Is a written employment agreement required in the Philippines?

No. Under Article 295 of the Labor Code, an employer-employee relationship in the Philippines exists once the four-fold test is satisfied, regardless of whether a written contract has been signed. However, Filipino HR best practice — and DOLE-aligned compliance — strongly favours a written employment agreement because it documents the terms, supports the Abbott v. Alcaraz requirement of communicated probationary standards, and provides a clear record before the Labor Arbiter and the NLRC if a dispute arises. Doxuno produces a PDF you can sign before the start date and store in the HR 201 file.

How long can the probationary period be?

Under Article 296 of the Labor Code (PD 442), probationary employment is capped at six months counted from the start date. Two narrow exceptions exist: TESDA-approved apprenticeships, and roles where the nature of the work itself requires a longer evaluation period (e.g., academic teaching evaluated by semester). The Supreme Court has consistently struck down extensions beyond six months as void, and the probationer becomes a regular employee from day one if the standards for regularization were not communicated at engagement (Abbott Laboratories v. Alcaraz, G.R. No. 192571).

How is a Philippine employee terminated lawfully?

Termination must rest on either just cause under Article 297 (serious misconduct, gross neglect, fraud or breach of trust, commission of crime, or analogous causes) or authorized cause under Article 298 (installation of labor-saving devices, redundancy, retrenchment, closure, disease). For just cause, the Philippine employer must observe the twin-notice rule established in Wenphil v. NLRC and refined in King of Kings Transport v. Mamac (minimum five days for the employee to explain) and Agabon v. NLRC: First Notice (specifying the acts and grounds), opportunity to be heard, and Second Notice (decision). For authorized cause, 30 days advance written notice to both the employee and the DOLE Regional Office is mandatory, plus the corresponding separation pay.

What separation pay is due on authorized-cause termination?

Under Article 298 of the Labor Code, separation pay depends on the ground: (a) installation of labor-saving devices and (b) redundancy carry one-month basic salary per year of service or one month salary, whichever is higher; (c) retrenchment, (d) closure not due to serious losses, and (e) disease (Article 299) carry half-month basic salary per year of service or one month, whichever is higher. Closure due to serious financial losses, duly proven before the Philippine NLRC, may dispense with separation pay altogether. A fraction of at least six months is treated as one whole year. Just-cause dismissals under Article 297 generally do not entitle the employee to separation pay, save where the employer chooses to grant it as an act of social justice.

Are non-compete clauses enforceable in the Philippines?

Yes, but only if reasonable. The Supreme Court of the Philippines applies the reasonableness test established in Tiu v. Platinum Plans Phil. Inc. (G.R. No. 163512, 2007): a post-employment non-compete is enforceable when limited in (i) time (typically up to 2 years), (ii) territory (a defined Philippine region or sector), and (iii) scope (only competing activity that genuinely threatens legitimate employer interests), and when supported by valuable consideration. Overbroad non-competes are struck down as restraints of trade contrary to public policy. The Doxuno template scales the non-compete clause appropriately and exposes duration and radius fields so the Filipino employer can tune the restriction to the role.

Who has jurisdiction over employment disputes — NLRC, Labor Arbiter, or the courts?

Under Article 224 of the Labor Code, original and exclusive jurisdiction over termination, money claims arising from employment, and unfair labor practices belongs to the Labor Arbiter, with appeal to the National Labor Relations Commission (NLRC) and judicial review by the Court of Appeals (Rule 65) and ultimately the Supreme Court of the Philippines. Money claims of less than PHP 5,000 may be filed with the DOLE Regional Office under Article 129. Pure civil claims arising from a breach of contractual obligations not premised on the employment relationship — for example, an action to enforce a stand-alone non-compete or a confidentiality clause — fall within the jurisdiction of the regular Philippine trial courts. Single Entry Approach (SEnA) conciliation under DOLE DO 107-10 is a precondition for most filings.

Does the agreement need to be notarized?

No. A Philippine employment agreement is fully valid and binding once signed by both parties, without notarization. Article 1356 of the Civil Code confirms that contracts are obligatory in whatever form they have been entered into, provided the essential requisites are present. Notarization before a Notary Public commissioned under the 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC) converts the document into a public instrument and gives it stronger evidentiary weight should the dispute reach the NLRC, the Court of Appeals, or the Supreme Court. For executive contracts, regulated industries, or contracts with substantial equity components, notarization is the prudent course.

