The Global State of Workers' Rights - Indonesia

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Since Indonesia ratified all core labor conventions of the International Labour Organization (ILO) in 1998, the number and penetration of labor unions has increased significantly. Approximately 90 national unions, 20 local unions, and 2,000 company-level unions are currently registered, though many exist in name only. The labor community remains fragmented and poorly organized with little bargaining power, and laws are weakly enforced. The roughly 2.6 million household workers and 4.5 million migrant workers in Indonesia are excluded from the labor laws altogether. A new law on household workers that was supposed to be presented to the parliament in 2008 had not been completed by the end of 2009. The government signed the International Convention on Migrant Workers in 2004, but has announced that it will not ratify the convention until 2011. The ILO notes that provisions outlined in Conventions 87 and 98 concerning the right to organize and freedom of association are still not fully implemented in Indonesian labor laws.

Workers can join independent unions, bargain collectively, and, except for civil servants, engage in strikes, provided that employers are informed in advance of an intention to strike. Civil servants are able to organize but are more closely regulated. Unions may be local or national, and may organize across sectors. The principles of labor unions may not conflict with the 1945 constitution or the pancasila national ideology. Unions are required only to register with the Ministry of Manpower and Transmigration in order to represent members and bargain collectively, according to the 2000 Trade Union Act. However, it is estimated that 80 percent of union workers face discrimination. In addition, the right to organize is sometimes violated by private companies.

Worker rights are outlined in the Manpower Law of 2003. The law attempts to provide extra unemployment protection to workers by requiring large termination payouts from employers. As a result, many companies rely on contract labor, which now accounts for approximately 60 percent of formal-sector employment. Contract workers do not receive the benefits that come with full employment. In addition, the formal sector comprises only 38 percent of the national labor force of over 111 million people. According to the Friedrich Ebert Stiftung, only 10 percent of formal-sector workers are organized into real unions.

Decentralization in 2001 transferred responsibility for setting minimum wages to local authorities, who often collude with employers. However, the arrangement also allows unions to wage local campaigns to establish new minimum wages.