G.R. No.

164078

[ G.R. No. 164078, November 23, 2007 ]

AMA COMPUTER COLLEGE, PARAAQUE, AND/OR AMABLE C. AGUILUZ IX, PRESIDENT, MRS. CELESTE BANSALE, SCHOOL DIRECTOR, MS. SOCORRO, MR. PATRICK AZANZA, GRACE BERANIA AND MAJAL JACOB, PETITIONERS, VS. ROLANDO A. AUSTRIA, RESPONDENT. DECISION
NACHURA, J.: Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision[2] dated March 29, 2004 which affirmed with modification the Decision[3] of the National Labor Relations Commission (NLRC), dated March 31, 2003. The Facts Petitioner AMA Computer College, Paraaque (AMA) is an educational institution duly organized under the laws of the Philippines. The rest of the petitioners are principal officers of AMA. Respondent Rolando A. Austria[4] (respondent) was hired by AMA on probationary employment as a college dean on April 24, 2000.[5] On August 22, 2000, respondents appointment as dean was confirmed by AMAs Officer-in-Charge (OIC), Academic Affairs, in his Memorandum,[6] which reads: After a thorough evaluation of the performance of Mr. Rolando Austria as Dean, we are happy to inform you that he is hereby officially confirmed as Dean of AMA College Paraaque effective April 17, 2000 to September 17, 2000. In view of this, he will be entitled to a transportation allowance of One Thousand Five Hundred Sixty Pesos (P1,560.00). In the event that Mr. Austria gives up the Dean position or fails to meet the standards of the (sic) based on the evaluation of his immediate superior, he shall be considered for a faculty position and the appointee agrees that he shall lose the transportation allowance he enjoys as Dean and be entitled to his faculty rate.

Sometime in August 2000, respondent was charged with violating AMAs Employees Conduct and Discipline provided in its Orientation Handbook (Handbook),[7] as follows: 1) 2) leaking of test questions; failure to monitor general requirements vital to the operations of the company; and 3) gross inefficiency. In a Memorandum[8] dated August 29, 2000, respondent refuted the charges against him. Thereafter, respondent was placed on preventive suspension from September 8, 2000 to October 10, 2000. Notices[9] of Investigation were sent to respondent. Eventually, on September 29, 2000, respondent was informed of his dismissal, to wit: Dear Mr. Austria[,] Please be informed that after a careful deliberation on the case filed against you and upon serious consideration of the evidences (sic) presented, the Management has found you guilty of violating the following policies: A. Loss of trust and confidence by management due to gross inefficiency. (5.21 Very Serious/Grave Offense) B. Failure to monitor general requirements vital to the operations of the company. (5.10 Medium Offense) C. Leaking of test questions. (4.17 Very Serious/Grave Offense) This resulted to the loss of trust and confidence in your credibility as a company officer holding a highly sensitive position. In view of this, your services as Dean of AMA Paraaque is hereby terminated effective immediately. You are hereby instructed to report to the branch HR Personnel for further instructions. Please bear in mind that as a company policy you are required to accomplish your clearance and turn over all documents and responsibilities to the appropriate officers. You are barred from entering the company premises unless with clearance from the HRD.[10] On October 27, 2000, respondent filed a Complaint[11] for Illegal Dismissal, Illegal Suspension, Non-Payment of Salary and 13th Month Pay with prayer for Damages

and Attorney's Fees against AMA and the rest of the petitioners. Trial on the merits ensued. The Labor Arbiter's Ruling In his Decision[12] dated December 6, 2000, the Labor Arbiter held that petitioners accorded respondent due process. The Labor Arbiter however, also held that respondent substantially refuted the charges of gross inefficiency, incompetence, and leaking of test questions filed against him. But since respondent can no longer be reinstated beyond September 17, 2000 as his designation as college dean was only until such date, respondent should instead be paid his compensation and transportation allowance for the period from September 8, 2000 to September 17, 2000, or the salary and benefits withheld prior thereto. Thus: WHEREFORE, premises considered, judgment is hereby rendered ordering respondent AMA Computer College, Paraaque to pay complainants proportionate salary for the period beginning 8 September 2000 to 17 September 2000. P30,000 x 10/30 days = P10,000.00 and his proportionate transportation allowance. P1,560.00 x 10/30 days = P520.00 and the salary/benefits withheld prior to 8 September 2000, if any. All other claims are hereby dismissed for lack of merit. SO ORDERED. Aggrieved, respondent appealed the said Decision to the NLRC.[13] The NLRC's Ruling On March 31, 2003, the NLRC, in its Decision,[14] found merit in respondent's appeal. The NLRC opined that the petitioners did not contravene respondent's allegation that he had attained regular status after serving the three (3)-month probationary period required under the Handbook.[15] Thus, while the NLRC sustained the Labor Arbiter's finding that petitioners failed to establish the grounds for respondent's dismissal, it held that the Labor Arbiter erred in declaring that respondent's appointment was only from April 24 to September 17, 2000. Accordingly, the NLRC declared that respondent was a regular employee and that he was illegally dismissed. Nevertheless, the NLRC held that reinstatement would not promote industrial harmony; hence, the NLRC disposed of the case in this wise:

PREMISES CONSIDERED the Decision of December 6, 2000 is VACATED and a new one entered declaring complainant illegally dismissed. Respondents are directed to pay complainant separation pay computed at one (1) month per year of service in addition to full backwages from September 29, 2000 until December 6, 2000, or in the amount of one hundred thousand three hundred seventy eightpesos & 80/100 (P100,378.80). SO ORDERED.[16] Petitioners filed a Motion for Reconsideration[17] assailing respondent's regular status, which the NLRC in a Resolution,[18] denied for having been filed out of time and for lack of merit. Respondent also filed a Motion for Partial Reconsideration,[19] which the NLRC, in another Resolution,[20] denied for lack of merit. Thus, petitioners went to the CA via Petition for Certiorari[21] under Rule 65 of the 1997 Rules of Civil Procedure. The CA's Ruling On March 29, 2004, the CA held that based on the Handbook and on respondent's appointment, it can be inferred that respondent was a regular employee, and as such, his employment can only be terminated for any of the causes provided under Article 282[22] of the Labor Code and after observance of the requirements of due process. Furthermore, the CA upheld the Labor Arbiters and the NLRCs similar findings that respondent sufficiently rebutted the charges against him and that petitioners failed to prove the grounds for respondent's dismissal. The dispositive portion of the said Decision reads: WHEREFORE, premises considered, the petition is hereby DENIED DUE COURSE and DISMISSED for lack of merit. The decision of the NLRC is AFFIRMED with MODIFICATION as above stated, with regard to the computation of backwages. SO ORDERED. Petitioners filed a Motion for Reconsideration[23] of the said Decision, which the CA denied, in its Resolution[24] dated June 11, 2004, for lack of merit. Hence, this Petition based on the sole ground that the CA committed serious error of law in affirming and then further modifying the erroneous decision of the NLRC declaring that herein respondent was illegally dismissed by AMA.[25] Petitioners argue that respondent, as college dean, was an academic personnel of AMA under Section 4(m) (4)(c) of the Manual of Regulations for Private Schools[26] (Manual) and, as such, his probationary employment is governed by Section 92[27] thereof and not by the Labor Code or AMA's Handbook; that under the circumstances, respondent has not yet attained the status of a regular employee;

