Ministry of Manpower Appreciates Constitutional Court Decision which Strengthens Protection of Workers’ Rights
The Ministry of Manpower (Kemnaker) appreciates the decision of the Constitutional Court (MK) which strengthens the protection of workers’ normative rights while providing legal certainty regarding the regulation of pension fund benefits.
The Constitutional Court’s decision is the result of a material review of Article 161 paragraph (2) and Article 164 paragraph (1) letter d and paragraph (2) of Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (P2SK) in Case Number 139/PUU-XXIII/2025 and Number 164/PUU-XXIII/2025 regarding the regulation of pension fund benefits and workers’ rights to severance pay, long service pay. (UPMK), as well as compensation for rights.
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Secretary General of the Ministry of Manpower, Cris Kuntadi, said that the Constitutional Court’s decision was a positive step in strengthening the protection of workers’ normative rights while providing legal certainty in the implementation of provisions regarding pension funds.
“The Ministry of Manpower appreciates the decision of the Constitutional Court which provides legal certainty while strengthening the protection of workers’ normative rights. This decision is an important step in strengthening the protection of workers’ rights while providing legal certainty for all parties,” said Cris in a press release from the Ministry of Manpower’s Public Relations Bureau.
In its considerations, the Constitutional Court emphasized that severance pay, service pay (UPMK), and compensation for rights are normative rights of workers that must be paid by employers in the event of termination of employment, including because workers enter retirement.
The Court also emphasized that pension fund benefits cannot replace workers’ rights to severance pay, UPMK, and compensation for entitlements. The pension fund program is voluntary and provides additional benefits for workers, while these normative rights must still be fulfilled in accordance with labor law provisions.
Apart from that, the Court granted some requests for material review of the provisions in Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (P2SK). In its decision, the Court stated that payment of pension benefits whose participation is voluntary and consists of severance pay, UPMK, and compensation money can be made all at once or periodically according to the wishes of the participant, widow/widower, or child, while still taking into account the provisions of laws and regulations regarding pension funds.
According to Cris, this decision is an important reference in strengthening worker protection as well as providing legal certainty in the implementation of provisions regarding pension funds.
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“In principle, the Ministry of Manpower appreciates the decision of the Constitutional Court. We view this decision as further strengthening the Ministry of Manpower’s commitment to protecting workers’ rights while providing legal certainty in the implementation of provisions regarding pension funds,” he said.
Cris added that the Ministry of Manpower will continue to oversee the implementation of employment policies so that they are in line with the constitutional mandate and the decision of the Constitutional Court, so that protection for workers becomes stronger and industrial relations in Indonesia become more harmonious, productive and just. ***REL
