Labor Cases

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 119268
February 23, 2000
ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO MARCOS,

LUIS DE LOS ANGELES, JOEL ORDENIZA and AMADO CENTENO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN TAXI
(PHILJAMA INTERNATIONAL, INC.) respondents.
QUISUMBING, J.:
This special civil action for certiorari seeks to annul the decision1 of public
respondent promulgated on October 28, 1994, in NLRC NCR CA No. 003883-92,
and its resolution2 dated December 13, 1994 which denied petitioners motion for
reconsideration.
Petitioners were drivers of private respondent, Philjama International Inc., a
domestic corporation engaged in the operation of "Goodman Taxi." Petitioners
used to drive private respondent's taxicabs every other day on a 24-hour work
schedule under the boundary system. Under this arrangement, the petitioners
earned an average of P400.00 daily. Nevertheless, private respondent
admittedly regularly deducts from petitioners, daily earnings the amount of
P30.00 supposedly for the washing of the taxi units. Believing that the deduction
is illegal, petitioners decided to form a labor union to protect their rights and
interests.
Upon learning about the plan of petitioners, private respondent refused to let
petitioners drive their taxicabs when they reported for work on August 6, 1991,
and on succeeding days. Petitioners suspected that they were singled out
because they were the leaders and active members of the proposed union.
Aggrieved, petitioners filed with the labor arbiter a complaint against private
respondent for unfair labor practice, illegal dismissal and illegal deduction of
washing fees. In a decision3 dated August 31, 1992, the labor arbiter dismissed
said complaint for lack of merit.
On appeal, the NLRC (public respondent herein), in a decision dated April 28,
1994, reversed and set aside the judgment of the labor arbiter. The labor tribunal
declared that petitioners are employees of private respondent, and, as such,
their dismissal must be for just cause and after due process. It disposed of the
case as follows:
WHEREFORE, in view of all the foregoing considerations, the decision of
the Labor Arbiter appealed from is hereby SET ASIDE and another one
entered:
1. Declaring the respondent company guilty of illegal dismissal and
accordingly it is directed to reinstate the complainants, namely, Alberto
A. Gonzales, Joel T. Morato, Gavino Panahon, Demetrio L. Calagos, Sonny
M. Lustado, Romeo Q. Clariza, Luis de los Angeles, Amado Centino, Angel
Jardin, Rosendo Marcos, Urbano Marcos, Jr., and Joel Ordeniza, to their
former positions without loss of seniority and other privileges appertaining
thereto; to pay the complainants full backwages and other benefits, less
earnings elsewhere, and to reimburse the drivers the amount paid as
washing charges; and
2. Dismissing the charge of unfair [labor] practice for insufficiency of
evidence.
SO ORDERED.4
Private respondent's first motion for reconsideration was denied. Remaining
hopeful, private respondent filed another motion for reconsideration. This time,
public respondent, in its decision5 dated October 28, 1994, granted aforesaid
second motion for reconsideration. It ruled that it lacks jurisdiction over the case
as petitioners and private respondent have no employer-employee relationship.
It held that the relationship of the parties is leasehold which is covered by the
Civil Code rather than the Labor Code, and disposed of the case as follows:
VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Motion under
reconsideration is hereby given due course.
Accordingly, the Resolution of August 10, 1994, and the Decision of April
28, 1994 are hereby SET ASIDE. The Decision of the Labor Arbiter subject of
the appeal is likewise SET ASIDE and a NEW ONE ENTERED dismissing the
complaint for lack of jurisdiction.
No costs.
SO ORDERED.6
Expectedly, petitioners sought reconsideration of the labor tribunal's latest
decision which was denied. Hence, the instant petition.
In this recourse, petitioners allege that public respondent acted without or in

excess of jurisdiction, or with grave abuse of discretion in rendering the assailed
decision, arguing that:
I
THE NLRC HAS NO JURISDICTION TO ENTERTAIN RESPONDENT'S SECOND MOTION
FOR RECONSIDERATION WHICH IS ADMITTEDLY A PLEADING PROHIBITED UNDER
THE NLRC RULES, AND TO GRANT THE SAME ON GROUNDS NOT EVEN INVOKED
THEREIN.
II
THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES
IS ALREADY A SETTLED ISSUE CONSTITUTING RES JUDICATA, WHICH THE NLRC HAS
NO MORE JURISDICTION TO REVERSE, ALTER OR MODIFY.
III
IN ANY CASE, EXISTING JURISPRUDENCE ON THE MATTER SUPPORTS THE VIEW THAT
PETITIONERS-TAXI DRIVERS ARE EMPLOYEES OF RESPONDENT TAXI COMPANY.7
The petition is impressed with merit.
The phrase "grave abuse of discretion amounting to lack or excess of jurisdiction"
has settled meaning in the jurisprudence of procedure. It means such capricious
and whimsical exercise of judgment by the tribunal exercising judicial or quasijudicial power as to amount to lack of power.8 In labor cases, this Court has
declared in several instances that disregarding rules it is bound to observe
constitutes grave abuse of discretion on the part of labor tribunal.
In Garcia vs. NLRC,9 private respondent therein, after receiving a copy of the
labor arbiter's decision, wrote the labor arbiter who rendered the decision and
expressed dismay over the judgment. Neither notice of appeal was filed nor
cash or surety bond was posted by private respondent. Nevertheless, the labor
tribunal took cognizance of the letter from private respondent and treated said
letter as private respondent's appeal. In a certiorari action before this Court, we
ruled that the labor tribunal acted with grave abuse of discretion in treating a
mere letter from private respondent as private respondent's appeal in clear
violation of the rules on appeal prescribed under Section 3(a), Rule VI of the
New Rules of Procedure of NLRC.
In Philippine Airlines Inc. vs. NLRC,10 we held that the labor arbiter committed
grave abuse of discretion when he failed to resolve immediately by written
order a motion to dismiss on the ground of lack of jurisdiction and the

supplemental motion to dismiss as mandated by Section 15 of Rule V of the New
Rules of Procedure of the NLRC.
In Unicane Workers Union-CLUP vs. NLRC,11 we held that the NLRC gravely
abused its discretion by allowing and deciding an appeal without an appeal
bond having been filed as required under Article 223 of the Labor Code.
In Maebo vs. NLRC,12 we declared that the labor arbiter gravely abused its
discretion in disregarding the rule governing position papers. In this case, the
parties have already filed their position papers and even agreed to consider the
case submitted for decision, yet the labor arbiter still admitted a supplemental
position paper and memorandum, and by taking into consideration, as basis for
his decision, the alleged facts adduced therein and the documents attached
thereto.
In Gesulgon vs. NLRC,13 we held that public respondent gravely abused its
discretion in treating the motion to set aside judgment and writ of execution as
a petition for relief of judgment. In doing so, public respondent had, without
sufficient basis, extended the reglementary period for filing petition for relief from
judgment contrary to prevailing rule and case law.
In this case before us, private respondent exhausted administrative remedy
available to it by seeking reconsideration of public respondent's decision dated
April 28, 1994, which public respondent denied. With this motion for
reconsideration, the labor tribunal had ample opportunity to rectify errors or
mistakes it may have committed before resort to courts of justice can be had.14
Thus, when private respondent filed a second motion for reconsideration, public
respondent should have forthwith denied it in accordance with Rule 7, Section
14 of its New Rules of Procedure which allows only one motion for
reconsideration from the same party, thus:
Sec. 14. Motions for Reconsideration. Motions for reconsideration of any
order, resolution or decision of the Commission shall not be entertained
except when based on palpable or patent errors, provided that the
motion is under oath and filed within ten (10) calendar days from receipt
of the order, resolution or decision with proof of service that a copy of the
same has been furnished within the reglementary period the adverse
party and provided further, that only one such motion from the same
party shall be entertained. [Emphasis supplied]
The rationale for allowing only one motion for reconsideration from the same
party is to assist the parties in obtaining an expeditious and inexpensive
settlement of labor cases. For obvious reasons, delays cannot be countenanced
in the resolution of labor disputes. The dispute may involve no less than the
livelihood of an employee and that of his loved ones who are dependent upon
him for food, shelter, clothing, medicine, and education. It may as well involve
the survival of a business or an industry.15
As correctly pointed out by petitioner, the second motion for reconsideration
filed by private respondent is indubitably a prohibited pleading16 which should
have not been entertained at all. Public respondent cannot just disregard its
own rules on the pretext of "satisfying the ends of justice",17 especially when its
disposition of a legal controversy ran afoul with a clear and long standing
jurisprudence in this jurisdiction as elucidated in the subsequent discussion.
Clearly, disregarding a settled legal doctrine enunciated by this Court is not a
way of rectifying an error or mistake. In our view, public respondent gravely
abused its discretion in taking cognizance and granting private respondent's
second motion for reconsideration as it wrecks the orderly procedure in seeking
reliefs in labor cases.
But, there is another compelling reason why we cannot leave untouched the
flip-flopping decisions of the public respondent. As mentioned earlier, its
October 28, 1994 judgment is not in accord with the applicable decisions of this
Court. The labor tribunal reasoned out as follows:
On the issue of whether or not employer-employee relationship exists,
admitted is the fact that complainants are taxi drivers purely on the
"boundary system". Under this system the driver takes out his unit and pays
the owner/operator a fee commonly called "boundary" for the use of the
unit. Now, in the determination the existence of employer-employee
relationship, the Supreme Court in the case of Sara, et al., vs. Agarrado, et
al. (G.R. No. 73199, 26 October 1988) has applied the following four-fold
test: "(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power of
control the employees conduct."
"Among the four (4) requisites", the Supreme Court stresses that "control is
deemed the most important that the other requisites may even be
disregarded". Under the control test, an employer-employee relationship
exists if the "employer" has reserved the right to control the "employee" not
only as to the result of the work done but also as to the means and
methods by which the same is to be accomplished. Otherwise, no such
relationship exists. (Ibid.)
Applying the foregoing parameters to the case herein obtaining, it is clear
that the respondent does not pay the drivers, the complainants herein,
their wages. Instead, the drivers pay a certain fee for the use of the
vehicle. On the matter of control, the drivers, once they are out plying
their trade, are free to choose whatever manner they conduct their trade
and are beyond the physical control of the owner/operator; they
themselves determine the amount of revenue they would want to earn in
a day's driving; and, more significantly aside from the fact that they pay
for the gasoline they consume, they likewise shoulder the cost of repairs
on damages sustained by the vehicles they are driving.
Verily, all the foregoing attributes signify that the relationship of the parties
is more of a leasehold or one that is covered by a charter agreement
under the Civil Code rather than the Labor Code.18
The foregoing ratiocination goes against prevailing jurisprudence.
In a number of cases decided by this Court,19 we ruled that the relationship
between jeepney owners/operators on one hand and jeepney drivers on the
other under the boundary system is that of employer-employee and not of
lessor-lessee. We explained that in the lease of chattels, the lessor loses
complete control over the chattel leased although the lessee cannot be
reckless in the use thereof, otherwise he would be responsible for the damages
to the lessor. In the case of jeepney owners/operators and jeepney drivers, the
former exercise supervision and control over the latter. The management of the
business is in the owner's hands. The owner as holder of the certificate of public
convenience must see to it that the driver follows the route prescribed by the
franchising authority and the rules promulgated as regards its operation. Now,
the fact that the drivers do not receive fixed wages but get only that in excess
of the so-called "boundary" they pay to the owner/operator is not sufficient to
withdraw the relationship between them from that of employer and employee.
We have applied by analogy the abovestated doctrine to the relationships
between bus owner/operator and bus conductor,20 auto-calesa
owner/operator and driver,21 and recently between taxi owners/operators and
taxi drivers.22 Hence, petitioners are undoubtedly employees of private
respondent because as taxi drivers they perform activities which are usually
necessary or desirable in the usual business or trade of their employer.
As consistently held by this Court, termination of employment must be effected
in accordance with law. The just and authorized causes for termination of
employment are enumerated under Articles 282, 283 and 284 of the Labor
Code. The requirement of notice and hearing is set-out in Article 277 (b) of the
said Code. Hence, petitioners, being employees of private respondent, can be
dismissed only for just and authorized cause, and after affording them notice
and hearing prior to termination. In the instant case, private respondent had no
valid cause to terminate the employment of petitioners. Neither were there two
(2) written notices sent by private respondent informing each of the petitioners
that they had been dismissed from work. These lack of valid cause and failure
on the part of private respondent to comply with the twin-notice requirement
underscored the illegality surrounding petitioners' dismissal.
Under the law, an employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up
to the time of his actual reinstatement.23 It must be emphasized, though, that
recent judicial pronouncements24 distinguish between employees illegally
dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989,
and those whose illegal dismissals were effected after such date. Thus,
employees illegally dismissed prior to March 21, 1989, are entitled to backwages
up to three (3) years without deduction or qualification, while those illegally
dismissed after that date are granted full backwages inclusive of allowances
and other benefits or their monetary equivalent from the time their actual
compensation was withheld from them up to the time of their actual
reinstatement. The legislative policy behind Republic Act No. 6715 points to "full
backwages" as meaning exactly that, i.e., without deducting from backwages
the earnings derived elsewhere by the concerned employee during the period
of his illegal dismissal. Considering that petitioners were terminated from work on
August 1, 1991, they are entitled to full backwages on the basis of their last daily
earnings.
With regard to the amount deducted daily by private respondent from
petitioners for washing of the taxi units, we view the same as not illegal in the
context of the law. We note that after a tour of duty, it is incumbent upon the
driver to restore the unit he has driven to the same clean condition when he
took it out. Car washing after a tour of duty is indeed a practice in the taxi
industry and is in fact dictated by fair play.25 Hence, the drivers are not entitled
to reimbursement of washing charges.1wphi1.nt
WHEREFORE, the instant petition is GRANTED. The assailed DECISION of public
respondent dated October 28, 1994, is hereby SET ASIDE. The DECISION of public
respondent dated April 28, 1994, and its RESOLUTION dated December 13, 1994,
are hereby REINSTATED subject to MODIFICATION. Private respondent is directed
to reinstate petitioners to their positions held at the time of the complained
dismissal. Private respondent is likewise ordered to pay petitioners their full
backwages, to be computed from the date of dismissal until their actual
reinstatement. However, the order of public respondent that petitioners be
reimbursed the amount paid as washing charges is deleted. Costs against
private respondents.
SO ORDERED.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 109114 September 14, 1993

