SEASONAL EMPLOYMENT Article 280 of the Labor Code reads in full:
MERCADO VS. NLRC (G.R. No. 79869, September 5, 1991)
Labor Arbiter argues that petitioners cannot be deemed to be
permanent and regular employees since they fall under the exception
stated in Article 280 of the Labor Code, which reads:
The provisions of written agreements to the contrary
notwithstanding and regardless of the oral agreements
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.
The very nature of the terms and conditions of their hiring reveal that
the petitioners were required to perform p of cultural work for a
definite period, after which their services are available to any farm
owner.
In fact, the sworn statement of one of the petitioners Fortunato
Mercado, Jr., the son of spouses Fortunato Mercado, Sr. And Rosa
Mercado, indubitably shows that said petitioners were only hired as
casuals, on-and-off basis. With this kind of relationship between the
petitioners and the respondent Aurora Cruz, we feel that there is no
basis in law upon which the claims of the petitioners should be
sustained, more specially their complaint for illegal dismissal.
Article 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 actually exists.
The first paragraph answers the question of who are employees. It
states that, regardless of any written or oral agreement to the
contrary, an employee is deemed regular where he is engaged in
necessary or desirable activities in the usual business or trade of the
employer, except for project employees.
A project employee has been defined to be one 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 service to be
performed is seasonal in nature and the employment is for the
duration of the season 26 as in the present case.
The second paragraph of Art. 280 demarcates as “casual” employees,
all other employees who do not fan under the definition of the
preceding paragraph. The proviso, in said second paragraph, deems as
regular employees those “casual” employees who have rendered at
least one year of service regardless of the fact that such service may
be continuous or broken.
Petitioners, in effect, contend that the proviso in the second paragraph
of Art. 280 is applicable to their case and that the Labor Arbiter should
have considered them regular by virtue of said proviso. The contention
is without merit.
Clearly, therefore, petitioners being project employees, or, to use the
correct term, seasonal employees, their employment legally ends upon
completion of the project or the season. The termination of their
employment cannot and should not constitute an illegal dismissal.
TACLOBAN SAGKAHAN RICE and CORN MILLS, CO., VS. NLRC
(G.R. No. 73806, March 21, 1990)
Before We go to the issue of whether or not private respondent were
illegally dismissed by petitioners, We must first determine the real
status of the former as employees.
The pertinent provision of the Labor Code reads:
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 actually exists.
The evidence on record has established that private respondents
Carlito Codilan and Maximo Docena had been working for petitioners
for 25 years, respondent Eugenio Go for 22 years, respondent Teofilo
Trangria for 15 years and respondent Reynaldo Tulin for 6 years. Aside
from their lengthy service, it should be noted that private respondents’
employment was not fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of
their appointment or hiring. Likewise, it must be borne in mind that
petitioners never rebutted private respondents’ claim that they
performed activities usually necessary or desirable in the usual
business of the former.
Furthermore, the services performed or to be performed by private
respondents are not seasonal in nature. While it may be true that the
harvest of palay is seasonal, the milling operations which is the main
business of petitioners are not seasonal. The fact is that big rice mills
such as the one owned by petitioners continue to operate and do
business throughout the year even if there are only two or three
harvest seasons within the year. It is a common practice among
farmers and rice dealers to store their palay and to have the same
milled as the need arises. Thus, the milling operations have no let-up.
And finally, considering the number of years that they have worked for
petitioners (the lowest is 6 years), private respondents have long
attained the status of regular employees as defined under Art. 280 of
the Labor Code.
HACIENDA FATIMA VS. NATIONAL FEDERATION OF
SUGARCANE WORKERS-FOOD AND GENERAL TRADE (G.R. No.
149440, January 28, 2003)
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 regular – not seasonal – employees.
Contrary to petitioners contention, the CA did not err when it held
that respondents were regular employees.
Article 280 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 respondents –
with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga
and Boboy Silva – repeatedly worked as sugarcane workers for
petitioners for several years is not denied by the latter. Evidently,
petitioners employed respondents for more than one
season. Therefore, the general rule of regular employment is
applicable.
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.
Xxxxxxxxx
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.[14]
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 services – even 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.
ABASOLO, et al., VS. NLRC (G.R. No. 118475, November 29,
2000)
Private respondent likewise insists that petitioners are seasonal
workers since almost all of petitioners never continuously worked in
LUTORCO for any given year[20] and they were required to reapply
every year to determine who among them shall be given work for the
season. To support its argument that petitioners are seasonal workers,
private respondent LUTORCO cites the case ofMercado, Sr. V.
NLRC[21] wherein this Court held that the employment of [seasonal
workers] legally ends upon the completion of the xxx season.
The employment of petitioners with respondent LUTORCO was
technically terminated when TABACALERA took over LUTORCOs
tobacco re-drying operations in 1993.
The test of whether or not an employee is a regular employee has
been laid down in De Leon v. NLRC,[25] 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 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 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.
 Thus, the nature of ones employment does not depend solely on
the will or word of the employer. Nor on the procedure for hiring and
the manner of designating the employee, but on the nature of the
activities to be performed by the employee, considering the employers
nature of business and the duration and scope of work to be done.
In the case at bar, while it may appear that the work of petitioners is
seasonal, inasmuch as petitioners have served the company for many
years, some for over 20 years, performing services necessary and
indispensable to LUTORCOs business, serve as badges of regular
employment.
Moreover, the fact that petitioners do not work continuously for one
whole year but only for the duration of the tobacco 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 are
merely considered on leave until re-employed.
Private respondents reliance on the case of Mercardo v. NLRC is
misplaced considering that since in said case of Mercado, although the
respondent company therein consistently availed of the services of the
petitioners therein from year to year, it was clear that petitioners
therein were not in respondent companys regular employ. Petitioners
therein performed different phases of agricultural work in a given
year. However, during that period, they were free to contract their
services to work for other farm owners, as in fact they did. Thus, the
Court ruled in that case that their employment would naturally end
upon the completion of each project or phase of farm work for which
they have been contracted.
CASUAL EMPLOYMENT
KIMBERLY CLARK PHILS VS. SECRETARY OF LABOR (G.R. No.
