G.R. No.

151227
July 14, 2008
GREGORIO S. SABEROLA, Petitioner,
vs. RONALD SUAREZ and RAYMUNDO LIRASAN,
JR., Respondents.
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court assailing the Decision 1dated
March 30, 2001 and the Resolution2 dated November 23,
2001 of the Court of Appeals (CA) in CA-G.R. SP No.
56503.
The Facts
The case stemmed from a Complaint3 for illegal dismissal
with money claims filed on November 10, 1997 by
respondents against petitioner before the Regional
Arbitration Branch of Davao City. Petitioner is the owner
and manager of G.S. Saberola Electrical Services, a firm
engaged in the construction business specializing in
installing electrical devices in subdivision homes and in
commercial and non-commercial buildings. Respondents
were employed by petitioner as electricians. They worked
from Monday to Saturday and, occasionally, on Sundays,
with a daily wage of P110.00.
Respondent Ronald Suarez (Suarez) was employed by
petitioner from February 1995 until October 1997; while
respondent Raymundo Lirasan, Jr. (Lirasan) worked from
February 1995 until September 1997.4 Respondent
Lirasan alleged that he was dismissed without cause and
due process. He was merely informed by petitioner that his
services were no longer needed without any explanation
why he was terminated. Both respondents claimed that
they received compensation below the minimum wage.
They were given a fixed rate of P110.00 while the
mandated minimum wage was P135.00, per Wage Order
No. 5 issued by the Regional Tripartite and Productivity
Board of Region XI. They also alleged that they did not
receive 13th month pay for the entire period of their
employment.5 Both likewise claimed payment of overtime
and service incentive leave.

Arbiter in a Resolution8 dated July 9, 1999. It maintained

that respondents were project employees of petitioner.
However, it declared that respondent Suarez was illegally
dismissed from employment. It also awarded the monetary
claims of respondents. The dispositive portion of the
Resolution reads:
WHEREFORE, foregoing considered, the decision on
appeal is hereby MODIFIED declaring complainant
RONALD SUAREZ illegally dismissed and directing
respondent to pay the following
A. RONALD SUAREZ
1. Separation Pay
2. Wage Differential
3. 13th Month pay
4. Service Incentive Leave Pay
B. RAYMUNDO LIRASAN, JR.
1. Wage Differential
2. 13th Month Pay
3. Service Incentive Leave Pay
C. Attorneys fees equivalent to 10% of the total
award. SO ORDERED.9
Petitioner filed a motion for reconsideration. On October
29, 1999, the NLRC issued a Resolution10 denying the
same. A detailed computation of the money claims
awarded to respondents was incorporated in the
Resolution, summarized as follows:
1) Ronald Suarez:
1.

Separation Pay

P10,530.00

2.

Wage Differential

P 8,268.00

3.

13th Month Pay

P 8,790.16

4.

SILP

P 1,350.00

TOTAL

P28,938.16

2) Raymundo Lirasan, Jr.

In his defense, petitioner averred that respondents were
part-time project employees and were employed only
when there were electrical jobs to be done in a particular
housing unit contracted by petitioner. He maintained that
the services of respondents as project employees were
coterminous with each project. As project employees, the
time of rendition of their services was not fixed. Thus, there
was no practical way of determining the appropriate
compensation of the value of respondents
accomplishment, as their work assignment varied
depending on the needs of a specific project.6
On September 24, 1998, the Labor Arbiter rendered a
Decision7 dismissing the complaint for lack of merit. The
Labor Arbiter ruled that respondents were project
employees and were not entitled to their monetary claims.
On appeal, the National Labor Relations Commission
(NLRC) affirmed with modification the findings of the Labor

1.

Wage Differential

P 7,878.00

2.

13th Month Pay

P 8,497.66

3.

SILP

P 1,350.00

4.

TOTAL

P17,725.66

Attorneys fees

P 4,666.3811

Petitioner filed a petition for certiorari under Rule 65 of the

Rules of Court before the CA. Petitioner asserted that the
NLRC committed grave abuse of discretion when it
declared him guilty of illegally terminating respondent
Suarez and in awarding both respondents their monetary
claims.

On March 30, 2001, the CA rendered a

Decision12 dismissing the petition for lack of merit.
Petitioner filed a motion for reconsideration which,
however, was denied in a Resolution13 dated November
23, 2001. Hence, this petition.
The Issues
Petitioner submits the following issues for resolution: (1)
whether respondent Suarez was illegally terminated, and
(2) whether respondents are entitled to their monetary
claims.
The Ruling of the Court
Petitioners business, specializing in installing electrical
devices, needs electricians only when there are electrical
devices to be installed in subdivision homes or buildings
covered by an appropriate contract. Petitioner, as an
electrical contractor, depends for his business on the
contracts that he is able to obtain from real estate
developers and builders of buildings. Thus, the work
provided by petitioner depends on the availability of such
contracts or projects. The duration of the employment of
his work force is not permanent but coterminous with the
projects to which the workers are assigned. Viewed in this
context, the respondents are considered as project
employees of petitioner. Indeed, the status of respondents
as project employees was upheld by the Court of Appeals
based on the findings of facts of the Labor Arbiter and the
NLRC.
A project employee is one whose "employment has been
fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of
the engagement of the employee or where the work or
service to be performed is seasonal in nature and the
employment is for the duration of the season." 14
However, respondents, even if working as project
employees, enjoy security of tenure. Section 3, Article XIII,
of the Constitution guarantees the right of workers to
security of tenure, and because of this, an employee may
only be terminated for just15 or authorized16 causes that
must comply with the due process
requirements17 mandated by law.
In Archbuild Masters and Construction, Inc. v. NLRC,18 we
held that the employment of a project worker hired for a
specific phase of a construction project is understood to be
coterminous with the completion of such phase and not
upon the accomplishment of the whole project. A worker
hired for a particular phase of a construction project can be
dismissed upon the completion of such phase. Project
workers in the construction industry may also be
terminated as the phase of a construction project draws
nearer to completion when their services are no longer
needed, provided they are not replaced.19
Nonetheless, when a project employee is dismissed, such
dismissal must still comply with the substantive and
procedural requirements of due process. Termination of his
employment must be for a lawful cause and must be done

in a manner which affords him the proper notice and

hearing.20
In this regard, we hold that respondent Suarez was
illegally terminated by petitioner. A project employee must
be furnished a written notice of his impending dismissal
and must be given the opportunity to dispute the legality of
his removal.21 In termination cases, the burden of proof
rests on the employer to show that the dismissal was for a
just or authorized cause. Employers who hire project
employees are mandated to state and prove the actual
basis for the employees dismissal once its veracity is
challenged.22
Petitioner failed to present any evidence to disprove the
claim of illegal dismissal. It was uncontested that the last
work of the respondents with petitioners company was the
electrical installation in some housing units at the Ciudad
Esperanza Housing Project. No evidence was presented
by petitioner to show the termination of the project which
would justify the cessation of the work of respondents.
Neither was there proof that petitioner complied with the
substantive and procedural requirements of due process.
As to respondents monetary claims, we uphold the
findings of the NLRC. As employer, the petitioner has the
burden of proving that the rate of pay given to the
respondents is in accordance with the minimum fixed by
the law and that he paid thirteenth month pay, service
incentive leave pay and other monetary claims.
We have consistently held that as a rule, one who pleads
payment has the burden of proving it. Even when the
plaintiff alleges non-payment, still the general rule is that
the burden rests on the defendant to prove payment,
rather than on the plaintiff to prove non-payment. The
debtor has the burden of showing with legal certainty that
the obligation has been discharged by payment. When the
existence of a debt is fully established by the evidence
contained in the record, the burden of proving that it has
been extinguished by payment devolves upon the debtor
who invokes such a defense against the claim of the
creditor. When the debtor introduces some evidence of
payment, the burden of going forward with the evidence
as distinct from the general burden of proof shifts to the
creditor, who is then under a duty of producing some
evidence to show non-payment.23
In the instant case, the burden of proving payment of the
monetary claims rests on petitioner, being the employer of
respondents. This is because the pertinent personnel files,
payrolls, records, remittances and other similar documents
that would show that the claims have been paid are not in
the possession of the worker but in the custody and
absolute control of the employer.24 Sadly, the petitioner
failed to do so.WHEREFORE, in lieu of the foregoing, the
instant petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No.
56503 are hereby AFFIRMED. SO ORDERED.

