G.R. No.

163700

April 18, 2012 "Etched in an unending stream of cases are the four (4) standards in determining the existence of an employeremployee relationship, namely, (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of power of dismissal; and, (d) the presence or absence of control of the putative employees conduct." Of these powers the power of control over the employees conduct is generally regarded as determinative of the existence of the relationship. Apparently, in the case before us, all these four elements are absent. First, there is no proof that the services of the private respondent were engaged to perform the duties of a comptroller in the petitioner company. There is no proof that the private respondent has undergone a selection procedure as a standard requisite for employment, especially with such a delicate position in the company. Neither is there any proof of his appointment nor is there any showing that the parties entered into an employment contract, stipulating thereof that he will receive P20,000.00/month salary as comptroller, before the private respondent commenced with his work as such. Second, as clearly established on record, the private respondent was not included in the petitioner companys payroll during the time of his alleged employment with the former. True, the name of the private respondent Charlie Jao appears in the payroll however it does not prove that he has received his remuneration for his services. Notably, his name was not among the employees who will receive their salaries as represented by the payrolls. Instead, it appears therein as a comptroller who is authorized to approve the same. Suffice it to state that it is rather obscure for a certified public accountant doing the functions of a comptroller from September 1995 up to December 1995 not to receive his salary during the said period. Verily, such scenario does not conform with the usual and ordinary experience of man. Coming now to the most controlling factor, the records indubitably reveal the undisputed fact that the petitioner company did not have nor did not exercise the power of control over the private respondent. It did not prescribe the manner by which the work is to be carried out, or the time by which the private respondent has to report for and leave from work. As already stated, the power of control is such an important factor that other requisites may even be disregarded. In Sevilla v. Court of Appeals, the Supreme Court emphatically held, thus: "The "control test," under which the person for whom the services are rendered reserves the right to direct not only the end to be achieved but also the means for reaching such end, is generally relied on by the courts." We have carefully examined the evidence submitted by the private respondent in the formal offer of evidence and unfortunately, other than the bare assertions of the private respondent which he miserably failed to substantiate, we find nothing therein that would decisively indicate that the petitioner BCC exercised the fundamental power of control over the private respondent in relation to his employmentnot even the ID issued to the private respondent and the affidavits executed by Bertito Jemilla and Rogelio Santias. At best, these pieces of documents merely suggest the existence of employer-employee relationship as intimated by the NLRC. On the contrary, it would appear that the said sworn statement provided a substantial basis to support the contention that the private respondent worked at the petitioner BCC as SFCs representative, being its major creditor and supplier of goods and merchandise. Moreover, as clearly pointed out by the petitioner in his Reply to the private respondents Comment, it is unnatural for SFC to still employ the private respondent "to oversee and supervise collections of account receivables due SFC from its customers or clients" like the herein petitioner BCC on a date later than December, 1995 considering that a criminal complaint has already been instituted against him. Sadly, the private respondent failed to sufficiently discharge the burden of showing with legal certainty that employee-employer relationship existed between the parties. On the other hand, it was clearly shown by the petitioner that it neither exercised control nor supervision over the conduct of the private respondents employment. Hence, the allegation that there is employer-employee relationship must necessarily fail.

CHARLIE JAO, Petitioner, vs. BCC PRODUCTS SALES INC., and TERRANCE TY, Respondents. DECISION BERSAMIN, J.: The issue is whether petitioner was respondents employee or not. Respondents denied an employer-employee relationship with petitioner, who insisted the contrary. Through his petition for review on certiorari, petitioner appeals the decision promulgated by the Court of Appeals (CA) on February 27, 2004,1 finding no employee-employer relationship between him and respondents, thereby reversing the ruling by the National Labor Relations Commission (NLRC) to the effect that he was the employee of respondents. Antecedents Petitioner maintained that respondent BCC Product Sales Inc. (BCC) and its President, respondent Terrance Ty (Ty), employed him as comptroller starting from September 1995 with a monthly salary of P20,000.00 to handle the financial aspect of BCCs business;2 that on October 19,1995, the security guards of BCC, acting upon the instruction of Ty, barred him from entering the premises of BCC where he then worked; that his attempts to report to work in November and December 12, 1995 were frustrated because he continued to be barred from entering the premises of BCC;3 and that he filed a complaint dated December 28, 1995 for illegal dismissal, reinstatement with full backwages, non-payment of wages, damages and attorneys fees.4 Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation (SFC), the major creditor and supplier of BCC; and that SFC had posted him as its comptroller in BCC to oversee BCCs finances and business operations and to look after SFCs interests or investments in BCC.5 Although Labor Arbiter Felipe Pati ruled in favor of petitioner on June 24, 1996,6 the NLRC vacated the ruling and remanded the case for further proceedings.7 Thereafter, Labor Arbiter Jovencio Ll. Mayor rendered a new decision on September 20, 2001, dismissing petitioners complaint for want of an employer-employee relationship between the parties.8 Petitioner appealed the September 20, 2001 decision of Labor Arbiter Mayor. On July 31, 2002, the NLRC rendered a decision reversing Labor Arbiter Mayors decision, and declaring that petitioner had been illegally dismissed. It ordered the payment of unpaid salaries, backwages and 13th month pay, separation pay and attorneys fees.9 Respondents moved for the reconsideration of the NLRC decision, but their motion for reconsideration was denied on September 30, 2002.10 Thence, respondents assailed the NLRC decision on certiorari in the CA. Ruling of the CA On February 27, 2004, the CA promulgated its assailed decision,11 holding: After a judicious review of the records vis--vis the respective posturing of the contending parties, we agree with the finding that no employer-employee relationship existed between petitioner BCC and the private respondent. On this note, the conclusion of the public respondent must be reversed for being issued with grave abuse of discretion.

Consequently, a discussion on the issue of illegal dismissal therefore becomes unnecessary. WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision of the public respondent NLRC dated July 31, 2002 and the Resolution dated September 30, 2002 are REVERSED and SET ASIDE. Accordingly, the decision of the Labor Arbiter dated September 20, 2001 is hereby REINSTATED. SO ORDERED. After the CA denied petitioners motion for reconsideration on May 14, 2004,12 he filed a motion for extension to file petition for review, which the Court denied through the resolution dated July 7, 2004 for failure to render an explanation on why the service of copies of the motion for extension on respondents was not personally made.13 The denial notwithstanding, he filed his petition for review on certiorari. The Court denied the petition on August 18, 2004 in view of the denial of the motion for extension of time and the continuing failure of petitioner to render the explanation as to the non-personal service of the petition on respondents.14 However, upon a motion for reconsideration, the Court reinstated the petition for review on certiorari and required respondents to comment.15 Issue The sole issue is whether or not an employer-employee relationship existed between petitioner and BCC. A finding on the existence of an employer-employee relationship will automatically warrant a finding of illegal dismissal, considering that respondents did not state any valid grounds to dismiss petitioner. Ruling The petition lacks merit. The existence of an employer-employee relationship is a question of fact. Generally, a re-examination of factual findings cannot be done by the Court acting on a petition for review on certiorari because the Court is not a trier of facts but reviews only questions of law. Nor may the Court be bound to analyze and weigh again the evidence adduced and considered in the proceedings below.16 This rule is not absolute, however, and admits of exceptions. For one, the Court may look into factual issues in labor cases when the factual findings of the Labor Arbiter, the NLRC, and the CA are conflicting.17 Here, the findings of the NLRC differed from those of the Labor Arbiter and the CA. This conflict among such adjudicating offices compels the Courts exercise of its authority to review and pass upon the evidence presented and to draw its own conclusions therefrom. To prove his employment with BCC, petitioner offered the following: (a) BCC Identification Card (ID) issued to him stating his name and his position as "comptroller," and bearing his picture, his signature, and the signature of Ty; (b) a payroll of BCC for the period of October 1-15, 1996 that petitioner approved as comptroller; (c) various bills and receipts related to expenditures of BCC bearing the signature of petitioner; (d) various checks carrying the signatures of petitioner and Ty, and, in some checks, the signature of petitioner alone; (e) a court order showing that the issuing court considered petitioners ID as proof of his employment with BCC; (f) a letter of petitioner dated March 1, 1997 to the Department of Justice on his filing of a criminal case for estafa against Ty for non-payment of wages; (g) affidavits of some employees of BCC attesting that petitioner was their co-employee in BCC; and (h) a notice of raffle dated December 5, 1995 showing that petitioner, being an employee of BCC, received the notice of raffle in behalf of BCC.18 Respondents denied that petitioner was BCCs employee. They affirmed that SFC had installed petitioner as its comptroller in BCC to oversee and supervise SFCs collections and the account of BCC to protect SFCs interest; that their issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises in relation to his work of overseeing the financial operations of BCC for SFC; that the ID should not be considered as evidence of petitioners employment in BCC;19 that petitioner executed an affidavit in March 1996,20 stating, among others, as follows: 1. I am a CPA (Certified Public Accountant) by profession but presently associated with, or employed by, Sobien Food Corporation with the same business address as abovestated; 2. In the course of my association with, or employment by, Sobien Food Corporation (SFC, for short), I have been entrusted by my employer to oversee and supervise collections on account of receivables due SFC from its customers or clients; for instance, certain checks due and turned over by one of SFCs customers is BCC Product Sales, Inc., operated or run by one Terrance L. Ty, (President and General manager), pursuant to, or in accordance with, arrangements or agreement thereon; such arrangement or agreement is duly confirmed by said Terrance Ty, as shown or admitted by him in a public instrument executed therefor, particularly par. 2 of that certain CounterAffidavit executed and subscribed on December 11, 1995, xerox copy of which is hereto attached, duly marked as Annex "A" and made integral part hereof. 3. Despite such admission of an arrangement, or agreement insofar as BCC-checks were delivered to, or turned over in favor of SFC, Mr. Terrance Ty, in a desire to blemish my reputation or to cause me dishonor as well as to impute unto myself the commission of a crime, state in another public instrument executed therefor in that: "3. That all the said 158 checks were unlawfully appropriated by a certain Charlie Jao absolutely without any authority from BCC and the same were reportedly turned over by said Mr. Jao to a person who is not an agent or is not authorized representative of BCC." xerox copy of which document (Affidavit) is hereto attached, duly marked as Annex "B" and made integral part hereof. (emphasis supplied) and that the affidavit constituted petitioners admission of the arrangement or agreement between BCC and SFC for the latter to appoint a comptroller to oversee the formers operations. Petitioner counters, however, that the affidavit did not establish the absence of an employer-employee relationship between him and respondents because it had been executed in March 1996, or after his employment with respondents had been terminated on December 12, 1995; and that the affidavit referred to his subsequent employment by SFC following the termination of his employment by BCC.21 We cannot side with petitioner. Our perusal of the affidavit of petitioner compels a conclusion similar to that reached by the CA and the Labor Arbiter to the effect that the affidavit actually supported the contention that petitioner had really worked in BCC as SFCs representative. It does seem more natural and more believable that petitioners affidavit was referring to his employment by SFC even while he was reporting to BCC as a comptroller in behalf of SFC. As respondents pointed out, it was implausible for SFC to still post him to oversee and supervise the collections of accounts receivables due from BCC beyond December 1995 if, as he insisted, BCC had already illegally dismissed him and had even prevented

him from entering the premises of BCC. Given the patent animosity and strained relations between him and respondents in such circumstances, indeed, how could he still efficiently perform in behalf of SFC the essential responsibility to "oversee and supervise collections" at BCC? Surely, respondents would have vigorously objected to any arrangement with SFC involving him. We note that petitioner executed the affidavit in March 1996 to refute a statement Ty himself made in his own affidavit dated December 11, 1995 to the effect that petitioner had illegally appropriated some checks without authority from BCC.22 Petitioner thereby sought to show that he had the authority to receive the checks pursuant to the arrangements between SFC and BCC. This showing would aid in fending off the criminal charge respondents filed against him arising from his mishandling of the checks. Naturally, the circumstances petitioner adverted to in his March 1996 affidavit concerned those occurring before December 11, 1995, the same period when he actually worked as comptroller in BCC. Further, an affidavit dated September 5, 2000 by Alfredo So, the President of SFC, whom petitioner offered as a rebuttal witness, lent credence to respondents denial of petitioners employment. So declared in that affidavit, among others, that he had known petitioner for being "earlier his retained accountant having his own office but did not hold office" in SFCs premises; that Ty had approached him (So) "looking for an accountant or comptroller to be employed by him (Ty) in *BCCs+ distribution business" of SFCs general merchandise, and had later asked him on his opinion about petitioner; and that he (So) had subsequently learned that "Ty had already employed [petitioner] as his comptroller as of September 1995."23 The statements of So really supported respondents position in that petitioners association with SFC prior to his supposed employment by BCC went beyond mere acquaintance with So. That So, who had earlier merely "retained" petitioner as his accountant, thereafter employed petitioner as a "retained" accountant after his supposed illegal dismissal by BCC raised a doubt as to his employment by BCC, and rather confirmed respondents assertion of petitioner being an employee of SFC while he worked at BCC. Moreover, in determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element.24 Hereunder are some of the circumstances and incidents occurring while petitioner was supposedly employed by BCC that debunked his claim against respondents. It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that he contested respondents challenge by pointing to the existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control over him, because he thereby acted for the benefit and in the interest of SFC more than of BCC. In addition, petitioner presented no document setting forth the terms of his employment by BCC.1wphi1 The failure to present such agreement on terms of employment may be understandable and expected if he was a common or ordinary laborer who would not jeopardize his employment by demanding such document from the employer, but may not square well with his actual status as a highly educated professional.

Petitioners admission that he did not receive his salary for the three months of his employment by BCC, as his complaint for illegal dismissal and non-payment of wages25 and the criminal case for estafa he later filed against the respondents for non-payment of wages26 indicated, further raised grave doubts about his assertion of employment by BCC. If the assertion was true, we are puzzled how he could have remained in BCCs employ in that period of time despite not being paid the first salary of P20,000.00/month. Moreover, his name did not appear in the payroll of BCC despite him having approved the payroll as comptroller. Lastly, the confusion about the date of his alleged illegal dismissal provides another indicium of the insincerity of petitioners assertion of employment by BCC. In the petition for review on certiorari, he averred that he had been barred from entering the premises of BCC on October 19, 1995,27 and thus was illegally dismissed. Yet, his complaint for illegal dismissal stated that he had been illegally dismissed on December 12, 1995 when respondents security guards barred him from entering the premises of BCC,28 causing him to bring his complaint only on December 29, 1995, and after BCC had already filed the criminal complaint against him. The wide gap between October 19, 1995 and December 12, 1995 cannot be dismissed as a trivial inconsistency considering that the several incidents affecting the veracity of his assertion of employment by BCC earlier noted herein transpired in that interval. With all the grave doubts thus raised against petitioners claim, we need not dwell at length on the other proofs he presented, like the affidavits of some of the employees of BCC, the ID, and the signed checks, bills and receipts. Suffice it to be stated that such other proofs were easily explainable by respondents and by the aforestated circumstances showing him to be the employee of SFC, not of BCC. WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and ORDERS petitioner to pay the costs of suit. SO ORDERED.

G.R. No. 192084

September 14, 2011

JOSE MEL BERNARTE, Petitioner, vs. PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL M. EALA, and PERRY MARTINEZ, Respondents. DECISION CARPIO, J.: The Case This is a petition for review1 of the 17 December 2009 Decision2 and 5 April 2010 Resolution3 of the Court of Appeals in CA-G.R. SP No. 105406. The Court of Appeals set aside the decision of the National Labor Relations Commission (NLRC), which affirmed the decision of the Labor Arbiter, and held that petitioner Jose Mel Bernarte is an independent contractor, and not an employee of respondents Philippine Basketball Association (PBA), Jose Emmanuel M. Eala, and Perry Martinez. The Court of Appeals denied the motion for reconsideration. The Facts

The facts, as summarized by the NLRC and quoted by the Court of Appeals, are as follows: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees. During the leadership of Commissioner Emilio Bernardino, they were made to sign contracts on a year-to-year basis. During the term of Commissioner Eala, however, changes were made on the terms of their employment. Complainant Bernarte, for instance, was not made to sign a contract during the first conference of the All-Filipino Cup which was from February 23, 2003 to June 2003. It was only during the second conference when he was made to sign a one and a half month contract for the period July 1 to August 5, 2003. On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising him that his contract would not be renewed citing his unsatisfactory performance on and off the court. It was a total shock for Bernarte who was awarded Referee of the year in 2003. He felt that the dismissal was caused by his refusal to fix a game upon order of Ernie De Leon. On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of referees in February 2001. On March 1, 2001, he signed a contract as trainee. Beginning 2002, he signed a yearly contract as Regular Class C referee. On May 6, 2003, respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of referees officiating out-of-town games. Beginning February 2004, he was no longer made to sign a contract. Respondents aver, on the other hand, that complainants entered into two contracts of retainer with the PBA in the year 2003. The first contract was for the period January 1, 2003 to July 15, 2003; and the second was for September 1 to December 2003. After the lapse of the latter period, PBA decided not to renew their contracts. Complainants were not illegally dismissed because they were not employees of the PBA. Their respective contracts of retainer were simply not renewed. PBA had the prerogative of whether or not to renew their contracts, which they knew were fixed.4 In her 31 March 2005 Decision,5 the Labor Arbiter6 declared petitioner an employee whose dismissal by respondents was illegal. Accordingly, the Labor Arbiter ordered the reinstatement of petitioner and the payment of backwages, moral and exemplary damages and attorneys fees, to wit: WHEREFORE, premises considered all respondents who are here found to have illegally dismissed complainants are hereby ordered to (a) reinstate complainants within thirty (30) days from the date of receipt of this decision and to solidarily pay complainants:

The rest of the claims are hereby dismissed for lack of merit or basis. SO ORDERED.7 In its 28 January 2008 Decision,8 the NLRC affirmed the Labor Arbiters judgment. The dispositive portion of the NLRCs decision reads: WHEREFORE, the appeal is hereby DISMISSED. The Decision of Labor Arbiter Teresita D. Castillon-Lora dated March 31, 2005 is AFFIRMED. SO ORDERED.9 Respondents filed a petition for certiorari with the Court of Appeals, which overturned the decisions of the NLRC and Labor Arbiter. The dispositive portion of the Court of Appeals decision reads: WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated January 28, 2008 and Resolution dated August 26, 2008 of the National Labor Relations Commission are ANNULLED and SET ASIDE. Private respondents complaint before the Labor Arbiter is DISMISSED. SO ORDERED.10 The Court of Appeals Ruling The Court of Appeals found petitioner an independent contractor since respondents did not exercise any form of control over the means and methods by which petitioner performed his work as a basketball referee. The Court of Appeals held: While the NLRC agreed that the PBA has no control over the referees acts of blowing the whistle and making calls during basketball games, it, nevertheless, theorized that the said acts refer to the means and methods employed by the referees in officiating basketball games for the illogical reason that said acts refer only to the referees skills. How could a skilled referee perform his job without blowing a whistle and making calls? Worse, how can the PBA control the performance of work of a referee without controlling his acts of blowing the whistle and making calls? Moreover, this Court disagrees with the Labor Arbiters finding (as affirmed by the NLRC) that the Contracts of Retainer show that petitioners have control over private respondents. xxxx

JOSE MEL BERNARTE RENATO GUEVARRA 1. backwages from January 1, 2004 up to the finality of this Decision, which to date is P211,250.00 2. moral damages 100,000.00 50,000.00 3. exemplary damages 100,000.00 50,000.00 4. 10% attorney's fees 68,625.00 36,125.00 TOTAL P754,875.00 P397,375.00 or a total of P1,152,250.00

P536,250.00

Neither do We agree with the NLRCs affirmance of the Labor Arbiters conclusion that private respondents repeated hiring made them regular employees by operation of law.11 The Issues The main issue in this case is whether petitioner is an employee of respondents, which in turn determines whether petitioner was illegally dismissed.

Petitioner raises the procedural issue of whether the Labor Arbiters decision has become final and executory for failure of respondents to appeal with the NLRC within the reglementary period. The Ruling of the Court The petition is bereft of merit. The Court shall first resolve the procedural issue posed by petitioner. Petitioner contends that the Labor Arbiters Decision of 31 March 2005 became final and executory for failure of respondents to appeal with the NLRC within the prescribed period. Petitioner claims that the Labor Arbiters decision was constructively served on respondents as early as August 2005 while respondents appealed the Arbiters decision only on 31 March 2006, way beyond the reglementary period to appeal. Petitioner points out that service of an unclaimed registered mail is deemed complete five days from the date of first notice of the post master. In this case three notices were issued by the post office, the last being on 1 August 2005. The unclaimed registered mail was consequently returned to sender. Petitioner presents the Postmasters Certification to prove constructive service of the Labor Arbiters decision on respondents. The Postmaster certified: xxx That upon receipt of said registered mail matter, our registry in charge, Vicente Asis, Jr., immediately issued the first registry notice to claim on July 12, 2005 by the addressee. The second and third notices were issued on July 21 and August 1, 2005, respectively. That the subject registered letter was returned to the sender (RTS) because the addressee failed to claim it after our one month retention period elapsed. Said registered letter was dispatched from this office to Manila CPO (RTS) under bill #6, line 7, page1, column 1, on September 8, 2005.12 Section 10, Rule 13 of the Rules of Court provides: SEC. 10. Completeness of service. Personal service is complete upon actual delivery. Service by ordinary mail is complete upon the expiration of ten (10) days after mailing, unless the court otherwise provides. Service by registered mail is complete upon actual receipt by the addressee, or after five (5) days from the date he received the first notice of the postmaster, whichever date is earlier. The rule on service by registered mail contemplates two situations: (1) actual service the completeness of which is determined upon receipt by the addressee of the registered mail; and (2) constructive service the completeness of which is determined upon expiration of five days from the date the addressee received the first notice of the postmaster.13 Insofar as constructive service is concerned, there must be conclusive proof that a first notice was duly sent by the postmaster to the addressee.14 Not only is it required that notice of the registered mail be issued but that it should also be delivered to and received by the addressee.15 Notably, the presumption that official duty has been regularly performed is not applicable in this situation. It is incumbent upon a party who relies on constructive service to prove that the notice was sent to, and received by, the addressee.16

The best evidence to prove that notice was sent would be a certification from the postmaster, who should certify not only that the notice was issued or sent but also as to how, when and to whom the delivery and receipt was made. The mailman may also testify that the notice was actually delivered.17 In this case, petitioner failed to present any concrete proof as to how, when and to whom the delivery and receipt of the three notices issued by the post office was made. There is no conclusive evidence showing that the post office notices were actually received by respondents, negating petitioners claim of constructive service of the Labor Arbiters decision on respondents. The Postmasters Certification does not sufficiently prove that the three notices were delivered to and received by respondents; it only indicates that the post office issued the three notices. Simply put, the issuance of the notices by the post office is not equivalent to delivery to and receipt by the addressee of the registered mail. Thus, there is no proof of completed constructive service of the Labor Arbiters decision on respondents. At any rate, the NLRC declared the issue on the finality of the Labor Arbiters decision moot as respondents appeal was considered in the interest of substantial justice. We agree with the NLRC. The ends of justice will be better served if we resolve the instant case on the merits rather than allowing the substantial issue of whether petitioner is an independent contractor or an employee linger and remain unsettled due to procedural technicalities. The existence of an employer-employee relationship is ultimately a question of fact. As a general rule, factual issues are beyond the province of this Court. However, this rule admits of exceptions, one of which is where there are conflicting findings of fact between the Court of Appeals, on one hand, and the NLRC and Labor Arbiter, on the other, such as in the present case.18 To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and methods by which the work is accomplished. The so-called "control test" is the most important indicator of the presence or absence of an employer-employee relationship.19 In this case, PBA admits repeatedly engaging petitioners services, as shown in the retainer contracts. PBA pays petitioner a retainer fee, exclusive of per diem or allowances, as stipulated in the retainer contract. PBA can terminate the retainer contract for petitioners violation of its terms and conditions. However, respondents argue that the all-important element of control is lacking in this case, making petitioner an independent contractor and not an employee of respondents. Petitioner contends otherwise. Petitioner asserts that he is an employee of respondents since the latter exercise control over the performance of his work. Petitioner cites the following stipulations in the retainer contract which evidence control: (1) respondents classify or rate a referee; (2) respondents require referees to attend all basketball games organized or authorized by the PBA, at least one hour before the start of the first game of each day; (3) respondents assign petitioner to officiate ballgames, or to act as alternate referee or substitute; (4) referee agrees to observe and comply with all the requirements of the PBA governing the conduct of the referees whether on or off the court; (5) referee agrees (a) to keep himself in good physical, mental, and emotional condition during the life of the contract; (b) to give always his best effort and service, and loyalty to the PBA, and not to officiate as referee in any basketball game outside of the PBA, without written prior consent of the Commissioner; (c) always to conduct himself on and off the court according to the highest standards of honesty or morality; and (6) imposition of various sanctions for violation of the terms and conditions of the contract.

The foregoing stipulations hardly demonstrate control over the means and methods by which petitioner performs his work as a referee officiating a PBA basketball game. The contractual stipulations do not pertain to, much less dictate, how and when petitioner will blow the whistle and make calls. On the contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of the professional basketball league. As correctly observed by the Court of Appeals, "how could a skilled referee perform his job without blowing a whistle and making calls? x x x [H]ow can the PBA control the performance of work of a referee without controlling his acts of blowing the whistle and making calls?"20 In Sonza v. ABS-CBN Broadcasting Corporation,21 which determined the relationship between a television and radio station and one of its talents, the Court held that not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. The Court held: We find that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and radio programs that comply with standards of the industry. We have ruled that: Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. v. NLRC. In said case, we held that: Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.22 We agree with respondents that once in the playing court, the referees exercise their own independent judgment, based on the rules of the game, as to when and how a call or decision is to be made. The referees decide whether an infraction was committed, and the PBA cannot overrule them once the decision is made on the playing court. The referees are the only, absolute, and final authority on the playing court. Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and cannot control the referee when he blows the whistle because such authority exclusively belongs to the referees. The very nature of petitioners job of officiating a professional basketball game undoubtedly calls for freedom of control by respondents. Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled, which is three times a week spread over an average of only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) the only deductions from the fees received by the referees are withholding taxes. In other words, unlike regular employees who ordinarily report for work eight hours per day for five days a week, petitioner is required to report for work only when PBA games are scheduled or three times a week at two hours per game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or PagIbig, which are the usual deductions from employees salaries. These undisputed circumstances buttress the fact that petitioner is an independent contractor, and not an employee of respondents.

Furthermore, the applicable foreign case law declares that a referee is an independent contractor, whose special skills and independent judgment are required specifically for such position and cannot possibly be controlled by the hiring party. In Yonan v. United States Soccer Federation, Inc.,23 the United States District Court of Illinois held that plaintiff, a soccer referee, is an independent contractor, and not an employee of defendant which is the statutory body that governs soccer in the United States. As such, plaintiff was not entitled to protection by the Age Discrimination in Employment Act. The U.S. District Court ruled: Generally, "if an employer has the right to control and direct the work of an individual, not only as to the result to be achieved, but also as to details by which the result is achieved, an employer/employee relationship is likely to exist." The Court must be careful to distinguish between "control[ling] the conduct of another party contracting party by setting out in detail his obligations" consistent with the freedom of contract, on the one hand, and "the discretionary control an employer daily exercises over its employees conduct" on the other. Yonan asserts that the Federation "closely supervised" his performance at each soccer game he officiated by giving him an assessor, discussing his performance, and controlling what clothes he wore while on the field and traveling. Putting aside that the Federation did not, for the most part, control what clothes he wore, the Federation did not supervise Yonan, but rather evaluated his performance after matches. That the Federation evaluated Yonan as a referee does not mean that he was an employee. There is no question that parties retaining independent contractors may judge the performance of those contractors to determine if the contractual relationship should continue. x x x It is undisputed that the Federation did not control the way Yonan refereed his games.1wphi1 He had full discretion and authority, under the Laws of the Game, to call the game as he saw fit. x x x In a similar vein, subjecting Yonan to qualification standards and procedures like the Federations registration and training requirements does not create an employer/employee relationship. x x x A position that requires special skills and independent judgment weights in favor of independent contractor status. x x x Unskilled work, on the other hand, suggests an employment relationship. x x x Here, it is undisputed that soccer refereeing, especially at the professional and international level, requires "a great deal of skill and natural ability." Yonan asserts that it was the Federations training that made him a top referee, and that suggests he was an employee. Though substantial training supports an employment inference, that inference is dulled significantly or negated when the putative employers activity is the result of a statutory requirement, not the employers choice. x x x In McInturff v. Battle Ground Academy of Franklin,24 it was held that the umpire was not an agent of the Tennessee Secondary School Athletic Association (TSSAA), so the players vicarious liability claim against the association should be dismissed. In finding that the umpire is an independent contractor, the Court of Appeals of Tennesse ruled: The TSSAA deals with umpires to achieve a result-uniform rules for all baseball games played between TSSAA member schools. The TSSAA does not supervise regular season games. It does not tell an official how to conduct the game beyond the framework established by the rules. The TSSAA does not, in the vernacular of the case law, control the means and method by which the umpires work. In addition, the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the former. For a hired party to be considered an employee, the hiring party must have control over the means and

methods by which the hired party is to perform his work, which is absent in this case. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner, and highlights the satisfactory services rendered by petitioner warranting such contract renewal. Conversely, if PBA decides to discontinue petitioners services at the end of the term fixed in the contract, whether for unsatisfactory services, or violation of the terms and conditions of the contract, or for whatever other reason, the same merely results in the non-renewal of the contract, as in the present case. The non-renewal of the contract between the parties does not constitute illegal dismissal of petitioner by respondents. WHEREFORE, we DENY the petition and AFFIRM the assailed decision of the Court of Appeals. SO ORDERED.

In answer, respondents denied that petitioners were their employees and alleged that they were associates of respondents independent contractor, Tomas Vega. Respondents claimed that petitioners have no regular working time or day and they are free to decide for themselves whether to report for work or not on any cockfighting day. In times when there are few cockfights in Gallera de Mandaue, petitioners go to other cockpits in the vicinity. Lastly, petitioners, so respondents assert, were only issued identification cards to indicate that they were free from the normal entrance fee and to differentiate them from the general public.6 In a Decision dated June 16, 2004, Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents as they performed work that was necessary and indispensable to the usual trade or business of respondents for a number of years. The Labor Arbiter also ruled that petitioners were illegally dismissed, and so ordered respondents to pay petitioners their backwages and separation pay.7 Respondents counsel received the Labor Arbiters Decision on September 14, 2004. And within the 10-day appeal period, he filed the respondents appeal with the NLRC on September 24, 2004, but without posting a cash or surety bond equivalent to the monetary award granted by the Labor Arbiter.8 It was only on October 11, 2004 that respondents filed an appeal bond dated October 6, 2004. Hence, in a Resolution9 dated August 25, 2005, the NLRC denied the appeal for its non-perfection. Subsequently, however, the NLRC, acting on respondents Motion for Reconsideration, reversed its Resolution on the postulate that their appeal was meritorious and the filing of an appeal bond, albeit belated, is a substantial compliance with the rules. The NLRC held in its Resolution of October 18, 2006 that there was no employeremployee relationship between petitioners and respondents, respondents having no part in the selection and engagement of petitioners, and that no separate individual contract with respondents was ever executed by petitioners.10 Following the denial by the NLRC of their Motion for Reconsideration, per Resolution dated January 12, 2007, petitioners went to the CA on a petition for certiorari. In support of their petition, petitioners argued that the NLRC gravely abused its discretion in entertaining an appeal that was not perfected in the first place. On the other hand, respondents argued that the NLRC did not commit grave abuse of discretion, since they eventually posted their appeal bond and that their appeal was so meritorious warranting the relaxation of the rules in the interest of justice.11 In its Decision dated May 29, 2009, the appellate court found for respondents, noting that referees and bet-takers in a cockfight need to have the kind of expertise that is characteristic of the game to interpret messages conveyed by mere gestures. Hence, petitioners are akin to independent contractors who possess unique skills, expertise, and talent to distinguish them from ordinary employees. Further, respondents did not supply petitioners with the tools and instrumentalities they needed to perform work. Petitioners only needed their unique skills and talents to perform their job as masiador and sentenciador.12 The CA held: In some circumstances, the NLRC is allowed to be liberal in the interpretation of the rules in deciding labor cases. In this case, the appeal bond was filed, although late. Moreover, an exceptional circumstance obtains in the case at bench which warrants a relaxation of the bond requirement as a condition for perfecting the appeal. This case is highly meritorious that propels this Court not to strictly apply the rules and thus prevent a grave injustice from being done.

G.R. No. 196426 , August 15, 2011 MARTICIO SEMBLANTE and DUBRICK PILAR, Petitioners, vs. COURT OF APPEALS, 19th DIVISION, now SPECIAL FORMER 19th DIVISION, GALLERA DE MANDAUE / SPOUSES VICENTE and MARIA LUISA LOOT, Respondents. DECISION VELASCO, JR., J.: Before Us is a Petition for Review on Certiorari under Rule 45, assailing and seeking to set aside the Decision1 and Resolution2 dated May 29, 2009 and February 23, 2010, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 03328. The CA affirmed the October 18, 2006 Resolution3 of the National Labor Relations Commission (NLRC), Fourth Division (now Seventh Division), in NLRC Case No. V-000673-2004. Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were hired by respondentsspouses Vicente and Maria Luisa Loot, the owners of Gallera de Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the cockpit sometime in 1993. As the masiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders the start of the cockfight. He also distributes the winnings after deducting the arriba, or the commission for the cockpit. Meanwhile, as the sentenciador, Pilar oversees the proper gaffing of fighting cocks, determines the fighting cocks physical condition and capabilities to continue the cockfight, and eventually declares the result of the cockfight.4 For their services as masiador and sentenciador, Semblante receives PhP 2,000 per week or a total of PhP 8,000 per month, while Pilar gets PhP 3,500 a week or PhP 14,000 per month. They work every Tuesday, Wednesday, Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special holidays. Their working days start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the needs of the cockpit. Petitioners had both been issued employees identification cards5 that they wear every time they report for duty. They alleged never having incurred any infraction and/or violation of the cockpit rules and regulations. On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of respondents, and were informed of the termination of their services effective that date. This prompted petitioners to file a complaint for illegal dismissal against respondents.

As elucidated by the NLRC, the circumstances obtaining in this case wherein no actual employer-employee exists between the petitioners and the private respondents [constrain] the relaxation of the rules. In this regard, we find no grave abuse attributable to the administrative body. xxxx Petitioners are duly licensed "masiador" and "sentenciador" in the cockpit owned by Lucia Loot. Cockfighting, which is a part of our cultural heritage, has a peculiar set of rules. It is a game based on the fighting ability of the game cocks in the cockpit. The referees and bet-takers need to have that kind of expertise that is characteristic of the cockfight gambling who can interpret the message conveyed even by mere gestures. They ought to have the talent and skill to get the bets from numerous cockfighting aficionados and decide which cockerel to put in the arena. They are placed in that elite spot where they can control the game and the crowd. They are not given salaries by cockpit owners as their compensation is based on the "arriba". In fact, they can offer their services everywhere because they are duly licensed by the GAB. They are free to choose which cockpit arena to enter and offer their expertise. Private respondents cannot even control over the means and methods of the manner by which they perform their work. In this light, they are akin to independent contractors who possess unique skills, expertise and talent to distinguish them from ordinary employees. Furthermore, private respondents did not supply petitioners with the tools and instrumentalities they needed to perform their work. Petitioners only needed their talent and skills to be a "masiador" and "sentenciador". As such, they had all the tools they needed to perform their work. (Emphasis supplied.) The CA refused to reconsider its Decision. Hence, petitioners came to this Court, arguing in the main that the CA committed a reversible error in entertaining an appeal, which was not perfected in the first place. Indeed, the posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the Decision of the Labor Arbiter.13 Article 223 of the Labor Code provides: Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: xxxx In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. (Emphasis supplied.) Time and again, however, this Court, considering the substantial merits of the case, has relaxed this rule on, and excused the late posting of, the appeal bond when there are strong and compelling reasons for the liberality,14 such as the prevention of miscarriage of justice extant in the case15 or the special circumstances in the case combined with its legal merits or the amount and the issue involved.16 After all, technical rules cannot prevent courts from exercising their duties to determine and settle, equitably and completely, the rights and obligations of the parties.17 This is one case where the exception to the general rule lies. While respondents had failed to post their bond within the 10-day period provided above, it is evident, on the other hand, that petitioners are NOT employees of respondents, since their relationship fails to pass muster the four-fold

test of employment We have repeatedly mentioned in countless decisions: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, which is the most important element.18 1avvphi1 As found by both the NLRC and the CA, respondents had no part in petitioners selection and management;19 petitioners compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners;20 and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents.21 In the conduct of their work, petitioners relied mainly on their "expertise that is characteristic of the cockfight gambling,"22 and were never given by respondents any tool needed for the performance of their work.23 Respondents, not being petitioners employers, could never have dismissed, legally or illegally, petitioners, since respondents were without power or prerogative to do so in the first place. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering for an illegal dismissal for which they were never responsible.1avvphi1 Strict implementation of the rules on appeals must give way to the factual and legal reality that is evident from the records of this case.24 After all, the primary objective of our laws is to dispense justice and equity, not the contrary. WHEREFORE, We DENY this petition and AFFIRM the May 29, 2009 Decision and February 23, 2010 Resolution of the CA, and the October 18, 2006 Resolution of the NLRC. SO ORDERED.

G.R. No. 170351 March 30, 2011 LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, Petitioner, vs. PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, Respondent. DECISION NACHURA, J.: Under review is the Decision1 dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 65760, which dismissed the petition for certiorari filed by petitioner Leyte Geothermal Power Progressive Employees Union ALUTUCP (petitioner Union) to annul and set aside the decision2 dated December 10, 1999 of the National Labor Relations Commission (NLRC) in -----NLRC Certified Case No. V-02-99. The facts, fairly summarized by the CA, follow. [Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a governmentowned and controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like geothermal energy. Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE) Regional Office No. VIII, Tacloban City.

Among *respondents+ geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the [respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was only good up to the completion or termination of the project and would automatically expire upon the completion of such project. Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a CBA negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner. On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported commission by the latter of unfair labor practice for "refusal to bargain collectively, union busting and mass termination." On the same day, the petitioner declared a strike and staged such strike. To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12) hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment prior to the strike. Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation. However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner remained adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect, the petitioner did not abide by [the] assumption order issued by the Secretary of Labor. Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition for Cancellation of Petitioners Certificate of Registration with DOLE, Regional Office No. VIII. The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition thereof.3 In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit: WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows: 1. Declaring the officers and members of [petitioner] Union as project employees; 2. Declaring the termination of their employment by reason of the completion of the project, or a phase or portion thereof, to which they were assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union through its officers and members on December 28, 1998 to January 6, 1999 as illegal for failure to comply with the mandatory requirements of the law on strike[;] 4. Declaring all the officers and members of the board of [petitioner] Union who instigated and spearheaded the illegal strike to have lost their employment[;] 5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice for lack of merit[;] 6. Dismissing both parties claims against each other for violation of the Assumption Order dated January 4, 1999 for lack of factual basis[;] 7. Dismissing all other claims for lack of merit.4 Petitioner Union filed a motion for reconsideration of the NLRC decision, which was subsequently denied. Posthaste, petitioner Union filed a petition for certiorari before the CA, alleging grave abuse of discretion in the decision of the NLRC. As previously adverted to, the CA dismissed the petition for certiorari, thus: WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the Petition. The assailed Decision dated December 10, 1999 of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99) and its Order dated March 30, 2001 are hereby AFFIRMED. Costs against the Petitioner.5 Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of law: 1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT ARE DESIGNED TO DENY AND DEPRIVE THE EMPLOYEES THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT EMPLOYEES? 2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES CONTRACT, SUCH THAT THE SO-CALLED UNDERTAKING WAS CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES? 3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRMS OWN ESTIMATE OF JOB COMPLETION, PROVING THAT THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED FOR COMPLETION [OF] THE "PROJECT?" 4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO DISMISS EN MASSE THE EMPLOYEES WHO HAVE ORGANIZED AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS? 5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY TO ITS CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES? 6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE UNION, IS THIS UNION BUSTING?6 Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of respondent; and 2. Whether the officers and members of petitioner Union engaged in an illegal strike. On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and desirable to respondents usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the Construction Department of respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually necessary and desirable to the department. Petitioner Union likewise points out that there was no interval in the employment contract of its officers and members, who were all employees of respondent, which lack of interval, for petitioner Union, "manifests that the undertaking is usually necessary and desirable to the usual trade or business of the employer." We cannot subscribe to the view taken by petitioner Union. The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code: ART. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.7 The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer"; (b) project employees or those "whose 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"; (c) seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season;8 and (d) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind a fixed-term employee.9 Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to "afford full protection to labor."10 Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State.11 However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or undertaking remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The employers interest is equally important as that of the employee*s+ for theirs is the interest that propels economic activity. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment contract. After all, under the law, the interest of the worker is paramount.12 In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue: A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the [employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly established in the course of the trial of this case, as explained by no less than the President of [petitioner] Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them. x x x. xxxx As clearly shown by *petitioner+ Unions own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts tending to vitiate the worker*s+ consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. x x x.13 Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence. It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.14 Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion." Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases.15 We may take cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the CA.16 In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were project employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was usually necessary or desirable to the usual business or trade of the Construction Department of respondent. The landmark case of ALU-TUCP v. NLRC17 instructs on the two (2) categories of project employees:

It is evidently important to become clear about the meaning and scope of the term "project" in the present context. The "project" for the carrying out of which "project employees" are hired would ordinarily have some relationship to the usual business of the employer. Exceptionally, the "project" undertaking might not have an ordinary or normal relationship to the usual business of the employer. In this latter case, the determination of the scope and parameters of the "project" becomes fairly easy. x x x. From the viewpoint, however, of the legal characterization problem here presented to the Court, there should be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as the duration and scope of the project were determined or specified at the time of engagement of the "project employees." For, as is evident from the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project. In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The typical example of this first type of project is a particular construction job or project of a construction company. A construction company ordinarily carries out two or more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of employment, are properly treated as "project employees," and their services may be lawfully terminated at completion of the project. The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.18 Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular employees engagement. In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project employees for respondents Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of petitioner Union could be validly terminated. Petitioner Union is adamant, however, that the lack of interval in the employment contracts of its officer and members negates the latters status as mere project employees. For petitioner Union, the lack of interval further drives home its point that its officers and members are regular employees who performed work which was usually necessary or desirable to the usual business or trade of respondent.

We are not persuaded. Petitioner Unions members employment for more than a year does equate to their regular employment with respondent. In this regard, Mercado, Sr. v. NLRC19 illuminates: The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It states that, regardless of any written or oral agreement to the contrary, an employee is deemed regular where 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 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, as in the present case. The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken. Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the Labor Arbiter should have considered them regular by virtue of said proviso. The contention is without merit. The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or limit the generality of the clause that it immediately follows. Thus, it has been held that a proviso is 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 clear legislative intent is to restrain or qualify not only the phrase immediately preceding it (the proviso) but also earlier provisions of the statute or even the statute itself as a whole. Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280. 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 [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.

