Is arbitration answer to labor rifts?

By Ridwan M. Sijabat

JAKARTA (JP): Amid the proliferation of industrial disputes in Indonesia, union leaders and labor experts say the time has come for the country to look at alternative ways of resolving these conflicts.

One alternative under consideration is arbitration, something that has never been tried before here, but has proven successful in other industrial countries.

Experts and government officials agree that the current methods of solving labor disputes is too cumbersome and often offers little guarantee of success.

At present, a labor dispute is processed first through a bilateral forum involving management and worker representatives, and failing that through a trilateral forum with the involvement of government mediators, and finally the P4P, the government's committee to settle labor disputes.

Statistics from the Ministry of Manpower showed that last year, only 540 out of 800 cases of workers' dismissals that came to the government's attention were properly resolved. The others were left pending or never resolved properly. Most of these cases were from companies in Jakarta, West Java, North Sumatra, East Java, Riau and West Kalimantan.

These are only cases that involve dismissals. The government has also had to deal with hundreds of industrial actions with workers pressing for higher wages and better treatment.

Leaving these labor disputes unresolved or prolonging them is often quite costly, as the massive workers' protest in Medan in April, which turned into a racial riot, proved.

The Asian American Free Labor Institute (AAFLI) and the All Indonesian Workers Union (SPSI) jointly organized a seminar here recently to look at the advantages of arbitration as a way of resolving labor disputes.

The speakers and 100 or so participants, including those from the government, all agreed that labor arbitration can provide a more effective and quicker method of resolving industrial disputes.

They concluded that Indonesia should soon study this method in view of the escalating number of industrial actions across the archipelago.

Speakers at the seminar included Dr. H.P. Rajagukguk of the Indonesian Christian University, Deputy Chairman of SPSI Marzuki Achmad, Abdul Hakim Garuda Nusantara of the ELSAM non- governmental organization, AAFLI country director for Indonesia Valentin B. Suazo and American arbitrator James Gallagher.

Suazo said in his paper that the recent wave of industrial strikes, including April's Medan riot and the escalating number of unresolved labor conflicts are a clear indication that the present system is not functioning properly.

"Workers are clamoring for adequate wages and better working conditions that will permit them and their families to attain a better quality of life," he said.

He said the current labor dispute settlement mechanisms were obviously not satisfying workers' needs for a just, impartial and trustworthy avenue to channel their grievances and voice their side of the conflict without fear of reprisals or getting fired.

Gallagher shared with the seminar participants his experience as an arbitrator in the United States, but said he had no intention of transplanting the American arbitration system here.

"I am simply relating the American experience in applying the arbitration system to resolve conflicts between workers and management," he said.

He stressed, however, that the American experience had been useful in reducing the number of unresolved labor conflicts and providing better protection for workers.

He cited three essential elements -- independence, neutrality and finality -- that are required for successful arbitration. "Had we not provided for these three basic principles, most, if not all, experts would agree that the process certainly would have failed," he said.

If arbitration is to work, it must be viewed as an independent form of self-governance that the parties have chosen for themselves, he said. "Accordingly, any agreement to arbitrate differences between the parties should be automatically upheld by the court unless the item in question is expressly excluded from the arbitration process."

He said an arbitrator is not allowed to take sides and has to be free of any personal or financial interest to be able to run hearings in an impartial and competent fashion.

Arbitration had various versions or modes, depending on subject matter. He cited rights arbitration, interest arbitration, grievance arbitration and tripartite arbitration as examples.

Rights arbitration referred to a process addressing the question of the respective rights of labor and management, while interest arbitration was limited to resolving disputes in the public sector.

Grievance arbitration referred to a process in which an arbitrator was limited to resolving a dispute over the interpretation or application of a labor agreement which has already been adopted.

Virtually all labor problems can be brought to an arbitrator, he said. "Labor arbitration covers not only individual but also mass disputes between workers and management."

S. Idrus, chairman of the SPSI trade union in the textile sector, said he and his sector planned to propose the arbitration system to the SPSI national meeting in 1995. "If the arbitration system is introduced, many labor cases in my sector can be settled."

The Chairman of the trade union in the forestry sector, Saralem Purba, concurred with Idrus and said that implementing the arbitration was urgent.

Meanwhile, Director General for Industrial Relations and Labor Standards Suwarto said that the 1957 labor law has already recognized arbitration as an alternative to solving labor disputes although the practice has not been explored.

The government's position is to support the introduction of arbitration, but he added that this alternative can only be invoked with the consent of both parties to the conflict. "Arbitration cannot be used if one of the two sides does not agree."

He also said that arbitration awards are not final nor binding by law until the P4P committee gives its endorsement.

Window A: Labor arbitration can provide a more effective and quicker method of resolving industrial disputes.

Window B: Any agreement to arbitrate defferences between the parties should be automatically upheld by the court.