Is arbitration answer to labor rifts?

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.