EMPLOYER RECOGNITION
Pangilinan v General Milling Corp
434 SCRA 159 (July 12, 2004)
Facts: The respondent General Milling Corporation is
a domestic corporation engaged in the production
and sale of livestock and poultry.It is, likewise, the
distributor of dressed chicken to various restaurants
and establishments nationwide. As such, it employs
hundreds of employees, some on a regular basis
and others on a casual basis, as emergency
workers.
The petitioners were employed by the respondent
on different dates as emergency workers at its
poultry plant in Cainta, Rizal, under separate
temporary/casual contracts of employment for a
period of five months. Most of them worked as
chicken dressers, while the others served as packers
or helpers. Upon the expiration of their respective
contracts, their services were terminated. They later
filed separate complaints for illegal dismissal and
non-payment of holiday pay, 13th month pay,
night-shift differential and service incentive leave
pay against the respondent before the Arbitration
Branch of the National Labor Relations Commission
The petitioners alleged that their work as chicken
dressers was necessary and desirable in the usual
business of the respondent, and added that
although they worked from 10:00 p.m. to 6:00 a.m.,
they were not paid night-shift differential. They
stressed that based on the nature of their work, they
were regular employees of the respondent; hence,
could not be dismissed from their employment
unless for just cause and after due notice. In support
thereof, the petitioners cited the decision of the
Honorable Labor Arbiter Perlita B. Velasco in NLRC
Case No. NCR-6-2168-86, entitled Estelita Jayme, et
al. vs. General Milling Corporation; and NLRC Case
No. NCR-9-3726-86, entitled Marilou Carino, et al. vs.
General Milling Corporation. They asserted that the
respondent GMC terminated their contract of
employment without just cause and due notice.
They further argued that the respondent could not
rely on the nomenclature of their employment as
temporary or casual.
On August 18, 1997, Labor Arbiter (LA) Voltaire A.
Balitaan rendered a decision in favor of the
petitioners declaring that they were regular
employees. Finding that the termination of their
employment was not based on any of the just
causes provided for in the Labor Code, the LA
declared that they were allegedly illegally
dismissed. The decretal portion of the decision
reads:
WHEREFORE, judgment is hereby rendered in these
cases, as follows:
1. Declaring respondent corporation
guilty of illegally dismissing complainants, except
Rosalina Basan and Filomena Lanting whose
complaints are hereby dismissed on ground of
prescription, and as a consequence therefor
ordering the said respondent corporation to
reinstate them to their former positions without loss
of seniority rights and other privileges and with full
backwages from the time they were illegally
dismissed in the aggregate amount of
P15,328,594.04;
2. Ordering respondent corporation to
pay the said complainants their 13th month pay,
holiday pay and service incentive leave pay in the
aggregate amount of P1,979,148.23;
3. Ordering respondent corporation to
pay said complainants the amount of P1,730,744.22
by way of attorneys fees, representing ten (10%)
percentum of the total judgment awards.
The case against individual respondent Medardo
Quiambao is hereby dismissed.
Issue: Whether or not respondents are regular
employees of GMC?
Ruling:
No, the petitioners were employees with a fixed
period, and, as such, were not regular employees.
Article 280 of the Labor Code comprehends three
kinds of employees: (a) regular employees or those
whose work is necessary or desirable to the usual
business of the employer; (b) project employees or
those whose employment has been fixed for a
specific project or undertaking the completion or
termination of which has been determined at the
time of the engagement of the employee or where
the work or services to be performed is seasonal in
nature and the employment is for the duration of
the season; and, (c) casual employees or those
who are neither regular nor project employee.
A regular employee is one who is engaged
to perform activities which are necessary and
desirable in the usual business or trade of the
employer as against those which are undertaken
for a specific project or are seasonal. There are two
separate instances whereby it can be determined
that an employment is regular: (1) if the particular
activity performed by the employee is necessary or
desirable in the usual business or trade of the
employer; and, (2) if the employee has been
performing the job for at least a year.
In the case of St. Theresas School of
Novaliches Foundation vs. NLRC,[43] we held that
Article 280 of the Labor Code does not proscribe or
prohibit an employment contract with a fixed
period. We furthered that it does not necessarily
follow that where the duties of the employee
consist of activities usually necessary or desirable in
the usual business of the employer, the parties are
forbidden from agreeing on a period of time for the
performance of such activities. There is thus nothing
essentially contradictory between a definite period
of employment and the nature of the employees
duties.
Indeed, in the leading case of Brent School
Inc. v. Zamora, we laid down the guideline before a
contract of employment may be held as valid, to
wit:
Page 1 of 5
 [S]tipulations in employment
contracts providing for term
employment or fixed period
employment are valid when the
period were agreed upon knowingly
and voluntarily by the parties without
force, duress or improper pressure,
being brought to bear upon the
employee and absent any other
circumstances vitiating his consent,
or where it satisfactorily appears that
the employer and employee dealt
with each other on more or less
equal terms with no moral
dominance whatever being
exercised by the former over the
latter.
An examination of the contracts entered
into by the petitioners showed that their
employment was limited to a fixed period, usually
five or six months, and did not go beyond such
period.
The records reveal that the stipulations in the
employment contracts were knowingly and
voluntarily agreed to by the petitioners without
force, duress or improper pressure, or any
circumstances that vitiated their consent. Similarly,
nothing therein shows that these contracts were
used as a subterfuge by the respondent GMC to
evade the provisions of Articles 279 and 280 of the
Labor Code.
The petitioners were hired as emergency
workers and assigned as chicken dressers, packers
and helpers at the Cainta Processing Plant. The
respondent GMC is a domestic corporation
engaged in the production and sale of livestock
and poultry, and is a distributor of dressed chicken.
While the petitioners employment as chicken
dressers is necessary and desirable in the usual
business of the respondent, they were employed on
a mere temporary basis, since their employment
was limited to a fixed period. As such, they cannot
be said to be regular employees, but are merely
contractual employees. Consequently, there was
no illegal dismissal when the petitioners services
were terminated by reason of the expiration of their
contracts.[47] Lack of notice of termination is of no
consequence, because when the contract
specifies the period of its duration, it terminates on
the expiration of such period. A contract for
employment for a definite period terminates by its
own term at the end of such period.[48]
In sum, we rule that the appeal was filed
within the ten (10)-day reglementary
period. Although the petitioners who mainly worked
as chicken dressers performed work necessary and
desirable in the usual business of the respondent,
they were not regular employees
therein. Consequently, the termination of their
employment upon the expiry of their respective
contracts was valid.
EMPLOYER DETERMINATION/ DESIGNATION
G.R. No. 70705 August 21, 1989
MOISES DE LEON, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and LA TONDEA INC.,
respondents
Facts:
Moises de Leon petitioner was employed by private
respondent La Tonde;a Inc. on December 11,
1981, at the Maintenance Section of its Engineering
Department in Tondo, Manila. 1 His work consisted
mainly of painting company building and
equipment, and other odd jobs relating to
maintenance. He was paid on a daily basis through
petty cash vouchers.
In the early part of January, 1983, after a service of
more than one (1) year, petitioner requested from
respondent company that he be included in the
payroll of regular workers, instead of being paid
through petty cash vouchers. Private respondent's
response to this request was to dismiss petitioner
from his employment on January 16, 1983. Having
been refused reinstatement despite repeated
demands, petitioner filed a complaint for illegal
dismissal, reinstatement and payment of
backwages before the Office of the Labor Arbiter
of the then Ministry now Department of Labor and
Employment.
Petitioner alleged that he was dismissed following
his request to be treated as a regular employee;
that his work consisted of painting company
buildings and maintenance chores like cleaning
and operating company equipment, assisting
Emiliano Tanque Jr., a regular maintenance man;
and that weeks after his dismissal, he was re-hired
by the respondent company indirectly through the
Vitas-Magsaysay Village Livelihood Council, a labor
agency of respondent company, and was made to
perform the tasks which he used to do. Emiliano
Tanque Jr. corroborated these averments of
petitioner in his affidavit. 2
On the other hand, private respondent claimed
that petitioner was not a regular employee but only
a casual worker hired allegedly only to paint a
certain building in the company premises, and that
his work as a painter terminated upon the
completion of the painting job.
On April 6, 1984, Labor Arbiter Bienvenido S.
Hernandez rendered a decision 3 finding the
complaint meritorious and the dismissal illegal; and
ordering the respondent company to reinstate
petitioner with full backwages and other benefits.
Labor Arbiter Hernandez ruled that petitioner was
not a mere casual employee as asserted by private
respondent but a regular employee. He concluded
that the dismissal of petitioner from the service was
prompted by his request to be included in the list of
regular employees and to be paid through the
payroll and is, therefore, an attempt to circumvent
the legal obligations of an employer towards a
regular employee.
Labor Arbiter Hernandez found as follows:
Page 2 of 5
After a thorough examination of the records of the
case and evaluation of the evidence and versions
of the parties, this Office finds and so holds that the
dismissal of complainant is illegal. Despite the
impressive attempt of respondents to show that the
complainant was hired as casual and for the work
on particular project, that is the repainting of Mama
Rosa Building, which particular work of painting and
repainting is not pursuant to the regular business of
the company, according to its theory, we find
differently. Complainant's being hired on casual
basis did not dissuade from the cold fact that such
painting of the building and the painting and
repainting of the equipment and tools and other
things belonging to the company and the odd jobs
assigned to him to be performed when he had no
painting and repainting works related to
maintenance as a maintenance man are
necessary and desirable to the better operation of
the business company. Respondent did not even
attempt to deny and refute the corroborating
statements of Emiliano Tanque Jr., who was
regularly employed by it as a maintenance man
doing same jobs not only of painting and repainting
of building, equipment and tools and machineries
or machines if the company but also other odd jobs
in the Engineering and Maintenance Department
that complainant Moises de Leon did perform the
same odd jobs and assignments as were assigned
to him during the period de Leon was employed for
more than one year continuously by Id respondent
company. We find no reason not to give credit and
weight to the affidavit and statement made therein
by Emiliano Tanque Jr. This strongly confirms that
complainant did the work pertaining to the regular
business in which the company had been
organized. Respondent cannot be permitted to
circumvent the law on security of tenure by
considering complainant as a casual worker on
daily rate basis and after working for a period that
has entitled him to be regularized that he would be
automatically terminated. ... .
Issue: Whether or not de Leon is a regular employee
of La Tzondena Inc.
Ruling:
Yes, de Leon is a regular employee.
The law on the matter is Article 281 of the Labor
Code which defines regular and casual
employment as follows:
Art. 281. Regular and casual employment. The
provisions of a written agreement to the contrary
notwithstanding and regardless of the oral
agreements of the parties, an employment shall be
deemed to be regular where the employee has
been engaged to perform activities which are
usually necessary or desirable in the usual business
or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which
has been determined at the time of the
engagement of the employee or where the work or
services to be performed is seasonal in nature and
the employment is for the duration of the season.
An employment shall be deemed to be casual if it is
not covered by the preceding paragraph:
Provided, That any employee who has rendered at
least one year of service, whether such service is
continuous or broken, shall be considered a regular
employee with respect to the activity in which he is
employed and his employment shall continue while
such actually exists.
This provision reinforces the Constitutional mandate
to protect the interest of labor. Its language
evidently manifests the intent to safeguard the
tenurial interest of the worker who may be denied
the rights and benefits due a regular employee by
virtue of lopsided agreements with the
economically powerful employer who can
maneuver to keep an employee on a casual status
for as long as convenient. Thus, contrary
agreements notwithstanding, an employment is
deemed regular when the activities performed by
the employee are usually necessary or desirable in
the usual business or trade of the employer. Not
considered regular are the so-called "project
employment" the completion or termination of
which is more or less determinable at the time of
employment, such as those employed in
connection with a particular construction project 9
and seasonal employment which by its nature is
only desirable for a limited period of time. However,
any employee who has rendered at least one year
of service, whether continuous or intermittent, is
deemed regular with respect to the activity he
performed and while such activity actually exists.
The primary standard, therefore, of determining a
regular employment is the reasonable connection
between the particular activity performed by the
employee in relation to the usual business or trade
of the employer. The test is whether the former is
usually necessary or desirable in the usual business
or trade of the employer. The connection can be
determined by considering the nature of the work
performed and its relation to the scheme of the
particular business or trade in its entirety. Also, if the
employee has been performing the job for at least
one year, even if the performance is not continuous
or merely intermittent, the law deems the repeated
and continuing need for its performance as
sufficient evidence of the necessity if not
indispensability of that activity to the business.
Hence, the employment is also considered regular,
but only with respect to such activity and while
such activity exists.
In the case at bar, the respondent company, which
is engaged in the business of manufacture and
distillery of wines and liquors, claims that petitioner
was contracted on a casual basis specifically to
paint a certain company building and that its
completion rendered petitioner's employment
terminated. This may have been true at the
beginning, and had it been shown that petitioner's
activity was exclusively limited to painting that
certain building, respondent company's theory of
casual employment would have been worthy of
consideration.
However, during petitioner's period of employment,
the records reveal that the tasks assigned to him
included not only painting of company buildings,
equipment and tools but also cleaning and oiling
machines, even operating a drilling machine, and
Page 3 of 5
other odd jobs assigned to him when he had no
painting job. A regular employee of respondent
company, Emiliano Tanque Jr., attested in his
affidavit that petitioner worked with him as a
maintenance man when there was no painting job.
It is noteworthy that, as wisely observed by the
Labor Arbiter, the respondent company did not
even attempt to negate the above averments of
petitioner and his co- employee. Indeed, the
respondent company did not only fail to dispute this
vital point, it even went further and confirmed its
veracity when it expressly admitted in its comment
that, "The main bulk of work and/or activities
assigned to petitioner was painting and other
related activities. Occasionally, he was instructed to
do other odd things in connection with
maintenance while he was waiting for materials he
would need in his job or when he had finished early
one assigned to him. 10
The respondent Commission, in reversing the
findings of the Labor Arbiter reasoned that
petitioner's job cannot be considered as necessary
or desirable in the usual business or trade of the
employer because, "Painting the business or factory
building is not a part of the respondent's
manufacturing or distilling process of wines and
liquors. 11
The fallacy of the reasoning is readily apparent in
view of the admitted fact that petitioner's activities
included not only painting but other maintenance
work as well, a fact which even the respondent
Commission, like the private respondent, also
expressly recognized when it stated in its decision
that, 'Although complainant's (petitioner) work was
mainly painting, he was occasionally asked to do
other odd jobs in connection with maintenance
work. 12 It misleadingly assumed that all the
petitioner did during his more than one year of
employment was to paint a certain building of the
respondent company, whereas it is admitted that
he was given other assignments relating to
maintenance work besides painting company
building and equipment.
It is self-serving, to say the least, to isolate
petitioner's painting job to justify the proposition of
casual employment and conveniently disregard the
other maintenance activities of petitioner which
were assigned by the respondent company when
he was not painting. The law demands that the
nature and entirety of the activities performed by
the employee be considered. In the case of
petitioner, the painting and maintenance work
given him manifest a treatment consistent with a
maintenance man and not just a painter, for if his
job was truly only to paint a building there would
have been no basis for giving him other work
assignments In between painting activities.
It is not tenable to argue that the painting and
maintenance work of petitioner are not necessary
in respondent's business of manufacturing liquors
and wines, just as it cannot be said that only those
who are directly involved in the process of
producing wines and liquors may be considered as
necessary employees. Otherwise, there would have
been no need for the regular Maintenance Section
of respondent company's Engineering Department,
manned by regular employees like Emiliano Tanque
Jr., whom petitioner often worked with.
Furthermore, the petitioner performed his work of
painting and maintenance activities during his
employment in respondent's business which lasted
for more than one year, until early January, 1983
when he demanded to be regularized and was
subsequently dismissed. Certainly, by this fact alone
he is entitled by law to be considered a regular
employee. And considering further that weeks after
his dismissal, petitioner was rehired by the company
through a labor agency and was returned to his
post in the Maintenance Section and made to
perform the same activities that he used to do, it
cannot be denied that as activities as a regular
painter and maintenance man still exist.
It is of no moment that petitioner was told when he
was hired that his employment would only be
casual, that he was paid through cash vouchers,
and that he did not comply with regular
employment procedure. Precisely, the law overrides
such conditions which are prejudicial to the interest
of the worker whose weak bargaining position
needs the support of the State. That determines
whether a certain employment is regular or casual
is not the will and word of the employer, to which
the desperate worker often accedes, much less the
procedure of hiring the employee or the manner of
paying his salary. It is the nature of the activities
performed in relation to the particular business or
trade considering all circumstances, and in some
cases the length of time of its performance and its
continued existence.
Finally, considering its task to give life and spirit to
the Constitutional mandate for the protection of
labor, to enforce and uphold our labor laws which
must be interpreted liberally in favor of the worker in
case of doubt, the Court cannot understand the
failure of the respondent Commission to perceive
the obvious attempt on the part of the respondent
company to evade its obligations to petitioner by
dismissing the latter days after he asked to be
treated as a regular worker on the flimsy pretext
that his painting work was suddenly finished only to
rehire him indirectly weeks after his dismissal and
assign him to perform the same tasks he used to
perform. The devious dismissal is too obvious to
escape notice. The inexplicable disregard of
established and decisive facts which the
Commission itself admitted to be so, in justifying a
conclusion adverse to the aggrieved laborer clearly
spells a grave abuse of discretion amounting to
lack of jurisdiction.
Private respondent is ordered to reinstate petitioner
as a regular maintenance man and to pay
petitioner 1) backwages equivalent to three years
from January 16,1983, in accordance with the
Aluminum Wage Orders in effect for the period
covered, 2) ECOLA 3) 13th Month Pay, 4) and other
benefits under pertinent Collective Bargaining
Agreements, if any.
Page 4 of 5
EMPLOYER DETERMINATION/ DESIGNATION
[G.R. No. 119523. October 10, 1997]
ISABELO VIOLETA and JOVITO BALTAZAR, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION, Fifth
Division, and DASMARINAS INDUSTRIAL AND
STEELWORKS CORPORATIONS, respondents.
Facts:
Petitioners Isabelo Violeta and Jovito Baltazar were
former employees of private respondent Dasmarias
Industrial and Steelworks Corporation (DISC). Their
records of service and employment, insofar as the
same are material to this case, are not in dispute.
Petitioner Violeta worked in Construction and
Development Corporation of the Philippines
(CDCP), a sister corporation of private respondent,
at its project in CDCP Mines, Basay, Negros Oriental
from December 15, 1980 up to February 15, 1981.
Private respondent then hired him as Erector II at
the formers project for Philphos in Isabel, Leyte on
November 10, 1982 until the termination of the
project on December 3, 1984. On January 21, 1985,
he was reassigned as Erector II for Five Stand TCM
Project, with vacation and sick leaves, and was
designated as a regular project employee at
private respondents project for National Steel
Corporation (NSC) in Iligan City. After receiving a
salary adjustment, he was again hired on June 6,
1989 as Handyman for the civil works of a
construction project for NSC. On February 10, 1992,
he was appointed for project employment, again
as Handyman, to NSC ETL #3 Civil Works by private
respondent. Due to the completion of the particular
item of work he was assigned to, private
respondent terminated the services of petitioner
Violeta on March 15, 1992.
Petitioner Baltazar started in the employ of CDCP
on June 23, 1980. He was hired by private
respondent as Lead Carpenter for project Agua VII
on October 1, 1981. Like petitioner Violeta, he was
transferred from one project to another as a regular
project employee. On November 28, 1991, he was
hired as Leadman II in ETL #3 Civil Works by private
respondent in its project for NSC, but he was
separated from such employment on December
20, 1991 as a result of the completion of said item of
work.
Upon their separation, petitioners executed a
quitclaim wherein they declared that they have no
claim against private respondent and supposedly
discharged private respondent from any liability
arising from their employment.
Contending that they are already regular
employees who cannot be dismissed on the ground
of completion of the particular project where they
are engaged, petitioners filed two separate
complaints for illegal dismissal against private
respondent, with a prayer for reinstatement and
back wages plus damages.
Private respondent admitted that it is engaged in
the development and construction of infrastructure
projects and maintained that Violeta was hired on
June 6, 1989 to March 15, 1992 as Handyman while
Baltazar was employed on June 6, 1989 to
December 20, 1991 as Leadman II. It argued that
both are project employees based on their
declaration in their Appointments for Project
Employment that they are employed only for the
period and specific works stated in their respective
appointments, in addition to their admission that
they are project employees who are subject to the
provisions of Policy Instruction No. 20.
Labor Arbiter Guardson A. Siao dismissed the claims
of petitioners for lack of merit but ordered private
respondent to grant them separation pay. The
labor arbiter concluded that petitioners are project
employees based on their admission that they are
regular project employees. Thus, their employment
was deemed coterminous with the project for
which their employer engaged them. Their
separation was declared valid and their claims for
reinstatement and back wages were denied. The
award of separation pay was based on the findings
of the labor arbiter that it is the policy of private
respondent to pay employees who have rendered
at least one year of continuous service.
Issue: Whether or not Violeta is a regular employee
of Dasmarinas Industrial and Steel
Ruling: Yes,
The source of the definition of a regular employee
vis--vis a project employee is found in 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
service to be performed is seasonal in nature and
the employment is for the duration of the season.
An employee 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. (Emphases ours).
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.
The principal test for determining whether particular
employees are properly characterized as project
employees, as distinguished from regular
employees, is whether or not the project employees
were assigned to carry out a specific project or
undertaking, the duration (and scope) of which
were specified at the time the employees were
engaged for that project. As defined, project
employees are those workers hired (1) for a specific
project or undertaking, and (2) the completion or
termination of such project or undertaking has
Page 5 of 5
been determined at the time of engagement of
the employee
As Handyman and Erector II, respectively,
petitioners services are both necessary and vital to
the operation of the business of private respondent.
This is not at all traversed, but is even confirmed by
the fact that they were continually and successively
assigned to the different projects of private
respondent and its sister company, CDCP.
Following the rule on precedents, we once again
hold that the respective employments of the
present petitioners is not subject to a term but
rather to a condition, that is, progress
accomplishment. As we have stated in De Jesus, it
cannot be said that their employment had been
pre-determined because, firstly, the duration of
their work is contingent upon the progress
accomplishment and, secondly, the contract gives
private respondent the liberty to determine the
personnel and the number as the work progresses.
It is ineluctably not definite so as to exempt private
respondent from the strictures and effects of Article
280.
To add our own observation, the appointments of
petitioners herein were not coterminous with NSC
ETL #3 Civil Works but with the need for such
particular items of work as were assigned to them,
as distinguished from the completion of the project.
With such ambiguous and obscure words and
conditions, petitioners employment was not co-
existent with the duration of their particular work
assignments because their employer could, at any
stage of such work, determine whether their
services were needed or not. Their services could
then be terminated even before the completion of
the phase of work assigned to them.
We find this explication necessary and in accord
with the principle that in controversies between a
laborer and his master, doubts reasonably arising
from the evidence, or in the interpretation of
agreements and writings should be resolved in the
formers favor.[18]
To be exempted from the presumption of regularity
of employment, therefore, the agreement between
a project employee and his employer must strictly
conform with the requirements and conditions
provided in Article 280. It is not enough that an
employee is hired for a specific project or phase of
work. There must also be a determination of or a
clear agreement on the completion or termination
of the project at the time the employee is engaged
if the objective of Article 280 is to be achieved.
Since this second requirement was not met in
petitioners case, they should be considered as
regular employees despite their admissions and
declarations that they are project employees
made under circumstances unclear to us.
Parenthetically, it is relevant to observe that the
similarities in the stipulations of the
employment/appointment contracts can be
explained by the indirect relationship of the
Philippine National Construction Corporation
(PNCC) and private respondent. CDCP was the
predecessor of PNCC which, in turn, is an existing
sister company of private respondent. Apparently,
private respondent ignored the mistake committed
by its said sister company. Also, if only the NLRC had
thoroughly read the De Jesus decision, it would
have discovered that the PNCC also raised as a
defense the admission of therein petitioner De Jesus
that he was a project employee, but to no avail.
There is another reason why we should rule in favor
of petitioners. Nowhere in the records is there any
showing that private respondent reported the
completion of its projects and the dismissal of
petitioners in its finished projects to the nearest
Public Employment Office in compliance with
Policy Instruction No. 20 of then Labor Secretary Blas
F. Ople.
Jurisprudence abounds with the consistent rule that
the failure of an employer to report to the nearest
Public Employment Office the termination of its
workers services every time a project or a phase
thereof is completed indicates that said workers are
not project employees.[19] In the case at bar, only
the last and final termination of petitioners was
reported to the aforementioned labor office.
Private respondent should have filed as many
reports of termination as there were construction
projects actually finished if petitioners were indeed
project employees, considering that petitioners
were hired and again rehired for various projects or
the phases of work therein. Its failure to submit
reports of termination cannot but sufficiently
convince us further that petitioners are truly regular
employees. Just as important, the fact that
petitioners had rendered more than one year of
service at the time of their dismissal overturns
private respondents allegations that petitioners
were hired for a specific or a fixed undertaking for a
limited period of time.[20]
Even if we disregard the stints of petitioners with
CDCP, it cannot be disclaimed that they have
rendered long years of service in private
respondents business affairs. Beginning his service in
1982, petitioner Violeta served in the employ of
private respondent up to 1992. In the case of
petitioner Baltazar, he worked for private
respondent from 1981 to 1991. Private respondent
repeatedly appointed petitioners to new projects
after the completion of every project or item of
work in which they were previously employed, each
over a span of about 10 years.
Public respondent contends that the gaps in the
employment of petitioners, consisting of the periods
in between the completion of one project and the
engagement of petitioners in the next, show that
they could not have been regular employees under
the control of private respondent, and that
petitioners could have applied for or accepted
employment from other employers during those
periods. This is puerile and speculative.
In the first place, Article 280 of the Labor Code
contemplates both continuous and broken
services. In the second place, there is absolutely no
evidence of petitioners having applied for or
accepted such other or outside employment
during the brief interregna in the continuity of their
work with private respondent. Their undertaking in
the Employment Terms and Conditions of their
service to private respondent bound them to work
in such place of work or project as DISC may assign
or transfer them, with the further agreement that
they would so work during rest day, holidays, night
time and night shift or during emergencies.[21]
Page 6 of 5
These are self-evident refutations of private
respondents theory and further bolster petitioners
position that they were not mere employees
engaged for a single or particular project.They
were thus removed from the scope of project
employment and considered as regular employees
since their employment as so-called project
employees was extended long after the
termination of different projects.[22]
The fact that petitioners signed quitclaims will not
bar them from pursuing their claims against private
respondent because quitclaims executed by
laborers are frowned upon as contrary to public
policy, and are ineffective to bar claims for the full
measure of the workers legal rights.[23] The so-
called quitclaims signed by petitioners were
actually pro forma provisions printed in the
clearance certificate they had to get from private
respondent. These were not in the nature of a
compromise but a compulsory general release
required from them, for which no consideration was
either given or even stated.
EMPLOYER DETERMINATION/ DESIGNATION
[G.R. No. 125606. October 7, 1998]
SAN MIGUEL CORPORATION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, THIRD
DIVISION, and FRANCISCO DE GUZMAN, JR.,
respondents.
Facts:
The facts on record show that in November 1990,
private respondent was hired by petitioner as
helper/bricklayer for a specific project, the repair
and upgrading of furnace C at its Manila Glass
Plant. His contract of employment provided that
said temporary employment was for a specific
period of approximately four (4) months.
On April 30, 1991, private respondent was able to
complete the repair and upgrading of furnace C.
Thus, his services were terminated on that same day
as there was no more work to be done. His
employment contract also ended that day.
On May 10, 1991, private respondent was again
hired for a specific job or undertaking, which
involved the draining/cooling down of furnace F
and the emergency repair of furnace E. This project
was for a specific period of approximately three (3)
months.
After the completion of this task, namely the
draining/cooling down of furnace F and the
emergency repair of furnace E, at the end of July
1991, private respondents services were terminated.
On August 1, 1991, complainant saw his name in a
Memorandum posted at the Companys Bulletin
Board as among those who were considered
dismissed.
On August 12, 1994, or after the lapse of more than
three (3) years from the completion of the last
undertaking for which private respondent was
hired, private respondent filed a complaint for
illegal dismissal against petitioner, docketed as
NLRC NCR Case No. 08-05954-94.[7]
Both parties submitted their respective position
papers, reply and rejoinder to Labor Arbiter Felipe
Garduque II. On June 30, 1995, he rendered the
decision dismissing said complaint for lack of merit.
In his ruling Labor Arbiter Garduque sustained
petitioners argument that private respondent was a
project employee. The position of a helper does not
fall within the classification of regular employees.
Hence, complainant never attained regular
employment status. Moreover, his silence for more
than three (3) years without any reasonable
explanation tended to weaken his claim.[8]
Issue: Whether or not de Guzman is a regular
employee of San Miguel Corp.?
Ruling:
No, Art. 280 of the Labor Code defines regular,
project and casual employment as follows:
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 actually exists.
The above mentioned provision reinforces the
Constitutional mandate to protect the interest of
labor as it sets the legal framework for ascertaining
ones nature of employment, and distinguishing
different kinds of employees. Its language manifests
the intent to safeguard the tenurial interest of
worker who may be denied the enjoyment of the
rights and benefits due to an employee, regardless
of the nature of his employment, by virtue of
lopsided agreements with the economically
powerful employer who can maneuver to keep an
employee on a casual or contractual status for as
long as it is convenient to the employer.
Thus, under Article 280 of the Labor Code, an
employment is deemed regular when the activities
performed by the employee are usually necessary
or desirable in the usual business or trade of the
employer even if the parties enter into an
agreement stating otherwise. But considered not
regular under said Article are (1) the so-called
project employment the termination of which is
more or less determinable at the time of
employment, such as those connected with a
particular construction project; and (2) seasonal
employment, which by its nature is only for one
season of the year and the employment is limited
for the duration of that season, such as the
Christmas holiday season. Nevertheless, an
exception to this exception is made: any employee
who has rendered at least one (1) year of service,
whether continuous or intermittent, with respect to
the activity he performed and while such activity
actually exists, must be deemed regular.
Following Article 280, whether one is employed as a
project employee or not would depend on whether
he was hired to carry out a specific project or
Page 7 of 5
undertaking, the duration and scope of which were
specified at the time his services were engaged for
that particular project.[11] Another factor that may
be considered is the reasonable connection
between the particular activity undertaken by the
employee in relation to the usual trade or business
of the employer; if without specifying the duration
and scope, the work to be undertaken is usually
necessary or desirable in the usual business or trade
of the employer, then it is regular employment and
not just project much less casual employment.
Thus, the nature of ones employment does not
depend on the will or word of the employer. Nor on
the procedure of hiring and the manner of
designating the employee, but on the nature of the
activities to be performed by the employee,
considering the employers nature of business[12]
and the duration and scope of the work to be
done.
Note that the plant where private respondent was
employed for only seven months is engaged in the
manufacture of glass, an integral component of the
packaging and manufacturing business of
petitioner. The process of manufacturing glass
requires a furnace, which has a limited operating
life. Petitioner resorted to hiring project or fixed term
employees in having said furnaces repaired since
said activity is not regularly performed. Said
furnaces are to be repaired or overhauled only in
case of need and after being used continuously for
a varying period of five (5) to ten (10) years.
In 1990, one of the furnaces of petitioner required
repair and upgrading. This was an undertaking
distinct and separate from petitioners business of
manufacturing glass. For this purpose, petitioner
must hire workers to undertake the said repair and
upgrading. Private respondent was, thus, hired by
petitioner on November 28, 1990 on a temporary
status for a specific job for a determined period of
approximately four months.
Upon completion of the undertaking, or on April 30,
1991, private respondents services were terminated.
A few days, thereafter, two of petitioners furnaces
required draining/cooling down and emergency
repair. Private respondent was again hired on May
10, 1991 to help in the new undertaking, which
would take approximately three (3) months to
accomplish. Upon completion of the second
undertaking, private respondents services were
likewise terminated.[14] He was not hired a third
time, and his two engagements taken together did
not total one full year in order to qualify him as an
exception to the exception falling under the cited
proviso in the second paragraph of Art. 280 of the
Labor Code.
Clearly, private respondent was hired for a specific
project that was not within the regular business of
the corporation. For petitioner is not engaged in the
business of repairing furnaces.Although the activity
was necessary to enable petitioner to continue
manufacturing glass, the necessity therefor arose
only when a particular furnace reached the end of
its life or operating cycle. Or, as in the second
undertaking, when a particular furnace required an
emergency repair. In other words, the undertakings
where private respondent was hired primarily as
helper/bricklayer have specified goals and
purposes which are fulfilled once the designated
work was completed. Moreover, such undertakings
were also identifiably separate and distinct from the
usual, ordinary or regular business operations of
petitioner, which is glass manufacturing. These
undertakings, the duration and scope of which had
been determined and made known to private
respondent at the time of his employment, clearly
indicated the nature of his employment as a
project employee. Thus, his services were
terminated legally after the completion of the
project.[15]
Public respondent NLRCs decision, if upheld, would
amount to negating the distinctions made in Article
280 of the Labor Code. It would shunt aside the rule
that since a project employees work depends on
the availability of a project, necessarily, the
duration of his employment is coterminous with the
project to which he is assigned.[16] It would
become a burden for an employer to retain an
employee and pay him his corresponding wages if
there was no project for him to work on. Well to
remember is the language of the Court in the case
of Mamansag v. NLRC:[17]
While the Constitution is committed to the policy of
social justice and the protection of the working
class, it should not be supposed that every dispute
will be automatically decided in favor of labor.
Management has also rights, which, as such, are
entitled to respect and enforcement in the interest
of fair play. Although the Supreme Court has
inclined more often than not toward the worker
and has upheld his cause in his conflicts with the
employer, such favoritism has not blinded the Court
to the rule that justice is in every case for the
deserving, to be dispensed in the light of the
established facts and the applicable law and
doctrine.
Considering that private respondent was a project
employee whose employment, the nature of which
he was fully informed, related to a specific project,
work or undertaking, we find that the Labor Arbiter
correctly ruled that said employment legally ended
upon completion of said project. Hence the
termination of his employment was not tantamount
to an illegal dismissal; and it was a grave abuse of
discretion on public respondent's part to order his
reinstatement by petitioner.
MANAGEMENT PREROGATIVE
[G.R. No. 114129. October 24, 1996]
MANILA ELECTRIC COMPANY, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSIONS and
JEREMIAS G. CORTEZ, respondents
Facts:
Private respondent Jeremias C. Cortez, Jr. was
employed on probationary status by petitioner
Manila Electric Company (Meralco) on September
15, 1975 as a lineman driver. Six months later, he
was regularized as a 3rd class lineman-driver
assigned at petitioners North Distribution Division. In
1977, and until the time of his dismissal, he worked
as 1st class lineman-driver whose duties and
responsibilities among others, includes the
maintenance of Meralcos distribution facilities
(electric lines) by responding to customers
complaints of power failure, interruptions, line
trippings and other line troubles.
Page 8 of 5
Characteristics, however, of private respondents
service with petitioner is his perennial suspension
from work, viz:
Date of Memorandum Penalty
Meted/Description
a. May 25, 1977 - Suspension of five (5)
working days without pay for violation of Company
Code on Employee Discipline, i.e., drinking of
alcoholic beverages during working time xxx.
b. March 28, 1984 - Suspension of three (3)
working days without pay for failure or refusal to
report to J.F. cotton Hospital [where petitioner
maintains a medical clinic] as instructed by a
company physician, while on sick leave.
C. June 13, 1984 - Suspension of ten (10)
working days without pay for unauthorized
extension of sick leave.
d. June 5, 1987 - Suspension of three (3) working
days without pay for failure or refusal to report to
J.F. Cotton Hospital [where petitioner maintains a
medical clinic] as instructed by a company
physician, while on sick leave.
[Private respondents failed to report for work from
Sept. 18, 1986 to Nov. 10, 1986].
e. December 16, 1988 - Preventive suspension for
failure to submit the required Medical Certificate
within 48 hours from the first date of the sick leave.
[Private respondent failed to report for work from
Nov. 28, 1988 to the time such Memorandum was
issued on December 16, 1988].
f. February 22, 1989 - After formal administrative
investigation, suspension of five (5) working days
without pay for unauthorized absences on
November 28, 1988 to December 2, 1988. Absences
from December 2, 1988. Absences from December
9-19, 1988 were charged to private respondents
vacation leave credits for the calendar year 1989.
g. May 30, 1989 - Suspension of ten (10)
working days without pay for unauthorized
absences from May 17-19 1989, with warning that
penalty of dismissal will be imposed upon
commission of similar offense in the future.1
Due to his numerous infractions, private respondent
was administratively investigated for violation of
Meralcos Code on Employee Discipline, particularly
his repeated and unabated absence from work
without prior notice his superior specifically from
August 2 to September 19, 1989.
After such administrative investigation was
conducted by petitioner, it concluded that private
respondent was found to have grossly neglected
his duties by not attending to his work as lineman
from Aug. 2, 1989 to September 19, 1989 without
notice to his superiors.
In a letter dated January 19, 1990, private
respondent was notified of the investigation result
and consequent termination of his services
effective January 19, 1990.
On March 7, 1990, private respondent filed a
complaint for illegal dismissal against petitioner.
Issue: Whether or not private respondents dismissal
from the service was illegal?
Ruling:
NO, Article 283 of the Labor Code enumerates the
just causes for termination. Among such causes are
the following:
a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employers or
representatives in connection with his work.
b) Gross and habitual neglect by the employee of
his duties.
xxx xxx xxx.
This cause includes gross inefficiency, negligence
and carelessness. Such just causes is derived from
the right of the employer to select and engage his
employees. For indeed, regulation of manpower by
the company clearly falls within the ambit of
management prerogative. This court had defined a
valid exercise of management prerogative as one
which covers: hiring work assignment, working
methods, time, place and manner of work, tools to
be used, processes to be followed, supervision of
workers, working regulations, transfer of employees,
work supervision, lay-off of workers, and the
discipline, dismissal and recall of workers. Except as
provided for, or limited by, special laws, an
employer is free to regulate, according to his own
discretion and judgment, all aspects of
employment.5
Moreover, this Court has upheld a companys
management prerogatives so long as they are
exercised in good faith for the advancement of the
employers interest and not for the purpose of
defeating or circumventing the rights of the
employees under special laws or under valid
agreements.6
In the case at bar, the service record of private
respondent with petitioner is perpetually
characterized by unexplained absences and
unauthorized sick leave extensions. The nature of his
job i.e. as a lineman-driver requires his physical
presence to minister to incessant complaints often
faulted with electricity. As aptly stated by the
Solicitor General:
Habitual absenteeism of an errant employee is not
concordant with the public service that petitioner
has to assiduously provide. To have delayed power
failure in a certain district simply because a
MERALCO employee assigned to such area was
absent and cannot immediately be replaced is a
breach of public service of the highest order. A
deep sense of duty would, therefore, command
that private respondent should, at the very least,
limit his absence for justifiable reasons.7
The penchant of private respondent to continually
incur unauthorized absences and/or a violation of
petitioners sick leave policy finally rendered his
dismissal as imminently proper.Private respondent
cannot expect compassion from this Court by
totally disregarding his numerous previous
infractions and take into considerations only the
period covering August 2, 1989 to September 19,
1989. As ruled by this Court in the cases of Mendoza
v. National Labor Relation Commissions,8 and
National Service Corporation v. Leogardo, Jr.,9 it is
the totality, not the compartmentalization, of such
company infractions that private respondents had
consistently committed which justified his penalty of
dismissal.
As correctly observed by the Labor Arbiter:
In the case at bar, it was established that
complainant violated respondents Code on
Employee Discipline, not only once, but ten (10)
times. On the first occasion, complainant was
simply warned. On the second time, he was
Page 9 of 5
suspended for 5 days. With the hope of reforming
the complainant, respondent generously imposed
penalties of suspension for his repeated
unauthorized absences and violations of sick leave
policy which constitute violations of the Code. On
the ninth time, complainant was already warned
that the penalty of dismissal will be imposed for
similar or equally serious violation (Annex 10).
In total disregard of respondents warning,
complainant, for the tenth time did not report for
work without prior authority from respondent;
hence, unauthorized. Worse, in total disregard of his
duties as lineman, he did not report for work from
August 1, 1989 to September 19, 1989; thus, seriously
affected (sic) respondents operations as a public
utility. This constitute[s] a violation of respondents
Code and gross neglect of duty and serious
misconduct under Article 283 of the labor Code.10
Habitual absenteeism should not and cannot be
tolerated by petitioner herein which is a public utility
company engaged in the business of distributing
and selling electric energy within its franchise areas
and that the maintenance of Meralcos distribution
facilities (electric lines) by responding to customers
complaints of power failure, interruptions, line
trippings and other line troubles is of paramount
importance to the consuming public.
Hence, an employees habitual absenteeism
without leave, which violated company rules and
regulation is sufficient to justify termination from the
service.11
MANAGEMENT PREROGATIVE
[G.R. No. 143258. August 15, 2003]
PHILIPPINE AIRLINES, INC., petitioner, vs. JOSELITO
PASCUA, ROBERT ABION, IRENEO ACOSTA, GARY
NEPOMUCENO, JASON PALAD, CEFERINO de la
CRUZ, JOEL SALGADO, WILFREDO RIVERA,
ALEXANDER ANORE, FERNANDO BACCAY,
EDILBERTO FAUNE, REYMAR KALAW, GARY G.
MARASIGAN, RODOLFO ODO, JONATHAN RENGO,
ARTHUR APOSTOL, EDUARDO BALICASAN, MATHIAS
GLEAN, ALINORMAN HARANGOTE, CRISANTO
CASTILLO, REX MARION CUERPO, EDGARDO del
PRADO, RICARDO HERNANDEZ, PEDRO MERCADO
JR., CESAR PAYOYO, RONALDO QUEROL, MAURELIO
SIERRA, MANUEL VILLELA, LOUISEN FELIPE,
LOBENEDICTO TIMBREZA, ANTONIO CABUG, ELISEO
ESPIRITU, ARNEL BAUTISTA, ANTHONY ROBLES, DENNIS
ARANDIA, CHARLIE BALUBAL, RHODERIC BITAS,
ORLANDO CANDA, CHARLIE de la CRUZ,
RIQUESENDO de la FUENTE, RENO DUQUE,
JONATHAN FEBRE, ALVIN RIBERTA, NATHANIEL
MALABAS, JUANITO SERUMA, FREDERICH de ASIS,
ROMMEL ESTRADA, SYDFREY EVARISTO, ERICSON
INTAL, FERDINAND GALANG, RUBEN PEROLINA,
ROBERT McBURNEY, ENRIQUE SORIANO, ALVIN
MANALAYSAY, NEMESIO MAALA, RAUL
NEPOMUCENO, SAMUEL REYES, ERWIN MINA,
MANUEL REYES, REYNALDO ORAPA, TEODORICO
PADELIO, RANDY PIMENTEL, WILLIAM PATRIMONIO,
JOEL RAMOS, OLEGARIO REYES, RAUL OCULTO,
ROGELIO OLQUINDO, and LARRY VILLAFLOR.
respondents.
Facts:
In April, August, and September of 1992, PAL hired
private respondents as station attendants on a four
or six-hour work-shift a day at five to six days a
week.
The primary duty of private respondents who were
assigned to PALs Air services Department and
ASD/CARGO was to load cargo to departing, and
unload cargo from arriving PAL international flights
as well as flights of Cathay Pacific, Northwest
Airlines and Thai Airlines with which PAL had service
contract[s].
On certain occasions, PAL compelled private
respondents to work overtime because of urgent
necessity. The contracts with private respondents
were extended twice, the last of which appears to
have been for an indefinite period.
On February 3, 1994, private respondent Joselito
Pascua, in his and on behalf of other 79 part-time
station attendants, filed with the Department of
Labor and Employment a complaint for:
(1) Regularization
(2) Underpayment of wages
(3) Overtime pay
(4) Thirteenth month pay
(5) Service incentive leave pay
(6) Full time of eight hours employment
(7) Recovery of benefits due to regular employees
(8) Night differential pay
(9) Moral damages and
(10) Attorneys fees,
which was docketed as NLRC NCR Case No. 00-02-
00953-94.
During the pendency of the case, PAL President
Jose Antonio Garcia and PAL Chairman &
Corporate Executive Officer Carlos G. Dominguez
converted the employment status of private
respondents from temporary part-time to regular
part-time.
On February 24, 1995, private respondents dropped
their money claim then pending before the Office
of Executive Labor Arbiter Guanio, thus leaving for
consideration their complaint for regularization -
conversion of their employment status from part-
time to regular (working on an 8-hour shift).
Finding private respondents remaining cause of
action was rendered moot and academic by their
supervening regularization and denying their prayer
that their status as regular employees be given
retroactive effect to six months after their stint as
temporary contractual employees, the Executive
Labor Arbiter dismissed private respondents
complaint.
On appeal, the NLRC, finding for private
respondents, declared them as regular employees
of PAL with an eight-hour work-shift. The pertinent
portions of the NLRC decision reads:
Respondent admits that complainants have been
performing functions that are considered necessary
or desirable in the usual business of PAL. There is no
clear showing, however, that complainants
employment had been fixed for a particular project
or undertaking the completion or termination of
which has been determined at the time of their
engagement. Neither is there a clear showing that
the work or services which they performed, was
seasonal in nature and their employment for the
duration of the season. Complainants were simply
hired as part-time employees at the ASD and at the
ASD/CARGO to do ramp services.
Complainants can therefore be considered as
casual employees for a definite period during the
Page 10 of 5
first year of their employment and, thereafter, as
regular employees of respondents by operation of
law. As such, they should be entitled to the
compensation and other benefits provided in the
Collective Bargaining Agreement for regular
employees from or day after one year [of] service.
Having been paid less than what they should
receive, complainants are therefore, entitled to the
differentials.[4]
Petitioner promptly filed a motion for
reconsideration of the NLRC decision, which was
denied in an order dated October 12, 1998.
Consequently, petitioner filed with the Court of
Appeals a special civil action for certiorari to annul
the NLRC decision. On January 26, 2000, the Court
of Appeals dismissed the said petition and by
resolution issued on May 23, 2000, denied
petitioners motion for reconsideration.
Issue: Whether or not the appellate court erred
when it upheld the decision of the NLRC to accord
respondents regular full-time employment although
petitioner, in the exercise of its management
prerogative, requires only part-time services?
Ruling: No, According to petitioner, NLRC
encroached upon this exclusive sphere of
managerial decision, when it ruled that
respondents should be made regular full-time
employees instead of regular part-time employees,
and the appellate court thereby erred in sustaining
the NLRC. This contention does not quite ring true,
much less persuade us. It must be borne in mind
that the exercise of management prerogative is not
absolute. While it may be conceded that
management is in the best position to know its
operational needs, the exercise of management
prerogative cannot be utilized to circumvent the
law and public policy on labor and social justice.
That prerogative accorded management could
not defeat the very purpose for which our labor
laws exist: to balance the conflicting interests of
labor and management, not to tilt the scale in
favor of one over the other, but to guaranty that
labor and management stand on equal footing
when bargaining in good faith with each other. By
its very nature, encompassing as it could be,
management prerogative must be exercised
always with the principles of fair play at heart and
justice in mind.
Records show that respondents were first hired to
work for a period of one year. Notwithstanding the
fact that respondents perform duties that are
usually necessary or desirable in the usual trade or
business of petitioner, respondents were considered
temporary employees as their engagement was
fixed for a specific period. However, equally borne
by the records, is the fact that respondents
employment was extended for more than two
years. Evidently, there was a continued and
repeated necessity for their services, which puts to
naught the contention that respondents, beyond
the one-year period, still continued to be temporary
part-time employees. Article 280 of the Labor
Code[13] provides that any employee who has
rendered at least one year of service, whether such
service is continuous or broken, shall be considered
a regular employee with respect to the activity in
which he is employed, and his employment shall
continue while such activity actually exists.
The NLRC decision now assailed is one based on
substantial evidence, which is that amount of
relevant evidence that a reasonable mind might
accept as adequate to justify a conclusion.[14] It
bears stressing that findings of fact of quasi-judicial
agencies like the NLRC which have acquired
expertise in the specific matters entrusted to their
jurisdiction are accorded by this Court not only
respect but even finality if they are supported by
substantial evidence.[15] Here we find no
compelling reason to go against the factual
findings of the NLRC. The parties had ample
opportunity to present below the necessary
evidence and arguments in furtherance of their
causes, and it is presumed that the quasi-judicial
body rendered its decision taking into consideration
the evidence and arguments thus presented. Such
being the case, it is likewise presumed that the
official duty of the NLRC to render its decision was
regularly performed.[16] Petitioner has not shown
any compelling justification to warrant reversal of
the NLRC findings. Absent any showing of patent
error, or that the NLRC failed to consider a fact of
substance that if considered would warrant a
different result, we yield to the factual conclusions
of that quasi-judicial agency. More so, when as
here, these NLRC conclusions are affirmed by the
appellate court.
It is basic to the point of being elementary that
nomenclatures assigned to a contract shall be
disregarded if it is apparent that the attendant
circumstances do not support their use or
designation. The same is true with greater force
concerning contracts of employment, imbued as
they are with public interest. Although respondents
were initially hired as part-time employees for one
year, thereafter the over-all circumstances with
respect to duties assigned to them, number of hours
they were permitted to work including over-time,
and the extension of employment beyond two
years can only lead to one conclusion: that they
should be declared full-time employees. Thus, not
without sufficient and substantial reasons, the claim
of management prerogative by petitioner ought to
be struck down for being contrary to law and
policy, fair play and good faith.
In sum, we are in agreement with the Court of
Appeals that the NLRC did not commit grave abuse
of discretion simply because it overturned the labor
arbiters decision. Grave abuse of discretion is
committed when the judgment is rendered in a
capricious, whimsical, arbitrary or despotic manner.
An abuse of discretion does not necessarily follow
just because there is a reversal by the NLRC of the
decision of the labor arbiter. Neither does variance
in the evidentiary assessment by the NLRC and by
the labor arbiter warrant as a matter of course
another full review of the facts. The NLRCs decision,
so long as it is not bereft of evidentiary support from
the records, deserves respect from the Court.[17]
G.R. No. 155651. July 28, 2005
COCA-COLA BOTTLERS PHILIPPINES, INC., SALES
FORCE UNION-PTGWO-BALAIS, Petitioners, vs.
Page 11 of 5
COCA-COLA BOTTLERS, PHILIPPINES, INC.,
Respondents.
FACTS: The Coca-Cola Bottlers Philippines, Inc. Sales
Force Union-PTGWO is a legitimate labor
organization duly registered with the Department of
Labor and Employment, and is the sole and
exclusive bargaining representative of all regular
route salesmen, regular relief route salesmen,
regular lead helpers, regular relief lead helpers,
regular route helpers, regular relief route helpers
and order-taker collectors who are assigned in
various sales offices specified in the parties
collective bargaining agreement. On the other
hand, the respondent company is a domestic
corporation duly organized and existing under the
laws of the Philippines and is engaged in the
manufacture and distribution of its soft drink
products.
In January 1989, the UNION filed a Notice of Strike
with the National Conciliation and Mediation Board
raising certain issues for conciliation. As a result of
said dispute, the UNION staged a strike.
Subsequently, the Board succeeded in making the
parties agree to a voluntary settlement of the case
via a Memorandum of Agreement signed by them
on February 9, 1989. Among others, the petitioner
and the respondent agreed, as follows:
1. Christmas Bonus- fifty (50%) percent of their
average commission for the last six (6) months.
However, in December 1999, the respondent
granted a fixed amount of P4,000.00 only,
eliminating thereby the said 50% employees
average commission for the last six months for
members of the union. Thus, claiming the same as
violation of the MOA, the union submitted its
grievance to the respondent. No settlement was
reached, hence, the case was then referred to a
Panel of Voluntary Arbitrators.
The union hereby acknowledges that the granting
of a Christmas bonus is purely a Management
prerogative and as such, in determining the
amount thereof the same is solely a discretion of
Management. The parties however agree that
henceforth whenever Management exercises this
prerogative, the same shall include the average
commission for the last six (6) months prior to the
grant.
Petitioner claimed that the MOA establishes the
companys obligation to pay additionally 50% of
the average commission whenever it decides to
grant a bonus and that the fixed amount of
P4,000.00 granted in December 1999, although
denominated as "ex-gratia" was actually a
Christmas bonus.
On the other hand, the respondent company
countered that in 1999 it suffered its worst financial
performance in its history; Four Thousand Pesos
(P4,000.00) to all its permanent employees, . .
In these circumstances the CCBPI Executive
Committee has decided that the CCBPI is not able
to pay bonuses to any staff in 1999.
After hearing and the submission of evidence and
position papers, the Arbitration Panel composed of
Apron Mangabat and Noel Sanchez, as chairman
and member, respectively, denied petitioners
claim and declared that the P4,000.00 given as ex
gratia is not a bonus, while Arnel Dolendo, another
member dissented. The dispositive portion of the
decision reads as follows:
On 30 May 2001, the Panel denied petitioners
motion for reconsideration.
In dealing with the controversy, the Court of
Appeals adopted a two-tiered approach. First, it
held that contrary to the view of the Panel, the
4,000.00 "special ex gratia" payment is a Christmas
bonus, hence, petitioners members are entitled to
the additional 50% average commission for the last
six months prior to the grant pursuant to the
Memorandum of Agreement entered into between
petitioner and respondent Coca-Cola Bottlers
Philippines, Inc. This notwithstanding, the Court of
Appeals dismissed the petition on the ground that
petitioners motion for reconsideration dated 12
March 2001 of the Decision of the Panel that was
originally received on 20 February 2001 was filed out
of time; hence, the said Decision already became
final and executory after ten (10) calendar days
from receipt of the copy of the Decision by the
parties pursuant to Article 262-A of the Labor Code.
ISSUE: W/N the 4,000.00 "special ex gratia"
payment is a Christmas bonus, hence, petitioners
members are entitled to the additional 50%
average commission for the last six months prior to
the grant pursuant to the Memorandum of
Agreement entered into between petitioner and
respondent Coca-Cola Bottlers Philippines, Inc.
HELD: YES. Rule VII, Section 1 of the "Procedural
Guidelines in the Conduct of Voluntary Arbitration
Proceedings" provides the key. Therein, what
constitutes the voluntary arbitrators decision (and,
by extension, that of the Panel of voluntary
arbitrators) is defined with precision, to wit:
Section 1. Decision Award. -- The final arbitral
disposition of issue/s submitted to voluntary
arbitration is the Decision. The disposition may take
the form of a dismissal of a claim or grant of specific
remedy, either by way of prohibition of particular
acts or specific performance of particular acts. In
the latter case the decision is called an Award.
In herein case, the Decision of the Panel was in the
form of a dismissal of petitioners complaint.
Naturally, this dismissal was contained in the main
decision and not in the dissenting opinion. Thus,
under Section 6, Rule VII of the same guidelines
implementing Article 262-A of the Labor Code, this
Decision, as a matter of course, would become
final and executory after ten (10) calendar days
from receipt of copies of the decision by the parties
even without receipt of the dissenting opinion
unless, in the meantime, a motion for
Page 12 of 5
reconsideration5 or a petition for review to the
Court of Appeals under Rule 43 of the Rules of
Court6 is filed within the same 10-day period. As
correctly pointed out by the Court of Appeals, a
dissenting opinion is not binding on the parties as it
is a mere expression of the individual view of the
dissenting member from the conclusion held by the
majority of the Court, following our ruling in Garcia
v. Perez7 as reiterated in National Union of Workers
in Hotels, Restaurants and Allied Industries v. NLRC.8
As we declared in Nacuray v. National Labor
Relations Commission12 --
. . . Nothing is more settled in law than that when a
judgment becomes final and executory it becomes
immutable and unalterable. The same may no
longer be modified in any respect, even if the
modification is meant to correct what is perceived
to be an erroneous conclusion of fact or law, and
whether made by the highest court of the land. The
reason is grounded on the fundamental
considerations of public policy and sound practice
that, at the risk of occasional error, the judgments
or orders of courts must be final at some definite
date fixed by law.
WHEREFORE, premises considered, the Court of
Appeals Decision dated 22 May 2002 and its
Resolution dated 03 October 2002 are hereby
AFFIRMED. No costs.
ROSITA PANGILINAN - versus - GENERAL MILLING
CORPORATION,
FACTS: The respondent General Milling Corporation
is a domestic corporation engaged in the
production and sale of livestock and poultry.[2] It is,
likewise, the distributor of dressed chicken to various
restaurants and establishments nationwide.[3] As
such, it employs hundreds of employees, some on a
regular basis and others on a casual basis, as
emergency workers.
The petitioners[4] were employed by the
respondent on different dates as emergency
workers at its poultry plant in Cainta, Rizal, under
separate temporary/casual contracts of
employment for a period of five months.[5] Most of
them worked as chicken dressers, while the others
served as packers or helpers.[6] Upon the expiration
of their respective contracts, their services were
terminated. They later filed separate complaints for
illegal dismissal and non-payment of holiday pay,
13th month pay, night-shift differential and service
incentive leave pay against the respondent before
the Arbitration Branch of the National Labor
Relations Commission.
The petitioners alleged that their work as chicken
dressers was necessary and desirable in the usual
business of the respondent, and added that
although they worked from 10:00 p.m. to 6:00 a.m.,
they were not paid night-shift differential.[8] They
stressed that based on the nature of their work, they
were regular employees of the respondent; hence,
could not be dismissed from their employment
unless for just cause and after due notice.
On August 18, 1997, Labor Arbiter (LA) Voltaire A.
Balitaan rendered a decision in favor of the
petitioners declaring that they were regular
employees. Finding that the termination of their
employment was not based on any of the just
causes provided for in the Labor Code, the LA
declared that they were allegedly illegally
dismissed.
ISSUE: Whether or not the petitioners were regular
employees of the respondent GMC when their
employment was terminated.
HELD: The SC held the petitioners were employees
with a fixed period, and, as such, were not regular
employees. Article 280 of the Labor Code
comprehends three kinds of employees: (a) regular
employees or those whose work is necessary or
desirable to the usual business of the employer; (b)
project employees or those whose employment has
been fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the
employment is for the duration of the season; and,
(c) casual employees or those who are neither
regular nor project employees.
A regular employee is one who is engaged to
perform activities which are necessary and
desirable in the usual business or trade of the
employer as against those which are undertaken
for a specific project or are seasonal.[41] There are
two separate instances whereby it can be
determined that an employment is regular: (1) if the
particular activity performed by the employee is
necessary or desirable in the usual business or trade
of the employer; and, (2) if the employee has been
performing the job for at least a year. Article 280 of
the Labor Code does not proscribe or prohibit an
employment contract with a fixed period. It does
not necessarily follow that where the duties of the
employee consist of activities usually necessary or
desirable in the usual business of the employer, the
parties are forbidden from agreeing on a period of
time for the performance of such activities. There is
thus nothing essentially contradictory between a
definite period of employment and the nature of
the employees duties.
Stipulations in employment contracts providing for
term employment or fixed period employment are
valid when the period were agreed upon knowingly
and voluntarily by the parties without force, duress
or improper pressure, being brought to bear upon
the employee and absent any other circumstances
vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt
with each other on more or less equal terms with no
moral dominance whatever being exercised by the
former over the latter. An examination of the
contracts entered into by the petitioners showed
that their employment was limited to a fixed period,
usually five or six months, and did not go beyond
such period. The records reveal that the stipulations
in the employment contracts were knowingly and
voluntarily agreed to by the petitioners without
Page 13 of 5
force, duress or improper pressure, or any
circumstances that vitiated their consent. Similarly,
nothing therein shows that these contracts were
used as a subterfuge by the respondent GMC to
evade the provisions of Articles 279 and 280 of the
Labor Code.
The petitioners were hired as emergency workers
and assigned as chicken dressers, packers and
helpers at the Cainta Processing Plant. While the
petitioners employment as chicken dressers is
necessary and desirable in the usual business of the
respondent, they were employed on a mere
temporary basis, since their employment was
limited to a fixed period. As such, they cannot be
said to be regular employees, but are merely
contractual employees. Consequently, there was
no illegal dismissal when the petitioners services
were terminated by reason of the expiration of their
contracts. Lack of notice of termination is of no
consequence, because when the contract
specifies the period of its duration, it terminates on
the expiration of such period. A contract for
employment for a definite period terminates by its
own term at the end of such period.
Petition is denied.
[G.R. No. 121948. October 8, 2001]
PERPETUAL HELP CREDIT COOPERATIVE, INC.,
petitioner, vs. BENEDICTO FABURADA, SISINITA
VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and the
NATIONAL LABOR RELATIONS COMMISSION, Fourth
Division, Cebu City, respondents.
On January 3, 1990, Benedicto Faburada, Sisinita
Vilar, Imelda Tamayo and Harold Catipay, private
respondents, filed a complaint against the
Perpetual Help Credit Cooperative, Inc. (PHCCI),
petitioner, with the Arbitration Branch, Department
of Labor and Employment (DOLE), Dumaguete City,
for illegal dismissal, premium pay on holidays and
rest days, separation pay, wage differential, moral
damages, and attorneys fees.
Forthwith, petitioner PHCCI filed a motion to dismiss
the complaint on the ground that there is no
employer-employee relationship between them as
private respondents are all members and co-
owners of the cooperative. Furthermore, private
respondents have not exhausted the remedies
provided in the cooperative by-laws.
On September 3, 1990, petitioner filed a
supplemental motion to dismiss alleging that Article
121 of R.A. No. 6939, otherwise known as the
Cooperative Development Authority Law which
took effect on March 26, 1990, requires conciliation
or mediation within the cooperative before a resort
to judicial proceeding.
On the same date, the Labor Arbiter denied
petitioner's motion to dismiss, holding that the case
is impressed with employer-employee relationship
and that the law on cooperatives is subservient to
the Labor Code.
On November 23, 1993, the Labor Arbiter rendered
a decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is
hereby rendered declaring complainants illegally
dismissed, thus respondent is directed to pay
Complainants backwages computed from the time
they were illegally dismissed up to the actual
reinstatement but subject to the three year
backwages rule, separation pay for one month for
every year of service since reinstatement is
evidently not feasible anymore, to pay
complainants 13th month pay, wage differentials
and Ten Percent (10%) attorneys fees from the
aggregate monetary award. However,
complainant Benedicto Faburada shall only be
awarded what are due him in proportion to the
nine and a half months that he had served the
respondent, he being a part-time employee.
All other claims are hereby dismissed for lack of
merit.
The computation of the foregoing awards is hereto
attached and forms an integral part of this decision.
That an employer-employee exists between the
parties is shown by the averments of private
respondents in their respective affidavits, carefully
considered by respondent NLRC in affirming the
Labor Arbiter's decision, thus:
Benedicto Faburada -Regular part-time Computer
programmer/ operator.
Sisinita Vilar -Clerk.
Imelda C. Tamayo - Clerk.
Harold D. Catipay - Clerk.
All of them were given a memorandum of
termination on January 2, 1990, effective
December 29, 1989.
Hence, this petition by the PHCCI.
ISSUE: whether or not there is an employer-
employee relationship between the parties and
that private respondents were illegally dismissed.
Article 280 of the Labor Code provides for three
kinds of employees: (1) regular employees or those
who have been engaged to perform activities
which are usually necessary or desirable in the usual
business or trade of the employer; (2) project
employees or those whose employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the season; and
(3) casual employees or those who are neither
regular nor project employees.[3] The employees
who are deemed regular are: (a) those who have
been engaged to perform activities which are
usually necessary or desirable in the usual trade or
business of the employer; and (b) those casual
employees who have rendered at least one (1)
year of service, whether such service is continuous
or broken, with respect to the activity in which they
Page 14 of 5
are employed.[4] Undeniably, private respondents
were rendering services necessary to the day-to-
day operations of petitioner PHCCI. This fact alone
qualified them as regular employees.
All of them, except Harold D. Catipay, worked with
petitioner for more than one (1) year: Benedicto
Faburada, for one and a half (1 1/2) years; Sisinita
Vilar, for two (2) years; and Imelda C. Tamayo, for
two (2) years and two (2) months. That Benedicto
Faburada worked only on a part-time basis, does
not mean that he is not a regular employee. Ones
regularity of employment is not determined by the
number of hours one works but by the nature and
by the length of time one has been in that
particular job.[5] Petitioner's contention that private
respondents are mere volunteer workers, not
regular employees, must necessarily fail. Its
invocation of San Jose City Electric Cooperative vs.
Ministry of Labor and Employment (173 SCRA 697,
703 (1989 ) is misplaced. The issue in this case is
whether or not the employees-members of a
cooperative can organize themselves for purposes
of collective bargaining, not whether or not the
members can be employees. Petitioner missed the
point.
As regular employees or workers, private
respondents are entitled to security of tenure. Thus,
their services may be terminated only for a valid
cause, with observance of due process.
The valid causes are categorized into two groups:
the just causes under Articles 282 of the Labor Code
and the authorized causes under Articles 283 and
284 of the same Code. The just causes are: (1)
serious misconduct or willful disobedience of lawful
orders in connection with the employees work; (2)
gross or habitual neglect of duties; (3) fraud or willful
breach of trust; (4) commission of a crime or an
offense against the person of the employer or his
immediate family member or representative; and,
analogous cases. The authorized causes are: (1) the
installation of labor-saving devices; (2) redundancy;
(3) retrenchment to prevent losses; and (4) closing
or cessation of operations of the establishment or
undertaking, unless the closing is for the purpose of
circumventing the provisions of law. Article 284
provides that an employer would be authorized to
terminate the services of an employee found to be
suffering from any disease if the employees
continued employment is prohibited by law or is
prejudicial to his health or to the health of his fellow
employees[6]
Private respondents were dismissed not for any of
the above causes. They were dismissed because
petitioner considered them to be mere voluntary
workers, being its members, and as such work at its
pleasure. Petitioner thus vehemently insists that their
dismissal is not against the law.
Procedural due process requires that the employer
serve the employees to be dismissed two (2) written
notices before the termination of their employment
is effected: (a) the first, to apprise them of the
particular acts or omissions for which their dismissal
is sought and (b) the second, to inform them of the
decision of the employer that they are being
dismissed.[7] In this case, only one notice was
served upon private respondents by petitioner. It
was in the form of a Memorandum signed by the
Manager of the Cooperative dated January 2, 1990
terminating their services effective December 29,
1989. Clearly, petitioner failed to comply with the
twin requisites of a valid notice.
We hold that private respondents have been
illegally dismissed.
As illegally dismissed employees, private
respondents are therefore entitled to reinstatement
without loss of seniority rights and other privileges
and to full backwages, inclusive of allowances, plus
other benefits or their monetary equivalent
computed from the time their compensation was
witheld from them up to the time of their actual
reinstatement.[9] Since they were dismissed after
March 21, 1989, the effectivity date of R.A. 6715[10]
they are granted full backwages, meaning, without
deducting from their backwages the earnings
derived by them elsewhere during the period of
their illegal dismissal.[11] If reinstatement is no longer
feasible, as when the relationship between
petitioner and private respondents has become
strained, payment of their separation pay in lieu of
reinstatement is in order.[12]
[G.R. No. 149440. January 28, 2003]
HACIENDA FATIMA and/or PATRICIO VILLEGAS,
ALFONSO VILLEGAS and CRISTINE SEGURA,
petitioners, vs. NATIONAL FEDERATION OF
SUGARCANE WORKERS-FOOD AND GENERAL TRADE,
respondents.
Although the employers have shown that
respondents performed work that was seasonal in
nature, they failed to prove that the latter worked
only for the duration of one particular season. In
fact, petitioners do not deny that these workers
have served them for several years already. Hence,
they are regular -- not seasonal -- employees.
FACTS: Contrary to the findings of the Labor Arbiter
that complainants [herein respondents] refused to
work and/or were choosy in the kind of jobs they
wanted to perform, the records is replete with
complainants persistence and dogged
determination in going back to work.
Indeed, it would appear that respondents did not
look with favor workers having organized
themselves into a union. Thus, when complainant
union was certified as the collective bargaining
representative in the certification elections,
respondents under the pretext that the result was
on appeal, refused to sit down with the union for
the purpose of entering into a collective bargaining
agreement. Moreover, the workers including
complainants herein were not given work for more
than one month. In protest, complainants staged a
strike which was however settled upon the signing
of a Memorandum of Agreement which stipulated
among others that:
Page 15 of 5
a) The parties will initially meet for CBA negotiations
on the 11th day of January 1991 and will endeavor
to conclude the same within thirty (30) days.
b) The management will give priority to the women
workers who are members of the union in case work
relative x x x or amount[ing] to gahit and [dipol]
arises.
c) Ariston Eruela Jr. will be given back his normal
work load which is six (6) days in a week.
d) The management will provide fifteen (15)
wagons for the workers and that existing workforce
prior to the actual strike will be given priority.
However, in case the said workforce would not be
enough, the management can hire additional
workers to supplement them.
e) The management will not anymore allow the
scabs, numbering about eighteen (18) workers[,] to
work in the hacienda; and
f) The union will immediately lift the picket upon
signing of this agreement.
However, alleging that complainants failed to load
the fifteen wagons, respondents reneged on its
commitment to sit down and bargain collectively.
Instead, respondent employed all means including
the use of private armed guards to prevent the
organizers from entering the premises.
Moreover, starting September 1991, respondents
did not any more give work assignments to the
complainants forcing the union to stage a strike on
January 2, 1992. But due to the conciliation efforts
by the DOLE, another Memorandum of Agreement
was signed by the complainants and respondents
which provides:
Whereas the union staged a strike against
management on January 2, 1992 grounded on the
dismissal of the union officials and members;
Whereas parties to the present dispute agree to
settle the case amicably once and for all
The meeting started at 10:00 A.M. A list of
employees was submitted by Atty. Tayko based on
who received their 13th month pay. The following
are deemed not considered employees:
1. Luisa Rombo; 2. Ramona Rombo; 3. Bobong
Abrega; 4. Boboy Silva
The name Orencio Rombo shall be verified in the
1990 payroll.
The following employees shall be reinstated
immediately upon availability of work:
1. Jose Dagle 7. Alejandro Tejares; 2. Rico Dagle 8.
Gaudioso Rombo; 3. Ricardo Dagle 9. Martin Alas-
as Jr.; 4. Jesus Silva 10. Cresensio Abrega; 5.
Fernando Silva 11. Ariston Eruela Sr.; 6. Ernesto
Tejares 12. Ariston Eruela Jr.
When respondents again reneged on its
commitment, complainants filed the present
complaint.
But for all their persistence, the risk they had to
undergo in conducting a strike in the face of
overwhelming odds, complainants in an ironic twist
of fate now find themselves being accused of
refusing to work and being choosy in the kind of
work they have to perform.[5] (Citations omitted)
Ruling of the Court of Appeals: The CA affirmed
that while the work of respondents was seasonal in
nature, they were considered to be merely on
leave during the off-season and were therefore still
employed by petitioners. Moreover, the workers
enjoyed security of tenure. Any infringement upon
this right was deemed by the CA to be tantamount
to illegal dismissal.
ISSUE: Whether or not the respondents, admittedly
seasonal workers, were regular employees, contrary
to the clear provisions of Article 280 of the Labor
Code, which categorically state that seasonal
employees are not covered by the definition of
regular employees under paragraph 1, nor covered
under paragraph 2 which refers exclusively to
casual employees who have served for at least one
year.
HELD: Article 280 of the Labor Code, as amended,
states:
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 exist. (Italics supplied)
For respondents to be excluded from those
classified as regular employees, it is not enough that
they perform work or services that are seasonal in
nature. They must have also been employed only
for the duration of one season. The evidence
proves the existence of the first, but not of the
second, condition. The fact that respondents -- with
the exception of Luisa Rombo, Ramona Rombo,
Bobong Abriga and Boboy Silva -- repeatedly
worked as sugarcane workers for petitioners for
several years is not denied by the latter. Evidently,
petitioners employed respondents for more than
one season. Therefore, the general rule of regular
employment is applicable.
In Abasolo v. National Labor Relations
Commission,[13] the Court issued this clarification:
[T]he test of whether or not an employee is a
regular employee has been laid down in De Leon v.
NLRC, in which this Court held:
Page 16 of 5

