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Definite Term Employment Contract for Indonesia

Definite Term Employment Contract Template for Indonesia

This document is a Definite Term Employment Contract (PKWT) governed by Indonesian law, specifically compliant with Law No. 13 of 2003 on Manpower as amended by the Job Creation Law No. 11 of 2020 and Government Regulation No. 35 of 2021. It establishes a fixed-term employment relationship between an employer and employee for a specified duration, outlining all essential terms and conditions of employment including position, duties, compensation, benefits, working hours, and termination provisions. The contract ensures compliance with Indonesian labor regulations regarding fixed-term employment, including maximum duration limits, renewal conditions, and mandatory benefits.

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What is a Definite Term Employment Contract?

The Definite Term Employment Contract (PKWT) is a fundamental document in Indonesian employment law, used for establishing temporary or fixed-term employment relationships. This contract type is specifically regulated under Indonesian Law No. 13 of 2003 on Manpower and its amendments, with strict requirements regarding permissible circumstances for use, maximum durations, and renewal conditions. It's commonly used for project-based work, seasonal activities, or temporary positions that will complete within a specific timeframe. The contract must include all mandatory employment terms required by Indonesian law, including clear start and end dates, position details, compensation structure, and statutory benefits. It's essential for employers to ensure compliance with specific Indonesian regulations regarding fixed-term employment, including registration requirements and limitations on contract duration and renewals.

What sections should be included in a Definite Term Employment Contract?

1. Parties: Identification of the employer and employee, including their legal details and addresses

2. Background: Context of the employment relationship and confirmation that this is a fixed-term contract

3. Definitions: Key terms used throughout the agreement

4. Term of Employment: Duration of the fixed-term contract, including start and end dates, and any probation period

5. Position and Duties: Job title, role description, responsibilities, and reporting relationships

6. Place of Work: Primary workplace location and any mobility requirements

7. Working Hours: Standard working hours, overtime arrangements, and rest periods

8. Remuneration: Base salary, payment schedule, and method of payment

9. Benefits: Mandatory benefits including BPJS social security, healthcare, and other standard benefits

10. Leave Entitlements: Annual leave, sick leave, religious holiday leave, and other statutory leave rights

11. Confidentiality: Protection of company confidential information and trade secrets

12. Company Policies: Compliance with company rules, regulations, and policies

13. Termination: Grounds for termination and procedures in accordance with Indonesian law

14. Post-Employment Obligations: Return of company property and continuing obligations after employment ends

15. Governing Law: Confirmation of Indonesian law as governing law and dispute resolution procedures

16. Entire Agreement: Standard boilerplate confirming this is the complete agreement between parties

What sections are optional to include in a Definite Term Employment Contract?

1. Mobility Clause: Required when the role may involve temporary or permanent relocation

2. Non-Competition: Used for senior positions or roles with access to sensitive information, subject to Indonesian law restrictions

3. Intellectual Property: Required for creative, technical, or research-based roles

4. Performance Targets: Used when the role has specific KPIs or performance metrics

5. Commission Structure: Required for sales or commission-based roles

6. Language Requirements: Used when the contract is bilingual or when language proficiency is essential

7. Training Requirements: Used when specific training or certifications are required for the role

8. International Travel: Required when the role involves international travel or assignments

What schedules should be included in a Definite Term Employment Contract?

1. Schedule 1 - Job Description: Detailed description of the role, responsibilities, and performance expectations

2. Schedule 2 - Remuneration Details: Breakdown of salary components, allowances, and benefits

3. Schedule 3 - Company Policies: Key company policies that form part of the employment terms

4. Schedule 4 - Working Hours Schedule: Detailed working hours, shift patterns, or rotation schedules if applicable

5. Appendix A - Required Documentation: List of documents required from the employee (e.g., certificates, permits)

6. Appendix B - Confidential Information: Specific details of what constitutes confidential information

7. Appendix C - Benefits Summary: Detailed breakdown of all benefits and social security entitlements

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions





































Clauses








































Relevant Industries

Manufacturing

Technology

Construction

Retail

Hospitality

Agriculture

Mining

Education

Healthcare

Financial Services

Telecommunications

Energy

Transportation

Entertainment

Professional Services

Relevant Teams

Human Resources

Legal

Operations

Project Management Office

Production

Sales

Marketing

Research and Development

Customer Service

Administration

Information Technology

Finance

Quality Assurance

Relevant Roles

Project Manager

Software Developer

Construction Worker

Seasonal Agricultural Worker

Contract Teacher

Research Assistant

Sales Representative

Marketing Coordinator

Administrative Assistant

Production Operator

Field Researcher

Event Coordinator

Technical Consultant

Customer Service Representative

Temporary Plant Manager

Industries








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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