[Indonesia] Controversial jobs decree passed into law

On March 21, Indonesia's parliament voted to pass President Joko Widodo's emergency decree to cement rules on investment and jobs. It replaces a similar 2020 law that was ruled partially unconstitutional, International Business Times reports.

The law revises more than 70 other laws and has been praised by foreign investors for streamlining business rules. However, it has also received criticism from labour and green groups for being too pro-business.

The changes under the 2020 law reportedly include cuts in severance benefits, new minimum wage limits, removal of some mandatory paid leave and a loosening of rules on environmental inspections for investment.

In 2021, the Constitutional Court ruled the passage of the law was flawed because there had been inadequate public consultation. It ordered a renewed debate process in parliament within two years.

The passage of the decree meant the majority of the changes brought about by the law would stay, with some small changes to labour rules.

After the decree was passed, chief economic minister Airlangga Hartarto told parliament, "The job creation decree is a measure to mitigate global crises ... (It) prevents problems from spreading and global vulnerabilities to affect the national economy." 

The minister reportedly cited a number of challenges from slowing global growth, climate change and the war in Ukraine to recent problems affecting some US banks.

Some legal experts have criticised the decree, seeing it as a government ploy to bypass the court's order. Mr Hartarto stated that the decree was needed to avoid a legal vacuum after the court's decision.

Experts have also reportedly questioned the use of the decree - which is officially known as a government regulation in lieu of law - particularly after parliament delayed its vote by more than a month.

A president is only supposed to use such a decree to address an emergency and parliament is supposed to vote on it in the first sitting after its issuance, under Indonesia's constitution.

The jobs decree was issued in December, however, parliament failed to bring it to a wider vote before its February recess.

The Indonesian Employers Association welcomed the passage for bringing legal certainty, according to its official Anton Supit. But he noted that businesses continued to disagree with some parts of the law, such as the minimum wage formula.

Source: International Business Times

(Quote via original reporting)

On March 21, Indonesia's parliament voted to pass President Joko Widodo's emergency decree to cement rules on investment and jobs. It replaces a similar 2020 law that was ruled partially unconstitutional, International Business Times reports.

The law revises more than 70 other laws and has been praised by foreign investors for streamlining business rules. However, it has also received criticism from labour and green groups for being too pro-business.

The changes under the 2020 law reportedly include cuts in severance benefits, new minimum wage limits, removal of some mandatory paid leave and a loosening of rules on environmental inspections for investment.

In 2021, the Constitutional Court ruled the passage of the law was flawed because there had been inadequate public consultation. It ordered a renewed debate process in parliament within two years.

The passage of the decree meant the majority of the changes brought about by the law would stay, with some small changes to labour rules.

After the decree was passed, chief economic minister Airlangga Hartarto told parliament, "The job creation decree is a measure to mitigate global crises ... (It) prevents problems from spreading and global vulnerabilities to affect the national economy." 

The minister reportedly cited a number of challenges from slowing global growth, climate change and the war in Ukraine to recent problems affecting some US banks.

Some legal experts have criticised the decree, seeing it as a government ploy to bypass the court's order. Mr Hartarto stated that the decree was needed to avoid a legal vacuum after the court's decision.

Experts have also reportedly questioned the use of the decree - which is officially known as a government regulation in lieu of law - particularly after parliament delayed its vote by more than a month.

A president is only supposed to use such a decree to address an emergency and parliament is supposed to vote on it in the first sitting after its issuance, under Indonesia's constitution.

The jobs decree was issued in December, however, parliament failed to bring it to a wider vote before its February recess.

The Indonesian Employers Association welcomed the passage for bringing legal certainty, according to its official Anton Supit. But he noted that businesses continued to disagree with some parts of the law, such as the minimum wage formula.

Source: International Business Times

(Quote via original reporting)