G.R. No. 149440

January 28, 2003
HACIENDA FATIMA and/or PATRICIO VILLEGAS,
ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERSFOOD AND GENERAL TRADE, respondents.
Although the employers have shown that respondents
performed work that was seasonal in nature, they failed to
prove that the latter worked only for the duration of one
particular season. In fact, petitioners do not deny that these
workers have served them for several years already. Hence,
they are regular not seasonal employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the
Rules of Court, seeking to set aside the February 20, 2001
Decision of the Court of Appeals 1 (CA) in CA-GR SP No.
51033. The dispositive part of the Decision reads:
"WHEREFORE, premises considered, the instant special
civil action for certiorari is hereby DENIED." 2
On the other hand, the National Labor Relations
Commission (NLRC) Decision, 3 upheld by the CA,
disposed in this wise:
"WHEREFORE, premises considered, the decision of the
Labor Arbiter is hereby SET ASIDE and VACATED and a
new one entered declaring complainants to have been
illegally dismissed. Respondents are hereby ORDERED to
reinstate complainants except Luisa Rombo, Ramona
Rombo, Bobong Abriga and Boboy Silva to their previous
position and to pay full backwages from September 1991
until reinstated. Respondents being guilty of unfair labor
practice are further ordered to pay complainant union the
sum of P10,000.00 as moral damages and P5,000.00 as
exemplary damages." 4
The Facts
The facts are summarized in the NLRC Decision as follows:
"Contrary to the findings of the Labor Arbiter that
complainants [herein respondents] refused to work and/or
were choosy in the kind of jobs they wanted to perform,
the records is replete with complainants' persistence and
dogged determination in going back to work.
"Indeed, it would appear that respondents did not look with
favor workers' having organized themselves into a union.
Thus, when complainant union was certified as the
collective bargaining representative in the certification
elections, respondents under the pretext that the result
was on appeal, refused to sit down with the union for the
purpose of entering into a collective bargaining
agreement. Moreover, the workers including complainants
herein were not given work for more than one month. In
protest, complainants staged a strike which was however
settled upon the signing of a Memorandum of Agreement
which stipulated among others that:

'a) The parties will initially meet for CBA negotiations

on the 11th day of January 1991 and will endeavor to
conclude the same within thirty (30) days.
'b) The management will give priority to the women
workers who are members of the union in case work
relative . . . or amount[ing] to gahit and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his normal
work load which is six (6) days in a week.
'd) The management will provide fifteen (15) wagons
for the workers and that existing workforce prior to
the actual strike will be given priority. However, in
case the said workforce would not be enough, the
management can hire additional workers to
supplement them.
'e) The management will not anymore allow the
scabs, numbering about eighteen (18) workers[,] to
work in the hacienda; and
'f) The union will immediately lift the picket upon
signing of this agreement.'
"However, alleging that complainants failed to load the
fifteen wagons, respondents reneged on its commitment
to sit down and bargain collectively. Instead, respondent
employed all means including the use of private armed
guards to prevent the organizers from entering the
premises.
"Moreover, starting September 1991, respondents did not
any more give work assignments to the complainants
forcing the union to stage a strike on January 2, 1992. But
due to the conciliation efforts by the DOLE, another
Memorandum of Agreement was signed by the
complainants and respondents which provides:
'Whereas the union staged a strike against management
on January 2, 1992 grounded on the dismissal of the
union officials and members;
'Whereas parties to the present dispute agree to settle the
case amicably once and for all;
'Now therefore, in the interest of both labor and
management, parties herein agree as follows:
'1. That the list of the names of affected union
members hereto attached and made part of this
agreement shall be referred to the Hacienda payroll
of 1990 and determine whether or not this concerned
Union members are hacienda workers;
'2. That in addition to the payroll of 1990 as
reference, herein parties will use as guide the
subjects of a Memorandum of Agreement entered
into by and between the parties last January 4, 1990;
'3. That herein parties can use other employment
references in support of their respective claims

whether or not any or all of the listed 36 union

members are employees or hacienda workers or not
as the case may be;
'4. That in case conflict or disagreement arises in the
determination of the status of the particular hacienda
workers subject of this agreement herein parties
further agree to submit the same to voluntary
arbitration;
'5. To effect the above, a Committee to be chaired by
Rose Mengaling is hereby created to be composed of
three representatives each and is given five working
days starting Jan. 23, 1992 to resolve the status of
the subject 36 hacienda workers. (Union
representatives: Bernardo Torres, Martin Alas-as,
Ariston Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the
Minutes of the Conciliation Meeting showed as follows:
'The meeting started at 10:00 A.M. A list of
employees was submitted by Atty. Tayko based on
who received their 13th month pay. The following are
deemed not considered employees:

1. Luisa Rombo

2. Ramona Rombo

3. Bobong Abrega

4. Jesus Silva

10. Cresensio Abrega

5. Fernando Silva

11. Ariston Eruela Sr.

6. Ernesto Tejares

12. Ariston Eruela Jr.'

"When respondents again reneged on its commitment;

complainants filed the present complaint.
"But for all their persistence, the risk they had to undergo
in conducting a strike in the face of overwhelming odds,
complainants in an ironic twist of fate now find themselves
being accused of 'refusing to work and being choosy in the
kind of work they have to perform'." 5 (Citations omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was
seasonal in nature, they were considered to be merely on
leave during the off-season and were therefore still employed
by petitioners. Moreover, the workers enjoyed security of
tenure. Any infringement upon this right was deemed by the
CA to be tantamount to illegal dismissal.
The appellate court found neither "rhyme nor reason in
petitioner's argument that it was the workers themselves who
refused to or were choosy in their work." As found by the
NLRC, the record of this case is "replete with complainants'
persistence and dogged determination in going back to
work." 6
The CA likewise concurred with the NLRC's finding that
petitioners were guilty of unfair labor practice.
Hence this Petition. 7

4. Boboy Silva

'The name Orencio Rombo shall be verified in the

1990 payroll.
'The following employees shall be reinstated
immediately upon availability of work:

1. Jose Dagle

2. Rico Dagle

3. Ricardo Dagle

Issues
Petitioners raise the following issues for the Court's
consideration:
"A. Whether or not the Court of Appeals erred in holding
that respondents, admittedly seasonal workers, were
regular employees, contrary to the clear provisions of
Article 280 of the Labor Code, which categorically state
that seasonal employees are not covered by the definition
of regular employees under paragraph 1, nor covered
under paragraph 2 which refers exclusively to casual
employees who have served for at least one year.