that respondent's employment was for a fixed term as found by the Labor Arbiter but the same was terminated earlier due to just causes; that the respondent, whether he may be considered as a probationary or a regular employee, was dismissed for just causes; and that the award of backwages in favor of the respondent, up to the finality of the decision, is oppressive to the petitioners, considering the absence of an order of reinstatement and the respondent's fixed period of employment.[28] On the other hand, respondent counters that both the NLRC and the CA found that respondent was a regular employee and that he was illegally dismissed; that the instant Petition raises questions of fact - such as whether or not respondent is a regular employee and whether or not circumstances existed warranting his dismissal - which can no longer be inquired into by this Court;[29] that petitioners assailed the regular status of the respondent for the first time only before the CA; that they never raised as issue respondent's regular status before the Labor Arbiter and the NLRC because they merely concentrated on their stand that respondent was lawfully dismissed; that petitioners failed to discharge the burden of proving the existence of a valid ground in dismissing respondent as found by the Labor Arbiter, the NLRC, and the CA; and that the CA's award of backwages from the date of actual dismissal up to the date of the finality of the decision in favor of the respondent is consonant with Article 279[30] of the Labor Code, and hence, valid.[31] From this exchange of arguments, we glean two ultimate questions that require resolution, viz.: 1. What is the nature of respondent's employment? 2. Was he lawfully dismissed? The first question, i.e., whether respondent is a regular, probationary, or fixed term employee is essentially factual in nature.[32] However, the Court opts to resolve this question due to the far-reaching effects it could bring to the sector of the academe. As an exception to the general rule, we held in Molina v. Pacific Plans, Inc.: [33] A disharmony between the factual findings of the Labor Arbiter and the National Labor Relations Commission opens the door to a review thereof by this Court. Factual findings of administrative agencies are not infallible and will be set aside when they fail the test of arbitrariness. Moreover, when the findings of the National Labor Relations Commission contradict those of the Labor Arbiter, this Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned findings.

The instant case falls squarely within the aforesaid exception. The Labor Arbiter held that, while petitioners did not prove the existence of just causes in order to warrant respondent's dismissal, the latter's employment as dean ceased to exist upon expiration of respondent's term of employment on September 17, 2000. In sum, the Labor Arbiter held that the nature of respondent's employment is one for a fixed term. On the other hand, the NLRC and the CA both held that respondent is a regular employee because respondent had fully served the three (3)-month probationary period required in the Handbook, which the petitioners failed to deny or contravene in the proceedings before the Labor Arbiter. Prior to his dismissal, respondent held the position of college dean. The letter of appointment states that he was officially confirmed as Dean of AMA College, Paraaque, effective from April 17, 2000 to September 17, 2000. Petitioners submit that the nature of respondent's employment as dean is one with a fixed term. We agree. We held that Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. Even if the duties of the employee consist of activities necessary or desirable in the usual business of the employer, the parties are free to agree on a fixed period of time for the performance of such activities. There is nothing essentially contradictory between a definite period of employment and the nature of the employees duties.[34] Thus, this Court's ruling in Brent School, Inc. v. Zamora[35] is instructive: The question immediately provoked. . . is whether or not a voluntary agreement on a fixed term or period would be valid where the employee "has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer." The definition seems non sequitur. From the premise that the duties of an employee entail "activities which are usually necessary or desirable in the usual business or trade of the employer" the conclusion does not necessarily follow that the employer and employee should be forbidden to stipulate any period of time for the performance of those activities. There is nothing essentially contradictory between a definite period of an employment contract and the nature of the employee's duties set down in that contract as being "usually necessary or desirable in the usual business or trade of the employer." The concept of the employee's duties as being "usually necessary or desirable in the usual business or trade of the employer" is not synonymous with or identical to employment with a fixed term. Logically, the decisive determinant in term employment should not be the activities that the employee is called upon to

perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be "that which must necessarily come, although it may not be known when." Seasonal employment, and employment for a particular project are merely instances of employment in which a period, where not expressly set down, is necessarily implied. xxxxxxxxx Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment contracts, for one, to which, whatever the nature of the engagement, the concept of regular employment with all that it implies does not appear ever to have been applied, Article 280 of the Labor Code notwithstanding; also 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 . . . . xxx The instant case involves respondent's position as dean, and comes within the purview of the Brent School doctrine. First. The letter of appointment was clear. Respondent was confirmed as Dean of AMA College, Paraaque, effective from April 17, 2000 to September 17, 2000. In numerous cases decided by this Court, we had taken notice, that by way of practice and tradition, the position of dean is normally an employment for a fixed term.[36] Although it does not appear on record and neither was it alleged by any of the parties that respondent, other than holding the position of dean, concurrently occupied a teaching position, it can be deduced from the last paragraph of said letter that the respondent shall be considered for a faculty position in the event he gives up his deanship or fails to meet AMA's standards. Such provision reasonably serves the intention set forth in Brent School that the deanship may be rotated among the other members of the faculty. Second. The fact that respondent did not sign the letter of appointment is of no moment. We held in Brent School, to wit: Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, 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.[37] The fact that respondent voluntarily accepted the employment, assumed the position, and performed the functions of dean is clear indication that he knowingly and voluntarily consented to the terms and conditions of the appointment, including the fixed period of his deanship. Other than the handwritten notes made in the letter of appointment, no evidence was ever presented to show that respondents consent was vitiated, or that respondent objected to the said appointment or to any of its conditions. Furthermore, in his status as dean, there can be no valid inference that he was shackled by any form of moral dominance exercised by AMA and the rest of the petitioners. Alternatively, petitioners also claim that respondent did not attain regular status, relying on Section 92 of the Manual in connection with Section 4(m) 4(c) thereof which provides for a three (3)-year probationary period for Academic Personnel. Petitioners submit that the position of dean is included in the provision school officials responsible for academic matters, and may include other school officials. As such, petitioners aver that the three (3)-month probationary period for officers set forth in the Handbook is not applicable to the case of respondent. The Handbook merely provides for two classes of employees for purposes of permanency, i.e., Faculty and Non-Academic. However, the same does not specifically classify the position of dean as part of the Faculty or of the NonAcademic personnel. At this juncture, we find solace in the Manual of Regulations for Private Schools Annotated,[38] which provides that the college dean is the senior officer responsible for the operation of an academic program, the enforcement of rules and regulations, and the supervision of faculty and student services. We already had occasion to state that the position of dean is primarily academic[39] and, as such, he is considered a managerial employee.[40] Yet, a perusal of the Handbook yields the interpretation that the provision on the permanency of Faculty members applies to teachers only. But the Handbook or school manual must yield to the

