Moises De Leon v. NLRC and La Tondeña (G.R.

No. 70705)
Facts:

Petitioner De Leon was employed by respondent company La Tondeña as maintenance man whose work
consisted mainly of painting company building and equipment, and other odd jobs relating to
maintenance. After having worked for respondent for more than a year, petitioner requested that he be
included in the payroll of regular employees, to which the former responded by dismissing petitioner from
his employment. Petitioner having been refused reinstatement filed a complaint before the Labor Arbiter.
Petitioner asserts that he is a regular employee performing similar functions as of a regular maintenance
and was rehired by respondent company’s labor agency to perform the same tasks. Respondent
company meanwhile claims petitioner was a casual worker hired only to paint a certain building in the
premises and that his work as painter terminated upon completion of the job. The Labor Arbiter ruled in
favor of petitioner but was reversed on appeal by the NLRC tribunal.

Issue:

Whether or not petitioner De Leon is a regular employee of respondent.

Ruling: YES.

The primary standard, therefore, of determining a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of the
employer. The test is whether the former is usually necessary or desirable in the usual business or trade
of the employer.

It is not tenable to argue that the painting and maintenance work of petitioner are not necessary in
respondent’s business of manufacturing liquors and wines, just as it cannot be said that only those who
are directly involved in the process of producing wines and liquors may be considered as necessary
employees. Otherwise, there would have been no need for the regular Maintenance Section of
respondent company’s Engineering Department, manned by regular employees whom petitioner often
worked with.

The law demands that the nature and entirety of the activities performed by the employee be considered.
In the case of petitioner, the painting and maintenance work given him manifest a treatment consistent
with a maintenance man and not just a painter, for if his job was truly only to paint a building there would
have been no basis for giving him other work assignments in between painting activities.

Furthermore, the petitioner performed his work of painting and maintenance activities during his
employment in respondent’s business which lasted for more than one year. Certainly, by this fact alone
he is entitled by law to be considered a regular employee. And considering further that weeks after his
dismissal, petitioner was rehired by the company through a labor agency and was returned to his post in
the Maintenance Section and made to perform the same activities that he used to do, it cannot be denied
that as activities as a regular painter and maintenance man still exist.
Magsalin v. National Organization of Working Men

Facts:

Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent workers as sales
route helpers for a limited period of five months. After five months, respondent workers were
employed by petitioner company on a day-to-day basis. According to petitioner company, respondent
workers were hired to substitute for regular sales route helpers whenever the latter would be
unavailable or when there would be an unexpected shortage of manpower in any of its work places or
an unusually high volume of work. The practice was for the workers to wait every morning outside the
gates of the sales office of petitioner company. If thus hired, the workers would then be paid their
wages at the end of the day.

Ultimately, respondent workers asked petitioner company to extend to them regular appointments.
Petitioner company refused. On 07 November 1997, twenty-three (23) of the temporary workers
(herein respondents) filed with the National Labor Relations Commission (NLRC) a complaint for the
regularization of their employment with petitioner company. The complaint was amended a number of
times to include other complainants that ultimately totaled fifty-eight (58) workers. Claiming that
petitioner company meanwhile terminated their services, respondent workers filed a notice of strike
and a complaint for illegal dismissal and unfair labor practice with the NLRC.

Issue: W/N the respondents' work is deemed necessary and desirable in the usual business
or trade of the petitioner

RULING: Yes. The repeated hiring of the respondent workers and continuing need of their daily
services clearly attest to the necessity or desirability of their services in the regular conduct of the
business/trade of petitioner.

In determining whether employment is regular or not, the applicable test is the reasonable
connection between a particular activity performed in relation to the usual business or trade of the
employer. The nature of work must be viewed from the perspective of the business in its entirety and
not confined scope.
CANADIAN OPPORTUNITIES UNLIMITED, INC., Petitioner, v. BART
Q. DALANGIN, JR., Respondent.

FACTS:

Dalangin was hired by the company in October 2001, as Immigration and Legal
Manager, with a monthly salary of P15,000.00. He was placed on probation for
six months. He was to report directly to the Chief Operations Officer, Annie
Llamanzares Abad. His tasks involved principally the review of the clients
applications for immigration to Canada to ensure that they are in accordance
with Canadian and Philippine laws.

Through a memorandum signed by Abad, the company terminated Dalangins

employment, declaring him "unfit" and "unqualified" to continue as Immigration
and Legal Manager. The following are the reasons for Dalangins termination:
Obstinacy and utter disregard of company policies, Lack of concern for the
company's interest despite having just been employed in the company, lack of
enthusiasm toward work, and lack of interest in fostering relationship with his
co-employees.

Labor Arbiter Eduardo G. Magno declared Dalangins dismissal illegal. On appeal,

the NLRC reversed the LA decision. Dalangin moved for reconsideration, but the
NLRC denied the motion, prompting him to go to the CA on a petition for
certiorari under Rule 65 of the Rules of Court.

In its decision, the CA reversed the NLRC ruling. As the labor arbiter did, the CA
found that the company failed to support, with substantial evidence, its claim that
Dalangin failed to meet the standards to qualify as a regular employee.

The CA denied the company's subsequent motion for reconsideration in its.

Hence, this appeal.

ISSUE: Whether or not Dalangin was validly dismissed

HELD:

Labor Law

In International Catholic Migration Commission v. NLRC, the Court explained

that a probationary employee, as understood under Article 281 of the Labor Code,
is one who is on trial by an employer, during which, the latter determines
whether or not he is qualified for permanent employment. A probationary
appointment gives the employer an opportunity to observe the fitness of a
probationer while at work, and to ascertain whether he would be a proper and
efficient employee.

Dalangin was barely a month on the job when the company terminated his
employment. He was found wanting in qualities that would make him a "proper
and efficient" employee or, as the company put it, he was unfit and unqualified to
continue as its Immigration and Legal Manager.

The CA did not believe that the company could fully assess Dalangins
performance within a month. It viewed Dalangins dismissal as arbitrary,
considering that the company had very little time to determine his fitness for the
job.

Contrary to the CAs conclusions, we find substantial evidence indicating that the
company was justified in terminating Dalangins employment, however brief it
had been. Time and again, we have emphasized that substantial evidence is such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.

Dalangin overlooks the fact, wittingly or unwittingly, that he offered glimpses of

his own behavior and actuations during his four-week stay with the company; he
betrayed his negative attitude and regard for the company, his co-employees and
his work.

Dalangin admitted in compulsory arbitration that the proximate cause for his
dismissal was his refusal to attend the company's "Values Formation Seminar"
scheduled for October 27, 2001, a Saturday. He refused to attend the seminar
after he learned that it had no relation to his duties, as he claimed, and that he
had to leave at 2:00 p.m. because he wanted to be with his family in the province.

When Abad insisted that he attend the seminar to encourage his co-employees to
attend, he stood pat on not attending, arguing that marked differences exist
between their positions and duties, and insinuating that he did not want to join
the other employees. He also questioned the scheduled 2:00 p.m. seminars on
Saturdays as they were not supposed to be doing a company activity beyond 2:00
p.m.

The "Values Formation Seminar" incident is an eye-opener on the kind of person

and employee Dalangin was. The incident also reveals Dalangins lack of interest
in establishing good working relationship with his co-employees, especially the
rank and file; he did not want to join them because of his view that the seminar
was not relevant to his position and duties.

Additionally, very early in his employment, Dalangin exhibited negative working

habits, particularly with respect to the one hour lunch break policy of the
company and the observance of the companys working hours.

However, since the company failed to observe the required due process in
terminating probationary employees, Dalangin is entitled to nominal damages.
G.R. No. 185829 April 25, 2012
Ponente: Velasco, Jr. J.
Doctrine: Employees must be reminded that while probationary employees do not enjoy
permanent status, they enjoy the constitutional protection of security of tenure. They can only be
terminated for cause or when they otherwise fail to meet the reasonable standards made known
to them by the employer at the time of their engagement.
FACTS: Respondent Wide Wide World Express Corporation (WWWEC) offered to employ
petitioner Armando Aliling (Aliling) as "Account Executive (Seafreight Sales)," with the following
compensation package: a monthly salary of PhP 13,000, transportation allowance of PhP 3,000,
clothing allowance of PhP 800, cost of living allowance of PhP 500, each payable on a per
month basis and a 14th month pay depending on the profitability and availability of financial
resources of the company. The offer came with a six (6)-month probation period condition with
this express caveat: "Performance during [sic] probationary period shall be made as basis for
confirmation to Regular or Permanent Status."
Training then started. However, instead of a Seafreight Sale assignment, WWWEC asked
Aliling to handle Ground Express (GX), a new company product launched on June 18, 2004
involving domestic cargo forwarding service for Luzon. Marketing this product and finding daily
contracts for it formed the core of Aliling’s new assignment. Barely a month after, Manuel F. San
Mateo III (San Mateo), WWWEC Sales and Marketing Director, emailed Aliling to express
dissatisfaction with the latter’s performance. Joseph R. Lariosa (Lariosa), Human Resources
Manager of WWWEC, asked Aliling to report to the Human Resources Department to explain
his absence taken without leave from September 20, 2004.
Aliling responded two days later. He denied being absent on the days in question, attaching to
his reply-letter11 a copy of his timesheet12 which showed that he worked from September 20 to
24, 2004. Aliling’s explanation came with a query regarding the withholding of his salary
corresponding to September 11 to 25, 2004.
Aliling wrote San Mateo stating: "Pursuant to your instruction on September 20, 2004, I hereby
tender my resignation effective October 15, 2004." While WWWEC took no action on his tender,
Aliling nonetheless demanded reinstatement and a written apology, claiming in a subsequent
letter dated October 1, 200414 to management that San Mateo had forced him to resign.
Lariosa’s response-letter of October 1, 2004, nformed Aliling that his case was still in the process of
being evaluated. On October 6, 2004, Lariosa again wrote, this time to advise Aliling of the termination
of his services effective as of that date owing to his "non-satisfactory performance" during his
probationary period. Earlier, however, or on October 4, 2004, Aliling filed a Complaint17 for illegal
dismissal due to forced resignation, nonpayment of salaries as well as damages with the NLRC against
WWWEC.

ISSUE: WHETHER OR NOT ALILING WAS ILLEGALLY DISMISSED.

HELD: YES. To justify fully the dismissal of an employee, the employer must, as a rule, prove
that the dismissal was for a just cause and that the employee was afforded due process prior to
dismissal. As a complementary principle, the employer has the onus of proving with clear,
accurate, consistent, and convincing evidence the validity of the dismissal. WWWEC had failed
to discharge its twin burden in the instant case.
First off, the attendant circumstances in the instant case aptly show that the issue of petitioner’s
alleged failure to achieve his quota, as a ground for terminating employment, strikes the Court
as a mere afterthought on the part of WWWEC. Consider: Lariosa’s letter of September 25,
2004 already betrayed management’s intention to dismiss the petitioner for alleged
unauthorized absences. Aliling was in fact made to explain and he did so satisfactorily. But, lo
and behold, WWWEC nonetheless proceeded with its plan to dismiss the petitioner for non-
satisfactory performance, although the corresponding termination letter dated October 6, 2004
did not even specifically state Aliling’s "non-satisfactory performance," or that Aliling’s
termination was by reason of his failure to achieve his set quota. In fine, an employee’s failure to
meet sales or work quotas falls under the concept of gross inefficiency, which in turn is
analogous to gross neglect of duty that is a just cause for dismissal under Article 282 of the
Code. However, in order for the quota imposed to be considered a valid productivity standard
and thereby validate a dismissal, management’s prerogative of fixing the quota must be
exercised in good faith for the advancement of its interest. The duty to prove good faith,
however, rests with WWWEC as part of its burden to show that the dismissal was for a just
cause. WWWEC must show that such quota was imposed in good faith. This WWWEC failed to
do, perceptibly because it could not. The fact of the matter is that the alleged imposition of the
quota was a desperate attempt to lend a semblance of validity to Aliling’s illegal dismissal.
Respondent WWWEC miserably failed to prove the termination of petitioner was for a just cause
nor was there substantial evidence to demonstrate the standards were made known to the latter
at the time of his engagement. Hence, petitioner’s right to security of tenure was breached.
As earlier stated, to effect a legal dismissal, the employer must show not only a valid ground
therefor, but also that procedural due process has properly been observed. When the Labor
Code speaks of procedural due process, the reference is usually to the two (2)-written notice
rule envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the
Labor Code. Here, the first and second notice requirements have not been properly observed,
thus tainting petitioner’s dismissal with illegality.
The adverted memo dated September 20, 2004 of WWWEC supposedly informing Aliling of the
likelihood of his termination and directing him to account for his failure to meet the expected job
performance would have had constituted the "charge sheet," sufficient to answer for the first
notice requirement, but for the fact that there is no proof such letter had been sent to and
received by him. In fact, in his December 13, 2004 Complainant’s Reply Affidavit, Aliling goes
on to tag such letter/memorandum as fabrication. WWWEC did not adduce proof to show that a
copy of the letter was duly served upon Aliling. Clearly enough, WWWEC did not comply with
the first notice requirement.
Neither was there compliance with the imperatives of a hearing or conference. The Court need not
dwell at length on this particular breach of the due procedural requirement. Suffice it to point out that
the record is devoid of any showing of a hearing or conference having been conducted. On the contrary,
in its October 1, 2004 letter to Aliling, or barely five (5) days after it served the notice of termination,
WWWEC acknowledged that it was still evaluating his case. And the written notice of termination itself
did not indicate all the circumstances involving the charge to justify severance of employment.
Philippine Daily Inquirer v. Magtibay
Facts:
Philippine Daily Inquirer, Inc. (PDI) hired Leon Magtibay (Magtibay) as a contractual worker for 5 months. After the expiration of
the said contract, PDI hired him again with a probationary period of 6 months. A week before the end of the second contract, PDI
handed him his termination letter due to failure in meeting company standards.
Magtibay then filed a complaint for illegal dismissal before the Labor Arbiter stating that he has now become a regular employee
by working for more than 6 months. The PDI union supported him stating unfair labor practice. Saying that he did not know he
was supposed to follow company standards and that he was not given due process in his termination.
PDI explained that his 5-month contract should not be included with his 6-month contract allowing him to be considered a regular
employee, and that he was in fact given an orientation on what the company standards were. The Labor Arbiter agreed with PDI
and dismissed his complaint and acquitted PDI of illegal dismissal and unfair labor practice.
When the case was brought to the NLRC, it reversed the Arbiter’s decision and charged PDI with illegal dismissal due to the fact
that Magtibay was now considered a regular employee. Also, Magtibay was not told that he must abide by company standards.
The Court of Appeals agreed with the NLRC . PDI filed a motion for reconsideration to no avail.
Issue:
Whether or not a probationary employees’ failure to follow company standards is ground for illegal dismissal. WON PDI is liable
for violating procedural due process in terminating Magtibay.
Ruling:
The NLRC and CA’s decisions were reversed and set aside thereby reinstating the Labor Arbiter’s decision to acquit PDI of
illegal dismissal and unfair labor practice.
The SC ruled that company standards are meant to be followed even if an employee is not made aware of them. It is inherent
that company standards are always in effect and employees, probationary or regular, are expected to meet them.
Also, PDI is did not violate procedural process due to the fact the Magtibay was on a probationary period and was not up to
company standards. Reason is that a probationary has the duty to prove his worth to the employer to become a permanent
employee. The due process here is in the constant observance and evaluation of Magtibay’s performance, in which he failed by
violating certain company rules and regulations.
 G.R. No. 192571               July 23, 2013

