LABOUR LAW

by

Lia Alizia, S.H.

and
Candace Anastassia Limbong, S.H.

Jakarta, 3 April 2017

BCD Indonesia
 I. Company Regulations
1. Company Regulation (CR)
a. Any company with at least 10 employees, legalized by the appointed
minister or official. (Art 108 (1) Manpower Law)
b. 1 set of the CR per company; branches may adjust for local conditions
& must register the CR with the local MOM office. (Art 3 (4) Manpower
Regulation 28 of 2014)
c. Each company in a company group should have its own CR. (Art 3 (6)
Manpower Regulation 28 of 2014)
d. Legalized by the local office of the MOM in a regency/city for a
company within 1 regency/city area; (Art 7 (1) (a) Manpower Regulation
28 of 2014)
e. Legalized by the local provincial MOM office for a company in more
than 2 areas in 1 province. (Art 7 (1) (b) Manpower Regulation 28 of
2014)
f. Legalized by the Directorate General (Dir Gen) of Industrial Relations
& Jamsostek (now BPJS Manpower) for a company operating in more
than 1 province. (Art 7 (1) (c) Manpower Regulation 28 of 2014)
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2. CR must contain at least:
a. the employers rights and obligations;
b. the employees rights and obligations;
c. employment conditions;
d. companys code of conduct; and
e. the term and commencement date of the company regulations

(Art 111 Manpower Law)

3. Drafting CR
a. Representative of employees may or may not provide any suggestion on a
draft company regulation and company may or may not accept any
suggestions. Any suggestions from representatives of employees and/or
labor union cannot be disputed;
b. Representative(s) of employees is voted on from each division in company;

(Art 110 Manpower Law and Art 4 Manpower Regulation 28 of 2014)

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4. Validity
a. Valid for up to 2 years & must be renewed 30 days before expiry.
b. If the term of the existing CR has expired, the company can apply to the
local MOM office for an extension for up to 1 year.

(Art 123 Manpower Law)

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 If the company wishes to amend the CR and the amendments are less
generous than the current CR, so long as they do not violate the prevailing
regulations, the amendments must be accepted by the labor union(s) and/or
representatives of the employees.

(Art 12 Manpower Regulation 28 of 2014)

The company can submit the draft renewed CR with the amendments to the
local MOM office. Unlike under the previous regulation, the amendments do
not have to be accepted by representatives of the employees and/or labor
union(s) but should be submitted to them for recommendation.

(Art 13 Manpower Regulation 28 of 2014)

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 II. Collective Labor Agreement (CLA)
1. CLA is between the labor union and employer, effective as of the date of the
signing. The employer must respond to written requests from any registered
labor union.

2. 1 CLA per company, branches may adjust for local conditions, but their CLA
must be accepted by the employer and labor union(s).

(Art 15 Manpower Regulation 28 of 2014)

3. Company Groups: a holding company must have 1 CLA and each subsidiary
company must also have 1 CLA.

(Art 16 Manpower Regulation 28 of 2014)

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4. Conclusion and/or Legalization

a. 1 labor union, but no majority, must be supported by more than 50%

of all employees in a company through voting for employee
representatives for negotiations.

b. Voting committee includes labor union management and

representatives of non-union members.

c. Voting notified at least 7 days prior, 30 days after the establishment of

the voting committee, they should announce the result of the voting.
The voting must be witnessed by a representative of the employer.

d. More than 1 labor union, max 3 labor union(s) representing at least

10% of all employees can represent employees in negotiations.

e. Verification of membership in a labor union is evidenced by

membership card.

