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[G.R. No. 157214. June 7, 2005]PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner, vs. RICARDO DE VERA,respondent.

FACTS De Vera and petitioner company entered into a contract where respondent while being paid a retainer fee of P4,000 per month.Later, De Vera was informed y petitioner that the retainership will be discontinued. Respondent filed a case for illegal dismissal. ISSUE Whether or not de Vera is an employee of PhilComm or an independent contractor.HELD Applying the four fold test, de Vera is not an employee. There are several indicators apart fromthe fact that the power to terminate the arrangement lay on both from the time he started to work with petitioner, he never was i ncluded in itspayroll; was never deducted any contribution for remittance to the Social Security he was subjected by petitioner to the ten (10%) percent w ithholding tax for hisprofessional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employer-employee the records are replete with evidence showing that respond ent had to bill petitionerfor his monthly professional fees. It simply runs against the grain of common experience toimagine that an ordinary employee has yet to bill his employer to receive his salary.Finally, the element of control s absent.Petition granted. [G.R. No. 91307 January 24, 1991]SINGER SEWING MACHINE COMPANY, petitioner vs. HON. FRANKLIN M. DRILON,MEDARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB), respondents. FACTS

part of Singer.; 4. The collection agents shoulder their transportationexpenses incurred in the collections of the accounts assigned to them.; 5. The collection agentsare paid strictly on commission basis. The amounts paid to them are based solely on theamounts of collection each of them make. They do not receive any commission if they do not effect any collection even if they put a lot of effort in collecting. They are paid commission onthe basis of actual collections.; 6. The commissions earned by the collection agents are directlydeducted by them from the amount of collections they are able to effect. The net amount iswhat is then remitted to Singer." (Rollo, pp. 7-8)If indeed the union members are controlled as to the manner by which they are supposed toperform their collections, they should have explicitly said so in detail by specifically denyingeach of the facts asserted by the petitioner. As there seems to be no objections on the part of the respondents, the Court finds that they miserably failed to defend their position. A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee relationship between the Company and the collection agents cannot besustained.The last and most important element of the control test is not satisfied by the terms andconditions of the contracts. There is nothing in the agreement which implies control by theCompany not only over the end to be achieved but also over the means and methods inachieving the end.The Court finds the contention of the respondents that the union members are employeesunder Article 280 of the Labor Code to have no basis. The Court agrees with the petitioner'sargument that Article 280 is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees. The Court findsthat since private respondents are not employees of the Company, they are not entitled to theconstitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis for their "union" to be granted theirpetition for direct certification.Order of Med-Arbiter and DOLE Secretary reversed and set aside.

Labor Congress of the Philippines vs NLRC (1998) G.R. 123938 SIMACUB, respondent union, filed a petition for certification as the sole and exclusivebargaining agent of all the collectors of the Singer Sewing Machine Company, Bagiuo Citybranch. The Company opposed the petition saying that the union members were not employeesbut independent contractors as evidenced by the collection agency agreement they signed. ISSUEWhether there exists an employee-employer relationship? HELD The nature of the relationship between a collecting agent and the company depends on thecircumstances surrounding each case. In this case, the Agreement confirms the status of thecollecting agent as an independent contractor not only because he is explicitly described assuch but because he is allowed by the provisions of the agreement to perform collectionservices without being subject to the control of the latter except only as to the result of hiswork.Hence, the requirement that receipt forms issued by the company shall be submitted once aweek is but a method to avoid co-mingling of personal funds of the agent with the money of the company. Likewise, the use of standard report forms are only intended to facilitate order inthe office. Even if the report requirements are to be called control measures, any control is onlywith respect to the end result of the collection since the requirements regulate the things to bedone after the performance of the collection job or the rendition of the service.The respondents' contention that the union members are employees of the Company is based on selected provisions of the Agreement but ignores the following circumstances whichrespondents never refuted either in the trial proceedings before the labor officials nor in itspleadings filed before this Court.1. The collection agents are not required to observe office hours or report to Singer's officeeveryday except, naturally and necessarily, for the purpose of remitting their collections; 2. Thecollection agents do not have to devote their time exclusively for SINGER. There is noprohibition on the part of the collection agents from working elsewhere. Nor are these agentsrequired to account for their time and submit a record of their activity.; 3. The manner andmethod of effecting collections are left solely to the discretion of the collection agents without any interference on the Facts: The 99 persons named as petitioners in this proceeding were rank-andfile employees of respondentEmpireFood Products, which hired them on various dates. Petitioners filed against private respondents a complaintfor payment of money claims and for violation of labor standards laws They also filed a petition for directcertification of petitioner Labor Congress of thePhilippines as their bargaining representative. In an Orderdated October 24, 1990, Mediator Arbiter approved the memorandum of agreement and certified LCP"asthe sole and exclusive bargaining agent among the rank-and-file employees of Empire Food Products forpurposes of collective bargaining with respect to wages, hours of work and other terms and conditions of employment".On November 1990, petitioners through LCP President Navarro submitted to private respondents a proposalfor collective bargaining. On January 1991, petitioners filed a complaint against private respondents forUnfair Labor Practice by way of Illegal Lockout and/or Dismissal; Union busting thru Harassments [sic],threats, and interfering with the rights of employees to self -organization; Violation of the Memorandum of Agreement dated October 23, 1990; Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727,such as Wages promulgated by the Regional Wage Board; Actual, Moral and Exemplary Damages." Issue: WON the petitioners are entitled to labor standard benefits considering they are paid by piece rateworker. Held: The petitioners are so entitled to these benefits namely, holiday pay, premium pay, 13th month payand service incentive leave.Three (3) factors lead us to conclude that petitioners, although piece-rate workers, were regular employeesof private respondents. First, as to the nature of

petitioners' tasks were necessary or desirable in the usualbusiness of private respondents, who were engaged in the manufacture and selling of such food products;second, petitioners worked for private respondents throughout the year, and third, the length of time thatpetitioners worked for private respondents. Thus, while petitioners' mode of compensation was on a "perpiece basis," the status and nature of their employment was that of regular employees.The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttimepay, holiday pay, service incentive leave and 13th month pay, "field personnel and other employees whosetime and performance is unsupervised by the employer, including those who are engaged on task or contractbasis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of thetime consumed in the performance thereof."Plainly, petitioners as piece-rate workers do not fall within this group.As mentioned earlier, not only didpetitioners labor under the control of private respondents as their employer, likewise did petitioners toilthroughout the year with the fulfillment of their quota as supposed basis for compensation.Further, in Section 8(b), Rule IV, Book III which we quote hereunder, piece workers are specifically mentionedas being entitled to holiday pay. Efren P. Paguio v. NLRC, Metromedia Times Corporation, Robina Y. Gokongwei, LibertoGomez, Jr., Yolanda E. Aragon, Frederick D. Go, and Alda Iglesia May 9, 2003 G.R. No. 147816 Vitug,J. Facts: On 22 June, 1992, respondent Metro Media Times Corporation entered in to anagreement with petitioner, Efren P. Paguio, appointing the latter to be an account executive of the firm. The petitioner was to solicit advertisements for the Manila Times, a newspaper published by the respondent company.On 15 August, 1992, barely two months after the renewal of his contract, petitioner received a notice of termination from the respondent firm. There was no given definite cause for the petitioners termination. Aggrieved, Paguio filed a case before the labor arbiter, asking thathis dismissal be declared unlawful and prayed that respondent compa ny officials be heldaccountable for acts of unfair labor practices, P500,000.0 moral damages, and for P20,000.0exemplary damages.The Labor arbiter found for petitioner and declared his dismissal illegal. The arbiter ordered respondent company and its officers to reinstate Paguio to his former position and topay him his commissions and other remunerations. He likewise adjudged that the generalmanager of the respondent corporation be held liable to Paguio for moral damages in theamount of P20,000.0.On appeal, NLRC reversed the ruling of the labor arbiter and declared the contractualrelationship between the parties as a fixed-term employment.Petitioner Paguio appealed the ruling of the NLRC before the Court of Appeals. Issues: Whether or not there is an employer-employee relationship, petitioners contract withprivate respondent company is for a fixed period and whether or not petitioners dismissal islegal. Held: As defined in Article 280 of the Labor Code, a regular employee is one who is engagedto perform activities which are necessary and desirable in the usual business or trade of theemployer as against those which are undertaken for a specific project or are seasonal. Even inthese latter cases, where such person has rendered at least one year of service, regardless of the nature of the activity performed or of whether it is continuous or intermittent, the employmentis considered regular as long as the activity exists, it not being indispensable that he be firstissued a regular appointment or be formally declared as such before acquiring a regular status.The law in defining their contractual relationship, does not necessarily or exclusivelyupon the terms of their written or oral contract, but also on the basis of the nature of the workpetitioner has been called upon to perform.A lawful dismissal must meet both substantive and procedural requirements; in fine, thedismissal must be for a just or

