APPRENTICESHIP AGREEMENT

G.R. No. 114337 September 29, 1995

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

KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision 1 rendered by public respondent National Labor Relations Commission, which reversed the
decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired
Roberto Capili sometime in May 1990 as an apprentice machinist, molder and core maker as
evidenced by an apprenticeship agreement 2 for a period of six (6) months from May 28, 1990 to
November 28, 1990 with a daily wage rate of P66.75 which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he
was working on, accidentally hit and injured the leg of an office secretary who was treated at a
nearby hospital.
Later that same day, after office hours, private respondent entered a workshop within the office
premises which was not his work station. There, he operated one of the power press machines
without authority and in the process injured his left thumb. Petitioner spent the amount of P1,023.04
to cover the medication of private respondent.
The following day, Roberto Capili was asked to resign in a letter 3 which reads:
August
2, 1990
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang
paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng
kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya
ay pumasok sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at
kinalikot ang makina at nadisgrasya niya ang kanyang sariling kamay.
Nakagastos ang kompanya ng mga sumusunod:
Emergency and doctor fee P715.00
Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang

matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng
Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang
kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon,
kasama ng kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.

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

pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.) Roberto
Capili
Roberto Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for
and in consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration
Branch, National Capital Region a complaint for illegal dismissal and payment of other monetary
benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit. The dispositive portion of the
ruling reads:
WHEREFORE, premises considered, the termination is valid and for cause, and the
money claims dismissed for lack of merit.
The respondent however is ordered to pay the complainant the amount of P500.00
as financial assistance.
SO ORDERED. 5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian
was valid. First, private respondent who was hired as an apprentice violated the terms of their
agreement when he acted with gross negligence resulting in the injury not only to himself but also to
his fellow worker. Second, private respondent had shown that "he does not have the proper attitude
in employment particularly the handling of machines without authority and proper training. 6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision
of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby
directed to reinstate complainant to his work last performed with backwages

computed from the time his wages were withheld up to the time he is actually
reinstated. The Arbiter of origin is hereby directed to further hear complainant's
money claims and to dispose them on the basis of law and evidence obtaining.
SO ORDERED. 7
The NLRC declared that private respondent was a regular employee of petitioner by
ruling thus:

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

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

II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY
PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE
OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be
considered an apprentice since no apprenticeship program had yet been filed and approved at the
time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement already established
an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. Apprenticeship agreements, including the
main rates of apprentices, shall conform to the rules issued by the Minister of Labor
and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75% per cent of the applicable minimum wage,
may be entered into only in accordance with apprenticeship program duly approved
by the Minister of Labor and Employment. The Ministry shall develop standard model
programs of apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care
maker/molder." On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship Agreement
was filed only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor
and Employment, the apprenticeship agreement was enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the Minister of Labor
and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship program
is, therefore, a condition sine quo non before an apprenticeship agreement can be validly entered
into.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise to
an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government

agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can be fully
enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as a regular employee of petitioner
as defined by Article 280 of the Labor Code:
Art. 280. Regular and Casual Employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights of workers and promote their
welfare." 9
Petitioner further argues that, there is a valid cause for the dismissal of private respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements of due process,
substantive and procedural, must be complied with, before valid dismissal exists. 10 Without which, the
dismissal becomes void.
The twin requirements of notice and hearing constitute the essential elements of due process. This
simply means that the employer shall afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must accord the employee to
enable him to prepare adequately for his defense including legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
The law requires that the employer must furnish the worker sought to be dismissed
with two (2) written notices before termination of employee can be legally effected:
(1) notice which apprises the employee of the particular acts or omissions for which
his dismissal is sought; and (2) the subsequent notice which informs the employee of
the employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V,
Rules and Regulations Implementing the Labor Code as amended). Failure to
comply with the requirements taints the dismissal with illegality. This procedure is

mandatory, in the absence of which, any judgment reached by management is void

and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp.
vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days
after he was made to sign a Quitclaim, a clear indication that such resignation was not voluntary and
deliberate.
Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador"
or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation
letter and quitclaim without explaining to him the contents thereof. Petitioner made it clear to him that
anyway, he did not have a choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's
alleged resignation and subsequent execution of a Quitclaim and Release. A judicious examination
of both events belies any spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent National Labor
Relations Commission, the appealed decision is hereby AFFIRMED.
SO ORDERED.
G.R. No. 152894

