Labor Law Relevant Cases

8/18/2019 Labor Law Relevant Cases

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Chapter III

Regular, Casual and Probationary Employment

ART. 280. Regular and casual employment. - The provisions of written

agreement to the contrary notwithstanding and regardless of the oralagreement 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 isemployed and his employment shall continue while such activity exists.

ART. 281. Probationary employment. - Probationary employment shall not

exceed six (6) months from the date the employee started working, unless it

is covered by an 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.

A.

Regular Employment

ART. 75. Learnership agreement. - Any employer desiring to employ

learners shall enter into a learnership agreement with them, which agreement

shall include: (d) A commitment to employ the learners if they so desire, as

regular employees upon completion of the learnership. All learners who have

been allowed or suffered to work during the first two (2) months shall be

deemed regular employees if training is terminated by the employer before

the end of the stipulated period through no fault of the learners.

The learnership agreement shall be subject to inspection by the Secretary of

Labor and Employment or his duly authorized representative.

Omnibus Rules Implementing the Labor Code

SECTION 5. Regular and casual employment. — (a) The provisions ofwritten agreements to the contrary notwithstanding and regardless of the oral

agreements of the parties, an employment shall be considered to be regular

employment for purposes of Book VI of the Labor Code 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.

(b) Employment shall be deemed as casual in nature if it is not covered by

the preceding paragraph; Provided, That any employee who has rendered atleast one year of service, whether such service is continuous or not, 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.

(c) An employee who is allowed to work after a probationary period shall be

considered a regular employee.

SECTION 6. Probationary employment. — (a) Where the work for which an

employee has been engaged is learnable or apprenticeable in accordance with

the standards prescribed by the Department of Labor, the probationary

employment period of the employee shall be limited to the authorizedlearnership or apprenticeship period, whichever is applicable.

(b) Where the work is neither learnable nor apprenticeable, the probationaryemployment period shall not exceed six (6) months reckoned from the date

the employee actually started working.

(c) The services of an employee who has been engaged on probationary basis

may be terminated only for a just cause or when authorized by existing laws,

or when he fails to qualify as a regular employee in accordance with

reasonable standards prescribed by the employer.


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(d) In all cases involving employees engaged on probationary basis, the

employer shall make known to the employee the standards under which he

will qualify as a regular employee at the time of his engagement.

A.1 By Nature of Work an employment is deemed regular when an

employee is engaged to perform activities which are usually necessary ordesirable to the business or trade of an employer even if there is a written or

oral agreement to the contrary EVEN if there i s a written or oral agreement

to the contrary

Hacienda Fatima v. National Federation of Sugarcane Workers

Doctrine: For them to be excluded as regulars, it is not enough that they perform work that is seasonal in nature but they also are employed for the

duration of one season.

Facts: The petitioner disfavored the fact that the private respondent

employees have formed a union. When the union became the collective bargaining representative in the certification election, the petitioner refused

to sit down to negotiate a CBA. Moreover, the respondents were not given

work for a month amounting to unjustified dismissal. As a result, the

complainants staged a strike to protest but was settled through a

memorandum of agreement which contained a list of those considered as

regular employees for the payroll.

The NLRC held that there was illegal dismissal and this was affirmed by the

Court of Appeals.

Issue: W/N the employees are regular workers

Held: Yes, they are regular and not seasonal employees. For them to beexcluded as regulars, it is not enough that they perform work that is seasonal

in nature but they also are employed for the duration of one season. The

evidence only proved the first but not the second requirement.

The ruling in Mercado v. NLRC is not applicable since in that case, the

workers were merely required to perform phases of agricultural work for a

definite period of time, after which, their services are available to other

employers. The management's sudden change of assignment reeks of bad

faith, it is likewise guilty of ULP.

The CA did not err when it ruled that Mercado v. NLRC was not applicable

to the case at bar. In the earlier case, the workers were required to perform

phases of agricultural work for a definite period of time, after which their

services would be available to any other farm owner. They were not hired

regularly and repeatedly for the same phase/s of agricultural work, but on andoff for any single phase thereof. On the other hand, herein respondents,

having performed the same tasks for petitioners every season for several

years, are considered the latters regular employees for their respective tasks.

Petitioners eventual refusal to use their services -- even if they were ready,

able and willing to perform their usual duties whenever these were available

-- and hiring of other workers to perform the tasks originally assigned to

respondents amounted to illegal dismissal of the latter.

Note: [T]he fact that [respondents] do not work continuously for one whole

year but only for the duration of the x x x season does not detract from

considering them in regular employment since in a litany of cases this Court

has already settled that seasonal workers who are called to work from time totime and are temporarily laid off during off-season are not separated from

service in said period, but merely considered on leave until re-employed.

ASSOCIATION OF TRADE UNIONS (ATU), RODOLFOMONTECLARO and EDGAR JUESAN, petitioners , vs. HON.COMISSIONERS OSCAR N. ABELLA, MUSIB N. BUAT, LEONGONZAGA JR., ALGON ENGINEERING CONSTRUCTION CORP.,ALEX GONZALES and EDITHA YAP, respondents.

Doctrine: The contracts of employment of petitioners attest to the fact thatthey were hired for specific projects and their employment was coterminous

with the completion of the project for which they had been hired. Also,

they were informed in advance that said project or undertaking for which

they were hired would end on a stated or determinable date. Since the

workers were project employees, their employment legally ended upon

completion of their respective projects.

Facts: Respondent company is a domestic corporation engaged in roadconstruction projects of the government. From 1968 to 1989, it engaged the


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services of the following workers to work on various projects on different

dates: Rodolfo Monteclaro (mechanic), Edgar Juesan (painter), Victorio

Lunzaga (tanker driver), Alfredo Jalet (batteryman), Julito Macabodbod

(trailer helper), Ramon Tabada (carpenter), Remsy, Asensi (machinist),

Armand Acero (helper mechanic), Lordito Tatad (painter helper), Rogelio

Tantuan (painter), Teodoro Tabio (checker), Gemudo Asejo (electrician),Roland Olivar (latheman), Valeriano Mijas (driver), Jose Noval (welder),

Felimon Lagbao (mechanic), Pedro Roche (head welder), and Justiniano

Sollano (carpenter). Their contracts indicate the particular project they are

assigned, the duration of their employment and their daily wage.

In February 1989, the above-named workers joined petitioner union as

members. Accordingly, petitioner union filed a petition for certification

election with the regional office of the labor department. Respondent

company opposed the petition on the ground that the workers were project

employees and therefore not qualified to form part of the rank and file

collective bargaining unit.

Shortly thereafter, respondent company terminated the employment of

aforementioned workers owing to the completion of its projects or the

expiration of workers' contracts.

However, the affected workers claim that they were dismissed because of

their union activities. In view of the alleged illegal dismissals and

harassment by their employer, the workers staged a strike on May 17, 1989.

Upon complaint of respondent company, Labor Arbiter Newton Sancho

declared said strike illegal and decreed further that Victorio Lunzaga,

Alfred Jalet, Julito Macabodbod, Ramon Tabada and Remsy Asensi, who

had participated in the strike, were deemed to have lost their employment

status.

