3. Project Employees – Art. 280, Labor Code, see also Policy Instruction No. 20, (series of 1977), entitled "Stabilizing Employer-Employee Relations in the Construction Industry, and DOLE Department Order No. 19 (series of 1993, dated 1 April 1993)

Case(s): ALU-TUCP vs. NLRC, 234 SCRA 678

G.R. No. 109902 August 2, 1994ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others, namely: ENGR. ALAN G. BARINQUE, ENGR. DARRELL LEE ELTAGONDE, EDUARD H. FOOKSON, JR., ROMEO R. SARONA, RUSSELL GACUS, JERRY BONTILAO, EUSEBIO MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR S. BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B. DANDASAN, and GERRY I. FETALVERO, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL CORPORATION (NSC), respondents.Leonard U. Sawal for petitioners.Saturnino Mejorada for private respondent. FELICIANO, J.:In this Petition for Certiorari, petitioners assail the Resolution of the National Labor Relations Commission ("NLRC") dated 8 January 1993 which declared petitioners to be project employees of private respondent National Steel Corporation ("NSC"), and the NLRC's subsequent Resolution of 15 February 1993, denying petitioners' motion for reconsideration.Petitioners plead that they had been employed by respondent NSC in connection with its Five Year Expansion Program (FAYEP I & II) 1 for varying lengths of time when they were separated from NSC's service:

Employee Date Nature of SeparatedEmployed Employment1. Alan Barinque 5-14-82 Engineer 1 8-31-912. Jerry Bontilao 8-05-85 Engineer 2 6-30-923. Edgar Bontuyan 11-03-82 Chairman to present4. Osias Dandasan 9-21-82 Utilityman 19915. Leonido Echavez 6-16-82 Eng. Assistant 6-30-926. Darrell Eltagonde 5-20-85 Engineer 1 8-31-917. Gerry Fetalvero 4-08-85 Mat. Expediter regularized8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-919. Russell Gacus 1-30-85 Engineer 1 6-30-9210. Jose Garguena 3-02-81 Warehouseman to present11. Eusebio Mejos 11-17-82 Survey Aide 8-31-9112. Bonifacio Mejos 11-17-82 Surv. Party Head 199213. Romeo Sarona 2-26-83 Machine Operator 8-31-91 2

On 5 July 1990, petitioners filed separate complaints for unfair labor practice, regularization and monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.The complaints were consolidated and after hearing, the Labor Arbiter in a Decision dated 7 June 1991, declared petitioners "regular project employees who shall continue their employment as such for as long as such [project] activity exists," but entitled to the salary of a regular employee pursuant to the provisions in the collective bargaining agreement. It also ordered payment of salary differentials. 3

Both parties appealed to the NLRC from that decision. Petitioners argued that they were regular, not project, employees. Private respondent, on the other hand, claimed that petitioners are project employees as they were employed to undertake a specific project — NSC's Five Year Expansion Program (FAYEP I & II).The NLRC in its questioned resolutions modified the Labor Arbiter's decision. It affirmed the Labor Arbiter's holding that petitioners were project employees since they were hired to perform work in a specific undertaking — the Five Years Expansion Program, the completion of which had been determined at the time of their engagement and which operation was not directly related to the business of steel manufacturing. The NLRC, however, set aside the award to petitioners of the same benefits enjoyed by regular employees for lack of legal and factual basis.

Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any grave abuse of discretion or any act without or in excess of jurisdiction on the part of the NLRC in rendering its questioned resolutions of 8 January 1993 and 15 February 1993.The law on the matter is Article 280 of the Labor Code which reads in full:

Art. 280. Regular and Casual Employment — The provisions of the written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, and employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (Emphasis supplied)

Petitioners argue that they are "regular" employees of NSC because: (i) their jobs are "necessary, desirable and work-related to private respondent's main business, steel-making"; and (ii) they have rendered service for six (6) or more years to private respondent NSC. 4

The basic issue is thus whether or not petitioners are properly characterized as "project employees" rather than "regular employees" of NSC. This issue relates, of course, to an important consequence: the services of project employees are co-terminous with the project and may be terminated upon the end or completion of the project for which they were hired. 5 Regular employees, in contract, are legally entitled to remain in the service of their employer until that service is terminated by one or another of the recognized modes of termination of service under the Labor Code. 6

It is evidently important to become clear about the meaning and scope of the term "project" in the present context. The "project" for the carrying out of which "project employees" are hired would ordinarily have some relationship to the usual business of the employer. Exceptionally, the "project" undertaking might not have an ordinary or normal relationship to the usual business of the employer. In this latter case, the determination of the scope and parameeters of the "project" becomes fairly easy. It is unusual (but still conceivable) for a company to undertake a project which has absolutely no relationship to the usual business of the company; thus, for instance, it would be an unusual steel-making company which would undertake the breeding and production of fish or the cultivation of vegetables. From the viewpoint, however, of the legal characterization problem here presented to the Court, there should be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as the duration and scope of the project were determined or specified at the time of engagement of the "project employees." 7 For, as is evident from the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project.In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The typical example of this first type of project is a particular construction job or project of a construction company. A construction company ordinarily carries out two or more discrete identifiable construction projects: e.g., a twenty-five- storey hotel in Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of

employment, are properly treated as "project employees," and their services may be lawfully terminated at completion of the project.The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times. The case at bar presents what appears to our mind as a typical example of this kind of "project."NSC undertook the ambitious Five Year Expansion Program I and II with the ultimate end in view of expanding the volume and increasing the kinds of products that it may offer for sale to the public. The Five Year Expansion Program had a number of component projects: e.g., (a) the setting up of a "Cold Rolling Mill Expansion Project"; (b) the establishment of a "Billet Steel-Making Plant" (BSP); (c) the acquisition and installation of a "Five Stand TDM"; and (d) the "Cold Mill Peripherals Project." 8 Instead of contracting out to an outside or independent contractor the tasks of constructing the buildings with related civil and electrical works that would house the new machinery and equipment, the installation of the newly acquired mill or plant machinery and equipment and the commissioning of such machinery and equipment, NSC opted to execute and carry out its Five Yeear Expansion Projects "in house," as it were, by administration. The carrying out of the Five Year Expansion Program (or more precisely, each of its component projects) constitutes a distinct undertaking identifiable from the ordinary business and activity of NSC. Each component project, of course, begins and ends at specified times, which had already been determined by the time petitioners were engaged. We also note that NSC did the work here involved — the construction of buildings and civil and electrical works, installation of machinery and equipment and the commissioning of such machinery — only for itself. Private respondent NSC was not in the business of constructing buildings and installing plant machinery for the general business community, i.e., for unrelated, third party, corporations. NSC did not hold itself out to the public as a construction company or as an engineering corporation.Which ever type of project employment is found in a particular case, a common basic requisite is that the designation of named employees as "project employees" and their assignment to a specific project, are effected and implemented in good faith, and not merely as a means of evading otherwise applicable requirements of labor laws.Thus, the particular component projects embraced in the Five Year Expansion Program, to which petitioners were assigned, were distinguishable from the regular or ordinary business of NSC which, of course, is the production or making and marketing of steel products. During the time petitioners rendered services to NSC, their work was limited to one or another of the specific component projects which made up the FAYEP I and II. There is nothing in the record to show that petitioners were hired for, or in fact assigned to, other purposes, e.g., for operating or maintaining the old, or previously installed and commissioned, steel-making machinery and equipment, or for selling the finished steel products.We, therefore, agree with the basic finding of the NLRC (and the Labor Arbiter) that the petitioners were indeed "project employees:"

It is well established by the facts and evidence on record that herein 13 complainants were hired and engaged for specific activities or undertaking the period of which has been determined at time of hiring or engagement. It is of public knowledge and which this Commission can safely take judicial notice that the expansion program (FAYEP) of respondent NSC consist of various phases [of] project components which are being executed or implemented independently or simultaneously from each other . . .In other words, the employment of each "project worker" is dependent and co-terminous with the completion or termination of the specific activity or undertaking [for which] he was hired which has been pre-determined at the time of engagement. Since, there is no showing that they (13 complainants) were engaged to perform work-related activities to the business of respondent which is steel-making, there is no logical and legal sense of applying to them the proviso under the second paragraph of Article 280 of the Labor Code, as amended.

xxx xxx xxxThe present case therefore strictly falls under the definition of "project employees" on paragraph one of Article 280 of the Labor Code, as amended. Moreover, it has been held that the length of service of a project employee is not the controlling test of employment tenure but whether or not "the employment has been fixed for a specific project or undertaking the completion or

termination of which has been determined at the time of the engagement of the employee". (See Hilario Rada v. NLRC, G.R. No. 96078, January 9, 1992; and Sandoval Shipping, Inc. v. NLRC, 136 SCRA 674 (1985). 9

Petitioners next claim that their service to NSC of more than six (6) years should qualify them as regular employees. We believe this claim is without legal basis. The simple fact that the employment of petitioners as project employees had gone beyond one (1) year, does not detract from, or legally dissolve, their status as project employees. 10 The second paragraph of Article 280 of the Labor Code, quoted above, providing that an employee who has served for at least one (1) year, shall be considered a regular employee, relates to casual employees , not to project employees. In the case of Mercado, Sr. vs. National Labor Relations Commission, 11 this Court ruled that the proviso in the second paragraph of Article 280 relates only to casual employees and is not applicable to those who fall within the definition of said Article's first paragraph, i.e., project employees. The familiar grammatical rule is that a proviso is to be construed with reference to the immediately preceding part of the provision to which it is attached, and not to other sections thereof, unless the clear legislative intent is to restrict or qualify not only the phrase immediately preceding the proviso but also earlier provisions of the statute or even the statute itself as a whole. No such intent is observable in Article 280 of the Labor Code, which has been quoted earlier.ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of merit. The Resolutions of the NLRC dated 8 January 1993 and 15 February 1993 are hereby AFFIRMED. No pronouncement as to costs.SO ORDERED.

Narvasa, C.J., Cruz, Padilla, Bidin, Regalado, Davide, Jr., Romero, Melo, Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur.Bellosillo, J., is on leave.

Tucor Industries, Inc. vs. NLRC, G. R. Nos. 96608-09, 20 May 1991G.R. Nos. 96608-09 May 20, 1991TUCOR INDUSTRIES, INC. and PATRICK BOLL, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION, FLORENCIO BASCO, REGINO DAYRIT, FLORANIO GARCIA, JESUS CANLAS, ABEL DAVID, REYNALDO INFANTE, EDISON TAPANG, LARRY ENRIQUEZ, REY SALALILA and PACIFICO C. DIZON, respondents.Abad, Leano & Associates for petitioners.Herminio Z. Canlas for private respondents. GANCAYCO, J.:pThe issue of whether private respondents are regular or casual employees is the center of this controversy.Petitioner is a corporation principally engaged in the moving and storage of various goods owned by military personnel residing within the United States military facilities in the Philippines. On various dates herein private respondents were hired as packers, drivers and utilitymen/carpenters. They signed uniform company-prepared master employment contracts, the terms and conditions of which are as follows:

a. You agree to be employed on "As Needed" basis and to the principle of "no work, no pay." This is so because of the very nature of the business of Tucor Moving and Storage wherein the volume of work handled by the Company varies from day to day and from project to project.b. Other than salaries actually earned, you as a daily-hired worker, shall not be entitled to any of the benefits enjoyed by the permanent employees of the Company.

xxx xxx xxxe. Due to the nature of our business, you agree to undergo periodic security screening, which can include the polygraph examination, the result of which shall be used as basis for, among others, the issuance or renewal of Base Pass, Company ID and/or handling of confidential documents or high-value items whenever necessary or applicable.

f. You agree to undergo investigation, to include the polygraph at the discretion of the Company, when you are implicated in any irregularity involving classified information, supplies, materials and equipment of the Company or its clients. 1

In a memorandum-letter dated July 17, 1989, the Chief of Traffic Management of Clark Air Base reminded all agents, including petitioner of the base policy that "(E)mployees who already have passes in their possession and who fail the polygraph . . ." administered by an acknowledged security company will be required to return their passes. On the same day petitioner terminated the employment of private respondents by sending them separate identical notices of termination, as follows:

You are well aware that your employment with Tucor Industries, Inc. is on "as needed basis" per your Master Employment Contract. You are also well-aware that your work assignment is within Clark Air Base and for this purpose, you should be equipped with a Base Pass duly issued by the American authorities. We are sorry to inform you that after an intensive and extensive investigation conducted as a result of numerous reports of missing items from shipments, your Base Pass was not cleared by the American authorities. For this reason, the Company could not avail of your services.In view of the foregoing, we regret to inform you that the Company could no longer retain you under its employ as a consequence of the denial of the Base authorities to clear and grant you the Base Pass. 2

All of private respondents had continuously been employed by petitioner for more than a year before the services were terminated.On August 2, 1989, private respondents, except Pacifico Dizon, filed a complaint for illegal dismissal against petitioner with the Regional Arbitration Branch No. 5 of the National Labor Relations Commission (NLRC) in San Fernando, Pampanga, Private respondent Dizon filed a complaint later. The case was heard and the parties submitted their respective position papers On August 7, 1989, the Executive Labor Arbiter rendered a decision, the dispositive part of which reads as follows:

WHEREFORE, judgment is hereby rendered against respondent Tucor Industries, Inc., directing it:1. To pay the backwages of the complainants in the total amount of P205,457.56;2. To reinstate complainants without loss of seniority rights and other privileges upon receipt of this Decision or reinstate them in payroll, in both instance at least at par with the minimum wage. 3

Petitioners appealed therefrom to public respondent NLRC. On September 14, 1990, the appeal was dismissed for lark of merit and the challenged decision of the Executive Labor Arbiter was affirmed in toto. A motion for reconsideration thereof filed by petitioner was denied in a resolution dated November 20, 1990.Hence, this petition for certiorari and prohibition with prayer for the issuance of a writ of preliminary injunction and restraining order. The petition raises the following assigned errors:

ITHAT THE PUBLIC RESPONDENT A QUO GRAVELY ABUSED ITS DISCRETION, IN A MANNER AMOUNTING TO EXCESS OF JURISDICTION, IN ERRONEOUSLY CONCLUDING THAT HEREIN PRIVATE RESPONDENTS CAN BE CONSIDERED AS REGULAR EMPLOYEES OF PETITIONER COMPANY.

IITHAT THE PUBLIC RESPONDENT GRAVELY ABUSE ITS DISCRETION WHEN IT AFFIRMED THE HONORABLE LABOR ARBITER'S FINDING THAT THE TERMINATION OF THE PRIVATE RESPONDENTS FROM THEIR EMPLOYMENT BY HEREIN PETITIONER COMPANY CONSTITUTES ILLEGAL DISMISSAL.

IIITHAT THE PUBLIC RESPONDENT FAILED TO CONSIDER THE PECULIARITY OF THE FACTS AND SITUATION IN THE CASE AT HAND IN A MANNER AMOUNTING TO GRAVE ABUSE OF DISCRETION, WHEN IT REVIEWED THAT LABOR ARBITER'S RULING. 4

Acting on the petition, the Court, on January 21, 1991, without giving due course to the same, required the respondents to comment thereon within ten (10) days from notice thereof and issued a temporary restraining order enjoining the respondent Commission from enforcing its resolutions until further orders. Petitioners filed a bond in the amount of P100,000.00 as required.

The petition is devoid of merit.Petitioners contend that private respondents cannot be considered as its regular employees inasmuch as the employment of the latter was contractual in nature; that they were deemed hired for a specific or a fixed undertaking on an "as needed basis," the efficacy of said contract being coterminous with or dependent upon the company and its clients.Article 280 of the Labor Code, as amended, provides as follows:

Art. 280. Regular and casual employment.—The provisions of a written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.(Emphasis supplied.)

Policy Instructions No. 12 of the Ministry of Labor and Employment provides that —PD 850 has refined the concept of regular and casual employment. What determines regularity or casualness is not the employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desirable to the main business of the employer, then the employment is regular; if not, then the employment is casual. . . (Emphasis supplied.)

An examination of the contract of employment does not show that private respondents were hired for a "specific project or undertaking" nor was the completion or termination of the alleged project for which private respondents were hired determined at the start of the employment.The term "specific project or undertaking" under Article 280 of the Labor Code contemplates an activity which was commonly or habitually performed or such type of work which is not done on a daily basis but only for a specific duration of time or until the completion of the project. The services employed are thus necessary or desirable in the employer's usual business only for the period of time it takes to complete the project. Without the performance of such services on a regular basis, the employer's main business is not expected to grind to a halt.In the case at bar, private respondents were assigned to do carpentry work, packing and driving, activities which are usually necessary and desirable in petitioners' usual business and which thus had to be done on a regular basis.The fact that private respondents had rendered more than one year of service at the time of their dismissal overturns the petitioner's allegation that private respondents were hired for a specific or a fixed undertaking for a limited period of time. The company-prepared master employment contracts placed the private respondents at the mercy of those who crafted the said contract. The work of the private respondents is hardly "specific" or "seasonal." Such is one instance under the Code "where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business." 5

Private respondents are therefore regular employees of petitioner the provisions of their contract of employment notwithstanding. They are entitled to security of tenure. The contention of the petitioners that private respondents were employed on "as needed basis" and under the principle of "no work, no pay" and that when such needs cease, petitioners, at their option may terminate their contract, is certainly untenable.Verily, the relation between capital and labor is not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. 6

The alleged non-renewal of the base passes of private respondents by the Clark Air Base authorities seems to be a mere ploy to dismiss private respondents from employment. No evidence was adduced as to the alleged investigation conducted by petitioner. There is no indication whether or not private respondents were subjected to polygraph tests for the possible renewal of their passes.At any rate, inasmuch as private respondents were engaged in the activities which are usual and necessary in usual business or trade of petitioner company, they are regular employees entitled to security of tenure, the

provision of the written agreement to the contrary notwithstanding. Their dismissal without just cause in this case and without appropriate investigation is certainly illegal.WHEREFORE, the petition is DISMISSED for lack of merit. The temporary restraining order issued by this Court on January 21, 1991 is hereby lifted, with costs against petitioners.SO ORDERED.Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Maraguinot, Jr. vs. NLRC, 284 SCRA 539[G.R. No. 120969. January 22, 1998]ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) composed of Presiding Commissioner RAUL T. AQUINO, Commissioner ROGELIO I. RAYALA and Commissioner VICTORIANO R. CALAYCAY (Ponente), VIC DEL ROSARIO and VIVA FILMS, respondents.D E C I S I O NDAVIDE, JR., J.:By way of this special civil action for certiorari under Rule 65 of the Rules of Court, petitioners seek to annul the 10 February 1995 Decision of the National Labor Relations Commission (hereafter NLRC), and its 6 April 1995 Resolution denying the motion to reconsider the former in NLRC-NCR-CA No. 006195-94. The decision reversed that of the Labor Arbiter in NLRC-NCR-Case No. 00-07-03994-92.The parties present conflicting sets of facts.Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private respondents on 18 July 1989 as part of the filming crew with a salary of P375.00 per week. About four months later, he was designated Assistant Electrician with a weekly salary of P400.00, which was increased to P450.00 in May 1990. In June 1991, he was promoted to the rank of Electrician with a weekly salary of P475.00, which was increased to P593.00 in September 1991.Petitioner Paulino Enero, on his part, claims that private respondents employed him in June 1990 as a member of the shooting crew with a weekly salary of P375.00, which was increased to P425.00 in May 1991, then to P475.00 on 21 December 1991.Petitioners’ tasks consisted of loading, unloading and arranging movie equipment in the shooting area as instructed by the cameraman, returning the equipment to Viva Films’ warehouse, assisting in the “fixing” of the lighting system, and performing other tasks that the cameraman and/or director may assign.Sometime in May 1992, petitioners sought the assistance of their supervisor, Mrs. Alejandria Cesario, to facilitate their request that private respondents adjust their salary in accordance with the minimum wage law. In June 1992, Mrs. Cesario informed petitioners that Mr. Vic del Rosario would agree to increase their salary only if they signed a blank employment contract. As petitioners refused to sign, private respondents forced Enero to go on leave in June 1992, then refused to take him back when he reported for work on 20 July 1992. Meanwhile, Maraguinot was dropped from the company payroll from 8 to 21 June 1992, but was returned on 22 June 1992. He was again asked to sign a blank employment contract, and when he still refused, private respondents terminated his services on 20 July 1992. Petitioners thus sued for illegal dismissal before the Labor Arbiter.On the other hand, private respondents claim that Viva Films (hereafter VIVA) is the trade name of Viva Productions, Inc., and that it is primarily engaged in the distribution and exhibition of movies -- but not in the business of making movies; in the same vein, private respondent Vic del Rosario is merely an executive producer, i.e., the financier who invests a certain sum of money for the production of movies distributed and exhibited by VIVA.Private respondents assert that they contract persons called “producers” -- also referred to as “associate producers” -- to “produce” or make movies for private respondents; and contend that petitioners are project employees of the associate producers who, in turn, act as independent contractors. As such, there is no employer-employee relationship between petitioners and private respondents.Private respondents further contend that it was the associate producer of the film “Mahirap Maging Pogi,” who hired petitioner Maraguinot. The movie shot from 2 July up to 22 July 1992, and it was only then that Maraguinot was released upon payment of his last salary, as his services were no longer needed. Anent petitioner Enero, he was hired for the movie entitled “Sigaw ng Puso,” later re-titled “Narito ang Puso.” He went on vacation on 8 June 1992, and by the time he reported for work on 20 July 1992, shooting for the movie had already been completed.After considering both versions of the facts, the Labor Arbiter found as follows:

On the first issue, this Office rules that complainants are the employees of the respondents. The producer cannot be considered as an independent contractor but should be considered only as a labor-only contractor and as such, acts as a mere agent of the real employer, the herein respondents. Respondents even failed to name and specify who are the producers. Also, it is an admitted fact that the complainants received their salaries from the respondents. The case cited by the respondents, Rosario Brothers, Inc. vs. Ople, 131 SCRA 72 does not apply in this case.It is very clear also that complainants are doing activities which are necessary and essential to the business of the respondents, that of movie-making. Complainant Maraguinot worked as an electrician while complainant Enero worked as a crew [member].Hence, the Labor Arbiter, in his decision of 20 December 1993, decreed as follows:WHEREFORE, judgment is hereby rendered declaring that complainants were illegally dismissed.Respondents are hereby ordered to reinstate complainants to their former positions without loss [of] seniority rights and pay their backwages starting July 21, 1992 to December 31, 1993 temporarily computed in the amount of P38,000.00 for complainant Paulino Enero and P46,000.00 for complainant Alejandro Maraguinot, Jr. and thereafter until actually reinstated.Respondents are ordered to pay also attorney’s fees equivalent to ten (10%) and/or P8,400.00 on top of the award.Private respondents appealed to the NLRC (docketed as NLRC NCR-CA No. 006195-94). In its decision of 10 February 1995, the NLRC found the following circumstances of petitioners’ work “clearly established:”1. Complainants [petitioners herein] were hired for specific movie projects and their employment was co-terminus with each movie project the completion/termination of which are pre-determined, such fact being made known to complainants at the time of their engagement.x x x2. Each shooting unit works on one movie project at a time. And the work of the shooting units, which work independently from each other, are not continuous in nature but depends on the availability of movie projects.3. As a consequence of the non-continuous work of the shooting units, the total working hours logged by complainants in a month show extreme variations... For instance, complainant Maraguinot worked for only 1.45 hours in June 1991 but logged a total of 183.25 hours in January 1992. Complainant Enero logged a total of only 31.57 hours in September 1991 but worked for 183.35 hours the next month, October 1991.4. Further shown by respondents is the irregular work schedule of complainants on a daily basis. Complainant Maraguinot was supposed to report on 05 August 1991 but reported only on 30 August 1991, or a gap of 25 days. Complainant Enero worked on 10 September 1991 and his next scheduled working day was 28 September 1991, a gap of 18 days.5. The extremely irregular working days and hours of complainants’ work explain the lump sum payment for complainants’ services for each movie project. Hence, complainants were paid a standard weekly salary regardless of the number of working days and hours they logged in. Otherwise, if the principle of “no work no pay” was strictly applied, complainants’ earnings for certain weeks would be very negligible.6. Respondents also alleged that complainants were not prohibited from working with such movie companies like Regal, Seiko and FPJ Productions whenever they are not working for the independent movie producers engaged by respondents... This allegation was never rebutted by complainants and should be deemed admitted.The NLRC, in reversing the Labor Arbiter, then concluded that these circumstances, taken together, indicated that complainants (herein petitioners) were “project employees.” After their motion for reconsideration was denied by the NLRC in its Resolution of 6 April 1995, petitioners filed the instant petition, claiming that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in: (1) finding that petitioners were project employees; (2) ruling that petitioners were not illegally dismissed; and (3) reversing the decision of the Labor Arbiter.To support their claim that they were regular (and not project) employees of private respondents, petitioners cited their performance of activities that were necessary or desirable in the usual trade or business of private respondents and added that their work was continuous, i.e., after one project was completed they were assigned to another project. Petitioners thus considered themselves part of a work pool from which private respondents drew workers for assignment to different projects. Petitioners lamented that there was no basis for the NLRC’s conclusion that they were project employees, while the associate producers were independent contractors; and thus reasoned that as regular employees, their dismissal was illegal since the same was premised on a “false

cause,” namely, the completion of a project, which was not among the causes for dismissal allowed by the Labor Code.Private respondents reiterate their version of the facts and stress that their evidence supports the view that petitioners are project employees; point to petitioners’ irregular work load and work schedule; emphasize the NLRC’s finding that petitioners never controverted the allegation that they were not prohibited from working with other movie companies; and ask that the facts be viewed in the context of the peculiar characteristics of the movie industry.The Office of the Solicitor General (OSG) is convinced that this petition is improper since petitioners raise questions of fact, particularly, the NLRC’s finding that petitioners were project employees, a finding supported by substantial evidence; and submits that petitioners’ reliance on Article 280 of the Labor Code to support their contention that they should be deemed regular employees is misplaced, as said section “merely distinguishes between two types of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits.”The OSG likewise rejects petitioners’ contention that since they were hired not for one project, but for a series of projects, they should be deemed regular employees. Citing Mamansag v. NLRC, the OSG asserts that what matters is that there was a time-frame for each movie project made known to petitioners at the time of their hiring. In closing, the OSG disagrees with petitioners’ claim that the NLRC’s classification of the movie producers as independent contractors had no basis in fact and in law, since, on the contrary, the NLRC “took pains in explaining its basis” for its decision.As regards the propriety of this action, which the Office of the Solicitor General takes issue with, we rule that a special civil action for certiorari under Rule 65 of the Rules of Court is the proper remedy for one who complains that the NLRC acted in total disregard of evidence material to or decisive of the controversy. In the instant case, petitioners allege that the NLRC’s conclusions have no basis in fact and in law, hence the petition may not be dismissed on procedural or jurisdictional grounds.The judicious resolution of this case hinges upon, first, the determination of whether an employer-employee relationship existed between petitioners and private respondents or any one of private respondents. If there was none, then this petition has no merit; conversely, if the relationship existed, then petitioners could have been unjustly dismissed.A related question is whether private respondents are engaged in the business of making motion pictures. Del Rosario is necessarily engaged in such business as he finances the production of movies. VIVA, on the other hand, alleges that it does not “make” movies, but merely distributes and exhibits motion pictures. There being no further proof to this effect, we cannot rely on this self-serving denial. At any rate, and as will be discussed below, private respondents’ evidence even supports the view that VIVA is engaged in the business of making movies.We now turn to the critical issues. Private respondents insist that petitioners are project employees of associate producers who, in turn, act as independent contractors. It is settled that the contracting out of labor is allowed only in case of job contracting. Section 8, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code describes permissible job contracting in this wise:Sec. 8. Job contracting. -- There is job contracting permissible under the Code if the following conditions are met:

(1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and

(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.

Assuming that the associate producers are job contractors, they must then be engaged in the business of making motion pictures. As such, and to be a job contractor under the preceding description, associate producers must have tools, equipment, machinery, work premises, and other materials necessary to make motion pictures. However, the associate producers here have none of these. Private respondents’ evidence reveals that the movie-making equipment are supplied to the producers and owned by VIVA. These include generators, cables and wooden platforms, cameras and “shooting equipment;” in fact, VIVA likewise owns the trucks used to transport the equipment. It is thus clear that the associate producer merely leases the equipment from VIVA. Indeed, private respondents’ Formal Offer of Documentary Evidence stated one of the purposes of Exhibit “148” as:To prove further that the independent Producers rented Shooting Unit No. 2 from Viva to finish their films.

While the purpose of Exhibits “149,” “149-A” and “149-B” was:[T]o prove that the movies of Viva Films were contracted out to the different independent Producers who rented Shooting Unit No. 3 with a fixed budget and time-frame of at least 30 shooting days or 45 days whichever comes first.Private respondents further narrated that VIVA’s generators broke down during petitioners’ last movie project, which forced the associate producer concerned to rent generators, equipment and crew from another company. This only shows that the associate producer did not have substantial capital nor investment in the form of tools, equipment and other materials necessary for making a movie. Private respondents in effect admit that their producers, especially petitioners’ last producer, are not engaged in permissible job contracting. If private respondents insist that their associate producers are labor contractors, then these producers can only be “labor-only” contractors, defined by the Labor Code as follows:Art. 106. Contractor or subcontractor.-- x x xThere is “labor-only” contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.A more detailed description is provided by Section 9, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code:Sec. 9. Labor-only contracting. -- (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and

(2) The workers recruited and placed by such person are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

(c) For cases not falling under this Article, the Secretary of Labor shall determine through appropriate orders whether or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering the operating needs of the employer and the rights of the workers involved. In such case, he may prescribe conditions and restrictions to insure the protection and welfare of the workers.

