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A Separation Agreement sets out the terms when an employer and employee decide to end their working relationship by mutual consent in Indonesia. It's different from a standard termination letter because both parties negotiate and agree on specific terms, like severance pay, benefits continuation, and confidentiality obligations.

Under Indonesian labor law, these agreements help prevent future disputes by clearly documenting what each party will receive and provide. They typically include provisions about final salary payments, reference letters, and the return of company property. Many Indonesian companies use these agreements during restructuring or when offering voluntary separation packages to ensure smooth, legally compliant transitions.

Use a Separation Agreement when ending employment relationships amicably in Indonesia, especially during company restructuring, voluntary retirement programs, or performance-based exits. This document becomes essential when negotiating terms beyond standard severance packages or when dealing with senior executives who have access to sensitive information.

The agreement proves particularly valuable during mass layoffs, mergers, or when offering enhanced separation benefits. Indonesian labor laws require clear documentation of mutual termination terms, making these agreements crucial for protecting both parties from future claims. They're also important when dealing with non-compete clauses, intellectual property rights, or ongoing benefit arrangements.

• Simple Separation Agreement: Basic template with essential terms for straightforward employment separations, ideal for small businesses and junior staff exits
• Business Separation Agreement: Comprehensive version for corporate settings, including detailed IP protection and non-compete clauses
• Mutual Separation Agreement Marriage: Specialized format addressing both marital and business asset division when separating family-owned enterprises
• Spousal Separation Agreement: Focuses on married business partners' separation, covering both personal and professional asset distribution

• Human Resources Directors: Lead the drafting and negotiation of Separation Agreements, ensuring compliance with Indonesian labor laws and company policies
• Legal Counsel: Review and refine agreement terms, provide legal guidance, and ensure enforceability under Indonesian employment regulations
• Department Managers: Contribute input on performance history, handover requirements, and specific separation terms for their team members
• Departing Employees: Review, negotiate, and ultimately sign the agreement, often with their own legal representation
• Company Directors: Approve final terms and sign on behalf of the organization, especially for senior-level separations

• Employment Details: Gather complete employment history, current salary, benefits, and any existing contractual obligations
• Severance Package: Calculate all financial components including base severance, long service pay, and unused leave according to Indonesian labor laws
• Company Assets: List all company property to be returned, including devices, access cards, and confidential documents
• Post-Employment Terms: Define non-compete restrictions, confidentiality obligations, and reference letter arrangements
• Document Generation: Use our platform to create a legally-compliant agreement that includes all mandatory elements under Indonesian law
• Review Process: Set up internal validation steps and allow time for employee review before finalizing

• Party Information: Full legal names, positions, and company details as registered with Indonesian authorities
• Separation Terms: Clear statement of mutual agreement, effective date, and reason for separation under UU Ketenagakerjaan
• Financial Package: Detailed breakdown of severance, service appreciation pay, and other entitlements per Indonesian labor laws
• Confidentiality Clause: Specific terms about protecting company information and trade secrets
• Release Provisions: Mutual release of claims and future legal actions
• Post-Employment Obligations: Non-compete terms, reference arrangements, and ongoing commitments
• Execution Requirements: Signature blocks, witness provisions, and company stamp placement

A Separation Agreement differs significantly from a Business Acquisition Agreement in Indonesian law, though both involve ending certain business relationships. Here are the key distinctions:

• Primary Purpose: Separation Agreements focus on ending employment relationships and protecting both parties' interests, while Business Acquisition Agreements handle the complete transfer of business ownership and assets
• Legal Requirements: Separation Agreements must comply with Indonesian labor laws (UU Ketenagakerjaan), whereas Business Acquisition Agreements follow corporate and commercial regulations
• Scope of Terms: Separation Agreements cover severance, benefits, and post-employment obligations, while Business Acquisition Agreements address purchase price, asset transfer, and business continuity
• Timeline Impact: Separation Agreements typically take effect immediately or within a short notice period, but Business Acquisition Agreements often involve longer transition periods and multiple closing conditions