TERMINATION OF EMPLOYMENT – Arts.

293 - 302

Security of Tenure

1. Rance et. al vs. NLRC, GR 68147, June 30, 1988

FACTS:

The UNION expelled 125 members, including petitioners, on the ground of disloyalty, in that they
allegedly joined the NAFLU, and acts inimical to the interests of the Union based on the findings and
recommendations of the panel of investigators. Because of the expulsion, petitioners were dismissed by
POLYBAG. Petitioners sued for reinstatement and backwages stating their dismissal was without due
process. Both the LA and the NLRC found the CBA and the "Union Security Clause" valid and considered
the termination of the petitioners justified for having committed an act of disloyalty to the UNION by having
affiliated with and having joined NAFLU while still members of the UNION.

The petitioners insist that they did not affiliate themselves with NAFLU. They claim that there is a
connivance between POLYBAG and the UNION in their illegal dismissal in order to avoid the payment of
separation pay by POLYBAG. They also proved that they did not authorize NAFLU to file the NLRC case
by not signing the complaint, neither any membership application.

ISSUES: (1) Whether or not the petitioners committed acts of disloyalty; and (2) Whether or not the
requirements of due process were complied with.

HELD:

(1) No. The mere act of seeking help from NAFLU cannot constitute disloyalty as contemplated in
the Collective Bargaining Agreement. At most it was an act of self-preservation of workers who, driven to
desperation found shelter in the NAFLU who took the cudgels for them. There was a massive lay-off in
POLYBAG wherein the laid-off employees were not paid separation pays because the lay-off was due to
serious business reverses suffered by POLYBAG. They were instead given ½ sack of rice and P50 weekly
allowance. Those who accepted were made to sign blank papers. Petitioners complained that their pleas
for their union officers to fight for their right to reinstatement, fell on deaf ears. Their union leaders continued
working and were not among those laid-off, which explains the lack of positive action on the part of the
latter to help or even sympathize with the plight of the members. All they could offer was a statement
"marunong pa kayo sa may-ari ng kumpanya" ("you know more than the company owners"). Under the
circumstances, petitioners cannot be blamed for seeking help wherever it could be found.

(2) No. The petitioners contend that the requisites of due process were not complied with in that,
there was no impartial tribunal or union body vested with authority to conduct the disciplinary proceeding
under the union constitution and by-laws, and, that complainants were not furnished notice of the charge
against them, nor timely notices of the hearings on the same. Only two (2) of the expelled petitioners
appeared before the investigation panel. Most of the petitioners boycotted the investigation proceedings.
They alleged that most of them did not receive the notice of summons from respondent Union because they
were in the provinces. This fact was not disproved by private respondents. Petitioners further claim that
they had no idea that they were charged with disloyalty; those who came were not only threatened with
persecution but also made to write the answers to questions as dictated to them by the Union and company
representatives. These untoward incidents prompted petitioners to request for a general investigation with
all the petitioners present but their request was ignored by the panel of investigators. Again, these
allegations were not denied by private respondents. All told, it is obvious, that in the absence of any full
blown investigation of the expelled members of the Union by an impartial body, there is no basis for
respondent Union's accusations.

The employer is bound to exercise caution in terminating the services of his employees especially
so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement, as
in the instant case. Dismissals must not be arbitrary and capricious. Due process must be observed in
dismissing an employee because it affects not only his position but also his means of livelihood. Employers
should, therefore, respect and protect the rights of their employees, which include the right to labor. Due
process must be observed in dismissing an employee because it affects not only his position but also his
means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which
include the right to labor.
 2. Kiamco vs. NLRC, GR 129449, June 29, 1999

FACTS:

On 1 July 1992, the private respondent Philippine National Oil Company (PNOC), through its
Energy Research and Development Division, later incorporated as PNOC-Energy Development
Corporation (PNOC-EDC) (now its co-private respondent herein), hired petitioner Cisell Kiamco as a project
employee in its Geothermal Agro-Industrial Plant Project in Valencia, Negros Oriental. The Contract of
Employment stipulated among others that Kiamco was being hired by the company as a technician for a
period of five (5) months from 1 July 1992 to 30 November 1992, or up to the completion of the project,
whichever would come first, at a monthly salary of P3,500.00.

After the termination of the contract, a second one was entered into by the parties containing
basically the same terms and conditions except that the work-time was reduced to twenty-two (22) days
per month instead of twenty-six (26) days as stipulated in the first contract. The period of employment was
from 1 December 1992 to 30 April 1993. Thereafter, Kiamco was again re-hired. This time the contract was
for six (6) months spanning 1 May 1993 to 30 November 1993 with an increased salary of P3,850.00 per
month.

However, on 20 October 1993, Kiamco received a Memorandum from the administration

department demanding an explanation from him on certain infractions he allegedly committed. In a letter
dated 22 October 1993 Kiamco tried to explain his side but private respondents found his explanation
unsatisfactory. On 28 October 1993 Kiamco received a Memorandum placing him under preventive
suspension from 1 November 1993 to 30 November 1993 pending further investigation. No investigation
however was ever conducted. Private respondents contended that an investigation was not necessary since
Kiamco had ceased to be an employee ipso facto upon the expiration of his employment contract on 30
November 1993. On 1 December 1993 Kiamco reported back to work but was prevented by security guards
from entering the company premises.

On 25 April 1994 Kiamco filed before the NLRC Sub-Regional Arbitration Branch No. VII,
Dumaguete City, a Complaint for illegal suspension and dismissal against the PNOC. He prayed that he be
reinstated to his former position and paid back wages. On 30 June 1995 Labor Arbiter Geoffrey P.
Villahermosa rendered a Decision dismissing the complaint for lack of merit. According to the Labor Arbiter,
the three (3) employment contracts were freely and voluntarily signed by Kiamco and the PNOC
representatives. The contracts plainly stated that Kiamco was being hired for a specific project and for a
fixed term. Therefore, Kiamco could not question his dismissal since it was in accordance with his
employment contract.

Kiamco appealed the decision of the Labor Arbiter to public respondent National Labor Relations
Commission (NLRC) which on 27 September 1996 reversed the Labor Arbiter and declared the complainant
as a regular employee of the respondents and to have been illegally dismissed by the latter. Ordering
respondents to REINSTATE the complainant to his former position without loss of seniority rights and
privileges with back wages from the date of his dismissal up to actual reinstatement less any income he
may have earned during the pendency of the case.

On 12 November 1996 private respondents filed a Motion for Reconsideration contending that
NLRC erred in holding that Kiamco was a regular employee and that the findings of the Labor Arbiter that
Kiamco was a project employee should be affirmed. On 23 January 1997 the NLRC issued a Resolution
modifying its 27 September 1996 Decision wherein the complainantappellant is declared a project
employee and to continue with said employment until the full completion of the project.

ISSUES: (1) Whether or not the petitioner is a regular employee or a project employee; and (2) Whether
petitioner is entitled to reinstatement without loss of seniority rights and privileges and to the payment of
full back wages

HELD:
 (1) Yes. The petitioner is a project employee. 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. As
defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the
completion or termination of such project or undertaking has been determined at the time of engagement
of the employee.

Kiamco was correctly labeled by the NLRC as a project employee. The basis for this conclusion is
indeed well-founded. The three (3) Contracts of Employment entered into by Kiamco clearly established
that he was a project employee because (a) he was specifically assigned to work for a particular project,
which was the Geothermal Agro-Industrial Demonstration Plant Project of private respondents, and (b) the
termination and the completion of the project or undertaking was determined and stipulated in the contract
at the time of his employment.

(2) Yes. The petitioner is entitled to reinstatement and payment of back wages. The normal
consequences of a finding that an employee has been illegally dismissed are, that the employee becomes
entitled to reinstatement to his former position without loss of seniority rights and the payment of back
wages. Reinstatement restores the employee who was unjustly dismissed to the position from which he
was removed, that is, to his status quo ante dismissal; while the grant of back wages allows the same
employee to recover from the employer that which he had lost by way of wages as a result of his dismissal.

It cannot be gainsaid that the dismissal of an employee should be for any of the just and authorized
causes enumerated in the Labor Code. However, petitioners case no proof or evidence was ever presented
by private respondents to justify his termination. On the contrary, they relied solely on the expiration of the
employment contract to legitimize his termination, instead of the administrative infractions he allegedly
committed, thus abandoning altogether any valid cause private respondents might have under the Labor
Code that could justify his dismissal. In termination cases, the burden of proving just and valid cause for
dismissing an employee from his employment rests upon the employer, and the latter’s failure to do so
results in finding that the dismissal is unjustified.

