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Thursday, July 30, 2020

Superior Maintenance vs. Bermeo

G.R. No. 203185, 5 December 2018

Facts of the case:
Superior Maintenance is a manpower agency engaged in the business of supplying janitorial services to its clients. In 1991, it hired Bermeo as a janitor for its clients. Through the years, Bermeo was assigned to several establishments. He was last stationed at Trinoma Mall until the end of contract on March 30, 2008. On August 28, 2008, Bermeo was deployed to French Baker at SM Marikina, one of Superior Maintenance's clients; however, French Baker asked for a replacement upon learning that Bermeo was already 54 years old. On September 5, 2008, Bermeo filed a Complaint before the Labor Arbiter (LA) against the petitioners for constructive dismissal with claim for separation pay.
The LA found that Bermeo was constructively dismissed because no work was offered to him even during the pendency of the proceedings before it, such that the period of his floating status had already expired.
On appeal, the NLRC reversed the findings of the LA and ruled that Bermeo was not constructively dismissed from work. The NLRC concluded that the complaint was prematurely filed, as Bermeo's floating status was short of the six months required for it to ripen to constructive dismissal.
The CA, however, granted the petition of the complainant on the conclusion that Article 301 applies only when there is a bona fide suspension of the employer's operation of business. Citing Veterans Security Agency, Inc., et al., v. Gonzalvo, Jr., the CA ruled that since there was no suspension in the petitioners' business operations, Article 301 does not apply to them (petitioner) and they cannot seek refuge in the six-month grace period given thereunder for them to give Bermeo a new assignment.

Issue:
Whether Bermeo was constructively dismissed from work

Ruling of the Court:
Bermeo was not constructively dismissed.
Citing Salvaloza v. NLRC, the Court defined temporary off-detail or floating status as that "period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one." The Court further explained: It takes place when the security agency's clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it for want of cause, such that the replaced security guard may even be placed on temporary "off-detail" if there are no available posts under the agency's existing contracts.
There is no specific provision in the Labor Code which governs the "floating status" or temporary "off-detail" of workers employed by agencies. Thus, this situation was considered by the Court in several cases as a form of temporary retrenchment or lay-off, applying by analogy the rules under Article 301 (then Article 286) of the Labor Code, viz:
ART. 301. [286] When Employment not Deemed Terminated. The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.
This situation applies not only in security services but also in other industries, as in the present case, as long as services for a specific job are legitimately farmed out by a client to an independent contractor.
In all cases however, the temporary lay-off wherein the employees cease to work should not exceed six months, in consonance with Article 301 of the Labor Code. After six months, the employees should either be recalled to work or permanently retrenched following the requirements of the law. Otherwise, the employees are considered as constructively dismissed from work and the agency can be held liable for such dismissal.
Article 301 of the Labor Code was applied only by analogy to prevent the floating status of employees hired by agencies from becoming indefinite. This temporary off-detail of employees is not a result of suspension of business operations but is merely a consequence of lack of available posts with the agency's subsisting clients.
When Bermeo filed his complaint for constructive dismissal on September 5, 2008, it was only a week after his unsuccessful assignment in French Baker on August 28, 2008. Even if the reckoning date would be his last assignment at Trinoma Mall, which ended on March 30, 2008, it is still less than the six-month period allowed by Article 301 for employees to be placed on floating status. Thus, the filing of his complaint for constructive dismissal is premature.

Good notes on this case

- The temporary lay-off wherein the employees cease to work should not exceed six months. After six months, the employees should either be recalled to work or permanently retrenched following the requirements of the law. Otherwise, the employees are considered as constructively dismissed from work. Hence the filing of constructive dismissal of employees placed on floating status within the 6-month period is premature.

- There is no specific provision in the Labor Code which governs the "floating status" or temporary "off-detail" of workers employed by agencies. Thus, this situation was considered by the Court in several cases as a form of temporary retrenchment or lay-off, applying by analogy the rules under Article 301 (then Article 286) of the Labor Code. This situation applies not only in security services but also in other industries, as long as services for a specific job are legitimately farmed out by a client to an independent contractor.

- This temporary off-detail of employees of the agencies is not a result of suspension of business operations but is merely a consequence of lack of available posts with the agency's subsisting clients.

Tuesday, July 28, 2020

Labor Law, Social Legislation, Purpose of Labor Legislation

Labor law

Labor law is the body of rules and principles which governs the relation between labor and management in the collective. This term may also refer to:

a. Labor standards laws - prescribe the terms and conditions of employment as affecting wages or monetary benefits, hours of work, cost of living allowances, and occupational health, safety and welfare of the workers.
b. Labor relations laws – denote all matters arising out of employer-employee relationship involving the concerted action on the part of the workers which is usually related with right to self-organization, collective bargaining and negotiations processes.

In the Philippines, Presidential Decree No. 442, the Labor Code of the Philippines stands as the law governing employment practices and labor relations. It was enacted on May 1, 1974 and took effect on November 1, 1974. It prescribes the rules for hiring and termination of private employees; the conditions of work including maximum work hours and overtime; employee benefits such as holiday pay, 13th month pay and retirement pay; and the guidelines in the organization and membership in labor unions as well as in collective bargaining. The Labor Code contains several provisions which are beneficial to labor. It prohibits termination from employment of Private employees except for a just or authorize causes. The right to trade union is expressly recognized, as is the right of a union to insist on a closed shop. Strikes are also authorized for as long as they comply with the strict requirements under the Code, and workers who organize or participate in illegal strikes may be subject to dismissal. Moreover, Philippine jurisprudence has long applied a rule that any doubts in the interpretation of law, especially the Labor Code, will be resolved in favor of labor and against management.

Social Legislation

According to the Dictionary of Sociology by Fairchild “Social legislation means laws designed to improve and protect the economic and social position of those groups in society which because of age, sex, race, physical or mental defect or lack of economic power cannot achieve health and decent living standards for themselves”.
In relation to labor, it is a law governing the employer-employee relationship while the latter is not “at work” due to hazards arising from employment. It is designed to uplift and protect the welfare of the worker and his family because of the hazards beyond his control which immobilize him from working. (Poquiz, Labor Standards Law, 2)
Some examples of social legislation laws enacted in the Philippines are Social Security Act of 1997 (R.A. 8282) and Retirement Law (R.A. 7641).