As labor-only contracting is prohibited, the law considers the person or entity engaged in the same a mere agent or intermediary of the direct employer. But even by the preceding standards, the associate producers of VIVA cannot be considered labor-only contractors as they did not supply, recruit nor hire the workers. In the instant case, it was Juanita Cesario, Shooting Unit Supervisor and an employee of VIVA, who recruited crew members from an “available group of free-lance workers which includes the complainants Maraguinot and Enero.” And in their Memorandum, private respondents declared that the associate producer “hires the services of... 6) camera crew which includes (a) cameraman; (b) the utility crew; (c) the technical staff; (d) generator man and electrician; (e) clapper; etc....” This clearly showed that the associate producers did not supply the workers required by the movie project.The relationship between VIVA and its producers or associate producers seems to be that of agency, as the latter make movies on behalf of VIVA, whose business is to “make” movies. As such, the employment relationship between petitioners and producers is actually one between petitioners and VIVA, with the latter being the direct employer.The employer-employee relationship between petitioners and VIVA can further be established by the “control test.” While four elements are usually considered in determining the existence of an employment relationship, namely: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct, the most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done but also as to the means and

methods to accomplish the same. These four elements are present here. In their position paper submitted to the Labor Arbiter, private respondents narrated the following circumstances:[T]he PRODUCER has to work within the limits of the budget he is given by the company, for as long as the ultimate finish[ed] product is acceptable to the company...To ensure that quality films are produced by the PRODUCER who is an independent contractor, the company likewise employs a Supervising PRODUCER, a Project accountant and a Shooting unit supervisor. The Company’s Supervising PRODUCER is Mr. Eric Cuatico, the Project accountant varies from time to time, and the Shooting Unit Supervisor is Ms. Alejandria Cesario.The Supervising PRODUCER acts as the eyes and ears of the company and of the Executive Producer to monitor the progress of the PRODUCER’s work accomplishment. He is there usually in the field doing the rounds of inspection to see if there is any problem that the PRODUCER is encountering and to assist in threshing out the same so that the film project will be finished on schedule. He supervises about 3 to 7 movie projects simultaneously [at] any given time by coordinating with each film “PRODUCER”. The Project Accountant on the other hand assists the PRODUCER in monitoring the actual expenses incurred because the company wants to insure that any additional budget requested by the PRODUCER is really justified and warranted especially when there is a change of original plans to suit the tast[e] of the company on how a certain scene must be presented to make the film more interesting and more commercially viable. (emphasis ours)VIVA’s control is evident in its mandate that the end result must be a “quality film acceptable to the company.” The means and methods to accomplish the result are likewise controlled by VIVA, viz., the movie project must be finished within schedule without exceeding the budget, and additional expenses must be justified; certain scenes are subject to change to suit the taste of the company; and the Supervising Producer, the “eyes and ears” of VIVA and del Rosario, intervenes in the movie-making process by assisting the associate producer in solving problems encountered in making the film.It may not be validly argued then that petitioners are actually subject to the movie director’s control, and not VIVA’s direction. The director merely instructs petitioners on how to better comply with VIVA’s requirements to ensure that a quality film is completed within schedule and without exceeding the budget. At bottom, the director is akin to a supervisor who merely oversees the activities of rank-and-file employees with control ultimately resting on the employer.Moreover, appointment slips issued to all crew members state:During the term of this appointment you shall comply with the duties and responsibilities of your position as well as observe the rules and regulations promulgated by your superiors and by Top Management.The words “superiors” and “Top Management” can only refer to the “superiors” and “Top Management” of VIVA. By commanding crew members to observe the rules and regulations promulgated by VIVA, the appointment slips only emphasize VIVA’s control over petitioners.Aside from control, the element of selection and engagement is likewise present in the instant case and exercised by VIVA. A sample appointment slip offered by private respondents “to prove that members of the shooting crew except the driver are project employees of the Independent Producers” reads as follows:VIVA PRODUCTIONS, INC.16 Sct. Albano St.Diliman, Quezon CityPEDRO NICOLAS Date: June 15, 1992__________________APPOINTMENT SLIPYou are hereby appointed as SOUNDMAN for the film project entitled “MANAMBIT”. This appointment shall be effective upon the commencement of the said project and shall continue to be effective until the completion of the same.For your services you shall receive the daily/weekly/monthly compensation of P812.50.During the term of this appointment you shall comply with the duties and responsibilities of your position as well as observe the rules and regulations promulgated by your superiors and by Top Management.Very truly yours,(an illegible signature)CONFORME:___________________

Name of appointeeSigned in the presence of:_____________________Notably, nowhere in the appointment slip does it appear that it was the producer or associate producer who hired the crew members; moreover, it is VIVA’s corporate name which appears on the heading of the appointment slip. What likewise tells against VIVA is that it paid petitioners’ salaries as evidenced by vouchers, containing VIVA’s letterhead, for that purpose.All the circumstances indicate an employment relationship between petitioners and VIVA alone, thus the inevitable conclusion is that petitioners are employees only of VIVA.The next issue is whether petitioners were illegally dismissed. Private respondents contend that petitioners were project employees whose employment was automatically terminated with the completion of their respective projects. Petitioners assert that they were regular employees who were illegally dismissed.It may not be ignored, however, that private respondents expressly admitted that petitioners were part of a work pool; and, while petitioners were initially hired possibly as project employees, they had attained the status of regular employees in view of VIVA’s conduct.A project employee or a member of a work pool may acquire the status of a regular employee when the following concur:1) There is a continuous rehiring of project employees even after cessation of a project; and 2) The tasks performed by the alleged “project employee” are vital, necessary and indispensable to the usual business or trade of the employer.However, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular employment.In the instant case, the evidence on record shows that petitioner Enero was employed for a total of two (2) years and engaged in at least eighteen (18) projects, while petitioner Maraguinot was employed for some three (3) years and worked on at least twenty-three (23) projects. Moreover, as petitioners’ tasks involved, among other chores, the loading, unloading and arranging of movie equipment in the shooting area as instructed by the cameramen, returning the equipment to the Viva Films’ warehouse, and assisting in the “fixing” of the lighting system, it may not be gainsaid that these tasks were vital, necessary and indispensable to the usual business or trade of the employer. As regards the underscored phrase, it has been held that this is ascertained by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety.A recent pronouncement of this Court anent project or work pool employees who had attained the status of regular employees proves most instructive:The denial by petitioners of the existence of a work pool in the company because their projects were not continuous is amply belied by petitioners themselves who admit that: xxx A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of “coddling labor at the expense of capital” and at the same time enables the workers to attain the status of regular employees. Clearly, the continuous rehiring of the same set of employees within the framework of the Lao Group of Companies is strongly indicative that private respondents were an integral part of a work pool from which petitioners drew its workers for its various projects.In a final attempt to convince the Court that private respondents were indeed project employees, petitioners point out that the workers were not regularly maintained in the payroll and were free to offer their services to other companies when there were no on-going projects. This argument however cannot defeat the workers’ status of regularity. We apply by analogy the case of Industrial-Commercial-Agricultural Workers Organization v. CIR [16 SCRA 562, 567-68 (1966)] which deals with regular seasonal employees. There we held: xxxTruly, the cessation of construction activities at the end of every project is a foreseeable suspension of work. Of course, no compensation can be demanded from the employer because the stoppage of operations at the end of a project and before the start of a new one is regular and expected by both parties to the labor relations. Similar to the case of regular seasonal employees, the employment relation is not severed by merely being suspended. [citing Manila Hotel Co. v. CIR , 9 SCRA 186 (1963)] The employees are, strictly speaking, not separated from

services but merely on leave of absence without pay until they are reemployed. Thus we cannot affirm the argument that non-payment of salary or non-inclusion in the payroll and the opportunity to seek other employment denote project employment. (underscoring supplied)While Lao admittedly involved the construction industry, to which Policy Instruction No. 20/Department Order No. 19 regarding work pools specifically applies, there seems to be no impediment to applying the underlying principles to industries other than the construction industry. Neither may it be argued that a substantial distinction exists between the projects undertaken in the construction industry and the motion picture industry. On the contrary, the raison d' etre of both industries concern projects with a foreseeable suspension of work.At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re-hire a project employee even after completion of the project for which he was hired. The import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. What this decision merely accomplishes is a judicial recognition of the employment status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool employees who perform tasks necessary or desirable to the employer’s usual business or trade. Let it not be said that this decision “coddles” labor, for as Lao has ruled, project or work pool employees who have gained the status of regular employees are subject to the “no work-no pay” principle, to repeat:A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of “coddling labor at the expense of capital” and at the same time enables the workers to attain the status of regular employees.The Court’s ruling here is meant precisely to give life to the constitutional policy of strengthening the labor sector, but, we stress, not at the expense of management. Lest it be misunderstood, this ruling does not mean that simply because an employee is a project or work pool employee even outside the construction industry, he is deemed, ipso jure, a regular employee. All that we hold today is that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow circumvention of labor laws in industries not falling within the ambit of Policy Instruction No. 20/Department Order No. 19, hence allowing the prevention of acquisition of tenurial security by project or work pool employees who have already gained the status of regular employees by the employer’s conduct.In closing then, as petitioners had already gained the status of regular employees, their dismissal was unwarranted, for the cause invoked by private respondents for petitioners’ dismissal, viz., completion of project, was not, as to them, a valid cause for dismissal under Article 282 of the Labor Code. As such, petitioners are now entitled to back wages and reinstatement, without loss of seniority rights and other benefits that may have accrued. Nevertheless, following the principles of “suspension of work” and “no pay” between the end of one project and the start of a new one, in computing petitioners’ back wages, the amounts corresponding to what could have been earned during the periods from the date petitioners were dismissed until their reinstatement when petitioners’ respective Shooting Units were not undertaking any movie projects, should be deducted.Petitioners were dismissed on 20 July 1992, at a time when Republic Act No. 6715 was already in effect. Pursuant to Section 34 thereof which amended Section 279 of the Labor Code of the Philippines and Bustamante v. NLRC, petitioners are entitled to receive full back wages from the date of their dismissal up to the time of their reinstatement, without deducting whatever earnings derived elsewhere during the period of illegal dismissal, subject, however, to the above observations.WHEREFORE, the instant petition is GRANTED. The assailed decision of the National Labor Relations Commission in NLRC NCR CA No. 006195-94 dated 10 February 1995, as well as its Resolution dated 6 April 1995, are hereby ANNULLED and SET ASIDE for having been rendered with grave abuse of discretion, and the decision of the Labor Arbiter in NLRC NCR Case No. 00-07-03994-92 is REINSTATED, subject, however, to the modification above mentioned in the computation of back wages. No pronouncement as to costs.SO ORDERED.

Bellosillo, Vitug, and Kapunan, JJ., concur.

4. Casual Employees – Art. 281 (2nd par.), Labor CodeCase(s): A.M. Oreta & Co., Inc. vs. NLRC, 176 SCRA 218

G.R. No. 74004. August 10, 1989A.M. ORETA & CO., INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and SIXTO GRULLA JR., respondents. Siguion Reyna, Montecillo & Ongsiako for petitioner MEDIALDEA, J.:This is a petition for certiorari under Rule 65 of the Rules of Court seeking annulment of the resolution of the respondents National Labor Relations Commission dated January 17, 1986 (p. 24, rollo) in BES Case no. 8-1371 entitled , "SIXTO GRULLA, JR., Complainant, versus A.M. ORETA & COMPANY INC. and/or ENGINEERING CONSTRUCTION & INDUSTRIAL DEVELOPMENT CO. (ENDECO), Respondents", affirming the decision of the Philippine Overseas Employment Administration (POEA) awarding to private respondents herein Sixto Grulla the salaries corresponding to the unexpired portion of his employment contract.The antecedent facts are as follows: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. Respondent Grulla left the Philippines for Jeddah, Saudi Arabia on August 5, 1980.On August 15, 1980, Grulla met an accident which fractured his lumbar vertebra while working at the jobsite. He was rushed to the New Jeddah Clinic and was confined there for twelve (12) days. On August 27, 1980, Grulla was discharged from the hospital and was told that he could resume his normal duties after undergoing physical therapy for two weeks.On September 18, 1980, respondent Grulla reported back to his Project Manager and presented to the latter a medical certificate declaring the former already fit for work. Since then, he started working again until he received a notice of termination of his employment on October 9, 1980.In December, 1981, respondent Grulla filed a complaint for illegal dismissal, recovery of medical benefits, unpaid wages for the unexpired ten (10) months of his contract and the sum of P1,000.00 as reimbursement of medical expenses against A.M. Oreta and Company, Inc., and Engineering Construction and Industrial Development Co. (ENDECO) with the Philippine Overseas Employment Administration (POEA).lâwphî1.ñèt The petitioner A.M. Oreta and Company, Inc and ENDECO filed their answer and alleged that the contract of employment entered into between petitioners and Grulla provides, as one of the grounds for termination, violations of the rules and regulations promulgated by the contractor; and that Grulla was dismissed because he has not performed his duties satisfactorally within the probationary period of three months.On August 8, 1985, the POEA rendered a decision (pp. 97-107, Rollo) the dispositive portion of which states, inter alia:

In view of the foregoing, this Office finds and so holds that complainants dismissal was illegal and warrants the award of his wages for the unexpired portion of the contract.2. Anent the complainant's claim for medical expenses, this Office finds the same well-taken. Respondent did not deny either specifically or generally said claim. Hence, it is deemed admitted.Wherefore, judgment is hereby rendered ordering repondents A.M. Oreta and Company, Inc , and its foreign principal Engineering Construction and Industrial Development Company (ENDECO) jointly and severally to pay the complainant within ten (10) days from receipt of this Order the sum of THREE THOUSAND SEVEN HUNDRED U.S. DOLLARS (U.S.$ 3,700.00) or its equivalent at the time of payment representing complainant's salaries for the unexpired portion of his contract for ten (10) months and the sum of ONE THOUSAND PESOS ( P1,00.00 ) representing reimbursement of medical expenses.

Respondent is likewise ordered to pay attorney's fees equivalent to ten (10%) percent of total awardSO ORDERED.

Petitioner appealed from the adverse decision to respondent Commission. On January 17, 1986, respondent Commission dismissed the appeal for lack of merit and affirmed in toto the decision of the POEA.On April 1, 1986, the instant petition was filed on the ground that the respondent Commission commited grave abuse of discretion in affirming the decision of the POEA. A temporary restraining order was issued by this court on April 23, 1986, enjoining the respondents from enforcing the questioned resolution of the respondent Commission.The issue to be resolved in the instant case are whether or not the employment of respondent Grulla was illegaly terminated by the petitioner; and whether or not the respondent Grulla is entitled to salaries corresponding to the unexpired portion of his employment contract.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. This contention has no merit.Article 280 (formerly Article 281) of the Labor Code, as amended, provides:

Article 280. Regular and Casual Employment — The provisions of written agreement to the contrary not withstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desireable in the usual business or trade of employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employment or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.

It may be well to cite at this point Policy Instructions No. 12 of the then Minister of Labor (Now Secretary of Labor and Employment) which provides:

PD 850 has defined the concept of regular and casual employment. What determines regularity or casualness is not employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desireable to the main business of the employer, the employment is regular. . .

Petitioner admitted that respondent Grulla was employed in the company as carpenter for a period of twelve (12) months before he was dismissed on October 9, 1980. 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.On the matter of probationary employment, the law in point is Article 281 (formerly 282) of the Labor Code which provides in part:

Art. 281 Probationary Employment . . .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 engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (Italics supplied)

The law is clear to the effect that in all cases involving employees engaged on probationary period basis, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify as a regular employee. 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. There is also no evidence on record showing that the respondent Grulla has been appraised of his probationary status and the requirements which he should comply in order to be a regular employee. In the absence of this requisites, there is justification in concluding that respondent Grulla was a

regular employee at the time he was dismissed by petitioner. As such, he is entitled to security of tenure during his period of employment and his services cannot be terminated except for just and authorized causes enumerated under the Labor Code and under the employment contract.Granting, in gratia argumenti, that respondent is a probationary employee, he cannot, likewise, be removed except for cause during the period of probation. Although a probationary or temporary employee has limited tenure, he still enjoys security of tenure. During his tenure of employment or before his contract expires, he cannot be removed except for cause as provided by law (Euro-Linea Phils., Inc. v. NLRC, No. L-75782, December 1, 1987, 156 SCRA 78; Manila Hotel Corporation v. NLRC, No. L-53453, January 22, 1986, 141 SCRA 169).lâwphî1.ñèt Article 282 of the Labor Code sets forth the following just causes for which an employer may terminate an employment, namely:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;(b) Gross and habitual neglect by the employee of his duties;(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and(e) other cause analogous to the foregoing

The alleged ground of unsatisfactory performance relied upon by petitioner for dismissing respondent Grulla is not one of the just causes for dismissal provided in the Labor Code. Neither is it included among the grounds for termination of employment under Article VII of the contract of employment executed by petitioner company and respondent Grulla (p. 18, Rollo). Moreover, petitioner has failed to show proof of the particular acts or omissions constituting the unsatisfactory performance of Grulla of his duties, which was allegedly due to his poor physical state after the accident. Contrary to petitioner's claims, records show that the medical certificate issued by the hospital where respondent Grulla was confined as a result of the accident, clearly and positively stated that Grulla was already physically fit for work after he was released from the hospital (p. 102, Rollo).lâwphî1.ñèt Anent the respondent Commission's finding of lack of due process in the dismissal of Grulla, the petitioner claims that notice and hearing are important only if the employee is not aware of the problems affecting his employment; that the same is not true in the instant case where respondent Grulla knew all along that he could no longer effectively perform his job due to his physical condition. We find that this contention has no legal basis.The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer's intent to dismiss and the reason for the proposed dismissal, while the requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly to defend himself therefrom before dismissal is effected. Neither of these requirements can be dispensed with without running afoul of the due process requirement of the Constitution (Century Textile Mills, Inc., et al. v. NLRC, et al., G.R. No. 77859, May 25,1988).In the case at bar, 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.In view of the foregoing, the dismissal of respondent Grulla violated the security of tenure under the contract of employment which specifically provides that the contract term shall be for a period of twelve (12) calendar months. Consequently the respondent Grulla should be paid his salary for the unexpired portion of his contract of employment which is ten (10) months (See Cuales v. NLRC, et al., No. L-57379 April 28, 1983, 121 SCRA 812).The findings of the POEA and the respondent Commission that the respondent Grulla is entitled to salaries in the amount of US$ 3,700.00 or its equivalent in Philippine currency for the unexpired portion of his contract and the sum of P1,000.00 as reimbursement of medical expenses bear great weight. Well-established is the principle that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the labor officer or office based his or its determination but are limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, Nos. L-51002-06, May 30, 1983, 122 SCRA 557). In the

instant case, the assailed Resolution of the respondent Commission is not tainted with arbitrariness that would amount to grave abuse of discretion or lack of jurisdiction and therefore, We find no reason to disturb the same.ACCORDINGLY, premises considered, the instant petition is dismissed for lack of merit and the resolution of the respondent Commission dated January 17, 1986 is hereby AFFIRMED. The temporary restraining order issued on April 23, 1986 is lifted.SO ORDERED. Narvasa, Cruz, Gancayco and Griñ;o-Aquino, JJ., concur.

Kimberly vs. Drilon, 185 SCRA 190G.R. No. L-77629 May 9, 1990KIMBERLY INDEPENDENT LABOR UNION FOR SOLIDARITY, ACTIVISM AND NATIONALISM-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE (KILUSAN-OLALIA), ROQUE JIMENEZ, MARIO C. RONGALEROS and OTHERS, petitioners, vs.HON. FRANKLIN M. DRILON, KIMBERLY-CLARK PHILIPPINES, INC., RODOLFO POLOTAN, doing business under the firm name "Rank Manpower Co." and UNITED KIMBERLY-CLARK EMPLOYEES UNION-PHILLIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (UKCEU-PTGWO), respondents.KIMBERLY INDEPENDENT LABOR UNION FOR SOLIDARITY, ACTIVITISM AND NATIONALISM-OLALIA (KILUSAN-OLALIA), petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, MANUEL AGUILAR, MA. ESTRELLA ALDA, CAPT. REY L. LANADA, COL. VIVENCIO MANAIG and KIMBERLY-CLARK PHILIPPINES, INC., respondents. REGALADO, J.:Before us are two consolidated petitions for certiorari filed by the above-named petitioner union (hereinafter referred to as KILUSAN-OLALIA, for conciseness) and individual complainants therein, to wit (a) G.R. 77629, which seeks to reverse and set aside the decision, dated November 13, 1986, 1 and the resolution, dated January 9, 1987, 2 respectively handed down by the two former Ministers of Labor, both rendered in BLR Case No. NS-5-164-86; and (b) G.R. No. 78791, which prays for the reversal of the resolutions of the National Labor Relations Commission, dated May 25, 1987 3 and June 19,1987 4 issued in Injunction Case No. 1442 thereof.Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity) executed a three-year collective bargaining agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and General Workers' Organization (UKCEU-PTGWO) which expired on June 30, 1986.Within the 60-day freedom period prior to the expiration of and during the negotiations for the renewal of the aforementioned CBA, some members of the bargaining unit formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and Nationalism-Organized Labor Association in Line Industries and Agriculture (KILUSAN-OLALIA)."On April 21, 1986, KILUSAN-OLALIA filed a petition for certification election in Regional Office No. IV, Ministry of Labor and Employment (MOLE), docketed as Case No. RO4-OD-M-415-86. 5 KIMBERLY and (UKCEU-PTGWO) did not object to the holding of a certification election but objected to the inclusion of the so-called contractual workers whose employment with KIMBERLY was coursed through an independent contractor, Rank Manpower Company (RANK for short), as among the qualified voters.Pending resolution of the petition for certification election by the med-arbiter, KILUSAN-OLALIA filed a notice of strike on May 7, 1986 with the Bureau of Labor Relations, docketed as BLR Case No. NS-5-164-86, 6 charging KIMBERLY with unfair labor practices based on the following alleged acts: (1) dismissal of union members (KILUSAN-OLALIA); (2) non-regularization of casuals/contractuals with over six months service; (3) non-implementation of appreciation bonus for 1982 and 1983; (4) non-payment of minimum wages; (5) coercion of employees; and (6) engaging in CBA negotiations despite the pendency of a petition for certification election. This was later amended to withdraw the charge of coercion but to add, as new charges, the dismissal of Roque Jimenez and the non-payment of backwages of the reinstated Emerito Fuentes . 7

Conciliation proceedings conducted by the bureau proved futile, and KILUSAN-OLALIA declared a strike at KIMBERLY's premises in San Pedro, Laguna on May 23, 1986.

On May 26, 1986, KIMBERLY petitioned MOLE to assume jurisdiction over the labor dispute. On May 30, 1986, finding that the labor dispute would adversely affect national interest, then Minister Augusto S. Sanchez issued an assumption order, the dispositive portion whereof reads:

Wherefore, premises considered, immediately upon receipt of this order, the striking union and its members are hereby enjoined to lift the picket and remove all obstacles to the free ingress to and egress from the company premises and to return to work, including the 28 contractual workers who were dismissed; likewise, the company is directed to resume its operations immediately thereafter and to accept all the employees back under the same terms and conditions of employment prevailing prior to the industrial action. Further, all issues in the notice of strike, as amended, are hereby assumed in this assumption order, except for the representation issue pending in Region IV in which the Med-Arbiter is also enjoined to decide the same the soonest possible time. 8

In obedience to said assumption order, KILUSAN-OLALIA terminated its strike and picketing activities effective June 1, 1986 after a compliance agreement was entered into by it with KIMBERLY. 9

On June 2, 1986, Med-Arbiter Bonifacio 1. Marasigan, who was handling the certification election case (RO4-OD-M-4-1586), issued an order 10 declaring the following as eligible to vote in the certification election, thus:

1. The regular rank-and-file laborers/employees of the respondent company consisting of 537 as of May 14, 1986 should be considered qualified to vote;2. Those casuals who have worked at least six (6) months as appearing in the payroll months prior to the filing of the instant petition on April 21, 1986; and3. Those contractual employees who are allegedly in the employ of an independent contractor and who have also worked for at least six (6) months as appearing in the payroll month prior to the filing of the instant petition on April 21, 1986.

During the pre-election conference, 64 casual workers were challenged by KIMBERLY and (UKCEU-PTGWO) on the ground that they are not employees, of KIMBERLY but of RANK. It was agreed by all the parties that the 64 voters shall be allowed to cast their votes but that their ballots shall be segregated and subject to challenge proceedings. The certification election was conducted on July I., 1986, with the following results: 11

1. KILUSAN-OLALIA = 246 votes 2. (UKCEU-PTGWO) = 266 votes 3. NO UNION = 1 vote4. SPOILED BALLOTS = 4 votes5. CHALLENGED BALLOTS = 64 votes————TOTAL 581 votes

On July 2, 1986, KILUSAN-OLALIA filed with the med-arbiter a "Protest and Motion to Open and Count Challenged Votes" 12 on the ground that the 64 workers are employees of KIMBERLY within the meaning of Article 212(e) of the Labor Code. On July 7, 1986, KIMBERLY filed an opposition to the protest and motion, asserting that there is no employer-employee relationship between the casual workers and the company, and that the med-arbiter has no jurisdiction to rule on the issue of the status of the challenged workers which is one of the issues covered by the assumption order. The med-arbiter opted not to rule on the protest until the issue of regularization has been resolved byMOLE. 13 On November 13, 1986, then Minister Sanchez rendered a decision in BLR Case No. NS-5-164-86, 14 the disposition wherein is summarized as follows:

1. The service contract for janitorial and yard maintenance service between KIMBERLY and RANK was declared legal;2. The other casual employees not performing janitorial and yard maintenance services were deemed labor-only contractual and since labor-only contracting is prohibited, such employees were held to have attained the status of regular employees, the regularization being effective as of the date of the decision;3. UKCEU-PTGWO having garnered more votes than KILUSAN-OLALIA was certified as the exclusive bargaining representative of KIMBERLY's employees;4. The reinstatement of 28 dismissed KILUSAN-OLALIA members was ordered;

5. Roque Jimenez was ordered reinstated without backwages, the period when he was out of work being considered as penalty for his misdemeanor;6. The decision of the voluntary arbitrator ordering the reinstatement of Ermilo Fuentes with backwages was declared as already final and unappealable; and7. KIMBERLY was ordered to pay appreciation bonus for 1982 and 1983.

On November 25, 1986, KIMBERLY flied a motion for reconsideration with respect to the regularization of contractual workers, the appreciation bonus and the reinstatement of Roque Jimenez. 15 In a letter dated November 24, 1986, counsel for KILUSAN-OLALIA demanded from KIMBERLY the implementation of the November 13, 1986 decision but only with respect to the regularization of the casual workers. 16

On December 11, 1986, KILUSAN-OLALIA filed a motion for reconsideration questioning the authority of the Minister of Labor to assume jurisdiction over the representation issue. In the meantime, KIMBERLY and UKCEU-PTGWO continued with the negotiations on the new collective bargaining agreement (CBA), no restraining order or junctive writ having been issued, and on December 18, 1986, a new CBA was concluded and ratified by 440 out of 517 members of the bargaining unit. 17

In an order dated January 9, 1987, former Labor Minister Franklin Drilon denied both motions for reconsideration filed by KIMBERLY and KILUSAN-OLALIA. 18 On March 10, 1987, the new CBA executed between KIMBERLY and UKCEU-PTGWO was signed.On March 16, 1987, KILUSAN-OLALIA filed a petition for certiorari in this Court docketed as G.R. No. 77629, seeking to set aside the aforesaid decision, dated November 13, 1986, and the order, dated January 9, 1987, rendered by the aforesaid labor ministers.On March 25, 1987, this Court issued in G.R. No. 77629 a temporary restraining order, enjoining respondents from enforcing and/or carrying out the decision and order above stated, particularly that portion (1) recognizing respondent UKCEU-PTGWO as the exclusive bargaining representative of all regular rank-and-file employees in the establishment of respondent company, (2) enforcing and/or implementing the alleged CBA which is detrimental to the interests of the members of the petitioner union, and (3) stopping respondent company from deducting monthly dues and other union assessments from the wages of all regular rank-and-file employees of respondent company and from remitting the said collection to respondent UKCEU-PTGWO issued in BLR Case No. NS-5-164-86, entitled, "In Re: Labor Dispute at Kimberly-Clark Philippines, Inc.," of the Department of Labor and Employment, Manila, 19

In its comment, 20 respondent company pointed out certain events which took place prior to the filing of the petition in G.R. No. 77629, to wit:

1. The company and UKCEU-PTGWO have concluded a new collective bargaining agreement which had been ratified by 440 out of 517 members of the bargaining unit;2. The company has already granted the new benefits under the new CBA to all its regular employees, including members of petitioner union who, while refusing to ratify the CBA nevertheless readily accepted the benefits arising therefrom;3. The company has been complying with the check-off provision of the CBA and has been remitting the union dues to UKCEU-PTGWO4. The company has already implement the decision of November 13, 1986 insofar as the regularization of contractual employees who have rendered more than one (1) year of service as of the filing of the Notice of Strike on May 7, 1986 and are not engaged in janitorial and yard maintenance work, are concerned5. Rank Manpower Company had already pulled out, reassigned or replaced the contractual employees engaged in janitorial and yard maintenance work, as well as those with less than one year service; and6. The company has reinstated Roque Jimenez as of January 11, 1987.

In G.R. No. 78791, the records 21 disclose that on May 4, 1987, KILUSAN-OLALIA filed another notice of strike with the Bureau of Labor Relations charging respondent company with unfair labor practices. On May 8, 1987, the bureau dismissed and considered the said notice as not filed by reason of the pendency of the representation issue before this Court in G.R. No. 77629. KILUSAN-OLALIA moved to reconsider said order, but before the bureau could act on said motion, KILUSAN-OLALIA declared a strike and established a picket on respondent company's premises in San Pedro, Laguna on May 17, 1987.

