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mem$ers 5 hich constituted a majority. &ommissioner @eronimo A. Auadra dissented,votin4 Bfor the affirmation of the ellreasoned decision of the #a$or r$iter$elo.B & The motion for reconsideration as denied. ence, this recourse.

<etitioner asserts that the respondent &ommission erred and 4ravely a$use its

discretion in reversin4 the -rder of the #a$or r$iter in vie of the uncontroverted factthat the tasks he performed included not only paintin4 $ut also other maintenance orkhich are usually necessary or desira$le in the usual $usiness of private respondent:hence, the reversal violates the &onstitutional and statutory provisions for the protectionof la$or.

The private respondent, as e>pected, maintains the opposite vie and ar4ues thatpetitioner as hired only as a painter to repaint specifically the 5ama %osa $uildin4 atits Tondo compound, hich paintin4 ork is not part of their main $usiness7 that at thetime of his en4a4ement, it as made clear to him that he ould $e so en4a4ed on acasual $asis, so much so that he as not re;uired to accomplish an application form or

to comply ith the usual re;uisites for employment7 and that, in fact, petitioner asnever paid his salary throu4h the re4ular payroll $ut alays throu4h petty cashvouchers. 7

The olicitor @eneral, in his &omment, recommends that the petition $e 4iven duecourse in vie of the evidence on record supportin4 petitioner9s contention that his orkas re4ular in nature. n his vie, the dismissal of petitioner after he demanded to $ere4ulari3ed as a su$terfu4e to circumvent the la on re4ular employment. e furtherrecommends that the ;uestioned decision and resolution of respondent &ommission $eannulled and the -rder of the #a$or r$iter directin4 the reinstatement of petitioner ithpayment of $acka4es and other $enefits $e upheld.8

fter a careful revie of the records of this case, the &ourt finds merit in the petition as?e sustain the position of the olicitor @eneral that the reversal of the decision of the#a$or r$iter $y the respondent &ommission as erroneous.

The la on the matter is rticle 281 of the #a$or &ode hich defines re4ular and casualemployment as follos:

rt. 281. %e4ular and casual employment. The provisions of a rittena4reement to the contrary notithstandin4 and re4ardless of the orala4reements of the parties, an employment shall $e deemed to $e re4ular

here the employee has $een en4a4ed to perform activities hich areusually necessary or desira$le in the usual $usiness or trade of theemployer, e>cept here the employment has $een fi>ed for a specificproject or undertakin4 the completion or termination of hich has $eendetermined at the time of the en4a4ement of the employee or here theork or services to $e performed is seasonal in nature and theemployment is for the duration of the season.



n employment shall $e deemed to $e casual if it is not covered $y theprecedin4 para4raph: <rovided, That any employee ho has rendered atleast one year of service, hether such service is continuous or $roken,shall $e considered a re4ular employee ith respect to the activity inhich he is employed and his employment shall continue hile such

actually e>ists.

This provision reinforces the &onstitutional mandate to protect the interest of la$or. tslan4ua4e evidently manifests the intent to safe4uard the tenurial interest of the orkerho may $e denied the ri4hts and $enefits due a re4ular employee $y virtue of lopsideda4reements ith the economically poerful employer ho can maneuver to keep anemployee on a casual status for as lon4 as convenient. Thus, contrary a4reementsnotithstandin4, an employment is deemed re4ular hen the activities performed $y theemployee are usually necessary or desira$le in the usual $usiness or trade of theemployer. "ot considered re4ular are the socalled Bproject employmentB the completionor termination of hich is more or less determina$le at the time of employment, such as

those employed in connection ith a particular construction project

9

and seasonalemployment hich $y its nature is only desira$le for a limited period of time. oever,any employee ho has rendered at least one year of service, hether continuous orintermittent, is deemed re4ular ith respect to the activity he performed and hile suchactivity actually e>ists.

The primary standard, therefore, of determinin4 a re4ular employment is the reasona$leconnection $eteen the particular activity performed $y the employee in relation to theusual $usiness or trade of the employer. The test is hether the former is usuallynecessary or desira$le in the usual $usiness or trade of the employer. The connectioncan $e determined $y considerin4 the nature of the ork performed and its relation to

the scheme of the particular $usiness or trade in its entirety. lso, if the employee has$een performin4 the jo$ for at least one year, even if the performance is not continuousor merely intermittent, the la deems the repeated and continuin4 need for itsperformance as sufficient evidence of the necessity if not indispensa$ility of that activityto the $usiness. ence, the employment is also considered re4ular, $ut only ithrespect to such activity and hile such activity e>ists.

n the case at $ar, the respondent company, hich is en4a4ed in the $usiness ofmanufacture and distillery of ines and li;uors, claims that petitioner as contracted ona casual $asis specifically to paint a certain company $uildin4 and that its completionrendered petitioner9s employment terminated. This may have $een true at the$e4innin4, and had it $een shon that petitioner9s activity as e>clusively limited topaintin4 that certain $uildin4, respondent company9s theory of casual employment ouldhave $een orthy of consideration.

oever, durin4 petitioner9s period of employment, the records reveal that the tasksassi4ned to him included not only paintin4 of company $uildin4s, e;uipment and tools$ut also cleanin4 and oilin4 machines, even operatin4 a drillin4 machine, and other odd

jo$s assi4ned to him hen he had no paintin4 jo$. re4ular employee of respondent



company, miliano Tan;ue Jr., attested in his affidavit that petitioner orked ith him asa maintenance man hen there as no paintin4 jo$.

t is noteorthy that, as isely o$served $y the #a$or r$iter, the respondent companydid not even attempt to ne4ate the a$ove averments of petitioner and his co employee.

ndeed, the respondent company did not only fail to dispute this vital point, it even entfurther and confirmed its veracity hen it e>pressly admitted in its comment that, BThemain $ulk of ork andCor activities assi4ned to petitioner as paintin4 and other relatedactivities. -ccasionally, he as instructed to do other odd thin4s in connection ithmaintenance hile he as aitin4 for materials he ould need in his jo$ or hen hehad finished early one assi4ned to him. 10

The respondent &ommission, in reversin4 the findin4s of the #a$or r$iter reasonedthat petitioner9s jo$ cannot $e considered as necessary or desira$le in the usual$usiness or trade of the employer $ecause, B<aintin4 the $usiness or factory $uildin4 isnot a part of the respondent9s manufacturin4 or distillin4 process of ines and li;uors.11

The fallacy of the reasonin4 is readily apparent in vie of the admitted fact thatpetitioner9s activities included not only paintin4 $ut other maintenance ork as ell, afact hich even the respondent &ommission, like the private respondent, also e>presslyreco4ni3ed hen it stated in its decision that, 9lthou4h complainant9s (petitioner) orkas mainly paintin4, he as occasionally asked to do other odd jo$s in connection ithmaintenance ork. 12 t misleadin4ly assumed that all the petitioner did durin4 his morethan one year of employment as to paint a certain $uildin4 of the respondentcompany, hereas it is admitted that he as 4iven other assi4nments relatin4 tomaintenance ork $esides paintin4 company $uildin4 and e;uipment.

t is selfservin4, to say the least, to isolate petitioner9s paintin4 jo$ to justify theproposition of casual employment and conveniently disre4ard the other maintenanceactivities of petitioner hich ere assi4ned $y the respondent company hen he asnot paintin4. The la demands that the nature and entirety of the activities performed $ythe employee $e considered. n the case of petitioner, the paintin4 and maintenanceork 4iven him manifest a treatment consistent ith a maintenance man and not just apainter, for if his jo$ as truly only to paint a $uildin4 there ould have $een no $asis for 4ivin4 him other ork assi4nments n $eteen paintin4 activities.

t is not tena$le to ar4ue that the paintin4 and maintenance ork of petitioner are notnecessary in respondent9s $usiness of manufacturin4 li;uors and ines, just as it

cannot $e said that only those ho are directly involved in the process of producin4ines and li;uors may $e considered as necessary employees. -therise, there ouldhave $een no need for the re4ular 5aintenance ection of respondent company9sn4ineerin4 epartment, manned $y re4ular employees like miliano Tan;ue Jr., hompetitioner often orked ith.

'urthermore, the petitioner performed his ork of paintin4 and maintenance activitiesdurin4 his employment in respondent9s $usiness hich lasted for more than one year,



until early January, 18* hen he demanded to $e re4ulari3ed and as su$se;uentlydismissed. &ertainly, $y this fact alone he is entitled $y la to $e considered a re4ularemployee. nd considerin4 further that eeks after his dismissal, petitioner as rehired$y the company throu4h a la$or a4ency and as returned to his post in the5aintenance ection and made to perform the same activities that he used to do, it

cannot $e denied that as activities as a re4ular painter and maintenance man still e>ist.

t is of no moment that petitioner as told hen he as hired that his employment ouldonly $e casual, that he as paid throu4h cash vouchers, and that he did not comply ithre4ular employment procedure. <recisely, the la overrides such conditions hich areprejudicial to the interest of the orker hose eak $ar4ainin4 position needs thesupport of the tate. That determines hether a certain employment is re4ular or casualis not the ill and ord of the employer, to hich the desperate orker often accedes,much less the procedure of hirin4 the employee or the manner of payin4 his salary. t isthe nature of the activities performed in relation to the particular $usiness or tradeconsiderin4 all circumstances, and in some cases the len4th of time of its performance

and its continued e>istence.

'inally, considerin4 its task to 4ive life and spirit to the &onstitutional mandate for theprotection of la$or, to enforce and uphold our la$or las hich must $e interpretedli$erally in favor of the orker in case of dou$t, the &ourt cannot understand the failureof the respondent &ommission to perceive the o$vious attempt on the part of therespondent company to evade its o$li4ations to petitioner $y dismissin4 the latter daysafter he asked to $e treated as a re4ular orker on the flimsy prete>t that his paintin4ork as suddenly finished only to rehire him indirectly eeks after his dismissal andassi4n him to perform the same tasks he used to perform. The devious dismissal is tooo$vious to escape notice. The ine>plica$le disre4ard of esta$lished and decisive facts

hich the &ommission itself admitted to $e so, in justifyin4 a conclusion adverse to thea44rieved la$orer clearly spells a 4rave a$use of discretion amountin4 to lack of jurisdiction.

?%'-%, the petition is @%"T. The assailed ecision and %esolution of the"ational #a$or %elations &ommission are here$y annulled and set aside. The -rder of#a$or ar$iter 0ienvenido . ernande3 dated pril +, 18/ is reinstated. <rivaterespondent is ordered to reinstate petitioner as a re4ular maintenance man and to paypetitioner 1) $acka4es e;uivalent to three years from January 1+,18*, in accordanceith the luminum ?a4e -rders in effect for the period covered, 2) &-# *) 1*th5onth <ay, /) and other $enefits under pertinent &ollective 0ar4ainin4 4reements, ifany.

- -%%.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.



G.R. Nos. 82&%$'&7 August $0, 1990

()ILI((INE GEOT)ERMAL, INC., petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, TEOD*LO C. C*EBILLAS,

ARMANDO CILOT, MARIANO COR*LLO, +OLANDA CAL, E#REN CLERIGO,#ELICISSIMO ARGAS, -t a., respondents.

(ARAS, J.:

This is a petition for revie on certiorari seekin4 to annul and set aside7 (a) the%esolution of the "ational #a$or %elations &ommission / dated "ovem$er , 18D in#a$or &ases "os. %0/E*8! to /2D8! and %0 "os. E*28! to E**8! entitledTeodulo &. &ue$illas, et. al. vs. <hilippine @eothermal, nc. et al. and fren ". &leri4o

et. al. vs. <hil. @eothermal nc. respectively hich declared respondent employees asre4ular and permanent employees of petitioner company and ordered theirreinstatement and ($) the %esolution dated 5arch ,188 hich denied the 5otion for%econsideration.

The facts of the case are as follos:

<etitioner <hilippine @eothermal, nc. is a F.. corporation en4a4ed in the e>plorationand development of 4eothermal ener4y resources as an alternative source of ener4y. tis duly authori3ed to en4a4e in $usiness in the <hilippines and at present is the primecontractor of the "ational <oer &orporation at the latter9s operation of the Tii, l$ay

and the 5akilin40anaha @eothermal <rojects.

1

<rivate respondents, on the other hand, are employees of herein petitioner occupyin4various positions ran4in4 from carpenter to &lerk ho had orked ith petitionercompany under individual contracts, cate4ori3ed as contractual employment, for aperiod ran4in4 from fifteen (1!) days to three (*) months. These contracts erere4ularly reneed to the e>tent that individual private respondents had rendered servicefrom three (*) to five (!) years until 18* and 18/ hen petitioner started terminatin4their employment $y not renein4 their individual contracts. u$se;uently petitionerentered into jo$ contractin4 a4reement ith ra. @enerosa @on3ales ho supplies itith skilled

manpoer.

2

ometime in July 18*, herein private respondents or4ani3ed a separate la$or union invie of their e>clusion in the $ar4ainin4 unit of the re4ular rank and file employeesrepresented $y the 'ederation of 'ree ?orkers. n u4ust 18*, they filed a petition forcertification election ith the 5inistry of #a$or and mployment, "&%, docketed as&ase "o. "&#%82/28/. 0ecause of this, herein petitioner alle4edly startedharassin4 them and replaced them ith so called Bcontract orkersB. Thus, complainant



union and herein respondent employees filed a case for ille4al lockout and unfair la$orpractice, docketed as &ase "o. 1/2E8* and the instant consolidated cases %0 &ase"os. E/E*8! to /2D8! and %0 &ases "os. E*28! to E**8!, involvin4 2+orkers, for unfair la$or practice andCor ille4al dismissal, reinstatement $acka4es andservice incentive. $

-n 5arch *, 18D, #a$or r$iter =oltaire . 0alitaan rendered a decision in favor of therespondents the dispositive portion of hich reads:

?%'-%, jud4ment is here$y rendered in favor of the petitioners andthey are here$y declared re4ular and permanent employees of therespondent and findin4 their dismissal from the service ille4al, respondentis ordered to reinstate them to their former positions ithout loss ofseniority ri4hts and ith one year $acka4es ithout ;ualification ordeduction in the amount of <!E,E21.D+.

- -%%.

