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Case no.

1
Republic of the Philippines
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. 10Honasan'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.
Grio-Aquino, Davide, Jr., Bellosillo and Quiason, JJ., concur.

CASE NO. 2
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 114337 September 29, 1995


NITTO ENTERPRISES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.

KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision 1 rendered by public respondent National Labor Relations Commission, which reversed the
decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products,
hired Roberto Capili sometime in May 1990 as an apprentice machinist, molder and core maker
as evidenced by an apprenticeship agreement 2 for a period of six (6) months from May 28, 1990 to
November 28, 1990 with a daily wage rate of P66.75 which was 75% of the applicable minimum
wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which
he was working on, accidentally hit and injured the leg of an office secretary who was treated at a
nearby hospital.
Later that same day, after office hours, private respondent entered a workshop within the office
premises which was not his work station. There, he operated one of the power press machines
without authority and in the process injured his left thumb. Petitioner spent the amount of
P1,023.04 to cover the medication of private respondent.
The following day, Roberto Capili was asked to resign in a letter 3 which reads:
Aug
ust
2,
199
0
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang
paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng
kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon
siya ay pumasok sa shop na hindi naman sakop ng kanyang trabaho.
Pinakialaman at kinalikot ang makina at nadisgrasya niya ang kanyang sariling
kamay.
Nakagastos ang kompanya ng mga sumusunod:

Emergency and doctor fee P715.00


Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang
matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4
ng Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng
kanyang kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon,
kasama ng kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.

Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking


pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.)
Roberto
Capili
Roberto
Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for
and in consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC
Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment of other
monetary benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit. The dispositive portion of
the ruling reads:
WHEREFORE, premises considered, the termination is valid and for cause, and
the money claims dismissed for lack of merit.
The respondent however is ordered to pay the complainant the amount of
P500.00 as financial assistance.
SO ORDERED. 5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto
Capilian was valid. First, private respondent who was hired as an apprentice violated the terms of
their agreement when he acted with gross negligence resulting in the injury not only to himself
but also to his fellow worker. Second, private respondent had shown that "he does not have the

proper attitude in employment particularly the handling of machines without authority and proper
training. 6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the
decision of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondent is
hereby directed to reinstate complainant to his work last performed with
backwages computed from the time his wages were withheld up to the time he is
actually reinstated. The Arbiter of origin is hereby directed to further hear
complainant's money claims and to dispose them on the basis of law and
evidence obtaining.
SO ORDERED. 7
The NLRC declared that private respondent was a regular employee of petitioner by
ruling thus:

As correctly pointed out by the complainant, we cannot understand how an


apprenticeship agreement filed with the Department of Labor only on June 7,
1990 could be validly used by the Labor Arbiter as basis to conclude that the
complainant was hired by respondent as a plain "apprentice" on May 28, 1990.
Clearly, therefore, the complainant was respondent's regular employee under
Article 280 of the Labor Code, as early as May 28,1990, who thus enjoyed the
security of tenure guaranteed in Section 3, Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among others) it then behooves upon
respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et
al. (G.R. No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to prove that the
dismissal of complainant was for a valid cause. Absent such proof, we cannot but
rule that the complainant was illegally dismissed. 8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private
respondent's representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of
the Writ, you are hereby commanded to proceed to the premises of [petitioner]
Nitto Enterprises and Jovy Foster located at No. l 74 Araneta Avenue, Portero,
Malabon, Metro Manila or at any other places where their properties are located
and effect the reinstatement of herein [private respondent] to his work last
performed or at the option of the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85 representing his backwages as
called for in the dispositive portion, and turn over such amount to this Office for
proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.

Hence, the instant petition for certiorari.