ABBOTT LABORATORIES, PHILIPPINES, Petitioners, 

vs.
PEARLIE ANN F. ALCARAZ, Respondent.

FACTS:

 On June 27, 2004, Abbott Laboratories, Philippines published in major broadsheet that it
is in need of Medical and Regulatory Affairs Manager stating therein the responsibilities
and qualifications of said position.
 On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position
which was an item under the company’s Hospira Affiliate Local Surveillance Unit (ALSU)
department.
 On February 12, 2005, Alcaraz signed an employment contract which stated, inter alia,
that she was to be placed on probation for a period of six (6) months beginning February
15, 2005 to August 14, 2005.
 She underwent pre-employment orientation where she was briefed on her duties and
responsibilities.
 On March 3, 2005, Alcaraz received an e-mail from the HR Director explaining 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 Evaluation and Performance Excellence Orientation Modules which she
had to apply in line with her task of evaluating the Hospira ALSU staff.
 On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on
the staff’s performance evaluation as their probationary periods were about to end. This
Alcaraz eventually submitted.
 On May 16, 2005, Alcaraz was called to a meeting with her immediate supervisor and
the former HR Director where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager. Thereafter she was asked to
tender her resignation, else they be forced to terminate her services.
 She filed a case of illegal dismissal against Abott and its officers.
 Labor Arbiter dismissed her complaint for lack of merit.
 NLRC reversed and set aside the LA’s ruling and ordered Abott to reinstate and pay
Alcaraz moral and exemplary damages.
 CA affirmed NLRC decision.

ISSUE(S):
(1) Whether or not Alcaraz was sufficiently informed of the reasonable standards to qualify
her as a regular employee; and
(2) Whether or not Alcaraz was validly terminated from her employment.
HELD:
(1) Yes, Alcaraz was sufficiently informed of the reasonable standards. 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. If the employer fails to comply with either, the
employee is deemed as a regular and not a probationary employee.

A punctilious (detailed) examination of the records reveals that Abbott had indeed
complied with the above-stated requirements. This conclusion is largely impelled by the
fact that Abbott clearly conveyed to Alcaraz her duties and responsibilities as Regulatory
Affairs Manager prior to, during the time of her engagement, and the incipient stages of
her employment.

(2) A probationary employee, like a regular employee, enjoys security of tenure. However, in
cases of probationary employment, aside from just or authorized causes of termination,
an additional ground is provided under Article 295 of the Labor Code, i.e., the
probationary employee may also be terminated for failure to qualify as a regular
employee in accordance with the reasonable standards made known by the employer to
the employee at the time of the engagement.

A different procedure is applied when terminating a probationary employee; the usual

two-notice rule does not govern. Section 2, Rule I, Book VI of the Implementing Rules of
the Labor Code states that "if the termination is brought about by the failure of an
employee to meet the standards of the employer in case of probationary employment, it
shall be sufficient that a written notice is served the employee, within a reasonable time
from the effective date of termination."

As the records show, 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, i.e., that after proper evaluation, Abbott determined
that she failed to meet the reasonable standards for her regularization considering her
lack of time and people management and decision-making skills, which are necessary in
the performance of her functions as Regulatory Affairs Manager. Undeniably, this written
notice sufficiently meets the criteria set forth above, thereby legitimizing the cause and
manner of Alcaraz’s dismissal as a probationary employee under the parameters set by
the Labor Code.
 Enchanted Kingdom, Inc. vs. Miguel J. Verzo
G.R. No. 209559, December 09, 2015

FACTS
Respondent Miguel J. Verzo (Verzo) was hired by petitioner Enchanted Kingdom, Inc.
(Enchanted) to work as section head-mechanical and instrumentation maintenance (SH-MIM) for
its theme park in Sta. Rosa City, Laguna for a period of six months on probationary status. He
was provided with a detailed list of responsibilities that he should fulfil. During the probationary
period, Enchanted assessed Verzo’s performance as not up to par. He was recommended by his
immediate supervisor that he should not be considered for regularization. In Feb. 3, 2010,
Enchanted furnished Verzo a copy of the cast member performance appraisal for regularization,
which reported that he only obtained a score of 70 out of 100. Ln Feb. 15, 2010, Enchanted
formally informed Verzo that he did not qualify for regularization because his work performance
for the past five months did not meet the requirements of his position. Verzo filed a complaint
for illegal dismissal, damages and attorney’s fees against Enchanted.

Whether or not Petitioner’s is deemed to be a regular employee

HELD
No. 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 on
which his regularization would be based at the time of the engagement, then the said employee
shall be deemed a regular employee, Thus: (d) 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. Where no standards are made known to the
employee at that time, he shall be deemed a regular employee. In Abbott Laboratories v. Alcaraz,
G.R.No. 192571, July 23, 2013, 701 SCRA 682, the Court stated that when dealing with a
probationary employee, the employer is made to comply with two (2) requirements: 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. If the employer fails to comply with either, the employee is deemed as a regular and
not a probationary employee.
In the case at bench, the evidence is clear that when Verzo was first hired by Enchanted,
he was placed on a probationary status. The letter, dated August 26, 2009, clearly reflects not
only the agreement of both parties as to the probationary status of the employment and its
duration, but also the fact that Enchanted informed Verzo of the standards for his regularization,
Thus: x x x 2. You will be on a probationary status from August 19, 2009 to February 18, 2010.
3. As Section Head for Mechanical & Instrumentation Maintenance, you shall be responsible for
mechanical and structural system assessments and inspection to evaluate conditions, operations
and maintenance requirements of rides, facilities and buildings to ensure compliance with
applicable codes, regulations and standards. Please see attach Job Description for the details of
your responsibilities. x x x Clearly from the above, Enchanted informed Verzo that he was being
placed on probation. Aside from the probationary nature of his employment, the agreement of the
parties specifically showed: the duration of such status; the benefits to which he was entitled
once regularized; and most importantly, the standard with which he must comply in order to be
regularized.
 International Catholic Migration Commission v. NLRC
GR No. 72222, 30 January 1989

FACTS:

 Petitioner ICMC, a non-profit organization dedicated to refugee service at the Philippine

Refugee Processing Center engaged the services of private respondent as a
probationary cultural orientation teacher. After three months, private respondent was
informed, orally and in writing, that her services were being terminated for her failure to
meet the prescribed standards of petitioner as reflected in her performance evaluation.
Thereafter, private respondent filed a complaint for illegal dismissal.

 LA dismissed the complaint but ordered petitioner to pay private respondent the last
three months of the agreed employment period pursuant to her verbal contract of
employment. Upon appeal to the NLRC, petitioner contends that private respondent
could not rightfully be awarded her salary for the unexpired portion as she was
terminated for failure to qualify as a regular employee. Nevertheless, the NLRC affirmed
the decision of the LA. Hence, this petition.

ISSUE:

Whether an employee who was terminated during the probationary period of her
employment is entitled to her salary for the unexpired portion of her six-month
probationary employment.

HELD: NO

RATIO:

 There is justifiable basis for the reversal of public respondent’s award of salary for the
unexpired three-month portion of private respondent’s six-month probationary
employment in the light of its express finding that there was no illegal dismissal. There is
no dispute that private respondent was terminated during her probationary period of
employment for failure to qualify as a regular member of petitioner’s teaching staff in
accordance with its reasonable standards. Records show that private respondent was
found by petitioner to be deficient in classroom management, teacher-student
relationship and teaching techniques. Failure to qualify as a regular employee in
accordance with the reasonable standards of the employer is a just cause for terminating
a probationary employee specifically recognized under Article 282 (now Article 281) of
the Labor Code.
 It is well settled that the employer has the right or is at liberty to choose who will be hired
 and who will be denied employment. In that sense, it is within the exercise of the right to
select his employees that 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.

MAGIS YOUNG ACHIEVERS' LEARNING CENTER and MRS. VIOLETA T. CARIÑO,  vs.
ADELAIDA P. MANALO

G.R. No. 178835 | February 13, 2009

FACTS:

Adelaida Manalo was hired as a teacher and acting principal on April 18, 2002 with a monthly
salary of 15,000 pesos. On March 29, 2003, Manalo submitted a letter of resignation due to family and
personal reasons, which is effective by April 1. On March 31, 2003, Manalo received a letter of
termination, indicating that part of the petitioner’s cost-cutting scheme is a systematic reorganization,
including the abolishment of the position PRINCIPAL for the next school year. On April 4, 2003,
respondent instituted against petitioner a Complaint 3 for illegal dismissal and non-payment of 13th month
pay, with a prayer for reinstatement, award of full backwages and moral and exemplary damages. Manalo
also 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 employe r under
Article 282 of the Labor Code. She further asserted that petitioner infringed Article 283 of the Labor Code,
as the required 30-day notice to the Department of Labor and Employment (DOLE) and to her as the
employee, and the payment of her separation pay were not complied with.

On the other hand, petitioner countered that Manalo 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 of which provides that:

(75) Full-time teachers who have rendered three years of satisfactory service shall be
considered permanent.

ISSUE: Whether or not Manalo is a permanent employee

RULING: No. 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. 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.
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. 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. Absent any circumstances which unmistakably show that an abbreviated
probationary period has been agreed upon, the three-year probationary term governs.

Manalo has not completed the requisite three-year period of probationary employment ,
as provided in the Manual. She cannot, by right, claim permanent status. Additionally,
appointment as Acting Principal is merely temporary, or one that is good until another
appointment is made to take its place.

Resignation is the voluntary act of an employee who finds himself in a situation where he believes that
personal reasons cannot be sacrificed in favor of the exigency of the service, and that he has no other
choice but to dissociate himself from employment. Voluntary resignation is made with the intention of
relinquishing an office, accompanied by the act of abandonment. It is the acceptance of an employee's
resignation that renders it operative. Manalo was hired as a probationary teacher and the petitioner
needed to show evidence that she did not meet the standards set by the school. However, they failed to
do so. To note, the termination of respondent was effected by that letter stating that she was being
relieved from employment because the school authorities allegedly decided, as a cost-cutting measure,
that the position of "Principal" was to be abolished. Nowhere in that letter was respondent informed that
her performance as a school teacher was less than satisfactory.

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.

PERTINENT ARTICLE/LAW/DOCTRINE/JURISPRUDENCE:

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 at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a regular
employee.ςηαñrοblεš νιr†υαl lαÏ

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.

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.

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.

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 shall
be considered regular or permanent
Yolanda Mercado vs AMA, April 13, 2010

Nature of Action: Petition for review on certiorari of the CA decision which reverse the
unanimous Decision of the NLRC and the Labor Arbiter.

 The CA ruled that under the Manual for Regulations for Private Schools, a teaching
personnel in a private educational institution (1) must be a full time teacher; (2) must have
rendered three consecutive years of service; and (3) such service must be satisfactory
before he or she can acquire permanent status.

Facts; Petitioners were faculty members of AMA Computer College, Paranaque city
since 1998. During the school year 2000-2001, AMACC implemented new faculty
screening guidelines. 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. The petitioners failed to obtain a
passing rating based on the performance standards; hence AMACC did not give them
any salary increase. Petitioners filed a complaint with the Arbitration Branch of the
NLRC on July 25, 2000, for underpayment of wages, non-payment of overtime and
overload compensation, 13th month pay, and for discriminatory practices.
On September 7, 2000, petitioners were then given a notice of Non-renewal of Contract.

