JRSSEM 2022, Vol. 02, No. 5, 853 – 874

E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494

DOI: 10.36418/jrssem.v2i05.345 https://jrssem.publikasiindonesia.id/index.php/jrssem

INDONESIAN AND MALAYSIAN LABOR LAW

COMPARATIVE STUDY IN ENHANCING THE

COMPETITIVENESS OF WORKERS IN THE FRAMEWORK

OF THE ASEAN ECONOMIC COMMUNITY

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

1,3,5

School of Business Management, Institut Teknologi Bandung, Indonesia

Faculty of Law Universitas Padjadjaran

Politeknik Pajajaran ICB Bandung, Indonesia

Universitas Pendidikan Indonesia

e-mail: zulpardisyah@gmail.com

*Correspondence: zulpardisyah@gmail.com

Submitted

: 28 November 2023

Revised

: 14 December 2023

Accepted

: 25 December 2023

Abstract: The Employment conditions have various labor problems ranging from wage policies,

working time, occupational safety and health, social security and maternity protection, equality

of opportunity and non-discrimination, and freedom of association, to the lack of employment

opportunities and the increasing unemployment rate. Within the framework of the MEA,

Indonesia and Malaysia need to develop labor institutions through the development of human

resources in preparing competent workers according to the directives of the AEC blueprint. HR

development can be carried out in accordance with the rule of law by preparing the workforce

of each country at the ASEAN level. MEA facilitates the movement of skilled workers to be

accepted in ASEAN member countries and the flow (in and out) of labor between ASEAN

member countries is very open, for that there will be competition between countries in skilled

labor.

Keywords: Internationalization MSMEs Networking Welfare.

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

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DOI: 10.36418/jrssem.v2i05.345 https://jrssem.publikasiindonesia.id/index.php/jrssem

INTRODUCTION

The ASEAN Economic Community

(AEC) has characteristics as a market and

production base in the ASEAN region with

the aim of being more dynamic and

competitive, having equal development,

and supporting economic integration in

the ASEAN region and regions outside

ASEAN. In line with the ASEAN Community

Vision 2025 in the 3 pillars of ASEAN

cooperation, namely;

1. ASEAN Political Security Community

2025: a rules-based, community-

oriented, and community-centred

one; a resilient community, in a

peaceful, safe and stable area; and a

community with institutional

institutions.

2. ASEAN Economic Community 2025: a

highly integrated and cohesive,

competitive, innovative and dynamic

economy; increased connectivity and

sectoral cooperation; and resilient,

inclusive, community-oriented, and

people-centred ASEAN.

3. ASEAN Socio-Cultural Community:

including communities that value a

high quality of life, equal access to

opportunities for all and protect

human rights; sustainable

communities that support social

development and environmental

protection through effective

mechanisms; a dynamic and

harmonious society aware of and

proud of its identity, culture and

heritage; resilient communities with

enhanced communities and

capabilities to adapt and respond to

social and economic vulnerabilities,

disasters, climate change and

emerging threats and challenges;

The ratification on ASEAN

Trade in

Goods Agreement

(ATIGA), ASEAN

Framework Agreement on Services

(AFAS),

dan ASEAN

Comprehensive Investment

Agreement

(ACIA) to ensure an integrated

flow of goods, services and investment in

the ASEAN region. In addition, ASEAN also

has an agreement on a Mutual Recognition

Arrangement (MRA) which aims to facilitate

the transfer of skilled workers which so far

has focused on 8 (eight) professions,

namely technicians, nurses, architects,

tourism professionals, accountants, doctors

and doctors. tooth. These 8 (eight)

professions are the focus of employment in

AEC 2025, so Indonesian professional

workers will have enormous opportunities

to work in international standard

companies spread across all ASEAN

member countries, for this reason it is

necessary to improve the quality of experts

and increase human resources.

competitiveness through increasing the

competence of the workforce which has an

impact on improving the quality and quality

of products.

Employment is fundamental in the

implementation of AEC 2025, According to

data released by the World Economic

Forum in the Global Competitiveness

Report 2019–2020,

854 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

Gambar 3. ASEAN Global Competitive Index 2020

In the ASEAN region, Indonesia's

competitiveness ranking is still lower than

Singapore's in the first position, Malaysia in

the 27th position, and Thailand in the 40th

position. Indonesia's position is still above

Brunei Darussalam, the Philippines,

Vietnam, Cambodia and Laos.

Gambar 4. ASEAN HCI/IPM

The Central Statistics Agency (BPS)

recorded the Human Development Index

(HDI) as an indicator of Indonesia's human

capital level in 2019 of 71.92, higher than

the 2018 HDI which was 71.39, but

compared to other ASEAN countries,

Indonesia's Human Capital position is still

lower than Singapore, Malaysia, Brunei

Darussalam, and Thailand. Human

Development Index/HDI, Indonesia is

ranked 6th in ASEAN and 111th in the world

from 189 countries, in ASEAN Indonesia is

in the middle rank in this case Indonesia is

still lagging behind Singapore, Brunei

Darussalam, Malaysia, Thailand, and the

Philippines.

Compared to Singapore, Brunei, and

Malaysia, for the four indicators consisting

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

| 855

of four main indicators, namely; Life

Expectancy, Expected Years of Schooling,

Average Length of Schooling, and per

capita expenditure adjusted for Purchasing

Power Parity (PPP). Indonesia is almost

superior in all aspects compared to the

Philippines except in terms of average

length of education, while compared to

Thailand, Indonesia excels in RLS (Average

Length of Schooling). There are 12 pillars

that serve as productivity references,

namely institutions, infrastructure,

macroeconomic environment, health and

basic education, higher education and

training, goods market efficiency, labor

market efficiency, financial market

development, technological readiness,

market size, business sophistication and

innovation.

