The Legal Termination Letter is a crucial document used in Indonesian employment relationships to formally terminate employment contracts. It must strictly comply with Indonesian Labor Law (Law No. 13 of 2003 on Manpower) and its amendments, including the Job Creation Law of 2020. This document is essential when ending employment relationships for various reasons including resignation, retirement, redundancy, performance issues, or mutual agreement. The letter must include specific elements required by Indonesian law, such as clear termination grounds, notice periods, and detailed calculations of final payments including severance, service appreciation pay, and other entitlements. It serves as a legal record of the termination and helps protect both employer and employee rights while ensuring compliance with local labor regulations.
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1. Letter Header: Company letterhead, date, reference number, and formal addressing of the employee
2. Employee Details: Full name, employee ID, position/role, and department of the employee being terminated
3. Termination Notice: Clear statement of employment termination and effective date
4. Reason for Termination: Legal basis and specific reasons for termination in accordance with Indonesian Labor Law
5. Notice Period: Details of the notice period or payment in lieu of notice
6. Final Settlement: Overview of final payment including salary, severance, and other entitlements
7. Company Property: Requirements for returning company property and handling confidential information
8. Closing Statement: Expression of appreciation and formal closing
9. Signature Block: Space for authorized signatory from the company with name and title
1. Misconduct Details: Used when termination is due to misconduct, detailing specific incidents and prior warnings
2. Performance Issues: Used when termination is due to poor performance, including reference to performance reviews and improvement plans
3. Redundancy Information: Used in case of position elimination, explaining business reasons and selection criteria
4. Continuation of Benefits: Used when certain benefits continue post-termination, detailing terms and duration
5. Non-Compete Clause: Used when enforcing post-employment restrictions, subject to Indonesian law limitations
6. Release Agreement Reference: Used when a separate mutual termination agreement is proposed
7. Transfer of Responsibilities: Used when handover of duties is required, detailing the transition process
1. Schedule A: Severance Calculation: Detailed breakdown of severance pay, service appreciation pay, and compensation rights as per Indonesian Labor Law
2. Schedule B: Final Payment Details: Itemized list of final payment components including pro-rated salary, unused leave, and other benefits
3. Schedule C: Company Property List: Detailed list of company assets to be returned
4. Appendix 1: Exit Procedures: Checklist of administrative and operational exit procedures to be completed
5. Appendix 2: Benefits Summary: Summary of any continuing benefits and their duration post-termination
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Technology
Financial Services
Retail
Healthcare
Education
Construction
Mining
Agriculture
Hospitality
Transportation
Professional Services
Energy
Telecommunications
Consumer Goods
Media and Entertainment
Relevant Teams
Human Resources
Legal
Compliance
Senior Management
Operations
Administration
Finance
Industrial Relations
Employee Relations
Risk Management
Relevant Roles
Human Resources Manager
HR Director
Legal Counsel
Compliance Officer
Department Manager
General Manager
Chief Human Resources Officer
Employment Relations Manager
HR Business Partner
Personnel Manager
Chief Legal Officer
Operations Director
Managing Director
Country Manager
Regional HR Manager
Labor Relations Specialist
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