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Maximize business synergy by understanding employment relations
Jakarta, May 5, 2017
On Friday, May 5, 2017, we successfully presented a Labor Law Workshop with the topic of General Concept and Character of Indonesia Labor Law and Employer’s Role in Creating Conductive Work Place Conditions. Our Speaker was one of our Senior Advisors and a well-known Labor Law expert and lecturer, DR. Bambang Supriyanto, S.H., M.H.
The enthusiasm for labor law issues was apparent from the very beginning of the workshop and from the lively interaction at the Q&A session. The attendees included top management, managerial level employees, human resources and legal department counsel. we gleaned that labor law issues often occur, especially in foreign companies that are not investing in Indonesia directly. As for some examples of the issues brought up at the workshop, here a few representative ones:
Q: What if my company hires or engages an employee without a written contract?
A: Article 57 paragraph (2) Law No. 13 of 2003 concerning Manpower (“Law No. 13 of 2003”) stipulates that if an employment agreement (for a specified time) is not made in writing, then by law it shall regarded as an unspecified term employment agreement.
Q: When to pay religious holiday allowance if in our company we have employees of different religions?
A: Article 5 paragraph (1) Minister of Employment Regulation No. 06 of 2016, concerning Religious Holiday Allowance (“PERMENAKER No. 06 of 2016”) provides that a religious holiday allowance is given once a year in accordance with each employee’s holiday allowance. Moreover, paragraph (3) in the same Article provides that a religious holiday allowance is given in accordance with each employee’s religious holiday, unless specified otherwise in accordance with the employer's agreement with the employee, which shall be stipulated in the employment agreement, company regulation or collective labor agreement. Our point of view is based on best practices; usually a company sets up a uniformi religious holiday allowance adapted to the majority religion of the employees in the company, which shall also be provided in the employment agreement and/or company regulation.
Our aim in providing this labor law workshop is to encourage companies, especially foreign direct investment companies, in Indonesia to have a thorough understanding of Indonesia’s labor law and regulations which directly pertain to daily work activities (relations between employers and employees). This workshop does not conﬁne itself to an analysis of the law, but also provides an understanding of the concepts and policy reasoning and the practical dynamics of managing Indonesian employees.
Thus, this is a heads-up for the next labor law workshop that will be presented on June 2, 2017 with the same venue, Schinder Business Center, located at Noble House Building 27th Floor, Mega Kuningan, South Jakarta.