Top Indonesian Court Rejects Labour Reform Law

Indonesia’s Constitutional Court ordered the government on Thursday to amend parts of a new job creation law within two years, citing procedural flaws in how the controversial legislation was handled.

The law, which was passed last year and saw the revision of more than 70 existing laws, sparked protests across Indonesia and complaints that it undermined labour rights and environmental safeguards.

Ruling in a judicial review sought by unions, chief judge Anwar Usman said if changes were not made in two years, the legislation would be deemed “permanently unconstitutional”.

The ruling described the way the legislation was handled as procedurally flawed and in some parts, unconstitutional, including changes made after parliamentary approval.

Unions complained about the creation of new rules on severance pay, contract labour and outsourcing, as well as a stipulation that environmental studies only be required for high-risk investments.

Said Iqbal, chief of the Indonesian confederation of trade unions (KSPI), said workers “highly appreciate” the court, adding “we believe there’s justice to be had.”

‘Very Bold’ Ruling

Airlangga Hartarto, coordinating minister for economic affairs, said the government respected the ruling.

“The government will immediately follow up the court’s ruling by preparing for the law revision and carry out as best as we can the court’s instructions,” he told a news conference.

KSPI lawyer, Said Salahudin, said the whole process of drafting the law should be restarted. “This isn’t a normal ruling, it was very bold for the Constitutional Court to do this,” he said.

While the judges acknowledged the rationale behind some of the government’s actions in pushing through a law designed to attract investment and create jobs, the ruling said proper processes should have been followed.

“It doesn’t mean that reaching those goals then could set aside the ways or formal procedures that are in effect,” it said.