Things you need to know about Fixed-term Employment Contract.
Last updated on 20 December 2023
1. What is an Employment Contract?
An employment contract is a written agreement between the employer and employee containing the terms of the employee’s employment (e.g. salary, job responsibilities).
The contract may also contain terms such as (a) the confidentiality of the employer’s proprietary information and trade secrets; (b) non-solicitation of the employer’s clients and employees; and (c) the employer’s ownership of intellectual property rights over the employee’s work.
2. What does it mean when the employee is fixed-term?
A fixed-term employee is hired for a specific period of time only, with the start and end dates of the employment already agreed upon even before the employment begins. Fixed-term employment is highly restricted and subject to the requirements that (a) it was knowingly and voluntarily agreed upon by the parties with no improper pressure used on the employee, and no circumstances vitiating his consent; and (b) the parties dealt with each other on more or less equal terms.
Fixed-term employment is different from regular employment which is permanent and for an indefinite period.
This contract is specifically for fixed-term employees. If you need a project-based, probationary, or regular employment contract, use the following instead:
3. When do you need an Employment Contract?
An employment contract is used when you are hiring another person as your employee and you want to clearly outline the terms of employment.
4. How can an Employment Contract protect you?
An employment contract protects both the employer and employee because it puts in writing their respective rights and obligations.
For the employee, the contract states the salary and benefits he is entitled to, his job title & responsibilities, and the work product expected from him.
On the other hand, the contract gives the employer flexibility to hire an employee only as needed for a specific period of time without having to make them regular. For example, the employer may need to hire an employee only to fill in a temporary vacancy caused by an employee on maternity leave. In this case, a fixed-term employment contract is useful because the employer can hire the employee only for the period during which the existing employee is on maternity leave. Once the existing employee returns from maternity leave, the fixed-term employment contract is terminated.
The contract may also contain terms to further protect the employer's interest. These include terms granting the employer ownership of the intellectual property rights over the employee’s work product. Other terms require the employee to keep confidential the employer’s proprietary information and trade secrets, and prohibits the employee from having any conflict of interest with the employer’s business.
5. What information do you need to create the Employment Contract?
To create your employment contract you’ll need the following minimum information:
- The name, address and nationality of the employee.
- The type of employer (i.e. individual or business) as well as name.
- The start and end dates of the employment period.
- Basic terms of the employment namely: (a) salary & benefits; (b) job title & duties; (c) place of work; and (d) working hours.
6. How much is the document?
The document costs PHP 450 for a one-time purchase. Once purchased, you have unlimited use and revisions of this type of document.
You can also avail of Premium subscription at PHP 1,000 and get (a) unlimited use of our growing library of documents (from affidavits to contracts); and (b) unlimited use of our “Ask an Attorney” service, which lets you consult an expert lawyer anytime for any legal concern you have.
