LABOR RELATIONS

(September 18, 2018)

4. Article 295 (280) Regular and Casual Employment

a) Gadia vs. Sykes Asia, Inc., 748 SCRA 633, G.R. No. 209499 January 28, 2015

Facts:

In this case, Alltel Communications (Alltel), a United States-based telecommunications firm,

contracted Sykes Asia to accommodate the needs and demands of Alltel clients for its postpaid and
prepaid services (Alltel Project). Services for the said project went on smoothly until Alltel sent two
(2) letters to Sykes Asia dated August 7, 2009 and September 9, 2009 informing the latter that it
was terminating all support services provided by Sykes Asia related to the Alltel Project. In view of
this development, Sykes Asia sent each of the petitioners end-of-life notices, informing them of their
dismissal from employment due to the termination of the Alltel Project.

Aggrieved, petitioners (there are 23 employees-petitioners) filed separate complaints for illegal
dismissal against respondents Sykes Asia, Chuck Sykes, the President and Chief Operating Officer of
Sykes Enterprise, Inc., and Mike Hinds and Michael Henderson, the President and Operations
Director, respectively, of Sykes Asia (respondents), praying for reinstatement, backwages, 13th
month pay, service incentive leave pay, night shift differential, moral and exemplary damages, and
attorney’s fees. In their complaints, petitioners alleged that their dismissal from service was unjust
as the same was effected without substantive and procedural due process.

In their defense, respondents averred that petitioners were not regular employees but merely
project-based employees, and as such, the termination of the Alltel Project served as a valid ground
for their dismissal. In support of their position, respondents noted that it was expressly indicated in
petitioners’ respective employment contracts that their positions are “project-based” and thus, “co-
terminus to the project.” Respondents further maintained that they complied with the requirements
of procedural due process in dismissing petitioners by furnishing each of them their notices of
termination at least thirty (30) days prior to their respective dates of dismissal.

Labor arbiter decided in favor of Sykes, it stated that petitioners are project-based employees.

NLRC decided that they are regular employees but were validly terminated due to redundancy.

The CA reinstated the decision of the Labor Arbiter.

Issue: Whether or not petitioners were merely project-based employees.

Held:

Yes, petitioners were project-based employees. Article 294 of the Labor Code, as amended,
distinguishing project-based employee from a regular employee;

Art. 294. 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.
x x x x (Emphasis and underscoring supplied)

Verily, for an employee to be considered project-based, the employer must show compliance with
two (2) requisites, namely that: (a) the employee was assigned to carry out a specific project or
undertaking; and (b) the duration and scope of which were specified at the time they were engaged
for such project.

In the instant case, n this case, records reveal that Sykes Asia adequately informed petitioners of
their employment status at the time of their engagement, as evidenced by the latter’s employment
contracts which similarly provide that they were hired in connection with the Alltel Project, and that
their positions were “project-based and as such is co-terminus to the project.” In this light, the CA
correctly ruled that petitioners were indeed project-based employees, considering that: (a) they
were hired to carry out a specific undertaking, i.e., the Alltel Project; and (b) the duration and scope
of such project were made known to them at the time of their engagement, i.e., “co-terminus with
the project.”

The word “determinable time” concerning the duration of the undertaking simply means “capable of
being determined or fixed” The Court said that Sykes Asia substantially complied with this requisite
when it expressly indicated in petitioners’ contracts that their positions were “co-terminus with the
project”. This sufficiently apprised petitioners that their security of tenure with Sykes Asia would only
last as long as the Alltel project was subsisting.

