Temporary Employment Agreement in Job Creation Law Challenged
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Leonardo Siahaan conveying the petition’s subject matter at the panel preliminary hearing of the material judicial review of Law No. 2 of 2022 on Job Creation, Tuesday (6/20/2023). Photo by Humas MK/Ifa.


JAKARTA (MKRI) — The Constitutional Court (MK) held a preliminary hearing for the judicial review of Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation into Law on Tuesday, June 20, 2023. The case No. 61/PUU-XXI/2023 was filed by Leonardo Siahaan, an employee.

The Petitioner challenges Article 56 paragraph (3) of the Job Creation Law, which reads, “The term or completion of a certain job as referred to in paragraph (2) shall be determined based on an employment agreement.”

Before the panel chaired by Constitutional Justice M. Guntur Hamzah, the Petitioner argued that for anyone in productive age, despite not having been employed, they would potentially work. “[I] realized that the enactment of Article 56 paragraph (3) of the Job Creation Law [has led to] the extension of temporary employment agreements (PKWT), which clearly has not fixed term and number of extension time. With PKWT having no time limit and clear number of times it is extended, there will be exploitation of workers. [Such exploitation] is very vulnerable considering that the worker is a weak party, a very vulnerable party and the employer is powerful. So, when employers see the a quo article, employers will think they can extend the PKWT contract for more than 10 years and even more than 2 times. In fact, if we look at the old Manpower Law, it is very clear that the maximum term for a PKWT is 3 years and can be extended only once. However, Article 56 paragraph (3) of [the Job Creation Law stipulates] that it does not have a time limit and there is no provision on how many times PKWT can be extended. This means that someone who is elderly can [have their employment term be] extended until they become a permanent employee,” he explained.

The Petitioner argued that companies can set longer employment terms in PKWT arbitrarily. Not to mention, the a quo article means employment terms can be extended indefinitely without companies having to make employees permanent.

In the petition, the Petitioner explains that the a quo article generally regulates that the end of PKWT is based on two things: the end of employment term or the end of the work. He also explains that Law No. 13 of 2003 on Manpower and the Government Regulation (PP) No. 35 of 2021 on Temporary Employment Agreement, Outsourcing, Working Hours and Break Time, and Employment Termination.

Compared to previous norms that he compared to, the Petitioner asserted, the a quo article has not regulated temporary employment.

Therefore, he requests that the Court declare Article 56 paragraph (3) of the Job Creation Law unconstitutional and not legally binding insofar as not interpreted as “A temporary employment agreement based on a certain period can be set for a maximum of 2 (two) years and can only be extended 1 (one) time for a maximum of 1 (one) year or 1 (one) tie.”

Justices’ Advice

In response to the petition, Constitutional Justice Suhartoyo said that although the Petitioner argued for potential impairment, there must be an argument of impairment of constitutional rights. “I believe there needs to be another argument or another factual data that you have close connection to Article 56 paragraph (3). Or you can find another petitioner to collaborate on that,” he said.

Constitutional Justice M. Guntur Hamzah explained that the Court had reviewed cases such as this. “So, you should strengthen [your case]. There is one Court decision that I believe is closely related to your petition, but I don’t see the Decision No. 27 of 2011 in your petition. That decision concerns outsourcing but it has to do with PKWT and PKWTT [too], so maybe there is a point of overlap,” he said.

Before adjourning the session, Justice Guntur announcement that the Petitioner had 14 workdays to revise the petition. It must be submitted to the Registrar’s Office by Monday, July 3, 2023 at 13:30 WIB.

Author       : Utami Argawati
Editor        : Nur R.
PR            : Raisa Ayuditha
Translator  : Yuniar Widiastuti (NL)

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.


Tuesday, June 20, 2023 | 16:07 WIB 350