Project Employment
Policy Instruction No. 20
ALU-TUCP vs NLRC 234 SCRA 678
FACTS: NSC undertook the ambitious Five Year
Expansion Program I and II with the ultimate end
in view of expanding the volume and increasing
the kinds of products that it may offer for sale to
the public. The Five Year Expansion Program
had a number of component projects: e.g., (a) the
setting up of a "Cold Rolling Mill Expansion
Project"; (b) the establishment of a "Billet Steel-
Making Plant" (BSP); (c) the acquisition and
installation of a "Five Stand TDM"; and (d) the
"Cold Mill Peripherals Project." Instead of
contracting out to an outside or independent
contractor the tasks of constructing the buildings
with related civil and electrical works that would
house the new machinery and equipment,
the installation of the newly acquired mill or plant
machinery and equipment and the
commissioning of such machinery and
equipment, NSC opted to execute and carry out
its Five Year Expansion Projects "in house," as it
were, by administration. The carrying out of the
Five Year Expansion Program (or more precisely,
each of its component projects) constitutes a
distinct undertaking identifiable from the ordinary
business and activity of NSC. Each component
project, of course, begins and ends at specified
times, which had already been determined by the
time petitioners were engaged. We also note that
NSC did the work here involved — the
construction of buildings and civil and electrical
works, installation of machinery and equipment
and the commissioning of such machinery — only
for itself. Private respondent NSC was not in the
business of constructing buildings and installing
plant machinery for the general business
community, i.e., for unrelated, third party,
corporations. NSC did not hold itself out to the
public as a construction company or as an
engineering corporation. On 5 July 1990,
petitioners filed separate complaints for unfair
labor practice, regularization and monetary
benefits with the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City. The Labor Arbiter declared
petitioners as “regular project employees.” Both
parties appealed to the NLRC from that decision.
NLRC affirmed the Labor Arbiter's decision.
ISSUE: Whether or not petitioners are properly
characterized as "project employees" rather than
"regular employees" of NSC.
HELD: The term "project" could refer to one or the
other of at least two (2) distinguishable types of
activities. Firstly, a project could refer to a
particular job or undertaking that is within the
regular or usual business of the employer
company, but which is distinct and separate, and
identifiable as such, from the other undertakings
of the company. Such job or undertaking begins
and ends at determined or determinable times.
The typical example of this first type of project is
a particular construction job or project of a
construction company which ordinarily carries out
two or more discrete identifiable construction
projects. Employees who are hired for the
carrying out of one of these separate projects, the
scope and duration of which has been
determined and made known to the employees at
the time of employment, are properly treated as
"project employees," and their services may be
lawfully terminated at completion of the project.
It could also refer to secondly, a particular job or
undertaking that is not within the regular business
of the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the
ordinary or regular business operations of the
employer. The job or undertaking also begins and
ends at determined or determinable times. The
case at bar presents what appears to our mind as
a typical example of this kind of "project."
Whichever type of project employment is found in
a particular case, a common basic requisite is that
the designation of named employees as "project
employees" and their assignment to a specific
project, are effected and implemented in good
faith, and not merely as a means of evading
otherwise applicable requirements of labor laws.
Thus, the particular component projects
embraced in the Five Year Expansion Program,
to which petitioners were assigned, were
distinguishable from the regular or ordinary
business of NSC which, of course, is the
production or making and marketing of steel
products. During the time petitioners rendered
services to NSC, their work was limited to one or
another of the specific component projects which
made up the FAYEP I and II. There is nothing in
the record to show that petitioners were hired for,
or in fact assigned to, other purposes, e.g., for
operating or maintaining the old, or previously
installed and commissioned, steel-making
machinery and equipment, or for selling the
finished steel products. We, therefore, agree with
the basic finding of the NLRC (and the Labor
Arbiter) that the petitioners were indeed "project
employees.” Petitioners next claim that their
service to NSC of more than six (6) years should
qualify them as regular employees. We believe
this claim is without legal basis. The simple fact
that the employment of petitioners as project
employees had gone beyond one (1) year, does
not detract from, or legally dissolve, their status
as project employees. The second paragraph of
Article 280 of the Labor Code, quoted above,
providing that an employee who has served for at
least one (1) year, shall be considered a regular
employee, relates to casual employees, not to
project employees.
Ricardo Fernandez vs. NLRC 230 SCRA 460
(1994)
FACTS: Fernandez was hired by DM Consunji as
a laborer (November 1974). He worked for the
latter until March 1936, when his employment
was terminated on the ground that the project to
which he was assigned was already completed.
He thus filed a complaint for illegal dismissal with
the Labor Arbiter. The Labor Arbiter (May 1988)
found that Fernandez worked continuously in
various projects ranging from 5 to 20 years and
belonged to a workpool (i.e. his dismissal was
illegal). DM Consunji appealed, on the ground
that Fernandez was a project employee hired on
a project-to-project basis, depending on the
availability of projects. It pointed to the gaps in
Fernandez’ employment history to show that he
was hired on an “off-and-on” basis. The NLRC
(September 1989), in view of (1) lack of evidence
to prove the continuous employment of
Fernandez, and (2) the intermittent nature of their
work as shown by project contracts, ruled that
Fernandez was a project employee. Fernandez
interposed a MFR which was denied for lack of
merit (July 1991). The NLRC also noted that the
MFR was filed only on January 29, 1990, which
was beyond the 10d reglementary period from
date of receipt of decision (November 13, 1989).
Without mentioning the denial of the MFR,
Ricardo Fernandez filed a petition before the SC,
assailing the NLRC Decision, arguing that it is
more in keeping with the intent and spirit of the
law to consider him as regular employees.
ISSUE: W/N the NLRC acted with GAD in
reversing the Labor Arbiter’s decision by
dismissing the complaint for illegal dismissal on
the finding that they were project employees. NO.
RULING: DM Consunji presented material
documents (covering November 5, 1974 - March
23, 1986) showing that Fernandez was hired as a
project employee with the specific dates of hiring,
duration of hiring, dates of his lay-offs, and the
termination reports submitted to the Minister of
Labor. Such documents clearly showed gaps of
month/s between the hiring of Fernandez in
numerous projects where he was assigned. Thus,
he is governed by Policy Instruction No. 20:
Project employees are
those employed in connection
with a particular construction
project. They are not entitled to
termination pay if they are
terminated as a result of the
completion of the project or any
phase thereof in which they are
employed, regardless of the
number of projects in which they
have been employed by a
particular construction company.
The NLRC correctly observed that Fernandez
failed to consider the requirement in Policy
Instruction No. 20 that to qualify as a member of
a work pool, the worker must still be considered
an employee of the construction company while
in the work pool. There must be proof to the effect
that Fernandez was under an obligation to be
always available on call of DM Consunji and that
he was not free to offer his services to other
employers. However, Fernandez failed to
introduce such evidence during the times when
there were no projects. Thus, it is clear that
Fernandez does not belong to the workpool from
which DM Consunji would draw workers for
assignment to other projects at its discretion.
DM Consunji vs. Jamin GR No. 192514, 18 April
2012
Facts: Petitioner D.M. Consunji, Inc. (DMCI), a
construction company, hired respondent Estelito
L. Jamin as a laborer. Sometime in 1975, Jamin
became a helper carpenter. Since his initial
hiring, Jamins employment contract had been
renewed a number of times. On March 20, 1999,
his work at DMCI was terminated due to the
completion of the SM Manila project. This
termination marked the end of his employment
withDMCI as he was not rehired again. Jamin
filed a complaint for illegal dismissal, with several
money claims (including attorneys fees), against
DMCI and its President/General Manager, David
M.Consunji. Jamin alleged that DMCI terminated
his employment without a just and authorized
cause at a time when he was already 55 years old
and had no independent source of livelihood. He
claimed that he rendered service to DMCI
continuously for almost 31 years. DMCI denied
liability. It argued that it hired Jamin on a project-
to-project basis, from the start of his engagement
in 1968 until the completion of its SM Manila
project on March 20, 1999 where Jamin last
worked. With the completion of the project,
Jamins employment was terminated. The LA
dismissed the complaint for lack of merit. On
appeal, the NLRC affirmed the decision of the LA.
On further appeal, the CA reversed the NLRC
decision and ruled that Jamin was a regular
employee. Hence, DMCI seeks a reversal of the
CA rulings on the ground that the appellate court
committed a grave error in annulling the decisions
of the labor arbiter and the NLRC.
Issue: Whether or not Jamin is a regular
employee
Ruling: Yes. Once a project or work pool employee
has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for
the same tasks or nature of tasks; and (2) these
tasks are vital, necessary and indispensable to
the usual business or trade of the employer, then
the employee must be deemed a regular
employee. While the contracts indeed show that
Jamin had been engaged as a project employee,
there was an almost unbroken string of Jamins
rehiring from December17, 1968 up to the
termination of his employment on March 20,
1999. While the history of Jamins employment
(schedule of projects)[42] relied upon by DMCI
shows a gap of almost four years in his
employment for the period between July 28, 1980
(the supposed completion date of the Midtown
Plaza project) and June 13, 1984 (the start of the
IRRI Dorm IV project), the gap was caused by the
company’s omission of the three projects above
mentioned.
For not disclosing that there had been other
projects where DMCI engaged his services,
Jamin accuses the company of suppressing vital
evidence that supports his contention that he
rendered service in the company’s construction
projects continuously and repeatedly for more
than three decades. The non-disclosure might not
have constituted suppression of evidence it could
just have been overlooked by the company but
the oversight is unfair to Jamin as the non-
inclusion of the three projects gives the
impression that there were substantial gaps not
only of several months but years in his
employment with DMCI.
