Rolling Up Protests, What Is the Fate of Severance Pay in Jobs Law?

Summary

To date, labor associations still reject the enactment of the Job Creation Law. One of the workers' objections is that the severance pay requirements have decreased from 32 times to 25 times of employees’ monthly wages. According to the Manpower Minister Ida Fauziyah, only a few companies are able to meet the severance pay obligations of 32 times of employees’ monthly wages.

Minister Ida stated that 27 percent of companies that had laid off (PHK) their workers had paid severance pay. However, it does not comply with the provisions in the Manpower Law or does not comply with the agreement to pay severance pay as much as 32 times the monthly wage. This is the main reason the government has revised Law No. 13/2003 on Manpower. "In the old law, the provisions for severance pay were very good, 32 times the monthly wage. In practice, only seven percent followed the provisions of Law No. 13/2003 on Severance Pay," Ida said.

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