The Employment Memorandum of Understanding is utilized in Indonesian business practice as a preliminary document to establish the basic framework of an employment relationship before finalizing a formal employment contract. This document is particularly useful during recruitment processes and negotiations, allowing both parties to confirm their mutual understanding of key employment terms. The MOU must align with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and its implementing regulations, while addressing fundamental aspects such as position, compensation, working hours, and basic obligations. While not as detailed as a full employment agreement, this document serves as a crucial stepping stone in the hiring process and provides a foundation for the subsequent employment relationship.
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1. Parties: Identification of the employer and employee, including their complete legal names, addresses, and registration numbers (for companies)
2. Background: Context of the employment relationship and purpose of the MOU
3. Definitions: Key terms used throughout the document
4. Position and Duties: Description of the role, job title, and primary responsibilities
5. Term of Employment: Duration of employment, including start date and whether it's fixed-term or permanent
6. Compensation and Benefits: Basic salary, allowances, and statutory benefits as per Indonesian labor law
7. Working Hours and Location: Standard working hours, work location, and any flexibility arrangements
8. Leave Entitlements: Annual leave, sick leave, and other statutory leave entitlements
9. Confidentiality: Protection of company confidential information
10. Governing Law: Specification that Indonesian law governs the agreement
11. Signatures: Execution block for both parties
1. Probation Period: Include when the employment will begin with a probation period
2. Mobility Clause: Include when the role may require relocation or travel
3. Non-Competition: Include for senior positions or roles with access to sensitive information
4. Intellectual Property Rights: Include for creative, technical, or research-based roles
5. Performance Reviews: Include when formal performance review processes will be implemented
6. Training Requirements: Include when specific training or certifications are required
7. Remote Working Provisions: Include for roles with work-from-home arrangements
1. Schedule A - Job Description: Detailed description of roles, responsibilities, and reporting lines
2. Schedule B - Compensation Structure: Breakdown of salary components, allowances, and benefits
3. Schedule C - Company Policies: List of applicable company policies and procedures
4. Appendix 1 - Required Documents: List of documents required from employee (certifications, ID, etc.)
5. Appendix 2 - Benefits Summary: Detailed description of all employee benefits and social security entitlements
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