Workers Express Support for Establishment of Unemployment-Insurance Program

Indonesian Version

 
Marcell Sihombing, Ady T.D. Achmad
 

 

Bambang S. Brodjonegoro, the Minister for National Development Planning and Chairman of the National Development Planning Board recently proposed the establishment of an unemployment-insurance program which would address any layoffs carried out by employers. Minister Brodjonegoro was keen to emphasize that this proposed insurance program was just a suggestion, although Brodjonegoro also expressed his hope that such a program would, if approved, ultimately be incorporated into the state budget.
 
Indonesia's labor force has lauded Minister Brodjonegoro’s proposal, in spite of its tentative nature. Commenting on the Minister’s proposal, Timboel Siregar, Secretary General of the Indonesian Employee’s Organization (OPSI), asserted that the proposed program would offer a solution for workers whose employment had been terminated by their employers. According to Mr. Siregar, there are four reasons why the establishment of such an unemployment-insurance program was essential.
 
Firstly, Indonesia’s employment system enables employers to easily terminate their workers’ employment, especially the employment of any workers who were originally hired under a fixed-term/temporary or contract-basis employment scheme, outsourcing scheme or daily basis freelancer scheme. Moreover, the process of settling layoff disputes, as stipulated under Law No. 2 of 2004 on the Settlement of Industrial Relationship Disputes (PPHI Law), can last up to three years before a final and binding decision is ultimately rendered by the Supreme Court (MA) up to the level of a case review (peninjauan kembali). Obviously, such a lengthy timeframe means that laid off workers will find it difficult to cover their living expenses while any case is being processed.
 
Secondly, layoffs are often accompanied by violations of Article 155 (2) of Law No. 13 of 2003 on Employment (Employment Law), whereby many employers do not properly pay their workers’ salaries while the settlement processes involved in any layoff disputes are ongoing. This is in spite of the fact that said provision requires both employers and workers to properly maintain their rights and obligations until any layoff dispute has been completely settled.
 
The third reason for the establishment of an unemployment-insurance system reflects upon the fact that most of the country’s labor force comprises of blue-collar workers whose salaries only meet the exact minimum-wage threshold. This monthly wage is only sufficient to satisfy workers’ living expenses, with barely anything at all left for savings. As a result of this, any workers who are laid off will be in an extremely vulnerable position, as they mainly have no additional sources of income aside from their monthly wage.
 
Fourthly, the economic climate in Indonesia is not conducive to the creation of abundant employment opportunities, which means that any workers who are laid off are likely to experience difficulties when looking for new jobs. Moreover, any such laid off workers will still need to meet their living expenses as they endeavor to find new work. Some kind of financial support is therefore essential in order to guarantee the purchasing power of any laid-off workers and prevent them from falling into a life of penury. This is especially true in cases where workers experience difficulties attempting to access Old-Age Insurance funds (JHT),which are paid by the Social Security Agency (Badan Penyelenggara Jaminan Sosial – BPJS) for Employment. This particular problem demonstrates that the JHT program is not in line with the various provisions which are set out in Law No. 40 of 2004 on the National Social Security System (SJSN Law).
 
“The establishment of an unemployment-insurance program can help workers to meet their living expenses during periods when they have no income, during the settlement of layoff disputes, as well as during periods when they are attempting to find new work. Furthermore, the JHT fund should not be accessed by workers until they actually reach old age,” Mr. Siregar asserted in Jakarta on Monday, 7 November 2016.
 
Continuing to address this issue, Mr. Siregar also stated that the newly proposed program should be managed by the BPJS for Employment. In this context, it will be necessary to incorporate provisions relating to any unemployment-insurance program into both the SJSN Law, as well as into Law No. 24 of 2011 on the BPJS, so that it has proper legal standing as a mandatory program.
 
Said Iqbal, President of the Indonesian Confederation of Trade Unions (KSPI), also expressed his support for the proposal. Mr. Iqbal believes that such a program would be able to make a positive contribution to the lives of any workers who experience layoffs, as the proposed program is in line with ILO Convention No. 102 of 1952 on Social Security, which addresses the notion of Minimum Standards.
 
“An unemployment-insurance program would be a part of the social-protection floor program set out under the ILO Convention and should function alongside the other five existing social-security programs,” Mr. Iqbal stated.
 
Despite offering his support however, Mr. Iqbal also sought to clarify the fact that any such program must not invalidate the various rights of workers who are experiencing layoffs. These rights are clearly stipulated under the Employment Law and include the right to receive severance payment. Mr. Iqbal categorically stated that any unemployment-insurance program which is eventually put in place must not lead to the reduction or nullification of an employer’s obligation to pay severance payment to any worker who experiences a layoff, as mandated under Articles 156 and 160 of the Employment Law. Mr. Iqbal also pledged that he would not allow the government to utilize any unemployment program in order to portray themselves as being supportive of workers’ rights and security, while in practice inflicting financial losses on them as a result of the reduction or nullification of workers’ rights
 
Mr. Iqbal further asserted that any unemployment-security program should become an integral part of the overall social-security umbrella that the government offers to the country’s citizens. Mr. Iqbal also reiterated and underlined the fact that an unemployment-security program and severance payment were two wholly different things that must not nullify one another.
 
On a separate occasion, Hariyadi B. Sukamdani, General Chairman of the Employers’ Association of Indonesia (APINDO), had previously asserted that many countries around the world had already adopted the so-called “safety-net” mechanism, which enables their citizens to receive a certain amount of income. In the case of workers, this safety net is implemented in the form of the minimum-wage threshold.
 
However, Mr. Sukamdani also pointed out that the government had yet to include unemployed citizens under the protection of said safety net and stressed that this matter was closely related to poverty levels in the country. Mr. Sukamdani thus urged the government to ensure that all citizens were able to generate income and to be fair and evenhanded as regards the establishment of any safety-net mechanism for unemployed citizens.

(cd/sp)