labrel

DIGEST POOL: Class VII LABOR RELATIONS

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LABOR RELATIONS

SINGER SEWING MACHINE VS DRILON

Gr. No. 91307, January 24, 1991

DE LEON VS NLRC

Gr. No. 70705, August 21, 1989

SORREDA VS CAMBRIDGE ELECTRONICS

CORPORATION

Gr. No. 172927, February 11, 2010

CAPULE VS NLRC

Gr. No. 90653, November 12, 1990

SERRANO VS ISETANN

Gr. No. 117040, January 27, 2000

ALU-TUCP VS NLRC AND NATIONAL STEEL CORP.

Gr. No. 109902, August 2, 1994

DE JESUS VS PNCC

Gr. No. 89990, March 20, 1990

TOMAS LAO CONSTRUCTION VS NLRC

Gr. No. 116781, September 5, 1997

MARAGUINOT VS NLRC

Gr. No. 120969, January 22, 1998

VISAYAN STEVEDORE TRANS. CO. VS CIR

Gr. No. L-21696, February 25, 1967

MERCADO VS NLRC

Gr. No. 79869, September 5, 1991

BRENT SCHOOL VS ZAMORA

Gr. No. L- 48494, February 5, 1990

MILLARES AND LAGDA VS NLRC

Gr. No. 110524, July 29, 2002

INTERNATIONAL CATHOLIC MIGRATION

COMMISSION VS NLRC

Gr. No. 72222, January 30, 1989

ROBINSON'S GALLERIA VS IR RANCHEZ

Gr. No. 177937, January 19, 2011

MARIWASA MANUFACTURING VS LEOGARDO

Gr. No. 74246, June 26, 1989

MITSUBISHI MOTORS VS CHRYSLER PHIL LABOR

UNION

Gr. No. 148738, June 29, 2004

Case Digest Class 7 LABOR RELATIONS

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SINGER SEWING MACHINE VS DRILON

Gr. No. 91307, January 24, 1991

Facts:

Union filed a petition for Direct Certification as

exclusive bargaining agent but this was opposed by

respondent employer on the ground that union members

are not employees but are independent contractors.

The Med-Arbiter found that there exists an ER-EE

relationship and granted the petition. Drilon as Sec. of

Labor affirmed on appeal.

Respondent maintains that there is no ER-EE

relationship under Art. 294 asserting that to prove

there exists an ER-EE relationship, they the union

members should "perform the most desirable and

necessary activities for the continuous and effective

operations of the business of the petitioner Company"

Issue:

Whether or not respondents contention is

correct.

Held:

No. Art 294 is not the yardstick for determining

the existence of an employment relationship because it

merely distinguishes between two kind s of employees.

Art. 294 does not apply where the existence of an

employment relationship is in dispute.

The nature of the relationship between a company and its

collecting agents depends on the circumstances of each

particular relationship. Not all collecting agents are

employees and neither are all collecting agents

independent contractors. The collectors could fall under

either category depending on the facts of each case.

DE LEON VS NLRC

Gr. No. 70705, August 21, 1989

Facts:

Petitioner Moises de Leon was employed by the

private respondent at the Maintenance Section of its

Engineering Department doing painting works on

company buildings and equipments as well as other odd

jobs relating to maintenance. After more than one year of

service to the company, petitioner requested private

respondent that he be included in the payroll of regular

worker instead of being paid through petty cash voucher.

In response to the request, respondent distillery company

dismissed petitioner de Leon. The latter demanded for his

reinstatement but it was repeatedly refused. For this

reason, Moises de Leon filed a complaint of Illegal

Dismissal, reinstatement and payment of back wages

before the Office of the Labor Arbiter.

Labor Arbiter Bienvenido Hernandez finds the

complaint meritorious and rendered a decision in favor of

Moises De Leon. It ruled that the dismissal was illegal and

orders respondent company to reinstate the petitioner

with full back wages and other benefits. The Labor Arbiter

concluded that the dismissal of the petitioner from

service to the company after it requested to be treated as

a regular employee is an attempt to circumvent the legal

obligations of the employer towards a regular employee

On appeal, NLRC reversed the decision of the

labor Arbiter was REVERSED by majority decision. Motion

for Reconsideration was denied.

The Solicitor General recommends that the

petition which seeks to annul and set aside (a) the

majority decision of the NLRC; and (b) the Resolution

denying the Motion for Reconsideration.

Petitioners Argument: The Commission erred

and gravely abused its discretion in reversing the decision

of L.A. the commission did not consider the fact that the

tasks performed included not only painting but

maintenance work necessary and desirable in the usual

business of the respondent. His dismissal violates the

Constitutional and statutory protection of labor.

Respondents Argument: Petitioner was hired

only to repaint a building specifically Mama Rosa building

which task of repainting is not part of their main business

and he was informed that his engagement on the task is

on casual basis.

Issue:

Whether or not respondent is a regular

employee hence the dismissal of the respondent by the

company is Illegal.

Held:

YES. Article 281 of the Labor Code defines

regular and casual employment as follows: Art. 281.

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


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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

The provision reinforces Constitutional mandate for

protection of labor, it manifests 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.

In the case at bar, the respondent company,

which is engaged in the business of manufacture and

distillery of wines and liquors, claims that petitioner was

contracted on a casual basis specifically to paint a certain

company building and that its completion rendered

petitioner's employment terminated. This may have been

true at the beginning, and had it been shown that

petitioner's activity was exclusively limited to painting

that certain building, respondent company's theory of

casual employment would have been worthy of

consideration.

However, during petitioner's period of

employment, the records reveal that the tasks assigned to

him included not only painting of company buildings,

equipment and tools but also cleaning and oiling

machines, even operating a drilling machine, and other

odd jobs assigned to him when he had no painting job.

It is not tenable to argue that the painting and

maintenance work of petitioner are not necessary in

respondent's business of manufacturing liquors and

wines, just as it cannot be said that only those who are

directly involved in the process of producing wines and

liquors may be considered as necessary employees.

Otherwise, there would have been no need for the regular

Maintenance Section of respondent company's

Engineering Department, manned by regular employees

like Emiliano Tanque Jr., whom petitioner often worked

with.

Furthermore, the petitioner performed his work

of painting and maintenance activities during his

employment in respondent's business which lasted for

more than one year, until early January, 1983 when he

demanded to be regularized and was subsequently

dismissed. Certainly, by this fact alone he is entitled by

law to be considered a regular employee. And considering

further that weeks after his dismissal, petitioner was

rehired by the company through a labor agency and was

returned to his post in the Maintenance Section and made

to perform the same activities that he used to do, it

cannot be denied that as activities as a regular painter

and maintenance man still exist.

