Minimum wage for DKI Jakarta Province increases for 2013
The Governor of DKI Jakarta has determined a new Provincial Minimum Wage (“UMP”) that applies to every company in DKI Jakarta. The UMP for DKI Jakarta is stipulated under Governor of DKI Jakarta Regulation No. 189 of 2012 regarding Provincial Minimum Wage for 2013, dated November 20, 2012 (“Regulation”). Based on the Regulation, the UMP for DKI Jakarta Province will be Rp 2,200,000 (two million two hundred thousand Rupiah) per month, beginning January 1, 2013. This is an increase of almost 44% over the 2012 UMP of Rp1,529,150 (one million five hundred twenty nine thousand one hundred fifty Rupiah) per month, which was stipulated under Governor of DKI Jakarta Regulation No. 117 of 2011 regarding Provincial Minimum Wage for 2012.
The Regulation stipulates that companies that are unable to pay the new UMP may request a suspension from the relevant manpower service office no later than 10 (ten) days before the UMP becomes effective on January 1, 2013.
ARFIDEA KADRI SAHETAPY-ENGEL TISNADISASTRA
November 27, 2012
Employees’ Right to Register with Jamsostek and/or Social Security Organizer Agency (BPJS)
The Constitutional Court issued its Judgment No. 70/PUU-IX/2011 dated August 2, 2012 which now
allows employees register themselves with PT Jamsostek (Persero) as the organizer of the existing
employment social security (or “Jamsostek” in short in Bahasa Indonesia) under Law No. 3 of 1992
(the “Jamsostek Law”) and/or with the Social Security Organizer Agency (Badan Penyelenggara
Jaminan Sosial or “BPJS”) under Law No. 40 of 2004 (the “SJSN Law”).
The Court takes the view that the provisions of the Jamsostek Law and the SJSN Law which require
employers to register their employees with PT Jamsostek and BPJS respectively are insufficient to
secure the basic right of employees to the coverage under the Jamsostek program under the Jamsostek
Law or the national social security under the SJSN Law. The Court views that employees must have
the right to register themselves with PT Jamsostek and BPJS if their employers fail to register
themselves with PT Jamsostek or BPJS. Once the employees have registered themselves, their
employers must pay all the required contributions under the Jamsostek Law and/or the SJSN Law as
applicable.
Another Constitutional Court Decision in Favor of Employees
In Decision No. 37/PUU-IX/2011 dated September 19, 2011, the Constitutional Court has again delivered a decision that favors employees in the case of a termination dispute.
This Decision holds that in a dispute between an employer and an employee, both parties have to continue to perform their respective rights and obligations while the court deliberates.
This means that the employee must continue working, and the employer must continue paying the salary and benefits. If the employer suspends the employee, the employer’s obligation to pay salary and benefits continues until the decision is made final and binding.
In employment termination disputes, a Labor Court hears and decides the disputes in the first instance. Decisions of Labor Courts in employment termination may be appealed to the Supreme Court. If no appeal is made within 14 working days, Labor Court decisions become final and binding. The decision of the Supreme Court is final and binding.
Under the applicable laws, the entire proceedings in an employment dispute (including the Supreme Court decision) shall conclude within 140 working days. But in reality, proceedings always exceed the 140-working day period.
The Constitutional Court Decision is obviously a major concern for an employer in an employment termination dispute as the employer must continue paying salary and benefits to the employee during the proceedings until the Supreme Court decides the appeal. The entire proceeding may take more than 1 year.
In addition, the employer has to pay termination benefits to the employee at the end of the proceeding.
In Decision No. 37, the Constitutional Court has failed to consider certain circumstances that may be relevant in an employment termination dispute. For instance, in a termination which is caused by a serious misconduct of an employee, the Constitutional Court’s decision will require the employer to continue paying salary and benefits to the employee (although the employee is suspended). This certainly will not act as a deterrent to employees from committing any serious misconduct.