Issue: WoN there was an illegal dismissal

Held: None, In the case at bar, the contracts of employment of the petitioners attest to the fact that they had been hired for specific projects,

and their employment was coterminous with the completion of the project

for which they had been hired. Said contracts expressly provide that the

workers' tenure of employment would depend on the duration of any phase

of the project or the completion of the awarded government construction

projects in any of their planned phases. Further, petitioners were informed

in advance that said project or undertaking for which they were hired would

end on a stated or determinable date. Besides, public respondent noted that

respondent company regularly submitted reports of termination of services

of project workers to the regional office of the labor department as requiredunder Policy Instruction No. 20. This compliance with the reportorial

requirement confirms that petitioners were project employees.

Considering that petitioners were project employees, whose nature of

employment they were fully informed about, at the time of their

engagement, related to a specific project, work or undertaking, their

employment legally ended upon completion of said project. The termination

of their employment could not be regarded as illegal dismissal.

ABS CBN vs NAZARENO (GR no. 164156)

Doctrine: The presumption i s that when the work done is an integral partof the regular business of the employer and when the worker, relati ve to the

employer, does not fu rn ish an i ndependent business or prof essional service,

such work is a regular employment of such employee and not an

independent contractor .

Facts: ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, andLerasan as production assistants (PAs) on different dates. They were assigned

at the news and public affairs, for various radio programs in the Cebu

Broadcasting Station, with a monthly compensation of P4,000. They were

issued ABS-CBN employees’ identification cards and were required to work

for a minimum of eight hours a day, including Sundays and holidays. Theywere made to: a) Prepare, arrange airing of commercial broadcasting basedon the daily operations log and digicart of respondent ABS-CBN; b) Coordinate, arrange personalities for air interviews; c) Coordinate, prepareschedule of reporters for scheduled news reporting and lead-in or incoming

reports; d) Facilitate, prepare and arrange airtime schedule for public serviceannouncement and complaints; e) Assist, anchor program interview, etc; andf) Record, log clerical reports, man based control radio.

Petitioner and the ABS-CBN Rank-and-File Employees executed a

Collective Bargaining Agreement (CBA) to be effective during the period


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from Dec 11, 1996 to Dec 11, 1999. However, since petitioner refused to

recognize PAs as part of the bargaining unit, respondents were not included

to the CBA.

Due to a memorandum assigning PA’s to non -drama programs, and that the

DYAB studio operations would be handled by the studio technician. Therewas a revision of the schedule and assignments and that respondent Gerzon

was assigned as the full-time PA of the TV News Department reporting

directly to Leo Lastimosa.

On Oct 12, 2000, respondents filed a Complaint for Recognition of Regular

Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium

Pay, Service Incentive Pay, Sick Leave Pay, and 13 th Month Pay with

Damages against the petitioner before the NLRC.

Issue: WON the respondents are regular employees?

Held: Respondents are considered regular employees of ABS-CBN and areentitled to the benefits granted to all regular employees.

Where a person has rendered at least one year of service, regardless of the

nature of the activity performed, or where the work is continuous or

intermittent, the employment is considered regular as long as the activity

exists. The reason being that a customary appointment is not indispensable

before one may be formally declared as having attained regular status. Article

280 of the Labor Code provides:

R EGULAR AND CASUAL EMPLOYMENT. — The provisions ofwritten agreement to the contrary notwithstanding and regardless of

the oral agreement of the parties, an employment shall be deemed to

be regular where the employee has been engaged to perform

activities which are usually necessary or desirable in the usual

business or trade of the employer except where the employment has

been fixed for a specific project or undertaking the completion or

termination of which has been determined at the time of the

engagement of the employee or where the work or services to be

performed is seasonal in nature and the employment is for the

duration of the season.

Any employee who has rendered at least one year of service, whether

continuous or intermittent, is deemed regular with respect to the activity

performed and while such activity actually exists. The fact that respondents

received pre-agreed “talent fees” instead of salaries, that they did not observe

the required office hours, and that they were permitted to join other

productions during their free time are not conclusive of the nature of their

employment. They are regular employees who perform several different

duties under the control and direction of ABS-CBN executives andsupervisors.

There are two kinds of regular employees under the law: (1) thoseengaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees whohave rendered at least one year of service , whether continuous or broken,with respect to the activities in which they are employed.

What determines whether a certain employment is regular or otherwise is the

character of the activities performed in relation to the particular trade or

business taking into account all the circumstances, and in some cases the

length of time of its performance and its continued existence.

The employer-employee relationship between petitioner and respondents has

been proven by the ff:

First. In the selection and engagement of respondents, no peculiar

or unique skill, talent or celebrity status was required from them

because they were merely hired through petitioner’s personnel

department just like any ordinary employee.

Second. The so-called “talent fees” of respondents correspond to

wages given as a result of an employer-employee relationship.

Respondents did not have the power to bargain for huge talent fees,

a circumstance negating independent contractual relationship.

Third. Petitioner could always discharge respondents should it find

their work unsatisfactory, and respondents are highly dependent on

the petitioner for continued work.

Fourth. The degree of control and supervision exercised by

petitioner over respondents through its supervisors negates the

allegation that respondents are independent contractors.


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BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA andDOROTEO R. ALEGREG.R. No. L-48494 February 5, 1990 en banc

Doctrine: stipulations in employment contracts providing for term

employment or fixed period employment are valid when the period wereagreed upon knowingly and voluntarily by the parties without 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.

FACTS: Private respondent Doroteo R. Alegre was engaged as athletic

director by petitioner Brent School, Inc. at a yearly compensation of

P20,000.00. The contract fixed a specific term for its existence, five (5)

years, i.e., from July 18, 1971, the date of execution of the agreement, to

July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973,August 28, 1973, and September 14, 1974 reiterated the same terms and

conditions, including the expiry date, as those contained in the original

contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent

School with the Department of Labor advising of the termination of his

services effective on July 16, 1976. The stated ground for the termination

was "completion of contract, expiration of the definite period of

employment." Although protesting the announced termination stating that

his services were necessary and desirable in the usual business of his

employer, and his employment lasted for 5 years - therefore he had acquired

the status of regular employee - Alegre accepted the amount of P3,177.71,and signed a receipt therefor containing the phrase, "in full payment of

services for the period May 16, to July 17, 1976 as full payment of

contract."

The Regional Director considered Brent School's report as an application

for clearance to terminate employment (not a report of termination), and

accepting the recommendation of the Labor Conciliator, refused to give

such clearance and instead required the reinstatement of Alegre, as a

"permanent employee," to his former position without loss of seniority

rights and with 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.

Held: Respondent Alegre's contract of employment with Brent School

having lawfully terminated with and by reason of the expiration of theagreed term of period thereof, he is declared not entitled to reinstatement.

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. At that time, the validity of term

employment was impliedly recognized by the Termination Pay Law, R.A.

1052, as amended by R.A. 1787. Prior, thereto, it was the Code of

Commerce (Article 302) which governed employment without a fixed

period, and also implicitly acknowledged the propriety of employment with

a fixed period. The Civil Code of the Philippines, which was approved on

June 18, 1949 and became effective on August 30,1950, itself deals with

obligations with a period. No prohibition against term-or fixed-periodemployment is contained in any of its articles or is otherwise deducible

therefrom.

