Manpower Draft Bill to Re-Regulate Wage and Termination of Employment

The House of Representatives of the Republic of Indonesia (“DPR RI”) is currently mapping the reformulation of crucial norms in the Manpower Draft Bill (Rancangan Undang-Undang – “RUU”) to accommodate the Constitutional Court’s (“MK”) ruling on Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation into Law (“Law 6/2023”). The formulation of this regulation is focused on ensuring legal certainty in the protection of workers’ rights and the sustainability of businesses.

“Without employers, jobs cannot be created. Without workers, companies cannot operate. This law must be fair to both parties,” stated a member of Commission IX of the DPR RI, Irma Suryani Chaniago.

The Bill will re-regulate several strategic issues mandated by the MK’s ruling, including the wage system, mechanisms for Termination of Employment (“PHK”), as well as provisions on foreign workers and outsourcing. The drafting of these new norms will draw from past experience, ensuring that each provision has stronger legal standing.

“As a partner of the Ministry of Manpower, we are responsible for drafting this bill. We have also invited representatives of labor unions and employers on several occasions to obtain comprehensive input,” Irma added.