Labor and Employment Law in Indonesia ‚Legislation and Agencies

Legal Updates
Labor and Employment Law in Indonesia ‚Legislation and Agencies
31 August 2021

Generally, Indonesian employment law is governed by Law No. 13/2003, dated 25 March 2003, regarding labor (the Labor Law), as amended by Law No. 11/2020, dated 2 November 2020, regarding Job Creation (the Job Creation Law). The government has issued government regulations to implement both the Labor Law and the Job Creation Law, namely:

  • Government Regulation No. 35 of 2021, dated 2 February 2021, regarding Fixed-Term Employment Contracts, Outsourcing, Work and Rest Time, and Termination of the Work Relationship; and
  • Government Regulation No. 36 of 2021, dated 2 February 2021, regarding Salary.

The two other main statutes are:

  • Law No. 2/2004, dated 14 January 2004, regarding industrial rela­tions dispute settlement; and
  • Law No. 21/2000, dated 4 August 2000, regarding labor unions.

In addition to the above laws, employers and employees are also subject to company regulations (or work rules) or a collective labor agreement (CLA), if applicable, as well as the express provisions of the employment agreement between the employer and the employee.

Protected employee categories

The Labor Law as amended, as well as the implementing regulations, do not regulate protection from harassment for employees. However, the company regulation or collective labor agreement will normally contain provisions regarding harassment and applicable sanctions.

Indonesian case law also protects workers from harass­ment. However, the Indonesian court system is based on a civil law system and does not follow stare decisis (a legal principle under which judges must respect the precedents established by prior decisions).

In practice, employees wishing to take action against harassment experienced in the workplace can file a claim by civil tort law. The labor laws and regulations are silent on this matter.

Enforcement agencies

The primary government agency for manpower matters in Indonesia is the Ministry of Manpower. The Ministry is supported by regional manpower service offices spread throughout Indonesia to assist on administrative matters, including in disputes where an official from the service office can act as a mediator. Any decisions on dispute settle­ment between employers and employees will ultimately be made at the Labor Court.

For more information, please contact:

Fahrul S. Yusuf, Partner
fahrulyusuf@ssek.com

This first appeared in Lexology GTDT Labor and Employment 2021. You can find the full chapter here.

For more information on Lexology GTDT, go here.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user\'s own risk. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK

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