Business sector is one of the several sectors who gets the biggest impact during pandemic, especially in Indonesia. As a result, Indonesia has a possibility to drown into recession based on the data of the Central Bureau of Statistics (Badan Pusat Statistik) on August 2020 which states that Indonesia’s Gross Domestic Product (GDP) in the second quarter of 2020 was minus 5.32%. The possibility of the recession is most likely because of the discontinuance operation of several business sectors which result a financial crisis for them. However, there are several alternatives for companies to saves their performance during pandemic without terminating their employees s, including:
1. Resolve
Resolve means dealing the pandemic inside the companies by encouraging their employees s to participate in implementing COVID-19 protocols.
2. Resilience
To be able to handle the companies during pandemic, they have to push their performance so they can survive. One of which is preparing emergency fund.
3. Return
It means that the companies need to run their activities by considering their important aspects.
4. Re-imagination
Renewing the business strategy based on the new condition.
5. Re-form
In this case, it means to reform the new business model to catch the new business opportunities.
Other than that, the companies need to take a deep look to the area that could be the main focus to get through the crisis. First, they need to pay more attention to their cash management. It means they need to manage their cash flow better during the pandemic. Second, contingency planning. It means that the companies has to ensure the strategy they want to take, will it save the companies for next period or not. Third, shareholder management. It is suggested for the companies to be more proactive and take initiative to actively engage with the tax authority, vendors, and lenders to receive financial support that may be available. Forth, pay attention more towards their employees s. Understanding the employees profile becomes very important in this situation to find various solution inside the companies. Fifth, forming a crisis management team. It really helps the companies during the pandemic as long as the companies keep an eye on the team to make sure the division in the team communicates each other to discus and prioritize the problem that are faced by companies.
If the abovementioned have been done by the companies but still didn’t work, then maybe terminating their employees s could be the only way to safe the companies. So, the question will be “How do companies take the right way to terminate their employees s due to the impact of COVID-19 in accordance with the statutory regulation?”
- Termination of employment based on Force Majeure
Considering the transmission of COVID-19 in Indonesia, the government has declared a non natural disaster status for the spread of COVID-19 as NATIONAL DISASTER through Presidential Decree No. 12/2020. Since it was declared as a national disaster, so it is included as a Force Majeure.
Based on the Presidential Decree above, companies may terminate their employees s due to the impact of COVID-19 as long as they give the severance pay, tenure award money, and reimbursement rights to the employees s. By terminating their employees s based on Force Majeure, the companies must prove several important matters regulated on manpower.
- Termination of employment based on Efficiency
So far, the government has already published several regulation related to COVID-19 that affected on manpower sector such as Presidential Decree No. 11/2020, Presidential Decree No. 12/2020, Circular Letter of Ministry of Manpower, and others.
Such regulations are mainly regulate about companies that are allowed to run their productions during pandemic. However, there are companies who are still dealing with their declining income that ended up with a great loss. Based on such regulations, companies could terminate their employees s during pandemic to make it more efficient as long as the company’s performance was highly-affected by COVID-19 in accordance with Article 164 section (3) on Manpower Law.
Based on abovementioned, companies could take actions towards their employees such as terminating them in accordance with Manpower Law. Terminating the employees is a big actions for the companies, therefore they need to pay more attention on how conduct such termination. Hopefully, the companies could build a better communication so that their employees could accept such decision and make sure the termination is in accordance with the prevailing law and regulations.
These are several things about strategy for companies to survive during pandemic COVID-19. Should there be any questions on what best for your companies, please do not hesitate to contact us furthermore.
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