After reading this article regarding regularization you may also read: Knowing the Difference Between Probationary Employment and Project Employment
Under Article 295 (280) of the Labor Code of the Philippines, regardless of the provisions of a written agreement or 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, except 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.
In addition, 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.
A careful reading of the substantially cited provision of the Labor Code would reveal that, regular employment may be attained if any of the two (2) badges of regularization is present, namely:
- Nature of work – the employee has been engaged to perform activities which are usually or desirable in the usual business or trade of the employer.
- Period of service – the employee has rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity in which he is employed and his employment shall continue while such activity exists.
Clearly, therefore, the nature of the employment does not depend solely on the will or word of the employer or on the procedure for hiring and the manner of designating the employee. Rather, the nature of the employment depends on the nature of the activities to be performed by the employee, considering the nature of the employer’s business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its continued existence (Universal Robina Sugar Milling Corporation vs. Acibo 713 SCRA 596, January 15, 2014).
However, in the 2018 case of Minsola vs. New City Builders, Inc. (G.R. No. 207613, 853 SCRA 466, January 31, 2018), the Supreme Court took note of the unique characteristics of construction firms.
In construction industry, the laborer’s performance of work is truly necessary and vital to the employer’s construction business, and more often than not, employees are repeatedly rehired, however these do not automatically lead to regularization. In the said case, the Court explained that the existence and application of the badges of regularization will not be fair if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction workers, is that work depended on decisions and developments over which construction companies have no say.
Additionally, in Malicdem, et al. v. Marulas Industrial Corporation, et al. (728 Phil. 264 (2014), the Court took judicial notice of the fact that in the construction industry, an employee’s work depends on the availability of projects. The employee’s tenure is not permanent but coterminous with the work to which he is assigned.
Both the above cited case explained that, it would be extremely burdensome for the employer, who depends on the availability of projects, to carry the employee on a permanent status and pay him wages even if there are no projects for him to work on. An employer cannot be forced to maintain the employees in the payroll, even after the completion of the project. To do so would make the employee a privileged retainer who collects payment from his employer for work not done. This is extremely unfair to the employers and amounts to labor coddling at the expense of management (Malicdem, et al. v. Marulas Industrial Corporation).
It must be noted that, in labor cases the courts are tasked with the delicate act of balancing the employee’s right to security of tenure vis-a-vis the employer’s right to freely exercise its management prerogatives. To preserve this harmony, the court recognizes the right of an employer to hire project employees, subject to the correlative obligation of sufficiently apprising the latter of the nature and terms of their employment, and paying them the wages and monetary benefits that they are lawfully entitled to (Minsola vs. New City Builders, Inc. (G.R. No. 207613, January 31, 2018).
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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