Types of Employment in the Philippines
There are five different types of employment in the Philippines and they are determined by the nature and/or existence of activities that an employee is required to perform. The employer establishes the terms and conditions of the employment contract, which should be structured according to the legal provisions set by Philippine labor laws and regulations.
Regular or Permanent Employment
Regular or Permanent Employment is when an employee performs activities that are usually necessary or desirable in the usual business or trade of the employer. They enjoy the benefit of security of tenure provided by the Philippine Constitution and cannot be terminated for causes other than those provided by law and only after due process is given to them.
However, some employers can require their new employees to undergo probationary employment before they can be qualified for regular employment. Although probationary employment is not a formal type of employment in the Philippines, it is widely practiced to help employers observe the skills, competence, and performance of new employees and determine if they are able to meet the reasonable standards to become permanent employees.
Under Article 281 of the Labor Code of the Philippines, the maximum length of probationary employment shall be six (6) months, and is counted from the date an employee started working. When the employment is not terminated after the six-month probationary period, it shall then be considered regular employment. It is important to note that the employer must notify the employee of the probationary period and the standards they must satisfy on or before the end of the probationary employment. If the employee is not properly notified of the arrangement, then they are prescribed by law to be classified as a regular employee from the time they started working for the company.
Term or Fixed Employment
Term or Fixed-Term Employment is when the employee renders service for a definite period of time and the employment contract must be terminated after such period expires. This type of employment is determined not by the activities that the employee is expected to perform but by the commencement and termination of the employment relationship.
Fixed-term employment is highly regulated and is subject to the following criteria:
- be voluntarily and knowingly agreed upon by the parties without any force, duress or improper pressure being brought to bear upon the employee and absent any vices of consent; or
- it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no dominance exercised by the former over the latter.
Project Employment is defined when an employee is hired for a specific project or undertaking and the employment duration is specified by the scope of work and/or length of the project. 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.
Seasonal Employment is when the work to be performed is only for a certain time or season of the year and the employment is only for that duration. This type is common practice to Retail, Food and Beverage, Hospitality and other related industries as augmentation to their workforce to cover for the demand during peak seasons.
A common practice for some employers is to hire “regular seasonal employees” who are called to work during peak seasons (e.g. Christmas season) and are temporarily suspended during off-seasons. These employees are not separated from service but are only considered on Leave of Absence (LOA) without pay until re-employed.
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.