Thus, as Jamin explains, the Ritz Tower Project
(July 29, 1980 to June 12, 1982) and the New
Istana Project (June 23, 1982 to February 16,
1984) would explain the gap between the
Midtown Plaza project (September 3, 1979 to
July 28, 1980) and the IRRI Dorm IV project (June
13, 1984 to March 12, 1985) and the other New
Istana Project (January 24, 1986 to May 25,
1986) would explain the gap between P. 516
Hanger (September 13, 1985 to January 23,
1986) and P. 516 Maint (May 26, 1986 to
November 18, 1987).
To reiterate, Jamins employment history with
DMCI stands out for his continuous, repeated and
successive rehiring in the company’s construction
projects. In all the 38 projects where DMCI
engaged Jamins services, the tasks he
performed as a carpenter were indisputably
necessary and desirable in DMCIs construction
business. He might not have been a member of a
work pool as DMCI insisted that it does not
maintain a work pool, but his continuous rehiring
and the nature of his work unmistakably made
him a regular employee. Surely, length of time is
not the controlling test for project employment.
Nevertheless, it is vital in determining if the
employee was hired for a specific undertaking or
tasked to perform functions vital, necessary and
indispensable to the usual business or trade of
the employer. Here, [private] respondent had
been a project employee several times over. His
employment ceased to be coterminous with
specific projects when he was repeatedly re-hired
due to the demands of petitioners business
Aurora Land Projects Corp vs. NLRC 266 SCRA
48
FACTS: Private respondent Honorio Dagui was
hired by Doña Aurora Suntay Tanjangco in 1953
to take charge of the maintenance and repair of
the Tanjangco apartments and residential
buildings. He was to perform carpentry, plumbing,
electrical and masonry work. Upon the death of
Doña Aurora Tanjangco in 1982, her daughter,
petitioner Teresita Tanjangco Quazon, took over
the administration of all the Tanjangco properties.
On June 8, 1991, private respondent Dagui
received the shock of his life when Mrs. Quazon
suddenly told him: "Wala ka nang trabaho mula
ngayon, on the alleged ground that his work was
unsatisfactory. On August 29, 1991, private
respondent, who was then already sixty-two (62)
years old, filed a complaint for illegal dismissal
with the Labor Arbiter. Petitioner insists that
respondent was never their employee and was
but a job contractor. Labor Arbiter and NLRC
decided in favor of private respondent. Hence,
this petition.
ISSUE: Whether or not respondent was an
employee & whether or not he is a regular
employee 

 maintenance man had to be performed within
HELD: Dagui, by the findings of both tribunals,
was an employee of the petitioners. We are not
inclined to set aside these findings. It is the
control test which is the most important and which
answers the question whether the employer
controls or has reserved the right to control the
employee not only as to the result of the work to
be done but also as to the means and methods
by which the same is to be accomplished, which
constitute the most important index of the
existence of the employer-employee relationship.
Stated otherwise, an employer-employee
relationship exists where the person for whom the
services are performed reserves the right to
control not only the end to be achieved but also
the means to be used in reaching such end. All
these elements are present in the case at bar.
Private respondent was hired in 1953 by Doña
Aurora Suntay Tanjangco (mother of Teresita
Tanjangco-Quazon), who was then the one in
charge of the administration of the Tanjangco's
various apartments and other properties. He was
employed as a stay-in worker performing
carpentry, plumbing, electrical and necessary
work (sic) needed in the repairs of Tanjangco's
properties. Upon the demise of Doña Aurora in
1982, petitioner Teresita Tanjangco-Quazon took
over the administration of these properties and
continued to employ the private respondent, until
his unceremonious dismissal on June 8, 1991.
Dagui was not compensated in terms of profits for
his labor or services like an independent
contractor. Rather, he was paid on a daily wage
basis at the rate of P180.00. Employees are
those who are compensated for their labor or
services by wages rather than by profits. Clearly,
Dagui fits under this classification. Doña Aurora
and later her daughter petitioner Teresita Quazon
evidently had the power of dismissal for cause
over the private respondent.
Finally, the records unmistakably show that the
most important requisite of control is likewise
extant in this case. It should be borne in mind
that the power of control refers merely to the
existence of the power and not to the actual
exercise thereof. It is not essential for the
employer to actually supervise the performance
of duties of the employee; it is enough that the
former has a right to wield the power. The
establishment of petitioners is engaged in the
leasing of residential and apartment buildings.
Naturally, private respondent's work therein as a
the premises of herein petitioners. In fact,
petitioners do not dispute the fact that Dagui
reports for work from 7:00 o'clock in the morning
until 4:00 o'clock in the afternoon. It is not far-
fetched to expect, therefore, that Dagui had to
observe the instructions and specifications given
by then Doña Aurora and later by Mrs. Teresita
Quazon as to how his work had to be performed.
Parenthetically, since the job of a maintenance
crew is necessarily done within company
premises, it can be inferred that both Doña
Aurora and Mrs. Quazon could easily exercise
control on private respondent whenever they
please.
As to the second issue and as can be gleaned
from this provision, there are two kinds of regular
employees, namely: (1) those who are engaged
to perform activities which are usually necessary
or desirable in the usual business or trade of the
employer; and (2) those who have rendered at
least one year of service, whether continuous or
broken, with respect to the activity in which they
are employed. Whichever standard is applied,
private respondent qualifies as a regular
employee. As aptly ruled by the Labor Arbiter:
As owner of many residential and apartment
buildings in Metro Manila, the necessity of
maintaining and employing a permanent stay-in
worker to perform carpentry, plumbing, electrical
and necessary work needed in the repairs of
Tanjangco's properties is readily apparent and is
in fact needed. So much so that upon the
demise of Doña Aurora Tanjangco, respondent's
daughter Teresita Tanjangco-Quazon apparently
took over the administration of the properties
and continued to employ complainant until his
outright dismissal on June 8, 1991. The jobs
assigned to private respondent as maintenance
man, carpenter, plumber, electrician and mason
were directly related to the business of
petitioners as lessors of residential and
apartment buildings. Moreover, such a
continuing need for his services by herein
petitioners is sufficient evidence of the necessity
and indispensability of his services to petitioners'
business or trade. Private respondent Dagui
should likewise be considered a regular
employee by the mere fact that he rendered
service for the Tanjangcos for more than one
year, that is, beginning 1953 until 1982, under
Doña Aurora; and then from 1982 up to June 8,
1991 under the petitioners, for a total of twenty-
nine (29) and nine (9) years respectively. Owing
to private respondent's length of service, he
became a regular employee, by operation of law,
one year after he was employed in 1953 and
subsequently in 1982. In Baguio Country Club
Corp., v. NLRC, we decided that it is more in
consonance with the intent and spirit of the law
to rule that the status of regular employment
attaches to the casual employee on the day
immediately after the end of his first year of
service. To rule otherwise is to impose a burden
on the employee which is not sanctioned by law.
Thus, the law does not provide the qualification
that the employee must first be issued a regular
appointment or must first be formally declared as
such before he can acquire a regular status.
De Ocampo Jr. vs. NLRC 186 SCRA 360 (1990)
Facts: It appears that on September 30, 1980, the
services of 65 employees of private respondent
Makati Development Corporation were
terminated on the ground of the expiration of their
contracts; that the said employees filed a
complaint for illegal dismissal against the MDC on
October 1, 1980; * that on October 8, 1980, as a
result of the aforementioned termination, the
Philippine Transport and General Workers
Association, of which the complainants were
members, filed a notice of strike on the grounds
of union-busting, subcontracting of projects which
could have been assigned to the dismissed
employees, and unfair labor practice; that on
October 14, 1980, the PTGWA declared a strike
and established picket lines in the perimeter of
the MDC premises; that on November 4, 1980,
the MDC filed with the Bureau of Labor Relations
a motion to declare the strike illegal and restrain
the workers from continuing the strike; that on that
same day and several days thereafter the MDC
filed applications for clearance to terminate the
employment of 90 of the striking workers, whom
it had meanwhile preventively suspended; that of
the said workers, 74 were project employees
under contract with the MDC with fixed terms of
employment; and that on August 31, 1982, Labor
Arbiter Apolinar L. Sevilla rendered a
decision 1denying the applications for clearance
filed by the MDC and directing it to reinstate the
individual complainants with two months back
wages each.
Issue: Whether or not
the contract workers are
regular or project
employees?
Ruling: Contract workers are not considered
regular employees, their services being needed
only when there are projects to be undertaken.
'The rationale of this rule is that if a project has
already been completed, it would be unjust to
require the employer to maintain them in the
payroll while they are doing absolutely nothing
except waiting until another project is begun, if at
all. In effect, these stand-by workers would be
enjoying the status of privileged retainers,
collecting payment for work not done, to be
disbursed by the employer from profits not
earned. But such is not applicable in the case at
bar and for good reason as records show that
although the contracts of the project workers had
indeed expired, the project itself was still on-going
and so continued to require the workers' services
for its completion. There is no showing that such
services were unsatisfactory to justify their
termination. The real reason for the termination of
their services even before the completion of the
project was the complaint the project workers had
filed and their participation in the strike against
the private respondent. These were the acts that
rendered them persona non grata to the
management. Their services were discontinued
by the MDC not because of the expiration of their
contracts, which had not prevented their retention
or rehiring before as long as the project they were
working on had not yet been completed. The real
purpose of the MDC was to retaliate against the
workers, to punish them for their defiance by
replacing them with more tractable employees.
