Ideal Structure of an Employment Contract (PKWT and PKWTT)
Table of Contents
- Introduction
- Cover Page
- Introduction / Opening Clause
- Type of Employment
- Job Title and Description
- Working Hours
- Salary & Benefits
- Leave Entitlements
- Rights and Obligations
- Termination Clause
- Dispute Resolution
- Confidentiality and Non-Compete (Optional)
- Signatures
- Attachments / Lampiran
- Closing
1. Introduction
Whether you’re hiring temporary staff or long-term employees, the employment contract is your first line of legal protection and people management. In Indonesia, there are two common types: PKWT (Perjanjian Kerja Waktu Tertentu) and PKWTT (Perjanjian Kerja Waktu Tidak Tertentu). Each has its own structure and legal implications under labor regulations like UU No. 13/2003, UU Cipta Kerja, and PP No. 35/2021.
2. Cover Page
- Title of Agreement (e.g., "Perjanjian Kerja Waktu Tertentu")
- Company logo or letterhead
- Date and location of signing
3. Introduction / Opening Clause
- Full legal name and address of employer
- Full legal name, KTP number, and address of employee
- Statement of intent and legal references
4. Type of Employment
PKWT:
- Duration of employment
- Basis: time-based or project-based
- Compliance with max duration and renewal limits
PKWTT:
- Open-ended nature
- Probation period (max 3 months)
5. Job Title and Description
- Position and level
- Duties and responsibilities
- Assigned location(s)
6. Working Hours
- Workdays and hours
- Shift and rest period (if applicable)
- Overtime policy
7. Salary & Benefits
- Base salary (net/gross) and payment schedule
- Allowances and bonuses
- Other benefits: BPJS, health, etc.
8. Leave Entitlements
- Annual leave
- Sick leave (with/without doctor’s letter)
- Maternity/paternity leave
- Special/unpaid leave
9. Rights and Obligations
- Employer’s responsibilities (e.g., payment, tools)
- Employee’s duties (e.g., SOP, ethics)
- Code of conduct references
10. Termination Clause
PKWT:
- Ends automatically
- Early termination conditions
- No severance unless early termination by employer
PKWTT:
- Grounds for termination
- Notice period
- Severance and compensation per law
11. Dispute Resolution
- Internal dispute procedure
- Mediation/Bipartite
- Industrial Relations Court (PHI)
12. Confidentiality and Non-Compete (Optional)
- Duration and scope of confidentiality
- Non-compete clause
- Return of company property
13. Signatures
- Signatures of both parties
- Names, titles, and date
- Company stamp (if applicable)
- Witness signature (recommended)
14. Attachments / Lampiran
- Job description
- Salary breakdown
- Company Regulation (PP/PKB)
- Code of Conduct or internal SOPs
15. Closing
Having a clear and compliant structure for your employment contracts is essential—whether you're hiring short-term or long-term employees. A well-drafted PKWT or PKWTT not only ensures compliance but also sets clear expectations from day one. If your contracts haven't been updated post-Omnibus Law or PP No. 35/2021, now is the time to revisit them. A small clause error today could become a big legal issue tomorrow.