Issue: Does the Non-renewal of Contract for teachers constitute illegal dismissal after
having rendered service for three consecutive school years but run short as to the
actual number of tenure which is only equal to 2 yrs. and 3 months?
Ruling:

Yes the employers act constitute illegal dismissal . The school, cannot forget that its system
of fixed-term contract is a system that operates during the probationary period and for this
reason is subject to the terms of Article 281 of the Labor Code. Unless this reconciliation is
made, the requirements of this Article on probationary status would be fully negated as the
school may freely choose not to renew contracts simply because their terms have expired. The
inevitable effect of course is to wreck the scheme that the Constitution and the Labor Code
established to balance relationships between labor and management.

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.

The probationary standards must not only be reasonable but must have also been
communicated to the teachers at the start of the probationary 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.

In the above case, the exact terms of the standards were never introduced as evidence;
neither does the evidence show how these standards were applied to the
petitioners.48 Without these pieces of evidence the termination of employment of
employees on probationary status is illegal.

Colegio del Santisimo Rosario and Sr. Zenaida S. Mofada, OP v. Emmanuel Rojo

Facts:
 Colegio del Santisimo Rosario (CSR) hired Emmanuel Rojo as a high school teacher on
probationary basis for the school years 1992-1993, 1993-1994 and 1994-1995.
 On April 5, 1995, CSR, through Sr. Zenaida S. Mofada, OP, decided not to renew Rojo’s services.
 Rojo filed a complaint for illegal dismissal.
o 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.
o Paragraph 75 of the 1970 Manual of Regulations for Private Schools (1970 Manual), says
that “full- time teachers who have rendered three (3) consecutive years of satisfactory
services shall be considered permanent.”
 CSR’s position:
o Rojo knew that his Teacher’s Contract for school year 1994-1995 with CSR would expire
on March 31, 1995.
o Thus, he was not dismissed but his probationary contract merely expired and was not
renewed.
o The “three years” mentioned in paragraph 75 of the 1970 Manual refer to “36 months,”
not three school years. Since Rojo 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.
 LA ruled in favour of Rojo.
o “Three school years” means three years of 10 months, not 12 months. Since Rojo had
already served for three consecutive school years, he already attained regular
employment status. Thus, the non-renewal of his contract constitutes illegal dismissal.
o LA found CSR and Mofada guilty of bad faith.
 NLRC affirmed.
o After serving three school years, Rojo attained the status of regular employment
because CSR did not make known to respondent the reasonable standards he should
meet.
 CA affirmed.
o Rojo attained the status of regular employee after three years.
o He was also the Prefect of Discipline, a task entailing much responsibility.
o It was not shown that CSR set performance standards for Rojo’s employment.

Issue: WoN Rojo was illegally dismissed

 YES
 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 probationary
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. Corollarily,  should the teachers not have been apprised of such
reasonable standards at the time specified above, they shall be deemed regular employees.

 What is glaringly absent from CSR’s evidence are the reasonable standards that respondent was
expected to meet that could have served as proper guidelines for purposes of evaluating his
performance.
 Nowhere in the Teacher’s Contract could such standards be found. Neither was it mentioned
that the same were ever conveyed to Rojo.
 Even assuming that respondent failed to meet the standards set forth by CSR and made known
to the former at the time he was engaged as a teacher on probationary status, still, the
termination was flawed for failure to give the required notice to respondent.
 While Mofada mentioned the existence of alleged performance evaluations, the Court is in a
quandary as to what could have been the basis of such evaluation, as no evidence were adduced
to show the reasonable standards by which Rojo’s performance was assessed.
 Absent any showing of unsatisfactory performance on the part of Rojo, it can be presumed that
his performance was satisfactory.
o While he was still more than a year into his probationary employment, he was already
designated Prefect of Discipline.
o In such capacity, he was able to uncover the existence of a drug syndicate within the
school and lessen the incidence of drug use therein.
o Yet despite respondent’s substantial contribution to the school, CSR chose to disregard
the same and instead terminated his services; while most of those who were involved in
drug activities within the school were punished with a slap on the wrist as they were
merely made to write letters promising that the incident will not happen again.
 No resignation letter presented, contrary to CSR’s allegation that Rojo resigned.
Buiser v. Leogardo, Jr.

GR No. L-63316 | 131 SCRA 151 | July 31, 1984

Petition: Petition for review on certiorari

Petitioner: ILUMINADA VER BUISER, MA. CECILIA RILLOACUÑA and MA. MERCEDES P. INTENGAN

Respondent: HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of the Ministry of Labor &
Employment, and GENERAL TELEPHONE DIRECTORY, CO.,

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.

FACTS

- Buiser, Rilloacuna and Intengan were employed by General Telephone Directory Co. as sales
representative.
- Buiser et al. entered an “Employment Contract (on Probationary Status)” with GT Directory.
- The employment contact states that:
o The company hereby employs the employee as telephone sales representative on a probationary
status for a period of eighteen (18) months.
o During the probationary period of employment, the Employee may be terminated at the pleasure of
the company without the necessity of giving notice of termination or the payment of termination
pay.
o It takes about eighteen (18) months before his worth as a telephone sales representative can be
fully evaluated
- GT Directory prescribed sales quotas to be accomplished by Buiser. Failing to meet their respective sales
quotas, Buiser et al. were dismissed from the service. Thus, Buiser filed a complaint for illegal dismissal.
- Regional Director Ministry of Labor dismissed the complaint. Buiser appealed to Deputy Minister Vicente
Leogardo, Jr which affirmed the decision of RD.
- Deputy Minister Leogardo ruled that the petitioners have not attained permanent status since private
respondent was justified in requiring a longer period of probation, and that the termination of petitioners’
services was valid since the latter failed to meet their sales quotas.

Hence, this petition.

ISSUE/S

1. W/N the 18 months probationary status is allowed.

RULING & RATIO

1. YES
  General Rule: probationary period of employment is limited to six (6) months.
 Exception:
o parties to an employment contract agreed otherwise,
o established by company policy
o required by the nature of work to be performed by the employee.
 There is an exercise of managerial prerogatives in requiring a longer period of probationary employment,
especially where the employee must learn a particular kind of work such as selling, or when the job requires
certain qualifications, skills, experience or training.
 Under the Labor Code, six (6) months is the general probationary period, but the probationary period is the
period needed to determine fitness for the job. This period, for lack of a better measurement is deemed to be
the period needed to learn the job.
 Moreover, an eighteen month probationary period is recognized by the Labor Union GT Directory Co, which
is Article V of the Collective Bargaining Agreement.
DISPOSITION

WHEREFORE, the petition is DISMISSED for lack of merit.

MARIWASA MANUFACTURING v LEOGARDO (Narvasa, 1989)

QUICK FACTS: Dequila, a probationary utility worker of Mariwasa, agreed to have his probationary
period extended for another 3 months after the first 6 months, so that he may have another chance to
improve his performance and qualify as a regular worker. After the extension, he was terminated.

FACTS:

Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc. as a general
utility worker on January 10, 1979. After 6 months, he was informed that his work was unsatisfactory
and had failed to meet the required standards. To give him another chance, and with Dequila’s written
consent, Mariwasa extended Dequila’s probationary period for another three months: from July 10 to
October 9, 1979. Dequila’s performance, however, did not improve and Mariwasa terminated his
employment at the end of the extended period. 

Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration, Angel T.
Dazo, and violation of Presidential Decrees Nos. 928 and 1389. 

DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. Thus, Dequila

appeals to the Minister of Labor.
MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular
employee at the time of his dismissal, thus, he was illegally dismissed. (Initial order: Reinstatement with
full backwages. Later amended to direct payment of Dequila's backwages from the date of his dismissal
to December 20, 1982 only.)

ISSUE: WON employer and employee may, by agreement, extend the probationary period of
employment beyond the six months prescribed in Art. 282 of the Labor Code?

RULING: YES, agreements stipulating longer probationary periods may constitute lawful exceptions to
the statutory prescription limiting such periods to six months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that “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. In the latter case,
there is recognition of the exercise of managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where the probationary period was set for
eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee
must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills
experience or training.”

In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal
consequences of a probationary period satisfactorily completed.  In fact, it was ex gratia, an act of
liberality on the part of his employer affording him a second chance to make good after having initially
failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said
employer's account to compel it to keep on its payroll one who could not perform according to its work
standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit
attaching to the completion of said period if he still failed to make the grade during the period of
extension. By reasonably extending the period of probation, the questioned agreement actually
improved the probationary employee's prospects of demonstrating his fitness for regular employment.

Petition granted. Order of Deputy Minister Leogardo reversed. Case for illegal dismissal is dismissed.
ALU-TUCP vs. NLRC and NSC [G.R. No. 109902. August 02, 1994]

FACTS:

[P]etitioners, as employees of private respondent National Steel Corporation (NSC), filed separate
complaints for unfair labor practice, regularization and monetary benefits with the NLRC, Sub-Regional
Arbitration Branch XII, Iligan City. The complaints were consolidated and after hearing, the Labor Arbiter
declared petitioners “regular project employees who shall continue their employment as such for as
long as such [project] activity exists,” but entitled to the salary of a regular employee pursuant to the
provisions in the collective bargaining agreement. It also ordered payment of salary differentials.

The NLRC in its questioned resolutions modified the Labor Arbiter’s decision. It affirmed the Labor
Arbiter’s holding that petitioners were project employees since they were hired to perform work in a
specific undertaking — the Five Years Expansion Program, the completion of which had been
determined at the time of their engagement and which operation was not directly related to the
business of steel manufacturing. The NLRC, however, set aside the award to petitioners of the same
benefits enjoyed by regular employees for lack of legal and factual basis.

The law on the matter is Article 280 of the Labor Code, where the petitioners argue that they are
“regular” employees of NSC because: (i) their jobs are “necessary, desirable and work-related to private
respondent’s main business, steel-making”; and (ii) they have rendered service for six (6) or more years
to private respondent NSC.

ISSUE:

Whether or not petitioners are considered “permanent employees” as opposed to being only “project
employees” of NSC.

HELD:

NO. Petition for Certiorari dismissed for lack of merit. NLRC Resolutions affirmed.

RATIO:
Function of the proviso. Petitioners are not considered “permanent employees”. However, contrary to
petitioners’ apprehensions, the designation of named employees as “project employees” and their
assignment to a specific project are effected and implemented in good faith, and not merely as a means
of evading otherwise applicable requirements of labor laws.

On the claim that petitioners’ service to NSC of more than six (6) years should qualify them as “regular
employees”, the Supreme Court believed this claim is without legal basis. The simple fact that the
employment of petitioners as project employees had gone beyond one (1) year, does not detract from,
or legally dissolve, their status as “project employees”. The second paragraph of Article 280 of the Labor
Code, quoted above, providing that an employee who has served for at least one (1) year, shall be
considered a regular employee, relates to casual employees, not to project employees.

G.R. No. 170351, March 30, 2011

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION –
ALU – TUCP, Petitioner,
vs.
PHILIPPINE NATIONAL OIL COMPANY – ENERGY DEVELOPMENT
CORPORATION, Respondent.
FACTS: Respondent is a GOCC while petitioner is a legitimate labor
organization. Among [respondent’s] geothermal projects is the Leyte
Geothermal Power Project located at the Greater Tongonan Geothermal
Reservation in Leyte. Thus, the [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. In view of that
circumstance, the petitioner demands from the [respondent] for 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. 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.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE
against the [respondent] on the ground of purported commission by the latter
of unfair labor practice for “refusal to bargain collectively, union busting and
mass termination.” On the same day, the petitioner declared a strike and
staged such strike.
Secretary of Labor intervened and ordered all workers to return to work.
However, petitioner did not abide.
NLRC: ruled that the employees are PROJECT EMPLOYEES, and the strike as
ILLEGAL
Petitioner Union contends that its officers and members performed activities
that were usually necessary and desirable to respondent’s usual business.

ISSUE: WON they are project employees

HELD: They are PROJECT EMPLOYEES
Article 280 of the Labor Code contemplates four (4) kinds of employees:

(a) 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”;

(b) project employees or those “whose employment has been fixed for a
specific project or undertaking[,] the completion or termination of which has
been determined at the time of the engagement of the employee”;

(c) seasonal employees or those who work or perform services which are
seasonal in nature, and the employment is for 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— a fixed-term employee.

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. 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.
Union’s own admission, both parties had executed the contracts freely and
voluntarily without force, duress or acts tending to vitiate the worker[s’]
consent. Thus, we see no reason not to honor and give effect to the terms and
conditions stipulated therein.

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.

MACARTHUR MALICDEM and HERMENIGILDO FLORES, petitioners, vs.

MARULAS INDUSTRIAL CORPORATION & MIKE MANCILLA,respondents

February 26, 2014 | Mendoza, J.

