<![CDATA[An employment relationship is a fundamental aspect of labor law, based on an agreement between an employer and an employee. Normatively, an employment agreement is the embodiment of the freedom of contract principle, as stipulated in Article 1338 of the Indonesian Civil Code (KUHPerdata). This research aims to analyze the limitations of the freedom of contract principle in the drafting of Fixed-Term Employment Agreement (PKWT) clauses, viewed from the principles of balance and good faith under Civil Law, and how Government Regulation Number 35 of 2021 serves as a protection instrument for the rights of contract workers in Indonesia. This study employs a normative juridical method with a statute approach, analyzing relevant laws and regulations. Data sources consist of primary data—comprising laws, regulations, and related literature—and secondary data from all legal publications that are not official documents, including legal textbooks, law journals, legal research findings, and scholarly opinions. The results of the study indicate that the freedom of contract is only legally valid if the drafted clauses do not exploit the weak bargaining position of workers, but instead reflect a proportional distribution of rights and obligations (balance) and are based on honesty and legal propriety (good faith). Government Regulation Number 35 of 2021 has successfully closed past loopholes of injustice by introducing the breakthrough of compensation money, tightening financial sanctions on premature termination of employment, and limiting the types of jobs that can be contracted, thereby balancing the operational freedom of employers with the certainty of protecting the fundamental rights of contract workers to achieve distributive justice.]]>
