A.M. Oreta vs.

NLRC
G.R. No. 74004
August 10, 1989
FACTS:
Private respondent Grulla was engaged by Engineering
Construction and Industrial Development Company (ENDECO)
through A.M. Oreta and Co., Inc., as a carpenter in its projects in
Jeddah, Saudi Arabia. The contract of employment, which was
entered into June 11, 1980 was for a period of twelve (12) months.
On October 9, 1980, he received a notice of termination of
his employment.
He filed a complaint for illegal dismissal.
Petitioner contends that the respondent Grulla was validly
dismissed because the latter was still a probationary employee;
and that his dismissal was justified on the basis of his
unsatisfactory performance of his job during the probationary
period.
ISSUES:
Whether respondent Grulla was illegaly terminated by the
petitioner?
HELD:
Yes. A perusal of the employment contract reveals that
although the period of employment of respondent Grulla is twelve
(12) months, the contract is renewable subject to future
agreements of the parties. It is clear from the employment contract
that the respondent Grulla was hired by the company as a regular
employee and not just mere probationary employee. Also, nowhere
in the employment contract executed between petitioner company
and respondent Grulla is there a stipulation that the latter shall
undergo a probationary period for three months before he can
qualify as a regular employee.
Respondent Grulla was not, in any manner, notified of the
charges against him before he was outrightly dismissed. Neither
was any hearing or investigation conducted by the company to give
the respondent a chance to be heard concerning the alleged
unsatisfactory performance of his work.

CHUA V CA
440 SCRA 121
October 6, 2004
FACTS
- On 20 August 1985, private respondents Andres Paguio, Pablo
Canale, Ruel Pangan, Aurelio Paguio, Rolando Trinidad, Romeo
Tapang and Carlos Maliwat (hereinafter referred to as respondents)
filed a Petition with the SSC for SSS coverage and contributions
against petitioner Reynaldo Chua, owner of Prime Mover
Construction Development, claiming that they were all regular
employees of the petitioner in his construction business. Private
respondents alleged that petitioner dismissed all of them without
justifiable grounds and without notice to them and to the then
Ministry of Labor and Employment. They further alleged that
petitioner did not report them to the SSS for compulsory coverage
in flagrant violation of the Social Security Act.
- On the other hand, the petitioner claimed that private
respondents were project employees, whose periods of
employment were terminated upon completion of the project. Thus,
he claimed, no employer-employee relation existed between the
parties. There being no employer-employee relationship, private
respondents are not entitled to coverage under the Social Security
Act. Moreover, petitioner invokes the defense of good faith, or his
honest belief that project employees are not regular employees
under Article 280 of the Labor Code. The SSC and CA ruled in favor
of the respondents.
ISSUE
WON private respondents were regular employees of the petitioner
HELD
YES. Elements of the control test: (a) selection and engagement of
the employee; (b) payment of wages; (c) the power of dismissal;
and (d) the power of control with regard to the means and methods
by which the work is to be accomplished, with the power of control

being the most determinative factor. Even though the employer

does not admit, the existence of an employer-employee
relationship between the parties can easily be determined by the
application of the "control test, the elements of which are: (a)
selection and engagement of the employee; (b)
payment of wages; (c) the power of dismissal; and (d) the power of
control with regard to the means and methods by which the work is
to be accomplished, with the power of control being the most
determinative factor.
- There is no dispute that private respondents were employees of
petitioner. Petitioner himself admitted that they worked in his
construction projects, although the period of their employment was
allegedly co-terminus with their phase of work. It is clear that
private respondents are employees of petitioner, the latter having
control over the results of the work done, as well as the means and
methods by which the same were accomplished. Suffice it to say
that regardless of the nature of their employment, whether it is
regular or project, private respondents are subject of the
compulsory coverage under the SSS Law, their employment not
falling under the exceptions provided by the law. This rule is in
accord with the Courts ruling in Luzon Stevedoring Corp. v. SSS to
the effect that all employees, regardless of tenure, would qualify for
compulsory membership in the SSS, except those classes of
employees contemplated in Section 8(j) of the Social Security Act.
- In Violeta v. NLRC, this Court ruled that to be exempted from the
presumption of regularity of employment, the agreement between
a project employee and his employer must strictly conform to the
requirements and conditions under Article 280 of the Labor Code. It
is not enough that an employee is hired for a specific project or
phase of work. There must also be a determination of, or a clear
agreement on, the completion or termination of the project at the
time the employee was engaged if the objectives of Article 280 are
to be achieved. This second requirement was not met in this case.
- This Court has held that an employment ceases to be co-terminus
with specific projects when the employee is continuously rehired
due to the demands of the employers business and re-engaged for
many more projects without interruption. The Court likewise takes
note of the fact that, as cited by the SSC, even the National Labor
Relations Commission in a labor case involving the same parties,
found that private respondents were regular employees of the
petitioner.
- Another cogent factor militates against the allegations of the
petitioner. In the proceedings before the SSC and the Court of
Appeals, petitioner was unable to show that private respondents

