Week 7

IV Termination of Employment
A. Employer-Employee Relationship
1. Four-fold test
2. Kinds of employment
a. Probationary
b. Regular
c. Project employment
d. Seasonal
e. Casual
f. Fixed-term
3. Job contracting
a. Effects of Labor-only contracting
b. Trilateral relationship in job contracting
B. Dismissal from employment
1. Just Causes
2. Authorized Causes
3. Due Process
a. Twin-notice requirement
b. Hearing; meaning of opportunity to be heard

WEEK 7: LABOR LAW REVIEW CASE DIGESTS

IV.A.1

Royale Homes v. Alcantara, G.R. No. 195190, July 28, 2014- (AS
CONTINUED FROM WEEK 5 CASE DIGESTS ASSIGNMENTS, --1. ELLEN NALIA
Legend Hotel v. Realuyo, G.R. No. 153511, July 18, 2012 -2.
GABUYA, MIKEE LIANE

1.Royale Homes v. Alcantara, G.R. No. 195190, July 28, 2014

(Four-fold test)
DOCTRINE: Not every form of control that a hiring party imposes on the hired
party is indicative of employee-employer relationship. Rules and regulations that
merely serve as guidelines towards the achievement of a mutually desired result
without dictating the means and methods of accomplishing it do not establish
employer-employee relationship.
FACTS:
Alcantara filed a Complaint for Illegal Dismissal against Royale Homes et al..He
contended among others that he is a regular employee of Royal Homes since he is
performing tasks that are necessary and desirable to its business and that his
performance is subject to company rules and regulations, code of ethics, periodic
evaluation, and exclusivity clause of contract.
Royale Homes however argued that its contract with Alcantara is clear and
unambiguous it engaged his services as an independent contractor as can be seen
from their contract stating that no employer-employee relationship exists between the
parties; that Alcantara was free to solicit sales at any time and by any manner he may
deem appropriate; that he may recruit sales personnel to assist him in marketing Royale
Homes inventories; and, thathis remunerations are dependent on his sales

performance.Royale Homeslikewise contended that CA grievously erred in ruling that it

exercised control over Alcantara based on a shallow ground that his performance is
subject to company rules and regulations, code of ethics, periodic evaluation, and
exclusivity clause of contract. RoyaleHomes alleged that it is expected to exercise some
degree of control over its independent contractors,but that does not automatically result
in the existence ofemployer-employee relationship. For control to be consideredas a
proof tending to establish employer-employee relationship, the same mustpertain to the
means and method of performing the work; not on the relationship of the independent
contractors among themselves or their persons or their source of living.
The Labor Arbiter declared Alcantara as employee of Royale Homes with a fixedterm employment. The NLRC however ruled that he is an independent contractor. The
Court of Appeals reversed the decision of NLRC and further ruled that Alcantaras
termination from employment was without any valid or just cause, and it was carried out
in violation of his right to procedural due process.
ISSUE:
Whether Alcantara was an independent contractor or an employee of Royale
Homes.
RULING:
Alcantara was an independent contractor.
In view of the conflicting findings of the tribunals the court is constrained to go
over the factual matters involved in this case and examined the juridical relationship of
the parties based on their written contract. The court also determined the juridical
relationship of the parties based on Control Test.
In this case, the contract, duly signed and not disputed by the parties,
conspicuously provides that "no employer-employee relationship exists between"
Royale Homes and Alcantara, as well as his sales agents. It is clear that they did not
want to be bound by employer-employee relationship atthe time ofthe signing of the
contract.Since "the terms of the contract are clear and leave no doubt upon the intention
of the contracting parties, the literal meaning of its stipulations should control." No
construction is even needed asthey already expressly state their intention.
In determining the existence of an employer-employee relationship, the Court
has generally relied on the four-fold test, to wit: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
employers power to control the employee with respect to the means and
methods by which the work is to be accomplished.Among the four, the most
determinative factor in ascertaining the existence of employer-employee
relationship is the "right of control test".It is deemed to be such an important factor
that the other requisites may even be disregarded.This holds true where the issues to
be resolved iswhether a person who performs work for another is the latters employee
or is an independent contractor, as in this case. For where the person for whom the
services are performed reserves the right to control not only the end to beachieved, but
also the means by which such end is reached, employer-employee relationship is
deemed to exist.

As such, not every form of control is indicative of employer-employee

relationship. A person who performs work for another and is subjected to its rules,
regulations, and code of ethics does not necessarily become an employee.As long as
the level of control does not interfere with the means and methods of accomplishing the
assigned tasks, the rules imposed by the hiring party on the hired party do not amount
to the labor law concept of control that is indicative of employer-employee relationship.
In Insular Life Assurance Co., Ltd. v. National Labor Relations Commission it was
pronounced that:Logically, the line should be drawn between rules that merely
serve as guidelines towards the achievement of the mutually desired result
without dictating the means or methods to be employed in attaining it, and those
that control or fix the methodology and bind or restrict the party hired to the use
of such means. The first, which aim only to promote the result, create no
employer-employee relationship unlike the second, which address both the result
and the means used to achieve it. x x
In this case, the Court agrees with Royale Homes that the rules, regulations,
code of ethics, and periodic evaluation alluded to byAlcantara do not involve control
over the means and methods by which he was to performhis job. Royale Homes has to
fix the price, impose requirements on prospective buyers, and lay down the terms and
conditionsof the sale, including the mode of payment, which the independent
contractors must follow. It is also necessary for Royale Homes to allocateits inventories
among its independent contractors, determine who has priority in selling the same,
grant commission or allowance based on predetermined criteria, and regularly monitor
the result of their marketing and sales efforts. But tothe mind of the Court, these do not
pertain to the means and methods of how Alcantara was to perform and accomplish his
task of soliciting sales. They do not dictate upon him the details of how he would solicit
sales or the manner as to how he would transact business with prospective clients.
Guidelines or rules and regulations that do notpertain to the means or methodsto be
employed in attaining the result are not indicative of control as understood in labor
law.Lastly, the court ruled that exclusivity of contract does not necessarily result in
employer-employee relationship and noted that the element of payment of wages is also
absent in this case.
2. [G.R. NO. 153511 - July 18, 2012]
LEGEND HOTEL (MANILA), owned by TITANIUM CORPORATION, and/or, NELSON
NAPUD, in his capacity as the President of Petitioner Corporation, Petitioner, VS.
HERNANI S. REALUYO, also known as JOEY ROA, Respondent.
DOCTRINE :In termination cases, the burden of proving that the dismissal was for
a valid or authorized cause rests upon the employer. Here, petitioner did not
submit evidence of the losses to its business operations and the economic havoc
it would thereby imminently sustain. It only claimed that respondent s termination
was due to its "present business/financial condition." This bare statement fell
short of the norm to show a valid retrenchment. Hence, we hold that there was no
valid cause for the retrenchment of respondent.

