Job Contracts

Information on job contracts in the Philippines including what should be included in a contract and statutory leave...

Employee contracts in the Philippines are usually written in English. A contract should generally include the following:

  • Names of the employer and employee
  • Site of employment
  • Contract duration
  • Employee’s position
  • Description of employee’s role
  • Compensation and benefits
  • Terms of notice
  • Confidentiality clause (depending on nature of work)
  • Employee grievance mechanisms
  • Procedure for implementing employee discipline

For people applying for jobs in the Philippines, the general pre-employment requirements include the following:

  • Curriculum vitae
  • Birth certificate
  • High school/College Diploma
  • National Bureau of Investigation (NBI)/police/barangay clearance
  • Social Security Systems (SSS) Number
  • Taxpayer’s Identification Number (TIN)
  • Medical certificate
  • Marriage certificate (if married)
  • Professional license (if applicable)
Types of Employment Contracts

Regular Employment

This contract is for employees who perform activities and tasks necessary or desirable to the usual business or trade of the employer.

Casual Employment

This contract is for employees not on a seasonal or project contract who have worked for an employer for less than a year.

Probationary Employment

This contract is for an employee who is hired by the employer for a six-month period and who is under observation. The employee may be granted a regular employment contract after the probationary period. The contract may be terminated if the employee fails to qualify for regular employment based on the standards of the employer.

Project Employment

This contract is for an employee who is assigned a specific project or undertaking by the employer. The duration of the services of the employee is pre-determined and ends once the project is completed.

Seasonal Employment

This contract is for employees whose services are provided on a seasonal basis. Seasonal employees may be considered regular employees and are called on by the employer from time to time. This is based on the duration of the season in the country, or cycle of production, or demand of the market.

The seasonal employee is not dismissed from the company, but is considered as on leave or temporarily laid-off. The employee is then called back when their service is needed.

Fixed-Term Employment

This contract is for a fixed period of employment knowingly and voluntarily agreed upon by both employer and employee. The employer is not required to consider making the employee permanent, or to provide severance pay at the end of the contract.

Note: There are no specific provisions for types of jobs covered under each type of employment contract.

Working Hours and Provisions for Employees in the Philippines

The hours of work required for an employee in the Philippines should not exceed 8 hours a day. Employees must be given not less than 60 minutes time off for their regular meals.

An employee who works more than 8 hours in a day must be paid overtime. Overtime rates for weekend work may be higher.

Employees who work night shifts must be paid a differential of not less than 10% of the regular wage for each hour worked between 22.00 and 06.00.

Employees must be given a rest period of not less than 24 hours every 6 consecutive normal work days.

An employer requiring an employee to work on a holiday must pay the employee at twice the regular rate.

Employees are entitled a yearly service incentive leave of 5 days with pay, as long as they have worked for at least 1 year for the company/employer.

Paid maternity leave is also a benefit given to employees for 60 or 78 days. However, a law was approved in January 2016 to extent this to 100 days, regardless of the type of delivery. Paternity leave is given, equivalent to 7 days with pay.

Termination of Employment

Employers may legally dismiss an employee provided they follow the correct procedures for termination. An employee may also terminate their employment for any reason; they must give written notice at least 30 days or one month in advance.

The following are grounds for termination of an employee, under the Labour Code of the Philippines:

Just causes:

  • Serious misconduct by the employee
  • Gross and habitual neglect of duty by the employee
  • Fraud
  • Commission of a crime or offence by the employee against the employer or any immediate member of their family or their authorised representatives
  • Other similar causes

Authorized causes include closure and cessation of business or redundancy for economic reasons.

Rules for notice and hearing for just cause termination are as follows:

  • First written notice – this contains the grounds for termination of the employee and provides an opportunity for the employee to submit a written explanation at least 5 calendar days from the receipt of notice
  • Hearing or conference – the employer provides an opportunity for the employee to explain and present evidence in support of their defence
  • Second written notice – a notice of dismissal indicating that upon due consideration of all circumstances, grounds have been established to justify the termination of the employee

For authorized termination, the employer must issue a written notice of dismissal to the employee specifying the grounds at least 30 days before the date of termination. A copy of the notice must also be submitted to the Regional Office of DOLE where the employer is located.

Upon termination, the employee is entitled to their earned wages and benefits, severance pay (for authorized cause termination) and benefits provided under their Collective Bargaining Agreement or long-standing company practice.