6 Common Employee Classifications in Philippines as to Security of Tenure

By: Deeryl Jade L. Bantilan

Philippines has its own distinctive rules related to employment as compared to other countries. Philippines adopts a pro-labor policy relative to labor protection and guaranteed security of tenure. In the Philippines, employers cannot just simply terminate employees, unless, for just and authorized causes as enumerated in the Labor Code of the Philippines, and upon the prescribed due process in terminating employee in the Philippines in contrast to foreign countries where their rules allow employment at will of employer. Violation of such security of tenure could mean illegal dismissal that may entail liability for backwages, reinstatement, damages, and other monetary award.

This article would discuss the 6 common employee classification as to security of tenure in the Philippines for your easy reference on termination of employer-employee relationship in the Philippines.

1. Probationary Employment in the Philippines

Probationary employment in the Philippines is like a tentative employment for not more than six (6) months to determine whether or not the employee would qualify for regular or permanent employment in the Philippines based on reasonable standards made known to the probationary employee in the Philippines at the start of the employment. Probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he/she will become an efficient and productive employee.

Once the employer determines qualification, or when work continues after the expiration of the 6 months period (unless agreed upon to be extended on complex jobs), the probationary employee will become regular or permanent employee.  Should there be no reasonable standard made known at the start, it could also be deemed a regular employee. During the probationary term, the employee cannot be terminated without a cause and due process and should it fail to qualify for regularization, employment automatically terminates.

2. Regular or Permanent Employment in the Philippines

In the Labor Code of the Philippines, an employee who has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer is deemed a regular or permanent employee, unless, they fall on other employee classification like fixed term employment, seasonal, or probationary. In normal practice, employee undergoes probationary employment and gets regularization upon qualification within or after the six months period. Regular employees in the Philippines cannot be terminated for causes other than those just and authorized causes provided by law and only after due process is given to them.

3. Fixed Term or Contractual Employment in the Philippines

An employee under fixed employment, also known as contractual employment is the one who is engaged to perform a job, work or service for a pre-determined date of completion, or where the employment has a specific date of termination. A fixed-period employee may be engaged in an activity which is necessary in the business, provided that it is agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent of any other circumstances vitiating his consent or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance exercised by the former over the latter. During the term of the contract, the fixed term employee in the Philippines cannot be terminated for causes other than those just and authorized causes provided by law and only after due process is given to them. The practice of continuous rehiring or “endo” (end contract) is being discouraged as it seem to circumvent the rules and prejudice the employees rights.

4. Casual Employment

An employment shall be deemed to be casual, when an employee is engaged to perform a job, work or service which is not usually necessary or desirable to the business of the employer, and such job, work or service is for a definite period made to known to the employee at the time of his/her engagement.

If a casual employee has rendered at least one (1) year of service in the same company, whether such service is continuous or broken, the casual employee in the Philippines shall be considered a regular employee with respect to the activity employed. Casual employee enjoys security of tenure while such activity continues and cannot be terminated for causes other than those just and authorized causes provided by law and only after due process is given to them.

5. Project Employment in the Philippines

Project employee has been defined to be one whose employment has been fixed for a specific project or undertaking and will continue until completion of the specific project or undertaking. Project employees in the Philippines will automatically terminate upon the end or completion of that project for which they were hired but cannot be terminated for causes other than those just and authorized causes provided by law and only after due process is given to them prior to completion of such project or undertaking.

A project employee may acquire the status of a regular employee when they are continuously rehired after the completion of the project or when the tasks they perform are vital, necessary, and indispensable to the usual business or trade of the employer. This is however, a case to case basis.

6. Seasonal Employment in the Philippines

A seasonal employee is one whose work or service to be performed is seasonal in nature and the employment is for the duration of season. They are normally called to work during peak season (e.g. Christmas season) and are not paid during off-season under no-work-no-pay principle. In between seasons, they employment is considered suspended, and gets no pay.

They also enjoy security of tenure and cannot be terminated until the end of the season for which they are hired and should they be hired continuously from season to season, they could be considered as regular employees with respect to the activity they are called in.

Summary

The above enumeration are classifications of employees as to security of tenure and are not all inclusive. There are other employee classifications in the Philippines depending on the criteria of classification like as to level of responsibility, functions, or entitlement – managerial, supervisory, and rank-and-file employees. Extra care should be exercised in terminating employee based on their classification as to security of tenure in the Philippines.

Deeryl Jade L. Bantilan  is a graduate of Bachelor of Science in Business Administration major in Human Resource Development and Management from POWER School of Technology – Tanza, Cavite at the top of her class as Cum Laude. He started her career as an HR Associate in an English Tutorial Center for Japanese professionals in Makati until she was promoted as HR Manager where she was widely exposed to different facets of HR functions such as on recruitment, compensation and benefits administration, policy implementation and development, and employee relates and performance management. She has the passion for teaching as she was formerly with the academe, her Alma Mater handling subject related to her course and is currently the HR Manager of G. Pagaspas Partners & Co., CPAs, a Makati based full service arm accounting firm.

Disclaimer: This article represents personal views of the author intended for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred labor or legal consultant for the specific details applicable to your circumstances. For comments, you may also please send mail at info(@)taxacctgcenter.ph, or you may post a question at Tax and Accounting Center Forum and participate therein.