1) Why employment contracts matter in the Philippine setting

In the Philippines, many employee rights are set by law and cannot be waived by contract. A written employment agreement is still critical because it:

defines status (probationary, regular, fixed-term, project, seasonal, etc.)
documents standards, duties, and work rules
clarifies compensation structure and benefits administration
reduces disputes on hours, leave, discipline, termination, and post-employment obligations
helps prove compliance during audits, inspections, and labor cases

A contract should be read together with the employer’s policies (code of conduct, handbook, data privacy notices, safety policies), but it must not undercut statutory minimums.

2) Governing legal framework to reflect in templates

A strong Philippine employment contract template typically aligns with:

The Labor Code (as amended) and implementing rules
Wage and labor standards rules on: minimum wage, holiday pay, overtime, night shift differential, service incentive leave, 13th month pay
Social legislation and mandatory contributions: Social Security System, PhilHealth, Pag-IBIG Fund
Tax withholding and year-end certification under the Bureau of Internal Revenue
Workplace safety and health obligations under OSH laws and regulations
Data handling obligations under the Data Privacy Act framework (privacy notices, security measures, lawful processing)
Specialized laws depending on the role and workforce profile (e.g., maternity leave, kasambahay/domestic workers, anti-harassment and workplace conduct laws)
Administrative issuances from Department of Labor and Employment

You typically do not “contract around” these. You integrate them: the contract states the deal, and the law supplies the non-negotiable floor.

3) Choosing the right template: employment classifications and what must be stated

A. Regular employment (often the default in practice)

Use when: the job is usually necessary or desirable in the employer’s business, and the employee is not properly classified under a valid alternative category.

Template must clearly cover: role, compensation, hours, work location, benefits, code of conduct, and termination/due process references.

B. Probationary employment (must be handled carefully)

Use when: you want a probation period to assess fitness for regularization.

Key compliance point: probationary employment is generally capped at 6 months (common rule), and termination during probation must be tied to (1) failure to meet reasonable standards made known at engagement or (2) a lawful cause, with due process.

Template must include:

probation start date and end date (or “up to 6 months” with a clear end date)
the regularization standards (performance metrics, conduct, attendance, competencies)
evaluation schedule and documentation process
consequences of failing standards

If you omit or vaguely state standards, you increase the risk that the employee is treated as regular (or that probation termination is found invalid).

C. Fixed-term employment (valid only in narrow, genuine cases)

Use when: the term is genuinely fixed and not a device to defeat security of tenure.

Template must include:

a specific start and end date
a legitimate justification for the fixed term (where appropriate)
clear project/seasonal linkage if that’s the real reason (otherwise consider project/seasonal template instead)
end-of-term handling (clear that it ends by expiration, subject to final pay and clearances)

Risk area: repeated renewals for work that is necessary/desirable may be attacked as disguised regularization.

D. Project employment (construction, IT implementations, rollouts, etc.)

Use when: employment is tied to a specific project or undertaking, with a determinable completion.

Template must include:

project name/description
project site(s)
estimated duration and the event marking completion
assignment flexibility (possible re-assignment) if truly intended, with guardrails
reporting obligations and documentation of completion

Practical compliance tip: keep project documentation and assignment orders; misdocumentation is a common weakness in disputes.

E. Seasonal employment

Use when: work is tied to a season or cyclical peak.

Template must include:

season/peak definition
expected recall policy (if any)
how start/end is determined per season

F. Casual employment

Use when: the work is not usually necessary/desirable to business.

Template must include: the casual nature and expected duration; watch conversion risks if it becomes necessary/desirable or exceeds allowable thresholds in practice.

G. Part-time employment

Use when: reduced hours/days.

Template must include:

schedule (days and hours)
pro-rating rules for benefits where lawful
clear statement that statutory minimums still apply where applicable (e.g., contributions can still be required depending on thresholds and rules)

H. Remote/telecommuting / hybrid work

Use when: work is done offsite regularly.

Template must include:

primary work location (home/hub) and reporting requirements
timekeeping/attendance tools
equipment and expense allocation (company-provided vs employee-owned; reimbursement rules)
data security obligations (VPN, device security, confidentiality)
OSH and ergonomics commitments (as applicable)
inspection/incident reporting protocol

4) Core clauses every Philippine employment contract template should contain

1) Parties, position, and nature of engagement

Employer legal name, address, and authorized signatory
Employee full name, address, government IDs (often captured in onboarding forms)
Position title, department, reporting line
Start date; employment status (probationary/regular/project/etc.)
Work location(s) and mobility/assignment clause (with reasonableness)

Common pitfall: inconsistent job titles and descriptions across contract, job offer, and actual duties.

