The Nature of Work Determines Regular Employment Status: A Landmark Ruling

Henry T. Paragele, et al. vs. GMA Network, Inc., G.R. No. 235315, July 13, 2020

Imagine working tirelessly as a camera operator for a major broadcasting company, only to be labeled a ‘pinch-hitter’ or ‘freelancer’ and dismissed without the security of tenure. This was the reality for over 30 individuals who took their fight to the Supreme Court of the Philippines, challenging GMA Network, Inc.’s classification of their employment status. The central legal question at the heart of this case was whether these workers, engaged repeatedly for years, should be considered regular employees entitled to job security, or merely casual laborers without such protections.

The Supreme Court’s decision in this case reshaped the understanding of regular employment under Philippine law, emphasizing the critical distinction between the nature of work and the duration of service. This ruling not only affected the lives of the petitioners but also set a precedent that could influence how companies across the nation classify their workforce.

Legal Context: Defining Regular Employment

In the Philippines, the concept of regular employment is enshrined in Article 295 of the Labor Code, which states that an employment shall be deemed 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.’ This provision is crucial for understanding the rights of workers to security of tenure, a fundamental aspect of labor law.

The term ‘regular employee’ contrasts with casual, project, seasonal, or fixed-term employees. Regular employees enjoy greater job security, as they can only be terminated for just or authorized causes, and after due process. The distinction often hinges on whether the work performed is necessary and desirable to the employer’s business, rather than the length of service.

For instance, a construction worker hired for a specific project may be a project employee, while a receptionist at a hotel, where customer service is essential to the business, would typically be a regular employee. This differentiation is vital as it directly affects employees’ rights and protections under the law.

Case Breakdown: From Camera Operators to Regular Employees

The petitioners in this case were camera operators for GMA Network, Inc., a major player in the Philippine broadcasting industry. They claimed to have been engaged and dismissed in May 2013, after years of service. GMA, however, argued that these workers were merely ‘pinch-hitters’ or ‘relievers,’ hired on a per-shoot basis and thus not entitled to regular employee status.

The journey through the legal system began with a consolidated complaint filed by the petitioners, which evolved into a case for illegal dismissal and regularization. The Labor Arbiter initially dismissed the complaint, finding no employer-employee relationship. However, the National Labor Relations Commission (NLRC) reversed this decision, recognizing the workers as employees but only deeming one of them, Roxin Lazaro, a regular employee due to his length of service.

On appeal, the Court of Appeals upheld the NLRC’s finding of an employer-employee relationship but maintained that the petitioners did not attain regular status because they did not serve for at least one year. The Supreme Court, however, took a different view. It emphasized that the nature of the work, not the duration of service, is the key factor in determining regular employment status.

The Supreme Court’s ruling was clear: ‘Only casual employees performing work that is neither necessary nor desirable to the usual business and trade of the employer are required to render at least one (1) year of service to attain regular status. Employees who perform functions which are necessary and desirable to the usual business and trade of the employer attain regular status from the time of engagement.‘

The Court found that the petitioners’ roles as camera operators were integral to GMA’s business as a broadcasting company. They were not hired for specific projects but were repeatedly engaged for various programs, indicating the necessity and desirability of their work to GMA’s operations.

Practical Implications: A New Standard for Employment Classification

This landmark decision has far-reaching implications for how companies classify their employees. Businesses must now carefully evaluate the nature of the work their employees perform, rather than relying solely on the duration of service or contractual labels like ‘freelancer’ or ‘reliever.’

For employees, this ruling strengthens their rights to security of tenure if their work is necessary and desirable to their employer’s business. It also serves as a reminder to document their engagement and work conditions meticulously, as this can be crucial in legal disputes.

Key Lessons:

• Employers must assess the nature of work performed by employees, not just the length of service, when classifying employment status.
• Employees performing tasks necessary and desirable to the employer’s business should be recognized as regular employees from the outset.
• Documentation of work engagement and conditions is vital for employees seeking to assert their rights.

Frequently Asked Questions

What is the difference between a regular and a casual employee in the Philippines?

A regular employee performs work that is necessary and desirable to the employer’s business and is entitled to security of tenure. A casual employee, on the other hand, performs work that is not essential to the business and must serve for at least one year to become regular.

How can I determine if my work is necessary and desirable to my employer’s business?

Consider whether your role is integral to the core operations of the company. If your job is essential for the business to function, it is likely necessary and desirable.

What should I do if my employer misclassifies my employment status?

Document your work engagement and conditions thoroughly. Consult with a labor lawyer to understand your rights and potential legal remedies.

Can an employer terminate a regular employee without cause?

No, regular employees can only be terminated for just or authorized causes as defined by the Labor Code, and after due process.

What are the implications of this ruling for freelancers or contract workers?

Freelancers or contract workers whose roles are integral to the employer’s business may have grounds to claim regular employment status, especially if they are repeatedly engaged.

ASG Law specializes in labor and employment law. Contact us or email hello@asglawpartners.com to schedule a consultation and ensure your employment rights are protected.