PHILIPS SEMICONDUCTORS INC.
vs other hand, petitioner contends that
FADRIQUELA Case Digest
[G.R. No. 141717. April 14, 2004]
PHILIPS SEMICONDUCTORS (PHILS.), INC.,
petitioner, vs. ELOISA FADRIQUELA,
respondent.
FACTS: The petitioner Philips
Semiconductors is a domestic
corporation engaged in the production
and assembly of semiconductors such
as power devices, RF modules, CATV
modules, RF and metal transistors and
glass diods. It caters to domestic and
foreign corporations that manufacture
computers, telecommunications
equipment and cars. Aside from
contractual employees, the petitioner
employed 1,029 regular workers. The
employees were subjected to periodic
performance appraisal based on
output, quality, attendance and work
attitude.[2] One was required to obtain
a performance rating of at least 3.0 for
the period covered by the performance
appraisal to maintain good standing as
an employee.
Respondent, during her 5 consecutive
contracts, got the following ratings: 3.15,
3.8, 3.4, and 2.8. The reason for her
failed mark on the last contract was her
absences. She was then asked to
explain such absences but she failed to
do the same. Subsequently,
respondent’s supervisor recommended
that her employment be terminated
due to habitual absenteeism. Thus, her
contract of employment was no longer
renewed. Respondent then filed a
complaint for illegal dismissal. On the
respondent was not dismissed; her
contract merely expired.
The Labor Arbiter and the NLRC based
their decision on the CBA between the
petitioner and the labor union which
provides that a contractual employee
would only be considered a regular
employee if he has completed 17
months of service and a performance
rating of at least 3.0. The respondent
filed a motion for reconsideration but
the NLRC denied the same. On appeal,
the CA reversed the decision of the
NLRC. Hence, this petition.
ISSUE: Whether or not respondent was
still a contractual employee of the
company.
HELD: The SC agreed with the appellate
court. Article 280 of the Labor Code of
the Philippines was emplaced in our
statute books to prevent the
circumvention by unscrupulous
employers of the employee’s right to be
secure in his tenure by indiscriminately
and completely ruling out all written
and oral agreements inconsistent with
the concept of regular employment
defined therein. The language of the
law manifests the intent to protect the
tenurial interest of the worker who may
be denied the rights and benefits due a
regular employee because of lopsided
agreements with the economically
powerful employer who can maneuver
to keep an employee on a casual or
temporary status for as long as it is
convenient to it. In tandem with Article
281 of the Labor Code, Article 280 was
designed to put an end to the
pernicious practice of making
permanent casuals of our lowly
employees by the simple expedient of
extending to them temporary or
probationary appointments, ad
infinitum.
The two kinds of regular employees
under the law are (1) those engaged to
perform activities which are necessary
or desirable in the usual business or
trade of the employer; and (2) those
casual employees who have rendered
at least one year of service, whether
continuous or broken, with respect to
the activities in which they are
employed. The primary standard to
determine a regular employment is the
reasonable connection between the
particular activity performed by the
employee in relation to the business or
trade of the employer. The test is
whether the former is usually necessary
or desirable in the usual business or
trade of the employer. 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 of the employer. Hence, the
employment is also considered regular,
but only with respect to such activity
and while such activity exists. The law
does not provide the qualification that
the employee must first be issued a
regular appointment or must be
declared as such before he can
acquire a regular employee status.
In this case, the original contract of
employment had been extended or
renewed four times, to the same
position, with the same chores. Such a
continuing need for the services of the
respondent is sufficient evidence of the
necessity and indispensability of her
services to the petitioner’s business. By
operation of law, then, the respondent
had attained the regular status of her
employment with the petitioner, and is
thus entitled to security of tenure as
provided for in Article 279 of the Labor
Code.
The limited period specified in
petitioner’s employment contract
having been imposed precisely to
circumvent the constitutional guarantee
on security of tenure should, therefore,
be struck down or disregarded as
contrary to public policy or morals. To
uphold the contractual arrangement
would, in effect, permit the former to
avoid hiring permanent or regular
employees by simply hiring them on a
temporary or casual basis, thereby
violating the employee’s security of
tenure in their jobs.
Under Section 3, Article XVI of the
Constitution, it is the policy of the State
to assure the workers of security of
tenure and free them from the
bondage of uncertainty of tenure
woven by some employers into their
contracts of employment. The
guarantee is an act of social justice.
When a person has no property, his job
may possibly be his only possession or
means of livelihood and those of his
dependents. When a person loses his
job, his dependents suffer as well. The
worker should therefor be protected
and insulated against any arbitrary
deprivation of his job.
The ruling in Brent School, Inc. v. Zamora
is also not applicable in this case
because it could not be supposed that
private respondents and all other so-
called “casual” workers of the petitioner
KNOWINGLY and VOLUNTARILY agreed
to the employment contract. Almost
always, they agree to any terms of an
employment contract just to get
employed considering that it is difficult
to find work given their ordinary
qualifications. Their freedom to contract
is empty and hollow because theirs is
the freedom to starve if they refuse to
work as casual or contractual workers.
Indeed, to the unemployed, security of
tenure has no value. It could not then
be said that petitioner and private
respondents “dealt with each other on
more or less equal terms with no moral
dominance whatever being exercised
by the former over the latter.
The petitioner’s reliance on the CBA is
also misplaced. It is the express
mandate of the CBA not to include
contractual employees within its
coverage. Such being the case, we see
no reason why an agreement between
the representative union and private
respondent, delaying the regularization
of contractual employees, should bind
petitioner as well as other contractual
employees. Indeed, nothing could be
more unjust than to exclude contractual
employees from the benefits of the CBA
on the premise that the same contains
an exclusionary clause while at the
same time invoke a collateral
agreement entered into between the
parties to the CBA to prevent a
contractual employee from attaining
the status of a regular employee.
The CBA, during its lifetime, constitutes
the law between the parties. Such
being the rule, the aforementioned CBA
should be binding only upon private
respondent and its regular employees
who were duly represented by the
bargaining union. The agreement
embodied in the “Minutes of Meeting”
between the representative union and
private respondent, providing that
contractual employees shall become
regular employees only after seventeen
months of employment, cannot bind
petitioner. Such a provision runs contrary
to law not only because contractual
employees do not form part of the
collective bargaining unit which
entered into the CBA with private
respondent but also because of the
Labor Code provision on regularization.
The law explicitly states that an
employee who had rendered at least
one year of service, whether such
service is continuous or broken, shall be
considered a regular employee. The
period set by law is one year. The
seventeen months provided by the
“Minutes of Meeting” is obviously much
longer. The principle is well settled that
the law forms part of and is read into
every contract without the need for the
parties expressly making reference to it.
