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On 3 September 2025, the Indonesian Constitutional Court issued Constitutional Court Decision No. 132/PUU-XXIII/2025 (herein, referred to as the “Decision”), which has effectively increased the time limit for an employee to challenge his/her termination to the Industrial Relations Court (“IRC”).
Under Article 82 of Law No. 2 of 2004 on Settlement of Industrial Relations Disputes (“Industrial Relations Law”), an employee had not more than one year after the date of the termination notice to file a lawsuit to IRC against his/her employer's decision to terminate the employment. Article 82 of the Industrial Relations Law has been considered controversial, since in practice, the one-year time limit has become an issue as the disputed parties cannot immediately submit their dispute to IRC. They must first exhaust the mandatory pre-litigation process.
For the context, employment-related including termination disputes are subject to a tiered resolution process. Parties must first attempt bipartite negotiation. If unresolved, the dispute proceeds to tripartite mediation or conciliation at the local manpower office. After these steps, a case can be brought before IRC, the specialized court for employment disputes. Practically, these bipartite and tripartite mediation processes usually take months to complete. Consequently, the employees may lose their right to file a lawsuit to IRC due to administrative and negotiation processes.
General Overview of the New Decision
Under the new Decision, the Constitutional Court rules the interpretation of the one-year limitation period shall be calculated from the date on which the mediation or conciliation fail to reach an agreement, not from the date the termination notice was received.
We note that the ruling provides certainty for the employees that their right to challenge the termination is not lost due to a lengthy bipartite or mediation process. Moreover, the Decision defines the starting point for calculating the period is the date when the mediation or conciliation process is declared unsuccessful. In other words, if one year after the failure of mediation or conciliation has passed, the right to file a claim to IRC will expire.
Implications for Employers and Employees
In light of this Decision, the employers and employees involved in a termination dispute (together with the officer of the Local Manpower Office) should record the exact date on which the mediation or conciliation ends without agreement. This could be made in the form of a written statement or minutes of a meeting confirming that no settlement is reached on that date. This statement should be signed by all parties. Therefore, the statement will become the evidence of the valid timeline for any subsequent claim to IRC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
