PAKISTAN INTERNATIONAL AIRLINES CORPORATION, petitioner,

vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON. VICENTE
LEOGARDO, JR., in his capacity as Deputy Minister; ETHELYNNE B. FARRALES
and MARIA MOONYEEN MAMASIG, respondents.
G.R. No. 61594 September 28, 1990

FACTS:
Pakistan International Airlines Corporation (PIA) executed two employment
contracts with private respondent Ethelynne B. Farrales and Ma. M.C. Mamasig in
Manila in 1987. The contracts, effective on January 9, 1979, provided for a three-year
employment period with the option for extension by mutual consent. PIA reserves the
right to terminate the agreement at any time by providing written notice in advance or
paying wages equivalent to one month's salary.
On August 2, 1980, PIA informed Farrales and Mamasig that they were
terminated due to the employment contract provisions. The respondents filed a
complaint against PIA for illegal dismissal and non-payment of company benefits and
bonuses with the then Ministry of Labor and Employment (MOLE). MOLE ordered the
parties to submit their position papers and evidence supporting their claims. PIA
claimed that the respondents were habitual absentees and brought in large quantities of
personal effects from abroad.
On January 22, 1981, Regional Director Francisco Estrella ordered the
reinstatement of the respondents with back wages or payment equivalent to their
salaries for the remainder of their employment contracts. The Deputy Minister of MOLE
affirmed the findings of the Regional Director, leading to an appeal for certiorari. PIA
argues that the jurisdiction of the Deputy Minister, violation of PIA's right to due process,
and rights stated in the employment contracts are all at stake.

ISSUE:
Whether or not the stipulations of the contract should govern in favour of
Pakistan International Airport.

RULING:
No. The Court ruled that the contracts of employment particularly stipulations
under paragraph 5 and 6 is void because it is inconsistent with Articles 280 and 281 of
the Labor Code. Under Article 280 of the Labor Code, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title An
employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and to his backwages computed from the time his compensation
was withheld from him up to the time his reinstatement. Article 281 provides that the
provisions of written agreement to the contrary notwithstanding and regardless of the
oral agreements of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature and the employment is for
the duration of the season. An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: provided, that, any employee who has rendered at
least one year of service, whether such service is continuous or broken, shall be
considered as regular employee with respect to the activity in which he is employed and
his employment shall continue while such actually exists.

BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners,

vs.
RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of the
President, and DOROTEO R. ALEGRE, respondents.
G.R. No. L-48494 February 5, 1990

FACTS:
Doroteo R. Alegre, a private respondent, was hired as an athletic director by
Brent School, Inc., with a five-year contract. Subsequent agreements reiterated the
terms and conditions of the original contract. In 1976, Alegre was informed of his
termination from Brent School, effective July 16, 1976, due to the termination's grounds.
Despite protesting the termination, Alegre accepted the payment of P3,177.71 and
signed a receipt stating that he had paid full payment for the period May 16, to July 17,
1976.
The Regional Director considered Brent School's report as an application for
termination, not a termination report. Instead, he required Alegre to be reinstated as a
"permanent employee" without loss of seniority rights and full back wages. The
Regional Director refused to give Alegre clearance and instead required him to return to
his former position without loss of seniority rights and full back wages.
ISSUE:
Whether or not the provisions of the Labor Code, as amended, have
anathematized "fixed period employment" or employment for a term.

RULING:
No. Before the Labor Code, there was no doubt about the validity of term
employment. It was impliedly but clearly recognized by the Termination Pay law, RA
1052. The employment contract between Brent School and Alegre was executed on
July 18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet
been promulgated. Indeed, the Code did not come into effect until November 1, 1974,
some three years after the perfection of the employment contract, and rights and
obligations there under had arisen and been mutually observed and enforced. At that
time, i.e., before the advent of the Labor Code, there was no doubt whatever about the
validity of term employment. It was impliedly but nonetheless clearly recognized by the
Termination Pay Law, R.A. 1052, 11 as amended by R.A. 1787. 12 Basically, this
statute provided that—In cases of employment, without a definite period, in a
commercial, industrial, or agricultural establishment or enterprise, the employer or the
employee may terminate at any time the employment with just cause; or without just
cause in the case of an employee by serving written notice on the employer at least one
month in advance, or in the case of an employer, by serving such notice to the
employee at least one month in advance or one-half month for every year of service of
the employee, whichever is longer, a fraction of at least six months being considered as
one whole year.
The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages. The
employee, upon whom no such notice was served in case of termination of employment
without just cause, shall be entitled to compensation from the date of termination of his
employment in an amount equivalent to his salaries or wages corresponding to the
required period of notice.
There was, to repeat, clear albeit implied recognition of the licitness of term
employment. RA 1787 also enumerated what it considered to be just causes for
terminating an employment without a definite period, either by the employer or by the
employee without incurring any liability therefor. Accordingly, and since the entire
purpose behind the development of legislation culminating in the present Article 280 of
the Labor Code clearly appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure, the clause in said
article indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of tenure. It should have no
application to instances where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any force, duress or improper pressure
being brought to bear upon the employee and absent any other circumstances vitiating
his consent, or where it satisfactorily appears that the employer and employee dealt
with each other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited in its purview, the law would
be made to apply to purposes other than those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and
unintended consequences.

