The Fate of Employee Outsourcing on the Job Creation Act page

JAKARTA, KOMPAS.com – The Cipta Kerja Cipta Work Omnibus Law or Bill was officially approved by the DPR as Law (UU) in the plenary session on Monday (10/5/2020).

The Job Creation Bill is a bill proposed by President Joko Widodo (Jokowi) and is part of the 2020 Priority Bill in the 2020 National Legislation Program.

One of the featured articles refers to the outsourcing of workers. There are changes in article 66 of Law 13 of 2003 that are revised in the Omnibus Law for Job Creation.

In the Labor Law, subcontracting work is limited to work outside of the main activities or that are not related to the production process, except for support activities.

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“Workers / workers of companies that provide worker / labor services cannot be used by employers to carry out main activities or activities that are directly related to the production process, except for activities of support services or activities that are not directly related to the production process.”, States Article 66 of Law No. 13 of 2003.

Meanwhile, article 66 of the Employment Creation Law does not establish the limits of the jobs that are prohibited to subcontracted workers.

With this revision, the Employment Creation Law opens the possibility for outsourcing companies to hire workers for a variety of tasks, including freelancers and full-time workers. This will make the use of outsourced labor more free if there are no other regulations derived from the Employment Creation Law.

Labor Minister Ida Fauziah did not specify whether the limits on labor outsourcing remained limited or expanded in the Employment Creation Law.

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In her explanation of the revision of the outsourcing article in the Employment Creation Act, Ida only said that if the change occurred in the principle of transfer of protection.

“The conditions and protection of workers’ rights are maintained in subcontracting or subcontracting activities. Even in subcontracting activities, this law includes the principle of transfer of protection of rights for workers in case of change of subcontracted companies”, Ida said in her official statement.

A crucial article that is also controversial in the Omnibus Employment Creation Law is the abolition of article 59 of Law 13 of 2003 on Labor.

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In this article, the Labor Law protects workers or day laborers who work in a company so that they can be designated as permanent employees after working for a maximum period of 2 years, and they are extended once for the next 1 year .

“An employment contract for a specific period of time can only be performed for certain jobs which, depending on the type and nature or activity of the job, will be completed within a specified time., “the sound of article 59 subsection (1) of Law No. 13 of 2003.

The article of Law Number 13 of 2003 explicitly regulates the Fixed Term Work Contract or what is commonly called PKWT.

PKWT is an employment contract between a worker and an employer or company to establish an employment relationship for a specific time or for a specific type of work.

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The PKWT agreement also regulates the position or position, the salary or wages of the worker, what benefits and facilities the worker obtains and other matters that regulate personal labor relations.

The obligation to appoint permanent employees is eliminated

Companies can only enter into a non-indefinite employment contract for a maximum of 3 years. After that, companies are obliged to appoint workers or day laborers as permanent employees if they want to employ them after a period of 3 years.

The obligation to appoint employees after going through the contract period and the PKWT contract extension is made because companies can only do PKWT once for an employee (hired employee).

When 2 years have passed or they are extended for 1 year, the company has only two options, namely not to extend the employment contract or to appoint him as a permanent employee.

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“Fixed-term work agreements based on a certain period of time can be maintained for a maximum of 2 (two) years and can only be extended 1 (one) time for a maximum period of 1 (one) year, “the sound of article 59 subsection (1) of Law No. 13 of 2003.

Meanwhile, in the Draft Law on Job Creation, article PKWT was eliminated from Law Number 13 of 2003. The consequence of the loss of this article is that the company no longer has a time limit to enter into a contract of I work with your workers.

“The provisions of article 59 are deleted., “the sound of the Draft Law of Creation of Works that has been ratified in the Law of Creation of Works.

Employing companies can continue to renew their employee contracts without having to convert them to permanent employees. In other words, the Employment Creation Law will allow companies to hire employees or laborers or day laborers as contract employees for life.

The latest rules of the Cipta Kerja Omnibus Law apply to all companies operating in Indonesia, both factory workers, manufacturing industries and office workers.

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Previously, according to the Head of the Communication and Media Department of the Indonesian Workers’ Union Committee (KSPI), Kahar S Cahyono, with the abolition of this article, the use of contract workers, which in the law is called the employment contract fixed time, can be treated for all kinds of work.

“With the abolition of Article 59, there is no longer a limit on how a worker can be hired. As a result, a worker can be hired for life,” Kahar said in his official statement.

In fact, he continued, in the Labor Law, subcontracted workers can only be used for certain jobs that, depending on the type and nature or activity of the work, will be completed within a certain period.

For example, jobs that are completed once or that are temporary, work that is estimated to be completed in a not too long time and a maximum of three years.

Additionally, this article also regulates work of a seasonal nature or work related to new products, new activities, or additional products that are still being tested or explored.

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Also, contract workers cannot be used for types of work that are permanent in nature. Therefore, based on this article, in addition to certain jobs that, depending on the type and nature or activity of the job, will be carried out within a specified period, permanent workers must be hired.

While in article 59 of the Manpower Law, it is also stipulated that subcontracted workers can only be retained for a maximum of two years and can only be extended once for a maximum period of one year. After that, renewals can be done once for a period of up to two years.

“If the omnibus law is approved, companies will tend to employ their workers under a labor contract system. There is no need to hire permanent workers,” he said.

Due to the use of contract workers, it is certain that there will be no more severance pay. Because severance pay is only awarded to workers who are permanent employees. In addition to no more job security, severance pay will also be lost indirectly.

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