Every company must have its own rules. These company rules are made for various reasons, including of course to discipline employees and help achieve the company’s business targets. Therefore, company regulations cannot be made carelessly. There are several ways and steps that need to be taken so that these regulations can achieve company targets and in accordance with the company’s vision and mission. Well, so that KH Pals can formulate regulations appropriately and effectively, here we have summarized several ways to make company regulations.
What are Company Regulations?
According to Law No. 13 of 2013 concerning Manpower (Manpower Law), company regulations are regulations made in writing by companies, which include working conditions and company rules. Company regulations are very important for both employees and companies. With the existence of company regulations, there will be clarity between what obligations must be carried out by employees and companies, as well as what rights should be obtained by employees and companies. Applicable company regulations can be used as guidelines in carrying out the company’s operational activities. That way, if an employee commits a violation, the company has a strong basic reason in sanctioning the employee, and vice versa. Not only that, company regulations that are in accordance with the Labor Law are expected to benefit employees and companies, so that peace and a conducive work environment can be created.
When should company regulations be made?
Based on Article 2 of the Minister of Manpower Regulation (Permenaker) 38/2014, company regulations must be made after the company has at least 10 employees and come into force legally since it is authorized by the Minister of Manpower or a designated official. However, this does not apply to companies that have made a collective labor agreement. The regulation can be legally used when it has been more than 30 days since the authorization was given.
In addition, company regulations are made as work guidelines for each party involved in the company to create a harmonious work environment.
What are the Benefits of Company Regulations?
Here are some of the benefits of making company regulations:
- Regulations are made with the intention of equalizing policies and treatment of all employees, so that the company is indiscriminate.
- As a guideline for both the company and the employees in their operational activities in the work environment.
- It is easier to control changes that occur in the work environment.
- Minimize the opportunity for employees to make mistakes that can harm the company, because everything has been written in the applicable regulations.
Important things that must be in company regulations
Making company regulations must not only pay attention to the Labor Law, but also pay attention to the needs of the company. In making regulations, regulations must consider the consequences that are likely to occur if there is a violation by employees. Even so, the company must take full responsibility for the regulations it makes. Based on Article 111 of the Labor Law, company regulations made must at least consist of the following points:
Employer Rights and Obligations
At this point, the company must provide wise policies to employees. These policies include salary policies, rewards and punishments for employees, how the company positions employees according to their abilities and other policies.
Employee Rights and Obligations
Regulations are made in accordance with what is the obligation of employees in achieving company goals. Then the rights that must be obtained by employees who have exerted their performance and efforts in the progress of the company are in the form of the right to get a salary according to their position.
Working Conditions
These working conditions are rules regarding what must be done by employees in accordance with their fields, then the standards that must be met in achieving the targets set by the company.
Company Code of Conduct
This includes company rules in the form of Company Operational Standards (SOP) rules in the company environment and how relationships between employees. These rules are made with the intention that the work environment is conducive.
Duration of the Regulation
Based on government regulations, company regulations are valid for two years from the time the company is first authorized by the local labor official. If the validity period of the company regulations is approaching the deadline, the company must re-submit the regulations made by involving the labor union. Make sure this regulation is also known by the Minister of Manpower.
How to Make Company Regulations?
As explained, making company regulations cannot be done carelessly. There are several things that KH pals should pay attention to when making these regulations. Below are some procedures for making company regulations that you can do:
Study the Applicable Labor Law
Company regulations cannot just be made, but need to be compiled in accordance with the law, especially the Labor Law. To study the law, companies can form a special team of people who understand the Labor Law. Later, the team will study what the applicable labor law is like, then implement it into the company rules that will be made.
Reviewing Previous Company Regulations
If the company has previously made rules, then before making new rules, KH Friend needs to review the rules that are already in effect, because, it could be that in the old rules there are several points of regulation that can be reapplied in the new rules. One of the things that needs to be reviewed in existing rules is the effectiveness of the application of these rules. Assess the extent to which the rules were implemented in the past, whether they were effective or otherwise. Study the factors why the rules can be effective or not when implemented. The results of the study can be taken into consideration when making new regulations later.
Estimating Regulatory Consequences
Every rule has consequences, including company regulations. Therefore, before making a rule, try to estimate what the consequences will be if the rule is implemented, both positive and negative consequences. If the consequences that arise are positive, then the rule can be implemented. Conversely, if negative consequences are expected to emerge, then try to revamp the regulation so that it does not cause negative consequences.
Include Rights, Obligations, and Period of Validity of Regulations
As explained, company regulations must contain the rights and obligations of employees and companies, as well as the validity period of the regulation itself. These three points must be understood by both parties to avoid conflicts and misunderstandings, either when company regulations are made or when they are implemented.
Paying Attention to the Redactions Used
There are a number of editorial aspects that need to be considered when writing rules such as word/sentence selection, as well as language. Make sure the words/sentences used in company rules can be understood by both the company and employees. Also avoid ambiguous language or too many figures of speech to avoid double meaning as well as misinterpretation of each element of the company. Because the rules are standardized, avoid using slang or non-formal language, and use standard Indonesian according to applicable language rules.
Draft Regulation
The draft company rules should contain important points regarding the applicable rules. If you have finished, try to give the draft. Where, the suggestion needs to be submitted to the company a maximum of 14 days after the draft is submitted to the company representative.
Submit Draft to Minister of Manpower for Approval
If the suggestion has been given by the company representative, then try to improve the draft according to the employee’s suggestion. That way, the draft rules can be in accordance with employee suggestions. If it has been updated, submit the draft to the Minister of Manpower for approval. If the employee representatives do not provide suggestions within 14 days, then the company can submit the draft regulation to the Manpower Office and a statement explaining that the employees or workers did not provide suggestions for the draft.
Requirements for Submitting Draft Company Regulations:
- The draft company rules are submitted in triplicate and have been signed by the head of the company.
- Submit evidence that the drafting has sought advice from employees or trade unions, regardless of whether or not they made suggestions.
- Include a written request containing information about the company.
The draft that has been submitted with these conditions will be studied by the relevant Ministry. If the draft is approved, the Ministry will issue a Decree no later than 30 days after the draft is sent.
If it does not meet the criteria, the Ministry will return the draft a week after it was submitted. Typically, rejected drafts will contain notes on which sections need to be revised.
KH Contact
Thus the explanation of company rules and procedures for making them so that business runs effectively. For KH pals who are still difficult and confused in making company regulations, you can consult with professional experts from Kontrak Hukum anytime and anywhere for free.
READ ALSO: Difference between Company Regulation and Collective Labor Agreement
In addition, we also provide company regulation making services so that it can help you to develop rules that are in accordance with the Labor Law and other laws related to business. So, what are you waiting for? Let’s create your company regulations by visiting the KH Services – Company Regulations page. If you have any other questions, please contact us at Ask KH or via direct message (DM) to Instagram @kontrakhukum.
