Indonesian companies and labor unions wait for games after employment law rulings | Labor Rights

Medan, Indonesia—— In the past week, the phone of business lawyer Christopher Panal Lumban Gaol has been ringing nonstop.

The legal eagle is also a lecturer in commercial law at St. Thomas Catholic University in Medan, North Sumatra. He asked extensively about the details and impact of the confusing decision by the Indonesian Constitutional Court on the country’s disputed employment creation law. .

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

“Of course, there is a lot of confusion about how to treat a law as’unconstitutional’ while still applying the law for the next two years,” Gaol told Al Jazeera.

In the ruling last month, the Constitutional Court found some procedural errors that made the legislation “unconstitutional” after being challenged by Indonesian labor unions. The government has two years to fix the error, otherwise, the legislation will be deemed to be permanently invalid.

After the November 25 ruling, unions and business owners have been wondering what the future might look like given the ambiguous results.

“We are grateful for this ruling, but we had hoped that the law would be considered completely unconstitutional and cancelled. The Constitutional Court has now increased our workload,” Jumisih, vice chairman of the Indonesian United Workers’ Federation, told Al Jazeera.

“The next two years will be very complicated,” said Jumisih, who has only one name like many Indonesians. “People have heard that the law will continue to be used, and they have also heard of the word’unconstitutional’, which is meaningless. We need to unite in the future to protect our rights.”

Anis Hidayah, co-founder of Migrant CARE, a Jakarta-based non-governmental organization, was one of the plaintiffs for the legal challenge. He told Al Jazeera that the ruling indicated that the government “can and will be held accountable”.

“This is an important lesson for the government. You can’t force laws to pass for your own benefit,” Hidayah said. “The law affects almost all sectors of society: women, ethnic minorities, fishermen, farmers, factory workers, and we worry that the court will not support the public.”

Hidayah added that the law is opaque, hasty, and there is no consultation with a wide range of stakeholders.

Indonesian President Joko’Jokowi’ Widodo attempts to attract foreign investment by reducing red tape
[File: Willy Kurniawan/ Reuters]

The law was passed in October 2020 and aims to bring good news to President Joko’s government, promising to attract foreign investors through more flexible labor rules, a smooth online system, simple permit applications and fewer bureaucratic obstacles Known for its maddening red tape.

“The employment creation law is designed to be a good middle ground between workers and companies,” said commercial lawyer Gore. “There are a lot of investors in Southeast Asia, and relatively little investment in Indonesia.

“Investors don’t need any country now,” he added. “We are competing to see which country can become a business paradise in the region, especially in terms of factories relocating from China, many of which choose to relocate to Vietnam instead of Indonesia.”

In July, the Indonesian Ministry of Investment stated that the total domestic and foreign investment from January to June was IDR 442.8 trillion (US$30 billion).

Compared with the same period last year, total investment in the second quarter of 2021 increased by 16.2%, reaching IDR 223 trillion (US$15.4 billion), and foreign direct investment increased by nearly 20%.

In a statement on its website, the ministry praised the legislation for “creating positive sentiment for investors to keep their investment activities progressing”.

However, despite its supporters, the legislation was controversial from the beginning. Thousands of protesters took to the streets after it was passed last yearThe trade union has long believed that the law is exploitative, violates human rights, and damages the environment.

Union leader Jumisih said the legislation exacerbated problems faced by workers, such as overly flexible contracts that do not provide job security, insufficient wages and no maternity leave.

“The government used this law to insult workers across Indonesia,” she said.

‘More work’

On Monday, the Indonesian United Workers’ Federation and other unions went to the Presidential Palace in Jakarta to show solidarity.

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

However, the prison stated that since the ruling is based on procedural issues rather than substantive issues, the law will continue to develop in the future and be enforced by companies within a two-year revision period.

“In its most basic form, the law is a positive development of Indonesia’s expansion in the commercial sector,” he said. “We need to invest, we need to create more jobs. People should think about it. We need to see how the law flourishes. The law is dynamic, not static. If so, we will be a dictatorial government. “

Gaol stated that the fact that unions can initiate legal challenges should be seen as a positive endorsement of the rule of law in Indonesia, and that the legislation is not deliberately stacked for commercial gain-workers and unions often make this accusation.

In order to assure potential investors, Mahafud, Minister of Political, Legal and Security Affairs Coordination, stated that the government will make necessary changes as soon as possible.

“This will be faster than two years,” Mahfoud said in a statement on Monday. “The Constitutional Court gave it two years. We will work hard to speed things up so that it can be completed quickly and easily.”

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

“Investors will naturally feel nervous and are likely to adopt a wait-and-see attitude in the next two years,” he said.

“Or they will move their business to other places, which will eventually cost Indonesia.”

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