Human Resources & EmploymentPH

Free Employment Agreement Template — Philippines

A complete employment contract drafted in line with the Labor Code of the Philippines (Presidential Decree 442) for SME employers, HR managers, and start-ups across the country. Covers regular, probationary, fixed-term, and project-based engagements, with the right clauses on 13th month pay, SSS, PhilHealth, Pag-IBIG, intellectual property assignment, confidentiality, non-compete, and dispute resolution before the NLRC, the Labor Arbiter, or PDRCi arbitration.

Create Your Employment Agreement

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EMPLOYMENT AGREEMENT

EMPLOYER

Bayan Technologies, Inc.

12F Net Park Building, 5th Avenue, Bonifacio Global City, Taguig 1634 · TIN: 009-876-543-000 · SEC: CS201234567

By: Maria Cristina Reyes, Head of Human Resources

EMPLOYEE

Juan Carlos dela Cruz

Unit 1205 The Trion Tower, McKinley Hill, Taguig 1634 · TIN: 321-654-987-000 · SSS: 34-5678901-2

Effective: April 25, 2026

Senior Software Engineer · 85,000.00 PHP/month · Commences: May 15, 2026

This Employment Agreement (the "Agreement") is entered into as of April 25, 2026 between Bayan Technologies, Inc. (SEC Reg. No. CS201234567) (the "Employer") and Juan Carlos dela Cruz (the "Employee"). This Agreement is governed by the Labor Code of the Philippines (Presidential Decree No. 442, as amended), the Civil Code of the Philippines (RA 386), and all applicable Philippine legislation. In any conflict between this Agreement and a statutory provision more favorable to labor, the statutory provision shall prevail in accordance with Article 4 of the Labor Code.

POSITION AND DUTIES

The Employer engages the Employee in the position of Senior Software Engineer in the Engineering department. The Employee shall: (a) diligently perform all duties associated with the position and as may reasonably be assigned from time to time by the Employer; (b) comply with all lawful and reasonable directives of the Employer; (c) act at all times in the best interests of the Employer and observe loyalty and good faith; (d) comply with the Employer's Code of Conduct, HR policies, and Employee Handbook as amended from time to time; and (e) devote the Employee's full working time and attention to the business of the Employer during working hours. The Employer reserves the right to vary the Employee's duties, reporting line, or work location with reasonable notice, consistent with the Employee's seniority and skill set.

COMMENCEMENT AND EMPLOYMENT TYPE

The Employee's employment shall commence on May 15, 2026 on a probationary basis. The first six (6) months of employment shall constitute a probationary period ("Probation Period") in accordance with Article 296 of the Labor Code, which sets a maximum of six (6) months. The reasonable standards required for regularization, including job performance, attendance, behavior, and adherence to Company policies, shall be communicated to the Employee at the time of engagement and made part of this Agreement by reference. Upon satisfactory completion of the Probation Period, the Employee's employment shall be confirmed as regular in accordance with Article 280 of the Labor Code. Failure to meet the standards may result in non-regularization upon written notice prior to the end of the Probation Period.

COMPENSATION

The Employer shall pay the Employee a basic monthly salary of 85,000.00 PHP, payable on or before the 15th and 30th/31st of each month in accordance with Article 103 of the Labor Code, by direct deposit to the Employee's nominated Philippine bank account. All statutory deductions, including withholding tax under the NIRC (RA 8424) as amended by the TRAIN Law (RA 10963), and the Employee's share of SSS (RA 11199), PhilHealth (Universal Health Care Act, RA 11223), Pag-IBIG / HDMF (RA 9679) contributions, shall be deducted at source. The Employee shall be entitled to 13th month pay in accordance with Presidential Decree No. 851, equivalent to one-twelfth (1/12) of total basic salary earned within the calendar year, payable on or before December 24 of each year.

MANDATORY STATUTORY CONTRIBUTIONS

The Employer shall register the Employee with, and remit on or before each statutory deadline, contributions to: SSS (RA 11199), PhilHealth (Universal Health Care Act, RA 11223), Pag-IBIG / HDMF (RA 9679). Employer and Employee contributions shall be computed in accordance with the prevailing schedules issued by the relevant agencies. The Employer shall provide the Employee with proof of remittance upon reasonable request, and the Employee shall furnish accurate identification numbers (TIN, SSS, PhilHealth, Pag-IBIG MID) within the first month of employment.

