Employers Proposals on PKWT in the Draft Bill on Manpower

The Indonesian Chamber of Commerce and Industry (“ KADIN ”) is advocating for the revision of regulations on Temporary Employment Agreement (Perjanjian Kerja Waktu Tertentu- “ PKWT ”) in the deliberations of the Draft Manpower Bill (“ RUU ”). This initiative is considered necessary to maintain corporate competitiveness amid global economic uncertainty.

“Regarding PKWT, employers are advocating for more flexible regulations to facilitate the adjustment of workforce size in line with workload,” said Diana Dewi, Chairperson of the Jakarta Special Capital Region Chapter of KADIN, to Hukumonline.

KADIN noted that the current strict limitations could potentially hinder business expansion. For example, the automatic conversion mechanism from a PKWT to an Permanent Employment Agreement (Perjanjian Kerja Waktu Tidak Tertentu– “ PKWTT ”) or permanent employee status.

According to Diana, each company has distinct characteristics and needs. Therefore, the determination of which types of work can be contracted or outsourced should not be rigidly limited to certain sectors only.