Respondent s remuneration, albeit denominated as talent fees, was still

considered as included in the term wage in the sense and context of the Labor
Code, regardless of how petitioner chose to designate the remuneration.
FACTS
This labor case for illegal dismissal involves a pianist employed to perform in the
restaurant of a hotel. On August 9, 1999, respondent, whose stage name was Joey R.
Roa, filed a complaint for alleged unfair labor practice, constructive illegal dismissal, and
the underpayment/nonpayment of his premium pay for holidays, separation pay, service
incentive leave pay, and 13111 month pay. He prayed for attorney's fees, moral
damages off P100,000.00 and exemplary damages for P100,000.00. 1rll
Respondent averred that he had worked as a pianist at the Legend Hotel s
Tanglaw Restaurant from September 1992 with an initial rate of P400.00/night that was
given to him after each night s performance; that his rate had increased to
P750.00/night; and that during his employment, he could not choose the time of
performance, which had been fixed from 7:00 pm to 10:00 pm for three to six
times/week. He added that the Legend Hotel s restaurant manager had required him to
conform with the venue s motif; that he had been subjected to the rules on employees
representation checks and chits, a privilege granted to other employees; that on July 9,
1999, the management had notified him that as a cost-cutting measure his services as a
pianist would no longer be required effective July 30, 1999; that he disputed the excuse,
insisting that Legend Hotel had been lucratively operating as of the filing of his
complaint; and that the loss of his employment made him bring his complaint. 2rll
In its defense, petitioner denied the existence of an employer-employee
relationship with respondent, insisting that he had been only a talent engaged to provide
live music at Legend Hotel s Madison Coffee Shop for three hours/day on two days
each week; and stated that the economic crisis that had hit the country constrained
management to dispense with his services.On December 29, 1999, the Labor Arbiter
(LA) dismissed the complaint for lack of merit upon finding that the parties had no
employer-employee relationship.
ISSUES
I.
XXX WHEN IT RULED THAT THERE IS THE EXISTENCE OF EMPLOYEREMPLOYEE RELATIONSHIP BETWEEN THE PETITIONER HOTEL AND
RESPONDENT ROA.
II.

IN FINDING THAT ROA IS A REGULAR EMPLOYEE AND THAT THE

TERMINATION OF HIS SERVICES WAS ILLEGAL. THE CA LIKEWISE
ERRED WHEN IT DECLARED THE REINSTATEMENT OF ROA TO HIS
FORMER POSITION OR BE GIVEN A SEPARATION PAY EQUIVALENT TO
ONE MONTH FOR EVERY YEAR OF SERVICE FROM SEPTEMBER 1999
UNTIL JULY 30, 1999 CONSIDERING THE ABSENCE OF AN
EMPLOYMENT RELATIONSHIP BETWEEN THE PARTIES.

III.

XXX WHEN IT DECLARED THAT ROA IS ENTITLED TO BACKWAGES,

SERVICE INCENTIVE LEAVE AND OTHER BENEFITS CONSIDERING

THAT THERE IS NO EMPLOYER EMPLOYEE RELATIONSHIP BETWEEN

THE PARTIES.
IV.

XXX WHEN IT NULLIFIED THE DECISION DATED MAY 31, 2001 IN NLRC
NCR CA NO. 023404-2000 OF THE NLRC AS WELL AS ITS RESOLUTION
DATED JUNE 29, 2001 IN FAVOR OF HEREIN PETITIONER HOTEL WHEN
HEREIN RESPONDENT ROA FAILED TO SHOW PROOF THAT THE NLRC
AND THE LABOR ARBITER HAVE COMMITTED GRAVE ABUSE OF
DISCRETION OR LACK OF JURISDICTION IN THEIR RESPECTIVE
DECISIONS.

V.

XXX WHEN IT OVERLOOKED THE FACT THAT THE PETITION WHICH

ROA FILED IS IMPROPER SINCE IT RAISED QUESTIONS OF FACT.

VI.

XXX WHEN IT GAVE DUE COURSE TO THE PETITION FILED BY ROA

WHEN IT IS CLEARLY IMPROPER AND SHOULD HAVE BEEN DISMISSED
OUTRIGHT CONSIDERING THAT A PETITION FOR CERTIORARI UNDER
RULE 65 IS LIMITED ONLY TO QUESTIONS OR ISSUES OF GRAVE
ABUSE OF DISCRETION OR LACK OF JURISDICTION COMMITTED BY
THE NLRC OR THE LABOR ARBITER, WHICH ISSUES ARE NOT
PRESENT IN THE CASE AT BAR.

RULING
The appeal fails.
Procedural Issue:
Certiorari was a proper recourse
The contention is unwarranted. There is no longer any doubt that a petition for
certiorari brought to assail the decision of the NLRC may raise factual issues, and the
CA may then review the decision of the NLRC and pass upon such factual issues in the
process.8 The power of the CA to review factual issues in the exercise of its original
jurisdiction to issue writs of certiorari is based on Section 9 of Batas PambansaBlg. 129,
which pertinently provides that the CA "shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings."
Substantive Issue No. 1:
Employer-employee relationship existed between the parties
We next ascertain if the CA correctly found that an employer-employee relationship
existed between the parties.
The issue of whether or not an employer-employee relationship existed between
petitioner and respondent is essentially a question of fact. 9 The factors that determine
the issue include who has the power to select the employee, who pays the employee s
wages, who has the power to dismiss the employee, and who exercises control of the

