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A virtual panel preliminary examination hearing of the judicial review of the Job Creation Law, Wednesday (4/11/2020) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Gani.

JAKARTA, Public Relations of the Constitutional Court—The preliminary examination hearing of the judicial review of Law No. 11 of 2020 on Job Creation was held virtually on Wednesday, November 4, 2020. The petition No. 87/PUU-XVIII/2020 was filed by the Singaperbangsa Trade Union Federation’s (FSPS) central executive board, represented by chairman Deni Sunarya and secretary Muhammad Hafidz. The federation challenges Article 81 points 15, 19, 25, 29, and 44 of the Job Creation Law.

Muhammad Hafidz said the provisions in those articles potentially harm the Petitioner’s members’ constitutional rights as well as those of other workers, which are guaranteed by Article 28D paragraphs (1) and (2) of the 1945 Constitution. He stressed that the law had eliminated the extension, limit of extension, and renewal of employment agreements made for a specified period of time (PKWT) as well as reimbursement of housing, medication, and care as components of employment termination. He explained that the Job Creation Law was even worse than the Manpower Law as it doesn’t implement the Constitutional Court Decision No. 7/PU-XII/2014, thus is against Article 28D paragraphs (1) and (2) of the 1945 Constitution.

He said Article 81 point 15 of the Job Creation Law amended the material in Article 59 of Law No. 13 of 2003 on Manpower. He believed the limitation of the PKWT to a maximum of two years and one extension for a maximum of one year in Article 59 paragraph (4) of the Manpower Law provides legal certainty for temporary, seasonal jobs, or those related to new products, new activities, or extra products that are still in experiment.

Hafidz added that although the PKWT is further regulated in government regulations, the a quo  law only regulates the period, extension, and renewal of the PKWT. Therefore, the legislature’s intent for amending Article 59 of Law No. 13 of 2003 should be called into question.

He believed such amendment should only be done to provide legal certainty for the implementation of a law. Meanwhile, Article 59 of Law No. 13 of 2003 and the Constitutional Court Decision No. 7/PU-XII/2014 has clearly regulated the type, nature, period, extension, and renewal of the PKWT.

The time limit for temporary jobs guarantees protection to workers who are bound by the PKWT. Without it, employers can extend and/or renew the PKWT for unlimited times. This will lead to deviations in the implementation of the PKWT, which could lead to industrial relations disputes.

He said Article 81 point 15 of the Job Creation Law has eliminated the provisions of Article 65 of Law No. 13 of 2003 on the requirements of jobs that employers can request to labor service providers, allowing employers to offer all types of work to labor service providers. In other words, all types of work can be outsourced. Moreover, labor service providers can enter into the PKWT with workers. As a result, workers will experience exploitation for the benefit of business, because the responsibilities of the work relationship between the employing company and the workers have been separated. This, in fact, obscures the guarantee and protection for outsourced workers.

Article 65 stipulates that the requirements of jobs that employers can request to labor service providers are separate from the main activity and under direct or indirect order from employers, are activities that support the company overall and don’t directly hinder the production process. “Upon closer observations, there was protection with legal certainty over whether or not the jobs can be outsourced. If the requirements are removed, the concern of hundreds of thousands to millions of workers [that they] will be outsourced will become a reality. Although outsourced workers can enter into employment agreement made for unspecified period of time, [their] weak bargaining position will preclude this possibility,” he stressed.

Hafidz also added that, financially, employing companies have a greater potential for profit than labor service providers because outsourcing companies’ revenue comes from management fees. This will make it very difficult for outsourced workers in case of industrial relations disputes that results in a certain payment obligation. Labor service providers probably don’t own company assets such as land and buildings, which can be liquidated to fulfil its legal payment obligations. Thus, the a quo article, which eliminates all material content of Article 65, has denied workers legal protection and certainty in relation to the requirements of jobs that employers can request to labor service providers.

The provision of Article 88D paragraph (2) of Law No. 13 of 2003 as stipulated in Article 81 point 25 of the Job Creation Law stipulates that the minimum wage only considers economic growth or inflation variables. The a quo article is not in line with the provision of Article 88 paragraph (4) of Law No. 13 of 2003, which stipulates that the minimum wage is based on the needs for decent living and also takes into account productivity and economic growth. It needs to be emphasized that the Job Creation Law doesn’t replace Article 88 of Law No. 13 of 2003, especially paragraph (4), so this provision remains in effect.

The provision of the Job Creation Law that regulates the determination of the minimum wage that only considers variables for economic growth or inflation, is lower than the regulation of the minimum wage in Article 44 paragraph (2) of the Government Regulation No. 78 of 2015 on Wages, which adjust the minimum wage for inflation and economic growth. In fact, the legislature wanted to reformulate the minimum wage calculation in the Job Creation Law to be lower than that in Law No. 13 of 2003, even in regulations under the law.

