G.R.

178505
Petitioners: Cherry Price, Stephanie Domingo, Lolita Arbilera
Respondents: Innodata Philippines, Inc.

FACTS:
 The Petitioners prayed for a review of the decision promulgated by the Court of Appeals on June 15, 2007
which affirmed the decision of the NLRC on December 14, 2001 in favour of the Respondent, which reversed
the decision of the Labor Arbiter on October 17, 2000.
 The Respondent is a domestic corporation engaged in data encoding and data conversion, therefore employing
encoders, indexers, formatters, programmers, quality/quantity staff, and others to perform its operations and
assignments from clients.
 The Petitioners and Respondent engaged in an employment contract for a fixed duration of one year, beginning
on February 16, 1999 until February 16, 2000. The Petitioners were hired as Formatters.
 The aforesaid Employment Contract indicated the following terms for termination:
o If Innodata shall cease operations, the contract shall also be terminated on the last day of that month
o If Innodata shall no longer need the services of the Petitioners and will thus pre-terminate the
contract (a) once the project has been completed, (b) during business losses, (c) introduction of new
production processes and techniques
o Innodata or the Petitioners may pre-terminate the contract with or without cause, with due notice of
15 days
o Innodata or the Petitioners may pre-terminate the contract by reason of breach or violation of the
terms and conditions of the contract through 15 days written notice, without need of judicial action or
approval
 Respondent through its HRAD Manager sent notice to Petitioners re their last day of work on February 16,
2000, the end data stipulated in the contract
 Petitioners filed a complaint for illegal dismissal and damages against respondents on May 22, 2000 for the
reason that they should be considered as regular employees given that (1) their positions as formatters were
necessary and desirable to the usual business of Innodata and (2) they are not project employees as there was
no specific indication of the project upon which their contract duration was co-terminous with
 Respondents explained that (1) they were compelled to engage additional employees for fixed durations to
accommodate the wide range of services requested by their clients (2) the contract was for a fixed term only,
from September 6, 1999 to February 16, 2000 (3) the Petitioners knowingly, voluntarily, and wilfully entered
into the contract
 Respondents have ceased operations in June 2002
 The Labor Arbiter ruled in favour of the Petitioners, which was reversed by the NLRC and the Court of Appeals
upon finding merit in the execution of the contract which indicates the duration of the employment over the
nature of the services rendered.

ISSUE:
1.) Were the Petitioners regular employees of Innodata?

HELD:
Yes.
 While the Court renders fixed-term contracts as valid, these should not be construed as a means for employers
to circumvent the law on security of tenure.
o The employment status of a person is provided for by the law and not by what the Parties declare it to
be, and as such, they should not absolve themselves from the coverage of the law. Applicable
references are Art. 280 and Art. 270 of the Labor Code.
o Undoubtedly, the Petitioners are regular employees by the nature of the work they render, such that
they are desirable and necessary in the usual operation of business of Innodata.
o Fixed-term employment is valid only for certain cases, such that these are essential and natural
undertakings, such as in (a) overseas employment (b) positions in educational institutions where these
are undertaken in rotation among faculty members like deans and principals (c) elective positions in
companies of which durations are fixed
 The Employment Contract is highly suspicious as the document was clearly tampered with: the beginning data,
supposedly indicated to be on February 16, 1999, was crossed out to indicate September 6, 2000. This was due
to the completion of the project before the end of the one year term, and as such, the Petitioners were re-hired
in September. This would mean that they engaged the Petitioners for a period of less than a year, which is an
attempt to circumvent security of tenure.
 Petitioners could not be considered as Project Employees, defined as (1) engaged for a specific project or
undertaking (2) completion or termination of the project has been predetermined at the time of engagement of
the employee. The contract did not indicate a specific project upon which the Petitioners shall render services
accordingly, and in fact the Petitioners have rendered services for a number of clients of Innodata.