On May 18, 1987, KIMBERLY filed a petition for injunction with the National Labor Relations Commission (NLRC), docketed as Injunction Case No. 1442. A supplement to said petition was filed on May 19, 1987. On May 26, 1987, the commission en banc issued a temporary restraining order (TRO) on the basis of the ocular inspection report submitted by the commission's agent, the testimonies of KIMBERLY's witnesses, and pictures of the barricade. KILUSAN-OLALIA moved to dissolve the TRO on the ground of lack of jurisdiction.Immediately after the expiration of the first TRO on June 9, 1987, the striking employees returned to their picket lines and reestablished their barricades at the gate. On June 19, 1987, the commission en banc issued a second TRO.On June 25, 1987, KILUSAN-OLALIA filed another petition for certiorari and prohibition with this Court, docketed as G.R. No. 78791, questioning the validity of the temporary restraining orders issued by the NLRC on May 26, 1987 and June 19, 1987. On June 29, 1987, KILUSAN-OLALIA filed in said case an urgent motion for a TRO to restrain NLRC from implementing the questioned orders. An opposition, as well as a reply thereto, were filed by the parties.Meanwhile, on July 3, 1987, KIMBERLY filed in the NLRC an urgent motion for the issuance of a writ of preliminary injunction when the strikers returned to the strike area after the second TRO expired. After due hearing, the commission issued a writ of preliminary injunction on July 14, 1987, after requiring KIMBERLY to post a bond in the amount of P20,000.00.Consequently, on July 17, 1987, KILUSAN-OLALIA filed in G.R. No. 78791 a second urgent motion for the issuance of a TRO by reason of the issuance of said writ of preliminary injunction, which motion was opposed by KIMBERLY.Thereafter, in its memorandum 22 filed on December 28, 1989 and in its motion for early resolution 23 filed on February 28, 1990, both in G.R. No. 78791, KILUSAN-OLALIA alleged that it had terminated its strike and picketing activities and that the striking employees had unconditionally offered to return to work, although they were refused admission by KIMBERLY. By reason of this supervening development, the petition in G.R. No. 78791, questioning the propriety of the issuance of the two temporary restraining orders and the writ of injunction therein, has been rendered moot and academic.In G.R. No. 77629, the petition of KILUSAN-OLALIA avers that the respondent Secretary of Labor and/or the former Minister of Labor have acted with grave abuse of discretion and/or without jurisdiction in (1) ruling on the issue of bargaining representation and declaring respondent UKCEU-PTGWO as the collective bargaining representative of all regular rank-and-file employees of the respondent company; (2) holding that petitioners are not entitled to vote in the certification election; (3) considering the regularization of petitioners (who are not janitors and maintenance employees) to be effective only on the date of the disputed decision; (4) declaring petitioners who are assigned janitorial and yard maintenance work to be employees of respondent RANK and not entitled to be regularized; (5) not awarding to petitioners differential pay arising out of such illegal work scheme; and (6) ordering the mere reinstatement of petitioner Jimenez.The issue of jurisdiction actually involves a question of whether or not former Minister Sanchez committed a grave abuse of discretion amounting to lack of jurisdiction in declaring respondent UKCEU-PTGWO as the certified bargaining representative of the regular employees of KIMBERLY, after ruling that the 64 casual workers, whose votes are being challenged, were not entitled to vote in the certification election.

KILUSAN-OLALIA contends that after finding that the 64 workers are regular employees of KIMBERLY, Minister Sanchez should have remanded the representation case to the med-arbiter instead of declaring UKCEU-PTGWO as the winner in the certification election and setting aside the med-arbiter's order which allowed the 64 casual workers to cast their votes.

Respondents argue that since the issues of regularization and representation are closely interrelated and that a resolution of the former inevitably affects the latter, it was necessary for the former labor minister to take cognizance of the representation issue; that no timely motion for reconsideration or appeal was made from his decision of November 13, 1986 which has become final and executory; and that the aforesaid decision was impliedly accepted by KILUSAN-OLALIA when it demanded from KIMBERLY the issuance of regular appointments to its affected members in compliance with said decision, hence petitioner employees are now stopped from questioning the legality thereof.

We uphold the authority of former Minister Sanchez to assume jurisdiction over the issue of the regularization of the 64 casual workers, which fact is not even disputed by KILUSAN-OLALIA as may be gleaned from its request for an interim order in the notice of strike case (BLR-NS-5-164-86), asking that the regularization issue be immediately resolved. Furthermore, even the med-arbiter who ordered the holding of the certification election refused to resolve the protest on the ground that the issue raised therein correctly pertains to the jurisdiction of the then labor minister. No opposition was offered by KILUSAN-OLALIA. We hold that the issue of regularization was properly addressed to the discretion of said former minister.

However, the matter of the controverted pronouncement by former Minister Sanchez, as reaffirmed by respondent secretary, regarding the winner in the certification election presents a different situation.

It will be recalled that in the certification election, UKCEU-PTGWO came out as the winner, by garnering a majority of the votes cast therein with the exception of 64 ballots which were subject to challenge. In the protest filed for the opening and counting of the challenged ballots, KILUSAN-OLALIA raised the main and sole question of regularization of the 64 casual workers. The med-arbiter refused to act on the protest on the ground that the issue involved is within the jurisdiction of the then Minister of Labor. KILUSAN-OLALIA then sought an interim order for an early resolution on the employment status of the casual workers, which was one of the issues included in the notice of strike filed by KILUSAN-OLALIA in BLR Case No. NS-5-164-86. Consequently, Minister Sanchez rendered the questioned decision finding that the workers not engaged in janitorial and yard maintenance service are regular employees but that they became regular only on the date of his decision, that is, on November 13, 1986, and, therefore, they were not entitled to vote in the certification election. On the basis of the results obtained in the certification election, Minister Sanchez declared UKCEU-PTGWO as the winner.

The pivotal issue, therefore, is when said workers, not performing janitorial or yard maintenance service, became regular employees of KIMBERLY .

We find and so hold that the former labor minister gravely abused his discretion in holding that those workers not engaged in janitorial or yard maintenance service attained the status of regular employees only on November 13, 1986, which thus deprived them of their constitutionally protected right to vote in the certification election and choose their rightful bargaining representative.

The Labor Code defines who are regular employees, as follows:Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary not withstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or under the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

The law thus provides for two. kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. The individual petitioners herein who have been adjudged to be regular employees fall under the second category. These are the mechanics, electricians, machinists machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and masons It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the time of the filing of the Petition for certification election by KILUSAN-OLALIA.

Owing to their length of service with the company, these workers became regular employees, by operation of law, one year after they were employed by KIMBERLY through RANK. While the actual regularization of these employees entails the mechanical act of issuing regular appointment papers and compliance with such other operating procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual worker on the day immediately after the end of his first year of service. To rule otherwise, and to instead make their regularization dependent on the happening of some contingency or the fulfillment of certain requirements, is to impose a burden on the employee which is not sanctioned by law.

That the first stated position is the situation contemplated and sanctioned by law is further enhanced by the absence of a statutory limitation before regular status can be acquired by a casual employee. The law is explicit. As long as the employee has rendered at least one year of service, he becomes a regular employee with respect to the activity in which he is employed. The law does not provide the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn.

The submission that the decision of November 13, 1986 has become final and executory, on the grounds that no timely appeal has been made therefrom and that KILUSAN-OLALIA has impliedly acceded thereto, is untenable.Rule 65 of the Rules of Court allows original petitions for certiorari from decisions or orders of public respondents provided they are filed within a reasonable time. We believe that the period from January 9, 1987, when the motions for reconsideration separately filed by KILUSAN-OLALIA and KIMBERLY were denied, to March 16, 1987, when the petition in G.R. No. 77629 was filed, constitutes a reasonable time for availing of such recourse.We likewise do not subscribe to the claim of respondents that KILUSAN-OLALIA has impliedly accepted the questioned decision by demanding compliance therewith. In the letter of KILUSAN-OLALIA dated November 24, 1986 24 addressed to the legal counsel of KIMBERLY, it is there expressly and specifically pointed out that KILUSAN-OLALIA intends to file a motion for reconsideration of the questioned decision but that, in the meantime, it was demanding the issuance of regular appointments to the casual workers who had been declared to be regular employees. The filing of said motion for reconsideration of the questioned decision by KILUSAN-OLALIA, which was later denied, sustains our position on this issue and denies the theory of estoppel postulated by respondents.On the basis of the foregoing circumstances, and as a consequence of their status as regular employees, those workers not perforce janitorial and yard maintenance service were performance entitled to the payment of salary differential, cost of living allowance, 13th month pay, and such other benefits extended to regular employees under the CBA, from the day immediately following their first year of service in the company. These regular employees are likewise entitled to vote in the certification election held in July 1, 1986. Consequently, the votes cast by those employees not performing janitorial and yard maintenance service, which form part of the 64 challenged votes, should be opened, counted and considered for the purpose of determining the certified bargaining representative.We do not find it necessary to disturb the finding of then Minister Sanchez holding as legal the service contract executed between KIMBERLY and RANK, with respect to the workers performing janitorial and yard maintenance service, which is supported by substantial and convincing evidence. Besides, we take judicial notice of the general practice adopted in several government and private institutions and industries of hiring a janitorial service on an independent contractor basis. Furthermore, the occasional directives and suggestions of KIMBERLY are insufficient to erode primary and continuous control over the employees of the independent contractor. 25 Lastly, the duties performed by these workers are not independent and integral steps in or aspects of the essential operations of KIMBERLY which is engaged in the manufacture of consumer paper products and cigarette paper, hence said workers cannot be considered regular employees.The reinstatement of Roque Jimenez without backwages involves a question of fact best addressed to the discretion of respondent secretary whose finding thereon is binding and conclusive upon this Court, absent a showing that he committed a grave abuse in the exercise thereof.WHEREFORE, judgment is hereby rendered in G.R. No. 77629:1. Ordering the med-arbiter in Case No. R04-OD-M-4-15-86 to open and count the 64 challenged votes, and that the union with the highest number of votes be thereafter declared as the duly elected certified bargaining representative of the regular employees of KIMBERLY;

2. Ordering KIMBERLY to pay the workers who have been regularized their differential pay with respect to minimum wage, cost of living allowance, 13th month pay, and benefits provided for under the applicable collective bargaining agreement from the time they became regular employees.All other aspects of the decision appealed from, which are not so modified or affected thereby, are hereby AFFIRMED. The temporary restraining order issued in G.R. No. 77629 is hereby made permanent.The petition filed in G.R. No. 78791 is hereby DISMISSED.SO ORDERED.Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.

5. Contract-Fixed PeriodCase(s): Brent School vs. Zamora, 181 SCRA 702

G.R. No. L-48494 February 5, 1990BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners, vs.RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of the President, and DOROTEO R. ALEGRE, respondents.Quasha, Asperilla, Ancheta, Peña & Nolasco for petitioners.Mauricio G. Domogon for respondent Alegre. NARVASA, J.:The question presented by the proceedings at bar 1 is whether or not the provisions of the Labor Code, 2 as amended, 3 have anathematized "fixed period employment" or employment for a term.The root of the controversy at bar is an employment contract in virtue of which Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly compensation of P20,000.00. 4 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. 5

Some three months before the expiration of the stipulated period, or more precisely 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." And a month or so later, on May 26, 1976, 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."However, at the investigation conducted by a Labor Conciliator of said report of termination of his services, Alegre protested the announced termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business of his employer , and his employment had lasted for five years, he had acquired the status of a regular employee and could not be removed except for valid cause. 6 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. The Director pronounced "the ground relied upon by the respondent (Brent) in terminating the services of the complainant (Alegre) . . . (as) not sanctioned by P.D. 442," and, quite oddly, as prohibited by Circular No. 8, series of 1969, of the Bureau of Private Schools. 7

Brent School filed a motion for reconsideration. The Regional Director denied the motion and forwarded the case to the Secretary of Labor for review. 8 The latter sustained the Regional Director. 9 Brent appealed to the Office of the President. Again it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed the Labor Secretary's decision, ruling that Alegre was a permanent employee who could not be dismissed except for just cause, and expiration of the employment contract was not one of the just causes provided in the Labor Code for termination of services. 10

The School is now before this Court in a last attempt at vindication. That it will get here.The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code did not come into effect until November 1, 1974, some three years after the perfection of the employment contract, and rights and obligations thereunder had arisen and been mutually observed and enforced.At that time, i.e., before the advent of the Labor Code, there was no doubt whatever about the validity of term employment. It was impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052, 11 as amended by R.A. 1787. 12 Basically, this statute provided that—

In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to the employee at least one month in advance or one-half month for every year of service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year.The employer, upon whom no such notice was served in case of termination of employment without just cause, may hold the employee liable for damages.The employee, upon whom no such notice was served in case of termination of employment without just cause, shall be entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages corresponding to the required period of notice.

There was, to repeat, clear albeit implied recognition of the licitness of term employment. RA 1787 also enumerated what it considered to be just causes for terminating an employment without a definite period, either by the employer or by the employee without incurring any liability therefor.Prior, thereto, it was the Code of Commerce which governed employment without a fixed period, and also implicitly acknowledged the propriety of employment with a fixed period. Its Article 302 provided that —

In cases in which the contract of employment does not have a fixed period, any of the parties may terminate it, notifying the other thereof one month in advance.The factor or shop clerk shall have a right, in this case, to the salary corresponding to said month.

The salary for the month directed to be given by the said Article 302 of the Code of Commerce to the factor or shop clerk, was known as the mesada (from mes, Spanish for "month"). When Article 302 (together with many other provisions of the Code of Commerce) was repealed by the Civil Code of the Philippines, Republic Act No. 1052 was enacted avowedly for the precise purpose of reinstating the mesada.

Now, 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 in section 2, Chapter 3, Title I, Book IV; and with contracts of labor and for a piece of work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of Book IV. No prohibition against term-or fixed-period 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 on July 18, 1971, 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, for instance, in Biboso v. Victorias Milling Co., Inc., promulgated on March 31, 1977, 13 and J. Walter Thompson Co. (Phil.) v. NLRC, promulgated on December 29, 1983. 14 The Thompson case involved an executive who had been engaged for a fixed period of three (3) years. Biboso involved teachers in a private school as regards whom, the following pronouncement was made:

What is decisive is that petitioners (teachers) were well aware an the time that their tenure was for a limited duration. Upon its termination, both parties to the employment relationship were free to renew it or to let it lapse. (p. 254)

Under American law 15 the principle is the same. "Where a contract specifies the period of its duration, it terminates on the expiration of such period." 16 "A contract of employment for a definite period terminates by its own terms at the end of such period." 17

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (Presidential Decree No. 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 timeArticle 320, entitled "Probationary and fixed period employment," 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." The asserted objective to was "prevent the circumvention of the right of the employee to be secured in their employment as provided . . . (in the Code)."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: 18

An employment shall be deemed to be without a definite period for purposes of this Chapter 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.

The question immediately provoked by a reading of Article 319 is whether or not a voluntary agreement on a fixed term or period would be valid where the employee "has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer." The definition seems a non sequitur. From the premise — that the duties of an employee entail "activities which are usually necessary or desirable in the usual business or trade of the employer the" — conclusion does not necessarily follow that the employer and employee should be forbidden to stipulate any period of time for the performance of those activities. There is nothing essentially contradictory between a definite period of an employment contract and the nature of the employee's duties set down in that contract as being "usually necessary or desirable in the usual business or trade of the employer." The concept of the employee's duties as being "usually necessary or desirable in the usual business or trade of the employer" is not synonymous with or identical to employment with a fixed term. Logically, the decisive determinant in term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be "that which must necessarily come, although it may not be known when." 1 9 Seasonal employment, and employment for a particular project are merely instances employment in which a period, where not expressly set down, necessarily implied.Of course, the term — period has a definite and settled signification. It means, "Length of existence; duration. A point of time marking a termination as of a cause or an activity; an end, a limit, a bound; conclusion; termination. A series of years, months or days in which something is completed. A time of definite length. . . . the period from one fixed date to another fixed date . . ." 20 It connotes a "space of time which has an influence on an obligation as a result of a juridical act, and either suspends its demandableness or produces its extinguishment." 21 It should be apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no account at all of the nature of the duties of the employee; it has absolutely no relevance to the character of his duties as being "usually necessary or desirable to the usual business of the employer," or not.Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were amended by Presidential Decree No. 850, effective December 16, 1975.Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to persons "employed with a fixed period," and was renumbered (becoming Article 271). The article 22 now reads:

. . . Probationary employment.—Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged in 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.

Also amended by PD 850 was Article 319 (entitled "Employment with a fixed period," supra) by (a) deleting mention of employment with a fixed or definite period, (b) adding a general exclusion clause declaring irrelevant written or oral agreements "to the contrary," and (c) making the provision treat exclusively of "regular" and "casual" employment. As revised, said article, renumbered 270, 23 now reads:

. . . Regular and Casual Employment.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be employed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to he casual if it is not covered by the preceding paragraph: provided, that, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.

The first paragraph is identical to Article 319 except that, as just mentioned, a clause has been added, to wit: "The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties . . ." The clause would appear to be addressed inter alia to agreements fixing a definite period for employment. There is withal no clear indication of the intent to deny validity to employment for a definite period. Indeed, not only is the concept of regular employment not essentially inconsistent with employment for a fixed term, as above pointed out, Article 272 of the Labor Code, as amended by said PD 850, still impliedly acknowledged the propriety of term employment: it listed the "just causes" for which "an employer may terminate employment without a definite period," thus giving rise to the inference that if the employment be with a definite period, there need be no just cause for termination thereof if the ground be precisely the expiration of the term agreed upon by the parties for the duration of such employment.

Still later, however, said Article 272 (formerly Article 321) was further amended by Batas Pambansa Bilang 130, 24 to eliminate altogether reference to employment without a definite period. As lastly amended, the opening lines of the article (renumbered 283), now pertinently read: "An employer may terminate an employment for any of the following just causes: . . . " BP 130 thus completed the elimination of every reference in the Labor Code, express or implied, to employment with a fixed or definite period or term.It is in the light of the foregoing description of the development of the provisions of the Labor Code bearing on term or fixed-period employment that the question posed in the opening paragraph of this opinion should now be addressed. Is it then the legislative intention to outlaw stipulations in employment contracts laying down a definite period therefor? Are such stipulations in essence contrary to public policy and should not on this account be accorded legitimacy?On the one hand, there is the gradual and progressive elimination of references to term or fixed-period employment in the Labor Code, and the specific statement of the rule 25 that—

. . . Regular and Casual Employment.— The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be employed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: provided, that, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.

There is, on the other hand, the Civil Code, which has always recognized, and continues to recognize, the validity and propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on the freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services, except the general admonition against stipulations contrary to law, morals, good customs, public order or public policy. 26 Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with pre-determined

dates of completion; they also include those to which the parties by free choice have assigned a specific date of termination.Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment contracts, for one, to which, whatever the nature of the engagement, the concept of regular employment will all that it implies does not appear ever to have been applied, Article 280 of the Labor Code not withstanding; also appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions, which are by practice or tradition rotated among the faculty members, and where fixed terms are a necessity, without which no reasonable rotation would be possible. Similarly, despite the provisions of Article 280, Policy, Instructions No. 8 of the Minister of Labor 27 implicitly recognize that certain company officials may be elected for what would amount to fixed periods, at the expiration of which they would have to stand down, in providing that these officials," . . . may lose their jobs as president, executive vice-president or vice-president, etc. because the stockholders or the board of directors for one reason or another did not re-elect them."There can of course be no quarrel with the proposition that where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy, morals, etc. But where no such intent to circumvent the law is shown, or stated otherwise, where the reason for the law does not exist, e.g., where it is indeed the employee himself who insists upon a period or where the nature of the engagement is such that, without being seasonal or for a specific project, a definite date of termination is a sine qua non, would an agreement fixing a period be essentially evil or illicit, therefore anathema? Would such an agreement come within the scope of Article 280 which admittedly was enacted "to prevent the circumvention of the right of the employee to be secured in . . . (his) employment?"As it is evident from even only the three examples already given that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of employer's using it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head.

It is a salutary principle in statutory construction that there exists a valid presumption that undesirable consequences were never intended by a legislative measure, and that a construction of which the statute is fairly susceptible is favored, which will avoid all objecionable mischievous, undefensible, wrongful, evil and injurious consequences. 28

Nothing is better settled than that courts are not to give words a meaning which would lead to absurd or unreasonable consequences. That s a principle that does back to In re Allen decided oil October 27, 1903, where it was held that a literal interpretation is to be rejected if it would be unjust or lead to absurd results. That is a strong argument against its adoption. The words of Justice Laurel are particularly apt. Thus: "The fact that the construction placed upon the statute by the appellants would lead to an absurdity is another argument for rejecting it. . . ." 29

. . . We have, here, then a case where the true intent of the law 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 whatever is within the spirit of a statute is within the statute, since adherence to the letter would result in absurdity, injustice and contradictions and would defeat the plain and vital purpose of the statute. 30

Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee's right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of employment was

agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.Such interpretation puts the seal on Bibiso 31 upon the effect of the expiry of an agreed period of employment as still good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being served by her school a notice of termination following the expiration of the last of three successive fixed-term employment contracts, the Court held:

Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was probationary, contractual in nature, and one with a definitive period. At the expiration of the period stipulated in the contract, her appointment was deemed terminated and the letter informing her of the non-renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes' contract of employment was due to expire and that the contract would no longer be renewed. It is not a letter of termination. The interpretation that the notice is only a reminder is consistent with the court's finding in Labajo supra. ... 32

Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the Department of Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of termination, nor an application for clearance to terminate which needed the approval of the Department of Labor to make the termination of his services effective. In any case, such clearance should properly have been given, not denied.WHEREFORE, the public respondent's Decision complained of is REVERSED and SET ASIDE. 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 and the other relief awarded and confirmed on appeal in the proceedings below. No pronouncement as to costs.SO ORDERED.Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortés, Griño-Aquino, Medialdea and Regalado, JJ., concur.Fernan, C.J., took no part. Separate Opinions SARMIENTO, J., concurring and dissenting:I am agreed that the Labor Code has not foresaken "term employments", held valid in Biboso V. Victorias Milling Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA 250). That notwithstanding, I can not liken employment contracts to ordinary civil contracts in which the relationship is established by stipulations agreed upon. Under the very Civil Code:

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

xxx xxx xxxArt. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

The courts (or labor officials) should nevertheless be vigilant as to whether or not the termination of the employment contract is done by reason of expiration of the period or to cheat the employee out of office. The latter amounts to circumvention of the law.

Seasonal EmployeesCase(s): Manila Hotel vs. CIR, 165 SCRA 562

G.R. No. L-18873 September 30, 1963MANILA HOTEL COMPANY, petitioner, vs.COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.Government Corporate Counsel Simeon M. Gopengco and Trial Attorney Jose S. Gomez for petitioner.Gregorio E. Fajardo and Jesus Jaramillo for respondent Union.Mariano B. Tuason for respondent Court. BAUTISTA ANGELO, J.: The Pines Hotel Employees Association filed on February 24, 1960 before the Court of Industrial Relations a petition praying, among other things, that its employees who were working at the Pines Hotel be paid additional compensation for overtime service rendered due to the exigencies of the business, as well as additional compensation for Sunday, legal holiday and nighttime work. The Manila Hotel filed its answer denying the material averments of the petition and alleging, among others, that if overtime service was rendered the same was not authorized but was rendered voluntarily, for the employees were interested in the "tips" offered by the patrons of the hotel. Presiding Judge Jose S. Bautista, to whom the petition was assigned, after trial, rendered judgment stating that the employees were entitled to the additional compensation demanded, including that for overtime work, because an employee who renders overtime service is entitled to compensation even if he rendered it without prior authority. A motion for reconsideration was filed on the ground that the order was contrary to law and the evidence, but the same was denied by the industrial court en banc.1awphîl.nèt In compliance with the order of the court, the Examining Division of the Court of Industrial Relations submitted a report in which it stated that the amount due the employees as additional compensation for overtime and night services rendered from January to December 31, 1958 was P32,950.69. The management filed its objection to the report on the ground that it included 22 names of employees who were not employees of the Pines Hotel at the time the petition was filed so that insofar as said employees are concerned the petition merely involves a money claim which comes under the jurisdiction of the regular courts. The trial judge, however, overruled this objection holding that, while the 22 employees were actually not in the service at the time of the filing of the petition, they were however subsequently employed even during the pendency of the incident, and so their claim comes within the jurisdiction of the Court of Industrial Relations. Hence, the present petition for review. There is no merit in this appeal it appearing that while it is true that the 22 employees whose claim is objected to were not actually in the service at the time the instant petition was filed, they were however, subsequently reemployed even while the present incident was pending consideration by the trial court. Moreover, it appears that the questioned employees were never separated from the service. Their status is that of regular seasonal employees who are called to work from time to time, mostly during summer season. The nature of their relationship with the hotel is such that during off season they are temporarily laid off but during summer season they are re-employed, or when their services may be needed. They are not strictly speaking separated from the service but are merely considered as on leave of absence without pay until they are re-employed. Their employment relationship is never severed but only suspended. As such, these employees can be considered as in the regular employment of the hotel. WHEREFORE, the order appealed from is affirmed. No costs.Bengzon, C.J., Padilla, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.Reyes, J.B.L., J., took no part.

Hacienda Bino vs. Cuenca, 456 SCRA 300[G.R. No. 150478. April 15, 2005]HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L. STARKE, petitioners, vs. CANDIDO CUENCA, FRANCISCO ACULIT, ANGELINA ALMONIA, DONALD ALPUERTO, NIDA BANGALISAN, ROGELIO CHAVEZ, ELMO DULINGGIS, MERCEDES EMPERADO, TORIBIO EMPERADO, JULIANA ENCARNADO, REYNALDO ENCARNADO,

GENE FERNANDO, JOVEN FERNANDO, HERNANI FERNANDO, TERESITA FERNANDO, BONIFACIO GADON, JOSE GALLADA, RAMONITO KILAYKO, ROLANDO KILAYKO, ALFREDO LASTIMOSO, ANTONIO LOMBO, ELIAS LOMBO, EMMA LOMBO, LAURENCIA LOMBO, LUCIA LOMBO, JOEL MALACAPAY, ADELA MOJELLO, ERNESTO MOJELLO, FRUCTOSO MOJELLO, JESSICA MOJELLO, JOSE MOJELLO, MARITESS MOJELLO, MERLITA MOJELLO, ROMEO MOJELLO, RONALDO MOJELLO, VALERIANA MOJELLO, JAIME NEMENZO, RODOLFO NAPABLE, SEGUNDIA OCDEN, JARDIOLINA PABALINAS, LAURO PABALINAS, NOLI PABALINAS, RUBEN PABALINAS, ZALDY PABALINAS, ALFREDO PANOLINO, JOAQUIN PEDUHAN, JOHN PEDUHAN, REYNALDO PEDUHAN, ROGELIO PEDUHAN, JOSEPHINE PEDUHAN, ANTONIO PORRAS, JR., LORNA PORRAS, JIMMY REYES, ALICIA ROBERTO, MARCOS ROBERTO, JR., MARIA SANGGA, RODRIGO SANGGA, ARGENE SERON, SAMUEL SERON, SR., ANGELINO SENELONG, ARMANDO SENELONG, DIOLITO SENELONG, REYNALDO SENELONG, VICENTE SENELONG, FEDERICO STA. ANA, ROGELIO SUASIM, EDNA TADLAS, ARTURO TITONG, JR., JOSE TITONG, JR., NANCY VINGNO, ALMA YANSON, JIMMY YANSON, MYRNA VILLANUEVA BELENARIO, SALVADOR MALACAPAY, and RAMELO TIONGCO, respondents.D E C I S I O NCALLEJO, SR., J.:Before us is a petition for review of the Decision[1] of the Court of Appeals (CA), dated July 31, 2001, and the Resolution dated September 24, 2001 denying the petitioners’ motion for reconsideration. The assailed decision modified the decision of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000099-98.

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.[2]

On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or Notice which stated, thus:To all Hacienda Employees:Please bear in mind that all those who signed in favor of CARP are expressing their desire to get out of employment on their own volition.Wherefore, beginning today, July 18, only those who did not sign for CARP will be given employment by Hda. Bino.

(Sgd.) Hortencia Starke[3]

The respondents regarded such notice as a termination of their employment. As a consequence, they filed a complaint for illegal dismissal, wage differentials, 13th month pay, holiday pay and premium pay for holiday, service incentive leave pay, and moral and exemplary damages with the NLRC, Regional Arbitration Branch No. VI, Bacolod City, on September 17, 1996.[4]

In their Joint Sworn Statement, the respondents as complainants alleged inter alia that they are regular and permanent workers of the hacienda and that they were dismissed without just and lawful cause. They further alleged that they were dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform Program (CARP) over the land owned by petitioner Starke.[5]

For her part, petitioner Starke recounted that the company’s Board of Directors petitioned the Sangguniang Bayan of Kabankalan for authority to re-classify, from agricultural to industrial, commercial and residential, the whole of Hacienda Bino, except the portion earmarked for the CARP. She asserted that half of the workers supported the re-classification but the others, which included the herein respondents, opted to become beneficiaries of the land under the CARP. Petitioner Starke alleged that in July 1996, there was little work in the plantation as it was off-season; and so, on account of the seasonal nature of the work, she issued the order giving preference to those who supported the re-classification. She pointed out that when the milling season began in October 1996, the work was plentiful again and she issued notices to all workers, including the respondents, informing them of the availability of work. However, the respondents refused to report back to work. With respect to the respondents’ money claims, petitioner Starke submitted payrolls evidencing payment thereof.

On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a Decision,[6] finding that petitioner Starke’s notice dated July 18, 1996 was tantamount to a termination of the respondents’ services, and holding that the petitioner company was guilty of illegal dismissal. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of the complainants illegal and ordering respondent Hortencia L. Starke, Inc. represented by Hortencia L. Starke, as President, to:

1. Reinstate the complainants to their former position without loss of seniority rights immediately upon receipt of this decision;

2. PAY the backwages and wage differentials of the complainants, to wit:…

in the total amount of Four Hundred Ninety-Five Thousand Eight Hundred Fifty-Two and 72/100 (P495,852.72) Pesos; and

3. TO PAY the complainants attorney's fee in the amount of Forty-Nine Thousand Five Hundred Eighty-Five and 27/100 (P49,585.27) Pesos.

Respondents are further directed to deposit to this Office the total judgment award of FIVE HUNDRED FORTY-FIVE THOUSAND AND FOUR HUNDRED THIRTY-SEVEN AND 99/100 (P545,437.99) PESOS within ten (10) days from receipt of this decision.

All other claims are hereby DISMISSED for lack of merit.

