Indonesia’s Supreme Court ruled that the new work law is unconstitutional

The Indonesian Supreme Court ruled that the country’s widely criticized Employment Creation Law was unconstitutional and ordered the government to amend it within two years

JAKARTA, Indonesia – The Supreme Court of Indonesia ruled on Thursday that the country’s widely criticized Employment Creation Act was unconstitutional and ordered the government to amend it within two years.

The bill amended 77 previous laws and aimed to improve bureaucratic efficiency as part of the efforts of President Joko Widodo’s government to attract more investment.

The Constitutional Court voted 5 to 4 in favor of the petitioners—a private company employee, four students, and the Indonesian Workers’ Union Confederation, KSPI—that they felt were procedural flaws in the way the legislation was handled.

The court agreed, stating that the process was not completely transparent and it was not clear whether the merger of previous laws would constitute revision or enactment of new laws.

The court stated that the law will remain in effect until it is revised within two years, and ordered the suspension of any broad strategic actions or the issuance of new regulations related to the law.

Chief Justice Anwar Usman said that if the legislation is not amended within two years, the legislation will be considered “permanent unconstitutional” and “laws or provisions that have been revoked or changed by the Employment Creation Act must be recover.”

KSPI chairman Said Iqbal welcomed the ruling and stated that his party is prepared to participate in amending the law to ensure that it does not reduce workers’ basic rights.

He said that current laws harm workers by reducing severance pay, removing restrictions on foreign workers’ manual labor, increasing the use of outsourcing, and converting monthly wages to hourly wages.

The Minister of Economic Affairs Airlangga Hartarto stated that the government respects the decision of the Constitutional Court.

He said at the press conference: “The government will immediately follow up the court’s ruling, prepare for legal amendments, and do everything we can to enforce other court orders.”

Indonesia is the largest economy in Southeast Asia. Nearly half of the people in this country with a population of 270 million are under the age of 30. The country is eager to attract foreign investment as the main driver of economic growth.

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