Service Bond Agreements are essential documents used in Indonesia when companies make significant investments in employee training, education, or skill development. These agreements, governed by Indonesian labor law, particularly Law No. 13 of 2003 on Manpower, protect employers' training investments while ensuring fair treatment of employees. The Service Bond Agreement typically specifies the duration of the commitment, the nature of training provided, financial implications of early termination, and compliance requirements with local regulations. It's commonly used for graduate training programs, professional development initiatives, or specialized technical training where the company makes substantial investments in employee development. The document must balance the employer's interest in retaining trained staff with employee rights under Indonesian law.
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1. Parties: Identification of the employer and employee, including complete legal names and addresses
2. Background: Context of the agreement, including the purpose of employment/training and the company's investment in the employee
3. Definitions: Definitions of key terms used throughout the agreement
4. Term of Service: Duration of the bond period and conditions for its commencement
5. Training and Development: Details of training programs, courses, or development opportunities provided
6. Financial Investment: Specification of the company's financial investment in the employee's development
7. Employee Obligations: Key responsibilities and commitments of the employee during the bond period
8. Bond Amount and Calculations: Details of the bond amount and how it will be calculated or pro-rated
9. Termination Provisions: Conditions and consequences of early termination
10. Confidentiality: Provisions regarding confidential information and trade secrets
11. Governing Law: Specification of Indonesian law as governing law and relevant jurisdictional matters
12. Dispute Resolution: Process for resolving disputes under Indonesian law
13. Execution: Signature blocks and execution formalities
1. International Training: Required when training includes overseas components, specifying additional obligations and arrangements
2. Educational Support: Used when the agreement includes formal education funding such as university degrees
3. Non-Competition: Additional restrictions on working with competitors (subject to Indonesian labor law limitations)
4. Guarantor Provisions: Required when a third-party guarantor is involved in securing the bond
5. Special Skills Development: For specialized technical training requiring specific commitments
6. Transfer Provisions: When employee might be transferred between group companies or locations
7. Insurance and Benefits: When special insurance or benefit arrangements are part of the package
1. Schedule A - Training Program Details: Detailed outline of training programs, timelines, and completion criteria
2. Schedule B - Cost Breakdown: Itemized breakdown of training and development costs invested by the company
3. Schedule C - Bond Calculation Formula: Formula and examples for calculating remaining bond amounts at different points
4. Schedule D - Required Certifications: List of certifications or qualifications to be obtained during the bond period
5. Appendix 1 - Employee Acknowledgment: Specific acknowledgment of key terms and obligations
6. Appendix 2 - Company Policies: Relevant company policies that form part of the agreement
7. Appendix 3 - Training Schedule: Detailed timeline of training activities and milestones
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