If you’re thinking about employing Indonesian workers or looking to find out more about your rights as a worker, you need to be aware of probation periods. Intended to help employers avoid costly hiring mistakes, probation periods are common in this country. They can also help employees find their footing or give them options to leave if they want to.

In this guide, we’ll look at how probation periods in Indonesia are used, the laws that regulate them, and why they can be a good thing for your business.

Definition of a Probation Period in Indonesia

As in many other countries, a probation period in Indonesia represents a time from the beginning of a worker’s employment until a set time limit is reached.

During this time, the employer carefully monitors the new employee’s work and assesses whether or not to continue their employment or terminate it. This assessment is typically based largely on the employee’s job performance but also on their ability to work with their team and adapt well to the company’s culture. 

The worker simultaneously assesses the working conditions that the employer provides as well as their own fit with the new company. They may decide to resign during or at the end of this period if they don’t feel they fit in well, or may choose to accept continued employment if things go well.

Lengths of Probationary Periods in Indonesia

Probation periods are not required in Indonesia. If they are used, their lengths must be clearly stated in employment contracts. Employers have the discretion to choose test periods of any length up to a maximum of three months. Extensions are permissible.

If the employer feels that the initial period is unsuccessful but wishes to give the employee a chance to improve and develop, they can provide extended probation. However, the possibility of an extension and its length must be included in the employee’s contract, and the total period cannot exceed the three-month limit.

While the above rules apply to permanent contracts, probationary periods are not allowed for fixed-term contracts of any length.

Legal Considerations of Probation Periods in Indonesia

In addition to being a time for close monitoring and assessment of new employees, probation periods in Indonesia also represent times with reduced employee protections. Their use and rules are regulated by the Manpower Act of 2003.

Pay and Working Conditions

There is no specific stipulation in the Manpower Act that bars employers from paying employees less when on probation. However, Article 6 states that every worker should be treated equally and without discrimination which suggests that paying probationary workers less than their fully-employed counterparts is not permissible.

Regardless, it is very clear that probationary workers may not be paid less than the minimum wage. The employer is also under the same obligations toward both probationary and regular workers and must provide them with safe working conditions and protect them from workplace discrimination.

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Termination and Notice

The requirements for passing a probationary period must be stated in the worker’s contract, and the employer must assess the worker carefully based on these criteria.

During or at the end of probationary periods, Indonesian workers cannot simply be terminated without cause unless they’ve committed gross misconduct on the job. They can only be dismissed for failing to meet the requirements set out in their contracts.

However, it’s still easier for employers to dismiss probationary workers. Normally, the employer must notify an industrial court and obtain permission to dismiss a regular worker. However, this notification process is not necessary for probationary workers, and that makes dismissals faster and easier.

Whether on probation or not, workers need to provide a minimum of 30 days’ notice to their employers if they wish to resign. Employers must give only seven days’ notice to employees, however. They must provide this much notice whether they intend to dismiss the worker or continue their employment.

Vacation / Holidays

In Indonesia, employees are entitled to an average of 15 paid public holidays per year, whether they are on probation or not. Workers are also entitled to special religious holiday pay (tunjangan hari raya) at the rate of one month’s salary each year for the religious holiday of their choosing.

However, workers on probation are entitled to only a portion of this pay, accruing 1/12 of their entitlement for each month worked in their first year of employment.

All Indonesian workers are entitled to at least 12 working days of annual leave. However, they receive this entitlement only after working for one full year, meaning that probationary workers do not have the right to take vacations.

Benefits of Probation Periods in Indonesia

There are many reasons why probation periods are good for employers but also several benefits for employees as well. These include:

  • For Employees

Opportunity to try out a new position before making a full commitment to it.

Ability to resign easily by giving just 30 days’ notice.

Chance to receive more attention and training from employers to help them develop.

  • For Employers

Chance to dismiss workers more easily if their performance is poor.

Opportunity to closely monitor and assess new employees.

Motivation for new hires to prove themselves on the job.

Frequently Asked Questions

No, probation periods can be used by employers at their discretion. If they wish to use them, however, they must state the details of their duration, extension, and requirements in their employment contracts.

While this is possible in other countries, it’s not possible in Indonesia unless the worker is guilty of gross misconduct. Otherwise, the employer must give at least seven days’ notice of the termination.

These test periods are restricted to a maximum of three months and it is most common for employers to use this full allowance, especially for employees in higher-level positions like managers and executives.