Classes of Employees ISSUE/S:
1. W/N Manalo is a permanent employee which is then has a right for the reinstatement
Magis Young Achiever’s Learning Center v. Manalo (Jued Cisneros)
February 13, 2009
DOCTRINE: A probationary employee or probationer is one who is on trial for an employer,
during which the latter determines whether or not he is quali􀁈ed for permanent employment.
The probationary employment is intended to afford the employer an opportunity to observe the
fitness of a probationary employee while at work, and to ascertain whether he will become an
e􀁈cient and productive employee. While the employer observes the 􀁈tness, propriety and
e􀁈ciency of a probationer to ascertain whether he is qualified for permanent employment, the
probationer, on the other hand, seeks to prove to the employer that he has the quali􀁈cations to
meet the reasonable standards for permanent employment. Thus, the word probationary, as
used to describe the period of employment, implies the purpose of the term or period, not its
length.
An "acting" appointment is essentially a temporary appointment, revocable at will. The
undisturbed unanimity of cases shows that one who holds a temporary appointment has no fixed
tenure of office; his employment can be terminated any time at the pleasure of the appointing
power without need to show that it is for cause.
FACTS: Respondent Adelaida P. Manalo was hired as a teacher and acting principal of
petitioner Magis Young Achievers' Learning Center with a monthly salary of P15,000.00.
On March 29, 2003, wrote a letter of resignation addressed to Violeta T. Cariño, directress of
petitioner due to personal and family reasons.
On March 31, 2003, respondent received a letter of termination from petitioner stating the
abolition of the position of Principal effectively on March 31, 2003.
On April 4, 2003, respondent instituted against petitioner a Complaint for illegal dismissal and
non-payment of 13th month pay, with a prayer for reinstatement, award of full backwages and
moral and exemplary damages.
Respondent claimed that her termination violated the provisions of her employment contract,
and that the alleged abolition of the position of Principal was not among the grounds for
termination by an employer under Article 282 of the Labor Code. Further, she states that
petitioner infringed Article 283 of the Labor Code for the 30-day notice to DOLE and employee
and the payment for separation pay were not complied. claimed that she was terminated from
service for the alleged expiration of her employment, but that her contract did not provide for a
fixed term or period. She likewise prayed for the payment of her 13th month pay.
Petitioner answered that respondent was legally terminated because the one-year probationary
period, from April 1, 2002 to March 3, 2003, had already lapsed and she failed to meet the
criteria set by the school pursuant to Manual of Regulation for Private Schools from DECS
stating that full-time teachers who rendered 3 years of satisfactory service shall be considered
permanent.
Labor Artiber: Dismissed the complaint for illegal dismissal including the claims of respondent
for lack of merit except the 13th month pay. LA pointed out that respondent resigned in her
position without coercion. Further, contract of employment is of a standard contract with a
definite period of employment.
NLRC: Reversed LA’s Decision. Petitioner was ordered to reinstate respondent as a teacher,
who shall be credited with one-year service of probationary employment, and to pay her 13th
month pay and backwages, respectively.
CA: Affirmed NLRC’s Decision.
and benefits.
2. W/N Manalo is illegally dismissed even there is resignation in the case’s records.
HELD:
1. Manalo’s employment is probationary in character. While Acting as Principal is
merely temporary.
2. YES. Illegally dismissed.
RATIO:
1. There should be no question that the employment of the respondent, as teacher, in
petitioner school on April 18, 2002 is probationary in character, consistent with
standard practice in private schools. In light of our disquisition above, we cannot
subscribe to the proposition that the respondent has acquired regular or permanent
tenure as teacher. She had rendered service as such only from April 18, 2002 until
March 31, 2003. She has not completed the requisite three-year period of
probationary employment, as provided in the Manual. She cannot, by right, claim
permanent status.
Apart from the general rule found in Article 281 for six-months probationary period,
respondent’s position is under the provision of the 1992 Manual of Regulations for
Private Schools which sets the probationary period for three (3) consecutive years of
satisfactory service for those in the elementary and secondary levels, six (6)
consecutive regular semesters of satisfactory service for those in the tertiary level, and
nine (9) consecutive trimesters of satisfactory service for those in the tertiary level
where collegiate courses are offered on a trimester basis.
On the other hand, there should also be no doubt that respondent's appointment as
Acting Principal is merely temporary, or one that is good until another appointment is
made to take its place. An "acting" appointment is essentially a temporary
appointment, revocable at will. The undisturbed unanimity of cases shows that one
who holds a temporary appointment has no fixed tenure of office; his employment can
be terminated any time at the pleasure of the appointing power without need to show
that it is for cause.
2. We are also inclined to agree with the CA that the resignation of the respondent is not
valid, not only because there was no express acceptance thereof by the employer, but
because there is a cloud of doubt as to the voluntariness of respondent's resignation.
Furthermore, well-entrenched is the rule that resignation is inconsistent with the filing
of a complaint for illegal dismissal. To be valid, the resignation must be unconditional,
with the intent to operate as such; there must be a clear intention to relinquish the
position. In this case, respondent actively pursued her illegal dismissal case against
petitioner, such that she cannot be said to have voluntarily resigned from her job.
What is truly contentious is whether the probationary appointment of the respondent
on April 18, 2002 was for a fixed period of one (1) year, or without a fixed term,
inasmuch as the parties presented different versions of the employment agreement.
Two copies of contract of employment was provided. One with a negative period and
one provided for a one-year period for its effectivity. None of the parties offered
corroborating evidence as to which of the two (2) discrepancies is the correct one.
Thus, under this circumstance, we can only apply Article 1702 of the Civil Code which
provides that, in case of doubt, all labor contracts shall be construed in favor of the
laborer. Then, too, settled is the rule that any ambiguity in a contract whose terms are
 susceptible of different interpretations must be read against the party who drafted it. In
the case at bar, the drafter of the contract is herein petitioners and must, therefore, be
read against their contention.
Lastly, on the issue on illegal dismissal, we rule in the affirmative. Probationary
employees enjoy security of tenure during the term of their probationary employment
such that they may only be terminated for cause as provided for by law, or if at the end
of the probationary period, the employee failed to meet the reasonable standards set
by the employer at the time of the employee's engagement. Undeniably, respondent
was hired as a probationary teacher and, as such, it was incumbent upon petitioner to
show by competent evidence that she did not meet the standards set by the school.
This requirement, petitioner failed to discharge. To note, the termination of respondent
was effected by that letter stating that she was being relieved from employment
because the school authorities allegedly decided, as a cost-cutting measure, that the
position of "Principal" was to be abolished. Nowhere in that letter was respondent
informed that her performance as a school teacher was less than satisfactory.
