Email as employment contract: Is it valid under PH Labor Law

1. Summary

  • Employment contracts are consensual in nature.
  • If all of the three essential requisites to a contract are present in an email, then an employment contract may be be formed.

2. Employment contracts are consensual under PH Labor Law

Unknown to many, PH Labor Law classifies employment contracts as consensual, as opposed to formal or written contract.

A contract is consensual when mere consent is required to create a contract. For instance, you enter into a sales contract everytime you buy food and drinks at a convenience store. However, you are never provided a written sales contract to complete the transaction (that’s what formal contract means – certain contracts are required to be in writing to be valid such as an sales contract over real property).

The legal basis for employment contracts is found in Article 97(f) of the Labor Code defining wage as any remuneration or earnings “under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered.” (Tip: Law students are taught and required to memorize this principle as this as it is a frequent bar exam question.)

The reason behind such a rule is for public policy considerations. Think about it, there are many micro and small business out there. Do you really think that a sales lady (tindera) in a small store or a stevedore (kargador) in a warehouse is given a written employment contract? It is very unlikely that they will be given written employment contracts.

Why then is that important? If the law required written employment contracts, then many employees would not be able to prove their employment for simple reason that their employers likely did not give them one. Note, for these humble folks (maliliit na tao), they will be happy just having a job and livelihood. They will not risk irritating or annoying their employers for a piece of paper.

While that may be the origin or background for the principle of employment contracts being consensual, it applies to the business and corporate world as well. That is why, employees who were not given written employment contracts by their employers are allowed to file a labor complaint, even if they were not given emplpoyment contracts. The employees are allowed to prove their employment via other relevant pieces of evidence, such as Company ID, pay slip, and Government-mandated contributions via SSS/PhiHealth/Pag-IBIG, among others.

3. Email as an employment contract

Under PH Contract Law, a contract to be valid must have all of the following three essential requisites: (a) consent, (b) object, and (c) consideration.

In the context of employment, consent may be express or implied. It is express when it is clearly shown, such as shaking to an agreement, signing on a contract, and to our point: saying “yes” or similar equivalent language in an email. It is implied if consent is given in not so clear way but one’s actions and behavior points to it, such as not having made any express consent, the employee appears for work on day one until pay day and receive the compensation. Obviously, the employee consented.

On the other hand, object a terms of employment, from job description, duties, responsibilities, work schedules, working conditions, and anything else related to the work.

The consideration refers to the compensation and benefits, including incentives, and related forms remuneration.

To our subject matter, if all of the above three requisites are present, an employment contract may be formed, even on an email.

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