Termination and Severance: What Are Employees Entitled To?
Understanding severance components, bipartite negotiation and the Industrial Relations Court.
Terminations in Indonesia are governed by the Manpower Law as amended by the Job Creation Law, and by Government Regulation No. 35 of 2021. Note that Constitutional Court Decision No. 168/PUU-XXI/2023 ordered a new manpower law to be enacted, so the rules may continue to evolve.
What employees receive
Severance pay, based on length of service.
Long-service pay for employees with qualifying service.
Compensation of rights, such as untaken annual leave.
The final amount depends on the reason for termination.
Dispute procedure
Termination disputes must first go through bipartite negotiation. If that fails, the parties can use mediation or conciliation at the manpower office before filing a claim with the Industrial Relations Court.
General information, not legal advice.
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