Liganza v.

RBL Shipyard Corporation

FACTS:

After working as a carpenter for respondent since August 1991, petitioners employment was terminated on 30 October
1999. This prompted petitioner to file a complaint for illegal dismissal, alleging that on said date he was verbally
informed that he was already terminated from employment and barred from entering the premises. On the same
occasion, he was told to look for another job. Thus, he claimed that he was unceremoniously terminated from
employment without any valid or authorized cause. On the other hand, respondent insisted that petitioner was a mere
project employee who was terminated upon completion of the project for which he was hired.

Petitioner claims he is a regular employee since he worked for respondent continuously and without interruption from
13 August 1991 up to 30 October 1999 and that his work as a carpenter was necessary and desirable to the latters usual
business of shipbuilding and repair. He asserts that when he was hired by respondent in 1991, there was no
employment contract fixing a definite period or duration of his engagement, and save for the contract covering the
period 20 September 1999 to 19 March 2000, respondent had been unable to show the other project employment
contracts ever since petitioner started working for the company. Furthermore, respondent failed to file as many
termination reports as there are completed projects involving petitioner, he adds. On the other hand, respondent insists
that petitioner is a project employee as evidenced by the project employment contracts it signed with him and
employee termination reports it submitted to the DOLE.

The Labor Arbiter: Petitioner is a regular employee, NLRC – Project, CA - Project

ISSUE/S:
1. Whether or not petitioner is a project employee , Whether or not his termination was illegal.

HELD: The petition must be granted.

1. Whether or not petitioner is a project employee. NO.

A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the duration of the season." Before an
employee hired on a per project basis can be dismissed, a report must be made to the nearest employment office of the
termination of the services of the workers every time it completed a project, pursuant to Policy Instruction No. 20.

While the appropriate evidence to show that a person is a project employee is the employment contract specifying
the project and the duration of such project, the existence of such contract is not always conclusive of the nature of
ones employment. In the instant case, respondent seeks to prove the status of petitioners employment through four (4)
employment contracts covering a period of only two (2) years to declare petitioner as a project employee.

All that respondent submitted were four (4) contracts Respondent failed to present the contracts purportedly
covering petitioners employment from 1991 to July 1997, spanning six (6) years of the total eight (8) years of his
employment. To explain its failure in this regard, respondent claims that the records and contracts covering said period
were destroyed by rains and flashfloods that hit the companys office. The four employment contracts are not sufficient
to reach the conclusion that petitioner was, and has been, a project employee earlier since 1991.

As respondent has affirmed, it executes three (3)-month or six (6)- month contracts with its so-called project
employees. Except for respondents claim that petitioner and its other project employees are free to seek work after the
termination of their contracts, no other proof was shown to this effect. In fact, from the very scant record of petitioners
employment, it may be inferred that the contracts entered into by petitioner could not have been spaced so far apart as
to allow petitioner seek lucrative employment elsewhere.

Petitioner, as carpenter, was tasked to make and repair cabinet, flooring, quarters, ceiling, windows, doors, kitchen and
other parts of the vessel that needs to be repaired. As such, petitioners work was necessary or desirable to respondents
business. However, unlike in Sandoval where the complaining employees were hired for only one project lasting for
three (3) months at most, petitioner in this case was employed by respondent continuously from 1991 to 1999.
Assuming, without granting that petitioner was initially hired for specific projects or undertakings, the repeated re-hiring
and continuing need for his services for over eight (8) years have undeniably made him a regular employee.

Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the
employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the
usual business or trade of the employer. Here, respondent had been a project employee several times over . His
employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of
petitioners business. 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.

All considered, there are serious doubts in the evidence on record that petitioner is a project employee, or that he was
terminated for just cause. These doubts shall be resolved in favor of petitioner, in line with the policy of the law to afford
protection to labor and construe doubts in favor of labor.

Employment ceases to be co-terminous with specific projects when the employee is continuously rehired due to the
demands of employers business and re-engaged for many more projects without interruption. In Maraguinot, Jr. v.
NLRC, the Court ruled that once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital,
necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a
regular employee, pursuant to Article 280 of the Labor Code and jurisprudence.

2. Whether or not his termination was illegal. YES

Even assuming that petitioner is a project employee, respondent failed to prove that his termination was for a
just and valid cause. While it is true that the employment contract states that the contract ends upon a specific date, or
upon completion of the project, respondent failed to prove that the last project was indeed completed so as to justify
petitioners termination from employment.

In termination cases, the burden of proof rests on the employer to show that the dismissal is for a just cause.
[18] Thus, employers who hire project employees are mandated to state and, once its veracity is challenged, to prove
the actual basis for the latters dismissal.[19] Respondent could have easily proved that the project or phase for which
petitioner was hired has already been completed. A certificate from the owner of the vessel serviced by the company,
pictures perhaps, of the work accomplished, and other proof of completion could have been procured by respondent.
However, all that we have is respondents self-serving assertion that the project has been completed.

Hanjin Heavy Industries v. Ibanez

Clause 3.3(a) of Department Order No. 19, Series of 1993:

a) Project employees whose aggregate period of continuous employment in a construction company is at least
one year shall be considered regular employees, in the absence of a "day certain" agreed upon by the parties for the
termination of their relationship. Project employees who have become regular shall be entitled to separation pay.
 Two of the indicators of project employment, as prescribed under Section 2.2(e) and (f) of Department Order
No. 19, Series of 1993, entitled Guidelines Governing the Employment of Workers in the Construction Industry, issued
by the DOLE:
2.2 Indicators of project employment. - Either one or more of the following circumstances, among others, may be
considered as indicators that an employee is a project employee.
(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.
(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement
and is made clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection with the particular project/undertaking for
which he is engaged.
(d) The employee, while not employed and awaiting engagement, is free to offer his services to any other
employer.
(e) The termination of his employment in the particular project/undertaking is reported to the Department of
Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date
of his separation from work, using the prescribed form on employees' terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee
as practiced by most construction companies. (Emphasis provided.)

Department Order No. 19, Series of 1993, provides that in the absence of an undertaking that the completion
bonus will be paid to the employee, as in this case, the employee may be considered a non-project employee, to wit:
3.4 Completion of the project. Project employees who are separated from work as a result of the completion of
the project or any phase thereof in which they are employed are entitled to the pro-rata completion bonus if there is an
undertaking by for the grant of such bonus. An undertaking by the employer to pay a completion bonus shall be an
indicator that an employee is a project employee. Where there is no such undertaking, the employee may be considered
a non-project employee. The pro-rata completion bonus may be based on the industry practice which is at least the
employee's one-half (1/2) month salary for every 12 months of service and may be put into effect for any project bid (in
case of bid projects) or tender submitted (in case of negotiated projects) thirty (30) days from the date of issuances of
these Guidelines.

FACTS:

Petitioner HANJIN is a foreign company duly registered with the Securities and Exchange Commission to engage in
the construction business in the Philippines. Petitioners Hak Kon Kim and Jhunie Adajar were employed as Project
Director and Supervisor, respectively, by HANJIN.

On 11 April 2002, respondents Felicito Ibañez, Aligwas Carolino, Elmer Gacula, Enrique Dagotdot, Ruel Calda, and
four other co-workers filed a complaint before the NLRCfor illegal dismissal with prayer for reinstatement and full
backwages against petitioners. In their Position Paper dated, respondents alleged that HANJIN hired them for various
positions on different dates.
Respondents:
 stated that their tasks were usual and necessary or desirable in the usual business or trade of HANJIN.
Respondents additionally averred that they were employed as members of a work pool from which HANJIN
draws the workers to be dispatched to its various construction projects; with the exception of Ruel Calda, who
as a warehouseman was required to work in HANJIN's main office. Among the various construction projects to
which they were supposedly assigned, respondents named the North Harbor project in 1992-1994; Manila
International Port in 1994-1996; Batangas Port in 1996-1998; the Batangas Pier, and La Mesa Dam.
  On 15 April 2002, Hanjin dismissed respondents from employment. Respondents claimed that at the time of
their dismissal, HANJIN had several construction projects that were still in progress, such as Metro Rail Transit
(MRT) II and MRT III, and continued to hire employees to fill the positions vacated by the respondents.