7. Alejandro Tejares

8. Gaudioso Rombo

9. Martin Alas-as Jr.

"B. Whether or not the Court of Appeals erred in rejecting

the ruling in Mercado, . . . and relying instead on rulings
which are not directly applicable to the case at bench, viz,
Philippine Tobacco, Bacolod-Murcia, and Gaco, . . .
"C Whether or not the Court of Appeals committed grave
abuse of discretion in upholding the NLRC's conclusion
that private respondents were illegally dismissed, that
petitioner[s were] guilty of unfair labor practice, and that
the union be awarded moral and exemplary damages." 8

Consistent with the discussion in petitioners' Memorandum,

we shall take up Items A and B as the first issue and Item C
as the second.
The Court's Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are
generally reviewed by this Court in petitions for review on
certiorari of CA decisions. 9 Questions of fact are not
entertained. 10 The Court is not a trier of facts and, in labor
cases, this doctrine applies with greater force. 11 Factual
questions are for labor tribunals to resolve. 12 In the present
case, these have already been threshed out by the NLRC. Its
findings were affirmed by the appellate court.
Contrary to petitioners' contention, the CA did not err when it
held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"Art. 280. Regular and Casual Employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed
is seasonal in nature and the employment is for the
duration of the season.
"An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such activity exist." (Italics supplied)
For respondents to be excluded from those classified as
regular employees, it is not enough that they perform work or
services that are seasonal in nature. They must have also
been employed only for the duration of one season. The
evidence proves the existence of the first, but not of the
second, condition. The fact that respondents with the
exception of Luisa Rombo, Ramona Rombo, Bobong Abriga
and Boboy Silva repeatedly worked as sugarcane workers
for petitioners for several years is not denied by the latter.
Evidently, petitioners employed respondents for more than
one season. Therefore, the general rule of regular
employment is applicable.
In Abasolo v. National Labor Relations Commission, 13 the
Court issued this clarification:
"[T]he test of whether or not an employee is a regular
employee has been laid down in De Leon v. NLRC, in
which this Court held:

"The primary standard, therefore, of determining regular

employment is the reasonable connection between the
particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the
usual trade or business of the employer. The connection
can be determined by considering the nature of the work
performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has
been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the
law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to
such activity and while such activity exists.
xxx
xxx
xxx
". . . [T]he fact that [respondents] do not work continuously
for one whole year but only for the duration of the . . .
season does not detract from considering them in regular
employment since in a litany of cases this Court has
already settled that seasonal workers who are called to
work from time to time and are temporarily laid off during
off-season are not separated from service in said period,
but merely considered on leave until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was
not applicable to the case at bar. In the earlier case, the
workers were required to perform phases of agricultural work
for a definite period of time, after which their services would
be available to any other farm owner. They were not hired
regularly and repeatedly for the same phase/s of agricultural
work, but on and off for any single phase thereof. On the
other hand, herein respondents, having performed the same
tasks for petitioners every season for several years, are
considered the latter's regular employees for their respective
tasks. Petitioners' eventual refusal to use their services
even if they were ready, able and willing to perform their usual
duties whenever these were available and hiring of other
workers to perform the tasks originally assigned to
respondents amounted to illegal dismissal of the latter.
The Court finds no reason to disturb the CA's dismissal of
what petitioners claim was their valid exercise of a
management prerogative. The sudden changes in work
assignments reeked of bad faith. These changes were
implemented immediately after respondents had organized
themselves into a union and started demanding collective
bargaining. Those who were union members were effectively
deprived of their jobs. Petitioners' move actually amounted to
unjustified dismissal of respondents, in violation of the Labor
Code.
"Where there is no showing of clear, valid and legal cause for
the termination of employment, the law considers the matter a
case of illegal dismissal and the burden is on the employer to
prove that the termination was for a valid and authorized
cause." 16 In the case at bar, petitioners failed to prove any
such cause for the dismissal of respondents who, as
discussed above, are regular employees.
Second Issue:
Unfair Labor Practice

The NLRC also found herein petitioners guilty of unfair labor

practice. It ruled as follows:
"Indeed, from respondents' refusal to bargain, to their acts
of economic inducements resulting in the promotion of
those who withdrew from the union, the use of armed
guards to prevent the organizers to come in, and the
dismissal of union officials and members, one cannot but
conclude that respondents did not want a union in their
haciendaa clear interference in the right of the workers
to self-organization." 17
We uphold the CA's affirmation of the above findings. Indeed,
factual findings of labor officials, who are deemed to have
acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even
finality. Their findings are binding on the Supreme
Court. 18 Verily, their conclusions are accorded great weight
upon appeal, especially when supported by substantial
evidence. 19 Consequently, the Court is not duty-bound to
delve into the accuracy of their factual findings, in the
absence of a clear showing that these were arbitrary and
bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries
with it the sanction of moral and exemplary damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision AFFIRMED. Costs against petitioners. SO ORDERED.

attorneys fees against the petitioners. The complaints were

later consolidated.
On March 30, 1999, after due proceedings, the Labor Arbiter
rendered a decision in favor of the respondents:
WHEREFORE, premises considered, judgment is hereby
rendered declaring that complainants have indeed been
illegally dismissed from their employment.
Accordingly, respondents are hereby ordered to reinstate
individual complainants to their former positions without loss
of seniority rights and to pay them their backwages as follows:
Complainants Amount
1. Reynaldo Ararao P113,703.20
2. Carlos Ararao P100,372.48
3. Resty Alcoran P100,372.48
4. Richard Coronado P113,703.20
5. Quirino Platero P113,703.20

G.R. No. 164736 October 14, 2005

6. Benito Catapang P113,703.20
UNIVERSAL ROBINA CORPORATION and/or RANDY
GREGORIO, Petitioners,
vs.
BENITO CATAPANG, CARLOS ARARAO, ALVIN
ALCANTARA, RESTY ALCORAN, REYNALDO ARARAO,
JUAN ARISTADO, ELPIDIO VILLANUEVA, JOEL
VILLANUEVA, JONATHAN VILLANUEVA, and JAIME
VILLEGAS, Respondents.
Petitioner Universal Robina Corporation is a corporation duly
organized and existing under the Philippine laws, while
petitioner Randy Gregorio is the manager of the petitioner
companys duck farm in Calauan, Laguna.1
The individual respondents were hired by the petitioner
company on various dates from 1991 to 1993 to work at its
duck farm in Barangay Sto. Tomas, Calauan, Laguna. The
respondents were hired under an employment contract which
provided for a five-month period. After the expiration of the
said employment contracts, the petitioner company would
renew them and re-employ the respondents. This practice
continued until sometime in 1996, when the petitioners
informed the respondents that they were no longer renewing
their employment contracts.2

7. Jose Loria, Jr. P100,372.48

8. Elpidio Villanueva P113,703.20
9. Jonathan Villanueva P113,703.20
10. Baltazar Villanueva P113,703.20
11. Victoriano Loria P144,881.10
12. Roderick Pangao P100,372.48
13. Lito Cabrera P113,703.20
14. Elmer Hiling P113,703.20
15. Jaime Villegas P113,703.20
16. Angelito Conchada P119,192.20
17. Juan Aristado P113,703.20
18. Joel Villanueva P113,703.20

In October 1996, the respondents filed separate complaints

for illegal dismissal, reinstatement, backwages, damages and

19. Ben Cervas P113,703.20

20. Ruel Marikit P113,703.20

TOTAL - P1,015,943.50

21. Ireneo Comendador P113,703.20

SO ORDERED.4

Total ------------------------ P2,339,933.44

On June 21, 1999, the Labor Arbiter issued a Writ of

Execution enforcing the immediate reinstatement of the
respondents as mandated in the March 30, 1999 Decision.

