THIRD DIVISION

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

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID,

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

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

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

WHEREFORE, judgment is hereby rendered dismissing the above-mentioned

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

The Facts

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

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
Employment Contract for Handicapped Workers. (pp. 68 & 69, Records) The full text
of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented herein
by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter
referred to as the BANK);
- and ________________, ________________ years old, of legal age, _____________, and
residing at __________________ (hereinafter referred to as the (EMPLOYEE).
WITNESSETH: That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a
need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
welfare and make them productive, self-reliant and useful citizens to enable them to
fully integrate in the mainstream of society;

WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s] been
approached by some civic-minded citizens and authorized government agencies
[regarding] the possibility of hiring handicapped workers for these positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]
recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and in
compliance with Article 80 of the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK,
as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a
counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after which the
BANK shall determine whether or not he/she should be allowed to finish the
remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,
subject to adjustment in the sole judgment of the BANK, payable every 15 and end of
the month.
th

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week,
from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be
required to perform overtime work as circumstance may warrant, for which overtime
work he/she [shall] be paid an additional compensation of 125% of his daily rate if

performed during ordinary days and 130% if performed during Saturday or [a] rest
day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13 month pay based on his basic daily wage.
th

ii. Five (5) days incentive leave.

iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the
BANK Rules and Regulations and Policies, and to conduct himself/herself in a
manner expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a
special employment program of the BANK, for which reason the standard hiring
requirements of the BANK were not applied in his/her case. Consequently, the
EMPLOYEE acknowledges and accepts the fact that the terms and conditions of the
employment generally observed by the BANK with respect to the BANKs regular
employee are not applicable to the EMPLOYEE, and that therefore, the terms and
conditions of the EMPLOYEEs employment with the BANK shall be governed solely
and exclusively by this Contract and by the applicable rules and regulations that the
Department of Labor and Employment may issue in connection with the employment
of disabled and handicapped workers. More specifically, the EMPLOYEE hereby
acknowledges that the provisions of Book Six of the Labor Code of the Philippines as
amended, particularly on regulation of employment and separation pay are not
applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from ____ to
____ unless earlier terminated by the BANK for any just or reasonable cause. Any
continuation or extension of this Contract shall be in writing and therefore this
Contract will automatically expire at the end of its terms unless renewed in writing by
the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
____ day of _________________, ____________ at Intramuros, Manila, Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one
(21). Their employment[s] were renewed every six months such that by the time this
case arose, there were fifty-six (56) deaf-mutes who were employed by respondent

under the said employment agreement. The last one was Thelma Malindoy who was
employed in 1992 and whose contract expired on July 1993.
xxxxxxxxx

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

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93
2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94
3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93
4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94

5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94

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

27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93

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

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

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

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

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

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

Respondent Far East Bank and Trust Company argues that a review of the findings of facts
of the NLRC is not allowed in a petition for certiorari. Specifically, it maintains that the Court
cannot pass upon the findings of public respondents that petitioners were not regular employees.

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

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

ART. 80. Employment agreement. Any employer who employs handicapped workers
shall enter into an employment agreement with them, which agreement shall include:

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

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

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

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

ART. 280. Regular and Casual Employment. -- The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at

the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC,[14] in which
this Court held:

The primary standard, therefore, of determining regular employment is the reasonable

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

entitled to back wages and reinstatement without loss of seniority rights and other privileges.
[18]
Considering the allegation of respondent that the job of money sorting is no longer available
because it has been assigned back to the tellers to whom it originally belonged, [19] petitioners are
hereby awarded separation pay in lieu of reinstatement.[20]
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the Brent Ruling

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

Respondent argues that petitioners were merely accommodated employees. This fact does
not change the nature of their employment. As earlier noted, an employee is regular because of

the nature of work and the length of service, not because of the mode or even the reason for
hiring them.
Equally unavailing are private respondents arguments that it did not go out of its way to
recruit petitioners, and that its plantilla did not contain their positions. In L. T. Datu v. NLRC,
[25]
the Court held that the determination of whether employment is casual or regular does not
depend on the will or word of the employer, and the procedure of hiring x x x but on the nature
of the activities performed by the employee, and to some extent, the length of performance and
its continued existence.
Private respondent argues that the petitioners were informed from the start that they could
not become regular employees. In fact, the bank adds, they agreed with the stipulation in the
contract regarding this point. Still, we are not persuaded. The well-settled rule is that the
character of employment is determined not by stipulations in the contract, but by the nature of
the work performed.[26] Otherwise, no employee can become regular by the simple expedient of
incorporating this condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC:[27]

