Labor Cases

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.

Art. 281. Probationary employment. Probationary
employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when
he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be
considered a regular employee.
G.R. No. 148492 May 9, 2003
BUENAVENTURA C. MAGSALIN & COCA-COLA BOTTLERS
PHILS., INC., petitioners,
vs.
NATIONAL ORGANIZATION OF WORKING MEN (N.O.W.M.),
RODOLFO MELGAR, ARNEL DELOS SANTOS, SILVERIO
MINDAJAO, RUBEN NAVALES, BOBBY AUSTERO,
RAYMUNDO GAUDICOS, CHRISTOPHER PERALTA, GIOVANI
DELA CRUZ, JOSELITO OCCIDENTAL, AMADO BODASAN,
FREDERIK MAGALINO, CHITO OCCIDENTAL, ALEXANDER
DELOS SANTOS, DEONIL MESA, OLIVER VILLAFLOR,
ROBERTO TUMONBA, RODRIGO ANGELES, ROMMEL ABAD,
FELIX AVENIDO, ARMANDO AMOR, FREDERICK DE
GUZMAN, CEA CARMELO, MARIANO CAETE, ALBERTO
ANTONES, ROMEO BASQUINAS, ROGELIO MALINIS,
EDMUNDO BAYOS, RAMIL REVADO, JOEL PIATA, OSCAR
MALINAY, ROBERT REYES, JIMMY REYES, RETCHEL
HAUTEA, VICTORINO TORRALBA, NOEL RUBAI, RENATO
DE OCAMPO, JESUS NOZON, JOEL MALINIS, REYNALDO
GREGORY, MICHAEL RUBIA, JOSELITO VILLANUEVA,
LEONARDO MONDINA, EDUARDO BELLA, WILFREDO
BELLA, ALBERTO MAGTIBAY, MIGUEL CUESTA, JOSE
MARCOS RODRIGUEZ III, HERMINIO ROFLO, ERNIE
CHAVEZ, NELSON LOGRONIO, LEONILO GALAPIN, REY
PANGILINAN, LARRY JAVIER, MATIAS ARBUES, RONILO
AUSTERO, ADEMAR ESTUITA, EDWIN DE LEON, RANDY DE
CHAVEZ, respondents.
VITUG, J.:
Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the
services of respondent workers as "sales route helpers" for a
limited period of five months. After five months, respondent
workers were employed by petitioner company on a day-to-
day basis. According to petitioner company, respondent
workers were hired to substitute for regular sales route
helpers whenever the latter would be unavailable or when
there would be an unexpected shortage of manpower in any of
its work places or an unusually high volume of work. The
practice was for the workers to wait every morning outside the
gates of the sales office of petitioner company. If thus hired, the
workers would then be paid their wages at the end of the day.
Ultimately, respondent workers asked petitioner company to
extend to them regular appointments. Petitioner company
refused. On 07 November 1997, twenty-three (23) of the
"temporary" workers (herein respondents) filed with the
National Labor Relations Commission (NLRC) a complaint for
the regularization of their employment with petitioner
company. The complaint was amended a number of times to
include other complainants that ultimately totaled fifty-eight
(58) workers. Claiming that petitioner company meanwhile
terminated their services, respondent workers filed a notice of
strike and a complaint for illegal dismissal and unfair labor
practice with the NLRC.
On 01 April 1998, the parties agreed to submit the controversy,
including the issue raised in the complaint for regularization of
employment, for voluntary arbitration. On 18 May 1998, the
voluntary arbitrator rendered a decision dismissing the
complaint on the thesis that respondents (then complainants)
were not regular employees of petitioner company.
Respondent workers filed with the Court of Appeals a petition
for review under Rule 43 of the Rules of Civil Procedure
assailing the decision of the voluntary arbitrator, therein
contending that -
"1. The Voluntary Arbitrator committed errors in finding that
petitioners voluntarily and knowingly agreed to be employed
on a day-to-day basis; and
"2. The Voluntary Arbitrator committed errors in finding that
petitioners' dismissal was valid."
1

In its decision of 11 August 2000, the Court of Appeals
reversed and set aside the ruling of the voluntary arbitrator, it
concluded -
"WHEREFORE, the assailed decision of the Voluntary
Arbitrator is hereby REVERSED and SET ASIDE and anew one
is entered:
"1. Declaring petitioners as regular employees of Coca-Cola
Bottlers Phils., Inc. and their dismissal from employment as
illegal;
"2. Ordering respondent Coca-Cola Bottlers Phils., Inc. to
reinstate petitioners to their former positions with full
backwages, inclusive of allowances that petitioners had been
receiving during their employment and 13
th
month pay,
computed from the date of their termination up to the time of
their actual reinstatement (Paramount Vinyl Product Corp. vs.
NLRC, 190 SCRA 526)."
2

Petitioner company's motion for reconsideration was denied in
a resolution, dated 21 May 2001, of the appellate court.
The focal issues revolve around the matter of whether or not
the nature of work of respondents in the company is of such
nature as to be deemed necessary and desirable in the usual
business or trade of petitioner that could qualify them to be
regular employees.
The basic law on the case is Article 280 of the Labor Code. Its
pertinent provisions read:
"Art. 280. Regular and Casual Employment. The provisions of
where the work or services to be performed is seasonal in
"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."
Coca-Cola Bottlers Phils., Inc., is one of the leading and largest
manufacturers of softdrinks in the country. Respondent
workers have long been in the service of petitioner company.
Respondent workers, when hired, would go with route
salesmen on board delivery trucks and undertake the laborious
task of loading and unloading softdrink products of petitioner
company to its various delivery points.
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.
3

The argument of petitioner that its usual business or trade is
softdrink manufacturing and that the work assigned to
respondent workers as sales route helpers so involves merely
"postproduction activities," one which is not indispensable in
the manufacture of its products, scarcely can be persuasive. If,
as so argued by petitioner company, only those whose work
are directly involved in the production of softdrinks may be
held performing functions necessary and desirable in its usual
business or trade, there would have then been no need for it to
even maintain regular truck sales route helpers. The nature of
the work performed must be viewed from a perspective of the
business or trade in its entirety
4
and not on a confined scope.
The repeated rehiring of respondent workers and the
continuing need for their services clearly attest to the necessity
or desirability of their services in the regular conduct of the
business or trade of petitioner company. The Court of Appeals
has found each of respondents to have worked for at least one
year with petitioner company. While this Court, in Brent
School, Inc. vs. Zamora,
5
has upheld the legality of a fixed-term
employment, it has done so, however, with a stern admonition
that where from the circumstances it is apparent that the
period has been imposed to preclude the acquisition of tenurial
security by the employee, then it should be struck down as
being contrary to law, morals, good customs, public order and
public policy. The pernicious practice of having employees,
workers and laborers, engaged for a fixed period of few
months, short of the normal six-month probationary period of
employment, and, thereafter, to be hired on a day-to-day basis,
mocks the law. Any obvious circumvention of the law cannot
be countenanced. The fact that respondent workers have
agreed to be employed on such basis and to forego the
protection given to them on their security of tenure,
demonstrate nothing more than the serious problem of
impoverishment of so many of our people and the resulting
unevenness between labor and capital. A contract of
employment is impressed with public interest. The provisions
of applicable statutes are deemed written into the contract,
and "the parties are not at liberty to insulate themselves and
their relationships from the impact of labor laws and
regulations by simply contracting with each other."
6

With respect to the "Release, Waiver and Quitclaim" executed
by thirty-six (36) of the original complainants, namely,
Rommel Abad, Armando Amor, Bobby Austero, Felix Avenido,
Amado Badasan, Edmundo Bayos, Eduardo Bella, Jr., Mariano
Caete, Carmelo Cea, Ernie Chavez, Randy Dechaves, Frederick
De Guzman, Renato De Ocampo, Ademar Estuita, Leonilo
Galapin, Raymund Gaudicos, Retchel Hautea, Larry Javier,
Nelson Logrinio, Alberto Magtibay, Frederick Magallano,
Rogelio Malinis, Rodolfo Melgar, Silverio Mindajao, Leonardo
Mondina, Ruben Navales, Rey Pangilinan, Christopher Peralta,
Jimmy Reyes, Herminio Roflo, Michael Rubia, Noel Rubia,
Roberto Tumomba, Oliver Villaflor, and Joselito Villanueva, this
Court finds the execution of the same to be in order. During the
pendency of the appeal with the Court of Appeals, these thirty-
six (36) complainants individually executed voluntarily a
release, waiver and quitclaim and received from petitioner
company the amount of fifteen thousand (P15,000.00) pesos
each. The amount accords with the disposition of the case by
the voluntary arbitrator thusly:
"WHEREFORE, above premises considered, the herein
complaint is hereby DISMISSED for lack of merit.
"However, we cannot completely negate the fact that
complainants did and do actually render services to the
Company. It is with this in mind and considering the difficulty
the complainants may face in looking for another job in case
they are no longer re-engaged that we direct the company to
pay complainants Fifteen Thousand Pesos each (P15,000.00)
as financial assistance. It is however understood that the
financial assistance previously extended by the Company to
some of the complainants shall be deducted from the financial
assistance herein awarded."
7

The receipt of the amount awarded by the voluntary arbitrator,
as well as the execution of a release, waiver and quitclaim, is, in
effect, an acceptance of said decision. There is nothing on
record which could indicate that the execution thereof by
thirty-six (36) of the respondent workers has been attended by
fraud or deceit. While quitclaims executed by employees are
commonly frowned upon as being contrary to public policy and
are ineffective to bar claims for the full measure of their legal
rights, there are, however, legitimate waivers that represent a
voluntary and reasonable settlement of laborers' claims which
should be so respected by the Court as the law between the
parties.
8
Where the person making the waiver has done so
voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as being a valid and binding
undertaking. "Dire necessity" is not an acceptable ground for
annulling the release, when it is not shown that the employee
has been forced to execute it.
9

WHEREFORE, the questioned decision of the Court of Appeals,
in CA-G.R. SP No. 47872 is hereby AFFIRMED with
MODIFICATION in that the "Release, Waiver and Quitclaim"
executed by the thirty-six (36) individual respondents are
hereby declared VALID and LEGAL.
SO ORDERED.
G.R. No. 70705 August 21, 1989
MOISES DE LEON, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and LA
TONDE;A INC., respondents.
FERNAN, C.J.:
This petition for certiorari seeks to annul and set aside: (1) the
majority decision dated January 28, 1985 of the National Labor
Relations Commission First Division in Case No. NCR- 83566-
83, which reversed the Order dated April 6,1984 of Labor
Arbiter Bienvenido S. Hernandez directing the reinstatement of
petitioner Moises de Leon by private respondent La Tonde;a
Inc. with payment of backwages and other benefits due a
regular employee; and, (2) the Resolution dated March 21,
1985 denying petitioner's motion for reconsideration.
It appears that petitioner was employed by private respondent
La Tonde;a Inc. on December 11, 1981, at the Maintenance
Section of its Engineering Department in Tondo, Manila.
1
His
work consisted mainly of painting company building and
equipment, and other odd jobs relating to maintenance. He was
paid on a daily basis through petty cash vouchers.
In the early part of January, 1983, after a service of more than
one (1) year, petitioner requested from respondent company
that lie be included in the payroll of regular workers, instead of
being paid through petty cash vouchers. Private respondent's
response to this request was to dismiss petitioner from his
employment on January 16, 1983. Having been refused
reinstatement despite repeated demands, petitioner filed a
complaint for illegal dismissal, reinstatement and payment of
backwages before the Office of the Labor Arbiter of the then
Ministry now Department of Labor and Employment.
Petitioner alleged that he was dismissed following his request
to be treated as a regular employee; that his work consisted of
painting company buildings and maintenance chores like
cleaning and operating company equipment, assisting Emiliano
Tanque Jr., a regular maintenance man; and that weeks after
his dismissal, he was re-hired by the respondent company
indirectly through the Vitas-Magsaysay Village Livelihood
Council, a labor agency of respondent company, and was made
to perform the tasks which he used to do. Emiliano Tanque Jr.
corroborated these averments of petitioner in his affidavit.
2

On the other hand, private respondent claimed that petitioner
was not a regular employee but only a casual worker hired
allegedly only to paint a certain building in the company
premises, and that his work as a painter terminated upon the
completion of the painting job.
On April 6, 1984, Labor Arbiter Bienvenido S. Hernandez
rendered a decision
3
finding the complaint meritorious and
the dismissal illegal; and ordering the respondent company to
reinstate petitioner with full backwages and other benefits.
Labor Arbiter Hernandez ruled that petitioner was not a mere
casual employee as asserted by private respondent but a
regular employee. He concluded that the dismissal of petitioner
from the service was prompted by his request to be included in
the list of regular employees and to be paid through the payroll
and is, therefore, an attempt to circumvent the legal obligations
of an employer towards a regular employee.
Labor Arbiter Hernandez found as follows:
After a thorough examination of the records of the case and
evaluation of the evidence and versions of the parties, this
Office finds and so holds that the dismissal of complainant is
illegal. Despite the impressive attempt of respondents to show
that the complainant was hired as casual and for the work on
particular project, that is the repainting of Mama Rosa
Building, which particular work of painting and repainting is
not pursuant to the regular business of the company, according
to its theory, we find differently. Complainant's being hired on
casual basis did not dissuade from the cold fact that such
painting of the building and the painting and repainting of the
equipment and tools and other things belonging to the
company and the odd jobs assigned to him to be performed
when he had no painting and repainting works related to
maintenance as a maintenance man are necessary and
desirable to the better operation of the business company.
Respondent did not even attempt to deny and refute the
corroborating statements of Emiliano Tanque Jr., who was
regularly employed by it as a maintenance man doing same
jobs not only of painting and repainting of building, equipment
and tools and machineries or machines if the company but also
other odd jobs in the Engineering and Maintenance
Department that complainant Moises de Leon did perform the
same odd jobs and assignments as were assigned to him during
the period de Leon was employed for more than one year
continuously by Id respondent company. We find no reason
not to give credit and weight to the affidavit and statement
made therein by Emiliano Tanque Jr. This strongly confirms
that complainant did the work pertaining to the regular
business in which the company had been organized.
Respondent cannot be permitted to circumvent the law on
security of tenure by considering complainant as a casual
worker on daily rate basis and after working for a period that
has entitled him to be regularized that he would be
automatically terminated. ... .
4

On appeal, however, the above decision of the Labor Arbiter
was reversed by the First Division of the National Labor
Relations Commission by virtue of the votes of two members
5

which constituted a majority. Commissioner Geronimo Q.
Quadra dissented, voting "for the affirmation of the well-
reasoned decision of the Labor Arbiter below."
6
The motion
for reconsideration was denied. Hence, this recourse.
Petitioner asserts that the respondent Commission erred and
gravely abuse its discretion in reversing the Order of the Labor
Arbiter in view of the uncontroverted fact that the tasks he
performed included not only painting but also other
maintenance work which are usually necessary or desirable in
the usual business of private respondent: hence, the reversal
violates the Constitutional and statutory provisions for the
protection of labor.
The private respondent, as expected, maintains the opposite
view and argues that petitioner was hired only as a painter to
repaint specifically the Mama Rosa building at its Tondo
compound, which painting work is not part of their main
business; that at the time of his engagement, it was made clear
to him that he would be so engaged on a casual basis, so much
so that he was not required to accomplish an application form
or to comply with the usual requisites for employment; and
that, in fact, petitioner was never paid his salary through the
regular payroll but always through petty cash vouchers.
7

The Solicitor General, in his Comment, recommends that the
petition be given due course in view of the evidence on record
supporting petitioner's contention that his work was regular in
nature. In his view, the dismissal of petitioner after he
demanded to be regularized was a subterfuge to circumvent
the law on regular employment. He further recommends that
the questioned decision and resolution of respondent
Commission be annulled and the Order of the Labor Arbiter
directing the reinstatement of petitioner with payment of
backwages and other benefits be upheld.
8

After a careful review of the records of this case, the Court
finds merit in the petition as We sustain the position of the
Solicitor General that the reversal of the decision of the Labor
Arbiter by the respondent Commission was erroneous.
The law on the matter is Article 281 of the Labor Code which
defines regular and casual employment as follows:
Art. 281. Regular and casual employment. The provisions of a
regardless of the oral agreements of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of
the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of
the season.
covered by the preceding paragraph: Provided, That any
such actually exists.
This provision reinforces the Constitutional mandate to protect
the interest of labor. 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. Thus, contrary agreements
notwithstanding, an employment is deemed regular when the
activities performed by the employee are usually necessary or
desirable in the usual business or trade of the employer. Not
considered regular are the so-called "project employment" 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
9
and seasonal employment which by its nature is only
desirable for a limited period of time. However, any employee
who has rendered at least one year of service, whether
continuous or intermittent, is deemed regular with respect to
the activity he performed and while such activity actually
exists.
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.
In the case at bar, the respondent company, which is engaged
in the business of manufacture and distillery of wines and
liquors, claims that petitioner was contracted on a casual basis
specifically to paint a certain company building and that its
completion rendered petitioner's employment terminated.
This may have been true at the beginning, and had it been
shown that petitioner's activity was exclusively limited to
painting that certain building, respondent company's theory of
casual employment would have been worthy of consideration.
However, during petitioner's period of employment, the
records reveal that the tasks assigned to him included not only
painting of company buildings, equipment and tools but also
cleaning and oiling machines, even operating a drilling
machine, and other odd jobs assigned to him when he had no
painting job. A regular employee of respondent company,
Emiliano Tanque Jr., attested in his affidavit that petitioner
worked with him as a maintenance man when there was no
painting job.
It is noteworthy that, as wisely observed by the Labor Arbiter,
the respondent company did not even attempt to negate the
above averments of petitioner and his co- employee. Indeed,
the respondent company did not only fail to dispute this vital
point, it even went further and confirmed its veracity when it
expressly admitted in its comment that, "The main bulk of
work and/or activities assigned to petitioner was painting and
other related activities. Occasionally, he was instructed to do
other odd things in connection with maintenance while he was
waiting for materials he would need in his job or when he had
finished early one assigned to him.
10

