DIFFERENCES BETWEEN CONCILIATION AND ARBITRATION IN INDUSTRIAL RELATIONS DISPUTE SETTLEMENT

 In Korporasi

“Industrial relations dispute settlement through Conciliation may be continued to lawsuit in Industrial Relations Court, if no agreement is reached. Meanwhile, industrial relations dispute settlement through Arbitration cannot be continued to Industrial Relations Court.”

Referring to the previous article (read also: 3 Industrial Relations Dispute Settlement Procedures That You Need to Know) which there are 3 methods of industrial relations dispute settlements referring to Law No. 2 Year 2004 concerning Industrial Relations Dispute Settlement (“IRDS Law”), namely:     

  1. Bipartite Negotiation;
  2. Tripartite Negotiations, consisting of:
    • Mediation;
    • Conciliation; and
    • Arbitration.
  3. Industrial Relations Court.

Based on explanation above, conciliation and arbitration process in industrial relations dispute settlement are included in tripartite negotiations. Nevertheless, there are differences between conciliation and arbitration in the scope of authority, the mediator and its appointment, the legal action to be taken if there is no agreement reached, and dispute settlement method. The differences between conciliation and arbitration will be explained below.

Scope of Authority
Conciliation is only authorized to resolve certain disputes: conflict of interest, work termination disputes or disputes between workers’ union within a company (Article 1 number 13 of IRDS Law), while Arbitration is authorized to resolve conflict of interest and disputes between workers’ union within a company (Article 1 number 15 of IRDS Law).

The Mediator
Dispute settlement through conciliator is mediated by one or more neutral conciliator(s) stipulated by the Minister and in charge of conducting conciliation and providing written advice to the parties in dispute (Article 1 number 14 of IRDS Law). The mediator in Arbitration is one or more arbitrator(s) appointed by the parties in dispute from the list of arbitrators stipulated by the Minister (Article 1 number 16 of IRDS Law).

Cara Penunjukan Pihak Penengah
Appointment of conciliator shall be made based on the agreement by referring to the list of conciliators, which is posted and announced at the government agencies’ office responsible for local manpower (Article 18 of IRDS Law). On the other hand, the appointment of arbitrator shall be made based on the agreement of the parties in dispute, set forth in written arbitration agreement (Article 30 jo. Article 31 of IRDS Law).

Legal Action to be Taken if There is No Agreement Reached
If no agreement is reached through conciliation, one of the parties may file a lawsuit to the Industrial Relations Court (Article 5 of IRDS Law). If no agreement is reached through arbitration, the parties cannot file a lawsuit to the Industrial Relations Court due to the final and binding nature of arbitral award (Article 51 of IRDS Law).

Dispute Settlement Method
If an agreement is reached through conciliation, a collective agreement will be made, signed by the parties in dispute and witnessed by the conciliator. The collective agreement will be registered to Industrial Relations Court to obtain the deed of registration. If there is no agreement reached, the conciliator will issue written advices to the parties in dispute.

If there is a peace during arbitration process, a peace deed will be made and signed by both parties and arbitral tribunal. If the peace is not reached, the arbitrator will continue the hearing and concluded by the arbitral award.

We hope this article is useful.

BP Lawyers can assist you
We can assist you in providing the best solution in drafting and preparing all documents regarding the industrial relations dispute settlement through the court or arbitration. You can contact us via:

E : ask@bplawyers.co.id
H : +6221-8067-4920

Author :

Dalmy Nasution, S.H.

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