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Employment Termination Policy for Indonesia

Employment Termination Policy Template for Indonesia

This Employment Termination Policy document provides a comprehensive framework for managing employment terminations in accordance with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and the Job Creation Law (Omnibus Law). The policy outlines specific procedures, requirements, and calculations for various types of employment termination scenarios, ensuring compliance with local regulations while protecting both employer and employee rights. It includes detailed guidance on severance payments, notice periods, final settlements, and dispute resolution procedures, tailored to meet the requirements of Indonesian employment legislation and business practices.

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What is a Employment Termination Policy?

The Employment Termination Policy serves as a crucial governance document for organizations operating in Indonesia, establishing standardized procedures for handling employment terminations in compliance with Indonesian labor laws. This document becomes necessary when organizations need to ensure consistent and legally compliant handling of employment separations, whether voluntary or involuntary. The policy incorporates requirements from the Manpower Law, Job Creation Law, and related regulations, providing detailed guidance on termination procedures, severance calculations, notice periods, and dispute resolution mechanisms. It helps organizations manage risk, ensure fair treatment of employees, and maintain compliance with Indonesian employment regulations while standardizing internal processes for handling terminations.

What sections should be included in a Employment Termination Policy?

1. Purpose and Scope: Defines the objective of the policy and its application scope within the organization

2. Legal Basis: References to relevant Indonesian laws and regulations governing employment termination

3. Definitions: Clear definitions of key terms used throughout the policy, including types of termination

4. Grounds for Termination: Comprehensive list of circumstances under which employment may be terminated, aligned with Indonesian law

5. Notice Periods: Required notice periods for different types of termination scenarios

6. Termination Procedures: Step-by-step procedures for different types of termination, including documentation requirements

7. Severance Calculations: Formula and components for calculating severance pay, service pay, and other compensation

8. Final Settlement: Process for settling final payments, benefits, and company property return

9. Dispute Resolution: Procedures for handling disputes related to termination

What sections are optional to include in a Employment Termination Policy?

1. Union Consultation Process: Required for companies with labor unions, detailing the consultation process during termination

2. Industry-Specific Termination Requirements: Special provisions for regulated industries like financial services or mining

3. Mass Layoff Procedures: Special procedures for termination involving large numbers of employees

4. Performance Improvement Plan Procedures: Detailed process for performance-based terminations including PIP requirements

5. Exit Interview Procedures: Guidelines for conducting exit interviews and documentation requirements

What schedules should be included in a Employment Termination Policy?

1. Schedule 1 - Severance Pay Calculation Tables: Detailed tables showing severance pay calculations based on years of service and termination grounds

2. Schedule 2 - Required Forms and Templates: Standard forms including termination notice, final settlement calculation, and clearance forms

3. Schedule 3 - Termination Checklist: Comprehensive checklist for HR to ensure all termination procedures are followed

4. Schedule 4 - Employee Rights Summary: Summary of employee rights and entitlements during termination process

5. Appendix A - Reference Letter Template: Standard template for providing employment references

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

Document Type

Employment Policy

Cost

Free to use
Relevant legal definitions








































Clauses


































Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Mining

Construction

Education

Hospitality

Professional Services

Telecommunications

Agriculture

Transportation

Energy

Relevant Teams

Human Resources

Legal

Compliance

Finance

Operations

Administration

Industrial Relations

Risk Management

Payroll

Executive Leadership

Relevant Roles

Chief Executive Officer

Human Resources Director

Legal Counsel

HR Manager

Compliance Officer

Department Manager

Line Supervisor

HR Business Partner

Finance Manager

Operations Director

Managing Director

Industrial Relations Manager

Payroll Manager

Risk Manager

Administration Manager

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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