September 30, 2020


INDONESIA: Labor plans general strike

BY Bob Herrera-Lim

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Labor unions are threatening to hold a general strike from 6-8 October to force parliament to remove the provisions on labor law reforms in the omnibus bill on job creation or to defer its approval. Parliament wants to pass the law by 9 October, before it goes on break.

As recently as the first half of this decade, the threat of a large workers’ strike would have likely derailed the bill, but a similar outcome is not assured today. The unions will try to re-live their successes of 2012-2014, when strikes involving one to three million workers caused the government of President Susilo Bambang Yudhoyono to promise to improve worker pay and limit the use of temporary contracts.

The top two labor unions of the post-Suharto era, the All-Indonesia Trade Union Confederation (KSPSI) and the Confederation of Indonesian Trade Unions (KSPI), have, however, been seeing their membership gradually fragment. Younger members, meanwhile, do not have the memories of their militancy during the Suharto years. Therefore, while unions can still be influential at the local level, their ability to coordinate a national response has become much more limited.

However, this may be their last, best attempt to stop the planned changes, so they are expected to intensify mobilization in the days ahead — even predicting that five million workers will participate in the work stoppage.

The omnibus bill on job creation is the centerpiece of President Joko Widodo’s efforts to attract foreign investment. The draft reportedly contains around 1,200 provisions and affects more than 70 laws; however, the proposed revisions to the country’s rigid labor laws are the most contentious.

Media report that some proposed changes include:

  • A reduction in the maximum severance pay from the current 32 months to 23 months, with the government to make up the difference
  • The removal of mandatory paid leave for family weddings, baptisms, childbirth, bereavement and, for women, menstrual leave
  • A relaxation of the rules on outsourcing
  • The removal of the three-year maximum cap for contractors
  • Daily overtime can be increased from four to three hours

The draft preserves the current minimum wage formula, which increases the amount per year depending on inflation and the rate of economic growth. In its current form, the bill will generate some criticism that it has not gone far enough on the generous severance pay afforded to workers or the removal of the link between wage hikes and inflation, but this may be the price for parliamentarians being willing to see the bill through.

For the unions, their main target is removing the three-year cap, which they say will result in the widespread use of contract labor, because neither the duration nor the type of labor that can be contracted out will have constraints.