SO ORDERED.[7]

Both the petitioners and the respondents appealed the case to the NLRC. On July 24, 1998, the NLRC affirmed with modification the decision of the Labor Arbiter. The dispositive part of its decision reads:

WHEREFORE, premises considered, the Decision of the Labor Arbiter is AFFIRMED WITH MODIFICATIONS. Respondent is further ordered to pay the complainants listed in the Holiday Pay Payroll the amounts due them.SO ORDERED.[8]

A motion for reconsideration of the said decision was denied by the NLRC.[9] Dissatisfied, the respondents appealed the case to the CA where the following issues were raised:

A. THE HONORABLE COMMISSION GRAVELY ABUSED ITS DISCRETION AND POWER BY VIOLATING THE DOCTRINE OF “STARE DECISIS” LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE LAWS AS TO THE STATUS OF THE SUGAR WORKERS.B. THE HONORABLE COMMISSION COMMITTED SERIOUS ERRORS BY ADMITTING THE MOTION TO DISMISS AND/OR ANSWER TO PETITIONERS’ APPEAL MEMORANDUM DATED MARCH 26, 1998 FILED BY COUNSEL FOR THE HEREIN RESPONDENTS INSPITE OF THE FACT THAT IT WAS FILED WAY BEYOND THE REGLEMENTARY PERIOD.C. THE HONORABLE COMMISSION COMMITTED GRAVE ERROR IN GIVING CREDENCE TO THE SWEEPING ALLEGATIONS OF THE COMPLAINANTS AS TO THE AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT ANY BASIS.[10]

On July 31, 2001, the CA rendered a Decision,[11] the dispositive portion of which reads:

WHEREFORE, the decision of the National Labor Relations Commission is hereby MODIFIED by deleting the award for holiday pay and premium pay for holidays. The rest of the Decision is hereby AFFIRMED.

SO ORDERED.[12]The CA ruled that the concept of stare decisis is not relevant to the present case. It held that the ruling in Mercado, Sr. v. NLRC[13] does not operate to abandon the settled doctrine that sugar workers are considered regular and permanent farm workers of a sugar plantation owner, considering that there are facts peculiar in that case which

are not present in the case at bar. In the Mercado case, the farm laborers worked only for a definite period for a farm owner since the area of the land was comparatively small, after which they offer their services to other farm owners. In this case, the area of the hacienda, which is 236 hectares, simply does not allow for the respondents to work for a definite period only.

The CA also held that the petitioners’ reliance on Bacolod-Murcia Milling Co. Inc. v. NLRC[14] was misplaced, as it in fact, bolstered the respondents' posture that they are regular employees. In that case, the Court held that a sugar worker may be considered as in regular employment even during those years when he is merely a seasonal worker where the issues concern the determination of an employer-employee relationship and security of tenure.Further, the CA held that the respondents’ appeal to the NLRC was not perfected since they failed to accompany their notice of appeal with a memorandum of appeal, or to timely file a memorandum of appeal. Thus, as to them, the decision of the Labor Arbiter became final and executory. The NLRC, therefore, gravely abused its discretion when it modified the decision of the Labor Arbiter and awarded to the respondents holiday pay and premium for holiday pay. Finally, the CA affirmed the award of backwages, finding no circumstance that would warrant a reversal of the findings of the Labor Arbiter and NLRC on this point. [15]

On September 24, 2001, the CA denied the motion for reconsideration filed by the petitioners due to their failure to indicate the date of the receipt of the decision to determine the timeliness of the motion.[16]

Hence, this petition for review.

The petitioners submit the following issues:A. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND POWER BY VIOLATING THE DOCTRINE OF "STARE DECISIS" LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE LAWS AS TO THE STATUS OF THE SUGAR WORKERS.B. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE MOTION FOR RECONSIDERATION FOR FAILURE TO STATE THE DATE OF THE RECEIPT OF THE DECISION IN THE MOTION FOR RECONSIDERATION.[17]

Petitioner Starke contends that the established doctrine that seasonal employees are regular employees had been overturned and abandoned by Mercado, Sr. v. NLRC.[18] She stresses that in that case, the Court held that petitioners therein who were sugar workers, are seasonal employees and their employment legally ends upon completion of the project or the season. Petitioner Starke argues that the CA violated the doctrine of stare decisis in not applying the said ruling. 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. To buttress her contention that the respondents are seasonal employees, petitioner Starke cites Rep. Act 6982, An Act Strengthening the Social Amelioration Program in the Sugar Industry, Providing the Mechanics for its Implementation, and for other Purposes, which recognizes the seasonal nature of the work in the sugar industry.[19]

Petitioner Starke also takes exception to the denial of her motion for reconsideration due to failure to state the date of the receipt of the decision. She asserts that a denial of a motion for reconsideration due to such cause is merely directory and not mandatory on the part of the CA. Considering that the amount involved in this case and the fact that the motion was filed within the reglementary period, the CA should have considered the motion for reconsideration despite such procedural lapse.[20]

On the other hand, the respondents aver that the petitioners erroneously invoke the doctrine of stare decisis since the factual backdrop of this case and the Mercado case is not similar. The respondents posit that the Mercado case ruled on the status of employment of farm laborers who work only for a definite period of time for a farm owner, after which they offer their services to other farm owners. Contrarily, the respondents contend that they

do not work for a definite period but throughout the whole year, and do not make their services available to other farm owners. Moreover, the land involved in the Mercado case is comparatively smaller than the sugar land involved in this case. The respondents insist that the vastness of the land involved in this case requires the workers to work on a year-round basis, and not on an “on-and-off” basis like the farm workers in the Mercado case.

Finally, the respondents maintain that the requirement that the date of receipt of the decision should be indicated in the motion for reconsideration is mandatory and jurisdictional and, if not complied with, the court must deny the motion outright.[21]

The petition is without merit.

On the substantial issue of whether the respondents are regular or seasonal employees, the petitioners contend that the CA violated the doctrine of stare decisis by not applying the ruling in the Mercado case that sugar workers are seasonal employees. We hold otherwise. Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same.[22] Where the facts are essentially different, however, stare decisis does not apply, for a perfectly sound principle as applied to one set of facts might be entirely inappropriate when a factual variance is introduced.[23]

The CA correctly found that the facts involved in this case are different from the Mercado case; therefore, the ruling in that case cannot be applied to the case at bar, thus:

We do not find the concept of stare decisis relevant in the case at bench. For although in the Mercado case, the Supreme Court held the petitioners who were sugar workers not to be regular but seasonal workers, nevertheless, the same does not operate to abandon the settled doctrine of the High Court that sugar workers are considered regular and permanent farm workers of a sugar plantation owner, the reason being that there are facts present that are peculiar to the Mercado case. The disparity in facts between the Mercado case and the instant case is best exemplified by the fact that the former decision ruled on the status of employment of farm laborers, who, as found by the labor arbiter, work only for a definite period for a farm worker, after which they offer their services to other farm owners, considering the area in question being comparatively small, comprising of seventeen and a half (17½) hectares of land, such that the planting of rice and sugar cane thereon could not possibly entail a whole year operation. The herein case presents a different factual condition as the enormity of the size of the sugar hacienda of petitioner, with an area of two hundred thirty-six (236) hectares, simply do not allow for private respondents to render work only for a definite period.

Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the Mercado case. In Abasolo v. NLRC,[24] and earlier, in Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC,[25] the Court made the following observations:… In Mercado, although respondent constantly availed herself of the petitioners’ services from year to year, it was clear from the facts therein that they were not in her regular employ. Petitioners therein performed different phases of agricultural work in a given year. However, during that period, they were free to work for other farm owners, and in fact they did. In other words, they worked for respondent, but were nevertheless free to contract their services with other farm owners. The Court was thus emphatic when it ruled that petitioners were mere project employees, who could be hired by other farm owners….[26]

Recently, the Court reiterated the same observations in Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade [27] and added that the petitioners in the Mercado case were “not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof.”

In this case, there is no evidence on record that the same particulars are present. The petitioners did not present any evidence that the respondents were required to perform certain phases of agricultural work for a definite period of time. Although the petitioners assert that the respondents made their services available to the neighboring haciendas , the records do not, however, support such assertion.

The primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer.[28] There is no doubt that the respondents were performing work necessary and desirable in the usual trade or business of an employer. Hence, they can properly be classified as regular employees.

For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have been employed only for the duration of one season . [29] While the records sufficiently show that the respondents’ work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration of one season only. In fact, the payrolls, [30] submitted in evidence by the petitioners, show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand. It bears stressing that the employer has the burden of proving the lawfulness of his employee’s dismissal. [31]

On the procedural issue, petitioner Starke avers that the CA should not have denied outright her motion for reconsideration, considering its timely filing and the huge amount involved. This contention is already moot. Petitioner Starke has already aired in this petition the arguments in her motion for reconsideration of the CA decision, which have been adequately addressed by this Court. Assuming arguendo that the CA indeed failed to consider the motion for reconsideration, petitioner Starke was not left without any other recourse.[32]IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals, dated July 31, 2001, and its Resolution dated September 24, 2001 are hereby AFFIRMED.SO ORDERED.Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Poseidon Shipping vs. NLRC. 482 SCRA 717G.R. No. 168052 February 20, 2006POSEIDON FISHING/TERRY DE JESUS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and JIMMY S. ESTOQUIA, Respondents.

D E C I S I O NCHICO-NAZARIO, J.:Article 280 of the Labor Code, in its truest sense, distinguishes between regular and casual employees to protect the interests of labor. Its language evidently manifests the intent to safeguard the tenurial interest of the worker who may be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual status for as long as convenient.1

This petition assails the Decision2 of the Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 entitled, "Poseidon Fishing/Terry De Jesus v. National Labor Relations Commission and Jimmy S. Estoquia" which affirmed that of the National Labor Relations Commission (NLRC). The NLRC had affirmed with modification the Decision dated 5 December 2000 of Labor Arbiter Melquiades Sol D. Del Rosario in NLRC-NCR Case No. 00-07-03625-00, declaring private respondent to have been illegally dismissed and entitled to backwages and separation pay.

As thoroughly told by the Court of Appeals and the Labor Arbiter, the particulars are beyond dispute:Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry. Its various vessels catch fish in the outlying islands of the Philippines, which are traded and sold at the Navotas Fish Port. One of its boat crew was private respondent Jimmy S. Estoquia.3 Petitioner Terry de Jesus is the manager of petitioner company.

Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five years, he was promoted to Boat Captain. In 1999, petitioners, without reason, demoted respondent from Boat Captain to Radio Operator of petitioner Poseidon.4 As a Radio Operator, he monitored the daily activities in their office and recorded in the duty logbook the names of the callers and time of their calls.5

On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he was able to record the same in the other logbook. Consequently, when he reviewed the two logbooks, he noticed that he was not able to record the said call in one of the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry.6

Around 9:00 o’clock in the morning of 4 July 2000, petitioner Terry de Jesus detected the error in the entry in the logbook. Subsequently, she asked private respondent to prepare an incident report to explain the reason for the said oversight.7

At around 2:00 o’clock in the afternoon of that same day, petitioner Poseidon’s secretary, namely Nenita Laderas, summoned private respondent to get his separation pay amounting to Fifty-Five Thousand Pesos (P55,000.00). However, he refused to accept the amount as he believed that he did nothing illegal to warrant his immediate discharge from work.8

Rising to the occasion, private respondent filed a complaint for illegal dismissal on 11 July 2000 with the Labor Arbiter, alleging nonpayment of wages with prayer for back wages, damages, attorney’s fees, and other monetary benefits.

In private respondent’s position paper, he averred that petitioner Poseidon employed him as a Chief Mate sometime in January 1988. He claimed that he was promoted to the position of Boat Captain five years after. However, in 1999, he was demoted from Boat Captain to Radio Operator without any reason and shortly, he was terminated without just cause and without due process of law.

Conversely, petitioners Poseidon and Terry de Jesus strongly asserted that private respondent was a contractual or a casual employee whose services could be terminated at the end of the contract even without a just or authorized cause in view of Article 280 of the Labor Code, which provides:

Art. 280. Regular and Casual Employment. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (Emphasis supplied.)

Petitioners further posited that when the private respondent was engaged, it was made clear to him that he was being employed only on a "por viaje" or per trip basis and that his employment would be terminated at the end of the trip for which he was being hired. As such, the private respondent could not be entitled to separation pay and other monetary claims.

On 5 December 2000, following the termination of the hearing of the case, the Labor Arbiter decided in favor of private respondent. The Labor Arbiter held that even if the private respondent was a casual employee, he became a regular employee after a period of one year and, thereafter, had attained tenurial security which could only be lost due to a legal cause after observing due process. The dispositive portion of the Decision reads:

CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding complainant to have been illegally dismissed and so must immediately be reinstated to his former position as radio operator and paid by respondent[s] in solidum his backwages which as of December 3, 2000 had already accumulated in the sum of P35,880.00 plus his unpaid one (1) week salary in the sum of P1,794.00.

Respondents are further ordered to pay attorney’s fees in a sum equivalent to 10% of the awarded claims.9

Consequently, the petitioners filed their Memorandum of Appeal with the NLRC for the reversal of the aforesaid decision. On 24 September 2002, the NLRC affirmed the decision of the Labor Arbiter with the modification, inter alia, that: (a) the private respondent would be paid his separation pay equivalent to one-half of his monthly pay for every year of service that he has rendered in lieu of reinstatement; and (b) an amount equivalent to six months salary should be deducted from his full backwages because it was his negligence in the performance of his work that brought about his termination. It held:

WHEREFORE, the decision is modified as follows:1. The amount equivalent to six (6) months salary is to be deducted from the total award of backwages;2. The respondent is ordered to pay complainant separation pay equivalent to one-half (1/2) month pay for every year of service counted from 1998; x x x3. The respondent is ordered to pay complainant’s unpaid wages in the amount of P1,794.00; and4. Respondent is ordered to pay attorney’s fees in a sum equivalent to ten percent (10%) of the awarded claims.10

Petitioners moved for the reconsideration of the NLRC decision, but were denied in a Resolution dated 29 August 2003.

Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse of discretion, but the Court of Appeals found none. The following is the fallo of the decision:

WHEREFORE, the foregoing premises considered, the instant petition is hereby DENIED.11

In a last attempt at vindication, petitioners filed the present petition for review with the following assignment of errors:

I.THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT WAS A REGULAR EMPLOYEE WHEN IN TRUTH HE WAS A CONTRACTUAL/PROJECT/SEASONAL EMPLOYEE.II.THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT WAS ILLEGALLY DISMISSED FROM EMPLOYMENT.III.THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING THE RESPONDENT A SEASONAL EMPLOYEE AND APPLYING THE RULING IN RJL MARTINEZ FISHING CORPORATION vs. NLRC THAT "the activity of fishing is a continuous process and could hardly be considered as seasonal in nature."IV.THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT IS ENTITLED TO BACKWAGES, SEPARATION PAY, ATTORNEY’S FEES AND OTHER MONETARY BENEFITS.V.THE HONORABLE COURT OF APPEALS ERRED IN NOT RESOLVING THE PRAYER FOR THE ISsuance of preliminary injunction and/or temporary restraining order.12

The fundamental issue entails the determination of the nature of the contractual relationship between petitioners and private respondent, i.e., was private respondent a regular employee at the time his employment was terminated on 04 July 2000?

Asserting their right to terminate the contract with private respondent per the "Kasunduan" with him, petitioners pointed to the provision thereof stating that he was being employed only on a ‘’por viaje’’ basis and that his employment would be terminated at the end of the trip for which he was being hired, to wit:

NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA ng mga gawaing magmula sa pag-alis ng lantsa sa pondohan sa Navotas patungo sa palakayahan; pabalik sa pondohan ng lantsa sa Navotas hanggang sa paghango ng mga kargang isda.13

Petitioners lament that fixed-term employment contracts are recognized as valid under the law notwithstanding the provision of Article 280 of the Labor Code. Petitioners theorize that the Civil Code has always recognized the validity of contracts with a fixed and definite period, and imposes no restraints on the freedom of the parties to fix the duration of the contract, whatever its object, be it species, goods or services, except the general admonition against stipulations contrary to law, morals, good customs, public order and public policy. Quoting Brent School Inc. v. Zamora,14 petitioners are hamstrung on their reasoning that under the Civil Code, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those that by their nature are seasonal or for specific projects with pre-determined dates of completion as they also include those to which the parties by free choice have assigned a specific date of termination. Hence, persons may enter into such contracts as long as they are capacitated to act, petitioners bemoan.

We are far from persuaded by petitioners’ ratiocination.

Petitioners’ construal of Brent School, Inc. v. Zamora, has certainly gone astray. The subject of scrutiny in the Brent case was the employment contract inked between the school and one engaged as its Athletic Director. The contract fixed a specific term of five years from the date of execution of the agreement. This Court upheld the validity of the contract between therein petitioner and private respondent, fixing the latter’s period of employment. This Court laid down the following criteria for judging the validity of such fixed-term contracts, to wit:Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee’s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.15 (Emphasis supplied.)Brent cited some familiar examples of employment contracts which may neither be for seasonal work nor for specific projects, but to which a fixed term is an essential and natural appurtenance, i.e., overseas employment contracts, appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions, which are by practice or tradition rotated among the faculty members, and where fixed terms are a necessity without which no reasonable rotation would be possible.16 Thus, in Brent, the acid test in considering fixed-term contracts as valid is: if from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be disregarded for being contrary to public policy. On the same tack as Brent, the Court in Pakistan International Airlines Corporation v. Ople,17 ruled in this wise:It is apparent from Brent School that the critical consideration is the presence or absence of a substantial indication that the period specified in an employment agreement was designed to circumvent the security of tenure of regular employees which is provided for in Articles 280 and 281 of the Labor Code. This indication must ordinarily rest upon some aspect of the agreement other than the mere specification of a fixed term of the employment agreement, or upon evidence aliunde of the intent to evade.Consistent with the pronouncements in these two earlier cases, the Court, in Cielo v. National Labor Relations Commission,18 did not hesitate to nullify employment contracts stipulating a fixed term after finding that "the purpose behind these individual contracts was to evade the application of the labor laws."

In the case under consideration, the agreement has such an objective - to frustrate the security of tenure of private respondent- and fittingly, must be nullified. In this case, petitioners’ intent to evade the application of Article 280 of the Labor Code is unmistakable. In a span of 12 years, private respondent worked for petitioner company first as a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon. His work was, therefore, necessary and important to the business of his employer. Such being the scenario involved, private respondent is considered a regular employee of petitioner under Article 280 of the Labor Code, the law in point, which provides: Art. 280. Regular and Casual Employment. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (Emphasis supplied.) Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, note that in the case at bar, the terms of employment of private respondent as provided in the Kasunduan was not only vague, it also failed to provide an actual or specific date or period for the contract. As adroitly observed by the Labor Arbiter:There is nothing in the contract that says complainant, who happened to be the captain of said vessel, is a casual, seasonal or a project worker. The date July 1 to 31, 1998 under the heading "Pagdating" had been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of the status of employment of the crew of the vessel.Actually, the exception under Article 280 of the Labor Code in which the respondents have taken refuge to justify its position does not apply in the instant case. The proviso, "Except where the employment has been fixed for a specific project or undertaking the completion or determination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season." (Article 280 Labor Code), is inapplicable because the very contract adduced by respondents is unclear and uncertain. The kasunduan does not specify the duration that complainant had been hired x x x.19 (Emphasis supplied.)Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent was repeatedly hired as part of the boat’s crew and he acted in various capacities onboard the vessel. In Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission,20 we held that the test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. And, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. 21 In Bustamante v. National Labor Relations Commission,22 the Court expounded on what are regular employees under Article 280 of the Labor Code, viz:It is undisputed that petitioners were illegally dismissed from employment. Article 280 of the Labor Code, states:ART. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be

considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.This provision draws a line between regular and casual employment, a distinction however often abused by employers. The provision enumerates two (2) kinds of employees, the regular employees and the casual employees. The regular employees consist of the following:

1) those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and2) those who have rendered at least one year of service whether such service is continuous or broken.23

Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat Captain, and Radio Operator. In petitioners’ interpretation, however, this act of hiring and re-hiring actually highlight private respondent’s contractual status saying that for every engagement, a fresh contract was entered into by the parties at the outset as the conditions of employment changed when the private respondent filled in a different position. But to this Court, the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners’ business or trade.24 Petitioners would brush off private respondent’s length of service by stating that he had worked for the company merely for several years25 and that in those times, his services were not exclusive to petitioners. On the other hand, to prove his claim that he had continuously worked for petitioners from 1988 to 2000, private respondent submitted a copy of his payroll26 from 30 May 1988 to October 1988 and a copy of his SSS Employees Contributions27 as of the year 2000. These documents were submitted by private respondent in order to benchmark his claim of 12 years of service. Petitioners, however, failed to submit the pertinent employee files, payrolls, records, remittances and other similar documents which would show that private respondent’s work was not continuous and for less than 12 years. Inasmuch as these documents are not in private respondent’s possession but in the custody and absolute control of petitioners, their failure to refute private respondent’s evidence or even categorically deny private respondent’s allegations lead us to no other conclusion than that private respondent was hired in 1988 and had been continuously in its employ since then. Indeed, petitioners’ failure to submit the necessary documents, which as employers are in their possession, gives rise to the presumption that their presentation is prejudicial to its cause.28 To recapitulate, it was after 12 long years of having private respondent under its wings when petitioners, possibly sensing a brewing brush with the law as far as private respondent’s employment is concerned, finally found a loophole to kick private respondent out when the latter failed to properly record a 7:25 a.m. call. Capitalizing on this faux pas, petitioner summarily dismissed private respondent. On this note, we disagree with the finding of the NLRC that private respondent was negligent on account of his failure to properly record a call in the log book. A review of the records would ineluctably show that there is no basis to deduct six months’ worth of salary from the total separation pay that private respondent is entitled to. We note further that the NLRC’s finding clashes with that of the Labor Arbiter which found no such negligence and that such inadvertence on the part of private respondent, at best, constitutes simple negligence punishable only with admonition or suspension for a day or two. As the records bear out, private respondent himself seasonably realized his oversight and in no time recorded the 7:25 a.m. call after the 7:30 a.m. call. Gross negligence under Article 282 of the Labor Code, 29 as amended, connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances.30 Here, it is not disputed that private respondent corrected straight away the recording of the call and petitioners failed to prove the damage or injury that such inadvertence caused the company. We find, as the Labor Arbiter31 had found, that there is no sufficient evidence on record to prove private respondent’s negligence, gross or simple for that matter, in the performance of his duties to warrant a reduction of six months salary from private respondent’s separation pay. Moreover, respondent missed to properly record, not two or three calls, but just a single call. It was also a first infraction on the part of private respondent, not to mention that the gaffe, if at all, proved to be innocuous. Thus, we find such slip to be within tolerable range. After all, is it not a rule32 that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be primordial?

Petitioners next assert that deep-sea fishing is a seasonal industry because catching of fish could only be undertaken for a limited duration or seasonal within a given year. Thus, according to petitioners, private respondent was a seasonal or project employee.We are not won over.As correctly pointed out by the Court of Appeals, the "activity of catching fish is a continuous process and could hardly be considered as seasonal in nature."33 In Philex Mining Corp. v. National Labor Relations Commission,34 we defined project employees as those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at the time of the engagement of the employee. The principal test for determining whether particular employees are "project employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. In this case, petitioners have not shown that private respondent was informed that he will be assigned to a "specific project or undertaking." As earlier noted, neither has it been established that he was informed of the duration and scope of such project or undertaking at the time of their engagement. More to the point, in Maraguinot, Jr. v. National Labor Relations Commission,35 we ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.In fine, inasmuch as private respondent’s functions as described above are no doubt "usually necessary or desirable in the usual business or trade" of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular employee. Being one, private respondent’s dismissal without valid cause was illegal. And, where illegal dismissal is proven, the worker is entitled to back wages and other similar benefits without deductions or conditions.36 Indeed, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of some of our entrepreneurs, primarily aimed at maximizing their return on investments at the expense of the lowly workingman.37

WHEREFORE, the present petition is hereby DENIED. The Decision of the Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 is hereby AFFIRMED WITH MODIFICATION by deleting the reduction of an amount equivalent to six months of pay from private respondent’s separation pay. The case is remanded to the Labor Arbiter for further proceedings solely for the purpose of determining the monetary liabilities of petitioners in accordance with the decision. The Labor Arbiter is ORDERED to submit his compliance thereon within thirty (30) days from notice of this decision, with copies furnished to the parties. Costs against petitioners.SO ORDERED.

VII. PROBATIONARY EMPLOYEES – Arts. 281, 61 Labor Code, Rule I, Sec. 6, Omnibus RulesA. Definition

Case(s): International Catholic Migration Commission vs. NLRC, 169 SCRA 508

G.R. No. 72222 January 30, 1989INTERNATIONAL CATHOLIC MIGRATION COMMISSION, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and BERNADETTE GALANG, respondents. FERNAN, C.J.:The issue to be resolved in the instant case is whether or not an employee who was terminated during the probationary period of her employment is entitled to her salary for the unexpired portion of her six-month probationary employment.The facts of the case are undisputed. Petitioner International Catholic Migration Commission (ICMC), a non-profit organization dedicated to refugee service at the Philippine Refugee Processing Center in Morong, Bataan engaged the services of private respondent Bernadette Galang on January 24, 1983 as a probationary cultural orientation teacher with a monthly salary of P2,000.00.

Three (3) months thereafter, or on April 22, 1983, private respondent was informed, orally and in writing, that her services were being terminated for her failure to meet the prescribed standards of petitioner as reflected in the performance evaluation of her supervisors during the teacher evaluation program she underwent along with other newly-hired personnel. Despite her termination, records show that private respondent did not leave the ICMC refugee camp at Morong, Bataan, but instead stayed thereat for a few days before leaving for Manila, during which time, she was observed by petitioner to be allegedly acting strangely. On July 24, 1983, private respondent returned to Morong, Bataan on board the service bus of petitioner to accomplish the clearance requirements. In the evening of that same day, she was found at the Freedom Park of Morong wet and shivering from the rain and acting bizarrely. She was then taken to petitioner's hospital where she was given the necessary medical attention. Two (2) days later, or on July 26, 1983, she was taken to her residence in Manila aboard petitioner's service bus. Thru a letter, her father expressed appreciation to petitioner for taking care of her daughter. On that same day, her father received, on her behalf, the proportionate amount of her 13th month pay and the equivalent of her two week pay. On August 22, 1983, private respondent filed a complaint 1 for illegal dismissal, unfair labor practice and unpaid wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral damages. On October 8, 1983, after the parties submitted their respective position papers and other pleadings, Labor Arbiter Pelagio A. Carpio rendered his decision dismissing the complaint for illegal dismissal as well as the complaint for moral and exemplary damages but ordering the petitioner to pay private respondent the sum of P6,000.00 as payment for the last three (3) months of the agreed employment period pursuant to her verbal contract of employment. 2

Both parties appealed the decision to the National Labor Relations Commission. In her appeal, private respondent contended that her dismissal was illegal considering that it was effected without valid cause. On the other hand, petitioner countered that private respondent who was employed for a probationary period of three (3) months could not rightfully be awarded P6,000.00 because her services were terminated for failure to qualify as a regular employee in accordance with the reasonable standards prescribed by her employer.On August 22, 1985, the NLRC, by a majority vote of Commissioners Guillermo C. Medina and Gabriel M. Gatchalian, sustained the decision of the Labor Arbiter and thus dismissed both appeals for lack of merit. Commissioner Miguel Varela, on the other hand, dissented and voted for the reversal of the Labor Arbiter's decision for lack of legal basis considering that the termination of services of complainant, now private respondent, was effected during her probationary period on valid grounds made known to her. 3

Dissatisfied, petitioner filed the instant petition. Petitioner maintains that private respondent is not entitled to the award of salary for the unexpired three-month portion of the probationary period since her services were terminated during such period when she failed to qualify as a regular employee in accordance with the reasonable standards prescribed by petitioner; that having been terminated on valid grounds during her probationary period, or specifically on April 24, 1983, petitioner is not liable to private respondent for services not rendered during the unexpired three-month period, otherwise, unjust enrichment of her part would result; that under Article 282 (now Article 281) of the Labor Code, if the employer finds that the probationary employees does not meet the standards of employment set for the position, the probationary employee may be terminated at any time within the six-month period, without need of exhausting raid entire six-month term. 4 The Solicitor General, on the other hand, contends that a probationary employment for six (6) months, as in the case of herein private respondent, is an employment for a definite period of time and, as such, the employer is duty-bound to allow the probationary employee to work until the termination of the probationary employment before her re- employment could be refused; that when petitioner disrupted the probationary employment of private respondent, without giving her the opportunity to improve her method of instruction within the said period, it held itself liable to pay her salary for the unexpired portion of such employment by way of damages pursuant to the general provisions of civil law that he who in any manner contravenes the terms of his obligation without any valid cause shall be liable for damages; 5 that, as held in Madrigal v. Ogilvie, et al, 6 the damages so awarded are equivalent to her salary for the unexpired portion of her employment for a fixed period. 7 We find for petitioner.

There is justifiable basis for the reversal of public respondent's award of salary for the unexpired three-month portion of private respondent's six-month probationary employment in the light of its express finding that there was no illegal dismissal. There is no dispute that private respondent was terminated during her probationary period of employment for failure to qualify as a regular member of petitioner's teaching staff in accordance with its reasonable standards. Records show that private respondent was found by petitioner to be deficient in classroom management, teacher-student relationship and teaching techniques. 8 Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee specifically recognized under Article 282 (now Article 281) of the Labor Code which provides thus:

ART. 281. Probationary employment. — Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employer who has been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employer in accordance with reasonable standard made known by the employer to the employer at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (Emphasis supplied.)

It must be noted that notwithstanding the finding of legality of the termination of private respondent, public respondent justified the award of salary for the unexpired portion of the probationary employment on the ground that a probationary employment for six (6) months is an employment for a "definite period" which requires the employer to exhaust the entire probationary period to give the employee the opportunity to meet the required standards. The legal basis of public respondent is erroneous. A probationary employee, as understood under Article 282 (now Article 281) of the Labor Code, is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. 9 The word "probationary", as used to describe the period of employment, implies the purpose of the term or period, but not its length. 10 Being in the nature of a "trial period" 11 the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period. While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer, that he has the qualifications to meet the reasonable standards for permanent employment. It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, it is within the exercise of the right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. The equality of right that exists between the employer and the employee as to the nature of the probationary employment was aptly emphasized by this Court in Grand Motor Parts Corporation v. Minister of Labor, et al., 130 SCRA 436 (1984), citing the 1939 case of Pampanga Bus. Co., Inc. v. Pambusco Employees Union, Inc. 68 Phil. 541, thus:

The right of a laborer to sell his labor to such persons as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution. If the employer can compel the employee to work against the latter's will, this is servitude. If the employee can compel the employer to give him work against the employer's will, this is oppression.

