Pursuant to the prevailing laws and regulations, Employee resignation must be preceded by a 30 (thirty) days notice of such resignation. What happens if the Employee does not file the notice or resigns on the spot? Learn more about it in our article.
Pursuant to Law No. 13 Year 2003 concerning Manpower (“Manpower Law”) and the Ministry of Manpower and Transmigration Ministerial Decree No. Kep-111/Men/2001 dated May 31, 2001 concerning the Amendment of Article 35a Minister of Manpower and Transmigration Ministerial Decree No. Kep-78/Men/2001 concerning the Amendment of some Articles of the Minister of Manpower Ministerial Decree No. Kep-150/Men/2000 regarding Settlement of Work Dismissal and Determination of Severance Money, Money Gratuity And Indemnity in the Company (“Ministerial Decree Kep-78/Men/2001”), the resignation procedure of an Employee is as follows:
- The Employee submits a resignation letter along with the reason of resignation, not later than 30 (thirty) days prior to the date of resignation;
- The Employee continues to perform their obligations until the date of resignation;
- The Employee is no longer bound in an Employment relationship with the Employer;
- At the latest of 14 (fourteen) days prior to the date of resignation (the last date of work), the Employer must respond to the resignation letter;
- In the event that the Employer does not respond to the resignation within due time, the Employer is deemed to have accepted and approved of the resignation.
Therefore, based on the provisions above, all resignations of the Employee in the Company must fulfill the 30 (thirty) days’ notice requirement.
RESIGNATION WITHOUT 30 DAYS NOTICE
In the event an Employee resigns without fulfilling the 30 (thirty) days notice requirement, the Ministerial Decree Kep-78/Men/2001 does not stipulate any provisions on that matter. Therefore, in this case, we need to see the Company Regulations, Collective Labor Agreement, or Labor Agreement which regulates the rules of resignation. In practice, most Company have stated in their Company Regulations concerning Employee resignation without the 30 Days Notice. Basically, this resignation can be done, however, it has consequences which impacts the rights of the Employee to receive compensation. If the employee resigns without the filing the mandatory 30 Days Notice, they will not receive compensation and severance pay.
Therefore, the concern in the case of resignation without the one month notice is related to the compensation to be received by the Employee. This is in accordance with the provisions of Article 162 of Manpower Law, where resigning Employees must submit resignation letter no later than 30 Days prior to the date of resignation, or known as the “One Month Notice”. Furthermore, when the One Month Notice requirement is not fulfilled, the resigning Employees will not receive any compensation and/or severance pay.
The One Month Notice requirement is purposed to give the Company time to find the Employee replacement, especially for Employees of higher positions which may require the Company some time to find adequate substitute. That is why it is mandatory in the Manpower Law, and the breach of the provision will result in the Employee losing his/her rights of compensation and/or severance pay.
However, this does not eliminate the effort and time that the Company will waste finding the Employee replacement, especially if the resignation is abruptly filed. Therefore, some Companies stipulate penalties in practice in the form of fines or compensation, to the resigning Employees.
HOW CAN SMART CONSULTING HELP YOU?
To ensure a smooth investment and business operation from the legal perspective, but also still focus on maintaining your business in Indonesia and reach your revenue target, it is advised for you to find capable and trusted lawyers or legal consultants for advice and assistance in ensuring your legal compliance with prevailing laws and regulations.
SMART Consulting is an Indonesian Corporate Legal Services firm. SMART has assisted Clients in dealing with matters related to Manpower Law, such as drafting, reviewing and registering the Employee Toolkit, including Employment Agreement, Collective Labor Agreement, and Company Regulations. We also provide advisory services regarding Employment matters, as well as assistance in conducting termination of employment and manpower dispute resolutions.
Contact Us Now to get your legal solution for your business goals, and still comply with the prevailing laws and regulations.