G.R. No.
154185 November 22, 2005 As narrated in the assailed decision of the Court of Appeals, the following events next
AMELIA J. DELOS SANTOS, Petitioner, vs. JEBSEN MARITIME, INC., Respondent.
DECISION GARCIA, J.:
Petitioner Amelia J. Delos Santos seeks in this petition for review on certiorari under Rule 45
of the Rules of Court to nullify and set aside the decision and resolution dated 21 March
20021 and 03 July 20022, respectively, of the Court of Appeals in CA-G.R. SP No. 62229.
From the petition and its annexes, the respondent’s comment thereto, and the parties’
respective memoranda, the Court gathers the following factual antecedents:
On 10 August 1995, or thereabout, herein respondent Jebsen Maritime, Inc., for and in behalf
of Aboitiz Shipping Co. (Aboitiz Shipping, for short), hired petitioner’s husband, Gil R. Delos
Santos (hereinafter, Delos Santos) as third engineer of MV Wild Iris. The corresponding
contract of employment, as approved by the Philippine Overseas Employment Administration
(POEA), was for a fixed period of one (1) month and for a specific undertaking of conducting
said vessel to and from Japan. It quoted Delos Santos’ basic monthly salary and other
monetary benefits in US currency. Under POEA rules, all employers and principals are
required to adopt the POEA - standard employment contract (POEA-SEC) without prejudice to
their adoption of terms and conditions over and above the minimum prescribed by that
agency.3
On the vessel’s return to the Philippines a month after, Delos Santos remained on board,
respondent having opted to retain his services while the vessel underwent repairs in Cebu.
After its repair, MV Wild Iris, this time renamed/registered as MV Super RoRo 100, sailed
within domestic waters, having been meanwhile issued by the Maritime Industry Authority a
Certificate of Vessel Registry and a permit to engage in coastwise trade on the Manila-Cebu-
Manila-Zamboanga-General Santos-Manila route.4 During this period of employment, Delos
Santos was paid by and received from respondent his salary in Philippine peso thru a payroll-
deposit arrangement with the Philippine Commercial & Industrial Bank.5
Some five months into the vessel’s inter-island voyages, Delos Santos experienced episodes
of chest pain, numbness and body weakness which eventually left him temporarily paralyzed.
On 17 February 1996, he was brought to the Manila Doctor’s Hospital – a duly accredited
hospital of respondent - where he underwent a spinal column operation. Respondent
shouldered all operation-related expenses, inclusive of his post operation confinement.
transpired:
1. After his discharge from the Manila Doctor’s, Delos Santos was made to undergo physical
therapy sessions at the same hospital, which compelled the Batangas-based Delos Santoses
to rent a room near the hospital at P3,000.00 a month;
2. Delos Santos underwent a second spinal operation at the non-accredited Lourdes
Hospital at the cost of P119, 536.00; and
3. After Lourdes, Delos Santos was confined in a clinic in San Juan, Batangas where
P20,000.00 in hospitalization expenses was incurred.
It would appear that the spouses Delos Santos paid all the expenses attendant the second
spinal operation as well as for the subsequent medical treatment. Petitioner’s demand for
reimbursement of these expenses was rejected by respondent for the reason that all the
sickness benefits of Delos Santos under the Social Security System (SSS) Law had already
been paid.
Thus, on 25 January 1997, petitioner filed a complaint6 with the Arbitration Branch of the
National Labor Relations Commission (NLRC) against respondent and Aboitiz Shipping for
recovery of disability benefits, and sick wage allowance and reimbursement of hospital and
medical expenses. She also sought payment of moral damages and attorney’s fees.
After due proceedings, the labor arbiter rendered, on 08 January 1999,7 judgment finding for
petitioner and ordering respondent and Aboitiz Shipping to jointly and severally pay the former
the following:
(1) P119,536.01, representing reimbursement of medical, surgical and hospital expenses;
(2) P9,000, representing reasonable cost of board and lodging;
(3) P500,000, representing moral damages;
(4) US$60,000, representing disability benefits corresponding to Total Permanent Disability;
(5) US$2,452, representing Sick Wage allowance;
(6) P62,853.60, representing attorney’s fees; and,
(7) US$6,245.20, also representing attorney’s fees.
On appeal, the NLRC, in a decision8 dated 29 August 2000, modified that of the labor arbiter,
as follows:
WHEREFORE, the decision appealed from is MODIFIED to the extent that respondents
Jebsen Maritime, Inc., and Aboitiz Shipping Company are hereby ordered jointly and severally
liable to pay Gil delos Santos through Amelia delos Santos the Philippine peso equivalent at
the time of actual payment of US DOLLARS SIXTY THOUSAND (US$60,000.00) and US
DOLLARS TWO THOUSAND FOUR HUNDRD (sic) FIFTY TWO (US$2,452.00) representing
total disability compensation benefits and sickness wages, and the amount of ONE
HUNDRED THREE THOUSAND EGHT (sic) HUNDRED FOUR AND 87/100 PHILIPPINE
PESOS (P103,804.87) representing reimbursement of surgical, medical and hospital
expenses, plus the equivalent of five percent (5%) of the aggregate award as and for
attorney’s fees.
All other dispositions are SET ASIDE.
SO ORDERED.
Like the labor arbiter, the NLRC predicated its ruling mainly on the theory that the POEA-
approved contract of employment continued to govern Delos Santos’ employment when he
contracted his illness. In specific terms, the NLRC states that the same contract was still
effective when Delos Santos fell ill, thus entitling him to the payment of disability and like
benefits provided in and required under the POEA-SEC.
Following the denial of its motion for reconsideration per NLRC Resolution9 of 31 October
2000, respondent went to the Court of Appeals on a petition for certiorari, thereat docketed
as CA-G.R. No. 62229, imputing on the NLRC grave abuse of discretion. In its petition,
respondent scored the NLRC for, among other things, extending the application of the expired
POEA-approved employment contract beyond the one-month limit stipulated therein.
On 21 March 2002, the Court of Appeals rendered judgment10, modifying the NLRC’s decision
by deleting altogether the award of disability compensation benefits, sickness wages and
attorney’s fees, thus:
WHEREFORE, premises considered, the instant petition for certiorari is hereby DENIED,
finding no grave abuse of discretion on the part of the NLRC. The Decision of the National
Labor Relations Commission (NLRC) dated August 29, 2000 and the Resolution of October
31, 2000 denying petitioner’s Motion for Reconsideration are hereby AFFIRMED with
MODIFICATION, that the disability compensation benefits of US$60,000.00 and the sickness
wages of US$2,452.00 are hereby deleted, without prejudice to claiming the same from the
proper government agency. The award of attorney’s fees is likewise deleted.
In time, petitioner moved for reconsideration, but the appellate court denied the motion per its
resolution of 03 July 2002.11
Hence, petitioner’s present recourse on the grounds that the Court of Appeals seriously erred:
12
I
IN DELETING THE AWARD OF US$60,000.00 REPRESENTING THE MAXIMUM
DISABILITY BENEFITS APPLYING THE PROVISIONS OF THE POEA STANDARD
EMPLOYMENT CONTRACT.
(A) PRIOR TO HIS ACCIDENT, THE EMPLOYMENT CONTRACT OF SEAFARER DELOS
SANTOS HAS NOT YET BEEN TERMINATED, IN RELATION TO SECTION 2,
PARAGRAPHS (A) AND (B) AND SECTION 18 (A), POEA STANDARD EMPLOYMENT
CONTRACT.
(B) THE CONTRACT OF EMPLOYMENT AT THE TIME OF SEAFARER DELOS SANTOS’
ACCIDENT HAS NOT YET EXPIRED BECAUSE IT WAS MUTUALLY EXTENDED BY THE
PARTIES WHEN DELOS SANTOS WAS NOT SIGNED OFF AND REPATRIATED PRIOR TO
SAID ACCIDENT.
II
IN CONCLUDING THAT NOTWITHSTANDING THE CONTINUATION OF DELOS SANTOS’
EMPLOYMENT ON BOARD THE SAME VESSEL AND UNDER THE SAME CONTRACT, IT
IS THE PROVISIONS OF THE LABOR CODE, AS AMENDED, THAT SHALL GOVERN HIS
EMPLOYMENT RELATIONS.
III
IN DELETING THE AWARD OF SICKNESS ALLOWANCE IN THE AMOUNT OF
US$2,452.00.
(A) THERE IS NO BASIS IN THE DELETION OF THE AWARD OF SICKNESS ALOWANCE
(sic) SINCE PAYMENT OF SOCIAL SECURITY SYSTEM SICK LEAVE BENEFIT IS
INDEPENDENT, SEPARATE AND DISTINCT FROM THE SICKNESS ALLOWANCE
PROVIDED FOR UNDER THE POEA STANDARD EMPLOYMENT CONTRACT.
The petition is devoid of merit.
As a rule, stipulations in an employment contract not contrary to statutes, public policy, public
order or morals have the force of law between the contracting parties.13 An employment with a
period is generally valid, unless the term was purposely intended to circumvent the
employee’s right to his security of tenure.14 Absent a covering specific agreement and unless
otherwise provided by law, the terms and conditions of employment of all employees in the
private sector shall be governed by the Labor Code15 and such rules and regulations as may
be issued by the Department of Labor and Employment and such agencies charged with the
administration and enforcement of the Code.
The differing conclusions arrived at by the NLRC, finding for the herein petitioner, and the
Court of Appeals, siding in part with the herein respondent, on Delos Santos’ entitlement to
disability benefits and sickness allowance are veritably attributable to the question of
applicability, under the premises, of the POEA-SEC. The principal issue to be resolved here,
therefore, boils down to: which, between the POEA-SEC and the Labor Code, governs the
employer-employee relationship between Delos Santos and respondent after MV Wild Iris, as
later renamed Super RoRo 100,returned to the country from its one-month conduction voyage
to and from Japan.
The Court of Appeals ruled against the governing applicability of the POEA-SEC and, on that
basis, deleted the NLRC’s award of US$60,000.00 and US$2,452.00 by way of disability
benefits and sickness allowance, respectively. An excerpt of the appellate court’s explanation:
xxx Both parties do not dispute the existence of the POEA approved contract signed by the
parties. The said contract is the law between the contracting parties and absent any showing
that its provisions are wholly or in part contrary to law, morals, good policy, it shall be enforced
to the letter by the contracting parties (Metropolitan Bank and Trust Co. vs. Wong, G.R. No.
120859, June 26, 2001). The contract in question is for a duration of one (1) month. Being a
valid contract between Delos Santos and the [respondent], the provisions thereof, specifically
with respect to the one (1) month period of employment has the force of law between
them (D.M. Consunji vs. NLRC, G.R. No. 116572, December 18, 2000). Perforce, the said
contract has already expired and is no longer in effect.
The fact that Delos Santos continued to work in the same vessel which sailed within Philippine
waters does not mean that the POEA standard employment contract continues to be enforced
between the parties. The employment of Delos Santos is within the Philippines, and not on a
foreign shore. As correctly pointed out by [respondent], the provisions of the Labor Code shall
govern their employer-employee relationship. xxx. (Words in bracket added.)
The Court agrees with the conclusion of the Court of Appeals for two (2) main reasons. First,
we the start with something elementary, i.e., POEA was created primarily to undertake a
systematic program for overseas employment of Filipino workers and to protect their rights to
fair and equitable employment practices.16 And to ensure that overseas workers, including
seafarers on board ocean-going vessels, are amply protected, the POEA is authorized to
formulate employment standards in accordance with welfare objectives of the overseas
employment program.17 Given this consideration, the Court is at a loss to understand why the
POEA-SEC should be made to continue to apply to domestic employment, as here, involving
a Filipino seaman on board an inter-island vessel.
Just as basic as the first reason is the fact that Delos Santos’ POEA-approved employment
contract was for a definite term of one (1) month only, doubtless fixed to coincide with the pre-
determined one-month long Philippines-Japan-Philippines conduction-voyage run. After the
lapse of the said period, his employment under the POEA-approved contract may be deemed
as functus oficio and Delos Santos’ employment pursuant thereto considered automatically
terminated, there being no mutually-agreed renewal or extension of the expired contract.
18 This is as it should be. For, as we have held in the landmark case of Millares v. National
Labor Relations Commission:19
From the foregoing cases, it is clear that seafarers are considered contractual employees.
… 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 [of the Labor
Code] whose employment has been fixed for a specific project or undertaking . . . 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. (Underscoring and
words in bracket added)
Petitioner’s posture, citing Section 2 (A)20 in relation to Section 1821 of the POEA-SEC about
the POEA approved contract still subsisting since Delos Santos was never signed off from the
vessel and repatriated to Manila, the point of hire, is untenable. With the view we have of
things, Delos Santos is deemed to have been signed off when he acceded to a new
employment arrangement offered by the respondent. A seaman need not physically
disembarked from a vessel at the expiration of his employment contract to have such contract
considered terminated. And the repatriation aspect of the contract assumes significance only
where the vessel remains in a foreign port. For, repatriation presupposes a return to one’s
country of origin or citizenship.22 In the case at bar, however, there can be quibbling that
MV Wild Iris returned to the port of Cebu with Delos Santos on board. Parenthetically, while
the parties are agreed that their underlying contract was executed in the country, the records
do not indicate what city or province of the Philippines is the specific point of hire. While
petitioner says it is Manila, she did not bother to attach to her petition a copy of the contract of
employment in question.
Petitioner next submits, echoing the NLRC’s holding, that the POEA-approved contract
remained in full force and effect even after the expiry thereof owing to the interplay of the
following circumstances: 1) Delos Santos, after such contract expiration, did not conclude
another contract of employment with respondent, but was asked to remain and work on board
the same vessel just the same; and 2) If the parties intended their employer-employee
relationship to be under the aegis of a new contract, such intention should have been
embodied in a new agreement.
Contract extension or continuation by mutual consent appears to be petitioner’s thesis.
We are not persuaded.
The fact that respondent retained Delos Santos and allowed him to remain on board the
vessel cannot plausibly be interpreted, in context, as evidencing an intention on its part to
continue with the POEA-SEC. In the practical viewpoint, there could have been no sense in
consenting to renewal since the rationale for the execution of the POEA-approved contract
had already been served and achieved.
At any rate, factors obtain arguing against the notion that respondent consented to contract
extension under the same terms and conditions prevailing when the original contract expired.
Stated a bit differently, there are compelling reasons to believe that respondent retained the
services of the acceding Delos Santos, as the Court of Appeals aptly observed, but under
