Summary of hearing from trade unions in Indonesia: Protection of dismissed workers
This is a summary of meeting with trade unions at ILO Jakarta Office on March 24.
Dismissal Situation
Indonesia is experiencing significant challenges with unemployment and worker protection, as revealed in a meeting with trade union representatives at the ILO Jakarta office. Daily reports of dismissals across the country have become common place, with the Sritex case in Central Java standing as a prominent example where over 10,000 workers were dismissed following the company’s bankruptcy. These workers are now demonstrating daily, demanding their entitlements including wage payments, THR, and severance pay. According to trade union representatives, such cases represent only a fraction of the total dismissals occurring throughout Indonesia.
Data Collection Issues
The government’s data collection remains incomplete, with the National Statistics Office (BPS) lacking disaggregated data on the specific reasons for unemployment—whether from dismissal, resignation, or fixed-term contract expiration. This data gap is particularly problematic for administering the country’s unemployment insurance scheme (JKP), which provides 60% of previous wages for up to six months but requires that recipients be dismissed rather than having resigned. Currently, about 30,000-40,000 unemployed workers claim these benefits monthly, but without comprehensive dismissal data, it’s impossible to assess whether this represents adequate coverage. Trade unions suggest many dismissals go unreported in official statistics.
Awareness and Benefit Usage
A significant concern is that many workers, including those from Sritex, lack awareness of their rights to unemployment benefits and eligibility criteria. Instead of claiming these benefits, workers commonly withdraw from their old age savings accounts (JHT), compromising their financial security in retirement. Because workers don’t understand their entitlements to unemployment benefits, they immediately resort to withdrawing their old age savings, which are designed for retirement rather than temporary unemployment support.
Compliance with Labour Laws
Compliance issues with labour laws are also evident, with companies sometimes dismissing employees with minimal notice despite the legal requirement for 30 days’ advance notice or equivalent wage payment. The practice often differs case by case, creating gaps between legal provisions and actual compliance that require improved dialogue between workers and employers.
Age Limitations and Protection Gaps
The social protection system further suffers from inconsistent age limitations—unemployment benefits cover only those below 54, JHT covers those below 56, and the pension age is 59—leaving older workers, particularly the self-employed who may work beyond 70 years of age, inadequately protected. These inconsistencies fail to effectively protect older persons who continue working, especially in self-employment.
These issues collectively signal an urgent need for improved policy dialogue to strengthen Indonesia’s social protection framework in the coming year.
Note: This article was generated using artificial intelligence technology with human assistance, based on a transcript of my original presentation.