The Supreme Court therefore decided in favor of Sykes Asia.

b) Valeroso vs. Skycable Corporation, 796 SCRA 594, G.R.No.202015 July 13, 2016

FACTS:
 Petitioners Valeroso and Legatona alleged that they started working on Nov 1, 1998 and July 13, 1999,
respectively, as account executives tasked to solicit cable subscriptions for Skycable Corporation.
 From the years 2001-2006, their payslips showed that they received commissions ranging from Php 15k
to Php 530k each upon reaching a specific quota every month with an allowance up to Php 7k.
 From being direct hires, they were transferred to Skill Plus Manpower Services without any agreement. In
2009, they were informed that their commissions would be reduced due to the introduction of prepaid
cards sold to cable subscribers resulting in lower monthly cable subscriptions.
 They filed a labor case with the NLRC after which they were dropped from the roster of account
executives which they alleged constituted unfair labor practice. They also claimed that they did not
receive 13th month pay and underpayment as well.
 Skycable: claimed that it did not terminate the services for there was never an E-E relationship to begin
with
 o It averred that it engaged petitioners as independent contractors under a Sales Agency
Agreement. In 2007, due to streamlining its operations, engaged the services of an independent
contractor (Armada Resources) under a Sales Agency Agreement.
o As a result, petitioners’ contracts were terminated but they were transferred as employees of
Armada. By entering into a Sales Agency Agreement and engaging the Armada as an
independent contractor, it engaged in legitimate contracting without any E-E relationship.
 Petitioners: they were employees of Armada – they were directly hired, paid, and dismissed by Skycable
o Officers of respondent supervise their area of work, monitor them daily, inform them of meetings
and penalize them for non-attendance, monitor their quota
o Their supervisors delegate to them the authority to investigate unlawful cable connections
o It gives trophies to award them for their outstanding performance
 LA: dismissed complaint – petitioners failed to establish that an E-E relationship existed
 NLRC: reversed LA
o Petitioners are regular employees; job as account executives for more than a year even if not
continuous and considering the importance of their tasks to the business
o Pay slips and certifications presented by petitioners constitute substantial evidence of an E-E
relationship
o Upon the termination of the Sales Agency Agreement with Armada in 2009, petitioners were
considered dismissed without just cause and due process
 CA: reversed NLRC – sustained LA’s finding that there was no evidence to substantiate the bare
allegation of E-E relationship hence this appeal

ISSUE/S:
 WoN petitioners were employees of respondent Skycable: NO
o To prove the claim of an E-E relationship the so-called “four-fold test” should be established: 1)
the selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; 4)
employer’s power to control the employee with respect to the means and methods of the work
o The evidence presented by the petitioners did not prove their claim – the certifications issued
merely certified that Skycable had engaged ther services of petitioners without specifying the
true nature of the engagement.
 These were only issued to accommodate their request for loan applications.
o As for the pay slips, none were presented from the years 2007-2009 which are material to the
case since they were transferred to Armada in 2007.
o While Skycable regularly monitors the result of their work, they in no way dictate upon them the
manner in which they should perform their duties.
o The Sales Agency Agreement, which served as the primary evidence of the nature of the parties'
relationship. In this duly executed and signed agreement, petitioners and respondent
unequivocally agreed that petitioners' services were to be engaged on an agency basis as sales
account executives and that no employer-employee relationship is created but an independent
contractorship. It is therefore clear that the intention at the time of the signing of the agreement
is not to be bound by an employer-employee relationship.
o Legatona, in a Release and Quitclaim he signed, acknowledged that he was performing sales
activities as sales agent/independent contractor and not an employee of respondent.

HELD: Petition DENIED. Appealed decision and resolution are AFFIRMED.

 c) Hacienda Fatima vs. National Federation of Sugarcane Workers-Food and General Trade,
396 SCRA 518, G.R. No. 149440 January 28, 2003

Facts:
When complainant union (respondents) was certified as the collective bargaining representative,
petitioners refused to sit down w/ the union for the purpose of entering into a CBA. The workers
including complainants were not given work for more than 1month. In protest, they staged a strike
w/c was however settled upon the signing of a MOA. Subsequently, alleging that complainants
failed to load some wagons, petitioners reneged on its commitment to bargain collectively &
employed all means including the use of private armed guards to prevent the organizers
from entering the premises. No work assignments were given to complainants w/c forced the
union to stage a strike. Dueto conciliation efforts by the DOLE, another MOA was signed by the
parties & they met in a conciliation meeting. When petitioners again reneged on its commitment,
complainants filed a complaint. Petitioner accused respondents of refusing to work & being choosy
in the kind of work they have to perform. The NLRC ruled that petitioners were guilty of ULP &
that the respondents were illegally dismissed. 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 & were therefore still employed by petitioners.