156668, November 23, 2007)
Kimberly also argues that the employees who are not parties in G.R.
No. 77629 should not be included in the implementation orders. For
DOLE to declare this group of employees as regular and to order the
payment of differential pay to them is to amend a final and executory
decision of this Court.[7]
We do not agree. In G.R. No. 77629, we ruled as follows:
The law [thus] provides for two kinds of regular
employees, namely: (1) those who are engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer; and (2) those who have rendered at least
one year of service, whether continuous or broken, with
respect to the activity in which they are employed. The
individual petitioners herein who have been adjudged to
be regular employees fall under the second category.
These are the mechanics, electricians, machinists,
machine shop helpers, warehouse helpers, painters,
carpenters, pipefitters and masons. It is not disputed
that these workers have been in the employ of
KIMBERLY for more than one year at the time of the
filing of the petition for certification election by
KILUSAN-OLALIA.
Owing to their length of service with the company,
these workers became regular employees, by operation
of law, one year after they were employed by
KIMBERLY through RANK. While the actual
 regularization of these employees entails the
mechanical act of issuing regular appointment papers
and compliance with such other operating procedures
as may be adopted by the employer, it is more in
keeping with the intent and spirit of the law to rule that
the status of regular employment attaches to the casual
worker on the day immediately after the end of his first
year of service. To rule otherwise, and to instead make
their regularization dependent on the happening of
some contingency or the fulfillment of certain
requirements, is to impose a burden on the employee
which is not sanctioned by law.
That the first stated position is the situation
contemplated and sanctioned by law is further
enhanced by the absence of a statutory limitation
before regular status can be acquired by a casual
employee. The law is explicit. As long as the employee
has rendered at least one year of service, he becomes a
regular employee with respect to the activity in which
he is employed. The law does not provide the
qualification that the employee must first be issued a
regular appointment or must first be formally declared
as such before he can acquire a regular status.
Obviously, where the law does not distinguish, no
distinction should be drawn.
Considering that an employee becomes regular with respect to the
activity in which he is employed one year after he is employed, the
reckoning date for determining his regularization is his hiring date.
Therefore, it is error for petitioner Kimberly to claim that it is
from April 21, 1986 that the one-year period should be counted. While
it is a fact that the issue of regularization came about only when
KILUSAN-OLALIA filed a petition for certification election, the
concerned employees attained regular status by operation of law.
Further, the grant of the benefit of regularization should not be limited
to the employees who questioned their status before the labor
tribunal/court and asserted their rights; it should also extend to those
similarly situated.
There is, thus, no merit in petitioner's contention that only those who
presented their circumstances of employment to the courts are entitled
to regularization.
TAN VS. LAGRAMA (G.R. No. 151228, August 15, 2002)
The issues raised boil down to whether or not an employer-employee
relationship existed between petitioner and private respondent, and
whether petitioner is guilty of illegally dismissing private
respondent. We find the answers to these issues to be in the
affirmative.
In determining whether there is an employer-employee
relationship, we have applied a four-fold test, to wit: (1) whether the
alleged employer has the power of selection and engagement of
employees; (2) whether he has control of the employee with respect
to the means and methods by which work is to be accomplished; (3)
whether he has the power to dismiss; and (4) whether the employee
was paid wages.[7] These elements of the employer-employee
relationship are present in this case.
First. The existence in this case of the first element is undisputed.
It was petitioner who engaged the services of Lagrama without the
intervention of a third party. It is the existence of the second element,
the power of control, that requires discussion here.
 Of the four elements of the employer-employee relationship, the
control test is the most important. Compared to an employee, an
independent contractor is one who carries on a distinct and
independent business and undertakes to perform the job, work, or
service on its own account and under its own responsibility according
to its 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.[8] Hence, while an independent
contractor enjoys independence and freedom from the control and
supervision of his principal, an employee is subject to the employers
power to control the means and methods by which the employees
work is to be performed and accomplished.
In the case at bar, albeit petitioner Tan claims that private
respondent Lagrama was an independent contractor and never his
employee, the evidence shows that the latter performed his work as
painter under the supervision and control of petitioner. Lagrama
worked in a designated work area inside the Crown Theater of
petitioner, for the use of which petitioner prescribed rules. The rules
included the observance of cleanliness and hygiene and a prohibition
against urinating in the work area and any place other than the toilet
or the rest rooms.[9] Petitioners control over Lagramas work extended
not only to the use of the work area, but also to the result of
Lagramas work, and the manner and means by which the work was to
be accomplished.
Moreover, it would appear that petitioner not only provided the
workplace, but supplied as well the materials used for the paintings,
because he admitted that he paid Lagrama only for the latters
services.
Second. That petitioner had the right to hire and fire was admitted
by him in his position paper submitted to the NLRC, the pertinent
portions of which stated:
Complainant did not know how to use the available comfort rooms or
toilets in and about his work premises. He was urinating right at
the place where he was working when it was so easy for him, as
everybody else did and had he only wanted to, to go to the comfort
rooms. But no, the complainant had to make a virtual urinal out of
his work place! The place then stunk to high heavens, naturally, to the
consternation of respondents and everyone who could smell the
malodor.
...
Given such circumstances, the respondents had every right, nay all the
compelling reason, to fire him from his painting job upon discovery
and his admission of such acts. Nonetheless, though thoroughly
scolded, he was not fired. It was he who stopped to paint for
respondents.
By stating that he had the right to fire Lagrama, petitioner in effect
acknowledged Lagrama to be his employee. For the right to hire and
fire is another important element of the employer-employee
relationship.
Third. Payment of wages is one of the four factors to be considered in
determining the existence of employer-employee relation. Wages are
defined as remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a
time, task, piece, or commission basis, or other method of calculating
the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered.[14] That Lagrama
worked for Tan on a fixed piece-work basis is of no moment. Payment
by result is a method of compensation and does not define the
essence of the relation.[15] It is a method of computing compensation,
not a basis for determining the existence or absence of employer-
employee relationship. One may be paid on the basis of results or time
expended on the work, and may or may not acquire an employment
status, depending on whether the elements of an employer-employee
relationship are present or not.