were appraised of the project nature of their employment, the

specific projects themselves or any phase thereof undertaken by
petitioner and for which private respondents were hired. He failed
to show any document such as private respondents employment
contracts and employment records that would indicate the dates of
hiring and termination in relation to the particular construction
project or phases in which they were employed. Moreover, it is
peculiar that petitioner did not show proof that he submitted
reports of termination after the completion of his construction
projects, considering that he alleges that private respondents were
hired and rehired for various projects or phases of work therein.
- To be exempted from the presumption of regularity of
employment, the agreement between a project employee and his
employer must strictly conform to the requirements and conditions
under Article 280 of the Labor Code. It is not enough that an
employee is hired for a specific project or phase of work. There
must also be a determination of, or a clear agreement on, the
completion or termination of the project at the time the employee
was engaged if the objectives of Article 280 are to be achieved.
A Prime Security Services Inc. v. NLRC, 322 SCRA 283
(2000)
FACTS:
Private respondent Othello Moreno worked as a security
guard for a year with Sugarland Security Services Inc, a
sister company of petitioner. He was rehired as a security
guard on January 30, 1988 by the petitioner and assigned to
the same post at the U.S. Embassy Building; that he was among
those absorbed by the petitioner when it took over the security
contracts of its sister company with the U.S. Embassy
1. P r i v a t e
re s p o n d e n t
Othello
M o re n o
fi l e d
a
c o m p l a i n t a g a i n s t p e t i t i o n e r A P r i m e Security for
illegal dismissal, illegal deduction and underpayment of
wages.
2. Mo r e n o a l l e g e d t h a t h e w a s f o r c e d b y
petitioner
to
sign
new
probationary
contracts of employment for 6 months and further alleged
that on August 1, 1988, his employment was terminated.
3. M o r e n o
also
claimed
that
during
his
e m p l o y m e n t , t h e a m o u n t o f P 2 0 . 0 0 p e r month
was deducted from his salary allegedly for withholding tax,
and the salary h e w a s r e c e i v i n g w a s o n l y

P2,187.00 a month, which was way below

t h e P2,410.17 stipulated in the PADPAO memorandum of
agreement.
4. On t h e o t h e r h a n d , p e t i t i o n e r , A P r i m e
Security,
alleged
that
the
private
re s p o n d e n t w a s h i re d o n J a n u a r y 3 0 , 1 9 8 8 , o n a
p ro b a t i o n a r y b a s i s , a n d h e signed an authority to
deduct from his salary any reimbursement for any
loss or damage caused to properties of the client; a ) t h a t
he was given a copy of petitioners rules and
re g u l a t i o n s w h i c h p ro v i d e that sleeping on post is
punishable by warning, suspension and dismissal and he
was caught sleeping on post on March 17, 1988, for
which he was sent a memorandum giving him a last
warning; b ) t h a t o n M a rc h 2 5 , 1 9 8 8 , h e fi g u re d i n a
q u a r re l w i t h a n o t h e r s e c u r i t y g u a r d , which resulted
in a near shootout; c) that at the end of his
probationary
employment,
he
was
given
a
psychological test and on the basis of the foregoing,
petitioner told him that his probationary employment had
come to an end as he did not pass the company
standard and therefore, he could not be hired as a regular
employee.
5. LA handed down a decision in favor of complainant.
The
respondent
was
ordered
to reinstate the
complainant to his former position and accord to him the
status of a regular employee, and to refund to the
complainant the deduction it had made from his salary in
the amount of P20.00 per month.
6. N L R C a ffi r m e d t h e d e c i s i o n w i t h a s l i g h t
m o d i fi c a t i o n : t h e r e f u n d o f t h e deductions
made by respondent from complainants salaries in
the amount of P20.00 per month was vacated and set
aside.
ISSUES:
1. WON private respondents employment with A Prime
Security Services, I n c . w a s j u s t a c o n t i n u a t i o n o f
h i s e m p l o y m e n t w i t h S u g a r l a n d S e c u r i t y Services,
Inc
2. WON private respondent is a regular employee of petitioner
HELD:
1. YES. On the issue as to whether the private
respondent is a probationary or regular employee,