authorized cause and must comply with the rudimentary dueprocess of notice and hearing. It is not shown that respondent company has fully bothered itself with either of these requirements in terminating the services of petiti oner. The notice of termination recites no valid or just cause for the dismissal of petitioner nor does it appear thathe has been given an opportunity to be heard in his defense. ABS-CBN BROADCASTING CORPORATION vs. MARLYN NAZARENO et al. [G.R. No. 164156. September 26, 2006] Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and owns a network of television and radio stations, whose operations revolve around the broadcast, transmission, and relay of telecommunication signals. It sells and deals in or otherwise utilizes the airtime it generates from its radio and television operations. It has a franchise as a broadcasting company, and was likewise issued a license and authority to operate by the National Telecommunications Commission. Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station. On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA. On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. The Labor Arbiter rendered judgment in favor of the respondents, and declared that they were regular employees of petitioner as such, they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter. Petitioner filed a motion for reconsideration but CA dismissed it. Issue: Whether or not the respondents were considered regular employees of ABS-CBN. SC Ruling: The respondents are regular employees of ABS-CBN. It was held that where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. In Universal Robina Corporation v. Catapang, the Court states that the primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. Additionally, respondents cannot be considered as project or program employees because no evidence was presented to show that the duration and scope of the project were determined or specified at the time of their engagement. In the case at bar, however, the employer-employee relationship between petitioner and respondents has been proven. In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through petitioners personnel department just like any ordinary employee. Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual

relationship. Respondents are highly dependent on the petitioner for continued work. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that respondents are independent contractors. The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor. As regular employees, respondents are entitled to the benefits granted to all other regular employees of petitioner under the CBA . Besides, only talent-artists were excluded from the CBA and not production assistants who are regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer.

HELD The SC ruled that he argument of petitioner that its usual business or trade is softdrinkmanufacturing and that the work assigned to respondent workers as products, scarcely can be persuasive. If, as so argued by petitioner company, only thosewhose work are directly involved in the production of softdrinks may be held performingfunctions necessary and desirable in its usual business or trade, there would have then been noneed for it to even maintain regular truck sales route helpers. The nature of the workperformed must be viewed from a perspective of the business or trade in its entirety and not ona confined scope.The repeated rehiring of respondent workers and the continuing need for their services clearlyattest to the necessity or desirability of their services in the regular conduct of the business ortrade of petitioner company. The Court of Appeals has found each of respondents to haveworked for at least one year with petitioner company. While this Court, in Brent School, Inc. vs.Zamora, has upheld the legality of a fixed-term employment, it has done so, however, with a stern admonition that where from the circumstances it is apparent that the period has beenimposed to preclude the acquisition of tenurial security by the employee, then it should bestruck down as being contrary to law, morals, good customs, public order and public policy. Thepernicious practice of having employees, workers and laborers, engaged for a fixed period of few months, short of the normal six-month probationary period of employment, and, thereafter,to be hired on a day-to-day basis, mocks the law. Any obvious circumvention of the law cannot be countenanced.The fact that respondent workers have agreed to be employed on such basis and to forego theprotection given to them on their security of tenure, demonstrate nothing more than the seriousproblem of impoverishment of so many of our people and the resulting unevenness betweenlabor and capital. A contract of employment is impressed with public interest. The provisions of applicable statutes are deemed written into toinsulate themselves and their relationships from the impact of labor dismissed.

[G.R. No. 148492 May 9, 2003]BUENAVENTURA C. MAGSALIN & COCA-COLA BOTTLERS PHILS., INC., petitioners,vs. NATIONAL ORGANIZATION OF WORKING MEN (N.O.W.M.), RODOLFO MELGAR, ARNEL DELOS SANTOS, SILVERIO MINDAJAO, RUBEN NAVALES, BOBBY AUSTERO,RAYMUNDO GAUDICOS, CHRISTOPHER PERALTA, GIOVANI DELA CRUZ, JOSELITOOCCIDENTAL, AMADO BODASAN, FREDERIK MAGALINO, CHITO OCCIDENTAL, ALEXANDER DELOS SANTOS, DEONIL MESA, OLIVER VILLAFLOR, ROBERTOTUMONBA, RODRIGO ANGELES, ROMMEL ABAD, FELIX AVENIDO, ARMANDO AMOR,FREDERICK DE GUZMAN, CEA CARMELO, MARIANO CAETE, ALBERTO ANTONES,ROMEO BASQUINAS, ROGELIO MALINIS, EDMUNDO BAYOS, RAMIL REVADO, JOELPIATA, OSCAR MALINAY, ROBERT REYES, JIMMY REYES, RETCHEL HAUTEA, VICTORINO TORRALBA, NOEL RUBAI, RENATO DE OCAMPO, JESUS NOZON, JOELMALINIS, REYNALDO GREGORY, MICHAEL RUBIA, JOSELITO VILLANUEVA,LEONARDO MONDINA, EDUARDO BELLA, WILFREDO BELLA, ALBERTO MAGTIBAY,MIGUEL CUESTA, JOSE MARCOS RODRIGUEZ III, HERMINIO ROFLO, ERNIE CHAVEZ, NELSON LOGRONIO, LEONILO GALAPIN, REY PANGILINAN, LARRY JAVIER,MATIAS ARBUES, RONILO AUSTERO, ADEMAR ESTUITA, EDWIN DE LEON, RANDYDE CHAVEZ, respondents. FACTS Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent workers as"sales route helpers" for a limited period of five months. After five months, respondent workerswere employed by petitioner company on a day-to-day basis. According to petitioner company,respondent workers were hired to substitute for regular sales route helpers whenever the latterwould be unavailable or when there would be an unexpected shortage of manpower in any of its work places or an unusually high volume of work. The practice was for the workers to wait every morning outside the gates of the sales office of petitioner company. If thus hired, theworkers would then be paid their wages at the end of the day.Ultimately, respondent workers asked petitioner company to extend to them regularappointments. Petitioner company refused. Subsequently, the respondents filed with the NLRCa complaint for the regularization of their employment with petitioner company. Claiming that petitioner company meanwhile terminated their services, respondent workers filed a notice of strike and a complaint for illegal dismissal and unfair labor practice with the NLRC. The parties,later on, agreed to submit the controversy, for voluntary arbitration but the VA dismissed thecomplaint on the ground that the respondent workers were not employees of Coca-cola. ISSUE Whether or not the nature of work of respondents in the company is of such nature as to bedeemed necessary and desirable in the usual business or trade of petitioner that could qualifythem to be regular employees.

