Constitutional Review of Mandatory Termination Compensation: MK 192/PUU-XXIV/2026

The Constitutional Court decided case 192/PUU-XXIV/2026 on 16 July 2026 in a review brought by an individual petitioner, Dianto Isnan Laksono Putra, against the Annex to Law 6/2023, which enacted the Job Creation Regulation in Lieu of Law 2/2022 into statute. The petition was narrow. It targeted the mandatory verb in Pasal 156(1), reproduced in the Annex through Pasal 81 number 47, which states that an employer is obliged to pay severance, a reward for the period of service and compensation for entitlements when an employment relationship is terminated. The petitioner argued that the obligation, as worded, fails to secure the constitutional right to legal certainty under Article 28D(1) of the 1945 Constitution, because in practice terminated workers often receive nothing.

Legal Reasoning

Much of the Court's reasoning addressed whether the provision could be reviewed at all while a replacement statute was being drafted. The Court first restated the position it set out in Decision 168/PUU-XXI/2023 and repeated in Decision 167/PUU-XXIV/2026: the employment cluster in the Annex to Law 6/2023 must be separated out and enacted as a standalone manpower law, so that inconsistencies and disharmony in employment regulation can be reordered and redrafted. The two-year window set by Decision 168/PUU-XXI/2023 runs from its pronouncement on 31 October 2024 and therefore closes on 31 October 2026. If the separation is not carried out by that date, the older Law 13/2003 on Manpower comes back into effect, together with the Court's employment-related decisions.

The Court held that the pending deliberation of the new manpower bill does not remove the petitioner's constitutional interest in testing the provision. Lawmaking and constitutional review are two distinct mechanisms. Legislative deliberation produces norms intended for the future, while review assesses the constitutionality of the norm currently in force. The existence of a legislative process therefore does not cancel out an infringement of constitutional rights caused by a norm that remains in effect. The Court also stressed that the problem raised was current rather than prospective: many workers have already been dismissed and have not received termination compensation because the employer has gone bankrupt, has ceased operations, holds insufficient assets, or has not carried out a court judgment that is already final and binding. Treating a review as irrelevant merely because the legislature is discussing the same statute would leave those workers without certainty over an entitlement the law already grants them, and there is no guarantee that a new bill will resolve the constitutional question at issue.

The Court supported that position with its own practice. It pointed to Decision 74/PUU-XXIV/2026, and within it to Decision 112/PUU-XXII/2024 on a curator's reporting duties to the supervisory judge in bankruptcy proceedings, where the Court examined and decided a petition even though the statute concerned had been listed for amendment in the national legislation programme. It added that the wording under challenge differs from the corresponding text in Pasal 156(1) of Law 13/2003 only by an affix, so that a ruling delivered before the October 2026 deadline would serve as constitutional guidance for the drafters of the new manpower law rather than becoming illusory. The point matters beyond employment law, since the Annex to Law 6/2023 supplies the frame for sectoral rules such as the risk-based business licensing standards for energy and mining.

The Ruling

The Court rejected the petition in its entirety. The mandatory wording in Pasal 156(1), as reproduced in Pasal 81 number 47 of the Annex to Law 6/2023, therefore stands unchanged and continues to bind employers on termination of employment. Two consequences follow from the decision as written. First, the employer obligation to pay severance, service-period rewards and compensation for entitlements remains in force in its present form, and any change to it will come from the legislature rather than from this ruling. Second, the deadline established by Decision 168/PUU-XXI/2023 is unaffected: the employment cluster must still be separated into a standalone manpower law by 31 October 2026, failing which Law 13/2003 and the Court's related decisions apply again. The Court's register for the same period includes other statutory reviews with a similar posture, among them the challenge to age limits for election commission membership.

Read the full decision in the official record.

Methodology: This memo summarises the official decision text and is not legal advice; report corrections to contact@crpg.info.

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