On Hire Labour Agreement Template for Philippines

A comprehensive employment agreement governed by Philippine law that establishes and regulates a three-way relationship between a labor hire company (the primary employer), a worker, and a client company where the work is performed. The agreement ensures compliance with the Labor Code of the Philippines and relevant DOLE regulations, particularly Department Order No. 174-17 regarding legitimate contracting arrangements. It covers essential employment terms including compensation, benefits, working conditions, and responsibilities of all parties while protecting workers' rights under Philippine labor laws.

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What is a On Hire Labour Agreement?

The On Hire Labour Agreement is essential for businesses operating in the Philippines that engage in legitimate labor contracting arrangements. This document is specifically designed to comply with Philippine labor laws, including the Labor Code and DOLE Department Order No. 174-17, which regulates contracting arrangements. It's used when a labor hire company (service provider) wishes to employ workers who will be assigned to work at client companies' premises or operations. The agreement details the rights, obligations, and responsibilities of all parties involved, ensuring clear delineation of employer obligations, workplace safety requirements, and employee benefits. This type of agreement is particularly important given the strict regulations around labor-only contracting in the Philippines and the need to demonstrate legitimate contracting arrangements.

What sections should be included in a On Hire Labour Agreement?

1. Parties: Identifies the contracting parties: the labor hire company (the Employer), the Worker, and the Client Company

2. Background: Explains the context of the agreement, including the nature of the labor hire arrangement and the parties' intentions

3. Definitions: Defines key terms used throughout the agreement, including specific industry terminology and legal concepts

4. Term of Employment: Specifies the duration of employment, including start date, end date (if fixed-term), and any probationary period

5. Nature of Employment: Details the employment relationship, job classification, and compliance with DOLE regulations on legitimate contracting

6. Duties and Responsibilities: Outlines the worker's specific roles, reporting relationships, and performance expectations

7. Work Location and Assignment: Specifies the primary work location and terms for potential reassignment to different client sites

8. Compensation and Benefits: Details salary, overtime rates, mandatory benefits, and payment terms in compliance with Philippine labor laws

9. Working Hours and Schedule: Specifies regular working hours, rest periods, and overtime arrangements

10. Leave Entitlements: Lists all statutory and additional leave benefits including vacation, sick leave, and public holidays

11. Health and Safety: Outlines occupational safety measures and compliance with RA 11058

12. Confidentiality and Data Protection: Addresses confidentiality obligations and data privacy compliance

13. Termination: Details grounds and procedures for contract termination, notice periods, and final settlements

14. Governing Law: Confirms Philippine law as governing law and specifies dispute resolution procedures

What sections are optional to include in a On Hire Labour Agreement?

1. Non-Competition: Include when there's a need to restrict the worker from working with competitors during or after employment

2. Intellectual Property Rights: Include when work involves creation of intellectual property or use of proprietary information

3. Performance Reviews: Include when implementing specific performance evaluation systems

4. Training and Development: Include when specific training requirements or professional development programs are provided

5. Mobility Clause: Include when there's a possibility of geographic relocation or multiple client sites

6. Commission Structure: Include for sales or performance-based roles with variable compensation

7. Client Company Policies: Include when worker needs to comply with specific client company policies

8. Return of Company Property: Include when worker will be provided with significant company equipment or materials

What schedules should be included in a On Hire Labour Agreement?

1. Schedule A - Job Description: Detailed description of role, responsibilities, and performance expectations

2. Schedule B - Compensation and Benefits Structure: Detailed breakdown of salary components, benefits, and calculation methods

3. Schedule C - Client Company Details: Information about the client company, work location, and specific site requirements

4. Schedule D - Company Policies: Key policies and procedures applicable to the worker

5. Appendix 1 - Statutory Benefits Summary: Summary of all mandatory benefits under Philippine law

6. Appendix 2 - Health and Safety Guidelines: Specific safety procedures and requirements for the role

7. Appendix 3 - Confidentiality Agreement: Detailed confidentiality terms and non-disclosure requirements

8. Appendix 4 - Employee Code of Conduct: Standards of behavior and professional conduct expected from the worker

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

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Employment Contract

Cost

Free to use

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