The issues raised before us are the following:
I
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE
ABUSE OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS
NOT AN APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE
ABUSE OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT
ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN
TERMINATING THE SERVICE OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be
considered an apprentice since no apprenticeship program had yet been filed and approved at
the time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement already
established an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. Apprenticeship agreements, including
the main rates of apprentices, shall conform to the rules issued by the Minister of
Labor and Employment. The period of apprenticeship shall not exceed six
months. Apprenticeship agreements providing for wage rates below the legal
minimum wage, which in no case shall start below 75% per cent of the applicable
minimum wage, may be entered into only in accordance with apprenticeship
program duly approved by the Minister of Labor and Employment. The Ministry
shall develop standard model programs of apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private respondent
was executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of
"care maker/molder." On the same date, an apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment. However, the apprenticeship
Agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it
was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice shall be

entered only in accordance with the apprenticeship program duly approved by the Minister of
Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship
program is, therefore, a condition sine quo non before an apprenticeship agreement can be
validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give
rise to an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To
translate such objectives into existence, prior approval of the DOLE to any apprenticeship
program has to be secured as a condition sine qua non before any such apprenticeship
agreement can be fully enforced. The role of the DOLE in apprenticeship programs and
agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no
force and effect in the absence of a valid apprenticeship program duly approved by the DOLE,
private respondent's assertion that he was hired not as an apprentice but as a delivery boy
("kargador" or "pahinante") deserves credence. He should rightly be considered as a regular
employee of petitioner as defined by Article 280 of the Labor Code:
Art. 280. Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph:Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights of workers and promote
their welfare." 9
Petitioner further argues that, there is a valid cause for the dismissal of private respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements of due
process, substantive and procedural, must be complied with, before valid dismissal
exists. 10 Without which, the dismissal becomes void.

The twin requirements of notice and hearing constitute the essential elements of due process.
This simply means that the employer shall afford the worker ample opportunity to be heard and
to defend himself with the assistance of his representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must accord the
employee to enable him to prepare adequately for his defense including legal representation.

11

As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12


The law requires that the employer must furnish the worker sought to be
dismissed with two (2) written notices before termination of employee can be
legally effected: (1) notice which apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the subsequent notice which
informs the employee of the employer's decision to dismiss him (Sec. 13, BP 130;
Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the Labor Code
as amended). Failure to comply with the requirements taints the dismissal with
illegality. This procedure is mandatory, in the absence of which, any judgment
reached by management is void and in existent (Tingson, Jr. vs. NLRC, 185
SCRA 498 [1990]; National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs.
NLRC. 182 SCRA 365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three
days after he was made to sign a Quitclaim, a clear indication that such resignation was not
voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner as a delivery boy
("kargador" or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the aforementioned
resignation letter and quitclaim without explaining to him the contents thereof. Petitioner made it
clear to him that anyway, he did not have a choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the
latter's alleged resignation and subsequent execution of a Quitclaim and Release. A judicious
examination of both events belies any spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent National Labor
Relations Commission, the appealed decision is hereby AFFIRMED.
SO ORDERED.
Padilla, Davide, Jr., Bellosillo and Hermosisima, Jr., JJ., concur.
Footnotes
1 Rollo, pp. 12-15.
2 Records, p 12.
3 Id., at 13.

4 Id., at 14.
5 Id., at .47-48.
6 Id., p. 47.
7 Rollo, pp. 14-15.
8 Ibid.
9 Sec. 18, Art. II, The 1987 Constitution of the Republic of the Philippines.
10 Century Textile Mills, Inc. v. NLRC, 161 SCRA 528 (1988); Gold CityIntegrated Port Services, Inc. v. NLRC, 189 SCRA 811 (1990); Kwikway
Engineering Works v. NLRC, 195 SCRA 526 (1991).
11 Abiera v. National Labor Relations Commission, 215 SCRA 476
(1992).
12 210 SCRA 277 (1992).
13 Original Record, p. 39.

CASE 3

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 75112 August 17, 1992


FILAMER CHRISTIAN INSTITUTE, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as
Judge of the Regional Trial Court, Branch XIV, Roxas City and POTENCIANO KAPUNAN,
SR., respondents.
Bedona & Bedona Law Office for petitioner.
Rhodora G. Kapunan for private respondents.

