Rights of Employees Affected by Layoffs

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Knowing Article 2 and Article 3 of the Indonesian Corruption Law", "Contoh Gugatan Perselisihan Hubungan Kerja", "If I Get Fired, What Are My Rights According to Indonesian Law?" you may read also "Aspek Pidana Tidak Melaksanakan Putusan PHI" and on this occasion we will discuss about 'Rights of Employees Affected by Layoffs'.

Background

'Ruangguru', a digital learning startup or edutech, is taking steps to terminate employment (PHK) for hundreds of employees as of this Friday (18/11/22'). This decision was taken due to the drastically worsening global market situation. "There were hundreds of Ruangguru employees who were affected by this termination of employment," said Ruangguru's Corporate Communications Team to CNNIndonesia.com. The company said that all affected employees have received severance pay, long service pay, and compensation for rights (if there are remaining leave), in accordance with statutory regulations.[1]

Friday evening, November 18 2022, GoTo officials announced the termination of employee relations or layoffs of 1,300 employees in a number of countries. PT. GoTo Gojek Tokopedia has just gathered all of its employees for the CEO Briefing agenda. One of the Tokopedia employees, said that GoTo group officials announced the news of layoffs (PHK) for 1,300 employees which will be carried out today. "The announcement will be made after 6 o'clock, and those who will be laid off will be emailed,". He revealed that he and other employees were not informed of the contents of the discussion in the CEO Briefing when the invitation was sent. However, employees are already guessing about the issue of layoffs. Moreover, many mass media in Indonesia and internationally have reported this information.[2]

Rights of Employees Affected by Layoffs

The governing law that regulates employment termination in Indonesia is Law Number: 13 of 2003 concerning Manpower. What are the rights of workers under Indonesian law when he/she was affected by Layoffs? This article assumes that you work in Indonesian jurisdiction and in an Indonesian company. In the event of termination of employment, based on Article 156 paragraph (1) of Law Number: 13 of 2003 concerning Manpower, the worker is entitled to severance pay, service award, and compensation money.[3]

Severance Pay

Severance pay is the right of the employee affected by the Termination, commonly in the form of money from the company/employer as a result of the Termination of Work. The amount is the same as the basic salary plus other fixed allowances or the same as the salary each month. The amount of severance pay are vary, depending on the employee's tenure. For example, for a period of less than a year, you will get one month's salary, while for a period of one to two years you will get two months of salary, and so on.[4]

Service Award

The long service award is given as a sign of employee loyalty to a company. The condition, you must work at least 3 years in the company. The calculation of the award money is based on Article 156 paragraph (3) of Law Number: 13 of 2003 concerning Manpower. For example, if the service period is three to six years, you will receive an award of two months' wages.[5]

Compensation Money

The compensation for the rights of employees affected by termination of employment is compensation for the rights of workers who have not been taken. The explanation for this compensation is regulated in Article 156 of Law Number: 13 of 2003 concerning Manpower. For example, the cost of annual leave, the cost of returning employees and their families to a new place of work, housing reimbursement and medical treatment are set at 15% of the severance pay and period of service pay.[6] And if you have any legal issue with this topic, contact us then, feel free in 24 hour, we will be happy to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Ruangguru PHK Ratusan Karyawan Mulai Hari Ini", cnnindonesia.com., Diakses pada tanggal 20 November 2022, https://www.cnnindonesia.com/ekonomi/20221118171219-92-875655/ruangguru-phk-ratusan-karyawan-mulai-hari-ini

2. "Terkini Bisnis: Tangis CEO GoTo Saat Umumkan PHK 1.300 Karyawan, RI Dapat Komitmen Investasi 125 T", bisnis.tempo.co., Diakses pada tanggal 20 November 2022, https://bisnis.tempo.co/read/1658395/terkini-bisnis-tangis-ceo-goto-saat-umumkan-phk-1-300-karyawan-ri-dapat-komitmen-investasi-125-t

3. "If I Get Fired, What Are My Rights According to Indonesian Law?", www.hukumindo.com., Diakses pada tanggal 20 November 2022, https://www.hukumindo.com/2021/10/if-i-get-fired-what-are-my-rights.html

4. Ibid.

5. Ibid.

6. Ibid.