G.R. No. 149440. January 28, 2003.*
HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE
SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD
AND GENERAL TRADE, respondents.
Labor Law; Employment; Regular Employee; Definition.[T]he test of whether or
not an employee is a regular employee has been laid down in De Leon v. NLRC, in
which this Court held: The primary standard, therefore, of determining regular
employment is the reasonable connection between the particular activity performed
by the employee in relation to the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the usual trade or business of
the employer. The connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular business or trade in
its entirety. Also if the employee has been performing the job for at least a year, even
if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while
such activity exists. x x x x x x x x x x x x [T]he fact that [respondents] do not work
continuously for one whole year but only for the duration of the x x x season does not
detract from considering them in regular employment since in a litany of cases this
Court has already settled that seasonal workers who are called to work from time to
time and are temporarily laid off during off-season are not separated from service in
said period, but merely considered on leave until re-employed.
Same; Same; Same; Dismissals; The burden is on the employer to prove that the
termination was for a valid and authorized cause.Where there is no showing of
clear, valid and legal cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer to prove that the
termination was for a valid and authorized cause. In the case at bar, petitioners
failed to prove any such cause for the dismissal of respondents who, as discussed
above, are regular employees.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was
seasonal in nature, they failed to prove that the latter worked only for the duration of
one particular season. In fact, petitioners do not deny that these workers have served
them for several years already. Hence, they are regularnot seasonalemployees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking
to set aside the February 20, 2001 Decision of the Court of Appeals1 (CA) in CA-GR SP
No. 51033. The dispositive part of the Decision reads:
WHEREFORE, premises considered, the instant special civil action for certiorari is
hereby DENIED.
On the other hand, the National Labor Relations Commission (NLRC) Decision, upheld
by the CA, disposed in this wise:
WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET
ASIDE and VACATED and a new one entered declaring complainants to have been
illegally dismissed. Respondents are hereby ORDERED to reinstate complainants
except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their
previous position and to pay full backwages from September 1991 until reinstated.
Respondents being guilty of unfair labor practice are further ordered to pay
complainant union the sum of P10,000.00 as moral damages and P5,000.00 as
exemplary damages.4
The Facts
Contrary to the findings of the Labor Arbiter that complainants [herein respondents]
refused to work and/or were choosy in the kind of jobs they wanted to perform, the
records is replete with complainants persistence and dogged determination in going
back to work.
Indeed, it would appear that respondents did not look with favor workers having
organized themselves into a union. Thus, when complainant union was certified as
the collective bargaining representative in the certification elections, respondents
under the pretext that the result was on appeal, refused to sit down with the union
for the purpose of entering into a collective bargaining agreement. Moreover, the
workers including complainants herein were not given work for more than one
month. In protest, complainants staged a strike which was however settled upon the
signing of a Memorandum of Agreement which stipulated among others that:
a) The parties will initially meet for CBA negotiations on the 11th day of January 1991
and will endeavor to conclude the same within thirty (30) days.
b) The management will give priority to the women workers who are members of
the union in case work relative x x x or amount[ing] to gahit and [dipol] arises.
c) Ariston Eruela, Jr. will be given back his normal work load which is six (6) days in a
week.
d) The management will provide fifteen (15) wagons for the workers and that
existing workforce prior to the actual strike will be given priority. However, in case
the said workforce would not be enough, the management can hire additional
workers to supplement them.
e) The management will not anymore allow the scabs, numbering about eighteen
(18) workers[,] to work in the hacienda; and
f) The union will immediately lift the picket upon signing of this agreement.
However, alleging that complainants failed to load the fifteen wagons, respondents
reneged on its commitment to sit down and bargain collectively. Instead, respondent
employed all means including the use of private armed guards to prevent the
organizers from entering the premises.
Moreover, starting September 1991, respondents did not any more give work
assignments to the complainants forcing the union to stage a strike on January 2,
1992. But due to the conciliation efforts by the DOLE, another Memorandum of
Agreement was signed by the complainants and respondents which provides:
Whereas the union staged a strike against management on January 2, 1992
grounded on the dismissal of the union officials and members;
Whereas parties to the present dispute agree to settle the case amicably once and
for all;
Now therefore, in the interest of both labor and management, parties herein agree
as follows:
1. That the list of the names of affected union members hereto attached and made
part of this agreement shall be referred to the Hacienda payroll of 1990 and
determine whether or not this concerned Union members are hacienda workers;
2. That in addition to the payroll of 1990 as reference, herein parties will use as guide
the subjects of a Memorandum of Agreement entered into by and between the
parties last January 4, 1990;
3. That herein parties can use other employment references in support of their
respective claims whether or not any or all of the listed 36 union members are
employees or hacienda workers or not as the case may be;
4. That in case conflict or disagreement arises in the determination of the status of
the particular hacienda workers subject of this agreement herein parties further
agree to submit the same to voluntary arbitration;
5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby
created to be composed of three representatives each and is given five working days
starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers. (Union
representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea, Jr.)
Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation
Meeting showed as follows:
The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko
based on who received their 13th month pay. The following are deemed not
considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
The name Orencio Rombo shall be verified in the 1990 payroll.
The following employees shall be reinstated immediately upon availability of work:
When respondents again reneged on its commitment, complainants filed the
present complaint.
But for all their persistence, the risk they had to undergo in conducting a strike in
the face of overwhelming odds, complainants in an ironic twist of fate now find
themselves being accused of refusing to work and being choosy in the kind of work
they have to perform. 5 (Citations omitted)
The CA affirmed that while the work of respondents was seasonal in nature, they
were considered to be merely on leave during the off-season and were therefore still
employed by petitioners. Moreover, the workers enjoyed security of tenure. Any
infringement upon this right was deemed by the CA to be tantamount to illegal
dismissal.
The appellate court found neither rhyme nor reason in petitioners argument that it
was the workers themselves who refused to or were choosy in their work. As found
by the NLRC, the record of this case is replete with complainants persistence and
dogged determination in going back to work.6
The CA likewise concurred with the NLRCs finding that petitioners were guilty of
unfair labor practice.
Hence this Petition.7
Issues
Petitioners raise the following issues for the Courts consideration:
A. Whether or not the Court of Appeals 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.
B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, x x
x, and relying instead on rulings which are not directly applicable to the case at
bench, viz., Philippine Tobacco, BacolodMurcia, and Gaco, x x x.
C. Whether or not the Court of Appeals committed grave abuse of discretion in
upholding the NLRCs conclusion that private respondents were illegally dismissed,
that petitioner[s were] guilty of unfair labor practice, and that the union be awarded
moral and exemplary damages.8
Consistent with the discussion in petitioners Memorandum, we shall take up Items A
and B as the first issue and Item C as the second.
The Courts Ruling
The Petition has no merit.
First Issue: Regular Employment
At -the outset, we must stress that only errors of law are generally reviewed by this
Court in petitions for review on certiorari of CA decisions. Questions of fact are not
entertained. The Court is not a trier of facts and, in labor cases, this doctrine applies
with greater force. Factual questions are for labor tribunals to resolve. In the present
case, these have already been threshed out by the NLRC. Its findings were affirmed
by the appellate court.
Contrary to petitioners contention, the CA did not err when it held that respondents
were regular employees.
Article 280 (now 295) of the Labor Code, as amended, states:
Art. 280. Regular and Casual Employment.The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exist. (Italics supplied)
For respondents to be excluded from those classified as regular employees, it is not
enough that they perform work or services that are seasonal in nature. They must
have also been employed only for the duration of one season. The evidence proves
the existence of the first, but not of the second, condition. The fact that
respondentswith the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga
and Boboy Silvarepeatedly worked as sugarcane workers for petitioners for several
years is not denied by the latter. Evidently, petitioners employed respondents for
more than one season. Therefore, the general rule of regular employment is
applicable.
In Abasolo v. National Labor Relations Commission,13 the Court issued this
clarification:
[T]he test of whether or not an employee is a regular employee has been laid down
in De Leon v. NLRC, in which this Court held:
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual trade or business of the
employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least a year, even if
the performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity and while such activity exists.
x x x [T]he fact that [respondents] do not work continuously for one whole year but
only for the duration of the x x x season does not detract from considering them in
regular employment since in a litany of cases this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily laid
off during off-season are not separated from service in said period, but merely
considered on leave until re-employed.
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the
case at bar. In the earlier case, the workers were required to perform phases of
agricultural work for a definite period of time, after which their services would be
available to any other farm owner. They were not hired regularly and repeatedly for
the same phase/s of agricultural work, but on and off for any single phase thereof. On
the other hand, herein respondents, having performed the same tasks for petitioners
every season for several years, are considered the latters regular employees for their
respective tasks. Petitioners eventual refusal to use their serviceseven if they were
ready, able and willing to perform their usual duties whenever these were available
and hiring of other workers to perform the tasks originally assigned to respondents
amounted to illegal dismissal of the latter.
The Court finds no reason to disturb the CAs dismissal of what petitioners claim was
their valid exercise of a management prerogative. The sudden changes in work
assignments reeked of bad faith. These changes were implemented immediately after
respondents had organized themselves into a union and started demanding
collective bargaining. Those who were union members were effectively deprived of
their jobs. Petitioners move actually amounted to unjustified dismissal of
respondents, in violation of the Labor Code.
Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden
is on the employer to prove that the termination was for a valid and authorized
cause.16 In the case at bar, petitioners failed to prove any such cause for the
dismissal of respondents who, as discussed above, are regular employees.
Second Issue: Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as
follows:
Indeed, from respondents refusal to bargain, to their acts of economic inducements
resulting in the promotion of those who withdrew from the union, the use of armed
guards to prevent the organizers to come in, and the dismissal of union officials and
members, one cannot but conclude that respondents did not want a union in their
haciendaa clear interference in the right of the workers to self-organization.
We uphold the CAs affirmation of the above findings. Indeed, factual findings of
labor officials, who are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality.
Their findings are binding on the Supreme Court.18 Verily, their conclusions are
accorded great weight upon appeal, especially when supported by substantial
evidence.19 Consequently, the Court is not duty-bound to delve into the accuracy of
their factual findings, in the absence of a clear showing that these were arbitrary and
bereft of any rational basis.20
The finding of unfair labor practice done in bad faith carries with it the sanction of
moral and exemplary damages.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.
SO ORDERED.
Puno (Chairman), Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.
Petition denied, judgment affirmed.
Note.Just because a worker was, for short periods of time, hired on pakyaw basis
does not necessarily mean that he was not employed to do other tasks for the
remainder of the year. (SSS vs. CA, 348 SCRA 1 [2000])
G.R. No. 100518. January 24, 2000.*
ASSOCIATION OF TRADE UNIONS (ATU), RODOLFO MONTECLARO and EDGAR
JUESAN, petitioners, vs. HON. COMMISSIONERS OSCAR N. ABELLA, MUSIB N. BUAT,
LEON GONZAGA, JR., ALGON ENGINEERING CONSTRUCTION CORP., ALEX GONZALES
and EDITHA YAP, respondents.
Same; Employer-Employee Relationships; Words and Phrases; Regular Employees,
and Project Employees, Explained.Regular employees are those who have been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer even if the parties enter into an agreement stating
otherwise. In contrast, project employees are 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.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Antonio A. Billones, Sr. for petitioners.
Libron, Gaspar & Associates for private respondents.
QUISUMBING, J.:
This special civil action for certiorari under Rule 65 of the Rules of Court assails the
resolution of the National Labor Relations Commission promulgated on May 17,
1991, which modified the decision of the labor arbiter.
Respondent company is a domestic corporation engaged in road construction
projects of the government. From 1968 to 1989, it engaged the services of workers to
work on various projects on different dates. Their contracts indicate the particular
project they are assigned, the duration of their employment and their daily wage.
In February 1989, the above-named workers joined petitioner union as members.
Accordingly, petitioner union filed a petition for certification election with the
regional office of the labor department. Respondent company opposed the petition
on the ground that the workers were project employees and therefore not qualified
to form part of the rank and file collective bargaining unit. Not for long, the Med-
Arbiter dismissed the petition for certification election. On appeal, the Secretary of
Labor and Employment reversed the Med-Arbiters decision and ordered the
immediate holding of a certification election.
Meanwhile, the national president of petitioner union sent a demand letter to
respondent company seeking the payment of wage differentials to some affected
union members. As said demand was unheeded, petitioner union and the concerned
workers filed a complaint for payment of wage differentials and other benefits before
the Regional Office of the Department of Labor and Employment.
Meanwhile, the aggrieved workers filed with the Regional Arbitration Branch of the
NLRC their individual complaints against private respondent company for illegal
dismissal, unfair labor practice, underpayment of wages, 13th month pay, holiday pay
and overtime pay. They also sought reinstatement with back wages. The cases were
consolidated and assigned to Labor Arbiter Nicolas Sayon for arbitration. However,
noting that a similar case had been filed before the regional office of the labor
department, the labor arbiter refrained from resolving the issue of underpayment of
monetary benefits. He also found the charge of unfair labor practice untenable. But,
on the charge of illegal dismissal, he ruled on October 31, 1989, as follows:
WHEREFORE in view of the foregoing, judgment is hereby rendered declaring the
dismissal of the following complainants illegal; namely:
1. Victorio C. Lunzaga
2. Julito C. Macabodbod
3. Alfredo E. Jalet
4. Gerundio F. Asejo

Shortly thereafter, respondent company terminated the employment of 5. Ramon R. Tabada

aforementioned workers owing to the completion of its projects or the expiration of
Respondent ALGON Engineering Construction Corporation and Alex Gonzales and
workers contracts. Respondent company explained the circumstances surrounding
Edith Yap, are hereby ordered to reinstate the above-named complainants to their
the separation of the workers from the service as follows:
former positions without loss of seniority rights plus six months backwages based on
However, the affected workers claim that they were dismissed because of their union their latest salary rate at the time of their dismissal, which is P65.00 per day
activities. In view of the alleged illegal dismissals and harassment by their employer, equivalent to monthly rate of P1,700.83, a total of P10,204.99 per complainant or in
the workers staged a strike on May 17, 1989. Upon complaint of respondent the total amount of P51,024.95.
company, Labor Arbiter Newton Sancho declared said strike illegal and decreed
The case of illegal dismissal filed by Armand Acero, Lordito Tatad, Teodoro Tabio,
further that Victorio Lunzaga, Alfred Jalet, Julito Macabodbod, Ramon Tabada and
Ramon Olivar, Valeriano Miyas, Jose Noval, Felimon Lagbao, Pedro Roche, Remsy
Remsy Asensi, who had participated in the strike, were deemed to have lost their
Asensi, Rodolfo Monteclaro, Edgar Juesan and Justiniano Sollano are hereby ordered
employment status.
dismissed for lack of merit.
On appeal, the National Labor Relations Commission affirmed said decision.
SO ORDERED.7
Petitioner union then elevated the matter to this Court by way of petition for
certiorari which was eventually dismissed.
Petitioners and private respondents separately appealed the Labor Arbiters ruling to
the National Labor Relations Commission.