%

-n ppeal, the "ational #a$or %elations &ommission on "ovem$er , 18D rendered adecision dismissin4 the appeal and affirmin4 the decision of the #a$or r$iter. 5 motionfor reconsideration as denied on 5arch , 188 for lack of merit. &

ence, this petition hich as filed on pril 22, 188.

n the meantime, a rit of e>ecution as issued $y >ecutive r$iter @elacio #. %ivera,Jr. on pril 11, 188 on the 4round that no appeal as interposed hence the decision ofthe #a$or r$iter had $ecome final and e>ecutory. 7

-n pril 2E, 188, petitioner filed a motion for the issuance of a Temporary %estrainin4-rder as the heriff tried to enforce the ?rit of >ecution dated pril 11, 188 a4ainstpetitioner on pril 18, 188. They further alle4ed that they are ready, illin4 and a$le topost a supersedeas $ond to anser for dama4es hich respondents may suffer. 8

-n June 2, 188, this &ourt issued a Temporary %estrainin4 -rder enjoinin4respondents from enforcin4 the %esolution dated "ovem$er , 18D, any rit ofe>ecution or notice of 4arnishment issued in %0 &ases "os. E/E*8! to /2D8! and%0 &ases "os. E*28! to **8! of the "ational #a$or %elations &ommission,epartment of #a$or and mployment. 9

-n pril 1D, 18, this &ourt resolved to dismiss the petition for failure to sufficientlysho that the respondent commission had committed 4rave a$use of discretion inrenderin4 the ;uestioned jud4ment and lifted the Temporary %estrainin4 -rder issuedon June 2, 188. 10 motion for reconsideration as filed $y petitioner on 5ay 2!,18. 11



-n June !, 18, this &ourt 4ranted the motion7 and set aside the resolution dated pril1D, 187 4ave due course to the petition and re;uired the patties to su$mitsimultaneously, their respective memoranda. 12

<rivate respondents filed their memorandum on u4ust 8, 18 1$ hile pu$lic

respondent filed its memorandum on eptem$er 1, 18.1%

<etitioner filed itsmemorandum on eptem$er 8, 18. 15

The main issue in the case at $ar is hether or not private respondents may $econsidered re4ular and permanent employees due to their len4th of service in thecompany despite the fact that their employment is on contractual $asis.

<etitioner alle4es that it en4a4ed the services of private respondents on a monthly $asisto ensure that manpoer ould $e availa$le hen and here needed. <rivaterespondents ere fully aare of the nature of their employment as this as clearlyspelled out in the employment contracts. ?hat happened to them as not a case of

unarranted dismissal $ut simply one of e>piration of the tenure of employmentcontracts and the completion of the phase of the project for hich their services erehired. 1&

n the recent case of Kimberly Independent Labor Union for Solidarity, cti!ism, and"ationalism#$lalia !s. %on. Fran&lin '. (rilon, @.%. "os. DD+2 and D8D1promul4ated last 5ay , 1E, this &ourt classified the to kinds of re4ular employees,as: 1) those ho are en4a4ed to perform activities hich are usually necessary ordesira$le in the usual $usiness or trade of the employer7 and 2) those ho haverendered at least one (1) year of service, hether continuous or $roken ith respect tothe activity in hich they are employed. ?hile the actual re4ulari3ation of these

employees entails the mechanical act of issuin4 re4ular appointment papers andcompliance ith such other operatin4 procedures, as may $e adopted $y the employer,it is more in keepin4 ith the intent and spirit of the la to rule that the status of re4ularemployment attaches to the casual employee on the day immediately after the end ofhis first year of service.

ssumin4 therefore, that an employee could properly $e re4arded as a casual (asdistin4uished from a re4ular employee) he $ecomes entitled to $e re4arded as a re4ular employee of the employer as soon as he has completed one year of service. Fnder thecircumstances, employers may not terminate the service of a re4ular employee e>ceptfor a just cause or hen authori3ed under the #a$or &ode. t is not difficult to see that to

uphold the contractual arran4ement $eteen the employer and the employee ould ineffect $e to permit employers to avoid the necessity of hirin4 re4ular or permanentemployees indefinitely on a temporary or casual status, thus to deny them security oftenure in their jo$s. rticle 1E+ of the #a$or &ode is precisely desi4ned to prevent suchresult. 17

t is the policy of the state to assure the ri4ht of orkers to Bsecurity of tenure.B 18 The4uarantee is an act of social justice. ?hen a person has no property, his jo$ may



G.R. No. 1209&9. anua3 22, 19984

ALEANDRO MARAG*INOT, R. an (A*LINO ENERO, petitioners, vs. NATIONALLABOR RELATIONS COMMISSION SECOND DIISION6 oos- o:

(-s;;ng Co;ss;on- RA*L T. A<*INO, Co;ss;on- ROGELIO I.RA+ALA an Co;ss;on- ICTORIANO R. CALA+CA+ Ponente6, ICDEL ROSARIO an IA #ILMS,respondents.

D E C I S I O N

DAIDE, R., J .=

0y ay of this special civil action for certiorari under %ule +! of the %ules of &ourt, petitioners seekto annul the 1E 'e$ruary 1! ecision G1H of the "ational #a$or %elations &ommission (hereafter "#%&),and its + pril 1! %esolution G2H denyin4 the motion to reconsider the former in "#%&"&%& "o.EE+1!/. The decision reversed that of the #a$or r$iter in "#%&"&%&ase "o. EEEDE*/2.

The parties present conflictin4 sets of facts.

<etitioner lejandro 5ara4uinot, Jr. maintains that he as employed $y private respondents on 18July 18 as part of the filmin4 cre ith a salary of <*D!.EE per eek. $out four months later, he asdesi4nated ssistant lectrician ith a eekly salary of </EE.EE, hich as increased to </!E.EE in 5ay1E. n June 11, he as promoted to the rank of lectrician ith a eekly salary of </D!.EE, hichas increased to<!*.EE in eptem$er 11.

<etitioner <aulino nero, on his part, claims that private respondents employed him in June 1E asa mem$er of the shootin4 cre ith a eekly salary of <*D!.EE, hich as increased to </2!.EE in 5ay11, then to </D!.EE on 21 ecem$er 11. G*H

<etitionersI tasks consisted of loadin4, unloadin4 and arran4in4 movie e;uipment in the shootin4area as instructed $y the cameraman, returnin4 the e;uipment to =iva 'ilmsI arehouse, assistin4 in the

fi>in4K of the li4htin4 system, and performin4 other tasks that the cameraman andCor director may assi4n.G/H

ometime in 5ay 12, petitioners sou4ht the assistance of their supervisor, 5rs. lejandria&esario, to facilitate their re;uest that private respondents adjust their salary in accordance ith theminimum a4e la. n June 12, 5rs. &esario informed petitioners that 5r. =ic del %osario ould a4reeto increase their salary only if they si4ned a $lank employment contract. s petitioners refused to si4n,private respondents forced nero to 4o on leave in June 12, then refused to take him $ack hen hereported for ork on 2E July 12. 5eanhile, 5ara4uinot as dropped from the company payroll from 8to 21 June 12, $ut as returned on 22 June 12. e as a4ain asked to si4n a $lank employmentcontract, and hen he still refused, private respondents terminated his services on 2E July 12.G!H <etitioners thus sued for ille4al dismissal G+H $efore the #a$or r$iter.

-n the other hand, private respondents claim that =iva 'ilms (hereafter ==) is the trade name of =iva <roductions, nc., and that it is primarily en4a4ed in the distri$ution and e>hi$ition of movies $ut

not in the $usiness of makin4 movies7 in the same vein, private respondent =ic del %osario is merely ane>ecutive producer, i.e., the financier ho invests a certain sum of money for the production of moviesdistri$uted and e>hi$ited $y ==. GDH

<rivate respondents assert that they contract persons called producersK also referred to asassociate producersKG8H to produceK or make movies for private respondents7 and contend thatpetitioners are project employees of the associate producers ho, in turn, act as independentcontractors. s such, there is no employeremployee relationship $eteen petitioners and privaterespondents.

http://sc.judiciary.gov.ph/jurisprudence/1998/jan1998/120969.htm#_edn1



















<rivate respondents further contend that it as the associate producer of the film 'a*irap 'ain oi ,K ho hired petitioner 5ara4uinot. The movie shot from 2 July up to 22 July 12, and it as onlythen that 5ara4uinot as released upon payment of his last salary, as his services ere no lon4er needed. nent petitioner nero, he as hired for the movie entitled Sia/ n uso,K later retitled"arito an uso.K e ent on vacation on 8 June 12, and $y the time he reported for ork on 2E July12, shootin4 for the movie had already $een completed. GH

fter considerin4 $oth versions of the facts, the #a$or r$iter found as follos:

-n the first issue, this -ffice rules that complainants are the employees of the respondents.The producer cannot $e considered as an independent contractor $ut should $e consideredonly as a la$oronly contractor and as such, acts as a mere a4ent of the real employer, theherein respondents. %espondents even failed to name and specify ho are theproducers. lso, it is an admitted fact that the complainants received their salaries from therespondents. The case cited $y the respondents, %osario 0rothers, nc. !s. -ple, 1*1&% D2 does not apply in this case.

t is very clear also that complainants are doin4 activities hich are necessary and essential

to the $usiness of the respondents, that of moviemakin4. &omplainant 5ara4uinot orkedas an electrician hile complainant nero orked as a cre Gmem$erH. G1EH

ence, the #a$or r$iter, in his decision of 2E ecem$er 1*, decreed as follos:

?%'-%, jud4ment is here$y rendered declarin4 that complainants ere ille4allydismissed.

%espondents are here$y ordered to reinstate complainants to their former positions ithoutloss GofH seniority ri4hts and pay their $acka4es startin4 July 21, 12 to ecem$er *1,1* temporarily computed in the amount of <*8,EEE.EE for complainant <aulino nero and</+,EEE.EE for complainant lejandro 5ara4uinot, Jr. and thereafter until actually

reinstated.

%espondents are ordered to pay also attorneyIs fees e;uivalent to ten (1EL)andCor <8,/EE.EE on top of the aard. G11H

<rivate respondents appealed to the "#%& (docketed as "#%& "&%& "o. EE+1!/). n itsdecisionG12H of 1E 'e$ruary 1!, the "#%& found the folloin4 circumstances of petitionersI ork clearlyesta$lished:K

1. &omplainants Gpetitioners hereinH ere hired for specific movie projects and theiremployment as co#terminus ith each movie project the completionCtermination of hichare predetermined, such fact $ein4 made knon to complainants at the time of their

en4a4ement.

> > >

2. ach shootin4 unit orks on one movie project at a time. nd the ork of the shootin4units, hich ork independently from each other, are not continuous in nature $ut dependson the availa$ility of movie projects.












*. s a conse;uence of the noncontinuous ork of the shootin4 units, the total orkin4hours lo44ed $y complainants in a month sho e>treme variations... 'or instance,complainant 5ara4uinot orked for only 1./! hours in June 11 $ut lo44ed a totalof 18*.2! hours in January 12. &omplainant nero lo44ed a total of only *1.!D hours ineptem$er 11 $ut orked for 18*.*! hours the ne>t month, -cto$er 11.

/. 'urther shon $y respondents is the irre4ular ork schedule of complainants on a daily$asis. &omplainant 5ara4uinot as supposed to report on E! u4ust 11 $ut reportedonly on *E u4ust 11, or a 4ap of 2! days. &omplainant nero orked on 1E eptem$er11 and his ne>t scheduled orkin4 day as 28 eptem$er 11, a 4ap of 18 days.

!. The e>tremely irre4ular orkin4 days and hours of complainantsI ork e>plain the lumpsum payment for complainantsI services for each movie project. ence, complainants erepaid a standard eekly salary re4ardless of the num$er of orkin4 days and hours theylo44ed in. -therise, if the principle of no ork no payK as strictly applied, complainantsIearnin4s for certain eeks ould $e very ne4li4i$le.

+. %espondents also alle4ed that complainants ere not prohi$ited from orkin4 ith suchmovie companies like %e4al, eiko and '<J <roductions henever they are not orkin4 forthe independent movie producers en4a4ed $y respondents... This alle4ation as neverre$utted $y complainants and should $e deemed admitted.

The "#%&, in reversin4 the #a$or r$iter, then concluded that these circumstances, taken to4ether,indicated that complainants (herein petitioners) ere project employees.K

fter their motion for reconsideration as denied $y the "#%& in its %esolutionG1*H of + pril 1!,petitioners filed the instant petition, claimin4 that the "#%& committed 4rave a$use of discretionamountin4 to lack or e>cess of jurisdiction in: (1) findin4 that petitioners ere project employees7 (2) rulin4that petitioners ere not ille4ally dismissed7 and (*) reversin4 the decision of the #a$or r$iter.

To support their claim that they ere re4ular (and not project) employees of private respondents,petitioners cited their performance of activities that ere necessary or desira$le in the usual trade or $usiness of private respondents and added that their ork as continuous, i.e., after one project ascompleted they ere assi4ned to another project. <etitioners thus considered themselves part of a orkpool from hich private respondents dre orkers for assi4nment to different projects. <etitionerslamented that there as no $asis for the "#%&Is conclusion that they ere project employees, hile theassociate producers ere independent contractors7 and thus reasoned that as re4ular employees, their dismissal as ille4al since the same as premised on a false cause,K namely, the completion of aproject, hich as not amon4 the causes for dismissal alloed $y the #a$or &ode.

<rivate respondents reiterate their version of the facts and stress that their evidence supports thevie that petitioners are project employees7 point to petitionersI irre4ular ork load and ork schedule7emphasi3e the "#%&Is findin4 that petitioners never controverted the alle4ation that they ere notprohi$ited from orkin4 ith other movie companies7 and ask that the facts $e vieed in the conte>t of

the peculiar characteristics of the movie industry.

The -ffice of the olicitor @eneral (-@) is convinced that this petition is improper since petitionersraise ;uestions of fact, particularly, the "#%&Is findin4 that petitioners ere project employees, a findin4supported $y su$stantial evidence7 and su$mits that petitionersI reliance on rticle 28E of the #a$or &odeto support their contention that they should $e deemed re4ular employees is misplaced, as said sectionmerely distin4uishes $eteen to types of employees, i.e., re4ular employees and casual employees, for purposes of determinin4 the ri4ht of an employee to certain $enefits.K





The -@ likeise rejects petitionersI contention that since they ere hired not for one project, $ut for a series of projects, they should $e deemed re4ular employees. &itin4 'amansa !. "L-C ,G1/H the -@asserts that hat matters is that there as a timeframe for each movie project made knon to petitionersat the time of their hirin4. n closin4, the -@ disa4rees ith petitionersI claim that the "#%&Isclassification of the movie producers as independent contractors had no $asis in fact and in la, since, onthe contrary, the "#%& took pains in e>plainin4 its $asisK for its decision.

s re4ards the propriety of this action, hich the -ffice of the olicitor @eneral takes issue ith, erule that a special civil action for certiorari under %ule +! of the %ules of &ourt is the proper remedy for one ho complains that the "#%& acted in total disre4ard of evidence material to or decisive of thecontroversy. G1!H n the instant case, petitioners alle4e that the "#%&Is conclusions have no $asis in fact andin la, hence the petition may not $e dismissed on procedural or jurisdictional 4rounds.

The judicious resolution of this case hin4es upon, first, the determination of hether an employeremployee relationship e>isted $eteen petitioners and private respondents or any one of privaterespondents. f there as none, then this petition has no merit7 conversely, if the relationship e>isted,then petitioners could have $een unjustly dismissed.

related ;uestion is hether private respondents are en4a4ed in the $usiness of makin4 motionpictures. el %osario is necessarily en4a4ed in such $usiness as he finances the production of movies. ==, on the other hand, alle4es that it does not makeK movies, $ut merely distri$utes and

e>hi$its motion pictures. There $ein4 no further proof to this effect, e cannot rely on this selfservin4denial. t any rate, and as ill $e discussed $elo, private respondentsI evidence even supports thevie that == is en4a4ed in the $usiness of makin4 movies.