domestic terms and conditions. We refer first to the reduced salary of Delos Santos payable in
Philippine peso23 which, significantly enough, he received without so much of a protest. As
respondent stated in its Comment, without any controverting response from petitioner, Delos
Santos, for the period ending October 31, 1995, was drawing a salary at the rate of ₱8,475.00
a month, whereas the compensation package stipulated under the POEA-approved contract
provided for a US$613 basic monthly salary and a US$184 fixed monthly overtime pay. And
secondly, MV Super RoRo 100 was no longer engaged in foreign trading as it was no longer
intended as an ocean-going ship. Accordingly, it does not make sense why a seafarer of
goodwill or a manning agency of the same disposition would insist on being regulated by an
overseas employment agency under its standard employment contract, which governs
employment of Filipino seamen on board ocean-going vessels.24
Petitioner’s submission about the parties not having entered into another employment contract
after the expiration of the POEA-approved employment contract, ergo, the extension of the
expired agreement, is flawed by the logic holding it together. For, it presupposes that an
agreement to do or to give does not bind, unless it is embodied in a written instrument. It is
elementary, however, that, save in very rare instances where certain formal requisites go into
its validity, a contract, to be valid and binding between the parties, need not be in writing. A
contract is perfected when the contracting minds agree on the object and cause thereof.
25 And, as earlier discussed, several circumstantial indicia tended to prove that a new
arrangement under domestic terms was agreed upon by the principal players to govern the
employment of Delos Santos after the return of MV Wild Iris to the country to engage in
coastwise trading.
Given the foregoing perspective, the disallowance under the decision subject of review of the
petitioner’s claim for maximum disability benefits and sickness allowance is legally correct. As
it were, Delos Santos’ right to such benefits is predicated on the continued enforceability of
POEA-SEC when he contracted his illness, which, needless to stress, was not the case.
Likewise legally correct is the deletion of the award of attorney’s fees, the NLRC having failed
to explain petitioner’s entitlement thereto. As a matter of sound policy, an award of attorney’s
fee remains the exception rather than the rule. It must be stressed, as aptly observed by the
appellate court, that it is necessary for the trial court, the NLRC in this case, to make express
findings of facts and law that would bring the case within the exception. In fine, the factual,
legal or equitable justification for the award must be set forth in the text of the decision.26 The
matter of attorney’s fees cannot be touched once and only in the fallo of the decision, else, the
award should be thrown out for being speculative and conjectural.27 In the absence of a
stipulation, attorney’s fees are ordinarily not recoverable; otherwise a premium shall be placed
on the right to litigate.28 They are not awarded every time a party wins a suit.
WHEREFORE, the petition is DENIED and the assailed Decision and Resolution of the Court
of Appeals AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
[G.R. No. 152427. August 9, 2005]
INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and GLEN SOLON, respondents.
DECISION
QUISUMBING, J.:
This petition for review assails the Decision[1] dated October 30, 2001 of the Court of
Appeals and its Resolution[2] dated February 28, 2002 in CA-G.R. SP No. 60136, denying the
petitioners motion for reconsideration for lack of merit. The decision affirmed the National
Labor Relations Commission (NLRC) which declared private respondent Glen Solon a regular
employee of the petitioner and awarded him 13th month pay, service incentive leave pay,
reinstatement to his former position with full backwages from the time his salary was withheld
until his reinstatement.
Petitioner is a plumbing contractor. Its business depends on the number and frequency
of the projects it is able to contract with its clients.[3]
Private respondent Solon worked for petitioner. His employment records is as follows:
December 14, 1994 up to January 14, 1995 St. Charbel Warehouse
February 1, 1995 up to April 30, 1995 St. Charbel Warehouse
May 23, 1995 up to June 23, 1995 St. Charbel Warehouse
August 15, 1995 up to October 31, 1995 St. Charbel Warehouse
November 2, 1995 up to January 31, 1996 St. Charbel Warehouse
May 13, 1996 up to June 15, 1996 Ayala Triangle
August 27, 1996 up to November 30, 1996 St. Charbel Warehouse[4]
July 14, 1997 up to November 1997 ICPWI Warehouse
November 1997 up to January 5, 1998 Cathedral Heights
January 6, 1998 Rockwell Center[5]
On February 23, 1998, while private respondent was about to log out from work, he was
informed by the warehouseman that the main office had instructed them to tell him it was his
last day of work as he had been terminated. When private respondent went to the petitioners
office on February 24, 1998 to verify his status, he found out that indeed, he had been
terminated. He went back to petitioners office on February 27, 1998 to sign a clearance so he
could claim his 13th month pay and tax refunds. However, he had second thoughts and
refused to sign the clearance when he read the clearance indicating he had resigned. On
March 6, 1998, he filed a complaint alleging that he was illegally dismissed without just cause
and without due process.[6]
In a Decision dated February 26, 1999, the Labor Arbiter ruled that private respondent
was a regular employee and could only be removed for cause. Petitioner was ordered to
reinstate private respondent to his former position with full backwages from the time his salary
was withheld until his actual reinstatement, and pay him service incentive leave pay, and
13th month pay for three years in the amount of P2,880 and P14,976, respectively.
Petitioner appealed to the National Labor Relations Commission (NLRC), which ruled:
WHEREFORE, prescinding from the foregoing and in the interest of justice, the decision of the Labor
Arbiter is hereby AFFIRMED with a MODIFICATION that the 13th month pay should be given only for
the year 1997 and portion of 1998. Backwages shall be computed from the time he was illegally
dismissed up to the time of his actual reinstatement. Likewise, service incentive leave pay for three (3)
years is also awarded to appellee in the amount of P2,880.00.
SO ORDERED.[7]
Petitioners Motion for Reconsideration was denied.[8]
Petitioner appealed to the Court of Appeals, alleging that the NLRC committed grave
abuse of discretion in finding that the private respondent was a regular employee and in
awarding 13th month pay, service incentive leave pay, and holiday pay to the private
respondent despite evidence of payment. The said petition was dismissed for lack of merit.[9]
Before us now, petitioner raises the following issues: (1) Whether the respondent is a
project employee of the petitioner or a regular employee; and (2) Whether the Court of
Appeals erred seriously in awarding 13th month pay for the entire year of 1997 and service
incentive leave pay to the respondent and without taking cognizance of the evidence
presented by petitioner.[10]
The petitioner asserts that the private respondent was a project employee. Thus, when
the project was completed and private respondent was not re-assigned to another project,
petitioner did not violate any law since it was petitioners discretion to re-assign the private
respondent to other projects.[11]
Article 280 of the Labor Code states:
The provisions of written agreement of the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature and the employment is for
the duration of the season (Italics supplied.)
We held in Tomas Lao Construction v. NLRC[12] that the principal test in determining
whether an employee is a project employee or regular employee, is, whether he is assigned to
carry out a specific project or undertaking, the duration (and scope) of which are specified at
the time the employee is engaged in the project.[13] Project refers to a particular job or
undertaking that is within the regular or usual business of the employer, but which is distinct
and separate and identifiable from the undertakings of the company. Such job or undertaking
begins and ends at determined or determinable times.[14]
In our review of the employment contracts of private respondent, we are convinced he
was initially a project employee. The services he rendered, the duration and scope of each
project are clear indications that he was hired as a project employee.
We concur with the NLRC that while there were several employment contracts between
private respondent and petitioner, in all of them, private respondent performed tasks which
were usually necessary or desirable in the usual business or trade of petitioner. A review of
private respondents work assignments patently showed he belonged to a work pool tapped
from where workers are and assigned whenever their services were needed. In a work pool,
the workers do not receive salaries and are free to seek other employment during temporary
breaks in the business. They are like regular seasonal workers insofar as the effect of
temporary cessation of work is concerned. This arrangement is beneficial to both the employer
and employee for it prevents the unjust situation of coddling labor at the expense of capital
and at the same time enables the workers to attain the status of regular employees.
[15] Nonetheless, the pattern of re-hiring and the recurring need for his services are sufficient
evidence of the necessity and indispensability of such services to petitioners business or
trade.[16]
In Maraguinot, Jr. v. NLRC[17] we ruled that once a project or work pool employee has
been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the
same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to
the usual business or trade of the employer, then the employee must be deemed a regular
employee.
In this case, did the private respondent become a regular employee then?
The test to determine whether employment is regular or not is the reasonable
connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. Also, if the employee has been performing the job for at
least one year, even if the performance is not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient evidence of the necessity, if
not indispensability of that activity to the business.[18] Thus, we held that where the
employment of project employees is extended long after the supposed project has been
finished, the employees are removed from the scope of project employees and are considered
regular employees.[19]
While length of time may not be the controlling test for project employment, 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.[20] Where from the circumstances it is apparent that periods have been
imposed to preclude the acquisition of tenurial security by the employee, they should be struck
down as contrary to public policy, morals, good customs or public order.[21]
Further, Policy Instructions No. 20 requires employers to submit a report of an
employees termination to the nearest public employment office every time his employment
was terminated due to a completion of a project. The failure of the employer to file termination
reports is an indication that the employee is not a project employee.[22] Department Order No.
19 superseding Policy Instructions No. 20 also expressly provides that the report of
termination is one of the indications of project employment.[23] In the case at bar, there was
only one list of terminated workers submitted to the Department of Labor and Employment.
[24] If private respondent was a project employee, petitioner should have submitted a
termination report for every completion of a project to which the former was assigned.
Juxtaposing private respondents employment history, vis the requirements in the test to
determine if he is a regular worker, we are constrained to say he is.
As a regular worker, private respondent is entitled to security of tenure under Article 279
of the Labor Code[25] and can only be removed for cause. We found no valid cause attending
to private respondents dismissal and found also that his dismissal was without due process.
Additionally, Article 277(b) of the Labor Code provides that
... Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and shall SECOND DIVISION
afford the latter ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations promulgated pursuant
to guidelines set by the Department of Labor and Employment UNIVERSAL ROBINA G.R. No. 164736
CORPORATION and/or
The failure of the petitioner to comply with these procedural guidelines renders its RANDY GREGORIO,
dismissal of private respondent, illegal. An illegally dismissed employee is entitled to Petitioners,
reinstatement with full backwages, inclusive of allowances, and to his other benefits computed
from the time his compensation was withheld from him up to the time of his actual
reinstatement, pursuant to Article 279 of the Labor Code. - versus -
However, we note that the private respondent had been paid his 13th month pay for the
year 1997. The Court of Appeals erred in granting the same to him.
BENITO CATAPANG, CARLOS
Article 95(a) of the Labor Code governs the award of service incentive leave. It provides ARARAO, ALVIN ALCANTARA, Present:
that every employee who has rendered at least one year of service shall be entitled to a yearly RESTY ALCORAN, REYNALDO
service incentive leave of five days with pay, and Section 3, Rule V, Book III of the ARARAO, JUAN ARISTADO, PUNO, J., Chairman,
Implementing Rules and Regulations, defines the term at least one year of service to mean LITO CABRERA, ONOFRE AUSTRIA-MARTINEZ,
service within 12 months, whether continuous or broken reckoned from the date the employee CASANO, BEN CERVAS, CALLEJO, SR.,
started working, including authorized absences and paid regular holidays, unless the working JOSEPH CHUIDIAN, IRENEO TINGA, and
days in the establishment as a matter of practice or policy, or that provided in the employment COMENDADOR, ANGELITO CHICO-NAZARIO, JJ.
contract is less than 12 months, in which case said period shall be considered as one year. CONCHADA, RICHARD
Accordingly, private respondents service incentive leave credits of five days for every year of CORONADO, ELMER HILING,
service, based on the actual service rendered to the petitioner, in accordance with each RAMON JOYOSA, JOSE
contract of employment should be computed up to the date of reinstatement pursuant to LORIA, JR., VICTORIANO
Article 279 of the Labor Code.[26] LORIA, RUEL MARIKIT,
RODERICK PANG-AO, QUIRINO
WHEREFORE, the assailed Decision dated October 30, 2001 and the Resolution dated PLATERO, PABLITO REDONDO,
February 28, 2002 of the Court of Appeals in CA-G.R. SP No. 60136, are AFFIRMED with RAMIL ROXAS, RESTY SALAZAR,
MODIFICATION. The petitioner is hereby ORDERED to (1) reinstate the respondent with no NOEL TRINIDAD, FELICISIMO
loss of seniority rights and other privileges; and (2) pay respondent his backwages, 13th month VARELA, BALTAZAR
pay for the year 1998 and Service Incentive Leave Pay computed from the date of his illegal VILLANUEVA, ELPIDIO Promulgated:
dismissal up to the date of his actual reinstatement. Costs against petitioner. VILLANUEVA, JOEL
VILLANUEVA, JONATHAN October 14, 2005
SO ORDERED. VILLANUEVA, and JAIME
VILLEGAS,
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
Respondents.

