Ideal Structure of a Collective Labor Agreement (Perjanjian Kerja Bersama / PKB)
Table of Contents
- Introduction
- Legal Basis
- Who Needs a PKB?
- PKB vs. Company Regulation
- Structure of a PKB
- Essential Clauses
- Negotiation & Signing Process
- Legalization & Validity
- Renewal & Revisions
- Tips for Drafting a PKB
1. Introduction
A Collective Labor Agreement (PKB) is a written agreement between a company and its labor union, outlining work terms, rights, and obligations. In companies with registered labor unions, a PKB is mandatory and replaces the Company Regulation (PP).
2. Legal Basis
- UU No. 13 Tahun 2003 (Pasal 116–135)
- UU Cipta Kerja No. 11 Tahun 2020
- PP No. 36/2021 & Permenaker No. 28/2014
- Disnaker guidelines for PKB registration
3. Who Needs a PKB?
Companies where employees have formed or joined a registered labor union (Serikat Pekerja/Serikat Buruh). The PKB must be negotiated collectively and represent both sides.
4. PKB vs. Company Regulation
- Aspect Company Regulation (PP) PKB
- Initiator Employer Labor Union & Employer
- Applies to All employees Union members (can be expanded)
- Legalization Disnaker Disnaker (as agreement)
- Revision timeline Every 2 years Max 2 years, extendable once
5. Structure of a PKB
A complete PKB should contain the following sections:
- Opening Statement
- General Provisions & Definitions
- Scope & Applicability
- Rights & Obligations of Employer & Employees
- Working Hours, Leave, Overtime
- Remuneration & Benefits
- Work Ethics & Disciplinary Action
- Occupational Safety & Health
- Grievance and Dispute Resolution
- Termination, Resignation, Retirement
- Monitoring & Implementation Team
- Closing Clause and Effective Date
6. Essential Clauses
Include these mandatory components:
- Dispute Resolution: Mechanism for bipartite, tripartite negotiations
- Monitoring Committee: Equal reps from union & management
- Non-discrimination: Equal treatment regardless of union status
- Benefit Improvements: Must be equal or better than labor law minimums
7. Negotiation & Signing Process
- Initiation: Union submits proposal to management
- Negotiation Team: Formed by both parties
- Discussion Period: Max 30 business days
- Agreement Finalization: Signed by both parties
- Legalization: Submit to Disnaker for registration
8. Legalization & Validity
- Valid for 2 years, extendable once for 1 year
- Must be registered with Disnaker
- Cannot contradict higher laws
- Applies to all employees unless stated otherwise
9. Renewal & Revisions
- Must initiate negotiation at least 3 months before expiration
- If not renewed on time, previous PKB remains valid temporarily
- Revisions must be mutually agreed and legalized
10. Tips for Drafting a PKB
- Avoid vague terms: use measurable, clear language
- Align with company policies and Indonesian labor law
- Involve experienced HR and legal professionals
- Document all negotiation stages
- Prepare bilingual version if needed (Indonesian + English)
A well-drafted PKB reflects a mature labor-management relationship. It helps avoid industrial conflict, builds trust, and increases workforce stability. Whether you're drafting your first PKB or renewing an old one, having the right structure is key.