The law overrides such conditions which are

prejudicial to the interest of the worker whose weak

bargaining position needs the support of the State. That

determines whether a certain employment is regular or

casual is not the will and word of the employer, to which

the desperate worker often accedes, much less the

procedure of hiring the employee or the manner of paying

his salary. It is the nature of the activities performed in

relation to the particular business or trade considering all

circumstances, and in some cases the length of time of its

performance and its continued existence.

DISPOSITION: WHEREFORE, the petition is

GRANTED. The assailed Decision and Resolution of the

National Labor Relations Commission are hereby annulled

and set aside. The Order of Labor arbiter Bienvenido S.

Hernandez dated April 6, 1984 is reinstated. Private

respondent is ordered to reinstate petitioner as a regular

maintenance man and to pay petitioner 1) backwages

equivalent to three years from January 16,1983, in

accordance with the Aluminum Wage Orders in effect for

the period covered, 2) ECOLA 3) 13th Month Pay, 4) and

other benefits under pertinent Collective Bargaining

Agreements, if any.

SORREDA VS CAMBRIDGE ELECTRONICS CORPORATION

Gr. No. 172927, February 11, 2010

Facts:

Petitioner was hired by respondent as a

technician for a period of 5 months at minimum

wage. Five weeks into the job, petitioner met an accident

in which his left arm was crushed by a machine and had to

be amputated.

Petitioner claimed that, shortly after his release

from the hospital, officers of respondent company called

him to a meeting with his common-law wife, father and

cousin. There he was assured a place in the company as a

regular employee for as long as the company existed and

as soon as he fully recovered from his injury.

After he recovered from his injury, petitioner

reported for work. Instead of giving him employment,

they made him sign a memorandum of resignation to


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formalize his separation from the company in the light of

the expiration of his five-month contract.

Petitioner filed in the Regional Arbitration

Branch of the NLRC a complaintfor illegal dismissal (later

changed to breach of contract).He claimed that

respondent failed to comply with the terms of the

contract of perpetual employment.

Respondent denied that it extended regular

employment to petitioner. Only words of encouragement

were offered but not perpetual employment. Moreover, it

assailed the labor arbiters jurisdiction over the case,

claiming a lack of causal connection between the alleged

breach of contract and their employer-employee

relationship.

LABOR ARBITER:

held that he had jurisdiction to hear and decide

the case as it involved the employer-employee

relationship of the contending parties.

that petitioner who had been employed on a

per-project basis became a regular employee by virtue of

the contract of perpetual employment. He stated that the

positive declaration of the witnesses (common-law wife,

father and cousin) present at the meeting and the parole

evidence rule was enough to support the petitioners

claim.

he ruled that petitioner was employed by

respondent for an indefinite period of employment (that

is, on regular status.) He ordered petitioners

reinstatement.

Respondent appealed to the NLRC and asked for

the reversal of the labor arbiters decision based on grave

abuse of discretion for assuming jurisdiction over the case.

NLRC- agreed with respondent. It found that petitioner

was not a regular employee; thus, he was neither illegally

dismissed nor entitled to reinstatement and back wages.

COURT OF APPEALS affirmed the decision of NLRC

Issue:

Whether or not the labor arbiter had the

jurisdiction to take cognizance thereof.

Held:

In Pioneer Concrete Philippines, Inc. v. Todaro, the

Court reiterated that where no employer-employee

relationship exists between the parties, and the Labor

Code or any labor statute or collective bargaining

agreement is not needed to resolve any issue raised by

them, it is the Regional Trial Court which has jurisdiction.

Thus it has been consistently held that the

determination of the existence of a contract as well as the

payment of damages is inherently civil in nature. A labor

arbiter may only take cognizance of a case and award

damages where the claim for such damages arises out of

an employer-employee relationship.

In this instance, petitioner was clearly a per-

project employee of private respondent, resulting in an

employer-employee relationship. Consequently, questions

or disputes arising out of this relationship fell under the

jurisdiction of the labor arbiter.

However, based on petitioners allegations in his

position paper, his cause of action was based on an alleged

second contract of employment separate and distinct from

the per-project employment contract. Thus, petitioner

insisted that there was a perfected contract of perpetual

employment and that respondent was liable to pay him

damages.

While there was an employer-employee

relationship between the parties under their five-month

per-project contract of employment, the present dispute is

neither rooted in the aforestated contract nor is it one

inherently linked to it. Petitioner insists on a right to be

employed again in respondent company and seeks a

determination of the existence of a new and separate

contract that established that right. As such, his case is

within the jurisdiction not of the labor arbiter but of the

regular courts. The NLRC and the CA were therefore

correct in ruling that the labor arbiter erroneously took

cognizance of the case.

While the Constitution recognizes the primacy of

labor, it also recognizes the critical role of private

enterprise in nation-building and the prerogatives of

management. A contract of perpetual employment

deprives management of its prerogative to decide whom

to hire, fire and promote, and renders inutile the basic

precepts of labor relations. While management may validly

waive it prerogatives, such waiver should not be contrary

to law, public order, public policy, morals or good customs.

An absolute and unqualified employment for life in the

mold of petitioners concept of perpetual employment is

contrary to public policy and good customs, as it unjustly

forbids the employer from terminating the services of an

employee despite the existence of a just or valid cause. It

likewise compels the employer to retain an employee

despite the attainment of the statutory retirement age,

even if the employee has became a non-performing

asset or, worse, a liability to the employer.

Moreover, aside from the self-serving claim of

petitioner, there was no concrete proof to establish the

existence of such agreement. Petitioner cannot validly

force respondent to enter into a permanent employment

contract with him. Such stance is contrary to the


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consensuality principle of contracts as well as to the

management prerogative of respondent company to

choose its employees.

CAPULE VS NLRC

Gr. No. 90653, November 12, 1990

SYLLABUS

1. LABOR LAW; LABOR RELATIONS; CASUAL EMPLOYEES,

WHEN CONSIDERED REGULAR; CASE AT BAR. The

Solicitor General opines that the cutting of the cogon

grass at the back portion of the building of private

respondents may be considered to be usually necessary or

desirable in the usual business or trade of

private Respondent. The Court disagrees. The usual

business or trade of private respondents is the

manufacture of cultured milk. The cutting of the cogon

grasses in the premises of its factory is hardly necessary or

desirable in the usual business of the private respondents.

