Judicial Review Summary – ALTA Insight
The Job Creation Law was intended to create job opportunities for the Indonesian populace. This includes several significant amendments to the original Employment Law, i.e. Law No. 13 of 2003. However, the Constitutional Court (Mahkamah Konstitusi) of the Republic of Indonesia has decided that these significant amendments have caused more harm than good for employees and did not accommodate for constitutional rights of citizens of Indonesia pursuant to the 1945 Constitution of the Republic of Indonesia.
The Constitutional Court pursuant to its Decision No. 168/PUU/XXI/2023 (“MK Decision 168/2023”) had partially granted the petitioner’s claims, particularly on the issues of: (a) prioritisation of local talent, (b) fixed-term employment agreement, (c) outsourcing arrangement, (d) wages, (e) mandatory rest days, (f) termination of employment, and (g) severance payment.
The MK Decision 168/2023 has given the instruction to the legislators to not only amend, but issue a completely new employment law, considering that its current form has gone through multiple judicial reviews and amendments. In the meantime, companies and employers shall ensure that its employment and human resources policies have complied with the amendments to the Employment Law under the MK Decision 168/2023.
Read more about the MK Decision 168/2023 here and stay connected for upcoming ALTA Insight