As the law now stands, Article 281 of the Labor Code gives ample authority to the employer to terminate a probationary employee 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. There is nothing under Article 281 of the Labor Code that would preclude the employer from extending a regular or a permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period. Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, Article 281 of the Labor Code does not likewise preclude the employer from terminating the probationary employment on justifiable causes as in the instant case.

We find unmeritorious, therefore, public respondents argument that the security of tenure of probationary employees within the period of their probation, as in the case of herein private respondent, justified the award of salary for the unexpired portion of her probationary employment. The termination of private respondent predicated on a just cause negates the application in this case of the pronouncement in the case of Biboso v. Victories Milling Co., Inc., 12 on the right of security of tenure of probationary employees. Upon inquiry by the then Ministry of Labor and Employment as a consequence of the illegal dismissal case filed by private respondent before it, docketed as Case No. NLRC NCR-8-3786-83, it was found that there was no illegal dismissal involved in the case, hence, the circumvention of the rights of the probationary employees sought to be regulated as pointed out in Biboso v. Victorias Milling Co., Inc., 13 is wanting. There was no showing, as borne out by the records, that there was circumvention of the rights of private respondent when she was informed of her termination. Her dismissal does not appear to us as arbitrary, fanciful or whimsical. Private respondent was duly notified, orally and in writing, that her services as cultural orientation teacher were terminated for failure to meet the prescribed standards of petitioner as reflected in the performance evaluation conducted by her supervisors during the teacher evaluating program. The dissatisfaction of petitioner over the performance of private respondent in this regard is a legitimate exercise of its prerogative to select whom to hire or refuse employment for the success of its program or undertaking. More importantly, private respondent failed to show that there was unlawful discrimination in the dismissal. It was thus a grave abuse of discretion on the part of public respondent to order petitioner to pay private respondent her salary for the unexpired three-month portion of her six-month probationary employment when she was validly terminated during her probationary employment. To sanction such action would not only be unjust, but oppressive on the part of the employer as emphasized in Pampanga Bus Co., Inc., v. Pambusco Employer Union, Inc. 14 WHEREFORE, in view of the foregoing, the petition is GRANTED. The Resolution of the National Labor Relations Commission dated August 22, 1985, is hereby REVERSED and SET ASIDE insofar as it ordered petitioner to pay private respondent her P6,000.00 salary for the unexpired portion of her six-month probationary employment. No cost. SO ORDERED. Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

B. PurposeCase(s):

Philemploy Services and Resources, Inc. vs. Rodriguez, 486 SCRA 302G.R. No. 152616 March 31, 2006PHILEMPLOY SERVICES AND RESOURCES, INC., Petitioner, vs.ANITA RODRIGUEZ, Respondent.

D E C I S I O N CARPIO, J.:The CaseThis is a petition for review1 to annul the Decision2 dated 15 March 2002 of the Court of Appeals in CA-G.R. SP No. 54386. The Court of Appeals reversed the 11 June 1998 Decision3 and the 3 February 1999 Resolution4 of the National Labor Relations Commission ("NLRC") in NLRC NCR Case No. ADJ(L)-95-01-0306. The Court of Appeals reinstated the 26 December 1996 Decision of Labor Arbiter Manuel R. Caday.The FactsThe facts, as summarized by the Labor Arbiter and adopted in toto by the Court of Appeals and the NLRC, are as follows:In March 1994, complainant Anita Rodriguez applied with respondent Philempl[o]y Services and Resources, Inc. at 36 Main Ave. cor. 8th Ave., Cubao, Quezon City for deployment abroad as a factory worker.After her interview, complainant secured the necessary documentation for her travel, such as passport, medical certificate, NBI clearance, among others, to which she expended the sum of P2,000.00.In December 1994, she set out from Cotabato to Manila to report to the office of respondent after she had received a telegram (Annex "A") requiring her to report.

Ms. Brenda Castro, an official of respondent, demanded from complainant the sum of P60,000.00 as placement fee. Since she could not afford such amount, they agreed that she would have to pay initially the amount of P30,000.00 as downpayment and the balance of P30,000.00, plus 7% interest every month thereafter through salary deductions.After she had pledged her motorcycle and a necklace, she paid Ms. Castro the amount of P30,000.00 plus 10% interest on December 29, 1994, but she was not issued any receipt.Thereafter, she executed a contract of employment as a domestic helper of one Chao Hung Ching of Taipei, Taiwan with a monthly salary of NT$14,010, plus free food and accommodation for a period of one (1) year. (Annexes "A" and "B")On January 11, 1995, she again reported to the office of respondent where another sum of P900.00 for Medicare was required on complainant. After she had pledged her College ring, she paid respondent said amount.On January 13, 1995, she was deployed by respondent to the latter’s principal arriving in Taiwan later that day. (Annex "D")As such domestic helper, she worked from 5:00 a.m. until 10:00 p.m. Among her chores were to carwash the vehicle of her master, cook the meals, housecleaning and babysitting.For her desire to improve her lot, as well as those she left behind, she weathered all the hardships and loneliness working abroad.In the morning of January 24, 1995, she wrote her family in the Philippines of her difficulties as a DH in Taiwan and of her desire to return home after her one-year contract. She requested the wife of [her] master to mail said letter. Later that evening, she had a talk with her master where she was told that she is sending her home on account of certain problems. Complainant pleaded that she continue her employment, confronted as she was with the debts she had to pay.On January 25, 1995, complainant was accompanied to the airport by a certain Ms. Go to whom she inquired why she was being repatriated to the Philippines. All that Ms. Go answered was that there was some kind of a problem. While at the airport, Ms. Go forced complainant to sign an Affidavit where it stated, among others, that her leaving as a DH was voluntary and that she would assume all the obligations for her travel back to the Philippines. Since complainant did not want to sign said Affidavit, Ms. Go took complainant to the Office of the Foreign Affairs where, through an immigration police, complainant’s passport and plane ticket were given to her. Two policemen accompanied complainant board the plane bound for the Philippines.From January 13 to 24, 1995 or a period of twelve (12) days, complainant was only paid the sum of NT$1,931.00.In resisting complainant’s allegations, respondent, in its Position Paper with an accompanying Affidavit of Bayani Fontanilla, Jr. and annexes, asserted the following material averments, to wit:Complainant was hired and deployed for Taiwan as a domestic helper for a one-year contract with principal Chao Hung Ching in Taiwan with a monthly salary of NT$14,010.00. Among other stipulations of the contract, it was agreed that she would undergo a forty (40) days probationary period before she becomes a regular domestic helper.In the course of her recruitment, complainant was personally interviewed through telephone calls by her principal and apprised of the terms and conditions of her employment as a domestic helper in Taiwan.Complainant was charged of her placement fees as allowed by law and by the POEA rules and regulations.On January 13, 1995, complainant departed for Taiwan. It was only on January 15, 1995 when she actually performed her work as a domestic helper after she had undergone an orientation.During the first ten (10) days of her probationary period, complainant was observed to be inattentive and incompetent to perform her duties and responsibilities. She could not cook and do simple things as washing clothes. It was the principal’s mother-in-law who did most of the household chores, like babysitting of the child. Worse, complainant was already complaining of the cold weather. However, the principal was nonetheless optimistic that complainant would improve her chores, but to no avail as complainant kept insisting that she be allowed to go home on account of her incapability to perform her job. The complainant even told her foreign employer that "she had hired a housemaid in their house for more than ten years to do the task."After the first ten (10) days’ work with the principal employer, complainant returned to the Philippines.5

On 26 December 1996, the Labor Arbiter rendered his decision with the following dispositive portion:WHEREFORE, premises considered, judgment is hereby rendered ordering respondents jointly and severally to pay complainant the sum of P10,900.00 representing the excess placement fee paid by her; the amount of NT$161,115.00 or its peso equivalent in the amount of P155,411.15 representing her unearned wages

corresponding to the unexpired portion of her contract; NT$3,492.22 or its peso equivalent in the amount of P3,368.59 representing salary differentials; and ten percent (10%) of the total monetary award due complainant as attorney’s fees.SO ORDERED.6

Philemploy Services and Resources, Inc. ("petitioner") and Chao Hung Ching appealed to the NLRC. The NLRC rendered its decision on 11 June 1998. The pertinent parts of the decision read as follows:Right from the time complainant was accepted as an applicant for the position of Caretaker/Domestic helper, she has already a second thought about said position. Her reason is that it is not the position she applied for. (see No. 7 of complainant’s Sinumpaang Salaysay, page 30, record). This statement is not found in the Arbiter’s translation into English of such Sinumpaang Salaysay which was adopted by complainant as part of her position paper, and upon which the Labor Arbiter’s a quo factual antecedents have been derived.Indeed, such omitted material facts coming from complainant herself, is pregnant of bold manifestation that in fact she had difficulty in adjusting herself to the nature of her accepted position different from what was intended. It reinforces thus, respondents’ observation that complainant misrepresented herself to her foreign employer that she knows the household chores. Yet, despite all of these misgivings shown by complainant, her foreign employer was willing to give her time to organize and learn herself the duties and responsibilities attendant to the position of house helper. But the same becomes naught when she insisted to be repatriated before the end of the one-year contract.Normally, this Commission does not disturb the factual finding of the Labor Arbiter a quo when supported by substantial evidence. (Union of Filipino Workers vs. NLRC, G.R. No. 98111, April 7, 1993).But in this case, We find it more prudent to deviate from said decisional rule to avoid injustice.We sympathize with the misfortune of complainant, but factual as well as corroborative circumstances speak loudly against the charge of dismissal. Complainant preferred to go back home earlier than expected. As such, she should not be allowed to utilize this forum as a convenient avenue to enforce a claim which is devoid of factual or legal basis.7

The dispositive portion of the decision of the NLRC reads:WHEREFORE, in view thereof, the appealed decision is hereby modified deleting the award of P155,411.15 representing unearned wages corresponding to the unexpired portion of the contract, there being no illegal dismissal that took place.In all other respects, the decision is affirmed.SO ORDERED.8

Anita Rodriguez ("Anita") filed a motion for reconsideration on 3 September 1998.9 On 15 September 1998, Anita filed before the NLRC a Manifestation10 asserting, inter alia, that —While it is conceded that respondents had filed their appeal within the period permitted by law yet, it is submitted that the said appeal should not have been entertained on the very simple ground that the surety bond it submitted to perfect their appeal is a "FAKE" and "FORGERIES" as certified to by no less than NORMA A. VILLANO, Assistant Vice President of the Eastern Assurance & Surety Corporation in her letter dated September 11 and 14, 1998 regarding the surety bonds Nos. G(16)54276 B-2772 in the amount of P118,779.69 and G(16)54194/B-2691 in the amount of P50,000.00, respectively.11

Anita asserted that since petitioner failed to comply with the requirements for perfecting an appeal, no appeal was perfected from the decision of the Labor Arbiter and petitioner’s appeal should have been "outrightly dismissed."12

The NLRC denied Anita’s motion for reconsideration in its assailed 3 February 1999 Resolution.13 On 17 August 1999, Anita filed a petition for certiorari14 before the Court of Appeals assailing the decision and resolution of the NLRC. On 23 August 1999, the Court of Appeals issued the following resolution:Before We act on the instant petition for certiorari, the petitioner is directed to inform this Court in writing, within five (5) days from receipt hereof, the date when C. S. Cruz and Associates, her counsel, received a copy of the Resolution dated February 3, 1999 in the case before the National Labor Relations Commission.SO ORDERED.15

On 17 April 2000, Anita’s new counsel, Emerson C. Tumanon ("Atty. Tumanon"), filed with the Court of Appeals his Entry of Appearance and Compliance.16 Atty. Tumanon asserted that Anita engaged his services as counsel in the present case in view of the death of Anita’s former counsel, Ciriaco S. Cruz ("Atty. Cruz"), on 26 June 1999. Atty. Tumanon stated that upon verification with the records of the NLRC, he found out that Atty. Cruz never received a copy of the assailed 3 February 1999 Resolution.

The Ruling of the Court of AppealsOn 15 March 2002, the Court of Appeals rendered judgment as follows:WHEREFORE, premises considered, the decision of the NLRC dated June 11, 1998, as well as its Resolution of February 3, 1999 is hereby REVERSED and SET ASIDE. In lieu thereof, the decision of the Labor Arbiter dated December 26, 1996 is hereby REINSTATED.SO ORDERED.17

The Court of Appeals ruled that, contrary to the view of the NLRC, the fact that Anita "had a second thought about her position as a caretaker or domestic helper as it was not the position she applied for, was not pregnant of bold manifestation that in fact she had difficulty in adjusting herself to the nature of her accepted position." The Court of Appeals stated that neither would Anita’s "second thoughts" bolster petitioner’s allegation that Anita "misrepresented to her foreign employer that she knows the house chores."The Court of Appeals held that petitioner’s allegation that Anita did not know her job was incredible. The Court of Appeals stated that the nature of the work given to Anita "such as car-washing the vehicle of her master, cooking the meals, housecleaning and babysitting, was too simple and menial for an ordinary person of average intelligence to easily learn, especially so for Anita, who is a registered midwife and a family woman." The Court of Appeals ruled that even granting that Anita did not know her job, petitioner, who had the duty to evaluate her qualification, should have rejected her application outright.The Court of Appeals also ruled that if there is doubt on the credibility of the evidence presented by the parties, the doubt should be resolved in Anita’s favor. The Court of Appeals stated that it is a settled rule that in case of doubt, the scales of justice must be tilted in favor of the employee.On petitioner’s claim that the petition for certiorari was filed out of time, the Court of Appeals ruled that the provisions of law pertinent to the issue were Sections 9 and 10, Rule 13 of the 1997 Rules of Civil Procedure.The Court of Appeals held that petitioner failed to prove that Anita’s counsel received the first notice of service of the 3 February 1999 resolution of the NLRC. The Court of Appeals stated that except for petitioner’s allegation that Anita’s counsel received the first, second, and third notices, and the presentation of the certified true copy of the second notice, there is no sufficient proof that Anita’s counsel received the first notice.The Court of Appeals also stated that petitioner should have presented the postmaster’s certification on the sending of the first notice, which should include the data not only on whether the corresponding notice was issued or sent but also on how, when and to whom delivery of the notice was made. The Court of Appeals held that with petitioner’s failure to adduce the required conclusive proof that the postmaster sent the first notice to Anita’s counsel, the conclusion was ineluctable that Anita’s counsel did not receive the first notice. The Court of Appeals held that there was no way in this case to determine the reckoning date of the period for the filing of the petition for certiorari.Hence, petitioner filed the present petition.

The IssuesIn assailing the decision of the Court of Appeals, petitioner contends that:

1. The Petition for Certiorari filed by respondent before the Court of Appeals docketed as CA-G.R. No. Sp-54386 was out of time, hence, the Court of Appeals had no jurisdiction to entertain the same; and2. The factual findings of the Court of Appeals are contrary to those of the National Labor Relations Commission in NLRC Case No. Adj. (L) 95-01-0306.18

The Ruling of the CourtWe find merit in the petition.Petitioner has raised a factual issue, i.e., whether Anita was illegally dismissed, which is not proper in a petition for review. We have consistently ruled that it is not the function of this Court to assess and evaluate the facts and the evidence again, our jurisdiction being generally limited to reviewing errors of law that might have been committed by the trial court or administrative agency.19 Nevertheless, since the factual findings of the Court of Appeals and the Labor Arbiter are at variance with those of the NLRC, we resolve to review the records and the evidence presented by the parties.20

This Court generally accords respect to the factual findings of the NLRC. However, the rule is equally settled that this Court will not uphold erroneous conclusions of the NLRC if the NLRC’s findings of fact on which its conclusions are based are not supported by substantial evidence.21 Substantial evidence, which is the quantum of evidence required to establish a fact in cases before administrative or quasi-judicial bodies, is that level of relevant evidence

which a reasonable mind might accept as adequate to justify a conclusion.22 Factual findings of administrative agencies will be set aside if found arbitrary.23

Petitioner assails the appellate court’s finding that it was incredible for Anita not to know her job because the nature of work of a domestic helper was easy. Petitioner asserts that the Court of Appeals "completely overlooked that it was not a matter of learning the job, but it was more on the psychological preparedness of Anita to do menial job, which way back home were being done by her own househelpers." Petitioner asserts that it did not say that Anita did not know her job as even petitioner’s evaluation of Anita’s qualifications was outstanding. Petitioner stresses that Anita’s repatriation was of her own accord.On the other hand, Anita asserts that all that petitioner has presented were mere self-serving allegations, such as (1) she was not doing her job as domestic helper; (2) she did not know how to wash clothes; (3) she had broken several glasswares of her foreign employer; and (4) when her foreign employer called her attention, she allegedly answered that she used to have her own househelper at home to do the housekeeping chores for her. Anita asserts that petitioner has not adduced any substantial evidence to support its allegations.Anita also asserts that she did not have second thoughts about accepting the job of domestic helper because she knew how to do the job of a domestic helper.We note that in its Position Paper filed before the Labor Arbiter, petitioner pointed out that they had agreed in their employment contract that Anita’s placement was subject to a 40-day probationary period.24 Anita is deemed to have admitted the existence of this stipulation in the employment contract as she never disputed petitioner’s assertion in all the pleadings that she submitted to the NLRC, the Court of Appeals, and this Court. Hence, even if it were true that Anita’s foreign employer terminated her services after 10 days of her employment, there could be no illegal dismissal as the termination was effected during the agreed probationary period.The law in point is Section 6, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, thus —Probationary employment. There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement.Probationary employment shall be governed by the following rules:x x x x (c) The services of any employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.Indeed, an employer, in the exercise of its management prerogative, may hire an employee on a probationary basis in order to determine his fitness to perform his work. The employee’s services may be terminated for a just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him at the time of his engagement.25 Anita was employed as a domestic helper on a probationary basis. Her foreign employer interviewed her through telephone calls and apprised her of the terms and conditions of her employment as househelper. Upon her arrival at her employer’s house in Taiwan, her employer apprised her again of her duties as househelper.26

The findings of fact of the Labor Arbiter which the NLRC and the Court Appeals adopted reveal that Anita’s foreign employer was dissatisfied with her performance.The law in protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute would automatically be decided in favor of labor.27

However, although Anita’s employment was terminated because she failed to meet the standards of her foreign employer, still it is necessary and obligatory to afford Anita her basic right to notice. Section 2, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code provides:Security of tenure. (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process.(b) The foregoing shall also apply in cases of probationary employment; provided, however, that in such cases, termination of employment due to failure of the employee to qualify in accordance with the standards of the

employer made known to the former at the time of engagement may also be a ground for termination of employment.x x x x(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:x x x xIf the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. (Emphasis supplied)Records disclose that Anita was repatriated to the Philippines on 25 January 1995. On the night before her departure, her employer’s wife merely told her that she was sending her home "on account of some problem." When Anita asked Ms. Go, who accompanied her to the airport the following day, why she was being repatriated, Ms. Go merely answered that "there was some kind of a problem."28 The information given to Anita cannot be considered as equivalent to the written notice required by law to be served on the employee. The notice should inform the employee of the ground or grounds for his termination and that his dismissal is being sought. The absence of notice in the present case makes Anita’s termination defective for which petitioner must be sanctioned for its non-compliance with the requirements of or for failure to observe due process. Not being a mere technicality but part of procedural due process, to which every employee is entitled to ensure that the employer’s prerogative to dismiss is not exercised arbitrarily, this requisite notice must be complied with strictly.29 Hence, it was incumbent upon Anita’s foreign employer to comply with this requirement. This, her employer failed to do, entitling Anita to nominal damages30 of P30,000 in accordance with recent jurisprudence,31 to vindicate or recognize her right to procedural due process which was violated by her employer.In Agabon v. National Labor Relations Commission,32 this Court held: Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor Relations Commission. The indemnity to be imposed should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer.Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.As enunciated by this Court in Viernes v. National Labor Relations Commission, an employer is liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process. The Court, after considering the circumstances therein, fixed the indemnity at P2,590.50, which was equivalent to the employee’s one month salary. This indemnity is intended not to penalize the employer but to vindicate or recognize the employee’s right to statutory due process which was violated by the employer.The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.While it is no longer necessary to resolve the other issues presented in this petition, still we opt to discuss them one by one.Petitioner asserts that Anita filed her petition for certiorari before the Court of Appeals out of time. According to petitioner, on the envelope containing the assailed 3 February 1999 Resolution are annotations consisting of: (a) Atty. Ciriaco S. Cruz, C. S. Cruz & Associates, Counsel for Complainant, 1801 Int. J. P. Laurel St., San Miguel, Manila; (b) First Notice; (c) Second Notice; (d) Third Notice; and (e) Return to Sender Unclaimed. Petitioner asserts that these annotations reveal how, when, and to whom delivery of the mail was made.

Petitioner contends that since only the date of the second notice of the postmaster – 23 February 1999 – is readable, it can be deduced from this that Atty. Cruz constructively received the 3 February 1999 Resolution on 28 February 1999 or five days from 23 February 1999.Petitioner also argues that it is not necessary to present the postmaster’s certification. Petitioner maintains that the annotations on the mail envelope "can stand on equal footing with and have similar evidentiary value as a postmaster’s certification."Petitioner stresses that since Anita’s counsel filed the petition for certiorari with the Court of Appeals only on 17 August 1999 or more than 60 days from 28 February 1999, the Resolution "has already assumed finality and the Court of Appeals has no jurisdiction over that petition."These arguments are erroneous. Section 9, Rule 13 of the 1997 Rules of Civil Procedure provides:Service of judgments, final orders or resolutions. — Judgments, final orders or resolutions shall be served either personally or by registered mail. x x xSection 10 of the same Rule provides:Completeness of service. — Personal service is complete upon actual delivery. Service by ordinary mail is complete upon the expiration of ten (10) days after mailing, unless the court otherwise provides. Service by registered mail is complete upon actual receipt by the addressee, or after five (5) days from the date he received the first notice of the postmaster, whichever date is earlier.The rule on service by registered mail contemplates two situations: (1) actual service the completeness of which is determined upon receipt by the addressee of the registered mail and (2) constructive service the completeness of which is determined upon expiration of five days from the date the addressee received the first notice of the postmaster.In the present case, there is no proof of actual receipt of the notice of the registered mail by Anita’s counsel. Petitioner merely relied on the envelope which bore the notations "Return to Sender Unclaimed," "Second Notice 2-23," and "Third Notice"33 tending to indicate that the registered mail was returned to sender because it was unclaimed despite the notices sent by the postmaster to the addressee. Petitioner should not have relied on these notations to support the presumption of constructive service.34 The envelope does not constitute sufficient proof that a first notice was sent by the postmaster, much less, that there was completeness of service.35

A party who relies on constructive service or who contends that his adversary has received a copy of a final order or judgment upon the expiration of five days from the date the addressee received the first notice sent by the postmaster must prove that the first notice was actually received by the addressee.36 For completeness of constructive service, there must be conclusive proof that Anita’s former counsel had actually received the notice.37 Such proof requires a certified or sworn copy of the notice given by the postmaster to the addressee. Thus, Section 13 of Rule 13 provides:Proof of service. – x x x If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office. The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof of the unclaimed letter together with the certified or sworn copy of the notice given by the postmaster to the addressee. (Emphasis supplied)There must be compliance with Section 13 of Rule 13 on proof of service by registered mail. As the Court ruled in Dela Cruz v. Dela Cruz:38 In the present case there is no proof of the actual receipt of the notice of the registered mail by counsel for the defendants, Atty. Belen. The trial court merely relied on the notations on the wrapper or envelope of the returned order of September 21, 1965 consisting of "R & S", "unclaimed" and the stamped box with the wordings "2nd notice" and "last notice" tending to indicate that the registered mail was returned to sender because it was unclaimed inspite of the notices sent by the postmaster to the addressee therein. The trial court, on the basis of said notations, assumed that the first notice of the postmaster must have been received by defendants on or before November 3, 1965, the date when the order in the envelope was returned to the Urdaneta Post Office. This finding of the court a quo is untenable.In Barrameda vs. Castillo, this Court held:Therefore, to obviate injustice, it is incumbent upon a party, who relies on constructive service or who contends that his adversary was served with a copy of a final order or judgment upon the expiration of five days from the first notice of registered mail sent by the postmaster to prove that the first notice was sent and delivered to the addressee. A certification from the postmaster would be the best evidence of that fact (Grafil vs. Feliciano, L-

27156, June 30, 1967, 20 SCRA 616). The mailman’s testimony may also be adduced to prove that fact, as was done in Aldecoa vs. Hon. Arellano and Siguenza, 113 Phil. 75, 78.The postmaster’s certification as to the sending of the first notice ‘should include the data not only as to whether or not the corresponding notices were issued or sent but also as to how, when and to whom the delivery thereof was made.’ (Hernandez vs. Navarro, L-28296, November 24, 1972, 48 SCRA 44, 64, per Barredo, J.). As stressed by Justice Barredo in a recent case, ‘there must be clear proof of compliance with the postal regulations governing the sending and receipt of the notice referred to in’ section 8 of Rule 13 (Vecino vs. Court of Appeals, L-38612, March 29, 1977). The mere exhibition in court of the envelope containing the unclaimed mail is not sufficient proof that a first notice was sent.Note that in a certain case a first notice was sent but it was received by the addressee’s eleven-year old child who did not deliver it to the addressee himself. It was held that to apply the presumption in that case and to insist on constructive service would work an injustice rather than promote justice (Cabuang vs. Hon. Bello, 105 Phil. 1135, 1138).In the instant case, there is no evidence that the first notice was sent to Barrameda’s lawyer and that it was delivered to him or should have been received by him. The envelope containing the unclaimed mail was presented in court. The face of the envelope contains the notation ‘Returned to sender. Reason: Unclaimed’. Above the stamp, on the back of the envelope, with the legend ‘City of San Pablo, Philippines, Jan. 29, 1966’, are written the dates, ‘2-3-66 and 2-9-66’. Written also on the back of the envelope are the following: ‘R to S, notified 3/3/66’.Relying on those notations on the envelope, the trial court literally and rigidly applied the presumption as to constructive service. It did not require appellee Castillo to present the postmaster’s certification that a first notice was sent to Barrameda’s lawyer and that the notice was received by the latter.Under those circumstances, the trial court’s order dismissing Barrameda’s appeal is fraught with injustice. (Emphasis supplied)Here, there is no postmaster’s certification that the registered mail was unclaimed by Atty. Cruz, Anita’s former counsel, and thus returned to sender after the first notice was sent to and actually received by him on a specified date. Absent such notice, the disputable presumption of completeness of service does not arise and by implication, petitioner could not presume actual receipt by Atty. Cruz.39

Under Section 4 of Rule 65 of the 1997 Rules of Civil Procedure, the special civil action for certiorari should be instituted within a period of 60 days from notice of the judgment, order, or resolution sought to be assailed.40 As there is no conclusive proof of service of the resolution dated 3 February 1999 denying Anita’s motion for reconsideration of the NLRC decision, the resolution cannot be deemed to have become final and executory. There is no way in the instant case to determine the reckoning date of the period provided by law for the filing of the special civil action for certiorari. Hence, the Court of Appeals did not lose jurisdiction over Anita’s petition for certiorari filed before it.That Anita herself received a copy of the assailed resolution is of no moment. Section 5(a), Rule III of The New Rules of Procedure of the NLRC provides:x x x xFor the purpose of computing the period of appeal, the same shall be counted from receipt of such decisions, awards or orders by the counsel/representative of record.Moreover, jurisprudence teaches that when a party is represented by counsel, notice should be made upon the counsel of record at his given address to which notices of all kinds emanating from the court should be sent in the absence of a proper and adequate notice to the court of a change of address.41 The service of the court’s order upon any person other than the counsel of record is not legally effective and binding upon the party. Neither may it start the corresponding reglementary period for the subsequent procedural steps that may be taken by the attorney. This is because it is the lawyer who is supposed to know the next procedural steps or what ought to be done in law for the protection of the rights of the client, and not the latter.42 The sending of the copy of the assailed resolution to Anita was not even necessary.WHEREFORE, we GRANT the petition and SET ASIDE the decision of the Court of Appeals. However, petitioner Philemploy Services and Resources, Inc. shall pay respondent Anita Rodriguez P30,000 as nominal damages. No pronouncement as to costs. SO ORDERED.