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 trade or
business 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
a 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.
xxxxxxxxx
x x x [T]he fact that [respondents] do not work
continuously for one whole year but only for the
duration of the x x x season does not detract from
considering them in regular employment since in a
litany of cases this Court has already settled that
seasonal workers who are called to work from time
to time and are temporarily laid off during off-
season are not separated from service in said
period, but merely considered on leave until re-
employed.[14]
The CA did not err when it ruled that Mercado v.
NLRC[15] was not applicable to the case at bar. In
the earlier case, the workers were required to
perform phases of agricultural work for a definite
period of time, after which their services would be
available to any other farm owner. They were not
hired regularly and repeatedly for the same
phase/s of agricultural work, but on and off for any
single phase thereof. On the other hand, herein
respondents, having performed the same tasks for
petitioners every season for several years, are
considered the latters regular employees for their
respective tasks. Petitioners eventual refusal to use
their services -- even if they were ready, able and
willing to perform their usual duties whenever these
were available -- and hiring of other workers to
perform the tasks originally assigned to respondents
amounted to illegal dismissal of the latter.
The Court finds no reason to disturb the CAs
dismissal of what petitioners claim was their valid
exercise of a management prerogative. The
sudden changes in work assignments reeked of
bad faith. These changes were implemented
immediately after respondents had organized
themselves into a union and started demanding
collective bargaining. Those who were union
members were effectively deprived of their jobs.
Petitioners move actually amounted to unjustified
dismissal of respondents, in violation of the Labor
Code.
Where there is no showing of clear, valid and legal
cause for the termination of employment, the law
considers the matter a case of illegal dismissal and
the burden is on the employer to prove that the
termination was for a valid and authorized
cause.[16] In the case at bar, petitioners failed to
prove any such cause for the dismissal of
respondents who, as discussed above, are regular
employees.
Unfair Labor Practice: The NLRC also found herein
petitioners guilty of unfair labor practice. It ruled as
follows: Indeed, from respondents refusal to
bargain, to their acts of economic inducements
resulting in the promotion of those who withdrew
from the union, the use of armed guards to prevent
the organizers to come in, and the dismissal of
union officials and members, one cannot but
conclude that respondents did not want a union in
their haciendaa clear interference in the right of
the workers to self-organization.[17]
FIRST DIVISION
[G.R. No. 157373. July 27, 2004]
PENTAGON INTERNATIONAL SHIPPING, INC.,
petitioner, vs. WILLIAM B. ADELANTAR,
FACTS: On August 16, 1997, respondent William B.
Adelantar was hired by Dubai Ports Authority of
Jebel Ali under an employment contract (first
contract) which provided for an unlimited period of
employment with a monthly salary of five thousand
five hundred dirhams (Dhs 5,500).
On September 3, 1997, Adelantar and petitioner
Pentagon International Shipping, Inc. (Pentagon),
for and in behalf of Dubai Ports Authority of Jebel
Ali, entered into a Philippine Overseas Employment
Administration (POEA) standard employment
contract (second contract), this time providing for
a 12-month period with basic monthly salary of
US$380.00 and fixed overtime pay of US$152.00.
Upon completion of his probationary period on April
5, 1998, Adelantars basic salary was increased to
five thousand eight hundred ninety dirhams (Dhs
5,890), while his overtime pay was increased to two
thousand three hundred fifty-six dirhams (Dhs 2,356)
effective April 1, 1998.
On June 11, 1998, however, the management
barred Adelantar from entering the port due to a
previous dispute with his superior. He was asked to
hand in his health and employment card. On the
same date, he received a letter from his employer,
stating that he was being terminated for assaulting
his superior officer, although he was promised
employment in another company.
Adelantar was eventually repatriated after nine (9)
months and seven (7) days of service. After almost
a year of waiting with no work forthcoming,
Adelantar filed a complaint for illegal dismissal with
money claim against Pentagon International
Shipping, Inc. with the NLRC.
The Labor Arbiter found that the dismissal of
Adelantar was illegal. Adelantar appealed to the
NLRC arguing that the Labor Arbiter erred in
granting backwages of only three (3) months and in
not granting attorneys fees, moral and exemplary
damages and reinstatement.
Page 17 of 5

