1

1
G.R.No.70705August21,1989
176SCRA615

MOISES DE LEON, vs. NATIONAL LABOR RELATIONS

COMMISSIONand
LATONDEAINC.,

FERNAN,C.J.:

FACTS:
Petitioner DE LEON was employed by LA
TONDENA(businessofmanufactureanddistilleryofwines
andliquors)onDec11,1981,attheMaintenanceSection
of its Engineering Dept in Tondo. His work consisted
mainly of painting company building and equipment, and
otheroddjobsrelatingtomaintenance.Hewaspaidona
daily basis through petty cash vouchers. After service of
morethan1year,DELEONrequestedthathebeincluded
inthepayrollofregularworkers.LATONDENAresponded
bydismissinghimfromwork.Weeksafterthis,hewasre
hired indirectly through the Vitas Magsaysay Village
LivelihoodCouncil,alaboragencyofrespondent,andwas
madetoperformtasksheusedtodo.Havingbeenrefused
reinstatement despite repeated demands, petitioner filed
a complaint before the Office of the Labor Arbiter. LA
TONDENA claimed he was a casual worker hired only to
paint a certain bldg in the company premises, and such
work terminated upon completion of the painting job.
Labor Arbiter Hernandez ordered reinstatement and
payment of backwages to petitioner stating that
Complainant's being hired on casual basis did not
dissuade from the cold fact that such jobs he performed
relatedtomaintenanceasamaintenancemanisnecessary
and desirable to the better operation of the business
company. On appeal, NLRC reversed such decision
because his job cannot be considered necessary in the
usualtradeofemployerstatingthat"Paintingthebusiness
or factory building is not a part of the respondent's
manufacturingordistillingprocessofwinesandliquors.

ISSUE:
Whetherornotpetitionerisaregularemployee

RULING:

Yes. An employment shall be deemed to be

casual if it is not covered by Art.281 of Labor Code
provided, that any employee who has rendered at least
oneyearofservice,whethersuchserviceiscontinuousor
broken, shall be considered a regular employee with
respect to the activity in which he is employed and his
employmentshallcontinuewhilesuchactuallyexists.
It is selfserving, to say the least, to isolate
petitioner'spaintingjobtojustifythepropositionofcasual
employment and conveniently disregard the other
maintenance activities of petitioner which were assigned
by the respondent company when he was not painting.
The law demands that the nature and entirety of the
activities performed by the employee be considered. In
thecaseofpetitioner,thepaintingandmaintenancework
given him manifest a treatment consistent with a
maintenancemanandnotjustapainter,forifhisjobwas
truly only to paint a building there would have been no
basis for giving him other work assignments In between
paintingactivities.
It is not tenable to argue that the painting and
maintenance work of petitioner are not necessary in
respondent'sbusinessofmanufacturingliquorsandwines,
just as it cannot be said that only those who are directly
involved in the process of producing wines and liquors
may be considered as necessary employees. Otherwise,
there would have been no need for the regular
Maintenance Section of respondent company's
EngineeringDepartment,mannedbyregularemployees.
Furthermore,thepetitionerperformedhiswork
of painting and maintenance activities during his
employment in respondent's business which lasted for
more than one year, until early January, 1983 when he
demanded to be regularized and was subsequently
dismissed.Certainly,bythisfactaloneheisentitledbylaw
to be considered a regular employee. And considering
further that weeks after his dismissal, petitioner was
rehired by the company through a labor agency and was
returnedtohispostintheMaintenanceSectionandmade
to perform the same activities that he used to do, it
cannot be denied that his activities as a regular painter
andmaintenancemanstillexist.
Itisofnomomentthatpetitionerwastoldwhen
he was hired that his employment would only be casual.
Thatdetermineswhetheracertainemploymentisregular
or casual is not the will and word of the employer, to

whichthedesperateworkeroftenaccedes,muchlessthe
procedureofhiringtheemployeeorthemannerofpaying
his salary. It is the nature of the activities performed in
relationtotheparticularbusinessortradeconsideringall
circumstances,andinsomecasesthelengthoftimeofits
performanceanditscontinuedexistence.

Petitionisgranted.Respondentisorderedtopay
petitionerhisbenefits.

2
G.R.No.125606October7,1998

297SCRA277

SAN MIGUEL CORPORATION, vs. NATIONAL LABOR

RELATIONS
COMMISSION, THIRD DIVISION, and DE
GUZMAN

QUISUMBING,J.:

FACTS:
In November 1990, Francisco De Guzman, JR.
was hired by SMC as helper/bricklayer for a specific
project,therepairandupgradingoffurnaceCatitsManila
GlassPlant.Hiscontractofemploymentprovidedthatsaid
temporary employment was for a specific period of
approximately 4 months. On April 30, 1991,De Guzman
wasabletocompletetherepairandupgradingoffurnace
C,hencehisserviceswereterminatedonthatsameday.
On May 10, 1991, De Guzman was again hired
for a specific job which involved the draining/cooling
downoffurnaceFandtheemergencyrepairoffurnaceE.
This project was for a specific period of approximately 3
months. After the completion of this task, at the end of
July1991,DeGuzman'sserviceswereterminated.
On Aug.1, 1991, complainant saw his name in a
Memorandumposted at the Company'sBulletin Board as
amongthosewhowereconsidereddismissed.
OnAug.12,1994,orafterthelapseofmorethan
3 years from the completion of the last undertaking for
which De Guzman was hired, he filed a complaint for
illegaldismissalagainstSMC.
1

OnJune30,1995,laborArbiterFelipeGarduque
IIrenderedthedecisiondismissingsaidcomplaintforlack
ofmerit,sustainingSMC'sargumentthatDeGuzmanwas
a project employee. Moreover, his silence for more than
three(3)yearswithoutanyreasonableexplanationtended
toweakenhisclaim.
Upon appeal, NLRC reversed Labor Arbiter
Garduque'sdecision.Initsruling,NLRCstatedthatSMCs
scheme ofsubsequently rehiring complainant after only
10daysfromthelastdayoftheexpirationofhiscontract
ofemploymentforaspecificperiod,andgivinghimagain
another contract ofemployment for another specific
periodcannotbecountenanced.Thisisonewayofdoing
violencetotheemployee'sconstitutionalrighttosecurity
of tenure under which even employees under
probationary status are amply protected. SMCs motion
forreconsiderationwasdeniedbyNLRC.

ISSUES:
1. Whether or not De Guzman is a regular
employee
2. Whether or not De Guzman was illegally
dismissed

RULING:
1.
NO. Art. 280 of the Labor Code which defines
regular, project, and casual employment reinforces the
Constitutionalmandatetoprotecttheinterestoflaboras
itsetsthelegalframeworkforascertainingone'snatureof
employment, and distinguishing different kinds of
employees.Itslanguagemanifeststheintenttosafeguard
the tenurial interest of worker who may be denied the
enjoymentoftherightsandbenefitsduetoanemployee,
regardless of the nature of his employment, by virtue of
lopsided agreements which the economically powerful
employer who can maneuver to keep an employee on a
casualorcontractualstatusforaslongasitisconvenient
totheemployer.
Thus, under Article 280 of the Labor Code, an
employment is deemed regular when the activities
performed by the employee are usually necessary or
desirable in the usual business or trade of the employer
even if the parties enter into an agreement stating
otherwise. But considered notregular under said article
are the socalled "project employees" the termination of
which is more or less determinable at the time of

employment,suchasthoseconnected,whichbyitsnature
isonlyforoneseasonoftheyearandtheemploymentis
limited for the duration ofthat season, such as the
Christmas holiday season. Nevertheless, an exception to
thisexceptionismade:anyemployeewhohasrenderedat
least1yearofservice,whethercontinuousorbroken,with
respect to the activity he performed and while such
activityactuallyexists,mustbedeemedregular.
The plant where De Guzman was employed for
only7monthsisengagedinthemanufacturerofglass,an
integral component of the packaging and manufacturing
businessofpetitioner.Theprocessofmanufacturingglass
requiresafurnace,whichhasalimitedoperatinglife.SMC
resorted to hiring project or fixed term employees in
having said furnaces repaired since said activity is not
regularly performed. Said furnaces are to be repaired or
overhauled only in case of need and after being used
continuously for a varying period of 510 years. In 1990,
one of the furnaces of petitioner required repair and
upgrading.Thiswasanundertakingdistinctandseparate
from SMC's business of manufacturing glass. For this
purpose, SMC must hire workers to undertake the said
repairandupgrading.DeGuzmanwas,thus,hiredbySMC
on November 28, 1990 on a"temporary status for a
specificjob"foradeterminedperiodofapproximatelyfour
months. Upon completion of the undertaking, or on April
30, 1991, De Guzman's services were terminated. A few
days, thereafter, two of SMC's furnaces required
"draining/coolong down" and "emergency repair". De
Guzman was again hired on May 10,1991 to help in the
new undertaking, which would take approximately 3
months to accomplish. Upon completion of the second
undertaking, private respondent's services were likewise
terminated. He was not hired a third time, and his two
engagementstakentogetherdidnottotalonefullyearin
order to qualify him as an exception to the exception
fallingunderthecitedprovisointhesecondparagraphof
Art.280oftheLaborCode.

2.
NO.
De Guzman was hired for a specific
project that was not within the regular business of the
corporation for SMC is not engaged in the business of
repairing furnaces. Such undertakings were also
identifiablyseparateanddistinctfromtheusual,ordinary
orregularbusinessoperationsofpetitioner,whichisglass
manufacturing.These undertakings, the duration and

scopeofwhichhadbeendeterminedandmadeknownto
privaterespondentatthetime ofhisemploymentclearly
indicated the nature of his employment as a project
employee. Thus, his services wereterminated legally after
thecompletionoftheproject.

Petition is hereby GRANTED. The decision ofthe Labor

ArbiterisREINSTATED.

3
TABASvs.CALIFORNIAMANUFACTURINGCOMPANY,INC.

SARMIENTO,J.:
The petitioners petitioned theNational Labor
Relations Commission for reinstatement and payment of
variousbenefits, including minimum wage, overtime pay,
holiday pay, thirteenmonth pay, and emergency cost of
livingallowancepay,againsttherespondent,theCalifornia
ManufacturingCompany.
The California Manufacturing Company
(California) filed a motion to dismiss and denied the
existence of an employeremployee relation between the
petitionersandthecompanyandanyliabilityforpayment
of money claims. On motion of the petitioners, Livi
Manpower Services, Inc. (Livi) was impleaded as a party
respondent. It appears that the petitioners were
employeesof(Livi),whichsubsequentlyassignedthemto
workas"promotionalmerchandisers"fortheformerfirm.
The agreement provided that California "has no
controlorsupervisionsover[Livi's]workerswithrespectto
how they accomplish their work or perform [Californias]
obligation";the Livi "is an independent contractor and
nothing herein contained shall be construed as creating
between [California] and [Livi] . . . the relationship of
principalagent or employeremployee'; that "it is hereby
agreed that it is the sole responsibility of [Livi] to comply
withallexisting aswellasfuturelawsthat"[California]is
freeandharmlessfromanyliabilityarisingfromsuchlaws
or from any accident that may befall workers and
employees of [Livi] while in the performance of their
duties for[California].It was further expressly stipulated
that the assignment of workers to Californiashall be on a
"seasonal and contractual basis.The petitioners were
then made to sign employment contracts with durations
ofsixmonths.
2

Thepetitionersnowallegethattheyhadbecome
regular California employeesand demandsimilar benefits.
They likewise claim that pending further proceedings
below, they were notified by California that they would
not be rehired. As a result, they filed an amended
complaintchargingCaliforniawithillegaldismissal.

California admits having refused to accept the

petitionersbacktoworkbutdenyliabilitythereforforthe
reasonthatitisnotthepetitioners'employerandthatthe
"retrenchment"hadbeenforcedbybusinesslossesaswell
asexpirationofcontracts.

The labor arbiter's decision ruled against the

existenceofanyemployeremployeerelationbetweenthe
petitioner and California in the light of the manpower
supplycontractandagainstthelatter'sliability.Thelabor
arbiter absolved Livi from any obligation because the
"retrenchment" in question was allegedly "beyond its
control."TheCAfurtheraffirmed.

Issue:WhetherthepetitionersareCalifornia'semployees.

Held: Yes.The SC reversed the decisions of CA and Labor

Arbiter. The petitioners are the employees of California
while Livi is an independent contractor. The existence of
an employeremployees relation is a question of law and
being such, it cannot be made the subject of agreement.
Hence, the fact that the manpower supply agreement
betweenLiviandCaliforniahadspecificallydesignatedthe
formerasthepetitioners'employerandhadabsolvedthe
latter from any liability as an employer, will not erase
either party's obligations as an employer, if an employer
employee relation otherwise exists between the workers
andeitherfirm.ThisCourthasconsistentlyruledthatthe
determination of whether or not there is an employer
employee relation depends upon four standards: (1) the
manner of selection and engagement of the putative
employee; (2) the mode of payment of wages; (3) the
presence or absence of a power of dismissal; and (4) the
presence or absence of a power to control the putative
employee'sconduct,whichisthemostdecisivefactor.And
inthelaboronlycontracting,the"laboronly"contractoris
considered "merely an agent of the employer," and

liability must be shouldered by either one or shared by

both.
On the one hand, Livi performs "manpower
services",meaningtosay,itcontractsoutlaborinfavorof
clients.Weholdthatitis"anindependentcontractor."The
bare fact that Livi maintains a separate line of business
does not extinguish the equal fact that it has provided
California with workers to pursue the latter's own
business. In this connection, we do not agree that the
petitionershadbeenmadetoperformactivities'whichare
not directly related to the general business of
manufacturing," California's purported "principal
operationactivity.Thepetitioner'shadbeenchargedwith
"merchandizing promotion or sale of the products of
[California] in the different sales outlets in Metro Manila
includingtaskandoccasionalpricetagging,"anactivitythat
is doubtless, an integral part of the manufacturing
business. It is not, then, as if Livi had served as its
(California's) promotions or sales arm or agent, but as a
placement agency, had simply supplied it with the
manpower necessary to carry out its (California's)
merchandising activities, using its (California's) premises
andequipment.
For another, and as we indicated, the relations
of parties must be judged from case to case and the
decreeoflaw,andnotbydeclarationsofparties.Thefact
that the petitioners have been hired on a "temporary or
seasonal"basismerelyisnoargumenteither.Atemporary
or casual employee, under Article 218 of the LaborCode,
becomes regular after service of one year, unless he has
beencontractedforaspecificproject.Andwecannotsay
that merchandising is a specific project for the obvious
reason that it is an activity related to the daytoday
operationsofCalifornia.
Accordingly, under Article 281 of theCode, they
had become regular employeesofCaliforniaand had
acquired a security of tenure. Hence, they cannot be
separatedwithoutdueprocessoflaw.
Thus, SC ordered the California Manufacturing Company,
to reinstate the petitioners with full status and rights of
regularemployees;andtheLiviManpowerService,Inc.to
pay, jointly and severally, unto the petitionersbackwages
andothersalaries

PHILIPS SEMICONDUCTORS (PHILS.), INC., vs. ELOISA

FADRIQUELA,

CALLEJO,SR.,J.:
Philips Semiconductors (Phils.), Inc. is a domestic
corporation engaged in the production and assembly of
semiconductors. 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.
On May 8, 1992, respondent Eloisa Fadriquela
executed a Contract of Employmentwith the petitioner in
which she was hired as a production operator. Her initial
contract was for a period of three monthsbut was
extended for several months until June 1993 because of
hergoodperformance.However,sheincurred5absences
inthemonthofApril,3absencesinthemonthofMayand
4absencesinthemonthofJune.10LinesupervisorShirley
F.Velayoaskedtherespondentwhysheincurredthesaid
absences, but the latter failed to explain her side. As a
result, the respondentscontract of employment was no
longerrenewed.

The respondent filed a complaint before the

National Labor Relations Commission (NLRC) for illegal
dismissal against the petitioner. She alleged that she was
illegally dismissed, as there was no valid cause for the
termination of her employment. She was not notified of
any infractions she allegedly committed; neither was she
accordedachancetobeheard.Furthermore,considering
thatshehadrenderedmorethansixmonthsofserviceto
the petitioner, she was already a regular employee and
couldnotbeterminatedwithoutanyjustifiablecause.

Labor Arbiters decision: dismissed the complaint for lack

ofmeritdeclaringthattherespondent,whohadrendered
lessthan17monthsofservicetothepetitioner,cannotbe
said to have acquired regular status. The petitioner and
the Philips Semiconductor Phils., Inc., Workers Union had
agreedintheirCollectiveBargainingAgreement(CBA)that
a contractual employee would acquire a regular
employment status only upon completion of seventeen
monthsofservice.
NLRC: affirmed the Labor Arbiters decision. The NLRC
explainedthattherespondentwasacontractualemployee
3

whose period of employment was fixed in the successive

contracts of employment she had executed with the
petitioner.
CA:reversed the decisions of the NLRC and the Labor
Arbiter.TheCAheldthattheCBAandtheMinutesofthe
Meetingbetweentheunionandthemanagementshowed
thattheCBAdidnotcovercontractualemployeeslikethe
respondent. Thus, the seventeenthmonth probationary
period under the CBA did not apply to her. The CA ruled
thatunderArticle280oftheLaborCode,regardlessofthe
written and oral agreements between an employee and
her employer, an employee shall be deemed to
haveattained regular status when engaged to perform
activities which are necessary and desirable in the usual
tradeorbusinessoftheemployer.Evencasualemployees
shall be deemed regular employees if they had rendered
at least one year of service to the employer, whether
brokenorcontinuous.

Issue: Whether or not the respondent was still a

contractualemployeeofthepetitioner.

Held: No.The respondent is a regular employee.Philips

contends that the policy of hiring workers for a specific
andlimitedperiodonan"asneededbasis,"asadoptedby
thepetitioner,isnotnew;neitherisitprohibited.Infact,
according to the petitioner, the hiring of workers for a
specific and limited period is a valid exercise of
management prerogative. It does not necessarily follow
thatwherethedutiesoftheemployeeconsistofactivities
usually necessary or desirable in the usual course of
business of the employer, the parties are forbidden from
agreeingonaperiodoftimefortheperformanceofsuch
activities. Hence, there is nothing essentially
contradictorybetween a definite period of employment
andthenatureoftheemployeesduties.

Inrulingfortherespondent,theappellatecourt
appliedArticle280oftheLaborCode
ofthePhilippines,asamended,whichreads:
Art.280.RegularandCasualEmployment.Theprovisions
ofwrittenagreementtothecontrarynotwithstandingand
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
areusuallynecessaryordesirableintheusualbusinessor

tradeoftheemployer,exceptwheretheemploymenthas
been fixed for a specificproject or undertaking the
completionorterminationofwhichhasbeendetermined
atthetimeoftheengagementoftheemployeeorwhere
theworkorservicestobeperformedisseasonalinnature
andtheemploymentisforthedurationoftheseason.
Anemploymentshallbedeemedtobecasualif
it is not covered by the precedingparagraph; Provided,
That,anyemployeewhohasrenderedatleastoneyearof
service, whether such service is continuous or broken,
shallbeconsideredaregularemployeewithrespecttothe
activityinwhichheisemployedandhisemploymentshall
continuewhilesuchactivityexists.

It is apparent from the factual circumstances of

thiscasethattheperiodofemploymenthasbeenimposed
to preclude acquisition of tenurial security by
petitioner.Thefactthatthepetitionerhadrenderedmore
than one year of service at the time of his dismissal only
shows that she is performing an activity which is usually
necessary and desirable in private respondents business
or trade. The work of petitioner is hardly "specific" or
"seasonal." The petitioner is, therefore, a regular
employee of private respondent, the provisions of their
contract of employment notwithstanding. The private
respondents prepared employment contracts placed
petitioner at the mercy of those who crafted the said
contract.

Article 280 of the Labor Code of the Philippines

was emplaced in our statute books toprevent the
circumvention by unscrupulous employers of the
employees 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
manifeststheintenttoprotectthetenurialinterestofthe
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
aslongasitisconvenienttoit.

Thetwokindsofregularemployeesunderthelaware(1)
thoseengagedtoperformactivitieswhicharenecessaryor
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,
withrespecttotheactivitiesinwhichtheyareemployed.
Theprimarystandardtodeterminearegularemployment
is the reasonable connection between the particular
activity performed by the employee in relation to the
businessortradeoftheemployer.Thetestiswhetherthe
former is usually necessary or desirable in the usual
business or trade of the employer. If the employee has
beenperformingthejobforatleastoneyear,evenifthe
performanceisnotcontinuousormerelyintermittent,the
law deems the repeated and continuing need for its
performanceassufficientevidenceofthenecessity,ifnot
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
hecanacquirearegularemployeestatus.

In this case, the respondent was employed by the

petitioneronMay8,1992asproductionoperator.Shewas
assignedtowirebuildingatthetransistordivision.Thereis
nodisputethattheworkoftherespondentwasnecessary
or desirable in the business or trade of the petitioner.24
Sheremainedundertheemployofthepetitionerwithout
anyinterruptionsinceMay8,1992toJune4,1993orfor
one (1) year and twentyeight (28) days. The original
contract of employment had been extended or renewed
forfourtimes,tothesameposition,withthesamechores.
Suchacontinuingneedfortheservicesoftherespondent
issufficientevidenceofthenecessityandindispensability
ofherservicestothepetitionersbusiness.Byoperationof
law,then,therespondenthadattainedtheregularstatus
ofheremploymentwiththepetitioner,andisthusentitled
tosecurityoftenure.

5
Magsalin & CocaCola Bottlers Phils. Inc. v. National
OrganizationofWorkingMenet.al
G.R.No.148492May9,2003
Vitug,J:

FACTS:
CocaCola Bottlers Phils., Inc. engaged the services of
respondent workers as "sales route helpers"for a limited
period of five months. After five months, respondent
workerswereemployedbyCocaColaBottlersonadayto
day basis. According to CocaCola Bottlers, respondent
workers were hired to substitute for regular sales route
helperswheneverthelatterwouldbeunavailableorwhen
there would be an unexpected shortage of manpower in
anyofitsworkplacesoranunusuallyhighvolumeofwork.
The practice was for the workers to wait every morning
outsidethegatesofthesalesofficeofCocaColaBottlers.
Ifthushired,theworkerswouldthenbepaidtheirwages
attheendoftheday.
Ultimately,respondentworkersaskedCocaColatoextend
to them regular appointments. Petitioner company
refused.The23ofthe"temporary"workersfiledwiththe
NLRC a complaint for the regularization of their
employmentwithCocaCola.

ISSUE:
whether or not the nature of work of respondents in the
companyisofsuchnatureastobedeemednecessaryand
desirable in theusual business or trade of petitioner that
couldqualifythemtoberegularemployees.

HELD:
YES.ThebasiclawonthecaseisArticle280oftheLabor
Code.
The standard, supplied by the law itself, is whether the
work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be
assessed by looking into the nature of the services
rendered and its relation to the general scheme under
whichthebusinessortradeispursuedintheusualcourse.
It is distinguished from a specific undertaking that is
divorcedfromthenormalactivitiesrequiredincarryingon
theparticularbusinessortrade.

But, although the work to be performed is only for a

specificprojectorseasonal,whereapersonthusengaged
hasbeenperformingthejobforatleastoneyear,evenif
the performance is not continuous or is merely
intermittent, the law deems the repeated and continuing
needforitsperformanceasbeingsufficienttoindicatethe
necessityordesirabilityofthat activity tothebusinessor

tradeoftheemployer.Theemploymentofsuchpersonis
also then deemed to be regular with respect to such
activityandwhilesuchactivityexists.

Thenatureoftheworkperformedmustbeviewedfroma
perspectiveofthebusinessortradeinitsentiretyandnot
onaconfinedscope.

The repeated rehiring of respondent workers and the

continuing need for their services clearly attest to the
necessity or desirability of their services in the regular
conduct of the business or trade of petitioner company.
The Court of Appeals has found each of respondents to
haveworkedforatleastoneyearwithCocaCola.
The fact that respondent workers have agreed to be
employedonsuchbasisandtoforegotheprotectiongiven
tothemontheirsecurityoftenure,demonstratenothing
more than the serious problem of impoverishment of so
manyofourpeopleandtheresultingunevennessbetween
labor and capital. A contract ofemployment is impressed
withpublicinterest.

6
Hacienda Fatima v. National Federation of Sugarcane
WorkersFoodandGeneralTrade
G.R.No.149440January28,2003
Panganiban,J:

FACTS:
It appeared that respondents did not look with favor
workers' having organized themselves into a union. Thus,
when complainant union was certified as the collective
bargaining representative in the certification elections,
respondents refused to sit down with the union for the
purpose of entering into a collective bargaining
agreement.Moreover,theworkersincludingcomplainants
herein
werenotgivenworkformorethanonemonth.Inprotest,
complainants staged a strike which was however settled
uponthesigningofaMemorandumofAgreement.
"However,allegingthatcomplainantsfailedtoloadthe15
wagons, respondents reneged on its commitment to sit
down and bargain collectively. Instead, respondent
employed all means including the use of private armed

guards to prevent the organizers from entering the

premises.
Respondents did not any more give work assignments to
the complainants forcing the union to stage a strike. But
due to the conciliation efforts by the DOLE, another
Memorandum of Agreement was signed by the
complainantsandrespondents.
When respondents again reneged on its commitment;
complainantsfiledthepresentcomplaint.
But for all their persistence, complainants were being
accusedof'refusingtoworkandbeingchoosyinthekind
ofworktheyhavetoperform.

ISSUE:
Whether or not respondents , admittedly seasonal
workers,wereregularemployees

HELD:
YES. Article 280 of the Labor Code provides that an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which
areusuallynecessaryordesirableintheusualbusinessor
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 engagementof the employee or where
theworkorservicestobeperformedisseasonalinnature
andtheemploymentisforthedurationoftheseason.

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.Theevidenceprovestheexistenceofthefirst,but
notofthesecond,condition.Thefactthatrespondents
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
generalruleofregularemploymentisapplicable.

Douglas Millares and Rogelio Lagda vs.National Labor

Relations Commission, TransGlobal Maritime Agency,
Inc.andEssoInternationalShippingCo.,Ltd.
G.R.No.110524,July29,2002
Kapunan,J.:

FACTS:
Petitioners Millares and Lagda were employed by private
respondentESSOthroughitslocalmanningagencyTrans
Global as a machinist and wiper/oiler, respectively.In
1975, Millares was promoted as Chief Engineer while
LagdawaspromotedasChiefEngineerin1980.

OnJune13,1989,petitionerMillaresappliedforaleaveof
absence as well as petitioner Lagda May 16, 1989 which
respondent TransGlobals President, Michael J. Estaniel,
approved.Petitionersappliedforoptionalretirementplan
which were denied on the following grounds, to wit: (1)
employed on a contractual basis; (2) contract of
enlistment(COE)didnotprovideforretirementbeforethe
age of sixty (60) years; and (3) did not comply with the
requirement for claiming benefits under the CEIP, i.e., to
submit a written advice to the company of intention to
terminate employment within thirty (30) days from last
disembarkationdate.