2) Job scope and standards of performance

Key duties and deliverables (high-level + reference to job description)
Expected conduct and compliance with policies
KPI and performance evaluation framework
Management’s reasonable right to adjust duties consistent with business needs (avoid abusive vagueness)

For probationary templates, spell out regularization standards clearly.

3) Compensation structure (make it audit-ready)

Include a clear breakdown:

Basic salary (monthly/daily/hourly)
Pay schedule and method
Allowances (transport, meal, communication) and whether they are integrated into basic pay or treated separately (be careful: misclassification affects computations)
Premiums (where applicable): night shift differential, rest day/holiday premiums, overtime
Incentives/commissions (define conditions, clawbacks if any, and that they’re subject to lawful deductions and policy)
Bonuses: specify if discretionary or guaranteed; avoid accidentally converting a discretionary bonus into a contractual entitlement
Authorized deductions (must comply with lawful deduction rules and written authorizations where required)

Template tip: Add an annex for “Compensation and Benefits Schedule” so changes don’t require rewriting the whole agreement.

4) Hours of work, rest days, and timekeeping

State:

normal working hours (e.g., 8 hours/day) and meal breaks
workweek schedule and rest day
overtime authorization requirements
timekeeping method (biometrics/app/manual logs), including for remote work
policy on tardiness/undertime and corresponding lawful deductions
flexibility clauses (compressed workweek, shifting schedules) only if aligned with proper policy and practice

5) Statutory benefits and mandated contributions

A Philippine template should explicitly acknowledge compliance with:

13th month pay
SSS/PhilHealth/Pag-IBIG contributions (employer + employee shares as required)
withholding tax administration and year-end certificates
applicable leaves and labor standards

Avoid language that suggests these are purely discretionary.

6) Leave benefits (statutory and company-provided)

Include:

statutory leave entitlements that apply (e.g., service incentive leave, maternity leave, paternity leave, solo parent leave where applicable, special leave for women in certain cases, etc.)
company leaves (vacation, sick leave) and rules: accrual, conversion, carry-over, forfeiture, approval
documentation requirements (medical certificates, forms)
leave monetization rules if provided

Pitfall: stating “no leave benefits” for employees who are legally entitled to service incentive leave (unless validly exempt as managerial, field personnel meeting criteria, etc.—classification must match reality).

7) Code of conduct, discipline, and due process

The contract should:

incorporate the code of conduct/handbook by reference
state that disciplinary action will follow procedural due process
define key offenses at a high level (fraud, theft, insubordination, harassment, serious misconduct, habitual neglect, conflict of interest), with details in the handbook
include investigation and hearing procedures consistent with due process expectations

8) Confidentiality and data protection

Include:

confidentiality obligations during and after employment
definition of confidential information and exclusions (public info, legally compelled disclosures)
security obligations (passwords, device handling, document retention, return of property)
personal data handling: reference privacy notices, lawful processing for HR/admin, monitoring rules, and security measures

9) Intellectual property and work product

Especially for IT, marketing, R&D, design:

define “work product” created within the scope of employment or using company resources
assignment of rights to employer to the extent permitted by law
employee duty to disclose inventions/works created in the course of work
handling of open-source and third-party IP use (policy-based)

10) Conflict of interest and outside employment

duty to disclose side businesses/employment that competes or conflicts
restrictions on accepting gifts, vendor relationships, and self-dealing
requirement to obtain written clearance for outside work that affects performance or creates conflict

11) Non-solicitation / non-compete (use restraint and specificity)

These clauses are enforceable only to the extent they are reasonable in:

time period
geographic scope
nature of restricted activity
legitimate business interest protected

A safer approach is often:

non-solicitation of clients/employees for a reasonable period
confidentiality + protection of trade secrets
narrowly tailored non-compete for sensitive roles (sales with key accounts, executives, R&D)

Overbroad restraints invite invalidation.

