Amelia J. Delos Santos vs. Jebsen Maritime, Inc. G.R. No. 154185, November 22, 2005 Decision Garcia, J.

Labor Law I
Status of Employment Cases
AMELIA J. DELOS SANTOS VS. JEBSEN MARITIME, INC.

G.R. No. 154185, November 22, 2005

D E C I S I O N
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 2002 [1] and 03 July 2002 [2], 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.
As narrated in the assailed decision of the Court of Appeals, the following events next 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 complaint [6] 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 decision [8] dated 29 August 2000, modified that of the labor arbiter, as follows:
Labor Law I
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 Resolution [9] 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 judgment [10], 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 Code [15] 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.
Labor Law I
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 18 [21] 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 peso [23] 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 P8,475.00 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]
Labor Law I

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.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman

FIRST DIVISION
[G.R. NO. 152427 : August 9, 2005]
INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION and GLEN
SOLON, Respondent.
DECISION
QUISUMBING, J.:
This Petition for Review assails the Decision1 dated October 30, 2001 of the Court of Appeals and its Resolution2 dated February 28, 2002
in CA-G.R. SP No. 60136, denying the petitioner's 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

Labor Law I
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 Center5
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 petitioner's
office on February 24, 1998 to verify his status, he found out that indeed, he had been terminated. He went back to petitioner's 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
Petitioner's 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 petitioner's 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. NLRC12 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.
Labor Law I
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 respondent's 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 petitioner's business or
trade.16
In Maraguinot, Jr. v. NLRC17 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?chanroblesvirtualawlibrary
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 petitioner's 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 employee's 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 respondent's 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 respondent's 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 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'
The failure of the petitioner to comply with these procedural guidelines renders its dismissal of private respondent, illegal. An illegally
dismissed employee is entitled to 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.
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.
Article 95(a) of the Labor Code governs the award of service incentive leave. It provides that every employee who has rendered at least one
year of service shall be entitled to a yearly service incentive leave of five days with pay, and Section 3, Rule V, Book III of the Implementing
Rules and Regulations, defines the term "at least one year of service" to mean service within 12 months, whether continuous or
broken reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the working
days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case
said period shall be considered as one year. Accordingly, private respondent's service incentive leave credits of five days for every year of
Labor Law I
service, based on the actual service rendered to the petitioner, in accordance with each contract of employment should be computed up to
the date of reinstatement pursuant to Article 279 of the Labor Code. 26
WHEREFORE, the assailed Decision dated October 30, 2001 and the Resolution dated February 28, 2002 of the Court of Appeals in CA-G.R.
SP No. 60136, are AFFIRMED with MODIFICATION. The petitioner is hereby ORDERED to (1) reinstate the respondent with no loss of
seniority rights and other privileges; and (2) pay respondent his backwages, 13th month pay for the year 1998 and Service Incentive Leave
Pay computed from the date of his illegal dismissal up to the date of his actual reinstatement. Costs against petitioner.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
UNIVERSAL ROBINA CORPORATION AND/OR RANDY GREGORIO, PETITIONERS, VS. BENITO CATAPANG, CARLOS ARARAO, ALVIN

