DECREE OF THE MINISTER OF MANPOWER AND TRANSMIGRATION NO. KEP-78/MEN/2001 DATED MAY 4, 2001
THE AMENDMENT TO SEVERAL ARTICLES OF THE DECREE OF THE MINISTER OF MANPOWER NO. KEP-150/MEN/2000
ON THESETTLEMENT OF LABOUR DISMISSAL AND THE STIPULATION OFSEVERANCE PAY, GRATUITY AND
COMPENSATIONS IN COMPANIES
THE MINISTER OF MANPOWER AND TRANSMIGRATION,
Considering :
a. that since several Articles in the Decree of the Minister of Manpower No. KEP-150/MEN/2000 on the settlement of labour dismissal and the stipulation of severance pay, gratuity and compensations in companies need improvement in the implementation, several articles of the Decree of the Minister of Manpower No. KEP-150/MEN/2000 need to be amended;
b. that based on the consideration as meant in letter a, it is necessary to stipulate a decree of the Minister of Manpower and Transmigration.
In view of :
1. Law No. 22/1957 on the settlement of labour disputes (Statute Book of 1957 No. 42, Supplement to Statute Book No. 1227);
2. Law No. 12/1964 on the dismissal of labour in private companies (Statute Book of 1964 No. 93, Supplement to Statute Book No. 2686);
3. Presidential Decree No. 234/M/2000;
4. Decree of the Minister of Manpower No. KEP-150/MEN/2000 on the settlement of labour dismissal and the stipulation of severance, gratuity and compensations in companies;
Observing :
Result of the Plenary Cabinet Meeting held on January 25, 2001.
D E C I D E S :
To stipulate :
THE DECREE OF THE MINISTER OF MANPOWER AND TRANSMIGRATION ON THE AMENDMENT TO SEVERAL ARTICLES OF THE DECREE OF THE MINISTER OF MANPOWER NO. KEP-150/MEN/2000 ON THE SETTLEMENT OF LABOUR DISMISSAL AND THE STIPULATION OF SEVERANCE PAY, GRATUITY AND COMPENSATIONS IN COMPANIES.
Article I
Several provisions in the Decree of the Minister of Manpower No. KEP-150/MEN/2000 on the settlement of labour dismissal and the stipulation of severance pay, gratuity and compensations in companies shall be amended as follows :
changed into "institution responsible in the manpower field", term "region Office of the Ministry of Manpower" is changed into "Office of the institution responsible in the provincial manpower field", term "Office of the Ministry of Manpower" is changed into "Office of the institution responsible for the manpower field in regency/city" and term "collective labour agreement" is changed into "collective labour commitment".
2. The provision in Article 1 after being improved fully reads as follows :
"Article 1
Hereinafter referred to as :
1. Companies shall be :
a. all forms of business which employ workers/labour with or without the profit motive; or
b. social and other businesses which are not in corporate form but they have managing executives and employ other people with payment of wages, except social businesses whose financing dependent on subsidies of other parties and social agencies owned by diplomatic institutions.
2. Employers shall be :
a. individuals, partnerships or legal entities running companies of their own; b. individuals, partnerships or legal entities running companies of other parties;
c. individuals, partnerships or legal entities in Indonesia representing the companies as meant in letters a and b which are domiciled outside the territory of Indonesia
3. Workers/labour shall be those work with employers by receiving wages.
4. Labour dismissal shall be the termination of working relations between employers and workers/labour on the basis of permits issued by regional committees or the central committee.
5. Mass labour dismissal shall be dismissal of 10 (ten) workers/labour or more in a company in one month or the occurrence of a series of termination of working relations which can reflect the intention of an employer to effect large-scale labour dismissal.
6. Severance pay shall be payments in money form from employers to workers/labour as a consequence of labour dismissal.
7. Gratuity shall be sums of service money as meant in Law No. 12/1964 as employers' appreciation of workers based on working periods.
8. Compensations shall be payments in money form from employers to workers/labour to offset annual leave, long leave, travel expenses to return home where workers/labour are accepted to work, medical facilities, housing facilities etc. as determined by regional committees or the central committee as a consequence of labour dismissal.
9. Fixed allowances shall be rewards received by workers/labour in fixed sums and on a regular basis regardless of the presence or extent of certain a achievement of work.
10. Mediators shall those as meant in Article 1 paragraph (1) letter e of Law No. 22/1957 on the settlement of labour disputes.