FACTS:
 Malicdem and Flores were hired by Marulas as extruder operators. They were responsible for the
bagging of filament yarn, the quality of of yarn package and the cleanliness of the work place
area. Their employment contracts were for a period of 1 year.
 Every year, they would sign a Resignation/Quitclaim in favor of Marulas a day after their contracts
ended, and then sign another contract for 1 year. 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.
 LA: no illegal dismissal; Malicdem and Flores were not terminated and that their employment
naturally ceased when their contracts expired; however, ordered Marulas to pay Malicdem and
Flores their respective wage differentials
 NLRC: appeal partially granted; award of payment of 13th month pay, service incentive leave and
holiday pay for 3 years; still filed MR – DENIED
 CA: denied petition; issue of WON the petitioners were project employees or regular employees
was factual in nature; affirmed LA; MR denied
 Respondent’s arguments:
o petitioners were contractual employees and their rehiring did not amount to regularization
o William Uy Construction Corp. v. Trinidad: held that the repeated and successive rehiring of project
employees did not qualify them as regular employees, as length of service was not the controlling
determinant of the employment tenure of a project employee, but whether the employment had
been fixed for a specific project or undertaking, its completion had been determined at the time of
the engagement of the employee

ISSUE: WON CA erred in not finding any grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the NLRC

RULING: YES
 The "Project Employment Agreement," reveals that there was a stipulated probationary period of
6 months from its commencement. It was provided therein that in the event that they would be
 able to comply with the company’s standards and criteria within such period, they shall be
reclassified as project employees with respect to the remaining period of the effectivity of the
contract.
 Under Art 281 LC, however, "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.
o Maraguinot, Jr. v. NLRC: 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.
 There was clearly a deliberate intent to prevent the regularization of the petitioners. There was no
actual project. As there was no specific project or undertaking to speak of, the respondents
cannot invoke the exception in Article 280 of the Labor Code. This is a clear attempt to frustrate
the regularization of the petitioners and to circumvent the law.
 Even assuming arguendo 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. They were continuously rehired by the same employer for the same position as
extruder operators. Their work was vital, necessary and indispensable to the usual business or
trade of the employer.
 The project employment contracts that the petitioners were made to sign every year since the
start of their employment were only a stratagy to violate their security of tenure in the company.
 The respondents’ invocation of William Uy Construction Corp. v. Trinidad is misplaced because it
is applicable only in cases involving the tenure of project employees in the construction industry.
o It is widely known that in the construction industry, a project employee's work depends on the
availability of projects, necessarily the duration of his employment. It is not permanent but
coterminous with the work to which he is assigned.
o It would be extremely burdensome for the employer, who depends on the availability of projects, to
carry him as a permanent employee Ratio: once the project is completed it would be unjust to
require the employer to maintain these employees in their payroll. 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 expense of management.
 Petition GRANTED.

MARAGUINOT, JR. V. NLRC (SECOND DIVISION)

JANUARY 22, 1998 / DAVIDE, JR., J. / LABOR 1 / EFHDy (edited a bit by Chai)

NATURE Petition for certiorari

PETITIONERS Alejandro Maraguinot, Jr. And Paulino Enero

RESPONDENTS NLRC et al.

SUMMARY. Petitioners were employed as part of the filming crew of VIVA films. VIVA
contends that they are simply project employees (on a per project contract) and not regular
employees, as such are automatically terminated upon completion of the project. Petitioners on
the other hand claim that they are regular employees and were illegally dismissed. The SC
 held that since they were repeatedly rehired, and since their work was vital for the business of
VIVA, they are considered as regular employees.
DOCTRINE. A project employee or a member of a work pool may acquire the status of a
regular employee when the following 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.

FACTS.

 Petitioners Alejandro Maraguinot, Jr. and Paulino Enero employed as part of the filming crew of VIVA films. Their tasks
consisted of loading, unloading and arranging movie equipment in the shooting area as instructed by the cameraman, returning
the equipment to Viva Films’ warehouse, assisting in the “fixing” of the lighting system, and performing other tasks that the
cameraman and/or director may assign.
 They were dismissed when they asked that their salary be increased in accordance with the minimum wage 1. Their supervisor
informed them that their salaries would only be increased if they agree to sign a blank employment contract which they
refused. As such they filed a case for illegal dismissal.
 VIVA: it is primarily engaged in the distribution and exhibition of movies but not in the business of making movies. As such,
they contract persons called “producers” to “produce” or make movies and petitioners are actually project employees of the
producers who, in turn, act as independent contractor.2 As such, there is no EER bet. them.
 LA: in favor of petitioners; NLRC reversed agreeing with VIVA’s contentions.

ISSUES & RATIO.

1. WON there was an employer-employee relationship b/n petitioners and VIVA. – YES. The producers are mere agents
of VIVA, as such petitioners are still employees of VIVA.

 The producers were not job contractors: To be considered a job contractor, producers must have tools, equipment,
machinery, work premises, and other materials necessary to make motion pictures. In this case, the producers have none
of these materials and the evidence show that all the equipments were provided by VIVA itself.

 The producers cannot also be considered as labor-only contractors: They did not supply, recruit nor hire the workers.
In the instant case, it was an employee of VIVA, who recruited crew members from an “available group of freelance
workers which includes the Maraguinot and Enero.”

 The 4 elements for the existence of EER are present in this case, i.e. (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s
conduct.
 The most important element is the employer’s control of the employee’s conduct, not only as to the result of the
work to be done but also as to the means and methods to accomplish the same.
 The control test is evident in its mandate that the end result must be a “quality film acceptable to thecompany.” The movie
project must be finished within schedule w/o exceeding the budget, and additional expenses must be justified; certain
scenes are subject to change to suit the taste of the company, etc. Also, the appointment slips as well as the payment slips
all had VIVA’s corporate name on the heading as well as its letterhead.

2. WON petitioners were regular employees and not simply project employees. – YES.
 Petitioners are considered regulars due to their repeated renewal of contract. A project employee or a member of a
work pool may acquire the status of a regular employee when the following 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.
 Evidence on record shows that:
1
Maraguinot was paid P375 per week (first 4mos), increased to P400, P475 then finally, P593, while Enero was paid a weekly salary of P375
which was increased to P425, then to P475.

2
For Maraguinot, it was the assoc producer of “Mahirap Maging Pogi” who hired him accdg to Viva, while for Enero, he was hired for the film
“Sigaw ng Puso,” later retitled “Narito ang Puso.”
 o Enero was employed for a total of two (2) years and engaged in at least 18 projects, while Maraguinot was employed
for some 3 years and worked on at least 23 projects.
o As petitioners’ tasks involved, among other chores, the loading, unloading and arranging of movie equipment in the
shooting area as instructed by the cameramen, returning the equipment to the Viva Films’ warehouse, and assisting
in the “fixing” of the lighting system, it may not be gainsaid that these tasks were vital, necessary and
indispensable to the usual business or trade of the employer
 A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment
during temporary breaks in the business, provided that the worker shall be available when called to report for a project.
 Although primarily applicable to regular seasonal workers, this setup can likewise be applied to project workers insofar as
the effect of temporary cessation of work is concerned. This is beneficial to both the employer and employee for it
prevents the unjust situation of “coddling labor at the expense of capital” and at the same time enables the workers to
attain the status of regular employees.
 Clearly, the continuous rehiring of the same set of employees within the framework of the Company is strongly indicative
that respondents were an integral part of a work pool from which petitioners drew its workers for its various projects.

3. WON petitioners were illegally dismissed. – YES.

Petitioners being regular employees were illegally dismissed as the ground invoked by VIVA – completion of project, is
not a valid ground for dismissal under Article 282 of the Labor Code. They are entitled to back wages, but pursuant to the
principles of “suspension of work” and “no pay” between the end of one project and the start of a new one, in computing
petitioners’ back wages, the amounts corresponding to what could have been earned during the periods from the date
petitioners were dismissed until their reinstatement when petitioners’ respective Shooting Units were not undertaking any
movie projects, should be deducted.

HANJIN v IBANEZ Labor: Compromise

FACTS:

- Hanjin Heavy Industries and & Construction Company terminated the services of Ibanez and four other
employees (2002)
- Ibanez et al states that they have been employees of Hanjin and have worked on the projects of Hanjin
including the North Harbor project (1992-1994), Manila International Port (1994-1996) and Batangas Port
(1996- 1998) and projects currently being completed including the La Mesa Dam project
- Hanjin claims that such employees cannot claim illegal dismissal for the ff reasons:
o They are project employees whose employment is co-terminus with the project (LRT project).
 They stated that this was expressly written in their contract but Hanjin produced such
copies for the labor arbiter
o They have signed quitclaims which bars them from filing action or claiming other receivables due
to them because they have already received it as per their quitclaim
- Labor arbiter ruled in favour of Ibanez et al, ruling that there is an illegal dismissal and that Hanjin is liable
to pay backwages and damages, stating that they are regular employees and not project employees
- NLRC reversed Labor Arbiter’s decision. CA reversed NLRC decision stating that Hanjin is liable.
- On NLRC, Hanjin changed its argument stting that they did not need any further contract to state that
their employees were project employees given that the nature of the work is construction.
- Hanjin also states that while there was no project-based contract, they complied with all the
requirements of law and DOLE for project-based employees.

ISSUE:
 WoN Ibanez et al are regular employees or project employees

WoN the quitclaim they signed bar them from any legal remedies or collection of any other receivables
from their previous employers

RULING:

- ON EMPLOYMENT: The principal test for determining whether particular employees are properly
characterized as "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 a number of cases, the Court has held that the length of service or the re-hiring of construction
workers on a project-to-project basis does not confer upon them regular employment status, since their
re-hiring is only a natural consequence of the fact that experienced construction workers are preferred.
o Petitioners did not present other Termination Reports apart from that filed on 11 April 2002. The
failure of an employer to file a Termination Report with the DOLE every time a project or a phase
thereof is completed indicates that respondents were not project employees
o If respondents were actually project employees, petitioners should have filed as many
Termination Reports as there were construction projects actually finished and for which
respondents were employed.
- Basically, Hanjin failed to prove their contentions because:
o They were not able to submit the actual contract
o They were not able to establish that they were sending termination reports to DOLE everytime a
Project is completed
o They were not able to submit other documents or evidences which states their compliance with
project-based employment (project completion bonus etc). The payroll records they show simply
state that they paid the project employees a “bonus” but bears no connection to the completion
of the project.
o The sum of this points to the fact that Ibanez et al were not project employees.
- ON QUITCLAIM:
o Finally, the Quitclaims which the respondents signed cannot bar them from demanding what is
legally due them as regular employees. As a rule, quitclaims and waivers or releases are looked
upon with disfavor and frowned upon as contrary to public policy. They are thus ineffective to
bar claims for the full measure of a worker's legal rights, particularly when the following
conditions are applicable:
 1) where there is clear proof that the waiver was wangled from an unsuspecting or
gullible person, or
 (2) where the terms of settlement are unconscionable on their face.

To determine whether the Quitclaims signed by respondents are valid, one important factor that must be
taken into account is the consideration accepted by respondents; the amount must constitute a
reasonable settlement equivalent to the full measure of their legal rights. In this case, the Quitclaims
signed by the respondents do not appear to have been made for valuable consideration. Respondents,
who are regular employees, are entitled to backwages and separation pay and, therefore, the Quitclaims
which they signed cannot prevent them from seeking claims to which they are entitled.
 PNOC-Energy Development Corporation, Souther Negros Geothermal Project v.
National Labor Relations Commission, Fourth Division, Cebu City
G.R. No. 169353, April 13, 2007
Facts:
PNOC-Energy Development Corporation is a government-owned and controlled
corporation engaged in the exploration, development and utilization of energy. It undertakes
several projects in areas where geothermal energy has been discovered. One of its projects is
the Palipinpinon II (PAL II), which for its development, it was necessary to augment the
manpower requirement due to increased activities, PNOC hired employees including private
respondents in the Administration and Maintenance Section.
The termination/expiration of their respective employment was specified in their initial
employment contracts, which, however, were renewed and extended on their respective expiry
dates.
Prior to the termination of respondent, PNOC submitted to the DOLE termination reports
for their termination and they were subsequently furnished with notices of termination due to the
substantial completion of the civil works phase of PAL II.
Thereafter, respondents filed a complaint for illegal dismissal. The Labor Arbiter
dismissed the complaint ruling that respondents were not dismissed from work; the employer-
employee relationship between the parties was severed upon expiration of the respective
contracts of respondents and the completion of the projects concerned.
The NLRC reversed the decision of the Labor Arbiter ruling that respondents were
regular non-project employees for having worked for more than one year in positions that
required them to perform activities necessary and desirable in the normal business or trade of
PNOC. The NLRC further ruled that the employment contracts of respondents were not for a
specific project or for a fixed period. Thus the dismissals made under the pretext of project
completion were illegal, being founded on an invalid, unjust and unauthorized cause. The Court
of Appeals affirmed NLRC’s decision holding that respondents were performing activities
necessary and desirable in the normal operations of the business of PNOC. It further explained
that the repeated re-hiring and the continuing need for the services of the project employees
over a span of time had made them regular employees.

Issue:
Were respondents regular employees or project employees of M.Y. San Biscuits, Inc.?

Laws Applicable:
Art. 280, Labor Code
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 here 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.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue with such
activity exists.

Ruling:
The principal test for determining whether particular employees are properly
characterized as “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. However, PNOC failed to substantiate its claim that respondents were hired merely as
project employees. The records of the case reveal that the supposed specific project or
undertaking of PNOC was not satisfactorily identified in the contracts of respondents. Also, its
act of repeatedly and continuously hiring respondents to the same kind of work belies its
contention that respondents were hired for a specific project or undertaking. The absence of a
definite duration for the project/s has led the Court to conclude that respondents are, in fact,
regular employees.
Another cogent factor which militates against the corporation’s insistence that the
services of respondents were terminated because the projects for which they were hired had
been completed is the fact that respondents’ contracts of employment were extended a number
of times for different or new projects. It must be stressed that a contract that misuses a
purported fixed-term employment to block the acquisition of tenure by employees deserves to
be struck down for being contrary to law, morals, good customs, public order and public policy.
EGI v. ANDO, JR.
E. GANZON, INC. (EGI) and EULALIO GANZON, Petitioners vs. FORTUNATO B. ANDO, JR.,
Respondent
G.R. No. 214183
February 20, 2017

Facts:

On May 16, 2011, respondent Fortunato B. Ando, Jr. (Ando) filed a complaint against petitioner
E. Ganzon, Inc. (EGI) and its President, Eulalio Ganzon, for illegal dismissal and money claims
for: underpayment of salary, overtime pay, and 13th month pay; non-payment of holiday pay
and service incentive leave; illegal deduction; and attorneys fees. 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.