ALCANTARA, RESTY ALCORAN, REYNALDO ARARAO, JUAN ARISTADO, LITO CABRERA, ONOFRE CASANO, BEN CERVAS, JOSEPH
CHUIDIAN, IRENEO COMENDADOR, ANGELITO CONCHADA, RICHARD CORONADO, ELMER HILING, RAMON JOYOSA, JOSE LORIA, JR.,
VICTORIANO LORIA, RUEL MARIKIT, RODERICK PANG-AO, QUIRINO PLATERO, PABLITO REDONDO, RAMIL ROXAS, RESTY SALAZAR,
NOEL TRINIDAD, FELICISIMO VARELA, BALTAZAR VILLANUEVA, ELPIDIO VILLANUEVA, JOEL VILLANUEVA, JONATHAN
VILLANUEVA, AND JAIME VILLEGAS, RESPONDENTS.
DECISION
CALLEJO, SR., J.:
Petitioner Universal Robina Corporation is a corporation duly organized and existing under the Philippine laws, while petitioner Randy
Gregorio is the manager of the petitioner company's duck farm in Calauan, Laguna. [1]
The individual respondents were hired by the petitioner company on various dates from 1991 to 1993 to work at its duck farm
in Barangay Sto. Tomas, Calauan, Laguna. The respondents were hired under an employment contract which provided for a five-month
period. After the expiration of the said employment contracts, the petitioner company would renew them and re-employ the respondents.
This practice continued until sometime in 1996, when the petitioners informed the respondents that they were no longer renewing their
employment contracts.[2]
In October 1996, the respondents filed separate complaints for illegal dismissal, reinstatement, backwages, damages and attorney's fees
against the petitioners. The complaints were later consolidated.
On March 30, 1999, after due proceedings, the Labor Arbiter rendered a decision in favor of the respondents:
WHEREFORE, premises considered, judgment is hereby rendered declaring that complainants have indeed been illegally dismissed from
their employment.
Accordingly, respondents are hereby ordered to reinstate individual complainants to their former positions without loss of seniority rights
and to pay them their backwages as follows:
Complainants Amount
1. Reynaldo Ararao P113,703.20
2. Carlos Ararao P100,372.48
3. Resty Alcoran P100,372.48
4. Richard Coronado P113,703.20
5. Quirino Platero P113,703.20
6. Benito Catapang P113,703.20
7. Jose Loria, Jr. P100,372.48

Labor Law I
8. Elpidio Villanueva P113,703.20
9. Jonathan Villanueva P113,703.20
10. Baltazar Villanueva P113,703.20
11. Victoriano Loria P144,881.10
12. Roderick Pangao P100,372.48
13. Lito Cabrera P113,703.20
14. Elmer Hiling P113,703.20
15. Jaime Villegas P113,703.20
16. Angelito Conchada P119,192.20
17. Juan Aristado P113,703.20
18. Joel Villanueva P113,703.20
19. Ben Cervas P113,703.20
20. Ruel Marikit P113,703.20
21. Ireneo Comendador P113,703.20
Total ------------------------- P2,339,933.44
Respondents are likewise ordered to pay fifteen percent (15%) of the total amount due, or P 350,990.01, as and by way of attorney's fees.
SO ORDERED.[3]
On May 17, 1999, the petitioners filed an Appeal Memorandum with the National Labor Relations Commission (NLRC) on the ground that
the Labor Arbiter erred in ruling that the respondents are the petitioner company's regular employees.
Meanwhile, on May 18, 1999, the respondents filed a Motion for Enforcement of Reinstatement Order with the Labor Arbiter. On June 3,
1999, the latter issued an Order, which reads in full:
Finding the "Motion for Enforcement of Reinstatement Order" dated 18 May 1999, filed by the complainants to be in order, respondents are
hereby directed to immediately comply in good faith to the reinstatement aspect of the Decision of this Office dated 30 March 1999.
Furthermore, it appearing from the records that several individuals in this case were inadvertently omitted as party-complainants in the
aforesaid Decision, clarification is hereby made that the complainants hereinbelow set forth are to be deemed included in the coverage of the
said decision with the corresponding right(s) to their backwages, to wit:
1. Alvin Alcantara - P129,126.40
2. Onofre Casano - P106,917.20
3. Joseph Chuidian - P104,165.10
4. Ramon Joyosa - P128,029.20
5. Pablito Redondo - P105,409.20
6. Ramil Roxas - P109,330.00
7. Resty Salazar - P105,296.10
8. Noel Trinidad - P108,312.10
9. Felicisimo Varela - P119,358.20
TOTAL - P1,015,943.50
[4]
SO ORDERED.
Labor Law I
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 company's 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 farm's 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 attorney's 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
Labor Law I
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]
Labor Law I
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 petitioner's 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
Labor Law I
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.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
SECOND DIVISION
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,
vs.
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.

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. Niñ o 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
Labor Law I
1975-1978 — P6.00
1978-1979 — P7.00
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 farms, but only to do a particular phase of agricultural work
necessary in rice production and/or sugar cane production, after which they would be free to render services to other farm owners who
need their services.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
Labor Law I
Moreover, they argue that Policy Instruction No. 12 15 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
Labor Law I
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.
A project employee has been defined to be one whose employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employee, or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season 26 as in the present case.
The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fan under the definition of the
preceding paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who have rendered at
least one year of service regardless of the fact that such service may be continuous or broken.
Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the Labor Arbiter
should have considered them regular by virtue of said proviso. The contention is without merit.
The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or limit the
generality of the clause that it immediately follows. 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 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
Labor Law I
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.
Melencio-Herrera (Chairperson), Paras and Regalado, JJ., concur.