Grand Motors Corp. vs. MOLE, 130 SCRA 436

C. Employer Right to Set PeriodCase(s):

Orient Express Placement Philippines vs. NLRC, 273 SCRA 256[G.R. No. 113713. June 11, 1997]ORIENT EXPRESS PLACEMENT PHILIPPINES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION and ANTONIO F. FLORES, respondents.D E C I S I O NBELLOSILLO, J.:ANTONIO F. FLORES was hired as crane operator with a monthly salary of US$500.00 (SR1,400) for one (1) year, subject to a 3-month probationary period, by Orient Express Placement Philippines (ORIENT EXPRESS) in behalf of its foreign principal Nadrico Saudi Limited (NADRICO). However, after only one (1) month and five (5) days in Saudi Arabia, Flores was repatriated to the Philippines. Consequently, he filed a complaint with the Philippine Overseas Employment Administration (POEA) for having been terminated from work for no valid reason. ORIENT EXPRESS and NADRICO countered that Flores was terminated for poor job performance as shown in his Performance Evaluation Sheet dated 4 May 1991 and for his uncooperative work attitude.On 14 July 1992 the POEA rendered a decision in favor of complainant holding that when the ground invoked for the dismissal of an employee was incompetency or poor job performance it must be shown that the reasonable standards of work prescribed by the employer were made known to the employee and that the latter failed to conform to such standards. In the case of respondent Flores, it was observed that neither ORIENT EXPRESS nor NADRICO pointed out the reasonable standards of work required of Flores by which his incompetency was adjudged; much less did they specify how the latter failed to live up to such reasonable standards. Hence, his dismissal was unwarranted. As a consequence, ORIENT EXPRESS and NADRICO were ordered jointly and severally to pay respondent Antonio F. Flores the sum of US$5,416.66 or its peso equivalent representing salaries for the unexpired portion of the contract.The National Labor Relations Commission (NLRC) affirmed the POEA decision on appeal. In addition, it ruled that the designation of Flores as floorman instead of crane operator for which he was hired violated his employment contract. The NLRC concluded that since Flores never worked as crane operator, his foreign employer could not have observed and assessed his performance as such and then come up with a performance evaluation sheet, especially considering his consistent claim that he was made to work as floorman instead. A motion for reconsideration filed by ORIENT EXPRESS and NADRICO was subsequently denied.ORIENT EXPRESS alone instituted this petition. It imputes grave abuse of discretion against the NLRC in concluding that respondent Flores was never assigned as crane operator and for ruling that poor job performance and uncooperative work attitude did not justify his dismissal.With respect to the factual issue, we agree with petitioner that the POEA and the NLRC overlooked the fact that private respondent admitted that he was able to work as crane operator as clearly and indubitably shown in his Affidavit of 1 August 1991. Erroneous conclusions of the NLRC cannot be upheld by this Court. However, we disagree with petitioner's conclusion that private respondent was validly dismissed for poor job performance and uncooperative work attitude. Hence, we deny the petition.Under Art. 281 of the Labor Code, the services of an employee hired on a probationary basis may be terminated when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. However, the Court cannot sustain his dismissal on this ground because petitioner failed to specify the reasonable standards by which private respondent's alleged poor performance was evaluated, much less to prove that such standards were made known to him at the time of his recruitment in Manila. Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with NADRICO ever mentioned that he must first take and pass a Crane Operators' License Examination in Saudi Arabia before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman pending release of the results of the examination or in the event that he failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month after his hiring to determine whether the company was amenable to continuing with his employment. Hence, respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to commence upon his arrival at the work-site and

to terminate at the end of one (1) year. No other condition was laid out except that he was to be on probation for three (3) months.As aforesaid, no standard whatsoever by which such probationary period could be hurdled was specified and made known to him. Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein. Precisely, implicit in Art. 281 of the Code is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement , as correctly suggested by the POEA. Obviously, such an essential requirement was not met by petitioner, even assuming that Flores' alleged unsatisfactory performance was true. Besides, unsatisfactory performance is not one of the just causes for dismissal under the Labor Code.Petitioner also cites private respondent's alleged uncooperative work attitude as another compelling ground for his termination. It contends that private respondent was only willing to do his specific job and refused to help out as floorman when asked to do so. When it is purely a matter of "helping out" co-employees in urgent need of help, uncooperative work attitude may be worth discussing as possible ground for some kind of disciplinary action against the employee. However, such a discussion would be essentially academic in the case at bench where private respondent was not asked merely to “help out”. As borne out by private respondent’s allegations, which were not disputed by petitioner, from the moment of his arrival at the work-site in Saudi Arabia he was immediately assigned as floorman and not as crane operator, which was his job specification, on the flimsy excuse that a floorman, not a crane operator, was more needed at the work-site. It was only because private respondent was bold enough to resist and insist on his proper designation that his foreign supervisors grudgingly relented. However in obvious retaliation to such perceived “uncooperative work attitude,” private respondent was assigned to work at unholy hours or the so-called “graveyard shift,” i.e., from twelve o’clock midnight to twelve o’clock noon. He was not familiarized with nor given helpful instructions in the operation of relatively modern cranes. Instead, after subjecting him to a supposed performance evaluation wherein his performance and work attitude were allegedly found wanting, private respondent was again designated as floorman, albeit with the salary of a crane operator. A few days later he was dismissed and repatriated to the Philippines. Obviously, this Court cannot accept as a justifiable ground for his termination his alleged uncooperative work attitude. On the contrary, we are constrained to sustain the POEA and the NLRC in their unanimous conclusion that private respondent was indeed dismissed illegally.WHEREFORE, the assailed Decision and Resolution of the National Labor Relations Commission of 29 December 1992 and 26 April 1993, respectively, declaring that private respondent Antonio F. Flores was illegally dismissed and awarding to him Five Thousand Four Hundred Sixteen Dollars and Sixty-Six Cents (US$5,416.66) or its peso equivalent representing salaries for the unexpired portion of his overseas employment contract, are AFFIRMED. Costs against petitioner Orient Express Placement Philippines. SO ORDERED.Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.Padilla, (Chairman), J., on leave.

Mitsubishi Motors Corp. vs. Chrysler Phils. Labor Union, 433 SCRA 206

D. Duration/ExceptionCase(s):

Holiday Inn Manila vs. NLRC, 226 SCRA 417G.R. No. 109114 September 14, 1993HOLIDAY INN MANILA and/or HUBERT LINER and BABY DISQUITADO, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION (Second Division) and ELENA HONASAN, respondents.Inocentes, De Leon, Leogardo, Atienza, Manaye & Azucena Law Office for petitioners.Florante M. Yambot for private respondent. CRUZ, J.:The employer has absolute discretion in hiring his employees in accordance with his standards of competence and probity. This is his prerogative. Once hired, however, the employees are entitled to the protection of the law even

during the probation period and more so after they have become members of the regular force. The employer does not have the same freedom in the hiring of his employees as in their dismissal.Elena Honasan applied for employment with the Holiday Inn and was on April 15, 1991, accepted for "on-the-job training" as a telephone operator for a period of three weeks. 1 For her services, she received food and transportation allowance. 2 On May 13, 1992, after completing her training, she was employed on a "probationary basis" for a period of six months ending November 12, 1991. 3

Her employment contract stipulated that the Hotel could terminate her probationary employment at any time prior to the expiration of the six-month period in the event of her failure (a) to learn or progress in her job; (b) to faithfully observe and comply with the hotel rules and the instructions and orders of her superiors; or (c) to perform her duties according to hotel standards.On November 8, 1991, four days before the expiration of the stipulated deadline, Holiday Inn notified her of her dismissal, on the ground that her performance had not come up to the standards of the Hotel. 4

Through counsel, Honasan filed a complaint for illegal dismissal, claiming that she was already a regular employee at the time of her separation and so was entitled to full security of tenure. 5 The complaint was dismissed on April 22, 1992 by the Labor Arbiter, 6 who held that her separation was justified under Article 281 of the Labor Code providing as follows:

Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

On appeal, this decision was reversed by the NLRC, which held that Honasan had become a regular employee and so could not be dismissed as a probationer. 7 In its own decision dated November 27, 1992, the NLRC ordered the petitioners to reinstate Honasan "to her former position without loss of seniority rights and other privileges with backwages without deduction and qualification." Reconsideration was denied in a resolution dated January 26, 1993. 8

The petitioners now fault the NLRC for having entertained Honasan's appeal although it was filed out of time and for holding that Honasan was already a regular employee at the time of her dismissal, which was made 4 days days before the expiration of the probation period.The petition has no merit.On the timeliness of the appeal, it is well-settled that all notices which a party is entitled to receive must be coursed through his counsel of record. Consequently, the running of the reglementary period is reckoned from the date of receipt of the judgment by the counsel of the appellant. 9 Notice to the appellant himself is not sufficient notice. 10 Honasan's counsel received the decision of the Labor Arbiter on May 18, 1992. 11 Before that, however, the appeal had already been filed by Honasan herself, on May 8, 1992. 12 The petitioners claim that she filed it on the thirteenth but this is irrelevant. Even if the latter date was accepted, the appeal was nevertheless still filed on time, in fact even before the start of the reglementary period.On the issue of illegal dismissal, we find that Honasan was placed by the petitioner on probation twice, first during her on-the-job training for three weeks, and next during another period of six months, ostensibly in accordance with Article 281. Her probation clearly exceeded the period of six months prescribed by this article.Probation is the period during which the employer may determine if the employee is qualified for possible inclusion in the regular force. In the case at bar, the period was for three weeks, during Honasan's on-the-job training. When her services were continued after this training, the petitioners in effect recognized that she had passed probation and was qualified to be a regular employee.Honasan was certainly under observation during her three-week on-the-job training. If her services proved unsatisfactory then, she could have been dropped as early as during that period. But she was not. On the contrary, her services were continued, presumably because they were acceptable, although she was formally placed this time on probation.Even if it be supposed that the probation did not end with the three-week period of on-the-job training, there is still no reason why that period should not be included in the stipulated six-month period of probation. Honasan

was accepted for on-the-job training on April 15, 1991. Assuming that her probation could be extended beyond that date, it nevertheless could continue only up to October 15, 1991, after the end of six months from the earlier date. Under this more lenient approach, she had become a regular employee of Holiday Inn and acquired full security of tenure as of October 15, 1991.The consequence is that she could no longer be summarily separated on the ground invoked by the petitioners. As a regular employee, she had acquired the protection of Article 279 of the Labor Code stating as follows:

Art. 279. Security of Tenure — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

The grounds for the removal of a regular employee are enumerated in Articles 282, 283 and 284 of the Labor Code. The procedure for such removal is prescribed in Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code. These rules were not observed in the case at bar as Honasan was simply told that her services were being terminated because they were found to be unsatisfactory. No administrative investigation of any kind was undertaken to justify this ground. She was not even accorded prior notice, let alone a chance to be heard.We find in the Hotel's system of double probation a transparent scheme to circumvent the plain mandate of the law and make it easier for it to dismiss its employees even after they shall have already passed probation. The petitioners had ample time to summarily terminate Honasan's services during her period of probation if they were deemed unsatisfactory. Not having done so, they may dismiss her now only upon proof of any of the legal grounds for the separation of regular employees, to be established according to the prescribed procedure.The policy of the Constitution is to give the utmost protection to the working class when subjected to such maneuvers as the one attempted by the petitioners. This Court is fully committed to that policy and has always been quick to rise in defense of the rights of labor, as in this case.WHEREFORE, the petition is DISMISSED, with costs against petitioners. It is so ordered.Griño-Aquino, Davide, Jr., Bellosillo and Quiason, JJ., concur.

Buiser vs. Leogardo, 131 SCRA 151ILUMINADA VER BUISER, MA. CECILIA RILLOACUÑA and MA. MERCEDES P. INTENGAN, petitioners, vs.HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of the Ministry of Labor & Employment, and GENERAL TELEPHONE DIRECTORY, CO., respondents. Jimenez, Apolo & Leynes Law Office for petitioners. The Solicitor General for respondent Deputy Minister. Abad, Legayada & Associates for private respondent. GUERRERO, J.:This is a petition for certiorari seeking to set aside the Order of the Deputy Minister of Labor and Employment, affirming the Order of the Regional Director, National Capital Region, in Case No. NCR-STF-5-2851-81, which dismissed the petitioners' complainant for alleged illegal dismissal and unpaid commission.Petitioners were employed by the private respondent GENERAL TELEPHONE DIRECTORY COMPANY as sales representatives and charged with the duty of soliciting advertisements for inclusion in a telephone directory. The records show that petitioners Iluminada Ver Buiser and Ma. Mercedes P. Intengan entered into an "Employment Contract (on Probationary Status)" on May 26, 1980 with private respondent, a corporation engaged in the business of publication and circulation of the directory of the Philippine Long Distance Telephone Company. Petitioner Ma. Cecilia Rillo-Acuna entered into the same employment contract on June 11, 1980 with the private respondent. Among others, the "Employment Contract (On Probationary Status)" included the following common provisions:

l. The company hereby employs the employee as telephone representative on a probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. It is understood that darung the probationary period of employment, the Employee may be

terminated at the pleasure of the company without the necessity of giving notice of termination or the payment of termination pay. The Employee recognizes the fact that the nature of the telephone sales representative's job is such that the company would be able to determine his true character, conduct and selling capabilities only after the publication of the directory, and that it takes about eighteen (18) months before his worth as a telephone saw representative can be fully evaluated inasmuch as the advertisement solicited by him for a particular year are published in the directory only the following year.

Corollary to this, the private respondent prescribed sales quotas to be accomplished or met by the petitioners. Failing to meet their respective sales quotas, the petitioners were dismissed from the service by the private respondent. The records show that the private respondent terminated the services of petitioners Iluminada Ver Buiser and Cecilia Rillo-Acuna on May 14, 1981 and petitioner Ma. Mercedes P. Intengan on May 18, 1981 for their failure to meet their sales quotas. Thus, on May 27, 1981, petitioners filed with the National Capital Region, Ministry of Labor and Employment, a complaint for illegal dismissal with claims for backwages, earned commissions and other benefits, docketed as Case No. NCR-STF-5-2851-81. The Regional Director of said ministry, in an Order dated September 21, 1982, dismissed the complaints of the petitioners, except the claim for allowances which private respondent was ordered to pay. A reconsideration of the Order was sought by the petitioners in a motion filed on September 30, 1982. This motion, however, was treated as an appeal to the Minister of Labor. On appeal, Deputy Minister Vicente Leogardo, Jr. of the Ministry of Labor issued an Order dated January 7, 1983, affirming the Regional Director's Order dated September 21, 1982, wherein it ruled that the petitioners have not attained permanent status since private respondent was justified in requiring a longer period of probation, and that the termination of petitioners' services was valid since the latter failed to meet their sales quotas. Hence, this petition for certiorari on the alleged ground that public respondent committed grave abuse of discretion amounting to lack of jurisdiction. Specifically, petitioners submit that: 1. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that the probationary employment of petitioners herein is eighteen (18) months instead of the mandated six (6) months under the Labor Code, and in consequently further ruling that petitioners are not entitled to security of tenure while under said probation for 18 months. 2. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioners were dismissed for a just and valid cause. 3. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioners are not entitled to the commissions they have earned and accrued during their period of employment. Petitioners contend that under Articles 281-282 of the Labor Code, having served the respondent company continuously for over six (6) months, they have become automatically regular employees notwithstanding an agreement to the contrary. Articles 281-282 read thus:

Art. 282. Probationary Employment. — Probationary employment shall not exceed six (6) months from the date the employee started working, unless it iscCovered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (As amended by PD 850). Art. 281. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceeding paragraph. Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (As amended by PD 850).

It is petitioners' submission that probationary employment cannot exceed six (6) months, the only exception being apprenticeship and learnership agreements as provided in the Labor Code; that the Policy Instruction of the Minister of Labor and Employment nor any agreement of the parties could prevail over this mandatory requirement of the law; that this six months prescription of the Labor Code was mandated to give further efficacy to the constitutionally-guaranteed security of tenure of workers; and that the law does not allow any discretion on the part of the Minister of Labor and Employment to extend the probationary period for a longer period except in the aforecited instances. Finally, petitioners maintain that since they are regular employees, they can only be removed or dismissed for any of the just and valid causes enumerated under Article 283 of the Labor Code. We reject petitioners' contentions. They have no basis in law. Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is When the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, such as in the present case where the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills, experience or training. Policy Instruction No. 11 of the Minister of Labor and Employment has clarified any and all doubts on the period of probationary employment. It states as follows:

Probationary Employment has been the subject of misunderstanding in some quarter. Some people believe six (6) months is the probationary period in all cases. On the other hand employs who have already served the probationary period are sometimes required to serve again on probation. Under the Labor Code, six (6) months is the general probationary period ' but the probationary period is actually the period needed to determine fitness for the job. This period, for lack of a better measurement is deemed to be the period needed to learn the job. The purpose of this policy is to protect the worker at the same time enable the employer to make a meaningful employee selection. This purpose should be kept in mind in enforcing this provision of the Code. This issuance shall take effect immediately.

In the case at bar, it is shown that private respondent Company needs at least eighteen (18) months to determine the character and selling capabilities of the petitioners as sales representatives. The Company is engaged in advertisement and publication in the Yellow Pages of the PLDT Telephone Directories. Publication of solicited ads are only made a year after the sale has been made and only then win the company be able to evaluate the efficiency, conduct, and selling ability of its sales representatives, the evaluation being based on the published ads. Moreover, an eighteen month probationary period is recognized by the Labor Union in the private respondent company, which is Article V of the Collective Bargaining Agreement, ... thus:

Probationary Period — New employees hired for regular or permanent shall undergo a probationary or trial period of six (6) months, except in the cases of telephone or sales representatives where the probationary period shall be eighteen (I 8) months.

And as indicated earlier, the very contracts of employment signed and acquiesced to by the petitioners specifically indicate that "the company hereby employs the employee as telephone sales representative on a probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. This stipulation is not contrary to law, morals and public policy. We, therefore, hold and rule that the probationary employment of petitioners set to eighteen (18) months is legal and valid and that the Regional Director and the Deputy Minister of Labor and Employment committed no abuse of discretion in ruling accordingly. On the second assignment of error that public respondent committed grave abuse of discretion in ruling that petitioners were dismissed for a just and valid cause, this is not the first time that this issue has been raised before this Court. Earlier, in the case of "Arthur Golez vs. The National Labor Relations Commission and General

Telephone Directory Co. "G.R. No. L-64459, July 25, 1983, the petition for certiorari which raised the same issue against the herein private respondent was dismissed by this Court for lack of merit. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. (Philippine American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639). In the case at bar, the petitioners' failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards availed of so long as they are exercised in good faith for the advancement of the employer's interest. Petitioners anchor their claim for commission pay on the Collective Bargaining Agreement (CBA) of September 1981, in support of their third assignment of error. Petitioners cannot avail of this agreement since their services had been terminated in May, 1981, at a time when the CBA of September, 1981 was not yet in existence. In fine, there is nothing in the records to show any abuse or misuse of power properly vested in the respondent Deputy Minister of Labor and Employment. For certiorari to lie, "there must be capricious, arbitrary and whimsical exercise of power, the very antithesis of the judicial prerogative inaccordance with centuries of both civil and common law traditions." (Panaligan vs. Adolfo, 67 SCRA 176, 180). The "abuse of discretion must be grave and patent, and it must be shown that the discretion was exercised arbitrarily or despotically." (Palma and Ignacio vs. Q. & S., Inc., et al., 17 SCRA 97, 100; Philippine Virginia Tobacco Administration vs. Lucero, 125 SCRA 337, 343). WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED. Makasiar (Chairman), Aquino, Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur.

E. Criteria RegularizationCase(s):

Alcira vs. NLRC, 431 SCRA 508RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES CORPORATION/FRANK THOMAS, XAVIER G. PEÑA and TRIFONA F. MAMARADLO, respondents.D E C I S I O NCORONA, J.:Before us on appeal is the decision of the Court of Appeals dated June 22, 2001 affirming the decision of the National Labor Relations Commission dated March 23, 1999 which, in turn, affirmed the decision of labor arbiter Pedro Ramos dated May 19, 1998 dismissing petitioner Radin Alcira’s complaint for illegal dismissal with prayer for reinstatement, backwages, moral damages, exemplary damages and attorney’s fees. The facts follow.Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with petitioner’s performance, respondent Middleby terminated petitioner’s services. The bone of contention centered on whether the termination occurred before or after the six-month probationary period of employment.The parties, presenting their respective copies of Alcira’s appointment paper, claimed conflicting starting dates of employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both documents indicated petitioner’s employment status as “probationary (6 mos.)” and a remark that “after five months (petitioner’s) performance shall be evaluated and any adjustment in salary shall depend on (his) work performance.”Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, a senior officer of respondent Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a dismissal “after the lapse of his probationary employment,” petitioner filed on November 21, 1996 a complaint in the National Labor Relations Commission (NLRC) against respondent Middleby contending that he had already become a regular employee as of the date he was illegally dismissed. Included as respondents in the complaint were the following officers of respondent Middleby: Frank Thomas (General Manager), Xavier Peña (Human Resources Manager) and Trifona Mamaradlo (Engineering Manager).

In their defense, respondents claim that, during petitioner’s probationary employment, he showed poor performance in his assigned tasks, incurred ten absences, was late several times and violated company rules on the wearing of uniform. Since he failed to meet company standards, petitioner’s application to become a regular employee was disapproved and his employment was terminated.On May 19, 1998, the labor arbiter dismissed the complaint on the ground that: (1) respondents were able to prove that petitioner was apprised of the standards for becoming a regular employee; (2) respondent Mamaradlo’s affidavit showed that petitioner “did not perform well in his assigned work and his attitude was below par compared to the company’s standard required of him” and (3) petitioner’s dismissal on November 20, 1996 was before his “regularization,” considering that, counting from May 20, 1996, the six-month probationary period ended on November 20, 1996. On March 23, 1999, the NLRC affirmed the decision of the labor arbiter.On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC. According to the appellate court:Even assuming, arguendo, that petitioner was not informed of the reasonable standards required of him by Middleby, the same is not crucial because there is no termination to speak of but rather expiration of contract. Petitioner loses sight of the fact that his employment was probationary, contractual in nature, and one with a definite period. At the expiration of the period stipulated in the contract, his appointment was deemed terminated and a notice or termination letter informing him of the non-renewal of his contract was not necessary.While probationary employees enjoy security of tenure such that they cannot be removed except for just cause as provided by law, such protection extends only during the period of probation. Once that period expired, the constitutional protection could no longer be invoked. Legally speaking, petitioner was not illegally dismissed. His contract merely expired.Hence, this petition for review based on the following assignment of errors:ITHE COURT OF APPEALS GRAVELY ERRED, BLATANTLY DISREGARDED THE LAW AND ESTABLISHED JURISPRUDENCE, IN UPHOLDING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION.IITHE COURT OF APPEALS GRAVELY ERRED AND BLATANTLY DISREGARDED THE LAW IN HOLDING THAT PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD.IIITHE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT AN EMPLOYER CAN BE PRESUMED TO HAVE COMPLIED WITH ITS DUTY TO INFORM THE PROBATIONARY EMPLOYEE OF THE STANDARDS TO MAKE HIM A REGULAR EMPLOYEE.IV

THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN NOT APPLYING TO THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE COURT IN SERRANO VS. NLRC, ET. AL., G.R. NO. 117040, JANUARY 27, 2000.Central to the matter at hand is Article 281 of the Labor Code which provides that:ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the time of his alleged dismissal. We rule in the negative.Petitioner claims that under the terms of his contract, his probationary employment was only for five months as indicated by the remark “Please be informed that after five months, your performance shall be evaluated and any adjustment in salary shall depend on your work performance.” The argument lacks merit. As correctly held by the labor arbiter, the appointment contract also stated in another part thereof that petitioner’s employment status was “probationary (6 mos.).” The five-month period referred to the evaluation of his work.Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. According to petitioner’s computation, since Article 13 of the Civil Code provides that one month is

composed of thirty days, six months total one hundred eighty days. As the appointment provided that petitioner’s status was “probationary (6 mos.)” without any specific date of termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee.Petitioner’s contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et. al., this Court dealt with the same issue of whether an employment contract from May 16, 1995 to November 15, 1995 was within or outside the six-month probationary period. We ruled that November 15, 1995 was still within the six-month probationary period. We reiterate our ruling in CALS Poultry Supply:(O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following.(italics supplied)In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to “regularize” him on November 20, 1996.The second issue is whether respondent Middleby informed petitioner of the standards for “regularization” at the start of his employment.Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of 1997) provides that:

xxx xxx xxx(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

xxx xxx xxxWe hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after five months. In Orient Express Placement Philippines vs. National Labor Relations Commission, we ruled that an employer failed to inform an employee of the reasonable standards for becoming a regular employee:Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with NADRICO ever mentioned that he must first take and pass a Crane Operator's License Examination in Saudi Arabia before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman pending release of the results of the examination or in the event that he failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month after his hiring to determine whether the company was amenable to continuing with his employment. Hence, respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to commence upon his arrival at the work-site and to terminate at the end of one (1) year. No other condition was laid out except that he was to be on probation for three (3) months.(emphasis supplied)Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring. We agree with the labor arbiter when he ruled that:In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must satisfy in order to be converted into regular status. This rans (sic) counter to the agreement between the parties that after five months of service the petitioner’s performance would be evaluated. It is only but natural that the evaluation should be made vis-à-vis the performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did not perform well in his assigned work and his attitude was below par compared to the company’s standard required of him.The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment.It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement.But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission that this constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their contract of employment. Manlimos concluded that “(t)his development has rendered moot the question of whether there was a just cause for the dismissal of the petitioners xxx.” In the case at bar, respondent

Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary employment that it did not intend to grant him a regular status.Although we can regard petitioner’s severance from work as dismissal, the same cannot be deemed illegal. As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3) failed to wear the proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these substantiated allegations. Taking all this in its entirety, respondent Middleby was clearly justified to end its employment relationship with petitioner.WHEREFORE, the petition is hereby DENIED.No costs.SO ORDERED.Vitug, J., (Chairman), Sandoval-Gutierrez, and Carpio Morales, JJ., concur.

F. Extension of ContractCase(s):

Mariwasa Manufacturing, Inc. vs. Leogardo, 169 SCRA 465MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners, vs.HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment judgment, and JOAQUIN A. DEQUILA, respondents. Cruz, Agabin, Atienza & Alday for petitioners. The Solicitor General of public respondent. Norberto M. Alensuela, Sr. for private respondent. NARVASA, J.:There is no dispute about the facts in this case, and the only question for the Court is whether or not, Article 282 of the Labor Code notwithstanding, probationary employment may validly be extended beyond the prescribed six-month period by agreement of the employer and the employee. Private respondent Joaquin A. Dequila (or Dequilla) was hired on probation by petitioner Mariwasa Manufacturing, Inc. (hereafter, Mariwasa only) as a general utility worker on January 10, 1979. Upon the expiration of the probationary period of six months, Dequila was informed by his employer that his work had proved unsatisfactory and had failed to meet the required standards. To give him a chance to improve his performance and qualify for regular employment, instead of dispensing with his service then and there, with his written consent Mariwasa extended his probation period for another three months from July 10 to October 9, 1979. His performance, however, did not improve and on that account Mariwasa terminated his employment at the end of the extended period. 1

Dequila thereupon filed with the Ministry of Labor against Mariwasa and its Vice-President for Administration, Angel T. Dazo, a complaint for illegal dismissal and violation of Presidential Decrees Nos. 928 and 1389. 2 His complaint was dismissed after hearing by Director Francisco L. Estrella, Director of the Ministry's National Capital Region, who ruled that the termination of Dequila's employment was in the circumstances justified and rejected his money claims for insufficiency of evidence. 3 On appeal to the Office of the Minister, however, said disposition was reversed. Respondent Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular employee at the time of his dismissal, therefore, could not have been lawfully dismissed for failure to meet company standards as a probationary worker. He was ordered reinstated to his former position without loss of seniority and with full back wages from the date of his dismissal until actually reinstated. 4 This last order appears later to have been amended so as to direct payment of Dequila's back wages from the date of his dismissal to December 20, 1982 only. 5 Mariwasa and Dazo, now petitioners, thereafter be sought this Court to review Hon. Leogardo's decision on certiorari and prohibition, urging its reversal for having been rendered with grave abuse of discretion and/or without or in excess of jurisdiction. 6

The petition, as well as the parties' comments subsequently submitted all underscore the fact that the threshold issue here is, as first above stated, the legal one of whether employer and employee may by agreement extend the

probationary period of employment beyond the six months prescribed in Art. 282 of the Labor Code, which provides that:

Art. 282. Probationary Employment. — Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after probationary period shall be considered a regular employee.'

The Court agrees with the Solicitor General, who takes the same position as the petitioners, that such an extension may lawfully be covenanted, notwithstanding the seemingly restrictive language of the cited provision. Buiser vs. Leogardo, Jr . 7 recognized agreements stipulating longer probationary periods as constituting lawful exceptions to the statutory prescription limiting such periods to six months, when it upheld as valid an employment contract between an employer and two of its employees that provided for an eigthteen-month probation period. This Court there held:

'It is petitioners' submission that probationary employment cannot exceed six (6) months, the only exception being apprenticeship and learnership agreements as provided in the Labor Code; that the Policy Instruction of the Minister of Labor and Employment nor any agreement of the parties could prevail over this mandatory requirement of the law; that this six months prescription of the Labor Code was mandated to give further efficacy to the constitutionally-guaranteed security of tenure of workers; and that the law does not allow any discretion on the part of the Minister of Labor and Employment to extend the probationary period for a longer period except in the aforecited instances. Finally, petitioners maintain that since they are regular employees, they can only be removed or dismissed for any of the just and valid causes enumerated under Article 283. of the Labor Code. We reject petitioners' contentions. They have no basis in law. Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is when the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, such as in the present case where the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills experience or training.x x x We therefore, hold and rule that the probationary employment of petitioners set to eighteen (18) months is legal and valid and that the Regional Director and the Deputy Minister of Labor and Employment committed no abuse of discretion in ruling accordingly.

The single difference between Buiser and the present case: that in the former involved an eighteen-month probationary period stipulated in the original contract of employment, whereas the latter refers to an extension agreed upon at or prior to the expiration of the statutory six-month period, is hardly such as to warrant or even suggest a different ruling here. In both cases the parties' agreements in fact resulted in extensions of the period prescribed by law. That in this case the inability of the probationer to make the grade became apparent only at or about the end of the six-month period, hence an extension could not have been pre-arranged as was done in Buiser assumes no adverse significance, given the lack, as pointed out by the Solicitor General, of any indication that the extension to which Dequila gave his agreement was a mere stratagem of petitioners to avoid the legal consequences of a probationary period satisfactorily completed. For aught that appears of record, the extension of Dequila's probation was ex gratia, an act of liberality on the part of his employer affording him a second chance to make good after having initially failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said employer's account to compel it to keep on its payroll one who could not perform according to its work standards. The law, surely, was never meant to produce such an inequitable result.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit attaching to the completion of said period if he still failed to make the grade during the period of extension. The Court finds nothing in the law which by any fair interpretation prohibits such a waiver. And no public policy protecting the employee and the security of his tenure is served by prescribing voluntary agreements which, by reasonably extending the period of probation, actually improve and further a probationary employee's prospects of demonstrating his fitness for regular employment. Having reached the foregoing conclusions, the Court finds it unnecessary to consider and pass upon the additional issue raised in the Supplemental Petition 8 that the back wages adjudged in favor of private respondent Dequila were erroneously computed. WHEREFORE, the petition is granted. The orders of the public respondent complained of are reversed and set aside. Private respondent's complaint against petitioners for illegal dismissal and violation of Presidential Decrees 928 and 1389 is dismissed for lack of merit, without pronouncement as to costs. SO ORDERED. Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

G. Absorbed EmployeesCase(s):

Cebu Stevedoring Co., Inc. vs. Regional Director, 168 SCRA 315G.R. No. L-54285 December 8, 1988

CEBU STEVEDORING CO., INC., Petitioner, vs. THE HONORABLE REGIONAL DIRECTOR/MINISTER OF LABOR, ARSENIO GELIG and MARIA LUZ QUIJANO, Respondents.