Respondents are likewise ordered to pay fifteen percent

(15%) of the total amount due, or P 350,990.01, as and by
way of attorneys fees.
SO ORDERED.3
On May 17, 1999, the petitioners filed an Appeal
Memorandum with the National Labor Relations Commission
(NLRC) on the ground that the Labor Arbiter erred in ruling
that the respondents are the petitioner companys regular
employees.
Meanwhile, on May 18, 1999, the respondents filed a Motion
for Enforcement of Reinstatement Order with the Labor
Arbiter. On June 3, 1999, the latter issued an Order, which
reads in full:
Finding the "Motion for Enforcement of Reinstatement Order"
dated 18 May 1999, filed by the complainants to be in order,
respondents are hereby directed to immediately comply in
good faith to the reinstatement aspect of the Decision of this
Office dated 30 March 1999.
Furthermore, it appearing from the records that several
individuals in this case were inadvertently omitted as partycomplainants in the aforesaid Decision, clarification is hereby
made that the complainants hereinbelow set forth are to be
deemed included in the coverage of the said decision with the
corresponding right(s) to their backwages, to wit:
1. Alvin Alcantara - P129,126.40
2. Onofre Casano - P106,917.20
3. Joseph Chuidian - P104,165.10
4. Ramon Joyosa - P128,029.20
5. Pablito Redondo - P105,409.20
6. Ramil Roxas - P109,330.00
7. Resty Salazar - P105,296.10
8. Noel Trinidad - P108,312.10
9. Felicisimo Varela - P119,358.20

On July 13, 1999, the petitioners manifested to the Labor

Arbiter that they can reinstate only 17 of the 30 employees in
view of the phase out of the petitioner companys Agricultural
Section as early as 1996. They averred that there were no
other available positions substantially similar to the positions
previously occupied by the other 13 respondents, but that 10
of them could be accommodated at the farms Duck Dressing
Section which operates at an average of three days a week
only.5
On August 2, 1999, the Sheriff filed a Report stating that the
petitioners had not yet reinstated the respondents.6The
respondents then urged the Labor Arbiter to order their
physical or payroll reinstatement and to cite the petitioners in
contempt. On November 26, 1999, the Labor Arbiter issued
an Order7 directing the petitioners, under pain of contempt, to
comply with the March 30, 1999 Decision.
On December 16, 1999, 17 employees were reinstated to
their former positions. Thereafter, the respondents moved for
the immediate reinstatement of the remaining 13
respondents. In the meantime, the petitioners manifested to
the Labor Arbiter about the closure of the duck farm effective
March 15, 2000.8
On February 9, 2000, the Labor Arbiter issued an
Order9 directing the petitioners to immediately effect the
actual or payroll reinstatement of the remaining 13
respondents. In the said Order, the petitioners were likewise
directed to settle whatever financial accountabilities they may
have with the said respondents due to the delay in complying
with the reinstatement aspect of the March 30, 1999 Decision.
On February 16, 2000, the respondents manifested that the
petitioners still failed and refused to comply with the February
9, 2000 Order. That same day, the Labor Arbiter issued an
Alias Writ of Execution commanding the Sheriff to cause the
immediate reinstatement of the 13 respondents and to collect
their withheld salaries.10
On February 21, 2000, the respondents moved for the
issuance of a notice of garnishment to collect the
accumulated withheld wages of the 17 respondents who were
reinstated on December 16, 1999 amounting toP649,400.00.
The Labor Arbiter granted the motion and issued a Second
Alias Writ of Execution directing the Sheriff to proceed to
collect the said amount plus execution fees.11

Thereafter, the petitioners filed an urgent motion to reconsider

the February 9, 2000 Order and to quash the Alias Writ of
Execution. They reiterated their previous contention that they
are unable to comply with the order either because the
section to which the 13 respondents were previously assigned
had been phased out or the positions previously held by them
have already been filled up.12
On March 1, 2000, the Labor Arbiter issued an
Order13 denying the petitioners motion to quash insofar as the
reinstatement aspect is concerned as well as the motion to
reconsider and set aside the February 9, 2000 Order. In case
of failure to comply with the reinstatement of the 13
respondents, the Labor Arbiter directed the petitioner
company to pay them separation pay instead. 14
On March 13, 2000, the petitioners filed a Memorandum and
Notice of Appeal with Prayer for the Issuance of a Temporary
Restraining Order15 with the NLRC, assailing the February 9,
2000 and March 1, 2000 Orders and the two Alias Writs of
Execution issued by the Labor Arbiter.

reconsideration. They then prayed for an extension of 10

days, or until October 3, 2003, to submit a motion for
reconsideration.
Realizing their error, the petitioners filed their Motion for
Reconsideration two days later. In a Resolution 21 dated
September 30, 2003, the CA denied the petitioners earlier
motion for extension of time for being a prohibited pleading.
Subsequently, the petitioners filed their Urgent Motion to
Admit Petitioners Motion for Reconsideration, but the CA
merely noted the petitioners motion for reconsideration in its
April 15, 2004 Resolution. This prompted the petitioners to file
a Motion to Resolve Petitioners Motion for
Reconsideration.22 Finding no cogent reason to depart from its
previous resolution denying the motion for extension of time
to file a motion for reconsideration, the CA denied the said
motion for lack of merit on July 19, 2004.23
Hence, this petition for review wherein the petitioners raise
the following grounds:
I.

On November 22, 2000, the NLRC affirmed the decision of

the Labor Arbiter with the modification that the award of
attorneys fees was reduced to 10% of the total monetary
award.16
Aggrieved, the petitioners filed a petition for certiorari with the
Court of Appeals (CA). On August 21, 2003, the CA denied
the petition for lack of merit.17 The CA held that after rendering
more than one year of continuous service, the respondents
became regular employees of the petitioners by operation of
law. Moreover, the petitioners used the five-month contract of
employment as a convenient subterfuge to prevent the
respondents from becoming regular employees and such
contractual arrangement should be struck down or
disregarded as contrary to public policy or morals. The
petitioners act of repeatedly and continuously hiring the
respondents in a span of three to five years to do the same
kind of work negates their assertion that the respondents
were hired for a specific project or undertaking only. As to the
issue of the failure to reinstate the 13 respondents pending
appeal, the CA opined that the petitioners should have at
least reinstated them in the payroll if there were indeed no
longer any available positions for which they could be
accommodated.18 Finally, the CA did not believe that the
petitioners counsel was not furnished with copies of the
assailed orders and the alias writs of execution considering
that, after the issuance of the said orders, the petitioners were
able to file several pleadings questioning the same.19
On September 23, 2003, the petitioners filed a Manifestation
and Motion for Additional Time to File a Motion for
Reconsideration of the CA Decision.20 They alleged therein
that they received a copy of the decision on September 8,
2003 and had until September 23, 2003 to file a motion for

THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT

RULED THAT THE RESPONDENTS ATTAINED THE
STATUS OF REGULAR EMPLOYMENT AFTER THE LAPSE
OF ONE YEAR FROM THE DATE OF THEIR
EMPLOYMENT.
II.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT
RULED THAT DESPITE THE UNAVAILABILITY OF
POSITIONS WHERE THE THIRTEEN (13) RESPONDENTS
ARE TO BE REINSTATED THEY SHOULD STILL BE
REINSTATED THROUGH PAYROLL.
III.
THE COURT OF APPEALS SERIOUSLY ERRED IN FAILING
TO RESOLVE THE ISSUE OF WHETHER OR NOT THE
PETITIONERS SHOULD BE HELD LIABLE FOR THE
PAYMENT OF THE ALLEGED WITHHELD SALARIES OF
THE RESPONDENTS FROM THE DATE OF ISSUANCE OF
THE WRIT DESPITE THAT RESPONDENTS BELATED OR
NON-REINSTATEMENT CANNOT BE ATTRIBUTED TO THE
PETITIONERS.
IV.
THE COURT OF APPEALS SHOULD HAVE RESOLVED
PETITIONERS MOTION FOR RECONSIDERATION
CONSIDERING THAT THE DELAY WAS ONLY FOR TWO (2)
DAYS AND WAS THE RESULT OF AN HONEST MISTAKE.24

The petitioners submit that the respondents are not regular

employees. They aver that it is of no moment that the
respondents have rendered service for more than a year
since they were covered by the five-month individual
contracts to which they duly acquiesced. The petitioners
contend that they were free to terminate the services of the
respondents at the expiration of

The respondents aver that they acquired the status as regular

employees after rendering one year of service to the
petitioner company. They contend that the contracts providing
for a fixed period of employment should be struck down as
contrary to public policy, morals, good customs or public order
as it was designed to preclude the acquisition of tenurial
security.31

their individual contracts. The petitioners maintain that, in

doing so, they merely implemented the terms of the
contracts.25

The respondents contend that the order directing their payroll

reinstatement was proper considering that the petitioners
have failed to actually reinstate them.32 They assert that the
delay in the reinstatement of the 13 respondents could only
be attributed to the petitioners; hence, they are liable for
withheld salaries to these employees.33

