Photo Illustration: Workers' Struggle for Justice

The North Sumatra Manpower Office Urges a Full Evaluation of Rogue Outsourcing Companies

Indonesia [ BatikNews.Online ] — Outsourcing practices in North Sumatra have once again come under scrutiny. Violations of workers' rights are still rampant, including non-payment of compensation for contract workers, holiday allowances (THR), and leave entitlements for female workers. These conditions are seen as demonstrating the weakness of labor oversight and the suboptimal legal protection of contract workers in Indonesia.

Legal practitioner and labor observer, DR. Minggu Saragih, SH, MH, emphasized that the facts on the ground show that many outsourcing companies still ignore basic workers' rights.

"The fact is, many outsourcing companies still violate workers' normative rights, such as failing to provide compensation upon contract termination, failing to pay holiday bonuses (THR), and denying female workers the right to menstrual, maternity, and miscarriage leave. The victims are always the workers," he said.

DR. Minggu Saragih, SH, MH, is known as a legal practitioner and labor observer who actively advocates for the protection of workers' rights and the strengthening of industrial relations in Indonesia. In addition to his work as an advocate, he also serves as Head of the Department of Industrial Relations and Employment at the Indonesian Association of Law Professors and Doctors for the Sumatra Region.

In academia, he is active as a lecturer at Universitas Prima Indonesia (UNPRI Medan). Through his academic and professional activities, DR. Minggu Saragih, SH, MH, has provided numerous studies on industrial relations, labor dispute resolution, and the implementation of national labor regulations.

In addition, he is also active as a Managing Partner at the MRR & Rekan Law Office which has an office at Jalan Jamin Ginting No. 396 Medan.

Weak Supervision in the Spotlight

According to DR. Minggu Saragih, SH, MH, the rampant violations of outsourced workers' rights are due to weak oversight by relevant agencies. This is despite the fact that regulations regarding contract workers or Fixed-Term Employment Agreements (PKWT) are clearly stipulated in Law Number 6 of 2023 concerning Job Creation, Employment Cluster, and Government Regulation Number 35 of 2021.

He explained that the regulation explicitly stipulates the terms and conditions of a PKWT. If a company violates any of these terms, the employee's status can be legally changed to an Indefinite Term Employment Agreement (PKWTT) or permanent employment.

Some important provisions of PKWT include:

  • Employment agreements must be made in writing in Indonesian.
  • PKWT may not apply a work trial period or probation.
  • Contracts are only permitted for certain jobs that are temporary in nature.
  • The maximum contract period is five years including extensions.
  • The company is obliged to provide compensation money when the contract ends.

"If the contract is made verbally or the PKWT conditions are violated, the worker's status will change to PKWTT or permanent worker," he explained.

Compensation and THR Rights Are Still Often Ignored

In practice, said DR. Minggu Saragih, SH, MH, many outsourcing companies still ignore their obligation to pay compensation to contract workers.

Based on Article 61A of the Manpower Law and Government Regulation Number 35 of 2021, contract workers who have worked continuously for at least one month are entitled to receive compensation when their contract period ends.

The calculation is done proportionally. Workers with 12 months of service are entitled to one month's wages, while workers with less or more than 12 months of service are entitled to the calculation based on the length of service they have completed.

Besides compensation, another frequently encountered violation is the failure to pay holiday allowances (THR) to outsourced workers. In practice, a number of outsourcing vendors are suspected of intentionally terminating contracts before the holidays to avoid THR payments.

However, outsourcing workers still have the same rights to religious THR as other workers.

The Rights of Vulnerable Women Workers Are Neglected

Violations against female workers are also considered to be high. According to employment regulations, female workers are entitled to menstrual leave, maternity leave, and even miscarriage leave, all while still receiving full pay.

However, in practice in the field, these rights are often not granted.

"Many female workers are afraid to take their leave due to concerns that their contracts won't be renewed. This is a serious concern for the protection of female workers," said Dr. Minggu Saragih, SH, MH.

North Sumatra Manpower Office Urges Total Evaluation

Meanwhile, the Head of the North Sumatra Manpower Office, Yuliani Siregar, officially reported and urged the Indonesian Ministry of Manpower to conduct a comprehensive evaluation of outsourcing companies deemed to have violated regulations.

This step was taken following numerous reports of workers' rights violations received by the North Sumatra Manpower Office.

The North Sumatra Manpower Office has sent an official letter to the Directorate General of Industrial Relations and Social Security for Workers at the Indonesian Ministry of Manpower requesting an evaluation of problematic outsourcing companies.

A number of labor supply companies, including PKSS, also received attention in the evaluation process.

According to Yuliani, outsourcing practices that do not comply with regulations not only harm workers, but also trigger industrial relations conflicts within the company environment.

Discrimination and Social Inequality

In company operational practices, outsourced workers often experience different treatment than permanent employees, from work facilities and pay systems to career paths.

This condition gives rise to social disparities in the workplace which has an impact on decreasing worker loyalty and productivity.

In addition, the high turnover of outsourced workers is also considered detrimental to companies using the workforce because they have to continuously train new workers.

Another frequently occurring issue is the dual responsibility between the user company and the outsourcing vendor. When workplace accidents or workers' rights disputes occur, both parties often shift responsibility.

There is a need to strengthen oversight and the role of trade unions.

Dr. Minggu Saragih believes that resolving the outsourcing issue through regulation alone is not sufficient. He emphasized the importance of strengthening the Manpower Office's oversight function and the role of labor unions in safeguarding workers' rights.

According to him, the practice of violating the rights of outsourcing workers has actually been going on for a long time and is no longer a public secret.

"Usually, labor supply companies simply follow the wishes of their employer companies to maintain their contracts. Therefore, government oversight and the role of labor unions are crucial," he said.

The government itself has issued Ministerial Regulation No. 7 of 2026, which limits outsourcing practices to six specific job sectors. This policy is expected to strengthen legal protections and reduce the scope for violations of workers' normative rights.

However, observers believe that implementing the regulations remains a major challenge. Without strong oversight and strict sanctions against violating companies, outsourced workers are expected to remain the most disadvantaged parties in Indonesian employment practices . [*red]