methods and results by which the work of the employee is accomplished. 10 Although no
particular form of evidence is required to prove the existence of the relationship, and
any competent and relevant evidence to prove the relationship may be admitted, 11 a
finding that the relationship exists must nonetheless rest on substantial evidence, which
is that amount of relevant evidence that a reasonable mind might accept as adequate to
justify a conclusion.
Respondent was paid P400.00 per three hours of performance from 7:00 pm to
10:00 pm, three to six nights a week. Such rate of remuneration was later increased to
P750.00 upon restaurant manager Velazco s recommendation. There is no denying that
the remuneration denominated as talent fees was fixed on the basis of his talent and
skill and the quality of the music he played during the hours of performance each night,
taking into account the prevailing rate for similar talents in the entertainment industry.
Respondent s remuneration, albeit denominated as talent fees, was still considered as
included in the term wage in the sense and context of the Labor Code, regardless of
how petitioner chose to designate the remuneration.
Clearly, respondent received compensation for the services he rendered as a
pianist in petitioner s hotel. Petitioner cannot use the service contract to rid itself of the
consequences of its employment of respondent. There is no denying that whatever
amounts he received for his performance, howsoever designated by petitioner, were his
wages.
Substantive Issue No. 2:
Validity of the Termination
Having established that respondent was an employee whom petitioner
terminated to prevent losses, the conclusion that his termination was by reason of
retrenchment due to an authorized cause under the Labor Code is inevitable.
Retrenchment is one of the authorized causes for the dismissal of employees
recognized by the Labor Code. It is a management prerogative resorted to by
employers to avoid or to minimize business losses. On this matter, Article 283 of the
Labor Code states:
Article 283.Closure of establishment and reduction of personnel. The employer
may also terminate the employment of any employee due to the installation of laborsaving devices, redundancy, retrenchment to prevent losses or the closing or cessation
of operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. xxx. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
The Court has laid down the following standards that an employer should meet to
justify retrenchment and to foil abuse, namely:
(a) The expected losses should be substantial and not merely de minimis in extent;

(b) The substantial losses apprehended must be reasonably imminent;

(c) The retrenchment must be reasonably necessary and likely to effectively prevent the
expected losses; and
(d) The alleged losses, if already incurred, and the expected imminent losses sought to
be forestalled must be proved by sufficient and convincing evidence.
WHEREFORE, we DENY the Petition for Review on Certiorari, and AFFIRM the
decision of the Court of Appeals promulgated on February 11, 2002, subject to the
modification that should reinstatement be no longer feasible, petitioner shall pay
to respondent separation pay of one month for every year of service computed
from September 1992 until the finality of this decision, and full backwages from
the time his compensation was withheld until the finality of this decision.
IV.A.2.a

GMA Network v. Pabriga, G.R. No. 176419, November 27, 2013 3.

GULA, MONICA
Book VI, Rule I, Sec. 6, Implementing Rules (Labor Code)
Carvajal v. Luzon Development Bank 4. JHUROLAN, MARYMAR
San Miguel v. Del Rosario, G.R. Nos. 168194 & 168603, December 13,
2005 5. LEGASPI, TINNE

3.GMA NETWORK, INC., Petitioner, vs. CARLOS P. PABRIGA, GEOFFREY F. ARIAS,

KIRBY
N.
CAMPO,
ARNOLD
L.
LAGAHIT,
and
ARMANDO
A.
CATUBIG, Respondents.
G.R. No. 176419
November 27, 2013
**DOCTRINE: This case is under Kinds of Employment: Probationary but
probationary employees are not mentioned therein. The case is all about regular
employees and project employees.*
Doctrine:
ARTICLE 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and
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 actually exist.
Facts:

On July 19 1999 due to the miserable working conditions private respondents were
forced to file a complaint against petitioner before the National Labor Relations
Commission Regional Arbitration Branch No. VII Cebu City. Private respondents were
engaged by petitioner to perform the following activities, to wit: (a) manning of Technical
operations center; (b) acting as transmitter/VTR men; (c) acting as maintenance staff;
(d) acting as cameramen.
On 4 August 1999, petitioner received a notice of hearing of the complaint. The
following day, petitioners Engineering Manager, Roy Villacastin, confronted the private
respondents about the said complaint.
On 9 August 1999, private respondents were summoned to the office of petitioners
Area Manager, Mrs. Susan Alio, and they were made to explain why they filed the
complaint. The next day, private respondents were barred from entering and reporting
for work without any notice stating the reasons therefor.
On 13 August 1999, private respondents, through their counsel, wrote a letter to Mrs.
Susan Alio requesting that they be recalled back to work.
On 23 August 1999, a reply letter from Mr. Bienvenido Bustria, petitioners head of
Personnel and Labor Relations Division, admitted the non-payment of benefits but did
not mention the request of private respondents to be allowed to return to work.
On 15 September 1999, private respondents sent another letter to Mr. Bustria reiterating
their request to work but the same was totally ignored. On 8 October 1999, private
respondents filed an amended complaint raising the following additional issues: 1)
Unfair Labor Practice; 2) Illegal dismissal; and 3) Damages and Attorneys fees.
The Labor Arbiter dismissed the complaint so respondents appealed to the NLRC. The
NLRC reversed the decision of the labor arbiter, stating among others that: All
complainants are regular employees with respect to the particular activity to which they
were assigned, until it ceased to exist. As such, they are entitled to payment of
separation pay computed at one (1) month salary for every year of service.
Petitioner elevated the case to the Court of Appeals and the appellate court denied the
petition for lack of merit.
Respondents claim that they are regular employees of petitioner GMA Network, Inc. The
latter, on the other hand, interchangeably characterize respondents employment as
project and fixed period/fixed term employment.
Issue:
Whether or not respondents are regular or project employees.

Ruling:

Respondents are regular employees.

At the outset, we should note that the nature of the employment is determined by law,
regardless of any contract expressing otherwise. The supremacy of the law over the
nomenclature of the contract and the stipulations contained therein is to bring to life the
policy enshrined in the Constitution to afford full protection to labor. Labor contracts,
being imbued with public interest, are placed on a higher plane than ordinary contracts
and are subject to the police power of the State.
The terms regular employment and project employment are taken from Article 280 of
the Labor Code, which also speaks of casual and seasonal employment:
ARTICLE 280. Regular and casual employment. The provisions of
written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and 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 actually exist.
It is evidently important to become clear about the meaning and scope of the term
"project" in the present context. The "project" for the carrying out of which "project
employees" are hired would ordinarily have some relationship to the usual business of
the employer. Exceptionally, the "project" undertaking might not have an ordinary or
normal relationship to the usual business of the employer.
In the realm of business and industry, we note that "project" could refer to one or
the other of at least two (2) distinguishable types of activities. Firstly, a project could
refer to a particular job or undertaking that is within the regular or usual business of the
employer company, but which is distinct and separate, and identifiable as such, from the
other undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times. The typical example of this first type of project is a
particular construction job or project of a construction company. A construction company
ordinarily carries out two or more [distinct] identifiable construction projects: e.g., a
twenty-five-storey hotel in Makati; a residential condominium building in Baguio City;

