This is the fifth part of our 7-part blog series on labour and employment issues in Indonesia. Richard Emmerson will address a new topic each week. Some of our previous posts looked at discrimination, family and maternity leave, and employee representation.
BUSINESS SALES
1. On a business sale (either a share sale or asset transfer) do employees automatically transfer to the buyer?
No.? In a share sale, the employer entity remains the same.? In an asset sale, the transfer of employees may be agreed with the buyer and employees but is not automatic.
2. What employee rights transfer on a business sale? How does a business sale affect collective agreements?
The Manpower Law provides that employees have a right to resign due to change of control (which in practice means a change of more than 50 per cent shares in the employer) in a company and are entitled to enhanced resignation benefits.
The Manpower Law is silent on transfers of employees due to an acquisition of assets. It is necessary for all parties, including the employee, to agree that his or her employment will be transferred to the acquirer either as a successor employer or as a fresh employment. In the latter case, the employees shall be paid their termination benefits and their employment period with the acquiring company starts anew.
Alternatively, the employees may agree to start employment with the acquiring company and their existing employment period with the transferring company will be transferred to the acquiring company. In this case, the employees should not receive the termination benefits.
3. Are there any information and consultation rights on a business sale? How long does the process typically take and what are the sanctions for failing to inform and consult?
Yes, the Law No. 40 of 2007 on Limited Liability Company (the Company Law) provides that employees must be provided with written announcement 30 days prior to the General Shareholders Meeting (GMS) with regard to the business sale plan. Any objections will be settled in the GMS.
The failure to provide such information to the employees would subject the business sale to challenge by the employees.
4. Can employees be dismissed in connection with a business sale?
In a sale of shares, the employer has no right to terminate employees due to change of control. On the other hand, if a business sale is conducted by sale of assets then in the event that there is no transfer of employment agreement reached between the seller, buyer and the employees, the seller may terminate the employees upon payment of enhanced benefits with either the agreement of the employee or Labour Court approval.
5. Are employers free to change terms and conditions of employment in connection with a business sale?
In a share sale, there is no change to the employer entity or terms and conditions of employment.? In an asset sale where the employer voluntarily accepts the buyer as a successor employer, the terms and conditions of employment with the successor employer may not be identical.? As a matter of Ministry of Manpower policy, the value of salary and benefits with the successor employer should not represent a reduction.
This article appeared in the 2011 edition of The International Comparative Legal Guide to: Employment & Labor Law; published by Global Legal Group Ltd, London. 2R372YJ6AJWT
Source: http://blog.ssek.com/index.php/2011/10/a-guide-to-indonesian-employment-law-business-sales/
stevie wonder gurkha cobra starship cobra starship blue whale melissa joan hart phish
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.