A. Security of tenure

Frequency: ★★★★★

1. Categories of employment as to tenure

a. Regular

1) Under the Labor Code

Under Article 295 of the Labor Code, the law provides for two (2) types of regular employees, namely:
1) Those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer (first category); and
2) Those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed (second category). (Universal Robina Corporation v. Catapang, G.R. No. 164736, 14 October 2005)

First category. Regular employees are those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. (Article 295, Ibid.)

Same; Reasonable connection standard.The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. (Universal Robina Corporation v. Catapang, supra.)

Second category. With the exception of project and fixed-term employees, any employee who has rendered at least one year of service, whether such service is continuous or broken, 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. (Paragraph 2, Article 295, Ibid.)

b) When deemed regular due to non-compliance with labor laws and regulations (or by operation of law)

The law deems the following employees as regular employees for non-compliance with labor laws and regulations:
1) Probationary employees who were permitted or required to render work after the probation period;
2) Probationary employees who were not informed of the standards or criteria for regular employment on/before the first day of work;
3) Casual employees who perform work or service which are not incidental, but rather usually necessary or desirable in the usual trade or business of the employer;
4) Casual employees who were permitted or required to work for more than twelve (12) months;
5) Project employees who were not assigned to any specific project or undertaking;
6) Project employees who were not been informed of the completion or termination of the specific project or undertaking on/before the time of the engagement;
7) Project employees who have been continuously rehired even after the cessation of a project, and the tasks performed are vital, necessary and indispensable to the usual business or trade of the employer (Maraguinot, Jr. v. NLRC, G.R. No. 120969, 22 January 1998)
8) Seasonal employees who were permitted or required to work after the season;
9) Seasonal employees who are repeatedly rehired during a season (resulting in them being regular seasonal employees);
10) Fixed-term employees who entered into such arrangement involuntarily;
11) Fixed-term employees who were not able to deal with the employer on more or less equal terms with no moral dominance being exercised by the employer over the employee on/before the time of engagement.

c) Presumption of regular employment

While the lack of a written contract does not necessarily make one a regular employee, a written contract serves as proof that employees were informed of the duration and scope of their work and their status as project employee at the commencement of their engagement. There being none that was adduced here, the presumption that the employees are regular employees prevails. (Inocentes v. R. Syuco Construction, Inc., G.R. No. 237020, 29 July 2019)

•••••

BAR EXAM QUESTION

(Question B.17[a], Part II, Labor Law, 2019 Bar Exam)

Ms. A is a volleyball coach with five (5) years of experience in her field. Before the start of the volleyball season of 2015, she was hired for the sole purpose of overseeing the training and coaching of the University’s volleyball team. During her hiring, the Vice-President for Sports expressed to Ms. A the University’s expectation that she would bring the University a championship at the end of the year.

In her first volleyball season, the University placed ninth (9th) out of 10 participating teams. Soon after the end of the season, the Vice-president for Sports informed Ms. A that she was a mere probationary employee and hence, she need not come back for the next season because of the poor performance of the team.

In any case, the Vice-President for Sports claimed that Ms. A was a fixed-term employee whose contract had ended at the close of the year.

(a) Is Ms. A, a probationary, fixed-term, or regular employee? Explain your reasons as to why she is or she is not such kind of an employee for each of the types of employment given. (5%)

SUGGESTED ANSWER:

(a) Ms. A is a regular employee. Answer

Under the Labor Code, a regular employee is one who is engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. A probationary employee is one who has been engaged under a probationary employment not exceeding six (6) months and the standards or criteria for regular employment have been made known on/before the engagement. A fixed-term employee is one who has been engaged for a fixed period of employment which was agreed upon knowingly and voluntarily by the parties. Rule

In the case at bar, Ms. A as volleyball coach performs activities which are usually necessary or desirable in the usual business or trade of the employer, the University. She cannot be a probationary employee since there is no indication that she was engaged under a probationary employment not exceeding six (6) months, neither is there any indication that the standards or criteria for regular employment have been made known on/before the engagement. Further, she cannot be a fixed-term employee since there is no indication that she was engaged for a fixed period of employment which was agreed upon knowingly and voluntarily by the parties. Apply

