Indonesia Employment Update

Employment Terminations in Indonesia Require Court Decision

Indonesia’s Constitutional Court has made a landmark decision amending the Manpower Law. As a result of this decision, under Article 151 paragraph 4, employment termination now requires a legally binding court decision. Additionally, according to Article 157A paragraph 3, employees must continue to work and receive wages until a court decision on their termination is legally binding. These amendments are set to have a significant impact on Indonesia’s labor and employment landscape, both legally and practically. Companies must carefully consider these changes when managing their employees and handling related matters.

Employing Foreign Workers in Indonesia: Legal Compliance

In Indonesia, employers are required to have a foreign worker utilization plan (RPTKA), approved by the Ministry of Manpower (MoM), which serves as a work permit for foreign workers and allows employers to employ foreign workers in specific positions for a certain period. However, an approved RPTKA does not automatically grant the right to employ foreign workers. Previously, employers needed to obtain both an RPTKA and a notification approved and issued by the Minister of Manpower. The notification requirement has now been removed and replaced with a new step: the RPTKA appropriateness assessment. Employing foreign workers without fulfilling these requirements will subject the company to administrative sanctions, including postponement of service, temporary suspension of the work permit application, revocation of notification, or other sanctions under prevailing laws and regulations.

By SSEK, Indonesia, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact indonesia@transatlanticlaw.com

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