Aghnia Maurizka Prameswari
The Constitutional Court (MK) has partially granted the judicial review petition against the Job Creation Law filed by the Labor Party and several other trade union coalitions. This ruling has a significant impact on the provisions on severance pay, foreign workers, minimum wage provisions, and other provisions. The following is a summary of the changes to the Job Creation Law after the Constitutional Court Decision No. 168/PUU-XXI/2023:
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Subject |
Old Regulation |
New Regulation |
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Foreign workers |
Article 42 paragraph (1) of Law 13/2003 in Article 81 number 4 of Attachment to Law 6/2023 Every Employer who employs Foreign Workers must have a plan for the use of Foreign Workers approved by the Central Government.
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Article 42 paragraph (1) of Law 13/2003 in Article 81 number 4 of Attachment to Law 6/2023 Every Employer who employs Foreign Workers must have a plan for the use of Foreign Workers approved by "the minister responsible for (affairs) of manpower, in casu the Minister of Manpower".
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Article 42 paragraph (4) of Law 13/2003 in Article 81 number 4 of Attachment to Law 6/2023 states that Foreign Workers may be employed in Indonesia only in an Employment Relationship for a specific position and for a specific period of time and must have the competencies appropriate to the position to be occupied. |
Article 42 paragraph (4) of Law 13/2003 in Article 81 number 4 of Attachment to Law 6/2023 states that foreign workers may be employed in Indonesia only in employment relationships for certain positions and for a certain period of time and must have competencies in accordance with "the position to be occupied, taking into account the priority of using Indonesian workers".
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Contract Workers |
Article 56 paragraph (3) of Law 13/2003 in Article 81 number 12 of Attachment to Law 6/2023, the time period or completion of a particular job as referred to in paragraph (2) is determined based on the Work Agreement. |
Article 56 paragraph (3) of Law 13/2003 in Article 81 number 12 of Attachment to Law 6/2023 states that the time period for completion of a particular job "is made no more than 5 (five) years, including if there is an extension".
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Article 57 paragraph (1) of Law 13/2003 in Article 81 number 13 of Attachment to Law 6/2023 states that work agreements for a fixed period of time are made in writing and must use Indonesian and Latin letters. |
Article 57 paragraph (1) of Law 13/2003 in Article 81 number 13 of Attachment to Law 6/2023 states that fixed-term work agreements "must be made in writing using Indonesian and Latin letters".
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Outsourcing Workers |
Article 64 paragraph (2) of Law 13/2003 in Article 81 number 18 of Attachment to Law 6/2023 the Government determines part of the implementation of the work as referred to in paragraph (1). |
Article 64 paragraph (2) of Law 13/2003 in Article 81 number 18 of Attachment to Law 6/2023 the Minister determines part of the implementation of the work as referred to in paragraph (1) "in accordance with the type and field of outsourcing work agreed in the written outsourcing agreement".
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Leave and holidays |
Article 79 paragraph (2) letter b of Law 13/2003 in Article 81 number 25 of Attachment to Law 6/2023 Rest time as referred to in paragraph (1) letter a must be given to workers/laborers, including at least: b. 1 (one) day of weekly rest for 6 (six) working days in 1 (one) week.
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Article 79 paragraph (2) letter b Law 13/2003 in Article 81 number 25 Attachment to Law 6/2023 Rest time as referred to in paragraph (1) letter a must be given to workers/laborers which includes at least: b. weekly rest 1 (one) day for 6 (six) working days in 1 (one) week "or 2 (two) days for 5 (five) working days in 1 (one) week".
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Article 79 paragraph (5) of Law 13/2003 in Article 81 number 25 of Attachment to Law 6/2023 In addition to rest and leave periods as referred to in paragraph (1), paragraph (2), and paragraph (3), certain companies can provide long breaks as regulated in the Employment Agreement, Company Regulations, or Joint Work Agreement. |
Article 79 paragraph (5) of Law 13/2003 in Article 81 number 25 of Attachment to Law 6/2023 In addition to rest and leave periods as referred to in paragraph (1), paragraph (2), and paragraph (3), certain companies provide long breaks as regulated in the Employment Agreement, Company Regulations, or Joint Work Agreement. Note: The Constitutional Court removed the word "can".