GUTIERREZ, JR., J.:


The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the
decision rendered by this Court on October 16, 1990 (Filamer Christian Institute v. Court of
Appeals, 190 SCRA 477) reviewing the appellate court's conclusion that there exists an
employer-employee relationship between the petitioner and its co-defendant Funtecha. The
Court ruled that the petitioner is not liable for the injuries caused by Funtecha on the grounds
that the latter was not an authorized driver for whose acts the petitioner shall be directly and
primarily answerable, and that Funtecha was merely a working scholar who, under Section 14,
Rule X, Book III of the Rules and Regulations Implementing the Labor Code is not considered an
employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present case call for the
application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of the
petitioner. The private respondents maintain that under Article 2180 an injured party shall have
recourse against the servant as well as the petitioner for whom, at the time of the incident, the
servant was performing an act in furtherance of the interest and for the benefit of the petitioner.
Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge of
the school authorities.
After a re-examination of the laws relevant to the facts found by the trial court and the appellate
court, the Court reconsiders its decision. We reinstate the Court of Appeals' decision penned by
the late Justice Desiderio Jurado and concurred in by Justices Jose C. Campos, Jr. and Serafin
E. Camilon. Applying Civil Code provisions, the appellate court affirmed the trial court decision
which ordered the payment of the P20,000.00 liability in the Zenith Insurance Corporation policy,
P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and P3,000.00 attorney's
fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of
petitioner Filamer. He was, in relation to the school, an employee even if he was assigned to
clean the school premises for only two (2) hours in the morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed,
to take over the vehicle while the latter was on his way home one late afternoon. It is significant
to note that the place where Allan lives is also the house of his father, the school president,
Agustin Masa. Moreover, it is also the house where Funtecha was allowed free board while he
was a student of Filamer Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a
sharp dangerous curb, and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79)
According to Allan's testimony, a fast moving truck with glaring lights nearly hit them so that they
had to swerve to the right to avoid a collision. Upon swerving, they heard a sound as if
something had bumped against the vehicle, but they did not stop to check. Actually, the Pinoy
jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed his advise to
swerve to the right. (Ibid., p. 79) At the time of the incident (6:30 P.M.) in Roxas City, the jeep had
only one functioning headlight.
Allan testified that he was the driver and at the same time a security guard of the petitionerschool. He further said that there was no specific time for him to be off-duty and that after driving

the students home at 5:00 in the afternoon, he still had to go back to school and then drive home
using the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan and Funtecha
reside is an act in furtherance of the interest of the petitioner-school. Allan's job demands that he
drive home the school jeep so he can use it to fetch students in the morning of the next school
day.
It is indubitable under the circumstances that the school president had knowledge that the jeep
was routinely driven home for the said purpose. Moreover, it is not improbable that the school
president also had knowledge of Funtecha's possession of a student driver's license and his
desire to undergo driving lessons during the time that he was not in his classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha
definitely was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or
for a "frolic of his own" but ultimately, for the service for which the jeep was intended by the
petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932];
See also Association of Baptists for World Evangelism, Inc. v. Fieldmen's Insurance Co., Inc. 124
SCRA 618 [1983]). Therefore, the Court is constrained to conclude that the act of Funtecha in
taking over the steering wheel was one done for and in behalf of his employer for which act the
petitioner-school cannot deny any responsibility by arguing that it was done beyond the scope of
his janitorial duties. The clause "within the scope of their assigned tasks" for purposes of raising
the presumption of liability of an employer, includes any act done by an employee, in furtherance
of the interests of the employer or for the account of the employer at the time of the infliction of
the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if somehow, the
employee driving the vehicle derived some benefit from the act, the existence of a presumptive
liability of the employer is determined by answering the question of whether or not the servant
was at the time of the accident performing any act in furtherance of his master's business.
(Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner
anchors its defense, was promulgated by the Secretary of Labor and Employment only for the
purpose of administering and enforcing the provisions of the Labor Code on conditions of
employment. Particularly, Rule X of Book III provides guidelines on the manner by which the
powers of the Labor Secretary shall be exercised; on what records should be kept; maintained
and preserved; on payroll; and on the exclusion of working scholars from, and inclusion of
resident physicians in the employment coverage as far as compliance with the substantive labor
provisions on working conditions, rest periods, and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The
Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is
not the decisive law in a civil suit for damages instituted by an injured person during a vehicular
accident against a working student of a school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for
injury caused by the patently negligent acts of a person, against both doer-employee and his
employer. Hence, the reliance on the implementing rule on labor to disregard the primary liability
of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule on labor