Sarmiento, J., on leave.
SECOND DIVISION
[G.R. No. 118475. November 29, 2000.]
ELVIRA ABASOLO, ANTONIO ABAY, PURIFICACION ABAY, CATALINA ABELLERA, DANIEL ABELLERA, ELSIE ABELLERA, LOURDES
ADUSE, PACITA ALAMAN, REYNALDO ALBAY, ROGELIO ALBAY, EMERITA ALCOY, ERLINDA ALEGRE, CORAZON ALOOT, IMELDA
ALOOT, ROWENA ALOOT, SHIRLEY JULIANA ALOOT, ADORACION ANTALAN, ESTRELLA ANTOLIN, EPIFANIA ANTONIO, CARMELITA
AQUINO, CECENIA ASPIRAS, EMILIANA ASPIRAS, ANA BELEN ASPREC, MELENCIO ASPURIA, ILUMINADA ASTRO, CARMELITA
ASUNCION, FLORENTINA AVENA, EMILIA BACQUIL, GLORIA BAGALAN, BENJAMIN BALANAG, CLARITA BALANAG, CONSUELO
BALANAG, DOLORES BALANAG, CANDIDA BALANGA, CLARITA BALANGA, FRANCISCA BALANGA, CORAZON BALANGUE, MILDRED
BALANGUE, ERLINDA BALDERAS, MANUEL BALLESIL, ERLINDA BAMBAO, ROSEMARIE BASIO, AMALIA BATARIO, CONCHITA
BATARIO, CORAZON BATARIO, ERLINDA BATARIO, GLORIA BATARIO, PEDRO BATARIO, JR., REBECCA BATARIO, PERLA BAUTISTA,
SHIRLEY BAUTISTA, ANGELISA BAYANI, MORGAN BEGALAN, FRANCISCA BERBON, BERNARD VISITACION, EVELYN BIASON,
VERONICA BLANDO, UFENIA BLANZA, AMBROSIA BOADO, CARLOS BOADO, LOLITA BORJE, MARILOU BUNGAY, RODRIGO BURGOS,
AMELITA CABALBAG, ERNESTO CABALBAG, ELVIRA CABUGON, JOSEFINA CACANINDIN, CORAZON CACAYARA, JAIME CACHERO,
JULIET CALLANO, ANDRES CALUZA, TERESITA CALUZA, ISABEL COMADRO, EDITA CARBONEL, LOLITA CARILLA, BIENVENIDA
CARINO, DELIA CARINO, LOLITA CARINO, AMARIO CARREON, ARMELINDA CARREON, ERLINDA CARREON, FECIDAD CARREON, JOSE
CARREON, MA. VICTORIA CARREON, BENJAMIN CASALLO, DEMETRIA CASEM, ALBERTO CASIM, GLORIA CASIM, FLORIDA CATUNGAL,
ESTER CAVINTA, REMEDIOS CAVINTA, ROSALINDA CAVINTA, JULITA CAYABYAB, IRENE CELESTE CARMELITA CHAN, ESMENIA
CORDERO, LYDIA CORPUZ, JOVA CORTEZ, NORA CORTEZ, MAGDALENA CUDAL, GENOVA DACANAY, SABINA BACLAN, CORAZON
DANAO, ELISA DASALLA, AGNES BIBIANA DE CASTRO, ANITA DE CASTRO, EDITHA DE CASTRO, NIDA DE CASTRO, CORAZON DE
JESUS, JOSE DE JESUS, MERLA DE JESUS, MILAGROS DE VERA, APOLINARIO DOLATRE, CAMILO DOLOR, JR., LOLITA DOLOR, WILMA
DOMINGO, OLYMPIA DOMONOON, BASILIO DULATRE, BASILIO DULATRE, IMELDA DULATRE, LETICIA DULATRE, MARTINA
DULATRE, RODRIGO DULATRE, JR., ROGELIO DULATRE, TRIFONA DULATRE, CONSOLACION DULAY, CRESILDA DULAY, DANILO
DULAY, EDITHA DULAY, ELENA G. DULAY, ERLINDA DULAY, ESTRELLA DULAY, ESTELITA DULAY, ESTRELITA P. DULAY,
EVANGELINE DULAY, FELICIDAD DULAY, FELISA DULAY, GINA DULAY, GINA DULAY, GLORIA DULAY, GUILLERMO DULAY, JAIME
DULAY, LETICIA DULAY, LOLITA DULAY, LUIS DULAY, MARIA G. DULAY, MILAGROS DULAY, REMEDIOS DULAY, ROBERTO DULAY,
SOTERO DULAY, TERESITA DULAY, TERESITA G. DULAY, TERESITA M. DULAY, THERESITA DULAY, VALENTIN DULAY, EDITHA
DUMO, REMEDIOS DY, RIA MAPILI, VICTORIO MAPILI, ROBERTO MARAMBA, SUSANA MARAMBA, ANDRES MARCOS, LANIA MARCOS,
AURORA MARGASA, ARSENIA MARIGZA, LOLITA MARQUEZ, ANA MARIA MARZAN, ANGELITA MEDINA, ADELINA MEDRIANO,
ELIZABETH MEDRIANO, HERMINIA M. MEDRIANO, ROSALINDA MEDRIANO, CLEOFE MELANA, LOLITA MELENDEZ, LOURDES
MIGUEL, EMILIA G. MILANES, JOSE MILANES, LILIA MILO, LILIAN MILO, FELICIDA MORION, EVELYN MOSTER, ADORACION MUNAR,
ELEONORA MUNAR, IMELDRA NAVARRO, TERESITA NAVERIDA, ANITA NINOBLA, AURELIA NINOBLA, CARMELITA NINOBLA,
MARCELA NINOBLA, MYRNA NISPERO, JOSEFINA NUTO, LANY OBSRA, ELENA OCAMPO, SYLVIA OLINARES, ROSITA OPENIANO,
TRINIDAD ORDUNA, ROSALINDA ORDONEZ, JESSIE ORIBELLO, REMEDIOS ORIBELLO, TERESITA ORIBELLO, HILARIO ORACION,
AVELINA ORTILLA, MAGDALENA ORTILLA, MARIETTA ORTILLA, LEONORA PADER, AMALIA PADILLA, ARCELITA PADILLA, EVELYN
PADILLA, FELICIDA ORTILLA, JOSELYN PADILLA, JOSEPHINE PADILLA, VIRGINIA PADILLA, CLARITA PAIS, EDUARDO PANIS, JESUS
PANIS, JOSE PANIS, TEOFILA PANIS, VIOLETA PARADO, ROSITA PAROCHA, CARMELITA PASCUA, LUCIA PAYUMO, MARIA PICAR,
REYNALDA PILARCA, LUZVIMINDA QUERO, ALEJANDRA QUEZADA, TEODORO QUEZADA, ARLENE QUIBAN, AIDA QUINDARA,
JUANITA QUINONES, GLORIA RABOT, EFREN RACELIS, ERLINDA RACELIS, IMELDA RACELIS, REMEDIOS RACELIS, SUSANA RACELIS,
TERESITA RACELIS, FLORITA RAQUEL, ALMA RAMIREZ, CARMEN RAMIREZ, ROSEMARIE RAMIREZ, GEMMA RAMOS, JUANITA
RAMOS, IMELITA REYES, VICTORIA A. RIVERA, VIRGINIA RIVERA, LYDIA ROBLES, EMILIA RONQUILLO, ROSALLA ROSETE,