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f. Negotiator team: up to 9 with full authority.

g. Before negotiations, the procedural rules for negotiations to be agreed

between employer and labor union: duration, content, place,
procedure, settlement of deadlocks, validity and negotiation costs
(borne by employer unless agreed otherwise).

h. No consensus by the agreed time limit: report to the MOM office for
settlement under Law No. 2 of 2004.

i. Registered with the local regency/municipality MOM office for a

company within 1 regency/municipality.

j. Registered with the local provincial MOM office of for a company in

more than 1 area in 1 province.

k. Registered with the Dir Gen of Industrial Relations & Jamsostek for a
company in more than 1 province.
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5. Validity
The term of a CLA may be up to 2 years with an extension of 1 more year.

6. Statutory Minimum
a. the employers rights and obligations;

b. the employees rights and obligations;

c. employment conditions;

d. companys code of conduct; and

e. the term and commencement date of the company regulations.

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 Highlighted issues to be included in Company
Regulation
a. Electronic communications, email/internet abuse, software copyright policies;

b. Gifts and Favors policies/FCPA

c. Outside conflicts of interest

d. Code of Conduct

e. Data Privacy and Changes in Personal Data

f. Natural disaster clause

g. Political Activities

h. Rotation and Relocation

i. Demotion

j. Suspension (no termination)

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k. Personal Leave

l. Sexual Harassment

m. Infectious Diseases

n. Security Clearances

o. Medical Check-ups

p. Bipartite Cooperation Institution

q. Clear-desk Policy

r. Smoking

s. Early Retirement Schemes

t. Art 1603 of KUHPerdata or Indonesian Civil Code (serious misconduct)

u. Redundancy

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 III. Warning and Suspension

A. Warning Letter
1. The Manpower Law basically requires that employer serve a first,
second and third consecutive warning letter before terminating an
employee unless provided for otherwise in employment
agreement, CR or CLA.

2. Each of the warning letters may be effective for up to 6 months.

3. The warning letter should specify the violation and disciplinary

action to be taken by the company/employer.

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 A.1 Highlighted Issues when Serving Warning
Letters

1. Explain purpose of warning and legal basis.

2. Explain companys expectations and make sure the employee

understands.

3. Present documents or other evidence of the violation.

4. Give the employee an opportunity to respond.

5. Ask the Employee to sign the warning letter as his/her acknowledgment

of the warning.

6. Prepare minutes of the meetings for your records.

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 A.2 Post Disciplinary Actions
1. Closely monitor of employees development or progress.

2. Regularly document both good and bad performance .

3. Periodic performance evaluations should be fair and honest.

4. As soon as performance or discipline problems occur, start documenting

communications with employee.

5. A progressive disciplinary process is best: an oral warning, written warnings

that his/her job is in jeopardy, then, if necessary, termination.

6. Employee should be informed that his/her job is in jeopardy in writing.

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 A.3 Problems

1. Employee may reject the warning letter.

2. The employee may submit a complaint to the local manpower office.
3. The employee(s) may go on strike.
 B. Suspension
As per the Manpower Law, the employer may suspend the employee pending
his/her termination of employment, but must pay his/her salary and provide the
other rights he/she usually receives.

The suspension notice must be in writing, with clear reasons and the employees
obligations while on suspension.

An employee may be suspended during an internal audit or investigation for a

certain period so long as it is covered by the employment agreement, CR or
CLA.

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 IV. Termination
Procedure for Termination of Employment

Legal basis: Law No. 13 of 2003 on Manpower (Manpower Law) and Law No. 2
of 2004 on the Settlement of Industrial Relations Disputes (Law 2/2004)
The general principles of the termination of employment:
1. terminations should be prevented and are prohibited in some cases.
Termination should be for a reason deemed acceptable under the Manpower
Law;
2. termination procedures under Law No. 2 of 2004 must be followed;
3. the company/employer must first obtain approval from the Labour Court.
Unilateral termination of employment is not allowed unless the employer and
employee enter into a mutual termination agreement (MTA) which should
then be registered with the Labour Court. If a party does not perform, the
other party to the mutual termination agreement may apply to the Labour
Court for a writ of execution.