Differences of Labor Law and Social Legislation

Labor Law
Social Legislation
Direct in its application as it affects directly actual employment such as wages.
Governs the effect of employment such as compensation for injuries and death.
Design to meet the daily needs of a worker.
Design to meet long-range benefits.
Covers employment for profit or gain.
Covers employment for gain or non-profit.
Affects the work of the employee.
Affects the life of the employee.
Benefits are paid by the employer.
Benefits are paid by government agencies administering the program.

Purpose of Labor Legislation

The purpose of labor legislation is to protect the worker from its employer and to correct the injustices that are inherent in employer-employee relationship. It provides the set of restrictions upon the worker in his relationship with the employer and vice-versa in order to maintain industrial peace and harmony; thereby promoting industrial peace. Lastly, to promote the welfare of the people based on the Latin maxim “salus populi est suprema lex”, which means the welfare of the people is the first law.

Monday, July 27, 2020

Just Causes for Termination of Employment by Employer

It is the prerogative of the management to employ the services of a person. Similarly, it has the prerogative to dismiss or layoff an employee. The exercise of that prerogative must however be made without abuse of discretion, for what is at stake is not only the employee’s position but also his means of livelihood.
Article 297 of the Labor Code of the Philippines provides the just causes where an employer can terminate the employment of an employee. Thus:
Art. 297 (282). Termination by Employer. An employer may terminate an employment for any of the following causes:
a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.
The above causes are directly attributable to the fault or negligence of the employee. Hence, he is not entitled to separation pay. However, it will not prejudice his rights, benefits and privileges he may have under applicable individual or collective bargaining agreement or voluntary employer policy or practice (Sec. 7, Rule I, Book VI, Rules and Regulations Implementing the Labor Code).
Other causes of termination include the following:
1. Abandonment of work in relevance to Article 297 paragraph (b)
2. Union security clause in relevance to Article 259 paragraph (e)
3. Totality of infractions doctrine

a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work

Serious misconduct, defined
Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgement.
The misconduct to be serious must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless, be in connection with the employee’s work to constitute just cause for his separation. Minor misconduct cannot justify dismissal (RCPI vs. NLRC, G.R. No. 113178, Jul. 5, 1996 and Villaflores vs. NLRC, G.R. No. 114777, Jul. 5, 1996) under the principle of commensurate penalty.
The charge of serious misconduct must not be a mere afterthought (Coca-Cola Export Corp. vs. Gacayan, G.R. No. 149433, Dec. 15, 2010).

Elements of serious misconduct
For serious conduct to be a valid ground for termination, the following must be present:
1. There must be misconduct;
2. The misconduct must be of such grave and aggravated character;
3. It must relate to the performance of the employee’s duties; and
4. There must be showing that the employee becomes unfit to continue working for the employer.

Some principles on serious misconduct committed by employee
Destroying the properties of the company, assaulting the company’s House Officer while under the influence of liquor, within the company premises during working hours, constitutes just cause for the dismissal of the pin boy on the ground of serious misconduct (Club Filipino, Inc. vs. Sebastian, G.R. No. 85490, Jul. 23, 1992).
Touching a female subordinate’s hand and shoulder, caressing her nape constitute sexual harassment which is serious misconduct for she was placed in a hostile, intimidating or offensive environment (Libres vs NLRC, G.R. No. 123737, May 28, 1999). Sexual intercourse inside company premises constitutes serious misconduct (Standford Microsystems, Inc. vs NLRC, G.R. No. L-74187, Jan. 28, 1988).
Dismissal from the service on account of series of irregularities perpetrated when put together constitutes serious misconduct which is a just cause for dismissal (Gustilo vs. Wyeth Phils., Inc., G.R. No. 149629, Oct. 4, 2004).
Committing libel against an immediate superior constitute serious misconduct (Torreda vs. Toshiba Information Equipment, Inc., G.R. No. 165960, Feb. 8, 2007). Challenging superiors to a fight (Luzon Stevedoring Corporation vs. CIR, G.R. No. L-18683, Dec. 31, 1965) and assaulting another employee Haverton Shipping Ltd. vs. NLRC, G.R. No. 65442, Apr. 15, 1985) are a just cause for termination.
Fighting is a ground for termination but only the instigator or aggressor and not the victim who was constrained to defend himself should be dismissed (Garcia vs. NLRC, G.R. No. 116568, Sep. 3, 1999). Utterance of obscene, insulting or offensive words constitutes serious misconduct (Echeverria vs. Venutek Medika, Inc., G.R. No. 169231, Feb. 15, 2007). Possession or used of shabu or other drugs is a valid ground to terminate employment (Roquero vs. PAL, G.R. No. 152329, Apr. 22, 2003).

Willful disobedience to the lawful orders of the employer or representative in connection with his work or insubordination
Lawful orders of the employers are usually expressed by way of company rules and regulations. In order that the willful disobedience by the employee may constitute a just cause for terminating his employment, the orders, regulations, or instructions of the employer or representative must be a) reasonable and lawful; b) sufficiently known to the employee; and c) in connection with the duties which the employee has engaged to discharged.
Where an order or rule is not reasonable, in view of the terms of the contract of employment and the general rights of the parties, a refusal to obey does not constitute a just cause for the employee’s discharge. As to what is a reasonable rule or order will depend on the circumstances of each case. Reasonableness, however, has reference not only to the kind and character of directions and commands, but also the manner in which they are made. The employee’s disobedience, in order to justify his dismissal under this provision, must relate to substantial matters, not merely to trivial or unimportant matters. Furthermore, disobedience to be considered willful must be resorted to without regard to its consequences (BLTB Co. vs CA, 71 SCRA 470; Family Planning Org. of the Phil. vs. NLRC, G.R. No. 79907, Mar. 23, 1992).

Insubordination, defined
Insubordination refers to the refusal to obey some order, which a superior is entitled to give and have obeyed. It is a willful or intentional disregard of the lawful and reasonable instructions of the employer (Civil Service Commission vs. Arandia, GR. No. 199549, April 7, 2014).

Elements of willful disobedience or insubordination
To be a valid ground for termination, the following must be present :
1. There must be disobedience or insubordination;
2. The disobedience or insubordination must be willful or intentional characterized by a wrongful and perverse attitude;
3. The order violated must be reasonable, lawful, and made known to the employee; and
4. The order must pertain to the duties which he has been engaged to discharge.

