Ridwan Max Sijabat, Jakarta – The Indonesian Institute of Sciences (LIPI) has urged the government to review the 2003 Labor Law to end prolonged industrial conflicts between employers and workers.
A study from a LIPI research team concluded that the law, which has met strong resistance from employers and workers since its endorsement in 2003, contained weaknesses both in substance and implementation.
"The law should be reviewed immediately to phase out weaknesses because the law plays a strategic role in creating industrial harmony, improving workers' social welfare and avoiding social conflicts that could undermine political stability," team leader Laila Nagib told The Jakarta Post by telephone on Tuesday.
The articles on contract-based work and outsourcing were found to be unclear and did not provide protection for workers while those on severance and service pay and the procedures for settling labor disputes deterred investment. Many other articles were found to be multi-interpretative and to contradict other laws.
The study was made available to the Post on Tuesday. The 10-member team chaired by senior researcher Laila Nagib comprised Endang S. Soesilowati, Leolita Masnun, M. Sukarni, M. Riefki Muna, Nawawi, Soewartoyo, Titik Handayani, Tri Nuke Pudjiastuti, Tri Widya Kurniasari and Zamroni Salim.
President Susilo Bambang Yudoyono instructed LIPI to study the law in 2009 after labor unions took to the streets to oppose the law on May Day that year. For similar political reasons, the President also asked five state universities to conduct the same study in 2005, but no recommendations were made.
According to the LIPI team, the law was biased toward the formal sector where only 35 million are employed while it was found to be unenforceable in the informal sector with more than 70 million workers.
They said the prolonged protest against contract-based, outsourcing and minimum wage-based remuneration systems was due to the law not regulating in detail temporary jobs for contract workers and the unclear definition of core businesses and supporting jobs.
The team insisted that employers should identify temporary jobs and outsourcing companies should comply with workers rights and provide legal and social security protection for them. Furthermore, inspection by the state had to be improved to ensure employers' compliance with the relevant laws.
Regarding the remuneration system, the team called on the government to eliminate the sector-based minimum wage to alleviate the disparity in regional wage systems, and minimum-wage levels should be set by a tripartite forum at provincial level with approval from governors.
The team also found inconsistencies in the articles on labor dismissal and severance and service payments, especially for workers committing crimes.
According to the team, labor dismissal as stipulated in the 2005 Labor Court Law is too complicated and time-consuming, with uncertainties for both employers and workers. To shorten the procedure, the team said, labor disputes, mainly dismissal cases, should be resolved at a bipartite, company level between employers and workers.
The law stipulates that employers had to pay workers in trouble and those who were detained by the police until their disputes with the management were resolved permanently. The team recommended the establishment of dismissal-benefit schemes that could be integrated with social-security programs to help dismissed workers survive periods of unemployment without having to make use of savings or pensions.