The unique nature of Philippine employment contracts

AMICUS CURIAE MARTIN LUIGI G. SAMSON

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Philippine employment contracts cannot be treated in the same manner as other civil or commercial contracts. To do so may expose one to massive and unexpected liability down the line.

Employment contracts are not only governed by the ordinary rule of negotiation and autonomy, but they are a legal hybrid, a volatile instrument where the State may choose to intervene. This results in an asymmetrical playing field which is constantly tilted in the worker’s favor due to the constitutional mandate of “protection to labor.”

Thus, an employer must understand the volatility of an employment contract, especially the various phases: from perfection, through its active term, and even the enforcement of certain clauses even after the employment has been severed.

For ordinary civil contracts, if a party backs out before the delivery of a service, the remedy may be a case for breach of contract before the regular courts. However, this is not the case for employment contracts in the Philippines.

The Supreme Court's landmark ruling in Aragones v. Alltech Biotechnology Corp. (G.R. No. 251736, April 2, 2025) held that an employer-employee relationship exists the moment the candidate accepts and signs the job offer. The relationship is legally established immediately upon mutual consent, and the agreed-upon start date is merely a suspensive period.