?e no turn to the critical issues. <rivate respondents insist that petitioners are project employeesof associate producers ho, in turn, act as independent contractors. t is settled that the contractin4 outof la$or is alloed only in case of jo$ contractin4. ection 8, %ule =, 0ook of the -mni$us %ulesmplementin4 the #a$or &ode descri$es permissi$le jo$ contractin4 in this ise:

ec. 8. Jo$ contractin4. There is jo$ contractin4 permissi$le under the &ode if thefolloin4 conditions are met:

(1) The contractor carries on an independent $usiness and undertakes thecontract ork on his on account under his on responsi$ility accordin4 tohis on manner and method, free from the control and direction of hisemployer or principal in all matters connected ith the performance of theork e>cept as to the results thereof7 and

(2) The contractor has su$stantial capital or investment in the form of tools,e;uipment, machineries, ork premises, and other materials hich arenecessary in the conduct of his $usiness.

ssumin4 that the associate producers are jo$ contractors, they must then $e en4a4ed in the$usiness of makin4 motion pictures. s such, and to $e a jo$ contractor under the precedin4 description,associate producers must have tools, e;uipment, machinery, ork premises, and other materialsnecessary to make motion pictures. oever, the associate producers here have none of these. <rivaterespondentsI evidence reveals that the moviemakin4 e;uipment are supplied to the producers andoned $y ==. These include 4enerators,G1+H ca$les and ooden platforms,G1DH cameras and shootin4e;uipment7KG18H in fact, == likeise ons the trucks used to transport the e;uipment. G1H t is thus clear thatthe associate producer merely leases the e;uipment from ==. G2EH ndeed, private respondentsI 'ormal-ffer of ocumentary vidence stated one of the purposes of >hi$it 1/8K as:























To prove further that the independent <roducers rented hootin4 Fnit "o. 2 from =iva tofinish their films. G21H

?hile the purpose of >hi$its 1/,K 1/K and 1/0K as:

GTHo prove that the movies of =iva 'ilms ere contracted out to the different independent<roducers ho rented hootin4 Fnit "o. * ith a fi>ed $ud4et and timeframe of at least *Eshootin4 days or /! days hichever comes first. G22H

<rivate respondents further narrated that ==Is 4enerators $roke don durin4 petitionersI last movieproject, hich forced the associate producer concerned to rent 4enerators, e;uipment and cre fromanother company.G2*H This only shos that the associate producer did not have su$stantial capital nor investment in the form of tools, e;uipment and other materials necessary for makin4 a movie. <rivaterespondents in effect admit that their producers, especially petitionersI last producer, are not en4a4ed inpermissi$le jo$ contractin4.

f private respondents insist that their associate producers are la$or contractors, then theseproducers can only $e la$oronlyK contractors, defined $y the #a$or &ode as follos:

rt. 1E+. &ontractor or su$contractor. > > >

There is la$oronlyK contractin4 here the person supplyin4 orkers to an employer doesnot have su$stantial capital or investment in the form of tools, e;uipment, machineries, orkpremises, amon4 others, and the orkers recruited and placed $y such persons areperformin4 activities hich are directly related to the principal $usiness of suchemployer. n such cases, the person or intermediary shall $e considered merely as ana4ent of the employer ho shall $e responsi$le to the orkers in the same manner ande>tent as if the latter ere directly employed $y him.

more detailed description is provided $y ection , %ule =, 0ook of the -mni$us %ules

mplementin4 the #a$or &ode:

ec. . #a$oronly contractin4. (a) ny person ho undertakes to supply orkers to anemployer shall $e deemed to $e en4a4ed in la$oronly contractin4 here such person:

(1) oes not have su$stantial capital or investment in the form of tools, e;uipment,machineries, ork premises and other materials7 and

(2) The orkers recruited and placed $y such person are performin4 activities hichare directly related to the principal $usiness or operations of the employer in hichorkers are ha$itually employed.

($) #a$oronly contractin4 as defined herein is here$y prohi$ited and the personactin4 as contractor shall $e considered merely as an a4ent or intermediaryof the employer ho shall $e responsi$le to the orkers in the same mannerand e>tent as if the latter ere directly employed $y him.

(c) 'or cases not fallin4 under this rticle, the ecretary of #a$or shalldetermine throu4h appropriate orders hether or not the contractin4 out ofla$or is permissi$le in the li4ht of the circumstances of each case and after











considerin4 the operatin4 needs of the employer and the ri4hts of the orkersinvolved. n such case, he may prescri$e conditions and restrictions to insurethe protection and elfare of the orkers.

s la$oronly contractin4 is prohi$ited, the la considers the person or entity en4a4ed in the same amere a4ent or intermediary of the direct employer. 0ut even $y the precedin4 standards, the associate

producers of == cannot $e considered la$oronly contractors as they did not supply, recruit nor hire theorkers. n the instant case, it as Juanita &esario, hootin4 Fnit upervisor and an employee of ==,ho recruited cre mem$ers from an availa$le 4roup of freelance orkers hich includes thecomplainants 5ara4uinot and nero.KG2/H nd in their 5emorandum, private respondents declared that theassociate producer hires the services of... +) camera cre hich includes (a) cameraman7 ($) the utilitycre7 (c) the technical staff7 (d) 4enerator man and electrician7 (e) clapper7 etc....K G2!H This clearly shoedthat the associate producers did not supply the orkers re;uired $y the movie project.

The relationship $eteen == and its producers or associate producers seems to $e that of a4ency,G2+H as the latter make movies on $ehalf of ==, hose $usiness is to makeK movies. s such, theemployment relationship $eteen petitioners and producers is actually one $eteen petitioners and ==,ith the latter $ein4 the direct employer.

The employeremployee relationship $eteen petitioners and == can further $e esta$lished $y the

control test.K ?hile four elements are usually considered in determinin4 the e>istence of an employmentrelationship, namely: (a) the selection and en4a4ement of the employee7 ($) the payment of a4es7 (c)the poer of dismissal7 and (d) the employerIs poer to control the employeeIs conduct, the mostimportant element is the employerIs control of the employeeIs conduct, not only as to the result of theork to $e done $ut also as to the means and methods to accomplish the same. G2DH These four elementsare present here. n their position paper su$mitted to the #a$or r$iter, private respondents narrated thefolloin4 circumstances:

GTHhe <%-F&% has to ork ithin the limits of the $ud4et he is 4iven $y the company,for as lon4 as the ultimate finishGedH product is accepta$le to the company...

To ensure that ;uality films are produced $y the <%-F&% ho is an independent

contractor, the company likeise employs a upervisin4 <%-F&%, a <roject accountantand a hootin4 unit supervisor. The &ompanyIs upervisin4 <%-F&% is 5r. ric&uatico, the <roject accountant varies from time to time, and the hootin4 Fnit upervisoris 5s. lejandria &esario.

The upervisin4 <%-F&% acts as the eyes and ears of the company and of the>ecutive <roducer to monitor the pro4ress of the <%-F&%Is orkaccomplishment. e is there usually in the field doin4 the rounds of inspection to see ifthere is any pro$lem that the <%-F&% is encounterin4 and to assist in threshin4 out thesame so that the film project ill $e finished on schedule. e supervises a$out * to D movieprojects simultaneously GatH any 4iven time $y coordinatin4 ith each film <%-F&%K.The <roject ccountant on the other hand assists the <%-F&% in monitorin4 the actual

e>penses incurred $ecause the company ants to insure that any additional $ud4etre;uested $y the <%-F&% is really justified and arranted especially hen there is achan4e of ori4inal plans to suit the tastGeH of the company on ho a certain scene must $epresented to make the film more interestin4 and more commercially via$le. (emphasis ours)

==Is control is evident in its mandate that the end result must $e a ;uality film accepta$le to thecompany.K The means and methods to accomplish the result are likeise controlled $y ==, !iz ., themovie project must $e finished ithin schedule ithout e>ceedin4 the $ud4et, and additional e>penses














must $e justified7 certain scenes are su$ject to chan4e to suit the taste of the company7 and theupervisin4 <roducer, the eyes and earsK of == and del %osario, intervenes in the moviemakin4process $y assistin4 the associate producer in solvin4 pro$lems encountered in makin4 the film.

t may not $e validly ar4ued then that petitioners are actually su$ject to the movie directorIs control,and not ==Is direction. The director merely instructs petitioners on ho to $etter comply ith ==Isre;uirements to ensure that a ;uality film is completed ithin schedule and ithout e>ceedin4 the

$ud4et. t $ottom, the director is akin to a supervisor ho merely oversees the activities of rankandfileemployees ith control ultimately restin4 on the employer.

5oreover, appointment slips G28H issued to all cre mem$ers state:

urin4 the term of this appointment you shall comply ith the duties and responsi$ilities ofyour position as ell as o$serve the rules and re4ulations promul4ated $y your superiorsand $y Top 5ana4ement.

The ords superiorsK and Top 5ana4ementK can only refer to the superiorsK and Top5ana4ementK of ==. 0y commandin4 cre mem$ers to o$serve the rules and re4ulations promul4ated$y ==, the appointment slips only emphasi3e ==Is control over petitioners.

side from control, the element of selection and en4a4ement is likeise present in the instant caseand e>ercised $y ==. sample appointment slip offered $y private respondents to prove thatmem$ers of the shootin4 cre e>cept the driver are project employees of the ndependent<roducersKG2H reads as follos:

== <%-F&T-", "&.

1+ ct. l$ano t.

iliman, Aue3on &ity

<%- "&-# ate: June 1!, 12

MMMMMMMMMMMMMMMMMM

<<-"T5"T #<

Nou are here$y appointed as -F"5" for the film project entitled 5"50TK. Thisappointment shall $e effective upon the commencement of the said project and shallcontinue to $e effective until the completion of the same.

'or your services you shall receive the dailyCeeklyCmonthly compensation of <812.!E.

urin4 the term of this appointment you shall comply ith the duties and responsi$ilities ofyour position as ell as o$serve the rules and re4ulations promul4ated $y your superiorsand $y Top 5ana4ement.

=ery truly yours,

(an ille4i$le si4nature)









&-"'-%5:

MMMMMMMMMMMMMMMMMMM

"ame of appointee

i4ned in the presence of:

MMMMMMMMMMMMMMMMMMMMM

"ota$ly, nohere in the appointment slip does it appear that it as the producer or associateproducer ho hired the cre mem$ers7 moreover, it is ==Is corporate name hich appears on theheadin4 of the appointment slip. ?hat likeise tells a4ainst == is that it paid petitionersI salaries asevidenced $y vouchers, containin4 ==Is letterhead, for that purpose.G*EH

ll the circumstances indicate an employment relationship $eteen petitioners and == alone, thusthe inevita$le conclusion is that petitioners are employees only of ==.

The ne>t issue is hether petitioners ere ille4ally dismissed. <rivate respondents contend that

petitioners ere project employees hose employment as automatically terminated ith the completionof their respective projects. <etitioners assert that they ere re4ular employees ho ere ille4allydismissed.

t may not $e i4nored, hoever, that private respondents e>pressly admitted that petitioners erepart of a ork pool7 G*1H and, hile petitioners ere initially hired possi$ly as project employees, they hadattained the status of re4ular employees in vie of ==Is conduct.

project employee or a mem$er of a ork pool may ac;uire the status of a re4ular employee henthe folloin4 concur:

1) There is a continuous rehirin4 of project employees even after cessation of a project7G*2H and

2) The tasks performed $y the alle4ed project employeeK are vital, necessary andindispensa$le to the usual $usiness or trade of the employer.G**H

oever, the len4th of time durin4 hich the employee as continuously rehired is not controllin4,$ut merely serves as a $ad4e of re4ular employment. G*/H

n the instant case, the evidence on record shos that petitioner nero as employed for a total of to (2) years and en4a4ed in at least ei4hteen (18) projects, hile petitioner 5ara4uinot as employedfor some three (*) years and orked on at least tentythree (2*) projects. G*!H 5oreover, as petitionersItasks involved, amon4 other chores, the loadin4, unloadin4 and arran4in4 of movie e;uipment in theshootin4 area as instructed $y the cameramen, returnin4 the e;uipment to the =iva 'ilmsI arehouse,and assistin4 in the fi>in4K of the li4htin4 system, it may not $e 4ainsaid that these tasks ere vital,

necessary and indispensa$le to the usual $usiness or trade of the employer. s re4ards the underscoredphrase, it has $een held that this is ascertained $y considerin4 the nature of the ork performed and itsrelation to the scheme of the particular $usiness or trade in its entirety.G*+H

recent pronouncement of this &ourt anent project or ork pool employees ho had attained thestatus of re4ular employees proves most instructive:

The denial $y petitioners of the e>istence of a ork pool in the company $ecause theirprojects ere not continuous is amply $elied $y petitioners themselves ho admit that: >>>


















ork pool may e>ist althou4h the orkers in the pool do not receive salaries and are freeto seek other employment durin4 temporary $reaks in the $usiness, provided that theorker shall $e availa$le hen called to report for a project. lthou4h primarily applica$leto re4ular seasonal orkers, this setup can likeise $e applied to project orkers insofaras the effect of temporary cessation of ork is concerned. This is $eneficial to $oth theemployer and employee for it prevents the unjust situation of coddlin4 la$or at the e>penseof capitalK and at the same time ena$les the orkers to attain the status of re4ularemployees. &learly, the continuous rehirin4 of the same set of employees ithin theframeork of the #ao @roup of &ompanies is stron4ly indicative that private respondentsere an inte4ral part of a ork pool from hich petitioners dre its orkers for its variousprojects.

n a final attempt to convince the &ourt that private respondents ere indeed projectemployees, petitioners point out that the orkers ere not re4ularly maintained in thepayroll and ere free to offer their services to other companies hen there ere no on4oin4 projects. This ar4ument hoever cannot defeat the orkersI status of re4ularity. ?eapply $y analo4y the case of Industrial#Commercial#ricultural 0or&ers $ranization !.

