Indonesian Trade Unions Confederation pledge to mobilize thousands of people around the country next week - Photo: Privacy.

JAKARTA (TheInsiderStories) – Indonesian Trade Unions Confederation pledge to mobilize thousands of people around the country next week to reject the government’ plan to revise the labor law and health insurance, which they say are discriminatory and eliminate protection of workers’ basic rights.

Unions President Said Iqbal revealed the rally would be carried out on Jan 20, coinciding with the opening of the plenary session of the Indonesian parliament this year. Whereas in other provinces, the protest will be centered at each regional House office.

“In Jakarta, the rallies will be joined by 30 thousand workers. While in each province, the protest will involve thousands of workers,” Iqbal said in a written statement on Thursday (01/09), adding the rallies will simultaneously hold in West Java, Banten, Central Java, East Java, Lampung, North Sumatra, Bengkulu, North Sumatra, Riau, Aceh, Kalimantan, West Sulawesi, Gorontalo, North Sulawesi, Maluku, and several provinces.

The protest was held in response to the government’s plan to submit a revised labor law, as part of the omnibus law, scheduled for submission to parliament this month to replace dozens of overlapping measures in a bid to improve the investment climate and create jobs in Southeast Asia’ biggest economy.

President Joko Widodo has urged the House of Representatives to finish discussing the draft omnibus laws in three months. However, the revision could be a difficult parliamentary debate of a politically sensitive bill, despite Widodo’s coalition controlling 74 percent of the seats.

Revising the 2003 Labour law is top of the list that foreign investors hope Widodo will tackle in his second term in office. The current law includes some of the most generous severance pay rules in the world that investors say deters formal hiring and affects investment decisions in the country.

Coordinating Minister of Economic Affairs Airlanggra Hartato told reporters on Wednesday the main points of the revise in labor rules, have been completed. The bill is currently awaiting legal drafting and will be submitted to parliament next week.

The labor bill substance includes 11 clusters such as simplification of licensing, investment requirements, employment, ease, empowerment and protection of medium and small-medium enterprises, business easiness, research support and innovation, government administration, the imposition of sanctions, land procurement, government investment and projects, and economic zones.

“We have discussed the substance of these 11 clusters intensively with 31 related ministries and institutions,” he said, adding so far 82 laws and 1,194 articles have been identified that will be harmonized through the labor omnibus law. He said one law could be included in several clusters, so the number of laws was not the total sum of all clusters.

The bill would try to ease the restrictive rules used under the 2003 Labour Law to recruit or lay off employees, Hartarto said. The existing labor law includes some of the most generous severance pay rules in the world that investors have cited as a hindrance to formally hire staff.

Every year, a significant number of new people join a labor force that currently has around 110 million people, but rules now give “a huge advantage for those who are already employed”, the minister said.

The law would aim to create the “same opportunity” for everyone in the labor market to get a job, while companies would also be incentivized to upgrade labor skills, he said.

However, the unions opined, in substance, the omnibus law tends to disadvantage the workers, also questioned the government for not including labor groups during the drafting of the bill.

“We believe omnibus law will not increase investment. It will reduce the level of workers’ welfare. The law will push us toward the cliff of poverty and our children and grandchildren will be impacted,” Iqbal said.

He predicted the bill would significantly cut severance compensation, trigger a massive move toward outsourcing and eliminate the protection of basic rights, the entry of unskilled foreign workers, the loss of social security, and the elimination of criminal sanctions for employers who did not provide labor’s rights.

Iqbal also said workers refused to increase health insurance contributions, especially third class, which was considered to reduce the purchasing power of the community, especially laborers.

The contributions will be increased starting this month. First-class contributions will increase from Rp80,000 (US$5.71) to Rp160,000 per month, second class raise from Rp51,000 to Rp110,000 per month. And the third class is planned to increase from Rp25,500 to Rp42,000 per month.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com