Termination

TERMINATION PROCEDURES

The basic policy of Indonesia Labor Law is that employmen ttermination should be avoided or even prohibited.

Before terminating an employee, the first important step is to hold “bipartite” negotiations to discuss the termination.

Approval / decision from P4D/P4P is needed for terminating a an employee.
To dismiss an employee due to “minor mistakes” should be made only after at least three consecutive warning letters have been given to theemployee over a period of time stated in the Company Regulation / CLA.
The employment agreement with the employee maybe suspended pending the approval from P4D/P4P, but the employee still entitled to be paid in full. The suspension must be in writing.
The labor law provides for compensation entitlements when the employment relationship is terminated.

SEPARATION PAY

The new labor law No. 13 Year 2003, on Manpower Affairs introduces a new termination benefit called: “SEPARATION PAY” to be given to the employee whose employment is terminated due to serious mistakes, such as being absent for 5 consecutives days without giving valid reasons, or resign on his/her request, and whose task and function do not directly represent the employer and the implementation of which shall be regulated in an Employment Agreement, Company Regulations or Collective Labor Agreement. Changes were made to other compensation entitlements.

Note :

Thus when the said worker IS LAID-OFF FOR THE REASON of committing a serious mistake or trough resignation, He/She will not be entitled to severance pay nor service pay, then He/She will not be entitled to the 15% amount either