LABOR REVIEW: Classed of Employees (August 28, 2019)
1. Abbott Laboratories v. Alcaraz Evaluation (PPSE) and Performance Excellence Orientation Modules
G.R. No. 192571, July 23, 2013 – Encarnacion
PETITIONERS: ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN
D. FEIST, MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G.
ALMAZAR
RESPONDENT:PEARLIE ANN F. ALCARAZ
EMPLOYER: Abbott Lab Phil.
EMPLOYEE: ALCARAZ, Pearlie Ann F.
LABOR ISSUE: Probationary Employment; communication of standards for
regularization
DOCTRINE: An employer is deemed to have made known the standards when it
has exerted reasonable efforts to apprise the employee of what he is expected
to do or accomplish during the trial period of probation (including probationary
status and length of time of probation). Standards need not be communicatedif
the job is self-descriptive in nature (e.g. maid, driver, etc.) The rule on notifying
a probationary employee of the standards of regularization should not be used
to exculpate an employee who acts in a manner contrary to basic knowledge
and common sense in regard to which there is no need to spell out a policy or
standard to be met.
FACTS
● On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott)
caused the publication in a major broadsheet newspaper of its need for a
Medical and Regulatory Affairs Manager (Regulatory Affairs Manager),
which included the job description for the position.
● On December 7, 2004, Abbott formally offered Alcaraz the
abovementioned position in the Hospira division. Abbott’s offer sheet
stated Alcaraz was to be employed on a probationary basis for 6 months.
She accepted it. The confirmation email from Abbott’s Recruitment Officer
contained the organizational structure and job description of her position.
The employment contract was also signed later on.
● During Alcaraz’s pre-employment orientation, petitioner Allan G. Almazar
(Almazar), Hospira’s Country Transition Manager, briefed her on her duties
and responsibilities as Regulatory Affairs Manager, which included the
evaluation of other probationary employees and implementation of
Abbott’s code of conduct.
● On March 3, 2005, petitioner Maria Olivia T. Yabut- Misa (Misa), Abbott’s
Human Resources (HR) Director, sent Alcaraz an e-mail which contained an
explanation of the procedure for evaluating the performance of
probationary employees and further indicated that Abbott had only one
evaluation system for all of its employees. Alcaraz was also given copies of
Abbott’s Code of Conduct and Probationary Performance Standards and
DEAD POOL
(Performance Modules) which she had to apply in line with her task of
evaluating the Hospira ALSU staff.
● Procedure for evaluation of probationary EEs:
○ Abbott’s PPSE procedure mandates that the job performance of a
probationary employee should be formally reviewed and
discussed with the employee at least twice: first on the third month
and second on the fifth month from the date of employment. The
necessary Performance Improvement Plan should also be made
during the third- month review in case of a gap between the
employee’s performance and the standards set. These
performance standards should be discussed in detail with the
employee within the first two (2) weeks on the job. It was equally
required that a signed copy of the PPSE form must be submitted to
Abbott’s Human Resources Department (HRD) and shall serve as
documentation of the employee’s performance during his/her
probationary period.
● During the course of her employment, Alcaraz would reprimand some of
the employees for their unprofessional behavior. However, Alcaraz’s
method of management was considered by Walsh to be “too strict.”
● On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible
(Terrible), Abbott’s former HR Director, to discuss certain issues regarding
staff performance standards. Alcaraz accidentally saw a printed copy of
an e-mail sent by Walsh to some staff members which essentially contained
queries regarding the former’s job performance. Alcaraz asked if Walsh’s
action was the normal process of evaluation. Terrible said that it was not.
● On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible
where she was informed that she failed to meet the regularization
standards for the position. Thereafter, Walsh and Terrible requested Alcaraz
to tender her resignation, else they be forced to terminate her. Despite
efforts to resist/negotiate, they terminated her, announced that she was
resigning due to health reasons to the whole staff, and confiscated her ID.
● On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to
Alcaraz a letter stating that her services had been terminated effective
May 19, 2005. The letter detailed the reasons for Alcaraz’s termination —
particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed
to gain the trust of her staff and to build an effective rapport with them; (c)
failed to train her staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on case processing and
article review which were necessary for the proper performance of her
duties.
● Alcaraz filed a complaint for illegal dismissal and damages.
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RULING OF THE LOWER COURTS
● The LA dismissed the complaint considering her admissions that she was
briefed by Almazar on her work during her pre-employment orientation
meeting and that she received copies of Abbott’s Code of Conduct and
Performance Modules which were used for evaluating all types of Abbott
employees.
● The NLRC reversed the LA, agreeing that she was not informed of the
standards at the time of her engagement. It held that Alcaraz’s receipt of
her job description and Abbott’s Code of Conduct and Performance
Modules was not equivalent to her being actually informed of the
performance standards upon which she should have been evaluated on.
It further observed that Abbott did not comply with its own standard
operating procedure in evaluating probationary employees. The NLRC was
also not convinced that Alcaraz was terminated for a valid cause given
that petitioners’ allegation of Alcaraz’s “poor performance” remained
unsubstantiated.
● The CA affirmed the NLRC ruling. This was based on its examination of the
employment contract which showed that the same did not contain any
standard of performance or any stipulation that Alcaraz shall undergo a
performance evaluation before she could qualify as a regular employee. It
also held that Abbott was unable to prove that there was any reasonable
ground to terminate Alcaraz’s employment.
PETITIONER’S CONTENTIONS: Petitioners maintained that Alcaraz was validly
terminated from her probationary employment given her failure to satisfy the
prescribed standards for her regularization which were made known to her at
the time of her engagement.
RESPONDENT'S CONTENTIONS: She claimed that she should have already been
considered as a regular and not a probationary employee given Abbott’s
failure to inform her of the reasonable standards for her regularization upon her
engagement as required under Article 295 of the Labor Code. She further
averred that the individual petitioners maliciously connived to illegally dismiss
her when: (a) they threatened her with termination; (b) she was ordered not to
enter company premises even if she was still an employee thereof; and (c) they
publicly announced that she already resigned in order to humiliate her.
ISSUES
● WON Alcaraz was sufficiently informed of the reasonable standards to
qualify her as a regular employee - YES
● WON Alcaraz was validly terminated from her employment - SORT OF;
substantively valid, but procedurally infirm
RATIO
DEAD POOL
Alcaraz was informed of the reasonable standards
● A probationary employee, like a regular employee, enjoys security of
tenure. The services of an employee who has been engaged on
probationary basis may be terminated for any of the following: (a) a just or
(b) an authorized cause; and (c) when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by the
employer.
● Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code
provides that if the employer fails to inform the probationary employee of
the reasonable standards upon which the regularization would be based
on at the time of the engagement, then the said employee shall be
deemed a regular employee.
● The employer is made to comply with two (2) requirements when dealing
with a probationary employee: first, the employer must communicate the
regularization standards to the probationary employee; and second, the
employer must make such communication at the time of the probationary
employee’s engagement.
● An employer is deemed to have made known the standards when it has
exerted reasonable efforts to apprise the employee of what he is expected
to do or accomplish during the trial period of probation (including
probationary status and length of time of probation).
○ XPN: job is self-descriptive in nature (e.g. maid, driver, etc.)
○ Also, in Aberdeen Court, Inc. v. Agustin, it has been held that the
rule on notifying a probationary employee of the standards of
regularization should not be used to exculpate an employee who
acts in a manner contrary to basic knowledge and common
sense in regard to which there is no need to spell out a policy or
standard to be met.
● In this case, Abbott did comply with these requirements.
○ The publication of its need for a Regulatory Affairs Manager
included the job description and the duties and responsibilities for
such.
○ The offer sheet indicated her probationary status.
○ The employment contract expressly stated that she was on
probation for a period of six (6) months beginning February 15,
2005 to August 14, 2005.
○ On the day Alcaraz accepted Abbott’s offer, Bernardo sent her
copies of Abbott’s organizational structure and her job
description through e-mail.
○ Alcaraz was made to undergo a pre-employment orientation
where Almazar informed her that she had to implement Abbott’s
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Code of Conduct and office policies on human resources and
finance and that she would be reporting directly to Walsh.
○ Alcaraz was also required to undergo a training program as part
of her orientation.
○ Alcaraz received copies of Abbott’s Code of Conduct and
Performance Modules from Misa who explained to her the
procedure for evaluating the performance of probationary
employees; she was further notified that Abbott had only one
evaluation system for all of its employees.
○ Moreover, Alcaraz had previously worked for another
pharmaceutical company and had admitted to have an
“extensive training and background” to acquire the necessary
skills for her job.
● The totality of the circumstances show that Alcaraz was aware that her
regularization would depend on her ability and capacity to fulfill the
requirements of her position as Regulatory Affairs Manager and that her
failure to perform such would give Abbott a valid cause to terminate her
probationary employment. basic knowledge and common sense dictate
that the adequate performance of one’s duties is, by and of itself, an
inherent and implied standard for a probationary employee to be
regularized.
● the assessment of adequate duty performance is in the nature of a
management prerogative which when reasonably exercised — as Abbott
did in this case — should be respected. This is especially true of a
managerial employee like Alcaraz who was tasked with the vital
responsibility of handling the personnel and important matters of her
department.
● Termination Procedure for Probationary EE
● Usual two-notice rule N/A
● Sufficient that a written notice is served the employee, within a
reasonable time from the effective date of termination
● Here, Alcaraz’s dismissal was effected through a letter dated May
19, 2005 which she received on May 23, 2005 and again on May
27, 2005. Stated therein were the reasons for her termination. Thus,
Abbott complied.
TERMINATION PROCEDURALLY INFIRM: Abbott violated its own company policy
and procedure
● Abbott breached its contractual obligation to Alcaraz when it failed to
abide by its own procedure in evaluating the performance of a
probationary employee. A company policy partakes of the nature of an
implied contract between the employer and employee and creates an
obligation on the part of both the employee and the employer to abide by
the same.
DEAD POOL
● In this case, Abbott failed to follow the procedure in evaluating Alcaraz.
○ No evidence that a signed copy of Alcaraz’s PPSE form was
submitted to the HRD. It was not even shown that a PPSE form was
completed to formally assess her performance.
○ Neither was the performance evaluation discussed with her
during the third and fifth months of her employment.
○ Nor did Abbott come up with the necessary Performance
Improvement Plan to properly gauge Alcaraz’s performance with
the set company standards.
● While it is Abbott’s management prerogative to promulgate its own
company rules and even subsequently amend them, this right equally
demands that when it does create its own policies and notifies its employee
of the same, it accords upon itself the obligation to faithfully implement
them.
● Thus, the fact that it violated its own company procedure renders the
termination of Alcaraz’s employment procedurally infirm, warranting the
payment of nominal damages.
DISPOSITION: WHEREFORE, the petition is GRANTED. The Decision dated
December 10, 2009 and Resolution dated June 9, 2010 of the Court of Appeals
in CA-G.R. SP No. 101045 are hereby REVERSED and SET ASIDE. Accordingly, the
Decision dated March 30, 2006 of the Labor Arbiter is REINSTATED with the
MODIFICATION that petitioner Abbott Laboratories, Philippines be ORDERED to
pay respondent Pearlie Ann F. Alcaraz nominal damages in the amount of
P30,000.00 on account of its breach of its own company procedure.
SO ORDERED.
BRION, J. DISSENT
● The law and the rules require that these performance standards are
communicated at the time of engagement to the probationary employee.
The performance standards to be met are the employer’s specific
expectations of how the probationary employee should perform.
Knowledge of duties and responsibilities is different from the measure of
how these duties and responsibilities should be delivered. They are separate
elements and the latter element is missing in the present case.
● Not only must there be express performance standards (except in specific
instances defined in the implementing rules, discussed below); there must
be effective communication. If no standards were provided, what would
be communicated?
● The complexity of a managerial job must necessarily require that the level
of performance to be delivered must be specified and cannot simply be
assumed based on the communication of the manager’s duties and
responsibilities.
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● The ponencia also forgets that what these “performance standards” or
measures cannot simply be assumed because they are critically important
in this case, or for that matter, in any case involving jobs whose duties and
responsibilities are not simple or self-descriptive.
● The respondent’s knowledge of the duties that her work entailed, and her
knowledge of the employer’s performance standard, are two distinct
matters separately requiring the presentation of independent proof.
● The documents and manuals given were, in fact, given by the petitioner to
assist her in monitoring the employees assigned to her department, i.e., as
the documents she must rely on in conducting the performance
evaluations of the staff assigned to her department. In short, the
respondent received the documents because they were necessary in the
discharge of her functions.
● Notably, the law requires proof that the employer specifically made known
to her the performance standards applicable to her to enable her to qualify
for regular employment. The required communication must be an effective
one if the law were to be given meaningful substance, not a mere
perfunctory transmission of information.
2. PNOC v. Buenviaje
G.R. Nos. 183200-01. June 29, 2016 – Laqui
Petitioner: PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT
CORPORATION and/or PAUL AQUINO and ESTER R. GUERZON,
Respondent: AMELYN A. BUENVIAJE
G.R. Nos. 183253 & 183257. June 29, 2016.*
Petitioner:AMELYN A. BUENVIAJE
Respondent: PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT
CORPORATION, PAUL A. AQUINO and ESTER R. GUERZON
Employer: PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT
CORPORATION
Employee: AMELYN A. BUENVIAJE
Labor Issue: Regular Employee vs. Probationary
Doctrine: A probationary employee is defined as one who is on trial by an
employer during which the employer determines whether or not he is qualified
for permanent employment. In general, probationary employment cannot
exceed six (6) months, otherwise the employee concerned shall be considered
a regular employee. It is also indispensable in probationary employment that
DEAD POOL
the employer informs the employee of the reasonable standards that will be
used as a basis for his or her regularization at the time of his or her engagement.
If the employer fails to comply with this, then the employee is considered a
regular employee.
FACTS:
• Philippine National Oil Company-Energy Development Corporation
(PNOC-EDC) hired Amelyn Buenviaje as Assistant to the then
Chairman/President and Chief Executive Officer Sergio A.F. Apostol, her
father. Buenviaje’s employment contract provided that she will serve until
June 30, 2004 or coterminous with the tenure of Apostol, whichever comes
first. On Aug 4, 2003, Apostol approved the creation of PNOC-EDC’s new
Marketing Division composed of thirty (30) positions. Seven (7) of these thirty
(30) positions were also newly created one of which was that of a Marketing
Division Manager. Buenviaje assumed this position as early as the time of
the creation of the Marketing Division. On Jan 5, 2004, Apostol filed his
Certificate of Candidacy as Governor for the province of Leyte, yet
continued to discharge his functions as President in PNOC- EDC. Buenviaje
also continued to perform her duties as Assistant to the Chairman/President
and Marketing Division Manager in PNOC-ED.
• On Feb 2, 2004, Paul Aquino (Aquino), the new President of PNOC-EDC,
appointed Buenviaje to the position of Senior Manager for Marketing
Division effective February 1, 2004. The appointment letter of Buenviaje
provides that Human Resources Management Division is instructed to
amend your present employment status from your present position as
Assistant to the President (co- terminus) to regular status and as such you
will be entitled to all the rights and privileges granted to your new position
under the company’s benefit policies subject to existing rules and
regulations. Buenviaje affixed her signature to the letter, signifying that she
has read and understood its contents.
• Buenviaje was subjected to a performance appraisal. She received a
satisfactory grade of three. In her subsequent performance appraisal
covering, she received an unsatisfactory grade of four. Thus, The Vice
President for Corporate Affairs of PNOC- EDC, informed Buenviaje that she
did not qualify for regular employment.
• PNOC-EDC, through Guerzon, communicated in writing to Buenviaje her
non- confirmation of appointment as well as her separation from the
company.
• Buenviaje responded by filing a complaint before the Labor Arbiter for
illegal dismissal.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Ruling of the Lower Court
LA: The Labor Arbiter rendered a decision in favor of Buenviaje. It held that
Buenviaje was a regular employee because her appointment letter clearly says
so.
NLRC: The NLRC agreed with the Labor Arbiter that Buenviaje was a regular
employee of PNOC-EDC, noting that the terms of her appointment expressly
grants a regular status of employment.
CA: The CA found no reason to disturb the findings of both the Labor Arbiter and
the NLRC that Buenviaje was a regular employee of PNOC-EDC.
ISSUE: Whether Buenviaje was a permanent employee?
RULING: YES, Buenviaje was a permanent employee.
• Buenviaje was hired as a Marketing Division Manager, a position that
performs activities that are usually necessary and desirable to the business
of PNOC-EDC and is thus, regular.
• of his or her engagement. If the employer fails to comply with this, then the
As an employer, PNOC-EDC has an exclusive management prerogative to
hire someone for the position, either on a permanent status right from the
start or place him first on probation. In either case, the employee’s right to
security of tenure immediately attaches at the time of hiring. As a
permanent employee, he may only be validly dismissed for a just or
authorized cause. As a probationary employee, he may also be validly
dismissed for a just or authorized cause, or when he fails to qualify as a
regular employee in accordance with reasonable standards made known
to him by the employer at the time of his engagement. Apart from the
protection this last ground in the dismissal of a probationary employee
affords the employee, it is also in line with the right or privilege of the
employer to choose who will be accorded with regular or permanent status
and who will be denied employment after the period of probation. It is
within the exercise of this right that the employers may set or fix a
probationary period within which it may test and observe the employee’s
conduct before hiring him permanently.
• Here, PNOC-EDC exercised its prerogative to hire Buenviaje as a
permanent employee right from the start or on February 1, 2004, the
effectivity date of her appointment. In her appointment letter, PNOC-EDC’s
President expressly instructed the HRMD to amend Buenviaje’s status from
coterminous to regular. He also informed her that her regular status shall be
retroactive to July 1, 2001. Nowhere in the appointment letter did PNOC-
EDC say that Buenviaje was being hired on probationary status. Upon
DEAD POOL
evaluation on two (2) occasions, PNOC-EDC used a performance appraisal
form intended for permanent managerial employees, even if the company
had a form for probationary employees. The intention, therefore, all along
was to grant Buenviaje regular or permanent employment.
• ThE intention was clear notwithstanding the clause in the appointment
letter saying that Buenviaje’s appointment was subject to confirmation by
her immediate superior based on her performance during the next six (6)
months. This clause did not make her regularization conditional, but rather,
effectively informed Buenviaje that her work performance will be
evaluated later on.
• A probationary employee is defined as one who is on trial by an employer
during which the employer determines whether or not he is qualified for
permanent employment. In general, probationary employment cannot
exceed six (6) months, otherwise the employee concerned shall be
considered a regular employee. It is also indispensable in probationary
employment that the employer informs the employee of the reasonable
standards that will be used as a basis for his or her regularization at the time
employee is considered a regular employee.
• In their reply to Buenviaje dated July 28, 2004, PNOC- EDC reminded
Buenviaje that the standards “were thoroughly discussed with [her]
separately soon after [she] signed [her] contract, as well as that which was
contained in the job description attached thereto. PNOC-EDC maintained
this position in its appeal memorandum, asserting that Buenviaje was
apprised of the reasonable standards for regularization by virtue of the job
description attached to her appointment. They also alleged that the
standards were discussed with Buenviaje prior to her first and second
appraisals, The Court, however, do not find these circumstances sufficient
to categorize Buenviaje as a probationary employee.
DISPOSITION: WHEREFORE, the petition in G.R. Nos. 183200-01 is DENIED while the
petition in G.R. Nos. 183253 and 183257 is PARTIALLY GRANTED. The October 31,
2007 Decision and June 3, 2008 Resolution of the CA in C.A.- G.R. S.P. Nos. 94359
and 94458 are AFFIRMED with the MODIFICATION that PNOC-EDC is ordered to
pay Amelyn Buenviaje moral damages in the amount of P30,000.00 exemplary
damages in the amount of P25,000, and attorney’s fees equivalent to ten
percent (10%) of the total award of backwages.
3. Umali v. Hobbywing Solutions, Inc.
G.R. No. 221356, March 14, 2018 – Manzo
Petitioner: MARIA UMALI
Respondents: HOBBYWING SOLUTIONS, INC.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Employer Hobbywing (online casino gaming establishment)
Employee/Union Maria Umali
Labor Issue Valid Extension of Probationary Period
DOCTRINE: Generally, the probationary period of employment is limited to six
(6) months. The exception to this general rule is when the parties to an
employment contract may agree otherwise, such as when the same is
established by company policy or when the same is required by the nature of
work to be performed by the employee.
Since extension of the period is the exception, rather than the rule, the employer
has the burden of proof to show that the extension is warranted and not simply
a stratagem to preclude the worker's attainment of regular status. Without a valid
ground, any extension of the probationary period shall be taken against the
employer especially since it thwarts the attainment of a fundamental right, that
is, security of tenure.
FACTS: Maria Umali filed a complaint for illegal dismissal against Hobbywing
Solutions (online casino gaming establishment) and its general manager, Pate
Tan.
She alleged that she started working as a Pitboss Supervisor for Hobbywing on
June 19, 2012. Her main duties entailed supervising online casino dealers as well
as the operations of the entire gaming area of the company. However, she
never signed any employment contract but regularly received her salary every
month.
Seven months after she started working for Hobbywing, she was asked to sign
two (2) employment contracts. The first one was for a period of 5 months (June
2012 to Nov 2012). The second one was for a period of 3 months (Nov 2012 to
Feb 2013). She signed both contracts as directed.
On Feb 2013, she was informed that her employment has already ended and
was told to just wait for advice whether she will be rehired or regularized. She
was also required to sign an exit clearance to clear her from accountabilities.
She was no longer allowed to work thereafter.
Thus, she filed the complaint.
Hobbywing admitted they hired Umali as Pitboss Supervisor on probationary
basis from June 2012 to Nov 2012. They claimed that petitioner’s probationary
status was extended for 3 months (second contract) with Umali’s conformity.
After receiving commendable rating by the end of her extended probationary
period, the petitioner was advised that the company will be retaining her
services. However, Hobbywing alleges that Umali declined because her best
friend, a co-employee, was not retained by the company.
DEAD POOL
According to Hobbywing, Umali herself processed her exit clearance. And as a
sign of good will, Hobbywing even issued a Waiver of Non-Competition
Agreement and a Certificate of Employment indicating Umali’s commendable
performance.
RULING OF THE LOWER COURTS:
LA: The Labor Arbiter denied the illegal dismissal complaint but ordered
Hobbywing to pay Umali night shift differentials whenever applicable. Umali
appealed to the NLRC.
NLRC: NLRC partly granted the appeal. Umali was declared a regular employee
who was illegally dismissed. Hobbywing was ordered to reinstate her, pay full
backwages and damages. NLRC reasoned that Umali became a regular
employee by operation of law when she was allowed to work beyond the initial
probationary period of employment.
CA: CA granted Hobbywing’s appeal and reversed the NLRC decision. CA held
that Umali failed to prove the fact of her dismissal and agreed with the LA that
Umali voluntary severed the EER.
PETITIONER’s CONTENTION: Umali claims that she already attained the status of
regular employment after she was suffered to work for more than 6 months of
probationary employment. She reiterates that she has already rendered 7
months of work before she was belatedly asked to sign the 2 employment
contracts.
RESPONDENT’S CONTENTION: Hobbywing maintains that there was a contract of
probationary employment signed at the beginning of the petitioner's service
and another one signed on November 18, 2012, extending the probationary
period purportedly to give the petitioner a chance to improve her performance
and qualify for regular employment.
ISSUE: W/N Umali obtained the status of a regular employee and if she was
illegally dismissed – YES TO BOTH.
RULING: Umali was a regular employee and was illegally dismissed. CA
decision reversed and set aside. NLRC decision reinstated.
It is beyond dispute that the petitioner started working for the respondent on
June 19, 2012 as a probationary employee and that there were two (2)
employment contracts signed by the parties. The parties, however, held
conflicting claims with respect to the time when the contracts were signed. The
LA and the CA, however, opted to believe the respondent's claim that the
contract of probationary employment was signed and extended on time.
There was, however, a single detail which convinced this Court to take a second
look at the facts of case. Contradicting the respondent's claim, the petitioner
consistently reiterates that she was made to sign two contracts of probationary
employment, one covering the period from June 19, 2012 to November 18, 2012,
and the other purportedly extending the probationary employment from
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November 19, 2012 to February 18, 2013, only on January 19, 2013. To support
her claim, she alleged that she was able to note the actual date when she
signed the contracts, right beside her signature. And indeed, attached with the
position paper submitted by the respondent itself, copies of the two contracts of
employment signed by the petitioner clearly indicates the date "01.19.13"
beside her signature. This substantiates the petitioner's claim that the documents
were signed on the same day, that is, on January 19, 2013. Further, while the first
contract was undated, the Probation Extension Letter was dated January 10,
2013,27 which was way beyond the end of the supposed probationary period of
employment on November 18, 2013, therefore validating the petitioner's claim
that she had already worked for more than six months when she was asked to
sign an employment contract and its purported extension.
This brings to the conclusion that the contracts were only made up to create a
semblance of legality in the employment and severance of the petitioner.
Unfortunately for the respondent, the significant details left unexplained only
validated the petitioner's claim that she had served way beyond the allowable
period for probationary employment and therefore has attained the status of
regular employment.
Article 281 of the Labor Code is pertinent. It provides:
ART. 281. Probationary Employment. - Probationary employment
shall not exceed six (6) months from the date the employee
started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an
employee who has been engaged on a probationary basis may
be terminated for a just cause or when he fails to qualify as a
regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
In this case, the petitioner commenced working for the respondent on June 19,
2012 until February 18, 2013. By that time, however, she has already become a
regular employee, a status which accorded her protection from arbitrary
termination.
The CA, however, believes that the probationary period of employment was
validly extended citing Mariwasa vs. Leogardo. In the said case, the Court
upheld as valid the extension of the probationary period for another three (3)
months in order to give the employee a chance to improve his performance
and qualify for regular employment, upon agreement of the parties. Upon
conclusion of the period of extension, however, the employee still failed to live
up to the work standards of the company and was thereafter terminated.
The mentioned case, however, finds no application in the instant case for two
reasons: (1) there was no evaluation upon the expiration of the period of
DEAD POOL
probationary employment; (2) the supposed extension of the probationary
period was made after the lapse of the original period agreed by the parties.
Generally, the probationary period of employment is limited to six (6) months.
The exception to this general rule is when the parties to an employment contract
may agree otherwise, such as when the same is established by company policy
or when the same is required by the nature of work to be performed by the
employee.
Since extension of the period is the exception, rather than the rule, the employer
has the burden of proof to show that the extension is warranted and not simply
a stratagem to preclude the worker's attainment of regular status. Without a
valid ground, any extension of the probationary period shall be taken against
the employer especially since it thwarts the attainment of a fundamental right,
that is, security of tenure.
In the instant case, there was no valid extension of the probationary period since
the same had lapsed long before the company thought of extending the same.
More significantly, there is no justifiable reason for the extension since, on the
basis of the Performance Evaluation dated February 1, 2013, the petitioner had
a commendable performance all throughout the probationary period.
DISPOSITION: WHEREFORE, CA Decision is REVERSED and SET ASIDE. The NLRC
Decision is REINSTATED.
4. Kimberly Clark Philippines v. Sec. of Labor
G.R. No. 156668, AUG 13, 1993 - Nitro
Petitioner: KIMBERLY INDEPENDENT LABOR UNION FOR SOLIDARITY, ACTIVISM
AND NATIONALISM (KILUSAN)
Respondents: NATIONAL LABOR RELATIONS COMMISSION (NLRC), LABOR
ARBITER ISABEL P. ORTIGUERA, and KIMBERLY-CLARK (PHIL.), INC.,
Employer KIMBERLY-CLARK (PHIL.), INC.,
KIMBERLY INDEPENDENT LABOR UNION FOR SOLIDARITY,
Employee/Union ACTIVISM AND NATIONALISM (KILUSAN)
Labor Issue REGULAR EMPLOYEE
DOCTRINE: The law 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.
FACTS:
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LABOR REVIEW: Classed of Employees (August 28, 2019)
• On June 30, 1986, the Collective Bargaining Agreement executed by and
between Kimberly-Clark (Phils.), Inc., (Kimberly) and United Kimberly-Clark
Employees Union-Philippine Transport and General Workers Organization
(UKCEO-PTGWO) expired.
• On April 21, 1986, KILUSAN-OLALIA, then a newly-formed labor organization,
challenged the incumbency of UKCEO-PTGWO, by filing a petitionLA: forOrdering Kimberly Clark (Phil.), (sic) Inc. to reinstate all respondents and counter-
certification election with the Ministry of Labor and Employment (MOLE).
• A certification election was subsequently conducted on July 1, 1986 NLRCwith RULED in favour of the Union
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
• 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 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.
• Judgment in GR No. 77629:
• Ordering the med-arbiter to open 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;
• Ordering KIMBERLY to pay the workers who have been regularized their
differential pay with respect to minimum wage, COLA, 13th month pay,
and benefits provided for under the applicable CBA from the time they
became regular employees.
• 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
• 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 (dismissed) only pertained to casuals who had rendered one year of
service as of April 21, 1986, the filing date of KILUSAN-OLALIAs petition for
certification election. On December 6, 2000, however, the DOLE denied the
motion
DEAD POOL
• Kimberly filed a petition for certiorari before the CA alleging that the
employees who were dismissed due to the illegal strike should not be
awarded regularization differentials. CA dismissed Kimberly’s petition.
RULING OF THE LOWER COURTS:
complainants
PETITIONER’s CONTENTION:
RESPONDENT’s CONTENTION:
ISSUE: Whether or not CA erred in dismissing Kimberly’s petition – NO.
RULING:
The law 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.
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.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
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 situate.
DISPOSITION: The petition is PARTIALLY GRANTED. The petition is REMANDED to
the Court of Appeals for adjudication on the merits. The CA is further DIRECTED
TO CONSOLIDATE CA-G.R. SP No. 60035 with CA-G.R. SP No. 60001, and to
resolve the cases with dispatch.
5. Rowell Industrial Corporation v. CA
G.R. NO. 167714 : March 7, 2007 – Ruelo
Petitioners: ROWELL INDUSTRIAL CORPORATION
Respondent: HON. COURT OF APPEALS and JOEL TARIPE
Employer: ROWELL INDUSTRIAL CORPORATION
Employee: JOEL TARIPE
Labor Issue: Regular Employment
Doctrine: 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
FACTS:
• Petitioner RIC is a corporation engaged in manufacturing tin cans for use in
packaging of consumer products. Respondent Taripe was employed by
petitioner RIC on as a "rectangular power press machine operator" with a
salary of P223.50 per day, until he was allegedly dismissed from his
employment by the petitioner on 6 April 2000.
• Taripe filed a complaint against 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. [Respondent Taripe] alleges that
RIC employed him 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. Respondent 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. Respondent Taripe states that he was not
extended full benefits granted under the law and the CBA and that, while
the case for regularization was pending, he was summarily dismissed from
his job although he never violated any of the RIC's company rules and
regulations.
DEAD POOL
• Petitioner 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.
RULING OF THE LOWER COURTS:
LA: the Labor Arbiter rendered a Decision dismissing respondent Taripe's
Complaint based on a finding that he was a contractual employee whose
contract merely expired.
NLRC: the NLRC granted the appeal filed by respondent Taripe and declared
that his employment with the petitioner was regular in status; hence, his dismissal
was illegal.
PETITIONER’S CONTENTION: Respondent Taripe alleges that petitioner RIC
employed him starting 8 November 1999 as power press machine operator, such
position of which was occupied by petitioner RIC's regular employees and the
functions of which were necessary to the latter's business. Respondent 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. Respondent 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.
RESPONDENT’S CONTENTION: Petitioner RIC, for its part, claims that respondent
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.
ISSUE: WON respondent Taripe is a regular employee - YES
RATIO:
The law provides that 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. In the instant case, there is
no doubt that Taripe, as power press operator, has been engaged to perform
activities which are usually necessary or desirable in RIC's usual business or trade
of manufacturing of tin cans for use in packaging of food, paint and others. We
also find that [respondent Taripe] does not fall under any of the
abovementioned exceptions. Other than petitioner’s bare allegation thereof, it
failed to present any evidence to prove that he was employed for a fixed or
specific project or undertaking the completion of which has been determined
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LABOR REVIEW: Classed of Employees (August 28, 2019) DEAD POOL

