[G.R. No.

149985 May 5, 2006]

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., Petitioner, vs.
ROSALINA C. ARCEO,*** Respondent.

FACTS:

May 1990 – ARCEO applied for the position of telephone operator with PLDT. She, however,
failed the pre-employment qualifying examination. Having failed the test, ARCEO requested
PLDT to allow her to work at the latter’s office even without pay. PLDT agreed and assigned her
to its commercial section where she was made to perform various tasks like photocopying
documents, sorting out telephone bills and notices of disconnection, and other minor
assignments and activities. After two weeks, PLDT decided to pay her the minimum wage.
February 15, 1991 – PLDT saw no further need for ARCEO's services and decided to fire her
but, through the intervention of PLDT’s commercial section supervisor, she was recommended
for an on-the-job training on minor traffic work. When she failed to assimilate traffic
procedures, the company transferred her to auxiliary services, a minor facility.
Subsequently, ARCEO took the pre-qualifying exams for the position of telephone operator two
more times but again failed in both attempts.
October 30, 1991 – PLDT discharged ARCEO from employment. She then filed a case for illegal
dismissal before the labor arbiter. On May 11, 1993, the arbiter ruled in her favor. PLDT was
ordered to reinstate ARCEO to her “former position or to an equivalent position.”
June 9, 1993 – ARCEO was reinstated as casual employee with a minimum wage of P106 per
day. She was assigned to photocopy documents and sort out telephone bills.

CAUSE OF ACTION:
September 3, 1996 (more than three years after her reinstatement) – ARCEO filed a complaint
for unfair labor practice, underpayment of salary, underpayment of overtime pay, holiday pay,
rest day pay and other monetary claims. She alleged in her complaint that, since her
reinstatement, she had yet to be regularized and had yet to receive the benefits due to a
regular employee.

DECISION of the labor arbiter, NLRC, CA:

August 18, 1997 – The labor arbiter ruled that ARCEO was already qualified to become a
regular employee. He also found that PLDT denied her all the benefits and privileges of a
regular employee.
November 28, 1997 – The NLRC affirmed the decision of the labor arbiter finding ARCEO
eligible to become a regular employee.
June 29, 2001 – The CA affirmed the decision of the NLRC.

ISSUE:

Does the proviso in Art. 280 of the Labor Code which “regularizes” a casual employee who has
rendered at least one year of service subject to the condition that the employment subsists or
the position still exists?

HELD

Reinstatement to an “equivalent position” – PLDT’s argument that respondent’s position has

been abolished, if indeed true, does not preclude ARCEO’s becoming a regular employee. The
order to reinstate her also included the alternative to reinstate her to “a position equivalent
thereto.” Thus, PLDT can still “regularize” her in an equivalent position.

PLDT failed to show position “no longer subsists” – Moreover, PLDT’s argument does not hold
water in the absence of proof that the activity in which ARCEO was engaged (like photocopying
of documents and sorting of telephone bills) no longer subsists. Under Art. 280, any employee
who has rendered at least one year of service “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.” For PLDT’s failure to show that the activity undertaken by ARCEO has been
discontinued, we are constrained to confirm her “regularization” in that position.

Date of regularization (when entitled to benefits) – Considering that she has already worked in
PLDT for more than one year at the time she was reinstated, she should be entitled to all the
benefits of a regular employee from June 9, 1993 the day of her actual reinstatement.