Thus, Ms. A is a regular employee. Conclusion

•••••

b. Casual

Requisites for casual employment:
1) An employee is engaged to perform a job, work or service, which is merely incidental to the business of the employer; and
2) Such job work or service s for a definite period made known to the employee at the time of engagement. (Section 5[b], Rule I, Book VI, Omnibus Rules Implementing the Labor Code)

12-month criterion/rule. Any employee, particularly a casual employee, who has rendered at least one year of service, whether such service is continuous or broken, 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. (Paragraph 2, Article 295, Ibid.)

NB: The 12-month rule does not apply to project employees and fixed-term employees.

On the 12-month criterion, the uncontested fact is that the employee rendered service for more than one year as a casual employee. Hence, under such criterion, she is still eligible to become a regular employee. (Philippine Long Distance Telephone Company, Inc. v. Arceo, G.R. No. 149985, 05 May 2006)

When deemed a regular employee:
1) Casual employees who perform work or service which are not incidental, but rather usually necessary or desirable in the usual trade or business of the employer; or
2) Casual employees who were permitted or required to work for more than twelve (12) months.

c. Probationary

Requisites for probationary employment:
1) An employee who has been engaged under a probationary employment not exceeding 180 calendar days; and
2) The standards or criteria for regular employment have been made known on/before the engagement. (Article 296, Labor Code)

Concept: Probationary employee. A probationary employee is defined as one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. (PNOC v. Buenviaje, G.R. No. 183200-01, 29 June 2016)

Probaationaty period not exceeding 180-calendar days. –

Mitsubishi Motos Philippines Corporation v. Chrysler Philippines Labor Union (2004)
Applying Article 13 of the Civil Code,31 the probationary period of six (6) months consists of one hundred eighty (180) days. This is in conformity with paragraph one, Article 13 of the Civil Code, which provides that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. The number of months in the probationary period, six (6), should then be multiplied by the number of days within a month, thirty (30); hence, the period of one hundred eighty (180) days.

Same; Exception. –

General Rule: Probationary employment cannot exceed six (6) months, otherwise the employee concerned shall be considered a regular employee. (Ibid.)
Exception: unless it is covered by an apprenticeship agreement stipulating a longer period. (Article 296, Labor Code)

Reasonable standards made known on/before the engagement. It is also indispensable in probationary employment that the employer informs the employee of the reasonable standards that will be used as a basis for his or her regularization at the time of his or her engagement. If the employer fails to comply with this, then the employee is considered a regular employee. (PNOC v. Buenviaje, supra.)

1) When deemed regular

When deemed a regular employee:
1) An employee who is allowed to work after a probationary period shall be considered a regular employee. (Article 296, Labor Code)
2) A probationary employee who was not informed of the reasonable standards that will be used as a basis for his or her regularization at the time of his or her engagement is considered a regular employee from the start of his employment. (PNOC v. Buenviaje, supra.)

2) Security of tenure

A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. (Carvajal v. Luzon Development Bank, G.R. No. 186169, 01 August 2012)

Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. (Ibid.)

3) Private school teachers

a) Manual of Regulations for Private Schools

Cases dealing with employment on probationary status of teaching personnel are not governed solely by the Labor Code as the law is supplemented, with respect to the period of probation, by special rules found in the Manual of Regulations for Private Schools (the Manual). (Colegio Del Santisimo Rosario v. Rojo, G.R. No. 170388, 04 September 2013)

Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. (1992 Manual of Regulations for Private Schools)

b) Modified probation with fixed-term employment contracts

The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teacher’s performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year – since it would be the third school year – of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. (Magis Young Achivers’ Learning Center, G.R. No. 178835, 13 February 2009)

Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. It is when the yearly contract is renewed for the third time that Section 93 of the Manual becomes operative, and the teacher then is entitled to regular or permanent employment status. (Ibid.)

