B&A News Brief – Annulment of Statute Of Limitations for Employee’s Wage Claim

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On 19 September 2013, the Constitutional Court issued its ruling No. 100/PUU-X/2012 by declaring that Article 96 of Law No. 13 of 2003 regarding Manpower (the “Manpower Law”) is unconstitutional. Article 96 of the Manpower Law essentially provides a two-year timebar for an employee’s wage claim. When this decision is applied, there will be no time limitation for claiming a wage payment. Employees may file a wage claim against the employers long after his/her termination of employment in an indefinite period of time.

Mr. Marten Boiliu, an ex-employee of PT Shandy Putra Makmur, brought the petition. The employee claimed that he has worked from 2002 at PT Shandy Putra Makmur, before the company dismissed him in 2009 without paying any severance entitlement. Moreover, during his employment with the company, the company paid him below the statutory minimum wage.

Later in 2012, the employee claimed the severance entitlement from the company, but was hindered by the two-year timebar as provided by Article 96 of the Manpower Law.

Article 96 of the Manpower Law states that: “Any claim for the payment of the worker/laborer’s wages and all other claims for payments that arise from an employment relation shall expire after 2 (two) years since such right is arose.”

Therefore, the employee decided to file a judicial review petition with the Constitutional Court by arguing that Article 96 of the Manpower Law is contravening with the Constitution, and has hampered his constitutional right to receive his severance entitlement.

The Decision
Eight out of the nine Constitutional Court Justices granted the employee’s petition and declared that Article 96 of the Manpower Law no longer has binding legal force.

In its consideration, the Constitutional Court is of the view that under Article 27 of the Indonesian Constitution, every citizen shall have the right to work and to earn a humane livelihood. These rights can be fulfilled if the citizen receives fair and proper remuneration and treatment in employment relationship, as provided by Article 28D paragraph (2) of the Constitution.

According to the Constitutional Court, wages and all payments arising from the employment relationship is a private right and should not be taken over arbitrarily by anyone or the legislations.

There is a dissenting opinion from a Justice who opined that a two-year timebar is a reasonable period of time and even more than enough time for employees to file wage claims against the employers. The absence of statute of limitation shall cause legal uncertainty for the employer and may impact on the continuity of their businesses.

Highlights
The decision was in favor and benefited the employee, while the employer shall take caution on any wage claim filed by its employee at any time in an indefinite period of time.

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For further information, please contact: lawyers@budidjaja.com.

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