ASSIGNMENT HCM

OPINION ON THE OMNIBUS LAW AND THE PREVIOUS LAW

BY : M febri setiawan ( 14202300062 )

Bayu Saputra Kusuma ( 14202300126 )

Negative Opinion - Omnibus Law:

The Omnibus Law on Job Creation in Indonesia has faced criticism for its potential negative
impact on workers' rights and job security. One major concern is the shift in responsibility for
the protection of outsourced workers, wages, and employment requirements to the
outsourcing company, relieving employers of their liability [3]. This change may lead to a
decrease in job security and the rights of outsourced workers, potentially exacerbating
income inequality and exploitation.

Furthermore, the removal of certain provisions related to working hours, rest time, and
leave raises concerns about work-life balance and employee well-being [4]. The elimination
of the provision for two days off for five working days and the lack of a mandate for long
leave after six years of consecutive work may negatively impact the physical and mental
health of workers.

Positive Opinion - Omnibus Law:

The Omnibus Law on Job Creation in Indonesia presents potential benefits for the country's
economy. The law aims to streamline and simplify the regulatory framework, making it more
conducive for businesses and investment [1]. This can attract both domestic and foreign
investment, leading to increased job opportunities and economic growth.

Additionally, the law introduces changes to employment contracts, such as the renewal of
fixed-term contracts, providing more flexibility for employers in managing their workforce
[1]. This flexibility can contribute to increased job creation and allow businesses to adapt to
changing market conditions more effectively.

Citations:
[1] Sectors 47. Law No. 25 of 2007 on Investment; Starting from Article 76. Page 527
onwards.
[3] Industrial relation dispute mechanism. KPMG Confidential.
[4] Changes in outsourcing and employment rights. KPMG Confidential.

Negative Opinion - Labor Law:

The Labor Law in Indonesia, while aiming to protect workers' rights, has faced criticism for
its enforcement and effectiveness. One major concern is the lack of effective enforcement
mechanisms, which can lead to widespread violations of labor rights without proper
consequences for employers [1]. This undermines the intended protections and leaves
workers vulnerable to exploitation and unfair treatment.

Additionally, the exemption of Micro and Small Businesses from minimum wage provisions
raises concerns about income inequality and the potential for these businesses to exploit
their employees [2]. Without clear regulations and enforcement, there is a risk that these
businesses may not provide adequate wages and benefits to their workers, further
exacerbating income disparities.

Furthermore, the lack of clear regulations regarding long leave and the reliance on
employment agreements, company regulations, or collective employment agreements for its
implementation can lead to inconsistencies and unequal treatment among workers [3]. This
ambiguity leaves room for employers to manipulate leave entitlements and potentially deny
workers their rightful time off.

Positive Opinion – Labor law

The Labor Law in Indonesia provides essential protection for workers' rights and ensures fair
treatment in the workplace. It establishes minimum wage provisions, which help to
safeguard workers from exploitation and ensure they receive fair compensation for their
labor [2]. This provision helps to promote income equality and improve the standard of
living for workers.

Additionally, the Labor Law includes provisions for leave entitlements, such as annual leave
and maternity leave, which contribute to work-life balance and the well-being of employees
[4]. These provisions recognize the importance of rest and time off for workers' physical and
mental health.

Furthermore, the Labor Law sets regulations for the termination of employment, protecting
workers from arbitrary dismissal and providing them with legal recourse in case of unfair
treatment [1]. This helps to ensure job security and stability for workers.

Citations:
[1] Labor Law Number 13 of 2003.
[2] Minimum wage provisions. KPMG Confidential.
[3] Ambiguity in long leave regulations. KPMG Confidential.
[4] Leave entitlements. KPMG Confidential.