G.R. No.
178835 February 13, 2009 (Signed)
MAGIS YOUNG ACHIEVERS' LEARNING CENTER and MRS.
VIOLETA T. CARIÑO, Petitioners,
vs.
ADELAIDA P. MANALO, Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari of the Decision dated
January 31, 2007 and of the Resolution dated June 29, 2007 of
the Court of Appeals (CA) in CA-G.R. SP No. 93917 entitled Magis
Young Achievers’ Learning Center and Violeta T. Cariño v.
National Labor Relations Commission, 3rd Division, Quezon City,
and Adelaida P. Manalo.
The pertinent facts are as follows:
On April 18, 2002, respondent Adelaida P. Manalo was hired as a
teacher and acting principal of petitioner Magis Young Achievers’
Learning Center with a monthly salary of ₱15,000.00.
It appears on record that respondent, on March 29, 2003, wrote a
letter of resignation addressed to Violeta T. Cariño, directress of
petitioner, which reads:
Dear Madame:
I am tendering my irrevocable resignation effective April 1, 2003
due to personal and family reasons.
I would like to express my thanks and gratitude for the
opportunity, trust and confidence given to me as an Acting
Principal in your prestigious school.
God bless and more power to you.
Sincerely yours,
Mrs. ADELAIDA P. MANALO1
On March 31, 2003, respondent received a letter of termination
from petitioner, viz.:
Dear Mrs. Manalo:
Greetings of Peace!
The Board of Trustees of the Cariño Group of Companies,
particularly that of Magis Young Achievers’ Learning Center
convened, deliberated and came up with a Board Resolution that
will strictly impose all means possible to come up with a cost-
cutting scheme. Part of that scheme is a systematic reorganization
which will entail streamlining of human resources.
As agreed upon by the Board of Directors, the position of
PRINCIPAL will be abolished next school year. Therefore, we regret
to inform you that we can no longer renew your contract, which
will expire on March 31, 2003. Thus, thank you for the input you
have given to Magis during your term of office as Acting Principal.
The function of the said position shall be delegated to other staff
members in the organization.
Hoping for your understanding on this matter and we pray for
your future endeavors.
Very truly yours,
(Signed)
Mrs. Violeta T. Cariño
School Directress
Noted by:
(Signed)
Mr. Severo Cariño
President2
On April 4, 2003, respondent instituted against petitioner a
Complaint3 for illegal dismissal and non-payment of 13th month
pay, with a prayer for reinstatement, award of full backwages and
moral and exemplary damages.
In her position paper,4 respondent claimed that her termination
violated the provisions of her employment contract, and that the
alleged abolition of the position of Principal was not among the
grounds for termination by an employer under Article 2825 of the
Labor Code. She further asserted that petitioner infringed Article
2836 of the Labor Code, as the required 30-day notice to the
Department of Labor and Employment (DOLE) and to her as the
employee, and the payment of her separation pay were not
complied with. She also claimed that she was terminated from
service for the alleged expiration of her employment, but that her
contract did not provide for a fixed term or period. She likewise
prayed for the payment of her 13th month pay under Presidential
Decree (PD) No. 851.
Petitioner, in its position paper,7 countered that respondent was
legally terminated because the one-year probationary period, from
April 1, 2002 to March 3, 2003, had already lapsed and she failed
to meet the criteria set by the school pursuant to the Manual of
Regulation for Private Schools, adopted by the then Department of
Education, Culture and Sports (DECS), paragraph 75 of which
provides that:
(75) Full-time teachers who have rendered three years of
satisfactory service shall be considered permanent.
On December 3, 2003, Labor Arbiter (LA) Renell Joseph R. dela
Cruz rendered a Decision8 dismissing the complaint for illegal
dismissal, including the other claims of respondent, for lack of
merit, except that it ordered the payment of her 13th month pay
in the amount of ₱3,750.00. The LA ratiocinated in this wise:
It is our considered opinion [that] complainant was not dismissed,
much less, illegally. On the contrary, she resigned. It is hard for
us to imagine complainant would accede to sign a resignation
letter as a precondition to her hiring considering her educational
background. Thus, in the absence of any circumstance tending to
show she was probably coerced her resignation must be upheld. x
xx
x x x The agreement (Annex "1" to Respondent’s [petitioner’s]
Position Paper; Annex "A" to Complainant’s Position Paper) by its
very nature and terms is a contract of employment with a period
(from 01 April 2002 to 31 March 2003, Annex ‘1’ to Respondent’s
Position Paper). Complainant’s observation that the space
reserved for the duration and effectivity of the contract was left
blank (Annex ‘A’ to Complainant’s [respondent’s] Position Paper)
to our mind is plain oversight. Read in its entirety, it is a standard
contract which by its very terms and conditions speaks of a
definite period of employment. The parties could have not thought
otherwise. The notification requirement in the contract in case of
"termination before the expiration of the period" confirms it. x x x
On appeal, on October 28, 2005, the National Labor Relations
Commission (NLRC), Third Division,9 in its Decision10 dated
October 28, 2005, reversed the Arbiter’s judgment. Petitioner was
ordered to reinstate respondent as a teacher, who shall be
credited with one-year service of probationary employment, and to
pay her the amounts of ₱3,750.00 and ₱325,000.00 representing
her 13th month pay and backwages, respectively. Petitioner’s
motion for reconsideration was denied in the NLRC’s
Resolution11 dated January 31, 2006.
Imputing grave abuse of discretion on the part of the NLRC,
petitioner went up to the CA via a petition for certiorari. The CA,
in its Decision dated January 31, 2007, affirmed the NLRC
decision and dismissed the petition. It likewise denied petitioner’s
motion for reconsideration in the Resolution dated June 29, 2007.
Hence, this petition anchored on the following grounds—
I. THE COURT OF APPEALS ERRED WHEN IT CONCLUDED
THAT THE RESIGNATION OF RESPONDENT MANALO DID NOT
BECOME EFFECTIVE DUE TO ALLEGED LACK OF
ACCEPTANCE;
II. THE COURT OF APPEALS ERRED WHEN IT RULED THAT
RESPONDENT MANALO IS A PERMANENT EMPLOYEE;
III. THE COURT OF APPEALS ERRED WHEN IT RULED THAT
THE CONTRACT OF EMPLOYMENT BETWEEN PETITIONER AND
RESPONDENT DID NOT STIPULATE A PERIOD.12
Before going to the core issues of the controversy, we would like to
restate basic legal principles governing employment of secondary
school teachers in private schools, specifically, on the matter of
probationary employment.
A probationary employee or probationer is one who is on trial for
an employer, during which the latter determines whether or not
he is qualified for permanent employment. The probationary
employment is intended to afford the employer an opportunity to
observe the fitness of a probationary employee while at work, and
to ascertain whether he will become an efficient and productive
employee. While the employer observes the fitness, propriety and
efficiency of a probationer to ascertain whether he is qualified for
permanent employment, the probationer, on the other hand,
seeks to prove to the employer that he has the qualifications to
meet the reasonable standards for permanent employment. Thus,
the word probationary, as used to describe the period of
employment, implies the purpose of the term or period, not its
length.13
Indeed, the employer has the right, or is at liberty, to choose who
will be hired and who will be declined. As a component of this
right to select his employees, the employer may set or fix a
probationary period within which the latter may test and observe
the conduct of the former before hiring him permanently.14
But the law regulates the exercise of this prerogative to fix the
period of probationary employment. While there is no statutory
cap on the minimum term of probation, the law sets a maximum
"trial period" during which the employer may test the fitness and
efficiency of the employee.
The general rule on the maximum allowable period of
probationary employment is found in Article 281 of the Labor
Code, which states:
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 at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a
regular employee. 1avvphi1.zw+
This upper limit on the term of probationary employment,
however, does not apply to all classes of occupations.
For "academic personnel" in private schools, colleges and
universities, probationary employment is governed by Section 92
of the 1992 Manual of Regulations for Private Schools15 (Manual),
which reads:
Section 92. Probationary Period. – Subject in all instances to
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more
than three (3) consecutive years of satisfactory service for those in
the elementary and secondary levels, six (6) consecutive regular
semesters of satisfactory service for those in the tertiary level, and
nine (9) consecutive trimesters of satisfactory service for those in
the tertiary level where collegiate courses are offered on a
trimester basis.16
This was supplemented by DOLE-DECS-CHED-TESDA Order No.
1 dated February 7, 1996, which provides that the probationary
period for academic personnel shall not be more than three (3)
consecutive school years of satisfactory service for those in the
elementary and secondary levels.17 By this supplement, it is made
clear that the period of probation for academic personnel shall be
counted in terms of "school years," and not "calendar
years."18Then, Section 4.m(4)[c] of the Manual delineates the
coverage of Section 92, by defining the term "academic personnel"
to include:
(A)ll school personnel who are formally engaged in actual teaching
service or in research assignments, either on full-time or part-time
basis; as well as those who possess certain prescribed academic
functions directly supportive of teaching, such as registrars,
librarians, guidance counselors, researchers, and other similar
persons. They include school officials responsible for academic
matters, and may include other school officials.19
The reason for this disparate treatment was explained many years
ago in Escudero v. Office of the President of the
Philippines,20 where the Court declared:
However, the six-month probationary period prescribed by the
Secretary of Labor is merely the general rule. x x x
It is, thus, clear that the Labor Code authorizes different
probationary periods, according to the requirements of the
particular job. For private school teachers, the period of probation
is governed by the 1970 Manual of Regulations for Private Schools
x x x.21
The probationary period of three years for private school teachers
was, in fact, confirmed earlier in Labajo v. Alejandro,22 viz.:
The three (3)-year period of service mentioned in paragraph 75 (of
the Manual of Regulations for Private Schools) is of course the
maximum period or upper limit, so to speak, of probationary
employment allowed in the case of private school teachers. This
necessarily implies that a regular or permanent employment
status may, under certain conditions, be attained in less than
three (3) years. By and large, however, whether or not one has
indeed attained permanent status in one’s employment, before the
passage of three (3) years, is a matter of proof.
Over the years, even with the enactment of a new Labor Code and
the revision of the Manual, the rule has not changed.
Thus, for academic personnel in private elementary and
secondary schools, it is only after one has satisfactorily completed
the probationary period of three (3) school years and is rehired
that he acquires full tenure as a regular or permanent employee.
In this regard, Section 93 of the Manual pertinently provides:
Sec. 93. Regular or Permanent Status. - Those who have served
the probationary period shall be made regular or permanent. Full-
time teachers who have satisfactorily completed their probationary
period shall be considered regular or permanent.
Accordingly, as held in Escudero, no vested right to a permanent
appointment shall accrue until the employee has completed the
prerequisite three-year period necessary for the acquisition of a
permanent status. Of course, the mere rendition of service for
three consecutive years does not automatically ripen into a
permanent appointment. It is also necessary that the employee be
a full-time teacher, and that the services he rendered are
satisfactory.23
The common practice is for the employer and the teacher to enter
into a contract, effective for one school year. At the end of the
school year, the employer has the option not to renew the
contract, particularly considering the teacher’s performance. If the
contract is not renewed, the employment relationship terminates.
If the contract is renewed, usually for another school year, the
probationary employment continues. Again, at the end of that
period, the parties may opt to renew or not to renew the contract.
If renewed, this second renewal of the contract for another school
year would then be the last year – since it would be the third
school year – of probationary employment. At the end of this third
year, the employer may now decide whether to extend a
permanent appointment to the employee, primarily on the basis of
the employee having met the reasonable standards of competence
and efficiency set by the employer. For the entire duration of this
three-year period, the teacher remains under probation. Upon the
expiration of his contract of employment, being simply on
probation, he cannot automatically claim security of tenure and
compel the employer to renew his employment contract.24 It is
when the yearly contract is renewed for the third time that Section
93 of the Manual becomes operative, and the teacher then is
entitled to regular or permanent employment status.
It is important that the contract of probationary employment
specify the period or term of its effectivity. The failure to stipulate
its precise duration could lead to the inference that the contract is
binding for the full three-year probationary period.25
All this does not mean that academic personnel cannot acquire
permanent employment status earlier than after the lapse of three
years. The period of probation may be reduced if the employer,
convinced of the fitness and efficiency of a probationary employee,
voluntarily extends a permanent appointment even before the
three-year period ends. Conversely, if the purpose sought by the
employer is neither attained nor attainable within the said period,
the law does not preclude the employer from terminating the
probationary employment on justifiable ground;26 or, a shorter
probationary period may be incorporated in a collective bargaining
agreement.27 But absent any circumstances which unmistakably
show that an abbreviated probationary period has been agreed
upon, the three-year probationary term governs.
Be that as it may, teachers on probationary employment enjoy
security of tenure. In Biboso v. Victorias Milling Co., Inc.,28 we
made the following pronouncement:
This is, by no means, to assert that the security of tenure
protection of the Constitution does not apply to probationary
employees. x x x During such period, they could remain in their
positions and any circumvention of their rights, in accordance
with the statutory scheme, is subject to inquiry and thereafter
correction by the Department of Labor.
The ruling in Biboso simply signifies that probationary employees
enjoy security of tenure during the term of their probationary
employment. As such, they cannot be removed except for cause as
provided by law, or if at the end of every yearly contract during
the three-year period, the employee does not meet the reasonable
standards set by the employer at the time of engagement. But this
guarantee of security of tenure applies only during the period of
probation. Once that period expires, the constitutional protection
can no longer be invoked.29
All these principles notwithstanding, we do not discount the
validity of fixed-term employment where –
the 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.30
It does not necessarily follow that where the duties of the
employees consist of activities usually necessary or desirable in
the usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such
activities.31 Thus, in St. Theresa’s School of Novaliches
Foundation v. NLRC,32 we held that a contractual stipulation
providing for a fixed term of nine (9) months, not being contrary to
law, morals, good customs, public order and public policy, is
valid, binding and must be respected, as it is the contract of
employment that governs the relationship of the parties.
Now, to the issues in the case at bench.
There should be no question that the employment of the
respondent, as teacher, in petitioner school on April 18, 2002 is
probationary in character, consistent with standard practice in
private schools. In light of our disquisition above, we cannot
subscribe to the proposition that the respondent has acquired
regular or permanent tenure as teacher. She had rendered service
as such only from April 18, 2002 until March 31, 2003. She has
not completed the requisite three-year period of probationary
employment, as provided in the Manual. She cannot, by right,
claim permanent status. lawphil.net
There should also be no doubt that respondent’s appointment as
Acting Principal is merely temporary, or one that is good until
another appointment is made to take its place.33 An "acting"
appointment is essentially a temporary appointment, revocable at
will. The undisturbed unanimity of cases shows that one who
holds a temporary appointment has no fixed tenure of office; his
employment can be terminated any time at the pleasure of the
appointing power without need to show that it is for
cause.34 Further, in La Salette of Santiago v. NLRC,35 we
acknowledged the customary arrangement in private schools to
rotate administrative positions, e.g., Dean or Principal, among
employees, without the employee so appointed attaining security
of tenure with respect to these positions.
We are also inclined to agree with the CA that the resignation of
the respondent36 is not valid, not only because there was no
express acceptance thereof by the employer, but because there is
a cloud of doubt as to the voluntariness of respondent’s
resignation.
Resignation is the voluntary act of an employee who finds himself
in a situation where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and that he has
no other choice but to dissociate himself from
employment.37 Voluntary resignation is made with the intention of
relinquishing an office, accompanied by the act of
abandonment.38 It is the acceptance of an employee’s resignation
that renders it operative.39
Furthermore, well-entrenched is the rule that resignation is
inconsistent with the filing of a complaint for illegal dismissal.40 To
be valid, the resignation must be unconditional, with the intent to
operate as such; there must be a clear intention to relinquish the
position.41 In this case, respondent actively pursued her illegal
dismissal case against petitioner, such that she cannot be said to
have voluntarily resigned from her job.
What is truly contentious is whether the probationary
appointment of the respondent on April 18, 2002 was for a fixed
period of one (1) year, or without a fixed term, inasmuch as the
parties presented different versions of the employment agreement.
As articulated by the CA:
In plain language, We are confronted with two (2) copies of an
agreement, one with a negative period and one provided for a one
(1) year period for its effectivity. Ironically, none among the parties
offered corroborative evidence as to which of the two (2)
discrepancies is the correct one that must be given effect. x x x.42
The CA resolved the impassé in this wise:
Under this circumstance, We can only apply Article 1702 of the
Civil Code which provides that, in case of doubt, all labor
contracts shall be construed in favor of the laborer. Then, too,
settled is the rule that any ambiguity in a contract whose terms
are susceptible of different interpretations must be read against
the party who drafted it. In the case at bar, the drafter of the
contract is herein petitioners and must, therefore, be read against
their contention.43
We agree with the CA.
In this case, there truly existed a doubt as to which version of the
employment agreement should be given weight. In respondent’s
copy, the period of effectivity of the agreement remained blank. On
the other hand, petitioner’s copy provided for a one-year period,
surprisingly from April 1, 2002 to March 31, 2003, even though
the pleadings submitted by both parties indicated that respondent
was hired on April 18, 2002. What is noticeable even more is that
the handwriting indicating the one-year period in petitioner’s copy
is different from the handwriting that filled up the other needed
information in the same agreement.44
Thus, following Article 1702 of the Civil Code that all doubts
regarding labor contracts should be construed in favor of labor,
then it should be respondent’s copy which did not provide for an
express period which should be upheld, especially when there are
circumstances that render the version of petitioner suspect. This
is in line with the State policy of affording protection to labor,
such that the lowly laborer, who is usually at the mercy of the
employer, must look up to the law to place him on equal footing
with his employer.45
In addition, the employment agreement may be likened into a
contract of adhesion considering that it is petitioner who insists
that there existed an express period of one year from April 1, 2002
to March 31, 2003, using as proof its own copy of the agreement.
While contracts of adhesion are valid and binding, in cases of
doubt which will cause a great imbalance of rights against one of
the parties, the contract shall be construed against the party who
drafted the same. Hence, in this case, where the very employment
of respondent is at stake, the doubt as to the period of
employment must be construed in her favor.
The other issue to resolve is whether respondent, even as a
probationary employee, was illegally dismissed. We rule in the
affirmative.
As above discussed, probationary employees enjoy security of
tenure during the term of their probationary employment such
that they may only be terminated for cause as provided for by law,
or if at the end of the probationary period, the employee failed to
meet the reasonable standards set by the employer at the time of
the employee’s engagement. Undeniably, respondent was hired as
a probationary teacher and, as such, it was incumbent upon
petitioner to show by competent evidence that she did not meet
the standards set by the school. This requirement, petitioner
failed to discharge. To note, the termination of respondent was
effected by that letter stating that she was being relieved from
employment because the school authorities allegedly decided, as a
cost-cutting measure, that the position of "Principal" was to be
abolished. Nowhere in that letter was respondent informed that
her performance as a school teacher was less than satisfactory.
Thus, in light of our ruling of Espiritu Santo Parochial School v.
NLRC46 that, in the absence of an express period of probation for
private school teachers, the three-year probationary period
provided by the Manual of Regulations for Private Schools must
apply likewise to the case of respondent. In other words, absent
any concrete and competent proof that her performance as a
teacher was unsatisfactory from her hiring on April 18, 2002 up
to March 31, 2003, respondent is entitled to continue her three-
year period of probationary period, such that from March 31,
2003, her probationary employment is deemed renewed for the
following two school years.47
Finally, we rule on the propriety of the monetary awards.
Petitioner, as employer, is entitled to decide whether to extend
respondent a permanent status by renewing her contract beyond
the three-year period. Given the acrimony between the parties
which must have been generated by this controversy, it can be
said unequivocally that petitioner had opted not to extend
respondent’s employment beyond this period. Therefore, the
award of backwages as a consequence of the finding of illegal
dismissal in favor of respondent should be confined to the three-
year probationary period. Computing her monthly salary of
₱15,000.00 for the next two school years (₱15,000.00 x 10 months
x 2), respondent already having received her full salaries for the
year 2002-2003, she is entitled to a total amount of
₱300,000.00.48 Moreover, respondent is also entitled to receive her
13th month pay correspondent to the said two school years,
computed as yearly salary, divided by 12 months in a year,
multiplied by 2, corresponding to the school years 2003-2004 and
2004-2005, or ₱150,000.00 / 12 months x 2 = ₱25,000.00. Thus,
the NLRC was correct in awarding respondent the amount of
₱325,000.00 as backwages, inclusive of 13th month pay for the
school years 2003-2004 and 2004-2005, and the amount of
₱3,750.00 as pro-rated 13th month pay.
WHEREFORE, the petition is DENIED. The assailed Decision
dated January 31, 2007 and the Resolution dated June 29, 2007
of the Court of Appeals are AFFIRMED.
SO ORDERED.
[G.R. NO. 173849 : September 28, 2007]
PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. and/ or ELIODORO C.
CRUZ, Petitioners, v.JEFF B. BOCLOT, Respondent.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Rules of Civil
Procedure, petitioners pray that this Court annul and set aside the (a)
Decision1 dated 18 November 2005 of the Court of Appeals in CA-G.R. SP No.
88929 affirming the twin Resolutions2 dated 29 October 20043 and 29 December
20044of the National Labor Relations Commission (NLRC) in NLRC NCR CA No.
038683-04; and (b) Resolution dated 21 July 2006 of the appellate court in the
same case, denying petitioners' Motion for Reconsideration of the aforementioned
Decision.
The factual antecedents of the present petition are as follows:
Petitioner Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic
corporation engaged in the business of providing arrastre and stevedoring
services5 at Pier 8 in the Manila North Harbor. PASSI has been rendering arrastre
and stevedoring services at the port area since 1974 and employs stevedores who
assist in the loading and unloading of cargoes to and from the vessels. Petitioner
Eliodoro C. Cruz is its Vice-President and General Manager.
Respondent Jeff B. Boclot was hired by PASSI to perform the functions of a
stevedore starting 20 September 1999.
The facts show that respondent rendered actual services to PASSI during the
following periods:
Period Duration
September - December 1999 (4 months) 21 days
January - April 2000 (4 months) 20 days
March - December 2001 (10 months) 85 days
January - December 2002 (12 months) 70.5 days
January - June 2003 (6 months) 32 days
Total 36 months 228.5 days6
On 15 April 2000, the Philippine Ports Authority (PPA) seized the facilities and
took over the operations of PASSI through its Special Takeover Unit, absorbing
PASSI workers as well as their relievers. By virtue of a Decision dated 9 January
2001 of the Court of Appeals, petitioners were able to regain control of their
arrastre and stevedoring operations at Pier 8 on 12 March 2001.7
On 9 May 2003, respondent filed a Complaint with the Labor Arbiter of the NLRC,
claiming regularization; payment of service incentive leave and 13th month pays;
moral, exemplary and actual damages; and attorney's fees. Respondent alleged
that he was hired by PASSI in October 1999 and was issued company ID No.
304,8 a PPA Pass and SSS documents. In fact, respondent contended that he
became a regular employee by April 2000, since it was his sixth continuous
month in service in PASSI's regular course of business. He argued on the basis of
Articles 2809 and 28110 of the Labor Code. He maintains that under paragraph 2
of Article 280, he should be deemed a regular employee having rendered at least
one year of service with the company.
According to respondent, he remained a casual employee from the time he was
first hired to perform the services of a stevedore. Thus, respondent claimed he
was denied the rights and privileges of a regular employee, including those
granted under the Collective Bargaining Agreement (CBA) such as wage increase;
medical, dental and hospitalization benefits; vacation and sick leaves; uniforms,
Christmas gifts, productivity bonus, accident insurance, special separation pays,
and others.11
Respondent relied on Article XXV of the company's existing CBA, effective 4
March 1998 to 3 March 2003, which states the following:
The Company agrees to convert to regular status all incumbent probationary or
casual employees and workers in the Company who have served the Company for
an accumulated service term of employment of not less than six (6) months from
his original date of hiring
The probationary period for all future workers or employees shall be the following:
A. All skilled workers such as crane operator, mechanic, carpenter, winchman,
signalman and checkers shall become regular after three (3) months continuous
employment;
b. All semi-skilled personnel shall become regular after four (4) months of
continuous employment;
c. All non-skilled personnel shall be regular after six (6) months continuous
employment.12
In opposition thereto, petitioners alleged that respondent was hired as a mere
"reliever" stevedore and could thus not become a regular employee.
On 24 November 2003, NLRC Labor Arbiter Felipe P. Pati ruled for petitioners and
dismissed respondent's complaint. In finding no factual or legal basis for the
regularization of respondent, the Labor Arbiter came to the conclusion that
respondent was "nothing more than an extra worker who is called upon to work
at the pier in the absence of regular stevedores at a certain shift."13 He deemed
that Articles 280 and 281 of the Labor Code were inapplicable, on the contention
that the aforementioned articles speak of probationary employees and casual
employees while respondent, as a reliever, is neither a probationary employee nor
a casual employee. Neither was respondent qualified to avail himself of Service
Incentive Leave benefits, even assuming he was a regular employee, because the
number of days of service he had rendered reached a total of 228.5 days only - -
short of 365 days, the one-year requirement to qualify for this benefit. Finally,
respondent's prayer for the grant of attorney's fees, and for moral and exemplary
damages, was also denied.
Respondent appealed the Labor Arbiter's dismissal of his complaint to the NLRC.
Thereafter, the NLRC issued a Resolution on 29 October 2004 modifying the
Labor Arbiter's Decision, ruling:
WHEREFORE, premises considered, complainant's appeal is partly GRANTED.
The Labor Arbiter's assailed Decision in the above-entitled case is hereby
MODIFIED. Complainant is hereby declared a regular employee of Respondents.
The dismissal of Complainant's claim for benefits under the CBA and other
monetary claims are AFFIRMED for lack of jurisdiction and lack of merit,
respectively.14 (Italics ours.)
The NLRC gave credence to respondent's allegations that the Labor Arbiter
committed grave abuse of discretion in dismissing respondent's claim for
regularization. The NLRC ruled that petitioners' failure, without reasonable
explanation, to present proof of absences of "regular" stevedores leads to the
conclusion that the stevedores, termed by petitioners as "relievers," work on
rotation basis, just like the "regular" stevedores. The NLRC predicated its findings
that respondent is a regular employee of petitioners on the reasonable connection
between the activity performed by the employee in relation to the usual business
or trade of the employer. According to the NLRC, although respondent rendered
an average of 6.34 days of work a month, the activities performed were usually
necessary and desirable in the business of petitioners.
Petitioners filed a Motion for Reconsideration of the foregoing NLRC Resolution
dated 29 October 2004 but this was subsequently denied in another NLRC
Resolution issued on 29 December 2004.
Upon a denial of their motion for reconsideration by the NLRC, petitioners
elevated their case to the Court of Appeals via a Petition for Certiorari with prayer
for the issuance of a Temporary Restraining Order (TRO) and/or writ of
preliminary injunction.
On 18 November 2005, the Court of Appeals dismissed the Petition
for Certiorari and affirmed the Resolutions of the NLRC finding respondent to be a
regular employee. The Court of Appeals grounded its Decision on this Court's
previous rulings that what determines regularity or casualness is not the
employment contract, written or otherwise, but the nature of the job. Citing De
Leon v. National Labor Relations Commission,15 which enumerated the standards
for determining regular employment, the Court of Appeals ruled that even
assuming that respondent was able to render services for only 228.5 days in a
period of 36 months, the fact remains that his services were continuously utilized
by petitioners in their business. Where the job is usually necessary or desirable to
the main business of the employer, then the employment is regular.16 The
pertinent portions of the assailed Decision of the Court of Appeals are herein
reproduced:
Applying the above-mentioned principles, private respondent's task of loading and
unloading cargoes to and from the vessels is undoubtedly necessary and desirable
to the business of petitioners' arrastre and stevedoring services. Equally
unavailing is the petitioners' contention that being a reliever or an extra worker,
private respondent cannot be deemed as a regular employee. This cannot be
accorded with merit as the same does not change the nature of the latter's
employment. Whether private respondent was hired only in the absence of regular
stevedores, as petitioners maintain, let it be emphasized that the determination of
whether the employment is casual or regular does not depend on the will or word
of the employer, and the procedure of hiring and manner of paying, but on the
nature of the activities performed by an employee, and to some extent, the length
of performance, and its continued existence. Petitioners' admission that it has
been an industry practice to hire relievers whenever the need arises to ensure
that operations at the pier continue for 24 hours only proves that private
respondent's services are necessary or desirable in its usual business, otherwise,
private respondent should not have been at the employ of petitioners for a period
[of] 36 months. Even assuming that private respondent was able to render only
228.5 days out of 36 months, the undisputed fact remains that private
respondent's services was continuously utilized by petitioners in the operation of
its business. Whether one's employment is regular is not determined by the
number of the hours one works, but by the nature of the work and by the length
of time one has been in that particular job. To uphold petitioners' argument
would preclude and deprive workers, like private respondent herein, to acquire
regular status favorably mandated by the Labor Code.
xxx
WHEREFORE, the instant petition is DISMISSED for lack of merit and the
assailed resolutions of public respondent National Labor Relations Commission
dated October 29, 2004 and December 29, 2004 are hereby AFFIRMED.17
On 14 December 2005, petitioners filed a Motion for Reconsideration, which was
denied by the Court of Appeals in a Resolution dated 21 July 2006.
Hence, through this Petition for Review on Certiorari, petitioners assail the
Decision of the Court of Appeals, raising the sole argument that:
THE COURT OF APPEALS ERRED IN RULING THAT PRIVATE RESPONDENT
JEFF BOCLOT IS A REGULAR EMPLOYEE OF PETITIONER PIER 8 ARRASTRE &
STEVEDORING SERVICES, INC. BECAUSE HE PERFORMED TASKS WHICH ARE
USUALLY NECESSARY AND DESIRABLE TO THE MAIN BUSINESS OF
PETITIONER CORPORATION
Evidently, the only issue subject to the resolution of this Court is whether or not
respondent has attained regular status as PASSI's employee.
In the instant petition, petitioners are vehemently denying that respondent has
become PASSI's regular employee. Petitioners insist that respondent was hired as
a mere "reliever" stevedore and, thus, could not become a regular stevedore.
Petitioners presented a list of the days when respondent's services as stevedore
were engaged, to support its claim that respondent is a reliever. Petitioners aver
that the employment of the stevedores is governed by a system of rotation. Based
on this system of rotation, the work available to reliever stevedores is dependent
on the actual stevedoring and arrastre requirements at a current given time.
Petitioners posit that respondent, as a reliever stevedore, is a mere extra worker
whose work is dependent on the absence of regular stevedores during any given
shift. During "rotation proper," as petitioners term it, all regular employees are
first called and given work before any reliever is assigned. Petitioners assert that
while the regular stevedores work an average of 4 days a week (or 16 days a
month), respondent performed services for a total of 228.5 days (or only for an
average of 6.34 days a month) from September 1999 to June 2003. In defense of
the Court of Appeals' ruling grounded on Articles 280 and 281 of the Labor Code,
petitioners maintain that the foregoing provisions are inapplicable on the
postulation that respondent is neither a probationary nor a casual employee. For
the same reasons, petitioners argue that Article XXV of the CBA cannot be used
to support respondent's contention that he is a regular employee since the CBA
provision he invokes refers to "all incumbent probationary or casual employees
and workers in the company" and not to respondent who is neither a casual nor a
probationary employee.
After a deliberate study of Labor Law provisions and jurisprudence, and in light of
the particular circumstances of this case, this Court has arrived at the same
conclusion as those of the NLRC and the Court of Appeals that respondent is a
regular employee, but on a different basis.
Under the 1987 Philippine Constitution, the State affords full protection to labor,
local and overseas, organized and unorganized; and the promotion of full
employment and equality of employment opportunities for all. The State affirms
labor as a primary social economic force and guarantees that it shall protect the
rights of workers and promote their welfare.18
The Labor Code, which implements the foregoing Constitutional mandate, draws
a fine line between regular and casual employees to protect the interests of
labor.19 "Its language evidently manifests the intent to safeguard the tenurial
interest of the worker who may be denied the rights and benefits due a regular
employee by virtue of lopsided agreements with the economically powerful
employer who can maneuver to keep an employee on a casual status for as long
as convenient."20 Thus, the standards for determining whether an employee is a
regular employee or a casual or project employee have been delineated in Article
280 of the Labor Code, to wit:
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 exist.
Under the foregoing provision, a regular employee is (1) one who is either engaged
to perform activities that are necessary or desirable in the usual trade or business
of the employer except for project21 or seasonal employees; or (2) a casual
employee who has rendered at least one year of service, whether continuous or
broken, with respect to the activity in which he is employed.22 Additionally, Article
281 of the Labor Code further considers a regular employee as one who is allowed
to work after a probationary period. Based on the aforementioned, although
performing activities that are necessary or desirable in the usual trade or
business of the employer, an employee such as a project or seasonal employee is
not necessarily a regular employee. The situation of respondent is similar to that
of a project or seasonal employee, albeit on a daily basis.
Under the second paragraph of the same provision, all other employees who do
not fall under the definition of the preceding paragraph are casual employees.
However, the second paragraph also provides that it 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.
De Leon v. National Labor Relations Commission23 succinctly explains the
delineation of the foregoing employee classification, to wit:
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. 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 one
year, even if the performance is not continuous or merely intermittent, the law
deems the 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 also considered regular, but only with respect to such
activity and while such activity exists. (Emphasis supplied.)
