Employment

Labor Law in Indonesia

Table of Contents 1.

Introduction.................................................................................................................................... 1

2.

Law No. 13 of 2003 on Labor........................................................................................................ 1

3.

Salary and Allowances................................................................................................................... 3

4.

Employment of Foreigners ............................................................................................................ 6

5.

Social Security ............................................................................................................................... 6

6.

Termination of Employment .......................................................................................................... 8

7.

Termination Payments ................................................................................................................... 9

8.

Outsourcing.................................................................................................................................. 10

9.

Taxation ....................................................................................................................................... 11

Attachment A ........................................................................................................................................ 13 Attachment B ........................................................................................................................................ 14

Labor Law in Indonesia

1.

Introduction

The sources of labor law in Indonesia are widely dispersed among a number of national laws and regulations, presidential decrees, ministerial decrees and circular letters. Some of these sources are relatively recent, while others are quite old, some even issued in the colonial period. In general, these laws and regulations are applicable to all "employees", regardless of their position (i.e. whether they are managerial or non-managerial employees) or their status (i.e. whether they are indefinite (permanent) or definite (fixed term) period employees). However, there are some provisions that exempt certain groups of employees from receiving certain benefits e.g. employees in managerial positions are not entitled to overtime.

2.

Law No. 13 of 2003 on Labor

In an effort to synthesize the diverse body of laws and regulations on the protection of employees, the Indonesian Government enacted Law No. 13 of 2003 on 25 March 2003 ("Labor Law"). The Labor Law contained a significant number of new provisions and also combined a large portion of the various labor laws and regulations into a single main law.

2.1

General Principles under the Labor Law

The Labor Law sets out general principles and requirements in relation to labor and employment matters, including among other things: •

employment agreements, Company Regulations and Collective Labor Agreements;

•

the protection of certain groups of employees, such as disabled employees, children and women;

•

discrimination;

•

working hours (including overtime);

•

health and safety;

•

wages (including the principle of a minimum wage);

•

paid leave e.g. annual leave, maternity leave, religious leave, etc;

•

welfare facilities e.g. worker cooperatives;

•

principles of the industrial relationship e.g. the obligation to establish a bipartite forum, Company Regulations and the negotiation of Collective Labor Agreements;

•

outsourcing (both "outsourcing of work" and "outsourcing of labor");

•

strikes and lock outs; and

•

termination of employment.

The Labor Law also includes sanctions for non-compliance with certain requirements. Sanctions are administrative and criminal.

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2.2

Types of Employment under the Labor Law

The Labor Law refers to 2 main types of employment: • •

indefinite period (i.e. permanent) definite period (i.e. fixed term)

The type of employment covered in these 2 main categories is determined based on the type of work i.e. whether it is permanent or temporary in nature or whether the work can be completed within a certain period. The Labor Law does not distinguish between the structure of salary and benefits of employees hired under these 2 types of employment. Generally, a definite period employee is entitled to the same benefits as an indefinite period employee. However, the structure of the termination package applicable to each type of employment is quite different. See section 7 for further details on the requirements for termination of employment in Indonesia and the structure of statutory termination payments. Further differences between the 2 types of employment are explained below. (a)

Indefinite Period Employment Indefinite period employment is the employment of an employee for an indefinite period. An employer may impose a probationary period of a maximum of 3 months. During this probationary period, provided that the probationary period was agreed in writing an employer may terminate the employment without notice and without the obligation to pay a termination package. Otherwise, unless an employee agrees to a "mutual termination", the reason for an employer to terminate an indefinite period employee must be a reason set out in the Labor law (and there are not many).

(b)

Definite Period Employment Definite period employment is the employment of an employee for a certain (or fixed) period of time. An employment agreement for a definite period can only be made for certain work which as to the type and characteristic or the work activities concerned will be completed within a certain time period, i.e. work that: •

is completed once and for all, or is of a temporary nature;

•

is completed in a short period of time (3 years at most);

•

is considered to be of a seasonal nature, or to be repeated (e.g. seasonal harvesting); and

•

is related to a new product, new activities, or supplemental products that are still experimental or in the exploration stage.

An employer can not impose a probationary period on a definite period employee. As a general rule, the maximum validity of an initial definite period employment agreement is 2 years. This period can be extended once for up to 1 year. Subsequently, it is possible to renew a definite period employment agreement once for up to 2 years, but only after a break in employment for at least 30 calendar days.

