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Employee Separation Agreement for Indonesia

Employee Separation Agreement Template for Indonesia

A legally binding document governed by Indonesian law that formalizes the termination of employment between an employer and employee. This agreement outlines the terms and conditions of the separation, including statutory entitlements under Law No. 13 of 2003 on Manpower (as amended by Law No. 11 of 2020), severance payments, final settlements, and post-employment obligations. It ensures compliance with Indonesian labor regulations while providing clarity and protection for both parties regarding their rights and obligations during and after the separation process.

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Employee Separation Agreement

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What is a Employee Separation Agreement?

The Employee Separation Agreement is a crucial document used in Indonesia when formally ending an employment relationship, whether through mutual agreement, resignation, or termination. It must comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower (as amended by the Job Creation Law No. 11 of 2020) and related regulations. The agreement serves to document the terms of separation, including statutory severance payments, release of claims, and ongoing obligations. It's essential for protecting both employer and employee interests while ensuring compliance with local labor regulations regarding termination procedures, mandatory benefits, and notice periods. The document typically includes detailed calculations of final payments, handling of company property, confidentiality provisions, and dispute resolution mechanisms, all structured within the framework of Indonesian employment law.

What sections should be included in a Employee Separation Agreement?

1. Parties: Identification of the employer and employee, including their legal details and addresses

2. Background: Brief context of the employment relationship and reason for separation

3. Definitions: Key terms used throughout the agreement

4. Effective Date of Separation: Clear statement of when the employment relationship ends

5. Final Payment and Benefits: Details of severance pay, long service pay, and other statutory entitlements as per Indonesian law

6. Tax Treatment: Clarification on tax handling of separation payments

7. Company Property: Requirements for return of company assets and documents

8. Final Settlement: Confirmation that payment represents full and final settlement

9. Confidentiality Obligations: Ongoing duties regarding confidential information

10. Release and Waiver: Mutual release of claims, subject to Indonesian law requirements

11. Governing Law: Confirmation of Indonesian law as governing law

12. Dispute Resolution: Process for resolving disputes as per Law No. 2 of 2004

13. Execution: Signature blocks and execution requirements

What sections are optional to include in a Employee Separation Agreement?

1. Non-Compete Clause: Used when restricting employee's future employment activities, subject to Indonesian law limitations

2. Non-Solicitation: Used when preventing solicitation of employees or customers is required

3. Extended Benefits: Used when providing additional non-statutory benefits

4. Outplacement Support: Used when company provides career transition assistance

5. Reference Letter: Used when agreeing to provide employment references

6. Continuing Obligations: Used when specific ongoing duties need to be maintained

7. Social Media Guidelines: Used when specific social media behavior needs to be addressed

8. Intellectual Property Rights: Used when IP ownership needs to be clearly established post-employment

What schedules should be included in a Employee Separation Agreement?

1. Schedule 1 - Calculation of Final Payments: Detailed breakdown of severance, gratuity, and other payments

2. Schedule 2 - Company Property List: Inventory of items to be returned

3. Schedule 3 - Benefits Summary: Details of any continuing or terminating benefits

4. Appendix A - Statutory Payment Calculations: Calculations showing compliance with Indonesian labor law requirements

5. Appendix B - Release Form: Detailed release of claims form in Indonesian and English

6. Appendix C - Handover Checklist: Checklist for completion of handover tasks

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions








































Clauses
































Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Education

Mining

Construction

Telecommunications

Professional Services

Hospitality

Energy

Agriculture

Transportation

Media and Entertainment

Relevant Teams

Human Resources

Legal

Compliance

Industrial Relations

Employee Relations

Corporate Secretariat

Executive Leadership

Administration

Finance

Compensation and Benefits

Relevant Roles

HR Manager

HR Director

Legal Counsel

Compliance Officer

Chief Human Resources Officer

HR Business Partner

Employment Law Specialist

Industrial Relations Manager

HR Operations Manager

Talent Management Director

Chief Legal Officer

Company Secretary

Managing Director

Chief Executive Officer

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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