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Indonesia: fears new bill will destroy workers’ welfare

15 January, 2020The Indonesian union movement is vehemently opposing a proposed bill on job creation, saying it will destroy workers’ welfare in near future. Nationwide protests are planned later this month, calling for the controversial bill to be scrapped.

In October 2019, Indonesian President Joko Widodo proposed to streamline overlapping Indonesian laws into two omnibus bills on job creation and taxation, with the primary purpose to attract foreign direct investment, ensure economic growth and create job opportunities. The two bills will amend total 82 Indonesian laws and 1,194 articles.

The Confederation of United Indonesian Workers (KPBI), the All Indonesian Trade Union Confederation (KSBSI) and Indonesian Trade Union Confederation (KSPI) are condemning the bill for violating workers’ rights and benefits; among the most contested issues are abolishing the severance pay system borne by employers, increasing labour flexibility and eliminating criminal sanctions on employers.

The President of KPSI and the Federation of Indonesian Metal Workers' Union (FSPMI), Said Iqbal, says that revising the minimum wage system to hourly-rate for those working below 35 hours per week is a regressive move that will fuel the informal economy and make workers poorer. Iqbal is concerned workers could lose the monthly-rate minimum wage for being on sick leave or fulfilling religious obligation.

“We strongly oppose the proposal to limit unemployment benefits six months. Under the current laws, workers enjoy a maximum severance pay of nine months, in some situations even 18 months, and on top of that workers can receive maximum ten-month service pay. All those benefits will disappear,”

says Iqbal.

"We demand that the government consults trade unions while drafting the bill and removes provisions detrimental to workers, like on severance payment, widening the scope of labour outsourcing from the existing five areas of work and abolishing criminal sanctions on employers who failed to pay minimum wage,"

says KSBSI president Elly Rosita Silaban.

She added that KSBSI supports the revision of labour law due to some crucial  issues for example weak labour inspection, controversial issues on wages, pension and social security programmes were not resolved. The Omnibus bill was drafted  in favour of investors, rather than addressing issues facing workers.

KPBI, KSBSI and KSPI are mobilizing workers for nationwide protests on 15 and 20 January.