2) Pier 8 Arrastre & Stevedoring Services Inc. v. Boclot (Jued Cisneros)
September 28, 2007
DOCTRINE: An employment shall be deemed to be casual if it is not covered by the definition of
a regular employee provided he who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such actually exist.
Article 280-Labor Code
FACTS: Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic corporation
engaged in the business of providing arrastre and stevedoring services 5 at Pier 8 in the Manila
North Harbor. PASSI has been rendering arrastre and stevedoring services at the port area
since 1974 and employs stevedores who assist in the loading and unloading of cargoes to and
from the vessels. Petitioner Eliodoro C. Cruz is its Vice-President and General Manager.
Respondent Jeff B. Boclot was hired by PASSI to perform the functions of a
stevedore starting 20 September 1999.
Period Duration
September — December 1999 (4 months) 21 days
January — April 2000 (4 months) 20 days
March — December 2001 (10 months) 85 days
January — December 2002 (12 months) 70.5 days
January — June 2003 (6 months) 32 days
TOTAL 228.5 days
Philippine Ports Authority (PPA) seized the facilities and took over the operations of PASSI
through its Special Takeover Unit, absorbing PASSI workers as well as their relievers. Later on,
petitioners were able to regain control of their arrastre and stevedoring operations on 12 March
2001.
Respondent filed a complaint before the LA of NLRC claiming regularization; payment of service
incentive leave and 13th month pays and other damages. He alleged that he became a regular
employee by April 2000, since it was his sixth continuous month in service in PASSI's regular
course of business.
Further, respondent said he remained a casual employee from the time he was first hired to
perform the services of a stevedore. Thus, respondent claimed he was denied the rights and
privileges of a regular employee, including those granted under the Collective Bargaining
Agreement (CBA).
In line with the CBA, it is mentioned therein the following probationary periods of the workers:
1. 3 months = skilled workers such as crane operator, mechanic, carpenter,
winchman,signalman and checkers
2. 4 months = semi-skilled personnel
3. 6 months = non-skilled personnel (continuous employment)
Petitioners replied that respondent is only a “reliever” stevedore thus cannot become a regular
employee.
Labor Arbiter: Decided for petitioners and dismissed respondent's complaint. It found no
factual basis for respondent’s regularization since respondent is “nothing more than an extra
worker who is called upon to work at the pier in the absence of regular stevedores at a certain
shift.” Claim of benefits is likewise denied since service is only for 228.5 days – short of 365
days, the one-year requirement to qualify for this benefit.
NLRC: Modified LA’s decision declaring respondent as a regular employee yet resolution for the
benefits is affirmed. ruled that petitioners' failure, without reasonable explanation, to present
proof of absences of "regular" stevedores leads to the conclusion that the stevedores, termed by
petitioners as "relievers," work on rotation basis, just like the "regular" stevedores. It based its
findings that respondent is a regular employee of petitioners on the reasonable connection
between the activity performed by the employee in relation to the usual business or trade of the
employer. Although respondent rendered an average of 6.34 days of work a month, the activities
performed were usually necessary and desirable in the business of petitioners.
CA: Ruled that even assuming that respondent was able to render services for only 228.5 days
in a period of 36 months, the fact remains that his services were continuously utilized by
petitioners in their business. Where the job is usually necessary or desirable to the main
business of the employer, then the employment is regular.
ISSUE/S:
W/N respondent is considered to be a regular employee of petitioner PASSI.
HELD:
YES. With different basis from NLRC and CA.
RATIO: The Labor Code draws a fine line between regular and casual employees to protect the
interests of labor. a regular employee is (1) one who is either engaged to perform activities that
are necessary or desirable in the usual trade or business of the employer except for project or
seasonal employees; or (2) a casual employee who has rendered at least one year of service,
whether continuous or broken, with respect to the activity in which he is employed.
The situation of respondent is similar to that of a project or seasonal employee, albeit on a daily
basis.
It takes judicial notice that it is an industry practice in port services to hire "reliever" stevedores in
order to ensure smooth-flowing 24-hour stevedoring and arrastre operations in the port area. No
doubt, serving as a stevedore, respondent performs tasks necessary or desirable to the usual
business of petitioners. However, it should be deemed part of the nature of his work that he can
only work as a stevedore in the absence of the employee regularly employed for the very same
function.
In terms of respondent’s status as probationary or casual employee, Article 280 provides that a
casual employee can be considered as regular employee if said casual employee has rendered
at least one year of service regardless of the fact that such service may be continuous or
broken.
IRR of the Labor Code defines the term "at least one year of service" to mean service within 12
months, whether continuous or broken, reckoned from the date the employee started working,
including authorized absences and paid regular holidays, unless the working days in the
establishment as a matter of practice or policy, or that provided in the employment contract, is
less than 12 months, in which case said period shall be considered one year. If the employee
has been performing the job for at least one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and continuing need for its performance as
sufficient evidence of the necessity, if not indispensability, of that activity to the business of the
employer. Applying this rule, respondent’s 228.5 days of work does not fall within this tenure.
Nonetheless, we still find respondent to be a regular employee on the basis of pertinent
provisions under the CBA between PASSI and its Workers' union:
 6 months = non-skilled personnel (continuous employment)
Petitioners were crucified on this argument raised by respondent. The union which negotiated
the existing CBA is the sole and exclusive bargaining representative of all the stevedores, dock
workers, gang bosses, rank and file employees working at Pier 8, and its offices.
Respondent assents that he is not a member of the union, as he was not recognized by PASSI
as its regular employee, but this Court notes that PASSI adopts a union-shop agreement, culling
from Article II of the CBA which stipulates:
 The Union and the Company (PASSI) hereby agree to adopt the "Union Shop" as
a condition of employment to the position (sic) covered by this Agreement.
Under a union-shop agreement, although nonmembers may be hired, an employee is required
to become a union member after a certain period, in order to retain employment. This
requirement applies to present and future employees. The same article of the CBA stipulates
that employment in PASSI cannot be obtained without prior membership in the union.
18) The Peninsula Manila v. Alipio
June 17, 2008
DOCTRINE: ART. 280. Regular and Casual Employment. — The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the engagement of
the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such
activity exists.
FACTS:
Petitioner, The Peninsula Manila, is a corporation engaged in the hotel business. Co-
petitioners Rolf Pfisterer and Benilda Quevedo-Santos were the general manager and human
resources manager, respectively, of the hotel at the time of the controversy.