Literature Review

The State of Law and Welfare

According to Esping-Anderson

(1999), the welfare state basically refers to

the active role of the state in managing and

organizing the economy which includes the

responsibility of the state to ensure the

availability of basic welfare services at a

certain level for its citizens. In general, a

country can be classified as a welfare state

if it has four main pillars, namely: (1) social

citizenship; (2) full democracy; (3) modern

industrial relations systems; and (4) rights

to education and the expansion of modern

mass educations systems. These four pillars

are possible in a welfare state because the

state treats the implementation of social

policies as the granting of social rights to

its citizens. These social rights are

guaranteed like property rights, cannot be

violated (inviolable), and are granted on the

basis of citizenship (citizenship) and not on

the basis of performance or class.

The welfare state according to

Esping-Andersen et al (2002) refers to an

ideal model of development that is focused

on improving welfare through giving the

state a more important role in providing

universal and comprehensive social

services to its citizens. In the UK, the

concept of the welfare state is understood

as an alternative to “The Poor Law” which

often creates stigma, because it is only

intended to provide assistance to poor

people. Unlike the system in The Poor Law,

the welfare state is focused on

implementing an institutionalized social

protection system for everyone as a

reflection of the existence of citizenship

rights, in vice versa, as the state obligations.

The welfare state is aimed at providing

social services for the entire population –

parents and children, men and women, rich

and poor, at is best. It seeks to integrate the

source system and organize the service

network that can maintain and improve the

welfare of citizens in a fair and sustainable

manner.

Liberalization and Regionalism Theory

Adam Smith (in Stiglitz, 2000) views

that economic development as a process of

economic growth and economic

development by utilizing market

mechanisms. An economy will grow and

develop if the market mechanism works

well and perfectly. The conditions needed

to achieve economic growth are investment

and specialization which are controlled

through market mechanisms. The

government's role is only to make the

market mechanism work well. Therefore,

856 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

efforts that must be made by the

government are maintaining security, law

enforcement, and providing public goods.

In terms of the growth process of

production, Adam Smith put forward 3

(three) main elements, namely as follows:

1. Human resources, namely the

increase in population;

2. An increase in the stock of capital

goods (capital accumulation) because

public savings are invested by the

owners of capital in the hope of making

a profit; and

3. Specialization and division of labor

accompanied by market expansion and

development of domestic and foreign

(international) trade.

In addition, Adam Smith argues that

government intervention and activities in

economic relations with other countries

only act as a liaison and guarantee the

freedom of transactions of economic

actors in their country without

discrimination and obstacles. Meanwhile,

intervention in cross-territory trade

activities must be carried out and

suppressed to a minimum. According to

Adam Smith, through a free trade system,

resources will be utilized as efficiently as

possible, than the achievement of welfares

will be more optimal.

Conversely, the perspective on legal

system has actually provided an optimal

protection space for individual freedom to

trade based on liberalization. In oversee

the trade, every individual is protected and

prioritized to respect the principle of

freedom, the principle of legal equality and

the principle of reciprocity. (Wacziarg,

2008; Dix-Carneiro, 2017)) Aligned with its

function as social engineering and social

empowering, the content material can be

translated to align the paradigm that is

devoted to profit calculation. Thoroughly,

justice is the main variable required of

individual independence, than the freedom

of every economic actor cannot be limited,

except in relation to a matter that violates

the norms of morality, religion and public

order. Even so, a policy, regulation or law is

not justified to reduce this freedom.

Labor, Employment and Global

Development

Employment is one of the vital

supports for all lines of business because

currently human resources and labor are

the spearhead of the implementation of

work and business activities, both

traditional and business (gilda) businesses

that have been supported by sophisticated

technology. Employment law first appeared

in Europe as a reaction to the changes

brought about by the Industrial Revolution.

The invention of the steam engine in

England around 1750, opened up

opportunities to produce goods/services

on a large scale. Prior to that, traditionally,

work in agriculture was carried out using a

feudalistic system, where workers or

laborers worked on land owned by

landlords and made a living from the

produce of the fields they worked on

themselves. Since the Middle Ages, in

urban areas work has been localized in

small work centres and organized by

groups of workers with certain skills who

monopolize and regulate certain fields of

work. However, the new class of

entrepreneurs who have emerged

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

| 857

demands freedom in order to expand the

scope and range of their activities.

The French Revolution (1795) became

a symbol of the demands of a new group of

modern society that began to emerge,

namely the proclaimed necessity of

equality for every citizen and freedom of

trade. Law at the level of the nation-state is

codified into a code of law based on new

principles such as freedom of contract and

absolute property rights over objects.

Unions that were considered to be a legacy

of workers' associations into guilds were

abolished.

Napoleon spread the new idea of

such a law throughout the European

continent. However, during the 19th

century it seemed that the new freedoms

mentioned above could only be enjoyed by

a small group of elites who later emerged.

The majority of the working

community/unskilled laborers are no

longer able to enjoy their traditional way of

life (which used to be based on agriculture)

and are forced to make a living as factory

workers. The above freedoms (with respect

to freedom of contract and property rights

absolute) dramatically imposing a

completely different lifestyle on the

majority of the working-age population.

The Development of Labor Law in ASEAN.

The term ius gentium interpreted as

the law of the nations, has been proposed

by Cicero since Roman times. The use of the

term ius gentium in its development often

changed until finally the term international

law was established. The term of

international law was first used by Jeremy

Bentham in 1780 to refer to the concept of

ius gentium.

International law can be seen as "a

system of agreements between

international actors", namely countries that

formulate how relations between countries

are carried out in a conducive manner, or in

other formulations, international law is said

to be "as a body of rules that countries feel

an obligation to obey. in".

If international law is connected with

the doctrine of state equality which

explains that in the perspective of

international law states have the same and

equal position, this equality of position is a

reflection of the existence of a state

sovereignty and this doctrine is closely

related to the theory of natural law which

states that the state by its nature

considered as free beings and thus one

country with another country has the same

position in international law. (Goldsmith &

Posner, 2005)

According to Kusumaatmadja (2003),

the international law is the whole of the

legal rules and principles governing

relations or issues that cross state borders

(international relations) which are not civil

in nature. International law does not have

an executive, legislative, or judicial body,

but states can submit to the provisions of

international law at their will. The

submission of a state to international law

makes the provisions of international law

applicable in public matters that cross state

borders or outside state boundaries.

