In general, the methods used to resolve commercial disputes in Indonesia are litigation, arbitration and alternative dispute resolution (ADR). The resolution of commercial disputes through arbitration or ADR (eg, mediation) is generally governed by the Law Concerning Arbitration and ADR, which recognises the principle of competence under which the district courts have no jurisdiction to try disputes between parties bound by an arbitration agreement.
The Ministry of Laws and Human Rights Regulation on the Settlement of Disharmony between Laws and Regulations through Mediation recently took effect. The regulation reinstates the possibility to settle disputes concerning laws and regulations outside the courts through the introduction of mediation, including disputes over ministerial regulations, non-ministerial government institution regulations, non-structural institution regulations and regional laws and regulations.
The Indonesia National Board of Arbitration (BANI) was established in 1977. In 2016 the Ministry of Law and Human Rights created BANI Pembaharuan (ie, the Renewed BANI), which claims that it is a revised version of the original BANI. However, the original BANI does not recognise the Renewed BANI and claims that it has been using the BANI name unlawfully. This duality could create uncertainty when commercial parties wish to appoint BANI as their dispute settlement forum.
The minister of manpower recently amended the Minister of Manpower and Transmigration Regulation on the Requirements for Outsourcing, simplifying manpower outsourcing requirements to reflect current needs. The main highlight of the changes is that the required Manpower Office approval can now be obtained online and transferred using the online single submission system. Further, the time limit for registering a manpower outsourcing agreement with the Manpower Office has been removed.
One of the most common ways in which a company can use a person's services is by entering into a partnership agreement and thereby treating them as a partner instead of an employee. However, partnership agreements often give rise to disputes, especially if they are terminated. There have been many cases in which the Manpower Office or the Industrial Relations Court have deemed poorly drafted partnership agreements to be employment agreements.
Previously, under the Manpower Law, employers in Indonesia could include an article in their employment agreements, company regulations or collective labour agreements which allowed them to terminate employees for having a marital or blood relationship with another employee in the same company. However, the Constitutional Court recently sided with eight individual claimants who contended that the wording of the law contravened their constitutional rights.
The number of expatriate employees taking legal action against their employers for terminating their employment contracts, whether for economic reasons or for misconduct, has grown in recent years. Although most jurists maintain that expatriates cannot be permanent employees or receive the same severance entitlements as Indonesian permanent employees, this has not always been the case.
Leasing is an easy way for businesses to acquire office space in a prime location and helps them to free up working capital. Thus, a carefully prepared lease agreement is invaluable for the lessee and lessor. As a number of issues may be encountered when leasing a building for office space, it is important to consider these ahead of time.