The hotel operates a clinic 24 hours a day and employs three regular nurses who work eight
hours each day on three separate shifts. The hotel also engages the services of reliever
nurses who substitute for the regular nurses who are either off-duty or absent.
Respondent Elaine M. Alipio was hired merely as a reliever nurse. However, she had been
performing the usual tasks and functions of a regular nurse since the start of her employment
on December 11, 1993. Hence, after about four years of employment in the hotel, she
inquired why she was not receiving her 13th month pay.
In response, petitioners required her to submit a summary of her tour of duty for 1997. After
she had submitted the said summary, Alipio was paid P8,000 as her 13th month pay for
1997. Alipio likewise requested for the payment of her 13th month pay for 1993 to 1996, but
her request was denied. aSTcCE
On December 18, 1998, Alipio was informed by a fellow nurse that she can only report for
work after meeting up with petitioner Santos. When Alipio met with Santos on December 21,
1998, Alipio was asked regarding her payslip vouchers. She told Santos that she made copies
of her payslip vouchers because Peninsula does not give her copies of the same. Santos was
peeved with Alipio's response because the latter was allegedly not entitled to get copies of her
payslip vouchers. Santos likewise directed Alipio not to report for work anymore.
Labor Arbiter: dismissed. Ordered to give separation pay.
NLRC: Affirmed with modification. Separation pay deleted.
CA: Reversed. Ordered petitioner to reinstate Alipio with damages.
ISSUE/S: Whether or not Alipio’s dismissal was valid. - no
RATIO:
The conclusions reached by the NLRC and the Labor Arbiter, that Alipio was not a regular
employee of the hotel and that she was validly dismissed, are not supported by law and
evidence on record. AcCTaD
Article 280 of the Labor Code provides:
ART. 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Thus, an employment is deemed regular when the activities performed by the employee are
usually necessary or desirable in the usual business of the employer. However, any employee
who has rendered at least one year of service, even though intermittent, is deemed regular
with respect to the activity performed and while such activity actually exists.
In this case, records show that Alipio's services were engaged by the hotel intermittently from
1993 up to 1998. Her services as a reliever nurse were undoubtedly necessary and desirable
in the hotel's business of providing comfortable accommodation to its guests. In any case,
since she had rendered more than one year of intermittent service as a reliever nurse at the
hotel, she had become a regular employee as early as December 12, 1994. Lastly, per the
hotel's own Certification dated April 22, 1997, she was already a "regular staff nurse" until her
dismissal.
Being a regular employee, Alipio enjoys security of tenure. Her services may be terminated only
upon compliance with the substantive and procedural requisites for a valid dismissal: (1) the
dismissal must be for any of the causes provided in Article 282 12 of the Labor Code; and (2) the
employee must be given an opportunity to be heard and to defend himself.
We have defined misconduct as any forbidden act or dereliction of duty. It is willful in
character and implies a wrongful intent, not a mere error in judgment. The misconduct, to be
serious, must be grave and not merely trivial. In this case, Alipio's act of obtaining copies of
her payslips cannot be characterized as a misconduct, much less a grave misconduct. On the
contrary, we find it absurd that she had to resort to her own resourcefulness to get hold of
these documents since it was incumbent upon Peninsula, as her employer, to give her copies
of her payslips as a matter of course. We are thus convinced that Alipio's dismissal was not
based on a just cause.
When Santos had a meeting with Alipio on December 21, 1998, she was not informed that the
hotel was contemplating her dismissal. Neither was she informed of the ground for which her
dismissal was sought. She was simply told right there and then that she was already dismissed,
thereby affording no opportunity for her to be heard and defend herself. Thus, Alipio was
likewise deprived of procedural due process.
4) Rowell Industrial Corporation v. CA
March 7, 2007
FACTS: On 17 February 2000, herein respondent Taripe filed a Complaint against petitioner
RIC for regularization and payment of holiday pay, as well as indemnity for severed finger, which
was amended on 7 April 2000 to include illegal dismissal. Taripe alleges that RIC employed him
starting 8 November 1999 as power press machine operator, such position of which was
occupied by RIC's regular employees and the functions of which were necessary to the latter's
business. Taripe adds that upon employment, he was made to sign a document, which was not
explained to him but which was made a condition for him to be taken in and for which he was not
furnished a copy. Taripe states that he was not extended full benefits granted under the law and
the Collective Bargaining Agreement and that on 6 April 2000, while the case for regularization
was pending, he was summarily dismissed from his job although he never violated any of the
petitioner RIC's company rules and regulations.
RIC, for its part, claims that Taripe was a contractual employee, whose services were required
due to the increase in the demand in packaging requirement of its clients for Christmas season
and to build up stock levels during the early part of the following year; that on 6 March 2000,
respondent Taripe's employment contract expired. RIC avers that the information update for
union members, which was allegedly filled up by Taripe and submitted by the Union to
[petitioner] company, it is stated therein that in the six (6) companies where respondent Taripe
purportedly worked, the latter's reason for leaving was "finished contract," hence, Taripe has
knowledge about being employed by contract contrary to his allegation that the document he
was signing was not explained to him. Petitioner RIC manifests that all benefits, including those
under the [Social Security System], were given to him.
Labor Arbiter: Taripe was a contractual employee whose contract merely expired.
NLRC: Reversed. Ordered RIC to reinstate respondent with full backwages.
CA: Affirmed NLRC decision.
ISSUE/S: Whether or not the CA misinterpreted Article 280 of the Labor Code. NO
RATIO:
Thus, there are two kinds of regular employees, namely: (1) those who are engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the
employer; and (2) those who have rendered at least one year of service, whether continuous or
broken, with respect to the activity in which they are employed. [Respondent Taripe] belonged
to the first category of regular employees.
The purported contract of employment providing that [respondent Taripe] was hired as
contractual employee for five (5) months only, cannot prevail over the undisputed fact that
[respondent Taripe] was hired to perform the function of power press operator, a function
necessary or desirable in [petitioner's] business of manufacturing tin cans. [Herein petitioner
RIC's] contention that the four (4) months length of service of [respondent Taripe] did not grant
him a regular status is inconsequential, considering that length of service assumes importance
only when the activity in which the employee has been engaged to perform is not necessary or
desirable to the usual business or trade of the employer.
Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it
must, nevertheless, meet any of the following guidelines in order that it cannot be said to
circumvent security of tenure: (1) that the fixed period of employment was knowingly and
voluntarily agreed upon by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent;
or (2) it satisfactorily appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former on the
latter.
