Indonesia
Answer ... The basic policy of Indonesian labour law is that the dismissal of an employee should be prevented or even, in some cases, prohibited. The general principle is that the Labour Court must approve every termination of employment unless the termination is agreed or otherwise not disputed by the employee.
The Labour Law, as amended, and Government Regulation 35/2021 can be construed as permitting the employer to effectively terminate the employment relationship by written notice of termination with reasons, while ensuring that the employee has the right to object, negotiate and commence legal proceedings for wrongful dismissal in the Labour Court.
In instances where, following written notice, the employee agrees to a voluntary mutual termination agreement (MTA), the question of the employee’s acceptance or rejection of the termination will not be relevant. The execution of the MTA will be the employee’s response and settlement.
Indonesia
Answer ... Subject to any specific warning requirements that must be complied with as regulated in the employment agreement, company regulations (work rules) or collective labour agreement, Government Regulation 35/2021 specifies that written notice must be given in the form of a notification letter duly served on the employee at the latest 14 working days before the effective date of termination. If the employee does not object, the termination need only be reported to the local manpower service office. Otherwise, the objection from the employee must be delivered to the employer within seven working days of receipt of the notification letter.
Indonesia
Answer ... Government Regulation 35/2021 stipulates that the employee can reject the termination notice by delivering an objection to the employer within seven working days of receipt of such notification letter. In such cases, the termination process will then involve:
- bipartite negotiations;
- non-binding mediation; and
- Labour Court approval.
Indonesia
Answer ... Article 40 of Government Regulation 35/2021 provides the following calculations for the minimum statutory severance and long-service pay.
|
Completed years of service |
Severance pay |
|
Less than one year |
One month’s salary |
|
One year or more, but fewer than two years |
Two months’ salary |
|
Two years or more, but fewer than three years |
Three months' salary |
|
Three years or more, but fewer than 4 years |
Four months’ salary |
|
Four years or more, but fewer than 5 years |
Five months’ salary |
|
Five years or more, but fewer than 6 years |
Six months’ salary |
|
Six years or more, but fewer than 7 years |
Seven months’ salary |
|
Seven years or more, but fewer than 8 years |
Eight months’ salary |
|
Eight years or more, but fewer than 9 years |
Nine months’ salary |
|
Completed years of service |
Long-service pay |
|
Three years or more, but fewer than six years |
Two months’ salary |
|
Six years or more, but fewer than nine years |
Three months’ salary |
|
Nine years or more, but fewer than 12 years |
Four months’ salary |
|
12 years or more, but fewer than 15 years |
Five months’ salary |
|
15 years or more, but fewer than 18 years |
Six months’ salary |
|
18 years or more, but fewer than 21 years |
Seven months’ salary |
|
21 years or more, but fewer than 24 years |
Eight months’ salary |
|
24 years or more |
10 months’ salary |
Other compensation payable to the employee includes:
- compensation for annual leave to which the employee is entitled but has not taken or forfeited;
- any costs or expenses incurred in returning the employee and his or her family to the place where he or she was recruited (if applicable); and
- any other matters agreed to in the employment agreement, company regulations (work rules) or collective labour agreement.
Further, employees may be entitled to separation pay, in an amount which is contractually agreed with the employer.
The total benefits that will be received by the employee will be calculated based on the formula depending on the grounds for termination as prescribed by Government Regulation 35/2021.