On May 17, 1991, the NLRC promulgated its resolution modifying the decision of
Labor Arbiter Nicolas Sayon. It held that the labor arbiter erred in not resolving the
issue of underpayment of wages because not all of the original complainants filed the
same money claims with the labor department.8 Thus, it awarded monetary benefits
(wage differentials and 13th month pay) to qualified workers. The NLRC disposed of
the case as follows:
2. The complaints of Edgar Juezon (sic), Lordito Tadtad and Ramon Tabada are
hereby dismissed as prayed for by said complainants.
3. The complainants for illegal dismissal filed by Victorio Lunzaga (Lonzaga) and
Alfredo Jalet (Jalit) are hereby dismissed for having been rendered moot and
academic by Our decision in Case No. RAB-11-05-00352-89.
4. The complaints of Macabodbod and Asejo for illegal dismissal are hereby
DISMISSED for lack of merit.
5. The charge of unfair labor practice is hereby dismissed for lack of merit.
respondents. Here, the plain and adequate remedy expressly provided by law was a
motion for reconsideration of the impugned resolution, based on palpable or patent
errors, to be made under oath and filed within ten (10) days from receipt of the
questioned resolution of the NLRC, a procedure which is jurisdictional. Further, it
should be stressed that without a motion for reconsideration seasonably filed within
the ten-day reglementary period, the questioned order, resolution or decision of
NLRC, becomes final and executory after ten (10) calendar days from receipt thereof.
Moreover, even if procedural lapses were to be set aside, we find no cogent reason
sufficient to justify a departure from public respondents decision, as hereafter
elucidated.
In this recourse, petitioners impute the following errors on the part of public
respondent:
[I]
THAT THE HONORABLE COMMISSION ERRED IN HOLDING THAT THE DISMISSAL OF
FIVE COMPLAINANTS WERE JUSTIFIED IN VIEW OF THE FACT THAT THEIR COMPLAINT
HAVE BEEN RENDERED MOOT AND ACADEMIC BY ITS DECISION IN CASE NO. RAB-05-
00353-89.

SO ORDERED.9 [II]

As noted by the Solicitor General, private respondents filed their motion for THAT HONORABLE COMMISSION AGAIN ERRED IN DISMISSING THE COMPLAINT OF
reconsideration, which was denied. We find, however, that herein petitioners did not THE COMPLAINANTS MACABODBOD AND ASEJO FOR LACK OF MERIT.
move for reconsideration, as the petition did not so indicate and none appears on the
[III]
records before us.
THE HONORABLE COMMISSION SERIOUSLY ERRED IN AFFIRMING THE DECISION OF
Filing a petition for certiorari under Rule 65 without first moving for reconsideration
THE LABOR ARBITER DISMISSING PETITIONERS CHARGE OF UNFAIR LABOR PRACTICE
of the assailed resolution generally warrants the petitions outright dismissal. As we
AGAINST THE RESPONDENT CORPORATION.
consistently held in numerous cases, a motion for reconsideration by a concerned
party is indispensable for it affords the NLRC an opportunity to rectify errors or [IV]
mistakes it might have committed before resort to the courts can be had.
QUESTION OF LAW.15
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy
In petitions for certiorari under Rule 65 of the Rules of Court, it may be noted that
and adequate remedy in the ordinary course of law against acts of public
want of jurisdictionand grave abuse of discretion,16 and not merely
reversible error, are the proper grounds for review. The respondent acts without
jurisdiction if he does not have the legal authority to decide a case. There is excess of
jurisdiction if the respondent, having the power to determine the case, oversteps his
lawful authority. And there is grave abuse of discretion where the respondent acts in
a capricious, whimsical, arbitrary or despotic manner, in effect equivalent to lack of
jurisdiction.17 Here, petitioners neither assail the jurisdiction of public respondent
nor attribute any grave abuse of discretion on the part of the labor tribunal.
Necessarily, this petition must fail, for lack of substantial requisites under Rule 65.
Nevertheless, if only to cast aside all doubts for the benefit of the concerned workers,
we assayed into the merits of the case. As properly stated by the Solicitor General,
the point of inquiry here is whether petitioners are regular or project employees of
respondent company.
The Labor Code defines regular, project and casual employees as follows:
ART. 280. Regular and Casual EmploymentThe 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.
And 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.(Italics supplied.)
Thus, regular employees are those who have been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the
employer even if the parties enter into an agreement stating otherwise.18 In
contrast, project employees are 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.19
Furthermore, Policy Instruction No. 20, which was in force during the period of
petitioners employment, stated:
Project employees are those employed in connection with a particular construction
project. Non-project (regular) employees are those employed by a construction
company without reference to any particular project.
Project employees are not entitled to termination pay if they are terminated as a
result of the completion of the project or any phase thereof in which they are
employed, regardless of the number of projects in which they have been employed
by a particular construction company. Moreover, the company is not required to
obtain clearance from the Secretary of Labor in connection with such termination.
What is required of the company is report to the nearest Public Employment Office
for statistical purposes.
In the case at bar, the contracts of employment of the petitioners attest to the fact
that they had been hired for specific projects, and their employment was
coterminous with the completion of the project for which they had been hired. Said
contracts expressly provide that the workers tenure of employment would depend
on the duration of any phase of the project or the completion of the awarded
government construction projects in any of their planned phases. Further, petitioners
were informed in advance that said project or undertaking for which they were hired
would end on a stated or determinable date. Besides, public respondent noted that
respondent company regularly submitted reports of termination of services of project
workers to the regional office of the labor department as required under Policy
Instruction No. 20. This compliance with the reportorial requirement confirms that
petitioners were project employees.
Considering that petitioners were project employees, whose nature of employment
they were fully informed about, at the time of their engagement, related to a specific
project, work or undertaking, their employment legally ended upon completion of
said project. The termination of their employment could not be regarded as illegal
dismissal.
WHEREFORE, the instant petition is DISMISSED, and the assailed RESOLUTION of
respondent NLRC dated May 17, 1991, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Bellosillo (Chairman), Mendoza, Buena and De Leon, Jr., JJ., concur.
Petition dismissed, resolution affirmed.
G.R. No. 164156. September 26, 2006.*
ABS-CBN BROADCASTING CORPORATION, petitioner, vs. MARLYN NAZARENO,
MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN, respondents.
Same; Broadcast Industry; Regular Employees; Project Employees; While the question
of whether respondents are regular or project employees or independent contractors
is essentially factual in nature, the Court is constrained to resolve it due to its
tremendous effects on the legions of production assistants working in the Philippine
broadcasting industry.Case law is that this Court has always accorded respect and
finality to the findings of fact of the CA, particularly if they coincide with those of the
Labor Arbiter and the National Labor Relations Commission, when supported by
substantial evidence. The question of whether respondents are regular or project
employees or independent contractors is essentially factual in nature; nonetheless,
the Court is constrained to resolve it due to its tremendous effects to the legions of
production assistants working in the Philippine broadcasting industry. We agree with
respondents contention that where a person has rendered at least one year of
service, regardless of the nature of the activity performed, or where the work is
continuous or intermittent, the employment is considered regular as long as the
activity exists, the reason being that a customary appointment is not indispensable
before one may be formally declared as having attained regular status. Article 280 of
the Labor Code 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.
Same; Same; Same; Same; Respondents cannot be considered talents because they
are not actors or actresses or radio specialists or mere clerks or utility employees
they are regular employees who perform several different duties under the control
and direction of the broadcast company executives and supervisors.It is of no
moment that petitioner hired respondents as talents. The fact that respondents
received pre-agreed talent fees instead of salaries, that they did not observe the
required office hours, and that they were permitted to join other productions during
their free time are not conclusive of the nature of their employment. Respondents
cannot be considered talents because they are not actors or actresses or radio
specialists or mere clerks or utility employees. They are regular employees who
perform several different duties under the control and direction of ABS-CBN
executives and supervisors.
Same; Same; Same; Same; There are two kinds of regular employees under the law
(1) those engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer, and, (2) those casual employees who have
rendered at least one year of service, whether continuous or broken, with respect to
the activities in which they are employed. The law overrides such conditions which
are prejudicial to the interest of the worker whose weak bargaining situation
necessitates the succor of the State. What determines whether a certain employment
is regular or otherwise is not the will or word of the employer, to which the worker
oftentimes acquiesces, much less the procedure of hiring the employee or the
manner of paying the salary or the actual time spent at work. It is the character of the
activities performed in relation to the particular trade or business taking into account
all the circumstances, and in some cases the length of time of its performance and its
continued existence. It is obvious that one year after they were employed by
petitioner, respondents became regular employees by operation of law.
Same; Same; Same; Same; Words and Phrases; Under existing jurisprudence,
project could refer to two distinguishable types of activitiesfirst, a project may
refer to a particular job or undertaking that is within the regular or usual business of
the employer, but which is distinct and separate, and identifiable as such, from the
other undertaking of the company, and second, the term project may also refer to a
particular job or undertaking that is not within the regular business of the
employer.Respondents cannot be considered as project or program employees
because no evidence was presented to show that the duration and scope of the
project were determined or specified at the time of their engagement. The principal
test is whether or not the project employees were assigned to carry out a specific
project or undertaking, the duration and scope of which were specified at the time
the employees were engaged for that project.
Same; Same; Same; Same; While length of time may not be a sole controlling test for
project employment, it can be a strong factor to determine whether the employee
was hired for a specific undertaking or in fact tasked to perform functions which are
vital, necessary and indispensable to the usual trade or business of the employer.It
is undisputed that respondents had continuously performed the same activities for
an average of five years. Their assigned tasks are necessary or desirable in the usual
business or trade of the petitioner. The persisting need for their services is sufficient
evidence of the necessity and indispensability of such services to petitioners business
or trade. We note further that petitioner did not report the termination of
respondents employment in the particular project to the Department of Labor and
Employment Regional Office having jurisdiction over the workplace within 30 days
following the date of their separation from work, using the prescribed form on
employees termination/dismissals/suspensions.
Same; Same; Same; Same; Program employees, or project employees, are different
from independent contractors because in the case of the latter, no employer-
employee relationship exists.As gleaned from the records of this case, petitioner
itself is not certain how to categorize respondents. In its earlier pleadings, petitioner
classified respondents as program employees, and in later pleadings, independent
contractors. Program employees, or project employees, are different from
independent contractors because in the case of the latter, no employer-employee
relationship exists.
Same; Same; Same; Same; The presumption is that when the work done is an integral
part of the regular business of the employer and when the worker, relative to the
employer, does not furnish an independent business or professional service, such work
is a regular employment of such employee and not an independent contractor. The
Court will peruse beyond any such agreement to examine the facts that typify the
parties actual relationship.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
De Mesa, Zaballero & Partners Law Offices for petitioner.
Amorito V. Caete for respondents.
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Decision1 of the Court of
Appeals (CA) in CA-G.R. SP No. 76582 and the Resolution denying the motion for
reconsideration thereof. The CA affirmed the Decision and Resolution of the National
Labor Relations Commission (NLRC) in NLRC Case No. V-000762-2001 (RAB Case No.
VII-10-1661-2001) which likewise affirmed, with modification, the decision of the
Labor Arbiter declaring the respondents Marlyn Nazareno, Merlou Gerzon, Jennifer
Deiparine and Josephine Lerasan as regular employees.
The Antecedents
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the
broadcasting business and owns a network of television and radio stations, whose
operations revolve around the broadcast, transmission, and relay of
telecommunication signals. It sells and deals in or otherwise utilizes the airtime it
generates from its radio and television operations. It has a franchise as a
broadcasting company, and was likewise issued a license and authority to operate by
the National Telecommunications Commission.
Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as
production assistants (PAs) on different dates. They were assigned at the news and
public affairs, for various radio programs in the Cebu Broadcasting Station, with a
monthly compensation of P4,000. They were issued ABS-CBN employees
identification cards and were required to work for a minimum of eight hours a day,
including Sundays and holidays. They were made to perform the following tasks and
duties:
a) Prepare, arrange airing of commercial broadcasting based on the daily operations
log and digicart of respondent ABS-CBN;
b) Coordinate, arrange personalities for air interviews;
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-
in or incoming reports;
d) Facilitate, prepare and arrange airtime schedule for public service announcement
and complaints;
e) Assist, anchor program interview, etc.; and
f) Record, log clerical reports, man based control radio.
The PAs were under the control and supervision of Assistant Station Manager Dante
J. Luzon, and News Manager Leo Lastimosa.
On December 19, 1996, petitioner and the ABS-CBN Rank-and File Employees
executed a Collective Bargaining Agreement (CBA) to be effective during the period
from December 11, 1996 to December 11, 1999. However, since petitioner refused to
recognize PAs as part of the bargaining unit, respondents were not included to the
CBA.
On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing
the PAs that effective August 1, 2000, they would be assigned to non-drama
programs, and that the DYAB studio operations would be handled by the studio
technician. Thus, their schedule were revised and other assignments were given.
Respondent Gerzon was assigned as the full-time PA of the TV News Department
reporting directly to Leo Lastimosa.
On October 12, 2000, respondents filed a Complaint for Recognition of Regular
Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay,
Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the
petitioner before the NLRC. The Labor Arbiter directed the parties to submit their
respective position papers. Upon respondents failure to file their position papers
within the reglementary period, Labor Arbiter Jose G. Gutierrez issued an Order
dated April 30, 2001, dismissing the complaint without prejudice for lack of interest
to pursue the case. Respondents received a copy of the Order on May 16, 2001.
Instead of re-filing their complaint with the NLRC within 10 days from May 16, 2001,
they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with Motion to
Admit Position Paper and Motion to Submit Case For Resolution. The Labor Arbiter
granted this motion in an Order dated June 18, 2001, and forthwith admitted the
position paper of the complainants. Respondents made the following allegations:
1. Complainants were engaged by respondent ABS-CBN as regular and full-time
employees for a continuous period of more than five (5) years with a monthly salary
rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this
complaint on November 20, 2000.
Machine copies of complainants ABS-CBN Employees Identification Card and salary
vouchers are hereto attached.
Respondents insisted that they belonged to a work pool from which petitioner
chose persons to be given specific assignments at its discretion, and were thus under
its direct supervision and control regardless of nomenclature. They prayed that
judgment be rendered in their favor, thus:
WHEREFORE, premises considered, this Honorable Arbiter is most respectfully
prayed, to issue an order compelling defendants to pay complainants the following:
1. One Hundred Thousand Pesos (P100,000.00) each and by way of moral damages;
2. Minimum wage differential;
3. Thirteenth month pay differential;
4. Unpaid service incentive leave benefits;
5. Sick leave;
6. Holiday pay;
7. Premium pay;
8. Overtime pay;
9. Night shift differential.
Complainants further pray of this Arbiter to declare them regular and permanent
employees of respondent ABS-CBN as a condition precedent for their admission into
the existing union and collective bargaining unit of respondent company where they
may as such acquire or otherwise perform their obligations thereto or enjoy the
benefits due therefrom.
For its part, petitioner alleged in its position paper that the respondents were PAs
who basically assist in the conduct of a particular program ran by an anchor or talent.
Among their duties include monitoring and receiving incoming calls from listeners
and field re-porters and calls of news sources; generally, they perform leg work for
the anchors during a program or a particular production. They are considered in the
industry as program employees in that, as distinguished from regular or station
employees, they are basically engaged by the station for a particular or specific
program broadcasted by the radio station. Petitioner asserted that as PAs, the
complainants were issued talent information sheets which are updated from time to
time, and are thus made the basis to determine the programs to which they shall
later be called on to assist.
