A Separation Agreement and Release is a crucial document used when formally ending an employment relationship in Indonesia. This document is essential for both employers and employees to ensure compliance with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and the Omnibus Law (Law No. 11 of 2020). The agreement is typically used when both parties have mutually agreed to end the employment relationship, or when a unilateral termination needs to be formalized. It outlines all statutory entitlements, including severance pay, service appreciation pay, and rights compensation, while providing legal protection through mutual releases. The document must be carefully drafted to ensure compliance with local regulations, including mandatory benefits calculations and procedural requirements. A well-drafted Separation Agreement and Release helps prevent future disputes by clearly documenting all terms of the separation and ensuring both parties understand their rights and obligations.
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1. Parties: Identification of the employer and employee, including their legal details and addresses
2. Background: Context of the employment relationship, including start date, position, and reason for separation
3. Definitions: Key terms used throughout the agreement, including statutory terms from Indonesian labor law
4. Effective Date of Separation: Clear statement of the employment termination date and final working day
5. Separation Payments: Details of all statutory and discretionary payments, including severance, service appreciation pay, and rights compensation
6. Payment Terms: Timeline and method of payment for all separation-related compensation
7. Return of Company Property: Requirements and timeline for returning company assets, documents, and intellectual property
8. Confidentiality Obligations: Ongoing obligations regarding confidential information and trade secrets
9. Release of Claims: Mutual release of claims and liabilities between parties, subject to Indonesian law
10. Tax Provisions: Treatment of tax obligations for separation payments
11. Governing Law: Specification of Indonesian law as governing law and relevant jurisdiction
12. Dispute Resolution: Process for resolving disputes under Indonesian industrial relations law
1. Non-Competition: Restrictions on future employment, if applicable and permissible under Indonesian law
2. Non-Solicitation: Restrictions on soliciting employees or customers, if applicable
3. Reference and Announcements: Terms regarding employment references and public announcements of departure
4. Continuing Cooperation: Terms for post-employment assistance in business transitions or legal matters
5. Medical Benefits Extension: Any continuation of medical benefits beyond separation date
6. Stock Options/Share Rights: Treatment of any outstanding equity compensation
7. Repatriation Benefits: For expatriate employees, terms regarding return to home country
8. Training Bond Release: Release from any training bonds or educational commitments
1. Schedule A - Calculation of Separation Payments: Detailed breakdown of statutory severance, service appreciation pay, and other compensation
2. Schedule B - Company Property Register: List of company assets to be returned
3. Schedule C - Benefits Summary: Summary of benefits and their treatment post-separation
4. Schedule D - Outstanding Obligations: List of any remaining obligations or commitments
5. Appendix 1 - Statutory Payment Calculations: Calculations showing compliance with Indonesian labor law requirements
6. Appendix 2 - Release Form: Detailed release of claims form in Indonesian and English
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