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 Exceptions to the general principle of approval
being required to terminate an employment
relationship include the following:

1. termination during a probation period;

2. the voluntary written resignation of the employee;
3. the retirement of the employee;
4. the expiry for the employees fixed term contract;
5. the death of the employee; and
6. the employee is detained by the authority and after 6 months period of being
detained, the employee is unable to work due to the criminal proceedings
against the employee/an employee is found guilty by a courts ruling before 6
months period.

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 Termination of employment is prohibited for the
following:
1. activities of the employee in a labor union;
2. the employee reporting any illegal act committed by the employer to the
authorities;
3. the ideology, religion, race, gender, physical condition, marital status of the
employee;
4. the employee being ill continuously for less than 1 year as stated in a
physicians certificate;
5. the employee becoming permanently disabled or sick for work-related reasons
and the healing period is unpredictable;
6. the employee being on State duty;
7. the employee is required to carry out religious duties approved by the
authorities;
8. the employees marriage, pregnancy, birth or miscarriage for female workers;
9. for female workers, the feeding of their babies;
10. an employee is related to another employee by blood or by marriage.
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 Types of Termination of Employment and
Changes to the Termination Provisions and its
Articles under the Manpower Law

1. Termination for Minor Mistakes

If an employee commits an offence under the employment agreement, CR

or CLA, before terminating him/her, the employer must issue 3 warning
letters unless stated otherwise in the employment agreement, CR or CLA.
For example: poor performance, tardiness, etc.

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2. Termination for Major Mistakes (serious misconduct)
Article 158 and other relevant articles on serious misconduct were revoked by
the Constitutional Court in 2004. Employers can no longer immediately
terminate employees without approval from the Labor Court for serious
misconduct because Article 158 defines it as criminal conduct; therefore, a
court guilty verdict is required.

The Minister of Manpower and Transmigration (MOM) has issued 2 circular

letters ie. Circular Letter No.SE-13/MEN/SJ-HK/I/2005 and Circular Letter No.
B. 33/D-PHI/2-V/2005 which clarify terminations of employment for cause. If
'for cause' is changed to for urgent reasons immediate termination is
permissible. These urgent reasons are listed in Article 1603 o. of the
Indonesian Civil Code. But the termination procedures as provided in Law No.
2 of 2004 should be followed.
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3. Termination for Financial Reasons under the Manpower Law:
a. Termination due to a change of status, merger, consolidation,
acquisition/change of company ownership.

b. If the employer becomes insolvent.

c. If the employer has suffered continuous losses for 2 years consecutively

as proved by its financial reports for the last 2 years that have been
audited by a public accountant.

d. For redundancy (but Article 164 (3) on this matter was revoked by the
Constitutional Court Ruling in 2012).

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4. Other reasons for termination:
a. Force majeure;

b. The demise of the employee;

c. The retirement of the employee;

d. Termination because the employee has been ill for 12 consecutive

months, as certified by a doctor;

e. Termination because the employee has been detained for more than 6
months for an alleged crime or has been found guilty by a criminal court.
When an employee is detained for allegations of criminal conducts, the
employer is under an obligation to provide financial aid to family members
of the employee in the following amount:

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 (i) For employee with 1 family member, 25% of the employees salary

(ii) For employee with 2 family members, 35% of the employees salary

(iii) For employee with 3 family members, 45% of the employees

salary;

(iv) For employee with 4 or more family members, 50% of the

employees salary.

f. termination for being absent for 5 days without leave, without prior
notification, with proper summons having been served twice (2x) by the
employer;

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g. The employee terminates the employment due to the employer's:
i. abuse, severe insult or threat against the employee;

ii. persuading or directing the employee to engage in unlawful conduct;

iii. failure to punctually pay the agreed salary for 3 months;

iv. failure to comply with its obligation to the employee;

v. directing the employee to do work beyond the agreed term; or

vi. forcing the employee to do work which is harmful to the employees life,
safety, health or decency while that type of work is not described in the
employment agreement.