In the present case, it cannot be denied that the employment contract signed by respondent
Taripe did not mention that he was hired only for a specific undertaking, the completion of which
had been determined at the time of his engagement. The said employment contract neither
mentioned that respondent Taripe's services were seasonal in nature and that his employment
was only for the duration of the Christmas season as purposely claimed by petitioner RIC. What
was stipulated in the said contract was that respondent Taripe's employment was contractual for
the period of five months.
Likewise, as the NLRC mentioned in its Resolution, to which the Court of Appeals agreed, other
than the bare allegations of petitioner RIC that respondent Taripe was hired only because of the
increase in the demand for packaging materials during the Christmas season, petitioner RIC
failed to substantiate such claim with any other evidence. Petitioner RIC did not present any
evidence which might prove that respondent Taripe was employed for a fixed or specific project
or that his services were seasonal in nature.
Also, petitioner RIC failed to controvert the claim of respondent Taripe that he was made to sign
the contract of employment, prepared by petitioner RIC, as a condition for his hiring. Such
contract in which the terms are prepared by only one party and the other party merely affixes his
signature signifying his adhesion thereto is called contract of adhesion. It is an agreement in
which the parties bargaining are not on equal footing, the weaker party's participation being
reduced to the alternative "to take it or leave it." In the present case, respondent Taripe, in
need of a job, was compelled to agree to the contract, including the five-month
period of employment, just so he could be hired. Hence, it cannot be argued that respondent
Taripe signed the employment contract with a fixed term of five months willingly and with full
knowledge of the impact thereof.
Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid fixed
term employment contract, it can be safely stated that the aforesaid contract signed by
respondent Taripe for a period of five months was a mere subterfuge to deny to the latter a
regular status of employment.
Respondent Taripe does not fall under the exceptions mentioned in Article 280 of the Labor
Code, as amended, because it was not proven by petitioner RIC that he was employed only for a
specific project or undertaking or his employment was merely seasonal. Similarly, the position
and function of power press operator cannot be said to be merely seasonal. Such position
cannot be considered as only needed for a specific project or undertaking because of the very
nature of the business of petitioner RIC. Indeed, respondent Taripe is a regular
employee of petitioner RIC and as such, he cannot be dismissed from his employment unless
there is just or authorized cause for his dismissal.
Well-established is the rule that regular employees enjoy security of tenure and they can only be
dismissed for just cause and with due process, notice and hearing. 24 And in case of employees'
dismissal, the burden is on the employer to prove that the dismissal was legal. Thus, respondent
Taripe's summary dismissal, not being based on any of the just or authorized causes
enumerated under Articles 282, 25 283, 26 and 284 27 of the Labor Code, as amended, is
illegal.
ABS-CBN vs Nazareno (JP Sarmiento)
September 26,2006
DOCTRINE:The presumption is that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the employer, does not furnish an
independent business or professional service, such work is a regular employment of such
employee and not an independent contractor.
FACTS: Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as
production assistants (PAs) on different dates. They were assigned at the news and public
affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly
compensation of P4,000. They were issued ABS-CBN employees' identification cards and were
required to work for a minimum of eight hours a day, including Sundays and holidays. They were
made to perform the following tasks and duties:
a) Prepare, arrange airing of commercial broadcasting based on the daily operations log and
digicart of respondent ABS-CBN;
b) Coordinate, arrange personalities for air interviews;
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or
incoming reports;
d) Facilitate, prepare and arrange airtime schedule for public service announcement and
complaints;
e) Assist, anchor program interview, etc; and
f) Record, log clerical reports, man based control radio.
On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a
Collective Bargaining Agreement (CBA) to be effective during the period from December 11,
1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the
bargaining unit, respondents were not included to the CBA.
On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing the PAs
that effective August 1, 2000, they would be assigned to non-drama programs, and that the
DYAB studio operations would be handled by the studio technician.
Respondent Gerzon was assigned as the full-time PA of the TV News Department reporting
directly to Leo Lastimosa.
On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment
Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick
Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. The
Labor Arbiter directed the parties to submit their respective position papers. Upon respondents'
failure to file their position papers within the reglementary period, Labor Arbiter Jose G.
Gutierrez issued an Order dated April 30, 2001, dismissing the complaint without prejudice for
lack of interest to pursue the case. Instead of re-filing their complaint with the NLRC within 10
days from May 16, 2001, they filed, on June 11, 2001, an Earnest Motion to Refile Complaint
with Motion to Admit Position Paper and Motion to Submit Case For Resolution.
Respondents insisted that they belonged to a "work pool" from which petitioner chose persons to
be given specific assignments at its discretion, and were thus under its direct supervision and
control regardless of nomenclature.
Complainants further pray of this Arbiter to declare them regular and permanent employees of
respondent ABS-CBN as a condition precedent for their admission into the existing union and
collective bargaining unit of respondent company where they may as such acquire or otherwise
perform their obligations thereto or enjoy the benefits due therefrom.
Petitioner maintained that PAs, reporters, anchors and talents occasionally "sideline" for other
programs they produce, such as drama talents in other productions. As program employees, a
PA's engagement is coterminous with the completion of the program, and may be
extended/renewed provided that the program is on-going.
On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents, and declared
that they were regular employees of petitioner; as such, they were awarded monetary benefits.
However, the Labor Arbiter did not award money benefits as provided in the CBA on his belief
that he had no jurisdiction to interpret and apply the agreement, as the same was within the
jurisdiction of the Voluntary Arbitrator as provided in Article 261 of the Labor Code.
On November 14, 2002, the NLRC rendered judgment modifying the decision of the Labor
Arbiter To pay complainants of their wage differentials and other benefits arising from the CBA.
he NLRC ruled that respondents were entitled to the benefits under the CBA because they were
regular employees who contributed to the profits of petitioner through their labor.
ISSUE/S: WON respondents are employees of ABS-CBN and not merely as project employees
or “talents”. Thus giving them the right to participate in the CBA. -- YES
RATIO: We agree with respondents' contention that where a person has rendered at least one
year of service, regardless of the nature of the activity performed, or where the work is
continuous or intermittent, the employment is considered regular as long as the activity exists,
the reason being that a customary appointment is not indispensable before one may be formally
declared as having attained regular status. Article 280 of the Labor Code provides:
ART. 280. REGULAR AND CASUAL EMPLOYMENT. — The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer except
where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.
In Universal Robina Corporation v. Catapang, the Court reiterated the test in determining
whether one is a regular employee:
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual
trade or business of the employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing the job for at least a
year, even if the performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular,
but only with respect to such activity and while such activity exists.
