What is Omnibus Law and why creative workers have to be aware of it

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Image: Student demonstration in September 2019 by Nikita Devi Purnama/TFR

Omnibus law has probably become a part of our everyday vocabularies since the beginning of 2020, at least until COVID-19 happened. The pandemic might have stolen our attention from many things, but apparently, not for some in the government.

Omnibus law is a law that covers a number of diverse or unrelated topics that is meant to simplify affected laws. “Omnibus” is a Latin word meaning “for everything,” that is why we call it RUU Sapu Jagat in Indonesian.

There are four omnibus bills to bolster foreign investment proposed by President Joko Widodo at the beginning of 2020. They are RUU Cipta Lapangan Kerja (Job Creation Bill), RUU Perpajakan untuk Penguatan Ekonomi (Taxation Bill), RUU Kefarmasian (Pharmacy Bill) and RUU Ibu Kota Negara (The National Capital Bill). At this very non-ideal moment, the government is moving at lightning speed to pass the Job Creation Bill, popularly known as RUU Cilaka.

What is Job Creation Omnibus Bill?
RUU Cilaka itself is a wordplay from RUU Cipta Lapangan Kerja (Job Creation Bill), abbreviated to cilaka (disaster). This abbreviation seems to be fitting since the simplification of laws this bill proposed is deemed harmful to many sectors.

RUU Cilaka will cover 11 areas, namely Simplification of Licensing; Investment Requirements; Employment; Ease, Empowerment and Protection of MSMEs; Ease of Doing Business (EoDB); Research and Innovation Support; Government Administration; Imposition of Sanctions; Land Procurement; Government Investment and Projects; and Economic Zones. It means that the regulations and required administration procedure in these sectors would be made easier to go through.

On the surface, the benefits of passing this omnibus bill into law seems to be abundant. For example, the Job Creation Omnibus Law is aiming to open more opportunities for investors by simplifying most of the administrative requirements for both foreign and local investors to start their business here. It is no secret how the country’s red tape as well as complicated regulations and licensing process often drive away investors from doing business in Indonesia.

The existing regulations are indeed complicated and impractical that Indonesia has lost many potential investment. Some also believe that this is the cause of the low labour absorption rate in Indonesia, where we have a job seeker surplus of 2 million every year. Statistics Indonesia reported that the informal sector still dominates national labour absorption at 57.26%, while the formal sector only absorbs about 42.74%. To fix this situation, will RUU Cilaka be the solution? Let’s take a look at the bill.

Why should we care?
RUU Cilaka or the Job Creation Bill is aimed at simplifying multiple areas previously regulated exclusively.

At a glance, it would seem that there is nothing us, creative workers, should be worried about. We are used to severe and highly demanding working conditions; we are used to people not appreciating our works albeit benefitting from our creations. This situation pushed many creative workers to adapt and strive that some choose to work freelance. How bad could the bill affect us?

For one, if this bill is passed into law, freelancers would be at risk of getting hired to do the work of full-time workers. The bill amends Article 56 of Law No.13/2013 on Manpower and revokes Article 59 of the same law. They regulate work agreement, contract extension, etc. for freelance workers.

According to the academic paper of RUU Cilaka, Article 59 is revoked to adapt to the ever-changing global workforce. It aims to legalise more “flexible” work contracts for freelance workers.

This might not seem to be a problem, but there is actually room for companies to hire someone permanently as an outsourced worker instead of a full-time employee because there is no limit on how long a freelance project should take. Not only that, this method is applicable to any field of work.

This situation could put just any worker in a difficult position to secure their job since the contract of freelance workers can be terminated just as the company sees fit without any criminal consequence on the employer’s side.

If the Job Creation Bill is passed into law, outsourced workers could also be affected by client’s requests even more so than before. Under the bill, a specific article that limits the scope of work of outsourced workers is revoked, which means they will literally be at the mercy of clients and their own company. Let’s not talk about how the maximum hours of work per week and overtime is raised in the bill solely to “fulfill the needs to improve production.”

Well, if we were to be real here, all of those have been happening everywhere in any industry, even when they are regulated. We’ve always been living in a reality where freelancers are working most of the time and full-time workers do freelance gigs in order to make a decent living. At least for now, we still have the means to seek justice as workers even though it’s not always as effective as the law makes it sound to be.

This omnibus bill might close not only the chance to deal with any form of injustice in our working environment, but also the chance to better what has always been a defect. Instead of fixing the fundamental problems that have been going on forever in our workforce, it might worsen the situation for Indonesian workers. And that is why this bill is cilaka.