Labour Hire Agreement Template for Indonesia

The Labour Hire Agreement serves as a crucial legal framework for companies operating in Indonesia that require temporary or project-based workforce solutions. This document is essential when a licensed labor hire company (provider) supplies workers to a host company (client) while maintaining the employment relationship with the workers. The agreement must comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and related regulations, including specific requirements for outsourcing arrangements under Minister of Manpower Regulation No. 19 of 2012. It details the responsibilities of both parties, worker management procedures, compliance obligations, and financial terms while ensuring proper worker protections and benefits as mandated by Indonesian law. The document is particularly relevant for businesses seeking flexible workforce solutions while maintaining legal compliance in Indonesia's complex labor regulatory environment.

1. Parties: Identifies the labor hire company (provider) and the host company (client), including their complete legal names, registration numbers, and authorized representatives

2. Background: Establishes the context of the agreement, including the provider's licensing status and the client's need for temporary workers

3. Definitions: Defines key terms used throughout the agreement, including 'Assigned Workers', 'Services', 'Assignment Period', and other relevant terminology

4. Scope of Services: Details the labor hire services to be provided, including types of positions and general worker specifications

5. Term and Termination: Specifies the duration of the agreement and circumstances under which it can be terminated

6. Provider Obligations: Lists the labor hire company's responsibilities, including worker recruitment, screening, and compliance with employment laws

7. Client Obligations: Outlines the host company's responsibilities regarding workplace safety, supervision, and treatment of assigned workers

8. Worker Management: Details processes for worker assignments, replacements, performance management, and attendance

9. Fees and Payment Terms: Specifies service fees, payment schedules, and any additional charges

10. Compliance with Laws: Addresses compliance with Indonesian labor laws, social security requirements, and relevant regulations

11. Insurance and Indemnification: Details required insurance coverage and indemnification obligations of both parties

12. Confidentiality: Establishes confidentiality obligations for all parties involved

13. Dispute Resolution: Specifies procedures for resolving disputes under Indonesian law

14. General Provisions: Includes standard clauses such as notices, amendments, and governing law