What Happens If the Employment Contract Does Not Regulate Severance Pay?


The rights of employees resigning of their own accord is regulated in Article 50 of Government Regulation No 35 of 2021 regarding Temporary Employment Agreement, Outsourcing, Working Hours and Breaks and Termination of Employment Relationships (“GR 35/2021”).

This article regulates that in the case of employees who are resigning of their own accord and who fulfill specific requirements, are entitled to compensation of right pay (uang penggantian hak – “UPH”) and severance pay. The amount of both shall be regulated in the employment agreement, the company regulations (peraturan perusahaan – “PP”), or the collective labor agreement (perjanjian kerja bersama – “PKB”).

However, what if the aforementioned documents, the employment agreement, the PP and the PKB, do not regulate severance pay? Find out in today’s BILLawFact!

Should you have any questions regarding labour law in Indonesia, or if you would like to request legal assistance, you can reach us at [email protected].

Related Posts