Service Overview
A Fixed-Term Employment Agreement (PKWT) is a contract between an employer and an employee in Indonesia, intended for a specific, limited period, in line with labor regulations. PKWT contracts are commonly used for temporary work or projects, such as specific assignments, seasonal work, or roles tied to new products or services. Here are some key points of a PKWT:
1. Contract Duration
- A PKWT (Fixed-Term Employment Agreement) typically has a maximum duration, such as two years, with the possibility of a one-time extension for an additional year, according to the Indonesian Job Creation Law.
- If the employee continues to work past the PKWT’s end date without a valid extension, the contract may automatically convert to an Indefinite-Term Employment Agreement (PKWTT).
2. Rights and Obligations
- PKWT employees are entitled to wages, social security, and other rights specified in labor regulations.
- The employer is obligated to provide agreed-upon benefits and comply with the contract and applicable laws.
3. No Severance Pay
- If the PKWT naturally ends at the end of the agreed term, the employee does not receive severance pay.
- However, if the employer ends the PKWT before the agreed date, compensation or damages may be required.
4. End-of-Contract Compensation
- When the PKWT expires, the employer must provide the employee with compensation based on their length of employment, as required by government regulations.
5. Types of Work Allowed
- PKWT contracts are generally intended for roles that are temporary, seasonal, or related to specific projects.
A PKWT must be documented in writing and signed by both parties. Non-compliance with PKWT regulations can lead to labor disputes, potentially requiring mediation or arbitration.
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