longer includes "formatting" and "fixing typos".

A link to this version is available from https://cdn.cnbcindonesia.com/cnbc/ruu-cipta-kerja.pdf

Ternyata 1.035 Halaman, Ini Naskah Final Omnibus Law Ciptaker

Pemerintah akhirnya merilis UU Cipta Kerja yang baru disahkan DPR kemarin.

www.cnbcindonesia.com

 

[Bad_azz]

So the official version to be signed by the president is 1,035 pages long. An explanation why it is that much longer includes "formatting" and "fixing typos".

A link to this version is available from https://cdn.cnbcindonesia.com/cnbc/ruu-cipta-kerja.pdf

Ternyata 1.035 Halaman, Ini Naskah Final Omnibus Law Ciptaker

Pemerintah akhirnya merilis UU Cipta Kerja yang baru disahkan DPR kemarin.

www.cnbcindonesia.com

Sounds as though it was me who typed it, I spend half my typing-life fixing typos

 

[dafluff]

Good news! Now the law is only 812 pages long, after using legal sized paper.

Draf RUU Cipta Kerja Diperbarui Lagi, Berubah Jadi 812 Halaman

Sebelumnya, beredar draf RUU Cipta Kerja dengan jumlah 1.208, 905, dan 1.035 halaman.

nasional.kompas.com

 

[dafluff]

The Indonesian parliament’s approval of the Omnibus Law on Job Creation on 5 October marks a significant enhancement of the business climate and a step forward for labour market flexibility, which should, over time, improve the country’s international competitiveness, provided the changes are well implemented, says Fitch Ratings.

The reforms’ effects will depend on how they are implemented. The Omnibus Law stipulates that a number of additional regulations need be passed in key areas such as labour legislation. Other measures may be challenged in the Constitutional Court. Meanwhile, the new legislation has been met with protests by labour groups, which could prompt the authorities to water down its provisions. Even if they remain intact, business regulation will still be complex and burdensome, relative to many other markets in ASEAN. Moreover, although maximum worker severance costs look set to fall by around 40% from levels that were previously among the region’s most generous, they will remain high enough to be a concern for some foreign investors.

https://www.fitchratings.com/research/sovereigns/indonesias-reform-package-boosts-growth-prospects-14-10-2020

 

[Dave70]

For businesses, this Omnibus Law is worse than expected, now an employee can resign and ask for severance payment. For example, you hired a cook, and you trained him to make sushi. A year later, he said "Boss, I'm resigning, and I want my severance". You asked him why, and he said the Japanese restaurant next door offered him higher pay. The 2003 Labor Law was initially also like this, and it created lots of problem for employers, so it was later revised, only termination gets severance, not resignation. For temporary workers, it is now stipulated that they are entitled to "compensation" at the end of the contract. How much, we will know later. And last but not least, minimum wage is now decided by Governors, not the central government anymore. So I expect Governors to increase more when election time is near. Not good when some provinces have higher growth due to export of natural resources but little manufacturing to speak of.

 

[centurion]

For businesses, this Omnibus Law is worse than expected, now an employee can resign and ask for severance payment. For example, you hired a cook, and you trained him to make sushi. A year later, he said "Boss, I'm resigning, and I want my severance". You asked him why, and he said the Japanese restaurant next door offered him higher pay. The 2003 Labor Law was initially also like this, and it created lots of problem for employers, so it was later revised, only termination gets severance, not resignation. For temporary workers, it is now stipulated that they are entitled to "compensation" at the end of the contract. How much, we will know later. And last but not least, minimum wage is now decided by Governors, not the central government anymore. So I expect Governors to increase more when election time is near. Not good when some provinces have higher growth due to export of natural resources but little manufacturing to speak of.

I think the main problem with the previous law and the present, amended Manpower law, is that is very strict but is implemented loosely. On paper you have strong protective provisions for workers, in practice, a very small amount of workforce is employed by this law. Majority of the workforce is in the informal sector, or have no contracts at all, or they don't get their copies of the contracts. BPJS TK (obligatory social security) has currently reported 35 million participants only (and from that only 13.8 million employees with a salary bellow 5 million), and this includes government employees as well. The Indonesian currently employed workforce is around 120-125 million people, meaning the rest is without contracts and not reported to the BPJS social security.

The net effect is that only big local/foreign employers are employing workers by Manpower Law and that employers in the small and medium enterprises are reluctant to give you an indefinite contract, or even a temporary contract(i.e workers work without contract). Meaning the Law is strict but the protection of the workers is weak. But if you enforce this law strictly to the whole workforce and all employers, small and big, the economy would collapse as the provisions are a big burden to the employers.

Better would be to have less draconian law but widely and more strictly implemented to the whole workforce.

 

[dafluff]

And last but not least, minimum wage is now decided by Governors, not the central government anymore. So I expect Governors to increase more when election time is near. Not good when some provinces have higher growth due to export of natural resources but little manufacturing to speak of.

Regional minimum wage was previously also set by governors. In addition to that, mayors and regents could set their own minimum wage for each city/regency, which must be the same or higher than the rate set by the governor. Further, there is also sectoral minimum wage (depending on industry), which can't be lower than either the provincial or regency level minimum wage.

So previously there were Provincial minimum wage, City/Regency minimum wage and sectoral minimum wage. Now there is only provincial minimum wage.

Here is an article we did on minimum wage in 2017-18:

Minimum Wage in Indonesia (UMP): A guide for Expats - Expat Indo

Covering all you need to know about the Indonesian Minimum Wage. Updated to include the rates for 2018. Must read if you are an employer in Indonesia.

www.expatindo.org

 

[Dave70]

Regional minimum wage was previously also set by governors. In addition to that, mayors and regents could set their own minimum wage for each city/regency, which must be the same or higher than the rate set by the governor. Further, there is also sectoral minimum wage (depending on industry), which can't be lower than either the provincial or regency level minimum wage.

So previously there were Provincial minimum wage, City/Regency minimum wage and sectoral minimum wage. Now there is only provincial minimum wage.

Here is an article we did on minimum wage in 2017-18:

Minimum Wage in Indonesia (UMP): A guide for Expats - Expat Indo

Covering all you need to know about the Indonesian Minimum Wage. Updated to include the rates for 2018. Must read if you are an employer in Indonesia.

www.expatindo.org

You are right, governors set the regional minimum wage and mayors/regents set their own. But the governors were just following the instructions of the central government regarding percentage of increase calculated based on national growth plus inflation. Now governors don't have to follow the central government, they can increase based on their province's growth or inflation (I guess whichever is higher). So a province with high growth can have double digit increase (for example) while other provinces may have single digit increase. Just made me thinking what happens if inflation is 30% or more, will wage increase that much too?

 

[HappyMan]

Implementation is always the problem. I know a few people who buy/sell/produce commodity goods and say there is now way that they can afford to follow government regulations... unless their competition does the same. When margins are tight and you have higher labour costs that all your competition... you feel like you are losing (even if you do end up making a profit). Nobody wants to feel like a chump.

Obviously, it is the workers who are truly losing out in this deal, as full implementation would have all the producers raising their prices by a similar amount ( to cover higher labour cost).

How would you have Manpower handle implementation? I was thinking they could make registering the number of employees your business employs mandatory and then do random spot checks at businesses to count heads. Have a registration for 150 workers but 300 people in your factory? Great, here's your fine.
That would at least give you a way to get BPJS to work a bit better. I know it sounds difficult, but they manage to have registration for every motorized vehicle. They check cars one by one. Seems simpler to go to an office and count heads.