TAS Legal Implications of Pt Sritex Bankruptcy on Company Labor Rights

Abstract

The bankruptcy of PT Sri Rejeki Isman Tbk (Sritex) has caused significant legal implications for the rights of workers in the company. In practice, workers are often in a weaker position because the company prioritizes debt payments to creditors over the fulfillment of workers' rights such as wages and severance pay. This research investigates the legal consequences of PT Sritex's bankruptcy on workers' rights and investigates all restructuring efforts to overcome the enormous financial dilemma faced by the company. The methodology used in this research is normative legal research. The findings reveal the fact that although social and bankruptcy laws have been designed to protect workers' rights to their entitlements, in reality their rights are rarely stabilized. Due to a huge capital deficit, PT Sritex failed to fulfill its obligations to its workers. In addition, attempts at debt restructuring through a peace agreement (homologation) also failed as the company was unable to fulfill its commitments, resulting in the cancellation of the agreement by the court. This situation resulted in thousands of workers being laid off or indefinitely furloughed. Therefore, a strong legal mechanism is needed to protect workers' rights in bankruptcy situations, coupled with active government involvement in the supervision and protection of labor.