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Q N A

Is there a Republic of Indonesia government policy regarding wage adjustments because of restrictions on business activities?

Policy regarding adjustments and payments of wages procedures are regulated in a Ministerial Circular Manpower of the Republic of Indonesia Number M/3/Hk.04/iii/2020 Year 2020 concerning Protection Workers / Laborers and Business Continuity in Covid-19 Prevention and Control Framework (SE KEMENAKER). This SE KEMENARKER is intended and aims to maintain business continuity and protect workers. The SE KEMENAKER requires two condition before wage adjustments can be implemented. The first condition is an agreement between business owners/entrepreneurs with workers, and the second condition being the existence of a government policy that results in all or part of the workforce being absent from work as a result of a government directive or policy.

 

Is there a Republic of Indonesia government policy regarding postponement of work in the construction sector due to Covid-19?

Based on the Instruction of the Minister of Public Works and Public Housing Number: 02/IN/M/2020 concerning Corona Virus Spread Prevention Protocol Disease 2019 (Covid-19) (Instruction of the Minister of Public Works) in Operation of Construction Services, and is regulated as Temporary Work Stoppages. Instructions of the Minister of Public Works provides for Temporary Work Stoppages which can be implemented for the following reasons:

a. Has a high risk due to the project location at the distribution center;

b. Workers being tested positive and/or workers have been classified as Patients under Supervision (PDP); or

c. Heads of Ministries/Institutions/Agencies/The Regional Head have issued a regulation to temporarily stop activities due to force majeure.

Strictly speaking, the Public Works Minister’s Instruction is couched as Temporary Work Stoppages and are included as a cessation due to force majeure. Furthermore, as a result of the Temporary Work Stoppages,the inherent obligation of the Service User and Service Providers to Construction Workers, Subcontractors, Manufacturers and Suppliers involved in the form of compensation for labour costs and Payments continue and are still binding. However, a thorough analysis of each contract provision is necessary and the construction of each clause should be evaluated on a case by case basis. VKA/HES