and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of
one of these separate projects, the scope and duration of which has been determined
and made known to the employees at the time of employment, are properly treated as
"project employees," and their services may be lawfully terminated at completion of the
project.
The term "project" could also refer to, secondly, a particular job or undertaking
that is not within the regular business of the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the ordinary or regular business
operations of the employer. The job or undertaking also begins and ends at determined
or determinable times. x x x. (Emphases supplied, citation omitted.)
Thus, in order to safeguard the rights of workers against the arbitrary use of the
word "project" to prevent employees from attaining the status of regular employees,
employers claiming that their workers are project employees should not only prove that
the duration and scope of the employment was specified at the time they were engaged,
but also that there was indeed a project.
There is no denying that the manning of the operations center to air commercials,
acting as transmitter/VTR men, maintaining the equipment, and acting as cameramen
are not undertakings separate or distinct from the business of a broadcasting company.
Petitioners allegation that respondents were merely substitutes or what they call
pinch-hitters (which means that they were employed to take the place of regular
employees of petitioner who were absent or on leave) does not change the fact that
their jobs cannot be considered projects within the purview of the law. Every industry,
even public offices, has to deal with securing substitutes for employees who are absent
or on leave.
Nowhere in the records is there any showing that petitioner reported the
completion of its projects and the dismissal of private respondents in its finished
projects to the nearest Public Employment Office as per Policy Instruction No. 20 of the
Department of Labor and Employment [DOLE]. Jurisprudence abounds with the
consistent rule that the failure of an employer to report to the nearest Public
Employment Office the termination of its workers services everytime a project or a
phase thereof is completed indicates that said workers are not project employees.
In sum, we affirm the findings of the NLRC and the Court of Appeals that
respondents are regular employees of petitioner. As regular employees, they are
entitled to security of tenure and therefore their services may be terminated only for just
or authorized causes. Since petitioner failed to prove any just or authorized cause for
their termination, we are constrained to affirm the findings of the NLRC and the Court of
Appeals that they were illegally dismissed.

4. MYLENE CARVAJAL vs. LUZON DEVELOPMENT BANK, G.R. No.

186169, August 1, 2012
DOCTRINE: A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from just or authorized
causes of termination, an additional ground is provided under Article 281 of the Labor
Code, i.e., the probationary employee may also be terminated for failure to qualify as a
regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement. Thus, the services of an
employee who has been engaged on probationary basis may be terminated for any of
the following: (1) a just or (2) an authorized cause and (3) when he fails to qualify as a
regular employee in accordance with reasonable standards prescribed by the employer.
FACTS: Petitioner Mylene Carvajal was employed as a trainee-teller by respondent
Bank under a six-month probationary employment contract. On 10 December 2003, the
Bank sent petitioner a Memorandum directing her to explain in writing why she should
not be subjected to disciplinary action for "chronic tardiness" for a total of eight (8)
times. Petitioner apologized in writing and explained that she was in the process of
making adjustments regarding her work and house chores. She was thus reprimanded
in writing and reminded of her status as a probationary employee. Still, on 6 January
2004, a second Memorandum was sent to petitioner directing her to explain why she
should not be suspended for "chronic tardiness" on 13 occasions. On 12 January
2004, petitioner was informed, through a Memorandum, of her suspension for three (3)
working days without pay effective 21 January 2004. Finally, in a Memorandum dated
22 January 2004, petitioners suspension was lifted but in the same breath, her
employment was terminated effective 23 January 2004.
`Hence, petitioners filing of the Complaint for illegal dismissal before the Labor
Arbiter. Petitioner alleged, in her position paper, that the following were the reasons for
her termination: 1) she is not an effective frontliner; 2) she has mistakenly cleared a
check; 3) tardiness; 4) absenteeism; and 5) shortage. In their position paper,
respondents averred that petitioner was terminated as a probationary employee on
three grounds, namely: 1) chronic tardiness; 2) unauthorized absence; and 3) failure to
perform satisfactorily as a probationary employee. The Labor Arbiter ruled that
petitioner was illegally dismissed. The decision of the Labor Arbiter was partially
appealed to the NLRC by petitioner. Petitioner contended that she should be considered
a regular employee and that the computation by the Labor Arbiter of backwages
up to the end of her probationary contract is without basis. In its Comment,
respondent argued against the illegality of petitioners dismissal and their joint and
solidary liability to pay complainants monetary claims. The NLRC affirmed with
modification the Labor Arbiters Decision. Respondents filed a motion for
reconsideration but the NLRC denied the same. In a petition for certiorari filed by
respondents, the Court of Appeals rendered the Decision reversing the NLRC ruling.
Petitioner elevated the case to this Court via petition for review on certiorari.

ISSUE: Whether the petitioner met the qualification to be considered as regular

employee of the respondent.
RULING: NO. Petitioner premised her appeal on Article 279 of the Labor Code which
provides:
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 other monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.
Petitioner maintained that she became a regular employee by virtue of Book VI,
Rule 1, Section 6(d) of the Implementing Rules of the Labor Code which states:
(d) In all cases of probationary employment, the employer shall make known to the
employee the standards under which he will qualify as a regular employee at the time of
his engagement. Where no standards are made known to the employee at that time, he
shall be deemed a regular employee.
It is beyond dispute that petitioner was hired as a probationary employee.
Whether her employment status ripened into a regular one is the point of contention.
Under the very provision cited by petitioner, we cannot, by any hermeneutics, see
petitioners employment status as regular. At the time of her engagement and as
mandated by law, petitioner was informed in writing of the standards necessary to
qualify her as a regular employee.
A probationary employee, like a regular employee, enjoys security of tenure.
However, in cases of probationary employment, aside from just or authorized causes of
termination, an additional ground is provided under Article 281 of the Labor Code, i.e.,
the probationary employee may also be terminated for failure to qualify as a
regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement. Thus, the services of an
employee who has been engaged on probationary basis may be terminated for any of
the following: (1) a just or (2) an authorized cause and (3) when he fails to qualify as a
regular employee in accordance with reasonable standards prescribed by the
employer.
It is evident that the primary cause of respondents dismissal from her
probationary employment was her "chronic tardiness." At the very start of her
employment, petitioner already exhibited poor working habits. Even during her first
month on the job, she already incurred eight (8) tardiness. In a Memorandum dated 11
December 2003, petitioner was warned that her tardiness might affect her opportunity to

