Outsourcing

Old Rules

New Rules

Outsourcing Arrangements

Based on Law No.13 of 2003 in conjunction with Permenaker No. 19/2012 in conjunction with Permenaker No.11 of 2019, outsourcing is carried out based on a job supply agreement and based on a labor supply agreement. In the work contracting there are no restrictions on the type of work, while in the work provider service agreement, the type of work is limited to supporting work (non-core business process), which is limited to: cleaning service businesses, food supply businesses for workers (catering) , a security force business (security / security unit), a supporting service business in mining and petroleum, as well as a business to provide transportation for workers.

Outsourcing Arrangements

In Law no. 11 of 2020 in conjunction with GR 35 of 2021, outsourcing is no longer differentiated between job supply or labor supply. Outsourcing is no longer limited to supporting work (non-core business processes), so there are no more restrictions on the types of work that can be outsourced. The types of work that can be outsourced, depend on the needs of the sector.

Protection of Rights

In the Manpower Act No. 13/2003 states that a work agreement must be made in writing between companies using workers / labor services and companies providing worker / labor services.

Protection of Rights

The employment relationship between the outsourcing company and the employed workers is based on PKWT (Fixed Term Employment Agreement) or PKWTT (Indefinite Work Agreement). Protection of Workers / Laborers, Wages, health, working conditions, and disputes are regulated in a Work Agreement, Company Regulation or Collective Bargaining Agreement

Based on GR No. 35 of 2021 Article 18

Transfer of Work

In the Manpower Act No.13 of 2003, it is stated that, If the employing company does not continue the worker / labor service agreement and transfers the work of providing worker / labor services to a new worker / laborer service provider company, the new worker / laborer service provider must continue the existing work agreement without prejudice to the provisions in the work agreement that has been agreed upon.

If there is a transfer of work to a company that provides worker / labor services, then the working period that the workers / laborers have passed must still be considered to exist and be calculated by the new worker / labor service provider company.

Transfer of Work

In PKWT (Fixed Term Employment Agreement), it must require the transfer of rights protection for Workers / Laborers in the event of a change of Outsourcing Company and as long as the object of work remains. These requirements are a guarantee for the continuity of work for Workers / Laborers. If the Worker / Laborer is not guaranteed continuity of work, the Outsourcing Company is responsible for fulfilling the Worker's / Laborer's rights.

Based on GR No. 35 of 2021 Article 19

Legal entity

In the Manpower Act No.13 of 2003, it is stated that, the handover of part of the work implementation to other companies is carried out through a written work contracting agreement and must be in the form of a legal entity

Legal entity

The outsourcing company must be in the form of a legal entity and must fulfill the business license issued by the Central Government. The requirements and procedures for obtaining business licenses are carried out in accordance with statutory provisions concerning the norms, standards, procedures and criteria for business licensing stipulated by the Central Government.

Based on GR No. 35 of 2021 Article 20