Probation Employment Contract Template for Indonesia

A Probation Employment Contract is a legally binding document that establishes a trial period for new employees in permanent positions within Indonesia. Under Indonesian employment law, this contract allows both you as the employer and your new employee to evaluate the working relationship before confirming permanent employment status.

When do you need this document?

You need a Probation Employment Contract when hiring new employees for permanent positions in your Indonesian company. This document is essential when onboarding staff members whose performance, cultural fit, or technical capabilities require assessment before permanent confirmation. You must use this contract when establishing trial periods for management roles, specialized technical positions, or any permanent role where initial evaluation is necessary. The contract is also required when your company policy mandates probationary periods for all new permanent hires, ensuring consistent human resource practices across your organization.

Key legal considerations

Several critical legal elements must be addressed in your Probation Employment Contract. You must clearly define the maximum three-month probation period, as extending beyond this timeframe violates Indonesian employment law. The contract should specify evaluation criteria, performance metrics, and the process for confirming or terminating employment at the probation's end. You need to include comprehensive job descriptions, reporting relationships, and specific duties to avoid disputes. Termination clauses must comply with Indonesian regulations, including notice periods and circumstances under which either party may end the relationship. Additionally, you must address confidentiality obligations, intellectual property rights, and any non-compete restrictions that remain enforceable under Indonesian law.

Legal requirements in Indonesia

Indonesian employment law imposes strict requirements on Probation Employment Contracts under Law No. 13 of 2003 on Manpower and subsequent amendments through the Job Creation Law No. 11 of 2020. You must limit probation periods to a maximum of three months, with no extensions permitted under any circumstances. The contract must include minimum wage compliance according to Government Regulation No. 36 of 2021, ensuring employees receive at least regional minimum wage during probation. You are required to provide social security benefits (BPJS) from the first day of employment, including health insurance and employment insurance coverage. The contract must be written in Bahasa Indonesia or include certified translations if drafted in other languages. You cannot apply probation periods to fixed-term contract employees, and the agreement must clearly establish the permanent nature of the intended employment relationship upon successful completion of the probationary period.