Petitioners:
 denied the respondents' allegations. They maintained that respondents were hired as project employees for the
construction of the LRT/MRT Line 2 Package 2 and 3 Project. HANJIN and respondents purportedly executed
contracts of employment, in which it was clearly stipulated that the respondents were to be hired as project
employees for a period of only three months, but that the contracts may be renewed. However, petitioners
failed to furnish the Labor Arbiter a copy of said contracts of employment.
 asserted that respondents were duly informed of HANJIN's policies, rules and regulations, as well as the terms of
their contracts. Copies of the employees' rules and regulations were posted on the bulletin boards of all HANJIN
campsite offices.
 Petitioners attached copies of the Quitclaims, executed by the respondents, which uniformly stated that the
latter received all wages and benefits that were due them and released HANJIN and its representatives from any
claims in connection with their employment.

LA: found merit in the respondents' complaint and declared that they were regular employees who had been
dismissed without just and valid causes and without due process.
NLRC: reversed the Labor Arbiter's Decision and pronounced that the respondents were project employees who
were legally terminated from employment. Overruled the Labor Arbiter's award of moral and exemplary damages.
CA: reversed the NLRC Decision. CA ruled that respondents were regular employees and upheld the Labor
Arbiter's finding that they were illegally dismissed. However, adopted the NLRC's deletion of the award of damages.

ISSUE/S:

1. Whether or not petitioners are regular employees 2.)Whether or not petitioners are illegally dismissed

HELD: The Petition is without merit.

1. Whether or not petitioners are regular employees. YES

Due to petitioners' failure to adduce any evidence showing that petitioners were project employees who had been
informed of the duration and scope of their employment, they were unable to discharge the burden of proof required to
establish that respondents' dismissal was legal and valid. Furthermore, it is a well-settled doctrine that if doubts exist
between the evidence presented by the employer and that by the employee, the scales of justice must be tilted in favor of
the latter. For these reasons, respondents are to be considered regular employees of HANJIN.

From Article 280 of the Labor Code, the principal test for determining whether particular employees are properly
characterized as "project employees" as distinguished from "regular employees" is whether or not the project employees
were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time
the employees were engaged for that project.

The length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon them
regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction
workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the
company, the scope and duration of which has been determined and made known to the employees at the time of the
employment, are properly treated as project employees and their services may be lawfully terminated upon the completion
of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered
project employees.
  Abesco Construction and Development Corporation v. Ramirez: Court considered it crucial that the
employees were informed of their status as project employees. Such duration, as well as the particular
work/service to be performed, is defined in an employment agreement and is made clear to the employees at the
time of hiring.

In this case, petitioners did not have that kind of agreement with respondents. Neither did they inform respondents of
the nature of the latters' work at the time of hiring. Hence, for failure of petitioners to substantiate their claim that
respondents were project employees, we are constrained to declare them as regular employees.

 In Caramol v. National Labor Relations Commission and Salinas, Jr. v. National Labor Relations Commission ,
the Court markedly stressed the importance of the employees' knowing consent to being engaged as project
employees when it clarified that "there is no question that stipulation on employment contract providing for a
fixed period of employment such as `project-to-project' contract is valid provided the period was agreed upon
knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent x x x."

Petitioners' failure to produce respondents' contracts of employment was already noted. Respondents denied
having executed such contracts with HANJIN. While the absence of a written contract does not automatically confer
regular status, it has been construed by this Court as a red flag in cases involving the question of whether the workers
concerned are regular or project employees.

Even though the absence of a written contract does not by itself grant regular status to respondents, such a contract
is evidence that respondents were informed of the duration and scope of their work and their status as project
employees. In this case, where no other evidence was offered, the absence of an employment contract puts into serious
question whether the employees were properly informed at the onset of their employment status as project employees.

Absent any other proof that the project employees were informed of their status as such, it will be presumed that
they are regular employees in accordance with Clause 3.3(a) of Department Order No. 19, Series of 1993, which states
that:

a) Project employees whose aggregate period of continuous employment in a construction company is at least one
year shall be considered regular employees, in the absence of a "day certain" agreed upon by the parties for the
termination of their relationship. Project employees who have become regular shall be entitled to separation pay.

A "day" as used herein, is understood to be that which must necessarily come, although it may not be known exactly
when. This means that where the final completion of a project or phase thereof is in fact determinable and the expected
completion is made known to the employee, such project employee may not be considered regular, notwithstanding the
one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments
in the same project or phase of the project.

Petitioners call attention to the fact that they complied with two of the indicators of project employment, as
prescribed under Section 2.2(e) and (f) of Department Order No. 19, Series of 1993, entitled Guidelines Governing the
Employment of Workers in the Construction Industry, issued by the DOLE:

2.2 Indicators of project employment. - Either one or more of the following circumstances, among others, may be
considered as indicators that an employee is a project employee.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor
and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of
his separation from work, using the prescribed form on employees' terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as
practiced by most construction companies. (Emphasis provided.)
 Other bases: Petitioners insist that the payment to the respondents of a completion bonus indicates that
respondents were project employees. Petitioners failed to present evidence showing that they undertook to pay
respondents such a bonus upon the completion of the project, as provided under Section 2.2(f) of Department Order
No. 19, Series of 1993. Petitioners did not even allege how the "completion bonus" was to be computed or the
conditions that must be fulfilled before it was to be given.

A completion bonus, if paid as a mere afterthought, cannot be used to determine whether or not the employment
was regular or merely for a project. Otherwise, an employer may defeat the workers' security of tenure by paying them
a completion bonus at any time it is inclined to unjustly dismiss them.

Department Order No. 19, Series of 1993, provides that in the absence of an undertaking that the completion bonus
will be paid to the employee, as in this case, the employee may be considered a non-project employee, to wit:

3.4 Completion of the project. Project employees who are separated from work as a result of the completion of the
project or any phase thereof in which they are employed are entitled to the pro-rata completion bonus if there is an
undertaking by for the grant of such bonus. An undertaking by the employer to pay a completion bonus shall be an
indicator that an employee is a project employee. Where there is no such undertaking, the employee may be
considered a non-project employee. The pro-rata completion bonus may be based on the industry practice which is
at least the employee's one-half (1/2) month salary for every 12 months of service and may be put into effect for
any project bid (in case of bid projects) or tender submitted (in case of negotiated projects) thirty (30) days from the
date of issuances of these Guidelines.

Furthermore, after examining the payroll documents submitted by petitioners, this Court finds that the payments
termed as "completion bonus" are not the completion bonus paid in connection with the termination of the project.
First of all, the period from 4 April 2002 to 20 April 2002, as stated in the payrolls, bears no relevance to a completion
bonus. A completion bonus is paid in connection with the completion of the project, and is not based on a fifteen-day
period. Secondly, the amount paid to each employee as his completion bonus was uniformly equivalent to his fifteen-
day wages, without consideration of the number of years of service rendered. Section 3.4 of Department Order No. 19,
Series of 1993, provides that based on industry practice, the completion bonus is at least the employee's one-half month
salary for every twelve months of service.

Finally, the Quitclaims which the respondents signed cannot bar them from demanding what is legally due them as
regular employees. As a rule, quitclaims and waivers or releases are looked upon with disfavor and frowned upon as
contrary to public policy. They are thus ineffective to bar claims for the full measure of a worker's legal rights,
particularly when the following conditions are applicable: 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.

To determine whether the Quitclaims signed by respondents are valid, one important factor that must be taken into
account is the consideration accepted by respondents; the amount must constitute a reasonable settlement equivalent
to the full measure of their legal rights. In this case, the Quitclaims signed by the respondents do not appear to have
been made for valuable consideration.

Respondents, who are regular employees, are entitled to backwages and separation pay and, therefore, the
Quitclaims which they signed cannot prevent them from seeking claims to which they are entitled.

