INDONESIA Law and Practice Contributed by: Indra Setiawan, Ridzky Firmansyah Amin, Marintan Panjaitan and Tifanny Natalia, ABNR Counsellors at Law
ABNR Counsellors at Law Graha CIMB Niaga 24th Floor Jalan Jenderal Sudirman Kav 58 Jakarta 12190 Indonesia
Tel: +62 212 505 125 Fax: +62 212 505 001 Email: info@abnrlaw.com Web: www.abnrlaw.com
1. Employment Terms 1.1 Employee Status
• type of work; and • the wage. The terms and conditions that must be included in a written employment agreement include: • name, address and line of business of the employ - er; • name, gender, age and address of the employee; • title or type of work; • location of workplace; • the wage and how it will be paid; • terms of work, stating the rights and obligations of both the employer and employee; • effective date and validity period of the employ - ment agreement; • place and date where the employment agreement is made; and • signatures of the parties. 1.3 Working Hours Regular working hours in Indonesia are considered to be: • seven hours per day and 40 hours per week for six working days per week; or • eight hours per day and 40 hours per week for five working days per week. Flexible-working-hour arrangements are possible subject to consensus between the parties under the employment agreement, employee handbook (also known as company regulation) or collective bargain - ing agreement.
Indonesian employment law does not distinguish between blue- and white-collar workers. The only distinction it makes between employees relates to the type of employment agreement (ie, whether it is permanent or fixed-term). The two types of employ - ment agreements differ in various aspects, including the employee’s rights and entitlements, the possibility of probation, the duration of employment, the type of work performed by the employee, and entitlements An employment agreement for a specified period (fixed-term) must be in writing and in Indonesian (or Indonesian should prevail if the agreement is bilin - gual). It is established based on either the employment period or the completion of specific work. If based on an employment period, the agreement will have a maximum cumulative period of five years (including any extension thereof). If based on the completion of specific work, the agreement must pertain to work that is either completed in a single assignment or is temporary in nature. that accrue upon termination. 1.2 Employment Contracts However, an employment agreement for a perma - nent employee may be made orally or in writing. In the former case, the employer must issue a letter to the employee confirming permanent employment. The appointment letter must contain: • name and address of the employee; • starting date of employment;
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