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G.R. No.

70705 August 21, 1989


MOISES DE LEON, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION an LA TONDE!"A
INC., respondents.
#ERNAN, C.J.:
This petition for certiorari seeks to annul and set aside: (1) the majority decision dated
January 28, 18! of the "ational #a$or %elations &ommission 'irst (ivision in &ase
"o. "&%) 8*!++)8*, ,hich reversed the -rder dated .pril +,18/ of #a$or .r$iter
0ienvenido 1. 2ernande3 directin4 the reinstatement of petitioner 5oises de #eon $y
private respondent #a Tonde67a 8nc. ,ith payment of $ack,a4es and other $enefits due
a re4ular employee7 and, (2) the %esolution dated 5arch 21, 18! denyin4 petitioner9s
motion for reconsideration.
8t appears that petitioner ,as employed $y private respondent #a Tonde67a 8nc. on
(ecem$er 11, 181, at the 5aintenance 1ection of its :n4ineerin4 (epartment in
Tondo, 5anila.
1
2is ,ork consisted mainly of paintin4 company $uildin4 and
e;uipment, and other odd jo$s relatin4 to maintenance. 2e ,as paid on a daily $asis
throu4h petty cash vouchers.
8n the early part of January, 18*, after a service of more than one (1) year, petitioner
re;uested from respondent company that lie $e included in the payroll of re4ular
,orkers, instead of $ein4 paid throu4h petty cash vouchers. <rivate respondent9s
response to this re;uest ,as to dismiss petitioner from his employment on January 1+,
18*. 2avin4 $een refused reinstatement despite repeated demands, petitioner filed a
complaint for ille4al dismissal, reinstatement and payment of $ack,a4es $efore the
-ffice of the #a$or .r$iter of the then 5inistry no, (epartment of #a$or and
:mployment.
<etitioner alle4ed that he ,as dismissed follo,in4 his re;uest to $e treated as a re4ular
employee7 that his ,ork consisted of paintin4 company $uildin4s and maintenance
chores like cleanin4 and operatin4 company e;uipment, assistin4 :miliano Tan;ue Jr.,
a re4ular maintenance man7 and that ,eeks after his dismissal, he ,as re)hired $y the
respondent company indirectly throu4h the =itas)5a4saysay =illa4e #ivelihood &ouncil,
a la$or a4ency of respondent company, and ,as made to perform the tasks ,hich he
used to do. :miliano Tan;ue Jr. corro$orated these averments of petitioner in his
affidavit.
2
-n the other hand, private respondent claimed that petitioner ,as not a re4ular
employee $ut only a casual ,orker hired alle4edly only to paint a certain $uildin4 in the
company premises, and that his ,ork as a painter terminated upon the completion of
the paintin4 jo$.
-n .pril +, 18/, #a$or .r$iter 0ienvenido 1. 2ernande3 rendered a decision
$
findin4
the complaint meritorious and the dismissal ille4al7 and orderin4 the respondent
company to reinstate petitioner ,ith full $ack,a4es and other $enefits. #a$or .r$iter
2ernande3 ruled that petitioner ,as not a mere casual employee as asserted $y private
respondent $ut a re4ular employee. 2e concluded that the dismissal of petitioner from
the service ,as prompted $y his re;uest to $e included in the list of re4ular employees
and to $e paid throu4h the payroll and is, therefore, an attempt to circumvent the le4al
o$li4ations of an employer to,ards a re4ular employee.
#a$or .r$iter 2ernande3 found as follo,s:
.fter a thorou4h e>amination of the records of the case and evaluation of
the evidence and versions of the parties, this -ffice finds and so holds that
the dismissal of complainant is ille4al. (espite the impressive attempt of
respondents to sho, that the complainant ,as hired as casual and for the
,ork on particular project, that is the repaintin4 of 5ama %osa 0uildin4,
,hich particular ,ork of paintin4 and repaintin4 is not pursuant to the
re4ular $usiness of the company, accordin4 to its theory, ,e find
differently. &omplainant9s $ein4 hired on casual $asis did not dissuade
from the cold fact that such paintin4 of the $uildin4 and the paintin4 and
repaintin4 of the e;uipment and tools and other thin4s $elon4in4 to the
company and the odd jo$s assi4ned to him to $e performed ,hen he had
no paintin4 and repaintin4 ,orks related to maintenance as a
maintenance man are necessary and desira$le to the $etter operation of
the $usiness company. %espondent did not even attempt to deny and
refute the corro$oratin4 statements of :miliano Tan;ue Jr., ,ho ,as
re4ularly employed $y it as a maintenance man doin4 same jo$s not only
of paintin4 and repaintin4 of $uildin4, e;uipment and tools and
machineries or machines if the company $ut also other odd jo$s in the
:n4ineerin4 and 5aintenance (epartment that complainant 5oises de
#eon did perform the same odd jo$s and assi4nments as ,ere assi4ned
to him durin4 the period de #eon ,as employed for more than one year
continuously $y 8d respondent company. ?e find no reason not to 4ive
credit and ,ei4ht to the affidavit and statement made therein $y :miliano
Tan;ue Jr. This stron4ly confirms that complainant did the ,ork pertainin4
to the re4ular $usiness in ,hich the company had $een or4ani3ed.
%espondent cannot $e permitted to circumvent the la, on security of
tenure $y considerin4 complainant as a casual ,orker on daily rate $asis
and after ,orkin4 for a period that has entitled him to $e re4ulari3ed that
he ,ould $e automatically terminated. ... .
%
-n appeal, ho,ever, the a$ove decision of the #a$or .r$iter ,as reversed $y the 'irst
(ivision of the "ational #a$or %elations &ommission $y virtue of the votes of t,o
mem$ers
5
,hich constituted a majority. &ommissioner @eronimo A. Auadra dissented,
votin4 Bfor the affirmation of the ,ell)reasoned decision of the #a$or .r$iter
$elo,.B
&
The motion for reconsideration ,as denied. 2ence, this recourse.
<etitioner asserts that the respondent &ommission erred and 4ravely a$use its
discretion in reversin4 the -rder of the #a$or .r$iter in vie, of the uncontroverted fact
that the tasks he performed included not only paintin4 $ut also other maintenance ,ork
,hich are usually necessary or desira$le in the usual $usiness of private respondent:
hence, the reversal violates the &onstitutional and statutory provisions for the protection
of la$or.
The private respondent, as e>pected, maintains the opposite vie, and ar4ues that
petitioner ,as hired only as a painter to repaint specifically the 5ama %osa $uildin4 at
its Tondo compound, ,hich paintin4 ,ork is not part of their main $usiness7 that at the
time of his en4a4ement, it ,as made clear to him that he ,ould $e so en4a4ed on a
casual $asis, so much so that he ,as not re;uired to accomplish an application form or
to comply ,ith the usual re;uisites for employment7 and that, in fact, petitioner ,as
never paid his salary throu4h the re4ular payroll $ut al,ays throu4h petty cash
vouchers.
7
The 1olicitor @eneral, in his &omment, recommends that the petition $e 4iven due
course in vie, of the evidence on record supportin4 petitioner9s contention that his ,ork
,as re4ular in nature. 8n his vie,, the dismissal of petitioner after he demanded to $e
re4ulari3ed ,as a su$terfu4e to circumvent the la, on re4ular employment. 2e further
recommends that the ;uestioned decision and resolution of respondent &ommission $e
annulled and the -rder of the #a$or .r$iter directin4 the reinstatement of petitioner ,ith
payment of $ack,a4es and other $enefits $e upheld.
8
.fter a careful revie, of the records of this case, the &ourt finds merit in the petition as
?e sustain the position of the 1olicitor @eneral that the reversal of the decision of the
#a$or .r$iter $y the respondent &ommission ,as erroneous.
The la, on the matter is .rticle 281 of the #a$or &ode ,hich defines re4ular and casual
employment as follo,s:
.rt. 281. %e4ular and casual employment. The provisions of a ,ritten
a4reement to the contrary not,ithstandin4 and re4ardless of the oral
a4reements of the parties, an employment shall $e deemed to $e re4ular
,here the employee has $een en4a4ed to perform activities ,hich are
usually necessary or desira$le in the usual $usiness or trade of the
employer, e>cept ,here the employment has $een fi>ed for a specific
project or undertakin4 the completion or termination of ,hich has $een
determined at the time of the en4a4ement of the employee or ,here the
,ork or services to $e performed is seasonal in nature and the
employment is for the duration of the season.
.n employment shall $e deemed to $e casual if it is not covered $y the
precedin4 para4raph: <rovided, That any employee ,ho has rendered at
least one year of service, ,hether such service is continuous or $roken,
shall $e considered a re4ular employee ,ith respect to the activity in
,hich he is employed and his employment shall continue ,hile such
actually e>ists.
This provision reinforces the &onstitutional mandate to protect the interest of la$or. 8ts
lan4ua4e evidently manifests the intent to safe4uard the tenurial interest of the ,orker
,ho may $e denied the ri4hts and $enefits due a re4ular employee $y virtue of lopsided
a4reements ,ith the economically po,erful employer ,ho can maneuver to keep an
employee on a casual status for as lon4 as convenient. Thus, contrary a4reements
not,ithstandin4, an employment is deemed re4ular ,hen the activities performed $y the
employee are usually necessary or desira$le in the usual $usiness or trade of the
employer. "ot considered re4ular are the so)called Bproject employmentB the completion
or termination of ,hich is more or less determina$le at the time of employment, such as
those employed in connection ,ith a particular construction project
9
and seasonal
employment ,hich $y its nature is only desira$le for a limited period of time. 2o,ever,
any employee ,ho has rendered at least one year of service, ,hether continuous or
intermittent, is deemed re4ular ,ith respect to the activity he performed and ,hile such
activity actually e>ists.
The primary standard, therefore, of determinin4 a re4ular employment is the reasona$le
connection $et,een the particular activity performed $y the employee in relation to the
usual $usiness or trade of the employer. The test is ,hether the former is usually
necessary or desira$le in the usual $usiness or trade of the employer. The connection
can $e determined $y considerin4 the nature of the ,ork performed and its relation to
the scheme of the particular $usiness or trade in its entirety. .lso, if the employee has
$een performin4 the jo$ for at least one year, even if the performance is not continuous
or merely intermittent, the la, deems the repeated and continuin4 need for its
performance as sufficient evidence of the necessity if not indispensa$ility of that activity
to the $usiness. 2ence, the employment is also considered re4ular, $ut only ,ith
respect to such activity and ,hile such activity e>ists.
8n the case at $ar, the respondent company, ,hich is en4a4ed in the $usiness of
manufacture and distillery of ,ines and li;uors, claims that petitioner ,as contracted on
a casual $asis specifically to paint a certain company $uildin4 and that its completion
rendered petitioner9s employment terminated. This may have $een true at the
$e4innin4, and had it $een sho,n that petitioner9s activity ,as e>clusively limited to
paintin4 that certain $uildin4, respondent company9s theory of casual employment ,ould
have $een ,orthy of consideration.
2o,ever, durin4 petitioner9s period of employment, the records reveal that the tasks
assi4ned to him included not only paintin4 of company $uildin4s, e;uipment and tools
$ut also cleanin4 and oilin4 machines, even operatin4 a drillin4 machine, and other odd
jo$s assi4ned to him ,hen he had no paintin4 jo$. . re4ular employee of respondent
company, :miliano Tan;ue Jr., attested in his affidavit that petitioner ,orked ,ith him as
a maintenance man ,hen there ,as no paintin4 jo$.
8t is note,orthy that, as ,isely o$served $y the #a$or .r$iter, the respondent company
did not even attempt to ne4ate the a$ove averments of petitioner and his co) employee.
8ndeed, the respondent company did not only fail to dispute this vital point, it even ,ent
further and confirmed its veracity ,hen it e>pressly admitted in its comment that, BThe
main $ulk of ,ork andCor activities assi4ned to petitioner ,as paintin4 and other related
activities. -ccasionally, he ,as instructed to do other odd thin4s in connection ,ith
maintenance ,hile he ,as ,aitin4 for materials he ,ould need in his jo$ or ,hen he
had finished early one assi4ned to him.
10
The respondent &ommission, in reversin4 the findin4s of the #a$or .r$iter reasoned
that petitioner9s jo$ cannot $e considered as necessary or desira$le in the usual
$usiness or trade of the employer $ecause, B<aintin4 the $usiness or factory $uildin4 is
not a part of the respondent9s manufacturin4 or distillin4 process of ,ines and li;uors.
11
The fallacy of the reasonin4 is readily apparent in vie, of the admitted fact that
petitioner9s activities included not only paintin4 $ut other maintenance ,ork as ,ell, a
fact ,hich even the respondent &ommission, like the private respondent, also e>pressly
reco4ni3ed ,hen it stated in its decision that, 9.lthou4h complainant9s (petitioner) ,ork
,as mainly paintin4, he ,as occasionally asked to do other odd jo$s in connection ,ith
maintenance ,ork.
12
8t misleadin4ly assumed that all the petitioner did durin4 his more
than one year of employment ,as to paint a certain $uildin4 of the respondent
company, ,hereas it is admitted that he ,as 4iven other assi4nments relatin4 to
maintenance ,ork $esides paintin4 company $uildin4 and e;uipment.
8t is self)servin4, to say the least, to isolate petitioner9s paintin4 jo$ to justify the
proposition of casual employment and conveniently disre4ard the other maintenance
activities of petitioner ,hich ,ere assi4ned $y the respondent company ,hen he ,as
not paintin4. The la, demands that the nature and entirety of the activities performed $y
the employee $e considered. 8n the case of petitioner, the paintin4 and maintenance
,ork 4iven him manifest a treatment consistent ,ith a maintenance man and not just a
painter, for if his jo$ ,as truly only to paint a $uildin4 there ,ould have $een no $asis for
4ivin4 him other ,ork assi4nments 8n $et,een paintin4 activities.
8t is not tena$le to ar4ue that the paintin4 and maintenance ,ork of petitioner are not
necessary in respondent9s $usiness of manufacturin4 li;uors and ,ines, just as it
cannot $e said that only those ,ho are directly involved in the process of producin4
,ines and li;uors may $e considered as necessary employees. -ther,ise, there ,ould
have $een no need for the re4ular 5aintenance 1ection of respondent company9s
:n4ineerin4 (epartment, manned $y re4ular employees like :miliano Tan;ue Jr., ,hom
petitioner often ,orked ,ith.
'urthermore, the petitioner performed his ,ork of paintin4 and maintenance activities
durin4 his employment in respondent9s $usiness ,hich lasted for more than one year,
until early January, 18* ,hen he demanded to $e re4ulari3ed and ,as su$se;uently
dismissed. &ertainly, $y this fact alone he is entitled $y la, to $e considered a re4ular
employee. .nd considerin4 further that ,eeks after his dismissal, petitioner ,as rehired
$y the company throu4h a la$or a4ency and ,as returned to his post in the
5aintenance 1ection and made to perform the same activities that he used to do, it
cannot $e denied that as activities as a re4ular painter and maintenance man still e>ist.
8t is of no moment that petitioner ,as told ,hen he ,as hired that his employment ,ould
only $e casual, that he ,as paid throu4h cash vouchers, and that he did not comply ,ith
re4ular employment procedure. <recisely, the la, overrides such conditions ,hich are
prejudicial to the interest of the ,orker ,hose ,eak $ar4ainin4 position needs the
support of the 1tate. That determines ,hether a certain employment is re4ular or casual
is not the ,ill and ,ord of the employer, to ,hich the desperate ,orker often accedes,
much less the procedure of hirin4 the employee or the manner of payin4 his salary. 8t is
the nature of the activities performed in relation to the particular $usiness or trade
considerin4 all circumstances, and in some cases the len4th of time of its performance
and its continued e>istence.
'inally, considerin4 its task to 4ive life and spirit to the &onstitutional mandate for the
protection of la$or, to enforce and uphold our la$or la,s ,hich must $e interpreted
li$erally in favor of the ,orker in case of dou$t, the &ourt cannot understand the failure
of the respondent &ommission to perceive the o$vious attempt on the part of the
respondent company to evade its o$li4ations to petitioner $y dismissin4 the latter days
after he asked to $e treated as a re4ular ,orker on the flimsy prete>t that his paintin4
,ork ,as suddenly finished only to rehire him indirectly ,eeks after his dismissal and
assi4n him to perform the same tasks he used to perform. The devious dismissal is too
o$vious to escape notice. The ine>plica$le disre4ard of esta$lished and decisive facts
,hich the &ommission itself admitted to $e so, in justifyin4 a conclusion adverse to the
a44rieved la$orer clearly spells a 4rave a$use of discretion amountin4 to lack of
jurisdiction.
?2:%:'-%:, the petition is @%."T:(. The assailed (ecision and %esolution of the
"ational #a$or %elations &ommission are here$y annulled and set aside. The -rder of
#a$or ar$iter 0ienvenido 1. 2ernande3 dated .pril +, 18/ is reinstated. <rivate
respondent is ordered to reinstate petitioner as a re4ular maintenance man and to pay
petitioner 1) $ack,a4es e;uivalent to three years from January 1+,18*, in accordance
,ith the .luminum ?a4e -rders in effect for the period covered, 2) :&-#. *) 1*th
5onth <ay, /) and other $enefits under pertinent &ollective 0ar4ainin4 .4reements, if
any.
