Learn about employment law in Indonesia thanks to Horizons’ up-to-date guide.
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The standard notice period in Indonesia is 30 days. During probation periods (only possible on indefinite-term contracts), the minimum notice is seven days.
Employers may need to pay both severance and ‘service appreciation’ payments when dismissing employees, depending on the employee’s length of service.
Severance pay (salary = basic salary + all allowances):
Service appreciation pay (a reward for services rendered):
The principal legislation that governs Indonesian employment law is Law No. 13 of 2003 on Employment (Employment Law)
It is possible to terminate an employee during the probation period in Indonesia. Employers must give a 7 day notice in such cases.
In many cases, employers will hire on a fixed-term contract, which would not include a probation period.
For fixed-term contracts, there is no probation period. In cases where termination is appropriate, there is a minimum 1 month notice period required, or payment in lieu of notice.
An employee can terminate employment during their probationary period in Indonesia. They must provide 7 days of notice.
In many cases, the employee would be hired on a fixed-term contract; in such cases, employees must provide a minimum 14 day notice period when resigning.
Terminating employment in Indonesia after the probationary period is often a complicated process. In all cases of early termination (i.e. termination of a fixed-term contract before the end of the contract period), the reason must be justified. Legitimate reasons would include:
If the reason is justified, the termination procedure follows:
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