The respondent Commission, in reversing the findings of the
Labor Arbiter reasoned that petitioner's job cannot be
considered as necessary or desirable in the usual business or
trade of the employer because, "Painting the business or
factory building is not a part of the respondent's
manufacturing or distilling process of wines and liquors.
11

The fallacy of the reasoning is readily apparent in view of the
admitted fact that petitioner's activities included not only
painting but other maintenance work as well, a fact which even
the respondent Commission, like the private respondent, also
expressly recognized when it stated in its decision that,
'Although complainant's (petitioner) work was mainly
painting, he was occasionally asked to do other odd jobs in
connection with maintenance work.
12
It misleadingly assumed
that all the petitioner did during his more than one year of
employment was to paint a certain building of the respondent
company, whereas it is admitted that he was given other
assignments relating to maintenance work besides painting
company building and equipment.
It is self-serving, to say the least, to isolate petitioner's painting
job to justify the proposition of casual employment and
conveniently disregard the other maintenance activities of
petitioner which were assigned by the respondent company
when he was not painting. The law demands that the nature
and entirety of the activities performed by the employee be
considered. In the case of petitioner, the painting and
maintenance work given him manifest a treatment consistent
with a maintenance man and not just a painter, for if his job
was truly only to paint a building there would have been no
basis for giving him other work assignments In between
painting activities.
It is not tenable to argue that the painting and maintenance
work of petitioner are not necessary in respondent's business
of manufacturing liquors and wines, just as it cannot be said
that only those who are directly involved in the process of
producing wines and liquors may be considered as necessary
employees. Otherwise, there would have been no need for the
regular Maintenance Section of respondent company's
Engineering Department, manned by regular employees like
Emiliano Tanque Jr., whom petitioner often worked with.
Furthermore, the petitioner performed his work of painting
and maintenance activities during his employment in
respondent's business which lasted for more than one year,
until early January, 1983 when he demanded to be regularized
and was subsequently dismissed. Certainly, by this fact alone
he is entitled by law to be considered a regular employee. And
considering further that weeks after his dismissal, petitioner
was rehired by the company through a labor agency and was
returned to his post in the Maintenance Section and made to
perform the same activities that he used to do, it cannot be
denied that as activities as a regular painter and maintenance
man still exist.
It is of no moment that petitioner was told when he was hired
that his employment would only be casual, that he was paid
through cash vouchers, and that he did not comply with
regular employment procedure. Precisely, the law overrides
such conditions which are prejudicial to the interest of the
worker whose weak bargaining position needs the support of
the State. That determines whether a certain employment is
regular or casual is not the will and word of the employer, to
which the desperate worker often accedes, much less the
procedure of hiring the employee or the manner of paying his
salary. It is the nature of the activities performed in relation to
the particular business or trade considering all circumstances,
and in some cases the length of time of its performance and its
continued existence.
Finally, considering its task to give life and spirit to the
Constitutional mandate for the protection of labor, to enforce
and uphold our labor laws which must be interpreted liberally
in favor of the worker in case of doubt, the Court cannot
understand the failure of the respondent Commission to
perceive the obvious attempt on the part of the respondent
company to evade its obligations to petitioner by dismissing
the latter days after he asked to be treated as a regular worker
on the flimsy pretext that his painting work was suddenly
finished only to rehire him indirectly weeks after his dismissal
and assign him to perform the same tasks he used to perform.
The devious dismissal is too obvious to escape notice. The
inexplicable disregard of established and decisive facts which
the Commission itself admitted to be so, in justifying a
conclusion adverse to the aggrieved laborer clearly spells a
grave abuse of discretion amounting to lack of jurisdiction.
WHEREFORE, the petition is GRANTED. The assailed Decision
and Resolution of the National Labor Relations Commission are
hereby annulled and set aside. The Order of Labor arbiter
Bienvenido S. Hernandez dated April 6, 1984 is reinstated.
Private respondent is ordered to reinstate petitioner as a
regular maintenance man and to pay petitioner 1) backwages
equivalent to three years from January 16,1983, in accordance
with the Aluminum Wage Orders in effect for the period
covered, 2) ECOLA 3) 13th Month Pay, 4) and other benefits
under pertinent Collective Bargaining Agreements, if any.
SO ORDERED.
G.R. No. 176627 August 24, 2007
GLORY PHILIPPINES, INC., Petitioner,
vs.
BUENAVENTURA B. VERGARA and ROSELYN T. TUMASIS,
Respondents.
YNARES-SANTIAGO, J.:
This petition
1
for review on certiorari assails the September
18, 2006 Decision
2
of the Court of Appeals in CA-G.R. SP No.
73377 which set aside the December 20, 2001 Decision and
July 22, 2002 Order of the National Labor Relations
Commission in NLRC NCR CA No. 022914-00 and declared that
respondents Buenaventura B. Vergara and Roselyn T. Tumasis
were illegally dismissed; and the February 6, 2007 Resolution
3

denying the motion for reconsideration.
Petitioner Glory Philippines, Inc. manufactures money-
counting machines. In June 1998, it created a Parts Inspection
Section (PIS) tasked to inspect the machine parts for
exportation to its exclusive buyer, Glory Limited Japan (Glory
Japan).
Petitioner hired respondents on July 6, 1998, allegedly as
members of the PIS. However, the employment contracts
4

which they signed only on August 18, 1998, indicated them as
Production Operators in the Production Section with a daily
wage of Php188.00. The contracts covered the period from July
31 to August 30, 1998.
Thereafter, respondents employment contracts were extended
on a monthly basis. For the periods from August 31 to October
20, 1998, and October 21 to November 30, 1998, respondents
signed their respective employment contracts designating
them as members of the PIS. From December 1, 1998 to April
27, 1999, respondents performed the same duties and
responsibilities despite the absence of employment contracts.
On April 27, 1999, however, they were each made to sign
employment contracts
5
covering the period from February 28
to April 30, 1999.
On April 26, 1999,
6
petitioners President, Mr. Takeo Oshima,
informed the Assistant Manager that the contractual
employees in the PIS would no longer be needed by the
company as Glory Japan had cancelled its orders.
Nevertheless, despite the alleged lack of need for respondents
services, petitioner claimed that it reluctantly agreed to extend
respondents employment due to their insistent pleas. Thus, for
the period from May 1 to May 15, 1999, respondents signed
employment contracts with a higher wage of Php200.00 a day.
Respondents claimed that they continued to work until May
25, 1999 when, at the close of working hours, petitioners
security guard advised them that their employment had been
terminated and that they would no longer be allowed to enter
the premises. Consequently, on May 27, 1999, they filed
separate complaints for illegal dismissal with the Department
of Labor and Employment, Region IV. The cases were
subsequently referred to the National Labor Relations
Commission (NLRC) for resolution.
On October 29, 1999, the Labor Arbiter rendered a decision
7

finding that respondents were regular employees because they
performed activities desirable to the usual business or trade of
petitioner for almost eleven (11) months; and that they were
illegally dismissed for lack of just cause and non-observance of
due process. Thus:
Hence, in accordance with Art. 280, we believe as we ought to
believe that complainants [herein respondents] were regular
employees since their engagement was not fixed for a specific
project or undertaking for a particular season. As regular
employees, complainants had all the rights to security of
tenure.
x x x x
After a careful perusal of the record of this case, we could not
find any glimpse of just cause and the observance of due
process before and during the termination of complainants
services. In this case, only general allegations were asserted by
respondent such as "declining order from Glory Japan coupled
with poor work performance of complainants" to justify the
dismissal of the latter. This afterthought averment, in the
absence of any substantial evidence to prove respondents
defense, should be considered as empty allegation and must
miserably fail.
Thus, we declare as we ought to declare that the dismissal of
complainants Vergara and Tumasis were (sic) illegal in the
absence of any just cause as enunciated in Art. 282 and the
non-observance of due process in the termination of
complainants services.
8

On appeal, the NLRC affirmed the findings of the Labor Arbiter.
However, upon motion for reconsideration, the NLRC reversed
and set aside its earlier decision
9
and dismissed the complaint
for lack of merit. The NLRC ruled that respondents were
project employees and that their employment was terminated
upon expiration of their employment contracts. Respondents
motion for reconsideration was denied hence, they filed a
petition for certiorari before the Court of Appeals. On
September 18, 2006, the appellate court granted the petition,
as follows:
WHEREFORE, the PETITION FOR CERTIORARI IS GRANTED.
The DECISION dated December 20, 2001 and the ORDER dated
July 22, 2002 are SET ASIDE and the DECISION of Labor
Arbiter Dominador B. Medroso, Jr. dated October 29, 1999 is
REINSTATED subject to the following MODIFICATIONS:
1. Should the reinstatement of the petitioners [herein
respondents] be no longer feasible because the
section/division to which they used to be assigned no longer
exists, separation pay equivalent to 1 month salary for every
year of service from the time of dismissal until finality of this
DECISION shall be paid;
2. Full backwages to be paid to the petitioners shall be from the
time of dismissal until actual reinstatement or, in case
separation pay is proper, until finality of this DECISION; and
3. Other monetary awards granted in the DECISION dated
October 29, 1999 shall be paid reckoned from the start of their
employment until their actual reinstatement or, in case
separation pay is proper, until finality of this DECISION.
The case is remanded to the Labor Arbiter for the prompt
computation of the benefits in favor of the petitioners as
hereby determined.
The private respondent shall pay costs of suit.
SO ORDERED.
10

Petitioners motion for reconsideration was denied hence, this
petition raising the following issues:
11

A.
THE COURT OF APPEALS COMMITTED SERIOUS AND
MANIFEST ERROR IN AFFIRMING THE LABOR ARBITERS
DECISION FINDING THAT RESPONDENTS ARE REGULAR
EMPLOYEES OF THE PETITIONER
B.
DECISION FINDING THAT RESPONDENTS WERE ILLEGALLY
DISMISSED
C.
DECISION FINDING THAT RESPONDENTS ARE ENTITLED TO
BACKWAGES, SEPARATION PAY, 13
TH
MONTH PAY AND
SERVICE INCENTIVE LEAVE PAY
Petitioner claims that respondents were contractual and/or
project employees because their employment was dependent
on the transaction with Glory Japan. Respondents, on the other
hand, claim that they were regular employees and that they
were dismissed without just or authorized cause and due
process of law.
The issues for resolution are: 1) whether respondents were
regular employees; and 2) whether respondents were illegally
dismissed.
The petition lacks merit.
In Perpetual Help Credit Cooperative, Inc. v. Faburada,
12
we
explained that there are three kinds of employees as provided
under Article 280 of the Labor Code, thus:
Article 280 of the Labor Code provides for three kinds of
employees: (1) regular employees or those who have been
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 x x x.
13

There is no merit in petitioners claim that respondents were
project employees whose employment was coterminous with
the transaction with Glory Japan.
In Grandspan Development Corporation v. Bernardo,
14
the Court
held that the principal test for determining whether particular
employees are properly characterized as project employees,
as distinguished from regular employees, is whether or not
the project employees were assigned to carry out a specific
project or undertaking, the duration and scope of which were
specified at the time the employees were engaged for that
project. As defined, project employees are those workers hired
(1) for a specific project or undertaking, and (2) the
completion or termination of such project or undertaking has
been determined at the time of engagement of the employee.
15

In the instant case, respondents employment contracts failed
to state the specific project or undertaking for which they were
allegedly engaged. While petitioner claims that respondents
were hired for the transaction with Glory Japan, the same was
not indicated in the contracts. As correctly observed by the
Court of Appeals, nothing therein suggested or even hinted that
their employment was dependent on the continuous patronage
of Glory Japan.
16

Further, the employment contracts did not indicate the
duration and scope of the project or undertaking as required
by law. It is not enough that an employee is hired for a specific
project or phase of work to qualify as a project employee.
There must also be a determination of, or a clear agreement on,
the completion or termination of the project at the time the
employee was engaged,
17
which is absent in this case.
Respondents were given pro forma employment contracts
which were repeatedly renewed upon petitioners behest.
Respondents were hired on July 6, 1998 but signed their initial
employment contracts only on August 18, 1998. The contracts
covered the period from July 31 to August 30, 1998 and
respondents were designated therein as Production Operators.
Thereafter, respondents were hired as members of the PIS and
their employment contracts were extended several times, to
wit: from August 31 to October 20, 1998; from October 21 to
November 30, 1998; from February 28 to April 30, 1999; and,
from May 1 to May 15, 1999.
It bears stressing that from December 1, 1998 to April 27,
1999, respondents reported for work despite the absence of
employment contracts. On April 27, 1999, however, they were
belatedly made to sign employment contracts for the period
from February 28 to April 30, 1999. Although petitioners
transaction with Glory Japan was terminated sometime in April
1999, yet respondents were allowed to work without
interruption until May 25, 1999. In fact, petitioner even paid
them higher salaries of Php200.00 a day.
To our mind, the foregoing factual circumstances negate
petitioners claim that respondents were project employees.
We quote with approval the ruling of the Court of Appeals, as
follows:
The manner by which the private respondent [herein
petitioner] dealt with the petitioners [herein respondents] was
obviously plagued with basic irregularities. Although they
were supposedly hired as PSI staff and started working on July
6, 1998, they were still made to sign individual pro forma
employment contracts only much later i.e., on August 18, 1999,
with their employment position being stated therein as
production operators in the Production Section being
purportedly extended from July 31, 1998 to August 30, 1998.
From then until October 20, 1998, they were made to sign
employment contracts on more or less month-to-month terms
for the position of PSI staff. Thereafter, they continued working
for the private respondent from December 1, 1998 until April
27, 1999 even if they had [not] signed any written contract for
such employment period. We are baffled why they were once
again made to signify on April 27, 1999 their conformity to an
employment contract for the period from February 28, 1999 to
April 30, 1999 and later to another contract for the period
from May 1, 1999 to May 15, 1999.
To us, the private respondents illegal intention became clearer
from such acts. Its making the petitioners sign written
employment contracts a few days before the purported end of
their employment periods (as stated in such contracts) was a
diaphanous ploy to set periods with a view for their possible
severance from employment should the private respondent so
willed it. If the term of the employment was truly determined
at the beginning of the employment, why was there delay in
the signing of the ready-made contracts that were entirely
prepared by the employer? Also, the changes in the positions
supposedly held by the petitioners in the company belied the
private respondents adamant contention that the petitioners
were hired solely for the purpose of manning PIS during its
alleged dry run period that ended on October 20, 1998. We
view such situation as a very obvious ploy of the private
respondent to evade the petitioners eventual regularization.
18

Likewise, we cannot give credence to petitioners claim that
respondents were fixed term employees. Petitioners reliance
on our ruling in Philippine Village Hotel v. National Labor
Relations Commission
19
is misplaced because the facts in the
said case are not in all fours with the case at bar. In said case,
the employees were hired only for a one-month period and
their employment contracts were never renewed. In the
instant case, respondents original employment contracts were
renewed four times. In the last instance, their contracts were
extended despite the cessation of petitioners alleged
transaction with Glory Japan. Thus, respondents were
continuously under the employ of petitioner, performing the
same duties and responsibilities, from July 6, 1998 to May 25,
1999.
In Philips Semiconductors (Phils.), Inc. v. Fadriquela,
20
we held
that such a continuing need for respondents services is
sufficient evidence of the necessity and indispensability of
their services to petitioners business.
21
Consequently, we find
that respondents were regular employees defined under
Article 280 of the Labor Code as those who have been engaged
to perform activities which are usually necessary or desirable
in the usual business or trade of petitioner.
Respondents are entitled to security of tenure notwithstanding
the contrary provisions of their employment contracts. Under
the Labor Code, the requirements for the lawful dismissal of an
employee are two-fold, the substantive and the procedural
aspects. Not only must the dismissal be for a valid or
authorized cause, the rudimentary requirements of due
process - notice and hearing must, likewise, be observed
before an employee may be dismissed. Without the
concurrence of the two, the termination would, in the eyes of
the law, be illegal.
22

As an employer, petitioner has the burden of proving that
respondents dismissal was for a cause allowed under the law
and that they were afforded due process. However, it failed to
discharge this burden. While it claims that the dismissal was
due to the expiration of respondents employment contracts
and the termination of the transaction with Glory Japan, the
facts and evidence show otherwise. Indeed, the periods of
employment were imposed in circumvention of respondents
right to security of tenure. Time and again, we held that the
practice of imposing a limited period in an employment
contract to circumvent the constitutional guarantee on security
of tenure should be struck down or disregarded as contrary to
public policy or morals.
23
So it is in this case.1avvphi1
In sum, we find no reason to deviate from the findings of the
Court of Appeals that respondents were regular employees and
that they were illegally dismissed by petitioner.
Under Article 279
24
of the Labor Code, an employee who was
illegally dismissed from work is 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. Where reinstatement is no longer
feasible, separation pay shall be granted in lieu of
reinstatement.
25

