The meeting of President Joko Widodo (Jokowi) with entrepreneurs who are members of the Indonesian Employers’ Association (Apindo) has produced a number of recommendations, including the revision of the Manpower Law No. 13/2003. The revision is considered to be an effort to revive the national industry.
Apindo Chairman Hariyadi Sukamdani said certainty about the existence of minimum wage and social security became a problem and must be revised in the manpower law. “The reason is that it is no longer in accordance with current conditions,” he said after the meeting with Jokowi at the Presidential Palace Complex, Jakarta, Thursday (6/14).
Hariyadi told katadata.co.id that the minimum wage, which was initially intended as a security net, was instead used as an average wage to gain popularity, especially for regional heads. This happened even though the minimum wage was initially used as a reference for single workers who were just starting to work.
Provisions for wages have actually been summarized in 11 Articles from Article 88 to 98. The determination of wages is also regulated in four Articles, which are Article 88, 89, 97 and 98. Based on Article 89, Governor sets the minimum wage with the recommendation from the Provincial Wage Board and/or Regent/Mayor. “How convenient, they set the wages but entrepreneurs are the ones that must pay. So the understanding has deviated from the minimum wage,” Hariyadi told katadata.co.id on Friday (6/14).
Hariyadi also mentioned about the existence of social security with definite benefits to workers. This burdened the country in fiscal terms because of the guarantee needs such as health has a variety of types. Therefore, in the revision, Hariyadi wants certain contributions to be paid so that workers also know what they will get after retirement.
The Indonesian Chamber of Commerce and Industry (Kadin) Chairman Rosan P. Roeslani also wants a relief in terms of processing the granting of severance payment to be included in the revised law. Many investors complained about it, especially those from abroad.
In Article 156 of the Law No. 13, the granting of severance payment has been regulated with variations of employment period. Workers who are laid off with a work period of less than one year must receive severance payment equal to one month’s salary. The number varies up to a work period of eight years or more are required to receive nine months of wages. “This is burdensome and often complained of by foreign investors,” Rosan said.
According to Hariyadi, Jokowi said he is ready to discuss the revision of the Law No. 13, at least in the next half year. The reason is that improvement in the main legal umbrella for manpower has become an urgent agenda for the government. “He stated that the efforts in these six months will be reviewed,” Hariyadi said.
Jokowi’s subordinate also gave certainty. The Manpower Minister Hanif Dhakiri is willing to discuss employer’s recommendations to revise the law with all stakeholders. Revisions are needed to increase investment until the Indonesian workforce climate is more positive. “So that investment can boost the creation of better jobs,” he said.
Although the government gave a signal to agree, the entrepreneurs’ recommendations received a negative response from workers. The President of the Indonesian Workers Association (ASPEK) who is also the Deputy Chairman of the National Tripartite Cooperation Institute Mirah Sumirat even challenged the revision of the Law No. 13 to be carried out thoroughly and not only the articles that are considered burdensome to employers. A comprehensive revision that is fair to all interests.
Regarding the determination of wages, Mirah said the regional head only gives an agreement signature, while the amount of wages is discussed together at the wage council. The council consists of three parties, which are representatives of employers, governments and workers. The main grasp is the 60 basic items of Decent Living Needs (KHL) submitted by the three parties.