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Severance Package Letter

Severance Package Letter Template for Indonesia

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Key Requirements PROMPT example:

Severance Package Letter

"I need a Severance Package Letter for a senior software engineer in Jakarta being laid off due to company restructuring effective March 1, 2025, including standard severance pay plus additional benefits like extended health insurance and outplacement services."

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Document background
The Severance Package Letter is a crucial document used in Indonesia when terminating employment relationships, whether through mutual agreement, redundancy, or other circumstances. It must comply with Indonesia's Job Creation Law (Omnibus Law) and Government Regulation No. 35 of 2021, which specify mandatory minimum severance payments and other termination benefits. The document serves multiple purposes: it formally communicates the termination decision, details the comprehensive severance package calculation, outlines the payment schedule, and specifies any additional benefits or conditions. This letter forms part of the official termination documentation and may be required for legal compliance, tax purposes, and future reference. It's particularly important in the Indonesian context where employment termination is heavily regulated and requires strict adherence to statutory requirements regarding severance calculations and procedures.
Suggested Sections

1. Letter Header and Date: Company letterhead, date, and reference number of the letter

2. Employee Details: Full name, employee ID, position, and department of the employee

3. Termination Information: Clear statement of employment termination, including effective date and reason for termination

4. Service Recognition: Acknowledgment of the employee's tenure and contributions to the company

5. Severance Payment Details: Breakdown of severance pay, long-service pay, and compensation rights as per Indonesian regulations

6. Payment Method and Timing: Information about when and how the severance package will be paid

7. Final Dues and Benefits: Details of final salary, pro-rated bonus (if applicable), and unused leave compensation

8. Company Property Return: List of company properties to be returned and process for return

9. Closing and Signatures: Formal closing, space for signatures of authorized company representative and employee

Optional Sections

1. Non-Compete Clause: Include when the employee had access to sensitive information or key clients, outlining restrictions on future employment

2. Outplacement Support: Include when the company offers career transition services or job search assistance

3. Health Insurance Extension: Include when offering continued health benefits beyond termination date

4. Release and Waiver: Include when seeking a formal waiver of claims against the company

5. Reference Letter Provision: Include when the company agrees to provide employment references

6. Confidentiality Reminder: Include when employee had access to confidential information

Suggested Schedules

1. Severance Calculation Schedule: Detailed breakdown of severance package calculation as per Indonesian labor laws

2. Benefits Statement: Comprehensive list of all benefits and their status post-termination

3. Company Property Checklist: Itemized list of company assets to be returned

4. Tax Calculation Summary: Breakdown of tax implications and calculations for the severance package

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Healthcare

Education

Mining

Construction

Telecommunications

Professional Services

Hospitality

Energy

Agriculture

Transportation

Consumer Goods

Relevant Teams

Human Resources

Legal

Finance

Payroll

Compliance

Executive Leadership

Administration

Corporate Secretariat

Relevant Roles

HR Manager

Legal Counsel

HR Director

Chief Human Resources Officer

Employment Law Specialist

HR Business Partner

Compensation and Benefits Manager

HR Operations Manager

Legal Manager

Chief Financial Officer

Finance Manager

Payroll Manager

Company Secretary

Managing Director

General Manager

Industries
Law No. 11 of 2020 (Job Creation Law/Omnibus Law): The overarching law that modified various labor regulations, including severance payment calculations and termination procedures
Government Regulation No. 35 of 2021: Implementing regulation of the Job Creation Law specifically concerning employment relationships, including detailed provisions on severance pay calculation and termination procedures
Law No. 13 of 2003 (Manpower Law): The foundation law for employment relations in Indonesia, portions of which remain valid where not amended by the Job Creation Law
Law No. 40 of 2004 on National Social Security System: Regulates social security obligations and benefits that need to be considered in termination arrangements
Law No. 36 of 2008 on Income Tax: Governs the taxation of severance payments, including specific provisions for tax treatment of different components of the severance package
Minister of Manpower Regulation No. 2 of 2015: Provides detailed guidelines on worker/labor union registration and membership representation in termination negotiations
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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