Opponents say the new law allows contractors to remain in place for life and weakens environmental protections.
Indonesian workers have launched protests in several cities to oppose the passage 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 more than 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.
“The law will definitely affect the status of our employment,” Anwar Sanusi, a member of the 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.
‘Ruinous false choice’
Critics also said the move reduces environmental protections.
Environmental campaign group Mighty Earth said: “Elements of the new law will worsen deforestation and land rights abuses and reverse recent successes in reducing forest loss.”
“The Indonesian parliament made a ruinous false choice between environmental sustainability and economic growth by effectively legitimising uncontrolled deforestation as an engine for a so-called pro-investment job creation policy,” Phelim Kine, senior campaigns director with Mighty Earth said in a statement sent to Al Jazeera.
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.”
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 percent and the rupiah by as much as 1.28 percent against the US dollar.
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.