Considering our holding that the officers and the members of petitioner Union were project employees, its claim of union busting is likewise dismissed. On the second issue, petitioner Union contends that there was no stoppage of work; hence, they did not strike. Euphemistically, petitioner Union avers that it "only engaged in picketing,"20 and maintains that "without any work stoppage, [its officers and members] only engaged in xxx protest activity." We are not convinced. Petitioner Union splits hairs. To begin with, quite evident from the records is the undisputed fact that petitioner Union filed a Notice of Strike on December 28, 1998 with the Department of Labor and Employment, grounded on respondents purported unfair labor practices, i.e., "refusal to bargain collectively, union busting and mass termination." On even date, petitioner Union declared and staged a strike. Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-Work Order21 dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. The Order narrates the facts leading to the labor dispute, to wit: On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing unfair labor practices, specifically: refusal to bargain collectively, union busting and mass termination as the grounds [therefor]. On the same day, *petitioner+ Union went on strike and took control over *respondents+ facilities of its Leyte Geothermal Project. Attempts by the National Conciliation and Mediation Board RBVIII to forge a mutually acceptable solution proved futile. In the meantime, the strike continues with no settlement in sight placing in jeopardy the supply of much needed power supply in the Luzon and Visayas grids. xxxx The on-going strike threatens the availability of continuous electricity to these areas which is critical to day-to-day life, industry, commerce and trade. Without doubt, *respondents+ operations *are] indispensable to the national interest and falls (sic) within the purview of Article 263 (g) of the Labor Code, as amended, which warrants (sic) the intervention of this Office. Third, petitioner Union itself, in its pleadings, used the word "strike." Ultimately, petitioner Unions asseverations are belied by the factual findings of the NLRC, as affirmed by the CA: The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record. Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day strike ban after the submission of the strike vote was not complied with since there was no strike vote taken. xxxx

The factual issue of whether a notice of strike was timely filed by [petitioner] Union was resolved by the evidence on record. The evidence revealed that [petitioner] Union struck even before it could file the required notice of strike. Once again, this relied on *petitioner+ Unions proof. *Petitioner+ Union*s+ witness said: Atty. Sinsuat : You stated that you struck on 28 December 1998 is that correct? Witness : Early in the morning of December 1998. xxxx Atty. Sinsuat : And you went there to conduct the strike did you not? Witness : Our plan then was to strike at noon of December 28 and the strikers will be positioned at their respective areas.22 Article 263 of the Labor Code enumerates the requisites for holding a strike: Art. 263. Strikes, picketing, and lockouts. (a) x x x. x x x x. (c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and bylaws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. (d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and Employment may promulgate. (e) During the cooling-off period, it shall be the duty of the Department to exert all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout. (f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Department the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided.

reorganization and streamlining of its operations. In fine, petitioner Unions bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that petitioner Union indeed struck against respondent. In fact, and more importantly, petitioner Union failed to comply with the requirements set by law prior to holding a strike.1avvphi1 WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against petitioner Union. SO ORDERED. G.R. No. 163033 , October 2, 2009 SAN MIGUEL CORPORATION, Petitioner, vs. EDUARDO L. TEODOSIO, Respondent. DECISION PERALTA, J.: This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul and set aside the Decision1 dated October 30, 2003, rendered by the Court of Appeals (CA) in CA-G.R. SP No. 60334 and its Resolution2 dated February 24, 2004 denying petitioners motion for reconsideration. The factual and procedural antecedents are as follows: On September 5, 1991, respondent Eduardo Teodosio was hired by San Miguel Corporation (SMC) as a casual forklift operator in its Bacolod City Brewery.3 As a forklift operator, respondent was tasked with loading and unloading pallet4 of beer cases within the brewery premises. Respondent continuously worked from September 5, 1991 until March 1992, after which he was "asked to rest" for a while. A month after, or sometime in April 1992, respondent was rehired for the same position, and after serving for about five to six months, he was again "asked to rest." After three weeks, he was again rehired as a forklift operator. He continued to work as such until August 1993.5 Sometime in August 1993, respondent was made to sign an "Employment with a Fixed Period"6 contract by SMC, wherein it was stipulated, among other things, that respondents employment would be "from August 7, 1993 to August 30, 1995, or upon cessation of the instability/fluctuation of the market demand, whichever comes first." Thereafter, respondent worked at the plant without interruption as a forklift operator. On March 20, 1995, respondent was transferred to the plants bottling section as a case piler. In a letter7 dated April 10, 1995, respondent formally informed SMC of his opposition to his transfer to the bottling section. He asserted that he would be more effective as a forklift operator because he had been employed as such for more than three years already. Respondent also requested that he be transferred to his former position as a forklift operator. However, SMC did not answer his letter. In an undated letter,8 respondent informed SMC that he was applying for the vacant position of bottling crew as he was interested in becoming a regular employee of SMC. On June 1, 1995, SMC notified the respondent that his employment shall be terminated on July 1, 1995 in compliance with the Employment with a Fixed Period contract.9 SMC explained that this was due to the

In a letter10 dated July 3, 1995, respondent expressed his dismay for his dismissal. He informed SMC that despite the fact that he would be compelled to receive his separation pay and would be forced to sign a waiver to that effect, this does not mean that he would be waiving his right to question his dismissal and to claim employment benefits as provided in the Collective Bargaining Agreement (CBA) and company policies. Thereafter, respondent signed a Receipt and Release11 document in favor of SMC and accepted his separation pay, thereby releasing all his claims against SMC. On July 4, 1995, respondent filed a Complaint12 against SMC before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. VI, Bacolod City, for illegal dismissal and underpayment of wages and other benefits. After the filing of the parties respective pleadings, the Labor Arbiter rendered a Decision13 dismissing the complaint for lack of merit. The Labor Arbiter concluded that the contract of employment with a fix period signed by respondent was a legitimate exercise of management prerogative. There was thus nothing illegal about respondents transfer to the bottling section and the assignment of a regular employee to his former position. Considering that respondent failed to qualify in the bottling section and there was no longer any available position for him, his termination in accordance with the employment contract was valid. Moreover, the Labor Arbiter opined that since the respondent was not a union member and not a regular employee of SMC, he was not entitled to the benefits granted by the existing CBA.14 Aggrieved, respondent sought recourse before the NLRC, Fourth Division, Cebu City. On November 26, 1999, the NLRC rendered a Decision15 dismissing the appeal and affirming the decision of the Labor Arbiter. The NLRC anchored its decision on the fact that respondent signed a "Receipt and Release" upon receiving his separation pay from SMC. It upheld the validity of the said Receipt and Release document, finding the same to have been voluntarily executed by the respondent and the consideration therefor appears to be reasonable under the circumstances.16 The respondent filed a motion for reconsideration, but it was denied in a Resolution17 dated May 26, 2000. Respondent then filed before the CA a petition for certiorari, docketed as CA-G.R. SP No. 60334, seeking to annul and set aside the said Decision and Resolution of the NLRC.18 On October 30, 2003, the CA rendered a Decision19 granting the petition, the decretal portion of which reads: WHEREFORE, the instant petition is GRANTED. The Decision dated November 29, 1999 and Resolution dated May 26, 2000 of the National Labor Relations Commission, Fourth Division, Cebu City and Decision dated April 24, 1998 of the Labor Arbiter are REVERSED and SET ASIDE. Judgment is rendered ordering: 1. The reinstatement of petitioner Eduardo Teodosio to his position as forklift operator without loss of seniority rights. 2. The private respondent San Miguel Corporation to pay the full backwages of the petitioner from the day of his illegal dismissal until actual reinstatement. Said backwages shall be computed on the basis of the basic salary, allowances and other benefits granted to regular employees under the Collective Bargaining Agreement existing at

the time. Public respondent NLRC is hereby directed to make the computation of said full backwages and inform soonest all parties as well as this Court, accordingly, within thirty days after receipt of this decision. 3. The private respondent San Miguel Corporation to pay the deficiency amount of salary, allowances and benefits that petitioner should have received as a regular employee from the time he attained the status of regular employee by operation of law on September, 1996 to the time he was illegally dismissed. Public respondent NLRC is likewise directed to make the necessary computation and inform all parties and this Court within thirty (30) days after receipt of this decision. 4. The private respondent San Miguel Corporation to pay petitioner the amount of FIFTY THOUSAND PESOS (P50,000.00) as moral damages, TEN THOUSAND PESOS (P10,000.00) as exemplary damages and ten percent (10%) of the total amount awarded to petitioner by this Court as attorneys fees. Costs against private respondent San Miguel Corporation. SO ORDERED.20 In granting the petition, the CA ratiocinated that the Employment with a Fixed Period contract was just a scheme of SMC to circumvent respondents security of tenure. The CA concluded that even before the respondent signed the employment contract, he already attained the status of a regular employee. Consequently, respondents transfer to the bottling section and his subsequent dismissal were evidently tainted with bad faith. Moreover, the appellate court declared invalid the Receipt and Release document signed by the respondent, since the law proscribes any agreement whereby a worker agrees to receive less compensation than what he is entitled to recover. It added that a deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled. SMC filed a motion for reconsideration, but it was denied in the Resolution21 dated February 24, 2004. Hence, this petition assigning the following errors: First ground The hon. Court of appeals committed serious errors when it did not uphold the validity of the contract of employment with a fixed period (hereinafter referred to as "EWFP", for brevity) between smc and respondent teodosio. Second ground The hon. Court of Appeals seriously erred in declaring that respondent had already attained status of a regular employee even before [THE] parties entered into the ewfp contract. Third ground The hon. Court of Appeals seriously erred in its conclusion that respondents transfer to the bottling section and subsequent dismissal was tainted with bad faith since having acquired the status of a regular employee as early as 1992, respondent had a vested right to his position as foklift (sic) operator which could not be arbitrarily taken from him and given to accommodate another regular employee, mr. vaflor. Fourth ground

The hon. Court of Appeals seriously erred when it declared that from September 1992 or one (1) year after respondent was hired and attained regular status by operation of law, he was entitled to receive the same basic salary and benefits granted by the collective bargaining agre*E+ment to respondents co-workers/forklift operators who were regular employees. Fifth ground The hon. Court of Appeals seriously erred when it did not uphold the validity of the "receipt and release" signed by respondent. Sixth ground The hon. Court of Appeals seriously erred when it concluded that smc intentionally evaded its legal obligation of granting the benefits and privileges to which its loyal employee of five years is clearly entitled to and such act being oppressive to labor and contrary to the avowed public policy of protecting labor rights entitled the grant to respondent of moral damages in the amount of fifty thousand pesos (P50,000.00) and exemplary damages of ten thousand pesos (P10,000.00) as well as attorneys fees in the amount of ten percent (10%) of the total award for expenses incurred by respondent to protect his rights and interests. Seventh ground The hon. Court of Appeals seriously erred when it granted the petition on certiorari filed by respondent and reversed and set aside the decision dated November 26, 1999 (not November 29, 1999 as erroneously stated) and resolution dated May 26, 2000 of the nlrc, fourth division, cebu city, and decision dated April 24, 1998 of the labor arbiter, and consequently ordered the following: 1) the reinstatement of petitioner Eduardo teodosio to his position as forklift operator without losss [sic] of seniority rights; 2) the private respondent san Miguel corporation to pay the full backwages of the petitioners from the day of his illegal dismissal until actual reinstatement. Said backwages shall be computed on the basis of the basic salary, allowances and other benefits granted to regular employees under the collective bargaining agreement existing at the time; 3) The private respondent san Miguel corporation to pay the deficiency amount of salary, allowances and benefits that petitioner should have received as a regular employee from the time he attained the status of regular employee by operation of law on September, 1996 to the time he was illegally dismissed. x x x.; 4) the private respondent san Miguel corporation to pay petitioner the amount of fifty thousand PESOS (P50,000.00) as moral damages, ten thousand pesos (P10,000.00) as exemplary damages and ten percent (10%) of the total amount awarded to petitioner by this court as attorneys fees. Costs against private respondent san Miguel corporation.22 Simply stated, the issues before us are the following: 1) whether the respondent was a regular employee of SMC; 2) whether the respondent was illegally dismissed; and 3) whether the respondent is entitled to his monetary claims and damages.

SMC argues that it did not have the slightest intention to circumvent respondents right to security of tenure. When SMC employed respondent, it was in response to the business environment and operating needs prevailing at that time. It was made in good faith and in the exercise of business judgment. The option of SMC to fully mechanize its operations and to regularize the second shift of employees in the bottling section if favorable conditions prevail were known to the respondent when he voluntarily entered into the employment with a fixed period contract. SMC adds that before the employment contract expired, respondent was given the opportunity to continue working and was transferred to the second shift operations of the bottling section. When it decided to regularize the second shift operations and accept 23 workers for regular positions, respondent was given the equal opportunity to apply. However, despite being already in the bottling section, respondent failed to perform. After an objective evaluation of the total performance of all the workers with employment contract, respondent failed to qualify for a regular position. Respondent should not, therefore, blame SMC for his failure to qualify for a regular position. SMC also contends that respondents employment contract was in accordance with Article 280 of the Labor Code. Respondents employment has been pre-determined, in that the duration of the work was contingent upon the cessation of fluctuating or unstable market demand for beer products, coupled with the automation of brewery operations. As regards respondents claim for underpayment of salary and other benefits in accordance with the provisions of the existing CBA, SMC submits that respondent was not entitled to them. SMC maintains that being a contractual employee, by express provision of the CBA, he was excluded therefrom as he was not included in the appropriate bargaining unit defined in the CBA. Respondent was neither a union member nor one who paid any membership or agency fee to the union. Thus, he was not entitled to any benefits provided in the CBA to its union members. Moreover, SMC insists that respondent was bound by the Receipt and Release contract that he executed. The terms and conditions of the document were clear and respondent understood and knew fully well the consequences thereof when he signed it. SMC adds that respondent wanted to squeeze more money from it despite the fact that it had already doubled respondents separation pay. SMC avers that although a waiver or quitclaim executed by a terminated employee upon receipt of his separation pay is not necessarily a bar to question the legality of his termination, still such conclusion does not apply to the instant case. SMC posits that respondent was not taken advantage of, since he did not receive a ludicrously low and unconscionable amount as separation pay. In fact, respondent was given separation pay in excess of what was stipulated in the employment contract. Finally, SMC argues that respondents dismissal from the company was based on legal and valid grounds, i.e., the termination of his employment contract. For his part, respondent posits that he is already a regular employee of SMC considering that he has been working as a forklift operator for several years before he signed the employment contract. Respondent insists that his position as a forklift operator has never been redundant. In fact, he was replaced by another employee of SMC, who transferred from another plant. Also, the automation of some of SMCs operation does not affect his work as a forklift operator, because forklifts would still be utilized in lifting the pile of cases whether they were arranged manually or by palletizer machine. Respondent contends that his transfer to the bottling section was merely a ploy of SMC to legitimize the designation of another SMC employee to his former position as forklift operator.

Respondent maintains that the execution of the Receipt and Release agreement did not bar him from questioning the legality of his dismissal. He submits that the said agreement was unilaterally prepared by SMC and that prior to its execution, he was already dismissed by SMC. He adds that after receiving his separation pay, he immediately filed the complaint against SMC, thus, affirming his desire to assail the legality of his dismissal. Respondent maintains that his dismissal was illegal. Hence, he is entitled to reinstatement to his former position as forklift operator, moral and exemplary damages, and payment of attorneys fees. The petition is bereft of merit. This Court finds the respondent to be a regular employee. Article 280 of the Labor Code, as amended, provides: ART. 280. REGULAR AND CASUAL EMPLOYMENT. - The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Thus, there are two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed.23 Simply stated, regular employees are classified into (1) regular employees - by nature of work and (2) regular employees - by years of service. The former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year.24 If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business.25 Based on the circumstances surrounding respondents employment by SMC, this Court is convinced that he has attained the status of a regular employee long before he executed the employment contract with a fixed period. Although respondent was initially hired by SMC as a casual employee, respondent has attained the status of a regular employee. Respondent was initially hired by SMC on September 5, 1991 until March 1992. He was rehired for the same position in April 1992 which lasted for five to six months. After three weeks, he was again rehired as a forklift operator and he continued to work as such until August 1993. Thus, at the time he signed the Employment with a Fixed Period contract, respondent had already been in the employ of SMC for at least twenty-three (23) months. The Labor Code provides that a casual employee can be considered as a regular employee if said casual employee has rendered at least one year of service regardless of the fact that such service may be continuous or broken.

Section 3, Rule V, Book II of the Implementing Rules and Regulations of the Labor Code clearly defines the term "at least one year of service" to mean service within 12 months, whether continuous or broken, reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the working days in the establishment, as a matter of practice or policy, or as provided in the employment contract, is less than 12 months, in which case said period shall be considered one year. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business of the employer.26 Moreover, the nature of respondents work is necessary in the business in which SMC is engaged. SMC is primarily engaged in the manufacture and marketing of beer products, for which purpose, it specifically maintains a brewery in Bacolod City.27 Respondent, on the other hand, was engaged as a forklift operator tasked to lift and transfer pallets and pile them from the bottling section to the piling area. SMC admitted that it hired respondent as a forklift operator since the third quarter of 1991 when, in the absence of fully automated palletizers, manual transfers of beer cases and empties would be extensive within the brewery and its premises. SMC would have wanted this Court to believe that circumstances have transpired to force it to implement full automation of its brewery and new marketing and distribution systems in its sales offices resulting in the reduction of personnel and termination of employees with a fixed period contract. However, even after the installation of the automated palletizers, SMC did not leave the position of forklift operator vacant. SMC even transferred one of its regular employees to the Bacolod City Brewery to replace respondent who was in turn transferred to the bottling section of the plant. This demonstrates the continuing necessity and indispensability of hiring a forklift operator to the business of SMC. Undoubtedly, respondent is a regular employee of SMC. Consequently, the employment contract with a fixed period which SMC had respondent execute was meant only to circumvent respondents right to security of tenure and is, therefore, invalid. While this Court recognizes the validity of fixed-term employment contracts, it has consistently held that this is the exception rather than the general rule. Verily, a fixed-term contract is valid only under certain circumstances.28 In the oft-cited case of Brent School, Inc. v. Zamora,29 this Court made it clear that a contract of employment stipulating a fixed term, even if clear as regards the existence of a period, is invalid if it can be shown that the same was executed with the intention of circumventing an employees right to security of tenure, and should thus be ignored. Moreover, in that same case, this Court issued a stern admonition that where from the circumstances, it is apparent that the period was imposed to preclude the acquisition of tenurial security by the employee, then it should be struck down as being contrary to law, morals, good customs, public order and public policy.30 Since respondent was already a regular employee months before the execution of the Employment with a Fixed Period contract, its execution was merely a ploy on SMCs part to deprive respondent of his tenurial security. Hence, no valid fixed-term contract was executed. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Equally important to consider is that a contract of employment is impressed with public interest such that labor contracts must yield to the common good. Provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.31 Having gained the status of a regular employee, respondent is entitled to security of tenure and could only be dismissed on just or authorized causes and after he has been accorded due process.32

SMC insists that the termination of respondents employment was in accordance with the Employment with a Fixed Period contract; and that respondent was given opportunities to become a regular employee when he was transferred to the bottling section of the plant. However, considering that respondent was already a regular employee of SMC at that time, the reason advanced by SMC for his termination would not constitute a just or authorized cause.331avvphi1 Also, SMC cannot take refuge in the Receipt and Release document signed by the respondent. Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.34 The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer.35 SMC failed to discharge this burden. This is buttressed by the fact that before the respondent signed the document, he already informed SMC in the letter dated July 3, 1995, that even if he would be compelled to receive his separation pay and be forced to sign a waiver to that effect, he was not waiving his right to question his dismissal and to claim employment benefits. This clearly proves that respondent did not freely and voluntarily consent to the execution of the document. As aptly concluded by the CA, herein respondent, having been unjustly dismissed from work, is entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of allowances, and to other benefits or their monetary equivalents computed from the time compensation was withheld up to the time of actual reinstatement.36 Anent the awards for damages awarded by the CA, this Court finds that respondent is not entitled to moral and exemplary damages. Moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy.37 On the other hand, exemplary damages are proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy requires that these acts must be suppressed and discouraged.38 In the present case, respondent failed to sufficiently establish that his dismissal was done in bad faith; was contrary to morals, good customs or public policy; and was arbitrary and oppressive to labor, thus entitling him to the award of moral and exemplary damages. As to the award of attorneys fees, by reason of his illegal dismissal, respondent was forced to litigate and incur expenses to protect his rights and interest.39 Moreover, in labor cases, although an express finding of fact and law is still necessary to prove the merit of the award of attorneys fees, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly.40 Thus, it is but just and proper that the same should be awarded to respondent. At this juncture, this Court notes that there is an apparent discrepancy between the ratio decidendi and the fallo of the CAs decision. In its ratio the CA concluded that respondent became a regular employee of SMC in September 1992.41 However, in the dispositive portion thereof the CA may have overlooked the date as it stated therein that respondent "attained the status of a regular employee by operation of law on September, 1996."42 This part of the fallo should be rectified to reflect the true intent and meaning of the decision.

The antecedent facts are as follows: Findings of the court are to be considered in the interpretation of the dispositive portion of the judgment.43 Verily, to grasp and delve into the true intent and meaning of a decision, no specific portion thereof should be resorted to the decision must be considered in its entirety. The Court may resort to the pleadings of the parties, its findings of fact and conclusions of law as expressed in the body of the decision to clarify any ambiguities caused by any inadvertent omission or mistake in the dispositive portion thereof.44 This assures swift delivery of justice and avoids any protracted litigation anchored only on trivial matters as a result of any inadvertent omissions or mistakes in the fallo. Thus, to conform to the ratio, the date in the fallo when respondent became a regular employee should be modified from September 1996 to September 1992. Furthermore, although the instant case calls for the reinstatement of the respondent to his former position as forklift operator or any equivalent position, the fact that his former position was already given to another regular employee; the length of time that this case has been pending; and the likely possibility that the protracted litigation may have seriously marred the relationship of the parties beyond reconciliation, may well have rendered reinstatement impossible. Accordingly, petitioner shall be awarded separation pay in lieu of reinstatement, if the latter is no longer possible.45 WHEREFORE, premises considered, the petition is DENIED. The Decision and Resolution of the Court of Appeals, dated October 30, 2003 and February 24, 2004, respectively, in CA-G.R. SP No. 60334 are AFFIRMED with the following MODIFICATIONS: 1. Respondent Eduardo L. Teodosio became a regular employee in September 1992. 2. Respondent is awarded separation pay in lieu of reinstatement. 3. The awards of moral and exemplary damages are DELETED. In all other aspects, the Decision stands. SO ORDERED. G.R. No. 193493 June 13, 2013 In connection with the complaint filed by Mrs. Rosario Fulo, hereunder are the findings per interview with Mr. Leonor Delgra, Santiago Bolanos and Amado Gacelo: 1. That Mr. Jaime Fulo was an employee of Jaime Gapayao as farm laborer from 1983 to 1997. 2. Mr. Leonor Delgra and Santiago Bolanos are co-employees of Jaime Fulo. 3. Mr. Jaime Fulo receives compensation on a daily basis ranging from P5.00 to P60.00 from 1983 to 1997. Per interview from Mrs. Estela Gapayao, please be informed that: 1. Jaime Fulo is an employee of Mr. & Mrs. Jaime Gapayao on an extra basis. 2. Sometimes Jaime Fulo is allowed to work in the farm as abaca harvester and earn 1/3 share of its harvest as his income. Upon the insistence of private respondent that her late husband had been employed by petitioner from January 1983 up to his untimely death on 4 November 1997, the SSS conducted a field investigation to clarify his status of employment. In its field investigation report,10 it enumerated its findings as follows: Thereafter, private respondent filed a claim for social security benefits with the Social Security System (SSS) Sorosogon Branch.8 However, upon verification and evaluation, it was discovered that the deceased was not a registered member of the SSS.9 On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure secondary to 1st degree burn 70% secondary electrocution"5 while doing repairs at the residence and business establishment of petitioner located at San Julian, Irosin, Sorsogon. Allegedly moved by his Christian faith, petitioner extended some financial assistance to private respondent. On 16 November 1997, the latter executed an Affidavit of Desistance6 stating that she was not holding them liable for the death of her late husband, Jaime Fulo, and was thereby waiving her right and desisting from filing any criminal or civil action against petitioner. On 14 January 1998, both parties executed a Compromise Agreement,7 the relevant portion of which is quoted below: We, the undersigned unto this Honorable Regional Office/District Office/Provincial Agency Office respectfully state: 1. The undersigned employer, hereby agrees to pay the sum of FORTY THOUSAND PESOS (P40,000.00) to the surviving spouse of JAIME POLO, an employee who died of an accident, as a complete and full payment for all claims due the victim. 2. On the other hand, the undersigned surviving spouse of the victim having received the said amount do [sic] hereby release and discharge the employer from any and all claims that maybe due the victim in connection with the victims employment thereat.

JAIME N. GAPAYAO, Petitioner, vs. ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, Respondents. DECISION SERENO, CJ.: This is a Rule 45 Petition1 assailing the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP. No. 101688, affirming the Resolution4 of the Social Security Commission (SSC). The SSC held petitioner Jaime N. Gapayao liable to pay the unpaid social security contributions due to the deceased Jaime Fulo, and the Social Security System (SSS) to pay private respondent Rosario L. Fulo, the widow of the deceased, the appropriate death benefits pursuant to the Social Security Law.

3. Mr. & Mrs. Gapayao hired the services of Jaime Fulo not only in the farm as well as in doing house repairs whenever it is available. Mr. Fulo receives his remuneration usually in the afternoon after doing his job. 4. Mr. & Mrs. Gapayao hires 50-100 persons when necessary to work in their farm as laborer and Jaime Fulo is one of them. Jaime Fulo receives more or less P50.00 a day. (Emphases in the original) Consequently, the SSS demanded that petitioner remit the social security contributions of the deceased. When petitioner denied that the deceased was his employee, the SSS required private respondent to present documentary and testimonial evidence to refute petitioners allegations.11 Instead of presenting evidence, private respondent filed a Petition12 before the SSC on 17 February 2003. In her Petition, she sought social security coverage and payment of contributions in order to avail herself of the benefits accruing from the death of her husband. On 6 May 2003, petitioner filed an Answer13 disclaiming any liability on the premise that the deceased was not the formers employee, but was rather an independent contractor whose tasks were not subject to petitioners control and supervision.14 Assuming arguendo that the deceased was petitioners employee, he was still not entitled to be paid his SSS premiums for the intervening period when he was not at work, as he was an "intermittent worker who was only summoned every now and then as the need arose."15 Hence, petitioner insisted that he was under no obligation to report the formers demise to the SSS for social security coverage. Subsequently, on 30 June 2003, the SSS filed a Petition-in-Intervention16 before the SSC, outlining the factual circumstances of the case and praying that judgment be rendered based on the evidence adduced by the parties. On 14 March 2007, the SSC rendered a Resolution,17 the dispositive portion of which provides: WHEREFORE, PREMISES CONSIDERED, this Commission finds, and so holds, that Jaime Fulo, the late husband of petitioner, was employed by respondent Jaime N. Gapayao from January 1983 to November 4, 1997, working for nine (9) months a year receiving the minimum wage then prevailing. Accordingly, the respondent is hereby ordered to pay P45,315.95 representing the unpaid SS contributions due on behalf of deceased Jaime Fulo, the amount of P217,710.33 as 3% per month penalty for late remittance thereof, computed as of March 30, 2006, without prejudice to the collection of additional penalty accruing thereafter, and the sum of P230,542.20 (SSS) and P166,000.00 (EC) as damages for the failure of the respondent to report the deceased Jaime Fulo for SS coverage prior to his death pursuant to Section 24(a) of the SS Law, as amended. The SSS is hereby directed to pay petitioner Rosario Fulo the appropriate death benefit, pursuant to Section 13 of the SS Law, as amended, as well as its prevailing rules and regulations, and to inform this Commission of its compliance herewith. SO ORDERED.

Aggrieved, petitioner appealed to the CA on 19 December 2007.20 On 17 March 2010, the CA rendered a Decision21 in favor of private respondent, as follows: In fine, public respondent SSC had sufficient basis in concluding that private respondents husband was an employee of petitioner and should, therefore, be entitled to compulsory coverage under the Social Security Law. Having ruled in favor of the existence of employer-employee relationship between petitioner and the late Jaime Fulo, it is no longer necessary to dwell on the other issues raised. Resultantly, for his failure to report Jaime Fulo for compulsory social security coverage, petitioner should bear the consequences thereof. Under the law, an employer who fails to report his employee for social security coverage is liable to [1] pay the benefits of those who die, become disabled, get sick or reach retirement age; [2] pay all unpaid contributions plus a penalty of three percent per month; and [3] be held liable for a criminal offense punishable by fine and/or imprisonment. But an employee is still entitled to social security benefits even is (sic) his employer fails or refuses to remit his contribution to the SSS. WHEREFORE, premises considered, the Resolution appealed from is AFFIRMED in toto. SO ORDERED. In holding thus, the CA gave credence to the findings of the SSC. The appellate court held that it "does not follow that a person who does not observe normal hours of work cannot be deemed an employee."22 For one, it is not essential for the employer to actually supervise the performance of duties of the employee; it is sufficient that the former has a right to wield the power. In this case, petitioner exercised his control through an overseer in the person of Amado Gacelo, the tenant on petitioners land.23 Most important, petitioner entered into a Compromise Agreement with private respondent and expressly admitted therein that he was the employer of the deceased.24 The CA interpreted this admission as a declaration against interest, pursuant to Section 26, Rule 130 of the Rules of Court.25 Hence, this petition. Public respondents SSS26 and SSC27 filed their Comments on 31 January 2011 and 28 February 2011, respectively, while private respondent filed her Comment on 14 March 2011.28 On 6 March 2012, petitioner filed a "Consolidated Reply to the Comments of the Public Respondents SSS and SSC and Private Respondent Rosario Fulo."29 ISSUE The sole issue presented before us is whether or not there exists between the deceased Jaime Fulo and petitioner an employer-employee relationship that would merit an award of benefits in favor of private respondent under social security laws. THE COURTS RULING

On 18 May 2007, petitioner filed a Motion for Reconsideration,18 which was denied in an Order19 dated 16 August 2007.

In asserting the existence of an employer-employee relationship, private respondent alleges that her late husband had been in the employ of petitioner for 14 years, from 1983 to 1997.30 During that period, he was made to work as a laborer in the agricultural landholdings, a harvester in the abaca plantation, and a repairman/utility worker in

several business establishments owned by petitioner.31 To private respondent, the "considerable length of time during which [the deceased] was given diverse tasks by petitioner was a clear indication of the necessity and indispensability of her late husbands services to petitioners business."32 This view is bolstered by the admission of petitioner himself in the Compromise Agreement that he was the deceaseds employer.33 Private respondents position is similarly espoused by the SSC, which contends that its findings are duly supported by evidence on record.34 It insists that pakyaw workers are considered employees, as long as the employer exercises control over them. In this case, the exercise of control by the employer was delegated to the caretaker of his farm, Amado Gacelo. The SSC further asserts that the deceased rendered services essential for the petitioners harvest. While these services were not rendered continuously (in the sense that they were not rendered every day throughout the year), still, the deceased had never stopped working for petitioner from year to year until the day the former died.35 In fact, the deceased was required to work in the other business ventures of petitioner, such as the latters bakery and grocery store.36 The Compromise Agreement entered into by petitioner with private respondent should not be a bar to an employee demanding what is legally due the latter.37 The SSS, while clarifying that it is "neither adversarial nor favoring any of the private parties x x x as it is only tasked to carry out the purposes of the Social Security Law,"38 agrees with both private respondent and SSC. It stresses that factual findings of the lower courts, when affirmed by the appellate court, are generally conclusive and binding upon the Court.39 Petitioner, on the other hand, insists that the deceased was not his employee. Supposedly, the latter, during the performance of his function, was not under petitioners control. Control is not necessarily present even if the worker works inside the premises of the person who has engaged his services.40 Granting without admitting that petitioner gave rules or guidelines to the deceased in the process of the latters performing his work, the situation cannot be interpreted as control, because it was only intended to promote mutually desired results.41 Alternatively, petitioner insists that the deceased was hired by Adolfo Gamba, the contractor whom he had hired to construct their building;42 and by Amado Gacelo, the tenant whom petitioner instructed to manage the latters farm.43 For this reason, petitioner believes that a tenant is not beholden to the landlord and is not under the latters control and supervision. So if a worker is hired to work on the land of a tenant such as petitioner the former cannot be the worker of the landlord, but of the tenants.44 Anent the Compromise Agreement, petitioner clarifies that it was executed to buy peace, because "respondent kept on pestering them by asking for money."45 Petitioner allegedly received threats that if the matter was not settled, private respondent would refer the matter to the New Peoples Army.46 Allegedly, the Compromise Agreement was "extortion camouflaged as an agreement."47 Likewise, petitioner maintains that he shouldered the hospitalization and burial expenses of the deceased to express his "compassion and sympathy to a distressed person and his family," and not to admit liability.48 Lastly, petitioner alleges that the deceased is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short period of time, in the nature of a farm worker every season, he was not precluded from working with other persons and in fact worked for them. Under Article 280 of the Labor Code,49 seasonal employees are not covered by the definitions of regular and casual employees.50 Petitioner cites Mercado, Sr. v. NLRC,51 in which the Court held that seasonal workers do not become regular employees by the mere fact that they have rendered at least one year of service, whether continuous or broken.52 We see no cogent reason to reverse the CA.

I Findings of fact of the SSC are given weight and credence. At the outset, it is settled that the Court is not a trier of facts and will not weigh evidence all over again. Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the CA.53 For as long as these findings are supported by substantial evidence, they must be upheld.54 II Farm workers may be considered regular seasonal employees. Article 280 of the Labor Code states: Article 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of their engagement, or those whose work or service is seasonal in nature and is performed for the duration of the season; and (3) casual employees or those who are neither regular nor project employees.55 Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees may be considered as regular employees.56 Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is such that during the off season, they are temporarily laid off; but reemployed during the summer season or when their services may be needed.57 They are in regular employment because of the nature of their job,and not because of the length of time they have worked.58 The rule, however, is not absolute. In Hacienda Fatima v. National Federation of Sugarcane Workers-Food & General Trade,59 the Court held that seasonal workers who have worked for one season only may not be considered regular employees. Similarly, in Mercado, Sr. v. NLRC,60 it was held that when seasonal employees are free to contract their services with other farm owners, then the former are not regular employees.

For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they perform and the usual trade or business of the employer.61 This test has been explained thoroughly in De Leon v. NLRC,62 viz: The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade 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 the 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 one year, even if the performance is not continuous or merely intermittent, the law deems the 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 also considered regular, but only with respect to such activity and while such activity exists. A reading of the records reveals that the deceased was indeed a farm worker who was in the regular employ of petitioner. From year to year, starting January 1983 up until his death, the deceased had been working on petitioners land by harvesting abaca and coconut, processing copra, and clearing weeds. His employment was continuous in the sense that it was done for more than one harvesting season. Moreover, no amount of reasoning could detract from the fact that these tasks were necessary or desirable in the usual business of petitioner. The other tasks allegedly done by the deceased outside his usual farm work only bolster the existence of an employer-employee relationship. As found by the SSC, the deceased was a construction worker in the building and a helper in the bakery, grocery, hardware, and piggery all owned by petitioner.63 This fact only proves that even during the off season, the deceased was still in the employ of petitioner. The most telling indicia of this relationship is the Compromise Agreement executed by petitioner and private respondent. It is a valid agreement as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he or she was entering into.64 All that is required for the compromise to be deemed voluntarily entered into is personal and specific individual consent.65 Once executed by the workers or employees and their employers to settle their differences, and done in good faith, a Compromise Agreement is deemed valid and binding among the parties.66 Petitioner entered into the agreement with full knowledge that he was described as the employer of the deceased.67 This knowledge cannot simply be denied by a statement that petitioner was merely forced or threatened into such an agreement.1wphi1 His belated attempt to circumvent the agreement should not be given any consideration or weight by this Court. III Pakyaw workers are regular employees, provided they are subject to the control of petitioner. Pakyaw workers are considered employees for as long as their employers exercise control over them. In Legend Hotel Manila v. Realuyo,68 the Court held that "the power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. This is the socalled control test and is premised on whether the person for whom the services are performed reserves the right

to control both the end achieved and the manner and means used to achieve that end." It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof.69 It is not essential that the employer actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power.70 In this case, we agree with the CA that petitioner wielded control over the deceased in the discharge of his functions. Being the owner of the farm on which the latter worked, petitioner on his own or through his overseer necessarily had the right to review the quality of work produced by his laborers. It matters not whether the deceased conducted his work inside petitioners farm or not because petitioner retained the right to control him in his work, and in fact exercised it through his farm manager Amado Gacelo. The latter himself testified that petitioner had hired the deceased as one of the pakyaw workers whose salaries were derived from the gross proceeds of the harvest.71 We do not give credence to the allegation that the deceased was an independent contractor hired by a certain Adolfo Gamba, the contractor whom petitioner himself had hired to build a building. The allegation was based on the self-serving testimony of Joyce Gapay Demate,72 the daughter of petitioner. The latter has not offered any other proof apart from her testimony to prove the contention. The right of an employee to be covered by the Social Security Act is premised on the existence of an employeremployee relationship.73 That having been established, the Court hereby rules in h1vor of private respondent. WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed Decision and resolution of the Court of Appeals in CA-G.R. SP. No. 101688 dated 17 March 2010 and 13 August 2010, respectively, are hereby AFFIRMED. SO ORDERED. G.R. No. 149440 January 28, 2003

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents. PANGANIBAN, J.: Although the employers have shown that respondents performed work that was seasonal in nature, they failed to prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these workers have served them for several years already. Hence, they are regular not seasonal employees. The Case Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the February 20, 2001 Decision of the Court of Appeals 1 (CA) in CA-GR SP No. 51033. The dispositive part of the Decision reads: "WHEREFORE, premises considered, the instant special civil action for certiorari is hereby DENIED." 2

On the other hand, the National Labor Relations Commission (NLRC) Decision, 3 upheld by the CA, disposed in this wise: "WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered declaring complainants to have been illegally dismissed. Respondents are hereby ORDERED to reinstate complainants except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their previous position and to pay full backwages from September 1991 until reinstated. Respondents being guilty of unfair labor practice are further ordered to pay complainant union the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages." 4 The Facts The facts are summarized in the NLRC Decision as follows: "Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or were choosy in the kind of jobs they wanted to perform, the records is replete with complainants' persistence and dogged determination in going back to work. "Indeed, it would appear that respondents did not look with favor workers' having organized themselves into a union. Thus, when complainant union was certified as the collective bargaining representative in the certification elections, respondents under the pretext that the result was on appeal, refused to sit down with the union for the purpose of entering into a collective bargaining agreement. Moreover, the workers including complainants herein were not given work for more than one month. In protest, complainants staged a strike which was however settled upon the signing of a Memorandum of Agreement which stipulated among others that: 'a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to conclude the same within thirty (30) days. 'b) The management will give priority to the women workers who are members of the union in case work relative . . . or amount[ing] to gahit and [dipol] arises. 'c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.

"Moreover, starting September 1991, respondents did not any more give work assignments to the complainants forcing the union to stage a strike on January 2, 1992. But due to the conciliation efforts by the DOLE, another Memorandum of Agreement was signed by the complainants and respondents which provides: 'Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of the union officials and members; 'Whereas parties to the present dispute agree to settle the case amicably once and for all; 'Now therefore, in the interest of both labor and management, parties herein agree as follows: '1. That the list of the names of affected union members hereto attached and made part of this agreement shall be referred to the Hacienda payroll of 1990 and determine whether or not this concerned Union members are hacienda workers; '2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the subjects of a Memorandum of Agreement entered into by and between the parties last January 4, 1990; '3. That herein parties can use other employment references in support of their respective claims whether or not any or all of the listed 36 union members are employees or hacienda workers or not as the case may be; '4. That in case conflict or disagreement arises in the determination of the status of the particular hacienda workers subject of this agreement herein parties further agree to submit the same to voluntary arbitration; '5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be composed of three representatives each and is given five working days starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers. (Union representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.)" "Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as follows: 'The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who received their 13th month pay. The following are deemed not considered employees: 1. 2. 3. 4. Luisa Rombo Ramona Rombo Bobong Abrega Boboy Silva

'd) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to the actual strike will be given priority. However, in case the said workforce would not be enough, the management can hire additional workers to supplement them. 'e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to work in the hacienda; and 'f) The union will immediately lift the picket upon signing of this agreement.'

'The name Orencio Rombo shall be verified in the 1990 payroll. "However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its commitment to sit down and bargain collectively. Instead, respondent employed all means including the use of private armed guards to prevent the organizers from entering the premises. 'The following employees shall be reinstated immediately upon availability of work: 1. Jose Dagle

7. 2. 8. 3. 9. 4. 10. 5. 11. 6. 12.

Alejandro Tejares Rico Dagle Gaudioso Rombo Ricardo Dagle Martin Alas-as Jr. Jesus Silva Cresensio Abrega Fernando Silva

"A. Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were regular 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 refers exclusively to casual employees who have served for at least one year. "B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, . . . and relying instead on rulings which are not directly applicable to the case at bench, viz, Philippine Tobacco, Bacolod-Murcia, and Gaco, . . . "C Whether or not the Court of Appeals committed grave abuse of discretion in upholding the NLRC's conclusion that private respondents were illegally dismissed, that petitioner[s were] guilty of unfair labor practice, and that the union be awarded moral and exemplary damages." 8 Consistent with the discussion in petitioners' Memorandum, we shall take up Items A and B as the first issue and Item C as the second. The Court's Ruling

Ariston Eruela Sr. The Petition has no merit. Ernesto Tejares First Issue: Ariston Eruela Jr.' Regular Employment

"When respondents again reneged on its commitment; complainants filed the present complaint. "But for all their persistence, the risk they had to undergo in conducting a strike in the face of overwhelming odds, complainants in an ironic twist of fate now find themselves being accused of 'refusing to work and being choosy in the kind of work they have to perform'." 5 (Citations omitted) Ruling of the Court of Appeals 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 and were therefore still employed by petitioners. Moreover, the workers enjoyed security of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal. The appellate court found neither "rhyme nor reason in petitioner's argument that it was the workers themselves who refused to or were choosy in their work." As found by the NLRC, the record of this case is "replete with complainants' persistence and dogged determination in going back to work." 6 The CA likewise concurred with the NLRC's finding that petitioners were guilty of unfair labor practice. Hence this Petition. 7 Issues Petitioners raise the following issues for the Court's consideration: For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on certiorari of CA decisions. 9 Questions of fact are not entertained. 10 The Court is not a trier of facts and, in labor cases, this doctrine applies with greater force. 11 Factual questions are for labor tribunals to resolve. 12 In the present case, these have already been threshed out by the NLRC. Its findings were affirmed by the appellate court. Contrary to petitioners' contention, the CA did not err when it held that respondents were regular employees. Article 280 of the Labor Code, as amended, states: "Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. "An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exist." (Italics supplied)

The evidence proves the existence of the first, but not of the second, condition. The fact that respondents with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently, petitioners employed respondents for more than one season. Therefore, the general rule of regular employment is applicable. In Abasolo v. National Labor Relations Commission, 13 the Court issued this clarification: "[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC, in which this Court held: "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 trade or business of the employer. The connection can be determined by considering the nature of the 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. xxx xxx xxx

Unfair Labor Practice The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows: "Indeed, from respondents' refusal to bargain, to their acts of economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot but conclude that respondents did not want a union in their haciendaa clear interference in the right of the workers to self-organization." 17 We uphold the CA's affirmation of the above findings. Indeed, factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality. Their findings are binding on the Supreme Court. 18 Verily, their conclusions are accorded great weight upon appeal, especially when supported by substantial evidence. 19 Consequently, the Court is not dutybound to delve into the accuracy of their factual findings, in the absence of a clear showing that these were arbitrary and bereft of any rational basis." 20 The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary damages." 21 WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.

". . . [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the . . . season does not detract from considering them in regular employment since in a litany of cases this Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely considered on leave until re-employed." 14 The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the case at bar. In the earlier case, the workers were required to perform phases of agricultural work for a definite period of time, after which their services would be available to any other farm owner. They were not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof. On the other hand, herein respondents, having performed the same tasks for petitioners every season for several years, 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 workers to 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 was their valid exercise of a management prerogative. The sudden changes 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 deprived of their jobs. Petitioners' move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code. "Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and authorized cause." 16 In the case at bar, petitioners failed to prove any such cause for the dismissal of respondents who, as discussed above, are regular employees. Second Issue:

SO ORDERED. G.R. No. 127395 December 10, 1998

PHILIPPINE TOBACCO FLUE-CURING & REDRYING CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LIGAYA LUBAT, MARY JANE ESTARIS, EUFRECINA JAVIER, OFELIA PLANDEZ, EDGARDO FORMENTO, CRESCENCIA TIU, MA. VICTORIA LEON, GELLEN EULALIA, AIDA LICUDO, LUCINA LURIS, ERLINDA BORCE, DOMINGA AYALA, CARMELITA APANTO, AIDA ALBANIEL, SALVACION SORIO, PETRONILA SAMSON, ERLINDA CARANAY, ROSALIE TIU, MILAGROS QUISMUNDO, LUZ DELA CRUZ, VIVIAN DERLA, IRENE ENIEGO, VICENTA GARCIA, YOLANDA IGNACIO, ADORACION LADERA, GLORIA MENDEZ, LEONILA MENDOZA, REBECCA MORALES, TERESITA TIU, EMELITA QUILANO, JULIETA PEDRIGAL, ANTONIA REYES, JOSEFA ROSALES, FRANCISCA TISMO, NORMA AGUIRRE, CAROLINA AVISO, AMELIA BAUTISTA, ROSA BORJA, APOLONIA CASTILLO, CARMELITA CAYETANO, ROSELFIDA CENTINA, PATRIA BUSTILLO, FELICIAD CIPRIANO, MARINA CORPUZ, MATILDE CORPUZ, JOSEFINA CUENZA, BIENVENIDA DE GUZMAN, EUGENIA DELA CRUZ, MARIA PINEDA, PANCHITA NARCA, CRISANTA MULAWIN, VIRGINIA MENGOLIO, ROSARIO OSMA, ARCELI MADRILEJO, CRISTOPHER LABADOR, CANDELARIA LAZONA, ANGELITA LESTINGYO, CARMELITA ESPIRITU, HELEN ESTARIS, ROSA JAPSON, ARDIONELA LAZONA, ARIEL ULTRA, REYNANTE TUMBUCON, ANTENOR REMOLLINO, ALEXANDER REMOLLINO, ARNALDO NAPALIT, MACARIO MORIEL, JOSELITO LICUDO, PATERNO LAVALLA, JERRY LICUDO, CESAR SAMSON, EDUARDO ESGUERRA JR., RAMISES CENTARAN, JUAN BUSTILLO, ROLANDO ALBANIEL, REYNALDO AQUINO, JAIME ESGUERRA, ARMANDO JAPSON, FERNANDO ESGUERRA, CARLITO ENIEGO, REYNALDO DAYOT, MARCELO DAYOT, RODOLFO CERBITE, ARTEMIO BOQUILLA, PASCUAL AGUJA, ERIC AGUJA, CELESTINA AQUINO, REYNALDO BARQUIN, FELOMENA BEGONIA, ROSITA BAGONIA, REGINA BENITEZ, EDGARDO BERGANO, RODOLFO BORROMEO, LUDIVICO DALAY, ASCILIPIADES GOYENA, REMEDIO GOYENA, OSCAR EMNACE, GERTRUDES GUIAO, LOLITA MUSNE, ALBERTO PARAMA, LUNINGNING PERALTA, AMELIA RANCHES, ERNESTO SAN JUAN, LIWAYWAY

SAN JUAN, RICARDO TRIUMFANTE, LORENA TORCIDO, PRISCILLA VILLASIN, LUZVIMINDA VILLEGAS, ROSILE VERSOZA, CHARITO ISIDRO, PETER LABAYNE, and SHIRLEY LUBAT, respondents.

