Employee transfer may sometimes be needed for organisations to achieve their business objectives in Indonesia. An employee transfer is the relocation of employees from one company or department to another company or department. The transfer will cause a change in employment status, legal condition, and status of employment in Indonesia. This is especially common for companies within one company group.
There are many reasons for companies to transfer their employees within their subsidiaries:
Employee transfer is allowed in Indonesia as long as the parent company and its subsidiaries have policies in place and fulfill certain legal requirements.
Unlike promotion, the transfer can be permanent or temporary. It makes no changes to the employee’s responsibilities, duties, compensation, and skills required.
There are several types of employee transfers for employment in Indonesia:
According to the Indonesian Labor Act Article 31, companies must fulfill the basic criteria of employee transfer for legal employment in Indonesia:
An employee transfer must be legalised with a transfer contract or a new employment contract. A new employment contract is compulsory so that the parent company, employees, and subsidiaries know their rights and obligations.
The agreement must include the following details:
Navigating complex laws of employment in Indonesia can be a huge challenge for employers, especially foreign employers. Legal compliances can impact all phases of the employment process, from recruitment to interview to termination.
Therefore, employers must meet the ever-changing laws and market conditions to achieve the ultimate success.
Cekindo’s experienced legal consultants can help you create well-drafted employment contracts, which are the foundation for effective human resource functions and business operations.
To organise an employment contract drafting session or contract review, please take some time to fill out the request form below. One of Cekindo’s advisors will get back to you.