PASSI is engaged in providing stevedoring and arrastre services in the port area in
Manila. Stevedoring, dock and arrastre operations include, but are not limited to,
the opening and closing of a vessel's hatches; discharging of cargoes from ship to
truck or dock, lighters and barges, and vice-versa; movement of cargoes inside
vessels, warehouses, terminals and docks; and other related work. In line with
this, petitioners hire stevedores who assist in the loading and unloading of
cargoes to and from the vessels.
Petitioners concede that whenever respondent worked as a reliever stevedore due
to the absence of a regular stevedore, he performed tasks that are usually
necessary and desirable to their business. Petitioners, however, contend that this
in itself does not make him a regular stevedore, postulating that the hiring of
respondent as a reliever is akin to a situation in which a worker goes on vacation
leave, sick leave, maternity leave or paternity leave; and the employer is
constrained to hire another worker from outside the establishment to ensure the
smooth flow of its operations.
Based on the circumstances of the instant case, this Court agrees. It takes
judicial notice24 that it is an industry practice in port services to hire "reliever"
stevedores in order to ensure smooth-flowing 24-hour stevedoring and arrastre
operations in the port area. No doubt, serving as a stevedore, respondent
performs tasks necessary or desirable to the usual business of petitioners.
However, it should be deemed part of the nature of his work that he can only
work as a stevedore in the absence of the employee regularly employed for the
very same function. Bearing in mind that respondent performed services from
September 1999 until June 2003 for a period of only 228.5 days in 36 months, or
roughly an average of 6.34 days a month; while a regular stevedore working for
petitioners, on the other hand, renders service for an average of 16 days a month,
demonstrates that respondent's employment is subject to the availability of work,
depending on the absences of the regular stevedores. Moreover, respondent does
not contest that he was well aware that he would only be given work when there
are absent or unavailable employees. Respondent also does not allege, nor is
there any showing, that he was disallowed or prevented from offering his services
to other cargo handlers in the other piers at the North Harbor other than
petitioners. As aforestated, the situation of respondent is akin to that of a
seasonal or project or term employee, albeit on a daily basis.
Anent petitioners' contention that respondent is neither a probationary nor a
casual employee, this Court again refers to Article 280 of the Labor Code.
The second paragraph thereof stipulates in unequivocal terms that all other
employees who do not fall under the definitions in the first paragraph of regular,
project and seasonal employees, are deemed casual employees.25 Not qualifying
under any of the kinds of employees covered by the first paragraph of Article 280
of the Labor Code, then respondent is a casual employee under the second
paragraph of the same provision.
The same provision, however, provides that a casual employee can be considered
as regular employee if said casual employee has rendered at least one year of
service regardless of the fact that such service may be continuous or broken.
Section 3, Rule V, Book II of the Implementing Rules and Regulations of the Labor
Code clearly defines the term "at least one year of service" to mean service within
12 months, whether continuous or broken, reckoned from the date the employee
started working, including authorized absences and paid regular holidays, unless
the working days in the establishment as a matter of practice or policy, or that
provided in the employment contract, is less than 12 months, in which case said
period shall be considered one year.26 If the employee has been performing the job
for at least one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its performance
as sufficient evidence of the necessity, if not indispensability, of that activity to
the business of the employer.27 Applying the foregoing, respondent, who has
performed actual stevedoring services for petitioners only for an accumulated
period of 228.5 days does not fall under the classification of a casual turned
regular employee after rendering at least one year of service, whether continuous
or intermittent.28
Both the Constitution and the Labor Code mandate the protection of labor.
Hence, as a matter of judicial policy, this Court has, in a number of instances,
leaned backwards to protect labor and the working class against the
machinations and incursions of their more financially entrenched
employers.29 Where from the circumstances it is apparent that periods have been
imposed to preclude acquisition of tenurial security by an employee, such
imposition should be struck down or disregarded as contrary to public policy and
morals.30 However, we take this occasion to emphasize that the law, while
protecting the rights of the employees, authorizes neither the oppression nor the
destruction of the employer. When the law tilts the scale of justice in favor of
labor, the scale should never be so tilted if the result would be an injustice to the
employer.31 Thus, this Court cannot be compelled to declare respondent as a
regular employee when by the nature of respondent's work as a reliever stevedore
and his accumulated length of service of only eight months do not qualify him to
be declared as such under the provisions of the Labor Code alone.32
NONETHELESS, this Court still finds respondent to be a regular employee on the
basis of pertinent provisions under the CBA between PASSI and its Workers'
union, which was effective from 4 March 1998 to 3 March 2003:
The Company agrees to convert to regular status all incumbent probationary or
casual employees and workers in the Company who have served the Company for
an accumulated service term of employment of not less than six (6) months from
his original date of hiring.
The probationary period for all future workers or employees shall be the following:
(a) All skilled workers such as crane operator, mechanic, carpenter, winchman,
signalman and checkers shall become regular after three (3) months continuous
employment;
(b) All semi-skilled personnel shall become regular after four (4) months of
continuous employment;
(c) All non-skilled personnel shall be regular after six (6) months continuous
employment.33 (Italics ours.)
Petitioners were crucified on this argument raised by respondent. The union
which negotiated the existing CBA is the sole and exclusive bargaining
representative of all the stevedores, dock workers, gang bosses, rank and file
employees working at Pier 8, and its offices. The NLRC ruled that respondent's
reliance on the CBA to show that he has become a regular employee is misplaced
for the reason that the CBA applies only to regular workers of the
company.34 Respondent assents that he is not a member of the union, as he was
not recognized by PASSI as its regular employee, but this Court notes that PASSI
adopts a union-shop agreement, culling from Article II of the CBA which
stipulates:
The Union and the Company (PASSI) hereby agree to adopt the "Union Shop" as a
condition of employment to the position (sic) covered by this Agreement.35
Under a union-shop agreement, although nonmembers may be hired, an
employee is required to become a union member after a certain period, in order to
retain employment. This requirement applies to present and future
employees.36 The same article of the CBA stipulates that employment in PASSI
cannot be obtained without prior membership in the union. ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Apropos, applying the foregoing provisions of the CBA, respondent should be
considered a regular employee after six months of accumulated service. It is
clearly stipulated therein that petitioners shall agree to convert to regular status
all incumbent probationary or casual employees and workers in PASSI who have
served PASSI for an accumulated service term of employment of not less than six
months from the original date of hiring. Having rendered 228.5 days, or eight
months of service to petitioners since 1999, then respondent is entitled to
regularization by virtue of the said CBA provisions.
In light of the foregoing, petitioners must accord respondent the status of a
regular employee.
Additionally, respondent is not yet entitled to avail himself of service incentive
leave benefits for his failure to render at least one year of service. As to the 13th
month pay, petitioners have shown that respondent has been paid the same.
Respondent is also not entitled to moral and exemplary damages and attorney's
fees for the reason that an employer may only be held liable for damages if the
attendant facts show that it was oppressive to labor or done in a manner contrary
to morals, good customs and public policy. None of the aforementioned
circumstances are present. Neither was there any appeal raised by respondent
pertaining to the non-award of the foregoing claims.
WHEREFORE, in view of the foregoing, the instant Petition is DENIED and the
Decision of the Court of Appeals dated 18 November 2005 and its Resolution
dated 21 January 2006, in CA-G.R. SP No. 88929 are AFFIRMED in the manner
herein discussed. Costs against petitioners.
SO ORDERED.
[G.R. NO. 167310 : June 17, 2008]
THE PENINSULA MANILA, ROLF PFISTERER AND BENILDA
QUEVEDO-SANTOS, Petitioners, v. ELAINE M. ALIPIO, Respondent.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated August 23, 2004 and
Resolution2 dated March 11, 2005 of the Court of Appeals in CA-G.R.
SP No. 67007, which reversed the Decision3 dated December 29,
2000 of the National Labor Relations Commission (NLRC) in NLRC
NCR CA No. 023890-00. The NLRC had earlier affirmed with
modification the Labor Arbiter's Decision,4 dismissing the complaint
for illegal dismissal against herein petitioners, but awarding
respondent herein separation pay amounting to P20,000.
The pertinent facts are as follows:
Petitioner, The Peninsula Manila, is a corporation engaged in the
hotel business. Co-petitioners Rolf Pfisterer and Benilda Quevedo-
Santos were the general manager and human resources manager,
respectively, of the hotel at the time of the controversy.
The hotel operates a clinic 24 hours a day and employs three regular
nurses who work eight hours each day on three separate shifts. The
hotel also engages the services of reliever nurses who substitute for
the regular nurses who are either off-duty or absent.
Respondent Elaine M. Alipio was hired merely as a reliever nurse.
However, she had been performing the usual tasks and functions of a
regular nurse since the start of her employment on December 11,
1993. Hence, after about four years of employment in the hotel, she
inquired why she was not receiving her 13th month pay.
In response, petitioners required her to submit a summary of her
tour of duty for 1997. After she had submitted the said summary,
Alipio was paid P8,000 as her 13th month pay for 1997. Alipio
likewise requested for the payment of her 13th month pay for 1993 to
1996, but her request was denied.
On December 18, 1998, Alipio was informed by a fellow nurse that
she can only report for work after meeting up with petitioner Santos.
When Alipio met with Santos on December 21, 1998, Alipio was
asked regarding her payslip vouchers. She told Santos that she made
copies of her payslip vouchers because Peninsula does not give her
copies of the same. Santos was peeved with Alipio's response because
the latter was allegedly not entitled to get copies of her payslip
vouchers. Santos likewise directed Alipio not to report for work
anymore.
Aggrieved, Alipio filed a complaint for illegal dismissal against the
petitioners.
After due proceedings, the Labor Arbiter dismissed the complaint for
lack of merit, but directed that Peninsula pay Alipio separation pay
amounting to P20,000. The Labor Arbiter held,
WHEREFORE, in view of the foregoing, judgment is hereby
rendered DISMISSING the instant complaint for lack of merit.
However, considering that complainant had served as reliever for
respondent hotel for a long period, the respondent hotel is ordered to
give her separation pay equivalent to one-half month pay for every
year of complainant's reliever service, in the total amount of
P20,000.00 based on an average monthly pay of P8,000.00.
SO ORDERED.5
On appeal, the NLRC affirmed with modification the Labor Arbiter's
decision, to wit:
WHEREFORE, the appeal of the complainant is dismissed for lack of
merit. Accordingly, the decision appealed from is affirmed with the
modification that the award of separation pay is hereby deleted.
SO ORDERED.6
Upon further review, the Court of Appeals reversed the decision of the
NLRC after ascertaining that the findings of the Labor Arbiter and the
NLRC that Alipio is not an employee of Peninsula and that she was
validly dismissed is not supported by the evidence on record.7The
dispositive portion of the Decision dated August 23, 2004 of the
Court of Appeals reads:
WHEREFORE, the petition is GRANTED and the Decision dated
December 29, 2000 and the Order dated June 29, 2001 of the
National Labor Relations Commission are REVERSED and SET
ASIDE.
Private respondents The Peninsula Manila and Benilda Quevedo-
Santos are ordered to reinstate petitioner Elaine M. Alipio as regular
staff nurse without loss of seniority rights; to pay petitioner, jointly
and severally, full backwages and all the benefits to which she is
entitled under the Labor Code from December 12, 1994 up to the
time of her actual reinstatement; moral damages in the amount
of P30,000.00, exemplary damages in the amount of P20,000[.]00,
and attorney's fees equivalent to ten (10%) percent of the total
monetary award.
Let this case be remanded to the Labor Arbitration Branch, National
Labor Relations Commission for the computation of the monetary
claims of petitioner.
SO ORDERED.8 (Emphasis supplied.)
Petitioners moved for reconsideration but their motion was denied.
Hence, the instant Petition for Review on Certiorari contending that
the Court of Appeals seriously erred:
I.
IN GIVING DUE COURSE TO THE RESPONDENT'S PETITION FOR
CERTIORARI WHICH WAS MAINLY BASED ON ALLEGATIONS OF
SUPPOSED FACTUAL ERRORS COMMITTED BY THE NATIONAL
LABOR RELATIONS COMMISSION AND IN REVERSING THE
LATTER'S FINDINGS OF FACT WHICH WERE SUPPORTED BY
SUBSTANTIAL EVIDENCE IN THE RECORD; AND
II.
IN DECLARING THE RESPONDENT'S DISMISSAL TO BE ILLEGAL
AND ORDERING HER REINSTATEMENT WITH FULL BACK WAGES,
TOGETHER WITH PAYMENT OF MORAL AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES.9
Petitioners contend that the Court of Appeals should have accorded
the unanimous findings of the Labor Arbiter and the NLRC due
respect and finality as the conclusion reached by the two bodies is
supported by substantial evidence on record. Petitioners insist Alipio
was terminated for a just cause and with due process. Petitioners
likewise argue that Alipio cannot be reinstated as a regular staff
nurse because (1) she never served in that capacity; and (2) there is
no vacancy for the said position or any equivalent position to which
she may be reinstated.
Alipio, for her part, counters that the NLRC decision, affirming that of
the Labor Arbiter, is not beyond the scope of judicial review because
palpable mistake was committed in disregarding evidence showing (1)
her status as a regular employee of Peninsula; and (2) petitioners'
failure to observe substantive and procedural due process. She points
out that a Certification dated April 22, 1997 issued by the hotel
proves she was a regular staff nurse until her illegal dismissal. She
stresses that her supposed employment at the Quezon City Medical
Center does not negate the fact that she also worked as a regular
nurse of the hotel. Additionally, she contends that obtaining copies of
her own payslips does not indicate a perverse attitude justifying
dismissal for serious misconduct or willful disobedience. She adds,
there is no showing that her refusal to return copies of her payslips
caused material damage to petitioners. She further claims that bad
faith attended her dismissal.
After carefully weighing the parties' arguments, we resolve to deny
the petition.
It is doctrinal that the factual findings of quasi-judicial agencies like
the NLRC are generally accorded respect and finality if such are
supported by substantial evidence. In some instances, however, the
Court may be compelled to deviate from this general rule if the Labor
Arbiter and the NLRC misappreciated the facts, thereby resulting in
the impairment of the worker's constitutional and statutory right to
security of tenure.10
The conclusions reached by the NLRC and the Labor Arbiter, that
Alipio was not a regular employee of the hotel and that she was
validly dismissed, are not supported by law and evidence on record.
Article 280 of the Labor Code 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, 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 activity exists. (Emphasis
supplied.)
Thus, an employment is deemed regular when the activities
performed by the employee are usually necessary or desirable in the
usual business of the employer. However, any employee who has
rendered at least one year of service, even though intermittent, is
deemed regular with respect to the activity performed and while such
activity actually exists.11
In this case, records show that Alipio's services were engaged by the
hotel intermittently from 1993 up to 1998. Her services as a reliever
nurse were undoubtedly necessary and desirable in the hotel's
business of providing comfortable accommodation to its guests. In
any case, since she had rendered more than one year of intermittent
service as a reliever nurse at the hotel, she had become a regular
employee as early as December 12, 1994. Lastly, per the hotel's own
Certification dated April 22, 1997, she was already a "regular staff
nurse" until her dismissal.
Being a regular employee, Alipio enjoys security of tenure. Her
services may be terminated only upon compliance with the
substantive and procedural requisites for a valid dismissal: (1) the
dismissal must be for any of the causes provided in Article 28212 of
the Labor Code; and (2) the employee must be given an opportunity
to be heard and to defend himself.13
Did Alipio commit serious misconduct when she obtained copies of
her payslips? cralawred
We have defined misconduct as any forbidden act or dereliction of
duty. It is willful in character and implies a wrongful intent, not a
mere error in judgment. The misconduct, to be serious, must be
grave and not merely trivial.14
In this case, Alipio's act of obtaining copies of her payslips cannot be
characterized as a misconduct, much less a grave misconduct. On
the contrary, we find it absurd that she had to resort to her own
resourcefulness to get hold of these documents since it was
incumbent upon Peninsula, as her employer, to give her copies of her
payslips as a matter of course. We are thus convinced that Alipio's
dismissal was not based on a just cause.
Was Alipio afforded an opportunity to be heard and to defend
herself?cralawred
When Santos had a meeting with Alipio on December 21, 1998, she
was not informed that the hotel was contemplating her dismissal.
Neither was she informed of the ground for which her dismissal was
sought. She was simply told right there and then that she was
already dismissed, thereby affording no opportunity for her to be
heard and defend herself. Thus, Alipio was likewise deprived of
procedural due process.
Clearly, Alipio was illegally dismissed because petitioners failed on
both counts to comply with the twin requisites for a valid
termination. She is thus entitled to reinstatement without loss of
seniority rights and other privileges and to full backwages, inclusive
of allowances, and to other benefits, or their monetary equivalent
computed from the time compensation was withheld up to the time of
actual reinstatement.15 Should reinstatement be no longer feasible,
Alipio is entitled to separation pay equivalent to one month pay for
her every year of service in lieu of reinstatement.16
Furthermore, as a rule, moral damages are recoverable where the
dismissal of the employee was attended with bad faith or was done in
a manner contrary to good customs.17 Exemplary damages may also
be awarded if the dismissal is effected in a wanton, oppressive or
malevolent manner.18
In this case, while the petitioners issued a Certification dated April
22, 1997 and recognized Alipio as a regular employee, they deprived
her of copies of her own payslips. Moreover, her dismissal was
effected in a manner whereby she was deprived of due process. Under
these circumstances, she is also entitled to moral damages in the
amount of P15,000 and exemplary damages in the amount
of P10,000.
Lastly, the award of attorney's fees equivalent to ten percent (10%) of
the total monetary award is consistent with prevailing
jurisprudence19 and thus ought to be affirmed.
WHEREFORE, the petition is DENIED for lack of merit. The assailed
Decision dated August 23, 2004 and Resolution dated March 11,
2005 of the Court of Appeals in CA-G.R. SP No. 67007 are
hereby AFFIRMED as MODIFIED, such that the amount of moral
damages is reduced to only P15,000 and the exemplary damages to
only P10,000.
No pronouncement as to costs.
SO ORDERED.
[G.R. NO. 167714 : March 7, 2007]
ROWELL INDUSTRIAL CORPORATION, Petitioner, v. HON. COURT
OF APPEALS and JOEL TARIPE, Respondents.
DECISION
CHICO-NAZARIO, J.:
This case is a Petition for Review under Rule 45 of the 1997 Revised
Rules of Civil Procedure seeking to set aside the Decision1 and
Resolution2 of the Court of Appeals in CA-G.R. SP No. 74104,
entitled, Rowell Industrial Corp., and/or Edwin Tang v. National
Labor Relations Commission and Joel Taripe, dated 30 September
2004 and 1 April 2005, respectively, which affirmed the
Resolutions3 of the National Labor Relations Commission (NLRC)
dated 7 June 2002 and 20 August 2002, finding herein respondent
Joel Taripe (Taripe) as a regular employee who had been illegally
dismissed from employment by herein petitioner Rowell Industrial
Corp. (RIC), thereby ordering petitioner RIC to reinstate respondent
Taripe with full backwages, subject to the modification of exonerating
Edwin Tang, the RIC General Manager and Vice President, from
liability and computing the backwages of herein respondent Taripe
based on the prevailing salary rate at the time of his dismissal. The
NLRC Resolutions reversed the Decision4 of the Labor Arbiter dated
29 September 2000, which dismissed respondent Taripe's complaint.
Petitioner RIC is a corporation engaged in manufacturing tin cans for
use in packaging of consumer products, e.g., foods, paints, among
other things. Respondent Taripe was employed by petitioner RIC on 8
November 1999 as a "rectangular power press machine operator"
with a salary of P223.50 per day, until he was allegedly dismissed
from his employment by the petitioner on 6 April 2000.
The controversy of the present case arose from the following facts, as
summarized by the NLRC and the Court of Appeals:
On [17 February 2000], [herein respondent Taripe] filed a [C]omplaint
against [herein petitioner RIC] for regularization and payment of
holiday pay, as well as indemnity for severed finger, which was
amended on [7 April 2000] to include illegal dismissal. [Respondent
Taripe] alleges that [petitioner RIC] employed him starting [8
November 1999] as power press machine operator, such position of
which was occupied by [petitioner RIC's] regular employees and the
functions of which were necessary to the latter's business.
[Respondent Taripe] adds that upon employment, he was made to
sign a document, which was not explained to him but which was
made a condition for him to be taken in and for which he was not
furnished a copy. [Respondent Taripe] states that he was not
extended full benefits granted under the law and the [Collective
Bargaining Agreement] and that on [6 April 2000], while the case for
regularization was pending, he was summarily dismissed from his job
although he never violated any of the [petitioner RIC's] company rules
and regulations.
[Petitioner RIC], for [its] part, claim[s] that [respondent Taripe] was a
contractual employee, whose services were required due to the
increase in the demand in packaging requirement of [its] clients for
Christmas season and to build up stock levels during the early part
of the following year; that on [6 March 2000], [respondent Taripe's]
employment contract expired. [Petitioner RIC] avers that the
information update for union members, which was allegedly filled up
by [respondent Taripe] and submitted by the Union to [petitioner]
company, it is stated therein that in the six (6) companies where
[respondent Taripe] purportedly worked, the latter's reason for
leaving was "finished contract," hence, [respondent Taripe] has
knowledge about being employed by contract contrary to his
allegation that the document he was signing was not explained to
him. [Petitioner RIC] manifest[s] that all benefits, including those
under the [Social Security System], were given to him on [12 May
2000].5
On 29 September 2000, the Labor Arbiter rendered a Decision
dismissing respondent Taripe's Complaint based on a finding that he
was a contractual employee whose contract merely expired. The
dispositive portion of the said Decision reads, thus:
WHEREFORE, premises considered, judgment is hereby rendered
declaring this complaint of [herein respondent Taripe] against [herein
petitioner RIC] and Mr. Edwin Tang for illegal dismissal DISMISSED
for lack of merit. However, on ground of compassionate justice,
[petitioner RIC and Mr. Edwin Tang] are hereby ordered to pay
[respondent Taripe] the sum of PHP5,811.00 or one month's salary as
financial assistance and holiday pay in the sum of PHP894.00, as
well as attorney's fees of 10% based on holiday pay (Article 110,
Labor Code).6
Aggrieved, respondent Taripe appealed before the NLRC. In a
Resolution dated 7 June 2002, the NLRC granted the appeal filed by
respondent Taripe and declared that his employment with the
petitioner was regular in status; hence, his dismissal was illegal. The
decretal portion of the said Resolution reads as follows:
WHEREFORE, premises considered, [herein respondent Taripe's]
appeal is GRANTED. The Labor Arbiter's [D]ecision in the above-
entitled case is hereby REVERSED. It is hereby declared that
[respondent Taripe's] employment with [herein petitioner RIC and Mr.
Edwin Tang] is regular in status and that he was illegally dismissed
therefrom.
[Petitioner RIC and Mr. Edwin Tang] are hereby ordered to reinstate
[respondent Taripe] and to jointly and severally pay him full
backwages from the time he was illegally dismissed up to the date of
his actual reinstatement, less the amount of P1,427.67. The award of
P894.00 for holiday pay is AFFIRMED but the award of P5,811.00 for
financial assistance is deleted. The award for attorney's fees is hereby
adjusted to ten percent (10%) of [respondent Taripe's] total monetary
award.7
Dissatisfied, petitioner RIC moved for the reconsideration of the
aforesaid Resolution but it was denied in the Resolution of the NLRC
dated 20 August 2002.
Consequently, petitioner filed a Petition for Certiorari under Rule 65
of the 1997 Revised Rules of Civil Procedure before the Court of
Appeals with the following assignment of errors:
I. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN
EXCESS OF ITS JURISDICTION WHEN IT MISINTERPRETED
ARTICLE 280 OF THE LABOR CODE AND IGNORED
JURISPRUDENCE WHEN IT DECIDED THAT [RESPONDENT TARIPE]
IS A REGULAR EMPLOYEE AND THUS, ILLEGALLY DISMISSED.
II. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN
EXCESS OF ITS JURISDICTION WHEN IT ORDERED [EDWIN TANG]
TO (sic) JOINTLY AND SEVERALLY LIABLE FOR MONETARY CLAIMS
OF [RESPONDEN TARIPE].
III. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN
EXCESS OF ITS JURISDICTION WHEN IT ORDERED PAYMENT OF
MONETARY CLAIMS COMPUTED ON AN ERRONEOUS WAGE
RATE.8
The Court of Appeals rendered the assailed Decision on 30 September
2004, affirming the Resolution of the NLRC dated 7 June 2002, with
modifications. Thus, it disposed -
WHEREFORE, the Resolutions dated [7 June 2002] and [20 August
2002] of [the NLRC] are affirmed, subject to the modification that
[Edwin Tang] is exonerated from liability and the computation of
backwages of [respondent Taripe] shall be based on P223.50, the last
salary he received.9
A Motion for Reconsideration of the aforesaid Decision was filed by
petitioner RIC, but the same was denied for lack of merit in a
Resolution10 of the Court of Appeals dated 1 April 2005.
Hence, this Petition.
Petitioner RIC comes before this Court with the lone issue of whether
the Court of Appeals misinterpreted Article 280 of the Labor Code, as
amended, and ignored jurisprudence when it affirmed that
respondent Taripe was a regular employee and was illegally
dismissed.
Petitioner RIC, in its Memorandum,11 argues that the Court of
Appeals had narrowly interpreted Article 280 of the Labor Code, as
amended, and disregarded a contract voluntarily entered into by the
parties.
Petitioner RIC emphasizes that while an employee's status of
employment is vested by law pursuant to Article 280 of the Labor
Code, as amended, said provision of law admits of two exceptions, to
wit: (1) those employments which have 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 employment;
and (2) when the work or services to be performed are seasonal;
hence, the employment is for the duration of the season. Thus, there
are certain forms of employment which entail the performance of
usual and desirable functions and which exceed one year but do not
necessarily qualify as regular employment under Article 280 of the
Labor Code, as amended.
The Petition is unmeritorious.
A closer examination of Article 280 of the Labor Code, as amended, is
imperative to resolve the issue raised in the present case.
In declaring that respondent Taripe was a regular employee of the
petitioner and, thus, his dismissal was illegal, the Court of Appeals
ratiocinated in this manner:
In determining the employment status of [herein respondent Taripe],
reference must be made to Article 280 of the Labor Code, which
provides:
x x x
Thus, there are 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. [Respondent Taripe] belonged to the first category of
regular employees.
The purported contract of employment providing that [respondent
Taripe] was hired as contractual employee for five (5) months only,
cannot prevail over the undisputed fact that [respondent Taripe] was
hired to perform the function of power press operator, a function
necessary or desirable in [petitioner's] business of manufacturing tin
cans. [Herein petitioner RIC's] contention that the four (4) months
length of service of [respondent Taripe] did not grant him a regular
status is inconsequential, considering that length of service assumes
importance only when the activity in which the employee has been
engaged to perform is not necessary or desirable to the usual
business or trade of the employer.
As aptly ruled by [the NLRC]:
"In the instant case, there is no doubt that [respondent Taripe], as
power press operator, has been engaged to perform activities which
are usually necessary or desirable in [petitioner RIC's] usual business
or trade of manufacturing of tin cans for use in packaging of food,
paint and others. We also find that [respondent Taripe] does not fall
under any of the abovementioned exceptions. Other that (sic)
[petitioner RIC's] bare allegation thereof, [it] failed to present any
evidence to prove that he was employed for a fixed or specific project
or undertaking the completion of which has been determined at the
time of his engagement or that [respondent Taripe's] services are
seasonal in nature and that his employment was for the duration of
the season."12
Article 280 of the Labor Code, as amended, 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, 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 activity exists. [Emphasis supplied]
The aforesaid Article 280 of the Labor Code, as amended, classifies
employees into three categories, namely: (1) regular employees or
those whose work is necessary or desirable to the usual business of
the employer; (2) project employees or those 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; and (3) casual employees or those who are
neither regular nor project employees.13
Regular employees are further classified into: (1) regular employees
by nature of work; and (2) regular employees by years of service.14The
former refers to those employees who perform a particular activity
which is necessary or desirable in the usual business or trade of the
employer, regardless of their length of service; while the latter refers
to those employees who have been performing the job, regardless of
the nature thereof, for at least a year.15
The aforesaid Article 280 of the Labor Code, as amended, however,
does not proscribe or prohibit an employment contract with a fixed
period. It does not necessarily follow that where the duties of the
employee consist of activities usually necessary or desirable in the
usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such activities.
There is nothing essentially contradictory between a definite period of
employment and the nature of the employee's duties.16 What Article
280 of the Labor Code, as amended, seeks to prevent is the practice
of some unscrupulous and covetous employers who wish to
circumvent the law that protects lowly workers from capricious
dismissal from their employment. The aforesaid provision, however,
should not be interpreted in such a way as to deprive employers of
the right and prerogative to choose their own workers if they have
sufficient basis to refuse an employee a regular status. Management
has rights which should also be protected.17
In the case at bar, respondent Taripe signed a contract of
employment prior to his admission into the petitioner's company.
Said contract of employment provides, among other things:
4. That my employment shall be contractual for the period of five (5)
months which means that the end of the said period, I can (sic)
discharged unless this contract is renewed by mutual consent or
terminated for cause.18
Based on the said contract, respondent Taripe's employment with the
petitioner is good only for a period of five months unless the said
contract is renewed by mutual consent. And as claimed by petitioner
RIC, respondent Taripe, along with its other contractual employees,
was hired only to meet the increase in demand for packaging
materials during the Christmas season and also to build up stock
levels during the early part of the year.
Although Article 280 of the Labor Code, as amended, does not forbid
fixed term employment, it must, nevertheless, meet any of the
following guidelines in order that it cannot be said to circumvent
security of tenure: (1) that the fixed period of employment was
knowingly and voluntarily agreed upon 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 (2) 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 on the latter.19
In the present case, it cannot be denied that the employment contract
signed by respondent Taripe did not mention that he was hired only
for a specific undertaking, the completion of which had been
determined at the time of his engagement. The said employment
contract neither mentioned that respondent Taripe's services were
seasonal in nature and that his employment was only for the
duration of the Christmas season as purposely claimed by petitioner
RIC. What was stipulated in the said contract was that respondent
Taripe's employment was contractual for the period of five months.
Likewise, as the NLRC mentioned in its Resolution, to which the
Court of Appeals agreed, other than the bare allegations of petitioner
RIC that respondent Taripe was hired only because of the increase in
the demand for packaging materials during the Christmas season,
petitioner RIC failed to substantiate such claim with any other
evidence. Petitioner RIC did not present any evidence which might
prove that respondent Taripe was employed for a fixed or specific
project or that his services were seasonal in nature.
Also, petitioner RIC failed to controvert the claim of respondent
Taripe that he was made to sign the contract of employment,
prepared by petitioner RIC, as a condition for his hiring. Such
contract in which the terms are prepared by only one party and the
other party merely affixes his signature signifying his adhesion
thereto is called contract of adhesion.20 It is an agreement in which
the parties bargaining are not on equal footing, the weaker party's
participation being reduced to the alternative "to take it or leave
it."21 In the present case, respondent Taripe, in need of a job, was
compelled to agree to the contract, including the five-month period of
employment, just so he could be hired. Hence, it cannot be argued
that respondent Taripe signed the employment contract with a fixed
term of five months willingly and with full knowledge of the impact
thereof.
With regard to the second guideline, this Court agrees with the Court
of Appeals that petitioner RIC and respondent Taripe cannot be said
to have dealt with each other on more or less equal terms with no
moral dominance exercised by the former over the latter. As a power
press operator, a rank and file employee, he can hardly be on equal
terms with petitioner RIC. As the Court of Appeals said, "almost
always, employees agree to any terms of an employment contract just
to get employed considering that it is difficult to find work given their
ordinary qualifications."22
Therefore, for failure of petitioner RIC to comply with the necessary
guidelines for a valid fixed term employment contract, it can be safely
stated that the aforesaid contract signed by respondent Taripe for a
period of five months was a mere subterfuge to deny to the latter a
regular status of employment.
Settled is the rule that the primary standard of determining regular
employment is the reasonable connection between the particular
activity performed by the employee in relation to the casual 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.23
Given the foregoing, this Court agrees in the findings of the Court of
Appeals and the NLRC that, indeed, respondent Taripe, as a
rectangular power press machine operator, in charge of
manufacturing covers for "four liters rectangular tin cans," was
holding a position which is necessary and desirable in the usual
business or trade of petitioner RIC, which was the manufacture of tin
cans. Therefore, respondent Taripe was a regular employee of
petitioner RIC by the nature of work he performed in the company.
Respondent Taripe does not fall under the exceptions mentioned in
Article 280 of the Labor Code, as amended, because it was not proven
by petitioner RIC that he was employed only for a specific project or
undertaking or his employment was merely seasonal. Similarly, the
position and function of power press operator cannot be said to be
merely seasonal. Such position cannot be considered as only needed
for a specific project or undertaking because of the very nature of the
business of petitioner RIC. Indeed, respondent Taripe is a regular
employee of petitioner RIC and as such, he cannot be dismissed from
his employment unless there is just or authorized cause for his
dismissal.
Well-established is the rule that regular employees enjoy security of
tenure and they can only be dismissed for just cause and with due
process, notice and hearing.24 And in case of employees' dismissal,
the burden is on the employer to prove that the dismissal was legal.
Thus, respondent Taripe's summary dismissal, not being based on
any of the just or authorized causes enumerated under Articles
282,25 283,26 and 28427 of the Labor Code, as amended, is illegal.
Before concluding, we once more underscore the settled precept that
factual findings of the NLRC, having deemed to acquire expertise in
matters within its jurisdiction, are generally accorded not only
respect but finality especially when such factual findings are affirmed
by the Court of Appeals;28 hence, such factual findings are binding on
this Court.
WHEREFORE, premises considered, the instant Petition is hereby
DENIED. The Decision and Resolution of the Court of Appeals dated
30 September 2004 and 1 April 2005, respectively, which affirmed G.R. No. 164156 September 26, 2006
with modification the Resolutions of the NLRC dated 7 June 2002
and 20 August 2002, respectively, finding herein respondent Taripe ABS-CBN BROADCASTING CORPORATION, petitioner,
as a regular employee who had been illegally dismissed from vs.
employment by petitioner RIC, are hereby AFFIRMED. Costs against MARLYN NAZARENO, MERLOU GERZON, JENNIFER
petitioner RIC.
DEIPARINE, and JOSEPHINE LERASAN, respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision1 of