The NLRC affirmed the Labor Arbiters decision and
held that under Section 10 of R.A. 8042, otherwise
known as the Migrant Workers and Overseas
Filipinos Act of 1995, an illegally dismissed contract
worker is entitled to the salaries corresponding to
the unexpired portion of his contract, or for three (3)
months for every year of the unexpired term,
whichever is less. Thus, the NLRC awarded
backwages to Adelantar equivalent to three (3)
months of his basic salary, but exclusive of overtime
pay.[4]
Aggrieved, Adelantar filed a petition for certiorari
with the Court of Appeals.
On September 26, 2002, the Court of Appeals
rendered judgment modifying the amounts
awarded by the Labor Arbiter and the NLRC.
ISSUE: whether or NOT the Court of Appeals
properly used as basis Article 279 of the Labor Code
in its award for backwages to Adelantar.
HELD: YES. As early as the case of Coyoca v.
NLRC,[9] we held that Filipino seamen are
governed by the Rules and Regulations of the
POEA. The Standard Employment Contract
governing the Employment of All Filipino Seamen on
Board Ocean-Going Vessels of the POEA,
particularly in Part I, Sec. C specifically provides that
the contract of seamen shall be for a fixed period.
In no case should the contract of seamen be
longer than 12 months. It reads:
Section C. Duration of Contract.
The period of employment shall be for a fixed
period but in no case to exceed 12 months and
shall be stated in the Crew contract. Any extension
of the Contract period shall be subject to the
mutual consent of the parties.
Under the circumstances, the Court of Appeals
erred in resolving the issue of backwages based on
the first contract which provided for an unlimited
period of employment as this violated the explicit
provision of the Rules and Regulations of the POEA.
While we recognize that Adelantar executed a
contract with Dubai Ports Authority of Ali Jebel and
might even have applied said contract in his
overseas station, this contract was not sanctioned
by the POEA. We agree with the NLRC when it
observed thus:
It should be stressed that whatever status of
employment or increased benefits that the
complainant may have gained while under the
employ of Dubai Ports Authority, the undisputed
fact remains that prior to his deployment, he
agreed to be hired under a 12-month POEA
contract, the duration of which is the basis for the
determination of the extent of the respondents
liability.[10]
The Court of Appeals erred when it adjudged the
first contract as the basis for Pentagons liability
instead of the second contract, which is in
conformity with the POEAs Standard Employment
Contract. As such, there would have been no need
to resort to statutory construction where the rules
and jurisprudence are clear.
Besides, in Millares v. NLRC,[11] we held that:
. . . [I]t is clear that seafarers are considered
contractual employees. They can not be
considered as regular employees under Article 280
of the Labor Code. Their employment is governed
by the contracts they sign every time they are
rehired and their employment is terminated when
the contract expires. Their employment is
contractually fixed for a certain period of time. They
fall under the exception of Article 280 whose
employment has been fixed for a specific project or
undertaking the completion or termination of which
has been determined at the time of 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.
Therefore, Adelantar, a seafarer, is not a regular
employee as defined in Article 280 of the Labor
Code. Hence, he is not entitled to full backwages
and separation pay in lieu of reinstatement as
provided in Article 279 of the Labor Code. As we
held in Millares, Adelantar is a contractual
employee whose rights and obligations are
governed primarily by Rules and Regulations of the
POEA and, more importantly, by R.A. 8042, or the
Migrant Workers and Overseas Filipinos Act of 1995.
We find, however, that the Court of Appeals
correctly awarded ten percent (10%) of the
monetary award in Adelantars favor as attorneys
fees, as he was forced to litigate and hence
incurred expenses to protect his rights and
interest.[12]
EN BANC [G.R. No. 154472. June 30, 2005]
ALEXANDER R. LOPEZ vs. METROPOLITAN
WATERWORKS AND SEWERAGE SYSTEM,
Take not from the mouth of labor the bread it has
earned. The constitutional protection to labor, a
uniform feature of the last three Constitutions
including the present one, is outstanding in its
uniqueness and as a mandate for judicial activism.
By virtue of an Agreement,[3] petitioners were
engaged by the Metropolitan Waterworks and
Sewerage System (MWSS) as collectors-contractors,
wherein the former agreed to collect from the
concessionaires of MWSS, charges, fees,
assessments of rents for water, sewer and/or
plumbing services which the MWSS bills from time to
time.[4]
In 1997, MWSS entered into a Concession
Agreement with Manila Water Service, Inc. and
Benpress-Lyonnaise, wherein the collection of bills
was transferred to said private concessionaires,
effectively terminating the contracts of service
between petitioners and MWSS. Regular employees
of the MWSS, except those who had retired or
opted to remain with the latter, were absorbed by
the concessionaires. Regular employees of the
MWSS were paid their retirement benefits, but not
Page 18 of 5
petitioners. Instead, they were refused said benefits,
MWSS relying on a resolution[5] of the Civil Service
Commission (CSC) that contract-collectors of the
MWSS are not its employees and therefore not
entitled to the benefits due regular government
employees.
Petitioners filed a complaint with the CSC. In its
Resolution dated 1 July 1999,[6] the CSC denied
their claims, stating that petitioners were engaged
by MWSS through a contract of service, which
explicitly provides that a bill collector-contractor is
not an MWSS employee.[7] Relying on Part V of
CSC Memorandum Circular No. 38, Series of 1993,
the CSC stated that contract services/job orders
are not considered government services, which do
not have to be submitted to the CSC for approval,
unlike contractual and plantilla appointments.[8]
Moreover, it found that petitioners were unable to
show that they have contractual appointments
duly attested by the CSC.[9] In addition, the CSC
stated that petitioners, not being permanent
employees of MWSS and not included in the list
.submitted to the concessionaire, are not entitled to
severance pay.[10] Petitioners claims for retirement
benefits and terminal leave pay were likewise
denied.
Petitioners sought reconsideration of the CSC
Resolution, which was however denied by the CSC.
Aggrieved, petitioners filed a petition for review
under Rule 43 of the Rules of Court with the Court of
Appeals.
Affirming and generally reiterating the ruling of the
CSC, the Court of Appeals held that the Agreement
entered into by petitioners and MWSS was clear
and unambiguous, and should be read and
interpreted according to its literal sense.[16] Hence,
as per the terms of the agreement, petitioners were
not MWSS employees.
ISSUE: Whether or not the CSC erred in finding that
petitioners are not contractual employees of the
government and, hence, are not entitled to
retirement and separation benefits?
HELD: YES. The Court has invariably affirmed that it
will not hesitate to tilt the scales of justice to the
labor class for no less than the Constitution dictates
that the State . . . shall protect the rights of workers
and promote their welfare.[50] It is committed to
this policy and has always been quick to rise to
defense in the rights of labor, as in this case.[51]
Protection to labor, it has been said, extends to all
of laborlocal and overseas, organized and
unorganized, in the public and private sectors.[52]
Besides, there is no reason not to apply this principle
in favor of workers in the government. The
government, including government-owned and
controlled corporations, as employers, should set
the example in upholding the rights and interests of
the working class.
The MWSS is a government owned and controlled
corporation with its own charter, Republic Act No.
6234.[53] As such, it is covered by the civil
service[54] and falls under the jurisdiction of the
Civil Service Commission.[55]
CSC Memorandum Circular No. 38, Series of 1993,
categorically made the distinction between
contract of services/job orders and contractual
and plantilla appointment, declaring that services
rendered under contracts of services and job orders
are non-government services which do not have to
be submitted to the CSC for approval. This was
followed by CSC Memorandum Circular No. 4,
Series of 1994, which allowed the crediting of
services for purposes of retirement only for such
services supported by duly approved
appointments. Subsequently, the CSC issued other
resolutions applying the above-mentioned circulars,
stating that while some functions may have been
contracted out by a government agency, the
persons contracted are not entitled to the benefits
due to regular government employees.[56]
For purposes of determining the existence of
employer-employee relationship, the Court has
consistently adhered to the four-fold test, namely:
(1) whether the alleged employer has the power of
selection and engagement of an employee; (2)
whether he has control of the employee with
respect to the means and methods by which work
is to be accomplished; (3) whether he has the
power to dismiss; and (4) whether the employee
was paid wages.[57] Of the four, the control test is
the most important element.
A review of the circumstances surrounding the case
reveals that petitioners are employees of MWSS.
Despite the obvious attempt of MWSS to categorize
petitioners as mere service providers, not
employees, by entering into contracts for services,
its actuations show that they are its employees,
pure and simple. MWSS wielded its power of
selection when it contracted with the individual
petitioners, undertaking separate contracts or
agreements. The same goes true for the power to
dismiss. Although termed as causes for termination
of the Agreement, a review of the same shows that
the grounds indicated therein can similarly be
grounds for termination of employment.
In addition, the control test merely calls for the
existence of the right to control, and not the
exercise thereof. It is not essential for the employer
to actually supervise the performance of duties of
the employee, it is enough that the former has a
right to wield the power.[68] While petitioners were
contract-collectors of MWSS, they were under the
latters direction as to where and how to perform
their collection and were even subject to
disciplinary measures. Trainings were in fact
conducted to ensure that petitioners are
conversant of the procedures of the MWSS.
Contrary to MWSS assertion that petitioners were
free to adopt (their) own method/strategy in the
matter of collection,[69] the Agreement clearly
provided that the procedure and/or manner of the
collection of bills to be followed shall be in
accordance with the provisions of the Manual of
Procedures.
Second, the work of the private respondents was
directly related to the principal business or
Page 19 of 5
operation of the petitioner. Being in the business of
providing water to the consumers in the East Zone,
the collection of the charges therefor by private
respondents for the petitioner can only be
categorized as clearly related to, and in the pursuit
of the latters business.
Lastly, ACGI did not carry on an independent
business or undertake the performance of its service
contract according to its own manner and method,
free from the control and supervision of its principal,
petitioner. Prior to private respondents alleged
employment with ACGI, they were already working
for petitioner, subject to its rules and regulations in
regard to the manner and method of performing
their tasks. This form of control and supervision never
changed although they were already under the
seeming employ of ACGI. These are indications that
ACGI was not left alone in the supervision and
control of its alleged employees. Consequently, it
can be concluded that ACGI was not an
independent contractor since it did not carry a
distinct business free from the control and
supervision of petitioner.[79]
Even under the four-fold test, the bill collectors
proved to be employees of Manila Water. Thus, the
Court held that:
Even the four-fold test will show that petitioner is the
employer of private respondents. The elements to
determine the existence of an employment
relationship are: (a) the selection and engagement
of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employers
power to control the employees conduct. The most
important element is the employers control of the
employees conduct, not only as to the result of the
work to be done, but also as to the means and
methods to accomplish it.
We agree with the Labor Arbiter that in the three
stages of private respondents services with the
petitioner, i.e., (1) from August 1, 1997 to August 31,
1997; (2) from September 1, 1997 to November 30,
1997; and (3) from December 1, 1997 to February 8,
1999, the latter exercised control and supervision
over the formers conduct.
In fine, the Court found that the so-called
independent contractor did not have substantial
capitalization or investment in the form of tools,
equipment, machineries, work premises and other
material to qualify as an independent contractor.
Moreover, respondents therein reported daily to the
Manila Water branch office and dealt with the
consumers through receipts and I.D.s. issued by the
latter. Likewise, their work was directly related to
and in the pursuit of Manila Waters principal
business. More importantly, the Court noted that
ACGI did not carry a distinct business free from the
control and supervision of Manila Water.
The similarity between this case and the instant
petition cannot be denied. For one, the
respondents in said case are petitioners in this
case.[81] Second, the work set-up was essentially
the same. While the bill collectors were individually
hired, or eventually engaged through ACGI, they
were under the direct control and supervision of the
concessionaire, much like the arrangement
between herein petitioners and MWSS. Third, they
performed the same vital function of collection in
both cases. Fourth, they worked exclusively for their
employers. Hence, the bill collectors in the Manila
Water case were declared employees of Manila
Water despite the existence of a sham labor
contractor. In the present case, petitioners were
directly and individually hired by MWSS, the latter
not resoting to the intermediary labor contractor
artifice, but a mere a scrap of paper impudently
declaring the bill collectors to be not employees of
MWSS. With greater reason, therefore, should the
actuality of the employer-employee relationship
between MWSS and petitioners be recognized.
Petitioners are indeed regular employees of the
MWSS. The primary standard of determining regular
employment is the reasonable connection
between the particular activity performed by the
employee in relation to the usual business or trade
of the employer. The 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. Likewise,
the repeated and continuing need for the
performance of the job has been deemed
sufficient evidence of the necessity, if not
indispensability of the activity to the business.[84]
Some of the petitioners had rendered more than
two decades of service to the MWSS. The
continuous and repeated rehiring of these bill
collectors indicate the necessity and desirability of
their services, as well as the importance of the role
of bill collectors in the MWSS.
PHIL. FEDERATION OF CREDIT COOPERATIVES, INC.
(PECCI) and FR. BENEDICTO JAYOMA, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION (First
Division) and VICTORIA ABRIL, respondents.
FACTS: Victoria Abril was employed by PFCCI in
different capacities from 1982 to 1988, when she
went on leave until she gave birth. When she went
back in 1989, after 8 months, another employee
had been permanently appointed to her former
position of office secretary. She accepted a
position of Regional Field Officer. The contract
reads:
"That the employer hires the employee on
contractual basis to the position of Regional Field
Officer of Region 4 under FCCI/WOCCU/Aid Project
No. 8175 and to do the function as stipulated in the
job description assigned to him (her): on
probationary status effective February 17/90 for a
period not to exceed six (6) months from said
effectivity, subject to renewal of this contract
should the employee's performance be
satisfactory."
- Said period having elapsed, respondent was
allowed to work until PFCCI presented to her
another employment contract for a period of one
year commencing on January 2, 1991 until
December 31, 1991, after which period, her
employment was terminated.
- LA dismissed her complaint for illegal dismissal
against PFCCI.
Page 20 of 5
- NLRC set aside LAs decision and ordered her
reinstated to her last position held (RFO) or to an
equivalent position, with full backwages from Jan 1,
1992 until she is reinstated.
ISSUE: Whether or not Abril was a probationary
employee.
RULING: No. Abril is a regular employee.
It is an elementary rule in the law on labor relations
that a probationary employee who is engaged to
work beyond the probationary period of six months,
as provided under Art. 281 of the Labor Code, as
amended, or for any length of time set forth by the
employer, shall be considered a regular employee.
Article 281 of the Labor Code, as amended, allows
the employer to secure the services of an
employee on a probationary basis which allows
him to terminate the latter for just cause or upon
failure to qualify in accordance with reasonable
standards set forth by the employer at the time of
his engagement. As defined in the case of
International Catholic Migration v. NLRC, a
probationary employee is one who is on trial by an
employer during which the employer determines
whether or not he is qualified for permanent
employment. A probationary employment is made
to afford the employer an opportunity to observe
the fitness of a probationer while at work, and to
ascertain whether he will become a proper and
efficient employee.
CEBU MARINE BEACH RESORT, OFELIA PELAEZ AND
TSUYOSHI SASAKI, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION (FOURTH DIVISION), RIC
RODRIGO RODRIGUEZ, MANULITO VILLEGAS and
LORNA G. IGOT, respondents.
FACTS: Cebu Marine Beach Resort owned by Victor
Dualan, started operations with the recruitment of
its employees, including Ric Rodrigo Rodriguez,
Manulita Villegas and Lorna G. Igot. Since it wanted
to cater to Japanese guests, employees in the
resort had to undergo Japanese customs training
under Tsuyoshi Sasaki, also a petitioner
May 24 1990: Sasaki threw brooms, floor maps, iron
trays, fire hoses and other things to the respondents
while scolding them. Sasaki also screamed to go
home and never come back respondents filed at
Regional Arbitration Branch at Cebu City a
complaint for illegal dismissal and other monetary
claims.
Thereafter, Labor Arbiter dismissed the case but
ordered them to go back to work
On appeal, NLRC reversed Labor Arbiters decision
which ruled that Respondents were illegally
dismissed
And Ordered full back wages om May 24, 1990 up
to their actual reinstatement, separation pay and
attorney fees.
On February 28, 1995: the NLRC issued a Resolution
declaring that the back wages shall correspond
only to the period from May 24, 1990 (the date of
their dismissal) until March 23, 1993 (when they were
ordered reinstated by the Labor Arbiter), subject to
the deduction of their earnings from other sources
during the pendency of the appeal.
Mar 22 1995: filed in this court petition for certiorari.
The Supreme Court however sent this case to the
Court of Appeals (CA) pursuant to St Martins
Funeral vs NLRC. In this case, the Court of Appeals
approves NLRCs decision and came up with the
decision that respondents were illegally dismissed.
The petitioners a filed motion for reconsideration
however it was denied.
Hence this petition, Petitioners contend: Appellate
Court committed a serious error when it unilaterally
extended the 6-month probationary employment
contracts of the respondents by awarding them full
backwages, or in lieu of their reinstatement, when it
ordered payment of their separation pay
computed from the time of their dismissal up to the
finality of its Decision
ISSUE: Whether or not probationary employees are
entitled to security of tenure.
RULING: Yes, probationary employees do not enjoy
permanent status. However, they are entitled to the
constitutional protection of security of
tenure. Under the law, Probationary employees
employment may only be terminated for just cause
or when they fail to qualify as regular employees in
accordance with reasonable standards made
known to them by their employer at the time of
engagement, and after due process.
Instead of reinstatement, they were awarded
separation pay equivalent to at least one month
pay, or one month pay for every year of service,
whichever is higher; and their full backwages, other
privileges and benefits, or their monetary equivalent
during the period of their dismissal up to their
supposed actual reinstatement
ORIENT EXPRESS PLACEMENT PHILIPPINES, PETITIONER,
VS. NATIONAL LABOR RELATIONS COMMISSION,
PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION AND ANTONIO F. FLORES,
RESPONDENTS.
FACTS: ANTONIO F. FLORES was hired as crane
operator by ORIENT EXPRESS PLACEMENT
PHILIPPINES for 1 year, subject to a 3-month
probationary period. However, after 1 month and 5
days in Saudi Arabia, Flores was repatriated to the
Philippines. Consequently, he filed a complaint with
the POEA for having been terminated from work for
no valid reason. ORIENT EXPRESS and NADRICO
countered that Flores was terminated for poor job
performance.
On 7/14/1992, POEA rendered a decision in
favor of complainant. It was observed that neither
ORIENT EXPRESS nor NADRICO pointed out the
reasonable standards of work required of Flores by
which his incompetency was adjudged; much less
did they specify how the latter failed to live up to
such reasonable standards. Hence, his dismissal was
unwarranted.
Page 21 of 5
 On appeal, NLRC affirmed the POEA
decision. In addition, it ruled that the designation of
Flores as floorman instead of crane operator for
which he was hired violated his employment
contract. The NLRC concluded that since Flores
never worked as crane operator, his foreign
employer could not have observed and assessed
his performance as such and then come up with a
performance evaluation sheet, especially
considering his consistent claim that he was made
to work as floorman instead. Subsequent motion for
reconsideration filed by ORIENT EXPRESS and
NADRICO was denied. Hence, this petition.
ISSUE: Whether or not the dismissal of FLORES is valid
RULING: Under Art. 281 of the Labor Code, the
services of an employee hired on a probationary
basis may be terminated when he fails to qualify as
a regular employee in accordance with reasonable
standards made known by the employer to the
employee at the time of his engagement. However,
the Court cannot sustain his dismissal on this ground
because petitioner failed to specify the reasonable
standards by which private respondent's alleged
poor performance was evaluated, much less to
prove that such standards were made known to him
at the time of his recruitment in Manila. Both private
respondent's Agency-Worker Agreement with
ORIENT EXPRESS and NADRICO never mentioned
that:
He must first take and pass a Crane
Operators' License Examination in Saudi
Arabia before he would be allowed to even
touch a crane
He would be assigned as floorman pending
release of the results of the examination or in
the event that he failed;
He would be subjected to a performance
evaluation by his superior 1 month after his
hiring to determine whether the company
was amenable to continuing with his
employment.
Hence, respondent Flores could not be faulted
for precisely harboring the impression that he was
hired as crane operator for a definite period of 1
year to commence upon his arrival at the work-site
and to terminate at the end of 1 year. No other
condition was laid out except that he was to be on
probation for 3 months. No standard whatsoever by
which such probationary period could be hurdled
was specified and made known to him.
Due process dictates that an employee be
apprised beforehand of the condition of his
employment and of the terms of advancement
therein. Precisely, implicit in Art. 281 of the Code is
the requirement that reasonable standards be
previously made known by the employer to the
probationary employee at the time of his
engagement, such an essential requirement was
not met by petitioner, even assuming that Flores'
alleged unsatisfactory performance was true.
Besides, unsatisfactory performance is not one of
the just causes for dismissal under the Labor Code.
A PRIME SECURITY SERVICES, INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION
(SECOND DIVISION), HON. ARBITER VALENTIN
GUANIO, and OTHELLO MORENO, respondents.
FACTS: Private respondent Othello Moreno worked
as a security guard for a year with Sugarland
Security Services Inc, a sister company of petitioner.
He was rehired as a security guard on January 30,
1988 by the petitioner and assigned to the same
post at the U.S. Embassy Building; that he was
among those absorbed by the petitioner when it
took over the security contracts of its sister
company with the U.S. Embassy.
Private respondent Othello Moreno filed a
complaint against petitioner A Prime Security for
illegal dismissal, illegal deduction and
underpayment of wages. Moreno alleged that he
was forced by petitioner to sign new probationary
contracts of employment for 6 months and further
alleged that on August 1, 1988, his employment was
terminated. Moreno also claimed that during his
employment, the amount of P20.00 per month was
deducted from his salary allegedly for withholding
tax, and the salary he was receiving was only
P2,187.00 a month, which was way below the
P2,410.17 stipulated in the PADPAO memorandum
of agreement.
On the other hand, petitioner, A Prime Security,
alleged that the private respondent was hired on
January 30, 1988, on a probationary basis, and he
signed an authority to deduct from his salary any
reimbursement for any loss or damage caused to
properties of the client; that he was given a copy of
petitioners rules and regulations which provide that
sleeping on post is punishable by warning,
suspension and dismissal and he was caught
sleeping on post on March 17, 1988, for which he
was sent a memorandum giving him a last warning;
that on March 25, 1988, he figured in a quarrel with
another security guard, which resulted in a near
shootout; that at the end of his probationary
employment, he was given a psychological test
and on the basis of the foregoing, petitioner told
him that his probationary employment had come
to an end as he did not pass the company
standard and therefore, he could not be hired as a
regular employee.
Labor Arbiter handed down a decision in favor of
complainant. The respondent was ordered to
reinstate the complainant to his former position and
accord to him the status of a regular employee,
and to refund to the complainant the deduction it
had made from his salary in the amount of P20.00
per month.
NLRC affirmed the decision with a slight
modification: the refund of the deductions made
by respondent from complainants salaries in the
amount of P20.00 per month was vacated and set
aside.
ISSUE: Whether or not private respondents
employment with A Prime Security Services, Inc.
was just a continuation of his employment with
Sugarland Security Services, Inc
Page 22 of 5

RULING: YES. On the issue as to whether the private
respondent is a probationary or regular employee,
the Court holds that the latter became a regular
employee upon completion of his six-month period
of probation. Private respondent started working on
January 30, 1988 and completed the said period of
probation on July 27, 1988. Thus, at the time private
respondent was dismissed on August 1, 1988, he
was already a regular employee with a security of
tenure. He could only be dismissed for a just and
authorized cause.
There is no basis for subjecting private respondent
to a new probationary or temporary employment
on January 30, 1988, considering that he was
already a regular employee when he was
absorbed by A' Prime from Sugarland, its sister
company.
The Court cannot sanction the practice of some
companies which, shortly after a worker has
become a regular employee, effects the transfer of
the same employee to another entity whose
owners are the same, or identical, in order to
deprive subject employee of the benefits and
protection he is entitled to under the law.
The allegations of the private respondent that
Sugarland is a sister company of A Prime and that
the latter absorbed the security contracts and
security guards of Sugarland with the U.S. Embassy
were neither denied nor controverted by the
petitioner before the Labor Arbiter.
Petitioners failure to deny that Sugarland is its sister
company and that petitioner absorbed Sugarlands
security contract and security personnel assumes
overriding significance over the resignation
theorized upon, evincing petitioners design to
ignore or violate labor laws through the use of the
veil of corporate personality.
Mitsubishi Motors Corp vs NLRC
FACTS:
Mitsubishi Motors Philippines Corporation (MMPC) is
a domestic corporation engaged in the assembly
and distribution of Mitsubishi motor vehicles.
Chrysler Philippines Labor Union (CPLU) is a
legitimate labor organization and the duly certified
bargaining agent of the hourly-paid regular rank
and file employees of MMPC. Nelson Paras was a
member of CPLU while wife, Cecille Paras, was the
President of the Chrysler Philippines Salaried
Employees Union (CPSU).
Nelson Paras was first employed by MMPC as a
shuttle bus driver. He resigned and went to Saudi
Arabia to work as a diesel mechanic and heavy
equipment operator in from 1982 to 1993. When he
returned to the Philippines, he was re-hired as a
welder-fabricator at MMPC tooling shop from
October 3,1994 to October 31, 1994. On October
29, 1994, his contract was renewed from November
1, 1994 up to March 3, 1995.
Sometime in May of 1996, Paras was re-hired on a
probationary basis as a manufacturing trainee at
the Plant Engineering Maintenance Department.
He and the new and re-hired employees were
given an orientation on May 15, 1996 respecting the
company's history, corporate philosophy,
organizational structure, and company rules and
regulations, including the company standards for
regularization, code of conduct and company-
provided benefits. Paras started reporting for work
on May 27, 1996. He was assigned at the paint
ovens, air make-up and conveyors. As part of the
MMPC's policy, Paras was evaluated by his
immediate supervisors after six (6) months, and
received an average rating. Later, his supervisor
informed Paras that based on his performance
rating, he would be regularized.
However, the Department and Division Managers,
reviewed the performance evaluation made on
Paras. They unanimously agreed, along with Paras'
immediate supervisors, that the performance of
Paras was unsatisfactory. As a consequence, Paras
was not considered for regularization. On
November 26, 1996, he received a Notice of
Termination dated November 25, 1996, informing
him that his services were terminated effective the
said date since he failed to meet the required
company standards for regularization.
ISSUE:Whether or not Paras was already a regular
employee on November 26, 1996.
RULING: Yes, Paras was already a regular
employee.
An employer, in the exercise of its management
prerogative, may hire an employee on a
probationary basis in order to determine his fitness
to perform work. Under Article 281 of the Labor
Code, the employer must inform the employee of
the standards for which his employment may be
considered for regularization. Such probationary
period, unless covered by an apprenticeship
agreement, shall not exceed six (6) months from
the date the employee started working. The
employees services may be terminated for just
cause or for his failure to qualify as a regular
employee based on reasonable standards made
known to him.
Respondent Paras was employed as a
management trainee on a probationary basis.
During the orientation conducted on May 15, 1996,
he was apprised of the standards upon which his
regularization would be based. He reported for
work on May 27, 1996. As per the company's policy,
the probationary period was from three (3) months
to a maximum of six (6) months.
Applying Article 13 of the Civil Code, the
probationary period of six (6) months consists of one
hundred eighty (180) days. This is in conformity with
paragraph one, Article 13 of the Civil Code, which
provides that the months which are not designated
by their names shall be understood as consisting of
thirty (30) days each. The number of months in the
probationary period, six (6), should then be
multiplied by the number of days within a month,
thirty (30); hence, the period of one hundred eighty
(180) days.
As clearly provided for in the last paragraph of
Article 13, in computing a period, the first day shall
Page 23 of 5
be excluded and the last day included. Thus, the
one hundred eighty (180) days commenced on
May 27, 1996, and ended on November 23, 1996.
The termination letter dated November 25, 1996 was
served on respondent Paras only at 3:00 a.m. of
November 26, 1996.He was, by then, already a
regular employee of the petitioner under Article 281
of the Labor Code
RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, MIDDLEBY PHILIPPINES
CORPORATION/FRANK THOMAS, XAVIER G. PEA and
TRIFONA F. MAMARADLO, respondents.
FACTS: Petitioner Radin C. Alcira was hired by
respondent Middleby as engineering support
services supervisor on a probationary period for six
months.
Despite the indication of probationary period in the
appointment paper, the dates indicated in the
copies in the possession of the petitioner and the
respondent, were different, May 20, 1996 and May
27, 1996, respectively.
On November 20, 1996, unhappy with petitioners
performance, respondent Middeby terminated the
formers services.
But according to the petitioner he is already a
regular employee effective November 16, 1996,
using Article 13 of the Civil Code that one month is
composed of 30 days, six months total 180 days.
Hence, using May 20, 1996 as the reference point, it
was already considered a dismissal since it was
made after the lapse of his probationary
employment.
ISSUE: WHETHER OR NOT PROBATIONARY
EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE
PERIOD
RULING: Section 6 (d) of Rule 1 of the Implementing
Rules of Book VI of the Labor Code (Department
Order No. 10, Series of 1997) provides that:
(d) In all cases of probationary employment, the
employer shall make known to the employee the
standards under which he will qualify as a regular
employee at the time of his engagement. Where no
standards are made known to the employee at that
time, he shall be deemed a regular employee.
We hold that respondent Middleby substantially
notified petitioner of the standards to qualify as a
regular employee when it apprised him, at the start
of his employment, that it would evaluate his
supervisory skills after five months.
Conversely, an employer is deemed to substantially
comply with the rule on notification of standards if
he apprises the employee that he will be subjected
to a performance evaluation on a particular date
after his hiring. We agree with the labor arbiter
when he ruled that:
In the instant case, petitioner cannot successfully
say that he was never informed by private
respondent of the standards that he must satisfy in
order to be converted into regular status. This rans
(sic) counter to the agreement between the parties
that after five months of service the petitioners
performance would be evaluated. It is only but
natural that the evaluation should be made vis--vis
the performance standards for the job. Private
respondent Trifona Mamaradlo speaks of such
standard in her affidavit referring to the fact that
petitioner did not perform well in his assigned work
and his attitude was below par compared to the
companys standard required of him.
EXTENSION OF CONTRACT
MARIWASA MANUFACTURING v LEOGARDO
(Narvasa, 1989)
QUICK FACTS: Dequila, a probationary utility worker
of Mariwasa, agreed to have his probationary
period extended for another 3 months after the first
6 months, so that he may have another chance to
improve his performance and qualify as a regular
worker. After the extension, he was terminated.
FACTS:
Joaquin A. Dequila (or Dequilla) was hired on
probation by Mariwasa Manufacturing, Inc. as a
general utility worker on January 10, 1979. After 6
months, he was informed that his work was
unsatisfactory and had failed to meet the required
standards. To give him another chance, and with
Dequilas written consent, Mariwasa extended
Dequilas probationary period for another three
months: from July 10 to October 9, 1979. Dequilas
performance, however, did not improve and
Mariwasa terminated his employment at the end of
the extended period.
Dequila filed a complaint for illegal dismissal against
Mariwasa and its VP for Administration, Angel T.
Dazo, and violation of Presidential Decrees Nos. 928
and 1389.
DIRECTOR OF MINISTRY OF LABOR: Complaint is
dismissed. Termination is justified. Thus, Dequila
appeals to the Minister of Labor.
MINISTER OF LABOR: Deputy Minister Vicente
Leogardo, Jr. held that Dequila was already a
regular employee at the time of his dismissal, thus,
he was illegally dismissed. (Initial order:
Reinstatement with full backwages. Later amended
to direct payment of Dequila's backwages from the
date of his dismissal to December 20, 1982 only.)
ISSUE: WON employer and employee may, by
agreement, extend the probationary period of
employment beyond the six months prescribed in
Art. 282 of the Labor Code?
RULING: YES, agreements stipulating longer
probationary periods may constitute lawful
exceptions to the statutory prescription limiting such
periods to six months.
Page 24 of 5
The SC in its decision in Buiser vs. Leogardo, Jr.
(1984) said that Generally, the probationary period
of employment is limited to six (6) months. The
exception to this general rule is when the parties to
an employment contract may agree otherwise,
such as when the same is established by company
policy or when the same is required by the nature
of work to be performed by the employee. In the
latter case, there is recognition of the exercise of
managerial prerogatives in requiring a longer
period of probationary employment, such as in the
present case where the probationary period was
set for eighteen (18) months, i.e. from May, 1980 to
October, 1981 inclusive, especially where the
employee must learn a particular kind of work such
as selling, or when the job requires certain
qualifications, skills experience or training.
In this case, the extension given to Dequila could
not have been pre-arranged to avoid the legal
consequences of a probationary period
satisfactorily completed. In fact, it was ex gratia,
an act of liberality on the part of his employer
affording him a second chance to make good
after having initially failed to prove his worth as an
employee. Such an act cannot now unjustly be
turned against said employer's account to compel
it to keep on its payroll one who could not perform
according to its work standards.
By voluntarily agreeing to an extension of the
probationary period, Dequila in effect waived any
benefit attaching to the completion of said period
if he still failed to make the grade during the period
of extension. By reasonably extending the period of
probation, the questioned agreement actually
improved the probationary employee's prospects
of demonstrating his fitness for regular employment.
Petition granted. Order of Deputy Minister Leogardo
reversed. Case for illegal dismissal is dismissed.
ABSORBED EMPLOYEES
CEBU STEVEDORING vs. REGIONAL DIRECTOR
Cebu Stevedoring Co., Inc. vs. The Honorable
Regional Director/Minister of Labor Arsenio Gelig
and Maria Luz Quijano
December 8, 1988
Regalado, J.
FACTS
Arsenio Gelig and Maria Luz Quijano were former
employees of the Cebu Customs Arrastre Service
(CCAS).
May 2, 1977 Pursuant to Customs Administrative
Order No. 21-77 of Acting Commissioner of Customs
and Acting Secretary of Finance, the CCAS was
abolished for the reason that the objectives for
which it was created had already been attained.
As a consequence, all the employees of CCAS,
including Gelig and Quijano, were given their
termination and/or separation pay by the Bureau of
Customs, Cebu City, computed up to April 30, 1977.
May 3, 1977 all the employees of CCAS, including
Gelig and Quijano, were absorbed by Cebu
Stevedoring Co., Inc. (CSCI), with the same
positions that they held in CCAS.
October 17, 1977 Gelig and Quijano were
dismissed by CSCI without prior clearance,
allegedly for redundancy.
Gelig and Quijano filed a complaint for
reinstatement with backwages.
Regional Office of Ministry of Labor:
Gelig and Quijano were employed by CCAS and
their functions were carried over when they were
absorbed by CSCI. There was no need to employ
them as probationary because they were already
well-trained in their functions. A probationary period
of employment means that an employee is hired for
training for a certain period in order to determine
whether they qualify for the position or not. Here,
Gelig and Quijano cannot be considered
probationary.
Minister of Labor affirmed. CSCI elevated the case
to the Office of the President which, through
Presidential Executive Assistant Jacobo Clave,
issued a resolution dismissing the appeal as there
Page 25 of 5
was no law expressly recognizing the parties right
to appeal to the Office of the Pres and there was
no exceptionally meritorious cause for the exercise
of the constitutional power of review of the
President/Prime Minister.
CSCIs position:
1. Upon abolition of CCAS, all its employees
were given separation pay. Thus, when the
employees were absorbed by CSCI when it
took over the arrastre operations, they were
all employed as casuals.
2. As casuals, Gelig and Quijano can be
terminated within the 6-month period
without need of clearance from Ministry of
Labor and neither is the employer obligated
to pay them termination pay. Gelig and
Quijano were terminated on October 18,
1977 or within 5 months from employment.
3. The positions occupied by Gelig and
Quijano with CCAS were identical with the
positions already filled up and with the same
functions being discharged in the main
office of CSCI. Thus, they may be
terminated for redundancy and financial
losses incurred by CSCI justify the
retrenchment of employees.
time this supposed program was mentioned
was when CSCI was trying to justify the
dismissal of Gelig and Quijano before the
labor arbiter.
The constitutional duty of the State to protect the
right of laborers to security of tenure demands than
an employer may be permitted to terminate the
services of an employee only under conditions
allowed by and with due process of law.
DISPOSITIVE
Termination of Gelig and Quijano was unjust and
illegal. CSCI is ordered to reinstate Gelig and
Quijano to their fromer positions at the time of
dismissal, or if such reinstatement is not possible, to
substantially equivalent positions, without loss of
seniority rights and other privileges appertaining
thereto and to pay them 3 years backwards, from
Octber 18, 1977 without qualification or deduction.
If reinstatement is not possible due to
supervenience of events which prevent the same,
CSCI is ordered to pay them, more as a vindication
of a right and less as indemnification of a loss,
separation pay equivalent to 1 months salary
based on their monthly salaries as of October 17,
1977.