2. Whether or not petitioners are illegally dismissed. YES

Records failed to show that HANJIN afforded respondents, as regular employees, due process prior to their
dismissal, through the twin requirements of notice and hearing. Respondents were not served notices informing them of
the particular acts for which their dismissal was sought. Nor were they required to give their side regarding the charges
made against them. Certainly, the respondents' dismissal was not carried out in accordance with law and was, therefore,
illegal.
 PNOC-Energy Development Corporation v. NLRC

FACTS:
Petitioner PNOC-Energy Development Corporation is a government-owned and controlled corporation engaged in the
exploration, development, and utilization of energy. It undertakes several projects in areas where geothermal energy
has been discovered. Aside from its projects in Negros Oriental, petitioner also had geothermal projects in Negros
Occidental, Leyte, Albay, Sorsogon, and North Cotabato.

Petitioners Southern Negros Geothermal Production Field in Negros Oriental is divided into two phases: Palinpinon I
(PAL I) and Palinpinon II (PAL II). To augment its manpower requirement occasioned by the increased activities in the
development of PAL II, petitioner hired the following employees in the Administration and Maintenance Section:
Leonora Torres, Rosela Calimpong, Arnel Amor, Wilson Nuay, Roberto Renzal and Alejandro Tabaera. The
termination/expiration of their respective employment were specified in their initial employment contracts, which,
however, were renewed and extended on their respective expiry dates.

Later on, petitioner submitted reports to the Department of Labor and Employment (DOLE) Regional Sub-Branch No. VII
in Dumaguete City, stating that six of its employees were being terminated. They thereafter furnished the employees
uniformly worded notices of termination, stating that they were being terminated from employment effective June 30,
1998 due to the substantial completion of the civil works phase of PAL II.

The six employees filed before the National Labor Relations Commission (NLRC) a complaint for illegal dismissal against
petitioner. They averred that they had rendered continuous and satisfactory services from the dates of their respective
employment until illegally dismissed on June 30, 1998. They added their dismissal from employment was a clear case of
union busting for they had previously sought union membership and actually filed a notice of strike.

Petitioner contended that respondents were contractual employees; as such, they cannot claim to have been illegally
dismissed because upon the expiration of the term of the contract or the completion of the project, their employer-
employee relationship also ended.

Labor Arbiter: Dismissed the complaint for lack of legal and factual basis. Respondents appealed to the NLRC, which
reversed the ruling of the Labor Arbiter. CA: affirmed NLRC’s decision
ISSUE/S:
1) W/N respondents were project employees or regular employees
2) W/N they were illegally dismissed from employment

HELD: PETITION DISMISSED.

1) Petitioners were regular employees.

The applicable formula to ascertain whether an employment should be considered regular or non-regular is the
reasonable connection between the particular activity performed by the employee in relation to the usual business or
trade of the employer.

As defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion
or termination of such project or undertaking has been determined at the time of the engagement of the employee.
The alleged projects stated in the employment contracts were either too vague or imprecise to be considered as the
specific undertaking contemplated by law. Petitioners act of repeatedly and continuously hiring respondents to do the
same kind of work belies its contention that respondents were hired for a specific project or undertaking. The absence
of a definite duration for the project/s has led the Court to conclude that respondents are, in fact, regular employees.

In Filipinas Pre-Fabricated Building Systems (Filsystems), Inc. v. Puente, the Court ruled that the length of service of a
project employee is not the controlling test of employment tenure but whether or not 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.

Respondents had been project employees several times over. Their employment ceased to be coterminous with specific
projects when they were repeatedly re-hired by petitioner. 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.

2) Yes. Petitioners were illegally dismissed from employment.

As regular workers, respondents are entitled to security of tenure under Article 279 of the Labor Code and can only be
dismissed for a just or authorized cause. Article 279 of the Labor Code. The notices of termination indicated that
respondents services were terminated due to the completion of the project. However, this allegation is contrary to the
statement of petitioner in some of its pleadings that the project was merely substantially completed.

Since respondents were illegally dismissed from work, they are entitled to reinstatement without loss of seniority rights,
full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the time their
compensation was withheld from them up to the time of their actual reinstatement, pursuant to Article 279 of the Labor
Code.

Filsystems v. Puente

FACTS:
Respondent avers that he started working with Filsystems, Inc., a corporation engaged in construction business, on June
12, 1989. he was initially hired by petitioner as an ‘installer’. He was later promoted to mobile crane operator and was
stationed at the company premises at No. 69 Industria Road, Bagumbayan, Quezon City. He also argues that his work
was not dependent on the completion or termination of any project; that since his work was not dependent on any
project, his employment with the petitioner company was continuous and without interruption for the past ten (10)
years; On October 1, 1999, he was dismissed from his employment allegedly because he was a project employee. He
filed a complaint for illegal dismissal against the petitioner company on November 18, 1999.

The petitioner company however claims that complainant was hired as a project employee in the company’s various
projects; that his employment contracts showed that he was a project worker with specific project assignments; that
after completion of each project assignment, his employment was likewise terminated and the same was
correspondingly reported to the DOLE.

LA , NLRC - dismissed . Upon appeal to CA, The Court of Appeals reversed the NLRC and the labor arbiter stating that the
employment contracts signed by Puente do not have the specified duration for each project contrary to the provision of
Article 280 of the Labor Code, nor did petitioner work in the project sites, but had always been assigned at the company
plant attending to the maintenance of all mobile cranes of the company, performing tasks vital and desirable in the
employer’s usual business for ten (10) continuous years. The CA concluded that respondent was a regular employee of
petitioners.

ISSUE/S:
1) W/N Puente is a regular employee
2) W/N he is entitled to reinstatement with full back wages

HELD: No. Puente is a project employee.

With particular reference to the construction industry, to which Petitioner Filsystems belongs, Department (of Labor and
Employment) Order No. 19,11 Series of 1993, states:

2.1 Classification of employees. – The employees in the construction industry are generally categorized as a)
project employees and b) non-project employees. Project employees are those employed in connection with a
particular construction project or phase thereof and whose employment is co-terminous with each project or
phase of the project to which they are assigned.

xxxxxxxxx

2.2 Indicators of project employment. – Either one or more of the following circumstances, among other, may
be considered as indicators that an employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement
and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular project/undertaking for
which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his services to any other
employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of
Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following
the date of his separation from work, using the prescribed form on employees’
terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project
employee as practiced by most construction companies.

This Court has ruled that "the length of service of a project employee is not the controlling test of employment tenure
but whether or not ‘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.’"

In the present case, the contracts of employment  of Puente attest to the fact that he was hired for specific projects. His
employment was coterminous with the completion of the projects for which he had been hired. Those contracts
expressly provided that his tenure of employment depended on the duration of any phase of the project or on the
completion of the construction projects. Furthermore, petitioners regularly submitted to the labor department reports
of the termination of services of project workers. Such compliance with the reportorial requirement confirms that
respondent was a project employee.
That his employment contract does not mention particular dates that establish the specific duration of the project does
not preclude his classification as a project employee. This fact is clear from the provisions of Clause 3.3(a) of Department
Order No. 19.

a) Project employees whose aggregate period of continuous employment in a construction company is at least one year
shall be considered regular employees, in the absence of a "day certain" agreed upon by the parties for the termination
of their relationship. Project employees who have become regular shall be entitled to separation pay.

A "day" as used herein, is understood to be that which must necessarily come, although is may not be known exactly
when. This means that where the final completion of a project or phase thereof is in fact determinable and the expected
completion is made known to the employee, such project employee may not be considered regular, notwithstanding the
one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments
in the same project or phase of the object

Evidently, although the employment contract did not state a particular date, it did specify that the termination of the
parties’ employment relationship was to be on a "day certain" -- the day when the phase of work termed "Lifting &
Hauling of Materials" for the "World Finance Plaza" project would be completed. Thus, respondent cannot be
considered to have been a regular employee. He was a project employee.

That he was employed with Petitioner Filsystems for ten years in various projects did not ipso facto make him a regular
employee, considering that the definition of regular employment in Article 280 of the Labor Code makes a specific
exception with respect to project employment. The mere rehiring of respondent on a project-to-project basis did not
confer upon him regular employment status. "The practice was dictated by the practical consideration that experienced
construction workers are more preferred." It did not change his status as a project employee.