Millares and Lagda both requested for an extension of

theirleave.OnlythatofLagdawasapproved.MIllareswas
advised, in view of his absence without leave which is
equivalent to abandonment, that he had been dropped
fromtherosterofcrewmemberswhileLagdawasadvised
that in view of his unavailability for contractual sea
service, he had been droppedas well. Petitioners filed a
complaintaffidavit for illegal dismissal and nonpayment
ofemployeebenefits.POEAdismissthecomplaintforlack
ofmerit.OnappealtotheNLRC,thedecisionwasaffirmed

ISSUE:
WONthepetitionersarecontractualemployees

HELD:
Yes. It is clear that seafarers are considered contractual
employees.They cannot be considered as regular
employees under Article 280 of the Labor Code.Their
employment is governed by the contracts they sign
everytime they are rehired and their employment is

terminatedwhenthecontractexpires.Theiremployment
iscontractuallyfixedforacertainperiodoftime.Theyfall
undertheexceptionofArticle280whoseemploymenthas
been fixed for a specific project or undertaking the
completionorterminationofwhichhasbeendetermined
atthetimeofengagementoftheemployeeorwherethe
workorservicestobeperformedisseasonalinnatureand
]
the employment is for the duration of the season. We
need not depart from the rulings of the Court in the two
aforementioned cases which indeed constitutestare
decisiswithrespecttotheemploymentstatusofseafarers.
Petitioners employment have automatically ceased upon
theexpirationoftheircontractsofenlistment(COE).Since
there was no dismissal to speak of, it follows that
petitioners are not entitled to reinstatement or payment
ofseparationpayorbackwages,asprovidedbylaw.

8
PetroleumShippingLimited(FormerlyEssoInternational
Shipping(Bahamas)Co.,Ltd.)andTransGlobalMaritime
Agency, Inc.,vs. National Labor Relations Commission
AndFlorelloW.Tanchico
G.R.No.148130,June16,2006
Carpio,J.:

FACTS:
On6March1978,EssothroughTransGlobalhiredFlorello
W. Tanchico ("Tanchico") as First Assistant Engineer. In
1981,hebecameChiefEngineer.On13October1992,he
returnedtothePhilippinesforatwomonthvacationafter
completinghiseightmonthdeployment.

On8December1992,heunderwenttherequiredstandard
medical examination prior to boarding the vessel. The
medical examination revealed that he was suffering from
"Ischemic Heart Disease, Hypertensive CardioMuscular
Disease and Diabetes Mellitus." He medications for two
months and a subsequent stress test showed a negative
result. However, Esso no longer deployed him. Instead,
Esso offered to pay him benefits under the Career
EmploymentIncentivePlanwhichwasaccepted.

On26April1993,TanchicofiledacomplaintagainstEsso,
TransGlobalandMalayanbeforePOEAforillegaldismissal
with claims for backwages, separation pay, disability and

medical benefits and 13th month pay. In view of the

enactmentofRA8042transferringtoNLRCthejurisdiction
over money claims of overseas workers, the case was
indorsed to the Arbitration Branch of the NCR. Labor
ArbiterDeVeradismissedthecomplaintforlackofmerit.
TanchicoappealedtotheNLRC.

NLRCaffirmedtheDecisionofLaborArbiter;onMR,NLRC
reconsidered
CA affirmed NLRCs 2nd resolution in toto; ruled that
Tanchico was a regular employee of Petroleum Shipping;
on MR, it modified its Decision by deducting Tanchicos
vacationfromhislengthofservice.

ISSUE/S:
1. WONTanchicoisaregularemployee
2. WON Tanchico is entitled is entitled to 13th month
pay,disabilitybenefitsandattorneysfees

HELD:
1. No.InRavagov.EssoEasternMarine,Ltd.,theCourt
traced its ruling in a number of cases that seafarers
are contractual, not regular, employees. Filipino
seamenaregovernedbytheRulesandRegulationsof
the POEA. The Standard Employment Contract
governing the employment of All Filipino Seamen on
Board OceanGoing Vessels of the POEA, particularly
inPartI,Sec.Cspecificallyprovidesthatthecontract
ofseamenshallbeforafixedperiod.Andinnocase
should the contract of seamen be longer than 12
months. The Court squarely passed upon the issue
inMillares v. NLRC17where one of the issues raised
was whether seafarers are regular or contractual
employees whose employment are terminated
everytimetheircontractsofemploymentexpire.
2. No. As a Filipino seaman, petitioner is governed by
the Rules and Regulations Governing Overseas
Employment. In the absence of any provision in his
Contract governing the payment of 13th month pay,
Tanchicoisnotentitledtothebenefit.Thematteron
disability benefits has been remanded to the Labor
Arbiterforresolution.
9
SkippersUnitedPacificInc.v.NLRC
G.R.No.148893July12,2006
6

Facts:

priortotheemployeesdismissal,whichisprocedural.The

onlytoerrorsoflaw.TheLaborArbiterandtheNLRChave

only evidence relied upon by petitioner in justifying

already determined the factual issues, and these were

a Third Engineer with Nicolakis Shipping, S.A., through its

respondents

affirmedbytheCA,thustheyareaccordednotonlygreat

recruitment and manning agency, herein petitioner

Reportspecifying the causes of respondents dismissal,

respectbutalsofinality.

SkippersUnitedPacific,Inc.Thetermofthecontractwas

which were supposedly respondents lack of discipline,

foroneyearwithamonthlysalaryofUS$800,butbarelya

irresponsibility and lack of diligence. The question that

process, petitioner contents that the ships Master is

monthafterboarding,respondentwasverballyorderedto

arises, therefore, is whether the Report constitutes

allowed to dismiss an erring seafarer without hearing

disembark the vessel and repatriated to the Philippines

substantial evidence proving that respondents dismissal

under Section 17, paragraph D of POEA Standard

withoutbeingtoldofthe reasonswhy.Immediatelyafter

was for a cause. Substantial evidence is defined as the

Employment Conditions Governing the Employment of

arriving in the country, respondent filed a complaint for

amount of relevant evidence which a reasonable mind

FilipinoSeafarersonBoardOceanGoingVessels:

illegaldismissalandmonetaryclaims.

mightacceptasadequatetojustifyaconclusion.Thecourt

Section17.DISCIPLINARYPROCEDURES

LaborArbiterfoundthatrespondentwasillegally

findsnoreasontoreversethefindingsoftheCA,NLRCand

XXX

dismissed and ordered the petitioner to pay respondent

the Labor Arbiter that the report is utterly bereft of

D.Dismissalforjustcausemaybeeffectedbythe

US$2, 400 or its peso equivalent of P100, 000 as

probative value, since it is not verified by an oath and

Master without furnishing the seafarer with a

separation pay plus the amount of US$186.69

therefore,lacksanyguaranteeoftrustworthiness.Itisalso

notice of dismissal if doing so will prejudice the

representingrespondentsunpaidsalaryforsevendaysor

crucial that it did not came from the personal knowledge

safetyofthecreworthevessel.Thisinformation

its peso equivalent of P7, 840.98 with attorneys fees of

oftheChiefEngineer,ratheritisbasedontheperception

shall be entered in the ships logbook. The

P5,000.

of the attending supt. engineers whoallegedly noticed

Master shall send a complete report to the

On appeal, NLRC affirmed Labor Arbiters

respondent as being slack and not caring of his job and

manning agency substantiated by witnesses,

decision and denied the motion of reconsideration. CA

duties. Accordingly, the report is plain hearsay since it is

testimoniesandanyotherdocumentsinsupport

also affirmed the decision and denied the motion of

not backed up by affidavit of any of the said supt.

thereof.

reconsideration,hencethiscase.

engineers. Lastly, the fact that the Report was

The provision, however, is not applicable in this case. As

Issue: Whether or not (1) the CA erred in ruling that

accomplished more than a month after respondent was

Skippers Pacific, Inc. v. Mira has stated, it is only in the

petitionerillegallydismissedprivaterespondentand(2)in

repatriatedmakesitappearthatitwasonlymadetomake

exceptionalcaseofclearandexistingdangertothesafety

awarding private respondent backwagesequivalent to his

it seem that there were valid reasons for respondents

of the crew or vessel that the required notices are

threemonthssalary.

dismissal. Simply put, the Report cannot be given any

dispensed with; but just the same, a complete report

Held:

weightorcredibilitybecauseitisuncorroborated,based

should be sent to the manning agency, supported by

purelyonhearsay,andobviouslymerelyanafterthought.

substantialevidenceofthefindings.Therewasnothingon

dismissal in labor cases are as follows: (1) dismissal must

But to begin with, the question of whether

record that shows that furnishing respondent with a

be for a cause provided for in the Labor Code, which is

respondent was dismissed for just cause is a question of

noticeofdismissalwillposeaclearandpresentdangerto

substantive;and(2)theobservanceofnoticeandhearing

fact,while the Supreme Courts judicial review is confined

the vessel and the crew, and even if the Master was

Respondent GervacioRosaroso was signed up as

(1) No. The twofold requirements for a valid

dismissal

is

the

Chief

Engineers

Regarding the requisites of procedural due

justified in dispensing with the required notice, still it

Labor Arbiter may have mislabeled it as separation pay,

inclusive of overtime pay. Respondent appealed to NLRC,

was essential that a complete report, substantiated by

nonetheless, the award was made in conformity with

arguing that Labor Arbiter erred in giving of only such

witnesses, testimonies and any other documents in

law.

amount.NLRCawardedthesameamountofthreemonths
The only modification made bythe court to the

basicsalarytorespondent,butexclusiveofovertimepay.

(2)No.Petitionerarguesthatthereisnobasisin

decisionoftheLaborArbiteristodisregardthegivenpeso

Respondent again appealed to CA. CA awarded full

awardingbackwagesequivalenttothreemonthssalaryin

equivalent as being contrary to law as R.A. No. 8183

backwages to respondent computed from the time of

favorofrespondent.Aseafarerisnotaregularemployee

providesthatthepesoequivalentofthemonetaryaward

dismissaluptofinalityofthedecision.TheCAusedArticle

asdefinedinArticle280oftheLaborCodeandthusisnot

should be computed at the peso to dollar exchange rate

279oftheLaborCode,insteadofSection10ofR.A.8042

entitled to full backwages and separation pay in lieu of

prevailingatthetimeofthepayment.

(Migrant Workers and Overseas Filipinos Act of 1995),

reinstatement. However, Section 10 of R.A. 8042 or the

arguingthatinapplyingthefirstcontract,thelatterlawis

supportthereof,wassenttothemanningagency.

MigrantWorkersandOverseasFilipinosActof1995,which
isoneofthelawsthatgoverntherightsandobligationsof
seafarers,providesfortheawardofmoneyclaimsincases
ofillegaldismissals:

Section10.MoneyClaims.xxx
xxx
In case of termination of overseas employment
withoutjust,validorauthorizedcauseasdefined
bylaworcontract,theworkershallbeentitledto
thefullreimbursementofhisplacementfeewith
interestattwelvepercent(12%)perannum,plus
his salaries for the unexpired portion of his
employmentcontractorforthree(3)monthsfor
every year of the unexpired term, whichever is
less.
xxx
The award of salaries for the unexpired portion

of his employment contract or for three (3) months for

everyyearoftheunexpiredterm,whicheverisless,isnot
an award of backwages or separation pay, but a form of
indemnityfortheworkerwhowasillegallydismissed.The

not applicable since there is no basis by which to

10
PentagonInternationalShippingInc.v.Adelantar
G.R.No.157373July27,2004

determinethenumberofyearswithinwhichthegrantof
salarieswillbebased:
Incaseofterminationofoverseasemployment

Facts:

without just, valid or authorized cause as

Respondent was hired by Dubai Ports

definedbylaworcontract,theworkershallbe

AuthorityofJebelAliunderanemploymentcontract(first

entitled to the full reimbursement of his

contract) which provided for an unlimited period of

placement fee with interest at twelve percent

employment. Afterwards, respondent and petitioner, for

(12%) per annum,plus his salaries for the

andinbehalfofDubaiPortsAuthorityofJebelAli,entered

unexpired portion of his employment contract

into a POEA standard employment contract (second

or for three (3) months for every year of the

contract), this time providing for a 12month period.

unexpiredterm,whicheverisless.

Several months later, respondent received a letter from

his employer, stating that he was being terminated for
assaulting his superior officer, but he was promised
employmentinanothercompany.However,afteralmosta
year of waiting with no work forthcoming, respondent
filedacomplaintforillegaldismissal.

LaborArbiterfoundthatdismissalwas

illegal and ordered petitioner to pay respondent amount

representing the latters three months basic salary

Issue:WhetherornottheCourtofAppealserredinusing
as basis Article 279 of the Labor Code in its award for
backwagestorespondent.
Held:

Yes. Filipino seamen are governed by

the Rules and Regulations of the POEA. The Standard

Employment Contract governing the Employment of All
Filipino Seamen on Board OceanGoing Vessels of the
POEA,particularlyinPartI,Sec.Cspecificallyprovidesthat
8

the contract of seamen shall be for a fixed period. In no

case should the contract of seamen be longer than 12
months.TheCourtofAppealserredwhenitadjudgedthe
firstcontractasthebasisforpetitionersliabilityinsteadof
the second contract, which is in conformity with the
POEAs Standard Employment Contract. Moreover, in
Millaresv.NLRC,itwasclearthatseafarersareconsidered
contractual employees whose rights and obligations are
governedprimarilybyRulesandRegulationsofPOEAand
more importantly, by R.A. 8042 and not by Article 279 of
theLaborCode,whichappliestoregularemployees.

11.AUDIONELECTRICCOINCVNLRC(MADOLID)
June17,1999

FACTS:

MadolidwasemployedbyAudionElectricCo.on
June 30, 1976 as fabricator and continuously
rendered service in differento f f i c e s a n d
projects as helper technician, stockman,
and timekeeper. He rendered 13 years of
s e r v i c e w i t h a c l e a n record. On August 3,
Madolid received a letter informing himthat he
will be considered terminated after the turnover
ofmaterials, including companys tools and equipments
not later than August 15, 1989. Madolid claims that he
wasdismissedwithoutjustifiablecauseand due process
and that his dismissal was done in bad faithwhich
renders the dismissal illegal. For this reason, he claims
that he is entitled to reinstatement with full
backwages,and moralandexemplarydamages.Healso
includes payment of his o v e r t i m e p a y , p r o j e c t
allowance,
minimum
wage
i n c r e a s e adjustment, proportionate 13th month pay
andattorney'sfees.Audion rebuts his allegations by
saying that the employment contract of Madolid
was one that was coterminus with

thep r o j e c t , t h u s h e s h o u l d n o t b e
c o n s i d e r e d a s a r e g u l a r employee. Also, the
company contends that it had paid all the alleged unpaid
wages. T h e L a b o r a r b i t e r d e c i d e d t h e c a s e i n
favor of Madolid,o r d e r i n g A u d i o n t o
pay
him
backwages,
OT
pay,
p r o j e c t allowances, minimum wage increase
adjustment, 13th month pay, a n d a w a r d i n g
him moral and exemplary damages
a n d attorneysfees.AppealtoNLRCwasdismissed.

ISSUES:
1. Was Madolid a regular employee, thus entitling
himtobackwages,etc?
2. Was Audion denied due process with the
awardofalltheclaimsofMadolid?

HELD:
1.YES.

Where the employment of

p r o j e c t e m p l o y e e s i s extended long after the
supposed project has been finished, theemployees are
removed from the scope of project employeesand
consideredregularemployees.

Reasoning
(citing NLRCs decision): Audions assigning
Madolid to itsvarious projects did not make him a
projectworker.AsfoundbytheLaborArbiter,itappears
that complainant was employedb y r e s p o n d e n t x x x
as fabricator and or projects as
h e l p e r electrician, stockman and timekeeper.' Simply
put, complainant was a regular nonproject worker.
Madolids employment status was
established
by
t h e Certification
of
Employment dated April 10, 1989 issued
byAudion
which
certified
that
private
respondent is a bonafide employee from June
30, 1976 up to the time of issuance on April 10,
1989. This showed that his exposure to their
field
ofo p e r a t i o n
w a s
a s
f a b r i c a t o r ,
h e l p e r / e l e c t r i c i a n , stockman/tim
ekeeper. This proves that he was regularly
andcontinuously employed by Audion in various
jobassignmentsfrom1976to1989,foratotalof

13 years. The alleged gap in employment service

does not defeat his regular status as he was
rehired for many more projects without
interruption and p e r f o r m e d f u n c t i o n s
which
are
vital,
necessary
a n d indispensable to the usual business of petitioner.
Audion could have presented substantial evidence to
support i t s c l a i m t h a t M a d o l i d w a s
a
project
worker,
like
t h e employment contract (which stated the
employees nature ofemployment) or reports of
termination (which were required byDOLE upon
terminationoftheproject,andfailuretosubmitthisis an
indication of regular status of an employee as
heldincases),butitdidnot.

2.NO

Due process is not denied when one is

affordedtheopportunity to beheardand present
his case, but the samedecided not to take the
opportunity.

Madolid clearly specified in his affidavit the

specific dates inwhich he was not paid overtime
pay, project allowances, 13th month pay, and wage
adjustments. The claim of Audion that itpaid him such
mustbeprovedbyevidence,whichitdidnotdo(despiteof
having the burden to prove the claim). I n f a c t ,
records show that the company did not
a p p e a r i n hearings,whichthecourttooktobeawaiver
of its right to beheard. H o w e v e r , a w a r d t o
m o r a l a n d e x e m p l a r y d a m a g e s a n d attorneys
feesaredeletedforbeingdevoidofmoralbasis.

12

BETAELECTRICvs.NLRCG.R.No.86408February15,1990

FACTS:
Thepetitionerhiredtheprivaterespondentasclerktypist
IIIeffectiveDecember15,1986untilJanuary16,1987and
gave her several extensions numbering about 5. Her
appointments were coveredby corresponding written
9

10

contracts.OnJune22,1987,herserviceswereterminated
without notice orinvestigation. As a result, she filed a
complaintfor illegaldismissal.Asthecourthasindicated,
both thelabor arbiter and the respondent National Labor
Relations
Commission
ruled
for
her.
The
petitionerquestions the decision of the National Labor
Relations Commission affirming the judgment of the
laborarbiter reinstating the private respondent with
backwages.PETITIONERS ARGUMENT: the private
respondent's appointment was temporary and hence she
maybeterminatedatwill;Thatshehadbeenhiredmerely
on a "temporary basis" "for purposes of meeting
theseasonal or peak demands of the business," and as
such, her services may lawfully be terminated "afterthe
accomplishmentof[her]task"

ISSUE:
Whetherornotshewasillegallyterminated

HELD:
NO. Petitioners contention is untenable.The private
respondent was to all intents and purposes, and at the
very least, a probationary employee,who became regular
upontheexpirationofsixmonths.UnderArticle281ofthe
Labor Code, aprobationary employee is "considered a
regular employee" if he has been "allowed to work after
[the]probationary period." The fact that her employment
has been a contracttocontract basis can not alter
thecharacter of employment, because contracts can not
overridethemandateoflaw.Hence,byoperationoflaw,
shehasbecomearegularemployee.Inthecaseatbar,the
privateemployeewasemployedfromDecember15,1986
until June 22, 1987when she was ordered laid off. Her
tenure having exceeded six months, she attained
regularemployment.The petitioner can not rightfully say
that since the private respondent's employment hinged
fromcontracttocontract,itwas
ergo, "temporary", depending on the term of each
agreement. Under the Labor Code,an employment may
onlybesaidtobe"temporary""where[it]hasbeenfixed
foraspecificundertakingthecompletionofortermination
of which has been determined at the time of the
engagement of theemployee or where the work or
services to be performed is seasonal in nature and the
employment is forthe duration of the season." Quite to
the contrary, the private respondent's work, that of

"typistclerk"isfarfrombeing"specific"or"seasonal",but
rather,one,accordingtotheCode,"wheretheemployee
hasbeen engaged to perform activities which are usually
necessary or desirable in the usual business." Andunder
the Code, where one performs such activities, he is a
regular employee, "[t]he provisions of writtenagreement
to the contrary notwithstandingThe petitioner can not
insist that the private respondent had been hired "for a
specific undertaking i.e. tohandle the backlogs brought
aboutbytheseasonalincreaseinthevolumeofherwork."
The fact that shehad been employed purportedly for the
simple purpose of unclogging the petitioner's files does
not makesuch an undertaking "specific" from the
standpoint of law because in the first place, it is
"usuallynecessary or desirable in the usual business or
tradeoftheemployer,"adevelopmentwhichdisqualifiesit
outrightly as a "specific undertaking", and in the second
place, because a "specific undertaking" is meant, in its
ordinary acceptation, a special type of venture or project
whosedurationiscoterminouswiththecompletionofthe
project, e.g. , project work. It is not the case in the
proceedingatbar.

13
UniversalRobinaCorp.vs.Catapang
GRNo.164736

FACTS:

Petitioner Universal Robina Corp. owns and

operates a duck farm in Calauan, Laguna. Private
respondents Benito Catapang, Carlos Ararao, Alvin
Alcantara and 27 other employees were hired by the
companyonvariousdatesfromyears1991to1993.Afive
month employment contract was entered into by the
parties but after each contract expires, the company
continues to rehire them with the same contract
conditions until 1996. After which, no renewal of
employment contracts were done, prompting herein
respondentstofileacaseagainstthepetitionerforillegal
dismissal. Petitioners aver that the respondents are not
regular employees but were only covered by the five
monthindividualcontractstowhichtheydulyacquiesced.

TheLaborArbiterruledinfavorofrespondents,
orderingpetitionertoreinstateandpaybackwagestothe
petitioners. The petitioners manifested to the Labor
Arbiter that they can reinstate only 17 of the 30
employees in view of the phase out of the petitioner
companys Agricultural Section as early as 1996. Labor
Arbiter issued an Alias Writ of Execution for the
reinstatement of the other 13 employees. Respondent
filed an appeal to the NLRC and later on to the Court of
Appeals,whichbothtribunalsdenied.

ISSUE:
Whether or not respondents are regular
employees.

HELD:
Yes, herein respondents are regular employees.
Theprimarystandardofdeterminingregularemployment
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
whethertheformerisusuallynecessaryordesirableinthe
usual business or trade of the employer. The connection
can be determined by considering the nature of work
performedanditsrelationtotheschemeoftheparticular
businessortradeinitsentirety.Also,iftheemployeehas
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
performanceassufficientevidenceofthenecessityifnot
indispensabilityofthatactivitytothebusiness.Hence,the
employment is considered regular, but only with respect
tosuchactivityandwhilesuchactivityexists.

Inthecaseatbar,petitionersactofrepeatedly
andcontinuouslyhiringprivaterespondentsinaspanof3
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. As stated earlier,
repeated and continuing need for the employees
performanceisasufficientevidenceofthenecessityifnot
indispensability of that activity to the business. Petition
denied.

14
10

11

Maraguinotvs.NLRC
G.R.No.120969

FACTS:
Petitioners Alejandro Maraguinot and Paulino Eneros
tasksconsistedofloading,unloadingandarrangingmovie
equipment in the shooting area as instructed by the
cameraman, returning the equipment to Viva Films
warehouse,assistinginthefixingofthelightingsystem,
and performing other tasks that the cameraman and/or
director may assign. When they asked the company to
adjusttheirsalariesinaccordancewiththeminimumwage
law, they were allegedly ordered by Mr. Vic del Rosario
(producer) to sign a blank employment contract as a
condition to their wage increase. The company dismissed
them from their employment when they refused to sign
such blank contract. The two filed a case against VIVA
Filmsforillegaldismissal.

Private respondent assert that they contract persons

called producers (also referred to as associate
producers) to produce or make movies for private
respondents; and contend that petitioners are project
employeesoftheassociateproducerswho,inturn,actas
independent contractors. As such, there is no employer
employee relationship between petitioners and private
respondents.

The Labor Arbiter held in favor of petitioners on the

ground that VIVA Films cannot invoke that it was the
producers who are the real employers. But, the NLRC
reversed the Labor Arbiters decision holding that
petitioners were project employees and not regular
employees. They were called for a specific movie project
with the completion of which are predetermined known
tothepetitionersatthetimeoftheirengagement.Despite
theirregularworkinghours,petitionerswerepaidregular
and fixed rates. They are also not prohibited to work for
Regal,SeikoorFPJProductionswhentheyservicesarenot
required.Petitionersfiledtheirmotionforreconsideration
buttheNLRCdeniedit.Hence,thispetition.

ISSUE: Whether or not herein petitioners are project

employeeemployedforaspecificmovie.

HELD: No, the petitioners are regular employees of

private respondent and not mere project employees. The
respondentscontentionthatpetitionersareemployeesof
the producer has no merit because Mr. Del Rosario does
nothavetools,equipment,machinery,workpremises,and
othermaterialsnecessarytomakemotionpictures.Those
equipments that were used in the movie project were
ownedbyrespondentcompany.

Aprojectemployeeoramemberofaworkpool
may acquire the status of a regular employee when the
followingconcur:
1) There is a continuous rehiring of project employees
evenaftercessationofaproject;and
2)Thetasksperformedbytheallegedprojectemployee
are vital, necessary and indispensable to the usual
businessortradeoftheemployer.

Both conditions are present in the case at bar.

There was a continuous rehiring of the petitioners.
PetitionerEnerowasemployedforatotaloftwo(2)years
and engaged in at least eighteen (18) projects, while
petitioner Maraguinot was employed for some three (3)
years and worked on at least twentythree (23) projects.
Moreover,thetasksperformedbypetitionersaredeemed
vital,necessaryandindispensabletotheusualbusinessof
therespondentincreatingamovie.

Petitioners being regular employees, the Court

held that there was an illegal dismissal. Their
reinstatement to work and the payment of their
backwagesareordered.Petitiongranted.

15
AbescoConstructionandDevelopmentCorpv.Ramirezet
al.

Doctrine:Thedurationoftheprojectemploymentaswell
astheparticularwarorservicetobeperformedshouldbe
defined in an employment agreement and must br made
cleartotheemployeesatthetimeofhiring.Failuretodo
sowouldmakethemregularemployees.

Facts:Abescoconstructionwasengagedinaconstruction

businesswhererespondentswerehiredondifferentdates
from 1976 to 1992 either as laborers, road roller
operators,paintersordrivers.
In 1997, respondents filed two separate complaints1 for
illegal dismissal against the company and its General
Manager, Oscar Banzon, before the Labor Arbiter (LA).
Petitioners allegedly dismissed them without a valid
reason and without due process of law. The complaints
also included claims for nonpayment of the 13th month
pay, five days' service incentive leave pay, premium pay
for holidays and rest days, and moral and exemplary
damages.TheLAlateronorderedtheconsolidationofthe
twocomplaints.
Petitioners denied liability to respondents and countered
that respondents were "project employees" since their
services were necessary only when the company had
projectstobecompleted.
Petitioners argued that, being project employees,
respondents' employment was coterminous with the
project to which they were assigned. They were not
regular employees who enjoyed security of tenure and
entitlement to separation pay upon termination from
work.
Issue:(1)whetherrespondentswereprojectemployeesor
regularemployees
(2)whetherrespondentswereillegallydismissed.
Held:
1. we rule that respondents were regular employees.
However,wetakeexceptiontothereasonscitedbytheLA
(whichboththeNLRCandtheCAaffirmed)inconsidering
respondents as regular employees and not as project
employees.
Contrary to the disquisitions of the LA, employees (like
respondents) who work under different project
employment contracts for several years do not
automaticallybecomeregularemployees;theycanremain
as project employees regardless of the number of years
11

12

theywork.7Lengthofserviceisnotacontrollingfactorin
determiningthenatureofone'semployment.8
Moreover,employeeswhoaremembersofa"workpool"
fromwhichacompany(likepetitionercorporation)draws
workers for deployment to its different projects do not
become regular employees by reason of that fact alone.
9
The Court has enunciated in some cases that members
of a "work pool" can either be project employees or
regularemployees.
The principal test for determining whether employees are
"project employees" or "regular employees" is whether
they are assigned to carry out a specific project or
undertaking,thedurationandscopeofwhicharespecified
at the time they are engaged for that project.10 Such
duration, as well as the particular work/service to be
performed,isdefinedinanemploymentagreementandis
madecleartotheemployeesatthetimeofhiring.11
In this case, petitioners did not have that kind of
agreement with respondents. Neither did they inform
respondentsofthenatureofthelatter'sworkatthetime
of hiring. Hence, for failure of petitioners to substantiate
their claim that respondents were project employees, we
areconstrainedtodeclarethemasregularemployees.
2. we hold that petitioners failed to adhere to the "two
notice rule" which requires that workers to be dismissed
mustbefurnishedwith:(1)anoticeinformingthemofthe
particularactsforwhichtheyarebeingdismissedand(2)a
notice advising them of the decision to terminate the
employment.12 Respondents were never given such
notices.
16
ALUTUCPv.NLRC

Doctrine:thelengthofserviceofaprojectemployeeisnot
thecontrollingtestofemploymenttenurebutwhetheror
not"theemploymenthasbeenfixedforaspecificproject
orundertakingthecompletionorterminationofwhichhas
been determined at the time of the engagement of the

employee".