Petitioner maintained that PAs, reporters, anchors and talents occasionally sideline
for other programs they produce, such as drama talents in other productions. As
program employees, a PAs engagement is coterminous with the completion of the
program, and may be extended/renewed provided that the program is on-going; a PA
may also be assigned to new programs upon the cancellation of one program and the
commencement of another. As such program employees, their compensation is
computed on a program basis, a fixed amount for performance services irrespective
of the time consumed. At any rate, petitioner claimed, as the payroll will show,
respondents were paid all salaries and benefits due them under the law.
Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA
and interpret the same, especially since respondents were not covered by the
bargaining unit.
On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents,
and declared that they were regular employees of petitioner; as such, they were
awarded monetary benefits plus ten (10%) percent Attorneys Fees or a TOTAL
aggregate amount of PESOS: FIFTY TWO THOUSAND NINE HUNDRED TEN
(P52,910.00).
SO ORDERED.13
However, the Labor Arbiter did not award money benefits as provided in the CBA on
his belief that he had no jurisdiction to interpret and apply the agreement, as the
same was within the jurisdiction of the Voluntary Arbitrator as provided in Article 261
of the Labor Code. Respondents counsel received a copy of the decision on August
29, 2001. Respondent Nazareno received her copy on August 27, 2001, while the
other respondents received theirs on September 8, 2001. Respondents signed and
filed their Appeal Memorandum on September 18, 2001.
For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter
denied and considered as an appeal, conformably with Section 5, Rule V, of the NLRC
Rules of Procedure. Petitioner forthwith appealed the decision to the NLRC, while
respondents filed a partial appeal.
In its appeal, petitioner alleged the following:
1. That the Labor Arbiter erred in reviving or re-opening this case which had long
been dismissed without prejudice for more than thirty (30) calendar days;
2. That the Labor Arbiter erred in depriving the respondent of its Constitutional right
to due process of law;
3. That the Labor Arbiter erred in denying respondents Motion for Reconsideration
on an interlocutory order on the ground that the same is a prohibited pleading;
4. That the Labor Arbiter erred when he ruled that the complainants are regular
employees of the respondent;
5. That the Labor Arbiter erred when he ruled that the complainants are entitled to
13th month pay, service incentive leave pay and salary differential; and
6. That the Labor Arbiter erred when he ruled that complainants are entitled to
attorneys fees.14
On November 14, 2002, the NLRC rendered judgment modifying the decision of the
Labor Arbiter. The fallo of the decision reads:
WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez
dated 30 July 2001 is SET ASIDE and VACATED and a new one is entered ORDERING
respondent ABS-CBN Broadcasting Corporation, as follows:
1. To pay complainants of their wage differentials and other benefits arising from the
CBA as of 30 September 2002 in the aggregate amount of P2,561,948.22;
2. To deliver to the complainants 233 sacks of rice as of 30 September 2002
representing their rice subsidy in the CBA;
3. To grant to the complainants all the benefits of the CBA after 30 September 2002.
SO ORDERED.15
The NLRC declared that the Labor Arbiter acted conformably with the Labor Code
when it granted respondents motion to refile the complaint and admit their position
paper. Although respondents were not parties to the CBA between petitioner and the
ABS-CBN Rank and-File Employees Union, the NLRC nevertheless granted and
computed respondents monetary benefits based on the 1999 CBA, which was
effective until September 2002. The NLRC also ruled that the Labor Arbiter had
jurisdiction over the complaint of respondents because they acted in their individual
capacities and not as members of the union. Their claim for monetary benefits was
within the context of Article 217(6) of the Labor Code. The validity of respondents
claim does not depend upon the interpretation of the CBA.
The NLRC ruled that respondents were entitled to the benefits under the CBA
because they were regular employees who contributed to the profits of petitioner
through their labor.
Petitioner filed a motion for reconsideration, which the NLRC denied.
Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court
before the CA, raising both procedural and substantive issues, as follows: (a) whether
the NLRC acted without jurisdiction in admitting the appeal of respondents; (b)
whether the NLRC committed palpable error in scrutinizing the reopening and revival
of the complaint of respondents with the Labor Arbiter upon due notice despite the
lapse of 10 days from their receipt of the July 30, 2001 Order of the Labor Arbiter; (c)
whether respondents were regular employees; (d) whether the NLRC acted without
jurisdiction in entertaining and resolving the claim of the respondents under the CBA
instead of referring the same to the Voluntary Arbitrators as provided in the CBA; and
(e) whether the NLRC acted with grave abuse of discretion when it awarded
monetary benefits to respondents under the CBA although they are not members of
the appropriate bargaining unit.
On February 10, 2004, the CA rendered judgment dismissing the petition. It held that
the perfection of an appeal shall be upon the expiration of the last day to appeal by
all parties, should there be several parties to a case. Since respondents received their
copies of the decision on September 8, 2001 (except respondent Nazareno who
received her copy of the decision on August 27, 2001), they had until September 18,
2001 within which to file their Appeal Memorandum. Moreover, the CA declared that
respondents failure to submit their position paper on time is not a ground to strike
out the paper from the records, much less dismiss a complaint.
Anent the substantive issues, the appellate court stated that respondents are not
mere project employees, but regular employees who perform tasks necessary and
desirable in the usual trade and business of petitioner and not just its project
employees. Moreover, the CA added, the award of benefits accorded to rank-and-file
employees under the 1996-1999 CBA is a necessary consequence of the NLRC ruling
that respondents, as PAs, are regular employees.
Finding no merit in petitioners motion for reconsideration, the CA denied the same
in a Resolution dated June 16, 2004.
Petitioner thus filed the instant petition for review on certiorari and raises the
following assignments of error:
1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND
GRAVELY ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS COMMISSION
NOTWITHSTANDING THE PATENT NULLITY OF THE LATTERS DECISION AND
RESOLUTION.
2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING
OF THE NLRC FINDING RESPONDENTS REGULAR EMPLOYEES.
3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING
OF THE NLRC AWARDING CBA BENEFITS TO RESPONDENTS.18
Considering that the assignments of error are interrelated, the Court shall resolve
them simultaneously.
Petitioner asserts that the appellate court committed palpable and serious error of
law when it affirmed the rulings of the NLRC, and entertained respondents appeal
from the decision of the Labor Arbiter despite the admitted lapse of the reglementary
period within which to perfect the same. Petitioner likewise maintains that the 10day
period to appeal must be reckoned from receipt of a partys counsel, not from the
time the party learns of the decision, that is, notice to counsel is notice to party and
not the other way around. Finally, petitioner argues that the reopening of a
complaint which the Labor Arbiter has dismissed without prejudice is a clear violation
of Section 1, Rule V of the NLRC Rules; such order of dismissal had already attained
finality and can no longer be set aside.
Respondents, on the other hand, allege that their late appeal is a non-issue because it
was petitioners own timely appeal that empowered the NLRC to reopen the case.
They assert that although the appeal was filed 10 days late, it may still be given due
course in the interest of substantial justice as an exception to the general rule that
the negligence of a counsel binds the client. On the issue of the late filing of their
position paper, they maintain that this is not a ground to strike it out from the
records or dismiss the complaint.
We find no merit in the petition.
We agree with petitioners contention that the perfection of an appeal within the
statutory or reglementary period is not only mandatory, but also jurisdictional; failure
to do so renders the assailed decision final and executory and deprives the appellate
court or body of the legal authority to alter the final judgment, much less entertain
the appeal. However, this Court has time and again ruled that in exceptional cases, a
belated appeal may be given due course if greater injustice may occur if an appeal is
not given due course than if the reglementary period to appeal were strictly
followed.19 The Court resorted to this extraordinary measure even at the expense of
sacrificing order and efficiency if only to serve the greater principles of substantial
justice and equity.20
In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving
Article 22321 of the Labor Code a liberal application to prevent the miscarriage of
justice. Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties.22 We have held in a
catena of cases that technical rules are not binding in labor cases and are not to be
applied strictly if the result would be detrimental to the workingman.23
Admittedly, respondents failed to perfect their appeal from the decision of the Labor
Arbiter within the reglementary period therefor. However, petitioner perfected its
appeal within the period, and since petitioner had filed a timely appeal, the NLRC
acquired jurisdiction over the case to give due course to its appeal and render the
decision of November 14, 2002. Case law is that the party who failed to appeal from
the decision of the Labor Arbiter to the NLRC can still participate in a separate appeal
timely filed by the adverse party as the situation is considered to be of greater
benefit to both parties.
We find no merit in petitioners contention that the Labor Arbiter abused his
discretion when he admitted respondents position paper which had been belatedly
filed. It bears stressing that the Labor Arbiter is mandated by law to use every
reasonable means to ascertain the facts in each case speedily and objectively,
without technicalities of law or procedure, all in the interest of due process. Indeed,
as stressed by the appellate court, respondents failure to submit a position paper on
time is not a ground for striking out the paper from the records, much less for
dismissing a complaint.26 Likewise, there is simply no truth to petitioners assertion
that it was denied due process when the Labor Arbiter admitted respondents
position paper without requiring it to file a comment before admitting said position
paper. The essence of due process in administrative proceedings is simply an
opportunity to explain ones side or an opportunity to seek reconsideration of the
action or ruling complained of. Obviously, there is nothing in the records that would
suggest that petitioner had absolute lack of opportunity to be heard.27 Petitioner
had the right to file a motion for reconsideration of the Labor Arbiters admission of
respondents position paper, and even file a Reply thereto. In fact, petitioner filed its
position paper on April 2, 2001. It must be stressed that Article 280 of the Labor Code
was encoded in our statute books to hinder the circumvention by unscrupulous
employers of the employees right to security of tenure by indiscriminately and
absolutely ruling out all written and oral agreements inharmonious with the concept
of regular employment defined therein.28
We quote with approval the following pronouncement of the NLRC:
The complainants, on the other hand, contend that respondents assailed the Labor
Arbiters order dated 18 June 2001 as violative of the NLRC Rules of Procedure and as
such is violative of their right to procedural due process. That while suggesting that
an Order be instead issued by the Labor Arbiter for complainants to refile this case,
respondents impliedly submit that there is not any substantial damage or prejudice
upon the refiling, even so, respondents suggestion acknowledges complainants right
to prosecute this case, albeit with the burden of repeating the same procedure, thus,
entailing additional time, efforts, litigation cost and precious time for the Arbiter to
repeat the same process twice. Respondents suggestion, betrays its notion of
prolonging, rather than promoting the early resolution of the case.
Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-
opened the dismissed case without prejudice beyond the ten (10) day reglementary
period had inadvertently failed to follow Section 16, Rule V, Rules Procedure of the
NLRC which states:
A party may file a motion to revive or re-open a case dismissed without prejudice
within ten (10) calendar days from receipt of notice of the order dismissing the same;
otherwise, his only remedy shall be to re-file the case in the arbitration branch of
origin.
the same is not a serious flaw that had prejudiced the respondents right to due
process. The case can still be refiled because it has not yet prescribed. Anyway,
Article 221 of the Labor Code provides:
In any proceedings before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be controlling and it is the
spirit and intention of this Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure, all
in the interest of due process.
The admission by the Labor Arbiter of the complainants Position Paper and
Supplemental Manifestation which were belatedly filed just only shows that he acted
within his discretion as he is enjoined by law to use every reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due process. Indeed, the
failure to submit a position paper on time is not a ground for striking out the paper
from the records, much less for dismissing a complaint in the case of the
complainant. (University of Immaculate Conception vs. UIC Teaching and Non-
Teaching Personnel Employees, G.R. No. 144702, July 31, 2001, 362 SCRA 242)
In admitting the respondents position paper albeit late, the Labor Arbiter acted
within her discretion. In fact, she is enjoined by law to use every reasonable means to
ascertain the facts in each case speedily and objectively, without technicalities of law
or procedure, all in the interest of due process. (Panlilio vs. NLRC, 281 SCRA 53)
The respondents were given by the Labor Arbiter the opportunity to submit position
paper. In fact, the respondents had filed their position paper on 2 April 2001. What is
material in the compliance of due process is the fact that the parties are given the
opportunities to submit position papers.
Due process requirements are satisfied where the parties are given the
opportunities to submit position papers. (Laurence vs. NLRC, 205 SCRA 737)
Thus, the respondent was not deprived of its Constitutional right to due process of
law.29
We reject, as barren of factual basis, petitioners contention that respondents are
considered as its talents, hence, not regular employees of the broadcasting company.
Petitioners claim that the functions performed by the respondents are not at all
necessary, desirable, or even vital to its trade or business is belied by the evidence on
record.
Case law is that this Court has always accorded respect and finality to the findings of
fact of the CA, particularly if they coincide with those of the Labor Arbiter and the
National Labor Relations Commission, when supported by substantial evidence.30
The question of whether respondents are regular or project employees or
independent contractors is essentially factual in nature; nonetheless, the Court is
constrained to resolve it due to its tremendous effects to the legions of production
assistants working in the Philippine broadcasting industry.
We agree with respondents contention that where a person has rendered at least
one year of service, regardless of the nature of the activity performed, or where the
work is continuous or intermittent, the employment is considered regular as long as
the activity exists, the reason being that a customary appointment is not
indispensable before one may be formally declared as having attained regular status.
Article 280 of the Labor Code 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.
In Universal Robina Corporation v. Catapang,31 the Court reiterated the test in
determining whether one is a regular employee:
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of work
performed and its relation to the scheme of the particular business or trade in its
entirety. Also, if the employee has been performing the job for at least a year, even if
the performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity and while such activity exists.32
As elaborated by this Court in Magsalin v. National Organization of Working Men:33
Even while the language of law might have been more definitive, the clarity of its
spirit and intent, i.e., to ensure a regular workers security of tenure, however, can
hardly be doubted. In determining whether an employment should be considered
regular or non-regular, the applicable test is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or
trade of the employer. The standard, supplied by the law itself, is whether the work
undertaken is necessary or desirable in the usual business or trade of the employer, a
fact that can be assessed by looking into the nature of the services rendered and its
relation to the general scheme under which the business or trade is pursued in the
usual course. It is distinguished from a specific undertaking that is divorced from the
normal activities required in carrying on the particular business or trade. But,
although the work to be performed is only for a specific project or seasonal, where a
person thus engaged has been performing the job for at least one year, even if the
performance is not continuous or is merely intermittent, the law deems the repeated
and continuing need for its performance as being sufficient to indicate the necessity
or desirability of that activity to the business or trade of the employer. The
employment of such person is also then deemed to be regular with respect to such
activity and while such activity exists.34
Not considered regular employees are project employees, the completion or
termination of which is more or less determinable at the time of employment, such
as those employed in connection with a particular construction project, and
seasonal employees whose employment by its nature is only desirable for a limited
period of time. Even then, any employee who has rendered at least one year of
service, whether continuous or intermittent, is deemed regular with respect to the
activity performed and while such activity actually exists.
