Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 186439

January 15, 2014

UNIVERSAL ROBINA SUGAR MILLING CORPORATION and RENE

CABATI, Petitioners,
vs.
FERDINAND ACIBO, ROBERTO AGUILAR, EDDIE BALDOZA, RENE
ABELLAR, DIOMEDES ALICOS, MIGUEL ALICOS, ROGELIO AMAHIT,
LARRY AMASCO, FELIPE BALANSAG, ROMEO BALANSAG, MANUEL
BANGOT, ANDY BANJAO, DIONISIO BENDIJO, JR., JOVENTINO BROCE,
ENRICO LITERAL, RODGER RAMIREZ, BIENVENIDO RODRIGUEZ,
DIOCITO PALAGTIW, ERNIE SABLAN, RICHARD PANCHO, RODRIGO
ESTRABELA, DANNY KADUSALE and ALLYROBYL OLPUS, Respondents.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari1 the challenge to the
November 29, 2007 decision2 and the January 22, 2009 resolution3 of the
Court of Appeals (CA) in CA-G.R. CEB-SP No. 02028. This CA decision affirmed
with modification the July 22, 2005 decision4 and the April 28, 2006
resolution5 of the National Labor Relations Commission (NLRC) in NLRC Case
No. V-00006-03 which, in turn, reversed the October 9, 2002 decision 6 of the
Labor Arbiter (LA). The LAs decision dismissed the complaint filed by
complainants Ferdinand Acibo, et al.7 against petitioners Universal Robina
Sugar Milling Corporation (URSUMCO) and Rene Cabati.
The Factual Antecedents
URSUMCO is a domestic corporation engaged in the sugar cane milling
business; Cabati is URSUMCOs Business Unit General Manager.
The complainants were employees of URSUMCO. They were hired on various
dates (between February 1988 and April 1996) and on different
capacities,8 i.e., drivers, crane operators, bucket hookers, welders,

mechanics, laboratory attendants and aides, steel workers, laborers,

carpenters and masons, among others. At the start of their respective
engagements, the complainants signed contracts of employment for a period
of one (1) month or for a given season. URSUMCO repeatedly hired the
complainants to perform the same duties and, for every engagement,
required the latter to sign new employment contracts for the same duration
of one month or a given season.
On August 23, 2002,9 the complainants filed before the LA complaints for
regularization, entitlement to the benefits under the existing Collective
Bargaining Agreement (CBA),and attorneys fees.
In the decision10 dated October 9, 2002, the LA dismissed the complaint for
lack of merit. The LA held that the complainants were seasonal or project
workers and not regular employees of URSUMCO. The LA pointed out that the
complainants were required to perform, for a definite period, phases of
URSUMCOs several projects that were not at all directly related to the
latters main operations. As the complainants were project employees, they
could not be regularized since their respective employments were
coterminous with the phase of the work or special project to which they were
assigned and which employments end upon the completion of each project.
Accordingly, the complainants were not entitled to the benefits granted
under the CBA that, as provided, covered only the regular employees of
URSUMCO.
Of the twenty-two original complainants before the LA, seven appealed the
LAs ruling before the NLRC, namely: respondents Ferdinand Acibo, Eddie
Baldoza, Andy Banjao, Dionisio Bendijo, Jr., Rodger Ramirez, Diocito Palagtiw,
Danny Kadusale and Allyrobyl Olpus.
The Ruling of the NLRC
In its decision11 of July 22, 2005, the NLRC reversed the LAs ruling; it
declared the complainants as regular URSUMCO employees and granted
their monetary claims under the CBA. The NLRC pointed out that the
complainants performed activities which were usually necessary and
desirable in the usual trade or business of URSUMCO, and had been
repeatedly hired for the same undertaking every season. Thus, pursuant to
Article 280 of the Labor Code, the NLRC declared that the complainants were
regular employees. As regular employees, the NLRC held that the

complainants were entitled to the benefits granted, under the CBA, to the
regular URSUMCO employees.
The petitioners moved to reconsider this NLRC ruling which the NLRC denied
in its April 28, 2006 resolution.12 The petitioners elevated the case to the CA
via a petition for certiorari.13
The Ruling of the CA
In its November 29, 2007 decision,14 the CA granted in part the petition; it
affirmed the NLRCs ruling finding the complainants to be regular employees
of URSUMCO, but deleted the grant of monetary benefits under the CBA.
The CA pointed out that the primary standard for determining regular
employment is the reasonable connection between a particular activity
performed by the employee vis--vis the usual trade or business of the
employer. This connection, in turn, can be determined by considering the
nature of the work performed and the relation of this work to the business or
trade of the employer in its entirety.
In this regard, the CA held that the various activities that the complainants
were tasked to do were necessary, if not indispensable, to the nature of
URSUMCOs business. As the complainants had been performing their
respective tasks for at least one year, the CA held that this repeated and
continuing need for the complainants performance of these same tasks,
regardless of whether the performance was continuous or intermittent,
constitutes sufficient evidence of the necessity, if not indispensability, of the
activity to URSUMCOs business.
Further, the CA noted that the petitioners failed to prove that they gave the
complainants opportunity to work elsewhere during the off-season, which
opportunity could have qualified the latter as seasonal workers. Still, the CA
pointed out that even during this off-season period, seasonal workers are not
separated from the service but are simply considered on leave until they are
re-employed. Thus, the CA concluded that the complainants were regular
employees with respect to the activity that they had been performing and
while the activity continued.
On the claim for CBA benefits, the CA, however, ruled that the complainants
were not entitled to receive them. The CA pointed out that while the
complainants were considered regular, albeit seasonal, workers, the CBA-

covered regular employees of URSUMCO were performing tasks needed by

the latter for the entire year with no regard to the changing sugar milling
season. Hence, the complainants did not belong to and could not be grouped
together with the regular employees of URSUMCO, for collective bargaining
purposes; they constitute a bargaining unit separate and distinct from the
regular employees. Consequently, the CA declared that the complainants
could not be covered by the CBA.
The petitioners filed the present petition after the CA denied their motion for
partial reconsideration15 in the CAs January 22, 2009 resolution.16
The Issues
The petition essentially presents the following issues for the Courts
resolution: (1) whether the respondents are regular employees of URSUMCO;
and (2) whether affirmative relief can be given to the fifteen (15) of the
complainants who did not appeal the LAs decision.17
The Courts Ruling
We resolve to partially GRANT the petition.
On the issue of the status of the respondents employment
The petitioners maintain that the respondents are contractual or
project/seasonal workers and not regular employees of URSUMCO. They thus
argue that the CA erred in applying the legal parameters and guidelines for
regular employment to the respondents case. They contend that the legal
standards length of the employees engagement and the desirability or
necessity of the employees work in the usual trade or business of the
employer apply only to regular employees under paragraph 1, Article 280
of the Labor Code, and, under paragraph 2 of the same article, to casual
employees who are deemed regular by their length of service.
The respondents, the petitioners point out, were specifically engaged for a
fixed and predetermined duration of, on the average, one (1) month at a
time that coincides with a particular phase of the companys business
operations or sugar milling season. By the nature of their engagement, the
respondents employment legally ends upon the end of the predetermined
period; thus, URSUMCO was under no legal obligation to rehire the
respondents.

