The Employment Release Agreement serves as a crucial document in Indonesian employment relationships when both parties agree to terminate employment by mutual consent. This document is essential when implementing a voluntary separation, redundancy, or negotiated exit in compliance with Indonesian labor laws. It must include specific elements required by Law No. 13 of 2003 on Manpower and its amendments, such as statutory severance calculations, service appreciation pay, and proper releases. The agreement is particularly important as it provides legal certainty for both parties, prevents future disputes, and ensures compliance with local regulatory requirements. It should be used when there is mutual agreement to end employment and both parties wish to document the terms of separation, including financial settlements, ongoing obligations, and releases of claims.
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1. Parties: Identification of the employer and employee, including their complete legal names and addresses
2. Background: Brief context of the employment relationship, including start date and position, and mutual decision to terminate
3. Definitions: Key terms used throughout the agreement, including 'Effective Date', 'Termination Date', and other relevant definitions
4. Termination of Employment: Clear statement of employment termination, including the effective date and confirmation of final working day
5. Severance Package: Detailed breakdown of all payments including statutory severance, service appreciation pay, and other entitlements as per Indonesian law
6. Payment Terms: Timeline and method of severance payment delivery, including tax treatment
7. Return of Company Property: Requirements and timeline for returning company assets, documents, and other property
8. Release and Waiver: Mutual release of claims between parties, subject to Indonesian law requirements
9. Confidentiality: Ongoing obligations regarding confidential information and trade secrets
10. Final Settlement: Confirmation that the agreement represents full and final settlement of all claims
11. Governing Law: Specification of Indonesian law as governing law and relevant jurisdiction
12. Execution: Signature blocks for both parties and witnesses as required under Indonesian law
1. Non-Disparagement: Mutual obligations not to make negative statements, used when there's concern about potential reputational damage
2. Post-Employment Restrictions: Non-compete and non-solicitation clauses, included when protecting business interests is crucial
3. Reference and Announcements: Terms regarding employment references and how the departure will be communicated, used for senior positions
4. Continuing Benefits: Any post-employment benefits like health insurance continuation, used for senior executives or special arrangements
5. Legal Fees: Provisions regarding payment of legal fees for agreement review, typically for senior executive agreements
6. Cooperation: Requirements for post-employment assistance in handover or specific matters, used when continued cooperation is needed
1. Schedule 1 - Severance Calculation: Detailed calculation of severance package components as per Indonesian labor law
2. Schedule 2 - Company Property Checklist: List of company assets to be returned with confirmation of return status
3. Schedule 3 - Outstanding Benefits: List of any accrued benefits, pro-rated bonuses, or reimbursements due
4. Appendix A - Statutory Declarations: Required statutory forms and declarations under Indonesian labor law
5. Appendix B - Release Form: Standard release form in Indonesian language as required by local regulations
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