The different kinds of employees

Our Labor Code and cases decided by the Supreme Court have identified several kinds of employees, namely:

1. Regular
2. Project
3. Seasonal
4. Fixed-term
5. Casual
6. Probationary

Regular employee

Article 295 of The Labor Code of the Philippines provides for the most common kind of employee, the regular employee. The provisions of a written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be “regular” where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.

The exception to the “regular” 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 or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

Project employee

Project employees are those 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 the project employee may be lawfully terminated upon the completion of the project or phase. However, the employer must prove:

a. the employee was hired to carry out a specific project or undertaking, and
b. the employee was notified of the duration and scope of the project.

As a safeguard to circumvention and arbitrary use of the word “project”, employers must not only prove that the duration and scope of the employment were specified at the time the employees were engaged but also the existence of the project. (Minsola v. New City Builders, Inc. and Engr. Fajardo, G.R. No. 207613, January 31, 2018)

The “project” wherein the project employee is hired may consist of a job or undertaking that is within the regular or usual scope of business of the employer but which must be distinct, separate, and identifiable from the other undertakings of the company.

It is notable that the repeated and successive rehiring of a project employees do not make them regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee.

A project employee may become a regular employee when there is a continuous rehiring of project employees even after cessation of a project and the tasks performed by it are vital, necessary and indispensable to the usual business or trade of the employer. (GMA Network, Inc. v. Pabriga, et al., G.R. No. 176419, November 27, 2013)

There is such a thing as a “regularized project employee” which has been given judicial recognition by the Court but, this is not the same as a regular employee.

This is the principle of where there is created a project work pool where there is a continuous re-hiring by the employer for projects taken from a work pool of employees who perform specialized tasks and work. From this pool the employer shall avail of the services of the project employees in its other projects. This is dependent on the supply of manpower and the qualification and skills of the employee that is needed by the employer.

The court has clarified that this does not “coddle” labor as project or work pool employees who have gained the status of regular project employees are still subject to the “no work no pay” principle. (Carpio v. Modair Manila Co., Ltd., G.R. No. 239622, June 21, 2021)

Seasonal employee

Seasonal employees as those whose work or engagement is seasonal in nature and the employment is only for the duration of the season. (Art. 295, Labor Code)

Seasonal employees employed for only one season remain as seasonal employees. Those called to work from time to time are considered as regular seasonal employees. They do not perform work during the off-season and are only temporarily laid off or on leave until re-employed.

However, in cases where seasonal employees are made to work during off-season such as for upkeep and maintenance of the equipment for use during the season, their repeated engagement may show the necessity and desirability of their work to the company’s business and, therefore, they may be considered by the courts as regular employees. (Universal Robina Sugar Milling Corp v. NAMA-URSUMCO-NFL, G.R. No. 224558, Nov 28, 2018)

Fixed-term employee

Fixed term employment is not expressly mentioned in the Labor Code. Nevertheless, the Supreme Court ruled in a case that such a contract, which specifies that employment will last only for a definite period, is not per se illegal or against public policy.

Fixed-term employment is not the same as project employment as the latter requires a project. On the other hand, the duration of a fixed-term employment is agreed upon by the parties which may be any day certain, which is understood to be “that which must necessarily come although it may not be known when.

The decisive determinant in fixed-term employment is not the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of the employment relationship.

To prevent circumvention of the rights of the employee to security of tenure, a fixed term employment must meet the following criteria:

a. 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; or
b. It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

(GMA Network, Inc. v. Pabriga, et al., G.R. No. 176419, November 27, 2013)

Casual employee

Employees that are not regular, project, seasonal or fixed term, may be deemed as a casual employees. (Art. 295, Labor Code)

Note however, that the Labor Code provides that 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.

In University of Santo Tomas v. Samahang Mangagawa ng UST, et al., G.R. No. 184262, the Supreme Court explained that the law provides for two types of regular employees: (a) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (b) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed.

Probationary employee

The Labor Code also provides for probationary employees. A probationary period is implemented in order for the employer to observe and evaluate an employee to determine whether it is sufficiently skilled, competent and qualified for the position.

Their employment, as a rule, shall not exceed six months from the time they start work. A probationary employment must be covered by a written agreement and the reasonable standards to qualify as a regular employee which must be made known to the employee at the start of the employment.

A probationary employee made to work after the six month period is considered as a regular employee.

(The author, Atty. John Philip C. Siao, is a practicing lawyer and founding Partner of Tiongco Siao Bello & Associates Law Offices, an Arbitrator of the Construction Industry Arbitration Commission of the Philippines, and teaches law at the De La Salle University Tañada-Diokno School of Law. He may be contacted at [email protected]. The views expressed in this article belong to the author alone.)