Labor law in
Indonesia.

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:

• Absence for more than 5 days after 2 summons
• Violation of employment agreement and after 3 warnings
• Imprisonment for more than 6 months
• Grave wrongdoings (Stealing of goods, falsification of information, drunkenness, immorality, intimidation or persuasion to do something illegal of colleagues; destruction of property, exposed colleague to danger, leaking of company secrets, or commission of criminal acts)
• Retirement of the employee
• Death or occupational accident or illness for more than 12 months

If the reason is justified, the termination procedure follows:

1. Provide written notice. Simple Termination Letter sent by email with confirmation of receipt
2. Await employee’s reply. Employees may accept or reject the termination.
   1. If the employee does not reject termination, then the termination is confirmed after the notice expiration. Go to step 3.
   2. If the employee rejects termination within 7 days after receiving notification letter:
      1. Negotiation (between employer and employee/Labor Union if member) and mutual agreement within 30 days after rejection
         1. If the negotiations are successful: the termination proceeds as determined during the negotiation. Go to step 3.
         2. If the negotiations are unsuccessful, the employer must request permission from the institute for settlement of industrial relation disputes. If that is successful, the termination proceeds as determined. Go to step 3.
            1. If permission to terminate is rejected at this stage, the termination will then be disputed in court where a final determination will be made.
3. Employer reports termination. The employer then reports the termination to the ministry (provincial and district offices) responsible for government affairs related to manpower. 
4. Due payment. The employer then makes all appropriate payments, which could include:
   1. Severance / Service appreciation pays, if applicable
   2. Accrued untaken leave days
   3. Termination Bonus, if written in employment agreement
   4. Any other payments required