The Work Settlement Agreement serves as a crucial document in Indonesian employment relations, used when an employer and employee mutually agree to terminate their employment relationship. It's particularly relevant in scenarios such as voluntary resignations, mutual separation programs, or amicable terminations where both parties wish to document their agreement formally. The document must strictly comply with Indonesian labor laws, including Law No. 13/2003 (as amended by the Omnibus Law) and related regulations. It typically includes comprehensive details about settlement payments, statutory entitlements, confidentiality obligations, and release of claims. This agreement is essential for protecting both parties' interests and ensuring the termination process follows all legal requirements under Indonesian law.
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1. Parties: Identification of the employer and employee, including their full legal names, addresses, and positions
2. Background: Brief overview of the employment relationship, including start date, position, and mutual agreement to terminate
3. Definitions: Key terms used throughout the agreement
4. Termination Date: Clear statement of when the employment relationship will end
5. Settlement Payment: Details of all payments including statutory severance, service appreciation pay, and other compensation
6. Payment Terms: Timeline and method of settlement payment
7. Tax Treatment: Clarification of tax obligations for settlement payments
8. Return of Company Property: Requirements and timeline for returning company assets and documents
9. Release and Waiver: Mutual release of claims and liabilities
10. Confidentiality: Ongoing obligations regarding confidential information
11. Governing Law: Confirmation of Indonesian law as governing law
12. Execution: Signature blocks and execution requirements
1. Ongoing Projects Handover: Used when employee needs to complete or hand over specific projects
2. Non-Disparagement: Include when parties wish to explicitly agree not to make negative statements about each other
3. Post-Employment Restrictions: Include when there are specific non-compete or non-solicitation requirements
4. Reference Letter: Include when parties agree on providing employment references
5. Medical Benefits Extension: Used when continuing medical benefits for a specified period
6. Intellectual Property Rights: Include when dealing with employees who created IP during employment
7. Training Cost Recovery Waiver: Include when waiving training cost recovery obligations
8. Outstanding Leave: Include when there is unused annual leave to be compensated
1. Schedule 1 - Settlement Payment Calculation: Detailed breakdown of severance, appreciation pay, and other payments as per Indonesian labor law
2. Schedule 2 - Company Property List: Itemized list of company assets to be returned
3. Schedule 3 - Final Clearance Checklist: List of administrative items to be completed before final settlement
4. Appendix A - Resignation Letter: Copy of employee's resignation letter if applicable
5. Appendix B - Employment Contract: Copy of original employment contract for reference
6. Appendix C - Handover Report Template: Template for documenting handover of work responsibilities
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