As elaborated by this Court in Magsalin v. National Organization of Working Men:

Even while the language of law might have been more definitive, the clarity of its spirit and
intent, i.e., to ensure a "regular" worker'’s security of tenure, however, can hardly be doubted. In
determining whether an employment should be considered regular or non-regular, the applicable
test is the reasonable connection between the particular activity performed by the employee in
relation to the usual business or trade of the employer. The standard, supplied by the law itself,
is whether the work undertaken is necessary or desirable in the usual business or trade of the
employer, a fact that can be assessed by looking into the nature of the services rendered and its
relation to the general scheme under which the business or trade is pursued in the usual course.
It is distinguished from a specific undertaking that is divorced from the normal activities required
in carrying on the particular business or trade. But, although the work to be performed is only for
a specific project or seasonal, where a person thus engaged has been performing the job for at
least one year, even if the performance is not continuous or is merely intermittent, the law
deems the repeated and continuing need for its performance as being sufficient to indicate the
necessity or desirability of that activity to the business or trade of the employer. The employment
of such person is also then deemed to be regular with respect to such activity and while such
activity exists.
Not considered regular employees are "project employees," the completion or termination of
which is more or less determinable at the time of employment, such as those employed in
connection with a particular construction project, and "seasonal employees" whose employment
by its nature is only desirable for a limited period of time. Even then, any employee who has
rendered at least one year of service, whether continuous or intermittent, is deemed regular with
respect to the activity performed and while such activity actually exists.
It is of no moment that petitioner hired respondents as "talents." The fact that
respondents received pre-agreed "talent fees" instead of salaries, that they did not
observe the required office hours, and that they were permitted to join other productions
during their free time are not conclusive of the nature of their employment. Respondents
cannot be considered "talents" because they are not actors or actresses or radio
specialists or mere clerks or utility employees. They are regular employees who perform
several different duties under the control and direction of ABS-CBN executives and
supervisors.
Thus, there are two kinds of regular employees under the law: (1) those engaged to perform
activities which are necessary or desirable in the usual business or trade of the employer; and
(2) those casual employees who have rendered at least one year of service, whether continuous
or broken, with respect to the activities in which they are employed.
The law overrides such conditions which are prejudicial to the interest of the worker whose weak
bargaining situation necessitates the succor of the State. What determines whether a certain
employment is regular or otherwise is not the will or word of the employer, to which the worker
oftentimes acquiesces, much less the procedure of hiring the employee or the manner of paying
the salary or the actual time spent at work. It is the character of the activities performed in
relation to the particular trade or business taking into account all the circumstances, and in some
cases the length of time of its performance and its continued existence. It is obvious that one
year after they were employed by petitioner, respondents became regular employees by
operation of law.
Additionally, respondents cannot be considered as project or program employees
because no evidence was presented to show that the duration and scope of the project
were determined or specified at the time of their engagement. Under existing
jurisprudence, project could refer to two distinguishable types of activities. First, a
project may refer to a particular job or undertaking that is within the regular or usual
business of the employer, but which is distinct and separate, and identifiable as such,
from the other undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times. Second, the term project may also refer to a particular
job or undertaking that is not within the regular business of the employer. Such a job or
undertaking must also be identifiably separate and distinct from the ordinary or regular
business operations of the employer. The job or undertaking also begins and ends at
determined or determinable times.
6) Kimberly-Clark vs. Secretary
DOCTRINE: Considering that an employee becomes regular with respect to the activity in which
he is employed one year after he is employed, the reckoning date for determining his
regularization is his hiring date.
FACTS:
On June 30, 1986, the Collective Bargaining Agreement (CBA) executed by and between
Kimberly-Clark (Phils.), Inc., (Kimberly), a Philippine-registered corporation engaged in the
manufacture, distribution, sale and exportation of paper products, and United Kimberly-Clark
Employees Union-Philippine Transport and General Workers' Organization (UKCEO-PTGWO)
expired. Within the freedom period, on April 21, 1986, KILUSAN-OLALIA, then a newly-formed
labor organization, challenged the incumbency of UKCEO-PTGWO, by filing a petition for
certification election with the Ministry (now Department) of Labor and Employment (MOLE),
Regional Office No. IV, Quezon City.
A certification election was subsequently conducted on July 1, 1986 with UKCEO-PTGWO
winning by a margin of 20 votes over KILUSAN-OLALIA. Remaining as uncounted were 64
challenged ballots cast by 64 casual workers whose regularization was in question. KILUSAN-
OLALIA filed a protest. On November 13, 1986, MOLE issued an Order stating, among others,
that the casual workers not performing janitorial and yard maintenance services had attained
regular status on even date. UKCEO-PTGWO was then declared as the exclusive bargaining
representative of Kimberly's employees, having garnered the highest number of votes in the
certification election.
On March 16, 1987, KILUSAN-OLALIA filed with this Court a petition for certiorari which was
docketed as G.R. No. 77629 assailing the Order of the MOLE with prayer for a temporary
restraining order (TRO).
During the pendency of G.R. No. 77629, Kimberly dismissed from service several employees
and refused to heed the workers' grievances, impelling KILUSAN-OLALIA to stage a strike on
May 17, 1987. Kimberly filed an injunction case with the National Labor Relations Commission
(NLRC), which prompted the latter to issue temporary restraining orders (TRO's). The propriety
of the issuance of the TRO's was again brought by KILUSAN-OLALIA to this Court via a petition
for certiorari and prohibition which was docketed as G.R. No. 78791. G.R. Nos. 77629 and
78791 were eventually consolidated by this Court and decided on May 9, 1990. In G.R. No.
77629 the court ordered that the complainants be regularized and count the 64 challenged
votes, and that the union with the highest number of votes be thereafter declared as the duly
elected certified bargaining representative of the regular employees of KIMBERLY;
2. Ordering KIMBERLY to pay the workers who have been regularized their differential pay with
respect to minimum wage, cost of living allowance, 13th month pay, and benefits provided for
under the applicable collective bargaining agreement from the time they became regular
employees.
On the Decision of the Court dated May 9, 1990, KILUSAN-OLALIA and 76 individual
complainants filed a motion for execution with the DOLE (formerly MOLE). In an Order issued on
June 29, 2000, the DOLE considered as physically impossible, and moot and academic the
opening and counting of the 64 challenged ballots because they could no longer be located
despite diligent efforts, and KILUSAN-OLALIA no longer actively participated when the company
went through another CBA cycle. However, the DOLE ordered the payment of the differential
wages and other benefits of the regularized workers. Pursuant thereto, on August 1, 2000, the
Bureau of Working Conditions (BWC) submitted its report finding 47 out of the 76 complainants
as entitled to be regularized.