The Rules Implementing the Labor Code require every employer to
pay his employees by means of payroll.[17] The payroll should show
among other things, the employees rate of pay, deductions made, and
the amount actually paid to the employee. In the case at bar,
petitioner did not present the payroll to support his claim that Lagrama
was not his employee, raising speculations whether his failure to do so
proves that its presentation would be adverse to his case.[18]
The primary standard for 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.[19] In this case, there is such a connection between the job
of Lagrama painting billboards and murals and the business of
petitioner. To let the people know what movie was to be shown in a
movie theater requires billboards. Petitioner in fact admits that the
billboards are important to his business.
Lagrama had been employed by petitioner since 1988. Under the
law, therefore, he is deemed a regular employee and is thus entitled
to security of tenure, as provided in Art. 279 of Labor Code:
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 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.
This Court has held that if the employee has been performing the
job for at least one year, even if not continuously but intermittently,
the repeated and continuing need for its performance is sufficient
evidence of the necessity, if not indispensability, of that activity to the
business of his employer. Hence, the employment is also considered
regular, although with respect only to such activity, and while such
activity exists.
FIXED TERM EMPLOYMENT
BRENT SCHOOL INC. VS. ZAMORA (G.R. No. L-48494, February
5, 1990)
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 Thompsoncase 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 an 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 15 the principle is the same. "Where a contract
specifies the period of its duration, it terminates on the expiration of
such period." 16 "A contract of employment for a definite period
terminates by its own terms at the end of such period." 17
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 to was "prevent the circumvention of the right
of the employee to be secured in their employment as provided . . . (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: 18
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 premise — that the
duties of an employee entail "activities which are usually necessary or
desirable in the usual business or trade of the employer the" —
conclusion does not necessarily follow that the employer and
employee should be forbidden to stipulate any period of time
for the performance of those activities. There is nothing
essentially contradictory between a definite period of an employment
contract and the nature of the employee's duties set down in that
contract as being "usually necessary or desirable in the usual business
or trade of the employer." The concept of the employee's duties
as being "usually necessary or desirable in the usual business
or trade of the employer" is not synonymous with or identical
to employment with a fixed term.
Logically, the decisive determinant in term employment should not be
the activities that the employee is called upon to perform, but the day
certain agreed upon by the parties for the commencement and
termination of their employment relationship, a day certain being
understood to be "that which must necessarily come, although it may
not be known when."
Seasonal employment, and employment for a particular project are
merely instances employment in which a period, where not expressly
set down, 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. . . . the period from
one fixed date to another fixed date . . ." 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." 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
article 22 now reads:
. . . 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:
. . . 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 he 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.
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?
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.
Accordingly, and since the entire purpose behind the development of
legislation culminating in the present Article 280 of the Labor Code
clearly appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure, the
clause in said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the
substantive evil that the Code itself has singled out: agreements
entered into precisely to circumvent security of tenure. It should have
no application to instances where a fixed period of employment was
agreed upon knowingly and voluntarily by the parties, without any
force, duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee dealt
with each other on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter. Unless thus
limited in its purview, the law would be made to apply to purposes
other than those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to absurd
and unintended consequences.
Paraphrasing Escudero, respondent Alegre's employment was
terminated upon the expiration of his last contract with Brent School
on July 16, 1976 without the necessity of any notice. The advance
written advice given the Department of Labor with copy to said
petitioner was a mere reminder of the impending expiration of his
contract, not a letter of termination, nor an application for clearance to
terminate which needed the approval of the Department of Labor to
make the termination of his services effective. In any case, such
clearance should properly have been given, not denied.
WHEREFORE, the public respondent's Decision complained of is
REVERSED and SET ASIDE. Respondent Alegre's contract of
employment with Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of period thereof, he is
declared not entitled to reinstatement and the other relief awarded
and confirmed on appeal in the proceedings below.
PNOC VS. NLRC (G.R. No. 97747, March 31, 1993
Whether or not an employee contracted to drive for petitioner during
the construction of the steam wells is considered a project employee
or a regular employee.
Much can be learned from the leading case of Brent School v.
Zamora, supra. In this case, the Court analyzed the development of
Article 280 from its first version as Article 319 and its amendments
under PD 850 and BP 130 and made the following observation:
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present
Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of
the employee's right to be secure in his tenure, the
clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with
the concept of regular employment as defined
therein should be construed to refer to the substantive
evil that the Code itself has singled out: agreements
entered into precisely to circumvent security of
tenure. It should have no application to instances
where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any
force, duress or improper pressure being brought to
bear upon the employee and absent any other
circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee
dealt with each other on more or less equal terms with
no moral dominance whatever being exercised by the
former over the latter. Unless thus limited in its
purview. the law would be made to apply to purposes
other than those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its effects
 and apt to lead to absurd and unintended
consequences.
As can be gleaned from the said case, the two guidelines, by
which fixed contracts of employments can be said NOT to
circumvent security of tenure, are either:
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.
Does petitioner's fixed contract of employment with private respondent
satisfy any of the guidelines above stated?
Yes, it does.
A careful examination of the last Employment Contract signed by
respondent Mata shows that he indeed signed the same. 5 In fact
petitioners claim that all the previous employment contracts were also
translated for the benefit of private respondent, and it was only when
he understood the same that he signed said contracts. As per
Guideline No. 1, given the circumstances behind private respondent
Mata's employment, private respondent is a project employee.
AMA COMPUTER COLLEGE PARANAQUE VS. AUSTRIA (G.R. No.
164078, November 25, 2007)
1. What is the nature of respondent's employment?
2. Was he lawfully dismissed?
The Labor Arbiter held that, while petitioners did not prove the
existence of just causes in order to warrant respondent's dismissal, the
latter's employment as dean ceased to exist upon expiration of
respondent's term of employment on September 17, 2000. In sum, the
Labor Arbiter held that the nature of respondent's employment is one
for a fixed term. On the other hand, the NLRC and the CA both held
that respondent is a regular employee because respondent had fully
served the three (3)-month probationary period required in the
Handbook, which the petitioners failed to deny or contravene in the
proceedings before the Labor Arbiter.
Petitioners submit that the nature of respondent's employment as
dean is one with a fixed term.