ISSUE: Whether the termination of Gelig and

Quijano (and 52 others) was valid (NO)

REASONING

Gelig and Quijano could not be considered

probationary employees because they were
already well-trained in their respective functions.
Gelig had been a clerk for CCAS for more than 10
years, while Quijano had slightly less than 10 years
of service.

Findings of quasi-judicial agencies (pertaining to

Ministry of Labor here) which have acquired
expertise because their jurisdiction is confined to
specific matters are generally accorded not only
respect but, at times, even finality where such
findings are supported by substantial evidence.

It is true that Article 283 of the Labor Code provides

that an employer may also terminate the
employment of any employee due to the
installation of labor-serving devices, redundancy,
retrenchment to prevent losses or the closing or
cessation of operation of the establishment or
undertaking.

BUT:
1. Records failed to establish that the positions
occupied by Gelig and Quijano with CCAS
are identical with those presently existing in
CSCIs office.
2. CSCI kept them in its employ for almost 6
months without raising issue of redundancy.
3. CSCIs submission that it is suffering financial
losses is untenable since it absorbed and
employed for almost 6 months, without any
intimation of supposed financial distress, the
majority of the former employees of CCAS. It
never advised Gelig and Quijano of a
company retrenchment program. The first
Page 26 of 5
RULES ON PRIVATE SCHOOL TEACHERS

[G.R. No. 121962. April 30, 1999]

ESPERANZA C. ESCORPIZO, and UNIVERSITY OF

BAGUIO FACULTY EDUCATION WORKERS
UNION, petitioners, vs. UNIVERSITY OF BAGUIO and
VIRGILIO C. BAUTISTA and NATIONAL LABOR
RELATIONS COMMISSION, respondents.

FACTS
Esperanza Escorpizo was a high school teacher in
the University of Baguio contracted to be a
probationary teacher from 1989-1991. The terms of
her employment stipulate that in order for her to be
regularized, she should get a satisfactory rating and
she should pass the board examination for
teachers. After the lapse of her probationary
period, UB was not supposed to re-sign her because
she failed the board exam but upon her pleading
she was re-signed for one year but still a
probationary. She took the board exam again but
she failed during the same school year. So when UB
was considering the list of teachers for next year,
Escopizo was no longer considered. Meanwhile,
Escorpizo again took the exam this time she passed.
But UB no longer took her in to teach. Her labor
union assisted her in suing UB averring that in the
CBA, passing the board is not a requisite to be
regularized.
ISSUE: Whether or not Escorpizo should be reinstated
as a teacher.
HELD: No. Escorpizo was not illegally dismissed. UB
was well within its right to require its teachers to pass
the board before teaching, The Department of
Education also rolled out an order requiring that
teachers should pass the board before teaching.
This is to ensure the quality of education in the
country. As between the CBA and the DECS order,
what should prevail is the requirements so provided
by the government.

Page 27 of 5
RULES ON PRIVATE SCHOOL TEACHERS
[G. R. No. 127241. September 28, 2001]
LA CONSOLACION COLLEGE, SR. ROSALINDA BAYLA,
SR. CELIA BAYONA, REODITA MABAYAG, JUDITH
VERDADERO and JOSE BAYOGUING, petitioners,
vs. NATIONAL LABOR RELATIONS
COMMISSION and JOSE DE LA PEA, III, respondents.
FACTS
La Consolacion College (LCC) initially
employed Jose de la Pea III as a CAT Commandant
and YCAP Coordinator for school year 1975-1976.
His employment as YCAP coordinator lasted until 29
September 1979, after which he resigned. He
severed all ties with LCC when he left in 1980.Prior to
his resignation and despite demands by LCC for
him to submit a syllabi in YDT I, II, III, and CAT I
containing course objectives, subject matter,
content, concepts, skills, activities and evaluation
not later than 12 November 1979, respondent de la
Pea failed to comply.
After his employment with LCC, respondent de
la Pea sought and found employment in other
establishments.
However, on 2 December 1991, LCC received
an application from respondent de la Pea. The
applicant requested that he be considered for the
positions of CAT Commander and YDT Instructor,
positions he held for eleven (11) years prior to his
resignation from LCC.
In June 1992, LCC appointed respondent de la
Pea as a classroom teacher in physical education
and health, a position he never held during his
previous employment with LCC.
The written contract of employment between
LCC and respondent de la Pea expressly provided
that the employment was for one (1) academic
year, that is, from June 1992 to March
1993. Respondent de la Pea accepted such
condition.[6]
On 14 July 1992, petitioner Jose B. Bayoguing,
Jr., a member of the academic team tasked to
evaluate the performance of the schools teachers,
reminded respondent de la Pea in writing to
comply with the requirements and standard
operating procedure of the school, namely; timely
submission of lesson plans, class records and other
papers, attendance at regular monthly meetings,
and informing the school of absences. Respondent
de la Pea ignored the reminder without any valid
reason, and continued to defy these requirements
and procedures.
On 27 November 1992, respondent de la Pea
called an emergency meeting of faculty members.
In said meeting, respondent de la Pea berated
petitioner Bayoguing, shouted invectives, ridiculed
and threatened Bayoguing with bodily harm. No
untoward incident ensued as petitioner Bayoguing
kept his composure. During the same faculty
meeting, respondent de la Pea was physically
restrained by his fellow teachers whenever he
would charge the person of petitioner Bayoguing.
On 08 February 1993, respondent de la Pea
wrote petitioner Sis. Rosalinda Bayla, O.S.A., princip
al of High School, stating that he would like to apply
for reinstatement as a faculty member for SY 1993-
1994. [9]
In a letter dated 11 March 1993, the academic
team composed of petitioners Erodita P. Madayag,
Verdadero and Bayoguing informed respondent de
la Pea of his unsatisfactory performance and
advised him that the school would no longer hire
him for the incoming school year.
On 9 June 1993, respondent de la Pea filed
with Regional Arbitration Branch No. VI, Bacolod
City a complaint against LCC and/or Rosalinda
Bayla, Sr. Celia Bayona, Erodita Mabayag, Judith
Verdadero and Jose Bayoguing, for illegal dismissal,
moral damages and exemplary damages. After
submission of position papers, on 11 November
1994, Labor Arbiter Reynaldo J. Gumaltico rendered
a decision dismissing the complaint, holding that at
the time respondent de la Pea was dismissed, he
had not attained regular status. The Labor Arbiter
also found respondent de la Pea guilty of serious
misconduct and gross disobedience which were
just causes for termination of service.
On appeal to the NLRC, on 31 January 1996,
the NLRC rendered a resolution reversing the
decision of the labor arbiter. The NLRC held that
respondent de la Pea attained regular status at the
time he was dismissed and that LCC failed to prove
the existence of just cause to warrant his
dismissal.] On 4 March 1996, LCC filed a motion for
reconsideration of the NLRC decision; however, on
19 August 1996, the NLRC denied the motion.
ISSUE
WHETHER OR NOT the NLRC committed palpable
error amounting to grave abuse of discretion in
ruling that respondent Jose de la Pea was a regular
or permanent employee of La Consolacion College
in a position in which he had not undergone the
three (3) year probationary period provided in the
manual of regulations for private schools.
RULING
The Supreme Court reverse the NLRC decision
having been issued in grave abuse of discretion.
In the case at bar, there is a written contract
defining the period of employment of respondent
de la Pea.
Clearly, the employment was not permanent
but for a specified duration of one school year.
In resolving the issue of whether or not
respondent de la Pea was permanent employee of
petitioner, it is the Manual of Regulations for Private
Schools, not the Labor Code, which is
applicable. This was settled in University of Sto.
Tomas v. NLRC, where we ruled that for a private
school teacher to acquire permanent status in
Page 28 of 5
employment the following requisites must
concur: (1) the teacher is a full-time teacher; (2) the
teacher must have rendered three (3) consecutive
years of service; and (3) such service must have
been satisfactory

Page 29 of 5
CHIANG KAI SHEK COLLEGE, and CHIEN YIN
SHAO, petitioners, vs. HON. COURT OF APPEALS;
HON. NATIONAL LABOR RELATIONS COMMISSION;
HON. COMMISSIONER VICTORIANO R. CALAYLAY,
HON. PRESIDING COMMISSIONER RAUL T. AQUINO,
and HON. COMMISSIONER ANGELITA A. GACUTAN;
and MS. DIANA P. BELO, respondents.
G.R. No. 152988 August 24, 2004
1993-1994. In fact, they should not have required
her to re-apply to teach. In accordance with the
written statement of policies dated 12 March 1993,
only probationary teachers are required by the
petitioners to re-apply in March. Failure of
probationary teachers to re-apply in March is an
indication of their lack of interest to teach again at
the school.

Facts: Private respondent Belo was employed as a Petitioners invocation of the third policy that of
permanent teacher by petitioner CKSC for 15 years. giving teaching assignments to probationary
Belo had to take a leave of absence for the S.Y. teachers in April to justify their refusal to provide
1992 1993 due to personal reasons. Petitioner Ms. Belo a teaching load is, therefore, a lame
informed her that they could not guarantee her a excuse that rings of untruth and
teaching load when she would return and that only dishonesty. Patently clear is the illegal manner by
teachers in service may enjoy the privilege and which the petitioners eased out Ms. Belo from the
benefits provided by the school. When she signified teaching corps.
her intention to return to teach for the S.Y. 1993
1994, petitioner reasoned that it already hired non
permanent teachers to take her load. The Labor
Arbiter reasoned that she was not dismissed but
there was simply no available teaching load for her.
The NLRC reversed the LAs decision and ordered
her reinstatement with full back wages. The Court of
Appeals declared that Belo was constructively
dismissed; the dismissal, illegal, for being violative of
her security of tenure.

Issue: Whether private respondent was

constructively dismissed and therefore entitled to
reinstatement and back wages

Held: It must be noted at the outset that Ms. Belo

had been a full-time teacher in petitioner CKSC
continuously for fifteen years or since 1977 until she
took a leave of absence for the school year 1992-
1993. Under the Manual of Regulations for Private
Schools, for a private school teacher to acquire a
permanent status of employment and, therefore,
be entitled to a security of tenure, the following SECURITY OF TENURE
requisites must concur: (a) the teacher is a full-time
teacher; (b) the teacher must have rendered three LLOSA-TAN V SILAHIS INTERNATIONAL HOTEL
consecutive years of service; and (c) such service
must have been satisfactory.
181 SCRA 738 February 5, 1990
Since Ms. Belo has measured up to these standards,
she therefore enjoys security of tenure. The
fundamental guarantees of security of tenure and
due process dictate that no worker shall be NATURE
dismissed except for just and authorized cause
provided by law and after due notice and hearing. Petition for certiorari seeking to set aside the
decision and resolutions of the NLRC
Case law defines constructive dismissal as a
cessation from work because continued
employment is rendered impossible, unreasonable,
or unlikely; when there is a demotion in rank or a FACTS
diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an - The complainant was a front office cashier of
employer becomes unbearable to the employee. Silahis International Hotel since November 2, 1976
until her questioned dismissal on October 30, 1982.
It, therefore, blows our mind why the petitioners
would require Ms. Belo, a permanent teacher since
- Since 1977, the Silahis International Hotel, had a
1977 with a satisfactory service record, to signify her
standing corporate policy (Corporate Policy No.
intention to teach in March 1993. Plainly, the
014), which orders all cashiers of SMC and its
petitioners violated their avowed policies. Since Ms.
affiliates to refuse the cashing of personal checks of
Belo was not retiring, resigning or filing another
employees and officials, endorsement by any
leave of absence after the school year 1992-1993,
executive of the Sulo Management Company, or
the petitioners should have considered her as
Philippine Village Hotel or Silahis International Hotel
consenting to teach for the incoming school year
Page 30 of 5
or Sulo Hotel notwithstanding, because based on
experience, a number of these checks
unfortunately bounce to the detriment of SMC and
its affiliates.
- On August 22, 1982, while petitioner was on duty,
she was approached by Mr. Gayondato, the
general cashier of Puerto Azul Beach Resorta
sister company of Silahis International Hotel and
nephew of the Executive Vice President, to encash
two (2) US dollar checks with a combined value of
US$1,200.00 or P10,389.60.
- Although petitioner politely explained the
existence of Policy No. 014 prohibiting such
transactions, Gayondato persisted and assured that
the presentation of aforesaid checks to the front
office cashier was upon instructions of the Executive
Vice President.
- Petitioner, eventually encashed the aforesaid
checks, notwithstanding Corporate Policy No. 014.
- Thereafter, the said checks bounced.
- On October 1, 1982, respondent Vanessa
Suatengco issued a memorandum to the petitioner
requiring her to explain in writing why she should not
be terminated for encashing the two (2) personal
checks without proper authorization.
- Despite petitioner's explanation, her services were
terminated effective October 30, 1982.
- Petitioner filed a complaint against respondents
for illegal dismissal.
- Labor Arbiter Virginia G. Son rendered a decision
in favor of petitioner.
- Hotel appealed the decision of the LA to the
NLRC, and the NLRC rendered a decision setting
aside the decision of the Labor Arbiter and
dismissing the complaint for illegal dismissal for lack
of merit
- Petitioners 2 MFRs having been denied, recourse
was made to the SC
ISSUE
WON the acts of petitioner constitute gross
negligence resulting in a valid ground for the
termination of her employment
HELD
NO
- Gross negligence has been defined as the want of
any or slight care or the utter disregard of
consequences.
- Admittedly, the encashment of the checks in
question is a violation of Policy No. 014 of said hotel.
But as found by the Labor Arbiter, it was established
that: (a) complainant was not motivated by bad
faith; (b) Policy No. 014 is not strictly or consistently
enforced but has been relaxed repeatedly to meet
business exigencies; and (c) complainant's
encashment of the checks in question was not only
with the knowledge but with clearance from her
superiors who are more knowledgeable as to the
circumstances under which the enforcement of the
same may be relaxed.
- Moreover, it cannot be said that complainant was
precipitate or that she has acted in utter disregard
of consequences. On the contrary, she refused to
encash subject checks despite the request of Mr.
Gayondato, the general cashier of Puerto Azul, but
was persuaded only upon the assurances of the
latter that such was the wish of the Executive Vice
President and that said encashment was necessary
to meet certain disbursements in Puerto Azul. In
addition, she informed personally Mr. Samuel Grulla,
Assistant Manager of the Silahis International Hotel,
of said encashment, who also told her that such is
"alright".
- Finally, against the background of her previous
experience when she refused to encash a similar
check for Mr. Katte, the Food and Beverage
Manager of Silahis International Hotel, and that she
was reprimanded by the management of the Silahis
International Hotel for her refusal, as well as
threatened with suspension or dismissal from her
job, coupled with the advice of Mr. Nestor
Famatigan, Jr., Silahis International Hotel
Comptroller, to use her discretion in handling similar
requests in the future, it is not at all surprising that
she opted to take subject course of action.
- It is well settled that dismissal based on loss of trust
and confidence arising from alleged misconduct of
employee, is not to be used as a shield to dismiss an
employee arbitrarily. Although the power to dismiss
is a normal prerogative of the employer, the same is
not without limitations. The right of the employer
must not be exercised arbitrarily and without just
cause. Otherwise, the constitutional guarantee of
security of tenure of the workers would be rendered
nugatory. While dismissing or laying off of an
employee is a management's prerogative, it must
nevertheless be done without abuse of discretion.
Furthermore, the right of employer to freely select or
discharge his employees is regulated by the State,
because the preservation of the lives of the citizens
is a basic duty of the State, more vital than the
preservation of the corporate profit. In addition,
security of tenure is a right of paramount value
guaranteed by the Constitution and should not be
denied on mere speculation. Protection for labor
and social justice provisions of the Constitution and
the labor laws and rules and regulations are
interpreted in favor of the exercise of labor rights.
Disposition The assailed decision of the NLRC is
DISMISSED, and SET ASIDE and private respondent
Silahis International Hotel is ordered to reinstate
petitioner Anita Llosa-Tan to her former position or
Page 31 of 5
similar position without loss of seniority rights with full
backwages beginning October 30, 1982 for a
period of three (3) years therefrom.
++++++++++++++++++++++++++++++=++++++++++
+++++ SIR
CRUDA+++++++++++++++++++++++++++++++++++
++++++++++
JOSE SONZA vs. ABS-CBN BROADCASTING
CORPORATION
G.R. No. 138051
June 10, 2004
Facts: In May 1994, ABS-CBN signed an agreement
with the Mel and Jay Management and
Development Corporation (MJMDC). ABS-CBN was
represented by its corporate officers while MJMDC
was represented by Sonza, as President and
general manager, and Tiangco as its EVP and
treasurer. Referred to in the agreement as agent,
MJMDC agreed to provide Sonzas services
exclusively to ABS-CBN as talent for radio and
television. ABS-CBN agreed to pay Sonza a monthly
talent fee of P310, 000 for the first year and P317,
000 for the second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN
where he irrevocably resigned in view of the recent
events concerning his program and career. After
the said letter, Sonza filed with the Department of
Labor and Employment a complaint alleging that
ABS-CBN did not pay his salaries, separation pay,
service incentive pay,13th month pay, signing
bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN
contended that no employee-employer
relationship existed between the parties. However,
ABS-CBN continued to remit Sonzas monthly talent
fees but opened another account for the same
purpose.
The Labor Arbiter dismissed the complaint and
found that there is no employee-employer
relationship. NLRC affirmed the decision of the
Labor Arbiter. CA also affirmed the decision of
NLRC.
Issue: Whether or not there was employer-
employee relationship between the parties.
Ruling: NO. Case law has consistently held that the
elements of an employee-employer relationship are
selection and engagement of the employee, the
payment of wages, the power of dismissal and the
employers power to control the employee on the
means and methods by which the work is
accomplished. The last element, the so-called
"control test", is the most important element.
Sonzas services to co-host its television and radio
programs are because of his peculiar talents, skills
and celebrity status. Independent contractors often
present themselves to possess unique skills, expertise
or talent to distinguish them from ordinary
employees. The specific selection and hiring of
SONZA, because of his unique skills, talent and
celebrity status not possessed by ordinary
employees, is a circumstance indicative, but not
conclusive, of an independent contractual
relationship. All the talent fees and benefits paid to
SONZA were the result of negotiations that led to
the Agreement. For violation of any provision of the
Agreement, either party may terminate their
relationship. Applying the control test to the present
case, we find that SONZA is not an employee but an
independent contractor.
The control test is the most important test our courts
apply in distinguishing an employee from an
independent contractor. This test is based on the
extent of control the hirer exercises over a worker.
The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an
employee. The converse holds true as well the less
control the hirer exercises, the more likely the worker
is considered an independent contractor. To
perform his work, SONZA only needed his skills and
talent. How SONZA delivered his lines, appeared on
television, and sounded on radio were outside ABS-
CBNs control. ABS-CBN did not instruct SONZA how
to perform his job. ABS-CBN merely reserved the
right to modify the program format and airtime
schedule "for more effective programming." ABS-
CBNs sole concern was the quality of the shows
and their standing in the ratings.
Clearly, ABS-CBN did not exercise control over the
means and methods of performance of Sonzas
work. A radio broadcast specialist who works under
minimal supervision is an independent contractor.
Sonzas work as television and radio program host
required special skills and talent, which SONZA
admittedly possesses.
ABS-CBN claims that there exists a prevailing
practice in the broadcast and entertainment
industries to treat talents like Sonza as independent
contractors. The right of labor to security of tenure
as guaranteed in the Constitution arises only if there
is an employer-employee relationship under labor
laws. Individuals with special skills, expertise or talent
enjoy the freedom to offer their services as
independent contractors. The right to life and
livelihood guarantees this freedom to contract as
independent contractors. The right of labor to
security of tenure cannot operate to deprive an
individual, possessed with special skills, expertise
and talent, of his right to contract as an
independent contractor.
G.R. No. 80383 September 26, 1988
REV. FR. EMMANUEL LABAJO, personally and in his
capacity as Director of San Andres High School,
Maramag, Bukidnon, and, SAN ANDRES HIGH
Page 32 of 5
SCHOOL OF MARAMAG,
INCORPORATED, petitioners,
vs.
PUREZA V. ALEJANDRO, ZENAIDA S. DAHILAN,
JOSEPHINE A. CHAN, HERNANI C. MIAGUE, OPHELIA
M. MIAGUE, ROLANDO T. AMAR and The HON.
NATIONAL LABOR RELATIONS
COMMISSION, respondents.
FACTS:The six (6) private respondents had all been
contracted by petitioners to work as classroom
teachers at the San Andres High School, a private
learning institution situated in Maramag, Bukidnon.
Private respondents Pureza V. Alejandro and
Rolando T. Amar were assigned to handle petitioner
High School's regular day classes; private
respondents Zenaida S. Dahilan, Josephine A.
Chan, Hernani C. Miague and Ophelia M. Miague
upon the other hand, were assigned to handle the
school's special evening classes.
On 3 June 1985, private respondents filed a
Complaint (docketed as NRLRC RAB X Case No. 5-
0410-85) with Regional Arbitration Branch No. 10
(Cagayan de Oro City) of the then Ministry of Labor
and Employment, alleging that they had each
received on 29 March 1985 from petitioner Fr.
Emmanuel Labajo, Director of the San Andres High
School, a letter dated March 13, 1985 stating that
they are terminated effective March 31, 1985.
Private respondents alleged that their dismissal by
petitioner High School was without justifiable cause
and in violation of their rights to due process and
security of tenure. It was also alleged that
petitioners had failed to pay private respondents
the full amounts corresponding to certain
employment benefits (i.e., daily wages, basic pay,
service incentive leave, sick leave, and cost of
living allowance) granted to the latter under labor
laws.
Petitioners admitted that private respondents had
not been paid in full the employment benefits
enumerated by the latter in their complaint.
Petitioners alleged, however, that private
respondents, prior to their acceptance of teaching
jobs at the San Andres High School, "were already
made aware that the school could not give them
everything due them under existing laws" and,
hence, were estopped from claiming such benefits.
Petitioners, further, denied having dismissed illegally
any of the six (6) private respondents and, in turn,
alleged that each of the latter were, at the time of
their dismissal, merely probationary employees of
the San Andres High School whose services thereat
were terminated for just cause i.e., upon expiration
on 31 March 1985 of their respective contracts of
employment with petitioner High School and before
any of them had achieved regular or permanent
status in their jobs.
LABOR ARBITERS RULING: The Labor Arbiter held
that dismissal of the six (6) private respondents in this
case "was violative of the Constitution which
guarantees security of tenure of employment and a
provision of Batas Pambansa Blg. 130 which requires
notice and investigation before outright termination
from the service." The Labor Arbiter also held that,
contrary to the claim of petitioners, private
respondents were not under probation at the time
of their dismissal; even assuming that private
respondents were then merely probationary
employees of and under contract with petitioner
High School, nevertheless, they could only be
dismissed for cause and only after having been
accorded due process.
NLRCs RULING: In a Resolution dated 8 May 1987,
public respondent National Labor Relations
Commission, affirmed on appeal the decision of the
Labor Arbiter. A Motion for Reconsideration filed by
petitioners was denied by the Commissions.
Hence, this petition.
ISSUE: whether or not the private respondents were
illegally dismissed by petitioners
RULING: NO. The Supreme Court cited the Biboso vs.
Victorias Milling Company Inc., case which also
involved the separation of private school teachers,
probationary employees who had been covered
similarly by corresponding contracts of
employment. The Court, speaking through then Mr.
Justice Fernando, stated in that case:
2. This is by no means to assert that the security of
tenure protection of the Constitution does not
apply to probationary employees. The Labor Code
has wisely, provided for such a case thus: 'The
termination of employment of probationary
employees and those employed with a fixed period
shall be subject to such regulations as the Secretary
of Labor may prescribe to prevent the
circumvention of the right of the employees to be
secured in their employment as provided herein.
In view of all the foregoing, we hold that none of
the six (6) private respondents in this case, at the
time of their separation, had achieved permanent
status in their employment as teachers at the San
Andres High School. As probationary and
contractual employees, private respondents
enjoyed security of tenure, but only to a limited
extent i.e., they remained secure in their
employment during the period of time their
respective contracts of employment remained in
effect. That temporary security of tenure, however,
ended the moment their employment contracts
expired on 31 March 1985 and petitioners declined
to renew the same for the next succeeding school
year. Consequently, as petitioners were not under
obligation to renew those contracts of
employment, the separation of private respondents
in this case cannot be said to have been without
justifiable cause, much less illegal.
SKILLWORD MANAGEMENT AND MARKETING
CORPORATION V NLRC (MANUEL)
186 SCRA 465 June 13, 1990
NATURE
Petition for certiorari
FACTS: On June 24, 1983, Francisco Manuel was
deployed to Saudi Arabia to work as driver by
petitioner Skillworld Management and Marketing, a
duly licensed recruitment agency operated by
petitioners-spouses Serafin and Alicia Ramos. Upon
Page 33 of 5
his arrival in Jeddah, Manuel signed a 2-year
employment contract with his foreign employer,
petitioner Shary Limousine for a monthly basic salary
of $300. 2 months later, Manuel was repatriated to
the Philippines. Upon his arrival in the Philippines,
Manuel confronted the Ramoses who promised to
deploy him to other projects.
- After the lapse of more than one year without
being deployed to other projects of petitioners,
Manuel filed a complaint with the POEA against
petitioners for illegal dismissal. He alleged that while
he was employed as driver of Shary Limousine in its
branch at Jeddah he was stopped, and his driver's
license sought for inspection, by Saudi Arabian
police. He showed the police two documents given
to him by his employer, Shary Limousine who made
him believe that these pertained to a driver's
temporary license. However, Manuel was informed
that the documents were not valid for a drivers
license. Together with eleven other drivers, they
brought the matter before their superiors. Three
days after bringing the matter to his superior,
respondent was ordered to pack his things. He was
taken to Riyadh and from there, repatriated to the
Philippines. Upon respondent's arrival in the
Philippines, he requested the Ministry of Foreign
Affairs for a translation of what purported to be his
driver's license. When translated it was only a
certification of employment with Shary Limousine in
its branch at Jeddah.
- Petitioners alleged that Manuels dismissal was for
a valid and just cause. Petitioners alleged that
Manuel was dismissed because of disobedience,
absenteeism, refusal to work and banding together
to engage in concerted activities against the
employer.
- POEA rendered judgment in favor of Manuel,
directing petitioners to pay him $6,900.00 or its peso
equivalent. Upon appeal, the NLRC affirmed said
decision.
- According to petitioners, because of the
probationary status of the employment of Manuel,
he may be dismissed at any time. Furthermore, this
agreement was contained in paragraph four (4) of
the employment contract signed by Manuel.
ISSUE WON Manuel was illegally dismissed
HELD YES There is no dispute that as a probationary
employee, Manuel had but a limited tenure.
Although on probationary basis, however, he still
enjoys the constitutional protection on security of
tenure. During his tenure of employment therefore,
or before his contract expires, he cannot be
removed except for cause as provided for by law.
- The alleged causes for which private respondent
was dismissed (disobedience, absenteeism, refusal
to work, etc.) were not established. Respondent
NLRC found that the purported temporary licenses
to drive issued to Manuel and his co-drivers by their
employer-the Shary Rent a Car/Limousine, turned
out to be mere certifications to the effect that they
are Filipino citizens who are holders of given
passport numbers and that they were sent to work
with the Shary Limousine Branch in Jeddah. It is for
this reason that after being accosted twice at
checkpoints by Saudi police, who informed
complainant and his co-drivers that the alleged
temporary licenses were not valid, they brought the
matter first to their Lebanese superior and then to
the Philippine Embassy.
- Further, records show that Manuel reported for
work regularly and even rendered regular overtime
services; that he did not even attempt to join a
strike or any other form of mass action while working
in Jeddah, because he knew that the laws in
Jeddah are very strict and being a foreigner he did
not have the courage to join much less lead a strike
which is prohibited there; that he and his co-workers
merely inquired from the Philippine Embassy why
they were allowed to drive without licenses; and
that their action prompted the Philippine Embassy
to write their employer, which is perfectly in order as
it was designed to protect them in foreign soil.
MANAGERIAL EMPLOYEE
INTERORIENT MARITIME ENTERPRISES INC V NLRC
(TAYONG)
235 SCRA 268 August 11, 1994
NATURE PETITION for review of a decision of the
National Labor Relations Commission
FACTS Captain Rizalino Tayong, a licensed Master
Mariner with experience in commanding ocean-
going vessels, was employed on 1989 by petitioners
for 1 yr as stated in his employment contract. He
assumed command of petitioners vessel at the port
of Hongkong. His instructions were to replenish
bunker and diesel fuel, to sail to South Africa and
there to load 120,000 metric tons of coal. However,
while in HK and unwarding cargo, he received a
weather report that a storm would hit HK, so
precautionary measures were taken to secure the
safety of the vessel and its crew, considering that
the vessels turbo-charger was leaking and the
vessel was 14 yrs old. He also followed-up the
requisition by the former captain for supplies of
oxygen and acetylene necessary for the welding-
repair of the turbo-charger and the economizer.
-The vessel then sailed from HK for Singapore.
Captain Tayong reported a water leak from M.E.
Turbo Chapter No. 2 Exhaust gas casing so he was
instructed to black off the cooling water and
maintain reduced RPM unless authorized by the
owners. However, the vessel stopped in mid-ocean
for 6 hrs and 45 minutes due to a leaking
economizer. He was instructed to shut down the
economizer and use the auxiliary boiler instead.
- The Chief Engineer reminded Captain Tayong that
the oxygen and acetylene supplies had not been
delivered. He then informed the shipowner that the
departure of the vessel for South Africa may be
affected because of the delay in the delivery of the
supplies. The shipowner advised Captain Tayong to
contact its technical director who would provide a
solution for the supply of said oxygen and
acetylene. The technical director recommended to
Captain Tayong that by shutting off the water to
the turbo charger and using the auxiliary boiler,
there should be no further problem. Captain
Page 34 of 5
Tayong agreed to the recommendation of the
technical director, but communicated his
reservations regarding proceeding to South Africa
without the requested supplies. So the shipowner
advised him to wait for the supplies.
- Finally, the vessel arrived at South Africa. However,
Captain Tayong was instructed to turn-over his post
to the new captain, and was repatriated to the
Philippines after serving petitioners for around 2 wks.
He was not informed of the charges against him,
and was just sent a letter after arriving in the
Philippines. He therefore instituted a complaint for
illegal dismissal before the POEA, claiming his
unpaid salary for the unexpired portion of the
written employment contract, plus attorneys fees.
- POEA: dismissed complaint, there was valid cause
for his untimely repatriation (the company alleged
that due to Captain Tayongs refusal to sail
immediately to South Africa, the vessel was placed
off-hire by the charterers, and the charterers
refused to pay the charter hire or compensation
corresponding to 12 hours, amounting to US
$15,500.00.They fired Captain Tayong for lost of
confidence; POEA believed that the Captains
concern for the oxygen and acetylene was not
legitimate as these supplies were not necessary or
indispensable for running the vessel.)
- NLRC: reversed and set aside POEA decision
because Captain Tayong had not been afforded
an opportunity to be heard and that no substantial
evidenced was adduced to establish the basis for
petitioners loss of trust or confidence. Captain had
acted in accordance with his duties to maintain the
seaworthiness of the vessel and to insure the safety
of the ship and crew.
ISSUE WON Captain Tayong was arbitrarily dismissed
and without cause as reasonably established in an
appropriate investigation (whether or not Captain
Tayong had reasonable grounds to believe that the
safety of the vessel and the crew under his
command or the possibility of substantial delay at
sea required him to wait for the delivery of the
supplies needed for the repair of the turbo-charger
and the economizer before embarking on the long
voyage from Singapore to South Africa)
HELD YES. Ratio It is well settled in this jurisdiction
that confidential and managerial employees
cannot be arbitrarily dismissed at any time, and
without cause as reasonably established in an
appropriate investigation. Such employees, too, are
entitled to security of tenure, fair standards of
employment and the protection of labor laws.
Reasoning: Captain Tayong was denied any
opportunity to defend himself. Petitioners curtly
dismissed him from his command and summarily
ordered his repatriation to the Philippines without
informing him of the charge or charges against him,
and much less giving him a chance to refute any
such charge. In fact, it was only 2 months after his
repatriation that Captain Tayong received a
telegram dated 24 October 1989 from Inter-Orient
requiring him to explain why he delayed sailing to
South Africa.
- NLRCs conclusion was supported by substantial
evidence: The official report of the technical
director, which stated that a disruption in the
normal functioning of the vessels turbo charger
and economizer had prevented the full or regular
operation of the vessel and that he was the one
who recommended the reduction of RPM during
the voyage to South Africa instead of waiting in
Singapore for the supplies that would permit
shipboard repair of the malfunctioning machinery
and equipment, supported NLRCs conclusion that
Captain Tayong did not arbitrarily and maliciously
delay the voyage to South Africa.
- Captain Tayong's decision (arrived at after
consultation with the vessel's Chief Engineer) to wait
seven (7) hours in Singapore for the delivery on
board the Oceanic Mindoro of the requisitioned
supplies needed for the welding-repair, on board
the ship, of the turbo-charger and the economizer
equipment of the vessel, did not constitute merely
arbitrary, capricious or grossly insubordinate
behavior on his part. In the view of the NLRC, that
decision of Captain Tayong did not constitute a
legal basis for the summary dismissal of Captain
Tayong and for termination of his contract with
petitioners prior to the expiration of the term
thereof.
Obiter
- The captain of a vessel is a confidential and
managerial employee within the meaning of the
above doctrine. A master or captain, for purposes
of maritime commerce, is one who has command
of a vessel. A captain commonly performs three (3)
distinct roles: (1) he is a general agent of the
shipowner; (2) he is also commander and technical
director of the vessel; and (3) he is a representative
of the country under whose flag he navigates. Of
these roles, by far the most important is the role
performed by the captain as commander of the
vessel; for such role (which, to our mind, is
analogous to that of "Chief Executive Officer" [CEO]
of a present-day corporate enterprise) has to do
with the operation and preservation of the vessel
during its voyage and the protection of the
passengers (if any) and crew and cargo. In his role
as general agent of the shipowner, the captain has
authority to sign bills of lading, carry goods aboard
and deal with the freight earned, agree upon rates
and decide whether to take cargo. The ship
captain, as agent of the shipowner, has legal
authority to enter into contracts with respect to the
vessel and the trading of the vessel, subject to
applicable limitations established by statute,
contract or instructions and regulations of the
shipowner. To the captain is committed the
governance, care and management of the vessel.
Clearly, the captain is vested with both
management and fiduciary functions.
- Indeed, if the ship captain is convinced, as a
reasonably prudent and competent mariner acting
in good faith that the shipowner's or ship agent's
instructions (insisted upon by radio or telefax from
their officers thousand of miles away) will result, in
the very specific circumstances facing him, in
imposing unacceptable risks of loss or serious
danger to ship or crew, he cannot casually seek
Page 35 of 5
absolution from his responsibility, if a marine
casualty occurs, in such instructions. 23 NLRC: reversed the LA and ruled that the
circumstances of the case showed that they were
- Compagnie de Commerce v. Hamburg: xxx only project employees of Viva.
where by the force of circumstances, a man has
the duty cast upon him of taking some action for ISSUES:
another, and under that obligation adopts a course - WON Maraguinot and Enero are
which, to the judgment of a wise and prudent man, employees of Viva.
is apparently the best for the interest of the persons
for whom he acts in a given emergency, it may - WON they were illegally dismissed.
properly be said of the course so taken that it was
in a mercantile sense necessary to take it." HELD:
- They were regular employees.
- ON management prerogative: that prerogative is
- They were illegally dismissed.
nevertheless not to be exercised, in the case at bar,
at the cost of loss of Captain Tayong's rights under RATIO:
his contract with petitioner's and under Philippine ISSUE 1
law. - Viva claims that the producers were job
Disposition petitioners having failed to show grave contractors.
abuse of discretion amounting to loss or excess of
jurisdiction on the part of the NLRC in rendering its o However, under Section 8 of Rule
assailed decision, the Petition for Certiorari is hereby VIII, Book III of the Omnibus Rules
DISMISSED, for lack of merit. Costs against Implementing the Labor Code,
petitioners. to be considered a job
contractor, such associate
MARAGUINOT VS. NLRC producers must have tools,
Davide, Jr., J. | January 22, 1998 equipment, machinery, work
premises and other materials
FACTS:Alejandro Maraguinot (Maraguinot) alleges necessary to make motion
that he was employed by Viva Films (Viva) as part picture. The associate producers
of the filming crew. He was later designated as had none of these, and that in
Assistant Electrician and then later promoted to fact, the movie making
Electrician. equipment is owned by Viva.

