NITTO ENTERPRISES vs.

NLRC
FACTS:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Capili sometime
in May 1990 as an apprentice machinist, molder and coremaker as evidenced by an apprenticeship agreement for
6 months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75 which was 75% of the
applicable minimum wage. On August 2, 1990, Capili who was handling a piece of glass which he was working on,
accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital. Further, Capili
entered a workshop within the office premises which was not his work station. There, he operated one of the
power press machines without authority and in the process, injured his left thumb. The following day he was asked
to resign. 3 days after, private respondent formally filed before the NLRC Arbitration Branch, National Capital
Region a complaint for illegal dismissal and payment of other monetary benefits. The Labor Arbiter rendered his
decision finding the termination of private respondent as valid and dismissing the money claim for lack of merit.
On appeal, NLRC issued an order reversing the decision of the Labor Arbiter. The NLRC declared that Capili was a
regular employee of Nitto Enterprises and not an apprentice. Consequently, Labor Arbiter issued a Writ of
Execution ordering for the reinstatement of Capili and to collect his back wages. Petitioner, Nitto Enterprises filed a
case to the Supreme Court.

ISSUE:
Does the NLRC correctly rule that Capili is a regular employee and not an apprentice of Nitto Enterprises?

LAW:
Article 280 of the Labor Code – Regular Employees (DEFINED)

RULING: Yes.
The apprenticeship agreement between petitioner and private respondent was executed on May 28, 1990
allegedly employing the latter as an apprentice in the trade of "care maker/molder. However, the apprenticeship
Agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the DOLE, the
apprenticeship agreement was enforced the day it was signed. The act of filing the proposed apprenticeship
program with the Department of Labor and Employment is a preliminary step towards its final approval and
does not instantaneously give rise to an employer-apprentice relationship. Nitto Enterprises did not comply with
the requirements of the law. It is mandated that apprenticeship agreements entered into by the employer and
apprentice shall be entered only in accordance with the apprenticeship program duly approved by the Minister of
Labor and Employment. Thus, the apprenticeship agreement has no force and effect; and Capili is considered to be
a regular employee of the company.

OPINION:
I concur with the Courts findings that since the apprenticeship agreement between petitioner and private
respondent have no force and effect in the absence of a valid apprenticeship program duly approved by the DOLE,
private respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as a regular employee of petitioner as defined by
Article 280 of the Labor Code.

ATLANTA INDUSTRIES, INC vs. SEBOLINO

FACTS:
Sebolino et al. filed several complaints for illegal dismissal, regularization, underpayment, nonpayment of wages
and other money claims as well as damages. They alleged that they had attained regular status as they were
allowed to work with Atlanta for more than 6 months from the start of a purported apprenticeship agreement
between them and the company. They claimed that they were illegally dismissed when the apprenticeship
agreement expired.

In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to their money
claims because they were engaged as apprentices under a government-approved apprenticeship program. The
company offered to hire them as regular employees in the event vacancies for regular positions occur in the
section of the plant where they had trained. They also claimed that their names did not appear in the list of
employees (Master List) prior to their engagement as apprentices.

The Labor Arbiter found the dismissal to be illegal with respect to 9 out of the 12 complainants. Atlanta appealed
the decision to the NLRC which reversed the illegal dismissal decision with respect to Sebolino and 3 others. They
moved for reconsideration but this was denied. They then brought the case up to the CA, which held that Sebolino
and the 3 others were illegally dismissed.

The CA ruled that Sebolino and the 3 others were already employees of the company before they entered into the
1st and 2nd apprenticeship agreements. For example, Sebolino was employed by Atlanta on 3/3/2004 then he
entered into his 1st apprenticeship agreement with the company on 3/20/2004 to 8/19/2004. The 2nd
apprenticeship agreement was from 5/28/2004 to 10/8/2004. However, the CA found the apprenticeship
agreements to be void because they were executed in violation of the law and the rules. Therefore, in the 1st place,
there were no apprenticeship agreements.

Also, the positions occupied by the respondent’s machine operator, extruder operator and scaleman are usually
necessary and desirable in the manufacture of plastic building materials, the company’s main business. Sebolino
and the 3 others were, therefore, regular employees whose dismissals were illegal for lack of a just or authorized
cause and notice.

ISSUE: Whether or not the CA erred in ruling that Sebolino and 3 others were illegally dismissed.

HELD: The petition is unmeritorious.

LABOR LAW - Illegal dismissals

The CA committed no reversible error in nullifying the NLRC decision and in affirming the labor arbiters ruling, as it
applies to Costales, Almoite, Sebolino and Sagun. Specifically, the CA correctly ruled that the 4 were illegally
dismissed because (1) they were already employees when they were required to undergo apprenticeship and (2)
apprenticeship agreements were invalid.

The following considerations support the CA ruling.

Based on company operations at the time material to the case, Costales, Almoite, Sebolino and Sagun were
already rendering service to the company as employees before they were made to undergo apprenticeship. The
company itself recognized the respondents status through relevant operational records in the case of Costales
and Almoite, the CPS monthly report for December 2003 which the NLRC relied upon and, for Sebolino and
Sagun, the production and work schedule for March 7 to 12, 2005 cited by the CA.

