Reinforcing Non-Discrimination and Fair Recruitment in Indonesia
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Indonesian laws have long recognized the principles of non-discrimination and the right of every employee to be treated fairly and equitably in the workplace as in accordance with the 1945 Constitution of the Republic of Indonesia (“1945 Constitution”), as well as the laws regulating on manpower and human rights.
These provisions also affirm each individual’s constitutional right to work. However, in practice, discriminatory practices from employers/companies persist especially in the recruitment processes where age or appearance-based requirements are an important hiring factor. Another relevant issue is the unauthorised withholding of employees’ educational certificates by some employers, as many companies continue to treat the submission of original diplomas or personal documents as a condition for employment or as a form of collateral. This practice unfairly disadvantages employees, as it creates a power imbalance in the employment relationship and places an undue burden on employees.
In response to such issues, the Minister of Manpower (“MoM”) has issued several circular letters to provide clearer and more uniform enforcements to mitigate such recruiting practices through the Circular Letter No. M/5/HK.04.00/V/2025 concerning the Prohibition on Withholding Educational Certificates and/or Personal Documents of Workers by Employers (“MoM CL No 5/2025”) and the MoM Circular Letter No. M/6/HK.04/V/2025 concerning the Prohibition on Discrimination in Workers Recruitments Process (“MoM CL No 6/2025”).
In this edition of our ARMA Update, we examine the essential provisions of these circulars and their legal implications, highlighting the government’s strengthened commitment to non-discrimination and the prohibition on withholding employees’ educational certificates or personal documents.
Prohibition on Discrimination in Workers Recruitments Process
The right of every individual to access employment opportunities free from discrimination is considered as a fundamental principle under Indonesian law, as affirmed in several key legal provisions:
Article 28D paragraph (2) of the 1945 Constitution provides: “Every person shall have the right to work and to receive fair and proper remuneration and treatment in employment relationships.”
Article 31 of Law Number 13 of 2003 concerning Manpower as last amended by Law Number 6 of 2023 stipulating Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation and the Constitutional Court Decision Number 168/PUU-XXI/2023, states: “Every worker shall have the right and equal opportunity to choose, obtain, or change jobs and to earn a decent living either within the country or abroad.”
Article 38 paragraph (2) of Law No. 39 of 1999 on Human Rights, and its amendments, mandates: “Every person shall have the freedom to choose the work they prefer and shall also have the right to fair employment conditions.”
Collectively, these provisions establish a strong legal foundation affirming equal and fair access to employment for all individuals. This principle is further reinforced by the issuance of the MoM CL No 6/2025, which primarily sets out the following provisions:
Every citizen has the right to employment and to a decent standard of living in accordance with human dignity.
The circular reiterates the constitutional guarantee that every citizen has the right to access employment opportunities and to earn a livelihood in a manner consistent with human dignity. It serves as the foundational principle for fair labour practices in Indonesia.
Employers are prohibited from engaging in any form of discrimination during the recruitment process.
By explicitly prohibiting all forms of discrimination (including based on age, gender, ethnicity, religion, or physical appearance), this point mandates objective and merit-based recruitment practices. It seeks to eliminate bias and promote inclusivity in the hiring process.
Age requirements in the recruitment process may only be applied if there are specific justifications, under the following conditions:
- For jobs or positions that, by their nature or characteristics, clearly affect an individual's ability to perform the work; and/or
- Such requirements must not result in the loss or reduction of opportunities to gain employment.
Thus said, MoM CL No 6/2025 permits the use of age-based criteria only in exceptional circumstances, specifically when the nature or characteristics of the job genuinely affect an individual’s ability to perform the role. Age limits must therefore be functionally justified, such as in physically demanding positions and must not be imposed arbitrarily. Additionally, such criteria must not lead to a reduction in employment opportunities, thereby ensuring that recruitment remains inclusive and fair. This reflects a broader commitment to equal opportunity and the elimination of unjustified barriers in the hiring process.