REGALADO, J.:

This is a petition for review on certiorari of the order, dated May 2, 1978, of the Regional Director of Labor Regional Office No. 7 in Cebu City, in an action for reinstatement with backwages, which order was affirmed on appeal by the then Ministry of Labor 1 and, subsequently, by the Office of the President, 2 and the dispositive portion whereof reads as follows:

WHEREFORE, the respondent, Cebu Stevedoring Co., Inc., is hereby ordered to reinstate Arsenio Gelig and Maria Luz Quijano to their former positions within ten days from receipt to (sic) this order without loss of seniority rights and with full backwages from October 18, 1977 until the actual date of reinstatement. 3 chanrobles virtual law library

Private respondents Arsenio Gelig and Maria Luz Quijano were former employees of the Cebu Customs Arrastre Service (hereinafter referred to as CCAS). On May 2, 1977, pursuant to Customs Administrative Order No. 21-77 of the Hon. Pio de Roda, Acting Commissioner of Customs and concurrently Acting Secretary of Finance, the CCAS was abolished "for the reason that the objectives for which it was created had already been attained". 4 As a consequence of such abolition, all the employees of CCAS, including herein respondents, were given their termination and/or separation pay by the Bureau of Customs, Cebu City, computed up to April 30, 1977. 5 chanrobles virtual law libraryThereafter, on May 1, 1977, all the employees of CCAS including herein private respondents, were absorbed by petitioner Cebu Stevedoring Co. Inc. (CSCI for brevity), with the same positions that they held in the CCAS. Eventually, however, on October 17, 1977, private respondents were dismissed by petitioner 6 without prior clearance, allegedly for redundancy and other alleged ground hereinafter discussed . 7 chanrobles virtual law libraryA complaint for reinstatement with backwages was filed by private respondents before Regional Office No. 7 of the Ministry of Labor, which thereafter rendered the order containing the above-quoted portion under the following rationale:

It is to be noted that the complainants were employed by the Cebu Customs Arrastre Service long time ago whose functions were carried over when they were absorbed by the herein respondent. In other words, there is no need to employ them as probationary considering that they are already well trained in their respective functions. They were not absorbed for a definite period but instead for an indefinite period.chanroblesvirtuallawlibrary chanrobles virtual law library

A probationary period of employment means that an employee is hired for training for a certain period in order to determine whether they qualify (sic) for the position or not. In this case, the complainants cannot be mistakenly considered as probationary viewed on the theory that they have been holding the same positions for a quite a long time at the Cebu Customs Arrastre Service before they were absorbed by the Cebu Stevedoring Co. Inc. with the same positions. 8 chanrobles virtual law library

On appeal, the Minister of Labor affirmed the decision of the Labor Regional Director, stating that: ... complainants who were employed by Cebu Arrastre Service upon being absorbed by respondent for the same function and work need not undergo another probationary test in the same line of work where they have gained a latitude of expertise. 9 chanrobles virtual law library

Petitioner thereafter elevated the case to the Office of the President which, through Presidential Executive Assistant Jacobo C. Clave, issued a resolution dismissing the appeal for the reason that "there is no law expressly recognizing the parties' right to appeal to this Office in cases of this nature and considering that it does not show any exceptionally meritorious cause for the exercise in this case of the constitutional power of review (control) of the President/Prime Minister as implemented by Executive Order No. 19, series of 1966, as amended, Section 1 of which pertinently provides that 'an appeal to the Office of the President ... is not a matter of right in the absence of statutory provision to that effect '" and further noting that the "case does not involve national interest." 10 A motion for reconsideration of the resolution was like-wise denied. 11 chanrobles virtual law libraryPetitioner's submissions in the present recourse may be synthesized into the following propositions: (1) There is a brazen disregard of the constitutional precept of "due process of law" prejudicing petitioner's rights; (2) As casuals, respondents Gelig and Quijano can be terminated within the 6-month period without need of clearance from the Ministry of Labor and neither is the employer obligated to pay them termination pay; (3) Redundancy is one of the grounds under the Labor Code justifying termination of employees; and (4) Retrenchment is another justifying circumstance for terminating the services of an employee.chanroblesvirtuallawlibrary chanrobles virtual law library1. Petitioner contends that it was denied procedural due process because no hearing was conducted before the Labor Regional Director and neither did private respondents Gelig and Quijano file their position papers as provided in the Labor Code; that upon the abolition of the CCAS, all its employees were given separation pay, and thus, when the employees, including herein private respondents, were absorbed by petitioner when it took over the arrastre operations on May 3, 1977, they were all employed as casuals; that when the company terminated the services of private respondents, together with 52 others, on October 18, 1977 they had served CSCI for barely 5-1/2 months and were still on probation, hence no clearance was required for their termination; that since the positions occupied by herein private respondents with the former CCAS are Identical with the positions already filled up and with the same functions being discharged in the main office of CSCI, private respondents may be terminated for redundancy; and that financial losses incurred by petitioner likewise justify the retrenchment of its employees. 12 chanrobles virtual law libraryPublic respondent, in its Comment, 13 points out that although private respondents failed to submit their position paper, they substantiated their complaint in a hearing before the labor arbiter on April 5, 1978; that although petitioner, through an error in the subpoena but also with its contributory fault, was deprived of the opportunity to appear at the scheduled hearing of April 5, 1978, it does not mean an outright denial of due process considering that petitioner availed of the remedy of appeal to the Ministry of Labor and the Office of the President; that the dismissal of private respondents is without just cause; and that the present petition raises mainly questions of fact.chanroblesvirtuallawlibrary chanrobles virtual law libraryWe find this petition devoid of merit; the writ prayed for cannot be granted.chanroblesvirtuallawlibrary chanrobles virtual law libraryPetitioner's proposition that the lack of hearing before the Labor Regional Director and private respondents' failure to file their respective position papers constitute a denial of due process, deserves meagre consideration.chanroblesvirtuallawlibrary chanrobles virtual law libraryWe agree that no rule is better established, under the due process clause of the Constitution, than that which requires notice and the opportunity to be heard before any person can be lawfully deprived of his rights. 14 The right to be heard, as a preliminary step essential to the rendition of an enforceable judgment, constitutes a basic element of the constitutional requirement of due process of law. 15 chanrobles virtual law libraryHowever, while in this case petitioner was not afforded an opportunity to be heard by oral argument on its position paper due to its absence at the scheduled hearing, as already explained, it is likewise true that it was

required to, as in fact it actually did, submit a position paper which, together with the evidence presented during the hearing, became the basis of the questioned order of the Regional Director. From this order, to repeat, petitioner appealed to the Labor Minister, and then to the Office of the President. It is, therefore, apparent that petitioner was not denied adequate remedies from the alleged procedural infirmities imputed to the rendition of the Regional Director's order. The entire record of the case was reviewed and duly considered on appeal to the Labor Minister, which appellate proceeding remedied any inadequacy in the procedural due process with which the trial proceedings are being faulted.chanroblesvirtuallawlibrary chanrobles virtual law libraryThus, We have consistently adhered to the decisional rule that appellate review is curative in character on the issue of an alleged denial of due process for lack of a hearing in the case. 16 chanrobles virtual law libraryThis Court has never lost sight of the fact that one of the most important and significant State policies, enshrined in the present Constitution as it was in its two predecessors, is the promotion of social justice in all phases of national development, specifically the protection of the rights of workers and the promotion of their welfare. 17 chanrobles virtual law libraryIt was in the light of this concern in the fundamental law and the jurisprudence thereon that the Labor Code was enacted, with a specific declaration of its basic policy that-

The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and human conditions of work. 18 chanrobles virtual law library

2. With these in mind, We approach the next issue for resolution, that is, whether herein private respondents were validly dismissed.chanroblesvirtuallawlibrary chanrobles virtual law libraryPetitioner submits that private respondents were merely casuals and could, therefore, be terminated even without prior clearance from the then Ministry of Labor and without entitlement to separation pay. This contention is not well-taken.chanroblesvirtuallawlibrary chanrobles virtual law libraryWe agree with the Regional Director that private respondents could not be considered probationary employees because they were already well-trained in their respective functions. This conclusion is further bolstered by the factual findings of the Labor Minister that said order of the Director was supported by substantial evidence. As stressed by the Solicitor General, while private respondents were still with the CCAS they were already clerks. Respondent Gelig had been a clerk for CCAS for more than ten (10) years, while respondent Quijano had slightly less than ten (10) years of service. They were, therefore, not novices in their jobs but experienced workers. 19 chanrobles virtual law libraryOn this particular issue, it is perhaps timely to consider well settled principles involving decisions of administrative agencies. Findings of quasi-judicial agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but, at times, even finality where such findings are supported by substantial evidence, 20 and judicial review by Us is limited to issues of jurisdiction or grave abuse of discretion. 21 chanrobles virtual law libraryAs regular employees, therefore, private respondents may not be dismissed and petitioner cannot terminate their services except for a just or authorized cause provided by law and with scrupulous observance of due process requirements. 22 chanrobles virtual law library3. It is true that Article 283 of the Labor Code provides that an "employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking." However, the records fail to establish clearly and convincingly that the positions occupied by private respondents are Identical with those presently existing in petitioner's office.chanroblesvirtuallawlibrary chanrobles virtual law libraryFurthermore, petitioner kept private respondents in its employ for almost six months without raising this issue. It does not mention which positions are allegedly duplicated by the positions held by private respondents. It does not even explain why the private respondents should be the ones to be terminated, without regard to the comparative lengths of service, qualifications and performance of all employees concerned.chanroblesvirtuallawlibrary chanrobles virtual law library4. Petitioner's submission that it is suffering financial losses is untenable since it appears that it absorbed and employed for almost six months, without any intimation of supposed financial distress, the majority of the former employees of CCAS. It never advised private respondents of a company retrenchment program; the first time this supposed program was mentioned was when petitioner was trying to justify the dismissal of the private

respondents before the labor arbiter. In a futile attempt to extricate itself from liability, petitioner presented a so-called Statement of Operations, 23 which, however, remains an uncorroborated and self-serving piece of evidence.chanroblesvirtuallawlibrary chanrobles virtual law libraryThe constitutional duty of the State to protect the right of laborers to security of tenure demands that an employer may be permitted to terminate the services of an employee only under conditions allowed by and with due process of law. Under the circumstances obtaining in this case, the irresistible conclusion is that the termination of private respondents' services was unjust and illegal, as to justify their reinstatement and entitlement to backwages for three years.chanroblesvirtuallawlibrary chanrobles virtual law libraryWHEREFORE, this petition is hereby DISMISSED and petitioner is ordered to reinstate private respondents to their former positions at the time of their dismissal, or if such reinstatement is not possible, to substantially equivalent positions, without loss of seniority rights and other privileges appertaining thereto; and to pay private respondents three (3) years backwards, from October 18, 1977 without qualification or deduction. In the event that reinstatement is not possible due to the supervenience of events which prevent the same, petitioner is ordered to further pay private respondents, more as a vindication of a right and less as indemnification of a loss, separation pay equivalent to one (1) month's salary based on their monthly salaries as of October 17, 1977.chanroblesvirtuallawlibrary chanrobles virtual law librarySO ORDERED. Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

H. Double ProbationCase(s):

A Prime Security Services, Inc. vs. NLRC, 322 SCRA 283A’ PRIME SECURITY SERVICES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HON. ARBITER VALENTIN GUANIO, and OTHELLO MORENO, respondents.

D E C I S I O NPURISIMA, J.: This special civil action for certiorari seeks to annul the decision of the Second Division of the National Labor Relations Commission ("NLRC"), dated April 20, 1992, which affirmed with modification the decision of Labor Arbiter Valentin C. Guanio in NLRC-NCR Case No. 00-02-01038-89.The facts that matter are as follows:On February 23, 1989, private respondent Othello C. Moreno filed a complaint with the Department of Labor and Employment, Arbitration Branch, National Capital Region, against the petitioner, A’ Prime Security Agency, Inc., for illegal dismissal, illegal deduction and underpayment of wages. Docketed as NLRC-NCR Case No. 00-02-01038-89, the complaint was assigned to Labor Arbiter Valentin C. Guanio ("LA Guanio").The complaint alleged, among others, that complainant (private respondent herein) had been working as a security guard for a year with the Sugarland Security Services, Inc., a sister company of petitioner; that 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 along Roxas Boulevard, Manila; that he was among those absorbed by the petitioner when it took over the security contracts of its sister company, Sugarland Security Services, Inc., with the U.S. Embassy; that he was forced by petitioner to sign new probationary contracts of employment for six (6) months; that on August 1, 1988, his employment was terminated; that during his employment, the amount of P20.00 per month was deducted from his salary allegedly for withholding tax, although no withholding tax receipt was given to him, and the salary he was receiving was only P2,187.00 a month, which was way below the P2,410.17 stipulated in the PADPAO memorandum of agreement.Petitioner, for its part, alleged that the private respondent was hired on January 30, 1988, on a probationary basis, and he signed an authority to deduct from his salary any reimbursement for any loss or damage caused to properties of the client; that he was given a copy of petitioner’s rules and regulations which provide 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; that on March 25, 1988, he figured in a quarrel with another security guard, which resulted in a near shootout; 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.On November 28, 1989, LA Guanio handed down the decision disposing as follows:

"WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the respondent to reinstate the complainant to his former position and accord to him the status of a regular employee. The respondent is further ordered to pay the complainant his backwages from the time he was unlawfully dismissed until he is finally reinstated; and to refund to the complainant the deduction it had made from his salary in the amount of P20.00 per month.The claim of the complainant for underpayment of wages is dismissed for lack of merit.SO ORDERED."

Petitioner appealed to the National Labor Relations Commission which affirmed the decision of LA Guanio with a slight modification, holding thus:

"WHEREFORE, premises considered, the appealed decision is hereby, Modified as aforediscussed. The order for the refund of the deductions made by respondent from complainant’s salaries in the amount of P20.00 per month is hereby, Vacated and Set Aside.Moreover, the backwages due complainant should in no case exceed the period of three (3) years.In all other respects, the decision appealed from, stands."

Petitioner presented a motion for reconsiderationof the aforesaid decision but to no avail. The same was denied by the respondent NLRC for lack of merit.Undaunted, petitioner found its way to this Court via the present petition, contending that:

"IBASIC PUBLIC RESPONDENTS HAVE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION AND/OR IN EXCESS OF JURISDICTION WHEN THEY UNDULY PRONOUNCED PRIVATE RESPONDENT’S EMPLOYMENT WITH THE PETITIONER AS A CONTINUANCE OF ITS (sic) PREVIOUS EMPLOYMENT WITH ITS (sic) OLD EMPLOYER, THE SUGARLAND SECURITY SERVICES, INC., WITHOUT ANY SHRED OF EVIDENCE LINKING THE TWO COMPANIES, EMPLOYERS WHICH ARE DISTINCT AND DIFFERENT PERSONALITIES, AS PROVEN BY THE RECORDS OF THE CASE, RESULTING IN SERIOUS PREJUDICE OF THE PETITIONER WHICH, LIKE LABOR, ALSO DESERVES PROTECTION OF THE LAW.

IIBOTH PUBLIC RESPONDENT (sic) HAVE COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY CHARGED AND FOUND PETITIONER GUILTY OF ILLEGAL DISMISSAL AND THUS FAILED TO CONSIDER THAT THE TERMINATION OF THE PROBATIONARY CONTRACT BY THE PETITIONER IS A LEGITIMATE EXERCISE OF DISCRETION IN ANTICIPATION OF WHAT IT PERCEIVED OF AN EMPLOYEE, IN THE PERSON OF THE PRIVATE RESPONDENT, WHICH (sic) WILL NOT MAKE A GOOD - (sic) ASSET OF THE COMPANY AND INSTEAD IS A LIABILITY AS IT POSSES (sic) DANGERS NOT ONLY ON THE PETITIONER BUT ON ITS VERY CLIENT, THE U.S. EMBASSY, WITH WHOM PRIVATE RESPONDENT IS DIRECTLY SERVING WITH (sic), DUE TO ITS (sic) INEFFICIENCY, ENEPTNESS (sic) AND MORE THAN (sic) BELOW BAR PERFORMANCE BY (sic) THE PRIVATE RESPONDENT DURING ITS (sic) SIX MONTH PROBATIONARY PERIOD;

IIITHE PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY ORDERED PETITIONER FOR THE PAYMENT OF (sic) PRIVATE RESPONDENT’S BACK WAGES (sic) AND FOR ITS (sic) REINSTATEMENT."

For resolution can be simplified into the following issues, to wit:1. Whether private respondent’s employment with A’ Prime Security Services, Inc. was just a continuation of his employment with Sugarland Security Services, Inc.;2. Whether private respondent is a regular or probationary employee of petitioner; and3. Whether private respondent’s dismissal is illegal.

After a careful study, the Court finds the imputation of grave abuse of discretion on the part of the respondents, NLRC and "LA Guanio", barren of any sustainable basis.

Anent the first issue, records show that the allegations of the private respondent that Sugarland Security Services, Inc. ("Sugarland") is a sister company of A’ Prime Security Services, Inc. ("A’ Prime") and that the latter absorbed the security contracts and security guards of Sugarland with the U.S. Embassy were neither denied nor controverted by the petitioner before the Labor Arbiter. Under Section 1, Rule 9 of the Rules of Court, in relation to Section 3, Rule I of the Rules of the NLRC, material averments in the Complaint are deemed admitted when not specifically denied.In the petition under scrutiny, it is contended belatedly that A’ Prime and Sugarland are two separate and distinct juridical entities. However, aside from such a bare allegation, petitioner presented no supporting evidence and the Court cannot, of course, act thereupon without any legal basis.The Court cannot uphold and give weight to private respondent’s resignation letter (Annex "D") which appears to have been written and submitted at the instance of petitioner. Its form is of the company’s and its wordings are more of a waiver and quitclaim. Moreover, the supposed resignation was not acknowledged before a notary public. Petitioner’s failure to deny that Sugarland is its sister company and that petitioner absorbed Sugarland’s security contract and security personnel assumes overriding significance over the resignation theorized upon, evincing petitioner’s design to ignore or violate labor laws through the use of the veil of corporate personality. The Court cannot sanction the practice of some companies which, shortly after a worker has become a regular employee, effects 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.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 private 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.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.On the issue of whether the dismissal of private respondent was unjust and illegal, the Court rules in the affirmative. Subject letter of August 1, 1988 for the dismissal of private respondent from his employment stated:

"x x xDear Mr. Moreno,You were hired by this agency as security guard on a six -month probationary appointment on 30 January 1988.Much as we would like to retain you, it is unfortunate that you were not able to live up with the standard expected of you as a security guard.In line with this and pursuant to paragraph 6 of said Probationary Appointment, which you have signed on 30 January 1988, we are constrained to terminate your services with us for cause effective this date.We hope you understand our position on this regard.

Very truly yours,........................(SGD.) REYNALDO M. ARDINAPresident"

The dismissal of private respondent was presumably based on the results of his behavioral and neuropsychological tests and on his violation of a company rule on sleeping on post. With respect to the behavioral and neuropsychological tests, the Court agrees with NLRC’s assessment, to wit:

"Complainant’s result of his behavioral research and neuropsychological test to our mind, is of no moment, considering that the said test appeared to have been conveniently contrived to be conducted, and the result produced on the very day of his dismissal, in question. Were respondent-appellant really sincere in its motive of fully screening its employees before they could be regularized it should have done so, prior to complainant’s hiring or even after the commission of complainant’s infractions of the company rules adverted to by appellant way back

in March 1988, when complainant was only about two (2) months on probation. But that is not the case herein.Moreover, We have observed a discrepancy in the results of the test for while in the first page of the Evaluation Report, in question, complainant was ruled as:

‘Steadiness and Endurance under pressure - Average’the summary on page thereof, by way of interpretation of such rating, states:

‘Under pressure, he needs emotional support.’It would not be farfetched for us therefore to surmise that the evaluator’s mind was already preconditioned towards buttressing respondent’s intent of terminating complainant’s employment, considering that the same, to reiterate, was issued on the very day of the dismissal, in question."

So also, private respondent’s alleged violations of sleeping on post, and quarrelling with a co-worker, may not be proper grounds for dismissal, as the same were first infractions. Circular No. I dated March 16, 1983 of A’ Prime Security Services, Inc., governing discipline, suspension and separation from the service of security guards, provides:

"SECTION VIII - SLEEPING ON POSTAny Security/Lady guard who is found sleeping while on post shall be punished as follows:

1st Offense........- Warning2nd Offense.......- 30 days suspension without pay3rd Offense........- Dismissal

SECTION IX - CHALLENGING A POSTED SECURITY/LADY GUARD AND SUPERIORSAny Security/Lady guard who challenges, assaults, provokes and insults an officially posted Security/Lady guard shall be punished:

1st Offense - One (1) month suspension2nd Offense - Dismissal"

As the infractions of Sections VIII and IX of Circular No. 1 by private respondent were first offenses, they were not punishable by dismissal. They were not valid grounds for terminating the employment of private respondent.What is more, as found by the NLRC, the private respondent was not given a chance to contest his dismissal. He was deprived of an opportunity to be heard.Premises studiedly viewed in correct perspective, the Court is of the irresistible finding and conclusion that the dismissal of private respondent, a regular employee, was sans any just, legal and valid basis.WHEREFORE, the petition is DISMISSED; and the Decision, dated April 20, 1992, and Resolution, dated June 25, 1992, of the National Labor Relations Commission in NLRC NCR Case No. 00-02-01038-89, AFFIRMED. No pronouncement as to costs.SO ORDERED.Melo, (Chairman), Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.2/3/00 9:20 AM

I. Termination and SalaryCase(s):

International Catholic Migration Commission vs. NLRC., 169 SCRA 508G.R. No. 72222 January 30, 1989INTERNATIONAL CATHOLIC MIGRATION COMMISSION, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and BERNADETTE GALANG, respondents. FERNAN, C.J.:The issue to be resolved in the instant case is whether or not an employee who was terminated during the probationary period of her employment is entitled to her salary for the unexpired portion of her six-month probationary employment.The facts of the case are undisputed. Petitioner International Catholic Migration Commission (ICMC), a non-profit organization dedicated to refugee service at the Philippine Refugee Processing Center in Morong, Bataan engaged the services of private respondent

Bernadette Galang on January 24, 1983 as a probationary cultural orientation teacher with a monthly salary of P2,000.00. Three (3) months thereafter, or on April 22, 1983, private respondent was informed, orally and in writing, that her services were being terminated for her failure to meet the prescribed standards of petitioner as reflected in the performance evaluation of her supervisors during the teacher evaluation program she underwent along with other newly-hired personnel. Despite her termination, records show that private respondent did not leave the ICMC refugee camp at Morong, Bataan, but instead stayed thereat for a few days before leaving for Manila, during which time, she was observed by petitioner to be allegedly acting strangely. On July 24, 1983, private respondent returned to Morong, Bataan on board the service bus of petitioner to accomplish the clearance requirements. In the evening of that same day, she was found at the Freedom Park of Morong wet and shivering from the rain and acting bizarrely. She was then taken to petitioner's hospital where she was given the necessary medical attention. Two (2) days later, or on July 26, 1983, she was taken to her residence in Manila aboard petitioner's service bus. Thru a letter, her father expressed appreciation to petitioner for taking care of her daughter. On that same day, her father received, on her behalf, the proportionate amount of her 13th month pay and the equivalent of her two week pay. On August 22, 1983, private respondent filed a complaint 1 for illegal dismissal, unfair labor practice and unpaid wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral damages. On October 8, 1983, after the parties submitted their respective position papers and other pleadings, Labor Arbiter Pelagio A. Carpio rendered his decision dismissing the complaint for illegal dismissal as well as the complaint for moral and exemplary damages but ordering the petitioner to pay private respondent the sum of P6,000.00 as payment for the last three (3) months of the agreed employment period pursuant to her verbal contract of employment. 2

Both parties appealed the decision to the National Labor Relations Commission. In her appeal, private respondent contended that her dismissal was illegal considering that it was effected without valid cause. On the other hand, petitioner countered that private respondent who was employed for a probationary period of three (3) months could not rightfully be awarded P6,000.00 because her services were terminated for failure to qualify as a regular employee in accordance with the reasonable standards prescribed by her employer.On August 22, 1985, the NLRC, by a majority vote of Commissioners Guillermo C. Medina and Gabriel M. Gatchalian, sustained the decision of the Labor Arbiter and thus dismissed both appeals for lack of merit. Commissioner Miguel Varela, on the other hand, dissented and voted for the reversal of the Labor Arbiter's decision for lack of legal basis considering that the termination of services of complainant, now private respondent, was effected during her probationary period on valid grounds made known to her. 3

Dissatisfied, petitioner filed the instant petition. Petitioner maintains that private respondent is not entitled to the award of salary for the unexpired three-month portion of the probationary period since her services were terminated during such period when she failed to qualify as a regular employee in accordance with the reasonable standards prescribed by petitioner; that having been terminated on valid grounds during her probationary period, or specifically on April 24, 1983, petitioner is not liable to private respondent for services not rendered during the unexpired three-month period, otherwise, unjust enrichment of her part would result; that under Article 282 (now Article 281) of the Labor Code, if the employer finds that the probationary employees does not meet the standards of employment set for the position, the probationary employee may be terminated at any time within the six-month period, without need of exhausting raid entire six-month term. 4 The Solicitor General, on the other hand, contends that a probationary employment for six (6) months, as in the case of herein private respondent, is an employment for a definite period of time and, as such, the employer is duty-bound to allow the probationary employee to work until the termination of the probationary employment before her re- employment could be refused; that when petitioner disrupted the probationary employment of private respondent, without giving her the opportunity to improve her method of instruction within the said period, it held itself liable to pay her salary for the unexpired portion of such employment by way of damages pursuant to the general provisions of civil law that he who in any manner contravenes the terms of his obligation

without any valid cause shall be liable for damages; 5 that, as held in Madrigal v. Ogilvie, et al, 6 the damages so awarded are equivalent to her salary for the unexpired portion of her employment for a fixed period. 7 We find for petitioner. There is justifiable basis for the reversal of public respondent's award of salary for the unexpired three-month portion of private respondent's six-month probationary employment in the light of its express finding that there was no illegal dismissal. There is no dispute that private respondent was terminated during her probationary period of employment for failure to qualify as a regular member of petitioner's teaching staff in accordance with its reasonable standards. Records show that private respondent was found by petitioner to be deficient in classroom management, teacher-student relationship and teaching techniques. 8 Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee specifically recognized under Article 282 (now Article 281) of the Labor Code which provides thus:

ART. 281. Probationary employment. — Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employer who has been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employer in accordance with reasonable standard made known by the employer to the employer at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (Emphasis supplied.)

It must be noted that notwithstanding the finding of legality of the termination of private respondent, public respondent justified the award of salary for the unexpired portion of the probationary employment on the ground that a probationary employment for six (6) months is an employment for a "definite period" which requires the employer to exhaust the entire probationary period to give the employee the opportunity to meet the required standards. The legal basis of public respondent is erroneous. A probationary employee, as understood under Article 282 (now Article 281) of the Labor Code, is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. 9 The word "probationary", as used to describe the period of employment, implies the purpose of the term or period, but not its length. 10 Being in the nature of a "trial period" 11 the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period. While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer, that he has the qualifications to meet the reasonable standards for permanent employment. It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, it is within the exercise of the right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. The equality of right that exists between the employer and the employee as to the nature of the probationary employment was aptly emphasized by this Court in Grand Motor Parts Corporation v. Minister of Labor, et al., 130 SCRA 436 (1984), citing the 1939 case of Pampanga Bus. Co., Inc. v. Pambusco Employees Union, Inc. 68 Phil. 541, thus:

The right of a laborer to sell his labor to such persons as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution. If the employer can compel the employee to work against the latter's will, this is servitude. If the employee can compel the employer to give him work against the employer's will, this is oppression.

As the law now stands, Article 281 of the Labor Code gives ample authority to the employer to terminate a probationary employee 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. There is nothing under Article 281 of the Labor Code that would preclude the employer from extending a regular or a permanent appointment to an employee once the employer finds that the employee is qualified for regular

employment even before the expiration of the probationary period. Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, Article 281 of the Labor Code does not likewise preclude the employer from terminating the probationary employment on justifiable causes as in the instant case. We find unmeritorious, therefore, public respondents argument that the security of tenure of probationary employees within the period of their probation, as in the case of herein private respondent, justified the award of salary for the unexpired portion of her probationary employment. The termination of private respondent predicated on a just cause negates the application in this case of the pronouncement in the case of Biboso v. Victories Milling Co., Inc., 12 on the right of security of tenure of probationary employees. Upon inquiry by the then Ministry of Labor and Employment as a consequence of the illegal dismissal case filed by private respondent before it, docketed as Case No. NLRC NCR-8-3786-83, it was found that there was no illegal dismissal involved in the case, hence, the circumvention of the rights of the probationary employees sought to be regulated as pointed out in Biboso v. Victorias Milling Co., Inc., 13 is wanting. There was no showing, as borne out by the records, that there was circumvention of the rights of private respondent when she was informed of her termination. Her dismissal does not appear to us as arbitrary, fanciful or whimsical. Private respondent was duly notified, orally and in writing, that her services as cultural orientation teacher were terminated for failure to meet the prescribed standards of petitioner as reflected in the performance evaluation conducted by her supervisors during the teacher evaluating program. The dissatisfaction of petitioner over the performance of private respondent in this regard is a legitimate exercise of its prerogative to select whom to hire or refuse employment for the success of its program or undertaking. More importantly, private respondent failed to show that there was unlawful discrimination in the dismissal. It was thus a grave abuse of discretion on the part of public respondent to order petitioner to pay private respondent her salary for the unexpired three-month portion of her six-month probationary employment when she was validly terminated during her probationary employment. To sanction such action would not only be unjust, but oppressive on the part of the employer as emphasized in Pampanga Bus Co., Inc., v. Pambusco Employer Union, Inc. 14 WHEREFORE, in view of the foregoing, the petition is GRANTED. The Resolution of the National Labor Relations Commission dated August 22, 1985, is hereby REVERSED and SET ASIDE insofar as it ordered petitioner to pay private respondent her P6,000.00 salary for the unexpired portion of her six-month probationary employment. No cost. SO ORDERED. Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

Orient Express Placement Philippines vs. NLRC, 273 SCRA 256ORIENT EXPRESS PLACEMENT PHILIPPINES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION and ANTONIO F. FLORES, respondents.D E C I S I O NBELLOSILLO, J.:ANTONIO F. FLORES was hired as crane operator with a monthly salary of US$500.00 (SR1,400) for one (1) year, subject to a 3-month probationary period, by Orient Express Placement Philippines (ORIENT EXPRESS) in behalf of its foreign principal Nadrico Saudi Limited (NADRICO). However, after only one (1) month and five (5) days in Saudi Arabia, Flores was repatriated to the Philippines. Consequently, he filed a complaint with the Philippine Overseas Employment Administration (POEA) for having been terminated from work for no valid reason. ORIENT EXPRESS and NADRICO countered that Flores was terminated for poor job performance as shown in his Performance Evaluation Sheet dated 4 May 1991 and for his uncooperative work attitude.On 14 July 1992 the POEA rendered a decision in favor of complainant holding that when the ground invoked for the dismissal of an employee was incompetency or poor job performance it must be shown that the reasonable standards of work prescribed by the employer were made known to the employee and that the latter failed to conform to such standards. In the case of respondent Flores, it was observed that neither ORIENT EXPRESS nor NADRICO pointed out the reasonable standards of work required of Flores by which his incompetency was adjudged; much less did they specify how the latter failed to live up to such reasonable standards. Hence, his dismissal was unwarranted. As a consequence, ORIENT EXPRESS and NADRICO were ordered jointly and severally to pay respondent Antonio F. Flores the sum of US$5,416.66 or its peso equivalent representing salaries for the unexpired portion of the contract.