HOURS OF WORK AND OVERTIME

The Employee's normal hours of work shall be 40 hours per week, distributed in accordance with the Company's published work schedule and consistent with Article 83 of the Labor Code (eight (8) hours per day maximum). The Employee shall work at Bonifacio Global City, Taguig and such other locations as the Employer may reasonably require with notice. The Employee occupies a managerial position within the meaning of Article 82 of the Labor Code, and accordingly the provisions on hours of work, weekly rest periods, and overtime pay (Articles 83–93) do not apply. The Employee shall work such additional hours as are necessary to fulfil the requirements of the role without additional overtime compensation, consistent with the nature of the engagement.

LEAVE ENTITLEMENTS

Service Incentive Leave (SIL): Five (5) days of paid leave per year after one (1) year of service, in accordance with Article 95 of the Labor Code. Unused SIL shall be commuted to its money equivalent at the end of the year.

Vacation Leave: 15 days per year (in addition to SIL where applicable), accruing pro-rata, subject to the Company's leave policy.

Sick Leave: 15 days per year, with a medical certificate required for absences exceeding two (2) consecutive days.

Holidays: Twelve (12) regular holidays under RA 9492 (with double pay if worked) and special non-working days (with 30% additional pay if worked) under RA 9849. Maternity Leave: 105 days under the 105-Day Expanded Maternity Leave Law (RA 11210). Paternity Leave: 7 days under RA 8187. Solo Parent Leave: 7 days under RA 11861 (Expanded Solo Parents Welfare Act). VAWC Leave: 10 days under RA 9262.

CONFIDENTIALITY

The Employee acknowledges that during employment the Employee may have access to Confidential Information belonging to the Employer, including but not limited to: business plans, financial data, customer and supplier information, pricing, software, source code, technical know-how, and trade secrets. The Employee shall: (a) hold all Confidential Information in strict confidence; (b) use it only for the performance of duties; and (c) not disclose it to any third party at any time during or after employment, save with the prior written consent of the Employer or as required by law. These obligations shall survive termination of this Agreement indefinitely for trade secrets and for a period of three (3) years for other Confidential Information.

DATA PRIVACY

The Employee consents to the collection, processing, use, and disclosure of the Employee's personal data (including TIN, SSS, PhilHealth, Pag-IBIG numbers, salary, performance records, emergency contacts, and bank details) by the Employer for legitimate purposes of human resources management, payroll, statutory remittance, and compliance, in accordance with the Data Privacy Act of 2012 (RA 10173) and its Implementing Rules and Regulations. The Employer shall implement reasonable organizational, physical, and technical security measures and shall not disclose personal data to third parties save as permitted under the DPA or required by law. The Employee shall comply with the Employer's data protection policies and shall not download, copy, or transfer customer or third-party personal data outside authorized purposes.

TERMINATION

Either party may terminate this employment by giving 30 days written notice in accordance with Article 300 of the Labor Code (resignation by employee — at least 30 days written notice). The Employer may terminate employment for: (a) Just Causes under Article 297 — serious misconduct, willful disobedience of lawful orders, gross and habitual neglect of duties, fraud or willful breach of trust, commission of a crime against the employer or his family, and analogous causes — observing the twin-notice rule (notice to explain, hearing, notice of decision); (b) Authorized Causes under Article 298 — installation of labor-saving devices, redundancy, retrenchment to prevent losses, or closure — with 30 days advance written notice to the employee and DOLE and payment of separation pay (one (1) month or one-half (1/2) month per year of service, depending on cause); or (c) Disease under Article 299 — with separation pay equivalent to one-half (1/2) month per year of service. Final pay (last salary, prorated 13th month pay, accrued leaves, BIR Form 2316, Certificate of Employment) shall be released within thirty (30) days from separation consistent with DOLE Labor Advisory No. 06-20.

10.

RETURN OF COMPANY PROPERTY

Upon termination of employment for any reason, the Employee shall immediately return to the Employer all Company property, documents, electronic records, identification cards, access cards, and any other materials in the Employee's possession or control. The Employee shall execute and deliver an exit clearance and final settlement documentation as a condition for the release of final pay.

11.

