Labor Law 1 A2010 - 93 - Disini7.05 CASUAL EMPLOYEES

NATURE OF WORK

A.M. ORETA & CO INC V NLRC (GRULLA)[PAGE 88]

ONE YEAR SERVICE

KIMBERLY INDEPENDENT LABOR UNION V DRILON185 SCRA 190

REGALADO; May 9, 1990

FACTS- Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three-year collective bargaining agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and General Workers' Organization (UKCEUPTGWO) which expired on June 30, 1986.- Within the 60-day freedom period prior to the expiration of and during the negotiations for the renewal of the aforementioned CBA, some members of the bargaining unit formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and Nationalism-Organized Labor Association in Line Industries and Agriculture (KILUSAN-OLALIA)- April 21, 1986, KILUSAN-OLALIA filed a petition for certification election. KIMBERLY and UKCEU-PTGWO did not object to the holding of a certification election but objected to the inclusion of the so-called contractual workers whose employment with KIMBERLY was coursed through an independent contractor, Rank Manpower Company (RANK, for short), as among the qualified voters.- On June 2, 1986, Med-Arbiter Bonifacio I. Marasigan, who was handling the certification election case issued an order declaring the following as eligible to vote in the certification election, thus:1) regular rank-and-file laborers/employees of the respondent company; 2) casuals who have worked at least six (6) months; 3) Contractual employees who are allegedly in the employ of an independent contractor and who have also worked for at least six (6) months- During the pre-election conference, 64 casual workers were challenged by KIMBERLY and UKCEU-PTGWO on the ground that they are not employees of KIMBERLY but of RANK. It was agreed by all the parties that the 64 voters shall be allowed to cast their votes but that their ballots shall be segregated and subject to challenge proceedings.- After the elections, UKCEU-PTGWO won over KILUSAN-OLALIA by 20 votes. This count considered the votes of the 64 employees as separate.- In a case regarding the status of the 64 employees in relation to the certification election, it was held by med-arbiter Sanchez that:

2)The other casual employees not performing janitorial and yard maintenance services were deemed labor-only contractuals and since labor-only contracting is prohibited, such employees were held to have attained the status of regular employees, the regularization being effective as of the date of the decision;3. UKCEU-PTGWO, having garnered more votes than KILUSAN-OLALIA, was certified as the exclusive bargaining representative of KlMBERLY's employees;

- Since the members were only considered regular at the time of the decision, their votes were not re-considered as regards the election.- winning union and company executed a CBA- KIMBERLY-OLALIA filed for a TRO on the CBA and included the question of the status of the 64 members in question.

ISSUEWON the 64 employees were regular employees at the time of the certification election

HELDYES- A280LC provides for two kinds of regular employees: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed- The individual petitioners herein who have been adjudged to be regular employees (by law) fall under the second category. These are the mechanics, electricians, machinists, machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and masons. It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the time of the filing of the petition for certification election by KILUSAN-OLALIA.- While the actual regularization of these employees entails the mechanical act of issuing regular appointment papers and compliance with such other operating procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual worker on the day immediately after the end of his first year of service- The law is explicit. As long as the employee has rendered at least one year of service, he becomes a regular employee with respect to the activity in which he is employed. The law does not provide the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn.- On the basis of the foregoing circumstances, and as a consequence of their status as regular employees, those workers not perforce janitorial and yard maintenance service were performance entitled to the payment of salary differential, cost of living allowance, 13th month pay, and such other benefits extended to regular employees under the CBA, from the day immediately following their first year of service in the company.-These regular employees are likewise entitled to vote in the certification election held in July 1, 1986. Consequently, the votes cast by those employees not performing janitorial and yard maintenance service, which forms part of the 64 challenged votes, should be opened, counted and considered for the purpose of determining the certified bargaining representative.

SAN MIGUEL CORP V ABELLA[PAGE 59]

INTEGRATED CONTRACTOR V NLRC (SOLON)464 SCRA 265

QUISUMBING; August 9, 2005

NATUREAppeal from a decision of the CA affirming the NLRCs findings which declared respondent Solon a regular employee of the petitioner and awarded him with 13th month pay, service incentive leave pay, reinstatement to his former position with full backwages from the time his salary was withheld until his reinstatement.

FACTS - Petitioner is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract with its clients.- Respondent Solon worked for petitioner several months at a time from 1994 to 1998.

Labor Law 1 A2010 - 94 - Disini- On Feb. 1998, while Solon was about to log out from work, he was informed that it was his last day of work as he had been terminated. He went back to petitioners office to sign a clearance so he could claim his 13th month pay and tax refunds. However, he refused to sign when he read the clearance indicating that he had resigned. He then filed a complaint for illegal dismissal without due cause and due process. - The Labor Arbiter ruled that Solon was a regular employee and could only be removed for cause. NLRC affirmed with only a modification as to the computation of 13th month pay. CA also affirmed.

ISSUEWON respondent is a regular employee

HELD YESRatio The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. (De Leon v NLRC)Reasoning - While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioners business. Disposition assailed Decision dated October 30, 2001 and the Resolution dated February 28, 2002 of CA are AFFIRMED with MODIFICATION. The petitioner id hereby ORDERED to (1) reinstate the respondent with no loss of seniority rights and other privileges; and (2) pay respondent his backwages, 13th month pay for the year 1998 and Service Incentive Leave Pay computed from the date of his illegal dismissal up to the date of his actual reinstatement.

7.06 CONTRACT FIXED PERIODTESTS VALIDITY

BRENT SCHOOL V ZAMORA181 SCRA 702

NARVASA; February 5, 1990

NATURE Appeal from judgment FACTS - Alegre was athletic director at Brent, at a yearly compensation of P20,000. Her contract fixed a specific term of 5 years for its existence, from July, 1971, to July, 1976. Subsequent subsidiary agreements in March 1973, August 1973, and Sept. 1974 reiterated the same terms and conditions, including the expiry date, as those contained in the original contract of July, 1971.- 3 months before the expiration of the stipulated period, in April 1976, Alegre was given a copy of the report filed by Brent with the Dep. Of Labor advising of the termination of his services, effective July 16, 1976. The stated ground for termination was completion of contract, expiration of the definite period of employment. - Alegre protested the announced termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his

services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the status of regular employee and could not be removed except for valid cause.- The employment contract of 1971 was executed when the Labor Code of the Philippines had not yet been promulgated, which came into effect some 3 years after the perfection of the contract.

ISSUE WON the provisions of the Labor Code (regarding probationary/regular employees) have anathematized fixed period employment or employment for a term

HELD NOReasoning - 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 10521- The Civil Code, which has always recognized, and continues to recognize, the validity and propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on the freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services, except the general admonition against stipulations contrary to law, morals, good customs, public order or public policy. Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with pre-determined dates of completion; they also include those to which the parties by free choice have assigned a specific date of termination.-(theres a long, long history about the changes of provisions in the labor code, showing how fixed period employment became less and less acceptable...)- Where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy, morals, etc.- But where no such intent to circumvent the law is shown, where the reason for the law does not exist, e.g., where it is indeed the employee himself who insists upon a period or where the nature of the engagement is such that, without being seasonal or for a specific project, a definite date of termination is a sine qua non, would an agreement fixing a period be essentially evil or illicit, therefore anathema? Would such an agreement come within the scope of Article 2802 which

1 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.

