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In the midst of this Covid-19 pandemic, the time is now for Indonesia to create legal framework for flexible working arrangement.

Once upon a time, there’s a working father who got into argument with his boss. The boss asked the employee to be punctual. He should be at the office at 8.30 am every day. The boss always arrives at the office at 8.30 am and expects all staff to do the same. The request sounds reasonable. In fact, it is the rule as set out in the company regulations.

So, what’s the problem? The problem is, this father needs to drop his children at their schools before he goes to the office. With the chaotic Jakarta traffic, it would take 2.5-3 hours from his children’s schools that are located on the outskirts of Jakarta to his office. Thus, the earliest he could arrive at the office is between 9.30 am and 10.00 am. As one would expect, this employee immediately racked three written warnings from his boss and swiftly have his employment terminated for a violation of the company regulations.

This issue might be avoided if Indonesia has a legal framework for a flexible working arrangement (FWA). The inflexibility of the traditional working arrangement has taken its toll on the Indonesian workforce, especially on women. Many women must sacrifice their career to become a carer in the family.

Based on the latest statistics published by the BPS, women’s labour force participation rate in 2018 was only 55.4%, well below male’s participation rate at around 80%. This problem is further exacerbated by the gaps in the Indonesian Employment Law No.13/2003, which might prevent the FWA implementation in Indonesia. The first gap is related to the provision of working hours, while the second gap is related to the types of employment relationships. The Law requires working hours to be:

a.    7 hours in one day and 40 hours in one week for a 6-day a week of work; or

b.    8 hours in one day and 40 hours in one week for a 5-day a week of work

One could argue that an employer and employee could agree on having other working hours arrangements. But the mainstream view of this provision is, if you are a permanent employee, you should work 7/8 hours a day and 40 hours a week. On the second gap, there are only two types of employment relationships under the Law, namely definite period/fixed-term employment and indefinite period/permanent employment. Many people consider part-time work as fixed-term employment, which is incorrect. Part-Time work is when someone is working less than 7/8 hours a day and 40 hours a week.

These gaps have caused difficulties in implementing flexible working arrangement in the workplace. Several countries that had implemented flexible working arrangements have reported very positive results. The Australian employee census in 2013 indicated a very high utilisation rate of flexible working arrangement in the Australian public service sector with more than 60% satisfaction rate of the people who have had access to the FWA.

People often got wrong impressions about FWA. FWA is about working, with certain flexibilities to cover an employee’s personal situation. FWA is not about being irresponsible. There are several types of FWA that can be considered by the employer and employee based on the employee’s situation including:

a.    Job sharing (two people are sharing one job responsibility);

b.    Work from home;

c.    Part-time work;

d.    Compressed hours (working full time on fewer working days);

e.    Flexitime (the employee can choose the start and end hours of work. There will be core hours where the employee must work through those hours and flexible hours where the employee can work flexibly within certain time bandwidth to meet the full working hours).

Not all people are eligible to request an FWA. For instance, under the Australian Fair Work Act 2009, an employee is eligible to request for FWA if:

(a)  the employee is the parent, or has responsibility for the care, of a child who is of school age or younger;

(b) the employee is a carer (within the meaning of the Carer Recognition Act 2010);

(c)  the employee has a disability;

(d) the employee is 55 or older;

(e)  the employee is experiencing violence from a member of the employee’s family; and

(f)  the employee provides care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because the member is experiencing violence from the member’s family.

Moreover, the employee can only make the request for FWA if she has worked at least 12 months consecutively with the employer. An employer may refuse the request only on reasonable business grounds. Reasonable business grounds include:

(a)  the new working arrangement would be too costly for the employer;

(b) there is no capacity to change the working arrangements of other employees to accommodate the request;

(c)  it would be impractical to be implemented (e.g. difficult to recruit new employee);

(d) the request might result in significant losses for the employer; or

(e)  the request might affect customer services.

The employer and employee might also agree on an alternative flexible arrangement that balances the needs of both parties.

Although some companies in Indonesia have taken initiatives to introduce FWA in their organisations, this FWA implementation is still sporadic and inconsistent. The best way forward is to introduce a specific legal framework on FWA.

Given the plan to amend the Employment Law, Indonesia has a golden opportunity to include a legal framework for the FWA in the amended Employment Law or in lower-level regulations such as the Government Regulation, Presidential Regulation or Ministry of Manpower Regulation. Indonesia can also introduce the FWA framework for both the public sector (civil servants) and private sector. Indonesia uniquely has a different legal framework for civil servants and private employees. For the adoption of flexible working arrangement in the public sector, certain amendments to the civil servants-related regulations will need to be conducted, such as amending the civil servant’s disciplinary regulation in Government Regulation No.53/2010.

