Observation (CEACR) - adopted 2023, published 112nd ILC session (2024)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Indonesia (Ratification: 1957)

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The Committee notes the observations of the International Organisation of Employers (IOE), received on 1 September 2023 concerning the discussions that took place at the Conference Committee on the Application of Standards with respect to the application of the Convention. The Committee further notes: (i) the observations of the Employers’ Association of Indonesia (APINDO) received on 31 August 2023; (ii) the joint observations of the Confederation of Indonesian Trade Unions (KSPI), the Confederation of All Indonesian Workers’ Union (KSPSI) and the Indonesian Trade Union Prosperity (KSBSI), received on 31 August 2023; and (iii) the observations of the International Trade Union Confederation (ITUC) received on 27 September 2023. All of the above noted observations refer to the matters addressed below.

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 111th Session, June 2023)

The Committee notes the discussion that took place in the Conference Committee on the Application of Standards (hereinafter the Conference Committee), in June 2023 concerning the application of the Convention. The Committee observes that the Conference Committee noted with deep concern the significant gaps in law and practice regarding the protection against anti-union discrimination, the scope of collective bargaining permitted under the law, the promotion of collective bargaining, and interference in free and voluntary collective bargaining with respect to the Convention. The Conference Committee further urged the Government to: (i) review the Law on Job Creation in consultation with the social partners and adopt without delay the amendments necessary to bring that law into compliance with the Convention; (ii) ensure in law and practice that there is no interference of employers or government officials in a voting procedure of trade unions in accordance with Article 2 of the Convention; (iii) ensure that unilateral recourse to compulsory arbitration as a way to avoid free and voluntary collective bargaining is employed only in very limited circumstances and ensure its use does not impede the right of trade unions to freely organize their activities; (iv) promote collective bargaining, and provide information to the Committee of Experts on the measures taken in this regard as well as on the results achieved, including the number of collective agreements specifying the sectors of activity concerned; (v) ensure that the rights under the Convention are guaranteed for workers in all the zones, equivalent to export processing zones, where export products are produced, and provide information to the Committee of Experts on the trends and number of collective agreements in force in these zones; (vi) prevent any act of violence and ensure, in law and practice, adequate protection of individuals for their legitimate exercise of their rights under the Convention, including through effective and expeditious access to justice, adequate compensation as well as the imposition of effective and sufficiently dissuasive sanctions; (vii) provide to the Committee of Experts statistics on the number of complaints of anti-union discrimination and interference filed, the number of complaints brought before the courts, as well as any remedies and sanctions imposed and the average duration of proceedings under each category; and (viii) take decisive and effective measures to promote a climate of non-violence, as well as constructive social dialogue and labour relations at all levels. The Committee observes that the Conference Committee concluded by requesting the Government to avail itself of ILO technical assistance with a particular focus on labour law reform, including the Job Creation Law, and with the full involvement of the social partners so as to ensure full compliance with the Convention’s obligations.

The Job Creation Law. In respect of the tripartite review of the law and its regulations, the Committee notes that, according to the Government: (i) Law No. 11 of 2020 concerning Job Creation had been revoked and replaced with a Government Regulation in Lieu of Law (Perppu), No. 2 of 2022, which was later enacted into law as Law No. 6 of 2023; (ii) discussions were held across 18 regions to gather inputs on Government Regulations Nos 35 and 36 of 2021 implementing the Job Creation Law; and (iii) the said discussions covered all provinces and were attended virtually by all stakeholders, including workers’ and employers’ organizations. The Committee further notes in this regard APINDO’s indication that the Government had engaged with its members to provide information on and receive inputs with respect to the Law on Job Creation. As concerns the abovementioned laws, the Committee notes that the Job Creation Law’s validity was upheld by the Constitutional Court in October 2023 and that Government Regulation No. 36 of 2021 on wages was enacted as Government Regulation No. 51 in November 2023. In respect of these developments, the Committee notes with concern the KSPI, KSPSI and KSBSI allegations that although they constitute the nation’s largest workers’ organizations, they had not participated in the consultations referred to by the Government and were not consulted or involved in the determination of the composition of the National Tripartite Council (LKS tripartite). Additionally, the Committee notes with regret that the technical assistance proposed by the Office with regards to the mentioned consultations on the Government Regulation could not take place.