PANGANIBAN, J.: This case involves two groups of seasonal workers who claimed separation benefits after the closure of petitioner's tobacco processing plant in Balintawak, Metro Manila and the transfer of its tobacco operations to Candon, Ilocos Sur. Petitioner refuses to grant separation pay to the workers belonging to the first batch (referred to as the Lubat group), because they had not been given work during the preceding year and, hence, were no longer in its employ at the time it closed its Balintawak plant. Likewise, it claims exemption from awarding separation pay to the second batch (the Luris group), because the closure of its plant was due to "serious business losses," as defined in Article 283 of the Labor Code. In resolving this controversy, this Court issues the following rulings: (1) the aforecited Article 283 applies to both complete and partial cessation of operations; (2) "serious business losses" that would have exempted petitioner from paying separation benefits were not proven by its "recasted financial statements"; (3) the employer's refusal to rehire the first batch of employees had no legal justification and was thus an illegal dismissal; and (4) the second batch of employees are entitled to the separation pay provided by the Labor Code "in cases of closure . . . not due to serious business losses." The Case The foregoing point encapsulate our ruling on the present Petition for Certiorari, assailing the August 30, 1996 Decision of the National Labor Relations Commission (NLRC) 1 in NLRC NCR Case No. 00-08-06061-94 and NLRC Case No. 08-06082-94, the dispositive portion of which reads: WHEREFORE, the instant appeals are hereby dismissed for lack of merit. 2 The NLRC upheld the November 27, 1995 Decision of the labor arbiter 3 which disposed: WHEREFORE, premises considered, respondent PHILIPPINE TOBACCO FLUE-CURING and REDRYING CORPORATION is hereby ordered to pay within ten (10) days from receipt hereof herein complainants (Lubat group) their respective separation pay, equivalent to one-half month pay for every year of service considering the above stated conditions, as follows: under Lubat Group: Mary Jane Estaris P9,206.25 (P122.75 x 15 days x 5 yrs.); Eufrecina Javier P9,131.25 (P121.75 x 15 days x 5 yrs.); Ofelia Plandez P10,957.50 (P121.75 x 15 days x 6 yrs.); Edgardo Pormento P5,310 (P118 x 15 x 3 yrs.); Cresencia Tiu P7,140 (P119 x 15 days x 4 yrs.); Ma. Victoria Leon P7,305 (P121.75 x 15 days x 4 yrs.); Ligaya Lubat P11,047.50 (122.75 x 15 days x 6 yrs.); Gellen Eulalia P12,888.75 (P122.75 x 15 days x 7 yrs.); and Aida Licudo P18,630 (P124.20 x 15 days x 10 yrs.); and [u]nder Luris group: Erlinda Borce P37,116 (P154.65 x 15 days x 21 yrs.) (less) of P11,598.75); Dominga Ayala P56,477.94 (P156.40 x 15 days x 32 yrs.) P18,594.06); Carmelita Apanto P42,720.20 (P154.65 x 15 days x 22 yrs.) P13,757.74); Aida Albaniel P6,693.75 (P148.75 x 15 days x 5 yrs.) P4,462.50); Salvacion Sorio (P51,034.50 (P154.65 x 15 days x 30 yrs.) P18,558.00); Petronila Samon Petronilo Samson) P13,567.50 (P150.75 x 15 days x 9 yrs.) P6,783.75); Erlinda Caranay P34,615.81 (P153.65 x 15 days x 20 yrs.) P11,479.19); Rosalie Tiu P11,231.25 (P149.75 x 15 days x 7 yrs.) P4,492.50); Milagros Quismundo P44,943.73 (P154.65 x 15 days x 26 yrs.) P16,149.78); Luz dela Cruz P13,567.50 (P150.75 x 15 days x 9 yrs.) P6,783.75); Vivian Derla

P13,477.50 (P149.75 x 15 days x 8 yrs.) P4,492.50); Irene Eniego P7,475.31 (P149.75 x 15 days x 5 yrs.) (P3,755.94); Vicenta Garcia P44,618.56 (P155.35 x 15 days x 26 yrs.) P15,967.94); Yolanda Ignacio P7,400.31 (P148.75 x 15 days x 5 yrs.) P3,755.94); Adoracion Ladera P18,276 (P152.30 x 15 days x 12) P9,138); Luciana Luris P64,577.78 (P159 x 15 days x 35 yrs.) P18,975.97); Gloria Mendez P32,266.50 (P153.65 x 15 x 18 yrs.) P9,219 Leonila Mendoza P41,485.50 (P153.65 x 15 days x 23 yrs.) P11,523.75); Rebecca Morales P29,835 (P153 x 15 x 17 yrs.) P9,180); Teresita Tiu P27,657 (P153.65 x 15 x 17 yrs.) P11,523.75); Emelita Quilano P23,901.06 (P148.75 x 15 x 5 yrs.) P3,755.94); Julieta Pedrigal P54,622.68 (P156.40 x 15 x 32 yrs.) P20,449.32); Antonia Reyes P52,410.26 (P155.35 x 15 x 33 yrs.) P24,487.99); Josefa Rosales P32,291.83) P153.65 x 15 x 18 yrs.) P9,193.67); Francisca Tismo P25,377.67); (P153.65 x 15 x 5 yrs.) P9,193.58); Norma Aguirre P11,300.25 (P150.75 x 15 x 8 yrs.) P6,783.75); Carolina Aviso P4,522.50 (P150.75 x 15 x 4 yrs.) P4,522.50); Amelia Bautista P13,567.50 (P150.75 x 15 x 9 yrs.) P6,783.75); Rosa Borja P2,863.75 (P145 x 15 x 3 yrs.) P3,661.25); Apolonia Castillo P27,540 (P153 x 15 x 17 yrs.) P11,475); Carmelita Cayetano P34,571.25 (P153.65 x 15 x 20 yrs.) P11,523.75); Roselfida Centina P11,231.25 (P149.75 x 15 x 7 yrs.) P4,492.50); Patria Bustillo P39,461.41 (P154.65 x 16 x 24 yrs.) P16,212.59); Felicidad Cipriano P11,306.25 (P150.75 x 15 x 8 yrs.) P6,783.75); Marina Corpuz P15,716.25 (150.75 x 15 x 10 yrs.) P6,783.75); Matilde Corpuz P34,312.50 (P152.50 x 15 x 20 yrs.) P11,437.50); Josefina Cuenza P70,241.05 (P159.85 x 15 x 40 yrs.) P25,668.95); Bienvenida De Guzman P68,974.45 (P159.15 x 15 x 39 yrs.) P24,128.30; Eugenio dela Cruz P30,281.21 (P153.65 x 15 x 17 yrs.) P8,899.54); Maria Pineda P11,306.25 (P150.75 x 15 x 8 yrs.) P6,783.75); Panchita Narca P34,571.25 (P153.65 x 18 x 20) P11,523.75); Crisanta Mulawin P25,389.98 (P153.65 x 15 x 15 yrs. P9,181.87); Virginia Mengolio P34,571.25 (P153.65 x 15 x 20 yrs. P11,523.75); Rosario Osma P25,286.14 (P153. x 15 x 15 yrs.) P9,138.80); Arceli Madrilejo P51,034.50 (P154.65 x 15 x 28 yrs.) P13,918.50); Christopher Labador P13,507.57 (P149.75 x 15 x 8 yrs.) P4,462.43); Candelaria Lazona P39,435.80 (P154.65 x 15 x 22 yrs.) P11,598.75); Angelita Lestingyo P56,469.28 (156 x 15 x 32 yrs.) P18,602.72); Carmelita Espiritu P20,499.75 (P151.85 x 15 x 13 yrs.) P9,111); Helen Estaris P11,156.25 (P148.75 x 15 x 7 yrs.) P4,462.50); Rosa Japson P29,961.75 (P153.65 x 15 x 18 yrs.) P11,523.75); Ardionela Lazona P13,479.50) (P149.75 x 15 x 8 yrs.) P4,490.50), Ariel Ultra P20,773.70 (P150.75 x 15 x 13 yrs.) P8,622.55); Reynante Tumbucon P4,343.50 (P147.75 x 15 x 7 yrs. P6,738.75); Antenor Remollino P13,609.36) P148-75 x 15 x 8 yrs.) P4,240.64); Alexander Remollino P7,425.56 (P148.75 x 15 x 5 yrs.) P3,760.69); Arnaldo Napalit P27,817.29 (P152.30 x 15 x 16 yrs. P8,734.71); Macario Moriel P37,046.96 (153.65 x 15 x 22 yrs. (P13,657.57); Joselito Licudo P5,135 (P147.75 x 15 x 4 yrs. P3,730.69); Paterno Lavalle P7,350.56 (P147.75 x 15 x 5 yrs. P3,730.69); Jerry Licudo P11,257.05 (P149.75 x 15 x 7 yrs. P4,466.70); Cesar Samson P2,918.06 (P147.75 x 15 x 3 yrs. P3,730.69); Eduardo Esguerra, Jr. P20,412 (P151.20 x 15 x 15 yrs. P13,608); Ramises Centaran P17,970 (P149.75 x 15 x 8 yrs. less the amount advanced to him if any; Juan Bustillo P9,665.26 (P148.75 x 15 x 6 yrs. P3,722.24); Rolando Albaniel P20,351.25 (P150.75 x 15 x 12 yrs. P6,783.75); Reynaldo Aquino P27,475.35 (P150.75 x 15 x 16 yrs. P8,704.65); Jaime Esguerra P3,175.20 (P151.20 x 15 x 19 yrs. P11,340); Armando Japson P11,156.25 (P148.75 x 15 x 7 yrs. P4,462.50); Fernando Esguerra P15,723[.]75 (P149.75 x 15 x 9 yrs. P4,492.50); Carlito Eniego P13,066.14 (P145.94 x 15 x 8 yrs. P4,446.66); Carlito Eniego P13,066.14 (P145.95 x 15 x 8 yrs. P4,446.66); Reynaldo Dayot P9,566.81 (P147.75 x 15 x 6 yrs. P3,730.69); Marcelo Dayot P9,074.36 (P149.75 x 15 x 7 yrs. P6,649.39); Rodolfo Cerbite P24,873.75 (P150.75 x 15 x 16 yrs. P11,306.25); Artemio Boquilla P44,362.93 (P153.65 x 15 x 25 yrs. P13,255.82); and the following subject to the no. of years provided they rendered at least one (1) month service each season as appearing in their personnel and service records. Pascuala Aguja P48,399.75 (P153.65 x 15 x 26 yrs. P11,523.75); Eric Aguja P9,667.50 (P118 x 15 x 8 yrs. P4,492.50); Celestina Aquino P11,257.51 (P149,75 x 15 x 8 yrs. P6,712.49); Reynaldo Barquin P13,519.26 (P149.75 x 15 x 9 yrs. P6,696.99); Felomena Bagonia P24,716.25 (150 x 15 x 14 yrs. P6,783.75); Rosita Bagonia P42,386.26 (P149.75 x 15 x 24 years. P11,523.75); Regina Benitez P56,586.75 (P151 x 15 x 28 yrs. P6,833.25); Edgardo Bergano P9,784.75 (P149.40 x 15 x 6 yrs. P3,661.25); Rodolfo Borromeo P26,979.81 (P150 x 15 x 18 yrs. P13,520.19); Ludivico

Dalay P14,180.36 (P152.50 x 15 x 10 yrs. P8,694.64); Ascilipiades Goyena P27,020.63 (P150 x 15 x 18 yrs. P13,479.37); Remedios Goyena P22,511.25 (P150 x 15 x 13 yrs. P6,738.75); Oscar Emnace P17,970 (P149.75 x 15 x 8 yrs. less the amount he received if any); Gertrudes Guiao P59,670 (P153 x 15 x 29 yrs. P6,885); Lolita Musne P53,394.36 (P154,65 x 15 x 29 yrs. P13,878.39); Alberto Parama P12,161.25 (P140 x 15 x 9 yrs. P6,738.75); Luningning Peralta P48,448.50 (P153.65 x 15 x 26 yrs. P11,475); Amelia Ranches P58,102.04 (P157.60 x 15 x 34 yrs. P22,273.96); Ernesto San Juan P11,261.25 (P149.75 x 15 x 7 yrs. P4,462.50); Liwayway San Juan P67,655.08) P160.35 x 15 x 39 yrs. P26,149.67); Ricardo Triumfante P8,986.00 (P149.75 x 15 x 7 yrs. P6,738.75); Lorena Torcido P11,231.25 (P149.75 x 15 x 8 yrs. P6,738.75); Priscilla Villasin P64,162.50 (P147.50 x 15 x 29 yrs. less any amount she received from the respondent; Luzviminda Villegas P13,478 (P149.75 x 15 x 8 yrs. P4,492.00); Rosile Verzosa P13,387.50 (P149. x 15 x 8 yrs. P4,492.50); Charito Isidro P53,997 (P155.85 x 15 x 32 yrs. P20,811); Peter Labayne P17,130.36 (P150.45 x 15 x 7 yrs. P15,132.38); Shirley Lubat P13,773 (P149.75 x 15 x 8 yrs. P4,196.22); or a total sum of P2,811,724.33, plus ten (10%) percent attorney's fee, or a grand total sum of P3,092,896.76. As . . . data o[n] their salary rates were not indicated on record, the claims of complainants Milagros Calubayan, Carmencita Cruz, Armando Goyena, Erlinda Nakpil, Pacita Narca, Virgilio Punzalan, Roberto Reduta, Maritess Medina, Nestor Medina, and Dominga Siababa can not be ascertained, and therefore, the same should be dismissed but without prejudice. With respect to the other claims of the above Luris group including their charge of illegal dismissal, they are hereby dismissed for lack of merit. 4 The Facts The facts are summarized in the challenged NLRC Decision as follows:

1)

Whether or not the Lubat Group are entitled to the payment of separation pay[:]

2) Whether or not the Luris Group can be legally awarded separation pay differentials[,] or whether or not the computation adopted by respondent in granting complainants' separation pay is erroneous[;] and 3) Whether or not the Luris group can be properly allowed backwages and damages by reason of their alleged illegal dismissal, and for both groups, attorney's fees[.] In [its] position paper respondent maintains that [the] Lubat group are not entitled to separation pay for the reason that they were not among those separated or could not have been separated from employment on August 3, 1994 due to such closure and transfer as they were not employed or did not report for work at the plant for the 1994 tobacco season as shown by [the] company's records. As to the Luris group, although being questioned by this group, respondent considers the following formula in determining the length of service in years as basis for computing the separation pay of this group to be fair and reasonable and . . . supported by Article 283 of the Labor Code, as amended, such as the total number of working days actually worked over total number of working days in a year (303 days), multipl[ied] by the daily rate and further multipl[ied] by 15 days. Respondent explains that this is so because complainants' nature of work is seasonal as they are employed every year only during the tobacco season which may fall within the months of February to November but actually work for a period of less [than] six (6) months for each season. The law qualifies tenure for purposes of separation benefits as based on "service" and not "employment". With these considerations, respondent claims that complainants' relief for separation pay differentials must fail.

These refer to the consolidated cases for payment of separation pay lodged by [the] Lubat Group, and for illegal dismissal and underpayment of separation pay by [the] Luris group, with prayers for damages and attorney's fees against the above respondents.

On the charge of illegal dismissal by the Luris group, respondent asserts that complainants were separated from employment for [a] just cause that is the closure of its REDRYING operations at the Balintawak Plant and the transfer of the same to Candon, Ilocos Sur which was authorized by the law and the parties' CBA. The decision of management to close and transfer its tobacco processing and REDRYING operations was based on the fact that it had consistently incurred a net loss from these operations, its principal line of business, although its audited financial statement showed a net profit after tax from 1990 to 1993 based on over-all operations. Moreover, respondent points out that as the Luris group and the DOLE were served a written notice at least one (1) month before the intended date of closure effective on Sept. 15, 1994, the due process requirement was met. Viewed from the above, respondent cannot prosper. On the other hand, the Lubat group declare that originally there were seven complainants but eight were added. Being seasonal workers, they were hired by respondent to operate the Balintawak factory from January to September, averaging 6 to 8 months annually.

The record reveals that all complainants in both cases were former workers of respondent with their respective periods of employment and latest wages stated in the parties' pleadings/[a]nnexes. On August 1, 1994, due to supposed serious financial reverses and losses suffered by respondent and its desire to prevent further losses, a notice of permanent closure of its red[r]ying operations at Balintawak, Quezon City and transfer [of] the same to Candon, Ilocos Sur was served to the DOLE. On August 3, 1994, complainants were also notified of the said decision to close and transfer. On August 16, 1994, their separation benefits were given to them but allegedly [based on] wrong computation when management did not consider 3/4 of their length of service as claimed by complainants (Luris group). While the Lubat group were not granted . . . separation pay as their previous seasonal service [was] not continuous, and as of August, 1994, they were not employed ther[e]with as declared by respondent Based on the complaint and from the above facts, the issues are as follows:

As alleged by them, when they reported for their annual shift, respondent refused to extend them assignment for no apparent reason up to the end of the season in August, 1994. When they ask[ed] for separation pay, respondent told them that because they were not in the payroll for 1994, no such benefit would be paid to them. It is their contention that complainants are entitled to separation pay [of] at least one-half month pay for every year of service[,] as they were illegally dismissed[,] to be computed each season ranging from 6 to 8 months [which] should be considered as one year, contrary to the respondent's basis which is the total no. of days they actually rendered service. To back up the above, complainants cite a case wherein the Supreme Court held that seasonal employees are not strictly speaking, separated from the service but merely considered on leave of absence without pay until reemployed. Their employment relationship is never severed but only suspended. For the prosecution of this case, complainants were forced to hire the services of counsel for which they claim . . . attorney's fees. As far as the Luris group are concerned, they state that they were factory workers of respondents numbering one hundred (100) whose names, periods of employment and latest salaries are contained in the lists attached to their position paper. As claimed by this group, on August 3, 1994, respondents told them that their services were already terminated and all of them dismissed as the factory would be transferred to Candon, Ilocos Sur. Letter-notices dated August 3, 1994, (Annexes F, F-1 and F-2 to their position paper) showing that the date when they were notified of the closure was the same date they were instantly dismissed although it is admitted in the notice that their decision to transfer was made as early as March 5, 1994. Furthermore, complainants question the basis of the computations of their separation benefits which should include the period when there [was] no work to be done in a year. [B]ecause of necessity, they received the short amount as their separation pay by way of voucher but "under protest" as shown in Annexes C-C-1 to C-5 to their pleading. With the sudden transfer of the machiner[y] of respondents without giving them advance notice leaving them with insufficient separation pay, complainants experienced serious anxiety and wounded feelings for which they p[r]ay for damages including attorney's fees. Consequently, complainants also pray for backwages, allowance and other benefits from the date of their illegal dismissal up to the final disposition of the case. Furthermore, complainants maintain that since the company is being transferred to the province, the former's separation may be considered compulsory retirement under R.A. 7641, providing for one-half month pay benefit for every year of service, and under Section 3, Rule V, Book III of the Labor Code, as amended for which they also demand payment thereof; Complainants also submitted the computation of their differential in separation pay (addendum and supplemental addendum to their position paper) Annex "G", "G-1" to "G-4".

To state the facts simply, there are two groups of employees, namely, the Lubat group and the Luris group. The Lubat group is composed of petitioner's seasonal employees who not rehired for the 1994 tobacco season. At the start of that season, they were merely informed that their employment had been terminated at the end of the 1993 season. They claimed that petitioner's refusal to allow them to report for work without mention of any just or authorized cause constituted illegal dismissal. In their Complaint, they prayed for separation pay, back wages, attorney's fees and moral damages. On the other hand, the Luris group is made up of seasonal employees who worked during the 1994 season. On August 3, 1994, they received a notice informing them that, due to serious business losses, petitioner planned to close its Balintawak plant and transfer its tobacco processing and redrying operations to Ilocos Sur. Although the closure was to be effective September 15, 1994, they were no longer allowed to work starting August 4, 1994. Instead, petitioner awarded them separation pay computed according to the following formula: total no. of days actually worked x daily rate x 15 days total no. of working days in one year In their Complaint, they claimed that the computation should be based not on the above mathematical equation, but on the actual number of years served. In addition, they contended that they were illegally dismissed, and thus they prayed for back wages. Against these factual antecedents, the labor arbiter ordered the petitioner to pay complainant's separation pay differential plus attorney's fees in the total amount of P3,092,896.76. Dissatisfied with said Decision, Philippine Tobacco and the complainants filed their respective appeals before the NLRC. 5 As noted earlier, the NLRC affirmed the labor arbiter's Decision. Before this Court, only Philippine Tobacco filed the present recourse, as the complainants did not question the NLRC Decision. 6 Ruling of the NLRC The NLRC agreed with the labor arbiter that the closure by petitioner herein of its operations at Balintawak and its transfer thereof to Ilocos Sur were due to serious financial losses. Nonetheless, both labor agencies held that the Luris and Lubat groups were entitled to separation pay equivalent to one-half (1/2) month salary for every of service, provided that the employee worked at least one month in a given year. The NLRC further ruled that private respondents were not entitled to back wages and damages, since the closure of the factory and the termination of their employment were due to a legally recognized cause. Issues Petitioner raises the following issues: A

SUBSTANTIAL AND UNDISPUTED EVIDENCE ON RECORD PROVES THAT THE CLOSURE OF PETITIONER'S OPERATION WAS DUE TO SERIOUS BUSINESS LOSSES AND FINANCIAL REVERSES. PRIVATE RESPONDENTS ARE NOT LEGALLY ENTITLED TO SEPARATION PAY. THE PAYMENT OF SEPARATION PAY TO THE LURIS GROUP IS BASED ONLY ON PETITIONER'S LIBERALITY. B EVEN ASSUMING THAT PETITIONER'S CLOSURE WAS NOT DUE TO SERIOUS BUSINESS LOSSES AND FINANCIAL REVERSES. THE LUBAT GROUP WORKERS ARE STILL NOT ENTITLED [TO] SEPARATION PAY. THE LUBAT GROUP WERE NOT EMPLOYED WITH PETITIONER AT THE TIME OF PETITIONER'S CLOSURE. C EVEN ASSUMING THAT THE LURIS GROUP IS ENTITLED TO SEPARATION PAY. PETITIONER MUST NOT AND CANNOT BE LEGALLY COMPELLED TO PAY MORE THAN THE AMOUNTS ALREADY GIVEN TO THE [SAID] LURIS GROUP. 7 In the Court's view, there issues must be tackled: First, did petition we prove "serious business losses," its justification for the nonpayment of separation pay? Second, was the dismissal of the employees valid? Third, how should the separation pay of illegally dismissed seasonal employees be computed? The Court's Ruling The petition is not meritorious. First Issue: Serious Business Losses Not Proven Petitioner asserts that it submitted before the labor arbiter a Statement of Income and Expenses, as well as a recasted version thereof, showing that it had suffered serious business losses in its tobacco processing and redrying operations. Citing Articles 283 of the Labor Code, it concludes that it is not obligated to award separation pay to its dismissed workers (whether belonging to the Lubat or the Luris group), because the closure of its tobacco business was due to an authorized cause. Petitioner further claims that it complied with the procedural requirement in closing the aforementioned aspect of its business. It filed at the DOLE on August 2, 1994, a Petition for Closure. On August 3, 1994, it also sent to its employees letters informing them of its desire to close its tobacco operations in Balintawak effective September 15, 1994. The fact that it did award separation pay to private respondents was solely out of generosity, and not out of legal duty. Art. 283 of the labor Code, which we quote below, prescribes the requisites and the procedure for an employee's dismissal arising from the closure or cessation of operation of the establishment. Art. 283. 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 workers and the Ministry of

Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. It must be noted that the present case involves the closure of merely a unit or division, not the whole business of an otherwise viable enterprise. Although Article 283 uses the phrase "closure or cessation of operation of an establishment or undertaking," this Court previously ruled in Coca-Cola Bottlers (Phil.), Inc. v. NLRC that said statutory provision applies in cases of both complete and partial cessation of the business operation: . . . Ordinarily, the closing of a warehouse facility and the termination of the services of employees there assigned is a matter that is left to the determination of the employer in the good faith exercise of its management prerogatives. The applicable law in such a case is Article 283 of the Labor Code which permits "closure or cessation of operation of an establishment or undertaking not due to serious business losses or financial reverses," which, in our reading, includes both the complete cessation of operations and the cessation of only part of a company's business. 8 In Somerville Stainless Steel Corporation v. NLRC, 9 the Court held that "[t]he 'loss' referred to in Article 283 cannot be just any kind or amount of loss; otherwise, a company could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted employees. To guard against this possibility of abuse, the Court laid down the following standard which a company must meet to justify retrenchment: . . . Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retired or otherwise laid off. Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs other than labor costs. An employer who, for instance, lays off substantial numbers of workers while continuing to dispense fat executive bonuses and perquisites or so-called "golden parachutes," can scarcely claim to be retrenching in good faith to avoid losses. To impart operational meaning to the constitutional policy of providing "full protection" to labor, the employers prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means e.g., reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs, etc. have been tried and found wanting. Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees. . . .

To repeat, petitioner did not actually close its entire business. It merely transferred or relocated its tobacco processing and redrying operations. Moreover, it was also engaged in, among others, corn and rental operations, which were unaffected by the closure of its Balintawak plant. Tested against the aforecited standards, we hold that herein petitioner was not able to prove serious financial losses arising from its tobacco operations. A close examination of its Statement of Income and Expenses and its recasted version thereof, which were presented in support of its contention, suggests its failure to show business losses. In the recasted Statement, petitioner tried to prove that there was a net loss from its tobacco processing and redrying operations. It did so by subtracting all of its selling, administrative and interest expenses for a given year from the earning in its tobacco sales for the corresponding year. This formula, however, is at best illogical and misleading. Petitioner would have us believe that all of its expenses selling, administrative and interest expenses resulted only from its tobacco processing and redrying operations, and that it incurred no expenses in its other profit centers. On the contrary, the Statement of Income and Expenses shows that the selling and administrative expenses pertain not only to the tobacco business of petitioner, but also to its corn and rental operations, and that the interest expenses pertain to all of its business operations. In fact, the aforementioned Statement shows that there was a net gain from operations in each year covered by the report. In other words, the recasted financial statement effectively modified the Statement of Income and Expenses by deducting form the tobacco operations alone the operating costs pertaining to all business of petitioner. The contention of petitioner that tobacco was its main business does not justify the devious contents of the recasted financial statement. It is difficult to accept that it could not have incurred any expenses in its other operations. Common sense revolts against such proposition. Misleading is petitioner's argument that "public respondent cannot recognize petitioner's aforesaid Statement as the 'normal and reliable method of proof of the profit and loss', and at the same time inconsistently assert that the same does not show that the losses were serious or incurred solely by petitioner's tobacco operations." 10 An audited financial statement is indeed the normal method of proof. But this norm does not compel this Court to accept the contents of the said documents blindly and without thinking. As stated already, the above documents failed to show that petitioner had incurred from its tobacco operations serious losses sufficient to justify the termination of the employment of its workers sans separation pay. Defective Notice Art. 283 of the Labor Code also requires the employer to furnish both the employee and the Department of Labor and Employment a written Notice of Closure at least one month prior to closure. True, in the present case the Notices of Termination were given to the employees on August 3, 1994, and the intended date of closure was September 15, 1994. However, the employees were in fact not allowed to work after August 3, 1994. Therefore, the termination notices to the employees were given in violation of the requisite one-month prior notice under Article 283 of the Labor Code. Petitioner contention that the tobacco season was about to end anyway is without merit, because the law clearly provides, without any qualification, that the employees must be given one-month notice prior to closure. At the very least, respondent members of the Luris group were deprived of work for the remaining days of the 1994

tobacco season. Petitioner could have easily complied with the aforesaid requirement by sending the notices earlier. In fact, according to petitioner, the decision to cease its tobacco operations was made as early as March 5, 1994; hence, petitioner had plenty of time within which to send the notices. Given the illogical and misleading entries in the Statement of Income and Expenses, as well as the recasted version thereof, and the defective Notice of Closure, this Court holds that petitioner was not able to establish that the closure of its business operations in its Balintawak plant was in fact due to serious financial losses. Therefore, under the last two sentences of Article 283 of the Labor Code, the dismissed employees belonging to the Luris group are entitled to separation pay "equivalent to one (1) month pay or at least one half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year." Second Issue: Lubat Group Illegally Dismissed Petitioner relies upon our ruling in Mercado v. NLRC 11 that the "employment [of seasonal employees] legally ends upon completion of the . . . season," a statement which was subsequently reiterated in Magcalas v. NLRC. 12 Thus, petitioner argues that it was not obliged to rehire the members of the Lubat group for the 1994 season, because their employment had been terminated at the end of the 1993 season. Since they were not employed for the 1994 season when the Balintawak plant was closed, it follows that petitioner has no obligation to award them separation pay due to the said closure. We are not persuaded. From the facts, we are convinced that petitioner illegally dismissed the members of the Lubat group when it refused to allow them to work during the 1994 season. This Court has previously ruled in Manila Hotel Company v. CIR 13 that seasonal workers who are called to work from time to time and are temporarily laid of during off-season are not separated from service in said period, but are merely considered on leave until reemployed, viz.: The nature of their relationship . . . is such that during off season they are temporarily laid off but during summer season they are re-employed, or when their services may be needed. They are not strictly speaking separated from the service but are merely considered as on leave of absence without pay until they are re-employed. The above doctrine was echoed by this Court in Industrial-Commercial-Agricultural Workers' Organization (ICAWO) v. CIR 14 and Visayan Stevedore Transportation Company v. CIR. 15 Petitioner claims that the aforecited ruling has been superseded by Article 280 of the Labor Code, which took effect on November 1, 1974. We disagree. There is no clear conflict between the above doctrine and Article 280 of the Labor Code. In fact, the same doctrine was reiterated by this Court in Tacloban Sagkahan Rice and Corn Mills Co. v. NLRC 16 in 1990, which was promulgated after the labor Code took effect. Furthermore, in Bacolod-Murcia Milling Co, Inc. v. NLRC, 17 this Court considered a seasonal workers "in regular employment" in cases involving the determination of an employer-employee relationship and security of tenure. The Court ruled: While under prevailing jurisprudence, Canete may be considered as in regular employment even during those years when she was merely a seasonal worker, that legal conclusion will hold true only in cases involving the determination of an employer-employee relationship or security of tenure.

Again in Gaco v. NLRC, petitioner therein was a seasonal worker employed and repeatedly rehired in a business enterprise similar to that of petitioner herein. Finding that he was in regular employment and thus entitled to separation pay for having been constructively dismissed, the Court stated: I may appear that the work in private respondent Orient Leaf Tobacco Corporation is seasonal, however, the records reveal that petitioner Zenaida Gaco was repeatedly re-hired, sufficiently evidencing the necessity and indispensability of her services to the former's business or trade. Furthermore, she has been employed since 1974 up to the end of the season in 1989. Owing to her length of service, she became a regular employee, by operation of law, one year after she was employed. 18 From the foregoing, it follows that the employer-employee relationship between herein petitioner and members of the Lubat group was not terminated at the end of the 1993 season. From the end of the 1993 season until the beginning of the 1994 season, they were considered only on leave but nevertheless still in the employ of petitioner. The facts in the above-mentioned cases are different from those in Mercado v. NLRC 19 and in Magcalas v. NLRC. 20 In Mercado, although respondent constantly availed herself of petitioners' services from year to year, it was clear from the facts therein that they were not in her regular employ. Petitioners therein performed different phases of agricultural work in a given year. However, during that period that period, they were free to work for other farm owners, and in fact they did. In other words, they worked for respondent, but were nevertheless free to contract their services with other farm owners. The Court was thus emphatic when it ruled that petitioners were mere project employees, who could be hired by other farm owners. As such, their employment would naturally end upon the completion of each project or each phase of farm work which has been contracted. In Magcalas v. NLRC, the Court merely cited the aforequoted ruling to explain the difference among regular, project and seasonal employees. In fact, it concluded that the employees therein were regular and not project employees. From the peculiar facts of Mercado and Magcalas, it is clear that the ruling therein is not inconsistent with Manila Hotel, Gaco and other cases. It is noteworthy that the ponente in Mercado concurred in the Court's ruling in Gaco awarding to the seasonal employee separation pay for every year of service. Prescinding from the above, we hold that petitioner is liable for illegal dismissal and should be responsible for the reinstatement of the Lubat group and the payment of their back wages. However, since reinstatement is no longer possible as petitioner has already closed its Balintawak plant, respondent members of the said group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at least one month pay, or one month pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded to the Lubat group is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Article 283 in case of retrenchment to prevent losses or in case of closure or cessation of the employer's business, in either of which the separation pay is equivalent to at least one (1) month or one-half (1/2) month pay for every year of service, whichever is higher. However, despite the fact that the respondent members of the Lubat group were entitled to separation pay equivalent to at least one (1) month pay, or one (1) month pay for every year of service, whichever is higher, they cannot receive more than the amount awarded to them in the NLRC Decision at least one (1) month or one-half (1/2) month pay for every year of service, whichever is higher because they did not appeal from the said Decision. 21 Therefore, no affirmative award can be given to them. In the same manner, although respondents should have been entitled to back wages because petitioner illegally deprived them of work during the 1994 season, no such award can given to them, since they did not appeal the NLRC Decision. The elementary norms of due

process prevent the grant of such awards, as the employer was not given notice that its filing of its own Petition for Certiorari would put it in jeopardy of such relief. Third Issue: Amount of Separation Pay Petitioner posits that the separation pay of a seasonal worker, who works for only a fraction of a year, should not be equated with that of a regular worker. Positing that the total number of working days in one year is 303 days, petitioner submits the following formula for the computation of a seasonal worker's separation pay: Total No. of Days Actually Worked x Daily Rate x 15 days 22 Total No. of Working Days In One Year Agreeing with the labor arbiter and the NLRC, private respondents, on the other hand, claim that their separation pay should be based on the actual number of years they have been in petitioner's service. They cite the law on service incentive leave, 23 the implementing rules regarding the 13th month pay, 24 Manila Hotel v. CIR, 25 and Chartered Bank v. Ople 26 which allegedly stated that "each season in a year in a year should be construed as one year of service." 27 The amount of separation pay is based on two factors: the amount of monthly salary and the number of years of service. Although the Labor Code provides different definitions as to what constitutes "one year of service," Book Six 28 does not specifically define "one year of service" for purposes of computing separation pay. However, Articles 283 and 284 both state in connection with separation pay that a fraction of at least six months shall be considered one whole year. Applying this to the case at bar, we hold that the amount of separation pay which respondent members of the Lubat and Luris groups should receive is one-half (1/2) their respective average monthly pay during the last season they worked multiplied by the number of years they actually rendered service, provided that they worked for at least six months during a given year. 29 The formula that petitioner proposes, wherein a year of work is equivalent to actual work rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and 284 provide that in connection with separation pay, a fraction of at least six months shall be considered one whole year. Under these provisions, an employee who worked for only six months in a given year which is certainly less than 303 days is considered to have worked for one whole year. In the same manner, Chartered Bank v. Ople, 30 which private respondents cite, does not support their cause. The said case ruled that regular workers and those who are paid by the month are both entitled to holiday pay. On the other hand, the law on service incentive leave pay 31 does not necessarily apply to retirement benefits or separation pay. Likewise, the provision regarding the 13th month pay 32 is not applicable to separation pay. In fact, an employee who worked for a single month in a year is entitled to a 13th month pay equivalent to only 1/12 of his or her monthly salary. Finally, Manila Hotel Company v. CIR 33 did not rule that seasonal workers are considered at work during off season with regard to the computation of separation pay. Said case merely held that, in regard to season workers, the employer-employee relationship is not severed during off-season but merely suspended.

WHEREFORE, the assailed Decision of Respondent NLRC is hereby AFFIRMED WITH THE MODIFICATION that private respondents are hereby awarded separation pay equivalent to one (1) month, or to one-half (1/2) month pay 34 for each year that they rendered service, whichever is higher, provided that they rendered service for at least six (6) months in a given year. The separation pay to be awarded to members of the Luris group shall be taken from the amount which petitioner has already awarded to them, and any excess need not be refunded by the workers. The ten percent (10%) attorney's fees given by the NLRC and the labor arbiter shall be based on the award modified herein. SO ORDERED. G.R. No. 122122 July 20, 1999

On December 26, 1988, Labor Arbiter Ricardo Olairez rendered a decision holding petitioners liable for illegal dismissal. On appeal, the third division of the NLRC, in its Resolution dated May 31, 1990, set aside the appealed decision and remanded the case to the Arbitration Branch for further proceedings. In the Arbitration Branch, Labor Arbiter Melquiades Sol D. del Rosario, and subsequently, Labor Arbiter Quintin C. Mendoza, received the evidence presented by both parties. On July 28, 1992, Labor Arbiter Mendoza rendered a decision finding petitioners liable for, among others, illegal dismissal. The dispositive portion of the decision reads: WHEREFORE, decision is hereby issued ordering the respondent Philippine Fruits and Vegetable, Industries Corporation and or its President/General Manager Pedro Castillo to pay the aforementioned 190 complainants their full backwages and 13th month pay in the aforestated amounts, aggregating six million one hundred forty two thousand fifty-one pesos and 37/100 centavos, (P6,142,051.37), plus separation pay of one-half month pay for every year of service including 1991, at the option of respondent, if reinstatement is no longer feasible. Likewise, attorney's fee representing ten percent (10%) of the total award is hereby granted, the same to be shared proportionately between complainants former counsel ALAR, COMIA, MANALO and ASSOCIATES LAW OFFICES, c/o Atty. Benjamin Alar, and counsel of record Atty. Alejandro Villamil, the former having established its right and lien over the award. SO ORDERED. 1 On appeal, respondent NLRC affirmed the decision of the Labor Arbiter "with modification that the award of attorneys fees shall be based only on the amounts corresponding to 13th month pay." 2 Petitioners filed a motion for reconsideration which was denied by respondent NLRC in a Resolution dated August 22, 1995. 3 Hence, this petition wherein petitioners raise the following issues:

PHILIPPINE FRUIT & VEGETABLE INDUSTRIES, INC. and its President and General Manager, MR. PEDRO CASTILLO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, and Philippine Fruit and Vegetable Workers Union-Tupas Local Chapter, respondents.

KAPUNAN, J.: In this special civil action for certiorari, petitioners assail the Decision dated May 31, 1995 of public respondent National Labor Relations Commission (NLRC) which upheld with modification the decision of Labor Arbiter Quintin C. Mendoza finding that the members of respondent union were illegally dismissed and granting them, among others, their backwages and separation pay if their reinstatement is no longer feasible; and the Resolution dated August 22, 1995 of the same public respondent, which denied petitioners' motion for reconsideration of the above decision.1wphi1.nt Petitioner Philippine Fruit and Vegetable Industries, Inc. (PFVII, for brevity) is a government-owned and controlled corporation engaged in the manufacture and processing of fruit and vegetable purees for export. Petitioner Pedro Castillo is the former President and General Manager of petitioner PFVII. On September 5, 1988 herein private respondent Philippine Fruit and Vegetable Workers Union-Tupas Local Chapter, for and in behalf of 127 of its members, filed a complaint for unfair labor practice and/or illegal dismissal with damages against petitioner corporation. Private respondent alleged that many of its complaining members started working for San Carlos Fruits Corporation which later incorporated into PFVII in January or February 1983 until their dismissal on different dates in 1985, 1986, 1987 and 1988. They further alleged that the dismissals were due to complainants' involvement in union activities and were without just cause. On September 23, 1988, herein petitioners filed a motion to dismiss. On October 13, 1988, respondent union filed its position paper wherein it added as complainants 33 more of its members, raising the number of complainants to 160. On November 21, 1988, respondent union filed a supplemental position paper alleging that there were actually 194 complainants. Respondent union attached thereto a list of their names and the amounts of their claims.

I THE QUESTIONED DECISION IS NOT SUPPORTED BY EVIDENCE, APPLICABLE LAWS AND JURISPRUDENCE. II PRIVATE RESPONDENTS ARE SEASONAL EMPLOYEES WHOSE EMPLOYMENTS CEASED DURING THE OFF-SEASON DUE TO NO WORK AND NOT DUE TO ILLEGAL DISMISSAL. III THE LABOR ARBITER AND THE NLRC COMMITTED MANIFEST ERROR IN ORDERING PETITIONER TO PAY 194 INDIVIDUALS BACKWAGES, 13TH MONTH PAY AND SEPARATION PAY BENEFITS. 4

Petitioners contend that the NLRC's findings of fact are incorrect and unsubstantiated. They allege that the aforementioned San Carlos Fruits Corporation is separate and distinct from herein petitioner PFVII; hence, it was arbitrary on the part of public respondent to hold petitioners liable to the employees of San Carlos Fruits Corporation. Petitioners further argue that PFVII operates on a seasonal basis and the complainants who are members of respondent union are seasonal workers because they work only during the period that the company is in operation. According to petitioners, its operation starts only in February with the processing of tomatoes into tomato paste and ceases by the end of the same month when the supply is consumed. It then resumes operations at the end of April or early May, depending on the availability of supply with the processing of mangoes into purees and ceases operation in June. 5 The severance of complainants' employment from petitioner corporation was a necessary consequence of the nature of seasonal employment; and since complainants are seasonal workers as defined by the Labor Code, they cannot invoke any tenurial benefit. 6 Petitioners further claim that many of the complainants failed or refused to undergo the medical examination required by petitioners as a prerequisite to employment. They have legal, right, petitioners argue, to prescribe their own rules and regulations; and, their right to require their employees to under a medical examination is clearly legal. Finally, petitioners allege that the Labor Arbiter and respondent NLRC erred in ordering them to pay backwages, 13th month pay and separation pay benefits to the 194 respondents (union members) when only 78 of them were able to testify and substantiate their claims. This is contrary to the agreement of both parties that those who will not be able to testify and substantiate their respective claims for actual damages will be considered to have abandoned their complaints. 7 In fact, according to petitioners, it was by virtue of this agreement that petitioners limited the rebuttal evidence (only to refute whatever may have been adduced by the said 78 union members). 8 The above arguments boil down to the issue of whether or not complaining members of respondent union are regular employees of PFVII or are seasonal workers whose employment ceased during the off-season due to the non-availability of work. Well-settled is the rule that findings of fact of the National Labor Relations Commission, affirming those of the Labor Arbiter are entitled to great weight and will not be disturbed if they are supported by substantial evidence. 9 The questioned decision of the Labor Arbiter reads in part: . . . (T)he employment of most started in January (sic) or February 1983 with the processing of the fruits, i.e. mangoes and calamansi from January to July, tomatoes from January to April, then mangoes up to August and guyabano and others like papayas and pineapples until November or end of the year, and that respondent corporation operates for the whole year. (TNS [sic], of April 11, 1991 hearing, pp. 10-11). . . . Their employments on the other hand are spelled-out in complainants' Annexes "A" to "A-194" and in their individual affidavits and detailed at times for those who were called to testify in their direct testimony; and these positive testimonies are bolstered by their common but separate individual evidence, like the pay slips, apprentice agreements before their appointments, identification cards, saving accounts and pass books . . . . Thus, we cannot give credence to the "Factory Workers Attendance Report" of respondent (Annex "2" marked as Exhibit "B") where it is represented in summary form or indicated that some of the complainants worked for one or

several weeks or months only during some years they claimed to be employed, or did not at all worked (sic) for respondents. This exhibit is visibly (sic) self-serving and not the best evidence to prove the insistence of respondents. Rather, the best evidence should be some kind directly prepared or signed documents in the course of their normal relation indicating with clarity the days, hours and months actually worked and signed by the workers to rebut the positive assertion in their affidavits, testimonies and the messages of the Annexes. . . . 10 On the other hand, the NLRC's findings of fact are as follows: As culled from the records, it appears that herein 194 individual complainants are members of complainant union in respondent company which is engaged in the manufacture and processing of fruit . . . and vegetable purees for export. They were employed as seeders, operators, sorters, slicers, janitors, drivers, truck helpers, mechanics and office personnel. xxx xxx xxx

By the very nature of things in a business enterprise like respondent company's, to our mind, the services of herein complainants are, indeed, more than six (6) months a year. We take note of the undisputed fact that the company did not confine itself just to the processing of tomatoes and mangoes. It also processed guyabano, calamansi, papaya, pineapple, etc. Besides, there is the office administrative functions, cleaning and upkeeping of machines and other duties and tasks to keep up (sic) a big food processing corporation. Considering, therefore, that under of (sic) Article 280 of the Labor Code "the provisions of written agreement to the contrary notwithstanding and considering further that the tasks which complainants performed were usually necessary and desirable in the employer's usual business or trade, we hold that complainants are regular seasonal employees, thus, entitled to security of tenure. 11 The findings of both the Labor Arbiter and the NLRC are supported by substantial evidence. There is, therefore, no circumstance that would warrant a reversal of their decisions. Art. 280 of the Labor Code provides: Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employers, except where the employment has been fixed for a specific project. . . . An employment shall be deemed to be casual if it is not covered by the preceeding paragraph; provided, that, any employee who has rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. Under the above provision, an employment shall be deemed regular where the employee: a) has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; or b) has rendered at least one year of service, whether such service is continuous or broken, with respect to the activity in which he is employed. 12

In the case at bar, the work of complainants as seeders, operators, sorters, slicers, janitors, drivers, truck helpers, mechanics and office personnel is without doubt necessary in the usual business of a food processing company like petitioner PFVII. It should be noted that complainants' employment has not been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of their appointment or hiring. 13 Neither is their employment seasonal in nature. While it may be true that some phases of petitioner company's processing operations is dependent on the supply of fruits for a particular season, the other equally important aspects of its business, such as manufacturing and marketing are not seasonal. The fact is that large-scale food processing companies such as petitioner company continue to operate and do business throughout the year even if the availability of fruits and vegetables is seasonal. Having determined that private respondents are regular employees under the first paragraph, we need not dwell on the question of whether or not they had rendered one year of service. This Court has clearly stated in Mercado, Sr. vs. NLRC, 14 that: The second paragraph of Article 280 demarcates as "casual" employees, all other employees who do not fall under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken.1wphi1.nt . . . Hence, the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280. As correctly noted by the Office of the Solicitor General; private respondents in this case are deemed regular employees by virtue of the fact that they performed functions which are necessary and desirable in the usual business of PFVII as provided under the first paragraph of Art. 280 of the Labor Code. Finally, on the issue of whether or not the NLRC committed manifest error in ordering petitioners to pay backwages, 13th month pay and separation pay benefits to 194 members of respondent union, we have to rule in the affirmative. A careful examination of the records shows that only 80 of the 194 union members presented evidence to support and prove their claims in the form of affidavits and/or testimonies, pay slips, passbooks, identification cards and other relevant documents. The other 114 members did not present any kind of evidence whatsoever. It is a basic rule in evidence that each party must prove his affirmative allegation the plaintiff or complainant has to prove his affirmative allegations in the complaints and the defendant or respondent has to prove the affirmative allegations in his affirmative defenses and counterclaims. 15 Hence, as correctly noted by the Solicitor General, the Labor Arbiter erred in appreciating the evidence presented by the complaining union members in favor of the other 114 because the evidence is personal to each of them. Whatever testimony or other proof of employment submitted by any of them proves only the status of his own employment and not that of any other complainant. Thus, only those members of respondent union who were able to prove their claims are entitled to awards of backwages, 13th month pay and separation pay. They are as follows: 1. Antonio Cayabyab

2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

Ricardo Malicdem Raymundo De Guzman Virgilio M. Sison Marilou R. Sabangan Antonio Calixto Marietta A. Sabangan Divina S. Mandapat Silverio G. Tamondong Pepito P. Bulatao Orlando Salangad Servillano Reyes Corazon Leocadio Myrna R. Vistro Nicanor R. Turingan Gerondio M. Magat Jose Sabangan, Jr. Francisca Bautista Loreta Pidlaoan Francisco Cuison Ramil de Guzman Roberto Lomibao Rolando Aquino Adoracion de Guzman

25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48.

Violeta Antonio 49. Elena N. Diaz 50. Priscilla Vinoya 51. Julita Macaraeg 52. Fe Vilma S. Mandapat 53. Fidel B. Tamondong 54. Julita V. Gamboa 55. Leonora Castro 56. Roberto C. Angeles 57. Corazon Munoz 58. Brigida de Guzman 59. Isabelita S. Mandapat 60. Emma Macam 61. Reynaldo C. de Guzman 62. Jimmy D. Montilla 63. Romeo Macam 64. Eligida D. Montilla 65. Rodolfo Rosario 66. Alex Bautista 67. Remegio Alcantara 68. Domingo Bautista 69. Romulo G. Gural 70. Romulo Bautista 71. Lolita A. Malicdem Cecilia Bautista Marino Cayabyab Melanda Albarida Bienvenido Resuello Adelaida Ramirez Francisco Bautista Alfonso Manzon Lydia Clemente Lourdes Arenas Natividad P. Velasquez Dionisio Gutie Rodolfo Soriano Jose S. Untalan Manuel Velasco Narcisa M. Malicdem Rebecca C. Fernandez Betty Grace V. Lolarga Helen A. Diaz Eugenio A. Macaraeg Felicidad A. Rosario Juliana M. Saplan Eleno Bulatao Jose D. Diaz

72. 73. 74. 75. 76. 77. 78. 79. 80.