ZOSIMO CIELO, petitioner,

vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, HENRY LEI
and/or HENRY LEI TRUCKING
G.R. No. 78693 January 28, 1991

FACTS:
Zosimo Cielo was hired by Henry Lei Trucking as a truck driver under a six-
month contract, with no employer-employee relationship. The contract was due to
expire on December 31, 1984, and Zosimo was notified of his termination on December
22, 1984. He filed a complaint with the Ministry of Labor and Employment on January
22, 1984, claiming he became a regular employee after working with Henry Lei for over
six months and could not be dismissed without lawful cause. He also claimed he was
removed due to his refusal to sign an affidavit of receiving full payment of wages. The
employer argues that the Labor Code is not applicable because the parties' relations are
governed by voluntary stipulations, and that the trucking company has the right to renew
the contract after expiry.

The Labor Arbiter ruled in favor of Zosimo. It held that Zosimo is a regular employee of
private respondent. While the NLRC reversed the decision of LA and held that Zosimo's
employment has expired under a valid contract.

ISSUE:
Whether or not the petitioner is a regular employee.
RULING:
Yes, Zosimo is a regular employee. There is no question that the Zosimo was not
engaged as an apprentice, being already an experienced truck driver when he began
working for Henry Lei. Neither has it been shown that he was informed at the time of his
employment of the reasonable standards under which he could qualify as a regular
employee. It is plain that the he was hired at the outset as a regular employee. At any
rate, even assuming that the original employment was probationary, the Labor Arbiter
found that he had completed more than six month's service with the trucking company
and so had acquired the status of a regular employee at the time of his dismissal. LA
decision reinstated,

PURE FOODS CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETA
CRUSIS, ET AL., * respondents.
G.R. No. 122653 December 12, 1997

FACTS:
Private respondents were hired by Pure Foods for a five-month contract at its
tuna cannery plant in General Santos City. After their contracts expired, they terminated
their services and filed a complaint for illegal dismissal. The Labor Arbiter dismissed the
complaint, stating that the respondents were contractual workers and not regular
employees, thus not eligible for the law on security of tenure. The respondents
appealed to the NLRC, which affirmed the LA's decision. However, the NLRC ruled that
the respondents and their co-complainants were regular employees and that the
contract was a "clandestine scheme" to stifle their right to security of tenure. The
dismissal was deemed illegal due to the expiration of their contracts. The petitioner
argued that the NLRC committed grave abuse of discretion and lack of jurisdiction in
reversing the decision.

ISSUE:
Whether or not private respondents are regular employees of petitioner company or
mere contractual employees.

RULING:
 The SC held that the petition devoid of merit. Under Art. 280, there are two kinds
of regular employees are (1) those who are engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those
casual employees who have rendered at least one year of service, whether continuous
or broken, with respect to the activity in which they are employed.

In the instant case, the private respondents' activities consisted in the receiving,
skinning, loining, packing, and casing-up of tuna fish which were then exported by the
petitioner. Indisputably, they were performing activities which were necessary and
desirable in petitioner's business or trade. Contrary to petitioner's submission, the
private respondents could not be regarded as having been hired for a specific project or
undertaking. The term "specific project or undertaking" under Article 280 of the Labor
Code contemplates an activity which is not commonly or habitually performed or such
type of work which is not done on a daily basis but only for a specific duration of time or
until completion; the services employed are then necessary and desirable in the
employer's usual business only for the period of time it takes to complete the project.
The fact that the petitioner repeatedly and continuously hired workers to do the same
kind of work as that performed by those whose contracts had expired negates
petitioner's contention that those workers were hired for a specific project or undertaking
only.