c) Specify period or term of effectivity

It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period. (Ibid.)

d) Probation may be reduced by employer

All this does not mean that academic personnel cannot acquire permanent employment status earlier than after the lapse of three years. The period of probation may be reduced if the employer, convinced of the fitness and efficiency of a probationary employee, voluntarily extends a permanent appointment even before the three-year period ends. Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, the law does not preclude the employer from terminating the probationary employment on justifiable ground; or, a shorter probationary period may be incorporated in a collective bargaining agreement. But absent any circumstances which unmistakably show that an abbreviated probationary period has been agreed upon, the three-year probationary term governs. (Ibid.)

e) Security of tenure

Be that as it may, teachers on probationary employment enjoy security of tenure. (Ibid.)

d. Project

Requisites for project employment:
1) A project employee has been engaged for a specific project or undertaking;
2) The completion or termination of the project/undertaking has been determined at the time of the engagement of the employee. (Article 295, Labor Code)

Concept: Project employee. A project employee is assigned to a project which begins and ends at determined or determinable times. Unlike regular employees who may only be dismissed for just and/or authorized causes under the Labor Code, the services of employees who are hired as “project[-based] employees” may be lawfully terminated at the completion of the project. (Gadia v. Sykes Asia, Inc., G.R. No. 209499, 28 January 2015)

Length of time, not controlling. The length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular employment. (Maraguinot, Jr. v. NLRC, supra.)

Employment is co-terminus with project. The services of project-based employees are co-terminous with the project and may be terminated upon the end or completion of the project or a phase thereof for which they were hired. (Herma Shipyard, Inc. v. Oliveros, G.R. No. 208936, 17 April 2017)

Project employment contracts, which fix the employment for a specific project or undertaking, are valid under the law. By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may no longer be employed after the completion of the project for which he was hired. But project employment contracts are not lopsided agreements in favor of only one party. The employer’s interest is equally important as that of the employees’. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such contracts must not prejudice the employee. (Innodata Knowledge Services, Inc. v. Intiing, G.R. No. 211892, 06 December 2017)

1) Project employees v. Regular employees

Article 295 of the Labor Code, as amended and renumbered, defines a regular employee as (a) one that has been engaged to perform tasks usually necessary or desirable in the employer’s usual business or trade — without falling within the category of either a fixed, a project, or a seasonal employee; or (b) one that has been engaged for a least a year, with respect to the activity he or she is engaged, and the work of the employee remains while such activity exists. On the other hand, a project employee is one whose employment has been fixed for a specified project or undertaking, the completion or termination of which is made known at the time of the engagement of the employee. (Innocentes v. R. Syjuco Construction, Inc., G.R. No. 237020, 29 July 2019)

Project employees may perform work usually necessary or desirable. The rule on “usually necessary or desirable” does not apply to project employees. Otherwise stated, project employees may perform work or service which are usually necessary or desirable in the usual business or trade of the employer: Provided, That there is such a project and the duration thereof is determined.

2) Test of project employment

The principal test in determining whether particular employees were engaged as project-based employees, as distinguished from regular employees, is whether they were assigned to carry out a specific project or undertaking, the duration and scope of which was specified at, and made known to them, at the time of their engagement. It is crucial that the employees were informed of their status as project employees at the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure being brought to bear upon the employees or any other circumstances vitiating their consent. (Herma Shipyard, Inc. v. Oliveros, G.R. No. 208936, 17 April 2017)

The project for which project employees are hired would ordinarily have some relationship to the usual business of the employer. There should be no difficulty in distinguishing the employees for a certain project from ordinary or regular employees, as long as the duration and scope of the project were determined or specified at the time of engagement of said project employees. (Innodata Knowledge Services, Inc. v. Intiing, supra.)

In order to safeguard the rights of workers against the arbitrary use of the word “project” which prevents them from attaining regular status, employers claiming that their workers are project employees have the burden of showing that:

1) the duration and scope of the employment was specified at the time they were engaged; and

2) there was indeed a project. (Ibid.)