Nonetheless even if the last contract signed by Kiamco fixed the term of his employment from 1
May 1993 to 31 October 1993, this did not give private respondent corporations the unbridled authority to
terminate Kiamco upon the expiration thereof. As discussed earlier, Kiamco was a project employee who
was specifically assigned to work in a particular project. Therefore, in the absence of any valid reason to
terminate him, private respondents should have retained his services until the actual completion of the
project. In this case, the duties that the complainants service is needed until the full completion of the so-
called Geothermal Agroindustrial Demonstration Project. It is unrefuted on record that when complainant’s
service was terminated, work in the project was still going on.

Lastly, private respondents argue against reinstatement on the basis of the strained relations
principle. They claim that after the termination of Kiamco he had incurred the ire and anger of his co-
employees and superiors. However, the principle of strained relations cannot be applied indiscriminately. It
should be proved that the employee concerned occupies a position where he enjoys the trust and
confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism
may be generated as to adversely affect the efficiency and productivity of the employee concerned.
Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered
between the parties as a result of litigation. An employee who shall assert his right could be easily separated
from the service, by merely paying his separation pay on the pretext that his relationship with his employer
had already become strained.
 3. Maglutac vs. NLRC, GR 78345, Sept. 21, 1990

FACTS:

Jose Maglutac, was employed by Commart (Phils.), Inc. and rose to become Manager of its Energy
Equipment Sales. Eventually, he received a notice of termination signed by Joaquin Cenzon, VP-GM of
CMS International, a corporation controlled by Commart. Thereafter, Jose Maglutac filed a complaint for
illegal dismissal against Commart and Jesus T. Maglutac, President and Chairman of Commart. The
complainant alleged that his dismissal was part of a vendetta drive against his parents who dared to expose
the massive and fraudulent diversion of company funds to the company president’s private accounts,
stressing that complainant’s efficiency and effectiveness were never put to question when very suddenly
he received his notice of termination.

Commart and Jesus T. Maglutac justified the dismissal for lack of trust and confidence cos of Jose
and family’s establishment of a company, MM International, in direct competition with Commart. The Labor
Arbiter found that Jose was illegally dismissed and ordered his reinstatement with full back wages. Upon
appeal, the NLRC affirmed the decision but deleted the award for moral and exemplary damages and
absolved Jesus T. Maglutac from any personal liability.

ISSUE: Whether or not the President can be held personally liable for non-payment of back wages.

HELD:

Yes. The Labor Arbiter was correct in ruling that Jesus T. Maglutac should be held jointly and
severally liable with Commart. The Vice President of a corporation who was the most ranking officer of the
corporation can be held Jointly and severally liable with the corporation for the payment of the unpaid wages
of its president. The president or presidents of the corporation may be held liable for the corporation’s
obligations to its workers. The responsible officer of an employer corporation can be held personally, not to
say even criminally, liable for non-payment of backwages. Not only was Jesus T. Maglutac the most ranking
officer of Commart at the time of the termination of the complainant, it was likewise found that he had a
direct hand in the latter’s dismissal. Only the responsible officer of a corporation who had a hand in illegally
dismissing an employee should be held personally liable for the corporate obligations arising from such act.
Regular & Casual Employment / Kinds of Employment

1. De Leon vs. NLRC, GR 70705, Aug. 21, 1989

FACTS:

The petitioner, Mosies De Leon, was employed by respondent company La Tondeña as

maintenance man whose work consisted mainly of painting company building and equipment, and other
odd jobs relating to maintenance. After having worked for respondent company for more than a year,
petitioner requested that he be included in the payroll of regular employees, to which the former responded
by dismissing petitioner from his employment. Petitioner having been refused reinstatement, filed a
complaint before the Labor Arbiter. De Leon asserts that he is a regular employee performing similar
functions as of a regular maintenance and was rehired by respondent company’s labor agency to perform
the same tasks.

For its defense, La Tondena claims that petitioner was a casual worker hired only to paint a certain
building in the premises and that his work as painter terminated upon completion of the job. The Labor
Arbiter ruled in favor of petitioner but was reversed on appeal by the NLRC tribunal.

ISSUE: Whether or not the petitioner De Leon is a regular employee of respondent.

HELD:

Yes. De Leon is a regular employee, and is entitled to benefits under the Labor Code. 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.
It is not tenable to argue that the painting and maintenance work of petitioner are not necessary in
respondent’s business of manufacturing liquors and wines, just as it cannot be said that only those who are
directly involved in the process of producing wines and liquors may be considered as necessary employees.
Otherwise, there would have been no need for the regular Maintenance Section of respondent company’s
Engineering Department, manned by regular employees whom petitioner often worked with.

The law demands that the nature and entirety of the activities performed by the employee be
considered. In the case of petitioner, the painting and maintenance work given him manifest a treatment
consistent with a maintenance man and not just a painter, for if his job was truly only to paint a building
there would have been no basis for giving him other work assignments in between painting activities.

Furthermore, the petitioner performed his work of painting and maintenance activities during his
employment in respondent’s business which lasted for more than one year. Certainly, by this fact alone he
is entitled by law to be considered a regular employee. And considering further that weeks after his
dismissal, petitioner was rehired by the company through a labor agency and was returned to his post in
the Maintenance Section and made to perform the same activities that he used to do, it cannot be denied
that as activities as a regular painter and maintenance man still exists.
 2. AM Oreta vs. NLRC, GR 74004, Aug. 10, 1989

FACTS:

The private respondent, Sixto Grulla, Jr., was engaged by Engineering Construction and Industrial
Development Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its projects in
Jeddah, Saudi Arabia. The contract of employment, which was entered into June 11, 1980, was for a period
of twelve (12) months. Respondent Grulla left the Philippines for Jeddah, Saudi Arabia on August 5, 1980.

On August 15, 1980, Grulla met an accident which fractured his lumbar vertebra while working at
the jobsite. He was rushed to the New Jeddah Clinic and was confined there for twelve (12) days. On
August 27, 1980, Grulla was discharged from the hospital and was told that he could resume his normal
duties after undergoing physical therapy for two weeks. On September 18, 1980, respondent Grulla
reported back to his Project Manager and presented to the latter a medical certificate declaring the former
already fit for work. Since then, he started working again until he received a notice of termination of his
employment on October 9, 1980, because he has not performed his duties satisfactorily within the
probationary period of three months.

In December, 1981, Grulla filed a complaint for illegal dismissal, recovery of medical benefits,
unpaid wages for the unexpired ten (10) months of his contract and the sum of P1,000.00 as reimbursement
of medical expenses against A.M. Oreta and Company, Inc., and Engineering Construction and Industrial
Development Co. (ENDECO) with the Philippine Overseas Employment Administration (POEA).

The POEA rendered a decision that complainant’s dismissal was illegal and warrants the award of
his wages for the unexpired portion of the contract. Petitioner appealed from the adverse decision to
respondent Commission. Respondent Commission dismissed the appeal for lack of merit and affirmed in
toto the decision of the POEA.

ISSUE: Whether or not Grulla’s dismissal was illegal.

HELD:

Yes. The Court finds that Grulla’s dismissal was illegal because he was regular employee entitle to
security of tenure, and that the ground for his dismissal is not among those just causes for dismissal
provided in the Labor Code. Policy Instructions No. 12 of the then Minister of Labor (Now Secretary of Labor
and Employment) which provides that PD 850 has defined the concept of regular and casual employment.
What determines regularity or casualness is not employment contract, written or otherwise, but the nature
of the job. If the job is usually necessary or desirable to the main business of the employer, the employment
is regular. Further, the Labor Code provides that 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
engagement. An employee who is allowed to work after a probationary period shall be considered a regular
employee.

A perusal of the employment contract reveals that although the period of employment of respondent
Grulla is twelve (12) months, the contract is renewable subject to future agreements of the parties. It is clear
from the employment contract that the respondent Grulla was hired by the company as a regular employee
and not just mere probationary employee. The law is clear to the effect that in all cases involving employees
engaged on probationary period basis, the employer shall make known to the employee at the time he is
hired, the standards by which he will qualify as a regular employee. Nowhere in the employment contract
executed between petitioner company and respondent Grulla is there a stipulation that the latter shall
undergo a probationary period for three months before he can qualify as a regular employee. There is also
no evidence on record showing that the respondent Grulla has been appraised of his probationary status
and the requirements which he should comply in order to be a regular employee. In the absence of these
requisites, there is justification in concluding that respondent Grulla was a regular employee at the time he
was dismissed by petitioner. As such, he is entitled to security of tenure during his period of employment
and his services cannot be terminated except for just and authorized causes enumerated under the Labor
Code and under the employment contract. Granting, in gratia argumenti, that respondent is a probationary
employee, he cannot, likewise, be removed except for cause during the period of probation. Although a
probationary or temporary employee has limited tenure, he still enjoys security of tenure. During his tenure
of employment or before his contract expires, he cannot be removed except for cause as provided by law.

