Workplace BipartiteCooperation

A Resource book

Today’s Indonesia has emerged from a turbulent past into a promisingfuture in the new millennium. Its ascent is propelled by current effortsat spreading reformasi, a societal movement that augurs far-reaching

socio-economic and political changes and consequences. This developmentextends to labour and social policy and specially in the field of industrialrelations. The labor law reforms program for example aims to overcome theremaining vestiges of unequal and inequitable relations between the socialpartners labor and capital.

It was within this contemporaneous context of social change and theurgency for basic labor reforms, that the International Labour Organization(ILO) implemented in 2001, the ILO/USA Declaration Project in Indonesiafunded by the United States Department of Labour. The project was designedto promote sound, stable and harmonious industrial relations and the effectiverecognition of freedom of association and collective bargaining in Indonesia.One of the underlying assumptions was that the institution of functioningsocial partnerships at the workplace would be conducive to balanced growthwith equity.

One of the most important activities of the project was appropriatelythe promotion of effective bipartite relations or labour-managementcooperation for greater efficiency and equity at the enterprise level, whichwas endorsed by the 2002 Mid-Evaluation Mission composed of Mr WilliamSimpson, independent leader, Mr. Roger Bohning, ILO, Geneva, and Ms.Sue Hahn, US. Department of Labour and by the follow-up evaluation ofthe proejct later in that year.

To achieve the objective, the project embarked on a national campaignand at the same time focused its activities in 16 pilot enterprises in sevenprovinces during the first phase of the project and 38 enterprises from several

FOREWORD

iii

provinces during its second phase. The project conducted an: assessment ofthe state of labor management relations in the pilot enterprises and assistedin the development of individual workplace cooperation action plans and inthe implementation of the action plans such as the establishment of bipartitebodies or labor management councils. Assistance was also provided indisseminating the results, lessons and experiences of the project to as manyenterprises as possible in Indonesia.

Dr. Jose C. Gatchalian, former Dean and currently professor of theUniveristy of Philippines School of Labour and Industrial Relations, andDr. Miflora M. Gatchalian were mainly responsible for executing the projectactivities promoting labour-management cooperation under Phase I and PhaseII of the project. They hail from the Philippines and are widely recognized asthe foremost experts and exponents of workplace cooperation not only inthe Philippines but internationally as well.

The Resource Book is largely based on the excellent materials developedand effectively used by the Gatchalians in various activities conduced underthe project and the contribution of Dr. Gert Gust, former senior official ofthe ILO and now a professor of, international labour law of the Universityof the Philippines. It is being published for the benefit of employers andworkers including the government who are interested in promoting bipartitecooperation and workplace efficiency and equity.

The ultimate goal of the project is to promote workplace bipartitecooperation not only in the pilot enterprises of the project but also in asmany establishments as possible in the country as an essential component ofsound and stable industrial relations.

Jakarta, August 2003

Alan J. Boulton Carmelo C. NorielCountry Director for Chief Technical AdvisorILO Jakarta ILO/USA Declaration Project

Indonesia

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Page

Foreword ......................................................................................... iii

LMC: Concepts and Practices in a Globalizing World....................... 1

LMC and Collective Bargaining........................................................ 3

Workplace Bipartite Cooperation: The National Context ................. 7

Social Dialogue and Bipartite Cooperation........................................ 9

Communication and Participation .................................................... 10

Setting Up andActivating the LMC Process ...................................... 12

Training Sessions .............................................................................. 15

Lessons and Insights ......................................................................... 17

Introduction of LMC in 16 Pilot Enterprises in Indonesia ................ 19FindingsObservationsHighlightsEvaluationLMC AssociationRecommendations

Concluding Statement ...................................................................... 24

TABLE OF CONTENTS

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Workplace Bipartite Cooperation can be achieved through the LMCapproach, which has come to be a popular acronym in the world of work.LMC could interchangeably denote labor-management cooperation -theconcept, or it could stand for the operational mechanism - the labormanagement council or committee.

A Labor-Management Council (LMC) is a voluntary body composedjointly of representatives from workers and management who meet to identifyand resolve issues of common interest and concern. These issues, if there is aunion-management relationship, are those that are not usually within thescope of their collective bargaining agreement.