It is plain then that when the employment contract was signed between

Brent School and Alegre, it was perfectly legitimate for them to include in it

a stipulation fixing the duration thereof Stipulations for a term were

explicitly recognized as valid by this Court.

The status of legitimacy continued to be enjoyed by fixed-period

employment contracts under the Labor Code (PD 442), which went into

effect on November 1, 1974. The Code contained explicit references to

fixed period employment, or employment with a fixed or definite period.

Nevertheless, obscuration of the principle of licitness of term employment

began to take place at about this time.

Article 320 originally stated that the "termination of employment of

probationary employees and those employed WITH A FIXED PERIOD

shall be subject to such regulations as the Secretary of Labor may

prescribe." Article 321 prescribed the just causes for which an employer

could terminate "an employment without a definite period." And Article

319 undertook to define "employment without a fixed period" in the

following manner: …where the employee has been engaged to perform


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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.

Subsequently, the foregoing articles regarding employment with "a definite

period" and "regular" employment were amended by Presidential Decree

No. 850, effective December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was

altered by eliminating the reference to persons "employed with a fixed

period," and was renumbered (becoming Article 271).

As it is evident that Article 280 of the Labor Code, under a narrow and

literal interpretation, not only fails to exhaust the gamut of employment

contracts to which the lack of a fixed period would be an anomaly, but

would also 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.

Such interpretation puts the seal on Bibiso upon the effect of the expiry of

an agreed period of employment as still good rule — a rule reaffirmed in the

recent case of Escudero vs. Office of the President (G.R. No. 57822, April

26, 1989) where, in the fairly analogous case of a teacher being served by

her school a notice of termination following the expiration of the last of

three successive fixed-term employment contracts, the Court held:

Reyes (the teacher's) argument is not persuasive. It loses sight of the fact

that her employment was probationary, contractual in nature, and one with a

definitive period. At the expiration of the period stipulated in the contract,

her appointment was deemed terminated and the letter informing her of the

non-renewal of her contract is not a condition sine qua non before Reyes

may be deemed to have ceased in the employ of petitioner UST. The notice

is a mere reminder that Reyes' contract of employment was due to expire

and that the contract would no longer be renewed. It is not a letter of

termination.

Paraphrasing Escudero, respondent Alegre's employment was terminated

upon theexpiration of his last contract with Brent School on July 16, 1976 without

the necessity of any notice. The advance written advice given the

Department of Labor with copy to said petitioner was a mere reminder of

the impending expiration of his contract, not a letter of termination, nor an

application for clearance to terminate which needed the approval of the

Department of Labor to make the termination of his services effective. In

any case, such clearance should properly have been given, not denied.

Note: Accordingly, and since the entire purpose behind the development oflegislation 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 articleindiscriminately 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 periodof employment was agreed upon knowingly and voluntarily by theparties, without any force, duress or improper pressure being broughtto bear upon the employee and absent any other circumstancesvitiating his consent, or where it satisfactorily appears that theemployer and employee dealt with each other on more or less equalterms 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 itsframers; it thus becomes pointless and arbitrary, unjust in its effects and apt

to lead to absurd and unintended consequences.

Columbus Philippine Bus Corp vs NLRC

Doctrine: The primary standard, x x x of determining a regularemployment is the reasonable connection between the particular activity

performed by the employee in relation to the usual business or trade of the


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employer. The test is whether the former is usually necessary or desirable in

the usual business or trade of the employer. The connection can be

determined by considering the nature of the work performed and its relation

to the scheme of the particular business or trade in its entirety. Also, if the

employee has been performing the job for at least one year, even if the

performance is not continuous or merely intermittent, the law deems therepeated and continuing need for its performance as sufficient evidence of

the necessity if not indispensability of that activity to the business. Hence,

the employment is also consider regular, but only with respect to such

activity and while such activity exists.

Facts: Petitioner Columbus Philippines Bus Corporation is engaged in the business of operating passenger buses. Since the start of its operations in

1990, it has maintained a list of drivers and conductors who rendered

service in its bus units allegedly on a first come first served basis and

compensated purely on commission. The drivers and

conductors/conductress worked for about ten (10) to fifteen (15) days a

month and were allegedly not required to work everyday.

Private respondent Roman Domasig started working as a driver with the

petitioner on August 30, 1990 with a daily income ranging from Three

Hundred Fifty Pesos (P350.00) to Six Hundred Fifty Pesos (P650.00), while

his wife and co-respondent, Zenaida Domasig, was employed as a bus

conductress on October 1, 1990 with a daily income of Two Hundred Fifty

Pesos (P250.00) to Five Hundred Pesos (P500.00). The employment of

private respondents Roman and Zenaida Domasig with the petitioner was

abruptly terminated on January 21 and 22, 1992, respectively, for their

having allegedly formed a labor union.

Thus, these two (2) related cases of unfair labor practice, illegal dismissal,

illegal deductions from salary, and non-payment of service incentive leave

pay and 13th month pay were instituted by private respondents against

petitioner Columbus Philippines Bus Corporation and its officers

The petitioner Columbus Philippines Bus Corporation alleges that the

private respondents like its other drivers and conductors are not regular

employees, that the services of private respondents were rendered on a first

come first served basis and compensated purely on commission basis; that

they worked for only about ten (10) to fifteen (15) days a month, and only

when they felt like doing so.

Issue: WoN respondents are regular employees despite working for 10-15days a month and at there discretion

Held: Considering the above-quoted standard (refer to doctrine) fordetermining a regular employment, it appears that the employment of

private respondents is regular. They perform work necessary and desirable

in the business of the petitioner. Without the services of the bus drivers and

conductors, like the private respondents, the petitioner could not have

operated and managed its business of providing transportation services to

the public.

SINGER SEWING MACHINE COMPANY vs.DRILON

FACTS: On February 15, 1989, the respondent union filed a petition for

direct certification as the sole and exclusive bargaining agent of allcollectors of the Singer Sewing Machine Company.

The Company opposed the petition mainly on the ground that the union

members are actually not employees but are independent contractors as

evidenced by the collection agency agreement which they signed.

ISSUE: W/N petitioners are regular employees therefore entitled to right ofself-organization

HELD: The Court finds the contention of the respondents that the union

members are employees under Article 280 of the Labor Code to have no basis. The definition that regular employees are those who perform

activities which are desirable and necessary for the business of the employer

is not determinative in this case.

Any agreement may provide that one party shall render services for and in

behalf of another for a consideration (no matter how necessary for the

latter's business) even without being hired as an employee. This is precisely

true in the case of an independent contractorship as well as in an agency

agreement.


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The Court agrees with the petitioner's argument that Article 280 is not the

yardstick for determining the existence of an employment relationship

because it merely distinguishes between two kinds of employees, i.e.,

regular employees and casual employees, for purposes of determining the

right of an employee to certain benefits, to join or form a union, or to

security of tenure. Article 280 does not apply where the existence of anemployment relationship is in dispute.