The prohibition against discrimination and the provisions concerning age requirements in the recruitment process, as outlined above, shall apply equally to job seekers with disabilities.
This provision ensures that job seekers with disabilities receive the same protection under anti-discrimination and age requirement policies. It aligns with broader efforts to promote inclusive recruitment and workplace diversity in line with disability rights legislation.
Prohibition on Withholding Personal Documents of Workers by Employers
Although employee rights are generally protected under the Manpower Law, there have been no specific regulations issued by the MoM that explicitly govern the withholding of employee educational certificates or personal documents. As a result, many employers have taken advantage of this regulatory gap. Numerous media reports highlight ongoing cases where companies continue to retain employees’ personal documents.
This practice severely limits employees’ mobility, as they face difficulties applying for new jobs or continuing their education and it directly contradicts existing regulations safeguarding the right of employees to seek new employment opportunities. In response, several regional governments have issued specific regulations prohibiting such actions, including East Java Regional Regulation (Perda) No. 8 of 2016 on Employment Administration and Central Java Governor Circular Letter No. 560/00/9350 dated 23 November 2016 on Withholding Employee Diplomas, both of which impose administrative and criminal sanctions.
More recently, the issue has gained national attention, prompting the MoM to issue a nationwide policy through the MoM CL No 5/2025 which sets out the following provisions:
Employers are prohibited from requiring or withholding educational certificates and/or personal documents of workers as a condition of employment. Such personal documents include, but are not limited to, original competency certificates, passports, birth certificates, marriage certificates, and vehicle ownership documents.
The circular letter essentially addresses a common issue in the employment practice, where employers often withhold employees’ diplomas and/or other personal documents as a means to discourage them from seeking employment elsewhere. With the issuance of this circular, companies now have a clear regulatory reference that prohibits the arbitrary withholding of employee credentials.
Employers are prohibited from obstructing or hindering workers in seeking and obtaining better employment opportunities.
This policy aims to ensure that employees can freely pursue better employment opportunities without undue interference from their current employers, particularly in cases where personal documents are withheld as collateral.
Prospective and current workers are advised to carefully review and understand the contents of the employment agreement, particularly if it includes provisions requiring the submission of educational certificates and/or personal documents as a condition of employment.
In addition to prohibiting employers from withholding such documents, the circular also encourages prospective and current employees to be more vigilant in reviewing the terms of their employment contracts, company regulations, or collective labour agreements, particularly with respect to any provisions regarding the retention of personal documents.
In the event of a legally justified urgent need that requires the submission of educational certificates and/or competency certificates by the employee to the employer, this may only be allowed under the following conditions:
- The educational or competency certificate was obtained through education and training funded by the employer under a written employment agreement.
- The employer must guarantee the safety of the educational certificate and/or competency certificate in its custody and shall be liable to compensate the employee in case such documents are lost or damaged.
That said, the prohibition is not absolute. The circular recognizes that in certain justified circumstances, employers may retain an employee’s diploma or competency certificate. This is permitted only if the two conditions above are met.
ARMA Law’s Analysis:
In essence, both circular letter serves as a reaffirmation that the right to work is a constitutional right of every citizen, and every individual is entitled to work and to freely choose employment that aligns with their capabilities. The circular letter also aims to provide protection for employees to obtain decent work and livelihoods based on the principle of non-discrimination in the recruitment process.
It is important to note, however, that the circulars are not legally binding in a general sense and does not impose formal sanctions for violations. Nevertheless, it may be cited as a legal or moral basis by the Manpower Office (Disnaker) or labour unions in rejecting provisions proposed in company regulations or collective labour agreements for detaining employee’s personal documents.
Employers and employees alike may also rely on the content of such circulars as the basis of their arguments before a Mediator, with the aim of having the circular’s substance reflected in the mediator’s recommendation. Additionally, the circular may also be relied upon in resolving disputes arising from discriminatory practices in the workplace.
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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