A Contract Termination Letter To Employee is a crucial legal document used in Indonesian employment relationships when an employer needs to formally end an employment contract. This document must strictly adhere to Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and its amendments through the Job Creation Law No. 11 of 2020. It is used in various situations including redundancy, poor performance, misconduct, or mutual agreement terminations. The letter must include specific components required by law such as termination reasons, notice periods, and detailed calculations of final payments including severance, service pay, and other entitlements. Proper documentation is essential as it may be scrutinized in potential labor disputes and must demonstrate compliance with statutory requirements for employment termination in Indonesia.
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1. Header and Date: Company letterhead, current date, and reference number if applicable
2. Employee Information: Full name, employee ID, position/title, and department of the employee
3. Subject Line: Clear indication that this is a termination notice
4. Termination Statement: Clear statement of employment termination and effective date
5. Reason for Termination: Legal basis and specific reasons for termination in accordance with Indonesian labor law
6. Notice Period: Specification of notice period or payment in lieu of notice
7. Financial Entitlements: Details of final salary, severance pay, service pay, and other compensation as per regulations
8. Company Property: Instructions for returning company property and settling any outstanding matters
9. Final Documentation: Information about experience letter, employment certificate, and other final documents
10. Signature Block: Space for authorized signatory's name, title, and signature
1. Performance History: Include when termination is related to poor performance, listing previous warnings and improvement opportunities
2. Misconduct Details: Required when termination is due to specific misconduct, detailing the incident(s) and investigation findings
3. Redundancy Explanation: Include when termination is due to company restructuring or redundancy
4. Non-Compete Reminder: Include if employee is bound by existing non-compete or confidentiality agreements
5. Outplacement Support: Optional section offering career transition support or counseling
6. Appeal Process: Information about internal appeal procedures, if company policy allows
7. Health Insurance Extension: Details about continuation or termination of health benefits, if applicable
1. Calculation of Final Payments: Detailed breakdown of severance pay, service pay, and other compensation as per Indonesian labor law
2. Handover Checklist: List of company property to be returned and outstanding matters to be resolved
3. Previous Warning Letters: Copies of previous warning letters if termination is performance-related
4. Employee Benefits Summary: Summary of benefits status and post-termination arrangements
5. Exit Interview Form: Standard form for conducting and recording exit interview
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