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

At this juncture, the leading case of Brent School, Inc. v. Zamora proves
instructive. As reaffirmed in subsequent cases, this Court has upheld the legality of
fixed-term employment. It ruled that the decisive determinant in term employment
should not be the activities that the employee is called upon to perform but the day
certain agreed upon the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.
In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of
the working class, but also the concern of the State for the plight of the disabled. The noble
objectives of Magna Carta for Disabled Persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons, disabled or not. In
the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work. The
eloquent proof of this statement is the repeated renewal of their employment contracts. Why then
should they be dismissed, simply because they are physically impaired? The Court believes, that,

after showing their fitness for the work assigned to them, they should be treated and granted the
same rights like any other regular employees.
In this light, we note the Office of the Solicitor Generals prayer joining the petitioners cause.
[28]

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995
Decision
and
the
August
4,
1995
Resolution
of
the
NLRC
are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is
hereby ORDERED to pay back wages and separation pay to each of the following twenty-seven
(27) petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P.
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P.
Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino
Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B.
Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie
Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is
hereby directed to compute the exact amount due each of said employees, pursuant to existing
laws and regulations, within fifteen days from the finality of this Decision. No costs.
SO ORDERED.
Romero, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

SECOND DIVISION
CENTURY CANNING
CORPORATION,
Petitioner,

- versus -

COURT OF APPEALS and

GLORIA C. PALAD,
Respondents.

G.R. No. 152894

Present:
QUISUMBING, J.,
Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

Promulgated:
August 17, 2007

x--------------------------------------------------x
DECISION
CARPIO, J.:
The Case
This is a petition for review[1] of the Decision[2] dated 12 November 2001 and the
Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.
The Facts
On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad
(Palad) as fish cleaner at petitioners tuna and sardines factory. Palad signed on 17
July 1997 an apprenticeship agreement [3] with petitioner. Palad received an
apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted its

apprenticeship program for approval to the Technical Education and Skills

Development Authority (TESDA) of the Department of Labor and Employment
(DOLE). On 26 September 1997, the TESDA approved petitioners apprenticeship
program.[4]
According to petitioner, a performance evaluation was conducted on 15 November
1997, where petitioner gave Palad a rating of N.I. or needs improvement since she
scored only27.75% based on a 100% performance indicator. Furthermore,
according to the performance evaluation, Palad incurred numerous tardiness and
absences. As a consequence, petitioner issued a termination notice [5] dated 22
November 1997 to Palad, informing her of her termination effective at the close of
business hours of 28 November 1997.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and
non-payment of pro-rated 13th month pay for the year 1997.
On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit
but ordered petitioner to pay Palad her last salary and her pro-rated 13 th month pay.
The dispositive portion of the Labor Arbiters decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
declaring that the complaint for illegal dismissal filed by the complainant
against the respondents in the above-entitled case should be, as it is
hereby DISMISSED for lack of merit. However, the respondents are
hereby ordered to pay the complainant the amount of ONE THOUSAND
SIX HUNDRED THIRTY-TWO PESOS (P1,632.00), representing her
last salary and the amount of SEVEN THOUSAND TWO HUNDRED
TWENTY EIGHT (P7,228.00) PESOS representing her prorated
13th month pay.
All other issues are likewise dismissed.
SO ORDERED.[6]

On appeal, the National Labor Relations Commission (NLRC) affirmed with

modification the Labor Arbiters decision, thus:

WHEREFORE, premises considered, the decision of the Arbiter dated 25

February 1999 is hereby MODIFIED in that, in addition, respondents are
ordered to pay complainants backwages for two (2) months in the
amount of P7,176.00 (P138.75 x 26 x 2 mos.). All other dispositions of
the Arbiter as appearing in the dispositive portion of his decision are
AFFIRMED.
SO ORDERED.[7]

