Regular Employment Contract

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  • P.D. 442, otherwise known as the Labor Code, Republic Act No. 386, Omnibus Rules Implementing the Labor Code, and Supreme Court Decisions, are the legal bases.
  • 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.
  • There are those deemed regular employees due to the employer’s non-compliance with labor laws.
  • Regular employees have no specific end to their employment unlike non-regular employees.
  • When in doubt, employment contracts are interpreted in favor of the employee.

Legal basis

The following are the legal bases:

  • P.D. 442, otherwise known as the Labor Code;
  • Omnibus Rules Implementing the Labor Code; and
  • Supreme Court Decisions.

Concept

A regular employment contract is an employment arrangement between an employer and a regular employee.

A regular employee is one who has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, as defined under the Labor Code. (Article 295, Labor Code; cf. Section 5, Rule I, Book VII, Omnibus Rules & Regulations of the Labor Code)

“Under the definition, 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.” (Universal Robina Sugar Milling Corporation v. Acibo, G.R. No. 186439, 15 January 2019)

“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.” (Abasolo v. NLRC, La Union Tobacco Redrying Corporation, G.R. No. 118475, 29 November 2000)

Deemed regular, due to non-compliance of labor law

The law deems the following as regular employees due to non-compliance with labor laws and regulations by the employer:

1. Probationary employees who have not been informed of the standards/criteria for regular employment on/before the first day of work;

2. Probationary employees who are required or allowed to continue work after the probationary period;

3. Casual employees whose employment exceeded 12 months – they are regular insofar as the position they hold;

4. Project employees who have been hired for a project which turns out to be non-existing;

5. Project employees who have been continuously rehired even after the cessation of a project and the task performed are vital, necessary, and indispensable to the usual business or trade of the employer;

6. Seasonal employees who are required or allowed to continue to work after the season;

7. Fixed-term employees whose consent was vitiated into employment or where it satisfactorily appears that the employer and employee did not deal with each other on more or less equal terms; and

8. Learners who have rendered at least two months of service but has been dismissed without just cause.

Regular vs. non-regular

Regular employees have no specific end to their employment unlike non-regular employees.

Non-regular employees include probationary, casual, project, seasonal, and fixed term. Their employment has a specific end. For probationary employees, it is the end of their probationary period wherein their employment either expires for failing to pass/qualify for regular employment or their employment continues for passing/qualifying for regular employment. For casual employees, their employment should not exceed 12 months. For project employees, their employment is co-terminous with the undertaking/project. For seasonal employees, their employment should not exceed beyond the season. For fixed term, their employment should not exceed the fixed term or period.

“Even while the language of law might have been more definitive, the clarity of its spirit and intent, i.e., to ensure a ‘regular’ worker’s security of tenure, however, can hardly be doubted. In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the business or trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the normal activities required in carrying on the particular business or trade. But, although the work to be performed is only for a specific projector seasonal, where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the employer. The employment of such person is also then deemed to be regular with respect to such activity and while such activity exists.” (Basan v. Coca-Cola Bottlers Philippines, G.R. No. 174365-66, 04 February 2015)

Default status of employment is regular

Regular employment is the default employment status unless proven otherwise by the employer. Otherwise stated, it is the employer who has the burden of proof that the employee is not a regular employee. This is done through showing of documentation, such as the employment contract.

When in doubt, interpreted in favor of the employee

“In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.” (Article 1702, Civil Code)

References

  • Presidential Decree No. 442, a.k.a. Labor Code;
  • Omnibus Rules Implementing the Labor Code; and
  • Jurisprudence or Supreme Court Decisions