FIRST DIVISION

G.R. No. 111651 March 15, 1996

OSMALIK S. BUSTAMANTE, PAULINO A. BANTAYAN, FERNANDO L.
BUSTAMANTE, MARIO D. SUMONOD, and SABU J.
LAMARAN, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION, FIFTH
DIVISION and EVERGREEN FARMS, INC.,Respondents.
PADILLA, J.:
This petition for certiorari seeks to reverse the 3 May 1993 resolution of the National Labor
Relations Commission (NLRC) which set aside its earlier resolution dated 8 March 1993 and
deleted the award of backwages in favor of petitioners.
The focal issue therefore in this case is whether or not petitioners are entitled to backwages after
a finding by the NLRC itself that they had become regular employees after serving for more than
one (1) year of broken or non-continuous service as probationary employees.
The facts are not in dispute. Respondent company is engaged in the business of producing high
grade bananas in its plantation in Davao del Norte. Petitioners Paulino Bantayan, Fernando
Bustamante, Mario Sumonod and Osmalik Bustamante were employed as laborers and harvesters
while petitioner Sabu Lamaran was employed as a laborer and sprayer in respondent company's
plantation. All the petitioners signed contracts of employment for a period of six (6) months from
2 January 1990 to 2 July 1990, but they had started working sometime in September 1989.
Previously, they were hired to do the same work for periods lasting a month or more, from 1985
to 1989. Before the contracts of employment expired on 2 July 1990, petitioners' employments
were terminated on 25 June 1990 on the ground of poor performance on account of age, as not
one of them was allegedly below forty (40) years old.
Petitioners filed a complaint for illegal dismissal before the Regional Arbitration Branch, Branch
XI of the NLRC in Davao City. On 26 April 1991, the labor arbiter rendered judgment in favor
of petitioners, thus
WHEREFORE, judgment is hereby rendered:
1. Declaring the dismissal of the complainants as illegal;
2. Ordering respondent Evergreen Farms, Inc. to immediately reinstate complainants to their
former position with six (6) months backwages computed as follows (26.17 x P79.00 per day
equals P2,067.43 x 6 months equals P12,404.58 times 5 complainants equals Sixty Two
Thousand Four Hundred Four & 58/100 (P62,404.58) PESOS. However, if reinstatement is no
longer feasible an additional one (1) month salary shall be awarded as a form of separation pay;
3. The claims for underpayment of wages is hereby dismissed for lack of merit.

SO ORDERED. 1
On 8 March 1993, public respondent dismissed the appeal of private respondent company for
lack of merit Private respondent filed a motion for reconsideration dated 1 April 1993. Acting on
said motion, public respondent issued a second resolution on 3 May 1993 affirming its earlier
resolution on illegal dismissal but deleting the award of backwages on the ground that the
termination of petitioners' employments "was the result of the latter's (private respondent)
mistaken interpretation of the law and that the same was therefore not necessarily attended by
bad faith, nor arbitrariness, . . .". 2
In their present petition, petitioners argue that the public respondent gravely abused its discretion
in rendering the second resolution which removed the award of backwages in their favor.
We rule in favor of petitioners.
It is undisputed that petitioners were illegally dismissed from employment. Article 280 of the
Labor Code 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 fired 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.
This provision draws a line between regular and casual employment, a distinction however often
abused by employers. The provision enumerates two (2) kinds of employees, the regular
employees and the casual employees. The regular employees consist of the following:
1) those 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 such service is continuous or
broken.
The law distinguishes between the two (2) kinds of employees to protect the interests of labor.
Thus, in the case of Baguio Country Club Corporation vs. NLRC, 3 the Court declared: "Its
language evidently manifests the intent to safeguard the tenurial interest of the worker who may
be denied the rights and benefits due a regular employee by virtue of lopsided agreements with

the economically powerful employer who can maneuver to keep an employee on a casual status
for as long as convenient . . . ".
In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same
kind of work they were hired to perform in September 1989. Both the labor arbiter and the
respondent NLRC agree that petitioners were employees engaged to perform activities necessary
in the usual business of the employer. As laborers, harvesters or sprayers in an agricultural
establishment which produces high grade bananas, petitioners' tasks are indispensable to the
year-round operations of respondent company. This belies the theory of respondent company that
the employment of petitioners was terminated due to the expiration of their probationary period
in June 1990. If at all significant, the contract for probationary employment was utilized by
respondent company as a chicanery to deny petitioners their status as regular employees and to
evade paying them the benefits attached to such status. Some of the petitioners were hired as far
back as 1985, although the hiring was not continuous. They were hired and re-hired in a span of
from two to four years to do the same type of work which conclusively shows the necessity of
petitioners' service to the respondent company's business. Petitioners have, therefore, become
regular employees after performing activities which are necessary in the usual business of their
employer. But, even assuming that the activities of petitioners in respondent company's
plantation were not necessary or desirable to its business, we affirm the public respondent's
finding that all of the complainants (petitioners) have rendered non-continuous or broken service
for more than one (1) year and are consequently considered regular employees. 4
We do not sustain public respondent's theory that private respondent should not be made to
compensate petitioners for backwages because its termination of their employment was not made
in bad faith. The act of hiring and re-hiring the petitioners over a period of time without
considering them as regular employees evidences bad faith on the part of private respondent. The
public respondent made a finding to this effect when it stated that the subsequent rehiring of
petitioners on a probationary status "clearly appears to be a convenient subterfuge on the part of
management to prevent complainants (petitioners) from becoming regular employees." 5
Reliance by public respondent on the case of Manila Electric Company vs. NLRC 6 is misplaced.
In that case, the Court ordered the reinstatement of an employee, without backwages because,
although there was a valid cause for dismissal, the penalty was too severe for an employee who
had rendered service for an uninterrupted period of twenty (20) years with two commendations
for honesty. In the case at bar, there is no valid cause for dismissal. The employees (petitioners)
have not performed any act to warrant termination of their employment. Consequently,
petitioners are entitled to their full backwages and other benefits from the time their
compensation was withheld from them up to the time of their actual reinstatement.
WHEREFORE, the Resolution of the National Labor Relations Commission dated 3 May 1993
is modified in that its deletion of the award for backwages in favor of petitioners, is SET ASIDE.
The decision of the Labor Arbiter dated 26 April 1991 is AFFIRMED with the modification that
backwages shall be paid to petitioners from the time of their illegal dismissal on 25 June 1990 up
to the date of their reinstatement. If reinstatement is no longer feasible, a one-month salary shall
be paid the petitioners as ordered in the labor arbiter's decision; in addition to the adjudged
backwages.

SO ORDERED.