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Ada Pertanyaan? Hubungi Kami Ari Pramuditya, Agus Sahbani
The Constitutional Court. Photo by: RES
Government Regulation (Peraturan Pemerintah – “PP”) No. 78 of 2015 on Wages continues to be a source of dispute among the country’s labor force and labor activists are demanding a judicial review of PP No. 78 by the Indonesian Supreme Court.
Labour activists have also petitioned the Constitutional Court (Mahkamah Konstitusi – “MK”) to make a statement regarding the formula used for calculating the minimum wage, as set out in Article 88 paragraph (4) of Law No. 13 of 2003 on Labor.
The legal counsel for the activists in question, who are all members of the Unnamed Workers Alliance (Aliansi Buruh Tanpa Nama – “Abu Tama”), submitted a request for a judicial review of the Labor Law with the Registrar at the MK on Tuesday 8 December 2015.
“We have asked for Article 88 paragraph (4) of the Labor Law to be conditionally interpreted. The government previously decreed that the minimum wage be determined through an appraisal of the elements that make up the so-called Decent Standard of Living [Komponen standar Kebutuhan Hidup Layak – “KHL”], as well as considerations of productivity value and economic growth, based on recommendations made by the Wages Council at the provincial/district/city levels,” the applicant’s attorney, Iskandar Zulkarnain, told hukumonline.
Mr. Zulkarnain asserted that his clients were being forced to take legal action as a result of the government’s new policy, which they believe will prove disadvantageous to the Indonesian workforce.
The formula used for the calculation of minimum wage has changed under the new policy and a number of KHL elements, as well as recommendations from the Wage Council, are no longer to be used as criteria when determining the minimum wage.
The 2015 PP on Wages has now effectively abolished the Wage Council and Article 44 paragraphs (1), (2) and (3) of the PP on Wages sets out the new formula to be used to calculate minimum wage. This formula consists of the minimum wage for the current year, which combined with the inflation rate and an economic-growth figure.
Specifically, Article 88 paragraph (4) of the PP on Wages states that, “The government set the minimum wage, as stipulated in paragraph (3) part (a), according to an appraisal of what constitutes a decent standard of living and with consideration also being given to both productivity and economic growth.”
Mr. Zulkarnain also affirmed that Article 89 paragraph (3) of the Labor Law states that a determination of minimum wage is the responsibility of the country’s governors at the provincial, district or city levels, on the recommendation of the Wages Council.
However the new PP on Wages removes the Wages Council from the equation. What is paramount though is that any formulation of the PP on Wages must refer to, or must at least not conflict with, Indonesia’s Labor Law. Mr. Zulkarnain therefore believes that any process used to determine the minimum wage that does not involve the Wage Council should be deemed unlawful.
“Hence, the applicant, which consists of 113 laborers from 50 companies located across West Java and East Java, are demanding that any determinations of cumulative minimum wage, which take account of KHL, productivity value and economic growth, should also be based on the recommendations of the Wage Council,” Mr. Zulkarnain explained.
Mr. Hafidz believes however that the current PP on Wages allows for a number of interpretations as regards any formulations of minimum wage. As a result of this, Hafidz asserts that the government tends to interpret determinations of minimum-wage subjectively.
“However ultimately, minimum wage is not being properly calculated in accordance with the PP on Wages, which states that the current minimum wage, inflation, and economic growth should be taken into account,” asserted Mr. Hafidz.
Hafidz, affirming Mr. Zulkarnain’s statement, also added that the PP on Wages had now negated the role of the Wage Council, which should consist of representatives from employers, trade unions, governments, universities, and experts. In fact though, MK decision No. 11/PUU-XII/2014 guarantees the existence and role of the Wage Council.
“According to the MK decision, the involvement and recommendations of the Wage Council are clearly mandated and apply to every process used to determine the minimum wage by the relevant governors,” Mr. Hafidz explained.
Based on a number of cases that have already been decided by the Supreme Court, the proposal for the judicial review of the Labor Law may end up, “closing the door” on labor’s ability to question PP No. 87 with the Supreme Court.
In the case of the PP on Levies, for example, which the Capital Market Legal Consultant (Himpunan Konsultan Hukum Pasar Modal – “HKHPM”) demanded should be reviewed, the Supreme Court deemed the case unacceptable, as the umbrella law which encompassed the PP in question was being reviewed by the MK at the time.