Facts:On5July1990,petitionersfiledseparatecomplaints
for unfair labor practice, regularization and monetary
benefits with the NLRC, SubRegional Arbitration Branch
XII,IliganCity.
The complaints were consolidated and after hearing, the
Labor Arbiter in a Decision dated 7 June 1991, declared
petitioners"regularprojectemployeeswhoshallcontinue
their employment as such for as long as such [project]
activity exists," but entitled to the salary of a regular
employee pursuant to the provisions in the collective
bargaining agreement. It also ordered payment of salary
differentials.
TheNLRCinitsquestionedresolutionsmodifiedtheLabor
Arbiter's decision. It affirmed the Labor Arbiter's holding
that petitioners were project employees since they were
hiredtoperformworkinaspecificundertakingtheFive
YearsExpansionProgram(FAYEP),thecompletionofwhich
hadbeendeterminedatthetimeoftheirengagementand
whichoperationwasnotdirectlyrelatedtothebusinessof
steel manufacturing. The NLRC, however, set aside the
award to petitioners of the same benefits enjoyed by
regularemployeesforlackoflegalandfactualbasis.
ThepetitionerstheninvokeArticle280oftheLaborCode
arguing that they are regular employees because their
jobs are necessary, desirable and workrelated to NSC's
main business and also because they have rendered
serviceforsixyearsormoretoNSC.

Issue: Whether or not the petitioners were properly

characterizedasprojectemployeesratherthanregular
employeesofNationalSteelCorporation.

Held: Yes, the petitioners were properly characterized as

project employees. A project employee is assigned to
carry out a specific project or undertaking wherein the
durationandscopeofsuchisdeterminedatthetimethe
employee was engaged for that project. The project or
undertaking referred to above may or may not be within
the regular business of the corporation but it must be

identifiably separate and distinct from the ordinary or

regular business operations of the employer. The
particular component projects embraced in the FAYEP I
and II, wherein the petitioners were assigned, were
distinguishable from the regular or ordinary business of
NSC, there work was limited to one or another of the
specific component projects which made up the FAYEP I
and II. There was nothing in the record to show that the
petitioners were hired for, or in fact assigned to, other
purposes such as for operating or maintaining the old, or
previously installed and commissioned, steelmaking
machineryandequipment,orforsellingthefinishedsteel
products.Moreover,thepetitioners'claimthat shouldbe
qualified as regular employees because they have
renderedmorethatsixyearsofservicetoNSClackslegal
basis. The proviso in the second paragraph of Article 280
oftheLaborCodewhichstatesthatanemployeewhohas
served for at least one year shall be considered a regular
employee relates to casual employees and not to project
employees.
17

KIAMCOV.NLRC
309SCRA424
June29,1999
Bellosillo,J:
Facts:TheEnergyResearchandDevelopmentDivisionof
privaterespondentPhilippineNationalOilCompany
(PNOC)hiredpetitionerCisellKiamcoasaproject
employeeinitsGeothermalAgroIndustrialPlantProjectin
NegrosOriental.ItwasstipulatedintheContractof
EmploymentthatKiamcowasbeinghiredbythecompany
astechnicianforaperiodof5monthsoruptothe
completionoftheproject,whicheverwouldcomefirst.
Aftertheterminationofthecontract,asecondonewas
neteredintowhichcontainedbasicallythesameterms
andconditions.ThetermwasfromDecember1,1992until
April30,1992.Hewasthenagainhiredfor6monthsfrom
May1,1993toNovember30,1993.Later,foralleged
infractionscommittedbyKiamco,hewasgivena
Memorandumbytheadministrativedepartmentofthe
companydemandinghisexplanationformisconduct,
absencewithoutleave,noncomplianceofadministrative
reportingprocedureonaccidentsandunauthorizeduseof
companyvehicles.Hetriedtoexplainhissidebutthe
12

13

privaterespondentfoundhisexplanationtobe
unsatisfactory.HewasthengivenaMemorandumstating
thatheisbeingplacedunderpreventivesuspensionfrom
November1,1993toNovember30,1993pendingfurther
investigation.Therewasnoinvestigationconducted.
Privaterespondentscontendedthataninvestigationwas
notnecessarysinceKiamcohadceasedtobeanemployee
upontheexpirationofhisemploymentcontracton
November30,1993.OnDecember1ofthesameyear,he
reportedbacktoworkbutthesecurityguardsofthe
companypreventedhimfromenteringthepremises.
Later,PNOCreportedtotheDepartmentofLaborand
EmploymentthatKiamcowasterminatedonNovember1,
1993duetotheexpirationofhisemploymentcontract
andtheabolitionofhisposition.Kiamcofiledbeforethe
NLRCacomplaintforillegalsuspensionanddismissal
againstPNOC,prayingforreinstatementandthepayment
ofbackwages.TheLaborArbiterdismissedthecomplaint
forlackofmeritasthethreeemploymentcontractswere
freelyandvoluntarilysignedbyKiamcoandPNOC.Kiamco
appealedthedecisiontopublicrespondentNLRCwhich
reversedthedecisionoftheLaborArbiteranddeclared
Kiamcoasaregularemployeeoftherespondentsandthat
hehadbeenillegallydismissed.AMotionfor
Reconsiderationwasfiledbyprivaterespondents.The
NLRCmodifieditsdecisiondeclaringpetitionertobea
projectemployee,hencethispetitionforcertiorari.
Issues:1)WONpetitionerisaregularemployeeora
projectemployee.
2)WONpetitionerisentitledtoreinstatement
withoutlossofseniorityrightsandprivelegesandtothe
paymentoffullbackwages.
Held:1)KiamcowascorrectlylabeledbytheNLRCasa
projectemployee.IthasbeenheldinVioletav.NLRCthat
theprincipaltestfordeterminingwhethereparticular
employeesareproperlycharacterizedasproject
employees,asdistinguishedfromregularemployees,is
whetherornottheprojectemployeeswereassignedto
carryoutaspecificprojectorundertaking,theduration
(andscope)ofwhichwerespecifiedatthetimethe
employeeswereengagedforthatproject.Asdefined,
projectemployeesarethoseworkershired1)forspecific
projectorundertaking,and2)thecompletionor
terminationofsuchprojectorundertakinghasbeen
determinedatthetimeofengagementoftheemployee.
UnderPolicyInstructionNo.20oftheSecretaryofLabor,

projectemployeesarethoseemployedinconnectionwith
aparticularproject.Nonprojectorregularemployeesare
thoseemployedwithoutrefrerencetoanyparticular
project.Thethreecontractsofemploymententeredinto
byKiamcoclearlyestablishedthathewasaproject
employeebecausea)hewasspecificallyassignedtowork
foraparticularprojectwhichwastheGeothermalAgro
IndustrialDemonstrationPlantProjectofprivate
respondents,andb)theterminationandthecompletion
oftheprojectorundertakingwasdeterminedand
stipulatedinthecontractatthetimeofhisemployment.
2.Yes.InSantosv.NLRCitwasheldthatthenormal
consequencesofafindingthatanemployeehasbeen
illegallydismissedare,thattheemployeebecomes
entitledtoreinstatementtohisformerpositionwithout
lossofseniorityrightsandthepaymentofbackwages.
Reinstatementrestorestheemployeewhowasunjustly
dismissedtothepositionfromwhichhewasremoved,
thatis,tohisstatusquoantedismissal;whilethegrantof
backwagesallowsthesameemployeetorecoverfromthe
employerthatwhichhehadlostbywayofwagesasa
resultofhisdismissal.Theargumentofprivate
respondentsthatreinstatementandpaymentofback
wagescouldnotbemadesinceKiamcowasnotaregular
employeeisapparentlymisplaced.Asquotedabove,the
normalconsequencesofanillegaldismissalarethe
reinstatementoftheaggrievedemployeeandthegrantof
backwages.Thererightsofanemployeedonotdepend
onthestatusofhisemploymentpriortohisdismissalbut
rathertothelegalityandvalidityofhistermination.The
factthatanemployeeisnotaregularemployeedoesnot
meanthathecanbedismissedanytime,evenillegally,by
hisemployer.

18
PHIL.JAIALAIANDAMUSEMENTCORP.V.CLAVE
126SCRA299
December21,1993
MelencioHerrera
Facts:Petitionercorporationoperatingajaialaifronton
forsportandamusementhasitsownmaintenancegroup
fortheupkeepofitspremises.Ithiredprivaterespondents
Catadal,Jr.,aplumberandDelgra,amason,togetherwith
30otherworkersfortherenovationofitsmainbuilding
whichworkisnotincludedinmaintenance.Thecontractis
opentoextentionshouldtheneedforitariseinthecourse

oftherenovation.RenovationwascompletedbyOctober
1976sothemanagementthendecidedtoconstructan
annextothebuildingandprivaterespondentsworkedon
thefireescape.Later,inNovemberofthesameyear,
noticeofterminationwasgiventotherespondents
effectiveNovember219buttheystillcontinuedtowork
nonetheless.TheyworkeduntilDecember11andwere
fullypaidfortheworktheyrendereduptothatdate.
PetitionerthenfiledwiththeDepartmentofLabora
reportofterminationoftheservicesofprivate
respondentsand30others,listingthemascasual
emergencyworkers.Privateworkersallegedillegal
termination.AssistantMinisterLeogardoorderedthe
reinstatementoftheworkerswithfullbackwagesbefore
petitionercouldfileareplytothelettercomplaintofthe
respondents.Leogardosaidthattherespondentswere
alreadyregularemployeesaccordingtothenowArticle
281oftheLaborCodeandthatterminationwasunjust.
TheappealwiththePresidentialExecutiveAssistantwas
dismissed,hencethisrecourse.
Issue:WONprivaterespondentsareregularemployees
entitledtosecurityoftenure.
Held:No.Casualemployeesareengagtedforaspecific
projectorundertakingandfallwithintheexception
providedforinArticle281oftheLaborCode.Notbeing
regularemployees,itcannotbejustifiablysaidthat
petitionerhaddismissedthemwithoutjustcause.They
arenotentitledtoreinstatementwithfullbackwages.
Article281definesregularandcasualemployees.Inthe
caseathand,thecasualorlimitedcharacterofprivate
respondentsemployment,therefore,isevident.Private
respondentswerehiredforaspecificprojecttorenovate
themainbudding,wheremajorrepairssuchaspainting
themainbuilding,repairoftheroof,cleaningofclogged
waterpipesanddrains,andothernecessaryrepairswere
required.Itwasmadeknown,andsounderstoodatthe
startofthehiring,thattheirserviceswouldlastuntilthe
completionoftherenovation.Theyrenderedservicefrom
February2toDecember11,1976,almost11months,but
lessthanayea.Therecouldbenootherreason,however,
thanthattheterminationofprivaterespondentswas
becausetheirserviceswerenolongerneededandthey
hadnothingmoretodosincetheprojectforwhichthere
werehiredhadbeencompleted.
19
13

14

G.R.No.L65689May31,1985

ISSUE

SANDOVAL SHIPYARDS, INC., petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION, ROGELIO DIAMANTE,
MANUEL PACRES, ROLANDO CERVALES, DIONISIO
CERVALESandMACARIOSAPUTALO,respondents.

SandovalShipyards,Inc.hasbeenengagedinthebuilding
and repair of vessels. It contends that each vessel is a
separateprojectandthattheemploymentoftheworkers
isterminatedwiththecompletionofeachproject.

G.R.No.L66119May31,1985

The workers contend otherwise. They claim to be regular

workersandthattheterminationofoneprojectdoesnot
mean the end of their employment since they can be
assignedtounfinishedprojects.
RULING
Weholdthatprivaterespondentswereprojectemployees
whose work was coterminous with the project for which
theywerehired.Projectemployees,asdistinguishedfrom
regular or nonproject employees, are mentioned in
section 281 of the Labor Code as those "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."
Projectemployeesarethoseemployedinconnectionwith
a particular construction project. Nonproject (regular)
employeesarethoseemployedbyaconstructioncompany
withoutreferencetoanyparticularproject.

SANDOVAL SHIPYARDS, INC., petitioner, vs. VICENTE

LEOGARDO, JR., Deputy Minister of Labor and
Employment, DANILO DE LA CRUZ, RODRIGO VILLARUZ,
RODRIGO PEREZ, AQUILINO TABILON, ARMANDO
ESGLANDA, MANUEL MEDINA, FREDDIE ABADIEZ,
FELICIANO TOLANG, ALFREDO DE LA CRUZ, NICOLAS
MARIANO, VICENTE CEBUANO, ROLANDO ROLDAN,
TEODORO ROLDAN, SOLOMON GEMINO, MARIO
RICAFORT, ROLANDO LOPEZ and ANGEL SAMSON,
respondents.
FACTS
In G.R. No. 65689, Rogelio Diamante, Manuel Pacres,
MacarioSaputalo,RolandoCervalesandDionisioCervales
were assigned to the construction of the LCT Catarman,
ProjectNo.7511.Afterthreemonthsofwork,theproject
was completed on July 26, 1979. The five workers were
servedaterminationnotice.Theterminationwasreported
to the Ministry of Labor on August 3, 1979. They filed a
complaintforillegaldismissal.
InG.R.No.66119,respondentsDanilodelaCruz,etal.,17
in all, were assigned to work in Project No. 7901 for the
constructionofatankerorderedbyMobilOilPhilippines,
Inc.Therewere55workersinthatproject.Thetankerwas
launched on January 31, 1980. Upon the yard manager's
recommendation, the personnel manager of Sandoval
Shipyardsterminatedtheservicesofthewelders,helpers
and construction workers effective February 4, 1980. The
termination was duly reported to the Ministry of Labor
andEmployment.
Three days later, or on February 7, twentyseven out of
the 55 workers were hired for a new project. The 27
includedfourofthe17respondentswhofiledacomplaint
forillegaldismissalonFebruary6.

Project employees are not entitled to termination pay if

they are terminated as a result of the completion of the
projectoranyphasethereofinwhichtheyareemployed,
regardless of the number of projects in which they have
been employed by a particular construction company.
Moreover, the company is not required to obtain
clearance from the Secretary of Labor in connection with
suchtermination.
We feel that there is merit in the contention of the
applicant corporation. To our mind, the employment of
theemployeesconcernedwerefixedforaspecificproject
or undertaking. For the nature of the business the
corporationisengagedintoisonewhichwillnotallowitto
employworkersforanindefiniteperiod.
It is significant to note that the corporation does not
construct vessels for sale or otherwise which will demand
continuous productions of ships and will need permanent

or regular workers. It merely accepts contracts for ship

building or for repair of vessels from third parties and,
only,onoccasionwhenithasworkcontractofthisnature
thatithiresworkerstodothejobwhich,needlesstosay,
lastsonlyforlessthanaYearorlonger.
The completion of their work or project automatically
terminatestheiremployment,inwhichcase,theemployer
is, under the law, only obliged to render a report on the
terminationoftheemployment.
20
[G.R.No.114734.March31,2000]
VIVIAN Y. IMBUIDO,, Petitioner, v. NATIONAL LABOR
RELATIONS
COMMISSION,
INTERNATIONAL
INFORMATION SERVICES, INC. and GABRIEL LIBRANDO,
Respondents.
FACTS
Petitioner was employed as a data encoder by private
respondent International Information Services, Inc., from
August26,1988untilOctober18,1991,whenherservices
wereterminated.FromAugust26,1988untilOctober18,
1991, petitioner entered into thirteen (13) separate
employment contracts with private respondent, each
contract lasting only for a period of three (3) months.
Aside from the basic hourly rate, specific job contract
number and period of employment, each contract
containsthefollowingtermsandconditions:
"a.ThisContractisforaspecificproject/jobcontractonly
and shall be effective for the period covered as above
mentioned unless sooner terminated when the job
contract is completed earlier or withdrawn by client, or
when employee is dismissed for just and lawful causes
providedbylaw.Thehappeningofanyoftheseeventswill
automaticallyterminatethiscontractofemployment.
"b. Subject shall abide with the Companys rules and
regulations for its employees attached herein to form an
integralparthereof.
"c. The nature of your job may require you to render
overtimeworkwithpaysoasnottodisrupttheCompanys
14

15

commitmentofscheduleddeliverydatesmadeonsaidjob
contract."
In September 1991, petitioner and twelve (12) other
employees of private respondent allegedly agreed to the
filing of a petition for certification election involving the
rankandfile employees of private respondent. Thus, on
October 8, 1991, Lakas Manggagawa sa Pilipinas (LAKAS)
filedapetitionforcertificationelectionwiththeBureauof
LaborRelations(BLR),docketedasNCRODM9110128.
Subsequently, on October 18, 1991, petitioner received a
termination letter from Edna Kasilag, Administrative
Officer of private respondent, allegedly "due to low
volumeofwork."
On the other hand, private respondent, in its position
paper filed on July 16, 1992, maintained that it had valid
reasons to terminate petitioners employment and
disclaimedanyknowledgeoftheexistenceorformationof
a union among its rankandfile employees at the time
petitioners services were terminated. Private respondent
stressed that its business "relies heavily on companies
availing of its services. Its retention by client companies
withparticularemphasisondataencodingisonaproject
toprojectbasis,"usuallylastingforaperiodof"two(2)to
five (5) months." Private respondent further argued that
petitionersemploymentwasfora"specificprojectwitha
specified period of engagement." According to private
respondent, "the certainty of the expiration of
complainants engagement has been determined at the
time of their (sic) engagement (until 27 November 1991)
or when the project is earlier completed or when the
client withdraws," as provided in the contract. "The
happeningofthesecondevent[completionoftheproject]
has materialized, thus, her contract of employment is
deemedterminated.
ISSUE
Whether petitioner was a "regular employee," NOT a
"project employee" as found by public respondent NLRC
and whether the termination of petitioner was tainted
withunfairlaborpractice
RULING
WeagreewiththefindingsoftheNLRCthatpetitionerisa
project employee. The principal test for determining

whether an employee is a project employee or a regular

employee is whether the project employee was assigned
tocarryoutaspecificprojectorundertaking,theduration
and scope of which were specified at the time the
employeewasengagedforthatproject.
In the instant case, petitioner was engaged to perform
activitieswhichwereusuallynecessaryordesirableinthe
usual business or trade of the employer, as admittedly,
petitioner worked as a data encoder for private
respondent,acorporationengagedinthebusinessofdata
encodingandkeypunching,andheremploymentwasfixed
for a specific project or undertaking the completion or
terminationofwhichhadbeendeterminedatthetimeof
her engagement, as may be observed from the series of
employment contracts32 between petitioner and private
respondent, all of which contained a designation of the
specificjobcontractandaspecificperiodofemployment.
However,evenasweconcurwiththeNLRCsfindingsthat
petitioner is a project employee, we have reached a
differentconclusion.IntherecentcaseofMaraguinot,Jr.
vs.NLRC,weheldthat"aprojectemployeeor amember
of a work pool may acquire the status of a regular
employeewhenthefollowingconcur:
1) There is a continuous rehiring of project employees
evenafter[the]cessationofaproject;and
2)Thetasksperformedbythealleged"projectemployee"
are vital, necessary and indispensable to the usual
businessortradeoftheemployer."
The evidence on record reveals that petitioner was
employed by private respondent as a data encoder,
performing activities which are usually necessary or
desirable in the usual business or trade of her employer,
continuously for a period of more than three (3) years,
fromAugust26,1988toOctober18,1991andcontracted
for a total of thirteen (13) successive projects. We have
previouslyruledthat"however,thelengthoftimeduring
which the employee was continuously rehired is not
controlling, but merely serves as a badge of regular
employment."
Based on the foregoing, we conclude that petitioner has
attained the status of a regular employee of private
respondent. Being a regular employee, petitioner is

entitledtosecurityoftenureandcouldonlybedismissed
forajustorauthorizedcause,asprovidedinArticle279of
the Labor Code. The alleged causes of petitioners
dismissal (low volume of work and belatedly, completion
ofproject)arenotvalidcausesfordismissalunderArticles
282and283oftheLaborCode.Thus,petitionerisentitled
toreinstatementwithoutlossofseniorityrightsandother
privileges, and to her full backwages, inclusive of
allowances,andtoherotherbenefits.
21
DEOCAMPOvs.NLRC
G.R.No.101539
September4,1992

FACTS:

Petitioners de Ocampo et al are employees of

private respondent Baliwag Mahogany Corporation. They
are either officers or members of the Baliwag Mahogany
Corporation UnionCFW,theexistingcollective bargaining
agent of the rank and file employees in the company. In
1988, the company and the union entered into a CBA
containing, among other things, provisions on conversion
intocashofunusedvacationandsickleaves.

On January 3, 1990, the union filed a notice of

strike on the grounds of unfair labor practice particularly
the violation of the CBA provisions on nonpayment of
unusedleavesandillegaldismissalofseven(7)employees
inNovember,1989.

On January 13, 1990, the company issued a

notice of termination to three (3) employees or union
members, namely, de Ocampo, Villanueva and dela Cruz,
of the machinery department, allegedly to effect cost
reductionandredundancy.

On January 18, 1990 the members of the union

conductedapicketatthemaingateofthecompany.The
union staged another strike on February 6, 1990. The
Secretary of Labor in an order dated February 15, 1990,
certified the entire labor dispute to the respondent
Commission for compulsory arbitration and directed all
striking workers including the dismissed employees to
returntoworkandthemanagementtoacceptthemback.
Thesheriff,withtheassistanceofthepolice,removedthe
barricades and opened the main gate of the company.
Criminalcomplaintsforillegalassembly,gravethreats,and
15

16

gravecoercionwerefiledagainstseveralemployeesbythe
localpoliceauthorities

TherespondentCommissionrenderedadecision
on October 23, 1990, declaring the strikes staged on
January 18, 1990 and February 6, 1990 illegal. The Union
officers/members were ordered reinstated to their
positions but without backwages. The company was
directed to immediately reinstate de Ocampo, Villanueva
and dela Cruz to their former positions without loss of
seniorityrightsandwithfullbackwages.

Thecompanyfiledamotionforreconsideration.
Respondent Commission rendered a resolution affirming
withmodificationthedecisionmakingthestrikestagedon
February 6, 1990 illegal and the Union officers/members
who participated in said strike committed prohibited acts
aredeemedtohavelosttheirstatusofemployment.

The company was also directed to pay de

Ocampo, Villanueva and dela Cruz separation pay
computedatonemonthperyearofserviceinadditionto
one month pay as indemnification pay for lack of notice.
Petitioners however contend that the company acted in
bad faith when it terminated the services of the three
mechanicsbecausethepositionsheldbythemwerenotat
allabolishedbutmerelygiventoGemacMachineries.

ISSUES:

(1) Whether or not there is legal basis for

declaringthelossofemploymentstatusbypetitionerson
accountofthestrikeinrespondentCompany.

(2) Whether or not the dismissals of petitioners

deOcampo,Villanueva,anddelaCruzfromtheirpositions
bythecompanyonthegroundofredundancywasdonein
goodfaith.

HELD:

(1) The strike was illegal. A strike that is

undertakendespitetheissuancebytheSecretaryofLabor
of an assumption or certification order becomes a
prohibitedactivityandthusillegal,pursuanttothesecond
paragraphofArt.264oftheLaborCodeasAmendedand
the Union officers andmembers, as a result, are deemed
tohavelosttheiremploymentstatusforhavingknowingly
participated in an illegal act. Unrebutted evidence shows
that the individual petitioners defied the returntowork
order of the Secretary of Labor issued on February 15,

1990. Hence, the termination of the services of the

individualpetitionersisjustifiedonthisgroundalone.

(2) Petitioners' dismissal was justified by

redundancy due to superfluity and hence legal.
Redundancy,forpurposesofourLaborCode,existswhere
the services of an employee are in excess of what is
reasonably demanded by the actual requirement of the
enterprise.Succinctlyput,apositionisredundantwhereit
is superfluous, and superfluity of a position or positions
maybetheoutcomeofanumberoffactors,suchasover
hiring of workers, decreased volume of business, or
dropping of a particular product line or service activity
previouslymanufacturedorundertakenbytheenterprise.

In contracting the services of Gemac

Machineries,aspartofthecompany'scostsavingprogram,
the services rendered by the mechanics became
redundant and superfluous, and therefore properly
terminable. The company merely exercised its business
judgmentormanagementprerogative.Andintheabsence
ofanyproofthatthemanagementabuseditsdiscretionor
actedinamaliciousorarbitrarymanner,thecourtwillnot
interferewiththeexerciseofsuchprerogative.

22
A.M.ORETA&CO.,INC.,vs.NLRCandSIXTOGRULLAJR.
G.R.No.74004
August10,1989
FACTS:

Respondent Grulla was engaged by a

construction company (ENDECO) through A.M. Oreta and
Co., Inc., as a carpenter in its projects in Jeddah, Saudi
Arabia.Thecontractofemploymentwasforaperiodof12
months.GrullaleftthePhilippinesforJeddah,SaudiArabia
onAugust5,1980.

On August 15, 1980, Grulla met an accident

whileworkingatthejobsite.Grullawastoldthathecould
resume his normal duties after undergoing physical
therapy for two weeks. On September 18, 1980, Grulla
reported back to his Project Manager. Since then, he
started working again until he received a notice of
terminationofhisemploymentonOctober9,1980.

In December, 1981, Grulla filed a complaint for

illegaldismissalagainstA.M.OretaandCompany,Inc.,and

ENDECO with the Philippine Overseas Employment

Administration(POEA).

Petitioner answers that Grulla was validly

dismissed because the latter was still a probationary
employee;andthathisdismissalwasjustifiedonthebasis
of his unsatisfactory performance of his job during the
probationaryperiodofthreemonths.

POEA finds and so holds that complainants

dismissal was illegal. On appeal, respondent Commission
affirmedintotothedecisionofthePOEA.

ISSUE:

Whether or not the employment of respondent

Grullawasillegalyterminatedbythepetitioner.

HELD:

What determines regularity or casualness is not

employment contract, written or otherwise, but the
nature of the job. If the job is usually necessary or
desireable to the main business of the employer, the
employment is regular. A perusal of the employment
contract reveals that although the period of employment
ofrespondentGrullaistwelve(12)months,thecontractis
renewablesubjecttofutureagreementsoftheparties.Itis
clear from the employment contract that the respondent
Grulla was hired by the company as a regular employee
andnotjustmereprobationaryemployee.

Art.281oftheLaborCodeiscleartotheeffect
that in all cases involving employees engaged on
probationaryperiodbasis,theemployershallmakeknown
totheemployeeatthetimeheishired,thestandardsby
which he will qualify as a regular employee. Nowhere in
theemploymentcontractisthereastipulationthatGrulla
shall undergo a probationary period for 3 months before
he can qualify as a regular employee. There is also no
evidence showing that Grulla has been appraised of his
probationarystatusandtherequirementswhichheshould
comply in order to be a regular employee. As such,
respondentGrullawasaregularemployeeatthetimehe
wasdismissedbypetitionerandthereforeheisentitledto
securityoftenureduringhisperiodofemployment.