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As further regulated in Decree of the Minister of Manpower No. Kep-100/Men/VI/2004 regarding the Implementing Regulation on the Definite Period Employment Agreement ("Decree 100"), the maximum validity of an initial definite period employment agreement and the possibility for its extension and renewal also depends on the type of work. The following table summarizes the types of work and the relevant maximum validity of an initial definite period employment agreement and its extension and renewal.

Initial Contract Period

Type of Work

Extension

Renewal

Permitted Yes/No

Max. Period

Permitted Yes/No

Max. Period

Completed once and for all or temporary nature

3 years or earlier based on completion of the work specified in the agreement

No.

-

Yes, but only once and after a break of 30 calendar days

2 years

Seasonal

Depends on the weather or season or order/target.

Not specified

-

No

-

2 years

Yes

1 year

No

-

Related to a new product, new activities, or supplemental products that are still experimental or in the exploration stage.

Daily Workers A daily worker is also categorized as a definite period employee. Under Decree 100, the employment of a daily worker is defined as the employment of a worker to perform a certain job, the volume of which and the period within which the job is to be performed can be changed from time to time. A daily worker receives his/her wage based on daily presence at the job site. The work must be completed in a relatively short period of time (3 months at the most) with a maximum of 20 working days per month. A daily worker is not bound by the general working hours applicable at an employer.

3.

Salary and Allowances

3.1

Definition of Salary

The Labor Law defines "salary" as compensation in the form of money received by an employee from an employer, determined and paid in accordance with the employment contract or applicable laws and

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regulations. Salary may also include allowances for the employee and his/her family for certain work and/or services that have been or will be performed.

3.2

Components of Salary

The Labor Law does not specifically set out the components of salary - it merely states that if the components of salary consist of "basic salary" and "fixed allowance" the amount of the basic salary must be at least 75% of the total salary. The Labor Law refers to a "fixed allowance" as a payment to an employee made regularly which is unrelated to the employee’s attendance at work or performance. An example is a monthly housing allowance. Under regulations issued prior to the Labor Law a "non-fixed allowance" was defined as an irregular payment made to the employee and family that need not be directly related to the job, nor paid along with the basic salary. An example is a daily transport or meal allowance which is only paid if the employee works. Except THR (see below), employers are not obliged to pay employees allowances under the Labor Law. Depending on the type of payment concerned, the determination of the components of salary might differ for different types of calculations e.g. the components of salary used to calculate a termination payment could be different from those used to calculate overtime pay. The components of "salary" that are used to calculate a termination payment, THR and social security contributions are: • •

basic salary; and fixed allowances.

3.3

Salary Structure and Grade

The Labor Law requires employers to determine the salary structure and grade of individual employees based on their position within the employer, their years of service, education and competency. The Labor Law does not state that the details of the salary structure and pay scale of an employer must be made available to all employees.

3.4

Minimum Wage

Each provincial level government annually issues a minimum wage that is applicable in the province. In some provinces, there may also be a sectoral minimum wage, (i.e. the minimum wage applicable in certain industry sectors) and city minimum wage (i.e. the minimum wage applicable in certain cities within the province). Neither the sectoral minimum wage nor the city minimum wage should be lower than the applicable provincial minimum wage.

3.5

Religious Festivity Allowance ("THR")

THR is a mandatory payment that must be made by an employer to all employees in relation to the major religious holiday celebrated by the employee. There is no exception for foreign employees.

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Under Minister of Manpower Regulation No. Per-04/Men/1994, THR must be paid no later than 7 days before the relevant religious holiday. For the religions the religious celebration is: • • • •

Christian and Catholic - Christmas Muslim - Idul Fitri (end of Ramadhan) Hindu - Seclusion Day Buddhist - Waisak

The amount of THR for an employee who has worked for 12 consecutive months is equal to 1 month’s salary (as mentioned above "salary" means basic salary plus fixed allowances). For an employee with a service period of less than 12 months but more than 3 months, the amount of THR is pro-rated according to the employee's actual months of service with the employer. Employees with less than 3 months service with an employer are not entitled to the THR.