It is of no moment that petitioner hired respondents as talents. The fact that
respondents received pre-agreed talent fees instead of salaries, that they did not
observe the required office hours, and that they were permitted to join other
productions during their free time are not conclusive of the nature of their
employment. Respondents cannot be considered talents because they are not
actors or actresses or radio specialists or mere clerks or utility employees. They are
regular employees who perform several different duties under the control and
direction of ABS-CBN executives and supervisors.
Thus, there are two kinds of regular employees under the law: (1) those engaged to
perform activities which are necessary or desirable in the usual business or trade of
the employer; and (2) those casual employees who have rendered at least one year
of service, whether continuous or broken, with respect to the activities in which they
are employed.35
The law overrides such conditions which are prejudicial to the interest of the worker
whose weak bargaining situation necessitates the succor of the State. What
determines whether a certain employment is regular or otherwise is not the will or
word of the employer, to which the worker oftentimes acquiesces, much less the
procedure of hiring the employee or the manner of paying the salary or the actual
time spent at work. It is the character of the activities performed in relation to the
particular trade or business taking into account all the circumstances, and in some
cases the length of time of its performance and its continued existence.36 It is
obvious that one year after they were employed by petitioner, respondents became
regular employees by operation of law.37
Additionally, respondents cannot be considered as project or program employees
because no evidence was presented to show that the duration and scope of the
project were determined or specified at the time of their engagement. Under existing
jurisprudence, project could refer to two distinguishable types of activities. First, a
project may refer to a particular job or undertaking that is within the regular or usual
business of the employer, but which is distinct and separate, and identifiable as such,
from the other undertakings of the company. Such job or undertaking begins and
ends at determined or determinable times. Second, the term project may also refer
to a particular job or undertaking that is not within the regular business of the
employer. Such a job or undertaking must also be identifiably separate and distinct
from the ordinary or regular business operations of the employer. The job or
undertaking also begins and ends at determined or determinable times.38
The principal test is whether or not the project employees were assigned to carry out
a specific project or undertaking, the duration and scope of which were specified at
the time the employees were engaged for that project.39
In this case, it is undisputed that respondents had continuously performed the same
activities for an average of five years. Their assigned tasks are necessary or desirable
in the usual business or trade of the petitioner. The persisting need for their services
is sufficient evidence of the necessity and indispensability of such services to
petitioners business or trade.40 While length of time may not be a sole controlling
test for project employment, it can be a strong factor to determine whether the
employee was hired for a specific undertaking or in fact tasked to perform functions
which are vital, necessary and indispensable to the usual trade or business of the
employer.41 We note further that petitioner did not report the termination of
respondents employment in the particular project to the Department of Labor and
Employment Regional Office having jurisdiction over the workplace within 30 days
following the date of their separation from work, using the prescribed form on
employees termination/dismissals/suspensions.42
As gleaned from the records of this case, petitioner itself is not certain how to
categorize respondents. In its earlier pleadings, petitioner classified respondents as
program employees, and in later pleadings, independent contractors. Program
employees, or project employees, are different from independent contractors
because in the case of the latter, no employer-employee relationship exists.
Petitioners reliance on the ruling of this Court in Sonza v. ABSCBN Broadcasting
Corporation 43 is misplaced. In that case, the Court explained why Jose Sonza, a well-
known television and radio personality, was an independent contractor and not a
regular employee:
A.Selection and Engagement of Employee
ABS-CBN engaged SONZAS services to co-host its television and radio programs
because of SONZAS peculiar skills, talent and celebrity status. SONZA contends that
the discretion used by respondent in specifically selecting and hiring complainant
over other broadcasters of possibly similar experience and qualification as
complainant belies respondents claim of independent contractorship.
Independent contractors often present themselves to possess unique skills, expertise
or talent to distinguish them from ordinary employees. The specific selection and
hiring of SONZA, because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative, but not conclusive, of
an independent contractual relationship. If SONZA did not possess such unique skills,
talent and celebrity status, ABSCBN would not have entered into the Agreement with
SONZA but would have hired him through its personnel department just like any
other employee.
In any event, the method of selecting and engaging SONZA does not conclusively
determine his status. We must consider all the circumstances of the relationship,
with the control test being the most important element.
B. Payment of Wages
ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to
MJMDC. SONZA asserts that this mode of fee payment shows that he was an
employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits and
privileges which he would not have enjoyed if he were truly the subject of a valid job
contract.
All the talent fees and benefits paid to SONZA were the result of negotiations that led
to the Agreement. If SONZA were ABS-CBNs employee, there would be no need for
the parties to stipulate on benefits such as SSS, Medicare, x x x and 13th month pay
which the law automatically incorporates into every employer-employee contract.
Whatever benefits SONZA enjoyed arose from contract and not because of an
employer-employee relationship.
SONZAs talent fees, amounting to P317,000 monthly in the second and third year,
are so huge and out of the ordinary that they indicate more an independent
contractual relationship rather than an employer-employee relationship. ABS-CBN
agreed to pay SONZA such huge talent fees precisely because of SONZAs unique
skills, talent and celebrity status not possessed by ordinary employees. Obviously,
SONZA acting alone possessed enough bargaining power to demand and receive such
huge talent fees for his services. The power to bargain talent fees way above the
salary scales of ordinary employees is a circumstance indicative, but not conclusive,
of an independent contractual relationship.
The payment of talent fees directly to SONZA and not to MJMDC does not negate the
status of SONZA as an independent contractor. The parties expressly agreed on such
mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to whom
MJMDC would have to turn over any talent fee accruing under the Agreement.44
In the case at bar, however, the employer-employee relationship between petitioner
and respondents has been proven.
First. In the selection and engagement of respondents, no peculiar or unique skill,
talent or celebrity status was required from them because they were merely hired
through petitioners personnel department just like any ordinary employee.
Second. The so-called talent fees of respondents correspond to wages given as a
result of an employer-employee relationship. Respondents did not have the power to
bargain for huge talent fees, a circumstance negating independent contractual
relationship.
Third. Petitioner could always discharge respondents should it find their work
unsatisfactory, and respondents are highly dependent on the petitioner for continued
work.
Fourth. The degree of control and supervision exercised by petitioner over
respondents through its supervisors negates the allegation that respondents are
independent contractors.
The presumption is that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the employer, does not
furnish an independent business or professional service, such work is a regular
employment of such employee and not an independent contractor.45 The Court will
peruse beyond any such agreement to examine the facts that typify the parties
actual relationship.46
It follows then that respondents are entitled to the benefits provided for in the
existing CBA between petitioner and its rank-and-file employees. As regular
employees, respondents are entitled to the benefits granted to all other regular
employees of petitioner under the CBA.47 We quote with approval the ruling of the
appellate court, that the reason why production assistants were excluded from the
CBA is precisely because they were erroneously classified and treated as project
employees by petitioner:
x x x The award in favor of private respondents of the benefits accorded to rank-and-
file employees of ABS-CBN under the 1996-1999 CBA is a necessary consequence of
public respondents ruling that private respondents as production assistants of
petitioner are regular employees. The monetary award is not considered as claims
involving the interpretation or implementation of the collective bargaining
agreement. The reason why production assistants were excluded from the said
agreement is precisely because they were classified and treated as project employees
by petitioner.
As earlier stated, it is not the will or word of the employer which determines the
nature of employment of an employee but the nature of the activities performed by
such employee in relation to the particular business or trade of the employer.
Considering that We have clearly found that private respondents are regular
employees of petitioner, their exclusion from the said CBA on the misplaced belief of
the parties to the said agreement that they are project employees, is therefore not
proper. Finding said private respondents as regular employees and not as mere
project employees, they must be accorded the benefits due under the said Collective
Bargaining Agreement.
A collective bargaining agreement is a contract entered into by the union
representing the employees and the employer. However, even the non-member
employees are entitled to the benefits of the contract. To accord its benefits only to
members of the union without any valid reason would constitute undue
discrimination against non-members. A collective bargaining agreement is binding on
all employees of the company. Therefore, whatever benefits are given to the other
employees of ABS-CBN must likewise be accorded to private respondents who were
regular employees of petitioner.48
Besides, only talent-artists were excluded from the CBA and not production assistants
who are regular employees of the respondents. Moreover, under Article 1702 of the
New Civil Code: In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living of the laborer.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76582 are
AFFIRMED. Costs against petitioner.
SO ORDERED.
Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.
Panganiban (C.J., Chairperson), In the result.
Petition denied, assailed decision and resolution affirmed.
Notes.The proviso in the second paragraph of Article 280 of the Labor Code,
providing that an employee who has served for at least one year, shall be considered
a regular employee, relates only to casual employees and not to project employees.
(Villa vs. National Labor Relations Commission, 284 SCRA 105 [1998])
Ones regularity of employment is not determined by the number of hours one works
but by the nature and by the length of time one has been in that particular job.
(Perpetual Help Credit Cooperative, Inc. vs. Faburada, 366 SCRA 693 [2001])
employment without just cause, may hold the employee liable for damages. The
employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice. There was, to repeat, clear albeit
implied recognition of the licitness of term employment. RA 1787 also enumerated
what it considered to be just causes for terminating an employment without a
definite period, either by the employer or by the employee without incurring any
liability therefor.

G.R. No. 48494. February 5, 1990.* Same; Same; The decisive determinant in term employment is not the nature of the
activities performed by the employee, but the day certain agreed upon by the
BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners, vs. RONALDO parties for the commencement and termination of their employment relationship.
ZAMORA, the Presidential Assistant for Legal Affairs, Office of the President, and The question immediately provoked by a reading of Article 319 is whether or not a
DOROTEO R. ALEGRE, respondents. 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
Labor Relations; Termination of Employment; R.A. 1052; Before the advent of the
the usual business or trade of the employer. The definition seems a non sequitur.
Labor Code, term employment was impliedly but clearly recognized under R.A. 1052,
From the premisethat the duties of an employee entail activities which are usually
as amended by R.A. 1787.The employment contract between Brent School and
necessary or desirable in the usual business or trade of the employerthe
Alegre was executed on July 18, 1971, at a time when the Labor Code of the
conclusion does not necessarily follow that the employer and employee should be
Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code did not come
forbidden to stipulate any period of time for the performance of those activities.
into effect until November 1, 1974, some three years after the perfection of the
There is nothing essentially contradictory between a definite period of an
employment contract, and rights and obligations thereunder had arisen and been
employment contract and the nature of the employees duties set down in that
mutually observed and enforced. At that time, i.e., before the advent of the Labor
contract as being usually necessary or desirable in the usual business or trade of the
Code, there was no doubt whatever about the validity of term employment. It was
employer. The concept of the employees duties as being usually necessary or
impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052,
desirable in the usual business or trade of the employer is not synonymous with or
as amended by R.A. 1787. Basically, this statute provided thatIn cases of
identical to employment with a fixed term. Logically, the decisive determinant in term
employment, without a definite period, in a commercial, industrial, or agricultural
employment should not be the activities that the employee is called upon to perform,
establishment or enterprise, the employer or the employee may terminate at any
but the day certain agreed upon by the parties for the commencement and
time the employment with just cause; or without just cause in the case of an
termination of their employment relationship, a day certain being understood to be
employee by serving written notice on the employer at least one month in advance,
that which must necessarily come, although it may not be known when. Seasonal
or in the case of an employer, by serving such notice to the employee at least one
employment, and employment for a particular project are merely instances of
month in advance or one-half month for every year of service of the employee,
employment in which a period, where not expressly set down, is necessarily implied.
whichever is longer, a fraction of at least six months being considered as one whole
year. The employer, upon whom no such notice was served in case of termination of
Same; Same; Same; Stipulations in employment contracts providing for term Some three months before the expiration of the stipulated period, or more precisely
employment or fixed period employment are valid when the period where agreed on April 20, 1976, Alegre was given a copy of the report filed by Brent School with the
upon knowingly, and voluntarily by the parties without force, duress or improper Department of Labor advising of the termination of his services effective on July 16,
pressure exerted on the employee; and when such stipulations were not designed to 1976. The stated ground for the termination was completion of contract, expiration
circumvent the laws on security of tenure.Accordingly, and since the entire purpose of the definite period of employment. And a month or so later, on May 26, 1976,
behind the development of legislation culminating in the present Article 280 of the Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing
Labor Code clearly appears to have been, as already observed, to prevent the phrase, in full payment of services for the period May 16, to July 17, 1976 as full
circumvention of the employees right to be secure in his tenure, the clause in said payment of contract.
article indiscriminately and completely ruling out all written or oral agreements
However, at the investigation conducted by a Labor Conciliator of said report of
conflicting with the concept of regular employment as defined therein should be
termination of his services, Alegre protested the announced termination of his
construed to refer to the substantive evil that the Code itself has singled out:
employment. He argued that although his contract did stipulate that the same would
agreements entered into precisely to circumvent security of tenure. It should have no
terminate on July 17, 1976, since his services were necessary and desirable in the
application to instances where a fixed period of employment was agreed upon
usual business of his employer, and his employment had lasted for five years, he had
knowingly and voluntarily by the parties, without any force, duress or improper
acquired the status of a regular employee and could not be removed except for valid
pressure being brought to bear upon the employee and absent any other
cause. The Regional Director considered Brent Schools report as an application for
circumstances vitiating his consent, or where it satisfactorily appears that the
clearance to terminate employment (not a report of termination), and accepting the
employer and employee dealt with each other on more or less equal terms with no
recommendation of the Labor Conciliator, refused to give such clearance and instead
moral dominance whatever being exercised by the former over the latter. Unless thus
required the reinstatement of Alegre, as a permanent employee, to his former
limited in its purview, the law would be made to apply to purposes other than those
position without loss of seniority rights and with full back wages. The Director
explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its
pronounced the ground relied upon by the respondent (Brent) in terminating the
effects and apt to lead to absurd and unintended consequences.
services of the complainant (Alegre) x x x (as) not sanctioned by P.D. 442, and, quite
NARVASA, J.: oddly, as prohibited by Circular No. 8, series of 1969, of the Bureau of Private
Schools.7
The question presented by the proceedings at bar is whether or not the provisions of
the Labor Code,2 as amended,3 have anathematized fixed period employment or Brent School filed a motion for reconsideration. The Regional Director denied the
employment for a term. motion and forwarded the case to the Secretary of Labor for review.8 The latter
sustained the Regional Director.9 Brent appealed to the Office of the President. Again
The root of the controversy at bar is an employment contract in virtue of which
it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed the
Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly
Labor Secretarys decision, ruling that Alegre was a permanent employee who could
compensation of P20,000.00. The contract fixed a specific term for its existence, five
not be dismissed except for just cause, and expiration of the employment contract
(5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17,
was not one of the just causes provided in the Labor Code for termination of
1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973,
services.10
and September 14, 1974 reiterated the same terms and conditions, including the
expiry date, as those contained in the original contract of July 18, 1971.
The School is now before this Court in a last attempt at vindication. That it will get
here.
The employment contract between Brent School and Alegre was executed on July 18,
1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet been
promulgated. Indeed, the Code did not come into effect until November 1, 1974,
some three years after the perfection of the employment contract, and rights and
obligations thereunder had arisen and been mutually observed and enforced.