The petitioners assert that the respondents contracts of

employment were not intended to circumvent security of
tenure. They point out that the respondents knowingly and
voluntarily agreed to sign the contracts without the petitioners
having exercised any undue advantage over them. Moreover,
there is no evidence showing that the petitioners exerted
moral dominance on the respondents.26
The petitioners further assert that they cannot be compelled
to actually reinstate, or merely reinstate in the payroll the 13
respondents considering there are no longer any available
positions in the company. They submit that reinstatement
presupposes that the previous positions from which the
respondents had been removed still exist or that there are
unfilled positions, more or less, of similar nature as the ones
previously occupied by the said employees. Consequently,
they cannot be made to pay the salaries of these employees
from the time the writ of execution was issued. 27
Finally, the petitioners aver that their motion for
reconsideration of the CA Decision should have been
admitted by the CA considering that the delay was only for
two days and such delay was due to an honest mistake. They
maintain that the ends of substantial justice would have been
better served if the motion for reconsideration was resolved
since it raised critical issues previously raised in the petition
but not resolved by the CA.28
For their part, the respondents aver that the instant petition
should be dismissed outright because the CA Decision has
already become final since the petitioners filed their motion for
reconsideration beyond the reglementary 15-day period. They
also aver that the motion for extension of time to file a motion
for reconsideration, a prohibited pleading, did not suspend the
running of the period to file a motion for reconsideration,
which is also the period for filing an appeal with this Court.
Hence, at the time the present petition was filed with this
Court, the period for filing the appeal had already
lapsed.29 The respondents further aver that the petition should
likewise be dismissed for lack of a verified statement of
material dates. They assert that the Rules of Court requires a
separate verified statement of material dates and its
incorporation in the body of the petition is not substantial
compliance of such requirement.30

It appears that the present petition has, indeed, been filed

beyond the reglementary period for filing a petition for review
under Rule 45 of the Rules of Court. This period is set forth in
Section 2, Rule 45, which provides as follows:
SEC. 2. Time for filing; extension. The petition shall be filed
within fifteen (15) days from notice of the judgment or final
order or resolution appealed from, or of the denial of the
petitioners motion for new trial or reconsiderationfiled in due
time after notice of judgment. (Emphasis supplied.)
In conjunction with the said provision, Section 1, Rule 52 of
the same Rules provides:
SEC. 1. Period for filing. A party may file a motion for
reconsideration of a judgment or final resolution within fifteen
(15) days from notice threof, with proof of service on the
adverse party.
Clearly, the period for filing a motion for reconsideration and a
petition for review with this Court are the same, that is, 15
days from notice of the judgment. When an aggrieved party
files a motion for reconsideration within the said period, the
period for filing an appeal is suspended. If the motion is
denied, the aggrieved party is given another 15-day period
from notice of such denial within which to file a petition for
review under Rule 45. It must be stressed that the aggrieved
party will be given a fresh 15-day period only when he has
filed his motion for reconsideration in due time on or before
the expiration of the original 15-day period. Otherwise, if the
motion for reconsideration is filed out of time and no appeal
has been filed, the subject decision becomes final and
executory.34 As such, it becomes immutable and can no
longer be attacked by any of the parties or be modified,
directly or indirectly, even by the highest court of the land.35
The petitioners received the CA Decision on September 8,
2003; hence, they had until September 23, 2003 within which
to file a motion for reconsideration, or an appeal, through a
petition for review, with this Court. Instead, the petitioners filed
a motion for extension of time to file a motion for

reconsideration on September 23, 2003, which is a prohibited

pleading.36 Thus, it did not suspend the running of the period
for filing an appeal. Consequently, the period to file a petition
for review with this Court also expired on September 23,
2003. Instead of going straight to this Court to attempt to file a
petition for review (which had already expired), the petitioners
pursued recourse in the CA by filing their motion for
reconsideration two days later, or on September 25, 2003.
The CA merely noted the same. Dissatisfied, the petitioners
subsequently filed a motion to resolve their motion for
reconsideration. The CA acted on this motion only on July 19,
2004 and denied the same for lack of merit.
In filing their petition for review with this Court, the petitioners
counted the 15-day period from their receipt of the July 19,
2004 CA Resolution on August 4, 2004. Hence, according to
their Motion for Extension of Time to File Petition for Review
which they filed on August 19, 2004, they had until that day
within which to file a petition for review. They then asked the
Court that they be granted an extension of 30 days, or until
September 21, 2004 within which to file their petition. The
Court granted the motion on the belief that the petitioners
motion for reconsideration before the CA was duly filed and
that the assailed July 19, 2004 CA Resolution had denied the
said motion. Thereafter, the petitioners filed their petition for
review on September 20, 2004.
It is, therefore, evident from the foregoing that the present
petition was filed way beyond the reglementary period.
Hence, its outright dismissal would be proper. The perfection
of an appeal in the manner and within the period prescribed
by law is not only mandatory but jurisdictional, and failure to
perfect an appeal has the effect of rendering the judgment
final and executory.37 Just as a losing party has the privilege
to file an appeal within the prescribed period, so does the
winner also have the correlative right to enjoy the finality of
the decision.38
Anyone seeking exemption from the application of the
reglementary period for filing an appeal has the burden of
proving the existence of exceptionally meritorious instances
warranting such deviation.39 In this case, the petitioners failed
to prove the existence of any fact which would warrant the
relaxation of the rules. In fact, they have not even
acknowledged that their petition was filed beyond the
reglementary period.
In any case, we find that the CA, the NLRC and the Labor
Arbiter correctly categorized the respondents as regular
employees of the petitioner company. In Abasolo v. National
Labor Relations Commission,40 the Court reiterated the test in
determining whether one is a regular employee:
The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to the

usual trade or business of the employer. The test is whether

the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be
determined by considering the nature of work performed and
its relation to the scheme of the particular business or trade in
its entirety. Also, if the employee has been performing the job
for at least a year, even if the performance is not continuous
and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but
only with respect to such activity and while such activity
exists.41
Thus, we quote with approval the following excerpt from the
decision of the CA:
It is obvious that the said five-month contract of employment
was used by petitioners as a convenient subterfuge to prevent
private respondents from becoming regular employees. Such
contractual arrangement should be struck down or
disregarded as contrary to public policy or morals. To uphold
the same would, in effect, permit petitioners to avoid hiring
permanent or regular employees by simply hiring them on a
temporary or casual basis, thereby violating the employees
security of tenure in their jobs.

Petitioners act of repeatedly and continuously hiring private

respondents in a span of 3 to 5 years to do the same kind
of work negates their contention that private respondents
were hired for a specific project or undertaking only.42
Further, factual findings of labor officials who are deemed to
have acquired expertise in matters within their respective
jurisdiction are generally accorded not only respect but even
finality, and bind us when supported by substantial evidence.43
WHEREFORE, premises considered, the petition is DENIED
DUE COURSE. The Decision of the Court of Appeals
is AFFIRMED.
SO ORDERED.

