Are Employees Who Resign Before Their Contract Ends Entitled to Compensation Pay?

Employees who resign before the end of a fixed-term employment agreement (PKWT) are entitled to compensation pay. This applies under Law Number 13 of 2003 on Manpower, as most recently amended by Law Number 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation into Law.

Article 17 of Government Regulation Number 35 of 2021 requires an employer to pay compensation when either party ends the employment relationship before the PKWT expires. The amount is calculated based on the period of the PKWT already performed by the worker.

Accordingly, even if the employee personally chooses to resign before the contract ends, the employee remains entitled to compensation pay from the company, calculated based on the time already worked.