The Separation and Release Agreement is a crucial document used in Indonesia when formally ending an employment relationship, whether through mutual consent, resignation, or termination. It serves as a comprehensive record of the separation terms while ensuring compliance with Indonesian labor laws, particularly Law No. 13 of 2003 on Manpower (as amended by Job Creation Law No. 11 of 2020) and related regulations. The agreement typically includes statutory severance calculations, final benefit settlements, confidentiality provisions, and release of claims. It's particularly important in the Indonesian context due to strict labor regulations regarding termination procedures and mandatory severance payments. This document helps prevent future disputes by clearly documenting all aspects of the separation, including financial settlements, continuing obligations, and mutual releases.
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1. Parties: Identification of the employer and employee, including complete legal names, addresses, and positions
2. Background: Context of the employment relationship, including start date, position, and basis 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 last working day
5. Severance Package: Detailed breakdown of all termination payments including statutory severance, service pay, and compensation rights as per Indonesian Labor Law
6. Payment Terms: Timeline and method of payment for all separation benefits
7. Company Property: Requirements for return of 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 waiver of rights, subject to Indonesian law limitations
10. Tax Treatment: Tax obligations and responsibilities for separation payments
11. Governing Law: Specification of Indonesian law as governing law and relevant jurisdiction
12. Dispute Resolution: Process for resolving disputes as per Law No. 2 of 2004 on Industrial Relations Dispute Settlement
1. Non-Competition: Restrictions on future employment, if applicable and enforceable under Indonesian law
2. Non-Solicitation: Restrictions on soliciting employees or customers, if applicable
3. Reference Letter: Terms regarding the provision of employment references
4. Continuing Obligations: Any ongoing obligations or benefits that survive termination
5. Medical Benefits Extension: Details of any post-employment medical coverage
6. Stock Options/Share Rights: Treatment of any outstanding equity compensation
7. Outplacement Services: Terms of any career transition assistance provided
8. Social Security Continuation: Details about BPJS Healthcare and Employment benefits continuation
1. Schedule A - Calculation of Separation Benefits: Detailed calculation of statutory and contractual payments as per Indonesian Labor Law
2. Schedule B - Company Property Checklist: List of company assets to be returned
3. Schedule C - Final Payroll Calculation: Breakdown of final salary, unused leave, and other entitlements
4. Appendix 1 - Statutory Declaration: Employee's acknowledgment of receiving all entitlements under Indonesian law
5. Appendix 2 - Resignation Letter: If separation is by mutual consent, includes the formal resignation letter
6. Appendix 3 - Benefits Summary: Summary of any continuing benefits or insurance coverage
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