Indeed, it is alien thereto. Thus, petitioners are casual

employees who cannot be considered regular employees

under the aforestated provision of the Labor Code.

Nevertheless, they may be considered regular employees

if they have rendered services for at least one (1) year.

When, as in this case, they were dismissed from their

employment before the expiration of the one-year period

they cannot lawfully claim that their dismissal was illegal.

Facts:

Private respondent company is engaged in the

manufacture of cultured milk which is sold under the

brand name "Yakult.

Petitioners were hired to cut cogon grass and

weeds at the back of the factory building used by private

respondents. They were not required to work on fixed

schedule and they worked on any day of the week on

their own discretion and convenience. The services of the

petitioners were terminated by the private respondent.

Thus, petitioners filed a complaint for illegal

dismissal with the National Labor Relations Commission

(NLRC). After the position papers of the parties were filed,

a decision was rendered by the labor arbiter on finding

the dismissal of the petitioners to be illegal and requiring

the private respondent to reinstate them immediately to

their former position with full backwages and without loss

of seniority rights. The private respondent appealed to

the NLRC. Commissioner Conrado B. Maglaya rendered a

decision setting aside the appealed decision and issuing a

new judgment ordering private respondent to pay

petitioners one (1) months pay each based on

humanitarian considerations.

Hence, the herein petition for certiorari where

petitioners allege that the public respondent NLRC

committed a grave abuse of discretion in rendering the

aforestated decision. Petitioners invoke the provision of

Article 4 of the Labor Code and of Article 1702 of the Civil

Code wherein all doubts should be resolved in favor of

labor.

Issue:

Whether or not casual or temporary employees

may be dismissed by the employer before the expiration

of the one-year period of employment. No!

Held:

The petition is devoid of merit.

Article 280 of the Labor Code provides as follows:

"Article 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.

The Solicitor General opines that the cutting of the

cogon grass at the back portion of the building of private

respondents may be considered to be usually necessary or

desirable in the usual business or trade of

private Respondent. The Court disagrees. The usual

business or trade of private respondents is the

manufacture of cultured milk. The cutting of the cogon

grasses in the premises of its factory is hardly necessary or

desirable in the usual business of the private respondents.

Indeed, it is alien thereto.


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Thus, petitioners are casual employees who

cannot be considered regular employees under the

aforestated provision of the Labor Code. Nevertheless,

they may be considered regular employees if they have

rendered services for at least one (1) year. When, as in

this case, they were dismissed from their employment

before the expiration of the one-year period they cannot

lawfully claim that their dismissal was illegal.

Indeed, private respondent had shown that the

services of the petitioners were found to be

unsatisfactory, so, their termination.

The petition is DISMISSED.

SERRANO VS ISETANN

Gr. No. 117040, January 27, 2000

Facts:

Ruben Serrano was the head of the security

checkers section of Isetann Department Store. He was

charged with the task of supervising security checkers in

their jobs (apprehending shoplifters and preventing

pilfirege of merchandise). On October 11, 1991, the

management sent him a letter immediately terminating

his services as security section head, effective on the

same day. The reason given by the management was

retrenchment;they had opted to hire an independent

security agency as a cost-cutting measure. Serrano filed a

complaint for ID, illegal layoff, ULP, underpayment of

wages and nonpayment of salary and OT pay with the LA.

The LA rendered a decision in favor of Serrano.

It stated that Isetann failed to establish that it had

retrenched its security division, that the petitioner was

not accorded due process, etc. and even stated that the

day after Serranos dismissal, Isetann employed a safety

and security supervisor with similar duties to that of the

former.

The NLRC on the other hand reversed the LA but

ordered Isetann to pay separation pay equivalent to one

month per year of service, unpaid salary, and others. It

held that the phase-out of the security section was a valid

exercise of management prerogative on the part

of Isetann, for which the NLRC cannot substitute its

judgment in the absence of bad faith or abuse of

discretion on the part of the latter; and that the security

and safety supervisors position was long in place prior to

Serranos separation from the company, or the phase-out

of the Security Section.

Issue:

Whether or not the petitioners dismissal was

illegal.

Held:

Valid, but without legal effect / ineffectual

payment of backwages, separation pay and other

monetary claims Not illegal. The Court held that the

dismissal was due to an authorized cause under Art. 283

of the Labor Code, i.e. redundancy. However, while an

authorized cause exists, Isetann failed to follow

the procedural requirement provided by Art. 283 of the

Code. For termination due to authorized causes, the

employer must give a written notice of termination to

the employee concerned and to the DOLE at least 30 days

prior to its effectivity. This is what Isetann failed to do.

The question now arises as to whether the failure of

Isetann to comply with the procedural requirements

renders the dismissal invalid, or, in the event that it is

valid, what the appropriate sanction or penalty must be

meted out.

Prior to the doctrine laid down in the decision

rendered in Wenphil Corp. vs. NLRC in 1989, the

termination of an employee, even for just cause but

without following the requisite procedure, renders such

dismissal illegal, and therefore null and void. In the

Wenphil doctrine, this was reversed; the said rule was

unjust to employers. Instead, the dismissal was held to be

still valid but the employer was sanctioned by way of

the payment of indemnity (damages), in that case, P1,

000. The amount of indemnity will depend on the

circumstances of each case, taking into account

the gravity of the offense committed by the employer.

Now, the Court once again examines the Wenphil

doctrine. Puno says that the effect of the Wenphil

doctrine was such that there has been a dismiss now,

pay later policy where the employers were able to

circumvent the procedural requisites of termination,

which is more convenient than the compliance with the

30-day notice. Panganiban said that the monetary

sanctions were too insignificant, niggardly, sometimes

even late. Both justices are of the opinion that the

deprivation of due process which must be accorded to the

employee renders the dismissal illegal. Puno quoted that

Legislative, Executive and Judicial proceedings that

deny due process do sounder the pain of nullity.

Panganiban stated that such denial of due process

renders decisions and proceedings void for lack of

jurisdiction.

The present ruling of the Court held that the

dismissal of the employee is merely ineffectual, not void.