Kimberly filed a motion for reconsideration of the DOLE Order as well as the BWC Report,
arguing in the main that the decision in G.R. Nos. 77629 and 78791 only pertained to casuals
who had rendered one year of service as of April 21, 1986, the filing date of KILUSAN-OLALIA's
petition for certification election. On December 6, 2000, however, the DOLE denied the motion.
Kimberly, steadfast in its stand, filed a petition for certiorari before the appellate court, which was
docketed as CA-G.R. SP No. 62257 alleging that the employees who were dismissed due to the
illegal strike staged on May 17, 1987 (the subject of G.R. Nos. 149158-59) should not be
awarded regularization differentials.
On June 27, 2002, the CA dismissed Kimberly's petition, and disposed of the case for failure to
show grave abuse of discretion. The questioned orders dated June 29, 2000 and December 6,
2000 of the Secretary of Labor were AFFIRMED.
With the denial of its motion for reconsideration, Kimberly elevated the case before this Court, on
the following grounds:
1. The Court of Appeals committed serious error in affirming the ruling of the Secretary of Labor
that even casual employees who had not rendered one year of service were considered regular
employees, thereby nullifying and disregarding the Honorable Court's Decision dated May 9,
1990 that only casual employees who had rendered at least one (1) year of service were
considered regular employees.
2. The Court of Appeals also gravely erred in upholding the ruling of Labor Secretary that
persons not party to the petition in G.R. No. 77629 were entitled to regularization differentials,
thereby amending the Honorable Court's decision.
Kimberly, in this case, contends that the reckoning point in determining who among its casual
employees are entitled to regularization should be April 21, 1986, the date KILUSAN-OLALIA
filed a petition for certification election to challenge the incumbency of UKCEO-PTGWO. It posits
that in the implementation of the May 9, 1990 Decision in G.R. No. 77629, 5 the DOLE should
then exclude the employees who had not rendered at least one (1) year of service from the said
date.
Kimberly also argues that the employees who are not parties in G.R. No. 77629 should not be
included in the implementation orders. For DOLE to declare this group of employees as regular
and to order the payment of differential pay to them is to amend a final and executory decision of
this Court.
ISSUE/S: WON even employees who have yet to render at least one year of service, should be
considered as regular employees. - YES
RATIO: The law [thus] provides for two kinds of regular employees, namely: (1) those who are
engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer; and (2) those who have rendered at least one year of service, whether
continuous or broken, with respect to the activity in which they are employed. The individual
petitioners herein who have been adjudged to be regular employees fall under the second
category. These are the mechanics, electricians, machinists, machine shop helpers, warehouse
helpers, painters, carpenters, pipefitters and masons. It is not disputed that these workers have
been in the employ of KIMBERLY for more than one year at the time of the filing of the petition
for certification election by KILUSAN-OLALIA.
Owing to their length of service with the company, these workers became regular employees, by
operation of law, one year after they were employed by KIMBERLY through RANK. While the
actual regularization of these employees entails the mechanical act of issuing regular
appointment papers and compliance with such other operating procedures as may be adopted
by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of
regular employment attaches to the casual worker on the day immediately after the end of his
first year of service. To rule otherwise, and to instead make their regularization dependent on the
happening of some contingency or the fulfillment of certain requirements, is to impose a burden
on the employee which is not sanctioned by law.
That the first stated position is the situation contemplated and sanctioned by law is further
enhanced by the absence of a statutory limitation before regular status can be acquired by a
casual employee. The law is explicit. As long as the employee has rendered at least one year of
service, he becomes a regular employee with respect to the activity in which he is employed.
The law does not provide the qualification that the employee must first be issued a regular
appointment or must first be formally declared as such before he can acquire a regular status.
Obviously, where the law does not distinguish, no distinction should be drawn. 8 Cdpr
Considering that an employee becomes regular with respect to the activity in which he is
employed one year after he is employed, the reckoning date for determining his regularization is
his hiring date. Therefore, it is error for petitioner Kimberly to claim that it is from April 21, 1986
that the one-year period should be counted. While it is a fact that the issue of regularization
came about only when KILUSAN-OLALIA filed a petition for certification election, the concerned
employees attained regular status by operation of law. 9
Further, the grant of the benefit of regularization should not be limited to the employees who
questioned their status before the labor tribunal/court and asserted their rights; it should also
extend to those similarly situated. 10 There is, thus, no merit in petitioner's contention that only
those who presented their circumstances of employment to the courts are entitled to
regularization.
7) Benares v. Pancho April 29, 2005
DOCTRINE: The primary standard for determining regular employment is the reasonable
connection between the particular activity performed by the employee vis-à-vis the usual
trade or business of the employer.
FACTS:
1. Respondents were sugar farm workers on different dates at Hacienda Maasin II,
Negros Occidental
2. They wrote a letter addressed to the Regional Director of Department of Labor and
Employment Bacolod City for intercession in the matter of wages and other benefits
mandated by law.
3. Investigation was conducted
4. Hacienda Maasin II terminated the respondents
5. Subsequently, a formal complaint for illegal dismissal with money claims was filed
against Hacienda Maasin II. The respondents allege that they were illegally terminated
without being paid as retaliation for the investigation conducted by the DOLE
6. LA: Dismissed the complaint for lack of merit
7. NLRC: Reversed the decision of LA and ruled that respondents are regular seasonal
workers of Hacienda Maasin from 1964-1985, and Benares was not able to prove the
termination was for a just or authorized cause.
8. CA: Affirmed NLRC ruling
ISSUE/S: WON Respondents are Regular Employees of Hacienda Maasin
YES
RATIO: There are 3 kinds of employees:
1. Regular employees or those who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer
2. Project employees or those whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season; and
 3. Casual employees or those who are neither regular nor project employees
The court compared two cases
Mercado v NLRC:
- “Seasonal workers do not become regular employees by the mere fact that they have
rendered at least one year of service, whether continuous or broken, because the
proviso in Art 280 demarcates as casual employees, all other employees who do not
fall under the definition of the 1st paragraph”
- However, the facts in this case is not the same with the case at bar because in
Mercado, the workers were engaged to do a particular phase of agricultural work
necessary for rice and/or sugarcane production, after which they would be free to
render services to other farm workers who need their services.