The collection agent does his work "more or less at his own pleasure"

without a regular daily time frame imposed on him

The Court finds that since private respondents are not employees of the

Company, they are not entitled to the constitutional right to join or form a

labor organization for purposes of collective bargaining. Accordingly, there

is no constitutional and legal basis for their “union” to be granted their

petition for direct certification. This Court made this pronouncement in La

Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor

Relations, supra:

. . . The question of whether employer-employee relationship exists is a

primordial consideration before extending labor benefits under the

workmen’s compensation, social security, medicare, termination pay and

labor relations law. It is important in the determination of who shall be

included in a proposed bargaining unit because, it is the sine qua non, the

fundamental and essential condition that a bargaining unit be composed of

employees. Failure to establish this juridical relationship between the union

members and the employer affects the legality of the union itself. It means

the ineligibility of the union members to present a petition for certification

election as well as to vote therein

JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATIONG.R. No. 138051 June 10, 2004

Facts: In May 1994, ABS-CBN signed an agreement with the Mel and JayManagement and Development Corporation (MJMDC). ABS-CBN was

represented by its corporate officers while MJMDC was represented by

Sonza, as President and general manager, and Tiangco as its EVP and

treasurer. Referred to in the agreement as agent, MJMDC agreed to provide

Sonza’s services exclusively to ABS-CBN as talent for radio and television.

ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first

year and P317, 000 for the second and third year.

On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably

resigned in view of the recent events concerning his program and career.After the said letter, Sonza filed with the Department of Labor and

Employment a complaint alleging that ABS-CBN did not pay his salaries,

separation pay, service incentive pay,13th month pay, signing bonus, travel

allowance and amounts under the Employees Stock Option Plan (ESOP).

ABS-CBN contended that no employee-employer relationship existed

between the parties. However, ABS-CBN continued to remit Sonza’s

monthly talent fees but opened another account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no

employee-employer relationship. NLRC affirmed the decision of the Labor

Arbiter. CA also affirmed the decision of NLRC.

Issue: Whether or not there was employer-employee relationship betweenthe parties.

Ruling: Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee, the

payment of wages, the power of dismissal and the employer’s power to

control the employee on the means and methods by which the work is

accomplished. The last element, the so-called "control test", is the most

important element.

Sonza’s services to co-host its television and radio programs are because of

his peculiar talents, skills and celebrity status. Independent contractors often

present themselves to possess unique skills, expertise or talent to distinguish

them from ordinary employees. The specific selection and hiring of SONZA,

because of his unique skills, talent and celebrity status not possessed by

ordinary employees, is a circumstance indicative, but not conclusive, of an

independent contractual relationship. All the talent fees and benefits paid to

SONZA were the result of negotiations that led to the Agreement. For

violation of any provision of the Agreement, either party may terminate their

relationship. Applying the control test to the present case, we find that

SONZA is not an employee but an independent contractor.


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The control test is the most important test our courts apply in distinguishing

an employee from an independent contractor. This test is based on the extent

of control the hirer exercises over a worker. The greater the supervision and

control the hirer exercises, the more likely the worker is deemed an employee.

The converse holds true as well – the less control the hirer exercises, the more

likely the worker is considered an independent contractor. To perform hiswork, SONZA only needed his skills and talent. How SONZA delivered his

lines, appeared on television, and sounded on radio were outside ABS-CBN’s

control. ABS-CBN did not instruct SONZA how to perform his job. ABS-

CBN merely reserved the right to modify the program format and airtime

schedule "for more effective programming." ABS-CBN’s sole concern was

the quality of the shows and their standing in the ratings.

Clearly, ABS-CBN did not exercise control over the means and methods of

performance of Sonza’s work. A radio broadcast specialist who works under

minimal supervision is an independent contractor. Sonza’s work as television

and radio program host required special skills and talent, which SONZA

admittedly possesses.

ABS-CBN claims that there exists a prevailing practice in the broadcast and

entertainment industries to treat talents like Sonza as independent contractors.

The right of labor to security of tenure as guaranteed in the Constitution arises

only if there is an employer-employee relationship under labor laws.

Individuals with special skills, expertise or talent enjoy the freedom to offer

their services as independent contractors. The right to life and livelihood

guarantees this freedom to contract as independent contractors. The right of

labor to security of tenure cannot operate to deprive an individual, possessed

with special skills, expertise and talent, of his right to contract as an

independent contractor.

DUMPIT MURILLO VS. CA AND ABC

Doctrine: For a fixed-period contract to be valid, it should be shown that the

fixed period was knowingly and voluntarily agreed upon by the parties. There

should have been no force, duress or improper pressure brought to bear upon the

employee; neither should there be any other circumstance that vitiates the

employees consent. It should satisfactorily appear that the employer and the

employee dealt with each other on more or less equal terms with no moral

dominance being exercised by the employer over the employee. Moreover, fixed-

term employment will not be considered valid where, from the circumstances, it

is apparent that periods have been imposed to preclude acquisition of tenurial

security by the employee.

FACTS: Thelma Dumpit Murillo was employed as a newscaster and a co-anchor for Balitang-balita by the Associated Broadcasting Company on

October 2, 1995. The contract was for a period of three months. On September 30, 1999,

after four years of repeated renewals, Petitioner’s talent contract expired.

Two weeks after the expiration of the last contract, petitioner sent a letter to

Mr. Jose Javier, Vice President for News and Public Affairs of ABC,

informing the latter that she was still interested in renewing her contract

subject to a salary increase.No contract was again entered into by the parties

to the previous contract.

The petitioners then wrote a letter demanding her reinstatement to her

former position, payment of backwages and services. On December 30,

1999, petitioner filed a case against ABC for illegal constructive dismissal.

The labor arbiter ruled in favor of ABC. The NLRC however reversed the

decision and ruled that an employer-employee relationship existed between

petitioner and respondent and that the petitioner was a regular employee

illegally dismissed. When the case reached the Court of Appeals, the latter

decided that Petitioner should not be allowed to renege from the stipulations

she had voluntarily and knowingly executed by invoking the security of

tenure of the Labor Code, hence this appeal.

ISSUE: WON an employee-employer relationship existed between ABCandPetitioner and was she illegally dismissed.

HELD:The CA committed reversible error when it held that petitioner was a fixed

term employee. Petitioner was a regular employee under contemplation of

law. The practice of having fixed term contracts in the industry does not

automatically make all talent contracts valid and compliant with labor law.

In Manila Water Company vs. Pena, the elements to determine the existence

of an employer employee relationship are:


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(a) the selection and engagement of the employee (b) the payment of wages,

(c) the power of dismissal, (d) the employers power to control. The duties of

the Petitioner as enumerated in her employment contract indicate that ABC

had control over the work of the Petitioner. Aside from control, ABC also

dictated the work assignments and payment of Petitioner’s wages. ABC alsohad the power to dismiss her. All these being present, clearly there existed

an employer-employee relationship between

Petitioner and ABC.

Concerning regular employment, the

Law provides for two kinds of employees. (1) those engaged to perform

activities which are usually necessary or desirable to the usual business or

trade of the employer, (2) those who have rendered at leas t one year of

service, whether continuous broken.

The Petitioner’s work was necessary or desirable in the usual business or

trade of the employer which includes its participation in the Government’s

news and public information dissemination. In addition, her work was

continuous for four years. Her contract was renewed for over

15 times. This repetitive renewal was indicative of Petitioner’s work’s

desirability and necessity. Hence it is concluded that she is a regular

employee.