The dismissal was upheld but it is ineffectual. The

sanction provided was the payment of backwages


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from the time of dismissal up to the decision of the court

finding just or authorized cause. This was thought to

balance the interests of both parties, recognizing the

employees right to notice and at the same time the right

of the employer to dismiss for any of the just and

authorized causes. The Court also responded to the

arguments of Justices Puno and Panganiban by stating

that the violation in the procedural requirement of

termination I snot a denial of the fundamental right to

due process. This is because of the following reasons:

1) The due process clause is a limitation on governmental

powers, inapplicable to the exercise of private power,

such as in this case.

The provision No person shall be deprived of life,

liberty and property without due process of law

pertains only to the State, as only it has the authority

to do the same.

2) The purpose of the notice and hearing under the Due

process clause is to provide an opportunity for the

employee to be heard before the power of the

organized society is brought upon the individual.

Under Art. 283, however, the purpose is to give him

time to prepare for the eventual loss of his job and for

DOLE to determine whether economic causes exist

to justify termination. It is not to give opportunity to

be heard there is no charge against the employee

under Art. 283

3) The employer cannot be expected to be an impartial

judge of his own cause.

4) Not all notice requirements are requisites of due

process. Some are simply a part of a procedure to be

followed before a right granted to party can be

exercised; others are an application of the Justinian

precept. Such is the case here. The failure of the

employer to observe a procedure for the termination

of employment which makes the termination

of employment merely ineffectual.

5) Art. 279 of the LC provides that only dismissal without

just or authorized cause renders such dismissal illegal.

To consider termination without observing procedural

requirements as also ID is to add another ground for

ID, thereby amending Art. 279.;Further,there is a

disparity in legal treatment, as employees who resign

without giving due notice are only liable for damages;

it does not make their resignation void.

In this case, the separation pay was a distinct

award from the payment of backwages as a way

of penalty. Petition was denied.

ALU-TUCP VS NLRC AND NATIONAL STEEL CORP.

Gr. No. 109902, August 2, 1994

Facts:

Petitioners were hired by respondent NSC in

connection with its Five Year Expansion Program. The said

program aims to expand the volume and increase the

kinds of production of respondent company. Thus, after

the completion of the project, petitioners were separated

from NSC's service.

Separate complaints for Unfair Labor Practice

were filed with the NLRC. NLRC consolidated the

complaints and after hearing, the Labor Arbiter declared

that petitioners were "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. Both parties appealed the decision

to the NLRC. 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).

NLRC 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.

Petitioner's appealed to the SC.

Issue:

Whether or not the NLRC is correct in finding

petitioners as "project employees". YES

Held:

Art. 280. Regular and Casual Employment

The provisions of the written agreement to the contrary


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.


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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)

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.

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.

Whichever 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.

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.

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.

DE JESUS VS PNCC

Gr. No. 89990, March 20, 1990

Facts:

Petitioner was a carpenter for the respondents

PNCP. While on duty, he vomited blood and was treated

at the company clinic after which he was sent home.

When he reported back in December, he was no longer

accepted and was informed by the General Manager of

the respondent that he had been replaced, after which he

sought reinstatement but he was rebuffed by the

company.

He instituted a complaint for initial pay first but

amended it and prayed for reinstatement for illegal

dismissal plus backwages and payment of legal benefits.

Private respondent presented petitioners 201-

file which disclosed that he had been hired as a

carpenter and among the terms and conditions of his

employment was that he was being employed only for

the period and specific work stated in his appointment,

and that as a project worker he was subject to the

provisions of Policy instructions No. 20, that his

separation was due to the completion of the project, and

that he had signed a clearance wherein he admitted

having received all remunerations due him.

Labor Arbiter dismissed the complaint. Petitioner

appealed but it was dismiss by NLRC on ground that the

appeal had been filed unseasonably. On reconsideration,

NLRC nevertheless affirmed LAs decision.

In support of this petition, the petitioner

attached thereto, among other things, certain "personnel

action forms" which showed that he was given

appointments for specific projects on several dates from

1974 to 1984 and that since January 15, 1978, he had

been a member of the CDP Employees Savings & Loan

Associations, and that, as a result, he has become a

regular, not a project, employee, who may be terminated

only for a lawful cause.

Issue:


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Whether or not the petitioner is a non-project

employee, therefore entitled to regular employment

having rendered service for more than ten years.

Held:

SC ruled in favor of petitioner.

Basis: Article 280 of the Labor Code:

Art. 280. Regular and Casual Employment. The


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 (sic) seasonal in nature and the


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 continue while such actually exists.

It is clear from the records that the petitioner is,

a non-project employee and is, hence, entitled to regular

employment having rendered service for more than ten

years. As such, he cannot be terminated unless for just

cause.

Without question, the petitioner, a carpenter,

performs work "necessary, or desirable" in the

construction business, the respondent corporation's field

of activity. The fact however that he had been involved in

project works will not alter his status because the law

requires a "specific project or undertaking the completion

or termination of which has been determined at the time

of the engagement" in order to make a project employee

a true project employee. Based on his employment

contract: Your herein Appointment Employment will be

co-terminus with the need of Structures [of North Luzon

Expressway (Stage) II] as it will necessitate personnel in

such number and duration contingent upon the progress

accomplishment from time to time. The company shall

determine the personnel and the number as the work

progresses.

we cannot say that the petitioner's

engagement has been pre-determined because the

duration of the work is "contingent upon the progress

accomplishment" and secondly, the company, under the

contract, is free to "determine the personnel and the

number as the work progresses." Clearly, the employment

is subject to no term but rather, a condition, that is,

"progress accomplishment." It cannot therefore be said to

be definite that will therefore exempt the respondent

company from the effects of Article 280.

Based therefore on the personnel action

forms,(Policy Instructions No. 20 of the Secretary of

Labor) submitted to this Court, the petitioner is either a

member of a work pool of workers, which Policy

Instructions No. 20 terms as "non-project employees," or

at the very least, a probationary worker who, after the

period of six months, has achieved a regular status.

As a regular employee, the petitioner could not

have been validly terminated by reason alone of the

completion of the project.

TOMAS LAO CONSTRUCTION VS NLRC

Gr. No. 116781, September 5, 1997

Facts:

Private respondents alternately worked for

petitioners Tomas Lao Corporation (TLC), Thomas and

James Developers (T&J) and LVM Construction

Corporation (LVM), altogether informally referred to as

the Lao Group of Companies, the three (3) entities

comprising a business conglomerate exclusively controlled

and managed by members of the Lao family. TLC, T&J and

LVM are engaged in the construction of public roads and

bridges. Under joint venture agreements they entered

into among each other, they would undertake their

projects either simultaneously or successively so that,

whenever necessary, they would lease tools and

equipment to one another. Each one would also allow

the utilization of their employees by the other

two (2). With this arrangement, workers were

transferred whenever necessary to on-going projects of

the same company or of the others, or were rehired after

the completion of the project or project phase to which

they were assigned. Soon after, however, TLC ceased its

operations while T&J and LVM stayed on.