Some principles on willful disobedience or insubordination
Employee’s refusal to carry on legitimate orders which would prejudice reputation and goodwill of the company constitutes a conspiracy against its existence and is a just cause for dismissal. One of the fundamental duties of an employee is to yield to all reasonable rules, orders, and instructions of the employer. Any willful and intentional disobedience thereof justifies rescission of the contract of service and the peremptory dismissal of the employee (BLTB Co. vs. CA, 71 SCRA 470).
Failure to answer memo to explain constitutes will disobedience (Ace Promotion and Marketing Corp. vs. Ursabia, G.R. No. 171703, Sep. 22, 2006) but another notice is required in case of termination on the ground of failure to answer memo to explain.
Refusal to undergo random drug testing constitutes insubordination. Refusal to render overtime to meet production deadline constitutes insubordination (R.B. Michael Press vs. Galit, G.R. No. 153510, Feb. 13, 2008).
Refusal to comply with a lawful transfer constitutes insubordination (San Miguel Corp. vs. Pontillas, G.R No. 155178, May 7, 2008). While it may be true that the right to transfer or reassign an employee is an employer’s exclusive right and prerogative of management, such is not absolute. The right of an employer to freely select or discharge his employees is limited by the paramount police power (PAL, Inc. vs. PAL Employees Association, G.R. No. L-24626, Jun. 28, 1974), for the relations between capital and labor are not merely contractual but impressed with public interest (Art. 1700, New Civil Code). And neither capital nor labor shall act oppressively against each other (Art. 1701, New Civil Code; Dosch vs. NLRC, G.R. No. L-51182, Jul. 5, 1983). An employee’s refusal was not contumacious. It was justified on personal and family reasons. Strong family ties is a peculiar trait of the Filipinos. Indisputably, because of this character trait, Filipinos find it difficult to be separated from their loved ones. For this, the employee should not be faulted.
Insubordination or acts of disobedience when simple and not serious or gross do not constitute a just cause for dismissal. Refusal to obey an order is not insubordination when it is sufficiently explained (Union of Supervisors vs. Sec. of Labor, 109 SCRA 130).

b. Gross and habitual neglect by the employee of his duties

Gross neglect, defined
Gross neglect refers to the absence of that diligence that an ordinary prudent man would use in his/her own affairs (Reyes v. Maxim’s Tea House, GR. No. 140853, February 27, 2003).

Habitual neglect, defined
Habitual Neglect refers to repeated failure to perform one’s duties over a period of time, depending upon the circumstances (JGB and Associates, Inc. vs. NLRC, G.R. No. 109390, Mar. 7, 1996).

Neglect of duties must not only be gross but must also be habitual
Gross neglect means an absence of that diligence that an ordinarily prudent man would use in his own affairs. In order to constitute a just cause for the employee’s dismissal, the neglect of duties must not only be gross but must also be habitual. Thus, a single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. To justify the dismissal of an employee for neglect of duties, however, it does not seem necessary that the employer show that he has incurred actual loss, damage or prejudice by reason of the employee’s conduct. It is sufficient that the gross and habitual neglect by the employee of his duties tends to prejudice the employer’s interest since it would be unreasonable to require the employer to wait until he is materially injured before removing the cause of the impending evil (DOLE Manual).
Gross negligence connotes want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances. On the other hand, fraud and willful neglect of duties imply bad faith on the part of the employee in failing to perform his job to the detriment of the employer and the latter’s business (JGB and Associates, Inc. vs. NLRC, G.R. No. 109390, Mar. 7, 1996).

Elements of gross and habitual neglect of duties
To be a valid ground for termination, the following must be present :
1. There must be neglect of duty; and
2. The negligence must be both gross and habitual in character.

Some principles on gross and habitual neglect of duties
Habitual absenteeism without leave is sufficient to justify termination of an employee. Habitual or prolonged absences constitute gross negligence (Club Filipino, Inc. vs. Sebastian, G.R. No. 85490, Jul. 23, 1992).
Tardiness and absenteeism, if habitual, may be cited as a ground to terminate employment (Valiao vs. CA, G.R. No. 146621, Jul. 30, 2004) or may be tantamount to serious misconduct (Quiambao vs. Manila Electric Company, G.R. No. 171023, Dec. 18, 2009).
Unblemished record belies allegation of gross and habitual neglect (Union Motor Corporation vs. NLRC, G.R. No. 159738, Dec. 9, 2004). Unsatisfactory or poor performance, inefficiency or incompetence, considered a just cause for dismissal only if it amounts to gross and habitual neglect of duties (Miranda vs. Carreon, G.R. No. 143540, Apr. 11, 2003).

c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative

Commission of fraud by an employee against the employer will necessarily result in the latter’s loss of trust and confidence in the former. However, the ground of willful breach by the employee of the trust and confidence reposed in him by the employer may not necessarily involved fraud but some other acts that would similarly result in the loss of such trust and confidence.

Fraud, defined
Fraud refers to any act, omission, or concealment which involves a breach of legal duty, trust or confidence justly reposed, and is injurious to another. (Phil Education Co. v. Union of the Phil Education Employees, GR. No. L-13778, April 29, 1960; Lepanto Consolidated Mining v. CA, GR No. L-15171, April 29, 1961).
To constitute a just cause for terminating the employee’s services, the fraud must be committed against the employer or representative and in connection with the employee’s work. Thus, the fraud committed by an employee against a third person not in connection with his work which does not in any way involve his employer is not a ground for dismissal of the employee (Ibid).
The circumstances evidencing fraud and misrepresentation are as varied as the people who perpetrate it, each assuming different shapes and forms and may be committed in as many different ways. Fraud and misrepresentation are, therefore, never presumed; it must be proved by clear and convincing evidence and not mere preponderance of evidence (Solidbank Corporation vs. Mindanao Ferroalloy Corporation, G.R. No. 153535, Jul. 28, 2005).

Elements of fraud or willful breach of trust
To be a valid ground for termination, the following must be present :
1. There must be an act, omission, or concealment;
2. The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
3. It must be committed against the employer or his/her representative; and
4. It must be in connection with the employee’s work.

