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An End Of Contract Letter To Employee is a formal document you must issue when your employee's fixed-term contract reaches its scheduled completion date. Under Philippine employment law, this letter serves as official notification that the employment relationship will conclude due to contract expiration, not termination for cause. You're legally required to provide this documentation to ensure compliance with the Labor Code of the Philippines and protect your business from potential disputes.

When do you need this document?

You need this letter whenever a fixed-term employment contract is approaching its end date. This applies to project-based employees whose contracts specify completion upon project finish, seasonal workers hired for specific periods, contractual staff with predetermined end dates, and any employee whose original contract included a specific termination date. The letter must be issued with sufficient advance notice, typically at least 30 days before the contract's end date, allowing proper transition and completion of clearance procedures. Industries commonly using this document include construction, manufacturing with seasonal peaks, retail during holiday periods, and any business employing temporary or project-specific staff.

Key legal considerations

Your End Of Contract Letter must clearly distinguish between contract completion and termination for cause to avoid legal complications. The letter should explicitly reference the original fixed-term contract and its specified end date, confirm that termination is due to contract expiration rather than employee performance issues, and outline the employee's entitlements including final pay, pro-rated 13th month pay, unused leave credits, and any applicable separation benefits. You must also detail the clearance process, specify return of company property, provide information about government benefit transfers including SSS, PhilHealth, and Pag-IBIG, and ensure the employee receives all required certifications for future employment. Failure to properly document contract completion can result in claims for illegal dismissal or demands for additional compensation.

Legal requirements in Philippines

Under the Labor Code of the Philippines (Presidential Decree No. 442), you must comply with specific procedural requirements when ending fixed-term contracts. DOLE Department Order No. 147-15 mandates proper documentation and payment of final wages within prescribed timeframes. Your letter must include complete company information, employee's full details, clear contract end date confirmation, and comprehensive final pay computation. You're required to facilitate the transfer of government benefits under Republic Act No. 7875 (PhilHealth coverage) and Republic Act No. 8282 (SSS obligations), ensure tax clearance compliance under the National Internal Revenue Code, and provide certificates of employment and service records. The employee must also complete clearance procedures with various departments, return all company property, and settle any outstanding obligations. Local government requirements under Republic Act No. 7160 may also apply depending on your business location and the employee's residence.