In their comment,18 the respondents maintain that they are regular

employees of URSUMCO. Relying on the NLRC and the CA rulings, they point
out that they have been continuously working for URSUMCO for more than
one year, performing tasks which were necessary and desirable to
URSUMCOs business. Hence, under the above-stated legal parameters, they
are regular employees.
We disagree with the petitioners position.1wphi1 We find the respondents
to be regular seasonal employees of URSUMCO.
As the CA has explained in its challenged decision, Article 280 of the Labor
Code provides for three kinds of employment arrangements, namely: regular,
project/seasonal and casual. Regular employment refers to that arrangement
whereby the employee "has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer[.]"19 Under the definition, the primary standard that determines
regular employment is the reasonable connection between the particular
activity performed by the employee and the usual business or trade of the
employer;20 the emphasis is on the necessity or desirability of the
employees activity. Thus, when the employee performs activities considered
necessary and desirable to the overall business scheme of the employer, the
law regards the employee as regular.
By way of an exception, paragraph 2, Article 280 of the Labor Code also
considers regular a casual employment arrangement when the casual
employees engagement has lasted for at least one year, regardless of the
engagements continuity. The controlling test in this arrangement is the
length of time during which the employee is engaged.
A project employment, on the other hand, contemplates on arrangement
whereby "the employment has been fixed for a specific project or
undertaking whose completion or termination has been determined at the
time of the engagement of the employee[.]"21 Two requirements, therefore,
clearly need to be satisfied to remove the engagement from the presumption
of regularity of employment, namely: (1) designation of a specific project or
undertaking for which the employee is hired; and (2) clear determination of
the completion or termination of the project at the time of the employees
engagement.22 The services of the project employees are legally and
automatically terminated upon the end or completion of the project as the
employees services are coterminous with the project.

Unlike in a regular employment under Article 280 of the Labor Code,

however, the length of time of the asserted "project" employees
engagement is not controlling as the employment may, in fact, last for more
than a year, depending on the needs or circumstances of the project.
Nevertheless, this length of time (or the continuous rehiring of the employee
even after the cessation of the project) may serve as a badge of regular
employment when the activities performed by the purported "project"
employee are necessary and indispensable to the usual business or trade of
the employer.23 In this latter case, the law will regard the arrangement as
regular employment.24
Seasonal employment operates much in the same way as project
employment, albeit it involves work or service that is seasonal in nature or
lasting for the duration of the season.25 As with project employment,
although the seasonal employment arrangement involves work that is
seasonal or periodic in nature, the employment itself is not automatically
considered seasonal so as to prevent the employee from attaining regular
status. To exclude the asserted "seasonal" employee from those classified as
regular employees, the employer must show that: (1) the employee must be
performing work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season.26 Hence, when the "seasonal"
workers are continuously and repeatedly hired to perform the same tasks or
activities for several seasons or even after the cessation of the season, this
length of time may likewise serve as badge of regular employment.27 In fact,
even though denominated as "seasonal workers," if these workers are called
to work from time to time and are only temporarily laid off during the offseason, the law does not consider them separated from the service during
the off-season period. The law simply considers these seasonal workers on
leave until re-employed.28
Casual employment, the third kind of employment arrangement, refers to
any other employment arrangement that does not fall under any of the first
two categories, i.e., regular or project/seasonal.
Interestingly, the Labor Code does not mention another employment
arrangement contractual or fixed term employment (or employment for a
term) which, if not for the fixed term, should fall under the category of
regular employment in view of the nature of the employees engagement,
which is to perform an activity usually necessary or desirable in the
employers business.

In Brent School, Inc. v. Zamora,29 the Court, for the first time, recognized and
resolved the anomaly created by a narrow and literal interpretation of Article
280 of the Labor Code that appears to restrict the employees right to freely
stipulate with his employer on the duration of his engagement. In this case,
the Court upheld the validity of the fixed-term employment agreed upon by
the employer, Brent School, Inc., and the employee, Dorotio Alegre, declaring
that the restrictive clause in Article 280 "should be construed to refer to the
substantive evil that the Code itself x x x singled out: agreements entered
into precisely to circumvent security of tenure. It should have no application
to instances where [the] fixed period of employment was agreed upon
knowingly and voluntarily by the parties x x x absent any x x x
circumstances vitiating [the employees] consent, or where [the facts
satisfactorily show] that the employer and [the] employee dealt with each
other on more or less equal terms[.]"30 The indispensability or desirability of
the activity performed by the employee will not preclude the parties from
entering into an otherwise valid fixed term employment agreement; a
definite period of employment does not essentially contradict the nature of
the employees duties31 as necessary and desirable to the usual business or
trade of the employer.
Nevertheless, "where the circumstances evidently show that the employer
imposed the period precisely to preclude the employee from acquiring
tenurial security, the law and this Court will not hesitate to strike down or
disregard the period as contrary to public policy, morals, etc." 32 In such a
case, the general restrictive rule under Article 280 of the Labor Code will
apply and the employee shall be deemed regular.
Clearly, therefore, the nature of the employment does not depend solely on
the will or word of the employer or on the procedure for hiring and the
manner of designating the employee. Rather, the nature of the employment
depends on the nature of the activities to be performed by the employee,
considering the nature of the employers business, the duration and scope to
be done,33 and, in some cases, even the length of time of the performance
and its continued existence.
In light of the above legal parameters laid down by the law and applicable
jurisprudence, the respondents are neither project, seasonal nor fixed-term
employees, but regular seasonal workers of URSUMCO. The following factual
considerations from the records support this conclusion:

First, the respondents were made to perform various tasks that did not at all
pertain to any specific phase of URSUMCOs strict milling operations that
would ultimately cease upon completion of a particular phase in the milling
of sugar; rather, they were tasked to perform duties regularly and habitually
needed in URSUMCOs operations during the milling season. The
respondents duties as loader operators, hookers, crane operators and
drivers were necessary to haul and transport the sugarcane from the
plantation to the mill; laboratory attendants, workers and laborers to mill the
sugar; and welders, carpenters and utility workers to ensure the smooth and
continuous operation of the mill for the duration of the milling season, as
distinguished from the production of the sugarcane which involves the
planting and raising of the sugarcane until it ripens for milling. The
production of sugarcane, it must be emphasized, requires a different set of
workers who are experienced in farm or agricultural work. Needless to say,
they perform the activities that are necessary and desirable in sugarcane
production. As in the milling of sugarcane, the plantation workers perform
their duties only during the planting season.
Second, the respondents were regularly and repeatedly hired to perform the
same tasks year after year. This regular and repeated hiring of the same
workers (two different sets) for two separate seasons has put in place,
principally through jurisprudence, the system of regular seasonal
employment in the sugar industry and other industries with a similar nature
of operations.
Under the system, the plantation workers or the mill employees do not work
continuously for one whole year but only for the duration of the growing of
the sugarcane or the milling season. Their seasonal work, however, 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 the off-season are
not separated from the service in said period, but are merely considered on
leave until re-employment.34 Be this as it may, regular seasonal employees,
like the respondents in this case, should not be confused with the regular
employees of the sugar mill such as the administrative or office personnel
who perform their tasks for the entire year regardless of the season. The
NLRC, therefore, gravely erred when it declared the respondents regular
employees of URSUMCO without qualification and that they were entitled to
the benefits granted, under the CBA, to URSUMCOS regular employees.