Note: In our view, the requisites for regularity of employment have been met

in the instant case. Gleaned from the description of the scope of services

aforementioned, petitioners work was necessary or desirable in the usual

business or trade of the employer which includes, as a pre-condition for its

enfranchisement, its participation in the governments news and public

information dissemination. In addition, her work was continuous for a period

of four years. This repeated engagement under contract of hire is indicative

of the necessity and desirability of the petitioners work in private respondent

ABCs business.

The contention of the appellate court that the contract was characterized

by a valid fixed-period employment is untenable. For such contract to be valid, it

should be shown that the fixed period was knowingly and voluntarily agreed

upon by the parties. There should have been no force, duress or improper pressure

brought to bear upon the employee; neither should there be any other

circumstance that vitiates the employees consent. It should satisfactorily appear

that the employer and the employee dealt with each other on more or less equal

terms with no moral dominance being exercised by the employer over the

employee. Moreover, fixed-term employment will not be considered valid where,

from the circumstances, it is apparent that periods have been imposed to preclude

acquisition of tenurial security by the employee.

In the case at bar, it does not appear that the employer and employee dealt witheach other on equal terms. Understandably, the petitioner could not object to the

terms of her employment contract because she did not want to lose the job that she

loved and the workplace that she had grown accustomed to, which is exactly what

happened when she finally manifested her intention to negotiate. Being one of the

numerous newscasters/broadcasters of ABC and desiring to keep her job as a

broadcasting practitioner, petitioner was left with no choice but to affix her

signature of conformity on each renewal of her contract as already prepared by private respondents; otherwise, private respondents would have simply refused to

renew her contract. Patently, the petitioner occupied a position of weakness vis--

vis the employer. Moreover, private respondents practice of repeatedly extending

petitioners 3-month contract for four years is a circumvention of the acquisition of

regular status. Hence, there was no valid fixed-term employment between petitioner and private respondents.

While this Court has recognized the validity of fixed-term employment

contracts in a number of cases, it has consistently emphasized that when the

circumstances of a case show that the periods were imposed to block the

acquisition of security of tenure, they should be struck down for being

contrary to law, morals, good customs, public order or public policy.

DIFFERENCE between Sonza case and Dumpit case


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All the talent fees and benefits paid to SONZA were the result of

negotiations that led to the Agreement. If SONZA were ABS-CBNs

employee, there would be no need for the parties to stipulate on benefits

such as SSS, Medicare, x x x and 13 th month paywhich the law

automatically incorporates into every employer-employee contract.

Whatever benefits SONZA enjoyed arose from contract and not because ofan employer-employee relationship.

THERE was voluntariness and freedom to negotiate the terms and

conditions of the contract in the case Sonza however in the case of Dumpit

there was none.

the petitioner could not object to the terms of her employment contract because she

did not want to lose the job that she loved and the workplace that she had grown

accustomed to, which is exactly what happened when she finally manifested her

intention to negotiate.

Further, the Sonza case is not applicable. In Sonza, the television station didnot instruct Sonza how to perform his job. How Sonza delivered his lines,

appeared on television, and sounded on radio were outside the television

stations control. Sonza had a free hand on what to say or discuss in his shows

provided he did not attack the television station or its interests. Clearly, the

television station did not exercise control over the means and methods of the

performance of Sonzas work. In the case at bar, ABC had control over the performance of petitioners work. Noteworthy too, is the comparatively low

P28,000 monthly pay of petitioner vis the P300,000 a month salary of Sonza,that all the more bolsters the conclusion that petitioner was not in the same

situation as Sonza.

ABS-CBN vs Marquez (G.R. no. 167638)

Doctrine: A project employee or a member of a workpool may acquire thestatus of a regular employee when the following concur: there is continuous

rehiring of project employees even after the cessation of the project; and the

tasks performed by the alleged "project employee" are vital, necessary, and

indispensable to the usual business or trade of his employer.

Facts: Petitioner hired the services of respondents on various dates startingDecember, 1994 to undertake the production in the Cebuano dialect of

television serial programs for petitioner's week-day afternoon time slots in

Cebu. Respondents were assigned among three (3) production groups, each

with its own set of directors, writers, videographers, lightsmen, editors,

actors and utility personnel. Each production group was given a weekly

budget, initially at P30,000.00, which was later increased to P40,000.00 a

week.

The television-series did so well that several more were subsequently

produced. The production groups were continuously engaged to film

succeeding programs to replace the concluded ones.

On June 15, 1999, respondents addressed a letter to petitioner asking for a

25% increase in their weekly budget, but the same was denied by

petitioner's AVP for the Visayas Cluster, Ma. Luisa L. Ascalon. Instead,

respondents were informed of the termination of their services effective

August 13, 1999.

petitioner insisted that respondents were hired as program employees in thenature of contractual or project employment; that respondents were mere

"talents", i.e. they were contracted because of their expertise or talents as

program employees; and that respondents were, in effect, mere program

employees under Policy Instruction No. 40, series of 1979 whom petitioner

contracted due to their expertise for particular projects, in this case the

production of the Visayan tele-series programs.

Issue: WoN respondents are regular employees

Held:

It is a matter of record that respondents have rendered almost five (5) years

of continuous service to petitioner, doing work that is necessary and

desirable to the usual business of the latter. Hence, even granting on the

extreme that respondents were not performing work that is vital, necessary

and indispensable to the usual business of petitioner, nonetheless the second

paragraph of Article 280 of the Labor Code still applies. It reads:

ART. 280. REGULAR AND CASUAL EMPLOYMENT


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13/73

NLRC rendered a decision holding that respondents were regular

employees of petitioner who were illegally dismissed by the latter.

Issues:

1) Whether respondents were employees of petitioner; and

2) Whether their dismissal was illegal.

Ruling:

Petitioner failed to controvert with substantial evidence the

allegation of respondents that the former hired them. If petitioner did not hire

them and if it was the director alone who chose the talents, petitioner could

have easily shown a contract to such effect. However, petitioner merely

relied on its contention that respondents were piece rate contractors paid by

results. Under Policy Instruction No. 40 (P.I. #40), petitioner is obliged toexecute the necessary contract specifying the nature of the work to be

performed, rates of pay, and the programs in which they will

work. Moreover, project or contractual employees are required to be

apprised of the project they will undertake under a written contract. This was

not complied with by the petitioner.

In ABS-CBN v. Marquez, the failure of the employer to produce the

contract mandated by P.I. #40) is indicative that the so-called talents or

project workers are in reality, regular employees -- Program employees are

those whose skills, talents or services are engaged by the station for a

particular or specific program or undertaking and who are not required to

observe normal working hours such that on some days they work for less than

eight (8) hours and on other days beyond the normal work hours observed by

station employees and are allowed to enter into employment contracts with

other persons, stations, advertising agencies or sponsoring companies. The

engagement of program employees, including those hired by advertising or

sponsoring companies, shall be under a written contract specifying, among

other things, the nature of the work to be performed, rates of pay, and the

programs in which they will work. The contract shall be duly registered by

the station with the Broadcast Media Council within 3 days from its

consummation.

It is basic that project or contractual employees are appraised of the

project they will work under a written contract, specifying the nature of work

to be performed and the rates of pay and the program in which they will work.

No written contract was ever presented when petitioner is in the best of

position to present these documents. Since none was presented to show that

no written contract was accomplished, thus belying petitioner’s defense.