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 DECISION CALLEJO, SR., J.: 16. Angelito Conchada P119,192.20
17. Juan Aristado P113,703.20
18. Joel Villanueva P113,703.20
Petitioner Universal Robina Corporation is a corporation duly organized and existing under 19. Ben Cervas P113,703.20
the Philippine laws, while petitioner Randy Gregorio is the manager of the petitioner companys duck 20. Ruel Marikit P113,703.20
farm in Calauan, Laguna.[1] 21. Ireneo Comendador P113,703.20
Total ------------------------ P2,339,933.44
The individual respondents were hired by the petitioner company on various dates from Respondents are likewise ordered to pay fifteen percent (15%) of the total amount due,
1991 to 1993 to work at its duck farm in Barangay Sto. Tomas, Calauan, Laguna. The respondents were or P 350,990.01, as and by way of attorneys fees.
hired under an employment contract which provided for a five-month period. After the expiration of the SO ORDERED.[3]
said employment contracts, the petitioner company would renew them and re-employ the respondents.
This practice continued until sometime in 1996, when the petitioners informed the respondents that they
were no longer renewing their employment contracts.[2] On May 17, 1999, the petitioners filed an Appeal Memorandum with the National Labor Relations
Commission (NLRC) on the ground that the Labor Arbiter erred in ruling that the respondents are the
In October 1996, the respondents filed separate complaints for illegal dismissal, petitioner companys regular employees.
reinstatement, backwages, damages and attorneys fees against the petitioners. The complaints were later
consolidated. Meanwhile, on May 18, 1999, the respondents filed a Motion for Enforcement of
Reinstatement Order with the Labor Arbiter. On June 3, 1999, the latter issued an Order, which reads in
On March 30, 1999, after due proceedings, the Labor Arbiter rendered a decision in favor of full:
the respondents: Finding the Motion for Enforcement of Reinstatement Order dated 18 May 1999, filed by
WHEREFORE, premises considered, judgment is hereby rendered declaring that the complainants to be in order, respondents are hereby directed to immediately comply in good faith to
complainants have indeed been illegally dismissed from their employment. the reinstatement aspect of the Decision of this Office dated 30 March 1999.
Accordingly, respondents are hereby ordered to reinstate individual complainants to their Furthermore, it appearing from the records that several individuals in this case were
former positions without loss of seniority rights and to pay them their backwages as follows: inadvertently omitted as party-complainants in the aforesaid Decision, clarification is hereby made that
Complainants Amount the complainants hereinbelow set forth are to be deemed included in the coverage of the said decision
1. Reynaldo Ararao P113,703.20 with the corresponding right(s) to their backwages, to wit:
2. Carlos Ararao P100,372.48 1. Alvin Alcantara - P129,126.40
3. Resty Alcoran P100,372.48 2. Onofre Casano - P106,917.20
4. Richard Coronado P113,703.20 3. Joseph Chuidian - P104,165.10
5. Quirino Platero P113,703.20 4. Ramon Joyosa - P128,029.20
6. Benito Catapang P113,703.20 5. Pablito Redondo - P105,409.20
7. Jose Loria, Jr. P100,372.48 6. Ramil Roxas - P109,330.00
8. Elpidio Villanueva P113,703.20 7. Resty Salazar - P105,296.10
9. Jonathan Villanueva P113,703.20 8. Noel Trinidad - P108,312.10
10. Baltazar Villanueva P113,703.20 9. Felicisimo Varela - P119,358.20
11. Victoriano Loria P144,881.10 TOTAL - P1,015,943.50
12. Roderick Pangao P100,372.48 SO ORDERED.[4]
13. Lito Cabrera P113,703.20
14. Elmer Hiling P113,703.20
15. Jaime Villegas P113,703.20
 On June 21, 1999, the Labor Arbiter issued a Writ of Execution enforcing the immediate
reinstatement of the respondents as mandated in the March 30, 1999 Decision.
On July 13, 1999, the petitioners manifested to the Labor Arbiter that they can reinstate only
17 of the 30 employees in view of the phase out of the petitioner companys Agricultural Section as early
as 1996. They averred that there were no other available positions substantially similar to the positions
previously occupied by the other 13 respondents, but that 10 of them could be accommodated at the
farms Duck Dressing Section which operates at an average of three days a week only.[5]
On August 2, 1999, the Sheriff filed a Report stating that the petitioners had not yet
reinstated the respondents.[6] The respondents then urged the Labor Arbiter to order their physical or
payroll reinstatement and to cite the petitioners in contempt. On November 26, 1999, the Labor Arbiter
issued an Order[7] directing the petitioners, under pain of contempt, to comply with the March 30, 1999
Decision.
On December 16, 1999, 17 employees were reinstated to their former positions. Thereafter,
the respondents moved for the immediate reinstatement of the remaining 13 respondents. In the
meantime, the petitioners manifested to the Labor Arbiter about the closure of the duck farm effective
March 15, 2000.[8]
On February 9, 2000, the Labor Arbiter issued an Order[9] directing the petitioners to immediately effect
the actual or payroll reinstatement of the remaining 13 respondents. In the said Order, the petitioners
were likewise directed to settle whatever financial accountabilities they may have with the said
respondents due to the delay in complying with the reinstatement aspect of the March 30, 1999
Decision.
On February 16, 2000, the respondents manifested that the petitioners still failed and refused to comply
with the February 9, 2000 Order. That same day, the Labor Arbiter issued an Alias Writ of Execution
commanding the Sheriff to cause the immediate reinstatement of the 13 respondents and to collect their
withheld salaries.[10]
On February 21, 2000, the respondents moved for the issuance of a notice of garnishment to
collect the accumulated withheld wages of the 17 respondents who were reinstated on December 16,
1999 amounting to P649,400.00. The Labor Arbiter granted the motion and issued a Second Alias Writ
of Execution directing the Sheriff to proceed to collect the said amount plus execution fees.[11]
Thereafter, the petitioners filed an urgent motion to reconsider the February 9, 2000 Order
and to quash the Alias Writ of Execution. They reiterated their previous contention that they are unable
to comply with the order either because the section to which the 13 respondents were previously
assigned had been phased out or the positions previously held by them have already been filled up.[12]
On March 1, 2000, the Labor Arbiter issued an Order[13] denying the petitioners motion to
quash insofar as the reinstatement aspect is concerned as well as the motion to reconsider and set aside
the February 9, 2000 Order. In case of failure to comply with the reinstatement of the 13 respondents,
the Labor Arbiter directed the petitioner company to pay them separation pay instead.[14]
On March 13, 2000, the petitioners filed a Memorandum and Notice of Appeal with Prayer for the
Issuance of a Temporary Restraining Order[15] with the NLRC, assailing the February 9, 2000 and
March 1, 2000 Orders and the two Alias Writs of Execution issued by the Labor Arbiter.
On November 22, 2000, the NLRC affirmed the decision of the Labor Arbiter with the
modification that the award of attorneys fees was reduced to 10% of the total monetary award.[16]
Aggrieved, the petitioners filed a petition for certiorari with the Court of Appeals (CA). On
August 21, 2003, the CA denied the petition for lack of merit.[17] The CA held that after rendering more
than one year of continuous service, the respondents became regular employees of the petitioners by
operation of law. Moreover, the petitioners used the five-month contract of employment as a convenient
subterfuge to prevent the respondents from becoming regular employees and such contractual
arrangement should be struck down or disregarded as contrary to public policy or morals. The
petitioners act of repeatedly and continuously hiring the respondents in a span of three to five years to
do the same kind of work negates their assertion that the respondents were hired for a specific project or
undertaking only. As to the issue of the failure to reinstate the 13 respondents pending appeal, the CA
opined that the petitioners should have at least reinstated them in the payroll if there were indeed no
longer any available positions for which they could be accommodated.[18] Finally, the CA did not
believe that the petitioners counsel was not furnished with copies of the assailed orders and the alias
writs of execution considering that, after the issuance of the said orders, the petitioners were able to file
several pleadings questioning the same.[19]
On September 23, 2003, the petitioners filed a Manifestation and Motion for Additional
Time to File a Motion for Reconsideration of the CA Decision.[20] They alleged therein that they
received a copy of the decision on September 8, 2003 and had until September 23, 2003 to file a motion
for reconsideration. They then prayed for an extension of 10 days, or until October 3, 2003, to submit a
motion for reconsideration.
Realizing their error, the petitioners filed their Motion for Reconsideration two days later. In
a Resolution[21] dated September 30, 2003, the CA denied the petitioners earlier motion for extension of
time for being a prohibited pleading. Subsequently, the petitioners filed their Urgent Motion to Admit
Petitioners Motion for Reconsideration, but the CA merely noted the petitioners motion for
reconsideration in its April 15, 2004 Resolution. This prompted the petitioners to file a Motion to
Resolve Petitioners Motion for Reconsideration.[22] Finding no cogent reason to depart from its previous
resolution denying the motion for extension of time to file a motion for reconsideration, the CA denied
the said motion for lack of merit on July 19, 2004.[23]
Hence, this petition for review wherein the petitioners raise the following grounds:
I. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT THE
RESPONDENTS ATTAINED THE STATUS OF REGULAR EMPLOYMENT AFTER THE LAPSE
OF ONE YEAR FROM THE DATE OF THEIR EMPLOYMENT.
II. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT DESPITE THE
UNAVAILABILITY OF POSITIONS WHERE THE THIRTEEN (13) RESPONDENTS ARE TO BE
REINSTATED THEY SHOULD STILL BE REINSTATED THROUGH PAYROLL.
III. THE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO RESOLVE THE ISSUE
OF WHETHER OR NOT THE PETITIONERS SHOULD BE HELD LIABLE FOR THE PAYMENT
OF THE ALLEGED WITHHELD SALARIES OF THE RESPONDENTS FROM THE DATE OF
ISSUANCE OF THE WRIT DESPITE THAT RESPONDENTS BELATED OR NON-
REINSTATEMENT CANNOT BE ATTRIBUTED TO THE PETITIONERS.
IV. THE COURT OF APPEALS SHOULD HAVE RESOLVED PETITIONERS MOTION FOR
RECONSIDERATION CONSIDERING THAT THE DELAY WAS ONLY FOR TWO (2)
DAYS AND WAS THE RESULT OF AN HONEST MISTAKE.[24]
The petitioners submit that the respondents are not regular employees. They aver that it is of no moment
that the respondents have rendered service for more than a year since they were covered by the five-
month individual contracts to which they duly acquiesced. The petitioners contend that they were free to
terminate the services of the respondents at the expiration of their individual contracts. The petitioners
maintain that, in doing so, they merely implemented the terms of the contracts.[25]
The petitioners assert that the respondents contracts of employment were not intended to
circumvent security of tenure. They point out that the respondents knowingly and voluntarily agreed to
sign the contracts without the petitioners having exercised any undue advantage over them. Moreover,
there is no evidence showing that the petitioners exerted moral dominance on the respondents.[26]
The petitioners further assert that they cannot be compelled to actually reinstate, or merely
reinstate in the payroll the 13 respondents considering there are no longer any available positions in the
company. They submit that reinstatement presupposes that the previous positions from which the
respondents had been removed still exist or that there are unfilled positions, more or less, of similar
nature as the ones previously occupied by the said employees. Consequently, they cannot be made to
pay the salaries of these employees from the time the writ of execution was issued.[27]
Finally, the petitioners aver that their motion for reconsideration of the CA Decision should have been
admitted by the CA considering that the delay was only for two days and such delay was due to an
honest mistake. They maintain that the ends of substantial justice would have been better served if the
motion for reconsideration was resolved since it raised critical issues previously raised in the petition
but not resolved by the CA.[28]
For their part, the respondents aver that the instant petition should be dismissed outright because the CA
Decision has already become final since the petitioners filed their motion for reconsideration beyond the
reglementary 15-day period. They also aver that the motion for extension of time to file a motion for
reconsideration, a prohibited pleading, did not suspend the running of the period to file a motion for
reconsideration, which is also the period for filing an appeal with this Court. Hence, at the time the
present petition was filed with this Court, the period for filing the appeal had already lapsed.[29] The
respondents further aver that the petition should likewise be dismissed for lack of a verified statement of
material dates. They assert that the Rules of Court requires a separate verified statement of material
dates and its incorporation in the body of the petition is not substantial compliance of such requirement.
[30]
The respondents aver that they acquired the status as regular employees after rendering one
year of service to the petitioner company. They contend that the contracts providing for a fixed period
of employment should be struck down as contrary to public policy, morals, good customs or public
order as it was designed to preclude the acquisition of tenurial security.[31]
The respondents contend that the order directing their payroll reinstatement was proper
considering that the petitioners have failed to actually reinstate them.[32] They assert that the delay in the
reinstatement of the 13 respondents could only be attributed to the petitioners; hence, they are liable for
withheld salaries to these employees.[33]
It appears that the present petition has, indeed, been filed beyond the reglementary period
for filing a petition for review under Rule 45 of the Rules of Court. This period is set forth in Section 2,
Rule 45, which provides as follows:
SEC. 2. Time for filing; extension. The petition shall be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or of the denial of the petitioners motion for new
trial or reconsideration filed in due time after notice of judgment. (Emphasis supplied.)
In conjunction with the said provision, Section 1, Rule 52 of the same Rules provides:
SEC. 1. Period for filing. A party may file a motion for reconsideration of a judgment or
final resolution within fifteen (15) days from notice threof, with proof of service on the adverse party.
Clearly, the period for filing a motion for reconsideration and a petition for review with this
Court are the same, that is, 15 days from notice of the judgment. When an aggrieved party files a
motion for reconsideration within the said period, the period for filing an appeal is suspended. If the
motion is denied, the aggrieved party is given another 15-day period from notice of such denial within
which to file a petition for review under Rule 45. It must be stressed that the aggrieved party will be
given a fresh 15-day period only when he has filed his motion for reconsideration in due time on or
before the expiration of the original 15-day period. Otherwise, if the motion for reconsideration is filed
out of time and no appeal has been filed, the subject decision becomes final and executory.[34] As such,
it becomes immutable and can no longer be attacked by any of the parties or be modified, directly or
indirectly, even by the highest court of the land.[35]
The petitioners received the CA Decision on September 8, 2003; hence, they had until
September 23, 2003 within which to file a motion for reconsideration, or an appeal, through a petition
for review, with this Court. Instead, the petitioners filed a motion for extension of time to file a motion
for reconsideration on September 23, 2003, which is a prohibited pleading.[36] Thus, it did not suspend
the running of the period for filing an appeal. Consequently, the period to file a petition for review with
this Court also expired on September 23, 2003. Instead of going straight to this Court to attempt to file a
petition for review (which had already expired), the petitioners pursued recourse in the CA by filing
their motion for reconsideration two days later, or on September 25, 2003. The CA merely noted the
same. Dissatisfied, the petitioners subsequently filed a motion to resolve their motion for
reconsideration. The CA acted on this motion only on July 19, 2004 and denied the same for lack of
merit.
In filing their petition for review with this Court, the petitioners counted the 15-day period
from their receipt of the July 19, 2004 CA Resolution on August 4, 2004. Hence, according to their
Motion for Extension of Time to File Petition for Review which they filed on August 19, 2004, they had
until that day within which to file a petition for review. They then asked the Court that they be granted
an extension of 30 days, or until September 21, 2004 within which to file their petition. The Court
granted the motion on the belief that the petitioners motion for reconsideration before the CA was duly
filed and that the assailed July 19, 2004 CA Resolution had denied the said motion. Thereafter, the
petitioners filed their petition for review on September 20, 2004.
It is, therefore, evident from the foregoing that the present petition was filed way beyond
the reglementary period. Hence, its outright dismissal would be proper. The perfection of an appeal in
the manner and within the period prescribed by law is not only mandatory but jurisdictional, and failure
to perfect an appeal has the effect of rendering the judgment final and executory.[37] Just as a losing
party has the privilege to file an appeal within the prescribed period, so does the winner also have the
correlative right to enjoy the finality of the decision.[38]
Anyone seeking exemption from the application of the reglementary period for filing an
appeal has the burden of proving the existence of exceptionally meritorious instances warranting such
deviation.[39] In this case, the petitioners failed to prove the existence of any fact which would warrant
the relaxation of the rules. In fact, they have not even acknowledged that their petition was filed beyond
the reglementary period.
In any case, we find that the CA, the NLRC and the Labor Arbiter correctly categorized the
respondents as regular employees of the petitioner company. In Abasolo v. National Labor Relations
Commission,[40] the Court reiterated the test in determining whether one is a regular employee:
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual trade or
business of the employer. The test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be determined by considering the nature of work
performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity and while such activity exists.[41]
Thus, we quote with approval the following excerpt from the decision of the CA:
It is obvious that the said five-month contract of employment was used by petitioners as a
convenient subterfuge to prevent private respondents from becoming regular employees. Such
contractual arrangement should be struck down or disregarded as contrary to public policy or morals. To
uphold the same would, in effect, permit petitioners to avoid hiring permanent or regular employees by
simply hiring them on a temporary or casual basis, thereby violating the employees security of tenure in
their jobs.
Petitioners act of repeatedly and continuously hiring private respondents in a span of 3 to 5
years to do the same kind of work negates their contention that private respondents were hired for a
specific project or undertaking only.[42]
Further, factual findings of labor officials who are deemed to have acquired expertise in
matters within their respective jurisdiction are generally accorded not only respect but even finality, and
bind us when supported by substantial evidence.[43]
WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The
Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
G.R. No. 79869 September 5, 1991
FORTUNATO MERCADO, SR., ROSA MERCADO, FORTUNATO MERCADO, JR.,
ANTONIO MERCADO, JOSE CABRAL, LUCIA MERCADO, ASUNCION GUEVARA, ANITA
MERCADO, MARINA MERCADO, JULIANA CABRAL, GUADALUPE PAGUIO, BRIGIDA
ALCANTARA, EMERLITA MERCADO, ROMEO GUEVARA, ROMEO MERCADO and LEON
SANTILLAN, petitioners, 
 1975-1978 — P6.00
vs.
 1978-1979 — P7.00
NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD DIVISION; LABOR
ARBITER LUCIANO AQUINO, RAB-III; AURORA L. CRUZ; SPOUSES FRANCISCO DE
BORJA and LETICIA DE BORJA; and STO. NIÑO REALTY,
INCORPORATED, respondents.
Servillano S. Santillan for petitioners.
 farms, but only to do a particular phase of agricultural work necessary in rice production and/
Luis R. Mauricio for private respondents.
PADILLA, J.:
Assailed in this petition for certiorari is the decision * of the respondent national Labor
Relations Commission (NLRC) dated 8 August 1984 which affirmed the decision of
respondent Labor Arbiter Luciano P. Aquino with the slight modification of deleting the award
of financial assistance to petitioners, and the resolution of the respondent NLRC dated 17
August 1987, denying petitioners' motion for reconsideration.
This petition originated from a complaint for illegal dismissal, underpayment of wages, non-
payment of overtime pay, holiday pay, service incentive leave benefits, emergency cost of
living allowances and 13th month pay, filed by above-named petitioners against private
respondents Aurora L. Cruz, Francisco Borja, Leticia C. Borja and Sto. Niño Realty
Incorporated, with Regional Arbitration Branch No. III, National Labor Relations Commission in
San Fernando, Pampanga.1
Petitioners alleged in their complaint that they were agricultural workers utilized by private
respondents in all the agricultural phases of work on the 7 1/2 hectares of ace land and 10
hectares of sugar land owned by the latter; that Fortunato Mercado, Sr. and Leon Santillan
worked in the farm of private respondents since 1949, Fortunato Mercado, Jr. and Antonio
Mercado since 1972 and the rest of the petitioners since 1960 up to April 1979, when they
were all allegedly dismissed from their employment; and that, during the period of their
employment, petitioners received the following daily wages:
From 1962-1963 — P1.50

