Employment relations constitute a legal relationship that creates rights and obligations between employees and employers. One of the recognized causes of termination of employment is retirement. In practice, retirement-related termination frequently gives rise to disputes regarding the compensation rights that should be granted to employees. Such disputes become more complex when employers provide pension programs financed through employer and employee contributions. Differences in the interpretation of the legal relationship between pension benefits and severance entitlements often lead to industrial relations disputes. This study aims to analyze the legal conflict between severance pay and pension programs as reflected in the Decision of the Industrial Relations Court of Medan Number 255/Pdt.Sus PHI/2025/PN Mdn. The research employs a normative legal approach using statutory, conceptual, and case approaches. Data were collected through literature studies of legislation, legal doctrines, and court decisions. The findings reveal that the dispute arose due to differing interpretations regarding the legal position of pension benefits in fulfilling employer severance obligations. Employees argued that pension benefits and severance pay are separate rights, whereas the employer maintained that pension benefits funded by employer contributions may be calculated as part of retirement compensationobligations. The decision highlights the necessity of harmonizing statutory provisions, collective labor agreements, and principles of worker protection within Indonesia’s industrial relations framework.