at the time of his engagement or that Taripe's services are seasonal in nature • Petitioner employed respondents Nazareno, Gerzon, Deiparine, and
and that his employment was for the duration of the season. Lerasan as production assistants (PAs) on different dates. They were
assigned at the news and public affairs, for various radio programs in the
DISPOSITION:
WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Cebu Broadcasting Station, with a monthly compensation of P4,000. They
Decision and Resolution of the Court of Appeals dated 30 September 2004 and were issued ABS-CBN employees’ identification cards and were required to
1 April 2005, respectively, which affirmed with modification the Resolutions of the work for a minimum of eight hours a day, including Sundays and holidays.
NLRC dated 7 June 2002 and 20 August 2002, respectively, finding herein They were made to perform the following tasks and duties: a) Prepare,
respondent Taripe as a regular employee who had been illegally dismissed from arrange airing of commercial broadcasting based on the daily operations
employment by petitioner RIC, are hereby AFFIRMED. Costs against petitioner
RIC. SO ORDERED. log and digicart of respondent ABS-CBN; b) Coordinate, arrange
personalities for air interviews; c) Coordinate, prepare schedule of
6. PLDT v. Arceo reporters for scheduled news reporting and lead-in or incoming reports;
– Encarnacion d) Facilitate, prepare and arrange airtime schedule for public service
announcement and complaints; e) Assist, anchor program interview, etc.;
7. ABS-CBN Broadcasting Corp. v. Nazareno
and f) Record, log clerical reports, man based control radio.
G.R. No. 164156. September 26, 2006 – Laqui
• The PAs were under the control and supervision of Assistant Station
Petitioner:ABS-CBN BROADCASTING CORPORATION Manager Dante J. Luzon, and News Manager Leo Lastimosa.
Respondent:MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and • Petitioner and the ABS-CBN Rank-andFile Employees executed a Collective
JOSEPHINE LERASAN Bargaining Agreement (CBA). However, since petitioner refused to
recognize PAs as part of the bargaining unit, respondents were not
included to the CBA. Petitioner issued a Memorandum informing the PAs
Employer: ABS-CBN BROADCASTING CORPORATION
that they would be assigned to non-drama programs, and that the DYAB
Employee: MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, studio operations would be handled by the studio technician.
and JOSEPHINE LERASAN • Respondents filed a Complaint for Recognition of Regular Employment
Who are regular employees? Status
Labor Issue:

Ruling of the Lower Court

Doctrine: There are two kinds of regular employees under the law: (1) those
LA: Labor Arbiter rendered judgment in favor of the respondents, and declared
engaged to perform activities which are necessary or desirable in the usual
that they were regular employees of petitioner.
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
NLRC: The NLRC rendered judgment modifying the decision of the Labor Arbiter.
respect to the activities in which they are employed.
It ruled that respondents were entitled to the benefits under the CBA because
they were regular employees
FACTS:
CA: The appellate court stated that respondents are not mere project
• Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the
employees, but regular employees who perform tasks necessary and desirable
broadcasting business and owns a network of television and radio stations,
in the usual trade and business of petitioner and not just its project employees.
whose operations revolve around the broadcast, transmission, and relay of
telecommunication signals. It sells and deals in or otherwise utilizes the
ISSUE: Whether the workers are regular employees of ABSCBN?
airtime it generates from its radio and television operations. It has a
franchise as a broadcasting company, and was likewise issued a license
RULING: YES, The worker’s are regular employees of ABS CBN. The Court rejected
and authority to operate by the National Telecommunications Commission.
ABSCBN’s contention that respondents are considered as its talents, hence, not

