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Compromise Agreement Payment Template for Indonesia

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Compromise Agreement Payment

"I need a Compromise Agreement Payment document under Indonesian law for a mutual separation with our Senior Marketing Director, effective March 15, 2025, including standard confidentiality terms and a 6-month non-compete clause for the Jakarta region."

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Document background
The Compromise Agreement Payment document serves as a crucial legal instrument in Indonesian employment relations, used when an employer and employee agree to terminate their employment relationship through mutual consent. This document type is specifically designed to comply with Indonesian labor laws, including Law No. 13 of 2003 on Manpower and the Job Creation Law (Omnibus Law). The agreement details all financial settlements, including statutory entitlements, additional compensations, and tax treatments. It provides legal protection for both parties by documenting the agreed terms of separation and including mutual releases of claims. The Compromise Agreement Payment must be drafted carefully to ensure it meets all regulatory requirements while clearly stating the terms of settlement to prevent future disputes.
Suggested Sections

1. Parties: Identification of the employer and employee, including their complete legal names and addresses

2. Background: Context of the employment relationship, reason for termination/settlement, and basis for the compromise agreement

3. Definitions: Key terms used throughout the agreement, including 'Termination Date', 'Settlement Sum', and other relevant definitions

4. Settlement Payment: Detailed terms of the settlement payment, including amount, method, and timing of payment

5. Tax Treatment: Clarification of tax obligations and responsibilities for the settlement payment

6. Release and Waiver: Mutual release of claims and waiver of rights related to the employment relationship

7. Confidentiality: Obligations regarding confidentiality of the agreement terms and company information

8. Return of Company Property: Requirements and timeline for returning company assets and documents

9. Final Settlement: Confirmation that this represents full and final settlement of all claims

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

11. Execution: Signature blocks and execution requirements

Optional Sections

1. Non-Compete Obligations: Used when the employer requires post-employment restrictions on competition

2. Continuing Obligations: Include when certain obligations from the employment contract survive termination

3. Reference Provision: Terms regarding future employment references, if agreed

4. Legal Advice: Confirmation that the employee has received independent legal advice, if applicable

5. Medical Insurance Extension: Include if continued medical benefits are part of the settlement

6. Training Costs Waiver: Used when waiving repayment of training costs that would otherwise be due

7. Assistance with Handover: Include when specific handover obligations are required

Suggested Schedules

1. Schedule 1 - Payment Calculation: Detailed breakdown of the settlement payment components including basic severance, service appreciation pay, and other entitlements

2. Schedule 2 - Company Property List: Itemized list of company property to be returned

3. Schedule 3 - Tax Calculations: Breakdown of tax implications and calculations for the settlement payment

4. Appendix A - Resignation Letter: Standard format resignation letter to be signed by employee

5. Appendix B - Release Form: Detailed release form in compliance with Indonesian labor law requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions






























Clauses






























Relevant Industries

Banking & Financial Services

Technology

Manufacturing

Retail

Professional Services

Energy & Resources

Telecommunications

Healthcare

Education

Construction

Hospitality

Transportation & Logistics

Consumer Goods

Media & Entertainment

Relevant Teams

Human Resources

Legal

Finance

Compliance

Risk Management

Employee Relations

Compensation & Benefits

Corporate Secretariat

Executive Management

Operations

Relevant Roles

HR Director

HR Manager

Legal Counsel

Chief Legal Officer

Finance Director

Chief Financial Officer

Company Secretary

HR Business Partner

Compensation & Benefits Manager

Employee Relations Manager

Risk Manager

Compliance Officer

Department Head

Line Manager

Senior Executive

Managing Director

Chief Executive Officer

Operations Director

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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