Jakarta – Unlike the old system for handling industrial disputes under the Regional and Central Committee for Settlements of Industrial Disputes (P4D and P4P), the new one based on the labor court cuts through complicated legal proceedings.

For one, Law No. 2/2004 puts a definite time period on resolving the disputes – 140 days – and provides legal certainty on any decisions made before a case reaches the labor court.

Out-of-court settlements through bipartite negotiations, mediations or conciliation will certainly reduce the number of cases backed up in the courts from the old system. The lack of time certainty was a major flaw in labor dispute mediation.

Formerly, bipartite negotiations and mediation were encouraged by the government, but agreements were not binding, giving the loser the opportunity to buy time. Most disputes dragged on for months or years before they were eventually brought before P4D.

Law No. 22/1957 on settlements of industrial disputes required conflicting sides to go to P4D and P4P chaired by government officers after the mediation failed. P4D and P4P hearings were actually a quasi-court because they were conducted by the executive body, instead of the district court.

The law also gave the power to the manpower minister to veto P4P's decisions, ultimately rendering them powerless and undermining the body's credibility. Ministers during Soeharto's New Order regime frequently rejected P4P's pro-labor verdicts to stifle labor union development. The establishment of the State Administrative Court in 1991, the prolonged economic crisis and the advent of the national reform movement in 1998 underlined the inefficacy of P4P, especially when it came to workers' rights.

Last year's unfair dismissal case involving aircraft maker PT Dirgantara Indonesia is an example. P4P ruled for the workers – who fought a decision by the company to dismiss 6,000 of its 9,000 employees – but the Bandung-based company's management sued in the State Administrative Higher Court.

It was common for P4D or P4P panels – whose members consisted of five labor union representatives, five employer representatives and three from the government – to side with employers amid rife allegations of bribery.

Under the defined procedures of the new system, workers no longer need to go on strike to force their employers to respect their rights, to fight for their interests or to settle disputes between two or more labor unions in a company.

The Indonesian Employers Association (Apindo) and labor unions are required to have skilled negotiators to accompany or represent workers in bipartite negotiations, mediation, conciliation talks and the labor court to seek a fairer and faster settlement to their industrial disputes.

Gone are the loopholes that were exploited by both parties to circumvent decisions made in bipartite negotiations, mediations and conciliations.

Unlike its weak predecessor, the labor court has the authority to execute all agreements and court verdicts reached upon at all levels.