1- -%(:%:(.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
G.R. Nos. 82&%$'&7 August $0, 1990
()ILI((INE GEOT)ERMAL, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, TEOD*LO C. C*EBILLAS,
ARMANDO CILOT, MARIANO COR*LLO, +OLANDA CAL, E#REN CLERIGO,
#ELICISSIMO ,ARGAS, -t a.., respondents.
(ARAS, J.:
This is a petition for revie, on certiorari seekin4 to annul and set aside7 (a) the
%esolution of the "ational #a$or %elations &ommission / dated "ovem$er , 18D in
#a$or &ases "os. %.0)/E*)8! to /2D)8! and %.0 "os. E*2)8! to E**)8! entitled
Teodulo &. &ue$illas, et. al. vs. <hilippine @eothermal, 8nc. et al. and :fren ". &leri4o
et. al. vs. <hil. @eothermal 8nc. respectively ,hich declared respondent employees as
re4ular and permanent employees of petitioner company and ordered their
reinstatement and ($) the %esolution dated 5arch ,188 ,hich denied the 5otion for
%econsideration.
The facts of the case are as follo,s:
<etitioner <hilippine @eothermal, 8nc. is a F.1. corporation en4a4ed in the e>ploration
and development of 4eothermal ener4y resources as an alternative source of ener4y. 8t
is duly authori3ed to en4a4e in $usiness in the <hilippines and at present is the prime
contractor of the "ational <o,er &orporation at the latter9s operation of the Ti,i, .l$ay
and the 5akilin4)0anaha, @eothermal <rojects.
1
<rivate respondents, on the other hand, are employees of herein petitioner occupyin4
various positions ran4in4 from carpenter to &lerk 88 ,ho had ,orked ,ith petitioner
company under individual contracts, cate4ori3ed as contractual employment, for a
period ran4in4 from fifteen (1!) days to three (*) months. These contracts ,ere
re4ularly rene,ed to the e>tent that individual private respondents had rendered service
from three (*) to five (!) years until 18* and 18/ ,hen petitioner started terminatin4
their employment $y not rene,in4 their individual contracts. 1u$se;uently petitioner
entered into jo$ contractin4 a4reement ,ith (ra. @enerosa @on3ales ,ho supplies it
,ith skilled
manpo,er.
2
1ometime in July 18*, herein private respondents or4ani3ed a separate la$or union in
vie, of their e>clusion in the $ar4ainin4 unit of the re4ular rank and file employees
represented $y the 'ederation of 'ree ?orkers. 8n .u4ust 18*, they filed a petition for
certification election ,ith the 5inistry of #a$or and :mployment, "&%, docketed as
&ase "o. "&()#%()8)2/2)8/. 0ecause of this, herein petitioner alle4edly started
harassin4 them and replaced them ,ith so called Bcontract ,orkersB. Thus, complainant
union and herein respondent employees filed a case for ille4al lock)out and unfair la$or
practice, docketed as &ase "o. 1/2E)8* and the instant consolidated cases %.0 &ase
"os. E/E*)8! to /2D)8! and %.0 &ases "os. E*2)8! to E**)8!, involvin4 2+
,orkers, for unfair la$or practice andCor ille4al dismissal, reinstatement $ack,a4es and
service incentive.
$
-n 5arch *, 18D, #a$or .r$iter =oltaire .. 0alitaan rendered a decision in favor of the
respondents the dispositive portion of ,hich reads:
?2:%:'-%:, jud4ment is here$y rendered in favor of the petitioners and
they are here$y declared re4ular and permanent employees of the
respondent and findin4 their dismissal from the service ille4al, respondent
is ordered to reinstate them to their former positions ,ithout loss of
seniority ri4hts and ,ith one year $ack,a4es ,ithout ;ualification or
deduction in the amount of <!E,E21.D+.
1- -%(:%:(.
%
-n .ppeal, the "ational #a$or %elations &ommission on "ovem$er , 18D rendered a
decision dismissin4 the appeal and affirmin4 the decision of the #a$or .r$iter.
5
. motion
for reconsideration ,as denied on 5arch , 188 for lack of merit.
&
2ence, this petition ,hich ,as filed on .pril 22, 188.
8n the meantime, a ,rit of e>ecution ,as issued $y :>ecutive .r$iter @elacio #. %ivera,
Jr. on .pril 11, 188 on the 4round that no appeal ,as interposed hence the decision of
the #a$or .r$iter had $ecome final and e>ecutory.
7
-n .pril 2E, 188, petitioner filed a motion for the issuance of a Temporary %estrainin4
-rder as the 1heriff tried to enforce the ?rit of :>ecution dated .pril 11, 188 a4ainst
petitioner on .pril 18, 188. They further alle4ed that they are ready, ,illin4 and a$le to
post a supersedeas $ond to ans,er for dama4es ,hich respondents may suffer.
8
-n June 2, 188, this &ourt issued a Temporary %estrainin4 -rder enjoinin4
respondents from enforcin4 the %esolution dated "ovem$er , 18D, any ,rit of
e>ecution or notice of 4arnishment issued in %.0 &ases "os. E/E*)8! to /2D)8! and
%.0 &ases "os. E*2)8! to **)8! of the "ational #a$or %elations &ommission,
(epartment of #a$or and :mployment.
9
-n .pril 1D, 18, this &ourt resolved to dismiss the petition for failure to sufficiently
sho, that the respondent commission had committed 4rave a$use of discretion in
renderin4 the ;uestioned jud4ment and lifted the Temporary %estrainin4 -rder issued
on June 2, 188.
10
. motion for reconsideration ,as filed $y petitioner on 5ay 2!,
18.
11
-n June !, 18, this &ourt 4ranted the motion7 and set aside the resolution dated .pril
1D, 187 4ave due course to the petition and re;uired the patties to su$mit
simultaneously, their respective memoranda.
12
<rivate respondents filed their memorandum on .u4ust 8, 18
1$
,hile pu$lic
respondent filed its memorandum on 1eptem$er 1, 18.
1%
<etitioner filed its
memorandum on 1eptem$er 8, 18.
15
The main issue in the case at $ar is ,hether or not private respondents may $e
considered re4ular and permanent employees due to their len4th of service in the
company despite the fact that their employment is on contractual $asis.
<etitioner alle4es that it en4a4ed the services of private respondents on a monthly $asis
to ensure that manpo,er ,ould $e availa$le ,hen and ,here needed. <rivate
respondents ,ere fully a,are of the nature of their employment as this ,as clearly
spelled out in the employment contracts. ?hat happened to them ,as not a case of
un,arranted dismissal $ut simply one of e>piration of the tenure of employment
contracts and the completion of the phase of the project for ,hich their services ,ere
hired.
1&
8n the recent case of Kimberly Independent Labor Union for Solidarity, cti!ism, and
"ationalism#$lalia !s. %on. Fran&lin '. (rilon, @.%. "os. DD+2 and D8D1
promul4ated last 5ay , 1E, this &ourt classified the t,o kinds of re4ular employees,
as: 1) those ,ho are en4a4ed to perform activities ,hich are usually necessary or
desira$le in the usual $usiness or trade of the employer7 and 2) those ,ho have
rendered at least one (1) year of service, ,hether continuous or $roken ,ith respect to
the activity in ,hich they are employed. ?hile the actual re4ulari3ation of these
employees entails the mechanical act of issuin4 re4ular appointment papers and
compliance ,ith such other operatin4 procedures, as may $e adopted $y the employer,
it is more in keepin4 ,ith the intent and spirit of the la, to rule that the status of re4ular
employment attaches to the casual employee on the day immediately after the end of
his first year of service.
.ssumin4 therefore, that an employee could properly $e re4arded as a casual (as
distin4uished from a re4ular employee) he $ecomes entitled to $e re4arded as a re4ular
employee of the employer as soon as he has completed one year of service. Fnder the
circumstances, employers may not terminate the service of a re4ular employee e>cept
for a just cause or ,hen authori3ed under the #a$or &ode. 8t is not difficult to see that to
uphold the contractual arran4ement $et,een the employer and the employee ,ould in
effect $e to permit employers to avoid the necessity of hirin4 re4ular or permanent
employees indefinitely on a temporary or casual status, thus to deny them security of
tenure in their jo$s. .rticle 1E+ of the #a$or &ode is precisely desi4ned to prevent such
result.
17
8t is the policy of the state to assure the ri4ht of ,orkers to Bsecurity of tenure.B
18
The
4uarantee is an act of social justice. ?hen a person has no property, his jo$ may
possi$ly $e his only possession or means of livelihood. Therefore, he should $e
protected a4ainst any ar$itrary deprivation of his jo$. .rticle 28E of the #a$or &ode has
construed Bsecurity of tenureB as meanin4 that Bthe employer shall not terminate the
services of the employee e>cept for a just cause or ,hen authori3ed $y the &ode.B
19
<%:581:1 &-"18(:%:(, the decision of the "ational #a$or %elations &ommission is
here$y .''8%5:( and the Temporary %estrainin4 -rder issued on June 2, 188 is
here$y #8'T:( permanently.
1- -%(:%:(.
'elencio#%errera )C*airman+, ,adilla and -e.alado, JJ., concur.
Sarmiento, J., is on lea!e.
0G.R. No. 1209&9. 1anua23 22, 19984
ALE1ANDRO MARAG*INOT, 1R. an (A*LINO ENERO, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION 5SECOND DI,ISION6 7o89os- o:
(2-s;;ng Co88;ss;on-2 RA*L T. A<*INO, Co88;ss;on-2 ROGELIO I.
RA+ALA an Co88;ss;on-2 ,ICTORIANO R. CALA+CA+ 5Ponente6, ,IC
DEL ROSARIO an ,I,A #ILMS,respondents.
D E C I S I O N
DA,IDE, 1R., J.=
0y ,ay of this special civil action for certiorari under %ule +! of the %ules of &ourt, petitioners seek
to annul the 1E 'e$ruary 1! (ecision
G1H
of the "ational #a$or %elations &ommission (hereafter "#%&),
and its + .pril 1! %esolution
G2H
denyin4 the motion to reconsider the former in "#%&)"&%)&. "o.
EE+1!)/. The decision reversed that of the #a$or .r$iter in "#%&)"&%)&ase "o. EE)ED)E*/)2.
The parties present conflictin4 sets of facts.
<etitioner .lejandro 5ara4uinot, Jr. maintains that he ,as employed $y private respondents on 18
July 18 as part of the filmin4 cre, ,ith a salary of <*D!.EE per ,eek. .$out four months later, he ,as
desi4nated .ssistant :lectrician ,ith a ,eekly salary of </EE.EE, ,hich ,as increased to </!E.EE in 5ay
1E. 8n June 11, he ,as promoted to the rank of :lectrician ,ith a ,eekly salary of </D!.EE, ,hich
,as increased to<!*.EE in 1eptem$er 11.
<etitioner <aulino :nero, on his part, claims that private respondents employed him in June 1E as
a mem$er of the shootin4 cre, ,ith a ,eekly salary of <*D!.EE, ,hich ,as increased to </2!.EE in 5ay
11, then to </D!.EE on 21 (ecem$er 11.
G*H
<etitionersI tasks consisted of loadin4, unloadin4 and arran4in4 movie e;uipment in the shootin4
area as instructed $y the cameraman, returnin4 the e;uipment to =iva 'ilmsI ,arehouse, assistin4 in the
Jfi>in4K of the li4htin4 system, and performin4 other tasks that the cameraman andCor director may assi4n.
G/H
1ometime in 5ay 12, petitioners sou4ht the assistance of their supervisor, 5rs. .lejandria
&esario, to facilitate their re;uest that private respondents adjust their salary in accordance ,ith the
minimum ,a4e la,. 8n June 12, 5rs. &esario informed petitioners that 5r. =ic del %osario ,ould a4ree
to increase their salary only if they si4ned a $lank employment contract. .s petitioners refused to si4n,
private respondents forced :nero to 4o on leave in June 12, then refused to take him $ack ,hen he
reported for ,ork on 2E July 12. 5ean,hile, 5ara4uinot ,as dropped from the company payroll from 8
to 21 June 12, $ut ,as returned on 22 June 12. 2e ,as a4ain asked to si4n a $lank employment
contract, and ,hen he still refused, private respondents terminated his services on 2E July 12.
G!H
<etitioners thus sued for ille4al dismissal
G+H
$efore the #a$or .r$iter.
-n the other hand, private respondents claim that =iva 'ilms (hereafter =8=.) is the trade name of
=iva <roductions, 8nc., and that it is primarily en4a4ed in the distri$ution and e>hi$ition of movies )) $ut
not in the $usiness of makin4 movies7 in the same vein, private respondent =ic del %osario is merely an
e>ecutive producer, i.e., the financier ,ho invests a certain sum of money for the production of movies
distri$uted and e>hi$ited $y =8=..
GDH
<rivate respondents assert that they contract persons called JproducersK )) also referred to as
Jassociate producersK
G8H
)) to JproduceK or make movies for private respondents7 and contend that
petitioners are project employees of the associate producers ,ho, in turn, act as independent
contractors. .s such, there is no employer)employee relationship $et,een petitioners and private
respondents.
<rivate respondents further contend that it ,as the associate producer of the film J'a*irap 'a.in.
,o.i,K ,ho hired petitioner 5ara4uinot. The movie shot from 2 July up to 22 July 12, and it ,as only
then that 5ara4uinot ,as released upon payment of his last salary, as his services ,ere no lon4er
needed. .nent petitioner :nero, he ,as hired for the movie entitled JSi.a/ n. ,uso,K later re)titled
J"arito an. ,uso.K 2e ,ent on vacation on 8 June 12, and $y the time he reported for ,ork on 2E July
12, shootin4 for the movie had already $een completed.
GH
.fter considerin4 $oth versions of the facts, the #a$or .r$iter found as follo,s:
-n the first issue, this -ffice rules that complainants are the employees of the respondents.
The producer cannot $e considered as an independent contractor $ut should $e considered
only as a la$or)only contractor and as such, acts as a mere a4ent of the real employer, the
herein respondents. %espondents even failed to name and specify ,ho are the
producers. .lso, it is an admitted fact that the complainants received their salaries from the
respondents. The case cited $y the respondents, %osario 0rothers, 8nc. !s. -ple, 1*1
1&%. D2 does not apply in this case.
8t is very clear also that complainants are doin4 activities ,hich are necessary and essential
to the $usiness of the respondents, that of movie)makin4. &omplainant 5ara4uinot ,orked
as an electrician ,hile complainant :nero ,orked as a cre, Gmem$erH.
G1EH
2ence, the #a$or .r$iter, in his decision of 2E (ecem$er 1*, decreed as follo,s:
?2:%:'-%:, jud4ment is here$y rendered declarin4 that complainants ,ere ille4ally
dismissed.
%espondents are here$y ordered to reinstate complainants to their former positions ,ithout
loss GofH seniority ri4hts and pay their $ack,a4es startin4 July 21, 12 to (ecem$er *1,
1* temporarily computed in the amount of <*8,EEE.EE for complainant <aulino :nero and
</+,EEE.EE for complainant .lejandro 5ara4uinot, Jr. and thereafter until actually
reinstated.
%espondents are ordered to pay also attorneyIs fees e;uivalent to ten (1EL)
andCor <8,/EE.EE on top of the a,ard.
G11H
<rivate respondents appealed to the "#%& (docketed as "#%& "&%)&. "o. EE+1!)/). 8n its
decision
G12H
of 1E 'e$ruary 1!, the "#%& found the follo,in4 circumstances of petitionersI ,ork Jclearly
esta$lished:K
1. &omplainants Gpetitioners hereinH ,ere hired for specific movie projects and their
employment ,as co#terminus ,ith each movie project the completionCtermination of ,hich
are pre)determined, such fact $ein4 made kno,n to complainants at the time of their
en4a4ement.
> > >
2. :ach shootin4 unit ,orks on one movie project at a time. .nd the ,ork of the shootin4
units, ,hich ,ork independently from each other, are not continuous in nature $ut depends
on the availa$ility of movie projects.
*. .s a conse;uence of the non)continuous ,ork of the shootin4 units, the total ,orkin4
hours lo44ed $y complainants in a month sho, e>treme variations... 'or instance,
complainant 5ara4uinot ,orked for only 1./! hours in June 11 $ut lo44ed a total
of 18*.2! hours in January 12. &omplainant :nero lo44ed a total of only *1.!D hours in
1eptem$er 11 $ut ,orked for 18*.*! hours the ne>t month, -cto$er 11.
/. 'urther sho,n $y respondents is the irre4ular ,ork schedule of complainants on a daily
$asis. &omplainant 5ara4uinot ,as supposed to report on E! .u4ust 11 $ut reported
only on *E .u4ust 11, or a 4ap of 2! days. &omplainant :nero ,orked on 1E 1eptem$er
11 and his ne>t scheduled ,orkin4 day ,as 28 1eptem$er 11, a 4ap of 18 days.
