An Industrial Relations Dispute is a difference of opinion resulting in a dispute between employers or an association of employers with workers or trade unions. There may be a disagreement on rights, conflicting interests, a dispute over termination of employment, or a dispute among trade unions within one enterprise that could be caused by differences in implementation or interpretation concerning the laws and regulations, work agreements, company regulations, or the collective bargaining agreement.
In general, any dispute mentioned above can be handed to the Industrial Relations Court. However, before taking the cases to the Court, some preliminary steps or alternative solutions should be taken through bipartite negotiation, mediation, conciliation. Another method of settlement is through arbitration. Arbitration decisions are final and binding.
MANPOWER ACT NO. 13 OF 2003, ARTS. 103(H) [UU KETENAGAKERJAAN NO. 13 TAHUN 2003, PASAL 103(H)];
INDUSTRIAL RELATIONS DISPUTES SETTLEMENT ACT NO. 2 OF 2004, ART. 1 [UU PENYELESAIAN PERSELISIHAN HUBUNGAN INDUSTRIAL NO. 2 TAHUN 2004, PASAL 1].
9.4.1. Resolving Disputes Through Bipartite Negotiations
During bipartite negotiations, minutes of meetings should be taken as an evidence and contain at least:
- full names and addresses of the parties;
- date and venue of the negotiation;
- main issue or reason for the dispute;
- the opinion of each party;
- conclusions or results of negotiations; and
- date and signatures of the negotiating parties.
If within 30 days, the parties cannot negotiate a settlement or one party refuses to continue negotiations, one or both of the parties can refer the dispute to the designated Manpower Office, with proof that the negotiations have failed.
9.4.2. Role of the Ministry of Manpower and Transmigration and Related Institutions
If bipartite negotiations have failed, the Ministry of Manpower and Transmigration or the designated Manpower Office will offer settlement through:
- Arbitration: the resolution of a dispute over interests, and disputes between trade unions within an enterprise. It is outside the Industrial Relations Court through a written agreement between the parties in dispute who agree to submit the settlement of the dispute to an arbiter whose decision is binding on the parties involved and is final; or
- Conciliation: the settlement of disputes over interests, disagreements over the termination of work relationships, or disputes between trade unions within one company only. It is done through deliberations mediated by one or more neutral conciliators.
- If neither of the above options is selected by the parties within 7 days, the dispute will be settled through a mediation: the settlement of disputes over rights, conflict over interests, disputes over termination of the work relationship, and disputes between worker/trade unions within one company only through deliberations that are mediated by one or more neutral mediators that are governmental officials.
The Ministry of Manpower and Transmigration or the designated Manpower Office should maintain a list of arbitrators, conciliators and mediators to deal with local industrial disputes.
9.4.3. Resolving Disputes Through Mediation and Conciliation
Mediators, as well as conciliators, have seven working days from the time they receive a request to settle a dispute to investigate the case. Immediately after the investigation, a hearing session must be held no later than by the eighth working day after the request is received.
The mediator or conciliator may summon witnesses to attend hearings and provide evidence.
If an agreement to settle the dispute is reached, the parties must draw up and sign a Collective Agreement, which is witnessed by the mediator or conciliator and registered at the Industrial Relations Court in order to receive a registration deed.
If no agreement is reached, the mediator or conciliator will issue written recommendations within ten days after the first hearing. The parties must provide a written answer stating whether they accept or reject the recommendation within ten days of receiving it. No response is considered a rejection.
If the parties accept the recommendation, within three working days of their acceptance, the mediator or conciliator must assist the parties to draw up a Collective Agreement and register it at the Industrial Relations Court to obtain a registration deed.
If one or both of the parties reject the recommendation, they may take the dispute to the local Industrial Relations Court.
The mediator or conciliator must complete their duties within 30 days from the time they are requested to resolve a dispute.
9.4.4. Settlement of Disputes Through Arbitration
Disputes over interests and disputes among workers or unions in an enterprise may be settled through arbitration.
The settlement of an industrial relation dispute through an arbitrator is performed on the basis of a written request by the disputing parties on three identical copies of arbitration letter of agreement that consists of:
- full names and addresses or domicile of the disputing parties;
- main issues underlying the dispute to be handed over to arbitration for settlement;
- number of arbiters agreed upon;
- a statement of the disputing parties to comply with and implement the arbitration decision; and
- the place and date of drawing up the agreement and signatures of the disputing parties.
Once the parties sign the arbitration agreement, they can choose an arbitrator from a list of arbitrators determined by the Minister. The parties may choose a single arbitrator or a panel of arbitrators. A panel must contain an odd number of arbitrators (minimum 3). If the parties cannot agree on the arbitrator(s), the Head of the Court will appoint them.
Arbitration is conducted in private unless otherwise preferred by the disputing parties. Each party may be represented by their authorized representatives if they grant authority to those representatives in a special letter of authorization.
The arbitration proceedings should begin with an effort to settle the dispute. If the parties reach a settlement, the agreement should be reflected in a settlement deed, which should be registered with the local Industrial Relations Court.
When considering an issue in dispute, arbitrators give the parties an opportunity to explain their opinions and submit evidence. Arbitrators also may summon witnesses to give information.
Arbitrators are required to settle disputes within 30 days, which may be extended for a further 14 days if the parties agree.
Arbitration decisions are binding and final. Disputes that have been settled through arbitration may not be re-filed in the Industrial Relations Court. However, parties may file a request to the Industrial Relations Court for an order to implement the decision if the other party fails to do so.
9.4.5. Industrial Relations Court
The Industrial Relations Court is a special court established within the scope of the district court that has the authority to investigate, judge and provide a verdict concerning an industrial relations dispute.
Judges must provide a verdict within 50 working days of the first court session.
9.4.6. Lock Out
Employers have the right to refuse to allow workers to work as a result of failed negotiations and must be in accordance with the law.
However, employers cannot lock out their workers as a countermeasure to workers and/or union normative demands.
Employers are required to inform the employee or the union and the official representative in manpower at least 7 working days before the a lock out occurs.
The content of the written information will be:
- time (day, date and hour ) the lock out will be started and finished
- Justification for the lock out
- Signed by the employer and the management of the company
At least 7 days before the lockout, the employer must notify the local manpower office and the workers of the time, duration and reason for the lockout.
Note: the rights of workers and/or trade union to strike is explained in Section 4.5 on Strikes.