promoting decent work for all 1 alan boulton, director ilo jakarta office industrial dispute...

Promoting Decent Work for All

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Alan Boulton, Director ILO Jakarta Office

INDUSTRIAL DISPUTE RESOLUTION CONFERENCE

INTERNATIONAL PERSPECTIVES 3 October 2007

Melbourne

“Industrial Dispute Resolution inASEAN Countries: Some Recent Developments”


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ASSOCIATION OF SOUTHEAST ASIAN NATIONS

Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Philippines, Vietnam

560 million people, labour force 282 million

Wide differences in member countries (wealth, development,Government systems, etc)

Major changes in recent years (new members – Vietnam 1995, Lao PDR & Myanmar 1997, and Cambodia 1999; financial crisis; market economy;democracy; competition from China and India, etc)


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RECENT LABOUR MARKET TRENDS IN ASEAN COUNTRIES

Average annual GDP growth between 2000-2006 was 5.7 per cent(Cambodia 8.6%, Vietnam 7.7% cf. China 9.9% and India 7.2%)

Between 2000 to 2006, labour force increased by 35.8 millionor 13.5 per cent (Cambodia 52.8%, Philippines 20%,Indonesia 11%, Singapore & Thailand 9%)

Many workers in export-oriented industries

Healthy productivity growth in ASEAN linked to sectoral shift fromagriculture to industry & services

Informal economy has remained massive, about 60 per centof ASEAN workforce 2006 (Cambodia & Vietnam 80%,Indonesia 60%, Thailand 53% and Singapore 8.8%)


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SNAPSHOT: ASEAN’S 282 MILLION WORKERS

If ASEAN’s labour force (ages 15+) consists of100 workers …

58 are men and 42 are women 47 work in agriculture; 35 in services; 18 in industry 7 are unemployed 59 work in the informal economy 11 live on less than US$1 per day 57 live on less than US$2 per day


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MODERNIZING INDUSTRIAL RELATIONS (1) …

Many developing countries in Asia are improving industrial dispute resolution as part of the modernization of their industrial relations systems

Examples include: Cambodia – the establishment of the tripartite Arbitration

Council in 2003; Indonesia – new Industrial Relations Disputes Settlement

Act 2004 and the establishment of the Industrial Relations Court; Viet Nam & China – steps towards developing new

dispute resolution frameworks


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A fair and effective system of industrial dispute resolution is a pre-requisite for growth and development

Existing systems deficient or unacceptable in new economic and social environmentConcern about rising tide of labour disputesRecognition of democratic and labour rightsConcern about investment flows and market access


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Particular challenges faced by developing countries in modernizing industrial relations

Background of government intervention Adaptation of practices in industrialized countries Institutional weaknesses (government, employers and

workers) Concern about social and political unrest


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Key issues relate to freedom of association and freedom of collective bargaining

Only 4 ASEAN countries have ratified C87 on freedom of association

Workers’ organizations are either under government influence or fragmented with little strength

Limited experience with and scope for collective bargaining Many disputes about “rights”


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ILO membership

since

Fundamental Conventions

C29 C105 C87 C98 C100 C111 C138 C182

Brunei 2007 - - - - - - - -

Cambodia 1969 1969 1999 1999 1999 1999 1999 1999 2006

Indonesia 1950 1950 1999 1998 1957 1958 1999 1999 2000

Lao PDR 1964 1964 2005 2005

Malaysia 1957 1957 1958* 1961 1997 1997 2000

Myanmar 1948 1955 1955

Philippines 1948 2005 1960 1953 1953 1953 1960 1998 2000

Singapore 1965 1965 1965* 1965 2002 2005 2001

Thailand 1919 1969 1969 1999 2004 2001

Vietnam 1980-1985, 1992

2007 1997 1997 2003 2000

RATIFICATION OF ILO FUNDAMENTAL CONVENTIONS

* Malaysia and Singapore ratified Convention No. 105 in years as indicated above, but later denounced their ratification of the Convention.

Forced Labour Convention, 1930 (No.29); Freedom of Association and Protection of Right to Organize Convention, 1948 (No. 87); Right to Organize and Collective Bargaining Convention, 1949 (No. 98); Equal Remuneration Convention, 1951 (No. 100); Abolition of Forced Labour Convention, 1957 (No. 105); Discrimination (Employment and Occupation) Convention, 1958 (No. 111); Minimum Age Convention, 1973 (No. 138); Worst Forms of Child Labour Convention, 1999 (No. 182)


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INDONESIA – SOME BASIC FACTS

Population: 220 millionGDP growth: 5.5% (2006)Inflation (CPI): 6.01% (May 2007)Labour force: 110 million (2006)Open unemployment: 10.4% (2006)Formal/informal: 63.8% of those employed work in the

informal/traditional economy (2006)Wages (2007): DKI Jakarta Rp.900,560 (US$98 per month)

Bali Rp.622,000 (US$68 per month)North Sumatra Rp.761,000 (US$83 per month)


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Some remarkable progress since 1998

In democracy In recovery from economic crisis In labour law reforms

THE INDONESIAN EXPERIENCE (1) …


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Ratification of ILO Conventions C.87 Freedom of Association (1998) C.105 Forced Labour (1999) C.138 and 182 Child Labour (1999 and 2000) C.111 Discrimination in Employment (1999)

