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Importance of Industrial Relations in the Industry

1 April 2019

Good industrial relations will actually make it easier for each party to achieve its objectives. This condition is effective for increasing the productivity of industry. In its application, industrial relations has promoted the creation of calm in business, increased production, productivity, and labor skills.

According to Payaman J. Simanjuntak, industrial relations is the relationship of all parties related or interested in the process of producing goods or services in a company. Related or interested parties in each company (Stakeholders):

  1. Entrepreneurs or shareholders, represented by management every day
  2. Workers and labor unions
  3. Supplier or Supplier Company
  4. Consumers or users of products or services
  5. User Companies
  6. The surrounding community and
  7. Government

Besides those stakeholders, industrial relations also involve:

  1. Industrial relations consultants and/or lawyers
  2. Arbitrators, conciliators, mediators and academics and
  3. Industrial relations court judges.

Abdul Khakim explained that the term of industrial relations originated from labor relations. This term initially assumes that labor relations only address issues of relations between workers and employers. Along with developments and reality that occur in the field that the problem of employment relations between workers and employers also involves other aspects. Thus, Abdul Khakim stated that labor relations are not limited to the relationship between workers and employers, but there is a need for government intervention.

The increase of industrial relations also has an impact on company development that will boost the creation of new jobs. Of course, this will help the government in overcoming unemployment. This means that conducive industrial relations will create national stability in the employment sector and stimulate the economic growth in Indonesia. Therefore, to achieve this, the government continues to be present in the supervision on dialogue between company and trade union and in the policy formulation.

According to Haiyani Rumondang, the Director General of Industrial Relations Development and Social Security, she stated that speaking of industrial relations would discuss two different things, which is the interests of workers and employers. Dialogue is the most effective way for building good relations between the two. When one party did not get something they want, then it will be a significant issue. This is where the importance of dialogue between the two parties, one of the outcome of the dialogue is a collective bargaining agreement initiated by the parties in industrial relations.