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(Nov 23, 2012) On November 15, 2012,
The decree will affect how companies use contract workers, banning the outsourcing of core business operations. When the new rules are in force, other than temporary activities lasting just a few months, such as building repairs and painting, only cleaning services, security services, driving services, support services for mining sites, and catering services will be able to be outsourced. The decree will give managers six months to incorporate workers currently under outsourcing contracts into their permanent staffs. (
Many companies that are in labor-intensive industries have preferred to outsource their core operations in order to avoid the requirements imposed on businesses by the labor laws for permanent employees. The decree comes in the wake of labor union pressure and a January 17, 2012,
Muhaimin Iskandar commented on the decree, stating that "[b]usinesses are required to comply with the Labor Law and respect workers' normative rights on remuneration, allowances, annual leave and bonuses." (Siiabat, supra.)
Two labor groups, the Confederation of Indonesian Workers Union and the Confederation of Indonesian Prosperous Labor Union, praised the proposed decree, calling it a step toward improving poor labor conditions in the country. (
- Author: Constance Johnson More by this author
- Topic: Labor More on this topic
- Jurisdiction: Indonesia More about this jurisdiction
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Last updated: 11/23/2012