The alleged ground of unsatisfactory performance relied upon by petitioner for dismissing
respondent Grulla is not one of the just causes for dismissal provided in the Labor Code. Neither is it
included among the grounds for termination of employment under Article VII of the contract of employment
executed by petitioner company and respondent Grulla. Moreover, petitioner has failed to show proof of the
particular acts or omissions constituting the unsatisfactory performance of Grulla of his duties, which was
allegedly due to his poor physical state after the accident. Contrary to petitioner's claims, records show that
the medical certificate issued by the hospital where respondent Grulla was confined as a result of the
accident.

The Court further finds a denial of due process as respondent Grulla was not, in any manner,
notified of the charges against him before he was outrightly dismissed. Neither was any hearing or
investigation conducted by the company to give the respondent a chance to be heard concerning the
alleged unsatisfactory performance of his work.

In view of the foregoing, the dismissal of respondent Grulla violated the security of tenure under
the contract of employment which specifically provides that the contract term shall be for a period of twelve
(12) calendar months. Consequently, the respondent Grulla should be paid his salary for the unexpired
portion of his contract of employment which is ten (10) months.
 3. Ecal vs. NLRC, GR Nos. 92777-78, March 13, 1991

FACTS:

This case traces its origin from two consolidated complaints for illegal dismissal and money claims
filed by petitioners against private respondents Hi-Line Timber, Inc. and Jimmy Matchuka, the company
foreman.

The petitioners alleged, among others, that they have been employed by Hi-Line as follows: Isagani
Ecal, from February, 1986; Crisologo Ecal, Buenaobra, Bandogelio, Fernando, Bigata, Ferrer and Tanael,
from March 3, 1986; and Castillo and Echague, from May 1, 1986; that except for Isagani Ecal, they were
all receiving a salary of P 35.00 a day; that they were required to report for work 7 days a week including
rest days, legal holidays, except Christmas and Good Friday from 7:00 A.M. to 7:00 P.M.; that they were
not given living allowance, overtime pay, premium pay for rest days and legal holidays, 13th month pay and
service incentive leave pay; and, that on June 6, 1987, they were not allowed to work and instead were
informed that their services were no longer needed.

The private respondents, on the other hand, denied the existence of an employer-employee
relationship between the company and the petitioners claiming that the latter are under the employ of an
independent contractor, petitioner Isagani Ecal, an employee of the company until his resignation on
February 4, 1987.

The labor arbiter rendered his decision dated June 10, 1988 finding no employer-employee
relationship between the parties. Thus, he dismissed the two cases for lack of merit. On appeal, public
respondent National Labor Relations Commission (NLRC) affirmed the aforesaid decision of the labor
arbiter in a resolution dated October 2, 1989. Hence, this petition for certiorari.

ISSUE: Whether or not there exists an employer-employee relationship between the petitioners and the
private respondent Hi-Line Timber.

HELD:

Yes. There exists an employer-employee relationship in this case. To determine whether there
exists an employer-employee relationship, the four-way test should be applied, namely: (1) selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employee's conduct—the last being the most important element. Neither the NLRC nor the labor
arbiter utilized these guides in their disposition of the complaint.

The Court carefully examined the records of the case and finds that the NLRC limited itself to a
superficial evaluation of the relationship of the parties based mainly on the company payrolls without regard
to the particular circumstances of the case. Further, the finding of the NLRC that Isagani Ecal is no longer
an employee of Hi-Line line is amply supported by the evidence on record. His resignation letter dated
February 4, 1987 stating "ako po ay magreresign na sa aking trabaho bilang "laborer" sapagka't nakita ko
na mas malaki ang kikitain kung mangongontrata na lamang " speaks for itself. This was unsuccessfully
rebutted by petitioners.

Thus, The Court finds petitioner Isagani Ecal to be a "labor-only" contractor, a mere supplier of
manpower to Hi-Line. Isagani Ecal was only poor laborer at the time of his resignation on February 4, 1987
who cannot even afford to have his daughter treated for malnutrition. He resigned and became a supplier
of laborers for Hi-Line, because he saw an opportunity for him to earn more than what he was earning while
still in the payroll of the company. At the same time, he continued working for the company as a laborer at
the kiln drying section. He definitely does not have sufficient capital to invest in tools and machineries.
Private respondents, however, claim that the business contracted by Ecal did not require the use of tools,
equipment and machineries and the contracted task had to be executed in the premises of Hi-Line.
Precisely, the job assigned to petitioners has to be executed within the work premises of Hi-Line where
they use the machineries and equipment of the company for the drying of lumber materials. Even the
company's personnel officer Elizabeth Natividad admitted that Ecal resigned in order to supply manpower
to the company on a task basis. By the very allegations of private respondents, it is quite clear that Isagani
Ecal only supplies manpower to Hi-Line within the context of "labor-only" contracting as defined by law.

There is also no question that the task performed by petitioners is directly related to the business
of Hi-Line. Petitioners were assigned to sort out the lumber materials whether wet or fresh kiln as to sizes
and to carry them from the stockpile to the dryer where they are loaded for drying after which they are
unloaded. The work of petitioners is an integral part of the operation of the sawmill of Hi-Line without which
production and company sales will suffer. A finding that Isagani Ecal is a "labor-only" contractor is equivalent
to a finding that an employer-employee relationship exists between the company and Ecal including the
latter's "contract workers" herein petitioners, the relationship being such as provided by the law itself. Since
petitioners perform tasks which are usually necessary or desirable in the main business of Hi-Line, they
should be deemed regular employees of the latter and as such are entitled to all the benefits and rights
appurtenant to regular employment.

Being regular employees, they should have been afforded due process prior to their dismissal.
Instead they were unceremoniously dismissed on June 6, 1987 when they were not allowed to enter the
company's premises by the security guards. The argument of private respondents that the contract of Ecal
with the company expired cannot be sustained. Petitioners may only be dismissed for an authorized or just
cause and after due process. Petitioners, having been illegally dismissed on June 6, 1987, are entitled to
backwages equivalent to three years without qualifications and deductions in line with prevailing
jurisprudence.
 4. Magante vs. NLRC, GR 74969, May 7, 1990

FACTS:

The private respondent, Constress Philippines Inc., is engaged in the concrete structural business
with address at Ortigas Avenue, Pasig, Metro Manila. Petitioner Telesforo Magante, on the other hand, was
employed by the former as a carpenter from April 17, 1980 until his dismissal on March 6, 1982 earning
three hundred pesos (P300.00), more or less, a week excluding allowance and rendering about fourteen
(14) hours of work daily from 7:00 in the morning to 10:00 in the evening. His work involved the making of
molds (forma or siding of cement post) for bridges, buildings, charcoal builder sea file, and others.
Apparently. petitioner was never assigned to work outside the plant of private respondent.

Every three (3) months, petitioner was made to fill up and sign an employment contract relating to
a particular phase of work in a specific project. Allegedly, the terms of the contract written in English were
not understood by petitioner nor was the same explained to him. The last hiring agreement entered into
between petitioner and private respondent was on December 7, 1981 which was to take effect on even
date with an agreed compensation of P21.36 a day. On March 6, 1982, private respondent posted a notice
of termination on its bulletin board to take effect the following day, March 7, 1989, which included petitioner
and other employees as among those whose services were being terminated by private respondent.
Petitioner was told that he cannot work anymore because he is already old, that his contract had already
expired and was not renewed being a project employee. The termination of petitioner and his fellow workers
was reported to the Ministry of Labor.

Consequently, petitioner filed a complaint with the then Ministry (now Department) of Labor and
Employment for illegal dismissal. Labor Arbiter Domingo del Rosario rendered a decision on June 22, 1983
with the following pronouncement: The terms of the contract that complainant is a project worker is not the
determining factor of the status of complainant or any worker but the work performed by him and the place
where he performed his assignment. The contract entered into by respondent and complainant is more of
a scheme to evade its liability or obligation under the law. The public respondent NLRC further found that
upon completion of a particular phase of work in the project for which petitioner's services have been hired,
his termination was indubitably for cause. With these justifications, public respondent set aside the
appealed decision of the labor arbiter and entered a new judgment dismissing the complaint for lack of
merit.

ISSUE: Whether or not the public respondent NLRC committed grave abuse of discretion in reversing and
setting aside the decision of Labor Arbiter.

