HACIENDA LEDDY / RICARDO GAMBOA v.

PAQUITO
VILLEGAS
FACTS

Paquito: employee at Hacienda Leddy as early

as 1960 (when it was still named Hacienda
Teresa and owned by Ricardo Gamboa, Sr.. Now
owned by son Ricardo Gamboa, Jr.)
o
Sugar farming job 8hrs/day, 6d/wk, not
<302d/yr P45/day
o
Also worked at Rickys coconut lumber
business (P34/d for 8hr work)

(6/9/93) Ricky went to Paquitos house and told

him that his services were no longer needed
without prior notice or valid reason

Paquito filed complaint for illegal dismissal 1 yr

later

Ricky denied dismissal

o
Paquito was casual employee doing
odd jobs, paid on a piece-rate basis
w/o supervision

admitted that Paquito worked

in farm owned by father, doing
casual and odd jobs till the
latters death in 1993.
o
Paquito also given benefit of occupying
small portion of land where his house
was erected
o
Paquito stopped working in farm on
1992
o
RETRACTED statement: only time
Paquito worked in farm was on 1993
when he was contracted to cut coconut
lumber
o
Asked Paquito to vacate his property
but he refused
o
Surmises that Paquito filed complaint to
gain leverage so he would not be
evicted from land he is occupying

LA: illegal dismissal

NLRC: LA decision set aside

CA: LA decision reinstated

It is the NATURE of the activities performed in

relation to particular business or trades
considering all circumstances, and in some cases
the length of time of its performance and
continued existence.
Paquitos length of service indication of regularity
of employment by operation of law

>20 yrs of service

Privilege of erecting house inside hacienda

o
Act of good will by ER either out of
gratitude of for ERs convenience as the
nature of work calls for it

Long period of doing odd jobs necessary or

desirable to trade or business

A280(2):
(2) those casual employees who have rendered
at least one year of service, whether continuous
or broken, with respect to activity in which he is
employed2

Paquito passed the reasonable connection test

o
while length of time not controlling test
to determine regularity of employment,
it is indicative of WON he was hired to
perform tasks necessary and
indispensable to usual business or trade
o
Paquito was repeatedly rehired over
long period of time
Payment on a piece-rate basis does not negate
regular employment

Only a method of compensation, does not define

labor relations3
Petitioner failed to prove abandonment of work by
Paquito

Does not make sense why Paquito would

suddenly stop working for no reason after more
than 20 years4

2 Integrated Contractor and Plumbing Works, Inc. v. NLRC.

ISSUE: WON Paquito is a casual employee. NO

Reasonable connection test. If EE has been performing job for at least 1 yr,
law deems repeated and continuing need for performance as sufficient
evidence of necessity

HELD:
LC draws fine line between REGULAR and CASUAL
employees1

Notwithstanding agreements to contrary, what

determines whether employment is regular or
casual is NOT the will and word of ER, much less
procedure of hiring or manner of paying salary.

3 A97 LC. Wage: remuneration or earnings, capable of being expressed in

1 Baguio Country Club v. NLRC. Intent to safeguard tenurial interest of

worker who may be denied the rights and benefits due a regular employee
by virtue of lopsided agreements with economically powerful ER

terms of money whether fixed or ascertained on a time, task, piece or

commission basis

4 To justify abandonment of work: proof of deliberate and unjustified

refusal of EE to resume employment. Shown by OVERT ACTS. Burden of
proof on ER.

Filing of complaint negates intention of

abandoning work
Delay of >1 yr okay: A291 LC provides for 3 yr
period; Paquito w/o educational attainment and
could not have known that he has rights as a
regular EE protected by law

CONCLUSION: illegal dismissal

FORTUNATO MERCADO (and 15 others) v. NLRC &

AURORA CRUZ
FACTS:

Petitioners: agricultural workers utilized by

private respondents (Aurora Cruz, Francisco
Borja, Leticia Borja and Sto. Nino Realty Inc.) in
all agricultural phases of work on the 7 ha of
rice land and 10 ha of sugar land owned by the
latter

Aurora Cruz: petitioners NOT regular EEs

o
Services were engaged through supply
workers (mandarols [Sps Fortunato and
Rosa Mercado]) to do particular phase
of agricultural work necessary in rice
production and/or sugar cane
production, after which they are free to
render services to other farm owners

LA: NOT regular EEs

o
Nature of hiring phases of work for
definite period of time, after which
services available to other farm ownrs
o
Sworn statement of one of petitioners,
Fortunato Mercado Jr.: they were hired
only as casuals, on on and off basis,
thus it was within prerogative of Aurora
WON to take them in for further work
after phase is completed
o
Real cause of complaint probably
because of filing of criminal complaint
for theft against Reynaldo Mercado, son
of the mandarols (petitioners are all
related)

