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The Company’s Closure (Lock Out) As One Of the Employer’s Rights

700-01878934Employment relationship between employer and employee is based on an employment agreement. Employment agreement is an agreement between employee and employer which specifies the work requirements, rights, and obligations of both parties. If viewed from the side of employers, the company's closure (lock-out) is the basic right of employers to refuse part of or all of the employees to perform their works as a result of the failure of negotiations. However, employer is not justified to perform the company's closure (lock-out) as a countermeasure because of the normative demands of the employee and / or employee unions. Under Article 1 number 24 of Law Number 13 of 2003 on Labor ("Labor Law") company's closure (lock-out) means an act of employers to refuse all of the or part of the employee to perform their works.

Company's closure (lock-out) is prohibited to be performed by the companies who serve the public interest and / or the type of activities which endanger the safety of human life, including hospitals, clean water network services, control center of telecommunications, power providers, oil and gas processing and also train transportation.

Company's closure (lock-out) has to be performed in accordance with the law. Employers who are going to perform the company's closure (lock-out) are obliged to notify in writing to the employee and / or employee unions, and the government institution responsible in the field of employment, at least 7 (seven) days prior to the implementation of the company's closure (lock out). Such notification shall at least contain:

a. time (day, date and time) when the company's closure (lock out) begins and ends; and

b. the reasons and the causes of performing the company's closure (lock out).

Employee or employee unions and the government institution responsible in the field of employment who directly receive the notification letter on company’s closure (lock out) must provide the evidence of receipt containing the day, date and time of the receipt of notification letter.

Before and during the company’s closure (lock out), the government institution responsible in the field of employment has the authority to resolve the problem which causes the company’s closure (lock out) by gathering the disputed parties and negotiate their problem. If the negotiation between the parties of the dispute is resolved, it must be made in an agreement signed by the parties and the official of the government institution responsible in the field of employment shall act as a witness. If negotiation between the parties of the dispute cannot be resolved, the official of government institution responsible in the field of employment will submit the problem which causes the company’s closure (lock out) to the industrial settlement disputes institution.

Notice on the company’s closure (lock out) does not need to be performed by the employer if:

a. employee or employee union violates the procedure of strike as regulated under Labor Law;

b. employee or employee unions violates the normative provisions which are specified in the employment agreement, company regulation, collective employment agreements, or the law.

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