Petition is denied.
GMA Network v. Pabriga, Arias, et al.
G.R. No. 176419 : November 27, 2013
FACTS: Private respondents were
engaged by petitioner for the latters
operations in the Technical Operations
Center as Transmitter/VTR men, as
Maintenance staff and as Cameramen.
On July 19 1999 due to the miserable
working conditions private respondents
were forced to file a complaint against
petitioner before the NLRC Regional
Arbitration Branch No. VII Cebu City.
Private respondents filed an amended
complaint raising the following
additional issues of 1) Unfair Labor
Practice; 2) Illegal dismissal; and 3)
Damages and Attorneys fees.
When Petitioner elevated the case to
the CA via a Petition for Certiorari, it
rendered its Decision denying the
petition for lack of merit. Hence, this
present Petition for Review on Certiorari.
ISSUES: Whether or not 1) the CA erred in
finding the respondents as regular
employees of the petitioner and 2)the
CA erred in awarding separation pay to
the respondents absent a finding that
respondents were illegally dismissed.
HELD:

An amicable settlement between the

parties was set but the same proved to
be futile.
The Labor Arbiter dismissed the
complaint of respondents for illegal
dismissal and unfair labor practice, but
held petitioner liable for 13th month
pay.
The NLRC reversed the Decision of the
Labor Arbiter, and held that
At the outset, we should note that the
nature of the employment is determined
by law, regardless of any contract
expressing otherwise. The supremacy of
the law over the nomenclature of the
contract and the stipulations contained
therein is to bring to life the policy
enshrined in the Constitution to afford
full protection to labor.
Labor contracts, being imbued with
public interest, are placed on a higher
plane than ordinary contracts and are
subject to the police power of the State.

a) All complainants are regular

employees with respect to the particular
Respondents claim that they are regular
activity to which they were assigned,
employees of petitioner GMA Network,
until it ceased to exist. As such, they are
Inc. The latter, on the other hand,
entitled to payment of separation pay
interchangeably characterize
computed at one (1) month salary for
respondents employment as project
every year of service;
and fixed period/fixed term
b) They are not entitled to overtime pay employment.
and holiday pay; and

c) They are entitled to 13th month pay,

ARTICLE 280. Regular and casual
night shift differential and service
employment. The provisions of written
incentive leave pay.
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 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 actually
exist.
Pursuant to the above-quoted Article
280 of the Labor Code, employees
performing activities which are usually
necessary or desirable in the employers
usual business or trade can either be
regular, project or seasonal employees,
while, as a general rule, those
performing activities not usually
necessary or desirable in the employers
usual business or trade are casual
employees. The consequence of the
distinction is found in Article 279 of the
Labor Code, which provides:
ARTICLE 279. Security of tenure. In cases
of regular employment, the employer
shall not terminate the services of an
employee except for a just cause or
when authorized by this Title. An
employee who is unjustly dismissed from
work shall be entitled to reinstatement
without loss of seniority rights and other
privileges and to his full backwages,
inclusive of allowances, and to his other
benefits or their monetary equivalent
computed from the time his
compensation was withheld from him
up to the time of his actual
reinstatement.
On the other hand, the activities of
project employees may or may not be
usually necessary or desirable in the
usual business or trade of the employer.
The term "project" could also refer to,
secondly, a particular job or
undertaking that is not within the regular
business of the corporation. Such a job
or undertaking must also be identifiably
separate and distinct from the ordinary
or regular business operations of the
employer. The job or undertaking also
begins and ends at determined or
determinable times. ALU-TUCP v.
National Labor Relations Commission,
G.R. No. 109902, August 2, 1994
The jobs and undertakings are clearly
within the regular or usual business of
the employer company and are not
identifiably distinct or separate from the
other undertakings of the company.
There is no denying that the manning of
the operations center to air
commercials, acting as transmitter/VTR
men, maintaining the equipment, and
acting as cameramen are not
undertakings separate or distinct from
the business of a broadcasting
company.
In sum, we affirm the findings of the
NLRC and the Court of Appeals that
respondents are regular employees of
petitioner. As regular employees, they
are entitled to security of tenure and
therefore their services may be
terminated only for just or authorized
causes. Since petitioner failed to prove
any just or authorized cause for their
termination, we are constrained to
affirm the findings of the NLRC and the
Court of Appeals that they were illegally
dismissed.
Since the respondents were illegally
dismissed, they entitled to separation
pay in lieu of reinstatement.
Abasolo v. NLRC
Facts:
1. The private respondent La Union
Tobacco (Lutorco), owned by See Lun
Chan is engaged in buying/processing
of tobacco and its by-products. The
petitioners worked in respondent
company but work was interrupted
when Tabacalera took over the Lutorco
operations due to alleged losses.
Aggrieved, the petitioners filed a
complaint for separation pay and
dismissal. The respondent contended
that it is exempt from payment of
separation pay and denied that there
was termination of employees' services.
2. The Labor Arbiter dismissed the
complaint and held that the petitioners
are not entitled to separation benefits
since Lutorco ceased operations due to
serious business losses. The NLRC
affirmed said ruling.
Issue: W/N the petitioners are seasonal
workers
RULING: No, the petitioners are
considered regular and seasonal
employees. They performed services
necessary and indispensable to
Lutorco's business. The nature of one's
employment does not depend solely on
the will or word of the employer nor on
the procedure of hiring and manner of
designating the employee but on the
nature of the activity to be performed
considering the employer's nature of
business and the duration and scope of
work to be done.
As held in previous decisions, seasonal
workers are those 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.
FUJI TELEVISION NETWORK, INC. VS.
ARLENE S. ESPIRITU
G.R. NO. 204944-45 DECEMBER 3, 2014
J. Leonen
FACTS: Arlene S. Espiritu (Arlene) was
engaged by Fuji Television Network, Inc.
(Fuji) as a news
correspondent/producer tasked to
report Philippine news to Fuji through its
Manila Bureau field office. The
employment contract was initially for
one year, but was successively renewed
on a yearly basis with salary adjustments
upon every renewal.
In January 2009, Arlene was diagnosed
with lung cancer. She informed Fuji
about her condition, and the Chief of
News Agency of Fuji, Yoshiki Aoki,
informed the former that the company
had a problem with renewing her
contract considering her condition.
Arlene insisted she was still fit to work as
certified by her attending physician.
