January 24, 2012
By Harry Kelber
16 Million Indonesian Workers May Benefit from Changes in Law
A revision of Indonesia’s labor law that paves the way for outsourced workers to have equal benefits with permanent employees is expected to improve the lives of millions of workers. The amended law should also reduce conflicts between laborers and employers in Southeast Asia’s largest economy.
On Jan. 17, the Constitutional Court declared outsourcing unlawful under the country’s Constitution, because it would create uncertainty over the faith and livelihood of the workers. Timbul Stregar, chairman of the Indonesian Workers Association (OPSI), said the revision of the law was a victory for 16 million outsourced workers, or roughly 40 percent of the country’s formal labor force of 41 million.
“The contract system will remain only if it is improved with benefits, such as overtime bonuses and severance pay,” Timbul said. The unions had been fighting in the courts for an improved law since 2003. The court’s ruling stated that Indonesian workers had “the right to a decent job and a decent life,” which should be the basis of the country’s labor law.