This means that the legislature doesn’t side with workers, who have a weak bargaining position with employers, while the Constitution mandates decent and fair treatment in work relations with compensation in the form of salaries or wages, which are often the only income for workers. Not many employers pay workers more than the minimum wage, and many ended up in the industrial relations court. Minimum wage is important to workers and their families, especially in the current pandemic where workers often agree to their wages not paid in full just so that they can continue working. Therefore, if the variables for minimum wage in the Job Creation Law is maintained, which are clearly lower than those stipulated in the government regulation, it is detrimental to the Petitioner, who has contributed to the economy.

In addition, the provision of Article 88E paragraph (2) of Law No. 13 of 2003, which is regulated in Article 81 point 25 of the Job Creation Law, emphasizes a prohibition for employers to pay wages lower than the minimum wage. However, the following provisions don’ regulate the legal consequences and obligations for employers who do so. In fact, they don’t rule out a wage agreement below the minimum wage between employers and workers.

The removal of Article 91 of Law No. 13 of 2003 as referred to in Article 81 point 29 of the Job Creation Law has led to the possibility of giving wages below the minimum wage without any legal consequences, thus there is no obligation to pay the difference between the wages paid and the minimum wage. The disproportionate number of vacancies and labor force will then make workers unable to negotiate wages with employers.

Article 81 point 44 of the Job Creation Law, which amended Article 156 of Law No. 13 of 2003, while Article 156 paragraphs (2) and (3) of Law No. 13 of 2003, which is regulated in Article 81 point 44 of the Job Creation Law along the phrase "at most" amended Article 156 paragraphs (2) and (3) of Law No. 13 of 2003. The a quo provision means that employers are given the option to determine the amount of severance pay and/or service pay with a ceiling. This means employers are not obliged to pay severance pay and/or service pay according to the amount stipulated in the Job Creation Law. It can even be interpreted to prohibit employers from (secretly) paying a higher severance pay and/or service pay, judging from the phrase "at most."

Meanwhile, Article 156 paragraph (4) of Law No. 13 of 2003, which is regulated in Article 81 point 44 of the Job Creation also remove the provision on compensation for housing as well as medical treatment and care for workers whose employment has been terminated, which was previously regulated in Article 156 paragraph (4) letter c of Law No. 13 of 2003 as compensation resulting from termination of employment.

In Law No. 13 of 2003, workers who resign received compensation for housing as well as medical treatment and care, even though they didn’t receive severance pay and/or service pay. This right is intended to replace the 5% medical treatment and care compensation and the 10% housing compensation before the workers find another job after the employment termination. Compensation for housing as well as medical treatment and care were determined as the employers’ obligations in the event of employment termination since the enactment of the Regulation of the Minister of Manpower on Procedures for Employment Termination and Determination of Severance Pay, Service Pay, and Compensation. Article 156 paragraph (4) in Article 81 point 44 of the Job Creation Law rearranges the amount of employment termination compensation for housing as well as medical treatment and care, which many workers fall back on before they find a new job.

Therefore, in the petitum, the Petitioner requested that the Court declare Article 81 points 15, 19, 25, 29, and 44 of the Job Creation Law unconstitutional, declare the phrase "or" in Article 88D paragraph (2) in Article 81 point 25 of the Job Creation Law unconstitutional if it is not interpreted as "and," declare the phrase “at most” in Article 156 paragraphs (2) and (3) in Article 81 point 44 of the Job Creation Law conditionally unconstitutional if it is not interpreted “at the minimum,” and declare Article 156 paragraph (4) in Article 81 point 44 of the Job Creation Law if it is not interpreted as compensation for rights that should be received as referred to in paragraph (1) includes: (a) annual leave that has not been taken and has not been canceled; (b) transport costs or fees for the worker/laborer and their family to the place of work; (c) compensation for housing as well as medical treatment and care is set at 15% of the severance pay and/or service pay for those who meet the requirements; (d) other matters stipulated in the work agreement, company regulations, or collective labor agreement.

In response, Constitutional Justice Manahan M. P. Sitompul advised the Petitioner to elaborate on their legal standing and constitutional loss due to the enactment of the Job Creation Law. Meanwhile, Constitutional Justice Arief Hidayat advised the Petitioner to confirm whether they are individuals or a public legal entity in relation to their legal standing.

Before concluding the hearing, Justice Arief Hidayat informed the Petitioner to submit the petition revision by November 17, 2020 at 13:30 WIB to the Registrar’s Office.

Writer: Utami Argawati
Editor: Nur R.
PR: Muhammad Halim
Photographer: Gani
Translator: Yuniar Widiastuti (NL)

Translation uploaded on 11/11/2020 9:54 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.

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