The shift in the industry driving the economy from the manufacturing sector to the service sector has significant implications for labor, which is increasingly informal and flexible. Academics expect this aspect to be accommodated in the revision of the labor law that the government is working on, in addition to paying attention to the flexibility of the implementation of the law through strengthening the supervisory function and implementing rules that are harmonious and able to protect all workers.
The discussion on the revision of the Manpower Law (UU) is being discussed in the Meeting of the Committee (Panja) on the Revision of the Manpower Law of Commission IX of the House of Representatives. The revision of this law is mandated by the Constitutional Court Decision Number 168/PUU-XII/2023.
In the Panja meeting on the revision of the Manpower Law, Tuesday (18/11/2025), four important aspects were raised as input from labor law academics.
First, the paradigm of labor law reform that needs to pay attention to the transformation of labor force characteristics. Second, the implementation of the new Labor Law needs to be more flexible, by ensuring that the new law is not too broad and technical, and has a set of implementing regulations that are passed simultaneously.
Third, the supervision of labor practices that have a number of loopholes, ranging from specific time work agreements (PKWT), foreign workers, wages, to outsourcing and social security. Fourth, the quality of employment must be improved immediately, along with the influx of a new wave of young workers.
Chairperson of the Association of Indonesian Labor Law Teachers and Practitioners (P3HKI) Agusmidah stated that the expansion of informal jobs ranging fromfreelancers, part-time workers, digital platform workers, to home industry workers has made the structure of formal and subordinate employment relationships in the Manpower Law increasingly lose its relevance.
"Informal workers and platform workers are trapped in positive flexibility because the character of positive law is very rigid and sectoral. In fact, the law must answer the needs of people who not only want employment law, but labor protection law. Working relationships are based on economic reality, not contracts," he said.
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Fitriana, a lecturer in labor law at the Faculty of Law, University of Indonesia, emphasized that the reform paradigm of the Manpower Law is a sign of progress in the history of laws that provide labor protection.
However, Indonesia has yet to take the law to a higher phase, which is to free workers from the fear of losing their jobs and achieve equal, rather than identical, legal standing with employers.
For this reason, Fitriana explained, the expansion of the concept of employment relationship in the Manpower Law is inseparable from legal provisions that need to be more adaptive and dynamic, considering that norm adjustments also need to adjust to the challenges that are still faced today, ranging from the feasibility of working conditions, participation of young workers, and comprehensive social security.
"The scope of work today is very broad, but the Manpower Law only protects workers in formal employment relationships. When everyone who is able to do work, whose protection is regulated is only formal workers, while online motorcycle taxi drivers, remote workers, freelancers, also need social security and protection like other workers," he said.
Implementation in the field
Professor of the Faculty of Law at Gadjah Mada University Ari Hernawan pointed out that Law 13/2003 on Manpower actually has two objectives, namely employment policy and industrial relations policy. Harmonizing the two objectives, according to him, is not very easy and needs special attention.
"We have to see whether the problem lies in regulation, implementation, or enforcement? Perhaps the problem is in the implementation, not the normative rules. The choice is to create a law that is detailed and comprehensive, but not flexible, or simply sort out the most important articles, and the remaining technical rules are sufficient in the implementing rules," Ari said.
The two labor laws that Indonesia currently has, according to Ari, are relatively fat and not flexible, so that the Constitutional Court Decision No. 168, which is very substantial, requests that the implementation of the decision be carried out through ministerial regulations, not laws. For this reason, Ari requested that the revision of the rules not only be related to the law, but also its implementing rules.
"Don't let the law be new, but the implementation rules are still the old ones. In addition to being adaptive, the new law must also be applicable and its impact must be felt by the target groups. Those who are affected must be the most optimally empowered," he said.
Responding to the input of the academics, commission member from F-PKS Gamal Albinsaid admitted that Indonesia is facing serious labor quality problems. Indonesia's economy, he said, grows by relying on and producing low-quality jobs, characterized by unstable work, low wages, and no social security.
"Unemployment aged 15-24 reaches 16.62% or 3.4 times the national average. This marks the failure to convert the Demographic Bonus into productive assets, due to skill mismatches, lack of training, and the implications of the demographic bonus can even become a social burden," said Gamal.
The wage gap, according to Gamal, is one of the reasons why the young labor force tends to migrate to work areas with higher wages, such as from Central Java, which has an average UMP of Rp2,100,000, to Bekasi, West Java, which has an average UMP of up to Rp5,600,000.
To overcome this, Gamal proposed the possibility of implementing a graduated wage scale that differentiates the UMP of new workers from experienced workers and workers with special skills. In addition, the legislator from Dapil V Malang Raya proposed the idea of regulating the obligation of companies to provide training to workers outside the apprenticeship framework.
Commission IX member F-PAN Ashabul Kahfi revealed one of the aspirations of an outsourced worker he met. The worker had been outsourcing for 15 years in a Korean company. When the worker's son was hired for the same job at the company, the difference in their salaries was only Rp20,000. In other words, there is no career progression for outsourced workers.
Closing such loopholes requires the practice of supervision. Singaperbangsa University Faculty of Law Dean Imam Budi Santoso suggests that, before problematic norms trigger implementation problems, he recommends that the House of Representatives start the revision by repealing and replacing problematic norms with new norms that are acceptable to both parties.
"Loopholes in the losses of employers who still have to pay through third parties, workers who wait for years from apprenticeships, PKWT, to permanent workers, to social security need to underlie the completeness of the regulations later. It is difficult, but this is what must really be endeavored," said Imam.
For the sake of legal certainty
Contacted separately, Vice Chairman for Manpower of the Indonesian Chamber of Commerce and Industry (Kadin) Subchan Gatot emphasized that the business world does not expect labor regulations to be too convoluted. Simplicity of rules, according to Subchan, will attract investment that creates jobs and provides legal certainty.
"Issues that become a problem every year such as minimum wage should be agreed upon in principle. Keep in mind, Constitutional Court Decision No. 168/2023 prioritizes consistency, especially in applying the principle of Decent Living Needs (KHL) as the basis for determining wages. Therefore, the formula that is then made must also answer wage disparities, by providing space for dialog," said Subchan.
In order to achieve consistency, Chairman of the Indonesian Employers Association (Apindo) Labor Division Bob Azam emphasized that accommodation of interests needs to be done by conducting proportional comparisons of labor regulations with other countries, especially in the Southeast Asia region. Such a comparison will make the consideration of rules more contextual according to the needs of investors who will compare labor costs.
"Look at labor laws across Southeast Asia, are there any that are as rigid as Indonesia's? They are more flexible and competitive, so investment is easy to enter, and jobs are available. The best protection for workers and job seekers is decent work for them," Bob said.
In addition to regulatory consistency, Agusmidah added that codification of jurisprudence is important, namely integrating jurisprudential norms into the law to prevent judicial review from being carried out too easily. She reminded that after the Job Creation Law was replaced by the Perppu, judicial reviews were still carried out repeatedly, including against Law Number 6 of 2023 on Job Creation.
"Do not let the revised law from the results of the material test be subjected to a material test again. This is important for legal certainty and implementing regulations that can be implemented in the field," he said.
