These are the benefits of being a “contract employee” in the Job Creation Act. All page

JAKARTA, KOMPAS.com – The government and the DPR have made important revisions to Law Number 13 of 2003 on Manpower through the Omnibus Law on Cipta Kerja. One of them is related to the employment contracts and subcontracting of PKWT.

The Minister of Manpower (Menaker), Ida Fauziyah, revealed that there are several benefits that contract workers can obtain in the Employment Creation Law, especially related to the protection of workers when they are victims of dismissal (PHK).

Ida said workers with contract status would receive compensation if they were laid off. Under the old Labor Law regulations, only workers who were permanent employees were compensated through a severance pay scheme.

“Oh, there are (benefits for workers hired in the Employment Creation Act). In the past, PKWT had no compensation if the work period ended. Now when the contract ends, it receives compensation,” Ida was quoted as saying from Kompas Daily, Monday (19/20/2020).

Also read: Explanation of the Minister of Manpower on employees with a life contract in the Employment Creation Law

With the obligation to pay compensation, companies or employers will think twice before firing hired employees. So far, there have been many cases of companies that have laid off contract workers at any time, either for efficiency reasons or for employee performance that falls short of expectations.

According to Ida, with compensation in the Employment Creation Act for workers with non-permanent contract status, employees or day laborers will indirectly receive greater protection from the state.

“The employers finally thought, I want to continue hiring, I still have to pay the severance pay. This is actually a form of protection that we did not regulate in the previous law,” Ida said.

“In principle, this bill wants to protect all workers. Existing worker groups, job seeker groups and UMKM sector worker groups,” he added.

Also read: This is the Permanent Employee and Hired Employee Regime in the Employment Creation Law

He continued, after the enactment of the Employment Creation Law, automatically the rights of employees hired with workers who are already permanent employees will be the same if they are victims of layoffs.

“The Manpower Law now provides great protection and this protection is adopted in the Employment Creation Bill. For example, in the Manpower Law there is no protection for PKWT workers,” said this politician of the National Awakening Party (PKB).

“In this bill, social protection must still be provided to PKWT or PKWTT (indeterminate employment contract) workers. Therefore, they have the same basic rights as permanent workers to obtain social security, payment arrangements overtime and the same work hours, “he said again.

Ida then explained about the PKWT contract limitations that were removed in the Job Creation Act. The government argued that Article 59 regulating the time limit was abolished because the Employment Creation Law adheres to flexibility. It is also commonly applied in other countries.

“We learn from various countries. If it is regulated by law, there will be no regulatory flexibility. This issue is not simple when labor dynamics are high, ”said Ida.

Also read: Menaker: Law on job creation with a strong tooth, no talking

He said the question of the deadline for contract workers’ non-permanent contracts will still be discussed again in derivatives regulations. The rules to limit the duration of the employment contract to a maximum of 3 years are considered less flexible.

“We have agreed together with friends in the tripartite forum (government, employers and workers), this will be discussed in the formulation of government regulations (PP). So the government does not fill it alone, ”he said.

For information, in the article of Law No. 13 of 2003, which revised the Employment Creation Law, explicitly regulates the PKWT. PKWT is a work agreement between a worker and an employer or company to establish an employment relationship for a specific time or for a specific type of work.

The PKWT agreement also regulates the position or position, salary or salaries of workers, what benefits and facilities workers obtain and other matters that regulate personal labor relations.

Companies can only enter into a non-permanent contractual employment contract for a maximum of 3 years. After that, companies are obliged to appoint workers or day laborers as permanent employees if they want to employ them after a period of 3 years.

Read also: LIPI researchers call continuous outsourcing of job creation law