become a permanent or regular employee. And petitioner did not provide a satisfactory
explanation for the cause of her tardiness.
More importantly, satisfactory performance is and should be one of the
basic standards for regularization. Naturally, before an employer hires an
employee, the former can require the employee, upon his engagement, to
undergo a trial period during which the employer determines his fitness to qualify
for regular employment based on reasonable standards made known to him at
the time of engagement. This is the concept of probationary employment which is
intended to afford the employer an opportunity to observe the fitness of a probationary
employee while at work, and to ascertain whether he will become an efficient and
productive employee. While the employer observes the fitness, propriety and efficiency
of a probationer to ascertain whether he is qualified for permanent employment, the
probationer, on the other hand, seeks to prove to the satisfaction of the employer that
he has the qualifications to meet the reasonable standards for permanent employment.
Moreover, in the letter of appointment, respondents reserved the right to
"immediately terminate this contract in the event of a below satisfactory performance,
serious disregard of company rules and policies and other reasons critical to its
interests." In sum, petitioner was validly dismissed from probationary employment
before the expiration of her 6-month probationary employment contract. If the
termination is for cause, it may be done anytime during the probation; the employer
does not have to wait until the probation period is over.
5. SAN MIGUEL CORPORATION V. CAROLINE C. DEL ROSARIO
[GR Nos. 168194 & 168603 December 13, 2005]ILLEGAL DISMISSAL ANG CASE
Redundancy, for purposes of the Labor Code, exists where the services of
an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is redundant where it is
superfluous, and superfluity of a position or positions may be the outcome of a
number of factors, such as overhiring of workers, decreased volume of business,
or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.
The criteria in implementing a redundancy are: (a) less preferred status,
e.g. temporary employee; (b) efficiency; and (c) seniority. What further militated
against the alleged redundancy advanced by petitioner is their failure to refute
respondent's assertion that after her dismissal, it hired new recruits and reemployed two of her batch mates. The Court finds that petitioner was not able to
discharge the burden of proving that the dismissal of respondent was valid.
FACTS:
Respondent was employed by petitioner as key account specialist. On March 9,
2001, petitioner informed respondent that her probationary employment will be severed
at the close of the business hours of March 12, 2001. On March 13, 2001, respondent
was refused entry to petitioner's premises. On June 24, 2002, respondent filed a
complaint against petitioner for illegal dismissal and underpayment/non-payment of

monetary benefits. Respondent alleged that petitioner feigned an excess in manpower

because after her dismissal, it hired new recruits and re-employed two of her batch
mates. On the other hand, petitioner claimed that respondent was a probationary
employee whose services were terminated as a result of the excess manpower that
could no longer be accommodated by the company.
The Labor Arbiter declared respondent a regular employee because her
employment exceeded six months and holding that she was illegally dismissed as there
was no authorized cause to terminate her employment. On appeal to NLRC, it modified
the previous decision.
ISSUE: Whether or not the respondent was an employee and was illegally terminated. If
so, is she entitled to monetary benefits.
HELD:
Respondent was illegally dismissed and is thus entitled to monetary benefits.
In termination cases, the burden of proving the circumstances that would justify
the employee's dismissal rests with the employer. The best proof that petitioner should
have presented to prove the probationary status of respondent is her employment
contract. None, having been presented, the continuous employment of respondent as
an account specialist for almost 11 months, from April 17, 2000 to March 12, 2001,
means that she was a regular employee and not a temporary reliever or a probationary
employee. And while it is true that by way of exception, the period of probationary
employment may exceed six months when the parties so agree, such as when the
same is established by company policy, or when it is required by the nature of the work,
none of these exceptional circumstance were proven in the present case. Thus,
respondent whose employment exceeded six months is undoubtedly a regular
employee of petitioner.
Her termination from employment must be for a just or authorized cause,
otherwise, her dismissal would be illegal. Petitioner tried to justify the dismissal of
respondent under the authorized cause of redundancy. It thus argued in the alternative
that even assuming that respondent qualified for regular employment, her services still
had to be terminated because there are no more regular positions in the company.
Undoubtedly, petitioner is invoking a redundancy which allegedly resulted in the
termination not only of the trainees, probationers but also of some of its regular
employees.
Redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements of
the enterprise. Succinctly put, a position is redundant where it is superfluous, and
superfluity of a position or positions may be the outcome of a number of factors, such as
overhiring of workers, decreased volume of business, or dropping of a particular product
line or service activity previously manufactured or undertaken by the enterprise. The
criteria in implementing a redundancy are: (a) less preferred status, e.g. temporary
employee; (b) efficiency; and (c) seniority. What further militated against the alleged
redundancy advanced by petitioner is their failure to refute respondent's assertion that
after her dismissal, it hired new recruits and re-employed two of her batch mates. The

Court finds that petitioner was not able to discharge the burden of proving that the
dismissal of respondent was valid.
Considering that respondent was illegally dismissed, she is entitled not only to
reinstatement but also to payment of full back wages, computed from the time her
compensation was actually withheld from her on March 13, 2001, up to her actual
reinstatement. She is likewise entitled to other benefits, i.e., service incentive leave pay
and 13th month pay computed from such date also up to her actual reinstatement.
Respondent is not entitled to holiday pay because the records reveal that she is a
monthly paid regular employee. Under Section 2, Rule IV, Book III of the Omnibus Rules
Implementing the Labor Code, employees who are uniformly paid by the month,
irrespective of the number of working days therein, shall be presumed to be paid for all
the days in the month whether worked or not.
IV.A.2.b

Art. 280, Labor Code

Book VI, Rule I, Sec. 5, a, Implementing Rules (Labor Code)
MacArthur Malicdem v. Marulas, G.R. No. 204406, February 26,
2014- 6. LEGASPO, MARJE
FVR Skills v. Seva, G.R. No. 200857, October 22, 2014- 7. LIMBAGA
MARK

6. MacArthur Malicdem v. Marulas, G.R. No. 204406, February 26, 2014- 6.

LEGASPO, MARJE
7. FVR Skills v. Seva, G.R. No. 200857, October 22, 2014- 7. LIMBAGA MARK
IV.A.2.c
Omni Hauling v. Bon, G.R. No. 199388, September 3, 2014-8.
LUMANTAS, JESSE FAITH
PAsos v. PNCC, G.R. No. 192394, July 3, 2013 9.
MACATANGAY, MARIA THERESA
See MacArthur Malicdem v. Marulas, G.R. No. 204406,
February 26, 2014SAME 6. LEGASPO, MARJE

