04 POST-EMPLOYMENT

Question 1

Who is an employee?

Answer 1

An employee includes:
1. Any person in the employ of an emplyer;
2. Any individual whose work has ceased as a reuslt of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment (LC Art 219f)
3. One who has been dismissed from work, but the legality of the dismissal is being contested in a forum of appropriate jurisdiction (DO No 40-03 as amended by A-1 Rule 1 Sec (s))

Question 2

Who is an employer?

Answer 2

An employer includes:
1. One who employs the services of others, one for whom employees work and who pays their wages or salaries; or
2. Any person acting in the interest of an employer (DO No. 40-03 as amended by A-1 Rule I Sec. 1(f))

Question 3

What are the tests to determine the existence of employer-employee relationship?

Answer 3

In determining the existence of employer-employee relationship, the following tests may be applied:
1. Four-fold test (Phil. Global Communications, Inc. v. De Vera, GR 157214)
2. Two-tiered test (Francisco v. NLRC GR 170087)

Question 4

What is the four-fold test?

Answer 4

SPa-Dic
The four-fold test is a test to determine the existence of employer-employee relationship by considering the following factors:
1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of Dismissal; and
4. Power to Control the employee’s conduct

Question 5

What is the control test?

Answer 5

The control test, or means-and-method control test determines whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. The greater the supervision and control the hirer exercises, the more likley the worker is deemed an employee (Sonza v. ABS CBN)

Question 5

How can the elements of the four-fold test and the control test be established to prove employer-employee relationship?

Answer 5

There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or employment contracts, payrolls, organization charts and personnel lists serve and evidence of employee status (Tenazas v. R Villegas GR 192998)

Note; To operate against an employer, proof of existence of such power is enough. The power of control need not have been actually exercised. The control test calls merely for the existence of the right to control the manner of doing the work not the acutal exercise of the right.

Question 6

When does the two-tiered test apply in determining the existence of employer-employee relationship?

Answer 6

In certian cases, the control test is not sufficient to give a complete picture of the relatinoship between the parties, owing to the complexity of such a relationship where several positions have een held by the worker and where there is no written agreement or terms of reference to base the relationship on. The better approach would therefore be to adopt a two-tiered test involving:
1. The putative employe’s power to control the employee with respect to the means and methods by which the work is to be accomplished; and
2. The underlying economic realities of the activity or relationship. The proper standard of economic dependence which is an aspect to be considered under economic realities is whethr the worker is dependent on the alleged employer for his continued employment in that line of business.

Question 7

What is the relationship between jeepney and taxi drivers and their operators under the boundary system?

Answer 7

The relationship between jeepney owners/operators on one hand and jeepney and taxi drivers on the other under the boundary system is that of an ee-er relationship and not of lessor-lessee.

In the case of jeepney owenrs/operators and jeepney drivers, the former exercise supervision and control over the latter. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. The fact that the drivers do not receive fixed wages but get only taht in excess of the so-called “boundary” they pay to the owner/operator is not sufficient to withdraw the relationship between them from thatof employer and employee.

The existence of a vendor-vendee relationship between the operator and the dirver under a boundary-hulog system which is essentially a contract to sell does not negate the existence of an employer-employee relationship.

Question 8

What is the difference between employees and contractors?

Answer 8

Contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees.

The control test is the most important test our courts apply in distinguishin an employee from a contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well - the less control the hirer exercises, the more likely the worker is considered a contractor. (Sonza v. ABS CBN)

The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, rleative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contracto (Begino v. ABSCBN)

Question 9

What are the different kinds of employees?

Answer 9

RCP2-SF
1. Regular employees
2. Casual employees
3. Probationary employees
4. Project employees
5. Seasonal employees
6. Fixed-term employees

Question 10

Who is a regular employee?

Answer 10

An employee is deemed regualr when:
1. The employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer (LC Art. 295)
2. A casual employee is allowed to work for at least 1 year, whether the same is continuous or broken, with respect to the activity in which he is employed and while such activity exists (LC Art. 295); and
3. An employee is allowed to work after the lapse of the probationary period (LC Art. 296)

Question 11

What is the primary standard in determinig regular employment?