Third, while the petitioners assert that the respondents were free to work
elsewhere during the off-season, the records do not support this assertion.
There is no evidence on record showing that after the completion of their
tasks at URSUMCO, the respondents sought and obtained employment
elsewhere.
Contrary to the petitioners position, Mercado, Sr. v. NLRC, 3rd Div.35 is not
applicable to the respondents as this case was resolved based on different
factual considerations. In Mercado, the workers were hired to perform phases
of the agricultural work in their employers farm for a definite period of time;
afterwards, they were free to offer their services to any other farm owner.
The workers were not hired regularly and repeatedly for the same phase(s) of
agricultural work, but only intermittently for any single phase. And, more
importantly, the employer in Mercado sufficiently proved these factual
circumstances. The Court reiterated these same observations in Hda. Fatima
v. Natl Fed. of Sugarcane Workers-Food and Gen. Trade36 and Hacienda
Bino/Hortencia Starke, Inc. v. Cuenca.37
At this point, we reiterate the settled rule that in this jurisdiction, only
questions of law are allowed in a petition for review on certiorari.38 This
Courts power of review in a Rule 45 petition is limited to resolving matters
pertaining to any perceived legal errors, which the CA may have committed
in issuing the assailed decision.39 In reviewing the legal correctness of the
CAs Rule 65 decision in a labor case, we examine the CA decision in the
context that it determined, i.e., the presence or absence of grave abuse of
discretion in the NLRC decision before it and not on the basis of whether the
NLRC decision on the merits of the case was correct.40 In other words, we
have to be keenly aware that the CA undertook a Rule 65 review, not a
review on appeal, of the NLRC decision challenged before it.41
Viewed in this light, we find the need to place the CAs affirmation, albeit
with modification, of the NLRC decision of July 22, 2005 in perspective. To
recall, the NLRC declared the respondents as regular employees of
URSUMCO.42With such a declaration, the NLRC in effect granted the
respondents prayer for regularization and, concomitantly, their prayer for
the grant of monetary benefits under the CBA for URSUMCOs regular
employees. In its challenged ruling, the CA concurred with the NLRC finding,
but with the respondents characterized as regular seasonal employees of
URSUMCO.

The CA misappreciated the real import of the NLRC ruling. The labor agency
did not declare the respondents as regular seasonal employees, but as
regular employees. This is the only conclusion that can be drawn from the
NLRC decisions dispositive portion, thus:
WHEREFORE, premises considered, the appeal is hereby GRANTED.
Complainants are declared regular employees of respondent.1wphi1 As
such, they are entitled to the monetary benefits granted to regular
employees of respondent company based on the CBA, reckoned three (3)
years back from the filing of the above-entitled case on 23 August 2002 up
to the present or to their entire service with respondent after the date of
filing of the said complaint if they are no longer connected with respondent
company.43
It is, therefore, clear that the issue brought to the CA for resolution is
whether the NLRC gravely abused its discretion in declaring the respondents
regular employees of URSUMCO and, as such, entitled to the benefits under
the CBA for the regular employees.
Based on the established facts, we find that the CA grossly misread the NLRC
ruling and missed the implications of the respondents regularization. To
reiterate, the respondents are regular seasonal employees, as the CA itself
opined when it declared that "private respondents who are regular workers
with respect to their seasonal tasks or activities and while such activities
exist, cannot automatically be governed by the CBA between petitioner
URSUMCO and the authorized bargaining representative of the regular and
permanent employees."44 Citing jurisprudential standards,45 it then
proceeded to explain that the respondents cannot be lumped with the
regular employees due to the differences in the nature of their duties and the
duration of their work vis-a-vis the operations of the company.
The NLRC was well aware of these distinctions as it acknowledged that the
respondents worked only during the milling season, yet it ignored the
distinctions and declared them regular employees, a marked departure from
existing jurisprudence. This, to us, is grave abuse of discretion, as it gave no
reason for disturbing the system of regular seasonal employment already in
place in the sugar industry and other industries with similar seasonal
operations. For upholding the NLRCs flawed decision on the respondents
employment status, the CA committed a reversible error of judgment.

In sum, we find the complaint to be devoid of merit. The issue of granting

affirmative relief to the complainants who did not appeal the CA ruling has
become academic.
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED.
Except for the denial of the respondents' claim for CBA benefits, the
November 29, 2007 decision and the January 22, 2009 resolution of the
Court of Appeals are SET ASIDE. The complaint is DISMISSED for lack of
merit.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 205453

February 5, 2014

UNITED TOURIST PROMOTIONS (UTP) and ARIEL D.

JERSEY, Petitioners,
vs.
HARLAND B. KEMPLIN, Respondents.
DECISION
REYES, J.:
United Tourist Promotions (UTP), a sole proprietorship business entity
engaged in the printing and distribution of promotional brochures and maps
for tourists, and its registered owner, Ariel D. Jersey (Jersey), are now before
us with a Petition for Review on Certiorari1 filed under Rule 45 of the Rules of
Court to assail the Decision2 rendered by the Court of Appeals (CA) on June
29, 2012 and the Resolution3 thereafter issued on January 16, 2013 in CAG.R. SP No. 118971. The assailed decision and resolution affirmed in toto the
rulings of the Sixth Division of the National Labor Relations Commission
(NLRC) and Labor Arbiter Leandro M. Jose (LA Jose) finding that Harland B.
Kemplin (Kemplin) was illegally dismissed as President of UTP.
Antecedents
In 1995, Jersey, with the help of two American expatriates, Kemplin and the
late Mike Dunne, formed UTP.
In 2002, UTP employed Kemplin to be its President for a period of five years,
to commence on March 1, 2002 and to end on March 1, 2007, "renewable for
the same period, subject to new terms and conditions".4
Kemplin continued to render his services to UTP even after his fixed term
contract of employment expired. Records show that on May 12, 2009,
Kemplin, signing as President of UTP, entered into advertisement agreements
with Pizza Hut and M. Lhuillier.5
On July 30, 2009, UTPs legal counsel sent Kemplin a letter,6 which, in part,
reads:
We would like to inform you that your Employment Contract had been
expired since March 1, 2007 and never been renewed. So[,] it is clear [that]
you are no longer [an] employee as President of [UTP] considering the
expiration of your employment contract. However, because of your past