On the other hand, EGI countered his contention 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, 20107and
from January 3, 2011 to February 28, 20118 as well as in EGI-West Insula Project in Quezon
City, 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.

The Labor Arbiter declared Ando a project employee of EGI but granted some of his money
claims. Both parties elevated the case to the NLRC, which dismissed the appeals filed and
affirmed in toto the Decision of the Labor Arbiter. Ando filed a motion for reconsideration, but it
was denied. He then filed a Rule 65 petition before the CA, which granted the same annuling
the assailed NLRC resolutions dated May 25, 2012 and July 17, 2012, . EGI's motion for
reconsideration was denied.

Issue:

Whether or not respondent Fortunato B. Ando, Jr., is a regular or a project worker of E.

GANZON, INC., (EIG).
Ruling:

Yes, respondent Fortunato B. Ando, Jr., is a project worker of E. GANZON, INC., (EIG). In the
case at bar, The Court held that the CA erred in ruling that the NLRC gravely abused its
discretion when it sustained the Labor Arbiter's finding that Ando is not a regular employee but a
project employee of EGI.

The terms regular, project, seasonal and casual employment are taken from Article 280 of the
Labor Code, as amended. Under Art. 280, project employment is one which "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." To be considered as project-based, the employer
has the burden of proof to show that: (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 the
employee was engaged for such project or undertaking. It must be proved that the particular
work/service to be performed as well as its duration are defined in the employment agreement
and made clear to the employee who was informed thereof at the time of hiring.

As the assigned project or phase begins and ends at determined or determinable times, the
services of the project employee may be lawfully terminated at its completion. In this case, the
three project employment contracts signed by Ando explicitly stipulated the agreement "to
engage [his] services as a Project Worker" and that:
5. [His] services with the Project will end upon completion of the phase of work for which [he
was] hired for and is tentatively set on (written date). However, this could be extended or
shortened depending on the work phasing.

Further, Ando was adequately notified of his employment status at the time his services were
engaged by EGI for its 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 carpenter
does not suffice.

There was no attempt to frustrate Ando's security of tenure. His employment was for a specific
project or undertaking because 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 permanent but coterminous with the projects to which they are assigned
and from whose payrolls they are paid. It would be extremely burdensome for EGI as an
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.

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. Such 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.

Therefore, the petition is granted and the February 28, 2014 Decision and September 4, 2014
Resolution of the Court of Appeals are reversed and set aside. The decision of the labor arbiter
is reinstated.
FORTUNATO MERCADO (and 15 others) v. NLRC & AURORA CRUZ

FACTS:
 Petitioners: agricultural workers utilized by private respondents (Aurora Cruz, Francisco Borja, Leticia
Borja and Sto. Nino Realty Inc.) in all agricultural phases of work on the 7 ½ ha of rice land and 10 ha of
sugar land owned by the latter
 Aurora Cruz: petitioners NOT regular EEs
o Services were engaged through supply workers (mandarols [Sps Fortunato and Rosa Mercado])
to do particular phase of agricultural work necessary in rice production and/or sugar cane
production, after which they are free to render services to other farm owners
 LA: NOT regular EEs
o Nature of hiring  phases of work for definite period of time, after which services available to
other farm ownrs
o Sworn statement of one of petitioners, Fortunato Mercado Jr.: they were hired only as casuals,
on on and off basis, thus it was within prerogative of Aurora WON to take them in for further
work after phase is completed
o Real cause of complaint probably because of filing of criminal complaint for theft against
Reynaldo Mercado, son of the mandarols (petitioners are all related)
 NLRC: affirmed LA
 Petitioners: employment, even if seasonal, continued for so many years that by express provision of A280
LC, they have become regular and permanent employees
o Also invoke Policy Ins #12: what determines regularity or casualness is not emp contract, but
NATURE of job
o >1yr : regular
o They have been doing all phases of agricultural work for so many yrs, activities necessary,
desirable and indispensable to business
 Respondents: only hired as casuals
o Chief of Special Task force of NLRC Regional office had same finding – rule on findings of fact of
admin agencies
 NLRC filed separate comment
o Petitioners cannot be deemed to be regular: they fall under EXCEPTION in A280
 “except x x x where work or services to be performed is seasonal in nature and the
employment is for the duration of the season.”

ISSUE: WON petitioners are regular employees. NO. casual only

HELD:
First par of A280 LC degines regular employees: regular where activities are necessary or desirable to business,
EXCEPT for project employees
 Project employee:
1. Fixed for specific project or undertaking, termination determined @ time of engagement
2. Work SEASONAL IN NATURE, employment for duration of season
2nd par of A280 LC: casual employees who have rendered >1yr service: REGULAR
 Petitioners contend that this proviso is applicable to their case

Proviso applicable only to employees who are deemed casuals, but not to the project employees nor te
regular EEs treated in A280(1)3

3
Office of proviso: qualify or modify only phrase immediately preceding it or restrain or limit generality of clause that it immediately follows. To be
construed with regerence to imm preceding part of provision to which it is attached, not to statute itself or to other exceptions. Only exception: clear
Petitioners are SEASONAL employees
 Employment ends upon completion of project or season
 Termnation NOT illegal dismissal

Cocomangas Hotel Beach Resort v Visca (Austria-Martinez, 2008)

Facts:
Visca et al (respondents) alleged that they were regular employees of Cocomangas Hotel
(petitioner) and tasked with the maintenance and repair of resort facilities. They were informed by the
Front Desk Officer that repair has been suspended because it caused irritation to the resort’s guests. As
instructed, Visca et al did not report for work. Later, they found out that the suspension was due to
budgetary constraints and that 4 new workers were hired to do their job.
Complaints for illegal dismissal were filed. The LA found that Visca was an independent
contractor and the other respondents were hired by him. Also, there was no illegal dismissal but only
completion of projects because they were project employees.
NLRC set aside the decision and held that they were regular employees; hence, illegally
dismissed. It took into account 1) quarterly SSS reports, 2) that all were certified and commended by
owner-manager for satisfactory performance, 3) thwy were paid holiday and overtime pay, and 4) they
were employed continuously for 12 years and paid daily wages.
On MR, NLRC reversed itself and held that Visca et al were project employees.
CA reinstated the original NLRC decision and found that Visca et al were regular employees
because the Hotel failed to set specific periods when the employment relationship would be terminated;
and the repeated hiring rendered them necessary and desirable to the business.

Issue:
Whether respondents are regular or project employees? The respondents are regular employees.

Ruling:
Cocomangas changed its theory on appeal
Before the LA, Cocomangas classified Visca as an independent contractor and other as the
latter’s employees; while in the MR, it treated all respondents as project employees. Further,
Cocomangas advanced the absence of an ER-EE relationship before the LA; but invoked the termination
of the period of ER-EE relationship in their MR.
NLRC should not have considered the new thoery. When a party adopts a particular theory and
the case is tried and decided upon that theory in the court below, he will not be permitted to change his
theory on appeal.

Respondents are not project employees

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 service to be performed is seasonalin nature and the employment is
for the duration of the season. Before a project employee can be dismissed, a report must be made to the
nearest employment office of the termination of the services of the workers every time he completes a
project.
In this case, Visca et al worked continuously from 3-12 years without any mention of a “project” to
which they were specifically assigned. There is also no evidence of the project employment contracts
covering the alleged periods of employment nor the termination of such project employment. Lastly,
Cocomangas failed to file termination reports, which is an indication that Visca et al were not project
employees but regular employees.

legislative intent. P.I. 12.: Proviso in A280(2) not designed to stifle small-scale businesses nor to oppress agricultural land owners to further interests of
laborers. Only seeks to eliminate abuses of ERs against EEs
The respondents were continuously rehired by Cocomangas
An employment ceases to be coterminous with specific projects when the employee is
continuously rehired due to the demands of employer’s business and re-engaged for many more projects
without interruption.
The repeated and continuing need for respondents’ services is sufficient evidence of the
necessity, if not indispensability, of their services to Cocomangas’ resort business.

CA decision affirmed with modification that the award for backwages should be computed from
the time compensation was withheld up to the time of actual reinstatement.

Gadia v. Sykes Asia, Inc., G.R. No. 209499, January 28, 2015 
Sykes Asia is a corporation engaged in Business Process Outsourcing (BPO) which provides support to its
international clients from various sectors (e.g., technology, telecommunications, retail services) by
carrying on some of their operations, governed by service contracts that it enters with them . On
September 2, 2003,12 Alltel Communications, Inc. (Alltel), a United States-based telecommunications
firm, contracted Sykes Asia’s services to accommodate the needs and demands of Alltel clients for its
postpaid and prepaid services (Alltel Project). Thus, on different dates, Sykes Asia hired petitioners as
customer service representatives, team leaders, and trainers for the Alltel Project.

Sometime in 2009, Alltel informed Sykes that it is terminating its contract with Sykes. As a result, Sykes
sent each of the petitioners end-of-life notices informing them of their dismissal from service due to the
termination of the contract with Alltel. Aggrieved, they filed a case for illegal dismissal with the NLRC.

As a defense, Sykes alleged that the petitioners were merely project employees, which was clearly
shown by their respective employment contracts.

Issue: Whether or not the petitioners are project employees.

YES.

Article 294 (now, Article 195[280]) of the Labor Code provides that an employee is deemed regular
when he has been engaged to perform activities which are deemed usually necessary and desirable in
the usual business or trade of the employer, except (i) 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 (ii) where the work or services to be performed is seasonal in
nature and the employment if for the duration of the season.
Accordingly, the the principal test for determining whether particular employees are properly
characterised as project employees as distinguished from "regular employees," is 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. The project could either be (i) a
particular job or undertaking that is within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other undertakings of the company; or
(ii) a particular job or undertaking that is not within the regular business of the corporation. In order to
safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees
from attaining a regular status, employers claiming that their workers are project-based employees
should not only prove that the duration and scope of the employment was specified at the time they
were engaged, but also, that there was indeed a project.

Thus, for an employee to be considered project-based, the employer must show compliance with two
(2) requisites, namely that: (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.

In this case, the Court held that Sykes was able to prove both requisites.

As regards the first requisite, it held that Sykes adequately informed the petitioners of their employment
status at the time of their engagement. As was shown by their respective employment contracts, they
were hired for the Alltel Project and their positions were “project-based and as such is co-terminus to
the project.”

As regards the second requisite, it held that “the duration of the undertaking begins and ends at
determined or determinable times” which means capable of being determined or fixed. As such,
indicating in the contract that their employment is “co-termius with the project” is sufficient compliance
with this requisite. 
Hacienda Fatima v. National Federation of Sugarcane Workers – Food & General Trade

GR No. 149440, 28 Jan 2003

Facts:

When complainant union (respondents) was certified as the collective bargaining representative,
petitioners refused to sit down w/ the union for the purpose of entering into a CBA. The workers
including complainants were not given work for more than 1 month. In protest, they staged a strike w/c
was however settled upon the signing of a MOA. Subsequently, alleging that complainants failed to load
some wagons, petitioners reneged on its commitment to bargain collectively & employed all means
including the use of private armed guards to prevent the organizers from entering the premises. No
work assignments were given to complainants w/c forced the union to stage a strike. Due to conciliation
efforts by the DOLE, another MOA was signed by the parties & they met in a conciliation meeting. When
petitioners again reneged on its commitment, complainants filed a complaint. Petitioner accused
respondents of refusing to work & being choosy in the kind of work they have to perform.

The NLRC ruled that petitioners were guilty of ULP & that the respondents were illegally dismissed. The
CA affirmed that while the work of respondents was seasonal in nature, they were considered to be
merely on leave during the off-season & were therefore still employed by petitioners.

Issue:

Whether the CA erred in holding that respondents, admittedly seasonal workers, were regular
employees, contrary to the clear provisions of Article 280 of the Labor Code, which categorically state
that seasonal employees are not covered by the definition of regular employees under paragraph 1, nor
covered under paragraph 2 which refers exclusively to casual employees who have served for at least
one year

Held:
No. For respondents to be excluded from those classified as regular employees, it is not enough that
they perform work or services that are seasonal in nature. They must have also been employed only for
the duration of one season. The evidence proves the existence of the first, but not of the second,
condition. The fact that respondents repeatedly worked as sugarcane workers for petitioners for several
years is not denied by the latter. Evidently, petitioners employed respondents for more than one season.
Therefore, the general rule of regular employment is applicable.

If the employee has been performing the job for at least a year, even if the performance is not
continuous & merely intermittent, the law deems the repeated & continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only w/ respect to such activity & while such activity exists.
Seasonal workers who are called to work from time to time & are temporarily laid off during off-season
are not separated from service in said period, but merely considered on leave until re-employed (De
Leon v. NLRC)

Respondents, having performed the same tasks for petitioners every season for several years, are
considered the latter's regular employees for their respective tasks. Petitioners' eventual refusal to use
their services — even if they were ready, able and willing to perform their usual duties whenever these
were available — and hiring of other workers to perform the tasks originally assigned to respondents
amounted to illegal dismissal of the latter.