It provides a forum for the discussion of problems that might otherwisedevelop into serious disputes. Among the LMC’s objectives are:

LMC:CONCEPTS AND PRACTICES IN

A GLOBALIZING WORLD

1

� the promotion of a non-adversarial relationship between labor andmanagement;

� to facilitate the resolution of common problems, and;

� to enable the parties to achieve mutually beneficial gains.

Essentially a vehicle for increased communication between topmanagement and production workers at the shop level, LMC has proven tobe one of the most efficacious instruments for improving the relationshipbetween workers and employers in the world today.

The two parties need to move carefully and size up the situation in atactful and discreet way. Interview and discussions by key persons from therank-and-file, supervisory and top management levels are essential. Anorientation session possibly with the assistance of experts, on labormanagementcooperation can be conducted before a joint session of selected workers (andlorunion) and management representatives. The discussions in the jointorientation session can be an important gauge on the commitment and thereadiness of both sides to give the LMC a try.

2

In principle, the LMC is ajoint mechanism for both partners to workout joint solutions to commonly shared problems. It may be useful todistinguish between distributive issues, which are generally the subject ofcollective bargaining negotiations, and those issues of mutual concern, whichare generally within the ambit of the LMC.

Increases in wage and fringe benefits are examples of the former, whilematters concerning quality; productivity and health and safety improvementsare joint concerns that can be properly tackled within the LMC. Oneimportant rule to observe is to let the LMC address only those issues that are

LMC ANDCOLLECTIVE BARGAINING

LMC – COMPARED CB

LMC

1. Focus on Production: on joint effortsto enlarge the “cake”

2. Pro-Aktive: detecting and preventingconflict before they happen

3. Win-win position:on issues of mutual concern: healthand safety, quality, etc.

Collective Bargaining

1. Focus on distribution: on division of the“cake” between the parties

2. Reactive: settling disputes after theyhappen

3. Contentious: wages, fringe benefits,T.U. rights, managements prerogatives

Recommendations� Separate LMC from CB. Don’t mix their fungtions!

� Get support and commitment from top leaderships of both sides

� Everyone must participate in join peoblem-solving

3

not being discussed in CBA negotiations. Training in problem solvingtechniques and joint approaches to resolving mutually oriented issues can goa long way in making the LMC a cooperative mechanism for the mutualbenefit of the parties. Its main function is not just to smoothen therelationship but to make it a truly effective and useful vehicle to promotequality and enhance productivity within the organization.

With the establishment of an LMC, the two parties need not wait forthe formal period of collective bargaining negotiations in order to discussurgent matters that threaten to disrupt the relationship, or lower the effectivecompetitiveness of the company. In the competitive environment ofborderless economies, where quality and productivity are the keys to success,labor and management need to get their act together and relate to each othermore harmoniously or risk losing out to their rivals.

CollectiveBargaining

Labour-ManagementCooperation

PRO

BLE

M

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○

○

○

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WAG ESFRING E B EN EFITS

DICIPLIN E/GRI EVANC EH OURS OF W ORKS

ABS ENT EEISMJ OB CLASSIFICATI ON W ORK

STANDARDS L EAV ES,VACATI ONS, ETC

C OMPANY C ONC ERNS,ISSU ES & PR OBL EMS

Management Authority/Hierarchy

ISSU ES:

ENGIN EERING ST ANDARDSPR ODUCTI ON SCH EDUL ES

PR ODUCTI ON M ETH ODSCAPITAL INV ESTM ENT

QUALITY C ONTR OLAFFIRMATIV E ACTI ON

PR OBL EM

C OMP ETITIV E P OSITI ONJ OB SATISFACTI ON

QUALITY/PR ODUCTIVITYTURN OV ER

SAF ETY/H EALTHW ORK M ETH ODS

MAT ERIAL/SUPPLY WASTAG ESIT E OF EQUIPM ENT/

MAT ERIALS

TH E 3-L EGS TOOL

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LMC provides the impetus and the venue forjoint problem-solving.Skilled and motivated employees utilize tools and techniques to upgradeservices and/or products with a view towards greater customer satisfaction.

LMC goes beyond being just a forum for discussion, and becomes aworkshop for new ideas, where teams can work together and work smarter.Oftentimes, these joint efforts result in higher productivity, and productivitygain-sharing.

