Legal Advice on Termination of Employment (PHK) for Disciplinary Issues

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As stipulated in Article 52 of Government Regulation No. 35 of 2021, a company must provide three sequential Warning Letters (SP) to an employee who violates employment terms, company regulations, or a collective labor agreement (CLA):

  1. First Warning Letter (SP1) for the initial offense.

  2. Second Warning Letter (SP2) if the offense is repeated.

  3. Third Warning Letter (SP3) if the behavior persists after SP2.

These warnings must be documented and issued at reasonable intervals to give the employee time to correct their behavior. Termination may proceed only if documented warnings fail to resolve the issue.

Additional Legal Requirements:

  • Article 151 of the Job Creation Law: Termination should be a last resort after attempts at consultation and mediation, potentially involving the Ministry of Manpower.

  • Constitutional Court Decision No. 168/PUU-XXI/2023: Employees have the right to fair dispute resolution and mediation before termination.

  • Article 36 & 37 of Government Regulation No. 35/2021: Companies may terminate employment for legitimate reasons such as business efficiency, financial losses, or repeated absenteeism, provided SP procedures are followed.

Conclusion / Takeaway:

Termination for disciplinary issues must follow the sequential Warning Letter procedure, allow opportunities for correction, and respect employees’ rights to mediation and fair dispute resolution. Only after these steps can termination legally proceed.

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