decree of the Manual, the latter having the character of law.[41] The specified probationary periods in Section 92 of the Manual are the maximum periods; under certain conditions, regular status may be achieved by the employee in less time.[42] However, under the given circumstances and the fact that the position of dean in this case is for a fixed term, the issue whether the respondent attained a regular status is not in point. By the same token, the application of the provision in the Manual as to the required probationary period is misplaced. It can be well said that a tenured status of employment co-exists and is co-terminous only with the definite term fixed in the contract of employment. In light of the foregoing disquisition, the resolution of the second question requires full cognizance of respondents fixed term of employment and all the effects thereof. It is axiomatic that a contract of employment for a definite period terminates on its own force at the end of such period.[43] The lack of notice of termination is of no consequence because when the contract specifies the length of its duration, it comes to an end upon the expiration of such period.[44] Thus, the unanimous finding of the Labor Arbiter, the NLRC and the CA that respondent adequately refuted all the charges against him assumes relevance only insofar as respondents dismissal from the service was effected by petitioners before expiration of the fixed period of employment. True, petitioners erred in dismissing the respondent, acting on the mistaken belief that respondent was liable for the charges leveled against him. But respondent also cannot claim entitlement to any benefit flowing from such employment after September 17, 2000, because the employment, which is the source of the benefits, had, by then, already ceased to exist. Finally, while this Court adheres to the principle of social justice and protection to labor, the constitutional policy to provide such protection to labor is not meant to be an instrument to oppress employers. The commitment under the fundamental law is that the cause of labor does not prevent us from sustaining the employer when the law is clearly on its side.[45] WHEREFORE, the instant Petition is GRANTED and the CA Decision in CA-G.R. SP No. 78455 is REVERSED and SET ASIDE. The Decision of the Labor Arbiter, dated December 6, 2000, is hereby REINSTATED. No costs. SO ORDERED. Ynares-Santiago, (Chairperson), Austria-Martinez, Chico-Nazario, and Reyes, JJ., concur.

[1]

Dated July 8, 2004, rollo, pp. 3-25.

[2]

Particularly docketed as CA-G.R. SP No. 78455, penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justices Roberto A. Barrios (deceased) and Fernanda Lampas-Peralta, concurring; id. at 27-33.
[3]

Particularly docketed as NLRC NCR CA No. 030561-02; id. at 57-63.

[4]

Also referred to as Rolando S. Austria in a Memorandum dated August 22, 2000; id. at 78.
[5]

Memorandum dated April 15, 2000; id. at 79. Supra note 4. Rollo, pp. 105-106. CA rollo, p. 84. Rollo, pp. 108-109.

[6]

[7]

[8]

[9]

[10]

Letter addressed to respondent by one Edwin Santos, Senior Manager for Human Resources of AMA; id. at 110.
[11]

Particularly docketed as NLRC NCR Case No. 30-10-04319-00; records, p. 1. Rollo, pp. 68-73. Dated January 7, 2002; id. at 74-77. Supra note 3. Rollo, pp. 80-82. Id. at 62. Dated May 12, 2003; id. at 83-89. Dated May 30, 2003; id. at 65-66. Dated April 29, 2003; id. at 90-91.

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

Dated June 30, 2003, records, pp. 175-176. Dated August 7, 2003, CA rollo, pp. 2-19.

[21]

[22]

ART. 282. Termination by employer. An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. [23] Dated April 19, 2004; rollo, pp. 153-161.
[24]

Id. at 36. Petitioners' Memorandum dated July 28, 2006, rollo, pp. 201-224.

[25]

[26]

Section 4. Definition of Terms. Except as otherwise provided, the terms below shall be construed as follows: xxxx (m) Members of the school community refers to the general membership of every private school established in accordance with law and duly authorized by the Department to operate certain educational programs or courses. The term includes, either singly or collectively, the following: School personnel means the persons, singly or collectively, working in a private school. They are classified as follows: Academic personnel includes all school personnel who are formally engaged in actual teaching service or in research assignments, either on full-time or part-time basis, as well as those who possess certain prescribed academic functions directly supportive of teaching, such as registrars, librarians, guidance counselors, researchers, and other similar persons. They include school officials responsible for academic matters, and may include other school officials.

xxxx (4) xxxx (c)

xxxx

[27]

Section 92. Probationary Period. Subject in all instances to compliance with Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on the trimester basis.
[28]

Supra note 25. Respondent's Comment dated August 9, 2005; rollo, pp. 173-178.

[29]

[30]

Article 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
[31]

Respondent's Memorandum dated August 28, 2006; rollo, pp. 264-272.

[32]

ABS-CBN Broadcasting Corporation v. Nazareno, G.R. No. 164156, September 26, 2006, 503 SCRA 204, 225; Rambuyon v. Fiesta Brands, Inc., G.R. No. 157029, December 15, 2005, 478 SCRA 133, 141; and Benares v. Pancho, G.R. No. 151827, April 29, 2005, 457 SCRA 652, 662.
[33]

G.R. No. 165476, March 10, 2006, 484 SCRA 498, 517, citing Diamond Motors Corporation v. Court of Appeals, 417 SCRA 46, 50 (2003).
[34]

St. Theresas School of Novaliches Foundation v. National Labor Relations Commission, 351 Phil. 1038, 1043 (1998).
[35]

G.R. No. 48494, February 5, 1990, 181 SCRA 702, 710 & 714 (Emphasis supplied).
[36]

Aklan College, Inc. and Msgr. Adolfo P. Depra v. Rodolfo P. Guarino, G.R. No. 152949, August 14, 2007; Blancaflor v. National Labor Relations Commission, G.R. No. 101013, February 2, 1993, 218 SCRA 366; La Salette of Santiago, Inc. v. National Labor Relations Commission, G.R. No. 82918, March 11, 1991, 372 SCRA 89; Escudero v. Office of the President of the Philippines, G.R. No. 57822, April 26, 1989, 172 SCRA 783, 793; Sta. Maria v. Lopez, G.R. No. L- 30773, February 18, 1970, 31 SCRA 637, 655.

[37]

Supra note 35, at 716.

[38]

Ulpiano P. Sarmiento III, Esq., First Edition, 1995, p. 164, citing Hawes and Hawes, The Concise Dictionary of Education, 1982 ed., p. 62.
[39]

General Baptist Bible College v. National Labor Relations Commission, G.R. No. 85534, March 5, 1993, 219 SCRA 549, 557; Sta. Maria v. Lopez, supra note 36 at 657.
[40]

Cainta Catholic School v. Cainta Catholic School Employees Union (CCSEU), G.R. No. 151021, May 4, 2006, 489 SCRA 468, 490; Cruz v. Medina, G.R. No. 73053, September 15, 1989, 177 SCRA 565, 571.
[41]

Espiritu Santo Parochial School v. National Labor Relations Commission, G.R. No. 82325, September 26, 1989, 177 SCRA 802, 807.
[42]

Cagayan Capitol Catholic College v. National Labor Relations Commission, G.R. Nos. 90010-11, September 14, 1990, 189 SCRA 658, 665.
[43]

Blancaflor v. National Labor Relations Commission, supra note 36 at 374.

[44]

Pangilinan v. General Milling Corporation, G.R. No. 149329, July 12, 2004, 434 SCRA 159, 172.
[45]

Salazar v. Philippine Duplicators, Inc., G.R. No. 154628, December 6, 2006, 510 SCRA 288, 308.