FORTUNATO RUIZ, GLORIA RUIZ, RICARDO RUIZ, ROSALINDA RUIZ, ROLIE RUIZ, DANILO RULLA, EDITHA RULLA, MARITES RULLA,
ANTONIO RULLAMOS, BERNADETEE RULLAMAS, JULITA R. RULLAMAS, SOLEDAD RULLAMAS, CELILIA RULLAN, NAPOLEON RULLAN,
NORA RULLAN, WARLITO RULLAN, AURORA RULLODA, GLORIA RULLODA, REMEDIOS RULLODA, LETICIA RUMATAY, FELY RUNAS,
RIZALITO RUNAS, DOMINGA SABADO, JOSE SACDAL, CLARITA SALAZAR, GLORIA SALTING, PURITA SAMSON, ESTRELLITA SERRANO,
GEMMA SIABABA, SUSANA SIABANA, PERLITA SOBREMONTE, CARMEN SOBREVILLA, RUBIE SOLOMON, MONICA SORIANO, ERLINDA
SUGUITAN, JULIETA SUCNET, FEDEL TACIO, LETICIA TAGARA, JOSEFINA TALENG, MARILY TAMONDON, NIEVEZ TAMONDON, GLORI
TANGALIN, LEONARDO TANGALIN, MYRNA TANGALIN, NOEMA TANGALIN, NORMA TANGALIN, CRISTETA TEANAN, RUFINA
TRANCIA, ALMA TRINIDAD, GLORIA TUGADE, TERESITA TUMBAGA, ALICIA UBONGEN, ZENAIDA UCOL, ADELA UGAY, AMALIA UGAY,
ESTELLA UGAY, HONORATO UGAY, JULIETA UGAY, LOURDES UGAY, PURIFICACION UGAY, ROSEMARIE UGAY, RUFINA UGAY,
ANGELITO UMEL, JOSEFINA VALDEZ, ALFREDO VERCELES, JOSIE VERCELES, HELEN VILLANUEVA, SALVACION VILLAROSA, DOMINGO
YARANON, FELIMON YARANON, FELIX YARANON, MONICA YARES, CONSOLACION YARIZ, DEMETRIA YARIZ, IMELDA YARIZ,
MARGARITA ZARATE, ESMERALDA ABAD, LOURDES ABELLERA, MILAGROS ADUBE, JOSEPHINE ARIAS, ERLINDA ASPERIN, EMELDA
Labor Law I
ASUNCION, LILIA ASUNCION, VIOLETA ASUNCION, ROSA BALAGOT, ADORACION BALANAG, ALICA J. BALANAG, GLECERIA BALANGA,
CORAZON BAMBICO, RICARDO BAIARIO, ADELA BAUTISTA, CORAZON BRAVO, DINAH BULATAO, MARILOU BUNGAY, LORETO
BURGOS, EVELYN CABUNIAS, CARLITO CACAYURAN, ISABEL CAMACHO, LUCRECIA CARREON, ALFREDO CASEM, HERA CASEM, MELY
CASEM, NATIVIDAD CASIPIT, LYN CASTILLO, NENITA CASTANEDA, CARMELITA CAVINTA, LEONIDA CAVINTA, LEONILA CAVINTA,
MELANIE CHAVEZ, LORETO CORTEZ, HERMANA DACANAY, MARIETTA DACANAY, MARITES G. DACANAY, MARIO DALAZA, AIDA
DANAO, EVA DANAO, MARGIE DE GUZMAN, NATIVIDAD DE CASTRO, NATIVIDAD DELA CRUZ, LORETA DIFUNTORUM, LOLITA
DISTOR, ADELINA DOMONDON, HELEN DULATRE, IMELDA M. DULATRE, JOSE N. DULATRE, LYDIA A. DULATRE, MERLY DULATRE,
CONCEPCION DULAY, DOMINGA DULAY, ELENA C. DULAY, ERLINDA DULAY, ORPILINA R. DULAY, PABLO A. DULAY, RENATO DULAY,
NORMA EISMA, EDNA ESTOQUE, TEOFILO FAJARDO, ADELINA FONTANILLA, TERESITA FORONDA, MARGARITA FREDELUCES,
RUFINA GALESTE, MARISSA GALI, LUZVIMINDA GAMBOA, CLEOFE GARCIA, ERLINDA GAPASIN, JULITA GATCHALIAN, MARISSA
GATCHALIAN, ALFONSO HALOG, TERESITA IBASAN, RICARDO JUGO, ELMA JULOYA, ELENITA LACUATA, EPIFANIA LACUATA,
SEBASTIAN LACUATA, JOSEFINA LARON, PEDRO LEGASPI, DOLORES LUCENA, FLORDELIZA MABANTA, PERLITA MACAGBA, CESAR
MAGLAYA, ERNA MAGNO, GLORIA MAGNO, BONA P. MAMARIL, CONCEPCION MAMARIL, MARCELINA MAMARIL, TERESITA
MAMARIL, ESTINILIE MANGADANG, HERMOGENES MANGADANG, LETICIA MANGADANG, LYDIA MANGADANG, SHIRLEY
MANGADANG, SONIA MANGADANG, TRINIDAD MANGADANG, VICTORIANO MANGADANG, CRESTITA D. MANZANO, ERLINDA
MAPALO, FABIAN F. MAPANAO, LYDIA MAPILE, RUMO MASON, SUSANA MEDRIANO, DOLORES MILAN, ANTONIO G. MUNAR, MARINA
NINIALBA, CORAZON B. NINOBLE, SUSAN ORIBELLO, JOVENCIO ORLINO, CHARITO ORPILLA, FERDINAND PADILLA, LETECIA
PAGADUAN, BERLINA PALMONES, ARISTON PANIS, PATRICIO PANIS, PRIMO PANIS, REMEDIOS B. PANIS, EMELITO PERALTA,
GLORIA RAMIREZ, DOMINGA RAMOS, GERTRUDES RAMOS, DOROTEO REFUERZO, JR., JUANITA REFUERZO, FLORENCIO REGACHO,
MAGDALENA REBACHO, ADELINA REYES, DELIA REYES, EUFENIA RIVERA, LEONORA RIVERA, ROSEMARIE ROSIMO, VICTORIA
RUALO, DANILO RULLAN, AURORA RULLODA, SERAFICA RULLODA,. ZENAIDO P. RULLODA, IMELDA RUNAS, REMEDIOS SANTOS,
DOMINADOR TABABA, ROSENDA TABAO, JOSEFINA TALENS, REVELINA TORCEDO, RUFINA TUMBANGA, JULITA F. UGAY, BRENDA
VILLANUEVA, GLORIA VILORIA, FLORIDA YARIS, MARGARITA ZARATE, FERNANDO SACDAL, ANICETA MANONGDO and BEATRIZ
UGAY, Petitioners, v. 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.chanrobles virtual lawlibrary
The facts are as follows:chanrob1es virtual 1aw library
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 LUTORCO’s 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 LUTORCO’s 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