There was no showing of compliance with the required reports to be

filed, as provided either under the very Policy Instruction, or under the

Omnibus Implementing Rules of the Labor Code for project employees. This

bolsters respondents’ contention that they were indeed petitioner’s regular

employees since their employment was not only for a particular program.

Moreover, the engagement of respondents from 2 to 25 years and

the fact that their drama programs were aired not only in Bacolod City butalso in the sister stations of DYWB in the Visayas and Mindanao areas,

undoubtedly show that their work is necessary and indispensable to the usual

business or trade of petitioner. 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. Thus, even assuming that respondents were initially hired as

project/contractual employees, the engagement of their services for 2 to 25

years justify their classification as regular employees.

As to the payment of wages, it was petitioner who paid the same as

shown by the payroll bearing the name of petitioner company in the heading

with the respective salaries of respondents opposite their names. Anent the

power of control, dismissal, and imposition of disciplinary measures, the

same were duly proven by the: (1) memorandum noted by petitioner’s station

manager, calling the attention of the “Drama Department” to the late

submission of scripts by writers and the tardiness and absences of directors

and talents, as well as the imposable fines for future infractions; (2) the


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memorandum of the station manager directing respondent Oberio to explain

why no disciplinary action should be taken against him for punching the time

card of a certain Mrs. Fe Oberio; and (3) the station manager’s memorandum

suspending respondent Oberio for six days for the said infraction. These,

taken together show the existence of an ER-EE relationship.

Respondents were illegally dismissed. Petitioner merely contended

that it was respondents who ceased to report to work, and never presented

any substantial evidence to support said allegation. Petitioner failed to

discharge its burden, hence, respondents were correctly declared to have been

illegally dismissed. Furthermore, if doubts exist between the evidence

presented by the employer and the employee, the scales of justice must be

tilted in favor of the latter – the employer must affirmatively show rationally

adequate evidence that the dismissal was for a justifiable cause. It is a time-

honored rule that in controversies between a laborer and his master, doubts

reasonably arising from the evidence should be resolved in the former’s

favor. The policy is to extend the doctrine to a greater number of employees

who can avail of the benefits under the law, which is in consonance with the

avowed policy of the State to give maximum aid and protection of labor.

Orozco vs. Fifth Division of the Court of Appeals

Facts: PDI engaged the services of Orozco to write a weekly column for itsLifestyle section. She religiously submitted her articles except for a 6-month

stint when she went to NY City. Nevertheless, she continued to send her

articles through mail. She also received compensation for every column that

was published.

When Orozco’s column appeared in the newspaper for the last time,her editor, Logarta, told her that the PDI’s editor -in-chief, Magsanoc, wanted

to stop publishing her columns for no reason at all and advised her to talk to

the editor-in-chief. When Orozco talked to Magsanoc, the latter told her that

it was the PDI chairperson who wanted to stop the publication of her column.

However, when Orozco talked to Apostol, the latter told her that Magsanoc

informed her that the Lifestyle section had already many columnists.

PDI claims that Magsanoc met with the editor of the Lifestyle

section to discuss how to improve said section. They agreed to cut down the

number of columnists by keeping only those whose columns were well-

written, with regular feedback and following. In their judgment, petitioner’s

column failed to improve, continued to be superficially and poorly written,

and failed to meet the high standards of the newspaper. Hence, they decided

to terminate petitioner’s column.

Orozco filed a complaint for illegal dismissal. The LA decided in

favor of petitioner. On appeal, the NLRC dismissed the appeal and affirmed

the LA’s decision. The CA on the other hand, set aside the NLRC’s decision

and dismissed Orozco’s complaint.

Issue: Whether petitioner is an employee of PDI. Whether petitioner was illegally dismissed.

Decision: Petition dismissed. Judgment and Resolution affirmed.

Applying the four-fold test, the Court held that PDI lacked controlover the petitioner. Though PDI issued guidelines for the petitioner to follow

in the course of writing her columns, careful examination reveals that the

factors enumerated by the petitioner are inherent conditions in running a

newspaper. In other words, the so-called control as to time, space, and

discipline are dictated by the very nature of the newspaper business itself.

Aside from the constraints presented by the space allocation of her column,

there were no restraints on her creativity; petitioner was free to write her

column in the manner and style she was accustomed to and to use whatever

research method she deemed suitable for her purpose. The apparent limitation

that she had to write only on subjects that befitted the Lifestyle section did

not translate to control, but was simply a logical consequence of the fact that

her column appeared in that section and therefore had to cater to the

preference of the readers of that section.

Orozco in this case is considered as an independent contractor. As

stated in the case of Sonza vs. ABS-CBN, independent contractors often

present themselves to possess unique skills, expertise or talent to distinguish

them from ordinary employees. Like the petitioner in the cited case,

Petitioner was engaged as a columnist for her talent, skill, experience, and

her unique viewpoint as a feminist advocate. How she utilized all these in


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writing her column was not subject to dictation by respondent. As in Sonza,

respondent PDI was not involved in the actual performance that produced the

finished product. It only reserved the right to shorten peti tioner’s articles

based on the newspaper’s capacity to accommodate the same. This fact was

not unique to petitioner’s column. It is a reality in the newspaper business

that space constraints often dictate the length of articles and columns, eventhose that regularly appear therein.

Furthermore, respondent PDI did not supply petitioner with the tools

and instrumentalities she needed to perform her work. Petitioner only needed

her talent and skill to come up with a column every week. As such, she had

all the tools she needed to perform her work. Hence, since Orozco is not an

employee of PDI, the latter cannot be held guilty of illegally dismissing the

petitioner.

A.2 By period of Service – an employment is considered regular when anemployee has rendered at least 1 year of service, whether continuous or broken, on such activity in which he is employed and his employment shall

continue while such activity exists

Audion Electric Co. Inc vs NLRC

Doctrine: We have held that where the employment of project employees isextended long after the supposed project has been finished, the employees

are removed from the scope of project employees and considered regular

employees.

Facts: The facts of the case as summarized by Labor Arbiter Cresencio R.Iniego in his decision rendered on November 15, 1990 in NLRC-NCR Case No. -00-08-03906-89, and which are quoted in the questioned Resolution

dated March 24, 1992 of the public respondent are as follows:

From the position paper and affidavit corroborated by oral testimony, it

appears that complainant was employed by respondent Audion Electric

Company on June 30, 1976 as fabricator and continuously rendered service

assigned in different offices or projects as helper electrician, stockman and

timekeeper. He has rendered thirteen (13) years of continuous, loyal and

dedicated service with a clean record. On August 3, complainant was

surprised to receive a letter informing him that he will be considered

terminated after the turnover of materials, including respondents tools and

equipments not later than August 15, 1989.

Complainant claims that he was dismissed without justifiable cause and due

process and that his dismissal was done in bad faith which renders thedismissal illegal. For this reason, he claims that he is entitled to

reinstatement with full backwages. He also claims that he is entitled to

moral and exemplary damages. He includes payment of his overtime pay,

project allowance, minimum wage increase adjustment, proportionate 13th

month pay and attorneys fees.