August 17, 2007

CENTURY CANNING CORPORATION, Petitioner,

vs.
COURT OF APPEALS and GLORIA C. PALAD, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Decision2 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
agreement3 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 only 27.75% 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

notice5 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 prorated 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 13th 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 ofP7,176.00 (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 employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can be fully
enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
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. 779615 (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 acontract 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.
1avvphil

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 28021 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 27922 of the Labor Code, an employer may terminate the services of an employee for
just causes23 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 termination30 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.

APPRENTICES WITHOUT COMPENSATION

G.R. No. 75112 August 17, 1992
FILAMER CHRISTIAN INSTITUTE, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as
Judge of the Regional Trial Court, Branch XIV, Roxas City and POTENCIANO KAPUNAN,
SR., respondents.
Bedona & Bedona Law Office for petitioner.
Rhodora G. Kapunan for private respondents.

GUTIERREZ, JR., J.:

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision
rendered by this Court on October 16, 1990 (Filamer Christian Institute v. Court of Appeals, 190
SCRA 477) reviewing the appellate court's conclusion that there exists an employer-employee
relationship between the petitioner and its co-defendant Funtecha. The Court ruled that the petitioner
is not liable for the injuries caused by Funtecha on the grounds that the latter was not an authorized
driver for whose acts the petitioner shall be directly and primarily answerable, and that Funtecha was
merely a working scholar who, under Section 14, Rule X, Book III of the Rules and Regulations
Implementing the Labor Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present case call for the
application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of the
petitioner. The private respondents maintain that under Article 2180 an injured party shall have
recourse against the servant as well as the petitioner for whom, at the time of the incident, the
servant was performing an act in furtherance of the interest and for the benefit of the petitioner.

Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge of the
school authorities.
After a re-examination of the laws relevant to the facts found by the trial court and the appellate
court, the Court reconsiders its decision. We reinstate the Court of Appeals' decision penned by the
late Justice Desiderio Jurado and concurred in by Justices Jose C. Campos, Jr. and Serafin E.
Camilon. Applying Civil Code provisions, the appellate court affirmed the trial court decision which
ordered the payment of the P20,000.00 liability in the Zenith Insurance Corporation policy,
P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and P3,000.00 attorney's
fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of
petitioner Filamer. He was, in relation to the school, an employee even if he was assigned to clean
the school premises for only two (2) hours in the morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to
take over the vehicle while the latter was on his way home one late afternoon. It is significant to note
that the place where Allan lives is also the house of his father, the school president, Agustin Masa.
Moreover, it is also the house where Funtecha was allowed free board while he was a student of
Filamer Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp
dangerous curb, and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79) According to
Allan's testimony, a fast moving truck with glaring lights nearly hit them so that they had to swerve to
the right to avoid a collision. Upon swerving, they heard a sound as if something had bumped
against the vehicle, but they did not stop to check. Actually, the Pinoy jeep swerved towards the
pedestrian, Potenciano Kapunan who was walking in his lane in the direction against vehicular
traffic, and hit him. Allan affirmed that Funtecha followed his advise to swerve to the right. (Ibid., p.
79) At the time of the incident (6:30 P.M.) in Roxas City, the jeep had only one functioning headlight.
Allan testified that he was the driver and at the same time a security guard of the petitioner-school.
He further said that there was no specific time for him to be off-duty and that after driving the
students home at 5:00 in the afternoon, he still had to go back to school and then drive home using
the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan and Funtecha
reside is an act in furtherance of the interest of the petitioner-school. Allan's job demands that he
drive home the school jeep so he can use it to fetch students in the morning of the next school day.
It is indubitable under the circumstances that the school president had knowledge that the jeep was
routinely driven home for the said purpose. Moreover, it is not improbable that the school president
also had knowledge of Funtecha's possession of a student driver's license and his desire to undergo
driving lessons during the time that he was not in his classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha
definitely was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for
a "frolic of his own" but ultimately, for the service for which the jeep was intended by the petitioner
school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932]; See also
Association of Baptists for World Evangelism, Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA 618
[1983]). Therefore, the Court is constrained to conclude that the act of Funtecha in taking over the
steering wheel was one done for and in behalf of his employer for which act the petitioner-school
cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties.