cannot be used by an employer as a shield to avoid liability under the substantive provisions of
the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual obligation
arising from the negligence or reckless imprudence of a person "whose acts or omissions are
imputable, by a legal fiction, to other(s) who are in a position to exercise an absolute or limited
control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a
driver's position in order that the petitioner may be held responsible for his grossly negligent act,
it being sufficient that the act of driving at the time of the incident was for the benefit of the
petitioner. Hence, the fact that Funtecha was not the school driver or was not acting within the
scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection of a servant
or employee, or in the supervision over him. The petitioner has failed to show proof of its having
exercised the required diligence of a good father of a family over its employees Funtecha and
Allan.
The Court reiterates that supervision includes the formulation of suitable rules and regulations for
the guidance of its employees and the issuance of proper instructions intended for the protection
of the public and persons with whom the employer has relations through his employees. (Bahia v.
Litonjua and Leynes, supra, at p. 628; Phoenix Construction, v. Intermediate Appellate Court, 148
SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary discipline called for in the
performance of any act indispensable to the business and beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth such rules and guidelines as
would prohibit any one of its employees from taking control over its vehicles if one is not the
official driver or prohibiting the driver and son of the Filamer president from authorizing another
employee to drive the school vehicle. Furthermore, the petitioner has failed to prove that it had
imposed sanctions or warned its employees against the use of its vehicles by persons other than
the driver.
The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled
manner by which Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772
[1918]). In the absence of evidence that the petitioner had exercised the diligence of a good
father of a family in the supervision of its employees, the law imposes upon it the vicarious
liability for acts or omissions of its employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete v.
Fabros, 93 SCRA 200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v.
Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc. v. Baesa,
179 SCRA 384 [1989]) The liability of the employer is, under Article 2180, primary and solidary.
However, the employer shall have recourse against the negligent employee for whatever
damages are paid to the heirs of the plaintiff.
It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party
defendant in the civil case for damages. This is quite understandable considering that as far as
the injured pedestrian, plaintiff Potenciano Kapunan, was concerned, it was Funtecha who was
the one driving the vehicle and presumably was one authorized by the school to drive. The
plaintiff and his heirs should not now be left to suffer without simultaneous recourse against the

petitioner for the consequent injury caused by a janitor doing a driving chore for the petitioner
even for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were able to
establish the existence of employer-employee relationship between Funtecha and petitioner
Filamer and the fact that Funtecha was engaged in an act not for an independent purpose of his
own but in furtherance of the business of his employer. A position of responsibility on the part of
the petitioner has thus been satisfactorily demonstrated.
WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby
GRANTED. The decision of the respondent appellate court affirming the trial court decision is
REINSTATED.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

Case no. 4

THIRD DIVISION

[G.R. No. 122917. July 12, 1999]

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E.


DAVID, DAVID P. PASCUAL, RAQUEL ESTILLER, ALBERT
HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON
GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G.
CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO,
CORAZON C. DELOS REYES, ROBERT G. NOORA, MILAGROS
O.
LEQUIGAN,
ADRIANA
F.
TATLONGHARI,
IKE
CABANDUCOS,
COCOY
NOBELLO,
DORENDA
CANTIMBUHAN,
ROBERT MARCELO,
LILIBETH
Q.
MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG, VIOLETA
G. MONTES, ALBINO TECSON, MELODY V. GRUELA,
BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R.
CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO,
ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA
CANOZA, THELMA SEBASTIAN, MA. JEANETTE CERVANTES,
JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA,
ELIZABETH VENTURA, GRACE S. PARDO & RICO

TIMOSA, petitionersvs.
NATIONAL
COMMISSION
&
FAR
EAST
COMPANY, respondents.

