Law No. 13 of 2003 on Manpower is a major piece of legislation controlling work relationships in Indonesia. The laws governing the beginning of an employment relationship, the terms and conditions of employment, and the termination of employment are all outlined in this law.
Another law affecting worker rights in Indonesia is Law No. 2 of 2004 on industrial relations dispute settlement. All labor laws are accompanied by rules produced by the Minister of Manpower or other government authorities.
It should also be noted that the provision stated in Article 158 of Law No. 13/2003 on termination was declared to be no longer in force according to a decision of the Constitutional Court of Indonesia. This is the case because this provision violates Article 27(1) of the 1945 Indonesian constitution.
Under Circular Letter of Manpower Minister No. SE.13/MEN/SJ-HK/I/2005, which is still in effect, the termination of an employment agreement on the ground of the employee’s grave wrongdoing or major fault, can be carried out if a final and binding verdict to that effect has been obtained from a criminal court judge.