Indonesian businesses fear new layoff task force could lead to criminalisation

The Star

04-05-2025

Employees of a garment company woring in a factory in Central Java, in this undated photo. - Central Java Regional Government
JAKARTA: Businesses are wary that President Prabowo Subianto's plan to form a special task force on layoffs could lead to the criminalisation of employers rather than preventing mass job cuts.
The Indonesian Textile Association (API) insists that the task force, meant to resolve labour disputes and reduce terminations, must not stray from its preventive mission.
'It's a worrying idea for any labour-intensive industry player,' API executive director Danang Girindrawardana said on Thursday (May 1), as quoted by Bisnis.
'If it turns into a tool for criminalising employers, it will scare businesses away from operating or expanding.'
The task force could risk veering off from its original purpose as a conflict resolution tool and instead become a vehicle for financial audits that might punish businesses rather than assist them, he warned.
Rather than duplicating existing labor frameworks, which were already governed by tripartite consultations involving the government, workers and employers, he said the task force should complement what was in place.
'There is no business without workers, and no workers without businesses. The two must understand and respect one another,' Danang said, while acknowledging that industrial relations were not always smooth.
He pointed to mass layoffs at footwear company PT Yihong, which was triggered by a small worker dispute that escalated into a full strike.
Other cases of layoff, he said, were due to financial losses on the company's part, such as those seen in bankruptcy proceedings at Yamaha-owned piano factories and PT Sri Rejeki Isman, better known as Sritex.
Prabowo pledged on Thursday to improve workers' welfare and promote stronger labour protections amid dissatisfaction over labour conditions and concerns of more job losses as he addressed hundreds of thousands of workers rallying at the National Monument (Monas) in Central Jakarta to mark International Workers' Day, or May Day.
Amid mounting dissatisfaction over labour conditions and fears of further job cuts, Prabowo promised to form a layoff task force that will prevent arbitrary dismissals of employees and ensure companies adhere to fair labour practices, as demanded by the workers attending the May Day rally.
He also unveiled a plan to establish the National Workers Welfare Council, a new body which would include labour union leaders and public figures tasked with evaluating existing labour laws and proposing reforms to the President to protect workers' rights.
'We will not allow people, workers, to be laid off arbitrarily. If necessary, the state must not hesitate to intervene,' said Prabowo in a fiery speech.
His remarks came amid growing discontent over labour conditions and a wave of job cuts across multiple industries.
Some 60,000 workers from 50 unionised companies lost their jobs in January and February alone, based on the report from the Confederation of Indonesian Trade Unions (KSPI).
This figure nearly matched the total number of layoffs for all of 2024. Manpower Ministry figures seen by The Jakarta Post show 77,965 layoffs for all of 2024, up from 64,855 in 2023 and 25,114 workers in 2022. - The Jakarta Post/ANN