We agree.
We held that Article 280 of the Labor Code does not proscribe or
prohibit an employment contract with a fixed period. Even if the duties
of the employee consist of activities necessary or desirable in the usual
business of the employer, the parties are free to agree on a fixed
period of time for the performance of such activities.
There is nothing essentially contradictory between a definite period of
employment and the nature of the employees duties.
The instant case involves respondent's position as dean, and comes
within the purview of the Brent School doctrine.
First. The letter of appointment was clear. Respondent was confirmed
as Dean of AMA College, Paraaque, effective from April 17,
2000 to September 17, 2000. In numerous cases decided by this
Court, we had taken notice, that by way of practice and tradition, the
position of dean is normally an employment for a fixed term.
The fact that respondent voluntarily accepted the employment,
assumed the position, and performed the functions of dean is clear
indication that he knowingly and voluntarily consented to the terms
and conditions of the appointment, including the fixed period of his
deanship. Other than the handwritten notes made in the letter of
appointment, no evidence was ever presented to show that
respondents consent was vitiated, or that respondent objected to the
said appointment or to any of its conditions. Furthermore, in his status
as dean, there can be no valid inference that he was shackled by any
form of moral dominance exercised by AMA and the rest of the
petitioners.
Alternatively, petitioners also claim that respondent did not attain
regular status, relying on Section 92 of the Manual in connection with
Section 4(m) 4(c) thereof which provides for a three (3)-year
probationary period for Academic Personnel. Petitioners submit that
the position of dean is included in the provision school officials
responsible for academic matters, and may include other school
officials. As such, petitioners aver that the three (3)-month
probationary period for officers set forth in the Handbook is not
applicable to the case of respondent.
The Handbook merely provides for two classes of employees for
purposes of permanency, i.e., Faculty and Non-Academic. However,
the same does not specifically classify the position of dean as part of
the Faculty or of the Non-Academic personnel. At this juncture, we
find solace in the Manual of Regulations for Private Schools
Annotated,[38] which provides that the college dean is the senior officer
responsible for the operation of an academic program, the
enforcement of rules and regulations, and the supervision of faculty
and student services. We already had occasion to state that the
position of dean is primarily academic[39] and, as such, he is
considered a managerial employee.[40] Yet, a perusal of the Handbook
yields the interpretation that the provision on the permanency of
Faculty members applies to teachers only. However, under the given
circumstances and the fact that the position of dean in this case is for
a fixed term, the issue whether the respondent attained a regular
status is not in point. By the same token, the application of the
provision in the Manual as to the required probationary period is
misplaced. It can be well said that a tenured status of employment co-
exists and is co-terminous only with the definite term fixed in the
contract of employment.
In light of the foregoing disquisition, the resolution of the second
question requires full cognizance of respondents fixed term of
employment and all the effects thereof. It is axiomatic that a contract
of employment for a definite period terminates on its own force at the
end of such period.[43] The lack of notice of termination is of no
consequence because when the contract specifies the length of its
duration, it comes to an end upon the expiration of such period.
PANTRANCO NORTH EXPRESS, INC. VS. NLRC (G.R. No.
106654, December 16, 1994)
Fifteen years after such termination of his employment, Peronila
reappeared in 1988 and implored petitioner to reconsider his dismissal,
which plea was initially denied by petitioner. However, due to insistent
appeals by Peronila, petitioner eventually acceded and hired him as a
driver, but on a contractual basis for a fixed period of one month.
The terms and conditions of that new employment on a contractual
basis are contained in a letter, dated April 5, 1988, signed by the
general manager of the company and voluntarily conformed to by
Peronila, thus:
This will confirm your assignment as Driver-Baler Line
on a contractual basis under the following terms and
conditions:
1. EFFECTIVITY
This assignment shall take effect on April 5, 1988 and
shall be for a period of one month.
2. FEE
You shall receive a compensation of P64.00/day.
3. HOURS OF WORK
You shall work in accordance with the schedule given
by your immediate supervisor.
4. TERMINATION
This contract is automatically terminated after one (1)
month or at the close of office hours on May 5, 1988.
5. MISCELLANEOUS
There is no employer-employee relationship between us
hence you are not entitled to any privilege of an
employee viz: sick leave, vacation leave, holiday pay,
overtime pay and others.
The determinative issue in this case is whether or not the employment
contract which stipulates that there is no employer-employee
relationship between petitioner and Peronila is valid.
Although we have ruled in a number of cases applying Article 280 of
the Labor Code 14 that when the activities performed by the employee
are usually necessary or desirable in the usual trade of the employer,
the employment is deemed regular notwithstanding a contrary
agreement, 15 there are exceptions to this rule especially if
circumstances peculiar to the case warrant a departure therefrom.
What said Article 280 seeks to prevent is the practice of some
unscrupulous and covetous employers who wish to circumvent the law
that protects lowly workers from capricious dismissal from their
employment. The aforesaid provision, however, should not be
interpreted in such a way as to deprive employers of the right and
prerogative to choose their own workers if they have sufficient basis to
refuse an employee a regular status. Management has rights which
should also be protected.
The petitioner had validly dismissed Peronila long before he entered
into the contested employment contract. It was Peronila who earnestly
pleaded with petitioner to give him a second chance. The re-hiring of
private respondent was out of compassion and not because the
petitioner was impressed with the credentials of Peronila. Peronila's
previous violations of company rules explains the reluctant attitude to
the petitioner in re-hiring him. When the bus driven by Peronila figured
in a road mishap, that incident finally prompted petitioner to sever any
further relationship with said private respondent.
We have recently held in Philippine Village Hotel vs. National Labor
Relations Commission, et al. 16 that the fact that the private
respondents therein were required to render services necessary or
desirable in the operation of the petitioner's business for a duration of
the one month dry-run operation period did not in any way impair the
validity of the contractual nature of private respondents' contracts of
employment which specifically stipulated that their employment was
only for one month.
In the case of Philippine National Oil Company-Energy Development
Corporation vs. National Labor Relations Commission, et al., 18 this
Court set down two criteria under which fixed contracts of
employments cannot be said to be in circumvention of security of
tenure, to wit:
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.