services to our clients company despite [the fact that] your service is no
longer needed by his company[,] as token[,] he tolerated you to come in the
office [and] as such[,] you were given monthly commissions with allowances.
But because of your inhuman treatment x x x [of] the rank and file
employees[,] which caused great damage and prejudices to the company as
evidenced [by] those cases filed against you[,] specifically[:] (1) x x x for
Grave Oral [T]hreat pending for Preliminary Investigation, Pasay City
Prosecutors Office x x x[;] (2) x x x for Summary Deportation[,] BID, Pasay
City Prosecutors Office; and (3) x x x for Grave Coercion and Grave Threats,
we had no other recourse but to give you this notice to cease and desist from
entering the premises of the main office[,] as well as the branch offices of
[UTP] from receipt hereof for the protection and safety of the company[,] as
well as to the employees and to avoid further great damages that you may
cause to the company x x x.7
On August 10, 2009, Kemplin filed before Regional Arbitration Branch No.
111 of the NLRC a Complaint8 against UTP and its officers, namely, Jersey,
Lorena Lindo9 and Larry Jersey,10 for: (a) illegal dismissal; (b) non-payment of
salaries, 13th month and separation pay, and retirement benefits; (c)
payment of actual, moral and exemplary damages and monthly commission
of P200,0000.00; and (d) recovery of the company car, which was forcibly
taken from him, personal laptop, office paraphernalia and personal books.
In Kemplins Position Paper,11 which he filed before LA Jose, he claimed that
even after the expiration of his employment contract on March 1, 2007, he
rendered his services as President and General Manager of UTP. In December
of 2008, he began examining the companys finances, with the end in mind
of collecting from delinquent accounts of UTPs distributors. After having
noted some accounting discrepancies, he sent e-mail messages to the other
officers but he did not receive direct replies to his queries. Subsequently, on
July 30, 2009, he received a notice from UTPs counsel ordering him to cease
and desist from entering the premises of UTP offices.
UTP, on its part, argued that the termination letter sent to Kemplin on July
30, 2009 was based on (a) the expiration of the fixed term employment
contract they had entered into, and (b) an employers prerogative to
terminate an employee, who commits criminal and illegal acts prejudicial to
business. UTP alleged that Kemplin bad-mouthed, treated his co-workers as
third class citizens, and called them "brown monkeys". Kemplins presence in

the premises of UTP was merely tolerated and he was given allowances due
to humanitarian considerations.12
The LAs Decision
On June 25, 2010, LA Jose rendered a Decision,13 the dispositive portion of
which reads:
WHEREFORE, premises considered, the following findings are made:
1. [Kemplin] is found to be a regular employee;
2. [Kemplin] is adjudged to have been illegally dismissed even as [UTP
and Jersey] are held liable therefor;
3. Consequently, [UTP and Jersey] are ordered to reinstate [Kemplin] to
his former position without loss of seniority rights and other privileges,
with backwages initially computed at this time at [P]219,200.00;
4. The reinstatement aspect of this decision is immediately executory
even as [UTP and Jersey] are enjoined to submit a report of compliance
therewith within ten (10) days from receipt hereof;
5. [UTP and Jersey] are further ordered to pay [Kemplin] his salary for
July 2009 of [P]20,000.00 and 13th month pay for the year 2009 in the
sum of [P]20,000.00;
6. [UTP and Jersey] are assessed 10% attorneys fee of [P]25,920.00 in
favor of [Kemplin].
All other claims are dismissed for lack of merit.
SO ORDERED.14
LA Joses ratiocinations are:
[Kemplin] was able to show that he was still officially connected with [UTP] as
he signed in his capacity as President of [UTP] an (sic) advertisement
agreement[s] with Pizza Hut and M. Lhuillier Phils. as late as May 12, 2009.
This only goes to show that [UTP and Jerseys] theory of toleration has no
basis in fact.

It would appear now, per record, that [Kemplin] was allowed to continue
performing and suffered to work much beyond the expiration of his contract.
Such being the case, [Kemplins] fixed term employment contract was
converted to a regular one under Art. 280 of the Labor Code, as amended
(Viernes vs. NLRC, et al., G.R. No. 108405, April 4, 2003).
[Kemplins] tenure having now been converted to regular employment, he
now enjoys security of tenure under Art. 279 of the Labor Code, as amended.
Simply put, [Kemplin] may only be dismissed for cause and after affording
him the procedural requirement of notice and hearing. Otherwise, his
dismissal will be illegal.
Be that as it may, [UTP and Jersey] proceeded to argue that [Kemplin] was
not illegally terminated, for his termination was according to Art. 282 of the
Labor Code, as amended, i.e., loss of trust and confidence allegedly for
various and serious offenses x x x.
However, upon closer scrutiny, in trying to justify [Kemplins] dismissal on
the ground of loss of trust and confidence, [UTP and Jersey] failed to observe
the procedural requirements of notice and hearing, or more particularly, the
two-notice rule. It would appear that [UTP and Jerseys] x x x cease and
desist letter compressed the two notices in one. Besides, the various and
serious offenses alluded thereto were not legally established before
[Kemplins] separation. Ostensibly, [Kemplin] was not confronted with these
offenses and given the opportunity to explain himself.
x x x [R]espondents miserably failed to discharge their onus probandi.
Hence, illegal dismissal lies.
xxxx
The claim for non-payment of salary for July 2009 appears to be meritorious
for failure of [UTP and Jersey] to prove payment thereof when they have the
burden of proof to do so.
The same ruling applies to the claim for 13th month pay.
However, the claims for commissions, company car, laptop, office
paraphernalia and personal books may not be given due course for failure of
[Kemplin] to provide the specifics of his claims and/or sufficient basis thereof
when the burden of proof is reposed in him.15

The Decision of the NLRC

On January 21, 2011, the NLRC affirmed LA Joses Decision.16 However,
Lorena Lindo and Larry Jersey were expressly excluded from assuming
liability for lack of proof of their involvement in Kemplins dismissal. The
NLRC declared:
[A]fter the expiration of [Kemplins] fixed term employment, his employment
from March 2, 2007 until his separation therefrom on July 30, 2009 is
classified as regular pursuant to the provisions of Article 280 of the Labor
Code, to wit:
ART. 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or service to
be performed is seasonal in nature and the employment is for the duration of
the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at
least one year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
The aforesaid Article 280 of the Labor Code, as amended, classifies
employees into three (3) categories, namely: (1) regular employees or those
whose work is necessary or desirable to the usual business of the employer;
(2) project employees or those whose employment has been fixed for a
specific project or undertaking, the completion or termination of which has
been determined at the time of the engagement of the employee or where
the work or services to be performed [are] seasonal in nature and the
employment is for the duration of the season; and (3) casual employees or
those who are neither regular nor project employees. Regular employees are
further classified into: (1) regular employees by nature of work; and (2)
regular employees by years of service. The former refers to those employees
who perform a particular activity which is necessary or desirable in the usual

business or trade of the employer, regardless of their length of service; while

the latter refers to those employees who have been performing the job,
regardless of the nature thereof, for at least a year. (Rowell Industrial
Corporation vs. Court of Appeals, G.R. No. 167714, March 7, 2007)
Considering that he continued working as President for UTP for about one (1)
year and five (5) months and since [his] employment is not covered by
another fixed term employment contract, [Kemplins] employment after the
expiration of his fixed term employment is already regular. Therefore, he is
guaranteed security of tenure and can only be removed from service for
cause and after compliance with due process. This is notwithstanding [UTP
and Jerseys] insistence that they merely tolerated [Kemplins] "consultancy"
for humanitarian reasons.
In termination cases, the employer bears the burden of proving that the
dismissal of the employee is for a just or an authorized cause. Failure to
dispose of the burden would imply that the dismissal is not lawful, and that
the employee is entitled to reinstatement, back wages and accruing benefits.
Moreover, dismissed employees are not required to prove their innocence of
the employers accusations against them. (San Miguel Corporation vs.
National Labor Relations Commission and William L. Friend, Jr., G.R. No.
153983, May 26, 2009).
In this case, [UTP and Jersey] failed to prove the existence of just cause for
his termination. Their allegation of loss of trust and confidence was raised
only in their position paper and was never posed before [Kemplin] in order
that he may be able to answer to the charge. In fact, he was merely told to
cease and desist from entering the premises. He was never afforded due
process as he was not notified of the charges against him and given the
opportunity to be heard. Thus, there was never any proven just cause for
[Kemplins] termination, which makes it, therefore, illegal. x x
x.17 (Underscoring supplied)
The CAs Decision
On June 29, 2012, the CA rendered the herein assailed Decision18 affirming
the disquisitions of the LA and NLRC. The CA stated that:
[Kemplins] presence for humanitarian reasons is purely self-serving and
belied by the evidence on record. In fact, [UTP and Jerseys] alleged
document denominated as Revocation of Power of Attorney (executed on

