Termination For Serious Misconduct: Enforcement And Recent Developments In Indonesia

Richard Cornwallis and Lia Alizia of Makarim & Taira S. look at some of the important recent developments in relation to termination of employment for serious misconduct in Indonesia.

1. Introduction

   It has been over 4 years since the Constitutional Court's ruling on 26 October 2004 which declared that Article 158 and other relevant articles of the Manpower Law in relation to serious misconduct were against the Indonesia Constitution and therefore were not legally binding. The legal effect of the ruling was that an employer cannot immediately terminate an employee for serious misconduct. Instead an employer must report the act to the police and then follow the criminal proceedings under the Indonesian Criminal Procedure Law. Only upon receiving a criminal judgment of the district court that the employee is guilty (and if the decision is not appealed by the employee) can the employer terminate the employee.