1963-1965 — P2.00

1965-1967 — P3.00

1967-1970 — P4.00

1970-1973 — P5.00

1973-1975 — P5.00



Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said
petitioners were her regular employees and instead averred that she engaged their services,
through Spouses Fortunato Mercado, Sr. and Rosa Mercado, their "mandarols", that is,
persons who take charge in supplying the number of workers needed by owners of various
or sugar cane production, after which they would be free to render services to other farm
owners who need their services.2
The other private respondents denied having any relationship whatsoever with the petitioners
and state that they were merely registered owners of the land in question included as
corespondents in this case.3
The dispute in this case revolves around the issue of whether or not petitioners are regular
and permanent farm workers and therefore entitled to the benefits which they pray for. And
corollary to this, whether or not said petitioners were illegally dismissed by private
respondents.
Respondent Labor Arbiter Luciano P. Aquino ruled in favor of private respondents and held
that petitioners were not regular and permanent workers of the private respondents, for the
nature of the terms and conditions of their hiring reveal that they were required to perform
phases of agricultural work for a definite period of time after which their services would be
available to any other farm owner.4 Respondent Labor Arbiter deemed petitioners' contention
of working twelve (12) hours a day the whole year round in the farm, an exaggeration, for the
reason that the planting of lice and sugar cane does not entail a whole year as reported in the
findings of the Chief of the NLRC Special Task Force.5 Even the sworn statement of one of the
petitioners, Fortunato Mercado, Jr., the son of spouses Fortunato Mercado, Sr. and Rosa
Mercado, indubitably show that said petitioners were hired only as casuals, on an "on and off"
basis, thus, it was within the prerogative of private respondent Aurora Cruz either to take in the
petitioners to do further work or not after any single phase of agricultural work had been
completed by them.6
Respondent Labor Arbiter was also of the opinion that the real cause which triggered the filing
of the complaint by the petitioners who are related to one another, either by consanguinity or
affinity, was the filing of a criminal complaint for theft against Reynaldo Mercado, son of
spouses Fortunate Mercado, Sr. and Rosa Mercado, for they even asked the help of Jesus
David, Zone Chairman of the locality to talk to private respondent, Aurora Cruz regarding said
criminal case.7 In his affidavit, Jesus David stated under oath that petitioners were never
regularly employed by private respondent Aurora Cruz but were, on-and-off hired to work and
render services when needed, thus adding further support to the conclusion that petitioners
were not regular and permanent employees of private respondent Aurora Cruz.8
Respondent Labor Arbiter further held that only money claims from years 1976-1977,
1977-1978 and 1978-1979 may be properly considered since all the other money claims have
prescribed for having accrued beyond the three (3) year period prescribed by law.9 On
grounds of equity, however, respondent Labor Arbiter awarded petitioners financial assistance
by private respondent Aurora Cruz, in the amount of Ten Thousand Pesos (P10,000.00) to be
equitably divided among an the petitioners except petitioner Fortunato Mercado, Jr. who had
manifested his disinterest in the further prosecution of his complaint against private
respondent.10
Both parties filed their appeal with the National Labor Relations Commissions (NLRC).
Petitioners questioned respondent Labor Arbiter's finding that they were not regular and
permanent employees of private respondent Aurora Cruz while private respondents
questioned the award of financial assistance granted by respondent Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the decision of the respondent Labor
Arbiter, with the modification of the deletion of the award for financial assistance to petitioners.
The dispositive portion of the decision of the NLRC reads:
WHEREFORE, the Decision of Labor Arbiter Luciano P. Aquino dated March 3, 1983 is hereby
modified in that the award of P10,000.00 financial assistance should be deleted. The said
Decision is affirmed in all other aspects.
SO ORDERED.11
Petitioners filed a motion for reconsideration of the Decision of the Third Division of the NLRC
dated 8 August 1984; however, the NLRC denied tills motion in a resolution dated 17 August
1987.12
In the present Petition for certiorari, petitioners seek the reversal of the above-mentioned
rulings. Petitioners contend that respondent Labor Arbiter and respondent NLRC erred when
both ruled that petitioners are not regular and permanent employees of private respondents
based on the terms and conditions of their hiring, for said findings are contrary to the
provisions of Article 280 of the Labor Code.13 They submit that petitioners' employment, even
assuming said employment were seasonal, continued for so many years such that, by express
provision of Article 280 of the Labor Code as amended, petitioners have become regular and
permanent employees.14
Moreover, they argue that Policy Instruction No. 1215 of the Department of Labor and
Employment clearly lends support to this contention, when it states:
PD 830 has defined the concept of regular and casual employment. What determines
regularity or casualness is not the employment contract, written or otherwise, but the nature of
the job. If the job is usually necessary or desirable to the main business of the employer, then
employment is regular. If not, then the employment is casual. Employment for a definite period
which exceeds one (1) year shall be considered re for the duration of the definite period.
This concept of re and casual employment is designed to put an end to casual employment in
regular jobs which has been abused by many employers to prevent so-called casuals from
enjoying the benefits of regular employees or to prevent casuals from joining unions.
This new concept should be strictly enforced to give meaning to the constitutional guarantee
of employment tenure.16
Tested under the laws invoked, petitioners submit that it would be unjust, if not unlawful, to
consider them as casual workers since they have been doing all phases of agricultural work
for so many years, activities which are undeniably necessary, desirable and indispensable in
the rice and sugar cane production business of the private respondents.17
In the Comment filed by private respondents, they submit that the decision of the Labor
Arbiter, as aimed by respondent NLRC, that petitioners were only hired as casuals, is based
on solid evidence presented by the parties and also by the Chief of the Special Task Force of
the NLRC Regional Office and, therefore, in accordance with the rule on findings of fact of
administrative agencies, the decision should be given great weight.18 Furthermore, they
contend that the arguments used by petitioners in questioning the decision of the Labor Arbiter
were based on matters which were not offered as evidence in the case heard before the
regional office of the then Ministry of Labor but rather in the case before the Social Security
Commission, also between the same parties.19
Public respondent NLRC filed a separate comment prepared by the Solicitor General. It
submits that it has long been settled that findings of fact of administrative agencies if
supported by substantial evidence are entitled to great weight.20 Moreover, it argues that
petitioners cannot be deemed to be permanent and regular employees since they fall under
the exception stated in Article 280 of the Labor Code, which reads:
The provisions of written agreements to the contrary notwithstanding and regardless of the
oral agreements of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or services to be performed
is seasonal in nature and the employment is for the duration of the season.21(emphasis
supplied)
The Court resolved to give due course to the petition and required the parties to submit their
respective memoranda after which the case was deemed submitted for decision.
The petition is not impressed with merit.
The invariable rule set by the Court in reviewing administrative decisions of the Executive
Branch of the Government is that the findings of fact made therein are respected, so long as
they are supported by substantial evidence, even if not overwhelming or preponderant;22 that it
is not for the reviewing court to weigh the conflicting evidence, determine the credibility of the
witnesses or otherwise substitute its own judgment for that of the administrative agency on the
sufficiency of the evidence;23 that the administrative decision in matters within the executive's
jurisdiction can only be set aside upon proof of gross abuse of discretion, fraud, or error of law.
24
The questioned decision of the Labor Arbiter reads:
Focusing the spotlight of judicious scrutiny on the evidence on record and the arguments of
both parties, it is our well-discerned opinion that the petitioners are not regular and permanent
workers of the respondents. The very nature of the terms and conditions of their hiring reveal
that the petitioners were required to perform p of cultural work for a definite period, after which
their services are available to any farm owner. We cannot share the arguments of the
petitioners that they worked continuously the whole year round for twelve hours a day. This,
we feel, is an exaggeration which does not deserve any serious consideration inasmuch as
the plan of rice and sugar cane does not entail a whole year operation, the area in question
being comparatively small. It is noteworthy that the findings of the Chief of the Special Task
Force of the Regional Office are similar to this.
In fact, the sworn statement of one of the petitioners Fortunato Mercado, Jr., the son of
spouses Fortunato Mercado, Sr. and Rosa Mercado, indubitably shows that said petitioners
were only hired as casuals, on-and-off basis. With this kind of relationship between the
petitioners and the respondent Aurora Cruz, we feel that there is no basis in law upon which
the claims of the petitioners should be sustained, more specially their complaint for illegal
dismissal. It is within the prerogative of respondent Aurora Cruz either to take in the petitioners
to do further work or not after any single phase of agricultural work has been completed by
them. We are of the opinion that the real cause which triggered the filing of this complaint by
the petitioners who are related to one another, either by consanguinity or affinity was due to
the filing of a criminal complaint by the respondent Aurora Cruz against Reynaldo Mercado,
son of spouses Fortunato Mercado, Sr. and Rosa Mercado. In April 1979, according to Jesus
David, Zone Chairman of the locality where the petitioners and respondent reside, petitioner
Fortunato Mercado, Sr. asked for help regarding the case of his son, Reynaldo, to talk with
respondent Aurora Cruz and the said Zone Chairman also stated under oath that the
petitioners were never regularly employed by respondent Aurora Cruz but were on-and-off
hired to work to render services when needed.25
A careful examination of the foregoing statements reveals that the findings of the Labor Arbiter
in the case are ably supported by evidence. There is, therefore, no circumstance that would
warrant a reversal of the questioned decision of the Labor Arbiter as affirmed by the National
Labor Relations Commission.
The contention of petitioners that the second paragraph of Article 280 of the Labor Code
should have been applied in their case presents an opportunity to clarify the afore-mentioned
provision of law.
Article 280 of the Labor Code reads in full:
Article 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That, any employee who has rendered at least one year of service whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such actually exists.
The first paragraph answers the question of who are employees. It states that, regardless of
any written or oral agreement to the contrary, an employee is deemed regular where he is
engaged in necessary or desirable activities in the usual business or trade of the
employer, except for project employees.
of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of
employers against their employees and not, as petitioners would have us believe, to prevent
small-scale businesses from engaging in legitimate methods to realize profit. Hence, the
proviso is applicable only to the employees who are deemed "casuals" but not to the "project"
employees nor the regular employees treated in paragraph one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal
employees, their employment legally ends upon completion of the project or the season. The
termination of their employment cannot and should not constitute an illegal dismissal.30

A project employee has been defined to be one whose employment has been fixed for a
specific project or undertaking, the completion or termination of which has been determined at
the time of the engagement of the employee, or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season26 as in the present
case.
WHEREFORE, the petition is DISMISSED. The decision of the National Labor Relations
Commission affirming that of the Labor Arbiter, under review, is AFFIRMED. No
pronouncement as to costs.
SO ORDERED.

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees
who do not fan under the definition of the preceding paragraph. The proviso, in said second
paragraph, deems as regular employees those "casual" employees who have rendered at
least one year of service regardless of the fact that such service may be continuous or broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable
to their case and that the Labor Arbiter should have considered them regular by virtue of said
proviso. The contention is without merit.

The general rule is that the office of a proviso is to qualify or modify only the phrase
immediately preceding it or restrain or limit the generality of the clause that it immediately
follows.27 Thus, it has been held that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached, and not to the statute itself
or to other sections thereof.28 The only exception to this rule is where the clear legislative
intent is to restrain or qualify not only the phrase immediately preceding it (the proviso) but
also earlier provisions of the statute or even the statute itself as a whole.29

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the
concept of regular and casual employees was designed to put an end to casual employment
in regular jobs, which has been abused by many employers to prevent called casuals from
enjoying the benefits of regular employees or to prevent casuals from joining unions. The
same instructions show that the proviso in the second paragraph of Art. 280 was not designed
to stifle small-scale businesses nor to oppress agricultural land owners to further the interests
SECOND DIVISION
[G.R. No. 118475. November 29, 2000]
ELVIRA ABASOLO, etc. vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR
ARBITER RICARDO N. OLAIREZ, LA UNION TOBACCO REDRYING CORPORATION
and SEE LIN CHAN, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for certiorari seeking to annul two Resolutions of the National
Labor Relations Commission (NLRC), Third Division, dated July 6, 1994[1] and September 23,
1994[2], in its affirmance of the Decision[3] of Labor Arbiter Ricardo N. Olairez dated December
29, 1993 dismissing petitioners consolidated complaint for separation pay for lack of merit.
The facts are as follows:
Private respondent La Union Tobacco Redrying Corporation (LUTORCO), which is
owned by private respondent See Lin Chan, is engaged in the business of buying, selling,
redrying and processing of tobacco leaves and its by-products. Tobacco season starts
sometime in October of every year when tobacco farmers germinate their seeds in plots until
they are ready for replanting in November. The harvest season starts in mid-February. Then,
the farmers sell the harvested tobacco leaves to redrying plants or do the redrying
themselves. The redrying plant of LUTORCO receives tobacco for redrying at the end of
February and starts redrying in March until August or September.
Petitioners have been under the employ of LUTORCO for several years until their
employment with LUTORCO was abruptly interrupted sometime in March 1993 when
Compania General de Tabaccos de Filipinas (also known as TABACALERA) took over
LUTORCOs tobacco operations. New signboards were posted indicating a change of
ownership and petitioners were then asked by LUTORCO to file their respective applications
for employment with TABACALERA. Petitioners were caught unaware of the sudden change
of ownership and its effect on the status of their employment, though it was alleged that
TABACALERA would assume and respect the seniority rights of the petitioners.
On March 17, 1993, the disgruntled employees instituted before the NLRC Regional
Arbitration Branch No. 1, San Fernando, La Union a complaint[4] for separation pay against
private respondent LUTORCO on the ground that there was a termination of their employment
due to the closure of LUTORCO as a result of the sale and turnover to TABACALERA. Other
equally affected employees filed two additional complaints[5], also for separation pay, which
were consolidated with the first complaint.
Private respondent corporation raised as its defense that it is exempt from paying
separation pay and denied that it terminated the services of the petitioners; and that it stopped
its operations due to the absence of capital and operating funds caused by losses incurred
from 1990 to 1992 and absence of operating funds for 1993, coupled with adverse financial
conditions and downfall of prices.[6] It alleged further that LUTORCO entered into an
agreement with TABACALERA to take over LUTORCOs tobacco operations for the year 1993
in the hope of recovering from its serious business losses in the succeeding tobacco seasons
and to create a continuing source of income for the petitioners.[7] Lastly, it manifested that
LUTORCO, in good faith and with sincerity, is willing to grant reasonable and adjusted
amounts to the petitioners, as financial assistance, if and when LUTORCO could recover from
its financial crisis.[8]
On December 29, 1993, Labor Arbiter Ricardo N. Olairez rendered his decision
dismissing the complaint for lack of merit. In upholding private respondent LUTORCOs
position, the Labor Arbiter declared that the petitioners are not entitled to the benefits under
Article 283[9] of the Labor Code since LUTORCO ceased to operate due to serious business
losses and, furthermore, TABACALERA, the new employer of the petitioner has assumed the
seniority rights of the petitioners and other employment liabilities of the LUTORCO.[10]
Petitioners appealed[11] then the decision of the Labor Arbiter to the public respondent
NLRC where it was assigned to the Third Division.
In its Opposition to Appeal[12] dated February 5, 1994 private respondent LUTORCO
presented new allegations and a different stand for denying separation pay. It alleged that
LUTORCO never ceased to operate but continues to operate even after TABACALERA took
over the operations of its redrying plaint in Aringay, La Union. Petitioners were not terminated
from employment but petitioners instead refused to work with TABACALERA, despite the
notice to petitioners to return to work in view of LUTORCOs need for workers at its Agoo plant
which had approximately 300,000 kilos of Virginia tobacco for processing and redrying.
Furthermore, petitioners are not entitled to separation pay because petitioners are seasonal
workers.
Adopting these arguments of private respondent, the NLRC, in a
Resolution[13] dated July 6, 1994, affirmed the dismissal of the consolidated complaints for
separation pay. Public respondent held that petitioners are not entitled to the protection of
Article 283 of the Labor Code providing for separation pay since there was no closure of
establishment or termination of services to speak of. It declared that there was no dismissal
but a non-hiring due mainly to [petitioners] own volition.[14] Moreover, the benefits of Article 283
of the Labor Code apply only to regular employees, not seasonal workers like petitioners.
[15] Inasmuch as public respondent in its Resolution[16] dated September 23, 1994 denied
petitioners motion for reconsideration, petitioners now assail the correctness of the NLRCs
resolution via the instant petition.
Petitioners anchor their petition on the following grounds, to wit:
I. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO EXCESS OR LACK OF JURISDICTION IN RULING THAT THERE WAS NO
DISMISSAL OR TERMINATION OF SERVICES.
II. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO EXCESS OR LACK OF JURISDICTION IN RULING THAT PETITIONERS
WERE NOT REGULAR EMPLOYEES.
III. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO EXCESS OR LACK OF JURISDICTION IN NOT AWARDING SEPARATION
PAY TO THE PETITIONERS.
Petitioners vigorously maintain that they are regular workers of respondent LUTORCO
since they worked continuously for many years with LUTORCO, some of them even for over
20 years, and that they performed functions necessary and desirable in the usual business of
LUTORCO.[17]According to them, the fact that some of them work only during the tobacco
season does not affect their status as regular workers since they have been repeatedly called
back to work for every season, year after year.[18] Thus, petitioners take exception to the
factual findings and conclusions of the NLRC, stressing that the conclusions of the NLRC
were based solely on the new theory advanced by private respondent LUTORCO only on
appeal, that is, that it was only LUTORCOs tobacco re-drying operation that was sold, and
hence, diametrically opposed to its theory before the Labor Arbiter, i.e., that it is the entire
company (LUTORCO) itself that was sold.
Private respondent LUTORCO, on the other hand, insists that petitioners employment
was not terminated; that it never ceased to operate, and that it was petitioners themselves
who severed their employer-employee relationship when they chose employment with
TABACALERA because petitioners found more stability working with TABACALERA than with
LUTORCO.[19] It likewise insists that petitioners are seasonal workers since almost all of
petitioners never continuously worked in LUTORCO for any given year[20] and they were
required to reapply every year to determine who among them shall be given work for the
season. To support its argument that petitioners are seasonal workers, private respondent
LUTORCO cites the case of Mercado, Sr. v. NLRC[21] wherein this Court held that the
employment of [seasonal workers] legally ends upon the completion of the xxx season.
Clearly, the crux of the dispute boils down to two issues, namely, (a) whether petitioners
employment with LUTORCO was terminated, and (b) whether petitioners are regular or
seasonal workers, as defined by law. Both issues are clearly factual in nature as they involved
appreciation of evidence presented before the NLRC whose finding of facts and conclusions
thereon are entitled to respect and finality in the absence of proof that they were arrived at
arbitrarily or capriciously.[22] In the instant case, however, cogent reasons exist to apply the
exception, to wit:
First, upon a thorough review, the records speak of a sale to TABACALERA in 1993
under conditions evidently so concealed that petitioners were not formally notified of the
impending sale of LUTORCOs tobacco re-drying operations to TABACALERA and its
attendant consequences with respect to their continued employment status under
TABACALERA. They came to know of the fact of that sale only when TABACALERA took over
the said tobacco re-drying operations. Thus, under those circumstances, the employment of
petitioners with respondent LUTORCO was technically terminated when TABACALERA took
over LUTORCOs tobacco re-drying operations in 1993.[23]
Moreover, private respondent LUTORCOs allegation that TABACALERA assured the
seniority rights of petitioners deserves scant consideration inasmuch as the same is not
supported by documentary evidence nor was it confirmed by TABACALERA. Besides, there is
no law requiring that the purchaser of an entire company should absorb the employees of the
selling company. The most that the purchasing company can do, for reasons of public policy
and social justice, is to give preference to the qualified separated employees of the selling
company, who in its judgment are necessary in the continued operation of the business
establishment. In the instant case, the petitioner employees were clearly required to file new
applications for employment. In reality then, they were hired as new employees of
TABACALERA.
Second, private respondent LUTORCOs contention that petitioners themselves severed
the employer-employee relationship by choosing to work with TABACALERA is bereft of merit
considering that its offer to return to work was made more as an afterthought when private
respondent LUTORCO later realized it still had tobacco leaves for processing and
redrying. The fact that petitioners ultimately chose to work with TABACALERA is not adverse
to petitioners cause. To equate the more stable work with TABACALERA and the temporary
work with LUTORCO is illogical. Petitioners untimely separation in LUTORCO was not of their
own making and therefore, not construable as resignation therefrom inasmuch as resignation
must be voluntary and made with the intention of relinquishing the office, accompanied with an
act of relinquishment.[24]
Third, the test of whether or not an employee is a regular employee has been laid down
in De Leon v. NLRC,[25] in which this Court held:
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual 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 a year, even if the performance is not continuous and merely intermittent, the
law deems repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity, and while such activity exists.
Thus, the nature of ones employment does not depend solely on the will or word of the
employer. Nor on the procedure for hiring and the manner of designating the employee, but on
the nature of the activities to be performed by the employee, considering the employers nature
of business and the duration and scope of work to be done.[26]
In the case at bar, while it may appear that the work of petitioners is seasonal,
inasmuch as petitioners have served the company for many years, some for over 20 years,
performing services necessary and indispensable to LUTORCOs business, serve as badges
of regular employment.[27]Moreover, the fact that petitioners do not work continuously for one
whole year but only for the duration of the tobacco season does not detract from considering
them in regular employment since in a litany of cases[28] this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily laid off during
off-season are not separated from service in said period, but are merely considered on leave
until re-employed.
Private respondents reliance on the case of Mercardo v. NLRC is misplaced
considering that since in said case of Mercado, although the respondent company therein
consistently availed of the services of the petitioners therein from year to year, it was clear that
petitioners therein were not in respondent companys regular employ. Petitioners therein
performed different phases of agricultural work in a given year. However, during that period,
they were free to contract their services to work for other farm owners, as in fact they
did. Thus, the Court ruled in that case that their employment would naturally end upon the
completion of each project or phase of farm work for which they have been contracted.
All the foregoing considered, the public respondent NLRC in the case at bar erred in its
total affirmance of the dismissal of the consolidated complaint, for separation pay, against
private respondents LUTORCO and See Lin Chan considering that petitioners are regular
seasonal employees entitled to the benefits of Article 283 of the Labor Code which applies to
closures or cessation of an establishment or undertaking, whether it be a complete or partial
cessation or closure of business operation.[29]
In the case of Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC[30] this
Court, when faced with the question of whether the separation pay of a seasonal worker, who
works for only a fraction of a year, should be equated with the separation pay of a regular
worker, resolvedthat question in this wise:
The amount of separation pay is based on two factors: the amount of monthly salary and the
number of years of service. Although the Labor Code provides different definitions as to what
constitutes one year of service, Book Six[31] does not specifically define one year of service for
purposes of computing separation pay. However, Articles 283 and 284 both state in
connection with separation pay that a fraction of at least six months shall be considered one
whole year. Applying this case at bar, we hold that the amount of separation pay which
respondent members xxx should receive is one-half (1/2) their respective average monthly
pay during the last season they worked multiplied by the number of years they actually
rendered service, provided that they worked for at least six months during a given year.
Thus, in the said case, the employees were awarded separation pay equivalent to one (1)
month, or to one-half (1/2) month pay for every year they rendered service, whichever is
higher, provided they rendered service for at least six (6) months in a given year. As explained
in the text of the decision in the said case, month pay shall be understood as average monthly
pay during the last season they worked.[32] An award of ten percent (10%) of the total amount
due petitioners as attorneys fees is legally and morally justifiable under Art. 111 of the Labor
Code,[33] Sec. 8, Rule VIII, Book III of its Implementing Rules,[34] and par. 7, Art. 2208[35] of the
Civil Code.[36]
WHEREFORE, the petition is hereby GRANTED, and the assailed Resolutions dated
July 6, 1994 and September 23, 1994 of public respondent NLRC are REVERSED and SET
ASIDE. Private respondent La Union Tobacco Redrying Corporation is ORDERED: (a) to pay
petitioners separation pay equivalent to one (1) month, or one-half (1/2) month pay for each
year that they rendered service, whichever is higher, provided that they rendered service for at
least six (6) months in a given year, and; (b) to pay ten percent (10%) of the total amount due
to petitioners, as and for attorneys fees. Consequently, public respondent NLRC is ORDERED
to COMPUTE the total amount of separation pay which each petitioner who has rendered
service to private respondent LUTORCO for at least six (6) months in a given year is entitled
to receive in accordance with this decision, and to submit its compliance thereon within forty-
five (45) days from notice of this decision.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.
G.R. No. 151827. April 29, 2005
JOSEFINA BENARES, Petitioners, vs. Jaime pancho, Rodolfo pancho, jr., joselito
medalla, paquito magallanes, Alicia magallanes, evelyn magallanes, violeta villacampa,
maritess pancho, rogelio pancho and arnolfo pancho, Respondents.
On September 24, 1991, a routine inspection was conducted by personnel of the Bacolod
District Office of the Department of Labor and Employment. Accordingly, a report and
recommendation was made, hence, the endorsement by the Regional Director of the instant
case to the Regional Arbitration Branch, NLRC, Bacolod City for proper hearing and
disposition.