November 24, 2008 or MORE THAN one year from the expiration of
[Kemplins] employment contract) will only confirm that [Kemplin] continued
rendering work x x x beyond March 1, 2007. x x x.
xxxx
Moreover, if indeed [Kemplins] relationship with UTP after the expiration of
the formers employment contract was based on [UTP and Jerseys] mere
tolerance, why then did [they] have to "dismiss" [Kemplin] based on alleged
loss of trust and confidence? Clearly, [UTPs and Jerseys] allegation in their
Position Paper (before LA Jose) that [Kemplin] was "formally given notice of
his termination as in [sic] indicated on the Notice of Termination Letter dated
July 20, 2009," is already an indication, if not an admission, that [Kemplin]
was, indeed, still in the employ of UTP albeit without a new or renewed
contract of employment.
xxxx
The validity of an employers dismissal from service hinges on the
satisfaction of the two substantive requirements for a lawful termination. x x
x [T]he procedural aspect. And x x x the substantive aspect.
Records are bereft of any evidence that [Kemplin] was notified of the alleged
causes for his possible dismissal. Neither was there any notice sent to him to
afford him an opportunity to air his side and defenses. The alleged Notice of
Termination Letter sent by [UTP and Jersey] miserably failed to comply with
the twin-notice requirement under the law. x x x
xxxx
We likewise sustain the finding of the [NLRC] that [UTP and Jersey] failed to
prove the existence of just cause for [Kemplins] termination. [UTP and
Jerseys] allegation of loss of trust and confidence was raised only in their
Position Paper and was never posed before [Kemplin] in order that he may be
able to answer to the charge. It is a basic principle that in illegal dismissal
cases, the burden of proof rests upon the employer to show that the
dismissal of the employee is for a just cause and failure to do so would
necessarily mean that the dismissal is not justified.19(Citations omitted)
On January 16, 2013, the CA issued the herein assailed Resolution20 denying
UTP and Jerseys Motion for Reconsideration.21

Hence, the instant petition anchored on the following issues:

Whether or not the CA erred when it:
(a) ruled that the termination of [Kemplin] was invalid or unjust;
(b) invalidated the termination of [Kemplin] for [UTP and Jerseys]
failure to afford him due process of law;
(c) stated that the issue [of] "loss of trust and confidence" cannot be
raised for the first time on appeal; and
(d) failed to apply the doctrine of strained relations in lieu of
reinstatement.22
UTP and Jerseys Allegations
In support of the instant petition, UTP and Jersey reiterate their averments in
the proceedings below. They likewise emphasize that Kemplin is a fugitive
from justice since warrants of arrest for grave oral defamation and grave
coercion23 had been issued against him by the Metropolitan Trial Court (MTC)
of Pasay City, and for qualified theft by the Regional Trial Court (RTC) of
Angeles City. Kemplins co-workers likewise complained about his alleged
improprieties, lack of proper decorum, immorality and grave misconduct.
Kemplin also blocked UTPs website and diverted all links towards his own
site. Consequently, UTP lost both its customers and revenues. UTP, then, as
an employer, has the right to exercise its management prerogative of
terminating Kemplin, who has been committing acts inimical to business.24
Further, citing Wenphil Corporation v. National Labor Relations
Commission,25 UTP and Jersey argue that even if it were to be assumed that
procedural due process was not observed in terminating Kemplin, still, the
dismissal due to just cause should not be invalidated. Instead, a fine should
just be imposed as indemnity.26
UTP and Jersey also challenge the CAs holding that the court need not
resolve the issue of loss of trust and confidence since it was only belatedly
raised in the Position Paper filed before the LA. It is argued that the issue was
timely raised before the proper forum and Kemplin had all the opportunity to
contradict the charges against him, but he chose not to do so. 27

UTP and Jersey likewise posit that a strained relationship between them and
Kemplin had arisen due to the several criminal and civil cases they had filed
and which are now pending against the latter. Hence, even if the CA were
correct in holding that there was illegal dismissal, Kemplins reinstatement is
not advisable, practical and viable. A separation pay should just be paid
instead.28
Kemplins Comment
In Kemplins Comment,29 he sought the dismissal of the instant petition.
He insists that both procedural and substantive due process were absent
when he was dismissed from service. Kemplin alleges that Jersey merely
want to wrest the business away after the former initiated new checking and
collection procedures relative to UTPs finances. Kemplin also laments that
Jersey caused him to answer for baseless criminal offenses, for which no bail
can be posted. Specifically, the indictment for qualified theft before the RTC
of Angeles City involves a car registered in UTPs name, but which was
actually purchased using Kemplins money.30
Kemplin further emphasizes that "the doctrine of strained relations should
not be applied indiscriminately,"31especially where "the differences of the
employer with the employee are neither personal nor physical[,] much less
serious in nature[.]"32
This Courts Ruling
The instant petition is partially meritorious.
The first two issues raised are factual in nature, hence, beyond the ambit of
a petition filed under Rule 45 of the Rules of Court.
It is settled that Rule 45 limits us merely to the review of questions of law
raised against the assailed CA decision.33The Court is generally bound by the
CAs factual findings, except only in some instances, among which is, when
the said findings are contrary to those of the trial court or administrative
body exercising quasi-judicial functions from which the action originated. 34
In the case before us now, the LA, NLRC and CA uniformly ruled that Kemplin
was dismissed sans substantive and procedural due process. While we need
not belabor the first two factual issues presented herein, it bears stressing

that we find the rulings of the appellate court and the labor tribunals as
amply supported by substantial evidence.
Specifically, we note the advertisement agreements35 with Pizza Hut and M.
Lhuillier entered into by Kemplin, who signed the documents as President of
UTP on May 12, 2009, or more than two years after the supposed expiration
of his employment contract. They validate Kemplins claim that he, indeed,
continued to render his services as President of UTP well beyond March 2,
2007.
Moreover, in the letter36 dated July 30, 2009, Kemplin was ordered to cease
and desist from entering the premises of UTP.
In Unilever Philippines, Inc. v. Maria Ruby M. Rivera,37 the Court laid down in
detail the steps on how to comply with procedural due process in terminating
an employee, viz:
(1) The first written notice to be served on the employees should
contain the specific causes or grounds for termination against them,
and a directive that the employees are given the opportunity to submit
their written explanation within a reasonable period. "Reasonable
opportunity" under the Omnibus Rules means every kind of assistance
that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a
period of at least five (5) calendar days from receipt of the notice to
give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint. Moreover,
in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the
charge against the employees. A general description of the charge will
not suffice. Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which among the grounds
under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be given
the opportunity to: (1) explain and clarify their defenses to the charge
against them; (2) present evidence in support of their defenses; and
(3) rebut the evidence presented against them by the management.