The Court finds no reason to disturb the CA's dismissal of what petitioners claim was their valid exercise
of a management prerogative. The sudden changes in work assignments reeked of bad faith. These
changes were implemented immediately after respondents had organized themselves into a union and
started demanding collective bargaining. Those who were union members were effectively deprived of
their jobs. Petitioners' move actually amounted to unjustified dismissal of respondents, in violation of
the Labor Code.

153 GAPAYAO V. FULO

G.R. No. 193493 June 13, 2013

FACTS:
Jaime Fulo died of acute renal failure secondary to 1st degree burn 70% secondary electrocution while
doing repairs at the residence and business establishment of petitioner at Sorsogon. Allegedly moved by
his Christian faith, petitioner extended some financial assistance to private respondent. The latter
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. Both parties executed a compromise agreement, whereby 40,000 pesos was
given to the surviving spouse. Thereafter, private respondent filed a claim for social security benefits
with the SSS. However, it was discovered that the deceased was not a registered member of the SSS.
Private respondent insisted that her late husband had been employed by petitioner from January 1983
up to his untimely death on November 4, 1997.

Consequently, SSS demanded that petitioner remit the social security contributions of the deceased.
Petitioner denied that the deceased was hs employee, SSS required private respondent to present
evidence to refute petitioners allegations. Instead of presenting evidence, respondent filed a petition
before the SSC. In her petition, she sough social security coverage and payment of contributions in order
to avail herself of the benefits accruing from the death of her husband.

Petitioner claims that the deceased was not a former employee, but was an independent contractor
whose tasks were not subject to petitioners control and supervision. Hence, petitioner was under no
obligation to report the formers demise to the SSS. SSS filed a petition- in- intervention before the SSC.
SSC rendered a resolution finding Jaime Fulo to be employed by respondent Gapayao and hereby
ordering them to pay the unpaid SSS contributions on behalf of deceased Jaime Fulo. SSS was also
directed by the SSC to pay Rosario Fulo the death benefit. Petitioner appealed to the CA who ruled in
favor of private respondent and affirmed the previous decision.

ISSUE: Whether there exists between the deceased Jaime Fulo and petitioner an employer-employee
relationship that would merit an award of benefits in favor of private respondent under social security
laws?

HELD: Yes. 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 re-employed 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.

The rule, however, is not absolute. 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.

The test is whether the former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of the work performed and its
relation t the scheme of the particular business in its entirety. Also if the employee has been performing
the job for at least one year, even if the performance is not continuous or merely intermittent, the law
deems that repeated and continuing need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the employment is also considered regular,
but only wit respect to such activity and while such activity exists.

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 has been
working on petitioners land by harvesting abaca and coconut, processing copra, and clearing weeds. His
employment was continuous in the sence 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 in the
usual business of petitioner.

As found by the SSC, the deceased was a construction worker in the building and helper in the bakery,
grocery, hardware, and piggery- all owned by petitioner. This fact only proves that even during the off
season, the deceased was still in the employ of petitioner.

Petitioners further alleged that he was merely a pakyaw worker, but even so, they may still be
considered as employees as long as the employers exercise control over them. The power of the
employer to control the work of the employee is considered that most significant determinant of the
existence of an employer-employee relationship. This is the so-called control test. It is not essential that
the employer actually supervise the performance of duties by the employee. It is enough that the
former has a right to wield the power.

We agree with the CA that petitioner wielded control over the deceased in the discharge of his
functions. Being the owner of the farm, petitioner necessarily had the right to review the quality of work
produced by his laborers. It matters not whether the deceased conducted his work inside petitioners
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 latte 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.

Petitioner entered into the agreement with full knowledge that he was described as the employer of the
deceased. This knowledge cannot simply be denied by a statement that petitioner was merely forced
into such an agreement.

The right of an employee to be covered by the Social Security Act is premised on the existence of an
employer-employee relationship. PETITION DENIED.
Universal Robina Sugar Milling Corp. & Rene Cabati v. Ferdinand Acibo et al.
G.R. No. 186439 Jan. 15, 2014 Brion, J.

DOCTRINE: Primary standard that determines regular employment is the reasonable connection between
the particular activity performed by the employee and the usual trade or business of the employer,
emphasizing on the necessity or desirability of the employee’s activity.

FACTS: Universal Robina is a sugar cane milling corp., Cabati is the Business Unit GM. Acibo et al. are
its employees, hired on different dates, and in different capacities (drivers, crane operators, bucket
hookers, welders, mechanics, lab attendants and aides, steel workers, laborers, carpenters and masons).
At the start of their employment, they signed one-month period employment contracts or seasonal
employment contracts. Universal Robina repeatedly hired Acibo et al. to perform the same duties, and
each time required them to sign new employment contracts for the same period or season.

Acibo filed complaints for regularization and entitlement to the benefits under the existing CBA with the
LA. LA dismissed, holding that they were seasonal or project workers, not regular employees. They could
not be regularized since their respective employments were coterminous with the phase of the work or
special project, ending upon completion. As such, they were not entitled to benefits under the CBA which
covered only regular employees.

On appeal to the NLRC, they were declared regular employees. The activities they were performed were
usually necessary and desirable in the usual trade or business of Universal Robina and had been
repeatedly hired for the same undertaking every season. Under Art. 295 Labor Code, they were regular
employees, hence entitled to CBA benefits.

CA affirmed. Primary standard for determining regular employment is the reasonable connection between
a particular activity performed by the employee vis-à-vis the usual trade or business of the employer. This
would be determined by considering the nature of the work performed and the relation of this work to the
business or trade of the employer in its entirety. The repeated and continuing need for these employees’
performance of the same task, regardless of whether such was continuous or intermittent, constituted
sufficient evidence of the indispensability of activity to the business.

Universal Robina never gave them opportunity to work elsewhere during the off-season, which could have
qualified them as seasonal workers. Either way, even during the off-season, seasonal workers are not
separated from the service but considered on leave until re-employed.

ISSUE: W/N Acibo et al. are regular employees – NO (but they are regular seasonal employees)

HELD: As explained by the CA, Art. 295 of the LC provides for 3 kinds of employment arrangements –
regular, project/seasonal, and casual.

Regular employment refers to that arrangement where the employee has been engaged to perform
activities necessary or desirable in the usual trade or business of the employer. Primary standard that
determines regular employment is the reasonable connection between the particular activity
performed by the employee and the usual trade or business of the employer, emphasizing on the
necessity or desirability of the employee’s activity.

Casual employment is when the engagement lasts at least one year, regardless of continuity. The
controlling test in this arrangement is the length of time during which the employee is engaged.

Project employment is an arrangement where the employment has been fixed for a specific project or
undertaking whose completion or termination has been determined at the time of the engagement of the
employee. The services of the project employees are legally and automatically terminated upon the end
or completion of the project as the employee’s services are coterminous with the project. Two
requirements are necessary to defeat the presumption of regularity of employment: a) designation
of a specific project or undertaking for which the employee is hired; and, b) clear determination of
the completion or termination of the project at the time of the employee’s engagement. Seasonal
employment is similar to project employment, lasting for the duration of the season. To exclude seasonal
employees from being classified as regular employees , the employer must show: a) the employee
performed work or services seasonal in nature ; and, b) he had been employed for the duration of
the season. When seasonal employees are continuously and repeatedly hired to perform the same tasks
for several seasons or even after the cessation of the season, this length of time may serve as a badge of
regular employment. If these workers classified as seasonal are called to work from time to time and
merely temporarily laid off during the off-season, they are not considered as separated from service, but
simply on leave until re-employed.

The indispensability or desirability of the activity performed by the employee will not preclude the parties
from entering into a valid fixed term employment agreement.

Here, the employees were made to perform various tasks that did not pertain to any specific phase of the
milling operations that would cease upon completion of a particular phase in the milling of the sugar. They
performed duties regularly and habitually needed by the company during the milling season. Loader
operators, hookers, crane operators and drivers hauled and transported sugarcane from the plantation to
the mill; lab attendants, workers and laborers milled the sugar; and welders, carpenters and utility workers
ensured smooth and continuous operation of the mill for the season.

They were also regularly and repeatedly hired for the same tasks year after year. Such regular and
repeated hiring of the same workers for two separate seasons in two different sets, set a system of
regular seasonal employment in the sugar industry and others with a similar nature of operations.
Plantation workers or mill employees did not work continuously for a whole year, but only for the duration
of the growing of the sugarcane, or for the milling season. The Court has previously settled that seasonal
workers, called to work from time to time and temporarily laid off during the off-season are not separated
from service, but considered on leave until re-employment. They are regular seasonal employees. As
such, they cannot be lumped together with the regular employees (such as the administrative or office
personnel performing their tasks the whole year, regardless of season) due to difference in the nature of
their duties and the duration of their work vis-à-vis the company’s operations.
 08 Paz v. Northern Tobacco
G.R. No. 199554 (2015)
J. Leonen / Tita K

Subject Matter: Termination

Summary:
Paz was hired by Northern Tobacco as seasonal worker for 29 years. When she reached the age of 63,
she was forced to retire. She filed a complaint for illegal dismissal and payment of retirement benefits.
The issue in this case was WON Paz was illegally dismissed and the amount of her retirement pay. The
SC ruled that since Paz did not intend to retire, she was actually illegally dismissed. The dismissal was
not based on a just and authorized cause and was not accorded due process. With that, she was
awarded a retirement pay bases on Art. 287 because there was no existing CBA. The SC also awarded a
financial assistance consistent with compassionate justice.

Doctrines:
Regular seasonal employees since they performed services necessary and indispensable to the business
for over twenty (20) years, even if their work was only during tobacco season.
Parties:
Petitioner ZENAIDA PAZ
NORTHERN TOBACCO REDRYING CO., INC., AND/OR ANGELO ANG
Respondent
(Northern Tobacco)
Facts:
Northern Tobacco, a flue-curing and redrying of tobacco leaves business, employs seasonal workers
tasked to sort, process, store and transport tobacco leaves during the tobacco season of March to
September.
Paz was hired by Northern Tobacco sometime in 1974 as a seasonal sorter, paid ₱185.00 daily. She
was regularly re-hired her every tobacco season (March to September) since then.
When Paz turned 63 years old, Northern Tobacco informed her that she was considered retired
under company policy. Northern Tobacco told her she would receive ₱12,000.00 as retirement pay.
LA
Paz filed a Complaint for illegal dismissal against Northern Tobacco. She later on amended her
complaint to include payment of retirement benefits, damages, and attorney’s fees and impleaded
Plant Manager Ang. She alleged that ₱12,000.00 seemed inadequate for her 29 years of service.
Northern Tobacco argued that Paz’s retirement pay amounted to ₱12,487.50 after multiplying her
₱185.00 daily salary by 221/2 working days in a month, for three years. This computation was based
on Article 287 of the Labor Code since there was no existing CBA between Northern Tobacco and its
workers. Art. 287 requires at least six months of service a year for that year to be considered in the
 retirement pay computation, and Paz only worked for at least six months in 1995, 1999, and 2000,
or 3 years out of the 29 years she rendered service.
LA confirmed that Paz‘s correct retirement pay of was ₱12,487.50, same as Northern Tobacco’s
computation.
NLRC
NLRC modified the LA’s Decision. NLRC ruled that Paz’s retirement pay should be computed
pursuant to RA 7641 and that all the months she was engaged to work for respondent for the last 28
years should be added and divided by six (for a fraction of six months is considered as one year) to
get the number of years for] her retirement pay. Paz was awarded financial assistance in the amount
of P60,356.25.
CA
CA agreed that a computation based on Article 287 would yield an amount of ₱12,487.50 as
retirement pay. However, CA considered such amount so meager that it could hardly support Paz
considering that she is weak and old, unable to find employment. CA deemed it appropriate to apply
the formula: One half-month pay multiplied by 29 years of service divided by two yielded
₱60,356.25 as Paz’s retirement pay. This formula was based on jurisprudence on financial assistance
(CA did not specify which case law it followed).
Issue/s:

1. Was Paz illegally dismissed? (YES)

2. How much is Paz’s retirement pay? (₱l2,487.50 as retirement pay; ₱60,356.25 as financial
assistance)

Arguments:

Petitioner argues that:

o Article 287, as amended by Republic Act No. 7641, entitles her to a retirement pay equivalent to
at least one-half month salary for every year of service, a fraction of at least 6 months being
considered as one whole year." 
o There is no legal basis that an employee should have at least worked for six (6) months for a
particular season for that season to be included in the computation of retirement pay.
o Regular seasonal employees are still considered employees during off season, and length of
service determination should be applied in retiree’s favor.

Respondent, on the other hand, contends that:

o The proviso "a fraction of at least six (6) months being considered as one (1) whole year"
appears in both Article 287 on retirement pay and Articles 283 and 284 on separation pay.
Hence, its ruling in Philippine Tobacco on computing separation pay of seasonal employees is
applicable.
o Unlike regular employees, seasonal workers like Paz can offer their services to other employers
during off-season. Thus, the six-month rule avoids the situation where seasonal workers receive
retirement pay twice — an even more favorable position compared with regular employees.

Ratio:
YES – Paz was illegally dismissed.

Regular Seasonal Employees

 Article 280 of the Labor Code identified three types of employees, namely:
(1) regular employees - those who have been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer;
(2) project employees - those whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season; and
(3) casual employees - those who are neither regular nor project employees.

 Jurisprudence such as Abasolo v. National Labor Relations Commission and Hacienda Fatima v.
National Federation of Sugarcane Workers-Food and General Trade also recognizes the status of
regular seasonal employees. In this cases, employees were hired to do seasonal work for several
years.