2 Art. 280. Regular and casual employment. The provisions of written agreement to

the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

Labor Law 1 A2010 - 95 - Disiniadmittedly was enacted "to prevent the circumvention of the right of the employee to be secured in (his) employment?"- A280LC, under a narrow and literal interpretation would appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of employer's using it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head.- Familiar examples of employment contracts which may be neither for seasonal work nor for specific projects, but to which a fixed term is essential: overseas employment contracts to which, the concept of regular employment will all that it implies does not appear ever to have been applied, Article 280 of the Labor Code not withstanding; appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions, which are by practice or tradition rotated among the faculty members, and where fixed terms are a necessity, without which no reasonable rotation would be possible. Despite the provisions of Article 280, Policy, Instructions No. 8 of the Minister of Labor implicitly recognize that certain company officials may be elected for what would amount to fixed periods, at the expiration of which they would have to stand down, in providing that these officials," . . . may lose their jobs as president, executive vice-president or vice-president, etc. because the stockholders or the board of directors for one reason or another did not re-elect them."- Since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been 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.Disposition the public respondent's Decision complained of is REVERSED and SET ASIDE. Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement and the other relief awarded and confirmed on appeal in the proceedings below.

CIELO V NLRC

MILLARES V NLRC (TRANS-GLOBAL MARITIME AGENCY, ESSO INTERNATIONAL SHIPPING

COMPANY)[PAGE 79]

VIERNES V NLRC (BENGUET ELECTRIC COOP)400 SCRA 557

AUSTRIA-MARTINEZ; April 4, 2003

FACTS- The 15 complainants services were contracted as meter readers by Benguet Electric Cooperative (BENECO) for less than a months duration from October 8 to 31, 1990. Their employment contracts, couched in identical terms, read:

You are hereby appointed as METER READER (APPRENTICE) under BENECO-NEA Management with compensation at the rate of SIXTY-SIX PESOS AND SEVENTY-FIVE CENTAVOS (P66.75) per day from October 08 to 31, 1990.

- The said term notwithstanding, the complainants were allowed to work beyond October 31, 1990, or until January 2, 1991. On January 3, 1991, they were each served their identical notices of termination dated December 29, 1990. The same read:Please be informed that effective at the close of office hours of December 31, 1990, your services with the BENECO will be terminated. Your termination has nothing to do with your performance. Rather, it is because we have to retrench on personnel as we are already overstaffed.- The complainants filed separate complaints for illegal dismissal. It is the contention of the complainants that they were not apprentices but regular employees whose services were illegally and unjustly terminated in a manner that was whimsical and capricious. On the other hand, the respondent invokes Article 283 of the Labor Code in defense of the questioned dismissal.- The Labor Arbiter dismissed the complaints for illegal dismissal but directed BENECO to extend the contract of each complainant, with the exception of Viernes who was ordered to be appointed as regular employee, a months salary as indemnity for failure to give the 30-day notice, and backwages.- The NLRC declared the complainants dismissal illegal, thus ordering their reinstatement to their former position as meter readers or to any equivalent position with payment of backwages limited to one year but deleting the award of indemnity and attorneys fees. The award of underpayment of wages was affirmed.

ISSUES1. WON the NLRC committed grave abuse of discretion in ordering the reinstatement of petitioners to their former position as meter readers on probationary status in spite of its finding that they are regular employees under Article 280 of the Labor Code2. WON the NLRC committed grave abuse of discretion in limiting the backwages of petitioners to one year only in spite of its finding that they were illegally dismissed, which is contrary to the mandate of full backwages until actual reinstatement but not to exceed 3 years3. WON the NLRC committed grave abuse of discretion in deleting the award of indemnity pay which had become final because it was not appealed and in deleting the award of attorneys fees because of the absence of a trial-type hearing4. WON the mandate of immediately executory on the reinstatement aspect even pending appeal as provided in the decision of Labor Arbiters equally applies in the decision of the NLRC even pending appeal, by means of a motion for reconsideration of the order reinstating a dismissed employee or pending appeal because the case is elevated on certiorari before the Supreme Court

HELD1. YESRatio There are two separate instances whereby it can be determined that an employment is regular: (1) The particular activity performed by the employee is necessary or desirable in

Labor Law 1 A2010 - 96 - Disinithe usual business or trade of the employer; or (2) if the employee has been performing the job for at least a year.Reasoning - Petitioners fall under the first category. They were engaged to perform activities that are necessary to the usual business of BENECO. We agree with the labor arbiters pronouncement that the job of a meter reader is necessary to the business of BENECO because unless a meter reader records the electric consumption of the subscribing public, there could not be a valid basis for billing the customers. The fact that the petitioners were allowed to continue working after the expiration of their employment contract is evidence of the necessity and desirability of their service to BENECOs business. In addition, during the preliminary hearing of the case on February 4, 1991, BENECO even offered to enter into another temporary employment contract with petitioners. This only proves BENECOs need for the services of the petitioners. With the continuation of their employment beyond the original term, petitioners have become full-fledged regular employees. The fact alone that the petitioners have rendered service for a period of less than 6 months does not make their employment status as probationary.- The principle [exception to the rule in Ratio] enunciated in Brent School vs. Zamora applies only with respect to fixed term employments. While it is true that petitioners were initially employed on a fixed term basis as their employment contracts were only for October 8 to 31, 1990, after October 31, 1990, they were allowed to continue working in the same capacity as meter readers without the benefit of a new contract or agreement or without the term of their employment being fixed anew. After October 31, 1990, the employment of petitioners is no longer on a fixed term basis. The complexion of the employment relationship of petitioners and BENECO is thereby totally changed. Petitioners have attained the status of regular employees.2. YESReasoning - A279 LC, as amended by RA 6715 [effective March 21, 1989], provides that an illegally dismissed employee is entitled to full back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Since petitioners were employed on October 8, 1990, the amended provision shall apply to the present case. Hence, it was patently erroneous, tantamount to grave abuse of discretion on the part of the NLRC in limiting to one year the back wages awarded to petitioners.3. YESRatio An employer becomes liable to pay indemnity to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due processReasoning - The indemnity is in the form of nominal damages intended not to penalize the employer but to vindicate or recognize the employees right to procedural due process which was violated by the employer. Under A2221 CC, nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.- Indemnity is not incompatible with the award of back wages. These two awards are based on different considerations. Back wages are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. On the other hand, the award of indemnity is meant to vindicate or recognize the right of an employee to due process which has been violated by the employer. In this case, BENECO failed to comply with the provisions of Article 283 of the Labor Code which requires an employer to serve a notice of dismissal upon the employees and to the Department of Labor, at least one month before the intended date of termination. As to the award of attorneys fees, the same is justified by the provisions of Article 111 of the Labor Code.

