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Indonesia is the largest economy in Southeast Asia and is a member of the G-20 major economies. Annual growth averaged 5.8 percent for the 10 years through 2013. Accompanying this economic growth, and perhaps encouraging it, Indonesia has seen gains in its equality rankings. In the 2013 Human Development Report prepared by the United Nations Development Program, Indonesia ranked 121st out of 187 countries and territories. That was an improvement on its ranking of 124th the previous year. The Gender Inequality Index ranked Indonesia 106th out of 148 countries. The UN report noted that female participation in the Indonesian labour market is 51.2 percent compared to 84.2 percent for men.
Indonesia does not have an overarching anti-discrimination law. Rather, a patchwork of laws and sector-specific regulations prohibit discrimination and encourage equality. The relevant laws include:
The 1945 Constitution is the basis for the government of Indonesia and it carries the highest legal authority. Article 27 of the 1945 Constitution states that: (i) all citizens shall have equal status accorded by law and the government, and are obliged to respect the law and government without exception; and (ii) each citizen shall be entitled to work and to have a reasonable standard of living.
The prevailing Indonesian labour laws reflect anti-discrimination principles. Each employee shall have equal opportunity without discrimination to obtain work and shall be entitled to equal treatment from the employer without discrimination (Articles 5 and 6 of the Labour Law). The Labour Law stipulates that termination of an employment relationship shall not be permitted if it is based on the ideology, religion, political inclination, ethnic group, race, social group, gender, physical condition or marital status of the employee (Article 153 (i) of the Labour Law).
To ensure the protection of employees’ rights and to prohibit discrimination, Law No. 21 of 1999 ratifies International Labour Organization (ILO) Convention No. 111 concerning Discrimination in Respect of Employment and Occupation, and Law No. 80 of 1957 ratifies ILO Convention No. 100 concerning Equal Remuneration for Men and Women for Work of Equal Value.
Strengthening the equal remuneration regime, Article 3 of Government Regulation No. 8 of 1981 regarding Protection of Wages (GR 8) states that in determining an employee’s wage, an employer may not discriminate between male and female workers who perform work of equal value.
Article 14 of Law No. 4 of 1997 on Disabled People requires an employer to employ a minimum of one disabled person for every 100 people it employs. The disabled employee must meet the applicable work requirements and qualifications for the given position.
High-technology companies must employ one disabled person regardless of the number of employees (i.e., even if they employ fewer than 100 people).
The elucidation of Law No. 4 of 1997 states that disabled employees are entitled to equal treatment without discrimination including, without limitation, as to wages, title and position.
Law No. 40 of 2008 prohibits discrimination on the basis of race or ethnicity in the civil, political, economic, social and cultural fields. Race is defined as a group of people based on physical characteristics and lineage. Ethnic group is defined as a group of people based on faith, norms, customs, traditions, linguistic norms, history, geography and kinship.
The above laws provide the main anti-discrimination framework for Indonesia. Filling out this framework and providing protections on issues from termination to menstruation leave are a hodgepodge of regulations and provisions.
When conducting interviews and background checks, employers must be guided by the broad provisions of Articles 5 and 6 of the Labour Law, which provide that employees shall have equal opportunity without discrimination to obtain work, and shall be entitled to equal treatment from the employer without discrimination on the basis of sex, ethnic group, race, religion, skin color, political orientation or disability. It is not considered discriminatory for an employer to select candidates based on abilities required for the job (i.e., employing a person with a certain language ability to serve customers speaking that language or dialect).
Female employees are not obliged to work on the first and second days of menstruation if they feel sick, and inform the employer. However, this provision should be further regulated in the employment agreement, company regulation or CLA.
A pregnant employee is entitled to three months of maternity leave with full pay, consisting of one and one-half months prior to delivery and one and one-half months after delivery. This three-month period may be divided differently based on a doctor’s certificate or by agreement of the parties. The pre-delivery time can be extended to up to three months with a doctor’s certificate confirming that this is medically necessary. Upon the employee’s return to work, the employee must be given reasonable time to breastfeed the baby. In the event of a miscarriage, a female employee will be entitled to one and one-half months of paid leave (Article 82.2 of the Labour Law). Paternity leave of two days is given to the father upon the birth of a child.
There are no specific rules concerning sexual harassment in connection with the employer-employee relationship. However, most company regulations and CLA’s note that sexual harassment is considered a serious violation.
There is no comprehensive legislation governing data protection in Indonesia. However, all persons have a broad constitutional right to privacy and there is various industry-specific legislation concerning data privacy.
Law No. 11 of 2008 regarding Electronic Information and Transactions (the “ITE Law”) prohibits the use of information acquired through electronic media containing personal data related to an individual without the consent of such person. In practice, employers in Indonesia regulate the privacy and data protection rights of their employees by way of unilateral employee consents, employment agreements, Company Regulations and CLAs, which (each of such alternatives hereinafter called a “Consent”). Such Consent permits the collection, retention, disclosure and use of the employee’s personal data or other confidential information. Such Consents are justified by the freedom of contract principle under the Indonesian Civil Code.
The basic legislation governing labour unions in Indonesia is Law No. 21 of 2000 regarding Labour Unions (the “Labour Union Law”). A group of at least 10 workers may establish a labour union. Based on the 1945 Constitution, labour unions, by law, are required to be democratic, independent and responsible, and not to base their membership on politics, religion, race and/or gender.
The Labour Union Law imposes criminal sanctions on anyone who engages in certain anti-union activity. Such activities include: (i) preventing workers from forming a union, becoming a member of a union or conducting union activities; (ii) terminating an employee or reducing his or her salary for conducting union activities; (iii) conducting an anti-union campaign; and (iv) intimidation in any form.
SSEK - 25th November 2014
Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)
The Minimum Wage and Labour Competitiveness in Indonesia
EuroCham's Quarterly Briefing on the Labour Market and Policies
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