Since the launch of the new unemployment benefits (Jaminan Kehilangan Pekerjaan/JKP) on 2 February 2021, Indonesian journalists have written many articles around the regulation and potential implementation issues. To strengthen their awareness of this new employment protection scheme, the ILO, in collaboration with the Alliance of Independent Journalist (AJI) Jakarta, conducted a media briefing on Tuesday, 9 March 2021.

Attended by 36 journalists from various print and electronic media organizations, the media briefing aimed at providing the journalists with adequate knowledge of social insurance, ILO’s international labour standards and the JKP so that they share accurate information with wider audiences.

During the event, Retna Pratiwi, Director of Social Protection, Ministry of Manpower, delivered a comprehensive presentation on the programme's operationalization and implementation according to Government Regulation No. 37 of 2021 on Implementation of the Job Loss Guarantee Programme. In her presentation, she tried to address issues that were widely discussed regarding the scheme, including eligibility requirements for participants.

"I must emphasize here that every worker, regardless of the contract type, is mandatory to participate in and have a right to receive the benefit from this programme, as long as they are registered as the members of Social Protection Provider for Employment (BPJS Ketenagakerjaan). Therefore, companies' compliance in registering their employees plays an essential role to ensure that every worker can receive the benefit of JKP," Retna clarified.

Benefits of unemployment insurance scheme

Aside from the eligibility criteria, severance pay has been a popular topic to discuss in the media. Responding to this issue, Ippei Tsuruga, ILO’s Technical Officer for Social Protection, pointed out different concepts between unemployment insurance and severance pay. The unemployment insurance benefit aims to provide unemployed workers with a temporary and partial income replacement, while severance pay aims to appreciate workers for long services.

“In terms of protection against unemployment, workers can expect the unemployment insurance fund will definitely pay them as long as they meet qualifying conditions, while the compliance with severance pay often depends on employers’ capacity to pay, especially during a crisis," Ippei explained.

Complementing the explanation given, Christianus Panjaitan, ILO’s National Officer for Social Protection, highlighted that the unemployment benefit scheme should be complemented by active labour market policy (ALMP), in which all unemployed must receive the benefit of job training and access to labour market information.

"One of the qualifying condition to receiving cash benefit in this scheme is a willingness to apply for new jobs. If during the transition period given, in this case six months, the participants do not actively search for jobs or participate in any training provided by public employment service, the government can cut off the benefit," Chris elaborated according to international principles and practices.

ILO Conventions No. 102 on Minimum Standard of Social Protection and No. 168 on Employment Promotion and Protection against Unemployment provide standard of qualifying conditions, contribution mechanism, minimum benefit and other operational details. The JKP policies, according to Ippei, have followed these Conventions to some extent, although some improvements still need to be made, for example on financing arrangement.

"Of course, the government can contribute to the scheme. Yet, the contributions from workers and employers are also important, not only to sustain the scheme and improve adequacy of benefits, but also to strengthen their positions in the policy discussions. By contributing to the scheme, the tripartite stakeholders can raise a voice for the policy reforms that they need," Ippei argued.

Recommendations to improve the JKP

Invited to the event was Dinna Prapto Raharja, founder of Synergy Policy, a consulting firm focusing on public policy development. During her presentation, she appreciated the initiative of the government in developing JKP. "JKP is a progressive policy created by the government to give immediate protection for the unemployed, as well as strengthen national economic by maintaining worker's purchasing power in time of job loss. Even in the more advanced economies, many countries often consider unemployment benefit as additional protection for workers," said Dinna.

However, she emphasized some critical points for consideration. She suggested the government to improve labour inspection as many companies do not yet comply with the regulation. Companies tend to not register their non-permanent workers in the BPJS Ketenagakerjaan scheme and only record the basic salary, not the workers’ take home-pay as required, for their permanent employees.

Similar concern was also raised by the participating journalists. Prisca Triferna, a journalist from the Indonesian News Agency (ANTARA), for example, questioned efforts taken by the government to ensure the companies' compliance to register employees in the BPJS Ketenagakerjaan scheme as a requiring condition to receive JKP benefit.

Responding this issue, Retna admitted that due to the inadequate number of labour inspectors across the country, the government was planning to improve the control system and to evaluate JKP every two years. "We are seeking active collaboration from all stakeholder for the success of this scheme," said Retna.

The Indonesian government has started collecting contribution for this scheme. The participants are expected to receive the benefit in the 12 months’ time with cash benefit amounted to 45 percent of previous earning for the first 3 months and 25 percent for the following 3 months with maximum salary counted of IDR 5 million.

The ILO through its Unemployment Protection in Indonesia: Quality Assistance for Workers affected by Labour Adjustment (UNIQLO) Project, funded by Fast Retailing Co., Ltd., continues to support the implementation and evaluation of JKP. The supports are given by facilitating social dialogues among tripartite stakeholders as well as assisting the preparation for public employment service (PES) in providing job trainings and facilitating the reintegration of the unemployed into labour market.