[G.R. No. 117040. January 27, 2000] RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION and ISETANN DEPARTMENT STORE, respondents. FACTS Ruben Serrano was the head of the security checkers section of IsetannDepartment Store. He was charged with the task of supervising securitycheckers in their jobs (apprehending shoplifters and preventing pilfirege of merchandise). On October 11, 1991, the management sent him a letterimmediately terminating his services as security section head, effective on the same day. The reason given by the management was retrenchment; they had opted to hire an independent security agency as a costcuttingmeasure. Serrano filed a complaint for ID, illegal layoff, ULP, underpaymentof wages and nonpayment of salary and OT pay with the LA.The LA rendered a decision in favor of Serrano. It stated that Isetann failed toestablish that it had retrenched its security division, that the petitioner wasnot accorded due process, etc. and even stated that the day after Serranos dismissal, Isetann employed a safety and security supervisor with similarduties to that of the former.The NLRC on the other hand reversed the LA but ordered Isetann to payseparation pay equivalent to one month per year of service, unpaid salary, etal. It held that the phase-out of the security section was a valid exercise of management prerogative on the part of Isetann, for which the NLRC cannotsubstitute its judgment in the absence of bad faith or abuse of discretion on the part of the latter; and that the security and safety supervisors positionwas long in place prior to Serranos separation from the company, or the phase-out of the Security Section.

ISSUE Whether the petitioners dismissal was illegal. RULING: Valid, but ineffectual (without legal effect) payment of backwages, separation pay and other monetary claims No. The Court held that the dismissal was due to an authorized cause underArt. 283 of the Labor Code, i.e. redundancy. However, while an authorizedcause exists, Isetann failed to follow the procedural requirement provided byArt. 283 of LC. For termination due to authorized causes, the employer mustgive a written notice of termination to the employee concerned and to theDOLE at least 30 days prior to its effectivity. This Isetann failed to do.The question now arises as to whether the failure of Isetann to comply withthe procedural requirements renders the dismissal invalid, or, in the eventthat it is valid, what the appropriate sanction or penalty must be meted out.Prior to the doctrine laid down in the decision rendered in Wenphil Corp.NLRC in 1989, the termination of an employee, even for just cause butwithout following the requisite procedure, renders such dismissal illegal, andtherefore null and void.In the Wenphil doctrine , this was reversed; the said rule was unjust toemployers. Instead, the dismissal was held to be still valid but the employerwas sanctioned by way of the payment of indemnity (damages) in thatcase, P1,000. The amount of indemnity will be depended on thecircumstances of each case, taking into account the gravity of the offensecommitted by the employer.Now, the Court once again examines the Wenphil doctrine. Puno says that the effect of the Wenphil doctrine was such that there has been a dismissnow, pay later policy where the employers were able to circumvent the procedural requisites of termination, which is more convenient than thecompliance with the 30-day notice. Panganiban said that the monetarysanctions were too insignificant, niggardly, sometimes even late. Both justices are of the opinion that the deprivation of due process which must beaccorded to the employee renders the dismissal illegal.Puno quoted thatLegislative, Executive and Judicial proceedings that deny due process do sounder the pain of nullity. Panganiban stated that such denial of due processrenders decisions and proceedings void for lack of jurisdiction.The present ruling of the Court held that the dismissal of the employee ismerely ineffectual, not void. The dismissal was upheld but it is ineffectual. The sanction provided was the payment of backwages from the time of dismissal up to the decision of the court finding just or authorized cause. Thiswas thought to balance the interests of both parties, recognizing the employees right to notice and at the same time the right of the employer to dismiss for any of the just and authorized causes.The Court also responded to the arguments of Justices Puno and Panganiban by stating that the violation in the procedural requirement of termination isnot a denial of the fundamental right to due process. This is because of the ff reasons:1) The due process clause is a limitation on governmental powers,inapplicable to the exercise of private power, such as in this case. The provision No person shall be deprived of life, liberty andproperty without due process of law pertains only to the State, as only it has the authority to do the same.2) The purpose of the notice and hearing under the Due processclause is to provide an opportunity for the employee to be heardbefore the power of the organized society is brought upon theindividual. Under Art. 283, however, the purpose is to give himtime to prepare for the eventual loss of his job and for DOLE todetermine whether economic causes exist to justify termination.It is not to give opportunity to be heard there is no chargeagainst the employee under Art. 2833)

The employer cannot be expected to be an impartial judge of hisown cause.4) Not all notice requirements are requisites of due process. Someare simply a part of a procedure to be followed before a rightgranted to party can be exercised; others are an application of theJustinian precept. Such is the case here. The failure of theemployer to observe a procedure for the termination of employment which makes the termination of employment merelyineffectual.5) Art. 279 of the LC provides that only dismissal without just orauthorized cause renders such dismissal illegal. To consider termination without observing procedural reqts as also ID is to add another ground for ID, thereby amending Art. 279.; Further, there is a disparity in legal treatment, as employees who resignwithout giving due notice are only liable for damages; it does notmake their resignation void.In this case, the separation pay was a distinct award from the paymentof backwages as a way of penalty.Petition was denied.

Wack-Wack Golf & Country Club vs. NLRC, G.R. No. 149793, April 15, 2005

Facts: On November 29, 1996, a fire destroyed a large portion of the main clubhouse of the Wack Wack Golf and Country Club (Wack Wack), including its kitchen. In view of the reconstruction of the whole clubhouse complex, Wack Wack filed a notice with the DOLE on that it was going to suspend the operations of the Food and Beverage (F & B) Department. An Agreement was forged whereby a special separation benefit/retirement package for interested Wack Wack employees. Respondents Carmencita F. Dominguez and Martina B. Cagasan avail of the special separation package and signed a Release and Quitclaim in favor of Wack Wack.Respondent. The last one to avail of the separation package was Crisanto Baluyot, Sr. On October 15, 1997, Wack Wack entered into a Management Contract with Business Staffing and Management, Inc. (BSMI), a corporation engaged in the business as Management Service Consultant undertaking and managing for a fee projects which are specialized and technical in character like marketing, promotions, merchandising, financial management, operation management and the like. Pursuant to the Agreement, the retired employees of Wack Wack by reason of their experience were given priority by BSMI in hiring. On October 21, 1997, respondents Cagasan and Dominguez filed their respective applications for employment with BSMI. They were eventually hired by BSMI to their former positions in Wack Wack as project employees and were issued probationary contracts. Due to these various management service contracts, BSMI undertook an organizational analysis and manpower evaluation to determine its efficacy, and to streamline its operations. In the course of its assessment, BSMI saw that the positions of Cagasan and Dominguez were redundant. In the case of respondent Cagasan, her tasks as personnel officer were likewise being taken cared of by the different management service contractors; on the other hand, Dominguezs work as telephone operator was taken over by the personnel of the accounting department. Thus, in separate Letters dated February 27, 1998, the services of Dominguez and Cagasan were terminated. With respect to Baluyot, he applied for the position of Chief Porter on May 12, 1998. The position, however, was among those recommended to be abolished by the BSMI, so he was offered the position of Caddie Master Aide with a starting salary of P5,500.00 a month. Baluyot declined the offer. Pending Wack Wacks approval of the proposed abolition of the position of Chief Porter, Baluyot was temporarily accepted to the position with a monthly salary of P12,000.00. In July 1998, Baluyot decided not to accept the position of Caddie Master Aide; thus, BSMI continued with its plan to abolish the said position of Chief Porter and Baluyot was dismissed from the service.