In Abasolo v. National Labor Relations Commission, the SC laid down the test for determining
regular employment status:
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual
trade or business of the employer.
The test is whether the former is usually necessary or desirable in the usual business or trade of
the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety.
Also if the employee has been performing the job for at least a year, even if the performance is
not continuous and merely intermittent, the law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but only with respect to such activity,
and while such activity exists.
o In this case, Northern Tobacco engaged the services of Paz as a seasonal sorter and had
been regularly rehired from 1974, until she was informed in 2003 that she was being
retired under company policy.
o The services Paz performed as a sorter were necessary and indispensable to Northern
Tobacco’s business of flue-curing and redrying tobacco leaves. She was also regularly
rehired as a sorter during the tobacco seasons for 29 years.
o Therefore, Paz was a regular seasonal employee, entitled to rights under Article 279 4
(Security of Tenure) of the Labor Code.

4
Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just
cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
Illegal dismissal and backwages
 Retirement is the result of a bilateral act of the parties, a voluntary agreement between the
employer and the employee whereby the latter, after reaching a certain age, agrees to sever his
or her employment with the former."
 Article 287, as amended, allows for optional retirement at the age of at least 60 years old.
 Consequently, if "the intent to retire is not clearly established or if the retirement is involuntary,
it is to be treated as a discharge."
o Although NLRC considered Paz’s amendment of her Complaint (for the inclusion of
retirement pay) akin to an optional retirement, the SC ruled that there was an implied
lack of intent to retire until Paz reaches the age of 65 in this case. Paz never abandoned
her argument of illegal dismissal despite the amendment of her Complaint.
o Thus, she should be considered as illegally dismissed from May 18, 2003 until she
reached the compulsory retirement age of 65 in 2005 and should be entitled to full
backwages for this period.

 An award of full backwages is inclusive of allowances and other benefits or their monetary
equivalent, from the time their actual compensation was withheld.
 Backwages, considered as actual damages, requires proof of the loss suffered.
o The Court of Appeals found "no positive proof of the total number of months that she
actually rendered work."
o Nevertheless, petitioner Paz’s daily pay of 185.00 was established.
o She also alleged that her employment periods ranged from three to seven months.
o Since the exact number of days petitioner Paz would have worked between May 18,
2003 until she would turn 65 in 2005 could not be determined with specificity, this court
thus awards full backwages in the amount of ₱22,200.00 computed by multiplying
185.00 by 20days, then by th ree months, then by two years.
Due process and nominal damages
 The Labor Code requires employers to comply with both procedural and substantive due
process in dismissing employees.
(1) if the dismissal is based on a just cause under Article 282, the employer must give the
employee two written notices and a hearing or opportunity to be heard if requested by the
employee before terminating the employment: a notice specifying the grounds for which
dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity
to be heard, a notice of the decision to dismiss; and
(2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer
must give the employee and the Department of Labor and Employment written notices 30
days prior to the effectivity of his separation.
 From the foregoing rules four possible situations may be derived:
(1) The dismissal is for a just cause The dismissal is undoubtedly valid and
under Article 282 of the Labor Code, the employer will not suffer any liability.
for an authorized cause under Article
 283, or for health reasons under Article
284, and due process was observed
(2) The dismissal is without just or Dismissal is illegal. Article 279 mandates
authorized cause but due process was that the employee is entitled to
observed reinstatement without loss of seniority
rights and other privileges and full
backwages, inclusive of allowances, and
other benefits or their monetary
equivalent computed from the time the
compensation was not paid up to the
time of actual reinstatement.
(3) The dismissal is without just or Dismissal is illegal. Article 279 mandates
authorized cause and there was no due that the employee is entitled to
process reinstatement without loss of seniority
rights and other privileges and full
backwages, inclusive of allowances, and
other benefits or their monetary
equivalent computed from the time the
compensation was not paid up to the
time of actual reinstatement.
(4) The dismissal is for just or Dismissal should be upheld. While the
authorized cause but due process was procedural infirmity cannot be cured, it
not observed should not invalidate the dismissal.
However, the employer should be held
liable for noncompliance with the
procedural requirements of due process.

o Paz’s case fall under the the third situation on illegal dismissal for having no just or
authorized cause and violation of due process.
o Northern Tobacco had considered petitioner Paz retired at the age of 63 before she
reached the compulsory age of 65, which does not fall under the just causes for
termination in Article 282 of the Labor Code, the authorized causes for termination
in Article 283, or disease as a ground for termination in Article 284.
 As regards due process, the Omnibus Rules Implementing the Labor Code provides:
Section 2. Standard of due process: requirements of notice. – In all cases of termination of
employment, the following standards of due process shall be substantially observed.
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side;
 (b) A hearing or conference during which the employee concerned, with the assistance
of counsel if the employee so desires, is given opportunity to respond to the charge,
present his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstance, grounds have been established to justify his
termination.
o There was no showing that Northern Tobacco complied with these due process
requisites.
o Thus, Paz should be awarded ₱30,000.00as nominal damages.
Retirement pay
 An employer may provide for retirement benefits in an agreement with its employees such
as in a Collective Bargaining Agreement. Otherwise, Article 287 of the Labor Code, as
amended, governs.
o Northern Tobacco failed to present a copy of a CBA on the alleged retirement policy,
SC applied Article 287 of the Labor Code, as amended by Republic Act No. 7641 5
which provides for the proper computation of retirement benefits in the absence of
a retirement plan or agreement.
o Northern Tobacco followed the formula in Article 287 and offered petitioner Paz the
amount of ₱12,487.50 as retirement pay based on the 3 years she worked for at
least six months in 1995, 1999, and 2000.
 This court in Philippine Tobacco explained the computation of separation pay as follows:
The amount of separation pay is based on two factors:
a) the amount of monthly salary and
b) the number of years of service.
Articles 283 and 284 both state in connection with separation pay that a fraction of at least
six months shall be considered one whole year. Applying this, the amount of separation pay
should be one-half their respective average monthly pay during the last season they worked
multiplied by the number of years employees actually rendered service, provided that they
worked for at least six months during a given year.
o While the present case involves retirement pay and not separation pay, Article 287
of the Labor Code on retirement pay similarly provides that "a fraction of at least six
(6) months being considered as one whole year."
o Thus, this court’s reading of this proviso in the Labor Code in Philippine Tobacco
applies in this case. An employee must have rendered at least six months in a year
for said year to be considered in the computation.
o SC now ruled that the retirement pay pursuant to Article 287 of the Labor Code was
correctly computed at 12,487.50 and was awarded to Paz.
5
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon
reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who
has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half
(1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term ‘one half (1/2) month salary’ shall mean fifteen (15) days plus one-twelfth (1/12) of
the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.
Financial assistance
 Republic Act No. 7641 is a social legislation with the purpose of providing for the retiree’s
sustenance and hopefully even comfort, when s/he no longer has the stamina to continue
earning a livelihood.
o Paz rendered almost three decades of dedicated service to petitioner, and to that,
she gave away the prime of her life. In those long years of hard work, not a single
transgression or malfeasance of any company rule or regulation was ever reported
against her. Old age and infirmity now weaken her chances of employment.
o SC agrees with the CA that Paz’s circumstances "indubitably merit equitable
concessions, via the principle of ‘compassionate justice’ for the working class."
o The award of ₱60,356.25 as financial assistance will serve its purpose in providing
petitioner Paz sustenance and comfort after her long years of service.
o
o Finally, legal interest of 6% per annum shall be imposed on the award of full
backwages beginning May 18, 2003 when petitioner Paz was deemed retired, until
2005 when she reached compulsory retirement age, in the amount of ₱2,664.00 .
Legal interest of 6% per annum shall also be imposed on the award of retirement
pay beginning 2005 until full satisfaction.
WHEREFORE, the Court of Appeals Decision is AFFIRMED with MODIFICATION in that respondent
Northern Tobacco Redrying Co., Inc. is hereby ordered to pay petitioner Zenaida Paz the following:
(1) ₱22,200.00 as full backwages;
(2) ₱30,000.00 as nominal damages for non-compliance with due process;
(3) ₱l2,487.50 as retirement pay;
(4) ₱60,356.25 as financial assistance; and
(5) ₱2,664.00 as legal interest for the award of full backwages, and legal interest of 6% per
annum for the award of retirement pay beginning 2005 until full satisfaction.
. KILU VS Drilon

FACTS
Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity) executed a three-year collective bargaining
agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and General Workers'
Organization (UKCEU-PTGWO) which expired on June 30, 1986. Within the 60-day freedom period prior to the
expiration of and during the negotiations for the renewal of the aforementioned CBA, s ome members of the
bargaining unit formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and
Nationalism- Organized Labor Association in Line Industries and Agriculture (KILUSAN-OLALIA). On April 21, 1986,
KILUSAN-OLALIA filed a petition for certification election in the Ministry of Labor and Employment (MOLE).
KIMBERLY and (UKCEU-PTGWO) did not object to the holding of a certification election but objected to the
inclusion of the so-called contractual workers whose employment with KIMBERLY was coursed through an
independent contractor, Rank Manpower Company (RANK for short), as among the qualified voters. On June 2,
1986, Med-Arbiter Bonifacio Marasigan, who was handling the certification election case, issued an order declaring
those casuals who have worked at least six (6) months as appearing in the payroll months prior to the filing of the
instant petition on April 21, 1986 as eligible to vote in the certification election. During the pre-election
conference, 64 casual workers were challenged by KIMBERLY and (UKCEU-PTGWO) on the ground that they are not
employees, of KIMBERLY but of RANK. It was agreed by all the parties that the 64 voters shall be allowed to cast
their votes but that their ballots shall be segregated and subject to challenge proceedings. On July 2, 1986,
KILUSAN-OLALIA filed with the med-arbiter a "Protest and Motion to Open and Count Challenged Votes" on the
ground that the 64 workers are employees of KIMBERLY within the meaning of Article 212(e) of the Labor Code. On
July 7, 1986, KIMBERLY filed an opposition to the protest and motion, asserting that there is no employer-
employee relationship between the casual workers and the company. On November 13, 1986, then Minister
Sanchez rendered a decision declaring that the other casual employees not performing janitorial and yard
maintenance services were deemed labor-only contractual and since labor-only contracting is prohibited, such
employees were held to have attained the status of regular employees, the regularization being effective as of the
date of the decision. On November 25, 1986, KIMBERLY filed a motion for reconsideration with respect to the
regularization of contractual workers.

ISSUE
Whether those engaged in janitorial or yard maintenance as well as the other casual employees attained
the status of regular employee on November 13, 1986.

HELD
YES. The law thus provides for two kinds of regular employees, namely: 1. those who are engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the employer; and 2. those who have rendered at least one year of
service, whether continuous or broken, with respect to the activity in which they are employed. The individual
petitioners herein who have been adjudged to be regular employees fall under the second category. These are the
mechanics, electricians, machinists machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and
masons. It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the
time of the filing of the Petition for certification election by KILUSAN-OLALIA. Owing
to their length of service with the company, these workers became regular employees, by operation of law, one
year after they were employed by KIMBERLY through RANK. While the actual regularization of these employees
entails the mechanical act of issuing regular appointment papers and compliance with such other operating
procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule
that the status of regular employment attaches to the casual worker on the day immediately after the end of his
first year of service. To rule otherwise, and to instead make their regularization dependent on the happening of
some contingency or the fulfillment of certain requirements, is to impose a burden on the employee which is not
sanctioned by law. That the first stated position is the situation contemplated and sanctioned by law is further
enhanced by the absence of a statutory limitation before regular status can be acquired by a
casual employee. The law is explicit. As long as the employee has rendered at least one year of service, he
becomes a regular employee with respect to the activity in which he is employed. The law does not provide the
qualification that the employee must first be issued a regular appointment or must first be formally declared as
such before he can acquire a regular status. Obviously, where the law does not distinguish, no distinction should
be drawn.

BRENT SCHOOL V ZAMORA

FACTS:

Alegre was an athletic director at Brent, at a yearly compensation of P20,000. His contract fixed
a specific term of 5 years for its existence, from July, 1971, to July, 1976. Subsequent subsidiary
agreements in March 1973, August 1973, and Sept. 1974 reiterated the same terms and conditions,
including the expiry date, as those contained in the original contract of July, 1971.- 3 months before the
expiration of the stipulated period, in April 1976, Alegre was given a copy of the report filed by Brent
with the Dep. of Labor advising of the termination of his services, effective July 16, 1976. The stated
ground for termination was “completion of contract, expiration of the definite period of employment.”

Alegre protested the announced termination of his employment. He argued that although his
contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary
and desirable in the usual business of his employer, and his employment had lasted for five years, he
had acquired the status of regular employee and could not be removed except for valid cause.

The employment contract of 1971 was executed when the Labor Code of the Philippines had not
yet been promulgated, which came into effect some 3 years after the perfection of the contract.

ISSUE: Whether or not the provisions of the Labor Code as amended (regarding probationary/regular
employees), have anathematized "fixed period employment" or employment for a term.

HELD:

No. Before the Labor Code, there was no doubt about the validity of term employment. It was
impliedly but clearly recognized by the Termination Pay law, RA 1052.
 The employment contract between Brent School and Alegre was executed on July 18, 1971, at a
time when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code
did not come into effect until November 1, 1974, some three years after the perfection of the
employment contract, and rights and obligations there under had arisen and been mutually observed
and enforced.