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regular employees of the broadcasting company. Its claim that the functions
performed by the respondents are not at all necessary, desirable, or even vital
to its trade or business is belied by the evidence on record.
The Court agreed with worker’s 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.
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. 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.
The principal test is whether or not the project employees were assigned to carry
out a specific project or undertaking, the duration and scope of which were
specified at the time the employees were engaged for that project.
DEAD POOL
In this case, it is undisputed that respondents had continuously performed the
same activities for an average of five years. Their assigned tasks are necessary
or desirable in the usual business or trade of the petitioner. The persisting need
for their services is sufficient evidence of the necessity and indispensability of
such services to petitioner’s business or trade. While length of time may not be
a sole controlling test for project employment, it can be a strong factor to
determine whether the employee was hired for a specific undertaking or in fact
tasked to perform functions which are vital, necessary and indispensable to the
usual trade or business of the employer.
The Court note further that petitioner did not report the termination of
respondents’ employment in the particular “project” to the Department of
Labor and Employment Regional Office having jurisdiction over the workplace
within 30 days following the date of their separation from work, using the
prescribed form on employees’ termination/dismissals/suspensions
DISPOSITION:IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of
merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 76582 are AFFIRMED. Costs against petitioner. SO ORDERED.
8. FULACHE v. ABS-CBN
G.R. No. 183810, January 21, 2010 - Manzo
Petitioner: Farley Fulache, et al.
Respondents: ABS-CBN Broadcasting Corp.
Employer ABS-CBN
Fulache, Jabonero, Castillo, Lagunzad, Bigno, Cabas,
Employee/Union
Ponce, Almendras (drivers, cameramen, and editors)
Status of Regular Employees
Labor Issue
DOCTRINE: By claiming redundancy as the authorized cause for dismissal, the
employer impliedly admits that the workers were regular employees whose
services, by law, can only be terminated for the just and authorized causes
defined under the Labor Code.
FACTS: The petitioners in this case are questioning the CBA executed between
ABS-CBN and the ABS-CBN Rank-and-File Employees Union (Union) because
under such agreement, they are only considered as temporary and not regular
employees. The petitioners claimed that they should be recognized as regular
employees of ABS-CBN because they had already rendered more than a year
of service in the company so they should be entitled to the benefits of a regular
employee.
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Instead of salaries, ABS-CBN pointed out that petitioners were “talents” who are
paid pre-arranged considerations called “talent fees” taken from the budget of
a particular program and subject to a ten percent (10%) withholding
tax. Talents do not undergo probation. Their services are engaged for a specific
program or production, or a segment thereof. Their contracts are terminated
once the program, production or segment is completed.
ABS-CBN alleged that the petitioners’ services were contracted on various dates
by its Cebu station as independent contractors/off camera talents, and so they
are not entitled to regularization.
Labor Arbiter rendered his decision holding that the petitioners were regular
employees of ABS-CBN, not independent contractors, and are entitled to the
benefits and privileges of regular employees
ABS-CBN appealed the ruling to the NLRC, claiming that the petitioners were
independent contractors, not regular employees.
While the appeal of the regularization case was pending, ABS-CBN dismissed
the petitioners when the latter refused to sign resignation letters from the
company and undertake new contracts of employment with service
contractor, Able Services. Petitioners responded by filing a complaint for illegal
dismissal.
RULING OF THE LOWER COURTS:
LA: LA ruled that Fulache, et al., were regular employees but upheld the validity of
ABS-CBN's contracting out of certain work or services in its operations under the
authorized cause of redundancy. (regular EEs; valid dismissal)
NLRC: NLRC sustained ruling on petitioners being regular employees because the
company exercised control over the petitioners in the performance of their work
and they were engaged to perform activities usually necessary and desirable
to the business. However, it held that petitioners had been illegally dismissed and
awarded them backwages and separation pay in lieu of reinstatement in
addition to the CBA benefits from the time they became regular employees up
to the time of their dismissal. (regular EEs; illegal dismissal)
CA: CA reinstated LA decision and held that petitioners were regular EEs but were
NOT illegally dismissed.
PETITIONER’s CONTENTION: Petitioners claim that they are rank-and-file EEs
based on the nature and period of their work. They also alleged ABS-CBN was
in bad faith because it abolished their positions only after the LA had already
DEAD POOL
held that they were regular employees. Furthermore, they were terminated from
work when they refused comply with ABS-CBN’s instructions to submit resignation
letters and sign new contracts with the contracting agency.
RESPONDENT’S CONTENTION: ABS-CBN argues that petitioners are not its EEs
because the production of programs per se is not necessary or desirable in its
business as it generates profits by selling airtime, not shows. Also, petitioners were
not singled out for dismissal. They were dismissed because they belonged to a
job category that has already been contracted out to improve ABS-CBN’s
operations and to make them more economically viable.
ISSUES: (1) W/N Fulache, et al were regular employees; (2) W/N they were
illegally dismissed – YES TO BOTH.
RULING: Petitioners are regular employees who were illegally dismissed.
The petitioners are members of the appropriate bargaining unit because they
are regular rank-and-file employees and do not belong to any of the excluded
categories. Nothing in the records shows that they are supervisory or confidential
employees; neither are they casual nor probationary employees. Most
importantly, the labor arbiter’s decision – affirmed all the way up to the CA level
– ruled against ABS-CBN’s submission that they are independent contractors.
Thus, as regular rank-and-file employees, they fall within CBA coverage under
the CBA’s express terms and are entitled to its benefits.
The records show that the regularization case was in fact the root of the resulting
bad faith as this case gave rise and led to the dismissal case. First, the
regularization case was filed leading to the labor arbiter’s decision declaring the
petitioners, including Fulache, Jabonero, Castillo and Lagunzad, to be regular
employees. ABS-CBN appealed the decision and maintained its position that
the petitioners were independent contractors.
In the course of this appeal, ABS-CBN took matters into its own hands and
terminated the petitioners’ services, clearly disregarding its own appeal then
pending with the NLRC. Notably, this appeal posited that the petitioners were
not employees (whose services therefore could be terminated through dismissal
under the Labor Code); they were independent contractors whose services
could be terminated at will, subject only to the terms of their contracts. To justify
the termination of service, the company cited redundancy as its authorized
cause but offered no justificatory supporting evidence. It merely claimed that it
was contracting out the petitioners’ activities in the exercise of its management
prerogative.
ABS-CBN’s intent, of course, based on the records, was to transfer the petitioners
and their activities to a service contractor without paying any attention to the
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requirements of our labor laws; hence, ABS-CBN dismissed the petitioners when
they refused to sign up with the service contractor. In this manner, ABS-CBN fell
into a downward spiral of irreconcilable legal positions, all undertaken in the
hope of saving itself from the decision declaring its "talents" to be regular
employees.
By doing all these, ABS-CBN forgot labor law and its realities.
It forgot that by claiming redundancy as authorized cause for dismissal, it
impliedly admitted that the petitioners were regular employees whose services,
by law, can only be terminated for the just and authorized causes defined under
the Labor Code.
DISPOSITION: CA Decision was reversed and set aside. Petitioners confirmed to
be regular employees of ABS-CBN whose dismissals were declared illegal. ABS-
CBN was ordered to reinstate them without loss of seniority rights with full
backwages and all other benefits from the time they were dismissed up to the
date of their actual reinstatement. Moral damages and attorney’s fees were
also awarded.
9. Fuji Television Network, Inc v. Arlene S. Espiritu - Nitro
Petitioner: FUJI TELEVISION NETWORK, INC.
Respondents: ARLENE S. ESPIRITU
Employer Arlene S. Espiritu
Employee/Union Fuji Television Network, Inc
Labor Issue Regular Employee
DOCTRINE: 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.
FACTS:
• Arlene S. Espiritu (Arlene) was engaged by Fuji Television Network, Inc. (Fuji)
as a news correspondent/producer tasked to report Philippine news to Fuji
DEAD POOL
through its Manila Bureau field office. The employment contract was initially
for one year, but was successively renewed on a yearly basis with salary
adjustments upon every renewal.
• In January 2009, Arlene was diagnosed with lung cancer. She informed Fuji
about her condition, and the Chief of News Agency of Fuji, Yoshiki Aoki,
informed the former that the company had a problem with renewing her
contract considering her condition. Arlene insisted she was still fit to work as
certified by her attending physician.
• After a series of verbal and written communications, Arlene and Fuji signed
a non-renewal contract. In consideration thereof, Arlene acknowledged
the receipt of the total amount of her salary from March-May 2009, year-
end bonus, mid-year bonus and separation pay. However, Arlene
executed the non-renewal contract under protest.
• Arlene filed a complaint for illegal dismissal with the NCR Arbitration Branch
of the NLRC, alleging that she was forced to sign the non-renewal contract
after Fuji came to know of her illness. She also alleged that Fuji withheld her
salaries and other benefits when she refused to sign, and that she was left
with no other recourse but to sign the non-renewal contract to get her
salaries.
•
RULING OF THE LOWER COURTS:
LA: dismissed the complaint and held that Arlene was not a regular employee
but an independent contractor
NLRC reversed the Labor Arbiter’s decision and ruled that Arlene was a regular
employee since she continuously rendered services that were necessary and
desirable to Fuji’s business.
PETITIONER’s CONTENTION:
RESPONDENT’s CONTENTION:
ISSUE: Whether or not Arlene was a regular employee – YES.
RULING:
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
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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.
However, there may be a situation where an employee’s work is necessary but
is not always desirable in the usual course of business of the employer. In this
situation, there is no regular employment.
Fuji’s Manila Bureau Office is a small unit213 and has a few employees. Arlene
had to do all activities related to news gathering.
A news producer “plans and supervises newscast [and] works with reporters in
the field planning and gathering information, including monitoring and getting
news stories, rporting interviewing subjects in front of a video camera, submission
of news and current events reports pertaining to the Philippines, and traveling
to the regional office in Thailand.” She also had to report for work in Fuji’s office
in Manila from Mondays to Fridays, eight per day. She had no equipment and
had to use the facilities of Fuji to accomplish her tasks.
The successive renewals of her contract indicated the necessity and desirability
of her work in the usual course of Fuji’s business. Because of this, Arlene had
become a regular employee with the right to security of tenure.
Arlene’s contract indicating a fixed term did not automatically mean that she
could never be a regular employee. For as long as it was the employee who
requested, or bargained, that the contract have a “definite date of
termination,” or that the fixed-term contract be freely entered into by the
employer and the employee, then the validity of the fixed-term contract will be
upheld.
Difference Between Fixed Term, Independent Contractor and Regular
Employee
Fixed Term Employment
1) The fixed period of employment was knowingly and voluntarily agreed upon
by the parties without any force, duress, or improper pressure being brought to
bear upon the employee and absent any other circumstances vitiating his
consent; or
2) It satisfactorily appears that the employer and the employee dealt with each
other on more or less equal terms with no moral dominance exercised by the
former or the latter.
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These indications, which must be read together, make the Brent doctrine
applicable only in a few special cases wherein the employer and employee are
on more or less in equal footing in entering into the contract. The reason for this
is evident: when a prospective employee, on account of special skills or market
forces, is in a position to make demands upon the prospective employer, such
prospective employee needs less protection than the ordinary worker. Lesser
limitations on the parties’ freedom of contract are thus required for the
protection of the employee.155 (Citations omitted)
For as long as the guidelines laid down in Brent are satisfied, this court will
recognize the validity of the fixed-term contract. (GMA Network, Inc. vs.
Pabriga)
Independent Contractor
One who carries on a distinct and independent business and undertakes to
perform the job, work, or service on its own account and under one’s own
responsibility according to one’s own manner and method, free from the control
and direction of the principal in all matters connected with the performance of
the work except as to the results thereof.
No employer-employee relationship exists between the independent
contractors and their principals.
Art. 106. Contractor or subcontractor. Whenever an employer enters into a
contract with another person for the performance of the former’s work, the
employees of the contractor and of the latter’s subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
XXX
The Secretary of Labor and Employment may, by appropriate regulations,
restrict or prohibit the contracting-out of labor to protect the rights of workers
established under this Code. In so prohibiting or restricting, he may make
appropriate distinctions between labor-only contracting and job contracting as
well as differentiations within these types of contracting and determine who
among the parties involved shall be considered the employer for purposes of
this Code, to prevent any violation or circumvention of any provision of this
Code.
There is “labor-only” contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall
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LABOR REVIEW: Classed of Employees (August 28, 2019)
be responsible to the workers in the same manner and extent as if the latter were
directly employed by him.
Department Order No. 18-A, Series of 2011, Section 3
(c) . . . an arrangement whereby a principal agrees to put out or farm out with
a contractor the performance or completion of a specific job, work or service
within a definite or predetermined period, regardless of whether such job, work
or service is to be performed or completed within or outside the premises of the
principal.
This department order also states that there is a trilateral relationship in legitimate
job contracting and subcontracting arrangements among the principal,
contractor, and employees of the contractor. There is no employer-employee
relationship between the contractor and principal who engages the
contractor’s services, but there is an employer-employee relationship between
the contractor and workers hired to accomplish the work for the
principal.162chanRoblesvirtualLawlibrary
Jurisprudence has recognized another kind of independent contractor:
individuals with unique skills and talents that set them apart from ordinary
employees. There is no trilateral relationship in this case because the
independent contractor himself or herself performs the work for the principal. In
other words, the relationship is bilateral.
XXX
There are different kinds of independent contractors: those engaged in
legitimate job contracting and those who have unique skills and talents that set
them apart from ordinary employees.
Since no employer-employee relationship exists between independent
contractors and their principals, their contracts are governed by the Civil Code
provisions on contracts and other applicable laws.
Regular Employees
Contracts of employment are different and have a higher level of regulation
because they are impressed with public interest. Article 13, Section 3 of the 1987
Constitution provides full protection to labor.
Apart from the Constitutional guarantee, Article 1700 of the Civil Code states
that : The relations between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the
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common good. Therefore, such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.
In contracts of employment, the employer and the employee are not on equal
footing. Thus, it is subject to regulatory review by the labor tribunals and courts
of law. The law serves to equalize the unequal. The labor force is a special class
that is constitutionally protected because of the inequality between capital and
labor.176 This presupposes that the labor force is weak.
DISPOSITION:
10. Pier 8 Arrastre & Stevedoring Services v. Boclot
G.R. NO. 173849 : September 28, 2007 – Ruelo
Petitioners: PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. and/ or ELIODORO
C. CRUZ
Respondent: JEFF B. BOCLOT
Employer: PIER 8 ARRASTRE & STEVEDORING SERVICES, INC
Employee: JEFF B. BOCLOT
Labor Issue: Regular Employment
Doctrine: Article 281 of the Labor Code further considers a regular employee as
one who is allowed to work after a probationary period. Based on the
aforementioned, although performing activities that are necessary or desirable
in the usual trade or business of the employer, an employee such as a project
or seasonal employee is not necessarily a regular employee.
FACTS:
• PASSI is a domestic corporation engaged in the business of providing
arrastre and stevedoring services5 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.
• On 9 May 2003, respondent filed a Complaint with the Labor Arbiter of the
NLRC, claiming regularization; payment of service incentive leave and 13th
month pays; moral, exemplary and actual damages; and attorney's fees.
Respondent alleged that he was hired by PASSI in October 1999 and was
issued company ID No. 304,8 a PPA Pass and SSS documents. In fact,
respondent contended that he became a regular employee by April 2000,
since it was his sixth continuous month in service in PASSI's regular course of
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LABOR REVIEW: Classed of Employees (August 28, 2019)
business. He argued on the basis of Articles 2809 and 28110 of the Labor
Code. He maintains that under paragraph 2 of Article 280, he should be
deemed a regular employee having rendered at least one year of service
with the company.
RULING OF THE LOWER COURTS:
LA: NLRC Labor Arbiter Felipe P. Pati ruled for petitioners and dismissed
respondent's complaint. In finding no factual or legal basis for the regularization
of respondent, the Labor Arbiter came to the conclusion that respondent was
"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.
NLRC: NLRC issued a Resolution on 29 October 2004 modifying the Labor Arbiter's
Decision. The NLRC gave credence to respondent's allegations that the Labor
Arbiter committed grave abuse of discretion in dismissing respondent's claim for
regularization. The NLRC 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.
PETITIONER’S CONTENTION: That private respondent was hired only in the
absence of regular stevedores, as petitioners maintain
RESPONDENT’S CONTENTION: Respondent maintains that under paragraph 2 of
Article 280, he should be deemed a regular employee having rendered at least
one year of service with the company.
ISSUE: WON Boclot is a regular employee – YES
RATIO:
Based on the circumstances of the instant case, this Court agrees. 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. Bearing in mind that respondent performed services from
September 1999 until June 2003 for a period of only 228.5 days in 36 months, or
roughly an average of 6.34 days a month; while a regular stevedore working for
petitioners, on the other hand, renders service for an average of 16 days a
month, demonstrates that respondent's employment is subject to the availability
of work, depending on the absences of the regular stevedores. Moreover,
respondent does not contest that he was well aware that he would only be
given work when there are absent or unavailable employees. Respondent also
does not allege, nor is there any showing, that he was disallowed or prevented
from offering his services to other cargo handlers in the other piers at the North
Harbor other than petitioners. As aforestated, the situation of respondent is akin
to that of a seasonal or project or term employee, albeit on a daily basis.
DEAD POOL
DISPOSITION:
WHEREFORE, in view of the foregoing, the instant Petition is DENIED and the
Decision of the Court of Appeals dated 18 November 2005 and its Resolution
dated 21 January 2006, in CA-G.R. SP No. 88929 are AFFIRMED in the manner
herein discussed. Costs against petitioners. SO ORDERED.
11. The Peninsula Manila v. Alipi
G.R. No. 167310. June 17, 2008 – Probadora
Petitioner: THE PENINSULA MANILA, ROLF PFISTERER AND BENILDA QUEVEDO-
SANTOS
Respondents: ELAINE M. ALIPIO
DOCTRINE: 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.
FACTS:
• 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
• 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.
• 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.
• 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.
• Alipio filed a complaint for illegal dismissal against the petitioners.
RULING OF THE LOWER COURTS:
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LABOR REVIEW: Classed of Employees (August 28, 2019)
LA- dismissed the complaint for lack of merit, but directed that Peninsula pay
Alipio separation pay amounting to P20,000.
NLRC-affirmed with modification the Labor Arbiter’s decision with the deletion
of the separation pay.
CA- reversed the decision of the NLRC after ascertaining the findings of the LA
and NLRC that Alipio is not an employee of Peninsula and that she was validly
dismissed is not supported by evidence on record.
PETITIONER’s CONTENTION: Petitioners likewise argue that Alipio cannot be
reinstated as a regular staff nurse because (1) she never served in that
capacity; and (2) there is no vacancy for the said position or any equivalent
position to which she may be reinstated.
RESPONDENT’s CONTENTION: Alipio, for her part, counters that the NLRC
decision, affirming that of the Labor Arbiter, is not beyond the scope of judicial
review because palpable mistake was committed in disregarding evidence
showing (1) her status as a regular employee of Peninsula; and (2) petitioners’
failure to observe substantive and procedural due process. She points out that
a Certification dated April 22, 1997 issued by the hotel proves she was a regular
staff nurse until her illegal dismissal. She stresses that her supposed employment
at the Quezon City Medical Center does not negate the fact that she also
worked as a regular nurse of the hotel.
ISSUE: Whether or not Alipio is a regular employee– YES.
RULING:
• It is doctrinal that the factual findings of quasi-judicial agencies like the
NLRC are generally accorded respect and finality if such are supported by
substantial evidence. In some instances, however, the Court may be
compelled to deviate from this general rule if the Labor Arbiter and the
NLRC misappreciated the facts, thereby resulting in the impairment of the
worker’s constitutional and statutory right to security of tenure.
o 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.
• 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.
o 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
DEAD POOL
12, 1994. Lastly, per the hotel’s own Certification dated April 22,
1997, she was already a “regular staff nurse” until her dismissal.
o 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 of
the Labor Code; and (2) the employee must be given an
opportunity to be heard and to defend himself.
o Alipio was illegally dismissed because petitioners failed on both
counts to comply with the twin requisites for a valid termination. She
is thus entitled to reinstatement without loss of seniority rights and
other privileges and to full backwages, inclusive of allowances, and
to other benefits, or their monetary equivalent computed from the
time compensation was withheld up to the time of actual
reinstatement. Should reinstatement be no longer feasible, Alipio is
entitled to separation pay equivalent to one month pay for her
every year of service in lieu of reinstatement.
DISPOSITION: WHEREFORE, the petition is DENIED for lack of merit. The assailed
Decision dated August 23, 2004 and Resolution dated March 11, 2005 of the
Court of Appeals in CA-G.R. SP No. 67007 are hereby AFFIRMED as MODIFIED,
such that the amount of moral damages is reduced to only P15,000 and the
exemplary damages to only P10,000.
12. Samonte v. La Salle Greenhills, Inc.
G.R. No. 199683. February 10, 2016 – Santiago
Employer La Salle Greenhills, Inc. (LSGI)
Employee Samonete et. Al.
Labor Issue Regular v Fixed Term Employment
Doctrine: A fixed-term contract is an employment contract, the repeated
renewals of which make for a regular employment.
Facts:
1. LSGI contracted the services of medical professionals, specifically
pediatricians, dentists and a physician, to comprise its Health Service Team
(HST). – these are Samonte et.al.
2. They signed a retainer agreement with a duration: from June (start of the
school year) to March.
3. It was renewed for the last 15 years.
4. The head administrator of LSGI informed them that their contracts will no
longer renew the contract. Reason: they will hire full time doctors and
dentists.
5. Samonte etal asked for separation pay but denied by LSGI. Hence, they
filed an illegal dismissal case with prayer for separation pay, damages
before NLRC.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Contention of LSGI: They are independent contractors who were retained by
LSGI by reason of their medical skills and expertise to provide ancillary medical
and dental services to both its students and faculty consistent with the following
circumstances:
1. Complainants were professional physicians and dentists on retainer basis,
paid on monthly retainer fees, not regular salaries;
2. LSGI had no power to impose disciplinary measures upon complainants
including dismissal from employment;
3. LSGI had no power of control over how complainants actually performed
their professional services.
Contention of Samonte et al; they are regular employees.
LA: Regular employees
NLRC: Independent Contractors
CA; Independent Contractors:
Issue: Whether Samonte et al are independent contractors or regular
employees – regular
Ruling:
In some instances, doctors and other medical professional may fall into this
independent contractor category, legitimately providing medical professional
services. However, as has been declared by the NLRC and the appellate court,
petitioners herein are not independent contractors.
From Brent v. Zamora, which remains as the exception rather than the rule in the
determination of the nature of employment,
…. petitioners, professional doctors and dentists, continuously signed the
contracts for more than ten (10) years. Such was heedless of our prescription
that the ruling in Brent be strictly construed, applying only to cases where it
appears that the employer and employee are on equal footing.
A fixed-term contract is an employment contract, the repeated renewals of
which make for a regular employment.
- The repeated engagement under contract of hire is indicative of the
necessity and desirability of the [employee’s] work in respondent’s
business and where employee’s contract has been continuously
extended or renewed to the same position, with the same duties and
remained in the employ without any interruption, then such employee
is a regular employee.
- FACTS in this case: The uniform one-page Contracts of Retainer signed
by petitioners were prepared by LSGI alone. Petitioners, medical
professionals as they were, were still not on equal footing with LSGI as
they obviously did not want to lose their jobs that they had stayed in
for fifteen (15) years.
o There is no specificity in the contracts regarding terms and
conditions of employment that would indicate that
petitioners and LSGI were on equal footing in negotiating it.
DEAD POOL
o Notably, without specifying what are the tasks assigned to
petitioners, LSGI “may upon prior written notice to the
retainer, terminate [the] contract should the retainer fail in
any way to perform his assigned job/task to the satisfaction
of La Salle Greenhills, Inc. or for any other just cause.”
Other issue: Power of control - the Contract of Retainer very clearly spelled out
that LSGI had the power of control.
- The power of control refers to the existence of the power not
necessarily to the actual exercise thereof, nor is it essential for the
employer to actually supervise the performance of duties of the
employee.17 It is enough that the employer has the right to wield that
power.
- It is enough that the employer has the right to wield that power.
- In all, given the following: (1) repeated renewal of petitioners’ contract
for fifteen years, interrupted only by the close of the school year; (2)
the necessity of the work performed by petitioners as school physicians
and dentists; and (3) the existence of LSGI’s power of control over the
means and method pursued by petitioners in the performance of their
job, we rule that petitioners attained regular employment, entitled to
security of tenure who could only be dismissed for just and authorized
causes. Consequently, petitioners were illegally dismissed and are
entitled to the twin remedies of payment of separation pay and full
backwages. We order separation pay in lieu of reinstatement given
the time that has lapsed, twelve years, in the litigation of this case.
Disposition: WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals in C.A.-G.R. S.P. No. 110391 is REVERSED and SET ASIDE. The Decisions of
the NLRC in NLRC CA No. 044835-05 and NLRC Case No. 00-0607081-04 are
ANNULLED AND SET ASIDE. The Complaint of petitioners Arlene T. Samonte,
Vladimir P. Samonte, and Ma. Carmen Aurea S. Elepaño against La Salle
Greenhills, Inc. for illegal dismissal is GRANTED. We REMAND this case to the NLRC
for the computation of the three (3) petitioners’ separation pay and full
backwages.
13. Basan v. Coca-cola
G.R. Nos. 174365-66, February 04, 2015 – Tamargo
Petitioner: ROMEO BASAN, DANILO DIZON, JAIME L. TUMABIAO, JR., ROBERTO
DELA RAMA, JR., RICKY S. NICOLAS, CRISPULO D. DONOR, GALO FALGUERA,
AND NATIONAL LABOR RELATIONS COMMISSION
Respondents: COCA-COLA BOTTLERS PHILIPPINES
Employer COCA-COLA BOTTLERS PHILIPPINES
Employee/Union N/A
Labor Issue Types of employess
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LABOR REVIEW: Classed of Employees (August 28, 2019)
DOCTRINE: Regular employees are classified into: (1) regular employees by
nature of work; and (2) regular employees by years of service. The former refers
to those employees who perform a particular activity which is necessary or
desirable in the usual business or trade of the employer, regardless of their length
of service; while the latter refers to those employees who have been performing
the job, regardless of the nature thereof, for at least a year.
FACTS:
● Petitioners Romeo Basan et. al. filed a complaint for illegal dismissal with
money claims against respondent Coca-Cola Bottlers Philippines, alleging
that respondent dismissed them without just cause and prior written notice
required by law.
● In their position paper, petitioners provided for the following material
dates:
● Respondent corporation, however, countered that it hired petitioners as
temporary route helpers to act as substitutes for its absent regular route
helpers merely for a fixed period in anticipation of the high volume of work
in its plants or sales offices. As such, petitioners’ claims have no basis for
they knew that their assignment as route helpers was temporary in duration.
RULING OF THE LOWER COURTS:
LA: The Labor Arbiter ruled in favor of petitioners and found that since they were
performing activities necessary and desirable to the usual business of
petitioner for more than the period for regularization, petitioners are
considered as regular employees, and thus, their dismissal was done
contrary to law in the absence of just cause and prior written notice.
NLRC: NLRC affirmed the Labor Arbiter’s decision and rejected respondent’s
contention that petitioners were merely employed for a specific
project or undertaking the completion or termination of which has
been determined at the time of their engagement. It stressed that
nowhere in the records of the case was it shown that petitioners were
hired as project or seasonal employees, respondent having failed to
submit any contract of project or other similar proof thereof.
CA: Reversed the ruling of the LA and NLRC. It reasoned:
"That the respondents “performed duties which are necessary or
desirable in the usual trade or business of Coca-Cola,” is of no moment. This
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is not the only standard for determining the status of one’s employment.
Such fact does not prevent them from being considered as fixed term
employees of Coca-Cola whose engagement was “fixed” for a specific
period. The respondent’s repeated hiring for various periods (ranging from
more than six months for private respondent Basan to eight years in the
case of private respondent Dizon) would not automatically categorize
them as REGULAR EMPLOYEE."
PETITIONER’s CONTENTION: Petitioners essentially maintain they were
continuously hired by respondent company to perform duties necessary and
desirable in the usual trade or business and are, therefore, regular employees.
They allege that if their services had really been engaged for fixed specific
periods, respondent should have at least provided the contracts of employment
evidencing the same.
RESPONDENT’s CONTENTION: The appellate court was correct in holding that
petitioners were fixed-term employees who were hired intermittently.
ISSUE: Whether or not the petitoners are regular employees of the respondent
corporation? – YES.
RULING: Regular employees are classified into: (1) regular employees by nature
of work; and (2) regular employees by years of service. The former refers to those
employees who perform a particular activity which is necessary or desirable in
the usual business or trade of the employer, regardless of their length of service;
while the latter refers to those employees who have been performing the job,
regardless of the nature thereof, for at least a year.
Petitioners, in this case, fall under the first kind of regular employee above. As
route helpers who are engaged in the service of loading and unloading softdrink
products of respondent company to its various delivery points, which is
necessary or desirable in its usual business or trade, petitioners are considered
as regular employees. That they merely rendered services for periods of less than
a year is of no moment since for as long as they were performing activities
necessary to the business of respondent, they are deemed as regular
employees under the Labor Code, irrespective of the length of their service.
NOTES:
1) Magsalin v. National Organization of Working Men doctrine (referring to
softdrinks route helpers):
"The argument of Coca-Cola co. that its usual business or trade is softdrink
manufacturing and that the work assigned to respondent workers as sales route
helpers so involves merely "postproduction activities," one which is not
indispensable in the manufacture of its products, scarcely can be persuasive. If,
as so argued by the company, only those whose work are directly involved in
the production of softdrinks may be held performing functions necessary and
desirable in its usual business or trade, there would have then been no need for
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LABOR REVIEW: Classed of Employees (August 28, 2019)
it to even maintain regular truck sales route helpers. The nature of the work
performed must be viewed from a perspective of the business or trade in its
entirety and not on a confined scope.
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."
2) In re: fixed term employees argument:
"The Court has recognized a fixed-term type of employment embodied in a
contract specifying that the services of the employee shall be engaged only for
a definite period, the termination of which occurs upon the expiration of said
period irrespective of the existence of just cause and regardless of the activity
the employee is called upon to perform. Considering, however, the possibility of
abuse by employers in the utilization of fixed-term employment contracts, this
Court, in Brent, laid down the following criteria to prevent the circumvention of
the employee’s security of tenure:
a) 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
b) It satisfactorily appears that the employer and the employee
dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.
Unfortunately, however, the records of this case is bereft of any proof which will
show that petitioners freely entered into agreements with respondent to perform
services for a specified length of time. In fact, there is nothing in the records to
show that there was any agreement at all, the contracts of employment not
having been presented."
DISPOSITION: WHEREFORE, premises considered, the instant petition is GRANTED.
The assailed Decision dated August 31, 2005 and Resolution dated August 24,
2006 of the Court of Appeals in CA-G.R. SP Nos. 80977 & 87071 are SET ASIDE. The
Resolutions dated January 30, 2003 and September 24, 2003 of the NLRC in NLRC
00-02-01419-97, affirming in toto the Decision dated August 21, 1998 of the Labor
Arbiter are REINSTATED with MODIFICATION. Taking into account petitioners’
reinstatement in 199934 and petitioner Falguera’s receipt of P792,815.64
separation pay,35 respondent is hereby ORDERED to pay petitioners the
following: (1) backwages computed from the date their salaries were withheld
from them until their actual reinstatement; (2) allowances and other benefits, or
their monetary equivalent, at the time of their dismissal; (3) attorney's fees
equivalent to ten percent (10%) of the monetary awards; and (4) interest at six
percent (6%) per annum of the total monetary awards, computed from the
finality of this Decision until their full satisfaction. For this purpose, the records of
this case are hereby REMANDED to the Labor Arbiter for proper computation of
said awards, deducting amounts already received. Costs against petitioner. SO
ORDERED.
DEAD POOL
14. Nate Casket Maker v. Arango
G.R. No. 192282. October 5, 2016 – Angeles
Petitioner: A. NATE CASKET MAKER and/or ARMANDO and
ANELY NATE
Respondents: ELIAS V. ARANGO, EDWIN M. MAPUSAO, JORGE C. CARIÑO,
JERMIE MAPUSAO, WILSON A. NATE, EDGAR A. NATE, MICHAEL A. MON TALES,
CELSO A. NATE, BENJES A. LLONA and ALLAN A. MONTALES
A. NATE CASKET MAKER and Mr. & Mrs. ARMANDO and
Employer ANELY NATE
ELIAS V. ARANGO, EDWIN M. MAPUSAO, JORGE C.
CARIÑO, JERMIE MAPUSAO, WILSON A. NATE, EDGAR A.
NATE, MICHAEL A. MON TALES, CELSO A. NATE, BENJES A.
Employee/Union LLONA and ALLAN A. MONTALES
WoN respondent employees are Regular Employees,
despite being paid on a per piece basis – YES
Labor Issue WoN respondents are field personnel– NO
DOCTRINE: Pakyaw workers are considered regular employees for as long as
their employers exercise control over them. Thus, while respondents’ mode of
compensation was on a per-piece basis, the status and nature of their
employment was that of regular employees. As regular employees, respondents
were entitled to security of tenure and could be dismissed only for just or
authorized causes and after the observance of due process. The right to security
of tenure is guaranteed under Article XIII, Section 3 of the 1987 Constitution.
There is no dispute that the tasks performed by respondents as
carpenters, painters, and mascilladors were necessary and desirable in the
usual business of petitioners who are engaged in the manufacture and selling
of caskets. We have to also consider the length of time that respondents worked
for petitioners, commencing on various dates from 1998 to 2007. In addition, the
power of control of petitioners over respondents is clearly present in this case.
Respondents follow the steps in making a casket, as instructed by the petitioners,
like carpentry, mascilla, rubbing and painting. They had their own notebooks
where they listed the work completed with their signature and the date finished.
The same would be checked by petitioners as basis for the compensation for
the day. Thus, petitioners wielded control over the respondents in the discharge
of their work.
FACTS:
Petitioners Armando and Anely Nate are the owners/pro prietors of A. Nate
Casket Maker. They employed respondents on various dates as carpenters,
mascilladors and painters in their casket-making business from 1998 until their
alleged termination in March 2007. On February 3, 2007, they met with
respondents in order to present a proposed employment agreement which
would change the existing pakyaw system to “contractual basis” and would
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LABOR REVIEW: Classed of Employees (August 28, 2019)
provide for vacation leave and sick leave pay and other benefits given to
regular employees. Petitioners alleged that the proposed employment
agreement would be more beneficial to respondents.
On February 8, 2007, respondents filed a Complaint for illegal dismissal and
nonpayment of separation pay against petitioners. On March 15, 2007, they
amended the complaint to include claims for underpayment of wages,
nonpayment of overtime pay, holiday pay, 5-day service incentive leave pay
and 13th month pay.
RULING OF THE LOWER COURTS
LA: Labor Arbiter (LA) Eduardo J. Carpio, issued a Decision dismissing the
complaint for lack of merit. While the LA acknowledged that respondents being
pakyaw workers are considered regular employees, he ruled that petitioners did
not terminate the services of respondents and believed in the denial of
petitioners tha respondents were called to their office on March 15, 2007 since
respondents already initiated the present case on February 8, 2007 On the issue
of underpayment, the LA held that respondents were earning more than the
minimum wage per day and as pakyaw workers, though they are deemed
regular workers, they are not entitled to overtime pay, holiday pay, service
incentive leave pay and 13th month pay citing the case of field personnel and
those paid on purely commission basis.
NLRC: The NLRC affirmed the Decision of the LA and held that no substantial
evidence was presented to show that petitioners terminated the employment
of respondents. It stated that pakyaw workers are not entitled to money claims
because their work depends on the availability of job orders from petitioners’
clients. Also, there was no proof that overtime work was rendered by
respondents. A motion for reconsideration was filed by respondents but the
same was denied.
CA: Reversed the decision of the NLRC
PETITIONER’s CONTENTION: Petitioners alleged in their Position Paper that
respondents are pakyaw workers who are paid per job order. Respondents are
“stay-in” workers with free board and lodging, but they would “always” drink,
quarrel with each other on petty things such that they could not accomplish the
job orders on time. Hence, petitioners would then be compelled to “contract
out” to other workers for the job to be finished.
RESPONDENT’s CONTENTION: On the other hand, respondents alleged in their
Position Paper, that they worked from Monday to Saturday, from 7:00 a.m. to
10:00 p.m., with no overtime pay and any monetary benefits despite having
claimed for such. On March 15, 2007, they were called by petitioners and were
made to sign a Contract of Employment with the following terms and
conditions: (1) they shall be working on contractual basis for a period of five
months; (2) renewal of employment contract after such period shall be on a
case to case basis or subject to respondents’ efficiency and performance; (3)
petitioners shall reserve the right to terminate their employment should their
performance fall below expectations or if the conditions under which they were
DEAD POOL
employed no longer exist; (4) their wages shall be on a piece-rate basis; (5) in
the performance of their tasks, they shall be obliged to strictly follow their work
schedules; (6) they shall not be eligible to avail of sick leave or vacation leave,
nor receive 13th month pay and/or bonuses, or any other benefits given to a
regular employee.
Respondents then alleged that when they were adamant and eventually
refused to sign the contract, petitioners told them to go home because their
employment has been terminated
ISSUE: 1. Whether or not respondent employees are Regular Employees, despite
being paid on a per piece basis – YES
2. Whether or not respondents are field personnel– NO
RULING: 1. YES
There is no dispute that the tasks performed by respondents as
carpenters, painters, and mascilladors were necessary and desirable in the
usual business of petitioners who are engaged in the manufacture and selling
of caskets. We have to also consider the length of time that respondents worked
for petitioners, commencing on various dates from 1998 to 2007. In addition, the
power of control of petitioners over respondents is clearly present in this case.
Respondents follow the steps in making a casket, as instructed by the petitioners,
like carpentry, mascilla, rubbing and painting. They had their own notebooks
where they listed the work completed with their signature and the date finished.
The same would be checked by petitioners as basis for the compensation for
the day. Thus, petitioners wielded control over the respondents in the discharge
of their work
It should be remembered that the control test merely calls for the
existence of the right to control, and not necessarily the exercise thereof. It is not
essential that the employer actually supervises the performance of duties by the
employee. It is enough that the former has a right to wield the power. Hence,
pakyaw workers are considered regular employees for as long as their
employers exercise control over them. Thus, while respondents’ mode of
compensation was on a per-piece basis, the status and nature of their
employment was that of regular employees.
Pakyaw workers are considered regular employees for as long as their
employers exercise control over them. Thus, while respondents’ mode of
compensation was on a per-piece basis, the status and nature of their
employment was that of regular employees. As regular employees, respondents
were entitled to security of tenure and could be dismissed only for just or
authorized causes and after the observance of due process. The right to security
of tenure is guaranteed under Article XIII, Section 3 of the 1987 Constitution.
As regular employees, respondents were entitled to security of tenure
and could be dismissed only for just or authorized causes and after the
observance of due process. As regular employees, respondents were entitled
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to security of tenure and could be dismissed only for just or authorized causes
and after the observance of due process.
2. NO
Based on the definition of field personnel under Article 82, respondents
do not fall under the definition of “field personnel.” First, respondents regularly
performed their duties at petitioners’ place of business; Second, their actual
hours of work could be determined with reasonable certainty; and Third,
petitioners supervised their time and performance of their duties. Since
respondents cannot be considered as “field personnel,” then they are not
exempted from the grant of holiday and SIL pay even as they were engaged
on pakyaw or task basis.
DISPOSITION: WHEREFORE, the Petition is PARTIALLY GRANTED insofar as the
payment of 13th month pay to respondents is concerned. In all other aspects,
the Court AFFIRMS the Decision dated January 6, 2010 and the Resolution
dated May 13, 2010 of the Court of Appeals in C.A.-G.R. S.P. No. 10696.
15. Poseidon Fishing v. NLRC
G.R. No. 168052. FEB 20, 2006 – BARREDO
Petitioners: POSEIDON FISHING/TERRY DE JESUS
Respondents: NATIONAL LABOR RELATIONS COMMISSION and JIMMY S.
ESTOQUIA
Employer Poseidon Fishing
Employee Jimmy S. Estoquia
Labor Issue Regular Employment
DOCTRINE: 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; 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.
FACTS:
• Petitioner Poseidon Fishing is a fishing company engaged in the deep-
sea fishing industry.
• One of its boat crew was private respondent Jimmy S. Estoquia.
• Petitioner Terry de Jesus is the manager of petitioner company.
DEAD POOL
• Private respondent was employed by Poseidon Fishing as Chief Mate.
• After five years, he was promoted to Boat Captain.
• In 1999, petitioners, without reason, demoted respondent from Boat
Captain to Radio Operator of petitioner Poseidon.
• 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, private respondent failed to record a 7:25 a.m. 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 log
books so he immediately recorded the 7:25 a.m. call after the 7:30 a.m.
entry.
• Around 9:00 o’clock in the morning of 4 July 2000, petitioner Terry de
Jesus detected the error in the entry in the logbook. Subsequently, she
asked private respondent to prepare an incident report to explain the
reason for the said oversight.
• At around 2:00 o’clock in the afternoon of that same day, petitioner
Poseidon’s secretary, namely Nenita Laderas, summoned private
respondent to get his separation pay amounting to Fifty-Five Thousand
Pesos (₱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.
• Private respondent filed a complaint for illegal dismissal with the Labor
Arbiter, alleging nonpayment of wages with prayer for back wages,
damages, attorney’s fees, and other monetary benefits.
RESPONDENT’S CONTENTION:
• He was promoted but was later demoted and shortly, he was
terminated without just cause and without due process of law.
PETITIONERS’ CONTENTION:
• Private respondent was a contractual or a casual employee whose
services could be terminated at the end of the contract even without
a just or authorized.
• When the private respondent was engaged, 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 private respondent could not
be entitled to separation pay and other monetary claims.
RULING OF THE LOWER COURTS:
• Labor Arbiter – decided in favor of private respondent; even if the
private respondent was a casual employee, he became a regular
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LABOR REVIEW: Classed of Employees (August 28, 2019)
employee after a period of one year and, thereafter, had attained
tenurial security which could only be lost due to a legal cause after
observing due process
• NLRC – affirmed the decision of the Labor Arbiter
• CA – affirmed the decision of the NLRC
ISSUE: Whether private respondent is a regular employee. – YES.
RUING+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. 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.
In this case, petitioners’ intent to evade the application of Article 280 of the
Labor Code is unmistakable. As petitioners themselves admitted in their petition
before this Court, private respondent was repeatedly hired as part of the boat’s
crew and he acted in various capacities onboard the vessel. In a span of 12
years, private respondent worked
for petitioner company first as a Chief Mate, then Boat Captain, and later as
Radio Operator. His job was directly related to the deep-sea fishing business of
petitioner Poseidon. His work was, therefore, necessary and important to the
business of his employer.
As correctly pointed out by the Court of Appeals, the “activity of catching fish
is a continuous process and could hardly be considered as seasonal in nature.”
In Philex Mining Corp. v. National Labor Relations Commission, 312 SCRA 119, 129
(1999), we defined project employees as 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.” As earlier noted, 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.
DEAD POOL
DISPOSITION: WHEREFORE, the present petition is hereby DENIED. The Decision of
the Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 is hereby
AFFIRMED WITH MODIFICATION by deleting the reduction of an amount
equivalent to six months of pay from private respondent’s separation pay. The
case is remanded to the Labor Arbiter for further proceedings solely for the
purpose of determining the monetary liabilities of petitioners in accordance with
the decision. The Labor Arbiter is ORDERED to submit his compliance thereon
within thirty (30) days from notice of this decision, with copies furnished to the
parties. Costs against petitioners.
16. FILIPINAS PRE-FABRICATED BUILDING SYSTEMS (FILSYSTEMS), INC. v.
PUENTE
G.R. No. 153832, March 18, 2005 -Buenaventura
Petitioner: Filsystems Inc.
Respondent: Roger Puente
Employer Filsystems Inc.
Employee Roger Puente
Labor Issue Whether Puente is a project employee or regular employee.
DOCTRINE: The length of service of a project employee is not the controlling
test of employment tenure but whether or not 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.
If the project or work is completed during the pendency of the suit for illegal
dismissal, the employee shall be entitled only to full backwages from the
date of the termination of his employment until the actual completion of
the project or work.
FACTS:
Respondent claims that he started working with petitioner Filsystems Inc, a
corporation engaged in construction business, as installer and later
promoted to mobile crane operator, and was stationed at the company
premises. He also claims that his work was not dependent on the
completion or termination of any project, that his work with the petitioner
was continuous and without interruption for the past 10 years. Then later on,
he was dismissed from hi employment allegedly because he was a project
employee. Hence, respondent filed a complaint for illegal dismissal against
the petitioner.
Petitioner, however, claims that complainant was hired as a project
employee in the company's various projects; that his employment
contracts showed that he was a project worker with specific project
assignments; that after completion of each project assignment, his
employment was likewise terminated and the same was correspondingly
reported to the DOLE.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
RULING OF THE COURTS:
LA: dismissed the complaint for illegal dismissal for lack of merit.
NLRC: dismissed the case.
CA: Reversed the ruling of NLRC.
Respondent is a regular employee. The employment contracts signed by
respondent Puente do not have the specified duration for each project
contrary to the provisions of Art.280 of the Labor Code, nor did Puente work
in the project site, but always been assigned at the company plant
attending to the maintenance of all mobile cranes of the company,
performing task vital and desirable in the employer's usual business for 10
continuous years.
PETITIONER'S CONTENTION: Respondent Puente is a project employee.
RESPONDENT'S CONTENTION: He is a regular employee.
ISSUE: Whether Roger Puente is a project employee. YES.
RULING:
Art.280 of the Labor Code defines project employees 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. Particularly, DO 19-1993 states that project
employees are those employed in connection with a particular
construction project or phase thereof and whose employment is
coterminous with each project or phase of the project to which they are
assigned.
Either one or more of the following circumstances, among other, may be
considered as indicators that an employee is a project employee: (a) the
duration of the specific/identified undertaking for which the worker is
engaged is reasonably determinable; (b) such duration, as well as the
specific work/service to be performed, is defined in an employment
agreement and is made clear to the employee at the time of hiring; (c) the
work/service performed by the employee is in connection with the
particular project/undertaking for which he is engaged; (d) the employee,
while not employed and awaiting engagement, is free to offer his services
to any other employer; (e) The termination of his employment in the
particular project/undertaking is reported to the Department of Labor and
Employment (DOLE) Regional Office having jurisdiction over the workplace
within 30 days following the date of his separation from work, 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
construction companies.
The above-quoted 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 the time of the engagement of the employee or where the work or
DEAD POOL
services to be performed is seasonal in nature and the employment is for
the duration of the season." The length of service of a project employee is
not the controlling test of employment tenure but whether or not '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.
In the present case, the contracts of employment of Puente attest to the
fact that he 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 phase of the project or on the
completion of the construction projects. Furthermore, petitioners regularly
submitted to the labor department reports of the termination of services of
project workers. Such compliance with the reportorial requirement confirms
that respondent was a project employee.
As to the claim that his employment contract does not mention particular
dates that establish the specific duration of the project does not preclude
his classification as a project employee. This fact is clear from the provisions
of Clause 3.3(a) of Department Order No. 19-1993, which states:
Project employees whose aggregate period of continuous employment in
a construction company is at least one year shall be considered regular
employees, in the absence of a "day certain" agreed upon by the parties
for the termination of their relationship. Project employees who have
become regular shall be entitled to separation pay.
A "day" as used herein, is understood to be that which must necessarily
come, although is may not be known exactly when. This means that where
the final completion of a project or phase thereof is in fact determinable
and the expected completion is made known to the employee, such
project employee may not be considered regular, notwithstanding the
one-year duration of employment in the project or phase thereof or the
one-year duration of two or more employments in the same project or
phase of the object.
Evidently, although the employment contract did not state a particular
date, it did specify that the termination of the parties' employment
relationship was to be on a "day certain" -- the day when the phase of work
termed "Lifting & Hauling of Materials" for the "World Finance Plaza" project
would be completed. Thus, respondent cannot be considered to have
been a regular employee. He was a project employee.
That he was employed with Petitioner Filsystems for ten years in various
projects did not ipso facto make him a regular employee, considering that
the definition 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 project-to-project basis did not confer upon him regular
employment status. "The practice was dictated by the practical
consideration that experienced construction workers are more preferred."
It did not change his status as a project employee.
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DISPOSITION: WHEREFORE, the Petition is PARTLY GRANTED. Respondent
Roger D. Puente is DECLARED to be a project employee, whose
employment was terminated without any valid cause prior to its expiration
and is thus entitled to reinstatement with full back wages. However, if
reinstatement is no longer possible due to the completion of the World
Finance Plaza project during the pendency of this case, Petitioner Filipinas
Pre-Fabricated Building Systems (Filsystems), Inc. is ORDERED to PAY
respondent the equivalent of his salaries and other employment benefits,
computed from date of the termination of his employment, until the date
of the project's actual completion.
17. Leyte Geothermal Power Progressive Employees Union v.
PNOC-EDC
G.R. No. 170351, March 30, 2011 - Bulacan
Petitioner: LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU -
TUCP
Respondents: PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT
CORPORATION
Employer Respondent
Employee/Union Petitioner
Labor Issue W/N Project Employee-YES
DOCTRINE: The litmus test to determine whether an individual is a project
employee lies in setting a fixed period of employment involving a specific
undertaking which completion or termination has been determined at the time
of the particular employee’s engagement.
FACTS:
⚫ PNOC-EDC is a GOCC engaged in exploration, development, utilization,
generation and distribution of energy resources like geothermal energy.
⚫ Among respondent’s geothermal projects is the Leyte Geothermal
Power Project located at the Greater Tongonan Geothermal Reservation
in Leyte.
⚫ So respondent hired and employed hundreds of employees on a
contractual basis, whereby, their employment was only good up to the
completion or termination of the project and would automatically expire
upon the completion of such project.
⚫ Majority of the employees hired by respondent] in its Leyte Geothermal
Power Projects had become members of petitioner Union. In view of
that, the petitioner demanded from respondent] recognition of it as the
collective bargaining agent of said employees and for a CBA
negotiation with it. However, the respondent] did not heed such
demands of the petitioner.
DEAD POOL
⚫ Sometime in 1998 when the project was about to be completed, the
respondent] proceeded to serve Notices of Termination of Employment
upon the employees who are members of the petitioner.
⚫ So petitioner filed a Notice of Strike, one of the grounds for such filing is
mass termination. On the same day, the petitioner declared a strike and
staged such strike.
RULING OF THE LOWER COURTS:
NLRC - The officers and members of [petitioner] Union are project employees.
- the termination of their employment by reason of the completion of the
project, or a phase or portion thereof, to which they were assigned are valid
and legal.
CA: Affirmed
PETITIONER’s CONTENTION:
⚫ its officers and members performed activities that were usually necessary
and desirable to respondent’s usual business. In fact, they were assigned
to the Construction Department of respondent as carpenters and masons,
and to other jobs pursuant to civil works, which are usually necessary and
desirable to the department.
⚫ -There was no interval in the employment contract, such lack of interval
manifests that the ‘undertaking’ is usually necessary and desirable to the
usual trade or business of the employer.
ISSUE: Whether the officers and members of petitioner Union are project
employees of respondent– YES.
RULING:
1. Project employment contracts which fix the employment for a specific project
or undertaking remain valid under the law.
Article 280 of the Labor Code establishes that the nature of the employment is
determined by law, regardless of any contract expressing otherwise.
However, notwithstanding the foregoing iterations, project employment
contracts which fix the employment for a specific project or undertaking remain
valid under the law.
By entering into such a contract, an employee is deemed to understand that
his employment is coterminous with the project. He may not expect to be
employed continuously beyond the completion of the project. It is of judicial
notice that project employees engaged for manual services or those for special
skills like those of carpenters or masons, are, as a rule, unschooled. However, this
fact alone is not a valid reason for bestowing special treatment on them or for
invalidating a contract of employment.
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LABOR REVIEW: Classed of Employees (August 28, 2019) DEAD POOL

