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Co Employment Agreement Template for Philippines

A Co-Employment Agreement under Philippine law is a comprehensive legal document that establishes and governs the relationship between two employers who share employment responsibilities for one or more employees. This agreement addresses crucial aspects such as joint employer obligations, division of responsibilities, compensation structures, benefits administration, and compliance with Philippine labor laws, including the Labor Code and relevant Department Orders. The document ensures clear delineation of duties between employers while protecting employee rights and maintaining compliance with local employment regulations, social security requirements, and tax obligations.

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What is a Co Employment Agreement?

The Co-Employment Agreement is essential in situations where two companies share employment responsibilities for the same worker(s) in the Philippines. This arrangement is commonly used in joint ventures, professional services arrangements, or when companies need to share specialized talent. The agreement must comply with Philippine labor laws, particularly the Labor Code and Department Order No. 174-17 regarding contracting arrangements. It defines each employer's obligations regarding compensation, benefits, management oversight, and statutory compliance. The document typically includes detailed provisions for social security contributions, healthcare coverage, and tax responsibilities, ensuring that all parties understand their roles and obligations in the co-employment relationship.

What sections should be included in a Co Employment Agreement?

1. Parties: Identifies and provides details of all parties to the agreement: the Primary Employer, Secondary Employer, and the Employee(s)

2. Background: Explains the context and purpose of the co-employment arrangement and the business relationship between the employers

3. Definitions: Defines key terms used throughout the agreement including specific roles, responsibilities, and employment-related terminology

4. Term and Commencement: Specifies the duration of the co-employment arrangement and its start date

5. Employment Status and Relationship: Defines the nature of the co-employment relationship and the employee's status with each employer

6. Duties and Responsibilities: Outlines the specific responsibilities of each employer and the employee's duties

7. Compensation and Benefits: Details the salary, benefits, and which employer is responsible for providing each component

8. Working Hours and Location: Specifies work schedules, overtime policies, and primary work location(s)

9. Statutory Compliance: Addresses compliance with Philippine labor laws, including social security, healthcare, and other mandatory benefits

10. Performance Management: Establishes how employee performance will be monitored and evaluated by both employers

11. Confidentiality and Data Protection: Outlines confidentiality obligations and data protection requirements under Philippine law

12. Termination Provisions: Details the circumstances and procedures for terminating the co-employment arrangement

13. Dispute Resolution: Specifies procedures for resolving disputes between parties

14. Governing Law: Confirms that the agreement is governed by Philippine law

15. General Provisions: Includes standard clauses such as amendments, severability, and entire agreement provisions

What sections are optional to include in a Co Employment Agreement?

1. Intellectual Property Rights: Required when the employee's work involves creation of intellectual property, specifying ownership rights between employers

2. Non-Competition: Optional clause restricting employee's ability to work with competitors, if relevant to the business context

3. International Travel: Include when the role requires travel between countries, specifying which employer manages travel arrangements and expenses

4. Training and Development: Optional section detailing responsibility for employee training and professional development

5. Remote Work Provisions: Include when the role involves remote work arrangements

6. Commission Structure: Required for sales or commission-based roles, detailing how commissions are calculated and paid

7. Equipment and Resources: Include when specifying which employer provides work tools and resources

What schedules should be included in a Co Employment Agreement?

1. Schedule A - Job Description: Detailed description of the employee's role, responsibilities, and reporting relationships

2. Schedule B - Compensation and Benefits Structure: Detailed breakdown of salary, benefits, and allocation of costs between employers

3. Schedule C - Statutory Benefits Administration: Specific arrangements for managing SSS, PhilHealth, Pag-IBIG, and tax contributions

4. Schedule D - Performance Metrics: Detailed performance evaluation criteria and processes

5. Schedule E - Operational Procedures: Specific procedures for day-to-day management, time reporting, and approval processes

6. Appendix 1 - Employee Handbook References: References to relevant sections of each employer's employee handbook

7. Appendix 2 - Contact Information: Key contact persons and details for each employer for various employment matters

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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