CONTRACT BY DIRECT EMPLOYMENT
Night-Shift Differential
Government and nonprofit agencies
undertake projects designed to promote
economic growth and create jobs in specific
areas. “Direct employment” is the term used
for the workers employed by these projects.
By contrast, indirect employment refers to
job creation and business growth in the local
economy as a result of demand created by
the project and its direct employees (Leaf
Group Media, 2019).
PHILIPPINE LABOR CONTRACTS
There are several other special laws
specifying statutory minimum employment
benefits and standards that an employer
must legally comply with. These include the
Social Security Law, the National Health
Insurance Act, the Sexual Harassment Law,
and the Comprehensive Dangerous Drugs
Act among others.
TYPES OF EMPLOYMENT CONTRACTS
The Philippine labor law recognizes following
five categories of employment
arrangements based on the nature of the
employment.
·Regular employment, where the employee
renders work for an indefinite period;
·Probationary employment, wherein the
employment is subject to a period of
observation and evaluation with an aim to
assess the worker’s suitability for permanent
employment;
·Project-based employment; fixed period or
term-based employment; or seasonal
employment where the arrangement pre-
determines the expiration of the project,
term, season or incidental activity.
 ART. 84. Hours Worked
 ART. 85. Meal Periods
 ART. 86.
 ART. 87. Overtime Work
 ART. 94. Right to Holiday Pay
 ART. 95. Right to Service Incentive
Leave
SOCIAL SECURITY
The Philippines’ social legislation requires
both employees and employers to
contribute to the Social Security System
(SSS), National Health Insurance Program
and the Home Development Mutual Fund
that covers sickness, maternity, disability,
retirement, deaths and funerals, health
insurance and housing loans.
PERSONAL INCOME RATE
Foreign nationals working in the Philippines
are classified as “resident aliens” based on
the duration of their stay and employment
period in the country. Income earned by
such individuals is treated the same way as
those of Filipino nationals and is taxed at
source by the employer. In some case,
income tax is deducted at source from
foreign worker’s gross income at a rate of 15
percent before any other deduction is made.
TERMINATION OF CONRACT AND
SEVERANCE PAY
The Philippines’ laws recognize two
categories of “cause”: Just cause and
authorized cause on grounds of which an
employee’s contract may be terminated. An
employee dismissed for a “just cause” is not
entitled to severance or termination pay,
whereas those dismissed for authorized
cause receive a severance pay equivalent to
at least one-half month’s or one month’s pay
every year of service, depending on the
reason for termination.
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