Legal Implications of Forced Resignation: Employee Rights and Consequences for Companies

Indonesia's labor landscape is often marked by the phenomenon of "resignation that feels like termination" (pengunduran diri rasa PHK). This situation arises when an employee is asked, pressured, or even threatened by management into signing a letter of resignation. This tactic is often used by companies to avoid the obligation of paying substantial severance. But legally speaking, can such conduct be justified?

Under Law No. 13 of 2003 on Manpower, as amended by Law No. 6 of 2023 (the Job Creation Law), resignation is the prerogative right of the worker. Article 154A(1)(i) expressly states that termination of employment may occur because a worker resigns of their own free will. The practice of coercing employees often involves threats such as: "If you don't resign, we will dismiss you dishonorably so that it will be difficult for you to find work again," or threats to report the employee to the police without solid evidence.

In various Supreme Court (MA) rulings, a company's act of creating an unconducive working environment or exerting psychological pressure so that an employee no longer wishes to stay (often referred to as constructive dismissal) is categorized as a unilateral termination by the employer. If an employee can prove such coercion before the Industrial Relations Court (PHI), the judge may order the company to pay the employee's entitlements as though an ordinary termination had occurred. Coercing a resignation is not merely unethical conduct, but also a serious violation of Indonesia's labor regulations.

Companies that engage in this practice risk facing lawsuits before the Industrial Relations Court, which may ultimately incur greater costs and damage corporate reputation. Alignment between workers' rights and employers' obligations is the key to a harmonious industrial relationship. The phrase "of their own free will" signals the presence of free will, without pressure (voluntarily). From a civil law perspective, referring to Article 1321 of the Civil Code, an agreement is not valid if given under duress, mistake, or fraud. Accordingly, a resignation letter born out of intimidation is legally regarded as formally defective and may be annulled.