Hacienda Fatima v National Federation of Sugarcane Workers-Food and General Trade
- “Seasonal workers who are called to work from time to time and are temporarily laid
off during off-season are not separated from service in that period but merely
considered on leave until re-employed.”
- If the employee has been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity and while such activity exists.
LA, NLRC and CA found that the respondents were Regular Employees. Since it is a settled
rule that the factual findings of quasi-judicial agencies which have acquired expertise in the
matters entrusted to their jurisdiction are accorded by the SC not only respect but even finality,
the SC didn’t disturb the findings.
8) Benares v. Pancho April 15, 2005
DOCTRINE: The primary standard for determining regular employment is the reasonable
connection between the particular activity performed by the employee vis-à-vis the usual
trade or business of the employer.
FACTS:
1. 76 respondents were part of Hacienda Bino’s workfore performing various works such
as cultivation, planting, fertilization, watering, etc.
2. The 76 respondents signed in favor of CARP while the other workers signed in favor
of land re-classification from agricultural to industrial, commercial, residential.
3. During off-season, Hortencia Starke the owner and operator of Hacienda Bino issued
an order or Notice stating:
a. “To all Hacienda Employees, Please bear in mind that all those who signed
in favor of CARP are expressing their desire to get out of employment on
their own volition. Wherefore, beginning today July 18, only those who did
not sign for CARP will be given employment by Hacienda Bino.”
4. The respondents regarded such notice as a termination of their employment. Hence
they filed a complaint for illegal dismissal before the LA of Bacolod.
5. LA: Notice was tantamount to termination of respondents’ services and Hacienda Bino
was guilty of illegal dismissal.
6. Both petitioner and respondent appealed their case to NLRC
7. NLRC: Affirmed the decision of LA
8. On Appeal CA Affirmed NLRC with modification, deleting the award for holiday pay
and premium pay for holidays.
ISSUE/S: WON Respondents are Regular Employees of Hacienda Bino YES
RATIO: Petitioner raised the ruling in Mercado v NLRC as their basis for stare decisis…
Mercado v NLRC:
- “Seasonal workers do not become regular employees by the mere fact that they have
rendered at least one year of service, whether continuous or broken, because the
proviso in Art 280 demarcates as casual employees, all other employees who do not
fall under the definition of the 1st paragraph”
- However, the facts in this case is not the same with the case at bar because in
Mercado, the workers were engaged to do a particular phase of agricultural work
necessary for rice and/or sugarcane production, after which they would be free to
render services to other farm workers who need their services.
The Mercado case is not relevant to the present case. Mercado decision ruled on the status of
employment of farm laborers who, as found by the labor arbiter work only for a definite period for
a farm worker, after which they offer their services to other farm owners considering the area in
question is small (17 ½ hectares) such that the planting of rice and sugar cane thereon could not
possibly entail a whole year operation.
In this case, the size of the sugar hacienda is 236 hectares which simply do not allow for
respondents to render work only for a definite period.
The petitioners did not present any evidence that the respondents were required to perform
certain phases of agricultural work for a definite period of time.
For the respondents to be excluded from those classified as regular employees, it is not enough
that respondents perform work or services that are seasonal in nature, they must have been
employed only for the duration of one season.
While the records show that the respondents work were seasonal in nature, there was no proof
that they were hired for the duration of one season only. In fact the payrolls submitted in
evidence by the petitioner show that they availed the services of respondents since 1991.
9) Poseidon Fishing v. NLRC February 20, 2006
 Test to determine regular employment: Reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the
employer. If the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the necessity, if not
indispensability of that activity to the business
 The pattern of re-hiring and the recurring need for his services are testament to the
necessity and indispensability of such services to petitioners business or trade.
 Project employees - are those workers hired (1) for a specific project or undertaking, and
(2) the completion or termination of such project has been determined at the time of the
engagement of the employee.
 Principal test to determine project employment: whether or not the project employees
were assigned to carry out a specific project or undertaking, the duration and scope of
which were specified at the time the employees were engaged for that project.
 Also, a project or work employee becomes a regular employee on the following instances:
1. Continuous employment, as opposed to intermittently, re-hired by the same employer
for the same tasks or nature of tasks; and
2. Task performed are vital, necessary and indispensable to the usual business or trade
of the employer.

FACTS:
Estoquia is the Chief Mate of Poseidon Fishing, a fishing company engaged in the deep-sea
fishing industry, since January 1988 until he was promoted as the Boat Captain after five year. In
1999, Estoquia was demoted to Radio Operator of Poseidon without any reasons. As a Radio
Operator, he monitored the daily activities in their office and recorded in the duty logbook the
names of the callers and time of their calls.
On 3 July 2000, Estoquia failed to record a 7:25 AM call in one of the logbooks. However, he
was able to record the same in the other logbook. Consequently, when he reviewed the two
logbooks, he noticed that he was not able to record the said call in one of the logbooks so he
immediately recorded the 7:25 AM call after the 7:30 AM entry.
Around 9:00 AM of 4 July 2000, de Jesus, manager of Poseidon, detected the error in the entry
in the logbook. Subsequently, she asked Estoquia to prepare an incident report to explain the
reason for the said oversight.
At around 2:00 PM of that same day, Laderas, secretary of Poseidon, summoned Estoquia to
get his separation pay amounting to Php 55,000.00. However, he refused to accept the amount
as he believed that he did nothing illegal to warrant his immediate discharge from work.
LABOR ARBITER: Estoquia filed a complaint for illegal dismissal, alleging nonpayment of
wages with prayer for back wages, damages, attorneys fees, and other monetary benefits.
Poseidon and de Jesus strongly asserted that Estoquia was a contractual or a casual employee
whose services could be terminated at the end of the contract even without a just or authorized
cause. Likewise, it was made clear to him that he was being employed only on a por viaje or per
trip basis and that his employment would be terminated at the end of the trip for which he was
being hired. As such, the Estoquia could not be entitled to separation pay and other monetary
claims.
Labor Arbiter decided in favor of Estoquia. The Labor Arbiter held that even if the private
respondent was a casual employee, he became a regular employee after a period of one year
and, thereafter, had attained tenurial securitywhich could only be lost due to a legal cause after
observing due process.
NLRC: Petitioner filed their Memorandum of Appeal with the NLRC for the reversal of the
aforesaid decision. On 24 September 2002, the NLRC affirmed the decision of the Labor
Arbiter. Petitioners moved for the reconsideration of the NLRC decision, but were denied in a
Resolution dated 29 August 2003.
