Hiring in the Philippines

Employment Contract

Is a written contract of employment required? If so, what main terms must be included?

• Written contract is strongly recommended; required for project-based, fixed-term, and probationary employment
• No specific form prescribed for regular employment, but written form protects both parties

4 main types of employment:

• Regular (acquired after 6 months; cannot be dismissed except for just/authorised causes)
• Probationary (max 6 months, with communicated standards)
• Project-based (co-terminus with the project)
• Seasonal / Fixed-term (for specific undertakings)

Contracts must be written in English or Filipino; bilingual versions are acceptable.

Terms of Employment Contract

• Employer’s information: legal name, address, SEC/DTI registration, and authorised representative;
• Employee’s information: full name, date of birth, address, TIN, SSS/PhilHealth/Pag-IBIG numbers;
• Position/job description, duration of employment and probationary period (if applicable);
• Compensation: basic wage, allowances and benefits (in Philippine Peso);
• Working hours, rest days, and overtime arrangements;
• Grounds for termination (in accordance with labour Code) and applicable procedures and notice requirements.

Terminating Employment Contract

Philippine labour law is generally employee-friendly. Employers may only terminate employment for just causes (employee fault) or authorised causes (business/health), per Arts. 297–299 of the Labour Code.

Twin-notice rule:

• Written notice of charge;
• pportunity to be heard;
• Written notice of decision.

Failure = illegal dismissal.

Required Notice Periods:

• Just Cause dismissals: Minimum 30 days written notice; must follow twin-notice due process
• Authorised Cause (redundancy/retrenchment): Minimum 30 days notice to both employee AND DOLE
• Employee resignation: Generally, 30 days written notice, unless a shorter period is justified
• Separation pay is required for authorized causes, with amount depending on the ground (typically ½ month to 1 month pay per year of service).

Philippine labour laws are strongly pro-employee. Employers must strictly follow due process or face illegal dismissal liability including full back wages and reinstatement.

Salary

Philippine Employees:

Salaries must be paid in Philippine Peso (PHP). Employers are required to pay wages at least once every two weeks or twice a month at intervals not exceeding 16 days (Art. 103, Labour Code).

Though DOLE is silent about other payroll frequency, monthly payroll may be permissible provided it is clearly communicated to employees and is structured in a manner that benefits them (e.g., payroll is released on the 15th of the month while covering earnings through the end of the month). However, companies should assess compliance with applicable labour laws and payroll regulations, and it is best to discuss the arrangement internally with the company’s legal adviser before implementation.

Foreign Employees: Salaries may be paid in PHP or, where agreed, in foreign currency, subject to BSP regulations.

Wage Deductions: Employers may only make deductions authorised by law, written agreement or court order. Deductions for SSS, PhilHealth and Pag-IBIG are mandatory. Deductions that reduce wages below minimum wage are generally prohibited (Art. 113, Labour Code).

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Philippines employment laws and regulations, please visit the official governmental websites.

Updated on: June 2026