The \'Hot Potato\' of the Severance Issue

KOMPAS/ALIF ICHWAN

Coordinating Economic Minister Airlangga Hartarto (center), accompanied by House of Representatives Speaker Puan Maharani (second right), meets the press after a closed-door meeting in February (12/2/2020) at the Senayan legislative complex in Jakarta. Accompanied by Agrarian and Spatial Planning Minister Sofyan Djalil, Law and Human Rights Minister Yasonna Laoly, Environment and Forestry Minister Siti Nurbaya, Manpower Minister Ida Fauziyah, Finance Minister Sri Mulyani Indrawati and House deputy speakers Azis Syamsuddin and Rachmat Gobel, the pair presented the President\'s Letter on the omnibus bill on job creation on Feb. 12.

Both workers and employers have responded strongly to the new severance scheme in the job creation omnibus bill. A middle ground must be found so that both parties can agree on matters regarding layoffs and severance pay.

There have been strong reactions to the new severance scheme in the job creation omnibus bill. On the one hand, the government wants to develop investment-friendly regulations to create more jobs. On the other, the bill loosens labor rules and compensation for workers and may negatively affect workers’ welfare.