3.6

Salary Deductions

Under Government Regulation No. 8 of 1981 on Wage Protection ("Regulation 8"), salary deductions by an employer for third parties are only allowed if there is a specific power of attorney from the employee authorizing such deductions. This rule is not applicable to salary deductions in relation to payments that employees must make to the State e.g. contributions to the mandatory social security programs and salary deductions for the purpose of income tax. Under Regulation 8, a debt owing by an employee to an employer can be deducted by the employer from the employee's salary. However, Regulation 8 limits the amount that can be deducted from the employee’s salary to a maximum of 50% of the salary that the employee should receive. If the employee is paid his/her salary on monthly basis, the deduction can only be for up to 50% of the employee’s monthly salary. In relation to deductions from a termination payment, Circular Letter of the Minister of Manpower and Transmigration No. SE-01/MEN/1982 on the Implementing Guidelines of Regulation 8 states that it is possible to deduct any amount owed by an employee from the employee's termination payment. Unlike Regulation 8, Circular Letter 1 is silent on there being any limit on the amount that can deduct from an employee's termination payment.

3.7

Salary During Absence Due to Illness

The Labor Law provides that an employee who is ill is not obliged to work. Indonesia does not have a concept of a certain number of sick days per year similar to that found in other countries. Instead an employee's salary may be deducted if an employee is absent due to illness as follows: •

first 4 months of illness

:

100%

•

second 4 months of illness

:

75%

•

third 4 months of illness

:

50%

•

each subsequent month of illness (until termination of employment)

:

25%

An employer may terminate an employee who has been continuously sick for 12 months.

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4.

Employment of Foreigners

4.1

Requirement to Obtain a Work Permit

To employ a foreigner an employer must obtain a permit (commonly referred to as an "IMTA") from the Minister of Employment.

4.2

Requirement to Obtain the Foreign Worker Manpower Utilization Plan ("RPTKA")

An employer who intends to employ foreigners must first obtain an RPTKA. An RPTKA is essentially an employer’s plan in relation to the utilization of foreign workers for certain positions in the employer. The plan should include the number of foreign workers, the period of work and the plan to replace the foreign workers with Indonesian employees. Initial RPTKA applications must be submitted to the Ministry of Employment for approval. Renewals may be submitted to a local office of the Ministry of Employment depending on the location of work. The reason for requiring employers to obtain a RPTKA is that foreigners can only be employed in certain positions and for a certain period of time.

4.3

Appointing a Counterpart

Except for foreigners who hold the position of a Director or Commissioner of a company or a Chief Representative of a representative office, an employer must appoint 1 Indonesian worker as a counterpart to the foreigner.

4.4

Ratios

The number of foreigners an employer in Indonesia is able to employ depends on a variety of factors e.g. the type of employer (i.e. whether it is a company or a representative office), the industry, the size of employer, the number of Indonesian employees etc. In relation to the number of Indonesian employees required for each foreigner, the Ministry of Employment applies "ratios". Such ratios are based on current unwritten policy which changes from time to time.

5.

Social Security

5.1

Social Security in Indonesia

Law No. 24 of 2011 on Social Security Organizing Agencies ("BPJS Law") amended various social security programs that were previously known as "Jamsostek". The BPJS Law sets out the general principles on social security for all citizens in Indonesia. Under the BPJS Law, everybody (including foreigners working in Indonesia for at least 6 months) must be enrolled in the social security program that is administered by the relevant Social Security Organizing Agency (Badan Penyelenggara Jaminan Sosial "or BPJS").

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There are 2 BPJS agencies: (a)

"BPJS Manpower" which administers the Occupational Accident Security, Death Security, Old Age Security and Pension programs; and

(b)

"BPJS Health" which administers the Health Security Program.

5.2

BPJS Manpower

BPJS Manpower consists of 4 programs: (a)

Occupational Accident Security Program (Jaminan Kecelakaan Kerja or “JKK”);

(b)

Death Security Program (Jaminan Kematian or “JK”);

(c)

Old Age Security Program (Jaminan Hari Tua or “JHT”); and

(d)

Pension Program (which is scheduled to commence in 2029).

Under Jamsostek there were also 4 programs i.e. JKK, JK, JHT and a Health Care Security Program (Jaminan Pemeliharaan Kesehatan or "JPK"). JKK, JK and JHT were mandatory, however, JPK was optional if the employer provided an equivalent health care program. However, this is no longer the case. Under the BPJS Law, the "Health Security Program" is now mandatory and is administered by BPJS Health (see below). In addition, under Jamsostek if a foreigner was already covered by a social security program in their home country which provided similar social security programs to Jamsostek, the employer was not obliged to enrol the foreigner in Jamsostek. As mentioned above, under the BPJS Law foreigners working in Indonesia for at least 6 months must be enrolled in BPJS Manpower and BPJS Health.