Also, granting, in gratia argumenti, that

respondent is a probationary employee, he cannot,
likewise,beremovedexceptforcauseduringtheperiodof
probation. Although a probationary or temporary
16

17

employee has limited tenure, he still enjoys security of

tenure.

The dismissal of respondent Grulla violated the

security of tenure under the contract of employment
whichspecificallyprovidesthatthecontracttermshallbe
for a period of 12 months. Consequently the respondent
Grullashouldbepaidhissalaryfortheunexpiredportion
ofhiscontractofemploymentwhichisten(10)months.

23
PURE FOODS CORPORATION v. NATIONAL LABOR
RELATIONSCOMMISSION
G.R.No.122653December12,1997

Facts:Privaterespondents(numbering906)werehiredby
petitionerPureFoods
Corporationtoworkforafixedperiodoffivemonthsatits
tuna cannery plant in Tambler, General SantosCity. After
theexpirationoftheirrespectivecontractsofemployment
in June and July 1991, their services were terminated.
Theyforthwithexecuteda"ReleaseandQuitclaim"stating
thattheyhadnoclaimwhatsoeveragainstthepetitioner.
Thereafter, they filed a complaint against petitioner for
illegaldismissal.

The Labor Arbiter dismissed the complaint on

the ground that the private respondents were mere
contractual workers, and not regular employees; hence,
theycouldnotavailofthelawonsecurityoftenure.The
terminationoftheirservicesbyreasonoftheexpirationof
theircontractsofemploymentwas,therefore,justified.

The NLRC held that the private respondent and

theircocomplainantswereregularemployees.Itdeclared
that the contract of employment for five months was a
"clandestineschemeemployedby[thepetitioner]tostifle
[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
respectivecontractswasillegal.

Petitioner submits that the private respondents

arenowestoppedfromquestioningtheirseparationfrom
petitioner's employ in view of their express conformity
with the fivemonth duration of their employment
contracts.Besides,theyfellwithintheexceptionprovided
in Article 280 of the Labor Code which reads: "[E]xcept
where the employment has been fixed for a specific
project or undertaking the completion or termination of
whichhasbeendeterminedatthetimeoftheengagement
of the employee." Moreover, the first paragraph of the
said article must be read and interpreted in conjunction
with the proviso in the second paragraph, which reads:
"Provided that any employee who has rendered at least
oneyearofservice,whethersuchserviceiscontinuousor
broken, shall be considered a regular employee with
respecttotheactivityinwhichheisemployed..."Inthe
instantcase,theprivaterespondentswereemployedfora
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.

Issue: Whether or not employees hired for a definite

period and whose services arenecessary and desirable in
the usual business or trade of the employer are regular
employees.

Held: Yes. Article 280 of the Labor Code defines regular

andcasualemploymentasfollows:
Art.280.RegularandCasualEmployment.The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral argument of
theparties,anemploymentshallbedeemedtoberegular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usualbusinessortradeoftheemployer,exceptwherethe
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
employeeorwheretheworkorservicestobeperformed
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
renderedatleastoneyearofservice,whethersuchservice
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
activityexists.

Thus,thetwokindsofregularemployeesare(1)
those who are engaged to perform activities which are
necessaryordesirableintheusualbusinessortradeofthe
employer; and (2) those casual employees who have
renderedatleastoneyearofservice,whethercontinuous
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 casingup of tuna fish which were then
exported by the petitioner. Indisputably, they were
performing activities which were necessary and desirable
inpetitioner'sbusinessortrade.

Theterm"specificprojectorundertaking"under
Article 280 of the Labor Code contemplates an activity
which is not commonly or habitually performed or such
typeofworkwhichisnotdoneonadailybasisbutonlyfor
aspecificdurationoftimeoruntilcompletion;theservices
employed are then necessary and desirable in the
employer's usual business only for the period of time it
takestocompletetheproject.Thefactthatthepetitioner
repeatedlyandcontinuouslyhiredworkerstodothesame
kindofworkasthatperformedbythosewhosecontracts
had expired negates petitioner's contention that those
workers were hired for a specific project or undertaking
only.thedecisivedeterminantintermemploymentshould
not be the activities that the employee is called upon to
performbutthedaycertainagreeduponbythepartiesfor
thecommencementandterminationoftheiremployment
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
disregardedascontrarytopublicpolicyandmorals.

Brent also laid down the criteria under which

termemploymentcannotbesaidtobeincircumventionof
thelawonsecurityoftenure:
1) The fixed period of employment was
knowingly and voluntarily agreed upon by the parties
without any force, duress, or improper pressure being
17

18

broughttobearupontheemployeeandabsentanyother
circumstancesvitiatinghisconsent;or
2)Itsatisfactorilyappearsthattheemployerand
theemployeedealtwitheachotheronmoreorlessequal
terms with no moral dominance exercised by the former
overthelatter.

None of these criteria had been met in the

present case. As pointed out by the private respondents:
[I]tcouldnotbesupposedthatprivaterespondentsandall
other socalled "casual" workers of [the petitioner]
KNOWINGLY and VOLUNTARILY agreed to the 5month
employment contract. Cannery workers are never on
equal terms with their employers. Almost always, they
agreetoanytermsofanemploymentcontractjusttoget
employedconsideringthatitisdifficulttofindworkgiven
their ordinary qualifications. Their freedom to contract is
emptyandhollowbecausetheirsisthefreedomtostarve
if they refuse to work as casual or contractual workers.
Indeed, to the unemployed, security of tenure has no
value.Itcouldnotthenbesaidthatpetitionerandprivate
respondents"dealtwitheachotheronmoreorlessequal
termswithnomoraldominancewhateverbeingexercised
bytheformeroverthelatter.

Asamatteroffact,thepetitionerevenstatedin
its position paper submitted to the Labor Arbiter that,
according to its records, the previous employees of the
company hired on a fivemonth basis numbered about
10,000asofJuly1990.
This confirms private respondents' allegation that it was
really the practice of the company to hire workers on a
uniformlyfixedcontractbasisandreplacethemuponthe
expiration of their contracts with other workers on the
sameemploymentduration.
Thisschemeofthepetitionerwasapparentlydesignedto
prevent the private respondents and the other "casual"
employees from attaining the status of a regular
employee.Itwasaclearcircumventionoftheemployees'
right to security of tenure and to other benefits like
minimum wage, costofliving allowance, sick, leave,
holiday pay, and 13th month pay. 11 Indeed, the
petitioner succeeded in evading the application of labor
laws. Also, it saved itself from the trouble or burden of
establishingajustcauseforterminatingemployeesbythe

simple expedient of refusing to renew the employment

contracts.

The fivemonth period specified in private

respondents'employmentcontractshavingbeenimposed
precisely to circumvent the constitutional guarantee on
security of tenure should, therefore, be struck down or
disregardedascontrarytopublicpolicyormorals.

The execution by the private respondents of a

"Release and Quitclaim" did not preclude them from
questioning the termination of their services. Generally,
quitclaims by laborers are frowned upon as contrary to
publicpolicyandareheldtobeineffectivetobarrecovery
forthefullmeasureoftheworkers'rights.Thereasonfor
the rule is that the employer and the employee do not
standonthesamefooting.

However, since reinstatement is no longer

possible because the petitioner's tuna cannery plant had,
admittedly, been close in November 1994, the proper
award is separation pay equivalent to one month pay or
onehalfmonthpayforeveryyearofservice,whicheveris
higher,tobecomputedfromthecommencementoftheir
employmentuptotheclosureofthetunacanneryplant.

24Chuav.CA,440SCRA121ron
25
C.E.CONSTRUCTIONCORPORATIONv.ISAACCIOCOJR.
G.R.No.156748

FACTS:IsaacCiocoJr.etal.(WORKERS)werehiredbyC.E.
Construction Corporation (COMPANY), a domestic
corporation engaged in the construction business. They
were hired as carpenters and laborers in various
construction projects from 1990 to 1999, the latest of
which was the GTI Tower in Makati. Prior to the start of
everyproject,theWORKERSsignedindividualemployment
contractswhichuniformlyread
I hereby apply as carpenter/laborer on [the] GTI Tower
project. It is understood that if accepted, the period of
employment shall be coterminus with the completion of

theproject,unlesssoonerterminatedbyyoupriortothe
completionoftheproject.

SometimeinMayandJune1999,theWORKERS,
along with sixtysix (66) others, were terminated by the
COMPANY on the ground of completion of the phases of
the GTI Tower project for which they had been hired.
Allegingthattheywereregularemployees,theWORKERS
filed complaints for illegal dismissal with the Arbitration
Branch of the NLRC. Claims for underpaid wages and
unpaid overtime pay, premium for holiday and rest days,
service incentive leave pay, night shift differential, and
13thmonthpaywerelikewisedemanded.
On April 17, 2000, the Labor Arbiter rendered
judgment in favor of the COMPANY. He ruled that the
WORKERS were project employees as evident from their
individualemploymentcontracts.
NLRC affirmed the labor arbiters decision on
appeal.
The CA affirmed the decision but modified the
modified the part of dismissal in which it ruled that the
workerswereillegallydismissed.
The WORKERS contend that they are regular
employees of the COMPANY, hence, entitled to
reinstatementandbackwagesfromthetimeoftheirillegal
dismissaluptothedateoftheiractualreinstatement.
TheCOMPANY,ontheotherhand,contendsthat
the WORKERS are its project employees; that they were
not illegally dismissed; and, that in ruling otherwise, the
CA disregarded the documentary evidence, i.e., Progress
BillingandNoticeofTerminationReports,clearlyshowing
completion of the phases of the GTI Tower project for
whichtheservicesoftheWORKERShadbeenengaged.

Issue: Whether or not the WORKERS can be considered

regularemployees.

Held:No.TheissueofwhethertheWORKERSwereregular
orprojectemployeesoftheCOMPANYisaquestionoffact
which shall no longer be dealt with in this petition for
review, the Courts jurisdiction being limited to questions
oflaw.
The Labor Arbiter, the NLRC, and the CA,
unanimously found that the WORKERS were project
employeesoftheCOMPANY.Thisfindingisbindingonthis
Court.WeagainholdthatthefactthattheWORKERShave
beenemployedwiththe
18

19

COMPANY for several years on various projects, the

longest being nine (9) years, did not automatically make
themregularemployeesconsideringthatthedefinitionof
regular employment in Article 280 of the Labor Code,
makes specific exception with respect to project
employment. The rehiring of petitioners on a projectto
project basis did not confer upon them regular
employment status. The practice was dictated by the
practical consideration that experienced construction
workersaremorepreferred.Itdidnotchangetheirstatus
asprojectemployees.

The labor arbiter categorically found that the

appropriate notices to the WORKERS and the
corresponding reports were submitted by the COMPANY
to the DOLE. The NLRC affirmed this finding of fact on
appeal. The rule is that factual findings of administrative
agencies,ifsupportedbysubstantialevidence,areentitled
to great weight. More importantly, Section 2(III), Rule
XXIII,BookVoftheOmnibusRules
Implementing the Labor Code provides that no prior
notice of termination is required if the termination is
brought about by completion of the contract or phase
thereof for which the worker has been engaged. This is
because completion of the work or project automatically
terminates the employment, in which case, the employer
is, under the law, only obliged to render a report to the
DOLEontheterminationoftheemployment.

We hold that the COMPANY complied with the

proceduralaswellasthesubstantiverequirementsofdue
process with respect to the WORKERS termination, as
foundbytheLaborArbiterandtheNLRC.Wereversethe
CA.

26
Aguilar vs. NLRC, Wack Wack Golf and Country Club, and
PerfectoV.Eugenio
G.R.No.100878
Facts:Col. PerfectoV.EugenioistheGeneralManagerof
Wack Wack Golf and Country Club (CLUB for brevity).
Herein petitioner Estrelita Aguilar was employed by the
CLUBfor23yearsandherlastpositionwasanAccounting
Clerk.BecauseofthelossesthattheCLUBincurredinits
restaurantandbaroperations,itimposedapatronagefee
ofP200permemberstartingAugust1,1986. Onseveral

occasions,petitioner,withouttheknowledgeandconsent
of the CLUB management, ordered and consumed food
from the CLUB restaurant/bar and charged them against
thepatronagefeesofCLUBmembers.

RuleA:General
xxxxxxxxx
Sec. 15. . . . (a) Nonmembers, guests
or visitors cannot sign chits for and in
behalfofmembers.
RuleB:MinorsandChildren
xxxxxxxxx
Sec. 7. That the spouses and
dependentsbeallowedtosignchitsfor
themselves and their guests for F & B
andotherfacilities;providedhowever,
that in case of green fees, the
legitimate spouse of a member can
sign chits for their guests but only
when playing at the West Course and
provided further that the member
shouldexpresslyauthorizeitinwriting.

TheCLUB,upondiscoveryofpetitioner'smisconduct,sent
awrittennoticeofchargesagainsther,butsherefusedto
receive it. The CLUB then conducted an investigation.
Petitioner executed a written statement on January 31,
1988, explaining her side. During the investigation,
petitioner was reminded that she was not allowed under
CLUBrulestosignrestaurantandbarbills/chitschargeable
to the patronage fees of CLUB members. Nonetheless,
petitionercontinuedtodoso.
Thus, on May 10, 1988, petitioner was dismissed for
violationofHouseRule(A),Section15(a);HouseRule(B),
Section 7, as amended; and for serious misconduct and
breachoftrust.
Hence, petitioner filed a complaint for Illegal Dismissal
against the CLUB and Col. Eugenio. The Labor Arbiter
rendered a decision in favour of petitioner, ordering
private respondents to reinstate her. CLUB appealed to
theNLRCwhichreversedthedecisionoftheLaborArbiter.
Petitioner filed a Motion for Reconsideration but was
denied,hencethispetition.

Issues:
1. Whetherornotpetitionerviolatedanycompany
rules and regulations when she signed the chits
forandinbehalfofCLUBmembers.
2. Whether or not the petitioner was illegally
dismissed.
Held:
1.

Yes.TheSupremeCourtruledtoaffirmtheNLRC
decision. The Court cited the rules and
regulations of the CLUB when she signed the
chits for and in behalf of the CLUB members,
namelyHouseRule(A),Section15(a)andHouse
Rule(B),Section7:

Itisundeniablethatpetitionerisnotamember
of the CLUB. Being a nonmember, she is
prohibitedfromsigningchitsforandinbehalfof
club
members
notwithstanding
any
authorization given by them. Furthermore,
under Rule (B), Section 7, only the spouses and
dependents are allowed to sign chits for
themselves and their guests for food and
beverageandotherfacilities.
2.

No. The Supreme Court agreed with the NLRC

thattherewasnoillegaldismissal.Article282of
the Labor Code provides for the Termination of
employmentbytheemployerwhichreads:
An employer may terminate an
employment for any of the following
causes:a)Seriousmisconductorwillful
disobedience by the employee of the
lawful orders of his employer or
representative in connection with his
work.
Willful disobedience of the employer's lawful
orders, as a just cause for the dismissal of an
employee,envisagestheconcurrenceofatleast
two (2) requisites: the employee's assailed
19

20

conduct must have been willful or intentional,

the willfulness being characterized by a
"wrongful and perverse attitude." The order
violated must have been reasonable, lawful,
madeknowntotheemployeeandmustpertain
to the duties which he had been engaged to
discharge.

In the case at bar, petitioner admittedly

continued signing the restaurant and Bar Grill
bills or chits chargeable to the patronage fee of
the CLUB members Cepeda and Gonzales even
after she had been investigated for such
misconduct and after she was already made
aware that nonmembers like her cannot sign
chitsforandinbehalfoftheCLUBmembers.

The Court agrees with the NLRC that CLUB had

no other recourse than to terminate the
employment of petitioner due to her cavalier
attitude even after investigation has
commenced. An employer cannot legally be
compelledtocontinuewiththeemploymentofa
personwhoadmitedlywasguiltyofmisfeasance
or malfeasance towards his employer, and
whosecontinuanceintheserviceofthelatteris
patentlyinimicaltohisinterests.

27
th
Palomares and Mutia vs. NLRC (5 Division) and National
SteelCorporation,

G.R.No.120064
August15,1997
FACTS: Petitioners Ferdinand Palomares and Teodulo
Mutia were hired by respondent National Steel
Corporation (NSC) by virtue of contracts of employment

foritsFiveYearExpansionProgramorFYEP,PhaseIandII
4,forvaryinglengthsoftime.

Togetherwithotheremployees,petitionersfiled
a consolidated petition for regularization, wage
differential, CBA coverage and other benefits. The Labor
Arbiter ordered for the dismissal of the complaint with
respecttotheother26complainantsbutruledinfavorof
Palomares,Mutiaandfourothers,whowereadjudgedas
regular employees for reason that the activities they
performedareregular,andnecessaryintheusualtradeor
courseofbusinessofthecompany.

The NLRC reversed the decision of the Labor

Arbiter petitioners were not regular employees rather
were project employees and that their assumption of
regularjobsweremainlyduetopeakloadsortheabsence
ofregularemployeesduringthelatter'stemporaryleave.
ISSUE: Whether or not petitioners should be regarded as
regularemployees.
HELD: No. The Supreme Court ruled to affirm the NLRC
decision,infavouroftherespondents.Article280ofthe
LaborCodeprovides:
The provisions of the 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
thecompletionorterminationofwhichhasbeen
determinedatthetimeoftheengagementofthe
employee or where the work or services to be
performed is seasonal in nature and the
employmentisforthedurationoftheseason.
Anemploymentshallbedeemedtobecasualif
it is not covered by the preceding paragraph:
Provided, That any employee who has rendered
atleastoneyearofservice,whethersuchservice

is continuous or broken shall be considered a

regular employee with respect to the activity in
whichheisemployedandhisemploymentshall
continuewhilesuchactuallyexists.
Thus, the principal test for determining whether an
employee is a project employee and not a regular
employee is whether he was assigned to carry out a
specificprojectorundertaking,thedurationandscopeof
whichwerespecifiedatthetimehewasengagedforthat
project.
The records show that petitioners were hired to work on
projectsforFYEPIandIIA.Onaccountoftheexpirationof
theircontractsofemploymentand/orprojectcompletion,
petitionerswereterminatedfromtheiremployment.They
were, however, rehired for other component projects of
the FYEP because they were qualified. Thus, the Court is
convincedthatpetitionerswereengagedonlytoaugment
theworkforceofNSCforitsaforesaidexpansionprogram.
In the case of Philippine National Oil Company Energy
DevelopmentCorporationv.NLRC,wesetforththecriteria
for fixed contracts of employment which do not
circumventsecurityoftenure,towit:
(1) The fixed period of employment was
knowingly and voluntarily agreed upon by the parties,
without any force, duress or improper pressure being
broughttobearupontheemployeeandabsentanyother
circumstancesvitiatinghisconsent;or
(2) It satisfactorily appears that the employer
andemployeedealtwitheachotheronmoreorlessequal
termswithnomoraldominancewhateverbeingexercised
bytheformeronthelatter.
In the case at bar, however, there is nothing in
the records which reveal an attempt to frustrate
petitioners' security of tenure. The fact that petitioners
wererequiredtorenderservicesnecessaryordesirablein
the operation of NSC's business for a specified duration
didnotinanywayimpairthevalidityoftheircontractsof
employmentwhichstipulatedafixeddurationtherefor.
20

21

Also, there were intervals in petitioners'

respective employment contracts with NSC, thus
bolsteringthelatter'spositionthat,indeed,petitionersare
projectemployees.

The Labor Arbiter dismissed the complaint for

lack of merit. The respondent appealed. However, the
NLRC dismissedthe same and the subsequentmotion for
reconsideration.

In addition, regulation of manpower by the

company clearly falls within management prerogative.
Thus, the Court ruled that NSC acted within the
parameters of a valid exercise of management
prerogative.

The respondent appealed to the CA which

renderedadecisioninfavouroftherespondentrulingthat
he was a regular employee, that there was no specified
duration for each project in the employment contracts
contrarytotheprovisionofArticle280oftheLaborCode,
nordidpetitionerworkintheprojectsites,buthadalways
been assigned at the company plant attending to the
maintenance of all mobile cranes of the company,
performing tasks vital and desirable in the employers
usualbusinessforten(10)continuousyears.

28
Filipinas Prefabricated Building Systems (FILSYSTEMS),
Inc.,andFelipeA.CruzJr.,vs.RogerD.Puente,
G.R.No.153832;March18,2005
FACTS: Puente herein respondent started working with
petitioner Filsystems, Inc., a corporation engaged in
construction business, on June 12, 1989; that he was
initially hired by petitioner company as an installer; that
hewaslaterpromotedtomobilecraneoperatorandwas
stationed at the company premises. Respondent alleged
that his work was not dependent on the completion or
terminationofanyproject.Thus,hisemploymentwiththe
petitioner company was continuous and without
interruption for the past ten (10) years. On October 1,
1999, he was dismissed from his employment allegedly
because he was a project employee. He then filed a pro
formacomplaintforillegaldismissalagainstthepetitioner
companyonNovember18,1999.
The petitioner company however claims that
complainant was hired as a project employee in the
companys various projects; that his employment
contracts showed that he was a project worker with
specificprojectassignments;thataftercompletionofeach
project assignment, his employment was likewise
terminatedandthesamewascorrespondinglyreportedto
theDOLE.

Hence,thispetition.
ISSUES:
1.
2.

Whether or not respondent Puente was a

regularemployee.
Whether or not respondent Punete should be
reinstated.

HELD:
1.

No.TheCourtruledthatrespondentPuenteisa
project employee and not a regular employee.
The Department of Labor and Employment
(DOLE) issued Order No. 19 which classifies
employees with particular respect with
constructionindustry,whichreads:
2.1 Classification of employees. The
employeesintheconstructionindustry
are generally categorized as a) project
employees and b) nonproject
employees. Project employees are
those employed in connection with a
particular construction project or
phasethereofandwhoseemployment
is coterminous with each project or

phaseoftheprojecttowhichtheyare
assigned.
xxxxxxxxx
2.2 Indicators of project employment.
Either one or more of the following
circumstances, among other, may be
considered as indicators that an
employeeisaprojectemployee.
(a)
The
duration
of
the
specific/identified undertaking for
which the worker is engaged is
reasonablydeterminable.
(b) Such duration, as well as the
specificwork/servicetobeperformed,
is defined in an employment
agreement and is made clear to the
employeeatthetimeofhiring.
(c)Thework/serviceperformedbythe
employee is in connection with the
particular project/undertaking for
whichheisengaged.
(d)Theemployee,whilenotemployed
and awaiting engagement, is free to
offer his services to any other
employer.
(e)Theterminationofhisemployment
intheparticularproject/undertakingis
reported to the Department of Labor
and Employment (DOLE) Regional
Office having jurisdiction over the
workplacewithin30daysfollowingthe
dateofhisseparationfromwork,using
the prescribed form on employees
terminations/dismissals/suspensions.
(f) An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
constructioncompanies.
The abovequoted provisions make it
clear that a project employee is one whose
"employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at
21

22

thetimeoftheengagementoftheemployeeor
where the work or services to be performed is
seasonal in nature and the employment is for
thedurationoftheseason."

allowancesandotherbenefitsortheirmonetary
equivalents computed from the date of his
dismissal until his reinstatement is thus in
order.

In the present case, the contracts of

employmentofPuenteattesttothefactthathe
was hired for specific projects. His employment
was coterminous with the completion of the
projects for which he had been hired. Those
contracts expressly provided that his tenure of
employment depended on the duration of any
phaseoftheprojectoronthecompletionofthe
construction projects. Furthermore, petitioners
regularly submitted to the labor department
reportsoftheterminationofservicesofproject
workers. Such compliance with the reportorial
requirement confirms that respondent was a
projectemployee.

However if indeed the World Finance

Plazaprojecthasalreadybeencompletedduring
the pendency of this suit, then respondent
being a project employee can no longer be
reinstated. Instead, he shall entitled to the
payment of his salary and other benefits
corresponding to the unexpired portion of his
employment, specifically from the time of the
termination of his employment on October 1,
1999, until the date of the completion of the
WorldFinancePlazaproject.

The fact that that he was employed

with Petitioner Filsystems for ten years in
various projects did not ipso facto make him a
regularemployee,consideringthatthedefinition
of regular employment in Article 280 of the
Labor Code makes a specific exception with
respect to project employment. The mere
rehiring of respondent on a projecttoproject
basis did not confer upon him regular
employment status. "The practice was dictated
by the practical consideration that experienced
constructionworkersaremorepreferred."Itdid
notchangehisstatusasaprojectemployee.
2.

No.TheCourtruledthattheburdenofproofin
the question whether an employee was illegally
dismissedlieswiththeemployer.Inthepresent
case,itwasshownthatthelastprojectinwhich
the respondent was employed was not yet
completed when he was dismissed from his
service. Thus, the presumption is that his
serviceswereterminatedfornovalidcauseprior
to the expiration of the period of his
employment;hence,theterminationwasillegal.
Reinstatementwithfullbackwages,inclusiveof

In sum, the Court held that without a

valid cause, the employment of project
employees cannot be terminated prior to
expiration. Otherwise, they shall be entitled to
reinstatement with full back wages. However, if
the project or work is completed during the
pendencyoftheensuingsuitforillegaldismissal,
theemployeesshallbeentitledonlytofullback
wagesfromthedateoftheterminationoftheir
employment until the actual completion of the
projectorwork.
29
KIMBERLYINDEPENDENTLABORUNIONVDRILON
185SCRA190,May9,1990
REGALADO,J.:
FACTS: KimberlyClark Philippines, Inc. (KIMBERLY)
executed a three year collective bargaining agreement
(CBA) with United KimberlyClark Employees Union
Philippine Transport and General Workers' Organization
(UKCEUPTGWO) which expired on June 30, 1986.Within
the 60day freedom period prior to the expiration of and
during the negotiations for the renewal of the
aforementioned CBA, some members of the bargaining
unit formed another union called "Kimberly Independent
Labor Union for Solidarity, Activism and Nationalism
Organized Labor Association in Line Industries and

Agriculture (KILUSANOLALIA). April 21, 1986, KILUSAN

OLALIAfiledapetitionforcertificationelection.KIMBERLY
and UKCEUPTGWO did not object to the holding of a
certification election but objected to the inclusion of the
socalled contractual workers whose employment with
KIMBERLY was coursed through an independent
contractor,RankManpowerCompany(RANK,forshort),as
amongthequalifiedvoters.
On June 2, 1986, MedArbiter Bonifacio I.
Marasigan, who was handling the certification election
case issuedanorder declaringthe following as eligible to
voteinthecertificationelection,thus:1)regularrankand
file laborers/employees of the respondent company; 2)
casuals who have worked at least six (6) months;3)
Contractualemployeeswhoareallegedlyintheemployof
anindependentcontractorandwhohavealsoworkedfor
atleastsix(6)months.
During the preelection conference, 64 casual
workers were challenged by KIMBERLY and UKCEU
PTGWO on the ground that they are not employees of
KIMBERLY but of RANK. It was agreed by all the parties
thatthe64votersshallbeallowedtocasttheirvotesbut
that their ballots shall be segregated and subject to
challengeproceedings.Aftertheelections,UKCEUPTGWO
won over KILUSANOLALIA by 20 votes. This count
consideredthevotesofthe64employeesasseparate.
In a case regarding the status of the 64
employees in relation to the certification election, it was
heldbymedarbiterSanchezthat:
2)Theothercasualemployeesnotperforming
janitorial and yard maintenance services were
deemedlaboronlycontractualsandsincelabor
only contracting is prohibited ,such employees
wereheldtohaveattainedthestatusofregular
employees, the regularization being effective as
ofthedateofthedecision;
3. UKCEUPTGWO, having garnered more votes
than KILUSANOLALIA, was certified as the
exclusive
bargaining
representative
of
KlMBERLY'semployees;
Sincethememberswereonlyconsideredregular
at the time of the decision, their votes were not re
consideredasregardstheelection.KIMBERLYOLALIAfiled
for a TRO on the CBA and included the question of the
statusofthe64membersinquestion.

