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Formal Employment Contract Template for Philippines

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Formal Employment Contract

"I need a Formal Employment Contract for a Senior Software Developer position in our Manila tech startup, starting March 1, 2025, with specific clauses for intellectual property rights and remote work arrangements."

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What is a Formal Employment Contract?

The Formal Employment Contract serves as the primary legal document establishing an employment relationship in the Philippines. This document is essential when hiring full-time employees and must comply with the Philippine Labor Code, relevant employment legislation, and Department of Labor and Employment (DOLE) regulations. The contract typically includes mandatory provisions regarding compensation, benefits, working hours, leave entitlements, and termination procedures, while also allowing for additional terms specific to the role or industry. It provides legal protection for both employer and employee by clearly defining rights, obligations, and expectations in accordance with Philippine employment law. This document is particularly important given the strong employee protection framework in Philippine labor law and should be reviewed by legal counsel to ensure compliance with current regulations.

What sections should be included in a Formal Employment Contract?

1. Parties: Identification of the employer and employee with complete legal names and addresses

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the contract

4. Position and Duties: Job title, role description, and primary responsibilities

5. Term of Employment: Employment start date and whether fixed-term or permanent

6. Probationary Period: Length and conditions of the probationary period, not exceeding 6 months as per Philippine law

7. Compensation and Benefits: Base salary, mandatory benefits, 13th month pay, and other compensation elements

8. Working Hours and Overtime: Regular working hours, overtime policies, and rest day provisions

9. Leave Entitlements: Vacation, sick leave, and other statutory leave benefits

10. Social Security and Insurance: SSS, PhilHealth, and Pag-IBIG membership and contributions

11. Confidentiality: Protection of company confidential information and trade secrets

12. Termination: Grounds for termination, notice periods, and procedures

13. Governing Law: Specification of Philippine law as governing law

14. Dispute Reֱ: Process for resolving employment-related disputes

15. Entire Agreement: Statement that the contract represents the complete agreement between parties

What sections are optional to include in a Formal Employment Contract?

1. Non-Compete: Restrictions on working for competitors, used for senior positions or when handling sensitive information

2. Intellectual Property Rights: Ownership of work products and inventions, relevant for creative or technical positions

3. Remote Work Provisions: Terms and conditions for remote work arrangements, if applicable

4. Commission Structure: Detailed commission terms for sales or similar roles

5. Performance Metrics: Specific KPIs and performance evaluation criteria for roles with quantifiable targets

6. International Assignment: Additional terms for employees working internationally

7. Training Requirements: Mandatory training programs and professional development requirements

8. Vehicle/Equipment Provision: Terms for company-provided vehicles or equipment

What schedules should be included in a Formal Employment Contract?

1. Schedule A - Job Description: Detailed description of job responsibilities and requirements

2. Schedule B - Compensation Details: Breakdown of salary components, allowances, and benefits

3. Schedule C - Company Policies: Key company policies that form part of the employment terms

4. Schedule D - Performance Bonus Structure: Detailed bonus calculation methodology and criteria

5. Schedule E - Confidential Information: Specific list of information considered confidential

6. Appendix 1 - Code of Conduct: Company's code of conduct and ethical guidelines

7. Appendix 2 - Benefits Summary: Detailed overview of all employee benefits and eligibility criteria

Authors

Alex Denne

Head of Growth (Open Source Law) @ ֱ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Manufacturing

Information Technology

Banking and Finance

Retail

Healthcare

Education

Business Process Outsourcing

Construction

Hospitality

Telecommunications

Real Estate

Professional Services

Transportation and Logistics

Energy and Utilities

Agriculture

Relevant Teams

Human Resources

Legal

Finance

Operations

Information Technology

Sales

Marketing

Research and Development

Customer Service

Production

Quality Assurance

Business Development

Administration

Executive Management

Corporate Communications

Relevant Roles

Chief Executive Officer

Department Manager

Software Engineer

Financial Analyst

HR Manager

Marketing Director

Sales Representative

Administrative Assistant

Operations Manager

Project Manager

Research Analyst

Customer Service Representative

Production Supervisor

Quality Assurance Specialist

Business Development Manager

Technical Support Engineer

Account Executive

Legal Counsel

Data Scientist

Executive Assistant

Industries












Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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