Yes. He is entitled to reinstatement with full backwages

In termination cases, the burden of proving that an employee has been lawfully dismissed lies with the employer. Thus,
employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual
basis for the latter’s dismissal.

In the present case, petitioners claim that respondent’s services were terminated due to the completion of the
project.There is no allegation or proof, however, that the World Finance Plaza project -- or the phase of work therein to
which respondent had been assigned -- was already completed by October 1, 1999, the date when he was dismissed.
The inescapable presumption is that his services were terminated for no valid cause prior to the expiration of the period
of his employment; hence, the termination was illegal. Reinstatement with full back wages, inclusive of allowances and
other benefits or their monetary equivalents -- computed from the date of his dismissal until his reinstatement -- is thus
in order.

However, if indeed the World Finance Plaza project has already been completed during the pendency of this suit, then
respondent -- being a project employee -- can no longer be reinstated.Instead, he shall entitled to the payment of his
salary and other benefits corresponding to the unexpired portion of his employment, specifically from the time of the
termination of his employment on October 1, 1999, until the date of the completion of the World Finance Plaza project.
 E. GANZON, INC. (EGI) and EULALIO GANZON v Ando

On May 16, 2011, respondent Fortunato B. Ando, Jr. (Ando) filed a complaint against petitioner E. Ganzon, Inc. (EGI) and
its President, Eulalio Ganzon, for illegal dismissal and money claims for: underpayment of salary, overtime pay, and 13th
month pay; non-payment of holiday pay and service incentive leave; illegal deduction; and attorney’s fees.
 He alleged that he was a regular employee working as a finishing carpenter in the construction business of EGI;
he was repeatedly hired from January 21, 2010 until April 30, 2011 when he was terminated without prior notice
and hearing; his daily salary of ₱292.00 was below the amount required by law; and wage deductions were
made without his consent, such as rent for the barracks located in the job site and payment for insurance
premium.
 The Labor Arbiter declared Ando a project employee of EGI but granted some of his money claims.
 Both parties elevated the case to the NLRC, which dismissed the appeals filed and affirmed in toto the Decision
of the Labor Arbiter. Ando filed a motion for reconsideration, but it was denied. Still aggrieved, he filed a Rule 65
petition before the CA, which granted the same. CA’s decision:
ISSUE/S:
3) W/N the petitioner is a project employee or a regular employee of the respondent company.

HELD: PROJECT Employee.

The terms regular, project, seasonal and casual employment are taken from Article 280  of the Labor Code, as
22

amended. In addition, Brent School, Inc. v. Zamora  ruled that fixed-term employment contract is not per se illegal
23

or against public policy.

The activities of project employees may or may not be usually necessary or desirable in the usual business or
trade of the employer.
As the assigned project or phase begins and ends at determined or determinable times, the services of the
project employee may be lawfully terminated at its completion.
In this case, the three project employment contracts signed by Ando explicitly stipulated the agreement "to engage
[his] services as a Project Worker"
“[His] services with the Project will end upon completion of the phase of work for which [he was] hired
for and is tentatively set on (written date). However, this could be extended or shortened depending on
the work phasing.”
Records show that Ando's contracts for Bahay Pamulinawen Project were extended until December 31,
201032(from the original stated date of September 30, 2010) and shortened to February 15, 201133 (from the
original stated date of February 28, 2011) while his services in West Insula Project was extended until April 30,
201134 (from the original stated date of March 31, 2011). These notwithstanding, he is still considered as a project,
not regular, employee of EGI.
Here, Ando was adequately notified of his employment status at the time his services were engaged by EGI for the
Bahay Pamulinawen and the West Insula Projects. The contracts he signed consistently stipulated that his services
as a project worker were being sought. There was an informed consent to be engaged as such. His consent was not
vitiated. As a matter of fact, Ando did not even allege that force, duress or improper pressure were used against him
in order to agree. His being a carpenter does not suffice.
There was no attempt to frustrate Ando's security of tenure. His employment was for a specific project or
undertaking because the nature of EGI's business is one which will not allow it to employ workers for an indefinite
period. As a corporation engaged in construction and residential projects, EGI depends for its business on the
contracts it is able to obtain. Since work depends on the availability of such contracts, necessarily the duration of the
employment of its work force is not permanent but coterminous with the projects to which they are assigned and
from whose payrolls they are paid. It would be extremely burdensome for EGI as an employer if it would have to
carry them as permanent employees and pay them wages even if there are no projects for them to work on.

Project employment should not be confused and interchanged with fixed-term employment:

x x x While the former requires a project as restrictively defined above, the duration of a fixed-term employment
agreed upon by the parties may be any day certain, which is understood to be "that which must necessarily come
although it may not be known when." The decisive determinant in fixed-term employment is not the activity that the
employee is called upon to perform but the day certain agreed upon by the parties for the commencement and
termination of the employment relationship. 40

The decisive determinant in project employment is the activity that the employee is called upon to perform and not
the day certain agreed upon by the parties for the commencement and termination of the employment relationship.
Indeed, in Filsystems, Inc. v. Puente,  We even ruled that an employment contract that does not mention particular
41

dates that establish the specific duration of the project does not preclude one's classification as a project employee.

In this case, the duration of the specific/identified undertaking for which Ando was engaged was reasonably
determinable. Although the employment contract provided that the stated date may be "extended or shortened
depending on the work phasing," it specified the termination of the parties' employment relationship on a "day
certain," which is "upon completion of the phase of work for which [he was] hired for.

The duration of the specific/identified undertaking for which Ando was engaged was reasonably determinable.
Although the employment contract provided that the stated date may be "extended or shortened depending on the
work phasing," it specified the termination of the parties' employment relationship on a "day certain," which is "upon
completion of the phase of work for which [he was] hired for."
Where the final completion of a project or phase thereof is in fact determinable and the expected completion is
made known to the employee, such project employee may not be considered regular, notwithstanding the one-year
duration of employment in the project or phase thereof or the one-year duration of two or more employments in the
same project or phase of the project.
When the projects were completed, he was validly terminated from employment since his engagement was
coterminous thereto.
The fact that Ando was required to render services necessary or desirable in the operation of EGI's business for
more than a year does not in any way impair the validity of his project employment contracts.
Finally, the second paragraph of Article 280, stating that an employee who has rendered service for at least one (1)
year shall be considered a regular employee, is applicable only to a casual employee and not to a project or a
regular employee referred to in paragraph one thereof.

NOTES:
 The terms regular, project, seasonal and casual employment are taken from Article 280 of the Labor Code, as
amended. In addition, Brent School, Inc. v. Zamora ruled that fixed-term employment contract is not per
se illegal or against public policy.Under Art. 280, project employment is one which "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." To be considered as project-based, the employer has the burden of proof to
show that: (a) the employee was assigned to carry out a specific project or undertaking and (b) the duration and
scope of which were specified at the time the employee was engaged for such project or undertaking. It must be
proved that the particular work/service to be performed as well as its duration are defined in the employment
agreement and made clear to the employee who was informed thereof at the time of hiring.
 The activities of project employees may or may not be usually necessary or desirable in the usual business or
trade of the employer. In ALU-TUCP v. National Labor Relations Commission, two (2) categories of project
employees were distinguished:
In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2)
distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within
the regular or usual business of the employer company, but which is distinct and separate, and identifiable as
such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or
determinable times. The typical example of this first type of project is a particular construction job or project of
a construction company. x x x. Employees who are hired for the carrying out of one of these separate projects,
the scope and duration of which has been determined and made known to the employees at the time of
employment, are properly treated as "project employees," and their services may be lawfully terminated at
completion of the project.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the
ordinary or regular business operations of the employer. The job or undertaking also begins and ends at
determined or determinable times. x x x
As the assigned project or phase begins and ends at determined or determinable times, the services of the
project employee may be lawfully terminated at its completion.
 Project employment should not be confused and interchanged with fixed-term employment:
x x x While the former requires a project as restrictively defined above, the duration of a fixed-term employment
agreed upon by the parties may be any day certain, which is understood to be "that which must necessarily
come although it may not be known when." The decisive determinant in fixed-term employment is not the
activity that the employee is called upon to perform but the day certain agreed upon by the parties for the
commencement and termination of the employment relationship.
The decisive determinant in project employment is the activity that the employee is called upon to perform and
not the day certain agreed upon by the parties for the commencement and termination of the employment
relationship. Indeed, in Filsystems, Inc. v. Puente, We even ruled that an employment contract that does not
mention particular dates that establish the specific duration of the project does not preclude one's classification
as a project employee.