Issue:
Whether the CA erred in holding that 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:
No. 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 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. If the employee has been performing the job for at least a year, even if the performance
is not continuous & merely intermittent, the law deems the repeated & 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 w/respect to such activity & while
such activity exists. Seasonal workers who are called to work from time to time & are temporarily
laid off during off-season are not separated from service in said period, but merely considered on
leave until re-employed (De Leonv. NLRC)

5. Article 296 (281) Probationary Employment

6. Article 297 (282) Termination by Employer

a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work

i. BDO Unibank, INC. (formerly Equitable PCI Bank) vs. Nerbes, 831 SCRA 383,
GR NO 208735 July 19, 2017

FACTS:
Respondents Nerbes and Suravilla were employees of Equitable PCI Bank (now BDO Unibank, Inc.) and member
of Equitable PCI Bank Employees Union. It is a legitimate labor union and the sole and exclusing bargaining
representative of the rank and file employees of the bank.

On February 2, 2004, an election of officers of EPCIBEU was held under the supervision of the Labor Relations
Division of the National Capital Region Regional Office of the Deperatment of Labor and Employment (DOLE-
NCR).

Nerbes and Suravill won as President and Executive VP, respectively, and were proclaimed as winners. The
protest of the losing candidates was effectively dismissed.

After taking their oath, Nerbes and Suravilla notified the bank of their decision to exercise their pribelge under
the CBA which allows the President anf the Excecutive VP to be on full-time leave for the duration of their term of
office in order to devote their time in maintaining industrial peace.

Nerbes and Suravilla anchored their right to immediately assume their respective positions on rule XV, sec. 5 of
DO no. 09, series 1997, which says that “Upon resolution of the protest, the committee shall immediately
proclaim the winners and the latter may assume their positions immediately.” Thus, Nerbes and Suravilla took
their respective union leaves.

The losing candidates appealed to the Bureau of Labor Relations (BLR) the DOLE-NCR’s Resolution. Because of
the pendency of said appeal, the bank disapproved Nerbes and Suravilla’s union leaves and were directed to
refrain from being absent and to report back to work. Nerbes and Suravilla failed to comply.

Consequestly, the bank issued show cause Memoranda directing Nerbes and Suravilla to explain why no
disciplinary action should be imposed against them for violation of the bank’s Code of Conduct on attendance and
punctuality, and obedience and cooperation. It appears that Nerbes himself filed a complain for unfair labor
practice (ULP) against the bank.

Thus, Nerbes was additionaly asked to explain his alleged falsification of public document and perjury pertaining
to his submission of a position paper in the ULP case which was purportedly signed by his lawyer but who later
on denied having signed the same.

Administrative hearings were then conducted and the bank found Nerbes and Suravilla guilty of serious
misconduct and willful disobedience and imposed upon them the penalty of dismissal. Nerber and Suravilla then
filed before the LA a complaint for ULP, illegal dismissal and money claims.

Issue:

WON the intentional refusal of the complainants to report for work constitutes serious misconduct when the same
is not characterized by a wrongful and perverse attitude

SC RULING:

SC denied the petition.

Article 282, now Article 296 of LC, enumerated the just causes for the termination of the employment of an
employee. Under Article 282(a), serious misconduct or willful disobedience by the EE of the lawful orders of his
ER or representative in connection with his work is a just cause for dismissal.

