In what remained as the last remaining days of 2022, the Indonesian Government issued Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation (“Perppu 2/2022”). This action leading up to the closing of 2022 was a result of Constitutional Court Decision No. 91/PUU-XVIII/2020 in late 2021, which rendered Law No. 11 of 2022 on Job Creation (“Job Creation Law”) partially unconstitutional and gave the government two years, until November 2023, to amend the law; therefore prompting a necessity for a governmental response.
Effective as of 30 December 2022, Perppu 2/2022 hereby revokes and replaces the Job Creation Law. The court also ordered the government and lawmakers to refrain from issuing any further implementing regulations for the Job Creation Law pending its amendment. If the Job Creation Law is not amended or replaced before the two-year timeframe, it shall be deemed permanently unconstitutional and all the laws and regulations amended or replaced by the Job Creation Law and its implementing regulations shall come back into force as if the Job Creation Law was never enacted. Although Perppu 2/2022 has been issued and is currently applicable, it is currently still in the midst of obtaining approval from the People’s Representative Council of Indonesia (“DPR”) once it returns to session on January 9, 2023.
Perppu 2/2022 has resulted in major changes to various sectors of industry including employment, land law, agriculture, capital markets and tax law among others. This installment will be the first of various installments overlooking the implemented changes as a result of the enactment of Perppu 2/2022.
PERPPU SERIES: Manpower
The introduction of Perppu 2/2022 has amended the implementation of various employment law provisions as lastly amended by the Job Creation Law as follows:
Based on the above stated information, it is advisable to keep an eye on pending regulations regarding minimum wage and outsourcing in the coming months.
Should there be any queries related to this regulation or to find out if this affects your business or personal interest, please do not hesitate to contact us.