!. The e>tremely irre4ular ,orkin4 days and hours of complainantsI ,ork e>plain the lump
sum payment for complainantsI services for each movie project. 2ence, complainants ,ere
paid a standard ,eekly salary re4ardless of the num$er of ,orkin4 days and hours they
lo44ed in. -ther,ise, if the principle of Jno ,ork no payK ,as strictly applied, complainantsI
earnin4s for certain ,eeks ,ould $e very ne4li4i$le.
+. %espondents also alle4ed that complainants ,ere not prohi$ited from ,orkin4 ,ith such
movie companies like %e4al, 1eiko and '<J <roductions ,henever they are not ,orkin4 for
the independent movie producers en4a4ed $y respondents... This alle4ation ,as never
re$utted $y complainants and should $e deemed admitted.
The "#%&, in reversin4 the #a$or .r$iter, then concluded that these circumstances, taken to4ether,
indicated that complainants (herein petitioners) ,ere Jproject employees.K
.fter their motion for reconsideration ,as denied $y the "#%& in its %esolution
G1*H
of + .pril 1!,
petitioners filed the instant petition, claimin4 that the "#%& committed 4rave a$use of discretion
amountin4 to lack or e>cess of jurisdiction in: (1) findin4 that petitioners ,ere project employees7 (2) rulin4
that petitioners ,ere not ille4ally dismissed7 and (*) reversin4 the decision of the #a$or .r$iter.
To support their claim that they ,ere re4ular (and not project) employees of private respondents,
petitioners cited their performance of activities that ,ere necessary or desira$le in the usual trade or
$usiness of private respondents and added that their ,ork ,as continuous, i.e., after one project ,as
completed they ,ere assi4ned to another project. <etitioners thus considered themselves part of a ,ork
pool from ,hich private respondents dre, ,orkers for assi4nment to different projects. <etitioners
lamented that there ,as no $asis for the "#%&Is conclusion that they ,ere project employees, ,hile the
associate producers ,ere independent contractors7 and thus reasoned that as re4ular employees, their
dismissal ,as ille4al since the same ,as premised on a Jfalse cause,K namely, the completion of a
project, ,hich ,as not amon4 the causes for dismissal allo,ed $y the #a$or &ode.
<rivate respondents reiterate their version of the facts and stress that their evidence supports the
vie, that petitioners are project employees7 point to petitionersI irre4ular ,ork load and ,ork schedule7
emphasi3e the "#%&Is findin4 that petitioners never controverted the alle4ation that they ,ere not
prohi$ited from ,orkin4 ,ith other movie companies7 and ask that the facts $e vie,ed in the conte>t of
the peculiar characteristics of the movie industry.
The -ffice of the 1olicitor @eneral (-1@) is convinced that this petition is improper since petitioners
raise ;uestions of fact, particularly, the "#%&Is findin4 that petitioners ,ere project employees, a findin4
supported $y su$stantial evidence7 and su$mits that petitionersI reliance on .rticle 28E of the #a$or &ode
to support their contention that they should $e deemed re4ular employees is misplaced, as said section
Jmerely distin4uishes $et,een t,o types of employees, i.e., re4ular employees and casual employees, for
purposes of determinin4 the ri4ht of an employee to certain $enefits.K
The -1@ like,ise rejects petitionersI contention that since they ,ere hired not for one project, $ut for
a series of projects, they should $e deemed re4ular employees. &itin4 'amansa. !. "L-C,
G1/H
the -1@
asserts that ,hat matters is that there ,as a time)frame for each movie project made kno,n to petitioners
at the time of their hirin4. 8n closin4, the -1@ disa4rees ,ith petitionersI claim that the "#%&Is
classification of the movie producers as independent contractors had no $asis in fact and in la,, since, on
the contrary, the "#%& Jtook pains in e>plainin4 its $asisK for its decision.
.s re4ards the propriety of this action, ,hich the -ffice of the 1olicitor @eneral takes issue ,ith, ,e
rule that a special civil action for certiorari under %ule +! of the %ules of &ourt is the proper remedy for
one ,ho complains that the "#%& acted in total disre4ard of evidence material to or decisive of the
controversy.
G1!H
8n the instant case, petitioners alle4e that the "#%&Is conclusions have no $asis in fact and
in la,, hence the petition may not $e dismissed on procedural or jurisdictional 4rounds.
The judicious resolution of this case hin4es upon, first, the determination of ,hether an employer)
employee relationship e>isted $et,een petitioners and private respondents or any one of private
respondents. 8f there ,as none, then this petition has no merit7 conversely, if the relationship e>isted,
then petitioners could have $een unjustly dismissed.
. related ;uestion is ,hether private respondents are en4a4ed in the $usiness of makin4 motion
pictures. (el %osario is necessarily en4a4ed in such $usiness as he finances the production of
movies. =8=., on the other hand, alle4es that it does not JmakeK movies, $ut merely distri$utes and
e>hi$its motion pictures. There $ein4 no further proof to this effect, ,e cannot rely on this self)servin4
denial. .t any rate, and as ,ill $e discussed $elo,, private respondentsI evidence even supports the
vie, that =8=. is en4a4ed in the $usiness of makin4 movies.
?e no, turn to the critical issues. <rivate respondents insist that petitioners are project employees
of associate producers ,ho, in turn, act as independent contractors. 8t is settled that the contractin4 out
of la$or is allo,ed only in case of jo$ contractin4. 1ection 8, %ule =888, 0ook 888 of the -mni$us %ules
8mplementin4 the #a$or &ode descri$es permissi$le jo$ contractin4 in this ,ise:
1ec. 8. Jo$ contractin4. )) There is jo$ contractin4 permissi$le under the &ode if the
follo,in4 conditions are met:
(1) The contractor carries on an independent $usiness and undertakes the
contract ,ork on his o,n account under his o,n responsi$ility accordin4 to
his o,n manner and method, free from the control and direction of his
employer or principal in all matters connected ,ith the performance of the
,ork e>cept as to the results thereof7 and
(2) The contractor has su$stantial capital or investment in the form of tools,
e;uipment, machineries, ,ork premises, and other materials ,hich are
necessary in the conduct of his $usiness.
.ssumin4 that the associate producers are jo$ contractors, they must then $e en4a4ed in the
$usiness of makin4 motion pictures. .s such, and to $e a jo$ contractor under the precedin4 description,
associate producers must have tools, e;uipment, machinery, ,ork premises, and other materials
necessary to make motion pictures. 2o,ever, the associate producers here have none of these. <rivate
respondentsI evidence reveals that the movie)makin4 e;uipment are supplied to the producers and
o,ned $y =8=.. These include 4enerators,
G1+H
ca$les and ,ooden platforms,
G1DH
cameras and Jshootin4
e;uipment7K
G18H
in fact, =8=. like,ise o,ns the trucks used to transport the e;uipment.
G1H
8t is thus clear that
the associate producer merely leases the e;uipment from =8=..
G2EH
8ndeed, private respondentsI 'ormal
-ffer of (ocumentary :vidence stated one of the purposes of :>hi$it J1/8K as:
To prove further that the independent <roducers rented 1hootin4 Fnit "o. 2 from =iva to
finish their films.
G21H
?hile the purpose of :>hi$its J1/,K J1/).K and J1/)0K ,as:
GTHo prove that the movies of =iva 'ilms ,ere contracted out to the different independent
<roducers ,ho rented 1hootin4 Fnit "o. * ,ith a fi>ed $ud4et and time)frame of at least *E
shootin4 days or /! days ,hichever comes first.
G22H
<rivate respondents further narrated that =8=.Is 4enerators $roke do,n durin4 petitionersI last movie
project, ,hich forced the associate producer concerned to rent 4enerators, e;uipment and cre, from
another company.
G2*H
This only sho,s that the associate producer did not have su$stantial capital nor
investment in the form of tools, e;uipment and other materials necessary for makin4 a movie. <rivate
respondents in effect admit that their producers, especially petitionersI last producer, are not en4a4ed in
permissi$le jo$ contractin4.
8f private respondents insist that their associate producers are la$or contractors, then these
producers can only $e Jla$or)onlyK contractors, defined $y the #a$or &ode as follo,s:
.rt. 1E+. &ontractor or su$contractor.)) > > >
There is Jla$or)onlyK contractin4 ,here the person supplyin4 ,orkers to an employer does
not have su$stantial capital or investment in the form of tools, e;uipment, machineries, ,ork
premises, amon4 others, and the ,orkers recruited and placed $y such persons are
performin4 activities ,hich are directly related to the principal $usiness of such
employer. 8n such cases, the person or intermediary shall $e considered merely as an
a4ent of the employer ,ho shall $e responsi$le to the ,orkers in the same manner and
e>tent as if the latter ,ere directly employed $y him.
. more detailed description is provided $y 1ection , %ule =888, 0ook 888 of the -mni$us %ules
8mplementin4 the #a$or &ode:
1ec. . #a$or)only contractin4. )) (a) .ny person ,ho undertakes to supply ,orkers to an
employer shall $e deemed to $e en4a4ed in la$or)only contractin4 ,here such person:
(1) (oes not have su$stantial capital or investment in the form of tools, e;uipment,
machineries, ,ork premises and other materials7 and
(2) The ,orkers recruited and placed $y such person are performin4 activities ,hich
are directly related to the principal $usiness or operations of the employer in ,hich
,orkers are ha$itually employed.
($) #a$or)only contractin4 as defined herein is here$y prohi$ited and the person
actin4 as contractor shall $e considered merely as an a4ent or intermediary
of the employer ,ho shall $e responsi$le to the ,orkers in the same manner
and e>tent as if the latter ,ere directly employed $y him.
(c) 'or cases not fallin4 under this .rticle, the 1ecretary of #a$or shall
determine throu4h appropriate orders ,hether or not the contractin4 out of
la$or is permissi$le in the li4ht of the circumstances of each case and after
considerin4 the operatin4 needs of the employer and the ri4hts of the ,orkers
involved. 8n such case, he may prescri$e conditions and restrictions to insure
the protection and ,elfare of the ,orkers.
.s la$or)only contractin4 is prohi$ited, the la, considers the person or entity en4a4ed in the same a
mere a4ent or intermediary of the direct employer. 0ut even $y the precedin4 standards, the associate
producers of =8=. cannot $e considered la$or)only contractors as they did not supply, recruit nor hire the
,orkers. 8n the instant case, it ,as Juanita &esario, 1hootin4 Fnit 1upervisor and an employee of =8=.,
,ho recruited cre, mem$ers from an Javaila$le 4roup of free)lance ,orkers ,hich includes the
complainants 5ara4uinot and :nero.K
G2/H
.nd in their 5emorandum, private respondents declared that the
associate producer Jhires the services of... +) camera cre, ,hich includes (a) cameraman7 ($) the utility
cre,7 (c) the technical staff7 (d) 4enerator man and electrician7 (e) clapper7 etc....K
G2!H
This clearly sho,ed
that the associate producers did not supply the ,orkers re;uired $y the movie project.
The relationship $et,een =8=. and its producers or associate producers seems to $e that of a4ency,
G2+H
as the latter make movies on $ehalf of =8=., ,hose $usiness is to JmakeK movies. .s such, the
employment relationship $et,een petitioners and producers is actually one $et,een petitioners and =8=.,
,ith the latter $ein4 the direct employer.
The employer)employee relationship $et,een petitioners and =8=. can further $e esta$lished $y the
Jcontrol test.K ?hile four elements are usually considered in determinin4 the e>istence of an employment
relationship, namely: (a) the selection and en4a4ement of the employee7 ($) the payment of ,a4es7 (c)
the po,er of dismissal7 and (d) the employerIs po,er to control the employeeIs conduct, the most
important element is the employerIs control of the employeeIs conduct, not only as to the result of the
,ork to $e done $ut also as to the means and methods to accomplish the same.
G2DH
These four elements
are present here. 8n their position paper su$mitted to the #a$or .r$iter, private respondents narrated the
follo,in4 circumstances:
GTHhe <%-(F&:% has to ,ork ,ithin the limits of the $ud4et he is 4iven $y the company,
for as lon4 as the ultimate finishGedH product is accepta$le to the company...
To ensure that ;uality films are produced $y the <%-(F&:% ,ho is an independent
contractor, the company like,ise employs a 1upervisin4 <%-(F&:%, a <roject accountant
and a 1hootin4 unit supervisor. The &ompanyIs 1upervisin4 <%-(F&:% is 5r. :ric
&uatico, the <roject accountant varies from time to time, and the 1hootin4 Fnit 1upervisor
is 5s. .lejandria &esario.
The 1upervisin4 <%-(F&:% acts as the eyes and ears of the company and of the
:>ecutive <roducer to monitor the pro4ress of the <%-(F&:%Is ,ork
accomplishment. 2e is there usually in the field doin4 the rounds of inspection to see if
there is any pro$lem that the <%-(F&:% is encounterin4 and to assist in threshin4 out the
same so that the film project ,ill $e finished on schedule. 2e supervises a$out * to D movie
projects simultaneously GatH any 4iven time $y coordinatin4 ,ith each film J<%-(F&:%K.
The <roject .ccountant on the other hand assists the <%-(F&:% in monitorin4 the actual
e>penses incurred $ecause the company ,ants to insure that any additional $ud4et
re;uested $y the <%-(F&:% is really justified and ,arranted especially ,hen there is a
chan4e of ori4inal plans to suit the tastGeH of the company on ho, a certain scene must $e
presented to make the film more interestin4 and more commercially via$le. (emphasis ours)
=8=.Is control is evident in its mandate that the end result must $e a J;uality film accepta$le to the
company.K The means and methods to accomplish the result are like,ise controlled $y =8=., !iz., the
movie project must $e finished ,ithin schedule ,ithout e>ceedin4 the $ud4et, and additional e>penses
must $e justified7 certain scenes are su$ject to chan4e to suit the taste of the company7 and the
1upervisin4 <roducer, the Jeyes and earsK of =8=. and del %osario, intervenes in the movie)makin4
process $y assistin4 the associate producer in solvin4 pro$lems encountered in makin4 the film.
8t may not $e validly ar4ued then that petitioners are actually su$ject to the movie directorIs control,
and not =8=.Is direction. The director merely instructs petitioners on ho, to $etter comply ,ith =8=.Is
re;uirements to ensure that a ;uality film is completed ,ithin schedule and ,ithout e>ceedin4 the
$ud4et. .t $ottom, the director is akin to a supervisor ,ho merely oversees the activities of rank)and)file
employees ,ith control ultimately restin4 on the employer.
5oreover, appointment slips
G28H
issued to all cre, mem$ers state:
(urin4 the term of this appointment you shall comply ,ith the duties and responsi$ilities of
your position as ,ell as o$serve the rules and re4ulations promul4ated $y your superiors
and $y Top 5ana4ement.
The ,ords JsuperiorsK and JTop 5ana4ementK can only refer to the JsuperiorsK and JTop
5ana4ementK of =8=.. 0y commandin4 cre, mem$ers to o$serve the rules and re4ulations promul4ated
$y =8=., the appointment slips only emphasi3e =8=.Is control over petitioners.
.side from control, the element of selection and en4a4ement is like,ise present in the instant case
and e>ercised $y =8=.. . sample appointment slip offered $y private respondents Jto prove that
mem$ers of the shootin4 cre, e>cept the driver are project employees of the 8ndependent
<roducersK
G2H
reads as follo,s:
=8=. <%-(F&T8-"1, 8"&.
1+ 1ct. .l$ano 1t.
(iliman, Aue3on &ity
<:(%- "8&-#.1 (ate: June 1!, 12
MMMMMMMMMMMMMMMMMM
.<<-8"T5:"T 1#8<
Nou are here$y appointed as 1-F"(5." for the film project entitled J5.".508TK. This
appointment shall $e effective upon the commencement of the said project and shall
continue to $e effective until the completion of the same.
'or your services you shall receive the dailyC,eeklyCmonthly compensation of <812.!E.
(urin4 the term of this appointment you shall comply ,ith the duties and responsi$ilities of
your position as ,ell as o$serve the rules and re4ulations promul4ated $y your superiors
and $y Top 5ana4ement.
=ery truly yours,
(an ille4i$le si4nature)
&-"'-%5::
MMMMMMMMMMMMMMMMMMM
"ame of appointee
1i4ned in the presence of:
MMMMMMMMMMMMMMMMMMMMM
"ota$ly, no,here in the appointment slip does it appear that it ,as the producer or associate
producer ,ho hired the cre, mem$ers7 moreover, it is =8=.Is corporate name ,hich appears on the
headin4 of the appointment slip. ?hat like,ise tells a4ainst =8=. is that it paid petitionersI salaries as
evidenced $y vouchers, containin4 =8=.Is letterhead, for that purpose.
G*EH
.ll the circumstances indicate an employment relationship $et,een petitioners and =8=. alone, thus
the inevita$le conclusion is that petitioners are employees only of =8=..
