LABOUR REFORMS

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LABOUR REFORMS PRODUCTIVITY IN INDONESIA
Focus On Industrial Relations
MINISTRY OF MANPOWER TRANSMIGRATION REPUBLIC OF
INDONESIA
By Myra M. HanartaniDirector General of
Industrial Relations and Social Security
Development
PRESENTED AT ECONOMIC ASSOCIATION OF INDONESIA
INDIA (ECAII) SEMINAR Jakarta, 28th April 2008
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MAJOR LAWS ON INDUSTRIAL RELATIONS

• Act Nr. 3 of the year 1992 on Workers Social
  Security
• Act Nr. 21 of the year 2000 on Trade Union/Labour
  Union
• Act Nr. 13 of the year 2003 on Manpower
• Act Nr. 2 of the year 2004 on Industrial
  Relations Disputes Settlement

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IR LAW REFORMS
1998
RATIFICATION ILO C.87
ACT Nr. 21 Trade Union
2000
2003
Act Nr. 13 Manpower
2004
Acr Nr. 2 IR Disputes Settlement
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INTERNATIONAL LABOUR STANDARDS

• Indonesia has ratified all ILO core conventions
• which are followings
• Convention on Forced Labour (C.29)
• Convention on Abolition of Forced Labour (C.105)
• Convention on Freedom of Association and
  Protection of the Right to Organize (C.87)
• Convention on The Application of the Principles
  of the Rights to Organize and to Bargain
  Collectively (C.98)

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Cont

• Convention on Equal Remuneration for Men and
  Women Workers for Work of Equal Value (C.100)
• Convention on Discrimination in Respect of
  Employment and Occupation (C.111)
• Convention on Minimum Age for Admission to
  Employment (C.138)
• Convention The Prohibition and Immediate Action
  for the Elimination of the Worst Forms of Child
  Labour (C.182)

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THE GENERAL PRINCIPLES

• 1. Act Nr. 3 of the Year 1992
• Compulsory for those companies employed
• minimal 10 workers
• 4 (four) Coverage Programmes
• Old Age Benefits Scheme
• Employment Accident Benefits Scheme
• Death Benefits Scheme
• Health Care Benefits Scheme

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THE GENERAL PRINCIPLES

• 2. Act Nr. 21 of the Year 2000
• Freedom of Association
• Every worker has the right to form and become a
  
• member of a trade union
• A trade union is formed by at least 10 (ten)
  workers
• A federation of trade union is formed by at
  least 5 (five)
• trade unions
• A Confederation of trade union is formed by at
  least 3
• (three) federations of trade union

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THE GENERAL PRINCIPLES

• 3. Act Nr. 13 of the Year 2003
• Freedom of Association
• Partnership Relationship
• - the Bipartite Cooperation Body
  (compulsory for
• those companies that employed 50
  workers over)
• - the Tripartite Cooperation Body
  (National.
• Provincial, and regency/municipal
  level)

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Cont

• Work Agreement
• - Work Agreement in Specified Time
  (Temporary
• Agreement/Contract period no longer
  than 2
• years and can only be extended one time
  that is
• not longer than 1 year)
• - Work Agreement in Unspecified Time
• Collective Bargaining
• - Company Regulation
• - Collective Labour Agreement

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Cont

• 3. Act Nr. 13 of the Year 2003
• Terms of Employment
• - working hours
• 7 hrs/day 40 hrs/week for 6 workdays/week
  
• 8 hrs/day, 40 hrs/week for 5
  workdays/week
• - weekly period of rest
• 1 day after 6 workdays/week or 2 days after
  
• 5 workdays/week
• - yearly period of rest
• 12 workdays after works for 12 months
  consecutively
• - a long period of rest of no less than 2
  months.

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Cont

• 3. Act Nr. 13 of the Year 2003
• Terms of Employment
• - menstruation period of rest
  female
• workers who feel pain and notify
  the
• employer are not obliged to come
  to work
• on the 1st and 2nd day of
  menstruation
• Shall be regulated in work agreement,
  Company
• Regulation or CLA

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Cont

• 3. Act Nr. 13 of the Year 2003
• Terms of Employment
• - maternity rest female workers
  are entitled
• to a 1.5 month period before the
  time that is
• estimated to give birth and
  another 1.5
• months thereafter.
• - miscarriage rest 1.5 months or
  a period of rest as
• stated in the medical statement

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Wages Policy

• Safety net /minimum wages
• 1. Decided by Governor based on Recommendation
  of Provincial
• Wage Councils and/or District Heads/Majors
• 2. Reviewed annualy
• 3. Based on decent living needs
• 4. Applied to single worker and workers with
  service periode up to
• 1 (one) year
• Negotiated wages
• - bipartite agreement ( Company
  Regulation or Collective Labour
• Agreement )

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THE GENERAL PRINCIPLES

• 4. Act Nr. 2 of the Year 2004
• Required to be resolved first through bipartite
  bargaining for consensus
• Towards a prompt, appropriate, just, and
  inexpensive settlement

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INDUSTRIAL RELATIONS DISPUTES SETTLEMENT
Mediation
Industrial Court
Bipartite
Conciliation
Supreme Court
Arbitration
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TERMINATION PROCEDURES

• Bipartite negotiation
• Should be decided by Industrial Court
• Compensation allowance for certain cases

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IR and PRODUCTIVITY
WA
INDIVIDUAL
HUBUNGAN KERJA DAN HI
CR
MACRO MINIMUM (LAWS REGULATIONS)
COLLECTIVE
CLA
RIGHTS OBLIGATIONS (both parties)
MICRO- CONDITIONAL (TERMS OF EMPLOYMENT)
Objective
WA Work Agreement CR Company Regulation CLA
Collective Labour Ageement
Sustainability of Business Workers welfare
PRODUCTIVITY
Safe work safe business
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INTERRELATED IR PRODUCTIVITY HUMAN CAPITAL
(INTELLECTUAL CAPITAL) ,SOCIAL CAPITAL
Whats ? SOCIAL CAPITAL
Is the level of trust, communication, and
cooperation
COMMUNICATION
TRUST
COOPERATION
COMPETITIVENESS
I R
PRODUCTIVITY
Level of trust, communication, and cooperation
within company will bring about the effectiveness
of work performance among workers and employer.
It creates sound and harmonious IR as well as
productivity and the sustainability of
competitiveness.