How to Create a Fixed-Term Employment Contract (PKWT): Free Template Inside!

Need a fixed-term employment contract (PKWT)? Whether you’re an employer drafting one or an employee trying to understand what it entails, a PKWT (Fixed-Term Employment Contract) is essential for temporary roles. It’s a clear agreement that defines the terms of work for a specific duration, perfect for project-based, seasonal, or substitute jobs.

Let’s break down what PKWT is, why it matters, what to include, and how you can create one easily with our free template.

What Is a Fixed-Term Employment Contract?

A PKWT is a legally binding agreement for jobs with a set timeline. Unlike permanent contracts, this one specifies a clear start and end date. It’s commonly used for:

1. Project Work: Example—developing software or constructing a building.
2. Seasonal Jobs: Think harvest seasons or holiday-related work.
3. Temporary Substitutions: Filling in for employees on maternity or medical leave.

Indonesian labor laws (especially the Omnibus Law updates) regulate PKWT strictly, ensuring fair terms for both employers and employees.

Why Is It Important?

Fixed-term contracts are crucial for both parties:

For Employers

• Flexibility: Easily scale the workforce as per project needs.
• Cost-Effective: Avoid long-term financial obligations, like severance pay.

For Employees

• Defined Scope: Know exactly what you’re signing up for.
• Fair Compensation: Your rights, pay, and benefits are clearly stated upfront.

Key Elements of a Fixed-Term Contract

A great PKWT has all the essentials to ensure transparency and legal compliance. Here’s what you must include:

1. Identification
   Full details of both parties—company name, address, and the employee’s identity.
2. Job Description
   Outline the role and main responsibilities clearly.
3. Contract Duration
   Specify exact start and end dates. Remember, in Indonesia, the maximum period for PKWT is 5 years (including renewals).
4. Compensation Details
   State the agreed salary, benefits, and payment schedule.
5. Termination Clauses
   Include terms for early termination and possible compensation.
6. Rights and Obligations
   Mention both parties’ commitments, like working hours and expected performance.
7. Signatures
   Ensure the contract is signed by both parties and, if possible, stamped officially.

Free Template: Fixed-Term Employment Contract (PKWT)

FIXED-TERM EMPLOYMENT CONTRACT

Pro Tips for Drafting a Fixed-Term Contract

1. Use Clear Language
   Keep it simple but professional. Both parties should understand the terms.
2. Personalize It
   Customize the contract to suit the specific role or project.
3. Stay Compliant
   Double-check local labor laws to ensure your contract is valid.
4. Proofread
   Typos in legal documents can cause serious confusion—always review it carefully.

Conclusion

Drafting a PKWT doesn’t have to be complicated. By following these steps and using our free template, you can create a professional contract that protects both parties.

Need a quick start? Download the free template now, tweak it to fit your needs, and get things rolling!