A Demotion Letter To Employee is a crucial document used when an organization needs to formally downgrade an employee's position, responsibilities, or employment terms in Indonesia. This document must comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and its amendments under the Job Creation Law No. 11 of 2020. The letter is typically issued following performance issues, organizational restructuring, or other valid business reasons. It contains essential information including the reason for demotion, new position details, revised compensation structure, and effective date of changes. The document serves as both a legal record and formal communication tool, requiring careful drafting to ensure compliance with local employment regulations and to minimize potential disputes. It should be presented professionally and requires proper acknowledgment from the employee to ensure transparency and legal validity.
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1. Letter Header: Company letterhead, date, reference number, and formal addressing to the employee
2. Employee Information: Full name, employee ID, current position, and department
3. Subject Line: Clear indication that this is a demotion notice
4. Demotion Decision: Clear statement of the demotion decision and its effective date
5. Reason for Demotion: Specific, factual explanation of why the demotion is necessary
6. New Position Details: Title, department, and reporting structure of the new position
7. Changes in Terms: New salary, benefits, and any other changes to employment terms
8. Legal Compliance Statement: Statement confirming compliance with Indonesian labor laws
9. Acknowledgment Section: Space for employee signature acknowledging receipt of the letter
1. Performance Review Summary: Include when demotion is performance-based, summarizing key performance issues
2. Improvement Plan: Optional section outlining expectations and support for improvement in new role
3. Appeal Rights: Information about the employee's right to appeal the decision, if applicable
4. Probationary Period: Details of any probationary period in the new position, if applicable
5. Organizational Context: Include when demotion is due to restructuring or organizational changes
6. Retention of Benefits: Section specifying any special arrangements for maintaining certain benefits
1. New Job Description: Detailed description of responsibilities and requirements of the new position
2. Performance Documentation: Copies of relevant performance reviews or incidents (if performance-based)
3. Organizational Chart: Updated organizational structure showing the new position
4. Revised Employment Terms: Detailed breakdown of all changes to employment terms and conditions
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