Apindo Prepares 12 Guidelines for Layoffs: 'Because Layoffs Are a Normal Thing'

The Indonesian Employers’ Association (Apindo) is finalising the preparation of 12 strategic guidelines aimed at employers and workers as a mitigation effort for layoffs (PHK). This step is taken to create clear standard procedures in facing challenging economic dynamics. Deputy Chairman for Employment of the Apindo National Leadership Board (DPN), Darwoto, stated that these guidelines are designed to provide protection and a sense of security for both parties involved in industrial relations. “We are preparing how to anticipate the mitigation of possible layoffs,” Darwoto said in Jakarta, Tuesday (23/6). Darwoto explained that layoffs should be the last resort. In the 12 guidelines being drafted, there are a number of crucial stages that companies must go through before deciding to dismiss employees. These conditions include objective indicators such as a significant decline in orders. According to Darwoto, employers are only permitted to make layoff decisions if all conditions in the guidelines have been met and the company is deemed no longer financially salvageable. “Now, from a business perspective, layoffs are actually a normal thing,” Darwoto said. Besides serving as an internal guide for business actors, Apindo hopes these guidelines can become a reference for the government in providing intervention. When the indicators in the guidelines are met, it is hoped the government can promptly channel stimulus to help companies weather the crisis period. “When the level or guidelines have been fulfilled, it is hoped the government can assist companies through stimulus when a crisis occurs,” he added. These guidelines are expected to minimise the social impact of layoffs. Although in the business world layoffs are often considered a logical consequence, Apindo emphasises the importance of a transparent and measurable process to maintain the stability of the investment climate and worker welfare. As of now, the guidelines are still in the finalisation stage by the Apindo DPN before being widely disseminated to its members throughout Indonesia.