At that time, i.e., before the advent of the Labor Code, there was no doubt whatever
about the validity of term employment. It was impliedly but nonetheless clearly
recognized by the Termination Pay Law, R.A. 1052,11 as amended by R.A. 1787.12
Basically, this statute provided that
In cases of employment, without a definite period, in a commercial, industrial, or
agricultural establishment or enterprise, the employer or the employee may
terminate at any time the employment with just cause; or without just cause in the
case of an employee by serving written notice on the employer at least one month in
advance, or in the case of an employer, by serving such notice to the employee at
least one month in advance or one-half month for every year of service of the
employee, whichever is longer, a fraction of at least six months being considered as
one whole year.
The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.
There was, to repeat, clear albeit implied recognition of the licitness of term
employment. RA 1787 also enumerated what it considered to be just causes for
terminating an employment without a definite period, either by the employer or by
the employee without incurring any liability therefor.
Prior, thereto, it was the Code of Commerce which governed employment without a
fixed period, and also implicitly acknowledged the propriety of employment with a
fixed period. Its Article 302 provided that
In cases in which the contract of employment does not have a fixed period, any of the
parties may terminate it, notifying the other thereof one month in advance.
The factor or shop clerk shall have a right, in this case, to the salary corresponding to
said month.
The salary for the month directed to be given by the said Article 302 of the Code of
Commerce to the factor or shop clerk, was known as the mesada (from mes, Spanish
for month). When Article 302 (together with many other provisions of the Code of
Commerce) was repealed by the Civil Code of the Philippines, Republic Act No. 1052
was enacted avowedly for the precise purpose of reinstating the mesada.
Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and
became effective on August 30, 1950, itself deals with obligations with a period in
section 2, Chapter 3, Title I, Book IV; and with contracts of labor and for a piece of
work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of Book IV. No prohibition
against term- or fixed-period employment is contained in any of its articles or is
otherwise deducible therefrom.
It is plain then that when the employment contract was signed between Brent School
and Alegre on July 18, 1971, it was perfectly legitimate for them to include in it a
stipulation fixing the duration thereof. Stipulations for a term were explicitly
recognized as valid by this Court, for instance, in Biboso v. Victorias Milling Co., Inc.,
promulgated on March 31, 1977,13 and J. Walter Thompson Co. (Phil.) v. NLRC,
promulgated on December 29, 1983.14 The Thompson case involved an executive
who had been engaged for a fixed period of three (3) years. Biboso involved teachers
in a private school as regards whom, the following pronouncement was made:
What is decisive is that petitioners (teachers) were well aware all the time that their
tenure was for a limited duration. Upon its termination, both parties to the
employment relationship were free to renew it or to let it lapse. (p. 254)
Under American law the principle is the same. Where a contract specifies the period
of its duration, it terminates on the expiration of such period. A contract of
employment for a definite period terminates by its own terms at the end of such
period.
The status of legitimacy continued to be enjoyed by fixed-period employment
contracts under the Labor Code (Presidential Decree No. 442), which went into effect
on November 1, 1974. The Code contained explicit references to fixed period
employment, or employment with a fixed or definite period. Nevertheless,
obscuration of the principle of licitness of term employment began to take place at
about this time.
Article 320, entitled Probationary and fixed period employment, originally stated
that the termination of employment of probationary employees and those
employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary
of Labor may prescribe. The asserted objective was to prevent the circumvention of
the right of the employee to be secured in their employment as provided x x x (in the
Code).
Article 321 prescribed the just causes for which an employer could terminate an
employment without a definite period. And Article 319 undertook to define
employment without a fixed period in the following manner:
An employment shall be deemed to be without a definite period for purposes of this
Chapter where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.
The question immediately provoked by a reading of Article 319 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 a non sequitur.
From the premisethat the duties of an employee entail activities which are usually
necessary or desirable in the usual business or trade of the employerthe
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 employees 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 employees 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.19 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.
Of course, the term period has a definite and settled signification. It means, Length
of existence; duration. A point of time marking a termination as of a cause or an
activity; an end, a limit, a bound; conclusion; termination. A series of years, months
or days in which something is completed. A time of definite length. x x x the period
from one fixed date to another fixed date x x.20 It connotes a space of time which
has an influence on an obligation as a result of a juridical act, and either suspends its
demandableness or produces its extinguishment.21 It should be apparent that this
settled and familiar notion of a period, in the context of a contract of employment,
takes no account at all of the nature of the duties of the employee; it has absolutely
no relevance to the character of his duties as being usually necessary or desirable to
the usual business of the employer, or not.
Subsequently, the foregoing articles regarding employment with a definite period
and regular employment were amended by Presidential Decree No. 850, effective
December 16, 1975.
Article 320, dealing with Probationary and fixed period employment, was altered by
eliminating the reference to persons employed with a fixed period, and was
renumbered (becoming Article 271). The article22 now reads:
x x. Probationary employment.Probationary employment shall not exceed six
months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee
who has been engaged in a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall
be considered a regular employee.
Also amended by PD 850 was Article 319 (entitled Employment with a fixed period,
supra) by (a) deleting mention of employment with a fixed or definite period, (b)
adding a general exclusion clause declaring irrelevant written or oral agreements to
the contrary, and (c) making the provision treat exclusively of regular and casual
employment. As revised, said article, renumbered 270,23 now reads:
x x Regular and Casual Employment.The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or service to be
employed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists.
The first paragraph is identical to Article 319 except that, as just mentioned, a clause
has been added, to wit: The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of the parties . . . The clause
would appear to be addressed inter alia to agreements fixing a definite period for
employment. There is withal no clear indication of the intent to deny validity to
employment for a definite period. Indeed, not only is the concept of regular
employment not essentially inconsistent with employment for a fixed term, as above
pointed out, Article 272 of the Labor Code, as amended by said PD 850, still impliedly
acknowledged the propriety of term employment: it listed the just causes for which
an employer may terminate employment without a definite period, thus giving rise
to the inference that if the employment be with a definite period, there need be no
just cause for termination thereof if the ground be precisely the expiration of the
term agreed upon by the parties for the duration of such employment.
Still later, however, said Article 272 (formerly Article 321) was further amended by
Batas Pambansa Bilang 130, to eliminate altogether reference to employment
without a definite period. As lastly amended, the opening lines of the article
(renumbered 283), now pertinently read: An employer may terminate an
employment for any of the following just causes: x x. BP 130 thus completed the
elimination of every reference in the Labor Code, express or implied, to employment
with a fixed or definite period or term.
It is in the light of the foregoing description of the development of the provisions of
the Labor Code bearing on term or fixed-period employment that the question posed
in the opening paragraph of this opinion should now be addressed. Is it then the
legislative intention to outlaw stipulations in employment contracts laying down a
definite period therefor? Are such stipulations in essence contrary to public policy
and should not on this account be accorded legitimacy?
On the one hand, there is the gradual and progressive elimination of references to
term or fixed-period employment in the Labor Code, and the specific statement of
the rule25 that
x x Regular and Casual Employment.The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or service to be
employed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists.
There is, on the other hand, the Civil Code, which has always recognized, and
continues to recognize, the validity and propriety of contracts and obligations with a
fixed or definite period, and imposes no restraints on the freedom of the parties to fix
the duration of a contract, whatever its object, be it specie, goods or services, except
the general admonition against stipulations contrary to law, morals, good customs,
public order or public policy.26 Under the Civil Code, therefore, and as a general
proposition, fixed-term employment contracts are not limited, as they are under the
present Labor Code, to those by nature seasonal or for specific projects with pre-
determined dates of completion; they also include those to which the parties by free
choice have assigned a specific date of termination.
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. Similarly, despite the provisions of Article 280, Policy Instructions No. 8
of the Minister of Labor27 implicitly recognize that certain company officials may be
elected for what would amount to fixed periods, at the expiration of which they
would have to stand down, in providing that these officials, x x may lose their jobs as
president, executive vice-president or vice-president, etc. because the stockholders
or the board of directors for one reason or another did not reelect them.
There can of course be no quarrel with the proposition that where from the
circumstances it is apparent that periods have been imposed to preclude acquisition
of tenurial security by the employee, they should be struck down or disregarded as
contrary to public policy, morals, etc. But where no such intent to circumvent the law
is shown, or stated otherwise, where the reason for the law does not exist, e.g.,
where it is indeed the employee himself who insists upon a period or where the
nature of the engagement is such that, without being seasonal or for a specific
project, a definite date of termination is a sine qua non, would an agreement fixing a
period be essentially evil or illicit, therefore anathema? Would such an agreement
come within the scope of Article 280 which admittedly was enacted to prevent the
circumvention of the right of the employee to be secured in x x (his) employment?
As it is evident from even only the three examples already given that Article 280 of
the Labor Code, under a narrow and literal interpretation, not only fails to exhaust
the gamut of employment contracts to which the lack of a fixed period would be an
anomaly, but would also appear to restrict, without reasonable distinctions, the right
of an employee to freely stipulate with his employer the duration of his engagement,
it logically follows that such a literal interpretation should be eschewed or avoided.
The law must be given a reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment and subverting to
boot the principle of freedom of contract to remedy the evil of employers using it as
a means to prevent their employees from obtaining security of tenure is like cutting
off the nose to spite the face or, more relevantly, curing a headache by lopping off
the head.
It is a salutary principle in statutory construction that there exists a valid
presumption that undesirable consequences were never intended by a legislative
measure, and that a construction of which the statute is fairly susceptible is favored,
which will avoid all objectionable, mischievous, undefensible, wrongful, evil, and
injurious consequences.28
Nothing is better settled than that courts are not to give words a meaning which
would lead to absurd or unreasonable consequences. That is a principle that goes
back to In re Allen decided on October 27, 1903, where it was held that a literal
interpretation is to be rejected if it would be unjust or lead to absurd results. That is a
strong argument against its adoption. The words of Justice Laurel are particularly apt. Reyes (the teachers) argument is not persuasive. It loses sight of the fact that her
Thus: The fact that the construction placed upon the statute by the appellants would employment was probationary, contractual in nature, and one with a definitive
lead to an absurdity is another argument for rejecting it. x x 29 period. At the expiration of the period stipulated in the contract, her appointment
was deemed terminated and the letter informing her of the non-renewal of her
x x We have, here, then a case where the true intent of the law is clear that calls for
contract is not a condition sine qua non before Reyes may be deemed to have ceased
the application of the cardinal rule of statutory construction that such intent of spirit
in the employ of petitioner UST. The notice is a mere reminder that Reyes contract of
must prevail over the letter thereof, for whatever is within the spirit of a statute is
employment was due to expire and that the contract would no longer be renewed. It
within the statute, since adherence to the letter would result in absurdity, injustice
is not a letter of termination. The interpretation that the notice is only a reminder is
and contradictions and would defeat the plain and vital purpose of the statute.30
consistent with the courts finding in Labajo, supra. x x x32
Accordingly, and since the entire purpose behind the development of legislation
Paraphrasing Escudero, respondent Alegres employment was terminated upon the
culminating in the present Article 280 of the Labor Code clearly appears to have
expiration of his last contract with Brent School on July 16, 1976 without the
been, as already observed, to prevent circumvention of the employees right to be
necessity of any notice. The advance written advice given the Department of Labor
secure in his tenure, the clause in said article indiscriminately and completely ruling
with copy to said petitioner was a mere reminder of the impending expiration of his
out all written or oral agreements conflicting with the concept of regular employment
contract, not a letter of termination, nor an application for clearance to terminate
as defined therein should be construed to refer to the substantive evil that the Code
which needed the approval of the Department of Labor to make the termination of
itself has singled out: agreements entered into precisely to circumvent security of
his services effective. In any case, such clearance should properly have been given,
tenure. It should have no application to instances where a fixed period of
not denied.
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 WHEREFORE, the public respondents Decision complained of is REVERSED and SET
absent any other circumstances vitiating his consent, or where it satisfactorily ASIDE. Respondent Alegres contract of employment with Brent School having
appears that the employer and employee dealt with each other on more or less equal lawfully terminated with and by reason of the expiration of the agreed term of period
terms with no moral dominance whatever being exercised by the former over the thereof, he is declared not entitled to reinstatement and the other relief awarded
latter. Unless thus limited in its purview, the law would be made to apply to purposes and confirmed on appeal in the proceedings below. No pronouncement as to costs.
other than those explicitly stated by its framers; it thus becomes pointless and
SO ORDERED.
arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences. Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Corts, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed
period of employment as still good rulea rule reaffirmed in the recent case of Fernan, (C.J.), No part, related to counsel for petitioners.
Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the
fairly analogous case of a teacher being served by her school a notice of termination Sarmiento, J., Please see separate opinion, concurring in part and dissenting in
following the expiration of the last of three successive fixed-term employment part.
contracts, the Court held:
G.R. Nos. 114858-59. September 7, 2001.*
COLUMBUS PHILIPPINES BUS CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, ZENAIDA DOMASIG and ROMAN DOMASIG,
respondents.
Labor Law; Labor Code; Classification of Employment; Whether the employment is
regular or casual has nothing to do with the manner of computing and paying the
employees wages or compensation.To determine whether the employment of an
employee is regular or casual, Article 280 of the Labor Code is definitive; and whether
such employment is regular or casual has nothing to do with the manner of
computing and paying the employees wages or compensation.
Same; Same; Same; Standard test for determining a regular employment.The
primary standard, x x x of determining a regular employment is the reasonable
connection between the particular activity performed by the employee in relation to
the usual business or trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation
to the scheme of the particular business or trade in its entirety. Also, if the employee
has been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity, if not indispensability of
that activity to the business. Hence, the employment is also considered regular, but
only with respect to such activity and while such activity exists.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Ernesto Arellano for private respondents.
DE LEON, JR., J.:
This is a petition for certiorari which seeks to nullify the Resolution2 dated October
29, 1993 of the National Labor Relations Commission (NLRC) affirming the Decision
dated September 8, 1992 of the Labor Arbiter Ceferina J. Diosana who found and
adjudged that private respondents Roman and Zenaida Domasig were illegally
dismissed by petitioner Columbus Philippines Bus Corporation from their positions as
driver and bus conductress, respectively.
Petitioner Columbus Philippines Bus Corporation is engaged in the business of
operating passenger buses. Since the start of its operations in 1990, it has maintained
a list of drivers and conductors who rendered service in its bus units allegedly on a
first come first served basis and compensated purely on commission. The drivers
and conductors/conductress worked for about ten (10) to fifteen (15) days a month
and were allegedly not required to work everyday.
Private respondent Roman Domasig started working as a driver with the petitioner on
August 30, 1990 with a daily income ranging from Three Hundred Fifty Pesos
(P350.00) to Six Hundred Fifty Pesos (P650.00), while his wife and co-respondent,
Zenaida Domasig, was employed as a bus conductress on October 1, 1990 with a daily
income of Two Hundred Fifty Pesos (P250.00) to Five Hundred Pesos (P500.00). The
employment of private respondents Roman and Zenaida Domasig with the petitioner
was abruptly terminated on January 21 and 22, 1992, respectively, for their having
allegedly formed a labor union.
