OMNIBUS LAW: AMENDMENT TO EMPLOYMENT LAW (Indonesia)

Author: Ichsan Montang

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Asia Legal Review No.29 (November, 2020)

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

Introduction
After a long wait, the Government of Republic of Indonesia finally issued the Law No. 11 of 2020 dated 2 November 2020 on Job Creation, which is publicly known as the “Omnibus Law”. Despite of the protest from public due to the lack of socialization and some issues during its making process, the Parliament and President had approved the content and officially promulgated this Omnibus Law. The Omnibus Law is effective immediately at the date of its promulgation, namely on 2 November 2020.

The Omnibus Law was first announced by President Joko Widodo in his speech on the inauguration day for the second term of his administration. The main purpose of the Omnibus Law is to attract investment into Indonesia and in turn to create jobs for people. The law amends 78 existing laws and introduces new provisions which are considered to be more favorable for investors. Through the enactment of the Omnibus Law the government expects, among others (i) simplification and centralization of licensing procedure, (ii) abolition of existing laws and regulations that are less favorable for investment or contradict with other regulations, and (iii) harmonization between existing laws and their implementing regulations.

This articles set out our analysis on the amendment to the Employment Law under the Omnibus Law.

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