The Ministry of Manpower in Indonesia, with support from the Better Work Indonesia (BWI) programme—a joint initiative of the ILO and IFC—has updated regulations on Fixed-Term Employment Contracts (PKWT) under Law No. 6/2023 on the Omnibus Law. The revised guidelines aim to harmonize the understanding and application of PKWT, strengthening legal certainty, enhancing productivity, and ensuring the sustainability and competitiveness of Indonesia’s garment industry in the global market.
Since 2018, BWI has collaborated with the Ministry through national consultations to develop PKWT guidelines, providing structured explanations and examples to help factories comply with national regulations while maintaining productive operations. The updated guidelines were finalized after extensive consultations with key directorates within the Ministry, including Labour Inspection, Industrial Relations and Wages, and the Legal Bureau, to align the guidance with current legal provisions, enforcement practices, and sector realities.
The PKWT contracts are designed to support business flexibility in Indonesia’s highly competitive export market, but their implementation has posed compliance challenges, such as determining appropriate contract durations, eligible types of work, and adherence to employment regulations. The updated guidelines serve as a practical reference to clarify the legal framework, strengthen compliance, and support balanced employment practices that protect workers’ rights while maintaining industry competitiveness.
To enhance accessibility and implementation, English and Korean versions of the guidelines were developed, accompanied by dissemination activities from September to October 2025. Over 100 labour inspectors and industrial relations mediators from regions including Greater Jakarta, Banten, Central Java, West Java, and Yogyakarta participated in sub-national sessions, while over 200 enterprise representatives engaged in outreach activities. The introduction of translated guidelines to international buyers further strengthened alignment and awareness across the garment supply chain.
Factories like PT Ungaran Sari Garments in Semarang emphasized the importance of balancing business continuity with decent working conditions. Compliance Manager Satrio Adipratama highlighted that adapting to rapidly changing global market trends requires workforce flexibility and skill development, making effective management of PKWT contracts crucial for both operational resilience and the protection of workers’ rights.
