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Models
Trilateral employment
Trilateral employment is a three-party setup: foreign principal, local employer, and worker. The local company is the employer on paper. The foreign company directs output. The worker does the job.
Also called trilateral relationship
How it works
L&E Global describes this as the pattern foreign companies use when they engage a Philippine employer of record. The local employer must control means and methods enough to be an employer, not a mailbox. The principal controls results. If both sides control everything, a court can hold several affiliates jointly liable, which is the lesson practitioners take from American Power Conversion v. Lim. Draw the line in the service agreement and then live it. Who issues the contract. Who remits SSS. Who can send someone home. Who writes the Tuesday task list. If the answers are all ‘the U.S. manager’ and the local firm only prints an invoice, the triangle has collapsed into a two-party employment you did not document.
Example: EOR employs the worker, remits ₱3,500 employer SSS on a capped MSC, and invoices you. You assign the inbox. A dispute later asks who could fire her. If only you could, the triangle was a drawing.
How it differs
Labor-only contracting is a failed triangle. Direct hire is two parties. Dual employment is two real employers at once, which is a different mess.
Common errors
Writing the triangle and operating a straight line. Adding a fourth affiliate ‘for billing’ so nobody can say who paid wages.
In practice
Treat Trilateral employment as a week-one operating object. Name the employer on the contract and the manager in Slack. If those two names cannot both be true at once, the model is theater. Write an owner - founder, local employer, or worker - and a date you will look at it again: first cutoff, first holiday, or first miss. If nobody can show a contract clause, a payslip line, a calendar block, or a checklist box, you do not have trilateral employment yet. You have a conversation. Convert the conversation before the person starts, while changing the deal still costs a paragraph rather than a resignation. Re-read the worked example above against the actual hire in front of you. If the numbers in that example cannot be swapped for this seat’s pesos, hours, and start date, the brief is still unfinished.