It appears that respondents were paid the amount of
Php91,015.15 corresponding to their payroll reinstatement
from March 29, 1999 up to November 30, 2000.
26
The said
amount should thus be deducted from the computation for
respondents backwages.
WHEREFORE, the petition is DENIED. The September 18, 2006
Decision and the February 6, 2007 Resolution of the Court of
Appeals in CA-G.R. SP. No. 73377 are AFFIRMED with
MODIFICATIONS. Respondents are entitled to: a)
reinstatement, and if reinstatement is no longer feasible,
separation pay equivalent to one (1) month pay for every year
of service; b) full backwages from the time the compensation
was withheld until actual reinstatement or, in case separation
pay is proper, until finality of this Decision less the amount of
Php90,015.15; and c) 13th Month Pay and Service Incentive
Leave Pay reckoned from the start of their employment until
actual reinstatement or, in case separation pay is proper, until
finality of this Decision.
SO ORDERED.
G.R. No. 125606 October 7, 1998
SAN MIGUEL CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, THIRD
DIVISION, and FRANCISCO DE GUZMAN, JR., respondents.
QUISUMBING, J.:
Before us is the petition for certiorari under Rule 65 of the
Revised Rules of Court seeking on set aside the April 18, 1996
Decision
1
and the May 30, 1996 Resolution
2
of public
respondent National Labor Relations Commission
3
in NLRC CA
No. 009490-95. Said decision reversed the JUne 30, 1995
judgment
4
of the labor Artiber
5
in NLRC-NCR Case No. 00-08-
05954-94, and oredered the reinstatement of private
respondent as follows:
WHEREFORE, premises considered, the assiled decision is
hereby VACATED and SET ASIDE. A new one is hereby entered
ordering herein respondent San Miguel Corporation to
reinstate complainant to his former position with full
backwages from the time he was dismissed from work until he
is actually reinstated without loss of seniority rights and ther
benefits, less earning elsewhere, if any.
6

The facts on record show that in November 1990, private
respondent was hired by petitioner as helper/bricklayer for a
specific project, the repair and upgrading of furnace C at its
Manila Glass Plant. His contract of employment provided that
said temporary employment was for a specific period of
approximately four (4) months.
On April 30, 1991, private respondent was able to complete the
repair and upgrading fo furnace C. Thus, his services were
terminated on that same day as there was no more work to be
done. His employment contract also ended that day.
On May 10, 1991, private respondent was again hired for a
specific job or undertaking, which involved the
draining/cooling down of fuenace F and the emergency repair
of furnace E. This project was for a specific period of
approximately three (3) months.
After the complesion of this task, namely the draining/cooling
down of furnace F and the emergency repair of furnace E, at
the end of July 1991, private respondent's services were
terminated.
On August 1, 1991, complainant saw his name in a
Memorandum posted at the Company's Bulletin Board as
among those who were considered dismissed.
On August 12, 1994, or after the lapse of more than three (3)
years from the completion of the last undertaking for which
private respondent wa hired, private respondent filed a
complaint for illegal dismissal against petitioner, docketed as
NLRC NCR Case No. 08-05954-94.
7

Both parties submitted their respective position papers, reply
and rejoinder to labor Arbiter Felipe Garduque II. On JUne 30,
1995, he rendered the decision dismissing said complaint for
lack of merit. In his ruling Labor Arbiter Garduque sustained
petitioner's argument that private respondent was a project
employee. The position of a helper does not fall within the
classification of regular employees. Hence, complainant never
attained regular employment status. Moreover, his silence for
more than three (3) years without any reasonable explanation
tended to weken his claim.
8

Not satisfied with the decision, private respondent interposed
his appeal with public respondent NLRC on August 8, 1995
Petitioner filed its opposition thereto on August 29, 1995.
On April 18, 1996, public respondent NLRC, promulgated its
assailed decision, reversing Labor Arbiter Garduque's decision.
In its ruling, public respondent made the following findings:
Respondent scheme of subsequently re-hiring complainant
after only ten (10) days from the last day of the expiration of
his contract of employment for a specific period, and giving
him again another contract of employment for another specific
period cannot be countenanced. This is one way of doing
violence to the employee's constitutional right to security of
tenure under which even employees under probationary status
are amply protected.
Under the circumstances obtaining in the instant case we find
that herein complainant was indeed illegally dismissed.
Respondent failed to adduce substantial evidence to prove that
Francisco de Guzman, Jr. was dismissed for a just or authorized
cause and after due process. The only reason they advance is
that his contract of employment which is for a specific period
had already expired. We, however, find this scheme, as
discussed earlier, no in accordance with law.
9

Petitioner then moved for the reconsideration of said decision.
This was however denied by public respondent on May 30,
1996 as it found no cogent reason, or patent or palpable error,
that would warrant the disturbance of the decision sought to
be reconsidered.
Hence, this petition, based on the following grounds:
1. RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN
FAILING TO RULE THAT PRIVATE RESPONDENT IS A PROJECT
OR A FIXED PERIOD EMPLOYEE.
RULING THAT PETITIONER VIOLATED PRIVATE
RESPONDENT'S RIGHT TO SECURITY OF TENURE AND THAT
PRIVATE RESPONDENT WAS ILLEGALLY DISMISSED.
RULING THAT LACHES OR SILENCE OR INACTION FOR AN
UNREASONABLE LENGTH OF TIME DID NOT BAR PRIVATE
RESPONDENT'S CLAIM.
Given these ground, this petition may be resolved once the
following issues are clarified: (a) What is tile nature of the
employment of private respondent, that of a project employee
or a regular employee? and (b) Was he terminated legally or
dismissed illegally?
As a general rule the factual findings and conclusions drawn by
the National Labor Relations Commission are accorded not
only great weight and respect, but even clothed with finality
and deemed binding on the Court, as long as they are
supported by substantial evidence. However, when such
findings and those of the Labor Arbiter are in conflict, it
behooves this Court to scrutinize the records of the case,
particularly the evidence presented, to arrive at a correct
decision.
10

Art. 280 of the Labor Code defines regular, project and casual
employment as follows:
Art. 280. Regular and Casual Employment. The provisions of
regardless of the oral agreement of one parties, an
the employer, except where the employment has been fixed for
of which has been determined at the time of the engagement of
the employee or where the work or services to be performed is
the season.
covered by the preceding paragraph: Provided, That, any
The above mentioned provision reinforces the Constitutional
mandate to protect the interest of labor as it sets the legal
framework for ascertaining one's nature of employment, and
distinguishing different kinds of employees. Its language
manifests the intent to safeguard the tenurial interes of worker
who may be denied the enjoyment of the rights and benefits
due to an employee, regardless of the nature of his
employment, by virtue of lopsided agreements which the
economically powerful employer who can maneuver to keep
an employee on a casual or contractual status for as long as it is
convenient to the employer.
Thus, under Article 280 of the Labor Code, an employment is
deemed regular when the activities performed by the
employee are usually necessary or desirable in the usual
business or trade of the employer even if the parties enter into
an agreement tating otherwise. But considered not regular
under said Article (1) the so-called "project employment" the
termination of which is more or less determinable at the time
of employment, such as those connected, which by its nature is
only for one season of the year and the employment is limited
for the duration of that season, such as the Christmas holiday
season. Nevertheless, an exception to this exception is made:
any employee who has rendered at least one (1) year of
service, whether continuous or intermitent, with respect to the
activity he performed and while such activity actually exists,
must be deemed regular.
Following Article 280, whether one is employed as a project
employee or not would depend on whether he was hired to
carry out a "specific project or undertaking", the duration and
scope of which were specified at the time his services were
engaged for that particular project.
11
Another factor that may
be undertaken by the employee in relation to the usual trade or
business of the employer, if without specifying the duration
and scope, the work to be undertaken is usually necessary or
desirable in the usual business or trade of the employer, then it
is regular employment and not just "project" must less "casual"
employment.
Thus, the nature of one's employment does not depend on the
will or word of the employer. Nor on the procedure of hiring
and the manner of designating the employee, but on the nature
of the activities to be performed by the employee, considering
the employer's nature of business
12
and the duration and
scope of the work to be done.
In ALU-TUCP vs NLRC,
13
this Court discussed two types of
projects:
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
at 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 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 . . .
(Underscoring supplied)
Public respondent NLRC's findings that herein private
respondent is a regular employee is erraneous as the latter's
employment clearly falls within the definition of "project
employees" under paragraph 1 of Article 280 of the Labor Code
and such is a typical example of the second kind of project
employment in the ALU TUCP case discussed above
Note that the plant where private respondent was employed
for only even months is engaged in the manufacturer of glass,
an integral component of the packaging and manufacturing
business of petitioner. The process of manufacturing glass
requires a furnace, which has a limited operating life.
Petitioner resorted to hiring project or fixed term employees in
having said furnaces repaired since said activity is not
regularly performed. Said furnaces are to be repaired or
overhauled only in case of need and after being used
continuously for a varying period of five (5) to ten (10) years.
In 1990, one of the furnaces of petitioner required repair and
upgrading. This was a undertaking distinct and separate from
petitioner's business of manufacturing glass. For this purpose,
petitioner must hire workers to undertake the said repair and
upgrading. Private respondent was, thus, hired by petitioner
on November 28, 1990 on a "temporary status for a specific
job" for a determined period of approximately four months
Upon completion of the undertaking, or on April 30, 1991,
private respondent's services were terminated. A few days,
thereafter, two of petitioner's furnaces required
"draining/coolong down" and "emergency repair". Private
respondent was again hired on May 10, 1991 to help in the
new undertaking, which would take approximately three (3)
months to accomplish. Upon completion of the second
undertaking, private respondent's services were likewise
terminated.
14
He was not hired a third time, and his two
engagements taken together did not total one full year in order
to qualify him as an exception to the exception falling under
the cited proviso in the second paragraph of Art. 280 of the
Labor Code.
Clearly, private respondent was hired for a specific project that
was not within the regular business of the corporation. For
petitioner is not engaged in the business of repairing furnaces.
Although the activity was necessary to enable petitioner to
continue manufacturing glass, the necessity therefor arose only
when a particular furnace reached the end of its life or
operating cycle. Or, as on the second undertaking, when a
particular furnace required an emergency repair. In other
words, the undertakings where private respondent was hired
primarily as helper/bricklayer have specified goals and
purpose which are fulfilled once the designated work was
completed. Moreover, such undertakings were also identifiably
separate and distinct from the usual, ordinary or regular
business operations of petitioner, which is glass
manufacturing. Thses undertakings, the duration and scope of
which had been determined and made known to private
respondent at the time of his employment clearly indicated the
nature of his employment as a project employee. Thus, his
services were terminated legally after the completion of the
project.
15

Public respondent NLRC's decision, if upheld, would amount to
negating the distinction made in Article 280 of the Labor Code.
It would shunt aside the rule that since a project employee's
work defends on the availability of a project, necessarily, the
duration of his employment is coterminous with the project to
which he is assigned.
16
It would become a burden for an
employer to retain an employee and pay him his
corresponding wages it there was no project for him to work
on. Well to remember is the language of the Court in the case of
Mamansag vs. NLRC:
17

While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be
supposed that every dispute will be automatically decided in
favor of labor. Management has also rights, which, as such, are
entitled to respect and enforcement in the interest of fair play.
Although the Supreme Court has inclined more often than not
toward the worker and has upheld has cause in his conflicts
with the employer, such favoritism has no blinded the Court to
the rule that justice is in avery case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine.
Considering that private respondent was a project employee
whose employment, the nature of which he was fully informed,
related to a specific project, work or undertaking, we find that
the Labor Arbiter correctly ruled that said employment legally
ended upon completion of said project. Hence the tremination
of his employment was not tantamount to an illegal dismissal;
and it was a grave abuse of discretion on public respondent's
part to order his reinstatement by petitioner.
WHEREFORE the instant petition is hereby GRANTED. The
decision of respondent NLRC is hereby REVERSED, and the
judgment of the Labor Arbiter REINSTATED.
NO COSTS.
SO ORDERED.
G.R. NO. 158132 July 4, 2007
RAYCOR AIRCONTROL SYSTEMS, INC., Petitioner,
vs.
MARIO SAN PEDRO and NATIONAL LABOR RELATIONS
COMMISSION, Respondents.
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Assailed in the Petition for Review
1
before this Court are the
August 24, 2001 Decision
2
and April 30, 2003 Resolution
3
of
the Court of Appeals (CA) in CA-G.R. SP No. 63403.
4

The facts are as stated by the CA.
Raycor Aircontrol Systems, Inc. (petitioner) hired Mario San
Pedro (respondent) as tinsmith operator subject to the
condition that his employment shall commence "on August 24,
1995 and shall be effective only for the duration of the contract
at Uniwide Las Pias after completion of which on November
18, 1995, it automatically terminates without necessity of
further notice."
5
As the Uniwide Las Pias project (first project)
lasted for one year, petitioner extended respondent's contract
beyond November 18, 1995. When this first project was finally
completed, petitioner again extended respondent's
employment by assigning him to its Olivarez Plaza, Bian,
Laguna project (second project) until December 1996.
Subsequently, petitioner rehired respondent as ducting man
and assigned him to its Cabuyao, Laguna project (third project)
until April 1997. Thereafter, petitioner transferred respondent
to its Llanas, Alabang project (fourth project) and later, to its
Uniwide Coastal project in Baclaran, Paranaque (fifth project).
6

Petitioner did not anymore issue new contracts to respondent
each time his employment was extended.
In a Memorandum
7
dated October 30, 1997, petitioner
declared that the contract of employment of respondent was
set to expire on November 1, 1997, the same to take effect on
November 3, 1997. Thus, when respondent reported for work
on November 3, 1997, he was informed by the company
timekeeper that he had been terminated.
Respondent filed a Complaint
8
for illegal dismissal with
damages. The Labor Arbiter (LA) rendered a Decision dated
July 15, 1999 in favor of respondent, thus:
WHEREFORE, premises considered, this Office finds and so
rule that the complainant was illegally dismissed by the
respondent without just cuase and without due process of law
on November 3, 1997. As such he is entitled to reinstatement
without loss of seniority rights and other benefits; and
payment of full backwages from the time of his dismissal up to
the time of his actual reinstatement which up to this date is in
the amount of P105,534.00 (P198.00/day x 26 days x 20.5
mos.).
Other claims are dismissed for lack of merit.
SO ORDERED.
9

On appeal by petitioner, the National Labor Relations
Commission (NLRC) issued a Resolution
10
dated September 18,
2000, affirming the July 15, 1999 LA Decision, and a
Resolution
11
dated December 15, 2000, denying petitioner's
Motion for Reconsideration.
Petitioner filed a Petition for Certiorari which the CA denied in
the August 24, 2001 Decision impugned herein. Its Motion for
Reconsideration was also denied by the CA in a Resolution
dated April 30, 2003.
Hence, the present recourse of petitioner on the sole issue:
Whether or not the Court of Appeals committed grave error in
ruling that private respondent was illegally dismissed.
12

The Court denies the petition for lack of merit.
The CA, as well as the NLRC and LA, considered respondent a
regular employee of petitioner because of the existence of a
reasonable connection between the former's regular activity in
relation to the latter's business. They based this finding on the
uncontroverted fact that petitioner repeatedly rehired
respondent in five successive projects for 23 continuous
months - nine months in the first project, four months in the
second, four months in the third, four months in the fourth, and
two months in the fifth - which repeated rehiring is indicative
of the desirability and indispensability of the activity
performed by respondent to the usual business or trade of
petitioner. They held that, being a regular employee entitled to
security of tenure, respondent's dismissal was illegal for lack of
a just or authorized cause and due process.
13

Petitioner denies that it dismissed respondent, insisting that
the latters services were terminated for he was a mere project
employee whose employment contract expired when the fifth
project to which he was assigned was scrapped due to non-
payment by the project owner, Uniwide Holdings, Inc.
(Uniwide).
14
It argues that the rehiring of respondent for 23
months did not make him a regular employee, given the
following nature of its business:
Petitioner is engaged in the installation of air conditioning
units in high and low rise building[s]. Petitioner gets business
from architects/engineers who invite petitioner to participate
in a public bidding on a certain project. If the project is
awarded to it, that will only be the time when it mobilizes and
engages the services of workers to install the air conditioning
units in the building. Petititioner is not a manufacturing or
trading company. Workers are hired according to their skills. It
is for this reason that private respondent was hired as tinsmith
operator.
15

The concurrent findings of the CA and the labor tribunals on
the existence of an employer-employee relationship between
the parties in the present case are factual in nature and are
accorded due deference
16
for being well-founded.
The issue of regularization of employees had already beset
petitioner, as early as the year 1996, in Raycor Aircontrol
Systems, Inc. v. National Labor Relations Commission.
17
In said
case, the Court resolved the issue whether several individuals
it hired and rehired to work as tinsmith, leadman, aircon
mechanic, installer, welder, and painter in its various projects
became regular employees after rendering service for more
than one year, with some of them serving for two to six years.
The Court recognized that petitioner was engaged in a peculiar
business which constrained it not to maintain a regular work
force. The Court observed:
It is not so much that this Court cannot appreciate petitioner's
contentions about the nature of its business and its inability to
maintain a large workforce on its permanent payroll. Private
respondents have admitted that petitioner is engaged only
in the installation (not manufacture) of aircon systems or
units in buildings, and since such a line of business would
obviously be highly (if not wholly) dependent on the
availability of buildings or projects requiring such
installation services, which factor no businessman, no
matter how savvy, can accurately forecast from year to
year, it can be easily surmised that petitioner, aware that its
revenues and income would be unpredictable, would always
try to keep its overhead costs to a minimum, and would
naturally want to engage workers on a per-project or per-
building basis only, retaining very few employees (if any) on
its permanent payroll. It would also have been more than
glad if its employees found other employment elsewhere, in
between projects. To our mind, it appears rather unlikely
that petitioner would keep private respondents -- all fifteen
of them -- continuously on its permanent payroll for, say, ten
or twelve years, knowing fully well that there would be
periods (of uncertain duration) when no project can be had.
To illustrate, let us assume that private respondents (who
were each making about P118.00 to P119.50 per day in 1991)
were paid only P100.00 per day. If the fifteen were, as they
claimed, regular employees entitled to their wages regardless
of whether or not they were assigned to work on any project,
the overhead for their salaries alone -- computed at
P100.00/day for 30 days in a month -- would come to no less
than P45,000.00 a month, or P540,000.00 a year, not counting
13th month pay, Christmas bonus, SSS/Medicare premium
payments, sick leaves and service incentives leaves, and so
forth. Even if petitioner may have been able to afford such
overhead costs, it certainly does not make business sense for it
or anyone else to do so, and is in every sense contrary to
human nature, not to mention common business practice. On
this score alone, we believe that petitioner could have made
out a strong case. x x x (Emphasis ours)
18