8. OMNI HAULING SERVICES, INC., LOLITA FRANCO, and

ANICETO FRANCO, petitioners, vs. BERNARDO BON
DOCTRINE : Since respondents were not clearly and knowingly informed of
their employment status as mere project employees, with the duration and
scope of the project specified at the time they were engaged, the presumption
of regular employment should be accorded in their favor pursuant to Article
280, in which they shall be considered as [regular employees].
Facts:
Petitioner Omni Hauling Services, Inc. (Omni), a company owned by petitioners Lolita
and Aniceto Franco (petitioners), was awarded a one (1) year service contract by the
local government of Quezon City to provide garbage hauling services for the period July
1, 2002 to June 30, 2003. For this purpose, Omni hired respondents as garbage truck
drivers and paleros who were then paid on a per trip basis. When the service contract
was renewed for another year, petitioners required each of the respondents to sign

employment contracts which provided that they will be "re-hired" only for the duration of
the same period. However, respondents refused to sign the employment contracts,
claiming that they were regular employees since they were engaged to perform
activities which were necessary and desirable to Omni's usual business or trade. For
this reason, Omni terminated the employment of respondents which, in turn, resulted in
the filing of cases for illegal dismissal.
LA Ruling
The LA found that respondents, at the time of their engagement, were informed that
their employment will be limited for a specific period of one year and was co-terminus
with the service contract with the Quezon City government. Thus, respondents were not
regular but merely project employees whose hiring was solely dependent on the
aforesaid service contract. As a result, respondents' contracts with Omni expired upon
the service contract's expiration on June 30, 2003.
NLRC Ruling
It sustained the LA's finding that respondents were only project employees whose
employment was co-terminus with Omni's service contract with the Quezon City
government. Thus, when respondents refused to sign the employment contracts for the
subsequent period, there was no dismissal to speak of, but rather, a mere expiration of
respondents' previous contracts.
CA Ruling
The CA reversed and set aside the NLRC's earlier pronouncements.
It held that the NLRC failed to consider the glaring fact that no contract of employment
exists to support petitioners' allegation that respondents are fixed-term (or properly
speaking, project) employees. In view of the fact that no other evidence was offered to
prove the supposed project employment, petitioners' failure to present an employment
contract puts into serious doubt the allegation that the employees, i.e., respondents,
were properly informed at the onset of their employment status as project employees.
Issue:
WON respondents were project employees.
Held: NO. RESPONDENTS WERE NOT PROJECT EMPLOYEES, BUT REGULAR
EMPLOYEES.
A project employee is assigned to a project which begins and ends at determined
or determinable times. Unlike regular employees who may only be dismissed for just
and/or authorized causes under the Labor Code, the services of employees who are
hired as "project employees" may be lawfully terminated at the completion of the
project.
According to jurisprudence, the principal test for determining whether particular
employees are properly characterized as "project employees" as distinguished from
"regular employees," is whether or not the employees were assigned to carry out a
"specific project or undertaking," the duration (and scope) of which were specified at
the time they were engaged for that project. The project could either be (1) a particular

job or undertaking that is within the regular or usual business of the employer company,
but which is distinct and separate, and identifiable as such, from the other undertakings
of the company; or (2) a particular job or undertaking that is not within the regular
business of the corporation. In order to safeguard the rights of workers against the
arbitrary use of the word "project" to prevent employees from attaining a regular status,
employers claiming that their workers are project employees should not only
prove that the duration and scope of the employment was specified at the time
they were engaged, but also that there was indeed a project.
Even though the absence of a written contract does not by itself grant regular
status to respondents, such a contract is evidence that respondents were informed of
the duration and scope of their work and their status as project employees. As held in
Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez:
Even though the absence of a written contract does not by itself
grant regular status to respondents, such a contract is evidence
that respondents were informed of the duration and scope of their
work and their status as project employees. In this case, where no
other evidence was offered, the absence of an employment
contract puts into serious question whether the employees
were properly informed at the onset of their employment
status as project employees. It is doctrinally entrenched that in
illegal dismissal cases, the employer has the burden of proving with
clear, accurate, consistent and convincing evidence that a dismissal
was valid.
In this case, records are bereft of any evidence to show that respondents were
made to sign employment contracts explicitly stating that they were going to be hired as
project employees, with the period of their employment to be co-terminus with the
original period of Omni's service contract with the Quezon City government. Neither is
petitioners' allegation that respondents were duly apprised of the project-based nature
of their employment supported by any other evidentiary proof.
Thus, the logical conclusion is that respondents were not clearly and knowingly
informed of their employment status as mere project employees, with the duration and
scope of the project specified at the time they were engaged. As such, the
presumption of regular employment should be accorded in their favor pursuant to
Article 280 of the Labor Code which provides that "[employees] who have rendered at
least one year of service, whether such service is continuous or broken [ as
respondents in this case ] shall be considered as [regular employees] with respect
to the activity in which [they] are employed and [their] employment shall continue while
such activity actually exists."
As regular employees, it is incumbent upon petitioners to establish that
respondents had been dismissed for a just and/or authorized cause. However,
petitioners failed in this respect; hence, respondents were illegally dismissed.

9. Pasos vs. Phil National Construction Corp. G.R. No. 192394, July 3, 2013
DOCTRINE: Under Article 280 of the Labor Code, as amended, a project employee
is one whose "employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season." Thus,
the principal test used to determine whether employees are project employees is
whether or not the employees were assigned to carry out a specific project or
undertaking, the duration or scope of which was specified at the time the
employees were engaged for that project.
Facts:
Pasos started working for PNCC, under a Project Employment Contract which
was to last three month. His employment was however extended two years, and
thereafter severally rehired under similar contracts. Despite the termination of his last
contract, he was instructed to report back as he will be employed again.
Pasos underwent medical examination for purposes of reemployment. He was
advised to take a 14-day sick leave, and on a subsequent check-up, was advised to
take a 60-day sick leave. It was at this circumstance that petitioner was told he was not
entitled to sick leave as he was not a regular employee. And when petitioner was finally
given a clean bill of health and reported to work, he was no longer admitted and told his
contract ended on October 19, 2000.
This prompted petitioner to file a complaint for illegal dismissal against PNCC. He
argued that he is deemed a regular employee of PNCC due to his prolonged
employment as a project employee as well as the failure on the part of PNCC to report
his termination every time a project is completed.
PNCC countered that petitioner was hired as a project employee in several
projects with specific dates of engagement and termination and had full knowledge and
consent that his appointment was only for the duration of each project.
Issue: WON petitioner is a regular employee with right to security of tenure.
Ruling: YES.
This Court is convinced however that although petitioner started as a project
employee, he eventually became a regular employee of PNCC.
Under Article 280 of the Labor Code, as amended, a project employee is one whose
"employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the

employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season." Thus, the principal test used to determine
whether employees are project employees is whether or not the employees were
assigned to carry out a specific project or undertaking, the duration or scope of which
was specified at the time the employees were engaged for that project.
In the case at bar, petitioner worked continuously for more than two years after the
supposed three-month duration of his project employment for the NAIA II Project.
The failure of an employer to file termination reports after every project completion
proves that an employee is not a project employee.
Records clearly show that PNCC did not report the termination of petitioners supposed
project employment to the DOLE. Department Order No. 19, or the "Guidelines
Governing the Employment of Workers in the Construction Industry," requires
employers to submit a report of an employees termination to the nearest public
employment office every time an employees employment is terminated due to a
completion of a project.
A regular employee dismissed for a cause other than the just or authorized causes
provided by law is illegally dismissed.
Petitioners regular employment was terminated by PNCC due to contract expiration or
project completion, which are both not among the just or authorized causes provided in
the Labor Code, as amended, for dismissing a regular employee.
Thus, petitioner was illegally dismissed.