Some principles on fraud or willful breach of trust
Lack of damage or losses is not necessary in fraud cases (Diamond Motors Corporation vs. CA, G.R. No. 151981, Dec. 1, 2003). Failure to deposit collection constitutes fraud (Aldeguer & Co., Inc./Loalde Botique vs. Tomboc, G.R. No. 147633, Jul. 28, 2008). Restitution does not have absolutory effect (Gonzales vs. NLRC, G.R. No. 131653, Jul. 2, 2010). Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of personal checks by teller and cashier (Central Pangasinan Electric Cooperative, Inc. vs. Macaraeg, G.R. No. 145800, Jan. 22, 2003).
The employer has a distinct prerogative to dismiss an employee if the former has ample reason to distrust the latter or if there is sufficient evidence to show that the employee has been guilty of breach of trust (Top Form Mfg., Co., Inc. vs. NLRC, G.R. No. 65706, Dec. 11, 1992).
The act of the Head Supervisor in initiating and leading the boycott, thereby disrupting and impairing company operations, is sufficient reason for the company to lose its trust and confidence on her, considering that she was a managerial employee whose position carries the corresponding highest degree of responsibility in improving and upholding the interests of the company and in exemplifying the utmost standard of discipline and good conduct among her co-employees, thereby justifying the termination of her employment (Ibid.).

Loss of confidence, defined
Loss of confidence refers to a condition arising from fraud or willful breach of trust by employee of the trust reposed in him/her by his/her employer or his/her duly authorized representative. There are two (2) classes of positions of trust. The first class consist of managerial employees, or those vested with the power to lay down management policies; and the second class consists of cashiers, auditors, property custodians or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property (Esguerra v. Valle Verde Country Club, Inc. and Ernesto Villaluna, GR. No. 173012, June 13, 2012).

Elements of loss of confidence
To be a valid ground for termination, the following must be present :
1. There must be an act, omission or concealment;
2. The act, omission, or concealment justifies the loss of trust and confidence of the employer to the employee;
3. The employee concerned must be holding a position of trust and confidence;
4. The loss of trust and confidence should not be simulated;
5. It should not be used as a subterfuge for causes which are improper, illegal or unjustified; and
6. It must be genuine and not a mere afterthought to justify an earlier action taken in bad faith.

Position of trust and confidence
A position of trust of confidence is one where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property (Lepanto Consolidated Mining Co. vs. CA, G.R. No. L-15171, Apr. 29, 1961).
The basic premise for a valid dismissal on account of willful breach of trust is that the employee concerned holds a position of trust and confidence, and it is his breach of this trust that results in the employer’s loss of confidence in the employee (Estiva vs. NLRC, G.R. No. 95145, Aug. 5, 1993). The act complained of must be work-related to show that the employee is unfit to continue working for the employer (Gonzales vs. NLRC, 355 SCRA 197).

Two classes of positions of trust and confidence
1. Managerial positions
2. Non-managerial positions whose holders thereof regularly handle significant amounts of money or property in the normal and routine exercise of their functions (Bristol Myers Squibb, Inc. vs. Baban, G.R. No. 167449, Dec. 17, 2008). Based on jurisprudence, some positions classified as such are: supervisor, bookkeeper or accounting clerk, purchaser, accountant, cashier, salesman, bank teller, engineer, security guard or security officer, roomboy or chambermaid, assistant cook or chief cook, chief purser.

Rules on termination of managerial employee and supervisor and rank-and-file employees
As a general rule, the doctrine of trust and confidence is restricted to managerial employees. This means that the rule on termination of employment applicable to managerial or fiduciary employees are different from those involving ordinary employees not holding positions of trust and confidence. In the latter case, mere accusations by the employer will not be sufficient. Thus, with respect to rank-and-file employee, loss of trust and confidence as a ground for valid dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal.

Some principles on loss of trust and confidence
Long years of service, absence of derogatory record and small amount involved, are deemed inconsequential insofar as loss of trust and confidence is concerned (Etcuban, Jr. vs. Sulpicio Lines, Inc., G.R. No. 148410, Jan. 17, 2005). Dropping of criminal charges or acquittal in a criminal case arising from the same act does not affect validity of dismissal based on loss of trust and confidence (Metro Transit Organization, Inc. vs. CA, G.R. No. 142133, Nov. 19, 2002).
Breach must be founded on clearly established facts (Asia Pacific Chartering, Inc. vs. Farolan, G.R. No. 151370, Dec. 4, 2002), it must be willful and without justifiable excuse (Baron vs. NLRC, G.R. No. 182299, Feb. 22, 2010) and must be work related (Alcantara vs. The Philippine Commercial and Industrial Bank, G.R. No. 151349, Oct. 20, 2010). Ordinary breach of trust will not suffice (Salas vs. Aboitiz One, Inc., G.R. No. 178236, Jun. 27, 2008).

d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives

Commission of a crime
Conviction of a crime involving moral turpitude is not one of the justifiable causes under the law (JISSCOR Independent Union vs. Hon. Torres, 221 SCRA 699).
The commission of a crime by the employee under the law refers to an offense against the person of his employer or any immediate member of his family or his duly authorized representative, and thus the conviction of a crime involving moral turpitude is not analogous thereto as the element of relation to his work or to his employer is lacking (Ibid).
The immediate members of the family refers to parents, children, brothers, sisters, grandparents and grandchildren.

Elements of commission of a crime or offense
To be a valid ground for termination, the following must be present :
1. There must be an act or omission punishable/prohibited by law; and
2. The act or omission was committed by the employee against the person of the employer, any immediate member of his/her family, or his/her duly authorized representative.

e) Other causes analogous to the foregoing

Analogous causes
One is analogous to another if it is susceptible of comparison with the latter, either in general as in some specific detail, or has close relationship with the latter (Lim vs. NLRC, G.R. No. 118434, Jul. 26, 1996).
The determination of whether the cause for terminating employment is analogous to any of those enumerated by the law will depend on the circumstances of each case. To be considered analogous to the just causes, a cause must be due to the voluntary and/or willful act or omission of the employee (Nadura vs. Benguet Consolidated, Inc., G.R. No. L-17780, Aug. 24, 1962).

Elements of analogous cases
To be a valid ground for termination, the following must be present:
1. There must be act or omission similar to those specified just causes; and
2. The act or omission must be voluntary and/or willful on the part of the employees.

No act or omission shall be considered as analogous cause unless expressly specified in the company rules and regulations or policies.