The Committee notes moreover that the Indonesian unions and the ITUC continue to raise several concerns with respect to the Job Creation Law, in particular that it: (i) exposes certain categories of workers to greater risk of anti-union discrimination; (ii) restricts the scope of collective bargaining, especially for workers in micro and small enterprises (MSEs); and (iii) undermines collective bargaining by removing many protective regulations regarding the use of fixed-term contracts and outsourcing. In light of these allegations and bearing in mind the conclusions of the Conference Committee, the Committee requests the Government, in full consultation with the social partners,to carefully monitor the impact of the Job Creation Law and its attendant regulations, with a view to ensuring the full application, in practice, of the Convention. The Committee requests the Government to provide detailed information in this respect.

Article 1 of the Convention. Adequate protection against acts of anti-union discrimination. The Committee previously requested the Government to provide statistics on the number of complaints of anti-union discrimination and interference filed, the number of complaints brought before the courts, as well as any remedies and sanctions imposed and the average duration of proceedings under each category. The Committee notes the information supplied in this regard, particularly the list of complaints submitted to the Ministry of Manpower regarding alleged violations of freedom of association. As regards complaints of violations of freedom of association handled by labour inspectors, the Government indicates that: (i) in 2020, one case was resolved by a decision of the Tangerang High Court resulting in two convictions; (ii) no cases of violations of freedom of association were recorded in 2021; and (iii) two cases were resolved through mediation, and one through bipartite negotiation in 2022.

The Committee notes the very small number of complaints reported by the Government, particularly in view of the size of the country’s workforce. The Committee also notes the conclusions of the Conference Committee highlighting the existence of significant gaps in law and practice regarding the protection against anti-union discrimination, the Government’s acknowledgment of the concerns raised by trade unions in this respect, as well as its indication that it would continue to pay attention to this important matter and receive the Office’s technical assistance as appropriate. Based on the above, the Committee requests the Government to review, in full consultation with the social partners concerned, the existing system of protection against acts of anti-union discrimination, with a view to ensuring that it establishes comprehensive protection against anti-union discrimination, including swift recourse to mechanisms that may impose sufficiently dissuasive sanctions against such acts, in accordance with Article 1 of the Convention. The Committee further encourages the Government to avail itself of the Office’s technical assistance in respect of this matter and to report on the results of the referred review.

Article 2. Adequate protection against acts of interference. The Committee recalls its longstanding comments on the need to amend section 122 of the Manpower Act, so as to discontinue the presence of the employer during a voting procedure held in order to determine which trade union in an enterprise shall have the right to represent the workers in collective bargaining. It furthermore recalls that in its previous comment, it had noted with concern the Government’s statement that it was satisfied with this provision and did not deem it necessary to amend it. The Committee regrets to note that the Government once again largely repeats the indications it had previously provided, including that the employer and the Government are merely present during the vote as witnesses and that their presence will not affect the voting. Once again emphasizing the need to ensure adequate protection against acts of interference in practice, the Committee reiterates its expectation that the Government will amend section 122 of the Manpower Act so as to prohibit the presence of the employer during voting procedures. It once again requests the Government to provide information on developments in this regard.

