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View all search resultsA much-needed balance
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President Prabowo Subianto (at podium) gestures on May 1 while delivering a speech in front of thousands of workers during Labor Day celebrations at the National Monument (Monas) in Jakarta. (AFP/Bay Ismoyo)
T
he government must recognize that economic growth should not be a choice between protecting workers and giving businesses room to grow; it must accommodate both.
A policy that prioritizes employers at the expense of workers risks producing growth that benefits the wealthy while leaving lower-income people behind. However, policies that lean too heavily toward labor and place an excessive burden on businesses can discourage long-term investment, undermine job creation and ultimately hurt the very workers they are meant to protect.
This tension came into focus as lawmakers passed a new manpower protection bill last week, following a Constitutional Court ruling in 2024 that mandated the enactment of a new manpower law within two years.
Although drafts have been circulating for months, the final text of the bill has yet to be made public. However, early indications suggest that it leans toward workers’ interests.
Said Iqbal, chairman of the Confederation of Indonesian Trade Unions (KSPI) and the Labor Party, said that the new manpower protection bill was “far better” than the previous Job Creation Law. Said said “over 80 percent” of proposals from labor unions had been adopted in the bill, marking “a reversal” from the omnibus law passed under the previous administration, which he said heavily sided with business owners.
According to Said, among the biggest changes from the prevailing law are provisions on outsourcing. Under the new law, outsourcing will be limited to “supporting services” that are not directly connected to a company’s core business, such as security, catering, cleaning and driving; outside of which the company has to recruit workers.
Moreover, an outsourced worker will have an employee status at the outsourcing agency, meaning they must be granted the same rights as any other employee, including minimum wage, severance payment and possible permanent recruitment.