HELD:

The Court found merit in the petition as it sustained the position of the Solicitor-General that
petitioner Telesforo Magante was a regular employee of private respondent. As aptly observed by the
Solicitor-General, petitioner has established that since the very inception of his employment in 1980, he
was never deployed from project to project of private respondent but had been regularly assigned to perform
carpentry work under the supervision of a certain Bernardo Padaon who, since 1964 until his resignation
on January 2, 1982 worked for private respondent as the supervisor of its Carpentry Department. This goes
to show two things: that petitioner was assigned to perform tasks which are usually necessary or desirable
in the usual business or trade of private respondent; and that said assignments did not end on a project to
project basis, although the contrary was made to appear by private respondent through the signing of
separate employment contracts allegedly for different projects because it is indeed obvious that petitioner
continued to perform the same kind of work throughout his period of employment allegedly considered to
have been done on a project to project basis. Although petitioner had only rendered almost two years of
service, nevertheless this should not detract from his status of being a regular employee because as
correctly stated by the labor arbiter, the determining factor of the status of complainant-petitioner or any
worker is the nature of the work performed by the latter and the place where he performed his assignment.
 Moreover, if petitioner were employed as a "project employee" private respondent should have
submitted a report of termination to the nearest public employment office every time his employment is
terminated due to completion of each construction project, as required by Policy Instruction No. 20.
Throughout the duration of petitioner's employment, there should have been filed as many reports of
termination as there were construction projects actually finished if it were true that petitioner Telesforo
Magante was only a project worker.
 5. Beta Electric vs. NLRC GR 86408, Feb. 15, 1990

FACTS:

The petitioner hired the private respondent as clerk typist III 1 effective December 15, 1986 until
January 16, 1987. The petitioner gave her extensions on a monthly basis until March 15, 1987. On March
15, 1987, it gave her a further extension until April 30, 1987, which was on May 1 and June 1 until May 31,
1987 and June 30, 1987, respectively. 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 private respondent’s appointment is temporary.

HELD:

No. 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 contract-to-
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, "[t]he provisions of written agreement to the contrary
notwithstanding.

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 can not apply it here because clearly, the contract-to-
contract arrangement given to the private respondent was but an artifice to prevent her from acquiring
security of tenure and to frustrate constitutional decrees. The petitioner can not insist that the private
respondent had been hired "for a specific undertaking i.e. to handle the backlogs brought about by the
seasonal increase in the volume of her work." The fact that she had been employed purportedly for the
simple purpose of unclogging the petitioner's files does not make such an undertaking "specific" from the
standpoint of law because in the first place, it is "usually necessary or desirable in the usual business or
trade of the employer," a development which disqualifies it outrightly as a "specific undertaking", and in the
second place, because a "specific undertaking" is meant, in its ordinary acceptation, a special type of
venture or project whose duration is coterminous with the completion of the project, e.g., project work. It is
not the case in this proceeding.
 6. Kimberly Independent Labor Union vs. Drilon, GR 77629 & 78791, May 9, 1990

FACTS:

Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity) executed a three-year collective

bargaining agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and
General Workers' Organization (UKCEU-PTGWO). Within the 60-day freedom period prior to the expiration
of and during the negotiations for the renewal of the aforementioned CBA, some members of the bargaining
unit formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and
Nationalism-Organized Labor Association in Line Industries and Agriculture (KILUSAN-OLALIA)."

KILUSAN-OLALIA filed a petition for certification. KIMBERLY and (UKCEU-PTGWO) did not object
to the holding of a certification election but objected to the inclusion of the so-called contractual workers
whose employment with KIMBERLY was coursed through an independent contractor, Rank Manpower
Company (RANK for short), as among the qualified voters. Pending resolution of the petition for certification
election by the med-arbiter, KILUSAN-OLALIA filed a notice of strike charging KIMBERLY with unfair labor
practices based on the following alleged acts: (1) dismissal of union members (KILUSAN-OLALIA); (2) non-
regularization of casuals/contractuals with over six months of service; (3) non-implementation of
appreciation bonus for 1982 and 1983; (4) non-payment of minimum wages; (5) coercion of employees;
and (6) engaging in CBA negotiations despite the pendency of a petition for certification election.

Conciliation proceedings conducted by the bureau proved futile, and KILUSAN-OLALIA declared a
strike at KIMBERLY's premises. KIMBERLY petitioned MOLE to assume jurisdiction over the labor dispute.
Minister Augusto S. Sanchez issued an assumption order. activities. The Med-Arbiter Marasigan, who was
handling the certification election case, issued an order declaring the following as eligible to vote in the
certification election.

During the pre-election conference, 64 casual workers were challenged by KIMBERLY and
(UKCEU-PTGWO) on the ground that they are not employees, of KIMBERLY but of RANK. It was agreed
by all the parties that the 64 voters shall be allowed to cast their votes but that their ballots shall be
segregated and subject to challenge proceedings. The certification election was conducted on July I, 1986,
with the following results:

1. KILUSAN-OLALIA = 246 votes

2. (UKCEU-PTGWO) = 266 votes
3. NO UNION = 1 vote
4. SPOILED BALLOTS = 4 votes
5. CHALLENGED BALLOTS = 64 votes
————
TOTAL 581 votes

KILUSAN-OLALIA filed with the med-arbiter a "Protest and Motion to Open and Count Challenged
Votes" on the ground that the 64 workers are employees of KIMBERLY within the meaning of Article 212(e)
of the Labor Code. KIMBERLY filed an opposition to the protest and motion, asserting that there is no
employer-employee relationship between the casual workers and the company, and that the med-arbiter
has no jurisdiction to rule on the issue of the status med-arbiter opted not to rule on the protest until the
issue of regularization has been resolved by MOLE.

Then Minister Sanchez rendered the following, among others: 1. The service contract for janitorial
and yard maintenance service between KIMBERLY and RANK was declared legal; 2. The other casual
employees not performing janitorial and yard maintenance services were deemed labor-only contractual
and since labor-only contracting is prohibited, such employees were held to have attained the status of
regular employees, the regularization being effective as of the date of the decision; 3. UKCEU-PTGWO
having garnered more votes than KILUSAN-OLALIA was certified as the exclusive bargaining
representative of KIMBERLY's employees; KILUSAN-OLALIA contends that after finding that the 64
workers are regular employees of KIMBERLY, Minister Sanchez should have remanded the representation
case to the med-arbiter instead of declaring UKCEU-PTGWO as the winner in the certification election and
setting aside the med-arbiter's order which allowed the 64 casual workers to cast their votes.

The respondents argue that since the issues of regularization and representation are closely
interrelated and that a resolution of the former inevitably affects the latter, it was necessary for the former
labor minister to take cognizance of the representation issue; that no timely motion for reconsideration or
appeal was made from his decision of November 13, 1986 which has become final and executory; and that
the aforesaid decision was impliedly accepted by KILUSAN-OLALIA when it demanded from KIMBERLY
the issuance of regular appointments to its affected members in compliance with said decision, hence
petitioner employees are now stopped from questioning the legality thereof.

ISSUE: Whether or not said workers, not performing janitorial or yard maintenance service, became regular
employees of KIMBERLY.

HELD:

Yes. The said workers are regular employees of KIMBERLY. The Court finds and so holds that the
former labor minister gravely abused his discretion in holding that those workers not engaged in janitorial
or yard maintenance service attained the status of regular employees only on November 13, 1986, which
thus deprived them of their constitutionally protected right to vote in the certification election and choose
their rightful bargaining representative. of the challenged workers which is one of the issues covered by the
assumption order. The The Labor Code defines who are regular employees, as follows:

Art. 280. 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 under 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.

The law thus provides for 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. The individual petitioners herein who have been adjudged to be
regular employees fall under the second category. These are the mechanics, electricians, machinists
machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and masons It is not disputed
that these workers have been in the employ of KIMBERLY for more than one year at the time of the filing
of the Petition for certification election by KILUSAN-OLALIA.

Owing to their length of service with the company, these workers became regular employees, by
operation of law, one year after they were employed by KIMBERLY through RANK. While the actual
regularization of these employees entails the mechanical act of issuing regular appointment papers and
compliance with such other operating procedures as may be adopted by the employer, it is more in keeping
with the intent and spirit of the law to rule that the status of regular employment attaches to the casual
worker on the day immediately after the end of his first year of service. To rule otherwise, and to instead
make their regularization dependent on the happening of some contingency or the fulfillment of certain
requirements, is to impose a burden on the employee which is not sanctioned by law.
 7. Capule vs. NLRC, GR 90653, Nov. 12, 1990

FACTS:

The respondent, Yakult Philippines, Inc., is engaged in the manufacture of cultured milk which is
sold under the brand name "Yakult.” Petitioners Policarpio Capule and Luis Madoro were hired to cut cogon
grass and weeds at the back of the factory building used by private respondents. They were not required
to work on fixed schedule and they worked on any day of the week on their own discretion and convenience.
The services of the petitioners were terminated by the private respondent on July 13, 1987.