HOLIDAY INN MANILA and/or HUBERT LINER and BABY DISQUITADO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and ELENA
HONASAN, respondents.
Inocentes, De Leon, Leogardo, Atienza, Manaye & Azucena Law Office for
petitioners.
Florante M. Yambot for private respondent.
CRUZ, J.:
The employer has absolute discretion in hiring his employees in accordance with
his standards of competence and probity. This is his prerogative. Once hired,
however, the employees are entitled to the protection of the law even during
the probation period and more so after they have become members of the
regular force. The employer does not have the same freedom in the hiring of his
employees as in their dismissal.
Elena Honasan applied for employment with the Holiday Inn and was on April
15, 1991, accepted for "on-the-job training" as a telephone operator for a period
of three weeks. 1 For her services, she received food and transportation
allowance. 2 On May 13, 1992, after completing her training, she was employed
on a "probationary basis" for a period of six months ending November 12,
1991. 3
Her employment contract stipulated that the Hotel could terminate her
probationary employment at any time prior to the expiration of the six-month
period in the event of her failure (a) to learn or progress in her job; (b) to
faithfully observe and comply with the hotel rules and the instructions and orders
of her superiors; or (c) to perform her duties according to hotel standards.
On November 8, 1991, four days before the expiration of the stipulated

deadline, Holiday Inn notified her of her dismissal, on the ground that her
performance had not come up to the standards of the Hotel. 4
Through counsel, Honasan filed a complaint for illegal dismissal, claiming that
she was already a regular employee at the time of her separation and so was
entitled to full security of tenure. 5 The complaint was dismissed on April 22, 1992
by the Labor Arbiter, 6 who held that her separation was justified under Article
281 of the Labor Code providing as follows:
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.
On appeal, this decision was reversed by the NLRC, which held that Honasan
had become a regular employee and so could not be dismissed as a
probationer. 7 In its own decision dated November 27, 1992, the NLRC ordered
the petitioners to reinstate Honasan "to her former position without loss of
seniority rights and other privileges with backwages without deduction and
qualification." Reconsideration was denied in a resolution dated January 26,
1993. 8
The petitioners now fault the NLRC for having entertained Honasan's appeal
although it was filed out of time and for holding that Honasan was already a
regular employee at the time of her dismissal, which was made 4 days days
before the expiration of the probation period.
The petition has no merit.
On the timeliness of the appeal, it is well-settled that all notices which a party is
entitled to receive must be coursed through his counsel of record.
Consequently, the running of the reglementary period is reckoned from the date
of receipt of the judgment by the counsel of the appellant. 9 Notice to the
appellant himself is not sufficient notice. 10 Honasan's counsel received the
decision of the Labor Arbiter on May 18, 1992. 11 Before that, however, the
appeal had already been filed by Honasan herself, on May 8, 1992. 12 The
petitioners claim that she filed it on the thirteenth but this is irrelevant. Even if the
latter date was accepted, the appeal was nevertheless still filed on time, in fact
even before the start of the reglementary period.
On the issue of illegal dismissal, we find that Honasan was placed by the
petitioner on probation twice, first during her on-the-job training for three weeks,
and next during another period of six months, ostensibly in accordance with
Article 281. Her probation clearly exceeded the period of six months prescribed
by this article.
Probation is the period during which the employer may determine if the
employee is qualified for possible inclusion in the regular force. In the case at
bar, the period was for three weeks, during Honasan's on-the-job training. When
her services were continued after this training, the petitioners in effect
recognized that she had passed probation and was qualified to be a regular
employee.
Honasan was certainly under observation during her three-week on-the-job
training. If her services proved unsatisfactory then, she could have been
dropped as early as during that period. But she was not. On the contrary, her
services were continued, presumably because they were acceptable, although
she was formally placed this time on probation.
Even if it be supposed that the probation did not end with the three-week
period of on-the-job training, there is still no reason why that period should not
be included in the stipulated six-month period of probation. Honasan was
accepted for on-the-job training on April 15, 1991. Assuming that her probation
could be extended beyond that date, it nevertheless could continue only up to
October 15, 1991, after the end of six months from the earlier date. Under this
more lenient approach, she had become a regular employee of Holiday Inn
and acquired full security of tenure as of October 15, 1991.
The consequence is that she could no longer be summarily separated on the
ground invoked by the petitioners. As a regular employee, she had acquired the
protection of Article 279 of the Labor Code stating as follows:
Art. 279. Security of Tenure In cases of regular employment, the
employer shall not terminate the services of an employee except
for a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
The grounds for the removal of a regular employee are enumerated in Articles
282, 283 and 284 of the Labor Code. The procedure for such removal is
prescribed in Rule XIV, Book V of the Omnibus Rules Implementing the Labor
Code. These rules were not observed in the case at bar as Honasan was simply
told that her services were being terminated because they were found to be
unsatisfactory. No administrative investigation of any kind was undertaken to
justify this ground. She was not even accorded prior notice, let alone a chance
to be heard.
We find in the Hotel's system of double probation a transparent scheme to
circumvent the plain mandate of the law and make it easier for it to dismiss its
employees even after they shall have already passed probation. The petitioners
had ample time to summarily terminate Honasan's services during her period of
probation if they were deemed unsatisfactory. Not having done so, they may
dismiss her now only upon proof of any of the legal grounds for the separation of
regular employees, to be established according to the prescribed procedure.
The policy of the Constitution is to give the utmost protection to the working
class when subjected to such maneuvers as the one attempted by the
petitioners. This Court is fully committed to that policy and has always been
quick to rise in defense of the rights of labor, as in this case.
WHEREFORE, the petition is DISMISSED, with costs against petitioners. It is so
ordered.
FIRST DIVISION
[G.R. No. 94523. October 27, 1992.]
ST. THERESITAS ACADEMY AND/OR THE SERVANTS OF ST. JOSEPH, Represented by
SR. ANITA BAGO, Petitioners, v. THE NATIONAL LABOR RELATIONS COMMISSION
and LILIA ARIOLA, Respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; REGULAR AND CASUAL EMPLOYMENT;
DISTINGUISHED. Article 280 of the Labor Code defines regular employment as
follows: "ART. 280. Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer except
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season. "An
employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such actually exists."cralaw virtua1aw library
2. ID.; ID.; ID.; APPLICATION TO SCHOOL TEACHERS; CASE AT BAR. With respect
to school teachers, paragraph 75 of the Manual of Regulations for Private
Schools provides: "Full-time teachers who have rendered three (3) years of
satisfactory service shall be considered permanent." The record shows that after
Ariola retired in 1976, she was rehired three (3) years later and rendered four (4)
more years of satisfactory service to the petitioner in the school years 1979-1980,
1980-1981, 1981-1982, and 1982-1983. When she was rehired in 1979 she did not
have to undergo the 3-year probationary employment for new teachers for her
teaching competence had already been tried and tested during her 22 years of
service to the school in 1954 to 1976. She reentered the service in 1979 as a
regular or permanent teacher. She could not be discharged solely on account
of the expiration of her fourth annual contract. She could only be dismissed for
cause and with due process, as provided in Article 279 of the Labor Code.
DECISION
GRIO-AQUINO, J.:
Petition for certiorari with application for preliminary injunction and/or restraining
order to annul and/or set aside the resolution dated July 2, 1990 or the Fourth
Division of the National Labor Relations Commission (Cebu City) (NLRC, for
short), affirming with modification the decision dated August 14, 1987 of the
Labor Arbiter of Bacolod City in RAB-VI-Case No. 0201-83. The dispositive portion
of the decision of the NLRC reads as follows:jgc:chanrobles.com.ph
"WHEREFORE, the appeal filed by respondents is hereby dismissed for lack of
merit and the decision of the Labor Arbiter dated August 14, 1987 is hereby
MODIFIED. Respondent is hereby ordered to pay complainant her backwages
limited to three (3) years without deduction and qualification starting April 1933.
In lieu of reinstatement, respondents are hereby ordered to give separation pay
to herein complainant computed at the rate of one months salary for every
year of service from June 1979 up to March 1986, the end of the three (3) year
rule on backwages." (p. 39, Rollo.)chanrobles.com:cralaw:red
The private respondent, Lilia G. Ariola, had been employed as a school teacher
since the school year 1954-55 up to the school year 1975-76 (or for 22 continuous
years). She retired on March 30, 1976 with separation benefits in the amount of
P4,927.30. For a while, she worked as an insurance underwriter. In 1979, the
Mother Superior invited her to go back as a school teacher because the school
needed qualified and good teachers in Mathematics and English. The
complainant accepted on condition that she should be considered a regular
teacher and not as a newly hired teacher. That condition was accepted
without hesitation. She signed a contract with the school which was renewable
yearly.
Complainant and her co-teachers were paid summer living allowance in 19791980 and 1980-1981. However, in June 1981, that amount was deducted from
their salaries. Complainant and her co-teachers protested against the
deduction. A meeting was called by the school to explain that the payment of
the summer living allowance had been a mistake, hence, it must be paid back
to the school. Another meeting was called by the Mother Superior to discuss the
legality of the deduction and/or nonpayment of the summer living allowance. In
that meeting the complainant and her co-teachers pleaded for the revival of
the summer living allowance but they were advised by the Mother Superior that
the school could not afford to give it to them. The matter was referred to the
Ministry of Labor and Employment. Because of the agitation for the payment of
the summer living allowance, the Siervas de San Jose, which owns and operates
respondent school in Silay City, held a board meeting on January 19, 1983
(Exhibit I), wherein it was resolved that effective school year 1983-84, no Siervas
de San Jose School shall rehire a retired teacher and that any rehired retiree
who is at present a member of the faculty shall be notified that her/his Teachers
Contract will not be renewed for the coming year.chanrobles virtual lawlibrary
After four (4) years of continuous satisfactory service, complainant was notified
on March 1, 1983 that her contract would no longer be renewed at the end of
the school year 1982-83. A report was made to the office of the Ministry of Labor
and Employment regarding the impending termination of her teachers
contract (Annex E).
On April 7, 1985, private respondent filed in the NLRC, National Arbitration
Branch No. VI in Bacolod City, a complaint against the petitioner for Illegal
Dismissal praying for reinstatement with backwages, ECOLA, non-payment of
allowances, underpayment of 13th month pay and damages.
On August 14, 1987, the Labor Arbiter rendered a decision ordering the
petitioner to pay the private respondent separation pay computed at one-half

