SEAToday.com, Jakarta - The Constitutional Court (MK) has ruled that the duration of a fixed-term employment contract (PKWT) must not exceed five years, including any extensions.

This ruling reinterprets Article 56, paragraph (3) in Article 81, point 12 of Appendix Law No. 6 of 2023 on the Omnibus Law. The decision was made as part of Case No. 168/PUU-XXI/2023, in which the court granted the applicants' request.

"Article 56, paragraph (3) in Article 81, point 12... contradicts the 1945 Constitution and does not carry binding legal force unless interpreted as: The duration for completing a particular job must not exceed five years, including any extensions," said MK Chief Justice Suhartoyo during the ruling session at the MK Plenary Room, Jakarta, on Thursday as quoted from Antara.

Previously, Article 56, paragraph (3) in Article 81, point 12 stated: “The duration or completion of a particular job as referred to in paragraph (2) is determined by the employment agreement.”

In its legal considerations, the MK emphasized that employment contracts are established between employers and employees under unequal circumstances, where workers are generally in a weaker position.

Therefore, the MK stated that the duration of a PKWT should be regulated by law rather than in lower regulations or individual agreements.

“The regulation of the duration of PKWT is crucially important to be stipulated in the law, so that the fixed-term employment agreements between employers and employees are based on legal norms,” said Constitutional Judge Arsul Sani while reading the MK's legal considerations.

Regarding the specific duration of a PKWT, the MK maintains that it falls within the scope of open legal policy, which is under the authority of lawmakers.

However, the MK noted that the employee's position in employment contracts is imbalanced relative to the employer. Thus, the court deemed that Article 56, paragraph (3) in Article 81, point 12 of Law No. 6 of 2023 creates an unacceptable injustice.

Based on this, until Article 81, point 12 of Law No. 6 of 2023 is amended by lawmakers, the MK has set the maximum duration of a PKWT at five years, as previously regulated under Government Regulation No. 35 of 2021.

Additionally, the MK ruled that PKWT agreements must be made in writing to ensure the protection of employee rights regarding contract duration and job completion.

In line with this, the MK reformulated the norm in Article 57, paragraph (1) in Article 81, point 13 of the Omnibus Law to read: "A fixed-term employment contract must be made in writing in Indonesian and in Latin script."

Case No. 168/PUU-XXI/2023 was filed by the Labor Party, the Indonesian Metal Workers Federation (FSPMI), the Confederation of Indonesian Workers Unions (KSPSI), the Indonesian Workers' Union Confederation (KPBI), and the Indonesian Confederation of Labor Unions (KSPI).

The applicants submitted 71 requests grouped into seven categories, addressing issues concerning the use of foreign labor, fixed-term contracts (PKWT), outsourcing, leave, wages and minimum wages, employment termination (PHK), severance pay (UP), wage replacement (UPH), and long-service awards (UPMK).

Writer: Fariz Ahmad Luthfi