Employment Dispute Process in Indonesia

Employment dispute process in Indonesia refers to Law No. 2 of 2004 concerning Employment Disputes Resolution (“EDR Laws“) although the substance of dispute refers to Law no. 13 of 2003 concerning Manpower. However, the EDR Laws provides limitations on the types of employment disputes, as follows:

  1. Dispute of Rights
  2. Dispute of Interest
  3. Dispute of Lay Off
  4. Dispute between Labor Unions in a Company

Based on the provisions of EDR Laws, to take the Employment Dispute process, it must through several stages, i.e the bipartite, tripartite process (Mediation, Conciliation, Arbitration), and through the Industrial Relations Court.

Bipartite Process

As stated in the Article 3 paragraph (1) EDR Laws, which states as follows:

Industrial dispute settlement shall be pursued first through bipartite negotiation of deliberations to reach consensus“.

Based on these provisions, it is very clear that the settlement of industrial relations must go through or take settlement process through bipartite process, in which negotiations between employees or labor unions with company to resolve the employment disputes. Therefore, it is very clear that the settlement through bipartite should be conducted between the company and employee directly for amicably settlement.

In practice, the parties can be accompanied by an attorney to conduct a bipartite negotiations as long as it is in accordance with the regulations, where the legal attorney must meet the standards as an advocate according to the Laws No. 18 of 2003 concerning Advocates.

Furthermore, if the parties cannot reach an agreement in the bipartite process, the dispute can be continued to the Mediation stage at the relevant Manpower Office.

Mediation Process

As stated in Article 4 paragraph (1) regarding the mediation process if no agreement is reached between the Company and Employee, as follows:

In the event that the bipartite negotiation fails as referred to in Article 3 paragraph (3), then one or both parties shall register the dispute to the institution who responsible for the manpower sector by attaching evidence that the settlement efforts through bipartite negotiation have been carried out.

In this regard, as practice, a letter of application for register industrial relations disputes at the Manpower Office must be attached by supporting evidences. As stated in Article 4 paragraph (2) regarding supporting evidence, as follows:

If the evidence referred to in paragraph (1) is not attached, the government agency who responsible for manpower affairs returned the documents to be completed not later than seven (7) working days from the date of receipt of the returned file“.

In the event that no agreement is reached in the mediation process, the mediator will issue a written recommendation containing the mediator’s opinion on the dispute.

If the parties cannot reach an agreement in the mediation process, then the party who is not satisfied can file an industrial relations dispute lawsuit at the local district court which located in the provincial capital, by attaching the written recommendation.

Industrial Relations Court Process

As stated in Article 55 of EDR Laws regarding the authority of the Industrial Relations Court, it is regulated as follows

  • at the first level regarding disputes over rights;
  • at the first and final level regarding disputes over interests;
  • at the first level for layoff disputes;
  • at the first and final levels regarding disputes between labor unions in a company.

As for filing a lawsuit for industrial relations disputes must be filed at the District Court in which the jurisdiction covers the place where the employee works, as regulated in Article 81 EDR Laws. However, it is quite different type and process with the lawsuit for civil or commercial case in the district court

Furthermore in practice, if the worker is assigned to move in several branches, the competent court is the district court located in the province of the last employee has worked (placed), this is also determined for mediation process at Manpower Office. Industrial Relation Court has appeal process to the high court like civil or commercial lawsuit, but directly at the cassation level, then they can file legal remedies for Judgement Reconsideration (Peninjauan Kembali) if they are still not satisfied.

author: wilopo husodo


Published by Husodo and Partners