Employment Contracts Should Be Formulated According to the Peculiar Nature of Each Form of Employment
Employment contracts are among the primary sources of disputes between employer and employees.
Most often, labor disputes involve provisions indicated in the employment contracts such as termination clause, pay, benefits, rest period, overtime, leave, etc.
Employers or companies should draft and formulate contracts with high degree of precision to avoid legal complications. Considering that there various forms of employment in the Philippines the contracts should be drafted according to the peculiar rules of each engagement.
At present, the forms of employment in the Philippines are:
- Regular
- Probationary
- Project
- Seasonal
- Casual
- Fixed-Term
There are also part-time arrangements which require a specific stipulation most especially on the hours of work to be effectively enforceable.
One important rule to be remembered is that in case of doubt in the terms and provisions of employment contract the employee shall be deemed as regular employee. This means that when an employee is regular:
- There is no more trial period unlike in probationary employee
- There is no more automatic termination in project employment upon completion of the project or phase thereof
- There is no more automatic termination in seasonal employment upon end of the season
- There is no more termination upon arrival of the term in casual employment or upon completion of the activity for which the casual employee was engaged
- There is no more automatic termination upon arrival of the term in a fixed-term employment knowingly and voluntarily agreed upon by the parties
A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. (Civil Code, Article 1305; Sagun vs. ANZ Global Services and Operations, G.R. No. 220399, August 22, 2016)
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There is no contract unless the following essential requisites concur: (a) consent of the contracting parties; (b) object certain which is the subject matter of the contract; and (c) cause of the obligation which is established.
In general, contracts undergo three distinct stages. These are negotiation, perfection or birth, and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of their agreement.
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Thereafter, perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. Finally, consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof.
An employment contract, like any other contract, is perfected at the moment the parties come to agree upon its terms and conditions, and thereafter, concur in the essential elements thereof. In this relation, the contracting parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy. (See Stolt-Nielsen Transportation Group, Inc. v. Medequillo, Jr. 679 Phil. 297, 3 10 (2012).)
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