The Labor Arbiter found that the dismissal of Dominguez and Cagasan was for a valid and authorized cause, and dismissed their complaints. While the NLRC reversed the Labor Arbiters decision and ordered Wack Wack to reinstate Carmencita F. Dominguez and Martina Cagasan. Issue: Whether or not BSMI is an independent contractor or a labor-only contractor. Held: BSMI is an INDEPENDENT CONTRACTOR. An independent contractor is one who undertakes job contracting, i.e., a person who: (a) carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (b) has substantial capital or investment in the form of tools, equipments, machineries, work premises and other materials which are necessary in the conduct of the business. Jurisprudential holdings are to the effect that in determining the existence of an independent contractor relationship, several factors may be considered, such as, but not necessarily confined to, whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the work to another; the employers power with respect to the hiring, firing, and payment of the contractors workers; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. There is indubitable evidence showing that BSMI is an independent contractor, engaged in the management of projects, business operations, functions, jobs and other kinds of business ventures, and has sufficient capital and resources to undertake its principal business. It had provided management services to various industrial and commercial business establishments. BSMI admitted that it employed the respondents, giving the said retired employees some degree of priority merely because of their work experience with the petitioner, and in order to have a smooth transition of operations. In accordance with its own recruitment policies, the respondents were made to sign applications for employment, accepting the condition that they were hired by BSMI as probationary employees only. Not being contrary to law, morals, good custom, public policy and public order, these employment contracts, which the parties are bound are considered valid. Unfortunately, after a study and evaluation of its personnel organization, BSMI was impelled to terminate the services of the respondents on the ground of redundancy. This right to hire and fire is another element of the employer-employee relationship which actually existed between the respondents and BSMI, and not with Wack Wack. There being no employer-employee relationship between the petitioner and respondents Cagasan and Dominguez, the latter have no cause of action for illegal dismissal and damages against the petitioner. Consequently, the petitioner cannot be validly ordered to reinstate the respondents and pay them their claims for backwages. G.R. No. 79869 September 5, 1991FORTUNATO MERCADO, SR., et.al, petitionervs.NATIONAL LABOR RELATIONS COMMISSION (NLRC), STO. NIO REALTY, INCORPORATED, et.al., respondents . Facts:Petitioners were agricultural workers for a sugar plantation. Their employment with the privaterespondent was seasonal which means their services are usually utilized during the planting season and duringharvest season of sugar cane. Petitioners filed a complaint for illegal dismissal, underpayment of wages, non-payment of overtime pay, holiday pay, service incentive leave benefits, emergency cost of living allowancesand 13th month pay against private respondents. Petitioners alleged in their complaint that they wereagricultural workers utilized by private respondents in all the agricultural phases of work on the sugar land of the respondents and that they worked in the farm since 1949 to 1979.Private

respondent Aurora Cruz in her answer to petitioners' complaint denied that said petitionerswere her regular employees and instead averred that she engaged their services, through Spouses FortunatoMercado, Sr. and Rosa Mercado, their "mandarols", that is, persons who take charge in supplying the numberof workers needed by owners of various farms, but only to do a particular phase of agricultural work necessaryin rice production and/or sugar cane production, after which they would be free to render services to otherfarm owners who need their services.Petitioners submit that it would be unjust, if not unlawful, to consider them as casual workers sincethey have been doing all phases of agricultural work for so many years, activities which are undeniablynecessary, desirable and indispensable in the rice and sugar cane production business of the privaterespondents citing Art. 280 of the Labor Code specifically on paragraph 2. The Labor Arbiter, as affirmed by the NLRC, ruled in favor of private respondents and held thatpetitioners were not regular and permanent workers of the private respondents, for the nature of the termsand conditions of their hiring reveal that they were required to perform phases of agricultural work for adefinite period of time after which their services would be available to any other farm owner.Issue:Whether or not petitioners are regular and permanent farm workers and therefore entitled to thebenefits which they pray for?Held:The Court held, petitioners contention that the provision in the second paragraph of Art. 280sapplicability to their case and should have been considered as regular employees by virtue of said provision iswithout merit. The first paragraph of Art. 280 of the Labor Code answered the question of who are employees.It states that, regardless of any written or oral agreement to the contrary, an employee is deemed regularwhere he is engaged in necessary or desirable activities in the usual business or trade of the employer, except for project employees. A project employee has been defined to be one whose employment has been fixed for a specificproject or undertaking, the completion or termination of which has been determined at the time of theengagement of the employee, or where the work or service to be performed is seasonal in nature and theemployment is for the duration of the season as in the present case.The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do notfan under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regularemployees those "casual" employees who have rendered at least one year of service regardless of the factthat such service may be continuous or broken.The general rule is that a provision is to qualify or modify only the phrase immediately preceding it orrestrain or limit the generality of the clause that it immediately follows. Thus, it has been held that a provisionis to be construed with reference to the immediately preceding part of the provision to which it is attached,and not to the statute itself or to other sections thereof. The only exception to this rule is where the clearlegislative intent is to restrain or qualify not only the phrase immediately preceding it but also earlierprovisions of the statute or even the statute itself as a whole.Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends upon completion of the project or the season. The termination of their employment cannot and should not constitute an illegal dismissal.

ALEJANDRO MARAGUINOT, JR. AND PAUILINO ENERO v. NLRC, VIC DEL ROSARIO, VIVA FILMS GR No. 120969 Facts: Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their request that their salary be adjusted in accordance with the minimum wage law. On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to their request only if they sign a blank employment contract. Petitioners refused to sign such document. After which, the Mr. Enero was forced to go on leave on the same month and refused to take him back when he reported for work. Mr. Maraguinot on the other hand was dropped from the payroll but was returned days after.

He was again asked to sign a blank employment contract but when he refused, he was terminated. Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition of movies- but not then making of movies; (b) That they hire contractors called producers who act as independent contractors as that of Vic Del Rosario; and (c) As such, there is no employee-employer relation between petitioners and private respondents. The Labor Arbiter held that the complainants are employees of the private respondents. That the producers are not independent contractor but should be considered as labor-only contractors and as such act as mere agent of the real employer. Thus, the said employees are illegally dismissed. The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter declaring that the complainants were project employees due to the ff. reasons: (a) Complainants were hired for specific movie projects and their employment was co-terminus with each movie project; (b)The work is dependent on the availability of projects. As a result, the total working hours logged extremely varied; (c) The extremely irregular working days and hours of complainants work explains the lump sum payment for their service; and (d) The respondents alleged that the complainants are not prohibited from working with other movie companies whenever they are not working for the independent movie producers engaged by the respondents. A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect, they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a) Finding that petitioners were project employees; (b) Ruling that petitioners were not illegally dismissed; and (c) Reversing the decision of the Labor Arbiter. In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence material or decisive of the controversy. Issues: (a) W/N there exist an employee- employer relationship between the petitioners and the private respondents. (b) W/N the private respondents are engaged in the business of making movies. (c) W/N the producer is a job contractor. Held: There exist an employee- employer relationship between the petitioners and the private respondents because of the ff. reasons that nowhere in the appointment slip does it appear that it was the producer who hired the crew members. Moreover, it was VIVAs corporate name appearing on heading of the slip. It can likewise be said that it was VIVA who paid for the petitioners salaries. Respondents also admit that the petitioners were part of a work pool wherein they attained the status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of project employees even after cessation of a project; (b) The tasks performed by the alleged project employees are vital, necessary and indispensable to the usual business or trade of the employer; and (c) However, the length of time which the employees are continually re-hired is not controlling but merely serves as a badge of regular employment. Since the producer and the crew members are employees of VIVA and that these employees works deal with the mak ing of movies. It can be said that VIVA is engaged of making movies and not on the mere distribution of such. The producer is not a job contractor because of the ff. reasons: (Sec. Rule

