On 31 October 2024, Indonesian workers achieved a significant victory as the Constitutional Court partially upheld a judicial review petition regarding Law No. 6 of 2023 on Job Creation, commonly known as the Omnibus Law. The petition, filed by Indonesian trade unions, including ITUC affiliates, Konfederasi Serikat Pekerja Indonesia (KSPI) and Konfederasi Serikat Pekerja Seluruh Indonesia (KSPSI), along with other labour unions and the Labour Party, called for amendments to protect labour rights.
In its landmark decision, the court ruled that the government and legislators develop a new employment law within two years. This law must explicitly exclude the employment cluster from the contentious Job Creation Law. The ruling addresses crucial labour issues surrounding unskilled foreign workers, fixed-term contracts, outsourcing, leave entitlements, wages, layoffs, and severance pay.
Since its introduction, the Job Creation Law has faced widespread opposition from Indonesian workers, primarily because it promotes labour flexibility at the cost of fundamental workers’ rights. Key concerns raised by trade unions include the elimination of sectoral and regional minimum wages, potential wage reductions, increased precarious work through outsourcing, and the weakened standards for fixed-term contracts. The law also allows for non-payment of wages for women on maternity leave, enables exploitative working hours, and simplifies the process for dismissals without negotiation.
"The court’s decision is a historic win for Indonesian workers, as it aligns with the International Labour Organization’s (ILO) Committee on the Application of Standards (CAS) conclusions in 2023 regarding the application of Convention No. 98 by Indonesia,” Shoya Yoshida, General Secretary of ITUC-Asia Pacific said.
It can be recalled that the ILO’s CAS urged the Indonesian government to seek the technical assistance of the ILO for comprehensive labour law reform to ensure compliance with international labour standards.
“The ITUC-Asia Pacific will continue its unwavering commitment to supporting Indonesian workers and their affiliates in their ongoing struggles to advocate for a new labour law that prioritises workers’ rights and ensures better protections for all Indonesian workers,” Shoya Yoshida declared.
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