Laid off or pushed to resign: first steps

News of a layoff, or conversations that slowly drift towards “maybe you should just resign”, fill your head. The good news: you do not have to decide anything today. This guide covers the first steps, the entitlements people usually talk about, and the dispute route under the rules that apply right now.

Day one: three things

1. Do not sign on the spot

A resignation letter, a “mutual agreement”, or a statement accepting a payout: ask for time to read it and take a copy home. Resigning and being laid off have different consequences:

• Resigning voluntarily requires a written request at least 30 days before the start date, no service-bond obligation, and continuing to work until that date (PP 35/2021 Art. 36(i)).
• Your entitlement is only the replacement-of-rights payment (uang penggantian hak) and a separation payment (uang pisah) whose size is set in your contract or company regulation. There is no severance (uang pesangon) (PP 35/2021 Art. 50).
• The cash benefit of Job Loss Insurance (JKP) is not paid to participants who resign (PP 6/2025 Art. 20(1)).

So if you feel pushed to resign, keep the evidence first (step 3) and do not rush.

2. Ask for the intent and reasons in writing

If termination cannot be avoided, the employer must tell the worker its intent and reasons (Law 6/2023 Art. 151(2)). Notice must be a letter, validly and properly delivered at least 14 working days before termination, or 7 working days if termination happens during probation (PP 35/2021 Art. 37(3) and (4)).

Notice is not required if you resign, if a fixed-term (PKWT) contract ends on schedule, if you reach retirement age, or if you pass away (Law 6/2023 Art. 151A).

3. Keep evidence

Collect and keep copies of what is genuinely yours:

• your contract and every addendum, payslips, salary transfer records;
• letters, emails or chats about the layoff or the request to resign (full screenshots with dates);
• warning letters, performance reviews, meeting notes;
• records of your working hours and overtime;
• your BPJS cards and data.

Do not copy source code, customer data or confidential company documents. That can create new problems for you. If you are unsure what you may keep, ask a legal adviser first.

Accepting or rejecting the layoff

• If you reject it: write a rejection letter with your reasons within 7 working days of receiving the notice (PP 35/2021 Art. 39(1)). The matter is then handled through bipartite negotiation (see the dispute route below).
• If you do not reject it: the employer must report the termination to the manpower ministry or office (PP 35/2021 Art. 38). Ask for the receipt of that report. It is also the proof of termination for a JKP claim (PP 6/2025 Art. 20(3)).

Some grounds for termination are prohibited, including illness certified by a doctor for no more than 12 months, marriage, pregnancy, childbirth, miscarriage or breastfeeding, practising your religion, or differences in religion, ethnicity, sex, physical condition or marital status. A termination on a prohibited ground is void by law and the worker must be reinstated (Law 6/2023 Art. 153).

Entitlements usually calculated (overview)

When a layoff happens, the employer must pay severance (uang pesangon) and/or a long-service payment (uang penghargaan masa kerja), plus the replacement-of-rights payment (Law 6/2023 Art. 156). The wage base is basic wage plus fixed allowances (Law 6/2023 Art. 157).

Severance (months of wages, by length of service):

Long-service payment:

Replacement of rights covers annual leave not yet taken and not yet lapsed, travel costs home for the worker and family to the place where they were hired, and anything else set in the contract, company regulation or collective agreement (Law 6/2023 Art. 156(4)).

Two things people often miss:

• The multiplier depends on the reason for termination. The table is the baseline. For example, for efficiency because the company is losing money, PP 35/2021 Art. 43(1) gives 0.5 times severance and 1 times long-service payment; for efficiency to prevent a loss, 1 times severance (Art. 43(2)). Other reasons are in Arts. 41 to 57. Constitutional Court Decision 168/PUU-XXI/2023 reads the severance figures in Art. 156(2) as a “minimum”.
• THR. A permanent (PKWTT) worker whose employment ends from 30 days before their religious holiday is entitled to that year’s THR (Manpower Minister Regulation 6/2016 Art. 7(1)).

Work out your own numbers and compare them with the company’s offer. If the gap is large, ask for the calculation in writing.

Dispute route when there is no agreement

1. Bipartite negotiation. Direct talks between you and the company, mandatory first and to be completed within 30 working days of starting (Law 2/2004 Art. 3). Minutes are kept and signed by both sides (Art. 6). If you agree, a Joint Agreement is drawn up and registered with the Industrial Relations Court (Art. 7). Constitutional Court Decision 168/PUU-XXI/2023 stresses that bipartite talks are held through deliberation to reach consensus.
2. Registration and mediation. If bipartite talks fail, either side registers the dispute with the local district or city manpower office, attaching proof of the bipartite attempt (Law 2/2004 Art. 4(1)). The parties are offered conciliation or arbitration; if they do not choose within 7 working days, the case goes to a mediator (Art. 4(3) and (4)), who must finish within 30 working days (Art. 15).
3. Industrial Relations Court (PHI). If mediation fails, either side can sue at the PHI (Art. 5), attaching the mediation or conciliation record (Art. 83). Parties pay no court costs for claims worth less than Rp150,000,000 (Art. 58).

While a dispute is ongoing, employer and worker keep performing their obligations. The employer may suspend a worker who is in a termination process, but must keep paying wages and the other usual entitlements (Law 6/2023 Art. 157A). Under Constitutional Court Decision 168/PUU-XXI/2023, that duty lasts until a legally final settlement process ends, and if bipartite talks reach no agreement, termination can only happen after a legally final ruling from the dispute-settlement institution.

After a layoff: Job Loss Insurance (JKP)

If you are registered with BPJS Ketenagakerjaan, JKP can help while you look for a new job. In short, under PP 37/2021 as amended by PP 6/2025:

• Benefits: cash, labour-market information, and job training (PP 37/2021 Art. 18).
• Cash: 60% of wages, monthly, for up to 6 months. The wage used is the last wage the employer reported to BPJS Ketenagakerjaan, capped at Rp5,000,000 (PP 6/2025 Art. 21). That means at most Rp3,000,000 a month.
• Conditions: at least 12 months of contributions within the 24 calendar months before termination, and willingness to work again (PP 6/2025 Art. 19).
• The right is lost if you do not claim within 6 months of termination, or if you have found work (PP 6/2025 Art. 40).
• For fixed-term (PKWT) workers, JKP is paid if the employer terminates before the contract term ends (PP 6/2025 Art. 20(2)).

Because the amount depends on the reported wage, also read the BPJS guide.

When to get help

Find an adviser before signing anything, especially if:

• the company’s offer is far below your calculation;
• the reason looks tied to pregnancy, illness or another prohibited ground;
• you are asked to resign with something promised verbally;
• you are receiving threats or pressure.

Some doors to knock on:

• LBH (Lembaga Bantuan Hukum, legal aid institutes). State-funded free legal aid is meant for poor individuals or groups and is given by legal aid institutes or civil society organisations (Law 16/2011 Art. 1). So not every case qualifies. Ask about the criteria directly, and ask whether they can point you to another adviser.
• The district or city manpower office for registering a dispute and for mediation.
• SINDIKASI, an organisation of media and creative-industry workers that, according to its official site, provides assistance to workers in the creative and digital sectors.
• A paid lawyer if you need formal representation.

REKATI is not affiliated with any of these and cannot guarantee your case will be accepted. REKATI does not take cases; what we can do is share experience, point you onwards, and keep you company in finding your next job. Start with the guide to job hunting after a layoff.

What may change

The Employment Protection Law was approved by the DPR on 6 October 2026 but is not yet in force; the rules above still apply. Details are in New rules 2026.