VII, Book III of the Omnibus Rules Implementing the Labor Code.) a. A contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. The said producer has a fix time frame and budget to make the movies. b. The contractor should have substantial capital and materials necessary to conduct his business. The said producer, Del Rosario, does not have his own tools, equipment, machinery, work premises and other materials to make motion pictures. Such materials were provided by VIVA. It can be said that the producers are labor-only contractors. Under Article 106 of the Labor Code (reworded) where the contractor does not have the requisites as that of the job contractors. Hacienda Fatima v. National Federation of Sugarcane Workers Food & General TradeGR No. 149440, 28 Jan 2003 Facts: When complainant union (respondents) was certified as the collective bargainingrepresentative, petitioners refused to sit down w/ the union for the purpose of enteringinto a CBA. The workers including complainants were not given work for more than 1month. In protest, they staged a strike w/c was however settled upon the signing of aMOA. Subsequently, alleging that complainants failed to load some wagons, petitionersreneged on its commitment to bargain collectively & employed all means including theuse of private armed guards to prevent the organizers from entering the premises. Nowork assignments were given to complainants w/c forced the union to stage a strike. Dueto conciliation efforts by the DOLE, another MOA was signed by the parties & they metin a conciliation meeting. When petitioners again reneged on its commitment,complainants filed a complaint. Petitioner accused respondents of refusing to work & being choosy in the kind of work they have to perform.The NLRC ruled that petitioners were guilty of ULP & that the respondents were illegallydismissed. The CA affirmed that while the work of respondents was seasonal in nature,they were considered to be merely on leave during the off-season & were therefore stillemployed by petitioners. Issue: Whether the CA erred in holding that respondents, admittedly seasonal workers, wereregular employees, contrary to the clear provisions of Article 280 of the Labor Code,which categorically state that seasonal employees are not covered by the definition of regular employees under paragraph 1, nor covered under paragraph 2 which refersexclusively to casual employees who have served for at least one year Held: No. For respondents to be excluded from those classified as regular employees, it is notenough that they perform work or services that are seasonal in nature. They must havealso been employed only for the duration of one season. The evidence proves theexistence of the first, but not of the second, condition. The fact that respondentsrepeatedly worked as sugarcane workers for petitioners for several years is not denied bythe latter. Evidently, petitioners employed respondents for more than one season.Therefore, the general rule of regular employment is applicable.If the employee has been performing the job for at least a year, even if the performance isnot continuous & merely intermittent, the law deems the repeated & continuing need for its performance as sufficient evidence of the necessity if not indispensability of thatactivity to the business. Hence, the employment is considered regular, but only w/respect to such activity & while such activity exists. Seasonal workers who are called towork from time to time & are temporarily laid off during off-season are not separatedfrom service in said period, but merely considered on leave until re-employed (De Leonv. NLRC) Respondents, having performed the same tasks for petitioners every season for

severalyears, are considered the latter's regular employees for their respective tasks. Petitioners'eventual refusal to use their services even if they were ready, able and willing to perform their usual duties whenever these were available and hiring of other workersto perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.The Court finds no reason to disturb the CA's dismissal of what petitioners claim wastheir valid exercise of a management prerogative. The sudden change s in work assignments reeked of bad faith. These changes were implemented immediately after respondents had organized themselves into a union and started demanding collective bargaining. Those who were union members were effectively d eprived of their jobs.Petitioners' move actually amounted to unjustified dismissal of respondents, in violationof the Labor Code.

thatArticles 283 and 284 provide that in connection withseparation pay, a fraction of at least six months shall beconsidered one whole year. Under these provisions, anemployee who worked for only six months in a givenyear which is certainly less than 303 days isconsidered to have worked for one whole year. BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA and DOROTEO R. ALEGRE G.R. No. L-48494 February 5, 1990 en banc FACTS: Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at a yearly compensation of P20,000.00. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms and conditions, including the expiry date, as those contained in the original contract of July 18, 1971. On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the definite period of employment." Although protesting the announced termination stating that his services were necessary and desirable in the usual business of his employer, and his employment lasted for 5 years - therefore he had acquired the status of regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of contract." The Regional Director considered Brent School's report as an application for clearance to terminate employment (not a report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back wages. ISSUE: Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or employment for a term. RULING: Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement. The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. At that time, the validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed employment without a fixed period, and also implicitly acknowledged the propriety of employment with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or fixed-period employment is contained in any of its articles or is otherwise deducible therefrom. It is plain then that when the employment contract was signed between Brent School and Alegre, it was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court. The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (PD 442), which went into effect on November 1, 1974. The Code contained explicit references to fixed period employment, or employment with a fixed or definite period.

PHIL. TOBACCO FLUE-CURING REDRYING CORP vs.NLRC (1998) FACTS: company transferred its tobaccoprocessing plant in Balintawa k, Quezon City toCandon, Ilocos Sur. The company therein did notactually close its entire business but merely relocatedits tobacco processing and redrying operations toanother place. groups of seasonal workers claimed separation benefits after the closure of the plant inBalintawak. Petitioner refuses to grant separation payto the workers belonging to the first batch (referred toas the Lubat group), because they had not been givenwork during the preceding year and, hence, were nolonger in its employ at the time it closed itsBalintanwak plant. Likewise, it claims exemption fromawarding separation pay to the second batch (theLuris group), because the closure of its plant was dueto serious business losses, as defined in Article 283of the Labor Code. LA:ordered petitioner to pay the complainantstheir respective separation pay, equivalent to one-half month pay for every year of service. NLRC:affirmed LA alleged that there is wrongcomputation when management did not consider 3/4of their length of service as claimed who works only for a fraction of ayear, should not be equated with that of a regularworker. Petitioner submits that the formula for thecomputation of a seasonal workers separation pay is Total No. Of Days actually worked / Total No. Of Working Days in One Yeas x Daily Rate x 15 days complainants claimed that their separationpay should be based on the actual number of yearsthey have been in petitioners company. Issue: Whether the computation adopted by petitioner company in granting com plainants separation pay iserroneous HELD: YES The amount of separation pay is based on two factors: theamount of monthly salary and the number of years of service. Although the Labor Code provides differentd efinitions as to what constitutes one year of service, Book Six does not specifically define one year of service for purposes of computing separation pay. However,Articles 283 and 284 both state in connection withseparation pay that a fraction of at least six months shallbe considered one whole year. Applying this to the case at bar, we hold that the amountof separation pay which respondent members of theLubat and Luris groups should receive is one-half ()their respective averagemonthly pay during the last season they workedmultiplied by the number of years they actually renderedservice, provided that they worked for at least sixmonths during a given year.The formula that petitioner company proposes, whereina year of work is equivalent to actual rendered for 303days, is both unfair and inapplicable, considering

Nevertheless, obscuration of the principle of licitness of term employment began to take place at about this time. Article 320 originally stated that the "termination of employment of probationary employees and those employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may prescribe." Article 321 prescribed the just causes for which an employer could terminate "an employment without a definite period." And Article 319 undertook to define "employment without a fixed period" in the following manner: 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. Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were amended by Presidential Decree No. 850, effective December 16, 1975. Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to persons "employed with a fixed period," and was renumbered (becoming Article 271). As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of employer's using it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head. Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of employment as still good rulea rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being served by her school a notice of termination following the expiration of the last of three successive fixed-term employment contracts, the Court held: Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was probationary, contractual in nature, and one with a definitive period. At the expiration of the period stipulated in the contract, her appointment was deemed terminated and the letter informing her of the non-renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes' contract of employment was due to expire and that the contract would no longer be renewed. It is not a letter of termination. Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the Department of Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of termination, nor an application for clearance to terminate which needed the approval of the Department of Labor to make the termination of his services effective. In any case, such clearance should properly have been given, not denied.