Upon denial of Palads motion for reconsideration, Palad filed a special civil action
for certiorari with the Court of Appeals. On 12 November 2001, the Court of
Appeals rendered a decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the questioned decision of the
NLRC is hereby SET ASIDE and a new one entered, to wit:
(a) finding the dismissal of petitioner to be illegal;
(b) ordering private respondent to pay petitioner her underpayment
in wages;
(c) ordering private respondent to reinstate petitioner to her former
position without loss of seniority rights and to pay her
full backwages computed from the time compensation was
withheld from her up to the time of her reinstatement;
(d) ordering private respondent to pay petitioner attorneys fees
equivalent to ten (10%) per cent of the monetary award herein;
and
(e) ordering private respondent to pay the costs of the suit.
SO ORDERED.[8]

The Ruling of the Court of Appeals

The Court of Appeals held that the apprenticeship agreement which Palad signed
was not valid and binding because it was executed more than two months before

the TESDA approved petitioners apprenticeship program. The Court of Appeals

cited Nitto Enterprises v. National Labor Relations Commission,[9] where it was
held that prior approval by the DOLE of the proposed apprenticeship program is a
condition sine qua non before an apprenticeship agreement can be validly entered
into.
The Court of Appeals also held that petitioner illegally dismissed Palad. The Court
of Appeals ruled that petitioner failed to show that Palad was properly apprised of
the required standard of performance. The Court of Appeals likewise held that
Palad was not afforded due process because petitioner did not comply with the
twin requirements of notice and hearing.

The Issues
Petitioner raises the following issues:

1. WHETHER THE COURT OF APPEALS COMMITTED

REVERSIBLE ERROR IN HOLDING THAT PRIVATE
RESPONDENT WAS NOT AN APPRENTICE; and

2. WHETHER THE COURT OF APPEALS COMMITTED

REVERSIBLE ERROR IN HOLDING THAT PETITIONER
HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A
VALID CAUSE IN TERMINATING THE SERVICE OF
PRIVATE RESPONDENT.[10]

The Ruling of the Court

The petition is without merit.
Registration and Approval by the TESDA of Apprenticeship Program Required
Before Hiring of Apprentices

The Labor Code defines an apprentice as a worker who is covered by a written

apprenticeship agreement with an employer.[11] One of the objectives of Title II
(Training and Employment of Special Workers) of the Labor Code is to establish
apprenticeship standards for the protection of apprentices. [12] In line with this
objective, Articles 60 and 61 of the Labor Code provide:
ART. 60. Employment of apprentices. Only employers in the highly
technical industries may employ apprentices and only in
apprenticeable occupations approved by the Minister of Labor and
Employment. (Emphasis supplied)
ART. 61. Contents of apprenticeship agreements. Apprenticeship
agreements, including the wage rates of apprentices, shall conform to the
rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements
providing for wage rates below the legal minimum wage, which in no
case shall start below 75 percent of the applicable minimum wage,
may be entered into only in accordance with apprenticeship
programs duly approved by the Minister of Labor and Employment.
The Ministry shall develop standard model programs of apprenticeship.
(Emphasis supplied)

In Nitto Enterprises v. National Labor Relations Commission,[13] the Court cited

Article 61 of the Labor Code and held that an apprenticeship program should first
be approved by the DOLE before an apprentice may be hired, otherwise the person
hired will be considered a regular employee. The Court held:
In the case at bench, the apprenticeship agreement between petitioner
and private respondent was executed on May 28, 1990 allegedly
employing the latter as an apprentice in the trade of care maker/molder.
On the same date, an apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment. However,
the apprenticeship agreement was filed only on June 7, 1990.
Notwithstanding the absence of approval by the Department of Labor
and Employment, the apprenticeship agreement was enforced the day it
was signed.
Based on the evidence before us, petitioner did not comply with the
requirements of the law. It is mandated that apprenticeship