(1/2) month for every year of her 4-year service with the school.
On appeal by the school to the NLRC, the latter ruled that:chanrob1es virtual
1aw library
(1) the year-to-year contract between petitioner and private respondent
violated Art. 280 of the Labor Code, hence, despite the fixed period provided
therein, private respondent became a "regular" employee who could not be
dismissed except for cause;
(2) when the year-to-year contracts went beyond three years, private
respondent became a "regular" or "permanent" employee, pursuant to Sec. 75
of the Manual of Regulations for private schools, which provides that "full-time
teachers who have rendered three consecutive years of satisfactory service
shall be considered permanent" (p. 11, Rollo); and
(3) the policy of the school of no longer renewing the year-to-year contracts of
teachers who had been recalled from retirement, violated the security of tenure
of the complainant.
On July 2, 1990, the NLRC issued the resolution quoted earlier in this decision.
In its petition for review of that decision, the petitioner alleges that:.
1. the NLRC decision is clearly contrary to the decision of this Court;
2. the NLRC ruling confuses the three year-to-year probationary contracts given
to new teachers before they become "regular and permanent," with the yearto-year or other fixed period contract given to teachers who are being recalled
from retirement; for the year-to-year contracts with retired teacher is not
intended to test the teachers fitness to be hired on a permanent basis, unlike a
new teacher who must first be tested; andcralawnad
3. it is the prerogative of an employer to adopt a policy of not rehiring retired
teachers and of not renewing the annual contracts of teachers who have been
recalled from retirement.
A review of the records of this case shows that the NLRC did not abuse its
discretion in affirming with modification the decision of the Labor Arbiter.
Article 280 of the Labor Code defines regular employment as
follows:jgc:chanrobles.com.ph
"ARTICLE 280. Regular and Casual Employment. The provisions of written

agreement to the contrary notwithstanding and the oral agreement of the
parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of
the employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.
"An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which is employed
and his employment shall continue while such actually exists." (Emphasis
supplied.)
With respect to school teachers, paragraph 75 of the Manual of Regulations for
Private Schools provides:jgc:chanrobles.com.ph
"Full-time teachers who have rendered three (3) years of satisfactory service
shall be considered permanent." (p. 63, Rollo.).
Furthermore, paragraphs 7 and 9 of the Teachers Contract which the petitioner
and the private respondent signed, categorically stipulated:chanrobles virtual
lawlibrary
"7. This CONTRACT SHALL BE IN FULL FORCE AND EFFECT during the school year
1982-1983 from June to March, unless sooner terminated by either party for valid
causes and approved by the Director of Private Schools. In the absence of valid
cause(s) for termination of services, this CONTRACT shall be rendered the
teacher shall have gained a Regular or Permanent Status, pursuant to the
pertinent provisions of the Manual of Regulations for Private Schools.
"9. This CONTRACT shall not affect the Permanent Status of the teacher, even if
entered into every school provided that the Probationary Period for new shall be
three (3) years." (Emphasis supplied, p.-79, Rollo.)
The record shows that after Ariola retired in 1976, she was rehired three (3) years
later and rendered four (4) more years of satisfactory service to the petitioner in
the school years 1979-1980, 1980-1981, 1981-1982, and 1982-1983.
When she was rehired in 1979 she did not have to undergo the 3-year
probationary employment for new teachers for her teaching competence had
already been tried and tested during her 22 years of service to the school in
1954 to 1976. She re-entered the service in 1979 as a regular or permanent
teacher. She could not be discharged solely on account of the expiration of her
fourth annual contract. She could only be dismissed for cause and with due
process, as provided in Article 279 of the Labor Code.
The NLRC did not abuse its discretion in holding that her dismissal from the
service, on account of the expiration of her annual contract, was illegal and
that the school is liable to pay her backwages and separation pay.
WHEREFORE; the petition for certiorari is DISMISSED, with costs against the
petitioner.chanrobles virtual lawlibrary
SO ORDERED.
Medialdea and Bellosillo, JJ., concur.
Cruz, J., is on leave.
G.R. No. 96779 November 10, 1993
PINE CITY EDUCATIONAL CENTER and EUGENIO BALTAO, Petitioners, vs. THE
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and DANGWA
BENTREZ, ROLAND PICART, APOLLO RIBAYA, SR., RUPERTA RIBAYA, VIRGINIA
BOADO, CECILIA EMOCLING, JANE BENTREZ, LEILA DOMINGUEZ, ROSE ANN
BERMUDEZ and LUCIA CHAN, Respondents.
Tenefrancia, Agranzamendez, Liceralde & Associates for petitioners.chanrobles
virtual law library
Reynaldo B. Cajucom for private respondents.
NOCON, J.:
The is a petition for certiorari seeking the reversal of the resolution of public
respondent National Labor Relations Commission dated November 29, 1990, in
NLRC Case No. 01-04-0056-89, which affirmed in toto the decision of the Labor
Arbiter dated February 28,1990.chanroblesvirtualawlibrary chanrobles virtual law
library
The antecedent facts are, a follows:chanrobles virtual law library
Private respondents Dangwa Bentrez, Roland Picart, Apollo Ribaya, Sr., Ruperta
Ribaya, Virginia Boado, Cecilia Emocling, Jane Bentrez, Leila Dominguez, Rose
Ann Bermudez and Lucia Chan were all employed as teachers on probationary
basis by petitioner Pines City Educational Center, represented in this
proceedings by its President, Eugenio Baltao. With the exception of Jane Bentrez
who was hired as a grade school teacher, the remaining private respondents
were hired as college instructors. All the private respondents, except Roland
Picart and Lucia Chan, signed contracts of employment with petitioner for a
fixed duration. On March 31, 1989, due to the expiration of private respondents'
contracts and their poor performance as teachers, they were notified of
petitioners' decision not to renew their contracts
anymore.chanroblesvirtualawlibrarychanrobles virtual law library
On April 10, 1989, private respondents filed a complaint for illegal dismissal
before the Labor Arbiter, alleging that their dismissals were without cause and in
violation of due process. Except for private respondent Leila Dominguez who
worked with petitioners for one semester, all other private respondents were
employed for one to two years. They were never informed in writing by
petitioners regarding the standards or criteria of evaluation so as to enable
them to meet the requirements for appointment as regular employees. They
were merely notified in writing by petitioners, through its chancellor, Dra. Nimia
R. Concepcion, of the termination of their respective services as on March 31,
1989, on account of their below-par performance as
teachers.chanroblesvirtualawlibrarychanrobles virtual law library
For their part, petitioners contended that private respondents' separation from
employment, apart from their poor performance, was due to the expiration of
the periods stipulated in their respective contracts. In the case of private
respondent Dangwa Bentrez, the duration of his employment contract was for
one year, or beginning June, 1988 to March 1989 whereas in the case of the
other private respondents, the duration of their employment contracts was for
one semester, or beginning November, 1988 to March 1989. These stipulations
were the laws that governed their relationships, and there was nothing in said
contracts which was contrary to law, morals, good customs and public policy.
They argued further that they cannot be compelled o enter into new contracts
with private respondents. they concluded that the separation of private
respondents from the service was justified.chanroblesvirtualawlibrarychanrobles
virtual law library
On February 28, 1990, the Labor Arbiter rendered judgment in favor of private
respondents, the dispositive portion of which reads:
WHEREFORE, in the light of the foregoing considerations, judgment is hereby
rendered ORDERING the respondents to reinstate the complainants immediately
to their former positions and to pay their full backwages and other benefits and
privileges without qualification and deduction from the time they were dismissed
up to their actual reinstatement.chanroblesvirtualawlibrarychanrobles virtual law

library
Thus respondents should pay complainants the following:
BACKWAGES
NOTE: Computation covers only the period complainants were terminated up to
January 31, 1990 or 10 months and does not include backwages from January
31, 1990 up to their actual reinstatement.
1) ROLAND PICART
a) Latest salary per month P2,136.00
b) Multiplied by period covered
(March 31, 1989 to January 31, 1990) x 10 months
----c) Equals backwages due P21,360.00
2) LUCIA CHAN
b) Multiplied by period covered x 10 months
3) LEILA DOMINGUEZ
4) RUPERTA RIBAYA
5) CECILIA EMOCLING

6) ROSE ANN BERMUDEZ
7) DANGWA BENTREZ
8) JANE BENTREZ
b) ultiplied by period covered x 10 months
9) APOLLO RIBAYA
10) VIRGINIA BOADO
SUMMARY
1) Roland Picart 21,360.00
2) Lucia Chan 16,000.00
3) Leila Dominguez 16,482.40
4) Ruperta Ribaya 18,560.00
5) Cecilia Emocling 16,480.00

6) Rose Ann Bermudez 26,000.00
7) Dangwa Bentrez 17,000.00
8) Jane Bentrez 13,154.40
9) Apollo Ribaya 18,750.00
10) Virginia Boado 16,482.40
----GRAND TOTAL (Backwages) P180,269.20
Complainants claims for indemnity pay, premium pay for holidays and rest days,
illegal deduction, 13th month pay and underpayment are hereby DENIED for
lack of merit.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED. 1chanrobles virtual law library
In support of this decision, the Labor Arbiter rationalized that the teacher's
contracts 2are vague and do not include the specific description of duties and
assignments of private respondents. They do not categorically state that there
will be no renewal because their appointments automatically terminate at the
end of the semester. Petitioners did not present any written evidence to
substantiate their allegation that the Academic Committee has evaluated
private respondents' performance during their one semester employment. On
the contrary, they were hastily dismissed.chanroblesvirtualawlibrarychanrobles
virtual law library
On appeal to the National Labor Relations Commission, the decision was
affirmed in toto in its resolution dated November 29, 1990, with the additional
reasoning that "the stipulation in the contract providing for a definite period in
the employment of complainant is obviously null and void, as such stipulation
directly assails the safeguards laid down in Article 280 (of the Labor Code),
3which explicitly abhors the consideration of written or oral agreements
pertaining to definite period in regular employments. 4Hence, the present
petition for certiorari with prayer for the issuance of a temporary restraining
order.chanroblesvirtualawlibrarychanrobles virtual law library
As prayed for, this Court issued a temporary restraining order on March 11, 1991,
enjoining respondents from enforcing the questioned resolution. 5chanrobles
virtual law library
Petitioners raise this sole issue: "THAT THERE IS PRIMA FACIE EVIDENCE OF GRAVE
ABUSE OF DISCRETION ON THE PART OF THE LABOR ARBITER BY WANTONLY,
CAPRICIOUSLY AND MALICIOUSLY DISREGARDING PROVISIONS OF THE LAW AND
JURISPRUDENCE LAID DOWN IN DECISIONS OF THE HONORABLE SUPREME
COURT." 6chanrobles virtual law library
Petitioners reiterate their previous arguments, relying heavily in the case of Brent
School, Inc. et al., v. Zamora, et al. 7chanrobles virtual law library
It is quite easy to resolve the present controversy because the Brent case, which
is a product of extensive research, already provides the answer. We were
categorical therein that:
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 and 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 prevent 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 brought to bear upon the employee and absent any other
circumstances vitiating his consent, or where it satisfactorily appears that the
employer or 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 expressly stated by its framers; it thus becomes pointless and
arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences. (Emphasis supplied.)
The ruling was reiterated in Pakistan International Airlines Corporation v. Ople,
etc., et al. 8and La Sallete of Santiago, Inc. v. NLRC, et al. 9
In the present case, however, We have to make a
distinction.chanroblesvirtualawlibrarychanrobles virtual law library
Insofar as the private respondents who knowingly and voluntarily agreed upon
fixed periods of employment are concerned, their services were lawfully
terminated by reason of the expiration of the periods of their respective
contracts. These are Dangwa Bentrez, Apollo Ribaya, Sr., Ruperta Ribaya,
Virginia Boado, Cecilia Emocling, Jose Bentrez, Leila Dominguez and Rose Ann
Bermudez. Thus, public respondent committed grave abuse of discretion in
affirming the decision of the Labor Arbiter ordering the reinstatement and
payment of full backwages and other benefits and
privileges.chanroblesvirtualawlibrarychanrobles virtual law library
With respect to private respondents Roland Picart and Lucia Chan, both of
whom did not sign any contract fixing the periods of their employment nor to
have knowingly and voluntarily agreed upon fixed periods of employment,