In the present dispute, the services of respondent Peronila had been
validly terminated by petitioner, when the latter absented himself
without official leave, fifteen years before he was re-hired as a
contractual driver for just one month. Definitely, his re-hiring cannot
be construed to mean that Peronila reacquired his former permanent
status.
CAPAROSO VS. NLRC (G.R. No. 155505, February 15, 2007)
Composite and Tan (respondents) alleged that petitioners were both
hired on 11 May 1999 as deliverymen, initially for three months and
then on a month-to-month basis. Respondents alleged that
petitioners termination from employment resulted from the expiration
of their contracts of employment on 8 October 1999.
The Labor Arbiter ruled that petitioners are regular employees of
respondents.
The NLRC ruled that the mere fact that the employees duties are
necessary or desirable in the business or trade of the employer does
not mean that they are forbidden from stipulating the period of
employment. The NLRC held that petitioners contracts of employment
are valid and binding between the contracting parties and shall be
considered as the law between them. The NLRC ruled that petitioners
are bound by their employment contracts.
The Court of Appeals held that respondents manpower requirement
varies from month to month depending on the demand from their
clients for their products. Respondentsmanpower requirement
determines the period of their employees services. Respondents
employed petitioners for the purpose of addressing a temporary
manpower shortage.
The petition raises these issues:
1. Whether petitioners are regular employees of respondents; and
2. Whether respondents are guilty of illegal dismissal.
The petition has no merit.
 Petitioners are Not Regular Employees
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.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That,
any employee who has rendered at least one year of
service, whether such service is continuous or broken,
shall be considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such activity exists.
Under Article 280 of the Labor Code, a regular employee is (1) one
who is engaged to perform activities that are necessary or desirable in
the usual trade or business of the employer, or (2) a casual employee
who has rendered at least one year of service, whether continuous or
broken, with respect to the activity in which he is employed.
However, even if an employee is engaged to perform activities that are
necessary or desirable in the usual trade or business of the employer,
it does not preclude the fixing of employment for a definite period.
The Court thus laid down the criteria under which fixed-
term employment could not be said to be in circumvention of the law
on security of tenure, thus:
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.
We agree with the Court of Appeals that in this case, the fixed period
of employment was knowingly and voluntarily agreed upon by the
parties. The Court of Appeals noted that there was no
indication of force, duress, or improper pressure exerted on
petitioners when they signed the contracts. Further, there
was no proof that respondents were regularly engaged in
hiring workers for work for a minimum period of five months
to prevent the regularization of their employees.
Petitioners Employment is akin to Probationary Employment
At most, petitioners employment for less than six months can be
considered probationary. Article 281 of the Labor Code provides:
Art. 281. Probationary Employment. - Probationary
employment shall not exceed six (6) 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 on 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.
Petitioners were hired on 11 May 1999, initially for three months. After
the expiration of their contracts, petitioners were hired on a month-to-
month basis. Their contracts of employment ended on 8 October
1999. Hence, they were employed for a total of five
months. Their employment did not even exceed six months to entitle
them to become regular employees.
PUREFOODS CORP. VS. NLRC(G.R. No. 122653, December 12,
1997)
The crux of this petition for certiorari is the issue of whether
employees hired for a definite period and whose services are
necessary and desirable in the usual business or trade of the employer
are regular employees.
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.
Labor Arbiter Arturo P. Aponesto handed down a decision [2] dismissing
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 termination of their services
by reason of the expiration of their contracts of employment was,
therefore, justified.
The NLRC affirmed the Labor Arbiter's decision.
However, on private respondents motion for reconsideration, the NLRC
rendered another decision on 30 January 1995 [4] vacating and setting
aside its decision of 28 October 1994 and holding 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.
We find the petition devoid of merit.
Article 280 of the Labor Code defines regular and casual
employment as follows:
ART. 280. Regular and Casual Employment.-- The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
argument of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee
or where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph; Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Thus, 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.
In the instant case, the private respondents activities consisted in the
receiving, skinning, loining, packing, and casing-up of tuna fish which
were then exported by the petitioner.Indisputably, they were
performing activities which were necessary and desirable in petitioners
business or trade.
Contrary to petitioner's submission, the private respondents could not
be regarded as having been hired for a specific project or
undertaking. The term specific project or undertaking under Article
280 of the Labor Code contemplates an activity which is not commonly
or habitually performed or such type of work which is not done on a
daily basis but only for a specific duration of time or until completion;
the services employed are then necessary and desirable in the
employers usual business only for the period of time it takes to
complete the project.
The fact that the petitioner repeatedly and continuously hired workers
to do the same kind of work as that performed by those whose
contracts had expired negates petitioners contention that those
workers were hired for a specific project or undertaking only.
Now on the validity of private respondents' five-month contracts
of employment. In the leading case of Brent School,
Inc. v. Zamora, [8] which was reaffirmed in numerous subsequent
cases, [9] this Court has upheld the legality of fixed-term
employment. It ruled that 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. But,
this Court went on to say 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. As pointed
out by the private respondents:
[I]t 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. Cannery
workers are never on equal terms with their employers. 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.[10]
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. [12] 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, thus, 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, [17] 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.
UNIVERSAL ROBINA CORP. VS. CATAPANG (G.R. No. 164736,
October 14, 2005)
The individual respondents were hired by the petitioner company on
various dates from 1991 to 1993 to work at its duck farm
in Barangay Sto. Tomas, Calauan, Laguna. The respondents were
hired under an employment contract which provided for a five-month
period. After the expiration of the said employment contracts, the
petitioner company would renew them and re-employ the
respondents. This practice continued until sometime in 1996, when the
petitioners informed the respondents that they were no longer
renewing their employment contracts.
The CA held that after rendering more than one year of continuous
service, the respondents became regular employees of the petitioners
by operation of law. Moreover, the petitioners used the five-month
contract of employment as a convenient subterfuge to prevent the
respondents from becoming regular employees and such contractual
arrangement should be struck down or disregarded as contrary to
public policy or morals. The petitioners act of repeatedly and
continuously hiring the respondents in a span of three to five years to
do the same kind of work negates their assertion that the respondents
were hired for a specific project or undertaking only.
