Key Labour And Employment Restructuring Considerations Under Indonesian Law

Regulatory Background

• Indonesia does not have a single, standalone, restructuring regulatory regime on employment. In practice, employment-related restructuring issues are generally governed under: (i) Law No. 40 of 2007 on Limited Liability Companies, as amended by Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation, subsequently enacted into law by Law No. 6 of 2023 (“Company Law”); (ii) Law No. 13 of 2003 on Manpower, as amended by Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation, subsequently enacted into law by Law No. 6 of 2023; (iii) Government Regulation No. 35 of 2021 on Fixed-Term Employment Agreements, Outsourcing, Working Hours and Rest Periods, and Termination of Employment (“GR 35/2021”); and (iv) Law No. 2 of 2004 on Settlement of Industrial Relations Disputes as amended by Law No. 1 of 2026 (“Law 2/2004”).