Indonesian Labor Law Fails to Protect Workers From Outsourcing Dilemmas: Researcher
ID/Agustiyanti | April 18, 2013
Indonesian workers shout slogans during a rally in Jakarta on November 22, 2012. Thousands workers took to the street demanding Indonesia's government to increase their wages, to improve working condition and end the practice of outsourcing manpower. (AFP While a labor law to protect workers' rights was passed a decade ago, laborers still suffer from discrimination and unfair employment terms due to outsourcing, a researcher said on Thursday.
Indrasari Tjandraningsih, a researcher at Akatiga Social Research Center, a nongovernmental research organization, said the 2003 Labor Law formally legalized outsourcing — the local term for contracting employees who are hired from outside firms.
"The outsourcing system is very problematic. Amid the increase of open unemployment in the past five years, outsourcing has become one of the answers for workers who do not get in the formal markets," Indrasari said.
She said outsourcing can cause pay disparity among employees doing the same job, depending on whether they have been permanently hired.
"Outsourced workers' salaries are on average 26 percent lower than the permanent workers," she said.
She added that outsourced workers also face discrimination based on their marital status, as companies are required to cover certain spouse-related costs, along with restrictions on joining unions.
"Akatiga research in industrial centers in West Java, East Java and Riau Islands in 2010 showed that outsourcing work tends to harm workers and it also had not shown job [advancement] opportunities," she said.
Meanwhile, Titik Handayani, a researcher at the Indonesian Institute of Sciences (LIPI), said that labor regulations on outsourcing could protect workers if they are tightly implemented and supervised.
She said that weak law enforcement and lack of oversight were a bigger problems for outsourced workers.
"Besides that, substantially speaking, the 2003 Labor Law has unclear regulations that could lead to multiple interpretations and open opportunities for violations," Titik said.
Outsourcing has come under fire in Indonesia where labor protests in April shut down sections of Central Jakarta as workers demanded an end to what they call an unfair practice. Outsourced workers often lack access to the job security, annual bonuses or company benefits enjoyed by permanent employees.
According to government data, Indonesia has 16 million outsourced workers, or roughly 40 percent of the country's formal labor force of 41 million.
Under the 2003 Labor Law companies are not allowed to outsource core jobs and can only outsource five types of peripheral work, namely cleaning services, security, driving, catering and work relating to support mining.
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