LABOR DISPUTE IN INDONESIA

 In Ketenagakerjaan

Humans are highly social beings. As a social creature (zoon politicon), we interact with other people and share experiences with them. In such interaction, there is no doubt that there would be differences in matters of interest that results in disputes, disagreements or conflicts, including in the workplace.

A labor dispute in Indonesia refers to a conflict between an employer and its employees related to the terms (like work hours, wages, conditions of employment, fringe benefits, tenure, etc) that need to be negotiated during collective bargaining, (the negotiation of wages and other conditions of employment by the employee organization) or the implementation of terms that have agreed upon.

Based on Act No. 22 in 1957, a labor dispute in Indonesia (based on the disputed material) can be divided into two, namely rights dispute and dispute of interest.

  • The right dispute, such as dismissal dispute, arises due to one of the parties in a labor agreement does not fulfill the contents of the agreement, the employer’s regulations or the laws. The disputes need to be finally resolved by arbitration in the bargaining council or CCMA, or adjudication in the labor court.
  • Dispute of interest, such as wage dispute, is a conflict between employers or employers’ associations with the labor associations because there is no conformity to the terms of employment and/or labor conditions. The dispute can be resolved by using a ‘power-play’ by the parties involved in or by involving striking or locking out when the parties do not agree to settle the dispute. The parties involved are encouraged to agree to resolve the dispute by some form of private arbitrations, such as final offer arbitration or pendulum arbitration.

Apart from the above categories, a labor dispute in Indonesia can also be divided based on the disputants, which are the following:

  • The individual dispute which is between workers and employers.
  • The collective dispute is a dispute arising between trade unions and employers.
  • Disputes between trade unions are disputes arising between labor unions in a single company due to a lack of understanding of the labor rights and obligations.

When the labor dispute arises, the first thing to do is to hold negotiations between the disputing parties. If the negotiations reach an agreement, then the negotiations are organized into a labor agreement.

When bipartite labor dispute resolution doesn’t reach an agreement, the disputing parties may hold a bipartite labor dispute resolution. This resolution can be divided into three forms, which are mediation, conciliation, and arbitration.

In mediation, a mediator is involved in the resolution process, while in conciliation, a conciliator who is registered at the manpower authority at district/city level is involved in. Mediation will be held if the disputes arise when drawing up or changing labor requirements; when there are termination conflicts, and there are conflicts between labor unions within one company.

If the disputes arose when drawing up or changing labor requirements, or the conflicts are between labor unions within one company, an arbiter which is appointed by the Ministry of Manpower is involved in.

In case the disputants cannot settle the dispute both in mediation or conciliation process, all the parties involved may forward the dispute to the Labor Court (industrial relations court).

 

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

Contact us now at ask@bplawyers.co.id or phone: +62 821 1000 4741

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