Nonetheless, the Court ruled against petitioner because the
latter failed to adduce clear and convincing evidence that the
projects to which its workers were assigned were of limited
scope and duration and that, at the time of hiring, said workers
knowingly accepted the restrictions on their employment,
thus:
For that matter, it seems self-evident to this Court that, even if
the contracts presented by petitioner had been signed by the
employees concerned, still, they would not constitute
conclusive proof of petitioner's claim. After all, in the usual
scheme of things, contract terms are normally dictated by the
employer and simply acceded to and accepted by the
employee, who may be desperate for work and therefore in no
position to bargain freely or negotiate terms to his liking.
In any event, petitioner in this case undoubtedly could have
presented additional evidence to buttress its claim. For
instance, petitioner could have presented copies of its
contracts with its clients, to show the time, duration and
scope of past installation projects. The data from these
contracts could then have been correlated to the data which
could be found in petitioner's payroll records for, let us say,
the past three years or so, to show that private respondents
had been working intermittently as and when they were
assigned to said projects, and that their compensation had
been computed on the basis of such work. But petitioner did
not produce such additional evidence, and we find that it
failed to discharge its burden of proof.
19
(Emphasis ours)
The same fate befalls petitioner once again.
Other than the 1995 employment contract it issued to
respondent, which contract we have held to be insufficient
evidence of project employment,
20
petitioner utterly failed to
adduce additional evidence which would have convinced us
that: 1) each time it hired and rehired respondent, it intended
for him to accomplish specific tasks in the particular project to
which he was assigned; 2) it intended for respondent to carry
out these specific tasks in accordance with the project plan it
had drawn out and within the limited time it had to complete
the same; and 3) it made such restrictions on each engagement
known to respondent, and the same were freely accepted by
him. Petitioner's failure to present such evidence is
inexcusable, given its access to such documents as project
contracts, payment remittances, employment records and
payslips.
21
Such lapse is dismaying, considering that in Raycor
v. National Labor Relations Commission, the Court had signalled
to petitioner that, given the peculiar nature of its business, it
had a strong case against the regularization of some of its
workers. The Court even enumerated the kind of evidence
petitioner should present to establish the project employment
of its workers.
Evidently, petitioner did not heed the Courts observations in
Raycor v. National Labor Relations Commission, leaving us no
option but to declare that it failed, yet again, to discharge its
burden of proving that respondent was a project employee.
Consequently, the Court affirms the finding of the CA and the
labor tribunals that respondent became a regular employee
after 23 months of rehiring.
The next question then is whether respondent was validly
dismissed on November 3, 1997.
Petitioner claims that respondent was laid off due to adverse
business conditions it suffered at that time, attributing these to
the Asian currency crisis, in general, and to the rehabilitation
of Uniwide, in particular.
22

The CA rejected such pretext and held:
In the instant case, Raycor merely alleged that its business was
affected by the Asian currency. It could not also rely on the
financial reverses suffered by its client, Uniwide Holdings, Inc.
without adducing sufficient and convincing proof that by
reason of such economic reverses, it suffered imminent
substantial losses and retrenchment was the most reasonable
and effective recourse to prevent the expected losses. In short,
Raycor could not establish exculpation from liability in the
illegal dismissal of San Pedro by invoking another company's
economic reverses.
23

The CA is correct.
To justify termination of employment under Article 283
24
of
the Labor Code, the employer must prove compliance with the
following requirements: (a) a written notice must be served on
the employees, and the Department of Labor and Employment
(DOLE) at least one month before the intended cessation of
business;
25
and (b) the cessation of business must be bona fide
in character.
26

It is readily apparent that petitioner did not comply with any of
the foregoing requirements. There is no evidence that it
complied with the one-month notice requirement. While
petitioner claims that it issued to respondent an October 30,
1997 Memorandum of termination of employment, it failed to
prove that such document was ever served upon respondent
and the DOLE. Moreover, the notice is less than one month, for
the memorandum states that respondents contract of
employment is to expire on November 3, 1997, or only three
days later from the date of the Memorandum.
Worse, there is no evidence at all that petitioner dismissed
respondent because it actually ceased or suspended business
operations, or it resorted to the dismissal of respondent and
other employees to stave off cessation or suspension of its
business. The best evidence of reversal of fortune is audited
financial and income statements which detail the extent and
pattern of business losses suffered by the employer.
27

Petitioner did not present any such document where it could
have demonstrated how the 1997 Asian financial currency
crisis or the rehabilitation of Uniwide adversely and
significantly affected the viability of its business.1avvphi1
Again, for failure of petitioner to discharge its burden of
proving business reverses as a ground for the lay-off of
respondent, we uphold the CA in ruling that the latter's
dismissal was illegal.
WHEREFORE, the petition is DENIED.
Costs against petitioner.
SO ORDERED.

G.R. No. L-48494 February 5, 1990
BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE,
petitioners,
vs.
RONALDO ZAMORA, the Presidential Assistant for Legal
Affairs, Office of the President, and DOROTEO R. ALEGRE,
respondents.
NARVASA, J.:
The question presented by the proceedings at bar
1
is whether
or not the provisions of the Labor Code,
2
as amended,
3
have
anathematized "fixed period employment" or employment for
a term.
The root of the controversy at bar is an employment contract
in virtue of which Doroteo R. Alegre was engaged as athletic
director by Brent School, Inc. at a yearly compensation of
P20,000.00.
4
The contract fixed a specific term for its
existence, five (5) years, i.e., from July 18, 1971, the date of
execution of the agreement, to July 17, 1976. Subsequent
subsidiary agreements dated March 15, 1973, August 28, 1973,
and September 14, 1974 reiterated the same terms and
conditions, including the expiry date, as those contained in the
original contract of July 18, 1971.
5

Some three months before the expiration of the stipulated
period, or more precisely on April 20,1976, Alegre was given a
copy of the report filed by Brent School with the Department of
Labor advising of the termination of his services effective on
July 16, 1976. The stated ground for the termination was
"completion of contract, expiration of the definite period of
employment." And a month or so later, on May 26, 1976, Alegre
accepted the amount of P3,177.71, and signed a receipt
therefor containing the phrase, "in full payment of services for
the period May 16, to July 17, 1976 as full payment of
contract."
However, at the investigation conducted by a Labor Conciliator
of said report of termination of his services, Alegre protested
the announced termination of his employment. He argued that
although his contract did stipulate that the same would
terminate on July 17, 1976, since his services were necessary
and desirable in the usual business of his employer, and his
employment had lasted for five years, he had acquired the
status of a regular employee and could not be removed except
for valid cause.
6
The Regional Director considered Brent
School's report as an application for clearance to terminate
employment (not a report of termination), and accepting the
recommendation of the Labor Conciliator, refused to give such
clearance and instead required the reinstatement of Alegre, as
a "permanent employee," to his former position without loss of
seniority rights and with full back wages. The Director
pronounced "the ground relied upon by the respondent
(Brent) in terminating the services of the complainant (Alegre)
. . . (as) not sanctioned by P.D. 442," and, quite oddly, as
prohibited by Circular No. 8, series of 1969, of the Bureau of
Private Schools.
7

Brent School filed a motion for reconsideration. The Regional
Director denied the motion and forwarded the case to the
Secretary of Labor for review.
8
The latter sustained the
Regional Director.
9
Brent appealed to the Office of the
President. Again it was rebuffed. That Office dismissed its
appeal for lack of merit and affirmed the Labor Secretary's
decision, ruling that Alegre was a permanent employee who
could not be dismissed except for just cause, and expiration of
the employment contract was not one of the just causes
provided in the Labor Code for termination of services.
10

The School is now before this Court in a last attempt at
vindication. That it will get here.
The employment contract between Brent School and Alegre
was executed on July 18, 1971, at a time when the Labor Code
of the Philippines (P.D. 442) had not yet been promulgated.
Indeed, the Code did not come into effect until November 1,
1974, some three years after the perfection of the employment
contract, and rights and obligations thereunder had arisen and
been mutually observed and enforced.
At that time, i.e., before the advent of the Labor Code, there was
no doubt whatever about the validity of term employment. It
was impliedly but nonetheless clearly recognized by the
Termination Pay Law, R.A. 1052,
11
as amended by R.A. 1787.
12

Basically, this statute provided that
In cases of employment, without a definite period, in a
commercial, industrial, or agricultural establishment or
enterprise, the employer or the employee may terminate at
any time the employment with just cause; or without just cause
in the case of an employee by serving written notice on the
employer at least one month in advance, or in the case of an
employer, by serving such notice to the employee at least one
month in advance or one-half month for every year of service
of the employee, whichever is longer, a fraction of at least six
months being considered as one whole year.
The employer, upon whom no such notice was served in case
of termination of employment without just cause, may hold the
employee liable for damages.
The employee, upon whom no such notice was served in case
of termination of employment without just cause, shall be
entitled to compensation from the date of termination of his
employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.
There was, to repeat, clear albeit implied recognition of the
licitness of term employment. RA 1787 also enumerated what
it considered to be just causes for terminating an employment
without a definite period, either by the employer or by the
employee without incurring any liability therefor.
Prior, thereto, it was the Code of Commerce which governed
employment without a fixed period, and also implicitly
acknowledged the propriety of employment with a fixed
period. Its Article 302 provided that
In cases in which the contract of employment does not have a
fixed period, any of the parties may terminate it, notifying the
other thereof one month in advance.
The factor or shop clerk shall have a right, in this case, to the
salary corresponding to said month.
The salary for the month directed to be given by the said
Article 302 of the Code of Commerce to the factor or shop
clerk, was known as the mesada (from mes, Spanish for
"month"). When Article 302 (together with many other
provisions of the Code of Commerce) was repealed by the Civil
Code of the Philippines, Republic Act No. 1052 was enacted
avowedly for the precise purpose of reinstating the mesada.
Now, the Civil Code of the Philippines, which was approved on
June 18, 1949 and became effective on August 30,1950, itself
deals with obligations with a period in section 2, Chapter 3,
Title I, Book IV; and with contracts of labor and for a piece of
work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of
Book IV. No prohibition against term-or fixed-period
employment is contained in any of its articles or is otherwise
deducible therefrom.
It is plain then that when the employment contract was signed
between Brent School and Alegre on July 18, 1971, it was
perfectly legitimate for them to include in it a stipulation fixing
the duration thereof Stipulations for a term were explicitly
recognized as valid by this Court, for instance, in Biboso v.
Victorias Milling Co., Inc., promulgated on March 31, 1977,
13

and J. Walter Thompson Co. (Phil.) v. NLRC, promulgated on
December 29, 1983.
14
The Thompson case involved an
executive who had been engaged for a fixed period of three (3)
years. Biboso involved teachers in a private school as regards
whom, the following pronouncement was made:
What is decisive is that petitioners (teachers) were well aware
an the time that their tenure was for a limited duration. Upon
its termination, both parties to the employment relationship
were free to renew it or to let it lapse. (p. 254)
Under American law
15
the principle is the same. "Where a
contract specifies the period of its duration, it terminates on
the expiration of such period."
16
"A contract of employment
for a definite period terminates by its own terms at the end of
such period."
17

The status of legitimacy continued to be enjoyed by fixed-
period employment contracts under the Labor Code
(Presidential Decree No. 442), which went into effect on
November 1, 1974. The Code contained explicit references to
fixed period employment, or employment with a fixed or definite
period. Nevertheless, obscuration of the principle of licitness of
term employment began to take place at about this time
Article 320, entitled "Probationary and fixed period
employment," originally stated that the "termination of
employment of probationary employees and those employed
WITH A FIXED PERIOD shall be subject to such regulations as
the Secretary of Labor may prescribe." The asserted objective
to was "prevent the circumvention of the right of the employee to
be secured in their employment as provided . . . (in the Code)."
Article 321 prescribed the just causes for which an employer
could terminate "an employment without a definite period."
And Article 319 undertook to define "employment without a
fixed period" in the following manner:
18

An employment shall be deemed to be without a definite period
for purposes of this Chapter where the employee has been
where the work or service to be performed is seasonal in
The question immediately provoked by a reading of Article 319
is whether or not a voluntary agreement on a fixed term or
period would be valid where the employee "has been engaged
to perform activities which are usually necessary or desirable
in the usual business or trade of the employer." The definition
seems a non sequitur. From the premise that the duties of an
employee entail "activities which are usually necessary or
desirable in the usual business or trade of the employer the"
conclusion does not necessarily follow that the employer and
employee should be forbidden to stipulate any period of time
for the performance of those activities. There is nothing
essentially contradictory between a definite period of an
employment contract and the nature of the employee's duties
set down in that contract as being "usually necessary or
desirable in the usual business or trade of the employer." The
concept of the employee's duties as being "usually necessary or
desirable in the usual business or trade of the employer" is not
synonymous with or identical to employment with a fixed
term. Logically, the decisive determinant in term employment
should not be the activities that the employee is called upon to
perform, but the day certain agreed upon by the parties for the
commencement and termination of their employment
relationship, a day certain being understood to be "that which
must necessarily come, although it may not be known when."
19

Seasonal employment, and employment for a particular project
are merely instances employment in which a period, where not
expressly set down, necessarily implied.
Of course, the term period has a definite and settled
signification. It means, "Length of existence; duration. A point
of time marking a termination as of a cause or an activity; an
end, a limit, a bound; conclusion; termination. A series of years,
months or days in which something is completed. A time of
definite length. . . . the period from one fixed date to another
fixed date . . ."
20
It connotes a "space of time which has an
influence on an obligation as a result of a juridical act, and
either suspends its demandableness or produces its
extinguishment."
21
It should be apparent that this settled and
familiar notion of a period, in the context of a contract of
employment, takes no account at all of the nature of the duties
of the employee; it has absolutely no relevance to the character
of his duties as being "usually necessary or desirable to the
usual business of the employer," or not.
Subsequently, the foregoing articles regarding employment
with "a definite period" and "regular" employment were
amended by Presidential Decree No. 850, effective December
16, 1975.
Article 320, dealing with "Probationary and fixed period
employment," was altered by eliminating the reference to
persons "employed with a fixed period," and was renumbered
(becoming Article 271). The article
22
now reads:
. . . Probationary employment.Probationary employment shall
not exceed six 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 in a probationary basis may be terminated
for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made
known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
Also amended by PD 850 was Article 319 (entitled
"Employment with a fixed period," supra) by (a) deleting
mention of employment with a fixed or definite period, (b)
adding a general exclusion clause declaring irrelevant written
or oral agreements "to the contrary," and (c) making the
provision treat exclusively of "regular" and "casual"
employment. As revised, said article, renumbered 270,
23
now
reads:
. . . 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
where the work or service to be employed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to he casual if it is not
covered by the preceding paragraph: provided, that, any
The first paragraph is identical to Article 319 except that, as
just mentioned, a clause has been added, to wit: "The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of the
parties . . ." The clause would appear to be addressed inter alia
to agreements fixing a definite period for employment. There is
withal no clear indication of the intent to deny validity to
employment for a definite period. Indeed, not only is the
concept of regular employment not essentially inconsistent
with employment for a fixed term, as above pointed out, Article
272 of the Labor Code, as amended by said PD 850, still
impliedly acknowledged the propriety of term employment: it
listed the "just causes" for which "an employer may terminate
employment without a definite period," thus giving rise to the
inference that if the employment be with a definite period,
there need be no just cause for termination thereof if the
ground be precisely the expiration of the term agreed upon by
the parties for the duration of such employment.
Still later, however, said Article 272 (formerly Article 321) was
further amended by Batas Pambansa Bilang 130,
24
to
eliminate altogether reference to employment without a
definite period. As lastly amended, the opening lines of the
article (renumbered 283), now pertinently read: "An employer
may terminate an employment for any of the following just
causes: . . . " BP 130 thus completed the elimination of every
reference in the Labor Code, express or implied, to
employment with a fixed or definite period or term.
It is in the light of the foregoing description of the development
of the provisions of the Labor Code bearing on term or fixed-
period employment that the question posed in the opening
paragraph of this opinion should now be addressed. Is it then
the legislative intention to outlaw stipulations in employment
contracts laying down a definite period therefor? Are such
stipulations in essence contrary to public policy and should not
on this account be accorded legitimacy?
On the one hand, there is the gradual and progressive
elimination of references to term or fixed-period employment
in the Labor Code, and the specific statement of the rule
25

that
. . . 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
where the work or service to be employed is seasonal in nature
and the employment is for the duration of the season.
covered by the preceding paragraph: provided, that, any
There is, on the other hand, the Civil Code, which has always
recognized, and continues to recognize, the validity and
propriety of contracts and obligations with a fixed or definite
period, and imposes no restraints on the freedom of the parties
to fix the duration of a contract, whatever its object, be it
specie, goods or services, except the general admonition
against stipulations contrary to law, morals, good customs,
public order or public policy.
26
Under the Civil Code, therefore,
and as a general proposition, fixed-term employment contracts
are not limited, as they are under the present Labor Code, to
those by nature seasonal or for specific projects with pre-
determined dates of completion; they also include those to
which the parties by free choice have assigned a specific date
of termination.
Some familiar examples may be cited of employment contracts
which may be neither for seasonal work nor for specific
projects, but to which a fixed term is an essential and natural
appurtenance: overseas employment contracts, for one, to
which, whatever the nature of the engagement, the concept of
regular employment will all that it implies does not appear
ever to have been applied, Article 280 of the Labor Code not
withstanding; also appointments to the positions of dean,
assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and
where fixed terms are a necessity, without which no
reasonable rotation would be possible. Similarly, despite the
provisions of Article 280, Policy, Instructions No. 8 of the
Minister of Labor
27
implicitly recognize that certain company
officials may be elected for what would amount to fixed
periods, at the expiration of which they would have to stand
down, in providing that these officials," . . . may lose their jobs
as president, executive vice-president or vice-president, etc.
because the stockholders or the board of directors for one
reason or another did not re-elect them."
There can of course be no quarrel with the proposition that
where from the circumstances it is apparent that periods have
been imposed to preclude acquisition of tenurial security by
the employee, they should be struck down or disregarded as
contrary to public policy, morals, etc. But where no such intent
to circumvent the law is shown, or stated otherwise, where the
reason for the law does not exist, e.g., where it is indeed the
employee himself who insists upon a period or where the
nature of the engagement is such that, without being seasonal
or for a specific project, a definite date of termination is a sine
qua non, would an agreement fixing a period be essentially evil
or illicit, therefore anathema? Would such an agreement come
within the scope of Article 280 which admittedly was enacted
"to prevent the circumvention of the right of the employee to
be secured in . . . (his) employment?"
As it is evident from even only the three examples already
given that Article 280 of the Labor Code, under a narrow and
literal interpretation, not only fails to exhaust the gamut of
employment contracts to which the lack of a fixed period
would be an anomaly, but would also appear to restrict,
without reasonable distinctions, the right of an employee to
freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must
be given a reasonable interpretation, to preclude absurdity in
its application. Outlawing the whole concept of term
employment and subverting to boot the principle of freedom of
contract to remedy the evil of employer's using it as a means to
prevent their employees from obtaining security of tenure is
like cutting off the nose to spite the face or, more relevantly,
curing a headache by lopping off the head.
It is a salutary principle in statutory construction that there
exists a valid presumption that undesirable consequences
were never intended by a legislative measure, and that a
construction of which the statute is fairly susceptible is
favored, which will avoid all objecionable mischievous,
undefensible, wrongful, evil and injurious consequences.
28