Answer 11

The primary standard in determining a regular employment is the reasonable connection between the particualr activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer.

Also, if the employer has been performing the job for at least 1 year, even if the performance is not continuous or merely intermittent, the law deems the reported and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business (De Leon v. NLRC 70705)

NOTE: The phrase “to perform activities which are usually necessary or desirable in the usual business or trade of the employer” includes performance of peripheral jobs indirectly related to the principal business of employer (Romares v NLRC 122927)

Question 12

q

May a part-time employee be deemed regular?

Answer 12

Yes. One’s regularity of employment is not determined by the number of hours one works but by the nature and by the length of time one has been in that particualr job (Perpetual Help Credit Coop Inc. v. Faburada)

Question 13

When shall a security guard be considered as a regular employee?

Answer 13

A security guard shall be considered as a regular employee when:
1. He/she is allowed to work after probationary period;
2. There is an absence of a valid probationary contract; or
3. He/she is affected by repeated hiring-firing-rehiring scheme for short periods of time, the aggregate duration of which is at least 6 months (DO No. 150-16, Sec. 3.3)

Question 14

What is a casual employment?

Answer 14

Casual employees - those who are not regular, project or seasonal aemployees (LC Art. 295); generally those performing activities not usually necessary or desribale in the employer’s usual business or trade are casual employees (GMA Network v. Pabriga)

LC IRR - 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 empl;oyer, and usch job, work or service is for a definit period made known to the employee at the time of the engagement

Question 15

What is probationary employment?

Answer 15

A probationary employment is where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of his engagement (Robinsons Galeria v. Ranchez).

A probationary employment gives the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he would be a proper and efficient employee (Canadian Opportunities Unlimited v. Dalanging)

Question 16

What is the duration of probationary employment?

Answer 16

Probationary employment shall not exceed 6 months from the date the employee started working (LC Art. 296). The computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following (Cebu Royal Plant v. Dep. Minister of Labor)

NOTE: In the case of Alcira v. NLRC, the SC ruled that 6-month period is reckoned form the date of appointment up to the same calendar date of hte 6th month following. However in Mitsubishi Motors Phils. Corp. v. Chrysler, the SC consttrued the 6-month period as 180 days applying Article 13 of the NCC.

Question 17

What are the exceptions to the rule that hte length of time of probationary employment is not exceeding 6 months?

Answer 17

ACE-569

1. When the employment is covered by an Apprenticeship agreement stipulating a longer period;
2. When the parties agree to a longer term by virtue of Company policy or when the same is required by the nature of the work
3. When there is an extension of the probationary period beyond 6 months agreed upon at or prior to the expiration thereof, in view of an act liberality on the part of the employer affording the employee a seond chance to make good after failing to prove his worth as ana employee
4. In case of teaching personnel:
   (a) 3 consecutive years in elementary and secondary levels (DO No. 88-10)
   (b) 6 consecutive regular semesters of satisfactory services for those in the tertiary level; and
   (c) 9 consecutive trimesters of satisfactory service for tertiary level offering a trimester

NOTE: The probationary period for academic school personnel shal lbe ocunted in terms of school years not calendary days

Question 18

How can a probationary employee become a regular one?

Answer 18

A probationary employee becomes a regular one in any of the following cases:
1. When a probationary employee is engaged to work beyond the probationary period of 6 months, as provided under Art. 296 LC
2. When a probationary employee is repeatedly rehired after her first 6 month probationary erpiod
3. When the employer extended a regular or permanent appointmetn to an employee once he finds that the employee is qualified for regular employment even before the expiration of the probationary period; or
4. When the employer did not apprise the probationary employee of hte standards by which he will qualify as a regular employee

Question 19

What are the grounds to terminate probationary employment?