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G.R. No. 167714

[ G.R. NO. 167714, March 07, 2007 ]

ROWELL INDUSTRIAL CORPORATION, PETITIONER, VS. HON. COURT OF APPEALS AND JOEL TARIPE, RESPONDENTS. DECISION
CHICO-NAZARIO, J.: This case is a Petition for Review under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to set aside the Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R. SP No. 74104, entitled, Rowell Industrial Corp., and/or Edwin Tang vs. National Labor Relations Commission and Joel Taripe, dated 30 September 2004 and 1 April 2005, respectively, which affirmed the Resolutions[3] of the National Labor Relations Commission (NLRC) dated 7 June 2002 and 20 August 2002, finding herein respondent Joel Taripe (Taripe) as a regular employee who had been illegally dismissed from employment by herein petitioner Rowell Industrial Corp. (RIC), thereby ordering petitioner RIC to reinstate respondent Taripe with full backwages, subject to the modification of exonerating Edwin Tang, the RIC General Manager and Vice President, from liability and computing the backwages of herein respondent Taripe based on the prevailing salary rate at the time of his dismissal. The NLRC Resolutions reversed the Decision[4] of the Labor Arbiter dated 29 September 2000, which dismissed respondent Taripe's complaint. Petitioner RIC is a corporation engaged in manufacturing tin cans for use in packaging of consumer products, e.g., foods, paints, among other things. Respondent Taripe was employed by petitioner RIC on 8 November 1999 as a "rectangular power press machine operator" with a salary of P223.50 per day, until he was allegedly dismissed from his employment by the petitioner on 6 April 2000. The controversy of the present case arose from the following facts, as summarized by the NLRC and the Court of Appeals: On [17 February 2000], [herein respondent Taripe] filed a [C]omplaint against [herein petitioner RIC] for regularization and payment of holiday pay, as well as indemnity for severed finger, which was amended on [7 April 2000] to include illegal dismissal. [Respondent Taripe] alleges that [petitioner RIC] employed him starting [8 November 1999] as power press machine operator, such position of

which was occupied by [petitioner RIC's] regular employees and the functions of which were necessary to the latter's business. [Respondent Taripe] adds that upon employment, he was made to sign a document, which was not explained to him but which was made a condition for him to be taken in and for which he was not furnished a copy. [Respondent Taripe] states that he was not extended full benefits granted under the law and the [Collective Bargaining Agreement] and that on [6 April 2000], while the case for regularization was pending, he was summarily dismissed from his job although he never violated any of the [petitioner RIC's] company rules and regulations. [Petitioner RIC], for [its] part, claim[s] that [respondent Taripe] was a contractual employee, whose services were required due to the increase in the demand in packaging requirement of [its] clients for Christmas season and to build up stock levels during the early part of the following year; that on [6 March 2000], [respondent Taripe's] employment contract expired. [Petitioner RIC] avers that the information update for union members, which was allegedly filled up by [respondent Taripe] and submitted by the Union to [petitioner] company, it is stated therein that in the six (6) companies where [respondent Taripe] purportedly worked, the latter's reason for leaving was "finished contract," hence, [respondent Taripe] has knowledge about being employed by contract contrary to his allegation that the document he was signing was not explained to him. [Petitioner RIC] manifest[s] that all benefits, including those under the [Social Security System], were given to him on [12 May 2000].[5] On 29 September 2000, the Labor Arbiter rendered a Decision dismissing respondent Taripe's Complaint based on a finding that he was a contractual employee whose contract merely expired. The dispositive portion of the said Decision reads, thus: WHEREFORE, premises considered, judgment is hereby rendered declaring this complaint of [herein respondent Taripe] against [herein petitioner RIC] and Mr. Edwin Tang for illegal dismissal DISMISSED for lack of merit. However, on ground of compassionate justice, [petitioner RIC and Mr. Edwin Tang] are hereby ordered to pay [respondent Taripe] the sum of PHP5,811.00 or one month's salary as financial assistance and holiday pay in the sum of PHP894.00, as well as attorney's fees of 10% based on holiday pay (Article 110, Labor Code).[6] Aggrieved, respondent Taripe appealed before the NLRC. In a Resolution dated 7 June 2002, the NLRC granted the appeal filed by respondent Taripe and declared that his employment with the petitioner was regular in status; hence, his dismissal was illegal. The decretal portion of the said Resolution reads as follows: WHEREFORE, premises considered, [herein respondent Taripe's] appeal is GRANTED. The Labor Arbiter's [D]ecision in the above-entitled case is hereby REVERSED. It is hereby declared that [respondent Taripe's] employment with [herein petitioner RIC and Mr. Edwin Tang] is regular in status and that he was illegally dismissed therefrom.

[Petitioner RIC and Mr. Edwin Tang] are hereby ordered to reinstate [respondent Taripe] and to jointly and severally pay him full backwages from the time he was illegally dismissed up to the date of his actual reinstatement, less the amount of P1,427.67. The award of P894.00 for holiday pay is AFFIRMED but the award of P5,811.00 for financial assistance is deleted. The award for attorney's fees is hereby adjusted to ten percent (10%) of [respondent Taripe's] total monetary award.[7] Dissatisfied, petitioner RIC moved for the reconsideration of the aforesaid Resolution but it was denied in the Resolution of the NLRC dated 20 August 2002. Consequently, petitioner filed a Petition for Certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure before the Court of Appeals with the following assignment of errors: I. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN EXCESS OF ITS JURISDICTION WHEN IT MISINTERPRETED ARTICLE 280 OF THE LABOR CODE AND IGNORED JURISPRUDENCE WHEN IT DECIDED THAT [RESPONDENT TARIPE] IS A REGULAR EMPLOYEE AND THUS, ILLEGALLY DISMISSED. II. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN EXCESS OF ITS JURISDICTION WHEN IT ORDERED [EDWIN TANG] TO (sic) JOINTLY AND SEVERALLY LIABLE FOR MONETARY CLAIMS OF [RESPONDEN TARIPE]. III. THE [NLRC] GRAVELY ABUSED ITS DISCRETION AND IS IN EXCESS OF ITS JURISDICTION WHEN IT ORDERED PAYMENT OF MONETARY CLAIMS COMPUTED ON AN ERRONEOUS WAGE RATE.[8] The Court of Appeals rendered the assailed Decision on 30 September 2004, affirming the Resolution of the NLRC dated 7 June 2002, with modifications. Thus, it disposed WHEREFORE, the Resolutions dated [7 June 2002] and [20 August 2002] of [the NLRC] are affirmed, subject to the modification that [Edwin Tang] is exonerated from liability and the computation of backwages of [respondent Taripe] shall be based on P223.50, the last salary he received.[9] A Motion for Reconsideration of the aforesaid Decision was filed by petitioner RIC, but the same was denied for lack of merit in a Resolution[10] of the Court of Appeals dated 1 April 2005. Hence, this Petition. Petitioner RIC comes before this Court with the lone issue of whether the Court of Appeals misinterpreted Article 280 of the Labor Code, as amended, and ignored jurisprudence when it affirmed that respondent Taripe was a regular employee and was illegally dismissed.