After a series of verbal and written
communications, Arlene and Fuji signed
a non-renewal contract. In
consideration thereof, Arlene
acknowledged the receipt of the total
amount of her salary from March-May
2009, year-end bonus, mid-year bonus
and separation pay. However, Arlene
executed the non-renewal contract
under protest.
Arlene filed a complaint for illegal
dismissal with the NCR Arbitration
Branch of the NLRC, alleging that she
was forced to sign the non-renewal
contract after Fuji came to know of her
illness. She also alleged that Fuji withheld
her salaries and other benefits when she
refused to sign, and that she was left
with no other recourse but to sign the
non-renewal contract to get her
salaries.
ISSUES:
1. Was Arlene an independent
contractor?
2. Was Arlene a regular employee?
3. Was Arlene illegally dismissed?
4. Did the Court of Appeals
correctly awarded reinstatement,
damages and attorney’s fees?
LAWS:
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.
Art. 279. Security of tenure. In cases of
regular employment, the employer shall
not terminate the services of an
employee except for a just cause of
when authorized by this Title. An
employee who is unjustly dismissed from
work shall be entitled to reinstatement
without loss of seniority rights and other
privileges and to his full backwages,
inclusive of allowances, and to his other
benefits or their monetary equivalent
computed from the time his
compensation was withheld from him
up to the time of his actual
reinstatement.
Thus, on the right to security of tenure,
no employee shall be dismissed, unless
there are just or authorized causes and
only after compliance with procedural
and substantive due process is
conducted.
Art. 284. Disease as ground for
termination. An employer may
terminate the services of an employee
who has been found to be suffering
from any disease and whose continued
employment is prohibited by law or is
prejudicial to his health as well as to the
health of his co-employees: Provided,
That he is paid separation pay
equivalent to at least one (1) month
salary or to one-half (1/2) month salary
for every year of service, whichever is
greater, a fraction of at least six (6)
months being considered as one (1)
whole year.
Book VI, Rule 1, Section 8 of the
Omnibus Rules Implementing the Labor
Code. Disease as a ground for dismissal.
– Where the employee suffers from a
disease and his continued employment
is prohibited by law or prejudicial to his
health or to the health of his co-
employees, the employer shall not
terminate his employment unless there is
a certification by a competent public
health authority that the disease is of
such nature or at such a stage that it
cannot be cured within a period of six
(6) months even with proper medical
treatment. If the disease or ailment can
be cured within the period, the
employer shall not terminate the
employee but shall ask the employee to
take a leave. The employer shall
reinstate such employee to his former
position immediately upon the
restoration of his normal health.
CASE HISTORY:
Labor Arbiter dismissed the complaint
and held that Arlene was not a regular
employee but an independent
contractor.
The NLRC reversed the Labor Arbiter’s
decision and ruled that Arlene was a
regular employee since she
continuously rendered services that
were necessary and desirable to Fuji’s
business.
The Court of Appeals affirmed that NLRC
ruling with modification that Fuji
immediately reinstate Arlene to her
position without loss of seniority rights
and that she be paid her backwages
and other emoluments withheld from
her. The Court of Appeals agreed with
the NLRC that Arlene was a regular
employee, engaged to perform work
that was necessary or desirable in the
business of Fuji, and the successive
renewals of her fixed-term contract
resulted in regular employment. The
case of Sonza does not apply in the
case because Arlene was not
contracted on account of a special
talent or skill. Arlene was illegally
dismissed because Fuji failed to comply
with the requirements of substantive
and procedural due process. Arlene, in
fact, signed the non-renewal contract
under protest as she was left without a
choice.
Fuji filed a petition for review on
certiorari under Rule 45 before the
Supreme Court, alleging that Arlene was
hired as an independent contractor;
that Fuji had no control over her work;
that the employment contracts were
renewed upon Arlene’s insistence; that
there was no illegal dismissal because
she freely agreed not to renew her
fixed-term contract as evidenced by
her email correspondences.
Arlene filed a manifestation stating that
the SC could not take jurisdiction over
the case since Fuji failed to authorize
Corazon Acerden, the assigned
attorney-in-fact for Fuji, to sign the
verification.
RULING:
1. Arlene was not an independent
contractor.
Fuji alleged that Arlene was an
independent contractor citing the
Sonza case. She was hired because of
her skills. Her salary was higher than the
normal rate. She had the power to
bargain with her employer. Her contract
was for a fixed term. It also stated that
Arlene was not forced to sign the non-
renewal agreement, considering that
she sent an email with another version
of her non-renewal agreement.
Arlene argued (1) that she was a regular
employee because Fuji had control and
supervision over her work; (2) that she
based her work on instructions from Fuji;
(3) that the successive renewal of her
contracts for four years indicated that
her work was necessary and desirable;
(4) that the payment of separation pay
indicated that she was a regular
employee; (5) that the Sonza case is not
applicable because she was a plain
reporter for Fuji; (6) that her illness was
not a ground for her dismissal; (7) that
she signed the non-renewal agreement
because she was not in a position to
reject the same.
Distinctions among fixed-
term employees, independent
contractors, and regular employees
Fixed Term Employment
1) The fixed period of employment was
knowingly and voluntarily agreed upon
by the parties without any force, duress,
or improper pressure being brought to
bear upon the employee and absent
any other circumstances vitiating his
consent; or
2) It satisfactorily appears that the
employer and the employee dealt with
each other on more or less equal terms
with no moral dominance exercised by
the former or the latter.
These indications, which must be read
together, make the Brent doctrine
applicable only in a few special cases
wherein the employer and employee
are on more or less in equal footing in
entering into the contract. The reason
for this is evident: when a prospective
employee, on account of special skills or
market forces, is in a position to make
demands upon the prospective
employer, such prospective employee
needs less protection than the ordinary
worker. Lesser limitations on the parties’
freedom of contract are thus required
for the protection of the
employee. (Citations omitted)
155
For as long as the guidelines laid down
in Brent are satisfied, this court will
recognize the validity of the fixed-term
contract. (GMA Network, Inc. vs.
Pabriga)
Independent Contractor
One who carries on a distinct and
independent business and undertakes
to perform the job, work, or service on its
own account and under one’s own
responsibility according to one’s own
manner and method, free from the
control and direction of the principal in
all matters connected with the
performance of the work except as to
the results thereof.
No employer-employee relationship
exists between the independent
contractors and their principals.
Art. 106. Contractor or
subcontractor. Whenever an employer
enters into a contract with another
person for the performance of the
former’s work, the employees of the
contractor and of the latter’s
subcontractor, if any, shall be paid in
accordance with the provisions of this
Code.