GOVERNING LAW AND DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of the Republic of the Philippines. Any labor dispute or grievance arising from this Agreement or the employment relationship shall be referred in the first instance to the Single Entry Approach (SEnA) under Department Order No. 151-16, and if unresolved, to the National Labor Relations Commission (NLRC) in accordance with the Labor Code and its rules of procedure. The parties submit to the exclusive jurisdiction of the proper tribunals of Taguig City.

12.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the Employee's employment and supersedes all prior letters of appointment, agreements, and representations (oral or written). No amendment shall be valid unless in writing and signed by both parties. If any provision is held invalid by a court or labor tribunal, the remaining provisions shall continue in full force and effect, and the parties shall negotiate in good faith a substitute provision that achieves the same commercial intent within applicable law.

13.

NOTICES

All notices required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by registered mail (return receipt requested), or sent by email to the addresses set out in this Agreement (or such other address as a party may notify in writing). Notices to the Employer shall be addressed to the Human Resources Department.

14.

COMPLIANCE WITH LAWS AND POLICIES

The Employee shall comply at all times with: (a) all laws of the Republic of the Philippines applicable to the Employee's role, including but not limited to the Labor Code, the Civil Code, the Data Privacy Act of 2012 (RA 10173), the Anti-Sexual Harassment Act (RA 7877), the Safe Spaces Act (RA 11313), and the Anti-Cybercrime Act (RA 10175); (b) the Employer's Code of Conduct, anti-corruption policies, and conflict-of-interest rules; and (c) any professional licensing requirements applicable to the Employee's position.

15.

SEVERABILITY AND CONSTRUCTION

If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force. Any ambiguity or doubt in the interpretation of this Agreement shall be resolved in favor of labor in accordance with Article 4 of the Labor Code.

16.

ACKNOWLEDGMENT

The Employee acknowledges that the Employee has read, understood, and freely consented to the terms of this Agreement; has had the opportunity to seek independent legal advice; and has not been subject to any vitiating consent under Articles 1330–1346 of the Civil Code.

17.

INTELLECTUAL PROPERTY ASSIGNMENT

Assignment. All inventions, discoveries, designs, software, source code, documentation, copyrightable works, trademarks, trade secrets, and other intellectual property created, developed, conceived, or reduced to practice by the Employee, alone or jointly, during the course of employment and that relate to the Employer's business or arise from the use of the Employer's resources (collectively, the "Work Product") shall vest in and be the sole and exclusive property of the Employer immediately upon creation. The Employee hereby irrevocably assigns to the Employer, by way of present and future assignment, all right, title, and interest worldwide in and to the Work Product, including all copyrights under Section 178 of the Intellectual Property Code (RA 8293), patents, design rights, trade marks, and related rights. Moral Rights. The Employee waives, to the fullest extent permitted by law, all moral rights in the Work Product. Further Assurances. The Employee shall execute any further documents (assignments, declarations, applications) and take any further steps that the Employer reasonably requires to perfect, register, or enforce the Employer's rights in the Work Product. Pre-existing IP. The Employee shall disclose in a written schedule any pre-existing intellectual property the Employee wishes to exclude from this assignment; absent such disclosure, all IP related to the Employer's business shall be deemed Work Product.

18.

POST-EMPLOYMENT RESTRICTIVE COVENANTS

For a period of twelve (12) months after the termination of employment for any reason (the "Restricted Period") (the "Restricted Territory": within Metro Manila), the Employee shall not, without the prior written consent of the Employer: (a) Non-Competition. directly or indirectly engage in, be employed by, consult for, or own a material interest in any business that competes with the Employer's business in the Restricted Territory; (b) Non-Solicitation of Clients. solicit or accept business from any client of the Employer with whom the Employee had material dealings in the twelve (12) months preceding termination; or (c) Non-Solicitation of Employees. solicit, hire, or induce any employee or contractor of the Employer to leave the Employer's service. The parties acknowledge that these restrictions are reasonable in scope, time, and territory consistent with Tiu v. Platinum Plans Phil., Inc., G.R. No. 163512 (28 February 2007), and Daisy Tiu v. Platinum Plans reasoning, and are necessary to protect the Employer's legitimate proprietary interests, including trade secrets, client connections, and confidential information. If a court finds any restriction unreasonably wide, it shall be modified to the minimum extent necessary to render it enforceable, consistent with the blue-pencil doctrine recognized by Philippine jurisprudence.

19.