5.3

BPJS Manpower Contributions

BPJS Manpower contributions are calculated based on a certain percentage of the employee’s salary as follows: (a)

JKK The percentage depends on the industry of the employer, but ranges from 0.24% to 1.74%. This contribution is fully paid by the employer.

(b)

JK The contribution is 0.3% of the employee’s monthly salary and is paid by the employer.

(c)

JHT The contribution is 5.7% of the employee’s monthly salary. 3.7% of this contribution is paid by the employer and 2% is paid by the employee (deducted from employee’s salary but paid by the employer to BPJS Manpower);

An employee should be covered by the BPJS Manpower for the above programs from the 1st day he/she joins the employer.

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5.4

BPJS Health

Presidential Regulation No. 12 of 2013 on Health Security as amended by Presidential Regulation No. 111 of 2013 on Amendment to Presidential Regulation No. 12 of 2013 on Health Security ("Health Security Regulations") are the implementing regulations for the health care program which is administered by BPJS Health. All Indonesians citizens are required to become members of BPJS Health and all foreigners who have been working in Indonesia for at least 6 months must be enrolled in BPJS Health. Unlike Jamsostek, there is no exception for the enrolment of foreigners.

5.5

BPJS Health Contributions

There are different contribution rates for each type of members, i.e.: No. (a)

(b)

Type of Members

Contribution Rate

Civil servants and employees of state-owned enterprises ("BUMN")

•

3% to be paid by the State/BUMN

•

2% to be paid by the employee

Private sector employees

•

4% to be paid by the employer

•

(c)

Non-wage recipients and nonemployees

0.05% to be paid by the employee (note that effective 1 July 2015, this will be increased to become 1%)

•

Class 1: Rp.59,500 per month/per person;

•

Class 2: Rp.42,500 per month/per person; or

•

Class 3: Rp.25,500 per month/per person

The relevant individual can choose the Class they wish to be on.

6.

Termination of Employment

Termination of employment in Indonesia is governed by the Labor Law and Law No. 2 of 2004 on the Settlement of Industrial Relations Disputes. A principle under the Labor Law is that employers, employee, labor unions and the Government are obliged to make every effort to avoid termination of employment. Efforts in this regard include positive actions aimed at avoiding termination of employment, such as scheduling working hours, taking cost-efficiency measures, altering working methods and providing developmental programs to employees. There is no unilateral right of termination of employment in Indonesia similar to that found in other countries. Instead, subject to certain very limited exceptions, the general rule is that employers must first obtain a favorable decision on the termination of employment from the Industrial Relations Court ("IR Court") or the Supreme Court (if a decision of the IR Court is appealed by one or both of the parties).

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The exceptions to having to obtain a prior court order to terminate is not applicable if the termination is: •

during the probation period of the employee (as long as the probation period is in writing);

•

due to the employee's voluntary resignation, with no indication of any pressure/intimidation from the employer;

•

due to the expiry of the employee’s employment agreement for a definite period;

•

due to the employee reaching the retirement age as stipulated under the employment agreement, Company Regulations or Collective Labor Agreement, or other laws and regulations;

•

due to the employee's death; or

•

due to criminal proceedings resulting in the employee being unable to work for 6 consecutive months.

If an employee agrees to a "mutual termination" and enters into a joint agreement with the employer that is registered with the IR Court, a prior court order is not required. Registration of a joint agreement with the IR Court is an administrative process and not an approval process.

7.

Termination Payments

7.1

Structure of Termination Payments

The termination payment depends on whether an employee is employed under a definite period employment agreement or an indefinite period employment agreement. (a)

Indefinite Period Employees The termination payment paid to an indefinite period employees consists of 3 components: • • •

severance pay; long service pay; and compensation of rights.

