QUESTION & ANSWER #ACTIO8

Q: What is the definition of a Collective Agreement?

A: There is no expressed definition of a Collective Agreement in Law No. 2 of 2004 concerning Industrial Relation Dispute Settlement (“IRDS Law”). However, based on Article 7, Article 13 paragraph 1 and Article 23 paragraph 1 of theIRDS Law, we can conclude that the definition of a Collective Agreement is an agreement which is made by the parties who are in an industrial relations dispute and have found resolution to the dispute. The Articles also provide that a Collective Agreement is binding and becomes a legal obligation which shall be performed by the parties.

Q: Is there any requirement to submit the Collective Agreement to the Industrial Relation Court?

A: In the event the parties resolve the industrial relation dispute through the Collective Agreement, then Article 7, Article 13, and Article 23 of the IRDS Law provides that the Collective Agreement shall be registered by the parties in the Industrial Relation Court or District Court in the territory of the parties who entered into the Collective Agreement. After the registration of the Collective Agreement, parties will obtain a deed of Collective Agreement registration receipt as proof that the Collective Agreement has been registered in the Industrial Relation Court, and that deed of Collective Agreement registration receipt becomes part of the Collective Agreement.

Q: Is there any legal option for Employees, if the Collective Agreement which has already been registered in the Industrial Relation Court is not executed by the Company? What legal options do Employees have if the Company fails to perform its obligations under the Collective Agreement?

A: In the event that one of the parties fails to perform its obligations under the Collective Agreement, the aggrieved party (in this case the employee) can seek for an execution order from the Industrial Relation Court or District Court in the territory where the parties entered into the Collective Agreement.If the applicant for execution has a different domicile, and not domiciled with the District Court where the Collective Agreement was registered,then the applicant must submit the application for execution to the Industrial Relation Court or District Court in the domicile of the applicant. This Industrial Relation Court will then forward the registration to the Industrial Relation Court which will have the authorization to execute the Collective Agreement.

VCI/HE