Employment Status

The most common reason of conflict between employer and employee is the real employment
status of the employee hence, before getting hired by an employer, it is important for every
employee to determine the type of employment they have. Each employment status is different
from the privileges and rights. A basic concept in labor law is that of “employer-employee
relationship”. When is an employer-employee relationship deemed to exist? In resolving the
issue of employer-employee relationship the Supreme Court made use of the four-fold test:
“Jurisprudence is abound [sic] with cases that recite the factors to be considered in determining
the existence of employer-employee relationship, namely: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s
power to control the employee with respect to the means and method by which the work is to be
accomplished. The most important factor involves the control test. Under the control test, there
is an employer-employee relationship when the person for whom the services are performed
reserves the right to control not only the end achieved but also the manner and means used to
achieve that end.
The above-mentioned test is important in order to determine the existence of relationship
given the fact that there are different kinds of employment in our country. It is important for the
employees to be fully-aware of their employment status in order to know their rights and the
company’s limitations. Under Labor Code of the Philippines, it contemplates kinds of
employees, namely, regular employment, project employment, seasonal employment, casual
employment, probationary employment and fixed-period employment, however, the last
mentioned kind was not provided and mentioned under the law but it is not prohibited by law,
hence there are employers still embrace this kind of employment.
1. Regular Employment. Refers to the arrangement whereby the employee “has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer.” The standard that determines the regular
employment is the reasonable connection between the activity performed by the
employee and the usual business or trade of the employer. There are two (2) kinds of
regular employees: a.) employees engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer. The test to
determine the regular status of an employee is whether the employee performs work
which is usually necessary or desirable in the business of the employer; and b.)
employees who have rendered at least one year of service, whether such service is
continuous or broken, with respect to the activity in which they are employed. The
controlling test in this arrangement is the length of time during which the employee is
engaged. Regular employees are legally adequately protected employees. Such
employees enjoy established labor standards such as those minimum wages, hours of
work, rest days, overtime pay, etc. They also enjoy freedom of association and collective
bargaining. More importantly, this type of workers enjoys security of tenure guaranteed
by the Philippine Constitution. They cannot be removed from their employment except
for just or authorized causes.

2. Project Employment. Project employment is one where parties’ contract employment

for a specific project or undertaking, the completion or termination of which has been
 determined at the time of the engagement of employee, by entering into such a contract,
an employee is deemed to understand that his employment is coterminous with the
project. There are two requirements so that the engagement is removed from the
presumption of regularity of the employment: a.) the employee was assigned to carry out
a specific or undertaking; and b) the duration and scope of which were specified at the
time the employee was engaged for such project. The term “project” can be determined
in two ways. When the project is within the regular or usual business of the employer
company, BUT which is distinct and separate, and identifiable as such, from the other
undertakings of the company. Also this refer to a particular job or undertaking that is not
within the regular business of the corporation. Nevertheless, the controlling event is the
employee was assigned to a project which begins and ends at determined or
determinable times. The length of service is not a controlling factor in determining the
nature of one’s employment. If the contract presented by the employer to the project
employee is more than one year it does not necessarily mean he/she is already a
regular employee, hence the employer must be diligent in informing the employee that
he was a project employee only. In the absence of specification as to duration and scope
of the employment that will make an employee a regular one.

3. Seasonal Employment. One a person’s contract employment for work or service is one

seasonal in nature or lasting for the duration of the season, it is considered a seasonal
employee. The elements are: the employee must be performing work or services that
are seasonal in nature; and that he had been employed for the duration of the season,
even when employees are denominated as “seasonal workers” if they 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. However, 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.

4. Casual Employment. Refers to any other employment arrangement that does not fall
under any or on the categories of regular or project/seasonal. There is Casual
Employment when an employee performs work that is not usually necessary or primarily
related to the employer’s business or trade. The definite period of employment should be
made known to the employee at the time they started rendering service. If the employee
has rendered service for at least one (1) year in the same company, whether the casual
employment is continuous or not, they shall be considered a regular employee with
respect to the activity they are employed and will continue rendering service while such
activity exists.

5. Probationary Employment. One who is on trial by an employer during which the

employer determines whether or not he is qualified for permanent employment. In
general, the period is for 6 months, however, it can be less than 6 month but cannot
 exceed 6 months, otherwise, employee will be considered as regular. It is also
indispensable that the employer informs the employee, he will qualify as a regular.
6. Fixed-Term Employment. Contractual or fixed term or employment for a term is an
arrangement 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.