Differences Between “PKWTT” and “PKWT” Employment Contracts
Permanent Employment Contracts (PKWTT) and Fixed-term Employment Contracts (PKWT) are two types of employment contracts commonly used in Indonesia.
Indonesia Law Number 13 of 2003 Concerning Manpower, also known as the Manpower Law, is a legislation that regulates the employment relationship between employers and employees in Indonesia. The law covers various aspects of employment, including labor standards, wages, social security, employment contracts, working conditions, and dispute resolution.
The main differences between the two are as follows:
- Duration: PKWTT has a fixed duration, typically ranging from one to three years. PKWT has no fixed duration and can continue until the employee or the employer terminates the contract.
- Renewal: PKWTT cannot be renewed more than twice, while PKWT can be renewed indefinitely.
- Termination: PKWTT automatically terminates at the end of the agreed-upon period, unless renewed. PKWT can be terminated by either the employee or the employer, but with certain conditions and legal requirements that must be met.
- Benefits: In general, employees under PKWT are entitled to more benefits, such as health insurance, social security, and severance pay, than those under PKWTT.
It's important to note that the type of contract used for an employee depends on the nature of the job and the agreement between the employer and the employee. Employers must also comply with the labor laws and regulations in Indonesia regarding employment contracts, including minimum wage, working hours, leave entitlement, and termination procedures.