MGT 162

Law on Business Organizations and Labor

ACTIVITY 4:
Labor Standards and Termination of Employment File

Give a brief definition of each of the following.

1. Regular employee

There are two kinds of regular employees (Labor Code, Article 294). Regular employees by nature of
work, that is, those who are engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer. Regular employees by years of service, that is, those who
have rendered at least one year of service, whether continuous or broken, with respect to the activity in
which they are employed.

The primary standard to determine regular employment is the reasonable connection between the
particular activity performed by the employee concerning the usual business or trade of the employer.
The test is whether the activity of the employee is usually necessary or desirable in the usual business or
trade of the employer.

2. Probationary employee

Probationary employment exists when the employee, upon his engagement is made to undergo a
trial period where the employee determines his fitness to qualify for regular employment, based on
reasonable standards made known to him at the time of engagement. The employer shall make known
to the employee the standards under which he will qualify as a regular employee at the time of his
engagement. Where no standards are made known to the employee at that time, he shall be deemed a
regular employee. Generally, probationary employment shall not exceed six months from the date the
employee started working. (Article 281, Labor Code)

3. Casual employee

There is casual employment where an employee is engaged to perform a job, work, or service which
is merely incidental to the business of the employer, and that job, work, or service is for a definite
period made known to the employee at the time of engagement. A casual employee is one whose work
is neither regular, project, or seasonal.

However, if a casual employee has worked for at least one year (whether continuously or not) he
becomes a regular employee but only concerning the activity in which he is employed, and his
employment will continue while that activity exists. Even though a casual employee, he is entitled to all
the rights and privileges, and is subject to the same duties and obligations, as is granted by law to
regular employees during the period of his actual employment.

4. Seasonal employee

Seasonal workers perform work that is seasonal in nature and are employed only for the duration of
one season (Article 294, Labor Code).

Seasonal workers who are rehired every working season are considered to be regular employees.
The nature of their relationship with the employer is such that during the off-season they are
temporarily laid off, but when their services are needed, they are re-employed. They are not, strictly
speaking, separated from the service but are merely considered as on a leave of absence without pay
until they are re-employed. Their employment relationship is never severed but only suspended. As a
result, these employees are considered to be in the regular employment of the employer.

However, it is not sufficient that the work performed is seasonal in nature. There must also be
evidence that the employee worked only for the duration of the season. For example, in a previous case,
the fact that the employees repeatedly worked as sugarcane workers for the employer for several years
established regular employment.

5. Project employee

A project employee is one whose employment has been fixed for a specific project or undertaking,
the completion or termination of which has been determined at the time the employee is engaged
(Article 294, Labor Code). It is not sufficient that an employee is hired for a specific project or phase of
work. There must also be a determination of, or a clear agreement on, the completion or termination of
the project at the time the employee is engaged.

The services of project employees are coterminous with the project. They can be terminated upon the
end or completion of that project, or a phase of the project, for which they were hired. The employer
has no obligation to pay them separation pay.

Jybell Anne Po, 2018-11328

MGT 162, Section 1
June 2, 2021