(sp)
Ari Pramuditya, Agus Sahbani
The Constitutional Court. Photo by: RES
Government Regulation (Peraturan Pemerintah – “PP”) No. 78 of 2015 on Wages continues to be a source of dispute among the country’s labor force and labor activists are demanding a judicial review of PP No. 78 by the Indonesian Supreme Court.
Labour activists have also petitioned the Constitutional Court (Mahkamah Konstitusi – “MK”) to make a statement regarding the formula used for calculating the minimum wage, as set out in Article 88 paragraph (4) of Law No. 13 of 2003 on Labor.
The legal counsel for the activists in question, who are all members of the Unnamed Workers Alliance (Aliansi Buruh Tanpa Nama – “Abu Tama”), submitted a request for a judicial review of the Labor Law with the Registrar at the MK on Tuesday 8 December 2015.
“We have asked for Article 88 paragraph (4) of the Labor Law to be conditionally interpreted. The government previously decreed that the minimum wage be determined through an appraisal of the elements that make up the so-called Decent Standard of Living [Komponen standar Kebutuhan Hidup Layak – “KHL”], as well as considerations of productivity value and economic growth, based on recommendations made by the Wages Council at the provincial/district/city levels,” the applicant’s attorney, Iskandar Zulkarnain, told hukumonline.
Mr. Zulkarnain asserted that his clients were being forced to take legal action as a result of the government’s new policy, which they believe will prove disadvantageous to the Indonesian workforce.
The formula used for the calculation of minimum wage has changed under the new policy and a number of KHL elements, as well as recommendations from the Wage Council, are no longer to be used as criteria when determining the minimum wage.
The 2015 PP on Wages has now effectively abolished the Wage Council and Article 44 paragraphs (1), (2) and (3) of the PP on Wages sets out the new formula to be used to calculate minimum wage. This formula consists of the minimum wage for the current year, which combined with the inflation rate and an economic-growth figure.
Specifically, Article 88 paragraph (4) of the PP on Wages states that, “The government set the minimum wage, as stipulated in paragraph (3) part (a), according to an appraisal of what constitutes a decent standard of living and with consideration also being given to both productivity and economic growth.”
Mr. Zulkarnain also affirmed that Article 89 paragraph (3) of the Labor Law states that a determination of minimum wage is the responsibility of the country’s governors at the provincial, district or city levels, on the recommendation of the Wages Council.
However the new PP on Wages removes the Wages Council from the equation. What is paramount though is that any formulation of the PP on Wages must refer to, or must at least not conflict with, Indonesia’s Labor Law. Mr. Zulkarnain therefore believes that any process used to determine the minimum wage that does not involve the Wage Council should be deemed unlawful.
“Hence, the applicant, which consists of 113 laborers from 50 companies located across West Java and East Java, are demanding that any determinations of cumulative minimum wage, which take account of KHL, productivity value and economic growth, should also be based on the recommendations of the Wage Council,” Mr. Zulkarnain explained.
Mr. Hafidz believes however that the current PP on Wages allows for a number of interpretations as regards any formulations of minimum wage. As a result of this, Hafidz asserts that the government tends to interpret determinations of minimum-wage subjectively.
“However ultimately, minimum wage is not being properly calculated in accordance with the PP on Wages, which states that the current minimum wage, inflation, and economic growth should be taken into account,” asserted Mr. Hafidz.
Hafidz, affirming Mr. Zulkarnain’s statement, also added that the PP on Wages had now negated the role of the Wage Council, which should consist of representatives from employers, trade unions, governments, universities, and experts. In fact though, MK decision No. 11/PUU-XII/2014 guarantees the existence and role of the Wage Council.
“According to the MK decision, the involvement and recommendations of the Wage Council are clearly mandated and apply to every process used to determine the minimum wage by the relevant governors,” Mr. Hafidz explained.
Based on a number of cases that have already been decided by the Supreme Court, the proposal for the judicial review of the Labor Law may end up, “closing the door” on labor’s ability to question PP No. 87 with the Supreme Court.
In the case of the PP on Levies, for example, which the Capital Market Legal Consultant (Himpunan Konsultan Hukum Pasar Modal – “HKHPM”) demanded should be reviewed, the Supreme Court deemed the case unacceptable, as the umbrella law which encompassed the PP in question was being reviewed by the MK at the time.
(sp)