NLRC: affirmed LA

Petitioners: employment, even if seasonal,

continued for so many years that by express
provision of A280 LC, they have become regular
and permanent employees
o
Also invoke Policy Ins #12: what
determines regularity or casualness is
not emp contract, but NATURE of job
o
>1yr : regular
o
They have been doing all phases of
agricultural work for so many yrs,
activities necessary, desirable and
indispensable to business

Respondents: only hired as casuals

o
Chief of Special Task force of NLRC
Regional office had same finding rule
on findings of fact of admin agencies

NLRC filed separate comment

o
Petitioners cannot be deemed to be
regular: they fall under EXCEPTION in
A280

except x x x where work or

services to be performed is
seasonal in nature and the

employment is for the duration

of the season.
ISSUE: WON petitioners are regular employees. NO.
casual only
HELD:
First par of A280 LC degines regular employees: regular
where activities are necessary or desirable to business,
EXCEPT for project employees

Project employee:
1. Fixed for specific project or undertaking,
termination determined @ time of
engagement
2. Work SEASONAL IN NATURE, employment
for duration of season
2nd par of A280 LC: casual employees who have rendered
>1yr service: REGULAR

Petitioners contend that this proviso is applicable

to their case
Proviso applicable only to employees who are
deemed casuals, but not to the project employees
nor te regular EEs treated in A280(1)5
Petitioners are SEASONAL employees

Employment ends upon completion of project or

season

Termnation NOT illegal dismissal

5 Office of proviso: qualify or modify only phrase immediately preceding it

or restrain or limit generality of clause that it immediately follows. To be
construed with regerence to imm preceding part of provision to which it is
attached, not to statute itself or to other exceptions. Only exception: clear
legislative intent. P.I. 12.: Proviso in A280(2) not designed to stifle smallscale businesses nor to oppress agricultural land owners to further interests
of laborers. Only seeks to eliminate abuses of ERs against EEs

ALUMAMAY JAMIAS, JENNIFER MATUGUINAS &

JENNIFER CRUZ V. NLRC & INNODATE PHIL. INC.
INNODATA PROCESSING CORP.
FACTS:

Innodata) a domestic corporation engaged in the

business of data processing and conversion for
foreign clients hired petitioners as manual editor
and date encoders (1996)

Contracts expired. Pet. filed complaint for illegal

dismissal: made it appear that they had been
hired as project employees in order to prevent
them from becoming regular employees

LA: dimissed
o
knowingly signed their respective
contracts in which the durations of their
engagements were clearly stated; and
that their fixed term contracts, being
exceptions to Article 280 of the Labor
Code, precluded their claiming
regularization

NLRC: affirmed
o
Article 280 of the Labor Code did not
prohibit employment contracts
with fixed periods provided the
contracts had been voluntarily entered
into by the parties
o
Hired for definite period (1yr)
o
decisive determinant in term of
employment should not be the activities
that the employee is called upon to
perform, but the day certain agreed
upon by the parties for the
commencement and termination of
their employment relationship

CA: upheld NLRC

o
desirability and necessity of the
functions being discharged by the
petitioners did not make them regular
employees

Pet: nature of employment in Innodata

had been settled in Villanueva v. National Labor
Relations Commission (Second Division)23 and
Servidad v. National Labor Relations
Commission,24 whereby the Court accorded
regular status to the employees because the
work they performed were necessary and
desirable to the business of data encoding,
processing and conversion. STARE DECISIS

Innodata:
o
Villanueva and Servidad were different:
contained stipulations that violated the
provisions of the Labor Code on
probationary employment and security
of tenure, while this case contained
terms known and explained to the
petitioners who then willingly signed
the same
o
operations depended on the availability
of job orders or undertakings from its
client
o
Labor Code allowed term employment
as an exception to security of tenure;
and that the decisive determinant was

the day certain agreed upon by the

parties, not the activities that the
employees were called upon to
perform
ISSUE: WON petitioners were fixed-term EEs.
A fixed period in a contract of employment
does not by itself signify an intention
to circumvent Article 280 of the Labor Code
provision contemplates three kinds of employees,
namely: (a) regular employees; (b) project employees;
and (c) casuals who are neither regular nor project
employees.6