Attachment A sets out details of these 3 components. In addition to the 3 components, the Labor Law introduced a new element called "separation pay" (uang pisah). Separation payment applies to termination of employment due to the resignation of an employee and termination due to an employee's absence without leave for 5 consecutive working days or more. The Labor Law provides that the amount of the "separation pay" is as stipulated under the employment agreement, the Company Regulations or Collective Labor Agreement. In addition, "separation pay" is only to be paid to employees whose duties and functions do not "directly represent" the employer's interests. The Labor Law is not clear on who is included in this category of employees. However, it is generally assumed that an employee whose duties and functions directly represent the employer’s interests refers, at a minimum, to

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the members of the Board of Directors of a company. Some officials of the Ministry of Employment have interpreted this provision to mean "managerial level employees" as well (e.g., HR managers, finance managers etc). (b)

Definite Period Employees An employee employed under a definite period employment agreement and terminated before the contract period expires is not entitled to a termination payment that consists of severance pay, long service pay and compensation of rights. Instead, a party that terminates a definite period employment agreement before its expiry (i.e. employer and employee) is obliged to pay to the other party compensation in the amount of the employee’s salary until the end of the period of the definite period employment agreement.

7.2

Termination Payment Formula (For Indefinite Period Employees)

Whether an employee is entitled to severance pay, long service pay, compensation of rights and separation payment depends on the reason for the termination of employment. Attachment B sets out a summary of the various reasons for termination (and the applicable statutory termination payment) under the Labor Law.

8.

Outsourcing

8.1

Outsourcing in Indonesia

There are 2 types of outsourcing in Indonesia as follows: •

outsourcing of work – one company outsources part of the implementation of the work of the company to another company

•

outsourcing of labor - one company supplies labor (i.e. workers) to another company

There is currently no exemption for affiliated entities to not have to comply with the requirements for outsourcing.

8.2

Outsourcing of Work

There are numerous requirements for outsourcing of work in Indonesia. These are briefly summarized as follows: (a)

Flowchart The relevant Industry Association of the employer needs to issue a Flowchart that sets out what work can be outsourced and what work cannot be outsourced.

(b)

Description of Supporting Work An entity wanting to outsource work to another entity (commonly referred to as the "Service User") must submit a Description of Supporting Work ("DOSW") to the relevant office of the Ministry of Employment. A DOSW sets out what work will be outsourced by the Service

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User. A copy of the Flowchart must be attached to the DOSW i.e. to show what work can be outsourced by the Service User. (c)

Proof of Report If the DOSW is in order, the relevant office of the Ministry of Employment will issue a Proof of Receipt.

(d)

Outsourcing Agreement The Service User and the entity that will conduct the outsourced work (commonly referred to as the "Service Provider") need to enter into an Outsourcing Agreement.

(e)

Proof of Registration The Service Provider will need to register the Outsourcing Agreement with the relevant office of the Ministry of Employment. Then the work can start.

(f)

Sanctions for Non-Compliance If the requirements for outsourcing of work are not complied with the impact is that by law the employees of the Service Provider conducting the work will be deemed to be employees of the Service User.

8.3

Outsourcing of Labor

Outsourcing of labor is highly regulated and limited to 5 areas only: (a)

cleaning services;

(b)

catering services for employees;

(c)

security services;

(d)

support services in the mining and oil sector; and

(e)

transportation services for employees.

In addition the company providing the labor must be a licensed labor supply company. If the requirements for outsourcing of labor are not complied with the impact is that by law the employees of the company that provides the labor will be deemed to be employees of the entity that uses the labor.

9.

Taxation

Under the Indonesian Income Tax Law, an employer is obliged to withhold a certain amount of an employee’s taxable income for the purpose of payment of the employee's income tax to the State.

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In Indonesia income tax is calculated based on the following progressive tax rates: Taxable Income

Tax Rate

Up to Rp. 50,000,000

5%

Rp. 50,000,000 – Rp. 250,000,000

15%

Rp. 250,000,000 – Rp. 500,000,000

25%

Above Rp. 500,000,000

30%

A different tax rate applies for payments made to employees upon termination of employment. The applicable tax rates for termination payments are: Taxable Income

Tax Rate

Up to Rp. 50,000,000

Exempted

Rp. 50,000,000 – Rp. 100,000,000

5%

Rp. 100,000,000 – Rp. 500,000,000

15%

Above Rp. 500,000,000

25%

For further information, please contact: Susie Beaumont : Tel: +62 21 2960 8608 E-mail: [email protected] Alvira M. Wahjosoedibjo Tel: +62 21 2960 8503 E-mail: [email protected]

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Attachment A Components of a Termination Payment (indefinite period employees) 1.

Severance Pay (Article 156(2) of Law No. 13 of 2003) • • • • • • • • •

2.

Long Service Pay (Article 156(3) of the Labor Law) • • • • • • • •

3.

