The Plight of Women Homebased Workers Under Indonesian Labour Law

(Editor’s Note: This is an abridged version of a longer paper by Ratno Cahyadi Sembodo and Hesti R. Wijaya)

Introduction

Subcontracted homebased workers making flowers on piece rate

For more than 15 years, efforts to protect home-based workers officially have been done in Indonesia but to no success. This has led Homenet Indonesia to analyze the existing labor laws since homeworkers are invisible yet in reality they are there. They actually have working relations with their employers and receive some pay in return. They should therefore be recognized by law and obtain their rights as workers.

The 1996 ILO Convention on Homeworkers defines a homeworker as someone who works for remuneration in his or her home or in other premises of his or her own choice, other than the workplace of the employer, resulting in a product or service as specified by the employer, irrespective of who provides the equipment, materials or other input used. Are homeworkers protected under the latest Indonesian labor law (Law No. 13/2003)? This article explores this issue by describing the characteristics of homeworkers in Indonesia, analyzing their predicament under the current labor law, and making certain conclusions at the end .

Characteristics of Homeworkers

Homeworkers show specific characteristics remarkably diffe-rent from workers in a manufacturing establishment which belongs to the factory owner.

In Indonesia, there are three types of homebased worker : 1) homeworkers in the putting out system (POS) who work in their homes, this work being obtained from the employers or, in most cases, immediate employers or intermediaries; 2) homeworkers who act as middle persons, employ other homeworkers and employ themselves in similar type of work; and 3) homeworkers who are self employed and work independently in producing goods according to their own designs, having full rights on their production and marketing their products themselves.

All three types of homebased workers have the following experiences/characteristics in common: 1) long working hours; 2) low returns, lower than minimum regional wage; 3) work often involving family laborers; 4) no social security; 5) no occupational health and safety devices; 6) no written contract; and 7) use of their home as their base of production.

There are additional similarities between homeworkers in the POS and homeworkers who are middle persons at the same time. Their work is irregular, orders are from one to seven days, and wages are paid through piece rate decided upon by the immediate employer or intermediary, and upon delivery of products which are considered satisfactory by the latter. Despite long working hours, they have no overtime pay. Their contributions to the production process consist of their labor, their work place, and their equipment. Workers lack or do not have any bargaining power. There are no provisions regarding working hours, overtime, weekly rest period, maternity, menstruation, and annual leaves.

In contrast, the self-employed have relatively regular work, have daily orders, and can decide on their own compensation and work standards, working hours and rest periods, holidays and leaves. They get paid upon selling their products, have contributions to the entire production process, and bear the risks when there are losses.

Protection of homebased workers within the Indonesian law for workers

Taking the above mentioned charac-teristics in consideration, the pattern of working relations between homebased workers and their immediate employers is specific. Its features are distinct from employer-employee relations in the industrial sector or formally registered companies, in the following sense:

1. The working contract between the employee (read : homeworkers) and their immediate employer is only a verbal agreement, and it covers an extremely short time only (one day – one week). Yet because there is a constant repetition of job provision, eventually it is perceived as a routine job that goes on continuously.
2. The employers do not supervise homeworkers who are employed. However, quality control is imposed upon the submitted product based on their standards of the expected results.
3. The homeworkers do not have any bargaining power to mutually determine agreed contract with the immediate employer.
4. Homeworkers who work also work as intermediaries do not have any bargaining power to determine the terms of the contract.

Organized homebased workers display their newly invented products

These characteristics cannot easily be fitted in the new Indonesian labor law. The main question is whether their current patterns of working relations are covered by existing law, thereby ensuring that their rights to be protected as workers are met , or whether such patterns fall outside the existing labor law.

At glance, reading the definition only, it seems that the latest Indonesian law (Law No. 13/2003) regarding manpower covers the homeworkers. Chapter 3, bullet 3 reads :“A worker or a laborer is a person who work and receiving a wage or a return in other forms” Chapter I, No. 4 also provides that “Work provider is an individual or entrepreneur, corporate body or other type of institution that employ worker and pay by wage or other form of return.” These definitions are consistent with the homeworkers’ intention to work for a pay. Definitions of what is an entrepreneur and what is an enterprise found in Chapter I, Number 5, and Chapter 6, Number 6 of Law No. 13/2003 should cover not only the employers, but also the middle persons employing women homeworkers, registered and/or non-registered as long as they employ other people in the production process.

In addition, these definitions are also consistent with other laws, such as Chapter 1, Number 6 and 7, Law No. 2/2004 regarding Industrial Relation Dispute-Solution, which is the same as Chapter 1, number 7 and 8, Law No. 21/2000 regarding Labor Union/Workers Union, as well as Chapter 1, Number 3 and 4 Law No. 3/1992 regarding Workers’ Social Security.

