"This is because the clause was not a civil code but criminal. If a company refuses to give the workers' severance pay according to the law, they will be convicted," Director of Research of CORE Indonesia Piter Abdullah noted in a statement here on Saturday.
The previous Law No. 13 of 2003 stipulated that a company refusing to give severance payment would be charged under the civil code, and this would take a longer process to settle.
Ironically, it is the worker, as the claimant, who had to bear the expenses of the civil lawsuit.
Abdullah noted that the new law on job creation demonstrated the government's protection for workers, and those companies refusing to provide severance pay would face the state's action.
He ensured that the law on job creation would be a solution for laid-off workers to receive their severance pay, although the amount might be lesser, from earlier 25 to 32 times their salary, but it offer certainty to protect the workers' rights.
"I can ensure that it will not be detrimental to workers. Why, because instead of the lower amount (of severance pay), there is a certainty that it will be paid," he explained.
According to the Manpower Ministry’s data in 2019, only 27 percent businessmen had fulfilled the requirement to offer compensation payment in accordance with Law No. 13 of 2003.
Some of the companies claimed bankruptcy for the reason behind not giving the severance pay.
The World Bank report, quoting data of the National Workforces Survey of the Central Statistics Agency (BPS) in 2018, noted that 66 percent of the workers did not receive severance pay, 27 percent received lesser than the required amount, and seven percent received the severance pay in accordance with the law. Related news: Job creation law to benefit both investors and workers: Hipmi
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Translator: Aji Cakti, Sri Haryati
Editor: Suharto
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