Indonesia Constitutional Court Ruling Clarifies Statute of Limitations for Employment Termination Disputes

On September 17, 2025, the Constitutional Court of the Republic of Indonesia issued Decision No. 132/PUU-XXIII/2025, which reinterprets the statute of limitations for termination of employment disputes.

The statute of limitations is set out in Article 82 of Law No. 2 of 2004 on the Settlement of Industrial Relations Disputes (“Law No.2/2004”). Article 82 was previously amended by Constitutional Court Decision No. 94/PUU-XXI/2023.

Constitutional Court’s Latest Interpretation

In this latest case, an employee challenged Article 82 of Law No. 2/2004, which provided that lawsuits regarding termination of employment could only be filed within one year from the date the termination decision was received by the employee or notified by the employer. The applicant argued that this provision created legal uncertainly and unfairness for employees, in violation of the 1945 Constitution.

The Constitutional Court agreed and clarified that the mandatory pre-litigation stage, including mediation or conciliation at the local labor office, must be taken into account. Accordingly, the Court ruled that Article 82 should be interpreted as follows:

"Employees' lawsuits regarding termination of employment can only be filed within one year from the date an agreement is not reached through mediation or conciliation."

Implications for Employers and Employees

This ruling effectively changes the calculation of the statute of limitations for a termination of employment lawsuit. The one-year period now begins only after the pre-litigation stage has concluded without an agreement.

For employers, this means playing an active role in dispute resolution is more critical than ever. Employers must initiate bipartite meetings and, if unresolved, promptly request mediation or conciliation through the local labor office. Until this process is completed, the statute of limitations for termination disputes does not begin to run.

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