I. STATUTORY BASIS/OVERVIEW OF CLASSIFICATION
A. Coverage
B. Regular Employment C. Casual Employment D. Probationary Employment E. Project Employment F. Seasonal Employment
G. Recognition and Determination II. REGULAR EMPLOYEES
III. PROJECT EMPLOYEES IV. CASUAL EMPLOYEES
V. CONTRACTS FOR FIXED PERIODS VI. SEASONAL
VII. PROBATIONARY EMPLOYEES
I. STATUTORY BASIS/ OVERVIEW OF CLASSIFICATION
SEE: ART. 278, 280, 281, LABOR CODE Omnibus Rules Book VI, Rule 1, Sec. 5 and cases below for full details
A. COVERAGE (ART. 279) –
applies to all establishments or undertakings, whether for profit or not.
B. REGULAR EMPLOYMENT (ART. 280) 1. Employee engaged to perform
activities which are usually necessary or desirable to the usual trade or business of the employer.
2. Written agreement to the contrary notwithstanding, regardless of oral agreement of parties provided by law.
3. Other Regular Employees
a. Casual Employees (Art. 280): after one year of service, whether continuous or broken, with respect to activity in which he is employed b. Probationary Employees (Art. 281):
allowed to work even after the completion of the probationary period c. Learner (Art. 75 D): allowed or
suffered to work during the first two months of learner period, if training is terminated by the employer before the end of the stipulated period.
4. Not Included (Art 280, par. 1):
a. Project Employees b. Seasonal Employees
5. Regular employment not synonymous with permanent employment, since there is no such thing as permanent employment.
Any employee may be terminated for cause.
C. CASUAL EMPLOYMENT (ART. 280) 1. When not regular, project or seasonal 2. Requirements to become Regular
employees:
one (1) year service, continuous or broken
a. with respect to activity employed b. employment shall continue while
such activity exists
D. PROBATIONARY EMPLOYMENT (ART. 281)
1. Not to exceed six (6) months from the date the employee started working, unless covered by an apprenticeship agreement stipulating a longer period.
2. Termination only for:
a. just causes, or
b. failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement.
3. Purposes
a. Observance Period – for employer to determine if employee is qualified and for employee to demonstrate to the ER his skills.
b. Restrictive- As long as the termination was made before the expiration of the six-month probationary period, the employer has a right to sever the employer-employee relationship
4. Parties may agree to a longer period of probation if (a) company policy or (b) the nature of the work require.
5. Direct Rationale Connection: if unduly long, may be unfair to the worker
6. Nothing prohibits the ER from abbreviating or shortening the period.
7. If extension is agreed upon for the benefit of the worker this is ex gratia.
8. ER has no obligation to pay for the Unfinished portion.
E. PROJECT EMPLOYMENT (ART. 280) 1. Employment fixed on a specific
project or undertaking, completion or termination of which is determined at the time of engagement of the employee.
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2. Must have been forewarned of the nature/scope and duration of the project.
3. Whether or not the project has a direct relation to the business of the ER is not important, BUT
a. EE must be informed of the nature and duration of project
b. project and principal business of ER are two separate things
c. no attempt to deny security of tenure to the worker
F. SEASONAL EMPLOYMENT
1. Work or services to be performed are seasonal in nature, employment is for the duration of the season.
2. No continuing need for the worker.
II. REGULAR EMPLOYEES A. DEFINITION –
Pangilinan vs. Gen. Milling Corp. (2004):
A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. There are two separate instances whereby it can be determined that an employment is regular:
1. if the particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer;
and,
2. if the employee has been performing the job for at least a year.
B. STANDARD OF DETERMINATION –
Lopez vs. MWSS (2005): The primary standard in determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. The repeated and continuing need for the performance of the job has been deemed sufficient evidence of the necessity, if not indispensability of the activity to the business. In the case at bar, continuous
and repeated rehiring, some for nearly two decades, of these bill collectors indicate the necessity and desirability of their services, as well as the importance of the role of bill collectors in the MWSS.
C. HIRING FOR AN EXTENDED PERIOD –
Audion Electric Co., Inc. vs. NLRC (1999):
Where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and considered regular employees.
D. REPEATE
d
RENEWAL OF CONTRACT – Beta Electric Corp. vs. NLRC (1990): The petitioner cannot rightfully say that since the private respondent's employment hinged from contract to contract, it was "temporary", depending on the term of each agreement. Under the Labor Code, an employment may only be said to be "temporary" "where:
1. [it] has been fixed for a specific undertaking, the completion of or termination of which has been determined at the time of the engagement of the employee or
2. where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.