Policy Instruction No. 20 of the Department of
Labor, provides that "project employees are not
entitled to separation pay if they are terminated
as a result of the completion of the project or any
phase thereof in which they are employed,
regardless of the projects in which they had been
employed by a particular construction company."
In simpler terms, project employees to separation
pay if the projects they are working on have not
yet been completed when their services are
terminated. And this should be true even if their
contracts have expired, on the theory that such
contracts would have been renewed anyway
because their services were still needed.
Applying this rule, we hold that the project
workers in the case at bar, who were separated
even before the completion of the project at the
New Alabang Village and not really for the reason
that their contracts had expired, are entitled to
separation pay. We make this disposition instead
of ordering their reinstatement as it may be
assumed that the said project has been
completed by this time. Considering the workers
to have been separated without valid cause, we
shall compute their separation pay at the rate of
one month for every year of service of each
dismissed employee, up to the time of the
completion of the project.
Contractual Employment/Fixed Term
Employment
1. BRENT SCHOOL vs. ZAMORA (G.R.
No. L-48494 - February 5, 1990)
FACTS: Doroteo R. Alegre was engaged as
athletic director by Brent School, Inc. The
contract was fixed for five (5) years, i.e., from July
18, 1971, the date of execution of the agreement,
to July 17, 1976. Three months before the
expiration of the stipulated period, or more
precisely on April 20,1976, Alegre was given a
copy of the report filed by Brent School advising
of the termination of his services effective on July
16, 1976. The stated ground for the termination
was "completion of contract, expiration of the
definite period of employment."
Alegre protested and argued that although his
contract did stipulate that the same would
terminate on July 17, 1976, since his services
were necessary and desirable in the usual
business of his employer, and his employment
had lasted for five years, he had acquired the
status of a regular employee and could not be
removed except for valid cause. 6 The Regional
Director considered Brent School's report as
anapplication for clearance to terminate
employment (not a report of termination), and
accepting the recommendation of the Labor
Conciliator, refused to give such clearance and
instead required the reinstatement of Alegre, as a
"permanent employee," to his former position
without loss of seniority rights and with full back
wages. Brent School filed a motion for
reconsideration but was denied. The School is
now before this Court in a last attempt at
vindication. That it will get here.
ISSUE: WON the provisions of the Labor Code,
as amended, have anathematized "fixed period
employment" or employment for a term.
RULING: On one hand, there is the gradual and
progressive elimination of references to term or
fixed-period employment in the Labor Code, and
the specific statement of the rule that:
Regular and Casual Employment.—
The provisions of written agreement
to the contrary notwithstanding and
regardless of the oral agreement of
the parties, an employment shall be
deemed to be regular where the
employee has been engaged to
perform activities which are usually
necessary or desirable in the usual
business or trade of the employer
except where the employment has
been fixed for a specific project or
undertaking the completion or
termination of which has been
determined at the time of the
engagement of the employee or
where the work or service to be
employed is seasonal in nature and
the employment is for the duration of
the season.
An employment shall be deemed to be casual if it
is not covered by the preceding paragraph:
provided, that, any employee who has rendered
at least one year of service, whether such service
is continuous or broken, shall be considered a
regular employee with respect to the activity in
which he is employed and his employment shall
continue while such actually exists.
On the other hand, the Civil Code, which has
always recognized, and continues to recognize,
the validity and propriety of contracts and
obligations with a fixed or definite period, and
imposes no restraints on the freedom of the
parties to fix the duration of a contract, whatever
its object, be it specie, goods or services, except
the general admonition against stipulations
contrary to law, morals, good customs, public
order or public policy. 26Under the Civil Code,
therefore, and as a general proposition, fixed-
term employment contracts are not limited, as
they are under the present Labor Code, to those
by nature seasonal or for specific projects with
pre-determined dates of completion; they also
include those to which the parties by free choice
have assigned a specific date of termination.
Article 280 of the Labor Code, under a narrow and
literal interpretation, not only fails to exhaust the
gamut of employment contracts to which the lack
of a fixed period would be an anomaly, but would
also appear to restrict, without reasonable
distinctions, the right of an employee to freely
stipulate with his employer the duration of his
engagement, it logically follows that such a literal
interpretation should be eschewed or avoided.
The law must be given a reasonable
interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term
employment and subverting to boot the principle
of freedom of contract to remedy the evil of
employer's using it as a means to prevent their
employees from obtaining security of tenure is
like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the
head.
Accordingly, the clause in said article
indiscriminately and completely ruling out all
written or oral agreements conflicting with the
concept of regular employment as defined therein
should be construed to refer to the substantive
evil that the Code itself has singled out:
agreements entered into precisely to circumvent
security of tenure. It should have no application to
instances where a fixed period of employment
was agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper
pressure being brought to bear upon the
employee and absent any other circumstances
vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt
with each other on more or less equal terms with
no moral dominance whatever being exercised by
the former over the latter.
Alegre's employment was terminated upon the
expiration of his last contract with Brent School on
July 16, 1976 without the necessity of any notice.
The advance written advice given the Department
of Labor with copy to said petitioner was a mere
reminder of the impending expiration of his
contract, not a letter of termination, nor an
application for clearance to terminate which
needed the approval of the Department of Labor
to make the termination of his services effective
Millares vs NLRC 385 SCRA 306
Facts: Petitioner Douglas Millares was employed
by private respondent ESSO International
through its local manning agency, private
respondent Trans-Global on November 16, 1968
as a machinist. In 1975, he was promoted as
Chief Engineer which position he occupied until
he opted to retire in 1989. On June 13, 1989,
petitioner Millares applied for a leave of absence
for the period July 9 to August 7, 1989 which was
approved. On June 21, 1989, petitioner Millares
wrote to Esso International informing it of his
intention to avail of the optional retirement plan
under the Consecutive Enlistment Incentive Plan
(CEIP) considering that he had already rendered
more than twenty (20) years of continuous
service. On July 13, 1989 the intent was denied
on the following grounds, to wit: (1) he was
employed on a contractual basis; (2) his contract
of enlistment (COE) did not provide for retirement
before the age of sixty (60) years; and (3) he did
not comply with the requirement for claiming
benefits under the CEIP. Millares requested for
an extension of his leave of absence but received
reply saying that his post hase already been filled
in by another. The adjustment in said rank was
required in order to meet manpower schedules as
a result of (his) inability. Millares, in view of his
absence without leave, which is equivalent to
abandonment of his position, he had been
dropped from the roster of crew members
effective September 1, 1989.
On the other hand, petitioner Lagda was
employed by private respondent Esso
International as wiper/oiler in June 1969. He was
promoted as Chief Engineer in 1980, a position
he continued to occupy until his last COE expired
on April 10, 1989. On May 16, 1989, petitioner
Lagda applied for a leave of absence from June
19, 1989 up to the whole month of August 1989
which was later approved. On June 26, 1989,
petitioner Lagda wrote a letter to G.S. Stanley,
Operations Manager of respondent Esso
International, through respondent Trans-Globals
President Michael J. Estaniel, informing him of his
intention to avail of the optional early retirement
plan in view of his twenty (20) years continuous
service in the complaint. The request for
availment of the optional early retirement scheme
was denied on the same grounds upon which
petitioner Millares request was denied. On
August 3, 1989, he requested for an extension of
his leave of absence up to August 26, 1989 and
the same was approved. However, on September
27, 1989, Lagda was advised that in view of his
unavailability for contractual sea service, he had
been dropped from the roster of crew members
effective September 1, 1989. On October 5,
1989, petitioners Millares and Lagda filed a
complaint-affidavit for illegal dismissal and non-
payment of employee benefits.
Issue: Are petitioners regular or contractual
employees whose employments are terminated
everytime their contracts of employment expire?
Held: It is clear that seafarers are considered
contractual employees. They cannot be
considered as regular employees under Article
280 of the Labor Code. Their employment is
governed by the contracts they sign every time
they are rehired and their employment is
terminated when the contract expires. Their
employment is contractually fixed for a certain
period of time. They fall under the exception of
Article 280 whose employment has been fixed for
a specific project or undertaking the completion
or termination of which has been determined at
the time of 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. We need not depart from the
rulings of the Court in the two aforementioned
cases which indeed constitute stare decisis with
respect to the employment status of seafarers.
Petitioners insist that they should be
considered regular employees, since they have
rendered services which are usually necessary
and desirable to the business of their employer,
and that they have rendered more than twenty
(20) years of service. While this may be true, the
Brent case has, however, held that there are
certain forms of employment which also require
the performance of usual and desirable functions
and which exceed one year but do not necessarily
attain regular employment status under Article
280. Overseas workers including seafarers fall
under this type of employment which are
governed by the mutual agreements of the
parties.
Filipino seamen are governed by the Rules
and Regulations of the POEA. The Standard
Employment Contract governing the employment
of All Filipino seamen on Board Ocean-Going
Vessels of the POEA, particularly in Part I, Sec.
C specifically provides that the contract of
seamen shall be for a fixed period. And in no case
should the contract of seamen be longer than 12
months. Moreover, it is an accepted maritime
industry practice that employment of seafarers
are for a fixed period only. Constrained by the
nature of their employment which is quite peculiar
and unique in itself, it is for the mutual interest of
both the seafarer and the employer why the
employment status must be contractual only or
for a certain period of time. Seafarers spend most
of their time at sea and understandably, they
cannot stay for a long and an indefinite period of
time at sea.
