Top 10 questions to ask when you HIRE or FIRE an employee in Indonesia
Does the employee have a right to work in Indonesia or does the employee need a work visa?
Is the employment offer subject to any condition precedent (e.g. satisfactory reference check, obtaining the necessary qualification)?
Is the recruitment screening and decision making process fair and free from challenge of discrimination?
Is the employee free from restrictive covenants to take up the job?
Is the personal data of the candidate/employee collected or dealt with in accordance with Indonesian law?
Does the employee need to be a member of the mandatory social security program (JAMSOSTEK) in Indonesia or is the employee exempt?
Does the remuneration of the employee meet the statutory minimum wage requirement?
Is the employee fixed term which requires an Indonesian language or bilingual written contract and is subject to maximum first term of two years? Is the employee intended to be hired on a permanent basis subject to the maximum permitted 3 month probationary period with or without a written employment agreement? If a written contract is used for a permanent employee, is it in the Indonesian language or bilingual? All employees are entitled to statutory required benefits granted under Indonesian law (e.g., statutory annual leave, statutory holidays, rest days, and generous termination benefits etc.), but should the company be considering special secondment arrangements for expatriate employees to lawfully avoid the termination procedures and benefits under Indonesian law?
Are mandatory safety training or medical checkup required for the position of the employee based on the employer's internal requirements?
Have all the legal requirements with respect to occupational safety and health been complied with?
Does the employer have a valid reason for the termination?
Does the employer have sufficient evidence to terminate the employment of an employee on the alleged ground?
Is the employee on paid sick leave for less than one year, or on maternity leave or other types of leave regulated by Indonesian law, which need to be taken into account when planning a termination?
Is the termination free from challenge that one of the grounds of termination was sex, disability, family status or race discrimination?
What termination payments (e.g. outstanding wages, annual leave pay, severance payment, long service payment, and the so-called health and housing allowance) will the employee be entitled to given the specific reason for termination? Has the employer expressly provided for notice of termination or pay in lieu of notice which does not apply in Indonesia (and should never be included in employment documentation in Indonesia), but if so provided, may give rise to a supplementary claim for pay in lieu of notice?
What restrictive covenants are relevant to the subject employee (confidentiality or less commonly non-solicitation and non-competition) and what are the requirements for such covenants to be enforceable?
Any special treatment required with respect to any unvested share options or other benefits after termination of employment?
Will the employer pay an ex-gratia payment in return for the employee entering into settlement agreement in full and final settlement of all claims which the employee has or may have recognizing that termination at will is not recognized in Indonesia and that employees are entitled to full salary until their individual termination is approved by the Labour Court and all applicable appeal periods have expired or appeal decisions rendered?
Has the requisite withholding tax filing been made to the Indonesian Tax Office informing the authority regarding the relevant termination payments and related withholdings?
Has the Immigration Department been informed regarding the termination of employment in the circumstances that the employee is under work visa and has the employer obtained the necessary Exit Permit (EPO)?