VIERNES VS. NLRC AND BENGUET ELECTRIC COOPERATIVE, INC. (BENECO)G.R. NO. 108405. APRIL 4, 2003.AUSTRIA- MARTINEZ, J. FACTS 1.Petitioners services as meter readers were contracted for hardly a months duration,from October 8 to 31, 1990. 2.The said term notwithstanding, petitioners were allowed to work until January 2,1991. 3.On January 3, 1991, they were each served their identical notices of termination. 4.On the same date, they filed complaints for illegal dismissal. They contended thatthey were not apprentices but regular employees whose services were illegally andunjustly terminated in a manner that was whimsical and capricious. 5.On the other hand, private respondent BENECO invoked Article 283 of the LaborCode in defense of the questioned dismissal. 6.The Labor Arbiter dismissed the complaints for lack of merit. However, it orderedBENECO to extend to the petitioners the contract of temporary employment that theformer had offered, with the exception of Jaime Viernes. Also, the Labor Arbiterdirected BENECO to pay each the amount equivalent to their monthly salary asindemnity for its failure to give complainants the 30-day notice mandated underArticle 283 of the Labor Code. 7.Modifying the Arbiters decision, the NLRC rendered that the dismi ssal was illegal. Itordered petitioners reinstatement to their former position as meter readers or to anyequivalent position with payment of backwages limited to one year deleting theaward of indemnity. ISSUES 1.Whether or not the petitioners should be reinstated to their former position as meter readers on probationary status despite the finding that they are regular employees under Article 280 of the Labor Code. 2.Whether or not the petitioners should be awarded indemnity pay. HELD 1.YES. Reinstatement means restoration to a state or condition from which one hadbeen removed or separated. In case of probationary employment, Article 281 of theLabor Code requires the employer to make known to his employee at the time of thelatters engagement of the reasonable standards under which they may qualify as aregular employee.In the case at bar, there is nothing on the letter of appointment that their employmentas meter readers was on probationary basis. It was not shown that they wereinformed either, at the time of their appointment, the reasonable standards underwhich they could qualify as regular employees. Instead, they were initially engagedto perform their job for a limited period, their employment being fixed for a definiteperiod.The principle enunciated in Brent School, Inc. vs. Zamora applies only to fixed termemployments. While it is true that the petitioners were initially employed on a fixedterm basis as their employment contracts were only for a month, they were allowedto continue working in the same capacity as meter readers without the benefit of anew contract or without the term of their employment being fixed a new. AfterOctober 31, 1991, the employment of petitioners is no longer on a fixed term basis.The complexion of the employment relationship is totally changed for the petitionershave attained the status of regular employees.Under Article 280 of the Labor Code, there are two instances whereby it isdetermined that an employee is regular: (1) the particular activity performed by theemployee is necessary or desirable to the usual trade or business of the employer CSB DIGESTSLABOR STANDARDS LAW-150-or (2) if the employee has been performing the job for at least one year. Thepetitioners fall under the first category. The job of a meter reader is necessary to thebusiness of BENECO since unless the meter reader records the electricconsumption of the subscribing public, there could not be a valid basis for billing thecustomers of BENECO. The fact that the petitioners were allowed to continueworking after the expiration of their employment is evidence of the necessity anddesirability of their service to BENECOs business. Since petitioners are alreadyregular employees at the time of their illegal dismissal from employment, they areentitled to be reinstated to their former position as regular employees, not merelyprobationary.Moreover, under Article 279, as amended by R.A.

No. 6715, an illegally dismissedemployee is entitled to full backwages, inclusive of allowances and to his otherbenefits or their monetary equivalent computed from the time his compensation waswithheld from him up to the time of his actual reinstatement. Therefore, petitionersbackwages should not be limited to one year only. 2.YES. An employer becomes liable to pay indemnity to an employee who has beendismissed if, in effecting such dismissal, the employer fails to comply with therequirements of due process. The indemnity is in the form of nominal damagesintended not to penalize the employer but to vindicate or recognize the employeesright of procedural due process which was violated by the employer. Indemnity is notincompatible with the award of backwages since they are awards based on differentconsiderations. Backwages are granted on the grounds of equity to workers forearnings lost due to their illegal dismissal from work. On the other hand, indemnity ismeant to vindicate the right of an employee to due process which has been violatedby the employer.In the case at bar, BENECO failed to comply with the provisions of Article 283 of theLabor Code which requires an employer to server a notice of dismissal upon theemployees sought to be terminated and to the Department of Labor, at least onemonth before the intended date of termination. Therefore, it was held that the NLRCcommitted grave abuse of discretion in deleting the award of indemnity. [G.R. No. 141717. April 14, 2004]PHILIPS SEMICONDUCTORS (PHILS.), INC., petitioner, vs. ELOISA FADRIQUELA,respondent. FACTS The petitioner Philips Semiconductors is a domestic corporation engaged in the production andassembly of semiconductors such as power devices, RF modules, CATV modules, RF and metaltransistors and glass diods. It caters to domestic and foreign corporations that manufacturecomputers, telecommunications equipment and cars. Aside from contractual employees, thepetitioner employed 1,029 regular workers. The employees were subjected to periodicperformance appraisal based on output, quality, attendance and work attitude.[2] One wasrequired to obtain a performance rating of at least 3.0 for the period covered by theperformance appraisal to maintain good standing as an employee.Respondent, during her 5 consecutive contracts, got the following ratings: 3.15, 3.8, 3.4, and2.8. The reason for her failed mark on the last contract was her absences. She was then askedto explain such supervisorrecommended that her employment be terminated due to habitual absenteeism. Thus, hercontract of employment was no longer renewed. Respondent then filed a complaint for illegaldismissal. On the other hand, petitioner contends that respondent was not dismissed; hercontract merely expired. The Labor Arbiter and the NLRC based their decision on the CBA between the petitioner and thelabor union which provides that a contractual employee would only be considered a regularemployee if he has completed 17 months of service and a performance rating of at least 3.0.The respondent filed a motion for reconsideration but the NLRC denied the same. On appeal,the CA reversed the decision of the NLRC. Hence, this petition. ISSUE Whether or not respondent was still a contractual employee of the company.

casuals of our lowly employees by the simple expedient of extending to themtemporary or probationary appointments, ad infinitum.The two kinds of regular employees under the law are (1) those engaged to perform activitieswhich are necessary or desirable in the usual business or trade of the employer; and (2) thosecasual employees who have rendered at least one year of service, whether continuous orbroken, with respect to the activities in which they are employed. The primary standard todetermine a regular employment is the reasonable connection between the particular activityperformed by the employee in relation to the business or trade of the employer. The test iswhether the former is usually necessary or desirable in the usual business or trade of theemployer. If the employee has been performing the job for at least one year, even if theperformance is not continuous or merely intermittent, the law deems the repeated andcontinuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business of the employer. Hence, the employment is alsoconsidered regular, but only with respect to such activity and while such activity exists. The lawdoes not provide the qualification that the employee must first be issued a regular appointment or must be declared as such before he can acquire a regular employee status.In this case, the original contract of employment had been extended or renewed four times, tothe same position, with the same chores. Such a continuing need for the services of therespondent is sufficient evidence of the necessity and indispensability of her services to d attained the regular statusof her employment with the petitioner, and is thus entitled to security of tenure as provided forin Article 279 of the contract having been imposed preciselyto circumvent the constitutional guarantee on security of tenure should, therefore, be struckdown or disregarded as contrary to public policy or morals. To uphold the contractualarrangement would, in effect, permit the former to avoid hiring permanent or regularemployees by simply hiring them on a tenure in their jobs.Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure theworkers of security of tenure and free them from the bondage of uncertainty of tenure wovenby some employers into their contracts of employment. The guarantee is an act of social justice. When a person has no property, his job may possibly be his only possession or meansof livelihood and those of his dependents. When a person loses his job, his dependents suffer as well. The worker should therefor be protected and insulated against any arbitrary deprivationof his job.The ruling in Brent School, Inc. v. Zamora is also not applicable in this case because it could not be supposed that private respondents and all other soVOLUNTARILY agreed to the employment contract. Almost always, they agreeto any terms of an employment contract just to get employed considering that it is difficult tofind work given their ordinary qualifications. Their freedom to contract is empty and hollowbecause theirs is the freedom to starve if they refuse to work as casual or contractual workers.Indeed, to the unemployed, security of tenure has no value. It could not then be said that petitioner and private respondents dominance whatever being exercised by the former over the latter.The iance on the CBA is also misplaced. It is the express mandate of the CBA not to include contractual employees within its coverage. Such being the case, we see no reasonwhy an agreement between the representative union and private respondent, delaying theregularization of contractual employees, should bind petitioner as well as other contractualemployees. Indeed, nothing could be more unjust than to exclude contractual employees fromthe benefits of the CBA on the premise that the same contains an exclusionary clause while at the same time invoke a collateral agreement entered into between the parties to the CBA toprevent a contractual employee from attaining the status of a regular employee.The CBA, during its lifetime, constitutes the law between the parties. Such being the rule, theaforementioned CBA should be binding only upon private respondent and its regular employeeswho were duly represented by the bargaining union. The agreement embodied private respondent, providing that contractual employees shall become regular employees only after seventeen months of employment, cannot bind petitioner. Such a provision runs contrary to law not only becausecontractual employees do not form part of the collective bargaining unit which entered into theCBA with private respondent but

HELD The SC agreed with the appellate court. Article 280 of the Labor Code of the Philippines wasemplaced in our statute books to prevent the secure in his tenure by indiscriminately and completely ruling out allwritten and oral agreements inconsistent with the concept of regular employment definedtherein. The language of the law manifests the intent to protect the tenurial interest of theworker who may be denied the rights and benefits due a regular employee because of lopsidedagreements with the economically powerful employer who can maneuver to keep an employeeon a casual or temporary status for as long as it is convenient to it. In tandem with Article 281of the Labor Code, Article 280 was designed to put an end to the pernicious practice of makingpermanent

also because of the Labor Code provision on regularization.The law explicitly states that an employee who had rendered at least one year of service,whether such service is continuous or broken, shall be considered a regular employee. Theperiod set by law is one year. The seventeen The principle is well settled that the law forms part of and is read intoevery contract without the need for the parties expressly making reference to it.Petition is denied.