PRICE V INNODATA
This Petition for Review on Certiorari under Rule 45 of the
Rules of Court assails the Decision1 dated 25 September
2006 and Resolution2 dated 15 June 2007 of the Court of
Appeals in CA-G.R. SP No. 72795, which affirmed the
Decision dated 14 December 2001 of the National Labor
Relations Commission (NLRC) in NLRC NCR Case No. 3003-01274-2000 finding that petitioners were not illegally
dismissed by respondents.
The factual antecedents of the case are as follows:
Respondent Innodata Philippines, Inc./Innodata Corporation
(INNODATA) was a domestic corporation engaged in the data
encoding and data conversion business. It employed
encoders, indexers, formatters, programmers, quality/quantity
staff, and others, to maintain its business and accomplish the
job orders of its clients. Respondent Leo Rabang was its
Human Resources and Development (HRAD) Manager, while
respondent Jane Navarette was its Project Manager.
INNODATA had since ceased operations due to business
losses in June 2002.
Petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita
Arbilera were employed as formatters by INNODATA. The
parties executed an employment contract denominated as a
"Contract of Employment for a Fixed Period," stipulating that
the contract shall be for a period of one year,3 to wit:
CONTRACT OF EMPLOYMENT FOR A FIXED PERIOD
xxxx
WITNESSETH: That
WHEREAS, the EMPLOYEE has applied for the position of
FORMATTER and in the course thereof and represented
himself/herself to be fully qualified and skilled for the said
position;

ceases operations with the same force and effect as is such

last day of the month were originally set as the termination
date of this Contract. Further should the Company have no
more need for the EMPLOYEEs services on account of
completion of the project, lack of work (sic) business losses,
introduction of new production processes and techniques,
which will negate the need for personnel, and/or overstaffing,
this contract maybe pre-terminated by the EMPLOYER upon
giving of three (3) days notice to the employee.
6.2 In the event period stipulated in item 1.2 occurs first vis-vis the completion of the project, this contract shall
automatically terminate.
6.3 COMPANYs Policy on monthly productivity shall also
apply to the EMPLOYEE.
6.4 The EMPLOYEE or the EMPLOYER may pre-terminate
this CONTRACT, with or without cause, by giving at least
Fifteen (15) notice to that effect. Provided, that such pretermination shall be effective only upon issuance of the
appropriate clearance in favor of the said EMPLOYEE.
6.5 Either of the parties may terminate this Contract by
reason of the breach or violation of the terms and conditions
hereof by giving at least Fifteen (15) days written notice.
Termination with cause under this paragraph shall be effective
without need of judicial action or approval.4
During their employment as formatters, petitioners were
assigned to handle jobs for various clients of INNODATA,
among which were CAS, Retro, Meridian, Adobe, Netlib,
PSM, and Earthweb. Once they finished the job for one client,
they were immediately assigned to do a new job for another
client.
On 16 February 2000, the HRAD Manager of INNODATA
wrote petitioners informing them of their last day of work. The
letter reads:
RE: End of Contract
Date: February 16, 2000

WHEREAS, the EMPLOYER, by reason of the aforesaid

representations, is desirous of engaging that the (sic) services
of the EMPLOYEE for a fixed period;

Please be informed that your employment ceases effective at

the end of the close of business hours on February 16, 2000. 5

NOW, THEREFORE, for and in consideration of the foregoing

premises, the parties have mutually agreed as follows:

According to INNODATA, petitioners employment already

ceased due to the end of their contract.

TERM/DURATION
The EMPLOYER hereby employs, engages and hires the
EMPLOYEE and the EMPLOYEE hereby accepts such
appointment as FORMATTER effective FEB. 16, 1999 to
FEB. 16, 2000 a period of ONE YEAR.
xxxx

On 22 May 2000, petitioners filed a Complaint6 for illegal

dismissal and damages against respondents. Petitioners
claimed that they should be considered regular employees
since their positions as formatters were necessary and
desirable to the usual business of INNODATA as an encoding,
conversion and data processing company. Petitioners also
averred that the decisions in Villanueva v. National Labor
Relations Commission7 and Servidad v. National Labor
Relations Commission,8 in which the Court already
purportedly ruled "that the nature of employment at Innodata
Phils., Inc. is regular,"9 constituted stare decisis to the present
case. Petitioners finally argued that they could not be
considered project employees considering that their

TERMINATION
6.1 In the event that EMPLOYER shall discontinue operating
its business, this CONTRACT shall also ipso facto terminate
on the last day of the month on which the EMPLOYER

employment was not coterminous with any project or

undertaking, the termination of which was predetermined.
On the other hand, respondents explained that INNODATA
was engaged in the business of data processing, typesetting,
indexing, and abstracting for its foreign clients. The bulk of the
work was data processing, which involved data encoding.
Data encoding, or the typing of data into the computer,
included pre-encoding, encoding 1 and 2, editing,
proofreading, and scanning. Almost half of the employees of
INNODATA did data encoding work, while the other half
monitored quality control. Due to the wide range of services
rendered to its clients, INNODATA was constrained to hire
new employees for a fixed period of not more than one year.
Respondents asserted that petitioners were not illegally
dismissed, for their employment was terminated due to the
expiration of their terms of employment. Petitioners contracts
of employment with INNODATA were for a limited period only,
commencing on 6 September 1999 and ending on 16
February 2000.10 Respondents further argued that petitioners
were estopped from asserting a position contrary to the
contracts which they had knowingly, voluntarily, and willfully
agreed to or entered into. There being no illegal dismissal,
respondents likewise maintained that petitioners were not
entitled to reinstatement and backwages.
On 17 October 2000, the Labor Arbiter11 issued its
Decision12 finding petitioners complaint for illegal dismissal
and damages meritorious. The Labor Arbiter held that as
formatters, petitioners occupied jobs that were necessary,
desirable, and indispensable to the data processing and
encoding business of INNODATA. By the very nature of their
work as formatters, petitioners should be considered regular
employees of INNODATA, who were entitled to security of
tenure. Thus, their termination for no just or authorized cause
was illegal. In the end, the Labor Arbiter decreed:
FOREGOING PREMISES CONSIDERED, judgment is
hereby rendered declaring complainants dismissal illegal and
ordering respondent INNODATA PHILS. INC./INNODATA
CORPORATION to reinstate them to their former or
equivalent position without loss of seniority rights and
benefits. Respondent company is further ordered to pay
complainants their full backwages plus ten percent (10%) of
the totality thereof as attorneys fees. The monetary awards
due the complainants as of the date of this decision are as
follows:
A. Backwages
1. Cherry J. Price
2/17/2000 10/17/2000 at 223.50/day
P5,811.00/mo/ x 8 mos. P46,488.00
2. Stephanie Domingo 46,488.00
(same computation)
3. Lolita Arbilera 46,488.00
(same computation)
Total Backwages P139,464.00
B. Attorneys fees (10% of total award) 13,946.40
Total Award P153,410.40

Respondent INNODATA appealed the Labor Arbiters

Decision to the NLRC. The NLRC, in its Decision dated 14
December 2001, reversed the Labor Arbiters Decision dated
17 October 2000, and absolved INNODATA of the charge of
illegal dismissal.

The NLRC found that petitioners were not regular employees,

but were fixed-term employees as stipulated in their
respective contracts of employment. The NLRC applied Brent
School, Inc. v. Zamora13 and St. Theresas School of
Novaliches Foundation v. National Labor Relations
Commission,14 in which this Court upheld the validity of fixedterm contracts. The determining factor of such contracts is not
the duty of the employee but the day certain agreed upon by
the parties for the commencement and termination of the
employment relationship. The NLRC observed that the
petitioners freely and voluntarily entered into the fixed-term
employment contracts with INNODATA. Hence, INNODATA
was not guilty of illegal dismissal when it terminated
petitioners employment upon the expiration of their contracts
on 16 February 2000.
The dispositive portion of the NLRC Decision thus reads:
WHEREFORE, premises considered, the decision appealed
from is hereby REVERSED and SET ASIDE and a new one
entered DISMISSING the instant complaint for lack of merit. 15
The NLRC denied petitioners Motion for Reconsideration in a
Resolution dated 28 June 2002.16
In a Petition for Certiorari under Rule 65 of the Rules of Court
filed before the Court of Appeals, petitioners prayed for the
annulment, reversal, modification, or setting aside of the
Decision dated 14 December 2001 and Resolution dated 28
June 2002 of the NLRC.lawphil.net
On 25 September 2006, the Court of Appeals promulgated its
Decision sustaining the ruling of the NLRC that petitioners
were not illegally dismissed.
The Court of Appeals ratiocinated that although this Court
declared in Villanueva and Servidad that the employees of
INNODATA working as data encoders and abstractors were
regular, and not contractual, petitioners admitted entering into
contracts of employment with INNODATA for a term of only
one year and for a project called Earthweb. According to the
Court of Appeals, there was no showing that petitioners
entered into the fixed-term contracts unknowingly and
involuntarily, or because INNODATA applied force, duress or
improper pressure on them. The appellate court also
observed that INNODATA and petitioners dealt with each
other on more or less equal terms, with no moral dominance
exercised by the former on latter. Petitioners were therefore
bound by the stipulations in their contracts terminating their
employment after the lapse of the fixed term.
The Court of Appeals further expounded that in fixed-term
contracts, the stipulated period of employment is governing
and not the nature thereof. Consequently, even though
petitioners were performing functions that are necessary or
desirable in the usual business or trade of the employer,
petitioners did not become regular employees because their
employment was for a fixed term, which began on 16
February 1999 and was predetermined to end on 16 February
2000.