During the hearing or conference, the employees are given the chance
to defend themselves personally, with the assistance of a
representative or counsel of their choice. Moreover, this conference or
hearing could be used by the parties as an opportunity to come to an
amicable settlement.
(3) After determining that termination of employment is justified, the
employers shall serve the employees a written notice of termination
indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been
established to justify the severance of their employment. (Underlining
ours)38
Prescinding from the above, UTPs letter sent to Kemplin on July 30, 2009 is a
lame attempt to comply with the twin notice requirement provided for in
Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code. 39
The charges against Kemplin were not clearly specified. While the letter
stated that Kemplins employment contract had expired, it likewise made
general references to alleged criminal suits filed against him.40 One who
reads the letter is inevitably bound to ask if Kemplin is being terminated due
to the expiration of his contract, or by reason of the pendency of suits filed
against him. Anent the pendency of criminal suits, the statement is
substantially bare. Besides, an employees guilt or innocence in a criminal
case is not determinative of the existence of a just or authorized cause for
his dismissal.41 The pendency of a criminal suit against an employee, does
not, by itself, sufficiently establish a ground for an employer to terminate the
former.
It also bears stressing that the letter failed to categorically indicate which of
the policies of UTP did Kemplin violate to warrant his dismissal from service.
Further, Kemplin was never given the chance to refute the charges against
him as no hearing and investigation were conducted.
Corollarily, in the absence of a hearing and investigation, the existence of
just cause to terminate Kemplin could not have been sufficiently established.
Kemplin should have been promptly apprised of the issue of loss of trust and
confidence in him before and not after he was already dismissed.

UTP and Jersey challenge the CAs disquisition that it need not resolve the
issue of loss of trust and confidence considering that the same was only
raised in the Position Paper which they filed before LA Jose.
UTP and Jerseys stance is untenable.
In Lawrence v. National Labor Relations Commission,42 the Court is emphatic
that:
Considering that Lawrence has already been fired, the belated act of LEP in
attempting to show a just cause in lieu of a nebulous one cannot be given a
semblance of legality. The legal requirements of notice and hearing cannot
be supplanted by the notice and hearing in labor proceedings. The due
process requirement in the dismissal process is different from the due
process requirement in labor proceedings and both requirements must be
separately observed x x x. Thus, LEPs method of "Fire the employee and let
him explain later" is obviously not in accord with the mandates of law. x x x.43
Clearly then, UTP was not exempted from notifying Kemplin of the charges
against him.1wphi1 The fact that Kemplin was apprised of his supposed
offenses, through the Position Paper filed by UTP and Jersey before LA Jose,
did not cure the defects attending his dismissal from employment.
While we agree with the LA, NLRC and CAs findings that Kemplin was
illegally dismissed, grounds exist compelling us to modify the order of
reinstatement and payment of 13th month benefit.
UTP and Jersey lament that the CA failed to apply the doctrine of strained
relations to justify the award of separation pay in lieu of reinstatement.
APO Chemical Manufacturing Corporation v. Bides44 is instructive anent the
instances when separation pay and not reinstatement shall be ordered. Thus:
The Court is well aware that reinstatement is the rule and, for the exception
of "strained relations" to apply, it should be proved that it is likely that, if
reinstated, an atmosphere of antipathy and antagonism would be generated
as to adversely affect the efficiency and productivity of the employee
concerned.
Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option

is no longer desirable or viable. On one hand, such payment liberates the

employee from what could be a highly oppressive work environment. On the
other hand, it releases the employer from the grossly unpalatable obligation
of maintaining in its employ a worker it could no longer trust. Moreover, the
doctrine of strained relations has been made applicable to cases where the
employee decides not to be reinstated and demands for separation
pay.45 (Citations omitted)
Considering that Kemplins dismissal occurred in 2009, there is much room to
doubt the viability, desirability and practicability of his reinstatement as
UTPs President. Besides, as a consequence of the unsavory accusations
hurled by the contending parties against each other, Kemplins
reinstatement is not likely to create an efficient and productive work
environment, hence, prejudicial to business and all the persons concerned.
We likewise find the award of 13th month benefit to Kemplin as improper.
In Torres v. Rural Bank of San Juan, Inc.,46 we stated that:
Being a managerial employee, the petitioner is not entitled to 13th month
pay. Pursuant to Memorandum Order No. 28, as implemented by the Revised
Guidelines on the Implementation of the 13th Month Pay Law dated
November 16, 1987, managerial employees are exempt from receiving such
benefit without prejudice to the granting of other bonuses, in lieu of the 13th
month pay, to managerial employees upon the employer's
discretion.47 (Citation omitted)
Hence, Kemplin, who had rendered his services as UTP's President, a
managerial position, is clearly not entitled to be paid the 13th month benefit.
WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision on
June 29, 2012 and the Resolution thereafter issued on January 16, 2013
rendered by the Court of Appeals in CA-G.R. SP No. 118971 finding that
Harland B. Kemplin was illegally dismissed are AFFIRMED with
MODIFICATIONS. The award to Harland B. Kemplin of a 13th month benefit is
hereby DELETED. In lieu of his reinstatement, he is AWARDED SEPARATION
PAY to be computed at the rate of one ( 1) month pay for every year of
service, with a fraction of at least six ( 6) months considered as one whole
year to be reckoned from the time of his employment on March 1, 2002 until
the finality of this Decision.48 United Tourist Promotions and Ariel D. Jersey
are further ORDERED TO PAY Harland B. Kemplin legal interest of six percent

(6%)per annum of the total monetary awards computed from the finality of
this Decision until full satisfaction thereof.49
The Labor Arbiter is hereby DIRECTED to re-compute the awards according to
the above.
SO ORDERED.

THIRD DIVISION
G.R. No. 179640, March 18, 2015
HACIENDA CATAYWA/MANUEL VILLANUEVA, owner, JOEMARIE
VILLANUEVA, manager, MANCY AND SONS ENTERPRISES,
INC., Petitioners, v. ROSARIO LOREZO, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari dated September 28,
2007 of petitioner Hacienda Cataywa, Manuel Villanueva, et al.,
(petitioners) seeking to reverse and set aside the Resolutions, dated October
17, 20061 and August 10, 2007,2 respectively, of the Court of Appeals (CA)
and the Resolution and Order, dated October 12, 2005 and March 8, 2006,
respectively, of the Social Security Commission, ordering petitioners to pay
jointly and severally all delinquent contributions, 3% penalty per month of
delayed payment and damages to respondent Rosario Lorezo.
The antecedent facts follow:
On October 22, 2002, respondent Rosario Lorezo received, upon inquiry, a
letter from the Social Security System (SSS) Western Visayas Group informing
her that she cannot avail of their retirement benefits since per their record
she has only paid 16 months. Such is 104 months short of the minimum
requirement of 120 months payment to be entitle to the benefit. She was
also informed that their investigation of her alleged employment under
employer Hda. Cataywa could not be confirmed because Manuel Villanueva
was permanently residing in Manila and Joemarie Villanueva denied having
managed the farm. She was also advised of her options: continue paying
contributions as voluntary member; request for refund; leave her
contributions in-trust with the System, or file a petition before the Social
Security Commission (SSC) so that liabilities, if any, of her employer may be