Thus, petitioners filed a complaint for illegal dismissal with the NLRC. The LA found the dismissal
to be illegal, but on appeal, NLRC set aside the decision and issued respondent to pay petitioners one (1)
month's pay each based on humanitarian considerations. Hence, the herein petition for certiorari where
petitioners allege that the public respondent NLRC committed a grave abuse of discretion in rendering the
aforestated decision. Petitioners invoke the provision of Article 4 of the Labor Code and of Article 1702 of
the Civil Code wherein all doubts should be resolved in favor of labor.

ISSUE: Whether or not the dismissal was illegal.

HELD:
No. Article 280 (now 295) of the Labor Code provides as follows: "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."
Project Employment

1. Phil. National Construction Corp. v. NLRC, GR 85323, June 20, 1989

FACTS:

Assailed in this petition for certiorari is the decision dated September 30, 1988 of the National Labor
Relations Commission (NLRC), affirming the decision dated August 21, 1987 of the Labor Arbiter ordering
the reinstatement with back wages of the private respondent, Emelito Porciuncula, on the ground that he
was not a project employee but a member of the work pool and that he was illegally dismissed on April 20,
1986.

The private respondent was employed by PNCC as an oiler from November 4, 1973 until he was
terminated on April 20, 1986, on the ground of completion of the project to which he was assigned.

The private respondent, in his complaint for illegal dismissal, alleged that he was discharged not
for cause, but because the newly designated supervisor, Reynaldo Bonifacio, wanted to put in his own man.

ISSUE: Whether or not the private respondent was a regular employee.

HELD:

Yes. After a careful consideration of the petition and the comment filed by the Solicitor General for
the respondents, the Court held that the NLRC did not abuse its discretion in affirming the Labor Arbiter's
conclusion that the private respondent was a member of the work pool and that he was illegally dismissed
from his job.

Members of a work pool from which a construction company draws its project employees, if
considered employee of the construction company while in the work pool, are non-project employees or
employees for an indefinite period. If they are employed in a particular project, the completion of the project
or any phase thereof will not mean severance of employer-employee relationship. (Policy Instruction No.
30; Emphasis supplied.)
.... 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 which he is employed and his
employment shall continue while such actually exists. (Art. 280, Labor Code.)

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 services to be performed is seasonal in nature and the employment is for the duration
of the season." (Sec. 280, Labor Code; Sandoval Shipping Inc. vs. NLRC, 136 SCRA 674.)

In finding that Porciuncula was a regular employee, the Labor Arbiter noted that it was the
petitioner's practice to rehire him after the completion of every project and this re-hiring continued
throughout Porciuncula's 13 years of employment in the company.

The Labor Arbiter also observed that the petitioner never reported the completion of its projects
and the termination of the employees (like Porciuncula) in its finished projects, to the nearest Public
Employment Office as required by Policy Instruction No. 20 of the Secretary of Labor. In the case of Ochoco
vs. NLRC, 120 SCRA 774, the failure of the employer to report to the nearest employment office the
termination of the workers everytime it completed a project was considered by this Court as proof that they
were not project employees.
 2. Cartagenas vs. Romago Electric Co., GR 82973, Sept. 15, 1989

FACTS:

The respondent, Romago Electric Co., is a general contractor engaged in contracting and sub-
contracting of specific building construction projects or undertaking such as electrical, mechanical and civil
engineering aspects in the repair of buildings and from other kindred services. Individual complainants
(Mario Cartagenas, Jesus N. Miraballes, Victor C. Monsod, and Vicente Barroa) are employed by the
respondent in connection with particular construction projects.

The NLRC held that the complainants were project employees because their appointments were
"co-terminus with the phase or item of work assigned to them in said project," It held further: The fact that
the complainants worked for the respondent under different project employment contracts for so many years
could not be made a basis to consider them as regular employees for they remain project employees
regardless of the number of projects in which they have worked.

ISSUE: Whether or not the complainants are project employees within the purview of the Labor Code.

HELD:

Yes. Art. 280 of the Labor Code provides that: 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 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.

As an electrical contractor, the private respondent depends for its business on the contracts it is
able to obtain from real estate developers and builders of buildings. Since its work depends on the
availability of such contracts or "projects," necessarily the duration of the employment of its work force is
not permanent but co-terminus with the projects to which they are assigned and from whose payrolls they
are paid. It would be extremely burdensome for their employer who, like them, depends on the availability
of projects, if it would have to carry them as permanent employees and pay them wages even if there are
no projects for them to work on. We hold, therefore, that the NLRC did not abuse its discretion in finding,
based on substantial evidence in the records, that the petitioners are only project workers of the private
respondent.

This case is similar to Sandoval Shipyards, Inc. vs. NLRC, 136 SCRA 675 (1985), where we held:
We feel that there is merit in the contention of the applicant corporation. To our mind, the employment of
the employees concerned were fixed for a specific project or undertaking. For the nature of the business
the corporation is engaged into is one which will not allow it to employ workers for an indefinite period. "It
is significant to note that the corporation does not construct vessels for sale or otherwise which will demand
continuous productions of ships and will need permanent or regular workers. It merely accepts contracts
for ship-building or for repair of vessels from third parties and, only, on occasion when it has work contract
of this nature that it hires workers to do the job which, needless to say, lasts only for less than a year
or longer.

The completion of their work or project automatically terminates their employment, in which case,
the employer is, under the law, only obliged to render a report on the termination of the employment.
 3. Maraquimot and Enero vs. NLRC & Viva, GR 120969, Jan. 22, 1998

FACTS:

On July 18, 1989, Petitioner Alejandro Maraguinot claims that he was employed by Viva Films as
part of the filiming crew. About four months later, he was designated as an Assistant Electrician with a
weekly salary of Php 400. In 1991, he was promoted to Electrician. Petitioner Paulino Enero claims that he
was employed by Viva Films as a member of the shooting crew in 1990. Enero and Maraguinot were tasked
with loading, unloading and arranging movie equipment in the shooting area as instructed by the
cameraman, returning the equipment to Viva Films warehouse, assisting in the fixing of the lighting system,
and performing other tasks that the cameraman and/or director may assign.

Sometime in May 1992, petitioners sought the assistance of their supervisor, Mrs. Alejandria
Cesario, to facilitate their request that private respondents adjust their salary in accordance with the
minimum wage law. In June 1992, Mrs. Cesario informed petitioners that Mr. Vic del Rosario would agree
to increase their salary only if they signed a blank employment contract. As petitioners refused to sign,
private respondents forced Enero to go on leave in June 1992, then refused to take him back when he
reported for work on 20 July 1992. Meanwhile, Maraguinot was dropped from the company payroll from 8
to 21 June 1992, but was returned on 22 June 1992. He was again asked to sign a blank employment
contract, and when he still refused, private respondents terminated his services on 20 July 1992.

On the other hand, private respondents claim that Viva Films (hereafter VIVA) is the trade name of
Viva Productions, Inc., and that it is primarily engaged in the distribution and exhibition of movies -- but not
in the business of making movies; in the same vein, private respondent Vic del Rosario is merely an
executive producer. Private respondents assert that they contract persons called producers -- also referred
to as associate producers -- to produce or make movies for private respondents; and contend that
petitioners are project employees of the associate producers who, in turn, act as independent contractors.
As such, there is no employeremployee relationship between petitioners and private respondents.

The petitioners sued Viva Films for illegal dismissal before the Labor Arbiter. The LA held that
Maraguinot and Enero are employees of Viva Films. The producer cannot be considered as an independent
contractor but should be considered only as a labor-only contractor and as such, acts as a mere agent of
the real employer, the herein respondents. It is very clear also that complainants are doing activities which
are necessary and essential to the business of the respondents, that of movie-making. Complainant
Maraguinot worked as an electrician while complainant Enero worked as a crew smember.

The NLRC reversed the ruling of the LA. The NLRC, in reversing the Labor Arbiter, then concluded
that these circumstances, taken together, indicated that complainants (herein petitioners) were project
employees.

ISSUE: Whether or not the petitioners were illegally dismissed.

HELD:

Yes. They were illegally dismissed. Private respondents expressly admitted that petitioners were
part of a work pool, and, while petitioners were initially hired possibly as project employees, they had
attained the status of regular employees in view of VIVAs conduct.

