Regular Employment Contract SampleAtty Elvin
Regular employment grants full security of tenure to employee unlike in some other forms of employment.
For instance, a regular employee cannot be dismissed due to expiration of contract, end of season, completion of projects, etc. He can only be dismissed for cause or when the business exigencies or operation of the company demands it such as redundancy, retrenchment, and closure.
Regular employment contract should embody the respect to such security of tenure and at the same time maximize the potential exercise of management prerogatives. The right to benefits and obligations of employee to serve the employer with utmost fidelity and confidence should be plotted accordingly in the agreement.
Bear in mind that there are several ways that an employee can become regular:
- Regular by operation of law. This happens when the employee is not issued a regular employment contract but has been with the company for at least six (6) months counted from the time of hiring.
- Regular by issuance of contract for regular employment. This can happen at any time within the probationary period, at the discretion of the management. An employee may be issued the regular status on the 2nd or 3rd month in service or prior to the expiration of the 6-month probationary period.
- Regular from day one. This happens when an employee who is supposed to be a probationary employee was not informed about the reasonable standards for which he should become regular.
- Regular for as long as the activity for which he was hired exists. This occurs when a casual has been with the company for at least one (1) year.
Get a copy of the Labor Code of the Philippines 2018 Edition by Atty. Elvin B. Villanueva
Hence, the employer should be familiar with all the above scenarios and guard against technicalities. Proper understanding of the rules and mechanics of contract is a good way to start.
The post below is a sample regular employment contract. This is based on the book Human Resource Forms, Notices and Contracts Volume 1 by Atty. Elvin B. Villanueva.
KNOW ALL MEN BY THESE PRESENTS:
This CONTRACT FOR REGULAR EMPLOYMENT is entered into this ______ day of _____________ 20________, by and between
XYZ Corporation, a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines with principal place of business at 123 Bldg., Ayala Ave., Makati City, Philippines, represented herein by its President, MR. ____________________, hereinafter known as EMPLOYER;
- ____________________________________, of legal age, married/single, a with residential address at __________________________, and hereinafter referred to as “REGULAR EMPLOYEE”;
WHEREAS, the EMPLOYER is in need of employee with competence in the area subject of the position mentioned hereunder;
WHEREAS, the REGULAR EMPLOYEE seeks employment, applied for and expressed willingness to join the EMPLOYER as its permanent worker;
THEREFORE, the parties hereby covenant:
COMMENCEMENT OF REGULAR EMPLOYMENT
- The REGULAR EMPLOYEE is engaged as _________________________________ with duties and responsibilities set forth hereunder subject to provisions on lawful causes for termination of relationship under the law;
- The REGULAR EMPLOYEE shall report for work on or before 8:00 a.m. and leave not earlier than 5:00 p.m., Monday to Saturday. Any entry later than 8:00 a.m. shall be reckoned as tardy and any end of shift earlier than 5:00 p.m. shall be considered undertime, both of which shall be subject to corresponding salary deduction and disciplinary action;
JUST AND AUTHORIZED CAUSES FOR DISMISSAL OR TERMINATION
- The REGULAR EMPLOYEE may be dismissed from service for just causes found under Article 297 of the Labor Code, as amended and other applicable provisions of the law;
- The employment may likewise be terminated for authorized cause under Articles 298 and Article 299 of the Labor Code, as amended or any other relevant provisions;
- Further, the employment may be terminated in the event of violation by the REGULAR EMPLOYEE of the provisions of the Code of Conduct hereto attached as Annex “A”. The REGULAR EMPLOYEE undertakes that she has read and understood the provisions therein and were fully explained to her in language and/or dialect that he understands and agrees to abide thereto;
- Employment may likewise be validly terminated if the business operation has ceased on account of a law, rules or regulations ordering the cessation of the company;
- The employment may likewise be suspended due to causes arising from lack of raw materials, lack of customer order, declining sales, among others as determined by the management;
PLACE OF POSTING
- The initial place of posting of the REGULAR EMPLOYEE shall be in the principal office of the EMPLOYER. However, the REGULAR EMPLOYEE agrees to be assigned or transferred to another department, section, branch, etc., anywhere in the Philippines when the exigencies of business require or when required by the project secured by the EMPLOYER;
- The place of work may change when the EMPLOYER moves to another principal place of business and in such case, the REGULAR EMPLOYEE agrees to relocate;
DUTIES AND RESPONSIBILITIES
- The REGULAR EMPLOYEE shall perform duties and responsibilities hereto attached as Annex “B,” and such other responsibilities that may be assigned relevant thereto;
- In addition, the REGULAR EMPLOYEE shall observe the law, rules and regulations, standards of fairness, justice, good customs and fair play in the discharge of her duties;
