Constitutional Court Provides Solution to Outsourcing Problems

Didik Supriadi, Chairman of the Electricity Meter Reader Officer Alliance (AP2ML) asked the Constitutional Court (MK) to review Articles 59 and 64 ofLaw No.13 of 2003 on Labor.The request was filed in March 2011.

He explained that electricity meter reading is permanent work. However, not all meter readers are permanent employees. Some are contract workers formanyyears.

Didik asserted that the State Electricity Company (PLN) does not consider a meter reader’s work experience, because their contract is renewed every year. As a result, a person who has been working for 20 years receives the same treatment as an employee who has only worked for a short period.

Even though Didik asked MK to review Articles 59 and 64, MK based its decision on other articles. MK declared that the ‘fixed-term contract’ phrase in Article 65 (1) and Article 66 (2) b of the Labor Law is unconstitutional.

“The fixed-term contract [perjanjian kerja waktu tertentu – PKWT, red.] phrase in Articles 65 (7) and 66 (2) (b) contradicts the Constitution. They are not binding if the employment agreement does not mention protecting workers’rights. Even if there’s a change in the outsourcing company,” said Mahfud MD, the Chairman of the Panel of Judges, Tuesday (17/1). MK also asserted that workers in an outsourcing company are entitled to their constitutional rights.

“MK has to make sure that an agreement between an outsourcing company and its workers guarantees workers rights. A company can’t abuse this agreement,” said Achmad Sodik, a member of the judges panel.

MK came up with two kinds of plans to protect workers rights. In the first model, work agreements between workers and a company that uses an outsourcing serviceare work contracts for an indefinite time (perjanjian kerja waktu tidak tertentu – PKWTT). This model will be considered constitutional.

The second model implements the transfer of undertakings principle in outsourcing companies. “This principle has been implemented. For example,when a company is acquired by another company, the rights of outsourced worker’s are still protected,” said Sodiki.

MK further explained, if an outsourcing company transfers its work to another company, the new company has to continue the work agreement that was previously made. However, changes are permitted to increase workers’ prosperity.

“Experienced workers won’t be treated like new workers. Work experience and work periods will be taken into account,” Sodiki explained.

Pursuant to Article 64 (4) in conjunction with Article 66 (2) c of the Labor Law, a company must also ensure that outsourced workers are treated fairly, just like permanent workers. However, Didik argued the decision may be difficult to implement due to a lack of government supervision.

“I hope the court’s decision can be applied in practice,” he said.

(Agus Sahbani / Mahinda Arkyasa)