A project employee or a member of a work pool may acquire the status of a regular employee
when the following concur:

1) There is a continuous rehiring of project employees even after cessation of a project; and
2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual
business or trade of the employer.
 However, the length of time during which the employee was continuously re-hired is not controlling,
but merely serves as a badge of regular employment. In the instant case, the evidence on record shows
that petitioner Enero was employed for a total of two (2) years and engaged in at least eighteen (18)
projects, while petitioner Maraguinot was employed for some three (3) years and worked on at least twenty-
three (23) projects.Moreover, as petitioners tasks involved, among other chores, the loading, unloading and
arranging of movie equipment in the shooting area as instructed by the cameramen, returning the
equipment to the Viva Films warehouse, and assisting in the fixing of the lighting system, it may not be
gainsaid that these tasks were vital, necessary and indispensable to the usual business or trade of the
employer. As regards the underscored phrase, it has been held that this is ascertained by considering the
nature of the work performed and its relation to the scheme of the particular business or trade in its entirety.

A work pool may exist although the workers in the pool do not receive salaries and are free to seek
other employment during temporary breaks in the business, provided that the worker shall be available
when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up
can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned.
This is beneficial to both the employer and employee for it prevents the unjust situation of coddling labor at
the expense of capital and at the same time enables the workers to attain the status of regular employees.
Seasonal Employment

1. Zamudio vs. NLRC GR 76723, March 25, 1990

FACTS:

The petitioners rendered services essential for the cultivation of respondent’s farm. While the
services were not continuous in the sense that they were not rendered everyday throughout the year, as is
the nature of farm work, petitioners had never stopped working for respondent from year to year from the
time he hired them to the time he dismissed.

ISSUE: Whether or not the petitioners should be considered as employees.

HELD:

Yes. The nature of their employment, i.e. “Pakyao” basis, does not make petitioner independent
contractors. Pakyao workers are considered employees as long as the employer exercises control over the
means by which such workers are to perform their work inside private respondents farm, the latter
necessarily exercised control over the performed by petitioners.

The seasonal nature of petitioner’s work does not detract from the conclusion that employer –
employee relationship exits. Seasonal workers whose work is not merely for the duration of the season, but
who are rehired every working season are considered regular employees. The circumstances that
petitioners do not apears in respondent’s payroll does not destroy the employer – employee relationship
between them. Omission of petitioners in the payroll was not within their control, they had no hand in the
preparation of the payroll. This circumstance, even if true, cannot be taken against petitioners.
 2. Mercado Sr. vs. NLRC GR 79869, Sept. 5, 1991

FACTS:

Fortunato Mercado, Sr. and Leon Santillan worked in the farm of Aurora L. Cruz, Francisco Borja,
Leticia C. Borja and Sto. Niño Realty Incorporated since 1949, Fortunato Mercado, Jr. and Antonio Mercado
also worked in the farm since 1972 and the rest of the petitioners since 1960 up to April 1979, when they
were all allegedly dismissed from their employment. In their complaint filed with RAB No. III, NLRC in San
Fernando, Pampanga, the petitioners alleged that they were agricultural workers utilized by private
respondents in all the agricultural phases of work on the 7 1/2 hectares of ace land and 10 hectares of
sugar land owned by the latter.

Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said petitioners
were her regular employees and instead averred that she engaged their services, through Spouses
Fortunato Mercado, Sr. and Rosa Mercado, their "mandarols", that is, persons who take charge in supplying
the number of workers needed by owners of various farms, but only to do a particular phase of agricultural
work necessary in rice production and/or sugar cane production, after which they would be free to render
services to other farm owners who need their services. The other private respondents denied having any
relationship whatsoever with the petitioners and state that they were merely registered owners of the land
in question included as co-respondents in this case.

Labor Arbiter Luciano P. Aquino held that petitioners were not regular and permanent workers of
the private respondents, for the nature of the terms and conditions of their hiring reveal that they 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.

The NLRC affirmed the decision of the LA, with the modification of the deletion of the award for
financial assistance to petitioners. Petitioners’ MR was likewise denied by the NLRC. Upon a Petition for
Certiorari, the Petitioners sought the reversal of the above-mentioned rulings. Petitioners contend that LA
and NLRC erred when both ruled that petitioners are not regular and permanent employees of private
respondents based on the terms and conditions of their hiring, for said findings are contrary to the provisions
of Article 280, LC. They submit that petitioners' employment, even assuming said employment were
seasonal, continued for so many years such that, by express provision of Art. 280 as amended, petitioners
have become regular and permanent employees.

Moreover, they argue that Policy Instruction No. 12 of the DOLE clearly lends support to this
contention, when it states: PD 830 has defined the concept of regular and casual employment. What
determines regularity or casualness is not the employment contract, written or otherwise, but the nature of
the job. If the job is usually necessary or desirable to the main business of the employer, then employment
is regular. If not, then the employment is casual. Employment for a definite period which exceeds one (1)
year shall be considered re for the duration of the definite period. This concept of re and casual employment
is 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. This new concept should be strictly enforced to give meaning to the constitutional guarantee
of employment tenure. Petitioners submit that it would be unjust, if not unlawful, to consider them as casual
workers since they have been doing all phases of agricultural work for so many years, activities which are
undeniably necessary, desirable and indispensable in the rice and sugar cane production business of the
private respondents.

ISSUE: Whether or not the petitioners are regular and permanent farm workers and therefore entitled to
the benefits which they pray for. And corollary to this, w/n said petitioners were illegally dismissed by private
respondents.

HELD:
 No. The findings of the LA are ably supported by evidence. There is no circumstance that would
warrant a reversal of the questioned decision of the LA as affirmed by the NLRC. The contention of
petitioners that the 2nd paragraph of Art. 280 should have been applied in their case presents an opportunity
to clarify the afore-mentioned provision of law. Art. 280 reads in full:

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.

The first paragraph answers the question of who are 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 2nd paragraph demarcates as "casual"
employees, all other employees who do not fan 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.
Fixed Period Employment

1. Brent School vs. Zamora, GR 48494, Feb. 5, 1990

FACTS:

Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly compensation
of P20,000.00. The employment contract fixed a specific term for its existence, five (5) years, i.e., from July
18, 1971, the date of execution of the agreement, to July 17, 1976. On April 20,1976, Alegre was given a
copy of the report filed by Brent School with the Department of Labor advising of the termination of his
services effective on July 16, 1976. The stated ground for the termination was "completion of contract,
expiration of the definite period of employment."

At the investigation conducted by a Labor Conciliator of said report of termination of his services,
Alegre protested and argued that although his contract did stipulate that the same would terminate on July
17, 1976, since his services were necessary and desirable in the usual business of his employer, and his
employment had lasted for five years, he had acquired the status of a regular employee and could not be
removed except for valid cause. The Regional Director considered Brent School's report as an application
for clearance to terminate employment (not a report of termination), and accepting the recommendation of
the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as
a "permanent employee," to his former position without loss of seniority rights and with full back wages.

The Secretary of Labor sustained the Regional Director. Upon elevation, the Office of the President
affirmed the Secretary of Labor, ruling that Alegre was a permanent employee who could not be dismissed
except for just cause, and expiration of the employment contract was not one of the just causes provided
in the Labor Code for termination of services.

ISSUE: Whether or not the provisions of the Labor Code, have anathematized "fixed period employment"
or employment for a term.

HELD:

No. The employment contract between Brent School and Alegre was executed on July 18, 1971,
at a time when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. Indeed, the
Code did not come into effect until November 1, 1974, some three years after the perfection of the
employment contract. At that time, i.e., before the advent of the Labor Code, there was no doubt whatever
about the validity of term employment. It was impliedly but nonetheless clearly recognized by the
Termination Pay Law, R.A. 1052, as amended by R.A. 1787.

Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and became effective
on August 30,1950, itself deals with obligations with a period in section 2, Chapter 3, Title I, Book IV; and
with contracts of labor and for a piece of work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of
Book IV. No prohibition against term-or fixed-period employment is contained in any of its articles or is
otherwise deducible therefrom. It is plain then that when the employment contract was signed between
Brent School and Alegre on July 18, 1971, it was perfectly legitimate for them to include in it a stipulation
fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court. The status
of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code
(Presidential Decree No. 442). The Code contained explicit references to fixed period employment, or
employment with a fixed or definite period. And Article 319 undertook to define "employment without a fixed
period" in the following manner:

An employment shall be deemed to be without a definite period for purposes of this Chapter 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.

The Civil Code, which has always recognized, and continues to recognize, the validity and propriety
of contracts and obligations with a fixed or definite period, and imposes no restraints on the freedom of the
parties to fix the duration of a contract, whatever its object, be it specie, goods or services, except the
general admonition against stipulations contrary to law, morals, good customs, public order or public policy.
Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not
limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with
pre-determined dates of completion; they also include those to which the parties by free choice have
assigned a specific date of termination.

