Constitutional Court deadline forces DPR to fast-track a standalone Labor Law by 31 October 2026
A 2024 Constitutional Court ruling requires Indonesia's labor provisions — currently folded into the 2023 Job Creation Law (UU Cipta Kerja) — to be separated into a standalone Labor Law by 31 October 2026, or the pre-omnibus 2003 Labor Law reverts into force. With roughly two months left, DPR Commission IX is fast-tracking a 19-chapter, 224-article draft, targeting completion of the academic manuscript and bill text by early October 2026, while expanding consultation with labor unions.
Key points
- Constitutional Court Decision 168/PUU-XXI/2023, announced 31 October 2024, ruled the labor cluster in Law 6/2023 on Job Creation (UU Cipta Kerja) must be separated into a standalone Labor Law within two years.
- The Court reiterated the 31 October 2026 deadline in a June 2026 statement rejecting a further challenge to the Job Creation Law.
- If DPR and the government miss the deadline, the pre-omnibus Manpower Law (Law 13/2003) automatically applies in place of the current labor-cluster provisions.
- DPR Commission IX (labor affairs) is drafting the bill; as of 13 August 2026 the working draft ran to 19 chapters and 224 articles, prepared by the DPR's Expert Agency.
- Draft topics include termination-of-employment prevention, wages, fixed-term employment contracts (PKWT), outsourcing, training and apprenticeships, job placement, non-employment-relationship workers, and foreign worker rules.
- DPR leadership targets completing the academic manuscript and bill text by early October 2026, and has committed to expanded consultation with labor unions before the bill is finalized.
What this means for Japanese companies
If your Indonesian entity relies on the current outsourcing, fixed-term contract (PKWT), or termination rules under the Job Creation Law, those rules are being rewritten under real time pressure — outsourcing has already been tightened separately under Permenaker 7/2026 (effective 30 April 2026). Treat October 2026 as a checkpoint: if the bill passes, your HR policies, employment contract templates, and outsourcing vendor agreements may need updating to the new law's terms; if DPR misses the deadline, the 2003 Labor Law reverts, which is stricter on outsourcing and fixed-term contracts than the current omnibus provisions. Either outcome changes your compliance baseline, so this is worth tracking monthly rather than assuming today's rules hold through year-end.
Sources
- Mahkamah Konstitusi RI — Tolak Uji UU Cipta Kerja, MK Ingatkan Batas Waktu Dua Tahun Pemisahan Kluster Ketenagakerjaan
- Kompas — DPR Kebut Penyusunan RUU Ketenagakerjaan, Draf Ditargetkan Rampung Awal Oktober
- Suara.com — Batas Waktu dari MK Mepet, DPR Kebut RUU Ketenagakerjaan Baru
This page summarises publicly available information for orientation. It is not tax, legal, or accounting advice, and regulations change. Verify against the linked primary sources and contact us before acting on anything here.
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