Project employment contracts are not lopsided agreements in favor of only one Plainly, the litmus test to determine whether an individual is a project employee
party thereto. The employer’s interest is equally important as that of the lies in setting a fixed period of employment involving a specific undertaking
employee[s’] for theirs is the interest that propels economic activity. While it may which completion or termination has been determined at the time of the
be true that it is the employer who drafts project employment contracts with its particular employee’s engagement.
business interest as overriding consideration, such contracts do not, of necessity,
prejudice the employee. Neither is the employee left helpless by a prejudicial
IN THIS CASE: The officers and the members of petitioner Union were specifically
employment contract. After all, under the law, the interest of the worker is
hired as project employees for respondent’s Leyte Geothermal Power Project
paramount.
located at the Greater Tongonan Geothermal Reservation in Leyte.
Consequently, upon the completion of the project or substantial phase thereof,
IN THIS CASE: The officers and the members of petitioner Union signed the officers and the members of petitioner Union could be validly terminated.
employment contracts indicating the specific project or phase of work for which
they were hired, with a fixed period of employment. These were signed and
3. Petitioner Union’s members’ employment for more than a year does equate
accepted freely and voluntarily. As explained by no less than the President of
to their regular employment with respondent.
[petitioner] Union, that the contracts of employment were read,
comprehended, and voluntarily accepted by them.
Petitioner: the lack of interval shows that its officers and members are regular
employees who performed work which was usually necessary or desirable to the
2. Litmus Test is used for determining W/N an employee is project employee
usual business or trade of respondent.

The principal test for determining whether particular employees are properly
SC: Petitioner Union’s members’ employment for more than a year does equate
characterized as "project employees" as distinguished from "regular employees,"
to their regular employment with respondent.
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. The first paragraph [of Article 280 of the Labor Code] answers the question of
who are regular employees. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular where he is
In the realm of business and industry, we note that "project" could refer to one
engaged in necessary or desirable activities in the usual business or trade of the
or the other of at least two (2) distinguishable types of activities.
employer, except for project employees.

Firstly, a project could refer to a particular job or undertaking that is within the
The second paragraph of Art. 280 demarcates as "casual" employees, all other
regular or usual business of the employer company, but which is distinct and
employees who do not fall under the definition of the preceding paragraph.
separate, and identifiable as such, from the other undertakings of the company.
The proviso, in said second paragraph, deems as regular employees those
Such job or undertaking begins and ends at determined or determinable times.
"casual" employees who have rendered at least one year of service regardless
The typical example of this first type of project is a particular construction job or
of the fact that such service may be continuous or broken.
project of a construction company. A construction company ordinarily carries
out two or more [distinct] identifiable construction projects: e.g., a twenty-five-
storey hotel in Makati; a residential condominium building in Baguio City; and a Petitioners, in effect, contend that the proviso in the second paragraph of Art.
domestic air terminal in Iloilo City. Employees who are hired for the carrying out 280 is applicable to their case and that the Labor Arbiter should have
of one of these separate projects, the scope and duration of which has been considered them regular by virtue of said proviso. The contention is without
determined and made known to the employees at the time of employment, merit.
are properly treated as "project employees," and their services may be lawfully
terminated at completion of the project. The proviso is applicable only to the employees who are deemed "casuals" but
not to the "project" employees nor the regular employees treated in paragraph
Secondly, "project" could also refer toa particular job or undertaking that is not one of Art. 280.
within the regular business of the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the ordinary or regular business Clearly, therefore, petitioners being project employees, their employment
operations of the employer. The job or undertaking also begins and ends at legally ends upon completion of the project. The termination of their
determined or determinable times.