4. YESReasoning- A223 LC is plain and clear that the decision of the NLRC shall be final and executory after 10 calendar days from receipt by the parties. In addition, Section 2(b), Rule VIII of the New Rules of Procedure of the NLRC provides that should there be a motion for reconsideration entertained pursuant to Section 14, Rule VII of these Rules, the decision shall be executory after 10 calendar days from receipt of the resolution on such motion. We find nothing inconsistent or contradictory between the two. The provision of the NLRC Rules of Procedure merely provides for situations where a motion for reconsideration is filed. Since the Rules allow the filing of a motion for reconsideration of a decision of the NLRC, it simply follows that the ten-day period provided under Article 223 of the Labor Code should be reckoned from the date of receipt by the parties of the resolution on such motion. In the case at bar, petitioners received the resolution of the NLRC denying their motion for reconsideration on October 22, 1992. Hence, it is on November 2, 1992 that the questioned decision became executory. Disposition Petition PARTLY GRANTED. Decision of the NLRC is MODIFIED. BENECO is ordered to reinstate petitioners to their former or substantially equivalent position as regular employees, without loss of seniority rights and other privileges, with full back wages from the time of their dismissal until they are actually reinstated. The indemnity to petitioners is REINSTATED. BENECO is also ordered to pay attorneys fees in the amount of 10% of the total monetary award due to the petitioners. In all other respects the assailed decision and resolution are AFFIRMED.

PHILIPS SEMICONDUCTORS V FADRIQUELA [PAGE 77]

PANGILINAN V GENERAL MILLING CORPORATION [PAGE 74]

SEASONAL EMPLOYEES

MAGCALAS V NLRC (KOPPEL INC)269 SCRA 453

PANGANIBAN; March 13, 1997

NATUREAppeal from decision of the NLRC

FACTS- Complainants alleged that they were all regular employees of the respondent company, having rendered continuous services in various capacities, ranging from leadman, tinsmith, tradeshelper to general clerk.- The complainants have worked for a number of years, the minimum of which was 1.5 years and the maximum was 8 years under several supervisors.- August 30, 1988: they were dismissed without prior notice and investigation, and that their dismissals were effected for no other cause than their persistent demands for payment of money claims as mandated by law.- Respondent company averred that the manufacturing aspect of its operation is handled by its regular employees, while the installation aspect, by reason of its intermittence, is carried out by its project or contract employees.

Labor Law 1 A2010 - 97 - Disini- The complainants herein were among the contract employees hired by the respondent to install the air-conditioning equipment at the ADB and Interbank projects.- With the completion of their task in their respective projects, the employment of the complainants expired as they had no more work to do.- Labor arbiter ordered petitioners to be reinstated and to be paid backwages from the time of their dismissal/termination to their actual reinstatement.- NLRC reversed decision and ordered respondent to pay the petitioners their separation pay.

ISSUES1. WON petitioners were regular workers under the contemplation of A280 LC2. WON petitioners' termination and/or cessation of their employments on August 30, 1988 were justified under the contemplation of A279 of the LC as amended.

HELD1. YESRatio The services of project employees are co-terminous with the project and may be terminated upon the end or completion of the project for which they were hired. Regular employees, in contrast, are legally entitled to remain in the service of their employer until that service is terminated by one or another of the recognized modes of termination of service under the Labor Code.Reasoning- A mere provision in the CBA recognizing contract employment does not sufficiently establish that petitioners were ipso facto contractual or project employees. In the same vein, the invocation of Policy No. 20 governing the employment of project employees in the construction industry does not, by itself, automatically classify private respondent as part of the construction industry and entitle it to dismiss petitioners at the end of each project. These facts cannot be presumed; they must be supported by substantial evidence- The record discloses that the complainants worked not only in one special project but also variably in other projects/jobsites contracted by Koppel Incorporated. Some of them, after their tour of duty on these different jobsites were reassigned to the respondent's plant at Koppel Compound, Paraaque, Metro Manila. A close examination of the record further reveals that the "special projects" at the ADB and Interbank to which the complainants were last assigned by the respondent were still in operation before their alleged termination from employment. Under these factual milieu, we believe that they had been engaged to work and perform activities which were necessary and desirable in the air-conditioning and refrigeration installation/repair business of the respondent employer, especially where, as in this case, the very nature of such trade indicates that it can hardly fall under the exception of Policy Instruction No. 20 which applies only to the construction industry. For this reason, and considering the facts narrated in the complainants' sworn statements were neither disputed nor refuted by contrary evidence by the respondent, it becomes apparent and increasingly clear that indeed they would and ought to be classified as regular employees.- Regular employees cannot at the same time be project employees. Article 280 of the Labor Code states that regular employees are those whose work is necessary or desirable to the usual business of the employer. The two exceptions following the general description of regular employees refer to either project or seasonal employees- In the realm of business and industry, we note that "project" could refer to one or the other of at least two distinguishable types of activities. Firstly, a project could refer to 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. 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 employment of seasonal employees, on the other hand, legally ends upon completion of the project or the season.- The overwhelming fact of petitioners' continuous employment as found by the labor arbiter ineludibly shows that the petitioners were regular employees. On the other hand, we find that substantial evidence, applicable laws and jurisprudence do not support the ruling in the assailed Decision that petitioners were project employees. The Court here reiterates the rule that all doubts, uncertainties, ambiguities and insufficiencies should be resolved in favor of labor. It is a well-entrenched doctrine that in illegal dismissal cases, the employer has the burden of proof. This burden was not discharged in the present case.2. NORatio For a dismissal of an employee to be valid, two requisites must be met: (1) the employee is afforded due process, meaning, he is given notice of the cause of his dismissal and an adequate opportunity to be heard and to defend himself; and (2) the dismissal is for a valid cause as indicated in Article 282 of the Labor Code.Reasoning- The services of petitioners were purportedly terminated at the end of the ADB and Interbank projects, but this could not have been a valid cause for, as discussed above, they were regular and not project employees.- As a consequence of their illegal termination, petitioners are entitled to reinstatement and backwages in accordance with the Labor Code. The backwages however are to be computed only for three years fromthe date of their dismissal, without deduction or qualification. - Where the illegal dismissal transpired before the effectivity of RA 6715 (March 21, 1989), the award of backwages in favor of the dismissed employees is limited to three years without deduction or qualification.Disposition The petition is GRANTED. The assailed Decision and Resolution are REVERSED and SET ASIDE and the decision of the labor arbiter is REINSTATED, with backwages to be computed as above discussed.

PHILIPPINE TOBACCO V NLRC300 SCRA 37

PANGANIBAN; December 10, 1998

NATURE Petition for review on certiorari

FACTS - This involves 2 groups of seasonal workers: Lubat group and Luris group. They claimed separation benefits after closure of processing plant and transfer of tobacco operations to Ilocos. Petitioner refused to grant separation pay to Lubat group because they had not been given work during preceding year. It also refused to grant same to Luris group because of closure due to serious business losses.