Herminia Arizabal Gaudencio Castro Elizabeth Valdez Douglas Dalisay Teresita Velasco Jaime T. Aquino Virginia Cayabyab Romeo Macam Romeo D. de Vera 16

Arbiter Ernesto F. Carreon rendered a decision finding private respondent guilty of illegal dismissal and ordering it to pay its thirty-six (36) employees P446,940.00 as separation pay. The employees, including the petitioners herein, appealed from the said decision. The NLRC, in NLRC Case No. V000399-98, affirmed the decision of Labor Arbiter Carreon in its Decision dated January 12, 1999, with the modification that private respondent pay backwages computed from the respective dates of dismissal until finality of the decision. Private respondent, unsatisfied with the modification made by the NLRC, filed a motion for reconsideration with the contention that, since it has been found by the Labor Arbiter and affirmed in the assailed decision that the employees were project employees, the computation of backwages should be limited to the date of the completion of the project and not to the finality of the decision. The NLRC, however, denied the motion ruling that private respondent failed to establish the date of the completion of the project. Aggrieved, private respondent filed a Petition for Certiorari with the CA, docketed as CA-G.R. SP No. UDK 3092 assailing the January 12, 1999 decision of the NLRC and the denial of its motion for reconsideration which was dismissed for non-payment of docket fees and insufficiency of form. It filed a motion for reconsideration, but the latter was also denied. Thus, private respondent filed with this Court, docketed as G.R. No. 144433 a Petition for Review on Certiorari. In a Resolution dated September 20, 2000, this Court denied the petition for having been filed out of time and for nonpayment of docket and other lawful fees. The employees, including the petitioners, upon the finality of this Court's resolution, filed a Motion for Execution before the Labor Arbiter of the January 12, 1999 decision. Thereafter, the Labor Arbiter ordered for the issuance of a writ of execution directing the computation of the awards. Afterwards, private respondent filed an appeal from the said Order with an urgent prayer for the issuance of a temporary restraining order and/or preliminary injunction with public respondent NLRC. The said appeal was denied. The NLRC held that the appeal was premature, there having been no computation yet made by the Labor Arbiter as to the exact amount to be paid to the employees. Public respondent remanded the case to the arbitration branch for appropriate action. Labor Arbiter Carreon inhibited himself from further proceedings in the case upon motion of private respondent. In the meantime, fifteen (15) employees have executed Affidavits of Full Settlement after having settled amicably with the private respondent. Labor Arbiter Violeta Ortiz-Bantug issued an Order dated July 31, 2003 for the issuance of a writ of execution only for the payment of the claims of the twenty-one (21) remaining employees in the total amount of P4,383,225.00, which included attorney's fees equivalent to ten (10%) percent of the sum received as settlement by the fifteen (15) employees who had earlier settled with the private respondent. Private respondent appealed to public respondent NLRC contending that the computation for backwages must be only until the completion of the project and not until the finality of the decision. Public respondent, in its Decision dated June 25, 2004, affirmed the Order of Labor Arbiter Bantug, but reduced the total amount to P4,073,858.00, inclusive of attorney's fees. Thereafter, private respondent filed a motion for reconsideration of the June 25, 2004 decision which was denied by the public respondent, but not before the admittance of the affidavits of withdrawal, release/waiver and quitclaim executed by another group of fourteen (14) employees, leaving unresolved only the

ACCORDINGLY, the questioned decision of the NLRC is hereby AFFIRMED insofar as the 80 union members who were able to prove their respective claims are concerned, but REVERSED with respect to the other 114 union members, who did not adduce evidence in support of their claims. SO ORDERED. G.R. No. 174792 March 7, 2012

WILFREDO ARO, RONILO TIROL, JOSE PACALDO, PRIMITIVO CASQUEJO and MARCIAL ABGO, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, Fourth Division and Benthel Development Corporation, Respondents. DECISION PERALTA, J.: For resolution of this Court is the Petition for Review on Certiorari under Rule 45 of the Rules of Court, dated October 7, 2006, of petitioners Wilfredo Aro, Ronilo Tirol, Jose Pacaldo, Primitivo Casquejo and Marcial Abgo, seeking to reverse and set aside the Decision1 dated March 7, 2006, and Resolution2 dated July 27, 2006, of the Court of Appeals (CA) in CA-G.R. CEB-SP No. 01012 which reversed the Decision and Resolution dated June 25, 2004 and June 30, 2005, respectively, of the National Labor Relations Commission (NLRC). The facts, as culled from the records, are the following: Several employees of private respondent Benthel Development Corporation, including the petitioners, filed a Complaint for illegal dismissal with various money claims and prayer for damages against the latter, in the NLRC Arbitration Branch No. VII in Cebu City and docketed as RAB Case No. 07-09-1222-97/12-1609-97. Thereafter, Labor

claims of the petitioners herein. Thus, in the resolution of the private respondent's motion for reconsideration, the award was reduced to the sum of P1,374,339.00, inclusive of attorney's fees. As a recourse, private respondent filed a petition for certiorari with the CA, alleging that public respondent committed grave abuse of discretion in promulgating its assailed decision and denying its motion for reconsideration. The CA granted the petition, therefore, annulling and setting aside the decision and resolution of the NLRC as to the award for backwages and remanded the case to the same public respondent for the proper computation of the backwages due to each of the petitioners herein. The dispositive portion of the decision reads: WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us GRANTING the petition filed in this case. The assailed Decision and Resolution dated June 04, 2004 (sic) and June 30, 2005, respectively, issued by the public respondent in NLRC Case No. V-000586-2003 are hereby ANNULLED and SET ASIDE as to the award for backwages granted to the seven private respondents named in the petition at bench. The case is hereby remanded to the public respondent for the proper computation of the backwages due to each of the said seven private respondents, computed until March 18, 1997. SO ORDERED.3 Hence, the present petition. Petitioners assigned the following errors: GROUND/ASSIGNMENT OF ERRORS THE RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT OVERTURNED ITS OWN DECISION AND THAT OF THE SUPREME COURT. THE RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION IN DECLARING THAT PETITIONERS ARE PROJECT EMPLOYEES, CONSIDERING THAT THE NLRC 4TH DIVISION HAD LONG RULED THAT SAID EMPLOYEES ARE IN FACT REGULAR EMPLOYEES AND WHICH RULING WAS LONG CONFIRMED AND AFFIRMED NOT ONLY BY THE COURT OF APPEALS BUT BY THE SUPREME COURT ITSELF. THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION WHEN IT REFUSED TO RULE ON THE INVALIDITY OF THE RELEASE AND QUITCLAIMS EXECUTED BY SOME OF THE EMPLOYEES WITHOUT THE ASSISTANCE OF COUNSEL.4 In its Comment5 dated January 24, 2007, private respondent stated the following counter-arguments: 1. The issues presented in CA-G.R. SP No. UDK 3092 and SC G.R. No. 144433 are not the same issues recently raised in the Petition for Certiorari before the Court of Appeals. 2. There is no final and executory ruling that herein petitioners were regular employees and not just project employees.6 First of all, this Court has to address the nature of the petition filed by petitioners. As pointed out by private respondent, and not disputed by petitioners, the present petition was filed out of time. Petitioners received, on

August 4, 2006, a copy of the CA Resolution dated July 27, 2006. The period within which to file a petition for review under Rule 45 is within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or from the denial of the petitioners' motion for new trial or reconsideration filed in due time after notice of the judgment, or in this case, not later than August 19, 2006. Under Rule 65, a petition for certiorari may be filed not later than sixty (60) days from notice of the judgment, order or resolution, or in this case, not later than October 3, 2006. However, the present petition is dated October 7, 2006 and as it appears on the records, this Court received the said petition on October 17, 2006. Thus, on its face and in reality, the present petition was filed out of time, whether it be under Rule 45 or Rule 65 of the Rules of Court. Nevertheless, this Court did not dismiss the present petition and required private respondent to file its Comment. Consequently, a Reply from petitioners and eventually, both parties' respective memorandum were filed. In view of that premise and in the interest of justice, this Court shall forego the technicalities and is constrained to resolve the present petition as a petition for certiorari under Rule 65, since the main issue raised by petitioners is whether or not the CA committed grave abuse of discretion which amounted to lack or excess of its jurisdiction. Petitioners argue that the CA should have dismissed private respondent's petition, since there was already a finality of the judgment of the NLRC. It is not disputed that on January 31, 2000, the CA, through its 17th Division, issued a Resolution dismissing private respondent's petition for certiorari (docketed as CA-G.R. SP No. UDK 3092. Subsequently, the same private respondent filed a motion for reconsideration, which was denied by the CA in its Resolution dated June 8, 2000. Not contented, private respondent filed a petition with this Court, which the latter denied, through its Second Division (G.R. No. 144433), in its Resolution dated September 20, 2000. Still aggrieved, private respondent filed a second motion for reconsideration, which was dismissed by this Court. Thus, according to petitioners, there was already a finality of judgment. On the other hand, private respondent insists that the inequitable, nay illegal, in a decision cannot lapse into finality, referring to the computation of the backwages which is not commensurate to the factual findings of the Labor Arbiter and the NLRC. Basically, according to private respondent, the CA merely sought to correct the NLRC's and the Labor Arbiter's one-sided and blind adherence to and/or misguided application of strict technical rules, and their overzealous partiality in favor of labor. Private respondent further claims that the issues presented in their earlier petitions with the CA and this Court (CA-G.R. SP No. UDK 3092 and SC G.R. No. 144433, respectively) are not the same issues raised in the petition for certiorari later filed with the CA and the decision of which is now the subject of herein petition. Private respondent clarifies that there is no final and executory ruling that petitioners were regular and not just project employees, hence, there was a need to file a petition with the CA. The issue as to whether petitioners were project employees or regular employees is factual in nature. It is wellsettled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.7 Section 5, Rule 133 of the Rules of Court, defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion." Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases.8 We [this Court] may take cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the CA.9 In the present case, the NLRC and the CA have opposing views. According to the CA, petitioners are project employees as found by Labor Arbiter Ernesto Carreon in his Decision dated May 28, 1998, because they were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu, which was later on affirmed by the NLRC in its January 12, 1999 decision. The only discrepancy is the Order of the NLRC that petitioners are entitled to backwages up to the finality of its decision, when as project employees,

private respondents are only entitled to payment of backwages until the date of the completion of the project. In a later resolution on private respondent's motion for reconsideration of its January 12, 1999 decision, the NLRC changed its findings by ruling that petitioners herein were regular employees and, therefore, entitled to full backwages, until finality of the decision, citing that petitioners repeated rehiring over a long span of time made them regular employees. Article 280 of the Labor Code distinguishes a "project employee" from a "regular employee," thus: Article 280. Regular and Casual Employment The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. In Hanjin Heavy Industries and Construction Co. Ltd. v. Ibaez,10 this Court extensively discussed the above distinction, thus: x x x [T]he principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees" is whether or not the project employees were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that project.11 In a number of cases,12 the Court has held that the length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment , are properly treated as project employees and their services may be lawfully terminated upon the completion of a project.13 Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. In Abesco Construction and Development Corporation v. Ramirez,14 which also involved a construction company and its workers, this Court considered it crucial that the employees were informed of their status as project employees: The principal test for determining whether employees are "project employees" or "regular employees" is whether they are assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time they are engaged for that project. Such duration, as well as the particular work/service to be performed, is defined in an employment agreement and is made clear to the employees at the time of hiring.

In this case, petitioners did not have that kind of agreement with respondents. Neither did they inform respondents of the nature of the latters work at the time of hiring. Hence, for failure of petitioners to substantiate their claim that respondents were project employees, we are constrained to declare them as regular employees. In Caramol v. National Labor Relations Commission,15 and later reiterated in Salinas, Jr. v. National Labor Relations Commission,16 the Court markedly stressed the importance of the employees' knowing consent to being engaged as project employees when it clarified that "there is no question that stipulation on employment contract providing for a fixed period of employment such as "project-to-project" contract is valid provided the period was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent x x x." Applying the above disquisition, this Court agrees with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners' employment was to carry out a specific project. Hence, the CA did not commit grave abuse of discretion when it affirmed the findings of the Labor Arbiter. The CA correctly ruled: A review of the facts and the evidence in this case readily shows that a finding had been made by Labor Arbiter Ernesto Carreon, in his decision dated May 28, 1998, that complainants, including private respondents, are project employees. They were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. We note that no appeal had been made by the complainants, including herein private respondents, from the said finding. Thus, that private respondents are project employees has already been effectively established. Likewise, a review of the public respondent's January 12, 1999 decision shows that it affirmed the labor arbiter's finding of the private respondents' being project employees. We therefore cannot fathom how the public respondent could have ordered backwages up to the finality of its decision when, as project employees, private respondents are only entitled to payment of the same until the date of the completion of the project. It is settled that, without a valid cause, the employment of project employees cannot be terminated prior to expiration. Otherwise, they shall be entitled to reinstatement with full backwages. However, if the project or work is completed during the pendency of the ensuing suit for illegal dismissal, the employees shall be entitled only to full backwages from the date of the termination of their employment until the actual completion of the work. While it may be true that in the proceedings below the date of completion of the project for which the private respondents were hired had not been clearly established, it constitutes grave abuse of discretion on the part of the public respondent for not determining for itself the date of said completion instead of merely ordering payment of backwages until finality of its decision. xxxx The decision of the labor arbiter, as affirmed by the public respondent in its January 12, 1999 decision, clearly established that private respondents were project employees. Because there was no showing then that the project for which their services were engaged had already been completed, the public respondent likewise found that private respondents were illegally dismissed and thus entitled to backwages.

However, in utter disregard of the law and prevailing jurisprudence, the public respondents capriciously and arbitrarily ordered that the said backwages be computed until the finality of its decision instead of only until the date of the project completion. In grave abuse of its discretion, the public respondent refused to consider the evidence presented before it as to the date of completion of the Cordova Reef Village Resort project. The records show that affidavits have been executed by the petitioner's manager, corporate architect and project engineer as to the fact of the completion of the project in October 1996. As these evidences [sic] were already a matter of record, the public respondent should not have closed its eyes and should have endeavored to render a correct and just judgment. xxxx Furthermore, as earlier noted, private respondents did not appeal from the Labor Arbiter's findings that they were indubitably project employees. However, they were entitled to the payment of separation pay only for the reason that the date of the completion of the project for which they were hired had not been clearly established. Thus, in affirming the labor arbiter's decision, the public respondent in effect sustained the finding that private respondents are project employees. The statement, therefore, contained in the resolution of the petitioner's motion for reconsideration of its January 12, 1999 decision that repeated rehiring makes the worker a regular employee, is at best an obiter, especially considering that such conclusion had not been shown to apply to the circumstances then obtaining with the private respondents' employment with the petitioner.17 Therefore, being project employees, petitioners are only entitled to full backwages, computed from the date of the termination of their employment until the actual completion of the work. Illegally dismissed workers are entitled to the payment of their salaries corresponding to the unexpired portion of their employment where the employment is for a definite period.18 In this case, as found by the CA, the Cordova Reef Village Resort project had been completed in October 1996 and private respondent herein had signified its willingness, by way of concession to petitioners, to set the date of completion of the project as March 18, 1997; hence, the latter date should be considered as the date of completion of the project for purposes of computing the full backwages of petitioners.1wphi1 As to the issue that the CA committed grave abuse of discretion in refusing to rule on the invalidity of the release and quitclaims executed by some of the employees other than the petitioners, such is inconsequential as those employees are not parties in the present case. WHEREFORE, the Petition for Review dated October 7, 2006, of petitioners Wilfredo Aro, Ronilo Tirol, Jose Pacaldo, Primitivo Casquejo and Marcial Abgo is hereby DENIED. Consequently, the Decision dated March 7, 2006 and Resolution dated July 27, 2006 of the Court of Appeals are hereby AFFIRMED in toto. SO ORDERED. G.R. No. 192514 April 18, 2012

BRION, J.: We resolve the present appeal1 from the decision2 dated February 26, 2010 and the resolution3 dated June 3, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 100099. The Antecedents On December 17, 1968, petitioner D.M. Consunji, Inc. (DMCI), a construction company, hired respondent Estelito L. Jamin as a laborer. Sometime in 1975, Jamin became a helper carpenter. Since his initial hiring, Jamins employment contract had been renewed a number of times.4 On March 20, 1999, his work at DMCI was terminated due to the completion of the SM Manila project. This termination marked the end of his employment with DMCI as he was not rehired again. On April 5, 1999, Jamin filed a complaint5 for illegal dismissal, with several money claims (including attorneys fees), against DMCI and its President/General Manager, David M. Consunji. Jamin alleged that DMCI terminated his employment without a just and authorized cause at a time when he was already 55 years old and had no independent source of livelihood. He claimed that he rendered service to DMCI continuously for almost 31 years. In addition to the schedule of projects (where he was assigned) submitted by DMCI to the labor arbiter,6 he alleged that he worked for three other DMCI projects: Twin Towers, Ritz Towers, from July 29, 1980 to June 12, 1982; New Istana Project, B.S.B. Brunei, from June 23, 1982 to February 16, 1984; and New Istana Project, B.S.B. Brunei, from January 24, 1986 to May 25, 1986. DMCI denied liability. It argued that it hired Jamin on a project-to-project basis, from the start of his engagement in 1968 until the completion of its SM Manila project on March 20, 1999 where Jamin last worked. With the completion of the project, it terminated Jamins employment. It alleged that it submitted a report to the Department of Labor and Employment (DOLE) everytime it terminated Jamins services. The Compulsory Arbitration Rulings In a decision dated May 27, 2002,7 Labor Arbiter Francisco A. Robles dismissed the complaint for lack of merit. He sustained DMCIs position that Jamin was a project employee whose services had been terminated due to the completion of the project where he was assigned. The labor arbiter added that everytime DMCI rehired Jamin, it entered into a contract of employment with him. Moreover, upon completion of the phase of the project for which Jamin was hired or upon completion of the project itself, the company served a notice of termination to him and a termination report to the DOLE Regional Office. The labor arbiter also noted that Jamin had to file an application if he wanted to be re-hired. On appeal by Jamin, the National Labor Relations Commission (NLRC), in its decision of April 18, 2007,8 dismissed the appeal and affirmed the labor arbiters finding that Jamin was a project employee. Jamin moved for reconsideration, but the NLRC denied the motion in a resolution dated May 30, 2007.9 Jamin sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of Court. The CA Decision On February 26, 2010, the CA Special Fourth Division rendered the disputed decision10 reversing the compulsory arbitration rulings. It held that Jamin was a regular employee. It based its conclusion on: (1) Jamins repeated and successive rehiring in DMCIs various projects; and (2) the nature of his work in the projects he was performing

D.M. CONSUNJI, INC. and/or DAVID M. CONSUNJI, Petitioners, vs. ESTELITO L. JAMIN, Respondent. DECISION

activities necessary or desirable in DMCIs construction business. Invoking the Courts ruling in an earlier case,11 the CA declared that the pattern of Jamins rehiring and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to DMCIs business or trade, a key indicator of regular employment. It opined that although Jamin started as a project employee, the circumstances of his employment made it regular or, at the very least, has ripened into a regular employment. The CA considered the project employment contracts Jamin entered into with DMCI for almost 31 years not definitive of his actual status in the company. It stressed that the existence of such contracts is not always conclusive of a workers employment status as this Court explained in Liganza v. RBL Shipyard Corporation, et al.12 It found added support from Integrated Contractor and Plumbing Works, Inc. v. NLRC,13 where the Court said that while there were several employment contracts between the worker and the employer, in all of them, the worker performed tasks which were usually necessary or desirable in the usual business or trade of the employer and, a review of the workers assignments showed that he belonged to a work pool, making his employment regular. Contrary to DMCIs submission and the labor arbiters findings, the CA noted that DMCI failed to submit a report to the DOLE Regional Office everytime Jamins employment was terminated, as required by DOLE Policy Instructions No. 20. The CA opined that DMCIs failure to submit the reports to the DOLE is an indication that Jamin was not a project employee. It further noted that DOLE Department Order No. 19, Series of 1993, which superseded DOLE Policy Instructions No. 20, provides that the termination report is one of the indicators of project employment.14 Having found Jamin to be a regular employee, the CA declared his dismissal illegal as it was without a valid cause and without due process. It found that DMCI failed to provide Jamin the required notice before he was dismissed. Accordingly, the CA ordered Jamins immediate reinstatement with backwages, and without loss of seniority rights and other benefits. DMCI moved for reconsideration, but the CA denied the motion in its resolution of June 3, 2010.15 DMCI is now before the Court through a petition for review on certiorari under Rule 45 of the Rules of Court.16 The Petition DMCI seeks a reversal of the CA rulings on the ground that the appellate court committed a grave error in annulling the decisions of the labor arbiter and the NLRC. It presents the following arguments: 1. The CA misapplied the phrase "usually necessary or desirable in the usual business or trade of the employer" when it considered Jamin a regular employee. The definition of a regular employee under Article 280 of the Labor Code does not apply to project employment or "employment which has been fixed for a specific project," as interpreted by the Supreme Court in Fernandez v. National Labor Relations Commission17 and D.M. Consunji, Inc. v. NLRC.18 It maintains the same project employment methodology in its business operations and it cannot understand why a different ruling or treatment would be handed down in the present case. 2. There is no work pool in DMCIs roster of project employees. The CA erred in insinuating that Jamin belonged to a work pool when it cited Integrated Contractor and Plumbing Works, Inc. ruling.19 At any rate, Jamin presented no evidence to prove his membership in any work pool at DMCI. 3. The CA misinterpreted the rules requiring the submission of termination of employment reports to the DOLE. While the report is an indicator of project employment, as noted by the CA, it is only one of several indicators under the rules.20 In any event, the CA penalized DMCI for a few lapses in its submission of reports to the DOLE with a

"very rigid application of the rule despite the almost unanimous proofs surrounding the circumstances of private respondent being a project employee as shown by petitioners documentary evidence."21 4. The CA erred in holding that Jamin was dismissed without due process for its failure to serve him notice prior to the termination of his employment. As Jamin was not dismissed for cause, there was no need to furnish him a written notice of the grounds for the dismissal and neither is there a need for a hearing. When there is no more job for Jamin because of the completion of the project, DMCI, under the law, has the right to terminate his employment without incurring any liability. Pursuant to the rules implementing the Labor Code,22 if the termination is brought about by the completion of the contract or phase thereof, no prior notice is required. Finally, DMCI objects to the CAs reversal of the findings of the labor arbiter and the NLRC in the absence of a showing that the labor authorities committed a grave abuse of discretion or that evidence had been disregarded or that their rulings had been arrived at arbitrarily. The Case for Jamin In his Comment (to the Petition),23 Jamin prays that the petition be denied for having been filed out of time and for lack of merit. He claims, in support of his plea for the petitions outright dismissal, that DMCI received a copy of the CA decision (dated February 26, 2010) on March 4, 2010, as stated by DMCI itself in its motion for reconsideration of the decision.24 Since DMCI filed the motion with the CA on March 22, 2010, it is obvious, Jamin stresses, that the motion was filed three days beyond the 15-day reglementary period, the last day of which fell on March 19, 2010. He maintains that for this reason, the CAs February 26, 2010 decision had become final and executory, as he argued before the CA in his Comment and Opposition (to DMCIs Motion for Reconsideration).25 On the merits of the case, Jamin submits that the CA committed no error in nullifying the rulings of the labor arbiter and the NLRC. He contends that DMCI misread this Courts rulings in Fernandez v. National Labor Relations Commission, et al.26 and D.M. Consunji, Inc. v. NLRC,27 cited to support its position that Jamin was a project employee. Jamin argues that in Fernandez, the Court explained that the proviso in the second paragraph of Article 280 of the Labor Code relates only to casual employees who shall be considered regular employees if they have rendered at least one year of service, whether such service is continuous or broken. He further argues that in Fernandez, the Court held that inasmuch as the documentary evidence clearly showed gaps of a month or months between the hiring of Ricardo Fernandez in the numerous projects where he was assigned, it was the Courts conclusion that Fernandez had not continuously worked for the company but only intermittently as he was hired solely for specific projects.28 Also, in Fernandez, the Court affirmed its rulings in earlier cases that "the failure of the employer to report to the [nearest] employment office the termination of workers everytime a project is completed proves that the employees are not project employees."29 Jamin further explains that in the D.M. Consunji, Inc. case, the company deliberately omitted portions of the Courts ruling stating that the complainants were not claiming that they were regular employees; rather, they were questioning the termination of their employment before the completion of the project at the Cebu Super Block, without just cause and due process.30

In the matter of termination reports to the DOLE, Jamin disputes DMCIs submission that it committed only few lapses in the reportorial requirement. He maintains that even the NLRC noted that there were no termination reports with the DOLE Regional Office after every completion of a phase of work, although the NLRC considered that the report is required only for statistical purposes. He, therefore, contends that the CA committed no error in holding that DMCIs failure to submit reports to the DOLE was an indication that he was not a project employee. Finally, Jamin argues that as a regular employee of DMCI for almost 31 years, the termination of his employment was without just cause and due process. The Courts Ruling The procedural issue Was DMCIs appeal filed out of time, as Jamin claims, and should have been dismissed outright? The records support Jamins submission on the issue. DMCI received its copy of the February 26, 2010 CA decision on March 4, 2010 (a Thursday), as indicated in its motion for reconsideration of the decision itself,31 not on March 5, 2010 (a Friday), as stated in the present petition.32 The deadline for the filing of the motion for reconsideration was on March 19, 2010 (15 days from receipt of copy of the decision), but it was filed only on March 22, 2010 or three days late. Clearly, the motion for reconsideration was filed out of time, thereby rendering the CA decision final and executory. Necessarily, DMCIs petition for review on certiorari is also late as it had only fifteen (15) days from notice of the CA decision to file the petition or the denial of its motion for reconsideration filed in due time.33 The reckoning date is March 4, 2010, since DMCIs motion for reconsideration was not filed in due time. We see no point in exercising liberality and disregarding the late filing as we did in Orozco v. Fifth Division of the Court of Appeals,34 where we ruled that "[t]echnicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties." The petition lacks merit for its failure to show that the CA committed any reversible error or grave abuse of discretion when it reversed the findings of the labor arbiter and the NLRC. As earlier mentioned, Jamin worked for DMCI for almost 31 years, initially as a laborer and, for the most part, as a carpenter. Through all those years, DMCI treated him as a project employee, so that he never obtained tenure. On the surface and at first glance, DMCI appears to be correct. Jamin entered into a contract of employment (actually an appointment paper to which he signified his conformity) with DMCI either as a field worker, a temporary worker, a casual employee, or a project employee everytime DMCI needed his services and a termination of employment paper was served on him upon completion of every project or phase of the project where he worked.35 DMCI would then submit termination of employment reports to the DOLE, containing the names of a number of employees including Jamin.36 The NLRC and the CA would later on say, however, that DMCI failed to submit termination reports to the DOLE. The CA pierced the cover of Jamins project employment contract and declared him a regular employee who had been dismissed without cause and without notice. To reiterate, the CAs findings were based on: (1) Jamins repeated and successive engagements in DMCIs construction projects, and (2) Jamins performance of activities necessary or desirable in DMCIs usual trade or business. We agree with the CA. In Liganza v. RBL Shipyard Corporation,37 the Court held that "[a]ssuming, without granting[,] that [the] petitioner was initially hired for specific projects or undertakings, the repeated re-hiring and

continuing need for his services for over eight (8) years have undeniably made him a regular employee." We find the Liganza ruling squarely applicable to this case, considering that for almost 31 years, DMCI had repeatedly, continuously and successively engaged Jamins services since he was hired on December 17, 1968 or for a total of 38 times 35 as shown by the schedule of projects submitted by DMCI to the labor arbiter38 and three more projects or engagements added by Jamin, which he claimed DMCI intentionally did not include in its schedule so as to make it appear that there were wide gaps in his engagements. One of the three projects was local, the Ritz Towers,39 from July 29, 1980 to June 12, 1982, while the other two were overseas the New Istana Project in Brunei, Darussalam, from June 23, 1982 to February 16, 1984;40 and again, the New Istana Project, from January 24, 1986 to May 25, 1986.41 We reviewed Jamins employment contracts as the CA did and we noted that while the contracts indeed show that Jamin had been engaged as a project employee, there was an almost unbroken string of Jamins rehiring from December 17, 1968 up to the termination of his employment on March 20, 1999. While the history of Jamins employment (schedule of projects)42 relied upon by DMCI shows a gap of almost four years in his employment for the period between July 28, 1980 (the supposed completion date of the Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV project), the gap was caused by the companys omission of the three projects above mentioned. For not disclosing that there had been other projects where DMCI engaged his services, Jamin accuses the company of suppressing vital evidence that supports his contention that he rendered service in the companys construction projects continuously and repeatedly for more than three decades. The non-disclosure might not have constituted suppression of evidence it could just have been overlooked by the company but the oversight is unfair to Jamin as the non-inclusion of the three projects gives the impression that there were substantial gaps not only of several months but years in his employment with DMCI. Thus, as Jamin explains, the Ritz Tower Project (July 29, 1980 to June 12, 1982) and the New Istana Project (June 23, 1982 to February 16, 1984) would explain the gap between the Midtown Plaza project (September 3, 1979 to July 28, 1980) and the IRRI Dorm IV project (June 13, 1984 to March 12, 1985) and the other New Istana Project (January 24, 1986 to May 25, 1986) would explain the gap between P. 516 Hanger (September 13, 1985 to January 23, 1986) and P. 516 Maint (May 26, 1986 to November 18, 1987). To reiterate, Jamins employment history with DMCI stands out for his continuous, repeated and successive rehiring in the companys construction projects. In all the 38 projects where DMCI engaged Jamins services, the tasks he performed as a carpenter were indisputably necessary and desirable in DMCIs construction business. He might not have been a member of a work pool as DMCI insisted that it does not maintain a work pool, but his continuous rehiring and the nature of his work unmistakably made him a regular employee. In Maraguinot, Jr. v. NLRC,43 the Court held that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. Further, as we stressed in Liganza,44 "[r]espondent capitalizes on our ruling in D.M. Consunji, Inc. v. NLRC which reiterates the rule that the length of service of a project employee is not the controlling test of employment tenure but whether or not 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."

"Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, [private] respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioners business."45 Without doubt, Jamins case fits squarely into the employment situation just quoted. The termination reports With our ruling that Jamin had been a regular employee, the issue of whether DMCI submitted termination of employment reports, pursuant to Policy Instructions No. 20 (Undated46), as superseded by DOLE Department Order No. 19 (series of 1993), has become academic. DOLE Policy Instructions No. 20 provides in part: Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain a clearance from the Secretary of Labor in connection with such termination. What is required of the company is a report to the nearest Public Employment Office for statistical purposes.47 To set the records straight, DMCI indeed submitted reports to the DOLE but as pointed out by Jamin, the submissions started only in 1992.48 DMCI explained that it submitted the earlier reports (1982), but it lost and never recovered the reports. It reconstituted the lost reports and submitted them to the DOLE in October 1992; thus, the dates appearing in the reports.49 Is David M. Consunji, DMCIs President/General Manager, liable for Jamins dismissal? While there is no question that the company is liable for Jamins dismissal, we note that the CA made no pronouncement on whether DMCIs President/General Manager, a co-petitioner with the company, is also liable.50 Neither had the parties brought the matter up to the CA nor with this Court. As there is no express finding of Mr. Consunjis involvement in Jamins dismissal, we deem it proper to absolve him of liability in this case. As a final point, it is well to reiterate a cautionary statement we made in Maraguinot,51 thus: At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re-hire a project employee even after completion of the project for which he was hired. The import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. What this decision merely accomplishes is a judicial recognition of the employment status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool employees who perform tasks necessary or desirable to the employers usual business or trade. In sum, we deny the present appeal for having been filed late and for lack of any reversible error.1wphi1 We see no point in extending any liberality by disregarding the late filing as the petition lacks merit.

WHEREFORE, premises considered, the petition is hereby DENIED for late filing and for lack of merit. The decision dated February 26, 2010 and the resolution dated June 3, 2010 of the Court of Appeals are AFFIRMED. Petitioner David M. Consunji is absolved of liability in this case. SO ORDERED. G.R. No. 184362 November 15, 2010

MILLENNIUM ERECTORS CORPORATION, Petitioner, vs. VIRGILIO MAGALLANES, Respondent. DECISION CARPIO MORALES, J.: Respondent Virgilio Magallanes started working in 1988 as a utility man for Laurencito Tiu (Tiu), Chief Executive Officer of Millennium Erectors Corporation (petitioner), Tius family, and Kenneth Construction Corporation. He was assigned to different construction projects undertaken by petitioner in Metro Manila, the last of which was for a building in Libis, Quezon City. In July of 2004 he was told not to report for work anymore allegedly due to old age, prompting him to file on August 6, 2004 an illegal dismissal complaint1 before the Labor Arbiter. In its Position Paper,2 petitioner claimed that respondent was a project employee whom it hired for a building project in Libis on January 30, 2003, to prove which it submitted the employment contract3 signed by him; that on August 3, 2004, respondents services were terminated as the project was nearing completion; and he was given financial assistance4 in the amount of P2,000, for which he signed a quitclaim and waiver.5 Petitioner likewise submitted a termination report to the Department of Labor and Employment (DOLE) dated August 17, 2004. Rebutting respondents claim that he was employed since 1988, petitioner contended that it was incorporated only in February 2000, and Kenneth Construction Corporation which was established in 1989 and dissolved in 2000, was a separate and distinct entity. By Decision6 of November 25, 2005, the Labor Arbiter ruled in favor of petitioner and dismissed the complaint, holding that respondent knew of the nature of his employment as a project employee, he having executed an employment contract specifying therein the name of and duration of the project from January 2003 until its completion; and that the services of respondent were terminated due to the completion of the project as shown by the termination report submitted to the DOLE. The Labor Arbiter noted that respondent admitted having been assigned to several building projects and that he failed to give pertinent details of his dismissal such as who terminated him, when he was terminated, and what were the "overt" acts leading to his dismissal. On appeal, the National Labor Relations Commission (NLRC) set aside the Labor Arbiters Decision7 of February 6, 2007 holding that respondent was a regular, not a project employee, as the employment contract he supposedly signed contained the date of commencement but not a specific date when it would end, contrary to the rule that the duration and scope of similar contracts should be clearly set forth therein; and that based on the payrolls8 petitioner submitted and contrary to its claim that respondent was hired in January 2003, he had been employed in 2001, not 2003, lending weight to his claim that he had worked for petitioner for 16 years prior to the filing of his complaint.

The NLRC thus concluded that while respondents work as a utility man may not have been necessary or desirable in the usual business of petitioner as a construction company, that he performed the same functions continuously for 16 years converted an otherwise casual employment to regular employment, hence, his termination without just or authorized cause amounted to illegal dismissal. Petitioner moved for reconsideration of the NLRC decision, contending that respondents motion for reconsideration which it treated as an appeal was not perfected, it having been belatedly filed; that there was no statement of the date of receipt of the appealed decision; and that it lacked verification and copies thereof were not furnished the adverse parties. Petitioners motion was denied. The Court of Appeals, to which petitioner appealed, affirmed the NLRCs ruling by Decision9 of April 11, 2008. Petitioners motion for reconsideration having been denied by Resolution10 of August 28, 2008, it filed the present petition for review. Petitioner contends that the Labor Arbiters Decision dismissing the complaint had become final and executory following respondents failure to perfect his appeal, maintaining that the requirements for perfection of an appeal and for proof of service are not mere rules of technicality which may easily be set aside. The petition fails. The NLRC did not err in treating respondents motion for reconsideration as an appeal, the presence of some procedural flaws including the lack of verification and proof of service notwithstanding. In labor cases, rules of procedure should not be applied in a very rigid and technical sense. They are merely tools designed to facilitate the attainment of justice, and where their strict application would result in the frustration rather than promotion of substantial justice, technicalities must be avoided. Technicalities should not be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. Where the ends of substantial justice shall be better served, the application of technical rules of procedure may be relaxed.11 (emphasis supplied) Respecting the lack of verification, Pacquing v. Coca-Cola Philippines, Inc.12 instructs: As to the defective verification in the appeal memorandum before the NLRC, the same liberality applies. After all, the requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a condition affecting the form of pleading, the non-compliance of which does not necessarily render the pleading fatally defective. Verification is simply intended to secure an assurance that the allegations in the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. The court or tribunal may order the correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending circumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice may thereby be served. (emphasis supplied) As for the requirement on proof of service, it may also be dispensed with since in appeals in labor cases, non-service of copy of the appeal or appeal memorandum to the adverse party is not a jurisdictional defect which calls for the dismissal of the appeal.13 On the merits of the case, the Court finds that, indeed, respondent was a regular, not a project employee.

Saberola v. Suarez14 reiterates the well-settled definition of "project employee," viz: A project employee is one whose "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." (emphasis and underscoring supplied)1avvphi1 And Equipment Technical Services v. Court of Appeals15 emphasizes the difference between a regular employee and a project employee: As the Court has consistently held, the service of project employees are coterminus [sic] with the project and may be terminated upon the end or completion of that project or project phase for which they were hired. Regular employees, in contrast, enjoy security of tenure and are entitled to hold on to their work or position until their services are terminated by any of the modes recognized under the Labor Code. (emphasis and underscoring supplied) Petitioners various payrolls dating as early as 2001 show that respondent had been employed by it. As aptly observed by the appellate court, these documents, rather than sustaining petitioners argument, only serve to support respondents contention that he had been employed in various projects, if not for 16 years, at the very least two years prior to his dismissal. Assuming arguendo that petitioner hired respondent initially on a per project basis, his continued rehiring, as shown by the sample payrolls converted his status to that of a regular employee. Following Cocomangas Beach Hotel Resort v. Visca,16 the repeated and continuing need for respondents services is sufficient evidence of the necessity, if not indispensability, of his services to petitioner's business and, as a regular employee, he could only be dismissed from employment for a just or authorized cause. Petitioner having failed to discharge its burden of proving that it terminated the services of respondent for cause and with due process, the challenged decision must remain. WHEREFORE, the petition is DENIED. SO ORDERED. G.R. No. 172927 February 11, 2010

RONILO SORREDA, Petitioner, vs. CAMBRIDGE ELECTRONICS CORPORATION,1 Respondent. DECISION CORONA, J.: This petition2 seeks to reverse and set aside the May 26, 2005 decision3 of the Court of Appeals (CA) in CA-G.R. SP No. 77303 and its resolution denying reconsideration.4 The CA affirmed the resolution5 of the National Labor

Relations Commission (NLRC) in NLRC NCR CA No. 028156-01 declaring that petitioner Ronilo Sorreda was not a regular employee of respondent Cambridge Electronics Corporation. On May 8, 1999, petitioner was hired by respondent as a technician for a period of 5 months at minimum wage.6 Five weeks into the job (on June 15, 1999), petitioner met an accident in which his left arm was crushed by a machine and had to be amputated.7 Petitioner claimed that, shortly after his release from the hospital, officers of respondent company called him to a meeting with his common-law wife, father and cousin. There he was assured a place in the company as a regular employee for as long as the company existed and as soon as he fully recovered from his injury. In September 1999, after he recovered from his injury, petitioner reported for work. Instead of giving him employment, they made him sign a memorandum of resignation to formalize his separation from the company in the light of the expiration of his five-month contract. On November 16, 1999, petitioner filed in the Regional Arbitration Branch of the NLRC of Dasmarias, Cavite a complaint8 for illegal dismissal (later changed to breach of contract). In his position paper, he raised the following issues: 1. whether there was a valid agreement or contract of perpetual employment perfected between the parties concerned; 2. whether respondent corporation was bound thereby and 3. whether [petitioner] has a cause of action for damages against respondent based on the contract.9 He claimed that respondent failed to comply with the terms of the contract of perpetual employment which was perfected in June 1999 when he was called to a meeting by management.10 He prayed that respondent be made to pay compensatory,11 moral12 and exemplary damages and attorneys fees for default or breach of contract. Respondent denied that it extended regular employment to petitioner. Only words of encouragement were offered but not perpetual employment. Moreover, it assailed the labor arbiters jurisdiction over the case, claiming a lack of causal connection between the alleged breach of contract and their employer-employee relationship. The labor arbiter held that he had jurisdiction to hear and decide the case as it involved the employer-employee relationship of the contending parties. He ruled that petitioner who had been employed on a per-project basis became a regular employee by virtue of the contract of perpetual employment. He stated that the positive declaration of the witnesses (common-law wife, father and cousin) present at the meeting and the parole evidence rule was enough to support the petitioners claim. Thus, in a decision dated March 9, 2001, the labor arbiter ruled that petitioner was employed by respondent for an indefinite period of employment (that is, on regular status.) He ordered petitioners reinstatement and the payment of backwages, moral damages and exemplary damages as well as attorneys fees.13 Both petitioner and respondent appealed to the NLRC. Petitioner claimed that the labor arbiter erred in finding that he was a regular employee, that the case was based on illegal dismissal and that reinstatement and payment of backwages were the proper reliefs. Respondent, on the other hand, asked for the reversal of the labor arbiters decision based on grave abuse of discretion for assuming jurisdiction over the case.

The NLRC agreed with respondent.14 It found that petitioner was not a regular employee; thus, he was neither illegally dismissed nor entitled to reinstatement and backwages. Petitioner sued for compensatory damages because of the accident that befell him. As the contract for per-project employment had already expired, the issue no longer fell under the jurisdiction of the labor arbiter and NLRC. Moreover, the testimonies of petitioners witnesses were declared self-serving and thus insufficient to prove the contract of perpetual employment. The motion for reconsideration of petitioner was denied.15 Aggrieved, petitioner filed a petition for certiorari16 in the CA questioning the NLRCs finding of non-existence of the contract of perpetual employment. The CA dismissed the petition for lack of merit, stating that the labor arbiter decided the case on an issue that was never raised (i.e., the employment status of petitioner). Moreover, petitioners principal cause of action, breach of contract, was not cognizable by the labor courts but by the regular courts.17 The CA concluded that the NLRC did not commit any reversible error in finding that the labor arbiter had no jurisdiction over the case. Furthermore, petitioner failed to prove grave abuse of discretion in the NLRCs exercise of its quasi-judicial function. Petitioner moved for reconsideration but the motion was denied.18 Thus, this petition. We affirm the Court of Appeals. This case rests on the issue of whether the labor arbiter had the jurisdiction to take cognizance thereof. Jurisdiction over the subject matter of a complaint is determined by the allegations of the complaint.19 In Pioneer Concrete Philippines, Inc. v. Todaro,20 the Court reiterated that where no employer-employee relationship exists between the parties, and the Labor Code or any labor statute or collective bargaining agreement is not needed to resolve any issue raised by them, it is the Regional Trial Court which has jurisdiction. Thus it has been consistently held that the determination of the existence of a contract as well as the payment of damages is inherently civil in nature.21 A labor arbiter may only take cognizance of a case and award damages where the claim for such damages arises out of an employer-employee relationship.22 In this instance, petitioner, from the period May 8, 1999 to October 8, 1999, was clearly a per-project employee of private respondent, resulting in an employer-employee relationship. Consequently, questions or disputes arising out of this relationship fell under the jurisdiction of the labor arbiter.1avvphi1 However, based on petitioners allegations in his position paper, his cause of action was based on an alleged second contract of employment separate and distinct from the per-project employment contract. Thus, petitioner insisted that there was a perfected contract of perpetual employment and that respondent was liable to pay him damages. We note, however, that petitioner filed the case only when respondent refused to rehire him.23 While there was an employer-employee relationship between the parties under their five-month per-project contract of employment, the present dispute is neither rooted in the aforestated contract nor is it one inherently linked to it. Petitioner insists on a right to be employed again in respondent company and seeks a determination of the existence of a new and separate contract that established that right. As such, his case is within the jurisdiction not of the labor arbiter but of the regular courts. The NLRC and the CA were therefore correct in ruling that the labor arbiter erroneously took cognizance of the case.

Even assuming arguendo that the labor arbiter had the jurisdiction to decide the case, the Court cannot countenance petitioners claim that a contract of perpetual employment was ever constituted. While the Constitution recognizes the primacy of labor, it also recognizes the critical role of private enterprise in nationbuilding and the prerogatives of management. A contract of perpetual employment deprives management of its prerogative to decide whom to hire, fire and promote, and renders inutile the basic precepts of labor relations. While management may validly waive it prerogatives, such waiver should not be contrary to law, public order, public policy, morals or good customs.24 An absolute and unqualified employment for life in the mold of petitioners concept of perpetual employment is contrary to public policy and good customs, as it unjustly forbids the employer from terminating the services of an employee despite the existence of a just or valid cause. It likewise compels the employer to retain an employee despite the attainment of the statutory retirement age, even if the employee has became a "non-performing asset" or, worse, a liability to the employer. Moreover, aside from the self-serving claim of petitioner, there was no concrete proof to establish the existence of such agreement. Petitioner cannot validly force respondent to enter into a permanent employment contract with him. Such stance is contrary to the consensuality principle of contracts as well as to the management prerogative of respondent company to choose its employees. WHEREFORE, the petition is hereby DENIED. Costs against petitioner. SO ORDERED.

Respondent Trinidad further alleged that in December 2004 petitioner company terminated him from work after it shut down operations because of lack of projects. He learned later, however, that although it opened up a project in Batangas, it did not hire him back for that project. Petitioner company countered1 that it was in the construction business. By the nature of such business, it had to hire and engage the services of project construction workers, including respondent Trinidad, whose employments had to be co-terminous with the completion of specific company projects. For this reason, every time the company employed Trinidad, he had to execute an employment contract with it, called Appointment as Project Worker. Petitioner company stressed that employment intervals or gaps were inherent in the construction business. Consequently, after it finished its Boni Serrano-Katipunan Interchange Project in December 2004, Trinidads work ended as well. In compliance with labor rules, the company submitted an establishment termination report to the Department of Labor and Employment (DOLE). On December 23, 2006 the Labor Arbiter rendered a decision, dismissing respondent Trinidads complaint for unjust dismissal. The Labor Arbiter, however, ordered petitioner company to pay Trinidad P1,500.00 in unpaid service incentive leave, taking into consideration the three-year prescriptive period for money claims.2 The Labor Arbiter held that, since Trinidad was a project employee and since his company submitted the appropriate establishment termination report to DOLE, his loss of work cannot be regarded as unjust dismissal. The Labor Arbiter found no basis for granting Trinidad overtime pay, holiday pay, and 13th month pay. On August 31, 2007 the National Labor Relations Commission (NLRC) affirmed the Labor Arbiters ruling,3 prompting respondent Trinidad to elevate his case to the Court of Appeals (CA).4 On April 24, 2008 the latter rendered a decision, reversing the NLRCs findings. Petitioner company moved for a reconsideration of the decision but the CA denied the motion.