Thus, these two (2) related cases of unfair labor practice, illegal dismissal, illegal
deductions from salary, and non-payment of service incentive leave pay and 13th
month pay were instituted by private respondents against petitioner Columbus
Philippines Bus Corporation and its officers, Atty. Ferdinand Catabian and Mrs. Amelia
de Dios, before the Department of Labor and Employment (DOLE), Arbitration Branch
in Manila, National Capital Region. The said related cases were assigned to Labor
Arbiter Ceferina J. Diosa.
In his Sinumpaang Salaysay private respondent Roman Domasig alleged, among
others, the following in his affidavitcomplaint, to wit:
x x x xxx xxx
3. Sa tindi ng galit ng pangasiwaan at upang hindi mabuo ang itinatayo naming
unyon, akoy basta na lamang pinababa mula sa aking regular na bus na may
numerong 109 nuong ika-21 ng Enero 1992, bandang alas 4:30 ng madaling araw
nang akoy papalabas na sa garahe at bumiyahe na sana. Simula na noon hindi na ako
pinalabas sa biyahe. Ibinigay na sa iba ang aking regular na bus.
4. Kamiy napilitang magtayo ng unyon dahil sa mahirap na kalagayan namin sa
trabaho. Hinaharap namin ang sumusunod:
(a) Mahabang oras sa trabaho. Umaabot sa higit kumulang 19 hanggang 20 oras ang
ginugugol namin sa trabaho. Kailangang nasa garahe na kami at lumabas ng alas-4 ng
madaling araw at makaalis lamang pagkatapos makapag-engreso ng collection
bandang hatinggabi na.
(b) Illegal deductions. Tuwing may labas kami, sapilitang kinakaltasan ang aming
sahod para daw sa pulis. Hindi na nga kami binibigyan ng mga benepisyong itinatakda
ng batas gaya ng 13th month pay at service incentive leave, kinakaltasan pa kami
para daw sa pulis.
(k) Wala kaming kaseguruhan sa trabaho. Kapag kamiy nagreklamo, kami agad nilang
tatanggalin. Napakadali nilang gawin. Hindi ka lang bibigyan ng bus assignment, wala
ka ng magagawa.
5. Tulad ng ganitong kalagayan namin sa trabaho, inumpisahan naming
mangumbinsi sa kapwa naming empleyado noong Disyembre pa ng nakaraang taon.
Ang ilan sa mga kasama ko ay sina Leon Agarao, Santiago Tagum, Alejandro Bayroon
at Zenaida Domasig. Silay tinanggal din sa trabaho. Kumuha kami ng Sama-Samang
Pahayag mula sa National Federation of Labor para papirmahan sa mga nais sumapi
sa Unyon. Columbus Workers Union ang aming lokal at itoy isinapi namin sa National
Federation of Labor (NFL).
6. Pagpasok ng bagong taon, 1992, mayroon na kaming napapirma na higit sa
limampu (50). Mahigit tatlong daan kami, drayber at konduktor. Sa unang linggo pa
lamang ng Enero 1992. Natutunan ng kompanya ang kilos namin. Tinawag na ako ni
Atty. Ferdinand Catabian, General Manager ng CPBC bago akoy tuluyan niyang
tinanggal noong ika-21 ng Enero 1992 at tinanong kung totoo na mayroon kaming
itinatatag na unyon. Tinanggihan ko noon at akoy kanyang binigyan ng babala ng
ganito: Domasig, ayaw ko ng unyon. Kapag mayroon akong mapapanghawakang
ebidensiya na kayoy nagtatayo ng unyon at ikaw ay kasama, titiyakin ko sa iyo na
tanggal ka agad.
7. Dumating ang araw namin noong ika-21 ng Enero. Noong araw na iyon, humigit
kumulang alas 4:30 ng madaling araw, akoy papalabas ng garahe. Dala-dala ko ang
aking regular bus No. 109. Pinahinto ako ni Legorio Vellesar, dating dispatcher at
ngayon ay traffic Supervisor at sinabihan na itabi ko ang bus dahil kakausapin daw
ako ni Atty. Catabian. Kinabahan na ako nang ibigay sa iba ang aking minamanehong
bus.
8. Pagpasok ko sa opisina ni Atty. Catabian, sinabihan agad ako ni Atty. Catabian ng
ganito: Domasig, Hindi ka na makakalusot pa. Tingnan mo ito. Mayroon siyang
ipinakitang xerox copy ng aming pinapipirmahan Sama-Samang Pahayag. Sa xerox na
ito nakita ko ang pirma ni Zenaida Domasig. Domasig, ito ang ebidensiya na ikaw ay
kasama sa unyon. Alam mo Domasig, akoy, mabuting kaibigan ngunit masamang
kaaway. Sinabi ko sa iyo noon na kapag may mahawakan akong ebidensiya na
nagtatayo kayo ng unyon maghihiwalay tayo. Ayaw na ayaw ko ng unyon. Pagkasabi
nito ni Atty. Catabian, akoy kanyang pinalabas na dahil marami pang driver at
konductor na nakapila sa labas.
9. Katunayan, bago kinausap ni Atty. Catabian, marami na sa mga kapwa ko
empleyado ang kinausap ni Atty. Catabian. Pinapipirma sila sa isang kasulatan na
kung saan binabawi nila ang kanilang pirma sa Sama-Samang Pahayag. Ang hindi
pumirma ay Hindi na pinalabas sa biyahe.
10. Ganon man ang nangyari, pinagpasiyahan pa rin ng mga kasama kong
namumuno, kasama ako, na ipagpatuloy pa rin ang pagtatayo ng unyon. Dahil dito,
ipinasiya ng mga namumuno, kasama ako at si Zenaida Domasig, na huwag pumirma
sa kasulatan at ihain na ang petition for certification election.
11. Nagdulot na matinding pagkabalisa at takot sa amin ni Zenaida Domasig ang
biglang pagtanggal nila sa amin. Wala na kaming aasahan para sa araw-araw na
pangangailangan ng aming pamilya. Nabaon kami sa utang at malaking kahihiyan sa
mga kapit-bahay at kaibigan namin. Tuloy hating-gabi na kung minsan, pinag-iisipan
pa rin namin ang kinabukasan ng mga bata: ano kaya ang kanilang kinabukasan. Kung
kami o isa sa amin ay tatalikod sa aming pinirmahan, mapapahamak din ang kapwa
naming empleyado at tuluyang mawasak ang unyon.
12. Sadyang napakalupit at hindi makatao ang ginawa ng kompanya sa aming mag-
asawa at sa kapwa namin empleyado. Wala man lamang notice sa amin. Hindi man
lang kami pinagpaliwanag. Wala naman anumang violations na nagawa namin kundi
ang pagtatayo ng unyon.
13. Dahil dito, hinihingi ko sa Tanggapan ito na ibalik sa akin, para sa pamilya, ang
nawalang sahod ko sa panahon na akoy tanggal sa trabaho. Tuwing labas kumikita
ako mula P350 hanggang P650.00 sa loob ng 20 oras humigit kumulang. Hinihingi ko
rin na ibalik ako sa trabaho at pagbayarin ang kompanya ng damages bunga ng
pinsalang tinamasa namin.
Private respondent Zenaida Domasig also made the following allegations in her
affidavit-complaint, to wit:
3. Kamiy nagtayo ng unyon dahil sa api naming kalagayan sa trabaho. Napakahaba
ang oras ng trabaho namin. Kailangan pumasok kami ng alas-4 ng madaling araw at
makakuwi kami ng alas-12 ng hatinggabi. Salitan ng trabaho at pahinga ang aming
pagtatarabaho: dalawang (2) araw na labas at dalawang (2) araw na pahinga.
Maraming sapilitang kaltas mula sa sahod namin. Tuwing labas namin kinakaltasan
kami ng halagang P18.50 ngunit hindi maliwanag kung para saan ito. Mayroon P300
namang resibong ibinibigay. Kapag magreklamo kami, hindi naman kami
pasasampahin sa bus.
4. Ang benepisyong itinatakda ng batas ay hindi pa ibinibigay. Akoy nagkasakit mula
ika-15 ng Nobyembre 1991 hanggang ika-14 ng Disyembre 1991. Gumawa ako ng sick
leave applications: isa para sa SSS at isa para sa Employees Compensation
Commission. Si Ginoong Roman Domasig ang nagpapirma ng aking applications sa
kompanya. Ngunit, hindi nila ibinalik kay Ginoong Domasig and aking applications.
Noong lamang ika-12 ng Enero 1992 nila ibinigay sa SSS ang aking sick leave
application. Hindi nila ibinigay sa ECC ang isang application ko at ibinalik na lang basta
sa akin.
5. Ang hindi nila pagfile agad ng aking sick leave ay ginawa ng kompanya upang
magipit kaming mga nangungunang kasapi ng unyon.
6. Sa layuning mapabuti ang aming kalagayan, inumpisahan naming buuin ang unyon
noong mga huling buwan ng 1991. Kumuha kami ng application for membership sa
National Federation of Labor (NFL). Itoy ang Sama-samang Pahayag. Bago matapos
ang taong 1991, kamiy nakapagpapirma ng hindi kukulangin sa tatlumpu. Sa una o
pangalawang linggong Enero 1992, umabot na malamang sa 70 ang nakapirma.
Ngunit sa unang linggo pa lamang ng Enero 1992, mukhang natutunogan ng
pangasiwaan na mayroong nagtatayo ng unyon. Inumpisahan na ni Atty. Ferdinand
Catabian na isa-isang pagtatanungin ang kanilang pinaghihinalaang lider ng unyon.
Isa sa aking asawa sa mga tinatawag at pinagtatanong ni Atty. Catabian. Silay
binigyan ng mahigpit na babala. Tinawag uli si Ginoong Domasig noong ika-21 ng
Enero 1992. Bago siya tinawag marami ng drayber at konduktor/konduktora na
pinatawag ni Atty. Catabian at silay naghihintay na kausapin ni Atty. Catabian. Ang
mga kinausap ay hindi pinalalabas hanggang hindi sila pumirma sa kasulatan na
kanilang binabawi ang kanilang pagsapi sa unyon, ang Columbus Workers Union.
Hindi na pinalabas si Ginoong Domasig mula ng araw na iyon dahil hindi siya pumirma
sa kasulatan.
7. Kinabukasan, ika-22 ng Enero 1992, akoy hindi na rin binigyan ng bus assignment.
Wala namang ibinibintang na violation laban sa akin. Gaya ng nasabi ko na, wala
namang memorandum na ibinigay sa akin. Basta na lamang hindi ako binibigyan ng
bus assignment mula noon magpahanggang ngayon. Ang tanging dahilan ng
pagtanggal nila sa akin ay ang aking pagsapi sa unyon. Akoy isa sa mga naunang
pumirma sa Sama-Samang Pahayag ng pagsapi sa unyon na kinuha namin mula sa
National Federation.
8. Agad agad na pinag-usapan ng liderato ng unyon ang panggigipit ng isinagawa ng
pangasiwaan. Nagpasiya ang iba na para makalabas sila at may makain ang pamilya
nila na pumirma sa kasulatan ng pagbawi ng pagiging kasapi nila ng CWU. Silay
pinalabas. Si Felipe Madrid, isa sa lider namin, ay inilipat pa nga sa Air Conditioned
bus pagkatapos niyang pumirma sa kasulatan. Ang dati niyang bus ay No. 109. Hindi
ito Air Con. Ngayon, ang kanyang minamaneho ay Bus No. 17 isang Air Con Bus. Ang
mga hindi pumirma ay hindi na pinalabas.
9. Ganon paman, pinagpasiyahan na ituloy namin ang pagtatayo ng unyon. Kayat
naghain na kami ng isang petition for certification election sa Department of Labor
and Employment.
10. Ang ginawang pagtanggal sa aming mag-asawa ay nagdulot ng malaking pinsala
sa aming pamilya. Nabalisa kaming mag-asawa dahil wala na kaming maasahang
trabaho. Napilitan kami umutang na sa mga kaibigan at kapit-bahay. Dahil hindi kami
makapagbayad sa takdang araw, malaking kahihiyan ang inaabot namin.
Naguguluhan din ang pagiisip namin lalung-lalo na kapag gutom ang mga anak namin
at wala man lang kaming pambili ng panawid-gutom. Hindi naman namin maaaring
talikuran ang unyon. Kami ang nauna sa pagpapirma sa unyon.
In support of their respective allegations, private respondents submitted
documentary evidence such as the Petition for Certification Election, Sama-samang
Pahayag ng Pagsapi, Payroll Slips and Parking Fee Slip Receipt.
On the other hand, the petitioner failed to attend the scheduled hearings of the said
cases on the alleged ground that it was not notified. It was only after an adverse
judgment of the Labor Arbiter that petitioner finally filed its position papers.
In her Decision dated September 8, 1992, the Labor Arbiter found for the
complainants, herein private respondents, and ordered the petitioner to reinstate
private respondents Roman and Zenaida Domasig to their former positions as driver
and bus conductress, respectively, without loss of seniority, rights and with backpay
accruing from January 21, 1992 and January 22, 1992 up to their actual
reinstatement. However, private respondents other money claims were dismissed
for lack of merit.
Aggrieved by the adverse judgment of the Labor Arbiter, petitioner appealed to
public respondent National Labor Relations Commission (NLRC) where it was assigned
to the First Division. On October 29, 1993, the NLRC affirmed in toto the Labor
Arbiters decision, and in its Order4 dated January 7, 1994 denied the petitioners
motion for reconsideration. The petitioner now challenges the correctness of the
NLRCs decision via the instant petition.
The petitioner Columbus Philippines Bus Corporation alleges that the private
respondents like its other drivers and conductors are not regular employees, that the
services of private respondents were rendered on a first come first served basis and
compensated purely on commission basis; that they worked for only about ten (10)
to fifteen (15) days a month, and only when they felt like doing so.
To determine whether the employment of an employee is regular or casual, Article
2805 of the Labor Code is definitive; and whether such employment is regular or
casual has nothing to do with the manner of computing and paying the employees
wages or compensation. Rather the said provision of the Labor Code provides that:
The primary standard, x x x of determining a regular employment is the reasonable
connection between the particular activity performed by the employee in relation to
the usual business or trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation
to the scheme of the particular business or trade in its entirety. Also, if the employee
has been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of
that activity to the business. Hence, the employment is also considered regular, but
only with respect to such activity and while such activity exists.6
Considering the above-quoted standard for determining a regular employment, it
appears that the employment of private respondents is regular. They perform work
necessary and desirable in the business of the petitioner. Without the services of the
bus drivers and conductors, like the private respondents, the petitioner could not
have operated and managed its business of providing transportation services to the
public. However, not all employees paid on commission basis can legally be
considered as regular employees. In the case of Singer Sewing Machine Company v.
Drilon, it was held that while certain individuals were hired to work as collectors or
collecting agents of the company, nevertheless, per a certain written agreement
they were considered as independent contractors and not employees of the
company.
As its principal contention, petitioner ascribes grave abuse of discretion on the part of
public respondent NLRC in affirming the decision of the Labor Arbiter for being
violative of due process and in not ordering the latter to conduct a formal hearing of
the case.