Some principles on analogous cases
Violation of company rules and regulations, such as the no-smoking or no-sleeping rule or the liquor ban rule (Castil vs. CIR, 39 SCRA 76; Northern Motors vs. NLU, 102 Phil. 958; PAL vs. NLRC, 124 SCRA 583), or no-gambling rule (Villa vs. NLRC, supra). Theft of company property such as involvement in the loss or theft of company cargoes (Sea Land Service, Inc. vs NLRC, G.R. No. 68212, May 24, 1985).
Immorality, drunkenness or fighting inside the company premises may constitute analogous causes (Qua vs. Hon. Jacobo Clave, G.R. No. 49549, Aug. 30, 1990). This is regardless of whether or not the quarrel (fighting) was purely personal or work-related (Navarro III vs. Hon. Damasco, G.R. No. 101875, Jul. 14, 1995).
Gross inefficiency is an analogous cause for termination. It is clearly related to gross neglect for both involve specific acts or omissions on the part of the employee resulting in damage to the employer or to his business (Lim vs NLRC, G.R. No. 118434, Jul. 26, 1996).

Other causes of termination

1. Abandonment of work

Abandonment is a form of neglect of duty. Hence, a just cause for termination of employment under Article 282 (now Art. 297) paragraph (b) of the Labor Code (Forever Security & General Service vs. Flores, G.R. No. 147961, Sep. 7, 2007).
Mere absence is not enough to constitute abandonment. There must be clear intention on the part of the employee to sever his or her employment relationship. An employee who stopped working because of her mistaken belief that she has been dismissed is not guilty of abandonment (Uniwide Sales Warehouse Club vs. NLRC, G.R. No. 154503, Feb. 29, 2008).
Abandonment is a factual issue (Premiere Development Bank vs. NLRC, G.R. No. 114695, Jul. 23, 1998) hence, the employer has the burden of proof to prove abandonment (Northwest Tourism Corp. vs. Former Special Third Division of the Hon. CA, G.R. No. 150591, Jun. 27, 2005).

Elements of abandonment of work
To constitute abandonment, two (2) elements must concur, namely:
1. The employee must have failed to report for work or must have been absent without valid or justifiable reason; and
2. There must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act (CRC Agricultural Trading vs. NLRC, G.R. No. 177664, Dec. 23, 2009).

Due process in abandonment
In abandonment cases, due process is consist only of the service of two (2) notices to the employee, viz.:
1. First Notice directing the employee to explain why he should not be declared as having abandoned his job; and
2. Second Notice to inform him of the employer’s decision to dismiss him on the ground of abandonment (Kingsize Manufacturing Corporation vs. NLRC, G.R. Nos. 110452-54, Nov. 24, 1994).
Notices in abandonment cases must be sent to employee’s last known address (Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004) and no hearing is required to validly dismiss an employee for abandonment (Intertranz Container Lines, Inc. vs. Bautista, G.R. No. 187693, Jul. 13, 2010).

No abandonment in the following cases
Immediate filing of a complaint for illegal dismissal praying for reinstatement negates abandonment (Pasig Cylinder Mfg., Corp. vs. Rollo, G.R. No. 173631, Sep. 8, 2010). Employment in another firm coinciding with the filing of complaint does not indicate abandonment (Hda. Dapdap I vs. NLRC, G.R. No. 120556, Jan. 26, 1998).

Some principles on abandonment
It is abandonment when what is prayed for in the complaint is separation pay and it was only in the position paper that reinstatement was prayed for (Calipay vs. NLRC, G.R. No. 166411, Aug. 3, 2011). Subcontracting for another company indicates abandonment (Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004). An employee who failed to report for work after the expiration of the duly approved leave of absence is considered to have abandoned his job (Ramo vs. Elefano, G.R. No. L-55629, Jul. 3, 1981). An employee who failed to comply with the order for his reinstatement is deemed to have abandoned his work (East Asiatic vs. CIR, G.R. No. L-29068, Aug. 31, 1971). An employee who deliberately absented from work without leave or permission from his employer for the purpose of looking for a job elsewhere is deemed to have abandoned his work (Sandoval Shipyard vs. Clave, G.R. No. L-49875, Nov. 21, 1979).

2. Union security clause

Article 259 paragraph (e) provides for the union security clause wherein it provides that “… Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement…”
The union security clause is a stipulation in the Collective Bargaining Agreement (CBA) which allows the parties thereto to enter into an agreement requiring membership in the exclusive collective bargaining agent which successfully negotiated the said CBA as a condition for continued employment with the exception of employees who are already members of another union at the time of the signing of the CBA.
This means that members of the bargaining agent are not allowed to resign or terminate their membership therefrom. Otherwise, any member of the bargaining agent who opted to resign or is expelled therefrom may be recommended to the employer by the bargaining agent for the termination of his or her employment. However, employees who are members of other unions at the time of the signing of the CBA are not bound by the union security clause. They cannot also be compelled to resign from their respective union in order to join the bargaining agent. For new employees however, they can be compelled to join the bargaining agent and if they refuse, they can be recommended for termination.

Due process in case of dismissal based on the union security clause
Prior to terminating the and employee on the ground of violation of the union security clause, the following requisites should be complied with by the employer:
1. The union security clause is applicable;
2. The union is requesting for the enforcement of the union security provision in the CBA; and

3. There is sufficient evidence to support the union’s decision to expel the employee from the union.
The foregoing requisites constitutes a just cause for terminating an employee based on the CBA’s union security provision (Picop Resources, Inc. vs. Taneca, G.R. No. 160828, Aug. 9, 2010).

Some principles on dismissal based on violation of union security clause
Dismissal effected by the employer pursuant to a labor union’s demand in accordance with a union security agreement does not constitute an unfair labor practice (Malayang Samahan ng Manggagawa sa M. Greenfield vs. Ramos, G.R. No. 113907, Feb. 28, 2000). The employee sought to be terminated should be afforded an independent and separate hearing which means that the employer is not duty-bound to immediately implement the recommendation to terminate made by the union. It has to conduct its own hearing independent and separate from any hearing conducted by the union (Alabang Country Club, Inc. vs. NLRC, G.R. No. 170287, Feb. 14, 2008). Though the employer has the liability for reinstatement, full backwages, damages and attorney’s fees in illegal dismissal case based on the union security clause, the employer has the right to be reimbursed for payment of any claims arising out of dismissals made upon demand of the union under the union security clause (Del Monte Philippines, Inc. vs. Saldivar, G.R. No. 158620, Oct. 11, 2006).