Mercado v NLRC

Facts: 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 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; 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.

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.
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

NLRC- Affirmed

Issue: whether or not petitioners are regular and permanent farm workers and therefore entitled to the benefits which they
pray for

Held: NO. 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 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.

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.

It is within the prerogative of respondent Aurora Cruz either to take in the petitioners to do further work or not after any
single phase of agricultural work has been completed by them. We are of the opinion that the real cause which triggered the
filing of this complaint by the petitioners who are related to one another, either by consanguinity or affinity was due to the
filing of a criminal complaint by the respondent Aurora Cruz against Reynaldo Mercado, son of spouses Fortunato Mercado,
Sr. and Rosa Mercado

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 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.

Cocomangas v Visca

Facts: The present controversy stemmed from five individual complaints3 for illegal

dismissal filed on June 15, 1999 by Federico F. Visca (Visca), Johnny G. Barredo, Ronald Q. Tibus, Richard G. Visca and
Raffie G. Visca (respondents) against Cocomangas Hotel Beach Resort and/or its owner-manager, Susan Munro
(petitioners) before Sub-Regional Arbitration Branch No. VI of the National Labor Relations Commission (NLRC) in Kalibo,
Aklan.

respondents alleged that they were regular employees of petitioners, tasked with the maintenance and repair of the resort
facilities; on May 8, 1999, Maria Nida Iñigo-Tañala, the Front Desk Officer/Sales Manager, informed them not to report for
work since the ongoing constructions and repairs would be temporarily suspended because they caused irritation and
annoyance to the resort's guests; as instructed, they did not report for work the succeeding days; John Munro, husband of
petitioner Susan Munro, subsequently visited respondent foreman Visca and informed him that the work suspension was
due to budgetary constraints; when respondent Visca later discovered that four new workers were hired to do
respondents' tasks, he confronted petitioner Munro who explained that respondents' resumption of work was not possible
due to budgetary constraints; when not less than ten workers were subsequently hired by petitioners to do repairs in two
cottages of the resort and two workers were retained after the completion without respondents being allowed to resume
work, they filed their individual complaints for illegal dismissal.

In their Position Paper,5 petitioners denied any employer-employee relationship with respondents and countered that
respondent Visca was an independent contractor who was called upon from time to time when some repairs in the resort
facilities were needed and the other respondents were selected and hired by him.

LA – Independent contractor, NLRC – regular CA- Regular

Issue: whether respondents are regular or project employees.

Held:  A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the engagement of the employee or where the work or service
to be performed is seasonal in nature and the employment is for the duration of the season

In the present case, respondents cannot be classified as project employees, since they worked continuously for
petitioners from three to twelve years without any mention of a "project" to which they were specifically assigned. While
they had designations as "foreman," "carpenter" and "mason," they performed work other than carpentry or masonry.
They were tasked with the maintenance and repair of the furniture, motor boats, cottages, and windbreakers and other
resort facilities.

There is likewise no evidence of the project employment contracts covering respondents' alleged periods of employment.
More importantly, there is no evidence that petitioners reported the termination of respondents' supposed project
employment to the DOLE as project employees. Department Order No. 19, as well as the old 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 is terminated due to a completion of a project. Petitioners' failure to file termination reports is an indication
that the respondents were not project employees but regular employees

This Court has held that an employment ceases to be coterminous with specific projects when the employee is
continuously rehired due to the demands of employer’s business and re-engaged for many more projects without
interruption.37

The Court is not persuaded by petitioners' submission that respondents' services are not necessary or desirable to the
usual trade or business of the resort. The repeated and continuing need for their services is sufficient evidence of the
necessity, if not indispensability, of their services to petitioners' resort business.

In Maraguinot, Jr. v. National Labor Relations Commission,39 the Court ruled that "once a project or work pool employee
has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of
tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the
employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence." 40

That respondents were regular employees is further bolstered by the following evidence: (a) the SSS Quarterly Summary
of Contribution Payments listing respondents as employees of petitioners; (b) the Service Record Certificates stating that
respondents were employees of petitioners for periods ranging from three to twelve years and all have given "very
satisfactory performance"; (c) petty cash vouchers43 showing payment of respondents' salaries and holiday and overtime
pays.

Thus, substantial evidence supported the CA finding that respondents were regular employees. Being regular employees,
they were entitled to security of tenure, and their services may not be terminated except for causes provided by law.

Gadia v Sykes Asia

Facts:
Sykes Asia is a corporation engaged in Business Process Outsourcing (BPO). On September 2, 2003, Alltel
Communications, Inc. (Alltel), a United States-based telecommunications firm, contracted Sykes Asia's services to
accommodate the needs and demands of Alltel clients for its postpaid and prepaid services (Alltel Project). Thus, on
different dates, Sykes Asia hired petitioners as customer service representatives, team leaders, and trainers for the Alltel
Project. Alltel sent two (2) letters to Sykes Asia dated August 7, 2009 and September 9, 2009 informing the latter that it
was terminating all support services provided by Sykes Asia related to the Alltel Project. Sykes Asia sent each of the
petitioners end-of-life notices, informing them of their dismissal from employment due to the termination of the Alltel
Project. Aggrieved, petitioners filed separate complaints for illegal dismissal against respondents alleging that their
dismissal from service was unjust as the same was effected without substantive and procedural due process.

Respondents averred that petitioners were not regular employees but merely project-based employees, and as such, the
termination of the Alltel Project served as a valid ground for their dismissal. Respondents noted that it was expressly
indicated in petitioners' respective employment contracts that their positions are "project-based" and thus, "co-
terminus to the project.”

The Labor Arbiter (LA) ruled in favor of respondents, and accordingly, dismissed petitioners' complaints for lack of merit.
It found that petitioners are merely project-based employees. The NLRC modified the LA Decision, ruling that
petitioners are regular employees but were validly terminated due to redundancy The CA annulled and set aside the
ruling of the NLRC, and accordingly, reinstated that of the LA

Issue: Whether or not the employees were project-based employees or regular employees.

Held: The employees were project-based employees. the Court finds that the CA correctly granted respondents'
certiorari petition before it, since the NLRC gravely abused its discretion in ruling that petitioners were regular
employees of Sykes Asia when the latter had established by substantial evidence that they were merely project-based.

A project employee is assigned to a project which begins and ends at determined or determinable times. Unlike regular
employees who may only be dismissed for just and/or authorized causes under the Labor Code, the services of
employees who are hired as "project[-based] employees" may be lawfully terminated at the completion of the project.

The principal test for determining whether particular employees are properly characterized as "project[-based]
employees" as distinguished from "regular employees," is whether or not the employees were assigned to carry out a
"specific project or undertaking," the duration (and scope) of which were specified at the time they were engaged for
that project. Verily, for an employee to be considered project- based, the employer must show compliance with two (2)
requisites, namely that: (a) the employee was assigned to carry out a specific project or undertaking; and (b) the
duration and scope of which were specified at the time they were engaged for such project.

In this case, records reveal that Sykes Asia adequately informed petitioners of their employment status at the time of
their engagement, as evidenced by the latter's employment contracts which similarly provide that they were hired in
connection with the Alltel Project, and that their positions were "project-based and as such is co-terminus to the project

-As regards the second requisite, the CA correctly stressed that "[t]he law and jurisprudence dictate that ‘the duration of
the undertaking begins and ends at determined or determinable times’" while clarifying that "[t]he phrase ‘determinable
times’ simply means capable of being determined or fixed." In this case, Sykes Asia substantially complied with this
requisite when it expressly indicated in petitioners’ employment contracts that their positions were "co-terminus with
the project” . This caveat sufficiently apprised petitioners that their security of tenure with Sykes Asia would only last as
long as the Alltel Project was subsisting.