ISSUES 1. WON the Luris group has been illegally dismissed2. WON the Lubat group has been illegally dismissed

HELD 1. YES- Serious business losses were not proven.- To justify retrenchment: (1) losses expected should be substantial and not merely de minimis. (2) substantial loss must be reasonably imminent. (3) retrenchment must be reasonably necessary. Employer should have taken other measures. (4) alleged losses must be proven by sufficient and convincing evidence.- Here, we consider the fact that the petitioner did not actually close its operations but merely transferred its processing and

Labor Law 1 A2010 - 98 - Disiniredrying operations.- It was also engaged in corn and rental operations.- Notice of termination, though issued, violated the one month prior notice requisite.2. YES- SEASONAL WORKERS WHO ARE CALLED FROM TIME TO TIME AND ARE TEMPORARILY LAID OFF DURING OFF-SEASON ARE NOT SEPARATED FROM SERVICE IN SAID PERIOD, BUT ARE MERELY CONSIDERED ON LEAVE UNTIL REEMPLOYED.- The employer-employee relationship between petitioner and Lubat group was not terminated at the end of 1993 season.

SAN MIGUEL CORPORATION V NLRC (GUZMAN) [PAGE 75]

MANILA HOTEL COMPANY V CIR 9 SCRA 184

BAUTISTA ANGELO; September 30, 1963

NATUREAppeal from CIRs judgment

FACTS- February 24, 1960 - The Pines Hotel Employees Association(PHEA) filed before the CIR a petition praying, among other things, that its employees who were working at the Pines Hotel be paid additional compensation for overtime service rendered due to the exigencies of the business, as well as additional compensation for Sunday, legal holiday and nighttime work.- The Manila Hotel filed its answer denying the material averments of the petition and alleging, among others, that if overtime service was rendered the same was not authorized but was rendered voluntarily, for the employees were interested in the "tips" offered by the patrons of the hotel.- CIR- judged that the employees were entitled to the additional compensation demanded, including that for overtime work, because an employee who renders overtime service is entitled to compensation even if he rendered it without prior authority. - MR was filed, but the same was denied by the industrial court en banc.1awphl.nt- The Examining Division (CIR) submitted a report- stated that the amount due the employees as additional compensation for overtime and night services rendered from January to December 31, 1958 was P32,950.69.- The management filed its objection to the report on the ground that it included 22 names of employees who were not employees of the Pines Hotel at the time the petition was filed so that insofar as said employees are concerned the petition merely involves a money claim which comes under the jurisdiction of the regular courts. - The trial judge, however, overruled this objection holding that, while the 22 employees were actually not in the service at the time of the filing of the petition, they were however subsequently employed even during the pendency of the incident, and so their claim comes within the jurisdiction of the Court of Industrial Relations.

ISSUEWON the 22 seasonal employees were correctly adjudged the additional compensation including that for OT

HELDYESRatio Seasonal employees called to work from time to time and temporarily laid off from during off season are REGULARS but are on LOA w/o pay.Reasoning - It appears that the questioned employees were never separated from the service. - Their status is that of regular seasonal employees who are called to work from time to time, mostly during summer season.

- The nature of their relationship with the hotel is such that during off season they are temporarily laid off but during summer season they are re-employed, or when their services may be needed. - They are not strictly speaking separated from the service but are merely considered as on leave of absence without pay until they are re-employed. Their employment relationship is never severed but only suspended. As such, these employees can be considered as in the regular employment of the hotel.Disposition The order appealed from is affirmed.

INDUSTRIAL-COMMERCIAL-AGRICULTURALWORKERS' ORGANIZATION V CIR

16 SCRA 562REYES; March 31, 1966

NATUREAppeal from decision of the Court of Industrial Relations

FACTS- Petitioner, Industrial-Commercial- Agricultural Workers' Organization (ICAWO), declared a strike against the respondent Central Azucarera de Pilar. The strike was amicably settled the following day, and among the provisions of the "Amicable Settlement" reads:

"That the company shall not discriminate against any worker and the same treatment shall be accorded to workers (ICAWO affiliates) who declared a strike or not. A petition for Certification Election will be filed by the ICAWO in view of the other labor union, CAPAWA, with whom the company has an existing collective bargaining contract, a union which is considered by the ICAWO as a company union."

- The CAPAWA therein referred to is the herein respondent Central Azucarera de Pilar Allied Workers Association and the collective bargaining contract, likewise therein referred to, entered into in 1955, provided:

"The EMPLOYER agrees that in hiring unskilled employees and laborers, the members of the WORKERS ASSOCIATION should be given preference and the management should notify accordingly to the WORKERS ASSOCIATION of any vacancy existing in all Departments. New employees and laborers hired who are members of the WORKERS ASSOCIATION will be on TEMPORARY STATUS and the EMPLOYER agrees that before they will be considered regular employees and laborers they have to become members of the CENTRAL AZUCARERA DE PILAR ALLIED WORKERS' ASSOCIATION within thirty (30) days from the date of employment and if they refuse to affiliate with the said labor organization within this time they will be immediately dismissed by the EMPLOYER;"

- Among the strikers were 101 seasonal workers, some of whom have worked as such for the company since pre-war years. On the opening of the milling season for the year 1956-1957, the respondent company refused to re-admit those 101 seasonal workers of the ICAWO on the ground that it was precluded by the closed shop clause in its collective bargaining agreement with the CAPAWA. Thus, , the ICAWO filed an unfair labor practice charge against the company. The Court of Industrial Relations in a decision ordered the reinstatement, with back wages, of these laborers; but on a motion for reconsideration, the said court, en banc, reversed the said decision.Not satisfied with the reversal, the ICAWO filed the present petition for certiorari to review the industrial court's resolution.- The petitioner contends that they are regular and old employees and, as such, they should have been re-hired at the start, in the month of October, of each milling season, which usually last 5 months. The respondents, on the other hand, urge that these laborers are new, their employment terminating at the end of each milling season and, therefore, could not be re-admitted without the company violating the closed shop agreement with the CAPAWA.

ISSUE

Labor Law 1 A2010 - 99 - DisiniWON seasonal workers are new workers

HELDNO- Petitioners, even if seasonal workers, were not new workers within the scope of the closed shop contract between the sugar central and the CAPAWA union; hence their discharge was illegal. - The cessation of the Central's milling activities at the end of the milling season is not permanent or definitive; it is a foreseeable suspension of work, and both activities will be resumed, as they are in fact resumed, when sugar cane ripe for milling is again available. There is merely a temporary cessation of the manufacturing process due to passing shortage of raw materials that by itself alone is not sufficient, in the absence of other justified reasons, to sever the employment or labor relationship between the parties. The mere fact that the laborers assent to their medical examination at the beginning of each milling season does not indicate that a new labor contract is being entered into, in the absence of a stipulation to such effect. Said examination is in the interest of both the Central and the labor force. Disposition Resolution set aside

HACIENDA BINO V CUENCA456 SCRA 300

CALLEJO SR; April 15, 2005

FACTS- Hacienda Bino (HB) is a 236-hectare sugar plantation in Negros Occ, owned and operated by Hortencia Starke. HB consists of 220 workers performing various works, such as cultivation, planting of cane points, fertilization, watering, weeding, harvesting, and loading of harvested sugarcanes to cargo trucks. On July 18 1996, Starke issued a notice that those who signed in favor of CARP are expressing their desire to get out of employment. 76 workers were affected: they regarded the notice as a notice of their termination. They filed a complaint for illegal dismissal, wage differentials, 13th month pay, holiday pay and premium pay for holiday, service incentive leave pay, and moral and exemplary damages.- Starkes side: HBs board of directors were petitioning for reclassification of the hacienda (except the portion earmarked for CARP) from agricultural to industrial, residential and commercial. She was merely giving priority to those who supported the reclassification. July 1996 was off-season, so not so many workers needed; the work was seasonal in nature. She relies on the ruling in Mercado Sr. v. NLRC where sugar farm workers were classified as seasonal employees, and not regular employees. The workers were free to offer their services to neighboring haciendas.- Respondents side: They are regular employees. The hacienda was so big that they work there year-round and that they do not offer their services to neighboring haciendas. The Mercado case dealt with a 17.5-heactare hacienda, considerable smaller than HB.

