The Employee Termination Agreement And Mutual Release is a crucial document used in Indonesia when formally ending an employment relationship. It serves to document the terms of separation while providing legal protection for both employer and employee through mutual releases of claims. The agreement must strictly comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower (as amended by the Job Creation Law) and related regulations. It's typically used in situations of mutual separation, redundancy, or other forms of employment termination where both parties agree to the separation terms. The document includes detailed provisions for statutory entitlements, final settlements, confidentiality obligations, and post-employment restrictions, while ensuring all mandatory payments and procedures under Indonesian law are properly addressed.
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1. Parties: Identification of the employer and employee, including their complete legal names and addresses
2. Background: Context of the employment relationship, including start date, position, and reason for termination
3. Definitions: Key terms used throughout the agreement
4. Termination Date: Clear specification of the employment end date and final working day
5. Statutory Entitlements: Details of mandatory payments including severance, service appreciation, and compensation rights as per Indonesian law
6. Final Payments: Breakdown of final salary, unused leave, and other outstanding payments
7. Company Property: Requirements for return of company assets, documents, and intellectual property
8. Mutual Release: Reciprocal waiver of claims between parties, subject to Indonesian law limitations
9. Confidentiality: Ongoing obligations regarding confidential information
10. Tax Provisions: Treatment of tax obligations for termination payments
11. Governing Law: Specification of Indonesian law as governing law and jurisdiction
12. Execution: Signature blocks and execution requirements
1. Non-Competition: Restrictions on future employment, if applicable and enforceable 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. Medical Benefits Extension: Any continuation of medical benefits post-termination
5. Assistance with Handover: Terms for transition of duties and knowledge transfer
6. Outstanding Stock Options: Treatment of any employee stock options or equity rights
7. Resignation from Offices: Required resignations from corporate positions, if applicable
8. Immigration Status: Provisions regarding work permits and immigration status for foreign employees
1. Schedule A - Calculation of Termination Payments: Detailed breakdown of severance, service appreciation, and other statutory payments
2. Schedule B - Company Property Checklist: List of company assets to be returned
3. Schedule C - Final Settlement Statement: Comprehensive statement of all final payments and deductions
4. Schedule D - Confidential Information Definition: Detailed description of what constitutes confidential information
5. Appendix 1 - Resignation Letter: Standard format resignation letter, if termination is structured as mutual agreement
6. Appendix 2 - Reference Letter Template: Agreed format and content of reference letter, if applicable
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