Brief Description of Employees’ and Employers’ Associations
Labour unions can be established by employees (that may have different employers), and become legally recognized upon fulfilling the conditions of (i) having reached a membership count of 10 and (ii) already submitting a letter to the local Manpower Office for their domicile containing information regarding their name, their bylaws, and their membership including their management (Article 5 and 18 of Law No. 21 of 2000 on Labour/Trade Unions (“Union Law”)). Employers may also create their own employer organisations (Article 105 of Manpower Law).
Both labour/trade unions and employer organisations must ensure that they establish partnerships, develop businesses, expand employment opportunities, and provide welfare to the workers/labourers in an open, democratic, and equitable manner (Article 102 paragraph 3 of Manpower Law).
Rights and Importance of Trade Unions
Labour/trade unions are permitted to represent the employees during industrial relation disputes with the employers, or before the relevant labour institutions. These unions may also conduct other activities as efforts to improve the welfare of employees (Article 25, paragraph 1 of Union Law). Moreover, an employer is required to sign a CLA with a trade/labour union that represents, at least, 50% of the employer’s employees.
Types of Representation
Number of Representatives
There must be, at least, 10 members in a labour/trade union. However, employer organisations have no membership requirements.
Appointment of Representatives
Any appointment of representatives of the labour/trade unions or employer organisations must follow their bylaws and be done so in a manner that is democratic. Additionally, such representatives cannot hold an important position within the company (HR, Corporate Secretary, managerial level, etc.) that may give rise to a conflict of interest (Articles 3, 8, and 15 of Union Law). Indonesian Employment Law is otherwise silent in how such bylaws should be construed and how the election process should be conducted, but specifies that the bylaws must contain clauses on:
- membership and management;
- financial sources and accountability; and
- provisions for amendments to the articles of association and/or bylaws.
(Article 11 of Union Law
Indonesian Manpower Law does not specify any rules for the appointment of representatives of employer organisations.
Tasks and Obligations of Representatives
Representatives are obligated to manage the finances of the trade/labour union as well as the financial/asset records. They must also ensure that the funds of the union are separated from theirs or the members’ (Article 32 and 34 of Union Law). In practice, any other tasks and obligations would be specified in the union’s bylaws.
Indonesian Manpower Law does not specify any tasks and obligations for the representatives of employer organisations.
Employees’ Representation in Management
Because there may be conflicts of interest as per Article 15 of Union Law, it is not advisable for management-level employees of a company (HR, Corporate Secretary, managerial level, etc.) to be part of labour/trade unions in Indonesia.
Other Types of Employee Representative Bodies
Indonesian Manpower Law also recognizes collectives of labour/trade unions known as federations, and collectives of federations known as confederations. A federation can be founded by having, at least, 5 labour/trade unions, while a confederation can be founded by having, at least, 3 federations (Article 6 and 7 of Union Law).
