THE ABSOLUTE COMPETENCE OF COURTS TO ADJUDICATE POST-EMPLOYMENT NON-COMPETE CLAUSES (A STUDY OF JUDGMENT NUMBER 41/PDT/2020/PT.DPS)

Nafa Nur Faiza; Ahmad Nailul Author

doi:10.26740/ijllir.v3i01.58704

Authors

Nafa Nur Faiza Universitas Negeri Surabaya
Ahmad Nailul Author Universitas Negeri Surabaya

DOI:

https://doi.org/10.26740/ijllir.v3i01.58704

Keywords:

Non-compete clause, Industrial Relations Court, industrial relations dispute

Abstract

A non-compete clause is a provision in an employment agreement that restricts an employee from working for or operating a business similar to that of the employer after the employment relationship ends. While intended to protect the employer's business interests, the application of such a clause potentially limits the employee's right to employment and raises issues regarding the absolute jurisdiction of judicial bodies in resolving related disputes. This study aims to analyze the absolute jurisdiction of judicial bodies to adjudicate matters concerning non-compete clauses under prevailing laws and regulations, as well as to analyze the measures taken by employees and employers to uphold their respective rights when such clauses are present. This is a normative legal study employing statutory, conceptual, and case-based approaches. The legal materials utilized comprising primary, secondary, and tertiary sources were analyzed using a prescriptive method. The findings indicate that conflicts arising from the breach of a non-compete clause essentially constitute a violation of rights, as they stem from the implementation of an employment agreement. Consequently, pursuant to Law Number 2 of 2004 concerning the Settlement of Industrial Relations Disputes, the absolute jurisdiction to hear and adjudicate such cases lies with the Industrial Relations Court. Furthermore, balancing the rights of employees and employers regarding non-compete clauses requires drafting proportional provisions specifically by defining reasonable timeframes, geographical areas, and scopes of work and providing compensation to the employee for the duration the clause remains in effect. Such arrangements are essential to ensure legal certainty, protect the employer's business interests, and safeguard the employee's right to work and a decent livelihood

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