Employee Transfer Agreement Template for Indonesia

An Employee Transfer Agreement is a legal document that facilitates the seamless transfer of employees from one company to another in Indonesia. This agreement ensures that your employment rights are protected and that the transfer complies with Indonesian labor laws, particularly Law No. 13/2003 on Manpower and recent amendments under the Job Creation Law (Omnibus Law). The document establishes clear terms for maintaining your employment relationship while transferring to a new legal entity.

When do you need this document?

You need an Employee Transfer Agreement during corporate restructuring scenarios such as mergers, acquisitions, or spin-offs where your current employer transfers part of their business to another company. This document is essential when your company is acquired by another entity and you need to transfer to the acquiring company while maintaining your employment rights. You also require this agreement during internal reorganizations where employees move between related companies or subsidiaries within the same corporate group. Additionally, this document becomes necessary when outsourcing arrangements change and employees transfer from the original employer to a service provider or vice versa.

Key legal considerations

The agreement must clearly specify the continuation of your employment terms, including salary, benefits, and working conditions that cannot be unilaterally reduced during transfer. Your length of service (masa kerja) must be preserved and recognized by the new employer, which is crucial for severance pay calculations and other employment benefits. The document should address the transfer of your social security benefits, including BPJS Ketenagakerjaan and BPJS Kesehatan, ensuring no interruption in coverage. Both companies must agree on the handling of any outstanding employment obligations, such as unpaid leave balances, bonuses, or disciplinary matters. The agreement should also clarify liability for any labor disputes or claims that may arise after the transfer date.

Legal requirements in Indonesia

Under Indonesian law, employee transfers must comply with Law No. 13/2003 on Manpower, which requires employee consent for transfers that materially change employment conditions. The Job Creation Law (Omnibus Law) introduced new provisions that may affect transfer terms, particularly regarding employment contract modifications and termination procedures. Ministry of Manpower Regulation No. 19/2012 provides specific guidelines for transfer of work relationships between companies, requiring proper documentation and employee notification procedures. The agreement must ensure compliance with Law No. 24/2011 on BPJS, maintaining continuity of social security contributions and benefits. All transfer agreements must be documented in writing and may require notification to local labor authorities depending on the scope and nature of the transfer. The document should also comply with any applicable collective bargaining agreements or company regulations that govern the transfer process.