In carrying out the ASEAN economic

integration process towards AEC 2025, in

accordance with the ASEAN Charter, an

ASEAN institutional structure was formed

consisting of the ASEAN Summit, ASEAN

Coordinating Council, ASEAN Community

Council, ASEAN Economic Ministers,

858 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

ASEAN Free Trade Area Council, ASEAN

Investment Area Council, Senior Economic

Officials Meeting and the Coordinating

Committee. The initial step of ASEAN's

readiness to carry out its economic

integration after the enactment of the

ASEAN Charter (ASEAN Charter) is the

appointment of the Deputy Secretary

General of ASEAN for the ASEAN Economic

Community (AEC) with the task of

overseeing the implementation of the AEC

Blueprint, monitoring and facilitating the

process of regional readiness to face the

global economy, as well as supporting the

implementation of initiatives others in the

context of ASEAN economic integration

At the initial ASEAN through AFTA

became effective in 2008, but after being

corrected in September 1994 in Chiang

Mai, it was moved to 2003. At that time,

AFTA covered various fields of cooperation

including: industry, finance and banking,

investment, food, agriculture and forestry,

minerals, energy, transportation and

communications, tourism, services, and

intellectual property. The main purpose of

implementing the AFTA concept is to

increase the volume of trade among

member countries (trade creation). This

situation was made possible because

through the free trade area, import duties

(tariffs) on all trade commodities from all

member countries were lowered to close to

0 percent. In addition, obstacles that are

not caused by import duties, such as the

application of import quotas for certain

commodities must also be eliminated. The

main purpose of implementing the AFTA

concept is to increase the volume of trade

among member countries (trade creation).

This situation was made possible through

the free trade area, import duties (tariffs) on

all trade commodities from all member

countries were lowered to close to 0

percent. In addition, obstacles that are not

caused by import duties, such as the

application of import quotas for certain

commodities must also be eliminated.

In the Kuala Lumpur Declaration on

November 22, 2015 which focused on the

four pillars of the new era of the ASEAN

Economic Community 2025, namely 1) an

integrated and cohesive ASEAN economy;

2) a competitive and dynamic ASEAN; 3)

increased connectivity and sectoral

cooperation; and 4) a resilient, inclusive,

and people-oriented and focused ASEAN;

and ASEAN Global. The AEC Blueprint 2025

will focus on cooperation on empowering

micro, small and medium enterprises or

MSMEs in ASEAN, electronic commerce (e-

commerce), and increasing engagement

between the government and the business

world to get views and input from business

actors in deepening economic integration

in the region, as well as increasing

connectivity in ASEAN. ASEAN has signed

ATIGA, AFAS, and ACIA to ensure the free

flow of goods, services and investment in

the ASEAN region.

In addition, ASEAN also has an

agreement on a Mutual Recognition

Arrangement or MRA which aims to

facilitate the transfer of skilled workers

which so far has focused on 8 (eight)

professions, namely technicians, nurses,

architects, tourism professionals,

accountants, doctors and dentists. These 8

(eight) professions are the focus of

employment in AEC 2025, so Indonesian

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

| 859

professional workers will have enormous

opportunities to work in international

standard companies spread across all

ASEAN member countries, for this reason it

is necessary to improve the quality of

experts and increase human resources.

competitiveness through increasing the

competence of the workforce which has an

impact on improving the quality and quality

of products in AFTA. Hence, The MRA does

not equate the automatic recognition of

the free movement of skilled workers in the

ASEAN region. For other professions, MRAs

only lay down the principles and framework

for negotiating the recognition and

mobility of conditions for professionals on

a bilateral or multilateral basis and remain

subject to various national regulations.

The Development of Labor Law in

Indonesia

According to the mandate set forth in

both the 1945 Constitution and the ICESCR,

the work obtained must guarantee the

basic rights of workers/laborers and

guarantee equal opportunity and

treatment without discrimination on any

basis to realize the welfare of

workers/laborers and their families while

taking into account the progress of the

business world. With the role and position

of the workforce, it is necessary to develop

manpower to improve the quality of the

workforce and their participation in

development and increase the protection

of workers and their families in accordance

with human dignity. This has led Indonesia

to ratify the ICESCR through a law.

Human rights are the core material

contained in the 1945 Constitution, while

the definition of Human Rights in Article 1

point 1 of Law no. 39 of 1999 concerning

Human Rights asserts, Human Rights are a

set of rights inherent in the nature and

existence of every human being as a

creature of God Almighty and is His gift that

must be respected, upheld and protected

by the State, Law, Government and every

human being for the sake of honor and

protection of human dignity.

In Asshiddiqie's (2010) opinion,

human rights are inherent in every human

being, therefore human rights are different

from the definition of the citizen's rights,

but because human rights have been

explicitly stated in the 1945 Constitution,

they are also officially become the

constitutional rights of every citizen or

Constitutional Right. Human rights related

to the protection of workers are regulated

in the 1945 Constitution Article 27

paragraph (2) which emphasizes that every

citizen has the right to work and a decent

living for humanity, and Article 28 D

paragraph (2) confirms that, everyone have

the right to work and receive fair and

proper remuneration and treatment in an

employment relationship.

Furthermore, to realize these

concepts, the Government promulgated

Law Number 11 of 2020 concerning Job

Creation (Omnibus Law), complemented by

material in Industrial Relations as a special

court regarding legal issues between

employers and workers, which is further

regulated in Law -Law Number 2 of 2004

concerning Settlement of Industrial

Relations. Due to its comprehensive nature

in regulating the rights and obligations of

employers and workers in Indonesia and

the complex object of regulation, the

Manpower Act is the law that is most

860 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

frequently submitted for judicial review to

the Constitutional Court, which resulted in

the repeal of several articles and the

implementation of several additional

regulations and the principles of protection

for workers. This is important considering

that employment is one of the vital sectors

that affects the general welfare of citizens.

