The Role of the Industrial Relations Court in Resolving Seafarer-Employer Disputes
Authors
The resolution of labour disputes between seafarers and ship employers has long been a subject of legal ambiguity in Indonesia. This stems from overlapping jurisdictions between the Admiralty Court (Mahkamah Pelayaran) and the Manpower Offices (Dinas Ketenagakerjaan or “Disnaker”). The Admiralty Court often defers labour-related issues to Disnaker, while Disnaker, in turn, faces challenges due to the unique characteristics of seafarer employment, particularly the Seafarer Employment Agreement (Perjanjian Kerja Laut or the “PKL”), which differs significantly from standard employment agreements.
In this Shipping Series, we will explore the legal framework governing such disputes, recent regulatory developments, and the implications for dispute resolution in the maritime sector.
General Labour Dispute Resolution Process for Employees
Under Indonesian law, labour disputes involving general employees and employers are governed by Law No. 2 of 2004 on Industrial Relations Dispute Settlement. The resolution process typically follows several key stages, summarized as follows:
- Bipartite Negotiations – Initial discussions held directly between the employer and the employee.
- Mediation or Conciliation – If the bipartite negotiations fail, the dispute may be escalated to a local Disnaker located in the domicile of the employer, where a mediator or conciliator facilitates further resolution efforts.
- Mutual Agreement – If both parties reach a consensus during mediation or conciliation, a mutual agreement (kesepakatan bersama) may be executed, thereby resolving the dispute without the need for further legal proceedings.
- Industrial Relations Court (Pengadilan Hubungan Industrial or “PHI”) – Should mediation efforts prove to be unsuccessful, and a mutual agreement is not reached, the case proceeds to the Industrial Relations Court, which issues a legally binding decision.
However, please note that this process is commonly applied for the resolution of general labour disputes. Given the unique nature of the PKL, this general mechanism may be challenging to applied directly to seafarers as the general provisions for employees through Law No. 13 of 2003 and its amendments concerning Manpower (“Manpower Law”) does not apply in this context.
Exception of Labour Provisions for Seafarers
While the Manpower Law generally governs employment relationships in Indonesia, Law No. 17 of 2008 as amended by Law No. 66 of 2024 on Shipping (“Shipping Law”) also stipulates that employment in the shipping sector must comply with the prevailing manpower laws and regulations.
However, the elucidation of Article 337 paragraph (1) of the Shipping Law mentions an exception for implementation of the employment provisions specifically for seafarers. Specifically, it clarifies that employment matters concerning seafarers are governed by a distinct legal framework, namely:
- The Commercial Code (Kitab Undang-undang Hukum Dagang – “KUHD”) – particularly Articles 398 to 436, which govern the PKL and responsibilities.
- Law No. 15 of 2016 on the Ratification of the Maritime Labour Convention – addressing seafarers’ employment rights and working conditions.
- All laws and regulations in the field of maritime affairs.
Given the distinct nature of a PKL, marked by unique risks, working environments, and mobility, applying standard industrial relations mechanisms can be deemed unsuitable, requiring a maritime-specific dispute resolution approach.
Shipping Law: The Admiralty Court’s Role in Mediation
Article 251 of the Shipping Law provides further provision concerning the roles of the Admiralty Court which grants it limited authority to mediate PKL-related disputes between seafarers and ship owners. However, unlike Disnaker mediators, it remains uncertain whether the Admiralty Court can issue binding or recommendatory outcomes (such as anjuran). While this provision introduces an alternative forum for maritime labour disputes, its effectiveness is hindered due to the absence of implementing regulations that clearly define the procedural framework and legal consequences of such mediation process.
Despite these limitations, the Admiralty Court’s involvement represents a positive development for the shipping sector. This is particularly important because the scope of a seafarer’s work is not widely understood. The presence of an Admiralty Court, which is more familiar with the technical aspects of the maritime industry, helps create space for better informed discussions. Although the Admiralty Court does not have the authority to issue a written recommendation (anjuran tertulis) like Disnaker, its mediation before the Admiralty Court provides technical considerations specific to the maritime sector through its mediation process. Therefore, if the dispute is subsequently brought before the Industrial Relations Court (Pengadilan Hubungan Industrial – “PHI”), the parties will have obtained at least a technical assessment that may be taken into account during the proceedings.
Supreme Court Circular No. 2/2024: Clarifying Jurisdiction
To address longstanding jurisdictional uncertainty, the Supreme Court issued a Circular Letter No. 2 of 2024 (“SEMA 2/2024”), which provides two key clarifications:
-
Legal Hierarchy – While PKLs are primarily governed by the KUHD and the Shipping Law, in the absence of specific provisions, general labour laws such as the Manpower Law and its implementing regulations may apply on a supplementary basis.
-
Access to PHI – Seafarers are allowed to bring disputes before the PHI located in the jurisdiction where the PKL was signed.
SEMA 2/2024 acknowledges the distinct nature of maritime employment while reaffirming seafarers’ access to formal dispute resolution forums. However, although recent legal instruments such as SEMA 2/2024 and Shipping Law have contributed to clarifying the jurisdiction and roles of different institutions in maritime labour disputes, additional implementing regulations that further define their legal certainty, procedural clarity in practice, and enforceability have yet to be issued.
In summary, recent amendment to Shipping Law through the issuance of SEMA 2/2024 have helped clarify how seafarer disputes should be handled, allowing cases to be brought to the Industrial Relations Court and giving the Admiralty Court a limited mediation role. Although lacking detailed regulations still create uncertainty and challenges in practice, this marks a positive development in the shipping industry. In this case, further implementing regulations are essential to the resolve labour related disputes of the seafarer and to support the development of the maritime industry.
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
Related Updates
Latest Updates
