INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat, Gustaaf Reerink and Adri Dharma, ABNR Counsellors at Law
intended termination date (or seven business days if the termination is during a probationary period). This requirement does not apply in cases of resignation, expiry of a fixed-term employment agreement, the employee reaching pension age or where the employ - ment relationship ends due to the employee’s passing. If the employment agreement, CR or CLA requires a longer notice period, the employer must comply with it. If, after being notified, the employee rejects termi - nation, settlement must be reached by way of bipartite negotiation and the industrial relations dispute settle - ment mechanism of the IRDS Law. The Manpower Law and GR 35 are silent in relation to employment termination due to a business sale (other than a spin-off transaction). Therefore, if the sale is only related to one or part of the businesses managed by the company, the foregoing reasons for termination will not be applicable. In practice, employees who are attached to the business will either be offered (i) a new position in the seller’s company, (ii) transfer of employ - ment to the purchaser (new owner of the business) or (iii) mutual termination by the seller. If a business sale is carried out due to the employer experiencing losses, or to prevent losses, the employ - er may terminate the impacted employees for rea - sons of business efficiency. For termination due to the employer experiencing losses, the employer must be able to prove those losses via internal or external financial audit reports. To terminate for reasons of efficiency in order to pre - vent losses, the employer must be able to prove that there is potential for reduced productivity or profit that will impact the employer’s operations (the primary requirement for this type of termination). GR 35 does not provide examples of proof that must be produced by the employer. This allows each employer to self- evaluate their circumstances and provide proof that is relevant to their business and operations. In the acquisition of a company, the employment relationship between the acquired company and the employees will automatically continue unless termi - nated. In a business sale, employees do not automati - cally transfer to the buyer. They are entitled to be given
an option to continue working for the buyer or to have their employment terminated. In the case of the latter, employees are entitled to a severance package. In any of the corporate actions described in the fore - going, the labour union shall be entitled to represent its members during the negotiation with the employer – eg, negotiation on employee transfer or the sever - ance package in the event of termination. However, this negotiation process with the labour union will not hinder the employer from proceeding with the intend - ed corporate actions. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI Intellectual property in Indonesia is divided into seven types, each of which is regulated by its respective law: • trade marks, stipulated in Law No 20 of 2016 on Marks and Geographical Indication (as amended); • geographical indication, stipulated in Law No 20 of 2016 on Marks and Geographical Indication (as amended); • patents, stipulated in Law No 13 of 2016 as lastly amended by Law No 65 of 2024 on Patents; • copyright, stipulated in Law No 28 of 2014 on Copyright (as amended); • industrial design, stipulated in Law No 31 of 2000 on Industrial Design; • trade secrets, stipulated in Law No 30 of 2000 on Trade Secrets; and • layout designs of integrated circuits, stipulated in Law No 32 of 2000 on Layout Designs of Integrat - ed Circuits. All of the foregoing are classified as intellectual prop - erty rights (IPRs), and the associated legislation is referred to as the Intellectual Property Law (the “IPR Law”). The IPR Law is an important aspect of FDI, as it pro - tects the intellectual property of any party in Indonesia. To ensure protection of an intellectual property asset, a foreign investor must register or record the assets
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