INDONESIA LAW AND PRACTICE Contributed by: Agus Ahadi Deradjat (Agung), Gustaaf Reerink, Adri Dharma, Karina Widyaputri and Ilma Sulistyani, ABNR Counsellors at Law
bation period of up to three months. This letter must include at least the following: • name and address of the employee;
adequate rest and food and beverages with a minimum caloric value of 1,400 kcal. This requirement cannot be substituted with mon - etary compensation. • Overtime compensation – employers must pay overtime wages in accordance with the formula prescribed by applicable laws and regulations. Employees in roles such as thinkers, planners, implementers, or supervisors, whose working hours cannot be standardised and who receive higher wages, are generally not entitled to over - time pay. However, this exemption must be clearly stated in the employment agreement, employee handbook, or collective labour agree - ment. If not explicitly stipulated, the employer is obligated to provide overtime compensation. 4.4 Termination of Employment Contracts In Indonesia, all employment terms and condi - tions are governed by the employment contract between the employer and employee, as well as by applicable laws and regulations, includ - ing the Labour Law and GR 35/2021, the com - pany’s internal policies, and any relevant col - lective labour agreements. As such, termination of employment must comply with these legal frameworks, including the procedures and enti - tlements involved. The Labour Law emphasises that termination of employment should be a last resort. Employers, employees, and the government are required to make every effort to avoid termination. However, if termination is unavoidable, it must be based on legally recognised grounds and follow proper procedures.
• date the employee begins work; • type of work to be performed; and • amount of wages to be paid. 4.3 Working Time
The Indonesian Labour Law sets out clear stand - ards for working hours and overtime, with flex - ibility for certain business sectors. Standard Working Hours The law specifies two standard working hour arrangements: • seven hours per day and 40 hours per week for companies operating on a six-day work - week, or • eight hours per day and 40 hours per week for companies with a five-day workweek. These provisions may not apply to companies in specific sectors that require continuous opera - tions or have unique scheduling needs, where alternative arrangements are permitted. Overtime Work • Employer instruction and employee consent – overtime must be explicitly ordered by the employer and agreed to by the employee, either in physical or digital form. Employers are required to maintain records of employees who consent to work overtime, including the duration of such work. • Maximum duration and rest provisions – the maximum allowable overtime is four hours per day and 18 hours per week, excluding weekly days off and official public holidays. For employees working overtime for four hours or more, employers must provide
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