The Philippines has several types of employment contracts but the most commonly practiced are regular and project-based.
Under the regular employment model, new employees may be employed for a maximum of 6 months on a probationary basis before acquiring regular status. They are evaluated on their performance during this period and must receive a good evaluation in order to acquire regular status. Those employees who come to work for a company on a regular basis are often given medical coverage, vacation leaves, and other monetary allowances.
Under the terms of a project-based employment contract, an employee is contracted to work on a specific project or undertaking with an agreed timeframe or scope of work. Upon completion of the task, the contract will either be ended or renewed, at the employer’s discretion.
The following are less common employment contract types that you should only consider if you have consulted with an employment law expert.
Seasonal employment in the Philippines applies where the work or service to be performed is seasonal in nature and the employment is for the duration of the season and the employee will be laid off once the season is over.
A fixed-term employment contract is a contract signed for a limited period. It is important to make sure that the employee understands the employment is temporary and the employee was not put under any pressure to sign a fixed-term contract instead of a regular employment contract.
There are benefits to both employment models. Project-based employment is more flexible – once a project or the contract term has expired the employee is terminated. For this reason, most remote workers in the Philippines are employed under this model.
However, regularized employment is more desirable for the employees. In fact, many Filipino employees only wish to work under a regular employment contract. By offering that type of employment, you can attract more (and potentially better) candidates.