Nothing is better settled than that courts are not to give words
a meaning which would lead to absurd or unreasonable
consequences. That s a principle that does back to In re Allen
decided oil October 27, 1903, where it was held that a literal
interpretation is to be rejected if it would be unjust or lead to
absurd results. That is a strong argument against its adoption.
The words of Justice Laurel are particularly apt. Thus: "The fact
that the construction placed upon the statute by the appellants
would lead to an absurdity is another argument for rejecting it.
. . ."
29

. . . We have, here, then a case where the true intent of the law
is clear that calls for the application of the cardinal rule of
statutory construction that such intent of spirit must prevail
over the letter thereof, for whatever is within the spirit of a
statute is within the statute, since adherence to the letter
would result in absurdity, injustice and contradictions and
would defeat the plain and vital purpose of the statute.
30

Accordingly, and since the entire purpose behind the
development of legislation culminating in the present Article
280 of the Labor Code clearly appears to have been, as already
observed, to prevent circumvention of the employee's right to
be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral
agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to
the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed
period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee
and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee
dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over
the latter. Unless thus limited in its purview, the law would be
made to apply to purposes other than those explicitly stated by
its framers; it thus becomes pointless and arbitrary, unjust in
its effects and apt to lead to absurd and unintended
consequences.
Such interpretation puts the seal on Bibiso
31
upon the effect of
the expiry of an agreed period of employment as still good
rulea rule reaffirmed in the recent case of Escudero vs. Office
of the President (G.R. No. 57822, April 26, 1989) where, in the
fairly analogous case of a teacher being served by her school a
notice of termination following the expiration of the last of
three successive fixed-term employment contracts, the Court
held:
Reyes (the teacher's) argument is not persuasive. It loses sight
of the fact that her employment was probationary, contractual
in nature, and one with a definitive period. At the expiration of
the period stipulated in the contract, her appointment was
deemed terminated and the letter informing her of the non-
renewal of her contract is not a condition sine qua non before
Reyes may be deemed to have ceased in the employ of
petitioner UST. The notice is a mere reminder that Reyes'
contract of employment was due to expire and that the
contract would no longer be renewed. It is not a letter of
termination. The interpretation that the notice is only a
reminder is consistent with the court's finding in Labajo supra.
...
32

Paraphrasing Escudero, respondent Alegre's employment was
terminated upon the expiration of his last contract with Brent
School on July 16, 1976 without the necessity of any notice.
The advance written advice given the Department of Labor
with copy to said petitioner was a mere reminder of the
impending expiration of his contract, not a letter of
termination, nor an application for clearance to terminate
which needed the approval of the Department of Labor to
make the termination of his services effective. In any case, such
clearance should properly have been given, not denied.
WHEREFORE, the public respondent's Decision complained of
is REVERSED and SET ASIDE. Respondent Alegre's contract of
employment with Brent School having lawfully terminated
with and by reason of the expiration of the agreed term of
period thereof, he is declared not entitled to reinstatement and
the other relief awarded and confirmed on appeal in the
proceedings below. No pronouncement as to costs.
SO ORDERED.
Separate Opinions
SARMIENTO, J., concurring and dissenting:
I am agreed that the Labor Code has not foresaken "term
employments", held valid in Biboso V. Victorias Milling
Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA 250).
That notwithstanding, I can not liken employment contracts to
ordinary civil contracts in which the relationship is established
by stipulations agreed upon. Under the very Civil Code:
Art. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public interest
that labor contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent
living for the laborer.
The courts (or labor officials) should nevertheless be vigilant
as to whether or not the termination of the employment
contract is done by reason of expiration of the period or to
cheat the employee out of office. The latter amounts to
circumvention of the law.
Separate Opinions
SARMIENTO, J., concurring and dissenting:
I am agreed that the Labor Code has not foresaken "term
employments", held valid in Biboso V. Victorias Milling
Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA 250).
That notwithstanding, I can not liken employment contracts to
ordinary civil contracts in which the relationship is established
by stipulations agreed upon. Under the very Civil Code:
Art. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public interest
that labor contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent
living for the laborer.
The courts (or labor officials) should nevertheless be vigilant
as to whether or not the termination of the employment
contract is done by reason of expiration of the period or to
cheat the employee out of office. The latter amounts to
circumvention of the law.
G.R. No. 74004. August 10, 1989
A.M. ORETA & CO., INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and SIXTO
GRULLA JR., respondents.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of
Court seeking annulment of the resolution of the respondents
National Labor Relations Commission dated January 17, 1986
(p. 24, rollo) in BES Case no. 8-1371 entitled , "SIXTO GRULLA,
JR., Complainant, versus A.M. ORETA & COMPANY INC. and/or
ENGINEERING CONSTRUCTION & INDUSTRIAL
DEVELOPMENT CO. (ENDECO), Respondents", affirming the
decision of the Philippine Overseas Employment
Administration (POEA) awarding to private respondents
herein Sixto Grulla the salaries corresponding to the unexpired
portion of his employment contract.
The antecedent facts are as follows:
Private respondent Grulla was engaged by Engineering
Construction and Industrial Development Company (ENDECO)
through A.M. Oreta and Co., Inc., as a carpenter in its projects in
Jeddah, Saudi Arabia. The contract of employment, which was
entered into June 11, 1980 was for a period of twelve (12)
months. Respondent Grulla left the Philippines for Jeddah,
Saudi Arabia on August 5, 1980.
On August 15, 1980, Grulla met an accident which fractured his
lumbar vertebra while working at the jobsite. He was rushed to
the New Jeddah Clinic and was confined there for twelve (12)
days. On August 27, 1980, Grulla was discharged from the
hospital and was told that he could resume his normal duties
after undergoing physical therapy for two weeks.
On September 18, 1980, respondent Grulla reported back to
his Project Manager and presented to the latter a medical
certificate declaring the former already fit for work. Since then,
he started working again until he received a notice of
termination of his employment on October 9, 1980.
In December, 1981, respondent Grulla filed a complaint for
illegal dismissal, recovery of medical benefits, unpaid wages
for the unexpired ten (10) months of his contract and the sum
of P1,000.00 as reimbursement of medical expenses against
A.M. Oreta and Company, Inc., and Engineering Construction
and Industrial Development Co. (ENDECO) with the Philippine
Overseas Employment Administration (POEA).lwph1.t
The petitioner A.M. Oreta and Company, Inc and ENDECO filed
their answer and alleged that the contract of employment
entered into between petitioners and Grulla provides, as one of
the grounds for termination, violations of the rules and
regulations promulgated by the contractor; and that Grulla was
dismissed because he has not performed his duties
satisfactorally within the probationary period of three months.
On August 8, 1985, the POEA rendered a decision (pp. 97-107,
Rollo) the dispositive portion of which states, inter alia:
In view of the foregoing, this Office finds and so holds that
complainants dismissal was illegal and warrants the award of
his wages for the unexpired portion of the contract.
2. Anent the complainant's claim for medical expenses, this
Office finds the same well-taken. Respondent did not deny
either specifically or generally said claim. Hence, it is deemed
admitted.
Wherefore, judgment is hereby rendered ordering repondents
A.M. Oreta and Company, Inc , and its foreign principal
Engineering Construction and Industrial Development
Company (ENDECO) jointly and severally to pay the
complainant within ten (10) days from receipt of this Order the
sum of THREE THOUSAND SEVEN HUNDRED U.S. DOLLARS
(U.S.$ 3,700.00) or its equivalent at the time of payment
representing complainant's salaries for the unexpired portion
of his contract for ten (10) months and the sum of ONE
THOUSAND PESOS ( P1,00.00 ) representing reimbursement of
medical expenses.
Respondent is likewise ordered to pay attorney's fees
equivalent to ten (10%) percent of total award
SO ORDERED.
Petitioner appealed from the adverse decision to respondent
Commission. On January 17, 1986, respondent Commission
dismissed the appeal for lack of merit and affirmed in toto the
decision of the POEA.
On April 1, 1986, the instant petition was filed on the ground
that the respondent Commission commited grave abuse of
discretion in affirming the decision of the POEA. A temporary
restraining order was issued by this court on April 23, 1986,
enjoining the respondents from enforcing the questioned
resolution of the respondent Commission.
The issue to be resolved in the instant case are whether or not
the employment of respondent Grulla was illegaly terminated
by the petitioner; and whether or not the respondent Grulla is
entitled to salaries corresponding to the unexpired portion of
his employment contract.
Petitioner contends that the respondent Grulla was validly
dismissed because the latter was still a probationary
employee; and that his dismissal was justified on the basis of
his unsatisfactory performance of his job during the
probationary period. This contention has no merit.
Article 280 (formerly Article 281) of the Labor Code, as
amended, provides:
Article 280. Regular and Casual Employment The provisions
of written agreement to the contrary not withstanding and
regardless of the oral agreements of the parties, an
usually necessary or desireable in the usual business or trade
of employer, except where the employment has been fixed for
of which has been determined at the time of engagement of the
employment or where the work or service to be performed is
the season.
covered by the preceding paragraph: Provided, that any
It may be well to cite at this point Policy Instructions No. 12 of
the then Minister of Labor (Now Secretary of Labor and
Employment) which provides:
PD 850 has defined the concept of regular and casual
employment. What determines regularity or casualness is not
employment contract, written or otherwise, but the nature of
the job. If the job is usually necessary or desireable to the main
business of the employer, the employment is regular. . .
Petitioner admitted that respondent Grulla was employed in
the company as carpenter for a period of twelve (12) months
before he was dismissed on October 9, 1980. A perusal of the
employment contract reveals that although the period of
employment of respondent Grulla is twelve (12) months, the
contract is renewable subject to future agreements of the
parties. It is clear from the employment contract that the
respondent Grulla was hired by the company as a regular
employee and not just mere probationary employee.
On the matter of probationary employment, the law in point is
Article 281 (formerly 282) of the Labor Code which provides in
part:
Art. 281 Probationary Employment . . .The services of an
employee who has been engaged on a probationary basis may
be terminated for a just cause or when he fails to qualify as a
regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of
engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
(Italics supplied)
The law is clear to the effect that in all cases involving
employees engaged on probationary period basis, the
employer shall make known to the employee at the time he is
hired, the standards by which he will qualify as a regular
employee. Nowhere in the employment contract executed
between petitioner company and respondent Grulla is there a
stipulation that the latter shall undergo a probationary period
for three months before he can qualify as a regular employee.
There is also no evidence on record showing that the
respondent Grulla has been appraised of his probationary
status and the requirements which he should comply in order
to be a regular employee. In the absence of this requisites,
there is justification in concluding that respondent Grulla was a
regular employee at the time he was dismissed by petitioner.
As such, he is entitled to security of tenure during his period of
employment and his services cannot be terminated except for
just and authorized causes enumerated under the Labor Code
and under the employment contract.
Granting, in gratia argumenti, that respondent is a
probationary employee, he cannot, likewise, be removed
except for cause during the period of probation. Although a
probationary or temporary employee has limited tenure, he
still enjoys security of tenure. During his tenure of employment
or before his contract expires, he cannot be removed except for
cause as provided by law (Euro-Linea Phils., Inc. v. NLRC, No. L-
75782, December 1, 1987, 156 SCRA 78; Manila Hotel
Corporation v. NLRC, No. L-53453, January 22, 1986, 141 SCRA
169).lwph1.t
Article 282 of the Labor Code sets forth the following just
causes for which an employer may terminate an employment,
namely:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his
family or his duly authorized representative; and
(e) other cause analogous to the foregoing
The alleged ground of unsatisfactory performance relied upon
by petitioner for dismissing respondent Grulla is not one of the
just causes for dismissal provided in the Labor Code. Neither is
it included among the grounds for termination of employment
under Article VII of the contract of employment executed by
petitioner company and respondent Grulla (p. 18, Rollo).
Moreover, petitioner has failed to show proof of the particular
acts or omissions constituting the unsatisfactory performance
of Grulla of his duties, which was allegedly due to his poor
physical state after the accident. Contrary to petitioner's
claims, records show that the medical certificate issued by the
hospital where respondent Grulla was confined as a result of
the accident, clearly and positively stated that Grulla was
already physically fit for work after he was released from the
hospital (p. 102, Rollo).lwph1.t
Anent the respondent Commission's finding of lack of due
process in the dismissal of Grulla, the petitioner claims that
notice and hearing are important only if the employee is not
aware of the problems affecting his employment; that the same
is not true in the instant case where respondent Grulla knew
all along that he could no longer effectively perform his job due
to his physical condition. We find that this contention has no
legal basis.
The twin requirements of notice and hearing constitute
essential elements of due process in cases of employee
dismissal: the requirement of notice is intended to inform the
employee concerned of the employer's intent to dismiss and
the reason for the proposed dismissal, while the requirement
of hearing affords the employee an opportunity to answer his
employer's charges against him and accordingly to defend
himself therefrom before dismissal is effected. Neither of these
requirements can be dispensed with without running afoul of
the due process requirement of the Constitution (Century
Textile Mills, Inc., et al. v. NLRC, et al., G.R. No. 77859, May
25,1988).
In the case at bar, respondent Grulla was not, in any manner,
notified of the charges against him before he was outrightly
dismissed. Neither was any hearing or investigation conducted
by the company to give the respondent a chance to be heard
concerning the alleged unsatisfactory performance of his work.
In view of the foregoing, the dismissal of respondent Grulla
violated the security of tenure under the contract of
employment which specifically provides that the contract term
shall be for a period of twelve (12) calendar months.
Consequently the respondent Grulla should be paid his salary
for the unexpired portion of his contract of employment which
is ten (10) months (See Cuales v. NLRC, et al., No. L-57379 April
28, 1983, 121 SCRA 812).
The findings of the POEA and the respondent Commission that
the respondent Grulla is entitled to salaries in the amount of
US$ 3,700.00 or its equivalent in Philippine currency for the
unexpired portion of his contract and the sum of P1,000.00 as
reimbursement of medical expenses bear great weight. Well-
established is the principle that findings of administrative
agencies which have acquired expertise because their
jurisdiction is confined to specific matters are generally
accorded not only respect but even finality. Judicial review by
this Court on labor cases does not go so far as to evaluate the
sufficiency of the evidence upon which the labor officer or
office based his or its determination but are limited to issues of
jurisdiction or grave abuse of discretion (Special Events and
Central Shipping Office Workers Union v. San Miguel
Corporation, Nos. L-51002-06, May 30, 1983, 122 SCRA 557).
In the instant case, the assailed Resolution of the respondent
Commission is not tainted with arbitrariness that would
amount to grave abuse of discretion or lack of jurisdiction and
therefore, We find no reason to disturb the same.
ACCORDINGLY, premises considered, the instant petition is
dismissed for lack of merit and the resolution of the
respondent Commission dated January 17, 1986 is hereby
AFFIRMED. The temporary restraining order issued on April
23, 1986 is lifted.
SO ORDERED.
G.R. No. 152427. August 9, 2005
INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC.,
Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and GLEN
SOLON, Respondent.
D E C I S I O N
QUISUMBING, J.:
This petition for review assails the Decision
1
dated October
30, 2001 of the Court of Appeals and its Resolution
2
dated
February 28, 2002 in CA-G.R. SP No. 60136, denying the
petitioners motion for reconsideration for lack of merit. The
decision affirmed the National Labor Relations Commission
(NLRC) which declared private respondent Glen Solon a
regular employee of the petitioner and awarded him 13th
month pay, service incentive leave pay, reinstatement to his
former position with full backwages from the time his salary
was withheld until his reinstatement.
Petitioner is a plumbing contractor. Its business depends on
the number and frequency of the projects it is able to contract
with its clients.
3

Private respondent Solon worked for petitioner. His
employment records is as follows:
December 14, 1994 up to January 14, 1995 St. Charbel
Warehouse
February 1, 1995 up to April 30, 1995 St. Charbel Warehouse
May 23, 1995 up to June 23, 1995 St. Charbel Warehouse
August 15, 1995 up to October 31, 1995 St. Charbel Warehouse
November 2, 1995 up to January 31, 1996 St. Charbel
Warehouse
May 13, 1996 up to June 15, 1996 Ayala Triangle
August 27, 1996 up to November 30, 1996 St. Charbel
Warehouse
4