3. Totality of infractions doctrine

Under this doctrine, the employee’s historical records of offenses, malfeasance or misfeasance, as a general rule, are relevant in the consideration of the gravity of his violations or transgressions. In the actual imposition by the employer of penalties on erring employees, due consideration must be given to their length of service and the number of violations they have committed during their employ (Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004).
This doctrine dictates that the offenses committed by an employee should not be taken singly and separately but in their totality (Valiao vs. CA, G.R. No. 146621, Jul. 30, 2004).

Some principles on totality of infractions doctrine
Past violations may only be used as justification to dismiss an employee for subsequent similar or related offense. The previous infractions, in other words, may be used if they have a bearing to the proximate offense warranting dismissal (La Carlota Planters Association, Inc. vs. NLRC, G.R. No. 126689, Oct. 27, 1998). Past infractions for which the employee has already amply explained but without the employer taking any action thereon can no longer be cited as grounds to dismiss (Felix vs. NLRC, G.R. No. 148256, Nov. 17, 2004). Employer has to prove subsequent offense by substantial evidence (Coca-Cola Bottlers, Phils., Inc. vs. Daniel, G.R. No. 156893, Jun. 21, 2005).

References:
- Article 259 par. (e). Unfair Labor Practices of Employers, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.
- Article 297. Regular and Casual Employment, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.
- Department Order No. 147-15, Series of 2015, Amending the Implementing Rules and Regulations of Book VI of the Labor Code of the Philippines, as amended.
- Poquiz, Labor Relations Law, 2005.
- Supreme Court Decisions

Tuesday, July 21, 2020

Classification of Employment Status in the Philippines

The nature of the employment depends on the nature of the activities to be performed by the employee, considering the nature of the employer’s business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its continued existence.
Further, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. Equally important to consider is that a contract of employment is impressed with public interest such that labor contracts must yield to the common good. Thus, provisions of applicable statutes are deemed written into the contract, and the parties are never at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply entering into contracts with each other (Innodata Knowledge Services, Inc. vs. Inting, et. al., G.R. No. 211892, December 6, 2017).
In the Philippines, there are six (6) common employee classification; to wit:

1. Regular or Permanent Employment

Three ways to attain regular employment
Under the Labor Code of the Philippines, it can be gleaned that there are three (3) ways in attaining regular employment:
a. By nature of their work, that is when the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.
b. By period of their service, that is when the employee has rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity in which he is employed and his employment shall continue while such activity exists.
c. By their probationary employment, that is when the employee is allowed to work after a probationary period.   
Being a regular employee, aside from the fact that he or she cannot be terminated for causes other than those just and authorized causes provided by law and only after due process is given to them, he or she is likewise entitled to some benefits which other employee may not have like healthcare benefits and insurance.

Primary standard that determines regular employment
The primary standard that determines regular employment is the reasonable connection between the particular activity performed by the employee and the usual business or trade of the employer; the emphasis is on the necessity or desirability of the employee’s activity. Thus, when the employee performs activities considered necessary and desirable to the overall business scheme of the employer, the law regards the employee as regular.
Written or oral agreement is immaterial in the determination of regular employment (Association of Trade Unions vs. Abella, G.R. 100518, Jan. 24, 2000). Even the manner or mode of paying the wages of employees does not affect the regularity of his or her employment. So that, if an employee is paid on a per-piece basis (Labor Congress of the Philippines vs. NLRC, G.R. No. 123938, May 21, 1998) or on commission basis (Columbus Philippines Bus Corporation vs. NLRC, G.R. Nos. 114858-59, Sep. 7, 2001), his becoming a regular employee is not affected thereby.

Exception to the rule on regularity under Article 295
Fixed-term employment is however, an exception to the rule on regularity under Article 295 of the Labor Code. This means that an employee may validly enter into a fixed-term employment contract even if the nature of his work is directly related to the principal business or trade of his employer (Brent School vs. Zamora, G.R. No. L-48494, Feb. 5, 1990).

By period of their service
The Supreme Court has repeatedly held that if the employee has been performing the job for at least one (1) year, even if the performance is not continuous but intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business of his employer. Hence, the employment is also considered regular, but only with respect to such activity, and while such activity exists. The law does not provide the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular employee status. Obviously, where the law does not distinguish, no distinction should be drawn (Conti and Cruz vs. NLRC, G.R. No. 119253, April 10, 1997). Moreover, the repeated renewal of contract is an indication of regular employment (Bernardo vs. NLRC, G.R. No. 122917, July 12, 1999).

By their probationary employment
As a general rule, probationary employment cannot exceed six months. Otherwise, the employee concerned shall be regarded as a regular employee. Moreover, it is indispensable in probationary employment that the employer informs the employee of the reasonable standards that will be used as basis for his or her regularization at the time of his or her engagement. In the event that the employer fails to comply with the aforementioned, then the employee is considered a regular employee (Moral vs. Momentum Properties Management Corporation, G.R. No. 226240, March 06, 2019).

2. Casual Employment

Concept of casual employment
An employment shall be deemed to be casual, when an employee is engaged to perform a job, work or service which is not usually necessary or desirable or merely incidental to the business or trade of the employer and such job, work or service is for definite period made known to the employee at the time of his or her engagement.

Regularization of casual employees
Article 295 of the Labor Code of the Phillipines provides that any employee who has rendered at least 1 year of service, whether such service is continuous or not, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Hence, casual employee becomes regular after 1 year of service by operation of law (Capule vs. NLRC, G.R. No. 90653, Nov. 12, 1990). In other words, no regular appointment paper is necessary for casual employees to become regular (Kay Products, Inc. vs. CA, G.R. No. 162472, Jul. 28, 2005).
The purpose of the provision which considers as regular employees those casual employees who have rendered at least 1 year of service  whether such service is maybe continuous or broken is to put an end to casual employment in regular jobs which have been abused by many employers to prevent so-called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. Its purpose is to give meaning to the constitutional guarantees of security of tenure and right to self-organization (Mercado vs. NLRC, G.R. No. 79869, Sep. 5, 1991).
Repeated rehiring of a casual employee makes him a regular employee. For this purpose, the 1-year period should be reckoned from the first time he or she was hired.