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LABOR REVIEW: Classed of Employees (August 28, 2019)
employment cannot and should not constitute an illegal dismissal.
DISPOSITION: WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against petitioner Union.
18. Gadia v. Sykes Asia
G.R. No. 209499.January 28, 2015 - Buño
Petitioner: SYKES ASIA, INC.,
Respondents: MARIA CHARITO C. GADIA, et. al.
Employer Sykes Asia, Inc.
Employee/Union Maria Charito C. Gadia, et. al.
Labor Issue Project-based or regular employees?
DOCTRINES:
• Project-based employment is where [a] the employment has been fixed for
a specific project or undertaking [b] the completion or termination of which
has been determined at the time of the engagement of the employee.
• A project employee is assigned to a project which begins and ends at
determined or determinable times. the services of employees who are hired
as “project[-based] employees” may be lawfully terminated at the
completion of the project.
FACTS:
• Sykes Asia is a corporation engaged in BPO which provides support to its
international clients from various sectors. Alltel, a US-based telecom,
contracted Sykes’ services to accommodate the needs and demands of
Alltel clients for its postpaid and prepaid services. Thus, Sykes Asia hired
petitioners as customer service representatives, team leaders, and trainers
for the Alltel Project.
• Alltel sent two (2) letters to Sykes Asia informing the latter that it was
terminating all support services provided by Sykes Asia related to the Alltel
Project.
• Consequently, Sykes Asia sent each of the petitioners end- of-life notices,
informing them of their dismissal from employment due to the termination
of the Alltel Project.
DEAD POOL
• Aggrieved, petitioners filed separate complaints17 for illegal dismissal
against respondents Sykes Asia.
• LA: Dismissed. Petitioners are merely project-based employees. Thus, the
cessation of the Alltel Project naturally resulted in the termination of
petitionersE’ employment in Sykes Asia.
• NLRC: Modified. Petitioners are regular employees but were validly
terminated due to redundancy. Petitioners not project-based employees
since it was neither determined nor made known to petitioners, at the time
of hiring, when the said project would end, be terminated, or be
completed.
• CA: LA Ruling Reinstated.
• PETITIONER’S CONTENTION: That their dismissal from service was unjust as the
same was effected without substantive and procedural due process.
• RESPONDENT’S CONTENTION: petitioners were not regular employees but
merely project-based employees, and as such, the termination of the Alltel
Project served as a valid ground for their dismissal.
ISSUE: WoN petitioners were mere project project-based employees– YES;
Project-based employees.
RULING:
• A project employee is assigned to a project which begins and ends at
determined or determinable times. the services of employees who are hired
as “project[-based] employees” may be lawfully terminated at the
completion of the project. Principal Test: Whether or not the employees
were assigned to carry out a “specific project or undertaking” the duration
(and scope) of which were specified at the time they were engaged for
that project. (Omni Hauling Services, Inc. v. Bon)
• Project-Based Employee Requisites:
(a) the employee was assigned to carry out a specific project or
undertaking; and
(b) the duration and scope of which were specified at the time they
were engaged for such project.
• Here, records reveal that Sykes Asia adequately informed petitioners of
their employment status at the time of their engagement, as evidenced by
the latterÊs employment contracts which similarly provide that [a] they
27
LABOR REVIEW: Classed of Employees (August 28, 2019)
were hired in connection with the Alltel Project, and that [b] their positions
were “project-based and as such is co- terminus to the project.”
• As regards the second requisite, the CA correctly stressed that “[t]he law
and jurisprudence dictate that  the duration of the undertaking begins
and ends at determined or determinable times” while clarifying that “[t]he
phrase ’determinable times’ simply means capable of being determined
or fixed.”
• Here, Sykes Asia substantially complied with this requisite when it expressly
indicated in petitionersÊ employment contracts that their positions were
“co-terminus with the project.” To the mind of the Court, this caveat
sufficiently apprised petitioners that their security of tenure with Sykes Asia
would only last as long as the Alltel Project was subsisting.
• Likewise, Sykes Asia duly submitted an Establishment Employment Report
and an Establishment Termination Report to the Department of Labor and
Employment Makati-Pasay Field Office regarding the cessation of the Alltel
Project and the list of employees that would be affected by such cessation.
Unrelated Topic: (In case he asks)
• To justify the grant of the extraordinary remedy of certiorari, petitioners must
satisfactorily show that the court or quasi-judicial authority gravely abused
the discretion conferred upon it.
• In labor disputes, grave abuse of discretion may be ascribed to the
National Labor Relations Commission (NLRC) when, inter alia, its findings
and the conclusions reached thereby are not supported by substantial
evidence
DISPOSITION: WHEREFORE, the petition is DENIED. Accordingly, the Decision
dated April 29, 2013 and the Resolution dated October 3, 2013 of the Court of
Appeals in C.A.-G.R. S.P. No. 120433 are hereby AFFIRMED.
19. Pasos v. PNCC
G.R. No. 192394, JULY 3, 2013 – Cariño E.
Petitioner: Roy D. Pasos
Respondents: Philippine National Construction Corporation
DEAD POOL
Employer PNCC
Employee/Union Pasos
Labor Issue Whether Regular or Project Employee
DOCTRINE: the principal test used to determine whether employees are project
employees, is whether or not the employees were assigned to carry out a
specific project or undertaking, the duration or scope of which, was specified at
the time the employees were engaged for that project.
failure of an employer to file termination reports after every project completion
proves that an employee is not a project employee.
FACTS:
• Petitioner Roy D. Pasos started working for PNCC on April 26, 1996.
• He worked on several projects for respondent as an Accounting Clerk.
• He was first assigned to the NAIA-II Project, which should end on July 25,
1996, which, however, did not end on such date.
• His employment was extended until August 1998, or for more than 2 years.
• In November 1998, petitioner was rehired as Accounting Clerk Reliever and
was assigned to PCSO – QI Project. It was stated that his employment shall
end on February 11, 1999. However, said employment was extended until
February 19, 1999.
• On February 23, 1999, petitioner was again hired by respondent as
Accounting Clerk and was assigned to the SM Project.
o No date was specified as to when his employment would end but
it was stated therein that it would be "co-terminus with the
completion of the project."
• Said employment supposedly ended on August 19, 1999. However, it was
extended as petitioner was again appointed as an accounting clerk. The
extension eventually ended on October 19, 2000.
• Despite the termination of his employment on October 19, 2000, petitioner
claimed that his superior instructed him to report for work the following day,
intimating to him that he will again be employed for the succeeding SM
projects.
• For purposes of reemployment, he then underwent a medical examination
which allegedly revealed that he had pneumonitis.
• Petitioner was advised to take a 14-day sick leave.
• After serving his sick leave, petitioner claimed that he was again referred
for medical examination where it was revealed that he contracted Koch’s
disease.
• He was then required to take a 60-day leave of absence.
• Petitioner claimed that after he presented his medical clearance to the
Project Personnel Officer on even date, he was informed that his services
were already terminated on October 19, 2000 and he was already
replaced due to expiration of his contract.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
• This prompted petitioner to file a complaint for illegal dismissal against
PNCC with a prayer for reinstatement and back wages.
RULING OF THE LOWER COURTS:
LA: in favor of Petitioner; attained regular status with the repeated hiring and
rehiring. His services also usual and necessary in the business of PNCC. Awarded
back wages but did not order reinstatement because of strained relations
NLRC: reversed LA decision; dismissed petitioner’s complaint. Employment in
connection to certain projects and co-terminus with each project. PNCC just
ordered to pay him P25,000 completion bonus
CA: dismissed for lack of merit
PETITIONER’s CONTENTION:
• even if he was just hired for the NAIA 2 Project from April 26, 1996 to July 25,
1996, he was made to work until August 4, 1998.
• DOLE had certified that he was not among the employees listed in the
termination reports submitted by PNCC which belies the photocopies of
termination reports attached by PNCC to its pleadings listing petitioner as
one of the affected employees.
• In violation of the requirement of Department Order No. 19 that the
duration of the project employment is reasonably determinable, his
contracts for the SM projects did not specify the date of completion of the
project nor was the completion determinable at the time that petitioner
was hired.
RESPONDENT’s CONTENTION:
• documentary evidence would show that petitioner was clearly a project
employee and remained as such until his last engagement.
• The repeated rehiring of petitioner as accounting clerk in different projects
did not make him a regular employee.
• It complied with the reportorial requirements and that it filed and reported
the termination of petitioner upon every completion of project to which he
was employed.
ISSUE: Whether or not petitioner is a regular employee – YES.
RULING:
• The appointments issued to petitioner indicated that he was hired for
specific projects. This Court is convinced however that although he started
as a project employee, he eventually became a regular employee of
PNCC.
• Under Article 280 of the Labor Code, as amended, 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 the time of the engagement of the employee or where the work or
DEAD POOL
services to be performed is seasonal in nature and the employment is for
the duration of the season."
• Thus, the principal test used to determine whether employees are project
employees is whether or not the employees were assigned to carry out a
specific project or undertaking, the duration or scope of which was
specified at the time the employees were engaged for that project
• In the case at bar, petitioner worked continuously for more than two years
after the supposed three-month duration of his project employment for the
NAIA II Project.
• While his appointment for said project allowed extension since it specifically
provided that in case his "services are still needed beyond the validity of
the contract, the Company shall extend his services," there was no
subsequent contract or appointment that specified a particular duration
for the extension.
o His services were just extended indefinitely until "Personnel Action
Form – Project Employment" dated July 7, 1998 was issued to him
which provided that his employment will end a few weeks later or
on August 4, 1998.
• While for first three months, petitioner can be considered a project
employee of PNCC, his employment thereafter, when his services were
extended without any specification of as to the duration, made him a
regular employee of PNCC.
• His status as a regular employee was not affected by the fact that he was
assigned to several other projects and there were intervals in between said
projects since he enjoys security of tenure.
• DOLE NCR verified that petitioner is not included in the list of affected
workers based on the termination reports filed by PNCC on August 11, 17,
20 and 24, 1998 for petitioner’s supposed dismissal from the NAIA II Project
effective August 4, 1998
DISPOSITION: WHEREFORE, the petition is GRANTED. The assailed March 26, 2010
Decision and May 26, 2010 Resolution of the Court of Appeals in CAG.R. SP No.
107805 are hereby REVERSED. The decision of the Labor Arbiter is hereby
REINSTATED with the following MODIFICATIONS:
1) respondent PNCC is DIRECTED to pay petitioner Roy D. Pasos full
back wages from the time of his illegal dismissal on October 19, 2000
up to the finality of this Decision, with interest at 6% per annum, and
12% legal interest thereafter until fully paid;
2) respondent PNCC is ORDERED to reinstate petitioner Pasos to his
former position or to a substantially equivalent one, without loss of
seniority rights and other benefits attendant to the position; and
3) respondent PNCC is DIRECTED to pay petitioner Pasos attorney's fees
equivalent to 10% of his total monetary award.
No pronouncement as to costs.
20. Exodus International Construction v. Biscocho
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LABOR REVIEW: Classed of Employees (August 28, 2019)
G.R. No. 166109, FEB 23, 2011 – Cariño, P.
Petitioners: EXODUS INTERNATIONAL CONSTRUCTION CORPORATION and
ANTONIO P. JAVALERA
Respondents: GUILLERMO BISCOCHO, FERNANDO PEREDA, FERDINAND
MARIANO, GREGORIO BELLITA and MIGUEL BOBILLO
Exodus Int’l Construction Corp and (Pres. and Gen. Mngr.) Javalera CONTENTIONS OF EMPLOYEES:
Employer (duly licensed labor contractor for the painting of residential houses,
condo units and commercial buildings)
Employees Respondents (painters)
1. Alleged illegal dismissal (NO dismissal in this case)
2. Validity of reinstatement despite completion of project (✓)
Labor Issues
 2 kind of EEs in construction industry
 Factors to make project EEs regular EEs.
DOCTRINES:
• There are two types of employees in the construction industry. The first is
referred to as “project employees” or those employed in connection with
a particular construction project or phase thereof and such employment is
coterminous with each project or phase of the project to which they are
assigned. The second is known as “non- project employees” or those
employed without reference to any particular construction project or
phase of a project.
• A project employee may acquire the status of a regular employee when
the following factors concur:
(1) There is a continuous rehiring of project employees even after
cessation of a project;
(2) The tasks performed by the alleged “project employee” are vital,
necessary and indispensable to the usual business or trade of the
employer.
FACTS:
• 1999: Exodus obtained from Dutch Boy Philippines, Inc. (Dutch Boy)
contracts for the painting of the Imperial Sky Garden located at Ongpin
Street, Binondo, Manila (Feb) and Pacific Plaza Towers in Fort Bonifacio,
Taguig City (Jul).
• In the furtherance of its business, Exodus hired respondents as painters on
different dates.
o Biscocho, Pereda, and Mariano: from Imperial Sky Garden to
Pacific Plaza Towers
o Bellita: from house of Mr. Yap (Ayala, Alabang) to Pacific Plaza
Towers
o Bobillo: Pacific Plaza Towers
• Thereafter, respondents filed complaint for illegal dismissal and non-
payment of monetary benefits. They claimed that they were orally notified
of their dismissal form service.
DEAD POOL
RULING OF THE LOWER COURTS:
LA: no illegal dismissal/abandonment (respondents chose not to report for
work)
- Reinstatement w/o backwages
NLRC: affirmed LA’s decision
CA: affirmed NLRC’s decision
- Illegally dismissed. As painters, they performed activities which are
necessary and desirable in the usual business of petitioners, who are
engaged in the business of contracting painting jobs. (Regular employees)
- As regular employees, they cannot be dismissed without prior notice and
without any just or valid cause.
- No abandonment of job. (no deliberate and unjustified refusal on their part
to resume work; mere absences are not sufficient)
CONTENTIONS OF EMPLOYER:
- Respondents were never dismissed from service. They only refused to report
for work. Even if they were dismissed, their continued/prolonged absences
tantamount to abandonment (valid ground for termination)
- Reinstatement of respondents is impossible due to the completion of the
project. No more work for respondents.
- Burden on the monetary claims rests upon the respondents. Failure to prove
it means denial of their claims.
ISSUES:
1. Whether respondents were illegally dismissed. – NO.
2. Whether respondents should be reinstated even if the project is already
completed. – YES.
(Hence, they are regular employees)
RULING + RATIO:
NO POSITIVE/OVERT ACTS TO PROVE DISMISSAL, NO ILLEGAL DISMISSAL (No
dismissal here)
• [T]his Court is not unmindful of the rule that in cases of illegal dismissal, the
employer bears the burden of proof to prove that the termination was for
a valid or authorized cause.” But “[b]efore the [petitioners] must bear the
burden of proving that the dismissal was legal, [the respondents] must first
establish by substantial evidence” that indeed they were dismissed. “[I]f
there is no dismissal, then there can be no question as to the legality or
illegality thereof.”
• As found by LA, there was no evidence that respondents were dismissed
nor were they prevented from returning to their work. It was only
respondents’ unsubstantiated conclusion that they were dismissed. As a
matter of fact, respondents could not name the particular person who
effected their dismissal and under what particular circumstances.
Petitioners were able to show that they never dismissed respondents.
30
LABOR REVIEW: Classed of Employees (August 28, 2019)
o As to Pereda, Bobillo and Mariano: On November 25, 2000 (around 7:30
a.m.), the petitioners’ foreman, Wenifredo Lalap caught the three still
eating when they were supposed to be working already. Wenifredo
reprimanded them and, apparently, they resented it so they no longer
reported for work.
o As to Bellita: he absented himself from work on September 15, 2000 to
apply as a painter with SAEI-EEI, the general contractor of Pacific Plaza
Towers. Since then he never reported back to work.
o As to Biscocho: he absented himself without leave on November 27,
2000, and so he was reprimanded when he reported for work
anymore.
• Hence, as between respondents’ general allegation of having been orally
dismissed from the service vis-à-vis those of petitioners which were found to
be substantiated by the sworn statement of foreman Lalap, we are
persuaded by the latter. Absent any showing of an overt or positive act
proving that petitioners had dismissed respondents, the latters’ claim of
illegal dismissal cannot be sustained. Indeed, a cursory examination of the
records reveal no illegal dismissal to speak of.
TWO TYPES OF EMPLOYEES ON CONSTRUCTION INDUSTRY
• The first is referred to as project employees or those employed in
connection with a particular construction project or phase thereof and
such employment is coterminous with each project or phase of the project
to which they are assigned. The second is known as non-project employees
or those employed without reference to any particular construction project
or phase of a project.
RESPONDENTS ARE NON-PROJECT EMPLOYEES (REGULAR EMPLOYEES)
• The second category is where respondents are classified. As such they are
regular employees of petitioners.
• It is clear from the records of the case that when one project is completed,
respondents were automatically transferred to the next project awarded to
petitioners. There was no employment agreement given to respondents
which clearly spelled out the duration of their employment, the specific
work to be performed and that such is made clear to them at the time of
hiring. It is now too late for petitioners to claim that respondents are project
employees whose employment is coterminous with each project or phase
of the project to which they are assigned.
• Nonetheless, assuming that respondents were initially hired as project
employees, petitioners must be reminded of our ruling in Maraguinot, Jr. v.
National Labor Relations Commission that “a project employee may
acquire the status of a regular employee when the following [factors]
concur:
1. There is a continuous rehiring of project employees even after
cessation of a project; and
2. The tasks performed by the alleged “project employee” are vital,
necessary and indispensable to the usual business or trade of the
employer.”
DEAD POOL
• In this case, the evidence on record shows that respondents were
employed and assigned continuously to the various projects of petitioners.
As painters, they performed activities which were necessary and desirable
in the usual business of petitioners, who are engaged in subcontracting jobs
for painting of residential units, condominium and commercial buildings. As
regular employees, respondents are entitled to be reinstated without loss of
seniority rights.
NOTE: they were reinstated w/o backwages because they were not dismissed.
DISPOSITION: WHEREFORE, the instant petition for review on certiorari is PARTLY
GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 79800 dated
August 10, 2004, is AFFIRMED with MODIFICATION that the award of full
backwages is DELETED for lack of legal basis. SO ORDERED.
OTHER:
NO ABANDONMENT IN THIS CASE
• It is a settled rule that “mere absence or failure to report for work is not
enough to amount to abandonment of work.” “Abandonment is the
deliberate and unjustified refusal of an employee to resume his
employment.” In Northwest Tourism Corporation v. Former Special 3rd
Division of the Court of Appeals this Court held that “to constitute
abandonment of work, two elements must concur, [namely]:
(1) the employee must have failed to report for work or must have
been absent without valid or justifiable reason; and
(2) there must have been a clear intention on the part of the
employee to sever the EER manifested by some overt act.”
• “It is the employer who has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any
intention of returning.”27 It is therefore incumbent upon petitioners to
ascertain the respondents’ interest or non-interest in the continuance of
their employment. However, petitioners failed to do so.
21. DM Consunji v. Gobres
G.R. No. 85985, AUG 13, 1993 – Cartagena
Petitioner: DM CONSUNJI, INC.
Respondents: ANTONIO GOBRES, MAGELLAN DALISAY, GODOFREDO PARAGSA,
EMILIO ALETA AND GENEROSO MELO
Employer DM Consunji, Inc.
Antonio Gobres, Magellan Dalisay, Godofredo
Employee/Union Paragsa, Emilio Aleta and Generoso Melo
Project employees’ lack of prior notice upon
Labor Issue termination of employment
DOCTRINE: For project employees, if the termination is brought by the
completion of the contract or phase thereof, no prior notice is required.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
FACTS:
● Respondents are carpenters in the construction projects of petitioner on
several occasions. Their last assignment was at Quad 4 - Project which
started on September 1, 1998.
● Upon completion of the project, their employment was terminated. Their
last project ended on October 14, 1998.
● The termination was reported to the Department of Labor and Employment
(DOLE), in accordance with Policy Instruction No. 20, which was later
superseded by Department Order No. 19, series of 1993.
● No prior notice was sent to the respondents. They only had knowledge of
their termination when they saw their names in the Notice of Termination
posted on the bulletin board at the project premises.
● Respondents filed a complaint against petitioner DM Consunji, Inc. for
illegal dismissal.
RULING OF THE LOWER COURTS:
LA: Dismissed. Gobres, Dalisay, Paragsa, Aleta and Melo were project
employees, and were dismissed due to the completion of the project. DM
Consunji, Inc. reported their termination of services with DOLE, in accordance
with the requirements of law.
NLRC: Affirmed the decision of LA.
CA: Affirmed decision of NLRC but with modifications. It ordered DM Consunji,
Inc., to pay the sum of P20,00.00 for non - compliance of statutory due process.
Although respondents were project employees, they were entitled to know the
reason for their dismissal. The respondents right to statutory due process was
violated for lack of advance notice of their termination, even if they were validly
terminated for having completed the phases of work for which they were hired.
PETITIONER’s CONTENTION: The estimated time to finish their last project is within
2 years, however, they were dismissed within less than 2 months. Granting that
they were project employees, they were illegally dismissed for lack of prior
notice. There was non - observance of due process.
RESPONDENT’s CONTENTION: Respondents were project employees; their
employment was terminated when their phases of work for which their services
were engaged were completed or when the projects themselves were
completed. Notice of Termination were filed with DOLE, as required by law. No
prior notice is needed. There was compliance with the due process provided by
law.
ISSUE: Whether or not D.M. Consunji is required to give prior notice to project
employees as to the termination of their employment? – NO.
RULING: Under Article 280 of the Labor Code, 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 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.
DEAD POOL
There is no question as to the fact that respondents are project employees.
As project employees, respondents’ termination is governed by Section 1 (c)
and Section 2 (III), Rule XXIII (Termination of Employment), Book V of the Omnibus
Ruled Implementing the Labor Code.
Section 1 (c) provides that: In cases of project employees or employment
covered by legitimate contracting or sub - contracting arrangements, no
employee shall be dismissed prior to the completion of the project or phase
thereof for which the employee was engaged, or prior to the expiration of the
contract between the principal and contractor, unless the dismissal is for just or
authorize cause, subject to the requirements of due process or prior notice, or is
brought about by the completion of the phase of the project or contract for
which the employee was engaged.
Records show that respondents were dismissed after the expiration of their
respective project employment contracts and due to the completion of the
phases of work respondents were engaged for. The requirement of due process
or prior notice of an employee, including project employees is applicable only
when an employee is dismissed for just or authorized cause prior to the
completion of the project or phase for which the employee is engaged.
However, such is not the case.
Section 2 (III) provides that: if the termination is brought about by the completion
of the contract or phase thereof, no prior notice is required.
In the case of Gobres, no prior notice was required since the termination was
brought about by the completion of the project or phase for which they were
engaged for. No prior notice is required because completion of the work or
project automatically terminates the employment, in which case, the employer
is only obliged to render a report with DOLE on the termination of the
employment. Hence, prior or advance notice of termination is not part of the
procedural due process if the termination is brought about by the completion
of the contract of phase for which the employee was engaged.
DISPOSITION: WHEREFORE, the petition is GRANTED and the award of nominal
damages to respondents is deleted. No special pronouncement is made as to
costs.
22. Malicdem v. Marulas Industrial Corp
G.R. No. 204406, February 26, 2014 – Cornelio
Petitioner: MACARTHUR MALICDEM and HERMENIGILDO FLORES
Respondents: MARULAS INDUSTRIAL CORPORATION and MIKE MANCILLA
Employer MARULAS
Employee/Union MALICDEM and FLORES
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Labor Issue Regular or Project employees
DOCTRINE: A project or work pool employee, who has been: (1) continuously,
as opposed to intermittently, rehired by the same employer for the same tasks
or nature of tasks; and (2) those tasks are vital, necessary and indispensable to
the usual business or trade of the employer, must be deemed a regular
employee.
FACTS:
● Malicdem and Flores were first hired by Marulas as extruder operators. They
were responsible for the bagging of filament yarn, the quality of pp yarn
package and the cleanliness of the work place area.
● Their employment contracts were for a period of one year.
● Every year thereafter, they would sign a Resignation/Quitclaim in favor of
Marulas a day after their contracts ended, and then sign another contract
for one year.
● Until one day, Flores was told not to report for work anymore after being
asked to sign a paper by Marulas' HR Head to the effect that he
acknowledged the completion of his contractual status.
● Malicdem was also terminated after signing a similar document. Thus, both
claimed to have been illegally dismissed.
● Marulas countered that their contracts showed that they were fixed-term
employees for a specific undertaking which was to work on a particular
order of a customer for a specific period. Their severance from employment
was due to the expiration of their contracts.
RULING OF THE LOWER COURTS:
LA: Malicdem and Flores were not terminated and that their employment
naturally ceased when their contracts expired.
NLRC: Partially granted their appeal with the award of payment of 13th month
pay, service incentive leave and holiday pay for three (3) years.
CA: Petition denied.
RESPONDENT’s CONTENTION: They posit that the petitioners were contractual
employees and their rehiring did not amount to regularization.
ISSUE: Whether the petitioners are regular employees – YES.
RULING: Under Article 281 of the Labor Code, "an employee who is allowed to
work after a probationary period shall be considered a regular employee."
When an employer renews a contract of employment after the lapse of the six-
month probationary period, the employee thereby becomes a regular
employee. No employer is allowed to determine indefinitely the fitness of its
employees. While length of time is not the controlling test for project
employment, it is vital in determining if the employee was hired for a specific
undertaking or tasked to perform functions vital, necessary and indispensable
to the usual business of trade of the employer. Thus, in the earlier case of
Maraguinot, Jr. v. NLRC, it was ruled that a project or work pool employee, who
DEAD POOL
has been: (1) continuously, as opposed to intermittently, rehired by the same
employer for the same tasks or nature of tasks; and (2) those tasks are vital,
necessary and indispensable to the usual business or trade of the employer,
must be deemed a regular employee.
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. 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.
Guided by the foregoing, the Court is of the considered view that there was
clearly a deliberate intent to prevent the regularization of the petitioners.
To begin with, there is no actual project. The only stipulations in the contracts
were the dates of their effectivity, the duties and responsibilities of the petitioners
as extruder operators, the rights and obligations of the parties, and the
petitioners’ compensation and allowances. As there was no specific project or
undertaking to speak of, the respondents cannot invoke the exception in Article
280 of the Labor Code.
Next, granting that they were project employees, the petitioners could only be
considered as regular employees as the two factors enumerated in Maraguinot,
Jr., are present in this case. It is undisputed that the petitioners were continuously
rehired by the same employer for the same position as extruder operators. As
such, they were responsible for the operation of machines that produced the
sacks. Hence, their work was vital, necessary and indispensable to the usual
business or trade of the employer.
The respondents cannot use the alleged expiration of the employment
contracts of the petitioners as a shield of their illegal acts. The project
employment contracts that the petitioners were made to sign every year since
the start of their employment were only a stratagem to violate their security of
tenure in the company.
DISPOSITION: WHEREFORE, the petition is GRANTED. The assailed July 18, 2012
decision of the Court of Appeals and its November 12, 2012 Resolution in CA-
G.R. SP No. 1244 70, are hereby ANNULLED and SET ASIDE.
Accordingly, respondent Marulas Industrial Corporation is hereby ordered to
reinstate petitioners Macarthur Malicdem and Hermenigildo Flores to their
former positions without loss of seniority rights and other privileges and to pay
their full backwages, inclusive of allowances and their other benefits or their
monetary equivalent computed from the time their compensations were
withheld from them up to the time of their actual reinstatement plus the wage
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differentials stated in the July 13, 2011 decision of the Labor Arbiter, as modified
by the December 19, 2011 NLRC decision.
23. Jamias vs. National Labor Relations Commission (Second
Division)
G.R. No. 159350. March 9, 2016 - Daguinod
Petitioner/s: ALUMAMAY O. JAMIAS, JENNIFER C. MATUGUINAS and JENNIFER F.
CRUZ
Respondent/s: NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION),
HON. COMMISSIONERS: RAUL T. AQUINO, VICTORIANO R. CALAYCAY and
ANGELITA A. GACUTAN; HON. LABOR ARBITER VICENTE R. LAYAWEN; INNODATA
PHILIPPINES, INC., INNODATA PROCESSING CORPORATION, (INNODATA
CORPORATION), and TODD SOLOMON
Employer Innodata Philippines, Inc. (Innodata)
Employees Jamias, Matuguinas, Cruz,
Labor Issue Classification of Employment (Regular v. Project Employee)
DOCTRINE: The test to determine whether a particular employee is engaged as
a project or regular employee is whether or not the employee is assigned to
carry out a specific project or undertaking, the duration or scope of which was
specified at the time of his engagement
BERSAMIN, J.:
FACTS:
- Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation
engaged in the business of data processing and conversion for foreign
clients.
- It hired the following individuals on various dates and under the following
terms:
Name Position Duration of Contract
Alumamay Jamias Manual Editor August 7, 1995 to August 7, 1996
Marietha V. Delos Santos Manual Editor August 7, 1995 to August 7, 1996
Lilian R. Guamil Manual Editor August 16, 1995 to August 16, 1996
Rina C. Duque Manual Editor August 7, 1995 to August 7, 1996
Marilen Agabayani Manual Editor August 23, 1995 to August 23, 1996
- After the expiration of their respective contracts, the aforenamed
individuals filed a complaint for illegal dismissal claiming that Innodata had
made it appear that they had been hired as project employees in order to
prevent them from becoming regular employees.
Ruling of LA: Dismissed the complaint for lack of merit. Held that the petitioners
had knowingly signed their respective contracts in which the durations of their
engagements were clearly stated; and that their fixed term contracts, being
DEAD POOL
exceptions to Article 280 of the Labor Code, precluded their claiming
regularization.
Ruling of the NLRC: NLRC affirmed the decision of LA, opining that Article 280 of
the Labor Code did not prohibit employment contracts with fixed periods
provided the contracts had been voluntarily entered into by the parties.
Ruling of CA: the CA upheld the NLRC.
Petitioners’ Contentions (Jamias, Matuguinas and Cruz)
- The pronouncement in Villanueva v. National Labor Relations Commission
(Second Division) and Servidad v. National Labor Relations Commission in
which the Court accorded regular status to the employees because the
work they are performing are necessary and desirable to the business of
data encoding, processing and conversion settled the nature of their
employment, thus, stare decisis.
- They cannot be considered as project employees because the “project”
was nonexistent.
- The concept of “fixed term employment” or “project employment” were
not founded in law; and that Article 280 of the Labor Code guarantees the
right of workers to security of tenure, which rendered the contracts
between the petitioners and Innodata meaningless.
Respondent’s Contentions (Innodata)
- That the contracts dealt with in Villanueva and Servidad were different from
those entered into by the petitioners herein, in that the former contained
stipulations that violated the provisions of the Labor Code on probationary
employment and security of tenure, while the latter contained terms known
and explained to the petitioners who then willingly signed the same.
- That as a mere service provider, it did not create jobs because its
operations depended on the availability of job orders or undertakings from
its client.
- That Article 280 of the Labor Code allowed “term employment” as an
exception to security of tenure; and that the decisive determinant was the
day certain agreed upon by the parties, not the activities that the
employees were called upon to perform.
ISSUE: Whether petitioners are regular or project employees of Innodata? –
Project Employees
RULING:
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 agreements of the parties, an employment
shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer except
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
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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.
An employment shall be deemed casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his
employment shall continue while such actually exists.
The provision contemplates three kinds of employees, namely: (a) regular
employees; (b) project employees; and (c) casuals who are neither regular nor
project employees. The nature of employment of a worker is determined by the
factors provided in Article 280 of the Labor Code, regardless of any stipulation
in the contract to the contrary. Thus, in Brent School, Inc. v. Zamora, we
explained that the clause referring to written contracts should be construed to
refer to agreements entered into for the purpose of circumventing the security
of tenure. Obviously, Article 280 does not preclude an agreement providing for
a fixed term of employment knowingly and voluntarily executed by the parties.
A fixed term agreement, to be valid, must strictly conform with the requirements
and conditions provided in Article 280 of the Labor Code. The test to determine
whether a particular employee is engaged as a project or regular employee is
whether or not the employee is assigned to carry out a specific project or
undertaking, the duration or scope of which was specified at the time of his
engagement. There must be a determination of, or a clear agreement on, the
completion or termination of the project at the time the employee is engaged.
Otherwise put, the fixed period of employment must be knowingly and
voluntarily agreed upon by the parties, without any force, duress or improper
pressure being brought
In this case, the contracts of the petitioners indicated the one-year duration of
their engagement as well as their respective project assignments (i.e., Jamias
being assigned to the CD- ROM project; Cruz and Matuguinas to the TSET
project). There is no indication that the petitioners were made to sign the
contracts against their will. Neither did they refute Innodata’s assertion that it did
not employ force, intimidate or fraudulently manipulate the petitioners into
signing their contracts, and that the terms thereof had been explained and
made known to them. Hence, the petitioners knowingly agreed to the terms of
and voluntarily signed their respective contracts.
That Innodata drafted the contracts with its business interest as the overriding
consideration did not necessarily warrant the holding that the contracts were
prejudicial against the petitioners. The fixing by Innodata of the period specified
in the contracts of employment did not also indicate its ill motive to circumvent
the petitioners’ security of tenure. Indeed, the petitioners could not presume
that the fixing of the one-year term was intended to evade or avoid the
protection to tenure under Article 280 of the Labor Code in the absence of other
DEAD POOL
evidence establishing such intention. This presumption must ordinarily be based
on some aspect of the agreement other than the mere specification of the fixed
term of the employment agreement, or on evidence aliunde of the intent to
evade.
Lastly, the petitioners posit that they should be accorded regular status because
their work as editors and proofreaders were usually necessary to Innodata’s
business of data processing was untenable because, for one, it would be
unusual for a company like Innodata to undertake a project that had no
relationship to its usual business. Also, the necessity and desirability of the work
performed by the employees are not the determinants in term employment, but
rather the “day certain” voluntarily agreed upon by the parties.
As the CA cogently observed in this respect:
There is proof to establish that Innodata’s operations indeed rests
upon job orders or undertakings coming from its foreign clients.
Apparently, its employees are assigned to projects — one batch
may be given a fixed period of one year, others, a slightly shorter
duration, depending on the estimated time of completion of the
particular job or undertaking farmed out by the client to the
company.
In fine, the employment of the petitioners who were engaged as project
employees for a fixed term legally ended upon the expiration of their contract.
Their complaint for illegal dismissal was plainly lacking in merit.
As to the Inapplicability of Stare decisis
Servidad and Villanueva involved contracts that contained stipulations not
found in the contracts entered by the petitioners. The employment contract
subject of contention in the Servidad and Villanueva cases provided for double
probation, meaning, that the employees concerned, by virtue of a clause
incorporated in their contracts, were made to remain as probationary
employees even if they continue to work beyond the six-month probation
period set by law. Indeed, such stipulation militates against Constitutional policy
of guaranteeing the tenurial security of the workingman.
The Court invalidated in Innodata Philippines, Inc. v. Quejada-Lopez was the
purported fixed-term contract that provided for two periods — a fixed term of
one year under paragraph 1 of the contract, and a three-month period under
paragraph 7.4 of the contract — that in reality placed the employees under
probation. In contrast, the petitioners’ contracts did not contain similar
stipulations, but stipulations to the effect that their engagement was for the fixed
period of 12 months.
In other words, the terms of the petitioners’ contracts did not subject them to a
probationary period similar to that indicated in the contracts struck down in
Innodata, Villanueva and Servidad.
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LABOR REVIEW: Classed of Employees (August 28, 2019)
DISPOSITION: WHEREFORE, we DENY the petition for review on certiorari; AFFIRM
the decision promulgated on July 31, 2002; and ORDER the petitioners to pay
the costs of suit.
23. (Version 2?? Dalawa sila gumawa haha) Jamias v. NLRC
G.R. No. 159350. March 9, 2016 – Miguel
Petitioner: ALUMAMAY O. JAMIAS, JENNIFER C. MATUGUINAS
and JENNIFER F. CRUZ
Respondents: NATIONAL LABOR RELATIONS COMMISSION (SECOND
DIVISION), HON. COMMISSIONERS: RAUL T. AQUINO, VICTORIANO R.
CALAYCAY and ANGELITA A. GACUTAN; HON. LABOR ARBITER VICENTE R.
LAYAWEN; INNODATA PHILIPPINES, INC., INNODATA PROCESSING
CORPORATION, (INNODATA CORPORATION), and TODD SOLOMON,
Employer Innodata Philippines, Inc. (Innodata)
Employee/Union Jamias, et al.
Labor Issue
DOCTRINE: The nature of employment of a worker is determined by the factors
provided in Article 280 of the Labor Code, regardless of any stipulation in the
contract to the contrary.
The test to determine whether a particular employee is engaged as a
project or regular employee is whether or not the employee is assigned to
carry out a specific project or undertaking, the duration or scope of which was
specified at the time of his engagement.
FACTS:
• Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation
engaged in the business of data processing and conversion for foreign
clients, hired the following individuals on various dates: Alumamay Jamias
Marietha Delos Santos and Rina C. Duque, for a duration of August 7, 1995
to August 7, 1996 and Lilian R. Guamil from August 16, 1995 to August 16,
1996 and Marilen Agbayani from August 23, 1995 to August 23, 1996.
• After their respective contracts expired, the aforenamed individuals filed a
complaint for illegal dismissal claiming that Innodata had made it appear
that they had been hired as project employees in order to prevent them
from becoming regular employees.
RULING OF THE LOWER COURTS:
LA: Labor Arbiter (LA) Vicente Layawen rendered his decision dismissing the
complaint for lack of merit He found and held that the petitioners had knowingly
signed their respective contracts in which the durations of their engagements
were clearly stated and that their fixed term contracts, being exceptions to
Article 280 of the Labor Code, precluded their claiming regularization.
DEAD POOL
NLRC: NLRC affirmed the decision of LA Layawen,16 opining that Article 280 of
the Labor Code did not prohibit employment contracts with fixed periods
provided the contracts had been voluntarily entered into by the parties
CA: CA upheld the NLRC. It observed that the desirability and necessity of the
functions being discharged by the petitioners did not make them regular
employees; that Innodata and the employees could still validly enter into their
contracts of employment for a fixed period provided they had agreed upon the
same at the time of the employees’ engagement; that Innodata’s operations
were contingent on job orders or undertakings for its foreign clients; and that the
availability of contracts from foreign clients, and the duration of the
employments could not be treated as permanent, but coterminous with the
projects.
PETITIONER’s CONTENTION: The petitioners maintain that regular status have
been accorded to the employees because the work they performed were
necessary and desirable to the business of data encoding, processing and
conversion. that the CA also erroneously found that the engagement of the
petitioners was coterminous with the project that was nonexistent; that Innodata
engaged in “semantic interplay of words” by introducing the concept of “fixed
term employment” or “project employment” that were not founded in law; and
that Article 280 of the Labor Code guarantees the right of workers to security of
tenure, which rendered the contracts between the petitioners and Innodata
meaningless.
RESPONDENT’s CONTENTION: Innodata insists that as a mere service provider, it
did not create jobs because its operations depended on the availability of job
orders or undertakings from its client;31 that Article 280 of the Labor Code
allowed “term employment” as an exception to security of tenure; and that the
decisive determinant was the day certain agreed upon by the parties, not the
activities that the employees were called upon to perform.
ISSUE: Whether or not petitioners regular or project employees of Innodata –
PROJECT EMPLOYEES.
RULING: The nature of employment of a worker is determined by the factors
provided in Article 280 of the Labor Code, regardless of any stipulation in the
contract to the contrary. A fixed term agreement, to be valid, must strictly
conform with the requirements and conditions provided in Article 280 of the
Labor Code. The test to determine whether a particular employee is engaged
as a project or regular employee is whether or not the employee is assigned to
carry out a specific project or undertaking, the duration or scope of which w as
specified at the time of his engagement. There must be a determination of, or
a clear agreement on, the completion or termination of the project at the time
the employee is engaged. Otherwise put, the fixed period of employment must
be knowingly and voluntarily agreed upon by the parties, without any force,
duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or it must satisfactorily
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appear that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatsoever being exercised by the
former on the latter.
The contracts of the petitioners indicated the one-year duration of their
engagement as well as their respective project assignments There is no
indication that the petitioners were made to sign the contracts against their will.
Neither did they refute Innodata’s assertion that it did not employ force,
intimidate or fraudulently manipulate the petitioners into signing their contracts,
and that the terms thereof had been explained and made known to them.
Hence, the petitioners knowingly agreed to the terms of and voluntarily signed
their respective contracts.
The fixing by Innodata of the period specified in the contracts of employment
did not also indicate its ill motive to circumvent the petitioners’ security of tenure.
Indeed, the petitioners could not presume that the fixing of the one-year term
was intended to evade or avoid the protection to tenure under Article 280 of
the Labor Code in the absence of other evidence establishing such intention.
DISPOSITION: In fine, the employment of the petitioners who were engaged as
project employees for a fixed term legally ended upon the expiration of their
contract. Their complaint for illegal dismissal was plainly lacking in merit.
WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision
promulgated on July 31, 2002; and ORDER the petitioners to pay the costs of suit.
24. E. GANZON, INC. (EGI)AND EULALIO GANZON v. FORTUNATO B.
ANDO, JR,
G.R. No. 214183, February 20, 2017 – – Diño
Petitioner: E. GANZON, INC. (EGI)AND EULALIO GANZON
Respondent: FORTUNATO B. ANDO, JR.
EMPLOYER E. GANZON INC (EGI)
EMPLOYEE FORTUNATO B. ANDO, JR
Doctrine: When the employer is engaged in the Construction Business,
like the petitioner in this case, it usually entails that its workers were
categorized as “Project Employees” because it would be extremely
burdensome for the employer if it would have to carry them as
permanent employees and pay them wages even if there are no
projects for them to work on. Thus, in this case, the nature of EGI's
business is one which will not allow it to employ workers for an indefinite
period. As a corporation engaged in construction and residential
projects, EGI depends for its business on the contracts it is able to
obtain. Since work depends on the availability of such contracts,
necessarily the duration of the employment of its work force is not
DEAD POOL
permanent but coterminous with the projects to which they are
assigned and from whose payrolls they are paid.
Facts:
On May 16, 2011, respondent Fortunato B. Ando, Jr. (Ando) filed a
complaint against petitioner E. Ganzon, Inc. (EGI) and its President,
6
Eulalio Ganzon, for illegal dismissal and money claims for:
underpayment of salary, overtime pay, and 13 month pay; non-
th
payment of holiday pay and service incentive leave; illegal deduction;
and attorneys fees.
RESPONDENT’S CONTENTION: He alleged that he was a regular
employee working as a finishing carpenter in the construction business
of EGI; he was repeatedly hired from January 21, 2010 until April 30, 2011
when he was terminated without prior notice and hearing; his daily
salary of 292.00 was below the amount required by law; and wage
deductions were made without his consent, such as rent for the
barracks located in the job site and payment for insurance premium.
PETITIONER’S CONTENTION: EGI countered that, as proven by the three
(3) project employment contract, Ando was engaged as a project
worker (Formworker-2) in Bahay Pamulinawen Project in Laoag, Ilocos
Norte from June 1, 2010 to September 30,2010 and from January 3, 2011
to February 28,2011 as well as in EGI West Insula Project in Quezon City,
8
Metro Manila from February 22, 2011 to March 31, 2011; he was paid
the correct salary based on the Wage Order applicable in the region;
he already received the 13th month pay for 2010 but the claim for 2011
was not yet processed at the time the complaint was filed; and he
voluntarily agreed to pay 500.00 monthly for the cost of the barracks,
beds, water, electricity, and other expenses of his stay at the job site.
Ruling of the Lower Courts:
LABOR ARBITER: declared Ando a project employee of EGI but granted
some of his money claims.
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 LABOR REVIEW: Classed of Employees (August 28, 2019)
NLRC: dismissed the appeals filed and affirmed in toto the Decision of
the Labor Arbiter
Court of Appeals: CA opined that Ando's contracts do not bear the
essential element of a project employment because while his contracts
stated the period by which he was engaged, his tenure remained
indefinite. The appellate court ruled that the stipulation that his services
"could be extended or shortened depending on the work phasing" runs
counter to the very essence of project employment since the certainty
of the completion or termination of the projects is in question. It was
noted that, based on Ando's payslips, his services were still engaged by
EGI even after his contracts expired. These extensions as well as his
repeated rehiring manifested that the work he rendered are necessary
and desirable to EGI's construction business, thereby removing him from
the scope of project employment contemplated under Article 280.
ISSUE:
WON Ando is a Project Employee of EGI? YES.
RULING:
Records show that Ando's contracts for Bahay Pamulinawen Project
were extended until December 31, 2010 (from the original stated date
32
of September 30, 2010) and shortened to February 15,2011 (from the 33
original stated date of February 28, 2011) while his services in West Insula
Project was extended until April 30, 2011 (from the original stated date
34
of March 31, 2011). These notwithstanding, he is still considered as a
project, not regular, employee of EGI.
A project employment contract is valid under the
x x x By entering into such a contract, an employee is deemed to
understand that his employment is coterminous with the
project. He may not expect to be employed continuously
beyond the completion of the project. It is of judicial notice
that project employees engaged for manual services or
those for special skills like those of carpenters or masons,
are, as a rule, unschooled. However, this fact alone is not a
DEAD POOL
valid reason for bestowing special treatment on them or for
invalidating a contract of employment. Project
employment contracts are not lopsided agreements in
favor of only one party thereto. The employer's interest is
equally important as that of the employee's for theirs is the
interest that propels economic activity. While it may be true
that it is the employer who drafts project employment
contracts with its business interest as overriding
consideration, such contracts do not, of necessity,
prejudice the employee. Neither is the employee left
helpless by a prejudicial employment contract. After all,
under the law, the interest of the worker is paramount.
The Court has upheld the validity of a project-based contract of
employment provided that the period was agreed upon knowingly
and voluntarily by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any
other circumstances vitiating his consent; or where it satisfactorily
appears that the employer and employee dealt with each other on
more or less equal terms with no moral dominance whatever being
exercised by the former over the latter; and it is apparent from the
circumstances that the period was not imposed to preclude the
acquisition of tenurial security by the employee. Otherwise, such
36
contract should be struck down as contrary to public policy, morals,
good custom or public order. 37
Here, Ando was adequately notified of his employment status at the
time his services were engaged by EGI for the Bahay Pamulinawen and
the West Insula Projects. The contracts he signed consistently stipulated
that his services as a project worker were being sought. There was an
informed consent to be engaged as such. His consent was not vitiated.
As a matter of fact, Ando did not even allege that force, duress or
improper pressure were used against him in order to agree. His being a
law. carpenter does not suffice.
The fact that Ando was required to render services necessary or
desirable in the operation of EGI's business for more than a year does
not in any way impair the validity of his project employment contracts.
Time and again, We have held that the length of service
through repeated and successive rehiring is not the controlling
determinant of the employment tenure of a project employee. The 44
rehiring of construction workers on a project-to-project basis does not
confer upon them regular employment status as it is only dictated by
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LABOR REVIEW: Classed of Employees (August 28, 2019)
the practical consideration that experienced construction workers are
more preferred. In Ando's case, he was rehired precisely because of
45
his previous experience working with the other phases of the project.
EGI took into account similarity of working environment.
Finally, the second paragraph of Article 280, stating that an employee
who has rendered service for at least one (1) year shall be considered
a regular employee, is applicable only to a casual employee and not
to a project or a regular employee referred to in paragraph one
thereof.47
The foregoing considered, EGI did not violate any requirement of
procedural due process by failing to give Ando advance notice of his
termination. Prior notice of termination is not part of procedural due
process if the termination is brought about by the completion of the
contract or phase thereof for which the project employee was
engaged. Such48 completion automatically terminates the
employment and the employer is, under the law, only required to
render a report to the Department of Labor and Employment (DOLE)
on the termination of employment. In this case, it is undisputed that EGI
49
submitted the required Establishment Employment Reports to DOLE-
NCR Makati/Pasay Field Office regarding Ando's "temporary lay-off'
effective February 16, 2011 and "permanent termination" effective May
2, 2011.
DISPOSITION:
WHEREFORE, premises considered, the petition is GRANTED. The
February 28, 2014 Decision and September 4, 2014 Resolution of the
Court of Appeals in CA-G.R. SP No. 126624, which annulled the
Resolutions dated May 25, 2012 and July 17, 2012 of the National
Labor Relations Commission which affirmed in toto the December 29,
2011 Decision of the Labor Arbiter, are REVERSED AND SET ASIDE. The
Decision of the Labor Arbiter is REINSTATED.
25. Herma Shipyard, Inc. v. Esguerra
G.R. No. 208936, April 17, 2017 – Diocales
Petitioner: HERMA SHIPYARD, INC., AND MR. HERMINIO ESGUERRA
Respondents: DANILO OLIVEROS, JOJIT BESA, ARNEL SABAL, CAMILO OLIVEROS,
ROBERT NARIO, FREDERICK CATIG, RICARDO ONTALAN, RUDEN DELGADO,
SEGUNDO LABOSTA, EXEQUIEL OLIVERIA, OSCAR TIROL AND ROMEO TRINIDAD
DEAD POOL
Employer HERMA SHIPYARD, INC.
DANILO OLIVEROS, JOJIT BESA, ARNEL SABAL,
CAMILO OLIVEROS, ROBERT NARIO, FREDERICK
CATIG, RICARDO ONTALAN, RUDEN DELGADO,
SEGUNDO LABOSTA, EXEQUIEL OLIVERIA, OSCAR
Employee/Union TIROL AND ROMEO TRINIDAD
Labor Issue Classes of Employees – Project employees
DOCTRINE:
The services of project-based employees are co-terminous with the project and
may be terminated upon the end or completion of the project or a phase
thereof for which they were hired. The principal test in determining whether
particular employees were engaged as project-based employees, as
distinguished from regular employees, is whether they were assigned to carry
out a specific project or undertaking, the duration and scope of which was
specified at, and made known to them, at the time of their engagement. It is
crucial that the employees were informed of their status as project employees
at the time of hiring and that the period of their employment must be knowingly
and voluntarily agreed upon by the parties, without any force, duress, or
improper pressure being brought to bear upon the employees or any other
circumstances vitiating their consen.t
FACTS:
• Herma Shipyard a domestic corporation engaged in the business of
shipbuilding and repair. The respondents were its employees occupying
various positions such as welder, leadman, pipe fitter, laborer, helper, etc.
• The respondents filed a Complaint for illegal dismissal, regularization, and
non-payment of service incentive leave pay with prayer for the payment
of full backwages and attorney's fees against petitioners.
• Respondents alleged that they are Herma Shipyard's regular employees
who have been continuously performing tasks usually necessary and
desirable in its business. On various dates, however, petitioners dismissed
them from employment.
• Respondents further alleged that as a condition to their continuous and
uninterrupted employment, petitioners made them sign employment
contracts for a fixed period ranging from one to four months to make it
appear that they were project-based employees.
• Per respondents, petitioners resorted to this scheme to defeat their right to
security of tenure, but in truth there was never a time when they ceased
working for Herma Shipyard due to expiration of project-based
employment contracts. In fact, if they were indeed project employees,
petitioners should have reported to the Department of Labor and
Employment (DOLE) the completion of such project. But petitioners have
never submitted such report to the DOLE.
• For their defense, petitioners argued that respondents were its project-
based employees in its shipbuilding projects and that the specific project
for which they were hired had already been completed. In support thereof,
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Herma Shipyard presented contracts of employment, some of which are
written in the vernacular and denominated as Kasunduang Paglilingkod
(Pang-Proyektong Kawani).
RULING OF THE LOWER COURTS:
LA: The Labor Arbiter held that respondents were project based
employees whose services were validly terminated upon the completion of the
specific work for which they were individually hired
