Following the enactment of the Omnibus Law, the Government issued Government Regulation No. 35 of 2021 to further regulate fixed-term employment agreement, outsourcing, working hours and time-off, and termination of employment.
While the changes brought by this regulation are extensive, the below key points are worthy of highlighting:
- The maximum term of a fixed-term employment agreement is now increased from two years to five years. Employers should note that they must pay compensation after the expiration of the agreement.
- A court approval is no longer required to terminate employment. Employers can terminate by simply issuing a notification of termination at least 14 days before the termination date.
- New termination payment formulae that categorise the amount that must be paid based on the reason for termination have been introduced.
- Outsourcing companies must obtain a license from the Ministry of Manpower. An outsourcing company must also enter into an employment agreement with each outsourced employee.