The appellate court concluded that the periods in petitioners

contracts of employment were not imposed to preclude
petitioners from acquiring security of tenure; and, applying the
ruling of this Court in Brent, declared that petitioners fixedterm employment contracts were valid. INNODATA did not
commit illegal dismissal for terminating petitioners
employment upon the expiration of their contracts.

statutes are deemed written into the contract, and the parties
are not at liberty to insulate themselves and their relationships
from the impact of labor laws and regulations by simply
contracting with each other.21

The Court of Appeals adjudged:

Art. 280. Regular and Casual Employment. The provisions of

written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of
engagement of the employee or where the work or services to
be performed is seasonal in nature and employment is for the
duration of the season.

WHEREFORE, the instant petition is hereby DENIED and the

Resolution dated December 14, 2001 of the National Labor
Relations Commission declaring petitioners were not illegally
dismissed is AFFIRMED.17
The petitioners filed a Motion for Reconsideration of the aforementioned Decision of the Court of Appeals, which was
denied by the same court in a Resolution dated 15 June
2007.
Petitioners are now before this Court via the present Petition
for Review on Certiorari, based on the following assignment
of errors:
I.
THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR OF LAW AND GRAVE ABUSE OF
DISCRETION WHEN IT DID NOT APPLY THE SUPREME
COURT RULING IN THE CASE OF NATIVIDAD &
QUEJADA THAT THE NATURE OF EMPLOYMENT OF
RESPONDENTS IS REGULAR NOT FIXED, AND AS SO
RULED IN AT LEAST TWO OTHER CASES AGAINST
INNODATA PHILS. INC.
II.
THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR OF LAW IN RULING THAT THE
STIPULATION OF CONTRACT IS GOVERNING AND
NOT THE NATURE OF EMPLOYMENT AS DEFINED BY
LAW.
III.
THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT DID NOT
CONSIDER THE EVIDENCE ON RECORD SHOWING
THAT THERE IS CLEAR CIRCUMVENTION OF THE
LAW ON SECURITY OF TENURE THROUGH
CONTRACT MANIPULATION.18
The issue of whether petitioners were illegally dismissed by
respondents is ultimately dependent on the question of
whether petitioners were hired by INNODATA under valid
fixed-term employment contracts.
After a painstaking review of the arguments and evidences of
the parties, the Court finds merit in the present Petition. There
were no valid fixed-term contracts and petitioners were
regular employees of the INNODATA who could not be
dismissed except for just or authorized cause.
The employment status of a person is defined and prescribed
by law and not by what the parties say it should be. 19 Equally
important to consider is that a contract of employment is
impressed with public interest such that labor contracts must
yield to the common good.20 Thus, provisions of applicable

Regular employment has been defined by Article 280 of the

Labor Code, as amended, which reads:

An employment shall be deemed to be casual if it is not

covered by the preceding paragraph. Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in
which he is employed and his employment shall continue
while such activity exists. (Underscoring ours).
Based on the afore-quoted provision, the following employees
are accorded regular status: (1) those who are engaged to
perform activities which are necessary or desirable in the
usual business or trade of the employer, regardless of the
length of their employment; and (2) those who were initially
hired as casual employees, but have rendered at least one
year of service, whether continuous or broken, with respect to
the activity in which they are employed.
Undoubtedly, petitioners belong to the first type of regular
employees.
Under Article 280 of the Labor Code, the applicable test to
determine whether an employment should be considered
regular or non-regular is the reasonable connection between
the particular activity performed by the employee in relation to
the usual business or trade of the employer.22
In the case at bar, petitioners were employed by INNODATA
on 17 February 1999 as formatters. The primary business of
INNODATA is data encoding, and the formatting of the data
entered into the computers is an essential part of the process
of data encoding. Formatting organizes the data encoded,
making it easier to understand for the clients and/or the
intended end users thereof. Undeniably, the work performed
by petitioners was necessary or desirable in the business or
trade of INNODATA.
However, it is also true that while certain forms of employment
require the performance of usual or desirable functions and
exceed one year, these do not necessarily result in regular
employment under Article 280 of the Labor Code. 23 Under the
Civil Code, fixed-term employment contracts are not limited,

as they are under the present Labor Code, to those by nature

seasonal or for specific projects with predetermined dates of
completion; they also include those to which the parties by
free choice have assigned a specific date of termination.24
The decisive determinant in term employment is the day
certain agreed upon by the parties for the commencement
and termination of their employment relationship, a day
certain being understood to be that which must necessarily
come, although it may not be known when. Seasonal
employment and employment for a particular project are
instances of employment in which a period, where not
expressly set down, is necessarily implied. 25
Respondents maintain that the contracts of employment
entered into by petitioners with INNDOATA were valid fixedterm employment contracts which were automatically
terminated at the expiry of the period stipulated therein, i.e.,
16 February 2000.
The Court disagrees.
While this Court has recognized the validity of fixed-term
employment contracts, it has consistently held that this is the
exception rather than the general rule. More importantly, a
fixed-term employment is valid only under certain
circumstances. In Brent, the very same case invoked by
respondents, the Court identified several circumstances
wherein a fixed-term is an essential and natural
appurtenance, to wit:
Some familiar examples may be cited of employment
contracts which may be neither for seasonal work nor for
specific projects, but to which a fixed term is an essential and
natural appurtenance: overseas employment contracts, for
one, to which, whatever the nature of the engagement, the
concept of regular employment with all that it implies does not
appear ever to have been applied, Article 280 of the Labor
Code notwithstanding; also appointments to the positions of
dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and
where fixed terms are a necessity without which no
reasonable rotation would be possible. Similarly, despite the
provisions of Article 280, Policy Instructions No. 8 of the
Minister of Labor implicitly recognize that certain company
officials may be elected for what would amount to fixed
periods, at the expiration of which they would have to stand
down, in providing that these officials, "x x may lose their jobs
as president, executive vice-president or vice president, etc.
because the stockholders or the board of directors for one
reason or another did not reelect them."26
As a matter of fact, the Court, in its oft-quoted decision
in Brent, also issued a stern admonition that where, from the
circumstances, it is apparent that the period was imposed to
preclude the acquisition of tenurial security by the employee,
then it should be struck down as being contrary to law,
morals, good customs, public order and public policy.27
After considering petitioners contracts in their entirety, as well
as the circumstances surrounding petitioners employment at
INNODATA, the Court is convinced that the terms fixed