the Court of Appeals (CA) in CA-G.R. SP No. 76582 and the
Resolution denying the motion for reconsideration thereof. The CA
affirmed the Decision2 and Resolution3 of the National Labor
Relations Commission (NLRC) in NLRC Case No. V-000762-2001
(RAB Case No. VII-10-1661-2001) which likewise affirmed, with
modification, the decision of the Labor Arbiter declaring the
respondents Marlyn Nazareno, Merlou Gerzon, Jennifer Deiparine
and Josephine Lerasan as regular employees.

The Antecedents

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is

engaged in the broadcasting business and owns a network of
television and radio stations, whose operations revolve around the
broadcast, transmission, and relay of telecommunication signals.
It sells and deals in or otherwise utilizes the airtime it generates
from its radio and television operations. It has a franchise as a
broadcasting company, and was likewise issued a license and
authority to operate by the National Telecommunications
Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine,

and Lerasan as production assistants (PAs) on different dates.
They were assigned at the news and public affairs, for various
radio programs in the Cebu Broadcasting Station, with a monthly
compensation of P4,000. They were issued ABS-CBN employees’
identification cards and were required to work for a minimum of
eight hours a day, including Sundays and holidays. They were
made to perform the following tasks and duties:
a) Prepare, arrange airing of commercial broadcasting based on
the daily operations log and digicart of respondent ABS-CBN;
b) Coordinate, arrange personalities for air interviews;
c) Coordinate, prepare schedule of reporters for scheduled news
reporting and lead-in or incoming reports;
d) Facilitate, prepare and arrange airtime schedule for public
service announcement and complaints;
e) Assist, anchor program interview, etc; and
f) Record, log clerical reports, man based control radio.4
Their respective working hours were as follows:
Name Time No. of Hours
1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7 ½
8:00 A.M.-12:00 noon
2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7 ½
3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs.
9:00 A.M.-6:00 P.M. (WF) 9 hrs.
4. Merlou Gerzon 9:00 A.M.-6:00 P.M. 9 hrs.5
The PAs were under the control and supervision of Assistant
Station Manager Dante J. Luzon, and News Manager Leo
Lastimosa.
On December 19, 1996, petitioner and the ABS-CBN Rank-and-
File Employees executed a Collective Bargaining Agreement (CBA)
to be effective during the period from December 11, 1996 to
December 11, 1999. However, since petitioner refused to recognize
PAs as part of the bargaining unit, respondents were not included
to the CBA.6
On July 20, 2000, petitioner, through Dante Luzon, issued a
Memorandum informing the PAs that effective August 1, 2000,
they would be assigned to non-drama programs, and that the
DYAB studio operations would be handled by the studio
technician. Thus, their revised schedule and other assignments
would be as follows:
Monday – Saturday
4:30 A.M. – 8:00 A.M. – Marlene Nazareno.
Miss Nazareno will then be assigned at the Research Dept.
From 8:00 A.M. to 12:00
4:30 P.M. – 12:00 MN – Jennifer Deiparine
Sunday
5:00 A.M. – 1:00 P.M. – Jennifer Deiparine
1:00 P.M. – 10:00 P.M. – Joy Sanchez
Respondent Gerzon was assigned as the full-time PA of the TV
News Department reporting directly to Leo Lastimosa.
On October 12, 2000, respondents filed a Complaint for
Recognition of Regular Employment Status, Underpayment of
Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay,
Sick Leave Pay, and 13th Month Pay with Damages against the
petitioner before the NLRC. The Labor Arbiter directed the parties
to submit their respective position papers. Upon respondents’
failure to file their position papers within the reglementary period,
Labor Arbiter Jose G. Gutierrez issued an Order dated April 30,
2001, dismissing the complaint without prejudice for lack of
interest to pursue the case. Respondents received a copy of the
Order on May 16, 2001.7 Instead of re-filing their complaint with
the NLRC within 10 days from May 16, 2001, they filed, on June
11, 2001, an Earnest Motion to Refile Complaint with Motion to
Admit Position Paper and Motion to Submit Case For
Resolution.8 The Labor Arbiter granted this motion in an Order
dated June 18, 2001, and forthwith admitted the position paper of Length of service: 5 years & 10 months
the complainants. Respondents made the following allegations:
III. Marlene Nazareno
1. Complainants were engaged by respondent ABS-CBN as regular
and full-time employees for a continuous period of more than five Exhibit "E" - ABS-CBN Employee’s Identification Card
(5) years with a monthly salary rate of Four Thousand (P4,000.00)
pesos beginning 1995 up until the filing of this complaint on Exhibit "E" - ABS-CBN Salary Voucher from Nov.
November 20, 2000.
Exhibit "E-1" & 1999 to December 2000
Machine copies of complainants’ ABS-CBN Employee’s
Identification Card and salary vouchers are hereto attached as Exhibit :E-2"
follows, thus:
Date employed: April 17, 1996
I. Jennifer Deiparine:
Length of service: 5 years and one (1) month
Exhibit "A" - ABS-CBN Employee’s Identification Card
IV. Joy Sanchez Lerasan
Exhibit "B", - ABS-CBN Salary Voucher from Nov.
Exhibit "F" - ABS-CBN Employee’s Identification Card
Exhibit "B-1" & 1999 to July 2000 at P4,000.00
Exhibit "F-1" - ABS-CBN Salary Voucher from Aug.
Exhibit "B-2"
Exhibit "F-2" & 2000 to Jan. 2001
Date employed: September 15, 1995
Exhibit "F-3"
Length of service: 5 years & nine (9) months
Exhibit "F-4" - Certification dated July 6, 2000
II. Merlou Gerzon - ABS-CBN Employee’s Identification Card
Acknowledging regular status of
Exhibit "C"
Complainant Joy Sanchez Lerasan
Exhibit "D"
Signed by ABS-CBN Administrative
Exhibit "D-1" &
Officer May Kima Hife
Exhibit "D-2" - ABS-CBN Salary Voucher from March
Date employed: April 15, 1998
1999 to January 2001 at P4,000.00
Length of service: 3 yrs. and one (1) month9
Date employed: September 1, 1995
Respondents insisted that they belonged to a "work pool" from
which petitioner chose persons to be given specific assignments at
its discretion, and were thus under its direct supervision and
control regardless of nomenclature. They prayed that judgment be
rendered in their favor, thus:
WHEREFORE, premises considered, this Honorable Arbiter is
most respectfully prayed, to issue an order compelling defendants
to pay complainants the following:
1. One Hundred Thousand Pesos (P100,000.00) each
and by way of moral damages;
2. Minimum wage differential;
3. Thirteenth month pay differential;
4. Unpaid service incentive leave benefits;
5. Sick leave;
6. Holiday pay;
7. Premium pay;
8. Overtime pay;
9. Night shift differential.
Complainants further pray of this Arbiter to declare them regular
and permanent employees of respondent ABS-CBN as a condition
precedent for their admission into the existing union and
collective bargaining unit of respondent company where they may
as such acquire or otherwise perform their obligations thereto or
enjoy the benefits due therefrom.
Complainants pray for such other reliefs as are just and equitable
under the premises.10
For its part, petitioner alleged in its position paper that the
respondents were PAs who basically assist in the conduct of a
particular program ran by an anchor or talent. Among their duties
include monitoring and receiving incoming calls from listeners
and field reporters and calls of news sources; generally, they
perform leg work for the anchors during a program or a particular
production. They are considered in the industry as "program
employees" in that, as distinguished from regular or station
employees, they are basically engaged by the station for a
particular or specific program broadcasted by the radio station.
Petitioner asserted that as PAs, the complainants were issued
talent information sheets which are updated from time to time,
and are thus made the basis to determine the programs to which
they shall later be called on to assist. The program assignments of
complainants were as follows:
a. Complainant Nazareno assists in the programs:
1) Nagbagang Balita (early morning edition)
2) Infor Hayupan
3) Arangkada (morning edition)
4) Nagbagang Balita (mid-day edition)
b. Complainant Deiparine assists in the programs:
1) Unzanith
2) Serbisyo de Arevalo
3) Arangkada (evening edition)
4) Balitang K (local version)
5) Abante Subu
6) Pangutana Lang
c. Complainant Gerzon assists in the program:
1) On Mondays and Tuesdays:
(a) Unzanith
(b) Serbisyo de Arevalo
(c) Arangkada (evening edition)
(d) Balitang K (local version)
(e) Abante Sugbu
Petitioner maintained that PAs, reporters, anchors and talents
occasionally "sideline" for other programs they produce, such as
drama talents in other productions. As program employees, a PA’s
engagement is coterminous with the completion of the program,
and may be extended/renewed provided that the program is on-
going; a PA may also be assigned to new programs upon the
cancellation of one program and the commencement of another.
As such program employees, their compensation is computed on a
program basis, a fixed amount for performance services
irrespective of the time consumed. At any rate, petitioner claimed,
as the payroll will show, respondents were paid all salaries and
benefits due them under the law.12

(f) Pangutana Lang Petitioner also alleged that the Labor Arbiter had no jurisdiction to
involve the CBA and interpret the same, especially since
2) On Thursdays respondents were not covered by the bargaining unit.