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Workers' rights |
Article 88 paragraph (1) of Law 13/2003 in Article 81 number 27 of the Attachment to Law 6/2023 Every Worker/Laborer has the right to a decent living for humanity. |
Article 88 paragraph (1) of Law 13/2003 in Article 81 number 27 of Attachment to Law 6/2023 Every Worker/Laborer has the right to a decent living for humanity "including income that meets a living standard which is the amount of income or receipts of the worker/laborer from the results of his/her work so that he/she is able to meet the living needs of the worker/laborer and his/her family in a reasonable manner which includes food and drink, clothing, housing, education, health, recreation, and old age security".
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Wage Council |
Article 88 paragraph (2) of Law 13/2003 in Article 81 number 27 of Attachment to Law 6/2023, the Central Government determines wage policy as one of the efforts to realize the rights of Workers/Laborers to a decent living for humanity. |
Article 88 paragraph (2) of Law 13/2003 in Article 81 number 27 of Attachment to Law 6/2023, the Central Government determines wage policies as one of the efforts to realize the rights of Workers/Laborers to a decent living for humanity "by involving regional wage councils which include regional government elements in formulating wage policies which become material for the central government to determine wage policies".
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Article 98 paragraph (1) of Law 13/2003 in Article 81 number 39 of Attachment to Law 6/2023 To provide advice and considerations to the Central Government or Regional Government in formulating wage policies and developing wage systems, a wage council is formed.
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Article 98 paragraph (1) of Law 13/2003 in Article 81 number 39 of Attachment to Law 6/2023 To provide advice and considerations to the Central Government or Regional Government in formulating wage policies and developing wage systems, a wage council "that actively participates" is formed. |
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Wage Determination |
Article 88 paragraph (3) letter b of Law 13/2003 in Article 81 number 27 of Attachment to Law 6/2023 The wage policy as referred to in paragraph (2) includes: b. wage structure and scale; |
Article 88 paragraph (3) letter b of Law 13/2003 in Article 81 number 27 of Attachment to Law 6/2023 The wage policy as referred to in paragraph (2) includes: b. "proportional" wage structure and scale;
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Article 88C of Law 13/2003 in Article 81 number 28 of Attachment to Law 6/2023 (7) Further provisions regarding the procedures for determining the minimum wage as referred to in paragraph (4) and certain conditions as referred to in paragraph (6) are regulated in a Government Regulation. |
Article 88C of Law 13/2003 in Article 81 number 28 of Attachment to Law 6/2023 (7) Further provisions regarding the procedures for determining the minimum wage as referred to in paragraph (4) and certain conditions as referred to in paragraph (6) are regulated in a Government Regulation. "including the governor is obliged to determine the sectoral minimum wage in the provincial area and can be for districts/cities".
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Article 88D paragraph (2) of Law 13/2003 in Article 81 number 28 of Attachment to Law 6/2023 The formula for calculating the minimum wage as referred to in paragraph (1) takes into account the variables of economic growth, inflation, and certain indexes. |
Article 88D paragraph (2) of Law 13/2003 in Article 81 number 28 of Attachment to Law 6/2023 The formula for calculating the minimum wage as referred to in paragraph (1) takes into account the variables of economic growth, inflation, and certain indexes. "Certain indexes are variables that represent the contribution of the workforce to the economic growth of a province or district/city by taking into account the interests of the company and workers/laborers as well as the principle of proportionality to meet decent living needs (KHL) for workers/laborers".
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Article 88F of Law 13/2003 in Article 81 number 28 of Attachment to Law 6/2023 In certain circumstances the Government may determine a minimum wage calculation formula that is different from the minimum wage calculation formula as referred to in Article 88D paragraph (2).
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Article 88F of Law 13/2003 in Article 81 number 28 of Attachment to Law 6/2023 In certain circumstances the Government may determine a minimum wage calculation formula that is different from the minimum wage calculation formula as referred to in Article 88D paragraph (2). "What is meant by 'in certain circumstances' includes, among other things, natural or non-natural disasters, including extraordinary conditions of the global and/or national economy as determined by the President in accordance with the provisions of laws and regulations". |
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Labor union |
Article 90A of Law 13/2003 in Article 81 number 31 of Attachment to Law 6/2023 Wages above the minimum wage are determined based on an agreement between the Employer and Workers/Laborers in the Company. |
Article 90A of Law 13/2003 in Article 81 number 31 of Attachment to Law 6/2023 Wages above the minimum wage are determined based on an agreement between the Employer and Workers/Laborers "or the Workers' Union/Laborers' Union in the Company".
