4. Fixed-Term

Term Employment

A contract of employment for a definite period terminates by its own terms at the end of such period. (Brent School v. Zamora, G.R. No. L-48494, 05 Feb. 1990)

Term employment is not a circumvention of the law on security of tenure if it follows the requisites laid down by the Brent ruling. (Romares v. NLRC, G.R. No. 122327, 19 Aug. 1998)

The defined period must be a genuine condition of the job and not merely to avoid regular status of the Ee. (Azucena, 2016)

Decisive Determinant in Term Employment

It is the day certain agreed upon by the parties for the commencement and the termination of their employment relation.

Fixed Term Employment

It is an employment where a fixed period of employment was agreed upon:

• Knowingly and voluntarily by the parties; and
• Without any force, duress or improper pressure being brought to bear upon the Ee, or any other circumstances vitiating the Ee's consent. (Philips Semiconductor v. Fadriquela, G.R. No. 141717, 14 Apr. 2004)

Fixed-Term Employment vs. Project Employment

Both employments are time bound or for a certain period – as agreed upon at the time of engagement. However, in project employment, the Ee is engaged for a specific project or undertaking whose scope and duration are determined or determinable and made known at hiring; fixed-term employment is governed by a validly agreed period, which need not be tied to completion of a project.

Brent Doctrine

Art. 295 of the LC does not prohibit an employment contract with a fixed period, provided it is entered into by the parties without any force, duress, or improper pressure being brought to bear upon either party, particularly the Ee and absent any other circumstances vitiating consent; or where it satisfactorily appears that the Er and Ee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Such employment for a defined period is allowed even where the duties of the Ee consist of activities usually necessary or desirable in the usual business of the Er.

There can of course be no quarrel with the proposition that where, from the circumstances, it is apparent that periods have been imposed to preclude acquisition of tenurial security by the Ee, they should be struck down or disregarded as contrary to public policy, morals, etc. (Brent School, Inc. v. Zamora, G.R. No. L-48494, 5 Feb. 1990)

Domestic Seafarers are Not Contractual Employees

Seamen employed in domestic shipping are entitled to security of tenure, can become permanent Ees, and can be terminated only for just or authorized causes. Domestic seafarers are covered by the LC, including its Book VI.

Q: Darrell was hired as an athletic director in Amorita School for a period of five years. As such, he oversees the work of coaches and related staff involved in intercollegiate or interscholastic athletic programs. However, he was not rehired upon the expiration of said period. Darrell questions his termination alleging that he was a regular Ee and could not be dismissed without valid cause.

• Is he a regular Ee? A: NO. Darrell was not a regular Ee but an Ee under a fixed-term contract. While it can be said that the services he rendered were usually necessary and desirable to the business of the school, it cannot also be denied that his employment was for a fixed term of five years. The decisive determinant in fixed-term employment should not be the activities that the Ee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relation. (Brent School Inc. v. Zamora, G.R. No. 48494, 05 Feb. 1990)
• Will Darrell automatically become a regular Ee if he is rehired by the school for another definite period of employment? A: NO. Rehiring alone does not confer regular status, provided the fixed terms are genuine and meet the Brent requirements; repeated renewals warrant scrutiny, and periods imposed to prevent acquisition of security of tenure must be disregarded. The decisive determinant in term employment is the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when and not whether the work is usually necessary and desirable to the business of the Er.

Q: Does the “Reasonable Connection Rule” apply in fixed term employment for a fixed-term Ee to be eventually classified as a regular Ee?

A: NO. It should be apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no account at all the nature of the duties of the Ee; it has absolutely no relevance to the character of his duties as being usually necessary and desirable to the usual business of the Er, or not.

Q: Dean Jose and other Ees are holding administrative positions as dean, department heads, and institute secretaries. In the implementation of the Reorganization, Retrenchment and Restructuring program effective 01 Jan. 1984, Dean Jose and other Ees were retired but subsequently rehired. Their appointment to their administrative positions as dean, department heads, and institute secretaries had been extended by the company from time to time until the expiration of their last appointment on 31 May 1988. Were Dean Jose and other Ees illegally dismissed?

A: NO. Petitioners were dismissed by reason of the expiration of their contracts of employment. Petitioners' appointments as dean, department heads, and institute secretaries were for fixed terms of definite periods as shown by their respective contracts of employment, which all expired on the same date, May 31, 1988. The validity of employment for a fixed period has been acknowledged and affirmed by the SC. (Blancaflor v. NLRC, G.R. No. 101013, 02 Feb. 1993)

Q: Lina has been working as a steward with a Miami, U.S.A.-based Loyal Cruise Lines for the past 15 years. She was recruited by a local manning agency, Macapagal Shipping, and was made to sign a 10-month employment contract every time she left for Miami. Macapagal Shipping paid for Lina’s round-trip travel expenses from Manila to Miami. Because of a food poisoning incident which happened during her last cruise assignment, Lina was not re- hired. Lina claims she has been illegally terminated and seeks separation pay. If you were the Labor Arbiter handling the case, how would you decide? (2014 BAR)

A: I will dismiss Lina's complaint. Lina is a contractual Ee, and the length of her employment is determined by the contracts she entered. Here, her employment was terminated at the expiration of the contract. (Millares, et al. v. NLRC G.R. No. 110524, 29 July 2002)

FLOATING STATUS

An employment is not deemed terminated when:

• There is a bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months; or,
• The fulfillment by the Ee of a military or civic duty. (Art. 301, LC)

During this period, the Ee is considered on “floating status,” which is also known as temporary lay-off, temporary off-detail, or temporary retrenchment.

Since the lay-off is only temporary, the employment status of the Ee is not deemed terminated, but merely suspended. (Dela Cruz v. NLRC, G.R. No. 119536, 17 Feb. 1997)