Employment Discrimination in Indonesia: Legal Protections and Obligations

Employment discrimination in Indonesia remains a significant issue, impacting fairness and productivity in the workplace. To address this, Indonesia has aligned its laws with international standards, notably by ratifying the International Labour Organization (“ILO”) Convention Number 111 Concerning Discrimination in Respect of Employment and Occupation through Law Number 21 of 1999 (“Law 21/1999“) and enacting the Law Number 13 of 2003 on Employment, as amended by Law Number 6 of 2023 concerning the establishment of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation (“Employment Law”). These legal frameworks ensure equal employment opportunities and protect employees from discrimination based on race, gender, religion, and other factors. Employers are obligated to uphold fairness in recruitment, treatment and social security provisions, with legal consequences for violations. By enforcing these regulations, Indonesia strengthens equity in the workplace while holding companies accountable for discriminatory practices.

Employment discrimination remains a crucial issue affecting the principles of fairness and equality in the workplace. Discriminatory practices not only harm individuals affected but also have broader implications, including reduced productivity, lowered employee morale, and damaged corporate reputation. Businesses need to proactively address this issue to foster an inclusive and equitable work environment. Recognizing the importance of combating discrimination, Indonesia has taken steps to align its national laws with international standards.

As parts of its commitment, Indonesia ratified the ILO Convention Number 111 through Law 21/1999. By adopting this convention, Indonesia aims to prevent, prohibit, and eliminate all forms of discrimination in respect of employment and occupation by ensuring the protection of fundamental employee rights.

In addition to ratifying ILO Convention Number 111, Indonesia has further strengthened protection against discrimination in the workplace through Employment Law. This law, which serves as a crucial tool for preventing discrimination in the workplace, provides a clear framework that explicitly outlines employee rights.

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Key Aspects of Employment Discrimination

According to Article 1 of ILO Convention Number 111, discrimination in terms of employment and occupation includes two key aspects:

Any distinctions, exclusions, or preferences based on race, gender, religion, political beliefs, nationality, or social origin that reduce equal opportunity or treatment in employment; and
Any other distinctions, exclusions, or preferences affecting equal opportunity, as determined by relevant authorities in consultation with employer and employee organizations.

The provisions of this Convention ensure that all employees are afforded equal opportunities and fair treatment in the workplace, safeguarding against any practices that may result in discriminatory outcomes.

Legal Basis for Protecting Employees from Discrimination

The Employment Law serves as a cornerstone for employee protection in Indonesia, which explicitly protects employees from discrimination. This law provides a comprehensive legal framework designed to uphold employee rights with three primary objectives:

Guaranteeing the fundamental rights of all employees;
Ensuring equal opportunities in employment; and
Promoting a work environment free from all forms of discrimination.

This legal foundation reinforces the commitment to fairness, equity, and inclusivity in the workplace.

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Employee Rights in the Context of Discrimination

Right to Employment
Based on Article 5 of the Employment Law, every employee is entitled to equal opportunities to obtain employment and a decent livelihood without discrimination based on gender, ethnicity, race, religion, or political affiliation. This right also includes equal treatment for persons with disabilities, according to their interests, abilities, and qualifications.

One example of the implementation of this right can be seen in the recruitment process carried out by employers. Article 5 of the Employment Law ensures that every potential employee has an equal opportunity to demonstrate their qualifications and competencies in the selection process without facing discriminatory treatment from the employer. This provision promotes fair competition in employment, ensuring that selection is based on individual merit.
Right to Equal Treatment
Based on Article 6 of the Employment Law, every employee is entitled to equal treatment without discrimination from employers. One example of the implementation of this right is the obligation of employers to provide proportional rights for employees either with an Indefinite Term Employment Agreement (Perjanjian Kerja Waktu Tidak Tertentu, “PKWTT“) or a Fixed Term Employment Agreements (Perjanjian Kerja Waktu Tertentu, “PKWT“) in the event of termination of employment. Under Article 156 paragraph (1) of the Employment Law, employers must pay severance, long service, and compensation pay to terminated PKWTT employees. Meanwhile, Article 61A paragraph (1) of the Employment Law stipulates that PKWT employees are entitled to compensation according to the length of work.

Additionally, Article 153 paragprah (1) of the Employment Law prohibits termination based on gender, ethnicity, race, religion, or other discriminatory factors. Therefore, employers are required to provide legitimate reasons for any layoff, ensuring that employees’ rights are protected under both PKWT and PKWTT agreements. This provision safeguards fairness and helps prevent workplace discrimination.
Right to Social Security and Welfare
Based on Article 99 of the Employment Law, employees and their family are entitled to employee social security, which consists of (i) BPJS Health for health insurance and (ii) BPJS Employment, covering work accident, old age, pension, and death insurance.

For example, employers must register all employees in the BPJS program without discrimination, ensuring no distinction based on gender, marital status, job type, or contract terms. Employees on maternity leave must have full access to BPJS Health, and employees with disabilities must receive appropriate work accident insurance. This comprehensive approach guarantees equal employee protection and prevents discrimination, as mandated by the Employment Law.

Legal Consequences for Companies Committing Discrimination

Discrimination in the workplace is a serious violation that can undermine both the well-being of employees and the principles of fairness in the work environment. To address this, Article 190 paragraph (1) of the Employment Law authorizes the Central or Regional Government to impose administrative sanctions on companies proven to have committed discriminatory practices.

Additionally, workplace discrimination often leads to industrial relations disputes. Article 136 paragraph (1) of the Employment Law mandates that such disputes must first be resolved through deliberation between employers and employees or trade unions. Should such deliberation fail to resolve the dipute, employees may seek available legal remedies.

Thus, employers are not only at risk of facing government sanctions but also of prolonged legal disputes, which can disrupt harmony in industrial relations and tarnish their reputation. A failure to effectively address and resolve discrimination-related disputes can have long-term negative effects on both the company’s operational stability and standing in the market.

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Conclusion

Employment discrimination is a serious violation of human rights and the principles of justice. To address this issue, Indonesia has established a robust legal framework through Law 21/1999 and the Employment Law. These laws clearly define what constitutes discrimination and prohibit distinctions based on race, gender, religion, or other protected characteristics in the workplace. By enforcing these regulations, Indonesia reaffirms its commitment to promoting equality and safeguarding employee rights.

Beyond defining discrimination, these laws establish specific employee rights and impose clear obligations on employers to foster an inclusive and equitable work environment. Employers must ensure that all employees receive equal opportunities in hiring, career advancement, and access to benefits, regardless of their background. By holding companies accountable for fair employment practices, these regulations not only protect individuals but also contribute to a more productive and harmonious workforce. Failure to adhere to these regulations can result in significant legal consequences, including administrative sanctions and industrial relations disputes.

This article is for informational purposes only and does not constitute legal advice. For specific legal concerns, please consult with our legal experts at ADCO Law. Our team of experienced legal professionals is well-versed in labor regulations, compliance requirements, and best practices to help businesses navigate complex employment matters. Whether you are an employer seeking to ensure compliance with Indonesian labor laws, or an employee requiring legal assistance, we provide tailored solutions to meet your needs.

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