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High-level Indonesian court declares new labor law unconstitutional

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JAKARTA, Indonesia (AP) Indonesia’s highest court ruled Thursday that the widely criticized job creation law was unconstitutional and ordered the government to amend it within two years.

The law, passed last year, sparked days of protests in many cities that turned violent as thousands of enraged students and workers accused it would cripple labor rights and harm the environment .

The law amended 77 previous laws and aimed to improve bureaucratic efficiency as part of the efforts of President Joko Widodos’ administration to attract more investment.


The Constitutional Court voted 5-4 in favor of the applicants, an employee of a private company, four students and the Confederation of Indonesian Workers’ Unions, known as KSPI, which argued that the way in which the legislation was processed was tainted with procedural flaws.

The court agreed, saying the process was not fully transparent and it was not clear whether the merging of previous laws constituted a review or the creation of a new law.

The court said the law will remain in effect until revisions are made within two years and ordered the suspension of any large-scale strategic action or the issuance of new regulations related to the law.

Chief Justice Anwar Usman said that if the changes are not made within two years, the legislation will be considered permanently unconstitutional and any laws or articles that have already been repealed or amended by the Job Creation Act must be revived.

KSPI President Said Iqbal welcomed the decision and said his party was ready to participate in revising the law to ensure it does not undermine basic workers’ rights.

He said the current law hurts workers by reducing severance pay, removing restrictions on manual labor for foreign workers, increasing the use of outsourcing and converting monthly wages to hourly wages.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the government respects the decision of the Constitutional Court.

The government will immediately follow through on the courts’ decision by preparing for the amendment of the law and enforcing the other court orders to the best of our ability, he told a news conference.

Indonesia, Southeast Asia’s largest economy, is eagerly courting foreign investment as a key driver of economic growth in a country where nearly half of the population of 270 million has less. 30 years old.

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