The CA correctly recognized the authenticity of the operational documents, for the failure of Atlanta to raise a
challenge against these documents before the labor arbiter, the NLRC and the CA itself. The appellate court, thus,
found the said documents sufficient to establish the employment of the respondents before their engagement as
apprentices.

The fact that Sebolino and the 3 others were already rendering service to the company when they were made to
undergo apprenticeship (as established by the evidence) renders the apprenticeship agreements irrelevant as
far as the four are concerned. This reality is highlighted by the CA finding that the respondents occupied positions
such as machine operator, scaleman and extruder operator - tasks that are usually necessary and desirable in
Atlantas usual business or trade as manufacturer of plastic building materials. These tasks and their nature
characterized the 4 as regular employees under Article 280 of the Labor Code. Thus, when they were dismissed
without just or authorized cause, without notice, and without the opportunity to be heard, their dismissal was
illegal under the law.
CENTURY CANNING CORP V. CA DIGEST
Facts
On 15 July 1997, Century Canning Corp. hired Gloria C. Palad (Palad) as “fish cleaner” at petitioner’s tuna and
sardines factory. Palad signed on 17 July 1997 an apprenticeship agreement with petitioner. Palad received an
apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted its apprenticeship program for
approval to the Technical Education and Skills Development Authority (TESDA) of the Department of Labor and
Employment (DOLE). On 26 September 1997, the TESDA approved petitioner’s apprenticeship program.
According to petitioner, a performance evaluation was conducted on 15 November 1997, where petitioner gave
Palad a rating of N.I. or “needs improvement” since she scored only 27.75% based on a 100% performance
indicator. Furthermore, according to the performance evaluation, Palad incurred numerous tardiness and
absences. As a consequence, petitioner issued a termination notice5 dated 22 November 1997 to Palad, informing
her of her termination effective at the close of business hours of 28 November 1997.

Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated 13th
month pay for the year 1997. The Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner
to pay Palad her last salary and her pro-rated 13th month pay.
On appeal, the NLRC affirmed with modification the Labor Arbiter’s decision, thus:

WHEREFORE, premises considered, the decision of the Arbiter is hereby MODIFIED in that, in addition,
respondents are ordered to pay complainant’s backwages for 2 months in the amount of P7,176.00 (P138.75 x 26
x 2 mos.). All other dispositions of the Arbiter as appearing in the dispositive portion of his decision are AFFIRMED.

Upon denial of Palad’s motion for reconsideration, Palad filed a special civil action for certiorari with the CA. The
CA rendered a decision, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE and a new one
entered, to wit:
(a) finding the dismissal of petitioner to be illegal;
(b) ordering private respondent to pay petitioner her underpayment in wages;
(c) ordering private respondent to reinstate petitioner to her former position without loss of seniority rights and to
pay her full backwages computed from the time compensation was withheld from her up to the time of her
reinstatement;
(d) ordering private respondent to pay petitioner attorney’s fees equivalent to ten (10%) per cent of the monetary
award herein; and
(e) ordering private respondent to pay the costs of the suit.

The Ruling of the CA

The CA held that the apprenticeship agreement which Palad signed was not valid and binding because it was
executed more than two months before the TESDA approved petitioner’s apprenticeship program.

The CA also held that petitioner illegally dismissed Palad. The CA ruled that petitioner failed to show that Palad
was properly apprised of the required standard of performance. The CA held that Palad was not afforded due
process because petitioner did not comply with the twin requirements of notice and hearing.

The Issues
Petitioner raises the following issues:

1. WHETHER OR NOT THE PRIVATE RESPONDENT WAS AN APPRENTICE; and

2. WHETHER THERE WAS A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.
The Ruling of the Court
The petition is without merit. Registration and Approval by the TESDA of Apprenticeship Program Required
Before Hiring of Apprentices

In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed on
May 28, 1990 allegedly employing the latter as an apprentice in the trade of “care maker/molder.” On the same
date, an apprenticeship program was prepared by petitioner and submitted to the Department of Labor and
Employment. However, the apprenticeship agreement was filed only on June 7, 1990. Notwithstanding the
absence of approval by the Department of Labor and Employment, the apprenticeship agreement was enforced
the day it was signed.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is,
therefore, a condition sine qua non before an apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the DOLE is a preliminary step towards its final
approval and does not instantaneously give rise to an employer-apprentice relationship.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force and effect in
the absence of a valid apprenticeship program duly approved by the DOLE, private respondent’s assertion that he
was hired not as an apprentice but as a delivery boy (“kargador” or “pahinante”) deserves credence. He should
rightly be considered as a regular employee of petitioner as defined by Article 280 of the Labor Code x x x.

R.A. 7796, which created the TESDA, has transferred the authority over apprenticeship programs from the Bureau
of Local Employment of the DOLE to the TESDA. RA 7796 emphasizes TESDA’s approval of the apprenticeship
program as a pre-requisite for the hiring of apprentices.

