NOT ALL LABOR DISPUTES CAN BE SOLVED IN INDUSTRIAL RELATION COURT

 In Legal Updates, Uncategorized

Ideally, an industrial relation should be in harmony. Employer and employee must understand their duties and rights as commonly regulated in the employment agreement. An industrial relation will end into dispute if both parties do not respect to each other. When harmony turns into dispute, it could be settled before the court. However, it does not always have to be settled in the Industrial Relation Court.

Industrial Relation Court is one of special courts established by the Government of Indonesia after the reform era. This court is specifically regulated under Law Number 2 of 2004 regarding Settlement Dispute of Industrial Relation. Industrial Relation Court was established to be the legitimate settlement forum for labor disputes. However, not all labor disputes can be examined in Industrial Relation Court.

The Law Number 2 of 2004 has strictly determined that the Industrial Relation Court trials only certain type of industrial relation/labor disputes. Those are dispute of rights, dispute of interests, dispute related to employment termination, and dispute between labor unions in a company. Other type of disputes which are not included in the previous-mentioned list should be solved in another settlement forum such as civil law court or criminal law court, both commonly examined before “Pengadilan Negeri” (the District Court).

The civil law court can be picked by the parties to solve their dispute if the dispute related to tort (Perbuatan Melawan Hukum) or contract default (Wanprestasi). These two things are regulated in the Indonesian Civil Law, Kitab Undang-Undang Hukum Perdata (KUHPerdata) which is originated from Netherland. In detail, tort is stipulated in Article 1365 KUHPerdata, and contract default is stipulated in Article 1243 KUHPer.

Article 1365 KUHPerdata states “every unlawful act, which causes damage to third parties obliges the party at fault to pay the damage caused”. In order to file a tort lawsuit, a plaintiff has to ensure the elements of tort are fulfilled. Those elements are illegitimate act; culpa-fault; damages; causality between act and damages; and relativity norm.

Meanwhile related to contract default, Article 1243 KUHPerdata states “compensation for costs, damages, and interests for the breach of an obligation only becomes obligatory if the debtor, after having been declared to be in default, remains in default, or in case of obligations where he must give or produce something, is only given after the lapse of a period of time”.

In practice, tort and contract default lawsuit frequently are being mixed up. Sometimes, a plaintiff files a tort lawsuit, but actually the case is close to contract default or vice versa. In several cases, this kind of lawsuit is defeated by the defendant. However, several precedents provided that cumulative lawsuit is permitted with a strict limitation.

The similarity between tort lawsuit and contract default lawsuit is there is damages suffered by the plaintiff, which is indeed must be proven before the court. Therefore, in a tort or contract default lawsuit, the plaintiff may sue the defendant to pay the damages which cover costs (expenses actually incurred); damages sustained as a direct and immediate result from the default; lost profit foreseeable due to the default; the statutory interest of 6 % annually as the date the lawsuit is submitted.

The obvious difference between those two types of lawsuit is tort lawsuit refers to the laws, either written or unwritten laws, which are binding for all people, while contract default refers to an agreement which is binding only for the related parties. Technically, the procedure of tort lawsuit in court is more complicated compare to contract default lawsuit. In a tort lawsuit, the plaintiff has an obligation to proof all the elements of tort. Meanwhile, in a contract default lawsuit, the plaintiff simply has to proof there is a breach of contract.

So, in the context of industrial relation, either employer or employee has the opportunity to file a civil lawsuit. However, prior submitting the lawsuit, the plaintiff must carefully analyze whether the lawsuit related to tort or contract default. In this case, the role of lawyer is very crucial to help employer or employee to proceed the lawsuit.

BP Lawyers can help you

Please contact us for further information and consultation related to dispute resolution

Contact us now at E: bpl@smartlegal.id or H: +62821-1234-1235

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