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Binding Employment Contract for Indonesia

Binding Employment Contract Template for Indonesia

A comprehensive employment agreement governed by Indonesian law, specifically compliant with Law No. 13 of 2003 (Manpower Law) and related employment regulations. This document establishes the formal employment relationship between employer and employee, detailing essential terms including position, duties, compensation, benefits, working hours, leave entitlements, and termination provisions. The contract incorporates mandatory Indonesian labor law requirements, including statutory benefits, social security provisions (BPJS), and worker protections, while allowing for customization based on specific employment circumstances and industry requirements.

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What is a Binding Employment Contract?

The Binding Employment Contract serves as the foundational document establishing the employment relationship under Indonesian law. It is essential for any formal employment arrangement in Indonesia, whether for permanent or fixed-term positions, and must comply with Law No. 13 of 2003 (Manpower Law) and related regulations. This document is typically used when hiring new employees, converting temporary workers to permanent status, or updating employment terms in compliance with current legislation. The contract covers mandatory provisions required by Indonesian law, including working conditions, remuneration, benefits, and termination procedures, while allowing for customization based on specific role requirements and industry standards. It protects both employer and employee interests by clearly defining rights, obligations, and expectations within the framework of Indonesian employment law.

What sections should be included in a Binding Employment Contract?

1. Parties: Identification of the employer and employee, including their legal names, addresses, and registration details

2. Background: Brief context about the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Position and Duties: Employee's job title, role, responsibilities, and reporting structure

5. Term of Employment: Duration of employment (permanent or fixed-term) and effective date

6. Working Hours and Location: Standard working hours, work location, and overtime provisions

7. Remuneration: Base salary, payment schedule, and method of payment

8. Benefits: Mandatory benefits including BPJS coverage, healthcare, and other statutory benefits

9. Leave Entitlements: Annual leave, sick leave, religious holiday leave, and other statutory leave provisions

10. Confidentiality: Protection of company confidential information and trade secrets

11. Termination: Grounds for termination, notice periods, and severance payment provisions

12. Governing Law: Confirmation of Indonesian law as governing law and dispute resolution procedures

13. Entire Agreement: Standard boilerplate confirming this as the complete agreement between parties

What sections are optional to include in a Binding Employment Contract?

1. Probation Period: Terms of probationary period - used for permanent employees when a probation period is desired (maximum 3 months under Indonesian law)

2. Non-Competition: Post-employment restrictions - used for senior positions or roles with access to sensitive information

3. Intellectual Property: IP ownership and assignment - used for creative or technical roles

4. Mobility Clause: Provisions for potential relocation - used when employee may need to work in different locations

5. Commission Structure: Details of sales or performance-based compensation - used for sales or commission-based roles

6. Training Requirements: Mandatory training and development obligations - used when specific qualifications or training are required

7. Work From Home Provisions: Remote working arrangements - used when allowing flexible working locations

What schedules should be included in a Binding Employment Contract?

1. Schedule 1 - Job Description: Detailed description of roles, responsibilities, and performance expectations

2. Schedule 2 - Compensation Details: Breakdown of salary components, allowances, and benefits

3. Schedule 3 - Company Policies: Key company policies that form part of the employment terms

4. Schedule 4 - Confidential Information: Specific list of information considered confidential

5. Appendix A - Required Documents: List of documents employee must provide (e.g., certifications, permits)

6. Appendix B - Statutory Benefits: Details of all statutory benefits and social security provisions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions





























Clauses



































Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Education

Professional Services

Mining

Construction

Hospitality

Agriculture

Telecommunications

Energy

Transportation

E-commerce

Relevant Teams

Human Resources

Legal

Finance

Operations

Sales

Marketing

Information Technology

Research and Development

Customer Service

Administration

Business Development

Product Development

Quality Assurance

Procurement

Corporate Communications

Relevant Roles

Chief Executive Officer

Managing Director

General Manager

Department Head

Senior Manager

Project Manager

Software Engineer

Financial Analyst

Human Resources Manager

Marketing Executive

Sales Representative

Administrative Assistant

Operations Manager

Research Analyst

Product Manager

Customer Service Representative

Technical Specialist

Account Manager

Legal Counsel

Business Development Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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