CI- G1+ &% !+2, !+D+8 (1++)H hich deals ith re4ular seasonal employees. There eheld: >>>

Truly, the cessation of construction activities at the end of every project is a foreseea$lesuspension of ork. -f course, no compensation can $e demanded from the employer$ecause the stoppa4e of operations at the end of a project and $efore the start of a neone is re4ular and e>pected $y $oth parties to the la$or relations. imilar to the case ofre4ular seasonal employees, the employment relation is not severed $y merely $ein4suspended. Gcitin4 'anila %otel Co. !. CI-, &% 18+ (1+*)H The employees are,strictly speakin4, not separated from services $ut merely on leave of a$sence ithout payuntil they are reemployed. Thus e cannot affirm the ar4ument that nonpayment of salaryor noninclusion in the payroll and the opportunity to seek other employment denote projectemployment.G*DH (underscorin4 supplied)

?hile Lao admittedly involved the construction industry, to hich <olicy nstruction "o.2ECepartment -rder "o. 1G*8H re4ardin4 ork pools specifically applies, there seems to $e no impedimentto applyin4 the underlyin4 principles to industries other than the construction industry. G*H "either may it $ear4ued that a su$stantial distinction e>ists $eteen the projects undertaken in the construction industryand the motion picture industry. -n the contrary, the raison d1 etre of $oth industries concern projects itha foreseea$le suspension of ork.

t this time, e ish to allay any fears that this decision unduly $urdens an employer $y imposin4 aduty to rehire a project employee even after completion of the project for hich he as hired. The importof this decision is not to impose a positive and seepin4 o$li4ation upon the employer to rehire projectemployees. ?hat this decision merely accomplishes is a judicial reco4nition of the employment status of

a project or ork pool employee in accordance ith hat is fait accompli , i.e., the continuous rehirin4 $ythe employer of project or ork pool employees ho perform tasks necessary or desira$le to theemployerIs usual $usiness or trade. #et it not $e said that this decision coddlesK la$or, for as Lao hasruled, project or ork pool employees ho have 4ained the status of re4ular employees are su$ject to theno orkno payK principle, to repeat:

ork pool may e>ist althou4h the orkers in the pool do not receive salaries and are freeto seek other employment durin4 temporary $reaks in the $usiness, provided that theorker shall $e availa$le hen called to report for a project. lthou4h primarily applica$le









to re4ular seasonal orkers, this setup can likeise $e applied to project orkers insofaras the effect of temporary cessation of ork is concerned. This is $eneficial to $oth theemployer and employee for it prevents the unjust situation of coddlin4 la$or at the e>penseof capitalK and at the same time ena$les the orkers to attain the status of re4ularemployees.

The &ourtIs rulin4 here is meant precisely to 4ive life to the constitutional policy of stren4thenin4 thela$or sector,G/EH $ut, e stress, not at the e>pense of mana4ement. #est it $e misunderstood, this rulin4does not mean that simply $ecause an employee is a project or ork pool employee even outside theconstruction industry, he is deemed, ipso 2ure, a re4ular employee. ll that e hold today is that once aproject or ork pool employee has $een: (1) continuously, as opposed to intermittently, rehired $y thesame employer for the same tasks or nature of tasks7 and (2) these tasks are vital, necessary andindispensa$le to the usual $usiness or trade of the employer, then the employee must $e deemed are4ular employee, pursuant to rticle 28E of the #a$or &ode and jurisprudence. To rule otherise ouldallo circumvention of la$or las in industries not fallin4 ithin the am$it of <olicy nstruction "o.2ECepartment -rder "o. 1, hence alloin4 the prevention of ac;uisition of tenurial security $y project or ork pool employees ho have already 4ained the status of re4ular employees $y the employerIsconduct.

n closin4 then, as petitioners had already 4ained the status of re4ular employees, their dismissalas unarranted, for the cause invoked $y private respondents for petitionersI dismissal, !iz ., completionof project, as not, as to them, a valid cause for dismissal under rticle 282 of the #a$or &ode. s such,petitioners are no entitled to $ack a4es and reinstatement, ithout loss of seniority ri4hts and other $enefits that may have accrued. G/1H "evertheless, folloin4 the principles of suspension of orkK and nopayK $eteen the end of one project and the start of a ne one, in computin4 petitionersI $ack a4es, theamounts correspondin4 to hat could have $een earned durin4 the periods from the date petitioners eredismissed until their reinstatement hen petitionersI respective hootin4 Fnits ere not undertakin4 anymovie projects, should $e deducted.

<etitioners ere dismissed on 2E July 12, at a time hen %epu$lic ct "o. +D1! as already ineffect. <ursuant to ection */ thereof hich amended ection 2D of the #a$or &ode of the <hilippinesandBustamante !. "L-C ,G/2H petitioners are entitled to receive full $ack a4es from the date of their dismissal up to the time of their reinstatement, ithout deductin4 hatever earnin4s derived elsehere

durin4 the period of ille4al dismissal, su$ject, hoever, to the a$ove o$servations.

>)ERE#ORE, the instant petition is @%"T. The assailed decision of the "ational #a$or %elations &ommission in "#%& "&% & "o. EE+1!/ dated 1E 'e$ruary 1!, as ell as its%esolution dated + pril 1!, are here$y ""F## and T for havin4 $een rendered ith4rave a$use of discretion, and the decision of the #a$or r$iter in "#%& "&% &ase "o. EEEDE*/2is %"TT, su$ject, hoever, to the modification a$ove mentioned in the computation of $acka4es.

"o pronouncement as to costs.

SO ORDERED.

Bellosillo, 3itu, and Kapunan, JJ., concur.

G.R. No. 798&9 S-t-?- 5, 1991










#ORT*NATO MERCADO, SR., ROSA MERCADO, #ORT*NATO MERCADO, R.,ANTONIO MERCADO, OSE CABRAL, L*CIA MERCADO, AS*NCION G*EARA,ANITA MERCADO, MARINA MERCADO, *LIANA CABRAL, G*ADAL*(E(AG*IO, BRIGIDA ALCANTARA, EMERLITA MERCADO, ROMEO G*EARA,ROMEO MERCADO an LEON SANTILLAN, petitioners,

vs.NATIONAL LABOR RELATIONS COMMISSION NLRC6, T)IRD DIISION" LABORARBITER L*CIANO A<*INO, RAB'III" A*RORA L. CR*@" S(O*SES #RANCISCODE BORA an LETICIA DE BORA" an STO. NI!O REALT+,INCOR(ORATED, respondents.

Ser!illano S. Santillan for petitioners.

Luis -. 'auricio for pri!ate respondents.

(ADILLA, J.:p

ssailed in this petition for certiorari is the decision / of the respondent national #a$or%elations &ommission ("#%&) dated 8 u4ust 18/ hich affirmed the decision ofrespondent #a$or r$iter #uciano <. ;uino ith the sli4ht modification of deletin4 theaard of financial assistance to petitioners, and the resolution of the respondent "#%&dated 1D u4ust 18D, denyin4 petitioners9 motion for reconsideration.

This petition ori4inated from a complaint for ille4al dismissal, underpayment of a4es,nonpayment of overtime pay, holiday pay, service incentive leave $enefits, emer4ency

cost of livin4 alloances and 1*th month pay, filed $y a$ovenamed petitioners a4ainstprivate respondents urora #. &ru3, 'rancisco 0orja, #eticia &. 0orja and to. "i6o%ealty ncorporated, ith %e4ional r$itration 0ranch "o. , "ational #a$or %elations&ommission in an 'ernando, <ampan4a. 1

<etitioners alle4ed in their complaint that they ere a4ricultural orkers utili3ed $yprivate respondents in all the a4ricultural phases of ork on the D 1C2 hectares of aceland and 1E hectares of su4ar land oned $y the latter7 that 'ortunato 5ercado, r. and#eon antillan orked in the farm of private respondents since 1/, 'ortunato5ercado, Jr. and ntonio 5ercado since 1D2 and the rest of the petitioners since 1+Eup to pril 1D, hen they ere all alle4edly dismissed from their employment7 and

that, durin4 the period of their employment, petitioners received the folloin4 dailya4es:

'rom 1+21+* O <1.!E1+*1+! O <2.EE1+!1+D O <*.EE1+D1DE O </.EE1DE1D* O <!.EE



1D*1D! O <!.EE1D!1D8 O <+.EE1D81D O <D.EE

<rivate respondent urora &ru3 in her anser to petitioners9 complaint denied that said

petitioners ere her re4ular employees and instead averred that she en4a4ed theirservices, throu4h pouses 'ortunato 5ercado, r. and %osa 5ercado, theirBmandarolsB, that is, persons ho take char4e in supplyin4 the num$er of orkersneeded $y oners of various farms, $ut only to do a particular phase of a4riculturalork necessary in rice production andCor su4ar cane production, after hich they ould$e free to render services to other farm oners ho need their services. 2

The other private respondents denied havin4 any relationship hatsoever ith thepetitioners and state that they ere merely re4istered oners of the land in ;uestionincluded as corespondents in this case. $

The dispute in this case revolves around the issue of hether or not petitioners arere4ular and permanent farm orkers and therefore entitled to the $enefits hich theypray for. nd corollary to this, hether or not said petitioners ere ille4ally dismissed $yprivate respondents.

%espondent #a$or r$iter #uciano <. ;uino ruled in favor of private respondents andheld that petitioners ere not re4ular and permanent orkers of the privaterespondents, for the nature of the terms and conditions of their hirin4 reveal that theyere re;uired to perform phases of a4ricultural ork for a definite period of time afterhich their services ould $e availa$le to any other farm oner. % %espondent #a$or

r$iter deemed petitioners9 contention of orkin4 telve (12) hours a day the hole

year round in the farm, an e>a44eration, for the reason that the plantin4 of lice andsu4ar cane does not entail a hole year as reported in the findin4s of the &hief of the"#%& pecial Task 'orce. 5 ven the sorn statement of one of the petitioners,'ortunato 5ercado, Jr., the son of spouses 'ortunato 5ercado, r. and %osa 5ercado,indu$ita$ly sho that said petitioners ere hired only as casuals, on an Bon and offB$asis, thus, it as ithin the prero4ative of private respondent urora &ru3 either totake in the petitioners to do further ork or not after any sin4le phase of a4riculturalork had $een completed $y them. &

%espondent #a$or r$iter as also of the opinion that the real cause hich tri44eredthe filin4 of the complaint $y the petitioners ho are related to one another, either $y

consan4uinity or affinity, as the filin4 of a criminal complaint for theft a4ainst %eynaldo5ercado, son of spouses 'ortunate 5ercado, r. and %osa 5ercado, for they evenasked the help of Jesus avid, Pone &hairman of the locality to talk to privaterespondent, urora &ru3 re4ardin4 said criminal case. 7 n his affidavit, Jesus avidstated under oath that petitioners ere never re4ularly employed $y private respondent

urora &ru3 $ut ere, onandoff hired to ork and render services hen needed, thusaddin4 further support to the conclusion that petitioners ere not re4ular and permanentemployees of private respondent urora &ru3. 8



%espondent #a$or r$iter further held that only money claims from years 1D+1DD,1DD1D8 and 1D81D may $e properly considered since all the other money claimshave prescri$ed for havin4 accrued $eyond the three (*) year period prescri$ed $yla. 9 -n 4rounds of e;uity, hoever, respondent #a$or r$iter aarded petitionersfinancial assistance $y private respondent urora &ru3, in the amount of Ten Thousand

<esos (<1E,EEE.EE) to $e e;uita$ly divided amon4 an the petitioners e>cept petitioner'ortunato 5ercado, Jr. ho had manifested his disinterest in the further prosecution ofhis complaint a4ainst private respondent. 10

0oth parties filed their appeal ith the "ational #a$or %elations &ommissions ("#%&).<etitioners ;uestioned respondent #a$or r$iter9s findin4 that they ere not re4ular andpermanent employees of private respondent urora &ru3 hile private respondents;uestioned the aard of financial assistance 4ranted $y respondent #a$or r$iter.

The "#%& ruled in favor of private respondents affirmin4 the decision of the respondent#a$or r$iter, ith the modification of the deletion of the aard for financial assistance

to petitioners. The dispositive portion of the decision of the "#%& reads:

?%'-%, the ecision of #a$or r$iter #uciano <. ;uino dated5arch *, 18* is here$y modified in that the aard of <1E,EEE.EE financialassistance should $e deleted. The said ecision is affirmed in all otheraspects.

- -%%. 11

<etitioners filed a motion for reconsideration of the ecision of the Third ivision of the"#%& dated 8 u4ust 18/7 hoever, the "#%& denied tills motion in a resolution dated

1D u4ust 18D.

12

n the present <etition for certiorari, petitioners seek the reversal of the a$ovementioned rulin4s. <etitioners contend that respondent #a$or r$iter and respondent"#%& erred hen $oth ruled that petitioners are not re4ular and permanent employeesof private respondents $ased on the terms and conditions of their hirin4, for saidfindin4s are contrary to the provisions of rticle 28E of the #a$or &ode. 1$ They su$mitthat petitioners9 employment, even assumin4 said employment ere seasonal,continued for so many years such that, $y e>press provision of rticle 28E of the #a$or&ode as amended, petitioners have $ecome re4ular and permanent employees. 1%

5oreover, they ar4ue that <olicy nstruction "o. 12

15

of the epartment of #a$or andmployment clearly lends support to this contention, hen it states:

< 8*E has defined the concept of re4ular and casual employment. ?hatdetermines re4ularity or casualness is not the employment contract,ritten or otherise, $ut the nature of the jo$. f the jo$ is usuallynecessary or desira$le to the main $usiness of the employer, thenemployment is re4ular. f not, then the employment is casual. mployment



for a definite period hich e>ceeds one (1) year shall $e considered re forthe duration of the definite period.

This concept of re and casual employment is desi4ned to put an end tocasual employment in re4ular jo$s hich has $een a$used $y many

employers to prevent socalled casuals from enjoyin4 the $enefits ofre4ular employees or to prevent casuals from joinin4 unions.

This ne concept should $e strictly enforced to 4ive meanin4 to theconstitutional 4uarantee of employment tenure. 1&

Tested under the las invoked, petitioners su$mit that it ould $e unjust, if not unlaful,to consider them as casual orkers since they have $een doin4 all phases ofa4ricultural ork for so many years, activities hich are undenia$ly necessary, desira$leand indispensa$le in the rice and su4ar cane production $usiness of the privaterespondents. 17

n the &omment filed $y private respondents, they su$mit that the decision of the #a$or r$iter, as aimed $y respondent "#%&, that petitioners ere only hired as casuals, is$ased on solid evidence presented $y the parties and also $y the &hief of the pecialTask 'orce of the "#%& %e4ional -ffice and, therefore, in accordance ith the rule onfindin4s of fact of administrative a4encies, the decision should $e 4iven 4reatei4ht. 18 'urthermore, they contend that the ar4uments used $y petitioners in;uestionin4 the decision of the #a$or r$iter ere $ased on matters hich ere notoffered as evidence in the case heard $efore the re4ional office of the then 5inistry of#a$or $ut rather in the case $efore the ocial ecurity &ommission, also $eteen thesame parties. 19

<u$lic respondent "#%& filed a separate comment prepared $y the olicitor @eneral. tsu$mits that it has lon4 $een settled that findin4s of fact of administrative a4encies ifsupported $y su$stantial evidence are entitled to 4reat ei4ht. 20 5oreover, it ar4uesthat petitioners cannot $e deemed to $e permanent and re4ular employees since theyfall under the e>ception stated in rticle 28E of the #a$or &ode, hich reads:

The provisions of ritten a4reements to the contrary notithstandin4 andre4ardless of the oral a4reements of the parties, an employment shall $edeemed to $e re4ular here the employee has $een en4a4ed to performactivities hich are usually necessary or desira$le in the usual $usiness or

trade of the employer, e4cept here the employment has $een fi>ed for aspecific project or undertakin4 the completion or termination of hich has$een determined at the time of the en4a4ement of the employee or /*eret*e /or& or ser!ices to be performed is seasonal in nature and t*eemployment is for t*e duration of t*e season. 21 (emphasis supplied)

The &ourt resolved to 4ive due course to the petition and re;uired the parties to su$mittheir respective memoranda after hich the case as deemed su$mitted for decision.