- In the performance of his duties, the REGULAR EMPLOYEE shall be evaluated to determine her competence and capabilities to sustain the company standards. The following standards weight shall be used to ascertain whether the regular employee sustains the company’s performance standards:
- Performance 30%
- Punctuality/Attendance 20%
- Behavior 20%
- Teamwork 20%
- Initiative 10%
- The total weight is 100%. If the REGULAR EMPLOYEE receives a total weight below 85% it shall be deemed as incompetence or poor performance which may be ground for dismissal if it becomes gross and habitual. It is deemed as gross and habitual if such poor performance is sustained for a period of three (3) months or three (3) appraisal periods as provided in the Personnel Handbook, whether continuous or broken during the calendar year;
- Performance metrics representing 30% of the total weight shall be based on the following:
- Updated Business knowledge 20%
- Output/production 50%
- Resourcefulness 20%
- Teamwork 10%
- Punctuality/attendance shall be 20% subject to deduction of 3% for every instance of tardiness and 4% for every instance of absence. Absence due to medical reason shall be supported with notarized medical certificate and for other reasons a sworn statement of the fact of absence and affidavits of disinterested persons. Failure to produce said documents and records within two (2) days from absence shall be deemed unauthorized absence;
- Behavior shall be 20% subject to deduction for every citation or violation of company rules, to wit:
- Written warning – less 2%
- Stern warning – less 5%
- Written reprimand – less 6%
- 1-day Suspension – less 7%
- Longer suspension – less 10%
- The REGULAR EMPLOYEE is expected to be a team player and work in coordination with other employees. A teamwork rating shall be made by his immediate superior based on the result of the latter’s interview or assessment of the feedback of other employees or team members, as the case may be;
- The rating for Initiative shall be given by the immediate superior based on how the REGULAR EMPLOYEE acts on tasks on his own without any express direction by the superior bearing in mind the goals and objectives of the company;
- Based on the above standards, the REGULAR EMPLOYEE shall be rated monthly or as often as necessary as set forth in the Personnel Handbook.
COMPENSATION AND BENEFITS
- The REGULAR EMPLOYEE shall receive a salary of _____________________ PESOS (PHP______________.00) per day which will be paid every 15th and 30th or 31st, as the case may be, of each month subject to the following payroll cut-off period;
- For the payroll period of 15th of the month, attendance cut-off shall be until the 5th of said month. While for the payroll period of 30th of the month, the cut-off shall be from the 6th of the month until 20th Computation of benefits shall use the 313 factor/divisor;
- The salary of the REGULAR EMPLOYEE shall be deducted an amount representing her contribution to social legislation benefits such as Social Security System (SSS), Pag-Ibig and Philhealth. He is likewise entitled to 13th month pay provided she has served at least one (1) month of service;
- The compensation and benefits are customized for each employee. Thus, the REGULAR EMPLOYEE undertakes to treat with strict confidentiality her compensation and benefits information. He shall refrain from discussing with anyone whether connected with the EMPLOYER or not. Violation of this prohibition shall be considered as ground for disciplinary action and shall affect the behavior rating stated above;
- As a general expression of related principle in the Code of Conduct, the REGULAR EMPLOYEE shall report for work in proper business attire. He shall behave in accordance with the rules and regulations laid down in company’s policies, regulations and practices;
- The REGULAR EMPLOYEE recognizes and acknowledges that the systems that the EMPLOYER owns, holds in trust, develops, plans whether for its own use or by its clients are confidential in nature and are property of the EMPLOYER. She further acknowledges that to enable the EMPLOYER to perform services for clients, the latter may have furnished the EMPLOYER confidential information concerning their business affairs, property transactions under consideration (including identities of their companies that are or may be parties to such transactions), methods of operation or other data that the goodwill afforded to EMPLOYER depends upon, among other things;
- Thus, the REGULAR EMPLOYEE agrees that, except as directed by the EMPLOYER in writing, she will not at any time, whether during or after employment, disclose to any person or use any confidential information, or permit any person to examine and/or make copies of any documents which contain or are derived from any confidential information whether prepared by the EMPLOYER or coming into the possession of the REGULAR EMPLOYEE directly or by reason of her job;
- The term “confidential information” shall include all information, whether written or oral, that is not known by, or not generally available to, the public at large and that concerns the business, activities, financial affairs, trade secrets, technology of the EMPLOYER or otherwise relates to the EMPLOYER, in any manner whatsoever, its customers, their clients, suppliers and other businesses or entities, with whom the EMPLOYER does business which may come to the possession of the REGULAR EMPLOYEE during the tenure of employer in whatever manner or reason;