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere
error in judgment.
To be a valid cause for dismissal, such misconduct must be a grave and aggravated character and not merely
trivial or unimportant. The misconduct must also be related to the performance of the EE duties showing him to
be unfit to continue working for the ER and the EE’s act or conduct was performed with wrongful intent.

On the other hand, valid dismissal on the ground of willful disobedience requires the concurrence of two
requisites:
1) The EE’s assailed conduct must have been willful or intentional, the willfulness being characterized by a
wrongful and perverse attitude
2) The order violated must have been reasonable, lawful, made known to the EE and must pertain to the
duties which he had been engaged to discharge.

The return to work order made by the bank is reasonable and lawful, and the act required for Nerbes and
Suravilla related to ther performance of their duties. The point of contention is whether their refusal to return to
work was willful or intentional and, if so, whether such willful or intentional conduct is attended by a wrongful
and perverse attitude.

In this case, Nerbes and Suravilla’s failure to report for work despite the disapproval of their application for leave
was clearly intentional. However, though their refusal to do so may have been intentional, such was not
characterized by a wrongful and perverse attitude or with deliberate disregard of their duties as such.

At the time Nerbes and Suravilla notified the bank of their intent to avail of their union leaves, they were already
proclaimed as winners and in fact took their respective oaths of office. Following the terms of the parties’ CBA,
which has the strength of law as between them, Nerbes and Suracilla, as dully-elected union officers, were
entitled to take their union leaves.

That Nerbes and Suravilla were indeed entitled to such privilege is tacitly recognized by the bank itself when it
continued to pay them their full salaries, despite not reporting for work.

Nerbes and Suravilla’s belief that they are entitled to immediately assumer their positions as union officers and
thereby entitled to union leaves is not completely bereft of basis. For one, they based the exercise of such
privilege on the existing CBA, the terms of which the bank has not demonstrated to be inapplicable. For another,
it was only upon being proclaimed as winners did they assume their respective positions which, under
Department Order No. 09, take place immediately.

The SC found that the penalty of dismissal in this case is harsh and severe. Not every case of insubordination or
willful disobedience by an employee reasonably deserves the penalty of dismissal because the penalty to be
imposed on an erring employee must be commensurate with the gravity of his or her offense.

ii. Cebu People's Multi-Purpose Cooperative vs. Carbonilla, Jr., 782 SCRA 418,
G.R. No. 212070 January 27, 2016

Facts:

Cebu People’s Multi-purpose Cooperative (CPMPC) hired Carbonilla, Jr. as a credit and collection manager and
was tasked with the handling of the credit and collection activities of the cooperative, which included
recommending loan approvals, formulating and implementing credit and collection policies, and conducting
trainings.

Sometime in 2007, CPMPC underwent a reorganization whereby Carbonilla, Jr. was also assigned to perform the
duties of Human Resources Departnment Manager (i.e. assisting in the personnel hiring, firing, and handling of
labor disoutes.)
In 2008, he was appointed as Legal officer and subsequently held the position of Legal and Collection manager.

Then, CPMPC, through its HRD Manager, sent various memoranda to Carbonilla, Jr. seeking explanation on the
various infractions he allegedly committed. He replied explaining his side. Unconvinced by Carbonilla Jr’s
explanations, CPMPC scheduled several clarificatory hearings, but the former failed to attend despite due notice.
Later, CPMPC conducted a formal investigation where it ultimately found Carbonilla, Jr. to have committed acts
prejudicial to CPMPC’s interests. As such, CPMPC, CEO Quevedo, sent Carbonilla, Jr. a Notice of Dismissal dated
August 5, 2008 informing the latter of his termination on the grounds of:
a) Loss of trust and confidence
b) Gross disrespect
c) Serious misconduct
d) Gross negligence
e) Commission of a crime of falsification/inducing Aguipo to violate the law or the Land
Transportation and Traffic Code
f) Committing acts highly prejudicial to the interest of the cooperative
He filed the case for illegal dismissal and money claims.

