Govt Discusses Limit of Non-Permanent Contracts in Job Creation Law
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Director-General for Development and Supervision of Occupational Safety and Health Haiyani Rumondang testifying on behalf of the Government at a judicial review of the Job Creation Law, Wednesday (11/22/2023). Photo by MKRI/Ifa.


JAKARTA (MKRI) — The formal judicial review hearing of Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation into Law was continued by the Constitutional Court (MK) on Wednesday, November 22, 2023. The hearing for cases No. 40/PUU-XXI/2023 and No. 61/PUU-XXI/2023 heard the Government’s testimony.

At the hearing, the Government—represented by the Manpower Ministry’s Director-General for Development and Supervision of Occupational Safety and Health Haiyani Rumondang—stated that the Job Creation Law regulates that PKWT can be made for all kinds of work. “It means that PKWT is only for ‘certain jobs.’ Employment relationships based on PKWT can only be formed for work of a specific sort and nature, or for activities that will be completed within a specific time frame, and cannot be formed for permanent work. In other words, PKWT can only be made for temporary work. This restriction on the type and form of temporary PKWT contracts or activities is not present in the concept of indefinite-term contracts (PKWTT). If the limitation on the type and character of PKWT activities are violated, it becomes PKWTT by law,” she stressed.

She asserted that the change from temporary employment contracts (PKWT) to permanent employment contracts (PKWTT) is a logical consequence of the restriction in Law No. 6 of 2023 on “certain jobs” that can be made into PKWT. PKWT becomes PKWTT for legal purposes, which truly gives protection and legal certainty for PKWT workers/laborers against employers’ arbitrariness, as argued by the Petitioners in the petitions. Thus, she highlighted, the Petitioners’ position that PKWT has no time limit, including the time limit for extension, is incorrect. “The Petitioners appears to view PKWT limited to Article 81 point 12 Article 56 paragraph (3) of Law No. 6 of 2023, but the proper understanding requires a view of the a quo article as a whole and include the implementing regulations of the article,” she explained.

Rumondang also said that PKWT based on Article 81 point 21 Article 56 of the Job Creation Law in conjunction to Article 8 of Government Regulation (PP) No. 35 of 2021 is clear in the a quo provision, where PKWT is made for a maximum of 5 (five) years. Even in PP No. 35 of 2021, it is even more explicitly stated that PKWT and its extension are for a maximum of 5 (five) years. Thus, the Petitioners’ argument that PKWT and its extension do not have a time limit has no legal basis.

“Understanding Article 81 point 12 Article 56 paragraph (3) of Law No. 6 of 2023 does not rely on the phrase ‘work agreement’ or even arguing with the principle of freedom of contract as per Article 1338 paragraph (1) and Article 1320 of the Civil Code, as if whatever is agreed upon in a ‘work agreement’ can be legally justified. The employment agreement based on the Civil Code’s principle of freedom of contract cannot be separated from the terms provided in Law No. 6 of 2023 jo. PP No. 35 of 2021,” he said.

Rumondang emphasized that through Article 81 point 12 Article 56 paragraph (4) of Job Creation Law, the Government clearly regulates that PKWT based on the time limit or the completion of a certain job are regulated in government regulations. The a quo provision is then followed by the Government publishing PP No. 35 of 2021, which sets a limitation that PKWT is made for a maximum of 5 (five) years; even in the PP, it is specifically stated that PKWT and its extension is a maximum of 5 (five) years. “As a result, the work agreement referred to in Article 81 point 12 Article 56 paragraph (3) of Law No. 6 of 2023 cannot overcome the limitations of Law No. 6 of 2023 jo. PP No. 35 of 2021,” she explained.

In the work agreement, determining the period of time or completion of work under a non-permanent contract (PKWT) will clarify when work under such a contract begins and finishes. This is especially important if there is a disagreement between the worker/laborer and the employer on the implementation of the PKWT. Therefore, the determination of the time period or the completion of certain work in the employment agreement aims to strengthen the legality aspect for workers/laborers in the implementation of PKWT and become one of the evidence if workers/laborers face PKWT dispute with employers in the future.

Also read:

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The case No. 40/PUU-XXI/2023 was filed by 121 petitioners, consisting of ten workers’ unions and 111 individuals. Among the unions are Federasi Serikat Pekerja Kimia, Energi, dan Pertambangan Serikat Pekerja Seluruh Indonesia (FSP KEP SPSI); Persatuan Pegawai Indonesia Power (PP IP); and Federasi Serikat Pekerja Indonesia (FSPI). They allege that the Job Creation Law is legally flawed. They question the House’s approval of the stipulation of Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation into law. They assert that this means the House approved the president’s justification of the compelling crisis situation for the stipulation of the perppu. In addition, the enforcement of Article 81 of the Job Creation Law has led to actual or at least potential losses in the part of the Petitioners and could lead to the loss of job. It essentially facilitates layoffs and changes in manpower as regulated in the articles of the Law has degraded state protections for workers, which was previously regulated appropriately in Law No. 13 of 2003 on Manpower.

Also read:

Temporary Employment Agreement in Job Creation Law Challenged

Petitioner of Temporary Employment Agreement in Job Creation Law Adds Work Experience

Court Rules to Separate Formal and Material Review of Job Creation Law

Meanwhile, the Petitioner of case No. 61/PUU-XXI/2023, private employee Leonardo Siahaan, argues that as a person in productive age, despite not having been employed, he would potentially work. He realized that Article 56 paragraph (3) of the Job Creation Law means that the extension of temporary employment agreements (PKWT) clearly has no fixed term and number of extension time, thus highly susceptible to exploitation of workers. Seeing the a quo article, employers could think they can extend PKWT contracts for more than 10 years and even more than 2 times when, in fact, the old Manpower Law clearly stipulates that the maximum term for a PKWT is 3 years and it can be extended only once. This means the employment term of the elderly could have been extended continuously until they become a permanent employee.

The Petitioner argued that companies can set longer employment terms in PKWT arbitrarily. Not to mention, the a quo article means employment terms can be extended indefinitely without companies having to make employees permanent.

In the petition, the Petitioner explains that the a quo article generally regulates that the end of PKWT is based on two things: the end of employment term or the end of the work. He also explains that Law No. 13 of 2003 on Manpower and the Government Regulation (PP) No. 35 of 2021 on temporary employment agreement, outsourcing, working hours and break time, and employment termination.

Author       : Utami Argawati
Editor        : Lulu Anjarsari P.
PR            : Tiara Agustina
Translator  : Nyi Mas Laras Nur Inten Kemalasari/Yuniar Widiastuti (NL)

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


Wednesday, November 22, 2023 | 15:44 WIB 97
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