22

23

ISSUE: Whether or not the 64 employees were regular

employeesatthetimeofthecertificationelection.

HELD:YES.Article280oftheLaborCodeprovidesfortwo
kindsofregularemployees:(1)thosewhoareengagedto
performactivitieswhichareusuallynecessaryordesirable
in the usual business or trade of the employer; and (2)
those who have rendered at least one year of service,
whethercontinuousorbroken,withrespecttotheactivity
in which they are employed. The individual petitioners
herein who have been adjudged to be regular employees
(by law) fall under the second category. These are the
mechanics,electricians,machinists,machineshophelpers,
warehouse helpers, painters, carpenters, pipefitters and
masons.Itisnotdisputedthattheseworkershavebeenin
the employ of KIMBERLY for more than one year at the
time of the filing of the petition for certification election
byKILUSANOLALIA.
Whiletheactualregularizationoftheseemployeesentails
themechanicalactofissuingregularappointmentpapers
and compliance with such other operating procedures as
may be adopted by the employer, it is more in keeping
withtheintentandspiritofthelawtorulethatthestatus
of regular employment attaches to the casual worker on
the day immediately after the end of his first year of
service
The law is explicit. As long as the employeehas
rendered at least one year of service, he becomes a
regularemployeewithrespecttotheactivityinwhichheis
employed.Thelawdoesnotprovidethequalificationthat
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
notdistinguish,nodistinctionshouldbedrawn.
Onthebasisoftheforegoingcircumstances,and
as a consequence of their status as regular employees,
those workers not perforce janitorial and yard
maintenance service were performance entitled to the
payment of salary differential, cost of living allowance,
13th month pay, and such other benefits extended to
regular employees under the CBA, from the day
immediately following their first year of service in the
company.Theseregularemployeesarelikewiseentitledto
vote in the certification election held in July 1, 1986.
Consequently, the votes cast by those employees not
performingjanitorialandyardmaintenanceservice,which

formspartofthe64challengedvotes,shouldbeopened,
counted and considered for the purpose of determining
thecertifiedbargainingrepresentative.
30
INTEGRATEDCONTRACTORVNLRC(SOLON)
464SCRA265,August9,2005

QUISUMBING,J.:
FACTS: Petitioner is a plumbing contractor. Its business
dependsonthenumberandfrequencyoftheprojectsitis
abletocontractwithitsclients.RespondentSolonworked
for petitioner several months at a time from 1994 to
1998.OnFeb.1998,whileSolonwasabouttologoutfrom
work,hewasinformedthatitwashislastdayofworkas
he had been terminated. He went back to petitioners
officetosignaclearancesohecouldclaimhis13thmonth
payandtaxrefunds.However,herefusedtosignwhenhe
read the clearance indicating that he had resigned. He
then filed a complaint for illegal dismissal without due
causeanddueprocess.
TheLaborArbiterruledthatSolonwasaregular
employee and could only be removed for cause. NLRC
affirmedwithonlyamodificationastothecomputationof
13thmonthpay.CAalsoaffirmed.

ISSUE:Whetherornotrespondentisaregularemployee

HELD:YES.Thetesttodeterminewhetheremploymentis
regular or not is the reasonable connection between the
particular activity performed by the employee in relation
totheusualbusinessortradeoftheemployer.Also,ifthe
employee has been performing the job for at least one
year,eveniftheperformanceisnotcontinuousormerely
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.(DeLeonvNLRC)
Whilelengthoftimemaynotbethecontrolling
testforprojectemployment,itisvitalindeterminingifthe
employeewashiredforaspecificundertakingortaskedto
perform functions vital, necessary and indispensable to
theusualbusinessortradeoftheemployer.Here,private
respondent had been a project employee several times
over. His employment ceased to be coterminous with
specific projects when he was repeatedly rehired due to
thedemandsofpetitionersbusiness.

Assailed Decision dated October 30, 2001 and

the Resolution dated February 28, 2002 of CA are
AFFIRMED with MODIFICATION. The petitioner id hereby
ORDERED to (1) reinstate the respondent with no loss of
seniority rights and other privileges; and (2) pay
th
respondent his backwages, 13 month pay for the year
1998andServiceIncentiveLeavePaycomputedfromthe
date of his illegal dismissal up to the date of his actual
reinstatement.
31
BRENTSCHOOLVZAMORA
181SCRA702,February5,1990

NARVASA,J.:

FACTS: Alegre was athletic director at Brent, at a yearly

compensation of P20,000. Her contract fixed a specific
term of 5 years for its existence, from July, 1971, to July,
1976. Subsequent subsidiary agreements in March 1973,
August 1973, and Sept. 1974 reiterated the same terms
and conditions, including the expiry date, as those
containedintheoriginalcontractofJuly,1971.

Three months before the expiration of the

stipulatedperiod,inApril1976,Alegrewasgivenacopyof
thereportfiledbyBrentwiththeDep.OfLaboradvisingof
theterminationofhisservices,effectiveJuly16,1976.The
stated ground for termination was completion of
contract, expiration of the definite period of
employment. Alegre protested the announced
termination of his employment. He argued that although
his contract did stipulate that the same would terminate
on July 17, 1976, since his services were necessary and
desirable in the usual business of his employer, and his
employmenthadlastedforfiveyears,hehadacquiredthe
status of regular employee and could not be removed
exceptforvalidcause.

Theemploymentcontractof1971wasexecuted
whentheLaborCodeofthePhilippineshadnotyetbeen
promulgated, which came into effect some 3 years after
theperfectionofthecontract.

ISSUE: Whether or not the provisions of the Labor Code

(regarding probationary/regular employees) have
anathematizedfixedperiodemploymentoremployment
23

24

foraterm.

HELD: NO. Before the Labor Code, there was no doubt

about the validity of term employment. It was impliedly
but clearly recognized by the Termination Pay law, RA
10521. The Civil Code, which has always recognized, and
continues to recognize, the validity and propriety of
contracts and obligations with a fixed or definite period,
andimposesnorestraintsonthefreedomofthepartiesto
fix the duration of a contract, whatever its object, be it
specie, goods or services, except the general admonition
againststipulationscontrarytolaw,morals,goodcustoms,
public order or public policy. Under the Civil Code,
therefore, and as a general proposition, fixed term
employment contracts are not limited, as they are under
thepresentLaborCode,tothosebynatureseasonalorfor
specificprojectswithpredetermineddatesofcompletion;
theyalsoincludethosetowhichthepartiesbyfreechoice
haveassignedaspecificdateoftermination.

Where from the circumstances it is apparent

thatperiodshavebeenimposedtoprecludeacquisitionof
tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals,
etc. But where no such intent to circumvent the law is
shown,wherethereasonforthelawdoesnotexist,e.g.,
whereitisindeedtheemployeehimselfwhoinsistsupon
a period or where the nature of the engagement is such
that, without being seasonal or for a specific project, a
definite date of termination is a sine qua non, would an
agreement fixing a period be essentially evil or illicit,
therefore anathema? Would such an agreement come
within the scope of Article 2802 which admittedly was
enacted"topreventthecircumventionoftherightofthe
employeetobesecuredin(his)employment?"

Article 280 of the Labor Code, under a narrow

andliteralinterpretationwouldappeartorestrict,without
reasonabledistinctions, therightofanemployeetofreely
stipulate with his employer the duration of his
engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law
must be given a reasonable interpretation, to preclude
absurdity in its application. Outlawing the whole concept
oftermemploymentandsubvertingtoboottheprinciple
of freedom of contract to remedy the evil of employer's

using it as a means to prevent their employees from

obtainingsecurityoftenureislikecuttingoffthenoseto
spite the face or, more relevantly, curing a headache by
loppingoffthehead.

Familiar examples of employment contracts

which may be neither for seasonal work nor for specific
projects, but to which a fixed term is essential: overseas
employment contracts to which, the concept of regular
employmentwillallthatitimpliesdoesnotappeareverto
have been applied, Article 280 of the Labor Code not
withstanding; appointments to the positions of dean,
assistant dean, college secretary, principal, and other
administrativeofficesineducationalinstitutions,whichare
by practice or tradition rotated among the faculty
members,andwherefixedtermsareanecessity,without
which no reasonable rotation would be possible. Despite
the provisions of Article 280,Policy, Instructions No. 8 of
the Minister of Labor implicitly recognize that certain
companyofficialsmaybeelectedforwhatwouldamount
to fixed periods, at the expiration of which they would
havetostanddown,inprovidingthattheseofficials,"...
may lose their jobs as president, executive vice president
or vicepresident, etc. because the stockholders or the
board of directors for one reason or another did not re
elect.

Since the entire purpose behind the

development of legislation culminating in the present
Article280oftheLaborCodeclearlyappearstohavebeen
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
refertothesubstantiveevilthattheCodeitselfhassingled
out: agreements entered into precisely to circumvent
security of tenure. It should have no application to
instanceswhereafixedperiodofemploymentwasagreed
uponknowinglyandvoluntarilybytheparties,withoutany
force,duressorimproperpressurebeingbroughttobear
upon the employee and absent any other circumstances
vitiatinghisconsent,orwhereitsatisfactorilyappearsthat
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

madeto apply to purposes other than those explicitly
stated by its framers; it thus becomes pointless and
arbitrary,unjustinitseffectsandapttoleadtoabsurdand
unintendedconsequences.

The public respondent's Decision complained of

isREVERSEDandSETASIDE.RespondentAlegre'scontract
of employment with Brent School having lawfully
terminated wit and by reason of the expiration of the
agreedtermofperiodthereof,heisdeclarednotentitled
to reinstatement and the other relief awarded and
confirmedonappealintheproceedingsbelow.

32
VIERNESvs.NLRC
G.R.No.108405,April4,2003

FACTSThe15complainantsserviceswerecontractedas
meter readers by Benguet Electric Cooperative (BENECO)
for less thana months duration from October 8 to 31,
1990. Their employment contracts, couched in identical
terms,read:YouareherebyappointedasMETERREADER
(APPRENTICE) under BENECONEA Management with
compensation at the rate of SIXTYSIX PESOS AND
SEVENTYFIVECENTAVOS(P66.75)perdayfromOctober08
to 31, 1990. The said term notwithstanding, the
complainants were allowed to work beyond October 31,
1990, or until January 2, 1991. On January 3, 1991, they
were each served their identical notices of termination
dated December 29, 1990. The same read: Please be
informed that effective at the close of office hours of
December 31, 1990, your services with the BENECO will
beterminated. Your termination has nothing to do with
your performance. Rather, it is because we have to
retrench on personnel as we are already overstaffed. The
complainants filed separate complaints for illegal
dismissal. It is the contention of the complainants that
they were not apprentices but regular employees whose
serviceswereillegallyandunjustlyterminatedinamanner
thatwaswhimsicalandcapricious.Ontheotherhand,the
respondent invokes Article 283 of the Labor Code in
defense of the questioned dismissal. The Labor Arbiter
dismissedthecomplaintsforillegaldismissalbutdirected
BENECOtoextendthecontractofeachcomplainant,with
theexceptionofVierneswhowasorderedtobeappointed
24

25

as regular employee, a months salary as indemnity for

failuretogivethe30daynotice,andbackwages.TheNLRC
declaredthecomplainantsdismissalillegal,thusordering
their reinstatement to their former position as meter
readers or to any equivalent position with payment of
backwages limited to one year but deleting the award of
indemnity and attorneys fees. The award of
underpaymentofwageswasaffirmed.

ISSUES
1.WONtheNLRCcommittedgraveabuseofdiscretionin
ordering the reinstatement of petitioners to their former
position as meter readers on probationary status in spite
ofitsfindingthattheyareregularemployeesunderArticle
280oftheLaborCode

2.WONtheNLRCcommittedgraveabuseofdiscretionin
limiting the backwages of petitioners to one year only in
spiteofitsfindingthattheywereillegallydismissed,which
is contrary to the mandate of full backwages until actual
reinstatementbutnottoexceed3years

3.WONtheNLRCcommittedgraveabuseofdiscretionin
deleting the award of indemnity pay which had become
final because it was not appealed and in deleting the
awardofattorneysfeesbecauseoftheabsenceofatrial
typehearing

4.WONthemandateofimmediatelyexecutoryontherein
statementaspectevenpendingappealasprovidedinthe
decisionofLaborArbitersequallyappliesinthedecisionof
theNLRCevenpendingappeal,bymeansofamotionfor
reconsideration of the order reinstating a dismissed
employeeor pending appeal because the case is elevated
oncertioraribeforetheSupremeCourt

HELD
1.YES.
There are two separate instances whereby it can be
determined that an employment is regular: (1) The
particularactivityperformedbytheemployeeisnecessary
ordesirableintheusualbusinessortradeoftheemployer;
or(2)iftheemployeehasbeenperformingthejobforat
leastayear.Petitionersfallunderthefirstcategory.They
were engaged to perform activities that are necessary to
the usual business of BENECO. We agree with the labor

arbiterspronouncementthatthejobofameterreaderis
necessary to the business of BENECO because unless a
meter reader records the electric consumption of the
subscribing public, there could not be avalid basis for
billing the customers. 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 BENECOs business. In
addition, during the preliminary hearing of the case on
February 4, 1991, BENECO even offered to enter into an
other temporary employment contract with petitioners.
This only proves BENECOs need for the services of the
petitioners. With the continuation of their employment
beyond the original term, petitioners have become full
fledged regular employees. The fact alone that the
petitionershaverenderedserviceforaperiodoflessthan
6 months does not make their employment status as
probationary.TheprincipleenunciatedinBrentSchoolvs.
Zamora 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 fixedanew.
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 BENECO is
thereby totally changed. Petitioners have attained the
statusofregularemployees.

2.YES
Art. 279 of the Labor Code, as amended by RA 6715,
providesthatanillegallydismissedemployeeisentitledto
fullback wages, inclusive of allowances, and to his other
benefitsortheirmonetaryequivalentcomputedfromthe
time his compensation was withheld from him up to the
time of his actual reinstatement. Since petitioners were
employed on October 8, 1990, the amended provision
shall apply to the present case pursuant to the rule on
prospectivity of laws. Hence, it was patently erroneous,
tantamounttograveabuseofdiscretiononthepartofthe
NLRC in limiting to one year the back wages awarded to
petitioners.

3.YES
An employer becomes liable to pay indemnity to an
employee who has been dismissed if, in effecting such
dismissal, the employer fails to comply with the
requirementsofdueprocess.Theindemnityisintheform
of nominal damages intended not to penalize the
employer but to vindicate or recognize the employees
righttoproceduraldueprocesswhichwasviolatedbythe
employer. Under Art. 2221 of the Civil Code, nominal
damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered by him. Indemnity is not incompatible with the
award of back wages. These two awards are based on
different considerations. Backwages are granted on
groundsofequitytoworkersforearningslostduetotheir
illegal dismissal from work. On the other hand,the award
ofindemnityismeanttovindicateorrecognizetherightof
an employee to due process which has been violated by
the employer. In this case, BENECO failed to comply with
the provisions of Article 283 of the Labor Code which
requires an employer to serve a notice of dismissal upon
the employeesand to the Department of Labor, at least
onemonthbeforetheintendeddateoftermination.Asto
the award of attorneysfees, the same is justified by the
provisionsofArticle111oftheLaborCode.

4.YES
Art. 223 of the Labor Code is plain and clear that the
decisionoftheNLRCshallbefinalandexecutoryafter10
calendar days from receipt by the parties. In addition,
Section2(b),RuleVIIIoftheNewRulesofProcedureofthe
NLRC provides that should there be amotion for
reconsideration entertained pursuant to Section 14, Rule
VIIoftheseRules,thedecisionshallbeexecutoryafter10
calendar days from receipt of the resolution on such
motion. We find nothing inconsistent or contradictory
between the two. The provision of the NLRC Rules of
Procedure merely provides for situations where a motion
forreconsiderationisfiled.SincetheRulesallowthefiling
ofamotionforreconsiderationofadecisionoftheNLRC,
it simply follows that the tenday period provided under
Article223oftheLaborCodeshouldbereckonedfromthe
date of receipt by the parties of the resolution on such
motion. In the case at bar, petitioners received the
25

26

resolution of the NLRC denying their motion for

reconsideration on October 22, 1992. Hence, it is on
November 2, 1992 that the questioned decision became
executory.
33
MAGCALASvs.NLRC
G.R.No100333,March13,1997

FACTS
Complainantsallegedthattheywereallregularemployees
of the respondent company, having rendered continuous
services in various capacities, ranging from leadman,
tinsmith, tradeshelper to general clerk. The complainants
haveworkedforanumberofyears,theminimumofwhich
was1.5yearsandthemaximumwas8yearsunderseveral
supervisors.On August 30, 1988, they were dismissed
without prior notice and investigation, and that their
dismissals were effected for no other cause than their
persistent demands for payment of money claims as
mandated by law. Respondent company averred that the
manufacturing aspect of its operation is handled by its
regularemployees,whiletheinstallationaspect,byreason
ofitsintermittence,iscarriedoutbyitsprojectorcontract
employees.The complainants herein were among the
contractemployeeshiredbytherespondenttoinstallthe
airconditioning equipment at the ADB and Interbank
projects. With the completion of their task in their
respective projects,the employment of the complainants
expiredastheyhadnomoreworktodo.TheLaborarbiter
ordered petitioners to be reinstated and to be paid
backwagesfromthetimeoftheirdismissal/terminationto
theiractualreinstatement.TheNLRCreverseddecisionand
orderedrespondenttopaythepetitionerstheirseparation
pay.

ISSUES
1. WON petitioners were regular workers under the
contemplationofArt.280oftheLaborCode.
2.WONpetitioners'terminationand/orcessationoftheir
employmentsonAugust30,1988werejustifiedunderthe
contemplationofArt.279oftheLaborCodeasamended.

HELD

1.YES
The services of project employees are coterminous with
the project and may be terminated upon the end or
completion of the project for which they were hired.
Regular employees, in contrast, are legally entitled to
remainintheserviceoftheiremployeruntilthatserviceis
terminatedbyoneoranotheroftherecognizedmodesof
termination of service under the Labor Code. A mere
provision in the CBA recognizing contract employment
does not sufficiently establish that petitioners were ipso
facto contractual or project employees. In the same vein,
theinvocationofPolicyNo.20governingtheemployment
of project employees in the construction industry does
not, by itself, automatically classify private respondent as
part of the construction industry and entitle it to dismiss
petitionersattheendofeachproject.Thesefactscannot
be presumed; they must be supported by substantial
evidence. The record discloses that the complainants
workednotonlyinonespecialprojectbutalsovariablyin
otherprojects/jobsitescontractedbyKoppelIncorporated.
Some of them, after their tour of duty on these different
jobsites were reassigned to the respondent's plant at
Koppel Compound, Paraaque, Metro Manila. A close
examinationoftherecordfurtherrevealsthatthe"special
projects" at the ADB and Interbank to which the
complainants were last assigned by the respondent were
still in operation before their alleged termination from
employment. Under these factual milieu, we believe that
they had been engaged to work and perform activities
whichwerenecessaryanddesirableintheairconditioning
and refrigeration installation/repair business of the
respondentemployer,especiallywhere,asinthiscase,the
very nature of such trade indicates that it can hardly fall
under the exception of Policy Instruction No 20 which
applies only to the construction industry. For this reason,
and considering the facts narrated in the complainants'
sworn statements were neither disputed nor refuted by
contraryevidencebytherespondent,itbecomesapparent
andincreasinglyclearthatindeedtheywouldandoughtto
be classified as regular employees. Regular employees
cannotatthesametimebeprojectemployees.Article280
oftheLaborCodestatesthatregularemployeesarethose
whoseworkisnecessaryordesirabletotheusualbusiness
oftheemployer.Thetwoexceptionsfollowingthegeneral
descriptionofregularemployeesrefertoeitherprojector
seasonalemployees.Intherealmofbusinessandindustry,

wenotethat"project"couldrefertooneortheotherofat
least two distinguishable types of activities. Firstly, a
projectcouldrefertoparticularjoborundertakingthatis
within the regular or usual business of the employer
company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the
company. Such job or undertaking begins and ends at
determined or determinable times. Employees who are
hired for the carrying out of one of these separate
projects, the scope and duration of which has been
determined and made known to the employees at the
time of employment, are properly treated as "project
employees,"andtheirservicesmaybelawfullyterminated
atcompletionoftheproject.Theemploymentofseasonal
employees, on the other hand, legally ends upon
completion of the project or the season. The
overwhelmingfactofpetitioners'continuousemployment
as found by the labor arbiter ineludibly shows that the
petitioners were regular employees. On the other hand,
we find that substantial evidence, applicable laws and
jurisprudence do not support the ruling in the assailed
Decision that petitioners were project employees. The
Court here reiterates the rule that all doubts,
uncertainties, ambiguities and insufficiencies should be
resolvedinfavoroflabor.Itisawellentrencheddoctrine
thatinillegaldismissalcases,theemployerhastheburden
of proof. This burden was not discharged in the present
case

.2.NO
Foradismissalofanemployeetobevalid,tworequisites
must be met: (1) the employee is afforded due process,
meaning he is given notice of the cause of his dismissal
and an adequate opportunity to be heard and to defend
himself; and (2) the dismissal is for a valid cause as
indicatedinArticle282oftheLaborCode.Theservicesof
petitionerswerepurportedlyterminatedattheendofthe
ADBandInterbankprojects,butthiscouldnothavebeena
validcausefor,asdiscussedabove,theywereregularand
not project employees. As a consequence of their illegal
termination,petitionersareentitledtoreinstatementand
backwages in accordance with the Labor Code. The
backwages however are to be computed only for three
years from the date of their dismissal, without deduction
or qualification. Where the illegal dismissal transpired
before the effectivity of RA 6715 (March 21, 1989), the
26

27

awardofbackwagesinfavorofthedismissedemployeesis
limitedtothreeyearswithoutdeductionorqualification
34
PHILIPPINETOBACCOvs.NLRC
G.R.No.127995,December10,1998

FACTS
This involves 2 groups of seasonal workers: Lubat group
and Luris group. They claimed separation benefits after
closure of processing plant and transfer of tobacco
operationstoIlocos.Petitionerrefusedtograntseparation
paytoLubatgroupbecausetheyhadnotbeengivenwork
during preceding year. It also refused to grant same to
Luris group because of closure due to serious business
losses.

ISSUES
1.WONtheLurisgrouphasbeenillegallydismissed
2.WONtheLubatgrouphasbeenillegallydismissed

HELD
1.YESSeriousbusinesslosseswerenotproven.Tojustify
retrenchment: (1) losses expected should be substantial
and not merely de minimis. (2) substantial loss must be
reasonably imminent. (3) retrenchment must be
reasonably necessary; employer should have taken other
measures, and (4) alleged losses must be proven by
sufficientandconvincingevidence.Here,weconsiderthe
factthatthepetitionerdidnotactuallycloseitsoperations
but merely transferred its processing and redrying
operations. It was also engaged in corn and rental
operations.Noticeoftermination,thoughissued,violated
theonemonthpriornoticerequisite.

2.YES
SEASONAL WORKERS WHO ARE CALLED 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
REEMPLOYED. The employeremployee relationship
between petitioner and Lubat group was not terminated
attheendof1993seaso
35
MANILAHOTELCOMPANYv.CIR(L18873)

FACTS:The Pines Hotel Employees Association filed a

petition praying, among other things, that its employees
who were working at the Pines Hotel be paid additional
compensation for overtime service rendered due to the
exigencies of the business, as well as additional
compensation for Sunday, legal holiday and nighttime
work.The Manila Hotel filed its answer denying the
material averments of the petition and alleging, among
others, that if overtime service was rendered the same
was not authorized but was rendered voluntarily, for the
employees were interested in the "tips" offered by the
patrons of the hotel.Presiding Judge Jose S. Bautista, to
whom the petition was assigned, after trial, rendered
judgmentstatingthattheemployeeswereentitledtothe
additional compensation demanded, including that for
overtime work, because an employee who renders
overtime service is entitled to compensation even if he
rendereditwithoutpriorauthority.

ISSUE:Whetherornotrespondentassociationisregarded
as a regular employee thereby entitled for additional
compensation.

HELD:AFFIRMATIVE.Whileitistruethatthe22employees
whoseclaimisobjectedtowerenotactuallyintheservice
at the time the instant petition was filed, they were
however, subsequently reemployed even while the
present incident was pending consideration by the trial
court. Moreover, it appears that the questioned
employees were never separated from the service. Their
statusisthatofregularseasonalemployeeswhoarecalled
toworkfromtimetotime,mostlyduringsummerseason.
Thenatureoftheirrelationshipwiththehotelissuchthat
duringoffseasontheyaretemporarilylaidoffbutduring
summer season they are reemployed, or when their
services may be needed. They are not strictly speaking
separated from the service but are merely considered as
on leave of absence without pay until they are re
employed.Theiremploymentrelationshipisneversevered
but only suspended. As such, these employees can be
consideredasintheregularemploymentofthehotel.

36

IndustrialCommercial
Agricultural
Organizationv.CIR,16SCRA562pauline

Workers

37
HACIENDABINOv.CUENCA(G.R.No.150478)
FACTS: Hacienda Bino is a 236hectare sugar plantation
representedinthiscasebyHortenciaL.Starke,ownerand
operator of the saidhacienda.The 76 individual
respondentswerepartoftheworkforceofHaciendaBino
consistingof220workers,performingvariousworks,such
as cultivation, planting of cane points, fertilization,
watering, weeding, harvesting, and loading of harvested
sugarcanes to cargo trucks. During the offmilling season,
petitionerStarkeissuedanOrderorNoticedeclaringthat
allthosewhosignedinfavorofCARPareexpressingtheir
desiretogetoutofemploymentontheirownvolitionand
that only those who did not sign for CARP will be given
employmentbyHda.Bino.Therespondentsregardedsuch
notice as a termination of their employment. As a
consequence, they filed a complaint for illegal dismissal,
th
wage differentials, 13 month pay, holiday pay and
premiumpayforholiday,serviceincentiveleavepay,and
moral and exemplary damages with the NLRC. Labor
[6]
Arbiter Ray Allan T. Drilon rendered a Decision, finding
that petitioner Starkes notice dated July 18, 1996 was
tantamounttoaterminationoftherespondentsservices,
and holding that the petitioner company was guilty of
illegaldismissal.
ISSUE: Whether or not sugar workers are regarded as
seasonal employees and their employment legally ends
uponcompletionoftheprojectortheseason.
HELD: The reliance of petitioner to Mercado case is
misleading.Inthiscase,thereisnoevidenceonrecordthat
the same particulars are present. The petitioners did not
presentanyevidencethattherespondentswererequired
to perform certain phases of agricultural work for a
definite period of time. Although the petitioners assert
that the respondents made their services available to the
27

28

neighboringhaciendas, the records do not, however,

support such assertion.The primary standard for
determining regular employment is the reasonable
connection between the particular activity performed by
theemployeeinrelationtotheusualtradeorbusinessof
theemployer.Thereisnodoubtthattherespondentswere
performing work necessary and desirable in the usual
trade or business of an employer. Hence, they can
properly be classified as regular employees.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 been employedonly for the duration of one
season.While the records sufficiently show that the
respondentsworkinthehaciendawasseasonalinnature,
therewas,however,noproofthattheywerehiredforthe
duration of one season only. In fact, the
payrolls,submitted in evidence by the petitioners, show
that they availed the services of the respondents since
1991. Absent any proof to the contrary, the general rule
of regular employment should, therefore, stand. It bears
stressingthattheemployerhastheburdenofprovingthe
lawfulnessofhisemployeesdismissal.
38
PoseidonFishingv.NationalLaborRelationsCommission

Petitioners:PoseidonFishing,DeJesus
Respondents: National Labor Relations Commission,
Estoquia

FACTS:
The respondent Estoquia was an employee of the
petitioner who was engaged in deep sea fishing. The
respondent was hired and rehired several times for
different positions (Chief Mate, Captain, Radio Operator)
over a period of 12 years. On 2000, the petitioner
dismissed the respondent from his position as Radio
Operatorforfailingtorecordacall.Therespondentfiled
suit for illegal dismissal. The Labor Arbiter ordered
reinstatement and payment of backwages. The NLRC
modified the ruling, ordering payment of backwages and
separation pay in lieu of reinstatement minus 6 months
worthofsalaryfortherespondentsnegligence.TheCourt
of Appeals affirmed the NLRCs decision. The petitioner

appealed, arguing that the respondent was a contractual

employee only, as the written contracts indicated that
employmentwasonapertripbasisonly.