12. The Central Committee shall be the central labour arbitration committee as meant in Article 1 paragraph (1) letter g of Law No. 22/1957 on the settlement of labour disputes.
13. The Minister shall be the minister responsible in the manpower field."
3. The provision in Article 15 is amended and supplemented by a new provision which becomes paragraph (3) so as to entirely read as follows :
"Article 15
(1) In the case of workers/labour being absent from working for 5 (five) days at a stretch and being already summoned by employers twice in writing, but the workers/labour fail to give written reasons along with legitimate evidences, the workers/labour shall be considered to resign improperly and employers can process labour dismissal.
(2) In the case of the workers/labour as meant in paragraph (1) being absent because of staging labour strikes in accordance with laws in force, the workers/labour can not be declared absent.
(3) In the case of the workers/labour as meant in paragraph (1) being absent because of staging labour strikes which are not in accordance with laws in force, the workers/labour shall be declared absent."
4. The provision in Article 16 is amended so as to entirely read as follows :
(1) Before regional committees or the central committee issue labour dismissal permits, employers can suspend workers/labour from their jobs in accordance with the provision on suspension from jobs already stipulated in working contracts or corporate rules or collective labour commitments.
(2) In the case of employers adopting the suspension as meant in paragraph (1), the employers shall pay wages at the minimum as high 75% (seventy five percent) of the wages received by workers/labour during the suspension period.
(3) The suspension as meant in paragraph (1) shall be executed in writing and delivered to the relevant workers/labour with clear reasons and the workers/labour are given opportunity to defend themselves.
(4) The granting period of wages in the suspension period as meant in paragraph (1) shall be 6 (six) months at the maximum.
(5) After the suspension period as meant in paragraph (3) ends, employers shall not be obliged to pay wages unless otherwise stipulated by regional committees or the central committee."
5. A new article is inserted between Article 17 and Article 18 to become Article 17A, which entirely reads as follows :
"Article 17A
(1) In the case of employers submitting applications for the labour dismissal permits as meant in Article 2 paragraph (1), but they do not apply the suspension as meant in Article 16 paragraph (1), workers/labour shall continue to execute their jobs and employers pay wages of workers/labour as high as 100% (one hundred percent) as long as regional committees or the central committee do/does not yet issue the labour dismissal permits.
as regional committees or the central committee make/makes no any decision, wages of workers/labour which must be paid during the process shall be 100% (one hundred percent).
6. The provision in Article 18 is improved to become 5 (five) articles so that the article entirely reads as follows :
"Article 18
(1) Labour dismissal permits can be granted because workers/labour commit the following serious wrongdoings :
a. deception, stealing and embezzlement of goods/money, property of employers or fellow workers or friends of employers; or
b. providing false or falsified information thus inflicting losses on employers or interests of the state; or c. being drunken, drinking liquors which cause drunkenness, smoking opium, consuming narcotics or abusing prohibited drugs or other stimulants, which on the basis of laws in force, are banned from being used in working places and places stipulated by the companies; or committing immoral deeds or gambling in working places; or
d. attacking, intimidating or deceiving employers or fellow workers and tradining prohibited goods within and outside companies; or
e. torturing, threatening physically or mentally, insulting rudely employers or families or employers or fellow workers; or
f. persuading employers or fellow workers to commit acts contravening laws or morality as well as provisions of laws in force; or
g. damaging carelessly or intentionally, inflicting losses on or letting property of employers be in dangerous condition; or
h. damaging carelessly or intentionally or letting themselves or fellow workers be in a dangerous condition; or
i. disclosing or leaking corporate secrets or defaming companies and/or families of employers which should be kept in secrecy, except for interests of the state; or
j. other matters stipulated in working contracts or corporate rules or collective labour commitments.
(2) Employers in terminating working relations with workers/labour for the reasons as meant in paragraph (1) shall accompany supply evidences in applications for labour dismissal permits.
(3) Workers/labour committing the wrongdoings as meant in paragraph (1) can be suspended before regional committees or the central committee issue labour dismissal permits with the provision that the suspension is already stipulated in working contracts or corporate rules or collective labour commitments.
(4) Workers/labour dismissed for the wrongdoings as meant in paragraph (1) shall not be entitled to severance pay as meant in Article 22 and gratuity as meant in Article 23, but they are entitled to compensations as meant in Article 26B.
(5) Workers/labour committing mistakes other than those mentioned in paragraph (1) shall be liable to labour dismissal by receiving severance pay as meant in Article 22, gratuity as meant in Article 23 and compensation as meant in Article 24."