Labor Law I
private respondent LUTORCO’s 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 LUTORCO’s 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 NLRC’s resolution via the instant
petition.chanrob1es virtua1 1aw 1ibrary
Petitioners anchor their petition on the following grounds, to wit:chanrob1es virtual 1aw library
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 LUTORCO’s 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 . . . season."cralaw virtua1aw library
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:chanrob1es virtual 1aw library
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 LUTORCO’s 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 LUTORCO’s tobacco re-drying operations in 1993. 23
Moreover, private respondent LUTORCO’s 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
Labor Law I
TABACALERA.
Second, private respondent LUTORCO’s 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:chanrob1es virtua1 1aw 1ibrary
The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity
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 is 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 one’s 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 employees 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 LUTORCO’s 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 respondent’s reliance on the case of Mercado 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 company’s 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,
resolved that question in this wise:chanrob1es virtual 1aw library
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 . . . 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 attorney’s 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 attorney’s fees. Consequently, public respondent NLRC is ORDERED to COMPUTE the total amount of
Labor Law I
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.chanrob1es virtua1 1aw 1ibrary
SO ORDERED.
Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.
SECOND DIVISION
[G.R. NO. 151827. April 29, 2005]
JOSEFINA BENARES, Petitioners, v. Jaime Pancho, Rodolfo Pancho, Jr., Joselito Medalla, Paquito Magallanes, Alicia Magallanes, Evelyn
Magallanes, Violeta Villacampa, Maritess Pancho, Rogelio Pancho and Arnolfo Pancho, Respondents.
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
The antecedents, as narrated by the NLRC, follow.
Complainants alleged to have started working as sugar farm workers on various dates, to wit:
1. Jaime Pancho November 15, 1964
2. Rodolfo Pancho, Jr. February 1, 1975
3. Joselito Medalla November 15, 1964
4. Paquito Magallanes March 10, 1973
5. Felomino Magallanes November 15, 1964
6. Alicia Magallanes January 15, 1964
7. Evelyn Magallanes January 1, 1974
8. Violeta Villacampa December 1, 1979
9. Maritess Pancho December 15, 1985
10. Rogelio Pancho December 1, 1979
11. Arnolfo Pancho February 1, 1975
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.
Labor Law I
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.
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.
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 position papers.
On January 22, 1993, complainant submitted their position paper, while respondent filed its position paper on June 21, 1993.
On March 17, 1994, complainants filed their reply position paper and affidavit. Correspondingly, a rejoinder was filed by respondent on May
16, 1994.
On August 17, 1994, from the Minutes of the scheduled hearing, respondent failed to appear, and that the Office will evaluate the records of
the case whether to conduct a formal trial on the merits or not, and that the corresponding order will be issued.
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 resolution 7 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.
Labor Law I
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,17 respondents 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 - Ã -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
Labor Law I
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, 24 we 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.

