In the world of employment, understanding the types of employment contracts is crucial for both workers and employers. The two most common types of contracts are Fixed-Term Employment Agreement (PKWT) and Indefinite-Term Employment Agreement (PKWTT).
This article will discuss the differences between PKWT and PKWTT in depth, so you can understand the rights and obligations of each party involved.
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Definition of PKWT and PKWTT
- PKWT (Fixed-Term Employment Agreement) is a contract that has a specified time limit. It is usually used for temporary work, specific projects, or seasonal work.
- PKWTT (Indefinite-Term Employment Agreement) is a contract without a specified time limit. This means the worker is employed for an indefinite period, and the employment relationship ends only for specific reasons in accordance with labor laws.
Changing Status from PKWT to PKWTT
The status change from Fixed-Term Employment Agreement (PKWT) to Indefinite-Term Employment Agreement (PKWTT) can occur under certain conditions according to Article 15 of the Minister of Manpower and Transmigration Decree No. 100 of 2004. Here are the conditions that cause this status change and their implications for both workers and employers.
1. Language and Latin Script
A PKWT that is not written in Indonesian and Latin script will automatically change to a PKWTT from the start of the employment relationship. This ensures that the employment contract is understood by all parties involved.
2. Inappropriate Job Types
If a PKWT is created for job types that do not comply with the prescribed conditions, the contract changes to a PKWTT from the start of the employment relationship. This ensures that the work performed has a clear legal basis.
3. Deviations from Time Provisions
A PKWT carried out for work related to new products that violates the extension period provisions will change to a PKWTT from the moment the deviation occurs. This includes exceeding the specified contract period.
4. Renewal Without a Grace Period
If a PKWT renewal is not carried out with a 30-day grace period after the previous extension ends, and there is no other agreement, the PKWT changes to a PKWTT from the time this condition is not met.** This ensures there is sufficient time between the old and new contracts.
5. Workers’ Rights and Resolution Procedures
Employers who terminate the employment relationship with workers whose PKWT status changes to PKWTT (as per points 1, 2, and 4) must follow resolution procedures and grant workers’ rights according to the regulations for PKWTT. This includes severance pay and other rights as regulated by law.
Understanding the status change from PKWT to PKWTT is crucial for both employers and workers. Conditions that cause this change include the use of incorrect language, inappropriate job types, deviations from time provisions, and renewal without a grace period. Knowing these conditions can help both parties ensure a fair and lawful employment relationship.
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Contract Duration
- PKWT: The duration of a PKWT is usually no more than 2 years, with the possibility of a one-time extension for 1 year. If this contract is extended again after this period, it automatically changes to a PKWTT.
- PKWTT: There is no time limit for a PKWTT. Workers continue to work until there is a lawful termination of employment.
Job Type Limitations
- PKWT: Can be used for specific jobs expected to be completed within a certain period, such as projects, seasonal activities, or other temporary work.
- PKWTT: Used for permanent or continuous work.
Termination of Employment (PHK)
- PKWT: The contract automatically ends at the end of the contract period. The employer is not required to provide severance pay unless otherwise stipulated in the agreement.
- PKWTT: Termination must comply with applicable labor regulations and usually requires approval from the authorities. Workers are entitled to severance pay and other compensations according to the law.
Job Security
- PKWT: Job security is lower compared to PKWTT due to the specified time limit.
- PKWTT: Offers higher job security as there is no time limit, along with stronger legal protection.
Understanding the differences between PKWT and PKWTT is very important for both workers and employers. PKWT is suitable for temporary work and specific projects, while PKWTT is more appropriate for long-term and permanent work. Knowing the rights and obligations of each contract will help both parties engage in a fair and productive employment relationship.
With this understanding, you can make better decisions regarding the type of employment contract that suits your needs, whether as a worker or an employer. Always check the latest labor regulations to ensure compliance with applicable laws.
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