The petitioners submit that the respondents are not regular
employees. They aver that it is of no moment that the respondents
have rendered service for more than a year since they were covered
by the five-month individual contracts to which they duly acquiesced.
The petitioners contend that they were free to terminate the services
of the respondents at the expiration of their individual contracts. The
petitioners maintain that, in doing so, they merely implemented the
terms of the contracts.
The respondents aver that they acquired the status as regular
employees after rendering one year of service to the petitioner
company. They contend that the contracts providing for a fixed period
of employment should be struck down as contrary to public policy,
morals, good customs or public order as it was designed to preclude
the acquisition of tenurial security.
In any case, we find that the CA, the NLRC and the Labor
Arbiter correctly categorized the respondents as regular employees of
the petitioner company. In Abasolo v. National Labor Relations
Commission,[40] 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.[41]
Thus, we quote with approval the following excerpt from the
decision of the CA:
It is obvious that the said five-month contract of
employment was used by petitioners as a convenient
subterfuge to prevent private respondents from
becoming regular employees. Such contractual
arrangement should be struck down or disregarded as
contrary to public policy or morals. To uphold the same
would, in effect, permit petitioners 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.
Petitioners act of repeatedly and continuously
hiring private respondents in a span of 3 to 5 years to
do the same kind of work negates their contention that
private respondents were hired for a specific project or
undertaking only.[42]
VIERNES, et al., VS. NLRC (G.R. No. 108405, April 4, 2003)
It is the contention of the complainants that they were not apprentices
but regular employees whose services were illegally and unjustly
terminated in a manner that was whimsical and capricious. On the
other hand, the respondent invokes Article 283 of the Labor Code in
defense of the questioned dismissal.
The Labor Arbiter rendered a decision dismissing the complaints for
illegal dismissal filed by the complainants for lack of merit.
NLRC rendered a decision modifying the appealed decision by
declaring complainants’ dismissal illegal, thus ordering their
reinstatement to their former position as meter readers or to any
equivalent position with payment of backwages limited to one year
and deleting the award of indemnity and attorney’s fees.
We find the petition partly meritorious.
As to the first issue: We sustain petitioners’ claim that they should be
reinstated to their former position as meter readers, not on a
probationary status, but as regular employees.
Reinstatement means restoration to a state or condition from which
one had been removed or separated.10 In case of probationary
employment, Article 281 of the Labor Code requires the employer to
make known to his employee at the time of the latter’s engagement of
the reasonable standards under which he may qualify as a regular
employee.
A review of the records shows that petitioners have never been
probationary employees. There is nothing in the letter of appointment,
to indicate that their employment as meter readers was on a
probationary basis. It was not shown that petitioners were informed
by the private respondent, at the time of the latter’s employment, of
the reasonable standards under which they could qualify as regular
employees. Instead, petitioners were initially engaged to perform their
job for a limited duration, their employment being fixed for a definite
period, from October 8 to 31, 1990.
Private respondent’s reliance on the case of Brent School, Inc. vs.
Zamora is misplaced.
The principle we have enunciated in Brent applies only with respect to
fixed term employments. While it is true that petitioners were initially
employed on a fixed term basis as their employment contracts were
only for October 8 to 31, 1990, after October 31, 1990, they were
allowed to continue working in the same capacity as meter readers
without the benefit of a new contract or agreement or without the
term of their employment being fixed anew. After October 31, 1990,
the employment of petitioners is no longer on a fixed term basis. The
complexion of the employment relationship of petitioners and private
respondent is thereby totally changed. Petitioners have attained the
status of regular employees.
Under Article 280 of the Labor Code, a regular employee is one who is
engaged to perform activities which are necessary or desirable in the
usual business or trade of the employer, or a casual employee who
has rendered at least one year of service, whether continuous or
broken, with respect to the activity in which he is employed.
In De Leon vs. NLRC,13 and Abasolo vs. NLRC,14 we laid down the test
in determining regular employment, to wit:
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 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.15
Clearly therefrom, there are two separate instances whereby it can be
determined that an employment is regular: (1) The particular activity
performed by the employee is necessary or desirable in the usual
business or trade of the employer; or (2) if the employee has been
performing the job for at least a year.
Herein petitioners fall under the first category. They were engaged to
perform activities that are necessary to the usual business of private
respondent. We agree with the labor arbiter’s pronouncement that the
job of a meter reader is necessary to the business of private
respondent because unless a meter reader records the electric
consumption of the subscribing public, there could not be a valid basis
for billing the customers of private respondent. The fact that the
petitioners were allowed to continue working after the expiration of
their employment contract is evidence of the necessity and desirability
of their service to private respondent’s business.
MEGASCOPE GENERAL SERVICES VS. NLRC (G.R. No. 109224,
June 19, 1997)
Petitioner Megascope General Services is a sole proprietorship
engaged in contracting out general services. In 1977, it entered into a
landscaping contract with the System and Structures, Inc. (SSI) which
subcontracted the construction of the National Power Corporation
Housing Village in Bagac, Bataan. In hiring laborers, petitioner would
give them work from five (5) to ten (10) days as the need arose and
there were periodical gaps in the hiring of employees. Between
February 15, 1977 and January 1, 1989, it contracted the services of
the herein nineteen (19) private respondents as gardeners, helpers
and maintenance workers. They were deployed at the National Power
Corporation (NPC) in Bagac, Bataan.
Petitioner and David countered that private respondents were hired for
a definite period of employment, the commencement and termination
of which were already known to them; that the two-year period
stipulated in the private respondents' contract with NPC had
expired; that it was the NPC which requested petitioner and David for
an extension on a monthly basis of the employment of some of the
private respondents; and that the reason for the termination of private
respondents' employment was the termination itself of petitioner's
contract with NPC.
Labor Arbiter Ariel C. Santos promulgated his decision finding that, by
the nature of their employment, private respondents were "usually
contractual employees."Nonetheless, he opined, in view of the length
of their service, that private respondents had attained the status of
"regular contractual employees" who, pursuant to Policy Instruction
No. 20 issued by then Labor Secretary Blas Ople, "cannot just be
terminated after the expiration of a contract in an area to where they
are assigned without paying them the corresponding separation pay
from the time they have served respondent's company." He also held
that since private respondents' termination of employment was the
result of the expiration of petitioner's contract with the NPC, there was
no unlawful dismissal.
