On 15 March 2024, the Ministry of Manpower issued Circular Letter No. M/2/HK.04/III/2024 on the implementation of THR (tunjangan hari raya) or religious holiday allowance for 2024 (“Circular”). In general, the contents of this Circular do not contain anything new or contrary to Minister of Manpower Regulation No. 6 of 2018 on Religious Holiday Allowances for Workers in Companies and other prevailing laws and regulations related to labour.
Nonetheless, shortly thereafter, on Monday 18 March 2024, the Minister of Manpower held a press conference to formally announce the Circular. During the press conference, an officer of the Ministry of Manpower stated that:
“Online ride-hailing drivers are included in those we encourage to be paid. Even though their working relationship is a partnership, they are categorised under the category of fixed-term employment agreement (perjanjian kerja waktu tertentu or “PKWT”) workers. So, they are covered by this Circular.”
The officer’s statement immediately garnered widespread public response in the news and raised concerns about legal uncertainty regarding THR for online ride hailing and logistic partners.
Unfortunately, the statement was made by the officer without a detailed reference to the provisions or points in the Circular. Therefore, based on the principle of legality (which states that any kind of government action must have a legal basis) and the Circular, there is no mandate for partnership-based online ride-hailing application companies to provide THR. This is also in line with previous court decisions.
For more information, click here to read the full Legal Update.
