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A Probation Employment Contract is essential for companies operating in Indonesia when hiring new employees for permanent positions. This document is used to establish a trial period of employment, which under Indonesian law cannot exceed three months, during which both the employer and employee can assess their compatibility. The contract must comply with Law No. 13 of 2003 on Manpower (as amended by Job Creation Law No. 11 of 2020) and related regulations, including mandatory provisions for wages, social security, and working conditions. It serves as a crucial tool for human resource management, risk mitigation, and ensuring legal compliance while providing a structured framework for evaluating new hires. The document is particularly important as Indonesian law prohibits probation periods for fixed-term contracts, making it specifically applicable to permanent position arrangements.

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

2. Background: Brief context of the employment relationship and purpose of the probationary period

3. Definitions: Key terms used throughout the agreement

4. Position and Duties: Detailed description of the role, responsibilities, and reporting relationships

5. Duration of Probation: Specific period of probation (maximum 3 months under Indonesian law) and conditions for conversion to permanent employment

6. Working Hours and Location: Standard working hours, overtime provisions, and primary work location

7. Compensation and Benefits: Salary, mandatory benefits, and any additional benefits during probation period

8. Performance Evaluation: Performance criteria, evaluation process, and frequency of assessments during probation

9. Termination: Conditions and process for termination during probation period

10. Confidentiality: Protection of company confidential information and trade secrets

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