ISSUE:
Whether or not the respondent was a contractual
employee

RULING:
NO.Therespondentwasaregularemployee.Article280
of the Labor Code which defines regular and contractual
employees must be construed to avoid circumvention of
the law to prevent tenurial security of the employee. As
stated in Brent School Inc. v. Zamora, if from the
circumstances it is apparent that the periods of
employment have been fixed to prevent an employee
from acquiring security of tenure, they must be
disregarded for being contrary to public policy. In the
case, the petitioners acts of hiring and rehiring the
respondentforvariouspositionsrevealedthenecessityfor
therespondentsservicesinthepetitionersbusiness.The
said acts were only schemes to prevent the respondent
fromacquiringsecurityoftenure.Thepetitionwasdenied
andtheNLRCsdecisionwasaffirmedwiththedeletionof
the 6month salary deduction as it was not warranted by
therespondentsminorfault.
39

because probationary employment was for a fixed

duration. The N.L.R.C. affirmed the ruling upon appeal.
The petitioner appealed to the S.C., arguing that the
respondent wasnot entitled tothe award as her services
could be terminated for just cause without the need to
exhaustthe6monthprobationaryperiod.

ISSUE:
Whetherornottherewasaneedtoexhaustthe6month
probationaryperiod

RULING:
NO. The term probationary only indicates the purpose
of employment, not its length. Article 281 of the Labor
Code provides that the employment of probationary
employees may be terminated for failure to meet the
reasonable standards of the employer. Probationary
employment gives the employer an opportunity to
determine whether or not an employee is qualified for
regularemployment.Therespondentwasfoundlackingin
the petitioners requirements for regular employment.
She could thus be dismissed and it was not necessary to
exhaust the 6month period. The respondent was not
entitled to salary for the unexpired period. This is in
keeping with the right of the employer to select who to
employ.
40

International Catholic Migration Commission v. National

LaborRelationsCommission

Petitioner:InternationalCatholicMigrationCommission
Respondent:NationalLaborRelationsCommission,Galang

FACTS:
Thepetitionerwasanonprofitorganizationthathiredthe
respondent Galang as a probationary cultural orientation
teacher.Threemonthsafter,thepetitionerinformedthe
respondent,orallyandinwriting,oftheterminationofher
employment. She was dismissed for failing to meet the
petitioners reasonable standards for employment as
reflected in the performance evaluation by her
supervisors.Therespondentsuedthepetitionerforillegal
dismissal. The Labor Arbiter did not find illegal dismissal
butorderedthepetitionertopaytherespondentssalary
for the unexpired 3 months of her probationary period

PhilemployServicesandResources,Inc.v.Rodriguez

Petitioner:PhilemployServicesandResources,Inc.
Respondent:Rodriguez

FACTS:
ThepetitionerdeployedtherespondenttoTaiwantowork
asadomestichelper.Beforedeployment,therespondent
was interviewed by the principal, apprising her of the
terms and conditions of employment. According to the
employment contract, the respondent was to work for 1
year after a 40day probationary period. After only 10
days,therespondentwasrepatriatedastheprincipalwas
not satisfied with her performance. However, the
respondentwasonlytoldthattherewasaproblem.The
respondentfiledanactionforillegaldismissalandsought
therecoveryofunearnedwagesfortheunexpiredperiod
of employmentaccording to the contract. The petitioner
28

29

defended that the respondents employment was

terminated during the probationary period for failure to
meetthereasonablestandardsoftheprincipalemployer.
TheLaborArbiterruledfortherespondent.Uponappeal,
the NLRC ruled for the petitioner. The Court of Appeals,
however, reversed the NLRC and reinstated the Labor
Arbitersdecision.

ISSUE:
Whetherornotthepetitionermaybeheldliableforillegal
dismissal

RULING:
NO. The petitioner could not be held liable for illegal
dismissal because the respondents employment was
terminated within the agreed upon 40day probationary
period.TheOmnibusRulesImplementingtheLaborCode
providethatprobationaryemploymentmaybeterminated
on the ground that the employee failed to meet the
reasonable standards for regular employment made
knownbytheemployertotheemployee.Inthecase,the
principalinterviewedandinformedtherespondentonthe
natureofherworkbeforedeployment.Heremployment
was terminated because her performance was
unsatisfactory. Thus, the respondent was not entitled to
unearnedwages.However,theSCorderedthepetitioner
topaynominaldamagesfornotservingwrittennoticeof
the termination of employment. Although non
compliancewiththenoticerequiredbylawdidnotrender
thedismissalineffectualorillegal,itconstitutedaviolation
oftheemployeesrighttoproceduraldueprocess.

41
delaCruzv.NLRC
418SCRA226
Facts:
OnMay 27, 1996, petitioner Florencio M. de la Cruz, Jr.
was hired by private respondent Shemberg Marketing
Corporation (Shemberg) as senior sales manager.
Shemberg was in the business of manufacturing, trading,
distributingandimportingvariousconsumerproducts.The
position of senior sales manager was then newly created
inlinewithShembergsobjectiveofproductpositioningin
the consumer market. Its duties included, among others,

the supervision and control of the sales force of the

company. The senior sales manager was also vested with
somediscretiontodecideonmatterswithinthescopeof
his functions, including the appointment of district sales
representativesandthereshufflingofsalesmentoachieve
sales targets. However, onSeptember 14, 1996,
Shembergs human resource department manager, Ms.
Lilybeth Y. Llanto, informed petitioner that the
management has decided to terminate his services and
when the latter asked the reason of his termination, Ms.
Llanto merely attributed it to the drop in company sales.
Petitioner requested to meet with the vicepresident of
Shemberg but he was refused because he was told the
decisionofthemanagementwasfinalandhisrequestfor
a30daywrittennoticewasdenied.Petitionerthenfileda
complaint of illegal dismissal but Shemberg said that the
former was dismissed for various reasons but ultimately
he was fired because of his failure to meet the required
companystandardsandforlossoftrustandconfidence.
Issue:
Whether or not petitioner was illegally dismissed by
Shemberg?
Held:
No. Petitioner was merely a probationary employee of
Shemberg, hence, he may be terminated any time,
permanent employment not having been attained in the
meantime. As long as the termination was made before
the expiration of the sixmonth probationary period, the
employerwaswellwithinhisrightstosevertheemployer
employee relationship. A contrary interpretation would
defecttheclearmeaningofthetermprobationary.Inthis
case,respondentShemberghadgoodreasontoterminate
petitionersemploymentandthatwashisdishonesty.The
possessionbyShembergoftheplaneticketsofpetitioners
wifeandchildclearlyshowsthatthesameweresubmitted
to management for reimbursement along with the other
transportationexpensesofpetitioner.Otherwise,thereis
no way Shemberg could have gotten hold of the same.
Petitioner opted not to explain why these plane tickets
were in the possession of Shemberg. His denials without
accompanying proof coupled with his silence on this
mattercannotbutbetakenagainsthim.

42

GrandMotorsPartsCorp.v.MinisterofLabor
G.R.No.L58958;July16,1984
Facts:
Private respondent Narciso Balicena Jr. was the branch
managerofpetitionersIloIlobranch.HewastheFinance
Officer of Warner, Barnes & Co. when allegedly Alfredo
Cisneros, Personnel Manager of petitioner, invited the
former to apply as the branch manager of the IloIlo
branch as the company was looking for a Certified Public
Accountant (CPA). Balicena applied and was accepted for
the position but he continued to with his position in
WarnerandonlyresignedonApril28,1980.However,he
onlyworkedwiththecompanyonlyforfourmonthsashe
was eventually terminated for various reasons. The
company asserts that Balicena was only a probationary
employee and that the latter knew that there was a
possibility that he would not get the job. On the other
hand,Balicenaclaimsthathewasaregularemployeeand
thatthereasonsgivenbythepetitionerwerenotenough
towarranthistermination.
Issue: Whether or not Balicena was a mere probationary
employeeofthepetitionerandwasheterminatedforjust
cause?
Held:
Yes. Balicena was not able to present any proof of his
appointment or employment as a regular employee and
he did not immediately resign from his previous
employmentashewantedtohaveabackupplanincase
he would not get the job with the petitioner. If indeed
Balicenawashiredasaregularemployee,hewouldhave
resigned from his former employment and his continued
staywithhisoldcompanyonlyshowsthathewasunsure
with the status of his employment with the petitioner.
Moreover, Balicenas claim that written contracts were
only given to rankandfile employees and not to
managerial ones is contrary to usual business practice.
Balicenas termination was for a just cause. Firstly, he
failedtosubmitmonthlyreportswhichareessentialtothe
29

30

businessofthepetitioner.Furthermore,Balicenahadnot
exerted effort to familiarize himself with his duties and
obligations because after working for a month with the
petitioner, he wrote them a letter asking what his duties
werethis despite the fact that he was given a brochure
containing his duties and obligations. Moreover, Balicena
cannot escape responsibility from the acts of his
subordinatesforthevehicularaccidenttowhichheclaims
he did not know and lastly he was not able to reach the
sales target set by the petitioner. In this case at bar, the
Supreme Court ruled that the dismissal was not arbitrary
astheprerogativeandjudgmenttohireemployeesunder
terms and conditions designed to achieve success in its
businessactivitiesbelongstomanagementwhichmaynot
beundulyimpaired,limitedorrestricted.
43
Escorpizov.UniversityofBaguio
306SCRA497
Facts:
Petitioner Esperanza Escorpizo was initially hired by
respondent on June 13, 1989 as a high school teacher.
Undertherulesoftherespondent,appointmenttoteach
duringthefirsttwoyearsattheuniversityisprobationary
in nature. During the probation period, the teacher is
observed and evaluated to determine his competency.
Attainmentofapermanentstatusbyafacultymemberis
conditioned upon compliance with certain requirements,
such as passing the professional board examination for
teachers(PBET).OnMarch18,1991,respondentinformed
petitioner that her employment was being terminated at
the end of the school semester in view of her failure to
pass the PBET. But before the start of the school year
19911992, Escorpizo reapplied and pleaded that she be
given another chance. She told the respondent that she
had just taken the PBET and hoped to pass it. As
Escorpizos appeal was favorably considered, she was
allowed to teach during the school year 19911992.
However,hercontinuedemploymentwasconditionedon
her passing the PBET. Unfortunately, Escorpizo failed
again.Undaunted,Escorpizotooktheexaminationathird
time in November 1991. At the end of the school year

19911992, respondent evaluated the teachers

performancetodeterminewhowouldbeinthelistforthe
next school year. Escorpizo, not having passed the PBET
yet, was not included. Much later, on June 8, 1992, the
resultsofthePBETwerereleasedandthistimeEscorpizo
passedsaidexamination.Nevertheless,onJune15,1992,
respondent university no longer renewed Escorpizos
contract of employment on the ground that she failed to
qualifyasaregularteacher.
Issue:
Whether or not petitioner was illegally dismissed by
respondent?
Held:
No. Petitioners contract with the respondent merely
expired.Petitionerwasmerelyaprobationaryemployeeof
therespondentduringheremploymentfrom19891992.A
probationary employee is one who, for a given period of
time, is being observed and evaluated to determine
whetherornotheisqualifiedforpermanentemployment.
A probationary appointment affords the employer an
opportunitytoobservetheskill,competenceandattitude
of a probationer. In order to be a regular employee with
therespondent,thefollowingmustconcur:1.)thefaculty
member must satisfactorily complete the probationary
period of four semesters or two years, within which his
performance shall be observed and evaluated for the
purpose ofdetermining his competency and fitness tobe
extended permanent status; and 2.) the faculty member
must pass the PBET or an equivalent civil service
examination. Petitioner has complied with the first
requirement but she has failed to satisfy the second
requirement. The fact that petitioner was rehired on a
temporary basis conditioned on her passing the PBET to
becomearegularemployeedoesnotipsofactmakehera
regularemployee.

44 Orient Express v NLRC (G.R. No. 113713, June 11,

1997)

Petitioner:OrientExpressPlacementPhilippines
Respondents:NLRC,POEA,andAntonioFlores
Ponente:Bellosillo,J.

Facts

PrivaterespondentFloreswashiredasacraneoperatorby
petitioner Orient Express in behalf of its foreign principal
Nadrico Saudi Limited. Flores was to work for 1 year,
subject to a 3month probationary status. However, after
only 3 months, he was terminated from work and was
repatriated to the Philippines for allegedly having a poor
work performance and an uncooperative work attitude.
Aggrieved,FloresfiledforacomplaintbeforethePOEAfor
beingterminatedfornovalidreason.POEAruledinfavor
of Flores, averring that Orient Express and Nadrico failed
to observe the provisions of the Labor Code wherein the
terminationofaprobationaryemployeemaybebasedon
failing to qualify to standards made known to him at the
timeofhisengagement.Itwasnotclearlyshownthatthe
reasonablestandardsofworkwereprescribedtoFloresby
his employer, hence it would not be possible for him to
adheretosuch.TheNLRCaffirmedthedecision,thusthis
petition.

Issue

Whether or not Flores was validly terminated as a

probationaryemployee

Held

NO. In blatant violation of Article 281 of the Labor Code,

the reasonable standards for evaluating the work
performanceofrespondentFloreswerenotmadeknown
to him during his recruitment in Manila. It was not
mentioned to him in any way that pending the results of
hisworkperformanceevaluationorforfailureofsuchthat
he would be working as a floorman, such job he was
forcedtotakeforfailingtoobtainthenecessarylicenseto
operate a crane. He was not informed of such standards,
30

31

except that he was under probation for 3 months. Such

denialofdueprocessamountedtoillegaldismissal.

45
MitsubishiMotorsvChryslerPhilsLaborUnion(G.R.No.
148738,June29,2004)

Petitioner:MitsubishiMotorsPhilsCorp
Respondents:ChryslerPhilsLaborUnion,andNelsonParas
Ponente:CallejoSr.,J.

Facts

Private respondent Paras was employed by petitioner

MMPCasamanufacturingtraineeonprobationarystatus
on May 27, 1996. After 6 months, his performance was
evaluatedbyhisimmediatesupervisorsandwasfoundto
be average and he was informed that he would be
regularized. However, upon review of the managers, his
performance was assessed as unsatisfactory, and a letter
of termination was received by him on November 26,
1996.Becauseofthis,he,togetherwithCPLU(asthelabor
unionforemployeesofMMPC)filedacomplaintforillegal
dismissal, averring that he received the letter 183 days
after the commencement of his employment, or 3 days
afterhissixthmonthatwork(onNovember23,1996),and
that his termination was allegedly due to a
misunderstandingbetweenthecompanyandhiswifewho
wasthepresidentoftheunion.Heclaimedthat,following
Article 282 of the Labor Code, he had become a regular
employeeafter6monthsofbeingunderprobation,hence
hecouldonlybeterminatedonjustandvalidcausesand
after due notice. MMPC, on the other hand, countered
that the 6month probationary period for Paras would
expireonNovember27,1996,andhavingissuedtheletter
on November 25, 1996, he did not become a regular
employee and his termination based on his poor job
performance was valid. The Voluntary Arbitrator ruled in
favor of MMPC, but the CA reversed the decision. Hence
thispetition.

Issue

Whether or not Paras was a regular employee of MMPC

whenhewasterminatedbyMMPC

Held

YES.FollowingArticle13oftheNewCivilCode,theCourt
agreedwiththerespondentsthatParasreceivedtheletter
of termination 183 days after the commencement of his
employment.FollowingArticles 281and282oftheLabor
Code,aprobationarystatusofanemployeecouldonlylast
for 6 months, and past that the employee becomes
regularized. In the case at hand, since Paras was
terminated 3 days after the end of his probationary
period, he could only be terminated upon valid and just
grounds and upon notice of such. His immediate
supervisorshadevaluatedhisperformanceasaverageand
qualified him for regularization, and the subsequent
review of the managers bore lesser weight as they were
unable to observe the performance of Paras very well
unlike the supervisors. There was no sufficient ground to
terminateParasasaregularemployeeinthiscase.

31

32

46
BuiservLeogardo(L63316,July31,1984)

Petitioners: Iluminada Ver Buiser, Ma. Cecilia RilloAcua,

andMa.MercedesIntengan
Respondents: Hon. Vicente Leogardo (Deputy Minister of
the Ministry of Labor and Employment), and General
TelephoneDirectory,Co.
Ponente:Guerrero,J.

Facts

Herein petitioners were hired by respondent General

Telephone as sales representatives tasked with soliciting
advertisements to be included in a telephone directory.
They entered into an Employment Contract (on
Probationary Status) which stipulated that such status
wouldlastfor18months
and that they could be
terminated from work without the necessity of giving
noticeofterminationor thepaymentofterminationpay.
Suchlengthof18monthswasjustifiedbythecompanyas
the period for which it would gauge the fitness of the
employeesbymeansofsalesquotasthattheymustmeet.
For failure to meet such sales quota, General Telephone
terminated the petitioners. In response, the petitioners
filed a complaint for illegal dismissal, claiming that under
Articles 282 and 283 of the Labor Code, probationary
status can only last up to 18 months and exceeding that,
those under such status will be regular employees. They
claimed that since 18month policy of the company
exceeded the 6month probationary period mentioned in
theCode,theybecameregularemployeesandcouldonly
be removed from work due to just and valid causes. The
Regional Director and herein respondent Deputy Minister
of the Ministry of Labor and Employment did not rule in
favorofthepetitioners,hencethepresentrecourse.

Issue

Whetherornotthepetitionersbecameregularemployees
past the 6month period given by Art.282 of the Labor
Code

Held

NO. The rule provided in Article 282 of the Labor Code

regarding the limitation of probationary status to only 6
monthsissubjecttotheexceptionofhavinganagreement
tothecontrarybetweenthecompanyandtheemployee.
In this case, it is expressly stipulated in the contract that
the probationary period for the petitioners was 18
months,asbynatureoftheworkofthecompany,ittook
that length of time to measure the efficacy of the
employees as the publication of the directories takes a
year. In this case, the petitioners retained their
probationary status even after the 6month period
provided by the Labor Code. Their termination was also
based on a just and valid cause for failure to meet the
sales quota needed for them to be considered as fit for
theirjobs.

47
HOLIDAYINNMANILAv.NLRC
G.R.No.109114;September14,1993

FACTS:
Private respondent Gervasio Rosaroso was
employedasaThirdEngineerwithNicolakisShipping,S.A.,
a foreign firm through its recruitment and manning
agency,petitionerSkippers.Theemploymentcontractwas
fortheperiodofoneyearbeginningJuly10,1997witha
salary of $800 per month and other benefits. Rosaroso
boarded M/V Naval Gent on July 15, 1997. He was
however ordered to disembark in Bulgaria on August 7,
1997andrepatriatedtothePhilippines.Soonafterarrival
inManila,respondentfiledacomplaintforillegaldismissal
and monetary claims. The Labor Arbiter found the
respondent was in fact illegally dismissed and issued an
order directing petitioner Skippers to pay Rosaroso
separation pay of $2,4000 or the equivalent of P100,000,
representing three months pay and unpaid salary for
seven days of $186.69 or the equivalent of P7,840.98.
AtorneysfeesofP5,000wasalsoawarded.TheNLRCand
the CA affirmed en toto the ruling of the Arbiter. Hence
thisappealtotheSC.

ISSUE:

Whether or not private respondent Rosaroso was illegal

dismissed?

HELD:
YES. The employer of Rosaroso did not provide
the quantum of evidence needed to prove that dismissal
was in fact for cause. The evidence presented was just a
telefax coming from the alleged Chief Engineer of the
vesselwhichtheArbiteruptotheCAconsideredasmere
hearsay.WhiletheMasterofthevesselwasgratedunder
Paragraph D of Section 17 of the Philippine Overseas
employmentAdministration(POEA)StandardEmployment
condition governing the employment of Filipino Seafarers
on Board Ocean Going Vessels the power to dismiss for
justcausewithoutfurnishingtheseafarerwithanoticeof
dismissal if doing so will prejudice the safety of the crew
andthevessel,theSCnotedthatthecompletereporton
the circumstances of the dismissal was not forwarded to
the manning agency as called for under the same
provision.
The award of backwages and separation pay in
lieuofreinstatementasprovidedforinArticle279ofthe
LaborCodeisnotapplicableinthiscase.TheSeafarerisa
contractual employee whose rights and obligations are
governed by the POEA Employment Contract and by RA
8042 (1995). The Employment contract does not provide
fortheawardofseparationorterminationpay.However,
underSection10ofRA8042theawardofmoneyclaimsin
cases of illegal dismissal is allowed. Under this provision,
an illegal dismissed seafarer is entitled to indemnity
equivalent to his salary for the unexpired term of his
employment contract or three months for every year of
theunexpiredterm,whicheverisless.
TheawardbytheArbiterofthepesoequivalent
of the dollar awards cannot be enforced as the same is
contrarytolaw.Thepesoequivalentmustbecomputedat
the exchange rate computed at the time of payment as
providedforbyRA8183.

48
Bernardoetalv.NLRC&FEBTC
G.R.No.122917;July12,1999
FACTS:
32

33

The43Complainantsaredeafmuteswhowerehired
on various periods from 1988 to 1993 by respondent Far
East Bank and Trust Co. as Money Sorters and Counters
through a uniformly worded agreement called
"Employment Contract for Handicapped Workers". Their
employmentswererenewedeverysixmonthssuchthatby
the time this case arose, there were 56 deafmutes who
wereemployedbyrespondentunderthesaidemployment
agreement.
Disclaiming that complainants were regular
employees,respondentFarEastBankandTrustCompany
maintained, among others, that complainants who are a
specialclassofworkers,thehearingimpairedemployees,
were hired temporarily under special employment
arrangement which was a result of overtures made by
some civic and political personalities to the respondent
Bank.

ISSUES:
(1) Whetherornotthepetitionersmoneysorters
and counters working in a bank are not
regularemployees?
(2) Whether or not the provisions of the Magna
Carta for the Disabled (Republic Act No. 7277),
on proscription against discrimination against
disabledpersonsisapplicable?

HELD:
(1)NO. Thetestwhetheranemployeeisregularwaslaid
downinDeLeonvs.NLRC:
The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation
totheusualtradeorbusinessoftheemployer.Thetestis
whethertheformerisusuallynecessaryordesirableinthe
usual business or trade of the employer. The connection
canbedeterminedbyconsideringthenatureofthework
performedanditsrelationtotheschemeoftheparticular
business or trade in itsentirety. Also if the employee has
beenperformingthejobforatleastoneyear,evenifthe
performance is not continuous and merely intermittent,
the law deems repeated and continuing need for its
performance as sufficient evident of the necessity if not
indispensabilityofthatactivitytothebusiness.Hence,the

employment is considered regular, but only with respect

tosuchactivity,andwhilesuchactivityexists.
Without a doubt, the task of counting and
sorting bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen of them,
petitioners performed these tasks for more than six
months. Thus, 27 of the petitioners should be deemed
regularemployees

(2) YES. The Magna Carta for Disabled Persons mandates

thatqualifieddisabledpersonsbegrantedthesameterms
and conditions of employment as qualified ablebodied
employees.Oncetheyhaveattainedthestatusofregular
workers,theyshouldbeaccordedallthebenefitsgranted
bylaw,notwithstandingwrittenorverbalcontractstothe
contrary.Thistreatmentisrootednotmerelyoncharityor
accommodation,butonjusticeforall.
The fact that the employees were qualified
disabled persons necessarily removes the employment
contractsfromtheambitofArt.80.SincetheMagnaCarta
accords them the rights of qualified ablebodied persons,
theyarethuscoveredbyArt.280.

The noble objectives of Magna Carta for

Disabled Persons are not based merely on charity or
accommodation,butonjusticeandtheequaltreatmentof
qualifiedpersons,disabledornot.

49
ALCIRAv.NLRC
G.R.No.149859;June9,2004

FACTS:
Alcira was hired by Middleby as an engineering
support services supervisor on a probationary basis for 6
months. Apparently unhappy with Alciras performance,
thecompanyterminatedAlcirasservices.Theissuearises
on whether the termination occurred before or after the
6month probationary period. Alcira insists that he was
hired on May 20, 1996 while Middleby maintains that
AlcirawashiredonMay27,1996.Theappointmentpaper
indicated that the status was probationary (6months)
and a remark that after 5 months, performance shall be
evaluated and any adjustment shall depend on work
performance.

On November 20, 1996, Alcira was not allowed

to work; allegedly by withholding of his time card by a
seniorofficer.AlcirathenfiledacomplaintwiththeLabor
Arbiter, contending that he was already a regular
employee as ofthe date he was dismissed. He computed
the6monthsprobationaryperiodas30daysx6months=
180 days, thus coming to the conclusion that the period
th
endedonthe180 dayafterthedayofemployment.The
company and its officers, private respondents, presented
evidence that showed Alciras poor performance,
tardiness, absences, and violations of company rules on
wearing of uniform during the probationary period, and
said that since he failed to meet the standards, Alciras
applicationtobecomearegularemployeewasdenied.LA,
NLRC,andCAallruledinfavorofthecompany,upholding
thevalidityofthedismissal.
Centraltothematterathandisart.281ofLaborCode:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary
employment shall not exceed six (6) months from the
datetheemployeestartedworking,unless itiscovered
by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been
engagedonaprobationarybasismaybeterminatedfor
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
timeofhisengagement.Anemployeewhoisallowedto
work after a probationary period shall be considered a
regularemployee.

ISSUES:
1.Whetherornotpetitionerwasallowedtoworkbeyond
his probationary period, and was therefore already a
regularemployeeatthetimeofhisdismissal?
2. Whether or not Middleby informed petitioner of
standards for regularization at the start of his
employment?
3. Whether or not Alcira was illegally dismissed when
Middlebyoptednottorenewhiscontractonthelastday
oftheprobationaryperiod?

HELD:
1. NO. The computation of the 6month probationary
periodisreckonedfromthedateofappointmentuptothe
same calendar date of the 6th month following, thus
33

34

dismissal on November 20, 1996 was well within the

probationaryperiod.
The computation of Alcira (using 30 days x 6
months = 180 days) is wrong. As held in CALS Poultry
Supply Corp v Roco: (O)ur computation of the 6month
probationary period is reckoned from the date of
appointment up to the same calendar date of the 6th
monthfollowing.
Since the number of days in each particular
month was irrelevant, Alcira was still a probationary
employee when Middleby opted not to "regularize" him
onNovember20,1996.