FOR THIS TOPIC, See 6.MacArthur Malicdem v. Marulas, G.R. No.

204406, February 26, 2014SAME 6. LEGASPO, MARJE (ALSO)

IV.A.2.d

Universal Robina v. Acibo, G.R. No. 186439, January 15, 2014- 10.
PATATAG, ARNEL
Gapayao v. Fulo, G.R. No. 193493, June 13, 2013 11. REGUDO,

MARION THURSDAY

10. Universal Robina Sugar Milling Corp. vs. Acibo

Doctrines:

(1)
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, and, in some cases,
even the length of time of the performance and its continued existence.

(2)
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.

Facts:
The complainants were employees of URSUMCO (Universal Robina). They were
hired on various dates (between February 1988 and April 1996) and on different
capacities, 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 (1) month or for a given season.

Issue:
(1) W/N, the complainants are regular employees.
(2) W/N, if considered regular employees they are entitled to CBA-benefit.

Ruling:

1st Issue:

Yes. They are regular seasonal employees.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. 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. 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.
Seasonal employment involves work or service that is seasonal in nature or lasting for
the duration of the season.This employment arrangement while 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.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 serve as badge of regular employment.

In 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 reemployment

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 this case, 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.

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.

2nd Issue

No. 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 settled rule is that regular seasonal employees are regular workers with respect to
their seasonal tasks or activities and while such activities exist, cannot automatically be
governed by the existing CBAas they 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.

11. G.R. No. 193493

June 13, 2013

JAIME N. GAPAYAO, Petitioner,

vs.
ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL SECURITY
COMMISSION, Respondents.
DOCTRINE: EMPLOYER-EMPLOYEE RELATIONSHIP
The power of the employer to control the work of the employee is considered the
most significant determinant of the existence of an employer-employee
relationship. This is the so-called control test and is premised on whether the
person for whom the services are performed reserves the right to control both the
end achieved and the manner and means used to achieve that end.
It should be remembered that the control test merely calls for the existence of the
right to control, and not necessarily the exercise thereof. It is not essential that
the employer actually supervises the performance of duties by the employee. It is
enough that the former has a right to wield the power.
Pakyaw workers are regular employees, provided they are subject to the control
of petitioner.
FACTS:
On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure
secondary to 1st degree burn 70% secondary electrocution" while doing repairs at the
residence and business establishment of petitioner located at San Julian, Irosin,
Sorsogon.
On 14 January 1998, both parties executed a Compromise Agreement, the
relevant portion of which is quoted below:
We, the undersigned unto this Honorable
Office/Provincial Agency Office respectfully state:

Regional

Office/District

1. The undersigned employer, hereby agrees to pay the sum of FORTY

THOUSAND PESOS (P40,000.00) to the surviving spouse of JAIME
POLO, an employee who died of an accident, as a complete and full
payment for all claims due the victim.
2. On the other hand, the undersigned surviving spouse of the victim
having received the said amount do [sic] hereby release and discharge the
employer from any and all claims that maybe due the victim in connection
with the victims employment thereat.

Thereafter, private respondent filed a claim for social security benefits with
the Social Security System (SSS)Sorosogon Branch. However, upon verification
and evaluation, it was discovered that the deceased was not a registered member
of the SSS. The SSS conducted a field investigation to clarify his status of
employment. In its field investigation report, it enumerated its findings as follows:
In connection with the complaint filed by Mrs. Rosario Fulo, hereunder are the
findings per interview with Mr. Leonor Delgra, Santiago Bolanos and Amado
Gacelo:
1. That Mr. Jaime Fulo was an employee of Jaime Gapayao as farm
laborer from 1983 to 1997.
2. Mr. Leonor Delgra and Santiago Bolanos are co-employees of Jaime
Fulo.
3. Mr. Jaime Fulo receives compensation on a daily basis ranging
from P5.00 to P60.00 from 1983 to 1997.
Per interview from Mrs. Estela Gapayao, please be informed that:
1. Jaime Fulo is an employee of Mr.&Mrs. Jaime Gapayao on an extra
basis.
2. Sometimes Jaime Fulo is allowed to work in the farm as abaca
harvester and earn 1/3 share of its harvest as his income.
3. Mr.&Mrs.Gapayao hired the services of Jaime Fulo not only in the farm
as well as in doing house repairs whenever it is available. Mr.Fulo
receives his remuneration usually in the afternoon after doing his job.
4. Mr.&Mrs.Gapayao hires 50-100 persons when necessary to work in
their farm as laborer and Jaime Fulo is one of them. Jaime Fulo receives
more or less P50.00 a day. (Emphases in the original)
Consequently, the SSS demanded that petitioner remit the social security
contributions of the deceased.
On 14 March 2007, the SSC rendered a Resolution, stating that this Commission
finds, and so holds, that Jaime Fulo, the late husband of petitioner, was employed by
respondent Jaime N. Gapayao from January 1983 to November 4, 1997, working for
nine (9) months a year receiving the minimum wage then prevailing.CA rendered a
Decision in favor of private respondent.

ISSUE:W/N THERE exists between the deceased Jaime Fulo and petitioner an
employer-employee relationship that would merit an award of benefits in favor of private
respondent under social security laws.
RULING:
Yes, there exists employer-employee relationship that would merit an award of
benefits in favor of private respondent under social security laws.
Farm workers may be considered regular seasonal employees.
Article 280 of the Labor Code states:
Article 280.Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such actually exists.
Jurisprudence has identified the three types of employees mentioned in the
provision:
(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.

Farm workers generally fall under the definition of seasonal employees. We have
consistently held that seasonal employees may be considered as regular
employees.Regular seasonal employees are those called to work from time to time. 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. They are in regular employment because of the nature of their job,and
not because of the length of time they have worked.
The rule, however, is not absolute. In Hacienda Fatima v. National
Federation of Sugarcane Workers-Food & General Trade, the Court held that
seasonal workers who have worked for one season only may not be considered
regular employees. Similarly, in Mercado, Sr. v. NLRC,it was held that when
seasonal employees are free to contract their services with other farm owners,
then the former are not regular employees.
For regular employees to be considered as such, the primary standard used is
the reasonable connection between the particular activity they perform and the
usual trade or business of the employer. This test has been explained thoroughly in
De Leon v. NLRC,viz:
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.

