LABOR LAW

Just like any other chapter, to understand the concept of labor law we need to understand a
contract. The contract is a situation when two-person or more binding something that occurs
right and obligation. So here we will talk about labor law, which means talking about the right
and obligation of labor or between employee and employer. Labor law is one of the
classifications of business law.

According to article 1 Act number 13 the year 2003, Manpower affairs or labor refer to every
matter that is related to people who are needed or available for a job before, during, and after
their employment. Labor law is a relationship between employee and employer in 3 different
situations or times. The law will cover up the process before employment such as recruitment.
The recruitment of employees must be based on the law.

Labor law governs about how the work conducted by the employee and the employer fulfills
their obligation toward the employee. Labor law during employment means it is talking about the
right and obligations of both parties. Labor law also exists when the work is finished. It governs
employee compensation, severance, and reward money.

Before continue discussing labor law, there are several terms you need to know. First, People
available for a job or person available for a job is every individual or person who can work to
produce goods and/ or services either to fulfill his or her own needs or to fulfill the needs of the
society. Then, A worker/laborer, is every person who works for a wage or other forms of
remuneration. Last, an employer shall refer to individuals, entrepreneurs, legal entities, or other
bodies that employ manpower by paying them wages or other forms of remuneration.

In labor law, there are 2 main relations, working relation, and industrial relations. Working
relation is the relationship between employee and employer based on a contract. This relation
only occurs when both parties agree to commit themselves to a certain consensus that is provided
in a contract, which called working agreement. Based on this working agreement there is a
relationship between employee and employer that occurs right and obligation for both parties.
Another relation is Industrial relations. The difference between working relations is that here
there are 3 parties, employee, employer, and government. The government will act as a regulator,
supervisor, and mediator. The regulator means the government makes regulations regarding
labor law and employees and employers must follow. Supervisor means to make sure the
conduction of the working relation is not against the law. Mediator means that the government
will be the third party if the employee and employer have disputes and cannot solve it in
mediation.

Sometimes in working relations, it occurs problems affecting employee and employer. The
problem can be because one of the parties doesn’t fulfill their obligation or there is a new policy
or law that disadvantage some party. When the problems occur and it cannot be solved before it
becomes a dispute, they can inform the government as a supervisor or law enforcer. The
problems now called industrial disputes. There are 4 types of industrial disputes.

First is the right dispute, it happens when the right of a certain party is not fulfilled by the
opponent. For example, the employer does not pay the salary of their employee for 3 months or
for 1 month the employee does not show at work without any knowledge. Second is interest
dispute, it is happening because of the certain interest of a certain party harmed by the other
party. Usually, it happens because the employee disagrees or feels a disadvantage with the new
policy made by the company.

The third is the termination of the employment dispute, which talks about when the company
does not fulfill the payment to the employee when termination happens. Article 156 Act 13 2003
stated and explain the calculation of severance pay and the calculation of the sum of money paid
as a reward for service rendered during the worker/ laborers term of employment. The last is a
dispute between labor unions and labor unions. It may occur when the company has more than 1
labor union and they can’t find the same output or agreement.

Like every dispute happen there always have dispute settlement. Labor law settlement is a little
bit different than any other legal dispute settlement. In labor law dispute settlement there are 3
processes. First is bipartite, which is direct communication between the parties. It is the first
process you need to do when the dispute happens. It is a formal meeting when both parties can
negotiate and settle the dispute internally.
If bipartite fail to have an agreement, and then the dispute can proceed to tripartite. Tripartite is
using a third party to help the settlement. You can use a mediation or reconciliation process. The
difference between mediation and reconciliation is mediation gather all three parties to discuss
the dispute while reconciliation, the reconciliatory will speak to the first party and second party
separately. The character of tripartite is not binding, means the result from third party only a
suggestion, you can follow it or not.

When the parties feel tripartite also does not come up with a win-win solution, they can go to the
litigation process. It can be court or arbitrage. The character of court and litigation process is
binding, so whatever the result from court and arbitrage, employee and employer need to follow.
And you only can choose 1 process, court or arbitrage. If you already choose the court, you
cannot go to the arbitrage again and vice versa.