CPMPC maintained that the totality of Carbonilla Jr’s infractions was sufficient to warrant his dismissal and that it
had complied with the procedural due process in terminating him.

Issue/s:

1. WON the dismissal was valid

2. WON employee accountabilities can be validly offset against 13th month pay

Held:

The SC found merit in the petition.

For serious misconduct to be valid ground for dismissal, termination, the following requisites must concur:

a) The misconduct must be serious

b) It must relate to the performance of the EE’s duties showing that the EE has become unfit to continue
working for the ER
c) It must have been performed with wrongful intent

All of the foregoing requisites have been duly established in this case. Records reveal that Carbonilla Jr’s serious
misconduct consisted of him frequently exhibiting disrespectful and belligerent behavior, not only to his
colleagues, but also to his superiors. He even used his stature as a law graduate to insist that he is “above”
them, often using misguided legalese to weasel his way out of the charges against him, as well as to strong-arm
his colleagues and superiors into succumbing to his arrogance.

His dismissal was also justified on the ground of loss of trust and confidence. He occupied a position of trust and
confidence as he was employed as Credit and Collection manager and later on, as Legal and Collection manager.
His dismissal on this ground was justified by his acts of forwarding the mediation settlements for notarization to a
lawyer who was not the authorized legal retainer of CPMPC, the pulling out of important records and vital
documents from the office premises, which were either lots or returned already tampered and altered; and the
incurring of unliquidated case advances related to the notarial transactions of the mediation agreements. While
Carbonilla, Jr. posited that these actuations were resosrted with good intentios as he was only finding ways for
CPMPC to save up on legal fees, this defense can hardly hold, considering that all of these transactions were not
only higly irregular, but also done without the prior knowledge and consent of CPMPC’s management. Cast
against this light, Carbonilla Jr’s performance of the said acts therefore gives CPMPC more than enough reason to
lose trust and confidence in him.

The totality and gravity of Carbonilla Jr’s infraction throughout the course of his employment completely justified
CPMPC’s decision to finally terminate his employment.

Carbonilla Jr’s award of unpaid salaries and 13th month pay were validly offset by his accountabilities to CPMPC.

iii. Autobus Workers’ Union (AWU) vs. NLRC, 291 SCRA 219, G.R. No. 117453
June 26, 1998

iv. Felix vs. Enertech Systems Industries, Inc., 355 SCRA 680, G.R. No. 142007
March 28, 2001

Manuel C. Felix worked as a welder/fabricator in Enertech System Industries, Incorporated. He

and his three other co-employees were assigned to install a smokestack at the Big J Feedmills in Sta.
Monica, Bulacan. Their work was estimated to be completed within seven days, but it actually took them
about two weeks to finish. During the entire period, they accomplished their daily time records by
indicating they worked eight hours per day and on the basis of their wages were computed. On August
17, 1994, they receive notice from Enertech requiring them to explain that based on the report to their
office, they reported to work to Big J jobsite at around eleven o'clock in the morning and they were
leaving the site at two o'clock in the afternoon which constitutes Abandonment of Work which in violation
of the Company Code on Employees Discipline. This complaint was further supported by an interview
conducted to the owner and the engineer of Big J Feedmills and the affidavits of the co-employee of
Felix. After investigation, Enertech sent Felix a memorandum terminating his employment on the grounds
of dishonesty and insubordination. Felix filed a case of illegal dismissal before the Arbitration Branch of
the National Labor Relations Commission (NLRC). The labor arbiter ruled that Felix was illegally
dismissed, hence, it ordered his reinstatement and payment of backwages and proportionate 13th month
pay for 1994. Pending appeal in the NLRC, a writ of execution was issued directing Enertech to reinstate
Felix either physically or in the payroll. Enertech then filed an omnibus motion which prayed that the writ
of execution be recalled and that a new order be issued allowing it to pay Felix's separation pay in lieu of
reinstatement. Subsequently, the NLRC rendered a decision reversing the labor arbiter's decision. It was
affirmed by the Court of Appeals. Hence, Felix filed the instant petition alleging, among others, that the
omnibus motion filed by Enertech should be treated as admission of its liability.