Petitioners make much of the fact that they
have been continually re-hired or their contracts
renewed before the contracts expired (which has
admittedly been going on for twenty (20) years).
By such circumstance they claim to have
acquired regular status with all the rights and
benefits appurtenant to it. Such contention is
untenable. Undeniably, this circumstance of
continuous re-hiring was dictated by practical
considerations that experienced crew members
are more preferred. Petitioners were only given
priority or preference because of their experience
and qualifications but this does not detract the
fact that herein petitioners are contractual
employees. They cannot be considered regular
employees. From all the foregoing, we hereby
state that petitioners are not considered regular
or permanent employees under Article 280 of the
Labor Code. Petitioners employment have
automatically ceased upon the expiration of their
contracts of enlistment (COE). Since there was
no dismissal to speak of, it follows that petitioners
are not entitled to reinstatement or payment of
separation pay or backwages, as provided by
law.
.
Phil Village Hotel vs NLRC 230 NLRC 423
FACTS: Private respondents were employees of
petitioner. However, on May 19, 1986, petitioner
had to close and totally discontinue its operations
due to serious financial and business reverses
resulting in the termination of the services of its
employees. Thereafter, the Philippine Village
Hotel Employees and Workers Union filed against
petitioner a complaint for separation pay, unfair
labor practice and illegal lock-out. On May 27,
1987, the Labor Arbiter issued and Order finding
the losses suffered by petitioner to be actual,
genuine and of such magnitude as to validly
terminate the services of private respondents but
directed petitioner "to give priority to the
complainants (herein private respondents) in [the]
hiring of personnel should they resume their
business operations in the future. On appeal, the
NLRC affirmed the validity of the closure of
petitioner but ordered petitioner to pay private
respondent separation pay at the rate of 1/2
month pay every year of service. However, there
is nothing in the records to show that private
respondents received their separation pay as the
decision of the NLRC remained unenforced as of
this date. On February 1, 1989, petitioner decided
to have a one (1) month dry-run operation to
ascertain the feasibility of resuming its business
operations. In order to carry out its dry-run
operation, petitioner hired casual workers,
including private respondents, for a one (1) month
period, or from February 1, 1989 to March 1,
1989, as evidenced by the latter's Contract of
Employment. After evaluating the individual
performance of all the employees and upon the
lapse of the contractual one-month period or on
March 2, 1989, petitioner terminated the services
of private respondents. On April 6, 1989, private
respondents and Tupas Local Chapter No. 1362
filed a complaint against petitioner for illegal
dismissal and unfair labor practice with the
NLRC-NCR Arbitration Branch in NLRC Case No.
00-04-01665-89. On December 19, 1989, having
found the complaint without factual and legal
basis, Labor arbiter dismiised the claim. On
appeal to NLRC, the latter on November 7, 1991
reversed the decision of the Labor Arbiter.
Petitioner’s motion for reconsideration was
denied for lack of merit. Hence, this petition
before the court.
ISSUE: WON, private respondents are regular
employees of petitioner considering that their
services were already previously terminated in
1986 and that their employment contracts
specifically provided only for a temporary one-
month period of employment.
HELD: An examination of the contents of the
private respondents' contracts of employment
shows that indeed private respondents voluntarily
and knowingly agreed to be employed only for a
period of one (1) month or from February 1, 1989
to March 1, 1989. The fact that private
respondents were required to render services
usually necessary or desirable in the operation of
petitioner's business for the duration of the one
(1) month dry-run operation period does not in
any way impair the alidity of the contractual
nature of private respondents' contracts of
employment which specifically stipulated that the
employment of the private respondents was only
for one (1) month.
In upholding the validity of a contract of
employment with a fixed or specific period, we
have held that the decisive determinant in term
employment should not be the activities that the
employee is called upon to perform, but the day
certain agreed upon by the parties for the
commencement and termination of their
employment relationship, a day certain being
understood to be that which must necessarily
come, although it may not be known when. The
term period was further defined to be the length
of existence; duration. A point of time marking a
termination as of a cause or an activity; an end, a
limit, a bound; conclusion; termination. A series of
years, months or days in which something is
completed. A time of definite length or the period
from one fixed date to another fixed date. In the
instant case, private respondents were validly
terminated by the petitioner when the latter had to
close its business due to financial losses.
Following the directives of the NLRC to give
priority in hiring private respondents should it
resume its business, petitioner hired private
respondents during their one (1) month dry-run
operation. However, this does not mean that
private respondents were deemed to have
continued their regular employment status, which
they had enjoyed before their aforementioned
termination due to petitioner's financial losses. As
stated by the Labor Arbiter in his decision: It
should be borne in mind that when complainants
were first terminated as a result of the company's
cessation from operation in May, 1986 the
employer-employee relationship between the
parties herein was totally and completely
severed. Such being the case, respondent acted
well within its discretion when in rehiring the
complainants (herein private respondents) it
made them casual and for a specific period. The
complainants are no better than the new
employees of respondent (petitioner) for the
matter of what status or designation to be given
them exclusively rests in the discretion of
management. Besides, the previous decision of
the public respondent NLRC in Case No. 8-3277-
86 finding the termination of private respondents'
employment to be valid has long become final
and executory. Public respondent NLRC cannot
anymore argue that the temporary cessation of
the petitioner's operation due to financial reverses
merely suspended private respondents'
employment. The employee-employer
relationship had come to an end when the
employer had closed its business and ceased
operations. The hiring of new employees when it
re-opened after three (3) years is valid and to be
expected. The prior employment which was
terminated cannot be joined or tacked to the new
employment for purposes of security of tenure.

Medenilla vs Phil Veterans Bank
Facts: Petitioners were employees of the
Philippine Veterans Bank (PVB). Later their
services were terminated as a result of the
liquidation of PVB pursuant to the order of the
Monetary Board of the Central Bank embodied
in MB Resolution No. 612. On that same day,
petitioners were rehired through PVBs Bank
Liquidator, Antonio T. Castro, Jr.. However, all
of them were required to sign employment
contracts which provided that:
(1) The employment shall be strictly on a
temporary basis and only for the duration of the
particular undertaking for which a particular
employee is hired, (2) Such temporary
employment will not entitle an employee to any
benefits except those granted by law; and that
(3) The Liquidator reserves the right to
terminate the services of the employee at any
time during the period of such employment if
the employee is found not qualified, competent
or, efficient in the performance of his job, or
have violated any rules and regulations, or such
circumstances and conditions recognized by
law. On January 18, 1991, petitioners received a
uniform notice of dismissal effective a month
from the date of receipt, which notice
contained the reasons justifying the
termination: "(a) To reduce costs and expenses
in the liquidation of closed banks in order to
protect the interests of the depositors, creditors
and stockholders of the Philippine Veterans
Bank & (b) The employment were on strictly
temporary basis." Petitioners filed a case for
illegal dismissal before the Labor Arbiter who
rendered a decision that petitioners were
illegally dismissed hence reinstatement with
backwages. Respondent bank appealed. NLRC
reversed.
ISSUE: Whether the NLRC acted with grave
abuse of discretion in ruling that there was a
valid fixed-period of employment & whether or
not there was illegal dismissal
Ruling: The employment of petitioners was
really for a fixed-period. Said employment
contract contained the following provisions: "In
connection with the liquidation of the Philippine
Veterans Bank under Monetary Board
Resolution No. 612 dated June 7, 1985, we are
confirming your employment under the
following terms and conditions:
The employment shall be on a strictly
temporary basis and only for the duration of the
particular undertaking for which you are hired
and only for the particular days during which
actual work is available as determined by the
Liquidator or his representatives since the work
requirements of the liquidation process merely
demand intermittent and temporary rendition
of services."
On June 15, 1985, the services of the petitioners
were terminated when the Monetary Board
ordered the liquidation of the bank. However,
petitioners were re-hired on the following day by
the Banks Liquidator on the basis of the
abovementioned employment contract. The
Court has repeatedly upheld the validity of fixed-
term employment. In the case of Philippine
National Oil Company-Energy Development
Corporation vs. NLRC, it held the two guidelines
by which fixed contracts of employment can be
said NOT to circumvent security of tenure which
are: First, the fixed period of employment was
knowingly and voluntarily agreed upon by the
parties, without any force, duress or improper
pressure being brought to bear upon the
employee and absent any other circumstances
vitiating his consent and second, it satisfactorily
appears that the employer and employee dealt
with each other on more or less equal terms with
no moral dominance whatever being exercised by
the former on the latter.
The employment contract entered into by the
parties herein appears to have observed the said
guidelines. Furthermore, it is evident from the
records that the subsequent re-hiring of
petitioners which was to continue during the
period of liquidation and the process of liquidation
ended prior to the enactment of RA 7169 entitled,
"An Act to Rehabilitate Philippine Veterans
Bank". As to the issue of the illegal dismissal, the
only reason given by the Liquidator for the
termination of petitioners employment was "in line
with the need of the objective of the Supervision
and Examination Sector, Department V, Central
Bank of the Philippines, to reduce costs and
expenses in the liquidation of closed banks in
order to protect the interest of the depositors,
creditors and stockholders.
