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Industrial Relations Dispute Settlement, Indonesia - Inco Labour Dispute Case

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In November 2007, workers at Inco’s Sorowako site staged an 11- day strike related to compensation demands. Inco deducted pay from the striking workers on the basis that there was a valid collective agreement still in force when the strike occurred and thus the “no work, no pay” principle applied. The labour union that organized the strike protested the decision and this matter proceeded through the industrial relations dispute settlement mediation process. On January 7, 2008, the mediator issued a recommendation stating that the salary deduction by Inco was lawful.


This was rejected by the labour union who was given ten days in which to submit written acceptance to the recommendation. The union submitted a letter to the Industrial Relations Court in Makassar asking to enforce the Settlement Agreement signed by Inco and the Union on November 25, 2007, rather than filing a lawsuit concerning the recommendation of the mediator (as would otherwise be the avenue under the Industrial Relations laws and regulations). The Industrial Relations Court officially rejected the Union’s proposal to enforce the Settlement Agreement, due to the absence of a condemnatory clause in the document. Furthermore, the Industrial Relations Court suggested filing a lawsuit if one of the parties believes that the other party has failed to implement the Settlement Agreement.


On November 23, 2009, the Union filed a lawsuit at the Industrial Relations Court in Makassar requesting the Court to order Inco to pay the deducted salaries of the plaintiffs (the claim’s amount is approximately US $86,000).[1]


  1. 1. PT International Nickel Indonesia. (2009). Generating Value - 2009 Annual Report, p. 93-4.

Contributor(s): This article was modified by Centre on Asia and Globalisation (3).