DECISION Tinga, J.:
Assailed in this Petition for Review on Certiorari1 is the Decision2 of the Court of Appeals which
affirmed the National Labor Relations Commission’s (NLRC) decision3 holding that
respondents were illegally dismissed and ordering petitioner to pay respondents separation
pay, backwages, 13th month pay, Cost of Living Allowance (COLA), emergency relief
allowance (ERA), salary differentials and attorney’s fees. The NLRC reversed the Labor
Arbiter’s finding that respondents failed to lay down the facts and circumstances surrounding
their dismissal and to prove their entitlement to monetary awards.4
On October 15, 1991, complainants alleged to have been terminated without being paid
termination benefits by respondent in retaliation to what they have done in reporting to the
Department of Labor and Employment their working conditions viz-a-viz (sic) wages and other
mandatory benefits.
On July 14, 1992, notification and summons were served to the parties wherein complainants
were directed to file a formal complaint.
On July 28, 1992, a formal complaint was filed for illegal dismissal with money claims.

The antecedents, as narrated by the NLRC, follow. From the records, summons and notices of hearing were served to the parties and apparently
no amicable settlement was arrived, hence, the parties were directed to file their respective
Complainants alleged to have started working as sugar farm workers on various dates, to wit: position papers.

1. Jaime Pancho November 15, 1964 On January 22, 1993, complainant submitted their position paper, while respondent filed its
2. Rodolfo Pancho, Jr. February 1, 1975 position paper on June 21, 1993.
3. Joselito Medalla November 15, 1964
4. Paquito Magallanes March 10, 1973
5. Felomino Magallanes November 15, 1964 On March 17, 1994, complainants filed their reply position paper and affidavit.
6. Alicia Magallanes January 15, 1964 Correspondingly, a rejoinder was filed by respondent on May 16, 1994.
7. Evelyn Magallanes January 1, 1974
8. Violeta Villacampa December 1, 1979 On August 17, 1994, from the Minutes of the scheduled hearing, respondent failed to appear,
9. Maritess Pancho December 15, 1985 and that the Office will evaluate the records of the case whether to conduct a formal trial on
10. Rogelio Pancho December 1, 1979
11. Arnolfo Pancho February 1, 1975 the merits or not, and that the corresponding order will be issued.

Respondent Hda. Maasin II is a sugar cane plantation located in Murcia, Negros Occidental
with an area of 12-24 has. planted, owned and managed by Josefina Benares, individual co-
respondent.
On July 24, 1991, complainants thru counsel wrote the Regional Director of the Department of
Labor and Employment, Bacolod City for intercession particularly in the matter of wages and
other benefits mandated by law.
On January 16, 1996, the Labor Arbiter issued an order to the effect that the case is now
deemed submitted for resolution.
On April 30, 1998, the Labor Arbiter a quo issued the assailed decision dismissing the
complaint for lack of merit.
On June 26, 1998, complainants not satisfied with the aforecited ruling interposed the instant
appeal anchored on the ground that:
THE HONORABLE LABOR ARBITER GRAVELY ABUSED ITS DISCRETION AND
SERIOUSLY ERRED IN HOLDING THAT THE COMPLAINANTS FAILED TO DISCUSS THE
FACTS AND CIRCUMSTANCES SURROUNDING THEIR DISMISSAL, HENCE, THERE IS
NO DISMISSAL TO SPEAK OF AND THAT COMPLAINANTS FAILED TO ALLEGE AND
PROVE THAT THEIR CLAIMS ARE VALID, HENCE THE DISMISSAL OF THEIR
COMPLAINT WOULD CAUSE GRAVE AND IRREPARABLE DAMAGE TO HEREIN
COMPLAINANTS.5
The NLRC held that respondents attained the status of regular seasonal workers of Hda.
Maasin II having worked therein from 1964-1985. It found that petitioner failed to discharge the
burden of proving that the termination of respondents was for a just or authorized cause.
Hence, respondents were illegally dismissed and should be awarded their money claims.
Petitioner’s motion for reconsideration 6 dated May 12, 1999 was denied in the
resolution7 dated October 29, 1999.
The Court of Appeals affirmed the NLRC’s ruling, with the modification that the backwages
and other monetary benefits shall be computed from the time compensation was withheld in
accordance with Article 279 of the Labor Code, as amended by Republic Act No. 6715.
In its Resolution8 dated November 28, 2001, the appellate court denied petitioner’s motion for
reconsideration for lack of merit.
Petitioner is now before this Court averring that the Court of Appeals erred in affirming the
decision of the NLRC. While petitioner concedes that the factual findings of the NLRC are
generally binding on the appellate court, petitioner insists that the findings of the NLRC are
vague and contradictory, thereby necessitating review.
According to petitioner, the fact that she was able to present sufficient proof to rebut the claim
of illegal dismissal should be considered in light of the NLRC’s admission that there are gray
areas in the case which require clarification. Petitioner avers that the NLRC should have at
least remanded the case to the labor arbiter to thresh out these gray areas. She further claims
that the NLRC was overly zealous in awarding COLA and ERA despite the fact that
respondents did not even pray for these awards in their complaint. She also questions the
NLRC’s general statement to the effect that the payroll she submitted is not convincing
asserting that she submitted 235 sets of payroll, not just one, and that the NLRC did not even
bother to explain why it found the payroll unconvincing.
Respondents filed a Comment9 dated May 10, 2002 alleging that petitioner failed to submit
certified true copies of the assailed decisions and resolutions, and that the petition lacks proof
of service and raises questions of fact.
In her Reply to Comment10 dated September 17, 2002, petitioner points out that the Rules of
Court do not require that all copies of the petition contain certified true copies of the
questioned decisions and resolutions. Further, all copies of the petition filed with the Court
contain an affidavit of service. Respondents’ copy does not have an affidavit of service
because the sworn declaration can not be executed before service of the petition is actually
made. Petitioner also maintains that the rule on review of findings of fact by the Supreme
Court admits of certain exceptions such as when the conclusions arrived at are grounded
entirely on speculation, surmises and conjectures as in this case.
The petition was given due course and the parties were required to submit their respective
memoranda in the Resolution11 dated March 3, 2003. Petitioner filed a Manifestation and
Compliance12 dated April 22, 2003 adopting the allegations in her Petition for Review on
Certiorari and Reply to Comment as her memorandum. For their part, respondents filed
a Memoranda For Private Respondents13 dated May 7, 2003 alleging that the Court of Appeals
correctly relied upon the factual findings of the NLRC after having found the same to be
supported by substantial evidence. They insist that they are regular seasonal employees of
the sugar plantation. As such, petitioner has the burden of proving that their dismissal was for
a just or authorized cause.
As regards the contention that the NLRC erroneously awarded COLA and ERA, respondents
cite Osias Academy v. DOLE,14 which provides that the NLRC can extend monetary awards
even if these are not prayed for if the monetary benefits are statutory grants intended to
alleviate the laborer’s plight like the COLA and ERA.
The main question raised by the present petition is whether respondents are regular
employees of Hacienda Maasin and thus entitled to their monetary claims. Related to this is
the issue of whether respondents were illegally terminated.
This case presents a good opportunity to reiterate the Court’s rulings on the subject of
seasonal employment. The Labor Code defines regular and casual employment, viz:
Art. 280. REGULAR AND CASUAL EMPLOYMENT.—The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the engagement of
the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That, any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity exists.
The law provides for three kinds of employees: (1) regular employees or those who have been
engaged to perform activities which are usually necessary or desirable in the usual business
or trade of the employer; (2) project employees or those whose employment has been fixed
for a specific project or undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season; and (3)
casual employees or those who are neither regular nor project employees.15
In Mercado v. NLRC,16 the Court ruled that seasonal workers do not become regular
employees by the mere fact that they have rendered at least one year of service, whether
continuous or broken, because the proviso in the second paragraph of Article 280 demarcates
as "casual" employees, all other employees who do not fall under the definition of the
preceding paragraph. It deems as regular employees those "casual" employees who have
rendered at least one year of service regardless of the fact that such service may be
continuous or broken.
The factual circumstances obtaining in the Mercado case, however, are peculiar. In that case,
the workers were engaged to do a particular phase of agricultural work necessary for rice and/
or sugarcane production, after which they would be free to render services to other farm
workers who need their services.
In contrast, in the case of Hacienda Fatima v. National Federation of Sugarcane Workers-
Food and General Trade,17respondents performed the same tasks for petitioners every
season for several years. Thus, they were considered the latter’s regular employees for their
respective tasks. The fact that they do not work continuously for one whole year but only for
the duration of the season does not detract from considering them in regular employment
since in a litany of cases this Court has already settled that seasonal workers who are called
to work from time to time and are temporarily laid off during off-season are not separated from
service in that period, but merely considered on leave until re-employed.18
Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule that the primary
standard for determining regular employment is the reasonable connection between the
particular activity performed by the employee vis-à-vis the usual trade or business of the
employer. This 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. If the employee
has been performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to such activity and while
such activity exists.19
In this case, petitioner argues that respondents were not her regular employees as they were
merely "pakiao" workers who did not work continuously in the sugar plantation. They
performed such tasks as weeding, cutting and loading canes, planting cane points, fertilizing,
cleaning the drainage, etc. These functions allegedly do not require respondents’ daily
presence in the sugarcane field as it is not everyday that one weeds, cuts canes or applies
fertilizer. In support of her allegations, petitioner submitted "cultivo" and milling payrolls.
The probative value of petitioner’s evidence, however, has been passed upon by the labor
arbiter, the NLRC and the Court of Appeals. Although the labor arbiter dismissed respondents’
complaint because their "position paper is completely devoid of any discussion about their
alleged dismissal, much less of the probative facts thereof,"20 the ground for the dismissal of
the complaint implies a finding that respondents are regular employees.
The NLRC was more unequivocal when it pronounced that respondents have acquired the
status of regular seasonal employees having worked for more than one year, whether
continuous or broken in petitioner’s hacienda.
According to petitioner, however, the NLRC’s conclusion is highly suspect considering its own
admission that there are "gray areas which requires (sic) clarification." She alleges that
despite these gray areas, the NLRC "chose not to remand the case to the Labor Arbiter….as
this would unduly prolong the agony of the complainants in particular." 21
Petitioner perhaps wittingly omitted mention that the NLRC "opted to appreciate the merits of
the instant case based on available documents/pleadings."22 That the NLRC chose not to
remand the case to the labor arbiter for clarificatory proceedings and instead decided the case
on the basis of the evidence then available to it is a judgment call this Court shall not interfere
with in the absence of any showing that the NLRC abused its discretion in so doing.
The Court of Appeals, in fact, found no such grave abuse of discretion on the part of the
NLRC. Accordingly, it dismissed the petition for certiorari and affirmed with modification the
findings of the NLRC. It is well to note at this point that in quasi-judicial proceedings, the
quantum of evidence required to support the findings of the NLRC is only substantial evidence
or that amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.23
The issue, therefore, of whether respondents were regular employees of petitioner has been
adequately dealt with. The labor arbiter, the NLRC and the Court of Appeals have similarly
held that respondents were regular employees of petitioner. Since it is a settled rule that the
factual findings of quasi-judicial agencies which have acquired expertise in the matters
entrusted to their jurisdiction are accorded by this Court not only respect but even finality,24we
shall no longer disturb this finding.
Petitioner next underscores the NLRC decision’s mention of the "payroll" she presented
despite the fact that she allegedly presented 235 sets of payroll, not just one payroll. This
circumstance does not in itself evince any grave abuse of discretion on the part of the NLRC
as it could well have been just an innocuous typographical error.
Verily, the NLRC’s decision, affirmed as it was by the Court of Appeals, appears to have been
arrived at after due consideration of the evidence presented by both parties.
We also find no reason to disturb the finding that respondents were illegally terminated. When
there is no showing of clear, valid and legal cause for the termination of employment, the law
considers the matter a case of illegal dismissal and the burden is on the employer to prove
that the termination was for a just or authorized cause.25 In this case, as found both by the
NLRC and the Court of Appeals, petitioner failed to prove any such cause for the dismissal of
respondents.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals respectively dated June 29, 2001 and November 28, 2001 are hereby
AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
THIRD DIVISION
[G.R. No. 149440. January 28, 2003]
HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and
CRISTINE SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE
WORKERS-FOOD AND GENERAL TRADE, respondents.
DECISION
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was
seasonal in nature, they failed to prove that the latter worked only for the duration of one
particular season. In fact, petitioners do not deny that these workers have served them for
several years already. Hence, they are regular -- not seasonal -- employees.
The Case
\Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking
to set aside the February 20, 2001 Decision of the Court of Appeals[1] (CA) in CA-GR SP No.
51033. The dispositive part of the Decision reads:
WHEREFORE, premises considered, the instant special civil action for certiorari is hereby DENIED. [2]
On the other hand, the National Labor Relations Commission (NLRC) Decision,
[3] upheld by the CA, disposed in this wise:
WHEREFORE, premises considered, the decision of the Labor Arbiter is
hereby SET ASIDE and VACATED and a new one entered declaring complainants to have been
illegally dismissed. Respondents are hereby ORDERED to reinstate complainants except Luisa
Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their previous position and to pay full
backwages from September 1991 until reinstated. Respondents being guilty of unfair labor practice are
further ordered to pay complainant union the sum of P10,000.00 as moral damages and P5,000.00 as
exemplary damages.[4]
The Facts
The facts are summarized in the NLRC Decision as follows:
Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work
and/or were choosy in the kind of jobs they wanted to perform, the records is replete with complainants
persistence and dogged determination in going back to work.
Indeed, it would appear that respondents did not look with favor workers having organized themselves
into a union. Thus, when complainant union was certified as the collective bargaining representative in
the certification elections, respondents under the pretext that the result was on appeal, refused to sit
down with the union for the purpose of entering into a collective bargaining agreement. Moreover, the
workers including complainants herein were not given work for more than one month. In protest,
complainants staged a strike which was however settled upon the signing of a Memorandum of
Agreement which stipulated among others that:
a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will
endeavor to conclude the same within thirty (30) days.
b) The management will give priority to the women workers who are members of the union in case
work relative x x x or amount[ing] to gahit and [dipol] arises.
c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.
d) The management will provide fifteen (15) wagons for the workers and that existing workforce prior
to the actual strike will be given priority. However, in case the said workforce would not be enough, the
management can hire additional workers to supplement them.
e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to
work in the hacienda; and
f) The union will immediately lift the picket upon signing of this agreement.
However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its
commitment to sit down and bargain collectively. Instead, respondent employed all means including the
use of private armed guards to prevent the organizers from entering the premises.
Moreover, starting September 1991, respondents did not any more give work assignments to the
complainants forcing the union to stage a strike on January 2, 1992.But due to the conciliation efforts
by the DOLE, another Memorandum of Agreement was signed by the complainants and respondents
which provides:
Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of
the union officials and members;
Whereas parties to the present dispute agree to settle the case amicably once and for all;
Now therefore, in the interest of both labor and management, parties herein agree as follows:
1. That the list of the names of affected union members hereto attached and made part of this agreement
shall be referred to the Hacienda payroll of 1990 and determine whether or not this concerned Union
members are hacienda workers;
2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the subjects of a
Memorandum of Agreement entered into by and between the parties last January 4, 1990;
3. That herein parties can use other employment references in support of their respective claims whether
or not any or all of the listed 36 union members are employees or hacienda workers or not as the case
may be;
4. That in case conflict or disagreement arises in the determination of the status of the particular
hacienda workers subject of this agreement herein parties further agree to submit the same to voluntary
arbitration;
5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be composed
of three representatives each and is given five working days starting Jan. 23, 1992 to resolve the status
of the subject 36 hacienda workers. (Union representatives: Bernardo Torres, Martin Alas-as, Ariston
Arulea Jr.)
Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as
follows:
The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who
received their 13th month pay. The following are deemed not considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
The name Orencio Rombo shall be verified in the 1990 payroll.
The following employees shall be reinstated immediately upon availability of work:
1. Jose Dagle 7. Alejandro Tejares
2. Rico Dagle 8. Gaudioso Rombo
3. Ricardo Dagle 9. Martin Alas-as Jr.
4. Jesus Silva 10. Cresensio Abrega
5. Fernando Silva 11. Ariston Eruela Sr.
6. Ernesto Tejares 12. Ariston Eruela Jr.
When respondents again reneged on its commitment, complainants filed the present complaint.
But for all their persistence, the risk they had to undergo in conducting a strike in the face of
overwhelming odds, complainants in an ironic twist of fate now find themselves being accused of
refusing to work and being choosy in the kind of work they have to perform.[5] (Citations omitted)
 Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was seasonal in nature, they were
considered to be merely on leave during the off-season and were therefore still employed by
petitioners. Moreover, the workers enjoyed security of tenure. Any infringement upon this right
was deemed by the CA to be tantamount to illegal dismissal.
The appellate court found neither rhyme nor reason in petitioners argument that it was
the workers themselves who refused to or were choosy in their work. As found by the NLRC,
the record of this case is replete with complainants persistence and dogged determination in
going back to work.[6]
The CA likewise concurred with the NLRCs finding that petitioners were guilty of unfair
labor practice.
Hence this Petition.[7]
Issues
Petitioners raise the following issues for the Courts consideration:
A. Whether or not the Court of Appeals erred in holding that respondents, admittedly
seasonal workers, were regular employees, contrary to the clear provisions of Article
280 of the Labor Code, which categorically state that seasonal employees are not
covered by the definition of regular employees under paragraph 1, nor covered under
paragraph 2 which refers exclusively to casual employees who have served for at least
one year.
B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, xxx,
and relying instead on rulings which are not directly applicable to the case at bench,
viz, Philippine Tobacco, Bacolod-Murcia, and Gaco, xxx.
C. Whether or not the Court of Appeals committed grave abuse of discretion in
upholding the NLRCs conclusion that private respondents were illegally dismissed, that
petitioner[s were] guilty of unfair labor practice, and that the union be awarded moral
and exemplary damages.[8]
Consistent with the discussion in petitioners Memorandum, we shall take up Items A
and B as the first issue and Item C as the second.
The Courts Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this
Court in petitions for review on certiorari of CA decisions.[9]Questions of fact are not
entertained.[10] The Court is not a trier of facts and, in labor cases, this doctrine applies with
greater force.[11] Factual questions are for labor tribunals to resolve.[12] In the present case,
these have already been threshed out by the NLRC. Its findings were affirmed by the
appellate court.
Contrary to petitioners contention, the CA did not err when it held that respondents were
regular employees.
Article 280 of the Labor Code, as amended, states:
Art. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That, any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such activity exist. (Italics supplied)
For respondents to be excluded from those classified as regular employees, it is not
enough that they perform work or services that are seasonal in nature. They must have also
been employed only for the duration of one season. The evidence proves the existence of the
first, but not of the second, condition. The fact that respondents -- with the exception of Luisa
Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva -- repeatedly worked as sugarcane
workers for petitioners for several years is not denied by the latter. Evidently, petitioners
employed respondents for more than one season.Therefore, the general rule of regular
employment is applicable.
In Abasolo v. National Labor Relations Commission,[13] the Court issued this
clarification:
[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC,
in which this Court held:
The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of
the employer. The test is whether the former is usually necessary or desirable in the usual trade or
business of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity and while such activity exists.
xxxxxxxxx
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as
follows:
Indeed, from respondents refusal to bargain, to their acts of economic inducements resulting in the
promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to
come in, and the dismissal of union officials and members, one cannot but conclude that respondents
did not want a union in their haciendaa clear interference in the right of the workers to self-organization.
[17]