12) Termination, separation, final pay, and clearances

Your template should distinguish:

just causes (employee fault) vs authorized causes (business reasons)
due process steps and notices consistent with Philippine practice
final pay components: unpaid wages, prorated 13th month, leave conversions (if policy), tax adjustments, less lawful deductions
return of company property, clearance process, and certificates of employment practice

Important: “At-will employment” language is incompatible with Philippine security of tenure concepts and should be avoided.

13) Dispute resolution and jurisdiction (avoid misleading clauses)

Labor disputes are generally within the labor relations framework and forums (e.g., National Labor Relations Commission mechanisms for certain disputes). Clauses that attempt to fully bypass labor jurisdiction may not hold.

You may include:

internal grievance procedure
mediation/conciliation preference (where appropriate)
governing law as Philippine law
severability clause

Use care with arbitration language in employment contexts.

14) Miscellaneous “must-haves”

Entire agreement and amendments in writing
Severability
Notices (address/email for notices)
Acknowledgment of receipt of handbook/policies
Language/interpretation clause (especially if bilingual)
Authority to process employment requirements (medical exam, background checks) consistent with privacy rules

5) Template blueprints (practical structures you can reuse)

Blueprint 1: Standard Regular/Probationary Employment Agreement

Parties and effectivity
Position, reporting line, place of work
Employment status (probationary → regularization mechanics; or regular)
Duties and standards; performance management
Compensation, pay method, salary reviews (if any)
Hours, rest day, overtime, timekeeping
Benefits and leaves (statutory + company)
Code of conduct; discipline; due process
Confidentiality; data protection; acceptable use
IP and work product
Conflict of interest; outside employment
Termination and separation; final pay; clearance
Dispute handling; governing law; severability
Acknowledgments; signatures; annexes

Blueprint 2: Project Employment Agreement

Add/modify:

Project description, site, and completion criteria
Assignment order references
End-of-project separation handling
Reporting and deliverables

Blueprint 3: Fixed-Term Agreement

Add/modify:

Fixed dates and non-renewal language
Clear statement of term-based end
Cautionary language that statutory rights remain unaffected

Blueprint 4: Remote/Hybrid Addendum (attach to any contract)

Work arrangement schedule and eligibility
Timekeeping and responsiveness standards
Equipment and expense responsibilities
Data security and confidentiality controls
Incident reporting (data breach, safety incidents)
Return-to-office and change-of-arrangement clause

6) Compliance checklist (Philippine context)

A. Pre-hiring and offer stage

Role classification selected correctly (regular/probationary/project/fixed-term/seasonal/part-time) and consistent with actual work needs
Job description written (duties, reporting line, essential functions)
Probationary standards finalized (if applicable) and ready to disclose at engagement
Compensation compliant with applicable minimum wage and labor standards
Policy suite prepared: code of conduct, anti-harassment policy, data privacy notices, IT acceptable use, OSH policy
Pre-employment processing compliant with privacy principles (collect only necessary data; provide notices; secure storage)

B. Onboarding and documentation

Signed employment contract + annexes (comp/benefits schedule, job description, remote addendum if any)
Acknowledgment receipts: handbook, code of conduct, privacy notice, safety rules
Enrollment/updates for SSS/PhilHealth/Pag-IBIG and payroll setup
Tax setup for withholding and annual reporting; employee information records secured
Timekeeping enrollment and clear scheduling rules provided
OSH orientation and required trainings documented (as applicable)

C. During employment (ongoing compliance)

Accurate payroll computations: basic pay vs allowances correctly treated; proper premium pay where due
Statutory benefits delivered (including 13th month pay)
Leave administration consistent with law and policy; documentation retained
Performance management records kept (especially for probationary evaluations and standards)
Disciplinary actions follow due process and are documented
Data privacy safeguards implemented: access controls, retention rules, breach response steps
OSH compliance maintained: risk controls, incident reporting, safety committee/requirements as applicable
For project/seasonal work: assignment orders, project documentation, completion records updated

D. Separation and termination

Termination ground identified and documented (just cause vs authorized cause vs expiration/completion)
Due process observed (notices/hearing/opportunity to explain where required)
Final pay computed correctly: unpaid wages, prorated 13th month, leave conversion if applicable, lawful deductions only
Company property returned; clearance steps applied consistently (avoid withholding statutory entitlements improperly)
Certificate of employment issued per standard practice; tax year-end documents handled properly
Post-employment obligations enforced reasonably (confidentiality, return of records, narrow non-solicit/non-compete if valid)