XXX
The Secretary of Labor and Employment
may, by appropriate regulations, restrict
or prohibit the contracting-out of labor
to protect the rights of workers
established under this Code. In so
prohibiting or restricting, he may make
appropriate distinctions between labor-
only contracting and job contracting as
well as differentiations within these types
of contracting and determine who
among the parties involved shall be
considered the employer for purposes
of this Code, to prevent any violation or
circumvention of any provision of this
Code.
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
person 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.
Department Order No. 18-A, Series of
2011, Section 3
(c) . . . an arrangement whereby a
principal agrees to put out or farm out
with a contractor the performance or
completion of a specific job, work or
service within a definite or
predetermined period, regardless of
whether such job, work or service is to
be performed or completed within or
outside the premises of the principal.

This department order also states that
there is a trilateral relationship in
legitimate job contracting and
subcontracting arrangements among
the principal, contractor, and
employees of the contractor. There is no
employer-employee relationship
between the contractor and principal
who engages the contractor’s services,
but there is an employer-employee
relationship between the contractor
and workers hired to accomplish the
work for the
principal. chanRoblesvirtualLawlibrary
162
Jurisprudence has recognized another
kind of independent contractor:
individuals with unique skills and talents
that set them apart from ordinary
employees. There is no trilateral
relationship in this case because the
independent contractor himself or
herself performs the work for the
principal. In other words, the relationship
is bilateral.
XXX
interest. Article 13, Section 3 of the 1987
Constitution provides full protection to
labor.
Apart from the Constitutional
guarantee, Article 1700 of the Civil
Code states that : The relations between
capital and labor are not merely
contractual. They are so impressed with
public interest that labor contracts must
yield to the common good. Therefore,
such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours
of labor and similar subjects.
In contracts of employment, the
employer and the employee are not on
equal footing. Thus, it is subject to
regulatory review by the labor tribunals
and courts of law. The law serves to
equalize the unequal. The labor force is
a special class that is constitutionally
protected because of the inequality
between capital and labor.176 This
presupposes that the labor force is
weak.

There are different kinds of independent

contractors: those engaged in The level of protection to labor should
legitimate job contracting and those vary from case to caese. When a
who have unique skills and talents that prospective employee, on account of
set them apart from ordinary special skills or market forces, is in a
employees. position to make demands upon the
prospective employer, such prospective
Since no employer-employee employee needs less protection than
relationship exists between independent the ordinary worker.
contractors and their principals, their
contracts are governed by the Civil
Code provisions on contracts and other
applicable laws. The level of protection to labor must be
Regular Employees determined on the basis of the nature of
the work, qualifications of the
Contracts of employment are different employee, and other relevant
and have a higher level of regulation circumstances such as but not limited to
because they are impressed with public educational attainment and other
special qualifications. In appliacation, Arlene was hired by Fuji
as a news producer, but there was no
evidence that she was hired for her
Fuji’s argument that Arlene was an
unique skills that would distinguish her
independent contractor under a fixed-
from ordinary employees. Her monthly
term contract is contradictory.
salary appeared to be a substantial
Employees under fixed-term contracts
sum. Fuji had the power to dismiss
cannot be independent contractors
Arlene, as provided for in her
because in fixed-term contracts, an
employment contract. The contract also
employer-employee relationship exists.
indicated that Fuji had control over her
The test in this kind of contract is not the
work as she was rquired to report for 8
necessity and desirability of the
hours from Monday to Friday. Fuji gave
employee’s activities, “but the day
her instructions on what to report and
certain agreed upon by the parties for
even her mode of transportation in
the commencement and termination of
carrying out her functions was
the employment relationship.” For
controlled.
regular employees, the necessity and
desirability of their work in the usual
course of the employer’s business are
Therefore, Arlene could not be an
the determining factors. On the other
independent contractor.
hand, independent contractors do not
have employer-employee relationships
with their principals.
2. Arlene was a regular employee
with a fixed-term contract.
To determine the status of employment,
the existence of employer-employee
In determining whether an employment
relationship must first be settled with the
should be considered regular or non-
use of the four-fold test, especially the
regular, the applicable test is the
qualifications for the power to control.
reasonable connection between the
particular activity performed by the
employee in relation to the usual
The distinction is in this guise:
business or trade of the employer. The
Rules that merely serve as guidelines standard, supplied by the law itself, is
towards the achievement of a mutually whether the work undertaken is
desired result without dictating the necessary or desirable in the usual
means or methods to be employed business or trade of the employer, a fact
creates no employer-employee that can be assessed by looking into the
relationship; whereas those that control nature of the services rendered and its
or fix the methodology and bind or relation to the general scheme under
restrict the party hired to the use of such which the business or trade is pursued in
means creates the relationship. 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.
However, there may be a situation
where an employee’s work is necessary
but is not always desirable in the usual
course of business of the employer. In
this situation, there is no regular
employment.
Fuji’s Manila Bureau Office is a small
unit213 and has a few employees. Arlene
had to do all activities related to news
gathering.
A news producer “plans and supervises
newscast [and] works with reporters in
the field planning and gathering
information, including monitoring and
getting news stories, rporting
interviewing subjects in front of a video
camera, submission of news and current
events reports pertaining to the
Philippines, and traveling to the regional
office in Thailand.” She also had to
report for work in Fuji’s office in Manila
from Mondays to Fridays, eight per day.
She had no equipment and had to use
the facilities of Fuji to accomplish her
tasks.
The successive renewals of her contract
indicated the necessity and desirability
of her work in the usual course of Fuji’s
business. Because of this, Arlene had
become a regular employee with the
right to security of tenure.
Arlene’s contract indicating a fixed term
did not automatically mean that she
could never be a regular employee. For
as long as it was the employee who
requested, or bargained, that the
contract have a “definite date of
termination,” or that the fixed-term
contract be freely entered into by the
employer and the employee, then the
validity of the fixed-term contract will be
upheld.
3. Arlene was illegally dismissed.
As a regular employee, Arlene was
entitled to security of tenure under
Article 279 of the Labor Code and could
be dismissed only for just or authorized
causaes and after observance of due
process.
The expiration of the contract does not
negate the finding of illegal dismissal.
The manner by which Fuji informed
Arlene of non-renewal through email a
month after she informed Fuji of her
illness is tantamount to constructive
dismissal. Further, Arlene was asked to
sign a letter of resignation prepared by
Fuji. The existence of a fixed-term
contract should not mean that there
can be no illegal dismissal. Due process
must still be observed.
