• Contractual workers not considered regular employees

    Persida Acosta

    Persida Acosta

    Dear PAO,
    My husband and his cousin were employed as truck drivers of a logistics company. They deliver milk and other similar products all throughout the Philippines. They had a three-year contract which started in February 2012 up to February 2015. Sometime in December 2014, rumors in their company were circulating that the two of them were involved in stealing some company merchandise. Although their supervisor talked to them, no formal investigation was made.

    Last March of this year, they were no longer allowed to enter the company premises. The guards said that they have been terminated already. So now my husband and his cousin are contemplating on filing a labor complaint for illegal dismissal against their company because they believe that they should be considered regular employees since they have been with the company for several years now. As such, their company cannot simply terminate them without proper cause and investigation. We just want to get your advice if they should pursue the filing of their labor complaint.

    Dear Pami,
    Article 280 of Presidential Decree (P.D.) No. 442, as amended, otherwise known as the Labor Code of the Philippines, defines regular employees as those who are 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 the situation that you have presented before us, it may very well be said that the tasks of your husband and his cousin, being truck drivers, are necessary or desirable in the usual business or trade of their employer as it is engaged in logistics or actual distribution of products to their clients. However, they cannot be considered as regular employees, notwithstanding the fact that they have been rendering services to their company for three years because there exists a contract between them and their former company which particularly stipulates the period of their employment, that is, from February 2012 up to February 2015. They are, thus, considered to belong to the exception to the rule as provided in the definition of regular employees mentioned above.

    Accordingly, it is justified for the security guards of their former company not to allow them to enter the company premises starting March 2015 as their contract of employment is deemed to have terminated at the end of February 2015. In view thereof, it is not advisable to pursue a labor complaint against their former employers as this may result ino an unfavorable outcome for your husband and his cousin.

    We further take note of the ruling of the Supreme Court in the case of Labayog vs. M. Y. San Biscuits, Inc. (494 SCRA 486, G.R. No. 148102, July 11, 2006):

    “x x x Where the duties of the employee consist of activities which are necessary or desirable in the usual business of the employer, the parties are not prohibited from agreeing on the duration of employment. Article 280 does not proscribe or prohibit an employment contract with a fixed period provided it is not intended to circumvent the security of tenure.

    Two criteria validate a contract of employment with a fixed period: (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 on the employee and without any circumstances vitiating consent or, (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. x x x

    Each contract provided for an expiration date. Petitioners knew from the beginning that the employment offered to them was not permanent but only for a certain fixed period. They were free to accept or to refuse the offer. When they expressed their acceptance, they bound themselves to the contract. x x x”

    We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

    Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net


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      Dapat sana pag-aralan muna ang CONTRACT.

      Ang tanong dito,

      (1) was the contract voluntarily agreed?
      (2) does it operate on more or less equal terms?

      Kung may doubt dito, pwede ilaban ito as illegal dismissal because the contract circumvents Art 280 of the labor code. The law favors the interests of the laborers as against the employers.

      Also, the point here is logistics company yan. One could argue that the position of a driver is usually necessary and desirable in the trade or business of the employer (pursuant to Art. 280, Labor Code).

      Check out this case:

      CIELO vs NLRC (G.R. No. 78693. January 28, 1991)

      —>>>It appears from the records that all the drivers of the private respondent have been hired on a fixed contract basis, as evidenced by the mimeographed form of the agreement and of the affidavit. The private respondent merely filled in the blanks with the corresponding data, such as the driver’s name and address, the amount received by him, and the date of the document. Each driver was paid through individual vouchers 4 rather than a common payroll, as is usual in companies with numerous employees.

      Under these arrangements, the private respondent hoped to be able to terminate the services of the drivers without the inhibitions of the Labor Code. All it had to do was refuse to renew the agreements, which, significantly, were uniformly limited to a six-month period. No cause had to be established because such renewal was subject to the discretion of the parties. In fact, the private respondent did not even have to wait for the expiration of the contract as it was there provided that it could be “earlier terminated at the option of either party.”


      The private respondent is engaged in the trucking business as a hauler of cattle, crops and other cargo for the Philippine Packing Corporation. This business requires the services of drivers, and continuously because the work is not seasonal, nor is it limited to a single undertaking or operation. Even if ostensibly hired for a fixed period, the petitioner should be considered a regular employee of the private respondent, conformably to Article 280 of the Labor Code providing as follows:

      Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the 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 necessarily 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 services to be performed is seasonal in nature and the employment is for the duration of the season.

    2. John Albert Torre on

      @jhun..wala tyong magagawa..we’re government of laws not of men..nagkataon lang na pabor ang sitwasyon sa employer
      hindi sa employee..

    3. Ano ba yan? Talagang anti-labor ang gubyerno ng Pinas. Bakit? Kc me sinusunod dapat na probationary period say for 90 days. After this period at pumasa sa employer ang performanc eng employee eh mare-regular na dapat. Meaning, tatlong taon ang kontrata na parang 3 years under probation ung employee???? Besides their contracts stipulating their length of employment paano o ano ba ang basehan o dapat gawin para MAGING REGULAR ang isang isang kawawang empleyado? Kaya ung mga kapitalista eh ginagago ang mga empleyado na kung tawagin eh “555” o “endo” dahil pabor sa kanila ang batas.Matindi talaga batas sa atin. Sana masagot mo ito Ms.Pao. wag nmn artikulo sa code ang isagot mo kasi pag dyan eh puro tama ang employer at mali ang mga empleyado…ika nga eh “Labor Code of Employers”. Bakit si Rep. Seneres eh gigil na gigil dyan sa endo-endo at kayo eh puro ayon sa employer? BAKET?????