Petitioner and David appealed to the National Labor Relations
Commission (NLRC). The NLRC affirmed the decision of the Labor
Arbiter.
The petition is devoid of merit.
We have reiterated time and again that the yardstick in the
determination of the existence of an employer-employee relationship
consists of these four (4) elements: (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 employee's conduct.[8] All
these elements are present in this case.
Private respondents were selected and hired by petitioner which
assigned them to the NPC housing village in Bagac and in Km. 168,
Morong, Bataan. They drew their salaries from petitioner which
eventually dismissed them. Petitioner's control over private
respondents was manifest in its power to assign and pull them out of
clients at its own discretion. Power of control refers merely to the
existence of the power and not to the actual exercise thereof. It is not
essential for the employer to actually supervise the performance of
duties of the employee. It is enough that the former has the right to
wield the power.[9]
The existence of an employer-employee relationship in the case at
bar was established, not merely by the allegations and assertions of
private respondents, but also by petitioner's own admission in its
position paper subscribed before Notary Public Restituto M. David.
On whether or not private respondents were regular employees of
petitioner, 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.
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."
Undeniably, private respondents had been performing
activities which were necessary or desirable in the usual trade or
business of petitioner. Their services as gardeners, helpers and
maintenance workers were continuously availed of by petitioner in the
conduct of its business as supplier of such services to clients. Thus,
even if there were a contrary agreement between the parties, if the
worker has worked for more than a year and there is a reasonable
connection between the particular activity performed by the employee
in relation to the usual business or trade of the employer, an
employer-employee relationship is deemed to exist between the
parties.
Granting arguendo that private respondents were initially
contractual employees, by the sheer length of service they had
rendered for petitioner, they had been converted into regular
employees by virtue of the aforequoted proviso in the second
paragraph of Art. 280 since they all served petitioner's client for more
than a year. Thus, in Baguio Country Club Corporation v. NLRC,[14] the
Court said:
"x x x 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.
AGUSAN DEL NORTE ELECTRIC COOP, INC. VS. CAGAMPANG
AND GARZON (G.R. No. 167627, October 10, 2008)
Respondents Joel Cagampang and Glenn Garzon started working as
linemen for petitioner Agusan del Norte Electric Cooperative, Inc.
(ANECO) on October 1, 1990, under an employment contract which
was for a period not exceeding three months. They were both
allegedly required to work eight hours a day and sometimes on
Sundays, getting a daily salary of P122.00. When the contract expired,
the two were laid-off for one to five days and then ordered to report
back to work but on the basis of job orders.
After several renewals of their job contracts in the form of job orders
for similar employment periods of about three months each, the said
contracts eventually expired onApril 31, 1998 and July 30,
1999. Respondents contracts were no longer renewed, resulting in
their loss of employment.
Respondents filed an illegal dismissal case against petitioners before the
Honorable Labor Arbiter Alim D. Pangandaman.
The Labor Arbiter declared the dismissal illegal.
The NLRC set aside the decision of the Labor Arbiter.
CA granted the petition filed by the respondents.
Petitioners claim that the respondents were individually hired only
as emergency workers on a contractual basis and for a fixed or
definite term/period of employment. Said contracts were never
intended to circumvent the law on security of tenure, and that the
contractual employment with a fixed period or term that existed
between ANECO and respondents should have been considered rightly
falling within the legally recognized and accepted concept
of management prerogative. Respondents, for their part, counter that
there is no legal basis for an inference that they were not dismissed
and that their employment contract merely expired.
 After considering the facts and the submissions of the parties,
we are in agreement that respondents were illegally dismissed, and
that the petition by the employer lacks merit.
There is no dispute that the respondents work as linemen was
necessary or desirable in the usual business of ANECO. Additionally,
the respondents have been performing the job for at least one
year. 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. As held in Integrated
Contractor and Plumbing Works, Inc. v. National Labor Relations
Commission:[11]
The test to determine whether employment is
regular or not is the reasonable connection between the
particular activity performed by the employee in relation
to the usual business or trade of the employer. 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. Thus, we held that where the
employment of project employees is extended long
after the supposed project has been finished, the
employees are removed from the scope of project
employees and are considered regular employees.
While length of time may not be the controlling
test for project employment, it is vital in determining if
the employee was hired for a specific undertaking or
tasked to perform functions vital, necessary and
indispensable to the usual business or trade of the
employer. Here, private respondent had been a project
employee several times over. His employment ceased to
be coterminous with specific projects when he was
repeatedly re-hired due to the demands of petitioners
business. Where from the circumstances it is apparent
that periods have been imposed to preclude the
acquisition of tenurial security by the employee, they
should be struck down as contrary to public policy,
morals, good customs or public order.
PHILIPS SEMICONDUCTOR VS. FADRIQUELA (G.R. No.
141717, April 14, 2004)
The petitioner Philips Semiconductors (Phils.), Inc. 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.
On May 8, 1992, respondent Eloisa Fadriquela executed a Contract of
Employment with the petitioner in which she was hired as a production
operator with a daily salary of P118. Her initial contract was for a
period of three months up to August 8, 1992,[3] but was extended for
two months when she garnered a performance rating of 3.15.[4] Her
contract was again renewed for two months or up to December 16,
1992,[5] when she received a performance rating of 3.8.[6] After the
expiration of her third contract, it was extended anew, for three
months,[7]that is, from January 4, 1993 to April 4, 1993.
She, however, incurred five absences in the month of April, three
absences in the month of May and four absences in the month of
June.[10] Line supervisor Shirley F. Velayo asked the respondent why
she incurred the said absences, but the latter failed to explain her
side. The respondent was warned that if she offered no valid
justification for her absences, Velayo would have no other recourse
but to recommend the non-renewal of her contract. The respondent
still failed to respond, as a consequence of which her performance
rating declined to 2.8. Velayo recommended to the petitioner that the
respondents employment be terminated due to habitual
absenteeism,[11] in accordance with the Company Rules and
Regulations.[12] Thus, the respondents contract of employment was no
longer renewed.
