To facilitate the enforcement of Article 98 of Law number 13 year 2003 on Labor (“Labor Law”), the government issued Presidential Decree number 107 year 2004 on Wage Board (“Decree”). The Labor Law specifically mandated the government to form wage board in the national, provincial and regency/city levels to provide recommendations to the government concerning wage policies.

The Labor Law requires that the Wage Board’s membership shall consist of every parties involved in industrial relation, representative from universities and experts. The Wage Board will thus consists of the representatives of the tripartite party (the government, labor union and the business organisation), as well as additional members from universities and experts. Article 6 of the decree specifically stipulates that the membership composition of government, business organisations and labor union shall be 2:1:1. The Decree is silent on the maximum amount of members nor on the proportional limitation of representatives from universities or experts but requires that the enitire amount should be odd. Presumably, this is invoked to prevent deadlock when voting is required.

The structure, secretariat, composition and authorities of Wage Boards in every level of government has similar characteristics. The term of office of each member is three years. Reappointment of a member may only occur once. Only representative of the government is elligible to become chairman of the Wage Boards. Vice chairmans of the wage boards shall be appointed from members originating from labor union and business organization. The secretary of the Wage Board shall be appointed from members originating from the government. The Wage Board in every level also have the authority to form secretariat and comissions.

Appointments, scope of duties, budgetary provision and requirements of membership of the Wage Boards in each level of government is different. National Wage Board (“NWB”) members are appointed by the President upon the Minister’s recommendation. They must have at least an undergraduate education. NWB is tasked with recommending the government on national wage issues. NWB’s budget will be provided by the Ministry of Manpower.

The Provincial Wage Board (“PWB”) members are appointed by the Governor upon recommendation from the relevant branch of regional provincial government. They must have at least an undergraduate education. PWB is tasked with recommending the Governor on the determination of the Provincial or City minimum wages. PWB’s budget will be provided by the Provincial Government.

The City/Regency Wage Board (“CWB”) members are appointed by the Mayor/Regent upon recommendation from the relevant branch of city/regency government. They must have at least diplome-3 (D-3) education. CWB is tasked with recommending the Mayor/Regent on the determination of the City/Regency minimum wages or the City Minimum Sectoral Wages. CWB’s budget will be provided by the City/Regency Government.

Presidential Decree No. 58 of 1969 on the National Wage Research Board is thereby revoked at law, concordant with enactment of this Decree. Provision of this decree is enforced since its enactment, 18 of October 2004. (mma)