Company Fails to Pay Wages: Can Employees File for Bankruptcy?

Recently there have been many cases of companies being declared bankrupt, one of them is PT. Sri Rejeki Isman Tbk., commonly known as Sritex. This textile company, headquartered in Sukoharjo, Central Java, officially closed in March 2025. More than 11,000 Sritex workers were laid off, and the company was declared bankrupt by the Commercial Court in October 2024.

Under Indonesian law, according to Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations (PKPU), bankruptcy is a condition in which a debtor (whether an individual or a legal entity) is declared unable to pay debts that have fallen due, and this can be decided by a court.

So, can employees file for the bankruptcy of a company?

Employees can file a bankruptcy petition against the company where they work if the company has debts that are due and unpaid. This is regulated under Law Number 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations (PKPU Law).

According to Article 2(1) of the PKPU Law, a bankruptcy petition may be filed if:

• The debtor (the company) has two or more creditors;
• The debtor fails to pay the debt that is due and collectible.

Employees fall within the category of creditors because they hold a right to claim unpaid wages, severance pay, or benefits. Under Article 2(1), the parties who may file a bankruptcy petition include:

• Creditors (including employee)
• The debtor itself
• The Public Prosecutor's Office (in matters of public interest)
• Bank Indonesia (for banks)
• The Financial Services Authority/OJK (for certain financial institutions)
• The Ministry of Finance (for state-owned enterprises/BUMN)

Therefore, it can be concluded that if a company has already obtained a decision from the Industrial Relations Court (PHI) for example, in the form of a court ruling or a bipartite settlement agreement that has been registered with the PHI but fails to fulfill its obligations under it (such as paying severance, wages, or other entitlements), employees are entitled to pursue further legal action. Employees whose entitlements remain unpaid may file a bankruptcy petition with the Commercial Court.