ISSUEWON the respondents are seasonal employees

HELDNO- The respondents are regular employees.- Starkes reliance on Mercado is misplaced because in that case, the workers were classified as seasonal employees because they were employed for a definite period of time since the hacienda was much smaller, and they offered their services to and worked at the neighboring haciendas. - The Court reiterated the same observations in Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade and added that the petitioners in the Mercado case were "not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase

thereof." Starke did not present any evidence that the respondents were required to perform certain phases of agricultural work for a definite period of time. Although she asserted that the respondents made their services available to the neighboring haciendas, the records do not, however, support such assertion.- The primary standard for 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. There is no doubt that the respondents were performing work necessary and desirable in the usual trade or business of an employer. Hence, they can properly be classified as 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 been employed only for the duration of one season. While the records sufficiently show that the respondents' work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration of one season only. In fact, the payrolls, submitted in evidence by the petitioners, show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand. It bears stressing that the employer has the burden of proving the lawfulness of his employee's dismissal.Disposition Petition denied. Reinstate workers without loss of seniority, pay backwages and wage differentials, and pay attys fees.

POSEIDON FISHING V NLRC (ESTOQUIA)482 SCRA 717

CHICO-NAZARIO; February 20, 2006

FACTS- Estoquia was first hired by PF as a Chief Mate in 1988. He later on became Boat Captain; but was demoted still later to Radio Operator. In 2000, he failed to log a 7:25am call in one logbook, but was able to record it in another one. When he realized his mistake, he logged the 7:25 call after a 7:30 am call (same day). The manager noticed this mistake and summoned Estoquia to get his separation pay. Estoquia refused to accept the sep pay because he believed he had done nothing illegal to warrant his immediate discharge from work.- PF argues that Estoquia was a casual/contractual employee whose services could be terminated at the end of contract. PF contends that Estoquia was hired on a por viaje basis, based on the Kasunduan which reads:

NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA ng mga gawaing magmula sa pag-alis ng lantsa sa pondohan sa Navotas patungo sa palakayahan; pabalik sa pondohan ng lantsa sa Navotas hanggang sa paghango ng mga kargang isda.

- LA and NLRC found for Estoquia.

ISSUEWON Estoquia was a regular employee when he was discharged from work

HELDYES- PF's intent to evade the application of Article 280 of the Labor Code is unmistakable. In a span of 12 years, Estoquia worked for petitioner company first as a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon. His work was, therefore, necessary and important to the business of his employer. Such being the scenario involved, private respondent is considered a regular employee of petitioner under Article 280 of the Labor Code.- Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, the terms of employment of private respondent as provided in the Kasunduan was not

Labor Law 1 A2010 - 100 - Disinionly vague, it also failed to provide an actual or specific date or period for the contract.- Furthermore, as petitioners themselves admitted, private respondent was repeatedly hired as part of the boat's crew and he acted in various capacities onboard the vessel. In Integrated Contractor and Plumbing Works, Inc. v. NLRC, it was held that the test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. And, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business.- The act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners' business or trade.ESTOQUIA IS NOT PROJECT/SEASONAL EMPLOYEE- The activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. In Philex Mining Corp. v. NLRC, project employees were defined as those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at the time of the engagement of the employee. The principal test for determining whether particular employees are "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. In this case, petitioners have not shown that private respondent was informed that he will be assigned to a "specific project or undertaking." Neither has it been established that he was informed of the duration and scope of such project or undertaking at the time of their engagement.- More to the point, in Maraguinot, Jr. v. NLRC, the SC ruled that once a project or work pool employee has been:

(1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.

- In fine, inasmuch as private respondent's functions as described above are no doubt "usually necessary or desirable in the usual business or trade" of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular employee. Being one, private respondent's dismissal without valid cause was illegal. And, where illegal dismissal is proven, the worker is entitled to back wages and other similar benefits without deductions or conditions.Disposition Petition denied.

SECTION 8: PROBATIONARY EMPLOYEES

8.01 PROBATIONARY EMPLOYEESDEFINITION

INTERNATIONAL CATHOLIC MIGRATION COMMISSION V NLRC (GALANG)

169 SCRA 606

FERNAN; January 30, 1989

NATUREPetition to review the decision of the NLRC

FACTS- Petitioner International Catholic Migration Commission (ICMC), a non-profit organization dedicated to refugee service at the Philippine Refugee Processing Center in Morong, Bataan engaged the services of private respondent Bernadette Galang as a probationary cultural orientation teacher with a monthly salary of P2,000.00. - Three (3) months thereafter, private respondent was informed, orally and in writing, that her services were being terminated for her failure to meet the prescribed standards of petitioner as reflected in the performance evaluation of her supervisors - Private respondent filed a complaint for illegal dismissal, unfair labor practice and unpaid wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral damages. - Labor Arbiter Pelagio A. Carpio rendered his decision dismissing the complaint for illegal dismissal as well as the complaint for moral and exemplary damages but ordering the petitioner to pay private respondent the sum of P6,000.00 as payment for the last three (3) months of the agreed employment period pursuant to her verbal contract of employment.- Both parties appealed the decision to the National Labor Relations Commission. - The NLRC, by a majority vote, sustained the decision of the Labor Arbiter and thus dismissed both appeals for lack of merit. - Dissatisfied, petitioner filed the instant petition.