In cases of illegal dismissal, the burden is on the
employer to prove that there was a valid ground
for dismissal. Mere allegation of reduction of
costs without any proof to substantiate the same
cannot be given credence by the Court. As the
respondents failed to rebut petitioners evidence,
the conclusion is that the dismissal in question
was illegal. Such illegal dismissal warrants
reinstatement and payment of backwages.
However, since petitioners reinstatement is now
considered impractical because the Philippine
Veterans Bank has been rehabilitated, the Court
limits the relief to be granted to the petitioners to
the unpaid wages during the remaining period of
their employment contract.
If the contract is for a fixed term and the
employee is dismissed without just cause, he is
entitled to the payment of his salaries
corresponding to the unexpired portion of the
employment contract. In this case, the unpaid
wages should be reckoned on February 18, 1991
to January 1, 1992. January 1, 1992 is considered
the date of expiration of the period of liquidation
since January 2, 1992 was the effectivity of RA
7169 which rehabilitated the Philippine Veterans
Bank.
Probationary employment - Article 281 (295)
International Catholic Migration Commission vs.
NLRC 169 SCRA 606 (1989)
FACTS: Petitioner ICMC is a non-profit
organization dedicated to refugee service at the
Philippine Refugee Processing Center in
Morong, Bataan. It engaged the services of
private respondent Bernadette Galang on
1/24/1983 as a probationary cultural orientation
teacher. After 3 months, she was informed
orally and in writing that her services were being
terminated because she failed in the
performance evaluation of her supervisors
during the teacher evaluation program. On
8/22/1983, Galang filed a complaint for illegal
dismissal, unfair labor practice and unpaid
wages against petitioner with the then Ministry of
Labor and Employment, praying for
reinstatement with backwages, exemplary and
moral damages. On 10/8/1983, Labor Arbiter
dismissed the complaint for illegal dismissal as
well as the complaint for moral and exemplary
damages but ordering the ICMC to pay Galang
the sum of P6,000.00 as payment for the last 3
months of the agreed employment period
pursuant to her verbal contract of employment.
Both parties appealed the decision to the NLRC.
On 8/22/1985, the NLRC, by a majority vote of
Commissioners Guillermo C. Medina and
Gabriel M. Gatchalian, sustained the decision of
the Labor Arbiter and dismissed both appeals for
lack of merit. Dissatisfied, petitioner filed the
instant petition.
ISSUE: Whether or not an employee who was
terminated during the probationary period of her
employment is entitled to her salary for the
unexpired portion of her six-month probationary
employment
RULING: NO. Galang was terminated during her
probationary period of employment for failure to
qualify as a regular member of petitioner’s
teaching staff in accordance with its reasonable
standards. Galang was found by petitioner to be
deficient in classroom management, teacher-
student relationship and teaching techniques.
Failure to qualify as a regular employee in
accordance with the reasonable standards of the
employer is a just cause for terminating a
probationary employee specifically recognized
under Article 282 (now Article 281) of the Labor
Code. A probationary employee is one who is on
trial by an employer during which the employer
determines whether or not he is qualified for
permanent employment. A probationary
appointment is made to afford the employer an
opportunity to observe the fitness of a probationer
while at work, and to ascertain whether he will
become a proper and efficient employee. The
word “probationary,” as used to describe the
period of employment, implies the purpose of the
term or period, but not its length. Being in the
nature of a “trial period” the essence of a
probationary period of employment
fundamentally lies in the purpose or objective
sought to be attained by both the employer and
the employee during said period. The length of
time is immaterial in determining the correlative
rights of both in dealing with each other during
said period.
MARIWASA MANUFACTURING, INC., and
ANGEL T. DAZO vs.LEOGARDO, JR.,
Facts: Joaquin A. Dequila (or Dequilla) was hired
on probation by Mariwasa Manufacturing, Inc. as
a general utility worker on January 10, 1979. After
6 months, he was informed that his work was
unsatisfactory and had failed to meet the required
standards. To give him another chance, and with
Dequila’s written consent, Mariwasa extended
Dequila’s probationary period for another three
months: from July 10 to October 9, 1979.
Dequila’s performance, however, did not improve
and Mariwasa terminated his employment at the
end of the extended period. Dequila filed a
complaint for illegal dismissal against Mariwasa
and its VP for Administration, Angel T. Dazo, and
violation of Presidential Decrees Nos. 928 and
1389. DIRECTOR OF MINISTRY OF LABOR:
Complaint is dismissed. Termination is
justified. Thus, Dequila appeals to the Minister of
Labor. MINISTER OF LABOR: Deputy Minister
Vicente Leogardo, Jr. held that Dequila was
already a regular employee at the time of his
dismissal, thus, he was illegally dismissed. (Initial
order: Reinstatement with full backwages. Later
amended to direct payment of Dequila’s
backwages from the date of his dismissal to
December 20, 1982 only.)
Issue: WON employer and employee may, by
agreement, extend the probationary period of
employment beyond the six months prescribed in
Art. 282 of the Labor Code?
Ruling: YES, agreements stipulating longer
probationary periods may constitute lawful
exceptions to the statutory prescription limiting
such periods to six months. The SC in its decision
in Buiser vs. Leogardo, Jr. (1984) said that
“Generally, the probationary period of
employment is limited to six (6) months. The
exception to this general rule is when the parties
to an employment contract may agree otherwise,
such as when the same is established by
company policy or when the same is required by
the nature of work to be performed by the
employee. In the latter case, there is recognition
of the exercise of managerial prerogatives in
requiring a longer period of probationary
employment, such as in the present case where
the probationary period was set for eighteen (18)
months, i.e. from May, 1980 to October, 1981
inclusive, especially where the employee must
learn a particular kind of work such as selling, or
when the job requires certain qualifications, skills
experience or training.”
In this case, the extension given to Dequila could
not have been pre-arranged to avoid the legal
consequences of a probationary period
satisfactorily completed. In fact, it was ex gratia,
an act of liberality on the part of his employer
affording him a second chance to make good
after having initially failed to prove his worth as an
employee. Such an act cannot now unjustly be
turned against said employer’s account to compel
it to keep on its payroll one who could not perform
according to its work standards. By voluntarily
agreeing to an extension of the probationary
period, Dequila in effect waived any benefit
attaching to the completion of said period if he still
failed to make the grade during the period of
extension. By reasonably extending the period of
probation, the questioned agreement actually
improved the probationary employee’s prospects
of demonstrating his fitness for regular
employment.
Ver Buiser vs. Leogardo & General Tel. Directory
Co. 131 SCRA 152 (1984)
FACTS: Petitioners were employed by the
private respondent GENERAL TELEPHONE
DIRECTORY COMPANY as sales representatives
and charged with the duty of soliciting
advertisements for inclusion in a telephone
directory. The records show that petitioners
Iluminada Ver Buiser and Ma. Mercedes P.
Intengan entered into an "Employment
Contract (on Probationary Status)" on May 26,
1980 with private respondent, a corporation
engaged in the business of publication and
circulation of the directory of the PLDT.
Petitioner Ma. Cecilia Rillo-Acuna entered into
the same employment contract on June 11,
1980 with the private respondent.
The employment contract contained the following
provisions:
l. The company hereby employs the employee as
telephone representative on a probationary
status for a period of eighteen (18) months, i.e.
from May 1980 to October 1981, inclusive. It is
understood that darung the probationary period of
employment, the Employee may be terminated at
the pleasure of the company without the
necessity of giving notice of termination or the
payment of termination pay.
The Employee recognizes the fact that the nature
of the telephone sales representative's job is such
that the company would be able to determine his
true character, conduct and selling capabilities
only after the publication of the directory, and that
it takes about eighteen (18) months before his
worth as a telephone saw representative can be
fully evaluated inasmuch as the advertisement
solicited by him for a particular year are published
in the directory only the following year.
Corollary to this, the private respondent
prescribed sales quotas to be accomplished or
met by the petitioners. Failing to meet their
respective sales quotas, the petitioners were
dismissed from the service by the private
respondent. The records show that the private
respondent terminated the services of petitioners
Iluminada Ver Buiser and Cecilia Rillo-Acuna on
May 14, 1981 and petitioner Ma. Mercedes P.
Intengan on May 18, 1981 for their failure to meet
their sales quotas.
Acting on illegal dismissal complaint filed by
petitioners, Regional Director and Deputy
Minsiter of Labor ruled that the dismissal was
valid. Hence, this petition before the court.
ISSUE:
What is the status of the employees?
HELD: Generally, the probationary period of
employment is limited to six (6) months. The
exception to this general rule is When the parties
to an employment contract may agree otherwise,
such as when the same is established by
company policy or when the same is required by
the nature of work to be performed by the
employee. In the latter case, there is recognition
of the exercise of managerial prerogatives in
requiring a longer period of probationary
employment, such as in the present case where
the probationary period was set for eighteen (18)
months, i.e. from May, 1980 to October, 1981
inclusive, especially where the employee must
learn a particular kind of work such as selling, or
when the job requires certain qualifications, skills,
experience or training. Policy Instruction No. 11
of the Minister of Labor and Employment has
clarified any and all doubts on the period of
probationary employment. It states as follows:
Probationary Employment has been the subject
of misunderstanding in some quarter. Some
people believe six (6) months is the probationary
period in all cases. On the other hand employs
who have already served the probationary period
are sometimes required to serve again on
probation.
Under the Labor Code, six (6) months is the
general probationary period ' but the probationary
period is actually the period needed to determine
fitness for the job. This period, for lack of a better
measurement is deemed to be the period needed
to learn the job. The purpose of this policy is to
protect the worker at the same time enable the
employer to make a meaningful employee
selection. This purpose should be kept in mind in
enforcing this provision of the Code. This
issuance shall take effect immediately.