Labor Law I
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
Labor Law I
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 13 th 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
Labor Law I
was deemed by the CA to be tantamount to illegal dismissal.
The appellate court found neither “rhyme nor reason in petitioner’s argument that it was the workers themselves who refused to or were
choosy in their work.” As found by the NLRC, the record of this case is “replete with complainants’ persistence and dogged determination in
going back to work.”[6]
The CA likewise concurred with the NLRC’s finding that petitioners were guilty of unfair labor practice.
Hence this Petition.[7]
Issues
Petitioners raise the following issues for the Court’s consideration:
“A. Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were regular employees,
contrary to the clear provisions of Article 280 of the Labor Code, which categorically state that seasonal employees are not
covered by the definition of regular employees under paragraph 1, nor covered under paragraph 2 which refers exclusively to
casual employees who have served for at least one year.
“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 NLRC’s conclusion that private
respondents were illegally dismissed, that petitioner[s were] guilty of unfair labor practice, and that the union be awarded
moral and exemplary damages.”[8]
Consistent with the discussion in petitioners’ Memorandum, we shall take up Items A and B as the first issue and Item C as the second.
The Court’s Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on certiorari of CA decisions.
[9]
Questions of fact are not entertained. [10] The Court is not a trier of facts and, in labor cases, this doctrine applies with greater force.
[11]
Factual questions are for labor tribunals to resolve. [12] In the present case, these have already been threshed out by the NLRC. Its findings
were affirmed by the appellate court.
Contrary to petitioners’ contention, the CA did not err when it held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
“Art. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee
or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.
“An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to
the activity in which he is employed and his employment shall continue while such activity exist.” (Italics supplied)
For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are
seasonal in nature. They must have also been employed only for the duration of one season. The evidence proves the existence of the first, but
not of the second, condition. The fact that respondents -- with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy
Silva -- repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently, petitioners employed
respondents for more than one season. Therefore, the general rule of regular employment is applicable.
Labor Law I
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
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
“x x x [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the x x x season does not
detract from considering them in regular employment since in a litany of cases this Court has already settled that seasonal workers who are
called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely
considered on leave until re-employed.” [14]
The CA did not err when it ruled that Mercado v. NLRC[15] was not applicable to the case at bar. In the earlier case, the workers were required
to perform phases of agricultural work for a definite period of time, after which their services would be available to any other farm owner.
They were not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof. On the
other hand, herein respondents, having performed the same tasks for petitioners every season for several years, are considered the latter’s
regular employees for their respective tasks. Petitioners’ eventual refusal to use their services -- even if they were ready, able and willing to
perform their usual duties whenever these were available -- and hiring of other workers to perform the tasks originally assigned to
respondents amounted to illegal dismissal of the latter.
The Court finds no reason to disturb the CA’s dismissal of what petitioners claim was their valid exercise of a management prerogative. The
sudden changes in work assignments reeked of bad faith. These changes were implemented immediately after respondents had organized
themselves into a union and started demanding collective bargaining. Those who were union members were effectively deprived of their
jobs. Petitioners’ move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.
“Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for a valid and authorized cause.” [16] In the case at bar,
petitioners failed to prove any such cause for the dismissal of respondents who, as discussed above, are regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:
“Indeed, from respondents’ refusal to bargain, to their acts of economic inducements resulting in the promotion of those who withdrew from
the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot but
conclude that respondents did not want a union in their hacienda—a clear interference in the right of the workers to self-organization.” [17]
We uphold the CA’s affirmation of the above findings. Indeed, factual findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdictions, are generally accorded not only respect but even finality. Their findings are binding on the
Supreme Court.[18] Verily, their conclusions are accorded great weight upon appeal, especially when supported by substantial evidence.
[19]
Consequently, the Court is not duty-bound to delve into the accuracy of their factual findings, in the absence of a clear showing that these
were arbitrary and bereft of any rational basis. [20]
The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary damages. [21]
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
Puno, J., (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Labor Law I
FIRST DIVISION
[G.R. NO. 152777 December 9, 2005]
LOLITA R. LACUESTA, Petitioner, v. 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 Decision 3 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. 5 Thus, 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

