Disputing labour dispute settlement: Indonesian workers' access to justice.

• Author: Tjandra, Surya
• Position: Access to Justice in Indonesia

1. Introduction

   This article is about labour and union strategies to seek justice through law in Indonesia after the start of Reformasi (reform) in 1998, which marked the end of the authoritarian Soeharto regime and the beginning of democracy. It discusses a case that occurred in a Japanese company, PT King Jim Indonesia (KJI), located in Pasuruan district, East Java province. The General Manager of KJI was convicted for violating trade union rights under the Trade Union Act of 2000 and jailed for one and a half years because he unlawfully dismissed four trade union leaders of the Indonesian Metal Workers Federation (FSPMI). Despite many obstacles, the workers successfully used the available legal repertoire to bring their grievances to a forum and to obtain justice, at least from their own perspective. These workers in their own way have created opportunities for demanding more accessible and clear labour laws. Such a case is unprecedented since it is the first time an employer has actually been jailed under the Act, which also reflects the dynamics of the problematic labour law dispute settlement mechanism in the country.

   The discussion is informed by the work of Felstiner et al. (1981) with the transformation perspective which sees disputes as social constructions. Drawing upon Karl Marx's famous quote on the relationship between men and history, Felstiner et al. write: 'people make their own law, but they do not make it just as they please.' (1981: 633). By this they insist upon the importance of looking at disputes as social processes, whereby individuals and disputants play important roles in their efforts to make their grievances heard and properly treated. They are the 'creators of opportunities' rather than merely 'records' or 'rates' of socially constructed law and legal activities. As they point out: 'Studying the emergence and transformation of disputes means studying a social process as it occurs. It means studying the conditions under which injuries are perceived or go unnoticed and how people respond to the experience of injustice and conflict.' (Felstiner et al., 1981: 632).

   Such a theoretical position is particularly important from an access to justice perspective (see Bedner and Vel in this volume), since it helps focus on the people, notably the poor and disadvantaged--in this case industrial workers, and their ability to make their grievances heard. By this we are able to see how these workers developed their knowledge about their rights on the basis of their own experience, how they transformed their feelings of injustice into grievances and strategies, and what were the roles of the intermediaries involved. These processes are closely connected to the later choice of forums available (see the Rolax scheme Bedner and Vel This Volume). This constitutes an important step towards achieving justice.

   As we shall see with the case study, the article concerns two types of injustices: violation of trade union rights, and unlawful dismissal of the workers and union leaders. The first relates to particular provisions under the Trade Union Act No. 21/2000 which gives legitimacy and protection to unions in Indonesia; and the latter relates to the labour dispute settlement mechanism under the Industrial Relations Dispute Settlement Act No. 2/2004 which establishes a new system for labour dispute settlement under the judiciary through the Industrial Relations Court, while maintaining government involvement through the branch of Manpower Offices at the district level. These two systems under the two laws are inter-related, yet they are also problematic and have resulted in growing criticisms from the workers and unions concerning their effectiveness in resolving problems.

2. The Historical Context

   As I have discussed in more detail elsewhere (Tjandra, 2008), the economic history of post-independence Indonesia has been characterised by strong state intervention (see also Jilberto and Mommen, 1996; Siddique, 1989). In the early phase of the Republic, the Indonesian state was deeply involved in economic activities due to the absence of a significant domestic bourgeoisie capable of replacing the structures of the colonial Dutch economy or of guiding industrialisation after the taking-over from the Dutch in 1949 (Robison, 1986). The subsequent nationalisation of the former Dutch firms in 1957 and the rise of the authoritarian 'New Order' state in 1965 under President Soeharto further strengthened state domination of economic life. The result was corporatist industrial relations backed up by a strong state, which contained the workers within the economic development framework (Tjandra, 2002; Caraway, 2004; Ford, 1999; Fox, 1997).