G.R. No. 183250

March 10, 2010 The Issue Presented

WILLIAM UY CONSTRUCTION CORP. and/or TERESITA UY and WILLIAM UY, Petitioners, vs. JORGE R. TRINIDAD, Respondent. DECISION

The core issue presented in the case is whether or not the CA correctly ruled that petitioner companys repeated rehiring of respondent Trinidad over several years as project employee for its various projects automatically entitled him to the status of a regular employee. The Courts Ruling

ABAD, J.: This case is about the tenure of project employees in the construction industry. The Facts and the Case On August 1, 2006 respondent Jorge R. Trinidad filed a complaint for illegal dismissal and unpaid benefits against petitioner William Uy Construction Corporation. Trinidad claimed that he had been working with the latter company for 16 years since 1988 as driver of its service vehicle, dump truck, and transit mixer. He had signed several employment contracts with the company that identified him as a project employee although he had always been assigned to work on one project after another with some intervals. The CA held that, although respondent Trinidad initially worked as a project employee, he should be deemed to have acquired the status of a regular employee since petitioner company repeatedly rehired him in its past 35 projects that lasted 16 years. The CA explained that Trinidads work as driver of the companys service vehicle, dump truck, and transit mixer was vital, necessary, and indispensable to the companys construction business. The intervals between his employment contracts were inconsequential since stoppage in operations at the end of every construction project was a foreseeable interruption of work. But the test for distinguishing a "project employee" from a "regular employee" is whether or not he has been assigned to carry out a "specific project or undertaking," with the duration and scope of his engagement specified at the time his service is contracted.5 Here, it is not disputed that petitioner company contracted respondent Trinidads service by specific projects with the duration of his work clearly set out in his employment contracts.6 He remained a project employee regardless of the number of years and the various projects he worked for the company.7

Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction workers, is that work depended on decisions and developments over which construction companies have no say. For this reason, the Court held in Caseres v. Universal Robina Sugar Milling Corporation8 that the repeated and successive rehiring of project employees do not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee. In this case, respondent Trinidads series of employments with petitioner company were co-terminous with its projects. When its Boni Serrano-Katipunan Interchange Project was finished in December 2004, Trinidads employment ended with it. He was not dismissed. His employment contract simply ended with the project for which he had signed up. His employment history belies the claim that he continuously worked for the company. Intervals or gaps separated one contract from another.9 The CA noted that DOLE Order 19 required employers to submit a report of termination of employees every completion of construction project. And, since petitioner company submitted at the hearing before the Labor Arbiter only the termination report covering respondent Trinidads last project, it failed to satisfy such requirement. But respondent Trinidad did not say in his complaint that he had been illegally dismissed after each of the projects for which he had been signed up. His complaint was essentially that he should have been rehired from the last project since he had already acquired the status of a regular employee. Consequently, petitioner company needed only to show the last status of Trinidads employment, namely, that of a project employee under a contract that had ended and the companys compliance with the reporting requirement for the termination of that employment. Indeed, both the Labor Arbiter and the NLRC were satisfied that the fact of petitioner companys compliance with DOLE Order 19 had been proved in this case. Parenthetically, the Social Security System should be able to alleviate the temporary unemployment of construction workers, a problem that is inherent in the nature of their work. WHEREFORE, the Court GRANTS the petition, SETS ASIDE the decision of the Court of Appeals in CA-G.R. SP 101903 dated April 24, 2008, and REINSTATES the decision of the National Labor Relations Commission in NLRC-NCR-CA 051703-07(7) dated August 31, 2007, which affirmed the decision of the Labor Arbiter in NLRC-NCR Case 07-0576406. SO ORDERED. G.R. No. 169170 August 8, 2010

ANTONIO GOBRES, MAGELLAN DALISAY, GODOFREDO PARAGSA, EMILIO ALETA and GENEROSO MELO, Respondents. DECISION PERALTA, J.: This is a petition for review on certiorari1 of the Decision of the Court of Appeals in CA-G.R. SP No. 70708, dated March 9, 2005, and its Resolution, dated August 2, 2005, denying petitioners motion for reconsideration. The facts are as follows: Respondents Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio Aleta and Generoso Melo worked as carpenters in the construction projects of petitioner D.M. Consunji, Inc., a construction company, on several occasions and/or at various times. Their termination from employment for each project was reported to the Department of Labor and Employment (DOLE), in accordance with Policy Instruction No. 20, which was later superseded by Department Order No. 19, series of 1993. Respondents last assignment was at Quad 4-Project in Glorietta, Ayala, Makati, where they started working on September 1, 1998. On October 14, 1998, respondents saw their names included in the Notice of Termination posted on the bulletin board at the project premises. Respondents filed a Complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC) against petitioner D.M. Consunji, Inc. and David M. Consunji for illegal dismissal, and non-payment of 13th month pay, five (5) days service incentive leave pay, damages and attorneys fees. Petitioner D.M. Consunji, Inc. and David M. Consunji countered that respondents, being project employees, are covered by Policy Instruction No. 20, as superseded by Department Order No. 19, series of 1993 with respect to their separation or dismissal. Respondents were employed per project undertaken by petitioner company and within varying estimated periods indicated in their respective project employment contracts. Citing the employment record of each respondent, petitioner and David M. Consuji averred that respondents services were terminated when their phases of work for which their services were engaged were completed or when the projects themselves were completed. Respondents notices of termination were filed with the DOLE, in compliance with Policy Instruction No. 20,2 superseded by Department Order No.19, series of 1993.3 With respect to respondent Generoso G. Melo, petitioner and David M. Consuji maintained the same positions they had against the case of Melos cocomplainants.4 Petitioner contended that since respondents were terminated by reason of the completion of their respective phases of work in the construction project, their termination was warranted and legal.5 Moreover, petitioner claimed that respondents have been duly paid their service incentive leave pay and 13th month pay through their respective bank accounts, as evidenced by bank remittances.6 Respondents replied that the Quad 4-Project at Glorietta, Ayala, Makati City was estimated to take two years to finish, but they were dismissed within the two-year period. They had no prior notice of their termination. Hence, granting that they were project employees, they were still illegally dismissed for non-observance of procedural due process.7 On October 4, 1999, the Labor Arbiter rendered a Decision8 dismissing respondents complaint. The Labor Arbiter found that respondents were project employees, that they were dismissed from the last project they were assigned

D.M. CONSUNJI, INC., Petitioner, vs.

to when their respective phases of work were completed, and that petitioner D.M. Consunji, Inc. and David M. Consunji reported their termination of services to the DOLE in accordance with the requirements of law. Respondents appealed the Labor Arbiters Decision to the NLRC In a Resolution9 dated July 31, 2001, the NLRC affirmed the decision of the Labor Arbiter, and dismissed the appeal for lack of merit. Respondents motion for reconsideration was denied by the NLRC for lack of merit in its Order10 dated February 21, 2002. Respondents filed a petition for certiorari with the Court of Appeals, seeking the annulment of the NLRC Resolution dated July 31, 2001 and Order dated February 21, 2002. Respondents prayed that their dismissal be declared as illegal, and that they be ordered reinstated to their former position with full backwages until actual reinstatement, and awarded moral, exemplary and nominal damages. On March 9, 2005, the Court of Appeals rendered a Decision, the dispositive portion of which reads: WHEREFORE, the Decision and Resolution of the NLRC in finding petitioners dismissal as valid are AFFIRMED with MODIFICATION that private respondents are ordered to pay each of the petitioners the sum of P20,000.00 as nominal damages for non-compliance with the statutory due process. Costs against petitioners.11 The Court of Appeals sustained the findings of the NLRC that respondents are project employees. It held: The Labor Arbiter and *the+ NLRC correctly applied Article 280 of the Labor Code when it ruled that petitioners employment, which is fixed for [a] specific project and the completion of which has been determined at the time that their services were engaged, makes them project employees. As could be gleaned from the last portion of Article 280 of the Labor Code, the nature of employment of petitioners, which is fixed for a specific project and the completion of which has been determined when they were hired, is excepted therefrom. This is the reason why under Policy Instruction No. 20 and Department Order No. 19, series of 1993, employers of project employees are required to report their termination to DOLE upon completion of the project for which they were engaged.12 The CA stated that although respondents were project employees, they were entitled to know the reason for their dismissal and to be heard on whatever claims they might have. It held that respondents right to statutory due process was violated for lack of advance notice of their termination, even if they were validly terminated for having completed the phases of work for which they were hired. The appellate court stated that had respondents been given prior notice, they would not have reported for work on October 14, 1998. It cited Agabon v. NLRC,13 which held that where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual, but the employer should indemnify the employee for the violation of his statutory rights by paying nominal damages. Hence, the Court of Appeals ordered petitioner and David M. Consunji to pay respondents P20,000.00 each as nominal damages for lack of advance notice of their termination. Petitioner and David M. Consunji filed a partial motion for reconsideration and prayed that the Decision of the Court of Appeals be partially reconsidered by deleting the award of nominal damages to each respondent. It pointed out that under Department Order No. 19, series of 1993, which is the construction industrys governing law,

there is no provision requiring administrative hearing/investigation before a project employee may be terminated on account of completion of phase of work or the project itself. Petitioner also argued that prior notice of termination is not required in this case, and that Agabon is not applicable here, because the termination in Agabon was for cause, while herein respondents were terminated due to the completion of the phases of work for which their services were engaged. In a Resolution14 dated August 2, 2005, the Court of Appeals denied the partial motion for reconsideration. It held that the case of Agabon v. NLRC is the one controlling and in point. The appellate court stated that in Agabon, the Court ruled that even if the dismissal is legal, the employer should still indemnify the employee for the violation of his statutory rights. It added that no distinction was made in Agabon whether the employee is engaged in a construction project or not. Petitioner D.M. Consunji, Inc. filed this petition raising this question of law: WHETHER OR NOT THERE IS BASIS FOR THE COURT OF APPEALS IN ORDERING HEREIN PETITIONER TO PAY RESPONDENTS EACH THE SUM OF P20,000.00 AS NOMINAL DAMAGES FOR "ALLEGED" NON-COMPLIANCE WITH THE STATUTORY DUE PROCESS.15 Petitioner contends that the award of nominal damages in the amount of P20,000.00 to each respondent is unwarranted under Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, which states, "If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required."16 Petitioner also contends that Agabon v. NLRC is not applicable to this case. The termination therein was for just cause due to abandonment of work, while in this case, respondents were terminated due to the completion of the phases of work. In support of its argument, petitioner cited Cioco, Jr. v. C.E. Construction Corporation,17 which held: x x x More importantly, Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code provides that no prior notice of termination is required if the termination is brought about by completion of the contract or phase thereof for which the worker has been engaged. This is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE on the termination of the employment.18 The petition is meritorious. Respondents were found to be project employees by the Labor Arbiter, the NLRC and the Court of Appeals. Their unanimous finding that respondents are project employees is binding on the Court. It must also be pointed out that respondents have not appealed from such finding by the Court of Appeals. It is only the petitioner that appealed from the decision of the Court of Appeals. The main issue is whether or not respondents, as project employees, are entitled to nominal damages for lack of advance notice of their dismissal. A project employee is defined under Article 280 of the Labor Code as one whose "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 services to be performed is seasonal in nature and the employment is for the duration of the season."19 In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that respondents, as project employees, were validly terminated due to the completion of the phases of work for which their services were engaged. However, the Court of Appeals held that respondents were entitled to nominal damages, because petitioner failed to give them advance notice of their termination. The appellate court cited the case of Agabon v. NLRC as basis for the award of nominal damages. The Court holds that Agabon v. NLRC is not applicable to this case, because it involved the dismissal of regular employees for abandonment of work, which is a just cause for dismissal under Article 282 of the Labor Code.20 Although the dismissal was for a cause, the employer therein was required to observe the standard of due process for termination of employment based on just causes under Article 282 of the Labor Code, which procedural due process requirements are enumerated in Section 2, Rule 1, Book VI21 of the Omnibus Rules Implementing the Labor Code.22 Since the employer therein failed to comply with the twin requirements of notice and hearing, the Court ordered the employer to pay the employees involved nominal damages in the amount of P30,000.00 for failure to observe procedural due process. Unlike in Agabon, respondents, in this case, were not terminated for just cause under Article 282 of the Labor Code. Dismissal based on just causes contemplate acts or omissions attributable to the employee.23 Instead, respondents were terminated due to the completion of the phases of work for which their services were engaged. As project employees, respondents termination is governed by Section 1 (c) and Section 2 (III), Rule XXIII (Termination of Employment), Book V of the Omnibus Rules Implementing the Labor Code. Section 1 (c), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code states: Section 1. Security of tenure. (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process. xxxx (c) In cases of project employment or employment covered by legitimate contracting or sub-contracting arrangements, no employee shall be dismissed prior to the completion of the project or phase thereof for which the employee was engaged, or prior to the expiration of the contract between the principal and contractor, unless the dismissal is for just or authorized cause subject to the requirements of due process or prior notice, or is brought about by the completion of the phase of the project or contract for which the employee was engaged.24 Records show that respondents were dismissed after the expiration of their respective project employment contracts, and due to the completion of the phases of work respondents were engaged for. Hence, the cited provisions requirements of due process or prior notice when an employee is dismissed for just or authorized cause (under Articles 282 and 283 of the Labor Code) prior to the completion of the project or phase thereof for which the employee was engaged do not apply to this case. Further, Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code provides:

Section 2. Standard of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed. 1. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice [of] termination served on the employee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address. II. For termination of employment as based on authorized causes defined in Article 283 of the Code, the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department at least thirty (30) days before the effectivity of the termination, specifying the ground or grounds for termination. III. If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required. If the termination is brought about by the failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.25 In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that respondents were validly terminated due to the completion of the phases of work for which respondents services were engaged. The above rule clearly states, "If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required." Cioco, Jr. v. C.E. Construction Corporation26 explained that this is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE on the termination of the employment.1avvphi1 Hence, prior or advance notice of termination is not part of procedural due process if the termination is brought about by the completion of the contract or phase thereof for which the employee was engaged. Petitioner, therefore, did not violate any requirement of procedural due process by failing to give respondents advance notice of their termination; thus, there is no basis for the payment of nominal damages. In sum, absent the requirement of prior notice of termination when the termination is brought about by the completion of the contract or phase thereof for which the worker was hired, respondents are not entitled to nominal damages for lack of advance notice of their termination. WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 70708, dated March 9, 2005, insofar as it upholds the validity of the dismissal of respondents is AFFIRMED, but the award of nominal damages to respondents is DELETED. The Resolution of the Court of Appeals, dated August 2, 2005, is SET ASIDE. No costs. SO ORDERED.

G.R. No. 113166

February 1, 1996

ISMAEL SAMSON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ATLANTIC GULF AND PACIFIC CO., MANILA, INC., respondents. DECISION REGALADO, J.: In the present petition for review on certiorari, which should properly have been initiated as and is hereby considered a special civil action for certiorari under Rule 65, herein petitioner Ismael Samson assails the decision of public respondent National Labor Relations Commission (NLRC) dated November 29, 19931 which declared that he was a project employee, in effect reversing the earlier finding of labor arbiter Felipe T. Garduque II that he is actually a regular employee. Petitioner has been employed with private respondent Atlantic Gulf and Pacific Co., Manila, Inc. (AG & P) in the latter's various construction projects since April, 1965, in the course of which employment he worked essentially as a rigger, from laborer to rigger foreman. From 1977 up to 1985, he was assigned to overseas projects of AG & P, particularly in Kuwait and Saudi Arabia. On November 5, 1989, petitioner filed a complaint for the conversion of his employment status from project employee to regular employee, which complaint was later amended to include claims for underpayment, nonpayment of premium pay for holiday and rest day, refund of reserve fund, and 10% thereof as attorney's fees. Petitioner alleged therein that on the basis of his considerable and continuous length of service with AG & P, he should already be considered a regular employee and, therefore, entitled to the benefits and privileges appurtenant thereto. The labor arbiter, in a decision dated June 30, 1993,2 declared that petitioner should be considered a regular employee on the ground that it has not been shown that AG & P had made the corresponding report to the nearest Public Employment Office every time a project wherein petitioner was assigned had been completed and his employment contract terminated, as required under DOLE Policy Instruction No. 20. Furthermore, pursuant to the same policy instruction, the labor arbiter found that since petitioner was not free to leave anytime and to offer his services to other employers, he should be considered an employee for an indefinite period because he is a member of a work pool from which AG & P draws its project employees and is considered an employee thereof during his membership therein, hence the completion of the project does not mean termination of the employer-employee relationship. In refutation of the allusion of AG & P to the maxims of "no work, no pay" and "a fair day's wage for a fair day's labor," the labor arbiter held that there is no evidence that at one point in time the respondent has not secured any contract and, further, that complainant has been continuously rendering service in the corporation since 1965 up to the date of his aforesaid decision. Consequently, the labor arbiter ordered that petitioner's employment status be changed from project to regular employee effective November 5, 1989 and that he be given other benefits accorded regular employees plus 10% thereof as attorney's fees. The claim against petitioner's reserve fund was denied on the ground of prescription.

On appeal, public respondent NLRC reversed the decision of the labor arbiter and dismissed the complaint for lack of merit. It ruled that the evidence shows that petitioner was engaged for a fixed and determinable period, which thereby made him a project employee; that there was no evidence presented nor any allegation made by petitioner to support the labor arbiter's finding that the former was not free to leave and offer his services to other employers; that Policy Instruction No. 20 has been superseded by Department Order No. 19, Series of 1993, which provides that non-compliance with the required report to the nearest Public Employment Office no longer affixes a prescription of regular employment; and that the repeated or constant re-hiring of project workers for subsequent projects is permitted without such workers being considered regular employees. Finally, it ratiocinated that "[l]ength of service, while such may be used as a yardstick for other types of employees in other endeavor(s), does not apply to workers in the construction industry, particularly to project employees. In the case at bar, the characteristics peculiar to the construction business make it imperative for construction companies to hire workers for a particular project as the need arises and it would be financially disadvantageous to owners of construction companies to retain in its payrolls employees and/or workers whose services are no longer required in the particular project to which they have been assigned."3 Hence this petition, which presents for resolution the sole issue of whether petitioner is a project or regular employee. Petitioner principally argues that respondent commission gravely erred in declaring that he is merely a project employee, invoking in support thereof the ruling enunciated in the case of Caramol vs. National Labor Relations Commission, et al.4 His being a regular employee is allegedly supported by evidence, such as his project employment contracts with private respondent, which show that petitioner performed the same kind of work as rigger throughout his period of employment and that, as such, his task was necessary and desirable to private respondent's usual trade or business. The Solicitor General5 fully agrees with petitioner, with the observation that the evidence indubitably shows that after a particular project has been accomplished, petitioner would be re-hired immediately the following day save for a gap of one (l) day to one (1) week from the last project to the succeeding one; and that between 1965 to 1977, there were at least fifty (50) occasions wherein petitioner was hired by private respondent for a continuous period of time. He hastens to add that Department Order No. 19, which purportedly superseded Policy Instruction No. 20, cannot be given retroactive effect because at the time petitioner's complaint was filed, the latter issuance was still in force. On the other hand, private respondent preliminarily avers that the present petition for review under Rule 45 filed by petitioner is not the proper remedy from a decision of the NLRC. Even assuming that the same may be treated as a special civil action under Rule 65, the petition must still fail for failure of petitioner to exhaust administrative remedies in not filing a motion for reconsideration from the questioned decision of respondent commission as required under Section 14, Rule VII of the Implementing Rules. Besides, the judgment under review supposedly became final and executory on January 13, 1994 pursuant to the Entry of Judgment dated February 9, 1994. Respondent AG & P then insists that petitioner is merely a project employee for several reasons. First, the factual findings of respondent commission, which is supported by substantial evidence, is already conclusive and binding and, therefore, entitled to respect by this Court. Second, Department Order No. 19 amended Policy Instruction No. 20 by doing away with the required notice of termination upon completion of the project. Hence, non-compliance with the required report, which is only one of the "indicators" for project employment, no longer affixes a prescription of regular employment, by reason of which the doctrine laid down in the Caramol case no longer

applies to the case at bar. In addition, Department Order No. 19 allows the re-hiring of employees without making them regular employees, aside from the fact that the word "rehiring" connotes new employment. Third, on the basis of petitioner's project employment contracts, his services were engaged for a fixed and determinable period which thus makes each employment for every project separate and distinct from one another. Consequently, the labor arbiter supposedly erred in taking into account petitioner's various employments in the past in determining his length of service, considering that upon completion of a project, the services of the project employee are deemed terminated, his employment being coterminous with each project or phase of the project to which he is assigned. Finally, so it is claimed, petitioner should be considered a project employee since he falls under the exception provided for in Article 280 of the Labor Code to the effect that "the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee . . . ." The bulk of the problem appears to hinge on the determination of whether or not Department Order No. 19 should be given retroactive effect in order that the notice of termination requirement may be dispensed with in this case for a correlative ruling on the presumption of regularity of employment which normally arises in case of noncompliance therewith. Both the petitioner and the Solicitor General submit that said order can only have prospective application. Private respondent believes otherwise. We find for petitioner. When the present action for regularization was filed on November 5, 19896 and during the entire period of petitioner's employment with private respondent prior to said date, the rule in force then was Policy Instruction No. 20 which, in the fourth paragraph thereof, required the employer company to report to the nearest Public Employment Office the fact of termination of a project employee as a result of the completion of the project or any phase thereof in which he is employed. Furthermore, contrary to private respondent's asseveration, Department Order No. 19, which was issued on April 1, 1993, did not totally dispense with the notice requirement but, instead, made provisions therefor and considered it as one of the "indicators" that a worker is a project employee. This is evident in Section 2.2 thereof which provides that: 2.2 Indicators of project employment. Either one or more of the following circumstances, among others, may be considered as indicators that an employee is a project employee. (a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable. (b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring. (c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged. (d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees' terminations dismissals suspensions. (f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. (Emphasis supplied) More importantly, it must be emphasized that the notice of termination requirement has been retained by express provision of Department Order No. 19 under Section 6.1 thereof, to wit: 6.1. Requirements of labor and social legislations. (a) The construction company and the general contractor and/or subcontractor referred to in Sec. 2.5 shall be responsible for the workers in its employ on matters of compliance with the requirements of existing laws and regulations on hours of work, wages, wage related benefits, health, safety and social welfare benefits, including submission to the DOLE-Regional Office of Work Accident/Illness Report, Monthly Report on Employees' Terminations/Dismissals/Suspensions and other reports. . . . (Emphasis ours.) Perforce, we agree with the labor arbiter that private respondent's failure to report the termination of petitioner's services to the nearest Public Employment Office, after completion of every project or a phase thereof to which he is assigned, is a clear indication that petitioner was not and is not a project employee. On the bases of the foregoing, the retroactivity or prospectivity of Department Order No. 19 would normally be of no moment. At any rate, even if the new issuance has expressly superseded Policy Instruction No. 20, the same cannot be given retroactive effect as such an application would be prejudicial to the employees and would run counter to the constitutional mandate on social justice and protection to labor. Furthermore, this view that we take is more in accord with the avowed purpose of Department Order No. 19 "to ensure the protection and welfare of workers employed" in the construction industry, and which interpretation may likewise be inferred from a reading of Section 7 thereof, applied corollarily to this case, which provides that "nothing herein shall be construed to authorize the diminution or reduction of benefits being enjoyed by employees at the time of issuance hereof." It is a basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The interpretation herein handed down gives meaning and substance to the liberal and compassionate spirit of the law enunciated in Article 4 of the Labor Code that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor."7 The mandate in Article 281 of the Labor Code, which pertinently prescribes that "the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer" and that "any employee who has rendered at least one year of service, whether such service is continuous or broken shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists," should apply in the case of herein petitioner. It is not disputed that petitioner had been working for private respondent for approximately twenty-eight (28) years as of the adjudication of his plaint by respondent NLRC, and that his "project-to-project" employment was renewed

several times. With the successive contracts of employment wherein petitioner continued to perform virtually the same kind of work, i.e., as rigger, throughout his period of employment, it is manifest that petitioner's assigned tasks were usually necessary or desirable in the usual business or trade of private respondent.8 The repeated rehiring and continuing need for his services are sufficient evidence of the necessity and indispensability of such services to private respondent's business or trade.9 Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order. 10 As observed by the Solicitor General, the record of this case discloses, as part of petitioner's position paper, a certification 11 duly issued by private respondent clearly showing that the former's services were engaged by private respondent on a continuing basis since 1965. The certification indubitably indicates that after a particular project has been accomplished, petitioner would be re-hired immediately the following day save for a gap of one (1) day to one (1) week from the last project to the succeeding one. 12 There can, therefore, be no escape from the conclusion that petitioner is a regular employee of private respondent. Anent the issue on non-exhaustion of administrative remedies, we hold that the failure of the petitioner to file a motion for reconsideration of the NLRC decision before coming to this Court was not a fatal omission. The exhaustion of administrative remedies doctrine is not a hard and fast rule and does not apply where the issue is purely a legal one. 13 A motion for reconsideration as a prerequisite for the filing of an action under Rule 65 may be dispensed with where the issue is purely of law, as in the present case. 14 At all events and in the interest of substantial justice, especially in cases involving the rights of workers, procedural lapses, if any, may be disregarded to enable the Court to examine and resolve the conflicting rights and responsibilities of the parties. This liberality is warranted in the case at bar, especially since it has been shown that the intervention of the Court is necessary for the protection of herein petitioner. 15 WHEREFORE, the questioned decision of respondent National Labor Relations Commission, dated November 29, 1993, is hereby REVERSED AND SET ASIDE, and the decision of Labor Arbiter Felipe T. Garduque II in NCR Case No. 00-116255-92, dated June 30, 1993, is hereby ordered REINSTATED. SO ORDERED. G.R. No. 159862 October 17, 2006

After working as a carpenter for respondent since August 1991, petitioner's employment was terminated on 30 October 1999. This prompted petitioner to file a complaint for illegal dismissal, alleging that on said date he was verbally informed that he was already terminated from employment and barred from entering the premises. On the same occasion, he was told to look for another job. Thus, he claimed that he was unceremoniously terminated from employment without any valid or authorized cause. On the other hand, respondent insisted that petitioner was a mere project employee who was terminated upon completion of the project for which he was hired. In a Decision dated 22 February 2001, the Labor Arbiter ruled that petitioner is a regular, not a project employee, since respondent failed to present the alleged project employment contracts.1 Furthermore, the ruling went on, as petitioner's dismissal was not done in accordance with the due process requirement of twin notices, said dismissal is illegal. The Labor Arbiter thus ordered the reinstatement of petitioner, and the payment of backwages, as well as moral and exemplary damages.2 On appeal to the NLRC, respondent presented the other project employment contracts with petitioner and the termination reports3 submitted to the Department of Labor and Employment (DOLE). Convinced, and finding sufficient proof that petitioner's employment was covered by contracts with specific duration identifying the project and nature of activity, the Commission set aside the Labor Arbiter's Decision.4 According to the NLRC, petitioner's service of eight (8) years is not the controlling factor in determining the nature of his employment, it appearing that the employment contracts he entered into were renewed every six (6) months and that from the contracts he knew beforehand when his engagement was supposed to end.5 Finding that petitioner's termination was not attended by bad faith or malice, but was merely brought about by the completion of the phase of work for which he was hired, the NLRC ruled that the award of damages was not warranted.6 Petitioner sought reconsideration of the Resolution but to no avail, as the NLRC stood pat on its stand issuing the Resolution of 8 May 2002.7 Petitioner went up to the Court of Appeals via a petition for review on certiorari, positing that the NLRC committed grave abuse of discretion in coming out with the challenged issuances which reversed the factual findings and the decision of the Labor Arbiter. The Court of Appeals dismissed the petition. According to the appellate court, while it is true that petitioner has worked for more than a year for respondent and that his work as a carpenter is necessary and desirable to respondent's usual trade or business, still he cannot be considered a regular employee. It noted that (i) petitioner's appointment papers provided for the specific project to be undertaken and the duration of such project; (ii) that he was issued an accountability clearance; and (iii) that respondent submitted the requisite employment termination reports.8 Petitioner filed a motion for reconsideration which was, however, denied for lack of merit.9 Feeling aggrieved by the resolutions of the Court of Appeals, petitioner has come to this Court via the present petition for review raising the following errors:

HERMONIAS L. LIGANZA, petitioner, vs. RBL SHIPYARD CORPORATION and ENGR. BEN LIM, JR., respondents.

DECISION 1. The Court of Appeals seriously erred in concluding that "petitioner is a project employee, not a regular employee;" TINGA, J.: This is a petition for certiorari to review the Decision of the Court of Appeals in CA-G.R. SP No. 71459 affirming the ruling of the National Labor Relations Commission (NLRC) that petitioner is a project employee. 2. The Court of Appeals erred in declaring that "all of petitioner's appointment papers with private respondent corporation specially provided for the project to be undertaken and the duration of such project;" 3. The Court of Appeals erred in declaring that " after the completion of each project, petitioner was issued an accountability clearance, even as private respondent submitted a report of the said termination to the

regional/district office of the Department of Labor and Employment (DOLE) as required by Policy Instruction No. 20 of the Department of Labor and Employment;" 4. The Court of Appeals erred in finding that "the evidence presented by petitioner himself showed that the service rendered with private respondent corporation was to end at a specific date, i.e. in the year 1999;" and 5. The Court of Appeals erred in holding that it is "unnecessary to discuss the collateral issue of illegal dismissal."10 The issue boils down to whether petitioner is a project employee and whether his termination was illegal. The petition must be granted. A project employee is one whose "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."11 Before an employee hired on a per project basis can be dismissed, a report must be made to the nearest employment office of the termination of the services of the workers every time it completed a project, pursuant to Policy Instruction No. 20.12 Petitioner claims he is a regular employee since he worked for respondent continuously and without interruption from 13 August 1991 up to 30 October 1999 and that his work as a carpenter was necessary and desirable to the latter's usual business of shipbuilding and repair. He asserts that when he was hired by respondent in 1991, there was no employment contract fixing a definite period or duration of his engagement, and save for the contract covering the period 20 September 1999 to 19 March 2000, respondent had been unable to show the other project employment contracts ever since petitioner started working for the company. Furthermore, respondent failed to file as many termination reports as there are completed projects involving petitioner, he adds. On the other hand, respondent insists that petitioner is a project employee as evidenced by the project employment contracts it signed with him and employee termination reports it submitted to the DOLE. In finding that petitioner was a project employee, both the NLRC and the Court of Appeals relied greatly on the aforementioned contracts. While administrative findings of fact are accorded great respect and even finality when supported by substantial evidence, nevertheless, when it can be shown that administrative bodies grossly misappreciated evidence of such nature as to compel a contrary conclusion, this Court will not hesitate to reverse their factual findings.13 While the appropriate evidence to show that a person is a project employee is the employment contract specifying the project and the duration of such project, the existence of such contract is not always conclusive of the nature of one's employment. In the instant case, respondent seeks to prove the status of petitioner's employment through four (4) employment contracts covering a period of only two (2) years to declare petitioner as a project employee. All that respondent submitted were four (4) contracts covering the periods 29 July 1997 to 28 January 1998, 24 August 1998 to 25 February 1999, 3 March 1999 to 2 September 1999, and 20 September 1999 to 19 March 2000, as well as the employment termination reports for January 1998, August 1998, February 1999 and October 1999.14 Respondent failed to present the contracts purportedly covering petitioner's employment from 1991 to July 1997, spanning six (6) years of the total eight (8) years of his employment. To explain its failure in this regard, respondent

claims that the records and contracts covering said period were destroyed by rains and flashfloods that hit the company's office.15 We are not convinced. To begin with, respondent has been unable to refute petitioner's allegation that he did not sign any contract when he started working for the company. The four employment contracts are not sufficient to reach the conclusion that petitioner was, and has been, a project employee earlier since 1991. The Court is not satisfied with the explanation that the other employment contracts were destroyed by floods and rains. Respondent could have used other evidence to prove project employment, but it did not do so, seemingly content with the convenient excuse of "destroyed documents." The Court takes exception to the Court of Appeals' finding that "after every completion of the project, petitioner was free to seek other employments outside the private respondent's company."16 This conclusion is not supported by the record. As respondent has affirmed, it executes three (3)-month or six (6)- month contracts with its so-called project employees.17 Except for respondent's claim that petitioner and its other project employees are free to seek work after the termination of their contracts, no other proof was shown to this effect. In fact, from the very scant record of petitioner's employment, it may be inferred that the contracts entered into by petitioner could not have been spaced so far apart as to allow petitioner seek lucrative employment elsewhere. For example, there was an interval of only four (4) days between petitioner's contracts for the periods 24 August 1998 to 25 February 1999 and 3 March 1999 to 2 September 1999, and only 17 days between the contracts for 3 March 1999 to 2 September 1999 and 20 September 1999 to 19 March 2000. Thus, from these facts alone, it would be difficult to conclude that petitioner indeed was allowed to seek other employment in between contracts. Even assuming that petitioner is a project employee, respondent failed to prove that his termination was for a just and valid cause. While it is true that the employment contract states that the contract ends upon a specific date, or upon completion of the project, respondent failed to prove that the last project was indeed completed so as to justify petitioner's termination from employment. In termination cases, the burden of proof rests on the employer to show that the dismissal is for a just cause.18 Thus, employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual basis for the latter's dismissal.19 Respondent could have easily proved that the project or phase for which petitioner was hired has already been completed. A certificate from the owner of the vessel serviced by the company, pictures perhaps, of the work accomplished, and other proof of completion could have been procured by respondent. However, all that we have is respondent's self-serving assertion that the project has been completed. This Court has held that an employment ceases to be co-terminous with specific projects when the employee is continuously rehired due to the demands of employer's business and re-engaged for many more projects without interruption.20 In Maraguinot, Jr. v. NLRC (Second Division),21 the Court ruled that "once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence."22 Contrary to the Court of Appeals' observation,23 the situation obtaining in this case is not at all in pari materia with that of Sandoval Shipyards, Inc. v. NLRC. 24 In the cited case, a company engaged in the building and repair of vessels hired welders, helpers and construction workers to work in the repair or construction of a specified vessel. Upon completion of only one particular project, several workers were terminated from work, and the termination was reported to the then Ministry of Labor and Employment. The employees filed complaints for illegal dismissal.

This Court found the complaining employees to be project employees whose work were co-terminous with the project for which they were hired. As in Sandoval, respondent is an establishment engaged in the repair, rebuilding and/or renovation of cargo and fishing vessels, including the component activities of carpentry, welding, painting, civil and nautical engineering works and refrigeration as well as repair and reconditioning power installations and improvement of electrical services and facilities in the vessel.25 Petitioner, as carpenter, was tasked to "make and repair cabinet, flooring, quarters, ceiling, windows, doors, kitchen and other parts of the vessel that needs to be repaired."26 As such, petitioner's work was necessary or desirable to respondent's business. However, unlike in Sandoval where the complaining employees were hired for only one project lasting for three (3) months at most, petitioner in this case was employed by respondent continuously from 1991 to 1999. Assuming, without granting that petitioner was initially hired for specific projects or undertakings, the repeated re-hiring and continuing need for his services for over eight (8) years have undeniably made him a regular employee. Respondent capitalizes on our ruling in D.M. Consunji, Inc. v. NLRC27 which reiterates the rule that the length of service of a project employee is not the controlling test of employment tenure but whether or not "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."28 Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer.29 Here, respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order.30 The Court observes that respondent has changed its defense twice during the lifetime of this case. In the earlier stages of the proceedings before the NLRC, respondent claimed that petitioner was separated from work because of project completion. However, in the Court of Appeals, it claimed that petitioner was not terminated from work, but that he in fact resigned from the company.31 In the present proceedings before this Court, respondent discarded the defense of resignation and re-used the defense of project completion. Whatever the truth may be, this unabashed vacillation only shows that respondent does not have a strong defense on its side and that respondent itself is not sure of its position on the issue of illegal dismissal. All considered, there are serious doubts in the evidence on record that petitioner is a project employee, or that he was terminated for just cause. These doubts shall be resolved in favor of petitioner, in line with the policy of the law to afford protection to labor and construe doubts in favor of labor. It is well-settled that the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.32 When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause.33 For failure to prove otherwise, the Court has no recourse but to grant the petition. Finally, the Court reiterates that:

At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re-hire a project employee even after completion of the project for which he was hired. The import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. What this decision merely accomplishes is a judicial recognition of the employment status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool employees who perform tasks necessary or desirable to the employer's usual business or trade. x x x 34 WHEREFORE, the petition is GRANTED and the challenged decision of the Court of Appeals is REVERSED and SET ASIDE. The 22 February 2001 Decision of the Labor Arbiter is REINSTATED. No pronouncement as to costs. SO ORDERED. G.R. No. 111042 October 26, 1999

AVELINO LAMBO and VICENTE BELOCURA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and J.C. TAILOR SHOP and/or JOHNNY CO, respondents. MENDOZA, J.: This is a petition for certiorari to set aside the decision 1 of the National Labor Relations Commission (NLRC) which reversed the awards made by the Labor Arbiter in favor of petitioners, except one for P4,992.00 to each, representing 13th month pay. The facts are as follows. Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents J.C. Tailor Shop and/or Johnny Co on September 10, 1985 and March 3, 1985, respectively. They worked from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays. As in the case of the other 100 employees of private respondents, petitioners were paid on a piece-work basis, according to the style of suits they made. Regardless of the number of pieces they finished in a day, they were each given a daily pay of at least P64.00. On January 17, 1989, petitioners filed a complaint against private respondents for illegal dismissal and sought recovery of overtime pay, holiday pay, premium pay on holiday and rest day, service incentive leave pay, separation pay, 13th month pay, and attorneys fees.1wphi1.nt After hearing, Labor Arbiter Jose G. Gutierrez found private respondents guilty of illegal dismissal and accordingly ordered them to pay petitioners claims. The dispositive portion of the Labor Arbiters decision reads: WHEREFORE, in the light of the foregoing, judgment is hereby rendered declaring the complainants to have been illegally dismissed and ordering the respondents to pay the complainants the following monetary awards: AVELINO LAMBO I. VICENTE BELOCURA P64,896.00 P64,896.00

BACKWAGES

The petition is meritorious. II. III. IV. V. OVERTIME PAY HOLIDAY PAY 13TH MONTH PAY SEPARATION PAY 13,447.90 13,447.90 1,399.30 1,399.30 4,992.00 4,992.00 9,984.00 11,648.00 First. There is no dispute that petitioners were employees of private respondents although they were paid not on the basis of time spent on the job but according to the quantity and the quality of work produced by them. There are two categories of employees paid by results: (1) those whose time and performance are supervised by the employer. (Here, there is an element of control and supervision over the manner as to how the work is to be performed. A piece-rate worker belongs to this category especially if he performs his work in the company premises.); and (2) those whose time and performance are unsupervised. (Here, the employers control is over the result of the work. Workers on pakyao and takay basis belong to this group.) Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in garment factories where work is done in the company premises, while payment on pakyao and takay basis is commonly observed in the agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify. 4 Petitioners belong to the first category, i.e., supervised employees. In determining the existence of an employer-employee relationship, the following elements must be considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct. 5 Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. 6 In this case, private respondents exercised control over the work of petitioners. As tailors, petitioners worked in the companys premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays. The mere fact that they were paid on a piece-rate basis does not negate their status as regular employees of private respondents. The term "wage" is broadly defined in Art. 97 of the Labor Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of the relations. 7 Nor does the fact that petitioners are not covered by the SSS affect the employer-employee relationship. Indeed, the following factors show that petitioners, although piece-rate workers, were regular employees of private respondents: (1) within the contemplation of Art. 280 of the Labor Code, their work as tailors was necessary or desirable in the usual business of private respondents, which is engaged in the tailoring business; (2) petitioners worked for private respondents throughout the year, their employment not being dependent on a specific project or season; and, (3) petitioners worked for private respondents for more than one year. 8 Second. Private respondents contend, however, that petitioners refused to report for work after learning that the J.C. Tailoring and Dress Shop Employees Union had demanded their (petitioners) dismissal for conduct unbecoming of employees. In support of their claim, private respondents presented the affidavits 9 of Emmanuel Y. Caballero, president of the union, and Amado Cabaero, member, that petitioners had not been dismissed by private respondents but that practically all employees of the company, including the members of the union had asked management to terminate the services of petitioners. The employees allegedly said they were against petitioners request for change of the mode of payment of their wages, and that when a meeting was called to discuss this issue, a petition for the dismissal of petitioners was presented, prompting the latter to walk out of their jobs and instead file a complaint for illegal dismissal against private respondents on January 17, 1989, even before all employees could sign the petition and management could act upon the same.1wphi1.nt To justify a finding of abandonment of work, there must be proof of a deliberate and unjustified refusal on the part of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal intent

TOTAL

P96,383.20 = P191,102.40 19,110.24

P94,719.20

Add: 10% Attorney's Fees GRAND TOTAL =========

P210,212.64

or a total aggregate amount of TWO HUNDRED TEN THOUSAND TWO HUNDRED TWELVE AND 64/100 (P210,212.64). All other claims are dismissed for lack of merit. SO ORDERED. 2 On appeal by private respondents, the NLRC reversed the decision of the Labor Arbiter. It found that petitioners had not been dismissed from employment but merely threatened with a closure of the business if they insisted on their demand for a "straight payment of their minimum wage," after petitioners, on January 17, 1989, walked out of a meeting with private respondents and other employees. According to the NLRC, during that meeting, the employees voted to maintain the company policy of paying them according to the volume of work finished at the rate of P18.00 per dozen of tailored clothing materials. Only petitioners allegedly insisted that they be paid the minimum wage and other benefits. The NLRC held petitioners guilty of abandonment of work and accordingly dismissed their claims except that for 13th month pay. The dispositive portion of its decision reads: WHEREFORE, in view of the foregoing, the appealed decision is hereby vacated and a new one entered ordering respondents to pay each of the complainants their 13th month pay in the amount of P4,992.00. All other monetary awards are hereby deleted. SO ORDERED. 3 Petitioners allege that they were dismissed by private respondents as they were about to file a petition with the Department of Labor and Employment (DOLE) for the payment of benefits such as Social Security System (SSS) coverage, sick leave and vacation leave. They deny that they abandoned their work.

on the part of the employee to discontinue employment. 10 Mere absence is not sufficient. It must be accompanied by manifest acts unerringly pointing to the fact that the employee simply does not want to work anymore. 11 Private respondents failed to discharge this burden. Other than the self-serving declarations in the affidavits of their two employees, private respondents did not adduce proof of overt acts of petitioners showing their intention to abandon their work. On the contrary, the evidence shows that petitioners lost no time in filing the case for illegal dismissal against private respondent. This fact negates any intention on their part to sever their employment relationship. 12 Abandonment is a matter of intention; it cannot be inferred or presumed from equivocal acts. 13 Third. Private respondents invoke the compromise agreement, 14 dated March 2, 1993, between them and petitioner Avelino Lambo, whereby in consideration of the sum of P10,000.00, petitioner absolved private respondents from liability for money claims or any other obligations. To be sure, not all quitclaims are per se invalid or against public policy. But those (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person or (2) where the terms of settlement are unconscionable on their face are invalid. In these cases, the law will step in to annul the questionable transaction. 15 However, considering that the Labor Arbiter had given petitioner Lambo a total award of P94,719.20, the amount of P10,000.00 to cover any and all monetary claims is clearly unconscionable. As we have held in another case, 16 the subordinate position of the individual employee vis-a-vis management renders him especially vulnerable to its blandishments, importunings, and even intimidations, and results in his improvidently waiving benefits to which he is clearly entitled. Thus, quitclaims, waivers or releases are looked upon with disfavor for being contrary to public policy and are ineffective to bar claims for the full measure of the workers legal rights. 17 An employee who is merely constrained to accept the wages paid to him is not precluded from recovering the difference between the amount he actually received and that amount which he should have received. Fourth. The Labor Arbiter awarded backwages, overtime pay, holiday pay, 13th month pay, separation pay and attorneys fees, corresponding to 10% of the total monetary awards, in favor of petitioners. As petitioners were illegally dismissed, they are entitled to reinstatement with backwages. Considering that petitioners were dismissed from the service on January 17, 1989, i.e., prior to March 21, 1989, 18 the Labor Arbiter correctly applied the rule in the Mercury Drug case, 19 according to which the recovery of backwages should be limited to three years without qualifications or deductions. Any award in excess of three years is null and void as to the excess. 20 The Labor Arbiter correctly ordered private respondents to give separation pay. Considerable time has lapsed since petitioners dismissal, so that reinstatement would now be impractical and hardly in the best interest of the parties. In lieu of reinstatement, separation pay should be awarded to petitioners at the rate of one month salary for every year of service, with a fraction of at least six (6) months of service being considered as one (1) year. 21 The awards for overtime pay, holiday pay and 13th month pay are in accordance with our finding that petitioners are regular employees, although paid on a piece-rate basis. 22 These awards are based on the following computation of the Labor Arbiter: AVELINO LAMBO

64.00/day x 26 days = = P59,904.00

1,664.00/mo. x 36 mos. 13th Mo. Pay: P1,664.00/yr. x 3 yrs. = II.

4,992.00 P64,896.00

OVERTIME PAY: Jan. 17/86 - Jan. 17/89

Jan. 17/86 - April 30/87 = 15 mos. & 12 day = (15 mos. x 26 days + 12 days) = 402 days *2 hours = 25% 402 days x 2 hrs./days = 804 hrs. P 32.00/day 8 hrs. = =

4.00/hr. x 25%

1.00/hr. + P4.00/hr. = 5.00/hr. x 804 hrs. = 4,020.00

May 1/87 - Sept. 30/87 = 4 mos. & 26 days = (4 mos. x 26 days + 26 days) = 130 days 130 days x 2 hrs./day = 260 hrs. P 41.00/day 8 hrs. = =

5.12/hr. x 25%

1.28/hr. + P5.12/hr. = 6.40/hr. x 260 hrs. = P1,664.00 =

Oct. 1/87 - Dec. 13/87 = 2 mos. & 11 days (2 mos. x 26 days + 11 days) = 63 days I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos. 63 days x 2 hrs./day = 126 hrs.

