Law Number 7 of 1989 on Mandatory Report on Employment in the Company (“Law No.7/1981”) requires any entrepreneur or management to report in writing any establishment, discontinuance, recommencement, assignment or dissolution of the company to the minister or the competent authority.
Under Article 1 letter (b) of Law No.7/1981 entrepreneur means:
- an individual, a partnership or a legal body that runs a self-owned business;
- an individual, a partnership or a legal body that independently runs a business is not owned by them;
- an individual, a partnership or a legal body that is domiciled in Indonesia but represents a business as set out in number 1 and number 2 above.
The management is defined as the person who is appointed to lead a company.
Article 6 of Law No.7/1981 stipulates that entrepreneur or the management shall report in writing to the appointed minister or competent authority at the latest 30 (thirty) days after establishment, recommencement or transfer of the company. Under Article 2 of Ministry of Employment and Transmigration Regulation Number PER.14/MEN/IV/2006 on the Mechanism of Employment Report in the Company (“MOMT No.14/2006”), entrepreneur is required to prepare an employment report in accordance with the actual condition whether it is in the head office, branch office or the independent part of the company.
Entrepreneur or the management shall report annually in writing with regards to the employment to the minister or competent authority. As in the above mentioned report shall contain the following information:
- corporate identity;
- labor relations;
- employment protection;
- employment opportunities.
Article 8 paragraph (1) of Law No.7/1981 requires the entrepreneur or the management to report in writing with regard to the transfer, termination, dissolution of the company to the minister or competent authority at least within a period of 30 (thirty) days before the transfer, termination, dissolution of the company.
The report shall contain the following information:
- name and address of the company or the part of company;
- name and address of the entrepreneur;
- name and address of the company’s management;
- date of assign, discontinue or dissolve the company;
- the obligations that have been and will be performed against their labors, in accordance with the applicable laws and regulations, employment agreements, labor agreements and local customs;
- the number of labors who will be discharged.
As per Circular of Minister of Employment and Transmigration of the Republic of Indonesia Number SE.3 / MEN / III / 2014 on the Implementation of Mandatory Report of Employment in the Company ("CMOMT 3/2014") provides that the deadline of approval process of mandatory employment report application in company is 1 (one) working day after receipt of mandatory report application has been filled and signed with the company’s stamp. The services on the registration of mandatory report is free of charge.
The entrepreneur or the management is threatened with imprisonment at maximum 3 (three) months or a maximum fine of Rp 1,000,000. - (one million Rupiah) if they do not performthe obligation to annually report on employment in the company.