Petitioner RIC, in its Memorandum,[11] argues that the Court of Appeals had narrowly interpreted Article 280 of the Labor Code, as amended, and disregarded a contract voluntarily entered into by the parties. Petitioner RIC emphasizes that while an employee's status of employment is vested by law pursuant to Article 280 of the Labor Code, as amended, said provision of law admits of two exceptions, to wit: (1) those employments which have 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; and (2) when the work or services to be performed are seasonal; hence, the employment is for the duration of the season. Thus, there are certain forms of employment which entail the performance of usual and desirable functions and which exceed one year but do not necessarily qualify as regular employment under Article 280 of the Labor Code, as amended. The Petition is unmeritorious. A closer examination of Article 280 of the Labor Code, as amended, is imperative to resolve the issue raised in the present case. In declaring that respondent Taripe was a regular employee of the petitioner and, thus, his dismissal was illegal, the Court of Appeals ratiocinated in this manner: In determining the employment status of [herein respondent Taripe], reference must be made to Article 280 of the Labor Code, which provides: xxxx Thus, there are 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. [Respondent Taripe] belonged to the first category of regular employees. The purported contract of employment providing that [respondent Taripe] was hired as contractual employee for five (5) months only, cannot prevail over the undisputed fact that [respondent Taripe] was hired to perform the function of power press operator, a function necessary or desirable in [petitioner's] business of manufacturing tin cans. [Herein petitioner RIC's] contention that the four (4) months length of service of [respondent Taripe] did not grant him a regular status is inconsequential, considering that length of service assumes importance only when the activity in which the employee has been engaged to perform is not

necessary or desirable to the usual business or trade of the employer. As aptly ruled by [the NLRC]: "In the instant case, there is no doubt that [respondent Taripe], as power press operator, has been engaged to perform activities which are usually necessary or desirable in [petitioner RIC's] usual business or trade of manufacturing of tin cans for use in packaging of food, paint and others. We also find that [respondent Taripe] does not fall under any of the abovementioned exceptions. Other that (sic) [petitioner RIC's] bare allegation thereof, [it] failed to present any evidence to prove that he was employed for a fixed or specific project or undertaking the completion of which has been determined at the time of his engagement or that [respondent Taripe's] services are seasonal in nature and that his employment was for the duration of the season."[12] Article 280 of the Labor Code, as amended, provides: ART. 280. REGULAR AND CASUAL EMPLOYMENT. -The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. [Emphasis supplied] The aforesaid Article 280 of the Labor Code, as amended, classifies employees into three categories, namely: (1) regular employees or those whose work is necessary or desirable to the usual business 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 services 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.[13] Regular employees are further classified into: (1) regular employees by nature of work; and (2) regular employees by years of service.[14] The former refers to those employees who perform a particular activity which is necessary or desirable in the

usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year.[15] The aforesaid Article 280 of the Labor Code, as amended, however, 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 nothing essentially contradictory between a definite period of employment and the nature of the employee's duties.[16] What Article 280 of the Labor Code, as amended, seeks to prevent is the practice of some unscrupulous and covetous employers who wish to circumvent the law that protects lowly workers from capricious dismissal from their employment. The aforesaid provision, however, should not be interpreted in such a way as to deprive employers of the right and prerogative to choose their own workers if they have sufficient basis to refuse an employee a regular status. Management has rights which should also be protected.
[17]

In the case at bar, respondent Taripe signed a contract of employment prior to his admission into the petitioner's company. Said contract of employment provides, among other things: 4. That my employment shall be contractual for the period of five (5) months which means that the end of the said period, I can (sic) discharged unless this contract is renewed by mutual consent or terminated for cause.[18] Based on the said contract, respondent Taripe's employment with the petitioner is good only for a period of five months unless the said contract is renewed by mutual consent. And as claimed by petitioner RIC, respondent Taripe, along with its other contractual employees, was hired only to meet the increase in demand for packaging materials during the Christmas season and also to build up stock levels during the early part of the year. Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it must, nevertheless, meet any of the following guidelines in order that it cannot be said to circumvent security of tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon 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 (2) 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 on the latter.[19] In the present case, it cannot be denied that the employment contract signed by respondent Taripe did not mention that he was hired only for a specific undertaking,

the completion of which had been determined at the time of his engagement. The said employment contract neither mentioned that respondent Taripe's services were seasonal in nature and that his employment was only for the duration of the Christmas season as purposely claimed by petitioner RIC. What was stipulated in the said contract was that respondent Taripe's employment was contractual for the period of five months. Likewise, as the NLRC mentioned in its Resolution, to which the Court of Appeals agreed, other than the bare allegations of petitioner RIC that respondent Taripe was hired only because of the increase in the demand for packaging materials during the Christmas season, petitioner RIC failed to substantiate such claim with any other evidence. Petitioner RIC did not present any evidence which might prove that respondent Taripe was employed for a fixed or specific project or that his services were seasonal in nature. Also, petitioner RIC failed to controvert the claim of respondent Taripe that he was made to sign the contract of employment, prepared by petitioner RIC, as a condition for his hiring. Such contract in which the terms are prepared by only one party and the other party merely affixes his signature signifying his adhesion thereto is called contract of adhesion.[20] It is an agreement in which the parties bargaining are not on equal footing, the weaker party's participation being reduced to the alternative "to take it or leave it."[21] In the present case, respondent Taripe, in need of a job, was compelled to agree to the contract, including the five-month period of employment, just so he could be hired. Hence, it cannot be argued that respondent Taripe signed the employment contract with a fixed term of five months willingly and with full knowledge of the impact thereof. With regard to the second guideline, this Court agrees with the Court of Appeals that petitioner RIC and respondent Taripe cannot be said to have dealt with each other on more or less equal terms with no moral dominance exercised by the former over the latter. As a power press operator, a rank and file employee, he can hardly be on equal terms with petitioner RIC. As the Court of Appeals said, "almost always, employees agree to any terms of an employment contract just to get employed considering that it is difficult to find work given their ordinary qualifications."[22] Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid fixed term employment contract, it can be safely stated that the aforesaid contract signed by respondent Taripe for a period of five months was a mere subterfuge to deny to the latter a regular status of employment. Settled is the rule that the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the

employee in relation to the casual 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.[23] Given the foregoing, this Court agrees in the findings of the Court of Appeals and the NLRC that, indeed, respondent Taripe, as a rectangular power press machine operator, in charge of manufacturing covers for "four liters rectangular tin cans," was holding a position which is necessary and desirable in the usual business or trade of petitioner RIC, which was the manufacture of tin cans. Therefore, respondent Taripe was a regular employee of petitioner RIC by the nature of work he performed in the company. Respondent Taripe does not fall under the exceptions mentioned in Article 280 of the Labor Code, as amended, because it was not proven by petitioner RIC that he was employed only for a specific project or undertaking or his employment was merely seasonal. Similarly, the position and function of power press operator cannot be said to be merely seasonal. Such position cannot be considered as only needed for a specific project or undertaking because of the very nature of the business of petitioner RIC. Indeed, respondent Taripe is a regular employee of petitioner RIC and as such, he cannot be dismissed from his employment unless there is just or authorized cause for his dismissal. Well-established is the rule that regular employees enjoy security of tenure and they can only be dismissed for just cause and with due process, notice and hearing. [24] And in case of employees' dismissal, the burden is on the employer to prove that the dismissal was legal. Thus, respondent Taripe's summary dismissal, not being based on any of the just or authorized causes enumerated under Articles 282,[25] 283,[26] and 284[27] of the Labor Code, as amended, is illegal. Before concluding, we once more underscore the settled precept that factual findings of the NLRC, having deemed to acquire expertise in matters within its jurisdiction, are generally accorded not only respect but finality especially when such factual findings are affirmed by the Court of Appeals;[28] hence, such factual findings are binding on this Court. WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 30 September 2004 and 1 April 2005, respectively, which affirmed with modification the Resolutions of the NLRC dated 7 June 2002 and 20 August 2002, respectively, finding herein respondent Taripe as a regular employee who had been illegally dismissed from employment by petitioner RIC, are hereby AFFIRMED. Costs against petitioner RIC.