A reading of the records reveals that the deceased was indeed a farm
worker who was in the regular employ of petitioner. From year to year, starting
January 1983 up until his death, the deceased had been working on petitioners land by
harvesting abaca and coconut, processing copra, and clearing weeds. His employment
was continuous in the sense that it was done for more than one harvesting season.
Moreover, no amount of reasoning could detract from the fact that these tasks were
necessary or desirable in the usual business of petitioner.
The other tasks allegedly done by the deceased outside his usual farm work only
bolster the existence of an employer-employee relationship. As found by the SSC, the
deceased was a construction worker in the building and a helper in the bakery, grocery,

hardware, and piggery all owned by petitioner.This fact only proves that even during
the off season, the deceased was still in the employ of petitioner.
The most telling indicia of this relationship is the Compromise Agreement
executed by petitioner and private respondent. Petitioner entered into the
agreement with full knowledge that he was described as the employer of the
deceased.

Pakyaw workers are regular employees,provided they are subject to the control of
petitioner.
Pakyaw workers are considered employees for as long as their employers exercise
control over them. In Legend Hotel Manila v. Realuyo,the Court held that "the power of
the employer to control the work of the employee is considered the most
significant determinant of the existence of an employer-employee relationship.
This is the so-called control test and is premised on whether the person for whom
the services are performed reserves the right to control both the end achieved
and the manner and means used to achieve that end." It should be remembered that
the control test merely calls for the existence of the right to control, and not necessarily
the exercise thereof. It is not essential that the employer actually supervises the
performance of duties by the employee. It is enough that the former has a right to wield
the power.
In this case, we agree with the CA that petitioner wielded control over the
deceased in the discharge of his functions. Being the owner of the farm on which the
latter worked, petitioner on his own or through his overseer necessarily had the right
to review the quality of work produced by his laborers.It matters not whether the
deceased conducted his work inside petitioners farm or not because petitioner retained
the right to control him in his work, and in fact exercised it through his farm manager
Amado Gacelo. The latter himself testified that petitioner had hired the deceased as one
of the pakyaw workers whose salaries were derived from the gross proceeds of the
harvest.
Summary Notes:
Jurisprudence has identified the three types of employees in Article 280 of the Labor
Code:
(1) regular employees ;
(2) project employees ; and
(3) casual employees.

GR: Farm workers may be considered regular seasonal employees.

EXC:
1. Seasonal workers who have worked for one season only may not be considered
regular employees. (Hacienda Fatima v. National Federation of Sugarcane
Workers-Food & General Trade)
2. When seasonal employees are free to contract their services with other farm
owners, then the former are not regular employees. (Mercado, Sr. v. NLRC)

TEST (regular employment): The primary standard used is the reasonable

connection between the particular activity they perform and 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. (De Leon v. NLRC)

Regular seasonal employees are those called to work from time to time. 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. They are in regular employment because of the nature of their job,and
not because of the length of time they have worked.

IV.A.2.e

Art. 280, Labor Code

Book VI, Rule I, Sec. 5, b, Implementing Rules (Labor Code)
Tan v. Lagrama, G.R. No. 151228, August 15, 2002- 12. RIVERA,
CLIFFORD

G.R. No. 151228. August 15, 2002.*

12.ROLANDO Y. TAN, petitioner, vs. LEOVIGILDO LAGRAMA and THE
HONORABLE COURT OF APPEALS,

respondents.

Doctrine: The primary standard for determining regular employment is the

reasonable connection between the particular activity performed by the employee
in relation to the usual trade or business of the employer.The primary standard
for determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or
business of the employer. In this case, there is such a connection between the
job of Lagrama painting billboards and murals and the business of petitioner. To
let the people know what movie was to be shown in a movie theater requires
billboards. Petitioner in fact admits that the billboards are important to his
business.
Facts: Petitioner Rolando Tan is the president of Supreme Theater Corporation and the
general manager of Crown and Empire Theaters in Butuan City. Private respondent
Leovigildo Lagrama is a painter, making ad billboards and murals for the motion pictures
shown at the Empress, Supreme, and Crown Theaters for more than 10 years, from
September 1, 1988 to October 17, 1998.
On October 17, 1998, private respondent Lagrama was summoned by Tan and
upbraided: Nangihi na naman ka sulod sa imong drawinganan. When Lagrama asked
what Tan was saying, Tan told him, Ayaw daghang estorya. Dili ko gusto nga modrawing ka pa. Guikan karon, wala nay drawing. Gawas. Lagrama denied the charge,
and if it were true, such was justa minor infraction to warrant his dismmissal.However,
everytime he spoke, Tan shoutedGawas (Get out), leaving him with no other choice
but to leave the premises.
Lagrama filed a case for illegal dismissal. Petitioner Tan denied that Lagrama was his
employee. He asserted that Lagrama was an independent contractor who did his work
according to his methods, while he (petitioner) was only interested in the result thereof.
He cited the admission of Lagrama during the conferences before the Labor Arbiter that
he was paid on a fixed piece-work basis, i.e., that he was paid for every painting turned
out as ad billboard or mural for the pictures shown in the three theaters, on the basis of
a no mural/billboard drawn, no pay policy.
Issues:

1. WON there is EE-ER relationship?;

2. Was he illegally dismissed?

Ruling:
1. Yes (discussion on EE-ER relationship is not so relevant to the current
topic you may refer to case digest for week 4)
2. Yes. Lagrama had been employed by petitioner since 1988. Under the law,
therefore, he is deemed a regular employee and is thus entitled to security of tenure, as
provided in Art. 279 of Labor Code:
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.
This Court has held that if the employee has been performing the job for at least one
year, even if not continuously but intermittently, the repeated and continuing need for its
performance is sufficient evidence of the necessity, if not indispensability, of that activity
to the business of his employer. Hence, the employment is also considered regular,
although with respect only to such activity, and while such activity exists.
The primary standard for determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade
or business of the employer.19 In this case, there is such a connection between the job
of Lagrama painting billboards and murals and the business of petitioner. To let the
people know what movie was to be shown in a movie theater requires billboards.
Petitioner in fact admits that the billboards are important to his business.

IV.A.2.f

Fuji Television v. Espiritu, G.R. No. 204944-45, December

3, 2014 13. ROJAS, KEISHA
ColegiodelSantisimo v. Rojo, G.R. No. 170388,
September 4, 2013-14. SANJORJO, MICHELLE