Tuesday, August 07, 2012
Laborers Threaten to Organize a National Scale Strike
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Ady Thea Dian Achmad, Mahinda Arkyasa

The improvement of labor practices will always remain as one of the biggest concerns for the Government. For example, when the Government issued Minister of Labor and Transmigration Regulation No. 13 of 2012 on Variables and Implementation of Decent Living Needs (“Regulation”), laborers responded that the Regulation is not sufficient to satisfy their actual living needs.

The Indonesian Assembly of Labor Workers (“MPBI”) is one of the parties that rejected the Regulation. MPBI asserted that it was only issued by the Government in order to maintain low-wages. Andi Gani Nena Wea, the Chairman of the Confederation of All Indonesian Workers Union (“KSPSI”), asserted that the existing 60 variables that determine the standard of decent living, which include 14 new variables in the new Regulation, are not sufficient.

MPBI demanded that the standard is raised to include 86-122 variables. As a result of the demand, Andi confirmed that MPBI is planning to mobilize a national scale strike in September as a response to the issuance of the Regulation. “It will be a peaceful strike,” he said in a press conference on Monday (6/8).

In addition to the decent living needs issue, Mudhofir, the Chairman of the Confederation of Indonesian Prosperous Labor Union (“KSBSI”), explained that the Government has neglected the laborers’ well-being by failing to oversee the implementation of contract-based work and outsourcing practices.

For example, outsourcing practices often do not comply with the prevailing laws and regulations. Laborers are also often outsourced to carry out core business activities, a practice prohibited by laws and regulations. Mudhofir stated that the Government’s lack of oversight indicates its unwillingness to supervise and impose sanctions on businesses that violate the law. He asserted that the Government should revoke the business licenses of such outsourcing companies.

Said Iqbal, the Chairman of the Confederation of Indonesian Workers Union (“KSPI”), stated that one million laborers would be involved in the strike. The strike will take place in 14 regencies/cities, including Medan, Makassar, Samarinda, Mojokerto, Bekasi, and Tangerang. The strike will happen if the Government fails to comply with MPBI’s demand to suspend outsourcing practices.

Iqbal stated that the strike would be named “Eradicate Outsourcing and Low-Wages” (Hapuskan Outsourcing dan Upah Murah – “Hotsum”). Similar strikes have taken place in several industrial centers, including a strike in Bekasi, which was attended by 300 laborers.

He further explained that in mid-July, the Minister of Labor and Transmigration (“Minister”) had issue a Circular Letter (“Letter”) to Governors in all regions of Indonesia, just right after a Hotsum strike took place. The Letter instructed Governors to collect the data on the outsourcing practices within their regions. He continued by saying that the data should be used as a reference for the Government to apply a moratorium on outsourcing.

Igbal continued and state that the moratorium should be in effect for one year, commencing in September 2012.  Once after the suspension is lifted, outsourced workers should be hired directly by the employing company, and not through outsourcing companies. Moreover, during the moratorium, the Government should draft a Minister of Labor and Transmigration Regulation on Restriction of Outsourcing.

Currently, there are multiple interpretations of laws and regulations on outsourcing practices. Igbal hopes that the new regulation will narrow the interpretations. Furthermore, the new regulation should repeal and replace Minister of Labor and Transmigration Decree No. 101/MEN/VI/2004 of 2004 on Licensing Procedures for Outsourcing Companies and Decree No. 220/MEN/X/2004 of 2004 on Requirements for Outsourcing.

Religious Holiday Allowance (THR)

Matters on THR was also expressed by Iqbal, he viewed that the laborers’ doubt government oversight on THR payment. To address this matter,  MPBI had established posts at its members’ branch offices to receive THR related complaints.   

It is common for outsourcing companies to lay off laborers seven days prior to the Eid Al-Fitr celebration. As a result, many laborers would not report the lay off out of fear that the outsourcing company would not rehire them.  

Because of this underreporting, there are millions of laborers that do not receive THR. Based on MPBI’s research on capital-intensive industrial sectors, 47 percent of the labor workforce is outsourced/contract-based. Meanwhile, in labor-intensive industrial sectors, 80 percent of the labor workforce is outsourced/contract-based. “There are more than 15 million laborers who are at risk of not receiving the THR,” he said.

MPBI stance towards its members is that they will advocate laborers by approaching the businesses that do not provide THR. It is hoped that in the future, THR will be regulated under a Presidential Decree or a Government Regulation, which would penalize businesses that fail their THR payment obligations, Iqbal concluded.