Company regulations are often known as company policies or codes of conduct that employees must comply with.
These regulations serve as guidelines that govern the behavior and interaction between individuals and management within a company.
Although often considered a formality, company regulations are actually an important element for the success and well-being of a business.
In fact, under certain criteria, companies are required to have these regulations.
Clear and documented company regulations can prevent conflicts and misunderstandings between employees and management.
In addition, these regulations also protect company interests such as information security, intellectual property rights, and other important aspects.
Definition of Company Regulation
According to Law Number 13 Year 2003 on Manpower, which was later amended by Law Number 6 Year 2023 on the Stipulation of Government Regulation in Lieu of Law Number 2 Year 2022 on Job Creation, company regulations are written rules made by employers.
This regulation contains working conditions and company rules.
In short, company regulations are a set of guidelines and policies set by management to govern behavior, relationships between individuals, and overall organizational operations.
This regulation serves as a guideline in the implementation of the company’s operational activities, as well as a strong basis for imposing sanctions in the event of a violation.
When is it necessary to create company regulations?
Based on Article 2 of the Minister of Manpower Regulation (Permenaker) 28/2014, company regulations must be made after the company has at least 10 employees.
This regulation becomes valid after it is ratified by the Minister of Manpower or a designated official.
However, if the company already has a collective labor agreement, this provision does not apply.
Company regulations can be legally used if it has been more than 30 days since the ratification.
Company regulations are made as work guidelines to create a harmonious working environment among all parties involved.
What is the Importance of Company Regulation?
Apart from being an obligation for companies that meet certain criteria, company regulations serve to regulate the relationship and working conditions between companies and employees.
Here are some of the benefits of making company regulations:
- This regulation ensures that policies and treatment of all employees are fair and indiscriminate.
- Serves as a guideline for both the company and employees in daily operations.
- Easily control changes in the work environment.
- Minimize the opportunity for employees to make mistakes that can harm the company, because everything is written in the applicable regulations.
Important things that must be in company regulations
According to Article 2 paragraph (2) of Permenaker 28/2014, company regulations must at least contain:
- Rights and obligations of employers
- Rights and obligations of workers/laborers
- Working conditions
- Company rules
- Period of validity of company regulations
- Matters that constitute further arrangements of laws and regulations
Company regulations must comply with applicable laws and regulations and take into account the specific needs of the company.
In addition, it is necessary to consider the consequences that may occur if there is a violation by employees.
Once made, company regulations must be submitted to the Ministry of Manpower for approval.
The draft regulation must be submitted in triplicate and signed by the head of the company.
In addition, it must be accompanied by evidence that the draft has sought suggestions from employees or trade unions, as well as a written application containing information about the company.
If the draft is approved, the Ministry will issue a Decree within 30 days after the draft is submitted.
If it does not meet the criteria, the draft will be returned for revision with necessary notes.
KH Contact
This is the explanation of company regulations and their benefits.
If you still have difficulties in drafting company regulations, consult with professional experts from Kontrak Hukum.
We can also assist in drafting company regulations that are in accordance with the Labor Law and other relevant regulations.
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