There can of course be no quarrel with the proposition that where from the circumstances it is
apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they
should be struck down or disregarded as contrary to public policy, morals, etc. But where no such intent to
circumvent the law is shown, or stated otherwise, where the reason for the law does not exist, e.g., where
it is indeed the employee himself who insists upon a period or where the nature of the engagement is such
that, without being seasonal or for a specific project, a definite date of termination is a sine qua non.

The law must be given a reasonable interpretation, to preclude absurdity in its application.
Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract
to remedy the evil of employer's using it as a means to prevent their employees from obtaining security of
tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the
head. Accordingly, and since the entire purpose behind the development of legislation culminating in the
present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure, the clause in said article indiscriminately
and completely ruling out all written or oral agreements conflicting with the concept of regular employment
as defined therein should be construed to refer to the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of tenure. It should have no application to
instances where a fixed period of employment 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, or where it satisfactorily appears that the employer and employee
dealt with each other on more or less equal terms with no moral dominance whatever being exercised by
the former over the latter.

Alegre's employment was terminated upon the expiration of his last contract with Brent School on
July 16, 1976 without the necessity of any notice. The advance written advice given the Department of
Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a
letter of termination, nor an application for clearance to terminate which needed the approval of the
Department of Labor to make the termination of his services effective. In any case, such clearance should
properly have been given, not denied.
 2. Cielo vs. NLRC, GR 78693, Jan. 28, 1991

FACTS:

Zosimo Cielo claims that he was illegally dismissed by Henry Lei Trucking Company. Respondent
on the other hand claims that the petitioner's services could be legally terminated based on an agreement
which provides among others that the term of the Agreement is six (6) months from and after the execution,
unless otherwise earlier terminated at the option of either party and that there is no employer/employee
relationship between the parties, the nature of this Agreement being contractual.

In his position paper, the petitioner claimed he started working for the private respondent on June
16, 1984, and having done so for more than six months had acquired the status of a regular employee. As
such, he could no longer be dismissed except for lawful cause. He also contended that he had been
removed because of his refusal to sign, as required by the private respondent, an affidavit acknowledging
receipt of salary and allowances from Mr. Henry Lei. According to respondent’s position paper, the
petitioner's refusal to sign the affidavit constituted disrespect or insubordination, which had "some bearing
on the renewal of his contract of employment with the respondent."

The Labor Arbiter found petitioner illegally dismissed and ordered his reinstatement with back
wages. The NLRC reversed the LA’s decision

ISSUE: Whether or not the petitioner was an employee who was illegally dismissed by the petitioner.

HELD:

Yes. Under the arrangements, the private respondent hoped to be able to terminate the services
of the drivers without the inhibitions of the Labor Code. All it had to do was refuse to renew the agreements,
which, significantly, were uniformly limited on a six-month period. By this clever scheme, the private
respondent could also prevent the drivers from becoming regular employees and thus be entitled to security
of tenure and other benefits. The private respondent is engaged in the trucking business as a hauler of
cattle, crops and other cargo for the Philippine Packing Corporation. This business requires the services of
drivers, and continuously because the work is not seasonal, nor is it limited to a single undertaking or
operation. Even if ostensibly hired for a fixed period, the petitioner should be considered a regular employee
of the private respondent, conformably to Article 280 of the Labor Code providing as follows:

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 necessarily 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.

The private respondent's argument that the petitioner could at least be considered on probation
basis only and therefore separable at will is self-defeating. The Labor Code clearly provides as follows:

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. There is no question
that the petitioner was not engaged as an apprentice, being already an experienced truck driver when he
began working for the private respondent. Neither has it been shown that he was informed at the time of
his employment of the reasonable standards under which he could qualify as a regular employee. It is plain
that the petitioner was hired at the outset as a regular employee. At any rate, even assuming that the
original employment was probationary, the Labor Arbiter found that the petitioner had completed more than
six month's service with the trucking company and so had acquired the status of a regular employee at the
time of his dismissal.
Probationary Employment

1. A.M. Oreta & Co. vs. NLRC, GR No. 74004, Aug. 10, 1989

FACTS:

A petition for certiorari was filed before the Supreme Court under Rule 65 seeking annulment of
the resolution of the respondents NLRC affirming the decision of POEA awarding to the private respondent,
Sixto Grulla, Jr., the salaries corresponding to the unexpired portion of his employment contract. Private
respondent was engaged by Engineering Construction and industrial Development Company (ENDECO)
through Petitioner A.M. Oreta & Co., as a carpenter in its projects in Jeddah, Saudi Arabia. The contract of
employment, which was entered into June 11,1980 was for a period of 12 months.

On October 9, 1980, he received a notice of termination of his employment. He filed a complaint

for illegal dismissal. Petitioner contends that the private respondent was validly dismissed because the
latter was still a probationary employee and that his dismissal was justified on the basis of his unsatisfactory
performance of his job during the probationary period.

ISSUE: Whether or not the private respondent was illegally terminated by the petitioner.

HELD:

Yes. A perusal of the employment contract reveals that although the period of employment of
private respondent is 12 months, the contract is renewable subject to future agreements of the parties. It is
clear from the employment contract that the private respondent was hired by the company as s regular
employee and not just mere probationary employees. Also, nowhere in the employment contract executed
between petitioner company and private respondent is there a stipulation that the latter shall undergo a
probationary period for three months before he can qualify as a regular employee.

The private respondent was not, in any manner, notified of the charges against him before he was
outrightly dismissed. Neither was any hearing or investigation conducted by the company to give the
respondent a chance to be heard concerning the alleged unsatisfactory performance of his work.
 2. Buiser et. al. vs. Hon. Vicente Leogardo GR 63316, July 31, 1984

FACTS:

The petitioners, Iluminada Ver Buiser and Ma. Mercedes P. Intengan, entered into an "Employment
Contract (on Probationary Status)" on May 26, 1980 with General Telephone Directory Co., a corporation
engaged in the business of publication and circulation of the directory of the PLDT. 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 during 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 sales 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 National Capital Region, Ministry of Labor and Employment, dismissed the
complaint for illegal dismissal with claims for backwages, earned commissions and other benefits, except
the claim for allowances.

On appeal, Deputy Minister Vicente Leogardo, Jr. of the Ministry of Labor affirmed the Regional
Director's Order. Hence, this petition for certiorari on the ground of grave abuse of discretion amounting to
lack of jurisdiction. The petitioners’ alleged 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 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.

ISSUES: (1) Whether the probationary period may be extended based on other than in the aforecited
instances; and (2) Whether the failure to meet the sales qouta constitute just cause of dismissal.

HELD:

(1) Yes. Generally, the probationary period of employment is limited to six (6) months. The
exception to this 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, 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.

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.
 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 will 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 (18) months.

(2) Yes. 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.
Just & Authorized Causes for Termination

1. Filipro vs. NLRC, GR No. 70546, October 16, 1996

FACTS:

The private respondent Danilo C. Parino was hired as salesman of Petitioner Filipro, Inc. (now
known as Nestle Philippines, Inc.) on September 25, 1978. After undergoing the mandatory probationary
period of six (6) months, he became a regular employee on March 25, 1979. Sometime in the latter part of
March, 1980, Filipro received several telephone complaints from its customers and its dealers in the area
assigned to Parino. They averred that they were not being served by the latter. These complaints led to
diverse investigations conducted on March 27 and 29, 1980 by Mr. Raymond P. Velasco, petitioner's sales
supervisor for the Metro Manila area. Mr. Velasco discovered that Parino committed "table distribution" by
misreporting fictitious sales and that the latter sought monetary benefits from one dealer who in return would
be extended more favorable treatment than other customers.

“Table distribution” is the practice of selling the respondent's products to one or few customers
only, but making it appear that they were sold to many customers. This practice is contrary to the petitioner
company's policy of distributing its goods to as many customers as possible. Such practice would
necessarily involve misrepresentations in the salesmen's reports. Tied up with "table distribution" is Parino’s
report of alleged sales to fictitious stores in order to hide the sale of large stocks to the favored store or
stores. When asked by Mr. Velasco to explain such acts, Parino replied that the "table distribution was
intentionally done." For this initial infraction, private respondent was suspended for a period of two weeks
beginning June 28 until July 13, 1979 and warned that a repetition thereof would merit a more severe
penalty. On March 31, 1980, Parino was again placed under preventive suspension due to the repetition of
the same offense. On May 8, 1980, Filipro filed with the Ministry of Labor and Employment an application
for clearance to dismiss private respondent from employment on the ground of dishonesty and loss of
confidence.