LABOR
RELATIONS
BANK AND
TRUST

DECISION
PANGANIBAN, J.:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be
granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be accorded all
the benefits granted by law, notwithstanding written or verbal contracts to the contrary. This
treatment is rooted not merely on charity or accommodation, but on justice for all.
The Case

Challenged in the Petition for Certiorari[1] before us is the June 20, 1995 Decision [2] of
the National Labor Relations Commission (NLRC), [3] which affirmed the August, 22 1994
ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiters Decision disposed as
follows:[4]

WHEREFORE, judgment is hereby rendered dismissing the above-mentioned


complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution [5] of the NLRC, which denied the Motion for
Reconsideration.

The Facts

The facts were summarized by the NLRC in this wise:[6]

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
Employment Contract for Handicapped Workers. (pp. 68 & 69, Records) The full
text of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation
duly organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented

herein by its Assistant Vice President, MR. FLORENDO G. MARANAN,


(hereinafter referred to as the BANK);
- and ________________, ________________ years old, of legal age, _____________,
and residing at __________________ (hereinafter referred to as the
(EMPLOYEE).
WITNESSETH: That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is
a need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
welfare and make them productive, self-reliant and useful citizens to enable them
to fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s]
been approached by some civic-minded citizens and authorized government
agencies [regarding] the possibility of hiring handicapped workers for these
positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]
recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and in
compliance with Article 80 of the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this Employment Contract as
follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK,
as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a
counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and

v. Submit bundled bills to the bank teller for verification.


3. The EMPLOYEE shall undergo a training period of one (1) month, after which
the BANK shall determine whether or not he/she should be allowed to finish the
remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,
subject to adjustment in the sole judgment of the BANK, payable every 15 and
end of the month.
th

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week,
from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be
required to perform overtime work as circumstance may warrant, for which
overtime work he/she [shall] be paid an additional compensation of 125% of his
daily rate if performed during ordinary days and 130% if performed during
Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13 month pay based on his basic daily wage.
th

ii. Five (5) days incentive leave.


iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the
BANK Rules and Regulations and Policies, and to conduct himself/herself in a
manner expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a
special employment program of the BANK, for which reason the standard hiring
requirements of the BANK were not applied in his/her case. Consequently, the
EMPLOYEE acknowledges and accepts the fact that the terms and conditions of
the employment generally observed by the BANK with respect to the BANKs
regular employee are not applicable to the EMPLOYEE, and that therefore, the
terms and conditions of the EMPLOYEEs employment with the BANK shall be
governed solely and exclusively by this Contract and by the applicable rules and
regulations that the Department of Labor and Employment may issue in connection
with the employment of disabled and handicapped workers. More specifically, the
EMPLOYEE hereby acknowledges that the provisions of Book Six of the Labor
Code of the Philippines as amended, particularly on regulation of employment and
separation pay are not applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from ____
to ____ unless earlier terminated by the BANK for any just or reasonable

cause. Any continuation or extension of this Contract shall be in writing and


therefore this Contract will automatically expire at the end of its terms unless
renewed in writing by the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
____ day of _________________, ____________ at Intramuros, Manila,
Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twentyone (21). Their employment[s] were renewed every six months such that by the
time this case arose, there were fifty-six (56) deaf-mutes who were employed by
respondent under the said employment agreement. The last one was Thelma
Malindoy who was employed in 1992 and whose contract expired on July 1993.
xxxxxxxxx