Related to the practice of opening a

free market by Indonesia with other

countries, other international

organizations, and especially ASEAN in the

MEA, it is also important to pay attention to

aspects of developing the quality of the

workforce, capacity building, as well as

closer consultation and communication.

regarding policies in practice, competency

standards, qualification systems and

licensing of skilled workers both

domestically in facing the AEC in

Indonesia's domestic competition, as well

as Indonesian migrant workers who

compete in the MEA free market outside

Indonesia, which this is regulated in

agreements within the framework under

the AEC blueprint.

Certification of skilled workers

accompanied by skills training must also be

one of the important points that can equip

workers to have competence in free market

sectors. Specifically for the free flow of

skilled labor (free flow of skilled labor),

ASEAN countries enforce a mutual

recognition arrangement (MRA) for labor

competency certificates. Currently, there

are eight professional fields that have

signed the MRA, namely: tourism,

engineering, architecture, nursing, general

medicine, dentistry, surveyors, and

accounting.

Through the MRA, MEA stipulates

that the workforce must meet the

competency qualifications according to the

collective agreement. The competence of

the workforce is indicated by a certificate

issued by the respective certification body

referring to ASEAN standards. In Indonesia,

competency certificates are issued by the

National Professional Certification Agency

(BNSP). BNSP is the holder of the mandate

to implement competency certification

based on Law Number 13 of 2003

concerning Manpower and Government

Regulation Number 23 of 2004 concerning

the National Agency for Professional

Certification (BNSP). The role of the

government as a regulator is very

important in protecting the workforce,

especially in preparing skilled workers

according to their duties and functions the

Ministry of Manpower: formulating,

stipulating, and implementing policies in

the field of increasing labor

competitiveness and productivity,

increasing manpower placement and

expanding job opportunities, increasing

the role of industrial relations and social

security for workers, fostering labor

inspection and occupational safety and

health; coordinating the implementation of

tasks, fostering and providing

administrative support to all organizational

elements within the Ministry of Manpower;

management of state property/wealth

which is the responsibility of the Ministry of

Manpower; supervision of the

implementation of tasks within the Ministry

of Manpower; implementation of technical

guidance and supervision of the

implementation of the affairs of the

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

| 861

Ministry of Manpower in the regions;

implementation of technical activities on a

national scale, in accordance with the

provisions of laws and regulations; and

implementation of planning, research and

development in the field of manpower.

The Development of Employment Law in

Malaysia

Malaysia still maintains the tradition

of British customary law (Common Law

System). This tradition stands in the midst

of the Islamic legal system (implemented

by the courts or the Syari'ah Court) and the

customary law of various indigenous

groups. Malaysia has a federal system that

divides government powers into Federal

Government and State Government. This

division of power is stated in the Federal

Constitution. Although the constitution

uses a federal system, this system operates

with great power from the central

government. The Constitution as the

supreme law.

Recently, there have been a number

of significant developments in Malaysian

employment laws that regulates the

relationship between employers and

employees in private sectors. The

Employment Act 55. The Employment Act

1955 (Act 265) (the EA 1955) is the

fundamental legislation of all labour

statutes recently enforceable in Malaysia.

The clausula that appears in the

Development of Malaysia Employment Law

are Enhancing the maternity-related rights;

Widening the circumstances under which

the employees within the coverage of the

EA 1955 may receive advances on wages;

Enhancing the security measure of paying

employee; Introducing sexual harassment-

specific criminal offences in the workplace;

Recognizing the role of contractor for

labour in employment i.e. supplying

employees and laying down his statutory

duties; Extending the liability of employer

as a capacity of company to officers of

company; Recognizing Malaysia Day as

one of the compulsory public holiday; and

Imposing report to the DG upon

employment and termination of foreign

domestic servants.

The Ministry of Human Resources

Management is in charge on employment

system, under the Prime Minister, parallel

to other Ministries e.g Immigration and

foreigns. The minister in charge of

industrial relations law can file disputes

between job providers and trade unions in

industrial courts, and the director general

of labor can be summoned to resolve

disputes over employee salaries. Many laws

provide for arbitration, furthermore the

arbitration law of 1952 provided

regulations for domestic arbitration. There

is also a Regional Center for Arbitration in

Kuala Lumpur which provides facilities for

arbitration of international commercial

transactions.

Malaysia is a Federal country with a

rigid written constitution, the parliament

derives power from the constitution and is

divided between the federal and state

states. Some of the powers of the Federal

Government are foreign affairs, defense,

national security, police, civil and criminal

law as well as justice procedures and

administration, citizenship, finance, trade,

commerce and industry, shipping,

navigation and fisheries, communications

and transportation, performance and

power. federal government, education,

862 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

health, employment, and social security.

The court system is fundamentally federal.

Both federal and state laws are enforced in

federal courts. Only the state-only Sharia

courts, which use the Islamic Law system,

along with the indigenous courts in Sabah

and Sarawak, deal with customary law.

Furthermore, there are also Sessions Courts

and Magistrates' Courts.

The high courts and lower courts

have jurisdiction and authority governed by

federal law and the jurisdiction in all

matters relating to the jurisdiction of the

Sharia courts. Some of the state's powers

include matters relating to the practice of

Islam in the state, land ownership rights,

land acquisition obligations, mining

permits, agriculture and forest exploitation,

city administration, and public work in the

interest of the state. There are also several

powers that apply simultaneously including

sanitation, drainage and irrigation, fire

safety, population and culture and sports.

When federal law and state law conflict with

each other, federal law prevails.

MATERIALS AND METHODS

The concept of trade liberalization

is used as a corridor in determining the

pattern and purpose of free trade to

become the main system in international

trade. Through the concept of

liberalization, the author can see the

concrete elements of the reasons why then

the system has become the main system

used by countries in the world in

conducting international trade relations.

