Legal Protection in Terminating Employment for Workers in Bankrupt Companies

Benny Hutahayan

Abstract


Termination of employment (PHK) in the context of corporate bankruptcy in Indonesia poses significant legal and social challenges, exacerbated by inconsistencies between Article 39(1) of the Bankruptcy Law and Article 154A(1)(f) of the Manpower Law, as amended by the Job Creation Law. This study employs a normative-empirical research method, integrating doctrinal analysis with field observations, to examine the adequacy of legal protections for workers affected by bankruptcy-induced PHK. Findings reveal critical gaps in harmonization, particularly the need for a unified notification period and consistent prioritization of workers' rights as preferred creditors. Comparative insights from Germany, France, and Japan underscore the importance of procedural safeguards, compensation mechanisms, and judicial oversight in mitigating bankruptcy's adverse effects on workers. The study recommends legislative revisions to standardize a mandatory 45-day notification period, establish a compensation guarantee fund, and ensure seamless integration between bankruptcy and labor laws. These reforms aim to enhance legal certainty, justice, and efficiency in managing bankruptcy-related employment disputes. The research contributes to the legal discourse by addressing systemic gaps in Indonesia's regulatory framework and proposing reforms aligned with international best practices, ensuring equitable protection for workers while balancing corporate and creditor interests.


Keywords


Termination of Employment, Bankruptcy, Worker Protection, Legal Harmonization.

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DOI: http://dx.doi.org/10.30659/rlj.3.4.651-660

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