HARDSHIP AS DEFENCE FOR NON-PERFORMANCE OF CONTRACTS:
CAN IT BE APPLIED UNDER INDONESIAN LAW?
Dr. Natasya Yunita Sugiastuti, S.H., M.H.
Dr. Anda Setiawati, S.H., M.H.
Ari Wahyudi Hertanto, S.H., M.H.
Agung Wijaya
Ghayana Aditya Putra
Faculty of Law, Universitas Trisakti, Jakarta, Indonesia
Contents FINDINGS AND DISCUSSION CONCLUSION
INTRODUCT
ION
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BACKGROUND TO THE PROBLEM
THE RECENT COVID-19 PANDEMIC GIVEN ITS UNPRECEDENTED IMPACT ON THE GLOBAL ECONOMY, IT HAS LED TO THE REVIVAL OF TWO CLASSIC PRINCIPLES IN CONTRACT LAW: FORCE MAJEURE AND HARDSHIP
THESE PRINCIPLES ARE A LEGAL MECHANISM FOR ADDRESSING THE
IMPACT OF UNFORESEEN EVENTS AND CHANGES IN CIRCUMSTANCES
DURING THE PERFORMANCE OF CONTRACTS
THE ISSUE
UNLIKE THE PRINCIPLE OF FORCE MAJEURE, WHICH IS EXPRESSLY PROVIDED FOR IN THE CIVIL CODE, THE PRINCIPLE OF HARDSHIP HAS NO LEGAL BASIS IN THE INDONESIAN LEGAL SYSTEM
THERE FOR THERE WERE DEBATES AND DILEMMAS RELATED TO THE APPLICATION OF HARDSHIP PRINCIPLES
THE ABSENCE OF A LEGAL BASIS FOR THE HARDSHIP PRINCIPLE IN INDONESIA
INDICATES THAT THERE IS A LEGAL PROBLEM IN THE FORM OF A NORM VOID
IN THE REGULATION OF THE HARDSHIP PRINCIPLE IN CONTRACT LAW IN
INDONESIA
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THE PURPOSE OF RESEARCH
THE PURPOSE OF THIS STUDY IS TO PROVIDE A DESCRIPTION OF
WHERE JUDGES GET THEIR LEGAL FINDINGS TO BE ABLE TO APPLY
THE HARDSHIP PROPOSITION IN CASES OF NON-PERFORMANCE OF
PROMISES IN DOMESTIC CONTRACTS IN INDONESIA.
RESEARCH METHODOLOGY
THIS IS A NORMATIVE LEGAL RESEARCH THAT EMPLOYS THE STATUTE, CONCEPTUAL, AND CASE APPROACHES
THE STUDY UTILIZES SECONDARY DATA IN THE FORM OF PRIMARY AND SECONDARY LEGAL MATERIALS COLLECTED THROUGH DOCUMENT AND LITERATURE STUDY
THE RESEARCH IS DESCRIPTIVE IN NATURE, AND THE ANALYSIS IS CARRIED
OUT QUALITATIVELY USING DEDUCTIVE THINKING METHODS
FINDINGS AND DISCUSSION
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CASE STUDY
TO ANSWER THE RESEARCH PROBLEM, A CASE WAS STUDIED BETWEEN PT DUA CAHAYA ANUGRAH (PLAINTIFF) VS. 34 WORKERS (DEFENDANTS)
(DECISION OF THE DENPASAR DISTRICT COURT No. 20/Pdt.Sus-PHI/2021/PN
Dps, February, 7, 2022)
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THE CASE
PT DUA CAHAYA ANUGRAH (PT DCA) IS THE OWNER OF "W BALI SEMINYAK" BUSINESS ENGAGING IN THE TOURISM SECTOR IN BADUNG-BALI
IN MAY 2020 PT DCA TERMINATED THE EMPLOYMENT OF 100 OF ITS WORKERS. THE DECISION HAD TO BE MADE UNDER COMPELLING CIRCUMSTANCES CONSIDERING THAT PT DCA SUFFERED HUGE LOSSES DUE TO THE COVID- 19
OF THE 100 WORKERS WHO WERE TERMINATED, 66 WORKERS RECEIVED TERMINATION OF EMPLOYMENT AND RECEIVED THEIR RIGHTS IN THE FORM OF COMPENSATION IN ACCORDANCE WITH THE APPLICABLE MANPOWER LAW. BUT THE REMAINING 34 WORKERS OBJECTED TO THE TERMINATION OF EMPLOYMENT
THEREFORE IN ORDER TO REALIZE LEGAL CERTAINTY RELATED TO THE TERMINATION OF EMPLOYMENT OF 34 WORKERS, PT DCA FILED A LAWSUIT WITH THE INDUSTRIAL RELATIONS COURT AT THE DENPASAR DISTRICT COURT
REQUESTING: THAT THE EMPLOYMENT RELATIONSHIP BETWEEN THE PLAINTIFF AND THE DEFENDANTS HAD BEEN TERMINATED DUE TO FORCE MAJEURE WITH ALL ITS LEGAL CONSEQUENCES
IN ITS DECISION, THE COURT STATED THAT THE EMPLOYMENT RELATIONSHIP BETWEEN THE PLAINTIFF AND THE DEFENDANTS HAD BEEN TERMINATED DUE TO RELATIVE FORCE MAJEURE AND USED THE UPICC PROVISIONS ON HARDSHIP IN ITS CONSIDERATION.