In the case at bar, it is shown that private
respondent Company needs at least eighteen
(18) months to determine the character and
selling capabilities of the petitioners as sales
representatives. The Company is engaged in
advertisement and publication in the Yellow
Pages of the PLDT Telephone Directories.
Publication of solicited ads are only made a year
after the sale has been made and only then win
the company be able to evaluate the efficiency,
conduct, and selling ability of its sales
representatives, the evaluation being based on
the published ads. Moreover, an eighteen month
probationary period is recognized by the Labor
Union in the private respondent company, which
is Article V of the Collective Bargaining
Agreement, ... thus: Probationary Period — New
employees hired for regular or permanent shall
undergo a probationary or trial period of six (6)
months, except in the cases of telephone or sales
representatives where the probationary period
shall be eighteen (I 8) months.
And as indicated earlier, the very contracts of
employment signed and acquiesced to by the
petitioners specifically indicate that "the company
hereby employs the employee as telephone sales
representative on a probationary status for a
period of eighteen (18) months, i.e. from May
1980 to October 1981, inclusive. This stipulation
is not contrary to law, morals and public policy.
We, therefore, hold and rule that the probationary
employment of petitioners set to eighteen (18)
months is legal and valid and that the Regional
Director and the Deputy Minister of Labor and
Employment committed no abuse of discretion in
ruling accordingly.
Holiday Inn Manila vs NLRC 226 SCRA 417
(1993)
Facts: Elena Honasan applied for employment
with the Holiday Inn and was on April 15, 1991,
accepted for "on-the-job training" as a telephone
operator for a period of three weeks. For her
services, she received food and transportation
allowance. On May 13, 1992, after completing
her training, she was employed on a
"probationary basis" for a period of six months
ending November 12, 1991. Her employment
contract stipulated that the Hotel could terminate
her probationary employment at any time prior to
the expiration of the six-month period in the event
of her failure (a) to learn or progress in her job;
(b) to faithfully observe and comply with the hotel
rules and the instructions and orders of her
superiors; or (c) to perform her duties according
to hotel standards. On November 8, 1991, four
days before the expiration of the stipulated
deadline, Holiday Inn notified her of her dismissal,
on the ground that her performance had not come
up to the standards of the Hotel. Through
counsel, Honasan filed a complaint for illegal
dismissal, claiming that she was already a regular
employee at the time of her separation and so
was entitled to full security of tenure. The
complaint was dismissed on April 22, 1992 by the
Labor Arbiter, who held that her separation was
justified under Article 281 of the Labor Code
providing as follows: Probationary employment
shall not exceed six (6) months from the date the
employee started working, unless it is covered by
an apprenticeship agreement stipulating a longer
period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a just cause or when he fails to
qualify as a regular employee in accordance with
reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to
work after a probationary period shall be
considered a regular employee. On appeal, this
decision was reversed by the NLRC, which held
that Honasan had become a regular employee
and so could not be dismissed as a probationer.
ISSUE:
Whether or not Honasan is a regular or
probationary employee?
Ruling: Honasan is deemed a regular employee
of the company. Honasan was placed by the
petitioner on probation twice, first during her on-
the-job training for three weeks, and next during
another period of six months, ostensibly in
accordance with Article 281. Her probation clearly
exceeded the period of six months prescribed by
this article. Probation is the period during which
the employer may determine if the employee is
qualified for possible inclusion in the regular
force. In the case at bar, the period was for three
weeks, during Honasan's on-the-job training.
When her services were continued after this
training, the petitioners in effect recognized that
she had passed probation and was qualified to be
a regular employee. Honasan was certainly under
observation during her three-week on-the-job
training. If her services proved unsatisfactory
then, she could have been dropped as early as
during that period. But she was not. On the
contrary, her services were continued,
presumably because they were acceptable,
although she was formally placed this time on
probation. Even if it be supposed that the
probation did not end with the three-week period
of on-the-job training, there is still no reason why
that period should not be included in the
stipulated six-month period of probation.
Honasan was accepted for on-the-job training on
April 15, 1991. Assuming that her probation could
be extended beyond that date, it nevertheless
could continue only up to October 15, 1991, after
the end of six months from the earlier date. Under
this more lenient approach, she had become a
regular employee of Holiday Inn and acquired full
security of tenure as of October 15, 1991.The
consequence is that she could no longer be
summarily separated on the ground invoked by
the petitioners. As a regular employee, she had
acquired the protection of Article 279 of the Labor
Code on Security of Tenure stating as follows:
Art. 279. Security of Tenure — In
cases of regular employment, the employer shall
not terminate the services of an employee except
for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
The grounds for the removal of a regular
employee are enumerated in Articles 282, 283
and 284 of the Labor Code. The procedure for
such removal is prescribed in Rule XIV, Book V
of the Omnibus Rules Implementing the Labor
Code. These rules were not observed in the case
at bar as Honasan was simply told that her
services were being terminated because they
were found to be unsatisfactory. No
administrative investigation of any kind was
undertaken to justify this ground. She was not
even accorded prior notice, let alone a chance to
be heard. We find in the Hotel's system of double
probation a transparent scheme to circumvent the
plain mandate of the law and make it easier for it
to dismiss its employees even after they shall
have already passed probation. The petitioners
had ample time to summarily terminate
Honasan's services during her period of probation
if they were deemed unsatisfactory. Not having
done so, they may dismiss her now only upon
proof of any of the legal grounds for the
separation of regular employees, to be
established according to the prescribed
procedure.
A.M Oreta vs NLRC 176 SCRA 218 (1989)
FACTS: Private respondent Grulla was engaged
by Engineering Construction and Industrial
Development Company (ENDECO) through A.M.
Oreta and Co., Inc., as a carpenter in its projects
in Jeddah, Saudi Arabia. The contract of
employment, which was entered into June 11,
1980 was for a period of twelve (12) months. On
October 9, 1980, he received a notice of
termination of his employment. He filed a
complaint for illegal dismissal. Petitioner
contends that the respondent Grulla was validly
dismissed because the latter was still a
probationary employee; and that his dismissal
was justified on the basis of his unsatisfactory
performance of his job during the probationary
period.
ISSUE: Whether respondent Grulla was illegaly
terminated by the petitioner?
HELD: Yes. A perusal of the employment
contract reveals that although the period of
employment of respondent Grulla is twelve (12)
months, the contract is renewable subject to
future agreements of the parties. It is clear from
the employment contract that the respondent
Grulla was hired by the company as a regular
employee and not just mere probationary
employee. Also, nowhere in the employment
contract executed between petitioner company
and respondent Grulla is there a stipulation that
the latter shall undergo a probationary period for
three months before he can qualify as a regular
employee. Respondent Grulla was not, in any
manner, notified of the charges against him
before he was outrightly dismissed. Neither was
any hearing or investigation conducted by the
company to give the respondent a chance to be
heard concerning the alleged unsatisfactory
performance of his work.
Euro Linea Phil vs NLRC & Cruz 156 SCRA 78
(1987)
Facts: Petitioner Euro-Linea Phil, Inc hired
private respondent Pastoral as shipping
expediter on a probationary basis for a period of
six months. Prior to hiring by petitioner, Pastoral
had been employed by Fitscher Manufacturing
Corporation also as shipping expediter. On 4
February 1984, Pastoral received a
memorandum terminating his probationary
employment in view of his failure “to meet the
performance standards set by the company”.
Pastoral filed a complaint for illegal dismissal
against petitioner. On 19 July 1985, the Labor
Arbiter found petitioner guilty of illegal dismissal.
Petitioner appealed the decision to the NLRC on
5 August 1985 but the appeal was dismissed.
Hence the petition for review seeking to reverse
and set aside the resolution of public respondent
NLRC, affirming the decision of the Labor
Arbiter, which ordered the reinstatement of
complainant with six months backwages.
Issue: Whether or not the National Labor
Relations Commission acted with grave abuse of
discretion amounting to excess of jurisdiction in
ruling against the dismissal of the respondent, a
temporary or probationary employee, by his
employer.
Ruling: Although a probationary or temporary
employee has a limited tenure, he still enjoys the
constitutional protection of security of tenure.
Furthermore, what makes the dismissal highly
suspicious is the fact that while petitioner claims
that respondent was inefficient, it retained his
services until the last remaining two weeks of
the six months probationary employment. No
less important is the fact that private respondent
had been a shipping expediter for more than one
and a half years before he was absorbed by
petitioner. It therefore appears that the dismissal
in question is without sufficient justification. It
must be emphasized that the prerogative of
management to dismiss or lay-off an employee
must be done without abuse of discretion, for
what is at stake is not only petitioner's position
but also his means of livelihood. The right of an
employer to freely select or discharge his
employees is subject to regulation by the State,
basically in the exercise of its paramount police
power.
Petition dismissed for lack of merit and decision
by the NLRC is affirmed.
Phil Daily Inquirer vs Magtibay 528 SCRA 355
(2007)
FACTS: The Philippine Daily Inquirer hired
Magtibay, on contractual basis, to assist, for a
period of 5 months, the regular phone
operator. After the expiration of Magtibay’s
contractual employment, PDI announced the
creation and availability of a new position for a
2nd telephone operator who would undergo
probationary employment. After the usual
interview for the 2nd telephone operator slot, PDI
chose to hire Magtibay on a probationary basis
for a period of 6 months. The signing of a written
contract of employment followed.
