The Employment Contract serves as the primary legal document establishing an employment relationship in Indonesia. It is essential for formalizing employment terms while ensuring compliance with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and the recent Omnibus Law reforms. This document is required whenever a company hires an employee in Indonesia, whether on a permanent (PKWTT) or fixed-term (PKWT) basis. The contract must be written in Indonesian language (with optional English translation) and include mandatory provisions regarding working conditions, compensation, benefits, and termination terms. It protects both employer and employee interests while ensuring adherence to minimum labor standards, social security requirements, and other statutory obligations under Indonesian law.
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1. Parties: Identification of the employer and employee, including their complete legal names and addresses
2. Background: Brief context of the employment relationship and purpose of the agreement
3. Definitions: Key terms used throughout the agreement
4. Position and Duties: Job title, role description, responsibilities, and reporting structure
5. Term of Employment: Employment start date and whether fixed-term or permanent (PKWT or PKWTT)
6. Probation Period: Length and terms of the probationary period (if applicable for permanent contracts)
7. Working Hours and Location: Standard working hours, work location, and overtime provisions
8. Compensation and Benefits: Base salary, allowances, bonuses, and mandatory benefits including BPJS participation
9. Leave Entitlements: Annual leave, sick leave, religious holiday leave, and other statutory leave rights
10. Confidentiality: Protection of company confidential information and trade secrets
11. Intellectual Property: Ownership of work products and innovations created during employment
12. Non-Competition and Non-Solicitation: Post-employment restrictions on competing activities and solicitation
13. Termination: Grounds for termination, notice periods, and severance payment provisions
14. Governing Law: Confirmation of Indonesian law as governing law and dispute resolution procedures
15. Language: Specification of prevailing language version (typically Indonesian and English)
1. Expatriate Provisions: Special terms for foreign employees including visa/work permit requirements and repatriation benefits
2. Remote Work Arrangements: Specific provisions for employees working remotely, including equipment and expense policies
3. Commission Structure: Detailed commission calculations and terms for sales or similar roles
4. Performance Bonus Scheme: Specific bonus structures and KPIs for performance-based compensation
5. Mobility Clause: Terms regarding potential relocation or transfer between company locations
6. Training Obligations: Mandatory training requirements and training bond provisions
7. Company Vehicle: Terms related to company vehicle usage and maintenance
8. Housing Allowance: Specific terms for housing benefits and allowances
1. Schedule 1 - Job Description: Detailed description of roles, responsibilities, and performance expectations
2. Schedule 2 - Compensation Structure: 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 - Code of Conduct: Company's code of conduct and ethical standards
5. Schedule 5 - BPJS Registration Details: Social security and healthcare insurance registration information
6. Appendix A - Confidential Information: Specific list of information classified as confidential
7. Appendix B - Performance Metrics: Detailed KPIs and performance evaluation criteria
8. Appendix C - Required Certifications: List of mandatory professional certifications or qualifications
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