CA: Petitioners filed a Petition for Certiorari with the CA, but it was denied.
ISSUE/S:
Whether or not Estoquia is a regular employee when his employment was terminated on 04 July
2000?
HELD:
YES
RATIO:
The test to determine whether employment is regular or not is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or
trade of the employer. And, if the employee has been performing the job for at least one year,
even if the performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity, if not
indispensability of that activity to the business.
For 12 years, Estoquia worked for Poseidon as a Chief Mate, then Boat Captain, and later as
Radio Operator. His job was directly related to the deep-sea fishing business of Poseidon.
His work was, therefore, necessary and important to the business of his employer, and
such he is considered as a regular employee of Poseidon under Article 280 of the Labor
Code. The pattern of re-hiring and the recurring need for his services are testament to the
necessity and indispensability of such services to petitioners business or trade.
Estoquia is not a seasonal/project employee since project employees are those workers hired
(1) for a specific project or undertaking, and (2) the completion or termination of such project has
been determined at the time of the engagement of the employee. The principal test for
determining whether particular employees are project employees as distinguished from regular
employees, is whether or not the project employees were assigned to carry out a specific
project or undertaking, the duration and scope of which were specified at the time the
employees were engaged for that project.
In this case, petitioners have not shown that private respondent was informed that he will be
assigned to a specific project or undertaking. Neither has it been established that he was
informed of the duration and scope of such project or undertaking at the time of their
engagement since the terms of employment of Estuqia as provided in the Kasunduan was not
only vague, it also failed to provide an actual or specific date or period for the contract.
Also, a project or work employee becomes a regular employee on the following instances:
1. Continuous employment, as opposed to intermittently, re-hired by the same employer
for the same tasks or nature of tasks; and
2. Task performed are vital, necessary and indispensable to the usual business or trade
of the employer.
Furthermore, Estoquia was not negligent on account of his failure to properly record a call in the
logbook. Gross negligence under Article 282 of the Labor Code connotes want of care in the
performance of ones duties, while habitual neglect implies repeated failure to perform ones
duties for a period of time, depending upon the circumstances. Here, it is not disputed that
Estoquia corrected straight away the recording of the call and Poseidon failed to prove the
damage or injury that such inadvertence caused the company.
10) PLDT v. Arceo 2006 May 05
A regular employee is:
1. one who is either engaged to perform activities that are necessary or desirable in the
usual trade or business of the employer or
2. a casual employee who has rendered at least one year of service, whether continuous
or broken, with respect to the activity in which he is employed.
FACTS: In May 1990, Arceo Arceo applied as a telephone operator with PLDT, Tarlac
Exchange. She failed the pre-employment exam and she requested PLDT to allow her to work
without pay. PLDT agreed and assigned her to its commercial section where she was made to
perform various tasks like photocopying documents, sorting out telephone bills and notices of
disconnection, and other minor assignments and activities. After two weeks, PLDT decided to
pay her the minimum wage.
On February 15, 1991, PLDT saw no further need for Arceos services and decided to fire her.
She was recommended for an OJT on minor traffic work. When she failed to assimilate traffic
procedures, the company transferred her to auxiliary services, a minor facility. Subsequently,
Arceo took the pre-qualifying exams twice as a telephone operator, but failed on both attempts.
Finally, on October 13, 1991, PLDT discharged Arceo from employment.
LA: Arceos filed a case for illegal dismissal case against PLDT, in which the labor arbiter ruled
in favor of. PLDT was ordered to reinstate Arceo to her former position or to an equivalent
position. This decision became final and executory.
Arceo qualified to be a regular employee under the first criterion since her work, consisting
mainly of photocopying documents, sorting out telephone bills and disconnection notices, was
certainly necessary or desirable to the business of PLDT. Even if the contrary were true, the
uncontested fact is that she rendered service for more than one year as a casual employee,
which means that she is still eligible to be a regular employee under the second criterion.

On June 9, 1993, Arceo was reinstated as casual employee with a minimum wage of Php 106
per day. She was assigned to photocopy documents and sort out telephone bills. On September
3, 1996 or more than 3 years after her reinstatement, Arceo filed a complaint for unfair labor
practice, underpayment of salary, underpayment of overtime pay, holiday pay, rest day pay and
other monetary claims. She alleged in her complaint that, since her reinstatement, she had yet to
be regularized and had yet to receive the benefits due to a regular employee.
On August 18, 1997, labor arbiter ruled that Arceo was already qualified to become a
regular employee. He also found that petitioner denied her all the benefits and privileges of a
regular employee.
NLRC: Sided with Arceo insofar as it found Arceo eligible to become a regular employee. PLDT
sought a reconsideration of the decision but the NLRC rejected it for lack of merit.
CA: CA affirmed the contested decision of the NLRC. The CA likewise denied PLDTs motion for
reconsideration.
Even if the position was abolished, if indeed true, does not preclude Arceos becoming a regular
employee. The order to reinstate her also included the alternative to reinstate her to a position
equivalent thereto.
Considering that she has already worked in PLDT for more than one year at the time she was
reinstated, she should be entitled to all the benefits of a regular employee from June 9, 1993 ―
the day of her actual reinstatement.
PLDTs other contention that the regularization of respondent as telephone operator was not
possible since she failed in three qualifying exams for that position is also untenable. It is
understood that she will be regularized in the position she held prior to the filing of her complaint
with the labor arbiter, or, if that position was already abolished, to an equivalent position. The
position of telephone operator was never even considered in any of the assailed decisions of the
labor arbiter, the NLRC or the CA.

PLDT argues that while Article 280 of the Labor Code regularizes a casual employee who has
rendered at least one year of service (whether continuous or broken) the proviso is subject to the
condition that the employment subsists or the position still exists. Even if Arceo had rendered
more than one year of service as a casual employee, PLDT insisted that this fact alone would
not automatically make her a regular employee since her position had long been abolished.
PLDT also argues that it would be an even greater error if Arceo were to be regularized as a
telephone operator since she repeatedly failed the qualifying exams for that position.

ISSUE/S: WON Arceo is eligible to become a regular employee of PLDT.

YES

RATIO: Article 280 of the Labor Code, as amended, provides:

Art. 280. Regular and Casual Employment. ─ The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of engagement of the employee or where the work or services to be
performed is seasonal in nature and employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph. Provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.

A regular employee is:

1. one who is either engaged to perform activities that are necessary or desirable in the
usual trade or business of the employer or
2. a casual employee who has rendered at least one year of service, whether continuous
or broken, with respect to the activity in which he is employed.