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Labor, business tense up over minimum wages, court ruling
The aftermath of a recent Constitutional Court ruling has brought to the fore uneasy industrial relations in the country.
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Workers stage a protest in front of the House of Representatives compound in Senayan, Central Jakarta, on Aug. 25, 2020. (Antara/Aditya Pradana Putra)
W
ithin hours of a shock Constitutional Court (MK) ruling on the Job Creation Law on Thursday, business groups and a labor association gave press conferences to offer starkly contrasting views on what the case means for employment regulations in the country.
The Indonesian Employers Association (Apindo) insisted labor provisions in the Job Creation Law remain unchanged, along with the new formula for determining minimum wages, arguing that the court ruling pertained merely to the process of the omnibus law’s creation, not to its substance.
Meanwhile, the Confederation of Indonesian Trade Unions (KSPI) and other labor groups contend that a flawed deliberation renders unconstitutional the entire law with all of its stipulations – including provisions used as the basis for determining 2022 minimum wages.
The labor groups have warned that further strike action was imminent should their demands be ignored.
“In the field, we are worried that there will be movements by workers saying that [labor provisions] must be reverted [to the preceding regulations], which is not in line with the Constitutional Court’s decision. In our view, this is very worrying,” Apindo chairman Hariyadi Sukamdani told reporters on Friday.
The Job Creation Law is a cornerstone of the government's declared agenda to make Indonesia more attractive for investment and spur GDP growth.
The law has been generally welcomed by business associations, which were also involved in its deliberation, but vehemently criticized by labor groups and activists, who see it as rolling back many provisions to the detriment of workers and the environment.
