ARTICLE
20 November 2018

Employment Contracts In Indonesia

S
SSEK Law Firm

Contributor

SSEK Legal Consultants was formed in 1992 and today is one of the largest corporate law firms in Indonesia. SSEK offers the full suite of corporate and commercial services across a range of practice areas. We have the experience and expertise to handle the largest, most complex cross-border transactions and projects in Indonesia.
In general, an employment agreement in Indonesia shall be entered into for either a fixed or an indefinite term.
Indonesia Employment and HR
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In general, an employment agreement in Indonesia shall be entered into for either a fixed or an indefinite term.

Fixed-term employment agreements are subject to more strict requirements than indefinite-term employment agreements. A fixed-term employment agreement must be in writing and in the Indonesian language. The parties typically provide that the English version of a bilingual agreement will prevail in the event of a conflict or inconsistency. If not in writing, a fixed-term employment agreement is deemed an indefinite-term employment agreement. Additionally, a fixed-term employment agreement cannot include a probation period.

A fixed-term employment agreement that is based on a certain period of time (unlike seasonal contracts, etc.) may last for up to two years, and may be "extended" once for a maximum period of one year. Then, after a grace period of at least 30 days, it can be "renewed" one time for a maximum period of two years.

An indefinite-term employment agreement may provide for a probation period of up to three months. In the event an indefinite-term employment agreement is made verbally, the employer is required to provide a letter of appointment to the employee. The letter shall contain at least the following information: (i) the employee's name and address, (ii) the date the work commences, (iii) the type of work, and (iv) the employee's proposed wages.

Fixed-term contracts must be in writing and in the Indonesian language or in a bilingual format. Given new legislation governing the use of Indonesian language in contracts generally, we recommend that both fixed and permanent employment agreements be executed in Indonesian or in a bilingual Indonesian and English format. It is prudent to assume that in the event of a conflict or inconsistency, the Indonesian-language version shall prevail.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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