petitioners had the burden of proving that the termination of their services was
legal. As probationary employees, they are likewise protected by the security of
tenure provision of the Constitution. Consequently, they cannot be removed
from their positions unless for cause. 10On the other hand, petitioner contended
that base don the evaluation of the Academic Committee their performance
as teachers was poor. The Labor Arbiter, however, was not convinced. Thus he
found as follows:
Respondents likewise aver that the Academic Committee has evaluated their
performance during their one semester employment (see Annexes "M" to "X" of
complainants' position paper). However, they did not present any written proofs
or evidence to support their allegation. 11
xxx xxx xxxchanrobles virtual law library
There is absolutely nothing in the record which will show that the complainants
were afforded even an iota of chance to refute respondents' allegations that
the complainants did not meet the reasonable standards and criteria set by the
school. . . . 12chanrobles virtual law library
We concur with these factual findings, there being no showing that they were
resolved arbitrarily. 13 Thus, the order for their reinstatement and payment of full
backwages and other benefits and privileges from the time they were dismissed
up to their actual reinstatement is proper, conformably with Article 279 of the
Labor Code, as amended by Section 34 of Republic Act No. 6715, 14which took
effect on March 21, 1989. 15It should be noted that private respondents Roland
Picart and Lucia Chan were dismissed illegally on March 31, 1989, or after the
effectivity of said amendatory law. However, in ascertaining the total amount of
backwages payable to them, we go back to the rule prior to the mercury drug
rule 16that the total amount derived from employment elsewhere by the
employee from the date of dismissal up to the date of reinstatement, if any,
should be deducted therefrom. 17 We restate the underlying reason that
employees should not be permitted to enrich themselves at the expense of their
employer. 18 In addition, the law abhors double compensation. 19 to this extent,
our ruling in Alex Ferrer, et al., v. NLRC, et al., G.R. No. 100898, promulgated on
July 5, 1993, is hereby modified.chanroblesvirtualawlibrarychanrobles virtual law
library
Public respondent cannot claim not knowing the ruling in the Brent case
because in its questioned resolution, it is stated that one of the cases invoked by
petitioners in their appeal is said case. 20 This notwithstanding, it disregarded Our
ruling therein without any reason at all and expressed the erroneous view that:
The agreement of the parties fixing a definite date for the termination of the
employment relations is contrary to the specific provision of Article 280. being
contrary to law, the agreement cannot be legitimized. . . . 21chanrobles virtual
law library
Stare decisis et no quieta movere. Once a case ha been decided one way,
then another case, involving exactly the same point at issue, should be decided
in the same manner. Public respondent had no choice on the matter. It could
not have ruled in any other way. This Tribunal having spoken in the Brent case, its
duty was to obey. 22Let it be warned that to defy its decisions is to court
contempt. 23chanrobles virtual law library
WHEREFORE, the resolution of public respondent National Labor Relations
Commission dated November 29, 1990 is hereby MODIFIED. private respondents
Roland Picart and Lucia Chan are ordered reinstated without loss of seniority
rights and other privileges and their backwages paid in full inclusive of
allowances, and to their other benefits or their monetary equivalent pursuant to
Article 279 of the Labor Code, as amended by Section 34 of Republic Act No.
6715, subject to deduction of income earned elsewhere during the period of
dismissal, if any, to be computed from the time they were dismissed up to the
time of their actual reinstatement. the rest of the Labor Arbiter's decision dated
February 28, 1990, as affirmed by the NLRC is set aside. The temporary restraining
order issued on March 11, 1991 is made
permanent.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Bidin, Regalado, Davide, Jr., Romero, Bellosillo,
Melo, Quiason and Vitug, JJ., concur.
Separate Opinions
PADILLA, J., concurring:chanrobles virtual law library
I concur in the Court's decision penned by Mr. justice Nocon except that I
cannot see my way clear to allowing deductions from the full backwages
prescribed by law, given the language and evident intention of Rep. Act No.
6715.chanroblesvirtualawlibrarychanrobles virtual law library
1. Art. 279 of the Labor Code as amended by Rep. Act No. 6715 states: "Security
of Tenure - In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits of their monetary

equivalent computed from the time his compensation was withheld from him up
to the time of his actual reinstatement. (Emphasis supplied)chanrobles virtual
law library
The amendment to Art. 279 of the Labor Code introduced by Rep. Act. No. 6715
inserted the qualification "full" to the word "backwages". The intent of the law
seems to be clear. The plain words of the statute provide that an employee who
is unjustly dismissed is entitled to FULL backwages from the time of his dismissal to
actual reinstatement. The law provides no qualification nor does it state that
income earned by the employee during the period between his unjust dismissal
and reinstatement should be deducted from such backwages. When the law
does not provide, the court should not
improvise.chanroblesvirtualawlibrarychanrobles virtual law library
It is further my view that the principle of unjust enrichment (if no deduction is
allowed from backwages) does not apply in this case, for the following
reasons:chanrobles virtual law library
1. The applicable provision of the law should be construed in favor of
labor.chanroblesvirtualawlibrarychanrobles virtual law library
2. The Labor Code is a special law which should prevail over the Civil Code
provisions on unjust enrichment.chanroblesvirtualawlibrarychanrobles virtual law
library
3. The language employed by the statute and, therefore, its intent are clear.
Where the unjust dismissal occurs after Rep. Act No. 6715 too effect, backwages
must be awarded from the time the employee is unlawfully dismissed until the
time he is actually reinstated. There is no provision authorizing deduction of any
income earned by the employee during that period. The statutory formula was
evidently crafted by the legislature not only for convenience and expediency in
executing the monetary judgments in favor of the employees but also to
prevent the employer from resorting to delaying tactics when the judgment is
executed by pleading income earned by the employee before reinstatement
as proper deductions from backwages. It is true that the dismissed employee
may also resort to the same delaying tactics but when we consider the by and
large inherent inequality of resources between employer and employee, the
legislative formula would seem to be equitable. Besides - and this we cannot
over-stress - given the language of the law, the court appears to have no
alternative but to award such full backwages without deduction or
qualification. Any other interpretation opens the Court to the charge of
indulging in judicial legislation.chanroblesvirtualawlibrarychanrobles virtual law
library
I therefore vote to award private respondents Roland Picart and Lucia Chan full
backwages from the time of their unjust dismissal to their actual reinstatement,
without deduction or qualification in accordance with the mandate of the law
(Rep. Act No, 6715).
FIRST DIVISION
PHILIPPINE DAILY INQUIRER, INC.,
G.R. No. 164532
Petitioner,
Present:
- versus -
PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.
Promulgated:
July 24, 2007

LEON M. MAGTIBAY, JR. and
PHILIPPINE DAILY INQUIRER
EMPLOYEES UNION (PDIEU),
Respondents.
x----------------------------------------------------x
DECISION
GARCIA, J.:
By this petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Philippine Daily Inquirer, Inc. (PDI) seeks the reversal and setting aside
of the decision1[1] dated May 25, 2004 of the Court of Appeals (CA) in CA G.R.
SP No. 78963, affirming the resolution dated September 23, 2002 of the National
Labor Relations Commission (NLRC) in NLRC Case No. 00-03-01945-96. The
affirmed NLRC resolution reversed an earlier decision dated July 29, 1996 of the
Labor Arbiter in NLRC Case No. 011800-96, which dismissed the complaint for
illegal dismissal filed by the herein respondent Leon Magtibay, Jr. against the
petitioner.
The factual antecedents are undisputed:
On February 7, 1995, PDI hired Magtibay, on contractual basis, to assist, for

a period of five months from February 17, 1995, the regular phone operator.
Before the expiration of Magtibays contractual employment, he and PDI
agreed to a fifteen-day contract extension, or from July 17, 1995 up to July 31,
1995, under the same conditions as the existing contract.
After the expiration of Magtibays contractual employment, as extended,

PDI announced the creation and availability of a new position for a second
telephone
operator
who
would
undergo
probationary
employment.
Apparently, it was PDIs policy to accord regular employees preference for new
vacancies in the company. Thus, Ms. Regina M. Layague, a PDI employee and
member of respondent PDI Employees Union (PDIEU), filed her application for
the new position. However, she later withdrew her application, paving the way
for outsiders or non-PDI employees, like Magtibay in this case, to apply.
After the usual interview for the second telephone operator slot, PDI chose
to hire Magtibay on a probationary basis for a period of six (6) months. The
signing of a written contract of employment followed.
On March 13, 1996, or a week before the end the agreed 6-month
probationary period, PDI officer Benita del Rosario handed Magtibay his
termination paper, grounded on his alleged failure to meet company standards.
Aggrieved, Magtibay immediately filed a complaint for illegal dismissal and
damages before the Labor Arbiter. PDIEU later joined the fray by filing a
supplemental complaint for unfair labor practice.
Magtibay anchored his case principally on the postulate that he had
become a regular employee by operation of law, considering that he had been
employed by and had worked for PDI for a total period of ten months, i.e., four
months more than the maximum six-month period provided for by law on
probationary employment. He also claimed that he was not apprised at the
beginning of his employment of the performance standards of the company,

hence, there was no basis for his dismissal. Finally, he described his dismissal as
tainted with bad faith and effected without due process.
PDI, for its part, denied all the factual allegations of Magtibay, adding
that his previous contractual employment was validly terminated upon the
expiration of the period stated therein. Pressing the point, PDI alleged that the
period covered by the contractual employment cannot be counted with or
tacked to the period for probation, inasmuch as there is no basis to consider
Magtibay a regular employee. PDI additionally claimed that Magtibay was
dismissed for violation of company rules and policies, such as allowing his lover
to enter and linger inside the telephone operators booth and for failure to meet
prescribed company standards which were allegedly made known to him at
the start through an orientation seminar conducted by the company.
After due proceedings, the Labor Arbiter found for PDI and accordingly
dismissed Magtibays complaint for illegal dismissal. The Labor Arbiter premised
his holding on the validity of the previous contractual employment of Magtibay
as an independent contract. He also declared as binding the stipulation in the
contract specifying a fixed period of employment. According to the Labor
Arbiter, upon termination of the period stated therein, the contractual
employment was also effectively terminated, implying that Magtibay was
merely on a probationary status when his services were terminated inasmuch as
the reckoning period for probation should be from September 21, 1995 up to
March 31, 1996 as expressly provided in their probationary employment
contract. In fine, it was the Labor Arbiters position that Magtibays previous
contractual employment, as later extended by 15 days, cannot be considered

as part of his subsequent probationary employment.
Apart from the foregoing consideration, the Labor Arbiter further ruled
that Magtibays dismissal from his probationary employment was for a valid
reason. Albeit the basis for termination was couched in the abstract, i.e., you
did not meet the standards of the company, there were three specific reasons
for Magtibays termination, to wit: (1) he repeatedly violated the company rule
prohibiting unauthorized persons from entering the telephone operators room;
(2) he intentionally omitted to indicate in his application form his having a
dependent child; and (3) he exhibited lack of sense of responsibility by locking
the door of the telephone operators room on March 10, 1996 without switching
the proper lines to the company guards so that incoming calls may be
answered by them.
The Labor Arbiter likewise dismissed allegations of denial of due process

and the commission by PDI of unfair labor practice.
PDIEU and Magtibay appealed the decision of the Labor Arbiter to the
NLRC. As stated earlier, the NLRC reversed and set aside said decision,
effectively ruling that Magtibay was illegally dismissed. According to the NLRC,
Magtibays probationary employment had ripened into a regular one.
With the NLRCs denial of its motion for reconsideration, PDI went to the
CA on a petition for certiorari. Eventually, the CA denied due course to PDIs
petition on the strength of the following observations:
We agree with the findings of respondent NLRC.