When Indonesia has implemented a legal framework on FWA, the story at the beginning of this article might end up differently. The father could have requested for FWA with the employer. He and the employer could agree on a flexitime where the father could drop his children at their schools in the morning, starts working at 10.00 am and finishes his day at 07.00 pm.

Everyone is the winner on this alternate version of the story.

On 9 June, the WTO Appellate Body issued its report vindicating Australia’s Tobacco-Plain Packaging measure. A decision that would support worldwide tobacco control public health measures.

The AB essentially confirmed the Panel’s Report and considered Australia’s TPP measure is not a form of an ‘unjustifiable encumbrance of trademarks’ under art 20 of TRIPS and not a violation of art 16 of TRIPS as well as art 2.2 of TBT.

The good reference point is that the AB rejected Honduras’ claim that Doha Declaration only applies to patents and medicines and should not be applied generally to any provisions of the TRIPS (see [6.656]-[6.659]). The AB held that regardless the Declaration’s status, it confirms the application of the general rules of treaty interpretation that requires the interpretation of TRIPS provisions in light of its object and purpose, namely in art 7 and 8.

In this regard, the AB concurred with the Panel’s view that art 7 and 8 of TRIPS provide relevant context in interpreting the issue of ‘unjustifiable encumbrance of trademarks’ in art 20.
Below is the link of the case update.

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds435_e.htm#bkmk435abr

The Government recently issued Law No.3 of 2020 that amends Law No.4 of 2009 on Mineral and Coal Mining. There are positive and negative implications of this amendment.

One of the main reasons behind this amendment to the 2009 Mining Law is to make the law consistent with several Constitutional Court’s decisions that require mineral and coal mining activities to be conducted by maintaining the state control over ‘natural resources’ consistent with article 33(3) of the 1945 Constitution. The Court considered the meaning of ‘state control’ in article 33(3) to be more than just regulating and supervising the mining sector but also through ‘actual control’ over this sector than can be conducted through State-Owned Enterprises (BUMN). That is why in the 2020 amendment, there are some provisions that give priority to BUMN and BUMD in obtaining mining licences.

Mining Licencing Structure under the 2020 Amendment

The 2020 amendment itself is made with the similar structure with the 2009 Law. Since the 2009 Law, the mining sector has been conducted by shifting from the Contract of Work to Licencing arrangement. The 2020 amendment basically requires a mineral or coal mining company to secure:

1. Mining Licence Area (Wilayah Izin Usaha Pertambangan/WIUP); and
2. Mining Licence (Izin Usaha Pertambangan/IUP).

The existing Contract of Work (Kontrak Karya-for non-coal mining) and Coal Contract of Work (PKP2B-for coal mining) will be transitioned into Mining Licence in the form of IUPK (Izin Usaha Pertambangan Khusus).

Positive Implications of this Amendment

One positive implication of the 2020 amendment is the assumption of all mining authorities by the Central Government. There had been complaints from the industries that the biggest disruption in the mining sector comes from the role of local governments that were issuing licences without proper process and governance. It had caused disputes like when there were two companies that had been granted mining licences with overlapping areas. Some of these disputes even resorted in investment treaty arbitration that were thankfully won by the Indonesian government.

To avoid this uncoordinated issuance of mining licences by local governments, the 2020 amendment gives the central government through the Minister of Energy and Mineral Resources (the “ESDM Minister”) the full authority to manage, supervise and issue licences in the mineral and coal mining sector. The local governments are given a small role through the provincial government in the designation of the mining areas. Another positive implication from the 2020 amendment is that there is a guarantee from the government that there will be no changes in the designation and allocation of the mining areas and guarantee to obtain the required licences for a business that has obtained the mining area allocation as well as a guarantee for a licence holder to extend their licence if they have met the requirements. These guarantees will give legal certainties to investors in the mining sector.

Localisation Obligations

The amendment provides for the obligation to process and purify minerals as well as development and utilisation of coal domestically. Secondly it also requires a mining business to use domestic contractors and prioritise domestic workers. The amendment prohibits the encumbrance of the mining commodities as collaterals for loan which makes it difficult for a mining business to secure a financing. There is also a prohibition to export unprocessed or un-purified minerals except in limited circumstances and only for 3 years after the effective date of this amendment. The amendment also requires the Central Government to set out the number of production of minerals and coals as well as the reference pricing for these commodities.