Law on Welfare of Mothers and Children

The Law on Welfare of Mothers and Children sets out the rights of mothers and children, and the organization of the welfare of mothers and children. This law became effective on 2 July 2024, the date of its enactment. The following are some key provisions of the Law on Welfare of Mothers and Children that employers need to know:

1. Maternity leave

Employers must provide the following maternity leave to working mothers, which slightly differs from the maternity leave entitlement under the Labor Law (as further outlined below):

1. The first three months  at a minimum
2. An extension of up to three months if the mother or the child experiences health-related issues, which must be proven by a doctor's certificate

In contrast to the Law on Welfare of Mothers and Children, the Labor Law does not limit the extension period of maternity leave for health-related reasons. Under the Labor Law, the maternity leave period of 1.5 months prior to giving birth and 1.5 months after giving birth can be extended based on a doctor's certificate.

Salary during maternity leave

Salary payment during maternity leave is as follows:

1. 100% for the first three months
2. 100% for the fourth month
3. 75% for the fifth and sixth months

The Labor Law does not address the possibility of reducing the salary amount during the extended maternity leave period. Instead, the Labor Law requires every employer to pay the employee in full throughout the maternity leave, including any extension period.

It remains to be seen how the Ministry of Employment will address the inconsistency between the provisions of the Labor Law and the Law on Welfare of Mothers and Children on maternity leave entitlement.

2. Paternity Leave

The Labor Law stipulates that male workers are entitled to two days paid paternity leave to attend the childbirth or if their wife has a miscarriage.

Under the Law on Mothers and Children, working fathers are entitled to paternity leave as follows:

1. Childbirth period, two days, with a possible extension up to three additional days after delivery or in accordance with the agreement with the employer
2. If his wife has a miscarriage, two days

The Law on Mothers and Children further states that in addition to the paternity leave mentioned above, working fathers must be given sufficient time to accompany their spouse and/or children for the following reasons:

1. The spouse experiences health-related issues and/or complications.
2. The newborn baby experiences health-related issues and/or complications.
3. The spouse who has given birth passes away.
4. The newborn child passes away.

3. Workplace facilities

Employers are required to provide support in the workplace for working mothers in the form of health service facilities, lactation rooms and daycare centers. Employers also need to adjust the duties, working hours and/or workplace of working mothers while still considering work conditions and work performance targets.

Decision No. 168

On 1 December 2023, a group of petitioners consisting of various worker federations submitted a formal judicial review to the Indonesian Constitutional Court in relation to several articles under Law No. 6 of 2023 on the Enactment of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation.

The Constitutional Court issued Decision No. 168/PUU-XXI/2023 ("Decision 168"), which partially granted the request of the petitioners. We set out below some notable provisions and changes brought about by Decision 168:

1. Wages

Decree 168 addresses the following changes in relation to wages:

• The minimum wage formula, in particular certain indexes, also takes into account the necessities of a decent life.
• Sectoral minimum wages are reinstated.
• The Government may determine a special minimum wage formula in certain circumstances that have been initially determined by the President.
• Wages above the minimum wage can be determined based on an agreement between not only the employer and workers, but also a labor union. The wage structure and scale needs to be proportionately arranged with consideration of class, position, length of service, education and competence.
• The determination of wage policies is no longer unilaterally in the hands of the central government, as regional wage councils are involved in the formulation of wage policies.

2. Use of Foreign Workers

The main concern of the petitioners on this matter is the potential entry of large numbers of unskilled foreign workers into the Indonesian job market. Decision 168 addresses the issue by emphasizing the responsibility of the Ministry of Employment in prioritizing the employment of Indonesian workers.

3. Definite Period Employment Agreement

Decree 168 emphasizes that the period of a definite period employment agreement cannot exceed five years, including if there is an extension. Further, similar to a definite period employment agreement based on a "time period", a definite period employment agreement based on "completion of work" can only be implemented for a maximum of five years. This clarifies the absence of a limitation on the duration of a definite period employment agreement based on "completion of work" in Government Regulation No. 35 of 2021 on Definite Period Employment Agreements, Outsourcing, Work Hours and Rest Hours, and Termination of Employment.

4. Outsourcing

Decree 168 emphasizes that the types and sectors of work that can be outsourced will be determined by the relevant minister.

5. Termination of Employment

Decree 168 provides a more detailed description of the employment termination process as follows:

• If the employee rejects the termination, the termination must be settled through bipartite negotiations in a consensual manner between the employer and the relevant employee and/or labor union.
• If the parties do not reach an agreement during the bipartite negotiations, the termination of employment can only be carried out after obtaining a stipulation from the Industrial Relations Court that has become legally binding.

The impact would be that one could argue any termination of employment would require a court decision that is legally binding.

Take-aways

Employers should ensure that they take appropriate steps to stay compliant. This should include ensuring that their employment documents, including employment agreements, company regulations, collective labor agreements and any relevant policies, are in line with the Law on Welfare of Mothers and Children.

In addition, employers need to revisit their employment practice to ensure that it is in compliance with the changes to the Labor Law brought about by Decision No. 168. This should include establishing clear procedures for termination of employment to comply with the specific changes stipulated in Decision No. 168.

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