Article 4. Promotion of collective bargaining. The Committee had previously urged the Government to review sections 5, 14 and 24 of Law No. 2 of 2004 concerning the Industrial Relations Dispute Settlement Act (IRDS Act), to ensure that compulsory arbitration during collective bargaining can only be invoked under exceptional circumstances. The Committee notes that according to the Government, the IRDS Act promotes the resolution of disputes through the negotiation of the involved parties. Ministerial regulation No. 31/2008 requires the holding of bipartite negotiations before resorting to mediation and conciliation; should these procedures fail, the Industrial Relations Court may settle the dispute as a last resort. The Government further indicates that the arbitration procedure must be based on written agreements between the parties involved (section 32 of the IRDS Act), before repeating its previous assertion that there is therefore no strong reason to amend the above-noted sections.

The Committee notes this information and observes, additionally, that the settlement of disputes through arbitration is established by sections 29-54 of the IRDS Act. The Committee recalls, however, that sections 5, 14 and 24 of the IRDS Act allow one of the parties to an industrial dispute to file a legal petition to the Industrial Relations Court for final settlement of the dispute, if conciliation or mediation fails. The Committee highlights in this respect that the possibility for a single party to collective bargaining to submit the resolution of the dispute to the decision of a court has the same restrictive effect on the principle of free and voluntary collective bargaining as compulsory arbitration mechanisms. In this sense, unilateral recourse to a court to settle a collective bargaining process is only acceptable: (i) in essential services in the strict sense of the term; (ii) in the case of disputes in the public service involving public servants engaged in the administration of the State; (iii) when, after protracted and fruitless negotiations, it becomes obvious that the deadlock will not be broken without some initiative by the authorities; and (iv) in the event of an acute crisis. Accordingly, the Committee once again urges the Government to take measures to amend sections 5, 14 and 24 of the IRDS Act to ensure that the unilateral recourse to compulsory arbitration or to a tribunal to settle a collective bargaining process may only occur in the limited set of situations mentioned above. The Committee requests the Government to provide information on any progress in this respect.

Recognition of organizations for the purposes of collective bargaining. The Committee previously requested the Government to continue providing statistics on the number of collective bargaining agreements (CBAs) in force, specifying the sectors of activity concerned and the number of workers covered. The Government indicates in this respect that nationwide there were a total of 18,144 CBAs and provides the following information on the number of CBAs by sector: Wholesale and Retail Trade, Repair of Motor Vehicles and Motorcycles (4,086); Manufacturing Industry (3,985); Rental and Leasing Activities without Option of Labour Travel Agent (1,347); Professional, Scientific and Technical Activities (1,025); and Accommodation and Food Service Activities (889). The Committee requests the Government to continue providing statistics on the number of CBAs in force, specifying the sectors of activity concerned and the number of workers covered.

Collective bargaining at the sectoral level. The Committee previously requested the Government to also promote collective bargaining at the sectoral and regional levels and to provide information in this regard. The Committee notes the Government’s information concerning the general activities carried out to promote collective bargaining during the 2015–23 period, including trainings on negotiation skills conducted in 34 provinces. Recalling once again that collective bargaining should be possible at all levels, the Committee requests the Government to take the necessary steps to also promote collective bargaining at the sectoral and regional levels and to provide information specifically thereon in its next report.

Export processing zones (EPZs). The Committee previously requested the Government to take the necessary steps to ensure that workers in all the zones equivalent to EPZs are covered by the Convention’s guarantees, and to inform it of the progress made in the tripartite consultations on the alleged denial of the rights under the Convention to workers in EPZs. It further requested the Government to provide detailed information, including statistics, on the existing collective agreements and collective bargaining practice in the referred zones. In this respect the Committee notes that, according to the Government, 687 CBAs had been concluded in EPZs. Ashighlighted in its previous comment, the Committee requests the Government to complement the information on the number of collective agreements in force in these zones with elements on the number of workers covered and to provide information, including statistical data, on any trends observed in the coverage of the collective agreements concluded in the referred zones. Observing finally that the Government provides no information on the tripartite consultations previously referred to, the Committee requests the Government to provide information on any developments in this regard.

The Committee expects that the Government will take all the necessary measures to address the different points raised in this comment and that it will fully avail itself of the Office’s technical assistance as requested by the Conference Committee.