the Court holds that the latter became a regular

employee upon completion of his six-month period of
probation. Private respondent started working on January
30, 1988 and completed the said period of probation
on July 27, 1988. Thus, at the time p r i v a t e
respondent was dismissed on August 1,
1 9 8 8 , h e w a s a l r e a d y a r e g u l a r employee with a
security of tenure. He could only be dismissed for a just and
authorized cause. There is no basis for subjecting private
respondent to a new probationary or temporary employment
on January 30, 1988, considering that he was already a
regular employee when he was absorbed by A' Prime from
Sugarland, its sister company.
The Court cannot sanction the practice of some companies
which, shortly after a worker has become a regular
employee, eff ects the transfer of the same employee
to another entity whose owners are the same, or identical,
in order to deprive subject employee of the benefits and
protection he is entitled to under the law. The allegations of
the private respondent that Sugarland is a sister company of
A Primeand that the latter absorbed the security contracts
and security guards of Sugarland with t h e U . S . E m b a s s y
w e re n e i t h e r d e n i e d n o r c o n t ro v e r t e d b y t h e
p e t i t i o n e r b e f o re t h e Labor Arbiter. Pe t i t i o n e r s
f a i l u re t o d e n y t h a t S u g a r l a n d i s i t s s i s t e r
company
and
that
petitioner absorbed
Sugarlands
security
contract
and
security
p e r s o n n e l a s s u m e s o v e r r i d i n g significance over
the resignation theorized upon, evincing petit ioners
design to ignore or violate labor laws through the use of
the veil of corporate personality.
2. YES. The complainant became a regular employee upon
completion of his six-month p e r i o d o f p r o b a t i o n .
Priv ate re sp on de nt star te d working on Jan uary
30, 1988 and completed the said period of
p ro batio n on J uly 27, 1988. Th us, at the time
p r i v a t e respondent was dismissed on August 1, 1988, he
was already a regular employee with a security of tenure.
He could only be dismissed for a just and authorized cause.
Tabas vs. California Manufacturing Co., Inc.
169 SCRA 497

Facts: Petitioners filed a petition in the NLRC for reinstatement and

payment of various benefits against California Manufacturing
Company. The respondent company then denied the existence of
an employer-employee relationship between the company and the
petitioners.
Pursuant to a manpower supply agreement, it appears that the
petitioners prior their involvement with California Manufacturing
Company were employees of Livi Manpower service, an
independent contractor, which assigned them to work as
promotional merchandisers. The agreement provides that:
California has no control or supervisions whatsoever over Livi's
workers with respect to how they accomplish their work or perform
Californias obligation It was further expressly stipulated that the
assignment of workers to California shall be on a seasonal and
contractual basis; that cost of living allowance and the 10 legal
holidays will be charged directly to [California] at cost ; and that
payroll for the preceding week shall be delivered by Livi at
California's premises.
Issue: Whether principal employer is liable.
Held: Yes. The existence of an employer-employee relation cannot
be made the subject of an agreement.
Based on Article 106, labor-only contractor is considered merely
as an agent of the employer, and the liability must be shouldered
by either one or shared by both.
There is no doubt that in the case at bar, Livi performs manpower
services, meaning to say, it contracts out labor in favor of clients.
We hold that it is one notwithstanding its vehement claims to the
contrary, and notwithstanding the provision of the contract that it is
an independent contractor. The nature of ones business is not
determined by self-serving appellations one attaches thereto but by
the tests provided by statute and prevailing case law. The bare fact
that Livi maintains a separate line of business does not extinguish
the equal fact that it has provided California with workers to pursue
the latters own business. In this connection, we do not agree that
the petitioners had been made to perform activities which are not
directly
related
to
the
general
business
of
manufacturing, Californias
purported
principal
operation
activity. Livi, as a placement agency, had simply supplied
California with the manpower necessary to carry out its
(Californias) merchandising activities, using its (Californias)
premises and equipment.
BRENT SCHOOL vs. ZAMORA

181 SCRA 702

Facts: Private respondent Doroteo R. Alegre was engaged as
athletic director by petitioner Brent School, Inc. at a yearly
compensation of P20,000.00. The contract fixed a specific term for
its existence, five (5) years, i.e., from July 18, 1971, the date of
execution of the agreement, to July 17, 1976. Subsequent
subsidiary agreements dated March 15, 1973, August 28, 1973, and
September 14, 1974 reiterated the same terms and conditions,
including the expiry date, as those contained in the original
contract of July 18, 1971.
On April 20,1976, Alegre was given a copy of the report filed by
Brent School with the Department of Labor advising of the
termination of his services effective on July 16, 1976. The stated
ground for the termination was "completion of contract, expiration
of the definite period of employment." Although protesting the
announced termination stating that his services were necessary
and desirable in the usual business of his employer, and his
employment lasted for 5 years - therefore he had acquired the
status of regular employee - Alegre accepted the amount of
P3,177.71, and signed a receipt therefor containing the phrase, "in
full payment of services for the period May 16, to July 17, 1976 as
full payment of contract."
The Regional Director considered Brent School's report as an
application for clearance to terminate employment (not a report of
termination), and accepting the recommendation of the Labor
Conciliator, refused to give such clearance and instead required the
reinstatement of Alegre, as a "permanent employee," to his former
position without loss of seniority rights and with full back wages.
Issue: Whether or not the provisions of the Labor Code, as
amended, have anathematized "fixed period employment" or
employment for a term.

