Indonesia: Trade Unions Achieve Milestone Victory As Constitutional Court Restricts Controversial Omnibus Law

6 November 2024

This decision marks a significant victory for Indonesian trade unions, which have long criticised the law for undermining workers' rights and weakening labour protections. The petition to the Constitutional Court was filed by the ITUC's affiliates in Indonesia, KSPI and KSPSI.

The court’s ruling declared the law “conditionally unconstitutional” and mandated the government to draft a separate Employment Law. This represents a pivotal step toward implementing , which urged the government to utilise ILO technical assistance without delay, focusing on labour law reform, including changes to the Job Creation Law.

Thousands of workers, led by ITUC affiliates the KSPI, KSBSI and KSPSI, have mobilised for many years to demand revisions to the law.

Key outcomes of the ruling include:

• Limits on foreign workers: Foreign workers can only be employed in specific roles for limited periods, protecting job opportunities for Indonesian nationals.
• Contract and outsourcing restrictions: Contract work durations are capped at five years, while outsourcing agreements must specify roles and responsibilities in alignment with worker protections.
• Minimum wage and living standards: The ruling mandates regional wage councils to set minimum wage standards, ensuring they reflect local living costs and economic conditions.
• Enhanced wage structure: Companies are required to develop structured wage scales that consider the experience and qualifications of employees.
• Strengthened job security: In cases of company bankruptcy, workers' severance payments will be prioritised over creditors, protecting their financial security.

ITUC General Secretary Luc Triangle welcomed the court’s decision, stating: “This ruling reflects the power of collective action. Indonesian workers, supported by their unions and international allies, have taken a significant step toward a fairer and more just employment landscape. The ITUC stands with them as they continue to defend these hard-won rights. The ruling sends a powerful message in favour of democracy and labour rights.”

In 2021, the Constitutional Court ruled that the Job Creation law was formally defective and declared it conditionally unconstitutional. The court ordered the legislature to revise the law within two years of that ruling.

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