therein were meant only to circumvent petitioners right to

security of tenure and are, therefore, invalid.
The contracts of employment submitted by respondents are
highly suspect for not only being ambiguous, but also for
appearing to be tampered with.
Petitioners alleged that their employment contracts with
INNODATA became effective 16 February 1999, and the first
day they reported for work was on 17 February 1999. The
Certificate of Employment issued by the HRAD Manager of
INNODATA also indicated that petitioners Price and Domingo
were employed by INNODATA on 17 February 1999.
However, respondents asserted before the Labor Arbiter that
petitioners employment contracts were effective only on 6
September 1999. They later on admitted in their
Memorandum filed with this Court that petitioners were
originally hired on 16 February 1999 but the project for which
they were employed was completed before the expiration of
one year. Petitioners were merely rehired on 6 September
1999 for a new project. While respondents submitted
employment contracts with 6 September 1999 as beginning
date of effectivity, it is obvious that in one of them, the original
beginning date of effectivity, 16 February 1999, was merely
crossed out and replaced with 6 September 1999. The copies
of the employment contracts submitted by petitioners bore
similar alterations.
The Court notes that the attempt to change the beginning
date of effectivity of petitioners contracts was very crudely
done. The alterations are very obvious, and they have not
been initialed by the petitioners to indicate their assent to the
same. If the contracts were truly fixed-term contracts, then a
change in the term or period agreed upon is material and
would already constitute a novation of the original contract.
Such modification and denial by respondents as to the real
beginning date of petitioners employment contracts render
the said contracts ambiguous. The contracts themselves state
that they would be effective until 16 February 2000 for a
period of one year. If the contracts took effect only on 6
September 1999, then its period of effectivity would obviously
be less than one year, or for a period of only about five
months.
Obviously, respondents wanted to make it appear that
petitioners worked for INNODATA for a period of less than
one year. The only reason the Court can discern from such a
move on respondents part is so that they can preclude
petitioners from acquiring regular status based on their
employment for one year. Nonetheless, the Court emphasizes
that it has already found that petitioners should be considered
regular employees of INNODATA by the nature of the work
they performed as formatters, which was necessary in the
business or trade of INNODATA. Hence, the total period of
their employment becomes irrelevant.
Even assuming that petitioners length of employment is
material, given respondents muddled assertions, this Court
adheres to its pronouncement in Villanueva v. National Labor
Relations Commission,28 to the effect that where a contract of
employment, being a contract of adhesion, is ambiguous, any

ambiguity therein should be construed strictly against the

party who prepared it. The Court is, thus, compelled to
conclude that petitioners contracts of employment became
effective on 16 February 1999, and that they were already
working continuously for INNODATA for a year.
Further attempting to exonerate itself from any liability for
illegal dismissal, INNODATA contends that petitioners were
project employees whose employment ceased at the end of a
specific project or undertaking. This contention is specious
and devoid of merit.
In Philex Mining Corp. v. National Labor Relations
Commission,29 the Court defined "project employees" as
those workers hired (1) for a specific project or undertaking,
and wherein (2) the completion or termination of such project
has been determined at the time of the engagement of the
employee.
Scrutinizing petitioners employment contracts with
INNODATA, however, failed to reveal any mention therein of
what specific project or undertaking petitioners were hired for.
Although the contracts made general references to a
"project," such project was neither named nor described at all
therein. The conclusion by the Court of Appeals that
petitioners were hired for the Earthweb project is not
supported by any evidence on record. The one-year period for
which petitioners were hired was simply fixed in the
employment contracts without reference or connection to the
period required for the completion of a project. More
importantly, there is also a dearth of evidence that such
project or undertaking had already been completed or
terminated to justify the dismissal of petitioners. In fact,
petitioners alleged - and respondents failed to dispute that
petitioners did not work on just one project, but continuously
worked for a series of projects for various clients of
INNODATA.
In Magcalas v. National Labor Relations Commission,30 the
Court struck down a similar claim by the employer therein that
the dismissed employees were fixed-term and project
employees. The Court here reiterates the rule that all doubts,
uncertainties, ambiguities and insufficiencies should be
resolved in favor of labor. It is a well-entrenched doctrine that
in illegal dismissal cases, the employer has the burden of
proof. This burden was not discharged in the present case.
As a final observation, the Court also takes note of several
other provisions in petitioners employment contracts that
display utter disregard for their security of tenure. Despite
fixing a period or term of employment, i.e., one year,
INNODATA reserved the right to pre-terminate petitioners
employment under the following circumstances:
6.1 x x x Further should the Company have no more need for
the EMPLOYEEs services on account of completion of the
project, lack of work (sic) business losses, introduction of new
production processes and techniques, which will negate the
need for personnel, and/or overstaffing, this contract maybe
pre-terminated by the EMPLOYER upon giving of three (3)
days notice to the employee.
xxxx

6.4 The EMPLOYEE or the EMPLOYER may pre-terminate

this CONTRACT, with or without cause, by giving at least
Fifteen (15) [day] notice to that effect. Provided, that such
pre-termination shall be effective only upon issuance of the
appropriate clearance in favor of the said EMPLOYEE.
(Emphasis ours.)
Pursuant to the afore-quoted provisions, petitioners have no
right at all to expect security of tenure, even for the
supposedly one-year period of employment provided in their
contracts, because they can still be pre-terminated (1) upon
the completion of an unspecified project; or (2) with or without
cause, for as long as they are given a three-day notice. Such
contract provisions are repugnant to the basic tenet in labor
law that no employee may be terminated except for just or
authorized cause.
Under Section 3, Article XVI of the Constitution, it is the policy
of the State to assure the workers of security of tenure and
free them from the bondage of uncertainty of tenure woven by
some employers into their contracts of employment. This was
exactly the purpose of the legislators in drafting Article 280 of
the Labor Code to prevent the circumvention by
unscrupulous employers of the employees right to be secure
in his tenure by indiscriminately and completely ruling out all
written and oral agreements inconsistent with the concept of
regular employment.
In all, respondents insistence that it can legally dismiss
petitioners on the ground that their term of employment has
expired is untenable. To reiterate, petitioners, being regular
employees of INNODATA, are entitled to security of tenure. In
the words of Article 279 of the Labor Code:
ART. 279. Security of Tenure. In cases of regular
employment, the employer shall not terminate the services of
an employee except for a just cause or when authorized by
this Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
By virtue of the foregoing, an illegally dismissed employee is
entitled to reinstatement without loss of seniority rights and
other privileges, with full back wages computed from the time
of dismissal up to the time of actual reinstatement.
Considering that reinstatement is no longer possible on the
ground that INNODATA had ceased its operations in June
2002 due to business losses, the proper award is separation
pay equivalent to one month pay31 for every year of service, to
be computed from the commencement of their employment
up to the closure of INNODATA.
The amount of back wages awarded to petitioners must be
computed from the time petitioners were illegally dismissed
until the time INNODATA ceased its operations in June
2002.32

Petitioners are further entitled to attorneys fees equivalent to

10% of the total monetary award herein, for having been
forced to litigate and incur expenses to protect their rights and
interests herein.
Finally, unless they have exceeded their authority, corporate
officers are, as a general rule, not personally liable for their
official acts, because a corporation, by legal fiction, has a
personality separate and distinct from its officers,
stockholders and members. Although as an exception,
corporate directors and officers are solidarily held liable with
the corporation, where terminations of employment are done
with malice or in bad faith,33 in the absence of evidence that
they acted with malice or bad faith herein, the Court exempts
the individual respondents, Leo Rabang and Jane Navarette,
from any personal liability for the illegal dismissal of
petitioners.
WHEREFORE, the Petition for Review on Certiorari
is GRANTED. The Decision dated 25 September 2006 and

Resolution dated 15 June 2007 of the Court of Appeals in CAG.R. SP No. 72795are hereby REVERSED and SET ASIDE.
RespondentInnodata Philippines, Inc./Innodata Corporation
isORDERED to pay petitioners Cherry J. Price, Stephanie G.
Domingo, and Lolita Arbilera: (a) separation pay, in lieu of
reinstatement, equivalent to one month pay for every year of
service, to be computed from the commencement of their
employment up to the date respondent Innodata Philippines,
Inc./Innodata Corporation ceased operations; (b) full
backwages, computed from the time petitioners
compensation was withheld from them up to the time
respondent Innodata Philippines, Inc./Innodata Corporation
ceased operations; and (3) 10% of the total monetary award
as attorneys fees. Costs against respondent Innodata
Philippines, Inc./Innodata Corporation.
SO ORDERED.