Collective Labor Agreements

Minister of Labor and Transmigration Regulation No. PER.16/MEN/XI/2011 on the Procedures for Drafting and Validating Company Regulations and Drafting and Registering Collective Labor Agreements (“Regulation”) has been issued to improve the previous regulation, which is Minister of Labor and Transmigration Decree No. KEP.48/MEN/IV/2004 (“Decree 48/2004”) as amended by Minister of Labor and Transmigration Regulation PER.08/MEN/III/2006 (“Regulation 8/2006”).

The Regulation consists of six chapters, 33 articles, and four appendices.

Article 1 defines the terms that are used throughout the Regulation. Company Regulation (Peraturan Perusahaan – PP), as elaborated on under Article 1 (1), is a written regulation that is made by the company, and consists of work requirements and a company’s work order. A Collective Labor Agreement (Perjanjian Kerja Bersama – PKB), as elaborated on under Article 1 (2), is an agreement that is made between a registered trade union or several trade unions and a company or several companies or company association. A PKB contains work requirements, along with the rights and obligations of workers and the company.