On its part, respondent merely relied on its unverified letter-communication

signed by its project manager, dated September 25, 1989, the contents of

which are as follows:

A. ILLEGAL DISMISSAL- There is no course (sic) to complain

since employment contract signed by complainant with respondent is co-terminus with the project. xxx

B. UNPAID WAGES- Admitting that salary payment was delayed

due to late remittance of collection from respondents Japanese prime

contractor but nonetheless settled with complainant as evidenced by signed

Payroll Slips by complainant. xxx

C. NON-PAYMENT OF 13th MONTH PAY- As earlier admitted,

there was a relative delay in the remittance of collection payment from our

Japanese prime contractor but respondent knowing the economic

predecament (sic) of complainant has seen to it that respondent be satisfied

without awaiting for remittance of 13th month from its Japanese contractor.

Issue: WoN respondent is a regular employee

Held: Firstly, respondents assigning complainant to its various p rojects didnot make complainant a project worker. As found by the Labor Arbiter, it

appears that complainant was employed by respondent xxx as fabricator and

or projects as helper electrician, stockman and timekeeper. Simply put,

complainant was a regular non-project worker."


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Private respondents employment status was established by the Certification

of Employment dated April 10, 1989 issued by petitioner which certified

that private respondent is a bona fide employee of the petitioner from June

30, 1976 up to the time the certification was issued on April 10, 1989. The

same certificate of employment showed that private respondents exposure

to their field of operation was as fabricator, helper/electrician,

stockman/timekeeper. This proves that private respondent was regularly and

continuously employed by petitioner in various job assignments from 1976

to 1989, for a total of 13 years. The alleged gap in employment service cited

by petitioner does not defeat private respondents regular status as he was

rehired for many more projects without interruption and performed

functions which are vital, necessary and indispensable to the usual business

of petitioner.

NOTE: Policy Instruction No. 20 of the Department of Labor is explicitthat employers of project employees are exempted from the clearance

requirement but not from the submission of termination report. This court

has consistently held that failure of the employer to file termination reportsafter every project completion with the nearest public employment office is

an indication that private respondent was not and is not a project employee.

Department Order No. 19 superseding Policy Instruction No. 20 expressly

provides that the report of termination is one of the indications of project

employment. Universal Robina Corporation vs. Catapang473 SCRA 189 October 14, 2005

Certiorari Callejo, Sr.

FACTS:Pet: Universal Robina Corporation- company

Randy Gregorio – manager of company’s duck farm in Calauan,

Laguna

Resp: 30 people

- Respondents were hired by the company on various dates from

1991-1993 to work at its duck farm. Their contracts were only for

a 5-month period, renewed every expiration/ in 1996, the company

told the respondents that their contract won’t be renewed anymore.

Respondents filed complaints for illegal dismissal, reinstatement,

backwages, damages and attorney’s fees against petitioners.

- LA: illegal dismissal. Respondents must be reinstated to former

positions without loss of seniority rights and must pay backwages

- Petitioners appealed to NLRC while respondents filed Writ of

Execution with LA

- Petitioners told LA that they can only reinstate 17 of the 30

respondents (reason: phase out). For the 13, there are no other

positions similar to their previous ones but 10 may be

accommodated for a 3-day-per-week work

- Petitioners initially failed to comply with LA’s order but the 17

were eventually reinstated. The duck farm was closed.

- The 13 respondents wanted garnishment to collect the wages

awarded by the LA. Petitioners wanted to quash, saying that they

can’t accommodate the 13 anymore because of phase out and their

previous positions were already filled up

- NLRC: affirm LA decision

- CA: respondents were regular employees. Their being hired for

more than 1 year doing the same work made them regular and not

just project employees. 5-month contracts are only a means to

refuse them security of tenure. The 13 should have been paid even

if they were not reinstated.

ISSUE and HELD: WON respondents are regular employees--- YES.

RATIO:- [there was a discussion regarding procedure. Petitioners weren’t

able to file MR within the reglementary period, saying that they

did not receive the decision on time and they miscounted the

period for filing.SC said NO, the petition is late, this should have

been dismissed.]

- Abasolo vs. NLRC: test in determining whether one is a regular

employee: o Primary standard: reasonable connection between the

particular activity performed by the employee in relation

to the usual trade or business of the employer.

o Is the activity usually necessary or desirable to

employer’s trade or business?

o Must consider the nature of work performed and its

relation to the scheme of the particular business or trade

in its entirety


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o If employee has been performing the work for at least a

year, even if intermittently, this is sufficient to say that the

work is necessary and indispensable to the business. Thus,

he is regular with respect to that work and while it lasts.

- Affirm CA’s findings. The 5-month contract was only used to

prevent respondents from being regulars. This is contrary to public

policy or morals. 3-5 years of continuous hiring negates

petitioners’ argument that they are only for a specific project

- Factual findings of labor officials who have expertise are accorded

not only respect but even finality and is binding on SC when

supported by substantial evidence

ABESCO Construction and Development Corporation vs. Ramirez

GR No. 141168 20 April 2006

Doctrine: The principal test for determining whether employees are"project employees" or "regular employees" is

1. whether they are assigned to carry out a specific project or

undertaking,

2. the duration and scope of which are specified at the time they are

engaged for that project.

3. Such duration, as well as the particular work/service to be

performed, is defined in an employment agreement and is madeclear to the employees at the time of hiring.

In this case, petitioners did not have that kind of agreement with

respondents.

Facts: The respondents were employees of Abesco from 1976-1992. In1997, they filed 2 complaints of illegal dismissal against Abesco and its

general manager, contending that they are regular employees of the

company as evidenced by their continuous engagement as laborers,

road roller operator, painters or drivers by Abesco. The respondents

also indicate that as regular employees they are entitled to claims for

the non-payment of 13th month, 5-day service incentive leave pay,

premiums on holidays and rests days, and moral and exemplary damages.

The said complaints were later on consolidated by the Labor Arbiter.

Abesco, on the other hand, denies the allegations of the respondent

employees. Abesco argued that the respondents are project employees

because their services are availed only when the company had projects

for completion. The company further added that as project employees, the

respondents do not have a security of tenure and consequently not entitled

to a separation pay upon termination.

Issue/s:

Does continuous engagement and period of service sufficient to

determine whether an individual is a regular or project?

If not, what are other determinative factors to be considered?

Ruling:

The Labor Arbiter ruled that the employees are regular employees as

manifested by the hiring and re-hiring of the respondents for Abesco

projects.In his resolution, the Labor Arbiter highlighted the fact thatthe respondents were part of a work pool which was readily tapped

by the company at their discretion and that it has been a practice for a

period of 18 years.

The Supreme Court sustained the ruling of the Labor Arbiter but

indicated that long period of service does not automatically make the

respondents regular employees as length of service is not a controlling

factor. The Supreme Court explained that the primary test to

determine whether the respondents are

regular or project employees is (i) whether they are assigned to carry

out a specific project or undertaking and (ii) the duration and scope ofwhich are specified at the time they are engaged for that project. The high

court also emphasized that such duration and particular work/service to be

performed should be defined in the employment agreement and are

made clear to the employees at the time of hiring.

In this case, petitioners did not have that kind of agreement with

respondents. Neither did they inform respondents of the nature of the latter's

work at the time of hiring. Hence, for failure of petitioners to substantiate


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their claim that respondents were project employees, we are constrained to

declare them as regular employees.