41.00/day x 30% P 49.00/day 8 hrs. = 1.53/hr. + P6.12/hr. = = 12.30/day x 3 days 6.12/hr. x 25%

= = 36.90 159.90

Oct. 1/87 - Dec. 13/87 = 1 RH 7.65/hr. x 126 hrs. = P963.90 P Dec. 14/87 - Jan. 17/89 = 13 mos. & 2 days = 98.00/day x 1 day (13 mos. x 26 days + 2 days) = 340 days 49.00/day x 1 day 340 days x 2 hrs./day = 680 hrs. P 64.00/day 8 hrs. = P 2.00/hr. + P8.00/hr 10.00/hr. x 680 hrs. III. = 128.00/day x 9 days = P1,152.00 = P6,800.00 P13,447.90 64.00/day x 9 days HOLIDAY PAY: Jan. 17/86 - Jan. 17/89 64.00/day x 30% Jan. 17/86 - April 30/87 = 12 RHs; 8 SHs 19.20/day x 8 days P 32.00/day x 200% = 64.00/day x 12 days = 768.00 IV. 32.00/day x 12 days = (384.00) P384.00 P 32.00/day x 30% 9.60/day x 8 days P1,664.00/mo. x 6 yrs. May 1/87 - Sept. 30/87 = 3 RHs; 3 SHs P 41.00/day x 200% = 246.00 ======== 41.00/day x 3 days = (123.00) P123.00 VICENTE BELOCURA = TOTAL AWARD OF AVELINO LAMBO 82.00/day 3 days P94,719.20 = 9,984.00 = 1,664.00/yr. x 3 yrs. = = 76.80 460.80 V. SEPARATION PAY: Sept. 10/85 - Jan. 17/92 = 6 yrs. 4,992.00 64.00/day x 26 days = 13TH MO. PAY: Jan. 17/86 - Jan. 17/89 = 3 yrs. = 153.60 729.60 1,399.30 = = (576.00) P576.00 64.00/day x 200% = = Dec. 14/87 - Jan. 17/89 = 9 RHs; 8 SHs 8.00/hr. x 25% = (49.00) 49.00 = P98.00 49.00/day x 200% =

= P191,102.40 I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos. ADD: 10% Attorney's Fees Same computation as A. Lambo P64,896.00 II. OVERTIME PAY: Jan. 17/86 - Jan. 17/89 GRAND TOTAL Same computation as A. Lambo 13,447.90 ========= III. HOLIDAY PAY: Jan. 17/86 - Jan. 17/89 Except for the award of attorneys fees in the amount of P19,110.24, the above computation is affirmed. The award of attorneys fees should be disallowed, it appearing that petitioners were represented by the Public Attorneys Office. With regard to petitioner Avelino Lambo, the amount of P10,000.00 paid to him under the compromise agreement should be deducted from the total award of P94,719.20. Consequently, the award to each petitioner should be as follows: AVELINO LAMBO V. SEPARATION PAY: March 3/85 - Jan. 17/92 = 7 yrs. P1,664.00/mo. x 7 yrs. = II. OVERTIME PAY TOTAL AWARD OF VICENTE BELOCURA ========= IV. 13TH MONTH PAY 4,992.00 4,992.00 SUMMARY V. SEPARATION PAY 9,984.00 11,648.00 AVELINO LAMBO I. BACKWAGES II. OVERTIME PAY III. HOLIDAY PAY IV. 13TH MO. PAY VICENTE BELOCURA P P64,896.00 13,447.90 13,447.90 1,399.30 1,399.30 TOTAL 4,992.00 4,992.00 GRAND TOTAL V. SEPARATION PAY 9,984.00 11,648.00 ========= TOTAL P96,383.20 WHEREFORE, the decision of the National Labor Relations Commission is SET ASIDE and another one is RENDERED ordering private respondents to pay petitioners the total amount of One Hundred Eighty-One Thousand One Hundred Two Pesos and 40/100 (P181,102.40), as computed above.1wphi1.nt. SO ORDERED. P181,102.40 P84,719.20 P96,383.20 P64,896.00 Less 10,000.00 94,719.20 P96,383.20 III. HOLIDAY PAY 1,399.30 1,399.30 13,447.90 13,447.90 11,648.00 I. BACKWAGES P64,896.00 P64,896.00 VICENTE BELOCURA P210,212.64 19,110.24

Same computation as A. Lambo 1,399.30 IV. 13TH MO. PAY: Jan. 17/86 - Jan. 17/89

Same computation as A. Lambo 4,992.00

P94,719.20

G.R. No. 116593

September 24, 1997

PULP AND PAPER, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND EPIFANIA ANTONIO, respondents.

In charging the [herein petitioner] of underpayment of wages, complainant in the same position paper alleges that, rarely during her employment with the respondent she received her salary, a salary which was in accordance with the minimum wage law. She was not paid overtime pay, holiday pay and five-day service incentive leave pay, hence she is claiming for payments thereof by instituting the present case. Respondent on the otherhand [sic] denied having terminated the services of the complainant and alleges inter alia that starting 1989 the orders from customers became fewer and dwindled to the point that it is no longer practical to maintain the present number of packer/wrappers. Maintaining the same number of packers/wrappers would mean less pay because the work allocation is no longer the same as it was. Such being the case, the respondent has to reduce temporarily the number of packers/wrappers. Complainant was among those who were temporarily laidoff from work. Complainant last worked with the company on June 29, 1991. As regards complainant's allegation that on November 29, 1991, she was forced to sign a quitclaim and release by the respondent, the latter clarified that considering that five months from the time the complainant last worked with the company, the management decided to release the complainant and give her a chance to look for another job in the meantime that no job is available for her with the company. In other words, complainant was given the option and considering that she did not sign the documents referred to as the Quitclaim and Release, the respondent did not insist, and did not terminate the services of the complainant. It was just surprise [sic] to receive the present complaint. In fact, respondent added that the reason why the complainant was called on November 29, 1991 was not to work but to receive her 13th month pay of P636.70 as shown by the voucher she signed (Annex-A, Respondent). As regards the claim of the complainant for underpayment, respondent did not actually denied (sic) the same but give [sic] the reservation that should the same be determined by this Office it is willing to settle the same considering the fact that complainant herein being paid by results, it is not in a proper position to determine whether the complainant was underpaid or not. The Issues Petitioner couched the main issue in this wise: 8

PANGANIBAN, J.: In the absence of wage rates specially prescribed for piece-rate workers, how should the separation pay and salary differential of such workers be computed? Statement of the Case This is the main question raised in the instant petition for certiorari, filed under Rule 65 of the Rules of Court, to set aside and annul National Labor Relations Commission's 1 Decision 2 promulgated on September 24, 1993 and Resolution 3 dated December 16, 1993 in NLRC NCR CA No. 004041-92. 4 Public respondent's assailed Decision affirmed in toto Labor Arbiter Eduardo J. Carpio's decision 5 dated October 6, 1992, which disposed thus: 6 IN VIEW OF ALL THE FOREGOING, judgement [sic] is hereby rendered: 1. dismissing the complaint for illegal dismissal for lack of merit;

2. ordering respondent Pulp and Papers Distributors Inc. to pay complainant Efipania (sic) Antonio the sum of P49.088.00 representing her separation pay; and 3. wages. 4. ordering respondent to pay the complainant the sum of P31,149.56 representing the underpayment of

dismissing all other issues far lack of merit. Did the Public Respondent NLRC act correctly in affirming in toto the decision rendered by the labor arbitration branch a quo in NLRC NCR Case no. 00-01-00494-92? While it expressly admits that private respondent is entitled to separation pay, petitioner raises nonetheless the following queries: "(a) Are the factors in determining the amount of separation pay for a 'piece-rate worker' the same as that of a 'time-worker'? (b) Is a worker, who was terminated for lack of work, entitled to separation pay at the rate of one-month's pay for every year of service?" 9 The petition is based on the following "grounds": I Public Respondent NLRC committed grave abuse of discretion and serious reversible error when it affirmed in toto the award of separation pay in favor of private respondent, without bases in fact and in law. II

The assailed Resolution denied petitioner's motion for reconsideration for lack of merit. The Facts The facts as found by the labor arbiter are as follows: 7 A case of illegal dismissal and underpayment of wages [was] filed by MS. EPIFANIA ANTONIO [private respondent herein] against PULP AND PAPER DISTRIBUTORS INC., [petitioner herein] . . . . In filing the present complaint, complainant in her position paper alleges that she was a regular employee of the . . . corporation having served thereat as Wrapper sometime in September 1975. On November 29, 1991, for unknown reasons, she was advised verbally of her termination and was given a prepared form of Quitclaim and Release which she refused to sign. Instead she brought the present complaint for illegal dismissal.

Public Respondent NLRC committed grave abuse of discretion and serious reversible error when it affirmed in toto the award of underpayment in favor of private respondent, without bases in fact and in law. The Public Respondent's Ruling In dismissing the appeal of petitioner, public respondent reasoned: 10 It is true that all the above circumstances cited by the [herein petitioner] are not present in the case at bar, hence, separation pay based on those circumstances is not owing to the [herein private respondent]. However, it is quite obvious that [petitioner] missed the legal and factual basis why separation pay was awarded by the Labor Arbiter. In the first place, the [petitioner] admits that the complainant-appellee was temporarily laid off on June 29, 1991. This means that there was a temporary suspension of employer-employee relationship between the appellant and the appellee. Lay-off is a temporary termination initiated by the employer, but without prejudice to the reinstatement or recall of the workers who have been temporarily separated. The reasons for laying off employees are varied: lack of work, shutdown for repairs, business reverses, and the like. Always, however, there is the expectation that the employees who have been laid off will be recalled or rehired. This situation is governed by Rule I, Section 12, of Book VI of the Implementing Rules and Regulations of the Labor Code, which provides: Sec. 12. Suspension of Relationship. The employer-employee relationship shall be deemed suspended in case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months .... From June 29, 1991 up to the time the complainant-appellee filed her complaint on January 21, 1992, there was more than six (6) months that already elapse (sic) and yet, the appellant failed to recall the appellee to let her resume working. If the appellant was not yet in a possession to recall or reinstate the appellee after six (6) months, up to when shall appellant let her keep in waiting. Of course, she cannot be allowed to wait interminably. That is the reason why the law imposes a period of six (6) months within which the resumption of employer-employee relationship must be resumed in temporary lay-offs. Otherwise, any employer can, in the guise of a temporary layoff, close its doors to an employee for more than six months and their claim that the lay-off has ripened into termination and try to get away from any liability. The award of separation pay is hereby declared in order. On the second issue raised by the (petitioner) on appeal, We are also for the Labor Arbiter's ruling upholding the appellee's right to salary differential in the amount computed. The argument interposed by the [petitioner] based on Art. 101 of the Labor Code, in relation to Rule VII, Section (8), Book III of the Omnibus Implementing Rule and Regulations, will not lie in the case at bar. In the first place, pursuant to the provision of law cited by the [petitioner], all time and motion studies, or any other schemes or devices to determine whether the employees paid by results are being compensated in accordance with the minimum wage requirements, shall only be approved on petition of the interested employer. Thus, it is the fault of the [petitioner] on whose initiative, a time and motion study or any other similar scheme is not yet available in its establishment. The Court's Ruling The appeal is not meritorious. First Issue: Computation of Minimum Wage

Petitioner argues that private respondent was a piece-rate worker and not a time-worker. Since private respondent's employment as "(p)acker/(w)rapper" in 1975 until her separation on June 29, 1991, "(h)er salary depended upon the number of 'reams of bond paper' she packed per day." Petitioner contends that private respondent's work "depended upon the number and availability of purchase orders from customers." Petitioner adds that, oftentimes, "packers/wrappers only work three to four hours a day." Thus, her separation pay "must be based on her latest actual compensation per piece or on the minimum wage per piece as determined by Article 101 of the Labor Code, whichever is higher, and not on the daily minimum wage applicable to time-workers." 11 Compensation of Pieceworkers In the absence of wage rates based on time and motion studies determined by the labor secretary or submitted by the employer to the labor secretary for his approval, wage rates of piece-rate workers must be based on the applicable daily minimum wage determined by the Regional Tripartite Wages and Productivity Commission. To ensure the payment of fair and reasonable wage rates, Article 101 12 of the Labor Code provides that "the Secretary of Labor shall regulate the payment of wages by results, including pakyao, piecework and other nontime work." The same statutory provision also states that the wage rates should be based, preferably, on time and motion studies, or those arrived at in consultation with representatives of workers' and employers' organizations. In the absence of such prescribed wage rates for piece-rate workers, the ordinary minimum wage rates prescribed by the Regional Tripartite Wages and Productivity Boards should apply. This is in compliance with Section 8 of the Rules Implementing Wage Order Nos. NCR-02 and NCR-02-A the prevailing wage order at the time of dismissal of private respondent, viz: 13 Sec. 8. Workers Paid by Results. a) All workers paid by results including those who are paid on piece work, takay, pakyaw, or task basis, shall receive not less than the applicable minimum wage rates prescribed under the Order for the normal working hours which shall not exceed eight (8) hours work a day, or a proportion thereof for work of less than the normal working hours. The adjusted minimum wage rates for workers paid by results shall be computed in accordance with the following steps: 1) 2) 3) Amount of increase in AMW x 100 = % increase Previous AMW Existing rate/piece x % increase = increase in rate/piece; Existing rate/piece + increase in rate/piece = adjusted rate/piece.

b) The wage rates of workers who are paid by results shall continue to be established in accordance with Art. 101 of the Labor Code, as amended and its implementing regulations. (Emphasis supplied.) On November 29, 1991, private respondent was orally informed of the termination of her employment. Wage Order No. NCR-02, in effect at the time, set the minimum daily wage for non-agricultural workers like private respondent at P118.00. 14 This was the rate used by the labor arbiter in computing the separation pay of private respondent. We cannot find any abuse of discretion, let alone grave abuse, in the order of the labor arbiter which was later affirmed by the NLRC.

Moreover, since petitioner employed piece-rate workers, it should have inquired from the secretary of labor about their prescribed specific wage rates. In any event, there being no such prescribed rates, petitioner, after consultation with its workers, should have submitted for the labor secretary's approval time and motion studies as basis for the wage rates of its employees. This responsibility of the employer is clear under Section 8, Rule VII, Book III of the Omnibus Rules Implementing the Labor Code: Sec. 8. Payment by result. (a) On petition of any interested party, or upon its initiative, the Department of Labor shall use all available devices, including the use of time and motion studies and consultations with representatives of employers' and workers' organizations, to determine whether the employees in any industry or enterprise are being compensated in accordance with the minimum wage requirements of this Rule. (b) The basis for the establishment of rates for piece, output or contract work shall be the performance of an ordinary worker of minimum skill or ability. (c) An ordinary worker of minimum skill or ability is the average worker of the lowest producing group representing 50% of the total number of employees engaged in similar employment in a particular establishment, excluding learners, apprentices and handicapped workers employed therein. (d) Where the output rates established by the employer do not conform with the standards prescribed herein, or with the rates prescribed by the Department of Labor in an appropriate order, the employees shall be entitled to the difference between the amount to which they are entitled to receive under such prescribed standards or rates and that actually paid them by employer. In the present case, petitioner as the employer unquestionably failed to discharge the foregoing responsibility. Petitioner did not submit to the secretary of labor a proposed wage rate based on time and motion studies and reached after consultation with the representatives from both workers' and employers' organization which would have applied to its piece-rate workers. Without those submissions, the labor arbiter had the duty to use the daily minimum wage rate for non-agricultural workers prevailing at the time of private respondent's dismissal, as prescribed by the Regional Tripartite Wages and Productivity Boards. Put differently, petitioner did not take the initiative of proposing an appropriate wage rate for its piece-rate workers. In the absence of such wage rate, the labor arbiter cannot be faulted for applying the prescribed minimum wage rate in the computation of private respondent's separation pay. In fact, it acted and ruled correctly and legally in the premises. It is clear, therefore, that the applicable minimum wage for an eight-hour working day is the basis for the computation of the separation pay of piece-rate workers like private respondent. The computed daily wage should not be reduced on the basis of unsubstantiated claims that her daily working hours were less than eight. Aside from its bare assertion, petitioner presented no clear proof that private respondent's regular working day was less than eight hours. Thus, the labor arbiter correctly used the full amount of P118.00 per day in computing private respondent's separation pay. We agree with the following computation: 15 Considering therefore that complainant had been laid-off for more than six (6) months now, we strongly feel that it is already reasonable for the respondent to pay the complainant her separation pay of one month for every year of service, a fraction of six (6) months to be considered as one whole year. Separation pay should be computed based on her minimum salary as will be determined hereunder. Separation pay 1 month = 16 years P118.00 x 26 x 16 years = P49,088.00

The amount "P118.00" represents the applicable daily minimum wage per Wage Order Nos. NCR-02 and NCR-02-A; "26", the number of working days in a month after excluding the four Sundays which are deemed rest days; "16", the total number of years spent by private respondent in the employ of petitioner. Second Issue: Computation of Separation Pay

Petitioner questions not only the basis for computing private respondent's monthly wage; it also contends that private respondent's separation pay should not have been computed at one month's pay for every year of service. Because private respondent should be considered retrenched, the separation pay should be "one month's pay or at least one/half (1/2) month pay for every year of service, whichever is higher, and not one (1) month's pay for every year of service as public respondent had ruled." 16 Petitioner misapprehended the ground relied upon by public respondent for awarding separation pay. In this case, public respondent held that private respondent was constructively dismissed, pursuant to Article 286 of the Labor Code which reads: Art. 286. When employment not deemed terminated. The bonafide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later that one (1) month from his resumption of operations of his employer or from his relief from the military or civic duty. Petitioner failed to discern that public respondent, in finding that the services of private respondent were terminated, merely adopted by analogy the rule on constructive dismissal. Since private respondent was not reemployed within six (6) months from the "suspension" of her employment, she is deemed to have been constructively dismissed. 17 Otherwise, private respondent will remain in a perpetual "floating status." Because petitioner had not shown by competent evidence any just cause for the dismissal of private respondent, she is entitled to reinstatement 18 or, if this is not feasible, to separation pay equivalent to one (1) month salary for every year of service. Private respondent, however, neither asked for reinstatement 19 nor appealed from the labor arbiter's finding that she was not illegally dismissed; she merely prayed for the grant of her monetary claims. Thus, we sustain the award of separation pay made by public respondent, 20 for employees constructively dismissed are entitled to separation pay. Because she did not ask for more, we cannot give her more. We repeat: she appealed neither the decision of the labor arbiter nor that of the NLRC. Hence, she is not entitled to any affirmative relief. Furthermore, we cannot sustain petitioner's claim that private respondent was retrenched. For retrenchment to be considered a ground for termination, the employer must serve a written notice on the workers and the Department of Labor and Employment at least one month before the intended date thereof. 21 Petitioner did not comply with this requirement. Third Issue: Determination of Salary Differential

In light of the foregoing discussion, we must also dismiss petitioner's challenge to the computation of salary differential. As earlier observed, private respondent is entitled to the minimum wage prevailing at the time of the termination of her employment. The same rate of minimum wage, P118.00, should be used in computing her salary differential resulting from petitioner's underpayment of her wages. Thus, the labor arbiter correctly deducted private respondent's actually received wage of P60 a day from the prescribed daily minimum wage of P118.00, and

multiplied the difference by 26 working days, and subsequently by 16 years, equivalent to her length of service with petitioner. Thus, the amount of P31,149.56 as salary differential. 22 Petitioner argues that "the work of the private respondent is seasonal, being dependent upon the availability of joborders" and not "twenty-six (26) days a month." 23 Further, petitioner contends that private respondent herself admitted she was "a piece worker whose work [was] seasonal." 24 Contrary to the assertion of petitioner, neither the assailed Decision nor the pleadings of private respondent show that private respondent's work was seasonal. More important, petitioner utterly failed to substantiate its allegation that private respondent's work was seasonal. We observe that the labor arbiter based the computation of the salary differential on a 26-day month on the presumption that private respondent's work was continuous. In view of the failure of petitioner to support its claim, we must sustain the correctness of this computation. WHEREFORE, premises considered, the petition is DISMISSED and the assailed Decision is AFFIRMED. Costs against petitioner. SO ORDERED G.R. No. 123825 August 31, 1999

On 11 October 1992 private respondents sought the assistance of a labor organization which helped them organize the Mark Roche Workers Union (MRWU). On 14 October 1992 they registered the union with the Department of Labor and Employment National Capital Region (DOLE-NCR) and on the same date filed a Petition for Certification Election before the Med-Arbitration Board. On 27 October 1992 petitioners received a notice of hearing of the petition. Apparently irked by the idea of a union within the company, petitioners ordered private respondents to withdraw the petition and further threatened them that should they insist in the organization of a union they would be dismissed. Unfazed, private respondents refused. As expected, on 29 October 1992 they were discharged from work. On 30 October 1992 private respondents amended their earlier complaints to include as additional causes of action their illegal dismissal, unfair labor practice, non-payment of 13th month pay, underpayment for legal holidays, and for damages. Petitioners countered that private respondents were not dismissed from work but voluntarily abandoned their jobs thereby paralyzing company operations. Petitioners likewise contended that private respondents incurred numerous absences without prior notice and clearance from their superiors as evidenced by several company memos sent to them. Only Divina Villarba showed up and told petitioners that she was voluntary resigning because she had found better employment elsewhere. It was only later that petitioners learned that private respondents' absences were due to their preoccupation with the organization of a labor union. Notwithstanding these absences, petitioners expressed their willingness to reinstate private respondents within a reasonable time. They however disclaimed knowledge of any deficiency owing to private respondents since all the benefits due them as required by law were fully paid, except overtime pay which they were not entitled to on account of their being piece-rate workers. On 3 March 1993 the Labor Arbiter rendered his decision declaring as illegal the constructive dismissal of private respondents. Petitioners were thus ordered to immediately reinstate private respondents as sewers and to pay each of them his (a) back wages computed from 29 October 1992 to 31 March 1993 in the amount of P15,524.08 subject to adjustments until reinstated but not to exceed three (3) years; (b) proportionate share in the 13th month pay for the period January to October 1992 in the amount of P2,538.77; unpaid five (5) days service incentive leave pay for 1989, 1990 and 1991 in the amount of P1,565.00; and, (c) wage differentials in the amount of P24,707.38. On appeal the NLRC affirmed the reinstatement of private respondents and the payment of back wages, salary differentials and proportionate 13th month pay but set aside the award of service incentive leave pay on the ground that private respondents were not entitled thereto as they were piece-rate workers. Petitioners moved for reconsideration but was denied for lack of merit. Petitioners now contend that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in sustaining the Labor Arbiter by declaring private respondents as having been constructively dismissed from their jobs, hence, illegal. On the contrary, they argue that private respondents voluntarily abandoned their jobs without justifiable reason nor prior notice. The NLRC disregarded the company memos addressed to each of the private respondents which were indicative of their intention to leave the company and showed their propensity to incur frequent absences in violation of company rules and regulations. Abandonment, as a just and valid ground for dismissal, means the deliberate and unjustified refusal of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal intent on the part of

MARK ROCHE INTERNATIONAL AND/OR EDUARDO DAYOT and SUSAN DAYOT, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, MARK ROCHE WORKERS UNION and WILMA PATACAY, EILEEN RUFON, LILIA BRIONES, BEATRIZ MANAGAYTAY, DELIA ARELLANO, ANITA MARCELO, RIO MARIANO, MARISSA SADILI, ESTRELLA MALLARI, DELIA LAROYA, and DIVINA VILLARBA, respondents.

BELLOSILLO, J.: This is a special civil action under Rule 65 of the Rules of Court to nullify the 14 August 1995 Decision of the National Labor Relations Commission which affirmed with modification the Decision of Labor Arbiter Eduardo J. Carpio. The Labor Arbiter held that private respondents were illegally constructively dismissed and ordered petitioners to reinstate them and pay them back wages as well as their proportionate 13th month pay, service incentive leave pay and salary differentials. The NLRC set aside the award of incentive leave pay. Petitioners Eduardo Dayot and Susan Dayot were President and Vice President, respectively, of their co-petitioner Mark Roche International (MRI), a corporation organized and existing under the laws of the Philippines, engaged in the garments business. Private respondents Eileen Rufon, Lilia Briones, Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano, Marissa Sadili, Wilma Patacay, Estella Mallari, Delia Laroya and Divina Villarba were employed as sewers of MRI with lengths of service varying from three (3) to nine (9) years. On different dates private respondents filed separate complaints for underpayment of wages and non-payment of overtime pay against petitioners MRI, Eduardo Dayot and Susan Dayot. Private respondents alleged that they usually worked eleven (11) to twelve (12) hours daily, except on Mondays during which they worked eight (8) hours, and were paid wages on a piece-rate basis amounting to P450.00 to P600.00 per week. They likewise asserted that sometime in 1992 they were unable to avail of their SSS benefits, e.g., salary loan, sickness benefits and maternity benefits because, as they found out, the company did not remit their contributions to the SSS.

the employee to discontinue employment. The intent cannot be lightly inferred or legally presumed from certain ambivalent acts. There must be a concurrence of both the intention to abandon and some overt act from which it can be deducted that the employee has no more intention to resume his work.1 These are not obtaining in the instant case. No overt act was established by petitioners from which to infer the clear intention of private respondents to desist from their employment. The company memos submitted by petitioner could not be the basis of such intention since they referred to absences incurred by private respondents long before their dismissal. The lack of proximity of those absences to the actual dismissal rendered them unreliable; even worthless. Moreover, as correctly found by the NLRC, it was unlikely that private respondents had abandoned their jobs considering their lengths of service in the company and the difficulty in finding similar employment. In addition, if they had truly forsaken their jobs, they would not have bothered to file a complaint for constructive dismissal against petitioners immediately after they were dismissed and prayed for their reinstatement. An employee who forthwith takes steps to protest his layoff cannot by any logic be said to have abandoned his work.2 On the contrary, there is ample proof showing that private respondents were dismissed from their jobs for their refusal to withdraw their petition for certification election filed before the DOLE. However, it must be made clear here that the dismissal of private respondents was not a constructive dismissal but an illegal dismissal, and this is where both the NLRC and the Labor Arbiter erred. Constructive dismissal or a constructive discharge has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and; a diminution in pay.3 In the instant case, private respondents were not demoted in rank nor their pay diminished considerably. They were simply told without prior warning or notice that there was no more work for them. After receiving the notice of hearing of the petition for certification election on 27 October 1992, petitioners immediately told private respondents that they were no longer employed. Evidently it was the filing of the petition for certification election and organization of a union within the company which led petitioners to dismiss private respondents and not petitioners' allegations of absence or abandonment by private respondents. The formation of a labor union has never been a ground for valid termination, and where there is an absence of clear, valid and legal cause, the law considers the termination illegal.4 Petitioners likewise contend that the NLRC acted with grave abuse of discretion in granting private respondents reinstatement with payment of back wages. They argue that reinstatement can no longer be effected in view of the lapse of a considerable period of time from the dismissal of private respondents in October 1992 to the time the order for reinstatement was released. As for the award of back wages, they assert that it is capricious and arbitrary since it only encourages indolence and promotes enrichment of private respondents at the expense of petitioners. The award of reinstatement and back wages belongs to an illegally dismissed employee by direct provision of law and cannot be defeated by mere allegations of inconvenience, inconceivability or implausibility. Article 279 of the Labor Code provides that an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages from the time his compensation was withheld from him up to the time of his actual reinstatement. Back wages are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal.5 Petitioners are however given the alternative of paying separation pay to illegally dismissed employees where reinstatement is no longer possible. Petitioners further aver that the NLRC likewise abused its discretion when it affirmed the Labor Arbiter's ruling that private respondents were not paid their money claims. They insist that they have already paid private respondents all the amounts and benefits due them and that had the Labor Arbiter conducted trial on the merits, they could have presented documents proving their claim to be true.

The decision of the Labor Arbiter not to schedule the case for another hearing could not be considered arbitrary. The holding of a hearing is discretionary with the Labor Arbiter and is something which the parties cannot demand as a matter of right.6 It is entirely within the bounds of the Labor Arbiter's authority to decide a case based on mere position papers and supporting documents without a formal trial or hearing. The requirements of due process are satisfied when the parties are given the opportunity to submit position papers wherein they are supposed to attach all the documents that would prove their claim in case it be decided that no hearing should be conducted or was necessary. In case of employees' money claims, the employer bears the burden to prove that employees have received their wages and benefits and that the same were paid in accordance with law. It is incumbent upon the employer to present the necessary documents to prove such claims. In their position paper, petitioners failed to present necessary documentary evidence to substantiate their allegation that private respondents' money claims were fully paid. They cannot use the absence of trial as an excuse for their failure as they could have presented documentary evidence at any time before the Labor Arbiter and, on appeal, before the NLRC. Hence, they cannot at this late stage bewail that they were not afforded due process. Finally, as correctly held by the NLRC, private respondents as piece-rate employees are not entitled to service incentive leave pay as well as holiday pay even if they are entitled to other benefits like COLA and 13th month pay. Service incentive leave pay shall not apply to employees whose performance is unsupervised by the employer, including those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof.7 WHEREFORE, this Court finds that private respondents Eileen Rufon, Lilia Briones, Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano, Marissa Sadili, Wilma Patacay, Estrella Malari, Delia Laroya and Divina Villarba were illegally dismissed not merely illegally constructively dismissed by petitioners Mark Roche International and/or Eduardo Dayot and Susan Dayot, and to this extent, the assailed Decision of public respondent National Labor Relations Commission affirming that of the Labor Arbiter, is MODIFIED. However, it is AFFIRMED insofar as it ordered the reinstatement of private respondents with back wages, salary differentials and 13th month pay. The service incentive leave pay awarded by the Labor Arbier but deleted by the National Labor Relations Commission is likewise DELETED.1wphi1.nt SO ORDERED G.R. No. 182072 June 19, 2013

UNIVAC DEVELOPMENT, INC., Petitioner, vs. WILLIAM M. SORIANO, Respondent. DECISION PERALTA, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Com1 of Appeals (CA) Decision1 dated October 24, 2007 and Resolution2 dated March 14, 2008 in CA-G.R. SP No. 96495. The assailed decision granted the petition filed by respondent William M. Soriano against petitioner Univac

Development, Inc. and, consequently, nullified and set aside the April 28, 20063 and July 31, 20064 Resolutions of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 046028-05 (NLRC NCR Case No. 00-02-0166405); while the assailed resolution denied petitioner's motion for reconsideration. The case stemmed from the Complaint5 for Illegal Dismissal filed by respondent against petitioner, the companys Chairperson Sadamu Watanabe (Watanabe), and the Head of the Engineering Department Johnny Castro (Castro). Admittedly, respondent was hired on August 23, 2004 by petitioner on probationary basis as legal assistant of the company with a monthly salary of P15,000.00.6 Respondent claimed that on February 15, 2005, or eight (8) days prior to the completion of his six months probationary period, Castro allegedly informed him that he was being terminated from employment due to the companys cost-cutting measures. He allegedly asked for a thirty-day notice but his termination was ordered to be effective immediately.8 Thus, he was left with no choice but to leave the company.9 Petitioner, on the other hand, denied the allegations of respondent and claimed instead that prior to his employment, respondent was informed of the standards required for regularization. Petitioner also supposedly informed him of his duties and obligations which included safekeeping of case folders, proper coordination with the companys lawyers, and monitoring of the status of the cases filed by or against the company.10 Petitioner recalled that on January 5, 2005, a company meeting was held where respondent allegedly expressed his intention to leave the company because he wanted to review for the bar examinations. It was also in that meeting where he was informed of his unsatisfactory performance in the company. Thus, when respondent did not report for work on February 16, 2005, petitioner assumed that he pushed through with his plan to leave the company.11 In other words, petitioner claimed that respondent was not illegally dismissed from employment, rather, he in fact abandoned his job by his failure to report for work. On July 29, 2005, Labor Arbiter (LA) Geobel A. Bartolabac rendered a Decision12 dismissing respondents complaint for lack of merit. The LA held that respondent was informed of his unsatisfactory performance. As a law graduate and a masters degree holder, respondent was presumed to know that his probationary employment would soon end. Considering, however, that respondent was dismissed from employment eight days prior to the end of his probationary period, he was entitled to eight days backwages. In the end, though, the LA held that respondents complaint for constructive dismissal did not match his narration of actual dismissal from employment, thus, a clear evidence that there was indeed no illegal dismissal.13 On appeal, the NLRC affirmed the LA decision in its entirety in its Resolution14 dated April 28, 2006. Citing respondents educational background and knowledge of the laws, he was presumed to know prior to employment the reasonable standards required for regularization. The tribunal also gave credence to petitioners claim that a company meeting was held and that respondent was apprised of his unsatisfactory performance. Hence, petitioner was found to have validly exercised management prerogative when it terminated respondents probationary employment.15 Claiming that said decision never reached him because his manifestation of change of address was belatedly integrated with the record of the case,16 respondent thus filed his motion for reconsideration but was likewise denied in a Resolution17 dated July 31, 2006. The resolution became final and executory on August 24, 2006 and was entered in the Book of Entries of Judgment.18 On October 13, 2006, respondent elevated the matter to the CA via special civil action for certiorari under Rule 65 of the Rules of Court. On October 24, 2007, respondent was able to obtain a favorable decision when the CA granted his petition, the dispositive portion of which reads:

WHEREFORE, finding petitioner to have been illegally dismissed from work, the petition is hereby GRANTED and the assailed resolutions of the NLRC dated April 28, 2006 and July 31, 2006 are hereby NULLIFIED and SET ASIDE. Private respondent UNIVAC Development, Inc. is hereby ORDERED to pay petitioner his full backwages computed from February 15, 2005 until finality of this decision. Respondent UNIVAC is also ORDERED to pay petitioner separation pay in lieu of reinstatement in the amount of P15,000.00 multiplied by his years in service counted from August 23, 2004 until finality of this decision, as well as attorneys fees of P10,000.00 SO ORDERED.19 The CA gave more credence to respondents claim that he was illegally dismissed rather than petitioners theory of abandonment. Contrary to the LA and NLRC conclusions, the appellate court held that petitioner failed to apprise respondent of the standards required for regularization, coupled with the fact that it failed to make an evaluation of his performance, making his dismissal illegal. Petitioners employment of another person to replace respondent on the day of the alleged abandonment was taken by the appellate court against petitioner as it negates the claim of abandonment. In sum, the CA considered respondents dismissal from employment illegal because he was not informed of the standards required for regularization; petitioner failed to show proof that respondents performance was poor and unsatisfactory constituting a just cause for termination; and that the evidence presented negates petitioners claim that respondent abandoned his job. As a consequence of the illegal dismissal, the CA awarded respondent backwages, separation pay in lieu of reinstatement and attorneys fees.20 Aggrieved, petitioner comes before the Court raising both procedural and substantive errors, to wit: UNIVAC RESPECTFULLY SUBMITS THAT THE HONORABLE COURT OF APPEALS (CA), IN RENDERING ITS ASSAILED DECISION PROMULGATED ON 24 OCTOBER 2007 AND RESOLUTION OF 14 MARCH 2008: (A) DECIDED IN A WAY NOT IN ACCORD WITH LAW OR WITH APPLICABLE JURISPRUDENCE RENDERED BY THIS HONORABLE COURT, AND/OR HAS SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION VESTED IN THIS HONORABLE COURT. THIS IS PARTICULARLY TRUE WHEN THE CA GRANTED THE PETITION OF SORIANO EVEN IF THE RULINGS OF THE NLRC ALREADY ATTAINED FINALITY AND WAS IN FACT ENTERED IN THE LATTERS BOOK OF ENTRIES OF JUDGMENT, and WHEN THE CA WENT OVERBOARD BEYOND THE NARROW SCOPE AND INFLEXIBLE CHARACTER OF CERTIORARI UNDER RULE 65 (Tichangco v. Enriquez, G.R. No. 150629, 30 June 2004) BY NOT LIMITING ITSELF IN DETERMINING THE EXISTENCE OF GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION ON THE PART OF THE NLRC. (B) COMMITTED SERIOUS ERRORS OF LAW IN THE FINDING OF FACTS OR CONCLUSIONS OF LAW WHICH, IF NOT CORRECTED, WOULD CAUSE GRAVE AND IRREPARABLE DAMAGE OR INJURY TO UNIVAC AS SHOWN IN THE FOLLOWING: 1) THE CA IN EFFECT RULED OF THE PRESENCE OF ACTUAL DISMISSALL (SIC) WHEN WHAT WAS FILED IS CONSTRUCTIVE ILLEGAL DISMISSAL. 2) THE CA REVERSED THE FINDINGS OF THE NLRC IN SPITE OF SUBSTANTIAL EVIDENCE TO SUPPORT ITS (NLRC) RULINGS (PT & T v. NLRC, 183 SCRA 451 [1990]; Mateo v. Moreno, 28 SCRA 796 [1969]).

3) THE CA FAILED TO CONSIDER THE FACT THAT UNIVAC IS NOW UNDER REHABILITATION WHERE ANY AND ALL CLAIMS AGAINST IT SHOULD BE SUSPENDED PURSUANT TO THE RULING IN PAL vs. ZAMORA, G.R. NO. 166996, 06 FEBRUARY 2007.21 The petition is without merit. Under Article 223 of the Labor Code, the decision of the NLRC becomes final and executory after the lapse of ten calendar days from receipt thereof by the parties. However, the adverse party is not precluded from assailing the decision via petition for certiorari under Rule 65 of the Rules of Court before the CA and then to this Court via a petition for review under Rule 45.22 Thus, contrary to the contention of petitioner, there is no violation of the doctrine of immutability of judgment when respondent elevated the matter to the CA which the latter consequently granted. The power of the CA to review NLRC decisions has already been thoroughly explained and clarified by the Court in several cases,23 to wit: The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission. This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine of Batas Pambansa Blg. 129 as amended, known as the Judiciary Reorganization Act of 1980), the Court of Appeals pursuant to the exercise of its original jurisdiction over Petitions for Certiorari is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues.24 We agree with petitioner that in a special civil action for certiorari, the issues are confined to errors of jurisdiction or grave abuse of discretion. In exercising the expanded judicial review over labor cases, the Court of Appeals can grant the petition if it finds that the NLRC committed grave abuse of discretion by capriciously, whimsically, or arbitrarily disregarding evidence which is material or decisive of the controversy which necessarily includes looking into the evidence presented by the parties.25 In other words, the CA is empowered to evaluate the materiality and significance of the evidence which is alleged to have been capriciously, whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence on record.26 The CA can grant a petition when the factual findings complained of are not supported by the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the findings of the NLRC contradict those of the LA; and when necessary to arrive at a just decision of the case.27 Thus, contrary to the contention of petitioner, the CA can review the finding of facts of the NLRC and the evidence of the parties to determine whether the NLRC gravely abused its discretion in finding that there was no illegal dismissal against respondent.28 Now on the main issue of whether respondent was illegally dismissed from employment by petitioner.1wphi1 Article 281 of the Labor Code and its Implementing Rules describe probationary employment and set the guidelines to be followed by the employer and employee, to wit:29 Art. 281. Probationary Employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when

he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. LABOR CODE, Implementing Rules of Book VI, Rule I, Section 6 Sec. 6. Probationary employment. There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement. Probationary employment shall be governed by the following rules: xxxx (c) The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer. (d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. It is undisputed that respondent was hired as a probationary employee.1wphi1 As such, he did not enjoy a permanent status. Nevertheless, he is accorded the constitutional protection of security of tenure which means that he can only be dismissed from employment for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known to him by the employer at the time of his engagement.30 It is primordial that at the start of the probationary period, the standards for regularization be made known to the probationary employee.31 In this case, as held by the CA, petitioner failed to present adequate evidence to substantiate its claim that respondent was apprised of said standards. It is evident from the LA and NLRC decisions that they merely relied on surmises and presumptions in concluding that respondent should have known the standards considering his educational background as a law graduate. Equally important is the requirement that in order to invoke "failure to meet the probationary standards" as a justification for dismissal, the employer must show how these standards have been applied to the subject employee. In this case, aside from its bare allegation, it was not shown that a performance evaluation was conducted to prove that his performance was indeed unsatisfactory. Indeed, the power of the employer to terminate a probationary employee is subject to three limitations, namely: (1) it must be exercised in accordance with the specific requirements of the contract; (2) the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and (3) there must be no unlawful discrimination in the dismissal.32 In this case, not only did petitioner fail to show that respondent was apprised of the standards for regularization but it was likewise not shown how these standards had been applied in his case. Pursuant to well-settled doctrine, petitioners failure to specify the reasonable standards by which respondents alleged poor performance was evaluated as well as to prove that such standards were made known to him at the

start of his employment, makes respondent a regular employee. In other words, because of this omission on the part of petitioner, respondent is deemed to have been hired from day one as a regular employee.33 To justify the dismissal of an employee, the employer must, as a rule, prove that the dismissal was for a just cause and that the employee was afforded due process prior to dismissal.34 We find no reason to depart from the CA conclusion that respondents termination from employment is without just and valid ground. Neither was due process observed, making his termination illegal. He is, therefore, entitled to the twin relief of reinstatement and backwages granted under the Labor Code.35 However, as aptly held by the CA, considering the strained relations between petitioner and respondent, separation pay should be awarded in lieu of reinstatement. This Court has consistently ruled that if reinstatement is no longer feasible, backwages shall be computed from the time of illegal dismissal until the date the decision becomes final.36 Separation pay, on the other hand, is equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six months being considered as one whole year),37 computed from the time of employment or engagement up to the finality of the decision.38 Having been forced to litigate in order to seek redress of his grievances, respondent is entitled to the payment of attorneys fees equivalent to 10% of his monetary award.39 Pursuant to prevailing jurisprudence, legal interest shall be imposed on the monetary awards herein granted at the rate of 6% per annum from date of termination until full payment.40 One final point. Petitioner claims that the instant case is covered by the stay order issued by the rehabilitation court in a rehabilitation case it earlier filed. The Court, however, takes judicial notice that in Asiatrust Development Bank v. First Aikka Development, Inc.,41 docketed as G.R. No. 179558, this Court rendered a decision on June 1, 2011 dismissing the petition for rehabilitation filed by petitioner before the R TC of Baguio City, Branch 59, for lack of jurisdiction. Petitioner cannot, therefore, rely on the orders issued by said court relative to its alleged rehabilitation. WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated October 24, 2007 and Resolution dated March 14, 2008 in CA-G.R. SP No. 96495, are AFFIRMED with MODIFICATION. Petitioner Univac Development, Inc. is liable to pay respondent William M. Soriano the following: (1) backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the date of his dismissal up to the finality of this decision; (2) separation pay in lieu of reinstatement equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six months being considered as one whole year), computed from the time of his employment or engagement up to the finality of the decision; (3) attorney's fees equivalent to 10% of the monetary awards; and (4) interest at 6% per annum from date of termination until full payment. SO ORDERED. G.R. No. L-63316 July 31, 1984

The Solicitor General for respondent Deputy Minister. Abad, Legayada & Associates for private respondent. GUERRERO, J.: This is a petition for certiorari seeking to set aside the Order of the Deputy Minister of Labor and Employment, affirming the Order of the Regional Director, National Capital Region, in Case No. NCR-STF-5-2851-81, which dismissed the petitioners' complainant for alleged illegal dismissal and unpaid commission. Petitioners were employed by the private respondent GENERAL TELEPHONE DIRECTORY COMPANY as sales representatives and charged with the duty of soliciting advertisements for inclusion in a telephone directory. The records show that petitioners Iluminada Ver Buiser and Ma. Mercedes P. Intengan entered into an "Employment Contract (on Probationary Status)" on May 26, 1980 with private respondent, a corporation engaged in the business of publication and circulation of the directory of the Philippine Long Distance Telephone Company. Petitioner Ma. Cecilia Rillo-Acuna entered into the same employment contract on June 11, 1980 with the private respondent. Among others, the "Employment Contract (On Probationary Status)" included the following common provisions: l. The company hereby employs the employee as telephone representative on a probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. It is understood that darung the probationary period of employment, the Employee may be terminated at the pleasure of the company without the necessity of giving notice of termination or the payment of termination pay. The Employee recognizes the fact that the nature of the telephone sales representative's job is such that the company would be able to determine his true character, conduct and selling capabilities only after the publication of the directory, and that it takes about eighteen (18) months before his worth as a telephone saw representative can be fully evaluated inasmuch as the advertisement solicited by him for a particular year are published in the directory only the following year. Corollary to this, the private respondent prescribed sales quotas to be accomplished or met by the petitioners. Failing to meet their respective sales quotas, the petitioners were dismissed from the service by the private respondent. The records show that the private respondent terminated the services of petitioners Iluminada Ver Buiser and Cecilia Rillo-Acuna on May 14, 1981 and petitioner Ma. Mercedes P. Intengan on May 18, 1981 for their failure to meet their sales quotas. Thus, on May 27, 1981, petitioners filed with the National Capital Region, Ministry of Labor and Employment, a complaint for illegal dismissal with claims for backwages, earned commissions and other benefits, docketed as Case No. NCR-STF-5-2851-81. The Regional Director of said ministry, in an Order dated September 21, 1982, dismissed the complaints of the petitioners, except the claim for allowances which private respondent was ordered to pay. A reconsideration of the Order was sought by the petitioners in a motion filed on September 30, 1982. This motion, however, was treated as an appeal to the Minister of Labor.

ILUMINADA VER BUISER, MA. CECILIA RILLOACUA and MA. MERCEDES P. INTENGAN, petitioners, vs. HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of the Ministry of Labor & Employment, and GENERAL TELEPHONE DIRECTORY, CO., respondents. Jimenez, Apolo & Leynes Law Office for petitioners.

On appeal, Deputy Minister Vicente Leogardo, Jr. of the Ministry of Labor issued an Order dated January 7, 1983, affirming the Regional Director's Order dated September 21, 1982, wherein it ruled that the petitioners have not attained permanent status since private respondent was justified in requiring a longer period of probation, and that the termination of petitioners' services was valid since the latter failed to meet their sales quotas. Hence, this petition for certiorari on the alleged ground that public respondent committed grave abuse of discretion amounting to lack of jurisdiction. Specifically, petitioners submit that: 1. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that the probationary employment of petitioners herein is eighteen (18) months instead of the mandated six (6) months under the Labor Code, and in consequently further ruling that petitioners are not entitled to security of tenure while under said probation for 18 months. 2. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioners were dismissed for a just and valid cause. 3. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioners are not entitled to the commissions they have earned and accrued during their period of employment.

of the law; that this six months prescription of the Labor Code was mandated to give further efficacy to the constitutionally-guaranteed security of tenure of workers; and that the law does not allow any discretion on the part of the Minister of Labor and Employment to extend the probationary period for a longer period except in the aforecited instances. Finally, petitioners maintain that since they are regular employees, they can only be removed or dismissed for any of the just and valid causes enumerated under Article 283 of the Labor Code. We reject petitioners' contentions. They have no basis in law. Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is When the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, such as in the present case where the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills, experience or training. Policy Instruction No. 11 of the Minister of Labor and Employment has clarified any and all doubts on the period of probationary employment. It states as follows: Probationary Employment has been the subject of misunderstanding in some quarter. Some people believe six (6) months is the probationary period in all cases. On the other hand employs who have already served the probationary period are sometimes required to serve again on probation. Under the Labor Code, six (6) months is the general probationary period ' but the probationary period is actually the period needed to determine fitness for the job. This period, for lack of a better measurement is deemed to be the period needed to learn the job. The purpose of this policy is to protect the worker at the same time enable the employer to make a meaningful employee selection. This purpose should be kept in mind in enforcing this provision of the Code. This issuance shall take effect immediately. In the case at bar, it is shown that private respondent Company needs at least eighteen (18) months to determine the character and selling capabilities of the petitioners as sales representatives. The Company is engaged in advertisement and publication in the Yellow Pages of the PLDT Telephone Directories. Publication of solicited ads are only made a year after the sale has been made and only then win the company be able to evaluate the efficiency, conduct, and selling ability of its sales representatives, the evaluation being based on the published ads. Moreover, an eighteen month probationary period is recognized by the Labor Union in the private respondent company, which is Article V of the Collective Bargaining Agreement, ... thus: Probationary Period New employees hired for regular or permanent shall undergo a probationary or trial period of six (6) months, except in the cases of telephone or sales representatives where the probationary period shall be eighteen (I 8) months. And as indicated earlier, the very contracts of employment signed and acquiesced to by the petitioners specifically indicate that "the company hereby employs the employee as telephone sales representative on a probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. This stipulation is not contrary to law, morals and public policy.