   It is important to note that the New Order state was established with the bloodbath of the Communist and the Left (1), and enabled the state planners to be insulated from the demands of organised labour when charting development strategies (Hadiz 1997) (2). Under the New Order regime unions were systematically suppressed with no influence in the policy making processes for economic development (Hadiz, 1997, Deyo, 2006). Although Indonesian workers inherited a series of protective legislation enacted in the early years after independence in 1945, they were not implemented in practice, but simply sidelined by government decrees. The Collective Labour Agreement Act No. 21/1954, for example, respected multi-union existence and encouraged collective bargaining between unions and employers by guaranteeing the rights of unions to bargain collectively, but in practice such provisions were annulled by Minister of Manpower regulations that made it almost impossible to have unions outside the government sanctioned SPSI (All-Indonesia Workers Union) and imposed complicated requirements for unions before they could actually negotiate with the employers for collective agreements (3). Relying on economic development and the military, Soeharto did not see any need to change the law where it could simply be ignored, while the unions had been tamed with the existence of SPSI as the only union allowed to operate.

   The state's role changed dramatically after the Asian financial crisis hit Indonesia in 1997. The crisis fractured the foundations of the New Order state, and gave birth to Reformasi. Indonesian labour law was then transformed from a corporatist model, backed by a strong and powerful state, to one that is mainly based on market principles, even if the development of a market-based economy had already begun in the early 1980s (Feridhanusetyawan and Pangestu, 2003; Lee, 2003; Rosser 2002) (4). Some examples of the changes were the intrusion of the flexible labour market concept into the law, which made it easier to hire and fire workers, and the decreasing role of government in handling disputes with the introduction of the Industrial Relations Court. Such changes, demanded by business and international financial institutions such as the International Monetary Fund and the World Bank, have arguably weakened the already weak unions' bargaining position (Tjandra, 2008, see also Tjandraningsih and Nugroho, 2008).

   Although Reformasi has brought some improvements concerning the law regarding trade unions and workers' participation, the unions have generally been in a continuously weak position. The democratisation process came at the same time as the national economic crisis, thus there was not much to gain for the workers anyway. The combination of the destruction of organized labour during the New Order era and the inability of the unions to overcome the legacy of the systematic repression of Soeharto's rule ensured the continuing relative weakness of the trade union movement as a whole. In a situation like that, reforms facilitating freer union formation did not strengthen unions but increased union fragmentation instead. The initial labour law reforms following the neo-liberal economic reforms have been a reflection of this condition, with insufficient consideration of the need to strengthen enforcement mechanisms which remained very vague.

   Reformasi

   Although the situation has improved compared to the three decades of union suppression under the New Order (Hadiz, 1997), stories abound concerning workers who formed unions only to be denied their rights to collective bargaining by the employer and to be confronted with intimidation of their members (Saptorini and Tjandra 2005, KSN 2009) (5). Despite the enactment of the Trade Union Act No. 21/2000, whose provisions protect trade union officials from dismissal where it takes place as a result of the employers' anti-union conduct, this still happens with some frequency. The state's recognition of unions' existence is not necessarily followed by employers' acceptance of union involvement in dealing with day to day issues in the workplaces.

   Since the reform and relaxation of union formation regulations in 1998, unions have grown in numbers from only one in early 1998 to around 100 national federations registered in late 2009, including four national confederations (6), and thousands of non-nationally registered plant level unions. Indonesia has also become the first country in Asia Pacific to ratify all core conventions of the International Labour Organization, including Conventions No. 87 and 98 on the rights to associate and collective bargaining. However, the level of unionization is relatively low with only 6-7 per cent union density in the formal sector, with numbers decreasing every year due to reasons such as the massive replacement of permanent workers, who were traditional members of the unions, by fixed-term contract or outsourcing workers (7). Fragmentation among unions and lack of a strong central body also contribute to the unfavourable position of unions since it weakens their bargaining position with both the state and employers (Tjandra, 2007).

   Nonetheless, on paper Indonesian trade unions have a basis to pursue their...