International trade and can be carried out

in a regional context in the ASEAN region.

Currently, AEC member countries move and

work together to advance the regional

economy. The existence of the MEA in the

ASEAN region is also a means to achieve

optimal and equitable regional prosperity.

In this study, the approach method used is

socio-empirical, normative juridical and

comparative juridical. The normative

juridical approach is a problem approach by

viewing, analysing and interpreting

theoretical matters concerning legal

principles in the form of conceptions, laws

and regulations, views, legal doctrines and

legal systems, and comparative juridical is

an approach taken by comparing laws -

relating to the formation of regulations on

workers both Indonesian workers and

Malaysian workers as an effort to

implement the AEC.

RESULTS AND DISCUSSION

The Analysis

The comparative analysis of labour

laws to enhance equal opportunities for

them in the labour market. Several issues in

regulation, competitiveness, education and

vocational training between Indonesia and

Malaysia are descript as follows;

Indonesia

The Regulation Law number 11 Year

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

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2020 concerning Job Creation and as

expected to support the improvement of

labour force productivity and

competitiveness while also providing

protections to employees, so it will create

the increased of job opportunities and

further development of the Indonesian

workforce through productivity and

improvement on the investment climate in

Indonesia.

The Labor competitiveness

Indonesian workers is below that of other

ASEAN member countries such as

Singapore, Malaysia, and Thailand. One

indicator to measure the level of

competitiveness of the workforce is the

level of education. Indonesia's workforce is

indeed very large, but when viewed from

the level of education, most of the

education level is still low, namely

elementary school graduates. In general,

the competitiveness of Indonesian workers

is still inferior to several other ASEAN

countries, Indonesia still has the

opportunity to take advantage of the

liberalization of the ASEAN labor market,

currently Indonesia has regulations on

entry and exit of foreign workers.

According to Papademetriou et al (2016),

that ASEAN member countries aim to

facilitate the free flow of skilled workers

which is absolutely no prohibition at all and

the MEA facilitates the movement of skilled

workers to make it easier to be accepted in

other ASEAN member countries.

Malaysia

The Malaysian government to assure

Malaysia remains competitive in attracting

investors and at the same time

considerably protecting the rights of the

employee. The recent development of the

Amendment Act 2012 has widely

addressed important issues pertaining to

employment. Generally, the principal

objective of the EA 1955 as to provide basic

protection for workers in private sectors is

well enhanced by virtue of these recent

amendments (Nazruzila, 2012).

The interrelated factors

competitiveness in human resources, are

education and human resource

development among each other. The high

quality education will produce quality

human resources It is in line with the

suggestion Tun Dr. Mahathir who

encourages students to prepare themselves

towards achieving Insight 2020 by avoiding

being dominated by culture and western

values of life that are incompatible with the

progress of the country.

According to Islam et al (2016),

human capital who wants to be born is in

line with the desires of the Malaysian

Education Philosophy which is the main

basis for state education style. The State

Education Philosophy (FPN) which is the

principle to the implementation of the

education system in Malaysia. According to

Zaini (2009), from a scientific perspective,

there are three main elements to drive

development human capital, namely: (1)

mastery of knowledge knowledge to the

highest stage; (2) the ability in terms of

skills that help the process of science; and

(3) development.

Discussion

The liberalization of the labor sector

in the ASEAN scheme is only devoted to

skilled labor. The skilled workers can be

864 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

interpreted as workers with special skills or

expertise, knowledge, or abilities in their

fields, which can come from college

graduates, academics or technical schools

or from work experience as evidenced by a

certificate of competence or diploma. The

liberalization of the skilled workforce sector

in the MEA scheme is also accompanied by

efforts to develop human resources,

increase capacity (capacity-building), as

well as conduct closer consultation and

communication regarding policy practices,

competency standards, qualification and

licensing systems. Efforts to achieve

liberalization of the skilled labor sector in

the AEC scheme are carried out by

establishing inter-country agreements and

frameworks under the AEC Blueprint.

The implementation of the 2015 AEC

is a benchmark for the competitiveness of

the global workforce, as well as within

ASEAN. The current skilled workforce

shows an increasing trend and at the same

time shows that the share of overseas

employment is still a hope for some

Indonesians to improve their economic

conditions. The 2015 MEA constellation

encourages ASEAN countries to prepare to

face the share of skilled workforce more

seriously. This means that the higher the

availability of labor, it will set a positive

precedent when it can be absorbed in the

regional and international share of work.

The enthusiasm for working abroad is

increasing from year to year. The high gap

between domestic income and destination

countries is one of the considerations for

skilled PMI to decide to work, after

previously most of them took short courses

or training or by utilizing diploma and

undergraduate education levels at several

universities in Indonesia and Malaysia.

The competitiveness of skilled

workers in the ASEAN region has indeed

experienced progressive development

since 2012. The existence of a regional free

market agenda has made ASEAN countries

also seek to prepare themselves to face the

latest challenges in the dynamics of skilled

PMI. The WTO Consortium in 2015 stated

that ASEAN is the world's third largest

provider of international employment after

the European Union, Middle East and East

Asia. Then the share of ASEAN's work is

increasingly complex, when the migrant

workers in this region not only come from

the scope of Southeast Asian countries, but

also East Asia, such as Bangladesh, India, Sri

Lanka to China. The availability of skilled

jobs in the ASEAN region continues to

increase from year to year. Facing the 2015

MEA, this increasing trend is still ongoing.

The countries with the largest share of work

are Malaysia, followed by Thailand,

Indonesia, Singapore, and several other

countries. Although Thailand has a fairly

large share of skilled labor, the country has

succeeded in filling this potential for

domestic workers.

In facing the 2015 MEA regarding

skilled workers, ASEAN countries also apply

standardization in the field of mastery of

foreign materials and education. Singapore

and Malaysia, most of the existing

universities have international standards.

