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 “Well, I just found out that if there is a procedure to lay off employees. The foreign investor hasn’t found it out yet, Sir.”

Said one of our Client, a director of foreign investment company. In principle, the community is deemed to know the Law when it is published. We will not discuss about the publication made by government in order to make the community aware of an applicable law.

Our concern is to provide education and advocacy to employer so that they are aware of the applicable law and its application. Moreover, the most important part is to make sure there is no legal issue hindering their business.

It is need to be understood that in industrial relations, not only substantial aspect, but formal aspect (procedure) is need to be considered. In order to make sure not to make mistake in facing industrial dispute with employees, we hereby describe the procedure of Industrial Dispute Resolution (IDR) as stipulated in Law No. 2 of 2004 concerning Industrial Dispute Resolution (IDR Law), namely:

    1. Bipartite Negotation

Two-party negotiations between employers or joint employers and workers or workers unions. If there is an agreement reached by bipartite negotiations, then the parties will make a mutual agreement which is will be registered to the local industrial relations Court. However, if there is no agreement concluded in the negotiations, the parties to the dispute must go through the procedures of Tripartite Negotiations.

    1. Tripartite Negotiations

Negotiation between employee and emplyers by involving third parties as a facilitator in resolving industrial relations dispute. Tripartite negotiations can be done through mediation, conciliation and arbitration.

      1. Mediation

Dispute resolution through discussion mediated by one or more mediator from the Ministry of Manpower concerning dispute or rights, interest, layoffs and dispute between workers’ unions within a company. In mediation, if there is an agreement between parties, a mutual agreement will be made and registed to industrial relations court.
However, if there is no agreement can be reached by parties, the mediator will issue a written suggestion. If such suggestion is accepted, the parties will register the suggestion to the industrial relations court.

      1. Conciliation

Dispute resolution through discussion mediated by a conciliator (referring to IDR Law, a conciliator is a private-based employee, unlike a mediator from Ministry of Manpower in mediation) appointed by the parties. Similar to mediator, Conciliator seeks to reconcile the parties to reach an agreement between them.
If there is no agreement can be reached, Conciliator will issue a suggestion for the parties.

      1. Arbitration

Dispute resolution outside the industrial relations court on conflict of interest and dispute between workers’ union within a company may be made through written agreement stating he parties in dispute agree to settle their dispute through arbitration. Arbitral award is final and binding to the parties in dispute, and the arbitrator(s) is appointed by the parties in dispute from the arbitrator’s list provided by the Ministry of Manpower.

    1. Industrial Relations Court

For parties who refuse suggestions of mediator and conciliator, they may file a lawsuit to the industrial relations court. The duty of industrial courts relation is to rule over cases of industrial relations dispute, including layoffs, and to execute the collective agreement which has been breached.

 BP Lawyers can assist you
BP Lawyers can assist you in providing the best solution for your industrial relations dispute and problems in your company. You can contact us through or +62821-1234-1235


Author :
Rahmi Triani Uzier S.H.

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