The Local Employment Contract is a legally binding agreement used for establishing employment relationships within Indonesia, designed to comply with Law No. 13/2003 on Manpower, the Omnibus Law (Law No. 11/2020), and related employment regulations. This document is essential when hiring Indonesian employees, whether for permanent or fixed-term positions, and must be prepared in the Indonesian language (with optional English translation). It contains all mandatory provisions required by Indonesian law, including statutory benefits, working hours, leave entitlements, and termination procedures, while also protecting the employer's interests through appropriate confidentiality and intellectual property provisions. The agreement serves as the primary reference point for the employment relationship and must be signed before or when the employment commences.
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1. Parties: Identification of the employer and employee, including their complete legal names, addresses, and relevant identification numbers
2. Background: Brief context of the employment relationship and purpose of the agreement
3. Definitions: Key terms used throughout the agreement
4. Position and Duties: Job title, role description, responsibilities, and reporting structure
5. Term of Employment: Employment start date and whether the contract is permanent or fixed-term
6. Work Location: Primary workplace location and any mobility requirements
7. Working Hours: Standard working hours, overtime arrangements, and rest periods as per Indonesian labor law
8. Compensation and Benefits: Base salary, mandatory allowances, and statutory benefits including BPJS participation
9. Leave Entitlements: Annual leave, sick leave, religious holiday leave, and other statutory leave rights
10. Confidentiality: Protection of company confidential information and trade secrets
11. Intellectual Property: Ownership of work products and innovations created during employment
12. Code of Conduct: Expected behavior, compliance with company policies and procedures
13. Termination: Grounds for termination, notice periods, and severance payment requirements
14. Governing Law: Confirmation of Indonesian law as governing law and dispute resolution procedures
15. Entire Agreement: Standard boilerplate confirming this as the complete agreement between parties
1. Probationary Period: Terms of initial probationary period - include for permanent employment contracts
2. Non-Competition: Post-employment restrictions - include for senior positions or roles with access to sensitive information
3. Mobility Clause: Requirements for travel or relocation - include if job requires regular travel or possible reassignment
4. Performance Reviews: Performance evaluation process and frequency - include if not covered in company policies
5. Language: Governing language if contract is bilingual - include if contract is in multiple languages
6. Remote Working: Terms for working from home or remote locations - include if applicable
7. Commission Structure: Details of sales or performance-based compensation - include for sales or commission-based roles
8. Training Obligations: Required training and potential training bonds - include if specific training requirements exist
1. Schedule 1 - Job Description: Detailed description of role, responsibilities, and performance expectations
2. Schedule 2 - Compensation Details: Breakdown of salary components, allowances, and benefits
3. Schedule 3 - Company Policies: Key company policies that form part of the employment terms
4. Schedule 4 - Statutory Benefits: Details of BPJS and other mandatory benefits
5. Appendix A - Confidential Information: Definition and examples of confidential information
6. Appendix B - Code of Conduct: Detailed behavioral expectations and compliance requirements
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
Technology
Financial Services
Retail
Construction
Healthcare
Education
Professional Services
Hospitality
Mining
Agriculture
Telecommunications
Transportation
Energy
E-commerce
Relevant Teams
Human Resources
Legal
Finance
Operations
Sales
Marketing
Information Technology
Production
Quality Assurance
Customer Service
Research and Development
Administration
Business Development
Supply Chain
Project Management
Relevant Roles
General Manager
Finance Manager
HR Manager
Marketing Executive
Sales Representative
Administrative Assistant
Production Supervisor
Quality Control Inspector
Software Developer
Account Manager
Operations Manager
Customer Service Representative
Project Manager
Research Analyst
Business Development Manager
Factory Worker
Office Manager
Technical Support Specialist
Department Head
Branch Manager
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