The ne>t issue is ,hether petitioners ,ere ille4ally dismissed. <rivate respondents contend that
petitioners ,ere project employees ,hose employment ,as automatically terminated ,ith the completion
of their respective projects. <etitioners assert that they ,ere re4ular employees ,ho ,ere ille4ally
dismissed.
8t may not $e i4nored, ho,ever, that private respondents e>pressly admitted that petitioners ,ere
part of a ,ork pool7
G*1H
and, ,hile petitioners ,ere initially hired possi$ly as project employees, they had
attained the status of re4ular employees in vie, of =8=.Is conduct.
. project employee or a mem$er of a ,ork pool may ac;uire the status of a re4ular employee ,hen
the follo,in4 concur:
1) There is a continuous rehirin4 of project employees even after cessation of a project7
G*2H
and
2) The tasks performed $y the alle4ed Jproject employeeK are vital, necessary and
indispensa$le to the usual $usiness or trade of the employer.
G**H
2o,ever, the len4th of time durin4 ,hich the employee ,as continuously re)hired is not controllin4,
$ut merely serves as a $ad4e of re4ular employment.
G*/H
8n the instant case, the evidence on record sho,s that petitioner :nero ,as employed for a total of
t,o (2) years and en4a4ed in at least ei4hteen (18) projects, ,hile petitioner 5ara4uinot ,as employed
for some three (*) years and ,orked on at least t,enty)three (2*) projects.
G*!H
5oreover, as petitionersI
tasks involved, amon4 other chores, the loadin4, unloadin4 and arran4in4 of movie e;uipment in the
shootin4 area as instructed $y the cameramen, returnin4 the e;uipment to the =iva 'ilmsI ,arehouse,
and assistin4 in the Jfi>in4K of the li4htin4 system, it may not $e 4ainsaid that these tasks ,ere vital,
necessary and indispensa$le to the usual $usiness or trade of the employer. .s re4ards the underscored
phrase, it has $een held that this is ascertained $y considerin4 the nature of the ,ork performed and its
relation to the scheme of the particular $usiness or trade in its entirety.
G*+H
. recent pronouncement of this &ourt anent project or ,ork pool employees ,ho had attained the
status of re4ular employees proves most instructive:
The denial $y petitioners of the e>istence of a ,ork pool in the company $ecause their
projects ,ere not continuous is amply $elied $y petitioners themselves ,ho admit that: >>>
. ,ork pool may e>ist althou4h the ,orkers in the pool do not receive salaries and are free
to seek other employment durin4 temporary $reaks in the $usiness, provided that the
,orker shall $e availa$le ,hen called to report for a project. .lthou4h primarily applica$le
to re4ular seasonal ,orkers, this set)up can like,ise $e applied to project ,orkers insofar
as the effect of temporary cessation of ,ork is concerned. This is $eneficial to $oth the
employer and employee for it prevents the unjust situation of Jcoddlin4 la$or at the e>pense
of capitalK and at the same time ena$les the ,orkers to attain the status of re4ular
employees. &learly, the continuous rehirin4 of the same set of employees ,ithin the
frame,ork of the #ao @roup of &ompanies is stron4ly indicative that private respondents
,ere an inte4ral part of a ,ork pool from ,hich petitioners dre, its ,orkers for its various
projects.
8n a final attempt to convince the &ourt that private respondents ,ere indeed project
employees, petitioners point out that the ,orkers ,ere not re4ularly maintained in the
payroll and ,ere free to offer their services to other companies ,hen there ,ere no on)
4oin4 projects. This ar4ument ho,ever cannot defeat the ,orkersI status of re4ularity. ?e
apply $y analo4y the case of Industrial#Commercial#.ricultural 0or&ers $r.anization !.
CI-G1+ 1&%. !+2, !+D)+8 (1++)H ,hich deals ,ith re4ular seasonal employees. There ,e
held: >>>
Truly, the cessation of construction activities at the end of every project is a foreseea$le
suspension of ,ork. -f course, no compensation can $e demanded from the employer
$ecause the stoppa4e of operations at the end of a project and $efore the start of a ne,
one is re4ular and e>pected $y $oth parties to the la$or relations. 1imilar to the case of
re4ular seasonal employees, the employment relation is not severed $y merely $ein4
suspended. Gcitin4 'anila %otel Co. !. CI- , 1&%. 18+ (1+*)H The employees are,
strictly speakin4, not separated from services $ut merely on leave of a$sence ,ithout pay
until they are reemployed. Thus ,e cannot affirm the ar4ument that non)payment of salary
or non)inclusion in the payroll and the opportunity to seek other employment denote project
employment.
G*DH
(underscorin4 supplied)
?hile Lao admittedly involved the construction industry, to ,hich <olicy 8nstruction "o.
2EC(epartment -rder "o. 1
G*8H
re4ardin4 ,ork pools specifically applies, there seems to $e no impediment
to applyin4 the underlyin4 principles to industries other than the construction industry.
G*H
"either may it $e
ar4ued that a su$stantial distinction e>ists $et,een the projects undertaken in the construction industry
and the motion picture industry. -n the contrary, the raison d1 etre of $oth industries concern projects ,ith
a foreseea$le suspension of ,ork.
.t this time, ,e ,ish to allay any fears that this decision unduly $urdens an employer $y imposin4 a
duty to re)hire a project employee even after completion of the project for ,hich he ,as hired. The import
of this decision is not to impose a positive and s,eepin4 o$li4ation upon the employer to re)hire project
employees. ?hat this decision merely accomplishes is a judicial reco4nition of the employment status of
a project or ,ork pool employee in accordance ,ith ,hat is fait accompli, i.e., the continuous re)hirin4 $y
the employer of project or ,ork pool employees ,ho perform tasks necessary or desira$le to the
employerIs usual $usiness or trade. #et it not $e said that this decision JcoddlesK la$or, for as Lao has
ruled, project or ,ork pool employees ,ho have 4ained the status of re4ular employees are su$ject to the
Jno ,ork)no payK principle, to repeat:
. ,ork pool may e>ist althou4h the ,orkers in the pool do not receive salaries and are free
to seek other employment durin4 temporary $reaks in the $usiness, provided that the
,orker shall $e availa$le ,hen called to report for a project. .lthou4h primarily applica$le
to re4ular seasonal ,orkers, this set)up can like,ise $e applied to project ,orkers insofar
as the effect of temporary cessation of ,ork is concerned. This is $eneficial to $oth the
employer and employee for it prevents the unjust situation of Jcoddlin4 la$or at the e>pense
of capitalK and at the same time ena$les the ,orkers to attain the status of re4ular
employees.
The &ourtIs rulin4 here is meant precisely to 4ive life to the constitutional policy of stren4thenin4 the
la$or sector,
G/EH
$ut, ,e stress, not at the e>pense of mana4ement. #est it $e misunderstood, this rulin4
does not mean that simply $ecause an employee is a project or ,ork pool employee even outside the
construction industry, he is deemed, ipso 2ure, a re4ular employee. .ll that ,e hold today is that once a
project or ,ork pool employee has $een: (1) continuously, as opposed to intermittently, re)hired $y the
same employer for the same tasks or nature of tasks7 and (2) these tasks are vital, necessary and
indispensa$le to the usual $usiness or trade of the employer, then the employee must $e deemed a
re4ular employee, pursuant to .rticle 28E of the #a$or &ode and jurisprudence. To rule other,ise ,ould
allo, circumvention of la$or la,s in industries not fallin4 ,ithin the am$it of <olicy 8nstruction "o.
2EC(epartment -rder "o. 1, hence allo,in4 the prevention of ac;uisition of tenurial security $y project or
,ork pool employees ,ho have already 4ained the status of re4ular employees $y the employerIs
conduct.
8n closin4 then, as petitioners had already 4ained the status of re4ular employees, their dismissal
,as un,arranted, for the cause invoked $y private respondents for petitionersI dismissal, !iz., completion
of project, ,as not, as to them, a valid cause for dismissal under .rticle 282 of the #a$or &ode. .s such,
petitioners are no, entitled to $ack ,a4es and reinstatement, ,ithout loss of seniority ri4hts and other
$enefits that may have accrued.
G/1H
"evertheless, follo,in4 the principles of Jsuspension of ,orkK and Jno
payK $et,een the end of one project and the start of a ne, one, in computin4 petitionersI $ack ,a4es, the
amounts correspondin4 to ,hat could have $een earned durin4 the periods from the date petitioners ,ere
dismissed until their reinstatement ,hen petitionersI respective 1hootin4 Fnits ,ere not undertakin4 any
movie projects, should $e deducted.
<etitioners ,ere dismissed on 2E July 12, at a time ,hen %epu$lic .ct "o. +D1! ,as already in
effect. <ursuant to 1ection */ thereof ,hich amended 1ection 2D of the #a$or &ode of the <hilippines
andBustamante !. "L-C,
G/2H
petitioners are entitled to receive full $ack ,a4es from the date of their
dismissal up to the time of their reinstatement, ,ithout deductin4 ,hatever earnin4s derived else,here
durin4 the period of ille4al dismissal, su$ject, ho,ever, to the a$ove o$servations.
>)ERE#ORE, the instant petition is @%."T:(. The assailed decision of the "ational #a$or
%elations &ommission in "#%& "&% &. "o. EE+1!)/ dated 1E 'e$ruary 1!, as ,ell as its
%esolution dated + .pril 1!, are here$y .""F##:( and 1:T .18(: for havin4 $een rendered ,ith
4rave a$use of discretion, and the decision of the #a$or .r$iter in "#%& "&% &ase "o. EE)ED)E*/)2
is %:8"1T.T:(, su$ject, ho,ever, to the modification a$ove mentioned in the computation of $ack
,a4es.
"o pronouncement as to costs.
SO ORDERED.
Bellosillo, 3itu., and Kapunan, JJ., concur.
G.R. No. 798&9 S-9t-8?-2 5, 1991
#ORT*NATO MERCADO, SR., ROSA MERCADO, #ORT*NATO MERCADO, 1R.,
ANTONIO MERCADO, 1OSE CABRAL, L*CIA MERCADO, AS*NCION G*E,ARA,
ANITA MERCADO, MARINA MERCADO, 1*LIANA CABRAL, G*ADAL*(E
(AG*IO, BRIGIDA ALCANTARA, EMERLITA MERCADO, ROMEO G*E,ARA,
ROMEO MERCADO an LEON SANTILLAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION 5NLRC6, T)IRD DI,ISION" LABOR
ARBITER L*CIANO A<*INO, RAB'III" A*RORA L. CR*@" S(O*SES #RANCISCO
DE BOR1A an LETICIA DE BOR1A" an STO. NI!O REALT+,
INCOR(ORATED, respondents.
Ser!illano S. Santillan for petitioners.
Luis -. 'auricio for pri!ate respondents.

(ADILLA, J.:p
.ssailed in this petition for certiorari is the decision / of the respondent national #a$or
%elations &ommission ("#%&) dated 8 .u4ust 18/ ,hich affirmed the decision of
respondent #a$or .r$iter #uciano <. .;uino ,ith the sli4ht modification of deletin4 the
a,ard of financial assistance to petitioners, and the resolution of the respondent "#%&
dated 1D .u4ust 18D, denyin4 petitioners9 motion for reconsideration.
This petition ori4inated from a complaint for ille4al dismissal, underpayment of ,a4es,
non)payment of overtime pay, holiday pay, service incentive leave $enefits, emer4ency
cost of livin4 allo,ances and 1*th month pay, filed $y a$ove)named petitioners a4ainst
private respondents .urora #. &ru3, 'rancisco 0orja, #eticia &. 0orja and 1to. "i6o
%ealty 8ncorporated, ,ith %e4ional .r$itration 0ranch "o. 888, "ational #a$or %elations
&ommission in 1an 'ernando, <ampan4a.
1
<etitioners alle4ed in their complaint that they ,ere a4ricultural ,orkers utili3ed $y
private respondents in all the a4ricultural phases of ,ork on the D 1C2 hectares of ace
land and 1E hectares of su4ar land o,ned $y the latter7 that 'ortunato 5ercado, 1r. and
#eon 1antillan ,orked in the farm of private respondents since 1/, 'ortunato
5ercado, Jr. and .ntonio 5ercado since 1D2 and the rest of the petitioners since 1+E
up to .pril 1D, ,hen they ,ere all alle4edly dismissed from their employment7 and
that, durin4 the period of their employment, petitioners received the follo,in4 daily
,a4es:
'rom 1+2)1+* O <1.!E
1+*)1+! O <2.EE
1+!)1+D O <*.EE
1+D)1DE O </.EE
1DE)1D* O <!.EE
1D*)1D! O <!.EE
1D!)1D8 O <+.EE
1D8)1D O <D.EE
<rivate respondent .urora &ru3 in her ans,er to petitioners9 complaint denied that said
petitioners ,ere her re4ular employees and instead averred that she en4a4ed their
services, throu4h 1pouses 'ortunato 5ercado, 1r. and %osa 5ercado, their
BmandarolsB, that is, persons ,ho take char4e in supplyin4 the num$er of ,orkers
needed $y o,ners of various farms, $ut only to do a particular phase of a4ricultural
,ork necessary in rice production andCor su4ar cane production, after ,hich they ,ould
$e free to render services to other farm o,ners ,ho need their services.
2
The other private respondents denied havin4 any relationship ,hatsoever ,ith the
petitioners and state that they ,ere merely re4istered o,ners of the land in ;uestion
included as corespondents in this case.
$
The dispute in this case revolves around the issue of ,hether or not petitioners are
re4ular and permanent farm ,orkers and therefore entitled to the $enefits ,hich they
pray for. .nd corollary to this, ,hether or not said petitioners ,ere ille4ally dismissed $y
private respondents.
%espondent #a$or .r$iter #uciano <. .;uino ruled in favor of private respondents and
held that petitioners ,ere not re4ular and permanent ,orkers of the private
respondents, for the nature of the terms and conditions of their hirin4 reveal that they
,ere re;uired to perform phases of a4ricultural ,ork for a definite period of time after
,hich their services ,ould $e availa$le to any other farm o,ner.
%
%espondent #a$or
.r$iter deemed petitioners9 contention of ,orkin4 t,elve (12) hours a day the ,hole
year round in the farm, an e>a44eration, for the reason that the plantin4 of lice and
su4ar cane does not entail a ,hole year as reported in the findin4s of the &hief of the
"#%& 1pecial Task 'orce.
5
:ven the s,orn statement of one of the petitioners,
'ortunato 5ercado, Jr., the son of spouses 'ortunato 5ercado, 1r. and %osa 5ercado,
indu$ita$ly sho, that said petitioners ,ere hired only as casuals, on an Bon and offB
$asis, thus, it ,as ,ithin the prero4ative of private respondent .urora &ru3 either to
take in the petitioners to do further ,ork or not after any sin4le phase of a4ricultural
,ork had $een completed $y them.
&
%espondent #a$or .r$iter ,as also of the opinion that the real cause ,hich tri44ered
the filin4 of the complaint $y the petitioners ,ho are related to one another, either $y
consan4uinity or affinity, ,as the filin4 of a criminal complaint for theft a4ainst %eynaldo
5ercado, son of spouses 'ortunate 5ercado, 1r. and %osa 5ercado, for they even
asked the help of Jesus (avid, Pone &hairman of the locality to talk to private
respondent, .urora &ru3 re4ardin4 said criminal case.
7
8n his affidavit, Jesus (avid
stated under oath that petitioners ,ere never re4ularly employed $y private respondent
.urora &ru3 $ut ,ere, on)and)off hired to ,ork and render services ,hen needed, thus
addin4 further support to the conclusion that petitioners ,ere not re4ular and permanent
employees of private respondent .urora &ru3.
8
%espondent #a$or .r$iter further held that only money claims from years 1D+)1DD,
1DD)1D8 and 1D8)1D may $e properly considered since all the other money claims
have prescri$ed for havin4 accrued $eyond the three (*) year period prescri$ed $y
la,.
9
-n 4rounds of e;uity, ho,ever, respondent #a$or .r$iter a,arded petitioners
financial assistance $y private respondent .urora &ru3, in the amount of Ten Thousand
<esos (<1E,EEE.EE) to $e e;uita$ly divided amon4 an the petitioners e>cept petitioner
'ortunato 5ercado, Jr. ,ho had manifested his disinterest in the further prosecution of
his complaint a4ainst private respondent.
10
0oth parties filed their appeal ,ith the "ational #a$or %elations &ommissions ("#%&).
<etitioners ;uestioned respondent #a$or .r$iter9s findin4 that they ,ere not re4ular and
permanent employees of private respondent .urora &ru3 ,hile private respondents
;uestioned the a,ard of financial assistance 4ranted $y respondent #a$or .r$iter.
The "#%& ruled in favor of private respondents affirmin4 the decision of the respondent
#a$or .r$iter, ,ith the modification of the deletion of the a,ard for financial assistance
to petitioners. The dispositive portion of the decision of the "#%& reads:
?2:%:'-%:, the (ecision of #a$or .r$iter #uciano <. .;uino dated
5arch *, 18* is here$y modified in that the a,ard of <1E,EEE.EE financial
assistance should $e deleted. The said (ecision is affirmed in all other
aspects.