On February 5, 1981, the Labor Arbiter rendered his decision granting clearance for Filipro to
terminate private Parino’s employment. The NLRC, on appeal, adopted the findings of facts of the Labor
Arbiter, but modified the dispositive portion of the decision with regard to the penalty of dismissal. stating
that the penalty of dismissal should be left entirely to the discretion of the company. Parino is hereby ordered
reinstatement to his former position or equivalent position without backwages.

ISSUE: Whether or not the private respondent Parino shall be rightfully dismissed for engaging in table
distribution.

HELD:

Yes. A salesman who on several occasions sold the company’s products to only one or two dealers
contrary to company policy and who made it appear he was distributing the products to many dealers is
rightfully dismissed. Although the Court often takes a lenient view when it considers the employee to
be in a less advantageous position as his employer, this consideration, however, should not be applied in
this case where there is clearly an attendant breach of trust and confidence almost equivalent to dishonesty
and infidelity in the handling of the company’s products. The initial decision of the Labor Arbiter decreeing
the dismissal of private respondent herein is fully justified by the provisions of Article 283 (c) of the Labor
Code.

It is not moral for a salesman to extend treatment to a few customers for a fee. This Court should
help stamp out, rather than tolerate, the commission of irregular whenever these are noted. Malpractices
should not be allowed to continue but should be rebuked. It is not proper to suggest that an employee may
extend special treatment to a few customers on the specious reasoning that there is nothing wrong with a
salesman making a little extra money on the side during these hard times and that, after all no economic
loss was suffered by the company. It is well-worth stating that it is the primary duty of the employee to carry
out the policies laid out by his employer and it is not given to the former to accept and agree to said policy
but reserve for himself the prerogative of ignoring and violating the same just so he can favor some
customers over others and obtain hidden profits for himself. Such wrong would be apart from the inevitable
false reports that are attendant to the deceit. The continuation or tolerance of such practice could produce
erosion of discipline among company personnel and an unstable marketing policy for the petitioner
company and its customers. All these infractions would lead to an obviously undesirable situation. Above
all, the Court should not permit pernicious practice to prosper. As petitioner company appropriately decried,
these would in effect, “encourage misfeasance, malfeasance, dishonesty, infidelity, falsification of private
document and even theft.”
 2. Padilla vs. NLRC, GR No. 114764, June 13, 1997

FACTS:

The petitioner, Wilfredo T. Padilla, was a faculty member of the College of Arts and Sciences of
San Beda College (SBC) from June 1980 up to his dismissal. Sometime in November 1983, petitioner
approached coprofessor Leopoldo Martinez in behalf of his alleged "nephew," a student by the name of
Luis Santos, whom Martinez failed in History I. Petitioner apparently disagreed with the grading system of
Professor Martinez and urged the latter to change the grade of Santos.

On November 10, 1983, an urgent meeting was called to deliberate on Santos' case. However,
prior to said meeting, petitioner initiated a "whispering campaign" among the faculty members and students
who failed in the same subject against Martinez, the obvious purpose of which was to exert pressure and
influence on the latter regarding the proposed changing of the grades. The petitioner admittedly approached
the members of the Dean's Council to lobby for the reconsideration of Santos' failing grade. In several
instances, he also acknowledged that Santos was not actually his nephew but he said so only to add weight
to his request. On ground of serious misconduct, petitioner's services were terminated on July 23, 1984.

In a complaint for illegal dismissal against SBC, Labor Arbiter Isabel T. Ortiguerra rendered a
decision dated October 10, 1991, declaring the respondent guilty of illegal dismissal and ordering it to
reinstate the complainant to his former position of full time professor without loss of seniority rights and with
full backwages computed from the time he was dismissed up to the time he will actually be reinstated but
not to exceed 3 years. This decision was, however, reversed on appeal by the NLRC in its decision dated
July 26, 1993. His motion for reconsideration having been denied on February 23, 1994, petitioner filed the
instant petition for certiorari.

ISSUE: Whether or not the pressure and influence exerted by the petitioner on his colleague to change a
failing grade to a passing one, as well as his misrepresentation that Santos is his nephew, constitute serious
misconduct, which is a valid ground for dismissing an employee.

HELD:

Yes. Before an employee can be validly dismissed, the employee must be afforded due process
and his dismissal must be for any of the causes specified in Article 282 of the Labor Code. Labor Arbiter
Ortiguerra mentioned in her decision that SBC failed to afford petitioner an impartial investigation, imputing
to Father Odilardo Arceo, Dean of the College of Arts and Sciences, an "obvious predisposition" to dismiss
him. This was, however, refuted by Fr. Arceo who declared in his sworn statement that he merely
recommended the termination of petitioner's employment to the Fr. Rector of SBC who, after an official
investigation, adopted his recommendation.

On June 7, 1984, he was officially informed that SBC was considering his dismissal on charges of
serious misconduct, an investigation of which was scheduled on June 28, 1984. A postponement was
requested and the hearing was moved to July 5, 1984. While the hearing was being conducted at the Fr.
Rector's office, petitioner suddenly walked out just as Professor Martinez was about to commence giving
his testimony.

The essence of due process in administrative proceedings is the opportunity to explain one's side
or a chance to seek reconsideration of the action or ruling complained of. Thus, the Labor Code requires
the employer to furnish the employee with a written notice containing a statement of the cause for
termination and to afford said employee ample opportunity to be heard and to depend himself with the
assistance of his representative, if he so desires. The employer is also required to notify the worker in
writing of the decision to dismiss him, stating clearly the reasons therefore. In the instant case, SBC amply
complied with the abovementioned requisites.

The petitioner also alleges that he was denied due process, as well as the thirty-day prior written
notice when he was dismissed. He even cited in his memorandum the case of RCPI v. NLRC to support
his contentions. The aforementioned case, however, does not mention any thirty-day period. Petitioner
erred in relying on the procedural requirement outlined in Article 283 of the Labor Code which applies only
when termination of the employment is 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.
3. Asian Design Manufacturing Corp. vs. Hon. Deputy Minister of Labor, GR No. 70552, May 12,
1986
4. Luzon Stevedoring Corp. vs. CIR, L-18683, December 31, 1965
5. Villarama vs. NLRC, GR No. 106341, September 2, 1994
6. Santos Jr. vs. NLRC, GR No. 115795, March 6, 1998
7. Star Paper Corp. vs. symbol, GR No. 164774, April 12, 2006
8. GTE Directories Corp. vs. Sanchez, GR No. 76219, May 27, 1991
9. Gold City Integrated Port Services vs. NLRC, GR No. 86000, September 21, 1990
10. Abbot Laboratories vs. NLRC, GR No. 76959, October 12, 1987
11. Homeowners Savings and Loan Association vs. NLRC, GR No. 97067, September 26, 1996
12. Maxicare vs. Contreras, GR No. 194352, January 20, 2013
13. Blue Diary Corp. vs. NLRC, GR No. 129843, September 14, 1999
14. Orient Express Placement Phl. Vs. NLRC, GR No. 113713, June 11, 1997
15. Shoemart, Inc. vs NLRC, GR No. 74229, August 11, 1989
16. Labor, et. al. vs. NLRC, GR No. 110388, September 14, 1995
17. Sajonas vs. NLRC, GR No. 49286, March 15, 1990
18. San Miguel Corp. vs. NLRC, GR No. 82467, June 29, 11989
19. Heavylift Manila vs. CA, GR No. 154410, October 20, 2005
20. Mabeza vs. NLRC, GR No. 118506, April 18, 1997
21. International Harvester vs. IAC, GR No. 73287, May 18, 1987
22. F. Ma. Reyes Royal vs. Philippine Luen Thai Holdings, GR No. 174893, July 11, 2012
23. Wiltshire File Co. vs. NLRC, GR No. 82249, February 7, 1991
24. Santos et. al. vs. CA, Pepsi Cola, GR No. 141947, July 5, 2001
25. Great Pacific Life Assurance Corp. vs. NLRC, GR No. 88011, July 30, 1990
26. Serrano vs. NLRC, GR No. 117040, January 27, 2000
27. Asian Alcohol vs. NLRC, GR No. 131108, March 25, 1999
28. Culili vs. Eastern Telecommunications, GR No. 165381, February 9, 2011
29. Asiaworld Publishing House vs. Ople, GR No. 56398, July 23, 1987
30. Almoite vs. Pacific Architects, GR No. 73680, July 10, 1986
31. Lopez Sugar Corporation vs. Federation of Free Workers, GR No. 75700-01, August 30, 1990
32. Sebuguero vs. NLRC, GR No. 115394, September 27, 1995