Since Palad is not considered an apprentice because the apprenticeship agreement was enforced before the
TESDA’s approval of petitioner’s apprenticeship program, Palad is deemed a regular employee performing the job
of a “fish cleaner.” Clearly, the job of a “fish cleaner” is necessary in petitioner’s business as a tuna and sardines
factory. Under Article 280 of the Labor Code, an employment is deemed 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.

Illegal Termination of Palad

To constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be for a just or
authorized cause; and (2) the employee must be afforded an opportunity to be heard and to defend himself. When
the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers
the matter a case of illegal dismissal.

Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance evaluation on
Palad, petitioner failed to warn Palad of her alleged poor performance. In fact, Palad denies any knowledge of the
performance evaluation conducted and of the result thereof. Petitioner likewise admits that Palad did not receive
the notice of termination because Palad allegedly stopped reporting for work. The records are bereft of evidence
to show that petitioner ever gave Palad the opportunity to explain and defend herself. Clearly, the two
requisites for a valid dismissal are lacking in this case.
Bernardo vs NLRC DIGEST
Facts:
Petitioners numbering 43 are deaf-mutes hired on various periods from 1988 to 1993 by respondent Far
East Bank and Trust Co. as Money Sorters and Counters through a uniformly worded agreement called
‘Employment Contract for Handicapped Workers. Subsequently, they are dismissed.

Petitioners maintain that they should be considered regular employees, because their task as money
sorters and counters was necessary and desirable to the business of respondent bank. They further
allege that their contracts served merely to preclude the application of Article 280 and to bar them from
becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as “special workers and
should not in any way be considered as part of the regular complement of the Bank.” Rather, they were
“special” workers under Article 80 of the Labor Code.

Issue: WON petitioners have become regular employees.

Held:
The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of
1 month, after which the employer shall determine whether or not they should be allowed to finish the
6-month term of the contract. Furthermore, the employer may terminate the contract at any time for a
just and reasonable cause. Unless renewed in writing by the employer, the contract shall automatically
expire at the end of the term.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, 2 of them worked from 1988 to 1993. Verily, the renewal
of the contracts of the handicapped workers and the hiring of others lead to the conclusion that their
tasks were beneficial and necessary to the bank. More important, these facts show that they
were qualified to perform the responsibilities of their positions. In other words, their disability did not
render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should
be given the same terms and conditions of employment as a qualified able-bodied person. Section 5
of the Magna Carta provides:

“Section 5. Equal Opportunity for Employment.—No disabled person shall be denied access to
opportunities for suitable employment. A qualified disabled employee shall be subject to the same
terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person.”

The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-
bodied persons, they are thus covered by Article 280 of the Labor Code, which provides:
“ART. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, x x x”

“The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of
the employer. The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least 1 year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity, and while such activity exists.”

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank. With the exception of 16 of them, petitioners performed these tasks for more than 6
months.

MARIWASA vs. LEOGARDO

FACTS:
Dequila was hired on probation by Mariwasa Manufacturing, Inc. as a general utility worker on January 10, 1979.
After 6 months, he was informed that his work was unsatisfactory and had failed to meet the required standards.
To give him another chance, and with Dequila’s written consent, Mariwasa extended Dequila’s probationary period
for another 3 months: from July 10 to October 9, 1979. Dequila’s performance, however, did not improve and
Mariwasa terminated his employment at the end of the extended period.

Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration, Dazo, and violation of
PD Nos. 928 and 1389.

DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. Thus, Dequila appeals to the
Minister of Labor.

MINISTER OF LABOR: Deputy Minister Leogardo, Jr. held that Dequila was already a regular employee at the time
of his dismissal, thus, he was illegally dismissed. (Initial order: Reinstatement with full backwages. Later amended
to direct payment of Dequila’s backwages from the date of his dismissal to December 20, 1982 only.)

ISSUE: WON employer and employee may, by agreement, extend the probationary period of employment beyond
the 6 months prescribed in Art. 282 of the Labor Code?

RULING: YES, agreements stipulating longer probationary periods may constitute lawful exceptions to the
statutory prescription limiting such periods to 6 months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that “Generally, the probationary period of
employment is limited to 6 months. The exception to this general rule is when the parties to an employment
contract may agree otherwise, such as when the same is established by company policy or when the same is
required by the nature of work to be performed by the employee. In the latter case, there is recognition of the
exercise of managerial prerogatives in requiring a longer period of probationary employment, such as in the
present case where the probationary period was set for 18 months, i.e. from May, 1980 to October, 1981 inclusive,
especially where the employee must learn a particular kind of work such as selling, or when the job requires
certain qualifications, skills experience or training.”
In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal consequences of a
probationary period satisfactorily completed. In fact, it was ex gratia, an act of liberality on the part of his
employer affording him a second chance to make good after having initially failed to prove his worth as an
employee. Such an act cannot now unjustly be turned against said employer’s account to compel it to keep on its
payroll one who could not perform according to its work standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit attaching
to the completion of said period if he still failed to make the grade during the period of extension. By reasonably
extending the period of probation, the questioned agreement actually improved the probationary employee’s
prospects of demonstrating his fitness for regular employment. Petition granted. Order of Deputy Minister
Leogardo reversed.