The petition is not impressed ith merit.

The invaria$le rule set $y the &ourt in reviein4 administrative decisions of the>ecutive 0ranch of the @overnment is that the findin4s of fact made therein arerespected, so lon4 as they are supported $y su$stantial evidence, even if not

overhelmin4 or preponderant722

that it is not for the reviein4 court to ei4h theconflictin4 evidence, determine the credi$ility of the itnesses or otherise su$stitute itson jud4ment for that of the administrative a4ency on the sufficiency of theevidence7 2$ that the administrative decision in matters ithin the e>ecutive9s jurisdictioncan only $e set aside upon proof of 4ross a$use of discretion, fraud, or error of la. 2%

The ;uestioned decision of the #a$or r$iter reads:

'ocusin4 the spotli4ht of judicious scrutiny on the evidence on record andthe ar4uments of $oth parties, it is our elldiscerned opinion that thepetitioners are not re4ular and permanent orkers of the respondents.

The very nature of the terms and conditions of their hirin4 reveal that thepetitioners ere re;uired to perform p of cultural ork for a definite period,after hich their services are availa$le to any farm oner. ?e cannotshare the ar4uments of the petitioners that they orked continuously thehole year round for telve hours a day. This, e feel, is an e>a44erationhich does not deserve any serious consideration inasmuch as the plan of rice and su4ar cane does not entail a hole year operation, the area in;uestion $ein4 comparatively small. t is noteorthy that the findin4s of the&hief of the pecial Task 'orce of the %e4ional -ffice are similar to this.

n fact, the sorn statement of one of the petitioners 'ortunato 5ercado,

Jr., the son of spouses 'ortunato 5ercado, r. and %osa 5ercado,indu$ita$ly shos that said petitioners ere only hired as casuals, onandoff $asis. ?ith this kind of relationship $eteen the petitioners and therespondent urora &ru3, e feel that there is no $asis in la upon hichthe claims of the petitioners should $e sustained, more specially theircomplaint for ille4al dismissal. t is ithin the prero4ative of respondent

urora &ru3 either to take in the petitioners to do further ork or not afterany sin4le phase of a4ricultural ork has $een completed $y them. ?eare of the opinion that the real cause hich tri44ered the filin4 of thiscomplaint $y the petitioners ho are related to one another, either $yconsan4uinity or affinity as due to the filin4 of a criminal complaint $y therespondent urora &ru3 a4ainst %eynaldo 5ercado, son of spouses'ortunato 5ercado, r. and %osa 5ercado. n pril 1D, accordin4 toJesus avid, Pone &hairman of the locality here the petitioners andrespondent reside, petitioner 'ortunato 5ercado, r. asked for helpre4ardin4 the case of his son, %eynaldo, to talk ith respondent urora&ru3 and the said Pone &hairman also stated under oath that thepetitioners ere never re4ularly employed $y respondent urora &ru3 $utere onandoff hired to ork to render services hen needed. 25



careful e>amination of the fore4oin4 statements reveals that the findin4s of the #a$or r$iter in the case are a$ly supported $y evidence. There is, therefore, no circumstancethat ould arrant a reversal of the ;uestioned decision of the #a$or r$iter as affirmed$y the "ational #a$or %elations &ommission.

The contention of petitioners that the second para4raph of rticle 28E of the #a$or &odeshould have $een applied in their case presents an opportunity to clarify the aforementioned provision of la.

rticle 28E of the #a$or &ode reads in full:

rticle 28E. -eular and Casual 5mployment . O The provisions of rittena4reement to the contrary notithstandin4 and re4ardless of the orala4reement of the parties, an employment shall $e deemed to $e re4ularhere the employee has $een en4a4ed to perform activities hich areusually necessary or desira$le in the usual $usiness or trade of the

employer, e>cept here the employment has $een fi>ed for a specificproject or undertakin4 the completion or termination of hich has $eendetermined at the time of the en4a4ement of the employee or here theork or services to $e performed is seasonal in nature and theemployment is for the duration of the season.

n employment shall $e deemed to $e casual if it is not covered $y theprecedin4 para4raph: <rovided, That, any employee ho has rendered atleast one year of service hether such service is continuous or $roken,shall $e considered a re4ular employee ith respect to the activity inhich he is employed and his employment shall continue hile such

actually e>ists.

The first para4raph ansers the ;uestion of ho are employees. t states that,re4ardless of any ritten or oral a4reement to the contrary, an employee is deemedre4ular here he is en4a4ed in necessary or desira$le activities in the usual $usiness or trade of the employer, e4cept for pro2ect employees.

project employee has $een defined to $e one hose employment has $een fi>ed for aspecific project or undertakin4, the completion or termination of hich has $eendetermined at the time of the en4a4ement of the employee, or here the ork orservice to $e performed is seasonal in nature and the employment is for the duration of

the season

2&

as in the present case.

The second para4raph of rt. 28E demarcates as BcasualB employees, all otheremployees ho do not fan under the definition of the precedin4 para4raph. The proviso,in said second para4raph, deems as re4ular employees those BcasualB employees hohave rendered at least one year of service re4ardless of the fact that such service may$e continuous or $roken.



<etitioners, in effect, contend that the proviso in the second para4raph of rt. 28E isapplica$le to their case and that the #a$or r$iter should have considered them re4ular$y virtue of said proviso. The contention is ithout merit.

The 4eneral rule is that the office of a proviso is to ;ualify or modify only the phrase

immediately precedin4 it or restrain or limit the 4enerality of the clause that itimmediately follos. 27 Thus, it has $een held that a proviso is to $e construed ithreference to the immediately precedin4 part of the provision to hich it is attached, andnot to the statute itself or to other sections thereof. 28 The only e>ception to this rule ishere the clear le4islative intent is to restrain or ;ualify not only the phrase immediatelyprecedin4 it (the proviso) $ut also earlier provisions of the statute or even the statuteitself as a hole. 29

<olicy nstruction "o. 12 of the epartment of #a$or and mployment discloses that theconcept of re4ular and casual employees as desi4ned to put an end to casualemployment in re4ular jo$s, hich has $een a$used $y many employers to prevent

called casuals from enjoyin4 the $enefits of re4ular employees or to prevent casualsfrom joinin4 unions. The same instructions sho that the proviso in the secondpara4raph of rt. 28E as not desi4ned to stifle smallscale $usinesses nor to oppressa4ricultural land oners to further the interests of la$orers, hether a4ricultural orindustrial. ?hat it seeks to eliminate are a$uses of employers a4ainst their employeesand not, as petitioners ould have us $elieve, to prevent smallscale $usinesses fromen4a4in4 in le4itimate methods to reali3e profit. ence, the proviso is applica$le only tothe employees ho are deemed BcasualsB $ut not to the BprojectB employees nor there4ular employees treated in para4raph one of rt. 28E.

&learly, therefore, petitioners $ein4 project employees, or, to use the correct

term, seasonal employees, their employment le4ally ends upon completion of theproject or the season. The termination of their employment cannot and should notconstitute an ille4al dismissal. $0

?%'-%, the petition is 5. The decision of the "ational #a$or %elations&ommission affirmin4 that of the #a$or r$iter, under revie, is ''%5. "opronouncement as to costs.

- -%%.

'elencio#%errera )C*airperson+, aras and -ealado, JJ., concur.

Sarmiento, J., on lea!e.



G.R. No. L'%8%9% #-?ua3 5, 1990

BRENT SC)OOL, INC., an RE. GABRIEL DIMAC)E, petitioners,vs.RONALDO @AMORA, t- (-s;-nt;a Ass;stant :o L-ga A::a;s, O::;- o: t-

(-s;-nt, an DOROTEO R. ALEGRE, respondents.

6uas*a, sperilla, nc*eta, e7a 8 "olasco for petitioners.

'auricio G. (omoon for respondent lere.

NARASA, J.:

The ;uestion presented $y the proceedin4s at $ar 1 is hether or not the provisions of

the #a$or &ode,2

as amended, $

have anathemati3ed Bfi>ed period employmentB oremployment for a term.

The root of the controversy at $ar is an employment contract in virtue of hich oroteo%. le4re as en4a4ed as athletic director $y 0rent chool, nc. at a yearlycompensation of <2E,EEE.EE. % The contract fi>ed a specific term for its e>istence, five(!) years, i .e., from July 18, 1D1, the date of e>ecution of the a4reement, to July 1D,1D+. u$se;uent su$sidiary a4reements dated 5arch 1!, 1D*, u4ust 28, 1D*, andeptem$er 1/, 1D/ reiterated the same terms and conditions, includin4 the e>pirydate, as those contained in the ori4inal contract of July 18, 1D1. 5

ome three months $efore the e>piration of the stipulated period, or more precisely on pril 2E,1D+, le4re as 4iven a copy of the report filed $y 0rent chool ith theepartment of #a$or advisin4 of the termination of his services effective on July 1+,1D+. The stated 4round for the termination as Bcompletion of contract, e>piration ofthe definite period of employment.B nd a month or so later, on 5ay 2+, 1D+, le4reaccepted the amount of <*,1DD.D1, and si4ned a receipt therefor containin4 the phrase,Bin full payment of services for the period 5ay 1+, to July 1D, 1D+ as full payment ofcontract.B

oever, at the investi4ation conducted $y a #a$or &onciliator of said report oftermination of his services, le4re protested the announced termination of his

employment. e ar4ued that althou4h his contract did stipulate that the same ouldterminate on July 1D, 1D+, since *is ser!ices /ere necessary and desirable in t*eusual business of *is employer , and his employment had lasted for five years, he hadac;uired the status of a re4ular employee and could not $e removed e>cept for validcause. & The %e4ional irector considered 0rent chool9s report as an applicationforclearance to terminate employment (not a report of termination), and acceptin4 therecommendation of the #a$or &onciliator, refused to 4ive such clearance and insteadre;uired the reinstatement of le4re, as a Bpermanent employee,B to his former position



ithout loss of seniority ri4hts and ith full $ack a4es. The irector pronounced Bthe4round relied upon $y the respondent (0rent) in terminatin4 the services of thecomplainant (le4re) . . . (as) not sanctioned $y <.. //2,B and, ;uite oddly, asprohi$ited $y &ircular "o. 8, series of 1+, of the 0ureau of <rivate chools. 7

0rent chool filed a motion for reconsideration. The %e4ional irector denied themotion and forarded the case to the ecretary of #a$or for revie. 8 The lattersustained the %e4ional irector. 9 0rent appealed to the -ffice of the <resident. 4ain itas re$uffed. That -ffice dismissed its appeal for lack of merit and affirmed the #a$orecretary9s decision, rulin4 that le4re as a permanent employee ho could not $edismissed e>cept for just cause, and e>piration of the employment contract as not oneof the just causes provided in the #a$or &ode for termination of services. 10

The chool is no $efore this &ourt in a last attempt at vindication. That it ill 4et here.

The employment contract $eteen 0rent chool and le4re as e>ecuted on July 18,

1D1, at a time hen the #a$or &ode of the <hilippines (<.. //2) had not yet $eenpromul4ated. ndeed, the &ode did not come into effect until "ovem$er 1, 1D/, somethree years after the perfection of the employment contract, and ri4hts and o$li4ationsthereunder had arisen and $een mutually o$served and enforced.

t that time, i .e., $efore the advent of the #a$or &ode, there as no dou$t hatevera$out the validity of term employment. t as impliedly $ut nonetheless clearlyreco4ni3ed $y the Termination <ay #a, %.. 1E!2, 11 as amended $y %..1D8D. 12 0asically, this statute provided thatO

n cases of employment, ithout a definite period, in a commercial,

industrial, or a4ricultural esta$lishment or enterprise, the employer or theemployee may terminate at any time the employment ith just cause7 orithout just cause in the case of an employee $y servin4 ritten notice onthe employer at least one month in advance, or in the case of anemployer, $y servin4 such notice to the employee at least one month inadvance or onehalf month for every year of service of the employee,hichever is lon4er, a fraction of at least si> months $ein4 considered asone hole year.

The employer, upon hom no such notice as served in case oftermination of employment ithout just cause, may hold the employee

lia$le for dama4es.

The employee, upon hom no such notice as served in case oftermination of employment ithout just cause, shall $e entitled tocompensation from the date of termination of his employment in anamount e;uivalent to his salaries or a4es correspondin4 to the re;uiredperiod of notice.



There as, to repeat, clear al$eit implied reco4nition of the licitness of termemployment. % 1D8D also enumerated hat it considered to $e just causes forterminatin4 an employment /it*out a definite period , either $y the employer or $y theemployee ithout incurrin4 any lia$ility therefor.

<rior, thereto, it as the &ode of &ommerce hich 4overned employment ithout afi>ed period, and also implicitly acknoled4ed the propriety of employment ith a fi>edperiod. ts rticle *E2 provided that O

n cases in hich the contract of employment does not have a fi>edperiod, any of the parties may terminate it, notifyin4 the other thereof onemonth in advance.

The factor or shop clerk shall have a ri4ht, in this case, to the salarycorrespondin4 to said month.

The salary for the month directed to $e 4iven $y the said rticle *E2 of the &odeof &ommerce to the factor or shop clerk, as knon as the mesada (from mes,panish for BmonthB). ?hen rticle *E2 (to4ether ith many other provisions ofthe &ode of &ommerce) as repealed $y the &ivil &ode of the <hilippines,%epu$lic ct "o. 1E!2 as enacted avoedly for the precise purpose ofreinstatin4 the mesada.