NLRC: It sustained the finding of the Labor Arbiter that based on their
employment contracts, respondents were project-based employees hired to do
a particular project for a specific period of time.
PETITIONER’s CONTENTION: Respondents were its project-based employees in its
shipbuilding projects and that the specific project for which they were hired had
already been completed.
RESPONDENT’s CONTENTION: They are Herma Shipyard's regular employees who
have been continuously performing tasks usually necessary and desirable in its
business.
ISSUE: Whether or not the respondents were project-based employees and not
regular employees – Project employees
RULING:
Who are project-based employees?
A project employee under Article 280 (now Article 294)18 of the Labor Code, as
amended, is one whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at
the time of the engagement of the employee. Thus:
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 service to be performed is seasonal in nature
and the employment is for the duration of the season.
x x x x (Emphasis supplied)
The services of project-based employees are co-terminous with the project and
may be terminated upon the end or completion of the project or a phase
thereof for which they were hired. The principal test in determining whether
particular employees were engaged as project-based employees, as
distinguished from regular employees, is whether they were assigned to carry
out a specific project or undertaking, the duration and scope of which was
specified at, and made known to them, at the time of their engagement. It is
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crucial that the employees were informed of their status as project employees
at the time of hiring and that the period of their employment must be knowingly
and voluntarily agreed upon by the parties, without any force, duress, or
improper pressure being brought to bear upon the employees or any other
circumstances vitiating their consent.
Respondents knowingly and voluntarily entered into and signed the project-
based employment contracts.
The records of this case reveal that for each and every project respondents
were hired, they were adequately informed of their employment status as
project--based employees at least at the time they signed their employment
contract. They were fully apprised of the nature and scope of their work
whenever they affixed their signature to their employment contract. Their
contracts of employment (mostly written in the vernacular) provide in no
uncertain terms that they were hired as project based employees whose
services are coterminous with the completion of the specific task indicated
therein. All their contracts of employment state clearly the date of the
commencement of the specific task and the expected completion date
thereof. They also contain a provision expressly stating that respondents'
employment shall end upon the arrival of the target completion date or upon
the completion of such project
There is no indication that respondents were coerced into signing their
employment contracts or that they affixed their signature thereto against their
will. While they claim that they signed the said contracts in order to secure
continuous employment, they have not, however, presented sufficient
evidence to support the same other than their bare allegations. It is settled that
"[c]ontracts for project employment are valid under the law." Thus, in Jamias v.
National Labor Relations Commission,24 this Court upheld the project
employment contracts which were knowingly and voluntarily signed by the
employees for want of proof that the employers employed force, intimidation,
or fraudulently manipulated them into signing the same. Similarly in this case, by
voluntarily entering into the aforementioned project employment contracts,
respondents are deemed to have understood that their employment is
coterminous with the particular project indicated therein. They cannot expect
to be employed continuously beyond the completion of such project because
a project employment terminates as soon as it is completed.
Performance by project-based employees of tasks necessary and desirable to
the usual business operation of the employer will not automatically result in their
regularization.
It is settled that project-based employees may or may not be performing tasks
usually necessary or desirable in the usual business or trade of the employer. The
fact that the job is usually necessary or desirable in the business operation of the
employer does not automatically imply regular employment; neither does it
impair the validity of the project employment contract stipulating fixed duration
of employment.
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Here, a meticulous examination of the contracts of employment reveals that
while the tasks assigned to the respondents were indeed necessary and
desirable in the usual business of Herma Shipyard, the same were distinct,
separate, and identifiable from the other projects or contract services.
Repeated rehiring of project employees to different projects does not ipso facto
make them regular employees.
"[T]he repeated and successive rehiring [of respondents as project-based
employees] does not [also], by and of itself, qualify them as regular employees.
Case law states that length of service (through rehiring) is not the controlling
determinant of the employment tenure [of project-based employees but, as
earlier mentioned], whether the employment has been fixed for a specific
project or undertaking, with its completion having been determined at the time
of [their] engagement." Stated otherwise, the rule that employees initially hired
on a temporary basis may become permanent employees by reason of their
length of service is not applicable to project-based employees.
The completion of their work or project automatically terminates their
employment, in which case, the employer is, under the law, only obliged to
render a report on the termination of the employment. As for respondents, since
they were assigned to a project or a phase thereof which begins and ends at
determined or determinable times, their services were lawfully terminated upon
the completion of such project or phase thereof.
Respondents were and remained project-based employees, albeit repeatedly
rehired. Contrary to their claim, respondents' employment were neither
continuous and uninterrupted nor for a uniform period of one month; they were
intermittent with varying durations, as well as gaps ranging from a few days to
several weeks or months. These gaps coincide with the completion of a
particular project and the start of a new specific and distinct project for which
they were individually rehired. And for each completed project, petitioners
submitted the required Establishment Employment Records to the DOLE which is
a clear indicator of project employment. The records also show that
respondents' employment had never been extended beyond the completion
of each project or phase thereof for which they had been engaged.
The project employment contract is not subject to a condition.
As to the requirement that the completion or termination of the specific project
or undertaking or which respondents were hired should be determined at the
time of their engagement, the court ruled and so hold that it is enough that
Herma Shipyard gave the approximate or target completion date in the project
employment contract. Given the nature of its business and the scope of its
projects which take months or even years to finish, we cannot expect Herma
Shipyard to give a definite and exact completion date. It can only approximate
or estimate the completion date. What is important is that the respondents were
apprised at the time of their engagement that their employment is coterminous
with the specific project and that should their employment be extended by
virtue of paragraph 10 the purpose of the extension is only to complete the same
specific project, and not to keep them employed even after the completion
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thereof. Put differently, paragraph 10 of the contract does not allow the parties
to extend the period of respondents' employment after the completion of the
specific project for which they were hired. Their employment can only be
extended if that particular project, to which their employment depends,
remains unfinished.
DISPOSITION: WHEREFORE, the instant Petition for Review on Certiorari is
GRANTED. The assailed Decision dated May 30, 2013 of the Court of Appeals in
CA-G.R. SP No. 118068 is REVERSED and SET ASIDE. The May 24, 2010 Decision of
the Labor Arbiter dismissing respondents' Complaint and affirmed by the
National Labor Relations Commission in its Decision dated September 7, 2010 is
REINSTATED and AFFIRMED.
26. Minsola v. New City Builders, Inc.
G.R. No. 207613, January 31, 2018 – Elmido
Petitioner: REYMAN MINSOLA
Respondents: NEW CITY BUILDERS, INC. and ENGR. ERNEL FAJARDO
Employer New City Builders, Inc.
Employee/Union Reyman Minsola
Whether Minsola is a project employee of New City
Labor Issue
Builders – YES.
DOCTRINE: In a project-based employment, the employee is assigned to a
particular project or phase, which begins and ends at a determined or
determinable time. Consequently, the services of the project employee may be
lawfully terminated upon the completion of such project or phase. For
employment to be regarded as project-based, it is incumbent upon the
employer to prove that (i) the employee was hired to carry out a specific project
or undertaking, and (ii) the employee was notified of the duration and scope of
the project. In order to safeguard the rights of workers against the arbitrary use
of the word "project" as a means to prevent employees from attaining regular
status, employers must prove that the duration and scope of the employment
were specified at the time the employees were engaged, and prove the
existence of the project.
FACTS:
• New City Builders, Inc. is a corporation duly organized under the laws of the
Philippines engaged in the construction business, specializing in structural
and design works.
• December 2008 – New City hired Minsola as a laborer for the structural
phase of its Avida Tower 3 Project (Avida 3). Minsola was given a salary of
Php 260.00 per day. The employment contract stated that the duration of
Minsola's employment will last until the completion of the structural phase.
• August 2009 – The structural phase of the Avida 3 was completed. Thus,
Minsola received a notice of termination, which stated that his employment
shall be effectively terminated at the end of working hours at 5:00 p.m. on
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even date.
• August 2009 – New City re-hired Minsola as a mason for the architectural
phase of the Avida 3.
• December 2009 – Upon reviewing Minsola's employment record, New City
noticed that Minsola had no appointment paper as a mason for the
architectural phase. Consequently, New City instructed Minsola to update
his employment record. However, the latter ignored New City's instructions,
and continued to work without an appointment paper.
• January 2010 – Minsola was again summoned to the office of New City to
sign his appointment paper. Minsola adamantly refused to comply with the
directive. He stormed out of the office, and never reported back for work.
• Minsola filed a Complaint for Illegal Dismissal, Underpayment of Salary, Non-
Payment of 13th Month Pay, Separation Pay and Refund of Cash Bond.
RULING OF THE LOWER COURTS:
LA: Dismissed the complaint for illegal dismissal. The LA found that Minsola was
a project employee who was hired for specific projects by New City. The fact
that Minsola worked for more than one year did not convert his employment
status to regular. The LA stressed that the second paragraph of Article 280, which
refers to the regularization of an employee who renders service for more than
one year, pertains to casual employees.
NLRC: Reversed the LA Ruling. The NLRC concluded that Minsola became a
regular employee when his services were continued beyond the original term of
his project employment, without the benefit of a new contract fixing the
duration of his employment. Minsola's job as a laborer/mason was necessary
and desirable to the usual business of New City.
CA: Reversed the NLRC Decision. The CA ruled that Minsola was a project
employee. The CA reasoned that Minsola was hired for specific phases in the
Avida 3. He was originally hired as a laborer for the structural phase of the Avida
3. Upon the completion of the structural phase, he was re-hired in a different
capacity, as a mason for the architectural phase of the Avida 3 construction.
The CA observed that Minsola's tenure as a laborer was covered by an
employment contract, which clearly provided that he was hired to work for a
certain phase in the construction of the Avida 3, and that his term of
employment will not extend beyond the completion of the same project.
PETITIONER’S CONTENTIONS:
• Minsola claims that he is a regular employee as his work as a laborer/mason
was necessary and desirable to New City's construction business.
• He worked for New City for more than one year, more particularly, for 13
months, thereby automatically bestowing upon him regular employment
status.
• Although he was initially hired as a laborer, his employment in Avida 3
continued when he was re-hired as a mason, without the execution of
another contract fixing the term of his employment.
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• New City's act of forcing him to sign an employment contract is a scheme
to preclude him from acquiring permanent employment status.
RESPONDENT’S CONTENTIONS:
• Minsola was hired as a project employee to work for the structural phase,
and thereafter, the architectural phase of the Avida 3.
• His work as a laborer was completely different from his tasks as a mason.
• His subsequent re-hiring cannot be construed as a continuation of his
former employment.
• The fact that his employment has gone beyond one year does not
automatically convert his employment status.
ISSUE: Whether or not Minsola was a project employee – YES.
RULING: Essentially, the Labor Code classifies four (4) kinds of employees,
namely: (i) 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; (ii) 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 employees' engagement; (c)
seasonal employees or those who perform services which are seasonal in
nature, and whose employment lasts during the duration of the season; and (d)
casual employees or those who are not regular, project, or seasonal employees.
Jurisprudence has added a fifth kind — fixed-term employees or those hired only
for a definite period of time. Focusing on the first two kinds of employment,
Article 294 of the Labor Code distinguishes regular from project-based
employment as follows:
“Article 294. 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.”
Parenthetically, in a project-based employment, the employee is assigned to a
particular project or phase, which begins and ends at a determined or
determinable time. Consequently, the services of the project employee may be
lawfully terminated upon the completion of such project or phase. For
employment to be regarded as project-based, it is incumbent upon the
employer to prove that (i) the employee was hired to carry out a specific project
or undertaking, and (ii) the employee was notified of the duration and scope of
the project. In order to safeguard the rights of workers against the arbitrary use
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of the word "project" as a means to prevent employees from attaining regular
status, employers must prove that the duration and scope of the employment
were specified at the time the employees were engaged, and prove the
existence of the project.
In the case at bar, Minsola was hired by New City Builders to perform work for
two different phases in the construction of the Avida 3. The records show that
he was hired as a laborer for the structural phase of the Avida 3 from December
16, 2008 until August 24, 2009. Upon the completion of the structural phase, he
was again employed on August 25, 2009, by New City, this time for the
architectural phase of the same project. There is no quibbling that Minsola was
adequately informed of his employment status (as a project employee) at the
time of his engagement. This is clearly substantiated by the latter's employment
contracts, stating that: (i) he was hired as a project employee; and (ii) his
employment was for the indicated starting dates therein, and will end on the
completion of the project. The said contract sufficiently apprised Minsola that
his security of tenure with New City would only last as long as the specific phase
for which he was assigned.
Accordingly, it is not uncommon for a construction firm to hire project
employees to perform work necessary and vital for its business. Suffice it to say,
in William Uy Construction Corp. and/or Uy, et al. v. Trinidad, the Court
acknowledged the unique characteristic of the construction industry and
emphasized that the laborer's performance of work that is necessary and vital
to the employer's construction business, and the former's repeated rehiring, do
not automatically lead to regularization.
Additionally, in Malicdem, et al. v. Marulas Industrial Corporation, et al., the
Court took judicial notice of the fact that in the construction industry, an
employee's work depends on the availability of projects. The employee's tenure
"is not permanent but coterminous with the work to which he is assigned.”
Consequently, it would be extremely burdensome for the employer, who
depends on the availability of projects, to carry the employee on a permanent
status and pay him wages even if there are no projects for him to work on. An
employer cannot be forced to maintain the employees in the payroll, even after
the completion of the project. "To do so would make the employee a privileged
retainer who collects payment from his employer for work not done. This is
extremely unfair to the employers and amounts to labor coddling at the
To all Hacienda Employees:
expense of management.”
Please bear in mind that all those who signed in favor of CARP are expressing their
Accordingly, it is all too apparent that the employee's length of service and
repeated re-hiring constitute an unfair yardstick for determining regular Wherefore, beginning today, July 18, only those who did not sign for CARP will be
employment in the construction industry. Thus, Minsola's rendition of more than
one year of service and his repeated re-hiring are not badges of regularization.
DISPOSITION: WHEREFORE, premises considered, the petition is partly granted.
The Decision dated December 21, 2012 of the Court of Appeals in CA-G.R. SP
No. 121129, is modified by awarding petitioner Reyman G. Minsola his salary
differentials, service incentive leave pay differentials, holiday pay, and ten
DEAD POOL
percent attorney's fees, in addition to his 13th month pay differential awarded
by the appellate court. The Labor Arbiter is ordered to prepare a
comprehensive accounting of all monetary claims pursuant to this Court's ruling.
The total amount shall earn legal interest of six percent (6%) per annum from the
finality of this Decision until full satisfaction of the obligation.
27. Benares v. Pancho
– Encarnacion
28. Hacienda Bino v. Cuenca
G.R. No. 150478. April 15, 2005- Gutierrez
Employer Hacienda Bino
Employee/Union Cuenca, et. Al
Employment Status – Court ruled respondents
Labor Issue are regular employees
DOCTRINE: The primary standard for determining regular employment
is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of
the employer. For certain farmworkers 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
employed only for the duration of one season.
FACTS:
1. The 76 individual respondents were part of the workforce of
Hacienda Bino consisting of 220 workers, performing various works,
such as cultivation, planting of cane points, fertilization, watering,
weeding, harvesting, and loading of harvested sugarcanes to
cargo trucks.
2. On July 18, 1996, during the off-milling season, petitioner Starke
issued an Order or Notice which stated, thus:
desire to get out of employment on their own volition.
given employment by Hda. Bino.
3. The respondents regarded such notice as a termination of their
employment. As a consequence, they filed a complaint for illegal
dismissal, wage differentials, 13th month pay, holiday pay and
premium pay for holiday, service incentive leave pay, and moral and
exemplary damages.
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4. The respondents as complainants alleged inter alia that they
are regular and permanent workers of the hacienda and that they
were dismissed without just and lawful cause. They further alleged that
they were dismissed because they applied as beneficiaries under the
Comprehensive Agrarian Reform Program (CARP) over the land
owned by petitioner Starke.
5. Petitioner Starke alleged that, there was little work in the
plantation as it was off-season; and so, on account of the seasonal
nature of the work, she issued the order giving preference to those who
supported the re-classification. She pointed out that when the milling
season began in October 1996, the work was plentiful again and she
issued notices to all workers, including the respondents, informing them
of the availability of work. However, the respondents refused to report
back to work.
Ruling of Lowe Courts/Admin Agencies:
LA ruled that petitioner Starke’s notice dated July 18, 1996 was
tantamount to a termination of the respondents’ services, and holding
that the petitioner company was guilty of illegal dismissal. NLRC
affirmed upon appeal. CA affirmed the same.
ISSUE: Whether the respondents are regular employees - YES
RULING:
Petitioner Starke contends that the established doctrine that seasonal
employees are regular employees had been overturned and
abandoned by Mercado, Sr. v. NLRC. She stresses that in that case, the
Court held that petitioners therein who were sugar workers, are
seasonal employees and their employment legally ends upon
completion of the project or the season. She asserts that the
respondents (Cuence, et. Al), who are also sugar workers, are seasonal
employees; hence, their employment can be terminated at the end of
the season and such termination cannot be considered an illegal
dismissal. Petitioner Starke maintains that the determination of whether
the workers are regular or seasonal employees is not dependent on the
number of hectares operated upon by them, or the number of workers,
or the capitalization involved, but rather, in the nature of the work. She
asserts that the respondents also made their services available to the
neighboring haciendas.
On the other hand, the respondents aver that the petitioners
erroneously invoke the doctrine of stare decisis since the factual
backdrop of this case and the Mercado case is not similar. The
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respondents posit that the Mercado case ruled on the status of
employment of farm laborers who work only for a definite period of
time for a farm owner, after which they offer their services to other farm
owners. Contrarily, the respondents contend that they do not work for
a definite period but throughout the whole year, and do not make their
services available to other farm owners. Moreover, the land involved in
the Mercado case is comparatively smaller than the sugar land
involved in this case. The respondents insist that the vastness of the land
involved in this case requires the workers to work on a year-round basis,
and not on an "on-and-off" basis like the farm workers in
the Mercado case.
The Court ruled in favor of the respondent employees.
For although in the Mercado case, the Supreme Court held the
petitioners who were sugar workers not to be regular but seasonal
workers, nevertheless, the same does not operate to abandon the
settled doctrine of the High Court that sugar workers are considered
regular and permanent farm workers of a sugar plantation owner, the
reason being that there are facts present that are peculiar to the
Mercado case. The disparity in facts between the Mercado case and
the instant case is best exemplified by the fact that the former 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 being comparatively small, comprising of seventeen
and a half (17½) hectares of land, such that the planting of rice and
sugar cane thereon could not possibly entail a whole year operation.
The herein case presents a different factual condition as the enormity
of the size of the sugar hacienda of petitioner, with an area of two
hundred thirty-six (236) hectares, simply do not allow for private
respondents to render work only for a definite period.
In Mercado, although respondent constantly availed herself of the
petitioners’ services from year to year, it was clear from the facts therein
that they were not in her regular employ. Petitioners therein performed
different phases of agricultural work in a given year. However, during
that period, they were free to work for other farm owners, and in fact
they did. In other words, they worked for respondent, but were
nevertheless free to contract their services with other farm owners. The
Court was thus emphatic when it ruled that petitioners were mere
project employees, who could be hired by other farm owner.
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In this case, there is no evidence on record that the same particulars
are present. 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. Although the petitioners assert that
the respondents made their services available to the
neighboring haciendas, 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
the employee in relation to the usual trade or business of the employer.
There is no doubt that the respondents were 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 employed only for the
duration of one season. While the records sufficiently show that the
respondents’ work in the hacienda was seasonal in nature, there was,
however, no proof that they were hired for the 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 stressing that the
employer has the burden of proving the lawfulness of his employee’s
dismissal.
DISPOSITION: WHEREFORE, the petition is DENIED.
29. Universal Robina Sugar Milling Corp. v. Acibo
713 SCRA 596 , January 15, 2014 – Horario
Petitioner/s : Universal Robina Sugar Milling Corp. (URSUMCO)
Respondent/s : FERDINAND ACIBO, ROBERTO AGUILAR, EDDIE BALDOZA, RENE
ABELLAR, DIOMEDES ALICOS, MIGUEL ALICOS, ROGELIO AMAHIT, LARRY
AMASCO, FELIPE BALANSAG, ROMEO BALANSAG, MANUEL BANGOT, ANDY
BANJAO, DIONISIO BENDIJO, JR., JOVENTINO BROCE, ENRICO LITERAL, RODGER
RAMIREZ, BIENVENIDO RODRIGUEZ, DIOCITO PALAGTIW, ERNIE SABLAN, RICHARD
PANCHO, RODRIGO ESTRABELA, DANNY KADUSALE and ALLYROBYL OLPUS
Employer: URSUMCO
DEAD POOL
Employee: Respondents
Issue: Seasonal Employee
DOCTRINE: Seasonal employment operates much in the same way as project
employment, albeit it involves work or service that is seasonal in nature or lasting
for the duration of the season. As with project employment, although the
seasonal employment arrangement involves work that is seasonal or periodic in
nature, the employment itself is not automatically considered seasonal so as to
prevent the employee from attaining regular status. To exclude the asserted
"seasonal" employee from those classified as regular employees, the employer
must show that: (1) the employee must be performing work or services that are
seasonal in nature; and (2) he had been employed for the duration of the
season.
FACTS
• PETITIONER Universal Robina Sugar Milling Corp. (URSUMCO) is engaged in
the sugarcane milling business. Respondents Ferdinand Acibo and 21
others were hired by the petitioner on various dates, in different capacities.
At the start of their engagements, they signed contracts of employment for
a period of one month or for a given season. URSUMCO repeatedly hired
them to perform the same duties and for every engagement required them
to sign new employment contracts for the same duration.
• Last Oct. 23, 2002, the respondents filed before the labor arbiter complaints
for regularization, entitlement to the benefits under the Collective
Bargaining Agreement (CBA) and attorney’s fees. The labor arbiter (LA)
dismissed the complaint for lack of merit.
• The National Labor Relations Commission (NLRC) reversed the LA’s ruling
and declared respondents as regular URSUMCO employees and granted
their monetary claims under the CBA. The Court of Appeals (CA) affirmed
the NLRC’s ruling finding respondents to be regular employees of URSUMCO
but deleted the grant of monetary benefits under the CBA.
ISSUE: Whether the respondents are regular employees of URSUMCO?- YES,
regular seasonal employees of URSUMCO.
RULING + RATIO:
Article 280 of the Labor Code provides for three kinds of employment
arrangements, namely: regular, project/seasonal and casual. Regular
employment refers to that arrangement whereby the employee "has been
engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer[.] Under the definition, the primary
standard that determines regular employment is the reasonable connection
between the particular activity performed by the employee and the usual
business or trade of the employer; the emphasis is on the necessity or desirability
of the employee’s activity. Thus, when the employee performs activities
considered necessary and desirable to the overall business scheme of the
employer, the law regards the employee as regular.
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By way of an exception, paragraph 2, Article 280 of the Labor Code also
considers regular a casual employment arrangement when the casual
employee’s engagement has lasted for at least one year, regardless of the
engagement’s continuity. The controlling test in this arrangement is the length
of time during which the employee is engaged.
A project employment, on the other hand, contemplates on arrangement
whereby "the employment has been fixed for a specific project or undertaking
whose completion or termination has been determined at the time of the
engagement of the employee[.]" Two requirements, therefore, clearly need to
be satisfied to remove the engagement from the presumption of regularity of
employment, namely: (1) designation of a specific project or undertaking for
which the employee is hired; and (2) clear determination of the completion or
termination of the project at the time of the employee’s engagement.22 The
services of the project employees are legally and automatically terminated
upon the end or completion of the project as the employee’s services are
coterminous with the project.
Unlike in a regular employment under Article 280 of the Labor Code, however,
the length of time of the asserted "project" employee’s engagement is not
controlling as the employment may, in fact, last for more than a year,
depending on the needs or circumstances of the project. Nevertheless, this
length of time (or the continuous rehiring of the employee even after the
cessation of the project) may serve as a badge of regular employment when
the activities performed by the purported "project" employee are necessary
and indispensable to the usual business or trade of the employer. In this latter
case, the law will regard the arrangement as regular employment.
Seasonal employment operates much in the same way as project employment,
albeit it involves work or service that is seasonal in nature or lasting for the
duration of the season. As with project employment, although the seasonal
employment arrangement involves work that is seasonal or periodic in nature,
the employment itself is not automatically considered seasonal so as to prevent
the employee from attaining regular status. To exclude the asserted "seasonal"
employee from those classified as regular employees, the employer must show
that: (1) the employee must be performing work or services that are seasonal in
nature; and (2) he had been employed for the duration of the season.26 Hence,
when the "seasonal" workers are continuously and repeatedly hired to perform
the same tasks or activities for several seasons or even after the cessation of the
season, this length of time may likewise serve as badge of regular employment.
In fact, even though denominated as "seasonal workers," if these workers are
called to work from time to time and are only temporarily laid off during the off-
season, the law does not consider them separated from the service during the
off-season period. The law simply considers these seasonal workers on leave until
re-employed.
Casual employment, the third kind of employment arrangement, refers to any
other employment arrangement that does not fall under any of the first two
categories, i.e., regular or project/seasonal.
DEAD POOL
In light of the above legal parameters laid down by the law and applicable
jurisprudence, the respondents are neither project, seasonal nor fixed-term
employees, but regular seasonal workers of URSUMCO. The following factual
considerations from the records support this conclusion:
First, the respondents were made to perform various tasks that did not at all
pertain to any specific phase of URSUMCO’s strict milling operations that would
ultimately cease upon completion of a particular phase in the milling of sugar;
rather, they were tasked to perform duties regularly and habitually needed in
URSUMCO’s operations during the milling season.
Second, the respondents were regularly and repeatedly hired to perform the
same tasks year after year. This regular and repeated hiring of the same workers
(two different sets) for two separate seasons has put in place, principally through
jurisprudence, the system of regular seasonal employment in the sugar industry
and other industries with a similar nature of operations.
Their seasonal work, however, does not detract from considering them in
regular employment since in a litany of cases, this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily
laid off during the off-season are not separated from the service in said period,
but are merely considered on leave until re-employment. Be this as it may,
regular seasonal employees, like the respondents in this case, should not be
confused with the regular employees of the sugar mill such as the administrative
or office personnel who perform their tasks for the entire year regardless of the
season.
Third, while the petitioners assert that the respondents were free to work
elsewhere during the off-season, the records do not support this assertion. There
is no evidence on record showing that after the completion of their tasks at
URSUMCO, the respondents sought and obtained employment elsewhere.
The labor agency did not declare the respondents as regular seasonal
employees, but as regular employees. This is the only conclusion that can be
drawn from the NLRC decision’s dispositive portion, thus:
WHEREFORE, premises considered, the appeal is hereby GRANTED.
Complainants are declared regular employees of respondent.1âwphi1 As such,
they are entitled to the monetary benefits granted to regular employees of
respondent company based on the CBA, reckoned three (3) years back from
the filing of the above-entitled case on 23 August 2002 up to the present or to
their entire service with respondent after the date of filing of the said complaint
if they are no longer connected with respondent company.
30. Gapayao v. Fulo
G.R. No. 193493, June 13, 2013 – Landicho
Petitioner: Gapayao (Employer)
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Respondent: Fulo (Vda of the employee)
DOCTRINES:
• Farm workers generally fall under the definition of seasonal employees. We
have consistently held that seasonal employees may be considered as
regular employees. Regular seasonal employees are those called to work
from time to time(repeated hiring every season).
• Exceptions:
a. seasonal workers who have worked for one season only may not
be considered regular employees.
b. seasonal employees are free to contract their services with other
farm owners, then the former are not regular employees.
FACTS:
- On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure
secondary to 1st degree burn 70% secondary electrocution" while doing
repairs at the residence and business establishment of petitioner located at
San Julian, Irosin, Sorsogon.
- Petitioner extended some financial assistance to private respondent and
Vda. Fulo executed an Affidavit of Desistance stating that she was not
holding them liable for the death of her late husband, Jaime Fulo, and was
thereby waiving her right and desisting from filing any criminal or civil action
against petitioner.
- On 14 January 1998, both parties executed a Compromise Agreement:
1. The undersigned employer, hereby agrees to pay the sum of
FORTY THOUSAND PESOS (₱40,000.00) to the surviving spouse of
JAIME POLO…
- Vda. Fulo filed a claim for social security benefits with SSS but was, it was
discovered that the deceased was not a registered member of the SSS.9
Consequently, the SSS demanded that petitioner remit the social security
contributions of the deceased. She filed a case before SSC for claiming
social security benefits.
- Petitioner: the deceased was not the my employee, but was rather an
independent contractor whose tasks were not subject to petitioner’s control
and supervision. Even if he’s my employee, he was still not entitled to be
paid his SSS premiums for the intervening period when he was not at work,
as he was an "intermittent worker who was only summoned every now and
then as the need arose."
- SSC:Jaime Fulo, was employed by respondent Jaime N. Gapayao.
- CA: The appellate court held that it "does not follow that a person who does
not observe normal hours of work cannot be deemed an employee." For
one, it is not essential for the employer to actually supervise the
performance of duties of the employee; it is sufficient that the former has a
right to wield the power.
ISSUE: Whether or not there exists between the deceased Jaime Fulo and
petitioner an employer-employee relationship
HELD: YES
DEAD POOL
Farm workers may be considered regular seasonal employees. (Article 280 of
the Labor Code classes of employees)
- Jurisprudence has identified the three types of employees mentioned in the
provision:
(1) regular employees or those who have been engaged to perform
activities that 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 their engagement, or those whose work or
service is seasonal in nature and is performed for the duration of the season;
and
(3) casual employees or those who are neither regular nor project
employees.55
- Farm workers generally fall under the definition of seasonal employees. We
have consistently held that seasonal employees may be considered as
regular employees. Regular seasonal employees are those called to work
from time to time. The nature of their relationship with the employer is such
that during the off season, they are temporarily laid off; but reemployed
during the summer season or when their services may be needed. They are
in regular employment because of the nature of their job, and not because
of the length of time they have worked.
- For regular employees to be considered as such, the primary standard used
is the reasonable connection between the particular activity they perform
and the usual trade or business of the employer.
- A reading of the records reveals that the deceased was indeed a farm
worker who was in the regular employ of petitioner. From year to year,
starting January 1983 up until his death, the deceased had been working
on petitioner’s land by harvesting abaca and coconut, processing copra,
and clearing weeds. His employment was continuous in the sense that it
was done for more than one harvesting season. Moreover, no amount of
reasoning could detract from the fact that these tasks were necessary or
desirable in the usual business of petitioner.
- The other tasks allegedly done by the deceased outside his usual farm work
only bolster the existence of an employer-employee relationship. As found
by the SSC, the deceased was a construction worker in the building and a
helper in the bakery, grocery, hardware, and piggery – all owned by
petitioner.63 This fact only proves that even during the off season, the
deceased was still in the employ of petitioner.
- Petitioner entered into the agreement with full knowledge that he was
described as the employer of the deceased.
- Pakyaw workers are regular employees, provided they are subject to the
control of petitioner.
- In this case, we agree with the CA that petitioner wielded control over the
deceased in the discharge of his functions. Being the owner of the farm on
which the latter worked, petitioner – on his own or through his overseer –
necessarily had the right to review the quality of work produced by his
laborers. It matters not whether the deceased conducted his work inside
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petitioner’s farm or not because petitioner retained the right to control him
in his work, and in fact exercised it through his farm manager Amado
Gacelo. The latter himself testified that petitioner had hired the deceased
as one of the pakyaw workers whose salaries were derived from the gross
proceeds of the harvest.71
- The right of an employee to be covered by the Social Security Act is
premised on the existence of an employer-employee relationship.73
DISPO:
WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed
Decision and resolution of the Court of Appeals in CA-G.R. SP. No. 101688 dated
17 March 2010 and 13 August 2010, respectively, are hereby AFFIRMED.
31. Magis Young Achievers’ Learning Center v. Manalo
G.R. No. 178835. February 13, 2009 – Laqui
Petitioner: MAGIS YOUNG ACHIEVERS’ LEARNING CENTER and MRS. VIOLETA T.
CARIÑO
Respondent: ADELAIDA P. MANALO
Employer: MAGIS YOUNG ACHIEVERS’ LEARNING CENTER
Employee: ADELAIDA P. MANALO
Labor Issue: Probationary to Permanenent Status of a Academic
Personnel
Doctrine: For academic personnel in private elementary and secondary
schools, it is only after one has satisfactorily completed the probationary period
of three (3) school years and is rehired that he acquires full tenure as a regular
or permanent employee. Accordingly, no vested right to a permanent
appointment shall accrue until the employee has completed the prerequisite
three-year period necessary for the acquisition of a permanent status. Of
course, the mere rendition of service for three consecutive years does not
automatically ripen into a permanent appointment. It is also necessary that the
employee be a full-time teacher, and that the services he rendered are
satisfactory.
FACTS:
• On April 18, 2002, 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, Adeilaida Manalo
wrote a letter of resignation addressed to Violeta T. Cariño, directress of
petitioner, stating Dear Madame: I am tendering my irrevocable
DEAD POOL
resignation effective April 1, 2003 due to personal and family reasons. I
would like to express my thanks and gratitude for the opportunity, trust and
confidence given to me as an Acting Principal in your prestigious school.
God bless and more power to you.
• On March 31, 2003, respondent received a letter of termination from
petitioner stating The Board of Trustees of the Cariño Group of Companies,
particularly that of Magis Young Achievers’ Learning Center convened,
deliberated and came up with a Board Resolution that will strictly impose
all means possible to come up with a cost- cutting scheme. Part of that
scheme is a systematic reorganization which will entail streamlining of
human resources. As agreed upon by the Board of Directors, the position
of PRINCIPAL will be abolished next school year. Therefore, we regret to
inform you that we can no longer renew your contract, which will expire on
March 31, 2003. Thus, thank you for the input you have given to Magis
during your term of office as Acting Principal. The function of the said
position shall be delegated to other staff members in the organization.
• On April 4, 2003, respondent instituted against petitioner a Complaint for
illegal dismissal.
Ruling of the Lower Court
LA: Dismissed the complaint for illegal dismissal. Complainant was not dismissed,
much less, illegally. On the contrary, she resigned.
NLRC: Reversed LA.
CA:Affirmed the NLRC decision and dismissed the petition.
Petitioner’s Contention: It countered 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 the Manual of Regulation for Private Schools, adopted by the then
Department of Education, Culture and Sports (DECS), paragraph 75 which
provides that “(75) Full-time teachers who have rendered three years of
satisfactory service shall be considered permanent.”
Respondent’s Contention: 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.
ISSUE: Whether Manalo is a regular employee?
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RULING: No, Manalo is not a regular employee. A probationary employee or
probationer is one who is on trial for an employer, during which the latter
determines whether or not he is qualified 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 efficient and productive employee. While the
employer observes the fitness, propriety and efficiency 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 qualifications
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. Indeed, the employer has the right,
or is at liberty, to choose who will be hired and who will be declined. As a
component of this right to select his employees, the employer may set or fix a
probationary period within which the latter may test and observe the conduct
of the former before hiring him permanently.
But the law regulates the exercise of this prerogative to fix the period of
probationary employment. While there is no statutory cap on the minimum term
of probation, the law sets a maximum “trial period” during which the employer
may test the fitness and efficiency of the employee.
The general rule on the maximum allowable period of probationary
employment shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement stipulating a
longer period. This limit on the term of probationary employment, however, does
not apply to all classes of occupations.
For “academic personnel” in private schools, colleges and universities,
probationary employment is governed by Section 92 of the 1992 Manual of
Regulations for Private Schools (Manual), which reads: “Section 92. Probationary
Period.—Subject in all instances to compliance with the Department and school
requirements, the probationary period for academic personnel shall not be
more than 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.”
DEAD POOL
This was supplemented by DOLE-DECS-CHED-TESDA Order No. 1 dated February
7, 1996, which provides that the probationary period for academic personnel
shall not be more than three (3) consecutive school years of satisfactory service
for those in the elementary and secondary levels. By this supplement, it is made
clear that the period of probation for academic personnel shall be counted in
terms of “school years,” and not “calendar years.” Then, Section 4.m(4)[c] of the
Manual delineates the coverage of Section 92, by defining the term “academic
personnel” to include: “(A)ll school personnel who are formally engaged in
actual teaching service or in research assignments, either on full-time or part-
time basis; as well as those who possess certain prescribed academic functions
directly supportive of teaching, such as registrars, librarians, guidance
counselors, researchers, and other similar persons. They include school officials
responsible for academic matters, and may include other school officials.”
Thus, for academic personnel in private elementary and secondary schools, it is
only after one has satisfactorily completed the probationary period of three (3)
school years and is rehired that he acquires full tenure as a regular or permanent
employee. Accordingly, no vested right to a permanent appointment shall
accrue until the employee has completed the prerequisite three-year period
necessary for the acquisition of a permanent status. Of course, the mere
rendition of service for three consecutive years does not automatically ripen into
a permanent appointment. It is also necessary that the employee be a full-time
teacher, and that the services he rendered are satisfactory.
The common practice is for the employer and the teacher to enter into a
contract, effective for one school year. At the end of the school year, the
employer has the option not to renew the contract, particularly considering the
teacher’s performance. If the contract is not renewed, the employment
relationship terminates. If the contract is renewed, usually for another school
year, the probationary employment continues. Again, at the end of that period,
the parties may opt to renew or not to renew the contract. If renewed, this
second renewal of the contract for another school year would then be the last
year—since it would be the third school year—of probationary employment. At
the end of this third year, the employer may now decide whether to extend a
permanent appointment to the employee, primarily on the basis of the
employee having met the reasonable standards of competence and efficiency
set by the employer. For the entire duration of this three-year period, the teacher
remains under probation. Upon the expiration of his contract of employment,
being simply on probation, he cannot automatically claim security of tenure
and compel the employer to renew his employment contract. It is when the
yearly contract is renewed for the third time that Section 93 of the Manual
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becomes operative, and the teacher then is entitled to regular or permanent
employment status. It is important that the contract of probationary
employment specify the period or term of its effectivity. The failure to stipulate
its precise duration could lead to the inference that the contract is binding for
the full three-year probationary period All this does not mean that academic
personnel cannot acquire permanent employment status earlier than after the
lapse of three years. The period of probation may be reduced if the employer,
convinced of the fitness and efficiency of a probationary employee, voluntarily
extends a permanent appointment even before the three-year period ends.
Conversely, if the purpose sought by the employer is neither attained nor
attainable within the said period, the law does not preclude the employer from
terminating the probationary employment on justifiable ground; or, a shorter
probationary period may be incorporated in a collective bargaining
agreement. But absent any circumstances which unmistakably show that an
abbreviated probationary period has been agreed upon, the three-year
probationary term governs.
Be that as it may, teachers on probationary employment enjoy security of
tenure.
IN THIS CASE, 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, The court 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.
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.
DISPOSITION: WHEREFORE, the petition is DENIED. The assailed Decision dated
January 31, 2007 and the Resolution dated June 29, 2007 of the Court of
Appeals are AFFIRMED. SO ORDERED.
DEAD POOL
32. St. Mary’s University v. CA
G.R. No. 157788 March, 2005 – Lucion
Employer St. Mary’s University
Employee Marcelo Donelo – Part-time teacher
Labor Issue: Whether respondent is a full-time
teacher?
Doctrine: A part-time employee does not attain permanent status no matter
how long he has served the school. And as a part-timer, his services could be
terminated by the school without being held liable for illegal dismissal.
Facts: Respondent Marcelo Donelo started teaching on a contractual basis at
St. Mary's University in 1992. In 1995, he was issued an appointment as an
Assistant Professor I. Later on, he was promoted to Assistant Professor III. He
taught until the first semester of school year 1999-2000 when the school
discontinued giving him teaching assignments. For this, respondent filed a
complaint for illegal dismissal against the university.
LA – ruled that respondent was lawfully dismissed because he had not attained
permanent or regular status pursuant to the Manual of Regulations for Private
Schools.
NLRC – reversed. It held that respondent was a full-time teacher as he did not
appear to have other remunerative employment
CA – Affirmed NLRC
Issue: WON Donelo is a full-time teacher?
Held: No.
Section 45 of the 1992 Manual of Regulations for Private Schools provides that
full-time academic personnel are those meeting all the following requirements:
a. Who possess at least the minimum academic qualifications
prescribed by the Department under this Manual for all academic
personnel;
b. Who are paid monthly or hourly, based on the regular teaching
loads as provided for in the policies, rules and standards of the
Department and the school;
c. Whose total working day of not more than eight hours a day is
devoted to the school;
d. Who have no other remunerative occupation elsewhere requiring
regular hours of work that will conflict with the working hours in the
school; and
e. Who are not teaching full-time in any other educational institution.
All teaching personnel who do not meet the foregoing qualifications are
considered part-time.
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Moreover, Section 93 of the 1992 Manual of Regulations for Private Schools,
provides that full-time teachers who have satisfactorily completed their
probationary period shall be considered regular or permanent. 6 Furthermore,
the probationary period shall not be more than six consecutive regular
semesters of satisfactory service for those in the tertiary level.
Thus, the following requisites must concur before a private school teacher
acquires permanent status: (1) the teacher is a full-time teacher; (2) the teacher
must have rendered three consecutive years of service; and (3) such service
must have been satisfactory.
In the present case, except for four non-consecutive terms,
a. respondent generally carried a load of twelve units or less from 1992 to
1999. There is also no evidence that he performed other functions for
the school when not teaching. These give the impression that he was
merely a part-time teacher.
b. Although this is not conclusive since there are full-time teachers who
are allowed by the university to take fewer load, in this case,
respondent did not show that he belonged to the latter group, even
after the university presented his teaching record.
c. With a teaching load of twelve units or less, he could not claim he
worked for the number of hours daily as prescribed by Section 45 of
the Manual. Furthermore, the records also indubitably show he was
employed elsewhere from 1993 to 1996.
Since there is no showing that respondent worked on a full-time basis for at least
three years, he could not have acquired a permanent status. A part-time
employee does not attain permanent status no matter how long he has served
the school. And as a part-timer, his services could be terminated by the school
without being held liable for illegal dismissal. Moreover, the requirement of twin-
notice applicable only to regular or permanent employees could not be
invoked by respondent.
Yet, this is not to say that part-time teachers may not have security of tenure.
The school could not lawfully terminate a part-timer before the end of the
agreed period without just cause. But once the period, semester, or term ends,
there is no obligation on the part of the school to renew the contract of
employment for the next period, semester, or term.
In this case, the contract of employment of the respondent was not presented.
However, judicial notice may be taken that contracts of employment of part-
time teachers are generally on a per semester or term basis. In the absence of
a specific agreement on the period of the contract of employment, it is
presumed to be for a term or semester.
DEAD POOL
After the end of each term or semester, the school does not have any obligation
to give teaching load to each and every part-time teacher. That petitioner did
not give any teaching assignment to the respondent during a given term or
semester, even if factually true, did not amount to an actionable violation of
respondent's rights. It did not amount to illegal dismissal of the part-time teacher.
Disposition: WHEREFORE, the petition is GRANTED. NLRC decision is nullified and
set aside. Decision of the La is hereby REINSTATED.
33. MERCADO vs AMA COMPUTER COLLEGE-PARANAQUE
GR No. 183572; April 13, 2010 -Miguel
Petitioner: Yolanda M. Mercado, Charito S. de Leon, Diana R. Lachica,
Margarito M. Alba, and Felix A. Tonog
Respondents: AMA Computer College-Paranaque City
AMA Computer College-Paranaque City
Employer
Yolanda M. Mercado, Charito S. de Leon, Diana R.
Employee/Union Lachica, Margarito M. Alba, and Felix A. Tonog
Labor Issue Classes of employees
DOCTRINE: special rules in Sec. 92 of the Manual supplements the
provisions of the Labor Code with respect to the period of probation
FACTS:
• The petitioners were all former faculty members of AMA
Computer College Paranaque. They started teaching on May
25, 1998. Upon employment, they individually executed
Teacher’s Contracts for each of the trimesters they were
engaged to teach, with the common stipulation that they
agreed to accept a non-tenured appointment to work for
the duration of the last term that they were given a teaching
load.
• For the school year 2000-2001, AMACC implemented new
screening guidelines (see notes), which, among others, set
performance standards to be used to determine the present
faculty members’ entitlement to salary increases. As it
happened, the petitioners failed to obtain a passing rating
based on the performance standards; resultantly, they were
not given any salary increase. The petitioners then filed a
complaint for underpayment of wages, non-payment of
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overtime and overload compensation, 13 month pay, and
th
for discriminatory practices.
• Subsequently, on September 7, 2000, the petitioners received
a memorandum from AMACC informing them of the
expiration and non-renewal of their contract to teach,
effective 30 days from receipt of the notice. The petitioners
amended their complaint to include the charge of illegal
dismissal.
• In their defense, the respondents contended that the non-
renewal of contract was due to the failure of the petitioners to
pass the Performance Appraisal System for Teachers, while
others failed to comply with the other requirements for
regularization, promotion, or increase in salary. Further, the
petitioners worked under a contracted term under a non-
tenured appointment and were still within the three-year
probationary period for teachers.
RULING OF THE LOWER COURTS:
LA: ruled that the petitioners were illegally dismissed, and ordered
for their reinstatement plus full backwages, attorney’s fees and 13
month pay. In so ruling, the LA stated that the provisions of Article 281
on probationary employment applied in this case (see notes), and that
AMACC did not specify who among the petitioners failed to pass the
PAST and who among them did not comply with the other requirements
of regularization, promotions or increase in salary.
NLRC: affirmed the decision of the LA, on the ground that the petitioners
were terminated on the basis of standards that were only introduced
near the end of their probationary period. It stated that the new
screening guidelines cannot be imposed on the petitioners and their
employment contracts because the same were not imposed when
they were first employed in 1998. Due process requires that employees
should be informed beforehand of 1) the conditions of their
employment and 2) the basis for their advancement. Such imposition
of the new guidelines violates Sec. 6 (d) of Rule 1, Book VI of the
Implementing Rules of the Labor Code (see notes). However, the NLRC
also stated that the applicable law is Section 92 of the Manual of
Regulations for Private Schools (see notes) and not Article 281 of the
Labor Code.
CA: reversed the rulings of the LA and NLRC, and dismissed the
complaint for illegal dismissal for the following reasons:
DEAD POOL
1. Since the petitioners have only taught for 2 years and 3
months (see notes) when AMACC decided not to renew their
contracts, their employment was still within the probationary
period. As such, they were not actually dismissed, as their
contracts merely expired. The non-renewal of their contracts
was based on their failure to satisfy the school’s standards for
the school year 2000-2001 that measured their fitness and
aptitude to teach as regular faculty members, which the CA
found to be reasonable basis.
2. The AMACC has the inherent right to upgrade the quality of
its education; part of this is the implementation of continuing
evaluation and screening of its faculty members for
academic excellence. As such, the new guidelines for 2000-
2001 could be imposed on the petitioners and their
employment contracts.
3. The non-renewal of their teaching contracts is sanctioned by
the doctrine laid down by Brent School, Inc. v. Zamora, where the
Court recognized the validity of contracts providing for fixed-period
employment.
th
PETITIONER’s CONTENTION: their employment was based on standards not
made known to them at the time of their engagement
RESPONDENT’s CONTENTION: asserts that the petitioners were informed at
the time of their engagement that they must comply with the
regularization policies of the school, i.e., that they must obtain a passing
rating on the Performance Appraisal for Teachers (PAST) which is the
primary instrument used to measure the performance of faculty
members
ISSUE:
1. Whether the applicable law on employment on probationary
status in this case is Article 281 of the Labor Code or Section
92 of the Manual of Regulations for Private Schools.
2. Is the use of fixed-period employment during the teachers’
probationary period valid?
3. May the teachers’ probationary status be disregarded when
the contracts are fixed-term, as in this case?
4. Was the termination of the teachers, as probationary
employees, legal?
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of the period and automatically ends upon the expiration of such. In