Nagbagang Balita On July 30, 2001, the Labor Arbiter rendered judgment in favor of
the respondents, and declared that they were regular employees of
3) On Saturdays petitioner; as such, they were awarded monetary benefits. The
fallo of the decision reads:
(a) Nagbagang Balita
WHEREFORE, the foregoing premises considered, judgment is
(b) Info Hayupan hereby rendered declaring the complainants regular employees of
the respondent ABS-CBN Broadcasting Corporation and directing
(c) Arangkada (morning edition) the same respondent to pay complainants as follows:

(d) Nagbagang Balita (mid-day edition) I - Merlou A. Gerzon P12,025.00

4) On Sundays: II - Marlyn Nazareno 12,025.00

(a) Siesta Serenata III - Jennifer Deiparine 12,025.00

(b) Sunday Chismisan IV - Josephine Sanchez Lerazan 12,025.00

(c) Timbangan sa Hustisya _________

(d) Sayri ang Lungsod P48,100.00

(e) Haranahan11 plus ten (10%) percent Attorney’s Fees or a TOTAL aggregate
amount of PESOS: FIFTY TWO THOUSAND NINE HUNDRED TEN
(P52,910.00).
Respondent Veneranda C. Sy is absolved from any liability.
SO ORDERED.13
However, the Labor Arbiter did not award money benefits as
provided in the CBA on his belief that he had no jurisdiction to
interpret and apply the agreement, as the same was within the
jurisdiction of the Voluntary Arbitrator as provided in Article 261
of the Labor Code.
Respondents’ counsel received a copy of the decision on August
29, 2001. Respondent Nazareno received her copy on August 27,
2001, while the other respondents received theirs on September 8,
2001. Respondents signed and filed their Appeal Memorandum on
September 18, 2001.
For its part, petitioner filed a motion for reconsideration, which
the Labor Arbiter denied and considered as an appeal,
conformably with Section 5, Rule V, of the NLRC Rules of
Procedure. Petitioner forthwith appealed the decision to the NLRC,
while respondents filed a partial appeal.
In its appeal, petitioner alleged the following:
1. That the Labor Arbiter erred in reviving or re-opening this case
which had long been dismissed without prejudice for more than
thirty (30) calendar days;
2. That the Labor Arbiter erred in depriving the respondent of its
Constitutional right to due process of law;
3. That the Labor Arbiter erred in denying respondent’s Motion for
Reconsideration on an interlocutory order on the ground that the
same is a prohibited pleading;
4. That the Labor Arbiter erred when he ruled that the
complainants are regular employees of the respondent;
5. That the Labor Arbiter erred when he ruled that the
complainants are entitled to 13th month pay, service incentive
leave pay and salary differential; and
6. That the Labor Arbiter erred when he ruled that complainants
are entitled to attorney’s fees.14
On November 14, 2002, the NLRC rendered judgment modifying
the decision of the Labor Arbiter. The fallo of the decision reads:
WHEREFORE, premises considered, the decision of Labor Arbiter
Jose G. Gutierrez dated 30 July 2001 is SET ASIDE and
VACATED and a new one is entered ORDERING respondent ABS-
CBN Broadcasting Corporation, as follows:
1. To pay complainants of their wage differentials and other
benefits arising from the CBA as of 30 September 2002 in the
aggregate amount of Two Million Five Hundred, Sixty-One
Thousand Nine Hundred Forty-Eight Pesos and 22/100
(P2,561,948.22), broken down as follows:
a. Deiparine, Jennifer - P 716,113.49
b. Gerzon, Merlou - 716,113.49
c. Nazareno, Marlyn - 716,113.49
d. Lerazan, Josephine Sanchez - 413,607.75
Total - P 2,561,948.22
2. To deliver to the complainants Two Hundred Thirty-Three (233)
sacks of rice as of 30 September 2002 representing their rice
subsidy in the CBA, broken down as follows:
a. Deiparine, Jennifer - 60 Sacks
b. Gerzon, Merlou - 60 Sacks
c. Nazareno, Marlyn - 60 Sacks
d. Lerazan, Josephine Sanchez - 53 Sacks
Total 233 Sacks; and
3. To grant to the complainants all the benefits of the CBA after
30 September 2002.
SO ORDERED.15
The NLRC declared that the Labor Arbiter acted conformably with
the Labor Code when it granted respondents’ motion to refile the
complaint and admit their position paper. Although respondents
were not parties to the CBA between petitioner and the ABS-CBN
Rank-and-File Employees Union, the NLRC nevertheless granted
and computed respondents’ monetary benefits based on the 1999
CBA, which was effective until September 2002. The NLRC also
ruled that the Labor Arbiter had jurisdiction over the complaint of
respondents because they acted in their individual capacities and
not as members of the union. Their claim for monetary benefits
was within the context of Article 217(6) of the Labor Code. The
validity of respondents’ claim does not depend upon the
interpretation of the CBA.
The NLRC ruled that respondents were entitled to the benefits
under the CBA because they were regular employees who
contributed to the profits of petitioner through their labor. The
NLRC cited the ruling of this Court in New Pacific Timber &
Supply Company v. National Labor Relations Commission.16
Petitioner filed a motion for reconsideration, which the NLRC
denied.
Petitioner thus filed a petition for certiorari under Rule 65 of the
Rules of Court before the CA, raising both procedural and
substantive issues, as follows: (a) whether the NLRC acted without
jurisdiction in admitting the appeal of respondents; (b) whether
the NLRC committed palpable error in scrutinizing the reopening
and revival of the complaint of respondents with the Labor Arbiter
upon due notice despite the lapse of 10 days from their receipt of
the July 30, 2001 Order of the Labor Arbiter; (c) whether
respondents were regular employees; (d) whether the NLRC acted
without jurisdiction in entertaining and resolving the claim of the
respondents under the CBA instead of referring the same to the
Voluntary Arbitrators as provided in the CBA; and (e) whether the
NLRC acted with grave abuse of discretion when it awarded
monetary benefits to respondents under the CBA although they
are not members of the appropriate bargaining unit.
On February 10, 2004, the CA rendered judgment dismissing the
petition. It held that the perfection of an appeal shall be upon the
expiration of the last day to appeal by all parties, should there be
several parties to a case. Since respondents received their copies
of the decision on September 8, 2001 (except respondent
Nazareno who received her copy of the decision on August 27,
2001), they had until September 18, 2001 within which to file
their Appeal Memorandum. Moreover, the CA declared that
respondents’ failure to submit their position paper on time is not
a ground to strike out the paper from the records, much less
dismiss a complaint.
Anent the substantive issues, the appellate court stated that
respondents are not mere project employees, but regular
employees who perform tasks necessary and desirable in the
usual trade and business of petitioner and not just its project
employees. Moreover, the CA added, the award of benefits
accorded to rank-and-file employees under the 1996-1999 CBA is
a necessary consequence of the NLRC ruling that respondents, as
PAs, are regular employees.
Finding no merit in petitioner’s motion for reconsideration, the CA
denied the same in a Resolution17 dated June 16, 2004.
Petitioner thus filed the instant petition for review on certiorari
and raises the following assignments of error:
1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT
JURISDICTION AND GRAVELY ERRED IN UPHOLDING THE
NATIONAL LABOR RELATIONS COMMISSION
NOTWITHSTANDING THE PATENT NULLITY OF THE LATTER’S
DECISION AND RESOLUTION.
2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE RULING OF THE NLRC FINDING
RESPONDENTS REGULAR EMPLOYEES.
3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE RULING OF THE NLRC AWARDING CBA
BENEFITS TO RESPONDENTS.18
Considering that the assignments of error are interrelated, the
Court shall resolve them simultaneously.
Petitioner asserts that the appellate court committed palpable and
serious error of law when it affirmed the rulings of the NLRC, and
entertained respondents’ appeal from the decision of the Labor
Arbiter despite the admitted lapse of the reglementary period
within which to perfect the same. Petitioner likewise maintains
that the 10-day period to appeal must be reckoned from receipt of
a party’s counsel, not from the time the party learns of the
decision, that is, notice to counsel is notice to party and not the
other way around. Finally, petitioner argues that the reopening of
a complaint which the Labor Arbiter has dismissed without
prejudice is a clear violation of Section 1, Rule V of the NLRC
Rules; such order of dismissal had already attained finality and
can no longer be set aside.
Respondents, on the other hand, allege that their late appeal is a
non-issue because it was petitioner’s own timely appeal that
empowered the NLRC to reopen the case. They assert that
although the appeal was filed 10 days late, it may still be given
due course in the interest of substantial justice as an exception to
the general rule that the negligence of a counsel binds the client.
On the issue of the late filing of their position paper, they
maintain that this is not a ground to strike it out from the records
or dismiss the complaint.
We find no merit in the petition.
We agree with petitioner’s contention that the perfection of an
appeal within the statutory or reglementary period is not only
mandatory, but also jurisdictional; failure to do so renders the
assailed decision final and executory and deprives the appellate
court or body of the legal authority to alter the final judgment,
much less entertain the appeal. However, this Court has time and
again ruled that in exceptional cases, a belated appeal may be
given due course if greater injustice may occur if an appeal is not
given due course than if the reglementary period to appeal were
strictly followed.19 The Court resorted to this extraordinary
measure even at the expense of sacrificing order and efficiency if
only to serve the greater principles of substantial justice and
equity.20
In the case at bar, the NLRC did not commit a grave abuse of its
discretion in giving Article 22321 of the Labor Code a liberal
application to prevent the miscarriage of justice. Technicality
should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties.22 We
have held in a catena of cases that technical rules are not binding
in labor cases and are not to be applied strictly if the result would
be detrimental to the workingman.23
Admittedly, respondents failed to perfect their appeal from the
decision of the Labor Arbiter within the reglementary period
therefor. However, petitioner perfected its appeal within the
period, and since petitioner had filed a timely appeal, the NLRC
acquired jurisdiction over the case to give due course to its appeal
and render the decision of November 14, 2002. Case law is that
the party who failed to appeal from the decision of the Labor
Arbiter to the NLRC can still participate in a separate appeal
timely filed by the adverse party as the situation is considered to
be of greater benefit to both parties.24
We find no merit in petitioner’s contention that the Labor Arbiter
abused his discretion when he admitted respondents’ position
paper which had been belatedly filed. It bears stressing that the
Labor Arbiter is mandated by law to use every reasonable means
to ascertain the facts in each case speedily and objectively,
without technicalities of law or procedure, all in the interest of
due process.25 Indeed, as stressed by the appellate court,
respondents’ failure to submit a position paper on time is not a
ground for striking out the paper from the records, much less for
dismissing a complaint.26 Likewise, there is simply no truth to
petitioner’s assertion that it was denied due process when the
Labor Arbiter admitted respondents’ position paper without
requiring it to file a comment before admitting said position paper.
The essence of due process in administrative proceedings is
simply an opportunity to explain one’s side or an opportunity to
seek reconsideration of the action or ruling complained of.
Obviously, there is nothing in the records that would suggest that
petitioner had absolute lack of opportunity to be
heard.27 Petitioner had the right to file a motion for
reconsideration of the Labor Arbiter’s admission of respondents’
position paper, and even file a Reply thereto. In fact, petitioner
filed its position paper on April 2, 2001. It must be stressed that
Article 280 of the Labor Code was encoded in our statute books to
hinder the circumvention by unscrupulous employers of the
employees’ right to security of tenure by indiscriminately and
absolutely ruling out all written and oral agreements
inharmonious with the concept of regular employment defined
therein.28
We quote with approval the following pronouncement of the NLRC:
The complainants, on the other hand, contend that respondents
assailed the Labor Arbiter’s order dated 18 June 2001 as violative
of the NLRC Rules of Procedure and as such is violative of their
right to procedural due process. That while suggesting that an
Order be instead issued by the Labor Arbiter for complainants to
refile this case, respondents impliedly submit that there is not any
substantial damage or prejudice upon the refiling, even so,
respondents’ suggestion acknowledges complainants right to
prosecute this case, albeit with the burden of repeating the same
procedure, thus, entailing additional time, efforts, litigation cost
and precious time for the Arbiter to repeat the same process twice.
Respondent’s suggestion, betrays its notion of prolonging, rather
than promoting the early resolution of the case.
Although the Labor Arbiter in his Order dated 18 June 2001
which revived and re-opened the dismissed case without prejudice
beyond the ten (10) day reglementary period had inadvertently
failed to follow Section 16, Rule V, Rules Procedure of the NLRC
which states:
"A party may file a motion to revive or re-open a case dismissed
without prejudice within ten (10) calendar days from receipt of
notice of the order dismissing the same; otherwise, his only
remedy shall be to re-file the case in the arbitration branch of
origin."
the same is not a serious flaw that had prejudiced the
respondents’ right to due process. The case can still be refiled
because it has not yet prescribed. Anyway, Article 221 of the
Labor Code provides:
"In any proceedings before the Commission or any of the Labor
Arbiters, the rules of evidence prevailing in courts of law or equity
shall not be controlling and it is the spirit and intention of this
Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due
process."
The admission by the Labor Arbiter of the complainants’ Position
Paper and Supplemental Manifestation which were belatedly filed
just only shows that he acted within his discretion as he is
enjoined by law to use every reasonable means to ascertain the
facts in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due
process. Indeed, the failure to submit a position paper on time is
not a ground for striking out the paper from the records, much
less for dismissing a complaint in the case of the complainant.
(University of Immaculate Conception vs. UIC Teaching and Non-
Teaching Personnel Employees, G.R. No. 144702, July 31, 2001).
"In admitting the respondents’ position paper albeit late, the Labor
Arbiter acted within her discretion. In fact, she is enjoined by law
to use every reasonable means to ascertain the facts in each case
speedily and objectively, without technicalities of law or
procedure, all in the interest of due process". (Panlilio vs. NLRC,
281 SCRA 53).
The respondents were given by the Labor Arbiter the opportunity
to submit position paper. In fact, the respondents had filed their
position paper on 2 April 2001. What is material in the
compliance of due process is the fact that the parties are given the
opportunities to submit position papers.
"Due process requirements are satisfied where the parties are
given the opportunities to submit position papers". (Laurence vs.
NLRC, 205 SCRA 737).
Thus, the respondent was not deprived of its Constitutional right
to due process of law.29
We reject, as barren of factual basis, petitioner’s contention that
respondents are considered as its talents, hence, not regular
employees of the broadcasting company. Petitioner’s claim that
the functions performed by the respondents are not at all
necessary, desirable, or even vital to its trade or business is belied
by the evidence on record.
Case law is that this Court has always accorded respect and
finality to the findings of fact of the CA, particularly if they
coincide with those of the Labor Arbiter and the National Labor
Relations Commission, when supported by substantial
evidence.30 The question of whether respondents are regular or
project employees or independent contractors is essentially factual
in nature; nonetheless, the Court is constrained to resolve it due
to its tremendous effects to the legions of production assistants
working in the Philippine broadcasting industry.
We agree with respondents’ contention that where a person has
rendered at least one year of service, regardless of the nature of
the activity performed, or where the work is continuous or
intermittent, the employment is considered regular as long as the
activity exists, the reason being that a customary appointment is
not indispensable before one may be formally declared as having
attained regular status. Article 280 of the Labor Code 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 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.
In Universal Robina Corporation v. Catapang,31 the Court
reiterated the test in determining whether one is a regular
employee:
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 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 a 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.32
As elaborated by this Court in Magsalin v. National Organization
of Working Men:33
Even while the language of law might have been more definitive,
the clarity of its spirit and intent, i.e., to ensure a "regular"
worker’s security of tenure, however, can hardly be doubted. In
determining whether an employment should be considered regular
or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in
relation to the usual business or trade of the employer. The
standard, supplied by the law itself, is whether the work
undertaken is necessary or desirable in the usual business or
trade of the employer, a fact that can be assessed by looking into
the nature of the services rendered and its relation to the general
scheme under which the business or trade is pursued in the
usual course. It is distinguished from a specific undertaking that
is divorced from the normal activities required in carrying on the
particular business or trade. But, although the work to be
performed is only for a specific project or seasonal, where a
person thus engaged has been performing the job for at least one
year, even if the performance is not continuous or is merely
intermittent, the law deems the repeated and continuing need for
its performance as being sufficient to indicate the necessity or
desirability of that activity to the business or trade of the
employer. The employment of such person is also then deemed to
be regular with respect to such activity and while such activity
exists.34
Not considered regular employees are "project employees," the
completion or termination of which is more or less determinable at
the time of employment, such as those employed in connection
with a particular construction project, and "seasonal employees"
whose employment by its nature is only desirable for a limited
period of time. Even then, any employee who has rendered at least
one year of service, whether continuous or intermittent, is deemed
regular with respect to the activity performed and while such
activity actually exists.
It is of no moment that petitioner hired respondents as "talents."
The fact that respondents received pre-agreed "talent fees" instead
of salaries, that they did not observe the required office hours,
and that they were permitted to join other productions during
their free time are not conclusive of the nature of their
employment. Respondents cannot be considered "talents" because
they are not actors or actresses or radio specialists or mere clerks
or utility employees. They are regular employees who perform
several different duties under the control and direction of ABS-
CBN executives and supervisors.
Thus, there are two kinds of regular employees under the law: (1)
those engaged to perform activities which are necessary or
desirable in the usual business or trade of the employer; and (2)
those casual employees who have rendered at least one year of
service, whether continuous or broken, with respect to the
activities in which they are employed.35
The law overrides such conditions which are prejudicial to the
interest of the worker whose weak bargaining situation
necessitates the succor of the State. What determines whether a
certain employment is regular or otherwise is not the will or word
of the employer, to which the worker oftentimes acquiesces, much
less the procedure of hiring the employee or the manner of paying
the salary or the actual time spent at work. It is the character of
the activities performed in relation to the particular trade or
business taking into account all the circumstances, and in some
cases the length of time of its performance and its continued
existence.36 It is obvious that one year after they were employed by
petitioner, respondents became regular employees by operation of
law.37
Additionally, respondents cannot be considered as project or
program employees because no evidence was presented to show
that the duration and scope of the project were determined or
specified at the time of their engagement. Under existing
jurisprudence, project could refer to two distinguishable types of
activities. First, a project may refer to a particular job or
undertaking that is within the regular or usual business of the
employer, but which is distinct and separate, and identifiable as
such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable
times. Second, the term project may also refer to a particular job
or undertaking that is not within the regular business of the
employer. Such a job or undertaking must also be identifiably
separate and distinct from the ordinary or regular business
operations of the employer. The job or undertaking also begins
and ends at determined or determinable times.38
The principal test 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.39
In this case, it is undisputed that respondents had continuously
performed the same activities for an average of five years. Their
assigned tasks are necessary or desirable in the usual business or
trade of the petitioner. The persisting need for their services is
sufficient evidence of the necessity and indispensability of such
services to petitioner’s business or trade.40 While length of time
may not be a sole controlling test for project employment, it can
be a strong factor to determine whether the employee was hired
for a specific undertaking or in fact tasked to perform functions
which are vital, necessary and indispensable to the usual trade or
business of the employer.41 We note further that petitioner did not
report the termination of respondents’ employment in the
particular "project" to the Department of Labor and Employment
Regional Office having jurisdiction over the workplace within 30
days following the date of their separation from work, using the
prescribed form on employees’ termination/
dismissals/suspensions.42
As gleaned from the records of this case, petitioner itself is not
certain how to categorize respondents. In its earlier pleadings,
petitioner classified respondents as program employees, and in
later pleadings, independent contractors. Program employees, or
project employees, are different from independent contractors
because in the case of the latter, no employer-employee
relationship exists.
Petitioner’s reliance on the ruling of this Court in Sonza v. ABS-
CBN Broadcasting Corporation43 is misplaced. In that case, the
Court explained why Jose Sonza, a well-known television and
radio personality, was an independent contractor and not a
regular employee:
A. Selection and Engagement of Employee
ABS-CBN engaged SONZA’S services to co-host its television and
radio programs because of SONZA’S peculiar skills, talent and
celebrity status. SONZA contends that the "discretion used by
respondent in specifically selecting and hiring complainant over
other broadcasters of possibly similar experience and qualification
as complainant belies respondent’s claim of independent
contractorship."
Independent contractors often present themselves to possess
unique skills, expertise or talent to distinguish them from
ordinary employees. The specific selection and hiring of SONZA,
because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative,
but not conclusive, of an independent contractual relationship. If
SONZA did not possess such unique skills, talent and celebrity
status, ABS-CBN would not have entered into the Agreement with
SONZA but would have hired him through its personnel
department just like any other employee.
In any event, the method of selecting and engaging SONZA does
not conclusively determine his status. We must consider all the
circumstances of the relationship, with the control test being the
most important element.
B. Payment of Wages
ABS-CBN directly paid SONZA his monthly talent fees with no
part of his fees going to MJMDC. SONZA asserts that this mode of
fee payment shows that he was an employee of ABS-CBN. SONZA
also points out that ABS-CBN granted him benefits and privileges
"which he would not have enjoyed if he were truly the subject of a
valid job contract."
All the talent fees and benefits paid to SONZA were the result of
negotiations that led to the Agreement. If SONZA were ABS-CBN’s
employee, there would be no need for the parties to stipulate on
benefits such as "SSS, Medicare, x x x and 13th month pay which
the law automatically incorporates into every employer-employee
contract. Whatever benefits SONZA enjoyed arose from contract
and not because of an employer-employee relationship.
SONZA’s talent fees, amounting to P317,000 monthly in the
second and third year, are so huge and out of the ordinary that
they indicate more an independent contractual relationship rather
than an employer-employee relationship. ABS-CBN agreed to pay
SONZA such huge talent fees precisely because of SONZA’S
unique skills, talent and celebrity status not possessed by
ordinary employees. Obviously, SONZA acting alone possessed
enough bargaining power to demand and receive such huge talent
fees for his services. The power to bargain talent fees way above
the salary scales of ordinary employees is a circumstance
indicative, but not conclusive, of an independent contractual
relationship.
The payment of talent fees directly to SONZA and not to MJMDC
does not negate the status of SONZA as an independent
contractor. The parties expressly agreed on such mode of
payment. Under the Agreement, MJMDC is the AGENT of SONZA,
to whom MJMDC would have to turn over any talent fee accruing
under the Agreement.44
In the case at bar, however, the employer-employee relationship
between petitioner and respondents has been proven.
First. In the selection and engagement of respondents, no peculiar
or unique skill, talent or celebrity status was required from them
because they were merely hired through petitioner’s personnel
department just like any ordinary employee.
Second. The so-called "talent fees" of respondents correspond to
wages given as a result of an employer-employee relationship.
Respondents did not have the power to bargain for huge talent
fees, a circumstance negating independent contractual
relationship.
Third. Petitioner could always discharge respondents should it
find their work unsatisfactory, and respondents are highly
dependent on the petitioner for continued work.
Fourth. The degree of control and supervision exercised by
petitioner over respondents through its supervisors negates the
allegation that respondents are independent contractors.
The presumption is that when the work done is an integral part of
the regular business of the employer and when the worker,
relative to the employer, does not furnish an independent
business or professional service, such work is a regular
employment of such employee and not an independent
contractor.45 The Court will peruse beyond any such agreement to
examine the facts that typify the parties’ actual relationship.46
It follows then that respondents are entitled to the benefits
provided for in the existing CBA between petitioner and its rank-
and-file employees. As regular employees, respondents are entitled
to the benefits granted to all other regular employees of petitioner
under the CBA.47 We quote with approval the ruling of the
appellate court, that the reason why production assistants were
excluded from the CBA is precisely because they were erroneously
classified and treated as project employees by petitioner:
x x x The award in favor of private respondents of the benefits
accorded to rank-and-file employees of ABS-CBN under the 1996-
1999 CBA is a necessary consequence of public respondent’s
ruling that private respondents as production assistants of
petitioner are regular employees. The monetary award is not
considered as claims involving the interpretation or
implementation of the collective bargaining agreement. The reason
why production assistants were excluded from the said agreement
is precisely because they were classified and treated as project
employees by petitioner.
As earlier stated, it is not the will or word of the employer which
determines the nature of employment of an employee but the
nature of the activities performed by such employee in relation to
the particular business or trade of the employer. Considering that
We have clearly found that private respondents are regular
employees of petitioner, their exclusion from the said CBA on the
misplaced belief of the parties to the said agreement that they are
project employees, is therefore not proper. Finding said private
respondents as regular employees and not as mere project
employees, they must be accorded the benefits due under the said
Collective Bargaining Agreement.
A collective bargaining agreement is a contract entered into by the
union representing the employees and the employer. However,
even the non-member employees are entitled to the benefits of the
contract. To accord its benefits only to members of the union
without any valid reason would constitute undue discrimination
against non-members. A collective bargaining agreement is
binding on all employees of the company. Therefore, whatever
benefits are given to the other employees of ABS-CBN must
likewise be accorded to private respondents who were regular
employees of petitioner.48
Besides, only talent-artists were excluded from the CBA and not
production assistants who are regular employees of the
respondents. Moreover, under Article 1702 of the New Civil Code:
"In case of doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living of the
laborer."
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for
lack of merit. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 76582 are AFFIRMED. Costs against
petitioner.
SO ORDERED.
Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez,
Chico-Nazario, J.J., concur.

G.R. No. 156668 November 23, 2007
KIMBERLY-CLARK (PHILS.), INC., Petitioner,
vs.
SECRETARY OF LABOR, AMBROCIO GRAVADOR, ENRICO
PILI, PAQUITO GILBUENA, ROBERTO DEL MUNDO, ALMARIO
ROMINQUIT, ANTONIO BALANO, RIZALDY GAPUZ, RUFINO
FELICIANO, RESTITUTO DEAROZ, FERMIN BERNIL, DANIEL
ISIDRO, LEOPOLDO SUNGA, ANTONIO SONGRONES, EDMUND
MAPANOO, SALVADOR SAN MIGUEL, SANTOS CANTOS, JR.,
EMILIO DAGARAG, NOEL MULDONG, FELIXBERTO DELA
CRUZ, ALBERTO MANAHAN, LUNA ESPIRITU, DONATO
BAQUILOD, FLORENCIO CORREA, CAMILO LEONARDO,
GENER MANGIBUNOG, REYNALDO MIRANDA, ARNEL
ZULUETA, PEDRO ODEVILLAS, CONRADO DICHOSO, NELSON
ALAMO, ROMEO LIGUAN, RAYCHARD CARNAJE, FELINO
GUANEZ, ANTONIO MARTIN, WALLYFREDO ALZONA, VICTOR
ABANDO, ALFREDO AUSTRIA, NESTOR SEPRADO, RICHARD
GILBUENA, EDWIN SILAYCO, JOSEPH MARCOS, NOEL
OMALIN, DANILO DORADO, LUISITO DE JESUS, EFREN
SUMAGUE, CARLOS PILI, MIGUELITO ROA, and KILUSAN-
OLALIA, and SHERIFF P. PAREDES, Respondents.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule
45 of the Rules of Court assailing the June 27, 2002 Decision1 of
the appellate court in CA-G.R. SP No. 62257, and the January 8,
2003 Resolution2 denying the motion for reconsideration thereof.
On the recommendation of the Division Clerk of Court and in the
interest of orderly administration of justice, the Court initially
consolidated this case with G.R. Nos. 149158-59 entitled Kimberly
Independent Labor Union for Solidarity Activism and Nationalism
(KILUSAN)-Organized Labor Associations in Line Industries and
Agriculture (OLALIA), et al. v. Court of Appeals, et al. We, however,
already disposed of the issue in G.R. Nos. 149158-59 in the
Court's Resolution promulgated on July 24, 2007.3 Left for the
Court to resolve then are the matters raised in the instant
petition.
We pertinently quote from the said July 24, 2007 Resolution the
facts, thus:
On June 30, 1986, the Collective Bargaining Agreement (CBA)
executed by and between Kimberly-Clark (Phils.), Inc., (Kimberly),
a Philippine-registered corporation engaged in the manufacture,
distribution, sale and exportation of paper products, and United
Kimberly-Clark Employees Union-Philippine Transport and
General Workers’ Organization (UKCEO-PTGWO) expired. Within
the freedom period, on April 21, 1986, KILUSAN-OLALIA, then a
newly-formed labor organization, challenged the incumbency of
UKCEO-PTGWO, by filing a petition for certification election with
the Ministry (now Department) of Labor and Employment (MOLE),
Regional Office No. IV, Quezon City.
A certification election was subsequently conducted on July 1,
1986 with UKCEO-PTGWO winning by a margin of 20 votes over
KILUSAN-OLALIA. Remaining as uncounted were 64 challenged
ballots cast by 64 casual workers whose regularization was in
question. KILUSAN-OLALIA filed a protest.
On November 13, 1986, MOLE issued an Order stating, among
others, that the casual workers not performing janitorial and yard
maintenance services had attained regular status on even date.
UKCEO-PTGWO was then declared as the exclusive bargaining
representative of Kimberly’s employees, having garnered the
highest number of votes in the certification election.
On March 16, 1987, KILUSAN-OLALIA filed with this Court a
petition for certiorari which was docketed as G.R. No. 77629
assailing the Order of the MOLE with prayer for a temporary
restraining order (TRO).
During the pendency of G.R. No. 77629, Kimberly dismissed from
service several employees and refused to heed the workers’
grievances, impelling KILUSAN-OLALIA to stage a strike on May
17, 1987. Kimberly filed an injunction case with the National
Labor Relations Commission (NLRC), which prompted the latter to
issue temporary restraining orders (TRO’s). The propriety of the
issuance of the TRO’s was again brought by KILUSAN-OLALIA to
this Court via a petition for certiorari and prohibition which was
docketed as G.R. No. 78791.
G.R. Nos. 77629 and 78791 were eventually consolidated by this
Court and decided on May 9, 1990. The dispositive portion of the
decision reads as follows:
WHEREFORE, judgment is hereby rendered in G.R. No. 77629:
1. Ordering the med-arbiter in Case No. R04-OD-M-4-15-
86 to open and count the 64 challenged votes, and that the
union with the highest number of votes be thereafter
declared as the duly elected certified bargaining
representative of the regular employees of KIMBERLY;
2. Ordering KIMBERLY to pay the workers who have been
regularized their differential pay with respect to minimum
wage, cost of living allowance, 13th month pay, and
benefits provided for under the applicable collective
bargaining agreement from the time they became regular
employees.
All other aspects of the decision appealed from, which are not so
modified or affected thereby, are hereby AFFIRMED. The
temporary restraining order issued in G.R. No. 77629 is hereby
made permanent.
The petition filed in G.R. No. 78791 is hereby DISMISSED.
SO ORDERED.
xxxx
On the Decision of the Court dated May 9, 1990, KILUSAN-
OLALIA and 76 individual complainants filed a motion for
execution with the DOLE (formerly MOLE). In an Order issued on
June 29, 2000, the DOLE considered as physically impossible,
and moot and academic the opening and counting of the 64
challenged ballots because they could no longer be located despite
diligent efforts, and KILUSAN-OLALIA no longer actively
participated when the company went through another CBA cycle.
However, the DOLE ordered the payment of the differential wages
and other benefits of the regularized workers, to wit:
ACCORDINGLY, let a partial writ of execution issue to enforce
payment of the sum of (sic) ₱576,510.57 to the 22 individual
workers listed in ANNEX A of Kimberly’s Comment/Reply dated
31 October 1991 representing their differential pay with respect to
the minimum wage, cost of living allowance, 13th month pay and
benefits provided under the applicable collective bargaining
agreement from the time they became regular employees as above-
indicated.
Further, the Bureau of Working Conditions is hereby directed to
submit, within twenty (20) days from receipt of this Order, a list of
workers who have been regularized and the corresponding
benefits owing to them from the time they became regular
employees.
SO ORDERED.
Pursuant thereto, on August 1, 2000, the Bureau of Working
Conditions (BWC) submitted its report finding 47 out of the 76
complainants as entitled to be regularized.
Kimberly filed a motion for reconsideration of the DOLE Order as
well as the BWC Report, arguing in the main that the decision in
G.R. Nos. 77629 and 78791 only pertained to casuals who had
rendered one year of service as of April 21, 1986, the filing date of
KILUSAN-OLALIA’s petition for certification election. On December
6, 2000, however, the DOLE denied the motion, disposing of it as
follows:
WHEREFORE, the motion for reconsideration filed by the
COMPANY is hereby DENIED for lack of merit. No further motion
of the same nature shall be entertained. Further, the Report of
computation submitted by the Bureau of Working Conditions is
hereby APPROVED and made an integral part of this Order.
Let a writ of execution be issued immediately.
SO ORDERED.
Kimberly, steadfast in its stand, filed a petition for certiorari
before the appellate court, which was docketed as CA-G.R. SP No.
62257 alleging that the employees who were dismissed due to the
illegal strike staged on May 17, 1987 (the subject of G.R. Nos.
149158-59) should not be awarded regularization differentials.
On June 27, 2002, the CA dismissed Kimberly’s petition, and
disposed of the case as follows:
WHEREFORE, the instant petition is DISMISSED for failure to
show grave abuse of discretion. The questioned orders dated June
29, 2000 and December 6, 2000 of the Secretary of Labor are
AFFIRMED. Costs against petitioners.
SO ORDERED.
With the denial of its motion for reconsideration, Kimberly
elevated the case before this Court, on the following grounds:
1. The Court of Appeals committed serious error in
affirming the ruling of the Secretary of Labor that even
casual employees who had not rendered one year of service
were considered regular employees, thereby nullifying and
disregarding the Honorable Court’s Decision dated May 9,
1990 that only casual employees who had rendered at least
one (1) year of service were considered regular employees.
2. The Court of Appeals also gravely erred in upholding the
ruling of Labor Secretary that persons not party to the
petition in G.R. No. 77629 were entitled to regularization
differentials, thereby amending the Honorable Court’s
decision.4
Kimberly, in this case, contends that the reckoning point in
determining who among its casual employees are entitled to
regularization should be April 21, 1986, the date KILUSAN-
OLALIA filed a petition for certification election to challenge the
incumbency of UKCEO-PTGWO. It posits that in the
implementation of the May 9, 1990 Decision in G.R. No.
77629,5 the DOLE should then exclude the employees who had
not rendered at least one (1) year of service from the said date.6
Kimberly also argues that the employees who are not parties in
G.R. No. 77629 should not be included in the implementation
orders. For DOLE to declare this group of employees as regular
and to order the payment of differential pay to them is to amend a
final and executory decision of this Court.7
We do not agree. In G.R. No. 77629, we ruled as follows:
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.
That the first stated position is the situation contemplated and
sanctioned by law is further enhanced by the absence of a
statutory limitation before regular status can be acquired by a
casual employee. The law is explicit. As long as the employee has
rendered at least one year of service, he becomes a regular
employee with respect to the activity in which he is employed. The
law does not provide the qualification that the employee must first
be issued a regular appointment or must first be formally declared WHEREFORE, premises considered, the petition for review
as such before he can acquire a regular status. Obviously, where on certiorari is DENIED DUE COURSE.
the law does not distinguish, no distinction should be drawn.8
SO ORDERED.
Considering that an employee becomes regular with respect to the
activity in which he is employed one year after he is employed, the ANTONIO EDUARDO B. NACHURA
reckoning date for determining his regularization is his hiring Associate Justice
date. Therefore, it is error for petitioner Kimberly to claim that it is
from April 21, 1986 that the one-year period should be counted.
While it is a fact that the issue of regularization came about only
when KILUSAN-OLALIA filed a petition for certification election,
the concerned employees attained regular status by operation of
law.91awp++i1

