A Specific Time Work Agreement (PKWT) is a form of work agreement based on Article 56 paragraph (1) of Law Number 13 of 2003 concerning Manpower and further stated in the latest regulation derived from Law Number 11 of 2020 concerning Job Creation, namely Government Regulation Number 35 2021 concerning Work Agreements for Certain Time, Outsourcing, Working Time and Rest Time and Termination of Employment.
In contrast to PKWTT (Perjanjian Kerja Waktu Tidak Tertentu – Unspecified Time Work Agreement) employee, PKWT employee experiences challenges in their employment status, because they have a predetermined time in terms of ending their work which is usually in a matter of years, in practice, there are usually one to two years. Compensation money serves the employee when their employee agreement is no longer renewed by the employer, as the name implies, compensation because they are not re-employed by the employer.
The compensation money was not regulated before Law Number 11 of 2020 concerning Job Creation. Further regulated in Government Regulation Number 35 of 2021, compensation money is given to PKWT employees who have worked for at least 1 month continuously.
The amount of compensation is regulated in Article 16 of Government Regulation Number 35 of 2021 which explains that PKWT employees that work more than 1 month to 12 months continuously are entitled to receive compensation in the number of 1 month’s wages. The wages referred to in the article are basic wages and fixed allowances.
For PKWT employees who work for more than 1 month but less than 12 months, it will be calculated proportionally by calculating the length of service (in months) divided by 12 and multiplied by one month’s wages. If the employee agreement exceeds 12 months, it will be calculated proportionally by calculating the length of service (in months) divided by 12 and multiplied by one month’s wages. Briefly, in one year of employee agreement, employees get one month’s wages as compensation.
PKWT employees resigned before the expiration of the employee agreement, are they entitled to receive compensation money?
PKWT employees who resign before the expiration of their employment agreement are still entitled to compensation money, it will still need to be considered that parties who terminate the employment agreement before the expiration of the employment agreement are charged with compensation as regulated in Article 62 of Law Number 13 concerning Manpower which explains If one party terminates the employee agreement, the party terminating the employment agreement is required to pay compensation to the other party for the number of the worker’s wages until the expiration of the employee agreement. Which is the article has not changed after the enactment of Law Number 11 of 2020 concerning Job Creation.
Compensation money is an important addition for PKWT employees that every year anxious about their employee agreements. With the addition of compensation money, the employee can get additional rights if the PKWT agreement is not extended while looking for another workplace. It is also a mandate of Law Number 11 of 2020 concerning Job Creation to employers to provide financial compensation for PKWT employees.