 Further, the Court likewise notes the fact that Sykes Asia duly submitted an Establishment Employment Report52 and
an Establishment Termination Report to the Department of Labor and Employment Makati-Pasay Field Office regarding
the cessation of the Alltel Project and the list of employees that would be affected by such cessation. As correctly
pointed out by the CA, case law deems such submission as an indication that the employment was indeed project-based.
 Hacienda Fatima v. National Federation of Sugarcane Workers

FACTS:
The Labor Arbiter found that the respondents refused to work and/or were choosy in the kind of jobs they
wanted to perform, however, contrary to such findings, NLRC found that the records were replete with respondent’s
persistence and dogged determination in going back to work.
The facts below are summarized by the NLRC
It would appear that petitioners 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,
petitioners 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.
However, alleging that complainants failed to load the fifteen wagons, petitioners reneged on its commitment to
sit down and bargain collectively. Instead, petitioners employed all means including the use of private armed guards to
prevent the organizers from entering the premises.
Moreover, starting September 1991, petitioners 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
When respondents again reneged on its commitment; complainants filed a 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.
Court of Appeals: affirmed that while the work of respondents was seasonal in nature, they were considered to
be merely on leave during the off-season and were therefore still employed by petitioners. Moreover, the workers
enjoyed security of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal.
"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.

ISSUE/S:
1. Whether or not the respondents were regular employees
2. Whether or the Court of Appeals erred in rejecting the ruling in Mercado case and relying instead on rulings
which are not directly applicable to the case at bar.
3. Whether or not petitioners were guilty of unfair labor practice making the private respondents considered as
illegally dismissed.

HELD:

1) Yes. Respondents were regular employees.

 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.
 [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of
the . . . season does not detract from considering them in regular employment since in a litany of cases
this Court has already settled that seasonal workers who are called to work from time to time and are
temporarily laid off during off-season are not separated from service in said period, but merely
considered on leave until re-employed."

2) No. CA did not err when it ruled that Mercado v. NLRC 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 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.

3) Yes. Petitioners were guilty of unfair labor practice hence, the private respondents were illegally dismissed.
 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.
 "Indeed, from petitioners’ 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."
Gapayao v. Fulo,

FACTS:
The Deceased w was made to work as a laborer in the agricultural landholdings, a harvester in the abaca plantation, and a
repairman/utility worker in several business establishments owned by petitioner.

On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure secondary to 1st degree burn 70% secondary
electrocution" while doing repairs at the residence and business establishment of petitioner located at San Julian, Irosin,
Sorsogon.  Petitioner extended some financial assistance to private respondent. On 16 November 1997, the latter executed an
Affidavit of Desistance stating that she was not holding them liable for the death of her late husband, Jaime Fulo, and was
thereby waiving her right and desisting from filing any criminal or civil action against petitioner.

Both parties executed a Compromise Agreement,the relevant portion of which is quoted below:
We, the undersigned unto this Honorable Regional Office/District Office/Provincial Agency Office respectfully state:

1. The undersigned employer, hereby agrees to pay the sum of FORTY THOUSAND PESOS (₱40,000.00) to the
surviving spouse of JAIME POLO, an employee who died of an accident, as a complete and full payment for all
claims due the victim.

2. On the other hand, the undersigned surviving spouse of the victim having received the said amount do hereby
release and discharge the employer from any and all claims that maybe due the victim in connection with the
victim’s employment thereat.

Private Respondent claims her husband was an employee of petitioner until his un timley death that her late husband had
been in the employ of petitioner for 14 years, from 1983 to 1997. During that period, he was made to work as a laborer in the
agricultural landholdings, a harvester in the abaca plantation, and a repairman/utility worker in several business
establishments owned by petitioner.

Private respondent filed a claim for social security benefits with the Social Security System (SSS)–Sorosogon Branch. However,
upon verification and evaluation, it was discovered that the deceased was not a registered member of the SSS.

Petitioner alleges that the deceased is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short
period of time, in the nature of a farm worker every season, he was not precluded from working with other persons and in
fact worked for them. Under Article 280 of the Labor Code, seasonal employees are not covered by the definitions of regular
and casual employees. Petitioner cites Mercado, Sr. v. NLRC, in which the Court held 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

On 6 May 2003, petitioner filed an Answer disclaiming any liability on the premise that the deceased was not the former’s
employee, but was rather an independent contractor whose tasks were not subject to petitioner’s control and supervision.
Assuming arguendo that the deceased was petitioner’s employee, he was still not entitled to be paid his SSS premiums for the
intervening period when he was not at work, as he was an "intermittent worker who was only summoned every now and then
as the need arose." Hence, petitioner insisted that he was under no obligation to report the former’s demise to the SSS for
social security coverage.

ISSUE/S: whether or not there exists between the deceased Jaime Fulo and petitioner an employer-employee relationship
that would merit an award of benefits in favor of private respondent under social security laws.

HELD: Yes. Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or
those who have been engaged to perform activities that 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 their engagement, or those whose work or service is
seasonal in nature and is performed for the duration of the season; and (3) casual employees or those who are neither regular
nor project employees.

Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees
may be considered as regular employees. Regular seasonal employees are those called to work from time to time. The nature
of their relationship with the employer is such that during the off season, they are temporarily laid off; but reemployed during
the summer season or when their services may be needed. They are in regular employment because of the nature of their
job,and not because of the length of time they have worked.

The rule, however, is not absolute. In Hacienda Fatima v. National Federation of Sugarcane Workers-Food & General
Trade, the Court held that seasonal workers who have worked for one season only may not be considered regular employees.
Similarly, in Mercado, Sr. v. NLRC,60 it was held that when seasonal employees are free to contract their services with other
farm owners, then the former are not regular employees.
For regular employees to be considered as such, the primary standard used is the reasonable connection between the
particular activity they perform and the usual trade or business of the employer.

The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former
is usually necessary or desirable in the usual business or trade of the employer

The other tasks allegedly done by the deceased outside his usual farm work only bolster the existence of an employer-
employee relationship. As found by the SSC, the deceased was a construction worker in the building and a helper in the
bakery, grocery, hardware, and piggery – all owned by petitioner.  This fact only proves that even during the off season, the
deceased was still in the employ of petitioner.

The most telling indicia of this relationship is the Compromise Agreement executed by petitioner and private respondent. It
is a valid agreement as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full
understanding of what he or she was entering into

Pakyaw workers are considered employees for as long as their employers exercise control over them . 

In this case, we agree with the CA that petitioner wielded control over the deceased in the discharge of his functions. Being
the owner of the farm on which the latter worked, petitioner – on his own or through his overseer – necessarily had the right
to review the quality of work produced by his laborers. It matters not whether the deceased conducted his work inside
petitioner’s farm or not because petitioner retained the right to control him in his work, and in fact exercised it through his
farm manager Amado Gacelo. The latter himself testified that petitioner had hired the deceased as one of the pakyaw workers
whose salaries were derived from the gross proceeds of the harvest

Universal Robina  Sugar Milling Corporation (URSUMCO) v Acibo

Brion, J.
GR No. 186439 – 15 January 2014
FACTS:
The complainants were employees of URSUMCO who were hired between February 1988 and April 1996 to
perform different roles i.e drivers, crane operators, bucket hookers, welders, etc. They signed contracts of employment
for a period of 1 month or for some given season. They were repeatedly hired to perform the same duties and to sign
new employment contracts for the duration of 1 month or a given season. Complainants filed before the Labor Arbiter
(LA) complaints for regulations, to entitle them to the benefits under the existing Collective Bargaining Agreement (CBA)
and attorney’s fees.

BEFORE THE LA: The complaint was dismissed for lack  of merit. It held that complainants were seasonal or project
workers and not regular employees. They were not entitled to the benefits under the CBA, as provided, as it only
covered regular employees. LA reasoned that the complainant’s work was only for a definite period, and were not
directly related to petitioner’s main operations. 7 complainants from the original 22 complainants appealed the ruling
before the National Labor Relations Commission (NLRC).

