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Jakarta Post

COVID-19, Job Creation Law remain major challenges for workers in 2021: KSPI

  • Nina A. Loasana

    The Jakarta Post

Jakarta   /   Mon, December 28, 2020   /   06:38 pm
COVID-19, Job Creation Law remain major challenges for workers in 2021: KSPI Priorities: A protester holds a sign that reads “Overcome the virus, withdraw the omnibus [law]” during a protest on Nov. 12 outside the House of Representatives in Senayan, Central Jakarta. Workers continue to demand that the government repeal the Job Creation Law, while labor unions plan to challenge the law at the Constitutional Court. (JP/Seto Wardhana)

The Confederation of Indonesian Trade Unions (KSPI) says 2021 may be a grim year for workers across the archipelago as the multidimensional crisis triggered by the COVID-19 pandemic is far from over and the Job Creation Law remains in force.

"The COVID-19 pandemic has multiple effects on workers across the nation. It will be hard to improve workers' conditions unless the [transmission] curve is flattened," KSPI president Said Iqbal said in a virtual press conference on Monday.

He said KSPI members were among workers infected and killed by COVID-19, although he did not elaborate on the figure.

"New confirmed cases, the fatality rate and the transmission rate among workers have been on an increasing trend, in a similar fashion to the national COVID-19 curve," he said, alleging that lax health protocol enforcement at factories was the main reason.

Read also: Looking toward a post-pandemic Indonesia Said expressed pessimism over the economic outlook for 2021, arguing that the recession would continue into next year despite claims from Coordinating Economic Minister Airlangga Hartanto that the nation’s economy had started to pick up.

Airlangga said recently that the arrival of the COVID-19 vaccine would buoy the public’s confidence and sense of security, which should lead them to restarting economic activities.

The minister also claimed that the country had managed to control the economic impact of the pandemic better than other G20 countries.

"Contrary to the minister's claims, reports from our members suggest that demand continues to plummet in various sectors, causing factories to reduce their production. We are pessimistic that the economy will improve next year," he said.

Said expressed concern that the situation could lead to massive layoffs next year, as companies would seek to cut their losses amid the economic slump.

Several industries that had not laid off workers at the start of the pandemic had begun to cut their workforces or force employees to take unpaid leave, he said, citing as examples the textile, automotive, pharmaceutical, banking and mining industries.

"We predict that around 500,000 workers could be laid off next year," he went on to say.

Finance Minister Sri Mulyani Indrawati said last week that the government projected a GDP contraction of between 1.7 and 2.2 percent this year, driven by shrinking household spending, which accounts for more than half of Indonesia’s GDP.

This figure marks a downward revision from the ministry’s previous forecast of an economic contraction of 0.6 to 1.7 percent.

“We expect household spending to contract by around 2.6 to 3.6 percent due to rising COVID-19 cases in December that triggered tighter restrictions,” Sri Mulyani said during a virtual press briefing on Dec. 21.

The Asian Development Bank (ADB) and World Bank have also lowered their projections for Indonesia’s economy.

Both institutions expect Indonesia’s economy to contract by 2.2 percent this year, as opposed to previous forecasts of a GDP contraction of 1 and 1.6 percent, respectively.

Read also: Cabinet shake-up expected to accelerate COVID-19 spending, spur economy

The controversial Job Creation Law, which was passed by the House of Representatives on Oct.5, was feared to lower workers' welfare and social protection next year, Said further said.
"Many workers under the KSPI have reported that companies had fired their permanent employees while offering to rehire them as contract workers, because under the law there is no time limit for employing workers on limited contracts before employing them on a permanent basis," he said.

Said claimed there were many more regulations under the law that could harm workers’ rights and welfare, such as the elimination of the sectoral minimum wage (UMSK), relaxed outsourcing rules, lower severance pay and eased recruitment of foreign workers.

"The difficult situation could lead to more strikes and protests in 2021," he warned.

The KSPI and dozens of other unions and NGOs have filed a legal challenge against the Job Creation Law with the Constitutional Court.

Read also: Yearender 2020: Govt takes extraordinary measures, passes jobs law as Indonesia falls into recession

As a judicial review of the law was currently under way, Said said, the KSPI planned to stage more protests opposing the law and the problematic articles in it.

Said further said that the KSPI members would stage protests again in 18 regions across the country on Tuesday to voice their demands for the annulment of the Job Creation Law and increase in the UMSK. The protests would also be conducted virtually due to restrictions on the number of protestors because of the COVID-19 pandemic.