Old Rules
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New Rules
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Types of jobs that can use PKWT (Fixed Term Employment Agreement)
In the Manpower Act No.13 of 2003, it is stated that, Workers with PKWT (Fixed Term Employment Agreement)status can only be made for certain jobs which according to the type and nature or activity of their work will be completed within a certain time, namely:
a. a one-time job or a temporary one;
b. work which is estimated to be completed in the not too long period of time and a maximum of 3 (three) years;
c. work that is seasonal in nature; or
d. work related to new products, new activities, or additional products that are still in trial or exploration.
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Types of jobs that can use PKWT (Fixed Term Employment Agreement)
PKWT (Fixed Term Employment Agreement) is divided based on the period of time and the completion of a certain job:
Non-permanent contracts which are based on a period of time are divided into:
a. work that is estimated to be completed in the not too long time
b. workers who are seasonal or
c. work related to new products, new activities, or additional products that are still in trial or investigation.
PKWT (Fixed Term Employment Agreement) based on the completion of a certain job, namely: a one-time job or a temporary job, and certain other jobs whose types and characteristics or activities are not permanent.
Based on GR No. 35 of 2021 Article 4 and Article 5
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The term of non-permanent contracts
In the Manpower Act No.13 of 2003, it is stated that, Workers with PWKT (Fixed Term Employment Agreement) status are only valid for 2 years, and can be extended 1 (one) time for a maximum period of 1 (one) year.
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The term of non-permanent contracts
Non-permanent contracts based on a period of time
valid for a maximum of 5 years, the PKWT (Fixed Term Employment Agreement) can be extended several times if the work being carried out has not been completed, provided that the total term of the PKWT and the extension is not more than 5 years.
PKWT (Fixed Term Employment Agreement) is based on the completion of a certain job based on the agreement of the parties.
In the event that certain jobs that are promised in the PKWT (Fixed Term Employment Agreement) cannot be completed, the term of the PKWT (Fixed Term Employment Agreement) is extended until the completion of the work, and there is no set maximum time limit.
Non-permanent work contracts based on certain other types and characteristics or activities can be carried out with a daily work agreement. Provided that workers work less than 21 (twenty one) days in 1 (one) month
Based on GR No. 35 of 2021 Article 6, Article 8, Article 9, and Article 10
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Legal Consequences
As a result of the law, the PKWT (Fixed Term Employment Agreement) is carried out for more than 3 (three) years, then by law the work agreement becomes PKWTT (Indefinite Work Agreement)
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Legal Consequences
Non-permanent contracts based on a period of time
As a result of the law, the PKWT (Fixed Term Employment Agreement) is carried out for more than 5 (five) years, then by law it becomes PKWTT (Indefinite Work Agreement) and the work period of the Worker is still calculated from the time the employment relationship is based on the PKWT (Fixed Term Employment Agreement).
PKWT (Fixed Term Employment Agreement) with a daily work agreement
In the event that a Worker works 21 (twenty one) days or more for 3 (three) consecutive months or more, the daily Work Agreement becomes invalid and the Work Relationship between the Employer and the Worker is changed by law based on the PKWTT (Indefinite Work Agreement)
Based on Article 59 of UUK 13/2003 after UU CK and GR no. 35 of 2021 Article 8, and Article 10
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Probational period
Article 58 of the Manpower Law:
(1) A work agreement for a specified period of time cannot require a probationary period.
(2) In the event that a probation period is required in the work agreement as referred to in paragraph (1), the required probationary period is null and void.
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Probational period
(1) PKWT (Fixed Term Employment Agreement) cannot require a probationary period.
(2) In the event that a probationary period of employment is required, the probationary period of employment is legally null and void and the working period is still counted.
Based on GR No. 35 of 2021 Article 12
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PKWT registration
Companies must report online PKWT (Fixed Term Employment Agreement) to the Ministry of Manpower no later than 3 (three) days from the signing of the PKWT or in the event that the online PKWT registration is not yet available, the PKWT (Fixed Term Employment Agreement) registration is carried out by the employer in writing at the agency that administers government affairs in the Regency / City manpower sector , no later than 7 (seven) working days from the signing of the PKWT.
Based on PP No. 35 of 2021 Article 14
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Compensation When PKWT Ends
Employers are required to provide workers / laborers with compensation money at the end of the PKWT. Compensation money is given to workers / laborers who have worked at least 1 month continuously. PKWT (Fixed Term Employment Agreement) that is extended, then the compensation money will be given when the extension period ends.
The amount of compensation money is determined as follows:
a. PKWT for 12 (twelve) continuously, amounting to 1 (one) month of wages
b. Non-permanent contracts for 1 (one) month or more and less than 12 (twelve) months, are calculated proportionally with the calculation of: years of service / 12 x 1 (one) month of wages. Example: 6 months working period, compensation = 6/12 x 1 month of wages = 0.5 x wages / month
c. PKWT more than 12 (twelve) months. calculated proportionally with the calculation: years of service / 12x 1 (one) month of wages. Example: 18 months of service, compensation = 18/12 x 1 month of wages = 1.5 x wages / month
The provision of compensation money does not apply to foreign workers who are employed under PKWT
Based on PP No. 35 of 2021 Article 15 and Article 16
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Monthly Wages used as the basis for calculating compensation payments
1. Basic Wage + Fixed Allowance.
2. In the event that the wages in the company do not use the components of the Basic Wage and fixed allowances, the basis for calculating the Wages without allowances.
3. In the event that the wages in the company consist of the basic wage and non-permanent allowances, the basis for calculating the basic wage is the basic wage.
4. In the event that the PKWT (Fixed Term Employment Agreement) is based on the completion of a job faster than the length of time agreed in the PKWT (Fixed Term Employment Agreement), the compensation money will be calculated until the time the work is finished.
5. The amount of compensation money for Workers / Laborers in micro and small businesses is given based on an agreement between the Worker / Laborer.
Based on PP No. 35 of 2021 Article 16
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Transitional Provisions Money Compensation
a. at the time this Government Regulation comes into force (February 2, 2021) compensation money for PKWT whose term has not expired shall be given in accordance with the provisions of this Government Regulation; and
b. The amount of compensation money as referred to in letter a is calculated based on the work period of the Worker / Laborer whose calculation starts from the date of promulgation of Law Number 11 of 2020 concerning Job Creation (2 November 2020).
Based on PP No. 35 of 2021 Article 64
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Layoffs before the PKWT (Fixed Term Employment Agreement) ends
In the Manpower Act No.13 of 2003, it is stated that, if one of the parties, in this case the worker or company, terminates the work relationship where the contract period has not ended, the party who ends the employment relationship is obliged to pay compensation in accordance with the calculation of the period of the work agreement.
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Layoffs before the PKWT (Fixed Term Employment Agreement) ends
If one of the parties, in this case the worker or the company, terminates the employment relationship where the contract period has not ended, the employer is obliged to provide compensation money, the amount of which is calculated based on the non-permanent contract period that has been implemented by the worker.
Based on PP No. 35 of 2021 Article 17
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