News ID: 264601
Published: 0220 GMT January 20, 2020

Indonesia unions protest planned labor reform

Indonesia unions protest planned labor reform

Several thousand Indonesian workers held a rally on Monday outside parliament to protest against planned changes to labor laws as part of government reforms aimed at creating jobs and boosting investment in Southeast Asia’s biggest economy.

The so-called “omnibus” bills the government wants parliament to pass aim to replace dozens of overlapping laws seen as obstacles to investment, and to streamline businesses permits and relax labor laws, Reuters reported.

With economic growth having been stuck at about 5% for several years, President Joko Widodo has said the new legislation is vital and wants parliament to pass a job creation bill within 100 days of submission.

“This (the law) will be bad for our kids,” said Suwondo, a 41-year-old pharmaceutical worker who attended the peaceful rally alongside other chanting workers.

Current labor laws, passed in 2003, include some of the most generous severance pay rules in the world. Investors have cited them as a hindrance in hiring staff.

The government has pledged to consult unions, and full details of the draft bill have not yet been released though unions have already slammed it as pro-business.

Ellena Ekarahendy, head of the media and creative workers’ union, said ahead of the protests that the changes could increase the risk of mass firings.

Susiwijono Moegiarso, an official at the Coordinating Ministry of Economic Affairs, said on Friday a new social safety net would be put in place for fired workers so they are paid for six months, alongside existing compensation rules.

According to material on the bill released on Friday, the government will require minimum wages to take into account economic conditions of different regions.

The bill will also simplify permit processes covering 15 sectors including manufacturing, agriculture, energy and mining, as well as environmental permits and construction, the material showed.

The government will remove a “negative investment list” that restricts foreign ownership in some areas, though it will continue to set limits in certain industries, an official said.

David Sumual, chief economist at Indonesia’s Bank Central Asia, said passing the omnibus law was “a litmus test” for President Widodo, who is supported by parties controlling about 75 percent of the seats in parliament.




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