Indonesia Parliament Passes Labour Protection Law, Union Group to Monitor Implementation

JAKARTA, STUPA — Indonesia’s parliament on Tuesday passed a Labour Protection Law aimed at strengthening safeguards for workers, with the Indonesian Association of Workers’ Unions (ASPIRASI) highlighting provisions on outsourcing, contract employment and severance pay.

ASPIRASI President Mirah Sumirat said the passage of the law marked an important step in the long-running effort by labour unions to establish a dedicated legal framework for employment protection.

“This is not merely a change in the name of a law, but an important step because labour and employment now have their own dedicated legislation,” Mirah said in a statement on Tuesday.

ASPIRASI said several provisions in the new law were consistent with demands raised by labour unions, although the organisation said it would study the final text before making a comprehensive assessment.

One of the key issues is outsourcing. ASPIRASI welcomed the principle that jobs, rather than workers, should be outsourced, as well as restrictions on the types of work that can be outsourced.

Mirah said the provisions were important to prevent outsourcing from being used to keep workers in employment arrangements that offered little certainty over their status.

“Workers must have clear employment relationships and employment status. Outsourcing should not become a tool to create cheap labour or workers without job security,” she said.

The law also includes provisions to strengthen labour inspections through a Labour Inspection Committee. ASPIRASI said stronger enforcement was needed because labour standards have faced challenges including limited numbers of inspectors, funding and institutional capacity.

Mirah said the effectiveness of the new law would ultimately depend on how it was enforced.

“No matter how good a law is, it will mean little if enforcement is weak,” she said.

ASPIRASI also highlighted provisions on the setting aside of funds for severance payments. The organisation supported the principle that workers’ severance entitlements should be backed by available funds when layoffs occur, but said it was still awaiting details of the mechanism to be set out in implementing regulations.

The union group also welcomed provisions requiring the government to allocate funding for worker training and skills development.

ASPIRASI said such funding was increasingly important as workers and businesses faced changes brought by digitalisation, automation and the growing use of artificial intelligence.

“The state must be present” in financing workers’ skills development amid technological change, Mirah said.

On fixed-term employment contracts, ASPIRASI said limits on contract periods were important to prevent workers from remaining in prolonged uncertainty over their employment status.

The organisation said workers who had spent years performing jobs for the same company should have greater clarity about their employment status and future.

ASPIRASI also raised concerns about apprenticeships. It supports apprenticeships as a means of learning and developing skills, but opposes the use of apprentice status to replace workers performing regular jobs.

“Apprenticeships are a learning process, not a new way of obtaining cheap labour,” Mirah said.

The organisation said, however, that its work would not end with parliament’s approval of the law.

ASPIRASI is awaiting the official final text and plans to conduct a clause-by-clause review, particularly of provisions that require further government regulations, ministerial regulations or other implementing rules.

Mirah urged the government to ensure that implementing regulations do not weaken the protections established under the new law.

“Workers may celebrate today because the law provides protection, but that protection must not be reduced tomorrow through government or ministerial regulations,” she said.

For ASPIRASI, the success of the Labour Protection Law will ultimately be measured not by its passage in parliament but by its impact on workers.

“The measure of its success is whether Indonesian workers actually experience protection, job security, decent wages, social security and a better future,” Mirah said.

ASPIRASI said it would monitor implementation of the law together with other labour unions.

“We celebrate today. Tomorrow, we monitor it. And from there, we continue the struggle,” she said. (Gusti Haes)