1- -%(:%:(.
11
<etitioners filed a motion for reconsideration of the (ecision of the Third (ivision of the
"#%& dated 8 .u4ust 18/7 ho,ever, the "#%& denied tills motion in a resolution dated
1D .u4ust 18D.
12
8n the present <etition for certiorari, petitioners seek the reversal of the a$ove)
mentioned rulin4s. <etitioners contend that respondent #a$or .r$iter and respondent
"#%& erred ,hen $oth ruled that petitioners are not re4ular and permanent employees
of private respondents $ased on the terms and conditions of their hirin4, for said
findin4s are contrary to the provisions of .rticle 28E of the #a$or &ode.
1$
They su$mit
that petitioners9 employment, even assumin4 said employment ,ere seasonal,
continued for so many years such that, $y e>press provision of .rticle 28E of the #a$or
&ode as amended, petitioners have $ecome re4ular and permanent employees.
1%
5oreover, they ar4ue that <olicy 8nstruction "o. 12
15
of the (epartment of #a$or and
:mployment clearly lends support to this contention, ,hen it states:
<( 8*E has defined the concept of re4ular and casual employment. ?hat
determines re4ularity or casualness is not the employment contract,
,ritten or other,ise, $ut the nature of the jo$. 8f the jo$ is usually
necessary or desira$le to the main $usiness of the employer, then
employment is re4ular. 8f not, then the employment is casual. :mployment
for a definite period ,hich e>ceeds one (1) year shall $e considered re for
the duration of the definite period.
This concept of re and casual employment is desi4ned to put an end to
casual employment in re4ular jo$s ,hich has $een a$used $y many
employers to prevent so)called casuals from enjoyin4 the $enefits of
re4ular employees or to prevent casuals from joinin4 unions.
This ne, concept should $e strictly enforced to 4ive meanin4 to the
constitutional 4uarantee of employment tenure.
1&
Tested under the la,s invoked, petitioners su$mit that it ,ould $e unjust, if not unla,ful,
to consider them as casual ,orkers since they have $een doin4 all phases of
a4ricultural ,ork for so many years, activities ,hich are undenia$ly necessary, desira$le
and indispensa$le in the rice and su4ar cane production $usiness of the private
respondents.
17
8n the &omment filed $y private respondents, they su$mit that the decision of the #a$or
.r$iter, as aimed $y respondent "#%&, that petitioners ,ere only hired as casuals, is
$ased on solid evidence presented $y the parties and also $y the &hief of the 1pecial
Task 'orce of the "#%& %e4ional -ffice and, therefore, in accordance ,ith the rule on
findin4s of fact of administrative a4encies, the decision should $e 4iven 4reat
,ei4ht.
18
'urthermore, they contend that the ar4uments used $y petitioners in
;uestionin4 the decision of the #a$or .r$iter ,ere $ased on matters ,hich ,ere not
offered as evidence in the case heard $efore the re4ional office of the then 5inistry of
#a$or $ut rather in the case $efore the 1ocial 1ecurity &ommission, also $et,een the
same parties.
19
<u$lic respondent "#%& filed a separate comment prepared $y the 1olicitor @eneral. 8t
su$mits that it has lon4 $een settled that findin4s of fact of administrative a4encies if
supported $y su$stantial evidence are entitled to 4reat ,ei4ht.
20
5oreover, it ar4ues
that petitioners cannot $e deemed to $e permanent and re4ular employees since they
fall under the e>ception stated in .rticle 28E of the #a$or &ode, ,hich reads:
The provisions of ,ritten a4reements to the contrary not,ithstandin4 and
re4ardless of the oral a4reements of the parties, an employment shall $e
deemed to $e re4ular ,here the employee has $een en4a4ed to perform
activities ,hich are usually necessary or desira$le in the usual $usiness or
trade of the employer, e4cept ,here the employment has $een fi>ed for a
specific project or undertakin4 the completion or termination of ,hich has
$een determined at the time of the en4a4ement of the employee or /*ere
t*e /or& or ser!ices to be performed is seasonal in nature and t*e
employment is for t*e duration of t*e season.
21
(emphasis supplied)
The &ourt resolved to 4ive due course to the petition and re;uired the parties to su$mit
their respective memoranda after ,hich the case ,as deemed su$mitted for decision.
The petition is not impressed ,ith merit.
The invaria$le rule set $y the &ourt in revie,in4 administrative decisions of the
:>ecutive 0ranch of the @overnment is that the findin4s of fact made therein are
respected, so lon4 as they are supported $y su$stantial evidence, even if not
over,helmin4 or preponderant7
22
that it is not for the revie,in4 court to ,ei4h the
conflictin4 evidence, determine the credi$ility of the ,itnesses or other,ise su$stitute its
o,n jud4ment for that of the administrative a4ency on the sufficiency of the
evidence7
2$
that the administrative decision in matters ,ithin the e>ecutive9s jurisdiction
can only $e set aside upon proof of 4ross a$use of discretion, fraud, or error of la,.
2%
The ;uestioned decision of the #a$or .r$iter reads:
'ocusin4 the spotli4ht of judicious scrutiny on the evidence on record and
the ar4uments of $oth parties, it is our ,ell)discerned opinion that the
petitioners are not re4ular and permanent ,orkers of the respondents.
The very nature of the terms and conditions of their hirin4 reveal that the
petitioners ,ere re;uired to perform p of cultural ,ork for a definite period,
after ,hich their services are availa$le to any farm o,ner. ?e cannot
share the ar4uments of the petitioners that they ,orked continuously the
,hole year round for t,elve hours a day. This, ,e feel, is an e>a44eration
,hich does not deserve any serious consideration inasmuch as the plan of
rice and su4ar cane does not entail a ,hole year operation, the area in
;uestion $ein4 comparatively small. 8t is note,orthy that the findin4s of the
&hief of the 1pecial Task 'orce of the %e4ional -ffice are similar to this.
8n fact, the s,orn statement of one of the petitioners 'ortunato 5ercado,
Jr., the son of spouses 'ortunato 5ercado, 1r. and %osa 5ercado,
indu$ita$ly sho,s that said petitioners ,ere only hired as casuals, on)and)
off $asis. ?ith this kind of relationship $et,een the petitioners and the
respondent .urora &ru3, ,e feel that there is no $asis in la, upon ,hich
the claims of the petitioners should $e sustained, more specially their
complaint for ille4al dismissal. 8t is ,ithin the prero4ative of respondent
.urora &ru3 either to take in the petitioners to do further ,ork or not after
any sin4le phase of a4ricultural ,ork has $een completed $y them. ?e
are of the opinion that the real cause ,hich tri44ered the filin4 of this
complaint $y the petitioners ,ho are related to one another, either $y
consan4uinity or affinity ,as due to the filin4 of a criminal complaint $y the
respondent .urora &ru3 a4ainst %eynaldo 5ercado, son of spouses
'ortunato 5ercado, 1r. and %osa 5ercado. 8n .pril 1D, accordin4 to
Jesus (avid, Pone &hairman of the locality ,here the petitioners and
respondent reside, petitioner 'ortunato 5ercado, 1r. asked for help
re4ardin4 the case of his son, %eynaldo, to talk ,ith respondent .urora
&ru3 and the said Pone &hairman also stated under oath that the
petitioners ,ere never re4ularly employed $y respondent .urora &ru3 $ut
,ere on)and)off hired to ,ork to render services ,hen needed.
25
. careful e>amination of the fore4oin4 statements reveals that the findin4s of the #a$or
.r$iter in the case are a$ly supported $y evidence. There is, therefore, no circumstance
that ,ould ,arrant a reversal of the ;uestioned decision of the #a$or .r$iter as affirmed
$y the "ational #a$or %elations &ommission.
The contention of petitioners that the second para4raph of .rticle 28E of the #a$or &ode
should have $een applied in their case presents an opportunity to clarify the afore)
mentioned provision of la,.
.rticle 28E of the #a$or &ode reads in full:
.rticle 28E. -e.ular and Casual 5mployment. O The provisions of ,ritten
a4reement to the contrary not,ithstandin4 and re4ardless of the oral
a4reement of the parties, an employment shall $e deemed to $e re4ular
,here the employee has $een en4a4ed to perform activities ,hich are
usually necessary or desira$le in the usual $usiness or trade of the
employer, e>cept ,here the employment has $een fi>ed for a specific
project or undertakin4 the completion or termination of ,hich has $een
determined at the time of the en4a4ement of the employee or ,here the
,ork or services to $e performed is seasonal in nature and the
employment is for the duration of the season.
.n employment shall $e deemed to $e casual if it is not covered $y the
precedin4 para4raph: <rovided, That, any employee ,ho has rendered at
least one year of service ,hether such service is continuous or $roken,
shall $e considered a re4ular employee ,ith respect to the activity in
,hich he is employed and his employment shall continue ,hile such
actually e>ists.
The first para4raph ans,ers the ;uestion of ,ho are employees. 8t states that,
re4ardless of any ,ritten or oral a4reement to the contrary, an employee is deemed
re4ular ,here he is en4a4ed in necessary or desira$le activities in the usual $usiness or
trade of the employer, e4cept for pro2ect employees.
. project employee has $een defined to $e one ,hose employment has $een fi>ed for a
specific project or undertakin4, the completion or termination of ,hich has $een
determined at the time of the en4a4ement of the employee, or ,here the ,ork or
service to $e performed is seasonal in nature and the employment is for the duration of
the season
2&
as in the present case.
The second para4raph of .rt. 28E demarcates as BcasualB employees, all other
employees ,ho do not fan under the definition of the precedin4 para4raph. The proviso,
in said second para4raph, deems as re4ular employees those BcasualB employees ,ho
have rendered at least one year of service re4ardless of the fact that such service may
$e continuous or $roken.
<etitioners, in effect, contend that the proviso in the second para4raph of .rt. 28E is
applica$le to their case and that the #a$or .r$iter should have considered them re4ular
$y virtue of said proviso. The contention is ,ithout merit.
The 4eneral rule is that the office of a proviso is to ;ualify or modify only the phrase
immediately precedin4 it or restrain or limit the 4enerality of the clause that it
immediately follo,s.
27
Thus, it has $een held that a proviso is to $e construed ,ith
reference to the immediately precedin4 part of the provision to ,hich it is attached, and
not to the statute itself or to other sections thereof.
28
The only e>ception to this rule is
,here the clear le4islative intent is to restrain or ;ualify not only the phrase immediately
precedin4 it (the proviso) $ut also earlier provisions of the statute or even the statute
itself as a ,hole.
29
<olicy 8nstruction "o. 12 of the (epartment of #a$or and :mployment discloses that the
concept of re4ular and casual employees ,as desi4ned to put an end to casual
employment in re4ular jo$s, ,hich has $een a$used $y many employers to prevent
called casuals from enjoyin4 the $enefits of re4ular employees or to prevent casuals
from joinin4 unions. The same instructions sho, that the proviso in the second
para4raph of .rt. 28E ,as not desi4ned to stifle small)scale $usinesses nor to oppress
a4ricultural land o,ners to further the interests of la$orers, ,hether a4ricultural or
industrial. ?hat it seeks to eliminate are a$uses of employers a4ainst their employees
and not, as petitioners ,ould have us $elieve, to prevent small)scale $usinesses from
en4a4in4 in le4itimate methods to reali3e profit. 2ence, the proviso is applica$le only to
the employees ,ho are deemed BcasualsB $ut not to the BprojectB employees nor the
re4ular employees treated in para4raph one of .rt. 28E.
&learly, therefore, petitioners $ein4 project employees, or, to use the correct
term, seasonal employees, their employment le4ally ends upon completion of the
project or the season. The termination of their employment cannot and should not
constitute an ille4al dismissal.
$0
?2:%:'-%:, the petition is (815811:(. The decision of the "ational #a$or %elations
&ommission affirmin4 that of the #a$or .r$iter, under revie,, is .''8%5:(. "o
pronouncement as to costs.
1- -%(:%:(.
'elencio#%errera )C*airperson+, ,aras and -e.alado, JJ., concur.
Sarmiento, J., on lea!e.
G.R. No. L'%8%9% #-?2ua23 5, 1990
BRENT SC)OOL, INC., an RE,. GABRIEL DIMAC)E, petitioners,
vs.
RONALDO @AMORA, tA- (2-s;-nt;a. Ass;stant :o2 L-ga. A::a;2s, O::;7- o: tA-
(2-s;-nt, an DOROTEO R. ALEGRE, respondents.
6uas*a, sperilla, nc*eta, ,e7a 8 "olasco for petitioners.
'auricio G. (omo.on for respondent le.re.

NAR,ASA, J.:
The ;uestion presented $y the proceedin4s at $ar
1
is ,hether or not the provisions of
the #a$or &ode,
2
as amended,
$
have anathemati3ed Bfi>ed period employmentB or
employment for a term.
The root of the controversy at $ar is an employment contract in virtue of ,hich (oroteo
%. .le4re ,as en4a4ed as athletic director $y 0rent 1chool, 8nc. at a yearly
compensation of <2E,EEE.EE.
%
The contract fi>ed a specific term for its e>istence, five
(!) years, i.e., from July 18, 1D1, the date of e>ecution of the a4reement, to July 1D,
1D+. 1u$se;uent su$sidiary a4reements dated 5arch 1!, 1D*, .u4ust 28, 1D*, and
1eptem$er 1/, 1D/ reiterated the same terms and conditions, includin4 the e>piry
date, as those contained in the ori4inal contract of July 18, 1D1.
5
1ome three months $efore the e>piration of the stipulated period, or more precisely on
.pril 2E,1D+, .le4re ,as 4iven a copy of the report filed $y 0rent 1chool ,ith the
(epartment of #a$or advisin4 of the termination of his services effective on July 1+,
1D+. The stated 4round for the termination ,as Bcompletion of contract, e>piration of
the definite period of employment.B .nd a month or so later, on 5ay 2+, 1D+, .le4re
accepted the amount of <*,1DD.D1, and si4ned a receipt therefor containin4 the phrase,
Bin full payment of services for the period 5ay 1+, to July 1D, 1D+ as full payment of
contract.B
2o,ever, at the investi4ation conducted $y a #a$or &onciliator of said report of
termination of his services, .le4re protested the announced termination of his
employment. 2e ar4ued that althou4h his contract did stipulate that the same ,ould
terminate on July 1D, 1D+, since *is ser!ices /ere necessary and desirable in t*e
usual business of *is employer, and his employment had lasted for five years, he had
ac;uired the status of a re4ular employee and could not $e removed e>cept for valid
cause.
&
The %e4ional (irector considered 0rent 1chool9s report as an applicationfor
clearance to terminate employment (not a report of termination), and acceptin4 the
recommendation of the #a$or &onciliator, refused to 4ive such clearance and instead
re;uired the reinstatement of .le4re, as a Bpermanent employee,B to his former position
,ithout loss of seniority ri4hts and ,ith full $ack ,a4es. The (irector pronounced Bthe
4round relied upon $y the respondent (0rent) in terminatin4 the services of the
complainant (.le4re) . . . (as) not sanctioned $y <.(. //2,B and, ;uite oddly, as
prohi$ited $y &ircular "o. 8, series of 1+, of the 0ureau of <rivate 1chools.
7
0rent 1chool filed a motion for reconsideration. The %e4ional (irector denied the
motion and for,arded the case to the 1ecretary of #a$or for revie,.
8
The latter
sustained the %e4ional (irector.
9
0rent appealed to the -ffice of the <resident. .4ain it
,as re$uffed. That -ffice dismissed its appeal for lack of merit and affirmed the #a$or
1ecretary9s decision, rulin4 that .le4re ,as a permanent employee ,ho could not $e
dismissed e>cept for just cause, and e>piration of the employment contract ,as not one
of the just causes provided in the #a$or &ode for termination of services.
10
The 1chool is no, $efore this &ourt in a last attempt at vindication. That it ,ill 4et here.
The employment contract $et,een 0rent 1chool and .le4re ,as e>ecuted on July 18,
1D1, at a time ,hen the #a$or &ode of the <hilippines (<.(. //2) had not yet $een
promul4ated. 8ndeed, the &ode did not come into effect until "ovem$er 1, 1D/, some
three years after the perfection of the employment contract, and ri4hts and o$li4ations
thereunder had arisen and $een mutually o$served and enforced.
.t that time, i.e., $efore the advent of the #a$or &ode, there ,as no dou$t ,hatever
a$out the validity of term employment. 8t ,as impliedly $ut nonetheless clearly
reco4ni3ed $y the Termination <ay #a,, %... 1E!2,
11
as amended $y %...
1D8D.
12
0asically, this statute provided thatO
8n cases of employment, ,ithout a definite period, in a commercial,
industrial, or a4ricultural esta$lishment or enterprise, the employer or the
employee may terminate at any time the employment ,ith just cause7 or
,ithout just cause in the case of an employee $y servin4 ,ritten notice on
the employer at least one month in advance, or in the case of an
employer, $y servin4 such notice to the employee at least one month in
advance or one)half month for every year of service of the employee,
,hichever is lon4er, a fraction of at least si> months $ein4 considered as
one ,hole year.
