Observation (CEACR) - adopted 2024, published 113rd ILC session (2025)

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

The Committee notes the observations received on 17 September 2024 from the International Trade Union Confederation (ITUC), addressing issues dealt with by the Committee in this comment.

The Job Creation Law. In its previous comments, the Committee noted the 2023 conclusions of the Committee on the Application of Standards of the International Labour Conference (hereinafter the Conference Committee) requesting the Government to adopt without delay the amendments necessary to bring the Job Creation Law into compliance with the Convention, as well as the allegations made by the Confederation of Indonesian Trade Unions (KSPI), the Confederation of All Indonesian Workers’ Union (KSPSI) and the Indonesian Trade Union Prosperity (KSBSI) and the ITUC concerning the increased vulnerability of workers to anti-union discrimination and the undermining of the use of collective bargaining as a result of the Job Creation Law. The Committee notes that in its 2024 observations, the ITUC alleges that the Job Creation Law is having a disastrous impact on freedom of association and collective bargaining and that, in particular, workers are more vulnerable to dismissals and non-renewal of contracts when they attempt to join or form a union. The Committee also notes the concluding observations of the Committee on Economic, Social and Cultural rights (CESCR) issued on 14 March 2024 concerning the implementation by Indonesia of the International Covenant on Economic, Social and Cultural Rights. The Committee notes that the CESCR, after expressing its concern that the Job Creation Law negatively affects workers’ rights, recommended that the Government review and amend it, in order to, inter alia, ensure the meaningful participation of trade unions in sectoral minimum wage decisions and regulate the use of temporary contracts.

The Committee notes that the Government limits itself to: (1) referring once again, to the adoption of Government Regulation No. 51 of 2023 concerning wages and to the consultation process that preceded it; and (2) expressing its readiness to benefit from ILO technical assistance in order to strengthen capacities concerning tripartite consultation.

Finally, the Committee notes Decision No. 168/PUU-XXI/2023 of the Constitutional Court dated 31 October 2024, which partially invalidates certain provisions of the Job Creation Law and requires the adoption of a new law within two years. In the context of the Convention, the Committee observes that the Court’s decision addresses, inter alia, the need to give a greater role to wage councils in setting minimum wages, particularly at the sectoral and regional levels, and that it emphasizes the role of collective bargaining with trade unions in improving wages and working conditions. Recalling the Conference Committee conclusions requesting the Government to adopt without delay the amendments necessary to bring the Law on Job Creation into compliance with the Convention, the Committee expects that the Government, in full consultation with the representative social partners, will take the opportunity of the revision of the Job Creation Law required by the Constitutional Court to ensure that the content of the revised Law and its implementing regulations contributes effectively to the protection against anti-union discrimination and the promotion of collective bargaining in accordance with the Convention. The Committee requests the Government to provide any information in this regard. In line with the conclusions of the Conference Committee, the Committee hopes that the Government will avail itself of the Office’s technical assistance.

Article 1 of the Convention.Adequate protection against acts of anti-union discrimination. In its previous comment, on the basis of the very low number of complaints of anti-union discrimination reported by the Government and the conclusions of the Conference Committee highlighting, in particular, the existence of significant gaps in law and practice with regard to protection against anti-union discrimination, the Committee requested the Government to review the existing system of protection against acts of anti-union discrimination, in order to ensure that full protection is provided against anti-union discrimination, including rapid remedies likely to impose sufficiently dissuasive sanctions against such acts. The Committee notes with regret that the Government has not provided information in this regard. It also notes the ITUC’s observations alleging the greater vulnerability of workers to anti-union breaches of employment contracts in the context of the implementation of the Job Creation Law. On the basis of the above, the Committee requests the Government, after consulting the representative social partners, to take the necessary measures, including of a legislative nature, to: (i) establish rapid and effective remedies and mechanisms for imposing dissuasive sanctions against acts of anti-union discrimination; and (ii) in particular prevent and sanction acts of anti-union discrimination, including discriminatory non-renewal of contracts, which may affect workers on fixed-term contracts. 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 progress achieved.

Article 2. Adequate protection against acts of interference. The Committee recalls once again its long-standing comments on the need to amend section 122 of the Manpower Act to prohibit the presence of the employer during a voting procedure to determine which trade union in an enterprise will have the right to represent workers in collective bargaining. The Committee notes with regret that once again, the Government essentially repeats the information previously provided, including that the employer and the Government are only present at the vote as witnesses and that their presence does not affect the vote. Emphasizing once again 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 to prohibit the presence of the employer during the voting procedure and to provide information on developments in this regard.