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6

Indonesia has taken significant steps towards establishing its newindustrial relations system such as in promulgation the Trade Union Act andthe Manpower Act and the imminent passage of a Dispute Settlement Act.The aim is to promote freedom of association and the right to collectivebargaining, and to regulate the relations among the social partners. Thesedevelopments are taking place within the context of socio-politicaldemocratization and the need to improve competitiveness in a globaleconomy.

There is an urgent need to enhance the institutional capacities of theworkers and the employers in the exercise of their respective roles andresponsibilities for the proper functioning of the industrial relations system,particularly at the bipartite or workplace level. The system to be developedmust be in consonance with the socio-cultural context of Indonesia.Optimally, it must be in accordance with national values and principles, asystem that is harmonious, dynamic and based on social justice.

WORKPLACE BIPARTITECOOPERATION:

THE NATIONAL CONTEXT

ESSENCE OF LMC

VoluntaryLegal

Not dependent on the lawWin Win

The right and smart thing to do

7

Basic labor legislation specify the operational measures to be undertakenby the social partners in the Indonesian context, in order that workers andtheir organizations can channel their aspirations democratically, enhance theirskills and expertise together with the welfare of their members and families.Employers and their associations are expected to create partnership, developbusiness, diversify employment and provide for the welfare of their workersin a transparent and democratic way that upholdsjustice.

The policy is for industrial relations to be applied through the operationalmechanisms of bipartite institutions, which presupposes to aims for bringingabout labor management cooperation. There is therefore a close similaritybetween LMC and Bipartite Institutions under the ManpowerAct.

LEGAL BASIS FORWORKPLACE BIPARTITE COOPERATION

The legal basis for bipartism under the new Manpower Act can alsoserve as the main basis for the establishment of LMC and WorkplaceBipartite Cooperation the act provides:

� Every enterprise employing 50 workers or more is obliged toestablish a bipartite cooperation institutions (Art 106.);

� The institutions shall function as a forum for communication,consultation and deliberation on labour issues in an enterprise;

� The membership of the institutions shad include the employer’srepresentatives and workers’ representatives who aredemocratically appointed by workers to represent their interestin the enterprise;

� Ruling concerning the procedures for establishing themembership of the bipartite shall be determined and specifiedundera ministerial decision.

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As defined in the ManpowerAct, a “forum kerjasama bipartit” shallrefer to a forum of communications, consultations and deliberationsconcerning things related to industrial relations in an enterprise whosemembers consist of entrepreneurs and workers’ or laborers’ organizations, orrepresentatives (unsur pekerja)”. An important objective of the InternationalLabor Organization (fLU) is the promotion of social dialogue, which isdefined to include all types of negotiation, consultation or simply -exchangeof information between, or among, representatives of governments, employersand workers, on issues of common interest relating to economic and socialpolicy. Dialogue is at the heart of social harmony, problem solving, conflictresolution and even healing. In Indonesia, LMCs can be the operationalvehicles for social dialogue in as many workplaces and undertakings,nationwide.

SOCIAL DIALOGUE ANDBIPARTITE COOPERATION

INTERNATIONAL LABOUR STANDARDS RELATED TOWORKPLACE BIPARTITE COOPERATION

(ILO CONVENTIONS AND RECOMMENDATIONS)

� Collective Bargaining Convention, 1981 (No. 154);

� Cooperation at the Level of the Undertaking Recommendation, 1952(No. 94);

� Consultation (Industrial and National Levels) Recommendation,1960 (No. 113);

� Communications within the Undertaking Recommendation, 1967(No. 129);

� Examination of Grievances Recommendation, 1967 (No. 130).

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Communication and participation are two of the underlying principlesof labor-management cooperation. The LMC can serve as a valuable channelof communication between the partners, providing a forum where both canregularly dialogue about common everyday concerns. Brewing irritants andpotential issues that can give rise to conflicts could be tackled early on anddefused before these develop into full-blown disputes.

Participation provides dynamism to the relationship by enabling workersand employees the opportunity to contribute their creative and innovativeideas towards the enhancement of quality and improvement of productivity.LMC gives the impetus and the opportunity for joint problem solving. Skilledand motivated employees utilize tools and techniques to upgrade services

COMMUNICATIONAND PARTICIPATION

COMMUNICATION & PARTICIPATION: BASICUNDERPINNINGS OF LMC

� LMC is a forum wherein employees and management canexpress their problems and felt needs to each other;

� Information-sharing about preset and anticipated issues thatmay affect the workforce, the company or both;

� Regular interchanges can lead to mutual understandings,concensus, and the resolution of issues and concerns;

� LMC can serve as an organizational communication mechanismfor harmonious and productivity work relations.

