Industrial relations disputes are differences of opinion that result in conflict between employers or a combination of employers and workers/labor unions. These disputes are due to disputes regarding rights, disputes over interests, disputes over the termination of employment, and disputes between unions within one company. There are mediums to resolve industrial relations disputes can be through bipartite, tripartite efforts, and lawsuits to the industrial relations court.
Overview of Manpower Disputes in Indonesia
Manpower Disputes or commonly referred to as Industrial Relations Disputes (IRD/PHI) are regulated in Law No. 2 of 2004 concerning the Settlement of Industrial Relations Disputes (“PPHI Law”). The definition of an Industrial Relations Dispute (“PHI”) is a difference of opinion that results in conflict between employers or a combination of employers and workers/labor unions because of rights disputes, disputes over interests, disputes over the termination of employment, and disputes between labor unions within one company.
Types of PHI
According to Article 2 PPHI Law, there are 4 (four) types of PHI, which are:
- Right disputes are disputes arising over the non-fulfillment of rights, as a result of differences in implementation or interpretation concerning laws and regulations, work agreements, company regulations, or collective labor agreements.
- Interest disputes are disputes arises in the work relationship due to non-convergence of opinions in the drawing up of, and/or changes in the work requirements as stipulated in the working agreement, company regulations, or collective labor agreements.
- Employment termination dispute is a dispute arising from the lack of convergence of opinions regarding termination of employment as conducted by one of the parties.
- Labor union disputes are disputes between trade unions and another trade union within one company due to the fact there is non-convergence regarding the membership, implementation of the rights and obligations to the unions.
Industrial Relations Dispute Settlement Mechanism
In the PHI, submitting a lawsuit to the court is the last step after taking the industrial relations dispute settlement facility that has been regulated in the law. Based on the PPHI Law, there are several mediums of resolving industrial relations disputes before filing a lawsuit, which means through Bipartite, if it fails, it will go through a tripartite settlement, which is choosing between mediation, conciliation, or arbitration.
If one of the mediums of settling an industrial dispute like Bipartite or Mediation or Conciliation, results in an agreement, then the agreement is made in the form of a joint agreement signed by the parties. This agreement is then registered to the court to obtain the registration deeds of the joint agreement which has an executorial power. This means that if one of the parties does not implement the provisions in the joint agreement, the aggrieved party can submit a request for execution to the Industrial Relations Court. But if these means fail to reach an agreement, it will proceed to file a lawsuit in the industrial relations court. However, this does not apply to settlement through arbitration because the decision is final and binding.
a) Bipartite Negotiations
Negotiations between employers and workers/labor unions, as well as negotiations between trade unions within a company that are in dispute with the intention of resolving PHI. Bipartite negotiations must be carried out first if there is a PHI that appears, this is to reach a settlement by deliberation. This is mandatory before proceeding with the settlement through mediation, conciliation, or arbitration. Bipartite negotiations must be completed in a maximum of 30 working days.
If these negotiations reach an agreement, then a joint agreement is made which is signed by the parties. In this joint agreement, there are no specific regulatory provisions on joint agreements. But a joint agreement is an agreement in writing using the Indonesian language which was made jointly between employers and workers who have been registered to the authorized institution. Joint agreement basically formed as an agreement on the suitability will of both parties for the sake of the realization in a relationship industrial harmony. This joint agreement is binding and becomes law and must be implemented by the parties. This agreement must be registered to the industrial relations court in the area of the agreement held. Thus, if the agreement is violated, the aggrieved party can submit a request for execution to the court.
However, if one of the parties refuses to negotiate or has negotiated but has not reached an agreement, then the bipartite process has failed. Furthermore, this failed bipartite process can be register to the local authorized institution to be evidence that attempts at bipartite settlement have been made. After receiving the records, the local authorized institution is obliged to offer the parties to choose a settlement through conciliation or through arbitration. If the parties do not make a choice through conciliation or arbitration, the dispute resolution will be through mediation.
b) Tripartite Negotiations
Tripartite negotiations were held after the bipartite negotiations failed. Tripartite negotiations are negotiations between workers and employers involving a third party as a facilitator in resolving PHI. Tripartite negotiations in PHI can be through mediation, conciliation and arbitration, the explanation is as follows:
1. Mediation
Mediation is the settlement of rights disputes, interest disputes, employment termination disputes, and labor union disputes within one company through negotiations mediated by a neutral mediator. After receiving the delegation of disputes, the mediator is obliged to complete his duties no later than 30 (thirty) working days, which include case research activities, mediation, making recommendations, and helping to make joint agreements.
