Employee Lease Agreement for Philippines

Employee Lease Agreement Template for Philippines

A comprehensive legal agreement governed by Philippine law that establishes and regulates the arrangement between a staffing agency (lessor) and a client company (lessee) for the temporary provision of employees. The agreement ensures compliance with Department Order No. 174-17 and the Labor Code of the Philippines, detailing the terms of employee deployment, responsibilities of both parties, compensation arrangements, statutory benefits, and worker protections. It addresses crucial aspects such as supervision, workplace safety, statutory compliance, and the maintenance of employment standards while clearly delineating the rights and obligations of all parties involved.

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What is a Employee Lease Agreement?

The Employee Lease Agreement is essential for businesses operating in the Philippines that require flexible staffing solutions while maintaining compliance with local labor laws. This document is particularly relevant in scenarios where companies need temporary workforce augmentation, specialized skills, or project-based staffing. The agreement must strictly adhere to Department Order No. 174-17 and the Labor Code of the Philippines, which regulate contracting and subcontracting arrangements. It details comprehensive provisions for employee welfare, statutory benefits, workplace safety, and clear delineation of responsibilities between the lessor and lessee. The document is crucial for protecting the rights of all parties while ensuring operational efficiency and legal compliance in employee leasing arrangements.

What sections should be included in a Employee Lease Agreement?

1. Parties: Identifies the contracting parties: the lessor (staffing/employment agency), the lessee (client company), and their respective details

2. Background: Explains the context of the agreement, including the lessor's business of providing staff and the lessee's need for temporary workers

3. Definitions: Defines key terms used throughout the agreement, including 'Leased Employees', 'Services', 'Assignment Period', etc.

4. Scope of Services: Details the employee leasing services to be provided, including the nature of work, number of employees, and deployment terms

5. Term and Termination: Specifies the duration of the agreement and conditions for termination by either party

6. Responsibilities of the Lessor: Outlines the lessor's obligations including recruitment, payroll management, statutory compliance, and employee administration

7. Responsibilities of the Lessee: Details the lessee's obligations including workplace safety, supervision, and operational management of leased employees

8. Employee Rights and Benefits: Specifies how statutory benefits, leaves, and other employee rights will be managed and guaranteed

9. Fees and Payment Terms: Details the service fees, payment schedule, and any additional charges

10. Compliance with Labor Laws: Ensures adherence to Philippine labor laws, particularly DO 174-17 and the Labor Code

11. Supervision and Control: Clarifies the division of supervisory responsibilities between lessor and lessee

12. Confidentiality: Protects confidential information of all parties, including trade secrets and employee data

13. Indemnification: Establishes mutual indemnification obligations for various risks and liabilities

14. General Provisions: Standard clauses including governing law, notices, amendments, and dispute resolution

What sections are optional to include in a Employee Lease Agreement?

1. Insurance Requirements: Details specific insurance coverage requirements - include when additional insurance beyond statutory requirements is needed

2. Performance Standards: Establishes KPIs and performance metrics - include when specific performance levels need to be maintained

3. Training and Development: Outlines training responsibilities and programs - include when specific skills development is crucial

4. Intellectual Property Rights: Protects IP created during the lease period - include when employees will be involved in creative or technical work

5. Non-Competition: Restricts competitive activities - include when employees have access to sensitive information

6. Transition Services: Details process for transitioning employees - include when long-term or complex assignments are involved

7. Force Majeure: Addresses unforeseen circumstances - include when long-term or critical operations are involved

What schedules should be included in a Employee Lease Agreement?

1. Schedule A - Employee Details: List of leased employees, their positions, qualifications, and assigned roles

2. Schedule B - Fee Structure: Detailed breakdown of service fees, markups, and payment calculations

3. Schedule C - Service Level Agreement: Specific performance metrics and service standards

4. Schedule D - Benefits Package: Details of employee benefits, both statutory and additional

5. Schedule E - Workplace Policies: Applicable workplace policies and procedures

6. Appendix 1 - Required Forms: Standard forms for employee documentation and reporting

7. Appendix 2 - Statutory Compliance Checklist: Checklist of required compliance with Philippine labor laws

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Lease Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Information Technology

Business Process Outsourcing

Construction

Retail

Hospitality

Healthcare

Logistics

Financial Services

Telecommunications

Relevant Teams

Human Resources

Legal

Compliance

Operations

Procurement

Finance

Project Management

Risk Management

Employee Relations

Executive Leadership

Relevant Roles

Human Resources Director

Legal Counsel

Compliance Officer

Operations Manager

Procurement Manager

Finance Director

Project Manager

HR Business Partner

Recruiting Manager

Contract Administrator

Risk Manager

Employee Relations Manager

Chief Financial Officer

Chief Operating Officer

General Counsel

Industries
Labor Code of the Philippines (Presidential Decree No. 442): Primary legislation governing employment relationships, working conditions, and labor standards in the Philippines. Particularly relevant for employment terms, wages, working hours, and employee benefits.
Department Order No. 174-17: Implements regulations on contracting and subcontracting arrangements, including employee leasing. Sets rules for legitimate contracting and prohibited labor-only contracting.
Republic Act No. 9481: Law strengthening the right to self-organization of workers and governing union activities, which may affect leased employees' rights.
Social Security Law (Republic Act No. 11199): Mandates social security coverage and benefits for employees, including requirements for both the lessor and lessee companies.
National Internal Revenue Code: Governs taxation aspects of employment and service contracts, including withholding tax obligations and VAT implications on service fees.
Data Privacy Act of 2012 (Republic Act No. 10173): Regulates the collection, processing, and transfer of personal information, relevant for handling employee data between lessor and lessee companies.
Civil Code of the Philippines (Republic Act No. 386): Provides general provisions on contracts and obligations, applicable to the formation and execution of the lease agreement.
DOLE Department Order No. 18-A: Provides guidelines for contracting and subcontracting arrangements, including registration requirements for contractors.
PhilHealth Law (Republic Act No. 11223): Mandates health insurance coverage for employees, requiring clear designation of responsibility between lessor and lessee.
Pag-IBIG Fund Law (Republic Act No. 9679): Requires Home Development Mutual Fund (Pag-IBIG Fund) coverage for employees, necessitating clear arrangements between parties.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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