The Letter of Termination of Service is a crucial document used in Indonesian employment relationships when an employer needs to formally end an employment contract. This document must strictly comply with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower and its amendments under the Job Creation Law No. 11 of 2020. It is used in situations including performance-based termination, redundancy, retirement, or mutual separation agreements. The letter must include specific elements required by Indonesian law, such as the termination reason, effective date, calculation of severance payments, and other statutory entitlements. These requirements make it essential for employers to carefully prepare the Letter of Termination of Service to ensure legal compliance and minimize the risk of disputes in the Indonesian Industrial Relations Court.
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1. Letter Header: Company letterhead, date, reference number, and formal business letter formatting
2. Recipient Details: Employee's full name, ID number, position, and complete address
3. Subject Line: Clear indication that this is a termination of service notice
4. Opening Statement: Reference to employment contract and formal notification of termination decision
5. Termination Details: Effective date of termination and legal basis for termination under Indonesian Labor Law
6. Final Settlement Information: Details of final salary, severance pay, and other entitled benefits as per Law No. 13 of 2003
7. Company Property Return: List of company properties to be returned and deadline for return
8. Closing Statement: Expression of appreciation for service and professional closure
9. Signature Block: Authorized signatory details, company stamp, and space for acknowledgment
1. Non-Compete Reminder: Include when the employee's contract contains non-compete clauses that remain effective after termination
2. Handover Instructions: Include when the employee needs to transfer ongoing projects or responsibilities
3. Exit Interview: Include when company policy requires an exit interview process
4. Reference Provision: Include when the company agrees to provide employment references
5. Medical Benefits Extension: Include when applicable for continuation of medical benefits
6. Mutual Release Clause: Include when both parties agree to release each other from future claims
1. Calculation of Final Settlement: Detailed breakdown of final payment including salary, severance, and other benefits
2. Company Property Checklist: Itemized list of company assets to be returned
3. Handover Document List: List of documents and files to be handed over, if applicable
4. Benefits Summary: Summary of post-employment benefits and their duration
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