Your knowledge of the law is good. You should focus on negotiating with your employer. After 17 years of work, your employer does not have much justification for preventing you from resigning. If he doesn't give you a raise and you decide to resign, inform your employer in writing at least one month (30 days) prior to the expiration date on your work/residency visa. You should include your request to be allowed to remain until after your child's exams. Considering the long period you have been with the company, your employer doesn't have a legitimate reason not to agree to this request. In case he is adamant and denies your request, file a complaint at the Labor Office in your area.
 

 
The mediator explained to you the routine procedure and there is nothing you can do except to work harder to reach a settlement. If no agreement is reached you need to get the Labor Office mediator to give you his opinion in writing. This is required by the Labor Ministry to move further in the process.