The Employee Release Agreement is a crucial document used in Indonesian employment terminations to formalize the end of an employment relationship and document all associated terms and obligations. It is typically used when employment is terminated by mutual consent, redundancy, or other circumstances where a clear record of separation terms is needed. The agreement must strictly comply with Indonesian labor laws, including the Manpower Law and Job Creation Law, particularly regarding mandatory severance calculations and employee protections. It serves multiple purposes: documenting the formal termination date, specifying all financial settlements, addressing ongoing obligations like confidentiality, and providing mutual releases of claims. This document is especially important in Indonesia's employee-protective legal environment, where proper documentation of termination terms can prevent future disputes and ensure regulatory compliance.
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant registration numbers
2. Background: Brief context of the employment relationship, including position, duration of employment, and basis for termination
3. Definitions: Key terms used throughout the agreement, including 'Effective Date', 'Termination Date', 'Confidential Information', etc.
4. Termination of Employment: Formal statement of employment termination, specifying the effective date and nature of separation
5. Settlement Payment: Details of all financial settlements, including statutory severance, service appreciation pay, and compensation for unused leave
6. Tax and Social Security: Treatment of tax obligations and BPJS (social security) arrangements
7. Return of Company Property: Requirements for returning company assets, documents, and other property
8. Confidentiality Obligations: Ongoing obligations regarding confidential information post-employment
9. Release and Waiver: Mutual release of claims and waiver of rights, subject to Indonesian law limitations
10. Non-Disparagement: Mutual agreements regarding non-disparagement
11. References: Agreement on the nature and content of employment references
12. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes
13. Execution: Signature blocks and execution requirements
1. Non-Competition: Restrictions on working for competitors, only include if such clause existed in original employment agreement and is reasonable in scope
2. Non-Solicitation: Restrictions on soliciting employees or customers, include when protecting business relationships is crucial
3. Ongoing Cooperation: Requirements for assistance in handover or future inquiries, include for senior positions or complex roles
4. Benefits Continuation: Details of any continued benefits post-termination, include if offering extended benefits
5. Reinstatement of Employment: Terms regarding potential future re-employment, include if possibility of future re-employment exists
6. Legal Consultation: Acknowledgment of right to seek legal counsel, recommended for complex terminations
7. Severability: Clause ensuring partial invalidity doesn't void entire agreement, include in complex agreements
1. Schedule 1 - Settlement Calculation: Detailed breakdown of all payment components including statutory severance, appreciation pay, and other entitlements
2. Schedule 2 - Company Property Register: List of all company property to be returned
3. Schedule 3 - Confidential Information: Specific definition and examples of confidential information
4. Appendix A - Statutory Declaration: Employee's declaration confirming voluntary acceptance of agreement terms
5. Appendix B - Certificate of Service: Standard form of employment reference/service letter
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Manufacturing
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Financial Services
Retail
Mining
Agriculture
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Education
Construction
Telecommunications
Professional Services
Energy
Transportation
Hospitality
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Relevant Teams
Human Resources
Legal
Finance
Operations
Sales
Marketing
Information Technology
Research and Development
Production
Quality Assurance
Business Development
Administration
Customer Service
Supply Chain
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Relevant Roles
Chief Executive Officer
Managing Director
General Manager
Department Head
Senior Manager
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Technical Specialist
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Account Manager
Human Resources Manager
Quality Control Supervisor
Business Development Manager
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