The employer, upon ,hom no such notice ,as served in case of
termination of employment ,ithout just cause, may hold the employee
lia$le for dama4es.
The employee, upon ,hom no such notice ,as served in case of
termination of employment ,ithout just cause, shall $e entitled to
compensation from the date of termination of his employment in an
amount e;uivalent to his salaries or ,a4es correspondin4 to the re;uired
period of notice.
There ,as, to repeat, clear al$eit implied reco4nition of the licitness of term
employment. %. 1D8D also enumerated ,hat it considered to $e just causes for
terminatin4 an employment /it*out a definite period, either $y the employer or $y the
employee ,ithout incurrin4 any lia$ility therefor.
<rior, thereto, it ,as the &ode of &ommerce ,hich 4overned employment ,ithout a
fi>ed period, and also implicitly ackno,led4ed the propriety of employment ,ith a fi>ed
period. 8ts .rticle *E2 provided that O
8n cases in ,hich the contract of employment does not have a fi>ed
period, any of the parties may terminate it, notifyin4 the other thereof one
month in advance.
The factor or shop clerk shall have a ri4ht, in this case, to the salary
correspondin4 to said month.
The salary for the month directed to $e 4iven $y the said .rticle *E2 of the &ode
of &ommerce to the factor or shop clerk, ,as kno,n as the mesada (from mes,
1panish for BmonthB). ?hen .rticle *E2 (to4ether ,ith many other provisions of
the &ode of &ommerce) ,as repealed $y the &ivil &ode of the <hilippines,
%epu$lic .ct "o. 1E!2 ,as enacted avo,edly for the precise purpose of
reinstatin4 the mesada.
"o,, the &ivil &ode of the <hilippines, ,hich ,as approved on June 18, 1/ and
$ecame effective on .u4ust *E,1!E, itself deals ,ith o$li4ations ,ith a period in
section 2, &hapter *, Title 8, 0ook 8=7 and ,ith contracts of la$or and for a piece of ,ork,
in 1ections 2 and *, &hapter *, Title =888, respectively, of 0ook 8=. "o prohi$ition a4ainst
term)or fi>ed)period employment is contained in any of its articles or is other,ise
deduci$le therefrom.
8t is plain then that ,hen the employment contract ,as si4ned $et,een 0rent 1chool
and .le4re on July 18, 1D1, it ,as perfectly le4itimate for them to include in it a
stipulation fi>in4 the duration thereof 1tipulations for a term ,ere e>plicitly reco4ni3ed
as valid $y this &ourt, for instance, in Biboso !. 3ictorias 'illin. Co., Inc., promul4ated
on 5arch *1, 1DD,
1$
and J. 0alter 9*ompson Co. (,*il.) !. "L-C, promul4ated on
(ecem$er 2, 18*.
1%
The 9*ompsoncase involved an e>ecutive ,ho had $een
en4a4ed for a fi>ed period of three (*) years. Biboso involved teachers in a private
school as re4ards ,hom, the follo,in4 pronouncement ,as made:
?hat is decisive is that petitioners (teachers) ,ere ,ell a,are an the time
that their tenure ,as for a limited duration. Fpon its termination, $oth
parties to the employment relationship ,ere free to rene, it or to let it
lapse. (p. 2!/)
Fnder .merican la,
15
the principle is the same. B?here a contract specifies the period
of its duration, it terminates on the e>piration of such period.B
1&
B. contract of
employment for a definite period terminates $y its o,n terms at the end of such
period.B
17
The status of le4itimacy continued to $e enjoyed $y fi>ed)period employment contracts
under the #a$or &ode (<residential (ecree "o. //2), ,hich ,ent into effect on
"ovem$er 1, 1D/. The &ode contained e>plicit references to fi4ed period
employment, or employment /it* a fi4ed or definite period. "evertheless, o$scuration of
the principle of licitness of term employment $e4an to take place at a$out this time
.rticle *2E, entitled B<ro$ationary and fi>ed period employment,B ori4inally stated that
the Btermination of employment of pro$ationary employees and t*ose employed 0I9%
FI:5( ,5-I$( shall $e su$ject to such re4ulations as the 1ecretary of #a$or may
prescri$e.B The asserted o$jective to ,as ;pre!ent t*e circum!ention of t*e ri.*t of t*e
employee to be secured in t*eir employment as provided . . . (in the &ode).B
.rticle *21 prescri$ed the just causes for ,hich an employer could terminate
Ban employment /it*out a definite period.B
.nd .rticle *1 undertook to define Bemployment ,ithout a fi>ed periodB in the follo,in4
manner:
18
.n employment s*all be deemed to be /it*out a definite period for
purposes of this &hapter ,here the employee has $een en4a4ed to
perform activities ,hich are usually necessary or desira$le in the usual
$usiness or trade of the employer, e>cept ,here the employment has
$een fi>ed for a specific project or undertakin4 the completion or
termination of ,hich has $een determined at the time of the en4a4ement
of the employee or ,here the ,ork or service to $e performed is seasonal
in nature and the employment is for the duration of the season.
The ;uestion immediately provoked $y a readin4 of .rticle *1 is ,hether or not a
voluntary a4reement on a fi>ed term or period ,ould $e valid ,here the employee Bhas
$een en4a4ed to perform activities ,hich are usually necessary or desira$le in the
usual $usiness or trade of the employer.B The definition seems a non se<uitur. 'rom the
premise O that the duties of an employee entail Bactivities ,hich are usually necessary
or desira$le in the usual $usiness or trade of the employer theB O conclusion does not
necessarily follo, that the employer and employee should $e for$idden to stipulate any
period of time for the performance of those activities. There is nothin4 essentially
contradictory $et,een a definite period of an employment contract and the nature of the
employee9s duties set do,n in that contract as $ein4 Busually necessary or desira$le in
the usual $usiness or trade of the employer.B The concept of the employee9s duties as
$ein4 Busually necessary or desira$le in the usual $usiness or trade of the employerB is
not synonymous ,ith or identical to employment ,ith a fi>ed term. #o4ically, the
decisive determinant in term employment should not $e the activities that the employee
is called upon to perform, $ut the day certain a4reed upon $y the parties for the
commencement and termination of their employment relationship, a day certain $ein4
understood to $e Bthat ,hich must necessarily come, althou4h it may not $e kno,n
,hen.B
19
Seasonalemployment, and employment for a particular pro2ect are merely
instances employment in ,hich a period, ,here not e>pressly set do,n, necessarily
implied.
-f course, the term O period has a definite and settled si4nification. 8t means, B#en4th
of e>istence7 duration. . point of time markin4 a termination as of a cause or an activity7
an end, a limit, a $ound7 conclusion7 termination. . series of years, months or days in
,hich somethin4 is completed. . time of definite len4th. . . . the period from one fi>ed
date to another fi>ed date . . .B
20
8t connotes a Bspace of time ,hich has an influence on
an o$li4ation as a result of a juridical act, and either suspends its demanda$leness or
produces its e>tin4uishment.B
21
8t should $e apparent that this settled and familiar
notion of a period, in the conte>t of a contract of employment, takes no account at all of
the nature of the duties of the employee7 it has a$solutely no relevance to the character
of his duties as $ein4 Busually necessary or desira$le to the usual $usiness of the
employer,B or not.
1u$se;uently, the fore4oin4 articles re4ardin4 employment ,ith Ba definite periodB and
Bre4ularB employment ,ere amended $y <residential (ecree "o. 8!E, effective
(ecem$er 1+, 1D!.
.rticle *2E, dealin4 ,ith B<ro$ationary and fi>ed period employment,B ,as altered
$y eliminatin. t*e reference to persons Bemployed ,ith a fi>ed period,B and ,as
renum$ered ($ecomin4 .rticle 2D1). The article
22
no, reads:
. . . ,robationary employment.O<ro$ationary employment shall not
e>ceed si> months from the date the employee started ,orkin4, unless it
is covered $y an apprenticeship a4reement stipulatin4 a lon4er period.
The services of an employee ,ho has $een en4a4ed in a pro$ationary
$asis may $e terminated for a just cause or ,hen he fails to ;ualify as a
re4ular employee in accordance ,ith reasona$le standards made kno,n
$y the employer to the employee at the time of his en4a4ement. .n
employee ,ho is allo,ed to ,ork after a pro$ationary period shall $e
considered a re4ular employee.
.lso amended $y <( 8!E ,as .rticle *1 (entitled B:mployment ,ith a fi>ed
period,B supra) $y (a) deletin. mention of employment ,ith a fi>ed or definite period, ($)
addin4 a 4eneral e>clusion clause declarin4 irrelevant ,ritten or oral a4reements Bto the
contrary,B and (c) makin4 the provision treat e>clusively of Bre4ularB and BcasualB
employment. .s revised, said article, renum$ered 2DE,
2$
no, reads:
. . . -e.ular and Casual 5mployment.=9*e pro!isions of /ritten
a.reement to t*e contrary not/it*standin. and re.ardless of t*e oral
a.reement of t*e parties, an employment shall $e deemed to $e re4ular
,here the employee has $een en4a4ed to perform activities ,hich are
usually necessary or desira$le in the usual $usiness or trade of the
employer e>cept ,here the employment has $een fi>ed for a specific
project or undertakin4 the completion or termination of ,hich has $een
determined at the time of the en4a4ement of the employee or ,here the
,ork or service to $e employed is seasonal in nature and the employment
is for the duration of the season.
.n employment shall $e deemed to he casual if it is not covered $y the
precedin4 para4raph: pro!ided,t*at, any employee ,ho has rendered at
least one year of service, ,hether such service is continuous or $roken,
shall $e considered a re4ular employee ,ith respect to the activity in
,hich he is employed and his employment shall continue ,hile such
actually e>ists.
The first para4raph is identical to .rticle *1 e>cept that, as just mentioned, a
clause has $een added, to ,it: BThe provisions of ,ritten a4reement to the
contrary not,ithstandin4 and re4ardless of the oral a4reements of the
parties . . .B The clause ,ould appear to $e addressed inter alia to a4reements
fi>in4 a definite period for employment. There is ,ithal no clear indication of the
intent to deny validity to employment for a definite period. 8ndeed, not only is the
concept of re4ular employment not essentially inconsistent ,ith employment for a
fi>ed term, as a$ove pointed out, rticle >?> of the #a$or &ode, as amended $y
said <( 8!E, still impliedly ackno,led4ed the propriety of term employment: it
listed the Bjust causesB for ,hich Ban employer may terminate employment
/it*out a definite period,B thus 4ivin4 rise to the inference that if the employment
$e ,ith a definite period, there need $e no just cause for termination thereof if the
4round $e precisely the e>piration of the term a4reed upon $y the parties for the
duration of such employment.
1till later, ho,ever, said rticle >?> (formerly .rticle *21) ,as further amended $y Batas
,ambansa Bilan. 1*E,
2%
to eliminate alto4ether reference to employment ,ithout a
definite period. .s lastly amended, the openin4 lines of the article (renum$ered 28*),
no, pertinently read: B.n employer may terminate an employment for any of the
follo,in4 just causes: . . . B 0< 1*E thus completed the elimination of every reference in
the #a$or &ode, e>press or implied, to employment ,ith a fi>ed or definite period or
term.
8t is in the li4ht of the fore4oin4 description of the development of the provisions of the
#a$or &ode $earin4 on term or fi>ed)period employment that the ;uestion posed in the
openin4 para4raph of this opinion should no, $e addressed. 8s it then the le4islative
intention to outla, stipulations in employment contracts layin4 do,n a definite period
thereforQ .re such stipulations in essence contrary to pu$lic policy and should not on
this account $e accorded le4itimacyQ
-n the one hand, there is the 4radual and pro4ressive elimination of references to term
or fi>ed)period employment in the #a$or &ode, and the specific statement of the
rule
25
thatO
. . . -e.ular and Casual 5mployment.= 9*e pro!isions of /ritten
a.reement to t*e contrary not/it*standin. and re.ardless of t*e oral
a.reement of t*e parties, an employment shall $e deemed to $e re4ular
,here the employee has $een en4a4ed to perform activities ,hich are
usually necessary or desira$le in the usual $usiness or trade of the
employer e>cept ,here the employment has $een fi>ed for a specific
project or undertakin4 the completion or termination of ,hich has $een
determined at the time of the en4a4ement of the employee or ,here the
,ork or service to $e employed is seasonal in nature and the employment
is for the duration of the season.
.n employment shall $e deemed to $e casual if it is not covered $y the
precedin4 para4raph: pro!ided,t*at, any employee ,ho has rendered at
least one year of service, ,hether such service is continuous or $roken,
shall $e considered a re4ular employee ,ith respect to the activity in
,hich he is employed and his employment shall continue ,hile such
actually e>ists.
There is, on the other hand, the &ivil &ode, ,hich has al,ays reco4ni3ed, and
continues to reco4ni3e, the validity and propriety of contracts and o$li4ations ,ith a
fi>ed or definite period, and imposes no restraints on the freedom of the parties to fi> the
duration of a contract, ,hatever its o$ject, $e it specie, 4oods or services, e>cept the
4eneral admonition a4ainst stipulations contrary to la,, morals, 4ood customs, pu$lic
order or pu$lic policy.
2&
Fnder the &ivil &ode, therefore, and as a 4eneral proposition,
fi>ed)term employment contracts are not limited, as they are under the present #a$or
&ode, to those $y nature seasonal or for specific projects ,ith pre)determined dates of
completion7 they also include those to ,hich the parties $y free choice have assi4ned a
specific date of termination.
1ome familiar e>amples may $e cited of employment contracts ,hich may $e neither for
seasonal ,ork nor for specific projects, $ut to ,hich a fi>ed term is an essential and
natural appurtenance: overseas employment contracts, for one, to ,hich, ,hatever the
nature of the en4a4ement, the concept of re4ular employment ,ill all that it implies does
not appear ever to have $een applied, .rticle 28E of the #a$or &ode not ,ithstandin47
also appointments to the positions of dean, assistant dean, colle4e secretary, principal,
and other administrative offices in educational institutions, ,hich are $y practice or
tradition rotated amon4 the faculty mem$ers, and ,here fi>ed terms are a necessity,
,ithout ,hich no reasona$le rotation ,ould $e possi$le. 1imilarly, despite the provisions
of .rticle 28E, <olicy, 8nstructions "o. 8 of the 5inister of #a$or
27
implicitly reco4ni3e
that certain company officials may $e elected for ,hat ,ould amount to fi>ed periods, at
the e>piration of ,hich they ,ould have to stand do,n, in providin4 that these
officials,B . . . may lose their jo$s as president, e>ecutive vice)president or vice)
president, etc. $ecause the stockholders or the $oard of directors for one reason or
another did not re)elect them.B
There can of course $e no ;uarrel ,ith the proposition that ,here from the
circumstances it is apparent that periods have $een imposed to preclude ac;uisition of
tenurial security $y the employee, they should $e struck do,n or disre4arded as
contrary to pu$lic policy, morals, etc. 0ut ,here no such intent to circumvent the la, is
sho,n, or stated other,ise, ,here the reason for the la, does not e>ist, e.4., ,here it is
indeed the employee himself ,ho insists upon a period or ,here the nature of the
en4a4ement is such that, ,ithout $ein4 seasonal or for a specific project, a definite date
of termination is a sine <ua non, ,ould an a4reement fi>in4 a period $e essentially evil
or illicit, therefore anathemaQ ?ould such an a4reement come ,ithin the scope of
.rticle 28E ,hich admittedly ,as enacted Bto prevent the circumvention of the ri4ht of
the employee to $e secured in . . . (his) employmentQB
.s it is evident from even only the three e>amples already 4iven that .rticle 28E of the
#a$or &ode, under a narro, and literal interpretation, not only fails to e>haust the 4amut
of employment contracts to ,hich the lack of a fi>ed period ,ould $e an anomaly, $ut
,ould also appear to restrict, ,ithout reasona$le distinctions, the ri4ht of an employee
to freely stipulate ,ith his employer the duration of his en4a4ement, it lo4ically follo,s
that such a literal interpretation should $e esche,ed or avoided. The la, must $e 4iven
a reasona$le interpretation, to preclude a$surdity in its application. -utla,in4 the ,hole
concept of term employment and su$vertin4 to $oot the principle of freedom of contract
to remedy the evil of employer9s usin4 it as a means to prevent their employees from
o$tainin4 security of tenure is like cuttin4 off the nose to spite the face or, more
relevantly, curin4 a headache $y loppin4 off the head.
8t is a salutary principle in statutory construction that there e>ists a valid
presumption that undesira$le conse;uences ,ere never intended $y a
le4islative measure, and that a construction of ,hich the statute is fairly
suscepti$le is favored, ,hich ,ill avoid all o$jeciona$le mischievous,
undefensi$le, ,ron4ful, evil and injurious conse;uences.
