The Simple Employment Contract serves as a foundational document for establishing employment relationships in Indonesia, designed to comply with Law No. 13 of 2003 on Manpower and subsequent regulations. This template is particularly useful for companies seeking to hire employees in Indonesia while ensuring compliance with local employment laws. The contract includes mandatory provisions required by Indonesian law, such as basic terms of employment, compensation structures, working hours, leave entitlements, and social security benefits. It can be used for both fixed-term and permanent employment arrangements, though specific terms may need to be adjusted accordingly. The document is structured to accommodate various position levels and industries while maintaining compliance with Indonesian labor regulations, including recent updates to employment laws and regulations.
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1. Parties: Identification of the employer and employee, including 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, and primary responsibilities
5. Term of Employment: Duration of employment (permanent or fixed-term) and effective date
6. Probation Period: Length and terms of the probationary period (if applicable, maximum 3 months under Indonesian law)
7. Working Hours: Regular working hours, overtime provisions, and rest periods in accordance with Indonesian labor law
8. Compensation: Base salary, payment schedule, and mandatory allowances including religious holiday allowance (THR)
9. Leave Entitlements: Annual leave, sick leave, and other statutory leave entitlements
10. Social Security: BPJS Healthcare and BPJS Employment participation details
11. Confidentiality: Protection of company confidential information and trade secrets
12. Termination: Grounds and procedures for termination in accordance with Indonesian labor law
13. Governing Law: Specification of Indonesian law as governing law
14. Dispute Resolution: Process for resolving employment-related disputes
1. Non-Competition: Restrictions on working for competitors, used for senior positions or roles with access to sensitive information
2. Intellectual Property: IP rights assignment, typically included for creative or technical roles
3. Remote Work: Terms and conditions for remote working arrangements, if applicable
4. Performance Reviews: Structure and frequency of performance evaluations, typically for permanent positions
5. Training Requirements: Mandatory training programs and professional development requirements
6. Benefits: Additional company-specific benefits beyond statutory requirements
7. Commission Structure: Details of commission-based compensation for sales or similar roles
8. Transfer Provisions: Terms for potential transfer between company locations or affiliated entities
1. Schedule 1 - Job Description: Detailed description of role, responsibilities, and reporting structure
2. Schedule 2 - Compensation Details: Breakdown of salary components, allowances, and benefits
3. Schedule 3 - Company Policies: Reference to or summary of key company policies applicable to the employment
4. Schedule 4 - Code of Conduct: Company's code of conduct and ethical standards
5. Appendix A - Required Documents: List of documents required from employee (e.g., certificates, ID copies)
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