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Apr 18, 2023

The Game-Changing Impacts of Digital Signatures on Employment Contract

Employment contracts using official digital signatures can maintain security and also comply with statutory provisions

Impacts of Digital Signatures on Employment Contract

In today's digital era, the world has undergone significant changes. From learning and working to shopping, almost everything can now be done anywhere using our gadgets. Electronic documents have become widely used in this digital age, and electronic signatures have also emerged. 


According to Article 60 of Government Regulation Number 71 of 2019 on the Implementation of Electronic Systems and Transactions, electronic signatures are divided into two types: certified and uncertified electronic signatures. Thanks to digitization, certified digital signatures have become prevalent, including in employment contracts.


An employment contract is an agreement between a company and an employee that contains various terms, obligations, and rights written or spoken for a specific or indefinite period. Signing an employment contract indicates the commencement of the employment relationship between the company and the employee. Based on Article 1601 of the Civil Code, an employment contract must meet requirements and criteria such as the employee's and employer's names, position or job description, specific or indefinite term of employment, salary to be received, an agreement between the employee and the company, the person who creates the employment agreement, and precise definition of the subject matter. When the contract expires, there are usually three options offered to the employee: contract extension, permanent employment, or non-renewal. The types of employment contracts are divided into four, namely:

  • Employment Agreement with Indefinite Term (Perjanjian Kerja Waktu Tidak Tertentu or PKWTT)
    PKWTT is an employment contract made for permanent employees. The indefinite working period of an employee and the existence of retirement rules make this employment contract indefinite.

  • Employment Agreement with Definite Term (Perjanjian Kerja Waktu Tertentu or PKWT)
    PKWT is an employment contract made for non-permanent employees. The contract term specified in PKWT is one year with a maximum of three contract extensions.

  • Part-time Employment
    Employees with part-time employment contracts work less than the regular eight hours and usually do not have the same level of contractual obligation as PKWT.

  • Outsourcing
    Outsourcing is an employment contract for employees hired by a specific agency or contractor, and a company does it with a workforce provider. This type of employment contract is usually applied to companies that require many employees. The workforce provider company will then create a separate PKWT contract with the employees.


With the advent of the Fourth Industrial Revolution, many companies have switched to using digital signatures. This change undoubtedly brings several advantages, such as easy document access, time-saving, and enhanced security. However, it is essential to use legally recognized digital signatures. certified digital signatures contain both an electronic signature and an electronic certificate that contains encrypted information about the signer. The electronic certificate is created using the services of a Certified Electronic Certification Provider (Penyelenggara Sertifikasi Elektronik or PSrE) recognized by the Ministry of Communication and Information Technology (Kementerian Kominfo). VIDA is a PSrE that operates under the Ministry of Kominfo and provides certified digital signature services. VIDA Sign uses biometric verification and activity detection before signing, ensuring users are protected from identity fraud and the digital signature's security. VIDA'sdigital signature can be used for various electronic documents stipulated in Government Regulation 71 of 2019 on Electronic Systems and Transactions. Embrace the digital revolution and ensure the legality of your digital signatures with VIDA Sign!

VIDA - Verified Identity for All. VIDA provides a trusted digital identity platform.

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