Contractual and Regular Employee Benefits in the Philippines – An Overview

"Knowing your benefits even as a contractual employee will lessen tension and build trust in the organization you belong in."

The Philippine Labor Code stipulates that an employee may be hired with a probationary period from one to six months upon date of engagement, and it shall not be continued further than that unless due to required period of apprenticeship. After the probationary period, an employer may continue or end an individual's employment based on pre-agreed Key Results Areas (KRA) or other forms of performance appraisals.

During the probationary period, however, an employer has no right to neither discriminate an employee nor waive his /her contractual employee benefits. And at the end of this period, hired individuals should receive regular employee benefits as provided by Philippine Laws on employment.

How do contractual and regular employee benefits compare?

Within the probationary period, a new-hire continues to undergo evaluation on a daily basis, although formal performance reviews may not come until the first, third, or sixth month. This evaluation period somewhat gives companies the right to waive benefits enjoyed by regular employees, including holiday pay and sick leaves. In most cases, sick leaves are converted as "absences" which in turn are limited to a few number of days only (typically only seven days within the six-month period).

Expectedly, contractual employee benefits do not level with regular employee benefits, and companies have some good excuse for this. First, contractual employees, being new to the job, do not perform as well as regular employees (although this is not always the case). They lack the experience which makes for their lower pay and fewer benefits than have regular employees.

Contractual or probationary employees are not deprived of a few benefits, though. When you are a contractual employee in the Philippines, you can enjoy a day off on holidays (depending on your company's operations) and will also be paid a holiday premium commensurate to your daily pay.

The differences between contractual employee benefits and regular employee benefits are in the paid vacation and sick leaves which total to 15 days per year. Many companies now also provide social security benefits to probationary employees from day one.

This chart below elucidates the differences in benefits between these two employment statuses:

Benefits	Contractual Employees	Regular Employees
Sick Leaves	none	yes
Vacation Leaves	none	yes
Social Security System (SSS) - private sector GSIS - public sector	company discretion	yes
Home Development Mutual Fund (HDMF)	none	yes
HMO	none	yes
Philippine Health Insurance Corp. (PhilHealth)	none	yes
Other company benefits (e.g. rice allowance, transportation allowance, etc.)	Typically none	yes

Many companies in the Philippines now provide company benefits to employees, including rice allowance, transportation allowance, boarding allowance, and so on. Knowing your benefits even as a contractual employee will lessen tension and build trust in the organization you belong in.

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