Reduction Of Severance Pay In The Job Creation Bill, DPR: As A Result Of COVID-19

Gedung DPR RI. (Irfan Meidianto/VOI)

JAKARTA - The DPR and the government have agreed to reduce the number of severance pay for employees who have been terminated (PHK) in the Work Creation Bill (RUU).

Deputy Chairman of the Indonesian House of Representatives, Azis Syamsuddin, said that the reduction in severance pay for workers was the impact of weakening economic conditions due to the COVID-19 pandemic.

"The change in severance pay in the labor cluster is based on the current reality during the pandemic. Business actors are experiencing economic turmoil which is quite worsening due to the COVID-19 occurring in other parts of the world," said Azis in his statement, Sunday, September 4.

Azis explained, due to the COVID-19 pandemic that has been running for 7 months, many business actors have screamed due to sluggish economic conditions. In fact, not a few of them went out of business.

"Of course, we have to look at various points of view, the change in severance pay scale is 19 times the salary plus the 6 times job loss insurance which is carried out by the government through BPJS Ketenagakerjaan by calculating and seeing the current pandemic conditions, of course" said Azis.

Therefore, the Golkar politician asked workers to understand the conditions that have occurred due to the current pandemic. Azis does not want business actors and investors to leave Indonesia and look to other countries.

"If employers leave and it is difficult during the current pandemic, then they will have a significant impact and will result in the lack of jobs later," he said.

For information, at the DPR Legislation Body working meeting with the government last night, there was an agreement that the severance pay for layoffs would be reduced.

Expert Staff to the Coordinating Ministry for Economic Affairs Elen Setiadi suggested that the calculation of severance pay for layoffs be changed to 25 times the wage. In detail, there are 19 times the wage plus 6 times the job loss guarantee (JKP).

This changes the rule of Law Number 13 Year 2003 concerning Manpower which stipulates that the maximum severance pay for layoffs is 32 times the wage.

"In developing and paying attention to current conditions, especially the impact of the COVID-19 pandemic, the burden is recalculated. The burden of a business actor or employer is a maximum of 19 times the salary, plus 6 times JKP which the government is managing," said Elen. .