OBLIGATION OF A COMPANY TO ESTABLISH A BIPARTITE COOPERATION INSTITUTION

 In Legal Updates, Uncategorized

According to Article 105 of Manpower Law every companies who employing 50 employments or more is under an obligation to establish a bipartite cooperation institution or commonly known as LKS Bipartite (Bipartite Institution).

Indonesian Manpower Law (Law No.13 of 2003) defined the Bipartite Institution is a communication and consultation forum on matters pertaining to industrial relations in company whose members consist of company’s management and employees representatives or labour unions representatives that have been registered at a government agency responsible for manpower affairs. The aim of Bipartite Institution is to create a harmonious, dynamic and justice-based relationship amongs actors in the company by providing negotiation forum especially for the following issues:

1) New Policies

Bipartite Institution will be as a tools for the company to socialize new policies that will be implemented. Therefore, through Bipartite Institution it is hoped the employees will understand the purpose and objectives of the new policies from the beginning.

2) Employee Prosperity Matters

The Employees may address their aspiration especially about prosperity policy that they asked from the company as per current condition (by law or economic situations), for example: salary increment, supporting allowance, and so forth. This kind of communication can reduce the potential dispute against the company.

3) Industrial Dispute

Bipartite Institution can also be used by the company’s management to monitor any employment issues which potentially can be raised up, so the company can mitigate the risk of the disputed matters.

Procedure to Form a Bipartite Institution

Article 8 and 9 of the Minister of Manpower and Transmigration Regulation No. 32/MEN/XII/2008 regarding the Procedures and Composition of Bipartite Cooperation Institution (“Bipartite Ministerial Regulation”) regulates that the Bipartite Institution must be created by at least 6 members to be appointed as the committee of the Bipartite Institution, which contained:

  1. Company’s representatives which consist of 3 people; and
  2. Employee’s representatives which consist of 3 people and be elected democratically.

 

In the beginning of the Bipartite Institution formation, the Member must discuss and conduct the following actions:

  • The Member must held a meeting to establish the Bipartite Committee. In which the structure of the Bipartite Committee must consist of the Chairman, Vice Chairman, Secretary and member. Chairman position can be occupied by Company’s Representative or Employees’s Representative alternately. The resolution regarding this matter must be made in written in a Minutes of Meeting and signed by both representatives;
  • No later than 14 working days from the Meeting, the Bipartite Committee must report and notify the Manpower and Transmigration Agency that they have been established Bipartite Institution in the company. The notification must be completed by delivering Notification Letter, Minutes of Meeting of Bipartite Institution Formation, Composition of Bipartite Committee and the address of the company; and
  • The Manpower and Transmigration Agency will issue a notification receipt approximately within 7 (seven) days after receive the Bipartite Committee letter.

The period of Bipartite Committee is 3 years and any replacement of the committee structure can be conducted with prior advise from each member.

 

How Bipartite Institution Work?

Bipartite Institution works in a company under the following procedures:

  1. Bipartite Institution must conduct at least 1 (one) meeting each month or whenever the meeting is needed;
  2. The meeting agenda may be proposed by the company management, employees or the Bipartite Committee;
  3. Bipartite Committee sets periodic meeting agenda; and
  4. The relationship between Bipartite Institution with other institution in a company is based on coordinative, consultative and communicative relationship.

 

Bipartite Institution is under supervision of the Manpower and Transmigration Office in the domicile of the Company. Therefore Bipartite Committee must report every activities of the Bipartite Institution to the Director of the company regularly. Further the Director of the company must report it to the Manpower and Transmigration Office every 6 months.

 

If you want to seek for professional legal advice regarding the manpower law, please contact us at: 

E: bpl@smartlegal.id 

H: +62821-1234-1235

 

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