Expert Explains Legal Difference Between PKWT and PKWTT in Job Creation Law
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Sahat Sinurat testifying as an expert for the Government/President at a material judicial review of the Job Creation Law, Monday (2/26/2024). Photo by MKRI/Bayu.


JAKARTA (MKRI) The amendment to Articles 56 and 59 of the Job Creation Law has provided legal certainty and protection for workers in temporary employment agreements (PKWT) because in such agreements, termination is done in accordance with the agreed time or completion of the work agreed upon. The work is considered completed in accordance with the agreed scope and limits. After the work is completed, the employment automatically ends.

The statement was made by Sahat Sinurat as an expert for the Government/President at a material 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 on Monday, February 26, 2024 in the plenary courtroom. The hearing for cases No. 40/PUU-XXI/2023 and No. 61/PUU-XXI/2023 was set to hear the Government/President’s testimony.

In his testimony, Sahat said the amendment to Articles 56 and 59 of the Job Creation Law is in line with the Government Regulation (PP) No. 35 of 2021 that stipulates that PKWT period be five years. Previously, Article 59 of Law No. 13 of 2003 on Manpower allowed the extension of the PKWT up to two years or the renewal of the PKWT after a grace period of 30 days. In practice, he continued, extensions and renewals are often used interchangeably. So there is a tendency for workers and employers to make an addendum to the PKWT to overcome the extension, even though the renewal requires a 30-day grace period. However, sometimes workers continue to work without any employment contract.

In fact, Sahat explained, Article 51 of the Manpower Law states that work agreements can be made in writing or orally. Meanwhile, Article 57 of the Job Creation Law states that if the PKWT is made orally, the employment is declared as a permanent contract (PKWTT). He also said that a probationary period does not exist under the PKWT.

“If the work based on the PKWT is of course classified as professional work. So, the clause in Article 58 of the Job Creation Law emphasizes that if the PKWT requires a probationary period, the probationary period is null and void and the work period is still calculated,” Sahat explained before Chief Justice Suhartoyo and the other constitutional justices.

Layoff Notification

Next, Sahat expressed his view on the amendment to Article 151 of the Manpower Law, which must adjust to the mechanism for resolving industrial relations disputes. In the event of notification of layoff before an agreement is reached between the employer and employee, the employer must continue to carry out its rights and obligations in accordance with Article 82 point 49 and Article 157A of the Job Creation Law. In Article 158 of the Job Creation Law, which regulates layoffs due to gross misconduct, the layoff can be carried out without the determination of an industrial relations dispute settlement institution. Observing the Constitutional Court decision whose legal considerations states that Article 158 does not have binding legal force and that the clause “not based on the employer’s complaint” does not have binding legal force. “So, Article 154A paragraph (2) of the Job Creation Law, which regulates the reasons for layoff in work agreements, company regulations, or joint work agreements as an autonomous law applying in the company, is not in violation of the 1945 Constitution,” Sahat emphasized.

Also read:

Hundreds of Workers Allege Job Creation Law Facilitates Layoff  

Hundreds of Workers Affirm Arguments for Case on Job Creation Law 

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

Govt: Formulation of Job Creation Law Following Legislation

House: Job Creation Law to Maintain National Economy’s Stability

Petitioners’ Experts: Job Creation Law Not Urgent

Aan Eko Widiarto: Job Creation Perppu Defies Constitutional Court’s Ruling

Petitioners’ Expert: Job Creation Law Unqualified for Omnibus Method

Revision of Job Creation Law Serves to Follow Up on Court’s Ruling

Formal Petitions Rejected, Material Review of Job Creation Law Continues

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. The Court has previously rejected the Petitioners’ formal petition through a decision handed down on September 18, 2023 while the material petition continues.

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.

Also read:

Govt Discusses Limit of Non-Permanent Contracts in Job Creation Law

Expert: Workers Unions Important for Balance in Industrial Relations 

Petitioners’ Witness Says Job Creation Law Deprives Workers of Their Rights

Author       : Sri Pujianti
Editor        : Lulu Anjarsari P.
PR            : Tiara Agustina
Translator  : 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.


Monday, February 26, 2024 | 17:12 WIB 3788