July 14, 1997 up to November 1997 ICPWI Warehouse
November 1997 up to January 5, 1998 Cathedral Heights
January 6, 1998 Rockwell Center
5

On February 23, 1998, while private respondent was about to
log out from work, he was informed by the warehouseman that
the main office had instructed them to tell him it was his last
day of work as he had been terminated. When private
respondent went to the petitioners office on February 24,
1998 to verify his status, he found out that indeed, he had been
terminated. He went back to petitioners office on February 27,
1998 to sign a clearance so he could claim his 13th month pay
and tax refunds. However, he had second thoughts and refused
to sign the clearance when he read the clearance indicating he
had resigned. On March 6, 1998, he filed a complaint alleging
that he was illegally dismissed without just cause and without
due process.
6

In a Decision dated February 26, 1999, the Labor Arbiter ruled
that private respondent was a regular employee and could only
be removed for cause. Petitioner was ordered to reinstate
private respondent to his former position with full backwages
from the time his salary was withheld until his actual
reinstatement, and pay him service incentive leave pay, and
13th month pay for three years in the amount of P2,880 and
P14,976, respectively.
Petitioner appealed to the National Labor Relations
Commission (NLRC), which ruled:
WHEREFORE, prescinding from the foregoing and in the
interest of justice, the decision of the Labor Arbiter is hereby
AFFIRMED with a MODIFICATION that the 13th month pay
should be given only for the year 1997 and portion of 1998.
Backwages shall be computed from the time he was illegally
dismissed up to the time of his actual reinstatement. Likewise,
service incentive leave pay for three (3) years is also awarded
to appellee in the amount of P2,880.00.
SO ORDERED.
7

Petitioners Motion for Reconsideration was denied.
8

Petitioner appealed to the Court of Appeals, alleging that the
NLRC committed grave abuse of discretion in finding that the
private respondent was a regular employee and in awarding
13th month pay, service incentive leave pay, and holiday pay to
the private respondent despite evidence of payment. The said
petition was dismissed for lack of merit.
9

Before us now, petitioner raises the following issues: (1)
Whether the respondent is a project employee of the petitioner
or a regular employee; and (2) Whether the Court of Appeals
erred seriously in awarding 13th month pay for the entire year
of 1997 and service incentive leave pay to the respondent and
without taking cognizance of the evidence presented by
petitioner.
10

The petitioner asserts that the private respondent was a
project employee. Thus, when the project was completed and
private respondent was not re-assigned to another project,
petitioner did not violate any law since it was petitioners
discretion to re-assign the private respondent to other
projects.
11

Article 280 of the Labor Code states:
The provisions of written agreement of 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
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
the season (Italics supplied.)
We held in Tomas Lao Construction v. NLRC
12
that the principal
test in determining whether an employee is a "project
employee" or "regular employee," is, whether he is assigned to
carry out a "specific project or undertaking," the duration (and
scope) of which are specified at the time the employee is
engaged in the project.
13
"Project" refers 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
from the undertakings of the company. Such job or
undertaking begins and ends at determined or determinable
times.
14

In our review of the employment contracts of private
respondent, we are convinced he was initially a project
employee. The services he rendered, the duration and scope of
each project are clear indications that he was hired as a project
employee.
We concur with the NLRC that while there were several
employment contracts between private respondent and
petitioner, in all of them, private respondent performed tasks
which were usually necessary or desirable in the usual
business or trade of petitioner. A review of private
respondents work assignments patently showed he belonged
to a work pool tapped from where workers are and assigned
whenever their services were needed. In a work pool, the
workers do not receive salaries and are free to seek other
employment during temporary breaks in the business. They
are like regular seasonal workers insofar as the effect of
temporary cessation of work is concerned. This arrangement is
beneficial to both the employer and employee for it prevents
the unjust situation of "coddling labor at the expense of
capital" and at the same time enables the workers to attain the
status of regular employees.
15
Nonetheless, the pattern of re-
hiring and the recurring need for his services are sufficient
evidence of the necessity and indispensability of such services
to petitioners business or trade.
16

In Maraguinot, Jr. v. NLRC
17
we ruled that once a project or
work pool employee has been: (1) continuously, as opposed to
intermittently, re-hired 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.
In this case, did the private respondent become a regular
employee then?
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. 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.
18
Thus, we held that where the
employment of project employees is extended long after the
supposed project has been finished, the employees are
removed from the scope of project employees and are
considered regular employees.
19

While length of time may not be the controlling test for project
employment, it is vital in determining if the employee was
hired for a specific undertaking or tasked to perform functions
vital, necessary and indispensable to the usual business or
trade of the employer. Here, private respondent had been a
project employee several times over. His employment ceased
to be coterminous with specific projects when he was
repeatedly re-hired due to the demands of petitioners
business.
20
Where from the circumstances it is apparent that
periods have been imposed to preclude the acquisition of
tenurial security by the employee, they should be struck down
as contrary to public policy, morals, good customs or public
order.
21

Further, Policy Instructions No. 20 requires employers to
submit a report of an employees termination to the nearest
public employment office every time his employment was
terminated due to a completion of a project. The failure of the
employer to file termination reports is an indication that the
employee is not a project employee.
22
Department Order No.
19 superseding Policy Instructions No. 20 also expressly
provides that the report of termination is one of the indications
of project employment.
23
In the case at bar, there was only one
list of terminated workers submitted to the Department of
Labor and Employment.
24
If private respondent was a project
employee, petitioner should have submitted a termination
report for every completion of a project to which the former
was assigned.
Juxtaposing private respondents employment history, vis the
requirements in the test to determine if he is a regular worker,
we are constrained to say he is.
As a regular worker, private respondent is entitled to security
of tenure under Article 279 of the Labor Code
25
and can only be
removed for cause. We found no valid cause attending to
private respondents dismissal and found also that his
dismissal was without due process.
Additionally, Article 277(b) of the Labor Code provides that
... Subject to the constitutional right of workers to security of
tenure and their right to be protected against dismissal except
for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the
employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a
statement of the causes for termination and shall afford the
latter ample opportunity to be heard and to defend himself
with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated
pursuant to guidelines set by the Department of Labor and
Employment
The failure of the petitioner to comply with these procedural
guidelines renders its dismissal of private respondent, illegal.
An illegally dismissed employee is entitled to reinstatement
with full backwages, inclusive of allowances, and to his other
benefits computed from the time his compensation was
withheld from him up to the time of his actual reinstatement,
pursuant to Article 279 of the Labor Code.
However, we note that the private respondent had been paid
his 13th month pay for the year 1997. The Court of Appeals
erred in granting the same to him.
Article 95(a) of the Labor Code governs the award of service
incentive leave. It provides that every employee who has
rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay, and Section
3, Rule V, Book III of the Implementing Rules and Regulations,
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 as
one year. Accordingly, private respondents service incentive
leave credits of five days for every year of service, based on the
actual service rendered to the petitioner, in accordance with
each contract of employment should be computed up to the
date of reinstatement pursuant to Article 279 of the Labor
Code.
26

WHEREFORE, the assailed Decision dated October 30, 2001
and the Resolution dated February 28, 2002 of the Court of
Appeals in CA-G.R. SP No. 60136, are AFFIRMED with
MODIFICATION. The petitioner is hereby ORDERED to (1)
reinstate the respondent with no loss of seniority rights and
other privileges; and (2) pay respondent his backwages, 13th
month pay for the year 1998 and Service Incentive Leave Pay
computed from the date of his illegal dismissal up to the date of
his actual reinstatement. Costs against petitioner.
SO ORDERED.
G.R. No. 150658 February 9, 2007
NOELITO FABELA, MARCELO DELA CRUZ III, ROGELIO
LASAT, HENRY MALIWANAG, MANUEL DELOS SANTOS, and
ROMMEL QUINES, Petitioners,
vs.
SAN MIGUEL CORPORATION and ARMAN HICARTE,
Respondents.
D E C I S I O N
CARPIO MORALES, J.:
On review is the July 30, 2001 Decision of the Court of Appeals
reversing the ruling of the National Labor Relations
Commission (NLRC) and the Labor Arbiter finding petitioners
to have been illegally dismissed.
Petitioners, along with Joselito de Lara and John Alovera, were
hired by respondent San Miguel Corporation (SMC) as "Relief
Salesmen" for the Greater Manila Area (GMA) under separate
but almost similarly worded "Contracts of Employment With
Fixed Period." After having entered into successive contracts of
the same nature with SMC, the services of petitioners, as well
as de Lara and Alovera, were terminated after SMC no longer
agreed to forge another contract with them.
The dates of hiring of petitioners, et al. and the termination of
their employment are set forth below:
1

Respondent SMC and its co-respondent Arman Hicarte, who
was its Human Resources Manager, claimed that the hiring of
petitioners was not intended to be permanent, as the same was
merely occasioned by the need to fill in a vacuum arising from
SMCs gradual transition to a new system of selling and
delivering its products.
Respondents explained that SMC previously operated under
the "Route System,"
2
but began implementing in 1993 the "Pre-
Selling System"
3
in which the salesmen under the earlier
system would be replaced by Accounts Specialists which called
for upgraded qualifications.
4

In support of their claim, respondents presented the affidavit
of Mariano N. Lopez, Assistant Vice President and Area Sales
Manager for the GMA Sales Operations of San Miguel Brewing
Philippines.
5

While some of the qualified regular salesmen were readily
upgraded to the position of Accounts Specialist, respondents
claimed that SMC still had to sell its beer products using the
conventional routing system during the transition stage, thus
giving rise to the need for temporary employees; and the
members of the regular Route Crew then existing were
required to undergo a training program to determine whether
they possessed or could be trained for the necessary attitude
and aptitude required of an Accounts Specialist, hence, the
hiring of petitioners and others for a fixed period, co-terminus
with the completion of the transition period and Training
Program for all prospective Accounts Specialists.
6

Claiming that they were illegally dismissed, petitioners, as well
as de Lara and Alovera, filed separate complaints for illegal
dismissal against respondents. The complaints were
consolidated.
By Decision dated September 23, 1998, Labor Arbiter Manuel
P. Asuncion held that except for de Lara and Alovera, the
complainants-herein petitioners were illegally dismissed. Thus
the decision disposed:
IN LIGHT OF THE FOREGOING CONSIDERATIONS, the
respondents are hereby ordered to reinstate Marcelo Dela
Cruz, Norlito Fabela, Henry Maliwanag, Rogelio Lasat, Manuel
Delos Santos and Rommel Quines to their former positions
with full backwages from the time their salaries were withheld
until they are actually reinstated. As of this date, their
backwages has reached the sum of P562,336.64. (See attached
computation). The complaints of Jun Alovera and Joselito De
Lara must be dismissed for lack of merit.
SO ORDERED.
The Decision of the Labor Arbiter was affirmed on appeal by
the NLRC, by Resolution of April 28, 2000. Respondents
Motion for Reconsideration was denied, hence, they filed a
Petition for Certiorari with the Court of Appeals before which
they contended that herein petitioners were validly hired for a
NAME DATE HIRED
DATE OF
TERMINATION OF
EMPLOYMENT
NOELITO
FABELA
MAY, 1992 AUGUST, 1996
ROGELIO LASAT
AUGUST,
1995
SEPTEMBER, 1997
HENRY
MALIWANAG
MAY, 1995 SEPTEMBER, 1997
MANUEL DELOS
SANTOS
MAY, 1995 SEPTEMBER, 1997
JOSELITO DE
LARA
MAY, 1994 JULY 30,1997
ROMMEL
QUINES
OCTOBER,
1994
SEPTEMBER, 1997
MARCELO DELA
CRUZ
DECEMBER,
1991
MAY, 1997
JOHN ALOVERA JUNE, 1992 MAY, 1997
fixed period which was not renewed, hence, the termination of
their services was valid.
By Decision of July 30, 2001,
7
the Court of Appeals granted
respondents petition and accordingly reversed the decision of
the Labor Arbiter and of the NLRC. The appellate court
accordingly dismissed petitioners complaints. In granting
respondents petition, the appellate court ratiocinated:
At bar, there is not any least indication that the employment
contract was not knowingly and voluntarily agreed upon
between the parties nary any force or improper pressure upon
the employee nor any circumstances vitiating his consent.
Neither is there any indication or signal of improper pressure
in the execution of the contract nor that the employer and the
employee did not deal with each other on equal terms absent
any moral dominance by the employer upon the employee.
Finally, at the time the contracts were entered into, the parties
were pretty aware of the day certain which must necessarily
come although still unknown when at which time the contract
will self- expire.
8
(Underscoring supplied)
Their motion for reconsideration having been denied by the
Court of Appeals by Resolution of October 29, 2001, petitioners
filed the present petition.
The validity of the termination of petitioners services depends
on whether they were hired for a fixed period, as claimed by
respondents, or as regular employees who may not be
dismissed except for just or authorized causes.
Article 280 of the Labor Code defines regular employment as
follows:
ART. 280. Regular and casual employment. The provisions of
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.
covered by the preceding paragraph: Provided, That any
such activity actually exists. (Emphasis, italics and
underscoring supplied)
In Pure Foods Corp. v. NLRC,
9
this Court held that under the
above-quoted provision, there are two kinds of regular
employees, namely: (1) those who are 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 activity in
which they are employed.
Article 280 also recognizes project employees, those whose
"employment has been fixed for a specific project or
undertaking." (Underscoring supplied)
Project employment is distinct from casual employment
referred to in the second paragraph of Article 280 for, as
clarified in Mercado, Sr. v. NLRC,
10
the proviso that "any
employee who has rendered at least one year of service . . .
shall be considered a regular employee" does not apply to
project employees, but only to casual employees.
Although Article 280 does not expressly recognize
employment for a fixed period, which is distinct from
employment which has been fixed for a specific project or
undertaking, Brent School, Inc. v. Zamora
11
has clarified that
employment for a fixed period is not in itself illegal, viz:
There can of course be no quarrel with the proposition that
where from the circumstances it is apparent that periods
have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or
disregarded as contrary to public policy, morals, etc. But
where no such intent to circumvent the law is shown, or
stated otherwise, where the reason for the law does not
exist, e.g., where it is indeed the employee himself who
insists upon a period or where the nature of the
engagement is such that, without being seasonal or for a
specific project, a definite date of termination is a sine qua
non, would an agreement fixing a period essentially evil or
illicit, therefore anathema? Would such an agreement come
within the scope of Article 280 which admittedly was enacted
"to prevent the circumvention of the right of the employee to
be secured in x x (his) employment?"
x x x x
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present Article
280 of the Labor Code clearly appears to have been,. as already
observed, to prevent circumvention of the employees right to
be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral
agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to
the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed
period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee
and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee
moral dominance whatever being exercised by the former over
the latter. x x x (Emphasis and underscoring
supplied)1awphi1.net
Thus, even if the duties of an employee consist of activities
usually necessary or desirable in the usual business of the
employer, it does not necessarily follow that the parties are
forbidden from agreeing on a period of time for the
performance of such activities through a contract of
employment for a fixed term.
12

Respondents, without disputing that the duties of petitioners
consisted of activities necessary or desirable in its usual
business or trade, claim that the contracts of employment
entered into by respondent SMC with the herein petitioners
are valid fixed-term contracts under the Brent doctrine.
Albeit the Court of Appeals ruled in respondents favor on the
basis of a finding that petitioners were validly hired as project
employees,
13
respondents deny that petitioners were project
employees, asserting that they were hired only as fixed-term
employees.
14

Since respondents attribute the termination of petitioners
employment to the expiration of their respective contracts, a
determination of whether petitioners were hired as project or
seasonal employees, or as fixed-term employees without any
force, duress or improper pressure having been exerted
against them is in order. If petitioners fall under any of these
categories, then indeed their termination follows from the
expiration of their contracts.
Since, as earlier stated, respondents themselves deny that
petitioners were project employees, and they do not allege that
they were seasonal employees, what remains for
determination is whether petitioners were fixed-term
employees under the Brent doctrine.
As the resolution of this issue necessarily involves a calibration
of respondents evidence, the factual findings of the Labor
Arbiter and the NLRC assume importance.
15