Held:Respondent Alegre's contract of employment with Brent

School having lawfully terminated with and by reason of the
expiration of the agreed term of period thereof, he is declared not
entitled to reinstatement.
The employment contract between Brent School and Alegre was
executed on July 18, 1971, at a time when the Labor Code of the

Philippines (P.D. 442) had not yet been promulgated. At that time,
the validity of term employment was impliedly recognized by the
Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Prior,
thereto, it was the Code of Commerce (Article 302) which governed
employment without a fixed period, and also implicitly
acknowledged the propriety of employment with a fixed period. The
Civil Code of the Philippines, which was approved on June 18, 1949
and became effective on August 30,1950, itself deals with
obligations with a period. No prohibition against term-or fixedperiod employment is contained in any of its articles or is otherwise
deducible therefrom.
It is plain then that when the employment contract was signed
between Brent School and Alegre, it was perfectly legitimate for
them to include in it a stipulation fixing the duration thereof
Stipulations for a term were explicitly recognized as valid by this
Court.
The status of legitimacy continued to be enjoyed by fixed-period
employment contracts under the Labor Code (PD 442), which went
into effect on November 1, 1974. The Code contained explicit
references to fixed period employment, or employment with a fixed
or definite period. Nevertheless, obscuration of the principle of
licitness of term employment began to take place at about this
time.
Article 320 originally stated that the "termination of employment of
probationary employees and those employed WITH A FIXED PERIOD
shall be subject to such regulations as the Secretary of Labor may
prescribe." Article 321 prescribed the just causes for which an
employer could terminate "an employment without a definite
period." And Article 319 undertook to define "employment without
a fixed period" in the following manner: where the employee has
been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature
and the employment is for the duration of the season.
Subsequently, the foregoing articles regarding employment with "a
definite period" and "regular" employment were amended by
Presidential Decree No. 850, effective December 16, 1975.

PEOPLE V SAGAYAGA
423 SCRA 468
Facts: The appellant was charged with large scale illegal
recruitment. Sometime in October 1997, Elmer Janer went to the
office of Alvis Placement Service Corporation to apply for overseas
employment as factory worker in Taiwan. Appellant Leticia
Sagayaga, after personally receiving Elmers application, required
him to submit the necessary documents. Appellant further asked
Elmer to pay seventy-five thousand pesos (P75,000.00) as
placement fee. Elmer paid the said fee to appellant in three (3)
installments. All the payments were made inside Alvis Placement
Agency.Elmer also had his medical examination at the Angeles
Medical Clinic, the result of which confirmed that he was fit to
work. Thereafter, he was told to wait for the arrival of the
employer. After seven (7) months, no employer arrived. Tired of
waiting, Elmer demanded that he be refunded of his money (Id.).
Despite appellants promises to pay, Elmer was not refunded of his
money.
Elmer asked appellant for a promissory note, which
appellant executed, promising to pay Elmer seventy-five thousand
(P75,000.00) on May 6, 1998 (pp. 10 and 11, TSN, September 7,
1999). In said promissory note, appellant designated herself as
the assistant general manager of the placement agency.
When appellant failed to refund the amount to Elmer on the date
stated in the promissory note, the latter went to the Philippine
Overseas Employment Administration (POEA) and filed a sworn
complaint against appellant. Elmer Ramos and Eric Farol filed their
complaint based on basically similar facts.
The appellant avers that she is not criminally liable for the
crime charged because the prosecution failed to prove that she had
a direct or actual control, management or direction of the business

and recruitment activities of the Alvis Placement Services

Corporation (APSC). She asserts that she had no knowledge of the
recruitment activities of APSC and had no participation whatsoever
in its operation. In dealing with the private complainants, she was
merely performing routinary office work as a mere employee. Her
participation as an employee of APSC with respect to the
employment application of Elmer Ramos for Taiwan was to receive
his placement fee of P20,000.00.
ISSUE:
Whether the accused-appellant was a top ranking officer of said
corporation, with authority to participate directly in the control,
management or direction of its business affairs.
HELD: YES.Appellant, as shown by the records of the POEA, was
both the APSC Vice-President-Treasurer and the Assistant General
Manager. She was a high corporate officer who had direct
participation in the management, administration, direction and
control of the business of the corporation.
Under Section 6 (m) of Rep. Act No. 8042, illegal recruitment may
be committed by any person, whether a non-licensee, non-holder of
authority, licensee or holder of authority, thus:
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for purposes
of deployment, in cases where the deployment does not actually
take place without the workers fault.
Under the last paragraph of the said section, those
criminally liable are the principals, accomplices and accessories. In
case of a juridical person, the officers having control, management
or direction of the business shall be criminally liable.
Accused has expressly admitted in the course of her
testimony that she was at the time the Treasurer of their
recruitment agency. As such she was in charge of the management
and control of the financial affairs and resources of the
corporation. She was in charge of collecting all its receivables,
safely keeping them, and disbursing them.