Although, this Court has upheld the legality of fixed-term employment, none of
the criteria had been met in the present case. It could not be supposed that private
respondents and all other so-called "casual" workers of the petitioner KNOWINGLY and
voluntarily agreed to the 5-month employment contract. Cannery workers are never on
equal terms with their employers. Almost always, they agree to any terms of an
employment contract just to get employed considering that it is difficult to find work
given their ordinary qualifications. Their freedom to contract is empty and hollow
because theirs is the freedom to starve if they refuse to work as casual or contractual
workers. Indeed, to the unemployed, security of tenure has no value. It could not then
be said that petitioner and private respondents "dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former over the
latter.

The petitioner does not deny or rebut private respondents' averments (1) that the
main bulk of its workforce consisted of its so-called "casual" employees; (2) that as of
July 1991, "casual" workers numbered 1,835; and regular employee, 263; (3) that the
company hired "casual" every month for the duration of five months, after which their
services were terminated and they were replaced by other "casual" employees on the
same five-month duration; and (4) that these "casual" employees were actually doing
work that were necessary and desirable in petitioner's usual business. This scheme of
the petitioner was apparently designed to prevent the private respondents and the other
"casual" employees from attaining the status of a regular employee. It was a clear
circumvention of the employees' right to security of tenure and to other benefits like
minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay.
Indeed, the petitioner succeeded in evading the application of labor laws. Also, it saved
itself from the trouble or burden of establishing a just cause for terminating employees
by the simple expedient of refusing to renew the employment contracts.

The five-month period specified in private respondents' employment contracts

having been imposed precisely to circumvent the constitutional guarantee on security of
tenure should, therefore, be struck down or disregarded as contrary to public policy or
morals. To uphold the contractual arrangement between the petitioner and the private
respondents would, in effect, permit the former to avoid hiring permanent or regular
employees by simply hiring them on a temporary or casual basis, thereby violating the
employees' security of tenure in their jobs.

SAN MIGUEL CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and RUSTICO VEGA, respondents.
G.R. No. 80774 May 31, 1988

FACTS:
San Miguel Corporation (SMC) sponsored an Innovation Program that awarded
cash rewards to employees who submitted ideas and suggestions beneficial to the
corporation. Private Respondent Rustico Vega, a mechanic in the Bottling Department,
submitted an innovation proposal to eliminate defects in the quality and taste of the
product "San Miguel Beer Grande." SMC rejected the proposal and refused Vega's
demands for cash awards. Vega filed a complaint with the Ministry of Labor and
Employment in Cebu, arguing that his proposal had been accepted by the methods
analyst and implemented by SMC, solving the problem in Beer Grande production. SMC
denied approval of Vega's proposal, stating it was rejected for lack of originality and
could not achieve desired results. The Labor Arbiter dismissed the complaint, stating it
was not a necessary incident of Vega's employment and did not fall under Article 217 of
the Labor Code. However, the Labor Arbiter ordered SMC to pay Vega P2,000 as
financial assistance. The National Labor Relations Commission (NLRC) set aside the
decision and ordered SMC to pay Vega P60,000.
ISSUE:
Whether or not the Labor Arbiter and the Commission has jurisdiction over the
money claim filed by private respondent.

RULING:
No, The Labor Arbiter and the Commission has no jurisdiction over the money
claim of Vega.
The court ruled that the money claim of private respondent Vega arose out of or
in connection with his employment with petitioner. However, it is not enough to bring
Vega’s money claim within the original and exclusive jurisdiction of Labor Arbiters.
In the CAB, the undertaking of petitioner SMC to grant cash awards to
employees could ripen into an enforceable contractual obligation on the part of
petitioner SMC under certain circumstances. Hence, the issue whether an enforceable
contract had arisen between SMC and Vega, and whether it has been breached, are
legal questions that labor legislations cannot resolved because it’s recourse is the law
on contracts.
Where the claim is to be resolved not by reference to the Labor Code or other
labor relations statute or a collective bargaining agreement BUT by the general civil law,
the jurisdiction over the dispute belongs to the regular courts of justice and not to the
Labor Arbiter and NLRC.

ANDRES E. DITAN, Petitioner,

vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION ADMINISTRATOR,
NATIONAL LABOR RELATIONS COMMISSION, ASIAWORLD RECRUITMENT, INC.,
AND/OR INTRACO SALES CORPORATION, Respondents.
G.R. No. 79560. December 3, 1990.