Sometime in 1989 Andres Lao, Managing

Director of LVM and President of T&J issued a

memorandum requiring all workers and company

personnel to sign employment contract forms and

clearances which were issued on 1 July 1989 but

antedated 10 January 1989. These were to be used


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allegedly for audit purposes pursuant to a joint venture

agreement between LVM and T&J. To ensure compliance

with the directive, the company ordered the withholding

of the salary of any employee who refused to sign. Quite

notably, the contracts expressly described the

construction workers as project employees whose

employments were for a definite period, i.e., upon the

expiration of the contract period or the completion of the

project for which the workers was hired.

Except for Florencio Gomez all private

respondents refused to sign contending that this scheme

was designed by their employer to downgrade their status

from regular employees to mere project

employees. Resultantly, their salaries were

withheld. They were also required to explain why their

services should not be terminated for violating company

rules and warned that failure to satisfactorily explain

would be construed as disinterest in continued

employment with the company. Since the workers stood

firm in their refusal to comply with the directives their

services were terminated.

Issue:

Whether or not the dismissal/termination were

illegal.

Held:

The principal test in determining whether

particular employees are project employees

distinguished from regular employees is whether the

project employees are assigned to carry out specific

project or undertaking, the duration (and scope) of

which are specified at the time the employees are

engaged for the project. Project in the realm of

business and industry refers to a particular job or

undertaking that is within the regular or usual business of

employer, but which is distinct and separate and

identifiable as such from the undertakings of the

company. Such job or undertaking begins and ends at

determined or determinable times. While it may be

allowed that in the instant case the workers were initially

hired for specific projects or undertakings of the company

and hence can be classified as project employees, the

repeated re-hiring and the continuing need for their

services over a long span of time (the shortest, at seven

[7] years) have undeniably made them regular

employees. Thus, we held that where the employment of

project employees is extended long after the supposed

project has been finished, the employees are removed

from the scope of project employees and considered

regular employees.

Moreover, if private respondents were indeed

employed as project employees, petitioners should

have submitted a report of termination to the nearest

public employment office every time their employment

was terminated due to completion of each construction

project. The records show that they did not. Policy

Instruction No. 20 is explicit that employers of project

employees are exempted from the clearance requirement

but not from the submission of termination report. We

have consistently held that failure of the employer to file

termination reports after every project completion proves

that the employees are not project employees. Nowhere

in the New Labor Code is it provided that the reportorial

requirement is dispensed with. The fact is that

Department Order No. 19 superseding Policy Instruction

No. 20 expressly provides that the report of termination is

one of the indicators of project employment.

The NLRC was correct in finding that the workers

were illegally dismissed. The rule is that in effecting a

valid dismissal, the mandatory requirements of

substantive and procedural due process must be strictly

complied with. These were wanting in the present

case. Private respondents were dismissed allegedly

because of insubordination or blatant refusal to comply

with a lawful directive of their employer. But willful

disobedience of the employers lawful orders as a just

cause for the dismissal of the employees envisages the

concurrence of at least two (2) requisites: (a) the

employees assailed conduct must have been willful or

intentional, the willfulness being characterized by a

wrongful and perverse attitude; and, (b) the order

violated must have been reasonable, lawful, made known

to the employee and must pertain to the duties which he

has been engaged to discharge. The refusal of private

respondents was willful but not in the sense of plain and

perverse insubordination. It was dictated by necessity

and justifiable reasons - for what appeared to be an

innocent memorandum was actually a veiled attempt to

deny them their rightful status as regular employees. The

workers therefore had no option but to disobey the

directive which they deemed unreasonable and unlawful

because it would result in their being downsized to mere

project workers. This act of self-preservation should not

merit them the extreme penalty of dismissal. DENIED.


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MARAGUINOT VS NLRC

Gr. No. 120969, January 22, 1998

Facts:

Alejandro Maraguinot (Maraguinot) alleges that he

was employed by Viva Films (Viva) as part of the filming

crew. He was later designated as Assistant Electrician and

then later promoted to Electrician.

Paulinmo Enero (Enero) likewise claims that Viva

hired him as a member of the shooting crew. Maraguinot

and Eneros tasks consisted of loading, unloading and

arranging movie equipment in the shooting area.

They later asked the company that their salaries be

adjusted in accordance with the minimum wage law. In

response, the company said that they would grant the

adjustment provided they signed a blank employment

contract. When they refused, they were forced to go on

leave. Upon his return, the company refused to take

Enero back. As regards Maraguinot, he was dropped from

the company payroll, but was later returned. When again

he refused to sign the blank contract, his services were

terminated.

Maraguinot and Enero then sued for illegal

dismissal. VIVA CLAIMS that they contract persons called

producers/assistant producers to make movies and

contend that Maraguinot and Enero are project

employees of these producers who act as independent

contractors. Hence there is no employer-employee

relationship between them. In addition, Viva claims that

Maraguinot was hired for the movie Mahirap Maging

Pogi, while Enero was hired for the movie Sigaw ng

Puso.

LABOR ARBITER: ruled in favor of Maraguinot and

Enero and held that they were employees of Viva and as

such were illegally dismissed by the latter.

NLRC: reversed the LA and ruled that the

circumstances of the case showed that they were only

project employees of Viva.

Issues:

Whether or not Maraguinot and Enero are

employees of Viva. They were regular employees.

Whether or not they were illegally dismissed.

Yes.

Held:

ISSUE - 1

Viva claims that the producers were job

contractors.

However, under Section 8 of Rule VIII, Book III of

the Omnibus Rules Implementing the Labor Code, to be

considered a job contractor, such associate producers

must have tools, equipment, machinery, work premises

and other materials necessary to make motion picture.

The associate producers had none of these, and that in

fact, the movie making equipment is owned by Viva.

Given that, these producers can be considered

only as labor-only contractors. As such is prohibited, the

law considers the person or entity engaged in the same a

mere agent or intermediary of the direct employer.