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 V. Termination Entitlements

The terminated employee will receive a severance package comprising

a severance payment and/or service period recognition payment and
compensation payment.

The amount of package will be determine by the employees work

period, reason of termination, and the salary.

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A. Calculation of Severance, Service Period
Recognition Payment and Compensation
Severance Pay
Service period less than 1 year 1-months salary

Service period 1 year or more but less than 2 years 2-months salary

Service period 2 years or more but less than 3 years 3-months salary
Service period 3 years or more but less than 4 years 4-months salary

Service period 4 years or more but less than 5 years 5-months salary

Service period 5 years or more but less than 6 years 6-months salary

Service period 6 years or more but less than 7 years 7-months salary

Service period 7 years or more but less than 8 years 8-months salary

Service period 8 years or more 9-months salary

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 Service Period Recognition Payment

Service period 3 years or more but less than 6 years 2-months salary

Service period 6 years or more but less than 9 years 3-months salary

Service period 9 years or more but less than 12 years 4-months salary

Service period 12 years or more but less than 15 years 5-months salary

Service period 15 years or more but less than 18 years 6-months salary

Service period 18 years or more but less than 21 years 7-months salary

Service period 21 years or more but less than 24 years 8-months salary

Service period 24 years or more 10-months salary

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Compensation:
a. Untaken annual leave not validly forfeited.

b. Transportation costs for Employee and his/her immediate family to return to

the place of recruitment.

c. Housing, medical treatment and medication allowances, 15% of severance

pay & service period recognition payment, if eligible.

d. Other matters under the Employment Agreement, CR or CLA.

Salary for calculating severance, service recognition payment and

compensation means the basic salary plus regular fixed allowances including
benefits (e.g. free uniforms).

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 Reason for Termination Manpower Law Entitlement
Provision
Serious mistake (revoked by the 158(3) + 156(4) COMP
Constitutional Court in 2004)
Serious mistake where Employees 158(4) + 156(4) SP AS PER EA,
duty/function does not directly CR OR CLA +
represent Employers interest COMP
(see above)

Criminal action against Employee + 160(7) LSRP + COMP

guilty/6 months inability to work
properly
Minor mistakes, etc. 161(3) SEVE + LSRP +
COMP

Voluntary resignation 162(1) COMP

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Reason for Termination Manpower Law Entitlement
Provision
Voluntary resignation where 162(2) SP AS PER EA, CR OR CLA +
Employees duty/function COMP
does not directly represent
Employers interest
Change of status, ownership, 163(1) SEVE + LSRP + COMP
merger, consolidation, and
Employee terminates

Change of status, merger, 163(2) 2 X SEVE + LSRP + COMP

consolidation and Employer
terminates

Employer closed due to 164(1) SEVE + LSRP + COMP

continuous losses or force
majeure.

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Reason for Termination Manpower Law Entitlement
Provision
Efficiency/redundancy/downsi 164(3) 2 X SEVE + LSRP + COMP
zing (revoked by the
Constitutional Court through
its ruling in 2012)

Employers bankruptcy 165 SEVE + LSRP + COMP

Death of employee 166 2 X SEVE + LSRP + COMP

Retirement age (i.e. 55 years 167 2 X SEVE + LSRP + COMP

old) (if no pension programme
provided)
Employee absent for 5 days 168(3) SP AS PER EA, CR OR
CLA + COMP

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 Reason for Termination Manpower Law Entitlement
Provision
Employers actions guilty 169(2) 2 X SEVE + LSRP +
COMP
Employers actions not guilty 169(3) COMP

Long-term illness of Employee 172 2 X SEVE + 2 X LSRP +

COMP
SEVE = severance payment; CR = company regulations;
EA = employment agreement; COMP = compensation;
SP = separation pay; CLA = collective labor agreement
LSRP = long service recognition payment ;

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B. Fixed term employment and early termination
as well as its potential disputes

Fixed Term Employment

Legal Basis: Law No. 13 of 2003 concerning Manpower & Decision of the
Minister of Manpower Transmigration No. KEP.100/MEN/VI/2004 (Decision No.
100).