Petitioner PDI failed to prove that such rules and regulations
were included in or form part of the standards that were supposed
to be made known to respondent Magtibay at the time of his
engagement as telephone operator. Particularly, as regards the
first stated infraction xxx petitioner PDI, contrary to its assertion,
stated in its position paper, motion for reconsideration and in this
petition that respondent Magtibay failed to abide by the rules and
regulations of the company issued by Ms. Benita del Rosario
regarding the entry of persons in the operators booth when
respondent was already working for petitioner PDI.
Further,
nowhere can it be found in the list of Basic Responsibility and
Specific Duties and Responsibilities (Annex D of the petition) of
respondent Magtibay that he has to abide by the duties, rules and
regulations that he has allegedly violated.
The infractions
considered by petitioner PDI as grounds for the dismissal of
respondent Magtibay may at most be classified as just causes for
the termination of the latters employment. x x x.
xxx
xxx
xxx
Finally, the three questionable grounds also relied upon by

petitioner PDI in dismissing respondent Magtibay may be
considered as just causes. However, petitioner PDI did not raise the
same as an issue in the present petition because the procedure it
adopted in dismissing respondent Magtibay fell short of the
minimum requirements provided by law.
PDI filed a motion for reconsideration but to no avail.
Hence, this recourse by PDI on the following submissions:
I.
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FINDING THAT
A PROBATIONARY EMPLOYEES FAILURE TO FOLLOW AN EMPLOYERS
RULES AND REGULATIONS CANNOT BE DEEMED FAILURE BY SAID
EMPLOYEE TO MEET THE STANDARDS OF HIS EMPLOYER THUS
EMASCULATING PETITIONERS RIGHT TO CHOOSE ITS EMPLOYEES.
II.
THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN REFUSING
TO FIND THAT PROCEDURAL DUE PROCESS AS LAID DOWN IN
SECTION 2, RULE XXIII OF THE IMPLEMENTING RULES OF THE LABOR
CODE HAD BEEN OBSERVED BY THE PETITIONER.
We GRANT the petition.
This Court, to be sure, has for a reason, consistently tended to be partial in

favor of workers or employees in labor cases whenever social legislations are
involved. However, in its quest to strike a balance between the employers
prerogative to choose his employees and the employees right to security of
tenure, the Court remains guided by the gem of a holding in an old but still
applicable case of Pampanga Bus, Co. v. Pambusco Employees Union, Inc.2[2]
In it, the Court said:
The right of a laborer to sell his labor to such persons as he

may choose is, in its essence, the same as the right of an employer
to purchase labor from any person whom it chooses. The employer
and the employee have thus an equality of right guaranteed by
the Constitution. If the employer can compel the employee to work
against the latters will, this is servitude. If the employee can
compel the employer to give him work against the employers will,
this is oppression.
Management and labor, or the employer and the employee are more
often not situated on the same level playing field, so to speak. Recognizing this
reality, the State has seen fit to adopt measures envisaged to give those who
have less in life more in law.
Article 279 of the Labor Code which gives
employees the security of tenure is one playing field leveling measure:
Art. 279. Security of Tenure. In cases of regular employment,

the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. x x x.
But hand in hand with the restraining effect of Section 279, the same
Labor Code also gives the employer a period within which to determine
whether a particular employee is fit to work for him or not. This employers
prerogative is spelled out in the following provision:
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.
In International Catholic Migration Commission v. NLRC,3[3] we have

elucidated what probationary employment entails:
x x x. A probationary employee, as understood under Article

282 (now Article 281) of the Labor Code, is one who is on trial by an
employer during which the employer determines whether or not he
is qualified for permanent employment.
A probationary
appointment is made to afford the employer an opportunity to
observe the fitness of a probationer while at work, and to ascertain
whether he will become a proper and efficient employee. The
word probationary, as used to describe the period of
employment, implies the purpose of the term or period but not its
length.
Being in the nature of a trial period the essence of a
probationary period of employment fundamentally lies in the
purpose or objective sought to be attained by both the employer
and the employee during said period. The length of time is
immaterial in determining the correlative rights of both in dealing
with each other during said period. While the employer, as
stated earlier, observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent
employment, the probationer, on the other, seeks to prove to the
employer, that he has the qualifications to meet the reasonable
standards for permanent employment.
It is well settled that the employer has the right or is at liberty
to choose who will be hired and who will be denied employment.
In that sense, it is within the exercise of the right to select his
employees that the employer may set or fix a probationary period
within which the latter may test and observe the conduct of the
former before hiring him permanently. x x x.
Within the limited legal six-month probationary period, probationary

employees are still entitled to security of tenure. It is expressly provided in the
afore-quoted Article 281 that a probationary employee may be terminated only
on two grounds: (a) for just cause, or (b) 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.4[4]
PDI invokes the second ground under the premises. In claiming that it had
adequately apprised Magtibay of the reasonable standards against which his
performance will be gauged for purposes of permanent employment, PDI cited
the one-on-one seminar between Magtibay and its Personnel Assistant, Ms.
Rachel Isip-Cuzio. PDI also pointed to Magtibays direct superior, Benita del
Rosario, who diligently briefed him about his responsibilities in PDI. These factual
assertions were never denied nor controverted by Magtibay. Neither did he
belie the existence of a specific rule prohibiting unauthorized persons from
entering the telephone operators booth and that he violated that prohibition.
This notwithstanding, the NLRC and the CA proceeded nonetheless to rule that
the records of the case are bereft of any evidence showing that these rules and
regulations form part of the so-called company standards.
We do not agree with the appellate court when it cleared the NLRC of
commission of grave abuse of discretion despite the latters disregard of clear
and convincing evidence that there were reasonable standards made known
by PDI to Magtibay during his probationary employment. It is on record that
Magtibay committed obstinate infractions of company rules and regulations,
which in turn constitute sufficient manifestations of his inadequacy to meet

reasonable employment norms. The suggestion that Magtibay ought to have
been made to understand during his briefing and orientation that he is
expected to obey and comply with company rules and regulations strains
credulity for acceptance. The CAs observation that nowhere can it be found
in the list of Basic Responsibility and Specific Duties and Responsibilities of
respondent Magtibay that he has to abide by the duties, rules and regulations
that he has allegedly violated is a strained rationalization of an unacceptable
conduct of an employee. Common industry practice and ordinary human
experience do not support the CAs posture. All employees, be they regular or
probationary, are expected to comply with company-imposed rules and
regulations, else why establish them in the first place. Probationary employees
unwilling to abide by such rules have no right to expect, much less demand,
permanent employment. We, therefore find sufficient factual and legal basis,
duly established by substantial evidence, for PDI to legally terminate Magtibays
probationary employment effective upon the end of the 6-month probationary
period.
It is undisputed that PDI apprised Magtibay of the ground of his

termination, i.e., he failed to qualify as a regular employee in accordance with
reasonable standards made known to him at the time of engagement, only a
week before the expiration of the six-month probationary period. Given this
perspective, does this make his termination unlawful for being violative of his
right to due process of law?
It does not.
Unlike under the first ground for the valid termination of probationary
employment which is for just cause, the second ground does not require notice
and hearing. Due process of law for this second ground consists of making the
reasonable standards expected of the employee during his probationary period
known to him at the time of his probationary employment. By the very nature of
a probationary employment, the employee knows from the very start that he will
be under close observation and his performance of his assigned duties and
functions would be under continuous scrutiny by his superiors. It is in apprising
him of the standards against
which his performance shall be continuously
assessed where due process regarding the second ground lies, and not in notice
and hearing as in the case of the first ground.
Even if perhaps he wanted to, Magtibay cannot deny as he has not

denied PDIs
assertion that he was duly apprised of the employment
standards expected of him at the time of his probationary employment when he

underwent a one-on-one orientation with PDIs personnel assistant, Ms. Rachel
Isip-Cuzio. Neither has he denied nor rebutted PDIs further claim that his direct
superior, Benita del Rosario, briefed him regarding his responsibilities in PDI.
Lest it be overlooked, Magtibay had previously worked for PDI as

telephone operator from February 7, 1995 to July 31, 1995 as a contractual
employee. Thus, the Court entertains no doubt that when PDI took him in on
September 21, 1995, Magtibay was already very much aware of the level of
competency and professionalism PDI wanted out of him for the entire duration
of his probationary employment.
PDI was only exercising its statutory hiring prerogative when it refused to
hire Magtibay on a permanent basis upon the expiration of the six-month
probationary period. This was established during the proceedings before the
labor arbiter and borne out by the records and the pleadings before the Court.
When the NLRC disregarded the substantial evidence establishing the legal
termination of Magtibays probationary employment and rendered judgment
grossly and directly contradicting such clear evidence, the NLRC commits
grave abuse of discretion amounting to lack or excess of jurisdiction. It was,
therefore, reversible error on the part of the appellate court not to annul and set
aside such void judgment of the NLRC.
WHEREFORE, the assailed decision dated May 25, 2004 of the CA in CA

G.R. SP No. 78963 is hereby REVERSED and SET ASIDE, and the earlier resolution
dated September 23, 2002 of the NLRC in NLRC Case No. 00-03-01945-96 is
declared NULL and VOID. The earlier decision dated July 29, 1996 of the Labor
Arbiter in NLRC Case No. 011800-96, dismissing respondent Leon Magtibay, Jr.s
complaint for alleged illegal dismissal, is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
IRST DIVISION
[G.R. No. 149371. April 13, 2005]
ABERDEEN COURT, INC., and RICHARD NG, petitioners, vs. MATEO C. AGUSTIN
JR., respondent.
DECISION
AZCUNA, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, assailing the Decision of the Court of Appeals in CAG.R. SP No.
60223, entitled Mateo Agustin Jr. v. National Labor Relations Commission (First
Division), Aberdeen Court, Inc. and Ricardo Ng, dated January 31, 2001, and
the Resolution of August 10, 2001 denying the motion for reconsideration therein.
On September 16, 1996, Aberdeen Court, Inc. (Aberdeen), one of the
petitioners, employed Mateo C. Agustin (Agustin), herein respondent, for the
purpose of trouble shooting the electrical problems in said petitioners
establishment. Agustin was engaged on a six-month probationary basis. The
employment contract provided, inter alia, that:
Should my performance be considered unsatisfactory at any time by
management during my probationary period, I understand and agree that the
management can terminate my services at any time, even before the
termination of the agreed six-month period.[1]
On January 12 and 13, 1997 the personnel of Centigrade Industries, Inc.
performed a reading of the exhaust air balancing at the fifth and sixth floors of
Aberdeens premises. Petitioners claim that Agustin was placed in charge of
the undertaking. On the other hand, Agustin asserts that Engr. Abad merely
requested him to accompany the aforesaid personnel to show the location of
the exhaust air outlet at the fifth and sixth floors of the premises. He avers that:
The request of Engr. Abad is actually the responsibility of the companys
mechanical engineers. Despite the fact that the request of Engr. Abad is not a
part of his job since he is not a mechanical engineer and there were three (3)
other mechanical engineers on duty in the company premises, petitioner [herein
respondent], being a subordinate of Engr. Abad, obliged and accompanied
the aforementioned personnel to the location. There were no other specific
instructions from Engr. Abad to petitioner with respect to the conduct or actual
reading to be made by the Centigrade personnel.
It must be noted that the reading of exhaust air balancing is under the category
of heating, ventilating and air conditioning (HVAC) which are within the realm of
field of work of mechanical engineers. Being an electrical engineer, petitioner
obviously has no knowledge of the procedure and the equipment used by
mechanical engineers in the conduct of the reading of the exhaust air