Security of tenure of casual employees
If a casual employee has rendered at least 1-year service in the same company, whether such service is continuous or intermittent, the casual employee shall be considered a regular employee with respect to the activity employed. Casual employee enjoys security of tenure while such activity continues and cannot be terminated for causes other than those just and authorized causes provided by law and only after due process is given to them.

3. Probationary Employment

Concept of probationary employment
A probationary employee is one who, for a given period of time, is under observation and evaluation to determine whether or not he is qualified for permanent employment. During the probationary period, the employer is given the opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment (Dela Cruz vs. NLRC, G.R. No. 145417, Dec. 11, 2003).

Duration of probationary employment
As a general rule, the duration of probationary employment is limited to 6 months. However, there are exceptions to this rule such as when the employer and employee agree on a shorter or longer period; when the nature and work to be performed by the employee requires a longer period; when a longer period is required and established by company policy. If not one of the exceptional circumstances is proven, the employee whose employment exceeds 6 months is undoubtedly a regular employee (San Miguel Corp. vs. Del Rosario, G.R. Nos. 168194 and 168603, Dec. 13, 2005).
If the job is apprenticeable, the probationary employment is the apprenticeship period of not more than 6 months or less than 3 months, depending on the nature of the job. If the job is learnable (non-apprenticeable), the probationary employment is the learnership period which is not more than 3 months. Upon expiration of the training period, the apprentice or learner becomes a regular employee and does not anymore undergo a probationary period in the company that conducted the training program (Policy Instruction No. 11; Sec. 6a., Rule I, Book VI, Rules Implementing the Labor Code).
The employer and employee may extend by agreement the probationary period of employment beyond 6 months. If thus extended, the employee cannot later on claim regular status on the ground that the 6-month period had already elapsed. The extension of probation is ex gratia, an act of liberality on the part of the employer that cannot be used unjustly against him. By voluntarily agreeing to an extension of the probationary period, the employee waived any benefit attaching to the completion of the period if he still failed to make the grade during the period of extension. Voluntary agreements which reasonably extend the period of probation actually improve and further a probationary employee’s prospects of demonstrating his fitness for regular employment (Mariwasa Mfg., Inc. vs. Hon. Leogardo, G.R. No. 74246, Jan. 26, 1989).

Security of tenure of probationary employee
A probationary employee enjoys security of tenure, although it is not on the same plane as that of a permanent employee. Other than being terminated for a just or authorized cause, a probationary employee may also be dismissed due to his or her failure to qualify in accordance with the standards of the employer made known to him or her at the time of his or her engagement. Hence, the services of a probationary employee may be terminated for any of the following: (1) a just cause; (2) an authorized cause; and (3) when he or she fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer (Moral vs. Momentum Properties Management Corporation, G.R. No. 226240, March 06, 2019).
Under Article 296 of the Labor Code, it provides that the services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement.

Due process on termination of probationary employment
For the first ground which is termination for a just cause or authorized cause, procedural due process is required. Otherwise, even though the dismissal is for a just cause but procedural due process was not followed, nominal damages of Php 30,000.00 maybe awarded to the employee based on the Agabon Doctrine (Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004). If the dismissal is for an authorized cause but procedural process was not followed, nominal damages of Php 50,000.00 may be awarded to the employee based on the Jaka Doctrine (Jaka Food Processing Corporation vs. Pacot, G.R. No. 151378, Mar. 28, 2005).
For the second ground, termination of probationary employment does not require notice and hearing. Due process of law has already been observed if reasonable standards expected of the employee during his or her probationary period was made known to him or her at the time of his or her probationary employment.
To be valid, termination must be done prior to lapse of probationary period (Pasamba vs. NLRC, G.R. No. 168421, Jun. 8, 2007). In Mitsubishi Motors Phils. Corp vs. Phils. Labor Union, G.R. No. 148738, Jun. 29, 2004, the Court declared that when the the employee received the letter of termination on the 183rd day or after the expiration of 6-month period of probation, the employee was already a regular employee under Article 281 (now 296) of the Labor Code.

4. Project Employment

Concept of project employment
Article 295 of the Labor Code provides that project employment is where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.
The services of a project employees are coterminous with the project or phase thereof and may be terminated upon the end or completion of the project or phase thereof for which they were hired. If the termination is brought about by the completion of the project or any phase thereof, due process is complied with even if no prior notice of termination is served.
The employees of a particular project are not terminated at the same time. Some phases of the project are completed ahead of others. For this reason, the completion of a phase of the project is the completion of the project for an employee employed in such phase. Employees terminated upon the completion of their phase of the project are not entitled to separation pay and exempt from the clearance requirement.

Length of service, not controlling
Length of service is not controlling for the determination of employment tenure (Fabela vs. San Miguel Corporation, G.R. No. 150658, Feb. 9, 2007). Hence, project to project basis of employment is held valid. Project employees, however, should be informed of their status as such at inception of the employment relationship. There must be a written contract of project employment stating the duration of the project employment as well as the particular work or service to be performed (Abesco Construction and Development Corp. vs. Ramirez, G.R. No. 141168, Apr. 10, 2006). Failure to present contract of employment means that employees are regular.

Work Pool Principle
As a general rule, employers may or may not form a work pool. A work pool refers to a group of workers from which an employer like a construction company draws the workers it deploys or assigns to its various projects or any phase/s thereof. Members of a work pool may consist of:
1. Non-project employees or employees for an indefinite period. If they are employed in a particular project, the completion of the project or of any phase thereof will not mean severance of employer-employee relationship.
2. Project employee are workers in a work pool who are employed in a particular project or any phase thereof are considered as such if they are free to leave anytime and offer their services to other employers.
Mere membership in a work pool does not result in the worker’s becoming regular employees by reason that fact alone. However, under established jurisprudence, a project employee who is a member of a work pool, may attain regular status as a project employee. This kind of employee is known as regular project employee.

Security of tenure of project employee
Project employees enjoys security of tenure during the term of project employment (Tomas Lao Construction vs. NLRC, G.R. No. 116781, Sep. 5, 1997). If the project or any phase thereof the project employee is working on has not yet been completed and his services are terminated without just or authorized caused and there is no showing that his services are unsatisfactory, such termination is considered illegal, hence, the project employee is entitled to reinstatement with backwages to his former position or substantially equivalent position. If reinstatement is no longer possible, the employee is entitled to his salaries for the unexpired portion of the agreement (Filipinas Pre-Fabricated Building Systems, Inc. vs. Puente, G.R. No. 153832, Mar. 18, 2005).