Meanwhile in Indonesia, there are only a

few universities that have obtained the

same accreditation certificate. In addition,

the minimum period applied in Indonesia

to pursue undergraduate education is four

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

| 865

years, while in other countries such as

Singapore and Malaysia, the minimum

duration for undergraduate programs is

five years. Even if referring to the provisions

of the AQRF and MRA for the qualification

of professional competence, it is five years.

In addition to being a factor that affects

competitiveness, this situation is also an

obstacle for Indonesian workers in

obtaining competency recognition.

Although to meet the educational

standards in AQRF and MRA, Indonesia

stipulates an additional one-year

professional program education period for

undergraduate graduates, however, not all

scientific fields follow and have the

program, this is because the program is not

a compulsory education.

Employment in Indonesia, based on

BPS data as of February 2020, there are

199.38 million people of working age of

which 137.91 million people are in the

workforce. The workforce in question is

those who are of working age. Based on

Article 68 of Law no. 13 of 2003 states that

employers are prohibited from employing

children, in the provisions of the law, a child

is any person under the age of 18 years.

This means that 18 years is the minimum

age allowed by the government to work.

Based on the number of the workforce, the

total population with jobs is 131.03 million

and another 6.88 million are unemployed.

This number of unemployed increased by

0.06 million people when compared to

year-on-year (YOY) data as of February

2019. Based on these data, it can be seen

that the unemployment rate in Indonesia is

4.99% of the total workforce.

Based on BPS data also, 56.5% of

workers are formal workers, or those who

are in business who are assisted by

permanent workers/labourers and

workers/laborers, while the other 43.5% are

informal workers, i.e. non-permanent

workers/labor, casual workers, and family

workers or unpaid. Data for formal workers

increased by 0.77% compared to YOY data.

Furthermore, the agriculture, trade

and processing industries are still the top

three categories as the main employment

sector in Indonesia with a total of 61.76%.

The sectors with the ASEAN MRA having

percentages include the accommodation

industry (which is integrated with food and

beverages) at 6.83%, construction at 6.08%,

health services and social activities at

1.66%, financial and accounting services at

1,37%.

If the sum is done, the total

percentage of the employment structure

that can be entered by professionals based

on the ASEAN MRA is 15,925 of the total

employment opportunities in Indonesia.

When viewed from the welfare point

of view, the average income of

employees/laborers in Indonesia, as of

February 2020, was Rp.2.92 million, with

male workers/laborers earning Rp.3.18

million while female workers/labourers

earned an average of Rp.2. .45 million. The

professions in the MRA have incomes

above the average salary, with a range of

Rp. 2.98 million to Rp. 5.1 million.

Based on GDP per capita, Indonesia

ranks 5th among ASEAN countries with

USD 4,163. This ranking is below Singapore,

Brunei Darussalam, Malaysia, and Thailand,

and even Indonesia's GDP per capita is still

below the average GDP of the ASEAN

community of USD 4,755. Based on these

data, it is clear that Indonesia's GDP per

866 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

capita is still far below some other countries

and even below the average of all ASEAN

countries, so that in general professional

workers will target countries with higher

incomes, such as Singapore. , Brunei

Darussalam and Malaysia. However, this

does not mean that Indonesia cannot

compete in the MRA MEA free market,

because Indonesia is the largest country in

Southeast Asia, both in terms of its area and

economy, even the total population of

Indonesia reaches 40% of the total

population of ASEAN countries. Therefore,

basically, Indonesia still has the potential to

attract ASEAN MRA professionals to work

in Indonesia, on the other hand, MRA

professionals from Indonesia also have the

potential to fill professional jobs in other

ASEAN countries because of the very large

number.

However, the professional potential

of MRA must also be balanced with strong

competitiveness, so that in addition to

being able to compete in the domestic

employment sector, these professionals can

still compete and compete to become MRA

professionals in other countries, especially

countries with higher incomes. than

Indonesia. For this reason, Indonesian

professional competence must be

improved, both at the level of preparation

by providing related education and

accompanied by training, courses, and

other related activities in the level of

developing competence and

competitiveness.

By looking at the purpose of the

enactment of the Manpower Act, the aim of

the Governments of Indonesia and

Malaysia is to implement a welfare state.

This can be seen from one of the

characteristics of the Manpower Law, which

is to increase the life security of citizens by

eradicating unemployment. In addition to

opening employment opportunities in the

country by starting to apply the concept of

a certain time work agreement, the

Government is also committed to creating

job opportunities with participation in

several free trades, and one of them is

within the framework of the MEA with MRA

8 included professions.

Manpower in Indonesia and Malaysia

prioritizes the rights and protection of the

community, this confirms that until now the

manpower sector is classified as private law

because it regulates individual

relationships, namely between

workers/laborers and

employers/employers, but the state

continues to take affirmative action.

(affirmative action) by taking policies that

aim to avoid an imbalance in the position

of workers/labor, especially those with a

low level of education and less skilled and

employers/employers who have a higher

position which can lead to exploitation and

discrimination in the employment

relationship. . Therefore, in the Indonesian

labor regime, there are still arrangements

for setting minimum wages, licensing

related to employment, settling industrial

relations, and applying (criminal) sanctions

for violations in the labor sector which are

the realization of the Government's

intervention in protecting its people.

The Government's focus in their

respective countries is on the development

and preparation of national higher

education. The development is a realization

Emilia Fitriana Dewi

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Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

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towards the harmonization process of

continuing education, development of

work competencies, education for

marginalized people, promotion of basic

science and education for knowledge

creation. Furthermore, it can be

implemented by integrating more into the

regional system which will provide wider

employment potential.