Petitioners contend that under Articles 281-282 of the Labor Code, having served the respondent company continuously for over six (6) months, they have become automatically regular employees notwithstanding an agreement to the contrary. Articles 281-282 read thus: Art. 282. Probationary Employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it iscCovered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (As amended by PD 850). Art. 281. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceeding paragraph. Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (As amended by PD 850). It is petitioners' submission that probationary employment cannot exceed six (6) months, the only exception being apprenticeship and learnership agreements as provided in the Labor Code; that the Policy Instruction of the Minister of Labor and Employment nor any agreement of the parties could prevail over this mandatory requirement

We, therefore, hold and rule that the probationary employment of petitioners set to eighteen (18) months is legal and valid and that the Regional Director and the Deputy Minister of Labor and Employment committed no abuse of discretion in ruling accordingly. On the second assignment of error that public respondent committed grave abuse of discretion in ruling that petitioners were dismissed for a just and valid cause, this is not the first time that this issue has been raised before this Court. Earlier, in the case of "Arthur Golez vs. The National Labor Relations Commission and General Telephone Directory Co. "G.R. No. L-64459, July 25, 1983, the petition for certiorari which raised the same issue against the herein private respondent was dismissed by this Court for lack of merit. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. (Philippine American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639). In the case at bar, the petitioners' failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards availed of so long as they are exercised in good faith for the advancement of the employer's interest. Petitioners anchor their claim for commission pay on the Collective Bargaining Agreement (CBA) of September 1981, in support of their third assignment of error. Petitioners cannot avail of this agreement since their services had been terminated in May, 1981, at a time when the CBA of September, 1981 was not yet in existence. In fine, there is nothing in the records to show any abuse or misuse of power properly vested in the respondent Deputy Minister of Labor and Employment. For certiorari to lie, "there must be capricious, arbitrary and whimsical exercise of power, the very antithesis of the judicial prerogative inaccordance with centuries of both civil and common law traditions." (Panaligan vs. Adolfo, 67 SCRA 176, 180). The "abuse of discretion must be grave and patent, and it must be shown that the discretion was exercised arbitrarily or despotically." (Palma and Ignacio vs. Q. & S., Inc., et al., 17 SCRA 97, 100; Philippine Virginia Tobacco Administration vs. Lucero, 125 SCRA 337, 343). WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED G.R. No. 143252 October 23, 2003

Probationary employees need strong protection from the exploitation of employers since they are usually the lowliest of the lowly and the most vulnerable to abuses of management, who would rather suffer in silence than risk losing their jobs.1 At bar is a petition for review on certiorari seeking to reverse and set aside the Decision2 dated November 5, 1999 and Resolution3 dated April 18, 2000 of the Court of Appeals in CA-G.R. SP No. 54548, entitled "Cebu Marine Beach Resort, Ofelia Pelaez, and Tsuyoshi Sasaki vs. The Honorable National Labor Relations Commission (Fourth Division), Ric Rodrigo Rodriguez, Manulita Villegas, and Lorna G. Igot". The facts as borne by the records are: Cebu Marine Beach Resort (herein petitioner company), a single proprietorship owned by Victor Dualan, commenced its operations sometime in January, 1990 with the recruitment of its employees, including Ric Rodrigo Rodriguez, Manulita Villegas and Lorna G. Igot, respondents. On the last week of March, 1990 when Japanese tourists began arriving at the resort, petitioner company became fully operational. Inasmuch as the beach resort was intended to cater principally to Japanese tourists, respondents had to undergo a special training in Japanese customs, traditions, discipline as well as hotel and resort services. This special training was supervised by Tsuyoshi Sasaki, also a petitioner. During a seminar conducted on May 24, 1990, petitioner Sasaki suddenly scolded respondents and hurled brooms, floor maps, iron trays, fire hoses and other things at them. In protest, respondents staged a walk-out and gathered in front of the resort. Immediately, petitioner Sasaki reacted by shouting at them to go home and never to report back to work. Heeding his directive, respondents left the premises. Eventually, they filed with the Regional Arbitration Branch at Cebu City a complaint for illegal dismissal and other monetary claims against petitioners. On May 28, 1990, petitioner company, through its acting general manager, Ofelia Pelaez, also a petitioner, sent letters to respondents requiring them to explain why they should not be terminated from employment on the grounds of abandonment of work and failure to qualify with the standards for probationary employees. In due course, the Labor Arbiter rendered a Decision dated March 23, 1993 dismissing respondents complaint but directing them to immediately report back to work. On appeal, the National Labor Relations Commission (NLRC), in its Decision dated June 28, 1994, reversed the Labor Arbiters Decision, declaring that the respondents were dismissed illegally and ordering their reinstatement with payment of full backwages from May 24, 1990 up to their actual reinstatement or in lieu thereof, the payment of their respective separation pay (equivalent to one month salary) from May 24, 1990 up to the date they were supposed to be reinstated, as well as attorneys fees (equivalent to 10% of the total monetary award). On February 28, 1995, the NLRC issued a Resolution declaring that the backwages shall correspond only to the period from May 24, 1990 (the date of their dismissal) until March 23, 1993 (when they were ordered reinstated by the Labor Arbiter), subject to the deduction of their earnings from other sources during the pendency of the appeal.1awphi1.nt

CEBU MARINE BEACH RESORT, OFELIA PELAEZ AND TSUYOSHI SASAKI, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION), RIC RODRIGO RODRIGUEZ, MANULITO VILLEGAS and LORNA G. IGOT, respondents. DECISION SANDOVAL-GUTIERREZ, J.:

On March 22, 1995, petitioners filed with this Court a petition for certiorari, prohibition and injunction with prayer for the issuance of a temporary restraining order. Pursuant to our ruling in St. Martins Funeral Home vs. NLRC,4 we referred the petition to the Court of Appeals for its appropriate action and disposition. On November 5, 1999, the Court of Appeals rendered its Decision affirming with modification the Decision and Resolution of the NLRC. The dispositive portion reads: "WHEREFORE, the Decision, dated June 28, 1994, and the Resolution dated February 28, 1995, both issued by the public respondent, are hereby AFFIRMED with the following modifications: the backwages should be computed from the date of the dismissal of private respondents until the finality of this Decision without deduction from earnings during the pendency of the appeal and the award of separation pay must be equivalent to one-half months salary for every year of service commencing likewise on the date of the dismissal of private respondents until the finality of this Decision. The petition is dismissed. Costs against petitioners. "SO ORDERED." From the said Decision, petitioners filed a motion for reconsideration, but was denied. Hence, this petition for review on certiorari. Petitioners contend that the Appellate Court committed a serious error when it unilaterally extended the 6-month probationary employment contracts of the respondents by awarding them full backwages, or in lieu of their reinstatement, when it ordered payment of their separation pay computed from the time of their dismissal up to the finality of its Decision. The sole legal issue for our Resolution is whether respondents were illegally dismissed from employment by petitioner company. We hold that the Court of Appeals did not err when it ruled that respondents were illegally dismissed from the service. It is settled that while probationary employees do not enjoy permanent status, they are entitled to the constitutional protection of security of tenure. Their employment may only be terminated for just cause or when they fail to qualify as regular employees in accordance with reasonable standards made known to them by their employer at the time of engagement, and after due process.5 Here, petitioners terminated respondents probationary employment on the grounds of abandonment and failure to qualify for the positions for which they were employed. On this point, we quote with approval the findings of the Court of Appeals, thus: "x x x. It is undisputed that Mr. Sasaki made an utterance to the effect that private respondents should go home and never come back to work for the company again. Such utterance is tantamount to a dismissal. Its meaning is also clear and unmistakable no matter which accent was used by Mr. Sasaki. Considering further that Mr. Sasaki was in

charge of the training of the private respondents, his words carry authority and conviction. Even assuming for the sake of argument that Mr. Sasaki was never vested with the power of dismissal, the petitioner company ratified Mr. Sasakis acts. When petitioner company sent a strongly worded memorandum to private respondents asking them to explain why their services should not be terminated for failure to live up to the companys expectations, it showed intention to terminate. x x x: "x x x "The subsequent issuances of the memos were, as rightly interpreted by the public respondent, merely an afterthought to escape the legal liability arising from the illegal termination of the private respondents services. x x x: "x x x "The next three reasons adduced by the petitioners sought to prove the existence of a just cause for the dismissal of private respondents, which is, abandonment. We are not convinced. The fact that private respondents never came back to work despite the issuance of the memoranda by the petitioner does not support the allegation of abandonment. x x x." Indeed, we find no indication that respondents have shown by some overt acts their intention to sever their employment in petitioner company. To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship. Clearly, the operative factor is still the employers ultimate act of putting an end to his employment. Here, respondents did not report back for work because they were warned by petitioner Sasaki not to return. But immediately, they filed with the Labor Arbiters Office a complaint for illegal dismissal. It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with the charge of abandonment, for an employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work.6 That respondents failed to qualify for their positions, suffice it to state that at the time they were dismissed, they were still in a "trial period" or probationary period. Being in the nature of a "trial period," the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment which obviously were made known to him.7 To reiterate, in the case at bar, far from allowing the respondents to prove that they possessed the qualifications to meet the reasonable standards for their permanent employment, petitioners peremptorily dismissed them from the service. On another tack, petitioners argument that the Appellate Courts award of full backwages and separation pay in effect unilaterally extended respondents 6-month probationary employment is bereft of merit. In Philippine Manpower Services, Inc. vs. NLRC,8 we held that "absent the grounds for termination of a probationary employee, he is entitled to continued employment even beyond the probationary period." On a similar note, our ruling in Lopez vs. Javier9 is quite explicit, thus:

"x x x, probationary employees who are unjustly dismissed from work during the probationary period shall be entitled to reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed up to their actual reinstatement, conformably with Article 279 of the Labor Code, as amended by Section 34 of Republic Act No. 6715, which took effect on March 21, 1989: x x x An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement." Verily, respondents who were unjustly dismissed from work are actually entitled to reinstatement without loss of seniority rights and other privileges as well as to their full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time their compensation was withheld from them up to the time of their actual reinstatement.10 However, the circumstances obtaining in this case do not warrant the reinstatement of respondents. Antagonism caused a severe strain in the relationship between them and petitioner company. A more equitable disposition, as correctly held by the NLRC, would be an award of separation pay11 equivalent to at least one month pay, or one month pay for every year of service, whichever is higher,12 in addition to their full backwages, allowances and other benefits.1a\^/phi1.net WHEREFORE, the assailed Decision and Resolution of the Court of Appeals dated November 5, 1999 and April 18, 2000 are hereby AFFIRMED WITH MODIFICATION in the sense that, in lieu of reinstatement, respondents are awarded separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher; and their full backwages, other privileges and benefits, or their monetary equivalent during the period of their dismissal up to their supposed actual reinstatement. Costs against petitioners. SO ORDERED. G.R. No. 149859 June 9, 2004

The facts follow. Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with petitioners performance, respondent Middleby terminated petitioners services. The bone of contention centered on whether the termination occurred before or after the six-month probationary period of employment. The parties, presenting their respective copies of Alciras appointment paper, claimed conflicting starting dates of employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both documents indicated petitioners employment status as "probationary (6 mos.)" and a remark that "after five months (petitioners) performance shall be evaluated and any adjustment in salary shall depend on (his) work performance."6 Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, a senior officer of respondent Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a dismissal "after the lapse of his probationary employment," petitioner filed on November 21, 1996 a complaint in the National Labor Relations Commission (NLRC) against respondent Middleby contending that he had already become a regular employee as of the date he was illegally dismissed. Included as respondents in the complaint were the following officers of respondent Middleby: Frank Thomas (General Manager), Xavier Pea (Human Resources Manager) and Trifona Mamaradlo (Engineering Manager). In their defense, respondents claim that, during petitioners probationary employment, he showed poor performance in his assigned tasks, incurred ten absences, was late several times and violated company rules on the wearing of uniform. Since he failed to meet company standards, petitioners application to become a regular employee was disapproved and his employment was terminated. On May 19, 1998, the labor arbiter dismissed the complaint on the ground that: (1) respondents were able to prove that petitioner was apprised of the standards for becoming a regular employee; (2) respondent Mamaradlos affidavit showed that petitioner "did not perform well in his assigned work and his attitude was below par compared to the companys standard required of him" and (3) petitioners dismissal on November 20, 1996 was before his "regularization," considering that, counting from May 20, 1996, the six-month probationary period ended on November 20, 1996.7 On March 23, 1999, the NLRC affirmed the decision of the labor arbiter. On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC. According to the appellate court: Even assuming, arguendo, that petitioner was not informed of the reasonable standards required of him by Middleby, the same is not crucial because there is no termination to speak of but rather expiration of contract. Petitioner loses sight of the fact that his employment was probationary, contractual in nature, and one with a definite period. At the expiration of the period stipulated in the contract, his appointment was deemed terminated and a notice or termination letter informing him of the non-renewal of his contract was not necessary. While probationary employees enjoy security of tenure such that they cannot be removed except for just cause as provided by law, such protection extends only during the period of probation. Once that period expired, the constitutional protection could no longer be invoked. Legally speaking, petitioner was not illegally dismissed. His contract merely expired.8

RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES CORPORATION/FRANK THOMAS, XAVIER G. PEA and TRIFONA F. MAMARADLO, respondents. DECISION CORONA, J.: Before us on appeal is the decision1 of the Court of Appeals2 dated June 22, 2001 affirming the decision3 of the National Labor Relations Commission4 dated March 23, 1999 which, in turn, affirmed the decision5 of labor arbiter Pedro Ramos dated May 19, 1998 dismissing petitioner Radin Alciras complaint for illegal dismissal with prayer for reinstatement, backwages, moral damages, exemplary damages and attorneys fees.

Hence, this petition for review based on the following assignment of errors: I The Court of Appeals gravely erred, blatantly disregarded the law and established jurisprudence, in upholding the decision of the National Labor Relations Commission. II The Court of Appeals gravely erred and blatantly disregarded the law in holding that probationary employment is employment for a definite period. III The Court of Appeals gravely erred in holding that an employer can be presumed to have complied with its duty to inform the probationary employee of the standards to make him a regular employee. IV The Court of Appeals gravely erred and failed to afford protection to labor in not applying to the instant case the doctrine laid down by this Honorable Court in Serrano vs. NLRC, et. al., G.R. No. 117040, January 27, 2000.9 Central to the matter at hand is Article 281 of the Labor Code which provides that:

Petitioners contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et. al.,11 this Court dealt with the same issue of whether an employment contract from May 16, 1995 to November 15, 1995 was within or outside the six-month probationary period. We ruled that November 15, 1995 was still within the six-month probationary period. We reiterate our ruling in CALS Poultry Supply: (O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following.(italics supplied) In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to "regularize" him on November 20, 1996. The second issue is whether respondent Middleby informed petitioner of the standards for "regularization" at the start of his employment. Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of 1997) provides that: xxx xxx xxx

(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. xxx xxx xxx

ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the time of his alleged dismissal. We rule in the negative. Petitioner claims that under the terms of his contract, his probationary employment was only for five months as indicated by the remark "Please be informed that after five months, your performance shall be evaluated and any adjustment in salary shall depend on your work performance." The argument lacks merit. As correctly held by the labor arbiter, the appointment contract also stated in another part thereof that petitioners employment status was "probationary (6 mos.)." The five-month period referred to the evaluation of his work.10 Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. According to petitioners computation, since Article 13 of the Civil Code provides that one month is composed of thirty days, six months total one hundred eighty days. As the appointment provided that petitioners status was "probationary (6 mos.)" without any specific date of termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee.

We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after five months. In Orient Express Placement Philippines vs. National Labor Relations Commission,12 we ruled that an employer failed to inform an employee of the reasonable standards for becoming a regular employee: Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with NADRICO ever mentioned that he must first take and pass a Crane Operator's License Examination in Saudi Arabia before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman pending release of the results of the examination or in the event that he failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month after his hiring to determine whether the company was amenable to continuing with his employment. Hence, respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to commence upon his arrival at the work-site and to terminate at the end of one (1) year. No other condition was laid out except that he was to be on probation for three (3) months.(emphasis supplied) Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring. We agree with the labor arbiter when he ruled that: In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must satisfy in order to be converted into regular status. This rans (sic) counter to the agreement

between the parties that after five months of service the petitioners performance would be evaluated. It is only but natural that the evaluation should be made vis--vis the performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did not perform well in his assigned work and his attitude was below par compared to the companys standard required of him.13 The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment. It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement.14 But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission15 that this constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their contract of employment. Manlimos concluded that "(t)his development has rendered moot the question of whether there was a just cause for the dismissal of the petitioners xxx."16 In the case at bar, respondent Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary employment that it did not intend to grant him a regular status. Although we can regard petitioners severance from work as dismissal, the same cannot be deemed illegal. As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3) failed to wear the proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these substantiated allegations. Taking all this in its entirety, respondent Middleby was clearly justified to end its employment relationship with petitioner. WHEREFORE, the petition is hereby DENIED. No costs. SO ORDERED. G.R. No. 148738 June 29, 2004

Mitsubishi Motors Philippines Corporation (MMPC) is a domestic corporation engaged in the assembly and distribution of Mitsubishi motor vehicles. Chrysler Philippines Labor Union (CPLU) is a legitimate labor organization and the duly certified bargaining agent of the hourly-paid regular rank and file employees of MMPC. Nelson Paras was a member of CPLU. His wife, Cecille Paras, was the President of the Chrysler Philippines Salaried Employees Union (CPSU). Nelson Paras was first employed by MMPC as a shuttle bus driver on March 19, 1976. He resigned on June 16, 1982. He applied for and was hired as a diesel mechanic and heavy equipment operator in Saudi Arabia from 1982 to 1993. When he returned to the Philippines, he was re-hired as a welder-fabricator at the MMPC tooling shop from October 3, 1994 to October 31, 1994.2 On October 29, 1994, his contract was renewed from November 1, 1994 up to March 3, 1995.3 Sometime in May of 1996, Paras was re-hired on a probationary basis as a manufacturing trainee at the Plant Engineering Maintenance Department. He and the new and re-hired employees were given an orientation on May 15, 19964 by Emma P. Aninipot, respecting the companys history, corporate philosophy, organizational structure, and company rules and regulations, including the company standards for regularization, code of conduct and company-provided benefits.5 Paras started reporting for work on May 27, 1996. He was assigned at the paint ovens, air make-up and conveyors. As part of the MMPCs policy, Paras was evaluated by his immediate supervisors Lito R. Lacambacal6 and Wilfredo J. Lopez7 after six (6) months, and received an average rating. Later, Lacambacal informed Paras that based on his performance rating, he would be regularized.8 However, the Department and Division Managers, A.C. Velando and H.T. Victoria,9 including Mr. Dante Ong,10 reviewed the performance evaluation made on Paras. They unanimously agreed, along with Paras immediate supervisors, that the performance of Paras was unsatisfactory.11 As a consequence, Paras was not considered for regularization. On November 26, 1996, he received a Notice of Termination dated November 25, 1996, informing him that his services were terminated effective the said date since he failed to meet the required company standards for regularization.12 Utilizing the grievance machinery in the collective bargaining agreement, the CPLU demanded the settlement of the dispute which arose from Paras termination.13 The dispute was thereafter submitted for voluntary arbitration, as the parties were unable to agree on a mutually acceptable solution. CPLU posited that Paras was dismissed on his one hundred eighty third (183rd) day of employment, or three (3) days after the expiration of the probationary period of six (6) months. It was contended that Paras was already a regular employee on the date of the termination of his "probationary employment." According to CPLU and Paras, the latters dismissal was an offshoot of the heated argument during the CBA negotiations between MMPC Labor Relations Manager, Atty. Carlos S. Cao, on the one hand, and Cecille Paras, the President of the Chrysler Philippines Salaried Employees Union (CPSU) and Paras wife, on the other. On November 3, 1997, the Voluntary Arbitrator (VA) rendered a decision finding the dismissal of Paras valid for his failure to pass the probationary standards of MMPC. The dispositive portion of the decision reads: WHEREFORE, in view of all the foregoing, judgment is hereby rendered finding the termination of Mr. Paras was valid for cause his failure to pass the probationary period.14

MITSUBISHI MOTORS PHILIPPINES CORPORATION, petitioner, vs. CHRYSLER PHILIPPINES LABOR UNION and NELSON PARAS, respondents. DECISION CALLEJO, SR., J.: This is a petition for review on certiorari of the Decision1 of the Court of Appeals in CA-GR SP No. 46030 and the Resolution denying the motion for reconsideration filed by petitioner Mitsubishi Motors Philippines Corporation. The Antecedents

The VA declared that hiring an employee on a probationary basis to determine his or her fitness for regular employment was in accord with the MMPCs exercise of its management prerogative. The VA pointed out that MMPC had complied with the requirement of apprising Paras of the standards of performance evaluation and regularization at the inception of his probationary employment. The VA agreed with the MMPC that the termination of Paras employment was effected prior to the expiration of the six-month probationary period. As to Paras contention that he was already a regular employee before he was dismissed in 1994 considering that he had an accumulated service of eleven (11) months, the VA ruled that Paras delay in filing a complaint for regularization only in 1996, for services rendered in October 1994 to March 1995, militated against him. The VA stated that Paras dismissal was based on the unsatisfactory performance rating given to him by his direct supervisors Lito Lacambacal and Wilfredo Lopez. The VA also found that the alleged heated argument between Atty. Carlos S. Cao, the Labor Relations Manager of MMPC, and Cecille Paras, the President of CPSU, was irrelevant in the termination of Paras services.15 The Case Before the Court of Appeals Aggrieved, Paras and CPLU filed a petition for review under Rule 43 of the Rules of Court before the Court of Appeals, docketed as C.A.-G.R. SP No. 46030. They assigned the following errors: I THE VOLUNTARY ARBITRATOR COMMITTED A SERIOUS ERROR OF LAW IN FAILING TO HOLD THAT THE NOTICE OF TERMINATION WAS SERVED UPON PETITIONER NELSON PARAS AFTER HE HAS ALREADY BECOME A REGULAR EMPLOYEE, HIS PERIOD FOR PROBATION HAVING EXPIRED. II THE VOLUNTARY ARBITRATOR SERIOUSLY ERRED AND GRAVELY ABUSED HIS DISCRETION IN HOLDING THAT PETITIONER NELSON PARAS SUPPOSED DELAY IN FILING THE ILLEGAL DISMISSAL CASE WORKED AGAINST HIM. III THE VOLUNTARY ARBITRATOR ACTED WITH GRAVE ABUSE OF DISCRETION AND COMMITTED SERIOUS ERRORS OF FACT AND LAW IN NOT HOLDING THAT THE PERFORMANCE OF NELSON PARAS WAS SATISFACTORY AND THAT HIS DISMISSAL WAS POLITICALLY MOTIVATED.16 Therein, Paras and CPLU asserted that pursuant to Article 13 of the New Civil Code, the period of May 27, 1996 to November 26, 1996 consisted of one hundred eighty-three (183) days. They asserted that the maximum of the probationary period is six (6) months, which is equivalent to 180 days; as such, Paras, who continued to be employed even after the 180th day, had become a regular employee as provided for in Article 282 of the Labor Code. They averred that as a regular employee, Paras employment could be terminated only for just or authorized causes as provided for under the Labor Code, and after due notice. They posited that in the Letter of Termination dated November 25, 1996, the ground for Paras termination was not among those sanctioned by the Labor Code; hence, his dismissal was illegal. Paras and CPLU also stressed that he had already been in the employ of MMPC from October 3, 1994 to March 3, 1995 as a welder-fabricator in the production of jigs and fixtures, a function necessary and desirable to the usual

business of MMPC. Such period, in addition to the six-month probationary period, amounted to eleven (11) months of service, which is sufficient for him to be considered as a regular employee. Paras and CPLU averred that the filing of an illegal dismissal complaint only after his termination in 1996 did not make Paras claim for regularization specious, since an illegally dismissed employee, like him, has four (4) years within which to file a complaint.17 They emphasized that Paras performance evaluation was changed to unsatisfactory as an off-shoot of the arguments between the latters wife, the President of the CPSU, and Atty. Carlos S. Cao, one of MMPCs negotiators, over the provisions in the CBA.18 The MMPC, for its part, averred that under Article 13 of the New Civil Code, Paras probationary employment which commenced on May 27, 1996 would expire on November 27, 1996. Since he received the notice of termination of his employment on November 25, 1996, the same should be considered to have been served within the six-month probationary period. The MMPC asserted that the VA acted correctly in not considering the five-month period of Paras contractual employment as a welder-fabricator to qualify him for regularization. It argued that his rating showed that his immediate supervisors, in tandem with his department head, found his performance unsatisfactory. Thus, his failure to meet a satisfactory performance rating justified the termination of his probationary employment. For its part, the Office of the Solicitor General (OSG), in representation of Voluntary Arbitrator Danilo Lorredo, agreed that Parasand CPLUs allegation, that the notice of termination was served on Paras 183rd day, was erroneous. The OSG opined that the six-month probationary period was to expire on November 27, 1996 and since Paras was served such notice on November 25, 1996, his employment was deemed terminated within the six-month probationary period. It posited that the failure of Paras to get a satisfactory performance rating justified the termination of his probationary employment, and that the inclusion of his five-month contractual employment as welder-fabricator did not qualify him for regular employment. Finally, the OSG contended that the appointment of a probationary employee to a regular status is voluntary and discretionary on the part of the employer. In a Decision promulgated on September 13, 2000, the CA reversed the ruling of the Voluntary Arbitrator, the dispositive portion of which is herein quoted: WHEREFORE, the petition is GRANTED. The Decision of public respondent, dated November 3, 1997, is REVERSED and SET ASIDE. In lieu thereof, judgment is hereby entered declaring Mitsubishi Motors Phils. Corporations dismissal of Nelson Paras as ILLEGAL and ORDERING the former to reinstate Paras to his former position without loss of seniority rights and other privileges. Conformably with the latest pronouncement of the Supreme Court on backwages, supra, Mitsubishi Motors Phils. Corporation is further ORDERED to pay Paras full backwages (without qualifications or deductions), inclusive of allowances, and his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Petitioners claims for attorneys fees, moral and exemplary damages are, nevertheless, DENIED for lack of sufficient basis. No costs.19 The CA agreed with Paras and CPLUs interpretation that six (6) months is equivalent to one hundred eighty (180 days) and that computed from May 27, 1996, such period expired on November 23, 1996. Thus, when Paras

received the letter of termination on November 26, 1996, the same was served on the 183rd day or after the expiration of the six-month probationary period. The CA stated that since he was allowed to work beyond the probationary period, Paras became a regular employee. Hence, his dismissal must be based on the just and authorized causes under the Labor Code, and in accordance with the two-notice requirement provided for in the implementing rules. The appellate court concluded that for MMPCs failure to show that Paras was duly notified of the cause of his dismissal, the latter was illegally dismissed; hence, his actual reinstatement without loss of seniority rights and the payment of backwages up to the time of his reinstatement were in order. Dissatisfied, the MMPC filed a motion for reconsideration of the decision, alleging that the CA erred in holding that the six-month probationary period which commenced on May 27, 1996, expired on November 23, 1996. The MMPC contended that the reinstatement of Paras to his former position had become moot and academic because it had retrenched approximately seven hundred (700) employees as a result of its financial losses in 1997. It posited that the payment of full backwages should only be computed up to February 1998, the date when MMPC effected the first phase of its retrenchment program. The CA denied the motion in a Resolution dated June 18, 2001.20 The Present Petition Undaunted, the MMPC, now the petitioner, filed this instant petition, alleging as follows: A.

Oct(.) 1-31 = 1 month (30 days) Nov(.) 1-26 = 26 days22 Hence, according to the petitioner, when the termination letter was served on November 26, 1996, Paras was still a probationary employee. Considering that he did not qualify for regularization, his services were legally terminated. As such, the CA erred in ordering his reinstatement and the payment of his backwages. According to the petitioner, even assuming that respondent Paras was a regular employee when he was dismissed, his reinstatement had already become moot and academic because of the retrenchment program effected as a result of the business losses it had suffered in the year 1997. Respondent Paras, who was employed only in May 27, 1996, would have been included in the first batch of employees retrenched in February of 1998, in accordance with the "last in first out policy" embedded in the CBA. The petitioner further contends that Paras backwages should be computed only up to February of 1998. In their comment on the petition, the respondents argue that the CA was correct in concluding that the termination letter was served on respondent Paras one hundred eighty third (183rd) day of employment with the petitioner, asserting that six (6) months is equivalent to one hundred eighty (180) days. Since respondent Paras was employed on May 27, 1996, the 180th day fell on November 23, 1996. Thus, respondent Paras was already a regular employee when the termination letter was served on him. Consequently, his dismissal should be based on the just or authorized causes provided for by the Labor Code, and after proper notice. The respondents, likewise, contend that the petitioner cannot raise new and unsubstantiated allegations in its petition at bar. The Issues

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN REVERSING THE 3 NOVEMBER 1997 DECISION OF THE HONORABLE VA DANILO LORREDO, AND IN FINDING THAT RESPONDENT PARAS (WAS) ILLEGALLY DISMISSED AND ORDERING HIS REINSTATEMENT. B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ORDERING THE REINSTATEMENT OF PARAS WITH FULL BACKWAGES DESPITE THE CHANGE IN THE FINANCIAL CIRCUMSTANCES OF THE COMPANY. C. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE SIX-MONTH PROBATIONARY PERIOD OF PARAS WHICH STARTED ON 27 MAY 1996 HAD EXPIRED 23 NOVEMBER 1996.21 The petitioner asserts that the CA erred in ruling that respondent Paras was already a regular employee when he was served the notice of termination. Citing Article 13 of the New Civil Code, the petitioner argued that the sixmonth probationary period should be computed as follows: May 27-31 = Jun(e) 1-30 July 1-31 = Aug(.) 1-31= Sept(.) 1-30 4 days = 1 month (30 days) 1 month (30 days) 1 month (30 days) = 1 month (30 days)

The issues for resolution are the following: (a) whether or not respondent Paras was already a regular employee on November 26, 1996; (b) whether or not he was legally dismissed; (c) if so, whether or not his reinstatement had been rendered moot and academic; and, (d) whether or not his backwages should be computed only up to February of 1998. The Courts Ruling The petition is partially granted. At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on certiorari of CA decisions.23 Questions of fact are not entertained.24 This Court is not a trier of facts and, in labor cases, this doctrine applies with greater force. Factual questions are for labor tribunals to resolve.25 The findings of fact of quasi-judicial bodies like the National Labor Relations Commission (NLRC), are accorded with respect, even finality, if supported by substantial evidence.Particularly when passed upon and upheld by the Court of Appeals, such findings are binding and conclusive upon the Supreme Court and will not normally be disturbed.26 However, when the findings of the NLRC and the Court of Appeals are inconsistent with each other, there is a need to review the records to determine which of them should be preferred as more conformable to the evidentiary facts.27 Considering that the CAs findings of fact clash with those of the Voluntary Arbitrator, this Court is compelled to go over the records of the case, as well as the submissions of the parties.28 Regularization of Employment

Indeed, an employer, in the exercise of its management prerogative, may hire an employee on a probationary basis in order to determine his fitness to perform work.29 Under Article 281 of the Labor Code, the employer must inform the employee of the standards for which his employment may be considered for regularization. Such probationary period, unless covered by an apprenticeship agreement, shall not exceed six (6) months from the date the employee started working. The employees services may be terminated for just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him.30 Respondent Paras was employed as a management trainee on a probationary basis. During the orientation conducted on May 15, 1996, he was apprised of the standards upon which his regularization would be based. He reported for work on May 27, 1996. As per the companys policy, the probationary period was from three (3) months to a maximum of six (6) months. Applying Article 13 of the Civil Code,31 the probationary period of six (6) months consists of one hundred eighty (180) days.32 This is in conformity with paragraph one, Article 13 of the Civil Code, which provides that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. The number of months in the probationary period, six (6), should then be multiplied by the number of days within a month, thirty (30); hence, the period of one hundred eighty (180) days. As clearly provided for in the last paragraph of Article 13, in computing a period, the first day shall be excluded and the last day included. Thus, the one hundred eighty (180) days commenced on May 27, 1996, and ended on November 23, 1996. The termination letter dated November 25, 1996 was served on respondent Paras only at 3:00 a.m. of November 26, 1996. He was, by then, already a regular employee of the petitioner under Article 281 of the Labor Code. The Legality of The Dismissal An employee cannot be dismissed except for just or authorized cause as found in the Labor Code and after due process.33 The following grounds would justify the dismissal of an employee: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of the employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or of any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing.34 The basis for which respondent Paras services were terminated was his alleged unsatisfactory rating arising from poor performance. It is a settled doctrine that the employer has the burden of proving the lawfulness of his employees dismissal. The validity of the charge must be clearly established in a manner consistent with due process.35

Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Gross negligence has been defined to be the want or absence of even slight care or diligence as to amount to a reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.36 A careful perusal of the records of this case does not show that respondent Paras was grossly negligent in the performance of his duties. The company policy provides the following rule in performance evaluation: The performance rating sheet must be accomplished by the immediate supervisor, then reviewed by the Department Head, and concurred by the Division Head. The Personnel Manager likewise must note all submitted performance sheets. Once the rating sheet has gone through this standard procedure, the immediate supervisor shall discuss the results of the performance rating with the employee. The discussion/conference may be done in the presence of the Department Head. This is to emphasize the point that the employee is given due importance especially in matters pertaining to his development as a person and employee.37 In the present case, the immediate supervisor of respondent Paras gave him an average performance rating and found him fit for regularization.38 Thereafter, his immediate supervisor and the department head reviewed the said rating, which was duly noted by the personnel manager. However, in a complete turn around, the petitioner made it appear that after the performance evaluation of respondent Paras was reviewed by the department and division heads, it was unanimously agreed that the respondents performance rating was unsatisfactory, making him unfit for regularization. There is no showing that respondent Paras was informed of the basis for the volte face of the management group tasked to review his performance rating. His immediate supervisor even told him that he had garnered a satisfactory rating and was qualified for regularization, only to later receive a letter notifying him that his employment was being terminated. Considering that respondent Paras was not dismissed for a just or authorized cause, his dismissal from employment was illegal. Furthermore, the petitioners failure to inform him of any charges against him deprived him of due process. Clearly, the termination of his employment based on his alleged unsatisfactory performance rating was effected merely to cover up and "deodorize" the illegality of his dismissal. Reinstatement and Backwages The normal consequences of illegal dismissal are reinstatement without loss of seniority rights and the payment of backwages computed from the time the employees compensation was withheld from him.39 Since respondent Paras dismissal from employment is illegal, he is entitled tore instatement and to be paid backwages from the time of his dismissal up to the time of his actual reinstatement. The petitioner asserts that assuming respondent Paras was illegally dismissed, his reinstatement had become moot and academic because of its retrenchment program which was effected beginning February 1998. The petitioner posits that even if respondent Paras had become a regular employee by November 26, 1996, he would have been included in the first phase of its retrenchment program, pursuant to the "last in first out policy" embedded in the CBA. Hence, the petitioner concludes, the payment of backwages should be computed up to February of 1998.

The respondents, for their part, aver that the petitioner is proscribed from alleging new circumstances and allegations of fact, particularly on financial reverses, before the Court of Appeals and the Voluntary Arbitrator. We do not agree with the respondents. A cursory examination of the records shows that the petitioner could not raise its retrenchment program as an issue before the VA, because it was implemented only in February 1998, when the case was already in the CA. However, we note that the petitioner did not raise the same in its comment to the petition. The petitioner asserted the matter only in its October 20, 2000 motion for reconsideration of the decision of the CA, where it alleged that the retrenchment program was effected to arrest the continuing business losses resulting from the financial reverses it experienced in 1997. Nevertheless, it is not denied that because of the petitioners losses, it retrenched seven hundred (700) employees. Business reverses or losses are recognized by law as an authorized cause for termination of employment. Still, it is an essential requirement that alleged losses in business operations must be proven convincingly. Otherwise, such ground for termination would be susceptible to abuse by scheming employers, who might be merely feigning business losses or reverses in their business ventures to ease out employees.40 Retrenchment is an authorized cause for termination of employment which the law accords an employer who is not making good in its operations in order to cut back on expenses for salaries and wages by laying off some employees. The purpose of retrenchment is to save a financially ailing business establishment from eventually collapsing.41 In this case, the petitioner submitted in the CA its financial statements for 1996, 1997 and 199842 as well as its application for retrenchment. In its Statements of Income and Unappropriated Retained Earning, it was shown that in 1996, the parent company of the petitioner had a net income of P467,744,285. In 1997, it had a net loss of P29,253,511.43 In 1998, its net loss, after effecting retrenchment and closing several plants, was arrested and dropped to P8,156,585.44 This shows that even after the retrenchment, the petitioner MMPC still suffered net losses. In 1996, the petitioners current assets amounted to P5,381,743,576; it increased to P8,033,932,74545 in 1997, while in 1998, it was reduced to P5,053,874,359.46 This shows that the petitioners assets acquired in 1997 diminished in 1998. The figures for Current Liabilities are consistent with the movement of current assets for 1997 and 1998. In 1996, the petitioner incurred current liabilities of P1,966,445,401 which increased to P5,088,990,11747 in 1997 and decreased to P2,880,259,81148 in 1998. To reduce its losses, the petitioner had to dispose of some of its current assets to cover the increased liability incurred in 1997, and had to resort to borrowings in 1998. The continuity of losses which started in 1997 is further illustrated in the figures on retained earnings for 1996, 1997 and 1998. In 1996, retained earnings stood at P1,838,098,175,49 which decreased to P994,942,62850 in 1997 and further decreased to P592,614,54851 in 1998. The petitioners losses in 1997 and 1998 are not insignificant. It is beyond cavil then, that the serious and actual business reverses suffered by the petitioner justified its resort to retrenchment of seven hundred (700) of its employees. The records show that the petitioner informed the Department of Labor and Employment of its plight and intention to retrench employees as a result of the shutdown of its plants.52 The termination of the five hundred thirty-one

(531) affected employees were made effective a month from receipt of the termination letter mailed on February 25, 1998.53 In accordance with the CBA between MMPC and CPLU, employees who were recently hired were the ones retrenched. Considering that respondent Paras had just been regularized on November 24, 1996, he would have been included among those who had been retrenched had he not been dismissed. The unfavorable financial conditions of the petitioner may not justify reinstatement. However, it is not a sufficient ground to deny backwages to respondent Paras who was illegally dismissed.54 Considering that notices of retrenchment were mailed on February 25, 1998 and made effective one month therefrom, respondent Paras should be paid full backwages from the date of his illegal dismissal up to March 25, 1998. Pursuant to Article 283 of the Labor Code, he should be paid separation pay equivalent to one (1) month salary, or to at least one-half month pay for every year of service, whichever is higher, a fraction of at least six months to be considered as one (1) year.55 IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The September 13, 2000 Decision of the Court of Appeals in CAGR SP No. 46030 is hereby AFFIRMED WITH MODIFICATIONS. The petitioner is ORDERED to pay respondent Nelson Paras separation pay equivalent to one (1) month, or to at least one-half (1/2) month pay for every year of service, whichever is higher, a fraction of at least six (6) months to be considered as one year; and to pay full backwages, computed from the time of his dismissal up to March 25, 1998. That portion of the decision of the Court of Appeals directing the reinstatement of the respondent Paras is DELETED. No costs. SO ORDERED. G.R. No. 161654 May 5, 2006

DUSIT HOTEL NIKKO, Petitioner, vs. RENATO M. GATBONTON, Respondent DECISION QUISUMBING, J.: This is a petition for review of the Decision1 dated September 22, 2003, and the Resolution2 dated January 9, 2004, of the Court of Appeals in CA-G.R. SP No. 73296, which reversed the Resolution3 dated September 24, 2001, of the National Labor Relations Commission (NLRC) in NLRC CA No. 025743-00. The facts are as follows: On November 21, 1998,4 respondent Renato M. Gatbonton was hired as Chief Steward in petitioner Dusit Hotel Nikkos Food and Beverage Department. He signed a three-month probationary employment contract until February 21, 1999,5 with a monthly salary of P25,000. At the start of his employment, the standards by which he would be assessed to qualify for regular employment were explained to him.

The hotel alleged that at the end of the probation period, Ingo Rauber, Director of its Food and Beverage Department, observed that Gatbonton failed to meet the qualification standards for Chief Steward, and Rauber recommended a two-month extension of Gatbontons probationary period, or until April 22, 1999. At the end of the 4th month, on March 24, 1999, Rauber informed Gatbonton that the latter had poor ratings on staff supervision, productivity, quantity of work, and overall efficiency and did not qualify as Chief Steward. Gatbonton requested another 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 the Memorandum on the extension. On March 31, 1999, a notice6 of termination of probationary employment effective April 9, 1999, on the above alleged grounds was served on Gatbonton. On April 12, 1999, he filed a complaint for illegal dismissal and nonpayment of wages, with prayers for reinstatement, full backwages, and damages, including attorneys fees. On July 10, 2000, the Labor Arbiterdisposed of the case as follows: WHEREFORE, PREMISES CONSIDERED, respondent Dusit Hotel Nikko is hereby ordered to reinstate upon promulgation of this decision, the herein complainant Renato Gatbonton to his former position as regular Chief Steward without loss of seniority rights and other benefits with full backwages from the time of his illegal dismissal on April 9, 1999 up to actual reinstatement or in the amount of P375,000 (P25,000 x 15 months or up to July 9, 2000) to be adjusted, plus ten percent (10%) attorneys fees. The same respondent is also ordered to pay complainants unpaid salaries within ten (10) days from receipt hereof. Complainants prayer for damages is hereby dismissed for lack of concrete evidence.

WHETHER OR NOT THE RESPONDENT WAS STILL A PROBATIONARY EMPLOYEE AT THE TIME OF HIS DISMISSAL; II WHETHER OR NOT THE RESPONDENT WAS VALIDLY DISMISSED ON THE GROUND OF FAILURE TO MEET THE STANDARDS OF SATISFACTORY PERFORMANCE MADE KNOWN TO HIM AT THE TIME OF HIS ENGAGEMENT; III WHETHER OR NOT *RESPONDENT+ IS ENTITLED TO REINSTATEMENT, BACKWAGES AND ATTORNEYS FEES; IV WHETHER OR NOT [RESPONDENT] HAS BEEN PAID HIS REMAINING SALARIES.9 Essentially, we must resolve two questions: (1) Was respondent a regular employee at the time of his dismissal? and (2) Was he validly terminated? As in previous cases, when we find arbitrariness and disharmony in the factual findings of the Labor Arbiter and the National Labor Relations Commission, we review the findings of fact and if errors are found, we will not hesitate to set aside such factual findings of these agencies. Here, Article 281 of the Labor Code is pertinent. It provides that:

SO ORDERED.7 The Labor Arbiter found that at the time of the respondents termination, he was already a regular employee. Further, there was no evidence that Gatbonton was assessed or evaluated by the petitioner during his three-month probationary employment; thus, he could not be dismissed for failure to meet the reasonable standards for his position. Aggrieved, the petitioner appealed to the National Labor Relations Commission (NLRC) which reversed the Labor Arbiters decision and declared the respondents dismissal legal. The NLRC noted that the Personnel Action Form showed respondents probationary employment was extended from February 24 to April 22, 1999. Hence, when he was terminated on April 9, 1999, he was still on probation. The respondent filed a petition for certiorari with the Court of Appeals contending that the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it reversed the decision of the Labor Arbiter. The respondent maintained: (1) that the petitioner failed to establish with substantial evidence that the respondents probationary employment was extended; (2) that the petitioner failed to establish that the alleged extension was formally communicated to the respondent during his probationary employment; and (3) that the petitioner failed to establish that the alleged extension was valid and legal.8 The appellate court granted the petition and reinstated the decision of the Labor Arbiter. The present petition is anchored on the following grounds: I ART. 281. Probationary Employment. -- Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. As Article 281 clearly states, a probationary employee can be legally terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the start of the employment.10 Nonetheless, the power of the employer to terminate an employee on probation is not without limitations. First, this power must be exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer.11 Here, the petitioner did not present proof that the respondent was evaluated from November 21, 1998 to February 21, 1999, nor that his probationary employment was validly extended. The petitioner alleged that at the end of the respondents three-month probationary employment, Rauber recommended that the period be extended for two months since respondent Gatbonton was not yet ready for regular employment.12 The petitioner presented a Personnel Action Form13 containing the recommendation. We

observed, however, that this document was prepared on March 31, 1999, the end of the 4th month of the respondents employment. In fact, the recommended action was termination of probationary employment effective April 9, 1999, and not extension of probation period.14 Upon appeal to the NLRC, the petitioner presented another Personnel Action Form15 prepared on March 2, 1999, showing that the respondents probationary employment was extended for two months effective February 23, 1999. The Personnel Action Form dated March 2, 1999, contained the following remarks: "subject to undergo extension of probation for two (2) months as per attached memo." Yet, we find this document inconclusive. First, the action form did not contain the results of the respondents evaluation. Without the evaluation, the action form had no basis. Second, the action form spoke of an attached memo which the petitioner identified as Raubers Memorandum, recommending the extension of the respondents probation period for two months. Again, the supposed Memorandum was not presented. Third, the action form did not bear the respondents signature. In the absence of any evaluation or valid extension, we cannot conclude that respondent failed to 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 in the law on labor relations that a probationary employee engaged to work beyond the probationary period of six months, as provided under Article 281 of the Labor Code, or for any length of time set forth by the employer (in this case, three months), shall be considered a regular employee.16 This is clear in the last sentence of Article 281. Any circumvention of this provision would put to naught the States avowed protection for labor. Since respondent was not dismissed for a just or authorized cause, his dismissal was illegal, and he is entitled to reinstatement without loss of seniority rights, and other privileges as well as to full 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 actual reinstatement. The petitioner presented copies of Check No. 000020095317 and the corresponding voucher18 in the amount of P6,095.19, to prove that the respondent had been paid his remaining unpaid salaries on May 26, 1999. We have no reason to disbelieve said payment, since the respondent failed to refute this matter before the Court of Appeals and before us. WHEREFORE, the instant petition for review is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 73296, which reversed the Resolution dated September 24, 2001 of the National Labor Relations Commission, is AFFIRMED WITH the MODIFICATION that the order for payment of unpaid salaries is DELETED. SO ORDERED. G.R. No. 183572 April 13, 2010

The petitioners Yolanda M. Mercado (Mercado), Charito S. De Leon (De Leon), Diana R. Lachica (Lachica), Margarito M. Alba, Jr. (Alba, Jr.,), and Felix A. Tonog (Tonog), all former faculty members of AMA Computer CollegeParaaque City, Inc. (AMACC) assail in this petition for review on certiorari1 the Court of Appeals (CA) decision of November 29, 20072 and its resolution of June 20, 20083 that set aside the National Labor Relations Commissions (NLRC) resolution dated July 18, 2005.4 THE FACTUAL ANTECEDENTS The background facts are not disputed and are summarized below. AMACC is an educational institution engaged in computer-based education in the country. One of AMACCs biggest schools in the country is its branch at Paraaque City. The petitioners were faculty members who started teaching at AMACC on May 25, 1998. The petitioner Mercado was engaged as a Professor 3, while petitioner Tonog was engaged as an Assistant Professor 2. On the other hand, petitioners De Leon, Lachica and Alba, Jr., were all engaged as Instructor 1.5 The petitioners executed individual Teachers Contracts for each of the trimesters that they were engaged to teach, with the following common stipulation:6 1. POSITION. The TEACHER has agreed to accept a non-tenured appointment to work in the College of xxx effective xxx to xxx or for the duration of the last term that the TEACHER is given a teaching load based on the assignment duly approved by the DEAN/SAVP-COO. [Emphasis supplied] For the school year 2000-2001, AMACC implemented new faculty screening guidelines, set forth in its Guidelines on the Implementation of AMACC Faculty Plantilla.7 Under the new screening guidelines, teachers were to be hired or maintained based on extensive teaching experience, capability, potential, high academic qualifications and research background. The performance standards under the new screening guidelines were also used to determine the present faculty members entitlement to salary increases. The petitioners failed to obtain a passing rating based on the performance standards; hence AMACC did not give them any salary increase.8 Because of AMACCs action on the salary increases, the petitioners filed a complaint with the Arbitration Branch of the NLRC on July 25, 2000, for underpayment of wages, non-payment of overtime and overload compensation, 13th month pay, and for discriminatory practices.9 On September 7, 2000, the petitioners individually received a memorandum from AMACC, through Human Resources Supervisor Mary Grace Beronia, informing them that with the expiration of their contract to teach, their contract would no longer be renewed.10 The memorandum11 entitled "Notice of Non-Renewal of Contract" states in full: In view of the expiration of your contract to teach with AMACC-Paranaque, We wish to inform you that your contract shall no longer be renewed effective Thirty (30) days upon receipt of this notice. We therefore would like to thank you for your service and wish you good luck as you pursue your career. You are hereby instructed to report to the HRD for further instruction. Please bear in mind that as per company policy, you are required to accomplish your clearance and turn-over all documents and accountabilities to your immediate superior.

