Law and Labour Market Regulation in East Asia

By Sean Cooney; Tim Lindsey et al. | Go to book overview

2

Labour law in Indonesia after Soeharto

Reformasi or replay?

Tim Lindsey and Teten Masduki


Introduction

There has been a gradual transformation in the official approach to industrial relations in Indonesia over the past twenty years; and a rush to reform since the fall of President Soeharto in May 1998 in particular. Indonesia is now undergoing a transition to democracy and, on paper, already enjoys a labour law regime that grants an impressive range of fundamental labour rights, many of which are still in dispute in some developed and most developing countries.

These include, for example, the right to organise into trade unions and the right to bargain and strike in support of claims. The law also guarantees an extensive array of minimum labour standards, including: 1 minimum wages, set by region; a formal industrial dispute resolution system; work hours restricted to seven hours per day or forty hours per work, with thirty minutes rest for each four hours worked; public holidays (twelve days paid per year); maternity leave (three months paid per year); sick leave (part salary paid for up to twelve months per year); holiday pay (minimum two weeks paid per year); overtime paid at the hourly rate plus 50 per cent for the first hour and then at double time; severance pay, with a month’s pay for every year of service, up to a maximum of four months for long service; prohibitions on gender discrimination in wages; and restrictions on employers’ rights of termination (permits required from a tripartite body involving unions, management and the Ministry of Manpower).

There is also an absolute prohibition against the dismissal of an employee on several grounds. Dismissal cannot be based on a ground which discriminates against the employee for reasons of tribe, race, marital status, sex, religion or political affiliation. Nor can it be based on various employee activities, including involvement by the employee in trade union activities, absence from work in fulfilling a civic or religious duty, or pursuing a grievance against the employer.

Indonesia has also recently ratified several key ILO Conventions, making it the first Asian state to ratify all seven fundamental Conventions, including: ILO Convention No. 87 on Freedom of Association and Protection of the Right to Organise (ratified June 1998), No. 105 on Abolition of Forced Labour (May 1999), No. 111 on Discrimination in Employment and Occupation (May 1999) and No. 138 on Minimum Age (May 1999). Convention No. 182 on the Worst Forms of Child Labour is set to be ratified soon (ILO 1999:8-9).

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Law and Labour Market Regulation in East Asia
Table of contents

Table of contents

  • Title Page v
  • Contents vii
  • Illustrations ix
  • Preface xiii
  • 1 - Labour Law and Labour Market Regulation in East Asian States 1
  • References 22
  • 2 - Labour Law in Indonesia After Soeharto 27
  • Notes 50
  • 3 - Law and Labour Market Regulation in Malaysia 55
  • 4 - The Development of Labour Law and Labour Market Policy in the Philippines 91
  • 5 - Vietnam’s Labour Market 122
  • References 153
  • 6 - Economic Reform and Labour Market Regulation in China 157
  • Notes 181
  • 7 - Taiwan’s Labour Law 185
  • 8 - Law and Labour-Management Relations in South Korea 215
  • 9 - What is Labour Law Doing in East Asia? 246
  • Index 275
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