7. The provision in Article 26 is amended and supplemented to become four paragraphs so that it entirely reads as follows :
(1) In the case of labour dismissal occurring because workers/labour resign properly on the basis of their own intention, the workers/labour shall be entitled to compensations as meant in Article 26B.
(2) The proper resignation as meant in paragraph (1) shall fulfill the following conditions :
a. workers/labour submit applications for resignation in writing along with reasons in not later than 30 (thirty) days before the date of commencement of resignation;
b. workers/labour continue to fulfill their obligations up to the date of commencement of resignation;
(3) Employers shall give answers to the applications as meant in paragraph (2) letter a in not later than 14 (fourteen) days before the date of commencement of resignation.
(4) In the case of employers failing to give answer in the period as meant in paragraph (3), the employers shall be considered to accept the proper resignation."
8. Two new articles are inserted between Article 26 and Article 27 to become Article 26A and Article 26B which read as follows :
"Article 26A
(1) Employers and workers/labour unions can limit the number of workers/labour that can resign properly in a certain period in the same working unit in companies.
(2) In the case of workers/labour unions being not yet established in companies, the limitation as meant in paragraph (1) shall be determined by employers and representatives of workers labour."
"Article 26B
The compensation as meant in Article 18 paragraph (4) and Article 26 paragraph (1) shall include : a. compensations for annual leave not yet taken or aborted;
b. compensations for long leave in the case of the provision on long leave applying in companies workers/labour not yet taking the leave in accordance with the ratio of working periods of workers/labour to the working period stipulated eligible to take long leave;
c. costs or expenses of workers/labour and their families to return home where workers/labour are accepted to work;
d. compensations for housing, medical treatment and maintenance is set at 15% (fifteen percent) of the wages for :
1. one month, in the case of workers/labour having the working period of less than one year;
2. 2 (two) months, in the case of workers/labour having the working period of one year or more but less than 2 (two) years;
3. 3 (three) months, in the case of workers/labour having the working period of 2 (two) years or more but less than 3 (three) years;
4. 6 (six) months, in the case of workers/labour having the working period of 3 (three) years but less than 4 (four) years;
5. 7 (seven) months, in the case of workers/labour having the working period of 4 (four) years but less than 5 (five) years;
6. 8 (eight) months, in the case of workers/labour having the working period of 5 (five) years but less than 6 (six) years;
7. 10 (ten) months, in the case of workers/labour having the working period of 6 (six) years but less than 9 (nine) years;
8. 11 (eleven) months, in the case of workers/labour having the working period of 9 (nine) years but less than 12 (twelve) years;
10. 13 (thirteen) months, in the case of workers/labour having the working period of 15 (fifteen) years but less than 18 (eighteen) years;
11. 14 (fourteen) months, in the case of workers/labour having the working period of 18 (eighteen) years but less than 21 (twenty one) years;
12. 15 (fifteen) months, in the case of workers/labour having the working period of 21 (twenty one) years but less than 24 (twenty four) years;
13. 17 (seventeen) months, in the case of workers/labour having the working period of 24 (twenty four) years or more.
e. other matters stipulated by regional committees or the central committee."
9. The provision in Article 27 is amended so as to read as follows :
"Article 27
(1) In the case of individual labour dismissal occurring not due to mistakes of workers/labour, but the workers/labour can accept the dismissal, the workers/labour shall be entitled to severance pay at least twice the amounts in Article 22, gratuity as much as the amounts in Article 23 and compensations as much as the amounts in Article 24, unless otherwise stipulated by agreements of both parties.
(2) In the case of mass labour dismissal occurring because the companies are closed due to continuous losses which are accompanied by financial statements already audited by public accountants for the last two years at the minimum, or due to force majeure, the workers/labour shall be entitled to severance pay as much as the amounts in Article 22, gratuity as much as the amounts in Article 23 and compensation as much as the amounts in Article 24, unless otherwise stipulated by agreements of both parties.
(3) In the case of mass labour dismissal occurring because the companies are closed for reasons other than those mentioned in paragraph (2), or the execution of corporate efficiency, the workers/labour shall be entitled to severance pay twice the amounts in Article 22, gratuity as much as the amounts in Article 23 and compensation as much as the amounts in Article 24, unless otherwise stipulated by agreements of both parties."