The appellant is guilty of illegal recruitment as a principal by

direct participation, having dealt directly with the private
complainants.
The appellants bare denial of her involvement in the
management, administration, control and operation of APSC cannot
prevail over her judicial admissions, the positive testimonies of the
private complainants and the documentary evidence adduced by
the prosecution.
Section 6 of Rep. Act No. 8042 provides that illegal
recruitment shall be considered an offense involving economic
sabotage if committed in large scale, viz, committed against three
(3) or more persons individually or as a group, the imposable
penalty for which is life imprisonment and a fine of not less than
P500,000.00 nor more than P1,000,000.00. In this case, there are
three private complainants, namely, Elmer Janer, Eric Farol and
Elmer Ramos. The trial court, thus, correctly convicted the
appellant of large scale illegal recruitment and sentenced her to
suffer life imprisonment.

Integrated Contractor v. NLRC

464 SCRA 265
FACTS

This case is an appeal from a decision of the CA affirming

the NLRCs findings which declared respondent Solon a regular
employee of the petitioner and awarded him with 13 th month pay,
service incentive leave pay, and reinstatement to his former
position with full back wages from the time his salary was withheld
until his reinstatement.
Petitioner is a plumbing contractor. Its business depends on
the number and frequency of the projects it is able to contract with
its clients. Respondent Solon worked for petitioner several months
at a time from 1994 to 1998.
On Feb. 1998, while Solon was about to log out from work,
he was informed that it was his last day of work as he had been
terminated. He went back to petitioners office to sign a clearance
so he could claim his 13th month pay and tax refunds. However, he
refused to sign when he read the clearance indicating that he had
resigned. He then filed a complaint for illegal dismissal without due

cause and due process. The Labor Arbiter ruled that Solon was a
regular employee and could only be removed for cause. NLRC
affirmed with only a modification as to the computation of 13 th
month pay. CA also affirmed.

Hacienda Fatima v. National Federation

Workers-Food and General Trade
396 SCRA 518
CALLEJO, SR., J.:

ISSUE
Whether the respondent is a regular employee or not.

Facts:

HELD
YES. The test to determine whether employment is regular or not is
the reasonable connection between the particular activity
performed by the employee in relation to the usual business or
trade of the employer. Also, if the employee has been performing
the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the
necessity, if not indispensability of that activity to the business. (De
Leon v NLRC)
While length of time may not be the controlling test for
project employment, it is vital in determining if the employee was
hired for a specific undertaking or tasked to perform functions vital,
necessary and indispensable to the usual business or trade of the
employer. Here, private respondent had been a project employee
several times over. His employment ceased to be coterminous with
specific projects when he was repeatedly re-hired due to the
demands of petitioners business.
Disposition
assailed Decision dated October 30, 2001 and
the Resolution dated February 28, 2002 of CA are AFFIRMED with
MODIFICATION. The petitioner id hereby ORDERED to (1)reinstate
the respondent with no loss of seniority rights and other privileges;
and (2) pay respondent his back wages, 13 th month pay for the year
1998 and Service Incentive Leave Pay computed from the date of
his illegal dismissal up to the date of his actual reinstatement.

of

Sugarcane

Hacienda Bino is a 236-hectare sugar plantation located at

Barangay Orong, Kabankalan City, Negros Occidental, and
represented in this case by Hortencia L. Starke, owner and operator
of the said hacienda.
The 76 individual respondents were part of the workforce of
Hacienda Bino consisting of 220 workers, performing various works,
such as cultivation, planting of cane points, fertilization, watering,
weeding, harvesting, and loading of harvested sugarcanes to cargo
trucks.
During the off-milling season, petitioner Starke issued an Order or
Notice which stated, that all those who signed in favor of CARP are
expressing their desire to get out of employment on their own
volition. And only those who did not sign for CARP will be given
employment by the hacienda.
The respondents regarded such notice as a termination of their
employment. As a consequence, they filed a complaint for illegal
dismissal, wage differentials, 13th month pay, holiday pay and
premium pay for holiday, service incentive leave pay, and moral
and exemplary damages with the NLRC. The respondents as
complainants alleged inter alia that they are regular and
permanent workers of thehacienda and that they were dismissed
without just and lawful cause.
Petitioner Starke alleged that she issued the order giving
preference to those who supported the re-classification. She asserts
that the respondents, who are also sugar workers, are seasonal
employees; hence, their employment can be terminated at the end
of the season and such termination cannot be considered an illegal
dismissal. Petitioner Starke maintains that the determination of
whether the workers are regular or seasonal employees is not
dependent on the number of hectares operated upon by them, or
the number of workers, or the capitalization involved, but rather, in
the nature of the work. She asserts that the respondents also made
their services available to the neighboring haciendas.

Issue:
Whether the hacienda workers are regular or seasonal workers
worthy of the benefits granted by law to regular employees?
Philippine Tobacco v. NLRC, 300 SCRA 37
G.R. No. 118475.
DE LEON, JR., J.:

Ruling:
The petition is denied. The hacienda workers are regular employees
regardless of the off-milling period. The Mercado doctrine does not
apply in this case.
Contrary to the Mercado case that provides that farm workers in
haciendas are work in a definite period of time therefore the
relationship with the owner is terminated, the herein case presents
a different factual condition as the enormity of the size of the sugar
hacienda of petitioner, with an area of two hundred thirty-six (236)
hectares, simply do not allow for private respondents to render
work only for a definite period.
The petitioners did not present any evidence that the respondents
were required to perform certain phases of agricultural work for a
definite period of time. Although the petitioners assert that the
respondents
made
their
services
available
to
the
neighboring haciendas, the records do not, however, support such
assertion. The primary standard for determining regular
employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or
business of the employer. There is no doubt that the respondents
were performing work necessary and desirable in the usual trade or
business of an employer. Hence, they can properly be classified as
regular employees.

