The Confederation of Indonesian Trade Unions (KSPI) is planning to file a citizen lawsuit against the Indonesian government and the executives of textile company  PT Sri Rejeki Isman (Sritex) over recent massive layoffs in the company which the unions claim as violating labor laws.

KSPI President, Said Iqbal, said that the termination of thousands of Sritex workers due to the company's bankruptcy is illegal and contradicts the latest ruling of the Constitutional Court (No. 168/PUU-XXI/2023) and Indonesia’s current labor laws.

He cited that the company did not hold proper negotiations between the labor union and management, nor did it involve mediators from the Ministry of Manpower prior to terminating the workers’ contract. Workers were instead asked individually to register for termination, which raises concerns about intimidation and a lack of transparency regarding their severance pay.

Employees also were not given the opportunity to reject the layoffs through formal mediation. Instead, they were led into emotional public events with no clear resolution on their severance pay and entitlements.

KSPI accuses the Ministry of Manpower, along with regional labor offices, has failed to intervene effectively, calling them unable to protect the workers.

”The layoffs affect not only Sritex employees, but also workers in its subsidiaries and supply chain networks, including those in raw material supply, logistics, and food services. The total number of affected individuals could reach hundreds of thousands,” Iqbal, who is also chairman of Labor Party, said in a statement on Sunday, March 2 ,2025.

There is no transparency regarding how much money will be generated from selling Sritex’s assets and how it will be distributed to workers. Iqbal questioned whether labor unions are involved in the liquidation process, fearing that assets could be sold at low prices while workers receive minimal compensation.

The workers’ contract termination also happened right before Ramadan, a period when workers need additional income to support their families. The timing is seen as a deliberate attempt to weaken workers’ bargaining power.

Laid-off workers have been advised to withdraw their Old Age Security (JHT) and Job Loss Insurance (JKP) benefits as a substitute for severance pay, even though many wish to dispute their termination. The requirement for the workers to show their employment certificates in order to withdraw those funds has forced the workers to accept their dismissal without resistance.

Iqbal said the Labor Party and KSPI will establish a legal aid center to support Sritex workers in challenging their layoffs and securing their severance pay, religious holiday allowance (THR), and other entitlements. They will file a citizen lawsuit at the Central Jakarta District Court against key government officials, including the Coordinating Minister for the Economy, the Minister of Industry, the Minister and Deputy Minister of Manpower, and the Minister of Investment, as well as Sritex executives.

They will also set up a special task force to monitor the company’s assets and prevent them from being sold at undervalued prices without securing workers’ rightful compensation.

Iqbal emphasized that the government must not abandon workers in this crisis. He also warned that certain business and government figures might be conspiring to take over Sritex’s assets at a low cost while leaving workers without fair compensation.

“Until the company’s assets are fully liquidated, workers must continue receiving their wages. This is about justice and legal certainty,” he said.