TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Analysis: Constitutional Court calls for new labor law
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Members of labor organizations protest against the government’s decision to increase subsidized fuel prices, outside the House of Representatives building in Jakarta on Sept. 6, 2022. (Reuters/Ajeng Dinar Ulfiana)
I
n a landmark ruling, the Constitutional Court has instructed lawmakers to draft a new manpower law, striking down 21 articles in the contentious Job Creation Law that aimed to replace it. This decision underscores persistent challenges and legislative inconsistencies within the omnibus law, which was designed to revise over 70 laws.
While the Manpower Law is only one aspect, the court’s ruling exposes deeper, systemic issues in the Jobs Creation Law’s approach to regulatory reform.
The Constitutional Court partially granted petitions for judicial review against Law No. 6/2023, which stipulates Government Regulation in Lieu of Law (Perppu) No. 2/2022 on Job Creation, filed by the Labor Party and several unions.
The court addressed seven key issues raised by the petitioners, including foreign worker hiring, contract work (PKWT), outsourcing, leave, layoff procedures and salaries. It capped the duration of PKWT contracts, including extensions, to five years, rather than allowing indefinite terms.
The court also ruled that the law must provide for a two-day weekly rest break, nullifying the provision that allowed only one day off. Additionally, a provision allowing foreign workers in certain positions was amended to prioritize local recruitment, and layoff procedures were clarified, requiring industrial relations court approval in contested cases.
Constitutional Court Justice Enny Nurbaningsih outlined three critical points. First, she noted that the material and substance of the Manpower Law have been repeatedly challenged for judicial review. According to the court’s records, elements of the Manpower Law have been judicially reviewed 37 times.
Of the 36 motions adjudicated by the court, 12 petitions were at least partially granted, highlighting inconsistencies in the 2003 law, even before it was amended by the Job Creation Law. The court had previously ruled several provisions as unconstitutional or conditionally unconstitutional, rendering them legally non-binding. This created confusion for the public, especially workers, about which regulations were in effect and increased the risk of contradictions between the two laws.