Therefore, as evident in Article 295, the litmus test for determining whether particular employees are properly characterized as project employees, as distinguished from regular employees, is whether or not the 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. (Ibid.)

a) Burden of proof

The employer has the burden to prove that the employee is indeed a project employee. (Innocentes v. R. Syjuco Construction, Inc., supra.)

3) When deemed regular

When deemed a regular employee:
1) Project employees who were not assigned to any specific project or undertaking;
2) Project employees who were not been informed of the completion or termination of the specific project or undertaking on/before the time of the engagement; or
3) Project employees who have been continuously rehired even after the cessation of a project, and the tasks performed are vital, necessary and indispensable to the usual business or trade of the employer. (Maraguinot, Jr. v. NLRC, G.R. No. 120969, 22 January 1998)

e. Seasonal

Requisites for seasonal employment:
1) An employee’s work or service is seasonal in nature; and
2) The employment is for the duration of the season. (Article 295, Labor Code)

•••••

BAR EXAM QUESTION

(Question A.1[b], Part I, Labor Law, 2019 Bar Exam)

Define, explain or distinguish the following terms:

(b) Seasonal and project employees (2%)

SUGGESTED ANSWER:

Seasonal employees are those whose work or service is seasonal in nature and the employment is for the duration of the season.

Project employees are those who have been engaged for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee (Article 295, Labor Code)

•••••

1) Regular seasonal employees

The employees were regularly and repeatedly hired to perform the same tasks year after year. This regular and repeated hiring of the same workers (two different sets) for two separate seasons has put in place, principally through jurisprudence, the system of regular seasonal employment in the sugar industry and other industries with a similar nature of operations. (Universal Robina Sugar Milling Corporation v. Acibo, G.R. No. 186439, 15 January 2014)

Under the system, the plantation workers or the mill employees do not work continuously for one whole year but only for the duration of the growing of the sugarcane or the milling season. Their seasonal work, however, does not detract from considering them in regular employment since in a litany of cases, this Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during the off-season are not separated from the service in said period, but are merely considered on leave until re-employment. Be this as it may, regular seasonal employees, like the respondents in this case, should not be confused with the regular employees of the sugar mill such as the administrative or office personnel who perform their tasks for the entire year regardless of the season. (Ibid.)

2) When deemed regular

When deemed a regular employee:
1) Seasonal employees who were permitted or required to work after the season; or
2) Seasonal employees who are repeatedly rehired during a season (resulting in them being regular seasonal employees).

f. Fixed-term

Requisites for fixed-term employment:
1) It should be shown that the fixed period was knowingly and voluntarily agreed upon by the parties. There should have been no force, duress or improper pressure brought to bear upon the employee; neither should there be any other circumstance that vitiates the employee’s consent; and
2) It should satisfactorily appear that the employer and the employee dealt with each other on more or less equal terms with no moral dominance being exercised by the employer over the employee. (Dumpit-Murillo v. CA, G.R. No. 164652, 08 June 2007)

Concept: Fixed-term employment. Fixed-term employment contracts refer to an arrangement where a fixed period of employment was agreed upon knowingly and voluntarily by the parties. (Brent School, Inc. v. Zamora, G.R. No. L-48494, 05 February 1990)

2) When deemed regular

When deemed a regular employee:
1) The fixed period was NOT knowingly and voluntarily agreed upon by the parties. There should have been no force, duress or improper pressure brought to bear upon the employee; neither should there be any other circumstance that vitiates the employee’s consent; or
2) The employer and the employee DID NOT dealt with each other on more or less equal terms with no moral dominance being exercised by the employer over the employee. (Dumpit-Murillo v. CA, G.R. No. 164652, 08 June 2007)

Moreover, fixed-term employment will not be considered valid where, from the circumstances, it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee. (Dumpit-Murillo v. CA, supra.)

