Akta Perhubungan Perusahaan 1967 In English

6 min read Jun 23, 2024
Akta Perhubungan Perusahaan 1967 In English

The 1967 Indonesian Company Relations Act: A Comprehensive Overview

The 1967 Indonesian Company Relations Act, formally known as Law Number 14 of 1967 on Basic Provisions for Labor Relations, played a pivotal role in shaping labor relations within Indonesia. This legislation aimed to establish a framework for harmonious and productive relationships between companies and their employees, promoting industrial peace and economic growth.

Key Provisions and Concepts

The Act encompassed a wide range of provisions, addressing crucial aspects of labor relations, including:

  • Trade Union Recognition and Rights: The Act formally recognized the right of workers to form and join trade unions. It outlined the procedures for union registration and defined their legitimate activities, including collective bargaining and representation of workers' interests.
  • Collective Bargaining: The Act emphasized the importance of collective bargaining as a mechanism for negotiating terms and conditions of employment between employers and employees. It mandated the establishment of joint labor councils at the company level, providing a platform for dialogue and consensus building.
  • Industrial Disputes Resolution: The Act established a hierarchical system for resolving industrial disputes. It encouraged conciliation and mediation as primary avenues for dispute resolution, and provided for the establishment of industrial relations courts for more complex cases.
  • Employment Standards: The Act set minimum standards for working conditions, including wages, working hours, and leave entitlements. It also established provisions for termination of employment, requiring just cause and fair compensation.
  • Labor Inspection and Enforcement: The Act mandated the establishment of a labor inspection system to ensure compliance with labor laws. It provided for penalties for employers who violated the law, including fines and imprisonment.

Impact and Evolution

The 1967 Act had a significant impact on labor relations in Indonesia, contributing to:

  • Increased Unionization: The Act facilitated the growth of trade unions, providing a legal framework for their existence and activities.
  • Improved Worker Representation: The establishment of joint labor councils empowered workers to voice their concerns and negotiate collectively with employers.
  • Regulation of Employment Practices: The Act standardized employment practices, setting minimum standards for working conditions and providing recourse for workers facing unfair treatment.

Over the years, the Act has undergone several revisions and amendments, reflecting changes in the economic and social landscape of Indonesia. Notably, the 1997 revision introduced significant changes, including provisions for:

  • Flexible Employment Forms: The revision acknowledged the rise of flexible employment forms, such as part-time work and outsourcing, and introduced provisions to regulate their use.
  • Industrial Relations Dispute Resolution: The revision expanded the scope and powers of the industrial relations courts, emphasizing their role in resolving complex labor disputes.
  • Labor Standards and Social Security: The revision strengthened the provisions related to labor standards, including those related to minimum wage, working hours, and social security.

Contemporary Relevance

Despite its age, the 1967 Act remains the foundation of Indonesia's labor relations framework. It continues to shape labor-management relations, influencing the negotiation of collective agreements, resolving industrial disputes, and ensuring compliance with labor standards.

While the Act has been instrumental in fostering industrial peace and economic growth, it faces challenges in adapting to the evolving needs of a dynamic economy. Contemporary discussions focus on addressing issues such as:

  • Flexibility in Employment Practices: Balancing worker rights with the need for flexibility in an increasingly competitive global economy.
  • Wage Disparities: Addressing the gap between minimum wages and the cost of living, particularly in urban areas.
  • Social Security Coverage: Expanding access to social security benefits for all workers, including those in informal sectors.

The 1967 Indonesian Company Relations Act stands as a testament to the country's commitment to fostering fair and productive labor relations. As Indonesia navigates the challenges of a changing global economy, the Act's provisions will continue to be a subject of discussion and debate, ensuring its relevance and adaptability in the years to come.

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