BUT EVEN GIVEN THAT, these producers cannot

be considered as job contractors, much less labor-only

contractors as they did not supply, recruit nor hire the

workers. In this case, it was Viva who recruited the crew

members from an available groups of freelance workers

which include the complainants.

The relationship between Viva and its producers

seem to be that of agency as the latter makes movies on

behalf of Viva whose business is that of making movies.

The existence of an employer-employee

relationship between Maraguinot & Enero and Viva is

further supported by the following: The four elements

under 4-fold test are present. CONTROL: Viva has a

Supervising Producer that monitors the progress of the

producers. Viva, in effect, controls the outcome of the

film and the means through which it is produced.

SELECTION AND SUPERVISION: Viva issued appointment

slips with their corporate name as the heading. SALARIES:

It was likewise Viva who paid the employees salaries.

ISSUE 2

While Maraguinot and Enero were possibly

initially hired as project employees, they had attained the

status of regular employees.

A project employee or a member of a work

pool may acquire the status of a regular employee when

the ff. concur: There is a continuous rehiring of project

employees even after cessation of the project. The tasks

performed are vital, necessary and indispensable to the

usual business or trade of the employer.

The length of time during which the employee

was continuously rehired is not controlling, but merely

serves as a badge of regular employment.

In this case, Enero was employed for 2 years

and engaged in at least 18 projects; while Maragunot was

employed for 3 years and worked on at least 23 projects.

Citing Lao vs. NLRC, the could held that 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

workers shall be available when called to report for a

project. Although primarily applicable to regular seasonal

workers, this setup can likewise be applied to project

workers in so far as the effect of temporary cessation of

work is concerned.


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Once a project or work pool employee has

been (a) continuously, as opposed to intermittently,

rehired by the same employer for the same tasks or

nature of tasks; (b) 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.

As Maraguinot and Enero have already gained

the status of regular employees, their dismissal was

unwarranted since the cause invoked for their dismissal

(completion of the project) is not one of the valid causes

for termination under Article 282 of the Labor Code.

VISAYAN STEVEDORE TRANS. CO. VS CIR

Gr. No. L-21696, February 25, 1967

Facts :

VISTRANCO is engaged in loading and unloading

of vessels, with a branch office in Hinigaran, negros

occidental. Under the management of Rafael Xaudaro. Its

workers are supplied by UWFA whose men have regularly

worked as laborers of the company every milling season

since the time of world war II up to the milling season

immediately preceding nov. 11 1955 when the company

refused to engage services of Venanvio Dano-og,

Buenventura, Agarcio and 137 other persons. At the

behest of the UWFA and the complainants, a complaint

for unfair labor practice was, accodingly, filed against the

company and xaudaro with the CIR which ruled that the

company is guilty of unfair labor practice hence ordered

the company to ceases and desist from such unfair labor

practice and to reinstate the compainants with back

wages.

Issue:

Whether or not VISTRANCO is guilty of unfair

labor practice

Held:

Yes. The said charge is substantially borne out by

the evidence of record, it appears that the workers not

admitted to work beginning from november 1995 were

precisely those belonging to the UWFA. And Mr. Xaudaro,

the company branch manager, had told them point blank

that severance of their connection with the UWFA was

the remedy if they wanted to continue working with the

company.

MERCADO VS NLRC

Gr. No. 79869, September 5, 1991

Facts:

The petition stemmed from the illegal dismissal,

under payment of wages, non-payment of overtime pay,

holiday pay, service incentive leave benefits, emergency

cost of living allowances and 13th month pay, filed by the

petitioner against private respondents before the NLRC.

Petitioners are agricultural workers utilized by

the private respondents. Fortunato Mercado and Leon

Santillan worked in that farm owned by the respondent

since 1949 up to 1979. Petitioner alleged that they were

illegally dismissed.

Private respondent in her answer denied that

said petitioners were her regular employees and instead

averred that she engaged their services, through Spouses

Fortunato Mercado, Sr. and Rosa Mercado, their

"mandarols", that is, persons who take charge in

supplying the number of workers needed by owners of

various farms, but only to do a particular phase of

agricultural work necessary in rice production and/or

sugar cane production, after which they would be free to

render services to other farm owners who need their

services.

The other private respondents denied having

any relationship whatsoever with the petitioners and

state that they were merely registered owners of the land

in question included as correspondents in this case.

Respondent Labor Arbiter Luciano P. Aquino

ruled in favor of private respondents and held that

petitioners were not regular and permanent workers of

the private respondents, for the nature of the terms and

conditions of their hiring reveal that they were required

to perform phases of agricultural work for a definite

period of time after which their services would be

available to any other farm owner.

Both parties filed their appeal with the National

Labor Relations Commissions (NLRC). Petitioners

questioned respondent Labor Arbiter's finding that they

were not regular and permanent employees of private

respondent Aurora Cruz while private respondents

questioned the award of financial assistance granted by

respondent Labor Arbiter.

The NLRC ruled in favor of private respondents

affirming the decision of the respondent Labor Arbiter.

The Petitioner filed a motion for reconsideration but it

was denied.

Issue:

Whether or not petitioners are regular and

permanent farm workers and therefore entitled to the

benefits which they pray for.


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Held:

No. they are project employees.

A careful examination of the foregoing statements reveals

that the findings of the Labor Arbiter in the case are ably

supported by evidence. There is, therefore, no

circumstance that would warrant a reversal of the

questioned decision of the Labor Arbiter as affirmed by

the National Labor Relations Commission.

The contention of petitioners that the second paragraph

of Article 280 of the Labor Code should have been applied

in their case presents an opportunity to clarify the afore-

mentioned provision of law.

Article 280 of the Labor Code reads in full:

Article 280. Regular and Casual Employment. The



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 continue while such actually exists.

The first paragraph answers the question of who

are employees. It states that, regardless of any written or

oral agreement to the contrary, an employee is deemed

regular where he is engaged in necessary or desirable

activities in the usual business or trade of the employer,

except for project employees.

A project employee has been defined to be one

whose employment has been fixed for a specific project

or undertaking, the completion or termination of which

has been determined at the time of the engagement of

the employee, or where the work or service to be

performed is seasonal in nature and the employment is

for the duration of the season as in the present case.

The second paragraph of Art. 280 demarcates as

"casual" employees, all other employees who do not fan

under the definition of the preceding paragraph. The

proviso, in said second paragraph, deems as regular

employees those "casual" employees who have rendered

at least one year of service regardless of the fact that

such service may be continuous or broken.

