29 December, 2018
The Indonesian Supreme Court (Mahkamah Agung) held a plenary meeting from November 1 – 3, 2018 in Bandung, in West Java province. The results of this meeting were rendered into Circular of the Supreme Court No. 3 of 2018 dated November 16, 2018 regarding Guidelines for the Role of Indonesian Courts (“SEMA 2018”).
SEMA 2018 set new policies for criminal, civil, religious and military legal proceedings to be applied by all courts in Indonesia.
In the section on Labor Court proceedings, SEMA 2018 sets out the following new policies:
1. Employees' right to payment of wage during the termination process (upah proses)
If a fixed-term employment agreement (perjanjian kerja waktu tertentu or “PKWT”) becomes a permanent employment agreement (perjanjian kerja waktu tidak tertentu or “PKWTT”), the employee shall not be entitled to payment of wage during the termination process in the event of termination of employment (pemutusan hubungan kerja or “PHK”).
2. Industrial relations dispute (perselisihan hubungan industrial or “PHI”) lawsuit claiming on the basis of tort (perbuatan melawan hukum or “PMH”)
An industrial relations dispute lawsuit which bases its claim on tort is not rendered obscure (obscuur libel) as long as the position and merits emphasize the reasons for the industrial relations dispute.
3. Legal action for industrial relations dispute
Decisions of the Industrial Relations Dispute Court in disputes concerning conflicts of interest and labor/employee unions in one company are final and binding. Decisions in disputes concerning rights and termination of employment can be appealed as a final legal resort, in accordance with Articles 56, 57, 109 and 110 of Law No. 2 of 2004 regarding Industrial Relations Disputes. This means there are no judicial reviews (peninjauan kembali) for industrial relations disputes.
Supreme Court guidelines are not part of the Indonesian hierarchy of laws and regulations since the Supreme Court does not write legislation. However, SEMA 2018 certainly indicates the opinion of the Supreme Court that judicial reviews in industrial relations disputes are not allowed, and it is likely that this view will be followed by the Indonesian Labor Court.
For further information, please contact:
Indrawan Dwi Yuriutomo, Soewito Suhardiman Eddymurthy Kardono
indrawanyuriutomo@ssek.com