INDONESIAN LAW ONLY RECOGNIZES FORCE MAJEURE AS SET FORTH IN ARTICLES 1244 AND 1245 OF THE CIVIL CODE; AT THE SAME TIME, THERE IS NO REGULATION REGARDING HARDSHIP
IN THIS CASE TO ARRIVE AT THE CONSIDERATION THAT HARDSHIP IS THE SAME AS RELATIVE FORCE MAJEURE, THE PANEL OF JUDGES IN THEIR LEGAL CONSIDERATIONS STATED THAT IT WAS NECESSARY TO FIND LEGAL SOURCES OTHER THAN THOSE PROVIDED FOR IN THE CIVIL CODE
FIRST, THE JUDGES FOUND THE LAW IN THE OPINION OF JURISTS
CONSIDERING THE VIEWS OF JURISTS (DOCTRINE), JUDGES HELD THAT THE TERMS RELATIVE FORCE MAJEURE AND HARDSHIP ARE ONE AND THE SAME CIRCUMSTANCE
SECONDLY, THE JUDGES FOUND THE LAW OUTSIDE THE CIVIL CODE
CONCIDERING TO PRESIDENTIAL REGULATION OF THE REPUBLIC OF INDONESIA NO. 59 OF 2008, WHICH CONCERNS THE RATIFICATION OF THE STATUTE OF THE INTERNATIONAL INSTITUTE FOR THE UNIFICATION OF
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THE STANCE OF THE COURT
THE DENPASAR DISTRICT COURT GRANTED THE REQUEST FOR THE TERMINATION OF 34 WORKERS WHO WORKED AT PT DUA CAHAYA ANUGERAH DURING THE COVID 19 PANDEMIC
DUE TO RELATIVE FORCE MAJEURE AND THE VIEW OF UPICC PROVISIONS ON HARDSHIP, THE EMPLOYMENT RELATIONSHIP BETWEEN THE PLAINTIFF AND THE DEFENDANTS HAD BEEN TERMINATED.
DECLARED
THE BASIS FOR CONSIDERATION OF THE PANEL OF JUDGES INCLUDES THE FOLLOWING:
THE FORCE MAJEURE POSTULATED BY THE PLAINTIFF WAS INDEED UNKNOWN AND / OR UNPREDICTABLE BY THE PARTIES AT THE BEGINNING OF SIGNING THE WORK AGREEMENT
THE PANEL OF JUDGES WAS ALSO OF THE VIEW THAT THE CIRCUMSTANCES EXPERIENCED BY THE PLAINTIFF HAD ALSO BEEN EXPERIENCED BY THE GLOBAL BUSINESS COMMUNITY
THE JUDGES ALSO NOTED THAT THE CIRCUMSTANCES EXPERIENCED BY THE PLAINTIFF ARE NOT
UNIQUE AND HAVE BEEN EXPERIENCED BY THE GLOBAL BUSINESS COMMUNITY. THEREFORE, THE
FINANCIAL LOSSES INCURRED BY THE PLAINTIFF ARE VALUABLE AS ESTABLISHED FACTS THAT DO
NOT REQUIRE FURTHER PROOF
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JUDGE CONCIDERATION UNDER THE UPICC
FURTHERMORE, THE PANEL OF JUDGES CONSIDERED THAT FORCE MAJEURE RESULTED IN THE FORM OF AN EMPLOYMENT AGREEMENT, IS NO LONGER WORKABLE AND CANNOT BE IMPLEMENTED
THE PANEL OF JUDGES CONSIDERED THAT THE PAYMENT OF WAGES THAT WERE NOT PAID IN FULL BY THE PLAINTIFF TO THE DEFENDANTS DURING THE COVID 19 PANDEMIC MUST BE ASSESSED AS THE PLAINTIFF’S MAXIMUM AND FINAL EFFORT IN FULFILLING ITS PERFORMANCE SET OUT IN THE EMPLOYMENT AGREEMENT
BASED ON THESE CONSIDERATION THE PANEL OF JUDGES BELIEVES THAT THERE HAS BEEN EVIDENCE OF HARDSHIP OR RELATIVE FORCE MAJEURE CIRCUMSTANCES AS INTENDED IN ARTICLE 6.2.2 UPICC
ACCORDINGLY, THE PANEL OF JUDGES FINDS THAT THE TERMINATION OF THE PLAINTIFF'S EMPLOYMENT WITH THE DEFENDANTS, EFFECTIVE OCTOBER 1, 2020, IS IN ACCORDANCE WITH APPLICABLE LAWS AND REGULATIONS
THE RESEARCHERS ARE OF THE VIEW: THAT THE FINDING OF LAW BY JUDGES THROUGH THE LEGAL SOURCES OTHER THAN THOSE PROVIDED FOR IN OF THE CIVIL CODE, AND APPLIED THE UPICC PRINCIPLE IS APPROPRIATE
THIS VIEW OF THE RESEARCHERS REFERS TO:
1. ARTICLE 5 (1) OF LAW NO. 48 OF 2009 CONCERNING JUDICIAL POWER
THIS ARTICLE PROVIDES THAT JUDICIAL POWER, JUDGES AND CONSTITUTIONAL JUSTICES ARE REQUIRED TO EXPLORE, FOLLOW, AND UNDERSTAND LEGAL VALUES AND THE SENSE OF JUSTICE THAT LIVES IN SOCIETY.