BEFORE THE NLRC: NLRC reversed LA’s ruling; declaring complainants as regular employees and granted their monetary
claims under the CBA. It reasoned that complainants performed activities which are usually necessary and desirable in
the usual trade or business of petitioner and were repeatedly hired for the same undertaking every season. Hence,
following Art 280 (renumbered Art 295) of the Labor Code, complainants are regular employees.

BEFORE THE CA: CA affirmed NLRC’s decision but deleted the grant of monetary benefits under the CBA.  It reasoned
that the complainant’s tasks were necessary, if not indispensable to the petitioner’s business. They can not be covered
by the  CBA because it only pertains to regular employees who were performing tasks needed by petitioner for the
entire years with no regard to the changing sugar milling season.
ISSUE/S:
1. Whether the respondents are regular employees of URSUMCO
2. Whether affirmative relief can be given to the fifteen (15) of the complainants who did not appeal the LA's
decision.

HELD: The Court to partially grant the decision. Except for the denial of respondent’s claim for CBA benefits, CA
resolution and decision are set aside. The complaint is dismissed for lack of merit.

1. No. Respondents are regular seasonal employees.

Seasonal employment operates much in the same way as project employment, albeit it involves work or service that
is seasonal in nature or lasting for the duration of the season. As with project employment, although the seasonal
employment arrangement involves work that is seasonal or periodic in nature, the employment itself is not
automatically considered seasonal so as to prevent the employee from attaining regular status.
To exclude the asserted "seasonal" employee from those classified as regular employees, the employer must show
that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been employed
for the duration of the season. Hence, when the "seasonal" workers are continuously and repeatedly hired to perform
the same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise
serve as badge of regular employment. In fact, even though denominated as "seasonal workers," if these workers are
called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them
separated from the service during the off-season period. The law simply considers these seasonal workers on leave until
re-employed.

The respondents are regular seasonal workers and the following factual considerations support this conclusion:
1.Respondents were tasked to perform duties regularly and habitually needed in URSUMCO's operations during the
milling season. They performed activities which are necessary and desirable in sugarcane production and in the milling
of sugarcane, the plantation workers perform their duties only during the planting season.

2. Respondents were regularly and repeated hired to perform their respective tasks. The regular and repeated hiring of
the same workers for 2 separate seasons has put in place the system of regular seasonal employment in the sugar
industry and other industries with similar nature of operations.
Under the system, the plantation workers or the mill employees do not work continuously for one whole year
but only for the duration of the growing of the sugarcane or the milling season. Their seasonal work, however, 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 the off-season are not
separated from the service in said period, but are merely considered on leave until re-employment. Be this as it may,
regular seasonal employees, like the respondents in this case, should not be confused with the regular employees of
the sugar mill such as the administrative or office personnel who perform their tasks for the entire year regardless of
the season.
The NLRC, therefore, gravely erred when it declared the respondents regular employees of URSUMCO without
qualification and that they were entitled to the benefits granted, under the CBA, to URSUMCO' S regular employees.

3. While the petitioners assert that the respondents were free to work elsewhere during the off-season, the records do
not support this assertion. There is no evidence on record showing that after the completion of their tasks at URSUMCO,
the respondents sought and obtained employment elsewhere.
 Universal Robina  Sugar Milling Corporation (URSUMCO) v Acibo
Brion, J.
GR No. 186439 – 15 January 2014
FACTS:
The complainants were employees of URSUMCO. They were hired on various dates (between February 1988 and
April 1996) and on different capacities,  i.e., drivers, crane operators, bucket hookers, welders, mechanics, laboratory
attendants and aides, steel workers, laborers, carpenters and masons, among others. At the start of their respective
engagements, the complainants signed contracts of employment for a period of one (1) month or for a given
season. URSUMCO repeatedly hired the complainants to perform the same duties and, for every engagement, required
the latter to sign new employment contracts for the same duration of one month or a given season.
On August 23, 2002,9 the complainants filed before the LA complaints for regularization, entitlement to the benefits
under the existing Collective Bargaining Agreement (CBA)

BEFORE THE LA: The complaint was dismissed for lack  of merit. It held that complainants were seasonal or project
workers and not regular employees.

BEFORE THE NLRC: NLRC reversed LA’s ruling; declaring complainants as regular employees and granted their monetary
claims under the CBA. It reasoned that complainants performed activities which are usually necessary and desirable in
the usual trade or business of petitioner and were repeatedly hired for the same undertaking every season. Hence,
following Art 280 (renumbered Art 295) of the Labor Code, complainants are regular employees.

BEFORE THE CA: CA affirmed NLRC’s decision but deleted the grant of monetary benefits under the CBA.  It reasoned
that the complainant’s tasks were necessary, if not indispensable to the petitioner’s business. They can not be covered
by the  CBA because it only pertains to regular employees who were performing tasks needed by petitioner for the
entire years with no regard to the changing sugar milling season.

ISSUE/S:
1. Whether the respondents are regular employees of URSUMCO

HELD: The Court to partially grant the decision. Except for the denial of respondent’s claim for CBA benefits, CA
resolution and decision are set aside. The complaint is dismissed for lack of merit.

1. No. Respondents are regular seasonal employees.

Seasonal employment operates much in the same way as project employment, albeit it involves work or service that
is seasonal in nature or lasting for the duration of the season. As with project employment, although the seasonal
employment arrangement involves work that is seasonal or periodic in nature, the employment itself is not
automatically considered seasonal so as to prevent the employee from attaining regular status.

To exclude the asserted "seasonal" employee from those classified as regular employees, the employer must show
that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been employed
for the duration of the season Hence, when the "seasonal" workers are continuously and repeatedly hired to perform
the same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise
serve as badge of regular employment In fact, even though denominated as "seasonal workers," if these workers are
called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them
separated from the service during the off-season period. The law simply considers these seasonal workers on leave until
re-employed

Clearly, therefore, the nature of the employment does not depend solely on the will or word of the employer or on
the procedure for hiring and the manner of designating the employee. Rather, the nature of the employment depends
on the nature of the activities to be performed by the employee, considering the nature of the employer’s business, the
duration and scope to be done, and, in some cases, even the length of time of the performance and its continued
existence.
In light of the above legal parameters laid down by the law and applicable jurisprudence, the respondents are
neither project, seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO.
The respondents are regular seasonal workers and the following factual considerations support this conclusion:
1.Respondents were tasked to perform duties regularly and habitually needed in URSUMCO's operations during the
milling season (loader operators, hookers, crane operators, aboratory attendants, workers and laborers to mill the
sugar). They performed activities which are necessary and desirable in sugarcane production and in the milling of
sugarcane, the plantation workers perform their duties only during the planting season.

2. Respondents were regularly and repeated hired to perform their respective tasks. The regular and repeated hiring
of the same workers for 2 separate seasons has put in place the system of regular seasonal employment in the sugar
industry and other industries with similar nature of operations.
Under the system, the plantation workers or the mill employees do not work continuously for one whole year but
only for the duration of the growing of the sugarcane or the milling season. Their seasonal work, however, 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 the off-season are not
separated from the service in said period, but are merely considered on leave until re-employment. Be this as it may,
regular seasonal employees, like the respondents in this case, should not be confused with the regular employees of
the sugar mill such as the administrative or office personnel who perform their tasks for the entire year regardless of
the season.
The NLRC, therefore, gravely erred when it declared the respondents regular employees of URSUMCO without
qualification and that they were entitled to the benefits granted, under the CBA, to URSUMCO' S regular employees.

3. While the petitioners assert that the respondents were free to work elsewhere during the off-season, the records do
not support this assertion. There is no evidence on record showing that after the completion of their tasks at URSUMCO,
the respondents sought and obtained employment elsewhere.

Paz v. Northern Tobacco Redrying

Article 287, Labor Code:

Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or
other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under
existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee’s
retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein.

In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared
the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term -half (1/2) month salary shall mean fifteen (15) days plus one-
twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.

Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are
exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code.

