A Cease Employment Letter is a crucial document in Indonesian employment law that formally communicates the termination of employment between an employer and employee. This document is required whenever an employment relationship is terminated, whether through mutual agreement, resignation, retirement, or unilateral termination by the employer. The letter must strictly comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and its amendments under Law No. 11 of 2020. It includes essential information such as the termination date, reasons for termination, severance calculations, final benefit settlements, and post-employment obligations. The document serves both as a legal record and as protection for both parties, ensuring transparency and compliance with statutory requirements regarding employment termination in Indonesia.
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1. Letter Header and Date: Company letterhead, date, and reference number
2. Recipient Details: Employee's full name, employee ID, position, and department
3. Subject Line: Clear indication that this is a termination of employment letter
4. Termination Notice: Clear statement of employment termination, including the effective date and legal basis for termination under Indonesian law
5. Reason for Termination: Clear explanation of the grounds for termination in accordance with Law No. 13 of 2003
6. Final Working Day: Specification of the last working day and any handover requirements
7. Financial Entitlements: Overview of final salary, severance pay, service pay, and other compensation as per Indonesian labor law
8. Company Property: List of company property to be returned and deadline for return
9. Closing Statement: Expression of appreciation and formal closure
10. Signature Block: Space for authorized signatory's name, title, and signature
1. Non-Compete Reminder: Include when the employee has an existing non-compete agreement
2. Confidentiality Obligations: Include for employees with access to sensitive information
3. Reference Offer: Include when the company is willing to provide employment references
4. Mutual Release: Include when termination is by mutual agreement
5. Outstanding Leave Balance: Include when there is unused annual leave to be compensated
6. Transition Period Details: Include when there is a handover period required
1. Schedule A - Severance Payment Calculation: Detailed breakdown of severance pay calculation as per Indonesian labor law
2. Schedule B - Final Payment Summary: Itemized list of all final payments including salary, benefits, and deductions
3. Schedule C - Company Property Checklist: Detailed list of company property to be returned
4. Schedule D - Benefits Continuation Summary: Details of any continuing benefits or insurance coverage post-termination
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