Article 280 does not preclude an agreement

providing for a fixed term of employment
knowingly and voluntarily executed by the
parties
It was a fixed term agreement

whether or not the employee is assigned to

carry out a specific project or undertaking, the
duration or scope of which was specified
at the time of his engagement

completion or termination of the project

determined at the time the employee is engaged

must be: (1) knowingly and voluntarily agreed

upon by the parties7 (2) employer and employee
dealt with each other on more or less equal
terms8
petitioners knowingly agreed to the
terms of and voluntarily signed their respective
contracts

it would be unusual for a company like Innodata

to undertake a project that had no relationship
to its usual business.49 Also, the necessity and
desirability of the work performed by the
employees are not the determinants in term
employment, but rather the day certain
voluntarily agreed upon by the parties
Stare decisis does not apply where facts are
different

What the Court invalidated in Innodata

Philippines, Inc. v. Quejada-Lopez
was the purported fixed-term contract that
provided for two periods a fixed

The nature of employment of a worker is

determined by law, regardless of any stipulation in the contract
to the contrary.39 Brent School, Inc. v. Zamora. clause referring
to written contracts should be construed to refer to agreements
entered into for the purpose of circumventing the security of
tenure.

7
, without any force, duress or improper pressure being brought to bear
upon the employee

8
with no moral dominance whatsoever being exercised by the former on the
latter

term of one year under paragraph 1 of the

contract, and a three-month period
under paragraph 7.4 of the contract that in
reality placed the employees
under probation

FUJI TELEVISION NETWORK v. ARLENE ESPIRITU

FACTS:

o
o

DOCTRINE: Burden of ER to prove that person whose

services it pays for is an independent contractor rather
than regular EE with or without fixed term

o
o

FACTS:

Arlene engaged by Fuji as news

correspondent/producer in 2005: report Ph news
to Fuji (thru Manila Bureau field office

Employment contract initially provided for 1 y

term, but was successively renewed on yearly
basis with salary adj

Diagnosed with lung cancer in 2009. Fuji told

her that it will have a problem renewing her
contract, but Arlene insisted that she was still fit
to work

Arlene and Fuji signed nonrenewal contract:

no renewal after expiration in May 31, 2009

Arlene acknowledged receipt of USD18050

(monthly salary from Mar-May, bonuses and
separation pay), but signed UNDER PROTEST

Filed complaint for illegal dismissal; had no

other recourse but to sign, otherwise amt would
have been withheld

LA: dismissed. Arlene and independent

contractor

NLRC: reversed. Continuous rendering of

services necessary and desirable to business

CA: affirmed NLRC

o
Regular: necessary and desirable;
continuous rehiring
o
Sonza N/A: not contracted on acct of
peculiar ability, special talent, or skill.
Everything used by her in her work
owned by Fuji
o
Signing of contract not voluntary

Fuji: A hired as stringer, an independent

contractor
o
No control
o
Salary was higher than normal rate
o
Annual renewal of contract was upon
Arlenes insistence
o
Fuji agreed because she had skills
that distinguished her from other
EEs
o
A and Fuji dealt on equal terms
o
A freely agreed not to renew
(evidenced by emails; showed power
to bargain)
o
Employment ceased upon expiration of
contract. Fixed term

Arlene:

Fuji had control and supervision

Successive renewal = necessary and
desirable
Fuji owned things she used for work
Sonza ruling NA: Jay Sonza was a news
anchor, talk show host celebrity
status

ISSUE: WON Arlene a regular or fixed-term contractual

employee
HELD:
Classification of Employees
(accdg to A280)
1. Regular
a. Perform activities necessary and
desirable to business
b. Casual employees with >1yr service
2. Project
3. Seasonal
4. Casual
(Accdg to Brent v. Zamora)
5. Fixed term
a. Determining factor not activities, but
day certain
b. Where fixed term essential and natural
appurtenance (e.g. overseas contracts)
Distinction bt. FT, Independent Con., and Regular
FT: informed of fixed terms, both parties on equal footing
IC: distinct and independent business, performs job on
its own, free from control of principal. No ER-EE rel
between IC and P.

Also recognized in A106 LC and DO 18-A-11

KINDS OF ICs
o
Engaged in legitimate job contracting
o
individuals with unique skills and
talents that set them apart from
ordinary EES
Fujis argument that A an IC under FT contract
contradictory

EEs in FT contracts cannot be ICs because in FT

contracts, no ER-EE rel exists

Test for FT is the DAY CERTAIN test

Regular: determining factor is necessity and

desirability of work

ICs: no ER-EE rel with Ps

CONCLUSION: A regular EE with FT contract
EE can be regular even with an FT contract
As long as it was EE who requested, or bargained, that
contract have definite date or termination, or that it was
freely entered into by both parties