The Obligation of The Companies to Pay the Severance Money

The severance money always is a sensitive yet serious topic between the company and the employee. Every year, the labor movement always highlights about this one, since there are many employees who haven't already understand their right.

One question remains in our mind: shall the company pay for their ex-employees? Some employees never receive their right due to their ignorance. Either they don't understand the law, or either they just want to leave the company as soon as possible.

Whatever the reason for an employee to leave the company, all the employees must understand whether the company must or must not give them the severance money in the first place. And here are the conditions of the employee when leaving the company, and how much money that the companies must give based on The Law No. 13 the Year 2003:

1. If you leave the company intentionally

Depend or the article 162 number 1, the company must give you the severance money, but it is applied as long as you are the permanent employee.

Based on the article 154, if you never pass the probation or if you are the temporary employees, the company has right not to give you any severance money.

Reference: The obligation of the company to the resigned employee

2. If you violate the company's rule

Even when you have violated the company's rule and the company decided to fire you, you still have right to receive the gratuity money (Uang Penghargaan Masa Kerja), severance money, and also the right reimbursement right payment (Uang Penggantian Hak).

But, if you don't work for 5 days or more and the company has called you properly for 2 times, you will only get the reimbursement right payment and the leaving payment (Uang Pisah).

This rule is arranged in the article 161 number 3, and only applied if you are a permanent employee.

3. If the company does the laid off

Based on the article 164 number 1 and 3, the company must give some amount of money if the company does the bulk laid off either because of the efficiency or force majeure.

The employees will receive the severance money, reimbursement right payment, and the gratuity money.

4. When the company merges with other companies

Regarding the article 163 number 1, when a company merges with other company, and there is the status change, the employee who resigns both intentionally, or being fired has right to get some amount of money.

If the employee resigns intentionally, they will get the severance money, reimbursement right payment, and the gratuity money. But if he is fired due to this change, reimbursement right payment, and the gratuity money, and twice severance pay.

5. Other reasons besides working matter

There is also some amount of money that the employee will get if he cannot continue his job for several reasons. Fris, if he is in charge of something and must be put in the jail, he will get the gratuity money and reimbursement right payment.

 If he experiences the accident or being sick, he will get the reimbursement right payment, and twice gratuity money as well as the severance pay. If an employee dies, he will get reimbursement right payment, the gratuity money, and twice severance pay.

If the company goes bankrupt, the employees also get the reimbursement right payment, gratuity money, and the severance pay.

For the permanent employees, all the companies have an obligation to give them the severance pay once the employees decide to leave the job. And if you find your company doesn't give you your right, don't mind to contact the attorney for the consultation. 


BP Lawyers can help you: we can assist you in providing the best solution to the legal program of your business or your company’s.  You can contact us via ask@bplawyers.co.id or +62 821 1000 4741