"o, the &ivil &ode of the <hilippines, hich as approved on June 18, 1/ and$ecame effective on u4ust *E,1!E, itself deals ith o$li4ations ith a period insection 2, &hapter *, Title , 0ook =7 and ith contracts of la$or and for a piece of ork,in ections 2 and *, &hapter *, Title =, respectively, of 0ook =. "o prohi$ition a4ainst

termor fi>edperiod employment is contained in any of its articles or is otherisededuci$le therefrom.

t is plain then that hen the employment contract as si4ned $eteen 0rent chooland le4re on July 18, 1D1, it as perfectly le4itimate for them to include in it astipulation fi>in4 the duration thereof tipulations for a term ere e>plicitly reco4ni3edas valid $y this &ourt, for instance, in Biboso ! . 3ictorias 'illin Co., Inc ., promul4atedon 5arch *1, 1DD, 1$ and J . 0alter 9*ompson Co. (*il .) ! . "L-C , promul4ated onecem$er 2, 18*. 1% The 9*ompsoncase involved an e>ecutive ho had $eenen4a4ed for a fi>ed period of three (*) years. Biboso involved teachers in a privateschool as re4ards hom, the folloin4 pronouncement as made:

?hat is decisive is that petitioners (teachers) ere ell aare an the timethat their tenure as for a limited duration. Fpon its termination, $othparties to the employment relationship ere free to rene it or to let itlapse. (p. 2!/)

Fnder merican la 15 the principle is the same. B?here a contract specifies the periodof its duration, it terminates on the e>piration of such period.B 1& B contract of



employment for a definite period terminates $y its on terms at the end of suchperiod.B 17

The status of le4itimacy continued to $e enjoyed $y fi>edperiod employment contractsunder the #a$or &ode (<residential ecree "o. //2), hich ent into effect on

"ovem$er 1, 1D/. The &ode contained e>plicit references to fi4ed periodemployment , or employment /it* a fi4ed or definite period . "evertheless, o$scuration of the principle of licitness of term employment $e4an to take place at a$out this time

rticle *2E, entitled B<ro$ationary and fi>ed period employment,B ori4inally stated thatthe Btermination of employment of pro$ationary employees and t*ose employed 0I9% FI:5( 5-I$( shall $e su$ject to such re4ulations as the ecretary of #a$or mayprescri$e.B The asserted o$jective to as ;pre!ent t*e circum!ention of t*e ri*t of t*eemployee to be secured in t*eir employment as provided . . . (in the &ode).B

rticle *21 prescri$ed the just causes for hich an employer could terminate

Ban employment /it*out a definite period .B

nd rticle *1 undertook to define Bemployment ithout a fi>ed periodB in the folloin4manner: 18

n employment s*all be deemed to be /it*out a definite period forpurposes of this &hapter here the employee has $een en4a4ed toperform activities hich are usually necessary or desira$le in the usual$usiness or trade of the employer, e>cept here the employment has$een fi>ed for a specific project or undertakin4 the completion ortermination of hich has $een determined at the time of the en4a4ement

of the employee or here the ork or service to $e performed is seasonalin nature and the employment is for the duration of the season.

The ;uestion immediately provoked $y a readin4 of rticle *1 is hether or not avoluntary a4reement on a fi>ed term or period ould $e valid here the employee Bhas$een en4a4ed to perform activities hich are usually necessary or desira$le in theusual $usiness or trade of the employer.B The definition seems a non se<uitur . 'rom thepremise O that the duties of an employee entail Bactivities hich are usually necessaryor desira$le in the usual $usiness or trade of the employer theB O conclusion does notnecessarily follo that the employer and employee should $e for$idden to stipulate anyperiod of time for the performance of those activities. There is nothin4 essentially

contradictory $eteen a definite period of an employment contract and the nature of theemployee9s duties set don in that contract as $ein4 Busually necessary or desira$le inthe usual $usiness or trade of the employer.B The concept of the employee9s duties as$ein4 Busually necessary or desira$le in the usual $usiness or trade of the employerB isnot synonymous ith or identical to employment ith a fi>ed term. #o4ically, thedecisive determinant in term employment should not $e the activities that the employeeis called upon to perform, $ut the day certain a4reed upon $y the parties for thecommencement and termination of their employment relationship, a day certain $ein4



understood to $e Bthat hich must necessarily come, althou4h it may not $e knonhen.B 19 Seasonal employment, and employment for a particular pro2ect are merelyinstances employment in hich a period, here not e>pressly set don, necessarilyimplied.

-f course, the term O period has a definite and settled si4nification. t means, B#en4thof e>istence7 duration. point of time markin4 a termination as of a cause or an activity7an end, a limit, a $ound7 conclusion7 termination. series of years, months or days inhich somethin4 is completed. time of definite len4th. . . . the period from one fi>eddate to another fi>ed date . . .B 20 t connotes a Bspace of time hich has an influence onan o$li4ation as a result of a juridical act, and either suspends its demanda$leness orproduces its e>tin4uishment.B 21 t should $e apparent that this settled and familiarnotion of a period, in the conte>t of a contract of employment, takes no account at all ofthe nature of the duties of the employee7 it has a$solutely no relevance to the characterof his duties as $ein4 Busually necessary or desira$le to the usual $usiness of theemployer,B or not.

u$se;uently, the fore4oin4 articles re4ardin4 employment ith Ba definite periodB andBre4ularB employment ere amended $y <residential ecree "o. 8!E, effectiveecem$er 1+, 1D!.

rticle *2E, dealin4 ith B<ro$ationary and fi>ed period employment,B as altered$y eliminatin t*e reference to persons Bemployed ith a fi>ed period,B and asrenum$ered ($ecomin4 rticle 2D1). The article 22 no reads:

. . . robationary employment .O<ro$ationary employment shall note>ceed si> months from the date the employee started orkin4, unless it

is covered $y an apprenticeship a4reement stipulatin4 a lon4er period.The services of an employee ho has $een en4a4ed in a pro$ationary$asis may $e terminated for a just cause or hen he fails to ;ualify as are4ular employee in accordance ith reasona$le standards made knon$y the employer to the employee at the time of his en4a4ement. nemployee ho is alloed to ork after a pro$ationary period shall $econsidered a re4ular employee.

lso amended $y < 8!E as rticle *1 (entitled Bmployment ith a fi>edperiod,B supra) $y (a) deletin mention of employment ith a fi>ed or definite period, ($)addin4 a 4eneral e>clusion clause declarin4 irrelevant ritten or oral a4reements Bto the

contrary,B and (c) makin4 the provision treat e>clusively of Bre4ularB and BcasualBemployment. s revised, said article, renum$ered 2DE, 2$ no reads:

. . . -eular and Casual 5mployment .=9*e pro!isions of /rittenareement to t*e contrary not/it*standin and reardless of t*e oralareement of t*e parties, an employment shall $e deemed to $e re4ularhere the employee has $een en4a4ed to perform activities hich areusually necessary or desira$le in the usual $usiness or trade of the



employer e>cept here the employment has $een fi>ed for a specificproject or undertakin4 the completion or termination of hich has $eendetermined at the time of the en4a4ement of the employee or here theork or service to $e employed is seasonal in nature and the employmentis for the duration of the season.

n employment shall $e deemed to he casual if it is not covered $y theprecedin4 para4raph: pro!ided ,t*at , any employee ho has rendered atleast one year of service, hether such service is continuous or $roken,shall $e considered a re4ular employee ith respect to the activity inhich he is employed and his employment shall continue hile suchactually e>ists.

The first para4raph is identical to rticle *1 e>cept that, as just mentioned, aclause has $een added, to it: BThe provisions of ritten a4reement to thecontrary notithstandin4 and re4ardless of the oral a4reements of the

parties . . .B The clause ould appear to $e addressed inter alia to a4reementsfi>in4 a definite period for employment. There is ithal no clear indication of theintent to deny validity to employment for a definite period. ndeed, not only is theconcept of re4ular employment not essentially inconsistent ith employment for afi>ed term, as a$ove pointed out, rticle >?> of the #a$or &ode, as amended $ysaid < 8!E, still impliedly acknoled4ed the propriety of term employment: itlisted the Bjust causesB for hich Ban employer may terminate employment/it*out a definite period ,B thus 4ivin4 rise to the inference that if the employment$e ith a definite period, there need $e no just cause for termination thereof if the4round $e precisely the e>piration of the term a4reed upon $y the parties for theduration of such employment.

till later, hoever, said rticle >?> (formerly rticle *21) as further amended $y Batasambansa Bilan 1*E, 2%to eliminate alto4ether reference to employment ithout adefinite period. s lastly amended, the openin4 lines of the article (renum$ered 28*),no pertinently read: Bn employer may terminate an employment for any of thefolloin4 just causes: . . . B 0< 1*E thus completed the elimination of every reference inthe #a$or &ode, e>press or implied, to employment ith a fi>ed or definite period orterm.

t is in the li4ht of the fore4oin4 description of the development of the provisions of the#a$or &ode $earin4 on term or fi>edperiod employment that the ;uestion posed in theopenin4 para4raph of this opinion should no $e addressed. s it then the le4islativeintention to outla stipulations in employment contracts layin4 don a definite periodthereforQ re such stipulations in essence contrary to pu$lic policy and should not onthis account $e accorded le4itimacyQ

-n the one hand, there is the 4radual and pro4ressive elimination of references to termor fi>edperiod employment in the #a$or &ode, and the specific statement of therule 25 thatO



. . . -eular and Casual 5mployment .= 9*e pro!isions of /rittenareement to t*e contrary not/it*standin and reardless of t*e oralareement of t*e parties, an employment shall $e deemed to $e re4ularhere the employee has $een en4a4ed to perform activities hich areusually necessary or desira$le in the usual $usiness or trade of the

employer e>cept here the employment has $een fi>ed for a specificproject or undertakin4 the completion or termination of hich has $eendetermined at the time of the en4a4ement of the employee or here theork or service to $e employed is seasonal in nature and the employmentis for the duration of the season.

n employment shall $e deemed to $e casual if it is not covered $y theprecedin4 para4raph: pro!ided ,t*at , any employee ho has rendered atleast one year of service, hether such service is continuous or $roken,shall $e considered a re4ular employee ith respect to the activity inhich he is employed and his employment shall continue hile such

actually e>ists.

There is, on the other hand, the &ivil &ode, hich has alays reco4ni3ed, andcontinues to reco4ni3e, the validity and propriety of contracts and o$li4ations ith afi>ed or definite period, and imposes no restraints on the freedom of the parties to fi> theduration of a contract, hatever its o$ject, $e it specie, 4oods or services, e>cept the4eneral admonition a4ainst stipulations contrary to la, morals, 4ood customs, pu$licorder or pu$lic policy. 2& Fnder the &ivil &ode, therefore, and as a 4eneral proposition,fi>edterm employment contracts are not limited, as they are under the present #a$or&ode, to those $y nature seasonal or for specific projects ith predetermined dates ofcompletion7 they also include those to hich the parties $y free choice have assi4ned a

specific date of termination.

ome familiar e>amples may $e cited of employment contracts hich may $e neither for seasonal ork nor for specific projects, $ut to hich a fi>ed term is an essential andnatural appurtenance: overseas employment contracts, for one, to hich, hatever thenature of the en4a4ement, the concept of re4ular employment ill all that it implies doesnot appear ever to have $een applied, rticle 28E of the #a$or &ode not ithstandin47also appointments to the positions of dean, assistant dean, colle4e secretary, principal,and other administrative offices in educational institutions, hich are $y practice ortradition rotated amon4 the faculty mem$ers, and here fi>ed terms are a necessity,ithout hich no reasona$le rotation ould $e possi$le. imilarly, despite the provisionsof rticle 28E, <olicy, nstructions "o. 8 of the 5inister of #a$or 27 implicitly reco4ni3ethat certain company officials may $e elected for hat ould amount to fi>ed periods, atthe e>piration of hich they ould have to stand don, in providin4 that theseofficials,B . . . may lose their jo$s as president, e>ecutive vicepresident or vicepresident, etc. $ecause the stockholders or the $oard of directors for one reason oranother did not reelect them.B



There can of course $e no ;uarrel ith the proposition that here from thecircumstances it is apparent that periods have $een imposed to preclude ac;uisition oftenurial security $y the employee, they should $e struck don or disre4arded ascontrary to pu$lic policy, morals, etc. 0ut here no such intent to circumvent the la isshon, or stated otherise, here the reason for the la does not e>ist, e.4., here it is

indeed the employee himself ho insists upon a period or here the nature of theen4a4ement is such that, ithout $ein4 seasonal or for a specific project, a definite dateof termination is a sine <ua non, ould an a4reement fi>in4 a period $e essentially evilor illicit, therefore anathemaQ ?ould such an a4reement come ithin the scope of

rticle 28E hich admittedly as enacted Bto prevent the circumvention of the ri4ht ofthe employee to $e secured in . . . (his) employmentQB

s it is evident from even only the three e>amples already 4iven that rticle 28E of the#a$or &ode, under a narro and literal interpretation, not only fails to e>haust the 4amutof employment contracts to hich the lack of a fi>ed period ould $e an anomaly, $utould also appear to restrict, ithout reasona$le distinctions, the ri4ht of an employee

to freely stipulate ith his employer the duration of his en4a4ement, it lo4ically follosthat such a literal interpretation should $e escheed or avoided. The la must $e 4ivena reasona$le interpretation, to preclude a$surdity in its application. -utlain4 the holeconcept of term employment and su$vertin4 to $oot the principle of freedom of contractto remedy the evil of employer9s usin4 it as a means to prevent their employees fromo$tainin4 security of tenure is like cuttin4 off the nose to spite the face or, morerelevantly, curin4 a headache $y loppin4 off the head.

t is a salutary principle in statutory construction that there e>ists a validpresumption that undesira$le conse;uences ere never intended $y ale4islative measure, and that a construction of hich the statute is fairly

suscepti$le is favored, hich ill avoid all o$jeciona$le mischievous,undefensi$le, ron4ful, evil and injurious conse;uences. 28

"othin4 is $etter settled than that courts are not to 4ive ords a meanin4hich ould lead to a$surd or unreasona$le conse;uences. That s aprinciple that does $ack to n re llen decided oil -cto$er 2D, 1E*, hereit as held that a literal interpretation is to $e rejected if it ould $e unjustor lead to a$surd results. That is a stron4 ar4ument a4ainst its adoption.The ords of Justice #aurel are particularly apt. Thus: BThe fact that theconstruction placed upon the statute $y the appellants ould lead to ana$surdity is another ar4ument for rejectin4 it. . . .B 29

. . . ?e have, here, then a case here the true intent of the la is clearthat calls for the application of the cardinal rule of statutory constructionthat such intent of spirit must prevail over the letter thereof, for hatever isithin the spirit of a statute is ithin the statute, since adherence to theletter ould result in a$surdity, injustice and contradictions and oulddefeat the plain and vital purpose of the statute. $0



ccordin4ly, and since the entire purpose $ehind the development of le4islationculminatin4 in the present rticle 28E of the #a$or &ode clearly appears to have $een,as already o$served, to prevent circumvention of the employee9s ri4ht to $e secure inhis tenure, the clause in said article indiscriminately and completely rulin4 out all rittenor oral a4reements conflictin4 ith the concept of re4ular employment as defined

therein should $e construed to refer to the su$stantive evil that the &ode itself hassin4led out: a4reements entered into precisely to circumvent security of tenure. t shouldhave no application to instances here a fi>ed period of employment as a4reed uponknoin4ly and voluntarily $y the parties, ithout any force, duress or improper pressure$ein4 $rou4ht to $ear upon the employee and a$sent any other circumstances vitiatin4his consent, or here it satisfactorily appears that the employer and employee dealtith each other on more or less e;ual terms ith no moral dominance hatever $ein4e>ercised $y the former over the latter. Fnless thus limited in its purvie, the la ould$e made to apply to purposes other than those e>plicitly stated $y its framers7 it thus$ecomes pointless and ar$itrary, unjust in its effects and apt to lead to a$surd andunintended conse;uences.

uch interpretation puts the seal on Bibiso $1 upon the effect of the e>piry of an a4reedperiod of employment as still 4ood ruleOa rule reaffirmed in the recent caseof 5scudero !s. $ffice of t*e resident (@.%. "o. !D822, pril 2+, 18) here, in thefairly analo4ous case of a teacher $ein4 served $y her school a notice of terminationfolloin4 the e>piration of the last of three successive fi>edterm employment contracts,the &ourt held:

%eyes (the teacher9s) ar4ument is not persuasive. t loses si4ht of the factthat her employment as pro$ationary, contractual in nature, and one itha definitive period. t the e>piration of the period stipulated in the contract,

her appointment as deemed terminated and the letter informin4 her ofthe nonreneal of her contract is not a condition sine <ua non $efore%eyes may $e deemed to have ceased in the employ of petitioner FT.The notice is a mere reminder that %eyes9 contract of employment asdue to e>pire and that the contract ould no lon4er $e reneed. t is not aletter of termination. The interpretation that the notice is only a reminder isconsistent ith the court9s findin4 inLaba2o supra. ... $2

<araphrasin4 5scudero, respondent le4re9s employment as terminated upon thee>piration of his last contract ith 0rent chool on July 1+, 1D+ ithout the necessityof any notice. The advance ritten advice 4iven the epartment of #a$or ith copy tosaid petitioner as a mere reminder of the impendin4 e>piration of his contract, not aletter of termination, nor an application for clearance to terminate hich needed theapproval of the epartment of #a$or to make the termination of his services effective. nany case, such clearance should properly have $een 4iven, not denied.