Quite to the contrary, the private respondent's work, that of "typist-clerk"
is far from being "specific" or "seasonal", but rather, one "where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business." And under the Code, where one performs such activities, he is a regular employee, "[t]he provisions of written agreement to the contrary notwithstanding …”
It is true that in Biboso vs Victorias Milling Company, Inc. we recognized the validity of contractual stipulations as to the duration of employment. But we cannot apply it here because clearly, the contract-to-contract arrangement given to the private respondent was but an artifice to prevent her from acquiring security of tenure and to frustrate constitutional decrees.
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E. LENGTH OF TIME INVOLVED –
Maraguinot vs. NLRC (1998): Length of time not controlling, merely serves as a badge of regular employment.
III. PROJECT EMPLOYEES
A. TEST OF PROJECT EMPLOYMENT –
PNOC Energy Dev’t Corp vs. NLRC (2007): The principal test for determining whether employees are properly characterized as "project employees," as distinguished from
"regular employees," is whether or not the project employees were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. As defined, project employees are those workers hired:
(1) for a specific project or undertaking, and
(2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee.
B. RATIONALE –
De Ocampo vs. NLRC (1990): If a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun, if at all. In effect, these stand-by workers would be enjoying the status of privileged retainers, collecting payment for work not done, to be disbursed by the employer from profits not earned.
C. EXAMPLES OF PROJECT
EMPLOYMENT –
Phil. Jai-Alai and Amusement Corp. vs.
Clave (1983): Private respondents, as well as the other 30 workers, were needed as additional hands for the renovation work and not for ordinary upkeep and maintenance. The erection of the fire escape and other small jobs after the renovation cannot be deemed maintenance but more of casual work.
Sandoval Shipyards, Inc. vs. NLRC (1985): The corporation does not construct vessels for sale or otherwise which will demand continuous production of ships and will need regular workers. It merely accepts contracts for ship-building or for repair
of vessels from third parties. It is only on occasion when it has work contract of this nature that it hires workers to do the job which, needless to say, lasts only for less than a year or longer.
Completion of their work or project automatically terminates their employment.
Imbuido vs. NLRC (2000): Petitioner was engaged to perform data encoding and keypunching, and her employment was fixed for a specific project or undertaking the completion or termination of which had been determined at the time of her engagement. [This] may be observed from the series of employment contracts between petitioner and private respondent, all of which contained a designation of the specific job contract and a specific period of employment.
D. EMPLOYER OBLIGATION TO MAKE STANDARDS KNOWN –
A. M. Oreta and Co., Inc. vs. NLRC (1989): The law is clear that in all cases involving employees engaged on probationary' basis, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify as a regular employee.
Nowhere in the employment contract executed between petitioner and respondent Grulla is there a stipulation that the latter shall undergo a probationary period for three months before he can quality as a regular employee.
There is also no evidence on record showing that the respondent Grulla had been apprised of his probationary status and the requirements which he should comply in order to be a regular employee. In the absence of these requisites, there is justification in concluding that respondent Grulla was a regular employee at the time he was dismissed by petitioner, and as such cannot be done without just and authorized cause.
E. SPECIFIED PERIOD –
Purefoods Corp. vs. NLRC (1987): The Court has upheld the legality of fixed-term employment. It ruled that the decisive determinant in term employment should not be the activities that the employee is called upon to perform but the day certain agreed upon by the parties for the
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commencement and termination of their employment relationship. But, this Court went on to say that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy and morals.
F. CONTINUOUS RE-HIRING –
Chua vs. Court of Appeals (2004):
Despite the insistence of petitioner that they were project employees, the facts show that as masons, carpenters and fine graders in petitioner’s various construction projects, they performed work which was usually necessary and desirable to petitioner’s business which involves construction of roads and bridges. It is not enough that an employee is hired for a specific project or phase of work. There must also be a determination of, or a clear agreement on, the completion or termination of the project at the time the employee was engaged. This second requirement was not met in this case.
C.E. Construction Corp vs. Cioco (2004):
The fact that the workers have been employed with the company for several years on various projects, the longest being nine (9) years, did not automatically make them regular employees considering that the definition of regular employment in Article 280 of the Labor Code, makes specific exception with respect to project employment. The re-hiring of petitioners on a project-to-project basis did not confer upon them regular employment status. The practice was dictated by the practical consideration that experienced construction workers are more preferred. It did not change their status as project employees.
