Indonesian workers stage rallies over passage of controversial jobs bill

Indonesian workers launched protests in several cities on Tuesday to oppose the passage a day earlier of a controversial new jobs law that the government says is vital to attract investment but critics view as too pro-business.

Parliament passed into law President Joko Widodo’s “omnibus” Job Creation bill late on Monday, revising over 70 existing laws to speed up economic reform and improve the investment climate in Southeast Asia’s largest economy.

Still, parliament voted on the bill earlier than expected and ahead of a national strike due to start on Tuesday that unions expect to involve two million workers.

Workers gather outside of their factory during a strike against a govt. omnibus bill on job creation.

“The law will definitely affect the status of our employment,” Anwar Sanusi, a member of FSPMI trade union in the city of Tangerang west of Jakarta, said by telephone.

Sanusi said the bill would mean outsourced workers and contracted workers remain in place for life, adding that 400 workers on the morning shift had stopped working.

The new law removes the three-year maximum duration of contracts and cuts severance benefits, provisions the government said were intended to promote formal hiring.

Labourers work on an under construction sidewalk in Jakarta.

Nining Elitos, chairwoman of labour group KASBI, said by text message that “tens of thousands of people had stood in front of factories in many places.”

Her claim could not immediately be verified and it was unclear if workers would be able to protest in front of the parliament building in Jakarta, as planned, as police sought to block protesters on the grounds of containing the coronavirus. Usman Hamid of Amnesty International Indonesia said this “catastrophic law...will harm workers’ wallets, job security and their human rights as a whole.”

READ MORE

Indonesia GDP growth misses forecast as investment cools

Domestic airfares rise despite pricing controls in Indonesia

Hundreds arrested after fresh Indonesia legal-reforms protests

But Trimegah Securities economist Fakhrul Fulvian said the passage of the bill helped local markets with Jakarta’s main stock index up as much as 1.31% and the rupiah by as much as 1.28%.

He said banks and export-oriented industries should benefit, while consumer and retail sectors may be pressured as workers may increase savings to compensate for changes in labour rules.

Reuters