This Court has consistently adhered to the rule that in
reviewing administrative decisions such as those rendered by
the NLRC, the findings of fact made therein are to be
accorded not only great weight and respect, but even
finality, for as long as they are supported by substantial
evidence. It is not the function of the Court to once again
review and weigh the conflicting evidence, determine the
credibility of the witnesses or otherwise substitute its own
judgment for that of the administrative agency on the
sufficiency of the evidence. Nevertheless, when the inference
made or the conclusion drawn on the basis of certain state of
facts is manifestly mistaken, the Court is not estopped from
exercising its power of review. (Emphasis and underscoring
supplied)
Significantly, both the Labor Arbiter and the NLRC found that
petitioners were all regular employees. The NLRC even
explicitly stated that the periods stated in petitioners
contracts were fixed not because of temporary exigencies but
because of a scheme to preclude petitioners from acquiring
tenurial security.
The Court of Appeals, however, found that "[a]ll indications
and established facts lead to the inevitable conclusion that the
contracts of employment subject matter of this case were
executed in good faith and for a lawful and moral purpose,"
16

and thus concluded that the NLRC committed grave abuse of
discretion for holding otherwise.
A considered assessment of the findings of the Labor Arbiter
and the NLRC, however, shows that the same are supported by
substantial evidence.
Respondents contention that there are fixed periods stated in
the contracts of employment does not lie. Brent instructs that a
contract of employment stipulating a fixed-term, even if clear
as regards the existence of a period, is invalid if it can be shown
that the same was executed with the intention of
circumventing security of tenure, and should thus be ignored.
And so does Paguio v. NLRC,
17
thus:
x x x A stipulation [for a fixed-term] in an agreement can be
ignored as and when it is utilized to deprive the employee of
his security of tenure. The sheer inequality that characterizes
employer-employee relations, where the scales generally tip
against the employee, often scarcely provides him real and
better options.
Indeed, substantial evidence exists in the present case showing
that the subject contracts were utilized to deprive petitioners
of their security of tenure.
The contract of employment of petitioner Fabela, for instance,
states that the transition period from the Route System to the
Pre-Selling System would be twelve (12) months from April 4,
1995, thus:
WHEREAS, the FIRST PARTY [San Miguel Corporation] is
undertaking a project to manage the transition in fully
implementing the pre-selling system;
WHEREAS, during the transition period, which is twelve
(12) months before the new system will be fully implemented
in the districts planned for in 1995, the FIRST PARTY will
conduct a training for the regular Salesmen and will continue
to sell its therefore (sic) beer products using the conventional
system and will therefore need to hire relief personnel to
undertake the activities thereinafter mentioned which are to
be undertaken/performed for a limited/specific period which
activities shall hereinafter be referred to as PROJECT
ACTIVITIES.
x x x x
SECTION ONE: "TERM OF CONTRACT"
The FIRST PARTY hereby hires the SECOND PARTY as
"PROJECT RELIEF SALESMAN" to perform/undertake the
activities listed in Annex "A" hereof at its Greater Manila Area
Sales Operations, San Miguel Brewing Group and the latter
hereby accepts and agrees such undertaking for a period of
twelve (12) months, starting from April 4, 1995 to April 3,
1996 or upon completion of the project hereinafter
referred to, whichever comes first, subject to the general
supervision, order, advice and directions of the FIRST PARTY.
x x x x
18
(Emphasis and underscoring supplied)
It bears noting, however, that petitioner Fabela, besides being
hired again for another fixed period of four (4) months after
the lapse in April 1996 of the one-year contract, had already
been working for respondent SMC on a fixed-term basis as
early as 1992, or one year before respondent SMC even began
its shift to the Pre-selling System in 1993.
Similarly, petitioner Marcelo dela Cruz III was hired prior to
the alleged transition to the new system. In fact, he was hired
in December 1991, even earlier than petitioner Fabela.
The NLRC, therefore, had sufficient basis to believe that the
shift of SMC to the Pre-Selling System was not the real basis for
the forging of fixed-term contracts of employment with
petitioners and that the periods were fixed only as a means to
preclude petitioners from acquiring security of tenure.
Moreover, other than the earlier-mentioned affidavit of
Mariano N. Lopez, respondents have presented no evidence
that the shift to the Pre-Selling System occurred as early as
1993. The employment contracts presented by respondents in
support of their claim that petitioners were hired only for the
transition stage are dated not earlier than April 1995.
19
Even
the contract of petitioner Fabela expressly states that the
transition period is twelve months, beginning in 1995, rather
than 1993. If the shift to the new system only began in 1995,
however, then not only petitioners Fabela and dela Cruz were
hired prior to the transition, but also petitioner Quines, who
was hired in 1994.
As Brent pronounces, a fixed-term employment is valid only
under certain circumstances, such as when the employee
himself insists upon the period, or where the nature of the
engagement is such that, without being seasonal or for a
specific project, a definite date of termination is a sine qua non.
That petitioners themselves insisted on the one-year fixed-
term is not even alleged by respondents. In fact, the sustained
desire of each of the petitioners to enter into another
employment contract upon the termination of the earlier ones
clearly indicates their interest in continuing to work for SMC.
Moreover, respondents have not established that the
engagement of petitioners services, which is not in the nature
of a project employment, required a definite date of
termination as a sine qua non.
In fine, the finding of the Labor Arbiter and the NLRC that the
execution of the contracts was merely intended to circumvent
petitioners security of tenure merits this Courts concurrence.
WHEREFORE, the petition is GRANTED. The assailed Decision
of the Court of Appeals is SET ASIDE. The Decision dated
September 23, 1998 of the Labor Arbiter, which was affirmed
by the National Labor Relations Commission by Resolution of
April 28, 2000, is REINSTATED.
SO ORDERED.
G.R. No. 122653 December 12, 1997
PURE FOODS CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO
CORDOVA, VIOLETA CRUSIS, ET AL., * respondents.
DAVIDE, JR., J.:
The crux of this petition for certiorari is the issue of whether
employees hired for a definite period and whose services are
necessary and desirable in the usual business or trade of the
employer are regular employees.
The private respondents (numbering 906) were hired by
petitioner Pure Foods Corporation to work for a fixed period of
five months at its tuna cannery plant in Tambler, General
Santos City. After the expiration of their respective contracts of
employment in June and July 1991, their services were
terminated. They forthwith executed a "Release and Quitclaim"
stating that they had no claim whatsoever against the
petitioner.
On 29 July 1991, the private respondents filed before the
National Labor Relations Commission (NLRC) Sub-Regional
Arbitration Branch No. XI, General Santos City, a complaint for
illegal dismissal against the petitioner and its plant manager,
Marciano Aganon.
1
This case was docketed as RAB-11-08-
50284-91.
On 23 December 1992, Labor Arbiter Arturo P. Aponesto
handed down a decision
2
dismissing the complaint on the
ground that the private respondents were mere contractual
workers, and not regular employees; hence, they could not
avail of the law on security of tenure. The termination of their
services by reason of the expiration of their contracts of
employment was, therefore, justified. He pointed out that
earlier he had dismissed a case entitled "Lakas ng Anak-Pawis-
NOWM v. Pure Foods Corp." (Case No. RAB-11-02-00088-88)
because the complainants therein were not regular employees
of Pure Foods, as their contracts of employment were for a
fixed period of five months. Moreover, in another case
involving the same contractual workers of Pure Foods (Case
No. R-196-ROXI-MED-UR-55-89), then Secretary of Labor
Ruben Torres held, in a Resolution dated 30 April 1990, that
the said contractual workers were not regular employees.
The Labor Arbiter also observed that an order for private
respondents' reinstatement would result in the reemployment
of more than 10,000 former contractual employees of the
petitioner. Beside, by executing a "Release and Quitclaim," the
private respondents had waived and relinquished whatever
right they might have against the petitioner.
The private respondents appealed from the decision to the
National Labor Relations Commission (NLRC), Fifth Division, in
Cagayan de Oro City, which docketed the case as NLRC CA No.
M-001323-93.
On 28 October 1994, the NLRC affirmed the Labor Arbiter's
decision.
3
However, on private respondents' motion for
reconsideration, the NLRC rendered another decision on 30
January 1995
4
vacating and setting aside its decision of 28
October 1994 and holding that the private respondent and
their co-complainants were regular employees. It declared that
the contract of employment for five months was a "clandestine
scheme employed by [the petitioner] to stifle [private
respondents'] right to security of tenure" and should therefore
be struck down and disregarded for being contrary to law,
public policy, and morals. Hence, their dismissal on account of
the expiration of their respective contracts was illegal.
Accordingly, the NLRC ordered the petitioner to reinstate the
private respondents to their former position without loss of
seniority rights and other privileges, with full back wages; and
in case their reinstatement would no longer be feasible, the
petitioner should pay them separation pay equivalent to one-
month pay or one-half-month pay for every year of service,
whichever is higher, with back wages and 10% of the monetary
award as attorney's fees.
Its motion for reconsideration having been denied,
5
the
petitioner came to this Court contending that respondent NLRC
committed grave abuse of discretion amounting to lack of
jurisdiction in reversing the decision of the Labor Arbiter.
The petitioner submits that the private respondents are now
estopped from questioning their separation from petitioner's
employ in view of their express conformity with the five-month
duration of their employment contracts. Besides, they fell
within the exception provided in Article 280 of the Labor Code
which reads: "[E]xcept where the employment has been fixed
for a specific project or undertaking the completion or
engagement of the employee." Moreover, the first paragraph of
the said article must be read and interpreted in conjunction
with the proviso in the second paragraph, which reads:
"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 . . ." In the instant case, the
private respondents were employed for a period of five months
only. In any event, private respondents' prayer for
reinstatement is well within the purview of the "Release and
Quitclaim" they had executed wherein they unconditionally
released the petitioner from any and all other claims which
might have arisen from their past employment with the
petitioner.
In its Comment, the Office of the Solicitor General (OSG)
advances the argument that the private respondents were
regular employees, since they performed activities necessary
and desirable in the business or trade of the petitioner. The
period of employment stipulated in the contracts of
employment was null and void for being contrary to law and
public policy, as its purpose was to circumvent the law on
security of tenure. The expiration of the contract did not,
therefore, justify the termination of their employment.
The OSG further maintains that the ruling of the then Secretary
of Labor and Employment in LAP-NOWM v. Pure Foods
Corporation is not binding on this Court; neither is that ruling
controlling, as the said case involved certification election and
not the issue of the nature of private respondents'
employment. It also considers private respondents' quitclaim
as ineffective to bar the enforcement for the full measure of
their legal rights.
The private respondents, on the other hand, argue that
contracts with a specific period of employment may be given
legal effect provided, however, that they are not intended to
circumvent the constitutional guarantee on security of tenure.
They submit that the practice of the petitioner in hiring
workers to work for a fixed duration of five months only to
replace them with other workers of the same employment
duration was apparently to prevent the regularization of these
so-called "casuals," which is a clear circumvention of the law
on security of tenure.
We find the petition devoid of merit.
Article 280 of the Labor Code defines regular and casual
employment as follows:
Art. 280. Regular and Casual Employment. The provisions of
regardless of the oral argument of the parties, an employment
where the work or services to be performed is seasonal in
covered by the preceding paragraph; Provided, That, any
such activity exists.
Thus, the two kinds of regular employees are (1) those who are
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
activity in which they are employed.
6

In the instant case, the private respondents' activities consisted
in the receiving, skinning, loining, packing, and casing-up of
tuna fish which were then exported by the petitioner.
Indisputably, they were performing activities which were
necessary and desirable in petitioner's business or trade.
Contrary to petitioner's submission, the private respondents
could not be regarded as having been hired for a specific
project or undertaking. The term "specific project or
undertaking" under Article 280 of the Labor Code
contemplates an activity which is not commonly or habitually
performed or such type of work which is not done on a daily
basis but only for a specific duration of time or until
completion; the services employed are then necessary and
desirable in the employer's usual business only for the period
of time it takes to complete the project.
7

The fact that the petitioner repeatedly and continuously hired
workers to do the same kind of work as that performed by
those whose contracts had expired negates petitioner's
contention that those workers were hired for a specific project
or undertaking only.
Now on the validity of private respondents' five-month
contracts of employment. In the leading case of Brent School,
Inc. v. Zamora,
8
which was reaffirmed in numerous subsequent
cases,
9
this Court has upheld the legality of fixed-term
employment. It ruled that the decisive determinant in term
employment should not be the activities that the employee is
called upon to perform but the day certain agreed upon by the
parties for the commencement and termination of their
employment relationship. But, this Court went on to say that
where from the circumstances it is apparent that the periods
have been imposed to preclude acquisition of tenurial security
by the employee, they should be struck down or disregarded as
contrary to public policy and morals.
Brent also laid down the criteria under which term
employment cannot be said to be in circumvention of the law
on security of tenure:
1) 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 the employee
moral dominance exercised by the former over the latter.
10

None of these criteria had been met in the present case. As
pointed out by the private respondents:
[I]t could not be supposed that private respondents and all
other so-called "casual" workers of [the petitioner]
KNOWINGLY and VOLUNTARILY agreed to the 5-month
employment contract. Cannery workers are never on equal
terms with their employers. Almost always, they agree to any
terms of an employment contract just to get employed
considering that it is difficult to find work given their ordinary
qualifications. Their freedom to contract is empty and hollow
because theirs is the freedom to starve if they refuse to work as
casual or contractual workers. Indeed, to the unemployed,
security of tenure has no value. It could not then be said that
petitioner and private respondents "dealt with each other on
more or less equal terms with no moral dominance whatever
being exercised by the former over the latter.
10

The petitioner does not deny or rebut private respondents'
averments (1) that the main bulk of its workforce consisted of
its so-called "casual" employees; (2) that as of July 1991,
"casual" workers numbered 1,835; and regular employee, 263;
(3) that the company hired "casual" every month for the
duration of five months, after which their services were
terminated and they were replaced by other "casual"
employees on the same five-month duration; and (4) that these
"casual" employees were actually doing work that were
necessary and desirable in petitioner's usual business.
As a matter of fact, the petitioner even stated in its position
paper submitted to the Labor Arbiter that, according to its
records, the previous employees of the company hired on a
five-month basis numbered about 10,000 as of July 1990. This
confirms private respondents' allegation that it was really the
practice of the company to hire workers on a uniformly fixed
contract basis and replace them upon the expiration of their
contracts with other workers on the same employment
duration.
This scheme of the petitioner was apparently designed to
prevent the private respondents and the other "casual"
employees from attaining the status of a regular employee. It
was a clear circumvention of the employees' right to security of
tenure and to other benefits like minimum wage, cost-of-living
allowance, sick leave, holiday pay, and 13th month pay.
11

Indeed, the petitioner succeeded in evading the application of
labor laws. Also, it saved itself from the trouble or burden of
establishing a just cause for terminating employees by the
simple expedient of refusing to renew the employment
contracts.
The five-month period specified in private respondents'
employment contracts having been imposed precisely to
circumvent the constitutional guarantee on security of tenure
should, therefore, be struck down or disregarded as contrary
to public policy or morals.
12
To uphold the contractual
arrangement between the petitioner and the private
respondents would, in effect, permit the former to avoid hiring
permanent or regular employees by simply hiring them on a
temporary or casual basis, thereby violating the employees'
security of tenure in their jobs.
13

The execution by the private respondents of a "Release and
Quitclaim" did not preclude them from questioning the
termination of their services. Generally, quitclaims by laborers
are frowned upon as contrary to public policy and are held to
be ineffective to bar recovery for the full measure of the
workers' rights.
14
The reason for the rule is that the employer
and the employee do not stand on the same footing.
15

Notably, the private respondents lost not time in filing a
complaint for illegal dismissal. This act is hardly expected from
employees who voluntarily and freely consented to their
dismissal.
16

The NLRC was, thus, correct in finding that the private
respondents were regular employees and that they were
illegally dismissed from their jobs. Under Article 279 of the
Labor Code and the recent jurisprudence,
17
the legal
consequence of illegal dismissal is reinstatement without loss
of seniority rights and other privileges, with full back wages
computed from the time of dismissal up to the time of actual
reinstatement, without deducting the earnings derived
elsewhere pending the resolution of the case.
However, since reinstatement is no longer possible because the
petitioner's tuna cannery plant had, admittedly, been close in
November 1994,
18
the proper award is separation pay
equivalent to one month pay or one-half month pay for every
year of service, whichever is higher, to be computed from the
commencement of their employment up to the closure of the
tuna cannery plant. The amount of back wages must be
computed from the time the private respondents were
dismissed until the time petitioner's cannery plant ceased
operation.
19

WHEREFORE, for lack of merit, the instant petition is
DISMISSED and the challenged decision of 30 January 1995 of
the National Labor Relations Commission in NLRC CA No. N-
001323-93 is hereby AFFIRMED subject to the above
modification on the computation of the separation pay and
back wages.
SO ORDERED.
G.R. No. 149329 July 12, 2004
ROSITA PANGILINAN, YOLANDA LAYOLA, SALLY GOLDE,
AIDA QUITE, FERDINAND CALE, RAUL ARUITA, MANUEL
ERIFUL, ARNEL PAULO, ROSEMARIE GEOTINA, SAMUELA
KUMAR, REBECCA PEREZ, EDGAR BELLO, JOSEPH
SORIANO, DANILO AMPULLER, TOLENTINO CALLAO,
MANOLITA MANALANG, TORIBIO LETIM, NANCY BELGICA,
ALFREDO ARELLANO, JOSEFA CEBUJANO, JUN DEL
ROSARIO, AVELINO AGUILAR, MILAROSA TIAMSON, EDNA
DICHOSO, JASMIN BOLISAY, JULIETA DIDAL, GERARDO
BARISO, ANGELITO PEAFLOR, NERISSA LETIM,
ALEXANDER BARBOSA, ELIZABETH SAENS, NYMPHA
LUGTU, MYRNA MORALES, LIZA CRUZ, ELENA FANG, EDNA
CRUZA, GORGONIO PALMA, JOSE VERGARA, ALDRIN
REMORQUE, RUDY BLANCO, MARIO BUENVIAJE, MA.
CRISTY CEA, REYNALDO GUELAS VILLASENOR, RHOY
TADO, LYDIA SALIPOT, ANGELITO PEREZ VERGARA,
RODOLFO GACHO, JESSIE SAN PEDRO, MARINAO ORCA, JR.,
PEBELITO LERONA, PEPE CONGRESO, NIMFA NAPAO,
WILHELMINA BAGUISA, OLIVIA CAINCAY, JERRY MANUEL
NICOLAS, CARLOS ABRATIQUE, JESUS LIM, JR., AND GERRY
ROXAS, petitioners,
vs.
GENERAL MILLING CORPORATION, respondent.
CALLEJO, SR., J.:
Before this Court is a petition for review on certiorari of the
Decision
1
of the Court of Appeals in CA-G.R. SP No. 51678 and
its Resolution denying the motion for reconsideration thereon.
The Antecedents
The respondent General Milling Corporation is a domestic
corporation engaged in the production and sale of livestock
and poultry.
2
It is, likewise, the distributor of dressed chicken
to various restaurants and establishments nationwide.
3
As
such, it employs hundreds of employees, some on a regular
basis and others on a casual basis, as "emergency workers."
The petitioners
4
were employed by the respondent on different
dates as emergency workers at its poultry plant in Cainta,
Rizal, under separate "temporary/casual contracts of
employment" for a period of five months.
5
Most of them
worked as chicken dressers, while the others served as packers
or helpers.
6
Upon the expiration of their respective contracts,
their services were terminated. They later filed separate
complaints for illegal dismissal and non-payment of holiday
pay, 13
th
month pay, night-shift differential and service
incentive leave pay against the respondent before the
Arbitration Branch of the National Labor Relations
Commission, docketed as NLRC Case No. RAB-IV-9-4519-92-RI;
NLRC Case No. RAB-IV-9-4520-92-RI; NLRC Case No. RAB-IV-9-
4521-92-RI; NLRC Case No. RAB-IV-9-4541-92-RI; NLRC Case
No. RAB-IV-10-4552-92-RI; NLRC Case No. RAB-IV-10-4595-
92-RI and NLRC Case No. RAB-IV-11-4599-92-RI.
7