Definition of FTC:
Employment agreement between the employee and the employer to establish an
employment relationship for a certain period or for certain work.

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Early Termination and its Potential Disputes
Termination of FTC:

If either party terminates the employment agreement before the end of its term,
the terminating party must provide compensation equal to the employees salary
until the expiry of the FTC.

The causes and procedure for early termination must be provided in the FTC, eg
the types of violations by the employee which will allow the employer to terminate
without providing compensation.

Recommendation:
It is suggested for employers to sign and register a MTA in the event of FTC
termination, unless for termination due to expiry of the FTC term.

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C. Redundancy vs Poor Performance
Constitutional Court Ruling No. 19/PUU-IX/2011 of 13 June 2012

Article 164(3) of the Manpower Law

An Employer may terminate the employment relationship with an Employee
because the Company is closing, not because of losses during 2 (two) successive
years or Force Majeure, but because of the companys action to improve
efficiency, and the Employee is entitled to severance pay equal to 2x (twice) Article
156 (2), a service period recognition payment equal to 1x (once) Article 156 (3)
and compensation in accordance with Article 156, (4).
1. Previously, Article 164(3) was used for redundancy but it is no longer
applicable;
2. The Constitutional Court ruled that the company is being closed down means
permanently closed down.
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3. Therefore, redundancies are only allowed if the employer is being closed down
permanently;

4. In practice, redundancy is still possible if it is regulated in employment

agreement, CR or CLA.

Practical background to redundancy:

a. The declining financial condition of the employer;

b. No more work is available for the employee;

c. The closure or downsizing of certain divisions;

d. The restructuring of the employer.

Employers should not discriminate when terminating employees for redundancy;

decisions on which employees to terminate must be objective.

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Redundancy is prohibited if the employer plans to outsource the work. Redundancy
is only acceptable if there is no longer any suitable position for the employee or no
work is available for the employee for reasons which can be supported.

Redundancy is not a way to terminate employees for poor performance.

In practice, termination for poor performance falls under "minor mistakes". The
assessment of poor performance must be objective, for example, according to the
annual performance review. Before termination, 3 warning letters must be served
and the employee should be moved to another position.

Before terminating for redundancy, the employer must try to improve efficiency.
Termination must be the last resort.

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Efficiency may be achieved through:
a. Reducing the fees and facilities higher-ranked employees such as managers
and directors receive;
b. Reducing shifts;
c. Limiting/eliminating overtime;
d. Reducing working hours and/or days by having employees work alternately
(eg. every other day);
e. Giving workers some days off;
f. Retiring those eligible.

At least two or three of the above will be sufficient. Other documents that need to
be prepared for evidentiary purposes before the manpower Agency and/or the
Court: the audited financial statements for the last 2 years consecutively and a
decision from General Meeting of Shareholders of a company as well as a
decision from board of directors regarding the redundancy plan. 39
 D. Termination due to Retirement Age
If an employee reaches pensionable age, under Article 167 of the Manpower
Law, the employment relationship between him/her and the employer may be
terminated, with the following requirements:

1. If the employer has enrolled the employee in a pension program, the

premiums for which have been paid up by the employer, the employee will
have no right to severance pay or a service period recognition payment, but
is still entitled to compensation.