[G.R. No. 149329 July 12, 2004]ROSITA PANGILINAN, YOLANDA LAYOLA, SALLY GOLDE, AIDA QUITE, FERDINANDCALE, RAUL ARUITA, MANUEL ERIFUL, ARNEL PAULO, ROSEMARIE GEOTINA,SAMUELA KUMAR, REBECCA PEREZ, EDGAR BELLO, JOSEPH SORIANO, DANILO AMPULLER, TOLENTINO CALLAO, MANOLITA MANALANG, TORIBIO LETIM, NANCYBELGICA, ALFREDO ARELLANO, JOSEFA CEBUJANO, JUN DEL ROSARIO, AVELINO AGUILAR, MILAROSA TIAMSON, EDNA DICHOSO, JASMIN BOLISAY, JULIETA DIDAL,GERARDO BARISO, ANGELITO PEAFLOR, NERISSA LETIM, ALEXANDER BARBOSA,ELIZABETH SAENS, NYMPHA LUGTU, MYRNA MORALES, LIZA CRUZ, ELENA FANG,EDNA CRUZA, GORGONIO PALMA, JOSE VERGARA, ALDRIN REMORQUE, RUDYBLANCO, MARIO BUENVIAJE, MA. CRISTY CEA, REYNALDO GUELAS VILLASENOR,RHOY TADO, LYDIA SALIPOT, ANGELITO PEREZ VERGARA, RODOLFO GACHO,JESSIE SAN PEDRO, MARINAO ORCA, JR., PEBELITO LERONA, PEPE CONGRESO,NIMFA NAPAO, WILHELMINA BAGUISA, OLIVIA CAINCAY, JERRY MANUEL NICOLAS,CARLOS ABRATIQUE, JESUS LIM, JR., AND GERRY ROXAS, Petitioners, - versus GENERAL MILLING CORPORATION, Respondent. FACTS The respondent General Milling Corporation is a domestic corporation engaged in the productionand sale of livestock and poultry. It is, likewise, the distributor of dressed chicken to variousrestaurants and establishments nationwide. As such, it employs hundreds of employees, ent dates as emergency workers at its poultry plant inCainta, Rizal, under fivemonths. Most of them worked as chicken dressers, while the others served as packers orhelpers. Upon the expiration of their respective contracts, their services were terminated. Theylater filed separate complaints for illegal dismissal and non-payment of holiday pay, 13th monthpay, night-shift differential and service incentive leave pay against the respondent before the Arbitration Branch of the National Labor Relations Commission. The petitioners alleged that their work as chicken dressers was necessary and desirable in theusual business of the respondent, and added that although they worked from 10:00 p.m. to6:00 a.m., they were not paid night-shift differential. They stressed that based on the nature of their work, they were regular employees of the respondent; hence, could not be dismissed fromtheir employment unless for just cause and after due notice. They asserted that the respondent GMC terminated their contract of employment without just cause and due notice. They furtherargued that the respondent could not rely on the nomenclature of their employment as ISSUE Whether or not the petitioners were regular employees of the respondent GMC when theiremployment was terminated. HELD The SC held the petitioners were employees with a fixed period, and, as such, were not regularemployees. Article 280 of the Labor Code comprehends three kinds of employees: (a) regularemployees or those whose work is necessary or desirable to the usual business of theemployer; (b) project employees or those whose employment has been fixed for a specificproject or undertaking the completion or termination

of which has been determined at the timeof the engagement of the employee or where the work or services to be performed is seasonalin nature and the employment is for the duration of the season; and, (c) casual employees orthose who are neither regular nor project employees. A regular employee is one who is engaged to perform activities which are necessary anddesirable in the usual business or trade of the employer as against those which are undertakenfor a specific project or are seasonal.[41] There are two separate instances whereby it can bedetermined that an employment is regular: (1) if the particular activity performed by theemployee is necessary or desirable in the usual business or trade of the employer; and, (2) if the employee has been performing the job for at least a year. Article 280 of the Labor Codedoes not proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow that where the duties of the employee consist of activities usually necessaryor desirable in the usual business of the employer, the parties are forbidden from agreeing on aperiod of time for the performance of such activities. There is thus nothing essentiallycontradictory between a definite period of employment and the tipulations in employment contracts providing for term employment or fixed periodemployment are valid when the period were agreed upon knowingly and voluntarily by theparties without force, duress or improper pressure, being brought to bear upon the employeeand absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moraldominance whatever being exercised by the former over the latter. An examination of thecontracts entered into by the petitioners showed that their employment was limited to a fixedperiod, usually five or six months, and did not go beyond such period. The records reveal that the stipulations in the employment contracts were knowingly and voluntarily agreed to by thepetitioners without force, duress or improper pressure, or any circumstances that vitiated theirconsent. Similarly, nothing therein shows that these contracts were used as a subterfuge by the respondent GMC to evade the provisions of Articles 279 and 280 of the assigned as chicken dressers, packersand helpers at the Cainta Processing necessary and desirable in the usual business of the respondent, they wereemployed on a mere temporary basis, since their employment was limited to a fixed period. Assuch, they cannot be said to be regular nsequently, there byreason of the expiration of their contracts. Lack of notice of termination is of no consequence,because when the contract specifies the period of its duration, it terminates on the expiration of such period. A contract for employment for a definite period terminates by its own term at theend of such period.Petition is denied. CLARION PRINTING HOUSE, INC., and YUTINGCO vs. NLRC and MICLAT G.R. No. 148372 June 27, 2005 FACTS: Respondent Miclat was employed on a probationary basis as marketing assistant by petitioner Clarion which is owned by Yutingco. The EYCO Group of Companies of which CLARION formed part filed with the SEC a Petition for the Declaration of Suspension of Payment, Formation and Appointment of Rehabilitation Receiver/ Committee, Approval of Rehabilitation Plan with Alternative Prayer for Liquidation and Dissolution of Corporation. The SEC issued an Order approving the creation of an interim receiver for the EYCO Group of Companies. The Assistant Personnel Manager of CLARION informed Miclat by telephone that her employment contract had been terminated. No reason was given for the termination. In her Position Paper filed before the labor arbiter, Miclat claimed that assuming that her termination was necessary, the manner in which it was carried out was illegal, no written notice thereof having been served on her, and she merely learned of it only a day before it became effective. On the other hand, petitioners claimed that they could not be faulted for retrenching some of its employees including Miclat, they drawing attention to the EYCO Group of Companies being placed under