Further, the grant of the benefit of regularization should not be

limited to the employees who questioned their status before the
labor tribunal/court and asserted their rights; it should also
extend to those similarly situated.10 There is, thus, no merit in
petitioner's contention that only those who presented their
circumstances of employment to the courts are entitled to
regularization.111awp++i1

As to Kimberly’s assertions that some of the employees were

already recalled, reassigned or replaced by the RANK Manpower
Services, and that some did not return to work, the Court notes
that these are questions of fact. Basic is the rule that, in petitions
for review on certiorari under Rule 45 of the Rules of Court, only
questions of law may be raised,12 except, if the factual findings of
the appellate court are mistaken, absurd, speculative, conjectural,
conflicting, tainted with grave abuse of discretion, or contrary to
the findings culled by the court of origin,13 which is not so in the
instant case. The DOLE and the appellate court herein are
uniform in their findings.

Finally, oft-repeated is the rule that appellate courts accord the

factual findings of the labor tribunal not only respect but also
finality when supported by substantial evidence,14 unless there is
showing that the labor tribunal arbitrarily disregarded evidence
before it or misapprehended evidence of such nature as to compel
a contrary conclusion if properly appreciated.15 Likewise, the
appellate court cannot substitute its own judgment or criterion for
that of the labor tribunal in determining wherein lies the weight of
evidence or what evidence is entitled to belief.16
 [G.R. NO. 151827. April 29, 2005]
JOSEFINA BENARES, Petitioners, v. Jaime Pancho, Rodolfo Pancho, Jr.,
Joselito Medalla, Paquito Magallanes, Alicia Magallanes, Evelyn Magallanes,
Violeta Villacampa, Maritess Pancho, Rogelio Pancho and Arnolfo
Pancho, Respondents.
DECISION
TINGA, J.:
Assailed in this Petition for Review on Certiorari1 is the Decision2 of the Court of
Appeals which affirmed the National Labor Relations Commission's (NLRC)
decision3 holding that respondents were illegally dismissed and ordering
petitioner to pay respondents separation pay, backwages, 13th month pay, Cost
of Living Allowance (COLA), emergency relief allowance (ERA), salary differentials
and attorney's fees. The NLRC reversed the Labor Arbiter's finding that
respondents failed to lay down the facts and circumstances surrounding their
dismissal and to prove their entitlement to monetary awards.4
The antecedents, as narrated by the NLRC, follow.
Respondent Hda. Maasin II is a sugar cane plantation located in Murcia, Negros
Occidental with an area of 12-24 has. planted, owned and managed by Josefina
Benares, individual co-respondent.
On July 24, 1991, complainants thru counsel wrote the Regional Director of the
Department of Labor and Employment, Bacolod City for intercession particularly
in the matter of wages and other benefits mandated by law.
On September 24, 1991, a routine inspection was conducted by personnel of the
Bacolod District Office of the Department of Labor and Employment. Accordingly,
a report and recommendation was made, hence, the endorsement by the Regional
Director of the instant case to the Regional Arbitration Branch, NLRC, Bacolod
City for proper hearing and disposition.
On October 15, 1991, complainants alleged to have been terminated without
being paid termination benefits by respondent in retaliation to what they have
done in reporting to the Department of Labor and Employment their working
conditions viz-a-viz (sic) wages and other mandatory benefits.
On July 14, 1992, notification and summons were served to the parties wherein
complainants were directed to file a formal complaint.

Complainants alleged to have started working as sugar farm workers on various On July 28, 1992, a formal complaint was filed for illegal dismissal with money
dates, to wit: claims.

1. Jaime Pancho November 15, 1964 From the records, summons and notices of hearing were served to the parties and
apparently no amicable settlement was arrived, hence, the parties were directed
to file their respective position papers.
2. Rodolfo Pancho, Jr. February 1, 1975
On January 22, 1993, complainant submitted their position paper, while
3. Joselito Medalla November 15, 1964 respondent filed its position paper on June 21, 1993.

4. Paquito Magallanes March 10, 1973 On March 17, 1994, complainants filed their reply position paper and affidavit.
Correspondingly, a rejoinder was filed by respondent on May 16, 1994.
5. Felomino Magallanes November 15, 1964
On August 17, 1994, from the Minutes of the scheduled hearing, respondent
6. Alicia Magallanes January 15, 1964 failed to appear, and that the Office will evaluate the records of the case whether
to conduct a formal trial on the merits or not, and that the corresponding order
will be issued.
7. Evelyn Magallanes January 1, 1974

On January 16, 1996, the Labor Arbiter issued an order to the effect that the case
8. Violeta Villacampa December 1, 1979 is now deemed submitted for resolution.

9. Maritess Pancho December 15, 1985 On April 30, 1998, the Labor Arbiter a quo issued the assailed decision
dismissing the complaint for lack of merit.
10. Rogelio Pancho December 1, 1979
On June 26, 1998, complainants not satisfied with the aforecited ruling
11. Arnolfo Pancho February 1, 1975 interposed the instant appeal anchored on the ground that:
THE HONORABLE LABOR ARBITER GRAVELY ABUSED ITS DISCRETION AND
SERIOUSLY ERRED IN HOLDING THAT THE COMPLAINANTS FAILED TO
DISCUSS THE FACTS AND CIRCUMSTANCES SURROUNDING THEIR
DISMISSAL, HENCE, THERE IS NO DISMISSAL TO SPEAK OF AND THAT
COMPLAINANTS FAILED TO ALLEGE AND PROVE THAT THEIR CLAIMS ARE
VALID, HENCE THE DISMISSAL OF THEIR COMPLAINT WOULD CAUSE GRAVE
AND IRREPARABLE DAMAGE TO HEREIN COMPLAINANTS.5
The NLRC held that respondents attained the status of regular seasonal workers
of Hda. Maasin II having worked therein from 1964-1985. It found that petitioner
failed to discharge the burden of proving that the termination of respondents was
for a just or authorized cause. Hence, respondents were illegally dismissed and
should be awarded their money claims.
Petitioner's motion for reconsideration6 dated May 12, 1999 was denied in the
resolution7 dated October 29, 1999.
The Court of Appeals affirmed the NLRC's ruling, with the modification that the
backwages and other monetary benefits shall be computed from the time
compensation was withheld in accordance with Article 279 of the Labor Code, as
amended by Republic Act No. 6715.
In its Resolution8 dated November 28, 2001, the appellate court denied
petitioner's motion for reconsideration for lack of merit.
Petitioner is now before this Court averring that the Court of Appeals erred in
affirming the decision of the NLRC. While petitioner concedes that the factual
findings of the NLRC are generally binding on the appellate court, petitioner
insists that the findings of the NLRC are vague and contradictory, thereby
necessitating review.
According to petitioner, the fact that she was able to present sufficient proof to
rebut the claim of illegal dismissal should be considered in light of the NLRC's
admission that there are gray areas in the case which require clarification.
Petitioner avers that the NLRC should have at least remanded the case to the
labor arbiter to thresh out these gray areas. She further claims that the NLRC
was overly zealous in awarding COLA and ERA despite the fact that respondents
did not even pray for these awards in their complaint. She also questions the
NLRC's general statement to the effect that the payroll she submitted is not
convincing asserting that she submitted 235 sets of payroll, not just one, and that
the NLRC did not even bother to explain why it found the payroll unconvincing.
Respondents filed a Comment9 dated May 10, 2002 alleging that petitioner failed
to submit certified true copies of the assailed decisions and resolutions, and that
the petition lacks proof of service and raises questions of fact.
In her Reply to Comment10 dated September 17, 2002, petitioner points out that
the Rules of Court do not require that all copies of the petition contain certified
true copies of the questioned decisions and resolutions. Further, all copies of the
petition filed with the Court contain an affidavit of service. Respondents' copy
does not have an affidavit of service because the sworn declaration can not be
executed before service of the petition is actually made. Petitioner also maintains
that the rule on review of findings of fact by the Supreme Court admits of certain
exceptions such as when the conclusions arrived at are grounded entirely on
speculation, surmises and conjectures as in this case.
The petition was given due course and the parties were required to submit their
respective memoranda in the Resolution11 dated March 3, 2003. Petitioner filed
a Manifestation and Compliance12 dated April 22, 2003 adopting the allegations in
her Petition for Review on Certiorari and Reply to Comment as her memorandum.
For their part, respondents filed a Memoranda For Private Respondents13 dated
May 7, 2003 alleging that the Court of Appeals correctly relied upon the factual
findings of the NLRC after having found the same to be supported by substantial
evidence. They insist that they are regular seasonal employees of the sugar
plantation. As such, petitioner has the burden of proving that their dismissal was
for a just or authorized cause.
As regards the contention that the NLRC erroneously awarded COLA and ERA,
respondents cite Osias Academy v. DOLE,14 which provides that the NLRC can
extend monetary awards even if these are not prayed for if the monetary benefits
are statutory grants intended to alleviate the laborer's plight like the COLA and
ERA.
The main question raised by the present petition is whether respondents are
regular employees of Hacienda Maasin and thus entitled to their monetary claims.
Related to this is the issue of whether respondents were illegally terminated.
This case presents a good opportunity to reiterate the Court's rulings on the
subject of seasonal employment. The Labor Code defines regular and casual
employment, viz:
Art. 280. REGULAR AND CASUAL EMPLOYMENT. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the employment has
been 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.
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 provides for three kinds of employees: (1) regular employees or those who
have been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer; (2) project employees or those
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; and (3)
casual employees or those who are neither regular nor project employees.15
In Mercado v. NLRC,16 the Court ruled that seasonal workers do not become
regular employees by the mere fact that they have rendered at least one year of
service, whether continuous or broken, because the proviso in the second
paragraph of Article 280 demarcates as "casual" employees, all other employees
who do not fall under the definition of the preceding paragraph. It 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.
The factual circumstances obtaining in the Mercado case, however, are peculiar.
In that case, the workers were engaged to do a particular phase of agricultural
work necessary for rice and/or sugarcane production, after which they would be
free to render services to other farm workers who need their services.
In contrast, in the case of Hacienda Fatima v. National Federation of Sugarcane
Workers-Food and General Trade,17 respondents performed the same tasks for
petitioners every season for several years. Thus, they were considered the latter's
regular employees for their respective tasks. The fact that they do not work
continuously for one whole year but only for the duration of the season does not
detract from considering them in regular employment since in a litany of cases
this Court has already settled that seasonal workers who are called to work from
time to time and are temporarily laid off during off-season are not separated from
service in that period, but merely considered on leave until re-employed.18
Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule that the
primary standard for determining regular employment is the reasonable
connection between the particular activity performed by the employee vis - Ã -
vis the usual trade or business of the employer. This 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. If the employee has
been performing the job for at least a 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.19
In this case, petitioner argues that respondents were not her regular employees as
they were merely "pakiao" workers who did not work continuously in the sugar
plantation. They performed such tasks as weeding, cutting and loading canes,
planting cane points, fertilizing, cleaning the drainage, etc. These functions
allegedly do not require respondents' daily presence in the sugarcane field as it is
not everyday that one weeds, cuts canes or applies fertilizer. In support of her
allegations, petitioner submitted "cultivo" and milling payrolls.
The probative value of petitioner's evidence, however, has been passed upon by
the labor arbiter, the NLRC and the Court of Appeals. Although the labor arbiter
dismissed respondents' complaint because their "position paper is completely
devoid of any discussion about their alleged dismissal, much less of the probative
facts thereof,"20 the ground for the dismissal of the complaint implies a finding
that respondents are regular employees.
The NLRC was more unequivocal when it pronounced that respondents have
acquired the status of regular seasonal employees having worked for more than
one year, whether continuous or broken in petitioner's hacienda.
According to petitioner, however, the NLRC's conclusion is highly suspect
considering its own admission that there are "gray areas which requires (sic)
clarification." She alleges that despite these gray areas, the NLRC "chose not to
remand the case to the Labor Arbiter' .as this would unduly prolong the agony of
the complainants in particular." 21
Petitioner perhaps wittingly omitted mention that the NLRC "opted to appreciate
the merits of the instant case based on available documents/pleadings."22 That
the NLRC chose not to remand the case to the labor arbiter for clarificatory
proceedings and instead decided the case on the basis of the evidence then
available to it is a judgment call this Court shall not interfere with in the absence
of any showing that the NLRC abused its discretion in so doing.
The Court of Appeals, in fact, found no such grave abuse of discretion on the part
of the NLRC. Accordingly, it dismissed the petition for certiorari and affirmed with
modification the findings of the NLRC. It is well to note at this point that in quasi-
judicial proceedings, the quantum of evidence required to support the findings of
the NLRC is only substantial evidence or that amount of relevant evidence which
a reasonable mind might accept as adequate to justify a conclusion.23
The issue, therefore, of whether respondents were regular employees of petitioner
has been adequately dealt with. The labor arbiter, the NLRC and the Court of
Appeals have similarly held that respondents were regular employees of
petitioner. Since it is a settled rule that the factual findings of quasi-judicial
agencies which have acquired expertise in the matters entrusted to their
jurisdiction are accorded by this Court not only respect but even finality,24 we
shall no longer disturb this finding.
Petitioner next underscores the NLRC decision's mention of the "payroll" she
presented despite the fact that she allegedly presented 235 sets of payroll, not
just one payroll. This circumstance does not in itself evince any grave abuse of
discretion on the part of the NLRC as it could well have been just an innocuous
typographical error.
Verily, the NLRC's decision, affirmed as it was by the Court of Appeals, appears to
have been arrived at after due consideration of the evidence presented by both
parties.
We also find no reason to disturb the finding that respondents were illegally
terminated. When there is no showing of clear, valid and legal cause for the
termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for
a just or authorized cause.25 In this case, as found both by the NLRC and the SECOND DIVISION
Court of Appeals, petitioner failed to prove any such cause for the dismissal of
respondents. [G.R. NO. 150478. April 15, 2005]

WHEREFORE, the instant petition is DENIED. The assailed Decision and HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L.
Resolution of the Court of Appeals respectively dated June 29, 2001 and STARKE, Petitioners, v. CANDIDO CUENCA, FRANCISCO ACULIT, ANGELINA
November 28, 2001 are hereby AFFIRMED. Costs against petitioner. ALMONIA, DONALD ALPUERTO, NIDA BANGALISAN, ROGELIO CHAVEZ,
ELMO DULINGGIS, MERCEDES EMPERADO, TORIBIO EMPERADO, JULIANA
SO ORDERED. ENCARNADO, REYNALDO ENCARNADO, GENE FERNANDO, JOVEN
FERNANDO, HERNANI FERNANDO, TERESITA FERNANDO, BONIFACIO
GADON, JOSE GALLADA, RAMONITO KILAYKO, ROLANDO KILAYKO,
ALFREDO LASTIMOSO, ANTONIO LOMBO, ELIAS LOMBO, EMMA LOMBO,
LAURENCIA LOMBO, LUCIA LOMBO, JOEL MALACAPAY, ADELA MOJELLO,
ERNESTO MOJELLO, FRUCTOSO MOJELLO, JESSICA MOJELLO, JOSE
MOJELLO, MARITESS MOJELLO, MERLITA MOJELLO, ROMEO MOJELLO,
RONALDO MOJELLO, VALERIANA MOJELLO, JAIME NEMENZO, RODOLFO
NAPABLE, SEGUNDIA OCDEN, JARDIOLINA PABALINAS, LAURO PABALINAS,
NOLI PABALINAS, RUBEN PABALINAS, ZALDY PABALINAS, ALFREDO
PANOLINO, JOAQUIN PEDUHAN, JOHN PEDUHAN, REYNALDO PEDUHAN,
ROGELIO PEDUHAN, JOSEPHINE PEDUHAN, ANTONIO PORRAS, JR., LORNA
PORRAS, JIMMY REYES, ALICIA ROBERTO, MARCOS ROBERTO, JR., MARIA
SANGGA, RODRIGO SANGGA, ARGENE SERON, SAMUEL SERON, SR.,
ANGELINO SENELONG, ARMANDO SENELONG, DIOLITO SENELONG,
REYNALDO SENELONG, VICENTE SENELONG, FEDERICO STA. ANA,
ROGELIO SUASIM, EDNA TADLAS, ARTURO TITONG, JR., JOSE TITONG,
JR., NANCY VINGNO, ALMA YANSON, JIMMY YANSON, MYRNA VILLANUEVA
BELENARIO, SALVADOR MALACAPAY, and RAMELO TIONGCO, Respondents.

DECISION

CALLEJO, SR., J.:

Before us is a Petition for Review of the Decision1 of the Court of Appeals (CA),
dated July 31, 2001, and the Resolution dated September 24, 2001 denying the
petitioners' motion for reconsideration. The assailed decision modified the
decision of the National Labor Relations Commission (NLRC) in NLRC Case No. V-
000099-98.

Hacienda Bino is a 236-hectare sugar plantation located at Barangay Orong,

Kabankalan City, Negros Occidental, and represented in this case by Hortencia L.
Starke, owner and operator of the said hacienda.

The 76 individual respondents were part of the workforce of Hacienda Bino

consisting of 220 workers, performing various works, such as cultivation,
planting of cane points, fertilization, watering, weeding, harvesting, and loading of
harvested sugarcanes to cargo trucks.2