x x x [T]he fact that [respondents] do not work continuously for one whole year but only for the
We uphold the CAs affirmation of the above findings. Indeed, factual findings of labor
duration of the x x x season does not detract from considering them in regular employment since in a
officials, who are deemed to have acquired expertise in matters within their respective
litany of cases this Court has already settled that seasonal workers who are called to work from time to jurisdictions, are generally accorded not only respect but even finality. Their findings are
time and are temporarily laid off during off-season are not separated from service in said period, but binding on the Supreme Court.[18]Verily, their conclusions are accorded great weight upon
merely considered on leave until re-employed.[14] appeal, especially when supported by substantial evidence.[19] Consequently, the Court is not
duty-bound to delve into the accuracy of their factual findings, in the absence of a clear
The CA did not err when it ruled that Mercado v. NLRC[15] was not applicable to the showing that these were arbitrary and bereft of any rational basis.[20]
case at bar. In the earlier case, the workers were required to perform phases of agricultural
work for a definite period of time, after which their services would be available to any other The finding of unfair labor practice done in bad faith carries with it the sanction of moral
farm owner. They were not hired regularly and repeatedly for the same phase/s of agricultural and exemplary damages.[21]
work, but on and off for any single phase thereof. On the other hand, herein respondents,
having performed the same tasks for petitioners every season for several years, are WHEREFORE, the Petition is hereby DENIED and the assailed
considered the latters regular employees for their respective tasks. Petitioners eventual Decision AFFIRMED. Costs against petitioners.
refusal to use their services -- even if they were ready, able and willing to perform their usual
SO ORDERED.
duties whenever these were available -- and hiring of other workers to perform the tasks
originally assigned to respondents amounted to illegal dismissal of the latter. Puno, J., (Chairman), Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.
The Court finds no reason to disturb the CAs dismissal of what petitioners claim was
their valid exercise of a management prerogative. The sudden changes in work assignments
reeked of bad faith. These changes were implemented immediately after respondents had
organized themselves into a union and started demanding collective bargaining. Those who
were union members were effectively deprived of their jobs. Petitioners move actually
amounted to unjustified dismissal of respondents, in violation of the Labor Code.

Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden is on the
employer to prove that the termination was for a valid and authorized cause.[16] In the case at
bar, petitioners failed to prove any such cause for the dismissal of respondents who, as
discussed above, are regular employees.
G.R. No. 152777 December 9, 2005
LOLITA R. LACUESTA, Petitioner, vs.ATENEO DE MANILA UNIVERSITY, DR. LEOVINO
MA. GARCIA and DR. MARIJO RUIZ, Respondents.
DECISION QUISUMBING, J.:
This petition for review on certiorari assails the Decision1 dated October 12, 2001 of the Court of
Appeals in CA-G.R. SP No. 61173 and its Resolution2 dated February 21, 2002, denying the motion for
reconsideration. The appellate court affirmed the Decision3 dated February 24, 2000 of the National
Labor Relations Commission (NLRC), which had reversed the Decision dated March 20, 1998 of the
Labor Arbiter.
The facts are undisputed.
Respondent Ateneo de Manila University (Ateneo) hired, on a contractual basis, petitioner Lolita R.
Lacuesta as a part-time lecturer in its English Department for the second semester of school year
1988-1989. She was re-hired, still on a contractual basis, for the first and second semesters of school
year 1989-1990.
On July 13, 1990, the petitioner was first appointed as full-time instructor on probation, in the same
department effective June 1, 1990 until March 31, 1991. Thereafter, her contract as faculty on probation
was renewed effective April 1, 1991 until March 31, 1992. She was again hired for a third year effective
April 1, 1992 until March 31, 1993. During these three years she was on probation status.
In a letter dated January 27, 1993, respondent Dr. Leovino Ma. Garcia, Dean of Ateneo’s Graduate
School and College of Arts and Sciences, notified petitioner that her contract would no longer be
renewed because she did not integrate well with the English Department. Petitioner then appealed to the
President of the Ateneo at the time, Fr. Joaquin Bernas, S.J.
In a letter dated February 11, 1993, Fr. Bernas explained to petitioner that she was not being terminated,
but her contract would simply expire. He also stated that the university president makes a permanent
appointment only upon recommendation of the Dean and confirmation of the Committee on Faculty
Rank and Permanent Appointment. He added that any appointment he might extend would be
tantamount to a midnight appointment.
In another letter dated March 11, 1993, Fr. Bernas offered petitioner the job as book editor in the
University Press under terms comparable to that of a faculty member.
On March 26, 1993, petitioner applied for clearance to collect her final salary as instructor. Petitioner
also signed a Quitclaim, Discharge and Release on April 16, 1993.4
Petitioner worked as editor in the University Press from April 1, 1993 to March 31, 1994 including an
extension of two months after her contract expired. Upon expiry of her contract, petitioner applied for
clearance to collect her final salary as editor. Later, she agreed to extend her contract from June 16,
1994 to October 31, 1994. Petitioner decided not to have her contract renewed due to a severe back
problem. She did not report back to work, but she submitted her clearance on February 20, 1995.
On December 23, 1996, petitioner filed a complaint for illegal dismissal with prayer for reinstatement,
back wages, and moral and exemplary damages. Dr. Leovino Ma. Garcia and Dr. Marijo Ruiz were sued
in their official capacities as the previous and present deans of the College of Arts and Sciences,
respectively.
Labor Arbiter Manuel P. Asuncion held that petitioner may not be terminated by mere lapse of the
probationary period but only for just cause or failure to meet the employer’s standards. Moreover, said
the Labor Arbiter, the quitclaim, discharge and release executed by petitioner was not a bar to filing a
complaint for illegal dismissal.5Thus, he ordered reinstatement with payment of full back wages.
The NLRC upon appeal of respondents reversed the Labor Arbiter’s decision and ruled that petitioner
was not illegally dismissed, and that her quitclaim was valid. Petitioner sought reconsideration but it
was denied. She then filed a petition for certiorari before the Court of Appeals assailing the NLRC
decision. The appellate court dismissed the petition saying there was no grave abuse of discretion and
affirmed the NLRC decision. It ruled:
WHEREFORE, the petition is hereby denied and accordingly DISMISSED.6
Hence, this instant petition where petitioner assigns the following as errors:
1. The Court of Appeals erred in ruling that it is the Manual of Regulations For Private Schools, not the
Labor Code, that determines the acquisition of regular or permanent status of faculty members in an
educational institution;
2. The Court of Appeals erred in upholding the Quitclaim that was signed by the Petitioner and in taking
that against her claims for illegal dismissal and for moral and exemplary damages against the
respondents.7
Simply put, the issue in this case is whether the petitioner was illegally dismissed.
Petitioner contends that Articles 280 and 281 of the Labor Code,8 not the Manual of Regulations for
Private Schools, is the applicable law to determine whether or not an employee in an educational
institution has acquired regular or permanent status. She argues that (1) under Article 281, probationary
employment shall not exceed six (6) months from date of employment unless a longer period had been
stipulated by an apprenticeship agreement; (2) under Article 280, if the apprenticeship agreement
stipulates a period longer than one year and the employee rendered at least one year of service, whether
continuous or broken, the employee shall be considered as regular employee with respect to the activity
in which he is employed while such activity exists; and (3) it is with more reason that petitioner be
made regular since she had rendered services as part-time and full-time English teacher for four and a
half years, services which are necessary and desirable to the usual business of Ateneo.9
Furthermore, the petitioner contends that her clearance was granted and completed only after she signed
the quitclaim on April 16, 1993. She contends also that the respondents failed to show that her quitclaim
was voluntary.
Respondents, for their part, contend that the Manual of Regulations for Private Schools is controlling.
In the Manual, full-time teachers who have rendered three consecutive years of satisfactory service shall
be considered permanent. Respondents also claim that the petitioner was not terminated but her
employment contract expired at the end of the probationary period. Further, institutions of higher
learning, such as respondent Ateneo, enjoy the freedom to choose who may teach according to its
standards. Respondents also argue that the quitclaim, discharge and release by petitioner is binding and
should bar her complaint for illegal dismissal.
After considering the contentions of the parties in the light of the circumstances in this case, we find for
respondents.
The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a
faculty member in an educational institution has attained regular or permanent status.10 In University of
Santo Tomas v. National Labor Relations Commission the Court en banc said that under Policy
Instructions No. 11 issued by the Department of Labor and Employment, "the probationary employment
of professors, instructors and teachers shall be subject to the standards established by the Department of
Education and Culture." Said standards are embodied in paragraph 7511 (now Section 93) of the Manual
of Regulations for Private Schools.12
Section 9313 of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who
have satisfactorily completed their probationary period shall be considered regular or permanent.
14 Moreover, for those teaching in the tertiary level, the probationary period shall not be more than six
consecutive regular semesters of satisfactory service.15 The requisites to acquire permanent
employment, or security of tenure, are (1) the teacher is a full-time teacher; (2) the teacher must have
rendered three consecutive years of service; and (3) such service must have been satisfactory.16
As previously held, a part-time teacher cannot acquire permanent status.17 Only when one has served as
a full-time teacher can he acquire permanent or regular status. The petitioner was a part-time lecturer
before she was appointed as a full-time instructor on probation. As a part-time lecturer, her employment
as such had ended when her contract expired. Thus, the three semesters she served as part-time lecturer
could not be credited to her in computing the number of years she has served to qualify her for
permanent status.
Petitioner posits that after completing the three-year probation with an above-average performance, she
already acquired permanent status. On this point, we are unable to agree with petitioner.
Completing the probation period does not automatically qualify her to become a permanent employee of
the university. Petitioner could only qualify to become a permanent employee upon fulfilling the
reasonable standards for permanent employment as faculty member.18 Consistent with academic
freedom and constitutional autonomy, an institution of higher learning has the prerogative to provide
standards for its teachers and determine whether these standards have been met.19 At the end of the
probation period, the decision to re-hire an employee on probation, belongs to the university as the
employer alone.
We reiterate, however, that probationary employees enjoy security of tenure, but only within the period
of probation. Likewise, an employee on probation can only be dismissed for just cause or when he fails
to qualify as a regular employee in accordance with the reasonable standards made known by the
employer at the time of his hiring. Upon expiration of their contract of employment, academic
personnel on probation cannot automatically claim security of tenure and compel their employers to
renew their employment contracts.20 In the instant case, petitioner, did not attain permanent status and
was not illegally dismissed. As found by the NLRC, her contract merely expired.
Lastly, we find that petitioner had already signed a valid quitclaim, discharge and release which bars the
present action. This Court has held that not all quitclaims are per se invalid or against public policy,
except (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or (2) where the terms of settlement are unconscionable on their face.21 In this case, there is no
showing that petitioner was coerced into signing the quitclaim. In her sworn quitclaim, she freely
declared that she received to her full satisfaction all that is due her by reason of her employment and
that she was voluntarily releasing respondent Ateneo from all claims in relation to her employment.
22 Nothing on the face of her quitclaim has been shown as unconscionable.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated October 12, 2001 of the
Court of Appeals in CA-G.R. SP No. 61173 and its Resolution dated February 21, 2002
are AFFIRMED.
SO ORDERED.
G.R. No. 159828 April 19, 2006
KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO)-CFW
LOCAL 245, Petitioner, 
 Pursuant to the provisions of the MOA, both parties identified 64 vacant regular positions that
vs.
 may be occupied by the existing casual, contractual or agency employees who have been in
THE HON. COURT OF APPEALS and COCA-COLA BOTTLERS’ PHILS.,
INC., Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure
assailing the Decision1 of the Court of Appeals which affirmed the Decision2 of public
respondent National Labor Relations Commission (NLRC) dismissing petitioner’s complaint
against private respondent for violations of the Memorandum of Agreement (MOA)/Collective
Bargaining Agreement (CBA), nonpayment of overtime pay and 13th month pay, illegal
dismissal, unfair labor practice, recovery of moral and exemplary damages and attorney’s
fees.
On 30 June 1998, the CBA for the years 1995-1998 executed between petitioner union and
private respondent company expired. As the duly certified collective bargaining agent for the
rank-and-file employees of private respondent’s Manila and Antipolo plants, petitioner
submitted its demands to the company for another round of collective bargaining negotiations.
However, said negotiations came to a gridlock as the parties failed to reach a mutually
acceptable agreement with respect to certain economic and non-economic issues.
Thereafter, petitioner filed a notice of strike on 11 November 1998 with the National
Conciliation and Mediation Board (NCMB), National Capital Region, on the ground of CBA
negotiation deadlock. With the aim of resolving the impasse, several conciliation conferences
were conducted but to no avail as the parties failed to reach a settlement. On 19 December
1998, petitioner held the strike in private respondent’s Manila and Antipolo plants.
Subsequently, through the efforts of NCMB Administrator Buenaventura Magsalin, both parties
came to an agreement settling the labor dispute. Thus, on 26 December 1998, both parties
executed and signed a MOA providing for salary increases and other economic and non-
economic benefits. It likewise contained a provision for the regularization of contractual,
casual and/or agency workers who have been working with private respondent for more than
one year. Said MOA was later incorporated to form part of the 1998-2001 CBA and was
thereafter ratified by the employees of the company.
the company for more than one year. Fifty-eight (58)3 of those whose names were submitted
for regularization passed the screening and were thereafter extended regular employment
status, while the other five failed the medical examination and were granted six months within
which to secure a clean bill of health. Within the six-month period, three4 of the five employees
who have initially failed in the medical examination were declared fit to work and were
accorded regular employment status. Consequently, petitioner demanded the payment of
salary and other benefits to the newly regularized employees retroactive to 1 December 1998,
in accord with the MOA. However, the private respondent refused to yield to said demands
contending that the date of effectivity of the regularization of said employees were 1 May 1999
and 1 October 1999. Thus, on 5 November 1999, petitioner filed a complaint before the NLRC
for the alleged violations of the subject MOA by the private respondent.
Meanwhile, a certification election was conducted on 17 August 1999 pursuant to the order of
the Department of Labor and Employment (DOLE) wherein the KASAMMA-CCO Independent
surfaced as the winning union and was then certified by the DOLE as the sole and exclusive
bargaining agent of the rank-and-file employees of private respondent’s Manila and Antipolo
plants for a period of five years from 1 July 1999 to 30 June 2004. On 23 August 1999, the
KASAMMA-CCO Independent demanded the renegotiation of the CBA which expired on 30
June 1998. Such request was denied by private respondent on the contention that there was
no basis for said demand as there was already an existing CBA which was negotiated and
concluded between petitioner and private respondent, thus, it was untimely to reopen the said
CBA which was yet to expire on 30 June 2001.
On 9 December 1999, despite the pendency of petitioner’s complaint before the NLRC, private
respondent closed its Manila and Antipolo plants resulting in the termination of employment of
646 employees. On the same day, about 500 workers were given a notice of termination
effective 1 March 2000 on the ground of redundancy. The affected employees were
considered on paid leave from 9 December 1999 to 29 February 2000 and were paid their
corresponding salaries. On 13 December 1999, four days after its closure of the Manila and
Antipolo plants, private respondent served a notice of closure to the DOLE.
As a result of said closure, on 21 December 1999, petitioner amended its complaint filed
before the NLRC to include "union busting, illegal dismissal/illegal lay-off, underpayment of
salaries, overtime, premium pay for holiday, rest day, holiday pay, vacation/sick leaves, 13th
month pay, moral and exemplary damages and attorney’s fees."
On 14 January 2000, KASAMMA-CCO Independent filed a notice of strike due to unfair labor
practice with the NCMB-NCR. Failing to arrive at an amicable settlement of the labor dispute
with the private respondent, KASAMMA-CCO Independent held a strike from 9 March 2000 to
4 May 2000. On 4 May 2000, the Secretary of Labor issued an order assuming jurisdiction
over the labor dispute subject of the strike and certified the case to the NLRC for compulsory
arbitration.
On 9 July 2001, the NLRC rendered its Decision dismissing the complaint for lack of merit.
According to the Commission:
Evaluating, with utmost caution, both parties’ contrasting factual version, supporting proofs,
related legal excerpts and applicable jurisprudential citations, we discern that, under the
Memorandum of Agreement (MOA) dated December 26, 1998, the 61 regularized employees
are not entitled to their claims for the P60.00 per day salary increase, mid-year gratuity pay of
P5,000.00, one sack of rice, and overtime and thirteenth month differentials effective
December 1, 1998 onward.
Initially, under the MOA, only the employees who were regular on July 1998 and continued
being such upon the signing of the MOA on December 26, 1998 deserve retroactive payment
of the MOA benefits amounting to a lump sum of P35,000.00.
This entitlement springs from the following pertinent provisions of the MOA:
"All covered employees who were regular as of July 1, 1998 and upon the signing of this
Agreement shall each be entitled to a lump sum in the amount of THIRTY FIVE
THOUSAND PESOS (P35,000.00) which shall, subject to the ratification of the employees
within the bargaining unit, be released on or before 31 December 1998.
"The aforesaid amount shall be in lieu of the wage increase as well as THE Operation
Performances IncentiveDESCRIBED UNDER Item 11(B) hereof, all premium pay, the 13th
month and 14th month pay differentials, sick leave and vacation leave credits for the
period July 1, 1998 to December 31, 1999." Underscoring supplied)
In the case at bar, since the 61 regularized employees were regularized only on May 1, 1999
and October 1, 1999, as the case may be, they therefore have no right whatsoever to claim
entitlement to the MOA benefits.
Moreover, CFW Local 245’s insistence that the 61 regularized employees became regular on
December 1, 1998 is non sequitor. It merely flows from its specious interpretation of the MOA
provisions. The MOA does not provide that non-regular employees who would be deployed to
fill up vacant plantilla positions covered by the 1998 and 1999 manpower budget of CCBPC
should be automatically considered regular effective December 1, 1998. What the MOA
stipulates are that: 1) effective December 1, 1998, non-regular employees who have been
occupying the position to be filled up for at least one year shall be given priority in filling up the
positions; and 2) that in that case, they will not undergo the company’s regular recruitment
procedures, like interviews and qualifying examinations.
The only importance of the date of December 1, 1998 is its being the reckoning date from
which the one year employment requirement should be computed. Consequently, under the
MOA, only the non-regular employees who had worked with the company for at least a year
counted retroactively from December 1, 1998 should be given priority in the filling up of vacant
plantilla positions.
Anyway, even assuming ex gratia argumenti that the 61 regularized employees were
regularized effective December 1, 1998, they, still, are not entitled to the MOA benefits. As
discussed above, only employees who were regular on July 1, 1998 and were still so until the
signing of the MOA on December 26, 1998 could be covered by the retroactivity clause.
Furthermore, entitling the 61 regularized employees to the MOA benefits would certainly
infringe the well-entrenched principle of "no-work-no-pay". Since such employees started
becoming regular only on May 1, 1999 and October 1, 1999, as the case may be, it would thus
be most unfair to require CCBPI to pay them for their unworked period, for they would
certainly, be unjustly enriched at the expense of CCBPI.
We also hold that the allegedly redundant six hundred thirty-nine (639) employees were not
illegally dismissed.
Initially, there was just cause for the employees’ dismissal.
It bears to stress that, aimed at 1) attaining efficiency and cost effectiveness, 2) maximizing its
production capacity and 3) ensuring that its customers obtain products manufactured only
under the most stringent quality standards of CCBPI’s modern, technologically advanced
production plants, CCBPI conducted an extensive study on the operational mechanics of its
Manila and Antipolo plants.
From this study, it was established that there was inadequate water supply at CCBPI’s Manila
and Antipolo plants. As a consequence, the company was constrained to transport water from
several sources to its production line in Manila in 1998 and 1999. Worse, it was discovered
that the quality of water supply was fast deteriorating due to the rise of its salt level. This
reality prompted the company to reduce its production capacity. Moreover, the bottling process
of treating this water of decadent quality resulted in higher production costs. Under these twin
conditions, the company could not thus efficiently continue on with its operations.
The study also reveals the decadent state of the production equipment of CCBPI’s Manila and
Antipolo Plants. Their production lines were among the oldest and hence, had very low line
efficiency. In comparison with the line efficiency of 71.18% of the company’s other plants, the
Manila and Antipolo Plants had only efficiency ratings of 61.09% and 58.39%, respectively.
Whereas the other production lines had an average wastage rating of 1.01%, the twin plants
had a higher average wastage ratings of 2.05% and 1.77%, respectively. The company’s
production studies in 1998 and 1999 likewise reveal substantial issues on Good
Manufacturing Practice (GMP) and process control for such plants.
From this study, the impracticability of rehabilitating the twin plants was also found out.
Although the problems cited may be remedied by way of a major reconstruction, this would,
however, entail an investment of huge capital. Further, the congestion of the twin plants’ sites
would render impracticable such a major reconstruction. Besides, there was utter lack of
effective solution to the retrograding water supply.
The foregoing significant facts are substantially evidenced by the Technical Evaluation of
Production Requirements, Annex "20", CCBPI’s Rejoinder; Affidavit of its Operations Manager
dated 3 March 2000, Annex "1", its Position Paper dated 20 July 2000; and Certification dated
May 21, 2001 of Mr. Bruce A. Herbert, its Sur-Rejoinder.
To solve the problems cited, however, CCBPI, as soundly recommended by the study,
integrated the production capacities of the different CCBPI modern and technologically
advanced production facilities. This imperative integration indispensably prompted CCBPI to
close, its production lines at the Manila and Antipolo Plants.
This measure taken by CCBPI indeed draws jurisprudential justification from the following
sound pronouncement of the Supreme Court:
"Business enterprises today are faced with the pressures of economic recession, stiff
competition and labor unrest. Thus, businessmen are always pressured to adopt certain
changes and programs in order to enhance their profits and protect their investments. Such
changes may take various forms. Management may even choose to close a branch,
department, a plant, or a shop." (Philippine Engineering Corp. vs. CR, 41 SCRA 89)
Urgently propelled by this closure, CCBPI inevitably redundated the services of 639
employees based at the Manila and Antipolo Plants. The fact that their services became
superfluous or in excess of what were reasonably demanded by the actual requirements of the
company as a consequence of the closure certainly shows the undertone of good faith on
CCBPI’s part in resorting to the redundation measure.
Well in support of this urgent economic measure taken is the following postulation of the
Supreme Court in the case of Wiltshire File Co., Inc. vs. NLRC, et al., 193 SCRA 665:
"We believe that redundancy, for purposes of our Labor Code, exists where the services of
an employee are in excess of what is reasonably demanded by the actual requirements
of the enterprise. Succinctly put, a position is redundant where it is a superfluity, and
superfluity of a position or positions may be the outcome of a number of facets, such as
over hiring of workers, decreased volume of business, or dropping of a particular product line
or service activity previously manufactured or undertaken by the enterprises. The employer
has no legal obligation to keep in its payroll more employees than are necessary for the
operation of its business.
"x x x.
"x x x The characterization of (the employee’s) service as no longer necessary or sustainable,
and therefore properly terminable, was an exercise of business judgment on the part of (the
employer). The wisdom or soundness of such characterizing or decision was not subject to
discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as
violation of law or merely arbitrary and malicious action is not shown. X x x The determination
of the continuing necessity of a particular officer or position in a business corporation is
management’s prerogative, and the courts will not interfere with the exercise of such so long
as no abuse of discretion or merely arbitrary or malicious action on the part of management is
shown."
Another reason why the dismissal of the 639 employees was legal is that the same was
attended by the observance of the requirements of due process. Indeed, as early as 9
December 1999, more than thirty (30) days prior to their actual dismissal on 1 March 2000,
