SOROTAN Vol. XXIII/4/2014 - page 78

TAXES
LAW
Kudri & Djamaris, Attorneys – Counsellors at Law
Mergers & Acquisitions
Implication of Merger to Employee
New Indonesian Copyright Law
A decision of top management to perform merger always raises a
direct impact to employees (workers), moreover when the type of
merger is a horizontal merger, in which the merger is conducted by
companies that have the same business activities, it will certainly
bring an impact on streamlining of the structure of human resources
to the companies. Accordingly, Law No. 40 of 2007 on Limited
Liability Company (“Company Law”) and Law No. 13 of 2003
on Manpower (“Manpower Law”) have contained the provisions
concerning the protection of the rights of employee as the result
of merger.
Prior to the merger, a Merger Plan must be initially prepared. Such
Merger Plan must also include the settlement procedures of the
status, rights and obligations of employees of the companies as
a merger must be performed, among others, with due regard to
the interest of the employees. A summary of the approved Merger
Plan must also be announced in writing to the employees no later
than 30 (thirty) days prior to the notice for General Meeting of
Shareholders. Such notice is aimed at providing an opportunity to
the parties concerned including the employees to know the Merger
Plan.
A merger will certainly have the impact to the employees. For that
reason, Manpower Law provides a protection to employees’ right in
a merger transaction. In the event of a merger, employees may opt
to not continuing working with the surviving company. In such a
case, the employees are still entitled to receive severance pay, service
reward pay and compensation respectively in an amount equal to
1 (one) time of the formula as stipulated in Article 156 paragraphs
(2), (3) and (4) of the Manpower Law. It is also possible, however,
that the employees are not accepted to continue working with the
surviving company. In this case the Manpower Law provides that the
employees are entitled to receive severance pay in an amount equal
to 2 (two) time of the formula as stipulated in Article 156 paragraph
(2) as well as service reward pay and compensation respectively in
an amount equal to 1 (one) time of the formula as stipulated in
Article 156 paragraphs (3) and (4) of the Manpower Law.
Another implication of merger to employees is in relation to the
collective labor agreement (CLA). If both the merging and surviving
companies have CLAs, then the prevailing CLA shall be the one that
is more beneficial to the employees. In case it is only one company
that has the CLA while the other does not have a CLA, then the
existing CLA shall apply to the surviving company until the CLA
expires.
The Republic of Indonesia has just issued a New Copyright Law
with the enactment of Law No. 28 of 2014 concerning Copyright.
The New Copyright Law repeals the previous Copyright Law,
namely Law No. 19 of 2002 concerning Copyright (the “
Old
Copyright Law
”).
The New Copyright Law makes some significant changes to the
Old Copyright Law, among others, concerning the period of
copyright protection. If the copyright protection was previously
given for a period of the creator’s lifetime and continue for 50
years after the death of the creator then under the New Copyright
Law, the current period of certain copyright protection has been
extended for a period of creator’s lifetime and continue for 70
years after the death of the creator, unless the work is owned or
held by a legal entity in which the period of copyright protection is
valid for 50 years as from the first publication. In addition, the New
Copyright Law provides a better protection on the economic right
of creator and/or owner of right related to copyright by giving the
restriction on transfer of economic right in the form of sold flat
(
Jual Putus
). The copyright of the work transferred in the form of
sold flat agreement and/or transfer for indefinite period will revert
to the creator when the agreement has already achieved a period
of 25 years.
Furthermore, if the Old Copyright Law did not expressly stipulate
whether or not the copyright can be an object of
fiducia
security,
then with the New Copyright Law, it is clearly stipulated in Article
16 Paragraph 3 of New Copyright Law that the copyright is
an object of
fiducia
security. Additionally, pursuant to the New
Copyright Law, the Minister of Law and Human Right is authorized
to delete a registered work/creation, if it turns out that the work
violates moral norm, public order, defense and security of state or
the law and regulations.
Another important stipulation in this New Copyright Law is
Management of Collective Right. Management of Collective
Right is a non-profit legal entity authorized by creators, copyright
holders and/or owners of right related to copyright to manage
their economic rights in the form of collecting and distributing
royalty.
Intellectual Property and Brand Protection
Fadriyadi Kudri, S.H., LL.M.
Partner
+62 21 5225453
Defrizal Djamaris, S.H.
Partner
+62 21 522 5453
+62 815 935 0426
Dec 2014
I
Edition 2
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