Employee Resignation According to Department of Labor

Indonesian Labor Law of Manpower aims to protect the employee rights in the workplaces. But as an employee, one has to understand his rights and obligations, listed on the employment contract. The contract is legally binding between the employee and his employer, listing the details about the employment, including the requirements to attain bonus payments such as compensation rights pay, after the contract is over. 

There are four types of payments the employee entitled for after the contract is finished, according to Indonesian Labor Law Act 13, the year 2003 on Manpower: 

1. Severance pay – appreciation money from the employer to the employee, given when there is a termination of employment. 
2. Long service pay – rewards money from the employer to the employee as a reward based on years of service to the company.
3. Compensation rights pay – is gift money from the employer to the employee to pay damages occurred from annual leave that is still valid but not been used, travel costs to the location of the original employee location, medical and nursing facilities if any, housing facilities, and other things regulated on the employment contract.
4. Separation pay – is voluntary award money given by the employer to the employee as a “thank you” gestured for the employee’s service to the employer. 

Each type of the bonus payment is given on certain conditions. There are different calculations and rules for those who resigned by their will and those who are terminated by the employer, or simply ending the term of employment because the contract is finished. When an employee decides to end the contract by resigning himself, he does not entitle to any severance pay or long service pay. 

The resignation has no relation whatsoever to the company interest. Thus, the employee might only entitle for compensation rights pay and separation pay, referring to the Labor Law Act 13, Article 162 (1), (2). The resigned employee might also have to pay for damages incurred as the effect of the contract termination.

The amount of money received as the compensation rights pay is referring to the Labor Law Act 154, Article 4. While the separation pay is calculated based on the agreement made at the beginning of the employment. For these bonus policies can be attained legally, the employee is expected to fulfill several requirements:

- the employee has to submit a written resignation letter at least 30 days before the date of resignation.
- until the effective resignation date, the employee is expected to continue his best performance to complete the working obligations.
- the employee is free of any contract with the employer.- the employer must respond to the employee resignation letter at the latest of 14 (fourteen) days before the employee last date of work.
- in the event of the employer does not respond to the resignation letter within due time, the employer is considered to have accepted and approved the resignation.

Reference: Termination compensation

Due to the law, it is expected for the employee to think carefully and learn about the effect of the resignation before taking any actions. If there are any disputes about the compensation rights pay, the employee can always consult the matter with the law consultant and even bring the issue to the court of law.