determined.3cralawred
Aggrieved, respondent then filed her Amended Petition dated September 30,
2003, before the SSC. She alleged that she was employed as laborer in Hda.
Cataywa managed by Jose Marie Villanueva in 1970 but was reported to the
SSS only in 1978. She alleged that SSS contributions were deducted from her
wages from 1970 to 1995, but not all were remitted to the SSS which,
subsequently, caused the rejection of her claim. She also impleaded Talisay
Farms, Inc. by virtue of its Investment Agreement with Mancy and Sons
Enterprises. She also prayed that the veil of corporate fiction be pierced
since she alleged that Mancy and Sons Enterprises and Manuel and Jose
Marie Villanueva are one and the same.4cralawred
Petitioners Manuel and Jose Villanueva refuted in their answer, the allegation
that not all contributions of respondent were remitted. Petitioners alleged
that all farm workers of Hda. Cataywa were reported a^id their contributions
were duly paid and remitted to SSS. It was the late Domingo Lizares, Jr. who
managed and administered the hacienda.5 While, Talisay Farms, Inc. filed a
motion to dismiss on the ground of lack of cause of action in the absence of
an allegation that there was an employer-employee relationship between
Talisay Farms and respondent.6cralawred
Consequently, the SSC rendered its Resolution dated October 12, 2005,
thus:chanRoblesvirtualLawlibrary
WHEREFORE, PREMISES CONSIDERED, this Commission finds, and so holds,
that Rosario M. Lorezo was a regular employee subject to compulsory
coverage of Hda. Cataywa/Manuel Villanueva/ Mancy and Sons Enterprises,
Inc. within the period of 1970 to February 25, 1990. In view thereof, the
aforenamed respondents are hereby ordered to pay jointly and severally,
within thirty (30) days from receipt hereof, all delinquent contributions within
the proven employment period computed in accordance with the then
prevailing minimum wage (at 11 months per year) in the amount of
P8,293.90, the 3% per month penalty on the delayed payment of
contributions in the amount of P59,786.10 (computed as of September 9,
2005), pursuant to Section 22 of the SS Law and the damages in the amount
of P32,356.21 for misrepresentation of the real date of employment,
pursuant to Section 24 (b) of the said statute.
The SSS, on the other hand, is ordered to pay (subject to existing rules and
regulations) petitioner Rosario M. Lorezo her retirement benefit, upon the
filing of the claim therefor, and to inform this Commission of its compliance
herewith.
SO ORDERED.7cralawred
cralawlawlibrary

The SSC denied petitioners' Motion for Reconsideration. The petitioner, then,
elevated the case before the CA where the case was dismissed outrightly
due to technicalities, thus:chanRoblesvirtualLawlibrary
The Court Resolved to DISMISS the instant petition on the basis of the
following observations:
1. Signatory to the Verification failed to attach his authority to sign for
and [in] behalf of the other Petitioners.
(Violation of Section 5, Rule 43 of the Rules of Court, in relation to
Section 7, Rule 45 of the Rules of Court)
2. Certified true copies of pleadings and documents relevant and
pertinent to the petition are incomplete, to wit:
-Petitioner failed to attach the following:
- Petition/Amended Petition filed before the SSS of Makati City
- Respondents' Answer filed before the SSS of Makati City
- Parties' respective position paper filed before the SSS of Makati City
- Parties' respective memorandum of appeal filed before the
Commission
(Violation of Section 6, Rule 43 of the Rules of Court, in relation to Section 7,
Rule 43 of the Rules of Court)8cralawred
cralawlawlibrary
Following the denial of petitioners' Motion for Reconsideration of the CA,
petitioner filed with this Court the present petition stating the following
grounds:chanRoblesvirtualLawlibrary
1) THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
STRICTLY AND RIGIDLY APPLYING THE TECHNICAL RULES OF PROCEDURE AND
DISMISSING THE CASE ON TECHNICALITY WITHOUT EVALUATING THE MERITS
OF THE CASE;ChanRoblesVirtualawlibrary
2) THE [SSC] COMMITTED REVERSIBLE ERROR IN MAKING CONCLUSIONS
FOUNDED ON SPECULATIONS AND SURMISES NOT CONFORMING TO
EVIDENCE ON RECORD, MAKING MANIFESTLY MISTAKEN INFERENCES, AND
RENDERING JUDGMENT BASED ON MISAPPREHENSION OF FACTS AND
MISAPPLICATION OF THE LAW, RULING AND RENDERING JUDGMENT THAT:
a) RESPONDENT WORKED FROM 1970 TO FEBRUARY 25,1990
b) PETITIONERS ARE LIABLE FOR DELINQUENT CONTRIBUTIONS
c) PETITIONERS ARE LIABLE FOR 3% PER MONTH PENALTY
d) PETITIONERS ARE LIABLE FOR DAMAGES DUE TO MISREPRESENTATION
e) MANCY & SONS ENTERPRISES, INC. AND MANUEL VILLANUEVA ARE ONE
AND THE SAME.9

cralawlawlibrary
The petition is partially meritorious.
Petitioners argues that the CA has been too rigid in the application of the
rules of procedure in dismissing the appeal without evaluation of the merits.
This Court has emphasized that procedural rules should be treated with
utmost respect and due regard, since they are designed to facilitate the
adjudication of cases to remedy the worsening problem of delay in the
resolution of rival claims and in the administration of justice. However, this
Court has recognized exceptions to the Rules, but only for the most
compelling reasons where stubborn obedience to the Rules would defeat
rather than serve the ends of justice.10cralawred
As in the case of Obut v. Court of Appeals,11 this Court held that "judicial
orders are issued to be obeyed, nonetheless a non-compliance is to be dealt
with as the circumstances attending the case may warrant. What should
guide judicial action is the principle that a party-litigant is to be given the
fullest opportunity to establish the merits of his complaint of defense rather
than for him to lose life, liberty, honor or property on
technicalities."12cralawred
When the CA dismisses a petition outright and the petitioner files a motion
for the reconsideration of such dismissal, appending thereto the requisite
pleadings, documents or order/resolution, this would constitute substantial
compliance with the Revised Rules of Court.13 Thus, in the present case,
there was substantial compliance when in their Motion for Reconsideration,
they attached a secretary certificate giving Joemarie's authority to sign on
behalf of the corporation. Petitioners also included the necessary
attachment.14cralawred
At the outset, it is settled that this Court is not a trier of facts and will not
weigh evidence all over again.15 However, considering the issues raised
which can be resolved on the basis of the pleadings and documents filed,
and the fact that respondent herself has asked this Court for early resolution,
this Court deems it more practical and in the greater interest of justice not to
remand the case to the CA but, instead, to resolve the controversy once and
for all.
Petitioners are of the opinion that the SSC committed reversible error in
making conclusions founded on speculations and surmises that respondent
worked from 1970 to February 25, 1990. Petitioners argue that the SSC did
not give credence nor weight at all to the existing SSS Form R-1A and farm
bookkeeper Wilfredo Ibalobor. Petitioners insist that after thirty long years, all
the records of the farm were already destroyed by termites and elements,

