EMPLOYERS SHOULD FOCUS ON HAVING VALID EMPLOYMENT AGREEMENTS AND NOT WORRY ABOUT “CONTRACTUALIZATION”

            One of the major thrusts of the current administration is the elimination of the so-called “contractual” employees.

Technically, “contractual” as an employment status is not found in the Labor Code. Forms and status of employment in the law are regular, probationary, project, casual, and seasonal. There is a fixed-term employment contract which the Supreme Court recognized in the case of Brent School, Inc. vs. Zamora (G.R. No. L-48494, February 5, 1990). The basis of fixed-term employment is the Civil Code.

Brent School case states that under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with pre-determined dates of completion; they also include those to which the parties by free choice have assigned a specific date of termination

But there is no such thing as “contractual” employment. Most businessmen and HR practitioners refer to this term however, to mean temporary employment or one that is not regular.

Under the law and jurisprudence, employment forms that are not regular include project, seasonal, casual and fixed-term. Does this mean that when the administration wants to abolish “contractual” it means the executive department can prohibit the project, seasonal, casual, and fixed-term employment engagements? No.

It should be borne in mind that these forms of employment are found in the Labor Code which being a law is a creation of Congress. The Executive Department cannot legislate a law and remove these forms of employment from the Labor Code. Only the legislative branch can amend or repeal these provisions of law. The Department of Labor can only promulgate implementing rules and regulations but cannot expand or eliminate congressional enactments.

Thus, employers who would employ workers as project, seasonal, casual, or fixed-term have legal bases to do so. The validity of these engagements are not diminished by the claim that some government officials do not support “contractualization.”

However, companies should take extra care in implementing these employment agreements as each of them have requisites and/or elements for their validity. Take for instance the project employment, it has its own peculiar rules which if the employer fails to observe would render the employment status regular.

Hence, employers should focus on making employment contracts valid regardless of whether or not they pertain to regular or temporary employment.

Craft Legally Defensible Employment Agreements