The government has said the so-called "omnibus" law, which has revised over 70 existing laws, is vital to cut red tape, spur investment and boost labour market competitiveness.
While it has been positively received by the market, it has sparked a firestorm of protests from workers, students and environmentalists since it was passed by parliament last month.
"The KSPI (Indonesian Trade Union Confederation) wants to use all channels provided by the constitution,” said spokesman Kahar S. Cahyono, confirming his union and the Confederation of All Indonesian Workers' Union (KSPSI) had lodged the judicial review late on Monday.
Kahar said the challenge, which came hours after President Joko Widodo is reported to have signed the flagship legislation into law, argued that the law breached the constitutional rights of workers.
The union spokesman also said it was also considering calling for an executive or legislative review of the process behind bringing in the legislation.
A presidential spokesman and the state secretariat did not immediately respond to a request for comment on the judicial review.
Last month, tens of thousands of students and workers took to the streets across the archipelago in demonstrations that in some instances turned violent.
Unionists say the new law undermines the rights of workers and object to changes to rules around severance pay, using contract workers and outsourcing.
Critics also say the changes were passed without sufficient consultation and weaken environmental protection in a country with one of the fastest rates of deforestation in the world.
Government officials have denied that the new law will dilute environmental protection or harm workers and say it is vital to boost investment in a pandemic-hit economy facing its first contraction this year in two decades.
