The Standard Termination Agreement serves as a crucial legal instrument in Indonesian employment relationships, providing a structured framework for consensual employment termination. This document is typically used when both employer and employee agree to end their employment relationship amicably, requiring careful consideration of Indonesian Labor Law requirements, particularly those specified in Law No. 13/2003 (as amended by Job Creation Law No. 11/2020) and related regulations. The agreement comprehensively addresses termination terms, including mandatory severance calculations, final settlements, ongoing obligations, and mutual releases. It's essential for ensuring legal compliance, minimizing disputes, and protecting both parties' interests in the termination process. The document should be customized based on the specific circumstances of the termination while maintaining compliance with Indonesian employment regulations.
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1. Parties: Identification of the employer and employee, including complete legal names, addresses, and positions
2. Background: Context of the employment relationship, including original employment date, position, and general circumstances leading to termination
3. Definitions: Definition of key terms used throughout the agreement
4. Termination Date: Clear specification of the effective date of employment termination
5. Mutual Agreement: Statement of mutual consent to terminate the employment relationship
6. Final Settlement: Details of all financial settlements, including salary, severance pay, and other entitlements as per Indonesian Labor Law
7. Company Property: Requirements for return of company property, documents, and confidential information
8. Confidentiality: Ongoing obligations regarding confidential information
9. Release and Waiver: Mutual release of claims and liabilities, subject to Indonesian law requirements
10. Tax Provisions: Treatment of tax obligations for settlement payments
11. Governing Law: Confirmation of Indonesian law as governing law and jurisdiction
12. Execution: Signature blocks and formal execution requirements
1. Non-Competition: Post-employment competition restrictions, if applicable and agreed (noting limited enforceability 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. Outstanding Leave: Calculation and treatment of unused leave entitlements
5. Benefits Continuation: Any post-termination continuation of benefits or insurance
6. Transition Duties: Requirements for handover of duties and knowledge transfer
7. Surviving Obligations: Specification of which obligations survive termination
1. Schedule 1 - Settlement Calculation: Detailed breakdown of all payment components including basic severance, service appreciation pay, and other entitlements as per Indonesian Labor Law
2. Schedule 2 - Company Property Inventory: List of company property to be returned
3. Schedule 3 - Outstanding Projects/Handover Items: List of work matters requiring handover or completion
4. Appendix A - Resignation Letter: Standard format resignation letter if termination is structured as resignation
5. Appendix B - Release Form: Detailed release form in compliance with Indonesian law requirements
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