Settlement of industrial relations disputes are explicitly regulated in our law, namely Law No. 2 of 2004 on Settlement of Industrial Relations Disputes (“Law 2/2004”). One of the types of industrial relations disputes is the employment termination dispute.

According to Article 3 jo. Article 4 jo. Article 5 of Law 2/2004, the initial step is to undergo bipartite negotiation between the parties, which if unsuccessful, the parties shall undergo either conciliation or arbitration, whereas if it fails, a lawsuit to the Industrial Relation Court may be done. Controversially, Article 82 of Law 2/2004 regulates that the lawsuit on employment termination may only be done within 1 (one) year since the notification of the decision from the employer.

Many are concerned since the pre-litigation mechanism usually take much time and a period of 1 (one) year is not sufficient enough. It is the primary reason as to why Article 82 of Law 2/2004 was applied for a judicial review at the Constitutional Court.

Hence, on 17^th September 2025, the Constitutional Court ruled on Decision No. 132/PUU-XXIII/2025, that the reviewed article violates the 1945 Constitution of the Republic of Indonesia and is conditionally non-binding unless interpreted that the lawsuit may only be done within 1 (one) year since the failure of agreement on mediation or conciliation step. This decision can be viewed as a very considerate step for the advancement of industrial relations in Indonesia, where many industrial relations dispute are pretty much inevitable.