Answer 19

The services of a probationary employee may be terminated in the following instances:
1. For any just cause;
2. For an authorized cause; or
3. When he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to hte employee at the start of hte employment (IRR LC R1B6S2&6c, as amended)

Question 20

What is required for valid severance of probationary employer-employee relationship on the ground of failure to qualify as a regular employee?

Answer 20

C-SEF

Valid severance of probationary employer-employee relationship outside the jsut and authorized causes presupposes that the employer had accomplished the ff:
1. The employer must Communicate to the employee that he is being hired on a probationary basis prior to the commencement of his employment;
2. The employer msut convey to the probationary employee the reaonsable Standards at hte start of the probationary employee and not in the course thereof or toward its end;
3. The employer must Evaluate the perofrmance of the probationary employee in relation to the duly communicated reasonable standards; and
4. The employee Fails to comply with these reaosnable standards before the completion of the probationary period (Tamson’s Enterprises Inc v. CA)

Question 21

What is a project employment?

Answer 21

A project empoyment is one where the employment is fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagemetn of the employee (Art. 295 LC)

Question 22

What is the principal test in determining whether particular employees are project employees?

Answer 22

The principal test is whether the project employees were assigned to carry out a specific project or undertaking, the duraiton and scope of which were specified at the time the employees are engaged for that project. (ALU-TUCP v. NLRC)

Question 23

What is a project in the context of project employment?

Answer 23

A project could refer to two distinguishable types of activities:
1. A particular job or undertaking that 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. Such job or undertaking begins and ends at the determined or determinable times; or
2. A particular job or undertaking that is not within the regular business of the corporation. Such job or undertaking msut also be identifiably separate and distinct form the ordinary or regular business operations of the employer. The job or undertaking alos beigins and ends at determined or determianble times (ALU-TUCP v. NLRC)

Question 24

Who are non-project employees?

Answer 24

Non-project employees are employees in the construction industry employed without reference to any particular construction project or phase of a project (DO No. 19-93 Sec. 2.1)

Question 25

What is a seasonal employment?

Answer 25

A seasonal employment is one where the work or services to be performed are seasonal in anture and the employment is for the duration of the season (LC Art 295). It is an employment arrangement where an employee is engaged to work during a particular season on an activity that is usually necessary or desirable in the usual business or trade of the employer (Universal Robina Sugar Milling Corp. v. Acibo)

Question 26

What are the conditions for an employee to be considered a seasonal employee?

Answer 26

To exclude the asserted “seasonal” employee from those classified as regular employees, the emplyer must show that:
1. The employee must be performing work or services that are seaosnal in nature; and
2. He had been employed for the duration of the season (Universal Robina Sugar Milling Corp. v. Acibo)

Question 27

When can a seasonal employee become a regular employee?

Answer 27

A seasonal employee can become a regualr employee when an employee is engaged in wokr or services seasonal in nature and the employment is more than one season (Hacienda Fatima v. National Federation of Sugarcane Workers). Moreover, the primary standard, therefore, of determining regular employment is the reasonable connection between the particualr activity performed by the employee in relation to the usual trade or business of the employer, i.e. whether the former is usually necessary or desirable in the usual trade or business of the employer (Abasolo v. NLRC)

Question 28

Since the work of regular seasonal employees are seasonal in nature, what happens to their employment during off-season?

Answer 28

The nature of their relationship with the employer is such taht during off-season, they are temporarily laid off but during the season they are reemployed or when their services are needed. They are not, strictly speaking, separated from the service but are merely considered as on leave og absence without pay until they are reemployed. Their employment relationship is never severed but only suspended. (Gapayao v. Fulo)

Question 29

Define fixed-term employment.

Answer 29

It is a contract of employment for a definite period that terminates by its own terms at the end of usch period (Brent School v. Zamora)

Question 30

When is there a valid fixed-term employment?

Answer 30

There is a valid fixed-term employment when the following requisites are present:
1. 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
2. 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 on the latter (Labayog v. MY San Biscuits)

Question 31

When may a fixed-term employee become a regular employee?

