Have you ever heard the term PKB or Collective Labor Agreement? For small companies, maybe this is not really needed, but what if the company is already large and has many employees who are members of the labor union? PKB is certainly an important thing that must be considered by business owners or companies. Where there are many differences and certain conditions, triggering the formation of a collective labor agreement between the company and the workers’ association in order to reach an agreement. To discuss more about the collective bargaining agreement, including its definition and benefits for companies and employees, let’s take a look at the article below.
What is a collective bargaining agreement?
According to Manpower Law No. 13 of 2003, a Collective Labor Agreement (CLA) is an agreement that is the result of negotiations between a trade union/labor union, or several trade unions/labor unions registered with the agency responsible for the field of manpower with employers, or several employers or associations of employers, which contains working conditions, as well as the rights and obligations of both parties. In other words, PKB is a rule agreed upon by companies and trade unions in fulfilling their respective rights and obligations, including in resolving problems that occur between them. The PKB itself has a clear legal basis, namely Law No. 13/2003 on Manpower Articles 116-135, as well as Minister of Manpower and Transmigration Regulation No. PER.16/MEN/XI/2011, specifically Articles 12-29. Trade unions that can negotiate CBAs must be registered with the agency responsible for manpower. The agencies in question are:
- The Manpower Office at the district/city level for companies whose working area is within one district/city.
- Provincial Manpower Office if the company’s working area is in more than one district/city.
- Director General of Industrial Relations and Labor Social Security for companies located in more than one province.
A company may only have one PKB. However, if the company has branches, then the main PKB applies to all branches and a derivative PKB may be made for each branch. As for companies that are members of a group and have their own legal entities, the PKB is made and negotiated by each company.
Function and Purpose of Collective Labor Agreement
The function of PKB is to regulate both the rights and obligations of employers, as well as the rights and obligations of trade unions/labor unions in a company in accordance with their needs. Because they are the ones who best understand the conditions and needs of the company in running industrial relations. This is also confirmed by ILO Convention No. 98 of 1949 concerning the Fundamentals of the Right to Organize and to Collective Bargaining which has been ratified through Law No. 18 of 1956. The convention mentions the need for comprehensive clarity regarding the rights and obligations between employers and employees as well as the rules at work and in the work environment.
Difference between Collective Labor Agreement and Employment Agreement
In addition to CLAs, the Manpower Law also recognizes work agreements, which are defined as agreements between workers/laborers and employers or employers that contain working conditions, rights, and obligations of the parties. The difference between a CLA and a work agreement lies in the parties that draft the agreement. A CLA is prepared jointly based on an agreement between the company and the labor union, while a work agreement is only made unilaterally by the company. In other words, a CLA is a commitment between the company and employees, while a work agreement is a regulation that binds employees in a company.
Content of Collective Labor Agreement
Basically, all parties involved in the drafting of a CBA are allowed to give their opinions regarding the content of the CBA. However, in order not to conflict with the prevailing laws and regulations, Article 124 of the Labor Law has determined the points that must be included in the PKB, namely:
- Company rights and obligations;
- Rights and obligations of trade unions;
- Term and effective date of the CBA;
- Signature of the party making the PKB.
In addition, provisions can be added regarding wage increases, working time, leave, and so on.
What is the Procedure for Making a Collective Labor Agreement?
A CLA is an agreement so that its making still refers to Article 1320 of the Civil Code regarding the legal requirements of an agreement. In order for a CLA to be considered valid and binding on the parties, both companies and workers must not include provisions that conflict with the prevailing laws and regulations. If any provision of the CLA is found to be contradictory, the provision will be null and void. After that, the company is responsible for registering the PKB with the authorized agency, namely the Manpower Office. For more details, here are the stages of the PKB making process:
- Submitting PKB drafting from labor unions
- Verifying trade union membership
- Determine who the negotiating team is
- Develop negotiation rules and regulations
- Conduct PKB negotiations
- Register the PKB to the Manpower Office by attaching the PKB script that has been stamped and signed.
- An authorized official from the Manpower Office will issue a PKB registration decision letter.
- Socialize PKB to all employees
What are the benefits of a collective bargaining agreement?
The making of a PKB is considered to provide a number of benefits, both for companies and employees or workers. Some of these benefits include:
- Strengthen and clarify the rights and obligations of companies and workers.
- Creating harmonious industrial relations so as to minimize conflicts or disputes.
- Maintain a smooth production process so as to increase work productivity
- Establish joint terms that:
- Not yet regulated in laws and regulations
- The quantity and quality can be better than the applicable laws and regulations
- Beyond normative or those stipulated by laws and regulations
Those are some important points that KH pals should know about collective labor agreements. With the existence of PKB, it is hoped that all parties, both companies and employees, can maximize the benefits that will be obtained.
KH Contact
For KH pals who plan to make a PKB but are still confused about how to compile and register it with the Manpower Office, you can consult first with Kontrak Hukum. With Kontrak Hukum, KH pals can consult with legal professionals who are experienced and trusted by more than thousands of companies in Indonesia. At Kontrak Hukum, KH pals can also make labor agreements at affordable prices in just 24 hours, ranging from PKWT agreements, PKWTT, freelance, outsource, layoff, and so on. So, immediately consult your business legal issues now at Kontrak Hukum by visiting this page or contact us at Tanya KH and via Direct Message (DM) to Instagram @kontrakhukum.