It implies that entrepreneurs/emplo-yers who employ home-workers are included in the abovementioned definit-ion, because it applies to both type of employers,

However, entrepreneurs are usually not transparent about the fact that they employ homeworkers. This is possible since the production process is not done in the factory establishment, but in the house of the homeworkers. In the mean time, the working contract supposedly is covered by Chapter 1, Number 14 of Law No. 13/2003 that states : “Working Contract is an agreement between workers/laborers with employer or work provider that covers work conditions, rights and responsibilities of all parties.” (Chapter 1, no. 14). This definition is broader than the coverage of labor laws in the past. In particular, it explicitly states that a working contract is not only applied to laborers/workers with employer, but also to workers/laborers with work provider who, in the case of POS, is the middle person. The main difference between the two lies in enterprise ownership. Entrepreneurs may own the enterprises, while the work providers are not necessarily enterprise owners.

Unfortunately, it seems this chapter is nullified by chapter 1, no. 15, Law 13/2003 which reads :“Working relation is relation between entrepreneurs and the workers/laborers, based on working contract that spells out items of work, wage and order.”

Legal experts such as Soepomo (1985) and Djumialdji (2002) however believe that a working agreement exists when a worker/laborer has agreed to work for employers who provide jobs and pay upon job per-formance. It is not necessarily a written contract since chapter 51, verse 1, of Law 13/2003 reads : “Work agreement may be a written agreement or a verbal agreement”

The elements of work agreements are : 1) Job implementation, meaning that the worker agrees to perform job designs; and 2) Subordinate relationship, meaning that workers or laborers work under the leadership or instruction of others.

Another feature that characterized home-work relation is that the work is very much short term, and replicable continuously.. Particular reference to this is in chapter 1601c, verse 2 KUHPA (Book of Rule of Civil Law a) which states :“When a work-contract-agreement is followed with other agreement in which there is with a time gap in between or if during the time of the drafting work-contract-agreement both parties clearly meant to materialize further a number of agreements, such that all work-contract-agreement all together is considered as one work agreement, thus, the one that applies is stipulation regarding all of those agreements similarly applied to each agreement. However if in that case the first agreement is put forth as an experiment, this agreement is considered to remain intact as a work contract agreement.”

It is clear that such relation may be categorized as work relation, because it involves leadership element or authority to instruct by employers to workers such as homeworkers.

The Issue of Wage Payment and Social Security

Law No. 13/2003 mentions the following definition of wage or pay. “Wage is the workers/laborers rights in the form of many as return from employers or work provider to the workers/laborers which is determined and paid according to a work agreement, join agreement, or rules of laws, including bonus for workers/laborers and their families upon a job and/or tendered service.” This definition identifies the work provider as the party who is capable of paying the workers/laborers, thereby implying that the case of homeworkers who are actually the workers/laborers in the putting out system (POS) are covered and should be protected under Indonesian labor laws.

In addition, as a result of advocacy by Homenet Indonesia and other groups, the Ministry of Manpower covered homebased workers by issuing the following regulation on piece rate :“for the laborers with contract system on piece rated payment, for over and above a month, the minimum monthly wage should be equivalent to the minimum wage rate at the said company” (Minister of Labor Regulation No. Per. 01/MEN/1999) Chapter 15, verse 1.

Although the term homeworkers is not specifically mentioned, this verse means a lot to them. Consequently, other rights as workers should be applied to the home laborers including social security. This has been seriously undertaken with the promulgation of implementing regulation No. Kep.150/Men/1999, a Decision Letter of the Manpower Minister regarding operation of Social Security Program for Daily Paid Workers, and contract laborers and certain time agreement.

Subcontracted homeworkers making wicks for traditional ovens in Malang

Homenet Indonesia will work based on these rules, as these are not nullified by Workers Law No. 13/2003. As for the self-employed workers, they are supposed to be covered by social security using Law No. 3/1992, regarding Workers Social Security, wherein Chapter 3 verse 2 says: “Every worker has rights to obtain worker social rights.” The mechanism for implementation is organized by and under the responsibility of PT Jamsostek (Workers’ Social Security Limited Enterprise). However, it is not readily available to them because in the same law, Chapter 4, verse 2 states : “Workers Social Security Program for workers who do work outside working relations will be regulated further under a Govern-ment Regulation.”

So far, there has not been any regulation as such stipulated by the Government. For Home-net Indonesia this is also an area for continued advocacy work.

Conclusion

Although technically, homeworkers are not specifically mentioned by the laws, Homenet Indonesia claims that these laws can be interpreted to cover the workers or laborers in the putting out system. However, a lot still has to be done, particularly in advocacy work among various stake holders to make social protection in general, and social security in particular, a reality for the homeworkers.

Important also is the question of : “Who is the employer?” as in most cases, the employer is invisible to the homeworkers and can easily deny any responsibility to them.

For the self-employed workers, the advocacy should be directed at the drafting and stipulation of a social security program for workers outside the working relations defined in Law No. 3/ 1992, chapter 4, verse 2. In the meantime, to fill the gap, indigenous social protection schemes should be promoted.