RULING:
1. Both the provisions of Article 281 of the Labor Code and
Section 92 of the Manual of Regulations for Private Schools
are applicable in this case; however, the special rules in Sec.
92 of the Manual supplements the provisions of the Labor
Code with respect to the period of probation (see provision
on probation period—notes) . Other than the period, the
provisions of Article 281 with respect to the grounds for the
termination of a probationary employee still applies (PLEASE
SEE ART. 281-- NOTES)
2. Yes.
probationary employment, though it also refers to a period (max: 6
mos), its overriding character is the process of testing and observing the
abilities of a person under probation (see notes). As a protection to
labor, in probationary employment, the probationary period could last
for a specific maximum period and under reasonable, well-laid and
properly communicated standards. As such, any move on the part of
the employer must conform to the probationary rules.
In this case, the AMACC’s system of fixed-term contract is a system that
operates during the probationary period, and as such is subject to
Article 281 of the Labor Code. The Court concluded that since the
fixed-term contract was not specifically used for the fixed terms it offers
(see notes), Article 281 assumes primacy and the fixed-period
character of the contract must give way.

First, the Court held that this is an accepted practice in the teaching 4. No.
profession, as mentioned in the case of Magis Young Achievers’
Learning Center v. Manalo (see notes), provided that the contract of
As held by the Court, the available grounds to terminate employment of a
probationary employment specify the period or term of its effectivity,
teacher on probationary status are as follows: a) just cause provided
otherwise it could lead to the inference that the contract is binding
under Art. 282 of the Labor Code, b)authorized cause provided under
for the full three-year probationary period.
Art. 283 of the Labor Code, and c) failure of the employee to meet
the required reasonable standards set by the employer at the time of
Second, AMACC’s Constitutional right to academic freedom gives it the right the engagement of the employee. As to the third ground, such
to choose who should teach in its school, as well as the autonomy to standards must be 1) reasonable and 2)communicated to the
decide for itself the terms and conditions for hiring its teacher for as long teachers at the start of their probationary period, or at the very least,
as the standards fixed are reasonable and not arbitrary, in order to at the start of the semester/trimester during which the standards are
achieve and maintain academic excellence. to be applied. In other words, during the probationary period, the
teachers must know the company standards that they have to meet,
Third, the right to hiring is also a management prerogative. Thus AMACC had and they should be judged on the basis of these standards
the right to determine for itself that it shall use fixed-term employment communicated to them. In invoking a failure to meet the required
contracts as its medium for hiring its teachers. The Court held that it also standards, the school should show how these standards have been
acted within the terms of the Manual of Regulations for Private Schools applied. Such details of the finding of just cause must be
when it recognized the petitioners to be merely on probationary status communicated to the teachers as a matter of due process (see
up to a maximum of nine trimesters. notes). These are the rules that the employer must follow with regards
to the termination of employees under probationary status.
3. No.
In this issue, the Court made a discussion on the nature of fixed-term In this case, though it was undisputed that the petitioners were on
employment vis-à-vis probationary employment: probationary status (not permanent or regular status) from the time of
their employment up to the expiration of their contract, the evidence
In fixed-term employment, the character of the employment is the period is unclear on the exact terms of the academic standards set by
agreed upon by the E-E, where the employment lasts for the duration AMACC. Though the standards were duly communicated to the

