Indonesian companies said last Thursday that they now had no choice but to brace themselves for higher labour costs in the wake of the Constitutional Court ruling that declared outsourcing against the Constitution.

The ruling issued last week by Constitutional Court Chief Mahfud MD was based on a judicial review request challenging the section of the 2003 Labour Law allowing outsourcing filed by Didi Supriyadi, the chairman of the Electricity Meter Reader Officers Alliance.

Mahfud said last week that chapters in the law governing temporary work and outsourcing conditions created uncertainty over the faith of workers. The court ruled that these were against the 1945 Constitution that said workers in Indonesia had "the right to a decent job and a decent life," which should be the basis of the Labour Law.