Understanding what the law states in relation to the people you hire is key to building a successful business.
[related|post]Business plans, no matter how good they are, will simply remain as such—plans—unless they are implemented by you, your business partners, and your workers. The involvement of people is an indispensable requirement for your business plan to bear fruit.
Things become tricky, however, when the law meddles with your business plan and the very operations of your enterprise. Just imagine—the government, an entity that had nothing to do with the creation of your business plan, dictating, to some extent, how you or your business should relate to other entities and individuals.
Types of employees
The different categories of employees are found in Book VI, Articles 280-281 of the Labor Code. Article 280 discusses regular and casual employment, while Article 281 discusses probationary employment.
Article 280 states: “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.”
On the other hand, “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.”
Article 281 states: “Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. … The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.”