The Concept of Islamic Law in Resolving Industrial Relations Disputes Through Arbitration as a Renewal of Out-of-Court Dispute Resolution Laws Muhammad Mahendra Maskhur Sinaga (a*), Efik Yusdiansyah (b), Irianti Sundary (c), Muhammad Panca Prana Mustaqim Sinaga (d)
a) Doctoral Program, Faculty of Law, Bandung Islamic University
Jalan Tamansari No. 20, Bandung, West Java 40116, Indonesia
b) Faculty of Law, Indonesian University of Science
Jalan Akses Tol No. 50, Bekasi Regency, West Java, Indonesia 11650
Abstract
The regulations governing the resolution of industrial relations disputes through arbitration in Indonesia are stipulated in Law No. 2 of 2004 on the Resolution of Industrial Relations Disputes. However, from the enactment of this law until now, there has been no traceable resolution of industrial relations disputes through arbitration. According to data from the Ministry of Manpower of the Republic of Indonesia^s website, reports have only been published on the resolution of industrial relations cases from 2022 to June 2025. Out of a total of 24,018 registered disputes during this period, none were resolved through arbitration. Nevertheless, resolving industrial relations disputes is essential for three reasons. First, conceptually, the arbitration mechanism aligns with Islamic law as mandated in the Quran (Surah An-Nisa^ 4: Verse 35). Second, theoretically and methodologically, resolving industrial relations disputes through arbitration is necessary. Third, Articles 29 to 54 of Law No. 2 of 2004 lack detailed provisions for the institution of industrial relations dispute arbitration. Based on the theory of judicial power formation in Islamic law history (tarikh tasyri^), the rule of law theory, which posits a law-based state that guarantees justice, and the state institution arrangement theory, which aims to analyze the legal basis, establishing the Industrial Relations Dispute Arbitration Body as a state institution is appropriate for resolving disputes between workers and employers. This allows each party to select an arbitrator deemed fair in rendering decisions.