1 month salary for a service period of less than 1 year; 2 months salary for a service period of 1 year but less than 2 years; 3 months salary for a service period of 2 years but less than 3 years; 4 months salary for a service period of 3 years but less than 4 years; 5 months salary for a service period of 4 years but less than 5 years; 6 months salary for a service period of 5 years but less than 6 years; 7 months salary for a service period of 6 years but less than 7 years; 8 months salary for a service period of 7 years but less than 8 years; 9 months salary for a service period of 8 years or more.

2 months salary for a service period of 3 years or more, but less than 6 years; 3 months salary for a service period of 6 years but less than 9 years; 4 months salary for a service period of 9 years but less than 12 years; 5 months salary for a service period of 12 years but less than 15 years; 6 months salary for a service period of 15 years but less than 18 years; 7 months salary for a service period of 18 years but less than 21 years; 8 months salary for a service period of 21 years but less than 24 years; 10 months’ salary for a service period of 24 years or more.

Compensation of Rights (Article 156(4) of the Labor Law) • • • •

compensation for annual leave to which the employee is entitled, but which is not taken by the employee; compensation for travel expenses or costs for the employee and his/her family to return to the original location of hire; compensation for housing and medical costs, which is 15% of the total amount of severance pay and long service pay; and other compensation as stipulated under the employment agreement, Company Regulation or Collective Labor Agreement.

Components of Salary The components of "salary" that are used to calculate a termination payment under the Labor Law consist of: •

current basic salary; and

•

fixed allowances (i.e. payments to the employee made regularly and not related to the employee's attendance, or achievements within a certain job).

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Attachment B Statutory Termination Payments (indefinite period employees)

No. 1.

2.

3. 4.

5.

6.

7.

8.

9.

14

2x

Long Service Pay 1x

Separation Compensation Pay ("Uang of Rights Pisah") 1x None

2x

1x

1x

None

2x

1x

1x

None

2x

1x

1x

None

2x

1x

1x

None

1x

1x

1x

None

1x

1x

1x

None

1x

1x

1x

None

1x

1x

1x

None

Reason for Termination of Employment

Severance Pay

Change of employer's status, merger or consolidation of the employer, and the employer does not wish to continue the employment relationship (Article 163(2)) Closure of the employer for efficiency measures, not for financial reasons or force majeure (Article 164(2)) Employee’s death (Article 166) Employee reaching pension age, if the employer has not enrolled the employee in a pension plan (Article 167(5)) Employee termination where the employee makes allegations against the employer which are proven (Article 169(1) and (2)) Employee's violation of employment agreement, Company Regulations or Collective Labor Agreement (after 3 consecutive warning letters) (Article 161(1) and (3)) Change of employer's status, ownership and merger or consolidation of the employer, and the employee does not wish to continue the employment relationship (Article 163 (1)) Closure of the employer for financial reasons or force majeure (Article 164(1)) Bankruptcy of the employer (Article 165)

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No. 10.

11.

12.

13.

None

Long Service Pay 1x

Separation Compensation Pay ("Uang of Rights Pisah") 1x None

None

1x

1x

None

None

None

1x

None

None

1x

Yes, if the employee’s duties and functions do not directly represent the employer’s interests. The amount and implementation depends on the provisions under the employment agreement, Company Regulations or Collective Labor Agreement. Yes, if the employee’s duties and functions do not directly represent the employer’s interests. The amount and implementation depends on the provisions under the employment agreement, Company Regulations or Collective Labor Agreement.

Reason for Termination of Employment

Severance Pay

Employee's inability to work for 6 consecutive months due to detention by the authorities (Article 160(3) and (6)) Employee found guilty by a court within 6 months of detention by the authorities (Article 160(5) and (6)) Employee resignation (Article 162(2))

Employee's absence without leave (Article 168(3))

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No. 14.

15.

16.

None

Long Service Pay None

Separation Compensation Pay ("Uang of Rights Pisah") 1x None

None

None

1x

None

2x

2x

1x

None

Reason for Termination of Employment

Severance Pay

Employee reaching pension age - if the employer enrolls the employee in a pension plan (Article 167(1)) Employee termination where the employee makes allegations against the employer that are not proven (Article 169(1) and (3)) Employee termination due to his/her continuing illness after a period of 12 months (Article 172)

The components of salary used as the basis for the calculation of the termination payments consist of the basic salary and fixed allowance, including the value of rations, if provided by the employer.

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