If an agreement can be reached in mediation, a joint agreement is made which is signed by the parties and witnessed by the mediator, then it is registered in the industrial relations court to obtain a registration deed. If one of the parties does not fulfill the agreement, the aggrieved party can submit a request for execution to the court.
However, if the mediation does not reach an agreement, the mediator will provide a written recommendation, and the parties will provide a written answer to the mediator on their recommendation. If both parties agree, the mediator will help the parties make a joint agreement and then it is registered in the industrial relations court. If someone refuses or does not give a response, then they can file a lawsuit at the industrial relations court.
2. Conciliation
Conciliation is the settlement of interest disputes, employment termination disputes, or labor union disputes between unions within one company through negotiations by a conciliator. This settlement is carried out after the parties submit a request for settlement in writing to the conciliator. After receiving the delegation of disputes, the conciliator is obliged to complete his duties no later than 30 (thirty) working days, which include case research activities, conciliation, making recommendations, and helping to make joint agreement.
If an agreement is reached through conciliation, a joint agreement is made which is signed by the parties and witnessed by the conciliator, then it is registered in the industrial relations court to obtain a registration deed. If one of the parties does not fulfill the agreement, the aggrieved party can submit a request for execution to the court.
However, if conciliation cannot reach an agreement, the conciliator will provide a written recommendation, and the parties will provide a written answer to the conciliator on their recommendation. If the parties agree, the conciliator will help the parties make a joint agreement and then it is registered in the industrial relations court. If someone refuses or does not give a response, then they can file a lawsuit at the industrial relations court.
3. Arbitration
Arbitration is the settlement of interest disputes, and labor union disputes within one company, outside the court through a written agreement from the disputing parties to submit the settlement of the dispute to an arbitrator whose decision is binding and final. The parties also make an arbitration agreement and determine the arbitrator. After the arbitrator accepts the appointment and signs the agreement, the arbitrator must resolve the dispute within 30 (thirty) days which can be extended once for 14 days.
The process of resolving disputes through arbitration begins by reconciling the parties. If there is an agreement, a peace deed will be made. If not, then the examination will continue until a decision is issued.
Arbitration decisions have binding and permanent legal force, this decision is then registered in the court within the arbitrator’s jurisdiction. If this decision is not implemented, a fiat of execution can be requested in court. However, if the dispute has been resolved through arbitration, it cannot be submitted again to the industrial relations court. Arbitration decisions can be submitted for annulment to the Supreme Court if they contain certain elements in the PPHI Law.
c) Submission of a Lawsuit to the Industrial Relations Court
Based on the previous explanation, a lawsuit can be filed at the industrial relations court if the tripartite efforts which include mediation and conciliation fail, but this is not the case if the dispute has been resolved through arbitration, because it cannot be submitted again to the industrial relations court. The industrial relations court has the duty and authority to examine and decide:
- The first level is for rights disputes and employment termination disputes, meaning that there is further legal action to the Supreme Court
- First and last level for disputes over interests and labor union disputes within one company.
This means that industrial relations court decisions in rights disputes and layoff disputes can still be submitted to further legal proceedings through cassation to the Supreme Court. However, for court decisions in cases of interest disputes and labor union disputes, this court is final and cannot be appealed to the Supreme Court. The industrial relations court at the first level is obliged to give a decision in a maximum of 50 (fifty) working days from the first trial, and at the cassation level it is required to give a decision in a maximum of 30 (thirty) working days.
In industrial relations trials, the procedural law that applies in the Industrial Relations Court is civil procedural law in the general court environment, except for those specifically regulated in the PPHI Law. To file a lawsuit, it is submitted to the Industrial Relations Court whose jurisdiction covers the place where the labor works. After the lawsuit is filed, an examination will be carried out by a judge and the lawsuit will be decided.
Author: Adam Kausar
Gaffar & Co., an Indonesian Boutique Law Firm specializing and focusing on commercial law areas which included employment law.
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