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Company wage scale |
Article 92 paragraph (1) of Law 13/2003 in Article 81 number 33 of Attachment to Law 6/2023 Employers are required to prepare the Wage Structure and Scale in the Company by taking into account the Company's capabilities and productivity. |
Article 92 paragraph (1) of Law 13/2003 in Article 81 number 33 of Attachment to Law 6/2023 Employers are required to prepare the structure and scale of wages in the Company by taking into account the Company's capabilities and productivity, "as well as class, position, length of service, education and competence".
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Layoff Provisions |
Article 151 paragraph (3) of Law 13/2003 in Article 81 number 40 of Attachment to Law 6/2023 In the event that the Worker/Laborer has been notified and rejects Termination of Employment, the resolution of Termination of Employment must be carried out through bipartite negotiations between the Employer and the Worker/Laborer and/or the Workers' Union/Laborers' Union.
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Article 151 paragraph (3) of Law 13/2003 in Article 81 number 40 of Attachment to Law 6/2023 In the event that the Worker/Laborer has been notified and rejects Termination of Employment, the resolution of Termination of Employment must be carried out through bipartite negotiations "through deliberation to reach a consensus between the Employer and the Worker/Laborer and/or the Workers' Union/Laborers' Union".
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Article 151 paragraph (4) of Law 13/2003 in Article 81 number 40 of Attachment to Law 6/2023 In the event that bipartite negotiations as referred to in paragraph (3) do not reach an agreement, Termination of Employment will be carried out through the next stage in accordance with the Industrial Relations Dispute Resolution mechanism. |
Article 151 paragraph (4) of Law 13/2003 in Article 81 number 40 of Attachment to Law 6/2023 In the event that bipartite negotiations as referred to in paragraph (3) do not reach an agreement, Termination of Employment "can only be carried out after obtaining a decision from an industrial relations dispute resolution institution whose decision has permanent legal force".
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Severance pay |
Article 156 paragraph (2) of Law 13/2003 in Article 81 number 47 of Attachment to Law 6/2023 Severance pay as referred to in paragraph (1) is provided with the following provisions:
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Article 156 paragraph (2) of Law 13/2003 in Article 81 number 47 of Attachment to Law 6/2023 Severance pay as referred to in paragraph (1) is "at least":
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Article 157A paragraph (3) of Law 13/2003 in Article 81 number 49 of Attachment to Law 6/2023 The implementation of the obligations as referred to in paragraph (1) is carried out until the completion of the Industrial Relations Dispute resolution process according to its level.
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Article 157A paragraph (3) of Law 13/2003 in Article 81 number 49 of Attachment to Law 6/2023 The implementation of the obligations as referred to in paragraph (1) is carried out until the completion of the Industrial Relations Dispute resolution process according to its level, "until the end of the industrial relations dispute resolution process which has permanent legal force in accordance with the provisions of the PPHI Law".
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Other |
Article 95 paragraph (3) of Law 13/2003 in Article 81 number 36 of Attachment to Law 6/2023 Other rights of Workers/Laborers as referred to in paragraph (1) shall be paid in priority over all creditors except creditors holding collateral rights.
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Article 95 paragraph (3) of Law 13/2003 in Article 81 number 36 of Attachment to Law 6/2023 Other rights of Workers/Laborers as referred to in paragraph (1) shall be paid in priority over all creditors "including preferred creditors" except creditors holding collateral rights.
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The Court assessed that there was a possibility of overlapping norms between Law Number 13 of 2003 concerning Manpower and the Job Creation Law. Especially related to the norms in the amended Manpower Law (both in the form of articles and paragraphs) which are difficult for the general public to understand, including difficult for workers/laborers to understand. If all these problems are allowed to drag on and are not immediately stopped/ended, governance and labor law will easily fall and then be trapped in prolonged legal threats and injustice.
So in addition to the provisions outlined above, the Constitutional Court (MK) has directed legislators (specifically the DPR and the government) to promptly draft a new employment law, distinct from Law No. 6 of 2023 on Job Creation. The Court has set a deadline of two years for the completion of this new law. Furthermore, the Court emphasized that the drafting process must ensure the active involvement of trade unions and workers.