Facts:
Private respondent La Union Tobacco Redrying Corporation
(LUTORCO), which is owned by private respondent See Lin Chan, is
engaged in the business of buying, selling, redrying and processing
of tobacco leaves and its by-products. Tobacco season starts
sometime in October of every year. Farmers germinate their seeds
in plots until they are ready for replanting in November. The
harvest season starts in mid-February. Then, the farmers sell the
harvested tobacco leaves to redrying plants or do the redrying
themselves. The redrying plant of LUTORCO receives tobacco for
redrying at the end of February and starts redrying in March until
August or September.
Petitioners have been under the employ of LUTORCO for several
years until their employment with LUTORCO was abruptly
interrupted sometime in March 1993 when Compania General de
Tabaccos de Filipinas (also known as TABACALERA) took over
LUTORCOs tobacco operations. New signboards were posted
indicating a change of ownership and petitioners were then asked
by LUTORCO to file their respective applications for employment
with TABACALERA. Petitioners were caught unaware of the sudden
change of ownership and its effect on the status of their
employment, though it was alleged that TABACALERA would
assume and respect the seniority rights of the petitioners.
Because of this, the disgruntled employees instituted before the
NLRC Regional Arbitration a complaint for separation pay against
private respondent LUTORCO on the ground that there was a
termination of their employment due to the closure of LUTORCO as
a result of the sale and turnover to TABACALERA. Other equally
affected employees filed two additional complaints, also for
separation pay, which were consolidated with the first complaint.

Private respondent corporation raised as its defense that it is

exempt from paying separation pay and denied that it terminated
the services of the petitioners; and that it stopped its operations
due to the absence of capital and operating funds caused by losses
incurred from 1990 to 1992 and absence of operating funds for
1993, coupled with adverse financial conditions and downfall of
prices
The labor arbiter dismissed the complaint for lack of merit. In
upholding private respondent LUTORCOs position, the Labor Arbiter
declared that the petitioners are not entitled to the benefits under
Article 283 of the Labor Code since LUTORCO ceased to operate
due to serious business losses and, furthermore, TABACALERA, the
new employer of the petitioner has assumed the seniority rights of
the petitioners and other employment liabilities of the LUTORCO.
Petitioners appealed then the decision. Respondents alleged that
LUTORCO never ceased to operate but continues to operate even
after TABACALERA took over the operations of its redrying plaint in
Aringay, La Union. Petitioners were not terminated from
employment but petitioners instead refused to work with
TABACALERA, despite the notice to petitioners to return to work in
view of LUTORCOs need for workers at its Agoo plant which had
approximately 300,000 kilos of Virginia tobacco for processing and
redrying. Furthermore, petitioners are not entitled to separation pay
because petitioners are seasonal workers.
Issue:
Whether the workers are seasonal workers not entitled to the
prayed benefits?
Ruling:
They are considered as regular workers. While it may appear that
the work of petitioners is seasonal, inasmuch as petitioners have
served the company for many years, some for over 20 years,
performing services necessary and indispensable to LUTORCOs
business, serve as badges of regular employment. Moreover, the
fact that petitioners do not work continuously for one whole year
but only for the duration of the tobacco season does not detract
from considering them in regular employment since in a litany of
cases, the Court has already settled that seasonal workers who are
called to work from time to time and are temporarily laid off during

off-season are not separated from service in said period, but are
merely considered on leave until re-employed.
Private respondents reliance on the case of Mercardo v. NLRC is
misplaced considering that since in said case of Mercado, although
the respondent company therein consistently availed of the
services of the petitioners therein from year to year, it was clear
that petitioners therein were not in respondent companys regular
employ. Petitioners therein performed different phases of
agricultural work in a given year. However, during that period, they
were free to contract their services to work for other farm owners,
as in fact they did. Thus, the Court ruled in that case that their
employment would naturally end upon the completion of each
project or phase of farm work for which they have been contracted.