Labor Law I
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.
Labor Law I
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 Resolutiondated February 21, 2002 are AFFIRMED.
SO ORDERED.
FIRST DIVISION
[G.R. NO. 159828 : April 19, 2006]
KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO)-CFW LOCAL 245, Petitioner, v. 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 Decision 1 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.
Pursuant to the provisions of the MOA, both parties identified 64 vacant regular positions that may be occupied by the existing casual,
contractual or agency employees who have been in 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, three 4 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
Labor Law I
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 Incentive DESCRIBED 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.
Labor Law I
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. v. 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.
v. 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."
Labor Law I
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."Ï‚Î·Î±Ã ±rÎ¿blÎµÅ ¡ Î½Î¹râ € Ï…Î±l lÎ±Ï‰
lÎ¹brÎ±rÃ ¿
"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; andcralawlibrary
(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
Labor Law I
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. v. 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) v. 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 v. 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 - Ã -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 v. 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.
Labor Law I
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 - Ã -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 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.Ï‚Î·Î±Ã ±rÎ¿blÎµÅ ¡ Î½Î¹râ € Ï…Î±l lÎ±Ï‰ lÎ¹brÎ±rÃ ¿
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
Labor Law I
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 x 9
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.
Labor Law I
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.
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 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.

Amelia J. Delos Santos vs. Jebsen Maritime, Inc. G.R. No. 154185, November 22, 2005 Decision Garcia, J.

