The Termination Of Employment Contract is a crucial document used in Indonesia when formally ending an employment relationship, whether through mutual agreement, performance issues, redundancy, or other legally permitted grounds. It must strictly comply with Indonesian labor laws, particularly the Job Creation Law (Omnibus Law) and its implementing regulations. This document is essential for protecting both employer and employee interests by clearly documenting the termination terms, including severance calculations, final settlements, and mutual obligations. It should be prepared in both Indonesian and English languages (with Indonesian version prevailing), and must include specific provisions required by local labor laws regarding notice periods, severance payments, and procedural requirements. The document serves as a legal record of the termination and helps prevent future disputes by clearly outlining all terms and entitlements.
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1. Parties: Identification of the employer and employee, including complete legal names, addresses, and positions
2. Background: Brief history of employment relationship, including original employment date, current position, and reference to original employment contract
3. Definitions: Key terms used in the termination agreement, including relevant Indonesian legal terminology
4. Termination Date: Clear statement of the effective date of employment termination
5. Legal Basis for Termination: Specific grounds for termination under Indonesian law, referring to relevant articles of the Omnibus Law/PP No. 35/2021
6. Final Settlement: Breakdown of all financial entitlements including severance pay, service appreciation pay, and compensation rights as per Indonesian law
7. Company Property: Requirements for returning company property and handling of confidential information
8. Release and Waiver: Mutual release of claims and obligations post-termination
9. Governing Law: Confirmation of Indonesian law as governing law and relevant jurisdiction
10. Signatures: Execution section for both parties
1. Non-Competition and Non-Solicitation: Included when the employee held a senior position or had access to sensitive information
2. Misconduct Details: Required when termination is due to serious misconduct, detailing specific incidents and evidence
3. Mutual Agreement Statement: Included when termination is by mutual consent (Pemutusan Hubungan Kerja Bersama)
4. Training Bond Settlement: Required when there are outstanding training bonds or educational commitments
5. Reference Letter Provisions: Terms regarding the provision of employment references
6. Outstanding Leave Settlement: Calculation and settlement of unused annual leave, if applicable
7. Continuing Obligations: Specific obligations that survive termination, such as confidentiality duties
1. Schedule 1 - Severance Calculation: Detailed calculation of severance pay, service appreciation pay, and other entitlements as per Indonesian labor law
2. Schedule 2 - Company Property List: Inventory of company assets to be returned
3. Schedule 3 - Final Settlement Details: Comprehensive breakdown of final payment including salary, THR (religious holiday allowance), and other benefits
4. Appendix A - Employee History Record: Summary of employment history including positions held and salary progression
5. Appendix B - Supporting Documents: Copies of relevant notices, warnings, or documentation supporting the termination
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