ARTICLE 295. [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 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.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:  Provided, 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.

The Supreme Court (SC), in the case of Carpio vs. Modair Manila Co. Ltd., Inc.

[G.R. No. 239622, June 21, 2021] distinguished regular from project employment. According to the SC, as characterized, regular employment exists when the employee is:

(a) engaged to perform activities that are usually necessary or desirable in the usual business or trade of

the employer; or

(b) a  casual employee whose activities are not usually necessary or desirable in the employer’s usual business or trade, and has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed; while project employment exists when the employee is hired under a contract which specifies that the employment will last only for a  specific project or undertaking, the completion or tem1ination of which is determined at the time of engagement.

As regards security of tenure, regular employment may be terminated for just or authorized causes; whereas, for project employment, lawful dismissal is brought about by the completion of the project or contract for which the employee was engaged, unless terminated during the life of the project, in which case, only just or authorized causes may be invoked.

Regarding payment of backwages in cases of illegal dismissal, for regular employment, backwages are computed from the time of dismissal until reinstatement, if such is ordered, or until finality of the decision ordering separation pay, if reinstatement is infeasible; while for project employment, backwages are computed from the date of the termination of employment until the actual completion of the work.

Upon the employer lies the burden of proof to establish project employment by showing that:

(1) the employee was assigned to carry out a specific project or undertaking; and

(2) the duration and scope of which were specified at the time the employee was engaged for such project.

Moreover, the employer must also prove that there was indeed a  project undertaken. Failing these, the worker will be presumed a regular employee.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

Although the law and jurisprudence have been very emphatic in mandating the observance of hearing as part of the due process requirement, there are certain instances when hearing can be dispensed with. Further, caveat has to be made since there is also a decision holding that hearing is required in authorized cause.

At any rate, the following discussions make mention of the cases wherein there is severance of employment relationship and yet no hearing is required.

1. When there is an admission of guilt by the employee.

In the case of Philippine Pizza, Inc. vs. Bungabong the SC held that it is well settled that if the employee denies the charges against him, a hearing is necessary to thresh out any doubt.

But if the employee admits his responsibility for the act he was accused of, a formal hearing is no longer necessary.

There must be admission of guilt. If the employee merely narrated and explained what he did, without admitting his guilt, then conducting a hearing is required; otherwise, there is failure of due process and the dismissal may be declared illegal.

2. Admission by silence

An act or declaration made in the presence and within the hearing or observation of a party who does or says nothing when the act or declaration is such as naturally to call for action or comment if not true, and when proper and possible for him to do so, may be given in evidence against him.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

Silence constitutes an admission that fortifies the truth of the employee’s narration.

3. When termination is due to authorized cause

When termination is due to authorized causes under Article 298.

No hearing is required for the termination due to authorized causes or those grounds under Article 298 of the Labor Code, as amended.

But there must be at least one-month notice to the employee and a report to the DOLE for the same period prior to the effective date of the termination.

In employment terminations due to authorized causes, the due process requirement is not completely

done away with. Investigation and hearing need not be done by the employer. The reason is obvious, there is no need for investigation and hearing since no allegations of malfeasance or nonfeasance on the part of the employee have been made.

Thus, to require the employer to hold a hearing, at which the employee would have had the right to be present, on the business and financial circumstances compelling retrenchment and resulting in redundancy, would be to impose upon the employer an unnecessary and inutile hearing as a condition for legality of termination.

During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

It is better if before the hearing, the employee should be apprised in writing of the conference stating the time, date, place and the fact that he could bring along his counsel or support person if he so desires.

What if despite such notice the employee refused or did not attend the hearing/conference? Does that mean failure to accord hearing?

No, since the employee was already given an opportunity to such hearing/conference by sending an invitation to him. If he refused to participate despite due notice, that is not the fault of the employer. It

is best practice for employers to have an attendance sheet or record of such meeting showing the persons who are supposed to attend with their signature beside their name.

It would appear that in such attendance record the space corresponding the name of the employee who failed or refused to participate despite due notice would bear no signature. This can be used as evidence to prove that ample opportunity was given to the worker. It is not required that an actual hearing should occur as long as ample opportunity was given.

The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek reconsideration of the action or ruling complained of.

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

In a regular trial court procedure, the parties present evidence in the manner provided by the Rules of Court, except in certain instances where these requirements are not mandatory. The parties are subjected to direct, cross, re-direct and re-cross examinations. The technical rules of evidence apply in regular procedure but not strictly in labor cases, subject to certain exceptions.

