Beware of the Layoff Tsunami

Termination of employment, commonly known as PHK, has now become a very common phenomenon among various companies facing the global recession, with the reasoning that it avoids losses and ensures the continuity of the company. Termination of employment (PHK) is the ending of an employment relationship for a certain reason that results in the end of the rights and obligations between the worker or labourer and the employer.

Unpleasant news about termination of employment (PHK) appears in various media every day. It is not only  happening at start-up companies; this wave of layoffs has spread to various sectors and companies in Indonesia.

The threat of a global recession and the absence of significant growth in the company's sustainability are the main causes of layoffs. If company efficiency measures are not taken immediately, the company will be threatened with major losses, ending in closure.

How should layoffs be carried out in accordance with statutory regulations? Can employees be laid off on the grounds of difficulty in sustaining the business under this declining global economic condition? To date, the legal rules on layoffs are set out in Law No. 13 of 2003 on Manpower, Law No. 11 of 2020 on Job Creation, and specifically in Government Regulation No. 35 of 2021 on Fixed-term Employment Agreements, Outsourcing, Working Time, Rest Time, and Termination of Employment.

These three regulations must be understood and obeyed by both companies and workers. Otherwise, companies and workers must be prepared to pursue various industrial relations dispute resolution channels and may face administrative sanctions.

However, if the procedures, mechanisms, and even the fulfilment of employees' rights upon layoffs are not met, the potential for disputes and for administrative sanctions in the form of suspension of the company is very high.

Termination of employment (PHK), which is a hot topic of conversation at present, has even become something feared by many workers or labourers, because workers will find it difficult to get new jobs. In fact, there are things that can be prepared to face layoffs. After all, we ourselves must be wise in anticipating risks. If there is no change in the Indonesian economy and society in the coming years, the storm of layoffs will most likely become even more rampant. Even some large companies have already laid off their employees.

The industrial world is very vulnerable to many things, and even if just one of many factors is disrupted, it is not impossible for layoffs to become the option a company takes. Restrictions on activities have left companies struggling to manage their finances. As a result, some companies have chosen to furlough and dismiss staff, that is, to lay them off. The various reasons given by companies are certainly not reasonable or easy to accept for the workers affected by layoffs.

In any case, layoffs will always be unpleasant and will lead to various problems in workers' lives. Some people may argue that the purpose of the job creation law is to create as many jobs as possible, but instead of the law's intended impact being felt, the opposite has happened  as many companies have carried out layoffs.

So, what steps should actually be taken when laid off by a company? Everyone will certainly have their own way of dealing with the turmoil of layoffs, especially those who have a lot of experience in the world of work. In reality, however, facing layoffs is not an easy matter for most of the people who experience it. Before the impact of layoffs reaches us, there are at least some efforts that can be made to anticipate the problem, such as:

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