Employment Settlement Agreement Template for Indonesia

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Key Requirements PROMPT example:

Employment Settlement Agreement

"I need an Employment Settlement Agreement for a senior IT Director in Jakarta who is mutually agreeing to leave our tech company on March 1, 2025, with provisions for confidentiality, extended health benefits, and share option treatment."

Document background
The Employment Settlement Agreement is a crucial document used in Indonesian employment contexts when an employer and employee agree to terminate their employment relationship through mutual consent. This document is particularly important under Indonesian labor law, which requires clear documentation of separation terms and statutory entitlements. The agreement typically comes into play during voluntary separations, redundancies, or when parties wish to amicably resolve potential employment disputes. It must comply with Law No. 13 of 2003 on Manpower (as amended by Law No. 11 of 2020) and related regulations, ensuring proper calculation of severance payments, long service pay, and other entitlements. The document serves as a legally binding record of the settlement terms while protecting both parties' interests through mutual releases and clear obligations.
Suggested Sections

1. Parties: Identification of the employer and employee, including their full legal names, addresses, and relevant registration/identification numbers

2. Background: Brief context of the employment relationship, including start date, position, and high-level reason for termination

3. Definitions: Key terms used throughout the agreement, including 'Termination Date', 'Settlement Sum', 'Confidential Information'

4. Termination of Employment: Formal statement of employment termination, specifying the last day of employment and immediate obligations

5. Settlement Payments: Details of all payments to be made, including statutory severance, service appreciation pay, and other entitlements under Indonesian law

6. Tax and Deductions: Treatment of tax obligations and any authorized deductions from settlement payments

7. Company Property: Requirements for return of company property, documents, and data

8. Confidentiality Obligations: Ongoing confidentiality obligations post-employment

9. Full and Final Settlement: Mutual release of claims and waiver of rights to future claims

10. Reference and Announcement: Agreement on how the departure will be communicated and terms of employment references

11. Governing Law and Jurisdiction: Confirmation of Indonesian law governance and dispute resolution procedures

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Non-Competition and Non-Solicitation: Post-employment restrictions, used when the employee had access to sensitive information or key client relationships

2. Ongoing Cooperation: Terms for employee assistance in transitioning duties or future inquiries, used when handover is complex or litigation is pending

3. Medical Benefits Continuation: Terms for extending medical coverage, used when agreed as part of the settlement package

4. Share Options/Awards: Treatment of outstanding equity compensation, used when employee participated in share schemes

5. Legal Fees: Agreement regarding payment of legal fees, used when employer agrees to cover employee's legal costs

6. Reinstatement of Employment: Conditions under which employment relationship could be reinstated, used in specific regulatory contexts

Suggested Schedules

1. Schedule 1 - Settlement Payment Calculation: Detailed breakdown of all payment components including statutory severance, long service pay, and other entitlements

2. Schedule 2 - Company Property Register: List of all company property to be returned and confirmation of return

3. Schedule 3 - Outstanding Benefits: Detail of any pro-rated bonus, unused leave, and other benefits calculations

4. Appendix A - Resignation Letter: Standard format resignation letter if termination is documented as resignation

5. Appendix B - Release Form: Detailed release of claims form in compliance with Indonesian law

6. Appendix C - Handover Report: Template for documenting handover of duties and ongoing projects

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Construction

Education

Mining

Agriculture

Telecommunications

Professional Services

Hospitality

Energy

Transportation

Real Estate

Relevant Teams

Human Resources

Legal

Finance

Operations

Administration

Compliance

Industrial Relations

Employee Relations

Payroll

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

General Manager

Department Head

Senior Manager

Manager

Supervisor

Senior Executive

Executive

Officer

Administrative Staff

Technical Specialist

Sales Representative

Production Worker

Professional Staff

Contract Employee

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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