Paulino Enero (Enero) likewise claims that Viva hired o Given that, these producers can
him as a member of the shooting crew. be considered only as labor-only
contractors. As such is prohibited,
Maraguinot and Eneros tasks consisted of loading, the law considers the person or
unloading and arranging movie equipment in the entity engaged in the same a
shooting area. mere agent or intermediary of
the direct employer.
They later asked the company that their salaries be
- BUT EVEN GIVEN THAT, these producers
adjusted in accordance with the minimum wage
cannot be considered as job
law. In response, the company said that they would
contractors, much less labor-only
grant the adjustment provided they signed a blank
contractors as they did not supply,
employment contract. When they refused, they
recruit nor hire the workers. In this case, it
were forced to go on leave. Upon his return, the
was Viva who recruited the crew
company refused to take Enero back. As regards
members from an available groups of
Maraguinot, he was dropped from the company
freelance workers which include the
payroll, but was later returned. When again he
complainants.
refused to sign the blank contract, his services were
terminated. - The relationship between Viva and its
producers seem to be that of agency as
Maraguinot and Enero then sued for illegal the latter makes movies on behalf of
dismissal. Viva whose business is that of making
movies.
VIVA CLAIMS that they contract persons called
producers/assistant producers to make movies - The existence of an employer-employee
and contend that Maraguinot and Enero are relationship between Maraguinot &
project employees of these producers who act as Enero and Viva is further supported by
independent contractors. Hence there is no the following:
employer-employee relationship between them. In
addition, Viva claims that Maraguinot was hired for o The four elements under 4-fold
the movie Mahirap Maging Pogi, while Enero was test are present.
hired for the movie Sigaw ng Puso.
o CONTROL: Viva has a Supervising
LABOR ARBITER: ruled in favor of Maraguinot and Producer that monitors the
Enero and held that they were employees of Viva progress of the producers. Viva,
and as such were illegally dismissed by the latter. in effect, controls the outcome
Page 36 of 5
 of the film and the means
through which it is produced.
o SELECTION AND SUPERVISION:
Viva issued appointment slips
with their corporate name as the
heading.
o SALARIES: It was likewise Viva
who paid the employees
salaries.
ISSUE 2
- While Maraguinot and Enero were
possibly initially hired as project
employees, they had attained the status
of regular employees.
- A project employee or a member of a
work pool may acquire the status of a
regular employee when the ff. concur:
o There is a continuous rehiring of
project employees even after
cessation of the project.
o The tasks performed are vital,
necessary and indispensable to
the usual business or trade of the
employer.
- The length of time during which the
employee was continuously rehired is
not controlling, but merely serves as a
badge of regular employment.
- In this case, Enero was employed for 2
years and engaged in at least 18
projects; while Maragunot was
employed for 3 years and worked on at
least 23 projects.
- Citing Lao vs. NLRC, the could held that
a work pool may exist although the
workers in the pool do not receive
salaries and are free to seek other
employment during temporary breaks in
the business, provided that the workers
shall be available when called to report
for a project. Although primarily
applicable to regular seasonal workers,
this setup can likewise be applied to
project workers in so far as the effect of
temporary cessation of work is
concerned.
- Once a project or work pool employee
has been (a) continuously, as opposed
to intermittently, rehired by the same
employer for the same tasks or nature of
tasks; (b) these tasks are vital, necessary,
and indispensable to the usual business
or trade of the employer, then the
employee must be deemed a regular
employee, pursuant to Article 280 of the
Labor Code and jurisprudence.
- As Maraguinot and Enero have already
gained the status of regular employees,
their dismissal was unwarranted since
the cause invoked for their dismissal
(completion of the project) is not one of
the valid causes for termination under
Article 282 of the Labor Code.
Audion Electric vs NLRC
308 SCRA 340
Hiring Extend Period
FACTSFrom the position paper and affidavit
corroborated by oral testimony, it appears that
complainant was employed by respondent Audion
Electric Company on June 30, 1976 as fabricator
and continuously rendered service assigned in
different offices or projects as helper electrician,
stockman and timekeeper. He as rendered thirteen
(13) years of continuous, loyal and dedicated
service with a clean record.
On August 3, complainant was surprised to receive
a letter informing him that he will be considered
terminated after the turnover of materials, including
respondents, tools and equipment not later than
August 15, 1989.
Complainant claims that he was dismissed without
justifiable cause and due process and that his
dismissed was done in bad faith which renders the
dismissal illegal. For this reason, he claims that he is
entitled to reinstatement with full backwages. He
also claims that he is entitled to moral and
exemplary damages. He includes payment of his
overtime pay, project allowance, minimum wage
increase adjustment, proportionate 13th month pay
and attorney's fees.
ISSUE Whether the extended hiring of an employee
after the termination of the project makes said
employee a regular and no longer a project
employee.
RULING We have held that where the employment
of project employees is extended long after the
supposed project has been finished, the employees
are removed from the scope of project employees
and considered regular employees.
Private respondent had presented substantial
evidence to support his position, while petitioner
merely presented an unverified position paper
merely stating therein that private respondent has
no cause to complain since the employment
contract signed by private respondent with
petitioner was co-terminus with the project.
Notably, petitioner failed to present such
employment contract for a specific project signed
by private respondent that would show that his
employment with the petitioner was for the duration
of a particular project. Moreover, notwithstanding
petitioner's claim in its reply that in taking interest in
the welfare of its workers, petitioner would strive to
provide them with more continuous work by
successively employing its workers, in this case,
private respondent, petitioner failed to present any
report of termination.
As stated earlier, the rule in our jurisdiction is that
findings of facts of the NLRC affirming those of the
Labor Arbiter are entitled to great weight and will
not be disturbed if they are supported by
Page 37 of 5
substantial evidence. Substantial evidence is an
amount of relevant evidence which a reasonable
mind might accept as adequate to justify a
conclusion. We find no grave abuse of discretion
committed by NLRC in finding that private
respondent was not a project employee.
WHEREFORE, the challenged resolutions of the
respondent NLRC are hereby AFFIRMED with the
MODIFICATION that the awards of moral and
exemplary damages and attorney's fees are
DELETED.
UNIVERSAL ROBINA CORPORATION vs CATAPANG
[G.R. No. 164736 October 14, 2005]
FACTS:Petitioner Universal Robina Corporation is a
corporation duly organized and existing under the
Philippine laws, while petitioner Randy Gregorio is
the manager of the petitioner companys duck farm
in Calauan, Laguna. The individual respondents
were hired by the petitioner company on various
dates from 1991 to 1993 to work at its duck farm
in Barangay Sto. Tomas, Calauan, Laguna. The
respondents were hired under an employment
contract which provided for a five-month period.
After the expiration of the said employment
contracts, the petitioner company would renew
them and re-employ the respondents. This practice
continued until sometime in 1996, when the
petitioners informed the respondents that they were
no longer renewing their employment contracts.
When their contract was no longer renewed in
1996, respondents filed complaints for illegal
dismissal, reinstatement, backwages, damages and
attorneys fees against URC.
Labor Arbiter ruled that Respondents are regular
employees and were illegally dismissed. LA ordered
for their reinstatement. Several Writs of Execution
were issued by the LA enforcing the immediate
reinstatement of the illegally dismissed respondents.
URC was not able to fully comply with the order
because the section to which some of the
respondents were assigned was abolished.
Furthermore, NLRC affirmed the decision of the
Labor Arbiter. Upon appeal, the CA ruled that
Respondents are regular employees after rendering
more than one year of continuous service. The 5-
month contract is contrary to public policy for
being used as a subterfuge to prevent the
respondents from becoming regular employees.
URC should have included the respondents in their
payroll even if reinstatement cannot be
accommodated. URC filed a motion for
reconsideration of the CA decision. CA denied the
motion for being filed 2 days late.
ISSUE: Whether or not respondents are regular
employees of petitioner corporation.
HELD: The SC held that the CA, the NLRC and the
Labor Arbiter correctly categorized the respondents
as regular employees of the petitioner company.
The primary standard 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 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
a 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.
It is obvious that the said five-month contract of
employment was used by petitioners as a
convenient subterfuge to prevent private
respondents from becoming regular employees.
Such contractual arrangement should be struck
down or disregarded as contrary to public policy or
morals. To uphold the same would, in effect, permit
petitioners to avoid hiring permanent or regular
employees by simply hiring them on a temporary or
casual basis, thereby violating the employees
security of tenure in their jobs. Petitioners act of
repeatedly and continuously hiring private
respondents in a span of 3 to 5 years to do the
same kind of work negates their contention that
private respondents were hired for a specific
project or undertaking only.
[G.R. No. 114734. March 31, 2000]
VIVIAN Y. IMBUIDO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, INTERNATIONAL
INFORMATION SERVICES, INC. and GABRIEL
LIBRANDO,respondents.
Facts:Petitioner was employed as a data encoder
by private respondent International Information
Services, Inc., a domestic corporation engaged in
the business of data encoding and keypunching,
from August 26, 1988 until October 18, 1991 when
her services were terminated. From August 26, 1988
until October 18, 1991, petitioner entered into
thirteen (13) separate employment contracts with
private respondent, each contract lasting only for a
period of three (3) months.
In September 1991, petitioner and twelve (12) other
employees of private respondent allegedly agreed
to the filing of a petition for certification election
involving the rank-and-file employees of private
respondent.[3] Thus, on October 8, 1991, Lakas
Manggagawa sa Pilipinas (LAKAS) filed a petition
for certification election with the Bureau of Labor
Relations (BLR), docketed as NCR-OD-M-9110-128.[4]
Subsequently, on October 18, 1991, petitioner
received a termination letter from Edna Kasilag,
Administrative Officer of private respondent,
allegedly "due to low volume of work."[5]Thus, on
May 25, 1992, petitioner filed a complaint for illegal
dismissal with prayer for service incentive leave pay
Page 38 of 5
and 13th month differential pay, with the National
Labor Relations Commission
Petitioner alleged that her employment was
terminated not due to the alleged low volume of
work but because she "signed a petition for
certification election among the rank and file
employees of respondents," thus charging private
respondent with committing unfair labor practices
On the other hand, private respondent, in its
position paper filed on July 16, 1992, maintained
that it had valid reasons to terminate petitioners
employment and disclaimed any knowledge of the
existence or formation of a union among its rank-
and-file employees at the time petitioners services
were terminated.[8] Private respondent stressed that
its business "relies heavily on companies availing
of its services. Its retention by client companies with
particular emphasis on data encoding is on a
project to project basis,"[9] usually lasting for a
period of "two (2) to five (5) months." Private
respondent further argued that petitioners
employment was for a "specific project with a
specified period of engagement.
In his decision, the labor arbiter found petitioner to
be a regular employee, ruling that even if herein
complainant [petitioner herein] had been
obstensively hired for a fixed period or for a specific
undertaking, she should be considered as a regular
employee of the respondents in conformity with the
provisions laid down under Article 280 of the Labor
Code,"[14] after finding that "[i]t is crystal clear that
herein complainant [petitioner herein] performed a
job which are (sic) usually necessary or desirable in
the usual business of respondent [s]."[15] The labor
arbiter further denounced "the purpose behind
the series of contracts which respondents required
complainant to execute as a condition of
employment was to evade the true intent and spirit
of the labor laws for the
workingmen."[16] Furthermore, the labor arbiter
concluded that petitioner was illegally dismissed
because the alleged reason for her termination,
that is, low volume of work, is "not among the just
causes for termination recognized by
law,"[17] hence, he ordered her immediate
reinstatement without loss of seniority rights and with
full backwages. With regard to the service incentive
leave pay, the labor arbiter decided "to grant the
same for failure of the respondents to fully
controvert said claims."[18] Lastly, the labor arbiter
rejected petitioners claim for 13th month pay
"since complainant [petitioner herein] failed to
fully substantiate and argued (sic) the same
On appeal, the NLRC reversed the decision of the
labor arbiter. The NLRC held that the
complainant [petitioner herein], while hired as a
regular worker, is statutorily guaranteed, in her
tenurial security, only up to the time the specific
project for which she was hired is
completed."[23] Hence, the NLRC concluded that
"[w]ith the specific project "at RCBC 014" admittedly
completed, the complainant [petitioner herein] has
therefore no valid basis in charging illegal dismissal
for her concomittant (sic) dislocation
Issue: WON Vivian is a project employee.
Held: Yes. We agree with the findings of the NLRC
that petitioner is a project employee. The principal
test for determining whether an employee is a
project employee or a regular employee is whether
the project employee was assigned to carry out a
specific project or undertaking, the duration and
scope of which were specified at the time the
employee was engaged for that project. A project
employee is one whose employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the season. In the
instant case, petitioner was engaged to perform
activities which were usually necessary or desirable
in the usual business or trade of the employer, as
admittedly, petitioner worked as a data encoder
for private respondent, a corporation engaged in
the business of data encoding and keypunching,
and her employment was fixed for a specific
project or undertaking the completion or
termination of which had been determined at the
time of her engagement, as may be observed from
the series of employment contracts between
petitioner and private respondent, all of which
contained a designation of the specific job
contract and a specific period of employment.
However, even as we concur with the NLRC's
findings that petitioner is a project employee, we
have reached a different conclusion. In the recent
case of Maraguinot, Jr. vs. NLRC, we held that "[a]
project employee or a member of a work pool may
acquire the status of a regular employee when the
following concur:
1) There is a continuous rehiring of project
employees even after [the] cessation of a
project; and
2) The tasks performed by the alleged
"project employee" are vital, necessary and
indispensable to the usual business or trade
of the employer.
The evidence on record reveals that petitioner was
employed by private respondent as a data
encoder, performing activities which are usually
necessary or desirable in the usual business or trade
of her employer, continuously for a period of more
than three (3) years, from August 26, 1988 to
October 18, 1991 36 and contracted for a total of
thirteen (13) successive projects. We have
previously ruled that "[h]owever, the length of time
during which the employee was continuously re-
hired is not controlling, but merely serves as a
badge of regular employment." 37Based on the
foregoing, we conclude that petitioner has
attained the status of a regular employee of private
respondent.
The Court's ruling here is meant precisely to give life
to the constitutional policy of strengthening the
labor sector, but, we stress, not at the expense of
Page 39 of 5
management. Lest it be misunderstood, this ruling
does not mean that simply because an employee is
a project or work pool employee even outside the
construction industry, he is deemed, ipso jure, a
regular employee. All that we hold today is that
once a project or work pool employee has
been: (1) continuously, as opposed to intermittently,
re-hired by the same employer for the same tasks or
nature of tasks; and (2) these tasks are vital,
necessary, and indispensable to the usual business
or trade of the employer, then the employee must
be deemed a regular employee, pursuant to Article
280 of the Labor Code and jurisprudence. To rule
otherwise would allow circumvention of labor laws
in industries not falling within the ambit of Policy
Instruction No. Policy Department Order No. 19,
hence allowing the prevention of acquisition of
tenurial security by project or work pool employees
who have already gained the status of regular
employees by the employer's conduct. 39 (emphasis
supplied)
Being a regular employee, petitioner is entitled to
security of tenure and could only be dismissed for a
just or authorized cause, as provided in Article 279
of the Labor Code. The alleged causes of
petitioner's dismissal (low volume of work and
belatedly, completion of project) are not valid
causes for dismissal under Articles 282 and 283 of
the Labor Code. Thus, petitioner is entitled to
reinstatement without loss of seniority rights and
other privileges, and to her full backwages, inclusive
of allowances, and to her other benefits or their
monetary equivalent computed from the time her
compensation was withheld from her up to the time
of her actual reinstatement. However, complying
with the principles of "suspension of work" and "no
work, no pay" between the end of one project and
the start of a new one, in computing petitioner's
backwages, the amounts corresponding to what
could have been earned during the periods from
the date petitioner was dismissed until her
reinstatement when private respondent was not
undertaking any project, should be deducted.
G.R. No. L-65689 May 31, 1985
SANDOVAL SHIPYARDS, INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION,
ROGELIO DIAMANTE, MANUEL PACRES, ROLANDO
CERVALES, DIONISIO CERVALES and MACARIO
SAPUTALO, respondents.
G.R. No. L-66119 May 31, 1985
Facts: These cases are about the dismissal of
alleged project workers. Sandoval Shipyards, Inc.
has been engaged in the building and repair of
vessels. It contends that each vessel is a separate
project and that the employment of the workers is
terminated with the completion of each project.
The workers contend otherwise. They claim to be
regular workers and that the termination of one
project does not mean the end of their
employment since they can be assigned to
unfinished projects.
In G.R. No. 65689, Rogelio Diamante, Manuel
Pacres, Macario Saputalo, Rolando Cervales and
Dionisio Cervales were assigned to the construction
of the LCT Catarman, Project No. 7511. After three
months of work, the project was completed on July
26, 1979. The five workers were served a termination
notice. The termination was reported to the Ministry
of Labor on August 3, 1979. They filed a complaint
for illegal dismissal.
The National Labor Relations Commission affirmed
the decision of the Labor Arbiter ordering the
reinstatement of the five complainants with
backwages from July 27, 1979.
In G.R. No. 66119, respondents Danilo de la Cruz, et
al., 17 in all, were assigned to work in Project No.
7901 for the construction of a tanker ordered by
Mobil Oil Philippines, Inc. There were 55 workers in
that project. The tanker was launched on January
31, 1980. Upon the yard manager's
recommendation, the personnel manager of
Sandoval Shipyards terminated the services of the
welders, helpers and construction workers effective
February 4, 1980. The termination was duly reported
to the Ministry of Labor and Employment.
Three days later, or on February 7, twenty-seven out
of the 55 workers were hired for a new project. The
27 included four of the 17 respondents who filed a
complaint for illegal dismissal on February 6.
After hearing, the Director of the Ministry's Capital
Region ordered the reinstatement of the
complainants. The Deputy Minister of Labor
affirmed that order.
Issue: WON Respondents are a project employee.
Held: We hold that private respondents were
project employees whose work was coterminous
with the project for which they were hired. Project
employees, as distinguished from regular or non-
project employees, are mentioned in section 281 of
the Labor Code as those "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."
Policy Instructions No. 20 of the Secretary of Labor,
which was issued to stabilize employer-employee
relations in the construction industry, provides:
Project employees are those
employed in connection with a
particular construction project. Non-
project (regular) employees are
those employed by a construction
company without reference to any
particular project.
Project employees are not entitled
to termination pay if they are
terminated as a result of the
Page 40 of 5
 completion of the project or any
phase thereof in which they are
employed, regardless of the number
of projects in which they have been
employed by a particular
construction company. Moreover,
the company is not required to
obtain clearance from the Secretary
of Labor in connection with such
termination.
It is significant to note that the corporation does not
construct vessels for sale or otherwise which will
demand continuous productions of ships and will
need permanent or regular workers. It merely
accepts contracts for ship-building or for repair of
vessels from third parties and, only, on occasion
when it has work contract of this nature that it hires
workers to do the job which, needless to say, lasts
only for less than a Year or longer.
The completion of their work or
project automatically terminates their employment,
in which case, the employer is, under the law, only
obliged to render a report on the termination of the
employment. (139-140, Rollo of G. R. No. 65689).
[G.R. No. 117043. January 14, 1998]
FELIX VILLA, vs. NATIONAL LABOR RELATIONS
COMMISSION, Fifth Division and NATIONAL
STEEL CORPORATION, respondents.
Facts: Respondent National Steel Corporation
(NSC), one of the biggest modern steel mills in
Southeast Asia, produces hot rolled products, cold
rolled products, tinplates and billets. These products
are in turn transformed by downstream industries
into truss assemblies, farm implements, pipe
structures, shipbuilding and repairing materials,
automotive structures and machine parts, GI roof
sheets or galvanized iron, drums, nails, fasteners and
wires.[1]
National Steel Corporation (NSC) in
Cagayan de Oro, in the first part of an expansion
program, constructed a Billet Steelmaking Plant.
The plan was to first use scrap metal by
shipbreaking decommissioned ships before
converting to the plant to a Direct Reduced Iron
plant. A billet is a semi-finished steel product later
processed into steel bars and wire rods.
Shipbreaking means cutting up/salvaging ships and
reprocessing the steel. However, after four or five
ships, the project was phased out because of the
scarcity of vessels/ships for salvaging, the higher
costs of operation, and the unsuitability of raw
materials. It was not a viable undertaking. The
petitioners are the former employees of the plant,
being masons, carpenters, laborers, electricians,
and painters. Even before the plant was phased
out, there were already many labour problems.
Notably, there was a strike complaining of (a) wage
discrimination, (b) interference with the employees
right to self-organization, (c) nonregularization of
contractual employees, (d) illegal termination of
employees, (e) nonpayment of wage/benefit
differentials, and (f) nonrecognition of NSCEASPFL
as the sole bargaining representative of the
company. The petitioner-workers continually lost in
the case with respect to regularization (they were
awarded wage increases) from the Labor Minister
to the NLRC despite numerous MRs. The initial
proceedings (1986) simply ordered NSC to submit
their complete records for the tribunals to be able
to make a definite ruling, in the meantime making a
provisional ruling that the petitioners were project
employees. The correctness of this order was
affirmed by the SC in an earlier case and
remanded it back to the NLRC. This decision by the
NLRC (1992) affirmed their earlier resolution that the
petitioners were merely project employees. In the
dispositive, it said that the individual rulings as to
which petitioner is contractual and which is regular,
will be the subject of future proceedings. A break-
away group from the former group of petitioners
MR this with the NLRC twice before raising the
present case to the SC for grave abuse of
discretion. Note that if declared to be regular, the
petitioners would be reinstated.
Issue: WON Petitioners are project employees.
Held: Yes.SC relies on the factual findings of labor
administrative tribunals like the NLRC which have
acquired expertise because their jurisdiction is
confined to specific matters. In its Decision and
Resolutions, the NLRC adamantly held that
petitioners were contractual project employees
who are not entitled to regularization under Art. 280.
280 conceives of three kinds of employees: regular
employees or those who have been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer; project employees or those whose
employment has been fixed for a specific project or
undertaking the completion or termination of which
has been determined at the time of the
engagement of the employee or where the work or
services to be performed is seasonal in nature and
the employment is for the duration of the season,
and casual employees or those who are neither
regular nor project employees.
In the earlier case with the same parties,
the Court distinguished between two types of
projects: a project could refer to a particular job or
undertaking that is within the regular or usual
business of the employer company, but which is
distinct and separate, and identifiable as such, from
the other undertakings of the company.
(construction company that may undertake two or
more projects at the same time in different
places) a project may refer to a particular job or
undertaking that is not within the regular business of
the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the
ordinary or regular business operations of the
employer. The job or undertaking also begins and
ends at determined or determinable times. (instant
case; expansion program being different
component projects a distinct undertaking
identifiable from the ordinary business and activity
of NSC)
Page 41 of 5
 The Supreme Court disposed of the
regularization issue by reasoning that though: The
records show that the petitioners were utilized in
operations other than billet making or other
components of the expansion porgram, such as
shipbreaking. And while it is true that they
performed other activities which were necessary or
desirable in the usual business of the NSC And that
the duration of their employment was for a period
of more than one year. These factors did not make
them regular because: They remain project
employees regardless of the number of projects in
which they have worked. Length of service is not
the controlling determinant of the employment
tenure of a project employee. In the case of
Mercado, Sr. v. NLRC, it was ruled that the proviso in
the second paragraph of Article 280, providing that
an employee who has served for at least one year,
shall be considered a regular employees, relates
only to casual employees and not to project
employees.
G.R. No. 125837 October 6, 2004
REYNALDO CANO CHUA, doing business under the
name & style PRIME MOVER CONSTRUCTION
DEVELOPMENT, petitioner, vs. COURT OF APPEALS,
SOCIAL SECURITY COMMISSION, SOCIAL SECURITY
SYSTEM, ANDRES PAGUIO, PABLO CANALE, RUEL
PANGAN, AURELIO PAGUIO, ROLANDO TRINIDAD,
ROMEO TAPANG and CARLOS
MALIWAT, respondents.
Facts: On 20 August 1985, private respondents
Andres Paguio, Pablo Canale, Ruel Pangan, Aurelio
Paguio, Rolando Trinidad, Romeo Tapang and
Carlos Maliwat (hereinafter referred to as
respondents) filed a Petition4 with the SSC for SSS
coverage and contributions against petitioner
Reynaldo Chua, owner of Prime Mover
Construction Development, claiming that they were
all regular employees of the petitioner in his
construction business.5
Private respondents claimed that they were
assigned by petitioner in his various construction
projects continuously in the following capacity,
since the period indicated, and with the
corresponding basic salaries
Private respondents alleged that petitioner
dismissed all of them without justifiable grounds,
and without notice to them and to the then Ministry
of Labor and Employment. They further alleged that
petitioner did not report them to the SSS for
compulsory coverage in flagrant violation of the
Social Security Act.
Meanwhile, the SSS filed a Petition in
Intervention10 alleging that it has an interest in the
petition filed by private respondents as it is charged
with the implementation and enforcement of the
provisions of the Social Security Act. The SSS stated
that it is the mandatory obligation of every
employer to report its employees to the SSS for
coverage and to remit the required contribution,
including the penalty imposed for late premium
remittances.
On 01 February 1995, the SSC issued
its Order11 which ruled in favor of private
respondents. The SSC, relying on NLRC Case No.
RAB-III-8-2373-85,12 declared private respondents to
be petitioners regular employees.13 It ordered
petitioner to pay the SSS the unpaid SS/EC and
Medicare contributions plus penalty for the delayed
remittance thereof, without prejudice to any other
penalties which may have accrued.14 The SSC
denied the Motion for Reconsideration15 of
petitioner for lack of merit.16
Petitioner elevated the matter to the Court of
Appeals via a Petition for Review.17 He claimed that
private respondents were project employees,
whose periods of employment were terminated
upon completion of the project. Thus, he claimed,
no employer-employee relation existed between
the parties.18 There being no employer-employee
relationship, private respondents are not entitled to
coverage under the Social Security Act.19 In
addition, petitioner claimed that private
respondents length of service did not change their
status from project to regular employees. Petitioner
also claimed that the case has prescribed. The
Court of Appeals ruled in favor of the private
respondents.
The Court of Appeals, citing Article 280 of the Labor
Code,26 declared that private respondents were all
regular employees of the petitioner in relation to
certain activities since they all worked either as
masons, carpenters and fine graders in petitioners
various construction projects for at least one year,
and that their work was necessary and desirable to
petitioners business which involved the
construction of roads and bridges. The Court of
Appeals rejected the claim of prescription, stating
that the filing of private respondents claims was
well within the twenty (20)-year period provided by
the Social Security Act. Petitioner filed a Motion for
Reconsideration,32 claiming that the Court of
Appeals overlooked (1) the doctrine that length of
service of a project employee is not the controlling
test of employment tenure, and (2) petitioners
failure to place private respondents under SSS
coverage was in good faith. The motion was
denied for lack of merit. Hence, this petition.
Issue: WON private respondents are project
emplyees.
Held: No.There is no dispute that private
respondents were employees of petitioner.
Petitioner himself admitted that they worked in his
construction projects,38 although the period of their
employment was allegedly co-terminus with their
phase of work.39 Even without such admission from
petitioner, the existence of an employer-employee
relationship between the parties can easily be
determined by the application of the "control
test,"40 the elements of which are enumerated
above. It is clear that private respondents are
employees of petitioner, the latter having control
over the results of the work done, as well as the
Page 42 of 5
means and methods by which the same were
accomplished. Suffice it to say that regardless of
the nature of their employment, whether it is regular
or project, private respondents are subject of the
compulsory coverage under the SSS Law, their
employment not falling under the exceptions
provided by the law.41 This rule is in accord with the
Courts ruling in Luzon Stevedoring Corp. v. SSS42 to
the effect that all employees, regardless of tenure,
would qualify for compulsory membership in the
SSS, except those classes of employees
contemplated in Section 8(j) of the Social Security
Act.43
This Court also finds no reason to deviate from the
finding of the Court of Appeals regarding the
nature of employment of private respondents.
Despite the insistence of petitioner that they were
project employees, the facts show that as masons,
carpenters and fine graders in petitioners various
construction projects, they performed work which
was usually necessary and desirable to petitioners
business which involves construction of roads and
bridges. In Violeta v. NLRC,44 this Court ruled that to
be exempted from the presumption of regularity of
employment, the agreement between a project
employee and his employer must strictly conform to
the requirements and conditions under Article 280
of the Labor Code. It is not enough that an
employee is hired for a specific project or phase of
work. There must also be a determination of, or a
clear agreement on, the completion or termination
of the project at the time the employee was
engaged if the objectives of Article 280 are to be
achieved.45 This second requirement was not met in
this case.
Moreover, while it may be true that private
respondents were initially hired for specific projects
or undertakings, the repeated re-hiring and
continuing need for their services over a long span
of timethe shortest being two years and the
longest being eighthave undeniably made them
regular employees.46 This Court has held that an
employment ceases to be co-terminus with specific
projects when the employee is continuously rehired
due to the demands of the employers business
and re-engaged for many more projects without
interruption.47 The Court likewise takes note of the
fact that, as cited by the SSC, even the National
Labor Relations Commission in a labor case
involving the same parties, found that private
respondents were regular employees of the
petitioner.48
Another cogent factor militates against the
allegations of the petitioner. In the proceedings
before the SSC and the Court of Appeals, petitioner
was unable to show that private respondents were
appraised of the project nature of their
employment, the specific projects themselves or
any phase thereof undertaken by petitioner and for
which private respondents were hired. He failed to
show any document such as private respondents
employment contracts and employment records
that would indicate the dates of hiring and
termination in relation to the particular construction
project or phases in which they were
employed.49 Moreover, it is peculiar that petitioner
did not show proof that he submitted reports of
termination after the completion of his construction
projects, considering that he alleges that private
respondents were hired and rehired for various
projects or phases of work therein.
[G.R. No. 116352. March 13, 1997]
J. & D.O. AGUILAR CORPORATION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and
ROMEO ACEDILLO, respondents.
Facts: This petition for certiorari is questioning the
decision of respondent National Labor Relations
Commission dated March 30, 1994, as well as its
resolution of June 20, 1994, denying for lack of merit
petitioner's motion for reconsideration of said
decision.
Private respondent Romeo Acedillo began
working for petitioner in February 1989 as a helper-
electrician. On January 16, 1992, he received a
letter from petitioner informing him of his severance
from the company allegedly due to lack of
available projects and excess in the number of
workers needed. He decided to file a case for
illegal dismissal before the NLRC after learning that
new workers were being hired by petitioner while his
request to return to work was being ignored. In
reply, petitioner maintained that its need for workers
varied, depending on contracts procured in the
course of its business of contracting refrigeration
and other related works. It contended that its
workers are hired on a contractual or project basis,
and their employment is deemed terminated upon
completion of the project for which they were
hired. Finally, petitioner argued that Acedillo was
not a regular employee because his employment
was for a definite period and apparently made only
to augment the regular work force.
On June 17, 1993, Labor Arbiter Arthur L.
Amansec rendered judgment declaring Acedillo's
dismissal to be illegal, finding him to be a member
of the regular work pool, and ordering petitioner to
pay him a total of P71,906.00 representing
backwages, 13th month pay, separation pay in lieu
of reinstatement, service incentive leave pay and
underpayment of wages.
On appeal, the NLRC affirmed Labor Arbiter
Amansec's decision.
Issue: WON private respondent is a regular
employee.
Held: Yes. While respondent (herein petitioner)
strongly maintains that complainant (Acedillo) was
not a regular worker, however, the nature of his job
as a helper and the length of service that he had
been with respondent are clear proof(s) that he
was a regular employee. For what determines
Page 43 of 5
whether a certain employment is regular or casual
is not the will and word of the employer, to which
the desperate worker often accedes, much less the
procedure of hiring the employee or the manner of
praying (sic) his salary. It is the nature of the
activities performed in relation to the particular
business or trade (of the employer) considering all
circumstances, and in some cases the length of
time of its performance and its continued
existence.[1] x x x Suffice it to state that respondent's
contention to show that he (Acedillo) was (a)
regular employee will not prosper because in the
absence of any proof that he was hired on a
project or contractual basis, the valid presumption
is that the employment is regular.
Likewise, respondent's allegation that since
complainant was not a regular employee, he was
not entitled to any of his monetary claims must
fail. Respondent must be reminded that payment of
these benefits in accordance with law does not
depend on whether the worker is a regular, casual
or project worker. It is bound to comply with the
basic requirement of (labor standards) law on
payment of (wages and other benefits) and proof
of payment or non-payment thereof rests on the
respondent. It must be so because where the issue
is the payment of labor standards benefits, burden
of proof is on the employer, not on the employees
because the latter are neither required nor
expected to keep records of payment or non-
payment of benefits granted to them by law."
Petitioner is to be reminded that a project
employee is one whose "employment has been
fixed for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the
employment is for the duration of the season." [2] The
records reveal that petitioner did not specify the
duration and scope of the undertaking at the time
Acedillo's services were contracted. Petitioner
could have easily presented an employment
contract showing that he was engaged only for a
specific project, but it failed to do so. It is not even
clear if Acedillo ever signed an employment
contract with petitioner. Neither is there any proof
that the duration of his assignment was made clear
to him other than the self-serving assertion of
petitioner that the same can be inferred from the
tasks he was made to perform.
What is clear is that Acedillo's work as a helper-
electrician was an activity "necessary or desirable in
the usual business or trade"[3] of petitioner, since
refrigeration requires considerable electrical work.
This necessity is further bolstered by the fact that
petitioner would hire him anew after the
completion of each project, a practice which
persisted throughout the duration of his tenure.
The petitioner admits that it maintains two sets
of workers, viz., those who are permanently
employed and get paid regardless of the
availability of work and those who are hired on a
project basis.[4] This practice of keeping a work pool
further renders untenable petitioner's position that
Acedillo is not a regular employee. As we held in
the case of Philippine National Construction
Corporation v. NLRC,[5]
"Members of a work pool from which a
construction company draws its project employees,
if considered employees of the construction
company while in the work pool, are non-project
employees or employees for an indefinite period. If
they are employed in a particular project, the
completion of the project or any phase thereof will
not mean severance of (the) employer-employee
relationship.
WHEREFORE, in view of the foregoing, the
instant petition for certiorari is DISMISSED. Costs
against petitioner.
SO ORDERED.
Workpool Employees: MARAGUINOT vs. NLRC (DEL
ROSARIO, VIVA FILMS)
284 SCRA 539
DAVIDE; January 22, 1998
NATURE: Special civil action for certiorari seeking to
annul the decision of NLRC and its Resolution
FACTS: Petitioner Alejandro Maraguinot, Jr.
maintains that he was employed by private
respondents as part of the filming crew. About 4
months later, he was designated Asst. Electrician.
He was then promoted to the rank of Electrician.
Petitioner Paulino Enero claims that private
respondents employed him as a member of the
shooting crew.
Petitioners tasks consisted of loading, unloading
and arranging movie equipment in the shooting
area as instructed by the cameraman, returning
the equipment to Viva Films warehouse, assisting in
the fixing of the lighting system, and performing
other tasks that the cameraman and/or director
may assign.
Petitioners requested that private respondents
adjust their salary in accordance with the minimum
wage law. Petitioners were informed that Mr. Vic
del Rosario would agree to increase their salary only
if they signed a blank employment contract. As
petitioners refused to sign, private respondents
forced Enero to go on leave then refused to take
him back when he reported for work. Meanwhile,
Maraguinot was dropped from the company
payroll but was returned and again asked to sign a
blank employment contract, and when he still
refused, private respondents terminated his
services. Petitioners thus sued for illegal dismissal
before the Labor Arbiter.
Private respondents claim that Viva Films is primarily
engaged in the distribution and exhibition of
movies, but not in the business of making movies; in
the same vein, private respondent Vic del Rosario is
merely an executive producer, i.e., the financier
who invests a certain sum of money for the
production of movies distributed and exhibited by
VIVA; that they contract persons called
producers -- also referred to as associate
producers-- to produce or make movies for
private respondents; and that petitioners are
Page 44 of 5
project employees of the associate producers who,
in turn, act as independent contractors. As such,
there is no employer-employee relationship
between petitioners and private respondents; that
it was the associate producer of a film who hired
Maraguinot.and he was released upon payment of
his last salary, as his services were no longer
needed; that Enero was hired for a movie, went on
vacation and by the time he reported back to work
the move had been completed.
The Labor Arbiter found that: complainants are the
employees of the respondents. The producer
cannot be considered as an independent
contractor but should be considered only as a
labor-only contractor and as such, acts as a mere
agent of the real employer, the herein respondents.
Also, it is an admitted fact that the complainants
received their salaries from the respondents. It is
very clear also that complainants are doing
activities which are necessary and essential to the
business of the respondents, that of movie-making.
Complainant Maraguinot worked as an electrician
while complainant Enero worked as a crew
[member]. Hence, the complainants were illegally
dismissed.
Private respondents appealed to the NLRC. In its
decision, it said that:
1) Complainants were hired for specific movie
projects and their employment was co-
terminus with each movie project the
completion/termination of which are pre-
determined, such fact being made known
to complainants at the time of their
engagement.
2) Each shooting unit works on one movie
project at a time. And the work of the
shooting units, which work independently
from each other, are not continuous in
nature but depends on the availability of
movie projects.
3) Further shown by respondents is the irregular
work schedule of complainants on a daily
basis. Maraguinot was supposed to report
on 05 August 1991 but reported only on 30
August 1991, or a gap of 25 days.
Complainant Enero worked on 10
September 1991 and his next scheduled
working day was 28 September 1991, a gap
of 18 days.
4) The extremely irregular working days and
hours of complainants work explain the
lump sum payment for complainants
services for each movie project. Hence,
complainants were paid a standard weekly
salary regardless of the number of working
days and hours they logged in. Otherwise, if
the principle of no work no pay was strictly
applied, complainants earnings for certain
weeks would be very negligible.
5) Respondents also alleged that
complainants were not prohibited from
working with other movie companies.
The NLRC, in reversing the Labor Arbiter, then
concluded that these circumstances, taken
together, indicated that complainants (herein
petitioners) were project employees.
Petitioners Claim To support their claim that they
were regular (and not project) employees of
private respondents, petitioners cited their
performance of activities that were necessary or
desirable in the usual trade or business of private
respondents and added that their work was
continuous, i.e., after one project was completed
they were assigned to another project.
Respondents Private respondents reiterate their
version of the facts and stress that their evidence
supports the view that petitioners are project
employees; point to petitioners irregular work load
and work schedule; emphasize the NLRCs finding
that petitioners never controverted the allegation
that they were not prohibited from working with
other movie companies; and ask that the facts be
viewed in the context of the peculiar characteristics
of the movie industry.
The Office of the Solicitor General (OSG) is
convinced that this petition is improper since
petitioners raise questions of fact; and submits that
petitioners reliance on Article 280 of the Labor
Code to support their contention that they should
be deemed regular employees is misplaced, as
said section merely distinguishes between two
types of employees, i.e., regular employees and
casual employees, for purposes of determining the
right of an employee to certain benefits. The OSG
likewise rejects petitioners contention that since
they were hired not for one project, but for a series
of projects, they should be deemed regular
employees. In closing, the OSG disagrees with
petitioners claim that the NLRCs classification of
the movie producers as independent contractors
had no basis in fact and in law, since, on the
contrary, the NLRC took pains in explaining its
basis for its decision.
ISSUE: Whether Or Not petitioners were illegally
dismissed
HELD: YES. A project employee or a member of a
work pool may acquire the status of a regular
employee when the following concur: 1) There is a
continuous rehiring of project employees even after
cessation of a project; and 2) The tasks performed
by the alleged project employee are vital,
necessary and indispensable to the usual business
or trade of the employer. However, the length of
time during which the employee was continuously
re-hired is not controlling, but merely serves as a
badge of regular employment.
In the instant case, the evidence on record shows
that petitioner Enero was employed for a total of
Page 45 of 5
two (2) years and engaged in at least eighteen (18) Nature of Work: A.M. ORETA & CO INC vs. NLRC
projects, while petitioner Maraguinot was (GRULLA)
employed for some three (3) years and worked on 176 SCRA 218
at least twenty-three (23) projects. Moreover, as MEDIALDEA; August 10, 1989
petitioners tasks involved, among other chores, the NATURE: Petition for certiorari
loading, unloading and arranging of movie
equipment in the shooting area as instructed by the FACTS: Private respondent Grulla was engaged by
cameramen, returning the equipment to the Viva Engineering Construction and Industrial
Films warehouse, and assisting in the fixing of the Development Company (ENDECO) through A.M.
lighting system, it may not be gainsaid that these Oreta and Co., Inc. as a carpenter in its project in
tasks were vital, necessary and indispensable to the Jeddah, Saudi Arabia.
usual business or trade of the employer. As regards
the underscored phrase, it has been held that this is The contract of employment, which was entered
ascertained by considering the nature of the work into on June 11, 1980 was for a period of 12 months.
performed and its relation to the scheme of the Respondent Grulla left the Philippines for Jeddah,
particular business or trade in its entirety. Saudi Arabia on August 5, 1980.
It may not be ignored, however, that private
respondents expressly admitted that petitioners On August 15, 1980, Grulla met an accident which
were part of a work pool; and, while petitioners fractured his lumbar vertebrae while working at the
were initially hired possibly as project employees, jobsite. He was rushed to the New Jeddah Clinic
they had attained the status of regular employees and was confined there for 12 days.
in view of VIVAs conduct.
On August 27, 1980, Grulla was discharged from the
At this time, we wish to allay any fears that this hospital and was told that he could resume his
decision unduly burdens an employer by imposing normal duties after undergoing physical therapy for
a duty to re-hire a project employee even after two weeks.
completion of the project for which he was hired.
The import of this decision is not to impose a positive On September 18, 1980, respondent Grulla reported
and sweeping obligation upon the employer to re- back to his Project Manager and presented to the
hire project employees. What this decision merely latter a medical certificate declaring the former
accomplishes is a judicial recognition of the already physically fit for work. Since then, he stated
employment status of a project or work pool working again until he received a notice of
employee in accordance with what is fait termination of his employment on October 9, 1980.
accompli, i.e., the continuous re-hiring by the
employer of project or work pool employees who Grulla filed a complaint for illegal dismissal,
perform tasks necessary or desirable to the recovery of medical benefits, unpaid wages for the
employers usual business or trade. Let it not be unexpired ten (10) months of his contract and the
said that this decision coddles labor, for as Lao1 sum of P1,000.00 as reimbursement of medical
has ruled, project or work pool employees who expenses against A.M. Oreta and Company, Inc.
have gained the status of regular employees are and ENDECO with the POEA.
subject to the no work-no pay principle.
The petitioner A.M. Oreta and Company, Inc. and
The Courts ruling here is meant precisely to give life ENDECO filed their answer and alleged that the
to the constitutional policy of strengthening the contract of employment entered into between
labor sector, but, we stress, not at the expense of petitioners and Grulla provides, as one of the
management. Lest it be misunderstood, this ruling grounds for termination of employment, violation of
does not mean that simply because an employee is the rules and regulations promulgated by the
a project or work pool employee even outside the contractor; and that Grulla was dismissed because
construction industry, he is deemed, ipso jure, a he has not performed his duties satisfactorily within
regular employee. All that we hold today is that the probationary period of three months.
once a project or work pool employee has been:
(1) continuously, as opposed to intermittently, re- POEA held that complainant's dismissal was illegal
hired by the same employer for the same tasks or and warrants the award of his wages for the
nature of tasks; and (2) these tasks are vital, unexpired portion of the contract.
necessary and indispensable to the usual business Petitioner appealed from the adverse decision to
or trade of the employer, then the employee must the respondent Commission.
be deemed a regular employee, pursuant to Article
280 of the Labor Code and jurisprudence. Respondent Commission dismissed the appeal for
lack of merit and affirmed in toto the decision of
Disposition: Instant petition is GRANTED. the POEA..