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and/or products with a view towards greater customer satisfaction.LMC therefore goes beyond being just a forum for discussion, and

becomes a workshop for new ideas, where teams can work together andwork smarter. Oftentimes, these joint efforts result in higher productivity,enhanced quality of products and services and consequently, improvementsin work life and working conditions.

Training in problem solving techniques can go a long way in makingthe LMC a cooperative mechanism for joint benefit. Its main function isnot just to make the relationship smooth but, more importantly, to developit as a truly effective and useful vehicle to promote quality and enhanceproductivity within the organization.

By the same token, training in communication skills is also essentialfor LMC officers and members. Mutual understanding and trust areimportant for securing industrial harmony and these can only be achievedthrough effective dialogue and information sharing. Listening skills need tobe improved on both sides since this determines the effectiveness of theinteraction. Even a seemingly simple matter as how to conduct meetingsproductively and efficiently need to be learned in an experiential manner.

Other relevant training topics may be included in accordance with theneeds of the particular organization. There is, at present, an innovative andincreasingly used approach called “principled negotiations” for resolving labor-management disagreements. By a mutual strategy of negotiating on the merits,this new process can help stabilize and harmonize the long- run relationshipof the two principal partners in production. Basically a general approach toany negotiations between opposing parties, its application to collectivebargaining has been a particularly efficacious one. Its main feature is anintensive “immersion exercise,” which is conductedjointly for the negotiatingpanels of the two parties preparatory to the actual conduct of collectivebargaining.

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The impetus for installing the LMC is provided, more often than not,by actual and perceived problems in the management-workers (or union)relationship. In some instances, the traumatic experience of strike or labordisputes prompts many companies’ decision-makers to seek an alternative,more harmonious approach to labor management relations. In others, a feltneed for more stable and productive interaction between the parties isrecognized as the springboard for efforts to improve the competitiveeffectiveness of the firm. Some companies utilize LMC for initiating a qualityimprovement program, targeted specifically to obtain the coveted ISO 9000Certification - an internationally awarded recognition of world class capability.

An assessment of the state of the relationship between the partners, itshistory of Labor-Management relations, and the feasibility of installing aCouncil will be very helpful. It should be determined whether there is a

SETTING UP AND ACTIVATINGTHE LMC PROCESS

12

supportive level of commitment on both sides - to provide actual resources,time and support for the activities of the LMC. A positive assessment leadsto the formulation of an intervention strategy, which usually includes thescheduling ofjoint training programs.

The training objectives must include an action plan, formulated in groupworkshops, for the participants to carry out upon return to the company.This plan provides for several concrete steps that have to be immediatelyundertaken. They include specific actions for:

1. Electing workers/union representatives and selecting managementcounterparts to compose the council;

2. Determining the appropriate organization structure and size;

3. Selecting the council chairman and other officers, including their terms,duties and responsibilities;

4. Deciding the protocols, e.g., time, venue, agenda, and related steps tosuccessfully activate the LMC.

THE LMC OPERATIONAL GUIDLINES

� The inner circle represents a dynamic yin-yang relationship betweenthe major partners labour and management. Their representativesserve as the joint Steering Council (SC) for all LMC activities.The SC decides on all matters brought before it by consensus.

� Membership ratio between both sides need not be equal since alldecisions are arrived at by consensus. The yin-yang symbol signifiesjoint sharing and shaping of decisions within the Steering Council.

� Their decision depends on the particular situation, and the relativeposition of the parties at a given time. As such, it is a relationshipof interdependence and rationality, not an equation of power orforce of numbers.

� Under the active direction of the core body (SC), smaller teams ortask forces undertake problem-solving activities, or fuction as studygroups for assigned issues of problems.

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5. The win-win relationship in LMC is emphasized by means ofsimulation exercises and other “discovery” techniques used in theintervention activities.

