Indonesian firms in the waiting game after job law ruling

Indonesia – constitutional court earlier ordered the government to amend the Job Creation Law within two years for Indonesian citizens. In its ruling last month, the Constitutional Court found a number of procedural faults that rendered the legislation “unconstitutional” after the law was challenged by Indonesian labour unions. Subsequently, the court ordered the government to fix the faults. The court also said if the job creation law will not be amended then the original provisions of the Manpower Act 2003 will be restored.

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Indonesia’s constitutional court ruling

Subsequently, the government praised the legislation as a way to entice foreign investment and create jobs. However, labour activists have criticized its reforms for undermining job security, wages, and workers’ rights. After the ruling of the constitutional court, firms and business owners have been left wondering about their future. Jumisih, the deputy head of the Indonesia United Workers’ Confederation said that they appreciate the ruling, but they hoped that the law would be deemed completely unconstitutional. He further said that the Constitutional Court has added workload to them. He also said, “We need to consolidate in the future to stand up for our rights.” Commercial lawyer Christopher Panal Lumban Gaol said, “Naturally, there is much confusion about how a law can have been deemed ‘unconstitutional’ while also still applying for the next two years.” Gaol further said that the jobs creation law was designed as a good middle ground between workers and businesses. However, Anis Hidayah, the co-founder of Migrant CARE, a Jakarta-based NGO said that the ruling showed the government can also be held accountable. Hidayah further said that the law was not transparent, rushed, and had not undergone consultation with a wide range of stakeholders.