The clause "within the scope of their assigned tasks" for purposes of raising the presumption of
liability of an employer, includes any act done by an employee, in furtherance of the interests of the
employer or for the account of the employer at the time of the infliction of the injury or damage.
(Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if somehow, the employee driving the
vehicle derived some benefit from the act, the existence of a presumptive liability of the employer is
determined by answering the question of whether or not the servant was at the time of the accident
performing any act in furtherance of his master's business. (Kohlman v. Hyland, 210 NW 643, 50
ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner
anchors its defense, was promulgated by the Secretary of Labor and Employment only for the
purpose of administering and enforcing the provisions of the Labor Code on conditions of
employment. Particularly, Rule X of Book III provides guidelines on the manner by which the powers
of the Labor Secretary shall be exercised; on what records should be kept; maintained and
preserved; on payroll; and on the exclusion of working scholars from, and inclusion of resident
physicians in the employment coverage as far as compliance with the substantive labor provisions
on working conditions, rest periods, and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The
Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is not
the decisive law in a civil suit for damages instituted by an injured person during a vehicular accident
against a working student of a school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for injury
caused by the patently negligent acts of a person, against both doer-employee and his employer.
Hence, the reliance on the implementing rule on labor to disregard the primary liability of an
employer under Article 2180 of the Civil Code is misplaced. An implementing rule on labor cannot be
used by an employer as a shield to avoid liability under the substantive provisions of the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual obligation
arising from the negligence or reckless imprudence of a person "whose acts or omissions are
imputable, by a legal fiction, to other(s) who are in a position to exercise an absolute or limited
control over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a
driver's position in order that the petitioner may be held responsible for his grossly negligent act, it
being sufficient that the act of driving at the time of the incident was for the benefit of the petitioner.
Hence, the fact that Funtecha was not the school driver or was not acting within the scope of his
janitorial duties does not relieve the petitioner of the burden of rebutting the presumption juris
tantum that there was negligence on its part either in the selection of a servant or employee, or in
the supervision over him. The petitioner has failed to show proof of its having exercised the required
diligence of a good father of a family over its employees Funtecha and Allan.
The Court reiterates that supervision includes the formulation of suitable rules and regulations for the
guidance of its employees and the issuance of proper instructions intended for the protection of the
public and persons with whom the employer has relations through his employees. (Bahia v. Litonjua
and Leynes, supra, at p. 628; Phoenix Construction, v. Intermediate Appellate Court, 148 SCRA 353
[1987])
An employer is expected to impose upon its employees the necessary discipline called for in the
performance of any act indispensable to the business and beneficial to their employer.