On July 18, 1996, during the off-milling season, petitioner Starke issued an
Order or Notice which stated, thus:
To all Hacienda Employees:
Please bear in mind that all those who signed in favor of CARP are expressing
their desire to get out of employment on their own volition.
Wherefore, beginning today, July 18, only those who did not sign for CARP will be
given employment by Hda. Bino.
(Sgd.) Hortencia Starke3
The respondents regarded such notice as a termination of their employment. As a
consequence, they filed a complaint for illegal dismissal, wage differentials, 13th
month pay, holiday pay and premium pay for holiday, service incentive leave pay,
and moral and exemplary damages with the NLRC, Regional Arbitration Branch
No. VI, Bacolod City, on September 17, 1996.4
In their Joint Sworn Statement, the respondents as complainants alleged inter
alia that they are regular and permanent workers of the hacienda and that they
were dismissed without just and lawful cause. They further alleged that they were
dismissed because they applied as beneficiaries under the Comprehensive
Agrarian Reform Program (CARP) over the land owned by petitioner Starke.5
For her part, petitioner Starke recounted that the company's Board of Directors
petitioned the Sangguniang Bayan of Kabankalan for authority to re-classify, from
agricultural to industrial, commercial and residential, the whole of Hacienda
Bino, except the portion earmarked for the CARP. She asserted that half of the
workers supported the re-classification but the others, which included the herein
respondents, opted to become beneficiaries of the land under the CARP. Petitioner
Starke alleged that in July 1996, there was little work in the plantation as it was
off-season; and so, on account of the seasonal nature of the work, she issued the
order giving preference to those who supported the re-classification. She pointed
out that when the milling season began in October 1996, the work was plentiful
again and she issued notices to all workers, including the respondents, informing
them of the availability of work. However, the respondents refused to report back
to work. With respect to the respondents' money claims, petitioner Starke
submitted payrolls evidencing payment thereof.
On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a
Decision,6 finding that petitioner Starke's notice dated July 18, 1996 was
tantamount to a termination of the respondents' services, and holding that the
petitioner company was guilty of illegal dismissal. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the
dismissal of the complainants illegal and ordering respondent Hortencia L.
Starke, Inc. represented by Hortencia L. Starke, as President, to:
1. Reinstate the complainants to their former position without loss of seniority
rights immediately upon receipt of this decision;
2. PAY the backwages and wage differentials of the complainants, to wit:
in the total amount of Four Hundred Ninety-Five Thousand Eight Hundred Fifty-
Two and 72/100 (P495,852.72) Pesos; and cralawlibrary
3. TO PAY the complainants attorney's fee in the amount of Forty-Nine Thousand
Five Hundred Eighty-Five and 27/100 (P49,585.27) Pesos.
Respondents are further directed to deposit to this Office the total judgment
award of FIVE HUNDRED FORTY-FIVE THOUSAND AND FOUR HUNDRED
THIRTY-SEVEN AND 99/100 (P545,437.99) PESOS within ten (10) days from
receipt of this decision.
All other claims are hereby DISMISSED for lack of merit.
SO ORDERED.7
Both the petitioners and the respondents appealed the case to the NLRC. On July
24, 1998, the NLRC affirmed with modification the decision of the Labor Arbiter.
The dispositive part of its decision reads:
WHEREFORE, premises considered, the Decision of the Labor Arbiter
is AFFIRMED WITH MODIFICATIONS. Respondent is further ordered to pay the
complainants listed in the Holiday Pay Payroll the amounts due them.
SO ORDERED.8
A motion for reconsideration of the said decision was denied by the
NLRC.9 Dissatisfied, the respondents appealed the case to the CA where the
following issues were raised:
A. THE HONORABLE COMMISSION GRAVELY ABUSED ITS DISCRETION AND
POWER BY VIOLATING THE DOCTRINE OF "STARE DECISIS" LAID DOWN BY
THE SUPREME COURT AND THE APPLICABLE LAWS AS TO THE STATUS OF
THE SUGAR WORKERS.
B. THE HONORABLE COMMISSION COMMITTED SERIOUS ERRORS BY
ADMITTING THE MOTION TO DISMISS AND/OR ANSWER TO PETITIONERS'
APPEAL MEMORANDUM DATED MARCH 26, 1998 FILED BY COUNSEL FOR
THE HEREIN RESPONDENTS INSPITE OF THE FACT THAT IT WAS FILED WAY
BEYOND THE REGLEMENTARY PERIOD.
C. THE HONORABLE COMMISSION COMMITTED GRAVE ERROR IN GIVING
CREDENCE TO THE SWEEPING ALLEGATIONS OF THE COMPLAINANTS AS TO
THE AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT ANY BASIS.10
On July 31, 2001, the CA rendered a Decision,11 the dispositive portion of which
reads:
WHEREFORE, the decision of the National Labor Relations Commission is
hereby MODIFIED by deleting the award for holiday pay and premium pay for
holidays. The rest of the Decision is hereby AFFIRMED.
SO ORDERED.12
The CA ruled that the concept of stare decisis is not relevant to the present case.
It held that the ruling in Mercado, Sr. v. NLRC13 does not operate to abandon the
settled doctrine that sugar workers are considered regular and permanent farm
workers of a sugar plantation owner, considering that there are facts peculiar in
that case which are not present in the case at bar. In the Mercado case, the farm
laborers worked only for a definite period for a farm owner since the area of the
land was comparatively small, after which they offer their services to other farm
owners. In this case, the area of the hacienda, which is 236 hectares, simply does
not allow for the respondents to work for a definite period only.
The CA also held that the petitioners' reliance on Bacolod-Murcia Milling Co. Inc. v.
NLRC14 was misplaced, as it in fact, bolstered the respondents' posture that they
are regular employees. In that case, the Court held that a sugar worker may be
considered as in regular employment even during those years when he is merely a
seasonal worker where the issues concern the determination of an employer-
employee relationship and security of tenure.
Further, the CA held that the respondents' appeal to the NLRC was not perfected
since they failed to accompany their notice of appeal with a memorandum of
appeal, or to timely file a memorandum of appeal. Thus, as to them, the decision
of the Labor Arbiter became final and executory. The NLRC, therefore, gravely
abused its discretion when it modified the decision of the Labor Arbiter and
awarded to the respondents holiday pay and premium for holiday pay. Finally, the
CA affirmed the award of backwages, finding no circumstance that would warrant
a reversal of the findings of the Labor Arbiter and NLRC on this point.15
On September 24, 2001, the CA denied the motion for reconsideration filed by the
petitioners due to their failure to indicate the date of the receipt of the decision to
determine the timeliness of the motion.16
Hence, this Petition for Review .
The petitioners submit the following issues:
A. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY
ABUSED ITS DISCRETION AND POWER BY VIOLATING THE DOCTRINE OF
"STARE DECISIS" LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE
LAWS AS TO THE STATUS OF THE SUGAR WORKERS.
B. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN DISMISSING THE MOTION FOR RECONSIDERATION FOR FAILURE TO STATE
THE DATE OF THE RECEIPT OF THE DECISION IN THE MOTION FOR
RECONSIDERATION.17
Petitioner Starke contends that the established doctrine that seasonal employees
are regular employees had been overturned and abandoned by Mercado, Sr. v.
NLRC.18 She stresses that in that case, the Court held that petitioners therein
who were sugar workers, are seasonal employees and their employment legally
ends upon completion of the project or the season. Petitioner Starke argues that
the CA violated the doctrine of stare decisis in not applying the said ruling. She
asserts that the respondents, who are also sugar workers, are seasonal
employees; hence, their employment can be terminated at the end of the season
and such termination cannot be considered an illegal dismissal. Petitioner Starke
maintains that the determination of whether the workers are regular or seasonal
employees is not dependent on the number of hectares operated upon by them, or
the number of workers, or the capitalization involved, but rather, in the nature of
the work. She asserts that the respondents also made their services available to
the neighboring haciendas. To buttress her contention that the respondents are
seasonal employees, petitioner Starke cites Rep. Act 6982, An Act Strengthening
the Social Amelioration Program in the Sugar Industry, Providing the Mechanics
for its Implementation, and for other Purposes, which recognizes the seasonal
nature of the work in the sugar industry.19
Petitioner Starke also takes exception to the denial of her motion for
reconsideration due to failure to state the date of the receipt of the decision. She
asserts that a denial of a motion for reconsideration due to such cause is merely
directory and not mandatory on the part of the CA. Considering that the amount
involved in this case and the fact that the motion was filed within the
reglementary period, the CA should have considered the motion for
reconsideration despite such procedural lapse.20
On the other hand, the respondents aver that the petitioners erroneously invoke
the doctrine of stare decisis since the factual backdrop of this case and
the Mercado case is not similar. The respondents posit that the Mercado case
ruled on the status of employment of farm laborers who work only for a definite
period of time for a farm owner, after which they offer their services to other farm
owners. Contrarily, the respondents contend that they do not work for a definite
period but throughout the whole year, and do not make their services available to
other farm owners. Moreover, the land involved in the Mercado case is
comparatively smaller than the sugar land involved in this case. The respondents
insist that the vastness of the land involved in this case requires the workers to
work on a year-round basis, and not on an "on-and-off" basis like the farm
workers in the Mercado case.
Finally, the respondents maintain that the requirement that the date of receipt of
the decision should be indicated in the motion for reconsideration is mandatory
and jurisdictional and, if not complied with, the court must deny the motion
outright.21
The petition is without merit.
On the substantial issue of whether the respondents are regular or seasonal
employees, the petitioners contend that the CA violated the doctrine of stare
decisis by not applying the ruling in the Mercado case that sugar workers are
seasonal employees. We hold otherwise. Under the doctrine of stare decisis, when
a court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases in which the facts are
substantially the same.22 Where the facts are essentially different, however, stare
decisis does not apply, for a perfectly sound principle as applied to one set of facts
might be entirely inappropriate when a factual variance is introduced.23
The CA correctly found that the facts involved in this case are different from
the Mercado case; therefore, the ruling in that case cannot be applied to the case
at bar, thus:
We do not find the concept of stare decisis relevant in the case at bench. For
although in the Mercado case, the Supreme Court held the petitioners who were
sugar workers not to be regular but seasonal workers, nevertheless, the same
does not operate to abandon the settled doctrine of the High Court that sugar
workers are considered regular and permanent farm workers of a sugar
plantation owner, the reason being that there are facts present that are peculiar
to the Mercado case. The disparity in facts between the Mercado case and the
instant case is best exemplified by the fact that the former decision ruled on the
status of employment of farm laborers, who, as found by the labor arbiter, work
only for a definite period for a farm worker, after which they offer their services to
other farm owners, considering the area in question being comparatively small,
comprising of seventeen and a half (17') hectares of land, such that the planting
of rice and sugar cane thereon could not possibly entail a whole year operation.
The herein case presents a different factual condition as the enormity of the size
of the sugar hacienda of petitioner, with an area of two hundred thirty-six (236)
hectares, simply do not allow for private respondents to render work only for a
definite period.
Indeed, in a number of cases, the Court has recognized the peculiar facts
attendant in the Mercado case. In Abasolo v. NLRC,24 and earlier, in Philippine
Tobacco Flue-Curing & Redrying Corporation v. NLRC,25the Court made the
following observations:
'In Mercado, although respondent constantly availed herself of the petitioners'
services from year to year, it was clear from the facts therein that they were not in
her regular employ. Petitioners therein performed different phases of agricultural
work in a given year. However, during that period, they were free to work for other
farm owners, and in fact they did. In other words, they worked for respondent,
but were nevertheless free to contract their services with other farm owners. The
Court was thus emphatic when it ruled that petitioners were mere project
employees, who could be hired by other farm owners'.26
to the neighboring haciendas, the records do not, however, support such
assertion.
The primary standard for 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.28There is no doubt that the
respondents were performing work necessary and desirable in the usual trade or
business of an employer. Hence, they can properly be classified as regular
employees.
For respondents to be excluded from those classified as regular employees, it is
not enough that they perform work or services that are seasonal in nature. They
must have been employed only for the duration of one season.29 While the records
sufficiently show that the respondents' work in the haciendawas seasonal in
nature, there was, however, no proof that they were hired for the duration of one
season only. In fact, the payrolls,30 submitted in evidence by the petitioners, show
that they availed the services of the respondents since 1991. Absent any proof to
the contrary, the general rule of regular employment should, therefore, stand. It
bears stressing that the employer has the burden of proving the lawfulness of his
employee's dismissal.31
On the procedural issue, petitioner Starke avers that the CA should not have
denied outright her motion for reconsideration, considering its timely filing and
the huge amount involved. This contention is already moot. Petitioner Starke has
already aired in this petition the arguments in her motion for reconsideration of
the CA decision, which have been adequately addressed by this Court.
Assuming arguendo that the CA indeed failed to consider the motion for
reconsideration, petitioner Starke was not left without any other recourse.32
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the
Court of Appeals, dated July 31, 2001, and its Resolution dated September 24,
2001 are hereby AFFIRMED.
SO ORDERED.

Recently, the Court reiterated the same observations in Hacienda Fatima v.

National Federation of Sugarcane Workers-Food and General Trade27 and added
that the petitioners in the Mercado case were "not hired regularly and repeatedly
for the same phase/s of agricultural work, but on and off for any single phase
thereof."

In this case, there is no evidence on record that the same particulars are present.
The petitioners did not present any evidence that the respondents were required
to perform certain phases of agricultural work for a definite period of time.
Although the petitioners assert that the respondents made their services available
G.R. No. 153832. March 18, 2005
FILIPINAS PRE-FABRICATED BUILDING SYSTEMS
(FILSYSTEMS), INC., and FELIPE A. CRUZ JR.,Petitioners,
vs.
ROGER D. PUENTE,1 Respondent.
DECISION
PANGANIBAN, J.:
Without a valid cause, the employment of project employees
cannot be terminated prior to expiration. Otherwise, they shall be
entitled to reinstatement with full back wages. However, if the
project or work is completed during the pendency of the ensuing
suit for illegal dismissal, the employees shall be entitled only to
full back wages from the date of the termination of their
employment until the actual completion of the project or work.
The Case
Before us is a Petition for Review2 under Rule 45 of the Rules of
Court, seeking to annul and reverse the April 16, 2002
Decision3 and the May 30, 2002 Resolution4 of the Court of
Appeals (CA) in CA-GR SP No. 66756. The assailed Decision
disposed as follows:
"WHEREFORE, premises considered, the petition
is GRANTED and the decision dated May 18, 2001 and resolution
dated June 29, 2001 of the NLRC are hereby annulled and set
aside. [Petitioner] Filsystems, Inc. is hereby ordered to reinstate
[respondent] immediately to his former position without loss of
seniority and privileges with full back wages from the date of his
dismissal until his actual reinstatement, plus 10% of the total
monetary award as attorney’s fees."5
The assailed Resolution denied petitioners’ Motion for
Reconsideration.
The Facts
The factual antecedents are summarized by the CA as follows:
"[Respondent] avers that he started working with [Petitioner]
Filsystems, Inc., a corporation engaged in construction business,
on June 12, 1989; that he was initially hired by [petitioner]
company as an ‘installer’; that he was later promoted to mobile
crane operator and was stationed at the company premises at No.
69 Industria Road, Bagumbayan, Quezon City; that his work was
not dependent on the completion or termination of any project;
that since his work was not dependent on any project, his
employment with the [petitioner-]company was continuous and
without interruption for the past ten (10) years; that on October 1,
1999, he was dismissed from his employment allegedly because
he was a project employee. He filed a pro forma complaint for
illegal dismissal against the [petitioner] company on November 18,
1999.
"The [petitioner-]company however claims that complainant was
hired as a project employee in the company’s various projects;
that his employment contracts showed that he was a project
worker with specific project assignments; that after completion of
each project assignment, his employment was likewise terminated
and the same was correspondingly reported to the DOLE.
"Labor Arbiter Veneranda C. Guerrero dismissed the complaint for
lack of merit, ruling thus:
‘WHEREFORE, premises considered, judgment is hereby rendered
dismissing the complaint for illegal dismissal for lack of merit.
‘[Petitioner] Filsystems, Inc. is hereby ordered to pay complainant
Roger D. [F]uente the amount of FOUR THOUSAND TWO
HUNDRED TWELVE PHILIPPINE PESOS (₱4,212.00) representing
his pro-rata 13th month pay for 1999, plus ten percent (10%)
thereof as and for attorney’s fees.
‘SO ORDERED.’
"[Respondent] appealed. However, [the] National Labor Relations
Commission (NLRC) dismissed the same and the subsequent
motion for reconsideration."6
Ruling of the Court of Appeals
The Court of Appeals reversed the NLRC and the labor arbiter
thus:
"The employment contracts signed by petitioner Puente do not
have the specified duration for each project contrary to the
provision of Article 280 of the Labor Code, nor did petitioner work
in the project sites, but had always been assigned at the company
plant attending to the maintenance of all mobile cranes of the
company, performing tasks vital and desirable in the employer’s
usual business for ten (10) continuous years."7
The CA concluded that respondent was a regular employee of
petitioners.
Hence, this Petition.8
The Issues
In its Memorandum, petitioners raise the following issues for our
consideration:
"1. Whether or not the Court of Appeals erred and committed
grave abuse of discretion in finding that:
‘The employment contracts signed by private respondent Puente
do not have the specified duration for each project contrary to the
provision of Art. 280 of the Labor Code, nor did petitioner work in
the project sites, but had always been assigned at the company
plant attending to the maintenance of all mobile cranes of the
company, performing tasks vital and desirable in the company’s
usual business for ten (10) continuous years.’
"2. Whether or not the Court a quo erred and committed grave
abuse of discretion in finding that the private respondent is a
regular employee and not a project employee?
"3. Whether or not the Court a quo erred and committed grave
abuse of discretion in giving due course to the private
respondent’s petition for certiorari under Rule 65 of the 1997
Rules on Civil Procedure; and in annulling and setting aside the
Decision dated May 18, 2001 and the Resolution dated June 29,
2001 of the NLRC?
"4. Whether or not the Court a quo erred and committed grave
abuse of discretion in ruling that the evidence submitted by the
petitioners proving that there was retrenchment program
implemented by the petitioner company, as a defense that the
private respondent’s services was terminated due to absence if not
lack of construction project contract, where he may be redeployed
or reinstated?
"5. Whether or not the Court a quo erred and committed grave
abuse of discretion in ordering the reinstatement of the private
respondent, with full back wages plus payment of 10% attorney’s
fees?"9
In the main, the issues boil down to (1) whether Roger Puente is a
project employee, and (2) whether he is entitled to reinstatement
with full back wages.
This Court’s Ruling
The Petition is partly meritorious.
First Issue:
Project Employee
In general, the factual findings of the Court of Appeals are binding
on the Supreme Court. One exception to this rule, however, is
when the factual findings of the former are contrary to those of
the trial court (or the lower administrative body, as the case may
be).10 The question of whether respondent is a regular or a project
employee is essentially factual in nature; nonetheless, the Court is
constrained to resolve it due to the incongruent findings of the
NLRC and the CA.
The Labor Code defines regular, project and casual employees as
follows:
ART. 280. Regular and Casual Employment. - The provision 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.
With particular reference to the construction industry, to which
Petitioner Filsystems belongs, Department (of Labor and
Employment) Order No. 19,11 Series of 1993, states:
2.1 Classification of employees. – The employees in the
construction industry are generally categorized as a) project
employees and b) non-project employees. Project employees are
those employed in connection with a particular construction
project or phase thereof and whose employment is co-terminous
with each project or phase of the project to which they are
assigned.
xxxxxxxxx
2.2 Indicators of project employment. – Either one or more of the
following circumstances, among other, may be considered as
indicators that an employee is a project employee.
(a) The duration of the specific/identified undertaking for which
the worker is engaged is reasonably determinable.
(b) Such duration, as well as the specific work/service to be
performed, is defined in an employment agreement and is made
clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection
with the particular project/undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement, is
free to offer his services to any other employer.
(e) The termination of his employment in the particular
project/undertaking is reported to the Department of Labor and
Employment (DOLE) Regional Office having jurisdiction over the
workplace within 30 days following the date of his separation from
work, using the prescribed form on employees’
terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to
pay completion bonus to the project employee as practiced by
most construction companies.
The above-quoted provisions make it clear that 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." In D.M.
Consunji, Inc. v. NLRC,12 this Court has ruled that "the length of
service of a project employee is not the controlling test of
employment tenure but whether or not ‘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.’"
In the present case, the contracts of employment13 of Puente
attest to the fact that he was hired for specific projects. His
employment was coterminous with the completion of the projects
for which he had been hired. Those contracts expressly provided
that his tenure of employment depended on the duration of any
phase of the project or on the completion of the construction
projects. Furthermore, petitioners regularly submitted to the labor
department reports of the termination of services of project
workers. Such compliance with the reportorial requirement
confirms that respondent was a project employee.14
With regard specifically to the last employment contract executed
by the parties, a contract that respondent accepted on August 26,
1996, we find that he worked at the site of the World Finance
Plaza project. That he did is amply proven by the Affidavit of
Eduardo Briagas,15 another employee who was also stationed at
the World Finance Plaza project, as well as by respondent’s Travel
Trip Reports.16
Furthermore, respondent’s Complaint17 specified the address of
Filsystems, as "69 INDUSTRIA ROAD, B.BAYAN Q.C.," but
specified his place of work as "PROJECT TO PROJECT." These
statements, coupled with the other pieces of evidence presented
by petitioners, convinces the Court that -- contrary to the
subsequent claims of respondent -- he performed his work at the
project site, not at the company’s premises.
That his employment contract does not mention particular dates
that establish the specific duration of the project does not
preclude his classification as a project employee. This fact is clear
from the provisions of Clause 3.3(a) of Department Order No. 19,
which states:
a) Project employees whose aggregate period of continuous
employment in a construction company is at least one year shall
be considered regular employees, in the absence of a "day certain"
agreed upon by the parties for the termination of their relationship.
Project employees who have become regular shall be entitled to
separation pay.
A "day" as used herein, is understood to be that which must
necessarily come, although is may not be known exactly when. This
means that where the final completion of a project or phase thereof
is in fact determinable and the expected completion is made known
to the employee, such project employee may not be considered
regular, notwithstanding the one-year duration of employment in
the project or phase thereof or the one-year duration of two or
more employments in the same project or phase of the object.
(Italicization and emphasis supplied)
Respondent’s employment contract provides as follows:
"x x x employment, under this contract is good only for the
duration of the project unless employee’s services is terminated
due to completion of the phase of work/section of the project or
piece of work to which employee is assigned:
"We agree clearly that employment is on a Project to Project Basis
and that upon termination of services there is no separation pay:
POSITION : Mobil Crane Operator
PROJECT NAME : World Finance Plaza
LOCATION : Meralco Ave., Ortigas Center, Pasig City
ASSIGNMENT : Lifting & Hauling of Materials
(Phase of Work/Piece of Work)"18
Evidently, although the employment contract did not state a
particular date, it did specify that the termination of the parties’
employment relationship was to be on a "day certain" -- the day
when the phase of work termed "Lifting & Hauling of Materials" for
the "World Finance Plaza" project would be completed. Thus,
respondent cannot be considered to have been a regular
employee. He was a project employee.
That he was employed with Petitioner Filsystems for ten years
in various projects did not ipso facto make him a regular
employee, considering that the definition of regular employment in
Article 280 of the Labor Code makes a specific exception with
respect to project employment. The mere rehiring of respondent
on a project-to-project basis did not confer upon him regular
employment status.19 "The practice was dictated by the practical
consideration that experienced construction workers are more
preferred."20 It did not change his status as a project employee.
Second Issue:
Reinstatement
In termination cases, the burden of proving that an employee has
been lawfully dismissed lies with the employer.21Thus, employers
who hire project employees are mandated to state and, once its
veracity is challenged, to prove the actual basis for the latter’s
dismissal.22
In the present case, petitioners claim that respondent’s services
were terminated due to the completion of the project.23 There is no
allegation or proof, however, that the World Finance Plaza project
-- or the phase of work therein to which respondent had been
assigned -- was already completed by October 1, 1999, the date
when he was dismissed. The inescapable presumption is that his
services were terminated for no valid cause prior to the expiration
of the period of his employment; hence, the termination was
illegal. Reinstatement with full back wages, inclusive of
allowances and other benefits or their monetary equivalents --
computed from the date of his dismissal until his reinstatement --
is thus in order.24
However, if indeed the World Finance Plaza project has already
been completed during the pendency of this suit, then respondent
-- being a project employee -- can no longer be
reinstated.25 Instead, he shall entitled to the payment of his salary
and other benefits corresponding to the unexpired portion of his
employment,26 specifically from the time of the termination of his
employment on October 1, 1999, until the date of the completion
of the World Finance Plaza project.
WHEREFORE, the Petition is PARTLY GRANTED. Respondent
Roger D. Puente is DECLARED to be a project employee, whose
employment was terminated without any valid cause prior to its
expiration and is thus entitled to reinstatement with full back
wages. However, if reinstatement is no longer possible due to the
completion of the World Finance Plaza project during the
pendency of this case, Petitioner Filipinas Pre-Fabricated Building
Systems (Filsystems), Inc. is ORDERED to PAY respondent the
equivalent of his salaries and other employment benefits,
computed from October 1, 1999, until the date of the project’s
actual completion. No costs.
SO ORDERED.
[G.R. NO. 157788. March 08, 2005]
SAINT MARY'S UNIVERSITY, represented by its President REV. JESSIE M.
HECHANOVA, CICM,Petitioners, v. COURT OF APPEALS (Former Special
Twelfth Division), NATIONAL LABOR RELATIONS COMMISSION (Second
Division) and MARCELO A. DONELO, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated May 21, 2002 and
the Resolution2 dated February 12, 2003 of the Court of Appeals in CA-G.R. SP
No. 63240 which dismissed the Petition for Certiorari of St. Mary's University and
its motion for reconsideration, respectively.
Respondent Marcelo Donelo started teaching on a contractual basis at St. Mary's
University in 1992. In 1995, he was issued an appointment as an Assistant
Professor I. Later on, he was promoted to Assistant Professor III. He taught until
the first semester of school year 1999-2000 when the school discontinued giving
him teaching assignments. For this, respondent filed a complaint for illegal
dismissal against the university.
In its defense, petitioner St. Mary's University showed that respondent was merely
a part-time instructor and, except for three semesters, carried a load of less than
eighteen units. Petitioner argued that respondent never attained permanent or
regular status for he was not a full-time teacher. Further, petitioner showed that
respondent was under investigation by the university for giving grades to students
who did not attend classes. Petitioner alleged that respondent did not respond to
inquiries relative to the investigation. Instead, respondent filed the instant case
against the university.
The Labor Arbiter ruled that respondent was lawfully dismissed because he had
not attained permanent or regular status pursuant to the Manual of Regulations
for Private Schools. The Labor Arbiter held that only full-time teachers with
regular loads of at least 18 units, who have satisfactorily completed three
consecutive years of service qualify as permanent or regular employees.3
On appeal by respondent, the National Labor Relations Commission (NLRC)
reversed the Decision of the Labor Arbiter and ordered the reinstatement of
respondent without loss of seniority rights and privileges with full backwages
from the time his salaries were withheld until actual reinstatement.4 It held that
respondent was a full-time teacher as he did not appear to have other regular
remunerative employment and was paid on a regular monthly basis regardless of
the number of teaching hours. As a full-time teacher and having taught for more
than 3 years, respondent qualified as a permanent or regular employee of the
university.
Petitioner sought for reconsideration and pointed out that respondent was also
working for the Provincial Government of Nueva Vizcaya from 1993 to 1996.
Nevertheless, the NLRC denied petitioner's Motion for Reconsideration. Aggrieved,
petitioner elevated the matter to the Court of Appeals, which affirmed the
Decision of the NLRC.
Hence, this petition with a motion for temporary restraining order, alleging that
the Court of Appeals erred in:
'FINDING THAT THE RESPONDENT DONELO ATTAINED A PERMANENT
STATUS, THE SAID FINDING BEING CLEARLY CONTRARY TO THE EVIDENCE
AT HAND AND DEVOID OF BASIS IN LAW.
'HOLDING THAT THE TWIN-NOTICE REQUIREMENT IMPOSED BY LAW BEFORE
TERMINATION OF EMPLOYMENT CAN BE LEGALLY EFFECTED MUST BE
COMPLIED WITH BY THE PETITIONER.
'AFFIRMING THE DECISION OF THE NATIONAL LABOR RELATIONS
COMMISSION IN ORDERING THE PETITIONER TO REINSTATE RESPONDENT
DONELO TO HIS FORMER POSITION WITHOUT LOSS OF SENIORITY RIGHTS
AND PRIVILEGES WITH FULL BACKWAGES FROM THE TIME OF HIS
DISMISSAL UNTIL ACTUALLY REINSTATED.5
Plainly, the ultimate questions before us are:
1. Was respondent a full-time teacher? cralawlibrary
2. Had he attained permanent status? cralawlibrary
3. Was he illegally dismissed?
Petitioner contends that respondent did not attain permanent status since he did
not carry a load of at least 18 units for three consecutive years; and that only full-
time teachers can attain permanent status. Further, since respondent was not a
permanent employee, the twin-notice requirement in the termination of the
latter's employment did not apply.
Respondent argues that, as early as 1995, he had a permanent appointment as
Assistant Professor, and he was a permanent employee regardless of the
provisions of the Manual of Regulations for Private Schools. He asserts that he
should not be faulted for not carrying a load of at least 18 units since the
university unilaterally controls his load assignment in the same manner that the
university has the prerogative to shorten his probationary period. He points out
also that the present Manual allows full-time teachers to hold other remunerative
positions as long as these do not conflict with the regular school day. Since he is
a permanent employee, respondent insists that petitioner's failure to give him the
required notices constitutes illegal dismissal.
Section 93 of the 1992 Manual of Regulations for Private Schools, provides that
full-time teachers who have satisfactorily completed their probationary period
shall be considered regular or permanent.6Furthermore, the probationary period
shall not be more than six consecutive regular semesters of satisfactory service
for those in the tertiary level.7 Thus, the following requisites must concur before a
private school teacher acquires permanent status: (1) the teacher is a full-time
teacher; (2) the teacher must have rendered three consecutive years of service;
and (3) such service must have been satisfactory.8
In the present case, petitioner claims that private respondent lacked the requisite
years of service with the university and also the appropriate quality of his
service, i.e., it is less than satisfactory. The basic question, however, is whether
respondent is a full-time teacher.
Section 45 of the 1992 Manual of Regulations for Private Schools provides that
full-time academic personnel are those meeting all the following requirements:
a. Who possess at least the minimum academic qualifications prescribed by the
Department under this Manual for all academic personnel;
b. Who are paid monthly or hourly, based on the regular teaching loads as
provided for in the policies, rules and standards of the Department and the
school;
c. Whose total working day of not more than eight hours a day is devoted to the
school;
d. Who have no other remunerative occupation elsewhere requiring regular hours
of work that will conflict with the working hours in the school; and cralawlibrary
e. Who are not teaching full-time in any other educational institution.
All teaching personnel who do not meet the foregoing qualifications are
considered part-time.
A perusal of the various orders of the then Department of Education, Culture and
Sports prescribing teaching loads shows that the regular full-time load of a
faculty member is in the range of 15 units to 24 units a semester or term,
depending on the courses taught. Part-time instructors carry a load of not more
than 12 units.9
The evidence on record reveals that, except for four non-consecutive terms,
respondent generally carried a load of twelve units or less from 1992 to 1999.
There is also no evidence that he performed other functions for the school when
not teaching. These give the impression that he was merely a part-time
teacher.10 Although this is not conclusive since there are full-time teachers who
are allowed by the university to take fewer load, in this case, respondent did not
show that he belonged to the latter group, even after the university presented his
teaching record. With a teaching load of twelve units or less, he could not claim
he worked for the number of hours daily as prescribed by Section 45 of the
Manual. Furthermore, the records also indubitably show he was employed
elsewhere from 1993 to 1996.
Since there is no showing that respondent worked on a full-time basis for at least
three years, he could not have acquired a permanent status.11 A part-time
employee does not attain permanent status no matter how long he has served the
school.12 And as a part-timer, his services could be terminated by the school
without being held liable for illegal dismissal. Moreover, the requirement of twin-
notice applicable only to regular or permanent employees could not be invoked by
respondent.
Yet, this is not to say that part-time teachers may not have security of tenure. The
school could not lawfully terminate a part-timer before the end of the agreed
period without just cause. But once the period, semester, or term ends, there is
no obligation on the part of the school to renew the contract of employment for
the next period, semester, or term.
In this case, the contract of employment of the respondent was not presented.
However, judicial notice may be taken that contracts of employment of part-time
teachers are generally on a per semester or term basis. In the absence of a
specific agreement on the period of the contract of employment, it is presumed to
be for a term or semester. After the end of each term or semester, the school does
not have any obligation to give teaching load to each and every part-time teacher.
That petitioner did not give any teaching assignment to the respondent during a
given term or semester, even if factually true, did not amount to an actionable
violation of respondent's rights. It did not amount to illegal dismissal of the part-
time teacher.
The law, while protecting the rights of the employees, authorizes neither the
oppression nor destruction of the employer.13 And when the law tilts the scale of
justice in favor of labor, the scale should never be so tilted if the result would be
an injustice to the employer.14
WHEREFORE, the petition is GRANTED. The Decision dated May 21, 2002 and
the Resolution dated February 12, 2003 of the Court of Appeals in CA-G.R. SP No.
63240, which sustained those of the NLRC, are NULLIFIED and SET ASIDE. The
Decision of the Executive Labor Arbiter of the Regional Arbitration Branch II,
Tuguegarao City, Cagayan, is hereby REINSTATED.
SO ORDERED.
[G.R. No. 168052 February 20, 2006]
POSEIDON FISHING/TERRY DE JESUS, petitioners,- versus -
NATIONAL LABOR RELATIONS COMMISSION and JIMMY S.
ESTOQUIA, Respondents.
FACTS: Private respondent was employed by Poseidon Fishing in
January 1988 as Chief Mate. After five years, he was promoted to
Boat Captain. In 1999, petitioners, without reason, demoted
respondent from Boat Captain to Radio Operator of petitioner
Poseidon. As a Radio Operator, he monitored the daily activities in
their office and recorded in the duty logbook the names of the callers
and time of their calls.
On 3 July 2000, private respondent failed to record a 7:25 a.m. call
in one of the logbooks. However, he was able to record the same in
the other logbook. Consequently, when he reviewed the two logbooks,
he noticed that he was not able to record the said call in one of the
logbooks so he immediately recorded the 7:25 a.m. call after the 7:30
a.m. entry. Around 9:00 o’clock in the morning of 4 July 2000,
petitioner Jesus, the manager, detected the error in the entry in the
logbook. Subsequently, she asked private respondent to prepare an
incident report to explain the reason for the said oversight.
At around 2:00 o’clock in the afternoon of that same day, petitioner
Poseidon’s secretary, summoned private respondent to get his
separation pay amounting to Fifty-Five Thousand Pesos (P55,000.00).
However, he refused to accept the amount as he believed that he did
nothing illegal to warrant his immediate discharge from work.
Private respondent then filed a complaint for illegal dismissal with the
Labor Arbiter. He averred that petitioner Poseidon employed him as a
Chief Mate sometime in January 1988. He claimed that he was
promoted to the position of Boat Captain five years after. However, in
1999, he was demoted from Boat Captain to Radio Operator without
any reason and shortly, he was terminated without just cause and
without due process of law.
Conversely, petitioners Poseidon and Terry de Jesus strongly asserted
that private respondent was a contractual or a casual employee
whose services could be terminated at the end of the contract even
without a just or authorized cause in view of Article 280 of the Labor
Code. Petitioners further posited that when the private respondent
was engaged, it was made clear to him that he was being employed
only on a “por viaje” or per trip basis and that his employment would
be terminated at the end of the trip for which he was being hired. As
such, the private respondent could not be entitled to separation pay Even if petitioners’ contention that its industry is seasonal in nature,
and other monetary claims. once a project or work pool employee has been: (1) continuously, as
opposed to intermittently, re-hired by the same employer for the
ISSUE: Whether or not respondent Estoquia is a regular employee of same tasks or nature of tasks; and (2) these tasks are vital, necessary
petitioner. and indispensable to the usual business or trade of the employer,
then the employee must be deemed a regular employee.
HELD: The SC held that the ruling in the Brent case could not apply
in the case at bar. The acid test in considering fixed-term contracts In fine, inasmuch as private respondent’s functions as described
as valid is: if from the circumstances it is apparent that periods have above are no doubt “usually necessary or desirable in the usual
been imposed to preclude acquisition of tenurial security by the business or trade” of petitioner fishing company and he was hired
employee, they should be disregarded for being contrary to public continuously for 12 years for the same nature of tasks, we are
policy. The SC will not hesitate to nullify employment contracts constrained to say that he belongs to the ilk of regular employee.
stipulating a fixed term after finding that the purpose behind these Being one, private respondent’s dismissal without valid cause was
contracts was to evade the application of the labor laws, since this is illegal.
contrary to public policy.
Petition is denied.
Moreover, unlike in the Brent case where the period of the contract
was fixed and clearly stated, note that in the case at bar, the terms of
employment of private respondent as provided in the Kasunduan was
not only vague, it also failed to provide an actual or specific date or
period for the contract. There is nothing in the contract that says
complainant, who happened to be the captain of said vessel, is a
casual, seasonal or a project worker. The date July 1 to 31, 1998
under the heading “Pagdating” had been placed there merely to
indicate the possible date of arrival of the vessel and is not an
indication of the status of employment of the crew of the vessel.