?%'-%, the pu$lic respondent9s ecision complained of is %=% and T . %espondent le4re9s contract of employment ith 0rent chool havin4 lafullyterminated ith and $y reason of the e>piration of the a4reed term of period thereof, he



is declared not entitled to reinstatement and the other relief aarded and confirmed onappeal in the proceedin4s $elo. "o pronouncement as to costs.

- -%%.

'elencio#%errera, Gutierrez, Jr., Cruz, aras, Feliciano, Gancayco, adilla, Bidin,Cort@s, Gri7o#<uino, 'edialdea and -ealado, JJ., concur.

Fernan, C.J., too& no part.



G.R. No. 122&5$. D--?- 12, 19974

(*RE #OODS COR(ORATON, petitioner , vs. NATIONAL LABOR RELATIONSCOMMISSION, RODOL#O CORDOA, IOLETA CR*SIS, ET

AL.,*

respondents.

D E C I S I O N

DAIDE, R., J .=

The cru> of this petition for certiorari is the issue of hether employees hired for a definite period andhose services are necessary and desira$le in the usual $usiness or trade of the employer are re4ular employees.

The private respondents (num$erin4 E+) ere hired $y petitioner <ure 'oods &orporation to orkfor a fi>ed period of five months at its tuna cannery plant in Tam$ler, @eneral antos &ity. fter thee>piration of their respective contracts of employment in June and July 11, their services ere

terminated. They forthith e>ecuted a %elease and AuitclaimK statin4 that they had no claim hatsoever a4ainst the petitioner.

-n 2 July 11, the private respondents filed $efore the "ational #a$or %elations &ommission("#%&) u$%e4ional r$itration 0ranch "o. R, @eneral antos &ity, a complaint for ille4al dismissala4ainst the petitioner and its plant mana4er, 5arciano 4anon. G1H This case as docketed as %011E8!E28/1.

-n 2* ecem$er 12, #a$or r$iter rturo <. ponesto handed don a decision G2H dismissin4 thecomplaint on the 4round that the private respondents ere mere contractual orkers, and not re4ular employees7 hence, they could not avail of the la on security of tenure. The termination of their services$y reason of the e>piration of their contracts of employment as, therefore, justified. e pointed out thatearlier he had dismissed a case entitled #akas n4 nak<ais "-?5 !. <ure 'oods &orp.K (&ase "o.%011E2EEE8888) $ecause the complainants therein ere not re4ular employees of <ure 'oods, as

their contracts of employment ere for a fi>ed period of five months. 5oreover, in another case involvin4the same contractual orkers of <ure 'oods (&ase "o. %1+%-R 5 F%!!8), then ecretary of #a$or %u$en Torres held, in a %esolution dated *E pril 1E, that the said contractual orkers ere notre4ular employees.

The #a$or r$iter also o$served that an order for private respondentsI reinstatement ould result inthe reemployment of more than 1E,EEE former contractual employees of the petitioner. 0esides, $ye>ecutin4 a %elease and Auitclaim,K the private respondents had aived and relin;uished hatever ri4htthey mi4ht have a4ainst the petitioner.

The private respondents appealed from the decision to the "ational #a$or %elations &ommission("#%&), 'ifth ivision, in &a4ayan de -ro &ity, hich docketed the case as "#%& & "o. 5EE1*2**.

-n 28 -cto$er 1/, the "#%& affirmed the #a$or r$iter9s decision. G*H oever, on privaterespondentsI motion for reconsideration, the "#%& rendered another decision on *E January

1! G/H vacatin4 and settin4 aside its decision of 28 -cto$er 1/ and holdin4 that the privaterespondents and their cocomplainants ere re4ular employees. t declared that the contract of employment for five months as a clandestine scheme employed $y Gthe petitionerH to stifle GprivaterespondentsIH ri4ht to security of tenureK and should therefore $e struck don and disre4arded for $ein4contrary to la, pu$lic policy, and morals. ence, their dismissal on account of the e>piration of their respective contracts as ille4al.

ccordin4ly, the "#%& ordered the petitioner to reinstate the private respondents to their former position ithout loss of seniority ri4hts and other privile4es, ith full $ack a4es7 and in case their reinstatement ould no lon4er $e feasi$le, the petitioner should pay them separation pay e;uivalent to

http://sc.judiciary.gov.ph/jurisprudence/1997/dec1997/122653.htm#_edn1












onemonth pay or onehalfmonth pay for every year of service, hichever is hi4her, ith $ack a4esand 1EL of the monetary aard as attorneyIs fees.

ts motion for reconsideration havin4 $een denied, G!H the petitioner came to this &ourt contendin4 thatrespondent "#%& committed 4rave a$use of discretion amountin4 to lack of jurisdiction in reversin4 thedecision of the #a$or r$iter.

The petitioner su$mits that the private respondents are no estopped from ;uestionin4 their separation from petitionerIs employ in vie of their e>press conformity ith the fivemonth duration of their employment contracts. 0esides, they fell ithin the e>ception provided in rticle 28E of the #a$or &odehich reads: GH>cept here the employment has $een fi>ed for a specific project or undertakin4 thecompletion or termination of hich has $een determined at the time of the en4a4ement of the employee.K

5oreover, the first para4raph of the said article must $e read and interpreted in conjunction ith theproviso in the second para4raph, hich reads: <rovided that any employee ho has rendered at leastone year of service, hether such service is continuous or $roken, shall $e considered a re4ular employee ith respect to the activity in hich he is employed....K n the instant case, the privaterespondents ere employed for a period of five months only. n any event, private respondents9 prayer for reinstatement is ell ithin the purvie of the %elease and AuitclaimK they had e>ecuted herein theyunconditionally released the petitioner from any and all other claims hich mi4ht have arisen from their past employment ith the petitioner.

n its &omment, the -ffice of the olicitor @eneral (-@) advances the ar4ument that the privaterespondents ere re4ular employees, since they performed activities necessary and desira$le in the$usiness or trade of the petitioner. The period of employment stipulated in the contracts of employmentas null and void for $ein4 contrary to la and pu$lic policy, as its purpose as to circumvent the la onsecurity of tenure. The e>piration of the contract did not, therefore, justify the termination of their employment.

The -@ further maintains that the rulin4 of the then ecretary of #a$or and mployment in #<"-?5 v. <ure 'oods &orporation is not $indin4 on this &ourt7 neither is that rulin4 controllin4, as thesaid case involved certification election and not the issue of the nature of private respondentsIemployment. t also considers private respondentsI ;uitclaim as ineffective to $ar the enforcement for thefull measure of their le4al ri4hts.

The private respondents, on the other hand, ar4ue that contracts ith a specific period of employment may $e 4iven le4al effect provided, hoever, that they are not intended to circumvent theconstitutional 4uarantee on security of tenure. They su$mit that the practice of the petitioner in hirin4orkers to ork for a fi>ed duration of five months only to replace them ith other orkers of the sameemployment duration as apparently to prevent the re4ulari3ation of these socalled casuals,K hich is aclear circumvention of the la on security of tenure.

?e find the petition devoid of merit.

rticle 28E of the #a$or &ode defines re4ular and casual employment as follos:

ART. 280. Regular and Casual Employment .-- The provisions of written agreement to the contrarynotwithstanding and regardless of the oral argument of the parties, an employment shall be deemed

to be regular where the employee has been engaged to perform activities which are usually necessary

or desirable in the usual business or trade of the employer, ecept where the employment has been

fied for a specific pro!ect or underta"ing the completion or termination of which has beendetermined at the time of the engagement of the employee or where the wor" or services to be

performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph# $rovided, That, any employee who has rendered at least one year of service, whether





such service is continuous or bro"en, shall be considered a regular employee with respect to theactivity in which he is employed and his employment shall continue while such activity eists.

Thus, the to kinds of re4ular employees are (1) those ho are en4a4ed to perform activities hichare necessary or desira$le in the usual $usiness or trade of the employer7 and (2) those casualemployees ho have rendered at least one year of service, hether continuous or $roken, ith respect to

the activity in hich they are employed.G+H

n the instant case, the private respondentsI activities consisted in the receivin4, skinnin4, loinin4,packin4, and casin4up of tuna fish hich ere then e>ported $y the petitioner. ndisputa$ly, they ereperformin4 activities hich ere necessary and desira$le in petitionerIs $usiness or trade.

&ontrary to petitioner9s su$mission, the private respondents could not $e re4arded as havin4 $eenhired for a specific project or undertakin4. The term specific project or undertakin4K under rticle 28E of the #a$or &ode contemplates an activity hich is not commonly or ha$itually performed or such type of ork hich is not done on a daily $asis $ut only for a specific duration of time or until completion7 theservices employed are then necessary and desira$le in the employerIs usual $usiness only for theperiod of time it takes to complete the project. GDH

The fact that the petitioner repeatedly and continuously hired orkers to do the same kind of ork

as that performed $y those hose contracts had e>pired ne4ates petitionerIs contention that thoseorkers ere hired for a specific project or undertakin4 only.

"o on the validity of private respondents9 fivemonth contracts of employment. n the leadin4 caseof 0rent chool, nc. !. Pamora, G8H hich as reaffirmed in numerous su$se;uent cases, GHthis &ourt hasupheld the le4ality of fi>edterm employment. t ruled that the decisive determinant in term employmentshould not $e the activities that the employee is called upon to perform $ut the day certain a4reed upon$y the parties for the commencement and termination of their employment relationship. 0ut, this &ourtent on to say that here from the circumstances it is apparent that the periods have $een imposed topreclude ac;uisition of tenurial security $y the employee, they should $e struck don or disre4arded ascontrary to pu$lic policy and morals.

Brent also laid don the criteria under hich term employment cannot $e said to $e in circumventionof the la on security of tenure:

%& The fied period of employment was "nowingly and voluntarily agreed upon by the partieswithout any force, duress, or improper pressure being brought to bear upon the employee and absent

any other circumstances vitiating his consent# or

2& 't satisfactorily appears that the employer and the employee dealt with each other on more or less

e(ual terms with no moral dominance eercised by the former or the latter.

"one of these criteria had $een met in the present case. s pointed out $y the private respondents:

)'*t could not be supposed that private respondents and all other so-called +casual wor"ers of )the

petitioner* /'13 and 4/5TAR'3 agreed to the 6-month employment

contract. 7annery wor"ers are never on e(ual terms with their employers. Almost always, theyagree to any terms of an employment contract !ust to get employed considering that it is difficult tofind wor" given their ordinary (ualifications. Their freedom to contract is empty and hollow because

theirs is the freedom to starve if they refuse to wor" as casual or contractual wor"ers. 'ndeed, to theunemployed, security of tenure has no value. 't could not then be said that petitioner and private

respondents dealt with each other on more or less e(ual terms with no moral dominance whatever being eercised by the former over the latter. )%0*














The petitioner does not deny or re$ut private respondents9 averments (1) that the main $ulk of itsorkforce consisted of its socalled casualK employees7 (2) that as of July 11, casualK orkersnum$ered 1,8*!7 and re4ular employees, 2+*7 (*) that the company hired casualK every month for theduration of five months, after hich their services ere terminated and they ere replaced $y other casualK employees on the same fivemonth duration7 and (/) that these casualK employees ere actuallydoin4 ork that ere necessary and desira$le in petitionerIs usual $usiness.

s a matter of fact, the petitioner even stated in its position paper su$mitted to the #a$or r$iter that,accordin4 to its records, the previous employees of the company hired on a fivemonth $asis num$ereda$out 1E,EEE as of July 1E. This confirms private respondentsI alle4ation that it as really the practiceof the company to hire orkers on a uniformly fi>ed contract $asis and replace them upon the e>pirationof their contracts ith other orkers on the same employment duration.

This scheme of the petitioner as apparently desi4ned to prevent the private respondents and theother casualK employees from attainin4 the status of a re4ular employee. t as a clear circumvention of the employeesI ri4ht to security of tenure and to other $enefits like minimum a4e, costoflivin4alloance, sick leave, holiday pay, and 1*th month pay. G11H ndeed, the petitioner succeeded in evadin4 theapplication of la$or las. lso, it saved itself from the trou$le or $urden of esta$lishin4 a just cause for terminatin4 employees $y the simple e>pedient of refusin4 to rene the employment contracts.

The fivemonth period specified in private respondentsI employment contracts havin4 $een imposed

precisely to circumvent the constitutional 4uarantee on security of tenure should, therefore, $e struckdon or disre4arded as contrary to pu$lic policy or morals. G12H To uphold the contractual arran4ement$eteen the petitioner and the private respondents ould, in effect, permit the former to avoid hirin4permanent or re4ular employees $y simply hirin4 them on a temporary or casual $asis, there$y violatin4the employeesI security of tenure in their jo$s. G1*H

The e>ecution $y the private respondents of a %elease and AuitclaimK did not preclude them from;uestionin4 the termination of their services. @enerally, ;uitclaims $y la$orers are froned upon ascontrary to pu$lic policy and are held to $e ineffective to $ar recovery for the full measure of the orkersIri4hts. G1/H The reason for the rule is that the employer and the employee do not stand on the same footin4.G1!H

"ota$ly, the private respondents lost no time in filin4 a complaint for ille4al dismissal. This act ishardly e>pected from employees ho voluntarily and freely consented to their dismissal. G1+H

The "#%& as, thus, correct in findin4 that the private respondents ere re4ular employees and thatthey ere ille4ally dismissed from their jo$s. Fnder rticle 2D of the #a$or &ode and the recent

jurisprudence, G1DHthe le4al conse;uence of ille4al dismissal is reinstatement ithout loss of seniority ri4htsand other privile4es, ith full $ack a4es computed from the time of dismissal up to the time of actualreinstatement, ithout deductin4 the earnin4s derived elsehere pendin4 the resolution of the case.

oever, since reinstatement is no lon4er possi$le $ecause the petitioner9s tuna cannery plant had,admittedly, $een closed in "ovem$er 1/, G18H the proper aard is separation pay e;uivalent to one monthpay or onehalf month pay for every year of service, hichever is hi4her, to $e computed from thecommencement of their employment up to the closure of the tuna cannery plant. The amount of $acka4es must $e computed from the time the private respondents ere dismissed until the time petitioner9scannery plant ceased operation. G1H

>)ERE#ORE, for lack of merit, the instant petition is 5 and the challen4ed decision of *E

January 1! of the "ational #a$or %elations &ommission in "#%& & "o. 5EE1*2** is here$y ''%5 su$ject to the a$ove modification on the computation of the separation pay and $ack a4es.

