People fear losing pensions and insurance if they are made contract workers for life due to the law
Thousands of Indonesians took to the streets of several cities on Tuesday in a national strike to protest against a new jobs law they say is too pro-business, but which the government has promoted as vital to attract investment.
President Joko Widodo's "omnibus" Job Creation bill, approved by parliament on Monday, revises more than 70 existing laws to accelerate reform of Southeast Asia's largest economy.
Unions expect some two million workers to join the three-day national strike, starting on Tuesday, against the law.
Demonstrations began on Tuesday in industrial areas around Jakarta and on Batam island, home to many electronics plants, as well as in cities in Sumatra and Sulawesi islands, local media reported.
Television footage showed thousands of people protesting in Bandung, West Java, wearing face masks but without observing social distancing. They burnt tyres in front of the local parliament office, according to media reports.
Citing the need to contain the spread of the coronavirus, police blocked workers from protesting in front of the national parliament in Jakarta as planned.
"The law will definitely affect the status of our employment," said Anwar Sanusi, a member of FSPMI trade union in Tangerang, west of Jakarta.
People fear losing pensions and insurance if they are made contract workers for life due to the law, Sanusi told Reuters.
The law removes the three-year maximum duration of contracts and reduces severance benefits - provisions the government said are intended to promote formal hiring. Other reforms include longer working hours and changes to mandatory paid leave.
Markets welcome law
Indonesian markets cheered the passage of the bill, with the main stock index up as much as 1.31% and the rupiah reaching as high as 1.28%, before paring some gains.
The Indonesia Investment Coordinating Board, a government agency, said it would lead to better welfare for workers by facilitating more foreign investment.
Citibank, in a research note, said the law simplifies business licensing and addresses restrictive trade and labour policies, but added that immediate foreign investment was unlikely in the currently depressed global economic climate.
Trimegah Securities economist Fakhrul Fulvian said banks and export-oriented industries should benefit from the law, while consumer and retail sectors may be pressured as workers may increase savings to compensate for changes in labour rules.
However, many Indonesians criticized the law on Twitter, with one trending hashtag incorporating an expletive against parliament and another calling lawmakers traitors.