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Standard Labour Contract for Indonesia

Standard Labour Contract Template for Indonesia

This Indonesian Standard Labour Contract is a comprehensive employment agreement that establishes the formal working relationship between an employer and employee under Indonesian law. The document complies with Law No. 13 of 2003 on Manpower and related regulations, including recent amendments under the Omnibus Law. It covers essential employment terms including position, compensation, benefits, working hours, leave entitlements, and termination provisions, while ensuring adherence to mandatory Indonesian labor requirements such as social security (BPJS) participation and statutory benefits.

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What is a Standard Labour Contract?

The Standard Labour Contract serves as a fundamental legal document for establishing employment relationships in Indonesia. It is designed for use when hiring both permanent and fixed-term employees, ensuring compliance with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and its implementing regulations. This document incorporates mandatory provisions required by Indonesian law, including working hours, minimum wage requirements, social security participation, and statutory benefits. The contract should be used when formalizing any new employment relationship or updating existing employment terms to ensure legal compliance. It provides protection for both employer and employee by clearly defining rights, obligations, and terms of employment while adhering to local labor regulations.

What sections should be included in a Standard Labour Contract?

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: Definition of key terms used throughout the agreement

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

5. Term of Employment: Duration of employment (permanent or fixed-term) and probation period if applicable

6. Working Hours and Location: Standard working hours, overtime provisions, and primary work location

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. Employee Obligations: General duties, compliance with company policies, and standard of conduct

10. Company Policies: Reference to and incorporation of relevant company policies and procedures

11. Termination: Grounds for termination, notice periods, and severance payment provisions

12. Dispute Resolution: Process for resolving employment-related disputes as per Indonesian law

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

14. Entire Agreement: Standard clause confirming the contract as the complete agreement between parties

What sections are optional to include in a Standard Labour Contract?

1. Confidentiality: Required for positions with access to sensitive information or trade secrets

2. Non-Competition: Used for senior positions or roles with access to strategic information, subject to Indonesian law limitations

3. Intellectual Property: Necessary for creative or technical roles where IP creation is expected

4. Mobility Clause: For positions that may require relocation or travel

5. Performance Reviews: Detailed performance evaluation process and criteria

6. Training Commitments: Required when specific training obligations or bonds are part of employment

7. Commission Structure: For sales or similar roles with variable compensation

8. Remote Working Arrangements: For positions allowing work from home or flexible location arrangements

What schedules should be included in a Standard Labour Contract?

1. Schedule 1 - Job Description: Detailed breakdown of role responsibilities and requirements

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

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

4. Schedule 4 - Performance Metrics: Specific KPIs and performance evaluation criteria

5. Appendix A - Code of Conduct: Company's code of conduct and ethical guidelines

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

7. Appendix C - Leave Policy: Detailed leave application and approval procedures

8. Appendix D - Grievance Procedures: Step-by-step process for raising and addressing grievances

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

Service Contract

Cost

Free to use
Relevant legal definitions






























Clauses




































Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Education

Construction

Mining

Agriculture

Hospitality

Professional Services

Telecommunications

Transportation

Energy

Consumer Goods

Relevant Teams

Human Resources

Legal

Finance

Operations

Sales

Marketing

Information Technology

Customer Service

Research and Development

Production

Quality Assurance

Business Development

Administration

Procurement

Corporate Communications

Relevant Roles

General Manager

Department Head

Supervisor

Administrative Assistant

Sales Representative

Marketing Coordinator

Financial Analyst

HR Officer

Production Manager

Quality Control Inspector

Software Developer

Customer Service Representative

Operations Manager

Research Analyst

Project Manager

Account Executive

Technical Support Specialist

Business Development Manager

Data Analyst

Executive Assistant

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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