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      HomeProductsHRMWhy Can Laid-off Happen in a Company?

      Why Can Laid-off Happen in a Company?

      Generally, in a company, the correspondence process has become essential. Usually helpful in being the official messenger, and also as valid and valid evidence of information. One of which is a letter of a laid-off (termination of work). The termination letter is also essential because it is helpful as authentic evidence to end the cooperation between the company and the employee.

      This time we will discuss in full the letter of a laid-off (termination of work). Starting from the understanding, the reasons, to the tips for making it. Check out the following article for more details.


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        Definition of Laid-off

        Layoffs are a prelude to the termination of the employee’s contract with the company. In practice, an employee can decide to quit or follow the decisions made by his superiors.

        Layoffs have meaning in Manpower Law No. 13 of 2003 CHAPTER I Article 1 paragraph (25). Namely, termination of employment is the termination of the employment relationship due to a particular matter which results in the termination of the rights and obligations between the worker/laborer and the entrepreneur.

        It applies to business entities that have legal entities or not, individual businesses, partnerships, or legal entities.

        Reasons for Laid-off

        If we look at the definition of layoff itself, of course, many people don’t want that. But, even so, the company will never terminate the employment relationship with its employees unilaterally without an apparent reason because there is a regulation in state law.

        In addition, information regarding the termination of employment is not only about dismissal. But all forms of activities to terminate employment relationships such as retiring or resigning voluntarily. We need to remember that there are times when an employee’s job termination must be done to save the company. Following are the reasons behind the layoffs:

        Employees resign

        From time to time in the company, there will be employees who resign. In the dismissal process, the company can carry out when the employee fulfills the requirements to leave. Examples include submitting a written application for resignation no later than 30 days before the day of concession, not bound by official ties, continuing to carry out obligations until the day of resignation.

        Expiration of employee contract

        In dismissal, there are employees whose contract period at the company has expired. Usually, the employee who does not want to extend the contract or the company that does not provide a contract extension to the employee whose contract period has expired.

        Employees reach the maximum age limit (retirement)

        Furthermore, termination of employment can occur because employees in the company have entered retirement age. Usually, the employee is entitled to severance pay. Article 167 of the Manpower Law regulates the amount of severance pay that employees will receive.

        Employees make serious mistakes

        A company can terminate an employee who commits a serious error, such as:

        • Commit the theft, fraud, or embezzlement of goods and/or money belonging to the company to the detriment of the company.
        • Provide false or intentionally falsified information that causes a number of losses.
        • Consuming intoxicating liquor, using or distributing illegal drugs in the work environment.
        • Doing immoral acts in the work environment.
        • Persecute, attack, threaten, or intimidate co-workers in the work environment.
        • Persuade colleagues to perform a series of actions that are contrary to state laws and regulations.
        • Deliberately damaging or leaving the property of the company/colleagues in danger, causing a number of losses.
        • Committing other disgraceful acts within the company and threatened with imprisonment for a minimum of five years or more.

        Even though it has support from the labor law, the company must have substantial evidence before closing the company. Therefore, require the company to check the integrity of the serious mistakes that the employee committed.

        The company went bankrupt

        If the company has experienced continuous losses in the last two years, the company can be declared closed or bankrupt. This can be proven by looking at reports or audits from public accountants. And requires companies to lay off their employees. However, employees who experience termination of employment are entitled to one-time severance pay, one-time service award, and compensation.

        Employees continue to be absent

        The company will have the right to terminate the employment of its employees if they are absent from work for five consecutive days without written information or legal evidence. Not to forget, before closing work, the company must first give the employee a warning twice. Then, if there is still no response, the company has the right to issue a termination letter to the employee.

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        Employee dies

        The working relationship between the company and the employee can end immediately if the employee dies. And the company must give money to the family twice severance pay, one-time service award, and compensation for entitlements.

        Make your company’s human resource management more easily by using HRM Software from HashMicro.

        Tips for Submitting Laid-off

        If we want to terminate the work of both the employee and the company, we must do some ethics so that no party becomes unhappy. , Therefore, although in practice layoffs are not fun, it is necessary to implement them. Here are tips for submitting layoffs:

        Making a good beginning of the conversation

        Before submitting layoffs, it would be nice if we had an excellent initial conversation. Then, of course, to lighten the mood before getting into a deeper conversation. In addition, explaining the reasons for doing layoffs also needs to be considered so that the termination of work can run smoothly.

        There was a plan to stop long ago

        In submitting layoff, we must carefully think out the plan in advance. Therefore, it is essential to have a long-term retirement plan to terminate work unanimously and well thought out. So that later, the reason that will be given is strong enough, and there will be no regrets at the end.

        Maintain good relationship with company

        Maintaining a good relationship with the company is also quite important. So before conveying your dismissal, it is important to say sorry and thank you. It aims to maintain good relations with the company because we don’t know if we make mistakes while working there and are grateful to work for the company.

        Try Document Software from HashMicro for document related work to save more time to handle it.


        That’s all about the laid-off. From this discussion, we come to know that the termination of employment is not always from the company, but many other factors that allow the cessation of work both from the company and the employee.

        All human resource management activities, such as job termination, by using the software. In addition, HashMicro provides HRM software for companies that need to automate HR management within the company. Click here to try the demo now.

        Chandra Natsir
        Chandra Natsir
        A content writer with a strong interest in writing and technology. Chandra is dedicated to writing useful, entertaining, and relevant information for readers, and he continues to develop content that connects and inspires them.

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