SO ORDERED.

Bellosillo, 3itu, and Kapunan, JJ., concur.
























G.R. No. L'5$%5$ anua3 22, 198&

MANILA )OTEL COR(ORATION, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION an RENATO L. CR*@, respondents.

C*EAS, J.:

This petition for certiorari seeks the revie and reversal of the decision of respondent"ational #a$or %elations &ommission ("#%&) dated January 11, 1D8, hich affirmedin toto the decision of the #a$or r$iter orderin4 petitioner 5anila otel &orporation toreinstate private respondent %enato #. &ru3 Bto his former position as 4ardener ithoutloss of seniority ri4hts and other privile4es appertainin4 thereto if any, ith $acka4esfrom the date of his dismissal on 5arch 1, 1DD until he is actually reinstatedB, and Btoimmediately reclassify him as a re4ular or permanent employeeB.

%enato #. &ru3 as employed as 4ardener $y 5anila otel on Bpro$ation statusBeffective eptem$er 22, 1D+. The appointment hich as si4ned $y &ru3 provided,inter alia:

1. ...

2. Nour compensation ill $e '-F% F"% <- (</EE.EE) per month paya$lesemimonthly.

*. This employment is for a pro$ationary period of si> (+) months and su$ject to yoursu$mittin4 all necessary ork permits and clearances such as medical and security

clearances. Nour jo$ performance and efficiency upon the e>piration of your pro$ationshall $e revieed and appraised in accordance ith the -T#9s and other 4enerallyaccepted ork standards. f you have satisfactorily passed your pro$ation, you ill $ereclassified to the re4ular roll.

/. s soon as you $ecome a re4ular employee, you ill $e entitled to (a) num$er of$enefits and privile4es that have $een instituted. 1

-n 5arch 2E, 1DD, or a day $efore the e>piration of the pro$ationary period, &ru39sposition as Ba$olishedB $y 5anila otel alle4edly due to economic reverses or$usiness recession, and to salva4e the enterprise from imminent dan4er of collapse. 2

nent said reason for his termination andCor a$olition, private respondent maintains thatO

-n 5arch 1, 1DD, at the close of office hours, 5r. %odri4ue3 called complainant &ru3and the other three (*) 4ardeners (%ufino rcis, l$ert 5anila and rthur %eyes) hoere also under a <ro$ationary ppointment and told them to immediately tender theirrespective resi4nation, $ecause alle4edly the otel as under a 9retrenchment policy9.



The announcement as a $lo to 5r. &ru3. n to days he ould have finished hispro$ationary period, and he hoped to $e reclassified as a re4ular employee. arlier, thatmornin4, 5r. %odri4ue3 had just commended him for his jo$ performance and haddesi4nated him Bn&har4eB or #ead @ardener. 5r. &ru3 re;uested additional time tothink it over. The re;uest as i4nored. 5r. %odri4ue3 informed them that as of that day

they ere terminated.

The folloin4 day, 5r. &ru3 reported for ork nonetheless. oever, histime card as no lon4er in the card rack. 'rom then on 5r. &ru3em$arked on a daily trip to 5anila otel desperately hopin4 that his short$ut commenda$le jo$ performance ould earn him a ne appointment. tas a fruitless effort for alays, mana4ement9s reply as that 9no positionas availa$le hich suited his ;ualification9. t has $een so to the present.

ronically, he later learned of rcis9 and 5anila9s promotion to teard and%eyes9 retention as sole 4ardener. $

ometime on 5arch 2/, 1DD, private respondent as upon his re;uest, 4ranted apersonal clearance. %

&laimin4 that his dismissal as ille4al and constitutes unfair la$or practice, &ru3 filedith the %e4ional -ffice "o. =, epartment (no 5inistry) of #a$or on 5arch 2!,1DD acomplaint a4ainst petitioner 5anila otel. 5 The case as certified for compulsoryar$itration.

-n ecem$er 2, 1DD, #a$or r$iter &onrado 0. 5a4laya rendered a decision & thedispositive portion of hich reads as follos:

?%'-%, premises considered, respondent 5anila otel is here$y-%% to reinstate complainant %enato #. &ru3 to his former positionas @ardener ithout loss of seniority ri4hts and other privile4esappertainin4 thereto if any, ith $acka4es from the date of his dismissalon 5arch 1, 1DD until he is actually reinstated.

%espondent is likeise -%% upon reinstatement of complainant, toimmediately reclassify him as a re4ular or permanent employee and issuetherefor the correspondin4 appointment. %espondent is further -%%to su$mit proof of compliance ith these orders immediately thereafter.

<etitioner appealed to the "ational #a$or %elations &ommission ("#%&). 7 nd thelatter affirmed in toto the decision 8of the #a$or r$iter there$y dismissin4 petitioner9sappeal for lack of merit.

<etitioner no contends that respondent &ommission (1) unarrantedly disre4arded thefact that private respondent as a mere pro$ationary employee hose position could $ea$olished for cause7 (2) unjustifia$ly refused to consider the serious $usiness reverses



and uneconomic operation as a valid and just cause for terminatin4 services of apro$ationary employee or a$olishin4 his position upon the e>piration of the pro$ationaryemployment7 and (*) erroneously and ille4ally coerce petitioner into retainin4 privaterespondent and payin4 him $acka4es even lon4 after the e>piration of thepro$ationary employment notithstandin4 the validity of a$olition of private respondent9s

position and ithout 4ivin4 petitioner the ri4ht or opportunity to evaluate theperformance of the private respondent prior to reclassification of his position to re4ularstatus.

n a %esolution promul4ated on pril 11, 18E, ?e resolved to re;uire respondents tocomment on the petition ithout hoever 4ivin4 due course thereto. ?e likeise issueda restrainin4 order enjoinin4 "#%& from e>ecutin4 the decision complained of until after the instant petition shall have $een finally resolved.

There is no dispute that as a pro$ationary employee, private respondent &ru3 had $ut alimited tenure. lthou4h on pro$ationary $asis, hoever, &ru3 still enjoys the

constitutional protection on security of tenure. urin4 his tenure of employmenttherefore or $efore his contract e>pires, respondent &ru3 cannot $e removed e>cept forcause as provided for $y la. This is cate4orically provided for $y rt. 282 of the #a$or&ode, hich states:

rt. 282. <ro$ationary mployment <ro$ationary employment shall note>ceed si> (+) mo nths from the date the employee started orkin4,unless it is covered $y apprenticeship a4reement stipulatin4 a lon4erperiod. The services of an employee ho has $een en4a4ed on apro$ationary $asis may $e terminated for a just cause or hen he fails to;ualify as a re4ular employee in accordance ith reasona$le standards,

made knon $y the employer to the employee at the time of hisen4a4ement. n employee ho is alloed to ork after a pro$ationaryperiod shall $e considered a re4ular employee. (mphasis supplied)

This security of tenure of a pro$ationary employee finds added support in the Biboso!s. 3ictorias 'inin case9 for even as this &ourt ruled in that case that the respondentpu$lic official did not commit 4rave a$use of discretion in dismissin4 the teachers9 claimfor reinstatement folloin4 the e>piration of their contracts, it nevertheless held that

2. This is $y no means to assert that the security of tenure protection of the &onstitutiondoes not apply to pro$ationary employees. The #a$or &ode has isely provided for

such a case thus: 9the termination of employment of pro$ational employees and thoseemployed ith a fi>ed period shall $e su$ject to such re4ulations as the ecretary of#a$or may prescri$e to prevent the circumvention of the ri4ht of the employees to $esecured in their employment as provided herein9. There is no ;uestion here as noted inthe assailed order of <residential >ecutive ssistant &lave, that petitioners did notenjoy a permanent status. urin4 such period they could remain in their position andany circumvention of their ri4hts, in accordance ith the statutory scheme, su$ject toin;uiry and thereafter correction $y the epartment of #a$or. Thus there as the



safe4uard as to their duration of employment $ein4 respected, To that e>tent, theirtenure as secure. ... 9

This $rin4s us to the issue of hether or not, respondent &ru39s termination andCora$olition of his position made on a justifia$le cause. <etitioner justifies such termination

on 4round of retrenchment. %espondent "#%& found this defense untena$le. ?ea4ree, since an e>amination of the records failed to indicate any factual or le4al $asisfor such a plea. "o financial statement of any kind for the year 1D+ or immediatelyprior thereto as su$mitted $y the petitioner to prove its economic difficulties. ts claimof $usiness reverses and imminent dan4er of collapse are nothin4 $ut 4litterin44eneralities.

t cannot $e denied that a host of cases has affirmed the ri4ht of an employer to layoff or dismiss employees due to losses in the operation of $usiness, lack of ork, andconsidera$le reduction in the volume of the employer9s $usiness. n the case at $ar,hoever, petitioner failed to 4o into the specifics of its claimed $usiness reverses. t

prefers to hide $ehind the $lanket o$servation of the then ssistant ecretary of #a$orthat Bthe hotel industry is virtually in crisis as a result of plummetin4 $usinessB. That thehotel industry is in crisis does not, hoever, necessarily mean that petitioner is itselfsufferin4 from $usiness reverses. 0ein4 one of the $etter knon hotels in the country, itcould $e an e>ception. 0ut petitioner9s asserted e>cuses $ein4 in the nature of anaffirmative defense, the $urden lies on its shoulder to su$stantiate such an alle4ationith clear and satisfactory evidence, hich it misera$ly failed to do.

<etitioner likeise ar4ues that it as imperatively necessary to reduce its personnel dueto losses in the operation of its $usiness7 that it is an employer9s prero4ative todetermine ho amon4 its employees should $e retained7 and that in the e>ercise

thereof, it may not $e interfered ith. The only e>ception is hen it can $e shon thatthe employer, under cover of this ri4ht, is proceedin4 a4ainst an employee in an unjustor capricious manner. pecifically, the poer of an employer to terminate a pro$ationaryemployment contract is su$ject to various limitations. 'irst, it must $e e>ercised inaccordance ith the specific re;uirements of the contract. f a particular time isprescri$ed, the termination must $e done ithin such time. hould the contract re;uire aritten notice, then such form should $e used. econdly, the dissatisfaction of theemployer must $e real and in 4ood faith, not fei4ned so as to circumvent the contract orthe la7 and thirdly, there must $e no unlaful discrimination in the dismissal. 10

The records sho that petitioner had four (/) 4ardeners under pro$ationaryemployment. %espondent &ru3 as one of them. ?ithin the period of his pro$ationaryemployment, &ru3 as made a lead 4ardener, clearly a reco4nition of his 4oodperformance and competent service. ?hen petitioner, pursuant to its alle4ed policy ofretrenchment, a$olished &ru39s position as 4ardener, the three other 4ardeners in itsemploy under similar pro$ationary contract ere retained. To of them, %ufino rcisand l$ert 5anila, ere even promoted and appointed as steards. The third one,

rturo %eyes, as retained as sole 4ardener. <etitioner justifies &ru3 not $ein4 made asteard he havin4 reached only third year hi4h school. 0ut if a third year hi4h school



may not $e promoted to $e a steard from that of $ein4 a 4ardener, ho then can rcisho as merely a si>th 4rader, ;ualify for promotion from 4ardener to steardQ -ure>amination of the records failed to reveal any standard or criteria adopted $y thepetitioner in makin4 the promotion and selection in ;uestion thus leadin4 us to theconclusion that &ru3 as ar$itrarily terminated andCor dismissed.

?hat makes &ru39s dismissal hi4hly suspicious is that it took place at a time hen heneeds only $ut a day to $e eli4i$le as a re4ular employee. That he is competent findssupport in his $ein4 promoted to a lead 4ardener in so short span of less than si> (+)months. There is that stron4 presumption in his favor that his performance had $eensatisfactory. 0y terminatin4 his employment andCor a$olishin4 his position ith $ut onlyone day remainin4 in his pro$ationary appointment, petitioner deprived &ru3 of;ualifyin4 as, a re4ular employee ith its concommitant ri4hts and privile4es. &ru3 asalso deprived of his only means of livelihood upon a va4ue and empty assertion ofBretrenchment.

=ery recently, e had occasion to rule that the prero4ative of mana4ement to dismiss or layoff an employee must $e done ithout a$use of discretion, for hat is at stake is notonly petitioner9s position $ut also his means of livelihood. 11 The ri4ht of an employer tofreely select or dischar4e his employees is su$ject to re4ulation $y the tate, $asicallyin the e>ercise of its paramount police poer. 12 This is so $ecause the preservation ofthe lives of the citi3ens is a $asic duty of the tate, more vital than the preservation ofcorporate profits. 1$

n the final analysis, hat is in issue is the correctness of the findin4s of facts made $ythe "ational #a$or %elations &ommission. uch findin4s of the &ommission are entitledto 4reat respect if supported $y su$stantial evidence 1% as in the present case.

5oreover, alle4ed error in the "ational #a$or %elations &ommission9s factual findin4 isnot correcti$le $y certiorari $ut $y ordinary appeal. 15

ince there as no valid termination, private respondent is entitled under rticle 28E ofthe #a$or &ode to reinstatement ithout loss of seniority ri4hts and ith $acka4esfrom the time his compensation as ithheld up to the time of his reinstatement.oever, in a num$er of ille4al dismissal cases, 1& this &ourt in the interest of justiceand e>pediency, has adopted the policy of 4rantin4 $acka4es for a ma>imum period of three (*) years ithout ;ualification and deduction.

&onsiderin4 that this case has $een pendin4 since 5arch 2!, 1DD or a period of almost

nine () years no, an aard of $acka4es for three (*) years is just and reasona$le.

?%'-%, the appealed decision is here$y 5-' insofar as the payment of$acka4es is concerned in that the petitioner is ordered to pay private respondent &ru3three (*) years $acka4es computed on the $asis of his pay as of 5arch 1, 1DD,ithout ;ualification and deduction.



>cept as thus modified, the appealed decision is ''%5 in all other respects. Therestrainin4 order earlier issued is here$y ordered lifted andCor set aside. --%%.

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