Not entitled to separation pay
Project employees are not, by law, entitled to separation pay if their services are terminated as a result of the completion of the project or any phase thereof in which they are employed. The reason is that their services are deemed coterminous with the project or phase thereof. And since its coterminous, advance notice of termination of project employment is not required.

Reportorial requirement, mandatory
The employer should have submitted or filed as many reports of termination as there were construction projects actually finished. The failure to submit reports of termination supports the claim of private respondent that he was indeed a regular employee (Audion Electric Co., Inc. vs. NLRC, G.R. No. 106648, Jun. 17, 1988) not a regular employee. Report to DOLE on termination of project employees is required. Report should be made after every completion of project of phase thereof (Dacuital vs. L.M. Camus Engineering Corp., G.R. No. 176748, Sep. 1, 2010).

5. Seasonal Employment

Concept of seasonal employment
Article 295 of the Labor Code provides that a seasonal employment is where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
It operates much in the same way as project employment, albeit it involves work or service that is seasonal in nature or lasting for the duration of the season. As with project employment, although the seasonal employment arrangement involves work that is seasonal or periodic in nature, the employment itself is not automatically considered seasonal so as to prevent the employee from attaining regular status. To exclude the asserted "seasonal" employee from those classified as regular employees, the employer must show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been employed for the duration of the season. Hence, when the "seasonal" workers are continuously and repeatedly hired to perform the same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise serve as badge of regular employment. In fact, even though denominated as "seasonal workers," if these workers are called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-season period. The law simply considers these seasonal workers on leave until re-employed (Universal Robina Sugar Milling Corp., et. al. vs. Acibo, et. al., G.R. No. 186439, January 15, 2014).

Regular seasonal employee
Thus, seasonal employees may attain regularity in their employment and they are properly to be called as regular seasonal employees. As such, they are called to work from time to time, mostly during certain season. The nature therefore of their relationship with the employer is such that during off-season, they are temporarily laid-off but they are reemployed during the season or when their services may be needed. They are not separated from the service but merely considered as on leave of absence without pay until they are re-employed. Their employment is never severed but only suspended.
The requisites in order that a seasonal employee may attain regularity of employment are: 1) the seasonal employee should perform work or services that are seasonal in nature; and 2) they have been employed for more than one (1) season. Both requisites should concur in order that the employee may be classified as regular seasonal employee (Hacienda Fatima vs. National Federation of Sugarcane Workers – Food and General Trade, G.R. No. 149440, Jan. 28, 2003).

6. Fixed-Term or Contractual Employment

Interestingly, the Labor Code does not mention another employment arrangement – contractual or fixed term employment (or employment for a term) – which, if not for the fixed term, should fall under the category of regular employment in view of the nature of the employee’s engagement, which is to perform an activity usually necessary or desirable in the employer’s business (Universal Robina Sugar Milling Corp., et. al. vs. Acibo, et. al., G.R. No. 186439, January 15, 2014).

Concept of fixed-term or contractual employment
Fixed-term or contractual employment is when the employee renders service for a definite period of time and the employment contract must be terminated after such period expires. This type of employment is determined not by the activities that the employee is expected to perform but by the commencement and termination of the employment relationship.
In Brent School, Inc. v. Zamora, G.R. No. L-48494, February 5, 1990 the Court, for the first time, recognized and resolved the anomaly created by a narrow and literal interpretation of Article 280 of the Labor Code that appears to restrict the employee’s right to freely stipulate with his employer on the duration of his engagement. In this case, the Court upheld the validity of the fixed-term employment agreed upon by the employer, Brent School, Inc., and the employee, Dorotio Alegre, declaring that the restrictive clause in Article 280 "should be construed to refer to the substantive evil that the Code itself x x x singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where [the] fixed period of employment was agreed upon knowingly and voluntarily by the parties x x x absent any x x x circumstances vitiating [the employee’s] consent, or where [the facts satisfactorily show] that the employer and [the] employee dealt with each other on more or less equal terms[.]" The indispensability or desirability of the activity performed by the employee will not preclude the parties from entering into an otherwise valid fixed term employment agreement; a definite period of employment does not essentially contradict the nature of the employees duties as necessary and desirable to the usual business or trade of the employer.

Requisites for a valid fixed-term or contractual employment
There are two requisites for the validity of a fixed-term contract of employment, they are: 1) the fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; and 2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter Labayog vs. M.Y. San Biscuits, Inc., G.R. No. 148102, Jul. 11, 2006). If the foregoing criteria are not present, the fixed-term contract of employment should be struck down for being illegal.

Some principles on fixed-term employment
Fixed-term is valid even if duties are usually necessary or desirable in the employer’s usual business or trade (Caparoso vs. CA, G.R. No. 155505, Feb. 15, 2007). The employee is deemed regular if contract failed to state the specific fixed period of employment (Poseidon Fising vs. NLRC, G.R. No. 168052, Feb. 20, 2006) and notice of termination is not necessary in fixed-term employment (New Sunrise Metal Construction vs. Pia, G.R. No. 171131, Jul 10, 2007).
Employee allowed to work beyond fixed-term become regular employees (Viernes vs. NLRC, G.R. No. 108405, Apr. 4, 2003). However, rendering work beyond 1 year would result to regular employment (Agusan del Norte Electric Cooperative vs. Cagampang and Garzon, G.R. No. 167627, Oct. 10, 2008).
Hiring of employees on a uniformly fixed 5-month basis and replacing them upon the expiration of their contracts with other workers with the same employment status circumvents their right to security of tenure (Pure Foods Corporation vs. NLRC, G.R. No. 122653, Dec. 12, 1997). Successive renewals of fixed-period contracts will result to regular employment (Philips Semiconductor, Inc. vs. Fadriquela, G.R. No. 141717, Apr. 14, 2004).
Charges for misconduct or other wrongful acts or omissions are relevant only in termination prior to expiration of the term. It is not relevant if termination is due to expiration of fixed period (AMA Computer College, Paranaque vs. Austria, G.R. No. 164078, Nov. 23, 2007).

References:
- Article 295. Regular and Casual Employment, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.
- Article 296. Probationary Employment, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.
- Poquiz, Labor Relations Law, 2005.
- Supreme Court Decisions