Employment in Indonesia: Employees take priority

Decisions by Indonesia's Constitutional Court demonstrate that Indonesian law seeks to protect employees.

Article 28D(1) of the 1945 Constitution states "every person has the right to recognition, guarantees, protection, certainty and equal treatment before the law". Additionally, Article 28D(2) provides that "every person has the right to work and to receive fair and proper remuneration and treatment in employment".

The Constitutional Court has adopted a broad interpretation of these provisions in a variety of cases, with outcomes that would be surprising in other jurisdictions.

EMPLOYEES TAKE PRIORITY OVER SECURED CREDITORS

On 11 September 2014, the Constitutional Court decided that employee wages take priority during an employer's bankruptcy or liquidation, even over secured creditors.