Moreoever, disease as a ground for
termination under Article 284 of the
Labor Code and Book VI, Rule 1, Section
8 of the Omnibus Rules Implementing
the Labor Code require two
requirements to be complied with: (1)
the employee’s disease cannot be
cured within six months and his
continued employment is prohibited by
law or prejudicial to his health as well as
to the health of his co-employees; and
(2) certification issued by a competent
public health authority that even with
proper medical treatment, the disease
cannot be cured within six months. The
burden of proving compliance with
these requisites is on the employer. Non-
compliance leads to illegal dismissal.
blesvirtualLawlibrary
Arlene was not accorded due process.
After informing her employer of her lung
cancer, she was not given the chance
to present medical certificates. Fuji
immediately concluded that Arlene
could no longer perform her duties
because of chemotherapy. Neither did
it suggest for her to take a leave. It did
not present any certificate from a
competent public health authority.
Therefore, Arlene was illegally dismissed.
4. The Court of Appeals correctly
awarded reinstatement,
damages and attorney’s fees.
The Court of Appeals awarded moral
and exemplary damages and
attorney’s fees. It also ordered
reinstatement, as the grounds when
separation pay was awarded in lieu of
reinstatement were not proven.
The Labor Code provides in Article 279
that illegally dismissed employees are
entitled to reinstatement, backwages
including allowances, and all other
benefits.
Separation pay in lieu of reinstatement is
allowed only (1) when the employer has
ceased operations; (2) when the
employee’s position is no longer
available; (3) strained relations; and (4)
a substantial period has lapsed from
date of filing to date of finality.
The doctrine of strained relations should
be strictly applied to avoid deprivation
of the right to reinstatement. In the case
at bar, no evidence was presented by
Fuji to prove that reinstatement was no
longer feasible. Fuji did not allege that it
ceased operations or that Arlene’s
position was no longer feasible. Nothing
showed that the reinstatement would
cause an atmosphere of antagonism in
the workplace.
Moral damages are awarded “when
the dismissal is attended by bad faith or
fraud or constitutes an act oppressive to
labor, or is done in a manner contrary to
good morals, good customs or public
policy.” On the other hand, exemplary
damages may be awarded when the
dismissal was effected “in a wanton,
oppressive or malevolent manner.
After Arlene had informed Fuji of her
cancer, she was informed that there
would be problems in renewing her
contract on account of her condition.
This information caused Arlene mental
anguish, serious anxiety, and wounded
feelings. The manner of her dismissal was
effected in an oppressive approach
with her salary and other benefits being
withheld until May 5, 2009, when she
had no other choice but to sign the
non-renewal contract.
With regard to the award of attorney’s
fees, Article 111 of the Labor Code
states that “[i]n cases of unlawful
withholding of wages, the culpable
party may be assessed attorney’s fees
equivalent to ten percent of the
amount of wages recovered.” In actions
for recovery of wages or where an
employee was forced to litigate and,
thus, incur expenses to protect his rights
and interest, the award of attorney’s
fees is legally and morally justifiablen.”
Due to her illegal dismissal, Arlene was
forced to litigate.
Therefore, the awards for reinstatement,
damages and attorney’s fees were
proper.
ABS-CBN vs NAZARENO Case Digest
ABS-CBN BROADCASTING
CORPORATION vs. MARLYN NAZARENO
et al.
G.R. No. 164156
September 26, 2006
Facts: 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. 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 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 rendered judgment in
favor of the respondents, and declared
that they were regular employees of
petitioner as such, they were awarded
monetary benefits. NLRC affirmed the
decision of the Labor Arbiter. Petitioner
filed a motion for reconsideration but
CA dismissed it.
Issue: Whether or not the respondents
were considered regular employees of
ABS-CBN.
Ruling: The respondents are regular
employees of ABS-CBN. It was held 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.
In Universal Robina Corporation v.
Catapang, the Court states that 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.
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. In the case at bar,
however, the employer-employee
relationship between petitioner and
respondents has been proven. 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 petitioner’s personnel
department just like any ordinary
employee. Respondents did not have
the power to bargain for huge talent
fees, a circumstance negating
independent contractual relationship.
Respondents are highly dependent on
the petitioner for continued work. 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. As
regular employees, respondents are
entitled to the benefits granted to all
other regular employees of petitioner
under the CBA . 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.”
G.R. No. 186439 : JANUARY 15, 2014
UNIVERSAL ROBINA SUGAR MILLING
CORPORATION and RENE CABATI,
Petitioners, v. FERDINAND ACIBO,
ROBERTO AGUILAR, EDDIE BALDOZA,
RENE ABELLAR, DIOMEDES ALICOS,
MIGUEL ALICOS, ROGELIO AMAHIT,
LARRY AMASCO, FELIPE BALANSAG,
ROMEO BALANSAG, MANUEL BANGOT,
ANDY BANJAO, DIONISIO BENDIJO, JR.,
JOVENTINO BROCE, ENRICO LITERAL,
RODGER RAMIREZ, BIENVENIDO
RODRIGUEZ, DIOCITO PALAGTIW, ERNIE
SABLAN, RICHARD PANCHO, RODRIGO
ESTRABELA, DANNY KADUSALE and
ALLYROBYL OLPUS, Respondents.
BRION, J.:
FACTS:
URSUMCO is a domestic corporation
engaged in the sugarcane milling
business; Cabati is URSUMCOs Business
Unit General Manager.
The complainants were employees of
URSUMCO, and were hired on various
dates between 1988 and 1996, and on
different capacities, i.e., drivers, crane
operators, bucket hookers, welders,
mechanics, laboratory attendants and
aides, steel workers, carpenters, among
others. The complainants signed
contracts of employment for a period of
1 month or for a given season, and were
repeatedly hired to perform the same
duties and, for every engagement,
were required to sign new employment
contracts for the same duration of one
month or given season.
On August 23, 2002, the complainants
filed before the Labor Arbiter complaints
for regularization, entitlement to the
benefits under the existing Collective
Bargaining Agreement (CBA), and
attorneys fees. The Labor Arbiter
dismissed the complaint in the decision
dated October 9, 2002, for lack of merit.
The Labor Arbiter pointed out that the
complainants were required to perform
several projects that were not at all
directly related to URSUMCOs main
operations, and that they were project
employees, they could not be
regularized since their respective
employments end upon the completion
of each project. Also, complainants
were not entitled to the benefits
granted under the CBA that, as
provided, covered only the regular
employees of URSUMCO.
7, out of the 22 original complainants,
appealed the Labor Arbiters ruling
before the NLRC. NLRC reversed the
Labor Arbiter's ruling; it declared the
complainants are regular URSUMCO
employees because they performed
activities which were usually necessary
and desirable in the usual trade or
business of URSUMCO, and granted their
monetary claims under the CBA. NLRC
denied petitioners motion for
reconsideration.