All the more that such kind of court jostle does not govern the hearing or conference initiated by the employer for the dismissal of the employee.

Notice and hearing in termination cases do not connote full adversarial proceedings as elucidated in numerous cases decided by the court. The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side.

In the case of IBM Philippines, Inc. vs. NLRC, the Court held that ample opportunity means every kind of assistance that management must accord to the employee to enable him to prepare adequately for his defense.

Marriage of employee cannot be prohibited by employer

No-spouse policies may come in two types: The no-spouse employment policies and anti-nepotism employment policies. The first one bans only spouses from working in the same company while the second bans all immediate family members, including spouses, from working in the same company.

There is no doubt that the management, as part of its prerogative, can impose rules, regulations and policies as long as these are not contrary to law, morals, good customs, public order or public policy. These rules, regulations and policies should be reasonable and lawful.

Hence, while it is true that the parties to a contract may establish any agreements, terms, and conditions that they may deem convenient, the same should not be contrary to law, morals, good customs, public order, or public policy.[1]

Can the employer prohibit marriage or dismiss employees who contract marriage during employment?

In the case of PT&T vs. NLRC,[2] the Supreme Court ruled that such policy is not valid. In said case, a company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogative.[3] The Court ratiocinated that PT&T’s policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment, but it likewise assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and inalienable right.

The same ruling was made in Zialcita, et al. vs. Philippine Air Lines,[4] a decision that emanated from the Office of the President, a policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be automatically separated from the service once they marry was declared void, it being violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against married women.

Gualberto, et al. vs. Marinduque Mining & Industrial Corporation[5] considered as void a policy of the same nature.  In said case, the company, in dismissing from the service the complainant, invoked a policy of the firm to consider female employees in the project it was undertaking as separated the moment they get married due to lack of facilities for married women.  The employer further claimed that complainant was employed in the project with an oral understanding that her services would be terminated when she gets married.  Branding the policy of the employer as an example of “discriminatory chauvinism” tantamount to denying equal employment opportunities to women simply on account of their sex, the appellate court struck down said employer policy as unlawful in view of its repugnance to the Civil Code, Presidential Decree No. 148 and the Constitution.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

In a 2006 case of Starpaper Corporation vs. Simbol,[6] the question was whether the policy of the employer banning spouses from working in the same company violates the rights of the employee under the Constitution and the Labor Code or is a valid exercise of management prerogative.

The Court held that the company failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business operations. Neither did it explain how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere fear that employees married to each other will be less efficient.  The Court said that if it were to uphold the questioned rule without valid justification, the employer could create policies based on an unproven presumption of a perceived danger at the expense of an employee’s right to security of tenure.[7]

Disparate impact and disparate treatment

The case of Star Paper Corporation vs. Simbol[8] brought about the concepts of disparate impact and disparate treatment on employment discrimination into our shores.

In disparate treatment analysis, the complainant must prove that an employment policy is discriminatory on its face. No-spouse employment policies requiring an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory. For example, an employment policy prohibiting the employer from hiring wives of male employees, but not husbands of female employees, is discriminatory on its face.[9]

While in disparate impact, complainant must prove that a facially neutral policy has a disproportionate effect on a particular class. For example, although most employment policies do not expressly indicate which spouse will be required to transfer or leave the company, the policy often disproportionately affects one sex.[10]

Thus, when the Court was confronted with argument that the employer’s policy will apply only when one employee marries a co-employee, but they are free to marry persons other than co-employees, the Court held that the questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory. The only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of the employer to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company.[11]

Policy prohibiting marriage with employees of competitor was held valid

In the case of Duncan Association of Detailman-PTGWO and Pedro Tecson vs. Glaxo Wellcome Philippines, Inc.,[12] the Court passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. It was held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. The Court considered the prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees reasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the assailed company policy, the Court recognized that Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.

[1] Art. 1306, Civil Code, cited in PT&T vs. NLRC, G.R. No. 118978, May 23, 1997.

[2] G.R. No. 118978, May 23, 1997.

[3] See Star Paper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006.

[4] Case No. RO4-3-3398-76; February 20, 1977.

[5] CA-G.R. No. 52753-R, June 28, 1978.

[6] G.R. No. 164774, April 12, 2006.

[7] See Starpaper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006.

[8] G.R. No. 164774, April 12, 2006.

[9] See ibid.

[10] See ibid.

[11] Star Paper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006.

[12] See G.R. No. 162994, September 17, 2004.