133

Philips Semiconductors vs Fadriquela

427 SCRA 408
Classification Rationale
FACTS
The petitioner Philips Semiconductors is a domestic corporation engaged in the production and assembly
of semiconductors such as power devices, RF modules, CATV modules, RF and metal transistors and
glass diods. It caters to domestic and foreign corporations that manufacture computers,
telecommunications equipment and cars. Aside from contractual employees, the petitioner employed
1,029 regular workers. The employees were subjected to periodic performance appraisal based on
output, quality, attendance and work attitude.[2] One was required to obtain a performance rating of at
least 3.0 for the period covered by the performance appraisal to maintain good standing as an employee.
Respondent, during her 5 consecutive contracts, got the following ratings: 3.15, 3.8, 3.4, and 2.8. The
reason for her failed mark on the last contract was her absences. She was then asked to explain such
absences but she failed to do the same. Subsequently, respondents supervisor recommended that her
employment be terminated due to habitual absenteeism. Thus, her contract of employment was no longer
renewed. Respondent then filed a complaint for illegal dismissal. On the other hand, petitioner contends
that respondent was not dismissed; her contract merely expired.
The Labor Arbiter and the NLRC based their decision on the CBA between the petitioner and the labor
union which provides that a contractual employee would only be considered a regular employee if he has
completed 17 months of service and a performance rating of at least 3.0. The respondent filed a motion
for reconsideration but the NLRC denied the same. On appeal, the CA reversed the decision of the
NLRC. Hence, this petition.
.
ISSUE
Whether or not respondent was still a contractual employee of the company.
RULING
The two kinds of regular employees under the law are (1) those engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual employees
who have rendered at least one year of service, whether continuous or broken, with respect to the
activities in which they are employed. The primary standard to determine a regular employment is the
reasonable connection between the particular activity performed by the employee in relation to the
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. 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. Hence, the employment is also considered regular, but only with
respect to such activity and while such activity exists. The law does not provide the qualification that the
employee must first be issued a regular appointment or must be declared as such before he can acquire
a regular employee status.
In this case, the original contract of employment had been extended or renewed four times, to the same
position, with the same chores. Such a continuing need for the services of the respondent is sufficient
evidence of the necessity and indispensability of her services to the petitioners business. By operation of
law, then, the respondent had attained the regular status of her employment with the petitioner, and is
thus entitled to security of tenure as provided for in Article 279 of the Labor Code.
The limited period specified in petitioners employment contract having been imposed precisely to
circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or
disregarded as contrary to public policy or morals. To uphold the contractual arrangement would, in
effect, permit the former to avoid hiring permanent or regular employees by simply hiring them on a
temporary or casual basis, thereby violating the employees security of tenure in their jobs.

141
Audion Electronics vs NLRC
308 SCRA 340
Hiring Extend Period
FACTS
From the position paper and affidavit corroborated by oral testimony, it appears that complainant was
employed by respondent Audion Electric Company on June 30, 1976 as fabricator and continuously
rendered service assigned in different offices or projects as helper electrician, stockman and timekeeper.
He as rendered thirteen (13) years of continuous, loyal and dedicated service with a clean record.
On August 3, complainant was surprised to receive a letter informing him that he will be considered
terminated after the turnover of materials, including respondents, tools and equipment not later than
August 15, 1989.
Complainant claims that he was dismissed without justifiable cause and due process and that his
dismissed was done in bad faith which renders the dismissal illegal. For this reason, he claims that he is
entitled to reinstatement with full backwages. He also claims that he is entitled to moral and exemplary
damages. He includes payment of his overtime pay, project allowance, minimum wage increase
adjustment, proportionate 13th month pay and attorney's fees.
ISSUE
Whether the extended hiring of an employee after the termination of the project makes said employee a
regular and no longer a project employee.
RULING
We have held that where the employment of project employees is extended long after the supposed
project has been finished, the employees are removed from the scope of project employees and
considered regular employees.
Private respondent had presented substantial evidence to support his position, while petitioner merely
presented an unverified position paper merely stating therein that private respondent has no cause to
complain since the employment contract signed by private respondent with petitioner was co-terminus
with the project. Notably, petitioner failed to present such employment contract for a specific project
signed by private respondent that would show that his employment with the petitioner was for the duration
of a particular project. Moreover, notwithstanding petitioner's claim in its reply that in taking interest in the
welfare of its workers, petitioner would strive to provide them with more continuous work by successively
employing its workers, in this case, private respondent, petitioner failed to present any report of
termination.
As stated earlier, the rule in our jurisdiction is that findings of facts of the NLRC affirming those of the
Labor Arbiter are entitled to great weight and will not be disturbed if they are supported by substantial
evidence. Substantial evidence is an amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion. We find no grave abuse of discretion committed by NLRC in finding
that private respondent was not a project employee.
WHEREFORE, the challenged resolutions of the respondent NLRC are hereby AFFIRMED with the
MODIFICATION that the awards of moral and exemplary damages and attorney's fees are DELETED.

142
Beta Electric Corp. vs NLRC
182 SCRA 384
Contract to Contract
FACTS
The petitioner hired the private respondent, LUZVIMINDA PETILLA as clerk typist III effective December
15, 1986 until January 16, 1987.
On January 16, 1987, the petitioner gave her an extension up to February 15, 1987.
On February 15, 1987, it gave her another extension up to March 15, 1987.
On March 15, 1987, it gave her a further extension until April 30, 1987.
On May 1, 1987, she was given until May 31, 1987.
On June 1, 1987, she was given up to June 30, 1987.
Her appointments were covered by corresponding written contracts.
On June 22, 1987, her services were terminated without notice or investigation. On the same day, she
went to the labor arbiter on a complaint for illegal dismissal. As the court has indicated, both the labor
arbiter and the respondent National Labor Relations Commission ruled for her.
The petitioner argues mainly that the private respondent's appointment was temporary and hence she
may be terminated at will.
ISSUE
Whether or not a contract-to-contract agreement can make an employment a temporary one.
.
RULING
That she had been hired merely on a "temporary basis" "for purposes of meeting the seasonal or peak
demands of the business," and as such, her services may lawfully be terminated "after the
accomplishment of [her] task is untenable. The private respondent was to all intents and purposes, and
at the very least, a probationary employee, who became regular upon the expiration of six months. Under
Article 281 of the Labor Code, a probationary employee is "considered a regular employee" if he has
been "allowed to work after [the] probationary period." The fact that her employment has been a contractto-contract basis cannot alter the character of employment, because contracts cannot override the
mandate of law. Hence, by operation of law, she has become a regular employee.
In the case at bar, the private employee was employed from December 15, 1986 until June 22, 1987
when she was ordered laid off. Her tenure having exceeded six months, she attained regular
employment.
The petitioner cannot rightfully say that since the private respondent's employment hinged from contract
to contract, it was ergo, "temporary", depending on the term of each agreement. Under the Labor Code,
an employment may only be said to be "temporary" "where [it] has been fixed for a specific undertaking
the completion of 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." Quite to the contrary, the private respondent's work, that of "typist-clerk" is far
from being "specific" or "seasonal", but rather, one, according to the Code, "where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business." And
under the Code, where one performs such activities, he is a regular employee.
It is true that in Biboso v. Victorias Milling Company, Inc., we recognized the validity of contractual
stipulations as to the duration of employment; we cannot apply it here because clearly, the contract-tocontract arrangement given to the private respondent was but an artifice to prevent her from acquiring
security of tenure and to frustrate constitutional decrees.