The Outsourced Employee Contract is designed for use in Indonesia when engaging workers through an outsourcing arrangement, complying with Law No. 13 of 2003 on Manpower and related regulations. This document is essential when a company wishes to engage workers through a third-party outsourcing provider while ensuring compliance with Indonesian labor laws. The agreement sets out the triangular relationship between the outsourcing company (as the legal employer), the client company (where the work is performed), and the employee. It includes provisions for work conditions, compensation, benefits, reporting structures, and termination procedures, all aligned with Indonesian legal requirements. The document is particularly relevant for non-core business activities that are permitted to be outsourced under Indonesian law, such as cleaning services, security, catering, and support services.
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1. Parties: Identification of the three parties: the Outsourcing Company (Employer), the Client Company, and the Employee
2. Background: Context of the outsourcing arrangement and the nature of the work to be performed
3. Definitions: Key terms used throughout the agreement, including specific Indonesian legal terminology
4. Term of Employment: Duration of employment, including start date and whether fixed-term or permanent
5. Job Description and Placement: Detailed description of role, responsibilities, and location of work at Client Company
6. Working Hours and Leave: Standard working hours, overtime provisions, and leave entitlements as per Indonesian law
7. Compensation and Benefits: Salary, mandatory benefits, and social security (BPJS) arrangements
8. Reporting Structure: Clear reporting lines between Employee, Outsourcing Company, and Client Company
9. Confidentiality and Data Protection: Obligations regarding company information and data protection requirements
10. Work Rules and Policies: Compliance with both Outsourcing Company and Client Company policies
11. Termination: Grounds and procedures for termination in accordance with Indonesian labor law
12. Dispute Resolution: Process for handling disputes under Indonesian law
13. Governing Law: Specification of Indonesian law as governing law and relevant jurisdiction
1. Mobility Clause: Required if the employee may need to work at different client locations
2. Non-Competition: Include if requesting post-employment restrictions (note: limited enforceability in Indonesia)
3. Training and Development: Include if specific training requirements or professional development programs are provided
4. Performance Management: Include if specific KPIs or performance review processes are required
5. Intellectual Property Rights: Required if employee will be involved in creative or technical work
6. Foreign Worker Provisions: Required if the employee is an expatriate, including KITAS requirements
7. Language Provision: Required if contract is bilingual, stating which version prevails
1. Schedule 1 - Detailed Job Description: Comprehensive outline of job responsibilities and requirements
2. Schedule 2 - Compensation Structure: Detailed breakdown of salary components and benefits
3. Schedule 3 - Client Company Specific Requirements: Any specific rules, policies or requirements of the Client Company
4. Schedule 4 - Code of Conduct: Combined code of conduct incorporating both Outsourcing and Client Company requirements
5. Appendix A - Required Documents: List of documents required for employment and social security registration
6. Appendix B - Leave Policy: Detailed leave policy including all types of leave under Indonesian law
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