agreements entered into by the employer and apprentice shall be

entered only in accordance with the apprenticeship program duly
approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the
proposed apprenticeship program is, therefore, a condition sine qua
non before an apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the
Department of Labor and Employment is a preliminary step towards its
final approval and does not instantaneously give rise to an employerapprentice relationship.
Article 57 of the Labor Code provides that the State aims to establish a
national apprenticeship program through the participation of employers,
workers and government and non-government agencies and to establish
apprenticeship standards for the protection of apprentices. To translate
such objectives into existence, prior approval of the DOLE to any
apprenticeship program has to be secured as a condition sine qua
non before any such apprenticeship agreement can be fully enforced. The
role of the DOLE in apprenticeship programs and agreements cannot be
debased.
Hence, since the apprenticeship agreement between petitioner and
private respondent has no force and effect in the absence of a valid
apprenticeship program duly approved by the DOLE, private respondents
assertion that he was hired not as an apprentice but as a delivery boy
(kargador or pahinante) deserves credence. He should rightly be
considered as a regular employee of petitioner as defined by Article 280
of the Labor Code x x x. (Emphasis supplied)[14]

Republic Act No. 7796[15] (RA 7796), which created the TESDA, has transferred
the authority over apprenticeship programs from the Bureau of Local Employment
of the DOLE to the TESDA.[16] RA 7796 emphasizes TESDAs approval of the
apprenticeship program as a pre-requisite for the hiring of apprentices. Such intent
is clear under Section 4 of RA 7796:
SEC. 4. Definition of Terms. As used in this Act:
xxx

j) Apprenticeship training within employment with compulsory related

theoretical instructions involving a contract between an apprentice
and an employer on an approved apprenticeable occupation;

k) Apprentice is a person undergoing training for an approved

apprenticeable occupation during an established period assured by an
apprenticeship agreement;
l) Apprentice Agreement is a contract wherein a prospective employer
binds himself to train the apprentice who in turn accepts the terms
of training for a recognized apprenticeable occupation emphasizing
the rights, duties and responsibilities of each party;
m) Apprenticeable Occupation is an occupation officially endorsed by
a tripartite body and approved for apprenticeship by the Authority
[TESDA]; (Emphasis supplied)

In this case, the apprenticeship agreement was entered into between the parties
before petitioner filed its apprenticeship program with the TESDA for approval.
Petitioner and Palad executed the apprenticeship agreement on 17 July 1997
wherein it was stated that the training would start on 17 July 1997 and would end
approximately in December 1997.[17] On 25 July 1997, petitioner submitted for
approval its apprenticeship program, which the TESDA subsequently approved on
26 September 1997.[18] Clearly, the apprenticeship agreement was enforced even
before the TESDA approved petitioners apprenticeship program. Thus, the
apprenticeship agreement is void because it lacked prior approval from the
TESDA.
The TESDAs approval of the employers apprenticeship program is required before
the employer is allowed to hire apprentices. Prior approval from the TESDA is
necessary to ensure that only employers in the highly technical industries may
employ apprentices and only in apprenticeable occupations.[19] Thus, under RA

7796, employers can only hire apprentices for apprenticeable occupations which
must be officially endorsed by a tripartite body and approved for apprenticeship by
the TESDA. This is to ensure the protection of apprentices and to obviate possible
abuses by prospective employers who may want to take advantage of the lower
wage rates for apprentices and circumvent the right of the employees to be secure
in their employment.
The requisite TESDA approval of the apprenticeship program prior to the hiring of
apprentices was further emphasized by the DOLE with the issuance of Department
Order No. 68-04 on 18 August 2004. Department Order No. 68-04, which provides
the guidelines in the implementation of the Apprenticeship and Employment
Program of the government, specifically states that no enterprise shall be allowed
to hire apprentices unless its apprenticeship program is registered and
approved by TESDA.[20]

Since Palad is not considered an apprentice because the apprenticeship agreement

was enforced before the TESDAs approval of petitioners apprenticeship program,
Palad is deemed a regular employee performing the job of a fish cleaner. Clearly,
the job of a fish cleaner is necessary in petitioners business as a tuna and sardines
factory. Under Article 280[21] of the Labor Code, an employment is deemed 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.
Illegal Termination of Palad
We shall now resolve whether petitioner illegally dismissed Palad.
Under Article 279[22] of the Labor Code, an employer may terminate the services of
an employee for just causes[23] or for authorized causes.[24] Furthermore, under
Article 277(b)[25] of the Labor Code, the employer must send the employee who is
about to be terminated, a written notice stating the causes for termination and must
give the employee the opportunity to be heard and to defend himself. Thus, to
constitute valid dismissal from employment, two requisites must concur: (1) the
dismissal must be for a just or authorized cause; and (2) the employee must be
afforded an opportunity to be heard and to defend himself.[26]