balancing.[2]
After the Centigrade personnel finished their job, they submitted their report to
Agustin. Petitioners allege that Agustin accepted and signed the report, without
verifying its correctness. Engineer Abad later checked the work of the
Centigrade employees only to find out that four rooms in the fifth floor and five
rooms in the sixth floor were incorrectly done.[3] In contrast, Agustin states that
after the report was handed to him, he took the same to Engr. Abad, who he
claims was responsible for evaluating and confirming the said report. Allegedly,
instead of signing it himself, Engr. Abad directed respondent to sign it, giving the
reason that Agustin was present when the reading was conducted. Respondent
Agustin complied, but he now points out that his signature was not
accompanied by any qualification that he accepted the report on behalf of
Aberdeen. He claims that he signed merely to evidence that he received a
copy of the report.[4]
The parties also differ on the occurrences two days after the signing of the
report or on January 15, 1997. According to petitioners, Aberdeen
management confronted Agustin with his failure to check the job and asked
him to explain his side. Agustin allegedly ignored management and left the
company, which made it impossible for Aberdeen to transmit any further notice
to him.[5]
However, Agustin claims that:
On January 15, 1997 or two days after the report was submitted by Centigrade
Industries, petitioner [herein respondent] was summarily dismissed. In the
afternoon of that day, he received a telephone call from the personnel office of
respondent company ordering him to report to that office after his tour of duty.
At about seven p.m. at the personnel office, Ms. Lani Carlos of the Personnel
Department, informed him that Aberdeen Court is terminating his services as
electrical engineer. Petitioner was flabbergasted. Ms. Carlos then informed him
that he could get his two (2) weeks salary in the amount of P4,000, more or less,
on the condition that he will sign some documents which provides that the
company has no more liability and that he is voluntarily resigning from
Aberdeen Court. Aware of his rights, petitioner did not sign the offered
documents. He was then hurriedly led to the door by Ms. Carlos.
The following day or on January 16, 1997, petitioner requested assistance from
the Department of Labor and Employment (DOLE). A DOLE personnel told him
to report for work since private respondents did not serve him a notice of
termination. As instructed, petitioner reported for work on the same day. Upon
arriving at the company premises, petitioner asked Ms. Carlos if he could still
report for work but private respondents personnel officer told him that he
cannot do so.[6]
Within the same month of that year, respondent Agustin filed a complaint for
illegal dismissal which was docketed as NLRC NCR Case No. 00-01-00466-97.
In an undated decision, the labor arbiter rendered judgment in favor of herein
respondent, declaring that Agustin was illegally dismissed, thus:
WHEREFORE, judgment is hereby rendered:
1.
Ordering respondent ABERDEEN COURT, INC. to reinstate to his

former position without loss of seniority rights complainant MATEO C.
AGUSTIN, JR.
2.
Ordering respondent to pay to complainant backwages in the sum

of PHP P175,933.33.[7]
Petitioners appealed the decision to the National Labor Relations Commission

(NLRC). On February 29, 2000, the NLRC reversed the decision of the Labor
Arbiter and held that Agustin had not been illegally dismissed, disposing thus:
WHEREFORE, for and on account of the reasons above-discussed, the decision
appealed from is hereby reversed and set aside and a new one entered
dismissing the complaint for lack of merit.[8]
From the NLRC decision, Agustin filed a petition for certiorari under Rule 65 of the
Rules of Court with the Court of Appeals. The appellate court ruled in favor of
Agustin and reasoned thus:
Constructive dismissal is defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving demotion in
rank and a diminution in pay (Jarcia Machine Shop and Auto Supply, Inc. vs.
National Labor Relations Commission, 266 SCRA 97, 108). As there is no showing
in the record of any circumstance to support the proposition that the petitioner
was constructively dismissed, the private respondents correctly point out the
flaw in the first ground proffered by the petitioner in support of his petition. Be
that as it may, the petitioners erroneous choice of terminology does not, to our
mind, preclude a finding of illegal dismissal. Alongside the private respondents
contention that it was the petitioner who unceremoniously quit his employment
after being confronted with his negligence, greater stock m[a]y be taken of the
petitioners immediate recourse for assistance from the Department of Labor
and his subsequent filing of his complaint. The rule is settled that the immediate
filing of a complaint for illegal dismissal is inconsistent with abandonment
(Pampanga Sugar Development Company, Inc. vs. National Labor Relations

Commission, 272 SCRA 737, 747) and, in such cases, the burden of proof to
establish the validity of the dismissal of an employee lies on the employer
(Gonpu Services Corporation vs. National Labor Relations Commission, 266 SCRA
657, 662). Rather than the employee who must prove its invalidity, it is the
employer who should prove the validity of a dismissal. (Sanyo Travel Corporation
vs. National Labor Relations Commission, 280 SCRA 129, 138) and failure to do so
will result in a finding that the dismissal was unfounded (Reformist Union of R.B.
Liner, Inc. vs. National Labor Relations Commissions, 266 SCRA 713, 726).
Our perusal of the record yielded no showing of satisfactory attempt on the part
of the private respondents to prove the validity of the petitioners dismissal. It
bears emphasizing that, to be lawful, the employees dismissal must comply with
the following requirements (a) the dismissal must be for any of the causes
provided in Article 292 of the Labor Code; and, (b) the employee must be given
an opportunity to be heard and defend himself (Molato vs. National Labor
Relations Commission, 266 SCRA 42, 45). The employer must first affirmatively
show rationally adequate evidence that the dismissal was for a justifiable cause
(Brahm Industries, Inc. vs. National Labor Relations Commission, 280 SCRA
828,838).
It is our considered view that the private respondents did not succeed in
discharging the aforesaid onus. Against the petitioners contention that exhaust
air balancing is neither covered by his duties nor competence, there is no
showing that the private respondents even attempted to prove the extent of
the petitioners technical responsibilities. Even assuming that the task properly
pertained to the petitioner, an employee where, as in the case at bench, the
offense appears to be the first committed by the employee, was devoid of
malice and, more importantly, was not his sole responsibility (Tumbiga vs.
National Labor Relations Commission, 274 SCRA 338, 348).
The fact that the petitioner was still in his probationary period of employment did
not lessen the burden of proof the law imposes on the private respondents.
Probationary employees are protected by the security of tenure provision of the
Constitution and cannot, likewise, be removed from their position unless for
cause (Pines City Educational Center vs. National Labor Relations Commission,
227 SCRA 655, 663). Article 281 of the Labor Code of the Philippines, as
amended provides:
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 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.
Aside from failing to show a just cause for the termination of the petitioners
services, the private respondents appear not to have even deigned to show
such reasonable standards the petitioners failure to measure up alongside
which would have justified his dismissal from employment.
Neither did the private respondents successfully show their compliance with the
second requirement for the validity of the termination of petitioners
employment. Their contention that it was the latter who abandoned his job
cannot be taken at face value in view of the fact that an employee who
forthwith takes steps to protest his layoff cannot, by any logic, be said to have
abandoned his work (Nazal vs. National Labor Relations Commission, 274 SCRA
350, 355). Even without the petitioners affirmative allegation that he returned to
his workplace after being so advised at the Department of Labor and
Employment, we find the dearth of any notice of termination sent to the
petitioner or, at the very least, his address in the respondent corporations
record derogatory of elementary requirements of due process. A valid dismissal
presupposes not only the validity of its cause, but also the validity of the manner
by which dismissal is done (Dela Cruz vs. National Labor Relations Commission,
277, SCRA 563, 573) and failure to prove the observance of due process as in
the case at bench taints the dismissal (Aquinas School vs. Magnaye, 278 SCRA
602, 612).
Having been illegally dismissed from employment, the petitioner is as initially
ruled by the Labor Arbiter entitled to reinstatement and backwages in
accordance with the Labor Code of the Philippines (Magcalas vs. National
Labor Relations Commission, 269 SCRA 453, 470).[9]
The dispositive portion of the aforesaid Decision of the Court of Appeals, dated
January 31, 2001, states:
WHEREFORE, the instant petition is GRANTED and the assailed decision dated
February 29, 2000 of the First Division of the National Labor Relations Commission
is REVERSED and SET ASIDE. In lieu thereof, the undated decision of Labor Arbiter
Celenito N. Daing rendered in NLRC NCR Case No. 00-01-00466-97 is REINSTATED.
No costs.[10]
Petitioners filed a motion for reconsideration dated February 20, 2001, which the
Court of Appeals denied in its Resolution of August 10, 2001.
Unsatisfied, petitioners filed the instant petition on August 29, 2001 and raised the
following assignments of error:
1.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION
(ANNEX E) WHOSE FINDING OF FACTS ARE BY LAW ACCORDED DUE RESPECT
AND EVEN FINALITY, AFFIRMING THAT OF THE LABOR ARBITER. SUCH REVERSAL OF
THE COMMISSIONS DECISION IS BASED ON SPECULATION.
2.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
NOT ENTERTAINING OR EVEN RESOLVING THE ISSUE POSED BY PETITIONERS THAT IT
IS NOT FOR THE COURT TO REGULARIZE THE EMPLOYMENT OF A PROBATIONARY
EMPLOYEE AND ASSUMING HIS DISMISSAL IS ILLEGAL HIS BACKWAGES SHOULD
NOT GO BEYOND HIS PROBATIONARY EMPLOYMENT.
3.
AND ASSUMING THE REINSTATEMENT OF RESPONDENT IS LEGAL, HIS
BACKWAGES SHOULD NOT GO BEYOND ONE (1) MONTH FROM SUBMISSION FOR
DECISION (APRIL 30, 1997).[11]
Petitioners argue, as follows:
It has been ruled that findings of fact of the NLRC, except where there is grave
abuse of discretion committed by it, are conclusive on the Supreme Court.
National Union of Workers in Hotels, Restaurants and Allied Industries vs. National
Labor Relations Commissions, 287 SCRA 192.
Factual findings of the quasi-judicial agencies like the National Labor Relations
Commission, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only respect but even
finality. Suarez vs. National Labor Relations Commission, 293 SCRA 496.
Findings of fact of quasi-judicial bodies, like the National Labor Relations
Commission, are accorded with respect, even finality, if supported by substantial
evidence. Travelaire & Tours Corporation vs. National Labor Relations
Commission, 294 SCRA 505.[12]
Petitioners also contend that the Court of Appeals has no legal right to
regularize the employment of a probationary employee without assessing the
employees performance. Petitioners claim that the Court of Appeals
committed an error of law when it ordered the reinstatement of respondent
beyond March 15, 1997, which is six (6) months from the time respondent
commenced working. Petitioners contend that the reinstatement of Agustin
beyond that date resulted in regularizing his employment.[13] Going further,
petitioners quote the stipulation in the contract of probationary employment

that respondent signed, earlier adverted to.[14]
Petitioners, finally, raise Article 281 of the Labor Code which reads, as follows:
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.
It can be gleaned from Article 281 of the Labor Code that there are two
grounds to legally terminate a probationary employee. It may be done either:
a) for a just cause or b) when employee fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the
employee at the start of the employment.
Petitioners say that Agustin was terminated because he failed to qualify as a
regular employee. Petitioners, however, allegedly did not show that respondent
was apprised of these reasonable standards at the start of the employment.
In Servidad v. NLRC et al.,[15] where effectively the probationary period was for
one year, the Court stated:
If the nature of the job did actually necessitate at least one year for the
employee to acquire the requisite training and experience, still, the same could
not be a valid probationary employment as it falls short of the requirement of
Article 281 of the Labor Code. It was not brought to light that the petitioner was
duly informed at the start of his employment, of the reasonable standards under
which he could qualify as a regular employee. The rudiments of due process
demand that an employee should be apprised beforehand of the conditions of
his employment and the basis for his advancement.
Similarly, in Secon Philippines Ltd. v. NLRC,[16] the dismissal of the employee was
declared illegal by the Court because the employer did not prove that the
employee was properly apprised of the standards of the job at the time of his
engagement and, naturally, the employer could not show that the employee
failed to meet such standards.
The Implementing Rules of the Labor Code in Book VI, Rule I, Section 6, also
provides:
Probationary employment. -- There is probationary employment where the

employee, upon his engagement, is made to undergo a trial period during
which the employer determines his fitness to qualify for regular employment,
based on reasonable standards made known to him at the time of
engagement.
Probationary employment shall be governed by the following rules:
...
(c) The services of an employee who has been engaged on probationary
basis may be terminated only for a just cause, when he fails to qualify as a
regular employee in accordance with the reasonable standards prescribed by
the employer.
(d) In all cases of probationary employment, the employer shall make known
to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. Where no standards are made
known to the employee at that time, he shall be deemed a regular employee.
[17]
The above rule, however, should not be used to exculpate a probationary
employee who acts in a manner contrary to basic knowledge and common
sense, in regard to which there is no need to spell out a policy or standard to be
met. This is what the NLRC found to be the fact in this case. Said the NLRC:
It bears stressing that even if technically the reading of air exhaust balancing is
not within the realm of expertise of the complainant, still it ought not to be
missed that prudence and due diligence imposed upon him not to readily
accept the report handed to him by the workers of Centigrade Industries.
Required of the complainant was that he himself proceed to the work area,
inquire from the workers as to any difficulties encountered, problems fixed and
otherwise observe for himself the progress and/or condition/quality of the work
performed.
As it is, We find it hard to believe that complainant would just have been made
to sign the report to signify his presence. By saying so, complainant is
inadvertently degrading himself from an electrical engineer to a mere
watchdog. It is in this regard that We concur with the respondents that by his
omission, lack of concern and grasp of basic knowledge and common sense,
complainant has shown himself to be undeserving of continued employment
from probationary employee to regular employee.[18]
Nevertheless, it appears that petitioners violated due process in the dismissal of

respondent, by not affording him the required notice. As this Court held in
Agabon, et al. v. NLRC, et al.,[19] an employer who dismisses an employee for
just cause but does so without notice, is liable for nominal damages in the
amount of P30,000.
WHEREFORE, the petition is partly GRANTED and the assailed Decision and
Resolution of the Court of Appeals are MODIFIED in that respondent is declared
dismissed for just cause but petitioners are ordered to pay him nominal
damages in the amount of P30,000.
No costs.
SO ORDERED.
FIRST DIVISION
[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.
DECISION
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.5[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 13th 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).6[2]
Petitioner companys 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 written
agreement of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
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 workers 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.7[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 entirety8[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,9[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.10[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.11[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.12[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.13[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.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 106090 February 28, 1994