Petitioners elevated the case to the
Court of Appeals (CA) via a petition for
certiorari.
The CA granted in part the petition. It
pointed out that the primary standard
for determining regular employment is
the reasonable connection between a
particular activity performed by the
employee vis-vis the usual trade or
business of the employer. As the
complainants have been performing
their respective tasks for at least one
year, these same tasks, regardless of
whether the performance was
continuous or intermittent, constitutes
sufficient evidence of the necessity, if
not indispensability, of the activity to
URSUMCOs business. On the claim for
CBA benefits, however, the CA ruled
that the complainants were not entitled
to receive them. CA pointed out that
the CBA covered regular employees of
URSUMCO performing tasks needed by
the latter for the entire year with no
regard to the changing sugar milling
season. For collective bargaining
purposes, they constitute a bargaining
unit separate and distinct from the
regular employees.
The petitioner filed a petition for review
on certiorari after the CA denied their
motion for partial reconsideration.
ISSUE: Whether or not the respondents
are regular employees of URSUMCO?
HELD: The respondents are regular
seasonal employees of URSUMCO
LABOR LAW : regular seasonal
employees
Article 280 of the Labor Code provides
for three kinds of employment
arrangements, namely: regular,
project/seasonal and casual.
Regular employment refers to that
arrangement whereby the employee
has been engaged to perform activities
which are usually necessary or desirable
in the usual business or trade of the
employer. By way of an exception,
paragraph 2, Article 280 of the Labor
Code also considers regular a casual
employment arrangement when the
casual employees engagement has
lasted for at least one year, regardless
of the engagements continuity. The
controlling test in this arrangement is the
length of time during which the
employee is engaged.
Project employment, on the other hand,
contemplates on arrangement whereby
the employment has been fixed for a
specific project or undertaking whose
completion or termination has been
determined at the time of the
engagement of the employee. The
services of the project employees are
legally and automatically terminated
upon the end or completion of the
project as the employees services are
coterminous with the project.
Seasonal employment operates much in
the same way as project employment,
albeit it involves work or service that is
seasonal in nature or lasting for the
duration of the season. To exclude the
asserted seasonal employee from those
classified as regular employees, the
employer must show that: (1) the
employee must be performing work or
services that are seasonal in nature; and
(2) he had been employed for the
duration of the season. Hence, when
the seasonal workers are continuously
and repeatedly hired to perform the
same tasks or activities for several
seasons or even after the cessation of
the season, this length of time may
likewise serve as badge of regular
employment.
Casual employment refers to any other
employment arrangement that does
not fall under any of the first two
categories.
In the case at bar, the respondents
were made to perform various tasks that
did not at all pertain to any specific
phase of URSUMCO's strict milling
operations that would ultimately cease
upon completion of a particular phase
in the milling of sugar; rather, they were
tasked to perform duties regularly and
habitually needed in URSUMCO's
operations during the milling season. The
respondents duties as loader operators,
hookers, crane operators and drivers
were necessary to haul and transport
the sugarcane from the plantation to
the mill; laboratory attendants, workers
and laborers to mill the sugar; and
welders, carpenters and utility workers
to ensure the smooth and continuous
operation of the mill for the duration of
the milling season, as distinguished from
the production of the sugarcane which
involves the planting and raising of the
sugarcane until it ripens for milling. They
perform activities that are necessary
and desirable in sugarcane production.
Also, the respondents were regularly
and repeatedly hired to perform the
same tasks year after year. This regular
and repeated hiring of the same
workers (two different sets) for two
separate seasons has put in place,
principally through jurisprudence, the
system of regular seasonal employment
in the sugar industry and other industries
with a similar nature of operations.
Therefore, the nature of the
employment does not depend solely on
the will or word of the employer or on
the procedure for hiring and the
manner of designating the employee.
Rather, the nature of the employment
depends on the nature of the activities
to be performed by the employee,
considering the nature of the employers
business, the duration and scope to be
done, and, in some cases, even the
length of time of the performance and
its continued existence.
The NLRC acted in grave abuse of
discretion when it declared the
respondents regular employees of
URSUMCO without qualification and
that they were entitled to the benefits
granted under the CBA, to URSUMCO's
regular employees. We also find that the
CA grossly misread the NLRC ruling and
missed the implications of the
respondents regularization. To reiterate,
the respondents are regular seasonal
employees, as the CA itself opined
when it declared that private
respondents who are regular workers
with respect to their seasonal tasks or
activities and while such activities exist,
cannot automatically be governed by
the CBA between petitioner URSUMCO
and the authorized bargaining
representative of the regular and
permanent employees.
Petition for review on certiorari is
partially granted.
Purefoods Corporation vs. NLRC, et. al
G.R. No. 122653
December 12, 1997
FACTS:
The private respondents (numbering
906) were hired by petitioner Pure Foods
Corporation to work for a fixed period of
five months at its tuna cannery plant in
Tambler, General Santos City. After the
expiration of their respective contracts
of employment in June and July 1991,
their services were terminated. They
forthwith executed a “Release and
Quitclaim” stating that they had no
claim whatsoever against the petitioner.
On December 1992, Private respondents
filed before the NLRC a complaint for
illegal dismissal against the petitioner
and its plant manager, Marciano
Aganon.
The Labor Arbiter dismissed the
complaint on the ground that the
private respondents were mere
contractual workers, and not regular
employees; hence, they could not avail
of the law on security of tenure. The
private respondents appealed from the
decision to the NLRC which affirmed the
Labor Arbiter's decision. On private
respondents’ motion for
reconsideration, the NLRC rendered
another decision on 30 January 1995
vacating and setting aside its earlier
decision and held that the private
respondents and their co-complainants
were regular employees. It declared
that the contract of employment for five
months was a “clandestine scheme
employed by [the petitioner] to stifle
[private respondents’] right to security of
tenure” and should therefore be struck
down and disregarded for being
contrary to law, public policy, and
morals. Hence, their dismissal on
account of the expiration of their
respective contracts was illegal.
Petitioner’s motion for reconsideration
was denied; hence, this appeal.
Petitioner’s submission before the Court:
the private respondents are now
estopped from questioning their
separation from petitioner’s employ in
view of their express conformity with the
five-month duration of their
employment contracts. In the instant
case, the private respondents were
employed for a period of five months
only. In any event, private respondents'
prayer for reinstatement is well within
the purview of the “Release and
Quitclaim” they had executed wherein
they unconditionally released the
petitioner from any and all other claims
which might have arisen from their past
employment with the petitioner.