The development of a new national

qualifications framework was initiated and

included as one of the priorities through

the Ministry of Higher Education in 2015-

2016. With that, the government really

wants to improve the quality assurance

system, especially in institutions and

universities through external quality

assurance institutions, namely through the

ASEAN University Network Quality

Assurance (AUNQA) system. This is to

ensure that the quality of education is in

accordance with regional standard

references. However, Indonesia has

prioritized issues such as the credit transfer

system as it focuses on increasing the

number of Indonesian students studying

abroad as a starting point towards regional

harmonization of higher education in the

region.

Although in general the

competitiveness of Indonesian workers is

still inferior to some Malaysian countries,

each country still has the opportunity to

take advantage of the liberalization of the

ASEAN labor market, currently Indonesia

has regulations that regulate the entry and

exit of foreign workers into Indonesia.

According to Sugiyarto and Agunias, that

ASEAN member countries aim to facilitate

the free flow of skilled workers which is

absolutely no prohibition at all and the

MEA facilitates the movement of these

skilled workers to make it easier for them to

be accepted in other ASEAN member

countries.

The basic thing that the Indonesian

people need to know is that only skilled

workers are allowed to enjoy the free flow

of labor policy in ASEAN which is supported

by the Mutual Recognition Agreement

(MRA). Currently, there are only eight

professions that have been agreed upon in

the MRA and signed by ASEAN member

countries. In addition to the eight

professions, the regulation of labor entry

and exit is still regulated by the old

regulations according to the policies of

each country. So, it is very unlikely that

foreign workers will seize domestic job

opportunities other than the eight

professions.

Eight professions that already have a

valid MRA, it is possible that the number of

other professions will increase in line with

global developments. Even though they

already have an MRA, it is not automatic

that workers who enter the MRA can freely

enter and exit ASEAN countries, there are

still requirements that must be met; such as

the qualifications required by the receiving

country and the qualifications differ

between countries. The qualifications of

prospective workers about work

qualification standards is important in its

implementation.

Another reason that can explain the

MEA is not a threat to Indonesian

employment is that the average income of

Indonesian workers is still inferior to several

other ASEAN member countries. With such

conditions, Indonesia is not the main

destination for ASEAN workers. One of the

868 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

motivating factors for workers to decide to

work abroad is to seek higher wage

standards. Countries that are the main

destinations for ASEAN workers are, of

course, countries that have relatively higher

wage standards, such as Singapore,

Malaysia, and Thailand.

As a recipient country for Indonesian

Migrant Workers, Malaysia does not

specifically regulate legislation relating to

foreign workers, in Malaysia all workers

both domestic and from outside the

country who work in Malaysia through a

valid employment contract between

workers and Malaysia are bound by the

provisions of the Employment Deed (law).

employment), except for informal workers,

the same as Indonesia, Malaysia does not

have special legislation relating to informal

workers, Indonesian Workers who work in

Malaysia as informal workers (unemployed

laborers / Domestic Helpers) are not

covered in Malaysian legislation,

Indonesian labor informants subject to the

provisions of the Malaysian immigration

rules as a foreign citizen residing in

Malaysia for a certain time limit.

Labor-free competition within the

AEC framework must be viewed in a

positive light. According to the liberalist

perspective, competition encourages each

party to increase competitiveness. Workers

in ASEAN are faced with an era of free

competition in the ASEAN labor market

which encourages workers and the

government to increase competitiveness

through training programs or formal

education. Increased competitiveness will

encourage labor productivity which will

directly increase economic growth in

ASEAN.

One of the factors that play an

important role in increasing

competitiveness is human capital. Several

factors in the Global Competitiveness Index

are closely related to aspects of human

capital, such as basic education, higher

education and training, and the labor

market. Furthermore, transformation is

related to the effectiveness of human

capital strategies with business strategies

that can increase the company's

advantages to encourage change.

To achieve these advantages,

research on human capital is more focused

on having a relationship with a resource-

based view and competitive advantage.

Human resource strategy is often seen as a

functional plan, not a business plan.

Initiatives for recruitment, termination,

development, performance or rewards are

seen as human resources initiatives. People

(workers, personnel or employees) are not

called human resources or human assets

anymore. Human capital is the knowledge,

skills and abilities that organizations need

to succeed in acquiring new capabilities

and economic technologies. Tom

Davenport, a human capital expert, stated

that employees' contributions from their

capital such as time, energy and thought

expect investment development from the

company in the form of compensation,

development and a comfortable working

environment. Human capital is an

individual's decision to spend his time,

energy and money to invest in education,

training and experience. The choice to

agree will have an impact on career

advancement and income.

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

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In the journal Ployhart and Moliterno,

Ployhart Iddekine and MacKenzie Jr.

examine the multilevel model of human

capital at the micro and macro levels. In

general, the phenomenon of the micro

level (individual level) is more about how

individuals use knowledge, skills, and

abilities as well as other characteristics

(KSAO's) related to individual performance.

Meanwhile, the phenomenon of

performance at the macro-economic level

is more of a strategy at the organizational

level as a whole by using the resources,

experience, expertise, education of

employees as resources that can achieve a

sustainable competitive advantage.

The approach at the micro level is

more cognitive (what can be done)

consisting of 4 types, namely knowledge,

skills and abilities and experience. The

purpose of this approach is how employees

use knowledge, skills and abilities and

experience on individual performance.

While non-cognitive (what will be done)

consists of 3 types, namely values,

personality and interests.

The concept of human capital is

different from general human capital and

specific human capital. These two concepts

are linked to training that results in human

capital investment. In an effort to increase

company productivity. Investment in

general human capital in the form of formal

education and work experience. General

human capital relates to skills and

knowledge that are easily applied to

economic conditions.

Specific human capital is oriented to

managerial, entrepreneurial, and technical

abilities as well as business

founders/entrepreneurs. Specific human

capital is not easily transferred and applied

usually applies to

companies/organizations. Generic human

capital is defined as human capital

resources that can be transferred in various

types of companies while specific human

capital is defined as human capital

resources as resources related to certain

units and have little relationship with other

units by creating something that cannot be

imitated and replaced. Both concepts of

human capital are expected to be able to

create a sustainable competitive

advantage. The relationship between the

two is a cause-and-effect relationship

where generic human capital causes

changes in the creation of specific-generic

human capital that contributes to changes

in performance and effectiveness.

