Tech layoffs in Indonesia shine light on employee legal rights

“I was told on a Google Meet that I was one of those laid off,” says Anton, a former employee at Ruangguru who declined to use his real name for this report. “After the call, the severance package was sent to my account, and I immediately got locked out of my email and HR app.”

Image credit: Timmy Loen

The Jakarta-based marketing professional was shocked and deeply disappointed at losing his job at the well-funded Indonesian edtech startup. But this was followed by a sense of betrayal and injustice after he learned that such an abrupt layoff process was not in line with Indonesian law.

“It’s pretty bad that we weren’t notified at least two weeks in advance, as stated in the regulations [PP (government regulation) no. 35/2021],” he says, adding that he had also not been given adequate compensation in lieu of notice.

Similarly, a fellow tech worker who was one of those affected by the November layoffs at agritech startup TaniHub, says he was only given nine days notice before his employment was terminated. He, however, was unaware of his right to a 14-day notice period as mandated by the country’s regulations.

Ruangguru did not specifically comment on the matter of notice periods but tells Tech in Asia that it had entered into mutual separation agreements with affected staff – which include a package of severance and benefits – and has complied with all relevant regulations in Indonesia.

TaniHub, meanwhile, did not respond to our queries on the matter.

Not all adhering to rules

According to the relevant government regulation – which covers matters involving fixed-term employment, outsourcing, working hours and rest times, and termination – employees must be informed of their release in the form of a letter at least 14 working days before the termination of work takes effect.

These laws have become increasingly pertinent of late, given the waves of mass layoffs by some of the biggest tech startups in the country. These include Shopee, GoTo, Ruangguru, and Ajaib.

However, not all startups seem to be adhering to these rules.

For example, some affected staff have complained about the severance packages they received, which they claim do not add up to what has been mandated by local law. This is on top of reports that claim companies do not offer sufficient notice periods for termination.

One person Tech in Asia spoke to says that their company gave the same amount of severance pay to all of its retrenched employees regardless of their years of service at the company. Another says he feels he was manipulated into signing a termination agreement document that shortchanged him of his rights.

“I am upset, but I’ve already signed the agreement. So I’m not sure what to do,” he tells Tech in Asia.

Right to refuse termination

Alternatives to layoffs?