The Impact of Industrial Relations on Workers' Welfare in Indonesia

  • Sutanta

    Student thesis: Doctoral Thesis


    This thesis examines the current practice of industrial relations, in relation to workers' welfare, with particular reference to three kecamatan (sub-district) of Tangerang, West Java. This study begins by looking at Dunlop's systems theory of industrial relations, which defines industrial relations as a sub-system of the socio-political system in a specific environment. In Indonesia, this sub-system is called the Pancasila industrial relations (PIR).

    After presenting an overview of industrial relations and practices in economically advanced countries and those prevailing in the developing world, especially in the ASEAN, the thesis goes on to examine the current industrial relations system in Indonesia, drawing attention to internal and external criticisms led by the ILO and European based sectoral trade union organisations. This study confirms the allegations, the most significant of which is the right to organise in Indonesia is limited. It is, however, suggested that the Western model of unionism is not appropriate for adoption, given the fact that workers tend to organise within their own traditional institutions and they can effectively utilise the existing mechanisms to achieve bipartite communications. The specific roles of the tripartite constituents, in terms of providing welfare services in Indonesia are then discussed, in relation to the existing laws and regulations, which suggest that the existing regulations could be strengthened, if integral welfare services are to become more applicable in the Indonesian environment.

    The study suggests that, there is a solid basis, on which a more relevant indigenous industrial relations structure could be built. While the PIR concept encompasses and enshrines the cultural concepts of the people of Indonesia, the traditional institutions of Paguyuban and/or Arisan can be utilised to create an appropriate means of communication between workers and management. Paguyuban can become a facilitating role for building strong, independent, factory-based trade unions (SPTPs). Together, Paguyuban and the PIR framework can provide a relevant industrial relations system for the renaissance of industrial relations in Indonesia.

    Chapters six to nine analyse findings based on survey responses from 600 workers, and ten personnel managers, together with interviews with a further twenty personnel managers and factory owners. These analyses suggest that both workers and managers appreciate the importance of welfare programmes in improving workers' welfare. A lack of commitment from factory owners may, however, hinder the implementation of such programmes, although, in principle, they also appreciate the concept.
    Date of AwardSept 1997
    Original languageEnglish

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