Observer: Severance Pay In The Job Creation Act Burdens The State Budget, BPJS Ketenagakerjaan Is Affected

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The issue of severance pay in the Omnibus Law on Cipta Kerja is one of the points of demand for labor unions or workers who reject the ratification of the broomstick law. Although there is certainty that it will still be given, the scheme is undergoing changes.

In Law Number 13 of 2003 concerning Manpower, the provision of severance pay is 32 times the wage. However, under the Omnibus Law on Cipta Kerja, the value of severance pay decreased by 25 times.

Regarding severance pay, there are two important things in the Work Creation Omnibus Law. First, there will be adjustments to the calculation of severance pay. Second, there is an additional job loss guarantee program (JKP) for victims of layoffs.

This means that the burden of severance pay for entrepreneurs is reduced because the scheme has changed, namely 19 months of wages paid by employers and 6 months of being paid by the government with the State Budget (APBN) through BPJS Employment or BP Jamsostek.

Executive Director of the Institute for Development of Economics and Finance (INDEF) Tauhid Ahmad said that overall the rules in the Omnibus Law on Job Creation tended to side with the interests of investors rather than workers.

Furthermore, Tauhid admitted that he was worried that in the weak state budget fiscal conditions and the threat of a haunting economic recession, this JKP would make state finances more difficult and too profitable for entrepreneurs.

"There was a shift in the form of severance pay that was changed to 25 times the wage. The government is preparing a job retirement guarantee program. The budget, which was previously borne by the private sector, was ultimately borne by the government," he said, when contacted by VOI, Tuesday, October 6.

Not only that, Tauhid said, the decreasing severance pay value is one of Indonesia's setbacks regarding employment. Even though the number is still higher than some countries in the world.

In fact, said Tauhid, the government should be able to ensure and guarantee workers' rights in the law. This is because so far the rules that are owed in the Act are often not in line with the reality on the ground.

Tauhid said, the fact is that many workers or laborers do not even get severance pay when termination of employment (PHK) is carried out.

"Ensuring they also get their rights in the form of severance pay. Many do not get severance pay, that is the problem or the amount is relatively small. This is a problem, so don't let the reality be smaller," he said.

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Previously, the President of the Confederation of Indonesian Workers Unions (KSPI) Said Iqbal questioned where the BPJS got the source of funds to pay the 6 months severance pay under the JKP program.

Said said the new scheme, namely 19 months of wages to be paid by employers and 6 months of paid by BPJS Ketenagakerjaan, did not make sense. If it is forced, it can be ascertained that BPJS Ketenagakerjaan will go bankrupt or the JKP program will not be sustainable under this scheme.

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"Where does BPJS get the source of funds? In other words, the value of severance pay is reduced even though with the new scheme, 19 months of wages to be paid by employers and 6 months of paid by BPJS Ketenagakerjaan, it doesn't make sense," Said said in a statement quoted on Monday, October 5.

In the final draft of the draft Ciptaker Bill that is circulating, it is obtained by VOI, in the seventh part, that regulates the issue of job loss security.

Article 46A:

(1) Workers / laborers who experience termination of employment are entitled to a guarantee of job loss.

(2) Job loss security is administered by the labor social security administering agency and the Government.

(3) Further provisions regarding the procedures for implementing job loss security shall be regulated in a Government Regulation

The draft bill answers workers' questions, that in order to obtain JKP, there is a fee process that will be deposited with BPJS Ketenagakerjaan. However, whether the contribution mechanism is covered by the state or laborers cannot be ascertained.

"BPJS Ketenagakerjaan as referred to in Article 5 paragraph (2) letter b has the function of organizing work accident security programs, death security programs, pension security programs, old age savings programs, and job loss security programs," explained Article 83.

Meanwhile, the question of the maximum amount of severance pay is regulated in Article 156:

Art 156

(1) In the event of termination of employment, the entrepreneur is obliged to pay severance pay and / or service pay and compensation for rights that should have been received.

(2) The severance pay as referred to in paragraph (1) shall be given at the maximum according to the following provisions:

a. work period of less than 1 (one) year, 1 (one) month of wages;

b. work period of 1 (one) year or more but less than 2 (two) years, 2 (two) months of wages;

c. work period of 2 (two) years or more but less than 3 (three) years, 3 (three) months of wages;

d. work period of 3 (three) years or more but less than 4 (four) years, 4 (four) months of wages;

e. work period of 4 (four) years or more but less than 5 (five) years, 5 (five) months of wages;

f. work period of 5 (five) years or more, but less than 6 (six) years, 6 (six) months of wages;

g. work period of 6 (six) years or more but less than 7 (seven) years, 7 (seven) months of wages;

h. work period of 7 (seven) years or more but less than 8 (eight) years, 8 (eight) months of wages;

i. work period of 8 (eight) years or more, 9 (nine) months of wages.

(3) The period of service reward money as referred to in paragraph (1) shall be given at the maximum according to the following provisions:

a. work period of 3 (three) years or more but less than 6 (six) years, 2 (two) months of wages;

b. work period of 6 (six) years or more but less than 9 (nine) years, 3 (three) months of wages;

c. work period of 9 (nine) years or more but less than 12 (twelve) years, 4 (four) months of wages;

d. work period of 12 (twelve) years or more but less than 15 (fifteen) years, 5 (five) months of wages;

e. working period of 15 (fifteen) years or more but less than 18 (eighteen) years, 6 (six) months of wages;

f. work period of 18 (eighteen) years or more but less than 21 (twenty one) years, 7 (seven) months of wages;

g. work period of 21 (twenty one) years or more but less than 24 (twenty four) years, 8 (eight) months of wages;

h. work period of 24 (twenty four) years or more, 10 (ten) months of wages.

4) The compensation money that should be received as referred to in paragraph (1) includes: a. annual leave that has not been taken and has not failed; b. Return costs or fees for workers / laborers and their families to the place where the workers / laborers are accepted to work; c. other matters stipulated in the work agreement, company regulations or collective labor agreement

The issue of severance pay has been a burden to the business world. Business actors bear all obligations if they make layoffs.

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