ENHANCED TERMINATION PROCEDURE

Just Causes (Article 297): The Employer may dismiss the Employee for any of the following just causes: (a) serious misconduct or willful disobedience by the Employee of the lawful orders of the Employer or representative in connection with work; (b) gross and habitual neglect by the Employee of duties; (c) fraud or willful breach by the Employee of the trust reposed by the Employer or the Employer's duly authorized representative; (d) commission of a crime or offense by the Employee against the person of the Employer or any immediate member of the Employer's family or duly authorized representative; or (e) other causes analogous to the foregoing. Twin-Notice Rule. Consistent with King of Kings Transport, Inc. v. Mamac, G.R. No. 166208 (29 June 2007) and Agabon v. NLRC, G.R. No. 158693 (17 November 2004), the Employer shall observe procedural due process: (i) a first written notice specifying the ground(s) and giving the Employee at least five (5) calendar days to submit a written explanation; (ii) an administrative hearing or conference at which the Employee may be assisted by counsel or a representative; and (iii) a second written notice stating the decision and reasons. Authorized Causes (Article 298): The Employer may terminate the Employee for installation of labor-saving devices, redundancy, retrenchment to prevent losses, or closure or cessation of operation by giving thirty (30) days advance written notice to the Employee and to the Department of Labor and Employment (DOLE). Separation pay shall be paid: one (1) month per year of service for installation of labor-saving devices and redundancy; one-half (1/2) month per year of service (or one month, whichever is higher) for retrenchment and closure not due to serious losses. Disease (Article 299): Termination on the ground of disease shall be supported by a competent public health authority's certification and accompanied by separation pay of one-half (1/2) month per year of service. Final Pay. Final pay (basic salary, prorated 13th month pay, leave conversion, separation pay if applicable, BIR Form 2316, and Certificate of Employment) shall be released within thirty (30) days from separation consistent with DOLE Labor Advisory No. 06-20.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date first written above.

EMPLOYER

Maria Cristina Reyes

Head of Human Resources

Bayan Technologies, Inc.

Date: ____________________

EMPLOYEE

Juan Carlos dela Cruz

Date: ____________________

What is an Employment Agreement?

An Employment Agreement is the master contract that governs the relationship between a Philippine employer and an employee, fixing in writing the rights and obligations that flow from Article 295 of the Labor Code (PD 442). The Supreme Court of the Philippines applies the four-fold test under Article 295 to determine whether an employer-employee relationship exists: (i) selection and engagement of the employee, (ii) payment of wages, (iii) power of dismissal, and (iv) the power to control not only the result of the work but also the means and methods by which it is accomplished. When all four elements concur, the worker is an employee — not an independent contractor — and the full protective mantle of Philippine labor law attaches, including security of tenure, statutory benefits, and the right to due process before termination.

In Filipino HR practice, the agreement specifies the exact employment classification under Article 295: regular employment for indefinite engagements, probationary employment for the first six months under Article 296, fixed-term employment under the Brent School v. Zamora doctrine (G.R. No. 48494) where the term is freely agreed and the engagement is not designed to circumvent security of tenure, project employment for engagements coterminous with a specific project, seasonal employment for cyclical work, and casual employment for incidental work. The contract then covers the position and reporting line, the workplace (head office, branch, or telecommuting arrangement under Republic Act 11165 — Telecommuting Act), monthly basic salary in Philippine pesos, working hours under Article 83, statutory benefits, leave entitlements, intellectual property assignment, post-employment restrictions, and grounds and procedure for termination.

Under Philippine law, security of tenure is a constitutional right (Article XIII, Section 3 of the 1987 Constitution) and a regular employee can only be dismissed for just cause under Article 297 (serious misconduct, gross and habitual neglect, fraud or breach of trust, commission of a crime against the employer, or analogous causes) or for authorized cause under Article 298 (installation of labor-saving devices, redundancy, retrenchment, closure, or disease under Article 299), in each case observing the twin-notice rule and procedural due process developed in Wenphil Corporation v. NLRC (G.R. No. 80587), King of Kings Transport v. Mamac (G.R. No. 166208), and Agabon v. NLRC (G.R. No. 158693). A robust employment agreement therefore documents the terms upfront so that any future dispute before the Labor Arbiter or the NLRC is decided on a clear record.

What this template covers

The Doxuno employment agreement template assembles every clause an SME employer in the Philippines needs out of the box, plus optional Expert clauses for sensitive roles, intellectual property, and post-employment restrictions calibrated to Philippine jurisprudence.