receivership, notice of which was sent to its supervisors and rank and file employees via a Memorandum. The Labor arbiter found that Miclat was illegally dismissed and directed her reinstatement. The NLRC affirmed the labor arbiters decision. The CA sustained the resolutions of the NLRC; it also denied petitioners MR of the decision. HELD: WHEREFORE, the CA Decision, together (sustaining NLRC) is SET ASIDE and another rendered declaring the legality of the dismissal of respondent Miclat. Petitioners are ORDERED, however, to PAY her the following in accordance with the foregoing discussions: nominal, separation pay; and 13th month pay. Let a copy of this Decision be furnished the SEC Hearing Panel charged with the liquidation and dissolution of petitioner corporation for inclusion, in the list of claims of its creditors, respondent Miclats claims.. On Miclats termination: According to P.D. No. 902-A, as amended, the appointment of a receiver or management committee by the SEC presupposes a finding that, inter alia, a company possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they respectively fall due and there is imminent danger of dissipation, loss, wastage or destruction of assets of other properties or paralization of business operations. However, ART. 283 of the Labor Code states: CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy,retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. x x x (Emphasis and underscoring supplied) CLARION [however] failed to comply with the notice requirement provided for in Article 283 of the Labor Code. Stated differently, Miclats termination is justified, because of financial difficulties of the company, but failure to give the required notice by Clarion is sufficient to entitle her to payment of 13th month pay, separation pay and others. ** With the appointment of a management receiver, all claims and proceedings against CLARION, including labor claims, were deemed suspended during the existence of the receivership. The labor arbiter, the NLRC, as well as the CA should not have proceeded to resolve respondents complaint for illegal dismissal and should instead have directed respondent to lodge her claim before the then duly-appointed receiver of CLARION. To still require respondent, however, at this time to refile her labor claim against CLARION under the peculiar circumstances of the case that 8 years have lapsed since her termination and that all the arguments and defenses of both parties were already ventilated before the labor arbiter, NLRC and the CA; and that CLARION is already in the course of liquidation this Court deems it most expedient and advantageous for both parties that CLARIONs liability be determined with finality, instead of still requiring respondent to lodge her claim at this time before the liquidators of CLARION which would just entail a mere reiteration of what has been already argued and pleaded. Furthermore, it would be in the best interest of the other creditors of CLARION that claims against the company be finally settled and determined so as to further expedite the liquidation proceedings. For the lesser number of claims to be proved, the sooner the claims of all creditors of CLARION are processed and settled. NOTES: Sections 5 and 6 of P.D. 902-A (reorganization of the SEC with additional powers and placing said agency under the administrative supervision of the office of the president), as amended, read: SEC. 5 In addition to the regulatory and adjudicative functions of THE SECURITIES AND EXCHANGE COMMISSION over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving: xxx

(d) Petitions of corporations, partnerships or associations declared in the state of suspension of payments in cases where the corporation, partnership or association possesses sufficient property to cover all debts but foresees the impossibility of meeting them when they respectively fall due or in cases where the corporation, partnership, association has no sufficient assets to cover its liabilities, but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree. SEC. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers: xxx (c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in accordance with the provisions of the Rules of Court in such other cases whenever necessary in order to preserve the rights of the parties-litigants and/or protect the interest of the investing public and creditors: Provided, however, That the Commission may in appropriate cases, appoint a rehabilitation receiver of corporations, partnerships or other associations not supervised or regulated by other government agencies who shall have, in addition to powers of the regular receiver under the provisions of the Rules of Court, such functions and powers as are provided for in the succeeding paragraph (d) hereof: x x x (d) To create and appoint a management committee, board or body upon petition or motu propio to undertake the management of corporations, partnership or other associations not supervised or regulated by other government agencies in appropriate cases when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralization of business operations of such corporations or entities which may be prejudicial to the interest of minority stockholders, partieslitigants of the general public: x x x (Emphasis and underscoring supplied).

discretion or merely arbitrary or malicious action on the part of management is shown. In thecase at bar, the closure of the Manila and Antipolo plants and the resulting termination of theemployment of 646 employees is not tainted with bad faith. As found by the NLRC, the conducted which establishedthat the most prudent course of action for the private respondent was to stop operations in saidplants and transfer production to other more modern and technologically advanced plants of private respondent.Other than its mere allegations, petitioner union failed to show that the closure of the twoplants was without factual basis and done in utter bad faith. No evidence was presented bypetitioner to prove its assertion that private respondent resorted to the closure of the Manilaand Antipolo plants to prevent the renegotiations of the CBA entered into between the parties. As adequately explained by the NLRC, the subject closure and the resulting termination of the639 employees was due to legitimate business considerations, as evidenced by the technicalstudy conducted by private respondent. Anent the allegation that private respondent failed to comply with the notice requirements asprovided by the Labor Code in the cessation of its operations, the employees were servednotice on 9 December 1999 that their employment were being severed effective 1 March 2000;however they were no longer required to report for work but they will continue to receive theirsalary up to 29 February 2000. Therefore, as enunciated in the ruling in Serrano v. NLRC, saidact of private respondent constitutes substantial compliance with the notice requirement of theLabor Code.Decision of CA is affirmed. [G.R. No. 161654 May 5, 2006]DUSIT HOTEL NIKKO, Petitioner, vs. RENATO M. GATBONTON, Respondent. FACTS On November 21, 1998, respondent Renato M. Gatbonton was hired as Chief Steward inpetitioner Dusit and Beverage Department. He signed a three-monthprobationary employment contract until February 21, 1999, with a monthly salary of P25,000. At the start of his employment, the standards by which he would be assessed to qualify forregular employment were explained to him.

The hotel alleged that at the end of the probation period, Ingo Rauber, Director of its Food andBeverage Department, observed that Gatbonton failed to meet the qualification standards forChief Steward, and Rauber recommended a twoprobationaryperiod, or until April 22, 1999. At the end of the 4th month, on March 24, 1999, Rauberinformed Gatbonton that the latter had poor ratings on staff supervision, productivity, quantityof work, and overall efficiency and did not qualify as Chief Steward. Gatbonton requestedanother month or until April 22, 1999 to improve his performance, to which Rauber agreed but allegedly refused to sign the Performance Evaluation Form. Neither did he sign theMemorandum on the extension.On March 31, 1999, a notice of termination of probationary employment effective April 9, 1999,on the above alleged grounds was served on Gatbonton. On April 12, 1999, he filed acomplaint for illegal dismissal and non-payment of wages, with prayers for reinstatement, fullbackwages, and damages, fees. ISSUE Whether or not respondent was a regular employee at the time of his dismissal. HELD The SC held that as Article 281 clearly states, a probationary employee can be legallyterminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regularemployee in accordance with the reasonable standards made known to him by the employer at the start of the employment. Nonetheless, the power of the employer to terminate anemployee on probation is not without limitations. First, this power must be exercised inaccordance with the specific requirements of the contract. Second, the dissatisfaction on thepart of the employer must be real and in good faith, not feigned so as to circumvent thecontract or the law; and third, there must be no unlawful discrimination in the dismissal. Intermination cases, the burden of proving just or valid cause for dismissing an employee rests onthe employer. Here, the petitioner did not present proof that the respondent was evaluated from November21, 1998 to February 21, 1999, nor that his probationary employment was validly extended.The petitioner alleged -month probationaryemployment, Rauber recommended that the period be extended for two months sincerespondent Gatbonton was not yet ready for regular employment. The petitioner presented aPersonnel Action Form containing the recommendation. We observed, however, that thisdocument was prepared on March 31, 1999, the end of the 4th month of the was termination of probationary employment effective April 9, 1999, and not extension of probation period. Upon appeal to the NLRC, thepetitioner presented another Personnel Action Form prepared on March 2, 1999, showing that was extended for two months effective February 23,1999. The Personnel Action Form dated March 2, 1999, contained the ) Yet, we find thisdocument inconclusive. First, the action form did not contain the results of the Without the evaluation, the action form had no basis. Second, the action formspoke of an attached memo which the probation period for two months. Again, thesupposed Memorandum was not presented. Third, the action form did not bear sence of any evaluation or valid extension, we cannot conclude that respondent failedto meet the standards of performance set by the hotel for a chief steward. At the expiration of the three-month period, Gatbonton had become a regular employee. It is an elementary rule inthe law on labor relations that a probationary employee engaged to work beyond theprobationary period of six months, as provided under Article 281 of the Labor Code, or for anylength of time set forth by the employer (in this case, three months), shall be considered aregular employee. This is clear in the last sentence of Article 281. Any circumvention of protection for labor.Since respondent was not dismissed for a just or

authorized cause, his dismissal was illegal, andhe is entitled to reinstatement without loss of seniority rights, and other privileges as well as tofull backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actualreinstatement.Petition is denied.