Munich Personal RePEc Archive

Employment Rights Implementation and Industrial Relations Systems: The Case of the Outsourcing Policy in Banking Industry

S Waluyo, Yoyok and Widodo, Tri and Darwin, Muhadjir and Sukamdi, Sukamdi and Mulyadi, Mulyadi (2019): Employment Rights Implementation and Industrial Relations Systems: The Case of the Outsourcing Policy in Banking Industry.

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Outsourcing is sensitive subject in Indonesia, not only from manpower or employment point of views but also from the public policy angle. There were some violations happened at banking industry on outsourcing implementation. One example can be given when bank assigned outsourcing workers for core type of job, instead of supporting job as required by regulations. This is an example where outsourcing workers have limited avenue to seek for assistance to defend their rights for any dispute settlement and resolution. At least at the bipartite level when there is violation against their rights as a worker, including violation of employment rights, they have no representative to defend their employment rights. Generally, outsourcing workers have limited access or no union labor neither at outsourcing service provider as their employer or at their service user where they are currently assigned. However, though there are some “unfortunate” situations faced by outsourcing workers, but there are also situation where there are banks provide compensation and/or benefit and/or opportunities better than the law and decree requirements through outsourcing agencies. Furthermore, outsourcing workers who are placed in some banks have opportunities to enrolled in trainings as part of job requirements. Workers are also well prioritized for banks’ permanent role candidate selection. The outsourcing practice in Indonesia banking industry, specifically on how outsourcing workers received their employment rights including other added value benefits, have become the interest of researchers to have further study and analysis on the rationales. The research focusing on 3 different bank categories who are implementing outsourcing arrangements for their routine operations; 2 state-owned banks, 2 private-owned banks, and 2 foreign banks. The research and analysis should be able to complement previous studies on the outsourcing implementation. The purpose of the research is to have deep understanding on the outsourcing implementation in the banking industry, specifically whether banks have fulfilled obligations as required by the regulations, including outsourcing workers’ rights.

Research have resulted with: 1) banking industry outsourcing workers’ rights characteristic have already implemented as required by the relevant labor regulations. 2) As outsourcing user, 3 bank categories have fulfilled the completion of compensation and benefit as required by the Manpower Law number 13 Year 2003, including workers’ employment rights; wages, overtime pay, other forms of other welfare aspects, and type of work performed by outsourcing workers. And 3) Regulator or Government that governing the outsourcing implementation require banks to comply and implement regulations and policies as required.

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