Furthermore, as petitioners themselves admitted in their petition

before this Court, private respondent was repeatedly hired as part of
the boat’s crew and he acted in various capacities onboard the vessel.
The test to determine whether employment is regular or not is the
reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the
employer. And, if the employee has been performing the job for at
least one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not
indispensability of that activity to the business. Ostensibly, in the
case at bar, at different times, private respondent occupied the
position of Chief Mate, Boat Captain, and Radio Operator. The act of
hiring and re-hiring in various capacities is a mere gambit employed
by petitioner to thwart the tenurial protection of private respondent.
Such pattern of re-hiring and the recurring need for his services are
testament to the necessity and indispensability of such services to
petitioners’ business or trade.
 [G.R. NO. 149985 : May 5, 2006]
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,
INC., Petitioner, v. ROSALINA C. ARCEO,* Respondent.
RESOLUTION
On September 3, 1996 or 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.

CORONA, J.:
This is a Petition for Review under Rule 45 of the 1997 Rules of Civil
Procedure assailing the decision1 of the Court of Appeals (CA)
dismissing the petition for certiorari filed by petitioner.
In May 1990, respondent Rosalina Arceo (Arceo) applied for the
position of telephone operator with petitioner Philippine Long
Distance Telephone Company, Inc. - Tarlac Exchange (PLDT). She,
however, failed the pre-employment qualifying examination. Having
failed the test, Arceo requested PLDT to allow her to work at the
On August 18, 1997, labor arbiter Dominador B. Saludares ruled
that Arceo was already qualified to become a regular employee. He
also found that petitioner denied her all the benefits and privileges of
a regular employee. The dispositive portion of his decision read:
WHEREFORE, premises considered, judgment is hereby rendered
declaring respondent guilty of wanton disregard of the right of
herein complainant to become a regular employee.Concomitantly,
respondent is hereby ordered to pay complainant the following
accrued benefits and privileges from May 11, 1993 up to the present:
ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

latter's office even without pay. PLDT agreed and assigned her to its 1. Underpayment -------- P181,395.00
commercial section where she was made to perform various tasks like
photocopying documents, sorting out telephone bills and notices of 2. Overtime pay -------- 2,598.00
disconnection, and other minor assignments and activities. After two
weeks, PLDT decided to pay her the minimum wage. 3. Premium pay -------- 753.00

On February 15, 1991, PLDT saw no further need for Arceo's services 4. Allowance for Uniform -------- 20,000.00
and decided to fire her but, through the intervention of PLDT's
commercial section supervisor, Mrs. Beatriz Mataguihan, she was 5. Cash gift -------- 9,000.00
recommended for an on-the-job training on minor traffic work. When
she failed to assimilate traffic procedures, the company transferred 6. 13th month pay -------- 45,946.17
her to auxiliary services, a minor facility.
7. Mid-year bonus -------- 14,884.57
Subsequently, Arceo took the pre-qualifying exams for the position of
telephone operator two more times but again failed in both attempts. 8. Longevity pay -------- 5, 314.50

9. Sick leave -------- 6,354.30

Finally, on October 13, 1991, PLDT discharged Arceo from
employment. She then filed a case for illegal dismissal before the
10. Rice Subsidy -------- 27,250.00
labor arbiter.2 On May 11, 1993, the arbiter ruled in her favor. PLDT
was ordered to reinstate Arceo to her "former position or to an
11. Zero backlog -------- 2,000.00
equivalent position." This decision became final and executory.
Total P316,496.24
On 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.
Likewise, respondent is hereby ordered to pay attorney's fees in the
sum of P31,649.62 which is equivalent to ten [percent] (10%) of the
amount awarded to complainant.
The claim for damages is dismissed for lack of merit.3 (emphasis
supplied)
The National Labor Relations Commission (NLRC) took cognizance of
the case on appeal. On November 28, 1997, it affirmed the decision of
the labor arbiter only insofar as it found Arceo eligible to become a
regular employee. With respect to her monetary claims, the NLRC
remanded the case to the arbiter for reception of evidence.4 It held:
It is evidently a facetious averment emanating from the respondent
that the complainant should forever remain a casual employee. Not
only is such argument wanting in merit, it clearly goes against the
principle that the conferment of regular status to an employee is by
operation of law. xxx
With respect to the money claims, it is our opinion that the
complainant is not entitled thereto insofar as her claims for 1993 is
concerned for having been filed beyond the three year prescriptive
period. However, as it concerns the claims for the period 1994 to
1996, it is Our view that the complainant is entitled, not only
because it is within the prescriptive period but also on account of the
continuous and unabated violation of the respondent in regard to the
deprivation to the complainant not only of her rightful status as a
regular employee but more particularly to the grant of the
appropriate salaries and benefits.5
PLDT sought a reconsideration of the decision but the NLRC rejected
it for lack of merit.
Rebuffed, PLDT went to the CA via a petition for certiorari 6 and
ascribed grave abuse of discretion on the part of the NLRC for
considering Arceo a regular employee by operation of law.
On June 29, 2001, the CA affirmed the contested decision of the
NLRC. It held:
xxx It is doctrinaire that in determining what constitutes regular
employment, what is considered [as] the reasonable connection
between the particular activity performed by the employee in
relation to the usual business or trade of the employer, i.e. if the
work is usually necessary or desirable in the usual business or
trade of the employer. xxx And even granting the argument of
petitioner that the nature of Arceo's work is casual or temporary,
still she had been converted into a regular employee by virtue of
the proviso in the second paragraph of Article 280 for having
worked with PLDT for more than one (1) year.7 (emphasis supplied)
The CA likewise denied PLDT's motion for reconsideration. Hence,
this petition.
PLDT argues that while Article 280 of the Labor Code "regularizes" a
casual employee who has rendered at least one year of service
(whether continuous or broken) the proviso is subject to the condition
that the employment subsists or the position still exists. Even if
Arceo had rendered more than one year of service as a casual
employee, PLDT insisted that this fact alone would not automatically
make her a regular employee since her position had long been
abolished. PLDT also argues that it would be an even greater error if
Arceo were to be "regularized" as a telephone operator since she
repeatedly failed the qualifying exams for that position.
Thus, the main issue in this case: is Arceo eligible to become a
regular employee of PLDT? Yes.
Article 280 of the Labor Code, as amended, 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, 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 engagement
of the employee or where the work or services to be performed is
seasonal in nature and 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. (emphasis
ours)
Under the foregoing provision, a regular employee is (1) one who is WHEREFORE, this petition is DENIED.
either engaged to perform activities that are necessary or desirable in
the usual trade or business of the employer or (2) a casual employee Costs against petitioner.
who has rendered at least one year of service, whether continuous or
broken, with respect to the activity in which he is employed. SO ORDERED.

Under the first criterion, respondent is qualified to be a regular

employee. Her work, consisting mainly of photocopying documents,
sorting out telephone bills and disconnection notices, was certainly
"necessary or desirable" to the business of PLDT. But even if the
contrary were true, the uncontested fact is that she rendered service
for more than one year as a casual employee. Hence, under the
second criterion, she is still eligible to become a regular employee.

Petitioner'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.

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 Article 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.

From what date will she be entitled to the benefits of a regular

employee? 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.

PLDT's other contention that the "regularization" of respondent as

telephone operator was not possible since she failed in three
qualifying exams for that position is also untenable. It is understood
that she will be regularized in the position she held prior to the filing
of her complaint with the labor arbiter, or, if that position was
already abolished, to an equivalent position. The position of telephone
operator was never even considered in any of the assailed decisions of
the labor arbiter, the NLRC or the CA.
FULACHE vs ABS-CBN BROADCASTING
CORPORATION Case Digest
FARLEY FULACHE, MANOLO JABONERO, DAVID
CASTILLO, JEFFREY LAGUNZAD, MAGDALENA
MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY
PONCE and ALAN C. ALMENDRAS, Petitioners, vs
ABS-CBN BROADCASTING
CORPORATION, Respondent
G.R. No. 183810 January 21, 2010
FACTS:
The petitioners in this case are questioning the CBA
executed between ABS-CBN and the ABS-CBN Rank-and-
File Employees Union (Union) because under such
agreement, they are only considered as temporary and
not regular employees. The petitioners claimed that they
should be recognized as regular employees of ABS-CBN
because they had already rendered more than a year of
service in the company and, therefore, entitled to the
benefits of a regular employee.
Instead of salaries, ABS-CBN pointed out that talents are
paid a pre-arranged consideration called “talent fee” taken
from the budget of a particular program and subject to a
ten percent (10%) withholding tax. Talents do not
undergo probation. Their services are engaged for a
specific program or production, or a segment
thereof. Their contracts are terminated once the
program, production or segment is completed.
ABS-CBN alleged that the petitioners’ services were
contracted on various dates by its Cebu station as
independent contractors/off camera talents, and they
were not entitled to regularization in these capacities.
Labor Arbiter Rendoque rendered his decision holding
that the petitioners were regular employees of ABS-CBN,
not independent contractors, and are entitled to the
benefits and privileges of regular employees
ABS-CBN appealed the ruling to the National Labor
Relations Commission (NLRC) Fourth Division, mainly
contending that the petitioners were independent
contractors, not regular employees.
While the appeal of the regularization case was pending,
ABS-CBN dismissed Fulache, Jabonero, Castillo,
Lagunzad and Atinen (all drivers) for their refusal to sign
up contracts of employment with service contractor Able
Services. The four drivers and Atinen responded by filing
a complaint for illegal dismissal.
The Labor Arbiter Rendoque upheld the validity of ABS-
CBN's contracting out of certain work or services in its
operations. The labor arbiter found that petitioners
Fulache, Jabonero, Castillo, Lagunzad and Atinen had
been dismissed due to redundancy, an authorized cause
under the law.
The NLRC reversed the labor arbiter’s ruling in the illegal
dismissal case; it found that petitioners Fulache,
Jabonero, Castillo, Lagunzad and Atinen had been
illegally dismissed and awarded them backwages and
separation pay in lieu of reinstatement. Under both cases,
the petitioners were awarded CBA benefits and privileges
from the time they became regular employees up to the
time of their dismissal.
The NLRC resolved the motions for reconsideration on by
both parties, thus, on the regularization issue, the NLRC
stood by the ruling that the petitioners were regular
employees entitled to the benefits and privileges of regular
employees. On the illegal dismissal case, the petitioners,
while recognized as regular employees, were declared
dismissed due to redundancy. The NLRC denied the
petitioners’ second motion for reconsideration in its order
of May 31, 2006 for being a prohibited pleading.
ISSUE:
WON the petitioners are correct that they should be
considered already as regular employees
WON Fulache and the other petitioners were dismissed
illegally
RULING:
1. As regular employees, the petitioners fall within the
coverage of the bargaining unit and are therefore entitled
to CBA benefits as a matter of law and contract.
employees. Most importantly, the labor arbiter’s decision
of January 17, 2002 – affirmed all the way up to the CA
level – ruled against ABS-CBN’s submission that they are
independent contractors. Thus, as regular rank-and-file
employees, they fall within CBA coverage under the CBA’s
express terms and are entitled to its benefits.
2. Their dismissal was not only unjust and in bad faith as
the above discussions abundantly show. The bad faith in
ABS-CBN’s move toward its illegitimate goal was not even
hidden; it dismissed the petitioners – already recognized
as regular employees – for refusing to sign up with its
service contractor. Thus, from every perspective, the
petitioners were illegally dismissed.

Section 1. APPROPRIATE BARGAINING UNIT. – By law, illegally dismissed employees are entitled to
The parties agree that the appropriate bargaining unit reinstatement without loss of seniority rights and other
shall be regular rank-and-file employees of ABS-CBN privileges and to full backwages, inclusive of allowances,
BROADCASTING CORPORATION but shall not include: and to other benefits or their monetary equivalent from
the time their compensation was withheld from them
a) Personnel classified as Supervisor and Confidential
employees;
b) Personnel who are on “casual” or “probationary” status
as defined in Section 2 hereof;
c) Personnel who are on “contract” status or who are paid
for specified units of work such as writer-producers,
talent-artists, and singers.

The inclusion or exclusion of new job classifications into

the bargaining unit shall be subject of discussion between
the COMPANY and the UNION.

Under these terms, the petitioners are members of the

appropriate bargaining unit because they are regular
rank-and-file employees and do not belong to any of the
excluded categories. Specifically, nothing in the records
shows that they are supervisory or confidential
employees; neither are they casual nor probationary