Petitioners, in effect, contend that the proviso in

the second paragraph of Art. 280 is applicable to their

case and that the Labor Arbiter should have considered

them regular by virtue of said proviso. The contention is

without merit.

The general rule is that the office of a proviso is

to qualify or modify only the phrase immediately

preceding it or restrain or limit the generality of the

clause that it immediately follows.

Policy Instruction No. 12 of the Department of

Labor and Employment discloses that the concept of

regular and casual employees was designed to put an end

to casual employment in regular jobs, which has been

abused by many employers to prevent called casuals from

enjoying the benefits of regular employees or to prevent

casuals from joining unions. The same instructions show

that the proviso in the second paragraph of Art. 280 was

not designed to stifle small-scale businesses nor to

oppress agricultural land owners to further the interests

of laborers, whether agricultural or industrial. What it

seeks to eliminate are abuses of employers against their

employees and not, as petitioners would have us believe,

to prevent small-scale businesses from engaging in

legitimate methods to realize profit. Hence, the proviso is

applicable only to the employees who are deemed

"casuals" but not to the "project" employees nor the

regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project

employees, or, to use the correct term, seasonal

employees, their employment legally ends upon

completion of the project or the season. The termination

of their employment cannot and should not constitute

an illegal dismissal.

BRENT SCHOOL VS ZAMORA

Gr. No. L- 48494, February 5, 1990

Facts:

Private respondent Doroteo R. Alegre was

engaged as athletic director by petitioner Brent School,

Inc. at a yearly compensation of P20,000.00. The contract

fixed a specific term for its existence, five (5) years, i.e.,

from July 18, 1971, the date of execution of the

agreement, to July 17, 1976. Subsequent subsidiary

agreements dated March 15, 1973, August 28, 1973, and

September 14, 1974 reiterated the same terms and


m meikimouse

conditions, including the expiry date, as those contained

in the original contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the

report filed by Brent School with the Department of Labor

advising of the termination of his services effective on July

16, 1976. The stated ground for the termination was

"completion of contract, expiration of the definite period

of employment." Although protesting the announced

termination stating that his services were necessary and

desirable in the usual business of his employer, and his

employment lasted for 5 years - therefore he had

acquired the status of regular employee - Alegre accepted

the amount of P3,177.71, and signed a receipt therefor

containing the phrase, "in full payment of services for the

period May 16, to July 17, 1976 as full payment of

contract."

The Regional Director considered Brent School's report as

an application for clearance to terminate employment

(not a report of termination), and accepting the

recommendation of the Labor Conciliator, refused to give

such clearance and instead required the reinstatement of

Alegre, as a "permanent employee," to his former

position without loss of seniority rights and with full back

wages.

Issue:

Whether or not the provisions of the Labor Code

have anathematized "fixed period employment" or

employment for a term.

Held:

Respondent Alegre's contract of employment

with Brent School having lawfully terminated with and by

reason of the expiration of the agreed term of period

thereof, he is declared not entitled to reinstatement.

The employment contract between Brent School

and Alegre was executed on July 18, 1971, at a time when

the Labor Code of the Philippines (P.D. 442) had not yet

been promulgated. At that time, the validity of term

employment was impliedly recognized by the Termination

Pay Law, R.A. 1052, as amended by R.A. 1787. Prior,

thereto, it was the Code of Commerce (Article 302) which

governed employment without a fixed period, and also

implicitly acknowledged the propriety of employment

with a fixed period. The Civil Code of the Philippines,

which was approved on June 18, 1949 and became

effective on August 30,1950, itself deals with obligations

with a period. No prohibition against term-or 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, it was perfectly

legitimate for them to include in it a stipulation fixing the

duration thereof Stipulations for a term were explicitly

recognized as valid by this Court.

The status of legitimacy continued to be enjoyed

by fixed-period employment contracts under the Labor

Code (PD 442), which went into effect on November 1,

1974. The Code contained explicit references to fixed

period employment, or employment with a fixed or

definite period. Nevertheless, obscuration of the principle

of licitness of term employment began to take place at

about this time.

Article 320 originally stated that the "termination

of employment of probationary employees and those

employed WITH A FIXED PERIOD shall be subject to such

regulations as the Secretary of Labor may prescribe."

Article 321 prescribed the just causes for which an

employer could terminate "an employment without a

definite period." And Article 319 undertook to define

"employment without a fixed period" in the following

manner: where the employee has been engaged to

perform activities which are usually necessary or desirable

in the usual business or trade of the employer, except

where the employment has been fixed for a specific

project or undertaking the completion or termination of

which has been determined at the time of the


service to be performed is seasonal in nature and the


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).

As it is evident 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.

Such interpretation puts the seal on Bibiso upon

the effect of the expiry of an agreed period of


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employment as still good rulea 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.

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.

MILLARES AND LAGDA VS NLRC

Gr. No. 110524, July 29, 2002

Facts:

Douglas Millares was employed by

ESSO Internationalthrough its local manning agency,

Trans-Global, in 1968 as a machinist. In 1975, he was

promoted as Chief Engineer which position he occupied

until he opted to retire in 1989. In 1989, petitioner

Millares filed a leave of absence and applied for optional

retirement plan under the Consecutive Enlistment

Incentive Plan (CEIP) considering that he had already

rendered more than twenty years of continuous service.

Esso International denied Millares request for optional

retirement on the following grounds, to wit: 1) he was

employed on a contractual basis 2) his contract of

enlistment (COE) did not provide for retirement before

the age of sixty years; 3) he did not comply with the

requirement for claiming benefits under the CEIP, i.e., to

submit a written advice to the company of his intention to

terminate his employment within thirty days from his last

disembarkation date.

Subsequently, after failing to return to work after

the expiration of his leave of absence, Millares was

dropped from the roster of crew members effective

September 1, 1989. On the other hand, petitioner Lagda

was employed by Esso International as wiper/oiler in

1969. He was promoted as Chief Engineer in 1980, a

position he continued to occupy until his last COE expired

in 1989. In 1989, Lagda likewise filed a leave of absence

and applied to avail of the optional early retirement plan

in view of his twenty years continuous service in the

company. Trans-global similarly denied Lagdas request

for availment of the optional early retirement scheme on

the same grounds upon which Millares request was

denied. Unable to return for contractual sea service after

his leave of absence expire, Lagda was also dropped from

the roster of crew members effective September 1, 1989.