SO ORDERED. Ynares-Santiago, Austria-Martinez, and Nachura, JJ., concur. Callejo, Sr., J., on leave.

[1]

Penned by Associate Justice Fernanda Lampas Peralta with Associate Justices Conrado M. Vasquez, Jr. and Josefina Guevara-Salonga, concurring, rollo, pp. 1727.
[2]

Id. at 28.

[3]

Penned by Commissioner Victoriano R. Calaycay with Presiding Commissioner Raul T. Aquino and Commissioner Angelita A. Gacutan, concurring, id. at 36-48; NLRC Records, pp. 147-148.
[4]

Penned by Labor Arbiter Natividad M. Roma, id. at 29-35. Id. at 18-19. Id. at 35. Id. at 45-46. Id. at 21. Id. at 26. Supra note 2. Rollo, pp. 98-104. Id. at 22-23.

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004, 434 SCRA 159, 169.
[14]

E. Ganzon, Inc. vs. National Labor Relations Commission, G.R. No. 123769, 22 December 1999, 321 SCRA 434, 440.
[15]

Pangilinan vs. General Milling Corporation, supra note 13 at 169-170.

[16]

Id. at 170.

[17]

Pantranco North Express, Inc. vs. NLRC, G.R. No. 106654, 16 December 1994, 239 SCRA 272, 279.
[18]

CA rollo, p. 27.

[19]

Philippine National Oil Co.-Energy Dev't. Corp. vs. NLRC, G.R. No. 97747, 31 March 1993, 220 SCRA 695, 699.
[20]

Fabrigas vs. San Francisco del Monte, Inc., G.R. No. 152346, 25 November 2005, 476 SCRA 247, 263.
[21]

Qua Chee Gan vs. Law Union and Rock Insurance Co., Ltd., 98 Phil. 85, 95 (1955).
[22]

Rollo, p. 25.

[23]

Lopez vs. Metropolitan Waterworks and Sewerage System, G.R. No. 154472, 30 June 2005, 462 SCRA 428, 453.
[24]

Philippine Amusement and Gaming Corporation vs. Angara, G.R. No. 142937, 15 November 2005, 475 SCRA 41, 61.
[25]

ART. 282. TERMINATION BY EMPLOYER. - An employer may terminate an employment for any of the following causes. (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representatives; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and Other causes analogous to the foregoing.
[26]

ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the

closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Ministry of Labor and Employment [now Secretary of Labor] at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year.
[27]

ART. 284. DISEASE AS GROUND FOR TERMINATION. - An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.
[28]

Land and Housing Development Corporation vs. Esquillo, G.R. No. 152012, 30 September 2005, 471 SCRA 488, 494.

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G.R. No. 148102

[ G.R. NO. 148102, July 11, 2006 ]

BERNARDINO LABAYOG, CRESENCIO GRANZORE, JEANETTE GONZALES, NOEME DADIZ, GEMMA PANGANIBAN, DALISAY BUENVIAJE, VICTORIANA RUEDAS, MA. VICTORIA CABALONG, AMALIA SALVARRI, ROWENA FERNANDEZ, DELIA LOZARES, LUNINGNING ANGELES, ROSEMARIE SALES, VIVIAN VERZOSA, MARILYN JOSE, ROSANNA ROLDAN, HERMINIO CARANTO, ANITA SALVADOR, JORGE SALAMAT, ROBERTO ODIAMAR, EFREN LACAMPUINGAN, NOEL TAGALOG, MARCOS DE LA CRUZ, ELIAS BELO, DARIUS EROLES, HELEN BARAYUGA,[1] CRISTOPHER HILARIO, JOEL ESGUERRA, BERNABE DUCUT, JOSEPH TANAUY, EDWIN CEA, NOEL VILLASCA, ERNESTO ALFONSO, FERNANDO CEBU AND REYNALDO SESBRENO,[2] PETITIONERS, VS. M.Y. SAN BISCUITS, INC. AND MEW WAH LIM, RESPONDENTS. DECISION
CORONA, J.: The subject of this petition for review on certiorari is the resolution[3] of the Court of Appeals (CA) dated January 31, 2001 in CA-G.R. SP No. 51390, the dispositive portion of which read: WHEREFORE, private respondents' motion for reconsideration is GRANTED. The decision of this court, promulgated [on] September 12, 2000, is REVERSED and SET ASIDE. The decision of the National Labor Relations Commission dated August 22, 1997 and its resolution dated November 24, 1997 are hereby AFFIRMED. No costs. At the outset, this petition should have been denied for lack of proper verification and certification of non-forum shopping. Of the 35 petitioners, only Bernardino Labayog, Luningning Angeles and Rosanna Roldan signed.[4] But even if, in the exercise of its discretion and in the interest of substantial justice, this Court grants a liberal interpretation of the rules on verification and certification of non-forum shopping, this petition should nonetheless fail for lack of merit. The facts follow. On various dates in 1992, petitioners entered into contracts of employment with respondent company as mixers, packers and machine operators for a fixed term.

On the expiration of their contracts, their services were terminated. Forthwith, they each executed a quitclaim. On April 15, 1993, petitioners filed complaints for illegal dismissal, underpayment of wages, non-payment of overtime, night differential and 13th month pay, damages and attorney's fees. The labor arbiter ruled their dismissal to be illegal[5] on the ground that they had become regular employees who performed duties necessary and desirable in respondent company's business. The labor arbiter ordered the reinstatement of petitioners with award of backwages, 13th month pay and service incentive leave pay. The claim for moral and exemplary damages was denied for failure to establish bad faith on the part of respondents. All other claims were likewise denied. On appeal to the National Labor Relations Commission (NLRC), the decision of the labor arbiter was set aside.[6] Having entered into their employment contracts freely and voluntarily, they knew that their employment was only for a fixed period and would end on the prescribed expiration date. Petitioners' motion for reconsideration was denied.[7] In a petition for certiorari filed by petitioners, the CA set aside the NLRC decision and reinstated the decision of the labor arbiter.[8] However, on respondents' motion for reconsideration, the CA reversed itself. The CA reasoned that, while petitioners performed tasks which were necessary and desirable in the usual business of respondent company, their employment contracts providing for a fixed term remained valid. No force, duress, intimidation or moral dominance was exerted on them. Respondents dealt with petitioners in good faith and within the valid parameters of management prerogatives.[9] Petitioners' motion for reconsideration was denied.[10] Hence, this recourse. The petition is denied for lack of merit. The Labor Code 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 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. Where the duties of the employee consist of activities which are necessary or desirable in the usual business of the employer, the parties are not prohibited from

