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Mutual Separation Agreement Employment for Indonesia

Mutual Separation Agreement Employment Template for Indonesia

A comprehensive agreement governed by Indonesian law that documents the mutually agreed termination of employment between an employer and employee. This document outlines the terms and conditions of the separation, including severance payments, benefits, confidentiality obligations, and mutual releases in accordance with Indonesian Labor Law (Law No. 13 of 2003 as amended by the Job Creation Law). It provides legal protection for both parties by clearly stating their rights, obligations, and agreed terms of separation while ensuring compliance with Indonesian employment regulations regarding termination procedures and entitlements.

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Mutual Separation Agreement Employment

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What is a Mutual Separation Agreement Employment?

The Mutual Separation Agreement Employment is a crucial document used in Indonesia when an employer and employee mutually agree to end their employment relationship. This agreement is particularly relevant in situations where both parties wish to document a consensual separation that differs from unilateral termination or resignation. The document must comply with Indonesian Labor Law (Law No. 13 of 2003) and its amendments under the Job Creation Law (Law No. 11 of 2020), especially regarding mandatory severance payments and other entitlements. It typically includes comprehensive terms covering separation payments, confidentiality obligations, release of claims, and post-employment obligations. This type of agreement is commonly used during corporate restructuring, voluntary separation programs, or when parties agree to part ways amicably while ensuring legal compliance and protecting both parties' interests.

What sections should be included in a Mutual Separation Agreement Employment?

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

2. Background: Context of the employment relationship and mutual decision to separate

3. Definitions: Key terms used throughout the agreement

4. Effective Date of Separation: Clear statement of when the employment relationship will end

5. Separation Payments: Details of all statutory and additional payments, including severance, service appreciation pay, and compensation rights

6. Payment Terms: Timeline and method of payment for all separation-related payments

7. Return of Company Property: Requirements and timeline for returning company assets, documents, and other property

8. Confidentiality: Ongoing obligations regarding confidential information

9. Release and Waiver: Mutual release of claims and liabilities

10. Tax Provisions: Treatment of tax obligations for separation payments

11. Governing Law: Confirmation of Indonesian law as governing law

12. Dispute Resolution: Process for resolving any disputes arising from the agreement

13. Entire Agreement: Confirmation that this document represents the complete agreement between parties

What sections are optional to include in a Mutual Separation Agreement Employment?

1. Non-Competition: Restrictions on future employment, if applicable and agreed (note: must be reasonable and limited in scope under Indonesian law)

2. Non-Solicitation: Restrictions on soliciting employees or customers, if applicable

3. Reference and Announcement: Terms regarding employment references and how the separation will be announced

4. Continuing Cooperation: Terms for employee's assistance in handover or future inquiries

5. Medical Benefits Extension: Any continuation of medical benefits beyond separation date

6. Stock Options/Share Rights: Treatment of any outstanding equity compensation

7. Outstanding Loans: Settlement of any employee loans or advances

8. Relocation Assistance: Support for relocated employees returning to their original location

What schedules should be included in a Mutual Separation Agreement Employment?

1. Schedule 1 - Calculation of Separation Payments: Detailed breakdown of all payment components including statutory severance, service appreciation, and other compensation

2. Schedule 2 - Company Property Register: List of all company property to be returned

3. Schedule 3 - Outstanding Benefits: Details of any pro-rated bonus, unused leave, or other benefits to be settled

4. Appendix A - Resignation Letter: Standard format resignation letter to be signed by employee

5. Appendix B - Release Form: Detailed release and waiver form in compliance with Indonesian law

6. Appendix C - Handover Report Template: Format for documenting handover of responsibilities and documents

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

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions




































Clauses



































Relevant Industries

Banking & Financial Services

Technology

Manufacturing

Retail

Professional Services

Energy & Resources

Healthcare

Education

Telecommunications

Construction

Hospitality

Agriculture

Mining

Transportation & Logistics

Relevant Teams

Human Resources

Legal

Compliance

Employee Relations

Industrial Relations

Corporate Secretariat

Executive Leadership

Finance

Talent Management

Relevant Roles

HR Director

Legal Counsel

HR Manager

Compliance Officer

Employee Relations Manager

General Counsel

HR Business Partner

Company Secretary

HR Operations Manager

Legal Manager

Industrial Relations Manager

Chief Human Resources Officer

Employment Law Specialist

Talent Management Director

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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