The Termination Employment Contract is a crucial document used in Indonesia when ending an employment relationship, whether through mutual agreement, unilateral termination, or due to specific circumstances outlined in Indonesian labor law. This document must strictly comply with Law No. 13 of 2003 on Manpower (as amended by Job Creation Law No. 11 of 2020) and related regulations, including Government Regulation No. 35 of 2021. It serves as a comprehensive record of the termination terms, including severance calculations, final settlements, and post-employment obligations. The agreement is essential for protecting both employer and employee interests, ensuring proper documentation of the separation process, and preventing future disputes. It should be prepared with careful attention to mandatory notice periods, statutory entitlements, and specific requirements based on the termination grounds.
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1. Parties: Identification of the employer and employee, including their complete legal names, addresses, and positions
2. Background: Brief overview of the employment relationship, including start date, position, and reference to original employment agreement
3. Definitions: Key terms used throughout the agreement, including but not limited to Termination Date, Final Settlement, and Severance Package
4. Termination Date: Clear specification of the last day of employment and any notice period requirements
5. Grounds for Termination: Specific legal basis for termination under Indonesian law and any relevant circumstances
6. Financial Settlement: Detailed breakdown of all payments including severance pay, service pay, and compensation rights as per regulations
7. Company Property: Requirements for return of company assets, documents, and intellectual property
8. Confidentiality Obligations: Ongoing obligations regarding confidential information post-employment
9. Final Release: Mutual release of claims following settlement payment
10. Governing Law: Confirmation of Indonesian law as governing law and relevant jurisdiction
1. Garden Leave: Used when employee is required to serve notice period away from office while remaining on payroll
2. Non-Competition: Include when there are post-employment restrictions on working with competitors
3. Misconduct Acknowledgment: Required in cases where termination is due to proven misconduct
4. Resignation Letter: Include in mutual separation agreements where formal resignation is part of the arrangement
5. Reference Letter: Terms regarding the provision of employment references
6. Training Cost Recovery: Include when there are outstanding training costs to be recovered from employee
7. Outstanding Loans: Used when there are company loans to be settled as part of termination
1. Schedule 1 - Severance Calculation: Detailed calculation of severance pay, service pay, and other entitlements as per Indonesian regulations
2. Schedule 2 - Company Property List: Itemized list of company property to be returned
3. Schedule 3 - Final Settlement Statement: Comprehensive statement showing all payments and deductions
4. Appendix A - Handover Checklist: Detailed checklist for handover of work responsibilities and documents
5. Appendix B - Clearance Form: Internal clearance form from various departments
6. Appendix C - Benefits Settlement: Details of settlement of benefits including health insurance, pension funds, and other benefits
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Technology
Financial Services
Retail
Healthcare
Education
Construction
Mining
Agriculture
Hospitality
Professional Services
Telecommunications
Transportation
Energy
Real Estate
Relevant Teams
Human Resources
Legal
Compliance
Industrial Relations
Senior Management
Finance
Administration
Operations
Employee Relations
Relevant Roles
HR Director
HR Manager
Legal Counsel
Company Secretary
Chief Executive Officer
Managing Director
Department Head
Line Manager
Compliance Officer
Industrial Relations Manager
Human Resources Business Partner
Employee Relations Manager
Chief Operating Officer
Regional Director
General Manager
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