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Summary

The Constitutional Court of Indonesia recently mandated the President and the House of Representatives to form a new labor law, following a ruling on October 31. This includes revising the controversial Omnibus Law on Job Creation and reinstating key provisions from the 2003 labor law. Major changes include stricter regulations on foreign workers, minimum wages, severance pay, and outsourcing. The ruling also emphasizes worker protection, reinstates sectoral minimum wages, and introduces specific regulations on contracts and leave. A two-year deadline has been set for the creation of a comprehensive labor law that addresses these issues.

Takeaways

• 😀 The Constitutional Court ordered the creation of a new labor law by the Indonesian Parliament and President.
• 😀 The Constitutional Court also directed the removal of the labor cluster from the Omnibus Law Number 6 of 2023 on Job Creation.
• 😀 A two-year timeline was given for the drafting of the new labor law that incorporates elements of Law No. 13 of 2003 on labor.
• 😀 21 articles of the Omnibus Law were amended by the Constitutional Court's ruling.
• 😀 The first key change involves the regulation of foreign workers, allowing them to be employed in specific positions and for a set duration, with competency requirements.
• 😀 The Constitutional Court emphasized prioritizing the use of Indonesian workers over foreign workers.
• 😀 The second key change concerns wage policies, including the reinstatement of sectoral minimum wages that were removed by the Job Creation Law.
• 😀 The third point deals with severance pay, compensation for rights, and work appreciation payments.
• 😀 The fourth change involves adjustments in the process for terminating employment contracts.
• 😀 Other notable changes include regulations regarding fixed-term contracts (PKWT), outsourcing (contract labor), and the management of employee leave.

Q & A

What positive news did the Constitutional Court announce on Thursday, October 31?

The Constitutional Court ordered the Parliament (DPR) and the President to create a new labor law. Additionally, the Court instructed them to remove the labor sector from the Omnibus Law No. 6 of 2023 concerning Job Creation.

What is the deadline for the formation of the new labor law?

The Constitutional Court gave the lawmakers two years to create the new labor law.

Which previous labor law should the new law reflect?

The new labor law should incorporate the contents of Law No. 13 of 2003 on labor.

How many articles were amended by the Constitutional Court's ruling?

The ruling resulted in changes to 21 articles of the Omnibus Law No. 6 of 2023.

What are the seven main points highlighted by the Constitutional Court's decision?

The seven main points are: 1. Foreign labor, 2. Wage and minimum wage, 3. Severance pay and work period compensation, 4. Termination of employment, 5. Fixed-term employment agreements (PKWT), 6. Outsourcing, and 7. Leave regulations.

How does the Constitutional Court rule on foreign workers in Indonesia?

Foreign workers can only be employed in specific positions and for a limited time. They must also meet competency requirements for the positions they hold, with priority given to Indonesian workers.

What was the status of the sectoral minimum wage before the ruling?

The sectoral minimum wage had been abolished by the Job Creation Law, but the Constitutional Court revived it.

What does the ruling state about severance pay and compensation?

The ruling mandates the continuation of severance pay, work period compensation, and other related payments for workers.

What changes were made regarding the termination of employment?

The ruling includes provisions on how termination of employment should be regulated, ensuring fairness and protection for workers.

How does the ruling impact fixed-term contracts (PKWT)?

The ruling outlines clear regulations on fixed-term employment contracts (PKWT), including how they should be structured and their duration.

What is the Constitutional Court's stance on outsourcing?

The ruling provides guidelines on outsourcing, ensuring that it is properly regulated to protect the rights of workers.

How does the ruling affect worker leave regulations?

The ruling emphasizes the importance of clear and fair regulations on worker leave, ensuring employees' rights are upheld.