agreeing on the duration of employment. Article 280 does not proscribe or prohibit an employment contract with a fixed period[11] provided it is not intended to circumvent the security of tenure. Two criteria validate a contract of employment with a fixed period: (1) the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress or improper pressure being brought to bear on the employee and without any circumstances vitiating consent or, (2) 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 on the latter. [12] Against these criteria, petitioners' contracts of employment with a fixed period were valid. Each contract provided for an expiration date. Petitioners knew from the beginning that the employment offered to them was not permanent but only for a certain fixed period.[13] They were free to accept or to refuse the offer. When they expressed their acceptance, they bound themselves to the contract. In this case, there was no allegation of vitiated consent. Respondents did not exercise moral dominance over petitioners. The contracts were mutually advantageous to the parties. While respondents were able to augment increased demand in production by hiring petitioners on an as-needed basis, petitioners found gainful employment if only for a few months. Simply put, petitioners were not regular employees. While their employment as mixers, packers and machine operators was necessary and desirable in the usual business of respondent company, they were employed temporarily only, during periods when there was heightened demand for production. Consequently, there could have been no illegal dismissal when their services were terminated on expiration of their contracts. There was even no need for notice of termination because they knew exactly when their contracts would end. Contracts of employment for a fixed period terminate on their own at the end of such period.[14] Contracts of employment for a fixed period are not unlawful. What is objectionable is the practice of some scrupulous employers who try to circumvent the law protecting workers from the capricious termination of employment. Employers have the right and prerogative to choose their workers. "The law, while protecting the rights of the employees, authorizes neither the oppression nor destruction of the employer. When the law angles the scales of justice in favor of labor, the scale should never be so tilted if the result is an injustice to the employer."[15] WHEREFORE, the petition is hereby DENIED. The resolution of the Court of Appeals dated January 31, 2001 is AFFIRMED.

No costs. SO ORDERED. Puno, (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ., concur.

[1]

"Helen Varayuga" in some parts of the records.

[2]

In the motion for extension of time to file petition for review, Cecilia Buhay and Jhuliet Cenidoza were also named as petitioners but they were excluded in the petition for review.
[3]

Penned by Associate Justice Oswaldo Agcaoili and concurred in by Associate Justices Wenceslao I. Agnir, Jr. (now retired) and Jose L. Sabio, Jr. of the Special Former Fifth Division of the Court of Appeals; rollo, pp. 53-64.
[4]

Rollo, pp. 48-49. Penned by Labor Arbiter Pedro C. Ramos dated March 31, 1995; rollo, pp. 67-81.

[5]

[6]

Penned by Commissioner Vicente S.E. Veloso and concurred in by Presiding Commissioner Bartolome S. Carale and Commissioner Alberto R. Quimpo of the First Division, dated August 22, 1997; rollo, pp. 103-112.
[7]

Per curiam resolution of the First Division; rollo, pp. 120-125.

[8]

Penned by Associate Justice Oswaldo D. Agcaoili (now retired) and concurred in by Associate Justices Angelina Sandoval-Gutierrez (now Associate Justice of the Supreme Court) and Wenceslao I. Agnir, Jr. (now retired) of the Fifth Division of the Court of Appeals, dated September 12, 2000; rollo, pp. 189-201.
[9]

The assailed January 31, 2001 resolution. Dated May 7, 2001; rollo, p. 66.

[10]

[11]

Pangilinan v. General Milling Corporation, G.R. No. 149329, 12 July 2004, 434 SCRA 159.
[12]

Philippine National Oil Company Energy Development Corporation v. National Labor Relations Commission, G.R. No. 97747, 31 March 1993, 220 SCRA 695.

[13]

The duration of the contracts ranges from 3 months to 6 months. Supra at note 9. St. Theresa's School of Novaliches Foundation v. NLRC, 351 Phil. 1038 (1998).

[14]

[15]

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Petitioner RIC emphasizes that while an employee's status of employment is vested by law pursuant to Article 280 of the Labor Code, as amended, said provision of law admits of two exceptions, to wit: (1) those employments which have 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; and (2) when the work or services to be performed are seasonal; hence, the employment is for the duration of the season. Thus, there are certain forms of employment which entail the performance of usual and desirable functions and which exceed one year but do not necessarily qualify as regular employment under Article 280 of the Labor Code, as amended. The Petition is unmeritorious. A closer examination of Article 280 of the Labor Code, as amended, is imperative to resolve the issue raised in the present case. In declaring that respondent Taripe was a regular employee of the petitioner and, thus, his dismissal was illegal, the Court of Appeals ratiocinated in this manner: In determining the employment status of [herein respondent Taripe], reference must be made to Article 280 of the Labor Code, which provides: xxxx

Thus, there are 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. [Respondent Taripe] belonged to the first category of regular employees. The purported contract of employment providing that [respondent Taripe] was hired as contractual employee for five (5) months only, cannot prevail over the undisputed fact that [respondent Taripe] was hired to perform the function of power press operator, a function necessary or desirable in [petitioner's] business of manufacturing tin cans. [Herein petitioner RIC's] contention that the four (4) months length of service of [respondent Taripe] did not grant him a regular status is inconsequential, considering that length of service assumes importance only when the activity in which the employee has been engaged to perform is not necessary or desirable to the usual business or trade of the employer. As aptly ruled by [the NLRC]: "In the instant case, there is no doubt that [respondent Taripe], as power press operator, has been engaged to perform activities which are usually necessary or desirable in [petitioner RIC's] usual business or trade of manufacturing of tin cans for use in packaging of food, paint and others. We also find that [respondent Taripe] does not fall under any of the abovementioned exceptions. Other that (sic) [petitioner RIC's] bare allegation thereof, [it] failed to present any evidence to prove that he was employed for a fixed or specific project or undertaking the completion of which has been determined at the time of his engagement or that [respondent Taripe's] services are seasonal in nature and that his employment was for the duration of the season."[12] Article 280 of the Labor Code, as amended, provides: ART. 280. REGULAR AND CASUAL EMPLOYMENT. -The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of

service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. [Emphasis supplied] The aforesaid Article 280 of the Labor Code, as amended, classifies employees into three categories, namely: (1) regular employees or those whose work is necessary or desirable to the usual business 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 services 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.[13] Regular employees are further classified into: (1) regular employees by nature of work; and (2) regular employees by years of service.[14] The former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year.[15] The aforesaid Article 280 of the Labor Code, as amended, however, 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 nothing essentially contradictory between a definite period of employment and the nature of the employee's duties.[16] What Article 280 of the Labor Code, as amended, seeks to prevent is the practice of some unscrupulous and covetous employers who wish to circumvent the law that protects lowly workers from capricious dismissal from their employment. The aforesaid provision, however, should not be interpreted in such a way as to deprive employers of the right and prerogative to choose their own workers if they have sufficient basis to refuse an employee a regular status. Management has rights which should also be protected.
[17]

