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Indonesia – Labourers protest over use of outsourcing

14 November 2013

Thousands of workers staged a rally outside the Ministry of State-Owned Enterprises today over the continued use of outsourced and contract labour by government-owned companies, a practice that has been banned in most sectors, reports the Jakarta Globe.

Mudhofir, President of the Indonesian Prosperous Labour Union Confederation (KSBSI), told news portal Tribunnews.com: “Around 5,000 labourers from all over Indonesia will stage a protest at the SOE ministry. We demand [that the minister] immediately follow up on the recommendations to save the lives of millions of outsourced workers in state-owned enterprises.”

The practice, which excludes outsourced and contract workers from benefits; such as job security and annual bonuses, has come under fire in recent years. The Ministry of Manpower and Transmigration outlawed the use of outsourced workers in most industries in 2012, limiting the hiring of contract workers to select fields.

Companies are permitted to use outsourced workers for office support staff, known colloquially as ‘office boys’ and ‘office girls’, as well as for cleaning staff, catering, transportation, security, mining and oil labourers.

Labour unions and lawmakers have accused state-owned companies of flouting the regulation and continuing the use of contract workers at numerous government-run companies. Fourteen companies so far have been publicly named for breaking the ministry’s regulation.

According to the Jakarta Globe, the State-Owned Enterprises Minister, Dahlan Iskan, initially side-stepped repeated summons from the House of Representatives on the matter before appearing before House Commission IX, which oversees labour issues, in April. At the meeting, he promised to establish a path to permanent employment for outsourced workers

House Commission IX reiterated the need in a 12-point letter listing recommendations to the Ministry of State-Owned Enterprises. The ministry was scheduled to take action on 13 November, but little movement has been seen.

Mudhofir added: “Such slowness ought to get the full attention [of the ministries] as it concerns the lives of millions of labourers and their families. The SOE ministry has shown a lack of courage in accepting the [recommendations].”

House Commission IX member Djamal Aziz urged the ministry to follow through on the recommendations. “The list, which focuses on workers’ welfare, pays special attention to the possibility that state-run companies will simply lay off outsourced workers instead of hiring them full time. If the employees’ contracts are terminated, the remainder of their term must be paid out.”

This protest is the latest in a series of demonstrations organised by Indonesian’s powerful labour unions. Protests and strikes have been held in recent months as demand for greater protection and higher wages increased in the wake of food and fuel related inflationary pressures. 

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