Mahfud denies that the Job Creation Law eliminates severance pay for layoffs … The facts? All pages

JAKARTA, KOMPAS.com – Coordinating Minister for Political, Legal and Security Affairs (Menko Polhukam) Mahfud MD call severance pay for workers who are victims of termination of employment ( PHK) remains in the Law (UU) of Job Creation.

This statement was expressed by him at the same time refuting the information circulating in the public regarding the absence of internal layoffs Work Creation Act.

“There are several hoaxes. For example, there is no severance pay, that is not true. Severance pay there is, “said Mahfud MD in a press conference broadcast by Kompas TV, Thursday (8/10/2020).

In addition, he also denied that the Job Creation Law made layoffs easier.

Also read: This is the reason the government cuts the maximum value of severance pay

According to Mahfud, companies that are planning to do layoffs must pay if the work contact has not ended.

He also stated that the Job Creation Law was born out of the government’s response after receiving complaints from the public and workers.

“The Job Creation Law was created to respond to complaints from the public, workers that the government is slow in handling the business licensing process, the regulations overlap,” he said.

Cross-check results

Kompas.com traced Mahfud MD’s statement to Law Number 13 of 2003 concerning Manpower.

Also read: Check out the calculation of the latest severance pay for layoffs in the Job Creation Law

In the Manpower Act, the maximum amount of severance pay that workers can get is 32 times their wages.

The law explains that for a work period of eight years or more, the severance pay amount earned is nine months of wages.

In addition, workers with more than 24 years of service will receive ten months of wages of reward for work.

In addition, there is another clause that explains, if a worker experiences layoffs due to efficiency, he is entitled to severance pay with a value twice the predetermined value.

Also read: In the Job Creation Bill, severance pay is borne by the entrepreneur and the government

As an illustration, a person with a wage in accordance with the provincial minimum wage (UMP) of DKI Jakarta amounting to IDR 4.2 million experiences layoffs (PHK) after 8 years and 4 months.

This is because the company where he works experiences efficiency. So, when referring to the Manpower Act, the amount of severance pay earned is nine months of wages.

Then, because the worker concerned has been laid off due to efficiency, the amount of severance pay is multiplied by two, which is 18 months of wages. Workers will also receive tenure awards.

For a work period of six years but less than nine years, the amount of work time award is three months’ wages.

Thus, the amount of severance pay pocketed will be 21 times the wage salary, or Rp.88.2 million.

Also read: Workers Union Rejects Reduction of Termination of Layoffs in the Job Creation Bill

Meanwhile in the Job Creation Law, the article regarding additional severance pay that workers get if the company performs efficiency is deleted.

The government and the DPR agreed to change the maximum severance pay received by workers to 25 times the wages consisting of 19 times the monthly wages of workers and 6 times the job loss guarantee (JKP).

This means that Mahfud MD’s statement is correct that the Job Creation Law does not reduce severance pay for workers who have been laid off. However, the statement is incomplete.

Workers who are laid off under the Job Creation Law will still be given severance pay, but the value is reduced compared to the previous legal umbrella, namely the Manpower Law.

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