Capacity Building for Employers’ and Workers’ Organizations to Promote Sound Industrial Relations

The Project aims to support work towards achieving the objectives of Indonesia’s Decent Work Country Programme for 2012-2015 on strengthening institutional capacity of employers’ and workers’ organizations to contribute to sound industrial relations according to their respective mandates and responsibilities.

Project Background

The International Labour Organization (ILO) has provided technical assistance for a number of years to the government, workers’ and employers’ organizations in Indonesia to strengthen its capacity in creating and promoting sound industrial relations and overall labour law compliance efforts in different areas of general working conditions and labour relations. This programme proposes to draw on these various and ongoing interventions in a more coherent and complementary manner that will improve the industrial relations system, while seeking a broader framework for effective social dialogue in Indonesia.

There is scope within this proposed programme to assist the government especially the Ministry of Manpower and Transmigration (MoMT), workers’ organizations especially the confederations and selected federations at the national and provincial level, and employers’ organization especially Indonesian Employers’ Organization (Apindoin building their capacities for active participation in social and labour policy formulation and debate especially on the issues of wages, working conditions through bipartite consensus as well as through effective negotiation and bargaining that leads to the protection of fundamental principles and rights at work.

In light of the above, the proposed programme would assist the MOMT, workers and employers and selected provinces to improve their capacities to strengthen social dialogue for improving industrial relations system. The project would especially assist the workers’ and employers’ organization in building the trust and create consensus on certain issues in the industrial relations.

Project Strategy

The starting point for improving overall industrial relations system in Indonesia will be building the institutional capacity of the MOMT, workers’ and employers’ organizations – particularly by strengthening their capacities in making the dialogue between the workers and management/employer, improving the quality of collective bargaining, and facilitating dialogue between the government, workers and employers.

The second component will focus on the building bipartite consensus on selected issues under the industrial relations, so that the workers’ and employers’ organizations could develop strategies and plan of action to strengthen their organizational mandate and functions. Under this second component, the programme will continue to work with the Better Work Indonesia programme and the MOMT, to assist workers, management in gaining the necessary knowledge and skills to carry out their mandates and functions effectively.

Project Objectives

The expected milestones of the project are:

  • Employers’ and workers’ organizations develop clear strategy for active participation in social and labour policy formulation and debate.
  • Employers’ and workers’ organizations develop strategies and plans of action for capacity building of their membership in selected provinces.

The Expected Outcomes:

  • Bipartite consensus on respective roles of minimum wages fixing machinery and collective bargaining from employers’ and workers’ organizations in the context of a comprehensive wage policy reform.
  • Employers’ and workers’ organizations will have better facilitation skills to negotiate collective labour agreement, and increased number of the collective labour agreements at the enterprise level and better capacity for bipartite settlement of industrial disputes.

Key Partners

  • Indonesian Employers’ Association (Apindo)
  • Trade Union Confederations in Indonesia (KSBSI, KSPI, KSPSI Reconciliation, and KSPSI Jakarta Congress

Main Activities in Indonesia

  • Organize at least two (2) provincial bipartite plus workshops inviting representatives of the wages council members to mutually agree on improvements on the setting of minimum wages, including clarifying the criteria, scope, and purpose of minimum wages;
  • Organize one (1) national tripartite forum to exchange views from workers, employers, and government on challenges with regard to wage setting;
  • Organize a Training of Trainers on Joint management negotiation skills for Apindo and trade unions; and
  • Organize at least two (2) provincial level training courses on joint union/management negotiation skills targeted to the enterprise level.