Employer and employee identification

Corporate name, SEC, TIN, address; employee TIN and SSS number

Article 295 employment classification

Regular, probationary, fixed-term, or project per the Labor Code

Six-month probation under Article 296

Capped duration with regularization standards (Abbott v. Alcaraz)

Position, workplace, and start date

Job title, reporting line, and Philippine work location

Monthly basic salary in PHP

Aligned with regional minimum wage orders of the RTWPB

PD 851 — 13th month pay

Mandatory benefit payable on or before December 24 each year

SSS, PhilHealth, Pag-IBIG

Three pillars of statutory social protection in the Philippines

Working hours and overtime

Article 83 (8 hrs/day) and Article 87 overtime premium pay

Service Incentive Leave

Five-day SIL under Article 95 of the Labor Code

Intellectual property assignment

Work-for-hire under the IP Code (RA 8293)

Confidentiality and non-compete

Tiu v. Platinum Plans reasonableness test for post-employment restrictions

Termination and dispute resolution

Article 297-298 grounds, twin-notice rule, NLRC or PDRCi

How to create your employment agreement

No legal background required. The Doxuno generator walks any Philippine SME owner, HR practitioner, or first-time employer through every section and outputs a polished PDF that can be signed before the new hire starts work.

1
Enter the parties identification
Provide the registered corporate name of the Philippine employer, SEC registration number, BIR Taxpayer Identification Number (TIN), the principal office address, and the duly authorized signatory (typically the President, HR Director, or General Manager). For the employee, capture the full legal name as printed on the PhilSys ID, residential address, TIN, and SSS Number. Use the exact corporate name on the SEC Certificate of Incorporation rather than any trade name to ensure enforceability before the NLRC and Philippine courts.
2
Choose the employment classification and probation
Select the employment classification under Article 295 of the Labor Code: regular employment (the default, indefinite); probationary employment under Article 296 capped at six months and tied to communicated regularization standards (Abbott Laboratories v. Alcaraz, G.R. No. 192571); fixed-term employment for legitimate fixed-period engagements that satisfy the Brent School v. Zamora doctrine; or project employment for work coterminous with a specific project as defined by DOLE Department Order 19. Set the probation period (0, 3, or 6 months) and the start date. The Doxuno engine inserts the matching clauses automatically — no manual rewriting.
3
Set position, workplace, working hours, and salary
Specify the job title, department, reporting manager, and the Philippine workplace (head office, branch, or telecommuting/hybrid arrangement under Republic Act 11165). Choose the standard work week (40, 44, or 48 hours) consistent with Article 83. Enter the monthly basic salary in Philippine pesos, ensuring it equals or exceeds the regional minimum wage for the relevant Filipino region as set by the Regional Tripartite Wages and Productivity Board (RTWPB). Confirm whether the employee is overtime-eligible (rank-and-file, Article 87) or exempt (managerial, Article 82).
4
Activate statutory and company benefits
Switch on the 13th month pay clause under Presidential Decree 851 (mandatory for rank-and-file, payable on or before December 24). Enrol the employee in the Social Security System (RA 11199), the Philippine Health Insurance Corporation (RA 7875 as amended by RA 11223 — Universal Health Care Act), and the Home Development Mutual Fund (RA 9679 — Pag-IBIG). Set the Service Incentive Leave under Article 95 (5 days minimum after one year), and add company-granted vacation leave and sick leave on top, per Filipino market practice for the role and seniority.
5
Add IP, confidentiality, non-compete, and choose dispute resolution
Activate the intellectual property assignment clause under the IP Code (RA 8293), Section 178.3 (work-for-hire — copyright in works created within the scope of employment vests in the employer); add a confidentiality clause aligned with the Data Privacy Act of 2012 (RA 10173); and, if the role justifies it, an enhanced post-employment non-compete clause calibrated to the reasonableness test in Tiu v. Platinum Plans Phil. Inc. (G.R. No. 163512) — limited in time, territory, and scope and supported by valuable consideration. Finally, pick dispute resolution: NLRC for labor disputes, PDRCi for arbitrable commercial issues, or the regular Philippine courts for civil claims that fall outside Article 217 of the Labor Code. Download the PDF, sign, and onboard.