ISSUE: Whether or not the 5-month
period specified in private respondents’
employment contract is invalid and is
therefore violative of their constitutional
right to security of tenure.
Ruling:
The five-month period specified in
private respondents’ employment
contract is invalid. In
the leading case of Brent School, Inc. v.
Zamora, although the Court has
upheld the legality of fixed-term
employment, the Court also held that
where from the circumstances it is
apparent that the 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 and morals.
Brent also laid down the criteria under
which term employment cannot be said
to be in circumvention of the law on
security of tenure: 1) The fixed period of
employment was knowingly and
voluntarily agreed upon by the parties
without any force, duress, or improper
pressure being brought to bear upon
the employee and absent any other
circumstances vitiating his consent; or 2)
It satisfactorily appears that the
employer and the employee dealt with
each other on more or less equal terms
with no moral dominance exercised by
the former or the latter.
None of these criteria had been met in
the present case. It could not be
supposed that private respondents and
all other so-called “casual” workers of
[the petitioner] KNOWINGLY and
VOLUNTARILY agreed to the 5-month
employment contract.
The petitioner does not deny or rebut
private respondents' averments (1) that
the main bulk of its workforce consisted
of its so-called “casual” employees; (2)
that as of July 1991, “casual” workers
numbered 1,835; and regular
employees, 263; (3) that the company
hired “casual” every month for the
duration of five months, after which their
services were terminated and they were
replaced by other “casual” employees
on the same five-month duration; and
(4) that these “casual” employees were
actually doing work that were
necessary and desirable in petitioner’s
usual business.
This scheme of the petitioner was
apparently designed to prevent the
private respondents and the other
“casual” employees from attaining the
status of a regular employee. It was a
clear circumvention of the employees’
right to security of tenure and to other
benefits like minimum wage, cost-of-
living allowance, sick leave, holiday
pay, and 13th month pay. Indeed, the
petitioner succeeded in evading the
application of labor laws. Also, it saved
itself from the trouble or burden of
establishing a just cause for terminating
employees by the simple expedient of
refusing to renew the employment
contracts.
The five-month period specified in
private respondents’ employment
contracts having been imposed
precisely to circumvent the
constitutional guarantee on security of
tenure should, therefore, be struck down
or disregarded as contrary to public
policy or morals. To uphold the
contractual arrangement between the
petitioner and the private respondents
would, in effect, permit the former to
avoid hiring permanent or regular
employees by simply hiring them on a
temporary or casual basis, thereby
violating the employees’ security of
tenure in their jobs.
The NLRC was correct in finding that the
private respondents were regular
employees and that they were illegally
dismissed from their jobs. Under Article
279 of the Labor Code and the recent
jurisprudence, the legal consequence
of illegal dismissal is reinstatement
without loss of seniority rights and other
privileges, with full back wages
computed from the time of dismissal up
to the time of actual reinstatement,
without deducting the earnings derived
elsewhere pending the resolution of the
case.
However, since reinstatement is no
longer possible because the petitioner's
tuna cannery plant had, admittedly,
been closed in November 1994, the
proper award is separation pay
equivalent to one month pay or one-
half month pay for every year of service,
whichever is higher, to be computed
from the commencement of their
employment up to the closure of the
tuna cannery plant. The amount of
back wages must be computed from
the time the private respondents were
dismissed until the time petitioner's
cannery plant ceased operation.
Decision: WHEREFORE, for lack of merit,
the instant petition is DISMISSED and the
challenged decision of 30 January 1995
of the National Labor Relations
Commission in NLRC CA No. M-001323-
93 is hereby AFFIRMED subject to the
above modification on the
computation of the separation pay and
back wages.
ROMARES v NLRC and PILMICO FOODS
CORP
Facts:
Romares was hired as by PILMICO in its
Maintenance/Projects/Engineering
Department. After rendering 1 year of
service, without any justification, notice
nor opportunity to be heard, he was
terminated.
Executive Labor Arbiter found that
Romares was employed by PILMOCO
since September 1, 1989 to January 15,
1993, in a broken tenure but all in all
totaled to over a year’s service [ie 15
mos], performing the same functions.
Thus, he is already considered a regular
employee and therefore covered by
security of tenure and cannot be
removed except for lawful and valid
cause as provided by law and after due
process. Romares was reinstated to his
former position with backwages.
NLRC, setting aside ELA’s decision, ruled
that employee cannot be considered a
regular employee if his employment is
for a specific project or undertaking and
for a fixed period [paragraph 1 and not
paragraph 2 of Article 280 of the Labor
Code should be applied], and Romares
was validly terminated due to expiration
of contract of employment.
Issue:
W/N Romares is a regular employee
Ruling:
Regular. See Art 280
The two kinds of regular employees are
(1) those who are 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 activity in
which they are employed.
Romares’ work with PILMICO as a
mason was definitely necessary and
desirable to its business [production of
flour, yeast, feeds and other flour
products]. Even if he were a temporary
employee, by virtue of the second par
of Art 280, he had been converted into
a regular employee for having worked
for PILMICO for more than a year.
In rehiring Romares, employment
contracts ranging from two (2) to three
(3) months with an express statement
that his temporary job/service as mason
shall be terminated at the end of the
said period or upon completion of the
project was obtrusively a convenient
subterfuge utilized to prevent his
regularization. It was a clear
circumvention of the employees right to
security of tenure and to other benefits.
It likewise evidenced bad faith on the
part of PILMICO.
Brent School, Inc. vs Zamora - criteria
under which term employment cannot
be said to be in circumvention of the
law on security of tenure:
• The fixed period of employment
was knowingly and voluntarily agreed
upon by the parties without any force,
duress, or improper pressure being
brought to bear upon the employee
and absent any other circumstances
vitiating his consent; or
• It satisfactorily appears that the
employer and the employee dealt with
each other on more or less equal terms
with no moral dominance exercised by
the former or the latter.
None of these requisites were complied
with.
Rowell Industrial Corporation vs CA
(EXCEPTION TO THE RULE ON REGULAR
EMPLOYMENT)
Facts:
Rowell Industrial is engaged in
manufacturing tin cans for use in
packaging of consumer products, e.g.,
foods, paints, among other things.
Taripe was employed by petitioner on
November 8, 1999 as a “rectangular
power press machine operator” Taripe
alleged that upon employment, he was
made to sign a document, which was
not explained to him but which was
made a condition for him to be taken in
and for which he was not furnished a
copy.
