Improvement of the Productivity in Selected Workplaces through Collective Bargaining

COVID-19 has changed rapidly the world of work and also exposed vulnerabilities of our socio-economic infrastructure and inadequacies of our development strategies.

Background and Justification

Indonesian economy has been hit hard by Covid-19 pandemic, which has adversely affected businesses, jobs, livelihoods, and economic activities. Health emergency that led to lock downs, closures and restrictions on mobility have disrupted the economy that was already facing challenges due to global economic slowdown. Reports of labour disputes and industrial relations problems are also emerging and are likely to increase as the economy starts reopening. Dealing with the economic and labour relations problems and finding solutions for promoting ‘better recovery’ will require collaborative approach for which social dialogue is necessary both at tripartite and bi-partite levels.

Consensus based policies are needed not only for economic recovery but also for labour market governance based on international labour standards, otherwise conflicts will affect investments, productivity of businesses and become hurdles in the recovery process. ILO’s Global experience shows that countries with well-established traditions of social dialogue (through consultations, negotiations and cooperation) have tended to address economic and social challenges better and recovered faster from crisis.

COVID-19 has changed rapidly the world of work and also exposed vulnerabilities of our socio-economic infrastructure and inadequacies of our development strategies. This is time to recover, reinterpret, and reinvigorate some aspects which could improve level of social dialogue.

One of aspects which could be recovered, reinterpreted and reinvigorated is productivity. This aspect had been interpreted as an increasing working time. Aspect of productivity can also mean finding ways to produce more output within the same time or same output within lesser time through Technological improvements, investing in better machines, better maintenance, quality of the inputs; methods and systems improvements; line balancing; and human resources’ policies.

This TOR is intended to encourage employers and workers to include issues of increasing productivity through collective bargaining. Increasing productivity was chosen since this issue was widely used as an argument by both parties in struggling for worker protection and business continuity. The ILO will cooperate with the Ministry of Manpower (Directorate of Productivity and Directorate of Employment’s Requirements) to see that there is a systematic activity to encourage social dialogue and working together on the issue of productivity.

Both the ILO and the Ministry have seen a misunderstanding regarding the concept of productivity which eventually resulted in an error in initiating company planning. This mistake often gets protests from workers. Therefore, in order to increase knowledge about productivity and link it with increased productivity of enterprises and workers, worker’s involvement is a necessity.


The objectives of this activity are following:

  1. Higher knowledge of representatives of 15 workplaces (employers and workers) on the importance of productivity issues in the collective bargaining agreement (CBA);
  2. Strengthened assistance from the Ministry of Manpower to strengthen productivity in the workplaces;
  3. Promote follow up initiatives through social dialogue among workers and employers in the workplaces in relation with improvement of productivity.