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04 March 2025

Sritex Workers Demand Severance Pay Amid Bankruptcy Crisis

Labor union calls on parliament for urgent assistance to secure workers' rights

Jakarta - The labor union representing workers of PT Sri Rejeki Isman, commonly known as Sritex, is seeking urgent assistance from the Indonesian parliament to push for the immediate payment of severance benefits for employees affected by the company's recent layoffs. This demand arises as Sritex, which has been forced to filed for bankruptcy by the Semarang District Court, leaves over 10,660 workers facing uncertainty and financial distress.

On March 4, 2025, during a press conference held at the parliament complex in Jakarta, the union's coordinator, Slamet Kaswanto, articulated their position, stating, "No longer related to THR and so on. The matter of termination must be resolved." This statement plainly calls attention to the necessity for the company to fulfill its obligations to terminated employees, emphasizing the importance of resolving the issue of severance payments.

According to Kaswanto, the responsibility for handling the company's financial obligations now lies with the receiver team, following the court's ruling on Sritex's bankruptcy. He insisted on the urgency of not only settling termination benefits but also handling backlog issues related to the major holiday payments, known locally as THR, which should also be dispatched to the employees.

"We are trying to provide termination of employment defense according to the rules of the law," reiterated Kaswanto, emphasizing the need for the rights of workers to be respected as Sritex navigates its legal troubles. His call is not just about the mechanics of payment but also about ensuring the well-being of the workforce during this tumultuous time.

The labor union has also reached out to the Ninth Commission of the People's Representative Council (DPR), requesting their support to coordinate with BPJS Ketenagakerjaan, which oversees employment and social security matters. They are advocating for the rapid and efficient processing of severance claims and unemployment insurance for the laid-off workers. Kaswanto revealed, "This is actually very urgent, as we have already noted the increasing number of job seekers wandering to BPJS. Just recently, 100 to 200 jobs were opened, but if 10,000 people are heading there, the administration must be expedited. JHT is our asset."

This issue gained urgency as many workers depend heavily on these benefits, particularly as they face layoffs just before the fasting month of Ramadan, which typically brings additional financial burdens. The labor union's efforts are directed at ensuring the rights of workers are maintained, attempting to secure health coverage for up to six months post-layoff, starting from the time of Sritex's permanent closure on February 26, 2025. The workers have received no claims since the bankruptcy declaration was finalized.

Slamet Kaswanto expressed discontent over the bureaucratic delays and stressed: "Therefore, these three things we want to convey, namely, the fulfillment of the rights of the workers will be secured. We respect the decisions of the law, but our sentiment is not good just two days before fasting. It is imperative to show THR rights." This heartfelt plea underlines the difficult position of tens of thousands of families who have relied on Sritex for their livelihoods and now face the uncertainty of unemployment.

While the situation at Sritex presents significant challenges, it also calls attention to broader issues within Indonesia's labor market, particularly concerning companies facing financial difficulties. The case highlights the necessity of mechanisms to protect workers' rights during corporate bankruptcy, as well as the roles of unions and government bodies in safeguarding these rights.

The future for the laid-off Sritex employees remains uncertain as they await legislative support and swift action from the company's management. Until then, the labor union's advocacy will continue, pushing for accountability and prompt action to secure the rights and benefits of workers who contributed to the company's fortunes over the years.

It is hoped the Indonesian parliament will respond positively to their pleas, working with Sritex's management and the bankruptcy receivership to facilitate the payments due to employees, ensuring their dignity and basic human rights are respected even amid corporate turmoil. Such measures will not only alleviate individual hardship but could also have broader implications for labor relations across Indonesia.