Issue:
Whether respondent was a regular
employee
Held:
Under Art 280 regular employees are
classified into:
(1) regular employees by nature of work
- those employees who perform a
particular activity which is necessary or
desirable in the usual business or trade
of the employer, regardless of their
length of service;
(2) regular employees by years of
service - those employees who have
been performing the job, regardless of
the nature thereof, for at least a year.
Article 280 of the Labor Code, as
amended, however, does not proscribe
or prohibit an employment contract
with a fixed period. It does not
necessarily follow that where the duties
of the employee consist of activities
usually necessary or desirable in the
usual business of the employer, the
parties are forbidden from agreeing on
a period of time for the performance of
such activities. There is nothing
essentially contradictory between a
definite period of employment and the
nature of the employee’s duties.
In the case at bar, Taripe signed a
contract of employment good only for
a period of five months unless the said
contract is renewed by mutual consent.
Along with other contractual
employees, he was hired only to meet
the increase in demand for packaging
materials for the Christmas season and
to build up stock levels for the early part
of the year.
Standards for valid fixed term
employment:
(1) the fixed period of employment was
knowingly and voluntarily agreed upon
by the parties, without any force, duress
or improper pressure being brought to
bear upon the employee and absent
any other circumstances vitiating his
consent; or
(2) it satisfactorily appears that the
employer and employee dealt with
each other on more or less equal terms
with no moral dominance whatever
being exercised by the former on the
latter.
Application of these standards to this
case:
1) The employment contract signed by
respondent Taripe did not mention that
he was hired only for a specific
undertaking, the completion of which
had been determined at the time of his
engagement. The said employment
contract neither mentioned that
respondent Taripe’s services were
seasonal in nature and that his
employment was only for the duration
of the Christmas season as purposely
claimed by petitioner RIC. What was
stipulated in the said contract was that
Taripe’s employment was contractual
for the period of five months.
2) Also RIC failed to controvert the claim
that Taripe was made to sign the
contract of employment, prepared by
RIC, as a condition for his hiring. Such
contract in which the terms are
prepared by only one party and the
other party merely affixes his signature
signifying his adhesion thereto is called
contract of adhesion.It is an agreement
in which the parties bargaining are not
on equal footing, the weaker party’s
participation being reduced to the
alternative “to take it or leave it.” In the
present case, respondent Taripe, in
need of a job, was compelled to agree
to the contract, including the five-
month period of employment, just so he
could be hired.
3) 2) As a power press operator, a rank
and file employee, he can hardly be on
equal terms with petitioner RIC. As the
Court of Appeals said, “almost always,
employees agree to any terms of an
employment contract just to get
employed considering that it is difficult
to find work given their ordinary
qualifications.” He was a regular
employee As a rectangular power press
machine operator, in charge of
manufacturing covers for “four liters
rectangular tin cans,” was holding a
position which is necessary and
desirable in the usual business or trade
of petitioner RIC, which was the
manufacture of tin cans. Thus, he was a
regular employee.
BUSTAMANTE vs. NLRC (1996)
Padilla, J.
FACTS:
Private respondent moves to reconsider
the earlier decision of the Supreme
Court First Division on grounds that (a)
petitioners are not entitled to recover
backwages because they were not
actually dismissed but their probationary
employment was not converted to
permanent employment; and (b)
assuming that petitioners are entitled to
backwages, computation thereof
should not start from cessation of work
up to actual reinstatement, and that
salary earned elsewhere (during the
period of illegal dismissal) should be
deducted from the award of such
backwages.
ISSUE: How should backwages be
computed?
HELD:
The prevailing rule is that backwages to
be awarded to an illegally dismissed
employee, should not be diminished or
reduced by the earnings derived by him
elsewhere during the period of his illegal
dismissal. The underlying reason of this
ruling is that the employee, while
litigating the legality (illegality) of his
dismissal, must still earn a living to
support himself and family, while his
backwages have to be paid by the
employer as part of the price or penalty
he has to pay for illegally dismissing his
employee.
Under Art. 279, as amended, the
provision handling for "full backwages"
to illegally dismissed employees is clear,
plain and free from ambiguity and,
therefore, must be applied without
attempted or strained interpretation.
Index animi sermo est.
Therefore, petitioners are entitled on
their full backwages, inclusive of
allowances and other benefits or their
monetary equivalent, from the time their
actual compensation was withheld on
them up to the time of their actual
reinstatement.
HISTORY:
Pre-Labor Code
Under RA 875, the CIR was given wide
discretion to determine the amount of
backwages. Thus, in the exercise of its
jurisdiction, the CIR increased or
diminished the award of backpay,
depending on several circumstances,
among them, the good faith of the
employer, the employee's employment
in other establishments during, the
period of illegal dismissal, or the
probability that the employee could
have realized net earnings from outside
employment if he had exercised due
diligence to search for outside
employment. In labor cases decided
during the effectivity of R.A. No. 875, the
Supreme Court acknowledged and
upheld the CIR's authority to deduct any
amount from the employee's
backwages, including the discretion to
reduce such award of backwages
whatever earnings were obtained by
the employee elsewhere during the
period of his illegal dismissal (Itogon-
Suyoc ruling).
Then came the Mercury Drug ruling,
where the Court ruled that a fixed
amount of backwages without further
qualifications should be awarded to an
illegally dismissed employee, for the
purposes of expediency.
A permutation of the aforementioned
rule, the 3-year rule formulated by
Teehankee was adopted, where
backwages are always computed for
the fixed period of 3 years.
Post-Labor Code
Art. 279 provided that an unjustly
dismissed employee shall be entitled “to
his back wages computed from the
time his compensation was withheld
from him up to the time of his
reinstatement.”
Despite the express provision that it
should be computed from the time
compensation was withheld up to
reinstatement, the Mercury Drug rule
with the 3-year constant was
applied.
On March 1989, Republic Act No. 6715
took effect, amending the Art. 279 of
the LC. This added “other benefits” to
the computation of backwages, which
should also be computed from the time
compensation was withheld up to
reinstatement.
In 1993, the Court in the Pines City
Educational Center went back to the
pre-Mercury Drug rule, where the total
amount derived from employment
still elsewhere by the employee from the
date of dismissal up to the date of
reinstatement, if any, should be
deducted therefrom. The rationale in
allowing the deduction was to prevent
unjust enrichment by the employee at
the expense of the employer.
In the present case, the Court overrules
the Pines City case, and adopts as a
general rule that employees are entitled
to full backwages from the time it was
withheld up to the time of
reinstatement, without any deductions
or limitatations as to period/amount.