Secondment Contract Template for Indonesia

A secondment contract is a three-party agreement that allows you to temporarily assign an employee from your company to work for another organization while maintaining their original employment relationship. In Indonesia, these arrangements require careful legal structuring to comply with stringent labor laws and ensure all parties' rights are protected throughout the assignment period.

When do you need this document?

You need a secondment contract when your company wants to temporarily transfer an employee's services to a partner organization, subsidiary, or client company. This commonly occurs during major projects requiring specialized expertise, knowledge transfer initiatives between related companies, or strategic partnerships where skills sharing benefits both organizations. Indonesian companies also use secondment arrangements for international assignments, training programs with foreign partners, or when fulfilling specific contractual obligations that require particular employee expertise. The document becomes essential when the assignment exceeds 30 days, involves cross-border elements, or when the host company will direct the employee's daily work activities.

Key legal considerations

Your secondment contract must clearly define the relationship between all three parties and specify which company retains employer responsibilities. The agreement should detail compensation arrangements, including who pays the employee's salary, benefits, and any additional allowances during the secondment period. You must address liability and insurance coverage, particularly regarding workplace accidents or professional indemnity issues that may arise during the assignment. The contract should include termination clauses that protect all parties' interests and specify procedures for early return or extension of the secondment. Additionally, confidentiality and intellectual property clauses are crucial to protect sensitive information and clarify ownership of work product created during the assignment.

Legal requirements in Indonesia

Indonesian law requires secondment arrangements to comply with Law No. 13 of 2003 on Manpower and Minister of Manpower Regulation No. 19 of 2012, which govern outsourcing and worker assignments. You must ensure the seconded employee maintains their BPJS Employment and BPJS Health coverage throughout the assignment, with clear provisions for premium payments and administrative responsibilities. The contract must specify tax obligations under Law No. 6 of 1983, including income tax withholding responsibilities and any treaty benefits for international assignments. Work permit requirements under Law No. 6 of 2011 must be addressed if the secondment involves foreign nationals or assignments to foreign entities. The agreement must preserve the employee's rights to their original employment terms and ensure compliance with Indonesian minimum wage and working time regulations, even when working for the host company.