Respondent filed for illegal dismissal.
On the other hand, the petitioner contended that the respondent had
not been dismissed, but that her contract of employment for the
period of April 4, 1993 to June 4, 1993 merely expired and was no
longer renewed because of her low performance rating.
The Labor Arbiter rendered a decision dismissing the complaint for lack
of merit.
The Labor Arbiter declared that the respondent, who had rendered
less than seventeen months of service to the petitioner, cannot be said
to have acquired regular status. The petitioner and the Philips
Semiconductor Phils., Inc., Workers Union had agreed in their
Collective Bargaining Agreement (CBA) that a contractual employee
would acquire a regular employment status only upon completion of
seventeen months of service.
The Labor Arbiter also ruled that the respondent cannot justifiably
complain that she was deprived of her right to notice and hearing
because her line supervisor had asked her to explain her unauthorized
absences. Accordingly, these dialogues between the respondent and
her line supervisor can be deemed as substantial compliance of the
required notice and investigation.
The NLRC further ruled that as a contractual employee, the
respondent was bound by the stipulations in her contract of
employment which, among others, was to maintain a performance
rating of at least 3.0 as a condition for her continued
employment. Since she failed to meet the said requirement, the
petitioner was justified in not renewing her contract.
The appellate court rendered a decision reversing the decisions of
the NLRC and the Labor Arbiter and granting the respondents
petition. The CA ratiocinated that the bases upon which the NLRC and
the Labor Arbiter founded their decisions were inappropriate because
the CBA and the Minutes of the Meeting between the union and the
management showed that the CBA did not cover contractual
employees like the respondent. Thus, the seventeenth-month
probationary period under the CBA did not apply to her. The CA ruled
that under Article 280 of the Labor Code, regardless of the written and
oral agreements between an employee and her employer, an
employee shall be deemed to have attained regular status when
engaged to perform activities which are necessary and desirable in the
usual trade or business of the employer. Even casual employees shall
be deemed regular employees if they had rendered at least one year
of service to the employer, whether broken or continuous.
The CA noted that the respondent had been performing activities
that were usually necessary and desirable to the petitioners business,
and that she had rendered thirteen months of service. It concluded
that the respondent had attained regular status and cannot, thus, be
dismissed except for just cause and only after due hearing. The
appellate court further declared that the task of the respondent was
hardly specific or seasonal. The periods fixed in the contracts of
employment executed by the respondent were designed by the
petitioner to preclude the respondent from acquiring regular
employment status. The strict application of the contract of
employment against the respondent placed her at the mercy of the
petitioner, whose employees crafted the said contract.
The petitioner filed the instant petition and raised the following issues
for the courts resolution: (a) whether or not the respondent was still a
contractual employee of the petitioner as of June 4, 1993; (b) whether
or not the petitioner dismissed the respondent from her employment;
(c) if so, whether or not she was accorded the requisite notice and
investigation prior to her dismissal; and, (d) whether or not the also considered regular, but only with respect to such activity and
respondent is entitled to reinstatement and full payment of backwages while such activity exists.[22] The law does not provide the qualification
as well as attorneys fees. that the employee must first be issued a regular appointment or must
be declared as such before he can acquire a regular employee
We agree with the appellate court.
status.[23]
Article 280 of the Labor Code of the Philippines was emplaced in
In this case, the respondent was employed by the petitioner
our statute books to prevent the circumvention by unscrupulous
on May 8, 1992 as production operator. She was assigned to
employers of the employees right to be secure in his tenure by
wirebuilding at the transistor division. There is no dispute that the
indiscriminately and completely ruling out all written and oral
work of the respondent was necessary or desirable in the business or
agreements inconsistent with the concept of regular employment
trade of the petitioner.[24] She remained under the employ of the
defined therein. The language of the law manifests the intent to
petitioner without any interruption since May 8, 1992 to June 4,
protect the tenurial interest of the worker who may be denied the
1993 or for one (1) year and twenty-eight (28) days. The original
rights and benefits due a regular employee because of lopsided
contract of employment had been extended or renewed for four times,
agreements with the economically powerful employer who can
to the same position, with the same chores. Such a continuing need
maneuver to keep an employee on a casual or temporary status for as
for the services of the respondent is sufficient evidence of the
long as it is convenient to it.[18] In tandem with Article 281 of the
necessity and indispensability of her services to the petitioners
Labor Code, Article 280 was designed to put an end to the pernicious
business.[25] By operation of law, then, the respondent had attained
practice of making permanent casuals of our lowly employees by the
the regular status of her employment with the petitioner, and is thus
simple expedient of extending to them temporary or probationary
entitled to security of tenure as provided for in Article 279 of the Labor
appointments, ad infinitum.[19]
Code.
The two kinds of regular employees under the law are (1) those
The petitioners reliance on our ruling in Brent School, Inc. v.
engaged to perform activities which are necessary or desirable in the
Zamora[29] and reaffirmed in subsequent rulings is misplaced, precisely
usual business or trade of the employer; and (2) those casual
in light of the factual milieu of this case. In the Brent School,
employees who have rendered at least one year of service, whether
Inc. case, we ruled that the Labor Code does not outlaw employment
continuous or broken, with respect to the activities in which they are
contracts on fixed terms or for specific period. We also ruled that the
employed.[20] The primary standard to determine a regular
decisive determinant in term employment should not be the activity
employment is the reasonable connection between the particular
that the employee is called upon to perform but the day certain
activity performed by the employee in relation to the business or trade
agreed upon by the parties for the commencement and termination of
of the employer. The test is whether the former is usually necessary or
their employment relationship. However, we also emphasized in the
desirable in the usual business or trade of the employer.[21] If the
same case that where from the circumstances it is apparent that the
employee has been performing the job for at least one year, even if
periods have been imposed to preclude acquisition of tenurial security
the performance is not continuous or merely intermittent, the law
by the employee, they should be struck down or disregarded as
deems the repeated and continuing need for its performance as
contrary to public policy and morals.
sufficient evidence of the necessity, if not indispensability of that
activity to the business of the employer. Hence, the employment is