In this episode, we tackle the topic of the Omnibus Law, which is a series of laws that has been drafted and are being discussed by the government to streamline some of the existing laws in order to make for better and more efficient regulation. We’re going to talk about some of the most controversial parts of the Omnibus Law that have been protested by labor unions, specifically the proposed revisions around labor laws (UU Cipta Kerja) — in particular, around pesangon or severance and minimum wage calculations.
We break down what the current legal situations are in terms of severance payments and how it’s, in our opinion, unbalanced and heavily skewed in favor of the employees, making it difficult for employers to fire them for legitimate business reasons without paying high severance payments. This also impacts the emerging youth population who are looking for jobs and cannot find them, because there are not a lot of job openings as people are staying in their jobs for decades in order to get their pesangon. We talk through what this means for both employees and employers, and how we can find a middle ground to solve the issue.
We also break down the current way the government determines minimum wage and what the proposed changes through the Omnibus Law are — specifically changing the calculation to remove the regional monthly wage rate and inflation, in order to streamline and standardize the minimum wage calculation. However, this does not take into account the true cost of living and the diversity of minimum wage rates for a lot of people in Indonesia.
The Omnibus Law will be an ongoing topic of conversation over the next few weeks and months as the Parliament is discussing it, and we will continue to keep tabs on it. If you want us to cover any specific parts of the Omnibus Law with our ‘flimsy but earnest logic’ please let us know! Don’t hesitate to reach out over email or through social media!
Thanks for listening!
