Indonesian companies, unions waiting for the ruling on labor law at stake | Labor Rights

Medan, Indonesia – Last week, Christopher Panal was calling the phone of Lumban Gaol, a commercial lawyer.

Eagle Law, also a professor of business law at St. Thomas Catholic University in Medan, North Sumatra, has been overwhelmed by questions about the accuracy and implications of the Indonesian Constitutional Court’s controversial ruling on the country’s controversial employment law. .

Although the government has denounced the legislation as a way to attract foreign investment and create jobs, unions and labor activists have criticized its reforms for undermining job security, wages and workers’ rights.

“Of course, there is a lot of confusion about how a law can be considered ‘unconstitutional’ while it is still in effect for the next two years,” Gaol told Al Jazeera.

In its ruling last month, the Constitutional Court found a number of procedural flaws that made the law “unconstitutional” after Indonesian workers’ unions challenged the law. The government has been given two years to rectify the errors, failing which the legislation will be declared definitively invalid.

Following the November 25 ruling, unions and employers have been left wondering what the future holds for the ambiguous outcome.

“We are grateful for the verdict, but we hoped that the law would be completely unconstitutional and repealed. The Constitutional Court has now increased our workload, ”Jumisih, the deputy head of the Indonesian Workers’ Confederation, told Al Jazeera.

“The next two years are going to be very complicated,” Jumisih said, with a single name like many Indonesians. “People have heard that the law will continue to be used, and they have also heard the word ‘unconstitutional’, which makes no sense. We need to strengthen our rights in the future. ”

Anis Hidayah, Migrant CARE, a non-governmental organization based in Jakarta and one of the prosecutors, told Al Jazeera that the verdict showed that it would “hold the government accountable”.

“It’s an important lesson for the government, that you can’t enforce rules in your best interests,” Hidayah said. “The law affects almost every sector of society: women, minorities, fishermen, farmers, factory workers, and we were concerned that the court would protect citizens.”

Hidayah added that the law was not transparent, hasty and did not consult with many stakeholders.

The law, passed in October 2020, was intended to benefit the administration of President Gambodo Widodo by ordering it to attract foreign investors with more flexible working rules, elegant online systems, easy permit applications and fewer bureaucratic hurdles in a country. known for his crazy red ribbon.

“The job creation law was designed as a middle ground between workers and companies,” said Gaol, a commercial lawyer. “There are a lot of investors in Southeast Asia and a small comparative investment in Indonesia.

“Investors today don’t need a special country,” he added. “We are competing to see if it can become a business paradise in the region, especially when it comes to factories relocating from China, and many of them want to relocate to Vietnam rather than Indonesia.”

In July, the Indonesian Ministry of Investment said that between January and June, both domestic and foreign investment amounted to 442.8 trillion Indonesian rupiah ($ 30 billion).

Total investment increased 16.2% in the second quarter of 2021 compared to the same period last year, to 223 trillion Indonesian rupiah ($ 15.4 million), while foreign direct investment rose by almost 20 percent.

In a statement on its website, the ministry praised the legislation for creating “positive feelings for investors to pursue investment activities”.

However, despite his supporters, the legislation has been debated from the beginning Thousands of protesters took to the streets last year. Unions have long been seen as exploitative, anti-human rights and environmentally harmful.

Union leader Jumisih said the legislation exacerbated workers’ problems, such as flexible contracts that did not provide job security, inadequate wages and a lack of maternity leave.

“The government has insulted workers across Indonesia with this law,” he said.

‘More jobs’

On Monday, the Indonesian Workers’ Confederation marched on the palace in the Jakarta presidency with other unions in a show of solidarity after the verdict.

“We can’t do this alone, we have to work with other unions,” Jumish said of plans for the future. “We want everyone to know the ruling of the Constitutional Court. If the law is unconstitutional, it should not be used. “

Gaol said, however, that the ruling was based on procedural rather than material issues, that the law would continue to be developed in the future and would be implemented by companies within a two-year review period.

“In its most basic form, the law is a positive development for Indonesia to expand into the business field,” he said. “We need investment and we need to create more jobs. People should think about that. We need to see how the law flourishes. The law is dynamic, not static. If so, we would be a dictatorship. ”

Gaol said unions were able to file a lawsuit that should be seen as a positive recognition of the Indonesian rule of law and a sign that the legislation has not been deliberately piled up in favor of business interests, a complaint often made by workers and unions.

In order to reassure potential investors, the Minister of Policy, Law and Security Coordination stated that the government will make the necessary revisions as soon as possible.

“It will be faster than two years,” Mahfud said in a statement on Monday. “The Constitutional Court gave him two years. We will try to go faster so that it ends quickly and easily. ”

According to Gaol, any delay could damage Indonesia’s ability to attract investment.

“So investors will be nervous and will probably wait and take the vision to be seen in the next two years,” he said.

“Or they will move their business to another location, which will eventually cost Indonesia.”