Disclaiming that complainants were regular employees, respondent Far East Bank
and Trust Company maintained that complainants who are a special class of
workers the hearing impaired employees were hired temporarily under [a] special
employment arrangement which was a result of overtures made by some civic and
political personalities to the respondent Bank; that complainant[s] were hired due
to pakiusap which must be considered in the light of the context of the respondent
Banks corporate philosophy as well as its career and working environment which
is to maintain and strengthen a corps of professionals trained and qualified officers
and regular employees who are baccalaureate degree holders from excellent
schools which is an unbending policy in the hiring of regular employees; that in
addition to this, training continues so that the regular employee grows in the
corporate ladder; that the idea of hiring handicapped workers was acceptable to
them only on a special arrangement basis; that it adopted the special program to
help tide over a group of handicapped workers such as deaf-mutes like the
complainants who could do manual work for the respondent Bank; that the task of
counting and sorting of bills which was being performed by tellers could be
assigned to deaf-mutes; that the counting and sorting of money are tellering works
which were always logically and naturally part and parcel of the tellers normal
functions; that from the beginning there have been no separate items in the
respondent Bank plantilla for sorters or counters; that the tellers themselves already
did the sorting and counting chore as a regular feature and integral part of their
duties (p. 97, Records); that through the pakiusap of Arturo Borjal, the tellers were
relieved of this task of counting and sorting bills in favor of deaf-mutes without
creating new positions as there is no position either in the respondent or in any
other bank in the Philippines which deals with purely counting and sorting of bills
in banking operations.
Petitioners specified when each of them was hired and dismissed, viz:[7]

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed


1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93
2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94
3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93
4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94
5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94
6. ALBERT HALLARE West 4 JAN 91 9 JAN 94
7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93
8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93
9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94
10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93
11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93
12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93
13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93
14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93
15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93
16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93
17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93
18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93
19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93
20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93
21. ROBERT MARCELO West 31 JUL 93[8] 1 AUG 93
22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93
23. JOSE E. SALES West 6 AUG 92 12 OCT 93

24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93


25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94
26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93
27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93
28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93
29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93
30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93
31. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 94
32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93
33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93
34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93
35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94
36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93
37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93
38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93
39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93
40. PINKY BALOLOA West 3 JUN 91 2 DEC 93
41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC]
42. GRACE S. PARDO West 4 APR 90 13 MAR 94
43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein
petitioners. Hence, this recourse to this Court.[9]
The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed
regular employees under Article 280 of the Labor Code, as amended, Respondent
Commission ratiocinated as follows:

We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
recommendation of civic oriented personalities whose employment[s] were
covered by xxx Employment Contract[s] with special provisions on duration of
contract as specified under Art. 80. Hence, as correctly held by the Labor Arbiter a
quo, the terms of the contract shall be the law between the parties. [10]
The NLRC also declared that the Magna Carta for Disabled Persons was not applicable,
considering the prevailing circumstances/milieu of the case.
Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:

I. The Honorable Commission committed grave abuse of discretion in holding that


the petitioners - money sorters and counters working in a bank - were not regular
employees.
II. The Honorable Commission committed grave abuse of discretion in holding that
the employment contracts signed and renewed by the petitioners - which provide
for a period of six (6) months - were valid.
III. The Honorable Commission committed grave abuse of discretion in not
applying the provisions of the Magna Carta for the Disabled (Republic Act No.
7277), on proscription against discrimination against disabled persons. [11]
In the main, the Court will resolve whether petitioners have become regular employees.
This Courts Ruling

The petition is meritorious. However, only the employees, who worked for more than six
months and whose contracts were renewed are deemed regular. Hence, their dismissal from
employment was illegal.
Preliminary Matter: Propriety of Certiorari

Respondent Far East Bank and Trust Company argues that a review of the findings of
facts of the NLRC is not allowed in a petition for certiorari. Specifically, it maintains that the

Court cannot pass upon the findings of public respondents that petitioners were not regular
employees.
True, the Court, as a rule, does not review the factual findings of public respondents in
a certiorari proceeding. In resolving whether the petitioners have become regular employees,
we shall not change the facts found by the public respondent. Our task is merely to determine
whether the NLRC committed grave abuse of discretion in applying the law to the established
facts, as above-quoted from the assailed Decision.
Main Issue: Are Petitioners Regular Employees?