Petitioner argues that it did not receive any notice for the hearing scheduled on April
14, 1992. It stressed that the registered mail supposedly containing the notice for the
aforesaid hearing was returned unclaimed and that no registry notice from the post
office was ever delivered to it so that it could claim the same. Petitioner likewise
contends that public respondent NLRC disregarded the pronouncement of this Court
in the case of Johnson & Johnson (Phils.), Inc. v. Court of Appeals,8 where we held
that:
The general rule is that service by registered mail is complete upon actual receipt
thereof by the addressee. The exception is where the addressee does not claim his
mail within 5 days from the date of the first notice of the postmaster, in which case
the service takes effect upon the expiration of such period.
Inasmuch as the exception refers to only constructive and not actual service, such
exception must be applied only upon conclusive proof that a first notice was duly
sent by the postmaster to the addressee. The presumption that official duty has been
regularly performed is not applicable where there is evidence to the contrary, as in
the case at bar.
A certification from the postmaster would be the best evidence to prove that the
notice has been validly sent. The mailman may also testify that the notice was
actually delivered, as we held in Aldecoa vs. Hon. Arellano and Siquenza. The
postmaster should certify not only that the notice was issued or sent but also as to
how, when and to whom the delivery thereof was made.
In the light of the record and the evidence adduced in these two (2) related cases,
petitioners argument appears to be without basis. Hence, the petition must be
dismissed.
Sections 4 and 5 of the Revised Rules of Procedure of the NLRC, provides the rule for
the service of summons and notices in NLRC cases, to wit:
Sec 4. Service of notices and resolutions.a) Notices or summons and copies of
orders, resolutions or decisions shall be served personally by the bailiff or the duly
authorized public officer or by registered mail on the parties to the case within five
(5) days from receipt thereof by the serving officer; Provided, that where a party is
represented by counsel or authorized representative, service shall be made on the
latter.
xxx xxx xxx
Sec. 5. Proof and completeness of service.The return is prima facie proof of the
facts indicated therein. Service by registered mail is complete upon receipt by the
addressee or his agent.9
Considering the above-quoted provisions of the Revised Rules of Procedure of the
NLRC, service by registered mail is complete after five (5) days from the date of first
notice of the postmaster in the event that the addressee fails to claim his registered
mail from the post office. In the instant cases, petitioner merely stressed that the
registered mail containing the notice for the aforesaid scheduled hearing was
returned unclaimed and that it did not allegedly receive any registry notice from
the post office. However, it is a fundamental rule that unless the contrary is proven,
official duty is presumed to have been performed regularly and judicial proceedings
regularly conducted. This presumption of the regularity of the quasi-judicial
proceedings before DOLE includes the presumption of regularity of service of
summons and other notices. It was therefore incumbent upon herein petitioner to
rebut that legal presumption with competent and proper evidence, for the return of
the registered mail as unclaimed is prima facie proof of the facts indicated
therein.10 But petitioner failed to do so.
A thorough review of the record of this case discloses the following facts and
circumstances, to wit:
1. Petitioner was notified of the hearing on March 12, 1992, at 10:30 oclock in the
morning, with the following warning:
Failure to appear and submit position paper with affidavit of witness or witnesses and Likewise, notwithstanding petitioners allegation that it has not received the notices
other documentary evidence, if any, will be construed as a waiver of the opportunity of the Labor Arbiter, it, however, admittedly received a copy of the decision of the
to be heard and case will be heard ex-parte. Labor Arbiter, and then seasonably pleaded its case by way of appeal before the
NLRC In the interest of justice, the NLRC considered petitioners position paper, even
2. Since there was no proof of service to petitioner of this scheduled hearing, another
if it was filed late.
hearing was set on March 26, 1992 at 1:30 oclock in the afternoon.
As to the question whether the Labor Arbiter should have conducted a formal
3. However, on March 16, 1992, petitioner through its liason officer, Mr. Napoleon
hearing, Section 4 of Rule V of the New Rules of Procedure of the NLRC, clearly
Pandes, filed a Manifestation and Motion to Reset Schedule Hearing, stating, among
provides that:
other things, that the hearing be reset to April 9, 1992 at 9:30 oclock in the morning
or at a later date and time convenient to this Honorable Commission. Determination of Necessity of Hearing.Immediately after the submission by the
parties of their position papers/memorandum, the Labor Arbiter shall motu proprio
4. Thus another hearing was set on April 14, 1992 at 10:00 oclock in the morning
determine whether there is need for a formal trial or hearing. At this stage, he may,
again with the same warning as above quoted. 5. In the April 14, 1992 hearing,
at his discretion and for the purpose of making such determination, ask clarificatory
private respondents appeared as scheduled and waited up to 11:05 a.m., but
questions to further elicit facts or information, including but not limited to the
petitioner failed to appear and submit the required position paper, hence, upon
subpoena of relevant documentary evidence, if any from any party or witness.
motion of private respondents the case was submitted for decision.
It is clear from the above-quoted procedural rule that the Labor Arbiter has the
As clearly gleaned from the foregoing facts, petitioner was afforded more than an
authority to determine whether or not there is a necessity for conducting formal
adequate opportunity to present its evidence. In fact, on March 16, 1992, petitioner
hearings in cases brought before him for adjudication. In other words, the holding of
through its Liason Officer, Mr. Napoleon Pandes, even filed a Manifestation and
a formal hearing or trial is discretionary with the Labor Arbiter and is something that
Motion, praying that the hearing set on March 26, 1992 be reset to April 9, 1992 or at
the parties cannot demand as a matter of right. It is entirely within the authority of
a later date and time convenient to the Commission. But on the re-scheduled hearing
the Labor Arbiter to decide a labor case before him, based on the position papers and
on April 14, 1992, petitioner again failed to appear nor did it file its position paper. If
supporting documents of the parties, without a trial or formal hearing. The
petitioner were really concerned with the outcome of the instant cases, petitioner
requirement of due process in labor cases before a Labor Arbiter is satisfied when the
should have verified, at the very least whether its Manifestation and Motion was
parties are given the opportunity to submit their position papers to which they are
acted upon. As correctly stated by the NLRC in its Resolution:
supposed to attach all the supporting documents or documentary evidence that
Obviously, respondents were not so inclined as they must have found the same as an would prove their respective claims, in the event the Labor Arbiter determines that
excuse to delay the proceedings in the instant cases. For how else can one explain no formal hearing would be conducted or that such hearing was not necessary.
respondents failure to show up or follow up on their motions requesting for
Equally without merit is petitioners contention that public respondent NLRC
resetting, and their filing of a position paper five (5) long months after filing their
committed grave abuse of discretion amounting to lack of jurisdiction in holding that
motions and only after a Decision not to their liking was rendered by the Labor
private respondents were illegally dismissed. Petitioners contention that the Labor
Arbiter.
Arbiter ruled in favor of private respondents not because of the evidence submitted
by the private respondents but because of petitioners failure to appear in the
scheduled hearing on April 14, 1992 is without factual basis as shown by the record.
The NLRC, in arriving at its decision regarding the illegal dismissal of private
respondents, considered the position papers of the parties and the evidence on
record. The NLRC in its decision agreed with the Labor Arbiters findings and
conclusions and found nothing substantial in petitioners position paper to warrant a
reversal thereof, thus:
At any rate, and in the interest of justice, We have considered respondents Position
Paper, although filed belatedly, and We find that the allegations therein and the
evidence introduced in support thereof (See annexes A to D-12 of respondents
Position Paper; pp. 62-73 of the Records) do not suffice to support respondents
claim that complainants were not dismissed from their employment.
We, therefore, find that the Labor Arbiter did not commit any error in holding that:
Complainants claim that due to their union activities, as they were the ones
instrumental in the formation of the union in the respondents premises, enlisted
employees to be members of the local union, coupled with the fact that a petition for
certification of an election was filed before the Department of Labor and
Employment, in view of which they were not given any bus assignments, which is
tantamount to their dismissal from the service, appears to be credible and with basis.
As above stated, respondents miserably failed to controvert this fact, thus,
complainants should be reinstated to their former positions, Roman Domasig as
driver, and Zenaida Domasig as conductress, with full backwages and other benefits
and without loss of seniority rights.
Well-settled is the jurisprudential rule that factual findings of quasi-judicial agencies,
such as the NLRC, which have acquired expertise because their jurisdiction is confined
to specific matters, are generally accorded not only respect but even finality. They are
binding upon this Court which is not a trier of facts. Only upon clear showing of grave
abuse of discretion, or that such factual findings were arrived at arbitrarily or in
disregard of the evidence on record will this Court step in and proceed to make its
own independent evaluation of the facts.13 No cogent reason exists in the instant
cases to deviate from this settled rule.
In termination cases, like the ones before us, the burden of proving that the dismissal
of the employees was for a valid and authorized cause rests on the employer. It was
incumbent upon petitioner Columbus Philippines Bus Corporation to show by
substantial evidence that the termination of the employment of private respondents
was validly made and failure to discharge that duty would mean that the dismissal is
not justified and therefore illegal.14 On the other hand, abandonment as a just and
valid ground for dismissal requires the deliberate, unjustified refusal of the employee
to resume his employment. Mere absence or failure to report for work, after notice
to return, is not enough to amount to such abandonment.
For a valid finding of abandonment, two (2) factors must be present, viz.: (a) the
failure to report for work or absence without valid or justifiable reason; and (b) a
clear intention to sever employer-employee relationship, with the second element as
the more determinative factor being manifested by some overt acts.15 The herein
petitioner failed to present evidence to justify the dismissal of the private
respondents. The position paper of petitioner merely contains bare allegations that
the hiring of private respondents was purely on commission basis; that they have no
working hours; that they are not required to work everyday and that they work only
when they wish to earn. It also alleged that private respondents were not dismissed
nor suspended, but that they allegedly abandoned their jobs by simply failing to
work.
From the factual findings of the Labor Arbiter, the absence of private respondents
from work was not without valid or justifiable reason. First, on January 21 and 22,
1992, private respondents were asked to relinquish their assigned buses and from
that date forward, they were not given bus assignments. Thus, under the
circumstances, we find private respondents absences supported with valid reason.
Second, it appeared that private respondents never intended to sever their working
relationship with petitioner. Two weeks after private respondents were not given bus
assignments, they filed their subject complaint for illegal dismissal with the DOLE. An
employee who forthwith takes steps to protest his layoff cannot be said to have
abandoned his work.
It is our view and we hold that the finding and conclusion of the Labor Arbiter and the
respondent NLRC that private respondents were illegally dismissed are correct and
not arbitrary. We find no cogent reason to reverse the same.
However, the amount of backwages must be properly computed inasmuch as in their
respective complaints, private respondents Roman and Zenaida Domasig alleged that
they received a daily income ranging from Three Hundred Fifty Pesos (P350.00) to Six
Hundred Fifty Pesos (P650.00), and Two Hundred Fifty Pesos (P250.00) to Five
Hundred Pesos (P500.00) respectively. The pronouncement of this Court in the case
of Icawat v. NLRC,16 is relevant and instructive, to wit:
x x x, the dismissal of private respondent being illegal, he is entitled to the payment
of backwages. We do not, however, agree with the amount awarded to herein
private respondent in the absence of any factual basis thereof. Private respondent
has not presented any evidence to warrant such award. The statement in his
complaint that he is earning P800.00 to P1,000.00 when he is driving petitioners
jeepney on a straight basis, or P500.00 when driving on half shift basis, is purely
self-serving and speculative.
WHEREFORE, the petition is hereby DISMISSED, and the challenged Resolution of
public respondent NLRC is AFFIRMED. The computation of the amount of backwages
to which private respondents Roman Domasig and Zenaida Domasig are entitled is
hereby REMANDED to the Labor Arbiter for appropriate action.
SO ORDERED.
Bellosillo (Chairman), Mendoza, Quisumbing and Buena, JJ., concur.
Petition dismissed, resolution affirmed.
G.R. No. 91307. January 24, 1991.*
SINGER SEWING MACHINE COMPANY, petitioner, vs. HON. FRANKLIN M. DRILON,
MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNION-
BAGUIO (SIMACUB), respondents.
Labor Law; Employer-Employee Relationship; The following elements are generally
considered in the determination of employer-employee relationship: (1) selection and
engagement of the employee; (2) payment of wages; (3) the power of dismissal; and
(4) the power to control the employees conduct.The present case mainly calls for
the application of the control test, which if not satisfied, would lead us to conclude
that no employer-employee relationship exists. Hence, if the union members are not
employees, no right to organize for purposes of bargaining, nor to be certified as such
bargaining agent can ever be recognized.
Same; Same; Same; Control-test; Independent Contractors; Employer-employee
relationship does not exist between petitioner-company and its collecting agents
considering that petitioner-company exercises control only with respect to the result
or amount of collection and not with respect to the means and method of
collection.The Agreement confirms the status of the collecting agent in this case as
an independent contractor not only because he is explicitly described as such but also
because the provisions permit him to perform collection services for the company
without being subject to the control of the latter except only as to the result of his
work. After a careful analysis of the contents of the agreement, we rule in favor of
the petitioner. The requirement that collection agents utilize only receipt forms and
report forms issued by the Company and that reports shall be submitted at least once
a week is not necessarily an indication of control over the means by which the job of
collection is to be performed. The agreement itself specifically explains that receipt
forms shall be used for the purpose of avoiding a co-mingling of personal funds of the
agent with the money collected on behalf of the Company. Likewise, the use of
standard report forms as well as the regular time within which to submit a report of
collection are intended to facilitate order in office procedures. Even if the report
requirements are to be called control measures, any control is only with respect to
the end result of the collection since the requirements regulate the things to be done
after the performance of the collection job or the rendition of the service.
Same; Same; Same; Same; Same; The language of the agreement reveals that the
designation as collection agent does not create an employment relationship and that
the applicant is to be considered at all times as an independent contractor.A
thorough examination of the facts of the case leads us to the conclusion that the
existence of an employer-employee relationship between the Company and the
collection agents cannot be sustained. The plain language of the agreement reveals
that the designation as collection agent does not create an employment relationship
and that the applicant is to be considered at all times as an independent contractor.
This is consistent with the first rule of interpretation that the literal meaning of the
stipulations in the contract controls (Article 1370, Civil Code; La Suerte Cigar and
Cigarette Factory v. Director of Bureau of Labor Relations, 123 SCRA 679 [1983]). No
such words as to hire and employ are present.
Moreover, the agreement did not fix an amount for wages nor the required working
hours. Compensation is earned only on the basis of the tangible results produced, i.e.,
total collections made (Sarra v. Agarrado, 166 SCRA 625 [1988]). In Investment
Planning Corp. of the Philippines v. Social Security System, 21 SCRA 924 [1967] which
involved commission agents, this Court had the occasion to rule, thus: We are
convinced from the facts that the work of petitioners agents or registered
representatives more nearly approximates that of an independent contractor than
that of an employee. The latter is paid for the labor he performs, that is, for the acts
of which such labor consists; the former is paid for the result thereof x x x. xxx xxx xxx
Even if an agent of petitioner should devote all of his time and effort trying to sell its
investment plans he would not necessarily be entitled to compensation therefor. His
right to compensation depends upon and is measured by the tangible results he
produces.
