Indonesia’s House of Representatives passed the Labor Protection Law during a plenary session on Tuesday, October 6, 2026. The legislation, which addresses normative rights, severance rules, and occupational safety, emerged from a drafting process that ran from September 14 to October 4, 2026, following a Constitutional Court ruling, bbc.com reported.
Parliament passes Labor Protection Law after rapid drafting
The Panja (Working Committee) on the Labor Protection Law, led by Deputy Chair of Commission IX Putih Sari, finalized the text after less than a month of active committee work. During the parliamentary session on October 6, the law was passed.
Minister of Manpower Yassierli stated that the law unifies previously scattered norms to establish a more equitable labor protection framework. Pro-labor factions outside the legislature expressed dissatisfaction with the pace. Jumisih, from the Confederation of Indonesian Trade Unions (KPBI), told bbc.com that union representatives were not involved in the discussion process despite the DPR appearing participative, leaving them without knowledge of the specific wording and articles before the final vote.
New law alters severance pay and worker protections
The new law introduces structural changes to compensation, workplace safety, and job security. Ministry officials outlined major adjustments to worker protections, notably altering how termination payments are calculated. CNBC Indonesia reported that the legislation removes the 0.5 multiplier for severance pay during layoffs, establishing a minimum one-time multiplier based on tenure and removing loopholes that previously allowed companies to execute layoffs easily under efficiency pretexts.
Additional protections enshrined in the law include mandatory integration of central and regional labor data, formal oversight committees, and structured severance reserve funds designed to protect employees when companies face insolvency. Minister Yassierli noted that the statute also standardizes occupational safety and health (K3) as a fundamental worker right, as reported by bbc.com.
Labor organizations react to new legislative package
While some labor organizations welcomed the legislative package, others condemned the lack of transparency surrounding its final text. Andi Gani Nena Wea, President of the Confederation of All-Indonesian Workers Unions (KSPSI), praised the statute outside the parliamentary complex, calling it a historic victory secured under President Prabowo Subianto. Following demonstrations at the House of Representatives, Chief of Staff of the Presidency General Listyo Sigit Prabowo met with union representatives at Bina Graha to receive formal feedback, while National Police Chief General Suyudi Ario Seto deployed over 11,000 personnel to secure the demonstrations, according to Tribrata News.
In contrast, KPBI leaders criticized the formulation of individual articles. Jumisih told bbc.com that union officials were not involved in the discussion process, raising concerns about potential extensions to weekly working hours and the enforcement capacity of labor inspectors.
Companies get one year to adapt to law
The newly enacted Labor Protection Law carries a one-year transition period before its provisions take full legal effect across enterprises nationwide. Ministry of Manpower Director General of Industrial Relations and Social Security Indah Anggoro Putri confirmed that the phased enforcement window gives companies twelve months to adapt, according to CNBC Indonesia.
Frequently Asked Questions About the Labor Protection Law
When does the Labor Protection Law officially take effect?
The law was passed on October 6, 2026, but includes a one-year transition period for full implementation by employers and government agencies, as reported by CNBC Indonesia.
What changes were made to employee severance pay?
According to CNBC Indonesia, the statute removes the 0.5 severance multiplier previously applied during efficiency-based layoffs, setting a mandatory minimum multiplier of one time the standard calculation based on worker tenure.
How did labor unions respond to the legislation?
Reactions were divided. KSPSI leaders praised the law as a historic victory for workers, while KPBI representatives expressed frustration over drafting sessions that excluded unions from reviewing text before the plenary vote, bbc.com reported.
What government bodies oversee the new labor regulations?
The Ministry of Manpower oversees enforcement alongside a newly formed Labor Supervisory Committee, with competence certifications managed by the National Professional Certification Agency (BNSP).