Easily manage employment in Indonesia

Indonesian labor law is unique in that it places the onus on employers to go the extra mile to avoid terminating an employee by negotiating to offer better working conditions, coaching, etc.

That aside, employee contracts can be terminated if a just cause is established, such as dishonesty, negligence, fraud, work-related offenses, sustained illness over the course of 12 months, or business contingencies like redundancy or insolvency.

There is no notice stipulated notice period but employers are generally expected to provide 30-days advance notice before terminating an employee.

Employees are entitled to severance pay that’s proportional to their tenure with an employer as defined below:

• 1 months wages: Up to 1 year of employment
• 2 months wages: Up to 1 year, but less than 2 years of employment
• 3 months wages: Up to 2 years, but less than 3 years of employment
• 4 months wages: Up to 3 years, but less than 4 years of employment
• 5 months wages: Up to 4 years, but less than 5 years of employment
• 6 months wages: Up to 5 years, but less than 6 years of employment
• 7 months wages: Up to 6 years, but less than 7 years of employment
• 8 months wages: Up to 7 years, but less than 8 years of employment
• 9 months wages: 8 or more years of employment

Probationary periods can only be set for employees on indefinite-term contracts and cannot exceed three months.