2. If the pension benefits received under the pension program referred to in 1.

above amount to less than 2x (twice) the severance pay plus 1x (once) the
service period recognition payment and compensation (Severance
Package) otherwise due, the employer must make up the difference.
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3. If the employer has enrolled the employee in a pension program, the
premiums for which are paid by both the employer and the employee, the
amount to be paid as part of the Severance Package is the portion of the
pension for which the premiums have been paid by the employer (i.e. the
accumulation of the premium paid by the employee is not counted).
4. If the employer has not enrolled the retiring employee in a pension program,
the employer must provide the employee the Severance Package.
5. The pension benefit rights referred to in 1., 2. and 3. above do not void the
employees right to old age insurance which is compulsory under the
prevailing laws and regulations.

If a career director is terminated due to retirement age, the severance pay will
be as regulated under Article 167 of the Manpower Law.

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VI. Settlement of Industrial Disputes Law No. 2 of
2004
Reference: Law No. 2 of 2004 concerning Settlement of Industrial Relations
Disputes (Law 2/2004)

A. Types of Labor Disputes under Law 2/2004

1. Disputes over rights

Disputes arising from:

a. failure to fulfill rights due to discrepancies in the implementation or

interpretation of provisions in the prevailing laws and regulations,
employment contract, CRs, or CLAs

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2. Disputes over interests;

Disputes arising in the employment relationship due:

a. non-agreement over preparation, and/or

b. changes to the terms and conditions under the employment contract or

CR or CLA

3. Disputes over termination of employment initiated by either party

4. Disputes amongst labor unions in one company due to disagreement over:

a. membership

b. the implementation of members rights and obligations

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B. Settlement Procedures
1. Bipartite negotiations (Articles 4-7)
Definition: meeting between employer or employer association(s) and
employee or labor union or between labor unions:

a. All industrial relations disputes must be first discussed in bipartite

negotiations

b. These negotiations can be held more than once;

c. Anything agreed or disagreed to be recorded in minutes of the meetings

signed by both parties;

d. 30 working days is the limit for bipartite negotiations;

e. If a settlement is reached, a collective agreement is drawn up and signed;

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f. Once signed, the collective agreement must be registered with the Labor
Court;

g. If either party does not comply with the collective agreement, the other party
can apply to the Labor Court for an order to comply;

h. If no consensus is reached, either party should register the dispute with the
relevant regional manpower office;

i. Either party can choose to settle the dispute through conciliation or arbitration
within 7 working days. Otherwise the relevant regional manpower office will
decide for the dispute to be settled by a mediator.

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2. Mediation (Article 8 -12)
Definition: The settlement of disputes over rights, interest, termination of
employment or between labor unions in one company through an amicable
settlement facilitated by a mediator.

a. Mediation is conducted by the relevant regional manpower office;

b. 30 working days is the limit for mediation;

c. Within 7 working days after receipt of the documents on disputes

settlement, the mediator must examine the case and convene a
mediation meeting

d. If a settlement consensus is reached, then a collective agreement is

drawn up and signed;

e. Once signed, the collective agreement must be registered with the Labor
Court; 46
f. If no consensus is reached, the mediator must issue a recommendation
within 10 working days of the first meeting;

g. The parties should submit their responses (accept or not) within 10 working
days of receipt of the recommendation;

h. A party who does not respond to the recommendation will be deemed to

have rejected the recommendation

i. If both parties accept the recommendation, within working days, the

agreement must be signed and registered with the Labor Court, otherwise
the dispute is submitted to the Labor Court as a petition by either party

j. If either party does not comply with the collective agreement, the other party
can file an application to the Labor Court for an order to do so.

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3. Conciliation (Articles 17-28)
Definition: the settlement of disputes over interests, termination of employment
or amongst labor unions in a company through an amicable settlement
facilitated by a conciliator.

a. Conciliation is conducted by the registered conciliator;

b. The time limit is 30 working days;

c. Within 7 working days of receipt of the dispute documents, a conciliator

must examine the case and convene a meeting;

d. If a consensus is reached, a collective agreement is drawn up and signed;

e. Once signed, the collective agreement must be registered with the Labor
Court;

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f. If no consensus is reached, the conciliator must issue a recommendation
within 10 working days of the first meeting;

g. Both parties should submit their responses (agree or disagree) within 10

working days of receipt of the recommendation

h. If both parties accept the recommendation within 3 working days of

receipt, the collective agreement must be signed and registered with the
Labor Court

i. Otherwise, the dispute should submitted to the Labor Court as a petition

by either party

j. If either party does not comply with the collective agreement, the other
party can apply to the Labor Court for an order to do so.

