How does Indonesia’s Manpower Law define an employment relationship?

Article 1(15) identifies three elements of employment:

• Work: the individual personally performs activities for the employer.

• Wages: the individual receives remuneration in return for that work.

• Orders: the employer has authority to direct or control the performance of the work.

Article 50 further provides that an employment relationship arises because an employment agreement exists between the employer and the worker.

Article 1(14) defines an employment agreement as an agreement between a worker and an employer containing the conditions of employment and the parties’ rights and obligations.

Under Article 51, an employment agreement may be written or oral, although specific types of employment agreement must comply with additional formal requirements.

Article 52 establishes basic validity requirements, including:

• agreement between the parties;

• legal capacity;

• agreed work; and

• a lawful purpose.

The Manpower Law does not provide a separate comprehensive definition of “freelancer” or “independent contractor”.

Characteristics that may increase employment risk include:

• continuing personal work;

• regular wage-like remuneration;

• mandatory working hours;

• detailed operational instructions;

• reporting to an internal manager;

• integration into the client’s organisation; and

• limited freedom to organise performance.

Characteristics supporting independent contracting include control over the method of performance, separate Assignments, payment for services or deliverables, commercial risk and freedom to work for other clients.

Zooly provides B2B SaaS technology through which business customers can establish and operate their own marketplaces and manage Client–Vendor relationships.

The Client and Vendor enter into the Direct Client–Vendor Service Agreement and the relevant Assignment. Zooly provides the software infrastructure used to document and administer that relationship. It does not receive the Vendor’s services or automatically become a party to the Assignment.

Zooly’s software should enable the Client and Vendor to record:

• the defined service or deliverable;

• the agreed commercial price;

• the Assignment’s duration and completion criteria;

• the Vendor’s responsibility for performance;

• the acceptance and payment process; and

• the parties’ respective contractual roles.

The software should avoid presenting Zooly as the party that assigns work, determines remuneration, controls working hours, supervises performance or exercises disciplinary authority over the Vendor.