The Minister of Manpower issued Circular Letter No. M/5/HK.04.00/V/2025 on the Prohibition to Withhold Employees’ Diploma and/or Personal Documents (“Circular Letter 5/2025”) dated 20 May 2025, and Circular Letter No. M/6/HK.04/V/2025 on the Prohibition on Discrimination During Recruitment Process dated 28 May 2025 (“Circular Letter 6/2025”). While these Circular Letters are not legally binding under the Indonesian legal hierarchy, they carry persuasive authority and serve as official guidance for regional government officials when dealing with the matters.
This newsletter aims to assist you in reviewing and, where necessary, updating your human resources policies in line with the principles set out in the Circular Letters, which key points are summarized as follows:
- Circular Letter 5/2025
- Prohibition to Withold Employees’ Diploma and any Personal Documents
The Circular Letter prohibits employers to withhold the original of the employees’ diploma and/or any personal documents, including for example: competency certificate, passport, birth certificate, marriage certificate, or even vehicle ownership certificate. Exemptions to this prohibition may apply only under strictly limited circumstances of:- there is an urgent need that is legally justified, such as a service-bound (ikatan dinas) that involves significant investment by the employer in the employee’s education or training;
- the employees’ education or training was funded by the employer based on a written employment agreement that clearly stipulates such an arrangement; and
- the employers guarantee the safekeeping of employees’ diplomas or competency certificates and must compensate employees if the documents being withheld are damaged or lost.
To mitigate future legal risk, employers should return any personal original documents or diplomas currently in their possession if (i) there is no legally justified urgent need, (ii) there is no written agreement underlies the documents retention, or (iii) the employer did not fund the relevant education or training. Otherwise, the parties should sign an amendment agreement to arrange the safekeeping by the employers. For future employment arrangements, employers should consider including a contractual clause that permits temporary retention of relevant documents in exchange for training support with due observance to the three conditions above.
- Prohibition on Obstructing Employment Opportunities
Another context emphasized by the Circular Letter 5/2025 is prohibition for employers to obstruct employment opportunities for their employees. To mitigate risk of dispute or legal challenge, it is essential for businesses to ensure that the non-competition clause under the employment contract is carefully drafted.
- Prohibition to Withold Employees’ Diploma and any Personal Documents
- Circular Letter 6/2025
To ensure equality for job seekers, Circular Letter 6/2025 allows companies to set an age limit requirement in the recruitment process only when the age element and the job characteristics directly impact a person’s ability to perform the work, for example: security personnel. However, any age limit requirement must not diminish employment opportunities.With the above, employers should provide justifiable reasons when adding the age limit as one of requirements in the recruitment process, e.g., the job requires certain physical and mental capabilities, all with due observance to statutory age requirement such as the minimum working age limitation set under Article 68 vide Article 69 of Law No. 13 of 2003 concerning Manpower.
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