The start-up of the process usually begins when the company andworkers representatives meet to discuss ways in improving labor-managementrelations in their organization. They may have perceived a serious deteriorationof working relationships over time and/or anticipate major disputes andindustrial conflict in the future. Action is urgently needed to save the situationand for the parties to initiate measures to restore the relationship to normal,or at least open up communication lines to enable both parties to discussmutual problems, issues and concerns.

LMC STRUCTURE

Steering Council

� To operate the LMC concept, as structure can be set up;

� The inner circle represents the dynamic yin-yang relationshipsbetween the major partners labor and management. Jointly, theyserve as the Steering Council for all cooperative activities;

� The SC decides on all matters brought before it by consensus.

Small Teams/Task Forces

� Under active direction of the core body (SC), smaller teams or taskforces undertake problem-solving activities or function as studygroups for assigned issues or problem.

Recommendation

� Provide institutional support for LMC (an office, regular budget,meeting venue, computer with internet cable, full-timer staff, etc.)

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Having secured a modicum of support from key leaders of both sides,a series of orientation sessions can be conducted for as many employees andworkers at all levels as possible. The aim is to spread the message aboutLMC, and to impress everybody that the top leadership of both union andmanagement are committed to, and supportive of, the effort. The benefitsto be gained from its establishment, its advantages and limitations may alsobe clarified during these meetings. These sessions also afford a chance to spotpeople with good leadership potentials, capabilities for problem solving, forinclusion in the intensive training of the first batch of LMC members andofficers.

TRAINING SESSIONS

LMC STEERING COMMITTEE (SC)

Functions/Responsibilities

� Conduct regular (preferably weekly) meetings;

� Asses issues or problems identified by SC members or received fromemployees through suggestions box or other channels;

� Act (go or no go) on problem solutions recommended by task forcesor teams. (If “no go” provide acceptable alternatives);

� Create task forces or teams base don issues / problems identified;

� Disseminate news and info regularly on LMC achievements, trainingprograms, other joint cooperation -activities;

� Schedule company wide presentations of LMC outputs, recognitionand awarding of top teams regularly (ex. Twice a year).

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Ideally, an intensive training should follow shortly after all the orientationprograms have been completed. This is usually given to an optimally sizedgroup (of 20-25 participants), with approximately equal representations fromworkers and management. An overnight (2 days and one evening) trainingprogram is quite effective, especially if held out of town or some distancefrom the worksite. “Urgent” telephone calls or other interruption from theoffice or elsewhere should not be allowed to distract the attention of theparticipants during the sessions of the intensive course.

The outputs of the training program usually include a resolution bythe participants that the company initiate the setting up of the Labor-Management Council (LMC), with a selection process for picking up theinterim officers, a future work plan, the first meetings of the LMC andprovisions for the continuing operation of the Council.

LMC TEAMS / TASK FORCES

Functions and Responsibilities

� Conduct necessary meetings to solve problems / issues assignedby Steering Committee;

� Develop report or results and recommendations using 6 Ds;

� Standardize approved solutions and approaches to problems;

� Disband when recommendations have been implemented andstandardized. Re-group with new members for new tasks;

� Rotate team memberships, encourage participation of all workers;

� Organize continuous and company wide training inproblemsolving, communication and team work, leadershipsskills.

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Not every company needs an LMC, especially if there is no felt needfor one. Yet it is sometimes too little and too late to set up an LMC whenthe problems in the relationship between union and management are alreadyfar advanced. Like an aspirin, the LMC works best as an early preventivemeasure.

From experience, it is inadvisable for an LMC to be set up in thefollowing circumstances:

1. when a strike or labor dispute is going on, or is imminent,

LESSONS AND INSIGHTS

KEY ISSUES IN FORMING LMC*

� Fear that collective bargaining and the role of unions would bethreatened or weakened;

� Fear that LMC is subverting the collective bargaining process;

� Fear that use employee problem-solving ideas and innovations willeliminate jobs and cause lay-offs;

� Fear that unions will be accused of “going to bed with management”;

� Suspicion that management is merely doing cosmetic changes byintroducing something new in an attempt to confuse employeesand the union from the real issues;

� Cooperation programs are looked at as ad hoc attempts rather thanan overall mission of the organization.