Casual, Art. 280, 2nd par.; Omnibus rules, Book VI, ISSUES:1. Whether Or Not the employment of
Rule 1, Sec. 5 (b) respondent Grulla was illegally terminated by the
petitioner
1 A work pool may exist although the workers in the pool do not receive salaries and are free to seek 2. Whether Or Not Grulla is entitled to salaries
other employment during temporary breaks in the business, provided that the worker shall be available
when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up corresponding to the unexpired portion of his
can likewise be applied to project workers insofar as the effect of temporary cessation of work is
concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of
employment contract.
coddling labor at the expense of capital and at the same time enables the workers to attain the status of
regular employees.

Page 46 of 5
HELD1. YES. Article 280 (formerly Article 281) of the
Labor Code, as amended, provides:
"Article 280. Regular and Casual
Employment. - The provisions of written
agreement to the contrary notwithstanding
and regardless of the oral agreements 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 employment or where
the work or service to be performed is
seasonal in nature and the employment is
far the duration of the season.
"An employment shall be deemed to be
casual if it is not covered by the preceding
paragraph: Provided, that any employee
who has rendered at least one year of
service, whether such service is continuous
or broken, shall be considered a regular
employee with respect to the activity in
which he is employed and his employment
shall continue while such actually exists."
Policy Instructions No. 12 of the then Minister of
Labor (now Secretary of Labor and Employment)
which provides:
"PD 850 has defined the concept of regular
and casual employment. What determines
regularity or casualness is not the
employment contract, written or otherwise,
but the nature of the job. If the job is usually
necessary or desirable to the main business
of the employer, then employment is
regular. . . ."
A perusal of the employment contract reveals that
although the period of employment of respondent
Grulla is 12 months, the contract period is
renewable subject to future agreement of the
parties. It is clear from the employment contract
that the respondent Grulla was hired by the
company as a regular employee and not just a
mere probationary employee.
On the matter of probationary employment, the
law in point is Article 281 (formerly Article 252) of the
Labor Code which provides in part:
"Art. 281. Probationary Employment. - . . . .
The services of an employee who has been
engaged on a probationary basis may be
terminated for a just cause or when he fails
to qualify as a regular employee in
accordance with reasonable standards
made known by the employer to the
employee at the time of his engagement.
An employee who is allowed to work after a
probationary period shall be considered
regular employee."
The law is clear to the effect that in all cases
involving employees engaged on probationary'
basis, the employer shall make known to the
employee at the time he is hired, the standards by
which he will qualify as a regular employee.
Nowhere in the employment contract executed
between petitioner company and respondent
Grulla is there a stipulation that the latter shall
undergo a probationary period for three months
before he can quality as a regular employee. There
is also no evidence on record showing that the
Grulla had been apprised of his probationary status
and the requirements which he should comply in
order to be a regular employee. In the absence of
these requisites, there is justification in concluding
that respondent Grulla was a regular employee at
the time he was dismissed by petitioner.
As such, he is entitled to security of tenure during his
period of employment and his services cannot be
terminated except for just and authorized causes
enumerated under the Labor Code and under the
emloyment contract.
Granting, in gratia argumenti, that respondent is a
probationary employee, he cannot, likewise, be
removed except for cause during the period of
probation. Although a probationary or temporary
employee has limited tenure, he still enjoys security
of tenure. During his tenure of employment or
before his contract expires, he cannot be removed
except for cause as provided for by law.
The alleged ground of unsatisfactory performance
relied upon by petitioner for dismissing respondent
Grulla is not one of the just causes for dismissal
provided in the Labor Code. Neither is it included
among the grounds for termination of employment
under Article VII of the contract of employment
executed by petitioner company and respondent
Grulla.
Grulla was not, in any manner, notified of the
charges against him before he was outrightly
dismissed. Neither was any hearing or investigation
conducted by the company to give the
respondent a chance to be heard concerning the
alleged unsatisfactory performance of his work.
2. YES. The dismissal of Grulla violated the security of
tenure under the contract of employment which
specifically provides that the contract term shall be
for a period of twelve (12) calendar months.
Consequently, the respondent Grulla should be
paid his salary for the unexpired portion of his
contract of employment which is ten (10) months.
Disposition: Petition was dismissed
One Year Service: KIMBERLY INDEPENDENT LABOR
UNION V DRILON
185 SCRA 190
REGALADO; May 9, 1990
FACTS: Kimberly-Clark Philippines, Inc. (KIMBERLY)
executed a three-year collective bargaining
agreement (CBA) with United Kimberly-Clark
Employees Union-Philippine Transport and General
Workers' Organization (UKCEUPTGWO) which
expired on June 30, 1986.
Within the 60-day freedom period prior to the
expiration of and during the negotiations for the
renewal of the aforementioned CBA, some
members of the bargaining unit formed another
union called "Kimberly Independent Labor Union for
Page 47 of 5
Solidarity, Activism and Nationalism-Organized
Labor Association in Line Industries and Agriculture
(KILUSAN-OLALIA)
April 21, 1986, KILUSAN-OLALIA filed a petition for
certification election. KIMBERLY and UKCEU-PTGWO
did not object to the holding of a certification
election but objected to the inclusion of the so-
called contractual workers whose employment with
KIMBERLY was coursed through an independent
contractor, Rank Manpower Company (RANK, for
short), as among the qualified voters.
On June 2, 1986, Med-Arbiter Bonifacio I.
Marasigan, who was handling the certification
election case issued an order declaring the
following as eligible to vote in the certification
election, thus:
1) regular rank-and-file laborers/employees of
the respondent company;
2) casuals who have worked at least six (6)
months; 3) Contractual employees who are
allegedly in the employ of an independent
contractor and who have also worked for at
least six (6) months
During the pre-election conference, 64 casual
workers were challenged by KIMBERLY and UKCEU-
PTGWO on the ground that they are not employees
of KIMBERLY but of RANK. It was agreed by all the
parties that the 64 voters shall be allowed to cast
their votes but that their ballots shall be segregated
and subject to challenge proceedings.
After the elections, UKCEU-PTGWO won over
KILUSAN-OLALIA by 20 votes. This count considered
the votes of the 64 employees as separate.
In a case regarding the status of the 64 employees
in relation to the certification election, it was held
by med-arbiter Sanchez that:
2)The other casual employees not
performing janitorial and yard maintenance
services were deemed labor-only
contractuals and since labor-only
contracting is prohibited, such employees
were held to have attained the status of
regular employees, the regularization being
effective as of the date of the decision;
3. UKCEU-PTGWO, having garnered more
votes than KILUSAN-OLALIA, was certified as
the exclusive bargaining representative of
KlMBERLY's employees;
Since the members were only considered regular at
the time of the decision, their votes were not re-
considered as regards the election. Winning union
and company executed a CBA. KIMBERLY-OLALIA
filed for a TRO on the CBA and included the
question of the status of the 64 members in
question.
ISSUE: Whether Or Not the 64 employees were
regular employees at the time of the certification
election
HELD: YES. Article 280 of the Labor Code provides
for two kinds of regular employees:
(1) those who are engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of
the employer; and
(2) those who have rendered at least one year
of service, whether continuous or broken,
with respect to the activity in which they are
employed
The individual petitioners herein who have been
adjudged to be regular employees (by law) fall
under the second category. These are the
mechanics, electricians, machinists, machine shop
helpers, warehouse helpers, painters, carpenters,
pipefitters and masons. It is not disputed that these
workers have been in the employ of KIMBERLY for
more than one year at the time of the filing of the
petition for certification election by KILUSAN-
OLALIA.
While the actual regularization of these employees
entails the mechanical act of issuing regular
appointment papers and compliance with such
other operating procedures as may be adopted by
the employer, it is more in keeping with the intent
and spirit of the law to rule that the status of regular
employment attaches to the casual worker on the
day immediately after the end of his first year of
service
The law is explicit. As long as the employee has
rendered at least one year of service, he becomes
a regular employee with respect to the activity in
which he is employed. The law does not provide
the qualification that the employee must first be
issued a regular appointment or must first be
formally declared as such before he can acquire a
regular status. Obviously, where the law does not
distinguish, no distinction should be drawn.
On the basis of the foregoing circumstances, and
as a consequence of their status as regular
employees, those workers not perforce janitorial
and yard maintenance service were performance
entitled to the payment of salary differential, cost of
living allowance, 13th month pay, and such other
benefits extended to regular employees under the
CBA, from the day immediately following their first
year of service in the company.
These regular employees are likewise entitled to
vote in the certification election held in July 1, 1986.
Consequently, the votes cast by those employees
not performing janitorial and yard maintenance
service, which forms part of the 64 challenged
votes, should be opened, counted and considered
for the purpose of determining the certified
bargaining representative.
INTEGRATED CONTRACTOR vs. NLRC (SOLON)
464 SCRA 265
QUISUMBING; August 9, 2005
NATURE: Appeal from a decision of the CA affirming
the NLRCs findings which declared respondent
Solon a regular employee of the petitioner and
awarded him with 13th month pay, service incentive
leave pay, reinstatement to his former position with
full backwages from the time his salary was
withheld until his reinstatement.
Page 48 of 5
FACTS: Petitioner is a plumbing contractor. Its
business depends on the number and frequency of
the projects it is able to contract with its clients.
Respondent Solon worked for petitioner several
months at a time from 1994 to 1998.
On Feb. 1998, while Solon was about to log out from
work, he was informed that it was his last day of
work as he had been terminated. He went back to
petitioners office to sign a clearance so he could
claim his 13th month pay and tax refunds. However,
he refused to sign when he read the clearance
indicating that he had resigned. He then filed a
complaint for illegal dismissal without due cause
and due process.
The Labor Arbiter ruled that Solon was a regular
employee and could only be removed for cause.
NLRC affirmed with only a modification as to the
computation of 13th month pay. CA also affirmed.
ISSUE: Whether Or Not respondent is a regular
employee
HELD: YES. The test to determine whether
employment is regular or not is the reasonable
connection between the particular activity
performed by the employee in relation to the usual
business or trade of the employer. Also, if the
employee has been performing the job for at least
one year, even if the performance is not continuous
or merely intermittent, the law deems the repeated
and continuing need for its performance as
sufficient evidence of the necessity, if not
indispensability of that activity to the business. (De
Leon v NLRC)
While length of time may not be the controlling test
for project employment, it is vital in determining if
the employee was hired for a specific undertaking
or tasked to perform functions vital, necessary and
indispensable to the usual business or trade of the
employer. Here, private respondent had been a
project employee several times over. His
employment ceased to be coterminous with
specific projects when he was repeatedly re-hired
due to the demands of petitioners business.
Disposition: Assailed Decision dated October 30,
2001 and the Resolution dated February 28, 2002 of
CA are AFFIRMED with MODIFICATION. The
petitioner id hereby ORDERED to (1) reinstate the
respondent with no loss of seniority rights and other
privileges; and (2) pay respondent his backwages,
13th month pay for the year 1998 and Service
Incentive Leave Pay computed from the date of his
illegal dismissal up to the date of his actual
reinstatement
SAN MIGUEL CORP vs. ABALLA
461 SCRA 392
CARPIO-MORALES; June 28 2005
NATURE: Special Civil Action in the Supreme Court.
Certiorari
FACTS: Petitioner San Miguel Corporation (SMC)
and Sunflower Multi-Purpose Cooperative
(Sunflower), entered into a one-year Contract of
Services commencing on January 1, 1993, to be
renewed on a month to month basis until
terminated by either party. The pertinent provisions
of the contract are:
1. The cooperative agrees and undertakes
to perform and/or provide for the company,
on a non-exclusive basis for a period of one
year the following services for the Bacolod
Shrimp Processing Plant:
A. Messengerial/Janitorial
B. Shrimp Harvesting/Receiving
C. Sanitation/Washing/Cold Storage
4. There is no employer-employee
relationship between the company and the
cooperative, or the cooperative and any of
its members, or the company and any
members of the cooperative. The
cooperative is an association of self-
employed members, an independent
contractor, and an entrepreneur. It is
subject to the control and direction of the
company only as to the result to be
accomplished by the work or services herein
specified, and not as to the work herein
contracted. The cooperative and its
members recognize that it is taking a
business risk in accepting a fixed service fee
to provide the services contracted for and
its realization of profit or loss from its
undertaking, in relation to all its other
undertakings, will depend on how efficiently
it deploys and fields its members and how
they perform the work and manage its
operations.
Pursuant to the contract, Sunflower engaged
private respondents to, as they did, render services
at SMCs Bacolod Shrimp Processing Plant at Sta.
Fe, Bacolod City. The contract was deemed
renewed by the parties every month after its
expiration on January 1, 1994 and private
respondents continued to perform their tasks until
September 11, 1995. In July 1995, private
respondents filed a complaint before the NLRC,
Regional Arbitration Branch No. VI, Bacolod City,
praying to be declared as regular employees of
SMC, with claims for recovery of all benefits and
privileges enjoyed by SMC rank and file employees.
Private respondents subsequently filed on
September 25, 1995 an Amended Complaint to
include illegal dismissal as additional cause of
action following SMCs closure of its Bacolod Shrimp
Processing Plant on September 15, 1995which
resulted in the termination of their services. SMC
filed a Motion for Leave to File Attached Third Party
Complaint dated November 27, 1995 to implead
Sunflower as Third Party Defendant which was, by
Order of December 11, 1995, granted by Labor
Arbiter Ray Alan T. Drilon. In the meantime, on
September 30, 1996, SMC filed before the Regional
Office at Iloilo City of the Department of Labor and
Employment (DOLE) a Notice of Closure of its
aquaculture operations effective on even date,
citing serious business losses. By Decision of
September 23, 1997, Labor Arbiter Drilon dismissed
private respondents complaint for lack of merit.
Private respondents appealed to the NLRC. By
Decision of December 29, 1998, the NLRC dismissed
Page 49 of 5
the appeal for lack of merit, it finding that third
party respondent Sunflower was an independent
contractor in light of its observation that [i]n all the
activities of private respondents, they were under
the actual direction, control and supervision of third
party respondent Sunflower, as well as the payment
of wages, and power of dismissal. By Decision of
February 7, 2001, the appellate court reversed the
NLRC decision and accordingly found for private
respondents. Justifying its reversal of the findings of
the labor arbiter and the NLRC, the appellate court
reasoned:Although the terms of the non-exclusive
contract of service between SMC and [Sunflower]
showed a clear intent to abstain from establishing
an employer-employee relationship between SMC
and [Sunflower] or the latters members, the extent
to which the parties successfully realized this intent
in the light of the applicable law is the controlling
factor in determining the real and actual
relationship between or among the parties.There
being a finding of labor-only contracting, liability
must be shouldered either by SMC or [Sunflower] or
shared by both (See Tabas vs. California
Manufacturing, Inc., supra, p. 502). SMC however
should be held solely liable for [Sunflower] became
non-existent with the closure of the aquaculture
business of SMC.
ISSUEs:1. Whether Or Not the respondents are
employees of San Miguel Corporation.
2. Whether Or Not the retrenchment was valid and
consequently, whether the respondents are entitled
to relief.
HELD:1. YES. Since private respondents who were
engaged in shrimp processing performed tasks
usually necessary or desirable in the aquaculture
business of SMC, they should be deemed regular
employees of the latter and as such are entitled to
all the benefits and rights appurtenant to regular
employment. They should thus be awarded
differential pay corresponding to the difference
between the wages and benefits given them and
those accorded SMCs other regular employees.
Respecting the private respondents who were
tasked with janitorial and messengerial duties, this
Court quotes with approval the appellate courts
ruling thereon:
Those performing janitorial and messengerial
services however acquired regular status only after
rendering one-year service pursuant to Article 280
of the Labor Code. Although janitorial and
messengerial services are considered directly
related to the aquaculture business of SMC, they
are deemed unnecessary in the conduct of its
principal business; hence, the distinctionThe law of
course provides for two kinds of regular employees,
namely: (1) those who are engaged to perform
activities which are usually necessary or desirable in
the usual business or trade of the employer; and (2)
those who have rendered at least one year of
service, whether continuous or broken, with respect
to the activity in which they are employed.
The test to determine the existence of independent
contractorship is whether one claiming to be an
independent contractor has contracted to do the
work according to his own methods and without
being subject to the control of the employer,
except only as to the results of the work. As for
those of private respondents who were engaged in
janitorial and messengerial tasks, they fall under the
second category and are thus entitled to
differential pay and benefits extended to other
SMC regular employees from the day immediately
following their first year of service.
In legitimate labor contracting, the law creates an
employer-employee relationship for a limited
purpose, i.e., to ensure that the employees are paid
their wages. The principal employer becomes
jointly and severally liable with the job contractor,
only for the payment of the employees wages
whenever the contractor fails to pay the
same. Other than that, the principal employer is
not responsible for any claim made by the
employees.[50]
In labor-only contracting, the statute creates an
employer-employee relationship for a
comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is
considered merely an agent of the principal
employer and the latter is responsible to the
employees of the labor-only contractor as if such
employees had been directly employed by the
principal employer.[51]
The Contract of Services between SMC and
Sunflower shows that the parties clearly disavowed
the existence of an employer-employee
relationship between SMC and private
respondents. The language of a contract is not,
however, determinative of the parties relationship;
rather it is the totality of the facts and surrounding
circumstances of the case.[52] A party cannot
dictate, by the mere expedient of a unilateral
declaration in a contract, the character of its
business, i.e., whether as labor-only contractor or
job contractor, it being crucial that its character be
measured in terms of and determined by the
criteria set by statute
2. San Miguel Corporation has thus proven
substantial business reverses justifying retrenchment
of its employees.
In the case at bar, company losses were duly
established by financial documents audited by
Joaquin Cunanan & Co. showing that the
aquaculture operations of SMCs Agribusiness
Division accumulated losses amounting to
P145,848,172.00 in 1992 resulting in the closure of its
Calatrava Aquaculture Center in Negros
Occidental, P11,393,071.00 in 1993 and
P80,325,608.00 in 1994 which led to the closure of its
San Fernando Shrimp Processing Plant in
Pampanga and the Bacolod Shrimp Processing
Plant in 1995. For termination due to retrenchment
to be valid, however, the law requires that written
notices of the intended retrenchment be served by
the employer on the worker and on the DOLE at
least one (1) month before the actual date of the
retrenchment in order to give employees some time
to prepare for the eventual loss of their jobs, as well
as to give DOLE the opportunity to ascertain the
verity of the alleged cause of termination. Private
respondents, however, were merely verbally
Page 50 of 5
informed on September 10, 1995 by SMC Prawn
Manager Ponciano Capay that effective the
following day or on September 11, 1995, they were
no longer to report for work as SMC would be
closing its operations. Where the dismissal is based
on an authorized cause under Article 283 of the
Labor Code but the employer failed to comply with
the notice requirement, the sanction should be stiff
as the dismissal process was initiated by the
employers exercise of his management
prerogative, as opposed to a dismissal based on a
just cause under Article 282 with the same
procedural infirmity where the sanction to be
imposed upon the employer should be tempered
as the dismissal process was, in effect, initiated by
an act imputable to the employee. In light of the
factual circumstances of the case at bar, the Court
awards P50,000.00 to each private respondent as
nominal damages.The grant of separation pay as
an incidence of termination of employment due to
retrenchment to prevent losses is a statutory
obligation on the part of the employer and a
demandable right on the part of the
employee. Private respondents should thus be
awarded separation pay equivalent to at least one
(1) month pay or to at least one-half month pay for
every year of service, whichever is higher, as
mandated by Article 283 of the Labor Code or the
separation pay awarded by SMC to other regular
SMC employees that were terminated as a result of
the retrenchment, depending on which is most
beneficial to private respondents.Considering that
private respondents were not illegally dismissed,
however, no backwages need be awarded. It is
well settled that backwages may be granted only
when there is a finding of illegal dismissal.[80] The
appellate court thus erred in awarding backwages
to private respondents. What was involved in that
case was one of illegal dismissal.
Fixed-Term: BRENT SCHOOL vs. ZAMORA
181 SCRA 702
NARVASA; February 5, 1990
NATURE: Appeal from judgment
FACTS: Alegre was athletic director at Brent, at a
yearly compensation of P20,000. Her contract fixed
a specific term of 5 years for its existence, from July,
1971, to July, 1976. Subsequent subsidiary
agreements in March 1973, August 1973, and Sept.
1974 reiterated the same terms and conditions,
including the expiry date, as those contained in the
original contract of July, 1971.
Three months before the expiration of the stipulated
period, in April 1976, Alegre was given a copy of
the report filed by Brent with the Dep. Of Labor
advising of the termination of his services, effective
July 16, 1976. The stated ground for termination was
completion of contract, expiration of the definite
period of employment.
Alegre protested the announced termination of his
employment. He argued that although his contract
did stipulate that the same would terminate on July
17, 1976, since his services were necessary and
desirable in the usual business of his employer, and
his employment had lasted for five years, he had
acquired the status of regular employee and could
not be removed except for valid cause.
The employment contract of 1971 was executed
when the Labor Code of the Philippines had not yet
been promulgated, which came into effect some 3
years after the perfection of the contract.
ISSUE: Whether Or Not the provisions of the Labor
Code regarding probationary/regular employees
have anathematized fixed period employment or
employment for a term.
HELD: NO. Before the Labor Code, there was no
doubt about the validity of term employment. It
was impliedly but clearly recognized by the
Termination Pay law, RA 1052.
The Civil Code, which has always recognized, and
continues to recognize, the validity and propriety of
contracts and obligations with a fixed or definite
period, and imposes no restraints on the freedom of
the parties to fix the duration of a contract,
whatever its object, be it specie, goods or services,
except the general admonition against stipulations
contrary to law, morals, good customs, public order
or public policy. Under the Civil Code, therefore,
and as a general proposition, fixed-term
employment contracts are not limited, as they are
under the present Labor Code, to those by nature
seasonal or for specific projects with pre-
determined dates of completion; they also include
those to which the parties by free choice have
assigned a specific date of termination.
(theres a long, long history about the changes of
provisions in the labor code, showing how fixed
period employment became less and less
acceptable...)
Where from the circumstances it is apparent that
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, morals, etc. But where no such intent to
circumvent the law is shown, where the reason for
the law does not exist, e.g., where it is indeed the
employee himself who insists upon a period or
where the nature of the engagement is such that,
without being seasonal or for a specific project, a
definite date of termination is a sine qua non,
would an agreement fixing a period be essentially
evil or illicit, therefore anathema? Would such an
agreement come within the scope of Article 2802
which admittedly was enacted "to prevent the
circumvention of the right of the employee to be
secured in (his) employment?"
Article 280 of the Labor Code, under a narrow and
literal interpretation would appear to restrict,
without reasonable distinctions, the right of an
employee to freely stipulate with his employer the
duration of his engagement, it logically follows that
such a literal interpretation should be eschewed or
avoided. The law must be given a reasonable
interpretation, to preclude absurdity in its
2 Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or where
the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such activity exists.
Page 51 of 5
application. Outlawing the whole concept of term
employment and subverting to boot the principle of
freedom of contract to remedy the evil of
employer's using it as a means to prevent their
employees from obtaining security of tenure is like
cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the
head.
Familiar examples of employment contracts which
may be neither for seasonal work nor for specific
projects, but to which a fixed term is essential:
overseas employment contracts to which, the
concept of regular employment will all that it
implies does not appear ever to have been
applied, Article 280 of the Labor Code not
withstanding; appointments to the positions of
dean, assistant dean, college secretary, principal,
and other administrative offices in educational
institutions, which are by practice or tradition
rotated among the faculty members, and where
fixed terms are a necessity, without which no
reasonable rotation would be possible. Despite the
provisions of Article 280, Policy, Instructions No. 8 of
the Minister of Labor implicitly recognize that
certain company officials may be elected for what
would amount to fixed periods, at the expiration of
which they would have to stand down, in providing
that these officials," . . . may lose their jobs as
president, executive vice-president or vice-
president, etc. because the stockholders or the
board of directors for one reason or another did not
re-elect them."
Since the entire purpose behind the development
of legislation culminating in the present Article 280
of the Labor Code clearly appears to have been to
prevent circumvention of the employee's right to
be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written
or oral agreements conflicting with the concept of
regular employment as defined therein should be
construed to refer to the substantive evil that the
Code itself has singled out: agreements entered
into precisely to circumvent security of tenure. It
should have no application to instances where a
fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without
any force, duress or improper pressure being
brought to bear upon the employee and absent
any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer
and employee dealt with each other on more or
less equal terms with no moral dominance
whatever being exercised by the former over the
latter. Unless thus limited in its purview, the law
would be made to apply to purposes other than
those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt
to lead to absurd and unintended consequences.
Disposition: The public respondent's Decision
complained of is REVERSED and SET ASIDE.
Respondent Alegre's contract of employment with
Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of
period thereof, he is declared not entitled to
reinstatement and the other relief awarded and
confirmed on appeal in the proceedings below.
FERDINAND PALOMARES and TEODULO
MUTIA, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, (5TH DIVISION) and NATIONAL STEEL
CORPORATION, respondents.
Facts: Petitioners Ferdinand Palomares and Teodulo
Mutia were hired by respondent National Steel
Corporation (NSC) by virtue of contracts of
employment for its Five Year Expansion Program or
FYEP, Phase I and II-A, for varying lengths of time.
Petitioners, along with other employees, filed a
consolidated petition for regularization, wage
differential, CBA coverage and other benefits.[2] In
his decision dated April 29, 1992, Labor Arbiter
Nicodemus G. Palangan ordered the dismissal of
the complaint with respect to 26 complainants but
ruled in favor of petitioners. Palomares, Mutia and
four other complainants were adjudged as regular
employees of respondent corporation. The
dispositive portion of his decision reads:
WHEREFORE, premises considered, the petition for
regularization as well as the monetary benefits of
the above-named complainants are hereby
ordered DISMISSED for lack of merit except six
complainants stated below.
For the complainants who were terminated during
the pendency of these cases the respondent is
hereby ordered to pay them separation pay
equivalent to one month salary for those who have
rendered one or two years of service and three
months salary for those who have served the
company for at least 5 years.
For complainants Edgardo Pongase, Aquiles Colita,
Lolinio Solatorio, Ferdinand Palomares, Teodulo
Mutia, and Rodolfo Leopoldo, this office consider
(sic) them as regular employees for reason that the
activities they performed are regular, and
necessary in the usual trade or course of business of
the company.
Respondent is likewise ordered to pay these regular
employees their salary differential to be computed
three years back from the filing of these complaints.
On appeal, the NLRC reversed the findings of the
Labor Arbiter in a decision dated November 23,
1994. Respondent Commission held that petitioners
were project employees and that their assumption
of regular jobs were mainly due to peakloads or the
absence of regular employees during the latters
temporary leave.[4] After their motion for
reconsideration was denied on March 30,
1995,[5] petitioners filed this petition. The Court finds
that petitioners failed to show any grave abuse of
discretion on the part of the NLRC in rendering its
questioned decision and resolutions of November
23, 1994 and March 30, 1995, respectively.
ISSUE: WON the employment was on a fixed term
basis.
RULING: Yes.Article 280 of the Labor Code, the law
on the subject of regular employment, reads:
Page 52 of 5
The provisions of the written agreement to the
contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be
deemed to be regular where the employee has
been engaged to perform activities which are
usually necessary or desirable in the usual business
or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which
has been determined at the time of the
engagement of the employee or where the work or
services to be performed is seasonal in nature and
the employment is for the duration of the season.
An employment shall be deemed to be casual if it is
not covered by the preceding paragraph:
Provided, That any employee who has rendered at
least one year of service, whether such service is
continuous or broken shall be considered a regular
employee with respect to the activity in which he is
employed and his employment shall continue while
such actually exists. (Emphasis added).
The principal test for determining whether an
employee is a project employee and not a regular
employee is whether he was assigned to carry out
a specific project or undertaking, the duration and
scope of which were specified at the time he was
engaged for that project.
It is quite evident that petitioners were employed
for a specific project or projects undertaken by
respondent corporation. The component projects
of the latters Five Year Expansion Program include
the setting up of a Cold Rolling Mill Expansion
Project, establishing a Billet Steel-Making Plant,
installation of a Five Stand TDM and Cold Mill
Peripherals Project. In the case of ALU-
TUCP v. NLRC, we held that the same Five Year
Expansion Program (or more precisely, each of its
component projects) constitutes a distinct
undertaking identifiable from the ordinary business
and activity of NSC, which is the production and
marketing of steel products. Even if, as admitted by
the parties, petitioners were repeatedly and
successively re-hired on the basis of a contract of
employment for more than one year, they cannot
be considered regularized. Length of service is not
the controlling determinant of the employment
tenure of a project employee.[16] As stated earlier, it
is based on whether or not the employment has
been fixed for a specific project or undertaking, the
completion of which has been determined at the
time of the engagement of the
employee. Furthermore, the second paragraph of
Article 280, providing that an employee who has
rendered service for at least one (1) year, shall be
considered a regular employee, pertains to casual
employees and not to project employees such as
petitioners.
PHILIPS SEMICONDUCTORS (PHILS.), INC., petitioner,
vs. ELOISA FADRIQUELA, respondent.
Facts: The petitioner Philips Semiconductors (Phils.),
Inc. is a domestic corporation engaged in the
production and assembly of semiconductors such
as power devices, RF modules, CATV modules, RF
and metal transistors and glass diods. It caters to
domestic and foreign corporations that
manufacture computers, telecommunications
equipment and cars.
Aside from contractual employees, the petitioner
employed 1,029 regular workers. The employees
were subjected to periodic performance appraisal
based on output, quality, attendance and work
attitude.[2]One was required to obtain a
performance rating of at least 3.0 for the period
covered by the performance appraisal to maintain
good standing as an employee.
On May 8, 1992, respondent Eloisa Fadriquela
executed a Contract of Employment with the
petitioner in which she was hired as a production
operator with a daily salary of P118. Her initial
contract was for a period of three months up
to August 8, 1992,[3] but was extended for two
months when she garnered a performance rating
of 3.15.[4] Her contract was again renewed for two
months or up to December 16, 1992,[5] when she
received a performance rating of 3.8.[6] After the
expiration of her third contract, it was extended
anew, for three months,[7] that is, from January 4,
1993 to April 4, 1993.
After garnering a performance rating of 3.4,[8] the
respondents contract was extended for another
three months, that is, from April 5, 1993 to June 4,
1993.[9] She, however, incurred five absences in the
month of April, three absences in the month of May
and four absences in the month of June.[10] Line
supervisor Shirley F. Velayo asked the respondent
why she incurred the said absences, but the latter
failed to explain her side. The respondent was
warned that if she offered no valid justification for
her absences, Velayo would have no other
recourse but to recommend the non-renewal of her
contract. The respondent still failed to respond, as a
consequence of which her performance rating
declined to 2.8. Velayo recommended to the
petitioner that the respondents employment be
terminated due to habitual absenteeism,[11]in
accordance with the Company Rules and
Regulations.[12] Thus, the respondents contract of
employment was no longer renewed.
The respondent filed a complaint before the
National Capital Region Arbitration Branch of the
National Labor Relations Commission (NLRC) for
illegal dismissal against the petitioner, docketed as
NLRC Case No. NCR-07-04263-93. She alleged, inter
alia, that she was illegally dismissed, as there was no
valid cause for the termination of her
employment. She was not notified of any infractions
she allegedly committed; neither was she
accorded a chance to be heard. According to the
respondent, the petitioner did not conduct any
formal investigation before her employment was
terminated. Furthermore, considering that she had
rendered more than six months of service to the
petitioner, she was already a regular employee and
could not be terminated without any justifiable
cause. Moreover, her absences were covered by
the proper authorizations.[13]
Page 53 of 5
On the other hand, the petitioner contended that
the respondent had not been dismissed, but that
her contract of employment for the period of April
4, 1993 to June 4, 1993 merely expired and was no
longer renewed because of her low performance
rating. Hence, there was no need for a notice or
investigation. Furthermore, the respondent had
already accumulated five unauthorized absences
which led to the deterioration of her performance,
and ultimately caused the non-renewal of her
contract. On June 26, 1997, the Labor Arbiter
rendered a decision dismissing the complaint for
lack of merit. On October 11, 1999, the appellate
court rendered a decision reversing the decisions of
the NLRC and the Labor Arbiter and granting the
respondents petition.
ISSUE: WON the petitioners are still contractual
employees whose employment was fixed.
RULING: No, the petitioners became regular
employees. Art. 280. Regular and Casual
Employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the
oral argument 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.
The two kinds of regular employees under the law
are (1) those engaged to perform activities which
are necessary or desirable in the usual business or
trade of the employer; and (2) those casual
employees who have rendered at least one year of
service, whether continuous or broken, with respect
to the activities in which they are employed.[20] The
primary standard to determine a regular
employment is the reasonable connection
between the particular activity performed by the
employee in relation to the business or trade of the
employer. The test is whether the former is usually
necessary or desirable in the usual business or trade
of the employer. In this case, the respondent was
employed by the petitioner on May 8, 1992 as
production operator. She was assigned to
wirebuilding at the transistor division. There is no
dispute that the work of the respondent was
necessary or desirable in the business or trade of
the petitioner.[24] She remained under the employ of
the petitioner without any interruption since May 8,
1992 to June 4, 1993 or for one (1) year and twenty-
eight (28) days. The original contract of
employment had been extended or renewed for
four times, to the same position, with the same
chores. Such a continuing need for the services of
the respondent is sufficient evidence of the
necessity and indispensability of her services to the
petitioners business. While at the start, petitioner
was just a mere contractual employee, she
became a regular employee as soon as she had
completed one year of service. It is not difficult to
see that to uphold the contractual arrangement
between private respondent and petitioner would,
in effect, be to permit employers to avoid the
necessity of hiring regular or permanent
employees. By hiring employees indefinitely on a
temporary or casual status, employers deny their
right to security of tenure. This is not sanctioned by
law. [34]
Even then, the petitioners reliance on the CBA is
misplaced. For, as ratiocinated by the appellate
court in its assailed decision:
Obviously, it is the express mandate of the CBA not
to include contractual employees within its
coverage. Such being the case, we see no reason
why an agreement between the representative
union and private respondent, delaying the
regularization of contractual employees, should
bind petitioner as well as other contractual
employees. Indeed, nothing could be more unjust
than to exclude contractual employees from the
benefits of the CBA on the premise that the same
contains an exclusionary clause while at the same
time invoke a collateral agreement entered into
between the parties to the CBA to prevent a
contractual employee from attaining the status of a
regular employee.
PHILIPPINE TOBACCO FLUE-CURING & REDRYING
CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION
Facts: These refer to the consolidated cases for
payment of separation pay lodged by [the] Lubat
Group, and for illegal dismissal and underpayment
of separation pay by [the] Luris group, with prayers
for damages and attorneys fees against the above
respondents.
The record reveals that all complainants in both
cases were former workers of respondent with their
respective periods of employment and latest
wages stated in the parties pleadings/[a]nnexes.
On August 1, 1994, due to supposed serious
financial reverses and losses suffered by respondent
and its desire to prevent further losses, a notice of
permanent closure of its red[r]ying operations at
Balintawak, Quezon City and transfer [of] the same
to Candon, Ilocos Sur was served to the DOLE.
On August 3, 1994, complainants were also notified
of the said decision to close and transfer.
On August 16, 1994, their separation benefits were
given to them but allegedly [based on] wrong
computation when management did not consider
3/4 of their length of service as claimed by
complainants (Luris group).
Page 54 of 5