People v. Baytic
398 SCRA 18
BELLOSILLO, J.:
Facts:
On 24 September 1998 Kennedy Hapones accompanied by accused
Alex Baytic went to the house of his aunt Ofelia in Quezon City.
There they found Ofelia et al. together with Millie Passi, Yolanda
Barrios and Elvira Nacario. Accused Alex Baytic told the girls that
he was looking for workers willing to work in Italy as utility
personnel. He explained that interested applicants should give him
money for processing of their medical certificate, certificate of
employment and other travel documents. Since the offer appeared
to be a good opportunity to work abroad, Ofelia Bongbonga on the
same day gave the accused P3,500.00, followed by Millie Passi
with P4,000.00 the next day, and Nolie Bongbonga with P4,000.00
on 5 October as their placement fees. All these transactions were
evidenced by receipts issued by accused Alex Baytic.
According to private complainant, accused Baytic promised her and
her two (2) co-applicants an interview by his cousin, a doctor from
Italy, on 7 October 1998 at the Corinthian Gardens. However, on
the appointed date of their interview, the accused failed to appear.
Ofelia, Millie and Nolie frantically searched for him but he was
nowhere to be found. Ofelia further testified that sometime in
January 1999 they heard over the radio that accused Baytic was
arrested in Pasig City for illegal recruitment activities. Upon inquiry

from the radio station, she learned that the accused was already
detained at the Pasig Provincial Jail, so she followed him there.
Accused Alex Baytic, testifying in his defense, not only denied the
accusations against him but also insisted that it was actually
Kennedy Hapones, a new acquaintance, who was the illegal
recruiter. He recounted that sometime in November 1999, he went
to the house of Hapones who was trying to recruit him for
deployment abroad. According to the accused, Hapones told him to
prepare P250,000.00 although the former eventually accepted an
initial advance payment of P4,500.00. He again met Hapones the
following month when the latter told him and a group of other
applicants, including Ofelia Bongbonga, that their requirements
were ready. That was the last time he saw Hapones who, he later
learned, had already left for abroad. He was suspected of being in
cahoots with Hapones because whenever the latter and the
applicants talked, Hapones would always point at him, although he
never had the opportunity to know what Hapones had actually said
to them.
The trial court opined that all the essential requisites of the crime
of illegal recruitment in large scale as defined in Art. 13, par. (b), of
the Labor Code2 were present. Accused-appellant now prays that
the Court to take a second hard look at his conviction in view of the
alleged failure of the prosecution to prove his guilt beyond
reasonable doubt. He takes exception to the finding of the trial
court that all the elements of the crime of illegal recruitment in
large scale are present.
Respondent argues that the first element, i.e., the accused engages
in the recruitment and placement of workers, defined under Art. 13,
or in any prohibited activities under Art. 34, of the Labor Code, is
not present because he did not solicit any money from the
complainants nor did he promise them employment in Italy. The
truth of the matter, according to him, is that he himself was
victimized by Kennedy Hapones, the real illegal recruiter. He
explained that when Hapones could not be contacted, the
complainants vented their anger towards him, being Hapones
constant companion.
Issue:
Whether the elements of illegal recruitment were absent since the
accused did not solicit money from the complainants nor did he
promise them employment in Italy?

Ruling:
No, all the elements of illegal recruitment were present. Illegal
recruitment is committed when two (2) elements concur. First, the
offender has no valid license or authority required by law to enable
one to engage lawfully in recruitment and placement of workers.
Second, he or she undertakes either any activity within the
meaning of "recruitment and placement" defined under Art. 13, par.
(b), or any prohibited practices enumerated under Art. 34 of the
Labor Code. In case of illegal recruitment in large scale, a third
element is added: that the accused commits the acts against three
or more persons, individually or as a group.
The first element is present. POEA representative Flordeliza
Cabusao presented in evidence a certification from one
Hermogenes Mateo, Director III, Licensing Branch, showing that
accused-appellant was neither licensed nor authorized to recruit
workers for overseas employment.5
The second element is likewise present. Accused-appellant is
deemed engaged in recruitment and placement under Art. 13, par.
(b), of the Labor Code when he made representations to each of
the complainants that he could send them to Italy for employment
as utility personnel. His promises and misrepresentations gave the
complainants the distinct impression that he had the authority to
engage in recruitment, thus enabling him to collect from them
various amounts for recruitment and placement fees without
license or authority to do so.

DELA CRUZ V NLRC

418 SCRA 226
CORONA; December 11, 2003
NATURE
Petition for review on certiorari
FACTS
- On May 27, 1996, petitioner Florencio de la Cruz, Jr. was hired by private respondent Shemberg Marketing
Corporation as senior sales manager, a newly created position in line with the companys objective of product
positioning in the consumer market. However, on Sept. 14, 1996, petitioner was informed that his services were
terminated. His request for a meeting with Shembergs VP and to be furnished a 30-day written notice was denied by
management. Hence, petitioner filed a complaint for illegal dismissal., non-payment of salary, backwages, 13 th month
pay and damages.
- Private respondent answered that petitioners dismissal was premised, among others, on his unauthorized
reimbursement of the plane tickets of his wife and child, resulting to loss of trust and confidence of the company.
- Labor arbiter ruled that petitioner was illegally dismissed and granted his claim for separation pay, backwages and
unpaid wages. Upon appeal, NLRC modified the decision, deleting the award for separation pay and backwages.
Hence, this petition.

