Another Constitutional Court Decision in Favor of Employees

In Decision No. 37/PUU-IX/2011 dated September 19, 2011, the Constitutional Court has again delivered a decision that favors employees in the case of a termination dispute.

This Decision holds that in a dispute between an employer and an employee, both parties have to continue to perform their respective rights and obligations while the court deliberates.
This means that the employee must continue working, and the employer must continue paying the salary and benefits. If the employer suspends the employee, the employer’s obligation to pay salary and benefits continues until the decision is made final and binding.

In employment termination disputes, a Labor Court hears and decides the disputes in the first instance. Decisions of Labor Courts in employment termination may be appealed to the Supreme Court. If no appeal is made within 14 working days, Labor Court decisions become final and binding. The decision of the Supreme Court is final and binding.

Under the applicable laws, the entire proceedings in an employment dispute (including the Supreme Court decision) shall conclude within 140 working days. But in reality, proceedings always exceed the 140-working day period.

The Constitutional Court Decision is obviously a major concern for an employer in an employment termination dispute as the employer must continue paying salary and benefits to the employee during the proceedings until the Supreme Court decides the appeal. The entire proceeding may take more than 1 year.

In addition, the employer has to pay termination benefits to the employee at the end of the proceeding.

In Decision No. 37, the Constitutional Court has failed to consider certain circumstances that may be relevant in an employment termination dispute. For instance, in a termination which is caused by a serious misconduct of an employee, the Constitutional Court’s decision will require the employer to continue paying salary and benefits to the employee (although the employee is suspended). This certainly will not act as a deterrent to employees from committing any serious misconduct.