While the Lubat group were not granted xxx
separation pay as their previous seasonal service
[was] not continuous, and as of August, 1994, they
were not employed ther[e]with as declared by
respondent.
Based on the complaint and from the above facts,
the issues are as follows:
1) Whether or not the Lubat Group are entitled to
the payment of separation pay[;]
2) Whether or not the Luris Group can be legally
awarded separation pay differentials[,] or whether
or not the computation adopted by respondent in
granting complainants separation pay is
erroneous[;] and
3) Whether or not the Luris group can be properly
allowed backwages and damages by reason of
their alleged illegal dismissal, and for both groups,
attorneys fees[.]
In [its] position paper respondent maintains that
[the] Lubat group are not entitled to separation
pay for the reason that they were not among those
separated or could not have been separated from
employment on August 3, 1994 due to such closure
and transfer as they were not employed or did not
report for work at the plant for the 1994 tobacco
season as shown by [the] companys records.
As to the Luris group, although being questioned by
this group, respondent considers the following
formula in determining the length of service in years
as basis for computing the separation pay of this
group to be fair and reasonable and xxx supported
by Article 283 of the Labor Code, as amended,
such as the total number of working days actually
worked over total number of working days in a year
(303 days), multipl[ied] by the daily rate and further
multipl[ied] by 15 days.
Respondent explains that this is so because
complainants nature of work is seasonal as they are
employed every year only during the tobacco
season which may fall within the months of February
to November but actually work for a period of less
[than] six (6) months for each season. The law
qualifies tenure for purposes of separation benefits
as based on service and not employment.
With these considerations, respondent claims that
complainants relief for separation pay
differentials must fail.
On the charge of illegal dismissal by the Luris group,
respondent asserts that complainants were
separated from employment for [a] just cause that
is the closure of its REDRYING operations at the
Balintawak plant and the transfer of the same to
Candon, Ilocos Sur which was authorized by the
law and the parties CBA.
The decision of management to close and transfer
its tobacco processing and REDRYING operations
was based on the fact that it had consistently
incurred a net loss from these operations, its
principal line of business, although its audited
financial statement showed a net profit after tax
from 1990 to 1993 based on over-all operations.
Moreover, respondent points out that as the Luris
group and the DOLE were served a written notice
at least one (1) month before the intended date of
closure effective on Sept. 15, 1994, the due process
requirement was met.
Viewed from the above, respondent cannot
prosper.
On the other hand, the Lubat group declare that
originally there were seven complainants but eight
were added.
Being seasonal workers, they were hired by
respondent to operate the Balintawak factory from
January to September, averaging 6 to 8 months
annually.
As alleged by them, when they reported for their
annual shift, respondent refused to extend them
assignment for no apparent reason up to the end
of the season in August, 1994. When they ask[ed]
for separation pay, respondent told them that
because they were not in the payroll for 1994, no
such benefit would be paid to them.
It is their contention that complainants are entitled
to separation pay [of] at least one-half month pay
for every year of service[,] as they were illegally
dismissed[,] to be computed each season ranging
from 6 to 8 months [which] should be considered as
one year, contrary to the respondents basis which is
the total no. of days they actually rendered service.
To back up the above, complainants cite a case
wherein the Supreme Court held that seasonal
employees are not strictly speaking, separated from
the service but merely considered on leave of
absence without pay until reemployed. Their
employment relationship is never severed but only
suspended.
For the prosecution of this case, complainants were
forced to hire the services of counsel for which they
claim xxx attorneys fees.
As far as the Luris group are concerned, they state
that they were factory workers of
respondents numbering one hundred (100) whose
names, periods of employment and latest salaries
are contained in the lists attached to their position
paper.
As claimed by this group, on August 3, 1994,
respondents told them that their services were
already terminated and all of them dismissed as the
factory would be transferred to Candon, Ilocos Sur.
Letter-notices dated August 3, 1994, (Annexes F, F-1
and F-2 to their position paper) showing that the
date when they were notified of the closure was
the same date they were instantly dismissed
although it is admitted in the notice that their
decision to transfer was made as early as March 5,
1994.
Furthermore, complainants question the basis of the
computations of their separation benefits which
should include the period when there [was] no work
to be done in a year. [B]ecause of necessity, they
received the short amount as their separation pay
by way of voucher but under protest as shown in
Annexes C-C-1 to C-5 to their pleading.
Page 55 of 5

