# Presentation: 234227

## New Indonesia 

**Industrial Relation System**

- Presented by:
- Dr. Endang Sulistyaningsih - Indonesia

- Promoting Freedom
- of Association and
- the Right to Collective
- Bargaining

- IR-Indonesia

## The National Gov’t Structure – before Jan 2001

- President

- Ministers

- Department/
- Ministry

- Regional Offices
- Headed by Kakanwil

- Provincial Gov’t (27)
- Headed by Governor

- District Offices/
- Kandep
- Headed by Kakandep

- Kabupaten
- Offices (241)
- Headed by Bupati

- Municipality/
- Kotamadya (56)
- Headed by Walikota

- Central Gov’t

- Provincial Gov’t

- Sub-district/
- Kecamatan (3625)
- Headed by Camat

**The National Gov’t Structure – before Jan 2001**

- District

- Sub District

- IR-Indonesia

## The National Gov’t Structure – after Jan 2001

- President

- Ministers

- Department/
- Ministry

- Sectoral Offices
- Headed by Kadinas

- Provincial Gov’t
- Headed by Governor

- District Offices/
- Subdinas
- Headed by Kasubdin

- Kabupaten
- Offices
- Headed by Bupati

- Municipality/
- Kotamadya
- Headed by Walikota

- Central Gov’t

- Regional Gov’t

- Sub-district/
- Kecamatan
- Headed by Camat

**The National Gov’t Structure – after Jan 2001**

- IR-Indonesia

## Industrial Relation as a System

**Industrial Relation as a System**

**ACTOR 2**
**LABOR**

**ACTOR 1**
**MANAGEMENT**

**ACTOR 3**
**GOVERNMENT**

**WORK PLACE**

**Technology**

**Labor**
**Market**

**Commodity**
**Market**

**POWER DISTRIBUTION**

**Interest **

**Interest**

**Interest**

- IR-Indonesia

## Towards a Modern 

- 1945

- 1985

- 2010

- 2000

- Statutory rights are con-
- sistent with widespread
- practice. Voluntary nego-
- tiations. Conflict resolution
- is influenced by market
- conditions.

- Deregulation
- & International
- pressure

- Increasing wage employment
- Rising demands for
- representation

- Large informal sector
- Barriers to entry modern
- Sector. Controlled repre-
- sentation

- III Modern
-     Industrial
-     Relation
-     System
- II Closing the
-    gap between
-    statutory rights
-    and voluntary
-    agreements
- I  From tradition to
-    statutory rights

- Supply price of Labor
- Statutory Labor Rights
- Voice and Representation

**Towards a Modern **
**Industrial Relations System**

- IR-Indonesia

## 3 Periods of Industries

**3 Periods of Industries**

- Pre-independence up to Pres. Sukarno’s Gov’t
-        *  Plantation
-        *  Traditional agreement
- 	*  Small-scale & cottage industries
-        *  Involving mass workers’
-        *  Inward looking economic policy
- II.Under President Suharto’s Gov’ (1966-1998)
-        * Open door policy
-        * Large scale (labor intensive) industries
-        * Modern home-based industries (jewelry, leather etc)
- III.  Reformist Gov’t (1998-present)

- IR-Indonesia

## Labor Movement I

**Labor Movement I**
**Tradition to Statutory Right**

-  Freedom to Organize
-  Many trade unions which emerged under
-        the affiliation of political parties
-  Prohibited strikes
-  Produced various Labor Acts :
-        - Act 21/54: agreement between union & employer
-        - Act 22/57: dispute resolution
-        - Act 12/64: retrenchment of labor in private comp.
-  Labor movement  concerned w/ financial status,
-         well-being & working conditions

- IR-Indonesia

## Labor Movement II

**Labor Movement II**
**Voluntary Agreement & Statutory Right**

-   Small Scale & Home based  voluntary agreement
-   Indonesian Labor Relation were set up to favor
-        foreign investor (mid 1985) :
-        -  One single union
-        -  Lower wages
-        -  guarantee of a peaceful industrial climate
-  IR LABOR SURPLUS Union :
-        -  fear of dismissal
-        -  lack of interest
-        -  lack of solidarity
-        -  lack of labor leader

- IR-Indonesia

## Labor Movement II Cont.

-  IR – based on the State Philosophy (Pancasila) which
-        believe that workers & employers are interacting
-        in a “familial mode”
-  Labor Act 25/97 ( being postponed)
-        Guarantees workers the right to strike
-        (it is generally recognized that striking occurs
-        in order to pressure the company to accept
-        bargaining)

**Labor Movement II Cont.**

- IR-Indonesia

## ILO CORE CONVENTIONS

**ILO CORE CONVENTIONS**

**No.**			**Subject**			**Ratified**
_**	**__**	**__**Freedom of Association**_
- 87/1948         Freedom of Association & Protection       PD 83/1998
-                       of the Right to Organize
- 98/1949         Right to Organize & Collective Bargaining    Act18/1956
- 		 _**Forced Labor**_
- 29/1930	      Forced Labor		               1933/1950
- 105/1957      Abolition of Force Labor		             Act 19/1999
_**	**__**	**__**Child Labor**_
- 138/1973        Minimum Age				Act 20/1999 182/1999         Worst Forms of Child Labor			-
_**	**__**	**__**Discrimination**_
- 100/1951         Equal Remuneration			Act 83/1957
- 111/1958       Discrimination (Employment & Occupation)	Act 21/1999