* Balakrishnan Parasuramon, “Workplace Cooperation: A View from Southeast Asia”

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2 when a collective bargaining negotiation is in process or is about

to start, and

3. When neither side is willing nor ready to participate in an LMCprogram.

An LMC is a purely voluntary effort, and must have the sincere supportand commitment of both sides. It cannot be imposed. It is ajoint partnershipbased on the principle of mutual effort for mutual gain. Both sides mustwork on it in order to make the program succeed and be sustainable.

One of the gravest pitfalls to avoid on the part of management is toallow the development of a “dole-out relationship” in the LMC process.This happens when the meetings become mainly occasions for the union orthe workers’ representatives to ask for concessions from the other side. Somemanagers take the easy way out and “buy the peace” by giving in to as manydemands or as much of the claims as management can afford, hoping thatthis will satiate the other side. They soon discover that there can be no end tothe asking. Many unionists and managers forget that the LMC works on theprinciple of a “give and take”, and that both sides must be prepared toaccommodate and to sincerely consider each other’s requests. The giving andthe taking has to come from both sides.

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Under Phase 1(2001 2002) of the ILO/USA Declaration Project inIndonesia, direct technical assistance was provided to 16 pilot projectenterprises representing various industries in seven provinces in setting up orimproving bipartite bodies aimed at promoting workplace cooperation. UnderPhase 11(2203-2004), the project extended the program to a new set 38enterprises from 10 provinces. The assistance consisted of the conduct of asurvey on the status of labour-management relations in each company, trainingworkshops, formulation and implementation of action plans, monitoringand evaluation. The result of the program for the 16 enterprises follows:

Findings� All the participating companies reported having a bi-partite institution

in their organizations some as early as the start of their operations.Many reported setting up their own in compliance with governmentrequirements, effective since 1998. These bipartite arrangementsprovided an opportunity for both management and workers to meeteach other during regular meetings;

� In almost all cases, the project participants claimed that their bipartiteinstitutions were similar to that of Labor Management Councils(LMC). However, a closer examination showed that the bipartiteinstitutions differed from LMCs in structure and function. Forinstance, joint problem-solving utilizing modern tools and techniquesfor quality and productivity improvement was largely absent formthe activities reported by the former. In many cases, the bipartitemechanism was also utilized for grievance handling and negotiationson terms and conditions of work. LMCs normally do not tackle

INTRODUCTION OF LMC IN16 PILOT ENTERPRISES IN

INDONESIA

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collective bargaining issues;

� Some of the participating companies expressed a desire for furtherimprovement through the concept and practice of labor-managementcooperation. - Like many others, however, they believed that this canonly be realized if there is full support and commitment of their topmanagement for the LMC.

Observations� While all participating companies viewed their bi-partite approaches

as similar to the LMC, it was observed from the workshoppresentations that company directions emanated from the top andcommunications were mostly top-down. Except for a few, no evidencewas shown that LMC activities were company-wide in scope;

� Since the structures for implementation and continuity were notestablished, the sustainability of LMC practice could not be assured.For example, their bipartite arrangement lacked the usual nucleus ofan LMC, such as a steering committee with joint representation;

� Except for one of the companies in the pilot project, others had noprovisions for measuring changes and, therefore, could not determinethe extent of improvements that could be the direct results ofbi-partiteproblem-solving activities. Neither were there parameters that can showchanges resulting from LMC operations;

� Nevertheless, practically all companies reported that their bipartiteinstitution was their major approach to enhance communicationbetween workers/union and management.

HighlightsSome highlights from company reports during the evaluation are

significant and particularly useful for purposes of future planning. Onecompany, for instance, identified four major problems encountered in theprocess of LMC formation:

� There was difficulty to motivate members to attend meetings;

� It was difficult to form committees or task forces for problem solving;

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� Members have different perceptions of what the LMC is all about;

� In some companies, distrust and suspicion still existed betweenmanagement and labor. Many persist in thinking that the LMC is justa management strategy to weaken the union;

� Participants from another company identified certain problems whichare also shared by other companies;

� Recommendations resulting from the bi-partite meetings were notassured of approval by the Board of Directors or top decision-makers;

� LMC issues may be filtered and can be put aside if there are othermore urgent matters;

� When there is a change of ownership or leader in the company, themanagement style can also change. In some instances after the changes,the LMC may be set aside or deemed no longer needed.