Article 4.Promotion of collective bargaining. In its previous comments, the Committee urged the Government to take measures to amend sections 5, 14 and 24 of the Labour Disputes Settlement Act to ensure that unilateral recourse to compulsory arbitration or a court to settle a collective bargaining process may only take place: (1) in essential services in the strict sense of the term; (2) in the case of disputes in the public service involving public servants engaged in the administration of the State; (3) when, after protracted and fruitless negotiations, it becomes obvious that the deadlock will not be broken without some initiative by the authorities; and (4) in the event of an acute crisis. The Committee notes the Government’s indication that, in 2023, mediation successfully resolved 8,236 of 10,297 industrial relations disputes (or 79.9 per cent) and, between January and March 2024, 598 out of 1,009 of those disputes (or 59.2 per cent). While taking due note of this information, the Committee notes with regret the Government’s indication of its intention to ensure that the current procedures for recourse to compulsory arbitration are maintained for all labour disputes. The Committee recalls once again that arbitration imposed by the authorities at the request of only one of the parties is, in general, contrary to the principles of collective bargaining and that the possibility for a single party to collective bargaining to submit the settlement of a labour dispute to the decision of a court has the same restrictive effects on the principle of collective bargaining as compulsory arbitration mechanisms. Consequently, the Committee once again reiterates its expectation that the Government will take steps to amend sections 5, 14 and 24 of the Labour Disputes Settlement Act to ensure that unilateral recourse to compulsory arbitration or a court to settle a collective bargaining process may only take place in the above-mentioned situations. The Committee requests the Government to provide information on any progress made in this regard.

Recognition of a trade union as a collective bargaining partner.Collective bargaining in practice. The Committee notes the ITUC’s comment on the excessively restrictive nature of the 50 per cent representativeness threshold required by the legislation in order to enter into negotiations. The Committee recalls that in previous comments it had noted, on the basis of the legislation (section 119 of the Manpower Act) and the Government’s indications, that: (1) trade unions that do not reach the required percentage of affiliates but that receive more than 50 per cent support in a vote of all the workers in the enterprise may enter into negotiations; (2) trade unions may form a coalition to reach the above-mentioned thresholds. The Committee further notes the Government’s indication that in March 2024 there were a total of 15,940 collective agreements throughout the country covering 3,901,644 workers. Noting that the total number of collective agreements appears to have fallen significantly since the Government’s last report, from 18,144 to 15,940, the Committee requests the Government to indicate the possible reasons for this decrease.Recalling that the representativeness thresholds required to initiate collective bargaining must not be such as to hinder the promotion of collective bargaining, the Committee also requests the Government to initiate consultations with the social partners with a view to revising section 119 of the Manpower Act and making the conditions of access to collective bargaining more flexible.The Committee requests the Government to provide information on any progress made in this regard. Finally, the Committee requests the Government to continue to provide statistics on the number of collective agreements in force, specifying the sectors of activity concerned and the number of workers covered.

Collective bargaining at the sectoral level. In its previous comments, the Committee requested the Government to take the necessary measures to promote collective bargaining at all levels, including at the sectoral and regional levels. The Committee notes that the Government : (1) states that sectoral collective agreements present a challenge due to the varying capacities of these companies and their workforce sizes; (2) emphasizes the importance of collective bargaining at the company level, considering the differences in capacities and business scales; and (3) welcomes the collaborative offer from the ILO to explore initiatives that promote the development of collective bargaining tailored to Indonesia’s specific conditions. While taking due note of these considerations, the Committee recalls that, according to the Convention, collective bargaining should be possible at all levels and that in practice the issue is essentially a matter for the parties, who are in the best position to decide the most appropriate bargaining level including, if they so wish, by adopting a mixed system of framework agreements supplemented by local or enterprise level agreements (see 2012 General Survey on the fundamental Conventions, paragraph 222). The Committee therefore trusts that the Government will take the necessary steps to promote collective bargaining at all levels, including at the sectoral and regional levels and hopes that it will seek the technical assistance of the Office in this respect. The Committee requests the Government to provide any relevant information.

Export processing zones (EPZs). The Committee notes the Government’s indication that, in 2022, there were 435 active collective agreements and 188 trade unions representing workers in EPZs but does not indicate the number of workers covered by the applicable agreements. The Committee therefore requests the Government to continue providing information on the number of collective agreements in force in EPZs, indicating the number of workers covered, as well as information, including statistical data, on any trends observed in the coverage of collective agreements concluded in these zones.

The Committee also requested the Government to provide information on the tripartite consultations on a denial of the rights guaranteed by the Convention to workers in EPZs alleged by the ITUC, KSBSI and KSPI. The Committee notes the Government’s reference to Regulations No. 12 of 2020 and No. 40 of 2021, establishing two dedicated tripartite bodies: (1) for consultations on wages and (2) for communication, consultation and deliberation on labour relations issues within EPZs. The Committee notes however once again the absence of information on specific consultations on the alleged denial of the rights recognized by the Convention to workers in EPZs. The Committee therefore once again requests the Government to provide information on the holding of such tripartite consultations and on any relevant outcome.

The Committee expects that the Government will take all necessary measures to address the various points raised in this comment and that it will fully seek the technical assistance of the Office, as requested by the Conference Committee.