Answer 31

A fixed-term employee may become a regular employee when:
1. The employees were allowed to work beyond the fixed-term employment wihtou the benefit of a new employment (Viernes v. NLRC)
2. In case of successive renewals of fixed period contracts and there is reasonable connection between the particular activity performed by the employees in relation to the usual business or trade of the employer (Philips Semiconductor PHL Inc. v. Fadriquela)

Question 32

What is the Work Pool principle?

Answer 32

Members of a work pool from which a construction company draws its project employees, if considered employees of the construction company while in the work pool are non-project employees or employees for an indefinite period. If they are employed in a particualr project, the completion of the project or of any phase thereof will not mean severance of employer-employee relationship. However, if the workers in the work pool are free to leave anytime and offer their services to other employers then they are project employees employed by a construction company in a particualr propject or in a phase thereof. [Raycor Aircontrol System Inc v. NLRC]

Question 33

When can a project employee who is a member of a work pool acquire the status of a regular employee?

Answer 33

A project employee or a member of a work pool may acquire the status of a regualr employee when the following concur:
1. There is a continuous rehiring of project employees for the same task or nature of tasks even after cessation of a project; and
2. The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual busienss or trade of the employer.

NOTE: The no work no pay principle applies during the interval between the end of a project and the start of a new one.

Question 34

Who is a contractor?

Answer 34

Contractor - refers to any person or entity engaged in a legitimate contracting or subcontracting arrangement providing services for a specific job or undertaking farmed out by principal under a Service Agreement [DO No 174]

Question 35

Define contracting or subcontracting

Answer 35

Contracting or subcontracting - refers to an arrangement whereby a principal agrees to farm out to a contractor the performance or completion of a specific job or work within a definite or predetermined period, regardless of whether such job or owrk is to be performed or completed within or outside the premises of the principal.

Question 36

Define Labor-only contracting

Answer 36

Labor-only contracting - refers to arrangemetn where the contractor or subcontractor merely recruits, supplies or palces workers to perform a job or work for a principal, and the elements enuemrated in Section 5 hereunder are present.

Question 37

Who is a principal in the context of contracting?

Answer 37

Principal - refers to any natural or juridical entity, whether an employer or not, who puts out or farms out a job or work to a contractor

Question 38

What is substantial capital in contracting?

Answer 38

Substantial Cpaital - refers to paid-up capital stock/shares at least PHP 5million in the case of corporations, partnerships and cooepratives; in the case of a single proprietorship, a net worth of at lest PHP 5Million

Question 39

When is an arrangement considered labor-only contracting?

Answer 39

Labor-only contracting, which is totally prohibited, refers to an arrangement where:
a)
i. The contractor or subcontractor does not have substantial capital; or
ii. The contractor or subcontractor does not have investments in the form of tools, equipment, machineries, supervision, work premises, among others; and
iii. The contractor’s or subcontractor’s employees recruited and placed are performing activities which are directly related to the main business operation of the principal;

or

b) The contractor or subcontractor does not exercise the right to control over the performance of the work of the employee.

Question 40

When is the princiapl deemed the direct employer of the contractor’s or subcontractor’s employees?

Answer 40

In the event that there is a finding that the contractor or subcontractor is engaged in labor-only contracting under Sectoin 5 and other illicit forms of employment arrangements under Section 6 of these Rules, the principal shall be deemed the direct employer of the contractor’s or subcontractor’s employees.

Question 41

Permissible Contracting or Sucontracting

Answer 41

Contracting or subcontracting shall only be allowed if all the following circumstances concur:
1. The contractor or subcontractor is engaged in a distinct and independent business and undertakes to perform the jobo r work on its own responsibility, according to its own manner and method;
2. The contractor or subcontractor has substantial capital to carry out the job farmed out by the principal on his account, manner and method, investment in the form of tools, equipment, machinery and supervision;
3. In performing the work farmed out, the contractor or subcontractor is free form the control and/or direction of hte principal in all matters connected with the performance of hte work except as to the result thereto; and
4. The Service Agreement ensures compliance with all the rights and benefits for all the employees of the contractor or subcontractor under the labor laws.