thus, they relied on the SSS Form R-1A as the only remaining source of
information available. Petitioners also alleged that respondent was a very
casual worker.
This Court disagrees.
It was settled that there is no particular form of evidence required to Drove
the existence of the employer-employee relationship. Any competent and
relevant evidence to prove such relationship may be admitted. This may
entirely be testimonial.16 If only documentary evidence would be required to
demonstrate the relationship, no scheming employer would be brought
before the bar of justice.17Petitioners erred in insisting that, due to passage
of time, SSS Form R-1A is the only remaining source of information available
to prove when respondent started working for them. However, such form
merely reflected the time in which the petitioners reported the respondent
for coverage of the SSS benefit. They failed to substantiate their claim that it
was only in 1978 that respondent reported for work.
The records are bereft of any showing that Demetria Denaga and Susano
Jugue harbored any ill will against the petitioners prompting them to execute
false affidavit. There lies no reason for this Court not to afford full faith and
credit to their testimonies. Denaga, in her Joint Affidavit with Jugue, stated
that she and respondent started working in Hda. Cataywa in 1970 and like
her, she was reported to the SSS on December 19, 1978.18 It was also
revealed in the records that the SSC found that Denaga was employed by
Manuel Villanueva at Hda. Cataywa from 1970 to December 1987.19cralawred
Jurisprudence has identified the three types of employees mentioned in the
provision20 of the Labor Code: (1) regular employees or those who have been
engaged to perform activities that are usually necessary or desirable in the
usual business or trade of the employer; (2) project employees or those
whose employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time of their
engagement, or those whose work or service is seasonal in nature and is
performed for the duration of the season; and (3) casual employees or those
who are neither regular nor project employees.21cralawred
Farm workers generally fall under the definition of seasonal employees. 22 It
was also consistently held that seasonal employees may be considered as
regular employees when they are called to work from time to time.23 They
are in regular employment because of the nature of the job, and not because
of the length of time they have worked. However, seasonal workers who
have worked for one season only may not be considered regular
employees.24cralawred
The nature of the services performed and not the duration thereof, is

determinative of coverage under the law.25 To be exempted on the basis of

casual employment, the services must not merely be irregular, temporary or
intermittent, but the same must not also be in connection with the business
or occupation of the employer.26 Thus, it is erroneous for the petitioners to
conclude that the respondent was a very casual worker simply because the
SSS form revealed that she had 16 months of contributions. It does not, in
any way, prove that the respondent performed a job which is not in
connection with the business or occupation of the employer to be considered
as casual employee.
The test for regular employees to be considered as such has been thoroughly
explained in De Leon v. NLRC,27viz.:chanRoblesvirtualLawlibrary
The primary standard, therefore, of determining a regular employment is the
reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The test
is whether the former is usually necessary or desirable in the usual business
or trade of the employer. The connection can be determined by considering
the nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also, if the employee has been
performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the employment
is also considered regular, but only with respect to such activity and while
such activity exists.28cralawred
cralawlawlibrary
A reading of the records would reveal that petitioners failed to dispute the
allegation that the respondent performed hacienda work, such as planting
sugarcane point, fertilizing, weeding, replanting dead sugarcane fields and
routine miscellaneous hacienda work.29 They merely alleged that respondent
was a very casual worker because she only rendered work for 16
months.30 Thus, respondent is considered a regular seasonal worker and not
a casual worker as the petitioners alleged.
Petitioners also assert that the sugarcane cultivation covers only a period of
six months, thus, disproving the allegation of the respondent that she worked
for 11 months a year for 25 years. This Court has classified farm workers as
regular seasonal employees who are called to work from time to time and
the nature of their relationship with the employer is such that during the off
season, they are temporarily laid off; but reemployed during the summer
season or when their services may be needed.31Respondent, therefore, as a
farm worker is only a seasonal employee. Since petitioners provided that the
cultivation of sugarcane is only for six] months, respondent cannot be
considered as regular employee during the months when there is no

cultivation.
Based on the foregoing facts and evidence on record, petitioners are liable
for delinquent contributions. It being proven by sufficient evidence that
respondent started working for the hacienda in 1970, it follows that
petitioners are liable for deficiency in the SSS contributions.
The imposition upon and payment by the delinquent employer of the three
percent (3%) penalty for the late remittance of premium contributions is
mandatory and cannot be waived by the System. The law merely gives to the
Commission the power to prescribe the manner of paying the premiums.
Thus, the power to remit or condone the penalty for late remittance of
premium contributions is not embraced therein.32 Petitioners erred in alleging
that the imposition of penalty is not proper.
Petitioners also insist that the award of damages for misrepresentation is
without basis. This Court disagrees.
The law provides that should the employer misrepresent the true date of the
employment of the employee member, such employer shall pay to the SSS
damages equivalent to the difference between the amount of benefit to
which the employee member or his beneficiary is entitled had the proper
contributions been remitted to the SSS and the amount payable on the basis
of the contributions actually remitted. However, should the employee
member or his beneficiary is entitled to pension benefits, the damages shall
be equivalent to the accumulated pension due as of the date of settlement of
the claim or to the five years' pension, whichever is higher, including the
dependent's pension.33cralawred
Lastly, petitioners aver that there is no legal basis to pierce the veil of
corporation entity.
It was held in Rivera v. United Laboratories, Inc.34 that While a corporation may exist for any lawful purpose, the law will regard it as
an association of persons or, in case of two corporations, merge them into
one, when its corporate legal entity is used as a cloak for fraud or illegality.
This is the doctrine of piercing the veil of corporate fiction. The doctrine
applies only when such corporate fiction is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, or when it is
made as a shield to confuse the legitimate issues, or where a corporation is
the mere alter ego or business conduit of a person, or where the corporation
is so organized and controlled and its affairs are so conducted as to make it
merely an instrumentality, agency, conduit or adjunct of another corporation.
To disregard the separate juridical personality of a corporation, the

wrongdoing must be established clearly and convincingly. It cannot be

presumed.35cralawlawlibrary
This Court has cautioned against the inordinate application of this doctrine,
reiterating the basic rule that "the corporate veil may be pierced only if it
becomes a shield for fraud, illegality or inequity committed against a third
person.36cralawred
The Court has expressed the language of piercing doctrine when applied to
alter ego cases, as follows:Where the stock of a corporation is owned by one
person whereby the corporation functions only for the benefit of such
individual owner, the corporation and the individual should be deemed the
same.37cralawred
This Court agrees with the petitioners that there is no need to pierce the
corporate veil. Respondent failed to substantiate her claim that Mancy and
Sons Enterprises, Inc. and Manuel and Jose Marie Villanueva are one and the
same. She based her claim on the SSS form wherein Manuel Villanueva
appeared as employer. However, this does not prove, in any way, that the
corporation is used to defeat public convenience, justify wrong, protect
fraud, or defend crime, or when it is made as a shield to confuse the
legitimate issues, warranting that its separate and distinct personality be set
aside. Also, it was not alleged nor proven that Mancy and Sons Enterprises,
Inc. functions only for the benefit of Manuel Villanueva, thus, one cannot be
an alter ego of the other.
WHEREFORE, the petition for review on certiorari dated September 28,
2007 of petitioners Hda. Cataywa, Manuel Villanueva, et al. is
hereby DENIED. Consequently, the resolution by the Social Security
Commission is hereby AFFIRMED with MODIFICATIONS that the delinquent
contributions should be computed as six months per year of service, and the
case against Manuel and Jose Marie Villanueva be DISMISSED.
SO ORDERED.cralawlawlibrary