YOLANDA M. MERCADO, CHARITO S. DE LEON, DIANA R. LACHICA, MARGARITO M. ALBA, JR., and FELIX A. TONOG, Petitioners, vs. AMA COMPUTER COLLEGE-PARAAQUE CITY, INC. , Respondent. DECISION BRION, J.:

For your information and guidance The petitioners amended their labor arbitration complaint to include the charge of illegal dismissal against AMACC. In their Position Paper, the petitioners claimed that their dismissal was illegal because it was made in retaliation for their complaint for monetary benefits and discriminatory practices against AMACC. The petitioners also contended that AMACC failed to give them adequate notice; hence, their dismissal was ineffectual.12 AMACC contended in response that the petitioners worked under a contracted term under a non-tenured appointment and were still within the three-year probationary period for teachers. Their contracts were not renewed for the following term because they failed to pass the Performance Appraisal System for Teachers (PAST) while others failed to comply with the other requirements for regularization, promotion, or increase in salary. This move, according to AMACC, was justified since the school has to maintain its high academic standards.13 The Labor Arbiter Ruling On March 15, 2002, Labor Arbiter (LA) Florentino R. Darlucio declared in his decision14 that the petitioners had been illegally dismissed, and ordered AMACC to reinstate them to their former positions without loss of seniority rights and to pay them full backwages, attorneys fees and 13th month pay. The LA ruled that Article 281 of the Labor Code on probationary employment applied to the case; that AMACC allowed the petitioners to teach for the first semester of school year 2000-200; that AMACC did not specify who among the petitioners failed to pass the PAST and who among them did not comply with the other requirements of regularization, promotions or increase in salary; and that the petitioners dismissal could not be sustained on the basis of AMACCs "vague and general allegations" without substantial factual basis.15 Significantly, the LA found no "discrimination in the adjustments for the salary rate of the faculty members based on the performance and other qualification which is an exercise of management prerogative."16 On this basis, the LA paid no heed to the claims for salary increases. The NLRC Ruling On appeal, the NLRC in a Resolution dated July 18, 200517 denied AMACCs appeal for lack of merit and affirmed in toto the LAs ruling. The NLRC, however, observed that the applicable law is Section 92 of the Manual of Regulations for Private Schools (which mandates a probationary period of nine consecutive trimesters of satisfactory service for academic personnel in the tertiary level where collegiate courses are offered on a trimester basis), not Article 281 of the Labor Code (which prescribes a probationary period of six months) as the LA ruled. Despite this observation, the NLRC affirmed the LAs finding of illegal dismissal since the petitioners were terminated on the basis of standards that were only introduced near the end of their probationary period. The NLRC ruled that the new screening guidelines for the school year 2000-20001 cannot be imposed on the petitioners and their employment contracts since the new guidelines were not imposed when the petitioners were first employed in 1998. According to the NLRC, the imposition of the new guidelines violates Section 6(d) of Rule I, Book VI of the Implementing Rules of the Labor Code, which provides that "in all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement." Citing our ruling in Orient Express Placement Philippines v. NLRC,18 the NLRC stressed that the rudiments of due process demand that employees should be informed beforehand of the conditions of their employment as well as the basis for their advancement.

AMACC elevated the case to the CA via a petition for certiorari under Rule 65 of the Rules of Court. It charged that the NLRC committed grave abuse of discretion in: (1) ruling that the petitioners were illegally dismissed; (2) refusing to recognize and give effect to the petitioners valid term of employment; (3) ruling that AMACC cannot apply the performance standards generally applicable to all faculty members; and (4) ordering the petitioners reinstatement and awarding them backwages and attorneys fees. The CA Ruling In a decision issued on November 29, 2007,19 the CA granted AMACCs petition for certiorari and dismissed the petitioners complaint for illegal dismissal. The CA ruled that under the Manual for Regulations for Private Schools, a teaching personnel in a private educational institution (1) must be a full time teacher; (2) must have rendered three consecutive years of service; and (3) such service must be satisfactory before he or she can acquire permanent status. The CA noted that the petitioners had not completed three (3) consecutive years of service (i.e. six regular semesters or nine consecutive trimesters of satisfactory service) and were still within their probationary period; their teaching stints only covered a period of two (2) years and three (3) months when AMACC decided not to renew their contracts on September 7, 2000. The CA effectively found reasonable basis for AMACC not to renew the petitioners contracts. To the CA, the petitioners were not actually dismissed; their respective contracts merely expired and were no longer renewed by AMACC because they failed to satisfy the schools standards for the school year 2000-2001 that measured their fitness and aptitude to teach as regular faculty members. The CA emphasized that in the absence of any evidence of bad faith on AMACCs part, the court would not disturb or nullify its discretion to set standards and to select for regularization only the teachers who qualify, based on reasonable and non-discriminatory guidelines. The CA disagreed with the NLRCs ruling that the new guidelines for the school year 2000-20001 could not be imposed on the petitioners and their employment contracts. The appellate court opined that AMACC has the inherent right to upgrade the quality of computer education it offers to the public; part of this pursuit is the implementation of continuing evaluation and screening of its faculty members for academic excellence. The CA noted that the nature of education AMACC offers demands that the school constantly adopt progressive performance standards for its faculty to ensure that they keep pace with the rapid developments in the field of information technology. Finally, the CA found that the petitioners were hired on a non-tenured basis and for a fixed and predetermined term based on the Teaching Contract exemplified by the contract between the petitioner Lachica and AMACC. The CA ruled that the non-renewal of the petitioners teaching contracts is sanctioned by the doctrine laid down in Brent School, Inc. v. Zamora20 where the Court recognized the validity of contracts providing for fixed-period employment. THE PETITION The petitioners cite the following errors in the CA decision:21 1) The CA gravely erred in reversing the LA and NLRC illegal dismissal rulings; and

2) The CA gravely erred in not ordering their reinstatement with full, backwages. The petitioners submit that the CA should not have disturbed the findings of the LA and the NLRC that they were illegally dismissed; instead, the CA should have accorded great respect, if not finality, to the findings of these specialized bodies as these findings were supported by evidence on record. Citing our ruling in Soriano v. National Labor Relations Commission,22 the petitioners contend that in certiorari proceedings under Rule 65 of the Rules of Court, the CA does not assess and weigh the sufficiency of evidence upon which the Labor Arbiter and the NLRC based their conclusions. They submit that the CA erred when it substituted its judgment for that of the Labor Arbiter and the NLRC who were the "triers of facts" who had the opportunity to review the evidence extensively. On the merits, the petitioners argue that the applicable law on probationary employment, as explained by the LA, is Article 281 of the Labor Code which mandates a period of six (6) months as the maximum duration of the probationary period unless there is a stipulation to the contrary; that the CA should not have disturbed the LAs conclusion that the AMACC failed to support its allegation that they did not qualify under the new guidelines adopted for the school year 2000-2001; and that they were illegally dismissed; their employment was terminated based on standards that were not made known to them at the time of their engagement. On the whole, the petitioners argue that the LA and the NLRC committed no grave abuse of discretion that the CA can validly cite. THE CASE FOR THE RESPONDENT In their Comment,23 AMACC notes that the petitioners raised no substantial argument in support of their petition and that the CA correctly found that the petitioners were hired on a non-tenured basis and for a fixed or predetermined term. AMACC stresses that the CA was correct in concluding that no actual dismissal transpired; it simply did not renew the petitioners respective employment contracts because of their poor performance and failure to satisfy the schools standards. AMACC also asserts that the petitioners knew very well that the applicable standards would be revised and updated from time to time given the nature of the teaching profession. The petitioners also knew at the time of their engagement that they must comply with the schools regularization policies as stated in the Faculty Manual. Specifically, they must obtain a passing rating on the Performance Appraisal for Teachers (PAST) the primary instrument to measure the performance of faculty members. Since the petitioners were not actually dismissed, AMACC submits that the CA correctly ruled that they are not entitled to reinstatement, full backwages and attorneys fees. THE COURTS RULING We find the petition meritorious. The CAs Review of Factual Findings under Rule 65 We agree with the petitioners that, as a rule in certiorari proceedings under Rule 65 of the Rules of Court, the CA does not assess and weigh each piece of evidence introduced in the case. The CA only examines the factual findings of the NLRC to determine whether or not the conclusions are supported by substantial evidence whose absence points to grave abuse of discretion amounting to lack or excess of jurisdiction.24 In the recent case of Protacio v. Laya Mananghaya & Co.,25 we emphasized that:

As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court, the appellate court does not assess and weigh the sufficiency of evidence upon which the Labor Arbiter and the NLRC based their conclusion. The query in this proceeding is limited to the determination of whether or not the NLRC acted without or in excess of its jurisdiction or with grave abuse of discretion in rendering its decision. However, as an exception, the appellate court may examine and measure the factual findings of the NLRC if the same are not supported by substantial evidence. The Court has not hesitated to affirm the appellate courts reversals of the decisions of labor tribunals if they are not supported by substantial evidence. [Emphasis supplied] As discussed below, our review of the records and of the CA decision shows that the CA erred in recognizing that grave abuse of discretion attended the NLRCs conclusion that the petitioners were illegally dismissed. Consistent with this conclusion, the evidence on record show that AMACC failed to discharge its burden of proving by substantial evidence the just cause for the non-renewal of the petitioners contracts. In Montoya v. Transmed Manila Corporation,26 we laid down our basic approach in the review of Rule 65 decisions of the CA in labor cases, as follows: In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the review of questions of law raised against the assailed CA decision. In ruling for legal correctness, we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it; we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case? Following this approach, our task is to determine whether the CA correctly found that the NLRC committed grave abuse of discretion in ruling that the petitioners were illegally dismissed. Legal Environment in the Employment of Teachers a. Rule on Employment on Probationary Status A reality we have to face in the consideration of employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools.27 On the matter of probationary period, Section 92 of these regulations provides: Section 92. Probationary Period. Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. [Emphasis supplied] The CA pointed this out in its decision (as the NLRC also did), and we confirm the correctness of this conclusion. Other than on the period, the following quoted portion of Article 281 of the Labor Code still fully applies:

x x x The services of an employee who has been engaged on a probationary basis may be terminated for a just cause when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. [Emphasis supplied] b. Fixed-period Employment The use of employment for fixed periods during the teachers probationary period is likewise an accepted practice in the teaching profession. We mentioned this in passing in Magis Young Achievers Learning Center v. Adelaida P. Manalo,28 albeit a case that involved elementary, not tertiary, education, and hence spoke of a school year rather than a semester or a trimester. We noted in this case: The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teachers performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year since it would be the third school year of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. It is when the yearly contract is renewed for the third time that Section 93 of the Manual becomes operative, and the teacher then is entitled to regular or permanent employment status. It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period.

term "academic freedom" encompass the freedom of the school or college to determine for itself: (1) who may teach; (2) who may be taught; (3) how lessons shall be taught; and (4) who may be admitted to study.31 AMACCs right to academic freedom is particularly important in the present case, because of the new screening guidelines for AMACC faculty put in place for the school year 2000-2001. We agree with the CA that AMACC has the inherent right to establish high standards of competency and efficiency for its faculty members in order to achieve and maintain academic excellence. The schools prerogative to provide standards for its teachers and to determine whether or not these standards have been met is in accordance with academic freedom that gives the educational institution the right to choose who should teach.32 In Pea v. National Labor Relations Commission,33 we emphasized: It is the prerogative of the school to set high standards of efficiency for its teachers since quality education is a mandate of the Constitution. As long as the standards fixed are reasonable and not arbitrary, courts are not at liberty to set them aside. Schools cannot be required to adopt standards which barely satisfy criteria set for government recognition. The same academic freedom grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher, subject of course to the overarching limitations under the Labor Code. Academic freedom, too, is not the only legal basis for AMACCs issuance of screening guidelines. The authority to hire is likewise covered and protected by its management prerogative the right of an employer to regulate all aspects of employment, such as hiring, the freedom to prescribe work assignments, working methods, process to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.34 Thus, AMACC has every right to determine for itself that it shall use fixed-term employment contracts as its medium for hiring its teachers. It also acted within the terms of the Manual of Regulations for Private Schools when it recognized the petitioners to be merely on probationary status up to a maximum of nine trimesters. The Conflict: Probationary Status and Fixed-term Employment The existence of the term-to-term contracts covering the petitioners employment is not disputed, nor is it disputed that they were on probationary status not permanent or regular status from the time they were employed on May 25, 1998 and until the expiration of their Teaching Contracts on September 7, 2000. As the CA correctly found, their teaching stints only covered a period of at least seven (7) consecutive trimesters or two (2) years and three (3) months of service. This case, however, brings to the fore the essential question of which, between the two factors affecting employment, should prevail given AMACCs position that the teachers contracts expired and it had the right not to renew them. In other words, should the teachers probationary status be disregarded simply because the contracts were fixed-term? The provision on employment on probationary status under the Labor Code35 is a primary example of the fine balancing of interests between labor and management that the Code has institutionalized pursuant to the underlying intent of the Constitution.36 On the one hand, employment on probationary status affords management the chance to fully scrutinize the true worth of hired personnel before the full force of the security of tenure guarantee of the Constitution comes into play.37 Based on the standards set at the start of the probationary period, management is given the widest opportunity during the probationary period to reject hirees who fail to meet its own adopted but reasonable standards.38 These standards, together with the just39 and authorized causes40 for termination of employment

We have long settled the validity of a fixed-term contract in the case Brent School, Inc. v. Zamora29 that AMACC cited. Significantly, Brent happened in a school setting. Care should be taken, however, in reading Brent in the context of this case as Brent did not involve any probationary employment issue; it dealt purely and simply with the validity of a fixed-term employment under the terms of the Labor Code, then newly issued and which does not expressly contain a provision on fixed-term employment. c. Academic and Management Prerogative Last but not the least factor in the academic world, is that a school enjoys academic freedom a guarantee that enjoys protection from the Constitution no less. Section 5(2) Article XIV of the Constitution guarantees all institutions of higher learning academic freedom.30 The institutional academic freedom includes the right of the school or college to decide and adopt its aims and objectives, and to determine how these objections can best be attained, free from outside coercion or interference, save possibly when the overriding public welfare calls for some restraint. The essential freedoms subsumed in the

the Labor Code expressly provides, are the grounds available to terminate the employment of a teacher on probationary status. For example, the school may impose reasonably stricter attendance or report compliance records on teachers on probation, and reject a probationary teacher for failing in this regard, although the same attendance or compliance record may not be required for a teacher already on permanent status. At the same time, the same just and authorizes causes for dismissal under the Labor Code apply to probationary teachers, so that they may be the first to be laid-off if the school does not have enough students for a given semester or trimester. Termination of employment on this basis is an authorized cause under the Labor Code.41 Labor, for its part, is given the protection during the probationary period of knowing the company standards the new hires have to meet during the probationary period, and to be judged on the basis of these standards, aside from the usual standards applicable to employees after they achieve permanent status. Under the terms of the Labor Code, these standards should be made known to the teachers on probationary status at the start of their probationary period, or at the very least under the circumstances of the present case, at the start of the semester or the trimester during which the probationary standards are to be applied. Of critical importance in invoking a failure to meet the probationary standards, is that the school should show as a matter of due process how these standards have been applied. This is effectively the second notice in a dismissal situation that the law requires as a due process guarantee supporting the security of tenure provision,42 and is in furtherance, too, of the basic rule in employee dismissal that the employer carries the burden of justifying a dismissal.43 These rules ensure compliance with the limited security of tenure guarantee the law extends to probationary employees.44 When fixed-term employment is brought into play under the above probationary period rules, the situation as in the present case may at first blush look muddled as fixed-term employment is in itself a valid employment mode under Philippine law and jurisprudence.45 The conflict, however, is more apparent than real when the respective nature of fixed-term employment and of employment on probationary status are closely examined. The fixed-term character of employment essentially refers to the period agreed upon between the employer and the employee; employment exists only for the duration of the term and ends on its own when the term expires. In a sense, employment on probationary status also refers to a period because of the technical meaning "probation" carries in Philippine labor law a maximum period of six months, or in the academe, a period of three years for those engaged in teaching jobs. Their similarity ends there, however, because of the overriding meaning that being "on probation" connotes, i.e., a process of testing and observing the character or abilities of a person who is new to a role or job.46 Understood in the above sense, the essentially protective character of probationary status for management can readily be appreciated. But this same protective character gives rise to the countervailing but equally protective rule that the probationary period can only last for a specific maximum period and under reasonable, well-laid and properly communicated standards. Otherwise stated, within the period of the probation, any employer move based on the probationary standards and affecting the continuity of the employment must strictly conform to the probationary rules. Under the given facts where the school year is divided into trimesters, the school apparently utilizes its fixed-term contracts as a convenient arrangement dictated by the trimestral system and not because the workplace parties really intended to limit the period of their relationship to any fixed term and to finish this relationship at the end of that term. If we pierce the veil, so to speak, of the parties so-called fixed-term employment contracts, what undeniably comes out at the core is a fixed-term contract conveniently used by the school to define and regulate its relations with its teachers during their probationary period.1avvphi1

To be sure, nothing is illegitimate in defining the school-teacher relationship in this manner. The school, however, cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Article 281 of the Labor Code. Unless this reconciliation is made, the requirements of this Article on probationary status would be fully negated as the school may freely choose not to renew contracts simply because their terms have expired. The inevitable effect of course is to wreck the scheme that the Constitution and the Labor Code established to balance relationships between labor and management. Given the clear constitutional and statutory intents, we cannot but conclude that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. This conclusion is immeasurably strengthened by the petitioners and the AMACCs hardly concealed expectation that the employment on probation could lead to permanent status, and that the contracts are renewable unless the petitioners fail to pass the schools standards. To highlight what we mean by a fixed-term contract specifically used for the fixed term it offers, a replacement teacher, for example, may be contracted for a period of one year to temporarily take the place of a permanent teacher on a one-year study leave. The expiration of the replacement teachers contracted term, under the circumstances, leads to no probationary status implications as she was never employed on probationary basis; her employment is for a specific purpose with particular focus on the term and with every intent to end her teaching relationship with the school upon expiration of this term. If the school were to apply the probationary standards (as in fact it says it did in the present case), these standards must not only be reasonable but must have also been communicated to the teachers at the start of the probationary period, or at the very least, at the start of the period when they were to be applied. These terms, in addition to those expressly provided by the Labor Code, would serve as the just cause for the termination of the probationary contract. As explained above, the details of this finding of just cause must be communicated to the affected teachers as a matter of due process. AMACC, by its submissions, admits that it did not renew the petitioners contracts because they failed to pass the Performance Appraisal System for Teachers (PAST) and other requirements for regularization that the school undertakes to maintain its high academic standards.47 The evidence is unclear on the exact terms of the standards, although the school also admits that these were standards under the Guidelines on the Implementation of AMACC Faculty Plantilla put in place at the start of school year 2000-2001. While we can grant that the standards were duly communicated to the petitioners and could be applied beginning the 1st trimester of the school year 2000-2001, glaring and very basic gaps in the schools evidence still exist. The exact terms of the standards were never introduced as evidence; neither does the evidence show how these standards were applied to the petitioners.48 Without these pieces of evidence (effectively, the finding of just cause for the non-renewal of the petitioners contracts), we have nothing to consider and pass upon as valid or invalid for each of the petitioners. Inevitably, the non-renewal (or effectively, the termination of employment of employees on probationary status) lacks the supporting finding of just cause that the law requires and, hence, is illegal. In this light, the CA decision should be reversed. Thus, the LAs decision, affirmed as to the results by the NLRC, should stand as the decision to be enforced, appropriately re-computed to consider the period of appeal and review of the case up to our level.

Given the period that has lapsed and the inevitable change of circumstances that must have taken place in the interim in the academic world and at AMACC, which changes inevitably affect current school operations, we hold that - in lieu of reinstatement - the petitioners should be paid separation pay computed on a trimestral basis from the time of separation from service up to the end of the complete trimester preceding the finality of this Decision.49 The separation pay shall be in addition to the other awards, properly recomputed, that the LA originally decreed. WHEREFORE, premises considered, we hereby GRANT the petition, and, consequently, REVERSE and SET ASIDE the Decision of the Court of Appeals dated November 29, 2007 and its Resolution dated June 20, 2008 in CA-G.R. SP No. 96599. The Labor Arbiters decision of March 15, 2002, subsequently affirmed as to the results by the National Labor Relations Commission, stands and should be enforced with appropriate re-computation to take into account the date of the finality of this Decision. In lieu of reinstatement, AMA Computer College-Paraaque City, Inc. is hereby DIRECTED to pay separation pay computed on a trimestral basis from the time of separation from service up to the end of the complete trimester preceding the finality of this Decision. For greater certainty, the petitioners are entitled to: (a) backwages and 13th month pay computed from September 7, 2000 (the date AMA Computer College-Paraaque City, Inc. illegally dismissed the petitioners) up to the finality of this Decision; (b) monthly honoraria (if applicable) computed from September 7, 2000 (the time of separation from service) up to the finality of this Decision; and (c) separation pay on a trimestral basis from September 7, 2000 (the time of separation from service) up to the end of the complete trimester preceding the finality of this Decision. The labor arbiter is hereby ORDERED to make another re-computation according to the above directives. No costs. SO ORDERED. G.R. No. 192881 November 16, 2011

This case stemmed from a complaint for illegal dismissal with money claims filed by respondent Rosemarie L. Sy (Sy) before the Arbitration Branch, National Capital Region, NLRC, against petitioners Tamsons Enterprises, Inc. (Tamsons), Nelson Lee (Lee), the company President; and Lilibeth Ong (Ong) and Johnson Ng (Ng), her coemployees. From the records, it appears that on September 1, 2006, Sy was hired by Tamsons as Assistant to the President. Despite the title, she did not act as such because, per instruction of Lee, she was directed to act as payroll officer, though she actually worked as a payroll clerk.5 On February 24, 2007,6 four days before she completed her sixth month of working in Tamsons, Ng, the Sales Project Manager, called her to a meeting with him and Lee. During the meeting, they informed Sy that her services would be terminated due to inefficiency. She was asked to sign a letter of resignation and quitclaim. She was told not to report for work anymore because her services were no longer needed. On her last day of work, Ong humiliated her in front of her officemates by shouting at her and preventing her from getting her personal things or any other document from the office. During her pre-employment interview, Lee had nice comments about her good work experience and educational background. She was assured of a long-term employment with benefits. Throughout her employment, she earnestly performed her duties, had a perfect attendance record, worked even during brownouts and typhoons, and would often work overtime just to finish her work. Sy claimed that the remarks of her superiors about her alleged inefficiency were ill-motivated and made without any basis. She had been rendering services for almost six (6) months before she was arbitrarily and summarily dismissed. Her dismissal was highly suspicious as it took place barely four (4) days prior to the completion of her sixmonth probationary period. The petitioners did not show her any evaluation or appraisal report regarding her alleged inefficient performance. As she was terminated without an evaluation on her performance, she was deprived of the opportunity to be regularly part of the company and to be entitled to the benefits and privileges of a regular employee. Worse, she was deprived of her only means of livelihood. For their part, the petitioners asserted that before Sy was hired, she was apprised that she was being hired as a probationary employee for six months from September 1, 2006 to February 28, 2007, subject to extension as a regular employee conditioned on her meeting the standards of permanent employment set by the company. Her work performance was thereafter monitored and evaluated. On February 1, 2007, she was formally informed that her employment would end on February 28, 2007 because she failed to meet the companys standards. From then on, Sy started threatening the families of the petitioners with bodily harm. They pointed out that the unpredictable attitude of Sy was one of the reasons for her not being considered for regular employment. The foregoing circumstances prompted Sy to file a case for illegal dismissal with claims for back wages, unpaid salary, service incentive leave, overtime pay, 13th month pay, and moral and exemplary damages, and attorneys fees. After the submission of the parties respective pleadings, the ELA rendered a decision in favor of Sy, stating that a termination, notwithstanding the probationary status, must be for a just cause. As there was an absence of evidence showing just cause and due process, he found Sys termination to be arbitrary and illegal. The dispositive portion of the ELA decision reads:

TAMSON'S ENTERPRISES, INC., NELSON LEE, LILIBETH ONG and JOHNSON NG, Petitioners, vs. COURT OF APPEALS and ROSEMARIE L. SY, Respondents. DECISION MENDOZA, J.: This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure assailing the February 26, 2010 Decision1 and the July 9, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 105845 which reversed the April 29, 2003 Decision3 of the National Labor Relations Commission (NLRC) and reinstated the September 28, 2007 Decision4 of the Executive Labor Arbiter, Herminio Suelo (ELA), in NLRC NCR Case No. 00-030236607, finding petitioners liable for illegal dismissal and payment of money claims.

WHEREFORE, premises considered, judgment is hereby rendered finding respondents [herein petitioners] liable for illegal dismissal and payment of money claims. Accordingly, respondents [herein petitioners] are hereby ordered to reinstate complainant to her position without loss of seniority rights and other benefits, and to pay the following: 1. Complainants full backwages, computed from the time she was illegally dismissed to the date of her actual reinstatement, which as of date amounts to P 185,380.00; 2. Prorated 13th month pay in the sum of P 4,166.00; 3. Salaries for period of February 16-28, 2007 amounting to P 13,000.00; 4. 10% of the total award as attorneys fee.

Thus, the CA agreed with the ELAs conclusion that the termination of Sys services was illegal as there was no evidence that a standard of performance had been made known to her and that she was accorded due process. The pertinent portions of the CA decision, including the dispositive portion, read: Public respondent NLRC committed grave abuse of discretion in reversing the findings of the Labor Arbiter and ruling that private respondents [herein petitioners] have the right to terminate the services of petitioner [herein respondent] because they found her unfit for regular employment even if there was no evidence to show the instances which made her unfit. Moreover, the NLRC erred when it found that there was a compliance with procedural due process when petitioners *respondents+ services were terminated. WHEREFORE, the petition is GRANTED. The decision of the Labor Arbiter dated September 28, 2007 is REINSTATED. Consequently, the decision and resolution of the National Labor Relations Commission dated April 29, 2008 and July 30, 2008, respectively, are REVERSED and SET ASIDE. SO ORDERED.10

The reinstatement aspect of this Decision is immediately executory pursuant to Article 223 of the Labor Code, as amended. Respondents [herein petitioners] are therefore directed to submit a report of compliance thereof before this Office within ten (10) calendar days from receipt hereof. All other claims are hereby DISMISSED for lack of merit. SO ORDERED.7 Dissatisfied, the petitioners appealed to the NLRC on the ground that the ELA gravely abused his discretion in finding that Sy was illegally dismissed and in ordering her reinstatement and payment of backwages. On appeal, the NLRC reversed the ELAs finding that Sy was terminated without just cause and without due process and dismissed the case.8 In reversing the decision of the ELA, the NLRC reasoned out that pursuant to Article 281 of the Labor Code, there are two general grounds for the services of a probationary employee to be terminated, just cause or failure to qualify as a regular employee. In effect, failure to qualify for regular employment is in itself a just cause for termination of probationary employment. To the NLRC, the petitioners were in compliance with the mandate of the said provision when Sy was notified one month in advance of the expiration of her probationary employment due to her non-qualification for regular employment. The motion for reconsideration having been denied, Sy elevated her case to the CA via a petition for certiorari under Rule 65. She imputed grave abuse of discretion on the part of NLRC in dismissing her complaint. On February 26, 2010, the CA rendered the assailed decision reversing the NLRC. It explained that at the time Sy was engaged as a probationary employee she was not informed of the standards that she should meet to become a regular employee. Citing the ruling in Clarion Printing House, Inc v. NLRC,9 the CA stated that where an employee hired on probationary basis was not informed of the standards that would qualify her as a regular employee, she was deemed to have been hired from day one as a regular employee. As a regular employee, she was entitled to security of tenure and could be dismissed only for a just cause and after due compliance with procedural due process. The CA added that the petitioners did not observe due process in dismissing Sy.

The petitioners sought reconsideration of the said decision. The CA, however, denied the motion in its Resolution dated July 9, 2010. Hence, the petitioners interpose the present petition before this Court anchored on the following GROUNDS (1) THE COURT OF APPEALS ERRED IN UPHOLDING THE DECISION OF THE LABOR ARBITER AND AWARDING BACK WAGES AND OTHER MONETARY CLAIMS IN FAVOR OF THE PRIVATE RESPONDENT. (2) THE COURT OF APPEALS ERRED IN HOLDING THAT HEREIN PRIVATE RESPONDENT BECAME A REGULAR EMPLOYEE EFFECTIVE DAY ONE OF HER EMPLOYMENT WITH PETITIONER. (3) THE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE PROBATIONARY PERIOD OF EMPLOYMENT OF PRIVATE RESPONDENT ENDING [ON] FEBRUARY 28, 2007.11 The core issue to be resolved is whether the termination of Sy, a probationary employee, was valid or not. The petitioners pray for the reversal of the CA decision arguing that Sy was a probationary employee with a limited tenure of six months subject to regularization conditioned on her satisfactory performance. They insist that they substantially complied with the requirements of the law having apprised Sy of her status as probationary employee. The standard, though not written, was clear that her continued employment would depend on her over-all performance of the assigned tasks, and that the same was made known to her since day one of her employment. According to the petitioners, reasonable standard of employment does not require written evaluation of Sys

function. It is enough that she was informed of her duties and that her performance was later rated below satisfactory by the Management. Citing Alcira v. NLRC12 and Colegio San Agustin v. NLRC,13 the petitioners further argue that Sys constitutional protection to security of tenure ended on the last day of her probationary tenure or on February 28, 2007. It is unfair to compel regularization of an employee who was found by the Management to be unfit for the job. As they were not under obligation to extend Sys employment, there was no illegal dismissal, but merely an expiration of the probationary contract. As such, she was not entitled to any benefits like separation pay or backwages. Sy counters that she was illegally terminated from service and insists that the petitioners cannot invoke her failure to qualify as she was not informed of the standards or criteria which she should have met for regular employment. Moreover, no proof was shown as to her alleged poor work performance. She was unceremoniously terminated to prevent her from becoming a regular employee and be entitled to the benefits as such. The Court finds the petition devoid of merit. The pertinent law governing the present case is Article 281 of the Labor Code which provides as follows: Art. 281. Probationary employment. Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (Underscoring supplied) There is probationary employment where the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.14 The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length.15 On the basis of the aforequoted provisions and definition, there is no dispute that Sys employment with Tamsons on September 1, 2006 was probationary in character. As a probationary employee, her employment status was only temporary. Although a probationary or temporary employee with a limited tenure, she was still entitled to a security of tenure. It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for a just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement.16 Consistently, in Mercado v. AMA Computer College-Paranaque City, Inc.,17 this Court clearly stressed that:

Labor, for its part, is given the protection during the probationary period of knowing the company standards the new hires have to meet during the probationary period, and to be judged on the basis of these standards, aside from the usual standards applicable to employees after they achieve permanent status. Under the terms of the Labor Code, these standards should be made known to the [employees] on probationary status at the start of their probationary period, or xxx during which the probationary standards are to be applied. Of critical importance in invoking a failure to meet the probationary standards, is that the [employer] should show as a matter of due process how these standards have been applied. This is effectively the second notice in a dismissal situation that the law requires as a due process guarantee supporting the security of tenure provision, and is in furtherance, too, of the basic rule in employee dismissal that the employer carries the burden of justifying a dismissal. These rules ensure compliance with the limited security of tenure guarantee the law extends to probationary employees.18 [Emphases supplied] In this case, the justification given by the petitioners for Sys dismissal was her alleged failure to qualify by the companys standard. Other than the general allegation that said standards were made known to her at the time of her employment, however, no evidence, documentary or otherwise, was presented to substantiate the same. Neither was there any performance evaluation presented to prove that indeed hers was unsatisfactory. Thus, this Court is in full accord with the ruling of the CA when it wrote that: Private respondents were remiss in showing that petitioner failed to qualify as a regular employee. Except for their allegations that she was apprised of her status as probationary and that she would be accorded regular status once she meets their standards, no evidence was presented of these standards and that petitioner had been apprised of them at the time she was hired as a probationary employee. Neither was it shown that petitioner failed to meet such standards. Petitioner should have been informed as to the basis of private respondents decision not to extend her regular or permanent employment. This case is bereft of any proof like an evaluation or assessment report which would support private respondents claim that she failed to comply with the standards in order to become a regular employee. One of the conditions before an employer can terminate a probationary employee is dissatisfaction on the part of the employer which must be real and in good faith, not feigned so as to circumvent the contract or the law. In the case at bar, absent any proof showing that the work performance of petitioner was unsatisfactory, We cannot conclude that petitioner failed to meet the standards of performance set by private respondents. This absence of proof, in fact, leads Us to infer that their dissatisfaction with her work performance was contrived so as not to regularize her employment.19 For failure of the petitioners to support their claim of unsatisfactory performance by Sy, this Court shares the view of the CA that Sys employment was unjustly terminated to prevent her from acquiring a regular status in circumvention of the law on security of tenure. As the Court previously stated, this is a common and convenient practice of unscrupulous employers to circumvent the law on security of tenure. Security of tenure, which is a right of paramount value guaranteed by the Constitution, should not be denied to the workers by such a stratagem. The Court can not permit such a subterfuge, if it is to be true to the law and social justice.20 In its attempt to justify Sys dismissal, the petitioners relied heavily on the case of Alcira v. NLRC21 where the Court stressed that the constitutional protection ends on the expiration of the probationary period when the parties are free to either renew or terminate their contract of employment.

Indeed, the Court recognizes the employers power to terminate as an exercise of management prerogative.1avvphi1 The petitioners, however, must be reminded that such right is not without limitations. In this connection, it is well to quote the ruling of the Court in the case of Dusit Hotel Nikko v. Gatbonton, 22 where it was written: As Article 281 clearly states, a probationary employee can be legally terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regular employee 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 an employee on probation is not without limitations. First, this power must be exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer.23 [Emphases supplied] Here, the petitioners failed to convey to Sy the standards upon which she should measure up to be considered for regularization and how the standards had been applied in her case. As correctly pointed out by Sy, the dissatisfaction on the part of the petitioners was at best self-serving and dubious as they could not present concrete and competent evidence establishing her alleged incompetence. Failure on the part of the petitioners to discharge the burden of proof is indicative that the dismissal was not justified. The law is clear that in all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.24 The standards under which she would qualify as a regular employee not having been communicated to her at the start of her probationary period, Sy qualified as a regular employee. As held by this Court in the very recent case of Hacienda Primera Development Corporation v. Villegas,:25 In this case, petitioner Hacienda fails to specify the reasonable standards by which respondents alleged poor performance was evaluated, much less to prove that such standards were made known to him at the start of his employment. Thus, he is deemed to have been hired from day one as a regular employee. Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein. [Emphasis supplied] Even on the assumption that Sy indeed failed to meet the standards set by them and made known to the former at the time of her engagement, still, the termination was flawed for failure to give the required notice to Sy. Section 2, Rule I, Book VI of the Implementing Rules provides: Section 2. Security of tenure. (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process. (b) The foregoing shall also apply in cases of probationary employment; Provided however, that in such cases, termination of employment due to failure of the employee to qualify in accordance with the standards of the employer made known to the former at the time of engagement may also be a ground for termination of employment. xxx

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed: xxx If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination. [Emphasis and Underscoring supplied] In this case, the petitioners failed to comply with the requirement of a written notice. Notably, Sy was merely verbally informed that her employment would be terminated on February 28, 2007, as admitted by the petitioners.26 Considering that the petitioners failed to observe due process in dismissing her, the dismissal had no legal sanction. It bears stressing that a workers employment is property in the constitutional sense.27 Being a regular employee whose termination was illegal, Sy is entitled to the twin relief of reinstatement and backwages granted by the Labor Code. Article 279 provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to her full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent computed from the time her compensation was withheld from her up to the time of actual reinstatement. Likewise, having been compelled to come to court and to incur expenses to protect her rights and interests, the award of attorneys fees is in order.28 WHEREFORE, the petition is DENIED. SO ORDERED. G.R. No. 177937 January 19, 2011

ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS MANUEL, Petitioners, vs. IRENE R. RANCHEZ, Respondent. DECISION NACHURA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision1 dated August 29, 2006 and the Resolution2 dated May 16, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 91631. The Facts The facts of the case are as follows.

Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons Supermarket Corporation (petitioner Supermarket) for a period of five (5) months, or from October 15, 1997 until March 14, 1998.3 She underwent six (6) weeks of training as a cashier before she was hired as such on October 15, 1997.4 Two weeks after she was hired, or on October 30, 1997, respondent reported to her supervisor the loss of cash amounting to Twenty Thousand Two Hundred Ninety-Nine Pesos (P20,299.00) which she had placed inside the company locker. Petitioner Jess Manuel (petitioner Manuel), the Operations Manager of petitioner Supermarket, ordered that respondent be strip-searched by the company guards. However, the search on her and her personal belongings yielded nothing.5 Respondent acknowledged her responsibility and requested that she be allowed to settle and pay the lost amount. However, petitioner Manuel did not heed her request and instead reported the matter to the police. Petitioner Manuel likewise requested the Quezon City Prosecutors Office for an inquest.6 On November 5, 1997, an information for Qualified Theft was filed with the Quezon City Regional Trial Court. Respondent was constrained to spend two weeks in jail for failure to immediately post bail in the amount of Forty Thousand Pesos (P40,000.00).7 On November 25, 1997, respondent filed a complaint for illegal dismissal and damages.8 On March 12, 1998, petitioners sent to respondent by mail a notice of termination and/or notice of expiration of probationary employment dated March 9, 1998.9 On August 10, 1998, the Labor Arbiter rendered a decision,10 the fallo of which reads: CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered dismissing the claim of illegal dismissal for lack of merit. Respondents are ordered to accept complainant to her former or equivalent work without prejudice to any action they may take in the premises in connection with the missing money of P20,299.00. SO ORDERED.11 In dismissing the complaint for illegal dismissal, the Labor Arbiter ratiocinated that at the time respondent filed the complaint for illegal dismissal, she was not yet dismissed by petitioners. When she was strip- searched by the security personnel of petitioner Supermarket, the guards were merely conducting an investigation. The subsequent referral of the loss to the police authorities might be considered routine. Respondents non-reporting for work after her release from detention could be taken against her in the investigation that petitioner supermarket would conduct.12 On appeal, the National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter in a decision13 dated October 20, 2003. The dispositive portion of the decision reads: WHEREFORE, the appealed decision is SET ASIDE. The respondents are hereby ordered to immediately reinstate complainant to her former or equivalent position without loss of seniority rights and privileges and to pay her full backwages computed from the time she was constructively dismissed on October 30, 1997 up to the time she is actually reinstated.

SO ORDERED.14 In reversing the decision of the Labor Arbiter, the NLRC ruled that respondent was denied due process by petitioners. Strip-searching respondent and sending her to jail for two weeks certainly amounted to constructive dismissal because continued employment had been rendered impossible, unreasonable, and unlikely. The wedge that had been driven between the parties was impossible to ignore.15 Although respondent was only a probationary employee, the subsequent lapse of her probationary contract of employment did not have the effect of validly terminating her employment because constructive dismissal had already been effected earlier by petitioners.16 Petitioners filed a motion for reconsideration, which was denied by the NLRC in a resolution17 dated July 21, 2005. Petitioners filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. On August 29, 2006, the CA rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, the challenged Decision of the National Labor Relations Commission is AFFIRMED with MODIFICATION in that should reinstatement be no longer possible in view of the strained relation between the parties, Petitioners are ordered to pay Respondent separation pay equivalent to one (1) month pay in addition to backwages from the date of dismissal until the finality of the assailed decision. SO ORDERED.18 Petitioners filed a motion for reconsideration. However, the CA denied the same in a Resolution dated May 16, 2007. Hence, this petition. Petitioners assail the reinstatement of respondent, highlighting the fact that she was a probationary employee and that her probationary contract of employment lapsed on March 14, 1998. Thus, her reinstatement was rendered moot and academic. Furthermore, even if her probationary contract had not yet expired, the offense that she committed would nonetheless militate against her regularization.19 On the other hand, respondent insists that she was constructively dismissed by petitioner Supermarket when she was strip-searched, divested of her dignity, and summarily thrown in jail. She could not have been expected to go back to work after being allowed to post bail because her continued employment had been rendered impossible, unreasonable, and unlikely. She stresses that, at the time the money was discovered missing, it was not with her but locked in the company locker. The company failed to provide its cashiers with strong locks and proper security in the work place. Respondent argues that she was not caught in the act and even reported that the money was missing. She claims that she was denied due process.20 The Issue The sole issue for resolution is whether respondent was illegally terminated from employment by petitioners. The Ruling of the Court

We rule in the affirmative. There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.21 A probationary employee, like a regular employee, enjoys security of tenure.22 However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.23 Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment. In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process. The haphazard manner in the investigation of the missing cash, which was left to the determination of the police authorities and the Prosecutors Office, left respondent with no choice but to cry foul. Administrative investigation was not conducted by petitioner Supermarket. On the same day that the missing money was reported by respondent to her immediate superior, the company already pre-judged her guilt without proper investigation, and instantly reported her to the police as the suspected thief, which resulted in her languishing in jail for two weeks. As correctly pointed out by the NLRC, the due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings. The criminal aspect of the case is considered independent of the administrative aspect. Thus, employers should not rely solely on the findings of the Prosecutors Office. They are mandated to conduct their own separate investigation, and to accord the employee every opportunity to defend himself. Furthermore, respondent was not represented by counsel when she was stripsearched inside the company premises or during the police investigation, and in the preliminary investigation before the Prosecutors Office. Respondent was constructively dismissed by petitioner Supermarket effective October 30, 1997. It was unreasonable for petitioners to charge her with abandonment for not reporting for work upon her release in jail. It would be the height of callousness to expect her to return to work after suffering in jail for two weeks. Work had been rendered unreasonable, unlikely, and definitely impossible, considering the treatment that was accorded respondent by petitioners. As to respondents monetary claims, Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to full 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 actual reinstatement. However, due to the strained relations of the parties, the payment of separation pay has been considered an acceptable alternative to reinstatement, when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.24 Thus, as an illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively.25lavvphil In this case, since respondent was a probationary employee at the time she was constructively dismissed by petitioners, she is entitled to separation pay and backwages. Reinstatement of respondent is no longer viable considering the circumstances.1avvphi1

However, the backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment, i.e., from October 30, 1997 to March 14, 1998. The computation should not cover the entire period from the time her compensation was withheld up to the time of her actual reinstatement. This is because respondent was a probationary employee, and the lapse of her probationary employment without her appointment as a regular employee of petitioner Supermarket effectively severed the employer-employee relationship between the parties. In all cases involving employees engaged on probationary basis, the employer shall make known to its employees the standards under which they will qualify as regular employees at the time of their engagement. Where no standards are made known to an employee at the time, he shall be deemed a regular employee,26 unless the job is self-descriptive, like maid, cook, driver, or messenger. However, the constitutional policy of providing full protection to labor is not intended to oppress or destroy management.27 Naturally, petitioner Supermarket cannot be expected to retain respondent as a regular employee considering that she lost P20,299.00 while acting as a cashier during the probationary period. The rules on probationary employment should not be used to exculpate a probationary employee who acts in a manner contrary to basic knowledge and common sense, in regard to which, there is no need to spell out a policy or standard to be met.28 WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 91631 is hereby AFFIRMED with the MODIFICATION that petitioners are hereby ordered to pay respondent Irene R. Ranchez separation pay equivalent to one (1) month pay and backwages from October 30, 1997 to March 14, 1998. Costs against petitioners. SO ORDERED.