2. YES. An employer is deemed to substantially comply

withtheruleonnotificationofstandardsifheapprisesthe
employee that he will be subjected to a performance
evaluationonaparticulardateafterhishiring.
Middlebysubstantiallynotifiedthepetitionerof
thestandardsofaregularemployeewhenitapprisedhim,
atthestartofhisemployment,thatitwouldevaluatehis
supervisoryskillsafter5months.
That the appointment paper contained the remark that
Alcira would be subjected to a performance evaluation is
enough notice that the probationary basis of his
employment was conditional (conditioned upon his
meetingofperformancestandards)

3. NO. Although probationary employees are also

accorded security of tenure, this protection ends upon
expirationoftheprobationaryperiod.
Itissettledthatevenifprobationaryemployees
do not enjoy permanent status, they are accorded the
constitutionalprotectionofsecurityoftenure.Thismeans
theymayonlybeterminatedforjustcauseorwhenthey
otherwise fail to qualify as regular employees in
accordance with reasonable standards made known to
thembytheemployeratthetimeoftheirengagement.
But we have also ruled in Manlimos, et. al. vs.
National Labor Relations Commission that this
constitutional protection ends on the expiration of the
probationaryperiod.Onthatdate,thepartiesarefreeto
eitherreneworterminatetheircontractofemployment.
Inthiscase,Middlebyexerciseditsoptionnotto
renewthecontractwhenitinformedAlciraonthelastday
of his probationary employment that it did not intend to
granthimaregularstatus.

couldnothavebeenlawfullydismissedforfailuretomeet
companystandardsasaprobationaryworker.

50

ISSUE

G.R.No.74246January26,1989

WON Article 282 of the Labor Code notwithstanding,

probationary employment may validly be extended
beyond the prescribed sixmonth period by agreement of
theemployerandtheemployee.

MARIWASA MANUFACTURING, INC., and ANGEL T.

DAZO,petitioners,
vs.
HON.VICENTELEOGARDO,JR.,inhiscapacityasDeputy
MinisterofMinistryofLaborandEmploymentjudgment,
andJOAQUINA.DEQUILA,respondents
NARVASA,J.:
FACTS
Private respondent Joaquin A. Dequila was hired on
probationbypetitionerMariwasaManufacturing,Inc.asa
general utility worker on January 10, 1979. Upon the
expiration of the probationary period of six months,
Dequila was informed by his employer that his work had
provedunsatisfactoryandhadfailedtomeettherequired
standards. To give him a chance to improve his
performance and qualify for regular employment, instead
of dispensing with his service then and there, with his
written consent Mariwasa extended his probation period
foranotherthreemonthsfromJuly10toOctober9,1979.
His performance, however, did not improve and on that
accountMariwasaterminatedhisemploymentattheend
oftheextendedperiod.
Dequilafiledacomplaintforillegaldismissalandviolation
ofPresidential DecreesNos.928and1389.Hiscomplaint
was dismissed after hearing by Director of the Ministry's
NationalCapitalRegion,whoruledthattheterminationof
Dequila's employment was in the circumstances justified
and rejected his money claims for insufficiency of
evidence.On appeal to the Office of the Minister, said
disposition was reversed. Respondent Deputy Minister
Vicente Leogardo, Jr. held that Dequila was already a
regular employee at the time of his dismissal, therefore,

HELD
YES.InBusiervLeogradoJr,theexceptiontothegeneral
rule of probationary period of 6 months is when the
parties to an employment contract may agree otherwise,
such as when the same is established by company policy
orwhenthesameisrequiredbythenatureofworktobe
performedbytheemployee.
TheextensionofDequila'sprobationwasexgratia,anact
of liberality on the part of his employer affording him a
secondchancetomakegoodafterhavinginitiallyfailedto
provehisworthasanemployee.Suchanactcannotnow
unjustly be turned against said employer's account to
compelittokeeponitspayrollonewhocouldnotperform
accordingtoitsworkstandards.Thelaw,surely,wasnever
meanttoproducesuchaninequitableresult.
Byvoluntarilyagreeingtoanextensionoftheprobationary
period, Dequila in effect waived any benefit attaching to
thecompletionofsaidperiodifhestillfailedtomakethe
grade during the period of extension. The Court finds
nothing in the law which by any fair interpretation
prohibits such a waiver. And no public policy protecting
the employee and the security of his tenure is served by
prescribing voluntary agreements which, by reasonably
extending the period of probation, actually improve and
further a probationary employee's prospects of
demonstratinghisfitnessforregularemployment.
WHEREFORE,thepetitionisgranted.Privaterespondent's
complaint against petitioners for illegal dismissal and
violationofPresidentialDecrees928and1389isdismissed
forlackofmerit.
34

35

51

HELD:

G.R.No.L54285December8,1988

NO. Private respondents could not be considered

probationary employees because they were already well
trained in their respective functions. This conclusion is
further bolstered by the factual findings of the Labor
MinisterthatsaidorderoftheDirectorwassupportedby
substantialevidence.AsstressedbytheSolicitorGeneral,
while private respondents were still with the CCAS they
werealreadyclerks.RespondentGelighadbeenaclerkfor
CCAS for more than ten (10) years, while respondent
Quijano had slightly less than ten (10) years of service.
They were, therefore, not novices in their jobs but
experiencedworkers.

CEBU
STEVEDORING
CO.,
INC.,petitioner,
vs.
THE HONORABLE REGIONAL DIRECTOR/MINISTER OF
LABOR, ARSENIO GELIG and MARIA LUZ QUIJANO,
respondents.
FACTS:
Private respondents Arsenio Gelig and Maria Luz Quijano
were former employees of the Cebu Customs Arrastre
Service(hereinafterreferredtoasCCAS).OnMay2,1977,
theCCASwasabolished"forthereasonthattheobjectives
forwhichitwascreatedhadalreadybeenattained".Asa
consequenceofsuchabolition,alltheemployeesofCCAS,
including herein respondents, were given their
termination and/or separation pay by the Bureau of
Customs,CebuCity,computeduptoApril30,1977.
On May 1, 1977, all the employees of CCAS including
herein private respondents, were absorbed by petitioner
Cebu Stevedoring Co. Inc. (CSCI), with the same positions
that they held in the CCAS. Eventually, however, on
October17,1977,privaterespondentsweredismissedby
petitionerwithout prior clearance, allegedly for
redundancy.
Petitioners allege that respondents Gelig and Quijano are
casual employees and as such, they can be terminated
withinthe6monthperiodwithoutneedofclearancefrom
the Ministry of Labor and neither is the employer
obligated to pay them termination pay and that
redundancy is one of the grounds under the Labor Code
justifyingterminationofemployees
ISSUE:
WON private respondents were considered
probationaryemployeesandwerevalidlydismissed.

as

As regular employees, private respondents may not be

dismissed and petitioner cannot terminate their services
exceptforajustorauthorizedcauseprovidedbylawand
withscrupulousobservanceofdueprocessrequirements.
TheconstitutionaldutyoftheStatetoprotecttherightof
laborers to security of tenure demands that an employer
may be permitted to terminate the services of an
employeeonlyunderconditionsallowedbyandwithdue
process of law. Under the circumstances obtaining in this
case, the irresistible conclusion is that the termination of
private respondents' services was unjust and illegal, as to
justify their reinstatement and entitlement to backwages
forthreeyears.
WHEREFORE,thispetitionisherebyDISMISSED.

****Article 283 of the Labor Code provides that an

"employer may also terminate the employment of any
employee due to the installation of laborsaving devices,
redundancy,retrenchmenttopreventlossesortheclosing
or cessation of operation of the establishment or
undertaking."However,therecordsfailtoestablishclearly
and convincingly that the positions occupied by private
respondents are Identical with those presently existing in
petitioner'soffice.

Petitioner kept private respondents in its employ for

almost six months without raising this issue. It does not
mention which positions are allegedly duplicated by the
positions held by private respondents. It does not even
explainwhytheprivaterespondentsshouldbetheonesto
beterminated,withoutregardtothecomparativelengths
ofservice,qualificationsandperformanceofallemployees
concerned.

52
G.R.No.107320January19,2000
A' PRIME SECURITY SERVICES, INC.,petitioner,vs.
NATIONAL LABOR RELATIONS COMMISSION (Second
Division),HON.ARBITERVALENTINGUANIO,andOTHELLO
MORENO,respondents.
PURISIMA,J.:
On February 23, 1989, private respondent Othello C.
Moreno filed a complaint with the Department of Labor
and Employment, Arbitration Branch, National Capital
Region, against the petitioner, A' Prime Security Agency,
Inc., for illegal dismissal, illegal deduction, and
underpaymentofwages.
The complaint alleged, among others, that Moreno had
been working as a security guard for a year with the
Sugarland Security Services, Inc., a sister company of
petitioner; that he was rehired as a security guard on
January 30, 1988 by the petitioner and assigned to the
same post at the U.S. Embassy Building along Roxas
Boulevard,Manila;thathewasamongthoseabsorbedby
the petitioner when it took over thesecurity contracts of
its sister company, Sugarland Security Services, Inc., with
theU.S.Embassy;thathewasforcedbypetitionertosign
new probationary contracts of employment for six (6)
months; that on August 1, 1988, his employment was
terminated; that during his employment, the amount of
P20.00permonthwasdeductedfromhissalaryallegedly
for withholding tax, although no withholding tax receipt
wasgiventohim,andthesalaryhewasreceivingwasonly
P2,187.00 a month, which was way below the P2,410.17
stipulatedinthePADPAOmemorandumofagreement.
Petitioner alleged that the private respondent was hired
on January 30, 1988, on a probationary basis, and he
35

36

signed an authority to deduct from his salary any

reimbursement for any loss or damage caused to
properties of the client; that he was given a copy of
petitioner's rules and regulations which provide that
sleepingonpostispunishablebywarning,suspensionand
dismissalandhewascaughtsleepingonpostonMarch17,
1988;thatonMarch25,1988,hefiguredinaquarrelwith
anothersecurityguard,whichresultedinanearshootout;
that at the end of his probationary employment, he was
given a psychological test and on the basis of the
foregoing, petitioner told him that his probationary
employment had come to an end as he did not pass the
companystandardandtherefore,hecouldnotbehiredas
aregularemployee.
ISSUE:
WON private respondent is a probationary employee of
petitioner
HELD:
NO. The Court holds that private respondent became a
regularemployeeuponcompletionofhissixmonthperiod
ofprobation.HestartedworkingonJanuary30,1988and
completed the said period of probation on July 27, 1988.
Thus, at the time private respondent was dismissed on
August1,1988,hewasalreadyaregularemployeewitha
security of tenure. He could only be dismissed for a just
andauthorizedcause.
There is no basis for subjecting private respondent to a
new probationary or temporary employment on January
30, 1988, considering that he was already a regular
employee when he was absorbed by A' Prime from
Sugarland,itssistercompany.

*** Respondents employment with APrime was just a

continuationof hisemploymentwithSugarlandSecurity
TheCourtcannotsanctionthepracticeofsomecompanies
which, shortly after a workerhas become a regular
employee, effects the transfer of the same employee to
anotherentitywhoseownersarethesame,oridentical,in
order to deprive subject employee ofthe benefits and
protectionheisentitledtounderthelaw.Theallegations
thatSugarlandisasistercompanyofAPrimeandandthe
latterabsorbedthesecuritycontractsandsecurityguards
of Sugarland with the U.S. Embassy were neither denied
nor controverted by the petitioner before the Labor
Arbiter.

*** Respondent was illegally dismissed. The infractions

made by private respondent were not punishable by
dismissal according to Circular No. 1 of A Prime Security
Services governing discipline, suspension and separation
fromtheserviceofsecurityguards.
SECTIONVIIISLEEPINGONPOST
Any Security/Lady guard who is found sleeping
whileonpostshallbepunishedasfollows:
1stOffenseWarning
2nd Offense 30 days suspension
withoutpay
3rdOffenseDismissal

SECTION IX CHALLENGING A POSTED

SECURITY/LADYGUARDANDSUPERIORS
Any Security/Lady guard who challenges,
assaults,provokesandinsultsanofficiallyposted
Security/Ladyguardshallbepunished:
1st Offense One (1) month
suspension
2ndOffenseDismissal

Premises studiedly viewed in correct perspective, the

Court is of the irresistible finding and conclusion that the
dismissal of private respondent, a regular employee, was
sansanyjust,legalandvalidbasis.

WHEREFORE,thepetitionisDISMISSED

53
G.R.No.127241

September
28,
2001
LA CONSOLACION COLLEGE, SR. ROSALINDA BAYLA, SR.
CELIABAYONA,REODITAMABAYAG,JUDITHVERDADERO
and JOSE BAYOGUING,petitioners,vs. NATIONAL LABOR
RELATIONS COMMISSION and JOSE DE LA PEA,
III,respondents.

PARDO,J.:

FACTS: La Consolacion College (LCC) initially employed

Jose de la Pea III as a CAT Commandant and YCAP
Coordinatorforschoolyear19751976.Hisemploymentas
YCAP coordinator lasted until 1979, after which he
resigned. He severed all ties with LCC when he left in
1980.PriortohisresignationanddespitedemandsbyLCC
forhimtosubmitasyllabuscontainingcourseobjectives,
subject matter, content, concepts, skills, activities and
evaluation,respondentdelaPeafailedtocomply.

On 2 December 1991, LCC received an application from

respondentdelaPea.Theapplicantrequestedthathebe
considered for the positions of CAT Commander and YDT
Instructor,positionsheheldforeleven(11)yearspriorto
his resignation from LCC. However, LCC appointed
respondent de la Pea as a classroom teacher in physical
educationandhealth,apositionheneverheldduringhis
previousemploymentwithLCC,forone(1)academicyear
evidencedinthewrittencontractbetweentheparties.

DuringhistenurerespondentdelaPeawithoutanyvalid
reason defied the schools requirements and procedures
despite reminders by the academic evaluator, petitioner
Bayoguinginwritingtocomplywiththerequirementsand
standard operating procedure of said school. The
relationshipbetweendelaPeaandBayoguingcontinued
to go downhill and which escalated into a confrontation
initiatedbytheformer.

Upontheterminationofhisoneyearcontractrespondent
sought for reinstatement which was however denied by
herein petitioners because of de la Peas unsatisfactory
performance.

ISSUE: WhetherornotrespondentJosedelaPeawas
a regular or permanent employee of La Consolacion
College.

HELD: In the case at bar, there is a written contract

defining the period of employment of respondent de la
Pea.Clearly,theemploymentwasnotpermanentbutfor
aspecifieddurationofoneschoolyear.ItistheManualof
RegulationsforPrivateSchools,nottheLaborCode,which
isapplicable.ThiswassettledinUniversityofSto.Tomasv.
NLRC,whereweruledthatforaprivateschoolteacherto
acquire permanent status in employment the following
36

37

requisites must concur: (1) the teacher is a fulltime

teacher; (2) the teacher must have rendered three (3)
consecutive years of service; and (3) such service must
have been satisfactory. It is also important to note that
respondent de la Pea was a new hire having previously
resignedfrom the school andwas holding the position of
classroom teacher for BED for the first time. Respondent
never denied the fact that he failed to comply with the
requirements of the school, hence, his employment was
notrenewed.Neitherdidheattainpermanentstatus.

54
PEOPLEVPANIS
142SCRA664
CRUZ;July11,1986

NATURE
APPEAL by certiorari to review the orders of the CFI
ZambalesandOlongapo,byJudgePanis

FACTS
Serapio Abug was charged w/ illegal recruitment for
operating a private feecharging employment agency by
chargingfeesandexpensesandpromisingemploymentin
SaudiArabiatofourseparateindividualsw/oalicense.
Abug filed a motion to quash on the ground that the
informations did not charge an offense because he was
accused of illegally recruiting only one person in each of
the four informations. Under the proviso in Article 13(b),
he claimed, there would be illegal recruitment only
"whenever two or more persons are in any manner
promised or offered any employment for a fee." The
motionwasgrantedbythetrialcourt.
Private respondent: to constitute recruitment and
placement, all the acts mentioned in Article 13(b) should
involve dealings with two or more persons as an
indispensablerequirement.
Petitioner: the requirement of two or more persons is
imposed only where the recruitment and placement
consists of an offer or promise of employment to such
persons and always in consideration of a fee. The other
actsmentionedinthebodyofthearticlemayinvolveeven
onlyonepersonandarenotnecessarilyforprofit.

ISSUE
WhichisthecorrectinterpretationofArticle13(b)ofP.D.
442
HELD
NEITHER
The number of persons dealt with is not an essential
ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in
Article 13(b) will constitute recruitment and placement
even if only one prospective worker is involved. The
provisomerelylaysdownaruleofevidencethatwherea
fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the
individualorentitydealingwiththemshallbedeemedto
beengagedintheactofrecruitmentandplacement.
Theprovisowasintendedneithertoimposeacondition
onthebasicrulenortoprovideanexceptiontheretobut
merely to create a presumption. The presumption is that
the individual or entity is engaged in recruitment and
placementwheneverheoritisdealingwithtwoormore
persons to whom, in consideration of a fee, an offer or
promise of employment is made in the course of the
"canvassing, enlisting, contracting, transporting, utilizing,
hiringorprocuring(of)workers."

55
PEOPLEVSAULO
344SCRA605
GONZAGAREYES;November15,2000

FACTS
Romulo Saulo, together with Amelia and Clodualo de la
Cruz,werechargedwithviolationofA38oftheLaborCode
forillegalrecruitmentinlargescale.
From April to May 1990, the three accused falsely
represented themelves to have the capacity to contract,
enlist and recruit workers for employment abroad. They
promisedjobplacementstoMaullon,MaligayaandJavier
without first securing the required license or authority
fromDOLE.Inaddition,thethreewerealsochargedwith
threecountsofestafa.
Maligaya had learned from a relative of Saulo that the
latter was recruiting workers for Taiwan. He, along with
Maullon and Javier, went to visit Saulo in Saulos San

Francisco del Monte home. Saulo told Maligaya that she

couldleaveforTaiwanassoonasshepaidthefeesforthe
processingofdocuments.
Saulo pleaded not guilty to the charges against him.
Amelia and Clodualdo still remain at large. Saulo was
eventuallyfoundguiltyofthreecountsofestafaandillegal
recruitment.

PetitionersClaim:
>MaligayapaidP35,000evidencedbyareceiptdatedMay
21,1990.Javierwasalsotoldtopaythesameamountbut
shegaveaninitialamountofP20,000.Shedidnotaskfor
areceiptsinceshetrustedSaulo.Maullowastoldtopay
P30,000 as processing fee for work in Taiwan. Maullon
made an initial payment of P7,900 to Saulos wife who
issued him a receipt in turn. Maullon then made an
additionalpaymentofP6,800inthepresenceofAmeliade
la Cruz and another payment of P15,700 to Tumalig, a
friendofSaulo,whoalsoissuedhimanotherreceipt.
> In all three instances, Saulo failed to deliver what he
promised. The prosecution also presented a certification
dated July 26, 1994 which stated that Saulo was not
authorized by the POEA to recruit workers for overseas
employment.
RespondentsComments:
>Saulointerposesforhisdefenseaclaimthathewasalso
applying for work abrad through Amelia de la Cruz which
led him to meet the three complainants. They were all
theretofollowuptheirapplicationsandthathewasalso
deceivedbyAmelia.
> He denied beingan overseas recruiter nor an agent for
one. He also denies receiving the abovementioned
amountsfromcomplainants.
> He could not have committed the crime because
testimonyfromaPOEAemployeeshowedthatlicensesfor
recruitment are issued only to corporations and not to
naturalpersons.

ISSUE
WONtheappealofaccusedshouldbegivenmerit

HELD
NO
RatioRecruitmentundertheLaborCodereferstoanyact
ofcanvassing,enlisting,contracting,transporting,utilizing,
hiringorprocuringworkersandincludesreferrals,contract
37

38

services, promising or advertising for employment locally

or abroad, whether for profit or not; Provided, that any
person or entity in which, in any manner, offers or
promises for a fee employment to two or more persons
shallbedeemedengagedinrecruitmentandplacement.
Reasoning
The essential elements of illegal recruitment in large
scaleareasfollows:
(a) the accused engages in the recruitment and
placementofworkersasdefinedunderArt.13(b)orin
any of the enumerated prohibitions in Art. 31 of the
LaborCode
(b) the accused has not complied with the guidelines
issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or
an authority to recruit and deploy workers whether
locallyoroverseas
(c) accused commits the same against three more
personsindividuallyorasagroup.
Saulo proferred inadequate evidence to prove his
innocence. Even if Saulo did not sign all the receipts
presented by the complainants, it does not weaken the
caseinanyway.Apersonchargedwithillegalrecruitment
maybeconvictedonthestrengthofthetestimoniesofthe
complainants,iffoundtobecredibleandconvincing.
Ontheargumentthatlicensesforrecruitmentareissued
only to corporations, the Labor Code states that any
personorentitywhich,inanymanner,offersorpromises
for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement. A
nonlicensee or nonholder of authority is a person,
corporation or entity which has not been issued a valid
license or authority to engage in recruitment and
placement by the Secretary of Labor or whose license or
recoveryhasbeensuspended,revokedorcancelledbythe
POEA.Agentsorrepresentativesappointedbyalicensee
oraholderofauthoritybutwhoseappointmentswerenot
previously recognized by the POEA fall within the
definitionstatedabove.
DispositionJudgmentaffirmed.

56
PEOPLEVBULIE
404SCRA105

AZCUNA;June17,2003

NATURE
Appealbycertiorari

FACTS
Complainants (8 in number) went to the house of
appellantBulieinBaguioCityuponlearningthatshewas
recruiting workers for overseas employment. Bulie
confirmedthatshewasrecruitingworkersforTaiwanand
althoughshedidnothavealicenseofherown,herbossin
Manila(JosefinaAlolino)wasalicensedrecruiter.
Bulietoldcomplaintstosubmittherequirementstoher
which she in turn will submit to her boss who was in
charge of processing the documents. Complainants
complied with the requirements and paid the
downpayment.
BuliebroughtthecomplainantstothespousesAlolinos
house in Las Pinas to follow up their applications where
theywereassuredbythespousesthattheywerelicensed
torecruitsOCWsandthattheycandeployworkerswithin
twotothreemonths.
After months of waiting, complainants were not
deployed abroad as promised by appellants. Hence they
went to the POEA in Baguio to find out whether or not
appellants are licensed recruiters. When they learned
otherwise, they filed a complaint with the POEACAR and
eightseparateinformationsforestafawiththeBaguioCity
Prosecutor.
During trial, Bulie testified that she was tasked to find
jobapplicantswhomshecanrefertoRSIthroughJosefina.
She would be paid for each referral. When Bulie asked
Josefina had a license, Josefina answered in the
affirmative.Buliepresented,Mrs.NonetteVillanueva,the
unit coordinator of POEACAR to testify that RSI was a
licensed employment agency and that Josefina was a
licensedrecruiteratthetimethatBuliehaddealingswith
hercoappellant.
Mrs. Villanueva clarified that licenses of permits to
recruitworkersareterritorialinnaturesothatanagency
licensed in Manila can only engage in recruitment
activitieswithintheplacespecifiedinthelicensealthough
theapplicantsmaybenonresidentsofMetroManila.
JosefinahoweverdeniedthatBuliewasanagentofMrs.
Fe Go, another Marketing Director for RSI. Josefina said
she accepted referrals from Bulie even though the latter

was not her agent or connected with RSI because their

agencyacceptsreferralsfromeveryone.
The trial court found Bulie and Josefina guilty of illegal
recruitmentinalargescaleandestafa.Hencethispetition.

ISSUE
1. WON appellants are guilty of illegal recruitment in a
largescale
2.WONappellantsareguiltyofestafa

HELD
1.YES
Ratio The essential elements of the crime of illegal
recruitment in large scale are (1) the accused engages in
acts of recruitment and placement of workers defined
under Article 13(b) or in any prohibited activities under
Article 34 of the Labor Code; (2) the accused has not
complied with the guidelines issued by the Secretary of
Labor and Employment, particularly with respect to the
securingofalicenseoranauthoritytorecruitanddeploy
workers, either locally or overseas; and (3) the accused
commitstheunlawfulactsagainstthreeormorepersons,
individually or as a group. When illegal recruitment is
committed in large scale or when it is committed by a
syndicate, it is considered as an offense involving
economicsabotage.
Reasoning
When complainants approached Bulie, she gave the
impressionthatshehadtheabilitytosendworkersabroad
by saying that although she did not have a license, her
bossdid.
There is no showing that complainants ever set foot in
the RSI office. They were always brought to the house of
thespousesAlolinoinLasPinas.
Josefinas acts clearly show that she and Bulie acted in
concert towards the accomplishment of a common
felonious purpose which was to recruit workers for
overseasemploymenteventhoughtheyhadnolicenseto
doso.
There is nothing on record to corroborate Josefinas
claim that as Marketing Director she was authorized to
solicit applicants for overseas placement through
advertisements,referrals,walkins,etc.
Josefina,despitethesuspensionandexpirationoftheRSI
license, continued to engage in recruitment activities for
overseasemployment.
38

39

Licensed agencies are prohibited from conducting any

provincialrecruitment,jobfairsorrecruitmentactivitiesof
any form outside of the address stated in the license,
acknowledged branch or extension office, without
securingpriorauthorityfromthePOEA.
2.YES
Ratio It is settled that a person convicted of illegal
recruitmentundertheLaborCodecanalsobeconvictedof
violation of the Revised Penal Code provisions on estafa
providedthattheelementsofthecrimearepresent.
Reasoning
The elements of estafa are: (1) the accused defrauded
anotherbyabuseofconfidenceorbymeansofdeceit,and
(2) that damage or prejudice capable of pecuniary
estimationiscausedtotheoffendedpartyorthirdperson.
Appellants deceived complainants into believing that
they had the authority and capability to send them to
Taiwan for employment. On the strength of such
assurance, complainants parted with their money in
paymentoftheplacementfees.
DispositionAFFIRMED

57
Peoplev.Ordono,335SCRA331ana
58
Peoplev.Sagayaga,423SCRA468pian

59
Peoplev.Baytic,398SCRA18pian

60
Peoplev.Dujua,422SCRA169pian

61
Peoplevs.Reyes
242SCRA264MENDOZA;March9,1995

FACTS
AppellantThelmaReyeswaschargedtog
e t h e r w i t h h e r husband Nick Reyes, but the
latte r was at large and so has remained up to
now. The trial p roceeded only with respect
toThelmaReyesinviewofherpleaofnotguilty.

Evidenceshowthatsometimein1985,th
efivevictimsindividuallywenttothehou
s e o f a p p e l l a n t i n L o s B a o s , Laguna, to apply
for employment abroad. They were required to
submittraveldocuments
passports,
birth
certificates , NBI clearan ces, etc. Theypaidvarious
amounts of money to Nick Reyes for recruitment fees,
placementfees,etc.NickReyeshandedmoneytohiswife
ThelmaReyesandafterwardissuedareceipt.

Nick Reyes allegedly promised to notify them as soon as

they were accepted foremploymen tsothat
they could leave for abroad, but this promise
was notfulf illed.Whenth ey later checked with
the POEA, th ey found out that the spou ses were
notlicensedrecruiters.

As soonas they obtained thePOEA certification that

appellant and her husband were not licensed to recruit,
they demanded from the spouses the return of their
moneyandwhenthelatterdidnotgivebacktheirmoney,
theyfiledthecomplaintinthiscase.

ThelmaReyesdefenseisthatofde
n i a l . B u t o n c r o s s examination she admitted
that there were fourteen other cases of Illegal
Recruitment filed and/or pending against her and her
husband in different courts of Manila and claimed that
someofthecaseshadbeendismissedorsettledaftershe
hadrefundedthemoneyofthecomplainants.