28
"othin4 is $etter settled than that courts are not to 4ive ,ords a meanin4
,hich ,ould lead to a$surd or unreasona$le conse;uences. That s a
principle that does $ack to 8n re .llen decided oil -cto$er 2D, 1E*, ,here
it ,as held that a literal interpretation is to $e rejected if it ,ould $e unjust
or lead to a$surd results. That is a stron4 ar4ument a4ainst its adoption.
The ,ords of Justice #aurel are particularly apt. Thus: BThe fact that the
construction placed upon the statute $y the appellants ,ould lead to an
a$surdity is another ar4ument for rejectin4 it. . . .B
29
. . . ?e have, here, then a case ,here the true intent of the la, is clear
that calls for the application of the cardinal rule of statutory construction
that such intent of spirit must prevail over the letter thereof, for ,hatever is
,ithin the spirit of a statute is ,ithin the statute, since adherence to the
letter ,ould result in a$surdity, injustice and contradictions and ,ould
defeat the plain and vital purpose of the statute.
$0
.ccordin4ly, and since the entire purpose $ehind the development of le4islation
culminatin4 in the present .rticle 28E of the #a$or &ode clearly appears to have $een,
as already o$served, to prevent circumvention of the employee9s ri4ht to $e secure in
his tenure, the clause in said article indiscriminately and completely rulin4 out all ,ritten
or oral a4reements conflictin4 ,ith the concept of re4ular employment as defined
therein should $e construed to refer to the su$stantive evil that the &ode itself has
sin4led out: a4reements entered into precisely to circumvent security of tenure. 8t should
have no application to instances ,here a fi>ed period of employment ,as a4reed upon
kno,in4ly and voluntarily $y the parties, ,ithout any force, duress or improper pressure
$ein4 $rou4ht to $ear upon the employee and a$sent any other circumstances vitiatin4
his consent, or ,here it satisfactorily appears that the employer and employee dealt
,ith each other on more or less e;ual terms ,ith no moral dominance ,hatever $ein4
e>ercised $y the former over the latter. Fnless thus limited in its purvie,, the la, ,ould
$e made to apply to purposes other than those e>plicitly stated $y its framers7 it thus
$ecomes pointless and ar$itrary, unjust in its effects and apt to lead to a$surd and
unintended conse;uences.
1uch interpretation puts the seal on Bibiso
$1
upon the effect of the e>piry of an a4reed
period of employment as still 4ood ruleOa rule reaffirmed in the recent case
of 5scudero !s. $ffice of t*e ,resident (@.%. "o. !D822, .pril 2+, 18) ,here, in the
fairly analo4ous case of a teacher $ein4 served $y her school a notice of termination
follo,in4 the e>piration of the last of three successive fi>ed)term employment contracts,
the &ourt held:
%eyes (the teacher9s) ar4ument is not persuasive. 8t loses si4ht of the fact
that her employment ,as pro$ationary, contractual in nature, and one ,ith
a definitive period. .t the e>piration of the period stipulated in the contract,
her appointment ,as deemed terminated and the letter informin4 her of
the non)rene,al of her contract is not a condition sine <ua non $efore
%eyes may $e deemed to have ceased in the employ of petitioner F1T.
The notice is a mere reminder that %eyes9 contract of employment ,as
due to e>pire and that the contract ,ould no lon4er $e rene,ed. 8t is not a
letter of termination. The interpretation that the notice is only a reminder is
consistent ,ith the court9s findin4 inLaba2o supra. ...
$2
<araphrasin4 5scudero, respondent .le4re9s employment ,as terminated upon the
e>piration of his last contract ,ith 0rent 1chool on July 1+, 1D+ ,ithout the necessity
of any notice. The advance ,ritten advice 4iven the (epartment of #a$or ,ith copy to
said petitioner ,as a mere reminder of the impendin4 e>piration of his contract, not a
letter of termination, nor an application for clearance to terminate ,hich needed the
approval of the (epartment of #a$or to make the termination of his services effective. 8n
any case, such clearance should properly have $een 4iven, not denied.
?2:%:'-%:, the pu$lic respondent9s (ecision complained of is %:=:%1:( and 1:T
.18(:. %espondent .le4re9s contract of employment ,ith 0rent 1chool havin4 la,fully
terminated ,ith and $y reason of the e>piration of the a4reed term of period thereof, he
is declared not entitled to reinstatement and the other relief a,arded and confirmed on
appeal in the proceedin4s $elo,. "o pronouncement as to costs.
1- -%(:%:(.
'elencio#%errera, Gutierrez, Jr., Cruz, ,aras, Feliciano, Gancayco, ,adilla, Bidin,
Cort@s, Gri7o#<uino, 'edialdea and -e.alado, JJ., concur.
Fernan, C.J., too& no part.

0G.R. No. 122&5$. D-7-8?-2 12, 19974
(*RE #OODS COR(ORATON, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, RODOL#O CORDO,A, ,IOLETA CR*SIS, ET
AL.,
*
respondents.
D E C I S I O N
DA,IDE, 1R., J.=
The cru> of this petition for certiorari is the issue of ,hether employees hired for a definite period and
,hose services are necessary and desira$le in the usual $usiness or trade of the employer are re4ular
employees.
The private respondents (num$erin4 E+) ,ere hired $y petitioner <ure 'oods &orporation to ,ork
for a fi>ed period of five months at its tuna cannery plant in Tam$ler, @eneral 1antos &ity. .fter the
e>piration of their respective contracts of employment in June and July 11, their services ,ere
terminated. They forth,ith e>ecuted a J%elease and AuitclaimK statin4 that they had no claim ,hatsoever
a4ainst the petitioner.
-n 2 July 11, the private respondents filed $efore the "ational #a$or %elations &ommission
("#%&) 1u$)%e4ional .r$itration 0ranch "o. R8, @eneral 1antos &ity, a complaint for ille4al dismissal
a4ainst the petitioner and its plant mana4er, 5arciano .4anon.
G1H
This case ,as docketed as %.0)11)E8)
!E28/)1.
-n 2* (ecem$er 12, #a$or .r$iter .rturo <. .ponesto handed do,n a decision
G2H
dismissin4 the
complaint on the 4round that the private respondents ,ere mere contractual ,orkers, and not re4ular
employees7 hence, they could not avail of the la, on security of tenure. The termination of their services
$y reason of the e>piration of their contracts of employment ,as, therefore, justified. 2e pointed out that
earlier he had dismissed a case entitled J#akas n4 .nak)<a,is) "-?5 !. <ure 'oods &orp.K (&ase "o.
%.0)11)E2)EEE88)88) $ecause the complainants therein ,ere not re4ular employees of <ure 'oods, as
their contracts of employment ,ere for a fi>ed period of five months. 5oreover, in another case involvin4
the same contractual ,orkers of <ure 'oods (&ase "o. %)1+)%-R8) 5:() F%)!!)8), then 1ecretary of
#a$or %u$en Torres held, in a %esolution dated *E .pril 1E, that the said contractual ,orkers ,ere not
re4ular employees.
The #a$or .r$iter also o$served that an order for private respondentsI reinstatement ,ould result in
the reemployment of more than 1E,EEE former contractual employees of the petitioner. 0esides, $y
e>ecutin4 a J%elease and Auitclaim,K the private respondents had ,aived and relin;uished ,hatever ri4ht
they mi4ht have a4ainst the petitioner.
The private respondents appealed from the decision to the "ational #a$or %elations &ommission
("#%&), 'ifth (ivision, in &a4ayan de -ro &ity, ,hich docketed the case as "#%& &. "o. 5)EE1*2*)*.
-n 28 -cto$er 1/, the "#%& affirmed the #a$or .r$iter9s decision.
G*H
2o,ever, on private
respondentsI motion for reconsideration, the "#%& rendered another decision on *E January
1!
G/H
vacatin4 and settin4 aside its decision of 28 -cto$er 1/ and holdin4 that the private
respondents and their co)complainants ,ere re4ular employees. 8t declared that the contract of
employment for five months ,as a Jclandestine scheme employed $y Gthe petitionerH to stifle Gprivate
respondentsIH ri4ht to security of tenureK and should therefore $e struck do,n and disre4arded for $ein4
contrary to la,, pu$lic policy, and morals. 2ence, their dismissal on account of the e>piration of their
respective contracts ,as ille4al.
.ccordin4ly, the "#%& ordered the petitioner to reinstate the private respondents to their former
position ,ithout loss of seniority ri4hts and other privile4es, ,ith full $ack ,a4es7 and in case their
reinstatement ,ould no lon4er $e feasi$le, the petitioner should pay them separation pay e;uivalent to
one)month pay or one)half)month pay for every year of service, ,hichever is hi4her, ,ith $ack ,a4es
and 1EL of the monetary a,ard as attorneyIs fees.
8ts motion for reconsideration havin4 $een denied,
G!H
the petitioner came to this &ourt contendin4 that
respondent "#%& committed 4rave a$use of discretion amountin4 to lack of jurisdiction in reversin4 the
decision of the #a$or .r$iter.
The petitioner su$mits that the private respondents are no, estopped from ;uestionin4 their
separation from petitionerIs employ in vie, of their e>press conformity ,ith the five)month duration of their
employment contracts. 0esides, they fell ,ithin the e>ception provided in .rticle 28E of the #a$or &ode
,hich reads: JG:H>cept ,here the employment has $een fi>ed for a specific project or undertakin4 the
completion or termination of ,hich has $een determined at the time of the en4a4ement of the employee.K
5oreover, the first para4raph of the said article must $e read and interpreted in conjunction ,ith the
proviso in the second para4raph, ,hich reads: J<rovided that any employee ,ho has rendered at least
one year of service, ,hether such service is continuous or $roken, shall $e considered a re4ular
employee ,ith respect to the activity in ,hich he is employed....K 8n the instant case, the private
respondents ,ere employed for a period of five months only. 8n any event, private respondents9 prayer for
reinstatement is ,ell ,ithin the purvie, of the J%elease and AuitclaimK they had e>ecuted ,herein they
unconditionally released the petitioner from any and all other claims ,hich mi4ht have arisen from their
past employment ,ith the petitioner.
8n its &omment, the -ffice of the 1olicitor @eneral (-1@) advances the ar4ument that the private
respondents ,ere re4ular employees, since they performed activities necessary and desira$le in the
$usiness or trade of the petitioner. The period of employment stipulated in the contracts of employment
,as null and void for $ein4 contrary to la, and pu$lic policy, as its purpose ,as to circumvent the la, on
security of tenure. The e>piration of the contract did not, therefore, justify the termination of their
employment.
The -1@ further maintains that the rulin4 of the then 1ecretary of #a$or and :mployment in #.<)
"-?5 v. <ure 'oods &orporation is not $indin4 on this &ourt7 neither is that rulin4 controllin4, as the
said case involved certification election and not the issue of the nature of private respondentsI
employment. 8t also considers private respondentsI ;uitclaim as ineffective to $ar the enforcement for the
full measure of their le4al ri4hts.
The private respondents, on the other hand, ar4ue that contracts ,ith a specific period of
employment may $e 4iven le4al effect provided, ho,ever, that they are not intended to circumvent the
constitutional 4uarantee on security of tenure. They su$mit that the practice of the petitioner in hirin4
,orkers to ,ork for a fi>ed duration of five months only to replace them ,ith other ,orkers of the same
employment duration ,as apparently to prevent the re4ulari3ation of these so)called Jcasuals,K ,hich is a
clear circumvention of the la, on security of tenure.
?e find the petition devoid of merit.
.rticle 28E of the #a$or &ode defines re4ular and casual employment as follo,s:
ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the contrary
notwithstanding and regardless of the oral argument of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer, ecept where the employment has been
fied for a specific pro!ect or underta"ing the completion or termination of which has been
determined at the time of the engagement of the employee or where the wor" or services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph# $rovided, That, any employee who has rendered at least one year of service, whether
such service is continuous or bro"en, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity eists.
Thus, the t,o kinds of re4ular employees are (1) those ,ho are en4a4ed to perform activities ,hich
are necessary or desira$le in the usual $usiness or trade of the employer7 and (2) those casual
employees ,ho have rendered at least one year of service, ,hether continuous or $roken, ,ith respect to
the activity in ,hich they are employed.
G+H
8n the instant case, the private respondentsI activities consisted in the receivin4, skinnin4, loinin4,
packin4, and casin4)up of tuna fish ,hich ,ere then e>ported $y the petitioner. 8ndisputa$ly, they ,ere
performin4 activities ,hich ,ere necessary and desira$le in petitionerIs $usiness or trade.
&ontrary to petitioner9s su$mission, the private respondents could not $e re4arded as havin4 $een
hired for a specific project or undertakin4. The term Jspecific project or undertakin4K under .rticle 28E of
the #a$or &ode contemplates an activity ,hich is not commonly or ha$itually performed or such type of
,ork ,hich is not done on a daily $asis $ut only for a specific duration of time or until completion7 the
services employed are then necessary and desira$le in the employerIs usual $usiness only for the
period of time it takes to complete the project.
GDH
The fact that the petitioner repeatedly and continuously hired ,orkers to do the same kind of ,ork
as that performed $y those ,hose contracts had e>pired ne4ates petitionerIs contention that those
,orkers ,ere hired for a specific project or undertakin4 only.
"o, on the validity of private respondents9 five)month contracts of employment. 8n the leadin4 case
of 0rent 1chool, 8nc. !. Pamora,
G8H
,hich ,as reaffirmed in numerous su$se;uent cases,
GH
this &ourt has
upheld the le4ality of fi>ed)term employment. 8t ruled that the decisive determinant in term employment
should not $e the activities that the employee is called upon to perform $ut the day certain a4reed upon
$y the parties for the commencement and termination of their employment relationship. 0ut, this &ourt
,ent on to say that ,here from the circumstances it is apparent that the periods have $een imposed to
preclude ac;uisition of tenurial security $y the employee, they should $e struck do,n or disre4arded as
contrary to pu$lic policy and morals.
Brent also laid do,n the criteria under ,hich term employment cannot $e said to $e in circumvention
of the la, on security of tenure:
%& The fied period of employment was "nowingly 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& 't satisfactorily appears that the employer and the employee dealt with each other on more or less
e(ual terms with no moral dominance eercised by the former or the latter.
"one of these criteria had $een met in the present case. .s pointed out $y the private respondents:
)'*t could not be supposed that private respondents and all other so-called +casual, wor"ers of )the
petitioner* -./0'.123 and 4/25.TAR'23 agreed to the 6-month employment
contract. 7annery wor"ers are never on e(ual terms with their employers. Almost always, they
agree to any terms of an employment contract !ust to get employed considering that it is difficult to
find wor" given their ordinary (ualifications. Their freedom to contract is empty and hollow because
theirs is the freedom to starve if they refuse to wor" as casual or contractual wor"ers. 'ndeed, to the
unemployed, security of tenure has no value. 't could not then be said that petitioner and private
respondents 8dealt with each other on more or less e(ual terms with no moral dominance whatever
being eercised by the former over the latter.
)%0*
The petitioner does not deny or re$ut private respondents9 averments (1) that the main $ulk of its
,orkforce consisted of its so)called JcasualK employees7 (2) that as of July 11, JcasualK ,orkers
num$ered 1,8*!7 and re4ular employees, 2+*7 (*) that the company hired JcasualK every month for the
duration of five months, after ,hich their services ,ere terminated and they ,ere replaced $y other
JcasualK employees on the same five)month duration7 and (/) that these JcasualK employees ,ere actually
doin4 ,ork that ,ere necessary and desira$le in petitionerIs usual $usiness.
.s a matter of fact, the petitioner even stated in its position paper su$mitted to the #a$or .r$iter that,
accordin4 to its records, the previous employees of the company hired on a five)month $asis num$ered
a$out 1E,EEE as of July 1E. This confirms private respondentsI alle4ation that it ,as really the practice
of the company to hire ,orkers on a uniformly fi>ed contract $asis and replace them upon the e>piration
of their contracts ,ith other ,orkers on the same employment duration.
This scheme of the petitioner ,as apparently desi4ned to prevent the private respondents and the
other JcasualK employees from attainin4 the status of a re4ular employee. 8t ,as a clear circumvention of
the employeesI ri4ht to security of tenure and to other $enefits like minimum ,a4e, cost)of)livin4
allo,ance, sick leave, holiday pay, and 1*th month pay.
G11H
8ndeed, the petitioner succeeded in evadin4 the
application of la$or la,s. .lso, it saved itself from the trou$le or $urden of esta$lishin4 a just cause for
terminatin4 employees $y the simple e>pedient of refusin4 to rene, the employment contracts.
The five)month period specified in private respondentsI employment contracts havin4 $een imposed
precisely to circumvent the constitutional 4uarantee on security of tenure should, therefore, $e struck
do,n or disre4arded as contrary to pu$lic policy or morals.
G12H
To uphold the contractual arran4ement
$et,een the petitioner and the private respondents ,ould, in effect, permit the former to avoid hirin4
permanent or re4ular employees $y simply hirin4 them on a temporary or casual $asis, there$y violatin4
the employeesI security of tenure in their jo$s.