Citing Dumpit-Murillo v. Court of Appeals and Philips Semiconductors, Inc. v. Fadriquela, we declared in Fuji that the repeated engagement under contract of hire is indicative of the necessity and desirability of the [employee’s] work in respondent’s business and where employee’s contract has been continuously extended or renewed to the same position, with the same duties and remained in the employ without any interruption, then such employee is a regular employee. (Samonte v. La Salle Greenhills, Inc., G.R. No. 199683, 10 February 2016)

•••••

BAR EXAM QUESTION

(Question X, Labor Law, 2018 Bar Exam)

Nonato had been continuously employed and deployed as a seaman who performed services that were necessary and desirable to the business of N-Train Shipping, through its local agent, Narita Maritime Services (Agency), in accordance with the 2010 Philippine Overseas Employment Administration Standard Employment Contract (2010 POEA-SEC). Nonato’s last contract (for five months) expired on November 15, 2016. Nonato was then repatriated due to a “finished contract.” He immediately reported to the Agency and complained that he had been experiencing dizziness, weakness, and difficulty in breathing. The Agency referred him to Dr. Neri, who examined, treated, and prescribed him with medications. After a few months of treatment and consultations, Nonato was declared fit to resume work as a seaman. Nonato went back to the Agency to ask for re-deployment but the Agency rejected his application. Nonato filed an illegal dismissal case against the Agency and its principal, with a claim for total disability benefits based on the ailments that he developed on board N-Train Shipping vessels. The claim was based on the certification of his own physician, Dr. Nunez, that he was unfit for sea duties because of his hypertension and diabetes.

a) Was Nonato a regular employee of N-Train Shipping? (2.5%)

SUGGESTED ANSWER:

No. Answer

Under labor law jurisprudence, seafarers are considered as contractual employees, and not regular employees. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. Rule

In the case at bar, Nonato had been continuously employed and deployed as a seaman or seafarer by N-Train Shipping. While he may be performing services that were necessary and desirable to the business of N-Train Shipping, through its local agent, Narita Maritime Services (Agency), this does not make him a regular employee as the status of seafarers as contractual employees has already been settled by jurisprudence. Apply

Thus, Nonato was not a regular employee of N-Train Shipping. Conclusion

•••••

BAR EXAM QUESTION

(Question VIII, Labor Law, 2017 Bar Exam)

Marciano was hired as Chief Engineer on board the vessel MN Australia. His contract of employment was for nine months. After nine months, he was re-hired. He was hired a third time after another nine months. He now claims entitlement to the benefits of a regular employee based on his having performed tasks usually necessary and desirable to the employer’s business for a continuous period of more than one year. Is Marciano’s claim tenable? Explain your answer. (3%)

SUGGESTED ANSWER:

No. Answer

Under labor law jurisprudence, seafarers are considered as contractual employees, and not regular employees. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. Rule

In the case at bar, Marciano was hired as a seafarer with the position of Chief Engineer on board the vessel MN Australia. While he may have performed tasks usually necessary and desirable to the employer’s business for a continuous period of more than one year, this does not make him a regular employee as the status of seafarers as contractual employees has already been settled by jurisprudence. Apply

Thus, Marciano’s claim was not tenable. Conclusion

•••••

g. Work-pool employees

2. Legitimate subcontracting vs. labor-only contracting

a. Elements

b. Trilateral relationship

c. Solidary liability

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

Share:

Mock Bar Exam Schedules

Test your knowledge. Practice answering questions, repeatedly and continuously — that’s how you prepare for the bar exam. Don’t mindlessly read throughout your bar exam review and expect you can effectively answer during your bar exam.

Related: Labor Law

C. Productivity standards

Frequency: ★☆☆☆☆ 1. CONCEPT An employer is entitled to impose productivity standards for its employees, and the latter’s non-compliance therewith

I. DOLE Secretary

Frequency: ★★★★★ 1. JURISDICTION a. Assumption of jurisdiction When, in his opinion, there exists a labor dispute causing or likely

Feedback

We value feedback.
Help us improve by with your suggestions and comments.
Thank you in advance

Syllabus-based

Reviewers

Updated

Suggested Answers

error: Content is protected.