In this case, the Labor Arbiter held that petitioner terminated Palad for habitual
absenteeism and poor efficiency of performance. Under Section 25, Rule VI, Book
II of the Implementing Rules of the Labor Code, habitual absenteeism and poor
efficiency of performance are among the valid causes for which the employer may
terminate the apprenticeship agreement after the probationary period.
However, the NLRC reversed the finding of the Labor Arbiter on the issue of the
legality of Palads termination:
As to the validity of complainants dismissal in her status as an
apprentice, suffice to state that the findings of the Arbiter that
complainant was dismissed due to failure to meet the standards is
nebulous. What clearly appears is that complainant already passed the
probationary status of the apprenticeship agreement of 200 hours at the
time she was terminated on 28 November 1997 which was already the
fourth month of the apprenticeship period of 1000 hours. As such, under
the Code, she can only be dismissed for cause, in this case, for poor
efficiency of performance on the job or in the classroom for a prolonged
period despite warnings duly given to the apprentice.
We noted that no clear and sufficient evidence exist to warrant her
dismissal as an apprentice during the agreed period. Besides the
absence of any written warnings given to complainant reminding her
of poor performance, respondents evidence in this respect consisted
of an indecipherable or unauthenticated xerox of the performance
evaluation allegedly conducted on complainant. This is of doubtful
authenticity and/or credibility, being not only incomplete in the sense
that appearing thereon is a signature (not that of complainant) side
by side with a date indicated as 1/16/98. From the looks of it, this
signature is close to and appertains to the typewritten position of
Division/Department Head, which is below the signature of
complainants immediate superior who made the evaluation
indicated as 11-15-97.
The only conclusion We can infer is that this evaluation was made
belatedly, specifically, after the filing of the case and during the
progress thereof in the Arbitral level, as shown that nothing thereon
indicate that complainant was notified of the results. Its authenticity
therefor, is a big question mark, and hence lacks any
credibility. Evidence, to be admissible in administrative proceedings,

must at least have a modicum of authenticity. This, respondents failed

to comply with. As such, complainant is entitled to the payment of her
wages for the remaining two (2) months of her apprenticeship
agreement.[27] (Emphasis supplied)

Indeed, it appears that the Labor Arbiters conclusion that petitioner validly
terminated Palad was based mainly on the performance evaluation allegedly
conducted by petitioner. However, Palad alleges that she had no knowledge of the
performance evaluation conducted and that she was not even informed of the result
of the alleged performance evaluation. Palad also claims she did not receive a
notice of dismissal, nor was she given the chance to explain. According to
petitioner, Palad did not receive the termination notice because Palad allegedly
stopped reporting for work after being informed of the result of the evaluation.
Under Article 227 of the Labor Code, the employer has the burden of proving that
the termination was for a valid or authorized cause.[28] Petitioner failed to
substantiate its claim that Palad was terminated for valid reasons. In fact, the
NLRC found that petitioner failed to prove the authenticity of the performance
evaluation which petitioner claims to have conducted on Palad, where Palad
received a performance rating of only 27.75%. Petitioner merely relies on the
performance evaluation to prove Palads inefficiency. It was likewise not shown
that petitioner ever apprised Palad of the performance standards set by the
company. When the alleged valid cause for the termination of employment is not
clearly proven, as in this case, the law considers the matter a case of illegal
dismissal.[29]
Furthermore, Palad was not accorded due process. Even if petitioner did conduct a
performance evaluation on Palad, petitioner failed to warn Palad of her alleged
poor performance. In fact, Palad denies any knowledge of the performance
evaluation conducted and of the result thereof. Petitioner likewise admits that
Palad did not receive the notice of termination [30] because Palad allegedly stopped
reporting for work. The records are bereft of evidence to show that petitioner ever

gave Palad the opportunity to explain and defend herself. Clearly, the two
requisites for a valid dismissal are lacking in this case.
WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the
Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.
SO ORDERED.