Same; Same; Same; Art. 280 of the Labor Code is not the yardstick for determining the
existence of an employment relationship because it merely distinguishes between
regular and casual employees.The Court finds the contention of the respondents
that the union members are employees under Article 280 of the Labor Code to have
no basis. The definition that regular employees are those who perform activities
which are desirable and necessary for the business of the employer is not
determinative in this case. Any agreement may provide that one party shall render
services for and in behalf of another for a consideration (no matter how necessary for
the latters business) even without being hired as an employee. This is precisely true
in the case of an independent contractorship as well as in an agency agreement. The
Court agrees with the petitioners argument that Article 280 is not the yardstick for
determining the existence of an employment relationship because it merely
distinguishes between two kinds of employees, i.e., regular employees and casual
employees, for purposes of determining the right of an employee to certain benefits,
to join or form a union, or to security of tenure. Article 280 does not apply where the
existence of an employment relationship is in dispute.
Same; Same; Unions; Since private respondents are not employees of the company,
they are not entitled to the constitutional right to join or form a labor organization for
purposes of collective bargaining.The Court finds that since private respondents are
not employees of the Company, they are not entitled to the constitutional right to
join or form a labor organization for purposes of collective bargaining. Accordingly,
there is no constitutional and legal basis for their union to be granted their petition
for direct certification. This Court made this pronouncement in La Suerte Cigar and
Cigarette Factory v. Director of Bureau of Labor Relations, supra: x x x The question
of whether employer-employee relationship exists is a primordial consideration
before extending labor benefits under the workmens compensation, social security,
medicare, termination pay and labor relations law. It is important in the
determination of who shall be included in a proposed bargaining unit because it is the
sine qua non, the fundamental and essential condition that a bargaining unit be
composed of employees. Failure to establish this juridical relationship between the
union members and the employer affects the legality of the union itself. It means the
ineligibility of the union members to present a petition for certification election as
well as to vote therein x x x. (At p. 689)
PETITION for certiorari to review the order and resolution of the Department of Labor
and Employment.
The facts are stated in the opinion of the Court.
Misa, Castro, Villanueva, Oposa, Narvasa & Pesigan for petitioner.
Domogan, Lockey, Orate & Dao-ayan Law Office for private respondent.
GUTIERREZ, JR., J.:
This is a petition for certiorari assailing the order of MedArbiter Designate Felix B.
Chaguile, Jr., the resolution of then Labor Secretary Franklin M. Drilon affirming said
order on appeal and the order denying the motion for reconsideration in the case
entitled In Re: Petition for Direct Certification as the Sole and Exclusive Collective
Bargaining Agent of Collectors of Singer Sewing Machine Company-Singer Machine
Collectors Union-Baguio (SIMACUB) docketed as OS-MA-A-7-119-89 (IRD Case No.
02-89 MED).
On February 15, 1989, the respondent union filed a petition for direct certification as
the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine
Company, Baguio City branch (hereinafter referred to as the Company).
The Company opposed the petition mainly on the ground that the union members
are actually not employees but are independent contractors as evidenced by the
collection agency agreement which they signed.
The respondent Med-Arbiter, finding that there exists an employer-employee
relationship between the union members and the Company, granted the petition for
certification election. On appeal, Secretary of Labor Franklin M. Drilon affirmed it.
The motion for reconsideration of the Secretarys resolution was denied. Hence, this
petition in which the Company alleges that public respondents acted in excess of
jurisdiction and/or committed grave abuse of discretion in that:
a) the Department of Labor and Employment (DOLE) has no jurisdiction over the case
since the existence of employer-employee relationship is at issue;
b) the right of petitioner to due process was denied when the evidence of the union
members being commission agents was disregarded by the Labor Secretary;
c) the public respondents patently erred in finding that there exists an employer-
employee relationship;
d) the public respondents whimsically disregarded the well-settled rule that
commission agents are not employees but are independent contractors.
The respondents, on the other hand, insist that the provisions of the Collection
Agency Agreement belie the Companys position that the union members are
independent contractors. To prove that union members are employees, it is asserted
that they perform the most desirable and necessary activities for the continuous and
effective operations of the business of the petitioner Company (citing Article 280 of
the Labor Code). They add that the termination of the agreement by the petitioner
pending the resolution of the case before the DOLE only shows the weakness of
petitioners stand and was for the purpose of frustrating the constitutionally
mandated rights of the members of private respondent union to self-organization
and collective organization. They also contend that under Section 8, Rule 8, Book No.
III of the Omnibus Rules Implementing the Labor Code, which defines job-contracting,
they cannot legally qualify as independent contractors who must be free from control
of the alleged employer, who carry independent businesses and who have substantial
capital or investment in the form of equipment, tools, and the like necessary in the
conduct of the business.
The present case mainly calls for the application of the control test, which if not
satisfied, would lead us to conclude that no employer-employee relationship exists.
Hence, if the union members are not employees, no right to organize for purposes of
bargaining, nor to be certified as such bargaining agent can ever be recognized. The
following elements are generally considered in the determination of the employer-
employee relationship; (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the
employees conductalthough the latter is the most important element (Mafinco
Trading Corporation v. Ople, 70 SCRA 139 [1976]; Development Bank of the
Philippines v. National Labor Relations Commission, 175 SCRA 537 [1989]; Rosario
Brothers, Inc. v. Ople, 131 SCRA 72 [1984]; Broadway Motors Inc. v. NLRC, 156 SCRA
522 [1987]; Brotherhood Labor Unity Movement in the Philippines v. Zamora, 147
SCRA 49 [1986]).
The Collection Agency Agreement defines the relationship between the Company and
each of the union members who signed a contract. The petitioner relies on the
following stipulations in the agreements: (a) a collector is designated as a collecting
agent who is to be considered at all times as an independent contractor and not
employee of the Company; (b) collection of all payments on installment accounts are
to be made monthly or oftener; (c) an agent is paid his compensation for service in
the form of a commission of 6% of all collections made and turned over plus a bonus
on said collections; (d) an agent is required to post a cash bond of three thousand
pesos (P3,000.00) to assure the faithful performance and observance of the terms
and conditions under the agreement; (e) he is subject to all the terms and conditions
in the agreement; (f) the agreement is effective for one year from the date of its
execution and renewable on a yearly basis; and (g) his services shall be terminated in
case of failure to satisfy the minimum monthly collection performance required,
failure to post a cash bond, or cancellation of the agreement at the instance of either
party unless the agent has a pending obligation or indebtedness in favor of the
Company.
Meanwhile, the respondents rely on other features to strengthen their position that
the collectors are employees. They quote paragraph 2 which states that an agent
shall utilize only receipt forms authorized and issued by the Company. They also note
paragraph 3 which states that an agent has to submit and deliver at least once a week
or as often as required a report of all collections made using report forms furnished
by the Company. Paragraph 4 on the monthly collection quota required by the
Company is deemed by respondents as a control measure over the means by which
an agent is to perform his services.
The nature of the relationship between a company and its collecting agents depends
on the circumstances of each particular relationship. Not all collecting agents are
employees and neither are all collecting agents independent contractors. The
collectors could fall under either category depending on the facts of each case.
The Agreement confirms the status of the collecting agent in this case as an
independent contractor not only because he is explicitly described as such but also
because the provisions permit him to perform collection services for the company
without being subject to the control of the latter except only as to the result of his
work. After a careful analysis of the contents of the agreement, we rule in favor of
the petitioner.
The requirement that collection agents utilize only receipt forms and report forms
issued by the Company and that reports shall be submitted at least once a week is
not necessarily an indication of control over the means by which the job of collection
is to be performed. The agreement itself specifically explains that receipt forms shall
be used for the purpose of avoiding a co-mingling of personal funds of the agent with
the money collected on behalf of the Company. Likewise, the use of standard report
forms as well as the regular time within which to submit a report of collection are
intended to facilitate order in office procedures. Even if the report requirements are
to be called control measures, any control is only with respect to the end result of the
collection since the requirements regulate the things to be done after the
performance of the collection job or the rendition of the service.
The monthly collection quota is a normal requirement found in similar contractual
agreements and is so stipulated to encourage a collecting agent to report at least the
minimum amount of proceeds. In fact, paragraph 5, section b gives a bonus, aside
from the regular commission every time the quota is reached. As a requirement for
the fulfillment of the contract, it is subject to agreement by both parties. Hence, if the
other contracting party does not accede to it, he can choose not to sign it. From the
records, it is clear that the Company and each collecting agent intended that the
former take control only over the amount of collection, which is a result of the job
performed.
The respondents contention that the union members are employees of the Company
is based on selected provisions of the Agreement but ignores the following
circumstances which respondents never refuted either in the trial proceedings before
the labor officials nor in its pleadings filed before this Court.
1. The collection agents are not required to observe office hours or report to
Singers office everyday except, naturally and necessarily, for the purpose of
remitting their collections.
2. The collection agents do not have to devote their time exclusively for SINGER.
There is no prohibition on the part of the collection agents from working elsewhere.
Nor are these agents required to account for their time and submit a record of their
activity.
3. The manner and method of effecting collections are left solely to the discretion of
the collection agents without any interference on the part of Singer.
4. The collection agents shoulder their transportation expenses incurred in the
collections of the accounts assigned to them.
5. The collection agents are paid strictly on commission basis. The amounts paid to
them are based solely on the amounts of collection each of them make. They do not
receive any commission if they do not effect any collection even if they put a lot of
effort in collecting. They are paid commission on the basis of actual collections.
6. The commissions earned by the collection agents are directly deducted by them
from the amount of collections they are able to effect. The net amount is what is
then remitted to Singer. (Rollo, pp. 7-8)
If indeed the union members are controlled as to the manner by which they are
supposed to perform their collections, they should have explicitly said so in detail by
specifically denying each of the facts asserted by the petitioner. As there seems to be
no objections on the part of the respondents, the Court finds that they miserably
failed to defend their position.
The plain language of the agreement reveals that the designation as collection agent
does not create an employment relationship and that the applicant is to be
considered at all times as an independent contractor. This is consistent with the first
rule of interpretation that the literal meaning of the stipulations in the contract
controls (Article 1370, Civil Code; La Suerte Cigar and Cigarette Factory v. Director of
Bureau of Labor Relations, 123 SCRA 679 [1983]). No such words as to hire and
employ are present. Moreover, the agreement did not fix an amount for wages nor
the required working hours. Compensation is earned only on the basis of the tangible
results produced, i.e., total collections made (Sarra v. Agarrado, 166 SCRA 625
[1988]). In Investment Planning Corp. of the Philippines v. Social Security System, 21
SCRA 924 [1967] which involved commission agents, this Court had the occasion to
rule, thus:
We are convinced from the facts that the work of petitioners agents or registered
representatives more nearly approximates that of an independent contractor than
that of an employee. The latter is paid for the labor he performs, that is, for the acts
of which such labor consists; the former is paid for the result thereof x x x.
Even if an agent of petitioner should devote all of his time and effort trying to sell its
investment plans he would not necessarily be entitled to compensation therefor. His
right to compensation depends upon and is measured by the tangible results he
produces.
Moreover, the collection agent does his work more or less at his own pleasure
without a regular daily time frame imposed on him (Investment Planning Corporation
of the Philippines v. Social Security System, supra; See also Social Security System v.
Court of Appeals, 30 SCRA 210 [1969]).
The grounds specified in the contract for termination of the relationship do not
support the view that control exists for the causes of termination thus specified
have no relation to the means and methods of work that are ordinarily required of or
imposed upon employees. (Investment Planning Corp. of the
The last and most important element of the control test is not satisfied by the terms
and conditions of the contracts. There is nothing in the agreement which implies
control by the Company not only over the end to be achieved but also over the
means and methods in achieving the end (LVN Pictures, Inc. v. Philippine Musicians
Guild, 1 SCRA 132 [1961]).
The Court finds the contention of the respondents that the union members are
employees under Article 280 of the Labor Code to have no basis. The definition that
regular employees are those who perform activities which are desirable and
necessary for the business of the employer is not determinative in this case. Any
agreement may provide that one party shall render services for and in behalf of
another for a consideration (no matter how necessary for the latters business) even
without being hired as an employee. This is precisely true in the case of an
independent contractorship as well as in an agency agreement. The Court agrees with
the petitioners argument that Article 280 is not the yardstick for determining the
existence of an employment relationship because it merely distinguishes between
two kinds of employees, i.e., regular employees and casual employees, for purposes
of determining the right of an employee to certain benefits, to join or form a union,
or to security of tenure. Article 280 does not apply where the existence of an
employment relationship is in dispute.
Even Section 8, Rule 8, Book III of the Omnibus Rules Implementing the Labor Code
does not apply to this case. Respondents assert that the said provision on job
contracting requires that for one to be considered an independent contractor, he
must have substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct
of his business. There is no showing that a collection agent needs tools and
machineries. Moreover, the provision must be viewed in relation to Article 106 of the
Labor Code which provides:
Art. 106. Contractor or subcontractor.Whenever an employer enters into a
contract with another person for the performance of the formers work, the
employees of the contractor and of the latters subcontractor, if any, shall be paid in
accordance with the provisions
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such employees to the extent of the
work performed under the contract, in the same manner and extent that he is liable
to employees directly employed by him.
xxx xxx xxx
There is labor-only contracting where the person supplying workers to an employer
does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by
such persons are performing activities which are directly related to the principal
business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly employed by
him. (p. 20)
It can readily be seen that Section 8, Rule 8, Book III and Article 106 are relevant in
determining whether the employer is solidarily liable to the employees of an alleged
contractor and/or sub-contractor for unpaid wages in case it is proven that there is a
job-contracting situation.
The assumption of jurisdiction by the DOLE over the case is justified as the case was
brought on appeal by the petitioner itself which prayed for the reversal of the Order
of the MedArbiter on the ground that the union members are not its employees.
Hence, the petitioner submitted itself as well as the issue of existence of an
employment relationship to the jurisdiction of the DOLE which was faced with a
dispute on an application for certification election.
The Court finds that since private respondents are not employees of the Company,
they are not entitled to the constitutional right to join or form a labor organization
for purposes of collective bargaining. Accordingly, there is no constitutional and legal
basis for their union to be granted their petition for direct certification. This Court
made this pronouncement in La Suerte Cigar and Cigarette Factory v. Director of
Bureau of Labor Relations, supra:
x x x The question of whether employer-employee relationship exists is a primordial
consideration before extending labor benefits under the workmens compensation,
social security, medicare, termination pay and labor relations law. It is important in
the determination of who shall be included in a proposed bargaining unit because, it
is the sine qua non, the fundamental and essential condition that a bargaining unit be
composed of employees. Failure to establish this juridical relationship between the
union members and the employer affects the legality of the union itself. It means the
ineligibility of the union members to present a petition for certification election as
well as to vote therein x x x. (At p. 689)
WHEREFORE, the Order dated June 14, 1989 of Med-Arbiter Designate Felix B.
Chaguile, Jr., the Resolution and Order of Secretary Franklin M. Drilon dated
November 2, 1989 and December 14, 1989, respectively are hereby REVERSED and
SET ASIDE. The petition for certification election is ordered dismissed and the
temporary restraining order issued by the Court on December 21, 1989 is made
permanent.
SO ORDERED.
Fernan (C.J., Chairman), Feliciano and Bidin, JJ., concur.
Resolution and order reversed and set aside.