ACCORDING TO H.P. PANGGABEAN, FORMER CHIEF JUSTICE OF THE SUPREME COURT, THIS PROVISION SERVES AS THE LEGAL BASIS FOR REQUIRING JUDGES TO NOT ONLY ESTABLISH FORMAL JUSTICE BUT ALSO TO SERVE AS THE FOUNDATION FOR LEGAL FINDING. THIS INVOLVES JUDGES SEEKING VALUES THAT EXIST IN SOCIETY, NOT SOLELY THROUGH LEGISLATION.
2. ARTICLE 1339 OF THE CIVIL CODE
THIS ARTICLE PROVIDES THAT AGREEMENTS ARE BINDING NOT ONLY FOR MATTERS EXPRESSLY STATED IN THE CONTRACT, BUT ALSO FOR ANYTHING THAT BASED ON THE NATURE OF AGREEMENT IS REQUIRED BY PROPRIETY, CUSTOM OR LAW
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THE RESEARCHERS VIEW
3. ARTICLE 1338 PARAGRAPH (3) OF THE CIVIL CODE
THIS ARTICLE PROVIDES THAT THE AGREEMENT MUST BE PERFORMED IN GOOD FAITH. THE FUNCTION OF GOOD FAITH HERE IS AS CONTROL IN THE EXECUTION OF THE AGREEMENT
ACCORDING TO SUBEKTI, FORMER CHIEF JUSTICE OF THE SUPREME COURT, EXPLAINED THAT BASED ON ARTICLE 1338 PARAGRAPH (3) OF THE CIVIL CODE, JUDGES ARE EMPOWERED TO SUPERVISE THE IMPLEMENTATION OF AN AGREEMENT TO ENSURE THAT IT IS NOT CONTRADICTORY TO PROPRIETY OR JUSTICE.
THIS MEANS THAT JUDGES CAN DEVIATE FROM THE TEXTUAL CONTENT OF THE AGREEMENT WHEN ITS TEXTUAL EXECUTION WOULD BE CONTRARY TO GOOD FAITH
4. INDONESIA HAS RATIFIED THE UNIDROIT STATUTE WITH PRESIDENTIAL REGULATION NO. 59 OF 2008 CONCERNING THE RATIFICATION OF THE STATUTE OF THE INTERNATIONAL INSTITUTE FOR THE UNIFICATION OF PRIVATE LAW
THIS MEANS THAT INDONESIA IS SUBJECT TO THE SUBSTANCE SET OUT IN UNIDROIT AND THE HARDSHIP PRINCIPLE IN THE UPICC CAN APPLY TO CONTRACTS IN INDONESIA
CONCLUSION
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AS A CONCLUSION, HARDSHIP CAN BE USED UNDER INDONESIAN LAW, BASED ON THE FOLLOWING:
MANDATE OF LAW NO. 48 OF 2009 CONCERNING JUDICIAL POWER, AND A SENSE OF JUSTICE THAT LIVES IN SOCIETY;
ARTICLE 1339 OF THE CIVIL CODE, WHICH PROVIDES THAT AGREEMENTS ARE BINDING NOT ONLY IN VIEW OF MATTERS EXPRESSLY SPECIFIED IN THEM;
ARTICLE 1338 PARAGRAPH (3) OF THE CIVIL CODE, PROVIDES THAT AGREEMENTS MUST BE IMPLEMENTED IN GOOD FAITH;
THE LEGAL DOCTRINE OF THE BROAD DEFINITION OF FORCE MAJEURE;
PROVISIONS OF UNIDROIT PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS (UPICC) BY
VIRTUE OF REGULATION OF THE PRESIDENT OF THE REPUBLIC OF INDONESIA NO. 59 YEAR 2008
CONCERNING RATIFICATION OF UPICC.