ISSUE
WON petitioner was legally dismissed, as he was a probationary employee
HELD
YES
- Petitioner was hired by Shemberg on May 27, 1996 and was terminated on Sept. 14, 1996. A281 LC provides:
Probationary employment shall not exceed six (6) months from the date the employee started working , unless it is
covered in apprenticeship[ agreement stipulating a longer period. The services of an employee who has been
engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards, made known by the employer to the employee at the time of
his engagement. An employee who is allowed to work after a probationary period shall be considered a regular
employee.
- The evidence on record clearly shows that petitioner was well informed of the standards to be met before he could
qualify as a regular employee. Attached to his appointment papers was a job description of sales manager.
- A probationary employee is one who, for a given period of time, is under observation or evaluation to determine
whether or not he is qualified for permanent employment. During the probationary period, the employer is given the
opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the
employer that he has the qualifications to meet the reasonable standards for permanent employment. The length of
time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each
other during this period.
- There is no dispute that petitioner, as a probationary employee enjoyed only a temporary employment status. This
meant that he was terminable anytime, permanent employment not having been attained in the mean time. The
employer could well decide he no longer needed the probationary employees service or hi performance fell short of
expectation. As long as the termination was made before the expiration of the 6-month probationary period, the
employer was well within his rights to sever the employer-employee relationship. A contrary interpretation would
defect the clear meaning of the term probationary. In this case, Shemberg had good reason to terminate petitioners
employment. Petitioner was holding a managerial position in which he was tasked to perform key functions in
accordance with an exacting work ethic. His position required the full trust and confidence of his employer. While
petitioner could exercise some discretion, this obviously did not cover acts for his own personal benefit. He committed
a transgression which betrayed the trust and confidence of his employer reimbursing his familys personal travel
expenses out of company funds.
Disposition Petition is DISMISSED. The decision of the CA is affirmed.

UNIVERSAL ROBINA CORPORATION V CATAPANG

473 SCRA 189
CALLEJO, SR; October 14, 2005
FACTS
- Petitioner Universal Robina Corporation is a corporation duly organized and existing under the Philippine laws, while
petitioner Randy Gregorio is the manager of the petitioner companys duck farm in Calauan, Laguna.
- The individual respondents were hired by the petitioner company on various dates from 1991 to 1993 to work at its
duck farm in Barangay Sto. Tomas, Calauan, Laguna. The respondents were hired under an employment contract
which provided for a five-month period. After the expiration of the said employment contracts, the petitioner company
would renew them and re-employ the respondents. This practice continued until sometime in 1996, when the
petitioners informed the respondents that they were no longer renewing their employment contracts.

- In October 1996, the respondents filed separate complaints for illegal dismissal, reinstatement, backwages,
damages and attorneys fees against the petitioners. The complaints were later consolidated. On March 30, 1999,
after due proceedings, the Labor Arbiter rendered a decision in favor of the respondents, which NLRC and the CA
affirmed.
- On appeal, the petitioners submit that the respondents are not regular employees. They aver that it is of no moment
that the respondents have rendered service for more than a year since they were covered by the five-month individual
contracts to which they duly acquiesced. The petitioners contend that they were free to terminate the services of the
respondents at the expiration of their individual contracts. The petitioners maintain that, in doing so, they merely
implemented the terms of the contracts.
- The petitioners assert that the respondents contracts of employment were not intended to circumvent security of
tenure. They point out that the respondents knowingly and voluntarily agreed to sign the contracts without the
petitioners having exercised any undue advantage over them. Moreover, there is no evidence showing that the
petitioners exerted moral dominance on the respondents.[\
ISSUE
WON the respondent employees of the corporation are regular employees and therefore their termination for causes
outside of the Labor Code is patently illegal
HELD
YES
Ratio An employee shall be deemed to be of regular status when he has been performing a job for at least one year
even if the performance is not continuous and merely intermittent.
Reasoning
- In any case, we find that the CA, the NLRC and the Labor Arbiter correctly categorized the respondents as regular
employees of the petitioner company. In Abasolo v. National Labor Relations Commission, the Court reiterated the
test in determining whether one is a regular employee:
- The primary standard, therefore, of determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the usual trade or business of the employer.
The test is whether the former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of work performed and its relation to
the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the
job for at least a year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular, but only with
respect to such activity and while such activity exists.
- It is obvious that the said five-month contract of employment was used by petitioners as a convenient subterfuge to
prevent private respondents from becoming regular employees. Such contractual arrangement should be struck down
or disregarded as contrary to public policy or morals. To uphold the same would, in effect, permit petitioners to avoid
hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the
employees security of tenure in their jobs. Petitioners act of repeatedly and continuously hiring private respondents
in a span of 3 to 5 years to do the same kind of work negates their contention that private respondents were hired
for a specific project or undertaking only.
- Further, factual findings of labor officials who are deemed to have acquired expertise in matters within their
respective jurisdiction are generally accorded not only respect but even finality, and bind us when supported by
substantial evidence.
Disposition petition is DENIED DUE COURSE. The Decision of the Court of Appeals is AFFIRMED.