Drafting an Employee Contract in the Philippines? Here's What You Should Know

You might be thinking, “Is issuing an employee contract necessary?”
Although it’s not required by the law to issue an employment agreement, it’s still essential to have a legally binding contract that contains all the provisions you want to set with your future employees.

What Is an Employment Contract?
An employment contract between an employer and employee in the Philippines sets all the terms and conditions of the job. These include the duties, salary, work hours, and confidentiality.
You must notarize this document immediately to make it admissible in court without the need for further proof of authenticity.

The Five Types of Employment Contracts in the Philippines
The Philippine labor law recognizes the following kinds of employment arrangement, which depend on the nature of the employment.

Probationary Employment
This employment agreement is made between an employer and a probationary employee. This contract tackles the period of probation, which is a maximum of six months, and the standards on which the employer will evaluate the employee’s competence and qualifications.

It requires the employer to:
⦁ Communicate the regularization standards to the probationary employee.
⦁ Relay the time of the probationary employee’s engagement.
If the employer fails to do either of these, the probationary employee is deemed regularized.

Project Employment
This is a signed agreement with a fixed duration between an employer and a project-based employee. It should include the following:
⦁ The full details of the project, including the scope and the date of completion
⦁ Tasks that a project employee should carry out

Aside from that, a project-based employee should understand that this contract is coterminous with the project. However, project employment contracts are not one-sided agreements. After all, the employer’s interest is as vital as that of the employees’.

Seasonal Employment
With this type of employment agreement, an employee is engaged to render work during a given season. It works similarly to project employment. The scope of work is also seasonal or periodic, preventing the employee from attaining regular status.
However, if an employee is regularly hired for a specific season, they are counted as a regular seasonal employee. This means that the employee has the right to demand work during their regular season, which the employer must agree to. If the employer does not comply, they may be liable for illegal dismissal.

Fixed-Term Employment
This employment contract is made between an employer and an employee working for a specific term or period. According to the Philippine Labor Code and its implementing rules and regulations, there are no limitations on the period of employment for fixed-term employees. However, the legislation added that if the contract exceeds a year, the employee shall be regularized.

Casual Employment
According to Article 295 of the Labor Code, a casual employee is neither regular, project-based, or seasonal. They accept a job offer knowing there’s no firm advance commitment to ongoing work. Because of this, they engage in an employment contract where they have a flexible working arrangement but no paid leaves.
The requirements under the casual employment arrangement are the following:
⦁ The employee should perform work that is incidental to the usual business of the employer.
⦁ The employer must communicate the time of the probationary employee’s engagement, or he will be categorized as a regular employee.

Why Do You Need To Draft an Employment Contract in the Philippines?
Defining Details and Objectives
Drafting an employee contract gives you the power to set... Read More.

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