G.R. No. 170351, March 30, 2011
LEYTE GEOTHERMAL POWER PROGRESSIVE
EMPLOYEES UNION – ALU – TUCP, Petitioner,
vs.
PHILIPPINE NATIONAL OIL COMPANY – ENERGY
DEVELOPMENT CORPORATION, Respondent.
FACTS: Respondent is a GOCC while petitioner is a
legitimate labor organization. Among [respondent’s]
geothermal projects is the Leyte Geothermal Power
Project located at the Greater Tongonan
Geothermal Reservation in Leyte. Thus, the
[respondent] hired and employed hundreds of
employees on a contractual basis, whereby, their
employment was only good up to the completion or
termination of the project and would automatically
expire upon the completion of such project.
Majority of the employees hired by [respondent] in
its Leyte Geothermal Power Projects had become
members of petitioner. In view of that
circumstance, the petitioner demands from the
[respondent] for recognition of it as the collective
bargaining agent of said employees and for a CBA
negotiation with it. However, the [respondent] did
not heed such demands of the petitioner. Sometime
in 1998 when the project was about to be
completed, the [respondent] proceeded to serve
Notices of Termination of Employment upon the
employees who are members of the petitioner.
On December 28, 1998, the petitioner filed a Notice
of Strike with DOLE against the [respondent] on
the ground of purported commission by the latter
of unfair labor practice for “refusal to bargain
collectively, union busting and mass termination.”
On the same day, the petitioner declared a strike
and staged such strike.
Secretary of Labor intervened and ordered all
workers to return to work. However, petitioner did
not abide.
NLRC: ruled that the employees are PROJECT
EMPLOYEES, and the strike as ILLEGAL
Petitioner Union contends that its officers and
members performed activities that were usually
necessary and desirable to respondent’s usual
business.
ISSUE: WON they are project employees
HELD: They are PROJECT EMPLOYEES
Article 280 of the Labor Code contemplates four (4)
kinds of employees:
(a) regular employees or those who have been
“engaged to perform activities which are usually
necessary or desirable in the usual business or
trade of the employer”;
(b) project employees or those “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”;
(c) seasonal employees or those who work or
perform services which are seasonal in nature, and
the employment is for the duration of the season;
and
(d) casual employees or those who are not regular,
project, or seasonal employees.
Jurisprudence has added a fifth kind— a fixed-
term employee.
By entering into such a contract, an employee is
deemed to understand that his employment is
coterminous with the project. He may not expect to
be employed continuously beyond the completion
of the project. It is of judicial notice that project
employees engaged for manual services or those for
special skills like those of carpenters or masons,
are, as a rule, unschooled. However, this fact alone
is not a valid reason for bestowing special
treatment on them or for invalidating a contract of
employment. Project employment contracts are not
lopsided agreements in favor of only one party
thereto. The employer’s interest is equally
important as that of the employee[s’] for theirs is
the interest that propels economic activity. While it
may be true that it is the employer who drafts
project employment contracts with its business
interest as overriding consideration, such contracts
do not, of necessity, prejudice the employee.
Neither is the employee left helpless by a
prejudicial employment contract. After all, under
the law, the interest of the worker is paramount.
Union’s own admission, both parties had executed
the contracts freely and voluntarily without force,
duress or acts tending to vitiate the worker[s’]
consent. Thus, we see no reason not to honor and
give effect to the terms and conditions stipulated
therein.
The litmus test to determine whether an individual
is a project employee lies in setting a fixed period of
employment involving a specific undertaking which
completion or termination has been determined at
the time of the particular employee’s engagement.
NOTES:
WHAT IS A PROJECT? In the realm of business
and industry, we note that “project” could refer to
one or the other of at least two (2) distinguishable
types of activities. Firstly, a project could refer to a
particular job or undertaking that is within the
regular or usual business of the employer
company, but which is distinct and separate, and
identifiable as such, from the other undertakings of
the company. Such job or undertaking begins and
ends at determined or determinable times. The
typical example of this first type of project is a
particular construction job or project of a
construction company. A construction company
ordinarily carries out two or more [distinct]
identifiable construction projects: e.g., a twenty-
five-storey hotel in Makati; a residential
condominium building in Baguio City; and a
domestic air terminal in Iloilo City. Employees who
are hired for the carrying out of one of these
separate projects, the scope and duration of which
has been determined and made known to the
employees at the time of employment, are properly
treated as “project employees,” and their services
may be lawfully terminated at completion of the
project.
The term “project” could also refer to, secondly, a
particular job or undertaking that is not within the
regular business of the corporation. Such a job or
undertaking must also be identifiably separate and
distinct from the ordinary or regular business
operations of the employer. The job or undertaking
also begins and ends at determined or
determinable times.
G.R. No. 192394 July 3, 2013
ROY D. P ASOS, Petitioner,
vs.
PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION, Respondent.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as amended, assailing the March
26, 2010 Decision1 and May 26, 2010 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 107805. The appellate court had
affirmed the Decision3 of the National Labor Relations
Commission (NLRC) dismissing the illegal dismissal complaint
filed by petitioner Roy D. Pasos against respondent Philippine
National Construction Corporation (PNCC).
The antecedent facts follow:
Petitioner Roy D. Pasos started working for respondent PNCC on
April 26, 1996. Based on the PNCC's "Personnel Action Form
Appointment for Project Employment" dated April 30,
1996,4 petitioner was designated as "Clerk II (Accounting)" and
was assigned to the "NAIA – II Project." It was likewise stated
therein:
PARTICULARS: Project employment starting on April 26, 1996 to
July 25, 1996. This contract maybe terminated at anytime for
cause as provided for by law and/or existing Company Policy. This
maybe terminated if services are unsatisfactory, or when it shall
no longer needed, as determined by the Company. If services are
still needed beyond the validity of this contract, the Company
shall extend your services. After services are terminated, the
employee shall be under no obligation to re-employ with the
Company nor shall the Company be obliged to re-employ the
employee.5 (Emphasis supplied.)
Petitioner’s employment, however, did not end on July 25, 1996
but was extended until August 4, 1998, or more than two years
later, based on the "Personnel Action Form – Project Employment"
dated July 7, 1998.6
Based on PNCC’s "Appointment for Project Employment" dated
November 11, 1998,7 petitioner was rehired on even date as
"Accounting Clerk (Reliever)" and assigned to the "PCSO – Q.I.
Project." It was stated therein that his employment shall end on
February 11, 1999 and may be terminated for cause or in
accordance with the provisions of Article 282 of the Labor Code,
as amended. However, said employment did not actually end on
February 11, 1999 but was extended until February 19, 1999
based on the "Personnel Action Form-Project Employment" dated
February 17, 1999.8
On February 23, 1999, petitioner was again hired by PNCC as
"Accounting Clerk" and was assigned to the "SM-Project" based on
the "Appointment for Project Employment" dated February 18,
1999.9 It did not specify the date when his employment will end
but it was stated therein that it will be "co-terminus with the
completion of the project." Said employment supposedly ended on
August 19, 1999 per "Personnel Action Form – Project
Employment" dated August 18, 1999,10 where it was stated,
"termination of petitioner’s project employment due to completion
of assigned phase/stage of work or project effective at the close of
office hours on 19 August 1999." However, it appears that said
employment was extended per "Appointment for Project
employment" dated August 20, 199911 as petitioner was again
appointed as "Accounting Clerk" for "SM Project (Package II)." It
did not state a specific date up to when his extended employment
will be, but it provided that it will be "co-terminus with the x x x
project." In "Personnel Action Form – Project Employment" dated
October 17, 2000,12 it appears that such extension would
eventually end on October 19, 2000.
Despite the termination of his employment on October 19, 2000,
petitioner claims that his superior instructed him to report for
work the following day, intimating to him that he will again be
employed for the succeeding SM projects. For purposes of
reemployment, he then underwent a medical examination which
allegedly revealed that he had pneumonitis. Petitioner was advised
by PNCC’s physician, Dr. Arthur C. Obena, to take a 14-day sick
leave.
On November 27, 2000, after serving his sick leave, petitioner
claims that he was again referred for medical examination where
it was revealed that he contracted Koch’s disease. He was then
required to take a 60-day leave of absence.13 The following day, he
submitted his application for sick leave but PNCC’s Project
Personnel Officer, Mr. R.S. Sanchez, told him that he was not
entitled to sick leave because he was not a regular employee.
Petitioner still served a 60-day sick leave and underwent another
medical examination on February 16, 2001. He was then given a
clean bill of health and was given a medical clearance by Dr.
Obena that he was fit to work.
Petitioner claims that after he presented his medical clearance to
the Project Personnel Officer on even date, he was informed that
his services were already terminated on October 19, 2000 and he
was already replaced due to expiration of his contract. This
prompted petitioner on February 18, 2003 to file a complaint14 for
illegal dismissal against PNCC with a prayer for reinstatement and
back wages. He argued that he is deemed a regular employee of
PNCC due to his prolonged employment as a project employee as
well as the failure on the part of PNCC to report his termination
every time a project is completed. He further contended that his
termination without the benefit of an administrative investigation
was tantamount to an illegal dismissal.
PNCC countered that petitioner was hired as a project employee in
several projects with specific dates of engagement and termination
and had full knowledge and consent that his appointment was
only for the duration of each project. It further contended that it
had sufficiently complied with the reportorial requirements to the
Department of Labor and Employment (DOLE). It submitted
photocopies of three Establishment Termination Reports it
purportedly filed with the DOLE. They were for: (1) the "PCSOQ.I.
Project" for February 1999;15 (2) "SM Project" for August
1999;16 and (3) "SM Project" for October 2000,17 all of which
included petitioner as among the affected employees. The
submission of termination reports by PNCC was however disputed
by petitioner based on the verifications18 issued by the DOLE NCR
office that he was not among the affected employees listed in the
reports filed by PNCC in August 1998, February 1999, August
1999 and October 2000.
On March 28, 2006, the Labor Arbiter rendered a Decision19 in
favor of petitioner. The fallo reads:
WHEREFORE, premises considered, the complainant had attained
regular employment thereby making his termination from
employment illegal since it was not for any valid or authorized
causes. Consequently, Respondent is ordered to pay complainant
his full backwages less six (6) months computed as follows:
Backwages:
Feb. 18, 2000 – March 28, 2006 = 73.33 mos.
₱6,277.00 x 73.33 = ₱460,292.41
Less:
₱6,277.00 X 6 mos. = 37,662.00
₱422,630.41
The reinstatement could not as well be ordered due to the strained
relations between the parties, that in lieu thereof, separation pay
is ordered paid to complainant in the amount of ₱37,662.00
[₱6,277.00 x 6].
SO ORDERED.20
The Labor Arbiter ruled that petitioner attained regular
employment status with the repeated hiring and rehiring of his
services more so when the services he was made to render were
usual and necessary to PNCC’s business. The Labor Arbiter
likewise found that from the time petitioner was hired in 1996
until he was terminated, he was hired and rehired by PNCC and
made to work not only in the project he had signed to work on but
on other projects as well, indicating that he is in fact a regular
employee. He also noted petitioner’s subsequent contracts did not
anymore indicate the date of completion of the contract and the
fact that his first contract was extended way beyond the supposed
completion date. According to the Labor Arbiter, these
circumstances indicate that the employment is no longer a project
employment but has graduated into a regular one. Having
attained regular status, the Labor Arbiter ruled that petitioner
should have been accorded his right to security of tenure.
Both PNCC and petitioner appealed the Labor Arbiter’s decision.
PNCC insisted that petitioner was just a project employee and his
termination was brought about by the completion of the contract
and therefore he was not illegally dismissed. Petitioner, on the
other hand, argued that his reinstatement should have been
ordered by the Labor Arbiter since there was no proof that there
were strained relations between the parties. He also questioned
the deduction of six months pay from the back wages awarded to
him and the failure of the Labor Arbiter to award him damages
and attorney’s fees. Petitioner likewise moved to dismiss PNCC’s
appeal contending that the supersedeas bond in the amount of
₱422,630.41 filed by the latter was insufficient considering that
the Labor Arbiter’s monetary award is ₱460,292.41. He also
argued that the person who verified the appeal, Felix M. Erece,
Jr., Personnel Services Department Head of PNCC, has no
authority to file the same for and in behalf of PNCC.
On October 31, 2008, the NLRC rendered its Decision granting
PNCC’s appeal but dismissing that of petitioner. The dispositive
portion reads:
WHEREFORE, premises considered, the appeal of respondent is
GRANTED and the Decision dated 28 March 2006 is REVERSED
and SET ASIDE.
A new Decision is hereby issued ordering respondent Philippine
National Construction Corporation to pay completion bonus to
complainant Roy Domingo Pasos in the amount of ₱25,000.
Complainant’s appeal is DISMISSED for lack of merit.
SO ORDERED.21
As to the procedural issues raised by petitioner, the NLRC ruled
that there was substantial compliance with the requirement of an
appeal bond and that Mr. Erece, Jr., as head of the Personnel
Services Department, is the proper person to represent PNCC. As
to the substantive issues, the NLRC found that petitioner was
employed in connection with certain construction projects and his
employment was co-terminus with each project as evidenced by
the Personnel Action Forms and the Termination Report
submitted to the DOLE. It likewise noted the presence of the
following project employment indicators in the instant case,
namely, the duration of the project for which petitioner was
engaged was determinable and expected completion was known to
petitioner; the specific service that petitioner rendered in the
projects was that of an accounting clerk and that was made clear
to him and the service was connected with the projects; and PNCC
submitted termination reports to the DOLE and petitioner’s name
was included in the list of affected employees.
Petitioner elevated the case to the CA via a petition for certiorari
but the appellate court dismissed the same for lack of merit.
Hence this petition. Petitioner argues that the CA erred when it:
I.
SUSTAINED THAT THE AMOUNT OF THE BOND POSTED BY
THE RESPONDENTS FOR PURPOSES OF APPEAL WAS
SUFFICIENT NOTWITHSTANDING THAT THE SAME IS LESS
THAN THE ADJUDGED AMOUNT.
II.
SUSTAINED THAT FELIX M. ERECE, JR., HEAD OF
RESPONDENT PNCC’S PERSONNEL SERVICE DEPARTMENT, IS
DULY AUTHORIZED TO REPRESENT RESPONDENT IN THIS
CASE NOTWITHSTANDING THE ABSENCE OF ANY BOARD
RESOLUTION OR SECRETARY’S CERTIFICATE OF THE
RESPONDENT STATING THAT INDEED HE WAS DULY
AUTHORIZED TO INSTITUTE THESE PROCEEDINGS.
III.
SUSTAINED THAT PETITIONER WAS A PROJECT EMPLOYEE
DESPITE THE FACT THAT RESPONDENT PNCC HAD NOT
SUBMITTED THE REQUISITE TERMINATION REPORTS IN ALL
OF THE ALLEGED PROJECTS WHERE THE PETITIONER WAS
ASSIGNED.
IV.
SUSTAINED THAT THE PETITIONER IS A PROJECT EMPLOYEE
DESPITE THE CIRCUMSTANCE THAT THE ACTUAL WORK
UNDERTAKEN BY THE PETITIONER WAS NOT LIMITED TO THE
WORK DESCRIBED IN HIS ALLEGED APPOINTMENT AS A
PROJECT EMPLOYEE.
V.
FAILED TO FIND THAT AT SOME TIME, THE EMPLOYMENT OF
THE PETITIONER WAS UNREASONABLY EXTENDED BEYOND
THE DATE OF ITS COMPLETION AND AT OTHER TIMES THE
SAME DID NOT BEAR A DATE OF COMPLETION OR THAT THE
SAME WAS READILY DETERMINABLE AT THE TIME OF
PETITIONER’S ENGAGEMENT THEREBY INDICATING THAT HE
WAS NOT HIRED AS A PROJECT EMPLOYEE.
VI.
FAILED TO ORDER THE REINSTATEMENT OF THE PETITIONER
BY FINDING THAT THERE WAS STRAINED RELATIONS
BETWEEN THE PARTIES NOTWITHSTANDING THAT THE
RESPONDENT NEVER EVEN ALLEGED NOR PROVED IN ITS
PLEADINGS THE CIRCUMSTANCE OF STRAINED RELATIONS.
VII.
SUSTAINED THE FAILURE OF THE NATIONAL LABOR
RELATIONS COMMISSION TO RECTIFY THE ERROR
COMMITTED BY LABOR ARBITER LIBO-ON IN DEDUCTING THE
EQUIVALENT OF SIX MONTHS PAY OF BACKWAGES DESPITE
THE MANDATE OF THE LABOR CODE THAT WHEN THERE IS A
FINDING OF ILLEGAL DISMISSAL, THE PAYMENT OF FULL
BACKWAGES FROM DATE OF DIMISSAL UP TO ACTUAL
REINSTATEMENT SHOULD BE AWARDED.
VIII.
SUSTAINED THE FAILURE OF THE NATIONAL LABOR
RELATIONS COMMISSION TO RECTIFY THE ERROR
COMMITTED BY LABOR ARBITER LIBO-ON IN FAILING TO
AWARD DAMAGES AND ATTORNEY’S FEES TO THE
PETITIONER.22
Petitioner contends that PNCC’s appeal from the Labor Arbiter’s
decision should not have been allowed since the appeal bond filed
was insufficient. He likewise argues that the appellate court erred
in heavily relying in the case of Cagayan Valley Drug Corporation
v. Commissioner of Internal Revenue23 which enumerated the
officials and employees who can sign the verification and
certification without need of a board resolution. He contends that
in said case, there was substantial compliance with the
requirement since a board resolution was submitted albeit
belatedly unlike in the instant case where no board resolution was
ever submitted even belatedly.
As to the substantive issue, petitioner submits that the CA
erroneously concluded that he was a project employee when there
are indicators which point otherwise. He contends that even if he
was just hired for the NAIA 2 Project from April 26, 1996 to July
25, 1996, he was made to work until August 4, 1998. He also
avers the DOLE had certified that he was not among the
employees listed in the termination reports submitted by PNCC
which belies the photocopies of termination reports attached by
PNCC to its pleadings listing petitioner as one of the affected
employees. Petitioner points out that said termination reports
attached to PNCC’s pleadings are mere photocopies and were not
even certified by the DOLE-NCR as true copies of the originals on
file with said office. Further, he argues that in violation of the
requirement of Department Order No. 19 that the duration of the
project employment is reasonably determinable, his contracts for
the SM projects did not specify the date of completion of the
project nor was the completion determinable at the time that
petitioner was hired.
PNCC counters that documentary evidence would show that
petitioner was clearly a project employee and remained as such
until his last engagement. It argues that the repeated rehiring of
petitioner as accounting clerk in different projects did not make
him a regular employee. It also insists that it complied with the
reportorial requirements and that it filed and reported the
termination of petitioner upon every completion of project to
which he was employed.
In sum, three main issues are presented before this Court for
resolution: (1) Should an appeal be dismissed outright if the
appeal bond filed is less than the adjudged amount? (2) Can the
head of the personnel department sign the verification and
certification on behalf of the corporation sans any board
resolution or secretary’s certificate authorizing such officer to do
the same? and (3) Is petitioner a regular employee and not a mere
project employee and thus can only be dismissed for cause?
Substantial compliance with appeal
bond requirement
The perfection of an appeal within the reglementary period and in
the manner prescribed by law is jurisdictional, and
noncompliance with such legal requirement is fatal and effectively
renders the judgment final and executory. As provided in Article
223 of the Labor Code, as amended, in case of a judgment
involving a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in
the judgment appealed from.
However, not only in one case has this Court relaxed this
requirement in order to bring about the immediate and
appropriate resolution of cases on the merits.24 In Quiambao v.
National Labor Relations Commission,25 this Court allowed the
relaxation of the requirement when there is substantial
compliance with the rule. Likewise, in Ong v. Court of
Appeals,26 the Court held that the bond requirement on appeals
may be relaxed when there is substantial compliance with the
Rules of Procedure of the NLRC or when the appellant shows
willingness to post a partial bond. The Court held that "while the
bond requirement on appeals involving monetary awards has been
relaxed in certain cases, this can only be done where there was
substantial compliance of the Rules or where the appellants, at
the very least, exhibited willingness to pay by posting a partial
bond."
In the instant case, the Labor Arbiter in his decision ordered
PNCC to pay petitioner back wages amounting to ₱422,630.41
and separation pay of ₱37,662 or a total of ₱460,292.41. When
PNCC filed an appeal bond amounting to ₱422,630.41 or at least
90% of the adjudged amount, there is no question that this is
substantial compliance with the requirement that allows
relaxation of the rules.
Validity of the verification and
certification signed by a corporate
officer on behalf of the corporation
without the requisite board
resolution or secretary’s certificate
It has been the constant holding of this Court in cases instituted
by corporations that an individual corporate officer cannot
exercise any corporate power pertaining to the corporation
without authority from the board of directors pursuant to Section
23, in relation to Section 25 of the Corporation Code which clearly
enunciates that all corporate powers are exercised, all business
conducted, and all properties controlled by the board of directors.
However, we have in many cases recognized the authority of some
corporate officers to sign the verification and certification against
forum-shopping. Some of these cases were enumerated in
Cagayan Valley Drug Corporation v. Commissioner of Internal
Revenue27 which was cited by the appellate court:
In Mactan-Cebu International Airport Authority v. CA, we
recognized the authority of a general manager or acting general
manager to sign the verification and certificate against forum
shopping; in Pfizer v. Galan, we upheld the validity of a
verification signed by an "employment specialist" who had not
even presented any proof of her authority to represent the
company; in Novelty Philippines, Inc. v. CA, we ruled that a
personnel officer who signed the petition but did not attach the
authority from the company is authorized to sign the verification
and non-forum shopping certificate; and in Lepanto Consolidated
Mining Company v. WMC Resources International Pty. Ltd.
(Lepanto), we ruled that the Chairperson of the Board and
President of the Company can sign the verification and certificate
against non-forum shopping even without the submission of the
board’s authorization.
In sum, we have held that the following officials or employees of
the company can sign the verification and certification without
need of a board resolution: (1) the Chairperson of the Board of
Directors, (2) the President of a corporation, (3) the General
Manager or Acting General Manager, (4) Personnel Officer, and (5)
an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of
authorized signatories to the verification and certification required
by the rules, the determination of the sufficiency of the authority
was done on a case to case basis. The rationale applied in the
foregoing cases is to justify the authority of corporate officers or
representatives of the corporation to sign the verification or
certificate against forum shopping, being "in a position to verify
the truthfulness and correctness of the allegations in the
petition."28 (Citations omitted.)
While we agree with petitioner that in Cagayan Valley, the
requisite board resolution was submitted though belatedly unlike
in the instant case, this Court still recognizes the authority of Mr.
Erece, Jr. to sign the verification and certification on behalf of
PNCC sans a board resolution or secretary’s certificate as we have
allowed in Pfizer, Inc. v. Galan,29 one of the cases cited in Cagayan
Valley. In Pfizer, the Court ruled as valid the verification signed by
an employment specialist as she was in a position to verify the
truthfulness and correctness of the allegations in the
petition30 despite the fact that no board resolution authorizing her
was ever submitted by Pfizer, Inc. even belatedly. We believe that
like the employment specialist in Pfizer, Mr. Erece, Jr. too, as
head of the Personnel Services Department of PNCC, was in a
position to assure that the allegations in the pleading have been
prepared in good faith and are true and correct.
Even assuming that the verification in the appeal filed by PNCC is
defective, it is well settled that rules of procedure in labor cases
maybe relaxed. As provided in Article 221 of the Labor Code, as
amended, "rules of evidence prevailing in courts of law or equity
shall not be controlling and it is the spirit and intention of this
Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due
process." Moreover, the requirement of verification is merely
formal and not jurisdictional. As held in Pacquing v. Coca-Cola
Philippines, Inc.31:
As to the defective verification in the appeal memorandum before
the NLRC, the same liberality applies. After all, the requirement
regarding verification of a pleading is formal, not jurisdictional.
Such requirement is simply a condition affecting the form of
pleading, the noncompliance of which does not necessarily render
the pleading fatally defective. Verification is simply intended to
secure an assurance that the allegations in the pleading are true
and correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith. The court
or tribunal may order the correction of the pleading if verification
is lacking or act on the pleading although it is not verified, if the
attending circumstances are such that strict compliance with the
rules may be dispensed with in order that the ends of justice may
thereby be served.32
Duration of project employment
should be determined at the time of
hiring
In the instant case, the appointments issued to petitioner
indicated that he was hired for specific projects. This Court is
convinced however that although he started as a project
employee, he eventually became a regular employee of PNCC.
Under Article 280 of the Labor Code, as amended, 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." Thus, the
principal test used to determine whether employees are project
employees is whether or not the employees were assigned to carry
out a specific project or undertaking, the duration or scope of
which was specified at the time the employees were engaged for
that project.33
In the case at bar, petitioner worked continuously for more than
two years after the supposed three-month duration of his project
employment for the NAIA II Project. While his appointment for
said project allowed such extension since it specifically provided
that in case his "services are still needed beyond the validity of the
contract, the Company shall extend his services," there was no
subsequent contract or appointment that specified a particular
duration for the extension. His services were just extended
indefinitely until "Personnel Action Form – Project Employment"
dated July 7, 1998 was issued to him which provided that his
employment will end a few weeks later or on August 4, 1998.
While for first three months, petitioner can be considered a project
employee of PNCC, his employment thereafter, when his services
were extended without any specification of as to the duration,
made him a regular employee of PNCC. And his status as a
regular employee was not affected by the fact that he was
assigned to several other projects and there were intervals in
between said projects since he enjoys security of tenure.
Failure of an employer to file
termination reports after every
project completion proves that an
employee is not a project employee
As a rule, the findings of fact of the CA are final and conclusive
and this Court will not review them on appeal.34 The rule,
however, is subject to the following exceptions:
The jurisdiction of the Court in cases brought before it from the
appellate court is limited to reviewing errors of law, and findings
of fact of the Court of Appeals are conclusive upon the Court since
it is not the Court’s function to analyze and weigh the evidence all
over again. Nevertheless, in several cases, the Court enumerated
the exceptions to the rule that factual findings of the Court of
Appeals are binding on the Court: (1) when the findings are
grounded entirely on speculations, surmises or conjectures; (2)
when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4) when
the judgment is based on a misapprehension of facts; (5) when the
findings of fact are conflicting; (6) when in making its findings the
Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and
the appellee; (7) when the findings are contrary to that of the trial
court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioner’s main and reply
briefs are not disputed by the respondent; (10) when the findings
of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or (11) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed
by the parties, which, if properly considered, would justify a
different conclusion.35
In this case, records clearly show that PNCC did not report the
termination of petitioner’s supposed project employment for the
NAIA II Project to the DOLE. Department Order No. 19, or the
"Guidelines Governing the Employment of Workers in the
Construction Industry," requires employers to submit a report of
an employee’s termination to the nearest public employment office
every time an employee’s employment is terminated due to a
completion of a project. PNCC submitted as evidence of its
compliance with the requirement supposed photocopies of its
termination reports, each listing petitioner as among the
employees affected. Unfortunately, none of the reports submitted
pertain to the NAIA II Project. Moreover, DOLE NCR verified that
petitioner is not included in the list of affected workers based on
the termination reports filed by PNCC on August 11, 17, 20 and
24, 1998 for petitioner’s supposed dismissal from the NAIA II
Project effective August 4, 1998. This certification from DOLE was
not refuted by PNCC. In Tomas Lao Construction v. NLRC,36 we
emphasized the indispensability of the reportorial requirement:
Moreover, if private respondents were indeed employed as "project
employees," petitioners should have submitted a report of
termination to the nearest public employment office every time
their employment was terminated due to completion of each
construction project. The records show that they did not. Policy
Instruction No. 20 is explicit that employers of project employees
are exempted from the clearance requirement but not from the
submission of termination report. We have consistently held that
failure of the employer to file termination reports after every
project completion proves that the employees are not project
employees. Nowhere in the New Labor Code is it provided that the
reportorial requirement is dispensed with. The fact is that
Department Order No. 19 superseding Policy Instruction No. 20
expressly provides that the report of termination is one of the
indicators of project employment.37
A regular employee dismissed for a
cause other than the just or
authorized causes provided by law is
illegally dismissed
Petitioner’s regular employment was terminated by PNCC due to
contract expiration or project completion, which are both not
among the just or authorized causes provided in the Labor Code,
as amended, for dismissing a regular employee. Thus, petitioner
was illegally dismissed.
Article 279 of the Labor Code, as amended, provides that an
illegally dismissed employee is entitled to reinstatement, full back
wages, inclusive of allowances, and to his other benefits or their
monetary equivalent from the time his compensation was withheld
from him up to the time of his actual reinstatement.
We agree with petitioner that there was no basis for the Labor
Arbiter’s finding of strained relations and order of separation pay
in lieu of reinstatement. This was neither alleged nor proved.
Moreover, it has long been settled that the doctrine of strained
relations should be strictly applied so as not to deprive an illegally
dismissed employee of his right to reinstatement. As held in
Globe-Mackay Cable and Radio Corporation v. NLRC:38
Obviously, the principle of "strained relations" cannot be applied
indiscriminately. Otherwise, reinstatement can never be possible
simply because some hostility is invariably engendered between
the parties as a result of litigation. That is human nature.
Besides, no strained relations should arise from a valid and legal
act of asserting one’s right; otherwise 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.39
As to the back wages due petitioner, there is likewise no basis in
deducting therefrom back wages equivalent to six months
"representing the maximum period of confinement PNCC can
require him to undergo medical treatment." Besides, petitioner
was not dismissed on the ground of disease but expiration of term
of project employment.
Regarding moral and exemplary damages, this Court rules that
petitioner is not entitled to them. Worth reiterating is the rule
1âwphi1
that moral damages are recoverable where the dismissal of the
employee was attended by bad faith or fraud or constituted an act
oppressive to labor, or was done in a manner contrary to morals,
good customs, or public policy. Likewise, exemplary damages may
be awarded if the dismissal was effected in a wanton, oppressive
or malevolent manner.40 Apart from his allegations, petitioner did
not present any evidence to prove that his dismissal was attended
with bad faith or was done oppressively.
Petitioner is also entitled to attorney's fees m the amount of ten
percent (10%) of his total monetary award, having been forced to
litigate in order to seek redress of his grievances, as provided in
Article 111 of the Labor Code, as amended, and following this
Court's pronouncement in Exodus International Construction
Corporation v. Biscocho.41
In line with current jurisprudence, the award of back wages shall
earn legal interest at the rate of six percent ( 6%) per annum from
the date of petitioner's dismissal until the finality of this
decision.42 Thereafter, it shall earn 12% legal interest until fully
paid43 in accordance with the guidelines in Eastern Shipping
Lines, Inc. v. Court of Appeals.44
WHEREFORE, the petition is GRANTED. The assailed March 26,
2010 Decision and May 26, 2010 Resolution of the Court of
Appeals in CAG.R. SP No. 107805 are hereby REVERSED. The
decision of the Labor Arbiter is hereby REINSTATED with the
following MODIFICATIONS:
1) respondent PNCC is DIRECTED to pay petitioner Roy D.
Pasos full back wages from the time of his illegal dismissal
on October 19, 2000 up to the finality of this Decision, with
interest at 6% per annum, and 12% legal interest
thereafter until fully paid;
2) respondent PNCC is ORDERED to reinstate petitioner
Pasos to his former position or to a substantially equivalent
one, without loss of seniority rights and other benefits
attendant to the position; and
3) respondent PNCC is DIRECTED to pay petitioner Pasos
attorney's fees equivalent to 10% of his total monetary
award.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 204406, February 26, 2014
MACARTHUR MALICDEM AND HERMENIGILDO
FLORES,Petitioners, v. MARULAS INDUSTRIAL
CORPORATION AND MIKE
MANCILLA,Respondents.
MENDOZA, J.:
FACTS:
Petitioners Malicdem and Flores were hired by
respondent corporation as extruder operators in
2006 They were responsible for the bagging of
filament yarn, the quality of pp yarn package and the
cleanliness of the work place area. Their employment
contracts were for a period of one (1) year. Every year
thereafter, they would sign a Resignation/Quitclaim
in favor of Marulas a day after their contracts ended,
and then sign another contract for one (1) year until
such time that they were told not to report to work
anymore. They were asked to sign a paper
acknowledging the completion of their contractual
status. Claiming that they were illegally dismissed,
the corporation countered that their contracts
showed that they were fixedterm employees for a
specific undertaking which was to work on a
particular order of a customer for a specific period.
Their severance from employment then was due to
the expiration of their contracts.
ISSUE: Whether or not petitioners were illegally
dismissed
HELD: Yes. CA affirming NLRC decision annulled
and set aside
Labor Law: Effect of continuous re-hiring of a
project employee for the same tasks that are
vital, necessary and indispensable to the usual
trade or business of the employer
Once a project or work pool employee has been: (1)
continuously, as opposed to intermittently, rehired
by the same employer for the same tasks or nature of
tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the
employer, then the employee must be deemed a
regular employee, pursuant to Article 280 of the
Labor Code and jurisprudence. To rule otherwise
would allow circumvention of labor laws in industries
not falling within the ambit of Policy Instruction No.
20/Department Order No. 19, hence allowing the
prevention of acquisition of tenurial security by
project or work pool employees who have already
gained the status of regular employees by the
employers conduct.
The test to determine whether employment is regular
or not is the reasonable connection between the
particular activity performed by the employee in
relation to the usual business or trade of the
employer. If the employee has been performing the
job for at least one year, even if the performance is
not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance
as sufficient evidence of the necessity, if not
indispensability of that activity to the business.
It is clear then that there was deliberate intent on the
part of the employer to prevent the regularization of
petitioners. To begin with, there is no actual project.
The only stipulations in the contracts were the dates
of their effectivity, the duties and responsibilities of
the petitioners as extruder operators, the rights and
obligations of the parties, and the petitioners
compensation and allowances. As there was no
specific project or undertaking to speak of, the
respondents cannot invoke the exception in Article
280 of the Labor Code.This is a clear attempt to
frustrate the regularization of the petitioners and to
circumvent the law.
Even granting that petitioners were project
employees, they can still be considered as regular as
they were continuously hired by the same employer
for the same position as extruder operators. Being
responsible for the operation of machines that
produced sacks, their work was vital and
indispensable the business of the employer.
The respondents cannot use the alleged expiration of
the employment contracts of the petitioners as a
shield of their illegal acts. The project employment
contracts that the petitioners were made to sign every
year since the start of their employment were only a
stratagem to violate their security of tenure in the
company.
The respondents invocation ofWilliam Uy
Construction Corp. v. Trinidadis misplaced because
it is applicable only in cases involving the tenure of
project employees in the construction industry. It is
widely known that in the construction industry, a
project employees work depends on the availability of
projects, necessarily the duration of his employment.
It is not permanent but coterminous with the work to
which he is assigned.It would be extremely
burdensome for the employer, who depends on the
availability of projects, to carry him as a permanent
employee and pay him wages even if there are no
projects for him to work on.The rationale behind this
is that once the project is completed it would be
unjust to require the employer to maintain these
employees in their payroll.

Under Article 279 of the Labor Code, an employee

who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their
monetary equivalent computed from the time his
compensation was withheld from him up to the time
of his actual reinstatement.