• Casuals become regular employees after a year

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    Acasual employee is only casual for one year. After one year, a casual employee automatically gets his regular status.

    A Collective Bargaining Agreement (CBA) between a multinational company and its collective bargaining agent, representing the company’s rank-and-file employees in Manila and Antipolo, expired in June 1998. The company and unions completed renegotiations of their CBA on 26 December 1998. Both parties signed a Memorandum of Agreement (MOA), providing for salary increase as well as the “regularization of contractual, casual, and/or agency workers who have been working with [the company]for more than one year.” The MOA was incorporated to form part of the 1998-2001 CBA and was ratified by the employees of the company. Pursuant to the MOA, 61 casual, contractual, or agency employees were regularized and filled up vacant positions.

    The newly regularized employees proceeded to demand that their salaries and other benefits retroact to 1 December 1998 in accordance with the MOA. Unfortunately, the company refused their demands on account that the date of effectivity of their regularization was in fact 1 May 1999. The employees then filed a complaint with the National Labor Relations Commission (NLRC) for violations of the MOA.

    The NLRC dismissed the complaint, ruling that “under the MOA dated 26 December 1998, the 61 regularized employees are not entitled to their claims for the P60 per day salary increase, mid-year gratuity pay of P5,000 one sack of rice, and overtime and thirteenth month differentials effective December 1, 1998 onward.” Thus, the regularized employees were not entitled to a retroactive application of the MOA and could not receive the benefits amounting to P35,000 The Court of Appeals (CA) affirmed the NLRC.

    On appeal, the Supreme Court (SC) overturned the NLRC and CA. In fact, it ruled that the regularized employee’s were entitled to all the benefits granted to the regular employees since pertinent provisions of the MOA provided that a “non-regular employee (casual, contractual or agency worker) who has already served the company . . . for at least one (1) year shall be given priority in filling-up the (vacant) positions by converting his non-regular employment status to regular employment status, effective 1 December 1998.”

    The Court ruled that the date 1 December 1998, and not 26 December 1998, was what was clearly referred to as the effective date of regularization of casual employees, as properly relied on by the company. To rule otherwise would be “logically absurd that the company will only begin to extend priority to these employees on a date that has already passed, when in fact they have already extended priority to these employees by agreeing to the contents of the MOA and signing said agreement.”

    The SC also stressed that the 61 casual, contractual, or agency employees were all entitled to the benefits of regular employees regardless of the stipulation in the MOA because they had all been employed by the company for over one year. Article 280 of the Labor Code provides that “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.” Moreover, a casual employee is only deemed casual for one year. After that, the employee is automatically given regular status by operation of law (KASAMMA-CCO v. CA, G.R. No. 159828, 19 April 2006, J. Chico-Nazario).

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    1. What about the case of employees who have been casual/contractuals for more than 2 years in the government offices (their contracts were always renewed based on the recommendations of their supervisor before the end of their 6-months service contracts, some were even a casual/contractuals for more than 10 years)? Do they have the chance to be regular in status of employment or does it need to have a signed MOA? Please note that these sub-con employees are not and never be a member of the existing employees union as provided under the union’s by laws and therefore none will ever represent their case to the management.