In the present case, the petitioner has not shown that it has set forth such rules and guidelines as
would prohibit any one of its employees from taking control over its vehicles if one is not the official
driver or prohibiting the driver and son of the Filamer president from authorizing another employee to
drive the school vehicle. Furthermore, the petitioner has failed to prove that it had imposed sanctions
or warned its employees against the use of its vehicles by persons other than the driver.
The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled manner by
which Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772 [1918]). In the
absence of evidence that the petitioner had exercised the diligence of a good father of a family in the
supervision of its employees, the law imposes upon it the vicarious liability for acts or omissions of
its employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA 200 [1979];
Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v. Intermediate Appellate Court,
178 SCRA 331 [1989]; Pantranco North Express, Inc. v. Baesa, 179 SCRA 384 [1989]) The liability
of the employer is, under Article 2180, primary and solidary. However, the employer shall have
recourse against the negligent employee for whatever damages are paid to the heirs of the plaintiff.
It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party
defendant in the civil case for damages. This is quite understandable considering that as far as the
injured pedestrian, plaintiff Potenciano Kapunan, was concerned, it was Funtecha who was the one
driving the vehicle and presumably was one authorized by the school to drive. The plaintiff and his
heirs should not now be left to suffer without simultaneous recourse against the petitioner for the
consequent injury caused by a janitor doing a driving chore for the petitioner even for a short while.
For the purpose of recovering damages under the prevailing circumstances, it is enough that the
plaintiff and the private respondent heirs were able to establish the existence of employer-employee
relationship between Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an
act not for an independent purpose of his own but in furtherance of the business of his employer. A
position of responsibility on the part of the petitioner has thus been satisfactorily demonstrated.
WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby
GRANTED. The decision of the respondent appellate court affirming the trial court decision is
REINSTATED.
SO ORDERED.

EMPLOYMENT OF STUDENTS
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 and TIMOSA, petitioners,
vs.

NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST
COMPANY, respondents.

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 treatments is rooted not merely on
charity or accomodation, 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 arbiter's 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:

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 deafmutes, 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 15th and end of the month.
1wphi1.nt

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 13th month pay based
on his basic daily wage.
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
BANK's regular employee are not applicable to the EMPLOYEE, and
that therefore, the terms and conditions of the EMPLOYEE's
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 ofdisabled 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.
xxx xxx xxx
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 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 was adopted the special program to
help tide over a group of 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 sortes 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 dimissed, 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-Sep-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 CABUNDUCOS

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 B. 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. MARIA ISABEL B.CONCEPCION

West

6-Sep-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 . . . 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 Court's 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 employement 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 respondent 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 Employee?

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 respondent's 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.
1wphi1.nt

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 able-bodied person.
Section 5 of the Magna Carta provides:
Sec. 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 indispensibility
of that activity to the business. Hence, the employment is considered regular, but
only with respect to such activity, and while such activity exist.
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, 18 petitioners are hereby awarded separation pay in lieu
of reinstatement. 20
Because the other sixteen worked only for six months, they are not deemed regular employees and
hence not entitled to the same benefits.
Applicability of the
Brent Ruling
Respondent bank, citing Brent School v. Zamora 21 in which the Court upheld the validity of an
employment contract with a fixed term, argues that the parties entered into the contract on equal footing.
It adds that the petitioners had in fact an advantage, because they were backed by then DSWD Secretary
Mita Pardo de Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that the petitioners
were disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is
based on Article 80 of the Labor Code. But as noted earlier, petitioners proved themselves to
be qualified disabled persons who, under the Magna Carta for Disabled Persons, are entitled to
terms and conditions of employment enjoyed by qualified able-bodied individuals; hence, Article 80
does not apply because petitioners are qualified for their positions. The validation of the limit
imposed on their contracts, imposed by reason of their disability, was a glaring instance of the very
mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with public
interest. 22 Provisions of applicable statutes are deemed written into the contract, and the "parties are not

at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by
simply contracting with each other." 23 Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled Persons, which mandate
that petitioners must be treated as qualified able-bodied employees.

Respondent's 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 respondent's 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 . . . 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
Art. 280 was emplaced in our statute books to prevent the circumvention of the
employee's 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.
xxx xxx xxx
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 qualifiedpersons, 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 General's 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., Liliberh 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.
1wphi1.nt

SO ORDERED.