ThelowercourtfoundThelmaReyesguiltyandsentenced
herasstatedabove.Hencethisappeal.

ISSUES
1. WON the evidence for the prosecution is
sufficienttowarrantconviction
2. WON the verbal testimonies of private
complainants should be given more cred it

3.

than the documentary evidence for th e

accused
WON two complainan ts will suffice for
conviction of illega l recruitment in large
scale

HELD

1.YES.Anaccusedcanbeconvictedonthestrengthofthe
testimonyof a single witness, if such testimony is
credib le and positive and producesa conviction
beyond reasonable doubt.That the witness is also the
complainantinacasemakeslittledifferencesolongasthe
courtisconvincedbeyonddoubtthatthewitnessistelling
the truth.In determining the value and credibility of
evidence, witnesses are to be weighed, not counted
(Peoplev.Villalobos,209SCRA304[1992]).

When the issue isthe credibility of witnesses, appellate

courts will in general not disturb the findings of the trial
courtunlesscertainfactsorcircumstancesofweighthave
been overlooked, misunderstood or misapplied which, if
considered,mightaffecttheresultofthecase.

2.YES. E v i d e n c e s h o w s t h a t a f t e r r e c e i v i n g
theamountsfromcomplainants,NickRey
e s h a n d e d t h e m o n e y p a i d t o t h e appellant
and that Nick Reyes issued the receipts in question only
afterappellantThelmaReyeshadcountedit.Mereclaimis
not enough to overcome the evidence of the
prosecution. Ifthere was anyone whose testimony
neededcorroborationitwasappellant.

Thefactthatthepurposeforwhichpaymentwasmadeis
not stated in the receipts nor why the receipts purport
tohave been issued in "Manila" and n ot in Los
Baos where they sa id they had made all the
payments is something to be explained not by the
complainantswhohaveanelementaryeducationonly,but
by appellant and her husband because it was
the latter wh o made the receipts. It is not far
fetched
that
the y
made
the
receiptsthiswaypreciselytocreate
d o u b t a s t o t h e i r r e a l import.

3.NO
39

40

Labor
Code
provisions: A r t . 3 8 ( b ) : I l l e g a l r e c r u i t m
e n t w h e n c o m m i t t e d b y a syndicate or
in large scale shall be considered an
offensei n v o l v i n g e c o n o m i c s a b o t a g e a n d s
h a l l b e p e n a l i z e d i n accordance with Article 39
hereof.Art. 39(a): The penalty of life imprisonment and a
fine of One Hundre dTho usand Pe sos (P100,000)
shall be imposed ofillegal recruitment constitutes
economicsabotageasdefinedherein.

The informa tion agains t appellant m entioned

only two complainana ts Fabian Baradas and
Rosalino Bitang as having been illegally
recru ited by appellan t a nd her husband. The
tria l cou rt, however, held appellant guilty of
illegal recruitment on a large scale because
aside from Baradas and Bitang, appellant and
herhusbandallegedly recruitedothe rs.

When the LaborCode speaks of illegal recruitment

"committedagainstthree(3)ormorepersonsindividually
or as a group," it must be understood as referring to the
number of complainants in each case who are
complainants therein, otherwise, prosecutions for single
crimes of illegal recruitment can be cumulated to make
out a case of large scale illegal recruitment. In other
words,aconvictionforlargescaleillegalrecruitmentmust
bebasedonafindingineachcaseofillegalrecruitmentof
threeormorepersonswhetherindividuallyorasagroup.

EvenifBlanzaandGarciahadbeenillegallyrecruitedsoas
tomakethenumberofpersonsillegallyrecruitedfourand
make the crime that of illegal recru itment of a
large sca le, this cannot be the basis of conviction
sincethiswasnotallegedintheinformation.

Appellant mu st be punished under Art. 39(c) of

the Labor Code: Any person who is n either a
licensee nor a holder of authority under this Title
found violating any provision thereofor its implementing
rulesandregulationsshalluponconvictionthereof,suffer
thepenaltyofimprisonmentofnotlessthanfoury e a r s
normorethaneight yearsor afineof
n o t l e s s t h a n P20,000 nor more than P100,000

or both such imprisonm ent and fine, at the

discretionofthecourt.

62
Peoplevs.Meris
329SCRA33KAPUNAN;March28,2000

FACTS
During the p eriod comprised between January
12, 1991 a nd February 17, 1991, accused
conspiring an d confedera ting with th ree others
defrauded Napoleon Ram os by means of false
manifestations and frau dulent repre sentation
which they made to Na poleon Ramos to the
effect tha t th ey had the p ower and the capacity
to recruit and employ him as factory worke r in
Hongkong and could facilitate the processing of
pertinent pa pers if g iven the necessary amount
tomeetthe requirements.

TheysucceededininducingsaidRamostogiveanddeliver
the amount of P3 0,0 00.0 0 on the strength of
said manifes tations and representations. The
accused ob ta ined 30K , with in tent to defraud,
and unlawfully misapprop riated the money for
personaluse.

TheseventhinformationinCriminalCas
eNo.9194198
chargedaccu sed
appellant withillegal recruitment inla rge scale .
Meris for a fee recruited and promise d
employment abroad to Leo D. delos Santos,
Merlita L. Bombarda, Margarita R. Madae,
Purita A. Con ceja, Cristina I. Nava andNapoleon
E. Ramos without first securing the require d
licenseorauthorityof Departmentof La bor.

Testifying in her own defense, accusedappellant denied

the charges of engaging in recruitment activities and of
receiving money from compla ina nts. She
described he rself as a public schoolteacherlivingin
Pangasinan with her four children and unemployed

husband.Liketheothercomplainants,sheclaimedshewasa
victimofJulieMicua.Whencomplainantslearnedthatshehadapplied
foroverseasemployment,theysoughtherhelpin going
to the agency whe re sh e applied. Hence, on
January 12, 1991, accusedappellant accompanied the
complainantstosee Julie Micua who assured them
that they would be leaving for Hongkong
with intwoorthree mon th s. Accuseda ppellant
claims she never represented herself as having the
capacity
to
deployworkersabroad.She
o n l y t o l d t h e m t h a t s h e c o u l d accompany them
totheagencywhereshealsoapplied.

ISSUE
WON Meris is guilty of the charges of estafa and illegal
recruitment

HELD
Yes.Sheisguiltyofestafaandwidescaleillegalrecruitment.

Reasoning
All the complainants are one in saying that accused
appellant made representations that she knew someone
who could help them secure employment in Hongkong.
Relying on these representations, they applied for
placementforemploymentabroadandpaidvarioussums
of money therefor. Unfortunately, accused failed to
comply with her promise of employment or restitute the
amountsshereceivedfromthem.

The prosecution undoubtedly proved that accused

appellant, without license or authority, engaged in
recruitment and placement activities. This was done in
collaboration with Julie Micua, when they promised
complainantsemploymentinHongkong.

Art.13,par.(b)oftheLaborCode
d e f i n e s recruitment and placement as "any act of
canvassing enlisting, contracting, transporting, utilizing,
hiring
or
procuring
workers,
andincludesreferrals,contractse
r v i c e s , p r o m i s i n g o r advertising
for
employment,locallyorabroad, whetherforprofitornot;
Provided that anyperson or entity which, in anymanner,
40

41

offers or promises for a fee employment to two or more

personsshallbedeemedengagedinrecruitmentandplacement."

Althoughaccused
appellantwasnotanemployeeofthe
alleged illegal recruiter Julie Micua, the evidence show
that she was the one who approached complainants and
proddedthemtoseekemploymentabroad.Itwasthrough
her that they metJulia Micua. This is clearly an act
ofreferral.

Illegal recruitment is conducted in a large scale if

perpetrated against three (3) or more persons
indiv idually or as a group.Thiscrimerequiresproof
that the accused: (1) engaged in the recruitment and
placementofworkersdefinedunderArticle13or in any
of the prohib ited activities under Article 34 of
the Labor Code; (2) does not have a license or authority
to lawfully engage in the recruitm ent and
placement
of
worke rs;
and
(3 )
committedtheinfractionagainstthreeo
r m o r e p e r s o n s , individuallyorasagroup.Allthese
threeessentialelementsarepresentinthecase.

63
Peoplevs.Fortuna
395SCRA354VITUG;January16,2003

FACTS
Private comp lainan ts met Dom inga Fortuna y
Corra les in a seminar on "Tupperware" products
beingthen promoted for sale in Cabanatuan City.
Fortuna offered the complainants job placements in
Taiwan. Conv inced that F ortuna could actually
providethemwithjobsabroad,privatecomplainantseach
gave her the amount of P5,400.00 to take care of the
processing fee for medical examination and other
expensesforsecuringtheirirrespectivepassports.Private
complainants took the medical examination in Manila.
Weeks went by but the promised departure had not
materialized. Suspecting that something was not right,
they finally demanded that Fortuna return their money.
Fortuna, in the meanwhile, went into hiding. After
having learned that Fortuna had neither a license nor an
authority to undertake recruiting activities, Angelyn

Magpayo filed a complaint which, in due time, ultimately

resulted in the indictment of Fortuna for illegal
recruitment. During the preliminary investigation, as well
as later at the trial, Fortuna gave assurance to have the
money received from private complainants returned to
thembutFortunawasunabletomakegoodherpromise.

ISSUE
WON the lower court erred in finding petitioner guilty of
IllegalRecruitmentinLargeScale

HELD
NO

Ratio
The rule has been said that a person charged with illegal
recruitment may be convicted on the strength of the
testimonyofthecomplainants,iffoundtobecredibleand
convincing,
and
thatthe
absence
ofreceiptstoevidencepaymenttothe
recruiterwouldnotwarrantanacquittal.

Reasoning

The requisites constituting the offense of Illegal

Recruitment in Large Scale have sufficiently been
provenbytheprosecution.
First, a p p e l l a n t , u n d e n i a b l y , h a s n o t b e e n
d u l y l i c e n s e d t o engageinrecruitmentactivities;
second,
she
has
engaged
inillega lrecruitmentactivities,offering private
compla inants employmentabroadforafee;and
third, she has committed the questioned illegal
recruitment activities against three or more persons. The
pertinentprovisionsofRA8042state:
SEC.6.Definition.illegalrecruitmentshallmeanany
act of canvassing, enlisting, contracting,transporting,
utilizing, hiring, or procuring workers and includes
referring,contractofservices,promisingoradvertisingfor
employment
abroad w h e n u n d e r t a k e n b y a n o n
l i c e n s e o r n o n h o l d e r o f authority
contemplatedxxxxxxxxx.
Illegal recruitment is deemed committed in large scale
ifcommittedagainstthree(3)ormorepersonsindividually
orasagroup.

64Peoplev.Corpuz,412SCRA479ferrer
65
Peoplev.Guttierez,422SCRA32ferrer

66
G&M(Phil.)Inc.v.Batomalaque,461SCRA111ferrer

67
Phil.EmployServicesandResourcesInc.v.Paramio
Facts: Respondents Paramio and 5 others (Navarra,
Sarmiento, Guillermo, Bautista, Curameng) applied for an
employment in Taiwan for with Petitioner Phil. Employ
Services and Resources Inc., (PSRI) which domestic
corporation engaged in the recruitment and deployment
of Filipino Workers Overseas. Their applications were
processed and they paid 19,000 as placement fee. The
respondents were then deployed in Taiwan on different
dates, with free food and accommodation.

Afterorientationwiththeiremployer,theyweretoldthat
theyweretoworkupto9p.m.andtheywereevenmore
disappointed when they arrived at the quarters, and saw
thattheyhadnobeddings,pillowsandblankets.Theyalso
encountered several problems. The respondents brought
theproblemtotheattentionofthemanagementbutthe
local manager of petitioner PSRI cautioned the
respondents not to air their complaints. Disappointed,
they contacted Overseas Workers Welfare Administration
(OWWA) but their request was also not favorably acted
upon.

SometimeinMay1997,Navarrawassummonedtogether
withanotheremployeeandtheyweretoldthattheywere
repatriated. Upon arrival in Manila, Navarra sought to
settle the complaints and the petitioner agreed to pay
49,000 but in consideration thereof, they executed a
quitclaimreleasingthepetitionerfromanyliabilityforhis
41

42

repatriation.

When the other respondents learned that Navarra and

Gabito were repatriated, they decided to go home, but
their employer told them that even though they were
scheduledtoberepatriatedtwodayslater,theycouldnot
gohomeiftheywouldnotpaytheiremployerNT$30,000.
Havingfailedtodoso,theywerenotabletoreturntothe
Philippines.
The respondents were given two options, imprisonment
forfailuretopaysaidamountorsignseparateagreements
withtheiremployer.Therespondentshadnochoicebutto
choose the latter, which allowed the employer to deduct
NT$30,000fromtheirsalaries,deductanotherNT$10,000
as bond and remit their salaries to the Philippines.
However, the respondents were still not repatriated and
their
work
conditioned
worsened.

Paramiogotsick,butwasstillmadetoreporttowork.He
was made to carry a container weighing around 30
kilograms.Duetohiscondition,thecontainerslippedfrom
hishandsandheinjuredhisthumbandwasbroughttothe
hospital. Instead of giving him financial assistance, his
employer told him to just go back to the Philippines to
recuperate. An official from the Taiwanese Labor
Department had intervened and his employer was told
that it had no right to repatriate the respondent because
the accident which caused the injury happened while the
latterwasatwork.Paramiodidnotreportthenextdayfor
workasperdoctorsordersandhewassurprisedwhenhe
saw his paycheck and that the employer deducted
NT$4,300 from his salary, representing his plane ticket
back to the Philippines. He then returned to work and
enduredthepaininhis thumb.Whenhecould nolonger
bear the pain in his thumb, he took a break. When the
manager saw him resting, he was ordered to return to
work.RespondentParamiorefusedandcontendedthathe
could not resume work because of his thumb injury.
Incensed, the manager told him that he had to stop
workingandwouldjusthavetowaitforhisplaneticketfor
his repatriation. The respondent did as he was told. The
other respondents decided to go home, and on October
22, 1997, respondents Sarmiento, Guillermo, Curameng,
Jr. and Bautista, together with respondents Paramio and
Navarra, filed separate complaints before the NLRC
Arbitration Branch against Bayani Fontanilla for illegal

dismissal, nonpayment of overtime pay, refund of

placement fee, tax refund, refund of plane fares,
attorneysfeesandlitigationexpenses
Issues:
1.Whetherornot,thepetitionerswereillegallydismissed
when they repatriated by their Taiwan employees.
2.Whetherornot,Navarrasrepatriationandexecutionof
quitclaimandreceiptofP49,000sufficienttoconcludehis
waiverofrightagainstillegaldismissal.

Ruling:

1. Yes. Respondents dismissal was not based on just,

valid and legal grounds. As such, the rule lex loci
contractus(thelawoftheplacewherethecontractis
made) governs. Therefore, the Labor Code, its
implementing rules and regulations, and
other laws affecting labor, apply in this case.
In order to effect a valid dismissal of an
employee, the law requires that there be just
and valid cause asprovided in Article 282and
that the employee was afforded an
opportunity to be heard and to defend
himself.Dismissal may also be based on any of the
authorizedcausesprovidedforinArticles283and284
of the Labor Code. The petitioner failed to
substantiate its claim that respondent
Navarra's repatriation was based on a valid,
legal and just cause. The petitioner merely
alleged that it was made clear to respondent
Navarra that his repatriation was due to the fight he
had with his supervisor. It is not necessary
thattherebe anexpress termination ofone's
services before acase ofillegaldismissal can
exist. Inthe landmark case ofPhilippine
Japan Active Carbon Corporation vs.National
Labor RelationsCommission,etal(171SCRA164)the
SupremeCourtruledthat"aconstructivedischargeis
definedas:
"Aquitting
because
continuedemployment
isrenderedimpossible,
unreasonableor
unlikely:" In the case at bar, the petitioners
were made to suffer unbearable conditions in
the workplace and the inhuman treatment of their
employer until they were left with no choice but to
quit. Thus, it cannot be said that the

resignation and repatriation of complainants

Curameng, Bautista, Sarmiento and Guillermo was
voluntary.

2. We rule that the deed of release executed by

respondent Navarra did not completely release the
petitioner from its liability on the latter's claim. As a
rule, quitclaims, waivers or releases are looked upon
with disfavor and are commonly frowned upon as
contrary to public policy and ineffective to bar claims
forthemeasureofaworker'slegalrights.If(a)thereis
clear proof that the waiver was wangled from an
unsuspectingorgullibleperson;or(b)thetermsofthe
settlement are unconscionable, and on their face
invalid,suchquitclaimsmustbestruckdownasinvalid
or illegal. The records reveal that respondent Navarra
executed a deed of release and waiver for and in
consideration of only P49,000.There is no evidence
that he was informed that he was entitled to much
morethanthesaidamount,includingarefundforthe
placementfeehepaidtothepetitioner.Withregardto
the deed of quitclaim and acceptance, it is a well
settledprinciplethatthelawdoesnotconsiderasvalid
any agreement to receive less compensation than
what a worker is entitled to recover nor prevent him
from demanding benefits to which he is entitled.
Quitclaimsexecutedareineffectivetobarrecoveryfor
thefullmeasureoftheworker'srights.Thereasonwhy
quitclaimsarecommonlyfrowneduponascontraryto
public policy and they are ineffective to bar claims
forthe full measure ofthe worker's legal rights is
because the employer andemployeedo not stand
onthe
samefooting,suchthatquitclaims
usuallytaketheformofcontractsofadherence,notof
choice. Assuming arguendo that the quitclaim was
executed voluntarily, still, it cannot diminish
petitioner's entitlement to the full compensation
provided in their contract. At the most, such amount
canbeconsideredanadvanceonhisclaim

68
PlacewellInternationalServicesv.Camote
Facts: On August 15, 1999, petitioner Placewell
International Services Corporation (PISC) deployed
respondent Camote to work as building carpenter for
42

43

SAADTradingandContractingCo.(SAAD)attheKingdom
ofSaudiArabia(KSA)foracontractdurationoftwoyears,
with a corresponding salary of US$370.00 per month.
Respondentwasallegedlyfoundtobeincompetentsothe
foreign employer decided to terminate his services.
Camote pleaded for his retention and consented for a
lowersalaryuntilhisreturntothePhilippines.

OnNovember2001,respondentfiledasworncomplainfor
monetary claims against petitioner and alleged that they
weremadetosignacontractwritteninArabic underthe
constraint of losing their job if they refused; that for the
entire duration of the new contract, he received only SR
590.00permonth;thathewasnotgivenhisovertimepay
despiterenderingninehoursofworkeveryday.

On May 2002, the labor arbiter rendered a decision

holdingthatthemodificationofrespondentsemployment
contract is not allowed under Section 10 of Republic Act
No. 8042 (R.A. No. 8042), thus, he should have received
the original contracted salary of US$370.00 per month
instead of the new rate given by SAAD. The labor arbiter
also found that there is no differential as far as
respondents overtime pay is concerned considering that
he was given overtime pay based on the new rate of SR
800.00. Since respondent rendered one hour of overtime
work per day for only 18 months, and not the entire 24
months as claimed, the total overtime pay he received is
more or less equivalent to the amount he ought to have
received if the original contracted rate of US$370.00 was
used.

On appeal, the NLRC set aside the decision of the Labor

Arbiter, dismissing the case for lack of causer of action.
Aggrieved, respondent then filed a petition for certiorari
before the Court of Appeals, which set aside the
ResolutionoftheNLRC,andreinstatedwithmodifications
theDecisionofthelaborarbiterHence,thispetition.

Issue:WhetherornottherewasviolationofSection10of
RepublicActNo.8042(R.A.No.8042),whichprohibitsthe
modification of an employment contract; and whether or
notthenewcontractsignedbyrespondentwasvoluntarily
agreeduponbytheparties.

Ruling: R.A. No. 8042 explicitly prohibits the substitution

or alteration to the prejudice of the worker, of

employment contracts already approved and verified by
the Department of Labor and Employment (DOLE) from
thetimeofactualsigningthereofbythepartiesuptoand
includingtheperiodoftheexpirationofthesamewithout
9
the approval of the DOLE. Thus, we held inChavez v.
10
BontoPerez that the subsequently executed side
agreement of an overseas contract worker with her
foreign employer which reduced her salary below the
amountapprovedbythePOEAisvoidbecauseitisagainst
our existing laws, morals and public policy. The said side
agreement cannot supersede her standard employment
contractapprovedbythePOEA.11
Applying the same rule in the case at bar, the
unauthorized alteration in the employment contract of
respondent, particularly the diminution in his salary from
US$370.00 to SR 800.00 per month, is void for violating
the POEAapproved contract which set the minimum
standards,terms,andconditionsofhisemployment.
Moreover, we find that there was no proper dismissal of
respondentbySAAD;the"termination"ofrespondentwas
clearly a ploy to pressure him to agree to a lower wage
rate for continued employment. Thus, the original POEA
approved employment contract of respondent subsists
despite the socalled new agreement with SAAD.
Consequently,thesolidaryliabilityofpetitionerwithSAAD
for respondents money claims continues in accordance
withSection10ofR.A.8042.

finance group but the same was disapproved by the

Controller. Meanwhile, the standard cost accounting
systemwasinstalledandusedattheRaytheonplantsand
subsidiariesworldwide.Asaconsequence,theservicesof
a Cost Accounting Manager allegedly entailed only the
submission of periodic reports that would use
computerized forms. On January 1989, petitioner was
summonedbyhisimmediatebossandinthepresenceof
IRD Manager, Mr. Rolando Estrada, he was told of the
abolitionofhispositiononthegroundofredundancy.He
pleaded with the management but the management told
him that the decision was final. Thus, he filed for illegal
dismissalbeforetheArbitrationBranchoftheDepartment
ofLaborandEmployment.

The labor arbiter ruled in favor of petitioner, saying that

Almodiels termination on the ground of redundancy was
highly irregular and without legal and factual basis.
Raytheon appealed therefrom on the grounds that the
Labor Arbiter committed grave abuse of discretion in
denying its rights to dismiss petitioner on the ground of
redundancy. On March 1991, the NLRC reversed the
decisionandinstead,directedRaytheontopaypetitioner
the total sum of P100,000.00 as separation pay/financial
assistance.
Hence,thispetition.
Issue:Whetherornotpetitionersdismissalbasedonthe
ground of redundancy was tainted with malice, bad faith
andirregularity.

69
Almodielv.NLRC

Facts:PetitionerAlmodielisapublicaccountantwhowas
hired in 1987 as Cost Accounting Manager of respondent
RaytheonPhilippines,Inc.throughaplacementfirm,John
ClementsConsultants,Inc.Hestartedasaprobationaryor
temporaryemployee.Afterafewmonths,hewasgivena
regularization increase of P1,600.00 a month. Not long
thereafter, his salary was increased to P21,600.00 a
month.
On August 1988, he recommended and submitted a Cost
Accounting/Finance Reorganization, affecting the whole

Ruling:Terminationofanemployee'sservicesbecauseof
redundancy is governed by Article 283 of the Labor Code
whichprovidesasfollows:
Art.283.Closureofestablishmentandreduction
of personnel. The employer may also
terminatetheemploymentofanyemployeedue
to installation of laborsaving devices,
redundancy, retrenchment to prevent losses or
the closing or cessation of operation of the
establishment or undertaking unless the closing
is for the purpose of circumventing the
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provisions of this Title, by serving a written

notice on the worker and the Department of
Labor and Employment at least one (1) month
before the intended date thereof. In case of
termination due to installation of laborsaving
devices or redundancy, the worker affected
thereby shall be entitled to a separation pay
equivalent to at least one (1) month pay for
every year of service, whichever is higher. In
case of retrenchment to prevent losses and in
cases of closure or cessation of operations of
establishmentorundertakingnotduetoserious
business losses or financial reverses, the
separationpayshallbeequivalenttoatleastone
(1) month pay or at least onehalf (1/2) month
pay for every year of service, whichever is
higher.Afractionofatleastsix(6)monthsshall
beconsideredasone(1)wholeyear.
There is no dispute that petitioner was duly advised, one
(1) month before, of the termination of his employment
on the ground of redundancy in a written notice by his
immediate superior. The crux of the controversy lies on
whether bad faith, malice and irregularity crept in the
abolition of petitioner's position of Cost Accounting
Manageronthegroundofredundancy.

Petitioner claims that the functions of his position were

absorbed by the Payroll/Mis/Finance Department under
the management of Danny AngTan Chai, a resident alien
withoutanyworkingpermitfromtheDepartmentofLabor
and Employment as required by law. On the other hand,
Raytheon insists that petitioner's functions as Cost
Accounting Manager had not been absorbed by Ang Tan
Chai, a permanent resident born in this country. It claims
to have established below that Ang Tan Chai did not
displace petitioner or absorb his functions and duties as
they were occupying entirely different and distinct
positions requiring different sets of expertise or
qualifications and discharging functions altogether
different and foreign from that of petitioner's abolished
position

Whether petitioner's functions as Cost Accounting

Managerhavebeendispensedwithormerelyabsorbedby
anotherishoweverimmaterial.Thus,notwithstandingthe
dearth of evidence on the said question, a resolution of
thiscasecanbearrivedatwithoutdelvingintothismatter.

Indeed,anemployerhasnolegalobligationtokeepmore
employees than are necessary for the operation of its
business. Petitioner does not dispute the fact that a cost
accounting system was installed and used at Raytheon
subsidiaries and plants worldwide; and that the functions
of his position involve the submission of periodic reports
utilizing computerized forms designed and prescribed by
the head office with the installation of said accounting
system. Petitioner attempts to controvert these realities
byallegingthatsomeofthefunctionsofhispositionwere
still indispensableandwereactuallydispersedtoanother
department. What these indispensable functions that
were dispersed, he failed however, to specify and point
out.Besides,thefactthatthefunctionsofapositionwere
simplyaddedtothedutiesofanotherdoesnotaffectthe
legitimacy of the employer's right to abolish a position
when done in the normal exercise of its prerogative to
adopt sound business practices in the management of its
affairs.

It is a wellsettled rule that labor laws do not

authorize interference with the employer's
judgment in the conduct of his business. The
determinationofthequalificationandfitnessof
workers for hiring and firing, promotion or
reassignment are exclusive prerogatives of
management. The Labor Code and its
implementing Rules do not vest in the Labor
Arbiters nor in the different Divisions of the
NLRC (nor in the courts) managerial authority.
Theemployerisfreetodetermine,usinghisown
discretion and business judgment, all elements
ofemployment,"fromhiringtofiring"exceptin
cases of unlawful discrimination or those which
may be provided by law. There is none in the
instantcase.
Finding no grave abuse of discretion on the part of the
National Labor Relations Commission in reversing and
annullingthedecisionoftheLaborArbiterandthatonthe
contrary,theterminationofpetitioner'semploymentwas
anchored on a valid and authorized cause under Article
283 of the Labor Code, the instant petition forcertiorari
mustfail.

Considering further that petitioner herein held a position

which was definitely managerial in character, Raytheon
had a broad latitude of discretion in abolishing his
position. An employer has a much wider discretion in
terminating employment relationship of managerial
personnel compared to rank and file employees.7The
reason obviously is that officers in such key positions
perform not only functions which by nature require the
employer's full trust and confidence but also functions
thatspellthesuccessorfailureofanenterprise.
Inthecaseatbar,sincepetitionerdoesnotallegethatAng
Tan Chai does not qualify for the position, the Court
cannot substitute its discretion and judgment for that
which is clearly and exclusively management prerogative.
Todosowouldtakeawayfromtheemployerwhatrightly
belongstohimasaptlyexplainedinNationalFederationof
LaborUnionsv.NLRC:8
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