On Hire Labour Agreement Template for Philippines

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On Hire Labour Agreement

"I need an On Hire Labour Agreement for deploying IT professionals to various client sites in Manila, Philippines, starting from January 2025, with specific provisions for intellectual property protection and client confidentiality requirements."

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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 | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Construction

Information Technology

Business Process Outsourcing

Healthcare

Retail

Hospitality

Logistics and Transportation

Agriculture

Mining

Engineering

Financial Services

Telecommunications

Education

Relevant Teams

Human Resources

Legal

Compliance

Operations

Risk Management

Talent Acquisition

Employee Relations

Contract Administration

Labor Relations

Business Operations

Relevant Roles

HR Manager

Legal Counsel

Compliance Officer

Recruitment Manager

Operations Manager

Contract Administrator

Labor Relations Officer

Human Resources Director

Employment Law Specialist

Talent Acquisition Manager

Workforce Planning Manager

Employee Relations Manager

Risk Management Officer

Business Unit Manager

Human Resources Business Partner

Industries
Labor Code of the Philippines (Presidential Decree No. 442): The primary legislation governing employment relationships, working conditions, and labor standards in the Philippines. It covers fundamental aspects like wages, working hours, leave benefits, and termination procedures.
DOLE Department Order No. 174-17: Regulations on contracting and subcontracting arrangements, defining legitimate contracting and prohibited labor-only contracting practices.
Republic Act No. 8282 (Social Security Law): Mandates Social Security System (SSS) coverage and contributions for employees, providing various benefits including sickness, maternity, disability, retirement, and death benefits.
Republic Act No. 7875 (National Health Insurance Act): Requires PhilHealth coverage for employees, ensuring access to health insurance benefits.
Republic Act No. 11223 (Universal Health Care Act): Expands healthcare coverage requirements and obligations for employers regarding employee health benefits.
Republic Act No. 11058 (Occupational Safety and Health Standards Law): Strengthens compliance with occupational safety and health standards and provides penalties for violations.
Republic Act No. 10173 (Data Privacy Act): Governs the collection, handling, and protection of employee personal information in employment contracts and records.
Republic Act No. 7610 (Special Protection Against Child Abuse): Provides regulations regarding minimum age requirements and protection of young workers.
Republic Act No. 6971 (Productivity Incentives Act): Provides guidelines for implementing productivity incentive programs and profit-sharing schemes.
Republic Act No. 9481 (Night Shift Differential Pay Law): Mandates additional compensation for employees working during night shifts.
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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