53
 LABOR REVIEW: Classed of Employees (August 28, 2019)
petitioners and applicable beginning 2000-2001, the exact terms of
the standards were never introduced as evidence, nor does the
evidence show how the standards were applied to the petitioners
(see notes). Effectively, the termination of employment of the
petitioners lacks the supporting finding of just cause that the law
requires and is hence, illegal.
ADJUDICATION:
WHEREFORE, premises considered, we hereby GRANT the
petition, and, consequently, REVERSE and SET ASIDE the Decision of the
Court of Appeals dated November 29, 2007 and its Resolution dated
June 20, 2008 in CA-G.R. SP No. 96599. The Labor Arbiter’s decision of
March 15, 2002, subsequently affirmed as to the results by the National
Labor Relations Commission, stands and should be enforced with
appropriate re-computation to take into account the date of the
finality of this Decision.
In lieu of reinstatement, AMA Computer College-Parañaque
City, Inc. is hereby DIRECTED to pay separation pay computed on a “Section 92. Probationary Period. – Subject in all instances to
trimestral basis from the time of separation from service up to the end
of the complete trimester preceding the finality of this Decision. For
greater certainty, the petitioners are entitled to:
(a) backwages and 13 month pay computed from
th
September 7, 2000 (the date AMA Computer College-
Parañaque City, Inc. illegally dismissed the petitioners) up to
the finality of this Decision;
(b) monthly honoraria (if applicable) computed
from September 7, 2000 (the time of separation from service)
up to the finality of this Decision; and
(c) separation pay on a trimestral basis from September 7, 2000 (the
time of separation from service) up to the end of the
complete trimester preceding the finality of this Decision.
Art. 281 of the Labor Code, which mandates a period of 6 months as the
The labor arbiter is hereby ORDERED to make another re-
computation according to the above directives. No costs.
SO ORDERED. “x x x The services of an employee who has been engaged on a
NOTES:
DEAD POOL
1. Under the new screening guidelines, teachers were to be
hired or maintained based on extensive teaching
experience, capability, potential, high academic
qualifications and research background.
2. With regards to the claims for salary increases, the LA denied
such as it did not find any discrimination in the adjustments for the
salary rate of the faculty members based on the performance and
other qualification which is an exercise of management prerogative.
3. Rule I, Book VI of the Implementing Rules of the Labor Code
provides that “in all cases of probationary employment, the employer
shall make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement.”
4. Sec. 92 of the Manual of Regulations for Private Schools
mandates a probationary period of nine consecutive trimesters of
satisfactory service for academic personnel in the tertiary level where
collegiate courses are offered on a trimester basis:
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more
than 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. [Emphasis
supplied]”
contrasted to
maximum duration of the probationary period, unless otherwise
stipulated:
probationary basis may be terminated for a just cause when
he fails to qualify as a regular employee in accordance
with reasonable standards made known by the employer to
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LABOR REVIEW: Classed of Employees (August 28, 2019)
the employee at the time of his engagement. An employee
who is allowed to work after a probationary period shall be
considered a regular employee.[Emphasis supplied]”
5. Under the Manual of Regulations for Private Schools, to
acquire permanent status, a teaching personnel in a private institution
must be:
1. A full time teacher
2. Has rendered three consecutive years of service
3. Has rendered satisfactory service during such period
6. In this case, the Court noted that though the teacher is under
probation for three years, it is common practice for the employer and
the teacher to enter into a contract which is effective only for one
year (fixed-term). At the end of every school year, the employer
evaluates the teacher based on the reasonable standards of
competence and efficiency set by the employer and decides on
whether or not to renew the contract for another year. If the contract
is renewed, the probationary status of the teacher continues for
another year. If not, the employment is terminated. It is only at the
end of the third school year (assuming that the teacher’s contract
was renewed for the third consecutive year) when the employer
decides whether to extend permanent appointment to the teacher,
as the maximum period of probation has already ended, and Sec. 93
of the Manual becomes operative (here the teacher is then entitled
to regular or permanent employment status). Prior to the expiration of
the contract of employment and before the end of the three-year
period, the teacher cannot automatically claim security of tenure
and compel the renewal of his contract as he remains on probation
for the entire three-year period, and he is not yet entitled to
permanent employment status.
7. Probation is defined as “the action of subjecting an individual
to a period of testing and trial so as to be able to ascertain the
individual’s fitness or lack of fitness for something (as a particular job,
membership in a particular organization, retention of a particular
academic classification, enrollment in a particular school) or the
condition of being subjected to such testing and trial or the period
during which an individual is subjected to such testing and trial.
Webster’s Third International Dictionary of the English Language,
Merriam-Webster Inc., 1993 ed.; see also supra note 38.
DEAD POOL
8. An example of a fixed-term contract specifically used for the
fixed term it offers, is when a replacement teacher is contracted for a
period of one year to temporarily take the place of a permanent
teacher on a one-year study leave. The expiration of the replacement
teacher’s contracted term, under the circumstances, leads to no
probationary status implications as she was never employed on
probationary basis; her employment is for a specific purpose with
particular focus on the term and with every intent to end her teaching
relationship with the school upon expiration of this term.
9. This is effectively the second notice in a dismissal situation that
the law requires as a due process guarantee supporting the security of
tenure provision, and is in furtherance, too, of the basic rule in
employee dismissal that the employer carries the burden of justifying a
dismissal. These rules ensure compliance with the limited security of
tenure guarantee the law extends to probationary employees.
10. The petitioners demanded for a copy of their performance
ratings in the PAST for the first, second and third trimesters of the school
year 1999-2000. However, the evidence shows that AMACC did not
present any copy of the petitioners’ performance ratings in the PAST for
the three consecutive trimesters of the school year 1999-2000 as well as
the first trimester for the school year 2000-2001. AMACC also failed to
present the petitioners’ individual evaluation reports and other related
documents to support its claim that they failed to pass the PAST and
other requirements for regularization.
34. Colegio del Santisimo Rosario v. Rojo
• G.R. No. 170388. September 4, 2013- Montellano
•
• Petitioner: COLEGIO DEL SANTISIMO ROSARlO and SR. ZENAIDA S.
MOFADA, OP
• Respondents: EMMANUEL ROJO,
Employer Colegio del Santisimo Rosario (CSR)
Employee/Union
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LABOR REVIEW: Classed of Employees (August 28, 2019)
Labor Issue
• •
• DOCTRINE:
• Cases dealing with employment on probationary status of teaching
personnel are not governed solely by the Labor Code as the law is
supplemented, with respect to the period of probation, by special
rules found in the Manual of Regulations for Private Schools (the
Manual)
• Under the Manual, Full-time teachers become regular or permanent
employees once they have satisfactorily completed the probationary
period of three school years
• consecutive years as a probationanary employee automatically
• FACTS:
• Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a
high school teacher on probationary basis for the school years 1992-
1993, 1993-19947 and 1994-1995.
• CSR, through petitioner Sr. Zenaida S. Mofada, OP (Mofada), decided
not to renew respondent’s services.
• Thus, on July 13, 1995, respondent filed a Complaint for illegal dismissal.
He alleged that since he had served three consecutive school years
which is the maximum number of terms allowed for probationary
employment, he should be extended permanent employment. Citing
paragraph 75 of the 1970 Manual of Regulations for Private Schools
(1970 Manual), respondent asserted that “full-time teachers who have
rendered three (3) consecutive years of satisfactory services shall be
considered permanent.
• On the other hand, petitioners argued that respondent knew that his
Teacher’s Contract for school year 1994-1995 with CSR would expire
on March 31, 1995. Accordingly, respondent was not dismissed but his
probationary contract merely expired and was not renewed.
Petitioners also claimed that the “three years” mentioned in
paragraph 75 of the 1970 Manual refer to “36 months,” not three
school years. And since respondent served for only three school years
of 10 months each or 30 months, then he had not yet served the “three
years” or 36 months mentioned in paragraph 75 of the 1970 Manual.
• RULING OF THE LOWER COURTS:
• LA: Labor Arbiter (LA) ruled that “three school years” means three
years of 10 months, not 12 months. Considering that respondent had
already served for three consecutive school years, then he has already
attained regular employment status. Thus, the non-renewal of his
contract for school year 1995-1996 constitutes illegal dismissal. LA also
found petitioners guilty of bad faith.
• NLRC: affirmed. Respondent had attained regular employment
especially because CSR did not make known to respondent the
DEAD POOL
reasonable standards he should meet.
CA: affirmed. Respondent a regular employee
Petitioner’s contention: upon the expiration of the probationary period,
both the school and the respondent were free to renew the contract
or let it lapse. Petitioners insist that a teacher hired for three
consecutive years as a probationary employee does not
automatically become a regular employee upon completion of his
third year of probation. It is the positive act of the school — the hiring
of the teacher who has just completed three consecutive years of
employment on probation for the next school year — that makes the
teacher a regular employee of the school.
• Respondent;s contention: that they are permanent employees
• ISSUE: Whether or not a basic education teacher hired for 3
and/or by law becomes a permanent employee upon completion of
his third year of probation?
•
• RULING: Yes
• Cases dealing with employment on probationary status of teaching
personnel are not governed solely by the Labor Code as the law is
supplemented, with respect to the period of probation, by special rules
found in the Manual of Regulations for Private Schools (the Manual).
With regard to the probationary period, Section 92 of the 1992 Manual
provides:
• Section 92. Probationary Period.—Subject in all instances to
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than
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.
• In this case, petitioners’ teachers who were on probationary
employment were made to enter into a contract effective for one
school year. Thereafter, it may be renewed for another school year,
and the probationary employment continues. At the end of the
second fixed period of probationary employment, the contract may
again be renewed for the last time. Such employment for fixed terms
during the teachers’ probationary period is an accepted practice in
the teaching profession.
• However, this scheme “of fixed-term contract is a system that operates
during the probationary period and for this reason is subject to Article
281 of the Labor Code,”35 which provides:
• x x x The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he fails
to qualify as a regular employee in accordance with reasonable
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LABOR REVIEW: Classed of Employees (August 28, 2019)
standards made known by the employer to the employee at the time
of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
[Emphasis supplied]
• In Mercado, we held that “[u]nless this reconciliation is made, the
requirements of [Article 281] on probationary status would be fully
negated as the school may freely choose not to renew contracts
simply because their terms have expired.”36 This will have an unsettling
effect in the equilibrium vis-a-vis the relations between labor and
management that the Constitution and Labor Code have worked
hard to establish.
• That teachers on probationary employment also enjoy the protection
afforded by Article 281 of the Labor Code is supported by Section 93
of the 1992 Manual which provides:
• Sec. 93. Regular or Permanent Status.—Those who have served the
probationary period shall be made regular or permanent. Full-time
teachers who have satisfactorily completed their probationary period
• The above provision clearly provides that full-time teachers become
regular or permanent employees once they have satisfactorily
completed the probationary period of three school years. The use of
the term satisfactorily necessarily connotes the requirement for schools
to set reasonable standards to be followed by teachers on
probationary employment. For how else can one determine if
probationary teachers have satisfactorily completed the probationary
period if standards therefor are not provided?
• As such, “no vested right to a permanent appointment shall accrue
until the employee has completed the prerequisite three-year period
necessary for the acquisition of a permanent status. [However, it must
be emphasized that] mere rendition of service for three consecutive
years does not automatically ripen into a permanent appointment. It
is also necessary that the employee be a full-time teacher, and that
the services he rendered are satisfactory.
• The provision on employment on probationary status under the Labor
Code is a primary example of the fine balancing of interests between
labor and management that.
• It affords management to adopt own but reasonable standards. These
standards, together with the just and authorized causes for termination
of employment [which] the Labor Code expressly provides, are the
grounds available to terminate the employment of a teacher on
probationary status. x x x
• Labor, for its part, is given the protection during the probationary
period of knowing the company standards the new hires have to meet
during the probationary period, and to be judged on the basis of these
standards, aside from the usual standards applicable to employees
after they achieve permanent status. Under the terms of the Labor
Code, these standards should be made known to the teachers on
probationary status at the start of their probationary period, or at the
DEAD POOL
very least under the circumstances of the present case, at the start of
the semester or the trimester during which the probationary standards
are to be applied.
• Of critical importance in invoking a failure to meet the probationary
standards, is that the school should show — as a matter of due pro cess
— how these standards have been applied.
• When fixed-term employment is brought into play under the above
probationary period rules, the situation — as in the present case — may
at first blush look muddled as fixed-term employment is in itself a valid
employment mode under Philippine law and jurisprudence. The
conflict, however, is more apparent than real when the respective
nature of fixed-term employment and of employment on probationary
status are closely examined.
• The fixed-term character of employment essentially refers to the period
agreed upon between the employer and the employee; employment
exists only for the duration of the term and ends on its own when the
term expires. In a sense, employment on probationary status also refers
to a period because of the technical meaning “probation” carries in
Philippine labor law – a maximum period of six months, or in the
academe, a period of three years for those engaged in teaching jobs.
Their similarity ends there, however, because of the overriding
meaning that being “on probation” connotes, i.e., a process of testing
and observing the character or abilities of a person who is new to a
role or job.
• Understood in the above sense, the essentially protective character of
probationary status for management can readily be appreciated. But
this same protective character gives rise to the countervailing but
equally protective rule that the probationary period can only last for a
specific maximum period and under reasonable, well-laid and
properly communicated standards. Otherwise stated, within the
period of the probation, any employer move based on the
probationary standards and affecting the continuity of the
employment must strictly conform to the probationary rules.
• For teachers on probationary employment, in which case a fixed term
contract is not specifically used for the fixed term it offers, it is
incumbent upon the school to have not only set reasonable standards
to be followed by said teachers in determining qualification for regular
employment, the same must have also been communicated to the
teachers at the start of the proba tionary period, or at the very least, at
the start of the period when they were to be applied. These terms, in
addition to those expressly provided by the Labor Code, would serve
as the just cause for the termination of the probationary contract. The
specific details of this finding of just cause must be communicated to
the affected teachers as a matter of due process.42 Corollarily, should
the teachers not have been apprised of such reasonable standards at
the time specified above, they shall be deemed regular employees.
•
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LABOR REVIEW: Classed of Employees (August 28, 2019)
• DISPOSITION: WHEREFORE, the Petition is hereby DENIED. The August 31,
2005 Decision and the November 10, 2005 Resolution of the Court of
Appeals in CA-G.R. SP No. 85188 are AFFIRMED. The status quo order or
this Court is LIFTED.
• SO ORDERED.
35. Son v. University of Sto. Tomas -Nitro
Petitioner: RAYMOND A. SON, RAYMOND S. ANTIOLA
Respondents: UNIVERSITY OF SANTO TOMAS, FR. ROLANDO DELA ROSA, DR.
CLARITA CARILLO, DR. CYTHIA LOZA, FR. EDGARDO ALAURIN, and the COLLEGE
OF FINE ARTS AND DESIGN FACULTY COUNCIL,
Employer University of Santo Tomas
Employee/Union Raymond A. Son
Labor Issue Probationary Status
DOCTRINE: The requirement of a masteral degree for tertiary education teachers
is not unreasonable. The operation of educational institutions involves public
interest. The government has a right to ensure that only qualified persons, in
possession of sufficient academic knowledge and teaching skills, are allowed
to teach in such institutions. Government regulation in this field of human activity
is desirable for protecting, not only the students, but the public as well from ill
prepared teachers, who are lacking in the required scientific or technical
knowledge. They may be required to take an examination or to possess
postgraduate degrees as prerequisite to employment.
FACTS:
• Respondent UST is an educational institution operating under the authority
of the Commission on Higher Education (CHED). The rest of the respondents
are impleaded as officers and administrators of the school.
• Petitioners Son and Anitola were hired in June 2005, while Pollarco was
employed earlier or in June 2004. These petitioners were faculty members
with probationary status until all the requirements provided under UST rules
including the possession of a graduate degree before the expiration of the
probationary period which is within 5 semesters from the date of hiring.
• The requirement of having a graduate degree for an undergraduate
teaching load has been imposed upon faculty members since 1992 in the
manual for private schools under DECS (Department of Education, Culture
and Sports), and CHED’s 2008 Memorandum Order 04-08.
DEAD POOL
• The petitioners were hired by UST without the said requirement in the
condition that they will finish their master’s degree, but petitioners failed so.
Yet, they continued to teach beyond their probationary period.
• In 2010, CHED released a memorandum addressing the minimum
requirement of a graduate degree for faculty members and the same was
sent as a memorandum by UST to its faculty members ceasing to re-appoint
those who have not met such requirement but if they are already due for
their thesis or defense may write an appeal for consideration. On June 11,
2010, they received a thank you and termination letter signed by the dean
of their college for the reason that they have not finished their graduate
degree.
RULING OF THE LOWER COURTS:
LA: finding for petitioners and declaring respondents guilty of illegal dismissal
and unfair labor Practice, as well as malice and bad faith in illegally dismissing
the former. The Labor Arbiter upheld the CBA provision granting tenure by default
to petitioners, and declared that petitioners were not accorded due process
prior to dismissal.
NLRC: the NLRC issued its Decision dismissing the appeal for lack of merit and
affirming the Labor Arbiter's Decision
CA Ruling: Overturned the ruling of the NLRC
PETITIONER’s CONTENTION: that since they have already acquired tenure by
default pursuant to the tenure provision in the CBA, they could not be dismissed
for failure to complete their respective Master's degrees; that the UST-UST Faculty
Union CBA is the law between the parties, and its provisions should be observed;
that in spite of the CBA provision on tenure, respondents illegally terminated their
employment; that they were illegally terminated for their refusal to send the
prescribed appeal letter, which is tantamount to an undue waiver and unlawful
surrender of their tenurial rights, and is against the law and public policy; that in
terminating their employment, respondents did not comply with the required
"twin-notice rule"; that respondents are guilty of bad faith and unfair labor
practice on account of their violation of the CBA; that respondents are guilty of
bad faith when they re-hired the other professors even when they did not
possess the required Master's degree, while they (petitioners) were discriminated
against and terminated from work just because they did not file the prescribed
appeal letter
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LABOR REVIEW: Classed of Employees (August 28, 2019)
RESPONDENT’s CONTENTION: the CBA provision adverted to is not an economic
provision; that the implementation of Memorandum Order No. 40-08 takes legal
precedence over the parties' CBA; that the CBA provision granting tenure by
default may no longer be enforced on account of the requirement under
Memorandum Order No. 40-08, an administrative regulation that is equivalent
to law and has the effect of abrogating the tenure provision of the CBA; that
Memorandum Order No. 40-08 is a police power measure for the protection and
promotion of quality education, and as such, the CBA should yield to the same
and to the broader interests of the State
ISSUE: Whether or not Son and Antinola already acquired Tenureship - NO.
RULING:
In the instant case, there is no doubt that private respondents failed to meet the
standards for regular employment provided under Memorandum Order No. 040-
08 issued by CHED. The termination of their contract was based on their failure
to obtain (a) master's degree and cannot, therefore, be regarded as illegal. In
fact, the services of an employee hired on probationary basis may be
terminated when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the
time of his engagement. There is nothing that would hinder the employer from
extending a regular or permanent appointment to an employee once the
employer finds that the employee is qualified for a regular employment even
before the expiration of the probationary period. Conversely, if the purpose
sought by the employer is neither attained nor attainable within the said period,
the law does not preclude the employer from terminating the probationary
employment on justifiable ground. Here, no vested right to tenureship had yet
accrued in private respondents' favor since they had not complied, during their
probation, with the prerequisites necessary for the acquisition of permanent
status. It must be stressed that herein private respondents were given more than
ample opportunities to obtain their respective master's degree since their first
appointment in 2004 or 2005 as a prerequisite to tenure status. But they did not
take advantage of such opportunities. Justice, fairness, and due process
demand that an employer should not be penalized for situations where it had
little or no participation or control.
In addition, the Petitioner University as an educational institution enjoys
academic freedom - a guarantee that enjoys protection from the Constitution.
Section 5(2), Article XIV of the 1987 Constitution guarantees all institutions of
higher learning academic freedom. This institutional academic freedom
includes the right of the school or college to decide for itself, its aims and
objectives, and how best to attain them free from outside coercion or
interference save possibly when the overriding public welfare calls for some
restraint. Indeed, the Constitution allows merely the State's regulation and
supervision of educational institutions, and not the deprivation of their rights
DEAD POOL
The requirement of a masteral degree for tertiary education teachers is not
unreasonable. The operation of educational institutions involves public interest.
The government has a right to ensure that only qualified persons, in possession
of sufficient academic knowledge and teaching skills, are allowed to teach in
such institutions. Government regulation in this field of human activity is desirable
for protecting, not only the students, but the public as well from ill prepared
teachers, who are lacking in the required scientific or technical knowledge. They
may be required to take an examination or to possess postgraduate degrees as
prerequisite to employment.
DISPOSITION: WHEREFORE, the Petition is DENIED. The September 27, 2013
Decision and January 29, 2014 Resolution of the Court of Appeals (CA) in
CAG.R. SP No. 128666 are AFFIRMED in toto. .
36. Sagun v. ANZ Global Services and Operations (Manila), Inc.
G.R. No. 220399, August 22, 2016 – Ruelo
Petitioner: ENRIQUE Y. SAGUN
Respondent: ANZ GLOBAL SEVICES AND OPERATIONS (MANILA), INC., GAY
CRUZADA, and PAULA ALCARAZ
Employer: ANZ GLOBAL SEVICES AND OPERATIONS (MANILA), INC.
Employee: ENRIQUE Y. SAGUN
Labor Issue: Employer-employee relationship
Doctrine: An employment contract, like any other contract, is perfected at the
moment the parties come to agree upon its terms and conditions, and
thereafter, concur in the essential elements thereof. In this relation, the
contracting parties may establish such stipulations, clauses, terms, and
conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order or public policy.
FACTS:
• Petitioner was employed at HSBC-EDPI when he applied online for the
position of Payments and Cash Processing Lead at respondent ANZ, a
domestic corporation whose businesses involve a full range of banking
products and services. Accordingly, on June 11, 2011, petitioner tendered
his resignation at HSBC-EDPI and the acknowledged copy thereof was
transmitted to ANZ together with his other pre-employment documentary
requirements. However, on July 11, 2011, petitioner was instructed to report
to ANZ and was handed a letter of retraction signed by ANZ's Human
Resources Business Partner, Paula Alcaraz (Alcaraz), informing him that the
job offer had been withdrawn on the ground that the company found
material inconsistencies in his declared information and documents
provided after conducting a background check with his previous
employer, particularly at Siemens.
59
LABOR REVIEW: Classed of Employees (August 28, 2019) DEAD POOL

• Asserting that his employment contract had already been perfected upon
his acceptance of the offer on June 8, 2011, and as such, was already
deemed an employee of ANZ who can only be dismissed for cause,
petitioner filed a complaint for illegal dismissal with money claims against
ANZ.
RULING OF THE LOWER COURT
LA: The Labor Arbiter (LA) dismissed the complaint, holding that there was no
perfected employment contract between petitioner and respondents since
there was a valid cause for the withdrawal of the offer that was made prior to
the commencement of petitioner's service with the company. The LA held that
the material misrepresentation committed by petitioner was a reasonable
ground to withdraw the employment offer and as such, no employer-employee
relationship was created between them.
NLRC: The NLRC affirmed the findings of the LA, ruling that no employer-
employee relationship existed between petitioner and respondents. It held that
petitioner's employment with ANZ never took effect since its effectivity was
dependent on his reporting for work on or before July 11, 2011, which he
admittedly failed to comply. The NLRC added that the withdrawal of job offer
was valid and reasonable, there being substantial evidence to show that
petitioner committed misrepresentations in his job application
does not happen, the obligation does not come into effect. Thus, until and
unless petitioner complied with the satisfactory background check, there exists
no obligation on the part of ANZ to recognize and fully accord him the rights
under the employment contract. In fact, records also show that petitioner failed
to report for work on or before July 11, 2011, which was also a suspensive
condition mandated under sub-paragraph 4 of Schedule 1 of the contract.
Consequently, no employer-employee relationship was said to have been
created between petitioner and ANZ under the circumstances, and the
dismissal of the farmer's complaint for illegal termination from work, as held by
the NLRC, was correctly sustained by the CA.
DISPOSITION:
WHEREFORE, the petition is DENIED. The Decision dated May 25, 2015 and the
Resolution dated August 27, 2015 of the Court of Appeals in CA-G.R. SP No.
127777 are hereby AFFIRMED. SO ORDERED.

PETITIONER’S CONTENTION: Petitioner asserts that his employment contract had

already been perfected upon his acceptance of the offer on June 8, 2011, and
as such, was already deemed an employee of ANZ who can only be dismissed
for cause.
RESPONDENT’S CONTENTION: Respondents countered that the NLRC had no
jurisdiction over the complaint as they have no employer-employee relationship
with petitioner. They contended that their offer was conditional and the
effectivity of petitioner's employment contract was subject to a term or period.
They claimed that petitioner made material misrepresentations in his job
application and interview that prompted them to withdraw the offer.

ISSUE: WON an employer-employee relationship exists between petitioner and

respondent - NO

RATIO:
Here, the subject employment contract required a satisfactory completion of
petitioner's background check before he may be deemed an employee of
ANZ. Considering, however, that petitioner failed to explain the discrepancies in
his declared information and documents that were required from him relative
to his work experience at Siemens, namely: (a) that he was only a Level 1 and
not a Level 2 Technical Support Representative that conducts troubleshooting
for both computer hardware and software problems; and (b) that he was found
to have been terminated for cause and not merely resigned from his post, that
rendered his background check unsatisfactory, ANZ's obligations as a would-be
employer were held in suspense and thus, had yet to acquire any obligatory
force. To reiterate, in a contract with a suspensive condition, if the condition

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