G1*H
The e>ecution $y the private respondents of a J%elease and AuitclaimK did not preclude them from
;uestionin4 the termination of their services. @enerally, ;uitclaims $y la$orers are fro,ned upon as
contrary to pu$lic policy and are held to $e ineffective to $ar recovery for the full measure of the ,orkersI
ri4hts.
G1/H
The reason for the rule is that the employer and the employee do not stand on the same footin4.
G1!H
"ota$ly, the private respondents lost no time in filin4 a complaint for ille4al dismissal. This act is
hardly e>pected from employees ,ho voluntarily and freely consented to their dismissal.
G1+H
The "#%& ,as, thus, correct in findin4 that the private respondents ,ere re4ular employees and that
they ,ere ille4ally dismissed from their jo$s. Fnder .rticle 2D of the #a$or &ode and the recent
jurisprudence,
G1DH
the le4al conse;uence of ille4al dismissal is reinstatement ,ithout loss of seniority ri4hts
and other privile4es, ,ith full $ack ,a4es computed from the time of dismissal up to the time of actual
reinstatement, ,ithout deductin4 the earnin4s derived else,here pendin4 the resolution of the case.
2o,ever, since reinstatement is no lon4er possi$le $ecause the petitioner9s tuna cannery plant had,
admittedly, $een closed in "ovem$er 1/,
G18H
the proper a,ard is separation pay e;uivalent to one month
pay or one)half month pay for every year of service, ,hichever is hi4her, to $e computed from the
commencement of their employment up to the closure of the tuna cannery plant. The amount of $ack
,a4es must $e computed from the time the private respondents ,ere dismissed until the time petitioner9s
cannery plant ceased operation.
G1H
>)ERE#ORE, for lack of merit, the instant petition is (815811:( and the challen4ed decision of *E
January 1! of the "ational #a$or %elations &ommission in "#%& &. "o. 5)EE1*2*)* is here$y
.''8%5:( su$ject to the a$ove modification on the computation of the separation pay and $ack ,a4es.
SO ORDERED.
Bellosillo, 3itu., and Kapunan, JJ., concur.
G.R. No. L'5$%5$ 1anua23 22, 198&
MANILA )OTEL COR(ORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION an RENATO L. CR*@, respondents.
C*E,AS, J.:
This petition for certiorari seeks the revie, and reversal of the decision of respondent
"ational #a$or %elations &ommission ("#%&) dated January 11, 1D8, ,hich affirmed
in toto the decision of the #a$or .r$iter orderin4 petitioner 5anila 2otel &orporation to
reinstate private respondent %enato #. &ru3 Bto his former position as 4ardener ,ithout
loss of seniority ri4hts and other privile4es appertainin4 thereto if any, ,ith $ack,a4es
from the date of his dismissal on 5arch 1, 1DD until he is actually reinstatedB, and Bto
immediately reclassify him as a re4ular or permanent employeeB.
%enato #. &ru3 ,as employed as 4ardener $y 5anila 2otel on Bpro$ation statusB
effective 1eptem$er 22, 1D+. The appointment ,hich ,as si4ned $y &ru3 provided,
inter alia:
1. ...
2. Nour compensation ,ill $e '-F% 2F"(%:( <:1-1 (</EE.EE) per month paya$le
semi)monthly.
*. This employment is for a pro$ationary period of si> (+) months and su$ject to your
su$mittin4 all necessary ,ork permits and clearances such as medical and security
clearances. Nour jo$ performance and efficiency upon the e>piration of your pro$ation
shall $e revie,ed and appraised in accordance ,ith the 2-T:#9s and other 4enerally
accepted ,ork standards. 8f you have satisfactorily passed your pro$ation, you ,ill $e
reclassified to the re4ular roll.
/. .s soon as you $ecome a re4ular employee, you ,ill $e entitled to (a) num$er of
$enefits and privile4es that have $een instituted.
1
-n 5arch 2E, 1DD, or a day $efore the e>piration of the pro$ationary period, &ru39s
position ,as Ba$olishedB $y 5anila 2otel alle4edly due to economic reverses or
$usiness recession, and to salva4e the enterprise from imminent dan4er of collapse.
2
.nent said reason for his termination andCor a$olition, private respondent maintains that
O
-n 5arch 1, 1DD, at the close of office hours, 5r. %odri4ue3 called complainant &ru3
and the other three (*) 4ardeners (%ufino .rcis, .l$ert 5anila and .rthur %eyes) ,ho
,ere also under a <ro$ationary .ppointment and told them to immediately tender their
respective resi4nation, $ecause alle4edly the 2otel ,as under a 9retrenchment policy9.
The announcement ,as a $lo, to 5r. &ru3. 8n t,o days he ,ould have finished his
pro$ationary period, and he hoped to $e reclassified as a re4ular employee. :arlier, that
mornin4, 5r. %odri4ue3 had just commended him for his jo$ performance and had
desi4nated him B8n)&har4eB or #ead @ardener. 5r. &ru3 re;uested additional time to
think it over. The re;uest ,as i4nored. 5r. %odri4ue3 informed them that as of that day
they ,ere terminated.
The follo,in4 day, 5r. &ru3 reported for ,ork nonetheless. 2o,ever, his
time card ,as no lon4er in the card rack. 'rom then on 5r. &ru3
em$arked on a daily trip to 5anila 2otel desperately hopin4 that his short
$ut commenda$le jo$ performance ,ould earn him a ne, appointment. 8t
,as a fruitless effort for al,ays, mana4ement9s reply ,as that 9no position
,as availa$le ,hich suited his ;ualification9. 8t has $een so to the present.
8ronically, he later learned of .rcis9 and 5anila9s promotion to 1te,ard and
%eyes9 retention as sole 4ardener.
$
1ometime on 5arch 2/, 1DD, private respondent ,as upon his re;uest, 4ranted a
personal clearance.
%
&laimin4 that his dismissal ,as ille4al and constitutes unfair la$or practice, &ru3 filed
,ith the %e4ional -ffice "o. 8=, (epartment (no, 5inistry) of #a$or on 5arch 2!,1DD a
complaint a4ainst petitioner 5anila 2otel.
5
The case ,as certified for compulsory
ar$itration.
-n (ecem$er 2, 1DD, #a$or .r$iter &onrado 0. 5a4laya rendered a decision
&
the
dispositive portion of ,hich reads as follo,s:
?2:%:'-%:, premises considered, respondent 5anila 2otel is here$y
-%(:%:( to reinstate complainant %enato #. &ru3 to his former position
as @ardener ,ithout loss of seniority ri4hts and other privile4es
appertainin4 thereto if any, ,ith $ack,a4es from the date of his dismissal
on 5arch 1, 1DD until he is actually reinstated.
%espondent is like,ise -%(:%:( upon reinstatement of complainant, to
immediately reclassify him as a re4ular or permanent employee and issue
therefor the correspondin4 appointment. %espondent is further -%(:%:(
to su$mit proof of compliance ,ith these orders immediately thereafter.
<etitioner appealed to the "ational #a$or %elations &ommission ("#%&).
7
.nd the
latter affirmed in toto the decision
8
of the #a$or .r$iter there$y dismissin4 petitioner9s
appeal for lack of merit.
<etitioner no, contends that respondent &ommission (1) un,arrantedly disre4arded the
fact that private respondent ,as a mere pro$ationary employee ,hose position could $e
a$olished for cause7 (2) unjustifia$ly refused to consider the serious $usiness reverses
and uneconomic operation as a valid and just cause for terminatin4 services of a
pro$ationary employee or a$olishin4 his position upon the e>piration of the pro$ationary
employment7 and (*) erroneously and ille4ally coerce petitioner into retainin4 private
respondent and payin4 him $ack,a4es even lon4 after the e>piration of the
pro$ationary employment not,ithstandin4 the validity of a$olition of private respondent9s
position and ,ithout 4ivin4 petitioner the ri4ht or opportunity to evaluate the
performance of the private respondent prior to reclassification of his position to re4ular
status.
8n a %esolution promul4ated on .pril 11, 18E, ?e resolved to re;uire respondents to
comment on the petition ,ithout ho,ever 4ivin4 due course thereto. ?e like,ise issued
a restrainin4 order enjoinin4 "#%& from e>ecutin4 the decision complained of until after
the instant petition shall have $een finally resolved.
There is no dispute that as a pro$ationary employee, private respondent &ru3 had $ut a
limited tenure. .lthou4h on pro$ationary $asis, ho,ever, &ru3 still enjoys the
constitutional protection on security of tenure. (urin4 his tenure of employment
therefore or $efore his contract e>pires, respondent &ru3 cannot $e removed e>cept for
cause as provided for $y la,. This is cate4orically provided for $y .rt. 282 of the #a$or
&ode, ,hich states:
.rt. 282. <ro$ationary :mployment) <ro$ationary employment shall not
e>ceed si> (+) mo nths from the date the employee started ,orkin4,
unless it is covered $y apprenticeship a4reement stipulatin4 a lon4er
period. The services of an employee ,ho has $een en4a4ed on a
pro$ationary $asis may $e terminated for a just cause or ,hen he fails to
;ualify as a re4ular employee in accordance ,ith reasona$le standards,
made kno,n $y the employer to the employee at the time of his
en4a4ement. .n employee ,ho is allo,ed to ,ork after a pro$ationary
period shall $e considered a re4ular employee. (:mphasis supplied)
This security of tenure of a pro$ationary employee finds added support in the Biboso
!s. 3ictorias 'inin. case9 for even as this &ourt ruled in that case that the respondent
pu$lic official did not commit 4rave a$use of discretion in dismissin4 the teachers9 claim
for reinstatement follo,in4 the e>piration of their contracts, it nevertheless held that)
2. This is $y no means to assert that the security of tenure protection of the &onstitution
does not apply to pro$ationary employees. The #a$or &ode has ,isely provided for
such a case thus: 9the termination of employment of pro$ational employees and those
employed ,ith a fi>ed period shall $e su$ject to such re4ulations as the 1ecretary of
#a$or may prescri$e to prevent the circumvention of the ri4ht of the employees to $e
secured in their employment as provided herein9. There is no ;uestion here as noted in
the assailed order of <residential :>ecutive .ssistant &lave, that petitioners did not
enjoy a permanent status. (urin4 such period they could remain in their position and
any circumvention of their ri4hts, in accordance ,ith the statutory scheme, su$ject to
in;uiry and thereafter correction $y the (epartment of #a$or. Thus there ,as the
safe4uard as to their duration of employment $ein4 respected, To that e>tent, their
tenure ,as secure. ...
9
This $rin4s us to the issue of ,hether or not, respondent &ru39s termination andCor
a$olition of his position made on a justifia$le cause. <etitioner justifies such termination
on 4round of retrenchment. %espondent "#%& found this defense untena$le. ?e
a4ree, since an e>amination of the records failed to indicate any factual or le4al $asis
for such a plea. "o financial statement of any kind for the year 1D+ or immediately
prior thereto ,as su$mitted $y the petitioner to prove its economic difficulties. 8ts claim
of $usiness reverses and imminent dan4er of collapse are nothin4 $ut 4litterin4
4eneralities.
8t cannot $e denied that a host of cases has affirmed the ri4ht of an employer to layoff or
dismiss employees due to losses in the operation of $usiness, lack of ,ork, and
considera$le reduction in the volume of the employer9s $usiness. 8n the case at $ar,
ho,ever, petitioner failed to 4o into the specifics of its claimed $usiness reverses. 8t
prefers to hide $ehind the $lanket o$servation of the then .ssistant 1ecretary of #a$or
that Bthe hotel industry is virtually in crisis as a result of plummetin4 $usinessB. That the
hotel industry is in crisis does not, ho,ever, necessarily mean that petitioner is itself
sufferin4 from $usiness reverses. 0ein4 one of the $etter kno,n hotels in the country, it
could $e an e>ception. 0ut petitioner9s asserted e>cuses $ein4 in the nature of an
affirmative defense, the $urden lies on its shoulder to su$stantiate such an alle4ation
,ith clear and satisfactory evidence, ,hich it misera$ly failed to do.
<etitioner like,ise ar4ues that it ,as imperatively necessary to reduce its personnel due
to losses in the operation of its $usiness7 that it is an employer9s prero4ative to
determine ,ho amon4 its employees should $e retained7 and that in the e>ercise
thereof, it may not $e interfered ,ith. The only e>ception is ,hen it can $e sho,n that
the employer, under cover of this ri4ht, is proceedin4 a4ainst an employee in an unjust
or capricious manner. 1pecifically, the po,er of an employer to terminate a pro$ationary
employment contract is su$ject to various limitations. 'irst, it must $e e>ercised in
accordance ,ith the specific re;uirements of the contract. 8f a particular time is
prescri$ed, the termination must $e done ,ithin such time. 1hould the contract re;uire a
,ritten notice, then such form should $e used. 1econdly, the dissatisfaction of the
employer must $e real and in 4ood faith, not fei4ned so as to circumvent the contract or
the la,7 and thirdly, there must $e no unla,ful discrimination in the dismissal.
10
The records sho, that petitioner had four (/) 4ardeners under pro$ationary
employment. %espondent &ru3 ,as one of them. ?ithin the period of his pro$ationary
employment, &ru3 ,as made a lead 4ardener, clearly a reco4nition of his 4ood
performance and competent service. ?hen petitioner, pursuant to its alle4ed policy of
retrenchment, a$olished &ru39s position as 4ardener, the three other 4ardeners in its
employ under similar pro$ationary contract ,ere retained. T,o of them, %ufino .rcis
and .l$ert 5anila, ,ere even promoted and appointed as ste,ards. The third one,
.rturo %eyes, ,as retained as sole 4ardener. <etitioner justifies &ru3 not $ein4 made a
ste,ard he havin4 reached only third year hi4h school. 0ut if a third year hi4h school
may not $e promoted to $e a ste,ard from that of $ein4 a 4ardener, ho, then can .rcis
,ho ,as merely a si>th 4rader, ;ualify for promotion from 4ardener to ste,ardQ -ur
e>amination of the records failed to reveal any standard or criteria adopted $y the
petitioner in makin4 the promotion and selection in ;uestion thus leadin4 us to the
conclusion that &ru3 ,as ar$itrarily terminated andCor dismissed.
?hat makes &ru39s dismissal hi4hly suspicious is that it took place at a time ,hen he
needs only $ut a day to $e eli4i$le as a re4ular employee. That he is competent finds
support in his $ein4 promoted to a lead 4ardener in so short span of less than si> (+)
months. There is that stron4 presumption in his favor that his performance had $een
satisfactory. 0y terminatin4 his employment andCor a$olishin4 his position ,ith $ut only
one day remainin4 in his pro$ationary appointment, petitioner deprived &ru3 of
;ualifyin4 as, a re4ular employee ,ith its concommitant ri4hts and privile4es. &ru3 ,as
also deprived of his only means of livelihood upon a va4ue and empty assertion of
Bretrenchment.
=ery recently, ,e had occasion to rule that the prero4ative of mana4ement to dismiss or
lay)off an employee must $e done ,ithout a$use of discretion, for ,hat is at stake is not
only petitioner9s position $ut also his means of livelihood.
11
The ri4ht of an employer to
freely select or dischar4e his employees is su$ject to re4ulation $y the 1tate, $asically
in the e>ercise of its paramount police po,er.
12
This is so $ecause the preservation of
the lives of the citi3ens is a $asic duty of the 1tate, more vital than the preservation of
corporate profits.
1$
8n the final analysis, ,hat is in issue is the correctness of the findin4s of facts made $y
the "ational #a$or %elations &ommission. 1uch findin4s of the &ommission are entitled
to 4reat respect if supported $y su$stantial evidence
1%
as in the present case.
5oreover, alle4ed error in the "ational #a$or %elations &ommission9s factual findin4 is
not correcti$le $y certiorari $ut $y ordinary appeal.
15
1ince there ,as no valid termination, private respondent is entitled under .rticle 28E of
the #a$or &ode to reinstatement ,ithout loss of seniority ri4hts and ,ith $ack,a4es
from the time his compensation ,as ,ithheld up to the time of his reinstatement.
2o,ever, in a num$er of ille4al dismissal cases,
1&
this &ourt in the interest of justice
and e>pediency, has adopted the policy of 4rantin4 $ack,a4es for a ma>imum period of
three (*) years ,ithout ;ualification and deduction.
&onsiderin4 that this case has $een pendin4 since 5arch 2!, 1DD or a period of almost
nine () years no,, an a,ard of $ack,a4es for three (*) years is just and reasona$le.
?2:%:'-%:, the appealed decision is here$y 5-(8'8:( insofar as the payment of
$ack,a4es is concerned in that the petitioner is ordered to pay private respondent &ru3
three (*) years $ack,a4es computed on the $asis of his pay as of 5arch 1, 1DD,
,ithout ;ualification and deduction.
:>cept as thus modified, the appealed decision is .''8%5:( in all other respects. The
restrainin4 order earlier issued is here$y ordered lifted andCor set aside. 1-
-%(:%:(.