According to Ployhart, generic

human capital is based on all Knowledge,

Skills, Ability & Other Personal (KSAO)

including personality and cognitive

abilities. Generic human capital does not

directly affect economic changes, while

specific human capital determines the

company's performance based on a

resource-based view.

Polyhart's research model is generic

human capital which has a relationship with

specific human capital. Specific human

capital that has behavior towards

effectiveness. The variables used in this

study consist of generic human capital

cognitive (knowledge, skills, cognitive

ability experience) and non-cognitive

(personality, value and interest), while the

specific dimension of human capital is more

about specific knowledge, skills, abilities

and experience.

In the era of open and competitive

870 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

markets, almost all countries will open

access to multi-sector operations openly,

this results in competitive competition in all

lines, especially competitive competition in

the development of human resources,

especially in the education sector,

especially in technology and vocational

education.

The process towards harmonization

of higher education in ASEAN will still

continue. The national quality assurance

and qualifications framework, both at the

national and regional levels, will be the

leading mechanism providing reference

points and guidelines for the improvement

of higher education in the region.

Curriculum revision will still be the

responsibility of higher education

institutions without much interference by

the central government, especially in liberal

countries. On the other hand, the credit

transfer system and concrete policies

towards lifelong learning will still require

more debate and implementation at the

regional level. The development of

reference points in these areas and

mechanisms clearly demonstrates the

common determinants of success, namely,

policy direction from government,

involvement of higher education

institutions, and support from regional

organizations.

There are several things that can be

done to increase the competitiveness

index, such as making related policies so

that there is a legal umbrella for

regulations; the existence of equal

opportunities in improving the economy

that will be directly proportional to

opportunities and access to employment

opportunities; fostering healthy work

competition that will result in innovation

and better product quality; and the

existence of an adequate social protection

system.

The new economic agenda is needed

that incorporates environmental, social and

economic growth goals that are recognized

by all stakeholders at the advanced level in

developing countries. The challenge is that

such implementation requires an ambitious

agenda. Transitioning to a new

development path will require significant

efforts, bold policies that are capable of

and resolve some existing and potential

problems. All stakeholders such as policy

makers, business leaders and civil society

need collaboration to do this and

collectively take full responsibility to adopt

policies, practices and behaviors that are

aligned with the goal of achieving broad

prosperity, prosperity and sustainable

development.

Currently, many parties still doubt

that the liberalization of the ASEAN service

sector along with the implementation of

the MEA will benefit Indonesia and

Malaysia. The existence of the MEA is not

always beneficial for the Indonesian people

because of the limited aspects in the aspect

of human resources. It is important to note

that with the entry into force of the AEC,

there has been an agreement that there are

8 employment or professional fields that

are open to the ASEAN community market.

These fields are: engineers, architects,

nurses, surveyors, tourism workers, medical

practitioners, dentists, and accountants.

This means that with this agreement all

ASEAN people can work in any country in

Emilia Fitriana Dewi

Dematria Pringgabayu

Kurnia Fajar Afgani

Yani Pujiwati

Isti Raafaldini Mirzanti

| 871

the ASEAN region as long as they meet the

quality standards set by each of the 8

professional associations. For example, an

Indonesian engineer can work in Singapore

or Malaysia with the stipulation that

Indonesian human resources are equal to

the quality of engineer human resources in

Singapore or Malaysia, with the reference

used is the quality of education which is the

main factor.

CONCLUSIONS

The development of the quality of

Indonesian human resources within the

framework of the ASEAN Economic

Community can be carried out by the

Governments of Indonesia and Malaysia by

preparing themselves in ASEAN to increase

the competitiveness of their human

resources. In the context of the eight

professions belonging to the MRA, the data

shows that the number of certified workers

in Indonesia is still low compared to other

ASEAN countries. In terms of quality,

several professions have standards below

the ASEAN average. In addition, there are

still differences in standards between one

ASEAN country and another. In terms of

education, both Indonesia and other

ASEAN countries have shown their political

will to reform the curriculum and develop a

framework for qualifications, quality

assurance, lifelong learning, and credit

transfer systems.

The competence of workers in each

country based on the perspective of Labor

Law in supporting the ASEAN Economic

Community has been carried out by the

Government in their respective countries by

carrying out a competency standardization

for workers in the form of . SKKNI with

BNSP as the organizing body can be used

as the main tool and institution in forming

Indonesian workers who are competent in

their fields and have competitiveness. In

the context of the ASEAN MRA, the

expansion of the scope of the SKKNI and

BNSP can be carried out and adjusted to

the ASEAN MRA standards so that

Indonesian workers can be certified

regionally and internationally and have the

required competitiveness at that level.

Promotion of ASEAN programs, particularly

those related to MRA, can also be carried

out by the Government to encourage the

knowledge and desire of Indonesian

workers to participate in the ASEAN MRA

by inserting them into related Government

movements and work programs.

The concept of regulation of

Indonesian Manpower Law in increasing

the competitiveness of Indonesian workers

in the ASEAN Economic Community is

carried out through programs launched by

the Government that are good in

encouraging competitiveness, but have not

been integrated with one another. For

example, pre-employment programs and

competency standardization programs. In

fact, this integration is important in terms

of increasing competitiveness. Program

integration can be carried out if it is stated

in a regulation in the form of a government

regulation that regulates the job training

system. This is because the current

regulations are not yet integrated with one

another. An integrated regulation will show

the direction of program integration and its

872 | Indonesian and Malaysian Labor Law Comparative Study In Enhancing The

Competitiveness of Workers In The Framework of The Asean Economic Community

binding strength will have a good impact

on increasing the competitiveness of the

workforce. In addition, cooperation

between ASEAN member countries is also

needed to increase protection for workers

who compete in the ASEAN MRA.

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