- The REGULAR EMPLOYEE undertakes not to make copies or duplicates of any confidential information or other sensitive property or materials mentioned, including but not limited to keys, access cards, diskettes, flash drives, electronic files programs, databases regardless of storage location, photographs or such other proprietary information relating to the EMPLOYER’s business;
- Failure of the REGULAR EMPLOYEE to submit, turnover, or return the company property falling under confidential information, as demanded in writing, within five (5) days therefrom, shall be deemed as violation of the confidentiality clause;
- In case of violation, the REGULAR EMPLOYEE agrees to compensate the EMPLOYER the amount of XXX THOUSAND PESOS (PHPXXX,000.00) by way of liquidated damages or at a higher amount as may be established by the EMPLOYER at its option;
- The REGULAR EMPLOYEE authorizes the EMPLOYER to apply whatever salary earned or accruing to her as compensation for the violation and to withhold any amount pending actual application;
- The REGULAR EMPLOYEE agrees and covenants within a period of two (2) years after the termination of this agreement, he shall not engage, directly or indirectly in any business, enterprise or employment which directly competes with the business of the EMPLOYER or any of its customers or get employed with any corporation, association or company, whose business, enterprise directly or indirectly competes with the business of the EMPLOYER or any of its customers. He shall not get employed with another employer or company in whatever capacity, whether permanent, consultancy or temporary;
- The REGULAR EMPLOYEE shall not, during the same period directly or indirectly solicit to provide or provide, without the prior written consent of the EMPLOYER, any professional services for anyone who is a client of the EMPLOYER;
- If the REGULAR EMPLOYEE would in the future be directed by any governmental agency or judicial forum or court or asked to testify in any proceeding concerning any matter learned in the course of services provided to or on behalf of the EMPLOYER, she shall notify the latter before making any disclosure at least ten (10) days prior the date of testimony, hearing or disclosure;
- In the event of any breach of the stipulations herein such as the non-compete clause, the REGULAR EMPLOYEE shall compensate the EMPLOYER the amount of at least ONE HUNDRED THOUSAND (PHP100,000.00) by way liquidated damages or a higher amount as may be proven by the EMPLOYER at the latter’s option;
- Payment of liquidated damages shall in no way affect the other rights which the EMPLOYER may have against the REGULAR EMPLOYEE, especially the right to obtain injunctive relief against her;
- The REGULAR EMPLOYEE understands and acknowledges that during the course of his employment, the EMPLOYER is subjecting him to training relating to product knowledge, operation, skills, strategies, techniques using materials, documents, equipment, device, technology, among others which the EMPLOYER has invested and which the latter spent for incurred expenses;
- Thus, the REGULAR EMPLOYEE shall remain with the EMPLOYER for a period of at least two (2) years from the date of training (whether the employee actually attended or not as long as the company has made payments therefor), seminar, orientation, symposium, among others to fully satisfy the cost of such training. In case of resignation, the REGULAR EMPLOYEE shall notify the EMPLOYER in writing at least thirty (30) days prior to the effective date thereof by serving in person to her immediate superior a hard copy of the resignation letter. The thirty (30) days shall be counted from the actual receipt of said hard copy document;
- If the REGULAR EMPLOYEE leaves the company for whatever reason within his control (for cause, resignation, etc.) prior to the expiration of the two (2)-year period mentioned herein, he shall reimburse the company for the cost of every training as follows:
- Less than six (6) months from date of training – 100% of cost
- Six (6) months but less than one (1) year – 75% of cost
- One (1) year but less than 18 months – 50% of cost
- Eighteen (18) months to less than 20 months – 25% of cost
- If the REGULAR EMPLOYEE resigns without observing the 30-day prior notice she shall pay the EMPLOYER the total amount of ONE HUNDRED THOUSAND PESOS (PHP100,000.00) as liquidated damages. To effect the payment, the REGULAR EMPLOYEE authorizes the EMPLOYER to withhold whatever salary and/or benefits earned and apply the same against the liability;
- This written contract and its annexes constitute the entire agreement between the parties binding between them and their assigns, heirs and successors-in-interest.
IN WITNESS WHEREOF, the parties have hereby affixed their respective signature this ____ day of _______, 20____, in the City of ____________.
For the EMPLOYER:
President REGULAR EMPLOYEE
Signed in the presence of:
Republic of the Philippines )
City of _______________ ) S.S.
BEFORE ME, a notary public for and in the City of ______________, the parties appeared and presented their respective identification cards as competent proof of identity and are known to me and to me known to be the same persons who executed the foregoing Contract for Regular Employment consisting of seven (7) pages, including this page where the Acknowledgment is written and affirmed to me that the same is their own, free, voluntary act and deed.
WITNESS MY HAND AND SEAL, this _____ day of __________, 20____.
Doc. No.: _________;
Page No.: _________;
Book No.: _________;
Series of 20______