FACTS:
Northern Tobacco Redrying Co., Inc (NTRCI), a flue-curing and redrying of tobacco leaves business, employs
approximately 100 employees with seasonal workers to sort, process, store and transport tobacco leaves during the
tobacco season of March to September. Zenaida Paz was hired and re-hired by NTRCI since 1974 as a seasonal sorter
and paid P185 daily. She signed a seasonal job contract at the start of her employment and a pro-forma application
letter prepared by NTRCI in order to qualify for the next season.
On May 18, 2003, Paz was 63 years old when NTRCI informed her that she was considered retired under the
company policy and a year later, was told that she would receive P12,000 as retirement pay. Paz then filed a Complaint
for illegal dismissal against NTRCI which she amended into Complaint for payment of retirement benefits as P12,000
seemed inadequate for her 29 years of service. NTRCI contended that no CBA existed between NTRCI and its workers
and thus, it computed the retirement pay of its seasonal workers based on Article 287 of the Labor Code.
The Labor Arbiter confirmed the retirement pay was only P12,487.5 based on the computation of NTRCI. On the
other hand, the NLRC modified the Labor Arbiter’s Decision and that the retirement pay should be computed pursuant
to RA 7641 and that all the months she was engaged to work for NTRCI for the last 28 years should be added and divided
by six to get the number of years for her retirement pay. The Court of Appeals dismissed the petition and modified the
NLRC’s Decision in that financial assistance is awarded to Zenaida Paz in the amount of P60,356.25. The CA found that
while applying Article 287, the amount was so meager that it could hardly support Paz, now that she is weak and old,
unable to find employment. It discussed jurisprudence on financial assistance and deemed it appropriate to apply the
formula: One half-month pay multiplied by 29 years of service divided by two yielded P60,356.12.
Paz then came before the Supreme Court seeking to reinstate the NLRC’s computation. She contends that NTRCI
failed to prove the alleged company policy on compulsory retirement for employees who reached 60 years of age or
who rendered 30 years of service, whichever comes first. She adds that while one may opt to retire at 60 years old, the
compulsory retirement age is 65 years old under Art. 287, as amended. Furthermore, she contends that lack of legal
basis that “an employee should have at least worked for 6 months for a particular season for that season to be included
in the computation of retirement pay. She submits that regular seasonal employees are still considered employees
during off season, and length of service determination should be applied in retiree’s favor.
NTRCI argues that unlike regular employees, seasonal workers like Paz can offer their services to other
employers during off-season. Thus, the 6-month rule avoids the situation where seasonal workers receive retirement
pay twice – an even more favorable position compared with regular employee.

ISSUE/S:
4) W/N Paz, a seasonal employee, is considered as a regular seasonal employee.
5) W/N Paz was illegally dismissed from service.
6) W/N NTRCI complied with both procedural and substantive due process.
7) W/N the retirement pay pursuant to Article 287 was correctly computed.
8) W/N the CA erred in awarding financial assistance to Paz.

HELD: COURT OF APPEALS DECISION IS AFFIRMED WITH MODIFICATION.

4) Yes. Paz is a regular seasonal employee.

Article 280 of the Labor Code and jurisprudence identified 3 types of employees, namely:

(1) Regular employee 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 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.

This court explained that the proviso in the second paragraph of Article 280 in 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" applies
only to "casual" employees and not "project" and regular employees in the first paragraph of Article 280

Jurisprudence also recognizes the status of regular seasonal employees. In the case La Union Tobacco Redrying
Corp. v NLRC, the workers were considered regular seasonal employees since they performed services necessary and
indispensable to the business for over 20 years, even if their work was only during tobacco season. The court applied the
test laid down in De Leon v NLRC for determining regular employment status: “The primary standard 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 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 the
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 employer's nature of business and the duration and scope of work to be
done.

 Herein Paz, having performed the same tasks for respondent every season for several years, is considered the
latter’s regular employee for their respective tasks. Respondent’s eventual refusal to use her services — even if she was
ready, able and willing to perform her usual duties whenever these were available —or forced retirement in particular,
amounted to illegal dismissal of the latter

In this case, the services Paz performed as a sorter were necessary and indispensable to NTRCI’s business. She was
also regularly rehired as a sorter during the tobacco season for 29 years since 1974 until 2003. These considerations
taken together allowed the conclusions that Paz was a regular seasonal employee, entitled to rights under Article 279 of
the Labor Code.

5) Yes. Paz was illegally dismissed.

The amendment of Paz of her Complaint was not fatal to her cause of action for illegal dismissal. This is because Paz
never abandoned her argument that she had not reached the compulsory retirement age of 65 pursuant to Article 287,
as amended. Furthermore, the NLRC found that NTRCI failed to prove a valid company retirement policy, yet it required
its workers to retire after they had reached the age of 60.

Jurisprudence provides that “retirement is the result of a bilateral act of the parties, a voluntary agreement between
the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment
with the former.” Article 287, as amended, allows for optional retirement at the age of at least 60 years old. Hence, if the
intent to retire is not clearly established or if the retirement is involuntary, it is to be treated as discharge.

The complaint of Paz that she was illegally dismiss is an implied lack of intent to retire until she reached the
compulsory age of 65. Thus, she should be considered as illegally dismissed and should be entitled to full backwages.

6) No. NTRCI did not comply with the due process requisites.
 The Labor Code requires employers to comply with both procedural and substantive due process in dismissing
employees. This provides that the dismissal must be based on a just cause under Art. 282 of the Labor Code, for an
authorized cause under Art. 283, or for health reasons under Art. 284. Moreover, as regards due process, the Section 2
of the Labor Code provides that in all cases of termination of employment, the standards of due process shall be
substantially observed.

In this case, Paz was illegally dismissed for having no just or authorized cause and that there was a violation of due
process. NTRCI had considered Paz retired at the age of 63 before she reached the compulsory age of 65. This does not
fall under the just causes of termination, the authorized causes, or disease as a ground for termination. Furthermore,
there was no showing that NTRCI complied with the due process requisites of notice.

7) Yes. The retirement pay was correctly computed.

An employer may provide for retirement benefits in an agreement with its employees such as in a CBA. Otherwise,
Article 287 of the Labor Code, as amended, governs. Since NTRCI failed to present a copy of a CBA, the court applied Art,
287, as amended by RA 7641. This provides for the proper computation of retirement benefits in the absence of a
retirement plan or agreement. NTRCI followed the formula in Art. 287 and offered Paz the amount of P12,487.5 as
retirement pay based on the 3 years she worked for at least 6 months in 1995, 1999, and 2000.

In the case of Philippine Tobacco, Article 283 and 284 of the labor Code in separation pay, and these articles include
the proviso “a fraction of at least six (6) months being considered as one whole year." While the present case involves
retirement pay and not separation pay, Article 287 of the Labor Code provides the same proviso. Hence, this proviso
applies in this case. An employee must have rendered at least 6 months in a year for said year to be considered in the
computation. Based on the factual findings that Paz rendered at least 6 months of service for 1995, 1999, and 2000 only,
retirement pay pursuant to Art. 287 of the Labor Code was correctly computed at P12,487.50.

8) No. The CA correctly granted financial assistance to Paz.

The Supreme Court agrees with the CA that Paz be awarded a financial assistance in the amount of P60,356.25 by
applying the formula: one-half-month pay multiplied by 29 years in service and then divided by 2. This is because the
retirement pay is indeed to meager to support Paz who has become old, weak, and unable to find employment. RA 7641
is a social legislation with the purpose of providing for the retiree’s sustenance and hopefully even comfort, when he or
she no longer has the stamina to continue earning his or her livelihood. The CA recognized Paz’s 3 decades of hard work
and service with NTRCI however disagreed with the NLRC’s retirement pay computation for lack of factual basis.

In any event, the SC still awarded financial assistance as a measure of social justice in exceptional circumstances, and
as an equitable concession. The Court, in this case, calls upon the same “social and compassionate justice” cited in
several cases allowing financial assistance. The circumstances indubitably merit equitable concessions, via the principle
of “compassionate justice” for the working class.

The Court agrees with the CA that Paz’s circumstances “indubitable merit equitable concessions.” Paz worked for
NTRCI for close to 3 decades and she had no record of any malfeasance or violation of company rules in her long years of
service. Her advanced age has rendered her weak and lessened her employment opportunities. The award of P60,356.25
as financial assistance will serve its purpose in providing Paz sustenance and comfort for her long years of service.