Even higher than Thailand to Malaysia

JAKARTA, KOMPAS.com – In the recently enacted Employment Law, the maximum value of compensation paid by employees affected by termination of employment (layoffs) changes from 32 times the salary to 25 times the salary.

In this regard, the general president of the Indonesian Chamber of Commerce and Industry (Kadin Indonesia), Rosan Roeslani, said that the maximum value of the new compensation is even higher compared to neighboring countries in Southeast Asia.

“As for the 32 severance payments, in fact it has been reduced to 25 times. But it is still the highest of the ASEAN countries, ”Rosi Kompas said in the television event, quoted on Friday (09/10/2020).

Also read: See the calculation of the last severance pay in the Employment Creation Law

In addition, Rosan said, Vietnam and Thailand set the maximum value of severance pay for their laid off workers to only reach 10 times their salary.

Then in Malaysia, the Philippines almost 20 times. So keep it high, “he said.

Rosan assessed that several reforms are currently necessary if Indonesia wants to increase the employment rate.

The reason is, Rosan noted, that although investment making has increased each year, the employment rate has actually decreased.

“Labor absorption has decreased slightly, by 1 trillion IDR in 2016, our employment is still 2,271 people per 1 trillion IDR. Now in 2019 by 1 trillion IDR only 1,200 people, less,” he said.

According to him, this was because Indonesia’s neighboring countries continued to carry out trade facilitation reforms. So labor-intensive investors prefer to invest in other countries, rather than Indonesia.

Our neighboring countries also carry out structural reforms continuously. This is what we are trying to do and we can also see the comparison, “he said.

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