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Amelia J. Delos Santos vs. Jebsen Maritime, Inc. G.R. No. 154185, November 22, 2005 Decision Garcia, J.

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Labor Law I

Status of Employment Cases

AMELIA J. DELOS SANTOS VS. JEBSEN MARITIME, INC.

III. IN DELETING THE AWARD OF SICKNESS ALLOWANCE IN THE AMOUNT OF US$2,452.00.

The petition is devoid of merit.

Contract extension or continuation by mutual consent appears to be petitioner's thesis.

We are not persuaded.

[G.R. NO. 152427 : August 9, 2005]

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

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 Center5

Petitioner's Motion for Reconsideration was denied.8

Article 280 of the Labor Code states:

Additionally, Article 277(b) of the Labor Code provides that

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

UNIVERSAL ROBINA CORPORATION AND/OR RANDY GREGORIO, PETITIONERS, VS. BENITO CATAPANG, CARLOS ARARAO, ALVIN

CALLEJO, SR., J.:

1. Reynaldo Ararao P113,703.20

2. Carlos Ararao P100,372.48

3. Resty Alcoran P100,372.48

4. Richard Coronado P113,703.20

5. Quirino Platero P113,703.20

7. Jose Loria, Jr. P100,372.48

9. Jonathan Villanueva P113,703.20

10. Baltazar Villanueva P113,703.20

11. Victoriano Loria P144,881.10

12. Roderick Pangao P100,372.48

13. Lito Cabrera P113,703.20

14. Elmer Hiling P113,703.20

15. Jaime Villegas P113,703.20

16. Angelito Conchada P119,192.20

17. Juan Aristado P113,703.20

18. Joel Villanueva P113,703.20

19. Ben Cervas P113,703.20

20. Ruel Marikit P113,703.20

21. Ireneo Comendador P113,703.20

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

1. Alvin Alcantara - P129,126.40

2. Onofre Casano - P106,917.20

3. Joseph Chuidian - P104,165.10

4. Ramon Joyosa - P128,029.20

5. Pablito Redondo - P105,409.20

6. Ramil Roxas - P109,330.00

7. Resty Salazar - P105,296.10

8. Noel Trinidad - P108,312.10

9. Felicisimo Varela - P119,358.20

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

G.R. No. 79869 September 5, 1991

Servillano S. Santillan for petitioners.

From 1962-1963 — P1.50

The petition is not impressed with merit.

The questioned decision of the Labor Arbiter reads:

Article 280 of the Labor Code reads in full:

Melencio-Herrera (Chairperson), Paras and Regalado, JJ., concur.

[G.R. No. 118475. November 29, 2000.]

The facts are as follows:chanrob1es virtual 1aw library