The National Labor Relations Commission (NLRC) affirmed the POEA decision on appeal. In addition, it ruled that the designation of Flores as floorman instead of crane operator for which he was hired violated his employment contract. The NLRC concluded that since Flores never worked as crane operator, his foreign employer could not have observed and assessed his performance as such and then come up with a performance evaluation sheet, especially considering his consistent claim that he was made to work as floorman instead. A motion for reconsideration filed by ORIENT EXPRESS and NADRICO was subsequently denied.ORIENT EXPRESS alone instituted this petition. It imputes grave abuse of discretion against the NLRC in concluding that respondent Flores was never assigned as crane operator and for ruling that poor job performance and uncooperative work attitude did not justify his dismissal.With respect to the factual issue, we agree with petitioner that the POEA and the NLRC overlooked the fact that private respondent admitted that he was able to work as crane operator as clearly and indubitably shown in his Affidavit of 1 August 1991. Erroneous conclusions of the NLRC cannot be upheld by this Court. However, we disagree with petitioner's conclusion that private respondent was validly dismissed for poor job performance and uncooperative work attitude. Hence, we deny the petition.Under Art. 281 of the Labor Code, the services of an employee hired on a probationary basis may be terminated when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. However, the Court cannot sustain his dismissal on this ground because petitioner failed to specify the reasonable standards by which private respondent's alleged poor performance was evaluated, much less to prove that such standards were made known to him at the time of his recruitment in Manila. Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with NADRICO ever mentioned that he must first take and pass a Crane Operators' License Examination in Saudi Arabia before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman pending release of the results of the examination or in the event that he failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month after his hiring to determine whether the company was amenable to continuing with his employment. Hence, respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to commence upon his arrival at the work-site and to terminate at the end of one (1) year. No other condition was laid out except that he was to be on probation for three (3) months.As aforesaid, no standard whatsoever by which such probationary period could be hurdled was specified and made known to him. Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein. Precisely, implicit in Art. 281 of the Code is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement , as correctly suggested by the POEA. Obviously, such an essential requirement was not met by petitioner, even assuming that Flores' alleged unsatisfactory performance was true. Besides, unsatisfactory performance is not one of the just causes for dismissal under the Labor Code.Petitioner also cites private respondent's alleged uncooperative work attitude as another compelling ground for his termination. It contends that private respondent was only willing to do his specific job and refused to help out as floorman when asked to do so. When it is purely a matter of "helping out" co-employees in urgent need of help, uncooperative work attitude may be worth discussing as possible ground for some kind of disciplinary action against the employee. However, such a discussion would be essentially academic in the case at bench where private respondent was not asked merely to “help out”. As borne out by private respondent’s allegations, which were not disputed by petitioner, from the moment of his arrival at the work-site in Saudi Arabia he was immediately assigned as floorman and not as crane operator, which was his job specification, on the flimsy excuse that a floorman, not a crane operator, was more needed at the work-site. It was only because private respondent was bold enough to resist and insist on his proper designation that his foreign supervisors grudgingly relented. However in obvious retaliation to such perceived “uncooperative work attitude,” private respondent was assigned to work at unholy hours or the so-called “graveyard shift,” i.e., from twelve o’clock midnight to twelve o’clock noon. He was not familiarized with nor given helpful instructions in the operation of relatively modern cranes. Instead, after subjecting him to a supposed performance evaluation wherein his performance and work attitude were allegedly found wanting, private respondent was again designated as floorman, albeit with the salary of a crane operator. A few days later he was dismissed and repatriated to the Philippines. Obviously, this Court cannot

accept as a justifiable ground for his termination his alleged uncooperative work attitude. On the contrary, we are constrained to sustain the POEA and the NLRC in their unanimous conclusion that private respondent was indeed dismissed illegally.WHEREFORE, the assailed Decision and Resolution of the National Labor Relations Commission of 29 December 1992 and 26 April 1993, respectively, declaring that private respondent Antonio F. Flores was illegally dismissed and awarding to him Five Thousand Four Hundred Sixteen Dollars and Sixty-Six Cents (US$5,416.66) or its peso equivalent representing salaries for the unexpired portion of his overseas employment contract, are AFFIRMED. Costs against petitioner Orient Express Placement Philippines. SO ORDERED.Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.Padilla, (Chairman), J., on leave.

J. Rule on Private School TeachersCase(s):

Chiang Kai Sheck College vs. CA, 437 SCRA 171CHIANG KAI SHEK COLLEGE, and CHIEN YIN SHAO, petitioners, vs. HON. COURT OF APPEALS; HON. NATIONAL LABOR RELATIONS COMMISSION; HON. COMMISSIONER VICTORIANO R. CALAYLAY, HON. PRESIDING COMMISSIONER RAUL T. AQUINO, and HON. COMMISSIONER ANGELITA A. GACUTAN; and MS. DIANA P. BELO, respondents.D E C I S I O NDAVIDE, JR., C.J.:Assailed in this petition is the decision of 12 October 2001, as well as the resolution of 11 April 2002, of the Court Appeals in CA-G.R. SP No. 59996, which affirmed the decision of 29 February 2000 of the National Labor Relations Commission (NLRC) declaring that Diana P. Belo was illegally dismissed as a teacher of petitioner Chiang Kai Shek College (CKSC).The controversy began on 8 June 1992, when Ms. Belo, a teacher of CKSC since 1977, applied for a leave of absence for the school year 1992-1993 because her children of tender age had no yaya to take care of them. The then principal, Mrs. Joan Sy Cotio, approved her application. However, on 15 June 1992, Ms. Belo received a letter dated 9 June 1992 of Mr. Chien Yin Shao, President of CKSC, informing her of the school’s existing policy; thus:Regarding your letter of request for leave of absence dated June 8, 1992, we would like to inform you of the existing policy of our school:

(1) We could not assure you of any teaching load should you decide to return in the future.(2) Only teachers in service may enjoy the privilege and benefits provided by our school. Hence, your

children are no longer entitled to free tuition starting school year 1992-1993.Ms. Belo, nonetheless, took her leave of absence. On 8 July 1992, she learned that Laurence, one of her three children studying at the CKSC, was sent out of the examination room because his tuition fees were not paid. This embarrassing incident impelled Ms. Belo to pay, allegedly under protest, all the school fees of her children.In May 1993, after her one-year leave of absence, Ms. Belo presented herself to Ms. Cotio and signified her readiness to teach for the incoming school year 1993-1994. She was, however, denied and not accepted by Ms. Cotio. She then relayed the denial to Mr. Chien on 17 May 1993. On 21 July 1993, she received the reply of Mr. Chien dated 1 July 1993 informing her that her confirmation to teach was filed late and that there was no available teaching load for her because as early as April 21 of that year, the school had already hired non-permanent teachers.Adversely affected by the development, Ms. Belo filed with the Labor Arbitration Office a complaint for illegal dismissal; non-payment of salaries, 13th month pay, living allowance, teacher's day pay; loss of income; and moral damages.In his decision of 18 October 1995, Labor Arbiter Donato G. Quinto, Jr., dismissed the complaint, reasoning that Ms. Belo was not dismissed but that there was simply no available teaching load for her. When in May 1993 she signified her intention to teach, the school had already acted on the applications or re-applications to teach of probationary teachers. The school’s policies, which were articulated in Mr. Chien’s letter of 9 June 1992 to Ms. Belo, were management prerogatives which did not amount to her dismissal. Said policies were also the consequences of her leave of absence and were not even questioned by her. The Labor Arbiter thus offered a

Solomonic solution by directing the petitioners to give her a teaching load in the ensuing year 1996-1997 and the succeeding years without loss of seniority rights.On appeal by the private respondent, the NLRC reversed the decision of the Labor Arbiter. It considered as misplaced the Labor Arbiter’s utter reliance on Mr. Chien’s letter to Ms. Belo enunciating the questioned school policies. It reasoned that if the school policy was to extend free tuition fees to children of teachers in school, then the petitioners must have considered her “already not in school or summarily dismissed or separated the very moment [she] applied for leave,” for, otherwise, her children would have been granted that privilege. Thus, it directed the petitioners to immediately reinstate Ms. Belo to her former position with full back wages from the time of her dismissal up to her actual reinstatement. It, however, dismissed Ms. Belo's prayer for moral and exemplary damages and attorney's fees for lack of evidence that the petitioners acted in bad faith and malice.Their motion for reconsideration having been denied, the petitioners filed a petition for certiorari with the Court of Appeals contending that the NLRC gravely abused its discretion amounting to lack of jurisdiction in (a) overturning the factual determination of the Labor Arbiter despite the fact that Ms. Belo stated in her Notice of Appeal that she was appealing only on a pure question of law; (b) holding that Ms. Belo was constructively dismissed by the petitioners despite the uncontroverted evidence that she was not illegally dismissed; and (c) granting Ms. Belo monetary awards.On 12 October 2001, the Court of Appeals found that far from abusing its discretion, the NLRC acted correctly when it ascertained that Ms. Belo was constructively dismissed. It declared as illegal, for being violative of Ms. Belo’s right to security of tenure, the school policy that a teacher who goes on leave cannot be assured of a teaching load. The school should have set aside a teaching load for her after the expiration of her leave of absence. It would have been a different story, one indeed ripe for termination of her employment, had Ms. Belo failed to report for work. As for the school’s contention that the NLRC was barred from resolving factual issues because of Ms. Belo's statement that she was appealing the case on a pure question of law, the Court of Appeals declared that such statement was a simple mistake in terminology, which is insufficient to deny an employee of her rights under the law.In its resolution dated 11 April 2002, the Court of Appeals denied the motion for reconsideration for lack of merit. Hence, on 11 June 2002, petitioner CKSC and its president Mr. Chien filed the present petition. They claim that the Court of Appeals erred in affirming the NLRC decision which reversed the factual findings of the Labor Arbiter even if the said findings were amply supported by clear and uncontroverted evidence and had already attained finality, as Ms. Belo had appealed merely on a question of law. The Court of Appeals also erred in upholding the NLRC decision which failed to point out specifically the alleged particular portions of the records of the case, parties’ respective position papers, and pleadings, much less particular testimonial and documentary evidence, that warrant the patently erroneous and baseless conclusion that there was a “clear case of constructive dismissal.” The NLRC decision is in complete violation of Section 14, Article VIII of the Constitution, which provides: “No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the laws on which it is based.” Likewise, the Court of Appeals has not only completely and arbitrarily ignored and disregarded the facts and issues raised as an issue before it, but also decided on the illegality of the school’s policy, which was never raised before it or in any of the forums below. Anent the free tuition fee benefit extended to children of teachers in service in petitioner school, the same is a privilege granted not by law, but voluntarily by the said school. Hence, the petitioner school could determine the conditions under which said privilege may be enjoyed, such as, that only teachers in actual service can enjoy the privilege.Amidst the convolution of issues proffered by the petitioners, the only issue that needs to be determined and on which hinges the resolution of the other issues is whether the Court of Appeals erred in affirming the NLRC decision that Ms. Belo was constructively, nay, illegally dismissed and is, therefore, entitled to reinstatement and back wages.It must be noted at the outset that Ms. Belo had been a full-time teacher in petitioner CKSC continuously for fifteen years or since 1977 until she took a leave of absence for the school year 1992-1993. Under the Manual of Regulations for Private Schools, for a private school teacher to acquire a permanent status of employment and, therefore, be entitled to a security of tenure, the following requisites must concur: (a) the teacher is a full-time teacher; (b) the teacher must have rendered three consecutive years of service; and (c) such service must have been satisfactory.

Since Ms. Belo has measured up to these standards, she therefore enjoys security of tenure. The fundamental guarantees of security of tenure and due process dictate that no worker shall be dismissed except for just and authorized cause provided by law and after due notice and hearing.We agree with the Court of Appeals that the NLRC did not commit any grave abuse of discretion in finding that Ms. Belo was constructively dismissed when the petitioners, in implementing their policies, effectively barred her from teaching for the school year 1993-1994. The three policies are (1) the non-assurance of a teaching load to a teacher who took a leave of absence; (2) the hiring of non-permanent teachers in April to whom teaching loads were already assigned when Ms. Belo signified in May 1993 her intention to teach; and (3) the non-applicability to children of teachers on leave of the free tuition fee benefits extended to children of teachers in service.Case law defines constructive dismissal as a cessation from work because continued employment is rendered impossible, unreasonable, or unlikely; when there is a demotion in rank or a diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.When in the school year 1992-1993, the petitioners already applied to Ms. Belo’s children the policy of extending free tuition fee benefits only to children of teachers in service, Ms. Belo was clearly discriminated by them. True, the policy was made known to Ms. Belo in a letter dated 9 June 1992, but, this only additionally and succinctly reinforced the clear case of discrimination. Notably, petitioners’ statements of policies dated 13 March 1992 for the school year 1992-1993 did not include that policy; thus:To : All Teachers and Staff of Chiang Kai Shek CollegeFrom : The PresidentPursuant to laws, rules and regulations promulgated by the proper government authorities of the Philippines, the following procedure are hereby issued for proper compliance of all concerned:1. All teachers and staff who have rendered satisfactory service for a period of more than three (3) full consecutive years (e.g. those who started working in June, 1988 or before) are considered permanent employees and therefore need not re-apply for the forthcoming school year 1992-1993.2. However, should any teacher or staff of permanent status wish to resign or to retire after this school year 1991-1992, he/she must file his/her written resignation or retirement application on or before March 28, 1992, so that the school will have sufficient time to make the necessary adjustments. Failure to file formal application on the part of the permanent employee shall be construed as consent to work for another school year.3. All probationary employees (e.g. those who started working after June, 1988) who wish to continue their services in our school shall re-apply. Reapplications must be submitted on or before March 28, 1992. Failure to submit reapplication shall be construed as not interested to work for Chiang Kai Shek College in the coming school year 1992-1993.4. All reapplications shall be acted upon and the decision of the administration will be conveyed to the employees concerned on or before April 21, 1992. It can be argued that the extension of free tuition fees to children of teachers in service was an informal policy or custom. If it were so, there would have been no need to include this policy in the school’s written statement of policies dated 12 March 1993, which reads:To : All Teachers and Staff of Chiang Kai Shek CollegeFrom : The Office of the PresidentPursuant to laws, rules and regulations promulgated by the proper government authorities of the Philippines, the following procedure are hereby issued for proper compliance of all concerned:1. All teachers and staff who have rendered satisfactory service for a period of more than three (3) full consecutive years (e.g. those who started working in June, 1989 or before) are considered permanent employees and therefore need not re-apply for the forthcoming school year 1993-1994.2. However, should any teacher or staff of permanent status wish to resign, to retire, or to take a leave of absence after this school year 1992-1993, he/she must file his/her written application on or before March 27, 1993, so that the school will have sufficient time to make the necessary adjustments. Failure to file formal application on the part of the permanent employee shall be construed as consent to work for another school year.In accordance with our school policy, employees not in service are not entitled to any benefit extended by our school.3. All probationary employees (e.g. those who started working after June 1989) who wish to continue their services in our school shall re-apply. Reapplications must be submitted on or before March 27, 1993. Failure to submit

reapplication shall be construed as not interested to work for Chiang Kai Shek College in the coming school year 1993-1994.4. All reapplications shall be acted upon and the decision of the administration will be conveyed to the employees concerned on or before April 21, 1993.A cursory analysis of the petitioners’ statements of policies dated 13 March 1992 and 12 March 1993 reveals that the lists of policies are essentially the same. Both are addressed to all teachers and staff of petitioner school. However, the policy “that employees not in service are not entitled to any benefit extended by the school” was not listed in the written statement of policies dated 13 March 1992. The policy made its maiden appearance in petitioners’ statement of policies one year after or on 12 March 1993. It was, therefore, the policy of extending free tuition fees to children of teachers of the school, whether on service or on leave, which existed as a matter of custom and practice. That is why the school modified the privilege in written form.Thus, when the petitioners retroactively applied the modified written policy to Ms. Belo, they considered her already a teacher not in service. The NLRC was correct when it reasoned as follows: “[I]f the school policy is to extend ‘free tuition fees’ to children of teachers in school, then respondents [petitioners herein] have considered [Ms. Belo] ‘already not in school or summarily dismissed or separated the very moment the latter applied for leave.’ Otherwise, [her] children should have been granted the ‘on-going’ privileges and benefits on free tuition fees, among others.”Ms. Belo was definitely singled out in the implementation of a future policy. This is grossly unfair and unjust. The petitioners did not take heed of the principle enshrined in our labor laws that policies should be adequately known to the employees and uniformly implemented to the body of employees as a whole and not in isolation.The continued employment of Ms. Belo was also rendered unlikely by the insistence of the petitioners in implementing the alleged policy that a teacher who goes on leave for one year is not assured of a teaching load. While this alleged policy was mentioned in Mr. Chien’s letter of 9 June 1992, it was not included in the school’s written statement of policies dated 13 March 1992. Hence, it was then a non-existent policy. When a non-existent policy is implemented and, in this case, only to Ms. Belo, it constitutes a clear case of discrimination.Even if the policy of non-assurance of a teaching load existed as a matter of practice and custom, it still glaringly contradicts petitioners’ written statement of policies dated 12 March 1993. Crystal clear therefrom is the fact that only permanent teachers who wished “to resign, to retire, or to take a leave of absence after the school year 1992-1993 must file their written application in March 1993.” Those who failed to file an application were expressly considered by the school as consenting to teach for the succeeding school year. Additionally, the petitioners did not require permanent teachers with satisfactory service to re-apply.It, therefore, blows our mind why the petitioners would require Ms. Belo, a permanent teacher since 1977 with a satisfactory service record, to signify her intention to teach in March 1993. Plainly, the petitioners violated their avowed policies. Since Ms. Belo was not retiring, resigning or filing another leave of absence after the school year 1992-1993, the petitioners should have considered her as consenting to teach for the incoming school year 1993-1994. In fact, they should not have required her to re-apply to teach. In accordance with the written statement of policies dated 12 March 1993, only probationary teachers are required by the petitioners to re-apply in March. Failure of probationary teachers to re-apply in March is an indication of their lack of interest to teach again at the school.Petitioners’ invocation of the third policy – that of giving teaching assignments to probationary teachers in April – to justify their refusal to provide Ms. Belo a teaching load is, therefore, a lame excuse that rings of untruth and dishonesty. Patently clear is the illegal manner by which the petitioners eased out Ms. Belo from the teaching corps.Thus, the Court of Appeals’ justification in upholding the NLRC ruling attains an added judicial and logical sting:When respondent Belo reported for work after the termination of her one-year leave of absence, it was obligatory for petitioner school to give her a teaching load. It was improper for petitioner school to farm out subjects of respondent Belo to provisionary [sic] teacher [sic]. The petitioner school should have assumed that respondent Belo was returning for work after the expiration of her leave. It would have been a different story, if after the start of classes, respondent Belo failed to report for work, then the school had a right to institute the necessary proceeding for the termination of her employment.Likewise, we do not find merit in petitioners’ assertion that the Court of Appeals should not have passed upon the illegality of the school policy of non-assurance of a teaching load, since the alleged illegality was never raised as an issue before the respondent court or in the forums below. As pointed out by the private respondent, that policy

was part of the defense invoked by the petitioners in the Arbiter level, in the NLRC, and in the respondent court to the charge of illegal dismissal; and, hence, it must necessarily be passed upon and scrutinized. Besides, that policy is intimately intertwined with the main issue of whether Ms. Belo was illegally dismissed.We reject petitioners’ contention that “the NLRC decision failed to point out specifically the alleged particular portions of the records of the case, parties’ respective position papers, and pleadings, much less particular testimonial and documentary evidence, that warrant the patently erroneous and baseless conclusion that there is a clear case of constructive dismissal.” In fact, the NLRC considered the same policies that the petitioners insist as their bases for maintaining that Ms. Belo was not dismissed. It seems that the petitioners could only be persuaded if the reviewing bodies unearthed a document that explicitly states that Ms. Belo was being constructively dismissed. This phantom paper chase unveils the unsubstantiated and contrived claim of the petitioners. They need only to look, for example, at the letter dated 9 June 1992 to Ms. Belo. The “policies” therein stated are discernibly non-existent, or if existing as a matter of custom they grossly transgressed petitioners’ formal written policies dated 13 March 1992 and 12 March 1993. Clear, therefore, is the fact that the written formal policies apply to all teachers and staff except Ms. Belo.Hence, there is no need to belabor the point that the NLRC decision clearly complied with the requirement expressed under Section 14, Article VIII of the Constitution. The decision speaks for itself.Suffice it is to say, this case is an exception to the general rule that the factual findings and conclusions of the Labor Arbiter are accorded weight and respect on appeal, and even finality. For one thing, the findings of the NLRC and the Labor Arbiter are contrary to each other; hence, the reviewing court may delve into the records and examine for itself the questioned findings.Further, we do not find merit in petitioners’ claim that Ms. Belo’s judicial admission that she was appealing on a “pure question of law” precludes the review and reversal of the Labor Arbiter’s factual finding that she was not illegally dismissed. Such claim is belied by the Notice of Appeal itself, wherein Ms. Belo declared that she was appealing the decision of the Labor Arbiter to the NLRC “on a pure question of law and for being contrary to law and jurisprudence applicable [to] the case and the evidence on record, and rendered with grave abuse of discretion.”Oddly, even the petitioners themselves maintain that to prove grave abuse of discretion, “it is necessary to bring out questions of fact.” Thus, in their own justification in resorting to both Rules 45 and 65 of the Rules of Court for the review and the nullification of the decision of the Court of Appeals, they contend:Clearly, petitioners’ remedy is two-fold – under Rule 45 and 65. Under Rule 45, only questions of law may be raised. Perhaps, respondents can now understand why petitioners have used both Rules 45 and 65. And this is simply because by invoking said two rules, they are not limited to raising questions of law, but they can raise both questions of fact and law. To show that grave abuse of discretion has been committed under Rule 65, it is necessary to bring out questions of fact, which was precisely done in the issues raised in page 2 of the petition….Indeed, Ms. Belo questioned the legality of her dismissal and the denial of her monetary claims, as well as her claim for damages. Both are essentially factual issues, since their determination necessitates an evaluation of proof and not only a consideration of the applicable statutory and case laws.Basic is the distinction between legal and factual issues. A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not call for an examination of probative value of the evidence presented, the truth or falsehood of facts being admitted. A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility of witnesses, the existence and relevancy of specific surrounding circumstances, as well as their relation to each other and to the whole, and the probability of the situation.More importantly, the Labor Arbiter’s conclusions are baseless, bereft of any rational basis, unsupported by evidence on record, and glaringly erroneous. The decisions of the NLRC and the Court of Appeals are the ones in harmony with the evidence on record.In sum, we are convinced that Ms. Belo was unceremoniously and constructively dismissed by the petitioners without just cause and without observing the twin requirements of due process, i.e., due notice and hearing, in violation of the tenets of equity and fair play. Ms. Belo is, therefore, entitled to reinstatement and back wages in accordance with the questioned Court of Appeals’ and NLRC decisions.WHEREFORE, the petition is DENIED. The decision of 12 October 2001 and resolution of 11 April 2002 of the Court of Appeals in CA-GR. SP No. 59996 are hereby AFFIRMED.

Costs against the petitioners.SO ORDERED.Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.Carpio, J. on official leave.

La Consolacion College vs. NLRC, 366 SCRA 226LA CONSOLACION COLLEGE, SR. ROSALINDA BAYLA, SR. CELIA BAYONA, REODITA MABAYAG, JUDITH VERDADERO and JOSE BAYOGUING, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and JOSE DE LA PEÑA, III, respondents.D E C I S I O NPARDO, J.:The case before the Court is a petition for certiorari with preliminary injunction temporary or restraining order to set aside the decision of the National Labor Relations Commission (NLRC) which held that respondent Jose de la Peña, III was illegally dismissed and ordered petitioner to pay him back wages and 13th month pay amounting to a total of P188,772.44.La Consolacion College (LCC) initially employed Jose de la Peña III as a CAT Commandant and YCAP Coordinator for school year 1975-1976. His employment as YCAP coordinator lasted until 29 September 1979, after which he resigned. He severed all ties with LCC when he left in 1980. Prior to his resignation and despite demands by LCC for him to submit a syllabi in YDT I, II, III, and CAT I containing course objectives, subject matter, content, concepts, skills, activities and evaluation not later than 12 November 1979, respondent de la Peña failed to comply.After his employment with LCC, respondent de la Peña sought and found employment in other establishments.However, on 2 December 1991, LCC received an application from respondent de la Peña. The applicant requested that he be considered for the positions of CAT Commander and YDT Instructor, positions he held for eleven (11) years prior to his resignation from LCC.In June 1992, LCC appointed respondent de la Peña as a classroom teacher in physical education and health, a position he never held during his previous employment with LCC.The written contract of employment between LCC and respondent de la Peña expressly provided that the employment was for one (1) academic year, that is, from June 1992 to March 1993. Respondent de la Peña accepted such condition.On 14 July 1992, petitioner Jose B. Bayoguing, Jr., a member of the academic team tasked to evaluate the performance of the school’s teachers, reminded respondent de la Peña in writing to comply with the requirements and standard operating procedure of the school, namely; timely submission of lesson plans, class records and other papers, attendance at regular monthly meetings, and informing the school of absences. Respondent de la Peña ignored the reminder without any valid reason, and continued to defy these requirements and procedures.On 27 November 1992, respondent de la Peña called an emergency meeting of faculty members. In said meeting, respondent de la Peña berated petitioner Bayoguing, shouted invectives, ridiculed and threatened Bayoguing with bodily harm. No untoward incident ensued as petitioner Bayoguing kept his composure. During the same faculty meeting, respondent de la Peña was physically restrained by his fellow teachers whenever he would charge the person of petitioner Bayoguing.On 08 February 1993, respondent de la Peña wrote petitioner Sis. Rosalinda Bayla, O.S.A., principal of High School, stating that he “would like to apply for reinstatement as a faculty member for SY 1993-1994.” In a letter dated 11 March 1993, the academic team composed of petitioners Erodita P. Madayag, Verdadero and Bayoguing informed respondent de la Peña of his unsatisfactory performance and advised him that the school would no longer hire him for the incoming school year. On 9 June 1993, respondent de la Peña filed with Regional Arbitration Branch No. VI, Bacolod City a complaint against LCC and/or Rosalinda Bayla, Sr. Celia Bayona, Erodita Mabayag, Judith Verdadero and Jose Bayoguing, for illegal dismissal, moral damages and exemplary damages. After submission of position papers, on 11 November 1994, Labor Arbiter Reynaldo J. Gumaltico rendered a decision dismissing the complaint, holding that at the time respondent de la Peña was dismissed, he had not attained regular status. The Labor Arbiter also found respondent de la Peña guilty of serious misconduct and gross disobedience which were just causes for termination of service.On appeal to the NLRC, on 31 January 1996, the NLRC rendered a resolution reversing the decision of the labor arbiter. The NLRC held that respondent de la Peña attained regular status at the time he was dismissed and that

LCC failed to prove the existence of just cause to warrant his dismissal. On 4 March 1996, LCC filed a motion for reconsideration of the NLRC decision; however, on 19 August 1996, the NLRC denied the motion.Hence, this petition.The basic issue raised is whether the NLRC committed palpable error amounting to grave abuse of discretion in ruling that respondent Jose de la Peña was a regular or permanent employee of La Consolacion College in a position in which he had not undergone the three (3) year probationary period provided in the manual of regulations for private schools.We reverse the NLRC decision having been issued in grave abuse of discretion.In the case at bar, there is a written contract defining the period of employment of respondent de la Peña.Clearly, the employment was not permanent but for a specified duration of one school year.In resolving the issue of whether or not respondent de la Peña was permanent employee of petitioner, it is the Manual of Regulations for Private Schools, not the Labor Code, which is applicable. This was settled in University of Sto. Tomas v. NLRC, where we ruled that for a private school teacher to acquire permanent status in employment the following requisites must concur: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three (3) consecutive years of service; and (3) such service must have been satisfactory.A school year begins in June of one calendar year and ends in March of the succeeding calendar year. The written contract of respondent de la Peña stated that he shall be employed by the LCC for the school year June 1992, up to March 1993, a fixed term of ten months. It is also important to note that respondent de la Peña was a new hire having previously resigned from the school and was holding the position of classroom teacher for BED for the first time. Respondent never denied the fact that he failed to comply with the requirements of the school, hence, his employment was not renewed. Neither did he attain permanent status. Clearly, respondent was not illegally dismissed.IN VIEW WHEREOF, the Court GRANTS the petition. The Court REVERSES and sets aside the decision of the National Labor Relations Commission dated 31 January 1996, in NLRC Case No. V-0044-93, and its resolution of August 19, 1996, and hereby dismisses the complaint for illegal dismissal for lack of basis.No costs.SO ORDERED. Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.