Building consensus on the use of non-permanent contract

15 Jul 2020

Better Work estimates that almost half of the 400,000-strong garment sector workforce in Indonesia is employed under a non-permanent contract. These contracts, known locally as ‘PWKTs’, were originally conceived to provide factories with support for temporary work requirements stemming from specialised production, business expansion plans, or the creation of new products.

To help the garment industry take advantage of this provision, Better Work Indonesia, in partnership with the MoM, has formulated a set of guidelines that aim to provide a clearer understanding of existing legislation and reduce industry dependence on non-permanent contracts. These guidelines are the result of facilitated collaboration between employers, unions, brand partners, and the government and are used by Better Work Indonesia to provide practical guidance
to factories. Furthermore, we have provided support to the Ministry by disseminating the guidelines to more than 200 labour inspectors and mediators in West and Central Java.

They are now being widely used by industry stakeholders, including factories, brands, and union officials, leading to consensus on issues related to the employment of contract workers. The success of the guidelines has also led buyers and stakeholders from other industries (e.g. the palm oil sector) to adopt similar frameworks adapted to their contexts.

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