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Permanent Employment Agreement for Indonesia

Permanent Employment Agreement Template for Indonesia

A comprehensive employment agreement governed by Indonesian law, specifically compliant with Law No. 13/2003 on Manpower and the Job Creation Law (Omnibus Law). This document establishes a permanent employment relationship between an employer and employee, detailing terms and conditions including position, compensation, benefits, working hours, leave entitlements, and termination provisions. The agreement incorporates mandatory requirements under Indonesian labor regulations while protecting both employer and employee interests through clear articulation of rights and obligations.

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What is a Permanent Employment Agreement?

This Permanent Employment Agreement template is designed for use in Indonesia when establishing indefinite-term employment relationships under Indonesian labor law. It serves as a foundational document that complies with Law No. 13/2003 on Manpower, the Job Creation Law (Omnibus Law), and related implementing regulations. The agreement should be used when hiring employees for permanent positions, as opposed to fixed-term or temporary arrangements. It includes all mandatory provisions required by Indonesian law while allowing customization for specific employment circumstances. The document addresses key aspects such as compensation, benefits, working conditions, and termination procedures, ensuring alignment with both statutory requirements and business needs. This template is particularly relevant for companies establishing or maintaining operations in Indonesia and seeking to formalize employment relationships in compliance with local regulations.

What sections should be included in a Permanent Employment Agreement?

1. Parties: Identification of the employer and employee, including their complete legal names, addresses, and relevant registration numbers

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Position and Duties: Detailed description of the employee's role, responsibilities, and reporting relationships

5. Work Location: Specification of primary work location and potential for relocation or remote work

6. Working Hours: Standard working hours, rest periods, and overtime arrangements in compliance with Indonesian labor law

7. Compensation and Benefits: Base salary, allowances, bonuses, and mandatory benefits including BPJS participation

8. Leave Entitlements: Annual leave, sick leave, religious holiday leave, and other statutory leave provisions

9. Confidentiality: Obligations regarding company confidential information and trade secrets

10. Intellectual Property: Ownership and rights related to work products and inventions

11. Code of Conduct: Expected behavior, compliance with company policies, and disciplinary procedures

12. Termination: Grounds for termination, notice periods, and severance provisions as per Indonesian law

13. Governing Law: Specification of Indonesian law as governing law and relevant jurisdiction

14. Entire Agreement: Standard boilerplate confirming this as the complete agreement between parties

What sections are optional to include in a Permanent Employment Agreement?

1. Probationary Period: Terms of initial probationary period (maximum 3 months under Indonesian law) - include if probation is required

2. Non-Competition: Post-employment restrictions on working with competitors - include for senior positions or roles with access to sensitive information

3. Mobility Clause: Terms regarding potential transfer to different locations - include if business operates in multiple locations

4. Performance Reviews: Process and frequency of performance evaluations - include if formal review system exists

5. Training Requirements: Mandatory training programs and professional development - include if specific certifications or training are required

6. Language: Specification of prevailing language if agreement is bilingual - include if agreement is in multiple languages

What schedules should be included in a Permanent Employment Agreement?

1. Schedule 1 - Job Description: Detailed breakdown of role responsibilities, requirements, and key performance indicators

2. Schedule 2 - Compensation Structure: Detailed breakdown of salary components, allowances, and benefits

3. Schedule 3 - Company Policies: Key company policies and procedures referenced in the main agreement

4. Schedule 4 - Confidential Information: Specific types of confidential information relevant to the role

5. Appendix A - Required Documents: List of documents required from employee (certificates, permits, etc.)

6. Appendix B - Statutory Benefits: Details of statutory benefits and social security arrangements

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 Contract

Cost

Free to use
Relevant legal definitions




































Clauses




































Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Education

Professional Services

Construction

Hospitality

Telecommunications

Energy

Mining

Agriculture

Transportation

Real Estate

Relevant Teams

Human Resources

Legal

Finance

Operations

Marketing

Sales

Information Technology

Research and Development

Production

Quality Assurance

Customer Service

Administration

Business Development

Compliance

Engineering

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Operations Manager

Human Resources Manager

Marketing Director

Sales Manager

Software Engineer

Account Manager

Administrative Assistant

Project Manager

Research Analyst

Production Supervisor

Quality Control Specialist

Customer Service Representative

Finance Manager

Legal Counsel

Department Head

Technical Specialist

Business Development Manager

Senior Executive

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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