EvaluationIn spite of the difficulties enumerated above, nevertheless, many

companies perceived significantly positive results from the implementationof the ILO Pilot Project workshops. From the terminal evaluation reports,some noteworthy developments were recorded, thus:

� One company reorganized its LMC and elected new officers upon thereturn oftheir participants;

� In other company, many leaders in management appreciated the newknowledge and approaches shared during the dc-briefing of thereturning participants. The LMC they had established long ago hadremained weak and ineffectual. This was revived after attending projectprogram on Industrial Relations, Human Resource Development andparticipated in the workshops on quality of work and work life. As aresult of the LMC revival, several plans were activated, and these resultedin maj or benefits to the company;

� Another company reported reactivating their LMC in Riau afterattending the ILO Workshop in Medan in May 2002. A change inmind-set and a better understanding of the LMC approach resulted atthe end of the project’s program;

� One of the pilot enterprises, which consist of 52 companies in East

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Java, showed great interest in the LMC, by sending participants to theproject’s workshops. This interest intensified especially after thecompany was hit by a strike soon afterwards. Management officialsindicated their commitment to be involved in future activities onLMC;

� Another company stated that the LMC project has produced thefollowing:

� There was improvement of the bi-partite practice in the company;

� Communication between management and workers was alsoenhanced.

� The bi-partite function helped create peace and harmony andimproved discipline among the workers, focused on theimprovement of the workers’ welfare and developing andmotivating the workers as partners with the employers.

LMC AssociationIn Batam and Surabaya, there was a general consensus that it would be

worthwhile to organize an LMC Association in every major region inIndonesia like in East Java, West Java and Central Java. However, it wasdeemed important that companies should first strengthen their LMC practicesso that there would be a common interest among the members of theAssociation. In Surabaya, a pilot enterprise volunteered to assist in theformation of the LMC Association for their region. Likewise in Batam, twocompanies expressed willingness to assist in the formation of an LMCAssociation.

Since there is substantive interest to organize an LMC Association inBatam and in Surabaya, perhaps steps should be taken about networkingwith these groups with a view to eventually form regional LMC groupings.Continuing contacts with the ILO on matters related to LMC and bi-partiteinstitutions can lead to the formation of an ASEAN network to furtherpromote its concept and practice,- and thereby contribute to more stableand harmonious industrial relations systems among the countries in the region.

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Recommendations� Since it is a general feeling among most company participants that

getting full support from top management for change in LMCdirections is difficult, then it may be best to pursue the proposeddialogue among decision-makers like CEOs of major companies,APINDO, Depnakertrans and Trade Unions. It is also proposed thatthe dialogue be replicated in three key areas: Jakarta, Batam andSurabaya;

� The concept of bi-partism, as presently understood to be union/management relations with collective bargaining as the chief methodof interaction, should be clearly delineated and distinguished from theLMC. This is one of the reasons why many of the participants did notconsider the LMC as a separate and distinct concept and also explainstheir hesitation to adopt it as a complementary strategy since somebelieve that their current practices are already working very well forthem. For this reason, it may be advisable to provide continuedguidance and support to selected enterprises including some of the 16pilot enterprises to enable them to successfully establish maintainworking LMCs in their respective companies;

� It seems that some of the large companies, especially the older onesfirmly believe that their current (but traditional) approaches are workingout well for them. They may not be in need of further assistance inthis regard and opportunities should be spread out to new enterprises,which are interested in LMCs;

� To ensure the proper implementation of LMC among interestedcompanies, it would be advisable to develop in-house LMC trainerswho could serve internal promoters ofofLMC Such an approach willserve to enhance the multiplier effect of the programme;

� Planning for short or long term directions is not a common practiceamong companies and neither was there company-wide participationin the planning process. This is an area, which would need furtherdevelopment among leaders in the company but this can take time.Hence, competent and skilled trainers in major areas of LMC arerequired to be developed for the long run.

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CONCLUDING STATEMENT

The programme to promote workplace labour management cooperationand effective bipartite institutions has broken new ground in the world ofwork and work relations in Indonesia. On hindsight, despite the initialdifficulties, results of the undertaking has been positive and has shown greatpotential in contributing to the broader objective of a more stable, democraticand progressive labor relations in the country. Its achievement andsustainability would ultimately require a much bigger effort and would dependon firm and sustained determination and commitment of the tripartiteconstituents.

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