ISSUEWON an employee who was terminated during the probationary period of her employment is entitled to her salary for the unexpired portion of her six-month probationary employment

HELDNO- There is justifiable basis for the reversal of public respondent's award of salary for the unexpired three-month portion of private respondent's six-month probationary employment in the light of its express finding that there was no illegal dismissal- There is no dispute that private respondent was terminated during her probationary period of employment for failure to qualify as a regular member of petitioner's teaching staff in accordance with its reasonable standards: private respondent was found by petitioner to be deficient in classroom management, teacher-student relationship and teaching techniques.- Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee specifically recognized under Article 282 (now Article 2813) of the Labor Code. - It must be noted that notwithstanding the finding of legality of the termination of private respondent, public respondent justified the award of salary for the unexpired portion of the probationary employment on the ground that a probationary employment for six (6) months is an employment for a "definite period" which requires the employer to exhaust the entire probationary period to give the employee the opportunity to meet the required standards. - The legal basis of public respondent is erroneous. A probationary employee, as understood under Article 282 (now

3 ART. 281. Probationary employment. Probationary employment shall not exceed

six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employer who has been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employer in accordance with reasonable standard made known by the employer to the employer at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

Labor Law 1 A2010 - 101 - DisiniArticle 281) of the Labor Code, is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. - The word "probationary", as used to describe the period of employment, implies the purpose of the term or period, but not its length. - Being in the nature of a "trial period" the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period.- A281 LC gives ample authority to the employer to terminate a probationary employee for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. - There is nothing under Article 281 of the Labor Code that would preclude the employer from extending a regular or a permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period. Conversely, Article 281 of the Labor Code does not likewise preclude the employer from terminating the probationary employment on justifiable causes as in the instant case. - There was no showing, as borne out by the records, that there was circumvention of the rights of private respondent when she was informed of her termination. Private respondent was duly notified, orally and in writing, that her services as cultural orientation teacher were terminated for failure to meet the prescribed standards of petitioner.- The dissatisfaction of petitioner over the performance of private respondent in this regard is a legitimate exercise of its prerogative to select whom to hire or refuse employment for the success of its program or undertaking. - It was a grave abuse of discretion on the part of public respondent to order petitioner to pay private respondent her salary for the unexpired three-month portion of her six-month probationary employment when she was validly terminated during her probationary employment. To sanction such action would not only be unjust, but oppressive on the part of the employerDisposition Petition granted.

PHIL. FEDERATION OF CREDIT COOPERATIVES INC (PFCCI) V NLRC (ABRIL)

[PAGE 73]

PURPOSE

PHILEMPLOY SERVICES V RODRIGUEZ486 SCRA 302

CARPIO; March 31, 2006

NATURE Petition for review to annul CA decision

FACTS - Anita RODRIGUEZ applied with respondent PHILEMPLOY Services and Resources, Inc. for deployment abroad as a factory worker. When she was asked to report for work, Ms. Brenda Castro, an official of respondent, demanded from her the sum of P60T as placement fee. - Since she could not afford such amount, they agreed that she would initially pay P30T as downpayment and the balance of P30T, plus 7% interest every month thereafter through salary

deductions. She then paid Ms. Castro the P30T but was not issued any receipt.- Thereafter, she executed a contract of employment as a domestic helper of one Chao Hung Ching of Taipei, Taiwan with a monthly salary of NT$14,010, plus free food and accommodation for a period of 1 year. - On 13 Jan 1995, she was deployed to Taiwan. As such DH, she worked from 5am until 10pm. Among her chores were to carwash the vehicle of her master, cook the meals, housecleaning and babysitting. On 24 Jan 1995, she had a talk with her master where she was told that she is being sent home due to certain problems. - Complainant pleaded that she continue her employment, confronted as she was with the debts she had to pay. But she was sent home the following day. While at the airport, a certain Ms. Go forced her to sign an Affidavit where it stated that her leaving as a DH was voluntary and that she would assume all the obligations for her travel back to the Philippines.- She was only paid the sum of NT$1,931 (12 days work)- Respondent alleged that it was stipulated and agreed upon in the contract, that she would undergo a 40-day probationary period before she becomes a regular domestic helper. Also, she was charged of her placement fees as allowed by law and by the POEA rules and regulations. During the first 10 days of her probationary period, she was observed to be inattentive and incompetent to perform her duties and responsibilities. - Labor Arbiter ruled in favor of Rodriguez.- NLRC deleted award of P155T for unearned wages since there is no illegal dismissal that took place. - CA reversed NLRC decision and reinstated Labor Arbiters.

ISSUES1. WON Rodriguez was illegally dismissed2. WON she was afforded due process

HELD 1. NORatio Even if it were true that Anitas foreign employer terminated her services after 10 days of her employment, there could be no illegal dismissal as the termination was effected during the agreed probationary period. - There is probationary employment4 where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement.2. NORatio Although Anitas employment was terminated because she failed to meet the standards of her foreign employer, still it is necessary and obligatory to afford Anita her basic right to notice. - Section 2, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code provides:(d) In all cases of termination of employment, the following standards of due process shall be substantially observed: If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination . Reasoning - Anita was repatriated to the Philippines on 25 January 1995. On the night before her departure, her employers wife merely told her that she was sending her home on account of some problem. This information given to Anita cannot be considered as equivalent to the written notice required by law to be served on the employee. The notice should inform the employee of the ground or grounds for his termination and that his dismissal is being sought.

4 Section 6, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code

Labor Law 1 A2010 - 102 - Disini* Thus, absence of notice makes her termination DEFECTIVE for which petitioner must be sanctioned for its non-compliance with the requirements of or for failure to observe due process. - As held in the Agabon case: Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights.Disposition Petition GRANTED. CA decision set aside. However, petitioner Philemploy Services and Resources, Inc. shall pay respondent Rodriguez P30T as nominal damages.

DELA CRUZ V NLRC418 SCRA 226

CORONA; December 11, 2003

NATUREPetition for review on certiorari

FACTS- On May 27, 1996, petitioner Florencio de la Cruz, Jr. was hired by private respondent Shemberg Marketing Corporation as senior sales manager, a newly created position in line with the companys objective of product positioning in the consumer market. However, on Sept. 14, 1996, petitioner was informed that his services were terminated. His request for a meeting with Shembergs VP and to be furnished a 30-day written notice was denied by management. Hence, petitioner filed a complaint for illegal dismissal., non-payment of salary, backwages, 13th month pay and damages.- Private respondent answered that petitioners dismissal was premised, among others, on his unauthorized reimbursement of the plane tickets of his wife and child, resulting to loss of trust and confidence of the company.- Labor arbiter ruled that petitioner was illegally dismissed and granted his claim for separation pay, backwages and unpaid wages. Upon appeal, NLRC modified the decision, deleting the award for separation pay and backwages. Hence, this petition.

ISSUEWON petitioner was legally dismissed, as he was a probationary employee

HELDYES- Petitioner was hired by Shemberg on May 27, 1996 and was terminated on Sept. 14, 1996. A281 LC provides:

Probationary employment shall not exceed six (6) months from the date the employee started working , unless it is covered in apprenticeship[ agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards, made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

- The evidence on record clearly shows that petitioner was well informed of the standards to be met before he could qualify as a regular employee. Attached to his appointment papers was a job description of sales manager.- A probationary employee is one who, for a given period of time, is under observation or evaluation to determine whether or not he is qualified for permanent employment. During the probationary period, the employer is given the opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during this period.- There is no dispute that petitioner, as a probationary employee enjoyed only a temporary employment status. This

meant that he was terminable anytime, permanent employment not having been attained in the mean time. The employer could well decide he no longer needed the probationary employees service or hi performance fell short of expectation. As long as the termination was made before the expiration of the 6-month probationary period, the employer was well within his rights to sever the employer-employee relationship. A contrary interpretation would defect the clear meaning of the term probationary. In this case, Shemberg had good reason to terminate petitioners employment. Petitioner was holding a managerial position in which he was tasked to perform key functions in accordance with an exacting work ethic. His position required the full trust and confidence of his employer. While petitioner could exercise some discretion, this obviously did not cover acts for his own personal benefit. He committed a transgression which betrayed the trust and confidence of his employer reimbursing his familys personal travel expenses out of company funds.Disposition Petition is DISMISSED. The decision of the CA is affirmed.