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4. Arbitration (Articles 29-54)
Definition: settlement of disputes over interests and amongst labor unions in
a company outside the Labor Court under a written agreement among the
disputing parties to submit their disputes to the arbitrators. The arbitration
award is final and binding.

a. The scope of work of arbitrators covers the whole of the Republic of

Indonesia;

b. Arbitrators are appointed by the MOM;

c. The time limit is 30 working days as of the signing the agreement to

appoint an arbitrator;

d. An arbitration agreement should be prepared and signed by the parties;

e. The parties are entitled to choose their arbitrators;

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f. There can be 1 (to be chosen within 3 working days) to 3 arbitrators (to be
chosen within 7 working days);

g. If no consensus is reached on the arbitrators, the chairman of the Labor

Court will appoint one;

h. The arbitrators should prepare an appointment of agreement with the

parties;

i. The arbitrators should start the arbitration within 3 working days as of the
signing of the appointment agreement;

j. If both parties agree, the arbitrators can extend the arbitration once for up to
14 working days;

k. Before the arbitration starts, the arbitrators should try for an amicable
settlement between the parties;

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l. If an amicable settlement is reached, the arbitrators must prepare a
settlement agreement and register it with the Labor Court in the domicile of
the arbitrators;

m. If no amicable settlement is reached, the arbitration should proceed;

n. An arbitration award legally binds both parties and is a final decision;

o. The arbitration award must be registered with the Labor Court;

p. If either party does not comply with the arbitration award, the other party
can apply to the Labor Court in the domicile of the party who must conduct
the award;

q. The court order should be issued within 30 working days of receipt of the
application to the registrar not counting the date of the arbitration award;

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r. Either party may appeal to the supreme court within 30 working days of the
issuance of the arbitration award;

s. The acceptable reasons for an appeal are:

i. Documents submitted during the arbitration process are fake;

ii. An important document was held back by either party by either party;

iii. The arbitration award is issued due to a deception by one of the parties;

iv. The arbitration award is beyond the authority of the arbitrators; or

v. The arbitration award violates the prevailing regulations

t. No later than 30 working days as of the receipt date of the objection, the
Supreme Court must issue its ruling;

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u. Any decision issued by the P4P which is appealed by either or both parties
can be settled by the Supreme Court if the duration for submission of the
decision is within 90 days;

v. Industrial disputes which are ongoing or have been settled through arbitration
cannot be appealed to the Labor Court.

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5. Industrial Disputes Settlement Court (Labour
Court) (Articles 55-80)

Definition: The Labour Court is a special court in the district court, under
the auspices of the Supreme Court. There is a Labour Court in every
regency or municipal district court.

a. The Labour Court is authorized to examine and decide:

i. Disputes over rights at the first stage;

ii. Disputes over interests at the first and final stages;

iii. Disputes over terminations of employment at the first stage;

iv. Disputes amongst labour unions in one company at the first and final
stages;

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b. The procedural law for the Labour Court is the Indonesian Civil Procedural
Law unless otherwise stipulated in this law;

c. Parties having cases that have nominal claims less than Rp.150,000,000
are not imposed any fee;

d. The Labour Court is established in every district court of a regency or city

within every capital city of a province;

e. Any employee who submits a dispute to the Labour Court may apply for an
interlocutory ruling forcing the employer to continue paying the employees
salary until the dispute is settled.

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 Thank you
lia.alizia@makarim.com
candace.limbong@makarim.com

www.makarim.com

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