TEMPO.CO, Jakarta - Indonesian President Prabowo Subianto expressed his support for the abolition of the outsourcing system, or labor outsourcing, one of the demands of laborers during the International Labor Day commemoration at the National Monument (Monas), Central Jakarta, on Thursday, May 1, 2025.
"We want to abolish outsourcing. But, my friends, we also have to be realistic and consider the interests of the investors. If they do not invest, there will be no factories, and you will not have jobs," Prabowo said on Thursday, May 1, 2025, as quoted from Antara.
According to the head of state, striking a balance between safeguarding labor rights and providing certainty for investors is a significant challenge. "If they (investors) do not invest, there will be no factories. If there are no factories, you will not be able to work," Prabowo stated.
Furthermore, Prabowo also mentioned the formation of the National Labor Welfare Council as one of the instruments to support labor welfare. "As a gift for the laborers today, I will soon establish the National Labor Welfare Council," he said.
The National Labor Welfare Council is a body that will involve labor figures from all over Indonesia and will be tasked with advising the President on improving laws and regulations considered unfavorable to workers.
He claimed that the National Labor Welfare Council will also deeply study the transition mechanism towards the abolition of the system, while still considering the investment climate.
About Outsourcing
Referring to Article 64 of Law Number 13 of 2003 concerning Employment, outsourcing is the transfer of part of the work implementation to other companies through a written work contract or the provision of labor services/workers, according to the regulation.
Meanwhile, Article 66 of the regulation stipulates that outsourcing must not be used to conduct activities directly related to the production process. This means that outsourcing is only allowed for supportive activities.
"Workers/laborers from labor service provider companies may not be used by employers to conduct core activities or activities directly related to the production process, except for support activities or activities not directly related to the production process," the article stated.
However, in practice, this system often creates problems, as expressed by the Minister of Manpower (Menaker) Yassierli. According to him, the issue of labor outsourcing has been a continuous concern for laborers for almost the past two decades.
The issues include the transfer of core activities (core business), job uncertainty, lack of career clarity, low wages, vulnerability to layoffs, weak social security protection, and the difficulty in forming labor unions.
Previously, during the 2024 May Day commemoration, the President of the Labor Party and the President of KSPI, Said Iqbal, stated that the practice of outsourcing and low wages has become rampant in Indonesia. He mentioned that outsourcing contracts can be continuously renewed. This is because, according to him, there are no restrictions on the types of work that can be outsourced and can be continuously renewed without hiring permanent employees.
Sultan Abdurrahman, Riri Rahayu, and Dani Aswara contributed to the writing of this article.
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