A week before the end the agreed 6-month
probationary period,a PDI officer handed
Magtibay his termination paper, grounded on his
alleged failure to meet company standards.
Aggrieved, Magtibay immediately filed a
complaint for illegal dismissal and damages
before the LA.
ISSUE: Was there illegal dismissal?
HELD: NO. Art. 281. Probationary
employment. ̶ Probationary employment
shall not exceed 6 months from the date the
employee started working, unless it is covered by
an apprenticeship agreement stipulating a longer
period. The services of an employee who has
been engaged on a probationary basis may be
terminated for a (1) just cause or (2) when he fails
to qualify as a regular employee in accordance
with reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to
work after a probationary period shall be
considered a regular employee.
It is undisputed that PDI apprised Magtibay of
the ground of his termination, i.e., he failed to
qualify as a regular employee in accordance with
reasonable standards made known to him at the
time of engagement, only a week before the
expiration of the six-month probationary period.
Given this perspective, does this make his
termination unlawful for being violative of his right
to due process of law? It does not. Unlike under
the first ground for the valid termination of
probationary employment which is for just cause,
the second ground does not require notice and
hearing. Due process of law for this second
ground consists of making the reasonable
standards expected of the employee during his
probationary period known to him at the time of
his probationary employment. By the very nature
of a probationary employment, the employee
knows from the very start that he will be under
close observation and his performance of his
assigned duties and functions would be under
continuous scrutiny by his superiors. It is in
apprising him of the standards against which his
performance shall be continuously assessed
where due process regarding the second ground
lies, and not in notice and hearing as in the case
of the first ground.
Mercado vs. AMA Computer College 618 SCRA
218 (2010)
FACTS: The petitioners were all former faculty
members of AMA Computer College Paranaque.
They started teaching on May 25, 1998. Upon
employment, they individually executed
Teacher’s Contracts for each of the trimesters
they were engaged to teach, with the common
stipulation that they agreed to accept a non-
tenured appointment to work for the duration
of the last term that they were given a teaching
load.
For the school year 2000-2001, AMACC
implemented new screening guidelines, which,
among others, set performance standards to be
used to determine the present faculty members’
entitlement to salary increases. As it happened,
the petitioners failed to obtain a passing rating
based on the performance standards; resultantly,
they were not given any salary increase. The
petitioners then filed a complaint for
underpayment of wages, non-payment of
overtime and overload compensation, 13th month
pay, and for discriminatory practices.
Subsequently, on September 7, 2000, the
petitioners received a memorandum from
AMACC informing them of the expiration and
non-renewal of their contract to teach, effective
30 days from receipt of the notice. The petitioners
amended their complaint to include the charge of
illegal dismissal. In their defense, the
respondents contended that the non-renewal of
contract was due to the failure of the petitioners
to pass the Performance Appraisal System for
Teachers, while others failed to comply with the
other requirements for regularization, promotion,
or increase in salary. Further, the petitioners
worked under a contracted term under a non-
tenured appointment and were still within the
three-year probationary period for teachers.
The LA ruled that the petitioners were illegally
dismissed, and ordered for their reinstatement
and stated that the provisions of Article 281 on
probationary employment applied in this case and
that AMACC did not specify who among the
petitioners failed to pass the PAST and who
among them did not comply with the other
requirements of regularization, promotions or
increase in salary. The NLRC affirmed the
decision of the LA, on the ground that the
petitioners were terminated on the basis of
standards that were only introduced near the end
of their probationary period. It stated that the new
screening guidelines cannot be imposed on the
petitioners and their employment contracts
because the same were not imposed when they
were first employed in 1998. Due process
requires that employees should be informed
beforehand of 1) the conditions of their
employment and 2) the basis for their
advancement. Such imposition of the new
guidelines violates Sec. 6 (d) of Rule 1, Book VI
of the Implementing Rules of the Labor Code (see
notes). However, the NLRC also stated that the
applicable law is Section 92 of the Manual of
Regulations for Private Schools and not Article
281 of the Labor Code.
The CA reversed the rulings of the LA and NLRC
and dismissed the complaint for illegal dismissal
that since the petitioners have only taught for 2
years and 3 months when AMACC decided not to
renew their contracts, their employment was still
within the probationary period. As such, they
were not actually dismissed, as their contracts
merely expired. The non-renewal of their
contracts was based on their failure to satisfy the
school’s standards for the school year 2000-2001
that measured their fitness and aptitude to teach
as regular faculty members, which the CA found
to be reasonable basis, that AMACC has the
inherent right to upgrade the quality of its
education; part of this is the implementation of
continuing evaluation and screening of its faculty
members for academic excellence. As such, the
new guidelines for 2000-2001 could be imposed
on the petitioners and their employment contracts
& that the non-renewal of their teaching contracts
is sanctioned by the doctrine laid down by Brent
School, Inc. v. Zamora, where the Court
recognized the validity of contracts providing for
fixed-period employment. The petitioners argue,
among others that their employment was based
on standards not made known to them at the time
of their engagement. AMACC, on the other hand,
asserts that the petitioners were informed at the
time of their engagement that they must comply
with the regularization policies of the school, i.e.,
that they must obtain a passing rating on the
Performance Appraisal for Teachers (PAST)
which is the primary instrument used to measure
the performance of faculty members.
ISSUES: Is the use of fixed-period employment
during the teachers’ probationary period valid &
May the teachers’ probationary status be
disregarded when the contracts are fixed-term, as
in this case?
RULING: Yes the use of fixed period employment
during the teacher’s probationary period is valid.
First, the Court held that this is an accepted
practice in the teaching profession, as mentioned
in the case of Magis Young Achievers’ Learning
Center v. Manalo, provided that the contract of
probationary employment specify the period or
term of its effectivity, otherwise it could lead to the
inference that the contract is binding for the full
three-year probationary period. Second,
AMACC’s Constitutional right to academic
freedom gives it the right to choose who should
teach in its school, as well as the autonomy to
decide for itself the terms and conditions for hiring
its teacher for as long as the standards fixed are
reasonable and not arbitrary, in order to achieve
and maintain academic excellence. Third, the
right to hiring is also a management prerogative.
Thus AMACC had the right to determine for itself
that it shall use fixed-term employment contracts
as its medium for hiring its teachers. The Court
held that it also acted within the terms of the
Manual of Regulations for Private Schools when
it recognized the petitioners to be merely on
probationary status up to a maximum of nine
trimesters. On the next issue, the teacher’s
probationary status may not be disregarded when
the contracts are fixed term.
As to the second issue, the Court made a
discussion on the nature of fixed-term
employment vis-à-vis probationary employment:
In fixed-term employment, the character of the
employment is the period agreed upon by the E-
E, where the employment lasts for the duration of
the period and automatically ends upon the
expiration of such. In probationary employment,
though it also refers to a period (max: 6 mos), its
overriding character is the process of testing and
observing the abilities of a person under
probation (see notes). As a protection to labor, in
probationary employment, the probationary
period could last for a specific maximum period
and under reasonable, well-laid and properly
communicated standards. As such, any move on
the part of the employer must conform to the
probationary rules. In this case, the AMACC’s
system of fixed-term contract is a system that
operates during the probationary period, and as
such is subject to Article 281 of the Labor Code.
The Court concluded that since the fixed-term
contract was not specifically used for the fixed
terms it offfers, Article 281 assumes primacy and
the fixed-period character of the contract must
give way.
Apprentices/Learners
Title II Chapter I Book II Labor Code
Filamer Christian Institute vs Court of Appeals,
Facts: Private respondent Potenciano Kapunan,
Sr., an eighty-two-year old retired schoolteacher
(now deceased), was struck by the Pinoy jeep
owned by petitioner Filamer and driven by its
alleged employee, Funtecha, as Kapunan, Sr.
was walking along Roxas Avenue, Roxas City at
6:30 in the evening of October 20, 1977. As a
result of the accident, Kapunan, Sr. suffered
multiple injuries for which he was hospitalized for
a total of twenty (20) days.
Evidence showed that at the precise time of the
vehicular accident, only one headlight of the jeep
was functioning. Funtecha, who only had a
student driver’s permit, was driving after having
persuaded Allan Masa, the authorized driver, to
turn over the wheels to him. Thereafter, Kapunan,
Sr. instituted a criminal case against Funtecha
alone in the City Court of Roxas City for serious
physical injuries through reckless imprudence.
Kapunan, Sr. reserved his right to file an
independent civil action. The inferior court found
Funtecha guilty as charged and on appeal, his
conviction was affirmed by the then Court of First
Instance of Capiz. Pursuant to his reservation,
Kapunan, Sr. commenced a civil case for
damages before the RTC of Roxas City. Named
defendants in the complaint were petitioner
Filamer and Funtecha. Also included was Agustin
Masa, the director and president of Filamer
Christian Institute, in his personal capacity "in that
he personally authorized and allowed said Daniel
Funtecha who was his houseboy at the time of
the incident, to drive the vehicle in question
despite his knowledge and awareness that the
latter did not have the necessary license or permit
to drive said vehicle. His son, Allan Masa, who
was with Funtecha at the time of the accident,
was not impleaded as a co-defendant. On
December 14, 1983, the trial court rendered
judgment finding not only petitioner Filamer and
Funtecha to be at fault but also Allan Masa, a
non-party
Only petitioner Filamer and third-party defendant
Zenith Insurance Corporation appealed the lower
court’s judgment to the Court of Appeals and as
a consequence, said lower court’s decision
became final as to Funtecha. For failure of the
insurance firm to pay the docket fees, its appeal
was dismissed on September 18, 1984. On
December 17, 1985, the Appellate Court
rendered the assailed judgment affirming the trial
court’s decision in toto.