Millares and Lagda filed a complaint-affidavit for

illegal dismissal and non-payment of employee

benefits against private respondents

Esso International and Trans-Global before the POEA. The

POEA rendered a decision dismissing the complaint for

lack of merit. On appeal, NLRC affirmed the decision of

the POEA dismissing the complaint. NLRC rationcinated

that Millares and Lagda, as seamen and overseas contract

workers are not covered by the term regular

employment as defined under Article 280 of the Labor

Code. The POEA, which is tasked with protecting the

rights of the Filipino workers for overseas employment to

fair and equitable recruitment and employment practices

and to ensure their welfare, prescribes a standard

employment contract for seamen on board ocean-going

vessels for a fixed period but in no case to exceed twelve

months.

Issue:

Whether or not seafarers are considered regular

employees under Article 280 of the Labor Code

Held:

No, It is for the mutual interest of both the

seafarer and the employer why the employment status

must be contractual only or for a certain period of time.

Quoting Brent School Inc. v. Zamora, 1990, and Pablo

Coyoca v. NLRC, 1995, the Supreme Court ruled

thatseafarers are considered contractual employees. They

can not be considered as regular employees under Article

280 of the Labor Code. Their employment is governed by

the contracts they sign everytime they are rehired and


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their employment is terminated when the contract

expires. Their employment is contractually fixed for a

certain period of time. They fall under the exception of

Article 280 whose employment has been fixed for a

specific project or undertaking the completion or

termination of which has been determined at the time of


services to be performed is seasonal in nature and the


As ruled in Brent case, there are certain forms of

employment which also require the performance of usual

and desirable functions and which exceed one year but do

not necessarily attain regular employment status under

Article 280. Overseas workers includingseafarers fall

under this type of employment which are governed by the

mutual agreements of the parties. And as stated in the

Coyoca case, Filipino seamen are governed by the Rules

and Regulations of the POEA. The Standard Employment

Contract governing the employment of All Filipino seamen

on Board Ocean-Going Vessels of the POEA, particularly in

Part I, Sec. C specifically provides that the contract of

seamen shall be for a fixed period. And in no case should

the contract of seamen be longer than 12 months.

Moreover, the Court held that it is an accepted maritime

industry practice that employment of seafarers are for a

fixed period only. Constrained by the nature of their

employment which is quite peculiar and unique in itself, it

is for the mutual interest of both the seafarer and the

employer why the employment status must be

contractual only or for a certain period of

time. Seafarers spend most of their time at sea and

understandably, they can not stay for a long and an

indefinite period of time at sea. Limited access to shore

society during the employment will have an adverse

impact on the seafarer. The national, cultural and lingual

diversity among the crew during the COE is a reality that

necessitates the limitation of its period.

INTERNATIONAL CATHOLIC MIGRATION COMMISSION

VS NLRC

Gr. No. 72222, January 30, 1989

Facts:

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 amonthly

salary of P2,000.00.

Three (3) months thereafter, 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.

On August 1983, private respondent filed a

complaint 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 1983, after the parties submitted

their respective position papers and other pleadings, the

Labor Arbiter 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.

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.

Issue:

Whether or not private respondent is a

probationary employee?

Held:

The Court held, There is no dispute that private

respondent was terminated during her probationary

period of employment for failure to qualify as a regular

member of petitioner's teaching staff in accordance with

its reasonable standards. Records show that private

respondent was found by petitioner to be deficient in

classroom management, teacher-student relationship and

teaching techniques. Failure to qualify as a regular

employee in accordance with the reasonable standards of

the employer is a just cause for terminating a

probationary employee specifically recognized under

Article 282 (now Article 281) of the Labor Code 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


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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 employee at the time of his

engagement. An employee who is allowed to work after a

probationary period shall be considered a regular

employee.

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. The

word "probationary", as used to describe the period of

employment, implies the purpose of the term or period,

but not its length.

Being in the nature of a "trial period" 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.

ROBINSON'S GALLERIA VS IR RANCHEZ

Gr. No. 177937, January 19, 2011

Facts:

Respondent was a probationary employee of

petitioner Robinsons Galleria/Robinsons Supermarket

Corporation (petitioner Supermarket) for a period of five

(5) months, or from October 15, 1997 until March 14,

1998. She underwent six (6) weeks of training as a cashier

before she was hired as such on October 15, 1997. Two

weeks after she was hired, or on October 30, 1997,

respondent reported to her supervisor the loss of cash

amounting to P20,299.00 which she had placed inside the

company locker.

Petitioner Jess Manuel (petitioner Manuel), the

Operations Manager of petitioner Supermarket, ordered

that respondent be strip-searched by the company

guards. However, the search on her and her personal

belongings yielded nothing. Respondent acknowledged

her responsibility and requested that she be allowed to

settle and pay the lost amount. On March 12, 1998,

petitioners sent to respondent by mail a notice of

termination and/or notice of expiration of probationary

employment dated March 9, 1998. Respondent filed a

complaint for illegal dismissal and damages.

Issue:

Whether or not respondent was illegally

terminated.

Held:

Yes. petitioners failed to accord respondent

substantive and procedural due process.

Article 277(b) of the Labor Code mandates that

subject to the constitutional right of workers to security of

tenure and their right to be protected against dismissal,

except for just and authorized cause and without

prejudice to the requirement of notice under Article 283

of the same Code, the employer shall furnish the worker,

whose employment is sought to be terminated, a written

notice containing a statement of the causes of

termination, and shall afford the latter ample opportunity

to be heard and to defend himself with the assistance of a

representative if he so desires, in accordance with

company rules and regulations pursuant to the guidelines

set by the Department of Labor and Employment.

A probationary employee, like a regular

employee, enjoys security of tenure. However, in cases of

probationary employment, aside from just or authorized

causes of termination, an additional ground is provided

under Article 281 of the Labor Code, i.e., the probationary

employee may also be terminated for failure to qualify as

a regular employee in accordance with reasonable

standards made known by the employer to the employee

at the time of the engagement. Thus, the services of an

employee who has been engaged on probationary basis

may be terminated for any of the following: (1) a just or

(2) an authorized cause; and (3) when he fails to qualify as

a regular employee in accordance with reasonable

standards prescribed by the employer.


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An illegally or constructively dismissed employee,

respondent is entitled to: (1) either reinstatement, if

viable, or separation pay, if reinstatement is no

longer viable; and (2) backwages. These two reliefs are

separate and distinct from each other and are awarded

conjunctively. In this case, since respondent was a

probationary employee at the time she w

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