G. POLICY NO. 2 OF 1997 AND D.O. 19 OF 1993 –
Samson vs. NLRC (1996):
When the present action for regularization was filed on November 5, 1989 and during the entire period of petitioner's employment with private respondent prior to said date, the rule in force then was Policy Instruction No. 20,
which required the employer company to report to the nearest Public Employment Office the fact of termination of a project employee as a result of the completion of the project or any phase in which he is employed.
Furthermore, Department Order No.
19, which was issued on April 1, 1993, did not totally dispense with the notice requirement. Instead, it made provisions and considered it (i.e. the notice) as one of the
"indicators" that a worker is a project employee.
H. WORKPOOL
EMPLOYEE- Maraguinot vs. NLRC (1998): A project EE or a member of a work pool may acquire the status of a regular employee when the following concur:
1. There is a continuous rehiring of project employees even after cessation of a project; and
2. the tasks performed by the alleged “project employee” are vital, necessary, and indispensable to the usual business or trade of the employer. However, the length of time during which the EE was continuously rehired is not controlling, but merely serves as a badge of regular employment.
A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided, that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned.
Aguilar Corp. vs. NLRC (1997): Members of a work pool from which a construction company draws its project employees, if considered employees of the construction company while in the work pool, are non-project employees, or employees for an indefinite period. If they are employed in a particular project, the completion of the project or any phase thereof will not mean severance of the employer-employee relationship.
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IV. CASUAL EMPLOYEES A. NATURE OF WORK –
A. M. Oreta and Co., Inc. vs. NLRC (1989): What determines regularity or casualness is not the employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desirable to the main business of the employer, then employment is regular.
B. ONE YEAR SERVICE –
Tabas vs. California Marketing Co., Inc.
(1989):
The fact that the petitioners have been hired on a "temporary or seasonal" basis merely is no
argument either.
As held in Philippine Bank of Communications v. NLRC, a temporary or casual employee, under Article 281 of the Labor Code, becomes regular after service of one year, unless he has been contracted for a specific project.
And we cannot say that
merchandising is a specific project for the obvious reason that it is an activity related to the day-to-day operations of California.
The records show that the petitioners had been given an initial six month contract, renewed for another six months. Accordingly, under Article 281 of the Code, they had become regular employees — of California — and had acquired a secure tenure. Hence, they cannot be separated without due process of law.
V. CONTRACT FOR A FIXED PERIOD
St. Theresa’s School vs. NLRC (1998):
Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent.
It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer,
the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employee's duties.
It goes without saying that contracts or employment govern the relationship of the parties. In this case, private respondent's contract provided for a fixed term of nine (9) months, from June 1, 1991 to March 31, 1992. Such stipulation, not being contrary to law, morals, good customs, public order and public policy, is valid, binding and must be respected.
Servidad vs. NLRC (1999):However, the Court upholds the principle that where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be disregarded for being contrary to public policy.
VI. SEASONAL EMPLOYEES
Hacienda Bino vs. Cuenca (2005):
For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have been employed only for the duration of one season. While the records sufficiently show that the respondents’ work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration of one season only. In fact, the payrolls, submitted in evidence by the petitioners, show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand.
The disparity in facts between the Mercado Sr., vs. NLRC case case and the instant case is best exemplified by the fact that the farm laborers, work only for a definite period for a farm worker, after which they offer their services to other farm owners.
In Mercado, although respondent constantly availed herself of the
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petitioners’ services from year to year, it was clear from the facts therein that they were not in her regular employ. In other words, they worked for respondent, but were nevertheless free to contract their services with other farm owners.
VII. PROBATIONARY EMPLOYEES A. DEFINITION –
International Catholic Migration Comm.
vs. NLRC (1989): A probationary employee is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment.
B. PURPOSE/EMPLOYER RIGHT –
Grand Motors Corp. vs. MOLE (1984):
Managing petitioner's Iloilo Branch was an entirely new experience for private respondent. It was, therefore, necessary for private respondent to undergo a period of probation to test his qualifications, skill and experience.
Indeed, the employer has the right or is at liberty to choose as to who will be hired and who will be declined. It is within the exercise of this right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. The right of a laborer to sell his labor to such persons as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses.
The employer and the employee have thus an equality of right guaranteed by the Constitution.
C. DURATION AND EXCEPTION –
Alcira vs. NLRC (2004): Petitioner claims that under the terms of his contract, his probationary employment
Alcira vs. NLRC (2004): Petitioner claims that under the terms of his contract, his probationary employment