In the case at bar, respondent Taripe signed a contract of employment prior to his admission into the petitioner's company. Said contract of employment provides, among other things: 4. That my employment shall be contractual for the period of five (5) months which means that the end of the said period, I can (sic) discharged unless this contract is renewed by mutual consent or terminated for cause.[18] Based on the said contract, respondent Taripe's employment with the petitioner is good only for a period of five months unless the said contract is renewed by mutual

consent. And as claimed by petitioner RIC, respondent Taripe, along with its other contractual employees, was hired only to meet the increase in demand for packaging materials during the Christmas season and also to build up stock levels during the early part of the year. Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it must, nevertheless, meet any of the following guidelines in order that it cannot be said to circumvent security of tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon 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 (2) 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 on the latter.[19] In the present case, it cannot be denied that the employment contract signed by respondent Taripe did not mention that he was hired only for a specific undertaking, the completion of which had been determined at the time of his engagement. The said employment contract neither mentioned that respondent Taripe's services were seasonal in nature and that his employment was only for the duration of the Christmas season as purposely claimed by petitioner RIC. What was stipulated in the said contract was that respondent Taripe's employment was contractual for the period of five months. Likewise, as the NLRC mentioned in its Resolution, to which the Court of Appeals agreed, other than the bare allegations of petitioner RIC that respondent Taripe was hired only because of the increase in the demand for packaging materials during the Christmas season, petitioner RIC failed to substantiate such claim with any other evidence. Petitioner RIC did not present any evidence which might prove that respondent Taripe was employed for a fixed or specific project or that his services were seasonal in nature. Also, petitioner RIC failed to controvert the claim of respondent Taripe that he was made to sign the contract of employment, prepared by petitioner RIC, as a condition for his hiring. Such contract in which the terms are prepared by only one party and the other party merely affixes his signature signifying his adhesion thereto is called contract of adhesion.[20] It is an agreement in which the parties bargaining are not on equal footing, the weaker party's participation being reduced to the alternative "to take it or leave it."[21] In the present case, respondent Taripe, in need of a job, was compelled to agree to the contract, including the five-month period of employment, just so he could be hired. Hence, it cannot be argued that respondent Taripe signed the employment contract with a fixed term of five months willingly and with full knowledge of the impact thereof.

With regard to the second guideline, this Court agrees with the Court of Appeals that petitioner RIC and respondent Taripe cannot be said to have dealt with each other on more or less equal terms with no moral dominance exercised by the former over the latter. As a power press operator, a rank and file employee, he can hardly be on equal terms with petitioner RIC. As the Court of Appeals said, "almost always, employees agree to any terms of an employment contract just to get employed considering that it is difficult to find work given their ordinary qualifications."[22] Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid fixed term employment contract, it can be safely stated that the aforesaid contract signed by respondent Taripe for a period of five months was a mere subterfuge to deny to the latter a regular status of employment. Settled is the rule that the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the casual 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.[23] Given the foregoing, this Court agrees in the findings of the Court of Appeals and the NLRC that, indeed, respondent Taripe, as a rectangular power press machine operator, in charge of manufacturing covers for "four liters rectangular tin cans," was holding a position which is necessary and desirable in the usual business or trade of petitioner RIC, which was the manufacture of tin cans. Therefore, respondent Taripe was a regular employee of petitioner RIC by the nature of work he performed in the company. Respondent Taripe does not fall under the exceptions mentioned in Article 280 of the Labor Code, as amended, because it was not proven by petitioner RIC that he was employed only for a specific project or undertaking or his employment was merely seasonal. Similarly, the position and function of power press operator cannot be said to be merely seasonal. Such position cannot be considered as only needed for a specific project or undertaking because of the very nature of the business of petitioner RIC. Indeed, respondent Taripe is a regular employee of petitioner RIC and as such, he cannot be dismissed from his employment unless there is just or authorized cause for his dismissal. Well-established is the rule that regular employees enjoy security of tenure and they can only be dismissed for just cause and with due process, notice and hearing. [24] And in case of employees' dismissal, the burden is on the employer to prove that the dismissal was legal. Thus, respondent Taripe's summary dismissal, not being based on any of the just or authorized causes enumerated under Articles 282,[25]

283,[26] and 284[27] of the Labor Code, as amended, is illegal. Before concluding, we once more underscore the settled precept that factual findings of the NLRC, having deemed to acquire expertise in matters within its jurisdiction, are generally accorded not only respect but finality especially when such factual findings are affirmed by the Court of Appeals;[28] hence, such factual findings are binding on this Court. WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 30 September 2004 and 1 April 2005, respectively, which affirmed with modification the Resolutions of the NLRC dated 7 June 2002 and 20 August 2002, respectively, finding herein respondent Taripe as a regular employee who had been illegally dismissed from employment by petitioner RIC, are hereby AFFIRMED. Costs against petitioner RIC. SO ORDERED. Ynares-Santiago, Austria-Martinez, and Nachura, JJ., concur. Callejo, Sr., J., on leave.

[1]

Penned by Associate Justice Fernanda Lampas Peralta with Associate Justices Conrado M. Vasquez, Jr. and Josefina Guevara-Salonga, concurring, rollo, pp. 1727.
[2]

Id. at 28.

[3]

Penned by Commissioner Victoriano R. Calaycay with Presiding Commissioner Raul T. Aquino and Commissioner Angelita A. Gacutan, concurring, id. at 36-48; NLRC Records, pp. 147-148.
[4]

Penned by Labor Arbiter Natividad M. Roma, id. at 29-35. Id. at 18-19. Id. at 35. Id. at 45-46. Id. at 21.

[5]

[6]

[7]

[8]

[9]

Id. at 26. Supra note 2. Rollo, pp. 98-104. Id. at 22-23.

[10]

[11]

[12]

[13]

Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004, 434 SCRA 159, 169.
[14]

E. Ganzon, Inc. vs. National Labor Relations Commission, G.R. No. 123769, 22 December 1999, 321 SCRA 434, 440.
[15]

Pangilinan vs. General Milling Corporation, supra note 13 at 169-170. Id. at 170.

[16]

[17]

Pantranco North Express, Inc. vs. NLRC, G.R. No. 106654, 16 December 1994, 239 SCRA 272, 279.
[18]

CA rollo, p. 27.

[19]

Philippine National Oil Co.-Energy Dev't. Corp. vs. NLRC, G.R. No. 97747, 31 March 1993, 220 SCRA 695, 699.
[20]

Fabrigas vs. San Francisco del Monte, Inc., G.R. No. 152346, 25 November 2005, 476 SCRA 247, 263.
[21]

Qua Chee Gan vs. Law Union and Rock Insurance Co., Ltd., 98 Phil. 85, 95 (1955).
[22]

Rollo, p. 25.

[23]

Lopez vs. Metropolitan Waterworks and Sewerage System, G.R. No. 154472, 30 June 2005, 462 SCRA 428, 453.
[24]

Philippine Amusement and Gaming Corporation vs. Angara, G.R. No. 142937, 15 November 2005, 475 SCRA 41, 61.
[25]

ART. 282. TERMINATION BY EMPLOYER. - An employer may terminate an

employment for any of the following causes. (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representatives; (d) Commission