Abstract

The Employment Law, the Job Creation Law and their derivatives only provide separation pay as an obligation of the employer which must be fulfilled to the employee when terminating their employment relationship due to certain reasons, while leaving the amount to be regulated in the separate work agreement, the company regulations or the collective work agreement. The absence of authentic interpretation and provisions regarding the amount of separation pay in employment regulations in Indonesia raises problems in both the meaning and the application of the law. The questions raised in this research are whether the court decision that applies the amount of severance pay the same as the amount of reward for the fulfilled term of office is correct, and is the meaning behind setting the amount of separation pay determined in the work agreement, the company regulations, or the collective work agreement. This research aims to identify and analyze the aforementioned problems. The research method used is normative and analytical descriptive which relies on secondary data as the source. The results of the research display that, in cases where it is not regulated, the judge ultimately determines the amount of separation pay to be the same as the calculation of the gratuity for long service. This is not entirely correct because the reward for a long period of service is intended as a gratuity for years of service that has been dedicated to the company so that rational considerations are the basis for the calculation and separation money is intended more as a bond of love so that the moral dimension is stronger.

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