JAKARTA – Indonesia’s Ministry of Manpower, in collaboration with the International Labour Organization (ILO) and the International Finance Corporation (IFC) through the Better Work Indonesia (BWI) program, has released updated guidelines for Fixed-Term Employment Contracts (PKWT) within the country’s crucial garment industry. The revisions, stemming from Law No. 6/2023 on Omnibus Law, aim to clarify regulations and bolster legal certainty for both employers and employees in a sector vital to Indonesia’s export economy.
The updated guidelines address common challenges in PKWT implementation, including determining appropriate contract durations, identifying eligible types of work for fixed-term arrangements, and ensuring full compliance with broader employment regulations. Indah Anggoro Putri, Director General of Industrial Relations and Social Security at the Ministry of Manpower, emphasized the importance of a “harmonized understanding” of the regulations. “We expect a harmonized understanding in the application of PKWT in accordance with prevailing regulations, thereby strengthening legal certainty, enhancing productivity and ensuring the sustainability and competitiveness of Indonesia’s garment industry supply chain in the global market,” she stated.
The BWI program has been working with the Ministry of Manpower since 2018 to develop these guidelines through national stakeholder consultations. The aim is to provide a practical tool to bridge gaps in understanding and application of the law, helping factories align with national regulations while maintaining operational efficiency. The garment industry, a significant component of Indonesia’s labor-intensive economy, has been a key focus of these efforts.
The need for updated guidelines reflects the evolving landscape of labor regulations and their implementation in Indonesia. Recent revisions were undertaken through consultations with key directorates within the Ministry of Manpower, including the Directorate of Labour Inspection, the Directorate of Industrial Relations and Wages, and the Legal Bureau. This collaborative approach aimed to align the guidance with current legal provisions, enforcement practices, and the practical realities faced by factories and workers.
Simrin Singh, ILO Country Director for Indonesia and Timor-Leste, highlighted the ongoing nature of this work. “The ILO is pleased that the updated guidelines serve as a practical reference to clarify the legal framework, strengthen compliance and support balanced employment practices that uphold workers’ rights while maintaining the competitiveness of Indonesia’s garment industry,” she said. The guidelines are intended as a “living document,” subject to future review and revision as regulations evolve and new issues emerge.
To facilitate wider adoption, English and Korean versions of the guidelines have been developed, reflecting the international nature of the garment industry’s supply chains. Dissemination activities, conducted between September and October 2025, involved over 100 labor inspectors and industrial relations mediators from key regions including Greater Jakarta, Banten, Central Java, West Java, and the Special Region of Yogyakarta. Further outreach to factories engaged over 200 representatives from enterprises participating in the BWI program.
The initiative also extended to international buyers, with the introduction of the English and Korean versions of the guidelines in November 2025. This move aims to strengthen alignment and awareness throughout the supply chain, supporting more predictable employment practices and reinforcing compliance with national labor regulations. PT Ungaran Sari Garments, a participating factory in Semarang, Central Java, underscored the importance of balancing business agility with decent working conditions. Satrio Adipratama, Compliance Manager at PT Ungaran Sari Garments, noted, “The biggest challenge today is adapting to rapidly changing global market trends. The management of PKWT remains a crucial aspect in maintaining the balance between business continuity and creating decent working conditions.”
The updated PKWT guidelines represent a concerted effort to navigate the complexities of Indonesia’s labor regulations within the context of a globally competitive garment industry. The ongoing collaboration between the Ministry of Manpower, the ILO, and the IFC through the BWI program signals a commitment to fostering sustainable progress and upholding workers’ rights while ensuring the long-term viability of this key sector of the Indonesian economy.
