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Outsourcing ruled unconstitutional in Indonesian court

9 February, 2012The Indonesian Constitution Court rules that outsourcing is against workers' rights as enshrined in the Constitution and, elsewhere in Indonesia, workers stage mass protests to successfully defend minimum wage increase decision.

INDONESIA: In a landmark decision on January 17, the Indonesian Constitutional Court, ruled that out-sourcing work is unconstitutional and against workers' rights as enshrined in the Indonesian Constitution.

The Jakarta Post reports that millions of contract-based workers will regain their rights, including monthly salaries, allowances, severance pay and social security benefits, after the Court annulled rulings on temporary workers and outsourcing set out in the 2003 Labor Law.

The decision came in a case involving an electricity meter reader who filed a claimed that his permanent job was lost and taken over by out-sourced workers in contravention of the constitution.

Speaking at a pre-congress forum of the Kongres Serikat Pekerja Indonesia (KSPI) in January, IMF Regional Representative Arunasalam urged the unions to pursue this important decision of the highest court in Indonesia. He called upon the delegates to study the decision and seek improvement of the labour laws. He also pointed out that precarious work is a "cancer" in society that impedes socio-economic development for the working class and undermines trade union growth.

Meanwhile in the industrial city of Bekasi, tens of thousands of workers blockaded the main highway for about eight hours on January 20, paralyzing economic and industrial activities in the area. The mass protest erupted after the Bandung Administrative Court in West Java ruled in favour of the Indonesian employers' association (APINDO) and ordered the provincial government to annul its decision on a 16 per cent minimum wage increase for 2012 to Rp 1,491,886 (US$168) for general workers, Rp 1,715,645 and Rp 1,849,913 for Category 1 and 11 respectively for industrial workers.

This protest forced APINDO to back down on its demand during negotiations with the unions mediated by the Manpower and Transmigration Ministry. Following this the West Java governor signed a decree revising the minimum wage for the Bekasi regency as was initially decreed.

Said Iqbal, President of IMF affiliate FSPMI said that workers power won the fight. He stressed that unified and concerted fearless struggle drove the employers to agree to minimum wage increase.

Similar protests are organised in Tanggerang which is another large industrial city. The rising cost of living and declining purchasing power is forcing workers and unions to fight for higher wage increases prompting the Indonesian President to call upon employers to pay higher wages to off-set rising costs of living.