Employee Termination Agreement And Mutual Release

Employee Termination Agreement And Mutual Release Template for Indonesia

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Key Requirements PROMPT example:

"I need an Employee Termination Agreement And Mutual Release for a senior software developer in Jakarta who has agreed to a mutual separation effective March 1, 2025, including extended health benefits and accelerated vesting of stock options."

Document background

The Employee Termination Agreement And Mutual Release is a crucial document used in Indonesia when formally ending an employment relationship. It serves to document the terms of separation while providing legal protection for both employer and employee through mutual releases of claims. The agreement must strictly comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower (as amended by the Job Creation Law) and related regulations. It's typically used in situations of mutual separation, redundancy, or other forms of employment termination where both parties agree to the separation terms. The document includes detailed provisions for statutory entitlements, final settlements, confidentiality obligations, and post-employment restrictions, while ensuring all mandatory payments and procedures under Indonesian law are properly addressed.

Suggested Sections

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

2. Background: Context of the employment relationship, including start date, position, and reason for termination

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Clear specification of the employment end date and final working day

5. Statutory Entitlements: Details of mandatory payments including severance, service appreciation, and compensation rights as per Indonesian law

6. Final Payments: Breakdown of final salary, unused leave, and other outstanding payments

7. Company Property: Requirements for return of company assets, documents, and intellectual property

8. Mutual Release: Reciprocal waiver of claims between parties, subject to Indonesian law limitations

9. Confidentiality: Ongoing obligations regarding confidential information

10. Tax Provisions: Treatment of tax obligations for termination payments

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

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Non-Competition: Restrictions on future employment, if applicable and enforceable under Indonesian law

2. Non-Solicitation: Restrictions on soliciting employees or customers, if applicable

3. Reference Letter: Terms regarding the provision of employment references

4. Medical Benefits Extension: Any continuation of medical benefits post-termination

5. Assistance with Handover: Terms for transition of duties and knowledge transfer

6. Outstanding Stock Options: Treatment of any employee stock options or equity rights

7. Resignation from Offices: Required resignations from corporate positions, if applicable

8. Immigration Status: Provisions regarding work permits and immigration status for foreign employees

Suggested Schedules

1. Schedule A - Calculation of Termination Payments: Detailed breakdown of severance, service appreciation, and other statutory payments

2. Schedule B - Company Property Checklist: List of company assets to be returned

3. Schedule C - Final Settlement Statement: Comprehensive statement of all final payments and deductions

4. Schedule D - Confidential Information Definition: Detailed description of what constitutes confidential information

5. Appendix 1 - Resignation Letter: Standard format resignation letter, if termination is structured as mutual agreement

6. Appendix 2 - Reference Letter Template: Agreed format and content of reference letter, if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok��˰� | 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

Manufacturing

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Hospitality

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Relevant Teams

Human Resources

Legal

Compliance

Industrial Relations

Employee Relations

Corporate Governance

Finance

Payroll

Risk Management

Relevant Roles

HR Director

HR Manager

Legal Counsel

Employment Lawyer

HR Business Partner

HR Operations Manager

Compliance Officer

Industrial Relations Manager

Employee Relations Manager

Human Resources Specialist

Legal Manager

HR Administrator

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HR Coordinator

Talent Management Director

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