10. The provision in Article 28 is amended so as to entirely read as follows :
"Article 28
(1) In the case of the occurrence of labour dismissal due to changes in status or ownership of companies or the move of locations of companies with the value of new working requirements being the same as that of the previous working requirements and the workers/labour being not ready to continue working relations, the workers/labour shall be entitled to severance pay as much as the amounts in Article 22, gratuity as much as the amounts in Article 23 and compensation as much as the amounts in Article 24.
(2) In the case of the occurrence of labour dismissal due to changes in status or ownership of companies or the move of locations of companies employers being not ready to accept workers/labour for whatever reasons, the workers/labour shall be entitled to severance pay twice the amounts in Article 22, gratuity as much as the amounts in Article 23 and compensation as much as the amounts in Article 24, unless otherwise stipulated by agreements of both parties.
(3) The obligation to pay severance pay, gratuity and compensations as meant in paragraphs (1) and (2) shall be charged to new employers, unless otherwise agreed by old and new employers."
"Article 31
(1) In the case of working relations with workers/labour being terminated because their ages have reached the mandatory age of retirement as meant in Article 2 paragraph (2) letter c, and employers already involving workers/labour in pension programs, the workers/labour shall not be entitled to severance pay as meant in Article 22, gratuity in Article 23 and compensations as meant in Article 24 letter d, unless otherwise stipulated in working contracts, corporate rules or collective labour commitments.
(2) In the case of amounts of pension insurance or benefit in the pension programs as meant in paragraph (1) turning out to be smaller than twice amounts of severance pay as meant in Article 22 and the amounts of gratuity in Article 23 and the amount of compensations in Article 24 letter d, the differences shall be paid by employers.
(3) In the case of employers not involving workers/labour who are dismissed because of the mandatory age of retirement in the pension programs, employers shall give the workers/labour severance pay twice amounts in Article 22, gratuity as much as the amounts in Article 23 and compensation as much as the amounts in Article 24."
12. The provision in Article 32 is amended so as to entirely read as follows :
"Article 32
In the case of working relations with workers/labour being terminated because of the death as meant in Article 2 paragraph (2) letter c, employers shall pay compensations to legitimate heirs of workers/labour, severance pay twice the amounts in Article 22, gratuity as much as the amounts in Article 23 and compensation as much as the amounts in Article 24."
13. A new article is inserted between Article 32 and Article 33 to become Article 32A which entirely reads as follows :
"Article 32A
(1) In the case of workers/labour being dismissed but they have reached the mandatory ages of retirement and the workers/labour have been involved in pension programs and have been entitled to pension insurance or benefits, the workers/labour shall not be entitled to gratuity as meant in Article 18 paragraph (5), Article 20 paragraph (2), Article 27, Article 28 paragraphs (1) and (2) and Article 32.
(2) In the case of amounts of pension insurance or benefit in the pension programs as meant in paragraph (1) turning out to be smaller than the amounts of gratuity as meant in Article 23, the differences shall be paid by employers.
(3) In the case of the workers/labour being dismissed as meant in paragraph (1), the calculation of compensations stipulated in Article 24 letter d shall only be multiplied with the severance pay as meant in Article 22."
14. A new article is inserted between Article 34 and Article 35 to become Article 34A which reads as follows :
"Article 34A
of this decree, the central committee in settling the appeal shall continue to use the Decree of the Minister of Manpower No. KEP-150/MEN/2000 as the basis for its decision.
(2) In the case of every decision of central committee being already based on the provisions in the Decree of the Minister of Manpower No. KEP-150/MEN/2000 and the Minister of Manpower and Transmigration later review or postpone the enforcement of the decision, in regulating consequences of the annulment or postponement of enforcement of the decision, the Minister shall continue to use the Decree of the Minister of Manpower No. KEP-150/MEN/2000 as the basis for its decision."
15. A new article is inserted between Article 35 and Article 36 to become Article 35A which reads as follows :
"Article 35A
In the case of working contracts or corporate rules or collective labour commitments stipulating the granting of severance pay, gratuity and compensations on the basis of the Decree of the Minister of Manpower No. KEP-150/MEN/2000, the stipulation of severance pay, gratuity and compensations shall be automatically based on this decree as from the date of enforcement of this decree."
Article II
This decree shall come into force as from the date of stipulation.
Stipulated in Jakarta On May 4, 2001
THE MINISTER OF MANPOWER AND TRANSMIGRATION sgd.
ALHILAL HAMDI
Article II
This decree of the Minister shall come into force as from the date of stipulation.
Stipulated in Jakarta On May 4, 2001
