The Mutual Separation Agreement Letter is a crucial document used in Indonesian employment relationships when both employer and employee agree to end their employment relationship amicably. It serves as a legally binding document under Indonesian law, particularly complying with Law No. 13 of 2003 (Manpower Law) and Law No. 11 of 2020 (Job Creation Law). This document is typically used during corporate restructuring, voluntary resignation programs, or when both parties seek an amicable separation. The agreement includes essential elements such as separation terms, financial settlements, confidentiality obligations, and mutual releases. It provides legal protection for both parties by clearly documenting the agreed terms and ensuring compliance with Indonesian labor regulations regarding employment termination.
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1. Letter Header: Company letterhead, date, and reference number
2. Addressee Details: Employee's full name, employee ID, position, and complete address
3. Subject Line: Clear indication that this is a Mutual Separation Agreement
4. Opening Statement: Reference to previous discussions and mutual agreement to separate
5. Employment History: Brief summary of employment period, current position, and location
6. Separation Terms: Last working day, handover requirements, and general separation conditions
7. Financial Settlement: Detailed breakdown of all payments including statutory entitlements, severance, and other benefits
8. Company Property: Requirements for returning company properties and maintaining confidentiality
9. Release and Waiver: Mutual release of claims and obligations post-separation
10. Closing Statement: Confirmation of mutual agreement and appreciation
11. Signature Block: Space for signatures of both parties, including witnesses if required
1. Non-Compete Clause: Include when protecting company interests from competitive activities is necessary
2. Reference Letter Provision: Include when agreeing to provide employment references
3. Outplacement Support: Include when the company offers career transition assistance
4. Medical Benefits Extension: Include when continuing medical coverage post-separation
5. Stock Options/Share Treatment: Include when employee has outstanding company shares or options
6. Consultancy Arrangement: Include when the employee will continue providing services as a consultant
1. Schedule A - Financial Settlement Calculation: Detailed breakdown of all payment components including statutory and discretionary amounts
2. Schedule B - Company Property Checklist: List of all company properties to be returned
3. Schedule C - Handover Document List: List of documents, projects, and responsibilities to be handed over
4. Appendix 1 - Confidentiality Obligations: Detailed explanation of ongoing confidentiality requirements
5. Appendix 2 - Benefits Summary: Summary of benefits continuation or termination post-separation
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