GRAND MOTORS PARTS CORP V MINISTER OF LABOR

GUERRERO; July 16, 1984

NATUREPetition for certiorari assailing the Order of the Minister of Labor which affirmed the decision of the Regional Director of Region VI

FACTS- Respondent Balicena was the Branch Manager of the petitioner companys Iloilo Branch. He was the Finance Officer of Warner, Barnes, & Co. (no.2 of the company) when allegedly, Mr. Alfredo Cisneros (the then acting branch manager of the company in Iloilo) induced him to apply for the position of Branch Manager, as their company (petitioner) was looking for a CPA. He applied for the job and was accepted. He started working for the petitioner company on April 1 but resigned from his position in Warner, Barnes, & Co. only on April 28. - However, he was terminated only after working for the company for 4 months (April to August). Petitioner company alleged that (a) he failed to submit promptly the monthly Income and Loss Statement, Comparative Projections & Actual Sales Report; (b) the Comparative Performance Report dated July 8, 1980 on the operation of the Iloilo Branch for the month of June and May, 1980, the Cash Sales of the Iloilo Branch went down to P91,318.41 for June, 1980, as compared with the sales for the month of May, 1980 in the sum of P174,697.77; (c) Belicena in violation of company policy and without clearance from the head office in Cebu, extended personal accounts in favor of 15 persons which as of November, 1980 produced delinquent accounts amounting to P18,435.80; and (d) Belicena claimed lack of knowledge of the vehicular accident caused by a subordinate and failed to provide prompt administrative disciplinary action against the erring employee. They claimed that Balicena is only a probationary employee, which would be observed by the company for 4-6 months and that Balicena knew that there is a possibility that he would not get the job.- Balicena on the other hand alleged that he is a regular employee, although he was not able to present any contract establishing his status as a regular employee; that the mishap involving the company's vehicle which was used without his permission and knowledge could not be blamed upon him; that the alleged reports which he failed to send were not reminded to him, verbally or in writing; that his sales for the period April to August, 1980 is higher compared to that for the same period in 1979; and that the alleged accounts remaining unpaid as of November 6, 1980 would have been collected in full if he were still the Manager, among other things.- Regional Director and Minister of Labor ruled in favor of Balicena, ordering his reinstatement, payment of his backwages, and other privileges.

Labor Law 1 A2010 - 103 - DisiniISSUES1. WON private respondent's employment as Branch Manager was probationary, and not regular and permanent2. WON private respondent, if hes a probationary Branch Manager, was terminated for just cause

HELD1. YESRatio Indeed, the employer has the right or is at liberty to choose as to who will be hired and who will be declined. It is within the exercise of this right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. "The right of a laborer to sell his labor to such persons as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution. 'If the employer can compel the employee to work against the latter's will, this is servitude. If the employee can compel the employer to give him work against the employer's will, this is oppression.'"Reasoning- First, Balicena could not present any written proof of his appointment or employment as regular and permanent Branch Manager of petitioner corporation. Then there was the fact that he assumed his work as of April 1 but resigned from his previous company only on April 28, meaning that if he was really appointed as regular and permanent then he would have resigned immediately from his old company. But since he was not yet sure of his status in the petitioner corporation, he resigned late.-Second, Balicena claims that there was no written contract because the contracts were given only to those who will pass the probationary period and the rank-and-file employees not to those managerial ones. This practice is not supported and contrary to usual business practice. Also, being a CPA, Finance Officer, and No.2 man in his former company, he should have insisted on a written contract for the security of his tenure in his new position! (in short, he already had a stable position in his former company and in not insisting on a written contract, he took the risk of being joblessfor he may be terminated as Branch Manager!)-Third, Balicena had never been hired as manager, and the petitioner company and Balicenas former company are engaged in different kinds of business so it was necessary for Balicena to undergo a period of probation to test his qualifications, skills and experience since managing is a new experience for him.2. YESRatio A probationary employee may be terminated after six months for a just cause or when he fails to qualify as a regular employee. It is true that mere allegation of loss of confidence by employer on his employee is not sufficient cause for his dismissal. But loss of confidence is a valid ground for dismissing an employee, and proof beyond reasonable doubt of the employee's misconduct is not required to dismiss him of this charge. It is sufficient if there is some basis for such loss of confidence.Reasoning- Balicena was proven and demonstrated to fail in submitting monthly reports. A monthly report of operations is essential to the business of the petitioner company, and this cannot be ignored by a Branch Manager for the viability of its business life may well depend on these reports.- Second, it was proven that after being on the job as Branch Manager for nearly a month, Balicena wrote to the company to ask what his duties were. This manifests that Balicena had not shown any effort or initiative to familiarize himself with his duties and obligations, although petitioner corporation provided him with a brochure containing what he was supposed to do.- Third, he cannot escape responsibility for the acts of his subordinates (vehicular accident which he claims that he did

not know) and for extending personal accounts to some individuals in violation of their companys policy.- Fourth, the sales target were not being reached, and because of this, the Vice President/GM notified him about this (Can we not improve that performance this July?). Balicena was clearly not discharging his duties to the satisfaction of the management. - SO THEREFORE: [The Court is] satisfied that petitioner has valid grounds to charge its Branch Manager with loss of confidence by reason of the overall performance he has demonstrated within the probationary period which showed that he is not qualified to be the regular or permanent Branch Manager of petitioner corporation in Iloilo City. His dismissal does not appear to Us as arbitrary, fanciful or whimsical. In the last and ultimate analysis, the prerogative and judgment to hire employees under terms and conditions designed to achieve success in its business activities belongs to management which may not be unduly impaired, limited or restricted.Disposition the Order of the Deputy Minister of Labor dated October 22, 1981 is hereby REVERSED and SET ASIDE.

INTERNATIONAL CATHOLIC MIGRATION COMMISSION V NLRC (GALANG)

[PAGE 98]

PHIL. FEDERATION OF CREDIT COOPERATIVES INC (PFCCI) V NLRC (ABRIL)

[PAGE 73]

ESCORPIZO V UNIVERSITY OF BAGUIO306 SCRA 497

QUISUMBING; April 30, 1999

NATURESpecial civil action for certiorari

FACTS- Petitioner Esperanza Escorpizo was initially hired by respondent university on June 13, 1989 as a high school classroom teacher. Under the rules of the respondent university, appointment to teach during the first two years at the university is probationary in nature. During the probation period, the teacher is observed and evaluated to determine his competency. Attainment of a permanent status by a faculty member is conditioned upon compliance with certain requirements, such as passing the professional board examination for teachers (PBET).- On March 18, 1991, respondent university informed Escorpizo that her employment was being terminated at the end of the school semester in view of her failure to pass the PBET. But before the start of the school year 1991-1992, Escorpizo reapplied and pleaded that she be given another chance. She told the respondent school that she had just taken the PBET and hoped to pass it.- As Escorpizos appeal was favorably considered, she was allowed to teach during the school year 1991-1992. However, her continued employment was conditioned on her passing the PBET. Unfortunately, Escorpizo failed again. Undaunted, Escorpizo took the examination a third time. At the end of the school year, respondent university evaluated the teachers performance to determine who would be in the list for the next school year. Escorpizo, not having passed the PBET yet, was not included.- Much later, on June 8, 1992, the results of the PBET were released and this time Escorpizo passed said examination. Nevertheless, on June 15, 1992, respondent university no longer renewed Escorpizos contract of employment on the ground

Labor Law 1 A2010 - 104 - Disinithat she failed to qualify as a regular teacher. This prompted Escorpizo to file on July 16, 1992 a complaint for illegal dismissal, payment of backwages and reinstatement against private respondents.

