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Labor minister to curb work agencies

Announcement follows protests by disgruntled employees in capital

Labor Minister Muhaimin Iskandar said he would close employment agencies that give workers a bad deal Labor Minister Muhaimin Iskandar said he would close employment agencies that give workers a bad deal
  • Ryan Dagur, Jakarta
  • Indonesia
  • September 28, 2012
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Labor Minister Muhaimin Iskandar said yesterday he would clamp down on employment agencies exploiting workers after thousands demonstrated outside his office calling for the government to abolish them altogether.

The government will issue a moratorium on employment agency licenses next month, he said, as it assesses which companies may be treating workers unfairly by underpaying and offering few, if any, benefits.

“I have asked for the immediate closure of outsourcing companies which are not credible, harmful and tarnished,” he told workers’ representatives yesterday.

He admitted that many companies had strayed from their mandate by underpaying workers and offering little or no benefits such as employment insurance.

Iskandar announced the measures after 10,000 workers demonstrated outside his office in Jakarta demanding that the employment agency sector be banned altogether over claims millions of Indonesians were being treated unfairly.

The government will work with workers’ representatives, employers and different state departments to create regulations that would ban agencies failing to meet the standards required.

Said Iqbal, the chairman of the Confederation of Indonesian Workers’ Union (KSPI), said the government must take tough action.

“The government needs to immediately take serious steps, formulating new regulations,” he said, adding that employment agencies should be prosecuted if they violate the law.

There are 20 million Indonesians working through agencies, according to KSPI.

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