End Contract Non Renewal Letter For Work Template for Indonesia

When your company decides not to renew a fixed-term employment contract in Indonesia, you need to provide formal written notice to the employee through an End Contract Non Renewal Letter For Work. This document serves as official communication that protects both your company and the employee by clearly establishing that the contract will expire naturally without renewal, rather than being terminated for cause.

When do you need this document?

You need this letter when any fixed-term employment contract (PKWT - Perjanjian Kerja Waktu Tertentu) is approaching its expiration date and your company has decided not to offer renewal. This applies to project-based employees, seasonal workers, temporary staff covering for permanent employees on leave, or any employee hired under a specific time-limited contract. The letter is particularly important in Indonesia's regulated employment environment, where clear documentation prevents misunderstandings about whether a contract ended naturally or was terminated, which can have significant legal and financial implications.

Key legal considerations

Your non-renewal letter must clearly reference the original contract terms, including start and end dates, to establish that this is a natural expiration rather than termination. Include specific details about the employee's final working day, handover procedures for company property, and final settlement arrangements including any outstanding salary, benefits, or compensation. Be careful to avoid language that could imply termination for cause or performance issues, as this might create grounds for wrongful termination claims. The letter should maintain a professional, neutral tone that focuses on the contract's natural conclusion rather than reasons for non-renewal, unless specifically required by company policy or the original contract terms.

Legal requirements in Indonesia

Under Law No. 13 of 2003 on Manpower (as amended by Law No. 11 of 2020), you must provide adequate notice before a fixed-term contract expires if you decide not to renew it. While the law doesn't specify an exact timeframe, best practice suggests at least 7 days' written notice, though many companies provide 30 days to ensure compliance and maintain good employment relations. The letter must be issued on official company letterhead and should include reference numbers for proper documentation. Minister of Manpower Regulation No. 2 of 1993 requires that fixed-term contract procedures be clearly documented, making this formal notice essential for legal compliance. Additionally, ensure your letter addresses final settlement calculations according to Indonesian labor regulations, including any pro-rated benefits, unused leave compensation, and proper handover of company assets or confidential information.