Issue: WON Funtecha is an employee of Filamer.
Ruling: NO. The SC ruled that the petitioner
Filamer’s cannot be held responsible for the
tortious act of Funtecha on the ground that there
is no existing employer-employee relationship
between them. In disclaiming liability, petitioner
Filamer has invoked the provisions of the Labor
Code, 7 specifically Section 14, Rule X of Book III
which reads: "Sec. 14. Working scholars. —
There is no employer-employee relationship
between students on the one hand, and schools,
colleges or universities on the other, where
students work for the latter in exchange for the
privilege to study free of charge; provided the
students are given real opportunity, including
such facilities as may be reasonable, necessary
to finish their chosen courses under such
arrangement." It is manifest that under the just-
quoted provision of law, petitioner Filamer cannot
be considered as Funtecha’s employer. Funtecha
belongs to that special category of students who
render service to the school in exchange for free
tuition. Funtecha worked for petitioner for two
hours daily for five days a week. He was assigned
to clean the school passageways from 4:00 a.m.
to 6:00 a.m. with sufficient time to prepare for his
7:30 a.m. classes. As admitted by Agustin Masa
in open court, Funtecha was not included in the
company payroll.
The wording of Section 14 is clear and explicit
and leaves no room for equivocation. The
provision of Section 14 is obviously intended to
eliminate an erstwhile gray area in labor relations
and seeks to define in categorical terms the
precise status of working scholars in relation to
the learning institutions in which they work for the
privilege of a free education. But even if we were
to concede the status of an employee on
Funtecha, still the primary responsibility for his
wrongdoing cannot be imputed to petitioner
Filamer for the plain reason that at the time of the
accident, it has been satisfactorily shown that
Funtecha was not acting within the scope of his
supposed employment. His duty was to sweep
the school passages for two hours every morning
before his regular classes. Taking the wheels of
the Pinoy jeep from the authorized driver at 6:30
in the evening and then driving the vehicle in a
reckless manner resulting in multiple injuries to a
third person were certainly not within the ambit of
his assigned tasks. In other words, at the time of
the injury, Funtecha was not engaged in the
execution of the janitorial services for which he
was employed, but for some purpose of his own.
It is but fair therefore that Funtecha should bear
the full brunt of his tortious negligence. Petitioner
Filamer cannot be made liable for the damages
he had caused.
Bernardo vs. NLRC & Far East Bank GR No.
122917, July 12, 1999
FACTS: Petitioners, 43 in number are deaf mutes were
hired in various periods from 1988 to 1993 by respondent
Far East Bank and Trust Co as money sorters and counters
through a uniformly worded agreement called
“Employment Contract for Handicapped Workers”.
Disclaiming that complainants were regular employees,
respondent Far East Bank and Trust Company maintained
that complainants who are a special class of workers —
the hearing impaired employees were hired temporarily
under [a] special employment arrangement which was a
result of overtures made by some civic and political
personalities to the respondent Bank; that complainant[s]
were hired due to "pakiusap" which must be considered in
the light of the context career and working environment
which is to maintain and strengthen a corps of
professionals trained and qualified officers and regular
employees who are baccalaureate degree holders from
excellent schools which is an unbending policy in the hiring
of regular employees; that in addition to this, training
continues so that the regular employee grows in the
corporate ladder; that the idea of hiring handicapped
workers was acceptable to them only on a special
arrangement basis; that it was adopted the special
program to help tide over a group of workers such as
deaf-mutes like the complainants who could do manual
work for the respondent Bank; that the task of counting
and sorting of bills which was being performed by tellers
could be assigned to deaf-mutes that the counting and
sorting of money are tellering works which were always
logically and naturally part and parcel of the tellers' normal
functions; that from the beginning there have been no
separate items in the respondent Bank plantilla for sortes
or counters; that the tellers themselves already did the
sorting and counting chore as a regular feature and
integral part of their duties (p. 97, Records); that through
the "pakiusap" of Arturo Borjal, the tellers were relieved of
this task of counting and sorting bills in favor of
deaf-mutes without creating new positions as there is no
position either in the respondent or in any other bank in
the Philippines which deals with purely counting and
sorting of bills in banking operations. Petitioners on the
other hand maintained that they are regular employees.
Labor Arbiter and NLRC dismissed the claim of petitioners.
ISSUE: WON, petitioners are regular employees.
HELD: The petition is meritorious. However, only the
employees, who worked for more than six months and
whose contracts were renewed are deemed regular.
Hence, their dismissal from employment was illegal.
At the outset, let it be known that this Court appreciates
the nobility of private respondent's effort to provide
employment to physically impaired individuals and to
make them more productive members of society.
However, we cannot allow it to elude the legal
consequences of that effort, simply because it now
deems their employment irrelevant. The facts, viewed
in light of the Labor Code and the Magna Carta for
Disabled Persons, indubitably show that the
petitioners, except sixteen of them, should be deemed
regular employees. As such, they have acquired legal
rights that this Court is duty-bound to protect and
uphold, not as a matter of compassion but as a
consequence of law and justice.
The uniform employment contracts of the petitioners
stipulated that they shall be trained for a period of one
month, after which the employer shall determine
whether or not they should be allowed to finish the 6-
month term of the contract. Furthermore, the employer
may terminate the contract at any time for a just and
reasonable cause. Unless renewed in writing by the
employer, the contract shall automatically expire at the
end of the term.
Respondent bank entered into the aforesaid contract
with a total of 56 handicapped workers and renewed
the contracts of 37 of them. In fact, two of them worked
from 1988 to 1993. Verily, the renewal of the contracts
of the handicapped workers and the hiring of others
lead to the conclusion that their tasks were beneficial
and necessary to the bank. More important, these facts
show that they were qualified to perform the
responsibilities of their positions. In other words, their
disability did not render them unqualified or unfit for the
tasks assigned to them. In this light, the Magna Carta
for Disabled Persons mandates that a qualified
disabled employee should be given the same terms
and conditions of employment as a qualified
able-bodied person. Section 5 of the Magna Carta
provides:
Sec. 5. Equal Opportunity for Employment. — No
disabled person shall be denied access to
opportunities for suitable employment. A qualified P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales,
disabled employee shall be subject to the same terms Isabel Mamauag, Violeta G. Montes, Albino Tecson,
and conditions of employment and the same Melody V. Gruela, Bernadeth D. Agero, Cynthia de
compensation, privileges, benefits, fringe benefits, Vera, Lani R. Cortez, Ma. Isabel B. Concepcion,
incentives or allowances as a qualified able bodied Margaret Cecilia Canoza, Thelma Sebastian, Ma.
person. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual,
Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.
The fact that the employees were qualified disabled
persons necessarily removes the employment As held by the Court, "Articles 280 and 281 of the Labor
contracts from the ambit of Article 80. Since the Magna Code put an end to the pernicious practice of making
Carta accords them the rights of qualified able-bodied permanent casuals of our lowly employees by the
persons, they are thus covered by Article 280 of the simple expedient of extending to them probationary
Labor Code, which provides: appointments, ad infinitum."The contract signed by
petitioners is akin to a probationary employment,
Art. 280. Regular and Casual Employment. — The during which the bank determined the employees'
provisions of written agreement to the contrary fitness for the job. When the bank renewed the contract
notwithstanding and regardless of the oral agreement after the lapse of the six-month probationary period, the
of the parties, an employment shall be deemed to be employees thereby became regular employees. No
regular where the employee has been engaged to employer is allowed to determine indefinitely the fitness
perform activities which are usually necessary or of its employees. As regular employees, the
desirable in the usual business or trade of the twenty-seven petitioners are entitled to security of
employer, except where the employment has been tenure; that is, their services may be terminated only
fixed for a specific project or undertaking the for a just or authorized cause. Because respondent
completion or termination of which has been failed to show such cause, these twenty- seven
determined at the time of the engagement of the petitioners are deemed illegally dismissed and
employee or where the work or services to be therefore entitled to back wages and reinstatement
performed is seasonal in nature and the employment is without loss of seniority rights and other privileges.
for the duration of the season. Considering the allegation of respondent that the job of
money sorting is no longer available because it has
An employment shall be deemed to be casual if it is not been assigned back to the tellers to whom it originally
covered by the preceding paragraph: Provided, That, belonged, petitioners are hereby awarded separation
any employee who has rendered at least one year of pay in lieu of reinstatement. Because the other sixteen
service, whether such service is continuous or broken, worked only for six months, they are not deemed
shall be considered as regular employee with respect regular employees and hence not entitled to the same
to the activity in which he is employed and his benefits.
employment shall continue while such activity exists.
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 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 one 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
indispensibility of that activity to the business. Hence,
the employment is considered regular, but only with
respect to such activity, and while such activity exists.
Without a doubt, the task of counting and sorting bills
is necessary and desirable to the business of
respondent bank. With the exception of sixteen of
them, petitioners performed these tasks for more than
six months. Thus, the following twenty-seven
petitioners should be deemed regular employees:
Marites Bernardo, Elvira Go Diamante, Rebecca E.
David, David P. Pascual, Raquel Estiller, Albert
Hallare, Edmund M. Cortez, Joselito O. Agdon, George