This document serves as a formal Termination Agreement under Indonesian law, specifically designed for situations where both employer and employee mutually agree to end their employment relationship. It incorporates essential requirements from Indonesian Labor Law (Law No. 13 of 2003) and its amendments through the Omnibus Law (Law No. 11 of 2020), ensuring full compliance with local employment regulations. The agreement is typically used when parties wish to document a clean break in their employment relationship, providing certainty and protection for both sides. It includes comprehensive details about final settlements, severance calculations, handover requirements, and any post-employment obligations. This type of agreement is particularly important in Indonesia's legal context, where proper documentation of employment termination is crucial for preventing future disputes and ensuring compliance with mandatory employment termination procedures.
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1. Parties: Identification of the employer and employee, including their legal details and addresses
2. Background: Context of the employment relationship and the mutual decision to terminate
3. Definitions: Key terms used throughout the agreement
4. Termination Date: Specific date when the employment relationship will end
5. Final Settlement: Details of all financial settlements including salary, severance pay, and other entitlements as per Indonesian Labor Law
6. Release and Waiver: Mutual release of claims and liabilities between parties
7. Company Property: Requirements for returning company property and documents
8. Tax Obligations: Treatment of tax implications for the settlement payments
9. Governing Law: Confirmation of Indonesian law as governing law and jurisdiction
10. Execution: Signature blocks and execution requirements
1. Ongoing Projects Handover: Used when employee needs to complete or hand over specific projects
2. Non-Compete Obligations: Include when there are post-employment competition restrictions
3. Confidentiality Obligations: Detailed when there's sensitive information to protect post-employment
4. Reference and Announcement: Include when parties agree on how the termination will be communicated
5. Benefits Continuation: Used when certain benefits will continue post-termination
6. Assistance with Transition: Include when employee agrees to provide transition support
7. Surviving Obligations: Used to specify which obligations continue after termination
1. Schedule 1 - Settlement Calculation: Detailed breakdown of all payment components including severance, service appreciation pay, and other entitlements
2. Schedule 2 - Company Property List: Itemized list of company property to be returned
3. Schedule 3 - Outstanding Benefits: List of any pro-rated or outstanding benefits to be settled
4. Appendix A - Handover Checklist: Checklist of tasks and documents to be handed over before departure
5. Appendix B - Release Form: Standard form acknowledging receipt of final settlement and release of claims
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