MP Member: Labour Law Revision Must Anticipate AI Disruption

The future of Indonesia’s labour landscape is facing much more complex challenges than a decade ago. Global economic uncertainty, slowing business expansion, and limited new job creation have already become serious issues. However, above all else, there is a more fundamental change that has not yet fully entered the national labour discourse: the disruption of Artificial Intelligence (AI), which has the potential to replace human roles.

Pulung Agustanto, a member of Commission IX of the Indonesian House of Representatives (DPR RI), believes that the development of AI must serve as one of the foundations in the discussion of the law’s revision. He argued that Indonesia must not repeat the mistake of creating regulations that only address today’s problems but fail to anticipate the realities of the future workforce. “Technological disruption must be an important consideration when we discuss labour regulations. We must not allow the rules we create today to quickly become obsolete,” Pulung stated in a briefing on Tuesday, 2 June 202<0xC2>6.

He noted that Law Number 13 of 2003 concerning Labour was born in the era of conventional industry, when employment relationships still relied on the physical presence of workers at companies. Meanwhile, the Job Creation Law was introduced with a focus on increasing labour market flexibility and encouraging investment. However, both were built on the assumption that technology only functions as a production aid to replace human physical labour.

“What is happening now is different. AI does not only replace human muscle, but also human cognition. This change is far greater than previous waves of automation,” he asserted.

Consequently, Pulung believes the paradigm of labour protection must also change. The state must not only protect existing jobs but must also protect workers from technological changes. “Technology may develop, but humans must not be left behind. If companies reap the benefits of technological efficiency, then workers must also have the opportunity to enhance their competencies to remain relevant,” he said.

Pulung also highlighted the increasing use of algorithms in workforce management. Currently, job assignments, productivity measurements, and even the provision of incentives are increasingly determined by digital systems and algorithms. The issue is that algorithms often operate like a ‘black box’ that cannot be understood by the affected workers. As a result, workers may receive poor assessments, lose incentives, or even face sanctions without knowing the underlying criteria used by the system.