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The Obligation to Register Fixed Term Employment Agreements in Indonesia

The Fixed Term Employment Agreement or Perjanjian Kerja Waktu Tertentu (PKWT) based on Indonesian government regulation, is regulated under Government Regulation No. 35 of 2021 on Fixed-Term Employment Contracts, Outsourcing, Hours Of Work, And The Procedure For The Termination Of Employment (“GR 35/2021”), which implements the Indonesian Job Creation Law under the government's effort to provide greater protection to employees (workers/labors).

Article 4 paragraph (1) of GR 35/2021 recognizes two types of PKWTs, which are based on time and the completion of work. In addition, paragraph (2) in the same Article confirms that a PKWT shall not be held for permanent work. Therefore, PKWTs are only for work that is temporary and can be completed within a certain period of time.

The working period of a fixed term employment agreement starts when the employment is effective. Article 8 paragraph (1) of the GR 35/2021 states that the working period can be a maximum of five years. If necessary, it can be extended based on the agreement between the employer and the employee, provided that the entire time period and the extension do not exceed five years, as set out in paragraph (2) of Article 8. Failing to comply with these provisions will result in the employee being deemed to be on a permanent employment contract or Perjanjian Kerja Waktu Tidak Tertentu (PKWTT).

Regarding the registration, Article 14 paragraph (1) of GR 35/2021 requires employers to register their PKWT employees with the Indonesian Ministry of Manpower via an online system at least three working days from the date of signing the work agreement. If this is not feasible, then the employer can undertake manual registration at the local employment office at least seven working days after signing the agreement, as set out in paragraph (2) Article 14 of GR 35/2021.

The online registration is managed by the local employment office. Here's the the registration process for a PKWT via an online system for companies in Jakarta:

  1. The employer registers a PKWT at pkwt-disnakertransgidkijakarta.com
  2. The Department of Manpower Transmigration and Energy of DKI Jakarta (Disnakertransgi) sends an email verification of e-PKWT.
  3. The employer logs in and completes the company profile section.
  4. The employer uploads the PKWT contract drafts and fills in the PKWT employees' data.
  5. The officer from the Disnakertransgi will check and review the registration.
  6. If the registration is rejected, the employer fills in the PKWT employees' data again based on the officer's statement.
  7. The list of the employees' names appears on the website. The employer chooses the employees who will be registered on the e-PKWT online system.
  8. If the registration is accepted, the Disnakertransgi administrator will send an email verification of the registered employees' data.
  9. After obtaining the email verification, the employer takes the Proof Letter of PKWT Registration to the Disnakertrangi Office or to an office of Sub-Disnakertrangi.
  10. The Proof Letter of PKWT Registration will be printed and signed by an authorized official in no later than five working days.

For companies outside Jakarta, they must register with a relevant local employment office. It will follow a similar process as long as the local employment office has an online system. Otherwise, according to Article 14 of GR 35/2021 paragraph (2), the employer must conduct a manual registration at the local employment office at least seven working days after the signing of the agreement.

Schinder Law Firm is one of many corporate law firms in Indonesia with many experienced and professional civil lawyers, labor lawyers and investment lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Schinder Law Firm help you register your PKWT to the related institutions. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author: Dewi Susanti

Schinder Consultant London Ltd.


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