Petitioners maintain that they should be considered regular employees, because their task
as money sorters and counters was necessary and desirable to the business of respondent
bank. They further allege that their contracts served merely to preclude the application of
Article 280 and to bar them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as special
workers and should not in any way be considered as part of the regular complement of the
Bank.[12] Rather, they were special workers under Article 80 of the Labor Code. Private
respondent contends that it never solicited the services of petitioners, whose employment was
merely an accommodation in response to the requests of government officials and civicminded citizens. They were told from the start, with the assistance of government
representatives, that they could not become regular employees because there were no plantilla
positions for money sorters, whose task used to be performed by tellers. Their contracts were
renewed several times, not because of need but merely for humanitarian reasons. Respondent
submits that as of the present, the special position that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew anymore
their special employment contracts.
At the outset, let it be known that this Court appreciates the nobility of private
respondents effort to provide employment to physically impaired individuals and to make
them more productive members of society. However, we cannot allow it to elude the legal
consequences of that effort, simply because it now deems their employment irrelevant. The
facts, viewed in light of the Labor Code and the Magna Carta for Disabled Persons,
indubitably show that the petitioners, except sixteen of them, should be deemed regular
employees. As such, they have acquired legal rights that this Court is duty-bound to protect
and uphold, not as a matter of compassion but as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they shall be trained
for a period of one month, after which the employer shall determine whether or not they
should be allowed to finish the 6-month term of the contract. Furthermore, the employer may
terminate the contract at any time for a just and reasonable cause. Unless renewed in writing
by the employer, the contract shall automatically expire at the end of the term.
According to private respondent, the employment contracts were prepared in accordance
with Article 80 of the Labor Code, which provides:

ART. 80. Employment agreement. Any employer who employs handicapped


workers shall enter into an employment agreement with them, which agreement
shall include:

(a) The names and addresses of the handicapped workers to be employed;


(b) The rate to be paid the handicapped workers which shall be not less than
seventy five (75%) per cent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of
Labor or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the aforecited
provision. Succeeding events and the enactment of RA No. 7277 (the Magna Carta for
Disabled Persons),[13]however, justify the application of Article 280 of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from 1988 to
1993. Verily, the renewal of the contracts of the handicapped workers and the hiring of others
lead to the conclusion that their tasks were beneficial and necessary to the bank. More
important, these facts show that they were qualifiedto perform the responsibilities of their
positions. In other words, their disability did not render them unqualified or unfit for the tasks
assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as a qualified ablebodied person. Section 5 of the Magna Carta provides:

Section 5. Equal Opportunity for Employment.No disabled person shall be denied


access to opportunities for suitable employment. A qualified disabled employee
shall be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor
Code, which provides:

ART. 280. Regular and Casual Employment. -- The provisions of written


agreement to the contrary notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, 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 as
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC,[14] 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 business or trade of the
employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least one year,
even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity, and while
such activity exists.
Without a doubt, the task of counting and sorting bills is necessary and desirable to the
business of respondent bank. With the exception of sixteen of them, petitioners performed
these tasks for more than six months. Thus, the following twenty-seven petitioners should be
deemed regular employees: Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David
P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P.
Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes,
Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma.
Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.
As held by the Court, Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the simple
expedient of extending to them probationary appointments, ad infinitum.[15] The contract
signed by petitioners is akin to a probationary employment, during which the bank
determined the employees fitness for the job. When the bank renewed the contract after the
lapse of the six-month probationary period, the employees thereby became regular
employees.[16] No employer is allowed to determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of tenure; that
is, their services may be terminated only for a just or authorized cause. Because respondent
failed to show such cause,[17] these twenty-seven petitioners are deemed illegally dismissed
and therefore entitled to back wages and reinstatement without loss of seniority rights and
other privileges.[18] Considering the allegation of respondent that the job of money sorting is
no longer available because it has been assigned back to the tellers to whom it originally
belonged,[19] petitioners are hereby awarded separation pay in lieu of reinstatement.[20]

Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the Brent Ruling

Respondent bank, citing Brent School v. Zamora[21] in which the Court upheld the validity
of an employment contract with a fixed term, argues that the parties entered into the contract
on equal footing.It adds that the petitioners had in fact an advantage, because they were
backed by then DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that the
petitioners were disabled, and that the bank had to determine their fitness for the
position. Indeed, its validity is based on Article 80 of the Labor Code. But as noted earlier,
petitioners proved themselves to be qualified disabled persons who, under the Magna Carta
for Disabled Persons, are entitled to terms and conditions of employment enjoyed
by qualified able-bodied individuals; hence, Article 80 does not apply because petitioners
are qualified for their positions. The validation of the limit imposed on their contracts,
imposed by reason of their disability, was a glaring instance of the very mischief sought to be
addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with public
interest.[22] 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.[23] Clearly, the agreement of
the parties regarding the period of employment cannot prevail over the provisions of the
Magna Carta for Disabled Persons, which mandate that petitioners must be treated as
qualified able-bodied employees.
Respondents reason for terminating the employment of petitioners is instructive. Because
the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the
BSP during business hours from 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime
sorting and counting of money. Thus, it reasons that this task could not be done by deaf mutes
because of their physical limitations as it is very risky for them to travel at night. [24] We find
no basis for this argument. Travelling at night involves risks to handicapped and able-bodied
persons alike. This excuse cannot justify the termination of their employment.
Other Grounds Cited by Respondent

Respondent argues that petitioners were merely accommodated employees. This fact
does not change the nature of their employment. As earlier noted, an employee is regular
because of the nature of work and the length of service, not because of the mode or even the
reason for hiring them.
Equally unavailing are private respondents arguments that it did not go out of its way to
recruit petitioners, and that its plantilla did not contain their positions. In L. T. Datu v. NLRC,
[25]
the Court held that the determination of whether employment is casual or regular does not
depend on the will or word of the employer, and the procedure of hiring x x x but on the
nature of the activities performed by the employee, and to some extent, the length of
performance and its continued existence.

Private respondent argues that the petitioners were informed from the start that they
could not become regular employees. In fact, the bank adds, they agreed with the stipulation
in the contract regarding this point. Still, we are not persuaded. The well-settled rule is that
the character of employment is determined not by stipulations in the contract, but by the
nature of the work performed.[26] Otherwise, no employee can become regular by the simple
expedient of incorporating this condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC:[27]

Article 280 was emplaced in our statute books to prevent the circumvention of the
employees right to be secure in his tenure by indiscriminately and completely
ruling out all written and oral agreements inconsistent with the concept of regular
employment defined therein. Where an employee has been engaged to perform
activities which are usually necessary or desirable in the usual business of the
employer, such employee is deemed a regular employee and is entitled to security
of tenure notwithstanding the contrary provisions of his contract of employment.
xxxxxxxxx

At this juncture, the leading case of Brent School, Inc. v. Zamora proves
instructive. As reaffirmed in subsequent cases, this Court has upheld the legality of
fixed-term employment. It ruled that the decisive determinant in term employment
should not be the activities that the employee is called upon to perform but the day
certain agreed upon the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.
In rendering this Decision, the Court emphasizes not only the constitutional bias in favor
of the working class, but also the concern of the State for the plight of the disabled. The noble
objectives of Magna Carta for Disabled Persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons, disabled or
not. In the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their
work. The eloquent proof of this statement is the repeated renewal of their employment
contracts. Why then should they be dismissed, simply because they are physically
impaired? The Court believes, that, after showing their fitness for the work assigned to them,
they should be treated and granted the same rights like any other regular employees.
In this light, we note the Office of the Solicitor Generals prayer joining the petitioners
cause.[28]
WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20,
1995 Decision and the August 4, 1995 Resolution of the NLRC
are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is
hereby ORDERED to pay back wages and separation pay to each of the following twentyseven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David,
David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon,
George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G.

Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R.
Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S.
Pardo. The NLRC is hereby directed to compute the exact amount due each of said
employees, pursuant to existing laws and regulations, within fifteen days from the finality of
this Decision. No costs.
SO ORDERED.
Romero, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.