Generally, an employment contract in Indonesia can either be a fixed-term (definite) or an indefinite-term (permanent) contract. Fixed-term employment agreements are subject to stricter requirements compared to indefinite-term employment agreements.
Contractual employees are engaged for a fixed period, whereas project-based employees' tenure ends upon the completion of the project. A project-based employee's duration is inherently tied to the nature of the project rather than a pre-determined date.
A project-based worker usually signs a contract to work on one aspect of your business. For example, you may hire a financial person to re-do your accounting systems, a graphic artist to update your marketing materials, or a human resources professional to develop an employee benefits package.
A project contract is a legal agreement between two parties that will be working on a project that outlines the obligations, duties, and expectations of both parties. It's imperative to have a project contract in place when starting any new work with an outside company.
The term "project-based" refers to an approach or methodology that organizes work and tasks around specific projects. In a project-based environment, work is structured and executed based on the completion of specific projects rather than ongoing, repetitive tasks.
Employers must define and specify the scope and nature of the project at the outset to avoid misunderstandings. Legal Basis Project-based employment is also governed by Article 280 of the Labor Code, as well as other relevant provisions of labor laws.