RICARDO FERNANDEZ, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and D. M. CONSUNJI, INC.,
respondents.
Gaston V. Taquio for petitioner.
Marcos S. Pagaspas for private respondent.
NOCON, J.:
Forming the crux of the matter in this petition for certiorari is the question of
whether or not the National Labor Relations Commission acted with grave
abuse of discretion in reversing the Labor Arbiter's decision by dismissing the
complaints for illegal dismissal, one of which is petitioner's, on the finding that
they were project employees.
Petitioner was hired as a laborer at the D.M. Consunji, Inc., a construction firm,
on November 5, 1974. He became a skilled welder and worked for private
respondent until March 23, 1986 when his employment was terminated on the
ground that the project petitioner had been assigned to was already
completed and there was no more work for him to do.
Skeptic of private respondent's reason, petitioner brought his plight before the
Labor Arbiter who consolidated the same with three (3) other separate
complaints for illegal dismissal and various money claims against private
respondent. After filing their respective position papers and other documents
pertinent to their causes/defenses, the parties agreed to submit the case for
decision based on record.
On May 12, 1988, Labor Arbiter Fernando V. Cinco rendered a decision, finding
that complainants worked continuously in various projects ranging from five (5)
to twenty (20) years and belonged to a work pool, the dispositive portion of
which states as follows:
WHEREFORE, premises considered, the terminations by respondent
of herein complainants are hereby declared illegal. Consequently,
respondent is ordered to reinstate the complainants, who have not
yet reached the retirement age, to their former positions plus

backwages of one (1) year.
Anent complainants who have already reach the retirement age of
sixty (60) years as of the date of this decision, respondent is thereby
ordered to pay said complainants their retirement/separation
benefits equivalent to one half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one
(1) whole year.
Moreover, respondent is ordered to pay all complainants their
service incentive leave for the past three (3) years; and to pay
complainants Ricardo Fernandez, Gaudencio Merhan and Rolando
Serona their 13th month pay likewise for the past three (3) years.
The complaints of Amador Borromeo, Jesus Espiritu and Ramon
Celestial are hereby dismissed in view of their receipt of Separation
pay and their execution of quitclaims in favor of herein respondent.
The other claims are likewise dismissed for lack of merit.
SO ORDERED.
Metro Manila, Philippines. 12 May 1988. 1
Private respondent questioned on appeal the aforesaid decision of the Labor
Arbiter on the ground that the complainants were all project employees who
were hired on a project-to-project basis, depending on the availability of
projects that the former was able to close with its clients. Respondent pointed to
the gaps in complainants' respective employment histories to show that they
were indeed hired on an "off-and-on" basis.
In view of the lack of evidence on record to prove the continuous employment
of complainants-appellees, and that on the contrary, what was proven was the
intermittent nature of their work as shown by the different project contracts, the
respondent Commission concluded that complainants-appellees were project
employees. The dispositive portion of the decision dated September 29, 1989 of
respondent Commission reads:
WHEREFORE, the decision of the Labor Arbiter is hereby set aside
and a new one entered dismissing the complaints filed by
complainants-appellees for lack of merit. 2
From said decision, the complainants-appellees interposed a motion for

reconsideration which was denied for lack of merit on July 19, 1991. Respondent
Commission affirmed its finding that complainants-appellees were project
employees. As such, the nature of their employment did not change by the
number of projects in which they have rendered service. Respondent
Commission also noted that the motion for reconsideration was filed only on
January 29, 1990 which was beyond the ten-day reglementary period from date
of receipt of the decision on November 13, 1989.
Without any mention of the denial of said motion for reconsideration, petitioner
alone comes before this Court on a petition filed on July 21, 1992 and assails the
decision dated September 29, 1989 of respondent Commission contending that
it is more in keeping with the intent and spirit of the law to consider him and the
thirteen (13) other complainants in the consolidated cases as regular
employees.
At the outset, it is obvious that the petition was not filed within a reasonable time
from receipt of the questioned decision on November 13, 1989 as the petition
was filed only on July 21, 1992. Neither does the filing of the petition appear to
be reasonable from the date of receipt of the denial of the motion for
reconsideration on August 2, 1991. Reckoned from this later date, petitioner
waited for almost one year before he availed of this extraordinary remedy of
certiorari. We have consistently stated that "the yardstick to measure the
timeliness of a petition for certiorari is the reasonableness of the duration of time
that had expired from the commission of the acts complained of up to the
institution of the proceedings to annul the same." 3 Without doubt, petitioner's
negligence or indifference for such a long period of time has in the meantime
rendered the questioned decision final and no longer assailable.
Even if we were to dispense with the requirement that the petition should be
filed within a reasonable time, the petition would still have to be dismissed on
the merits. Private respondent presented material documents showing that
petitioner was hired as a project employee with the specific dates of hiring, the
duration of hiring, the dates of his lay-offs, including the lay-off reports and the
termination reports submitted to the then Ministry of Labor and Employment.
Such data covered the period from November 5, 1974 to March 23, 1986.
Inasmuch as the documentary evidence clearly showed gaps of a month or
months between the hiring of petitioner in the numerous projects wherein he
was assigned, the ineluctable conclusion is that petitioner has not continuously
worked with private respondent but only intermittently as he was hired solely for
specific projects. As such, he is governed by Policy Instruction No. 20, the
pertinent portions of which read as follows:
Generally, there are two types of employees in the construction

industry, namely 1) Project Employees and 2) Non-project
Employees.
Project employees are those employed in connection with a
particular construction project. Non-project employees are those
employed by a construction company without reference to a
particular project.
Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular
construction company.
Petitioner cites Article 280 of the Labor Code as legal basis for the decision of
the Labor Arbiter in his favor. The text of Article 280 states as follows:
Art. 280. Regular and Casual Employment. The provisions of
written agreement to the contrary notwithstanding and regardless
of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such actually exists.
Petitioner claims that the above-quoted proviso in Article 280 of the Labor Code
supports his claim that he should be regarded as a regular employee.
We disagree. The proviso in the second paragraph of Article 280 of the Labor
Code has recently been explained in Mercado v. NLRC, 4 where it was held that
said proviso deems as regular employees only those "casual" employees who
have rendered at least one year of service regardless of the fact that such
service may be continuous or broken. It is not applicable to "project" employees,

who are specifically excepted therefrom. Thus, the Court therein said:
The general rule is that the office of a proviso is to qualify or modify
only the phrase immediately preceding it or restrain or limit the
generality of the clause that it immediately follows. (Statutory
Construction by Ruben Agpalo, 1986 ed., p. 173). Thus, it has been
held that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached,
and not to the statute itself or to other sections thereof. (Chinese
Flour Importers Association v. Price Stabilization Board, 89 Phil. 469
(1951); Arenas v. City of San Carlos, G.R. No. 24024, April 5, 1978, 82
SCRA 318 (1978). The only exception to the rule is where the clear
legislative intent is to restrain or qualify not only the phrase
immediately preceding it (the proviso) but also earlier provisions of
the statute or even the statute itself as a whole. (Commissioner of
Internal Revenue v. Filipinas Compania de Seguros, 107 Phil. 1055
(1960)
Indeed, a careful reading of the proviso readily discloses that the same relates
to employment where the employee is engaged to perform activities that are
usually necessary or desirable in the usual business or trade of the employer but
hastens to qualify that project employment is specifically exempted therefrom.
Finally, petitioner relies on Policy Instruction No. 20 which was issued by then
Secretary Blas F. Ople to stabilize employer-employee relations in the
construction industry to support his contention that workers in the construction
industry may now be considered regular employees after their long years of
service with private respondent. The pertinent provision of Policy Instruction No.
20 reads:
Members of a work pool from which a construction company draws
its project employees, if considered employees of the construction
company while in the work pool, are non-project employees or
employees for an indefinite period. If they are employed in a
particular project, the completion of the project or of any phase
thereof will not mean severance of employer-employee
relationship.
Respondent Commission correctly observed in its decision that complainants,
one of whom petitioner, failed to consider the requirement in Policy Instruction
No. 20 that to qualify as member of a work pool, the worker must still be
considered an employee of the construction company while in the work pool. In
other words, there must be proof to the effect that petitioner was under an
obligation to be always available on call of private respondent and that he was

not free to offer his services to other employees. Unfortunately, petitioner
miserably failed to introduce any evidence of such nature during the times
when there were no project.
Noteworthy in this case is the fact that herein private respondent's lay-off reports
and the termination reports were duly submitted to the then Ministry of Labor
and Employment everytime a project was completed in accordance with Policy
Instruction No. 20, which provides:
Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular
construction company. Moreover, the company is not required to
obtain a clearance from the Secretary of Labor in connection with
such termination. What is required of the company is a report to the
nearest Public Employment Office for statistical purposes.
The presence of this factor makes this case different from the cases decided by
the Court where the employees were deemed regular employees. The cases of
Ochoco v. National Labor Relations Commission, 5 Philippine National
Construction Corporation v. National Labor Relations Commission, 6 Magante v.
National Labor Relations Commission, 7 and Philippine National Construction
Corporation v. National Labor Relations, et al., 8 uniformly held that the failure of
the employer to report to the nearest employment office the termination of
workers everytime a project is completed proves that the employees are not
project employees. Contrariwise, the faithful and regular effort of private
respondent in reporting every completion of its project and submitting the layoff list of its employees proves the nature of employment of the workers involved
therein as project employees. Given this added circumstance behind
petitioner's employment, it is clear that he does not belong to the work pool
from which the private respondent would draw workers for assignment to other
projects at its discretion.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED in view of the
foregoing reasons.
SO ORDERED.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 149440
January 28, 2003
HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE

SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE,
respondents.
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was
seasonal in nature, they failed to prove that the latter worked only for the
duration of one particular season. In fact, petitioners do not deny that these
workers have served them for several years already. Hence, they are regular
not seasonal employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court,
seeking to set aside the February 20, 2001 Decision of the Court of Appeals 1
(CA) in CA-GR SP No. 51033. The dispositive part of the Decision reads:
"WHEREFORE, premises considered, the instant special civil action for
certiorari is hereby DENIED." 2
On the other hand, the National Labor Relations Commission (NLRC)
Decision, 3 upheld by the CA, disposed in this wise:
"WHEREFORE, premises considered, the decision of the Labor Arbiter is
hereby SET ASIDE and VACATED and a new one entered declaring
complainants to have been illegally dismissed. Respondents are hereby
ORDERED to reinstate complainants except Luisa Rombo, Ramona
Rombo, Bobong Abriga and Boboy Silva to their previous position and to
pay full backwages from September 1991 until reinstated. Respondents
being guilty of unfair labor practice are further ordered to pay
complainant union the sum of P10,000.00 as moral damages and
P5,000.00 as exemplary damages." 4
The Facts
The facts are summarized in the NLRC Decision as follows:
"Contrary to the findings of the Labor Arbiter that complainants [herein

respondents] refused to work and/or were choosy in the kind of jobs they
wanted to perform, the records is replete with complainants' persistence
and dogged determination in going back to work.
"Indeed, it would appear that respondents did not look with favor workers'
having organized themselves into a union. Thus, when complainant union
was certified as the collective bargaining representative in the
certification elections, respondents under the pretext that the result was
on appeal, refused to sit down with the union for the purpose of entering
into a collective bargaining agreement. Moreover, the workers including
complainants herein were not given work for more than one month. In
protest, complainants staged a strike which was however settled upon the
signing of a Memorandum of Agreement which stipulated among others
that:
'a) The parties will initially meet for CBA negotiations on the 11th day
of January 1991 and will endeavor to conclude the same within
thirty (30) days.
'b) The management will give priority to the women workers who
are members of the union in case work relative . . . or amount[ing]
to gahit and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his normal work load which is
six (6) days in a week.
'd) The management will provide fifteen (15) wagons for the workers
and that existing workforce prior to the actual strike will be given
priority. However, in case the said workforce would not be enough,
the management can hire additional workers to supplement them.
'e) The management will not anymore allow the scabs, numbering
about eighteen (18) workers[,] to work in the hacienda; and
'f) The union will immediately lift the picket upon signing of this
agreement.'
"However, alleging that complainants failed to load the fifteen wagons,
respondents reneged on its commitment to sit down and bargain
collectively. Instead, respondent employed all means including the use of
private armed guards to prevent the organizers from entering the
premises.
"Moreover, starting September 1991, respondents did not any more give
work assignments to the complainants forcing the union to stage a strike
on January 2, 1992. But due to the conciliation efforts by the DOLE,
another Memorandum of Agreement was signed by the complainants
and respondents which provides:
'Whereas the union staged a strike against management on January 2,
1992 grounded on the dismissal of the union officials and members;
'Whereas parties to the present dispute agree to settle the case amicably
once and for all;
'Now therefore, in the interest of both labor and management,
parties herein agree as follows:
'1. That the list of the names of affected union members hereto
attached and made part of this agreement shall be referred to the
Hacienda payroll of 1990 and determine whether or not this
concerned Union members are hacienda workers;
'2. That in addition to the payroll of 1990 as reference, herein parties
will use as guide the subjects of a Memorandum of Agreement
entered into by and between the parties last January 4, 1990;
'3. That herein parties can use other employment references in
support of their respective claims whether or not any or all of the
listed 36 union members are employees or hacienda workers or not
as the case may be;
'4. That in case conflict or disagreement arises in the determination
of the status of the particular hacienda workers subject of this
agreement herein parties further agree to submit the same to
voluntary arbitration;
'5. To effect the above, a Committee to be chaired by Rose
Mengaling is hereby created to be composed of three
representatives each and is given five working days starting Jan. 23,
1992 to resolve the status of the subject 36 hacienda workers. (Union
representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the Minutes of the
Conciliation Meeting showed as follows:
'The meeting started at 10:00 A.M. A list of employees was

submitted by Atty. Tayko based on who received their 13th month
pay. The following are deemed not considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
'The name Orencio Rombo shall be verified in the 1990 payroll.
'The following employees shall be reinstated immediately upon
availability of work:
1. Jose Dagle
7. Alejandro
Tejares
2. Rico Dagle
8. Gaudioso
Rombo
3. Ricardo Dagle
9. Martin Alas-as Jr.
4. Jesus Silva
10. Cresensio
Abrega
5. Fernando Silva
11. Ariston Eruela

Sr.
6. Ernesto Tejares
12. Ariston Eruela

Jr.'
"When respondents again reneged on its commitment; complainants filed

the present complaint.
"But for all their persistence, the risk they had to undergo in conducting a
strike in the face of overwhelming odds, complainants in an ironic twist of
fate now find themselves being accused of 'refusing to work and being
choosy in the kind of work they have to perform'." 5 (Citations omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was seasonal in nature, they
were considered to be merely on leave during the off-season and were
therefore still employed by petitioners. Moreover, the workers enjoyed security of
tenure. Any infringement upon this right was deemed by the CA to be
tantamount to illegal dismissal.
The appellate court found neither "rhyme nor reason in petitioner's argument
that it was the workers themselves who refused to or were choosy in their work."
As found by the NLRC, the record of this case is "replete with complainants'
persistence and dogged determination in going back to work." 6
The CA likewise concurred with the NLRC's finding that petitioners were guilty of
unfair labor practice.
Hence this Petition. 7
Issues
Petitioners raise the following issues for the Court's consideration:
"A. Whether or not the Court of Appeals erred in holding that respondents,
admittedly seasonal workers, were regular employees, contrary to the
clear provisions of Article 280 of the Labor Code, which categorically
state that seasonal employees are not covered by the definition of
regular employees under paragraph 1, nor covered under paragraph 2
which refers exclusively to casual employees who have served for at least
one year.
"B. Whether or not the Court of Appeals erred in rejecting the ruling in
Mercado, . . . and relying instead on rulings which are not directly
applicable to the case at bench, viz, Philippine Tobacco, BacolodMurcia, and Gaco, . . .
"C Whether or not the Court of Appeals committed grave abuse of
discretion in upholding the NLRC's conclusion that private respondents
were illegally dismissed, that petitioner[s were] guilty of unfair labor
practice, and that the union be awarded moral and exemplary
damages." 8
Consistent with the discussion in petitioners' Memorandum, we shall take up
Items A and B as the first issue and Item C as the second.
The Court's Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this
Court in petitions for review on certiorari of CA decisions. 9 Questions of fact are
not entertained. 10 The Court is not a trier of facts and, in labor cases, this
doctrine applies with greater force. 11 Factual questions are for labor tribunals to
resolve. 12 In the present case, these have already been threshed out by the
NLRC. Its findings were affirmed by the appellate court.
Contrary to petitioners' contention, the CA did not err when it held that
respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"Art. 280. Regular and Casual Employment. The provisions of written
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
"An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered
at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such
activity exist." (Italics supplied)
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 also been employed only for the duration of one season. The
evidence proves the existence of the first, but not of the second, condition. The
fact that respondents with the exception of Luisa Rombo, Ramona Rombo,
Bobong Abriga and Boboy Silva repeatedly worked as sugarcane workers for
petitioners for several years is not denied by the latter. Evidently, petitioners
employed respondents for more than one season. Therefore, the general rule of
regular employment is applicable.
In Abasolo v. National Labor Relations Commission, 13 the Court issued this
clarification:
"[T]he test of whether or not an employee is a regular employee has been

laid down in De Leon v. NLRC, in which this Court held:
"The primary standard, therefore, of determining regular employment is
the reasonable connection between the particular activity performed by
the employee in relation to the usual trade or business of the employer.
The test is whether the former is usually necessary or desirable in the usual
trade or business 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 a year, even if the
performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence
of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to
such activity and while such activity exists.
xxx
xxx
xxx
". . . [T]he fact that [respondents] do not work continuously for one whole
year but only for the duration of the . . . season does not detract from
considering them in regular employment since in a litany of cases this
Court has already settled that seasonal workers who are called to work
from time to time and are temporarily laid off during off-season are not
separated from service in said period, but merely considered on leave
until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to
the case at bar. In the earlier case, the workers were required to perform phases
of agricultural work for a definite period of time, after which their services would
be available to any other farm owner. They were not hired regularly and
repeatedly for the same phase/s of agricultural work, but on and off for any
single phase thereof. On the other hand, herein respondents, having performed
the same tasks for petitioners every season for several years, are considered the
latter's regular employees for their respective tasks. Petitioners' eventual refusal
to use their services even if they were ready, able and willing to perform their
usual duties whenever these were available and hiring of other workers to
perform the tasks originally assigned to respondents amounted to illegal
dismissal of the latter.
The Court finds no reason to disturb the CA's dismissal of what petitioners claim
was their valid exercise of a management prerogative. The sudden changes in
work assignments reeked of bad faith. These changes were implemented
immediately after respondents had organized themselves into a union and
started demanding collective bargaining. Those who were union members were
effectively deprived of their jobs. Petitioners' move actually amounted to
unjustified dismissal of respondents, in violation of the Labor Code.
"Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the
burden is on the employer to prove that the termination was for a valid and
authorized cause." 16 In the case at bar, petitioners failed to prove any such
cause for the dismissal of respondents who, as discussed above, are regular
employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as
follows:
"Indeed, from respondents' refusal to bargain, to their acts of economic
inducements resulting in the promotion of those who withdrew from the
union, the use of armed guards to prevent the organizers to come in, and
the dismissal of union officials and members, one cannot but conclude
that respondents did not want a union in their haciendaa clear
interference in the right of the workers to self-organization." 17
We uphold the CA's affirmation of the above findings. Indeed, factual findings
of labor officials, who are deemed to have acquired expertise in matters within
their respective jurisdictions, are generally accorded not only respect but even
finality. Their findings are binding on the Supreme Court. 18 Verily, their
conclusions are accorded great weight upon appeal, especially when
supported by substantial evidence. 19 Consequently, the Court is not dutybound to delve into the accuracy of their factual findings, in the absence of a
clear showing that these were arbitrary and bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries with it the sanction
of moral and exemplary damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.
SO ORDERED.

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Republic of the Philippines

February 23, 2000

ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO MARCOS,

In this recourse, petitioners allege that public respondent acted without or in

order a motion to dismiss on the ground of lack of jurisdiction and the

Republic of the Philippines

G.R. No. 109114 September 14, 1993

On November 8, 1991, four days before the expiration of the stipulated

petitioner to pay the private respondent separation pay computed at one-half

"ARTICLE 280. Regular and Casual Employment. The provisions of written

up to their actual reinstatement.chanroblesvirtualawlibrarychanrobles virtual law

----c) Equals backwages due P16,480.00

5) Cecilia Emocling 16,480.00

have knowingly and voluntarily agreed upon fixed periods of employment,

backwages, inclusive of allowances, and to his other benefits of their monetary

PHILIPPINE DAILY INQUIRER, INC.,

G.R. No. 164532

PUNO, C.J., Chairperson,

July 24, 2007

The factual antecedents are undisputed:

On February 7, 1995, PDI hired Magtibay, on contractual basis, to assist, for

After the expiration of Magtibays contractual employment, as extended,

beginning of his employment of the performance standards of the company,

contractual employment, as later extended by 15 days, cannot be considered

The Labor Arbiter likewise dismissed allegations of denial of due process

We agree with the findings of respondent NLRC.

Finally, the three questionable grounds also relied upon by

PDI filed a motion for reconsideration but to no avail.

Hence, this recourse by PDI on the following submissions:

We GRANT the petition.

This Court, to be sure, has for a reason, consistently tended to be partial in

The right of a laborer to sell his labor to such persons as he

Article 279 of the Labor Code which gives

employees the security of tenure is one playing field leveling measure:

Art. 279. Security of Tenure. In cases of regular employment,

Art. 281. Probationary employment.

An employee who is allowed to work after a probationary period

In International Catholic Migration Commission v. NLRC,3[3] we have

x x x. A probationary employee, as understood under Article

Within the limited legal six-month probationary period, probationary

which in turn constitute sufficient manifestations of his inadequacy to meet

It is undisputed that PDI apprised Magtibay of the ground of his

which his performance shall be continuously

Even if perhaps he wanted to, Magtibay cannot deny as he has not

assertion that he was duly apprised of the employment

standards expected of him at the time of his probationary employment when he

Lest it be overlooked, Magtibay had previously worked for PDI as

WHEREFORE, the assailed decision dated May 25, 2004 of the CA in CA

mechanical engineers in the conduct of the reading of the exhaust air

Ordering respondent ABERDEEN COURT, INC. to reinstate to his

Ordering respondent to pay to complainant backwages in the sum

Petitioners appealed the decision to the National Labor Relations Commission

(Pampanga Sugar Development Company, Inc. vs. National Labor Relations

accordance with reasonable standards made known by the employer to the

petitioners quote the stipulation in the contract of probationary employment

Probationary employment. -- There is probationary employment where the

Nevertheless, it appears that petitioners violated due process in the dismissal of

on a day-to-day basis. According to petitioner company, respondent workers

and unloading softdrink products of petitioner company to its various delivery

G.R. No. 106090 February 28, 1994

yet reached the retirement age, to their former positions plus

From said decision, the complainants-appellees interposed a motion for

Generally, there are two types of employees in the construction

service may be continuous or broken. It is not applicable to "project" employees,