Well-settled is the rule that the findings of fact of quasi-judicial agencies, like the NLRC, are accorded not only
respect but at times even finality if such findings are supported by substantial evidence. For this reason, we find
petitioner's dismissal to be in order. Falsification of time cards constitutes serious misconduct and dishonesty or
fraud, which are just causes for the termination of employment under Art. 282 (a) and (c) of the Labor Code.
Further, respondent appears merely to have been mistaken about the options open to it upon promulgation of
the labor arbiter's decision. As to the question of whether separation pay in lieu of his reinstatement may be
awarded to petitioner, it is settled that such can be done only upon finality of judgment, that is, when the
judgment is no longer appealable, hence final and executory, and where reinstatement can no longer be
effected, as when the position previously held by the employee no longer exists or when strained relations result
in the loss of trust and confidence. Rather, with the labor arbiter's decision still pending appeal in the NLRC, what
is applicable is Art. 223 of the Labor Code. If at all, therefore, respondent should have reinstated petitioner in the
payroll, instead of offering him separation pay. Be that as it may, the omnibus motion filed by respondent cannot
be construed as an admission of its liability for reinstatement.
ISSUE: W/N there was illegal dismissal

HELD: No. The CA taking into account the findings of the NLRC, correctly concluded that there was substantial
evidence showing that petitioner did not really work 8 hours a day. The validity of petitioner’s dismissal is a
factual question and the rule is well settled that the findings of fact of quarrel – judicial agencies, like the NLRC,
are accorded not only respect, but finally if they are supported by substantial evidence. Furthermore, the
omnibus motion filed by Y Co, during the tendency of the appeal is not an admission that it is the liable for
reinstatement or separation pay.

v. Chua-Qua vs. Clave, 189 SCRA 117, G.R. No. 49549 August 30, 1990

FACTS:

This would have been just another illegal dismissal case were it not for the controversial and unique situation that
the marriage of herein petitioner, then a classroom teacher, to her student who was fourteen (14) years her
junior, was considered by the school authorities as sufficient basis for terminating her services.

The case was about an affair and marriage of 30 years old teacher Evelyn Chua in Tay Tung High School in
Bacolod City to her 16 years old student. The petitioner teacher was suspended without pay and was terminated
of his employment “for Abusive and Unethical Conduct Unbecoming of a Dignified School Teacher” which was
filed by a public respondent as a clearance for termination.

ISSUE:

Was her dismissal valid?

Whether or not there is substantial evidence to prove that the antecedent facts which culminated in the marriage
between petitioner and her student constitute immorality and or grave misconduct?

RULING:

The Supreme Court declared the dismissal illegal saying:

“Private respondent [the school] utterly failed to show that petitioner [30-year old lady teacher] took advantage
of her position to court her student [16-year old]. If the two eventually fell in love, despite the disparity in their
ages and academic levels, this only lends substance to the truism that the heart has reasons of its own which
reason does not know. But, definitely, yielding to this gentle and universal emotion is not to be so casually
equated with immorality. The deviation of the circumstances of their marriage from the usual societal pattern
cannot be considered as a defiance of contemporary social mores.”

Finding that there is no substantial evidence of the imputed immoral acts, it follows that the alleged violation of
Code of Ethics governing school teachers would have no basis. Private respondent utterly failed to show that
petitioner took advantage of her position to court her student. The deviation of the circumstances of their
marriage from the usual societal pattern cannot be considered as a defiance of contemporary social mores

vi. Technol Eight Philippines Corporation vs. National Labor Relations

Commission, 618 SCRA 248, G.R. No. 187605br April 13, 2010