The institutional framework for the evolution and development of industrial relations comprises mainly the institutions of workers, employers, and the government which institutionalizes public labour policies through various means such as legislative enactments, executive or administrative orders, and judicial reviews. The objectives and functions of each of the three sides are either facilitated or constrained by environments. Two such important environments under which industrial relations operate are the economic and labour market environments. Their main features pertaining to the ASEAN countries were discussed in the preceding chapter. This chapter examines firstly, the institutional framework with focus on some of the important aspects of the evolution of industrial relations in the ASEAN countries. It then takes up the question of the hypothesized relationship between levels of structural transformation and patterns of industrial relations with specific reference to the ASEAN countries.

For the sake of expositional convenience, we will begin with an examination of the evolution of labour movements and industrial relations in the ASEAN region on a country-by-country basis. This will be followed by a comparison of similarities and differences among national industrial relations systems of the ASEAN countries.

Indonesia

In Indonesia, there are three main pieces of legislation that provide the legal framework for industrial relations. They are: a) the Collective Bargaining Laws of 1954 and 1963, b) the Labour Code (Conditions of Employment) of 1948, and c) the Labour Disputes Acts of 1957 and 1964. In addition to these labour legislation, various labour laws have come into force in the forms of governmental decrees and ministerial regulations.

Since 1974, the government has been actively promoting the state labour policy called Pancasila labour relations. This policy is based upon the Pancasila philosophy which emphasizes the following five principles:

1. Belief in the One Supreme God;

2. Just and civilized humanity:

3. The unity of Indonesia;

4. Democracy wisely led by the wisdom of deliberations among representatives;

5. Social justice for the whole of the people of Indonesia.