- IR-Indonesia

## Dispute Resolution Level 1 Act 22/1957

- Workers & Employer
- (Bipartite)
- Art.2/Sec. 1

- Finished

- Unfinished

- Agreement
- Art. 2/2

- Request MOM’s Officer
- as Mediator
- Art. 3/1

- Mediator

- Level 2

- IR-Indonesia

## Dispute Resolution Level 2 

- Mediator Art.2/1

- Finished

- (Level 3)

- P4D Art.4/2

- Voluntarily
- Arbitration
-  Art.19/1,2

- P4D

- Voluntarily
- Arbitration
- (Level 3)

- Unfinished

- Agreement

**Dispute Resolution ****Level 2 **

- IR-Indonesia

## Dispute Resolution Level 3 

- Finished

- Agreement

- Unfinished

- Voluntarily
- Arbitration
-  Art.19/1,2

- Level 4

- P4D/Art 5/1

- Equate Committee
- Art. 10/1,2

- Suggestion Solution/
- Final Solution/Art. 8/2,3

- Voluntarily
- Arbitration

- P4P
- For Legal
- Solution

- Worker & Employer
- Accept Solution

- Legalize in
- Local Court

- Either/Or
- Doesn’t accept

- Appeal to P4P

**Dispute Resolution ****Level 3 **

- IR-Indonesia

## Dispute Resolution Level 4 

- P4P/ Art.12/1

- Finished

- Agreement

- Unfinished

- (Level 5)

- Equate Committee

- Worker & Employer
- Accept Solution

- Legalize Solution
- In the Local Court

- Either/Or do not
- Accept. Appeal to
- The Minister

**Dispute Resolution ****Level 4 **

- IR-Indonesia

## Dispute Resolution Level 5 

- Manpower Minister

- Use his/her
- Right to VETO

- Cancel the Decision of
- Level 4, Art. 1/17

- Doesn’t want to
- Use his/her right to Veto

- Refuse

- Decision offer

**Dispute Resolution ****Level 5 **

- IR-Indonesia

## Dispute Resolution (in short) 

- P4D

- BIPARTITE
- (30 days)

- P4P
- Decision

- P4D
- Decision

- Agreement

- Mediation
- Level
- (30 days)

- Arbitrage

- Legal aspect :
- Act 22/1957 and Act 12/1964
- Ministerial Decree
-          No. 15A/Men/1994

- VETO
- Minister

- Unfinished

- Unfinished

- Unfinished

- Agreement

- Workers & Employer

**Dispute Resolution (in short)**** **

- Final
- Decision

- IR-Indonesia

## Lessons Learned

**Lessons Learned**

-   Socialist spirit vs. Capitalist spirit
-          workers become victim  source of conflict
-   Dispute resolution
-          leaves workers in a weak position
-              - in terms of worker’s representative
-                      in tripartite body
-              - procedure for conflict resolution is
-                      very complicated
-              - Majority of workers have never had in
-                      such experience in courtroom
-   Two-sided labor policy :  valid only for formal sect.
-              - gov’t mediation process vs. freedom assoc.
-   Decentralization Spirit (start Jan. 2001)

- IR-Indonesia

## Bipartite Institution - without Union

**Bipartite Institution - without Union**

- Company

- Bipartite Ins.

- Employee

- Employer

- Membership (for company with 25-100 workers):
- 	 -  3 employee &  3 employer representative
- Organization: -  Chairperson; -  Co-Chairperson; -  Secretaries and
- 	 -  3 members
- --> 100-500 wks = 5 members; 500-1000 wks = 10 members;
-      1000-5000 wks = 12 members;  more than 5000 wks = 14 members.
- Function: - Forum for social dialogue

- Training, Polyclinic,
- Recreation Center, etc

- Model 328
- Min. Degree 328/1986

- IR-Indonesia

## Bipartite Institution - with Union

**Bipartite Institution - with Union**

- Company

- Bipartite Ins.

- Trade Union

- Employer

- Training, Polyclinic,
- Recreation Center, etc

- Membership (for company with 25-100 workers):
- 	 -  3 employee &  3 employer representative
- Organization: -  Chairperson; -  Co-Chairperson; -  Secretaries and
- 	 -  3 members
- --> 100-500 wks = 5 members; 500-1000 wks = 10 members;
-      1000-5000 wks = 12 members;  more than 5000 wks = 14 members.
- Function: - Forum for social dialogue

- IR-Indonesia

## ILO/Indonesia Country Program framework 2001-05 

**ILO/Indonesia Country Program framework 2001-05**** **

- Strategic Objectives (2 objectives out of 4):
- 1. Promote & realize standards, fundamental principles & right at work
-     *  Labor Law reforms (dispute settlement & labor protection)
-     *  Sensitization of Member of Parliament, military & policy on the
-              core labor standards
-     *  TOT on labor stand. & labor laws in the context of regional autonomy
- 2. Strengthen tripartism and social dialogue
-      * Workers’ Education in all aspect incl. OSH
-      * Strengthening trade union action on women workers and child labor
-      * Support for workers in informal sector
-      * Trade Union Participation in Social Safety Net Monitoring
-      * Training, workshops on labor standards & new legal framework
-      * Technical assistant on strategic planning for trade union & employer Ass.
-      * Capacity building for Employer Association
-      * Government & institutions of social dialogue (USA – IR project)

- IR-Indonesia

## Thank you

- IR-Indonesia