With the sudden transfer of the machiner[y] of
respondents without giving them advance notice
leaving them with insufficient separation pay,
complainants experienced serious anxiety and
wounded feelings for which they p[r]ay for
damages including attorneys fees.
Consequently, complainants also pray for
backwages, allowance and other benefits from the
date of their illegal dismissal up to the final
disposition of the case.
Furthermore, complainants maintain that since the
company is being transferred to the province, the
formers separation may be considered compulsory
retirement under R.A. 7641, providing for one-half
month pay benefit for every year of service, and
under Section 3, Rule V, Book III of the Labor Code,
as amended for which they also demand payment
thereof.
Complainants also submitted the computation of
their differential in separation pay (addendum and
supplemental addendum to their position paper)
Annex G, G-1 to G-4.
To state the facts simply, there are two groups of
employees, namely, the Lubat group and the Luris
group. The Lubat group is composed of petitioners
seasonal employees who were not rehired for the
1994 tobacco season. At the start of that season,
they were merely informed that their employment
had been terminated at the end of the 1993
season. They claimed that petitioners refusal to
allow them to report for work without mention of
any just or authorized cause constituted illegal
dismissal. In their Complaint, they prayed for
separation pay, back wages, attorneys fees and
moral damages.
On the other hand, the Luris group is made up of
seasonal employees who worked during the 1994
season. On August 3, 1994, they received a notice
informing them that, due to serious business losses,
petitioner planned to close its Balintawak plant and
transfer its tobacco processing and redrying
operations to Ilocos Sur. Although the closure was
to be effective September 15, 1994, they were no
longer allowed to work starting August 4,
1994. Instead, petitioner awarded them separation
pay computed according to the following formula:
total no. of days actually worked
----------------------------------------------------- x daily rate x
15 days
total no. of working days in one year.
In their Complaint, they claimed that the
computation should be based not on the above
mathematical equation, but on the actual number
of years served. In addition, they contended that
they were illegally dismissed, and thus they prayed
for back wages.
Against these factual antecedents, the labor
arbiter ordered the petitioner to pay complainants
separation pay differential plus attorneys fees in the
total amount of P3,092,896.76. Dissatisfied with said
Decision, Philippine Tobacco and the complainants
filed their respective appeals before the NLRC.[5]
As noted earlier, the NLRC affirmed the labor
arbiters Decision. Before this Court, only Philippine
Tobacco filed the present recourse, as the
complainants did not question the NLRC Decision.
ISSUE: WON the employees being seasonal
employees were illegally dismissed.
RULING: Yes, these seasonal employees were
illegally dismissed.
Petitioner relies upon our ruling in Mercado v.
NLRC[11] hat the employment [of seasonal
employees] legally ends upon completion of the x x
x season, a statement which was subsequently
reiterated in Magcalas v. NLRC.[12] Thus, petitioner
argues that it was not obliged to rehire the
members of the Lubat group for the 1994 season,
because their employment had been terminated
at the end of the 1993 season. Since they were not
employed for the 1994 season when the Balintawak
plant was closed, it follows that petitioner has no
obligation to award them separation pay due to
the said closure.
We are not persuaded. From the facts, we are
convinced that petitioner illegally dismissed the
members of the Lubat group when it refused to
allow them to work during the 1994 season.
This Court has previously ruled in Manila Hotel
Company v. CIR[13] that seasonal workers who are
called to work from time to time and are
temporarily laid off during off-season are not
separated from service in said period, but are
merely considered on leave until reemployed, viz.:
The nature of their relationship x x x is such that
during off season they are temporarily laid off but
during summer season they are re-employed, or
when their services may be needed. They are not
strictly speaking separated from the service but are
merely considered as on leave of absence without
pay until they are re-employed.
Prescinding from the above, we hold that petitioner
is liable for illegal dismissal and should be
responsible for the reinstatement of the Lubat group
and the payment of their back wages. However,
since reinstatement is no longer possible as
petitioner has already closed its Balintawak plant,
respondent members of the said group should
instead be awarded normal separation pay (in lieu
of reinstatement) equivalent to at least one month
pay, or one month pay for every year of service,
whichever is higher. It must be stressed that the
separation pay being awarded to the Lubat group
is due to illegal dismissal; hence, it is different from
the amount of separation pay provided for in
Article 283 in case of retrenchment to prevent losses
or in case of closure or cessation of the employers
business, in either of which the separation pay is
equivalent to at least one (1) month or one-half
(1/2) month pay for every year of service,
whichever is higher.
Page 56 of 5
However, despite the fact that the respondent
members of the Lubat group were entitled to
separation pay equivalent to at least one (1) month
pay, or one (1) month pay for every year of service,
whichever is higher, they cannot receive more than
the amount awarded to them in the NLRC Decision
-- at least one (1) month or one-half (1/2) month
pay for every year of service, whichever is higher --
because they did not appeal from the said
Decision.[21] Therefore, no affirmative award can be
given to them. In the same manner, although
respondents should have been entitled to back
wages because petitioner illegally deprived them
of work during the 1994 season, no such award can
be given to them, since they did not appeal the
NLRC Decision. The elementary norms of due
process prevent the grant of such awards, as the
employer was not given notice that its filing of its
own Petition for Certiorari would put it in jeopardy
of such relief.
HACIENDA BINO/HORTENCIA STARKE,
INC./HORTENCIA L.
STARKE, petitioners, vs. CANDIDO CUENCA
Facts: Hacienda Bino is a 236-hectare sugar
plantation located at Barangay Orong,
Kabankalan City, Negros Occidental, and
represented in this case by Hortencia L. Starke,
owner and operator of the said hacienda.
The 76 individual respondents were part of the
workforce of Hacienda Bino consisting of 220
workers, performing various works, such as
cultivation, planting of cane points, fertilization,
watering, weeding, harvesting, and loading of
harvested sugarcanes to cargo trucks.[2]
On July 18, 1996, during the off-milling season,
petitioner Starke issued an Order or Notice which
stated, thus:
To all Hacienda Employees:
Please bear in mind that all those who signed in
favor of CARP are expressing their desire to get out
of employment on their own volition.
Wherefore, beginning today, July 18, only those
who did not sign for CARP will be given
employment by Hda. Bino.
(Sgd.) Hortencia Starke[3]
The respondents regarded such notice as a
termination of their employment. As a In Mercado, although respondent constantly
consequence, they filed a complaint for illegal
dismissal, wage differentials, 13th month pay,
holiday pay and premium pay for holiday, service
incentive leave pay, and moral and exemplary
damages with the NLRC, Regional Arbitration
Branch No. VI, Bacolod City, on September 17,
1996.[4]
In their Joint Sworn Statement, the respondents as
complainants alleged inter alia that they are
regular and permanent workers of
the hacienda and that they were dismissed without
just and lawful cause. They further alleged that they
were dismissed because they applied as
beneficiaries under the Comprehensive Agrarian
Reform Program (CARP) over the land owned by
petitioner Starke.[5]
For her part, petitioner Starke recounted that the
companys Board of Directors petitioned the
Sangguniang Bayan of Kabankalan for authority to
re-classify, from agricultural to industrial,
commercial and residential, the whole of Hacienda
Bino, except the portion earmarked for the CARP.
She asserted that half of the workers supported the
re-classification but the others, which included the
herein respondents, opted to become beneficiaries
of the land under the CARP. Petitioner Starke
alleged that in July 1996, there was little work in the
plantation as it was off-season; and so, on account
of the seasonal nature of the work, she issued the
order giving preference to those who supported
the re-classification. She pointed out that when the
milling season began in October 1996, the work was
plentiful again and she issued notices to all workers,
including the respondents, informing them of the
availability of work. However, the respondents
refused to report back to work. With respect to the
respondents money claims, petitioner Starke
submitted payrolls evidencing payment thereof.
On October 6, 1997, Labor Arbiter Ray Allan T. Drilon
rendered a Decision,[6] finding that petitioner
Starkes notice dated July 18, 1996 was tantamount
to a termination of the respondents services, and
holding that the petitioner company was guilty of
illegal dismissal. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is
hereby rendered declaring the dismissal of the
complainants illegal. Both the petitioners and the
respondents appealed the case to the NLRC. On
July 24, 1998, the NLRC affirmed with modification
the decision of the Labor Arbiter.
ISSUE: WON the employees are seasonal
employees.
RULING: No, they are regular emoployees.
Indeed, in a number of cases, the Court has
recognized the peculiar facts attendant in
the Mercado case. In Abasolo v. NLRC,[24] and
earlier, in Philippine Tobacco Flue-Curing &
Redrying Corporation v. NLRC,[25] the Court made
the following observations:
availed herself of the petitioners services from year
to year, it was clear from the facts therein that they
were not in her regular employ. Petitioners therein
performed different phases of agricultural work in a
given year. However, during that period, they were
free to work for other farm owners, and in fact they
did. In other words, they worked for respondent, but
were nevertheless free to contract their services
with other farm owners. The Court was thus
emphatic when it ruled that petitioners were mere
project employees, who could be hired by other
farm owners.[26]
Recently, the Court reiterated the same
observations in Hacienda Fatima v. National
Federation of Sugarcane Workers-Food and
Page 57 of 5
General Trade[27] and added that the petitioners in
the Mercado case were not hired regularly and
repeatedly for the same phase/s of agricultural
work, but on and off for any single phase thereof.
In this case, there is no evidence on record that the
same particulars are present. The petitioners did not
present any evidence that the respondents were
required to perform certain phases of agricultural
work for a definite period of time. Although the
petitioners assert that the respondents made their
services available to the neighboring haciendas,
the records do not, however, support such
assertion.
The primary standard for determining regular
employment is the reasonable connection
between the particular activity performed by the
employee in relation to the usual trade or business
of the employer.[28] There is no doubt that the
respondents were performing work necessary and
desirable in the usual trade or business of an
employer. Hence, they can properly be classified as
regular employees.
For respondents to be excluded from those
classified as regular employees, it is not enough that
they perform work or services that are seasonal in
nature. They must have been employed only for the
duration of one season.[29] While the records
sufficiently show that the respondents work in
the hacienda was seasonal in nature, there was,
however, no proof that they were hired for the
duration of one season only. In fact, the
payrolls,[30] submitted in evidence by the petitioners,
show that they availed the services of the
respondents since 1991. Absent any proof to the
contrary, the general rule of regular employment
should, therefore, stand. It bears stressing that the
employer has the burden of proving the lawfulness
of his employees dismissal.[31]
On the procedural issue, petitioner Starke avers that
the CA should not have denied outright her motion
for reconsideration, considering its timely filing and
the huge amount involved. This contention is
already moot. Petitioner Starke has already aired in
this petition the arguments in her motion for
reconsideration of the CA decision, which have
been adequately addressed by this Court.
Assuming arguendo that the CA indeed failed to
consider the motion for reconsideration, petitioner
Starke was not left without any other recourse.[32]
IN LIGHT OF ALL THE FOREGOING, the petition is
DENIED.
THE PHILIPPINE AMERICAN LIFE AND GENERAL
INSURANCE CO., petitioner, vs. ANGELITA S.
GRAMAJE, respondent.
Facts: Private respondent Philippine American Life
and General Insurance Company is a corporation
duly organized and existing under Philippine laws.
Individual respondents occupy the following
positions, namely: Maurice Greenberg, as president
of the Company; Jose Cuisia, Jr. as Chairman of the
Board; Maria Haas and Gardon Watson as Regional
Coordinating Pensions Officers, Reynaldo C.
Centeno as Executive Vice-President, Chief
Financial Officer and Chief Actuary; and Anthony
Sotelo as the Senior Vice-President and Head of the
Human Resources Department.
Petitioner was employed on October 28, 1997 by
private respondent as Assistant Vice President and
Head of the Pensions Department and in
concurrent capacity as Trust Officer of Philam
Savings Bank, a Philam Life subsidiary. She was to
be paid P750,000.00 per annum and is entitled to
the benefits given by private respondent to its
employees.
Working as Assistant Vice President of Pensions
Department of Philamlife, petitioner was offered an
additional position by respondent Cuisia, which was
then resolved and approved by Philam Savings
Banks Board of Directors, for the position of Head of
Trust Banking Division or AVP-Trust Officer on a
concurrent capacity and under a separate
compensation.
Effective January 1998, however, petitioners
marketing manager and marketing officer were
immediately transferred to Group Insurance
Division. Petitioner, thereafter, was never given
replacements for the marketing manager and
marketing officer, contrary to private respondent
Cuisias assurance. Thus, petitioner ran the Pensions
Department single-handedly with only one
administrative assistant as her staff. Petitioner did
the field work, the desk work (administrative, legal,
finance, marketing), the out of town meetings, the
client presentations, aside from her work with the
Philam Savings Bank as fund manager, wherein
private respondent Cuisia offered to her for a
separate compensation, but has still remain [sic]
unpaid.
Sometime in November, 1998, petitioner availed of
her housing and car benefits and applied for a car
loan and housing loan.
On November 18, 1998, however, private
respondent through Centeno and Sotelo, offered
her P250,000.00 for her to vacate her position by
December 1998. Petitioner declined the offer
considering that there was no valid reason for her
to leave. Private respondents Centeno and Sotelo
admonished her that her filing of suit would prompt
respondent Cuisia to blacklist her in companies
where he holds directorships and advised her that
Philamlife is big and can stand the long ordeal of
justice system, whereas she may not withstand the
phase of the trial. Evidence that this meeting and
matter took place was the formal letter of rejection
dated November 25, 1998 sent by petitioner and
duly received by the offices of respondents Cuisia,
Centeno and Sotelo.
Pertinent portion of the November 25, 1998 letter is
hereby quoted:
[T]his shall summarize the discussion of meeting held
at Mr. Centenos Office last November 18, 1998.
Briefly, an offer of Two Hundred Fifty Thousand
[Pesos] (P250,000) has been made as Settlement
fee so that Philamlife will not resort to transferring
undersigned to another department for reasons
only known to management and which
undersigned is still not fully aware in writing. In so
Page 58 of 5
doing, it has been emphasized that Mr. Centeno
and Mr. Sotelo is (sic) sparing undersigned of the
hardships that undersigned will undergo in the said
other department which is intended to make
undersigned inefficient and eventually serve as
basis for her termination or as claimed non-election
by March 1999. Further, it has been requested and
categorically stated by Mr. Sotelo that undersigned
forgive Maria Haas for whatever she has done
On December 6, 1998, respondent Cuisia met with
petitioner and cajoled her to reconsider and
accept the offer of settlement. Cuisia even
volunteered to help her look for another job.
Petitioner declined, and reiterated that the
actuations of respondents clearly intended to
harass and humiliate her and have caused her and
her family extreme emotional stress.
On December 8, 1998, two days after the aforesaid
December 6 meeting, respondents issued her a
memorandum instructing her to transfer to the
Legal Department effective December 14, 1998
and to make proper turnover and submit the status
report not later than December 11, 1998.
By her letter dated December 10, 1998, petitioner
protested the sudden unexplained transfer, more so
a non-existing position, and stressed that she was
hired because of her marketing, finance, and fund
management skills, not her legal skills. She also
made of record that her department surpassed the
target fund level volume set by the company, thus:
Undersigned wish to inform you that your directive
for the transfer of undersigned to the legal
department is being contested on the ground of
outright violation of undersigneds rights.
Undersigned believe that the transfer will not make
her efficient in her work. Undersigned was hired
primarily because of her marketing, finance, and
fund management skills. Her legal skills are
secondary and supplementary in nature. Thus,
transfer to the legal department, which is primarily
legal, is not acceptable for it will only make
undersigned less efficient and negates her
productivity and contribution to the company.
Let it be on record, that as of today, the
Department has surpassed its P15 Million target,
which was originally at P12 Million, as set by no less
than the president of Philamlife during the budget
preparation and as duly reviewed and approved
by the head of the corporation planning
department, as fully documented. For the records,
we are almost hitting the P20 Million fund level
volume, and we are just waiting for the confirmed
P109 Million placement of Adamson University
Retirement Fund.
With the above, by December 14, 1998
undersigned will continue to be the head of the
Pensions Department until this new issue and the
other issues raised are fully resolved.
Atty. Angelita S. Gramaje
AVP-Pensions Department
Also, on December 10, 1998, respondent Centeno
declined the car loan benefit of petitioner, thus:
This refers to your 9 December 1998 memorandum
regarding your request for a car loan. I have earlier
discussed your application for a car loan with both
Mr. Anthony B. Sotelo, FVP and Corporate HR
Director and Mr. Jose L. Cuisia, Jr., President and
CEO. Considering your present employment status,
which has been the subject of several discussions
between you and Messrs. Jose L. Cuisia, Jr. and
Anthony B. Sotelo and myself, we deem it prudent
to defer action on your loan request until such time
that the issue is resolved with definitiveness.
On December 16, 1998, petitioner, while on Official
Sick Leave, received a message in her pager that
the Pensions Department, which was then holding
office at the fifth floor of the Philamlife Building at
United Nations Avenue was assumed to be headed
by Corine Moralda as her successor, and the
Pensions Department was to be immediately
physically transferred on said date at the Philamlife
Gammon Center in Makati City. Though sick and on
official sick leave, petitioner went to the office on
December 17, 1998 to verify, and upon seeing the
Pensions Department totally dark, without any staff
and with left over fixtures, petitioner, emotionally
shattered, opted to just leave the premises.
On December 18, 1998, respondent Cuisia through
a memorandum appointed Ms. Corine Moralda as
replacement of petitioner as Head of the Pensions
Department effective December 14, 1998. It was
only at that time that petitioner learned that as
early as August 23, 1998, respondents had
advertised in the Manila Bulletin for her
replacement.
Also, although, it is the tradition of Philamlife to give,
during the Christmas Season, officers and
employees a traditional Seasons giveaways, i.e.,
ham and queso de bola, petitioner then, thru her
authorized representatives, asked for her share, but
she was not in the list of recipients. Petitioners name
was not in the Legal Department, not in the
Pensions Department, and not in the list of
employees of Philamlife when verified with the
Personnel Department.
Hence, on December 23, 1998, petitioner filed the
instant case for illegal or constructive dismissal
against herein private respondents.
The Labor Arbiter, in his decision[4] dated 01 June
2000, found that respondent was not illegally
dismissed.
ISSUE: WON the respondent was constructively
dismissed.
RULING: Yes. Constructive dismissal exists when an
act of clear discrimination, insensibility or disdain by
an employer has become so unbearable to the
employee leaving him with no option but to forego
with his continued employment.[32] The
circumstances which prevailed in the working
environment of the respondent clearly demonstrate
this. The failure of the Labor Arbiter to resolutely
consider these prevailing circumstances before
respondent was asked to transfer was a major flaw
in his decision. Clearly, had the Labor Arbiter
considered them, he would have concluded that
the transfer of respondent from the Pensions
Page 59 of 5
Department to the Legal Department was not a
legitimate exercise of management prerogative on
the part of petitioner. Before the order to transfer
was made, discrimination, bad faith, and disdain
towards respondent were already displayed by
petitioner.
Petitioner has repeatedly asserted that the
performance of respondent did not meet the
expectation of the company and did not comply
with accepted standards for a pension profit center
manager, as she lacked the skill, as well as the
willingness, to perform her duties and responsibilities.
Allegedly, based on the evaluation of her
performance, respondent proved to be so inept in
the performance of her obligations, viz:
a. Failure to prepare and submit a budget plan;
b. Failure to prepare and submit a Pension
Production Report on time;
c. Strained relations with clients;
d. Failure to prepare an Operations Manual for the
Department;
e. Inability to develop and maintain a good
working relationship with her colleagues;
f. Inability to communicate her ideas; and
g. Others.[33]
It is rather peculiar that the alleged ineptness of
respondent did not prompt petitioner to issue any
Inter-office Memorandum reprimanding,
admonishing, or warning the former about her
performance. The solemnity of respondents alleged
non-performance was so immense, considering
that the Pensions Department is a profit center,
which was so imperative to the existence of
petitioner in terms of raising revenue. The officers of
petitioner should have been very much troubled
about this.
This now puts into question the alleged ineptness of
respondent as posited by petitioner. As aptly
declared by the Court of Appeals:
. . . We recall that what triggered petitioners transfer
was her alleged inefficiency and ineptness in her
work in the Pensions Department. Records,
however, reveal otherwise. Petitioner produced a
fund level of 1000% over the previous year (her
predecessors year of 1997 with a fund level of
about P2 Million generated for two years or an
average of P1 Million per year then) in the amount
of P19,248,320.31 as a result of a meager 3 months
marketing efforts, although private respondents
instructed her to stop marketing sometime in April
1998 for no apparent reason. All these were never
rebutted nor disproved by private respondents.
They merely alleged her inefficiency without
concrete and sufficient proof. But allegation is
different from proof. Hence, we cannot
countenance their allegations.[34] (emphasis ours)
Petitioner maintains that it was respondent who
severed her working relationship with it.[35] Per letter,
dated 11 January 1999, issued by petitioners Legal
Department, respondent was asked to report
immediately to her new assignment and submit to a
medical examination, and that the latter took no
heed of this.[36] It seems that the point impliedly
being raised by petitioner is that respondent
disengaged her employment relationship with
petitioner by abandoning her work and failing to
report accordingly. This argument is apocryphal.
Respondent, on 23 December 1998, already filed a
case for illegal dismissal against petitioner.[37] For
petitioner to anticipate respondent to report for
work after the latter already filed a case for illegal
dismissal before the NLRC, would be absurd. We
have already laid down the rule that for
abandonment to exist, it is essential (1) that the
employee must have failed to report for work or
must have been absent without valid or justifiable
reason; and (2) that there must have been a clear
intention to sever the employer-employee
relationship manifested by some overt acts.[38]Both
these requisites are not present here. There was no
abandonment as the latter is not compatible with
constructive dismissal.[
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and
PEDRO A. TECSON, petitioners,
vs. GLAXO WELLCOME PHILIPPINES,
INC., Respondent.
FACTS: Petitioner Pedro A. Tecson (Tecson) was
hired by respondent Glaxo Wellcome Philippines,
Inc. (Glaxo) as medical representative on October
24, 1995, after Tecson had undergone training and
orientation.
Thereafter, Tecson signed a contract of
employment which stipulates, among others, that
he agrees to study and abide by existing company
rules; to disclose to management any existing or
future relationship by consanguinity or affinity with
co-employees or employees of competing drug
companies and should management find that such
relationship poses a possible conflict of interest, to
resign from the company. Code of Conduct of
Glaxo similarly provides these conditions; that
otherwise, the management and the employee will
explore the possibility of a transfer to another
department in a non-counterchecking position or
preparation for employment outside the company
after six months.
Tecson was initially assigned to market Glaxos
products in the Camarines Sur-Camarines Norte
sales area. Subsequently, Tecson entered into a
romantic relationship with Bettsy, an employee of
Astra Pharmaceuticals3(Astra), a competitor of
Glaxo. Bettsy was Astras Branch Coordinator in
Albay. She supervised the district managers and
medical representatives of her company and
prepared marketing strategies for Astra in that area.
Even before they got married, Tecson received
several reminders from his District Manager
regarding the conflict of interest which his
relationship with Bettsy might engender. Still, love
prevailed, and Tecson married Bettsy in September
1998.
Tecsons superior reminded him that he and Bettsy
should decide which one of them would resign
from their jobs. Tecson requested for time to comply
with the company policy against entering into a
relationship with an employee of a competitor
company. He explained that Astra, Bettsys
employer, was planning to merge with Zeneca,
another drug company; and Bettsy was planning to
Page 60 of 5
avail of the redundancy package to be offered by
Astra.
Tecson again requested for more time resolve the
problem. Thereafter, Tecson applied for a transfer in
Glaxos milk division, thinking that since Astra did
not have a milk division, the potential conflict of
interest would be eliminated. His application was
denied in view of Glaxos least-movement-
possible policy.
Glaxo transferred Tecson to the Butuan City-Surigao
City-Agusan del Sur sales area. Tecson asked Glaxo
to reconsider its decision, but his request was
denied. Tecson defied the transfer order and
continued acting as medical representative in the
Camarines Sur-Camarines Norte sales area.
DEVELOPMENT OF THE CASE: Because the parties
failed to resolve the issue at the grievance
machinery level, they submitted the matter for
voluntary arbitration, but Tecson declined the offer.
On November 15, 2000, the National Conciliation
and Mediation Board (NCMB) rendered
its Decision declaring as valid Glaxos policy on
relationships between its employees and persons
employed with competitor companies, and
affirming Glaxos right to transfer Tecson to another
sales territory.
CA sustained; MR denied.
Petitioners Contention: that Glaxos policy against
employees marrying employees of competitor
companies violates the equal protection clause of
the Constitution because it creates invalid
distinctions among employees on account only of
marriage. They claim that the policy restricts the
employees right to marry; that Tecson was
constructively dismissed
GLAXO argues: that the company policy prohibiting
its employees from having a relationship with
and/or marrying an employee of a competitor
company is a valid exercise of its management
prerogatives and does not violate the equal
protection clause;
The policy is also aimed at preventing a competitor
company from gaining access to its secrets,
procedures and policies; that Tecson can no longer
question the assailed company policy because
when he signed his contract of employment, he
was aware that such policy was stipulated therein.
ISSUE: WON Glaxos policy against its employees
marrying employees from competitor companies is
valid
HELD: The Court finds no merit in the petition.
Glaxo has a right to guard its trade secrets,
manufacturing formulas, marketing strategies and
other confidential programs and information from
competitors, especially so that it and Astra are rival
companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital
relationships with employees of competitor
companies upon Glaxos employees is reasonable
under the circumstances because relationships of
that nature might compromise the interests of the
company. In laying down the assailed company
policy, Glaxo only aims to protect its interests
against the possibility that a competitor company
will gain access to its secrets and procedures.
That Glaxo possesses the right to protect its
economic interests cannot be denied. No less than
the Constitution recognizes the right of enterprises
to adopt and enforce such a policy to protect its
right to reasonable returns on investments and to
expansion and growth.
Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the
protection of labor, it does not mean that every
labor dispute will be decided in favor of the
workers. The law also recognizes that management
has rights which are also entitled to respect and
enforcement in the interest of fair play.21
EQUAL-PROTECTION: Glaxo does not impose an
absolute prohibition against relationships between
its employees and those of competitor companies.
Its employees are free to cultivate relationships with
and marry persons of their own choosing. What the
company merely seeks to avoid is a conflict of
interest between the employee and the company
that may arise out of such relationships.
Moreover, records show that Glaxo gave Tecson
several chances to eliminate the conflict of interest
brought about by his relationship with Bettsy.
PETITION DENIED.
d. Guidelines on Imposition of Penalty
Associated Labor Union v. NLRC, 302 SCRA
708 (1999)
FACTS:
This is a petition for certiorari to annul the
decision of the National Labor Relations
Commission in NLRC NCR 00-09-06075-93 on the
ground that it was rendered with grave abuse
of discretion.
Petitioner Renato Felizardo was employed
at respondent Republic Flour Mills-Selecta Ice
Cream Corporation as jet printer operator on
November 16, 1991. He was dismissed from
employment on September 13, 1993 for
dishonesty and theft of company property. He
and petitioner Associated Labor Union-TUCP, of
which he is the secretary, filed a complaint for
illegal dismissal, unfair labor practice, and non-
payment of 13th month pay against respondent
company. He was ordered reinstated without
backwages by the Labor Arbiter, but the NLRC
reversed the said decision and dismissed his
complaint. Hence, this petition.
The Labor Arbiter found that with the
exception of the pair of boots, the articles
which petitioner took from the company were
mere scraps which were of no value to
Page 61 of 5
 respondent company. He ruled that dismissal
was too harsh a penalty to be imposed on a
first-time offender and that his unemployment
for about eleven (11) months was sufficient
penalty for what he had done. Accordingly, the
Labor Arbiter ordered petitioners reinstatement
without backwages.
On appeal, the NLRC reversed the LAs
decision.
ISSUE: Whether or not Renato Felizardo was
illegally dismissed.
RULING: YES. There is no question that the
employer has the inherent right to discipline,
including that of dismissing its employees for just
causes. This right is, however, subject to
reasonable regulation by the State in the
exercise of its police power.[5] The finding of the
NLRC that an employee violated the company
rules and regulations is subject to scrutiny by the
Court to determine if the dismissal is justified
and, if so, whether the penalty imposed is
commensurate to the gravity of his offense.
In this case, the Court agree with the Labor Arbiter
that dismissal would not be proportionate to the
gravity of the offense committed by petitioner
considering the value of the articles he pilfered and
the fact that he had no previous derogatory record
during his two (2) years of employment in the
company. The Labor Arbiter is certainly mistaken in
regarding the articles taken to be mere scraps and
hence without value to the company. They were of
some value but not enough to warrant dismissal.
Moreover, it should also be taken into account that
petitioner is not a managerial or confidential
employee in whom greater trust is placed by
management and from whom greater fidelity to
duty is correspondingly expected. It is easy to see
why an unfaithful employee who is holding a
position of trust and confidence in a company
poses a greater danger to its security than a mere
clerk or machine operator like petitioner.
There is another reason why violations by non-
confidential employees of company rules and
regulations such as that involved in this case are
considered minor. Such employees are generally
mere wage earners whose dismissal from
employment can have severe financial
consequences on their families especially at a time
like the present when unemployment is quite
high. Consequently, whatever missteps may have
been committed by them ought not to be visited
with a consequence so severe as dismissal.
Dismissal as a measure to protect the interests of
respondent company is unwarranted under the
facts of this case. Suspension would have
sufficed. Without deciding for how long the
suspension should be in cases such as this,
considering that petitioner has been prevented
from working in respondent company since
September 13, 1993, we hold that, for all purposes,
he has served a reasonable period of suspension
commensurate to the gravity of his
offense. Consequently, the Labor Arbiters order of
reinstatement of petitioner without backwages may
be considered appropriate.
The instant petition is GRANTED. The decision of the
National Labor Relations Commission is hereby SET
ASIDE and that of the Labor Arbiter is REINSTATED.
Philippine Long Distance Telephone Company v.
NLRC, 303 SCRA 9 (1999)
FACTS:
This petition for certiorari under Rule 65 of
the Rules of Court assails the Resolution
dated June 29, 1992 of the National Labor
Relations Commission ordering petitioner to
reinstate private respondent, Enrique
Gabriel, with full backwages, benefits, and
proportionate privileges; as well as the
Order dated August 19, 1992, denying the
motion for reconsideration. The challenged
ruling reversed the decision of the Labor
Arbiter dated May 3, 1991, which dismissed
the complaint for lack of merit.
Private respondent, Enrique Gabriel, was
employed by petitioner Philippine Long
Distance Telephone Company (PLDT), as a
foreman in Dansalan Area 2, M-3. As a
supervisor, his territorial responsibility
covered Camp Crames First to 20th
Avenues and portions of Project 4, all in
Quezon City.
On September 5, 1989, Enrique Gabriel
ordered Medel Mercado, an installer, to set-
up two telephone units at Unit R, Facilities
Center Building, located at Shaw Boulevard,
Mandaluyong, Metro Manila. The telephone
numbers of the units were 78-88-41 and 79-
98-46, in favor of a certain Mr. Marlon
Aquino.
On October 16, 1989, private respondent,
again ordered Juancho Jocson, another
installer, to set-up additional units with
telephone numbers 78-40-70 and 79-40-98
for the same subscriber.
Later, both installation activities were
investigated because (a) the Facilities
Center Building had no entrance cable
facilities or conduit wires for telephone
connection, (b) Mandaluyong was not
within respondents area of jurisdiction, and
(c) installers Mercado and Jocson were not
under his direct supervision.
In the administrative investigation
conducted by PLDT, where a confrontation
between private respondent and installers
Mercado and Jocson took place, private
respondent tried to explain his side to clear
certain issues taken against him, adding
that his intention in ordering the installation
of the telephone units was to provide
customer satisfaction. However, on February
1, 1990, the petitioner still required the
private respondent to submit a written
report of the incident. He submitted his
explanation and, although admitting the
responsibility of his actions, reiterated his
Page 62 of 5
 rationalization that his sole intention was to
serve the customer, thereby earning
goodwill for the company.
On September 3, 1990, private respondent
was dismissed from employment on the
ground that he committed grave
misconduct, breach of trust, and violations
of company rules and regulations when he
ordered the unwarranted installation
activities.
On September 6, 1990, private respondent,
as complainant below filed an illegal
dismissal case against herein petitioner,
PLDT.
ISSUES: 1. Whether or not Gabriel is guilty of serious
misconduct and/or breach of trust anent the
irregular installation of the afore-numbered
telephones.
2. Whether or not NLRC abused its discretion
amounting to lack or excess of jurisdiction in
reversing the decision of the Labor Arbiter,
and ordering the reinstatement of private
respondent with full back wages and other
benefits.
RULING: 1. NO. At the outset, it must be recalled
that the basic requisite for dismissal on the ground
of loss of confidence is that the employee
concerned must be one holding a position of trust
and confidence. However, loss of confidence must
not be indiscriminately used as a shield by the
employer against a claim that the dismissal of an
employee was arbitrary.
Likewise, it must be noted that willful defiance of
company rules must be characterized by perverse
attitude that would be considered as inimical to the
interest of his employer. Even when an employee is
found to have transgressed the employers rules, in
the actual imposition of penalties upon the erring
employee, due consideration must still be given to
his length of service and the number of violations
committed during his employ.
Dismissal is the ultimate penalty that can be meted
to an employee. Where a penalty less punitive
would suffice, whatever missteps may have been
committed by the worker ought not to be visited
with a consequence so severe such as dismissal
from employment. For, the Constitution guarantees
the right of workers to security of tenure. The misery
and pain attendant to the loss of jobs then could
be avoided if there be acceptance of the view
that under certain circumstances of the case the
workers should not be deprived of their means of
livelihood.
In the present case, there is no dispute that the
private respondent ordered the installation of the
telephone units in favor of Marlon Aquino, a
telephone subscriber. As found by the Labor Arbiter,
private respondents orders were irregular. The
orders of telephone connection were pursued even
if there were no entrance cable facilities for
telephone connection. Moreover, Mandaluyong
was not within the area of private respondents
jurisdiction. The installers, Mercado and Jocson,
were not under his direct supervision. Yet based on
his instruction, he secured OK numbers for the
telephones and performed call back at the panel
box while misrepresenting himself to the dispatch
clerk as the subscriber.
Despite these circumstances, the NLRC reversed
the Labor Arbiters order of dismissal imposed
against private respondent Enrique
Gabriel. According to the NLRC, it found no written
rule of PLDT which provides that such unwarranted
installation of telephone lines is subject to the
penalty of dismissal. Nor was there any proof that
the private respondent profited from the said
setting up of telephone lines. Neither was there a
showing that PLDT suffered losses from the
telephone service in favor of Mr. Marlon
Aquino. Finally, as claimed by the private
respondent in his memorandum, which was not
rebutted on this point by the petitioner, the subject
telephones were installed only after the documents
of approval were issued by PLDT. Given these
circumstances, a substantial doubt as to the validity
of the termination appears, and the employees
claim of illegal dismissal accordingly gains
credence because such doubt must be resolved in
his favor.
2. NO. Assailed NLRC Resolution is AFFIRMED
with MODIFICATION. Petitioner is directed to
reinstate the private respondent to his position held
at the time of the complained dismissal. Petitioner is
likewise ordered to pay private respondent his full
backwages including thirteenth month pay due
him based on his last salary, computed from the
date of promulgation of the NLRC Resolution on
June 29, 1992, until his actual reinstatement.The
other awards of unspecified benefits and
proportionate privileges in the said Resolution are
set aside for lack of merit.
The Court have to concede that in ordering the
reinstatement of private respondent, Gabriel, the
public respondent, NLRC, is not entirely without
good and justifiable reason. Thus it could not be
said that this portion of the assailed Resolution of
the NLRC is tainted with grave abuse of discretion.
Now, since Gabriels dismissal has been found to be
of doubtful justification in law and policy, the award
by the NLRC of full backwages in his favor could not
be said as erroneous. It has to be sustained, but
only from the date of the NLRCs promulgation of its
Resolution on June 29, 1992.
Backwages including thirteenth month pay are a
form of relief that restores the income that was lost
by reason of unlawful dismissal. Note that in contrast
to the MERALCO case, infra, where the award of
backwages was not granted because the
employer was in good faith when it dismissed the
employee who received P7,000.00 purportedly in
consideration of his facilitation of the electrical
connection in favor of an applicant, in the case at
bar the installation of four telephone units was
not per se illegal because of the previous approval
by the PLDT of these units for installation. The
connections were only irregular because they
violated certain standard operating procedures of
PLDT. Private respondent in this case had facilitated
Page 63 of 5
the service connections of the telephone units
irregularly but he was apparently of the wrong
impression that he was cultivating a customers
goodwill. He did not receive any monetary or other
material benefit at all for the facilitation. Thus, on
one hand, the cited irregularity here could not
justify the ultimate penalty of dismissal from
employment. And, in our view, reinstatement (with
full backwages and thirteenth month pay
computed beginning June 29, 1992 until actual
reinstatement) would provide sufficient relief for the
loss suffered by him.
On the other hand, the award of unspecified other
benefits and proportionate privileges to the private
respondent by the NLRC appears to us already
unwarranted. Private respondent is not entirely
faultless. As a supervisor, he is required to act
judiciously and to exercise his authority in harmony
with company policies. When he jeopardized the
status of the rank-and-file employees whom he
ordered to by-pass the standard operating
procedures of the company, to the detriment of his
employer, he was not entirely blameless. The
irregularity attributable to him could not be entirely
disregarded. He must not be further rewarded, in
fairness to the employers own legitimate concerns
such as company morale and discipline.
Farrol v. Court of Appeals, 435 SCRA 543 (2000)
FACTS: Petitioner Wenifredo Farrol was
employed as station cashier at respondent
RCPIs Cotabato City station. On June 18, 1993,
respondent RCPIs district manager in Cotabato
City informed their main office that "Peragram
funds" from said branch were used for the
payment of retirement benefits of five
employees. On October 1, 1993, petitioner
verified as correct RCPIs Field Auditors report
that there was a shortage of P50,985.37 in their
branchs Peragram, Petty and General Cash
Funds. Consequently, petitioner was required by
the Field Auditor to explain the cash shortage
within 24 hours from notice. The next day,
petitioner paid to RCPI P25,000.00 of the cash
shortage.
On October 16, 1993, RCPI required petitioner to
explain why he should not be dismissed from
employment. Two days thereafter, petitioner
wrote a letter to the Field Auditor stating that
the missing funds were used for the payment of
the retirement benefits earlier referred to by the
branch manager and that he had already paid
P25,000.00 to RCPI. After making two more
payments of the cash shortage to RCPI,
petitioner was informed by the district manager
that he is being placed under preventive
suspension. Thereafter, he again paid two more
sums on different dates to RCPI leaving a
balance of P6,995.37 of the shortage.
Respondent RCPI claims that it sent a letter to
petitioner on November 22, 1993 informing him
of the termination of his services as of
November 20, 1993. Unaware of the termination
letter, petitioner requested that he be
reinstated considering that the period of his
preventive suspension had expired.
Sometime in September 1995, petitioner
manifested to RCPI his willingness to settle his
case provided he is given his retirement
benefits. However, RCPI informed petitioner that
his employment had already been terminated
earlier as contained in the letter dated
November 22, 1993. The conflict was submitted
to the grievance committee. Despite the lapse
of more than two years, the case remained
unresolved before the grievance committee,
hence, it was submitted for voluntary arbitration.
ISSUE: Whether or not Farrol was illegally dismissed.
RULING: YES. The assailed decision of the Court of
Appeals is REVERSED and SET ASIDE and new one
entered REINSTATING the decision of the Voluntary
Arbitrator subject to the MODIFICATION that
petitioners separation pay be recomputed to
include the period within which backwages are
due. For this purpose, this case is REMANDED to the
Voluntary Arbitrator for proper computation of
backwages, separation pay, 13th month pay, sick
leave conversion and vacation leave conversion.
Anent the procedural requirement, Book V,
Rule XIV, of the Omnibus Rules Implementing the
Labor Codeexisting at the time petitioner was
discharged from work, outlines the procedure
for termination of employment, to wit:
"Sec. 1. Security of tenure and due process. -
No worker shall be dismissed except for a just or
authorized cause provided by law and after due
process.
"Sec. 2. Notice of Dismissal. - Any employer
who seeks to dismiss a worker shall furnish him
a written notice stating the particular acts or
omissions constituting the grounds for his dismissal. In
cases of abandonment of work, the notice shall be
served at the workers last known address.
xxxxxxxxx
"Sec. 5. Answer and hearing. - The worker
may answer the allegations stated against him in
the notice of dismissal within a reasonable period
from receipt of such notice. The employer shall
afford the worker ample opportunity to be heard
and to defend himself with the assistance of his
representatives, if he so desires.
"Sec. 6. Decision to dismiss. - The employer
shall immediately notify a worker in writing of a
decision to dismiss him stating clearly the
reasons therefor.
"Sec. 7. Right to contest dismissal. - Any
decision taken by the employer shall be without
prejudice to the right of the worker to contest the
validity or legality of his dismissal by filing a
complaint with the Regional Branch of the
Commission.
xxxxxxxxx
"Sec. 11. Report on dismissal. - The employer
shall submit a monthly report to the Regional Office
having jurisdiction over the place of work all
dismissals effected by him during the month,
specifying therein the names of the dismissed
workers, the reasons for their dismissal, the dates of
commencement and termination of employment,
the positions last held by them and such other
Page 64 of 5
information as may be required by the Ministry
(Department) for policy guidance and statistical
purposes." (Underscoring supplied).
As set forth in the foregoing procedures, the
employer must comply with the twin requirements
of two notices and hearing. The first notice is that
which apprises the employee of the particular acts
or omissions for which his dismissal is sought, and
after affording the employee an opportunity to be
heard, a subsequent notice informing the latter of
the employers decision to dismiss him from work.
As regards the first notice, RCPI simply
required petitioner to "explain in writing why he
failed to account" for the shortage and demanded
that he restitute the same. On the assumption that
the foregoing statement satisfies the first notice, the
second notice sent by RCPI to petitioner does not
"clearly" cite the reasons for the dismissal, contrary
to the requirements set by the above-quoted
Section 6 of Book V, Rule XIV of the Omnibus Rules.
A perusal of RCPIs dismissal notice reveals
that it merely stated a conclusion to the effect that
the withholding was deliberately done to hide
alleged malversation or misappropriation without,
however, stating the facts and circumstances in
support thereof. It further mentioned that the
position of cashier requires utmost trust and
confidence but failed to allege the breach of trust
on the part of petitioner and how the alleged
breach was committed. On the assumption that
there was indeed a breach, there is no evidence
that petitioner was a managerial employee of
respondent RCPI. It should be noted that the term
"trust and confidence" is restricted to managerial
employees. It may not even be presumed that
when there is a shortage, there is also a
corresponding breach of trust. Cash shortages in a
cashiers work may happen, and when there is no
proof that the same was deliberately done for a
fraudulent or wrongful purpose, it cannot constitute
breach of trust so as to render the dismissal from
work invalid.
Assuming further that there was breach of
trust and confidence, it appears that this is the first
infraction committed by petitioner. Although the
employer has the prerogative to discipline or dismiss
its employee, such prerogative cannot be
exercised wantonly, but must be controlled by
substantive due process and tempered by the
fundamental policy of protection to labor enshrined
in the Constitution. Infractions committed by an
employee should merit only the corresponding
sanction demanded by the circumstances. The
penalty must be commensurate with the act,
conduct or omission imputed to the
employee[17] and imposed in connection with the
employers disciplinary authority.
The Court thus holds that the dismissal
imposed on petitioner is unduly harsh and grossly
disproportionate to the infraction which led to the
termination of his services. A lighter penalty would
have been more just, if not humane. In any case,
petitioner paid back the cash shortage in his
accounts. Considering, however, that the latter is
about to retire or may have retired from work, it
would no longer be practical to order his
reinstatement.
Valiao v. Court of Appeals, 435 SCRA 543 (2004)
FACTS: For review on certiorari is the Decision
dated August 22, 2000 of the Court of Appeals
in CA-G.R. SP No. 55133, and its Resolution
dated November 22, 2000 denying the motion
for reconsideration. The Court of Appeals
dismissed the petition for certiorari filed by
petitioner and affirmed the Resolution dated
July 7, 1999 of the National Labor Relations
Commission (NLRC)-Fourth Division in NLRC Case
No. V-000134-98 (RAB Case No. 06-01-10026-95),
which sustained the Decision of Labor Arbiter
Benjamin E. Pelaez, directing private
respondent West Negros College (WNC) to pay
petitioner Rene P. Valiaos salary during the
period of his preventive suspension and
attorneys fees, while dismissing all other claims.
Rene P. Valiao was appointed by private
respondent West Negros College (WNC) as
Student Affairs Office (SAO) Director, with a
starting salary of P2,800 per month. On May 14,
1990, he was assigned as Acting Director,
Alumni Affairs Office. He was transferred to a
staff position and designated as Records Chief
at the Registrars Office but was again re-
assigned as a typist. The latest re-assignment
was due to his tardiness and absences, as
reflected in the summary of tardiness and
absences report, which showed him to have
been absent or late for work from a minimum of
seven (7) to a maximum of seventy-five (75)
minutes for the period March to October 31,
1991, and to have reported late almost every
day for the period November to December
1991.
Copies of his tardiness/absences reports
were furnished petitioner, along with
memoranda requiring him to explain but his
explanations were either unacceptable or
unsatisfactory. Subsequent reports also showed
that he did not change his habits resulting in
tardiness and absences. He was even caught
one time manipulating the bundy clock, thus
necessitating another memorandum to him
asking him to explain his dishonest actuations in
accomplishing the daily attendance logbook
and in using the bundy clock.
On January 18, 1993, petitioner was again
absent from work without permission or notice
to his immediate superior. It turned out that he
went to Bacolod City and on January 28, 1993,
the petitioner was one of those arrested during
a raid in the house of one Toto Ruiz, a
suspected drug pusher and was brought to the
Bacolod Police Station along with four (4) other
suspects. Upon further search and investigation
by the Narcotics Control Division, the petitioner
was found possessing two (2) suspected
marijuana roaches (butts) which were placed
inside his left shoe. The event was widely
publicized, focusing on petitioners position as an
Economics teacher of WNC, and considering
further that one of his fellow suspects was a
member of the Philippine Army, who was
caught with an unlicensed firearm, a tooter and
Page 65 of 5
 other shabu paraphernalia. The petitioner and
other suspects were then charged with violation
of the Dangerous Drugs Act of 1972 (Republic
Act No. 6425, as amended).
WNC alleged that petitioner was dismissed
on charges of serious misconduct, and gross
and willful neglect of duty. WNC said his
dismissal was effected after due notice and
prior hearing. It claimed also that since
petitioner was terminated for a valid cause after
a due hearing, the latters claim for moral and
exemplary damages, and attorneys fees had
no basis in fact and in law.
ISSUE: Whether or not Valiao was illegally dismissed.
RULING: NO. The Labor Arbiter found no justifiable
reason to place the petitioner under preventive
suspension as there was no serious or imminent
threat to the life or property of his employer or co-
workers.
However, the Labor Arbiter found the dismissal of
the petitioner from WNC to be valid due to
absenteeism and tardiness and after he was
accorded the procedural due process aspect of
the law as reflected in the records showing that the
petitioner was formally investigated and given the
opportunity to refute the alleged findings by the
management of WNC. The Labor Arbiter held that
frequent absenteeism and tardiness of the
petitioner constituted not only willful disobedience
but also gross and habitual neglect of duties, which
are valid grounds for termination of
employment. He stressed that the petitioners
frequent absences without proper leave of
absence was not only unfair to WNC and the
petitioners co-employees but also set an
undesirable example to the employees under his
supervision, considering that the petitioner was not
a mere rank-and-file employee but one who owed
more than the usual fealty to the organization.
On appeal to the NLRC, the latter affirmed the
decision of the Labor Arbiter.
The Court of Appeals held that the petitioner was
validly dismissed for serious misconduct and gross
habitual neglect of duties, which was aggravated
by his arrest for violation of Rep. Act No. 6425, as
amended [the January 28, 1993 incident] and that
he was afforded the twin requirements of notice
and hearing and the opportunity to defend himself
by the investigating committee. The appellate
court noted that WNC had presented sufficient
evidence to support petitioners termination from
employment after taking into consideration the
totality of the infractions or the number of violations
committed by petitioner during the period of
employment and stressed that it properly exercised
its management prerogative by observing due
process. Finally, the Court of Appeals ruled that the
NLRC correctly denied the claim for damages and
attorneys fees for lack of evidentiary support.
Etcuban v. Sulpicio Lines, Inc. 448 SCRA 516
(2005)
FACTS: Vicente C. Ectuban, Jr. was employed by
the respondent on January 30, 1978 until his
dismissal on June 10, 1994 for loss of trust and
confidence. At the time of his dismissal, the
petitioner was the Chief Purser of the M/V Surigao
Princess receiving a monthly salary of P5,000.00. As
the Chief Purser, the petitioner handled the funds of
the vessel and was the custodian of all the passage
tickets and bills of lading. It was his responsibility,
among other things, to issue passage tickets and to
receive payments from the customers of the
respondent, as well as to issue the corresponding
official receipts therefor. He was also tasked to
disburse the salaries of the crewmen of the vessel.
Sometime in the last week of May 1994, the newly
designated jefe de viaje of the M/V Surigao
Princess, in a surprise examination, discovered that
several yellow passengers duplicate original of yet
to be sold or unissued passage tickets already
contained the amount of P88.00 the fare for adult
passengers for the Cagayan de Oro to Jagna,
Bohol route. He noticed that three other original
copies which made up the full set did not bear the
same impression, although they were supposed to
have been prepared at the same time. Acting on
what appeared to be a strong evidence of short-
changing the company, the jefe de viaje dug
deeper on what he uncovered. As expected, he
found inordinate amount of ticket issuances for
children at half the fare of P44.00 in Voyage 434 of
the vessel. When word of the anomaly reached the
respondent, it waited for the petitioner to return to
Cebu City in the hope of shedding more light on
the matter.
On May 30, 1994, shortly after disembarking
from the M/V Surigao Princess at the port of Cebu,
the petitioner received a memorandum of even
date from Personnel Officer Artemio F. Aiga relative
to the irregularity in the alleged involvement in
anomaly of ticket issuance, instructing him to
forthwith report to the main office and to explain in
writing why no disciplinary action should be meted
on him or to submit himself to an investigation. The
memorandum warned the petitioner that his failure
to comply with the aforementioned instructions
would be construed as a waiver of his right to be
heard. It also informed the petitioner of his
immediate preventive suspension until further
notice. The petitioner, however, refused to
acknowledge receipt of the memorandum which
was personally served on him, prompting the
respondent to mail the same, and which the
petitioner received days later.
Meanwhile, upon his arrival at the office, the
petitioner was questioned by Mr. Carlo S. Go, Senior
Executive Vice-President and General Manager of
respondent. Thereafter, petitioner was preliminarily
investigated by Mr. Aiga wherein his statements
were taken down. After the initial investigation, the
petitioner was told to sign its minutes but he
adamantly refused, claiming the same to be self-
incriminatory. The next day, the petitioner was
replaced by Mr. Felix Almonicar as the Chief Purser
of the M/V Surigao Princess. As a result of his
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replacement, the petitioner thought he was fired
from his job.
Labor Arbiter Ernesto F. Carreon rendered his
Decision dated March 13, 1995, finding the
petitioners dismissal illegal.
NLRC affirmed the challenged decision with the
modification that the backwages to be paid to
the petitioner shall be reckoned from the time
of his actual dismissal on June 10, 1994, up to
the issuance of the writ of execution on the
finality of the decision, but not to exceed five
(5) years.
The Court of Appeals reversed and set aside the
NLRC decision. It ruled that there was valid and
just cause for the petitioners dismissal, as there
was sufficient basis for loss of trust and
confidence on him. The appellate court
amplified that in cases of dismissal for loss of
trust and confidence, it is not required that
there is proof beyond reasonable doubt.
ISSUE: Whether or not Vicente C. Ectuban, Jr. was
illegally dismissed.
RULING: NO. The petition is DENIED and the assailed
Decision and Resolution of the Court of Appeals are
hereby AFFIRMED in toto.
The requirement that there be some basis or
reasonable ground to believe that the employee is
responsible for the misconduct was sufficiently met
in the case at bar. As Chief Purser, the petitioner
cannot feign ignorance on the irregularity as he
had custody of the tickets when the anomaly was
discovered. It would not be amiss to suppose that
the petitioner, who would benefit directly or
indirectly from the fruits of such fraudulent scheme,
was a party to such irregularity. That there were
other pursers who could have done the irregularity
is of no moment. It bears stressing that the petitioner
was the Chief Purser who was tasked to directly
supervise each and every purser under him. While,
indeed, it was not proved that he was the one who
made the irregular entries on the tickets, the fact
that he did not lift a finger at all to determine who it
was is a sad reflection of his job. In fact, even if the
petitioner had no actual and direct participation in
the alleged anomalies, his failure to detect any
anomaly in the passage tickets amounts to gross
negligence and incompetence, which are, likewise,
justifiable grounds for his dismissal. Be that as it may,
to our mind, it is no longer necessary to prove the
petitioners direct participation in the irregularity, for
what is material is that his actuations were more
than sufficient to sow in his employer the seed of
mistrust and loss of confidence.
The Court was not unmindful of the foregoing
doctrine, but after a careful scrutiny of the cited
cases, the Court is convinced that the petitioners
reliance thereon is misplaced. It must be stressed
that in all of the cases cited, the employees
involved were all rank-and-file or ordinary workers.
As pointed out earlier, the rules on termination of
employment, penalties for infractions, insofar as
fiduciary employees are concerned, are not
necessarily the same as those applicable to the
termination of employment of ordinary employees.
Employers, generally, are allowed a wider latitude
of discretion in terminating the employment of
managerial personnel or those of similar rank
performing functions which by their nature require
the employers trust and confidence, than in the
case of ordinary rank-and-file employees.
The fact that the petitioner has worked with the
respondent for more than 16 years, if it is to be
considered at all, should be taken against him. The
infraction that he committed, vis-a-vis his long years
of service with the company, reflects a regrettable
lack of loyalty. Loyalty that he should have
strengthened instead of betrayed. If an employees
length of service is to be regarded as a justification
for moderating the penalty of dismissal, it will
actually become a prize for disloyalty, perverting
the meaning of social justice and undermining the
efforts of labor to cleanse its ranks of all
undesirables.
The argument that the petitioner was not guilty of
anything because the tickets were never issued or
that he had received nothing from the passengers
that he could short-change the company would
not mitigate his liability, nor efface the respondents
loss of trust and confidence in him. Whether or not
the respondent was financially prejudiced is
immaterial. Also, what matters is not the amount
involved, be it paltry or gargantuan; rather the
fraudulent scheme in which the petitioner was
involved, which constitutes a clear betrayal of trust
and confidence. In fact, there are indications that
this fraudulent act had been done before, and
probably would have continued had it not been
discovered.
Moreover, the records show that the petitioner is
not as blameless as he claimed to be. In 1979 and
1980, he was suspended by the respondent for
several company infractions, which the petitioner
did not deny. It must also be stressed that when an
employee accepts a promotion to a managerial
position or to an office requiring full trust and
confidence, he gives up some of the rigid
guaranties available to an ordinary worker.
Infractions which, if committed by others, would be
overlooked or condoned or penalties mitigated
may be visited with more serious disciplinary action.
It cannot be over emphasized that there is no
substitute for honesty for sensitive positions which
call for utmost trust. Fairness dictates that the
respondent should not be allowed to continue with
the employment of the petitioner who has
breached the confidence reposed on him. Unlike
other just causes for dismissal, trust in an employee,
once lost, is difficult, if not impossible, to regain.
There can be no doubt that the petitioners
continuance in the extremely sensitive fiduciary
position of Chief Purser would be patently inimical
to the respondents interests. It would be oppressive
and unjust to order the respondent to take him
back, for the law, in protecting the rights of the
employee, authorizes neither oppression nor self-
destruction of the employer.
Page 67 of 5
Anent the petitioners request for separation pay,
the Court is constrained to deny the same. Well-
settled is the rule that separation pay shall be
allowed only in those instances where the
employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral
character. Inasmuch as reason for which the
petitioner was validly separated involves his
integrity, which is especially required for the position
of purser, he is not worthy of compassion as to
deserve at least separation pay for his length of
service.

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