ISSUEWON the dismissal was illegal since Escorpizo had attained the status of a regular employee having rendered very satisfactory performance as probationary teacher for two years, consistent with the collective bargaining agreement between the respondent university and petitioner union of which Escorpizo is a member

HELDNO- Escorpizo was not illegally dismissed. Her contract merely expired.Ratio A probationary employee is one who, for a given period of time, is being observed and evaluated to determine whether or not he is qualified for permanent employment. A probationary appointment affords the employer an opportunity to observe the skill, competence and attitude of a probationer. The word probationary, as used to describe the period of employment, implies the purpose of the term or period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer at the same time, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment.Reasoning- the rules of the university clearly states that the first two years at the University is probationary in nature and the following conditions must concur in order that a probationary teacher may be extended a regular appointment; (1) the faculty member must satisfactorily complete the probationary period of four semesters or two years, within which his performance shall be observed and evaluated for the purpose of determining his competency and fitness to be extended permanent status; and (2) the faculty member must pass the PBET or an equivalent civil service examination. Escorpizo failed to meet the 2nd requirement to be a regular employee which is to pass the PBET.- Though the CBA does not mention that passing the PBET is a prerequisite for attaining permanent status as a teacher. Nevertheless, the aforecited CBA provision must be read in conjunction with statutory and administrative regulations governing faculty qualifications. It is settled that an existing law enters into and forms part of a valid contract without the need for the parties expressly making reference to it.[16] Further, while contracting parties may establish such stipulations, clauses, terms and conditions as they may see fit, such right to contract is subject to limitation that the agreement must not be contrary to law or public policy.- DECS Order No. 38, series of 1990, a regulation implementing Presidential Decree No. 1006[18] or the Decree Professionalizing Teaching stipulates that no person shall be allowed to engage in teaching and/or act as a teacher unless he has registered as professional teacher with the National Board for Teachers.Disposition DISMISSED, and the assailed RESOLUTION of public respondent is hereby AFFIRMED. EMPLOYER RIGHT SET PERIOD/OBLIGATION

GRAND MOTORS PARTS CORP V MINISTER OF LABOR

[PAGE 100]

ORIENT EXPRESS PLACEMENT PHILIPPINES V NLRC (POEA, FLORES)

273 SCRA 256BELLOSILLO; June 11, 1997

FACTS - Antonio Flores was hired as crane operator with a monthly salary of US$500 for 1year subject to a 3month probationary period. After 1month and 5days, he was repatriated to the Philippines. He filed a complaint to POEA fro having been terminated for no valid reason. His employers Orient Express and Nadrico (the foreign principal) claimed that he was terminated for poor job performance as shown in his performance evaluation sheet. - POEA decided in favor of Flores held that when the ground invoked for dismissal of an employee was incompetence or poor job performance, it must be shown that the reasonable standards of work prescribed by the employer were made known to the employee. The dismissal was unwarranted because the employers failed to point out the reasonable standards of work required. - NLRC affirmed POEA decision on appeal. It also ruled that the designation of Flores as floorman instead of crane operator for which he was hired violated his employment contract. Orient Express and Nadrico filed for MFR but it was denied.

ISSUES1. WON NLRC committed grave abuse of discretion in concluding that Flores was never assigned as crane operator (not important)2. WON NLRC and POEA committed grave abuse of discretion for ruling that poor job performance and uncooperative work attitude did not justify his dismissal

HELD1. Factual determination. NLRC and POEA did overlook the fact that the private respondent admitted that he was ale to work as crane operator (as shown in his affidavit)2. NO- Flores was not validly dismissed. Petition is denied.- A281 LC, the services of an employee hired on probationary basis may be terminated when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. The Court cannot sustain dismissal on this ground because petitioner failed to specify the reasonable standards by which Flores was alleged to have been evaluated to have poor performance. - Neither of the 2 original petitioners provided ever made mention that he must first take and pass a Crane Operators License Examination before he would be allowed to touch a crane. Neither did he know that he was to be assigned as floorman pending the release of the exam results. He also did not know that if he failed the exam, he would be subject to a performance evaluation 1 month after his hiring to determine whether the company was amenable to continuing his employment. Flores could not be faulted for harboring the impression that he was hired as crane operator for a definite period of 1 year to commence upon his arrival at the work-site and to terminate at the end of 1 year. No other condition was laid out except that he was to be on probation for 3 months. - Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein. Even if unsatisfactory performance was true, it is not 1 of the just causes for dismissal under the LC. There was no standard by which such probationary period was made known to him.Disposition the assailed Decision and Resolution of NLRC, declaring that private respondent Antonio F. Flores was illegally dismissed is AFFIRMED.

Labor Law 1 A2010 - 105 - Disini

MITSUBISHI MOTORS CORP V CHRYSLER PHIL LABOR UNION4333 SCRA 206

CALLEJO; June 29, 2004

NATUREPetition for review on certiorari FACTS- Mitsubishi Motors Philippines Corporation (MMPC) is a domestic corporation engaged in the assembly and distribution of Mitsubishi motor vehicles. Chrysler Philippines Labor Union (CPLU) is a legitimate labor organization and the duly certified bargaining agent of the hourly-paid regular rank and file employees of MMPC. Nelson Paras was a member of CPLU while wife, Cecille Paras, was the President of the Chrysler Philippines Salaried Employees Union (CPSU).- Nelson Paras was first employed by MMPC as a shuttle bus driver. He resigned and went to Saudi Arabia work. When he returned to the Philippines, he was re-hired as a welder-fabricator at the MMPC. Sometime in May of 1996, Paras was re-hired on a probationary basis as a manufacturing trainee at the Plant Engineering Maintenance Department. As part of the MMPCs policy, Paras was evaluated by his immediate supervisors after 6 months, and received an average rating. They informed him that based on his performance rating, he would be regularized. However, the Department and Division Managers reviewed the performance evaluation made on Parasand unanimously agreed, along with Paras immediate supervisors, that the performance of Paras was unsatisfactory. As a consequence, Paras was not considered for regularization. On November 26, 1996, he received a Notice of Termination dated November 25, 1996, informing him that his services were terminated effective the said date since he failed to meet the required company standards for regularization.- Utilizing the grievance machinery in the collective bargaining agreement, the CPLU demanded the settlement of the dispute which arose from Paras termination. They argued that Paras was dismissed on his 183rd day of employment, or 3 days after the expiration of the probationary period of 6 months. It was contended that Pa