New Labour Laws Trade Union Act 2000 Manpower Act 2003 Industrial Disputes Settlement Act 2004 Migrant Workers Act 2004

Unions 90 national federations of trade unions (September 2006) 11,444 trade unions at plant level (September 2006) Total membership 3.39 million workers (2006)

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Potential for labour disputes…



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Industrial Relations Disputes Settlement Act 2004

Emphasis on bipartite settlement Mediation by government mediators Access to private conciliation and arbitration New Industrial Relations Court at Supreme Court and

District Court level



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Features of new system

Continued use of government mediators under regionalautonomy

Industrial Relations Court comprised of panel of judges(career judge sits with ad-hoc judges from employers & unions)

Court has jurisdiction to adjudicate on “rights” and “interests” disputes



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Experience with new system

Most disputes settled at enterprise level or with assistanceof mediators

Little use of private conciliation and arbitration Problems with start up of new Court (appointments, resources,

training) Significant number of cases at Supreme Court: 213 cases in 2006

and 584 cases to August 2007 Some disputes involve informal mechanisms (e.g. Ministerial

intervention; parliament; police; etc)



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Some statistics

Year Number of Cases

Number of Workers involved

Working Hours Lost

2001 174 109,845 1,165,032

2002 220 97,325 769,142

2003 161 68,114 648,253

2004 125 53,326 591,646

2005 96 56,082 766,463

2006 282 595,783 4,665,685

Strikes

Year Labour Disputes Employment Termination Cases

2001 81 2,160 (85,989 workers)

2002 101 2,445 (114,933 workers)

2003 105 2,394 (128,191 workers)

2004 63 2,386 (123,929 workers)

2005* 92 1,784 (66,604 workers)

2006 188 5,615 (67,782 workers)

Labour Disputes

*As of October 2005** Labour disputes are disputes over normative and non-normative rights such as wages, overtime, bonus, trade union, transport and meal allowances, uniform, employment status, etc.


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Officials Total

Mediators 1,084

Conciliators 230

Arbiters 64

Ad hoc Labour Judges 228

Career Labour Judges 101

Ad hoc Labour Judges at the Supreme Court 8

Career labour Judges at the Supreme Court 20

Dispute Settlement Officials (September 2007)


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Some challenges

Understanding of collective bargaining and new system Support through labour administration (e.g. inspection and

mediation services) Problems in establishing new institution (including issues

relating to jurisdiction, workload, expertise and practice of courts) Proper role for police



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The ILO has assisted the labour law reform process and the operation of the new industrial relations system mainlythrough two projects:

ILO/USA Declaration Police Training Project

ILO/USA DeclarationIndustrial Relations Project


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Some specific needs identified

Promotion of bipartite cooperation and dispute settlement Improved inspection and mediation services Training (parties, mediators, judges)



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IMPROVING DISPUTE RESOLUTION IN ASEAN COUNTRIES (1) …

Indonesia’s experience in introducing new dispute resolution systemhighlights some of the challenges in developing countries in Asia:

Experimentation with new institutions (Cambodia, Indonesia) within model of government mediation services and adjudication by independent body

Weakness in labour administration and capacity of parties Building and maintaining respect for new institutions (e.g. Philippines) Promoting labour management cooperation and an understanding of

collective bargaining Defining the role of government and police in new system Part of process of promoting harmonious industrial relations and

labour management cooperation to enhance competitiveness andattract investment


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CAMBODIA Arbitration Council established in 2003 as independent Forum for

resolution of labour disputes Tripartite structure with cases determined by a panel of 3 arbitrators

(from government, employers and unions) selected by the parties Collective labour disputes not resolved by a conciliator from

the Ministry of Labour are forwarded to Arbitration Council Arbitration Council can resolve “rights” or “interests” disputes

through voluntary mediation and mandatory arbitration Parties may opt for binding or non-binding arbitration Estimated 68% of cases resolved through pre-arbitral mediation

or through arbitral awards ILO/USA/NZ Labour Dispute Resolution Project assisted with the

establishment of the Arbitration Council


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VIETNAM (1) … Significant number of wildcat strikes in recent years, especially in

foreign-invested enterprises 1995 Labour Code created new legal framework of industrial

relations (socialist market economy) Labour Code grants right to strike & each enterprise has

its own union, although all affiliated to Vietnam Confederationof Labour.

Mechanism for dispute resolution under the Code is by enterprise-level Conciliation Council with recourse to provincial levelLabour Arbitration Council. However, once dispute or strike happensa joint task force of local Department of Labour officials andprovincial union officials visit the factory and mediate the dispute.


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VIETNAM (2) …

Pressure to reform and improve current dispute settlement systemwith revisions to Labour Code Chapter 14 on Settlement of LabourDisputes in 2006

Consideration of role for local mediators (not government officials?)and workers’ and employers’ representatives in Arbitration Council

• ILO/Norway Industrial Relations Project; ILO Factory Improvement Project


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ASEAN Community is

Sharing experiences between countries, especially those with more developed systems (Singapore, Malaysia)

ASEAN Labour Ministers have established a Working Party topromote better industrial relations and progressive labour practices


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promoting decent work for all 1 alan boulton, director ilo jakarta office industrial dispute...

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