Collective Labor Agreement

Labor Agreement Collective labor agreement (“CLA”) is stipulated in Law Number 13 of 2003 on Employment (“Law No.13/2003”) and Minister of Manpower and Transmigration Regulation No.PER.16/MEN/XI/2011 on Procedures for the Making and Legalization of Company Regulations and Procedures for the Making and Registration of Collective Labor Agreements (“MOMTR 16/2011”).

Under Article 1 number 2 of MOMTR 16/2011, CLA is an agreement, as a result of discussion between worker union/labor union or some worker unions/labor unions recorded on the competent authority of manpower and entrepreneur, or some entrepreneur or enterpreneur organization which contains the requirements of work, rights or obligations of both parties.

Article 22 of MOMTR 16/2011 regulates that CLA at least contains:

  1. name, domicile and address of worker union/labor union;
  2. name, domicile and address of company;
  3. number and recordation date of worker union/labor union at the competent authority of manpower in districts/cities;
  4. the rights and obligations of entrepreneur;
  5. the rights and obligations of worker union/labor union and worker/labor;
  6. the term and the date of entry into force of the CLA; and
  7. the signature of both parties who make CLA.

CLA may not be contradictive with the prevailing laws and regulations. Article 124 paragraph (3) of Law No. 13/2003 stipulates that if the contents of CLA contradicts to the prevailing laws and regulations, the contradictive provisions are null and void and the provisions of the laws and regulations are applicable.

In one company there may only be one (1) CLA that applies to all workers/employees in the company. If the company has a branch, then master CLA is applicable in all branches of the company or derivative CLA can be made that is applicable for each branch of the company.

Master CLA contains provisions that are generally accepted in all branches of the company and derivative CLA contains the implementation of master CLA adjusted to the conditions of each branch of the company. If the master CLA has been applied in the company but a derivative CLA is necessary for the branch of the company, as long as the derivative CLA has not been agreed, master CLA is still applicable.

CLA Registration

The registration of CLA is performed by entrepreneur to the authorized institute of manpower.

Submission of the CLA registration is performed by attaching the script of CLA made in three (3) counterparts that have been signed by entrepreneur and worker union/labor union.

Submission of CLA is made using the form in Annex IV of MOMTR 16/2011. The competent official of manpower shall examine the completeness of formal requirements from format of the CLA registration submission and/or the draft of CLA and issuing decision letter of CLA registration at the latest 6 (six) business days since the application of registration is received. If requirements of the registration submission using the form is not achieved and/or the draft of CLA violates the prevailing laws, the competent official of manpower will give a note in its decision letter of registration.

Dianyndra Kusuma Hardy

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