At that time, i.e., before the advent of the Labor Code, there was no doubt whatever about the
validity of term employment. It was impliedly but nonetheless clearly recognized by the Termination Pay
Law, R.A. 1052, 11 as amended by R.A. 1787. 12 Basically, this statute provided that—

In cases of employment, without a definite period, in a commercial, industrial, or

agricultural establishment or enterprise, the employer or the employee may terminate at
any time the employment with just cause; or without just cause in the case of an
employee by serving written notice on the employer at least one month in advance, or in
the case of an employer, by serving such notice to the employee at least one month in
advance or one-half month for every year of service of the employee, whichever is
longer, a fraction of at least six months being considered as one whole year.

The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages.

The employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.

There was, to repeat, clear albeit implied recognition of the licitness of term employment. RA
1787 also enumerated what it considered to be just causes for terminating an employment without a
definite period, either by the employer or by the employee without incurring any liability therefor.

Accordingly, and since the entire purpose behind the development of legislation culminating in
the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed to refer to the substantive evil that the
Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should
have no application to instances where a fixed period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter. Unless thus limited in its
purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences.
FUJI TELEVISION NETWORK, INC. VS. ARLENE S. ESPIRITU

G.R. NO. 204944-45 DECEMBER 3, 2014

FACTS: Arlene S. Espiritu (Arlene) was engaged by Fuji Television Network, Inc. (Fuji) as a news
correspondent/producer tasked to report Philippine news to Fuji through its Manila Bureau field office. The
employment contract was initially for one year, but was successively renewed on a yearly basis with salary
adjustments upon every renewal.

In January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her condition, and the Chief of
News Agency of Fuji, Yoshiki Aoki, informed the former that the company had a problem with renewing her
contract considering her condition. Arlene insisted she was still fit to work as certified by her attending physician.

After a series of verbal and written communications, Arlene and Fuji signed a non-renewal contract. In
consideration thereof, Arlene acknowledged the receipt of the total amount of her salary from March-May 2009,
year-end bonus, mid-year bonus and separation pay. However, Arlene executed the non-renewal contract under
protest.

Arlene filed a complaint for illegal dismissal with the NCR Arbitration Branch of the NLRC, alleging that she was
forced to sign the non-renewal contract after Fuji came to know of her illness. She also alleged that Fuji withheld her
salaries and other benefits when she refused to sign, and that she was left with no other recourse but to sign the non-
renewal contract to get her salaries.
ISSUES:

1. Was Arlene an independent contractor?

2. Was Arlene a regular employee?
3. Was Arlene illegally dismissed? (discussion on security of tenure)
4. Did the Court of Appeals correctly awarded reinstatement, damages and attorney’s fees?

RULING:

1. Arlene was not an independent contractor.

Fuji alleged that Arlene was an independent contractor citing the Sonza case. She was hired because of her skills.
Her salary was higher than the normal rate. She had the power to bargain with her employer. Her contract was for a
fixed term. It also stated that Arlene was not forced to sign the non-renewal agreement, considering that she sent an
email with another version of her non-renewal agreement.

Arlene argued (1) that she was a regular employee because Fuji had control and supervision over her work; (2) that
she based her work on instructions from Fuji; (3) that the successive renewal of her contracts for four years indicated
that her work was necessary and desirable; (4) that the payment of separation pay indicated that she was a regular
employee; (5) that the Sonza case is not applicable because she was a plain reporter for Fuji; (6) that her illness was
not a ground for her dismissal; (7) that she signed the non-renewal agreement because she was not in a position to
reject the same.

Distinctions among fixed-term employees, independent contractors, and regular employees

I. Fixed Term Employment

1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force,
duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating
his consent; or

2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms
with no moral dominance exercised by the former or the latter.

These indications, which must be read together, make the Brent doctrine applicable only in a few special cases
wherein the employer and employee are on more or less in equal footing in entering into the contract . The reason for
this is evident: when a prospective employee, on account of special skills or market forces, is in a position to make
demands upon the prospective employer, such prospective employee needs less protection than the ordinary worker.
Lesser limitations on the parties’ freedom of contract are thus required for the protection of the
employee.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)
 II. Independent Contractor

One who carries on a distinct and independent business and undertakes to perform the job, work, or service on its
own account and under one’s own responsibility according to one’s own manner and method, free from the control
and direction of the principal in all matters connected with the performance of the work except as to the results
thereof.

No employer-employee relationship exists between the independent contractors and their principals.

Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the
performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be
paid in accordance with the provisions of this Code.

XXX

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of
labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make
appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these
types of contracting and determine who among the parties involved shall be considered the employer for purposes of
this Code, to prevent any violation or circumvention of any provision of this Code.

There is “labor-only” contracting where the person supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly related to the principal business of
such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer
who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by
him.

Department Order No. 18-A, Series of 2011, Section 3

© . . . 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.

III. 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
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.

The level of protection to labor should vary from case to caese. 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.

The level of protection to labor must be determined on the basis of the nature of the work, qualifications of the
employee, and other relevant circumstances such as but not limited to educational attainment and other special
qualifications.

Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is contradictory.
Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an
employer-employee relationship exists. The test in this kind of contract is not the necessity and desirability of the
employee’s activities, “but the day certain agreed upon by the parties for the commencement and termination of the
employment relationship.” For regular employees, the necessity and desirability of their work in the usual course of
the employer’s business are the determining factors. On the other hand, independent contractors do not have
employer-employee relationships with their principals.

To determine the status of employment, the existence of employer-employee relationship must first be settled with
the use of the four-fold test, especially the qualifications for the power to control.
The distinction is in this guise:

Rules that merely serve as guidelines towards the achievement of a mutually desired result without dictating the
means or methods to be employed creates no employer-employee relationship; whereas those that control or fix the
methodology and bind or restrict the party hired to the use of such means creates the relationship.

In appliacation, Arlene was hired by Fuji as a news producer, but there was no evidence that she was hired for her
unique skills that would distinguish her from ordinary employees. Her monthly salary appeared to be a substantial
sum. Fuji had the power to dismiss Arlene, as provided for in her employment contract. The contract also indicated
that Fuji had control over her work as she was rquired to report for 8 hours from Monday to Friday. Fuji gave her
instructions on what to report and even her mode of transportation in carrying out her functions was controlled.

Therefore, Arlene could not be an independent contractor.

2. Arlene was a regular employee with a fixed-term contract.

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.

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.

The successive renewals of her contract indicated the necessity and desirability of her work in the usual course of
Fuji’s business. Because of this, Arlene had become a regular employee with the right to security of tenure.

Arlene’s contract indicating a fixed term did not automatically mean that she could never be a regular employee. For
as long as it was the employee who requested, or bargained, that the contract have a “definite date of termination,”
or that the fixed-term contract be freely entered into by the employer and the employee, then the validity of the
fixed-term contract will be upheld.

3. Arlene was illegally dismissed.

As a regular employee, Arlene was entitled to security of tenure under Article 279 of the Labor Code and could be
dismissed only for just or authorized causaes and after observance of due process.
The expiration of the contract does not negate the finding of illegal dismissal. The manner by which Fuji informed
Arlene of non-renewal through email a month after she informed Fuji of her illness is tantamount to constructive
dismissal. Further, Arlene was asked to sign a letter of resignation prepared by Fuji. The existence of a fixed-term
contract should not mean that there can be no illegal dismissal. Due process must still be observed.

Moreoever, disease as a ground for termination under Article 284 of the Labor Code and Book VI, Rule 1, Section 8
of the Omnibus Rules Implementing the Labor Code require two requirements to be complied with: (1) the
employee’s disease cannot be cured within six months and his continued employment is prohibited by law or
prejudicial to his health as well as to the health of his co-employees; and (2) certification issued by a competent
public health authority that even with proper medical treatment, the disease cannot be cured within six months. The
burden of proving compliance with these requisites is on the employer. Non-compliance leads to illegal dismissal.
blesvirtualLawlibrary

Arlene was not accorded due process. After informing her employer of her lung cancer, she was not given the
chance to present medical certificates. Fuji immediately concluded that Arlene could no longer perform her duties
because of chemotherapy. Neither did it suggest for her to take a leave. It did not present any certificate from a
competent public health authority.

Case Digest: Samonte et al. v. La Salle

Greenhills, Inc.
G.R. No. 199683
February 10, 2016
PEREZ, J.:
Facts:
Petitioners are medical professional hired by LSGI under a uniform one-page Contract of
Retainer for the period of a specific academic calendar beginning in June of 1989 and the
succeeding 15 years and terminating in March of the following year when the school year ends.
The contract specifically provides that the retainer is only temporary in character and exclusively
limited to the undertaking and/or to the job/task assigned to the retainer within the said
undertaking. Furthermore, at any time prior to the expiration or completion date/s, LSGI may
upon written notice to the retainers, terminate the contract should the retainer fail in anyway to
perform his assigned job or task to the satisfaction of the school of for any just cause.

Accordingly, after 15 consecutive years of renewal each academic year, on the last day of the
15th year in 2004, the school (LSGI) informed the petitioner that their contracts will no longer be
renewed for the following school year.

When petitioners’ requests for payment of their separation pay were denied, they filed a
complaint for illegal dismissal with prayer for separation pay, damages and attorneys’ fees. They
alleged that they were regular employees because received regular benefits, bonuses & more,
that they were subjected to the school’s administrative and disciplinary rules and regulations.

On the other hand, LSGI posited that petitioners were independent contractors retained by LSGI
by reason of their medical skills and expertise to provide ancillary medical and dental services to
both students and faculty. More importantly, petitioners were paid retainer fees and not regular
salaries and whose performance is not subject to the control of the school.

The Labor Arbiter dismissed the complaint and ruled that the petitioners were independent
contractors but on the ground of compassionate social justice, awarded separation pay. Both
parties appealed the decision to the NLRC. The NLRC disagreed with the appealed decision,
finding petitioners as fixed term employees according to the Contract of Retainer signed by the
parties. In a petition for certiorari, the court of appeals affirmed the NLRC decision.

Issue:
Whether or not petitioners were regular employees who may only be dismissed for just and
authorized causes.

Ruling:
The petitioners attained retained regular employment.

A fixed-term employment is allowable under the Labor Code wherein the parties agree upon the
day certain for the commencement and termination of their employment relationship. A day
certain being understood to be "that which must necessarily come, although it may not be known
when. Furthermore, the term must be voluntarily and knowingly entered into by the parties who
must have dealt with each other on equal terms not one exercising moral dominance over the
other.

Further, a fixed-term contract is an employment contract, the repeated renewals of which make
for a regular employment. In Fuji Network Television v. Espiritu, the court noted that Fuji's
argument that Espiritu was an independent contractor under a fixed-term contract is
contradictory where employees under fixed-term contracts cannot be independent contractors
because in fixed-term contracts, an employer-employee relationship exists.

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. 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. 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."

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 back wages.
POSEIDON FISHING/TERRY DE JESUS V. NLRC,
G.R. NO. 168052, FEBRUARY 20. 2006

FACTS: Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry with Terry de Jesus as
the manager.
Jimmy S. Estoquia was employed as Chief Mate in January 1988 and after five years. The contract with Eustoqia per the
"Kasunduan", there was a provision stating that he was being employed only on a ‘’por viaje’’ basis and that his
employment would be terminated at the end of the trip for which he was being hired.

He was promoted to Boat Captain but was later demoted to Radio Operator. As a Radio Operator, he monitored the daily
activities in their office and recorded in the duty logbook the names of the callers and time of their calls.

On 3 July 2000, Estoquia failed to record a 7:25 a.m. call in one of the logbooks. When he reviewed the two logbooks, he
noticed that he was not able to record the said call in one of the logbooks so he immediately recorded the 7:25 a.m. call
after the 7:30 a.m. entry.

In the morning of 4 July 2000, petitioner detected the error in the entry in the logbook. Estoquia was asked to prepare an
incident report to explain the reason for the said oversight. On the same day, Poseidon’s secretary summoned Estoquia to
get his separation pay

Estoquia filed a complaint for illegal dismissal with the Labor Arbiter.

Poseidon and Terry de Jesus asserted that Estoquia was a contractual or a casual employee 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.

The Labor Arbiter decided in favor of private respondent. The NLRC affirmed the decision of the Labor Arbiter with the
modification. Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse of discretion, but
the Court of Appeals found none.

ISSUE: Is Eustoqia a regular employee of Poseidon?

RULING: Yes, Eustoquia was 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. And, if the employee has been
performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that
activity to the business.

Article 280 draws a line between regular and casual employment. The provision enumerates two (2) kinds of employees,
the regular employees and the casual employees. The regular employees consist of the following:

1) those 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 such service is continuous or broken.

In a span of 12 years, Eustoquia worked for petitioner 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. Such being the scenario involved, Eustoquia is considered a regular
employee.

There is nothing in the contract that says complainant is a casual, seasonal or a project worker. The date July 1 to 31, 1998
under the heading "Pagdating" had been placed there merely to indicate the possible date of arrival of the vessel and is
not an indication of the status of employment of the crew of the vessel.
In the case at bar, the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart
the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are
testament to the necessity and indispensability of such services to petitioners’ business or trade.

In this case, Eustoquia was never informed that he will be assigned to a "specific project or undertaking” at the time of
their engagement.Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired
by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to
the usual business or trade of the employer, then the employee must be deemed a regular employee.

Eustoquia’s functions were usually necessary or desirable in the usual business or trade of petitioner fishing company and
he was hired continuously for 12 years for the same nature of tasks. Hence, he was of regular employee.