Legal considerations in the Philippines

The Philippine employment agreement is the most regulated contract in the SME toolkit. Several substantive and procedural rules deserve careful attention before the document is signed, especially around regularization, statutory benefits, post-employment restrictions, and termination.

This template is provided for general informational purposes only and does not constitute legal advice. For executive contracts, regulated industries (banking, telecommunications, BPO/POEA-related work), or high-stakes equity-linked compensation packages, consult a licensed Filipino lawyer admitted to the Integrated Bar of the Philippines (IBP) or a DOLE-accredited labor law practitioner.

Reviewed by Philippine labor law professionals. The clauses in this employment agreement and the substance of this page have been checked against the Labor Code (PD 442), DOLE Department Orders, the Civil Code, the IP Code, the Data Privacy Act 2012, and current Supreme Court of the Philippines jurisprudence so SMEs can hire confidently.

Article 295 four-fold test and security of tenure

The four-fold test established by the Supreme Court of the Philippines under Article 295 of the Labor Code determines whether a worker is an employee or an independent contractor: (i) selection and engagement, (ii) payment of wages, (iii) power of dismissal, and (iv) the power of control over the means and methods. Where all four elements concur, the worker is an employee and security of tenure under Article XIII, Section 3 of the 1987 Constitution attaches — meaning the employee may only be dismissed for just cause (Article 297) or authorized cause (Article 298), with full procedural due process. A robust Philippine employment agreement therefore identifies the relationship clearly and avoids labels (consultant, freelancer, contractor) that the NLRC and the courts will pierce when the substance points to employment, exposing the Filipino employer to back wages, separation pay, and reinstatement.

Probationary employment, regularization standards (Abbott v. Alcaraz)

Under Article 296 of the Labor Code, probationary employment in the Philippines must not exceed six months from the start date, except for apprenticeship under TESDA or where the nature of the work requires a longer period. The Supreme Court ruled in Abbott Laboratories Phils. v. Alcaraz (G.R. No. 192571, 2013) that the probationary employee must be informed of the reasonable standards for regularization at the time of engagement, otherwise the Filipino employee is deemed regular from day one. Mitsubishi Motors Phils. v. Chrysler Phil. Labor Union (G.R. No. 148738) confirmed that the six-month cap is strict. The Doxuno template surfaces a regularization-standards field so the employer commits the standards to writing, satisfying Abbott and reducing illegal-dismissal exposure before the NLRC.

Termination — Article 297 just cause and Article 298 authorized cause

Termination of a regular Philippine employee is governed by two complementary regimes. Article 297 (just cause) covers (a) serious misconduct or wilful disobedience, (b) gross and habitual neglect of duties, (c) fraud or wilful breach of trust, (d) commission of a crime or offense against the employer or family, and (e) analogous causes — termination requires the twin-notice rule (Wenphil v. NLRC, King of Kings Transport v. Mamac, Agabon v. NLRC). Article 298 (authorized cause) covers (a) installation of labor-saving devices, (b) redundancy, (c) retrenchment to prevent losses, (d) closure of business, and (e) disease — requiring 30-day prior written notice to both the employee and the DOLE, plus separation pay (one month salary per year of service for redundancy/labor-saving, half-month salary per year for retrenchment/closure/disease, with one-month minimum where applicable). Procedural shortcuts cost Filipino employers nominal damages of PHP 30,000 even where the substantive cause stands (Agabon doctrine).

Non-compete, IP assignment, and Data Privacy Act 2012

Post-employment non-compete clauses in the Philippines are scrutinised under the reasonableness test laid down in Tiu v. Platinum Plans Phil. Inc. (G.R. No. 163512, 2007) and Rivera v. Solidbank Corporation (G.R. No. 163269, 2006): the restriction must be limited in (i) time (typically up to 2 years), (ii) territory (typically the relevant Philippine region or sector), and (iii) scope (only legitimate competing activity), and must be supported by valuable consideration. Intellectual property created within the scope of employment vests in the Philippine employer under Section 178.3 of the IP Code (RA 8293, work-for-hire principle), but inventions deserve a separate written assignment. Where the employee handles personal data — clients, candidates, patients — the contract must comply with the Data Privacy Act of 2012 (RA 10173) and require the employee to act consistently with NPC Circulars and the company Privacy Manual; non-compliance exposes both employer and employee to administrative fines from the National Privacy Commission of up to PHP 5,000,000 per violation under NPC Circular 2022-01.

Frequently Asked Questions

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