CCBPI served on the affected employees a written notice informing them of the closure of the
two plants and subsequent redundation. Later, by 13 December 1999, CCBPI filed with the
DOLE the required written notice informing it of the subject closure and consequent
redundation.
This finding is perfectly in line with the following applicable legal excerpts:
"ART. 283. Closure of establishment and reduction of personnel. ---The employer may also
terminate the employment of any employee due to ….redundancy…. or the closing or
cessation of operation of the establishment or undertaking …by serving a written notice on the
workers and the Department of Labor and Employment at least one (1) month before the
intended date thereof."lawphil.net
"For termination of employment based on just causes defined in Article 282 of the Labor Code:
(i) A written notice served [on] the employee specifying the ground or grounds for termination,
and giving said employee reasonable opportunity within which to explain his side;
(ii) A hearing or conference during which the employee concerned, with the assistance of
counsel if he so desires is given opportunity to respond to the charge, present his evidence or
rebut the evidence presented against him; and
(iii) a written notice of termination served on the employee, indicating that upon, due
consideration of all the circumstances, grounds have been established to justify his
termination.
"For termination of employment as defined in Article 283 of the Labor Code, the requirement of
due process shall be deemed complied with upon the service of a written notice to the
employee and the appropriate Regional Office of the Department of Labor and Employment at
least thirty days before [effectivity] of the termination, specifically the ground or grounds for
termination." (Par. D, Section 2, Rule 1, Book VI, Omnibus Rules Implementing the Labor
Code)
Needless to state, having been lawfully redundated, as comprehensively discussed above, the
affected employees are entitled to payment of separation pay equivalent to one (1) month pay
for every year of service, pursuant to Article 283 of the Labor Code which provides:
"In case of termination due to the installation of labor saving devices or redundancy, the
worker affected thereby shall be entitled to separation pay equivalent to at least his one (1)
month pay or to at least One (1) month pay for every year of service, whichever is higher."
However, due to the economic adversity besetting our workers today brought about by the
ever increasing standards of living, CCBPI realized that such a legal package was no longer
conformable with such on obtaining economic reality. Accordingly, CCBPI granted the affected
employees separation package much bigger than that legal separation package. Specifically,
CCBPI paid affected employees with less than fifteen (15) years of service 150% monthly
salary for every year of service and those with fifteen (15) years and above of service 195%.
xxxx
We, moreover, view that CCBPI is not guilty of unfair labor practice.
Contrary to KASAMMA-CCO-Independent’s contention, CCBPI did not resort to the closure of
Manila and Antipolo plants and resultant redundation of their 637 employees just to prevent
the renegotiation of the CBA entered into between CCBPI and CFW Local 245. First, there is
no substantial evidence on record supporting this claim. Secondly, as exhaustively
explained supra, CCBPI’s decision to undertake the subject closure and subsequent
redundation was due to legitimate business considerations, namely 1) the production lines at
the two plants had very low line efficiency; 2) the quality of water supply at such plants was
rapidly deteriorating; and 3) the rehabilitation of such plants was not feasible due to the huge
capital investment required as well as the congestion of their areas.
xxxx
WHEREFORE, premises considered, KASAMMA-CCO Independent, and CFW Local 245’s
charges in the instant labor dispute for non-grant of the CBA salary increase, mid-year
gratuity, one sack of rice, overtime pay and thirteenth (13th) month pay; illegal dismissal;
unfair labor practice; and recovery of moral and exemplary damages and attorney’s fees are
hereby DISMISSED for lack of merit.
Petitioner Coca-Cola Bottlers Phils., Inc., however, is directed to grant the separation package
adverted above to the affected employees who have not yet received the same. Further, the
company is ordered to accord the affected employees priority in rehiring in the event the
company needs, in the future, additional personnel.5
Petitioner’s motion for reconsideration was denied in a resolution dated 24 September 2001,
thus on 22 November 2001 petitioner filed a petition for certiorari before the Court of Appeals,
which was disposed by the appellate court in this wise:
After painstaking efforts and a careful examination of the records, we rule against the
contention of the petitioner. The conflicting factual submissions of the parties in the case at bar
cannot close our eyes to the fact that the instant case pose upon an obligation on this Court to
review and re-examine the factual findings and to re-evaluate the pieces of evidence which
supported the conclusion of the public respondent in its disposition of the present controversy.
This issue has already been settled in Deles, Jr. vs. NLRC [327 SCRA 540 (2000)], where the
Supreme Court ruled:
"On its face, petitioner’s contention would require the Court to delve into the findings of fact a
quo. This we cannot do. In the review of NLRC decisions through a special civil action for
certiorari, we are confined only to issues of want of jurisdiction and grave abuse of discretion
on the part of the labor tribunal. We are precluded from inquiring unto the correctness of the
evaluation of that evidence that underpins the labor tribunal’s conclusion on matters of fact.
Nor could we examine the evidence, re-evaluate the credibility of the witnesses, nor substitute
our findings of fact for those of an administrative body which has the authority and expertise in
its specialized field. Arguably, there may even be an error in judgment. This however is not
within the ambit of the extraordinary remedy of certiorari."
Moreover, the pronouncement of the High Tribunal in Dela Salle University v. Dela Salle
University Employees Association [330 SCRA 363 (2000)], citing established jurisprudence,
has clarified the guidelines in the resolution of petitions for certiorari involving labor cases in
this wise:
"As we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S.
Brillantes, the following are the well-settled rules in a petition for certiorari involving labor
cases.
First, the factual findings of quasi-judicial agencies (such as the DOLE), when supported by
substantial evidence, are binding on this Court and entitled to great respect, considering the
expertise of these agencies in their respective fields. It is well established that findings of
these administrative agencies are generally accorded not only respect but even finality.
Second, substantial evidence in labor cases is such amount of relevant evidence which a
reasonable mind will accept as adequate to justify a conclusion.
Third, in Flores vs. NLRC, we explained the role and function of Rule 65 as an extraordinary
remedy. It should be noted, in the first place, that the instant petition is a special civil action for
certiorari under Rule 65 of the Rules of Court. An extraordinary remedy, its use is available
only and restrictively in truly exceptional cases – those wherein the action of an inferior court,
board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on
grounds of jurisdiction.
The sole office of the writ of certiorari is the correction of errors of jurisdiction including the
commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does
not include correction of public respondent NLRC’s evaluation of the evidence and the factual
findings based thereon, which are generally accorded not only great respect but even finality."
In the light of the rulings established under the abovecited cases, we find no ground for
disturbing the factual findings of the public respondent vis-à-vis its resolution with regard to the
issue of the validity of the claims of the newly-regularized members of the petitioner union, as
the same is supported by substantial evidence and in accord with established jurisprudence
herein cited. It must be stressed that factual findings of labor officials are conclusive and
binding on the Supreme Court when supported by substantial evidence.
Anent the issue of the closure of the Manila and Antipolo plants of the private respondent
which resulted in the termination from employment of 639 or 646 employees working under
the said facilities, we find the same in order and in accord with law.
xxxx
It must be noted that in sustaining the contention of the private respondent on the said issue,
the public respondent has relied on the grounds asserted by the private respondent as basis
in effecting the closure and the resultant cessation of business operations in the aforesaid
plants. The recent accretion to the corpus of our jurisprudence is the principle enunciated in
National Federation of Labor vs. NLRC [327 SCRA 158 (2000)] which holds the view that:
The closure of establishment contemplated under Article 283 of the Labor Code is a unilateral
and voluntary act on the part of the employer to close the business establishment as may be
gleaned from the use of the word "may" – it does not contemplate a situation where the
closure of the business establishment is forced upon the employer and ultimately for the
benefit of the employees.
Although the Constitution provides for protection to labor, capital and management must also
be protected under a regime of justice and the rule of law.
Hence, the claim of the petitioner that the technical evaluation of the private respondent which
served as basis for the closure of the said facilities must be presented to the petitioner union
first before the private respondent can implement the said action is bereft of legal basis. The
same fate must suffer with respect to the claim of the petitioner that a prior consultation is a
condition sine qua non as required under the Labor Code vis-à-vis the provision on the
participation of the employees in the decision-making processes of the employer private
respondent, before the latter can effectuate the said closure, is devoid of legal and
jurisprudential basis.
As aptly stated by an authority in labor laws [Cesario A. Azucena, Jr., Everyone’s Labor Code,
2001 Edition, p. 302], the author opined that even if the business is not losing but its owner, for
reasons of his own, wants to stop doing business, he can lawfully do so anytime provided he
is in good faith. He further lamented in saying that "just as no law forces anyone to go into
business, no law compels anybody to stay in business."
Moreover, the private respondent has complied with the aforesaid requirements of the law
when it decided to close the said establishments. The records disclose that the alleged
redundant, or more appropriately, separated employees affected by the said closure were in
fact individually served with a notice of termination. All of the subject employees were offered
and given a separation package by the private respondent more than what is provided by the
law and more than what is stipulated under their CBA, although, some refused to accept the
said benefits, and insisted on their being reinstated. We take note that as of the present, 546
of the 639 terminated or separated employee-members of the petitioner union were ale to
receive the said separation benefits. Moreover, the receipt of the said separation benefits was
admitted by the petitioner. The Department of Labor and Employment (DOLE) was also
notified of such closure through a letter sent by the private respondent dated December 10,
1999.
The petitioner claims that the private respondent failed to comply with the one-month notice
requirement as required under the said legal provision since the subject employees were no
longer allowed to report for work effective immediately upon receipt of their termination notice.
However, they were still paid their salaries effective from December 9, 1999 until February 29,
2000, although they did not anymore render service for the period. Significantly, this peculiar
fact which petitioner claims as an indirect circumvention of the said law has already been
addressed, albeit by analogy, in the recent case of Serrano v. NLRC [331 SCRA 341 (2000)].
In the said case, the Supreme Court held:
In that case (Associate Labor Unions-VIMCONTU vs. NLRC [204 SCRA 913]), the employees
and the then Ministry of Labor and Employment (MOLE) were notified in writing on August 5,
1983 that the employees’ services would cease on august 31, 1983 but that they would be
paid their salaries and other benefits until September 5, 1983. It was held that such written
notice was "more than substantial compliance with the notice requirement of the Labor Code."
Indeed, there was more than substantial compliance with the law in that case because, in
addition to the advance written notice required under Art. 284 (now Art. 283) of the Labor
Code, the employees were paid for five days, from September 1 to 5, 1993, even if they
rendered no service for the period.1avvphil.net
Had private respondent given a written notice to the petitioner on October 1, 1991, at the
latest, that effective October 31, 1991 his employment would cease although from October 1
he would no longer be required to work, there would be basis for private respondent’s boast
that ‘[p]ayment of this salary even [if he is] no longer working is effective notice and is much
better than 30 days formal notice but working until the end of the 30 days period." This is not
the case here, however. What happened here was that on October 11, 1991, petitioner was
given a memorandum terminating his employment effective on the same day on the ground of
retrenchment (actually redundancy).
xxx
WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The
assailed decision dated July 9, 2001 and the Order dated September 24, 2001 issued by
public respondent National Labor Relations Commission (NLRC) are hereby AFFIRMED. No
costs.6
Petitioner’s motion for reconsideration was denied in a resolution dated 5 September 2003.
Hence, the instant petition.
Petitioner presents before this Court two issues for resolution, namely: 1) whether or not
private respondent violated the terms and conditions contained in the MOA dated 26
December 1998 when it did not recognize the regularization of the 61 employees as effective
on 1 December 1998; and 2) whether or not the closure of private respondent’s Manila and
Antipolo plants, resulting in the termination of employment of 646 employees, was legal.
In dismissing the petition before it, the Court of Appeals opined that the resolution of the
validity of the claims of the newly regularized employees would entail a review and re-
examination of the factual findings and the re-evaluation of the pieces of evidence which
supported the conclusion of the NLRC in the latter’s disposition of the instant controversy. We
do not agree with the Court of Appeals. The said issue is not a question of fact which will
necessitate the appellate court to again examine the evidence. It is, rather, a question of law.
There is a question of law when the issue does not call for an examination of the probative
value of evidence presented, the truth or falsehood of facts being admitted and the doubt
concerns the correct application of law and jurisprudence on the matter.7 On the other hand,
there is a question of fact when the doubt or controversy arises as to the truth or falsity of the
alleged facts. When there is no dispute as to fact, the question of whether or not the
conclusion drawn therefrom is correct is a question of law.8
What is necessary in determining whether the private respondent violated the provisions of the
MOA with respect to the date of regularization of the 61 employees is an interpretation of the
pertinent provision of the MOA as agreed upon by the parties. It must be noted that both
parties admit the existence of said MOA and that they have voluntarily entered into said
agreement. Furthermore, neither of the parties deny that the 61 employees have indeed been
regularized by private respondent. Clearly, as the facts are admitted by the parties, the
appellate court does not have to inquire into the veracity of any fact in order to establish the
rights of the parties. All that the Court of Appeals must do is to interpret the provisions of the
MOA and resolve whether said regularization must be made retroactive to 1 December 1998,
which according to petitioner is provided for under the said MOA. The MOA, being a contract
freely entered into by the parties, now constitute as the law between them, and the
interpretation of its contents purely involves an evaluation of the law as applied to the facts
herein.
Thus, the issue being a question of law, this Court will now endeavor to resolve such matter.
According to the pertinent provision of the MOA:
1. Non-economic issues
A. Filling-up of vacant regular plantilla positions; regularization
The company shall fill-up all vacant plantilla positions covered by the 1998 manpower budget
as already identified by the Task Force created by the parties for the purpose following the
following procedures:
1. Non-regular employee (casual, contractual or agency worker) who has already served the
company and is presently occupying or has occupied the position to be filled-up for at least
one (1) year shall be given priority in filling-up the position by converting his non-regular
employment status to regular employment status, effective 01 December 1998 without need of
undergoing through the company’s regular recruitment procedures such as interview and
qualifying examination. x x x9
It is the contention of petitioner that the date 1 December 1998 refers to the effective date of
regularization of said employees, while private respondent maintains that said date is merely
the reckoning date from which the one year employment requirement shall be computed. We
agree with petitioner. It is erroneous for the NLRC to conclude that the regularization of the 61
employees does not retroact to 1 December 1998. A fastidious reading of the above quoted
provision will clearly point to the conclusion that what is pertained to by the phrase "effective
December 1, 1998" is the phrase immediately preceding it which is "converting his non-regular
employment status to regular employment status." It will be defying logic to adopt private
respondent’s contention that the phrase "effective December 1, 1998" designates the period
when the non-regular employees will be given priority in filling-up the positions, simply
because the MOA was signed only on 26 December 1998. Therefore, it is logically absurd that
the company will only begin to extend priority to these employees on a date that has already
passed, when in fact they have already extended priority to these employees by agreeing to
the contents of the MOA and signing said agreement. Consequently, we hold that the
effectivity date of the regularization of the 61 employees was 1 December 1998.
We, too, cannot agree with the NLRC’s rationale that entitling the 61 regularized employees to
the MOA benefits would certainly infringe the well-entrenched principle of "no-work-no-pay,"
since they only became regular, according to private respondent, on 1 May 1999 and 1
October 1999. As stated in the MOA, only those who have worked with the company for one
year as of 1 December 1998 and are still working for the company as of the signing of the
MOA, will be considered for regularization. Evidently, it is erroneous for the NLRC to conclude
that extending to them the benefits of the MOA would violate the principle of "no-work-no-pay"
as they are actually rendering service to the company even before 1 December 1998, and
continued to do so thereafter. Truly, they were accorded the status of regular employees
precisely because they were rendering service to the company for the required period.
Moreover, at this point it must be stressed that under Article 280 of the Labor Code, any
employee who has rendered at least one year of service, whether such service is continuous
or broken, shall be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists. Also, under the law, a
casual employee is only casual for one year, and it is the passage of time that gives him a
regular status. Hence, even without the subject MOA provision, the 61 employees must be
extended regular employment status after the lapse of one year. Even if we were to follow
private respondent’s contention that the date 1 December 1998 provided in the MOA is merely
a reckoning date to determine who among the non-regular employees have rendered one year
of service as of said date, all those who have been with the company for one year by said date
must automatically be considered regular employees by operation of law. Therefore, contrary
to the interpretation of the NLRC, private respondent violated the provision of the MOA when it
did not consider the regularization of the 61 employees effective 1 December 1998, and
accorded to them the full benefits of the MOA.
Relative to the issue of whether the closure of private respondent’s Manila and Antipolo plants
was legal, we agree in the conclusions of the NLRC and the Court of Appeals that the closure
of said plants is for an authorized cause.
As correctly pointed out by the NLRC, the Court has already resolved that the characterization
of the employee’s service as no longer necessary or sustainable, and therefore properly
terminable, is an exercise of business judgment on the part of the employer.10 The wisdom or
soundness of such characterizing or decision is not subject to discretionary review on the part
of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary
and malicious action is not shown.11 The determination of the continuing necessity of a
particular officer or position in a business corporation is management’s prerogative, and the
courts will not interfere with the exercise of such so long as no abuse of discretion or merely
arbitrary or malicious action on the part of management is shown.12 In the case at bar, the
closure of the Manila and Antipolo plants and the resulting termination of the employment of
646 employees is not tainted with bad faith. As found by the NLRC, the private respondent’s
decision to close the plant was a result of a study conducted which established that the most
prudent course of action for the private respondent was to stop operations in said plants and
transfer production to other more modern and technologically advanced plants of private
respondent.
Other than its mere allegations, petitioner union failed to show that the closure of the two
plants was without factual basis and done in utter bad faith. No evidence was presented by
petitioner to prove its assertion that private respondent resorted to the closure of the Manila
and Antipolo plants to prevent the renegotiations of the CBA entered into between the parties.
As adequately explained by the NLRC, the subject closure and the resulting termination of the
639 employees was due to legitimate business considerations, as evidenced by the technical
study conducted by private respondent.
would cease although from October 1 he would no longer be required to work, there would be
basis for private respondent’s boast that ‘[p]ayment of this salary even [if he is] no longer
working is effective notice and is much better than 30 days formal notice but working until the
end of the 30 days period." This is not the case here, however. What happened here was that
on October 11, 1991, petitioner was given a memorandum terminating his employment
effective on the same day on the ground of retrenchment (actually redundancy).14
In the instant case, the employees were served notice on 9 December 1999 that their
employment were being severed effective 1 March 2000; however they were no longer
required to report for work but they will continue to receive their salary up to 29 February
2000. Therefore, as enunciated in the ruling in Serrano v. NLRC, said act of private
respondent constitutes substantial compliance with the notice requirement of the Labor Code.
WHEREFORE, premises considered, the assailed Decisions of the Court of Appeals in CA-
G.R. SP No. 67775 and of the National Labor Relations Commission in NLRC Case No.
30-11-00466-99 and NLRC CC No. 000182-00 are hereby AFFIRMED with MODIFICATION.
The 61 subject employees are hereby declared regular employees as of 1 December 1998
and are entitled to the CBA salary increase, mid-year gratuity pay, one sack of rice, overtime
pay and thirteenth (13th) month pay as provided for in the Memorandum of Agreement. No
costs.
SO ORDERED.

Anent the allegation that private respondent failed to comply with the notice requirements as
provided by the Labor Code in the cessation of its operations, we have already settled this
matter in a similar case which was accordingly cited by the appellate court. In the case
of Serrano v. National Labor Relations Commission,13 we held that:

In that case [Associate Labor Unions-VIMCONTU v. NLRC (204 SCRA 913)], the employees
and the then Ministry of Labor and Employment (MOLE) were notified in writing on August 5,
1983 that the employees’ services would cease on August 31, 1983 but that they would be
paid their salaries and other benefits until September 5, 1983. It was held that such written
notice was "more than substantial compliance" with the notice requirement of the Labor Code.

Indeed, there was "more than substantial compliance" with the law in that case because, in
addition to the advance written notice required under Art. 284 (now Art. 283) of the Labor
Code, the employees were paid for five days, from September 1 to 5, 1993, even if they
rendered no service for the period. x x x Had private respondent given a written notice to the
petitioner on October 1, 1991, at the latest, that effective October 31, 1991 his employment