The petitioners alleged that their work as chicken dressers was
necessary and desirable in the usual business of the
respondent, and added that although they worked from 10:00
p.m. to 6:00 a.m., they were not paid night-shift differential.
8

They stressed that based on the nature of their work, they
were regular employees of the respondent; hence, could not be
dismissed from their employment unless for just cause and
after due notice. In support thereof, the petitioners cited the
decision of the Honorable Labor Arbiter Perlita B. Velasco in
NLRC Case No. NCR-6-2168-86, entitled Estelita Jayme, et al. vs.
General Milling Corporation; and NLRC Case No. NCR-9-3726-
86, entitled Marilou Carino, et al. vs. General Milling
Corporation.
9
They asserted that the respondent GMC
terminated their contract of employment without just cause
and due notice. They further argued that the respondent could
not rely on the nomenclature of their employment as
"temporary or casual."
On August 18, 1997, Labor Arbiter (LA) Voltaire A. Balitaan
rendered a decision in favor of the petitioners declaring that
they were regular employees. Finding that the termination of
their employment was not based on any of the just causes
provided for in the Labor Code, the LA declared that they were
allegedly illegally dismissed. The decretal portion of the
decision reads:
WHEREFORE, judgment is hereby rendered in these cases, as
follows:
1. Declaring respondent corporation guilty of illegally
dismissing complainants, except Rosalina Basan and Filomena
Lanting whose complaints are hereby dismissed on ground of
prescription, and as a consequence therefor ordering the said
respondent corporation to reinstate them to their former
positions without loss of seniority rights and other privileges
and with full backwages from the time they were illegally
dismissed in the aggregate amount of P15,328,594.04;
2. Ordering respondent corporation to pay the said
complainants their 13th month pay, holiday pay and service
incentive leave pay in the aggregate amount of P1,979,148.23;
3. Ordering respondent corporation to pay said complainants
the amount of P1,730,744.22 by way of attorney's fees,
representing ten (10%) percentum of the total judgment
awards.
The case against individual respondent Medardo Quiambao is
hereby dismissed.
10

A copy of the decision was sent by registered mail to the
respondent on October 23, 1997 under Registered Mail No.
004567 addressed to Atty. Emmanuel O. Pacsi, counsel for
GMC, 6
th
Floor, Corinthian Plaza Bldg., 121 Paseo de Roxas,
Makati City.
11
However, Beth Cacal, a clerk of the respondent
GMC received the said decision on October 28, 1997.
12

Contending that a copy thereof was received only on
November 3, 1997, the respondent filed an appeal on
November 12, 1997, before the National Labor Relations
Commission (NLRC), docketed as NLRC NCR CA No. 014462-
98. The petitioners filed a Motion to Dismiss Respondents'
Notice of Appeal/Appeal Memorandum on the ground that the
appeal was filed five days late, considering that the August 18,
1997 Decision was received by the respondent through its
employee, Beth Cacal, on October 28, 1997.
13

The respondent opposed the motion, contending that Cacal
was a mere clerk, and was not a member of the staff of its Legal
Department. It further contended that the Legal Department
was located at the sixth (6
th
) floor of Corinthian Plaza and had
its own staff, including the legal secretary who served as the
Legal Department's receiving clerk.
14
Invoking Section 10, Rule
13 of the Rules of Court, in relation to Section 2 thereof, the
respondent alleged that Cacal's receipt of the mail and/or
decision was not equivalent to receipt by its counsel. In
support thereof, the respondent cited the cases of Adamson
University v. Adamson University Faculty and Employees
Association,
15
and PLDT vs. NLRC.
16

On May 25, 1998, the NLRC rendered a decision reversing that
of the Labor Arbiter, the dispositive portion of which is herein
quoted:
WHEREFORE, except for its award of "13
th
month pay, holiday
pay and service incentive leave pay in the aggregate amount of
P1,979,148.23" which is hereby affirmed, the appealed
decision is set aside for being contrary to settled
jurisprudence.
17

The NLRC ruled that the respondent GMC filed its appeal
within the reglementary period. Citing the case of Caete v.
NLRC
18
which, in turn, cited Adamson v. Adamson
19
and United
Placement International v. NLRC,
20
the NLRC held that service
by registered mail is completed only "upon actual receipt
thereof by the addressee." Since the addressee of the mail is
the respondent's counsel and the person who received it was a
non-member of the Legal Staff, the decision cannot be said to
have been validly served on the respondent's counsel on
October 28, 1997.
The NLRC also held that the petitioners, who were temporary
or contractual employees of the respondent, were legally
terminated upon the expiration of their respective contracts.
Citing the case of Brent School, Inc. vs. Zamora,
21
the NLRC
explained that while the petitioners' work was necessary and
desirable in the usual business of GMC, they cannot be
considered as regular employees since they agreed to a fixed
term.
The petitioners' motion for reconsideration of the decision
having been denied by the NLRC on October 12, 1998,
22
they
filed a petition for certiorari before the Court of Appeals and
assigned the following errors:
I
THE RESPONDENT COMMISSION SERIOUSLY ERRED AND
ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK AND/OR IN EXCESS OF ITS JURISDICTION IN
ENTERTAINING AND GIVING DUE COURSE TO RESPONDENT
COMPANY'S APPEAL WHICH WAS UNDENIABLY FILED OUT
OF TIME AND CONSEQUENTLY SETTING ASIDE THE FINAL
DECISION OF THE LABOR ARBITER.
II
THE RESPONDENT COMMISSION SERIOUSLY ERRED AND
ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING
THAT PETITIONERS' DISMISSAL WAS LEGAL ON THE
GROUND OF EXPIRATION OF EMPLOYMENT CONTRACT
WHICH IS NOT A STATUTORY CAUSE UNDER THE LABOR
CODE.
III
THE RESPONDENT COMMISSION [S]ERIOUSLY ERRED AND
ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT FINDING
THAT PETITIONERS, AS REGULAR EMPLOYEES, CANNOT BE
DISMISSED WITHOUT JUST CAUSE AND THE REQUIRED DUE
PROCESS.
23

On September 29, 2000, the CA rendered a decision affirming
with modification the decision of the NLRC, the decretal
portion of which reads:
WHEREFORE, the appealed decision of the NLRC is hereby
AFFIRMED, with the MODIFICATION that the award of 13
th

month pay, holiday pay, and service incentive leave pay shall
cover only the year or years when petitioners were actually
employed with herein respondent General Milling
Corporation.
24

The CA ruled that no grave abuse of discretion could be
imputed to the NLRC, considering that the ten-day period to
appeal began to run only from the date the decision of the LA
was validly served on the respondent's counsel. The appellate
court also ruled that even assuming arguendo that the
respondent GMC's appeal was filed late, in view of the
substantial amount involved, giving due course to the appeal
did not amount to grave abuse of discretion.
On the merits of the petition, the CA ruled that where the
duties of the employee consist of activities usually necessary or
desirable in the usual business of the employer, it does not
necessarily follow that the parties are forbidden from agreeing
on a period of time for the performance of such activities, and
cited the case of St. Theresa's School of Novaliches Foundation v.
NLRC.
25
The CA affirmed the entitlement of the petitioners to a
proportionate thirteenth (13
th
) month pay for the particular
year/s the petitioners were employed. As to the awards of
holiday pay and service incentive leave pay, the CA ruled that
they should be limited to the year/s of actual service.
26

The petitioners filed a motion for reconsideration of the said
decision, which was denied on July 24, 2001.
27

The Present Petition
The petitioners filed the instant petition, ascribing the
following errors to the appellate court:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND
ACTED WITHOUT JURISDICTION WHEN IT MODIFIED THE
LABOR ARBITER'S JUDGMENT THAT HAS BECOME FINAL AND
EXECUTORY FOR FAILURE OF THE RESPONDENT TO APPEAL
WITHIN THE REGLEMENTARY PERIOD.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE DECISION OF THE LABOR ARBITER WAS
DEEMED SERVED NOT ON THE DATE WHEN THE DECISION
WAS DELIVERED BY THE POSTMASTER TO THE OFFICE OF
THE RESPONDENT'S LAWYER, BUT ON THE DATE WHEN THE
RECEIVING CLERK GAVE THE DECISION TO THE LAWYER.
III
THE RESPONDENT'S PRACTICE OF HIRING CHICKEN
DRESSERS ON A 5-MONTH CONTRACT AND REPLACING THEM
WITH ANOTHER SET OF 5-MONTH CONTRACT WORKERS,
OBVIOUSLY TO PREVENT THEM FROM ATTAINING REGULAR
STATUS, IS VIOLATIVE OF THE CONSTITUTION AND ARTICLES
279 AND 280 OF THE LABOR CODE.
28

The issues for resolution are (a) whether or not the
respondent's appeal from the Labor Arbiter's decision was
filed within the reglementary period therefor; and, (b) whether
or not the petitioners were regular employees of the
respondent GMC when their employment was terminated.
In petitions for review on certiorari of the decision of the CA,
only errors of law are generally reviewed.
29
Normally, the
Supreme Court is not a trier of facts.
30
In the absence of any
showing that the NLRC committed grave abuse of discretion, or
otherwise acted without or in excess of jurisdiction, the Court
is bound by its findings.
31
Such findings are not infallible,
however, particularly when there is a showing that they were
arrived at arbitrarily or in disregard of the evidence on record.
In such case, they may be re-examined by the Court.
Hence, when the factual findings of the NLRC are contrary to
those of the Labor Arbiter, the evidentiary facts may be
reviewed by the appellate court.
32
Considering that the NLRC's
findings clash with those of the Labor Arbiter's, this Court is
compelled to go over the records of the case as well as the
submissions of the parties.
33

The Ruling of the Court
The petition is bereft of merit.
Anent the first issue, we agree with the CA that the NLRC did
not act with grave abuse of discretion when it gave due course
to the appeal of the respondent. Decisions of the Labor Arbiter
are final and executory, unless appealed to the Commission,
within ten (10) calendar days from receipt thereof.
34
Copies of
decisions or final awards are served on both parties and their
counsel by registered mail,
35
and such service by registered
mail is completed upon actual receipt by the addressee or five
(5) days from receipt of the first notice of the postmaster,
whichever is earlier.
36

The records show that the August 18, 1997 Decision of the
Labor Arbiter was served via registered mail, addressed to the
respondent GMC's counsel, Atty. Emmanuel O. Pacsi, at the
sixth (6
th
) Floor, Corinthian Plaza Bldg., 121 Paseo de Roxas,
Makati City.
37
It was received by Beth Cacal, a clerk of the
respondent, on October 28, 1997. The petitioners insist that
Cacal is a person with authority to receive legal and judicial
correspondence for the respondent's Legal Department. They
point out that such authority to receive mail for and in behalf
of the respondent's Legal Department is bolstered by the
certification from the Makati Post Office that she received the
copy of their motion to dismiss the appeal, addressed to the
said department.
The respondent GMC counters that the service of the LA's
decision to a person not connected to its Legal Department is
not a valid service, and that it is only when a copy of such
decision is actually given to such department that a valid
service of the decision is deemed to have been made. Stressing
that factual issues are not proper in a petition for certiorari
under Rule 45, the respondent no longer discussed Cacal's
authority to receive legal and judicial communications for the
respondent.
A review of the records reveal that Cacal was a clerk at the
respondent's office and was assigned at the sixth floor of the
Corinthian Plaza Bldg. She was not assigned at the
respondent's Legal Department, which has its own office staff,
including a secretary who serves as the department's receiving
clerk.
38
The Court has ruled that a service of a copy of a
decision on a person who is neither a clerk nor one in charge of
the attorney's office is invalid.
39
Thus, there was no grave
abuse of discretion on the part of the NLRC in giving due
course to the respondent's appeal.
On the second issue, we agree that the petitioners were
employees with a fixed period, and, as such, were not regular
employees.
Article 280 of the Labor Code comprehends three kinds of
employees: (a) regular employees or those whose work is
necessary or desirable to the usual business of the employer;
(b) project employees or those whose employment has been
fixed for a specific project or undertaking the completion or
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, (c) casual employees or those
who are neither regular nor project employees.
40

A regular employee is one who is engaged to perform activities
which are necessary and desirable in the usual business or
trade of the employer as against those which are undertaken
for a specific project or are seasonal.
41
There are two separate
instances whereby it can be determined that an employment is
regular: (1) if the particular activity performed by the
employee is necessary or desirable in the usual business or
trade of the employer; and, (2) if the employee has been
performing the job for at least a year.
42

In the case of St. Theresa's School of Novaliches Foundation vs.
NLRC,
43
we held that Article 280 of the Labor Code does not
proscribe or prohibit an employment contract with a fixed
period. We furthered that 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 thus nothing
essentially contradictory between a definite period of
employment and the nature of the employee's duties.
Indeed, in the leading case of Brent School Inc. v. Zamora,
44
we
laid down the guideline before a contract of employment may
be held as valid, to wit:
[S]tipulations in employment contracts providing for
term employment or fixed period employment are valid
when the period were agreed upon knowingly and
voluntarily by the parties without 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.
45

An examination of the contracts entered into by the petitioners
showed that their employment was limited to a fixed period,
usually five or six months, and did not go beyond such period.
TEMPORARY/CASUAL CONTRACT OF
EMPLOYMENT
KNOW ALL MEN BY THESE PRESENTS:
That the GENERAL MILLING CORPORATION, hereby
temporarily hires ________________ as Emergency
worker for a period beginning from ____________ to
_____________, inclusive, at the rate of _____________ per
day, payable every 15th [day] and end of each
month.
________________ hereby binds and obligates
himself/herself to perform his/her assigned work
diligently and to the best of his/her ability, and
promise to obey all lawful orders of his/ her
superior and/or representatives made in connection
with the work for which he/she is employed.
IT IS CLEARLY STIPULATED THAT THE CONDITION OF THIS
EMPLOYMENT SHALL BE AS FOLLOWS:
1. This employment contract shall be on a DAY-TO-DAY BASIS
and shall not extend beyond the period specified above;
2. The employee aforementioned may be laid off or separated
from the Firm, EVEN BEFORE THE EXPIRY DATE OF THIS
CONTRACT, if his/her services are no longer needed, or if such
services are found to be unsatisfactory, or if she/he has
violated any of the established rules and regulations of the
Company;
3. In any case, the period of employment shall not go beyond
the duration of the work or purpose for which the
aforementioned employee has been engaged;
4. That the employee hereby agrees to work in any work shift
schedule that may be assigned to him by the Firm during the
period of this contract; and
This Temporary/Casual Employment contract, unless sooner
terminated for any of the causes above-cited, shall then
automatically cease on its expiry date, without the necessity of
any prior notice to the employee concerned.
46

The records reveal that the stipulations in the employment
contracts were knowingly and voluntarily agreed to by the
petitioners without force, duress or improper pressure, or any
circumstances that vitiated their consent. Similarly, nothing
therein shows that these contracts were used as a subterfuge
by the respondent GMC to evade the provisions of Articles 279
and 280 of the Labor Code.
The petitioners were hired as "emergency workers" and
assigned as chicken dressers, packers and helpers at the Cainta
Processing Plant. The respondent GMC is a domestic
corporation engaged in the production and sale of livestock
and poultry, and is a distributor of dressed chicken. While the
petitioners' employment as chicken dressers is necessary and
desirable in the usual business of the respondent, they were
employed on a mere temporary basis, since their employment
was limited to a fixed period. As such, they cannot be said to be
regular employees, but are merely "contractual employees."
Consequently, there was no illegal dismissal when the
petitioners' services were terminated by reason of the
expiration of their contracts.
47
Lack of notice of termination is
of no consequence, because when the contract specifies the
period of its duration, it terminates on the expiration of such
period. A contract for employment for a definite period
terminates by its own term at the end of such period.
48

In sum, we rule that the appeal was filed within the ten (10)-
day reglementary period. Although the petitioners who mainly
worked as chicken dressers performed work necessary and
desirable in the usual business of the respondent, they were
not regular employees therein. Consequently, the termination
of their employment upon the expiry of their respective
contracts was valid.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby
DENIED DUE COURSE. The Decision of the Court of Appeals in
CA-G.R. SP No. 51678 is AFFIRMED. No costs.
SO ORDERED.
G.R. No. 150478. April 15, 2005
HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L.
STARKE, Petitioners,
vs.
CANDIDO CUENCA, FRANCISCO ACULIT, ANGELINA
ALMONIA, DONALD ALPUERTO, NIDA BANGALISAN,
ROGELIO CHAVEZ, ELMO DULINGGIS, MERCEDES
EMPERADO, TORIBIO EMPERADO, JULIANA 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.
D E C I S I O N
CALLEJO, SR., J.:
Before us is a petition for review of the Decision
1
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 Starke
3

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 companys
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 Starkes 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
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. NLRC
13

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. NLRC
14
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,
25
the 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

Recently, the Court reiterated the same observations in
Hacienda Fatima v. National Federation of Sugarcane Workers-
Food and General Trade
27
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 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.
28
There 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 hacienda
was 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
employees 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.

Labor Cases

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Labor Cases

Uploaded by

Copyright:

Available Formats

Art. 280. Regular and casual employment.

You might also like