Analysis of Workers’ Rights to Damages and Compensation Under Fixed-Term Employment Contracts (PKWT) Based on Government Regulation No. 35 of 2021

Abstract

Changes to the labor law regime following the enactment of No. 6 of 2023 on Job Creation have led to a dual regulatory framework regarding the financial rights of workers under Fixed-Term Employment Agreements (PKWT) who experience termination of employment before the end of their contract term specifically, between compensation for the remaining contract period and compensation for the termination of the PKWT which is still frequently misapplied in industrial relations court practice. This study aims to analyze the normative regulations governing these two rights based on Government Regulation No. 35 of 2021, as well as their application in Supreme Court Decision No. 720 K/Pdt.Sus-PHI/2024. The study employs a normative legal method using a statutory approach, a case-based approach, and a conceptual approach, analyzed through the Theory of Legal Protection and the Theory of Legal Certainty. The results of the study indicate that the Industrial Relations Court at the Denpasar District Court erroneously applied the severance pay standards for permanent employees to a fixed-term employment contract (PKWT) case; consequently, the Supreme Court corrected this by establishing a cumulative obligation consisting of compensation for the remaining contract period and PKWT compensation, while simultaneously reaffirming the principles of proportionality and ultimum remedium in the termination of employment. The study concludes that there is a need for technical judicial guidelines that clearly distinguish among the three types of financial rights of fixed-term contract workers to prevent disparities in rulings and strengthen legal certainty.