Parbuntian Sinaga
Faculty of Law, Krisnadwipayana University, Jakarta, Indonesia

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Legal Uncertainty in Retirement-Based Termination of Employment in Indonesia: A Normative-Empirical Analysis of Workers’ Pension Rights and the Tripartite Legal System David Torang Maruli Manalu; Cita Citrawinda; Parbuntian Sinaga; Anwar Budiman
Journal of Islamic Studies & Social Science Vol. 3 No. 1 (2026): Journal of Islamic Studies & Social Science (JISSS)
Publisher : Madani Connection

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.64019/jisss.v3i1.88

Abstract

This study examines specific legal uncertainties concerning workers’ rights in termination of employment due to retirement in Indonesia, particularly the absence of explicit regulation on workers’ right to initiate retirement, ambiguity in compensation calculation and payment mechanisms, and the weakened protection following regulatory changes under Government Regulation No. 35 of 2021. Existing studies have largely discussed pension protection from economic or policy perspectives, while limited attention has been given to the interaction between normative ambiguity, judicial interpretation, and empirical industrial relations practices. This study addresses that gap by combining normative juridical and empirical juridical approaches. The legal materials analyzed include the 1945 Constitution of the Republic of Indonesia, Law No. 13 of 2003 on Manpower, Law No. 6 of 2023, Government Regulation No. 35 of 2021, regulations on pension security and industrial relations dispute settlement, as well as selected decisions of the Industrial Relations Court and the Supreme Court concerning retirement-based termination disputes. Empirical data were obtained through interviews with workers, employers, government officials, employer associations, and labor union representatives. The findings show that legal uncertainty arises from the employer-centered formulation of retirement-based termination, the lack of clear recognition of worker-initiated retirement, inconsistent interpretation of pension fund contributions in compensation calculations, weak execution of court decisions, and the limited effectiveness of bipartite, mediation, and tripartite mechanisms. These conditions place workers in a weaker bargaining position and often compel them to pursue lengthy litigation to obtain retirement entitlements. The study’s original contribution lies in proposing a tripartite regulatory reform model that explicitly recognizes workers’ right to apply for retirement, standardizes retirement compensation and payment procedures, strengthens state supervision and enforcement, and institutionalizes coordinated tripartite oversight through a specialized labor pension mechanism. Such reform is necessary to transform retirement-related termination from a dispute-prone employer prerogative into a legally certain, enforceable, and equitable workers’ rights framework.