FACTS:
Andres E. Ditan was hired by Intraco Sales Corporation to work as a welding
supervisor in Angola for nine months. He was transferred to Kafunfo, a location where
rebels had kidnapped expatriate workers earlier that year. Despite initial reluctance,
Ditan was assured that Kafunfo was safe and adequately protected by government
troops. He agreed to the assignment, but on December 29, 1984, the Unita rebels
attacked the diamond mining site where Ditan was working and took him and sixteen
other Filipino hostages. After the hostages were released, Ditan and the other Filipino
hostages returned to the Philippines. The repatriated workers were given priority in re-
employment abroad, and eleven were eventually taken back. Ditan filed a complaint
against the private respondents for breach of contract and other claims, seeking
compensation for his salaries, war risk bonus, lost belongings, unpaid vacation leave,
and moral and exemplary damages. These claims were dismissed by POEA
Administrator Tomas D. Achacoso and affirmed by respondent NLRC in a resolution
being challenged in this petition.
ISSUE:
Whether or not the petitioner is entitled to his claims while there are laws and
policies governing his employment overseas.

RULING:
Yes, but the petition was modified.
The Supreme Court (SC) ruled in favor of the petitioner, who claimed paid
vacation leave. The court found that the petitioner did not enter into a second contract
after the first one expired, and his belongings were returned to him by the rebels before
their release. The SC also rejected claims for breach of contract and war risk bonus due
to the risk he was subjected to when assigned to the rebel-infested region of Kafunfo.
The respondent, INTRACO, did not explain why the petitioner was not able to
receive salaries for the unexpired portion of his contract and failed to fulfill the promise
of priority in re-employment. The private respondents (INTRACO) also rejected the
claim for war risk bonus, arguing that POEA Memorandum Circular No. 4, issued
pursuant to the mandatory war risk coverage provision in Section 2, Rule VI, of the
POEA Rules and Regulations on Overseas Employment, took effect only on February 6,
1985, "after the petitioner's deployment to Angola on November 27, 1984."
Under the policy of social justice, the law bends over backward to accommodate
the interests of the working class, and the SC's judgment must be for the petitioner. The
challenged resolution of the NLRC is modified, and the private respondents are directed
to pay the petitioner: a) the current equivalent in Philippine pesos of US$4,675.00, b)
nominal damages in the amount of P20,000.00, and c) 10% attorney's fees, with no
costs.

TERMINATION OF EMPLOYMENT

SAN MIGUEL BREWERY, INC., petitioner,

vs.
NATIONAL LABOR UNION AND SAMBELA, respondents.
G.R. No. L-7905 July 30, 1955

FACTS:

ALMA COSEP, MARILOU COQUIA, DULCEVITA SORIANO and MARY JANE

RABORAR, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PREMIERE DEVELOPMENT
BANK, respondents.
G.R. No. 124966 June 16, 1998

FACTS:
Alma Cosep, Dulcevita Soriano, Marilou Coquia, and Mary Jane Raborar were
regular employees of Premiere Development Bank's Guadalupe Branch, led by area
manager Gloria Doplito. In 1994, Doplito was suspended for alleged money laundering.
The petitioners wrote an open letter criticizing Doplito's handling of the case, which was
later suspended and not paid their 13th month pay and wages. The petitioners argued
that the letter was an exercise of their right to freedom of speech. In 1995, the bank
dismissed the petitioners, citing their undermined interest. However, the bank issued a
temporary "transfer of assignment" to the petitioners, temporarily suspending the effects
of the previous memorandum. The petitioners ignored the transfer and filed a complaint
against the bank for illegal dismissal, unpaid wages, and 13th month pay. They
requested separation pay and the award of moral and exemplary damages.

ISSUE:
Whether or not the petitioners have been illegally dismissed.

RULING:

Yes, not the petitioners have been illegally dismissed.

The National Labor Relations Commission (NLRC) ruled that the complainants
were not dismissed due to insubordination but due to their refusal to comply with a
transfer order issued to them. The two-day gap between January 20, 1995, and January
23, 1995, which was a Monday, was non-working days in the bank. The petitioners
remained adamant in their refusal to report for work, which constitutes a valid and lawful
basis for their termination. However, the private respondent issued a memorandum on
January 20, 1995, terminating the services on the grounds of serious misconduct for
violating Rule IV of the Bank's Code of Conduct. The court found that the petitioners
were dismissed for admitting authorship of the "open-letter," as evidenced by the
memorandum issued to the petitioners last January 20, 1995.
The petitioner's private respondent bank maintains that the petitioners violated a
company policy, which is generally valid and binding on the parties. The issue is
whether the infraction committed by them warrants the penalty of dismissal. The court
believes not.
The Labor Code allows employers to terminate an employee's services for
serious misconduct, gross neglect, fraud, crime, or offense against their employer or
representatives. The burden of proof in termination cases is on the employer to prove
that the dismissal is for just cause. In this case, the private respondent did not establish
sufficient grounds for dismissing the petitioners from service on the ground of serious
misconduct.