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span class="inline inline-left">For better employment: Protesters unfurl banners during a demonstration at Tanjung Priok seaport in North Jakarta. The demonstrators, mostly contract workers, were protesting against the adoption of a contract system by employers. JP/Jerry AdigunaMillions of contract-based and outsourced workers will regain their rights, including monthly salaries, allowances, severance pay and social security benefits after the Constitutional Court annulled rulings on temporary workers (PKWT) and outsourcing set out in the 2003 Labor Law.

The Court’s panel of judges decided unanimously on Tuesday that all chapters on contract workers and outsourcing in the Labor Law were no longer effective because they contravened the Constitution, which assures the protection of workers and their rights.

Constitutional Court Chief Mahfud MD, who presided over the panel of judges, said that every company carrying out short-term projects had an obligation to treat their contract workers and permanent staff equally.

He also said that agencies that provided workers to other companies were obliged to respect their workers’ rights as guaranteed by the Constitution.

“The chapters on temporary work and outsourcing are not binding if the labor contract does not delegate the obligation to guarantee workers’ rights to other companies,” he said.

The Constitutional Court annulled Chapters 59, 64-66 of the Labor Law at the request of Didi Supriyadi, chairman of the Power Meter Readers Union, who was outsourced by a partner company of the state-owned power company PT PLN in Surabaya, East Java.

Since the Labor Law’s enforcement in 2003, many small companies have employed contract-based workers in construction projects and plantations and many others outsourced a part of their work, such as security and cleaning services, to other companies to avoid providing health, meal and transportation allowances and social security benefits to cut labor costs.

Chapter 59 stipulates that labor contracts can be made for temporary work that can be finished within three months at the most while Chapters 64-66 allow companies to outsource parts of their work not included in their core business to other companies.

Separately, the director general for industrial relations at the Manpower and Transmigration Ministry, Myra Maria Hanartani said the ministry was preparing a circular to be disseminated soon to all companies, foundations and other institutions employing workers to comply with the Constitutional Court’s decision until the Labor Law was reviewed.

She added that the government would use the Court’s decision to ask the House of Representatives to review the Labor Law.

Aloysius Uwiyono, a professor of labor economy at the University of Indonesia hailed the Constitutional Court’s decision as a trigger to press employers to improve their workers’ social welfare and to have the government and the House review the Labor Law.

“The Labor Law has long been in need of review because it is based on a conflict paradigm which is contrary to Pancasila industrial relations,” he said.