Furthermore, petitioners cannot belatedly argue that respondents continue to

be their employees (so as to escape liability for illegal dismissal). Before the

LA, petitioners staunchly postured that respondents were only "projectemployees" whose employment tenure was coterminous with the projects

they were assigned to. However, before the CA, they took a different stance

by insisting that respondents continued to be their employees. Petitioners'

inconsistent and conflicting positions on their true relation with respondents

make it all the more evident that the latter were indeed their regular

employees.

A.3 By Probationary employment – an employee who is allowed to workafter a probationary period (not to exceed 6 months) shall be considered

regular

a. Statutory definition of Probationary employment

ART. 281. Probationary employment. - Probationary employment shall not

exceed six (6) months from the date the employee started working, unless it

is covered by an 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.

b. Nature of Probationary employment

Philippine federation of credit cooperatives vs NLRC

Doctrine: Probationary employment is in nature of a “trial period” a probationary employee 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 employment 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. (relevant

to the syllabus)

Facts: Sometime in September 1982, private respondent Victoria Abril wasemployed by petitioner Philippine Federation of Credit Cooperatives, Inc.

(PFCCI), a corporation engaged in organizing services to credit andcooperative entities, as Junior Auditor/Field Examiner and thereafter held

positions in different capacities, to wit: as office secretary in 1985 and as

cashier-designate for four (4) months ending in April 1988. Respondent,

shortly after resuming her position as office secretary, subsequently went on

leave until she gave birth to a baby girl. Upon her return sometime in

November 1989, however, she discovered that a certain Vangie Santos had

been permanently appointed to her former position. She, nevertheless,

accepted the position of Regional Field Officer as evidenced by a contract

which stipulated, among other things, that respondents employment status

shall be probationary for a period of six (6) months. Said period having

elapsed, respondent was allowed to work until PFCCI presented to her

another employment contract for a period of one year commencing onJanuary 2, 1991 until December 31, 1991, after which period, her

employment was terminated.

In a complaint for illegal dismissal filed by respondent against PFCCI on

April 1, 1992, Labor Arbiter Cornelio L. Linsangan rendered a decision on

March 10, 1993 dismissing the same for lack of merit but ordered PFCCI toreimburse her the amount of P2,500.00 which had been deducted from her

salary.

On appeal, however, the said decision was reversed by the National Labor

Relations Commission (NLRC)

Issue: WoN the respondent is deemed a regular employee after the lapse ofthe probationary period

Held: Regardless of the designation petitioner may have conferred uponrespondents employment status, it is, however, uncontroverted that the

latter, having completed the probationary period and allowed to work

thereafter, became a regular employee who may be dismissed only for just

or authorized causes under Articles 282, 283 and 284 of the Labor Code, as

amended.


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While the initial statements of the contract show that respondents

employment was for a fixed period, the succeeding provisions thereof

contradicted the same when it provided that respondent shall be under

probationary status commencing on February 17, 1990 and ending six (6)

months thereafter. Petitioner manifested that respondents employment for a

period of one year, from January until December 1991, having been fixed

for a specified period, could not have converted her employment status to

one of regular employment. Conversely, it likewise insisted that respondent

was employed to perform work related to a project funded by the World

Council of Credit Unions (WOCCU) and hence, her status is that of a

project employee. The Court is, thus, confronted with a situation under

which the terms of the contract are so ambiguous as to preclude a precise

application of the pertinent labor laws.

Amidst the muddled assertions by petitioner, we adhere to the

pronouncement stated in the recent case of Villanueva v. NLRC, where the

Court ruled that where a contract of employment, being a contract of

adhesion, is ambiguous, any ambiguity therein should be construed strictlyagainst the party who prepared it. Furthermore, Article 1702 of the Civil

Code provides that, in case of doubt, all labor contracts shall be construed in

favor of the laborer.

c. Computation of the sixth (6) month probationary period

CALS poultry supply vs Roco

Doctrine: Our computation of the 6-month probationary period is reckonedfrom the date of appointment up to the same calendar date of the 6 th month

following.

Facts: On March 15, 1984 CALS hired Alfredo Roco as its driver. On thesame date, CALS hired Edna Roco, Alfredos sister, as a helper in the

dressing room of CALS. On May 16, 1995, it hired Candelaria Roco,

another sister, as helper, also at its chicken dressing plant on a probationary

basis.

On March 5, 1996, Alfredo Roco and Candelaria Roco filed a complaint forillegal dismissal against CALS and Danilo Yap alleging that Alfredo and

Candelaria were illegally dismissed on January 20, 1996 and November 5,

1996, respectively. Both also claimed that they were underpaid of their

wages. Edna Roco, likewise, filed a complaint for illegal dismissal, alleging

that on June 26, 1996, she was reassigned to the task of washing dirty sacks

and for this reason, in addition to her being transferred from night shift to

day time duties, which she considered as management act of harassment,

she did not report for work.

The Labor Arbiter on April 16, 1998, issued a decision dismissing the

complaints for illegal dismissal for lack of merit. The Labor Arbiter found

that Alfredo Roco applied for and was granted a leave of absence for the

period from January 4 to 18, 1996. He did not report back for work after the

expiration of his leave of absence, prompting CALS, through its Chief

Maintenance Officer to send him a letter on March 12, 1996 inquiring if he

still had intentions of resuming his work. Alfredo Roco did not respond to

the letter despite receipt thereof, thus, Alfredo was not dismissed; it was he

who unilaterally severed his relation with his employer.

In the case of Candelaria Roco, the Labor Arbiter upheld CALS decisionnot to continue with her probationary employment having been found her

unsuited for the work for which her services were engaged. She was hired

on May 16, 1995 and her services were terminated on November 15, 1995.

In ruling in favor of Candelaria Roco, the appellate court held that when her

employment was terminated on November 15, 1995 (she was hired on May

16, 1995), it was four (4) days after she ceased to be a probationary

employee and became a regular employee within the ambit of Article 281 of

the Labor Code

CALS argues that the Court of Appeals computation of the 6-month

probationary period is erroneous as the termination of Candelarias serviceson November 15, 1995 was exactly on the last day of the 6 -month period.

Issue: WoN the computation of the 6-month probationary period isreckoned from the date of appointment up to the same calendar date of the

6th month following.

Held: With respect to Candelaria Roco, there is no dispute that she wasemployed on probationary basis. CALS argues that the Court of Appeals

computation of the 6-month probationary period is erroneous as the


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termination of Candelarias services on November 15, 1995 was exactly on

the last day of the 6-month period.

We agree with CALS contention as upheld by both the Labor Arbiter and

the NLRC that Candelarias services was terminated within and not beyond

the 6-month probationary period.

In Cebu Royal v. Deputy Minister of Labor , our computation of the 6-month

probationary period is reckoned from the date of appointment up to the

same calendar date of the 6 th month following. Thus, we held:

The original findings were contained in a one-page order reciting simply

that complainant was employed on a probationary period of employment for

six (6) months. After said period, he underwent medical examination for

qualification as regular employee but the results showed that he is suffering

from PTB minimal. Consequently, he was informed of the termination of

his employment by respondent. The order then concluded that the

termination was justified.

d. Application of Art. 13 of the Civil Code in the computation ofsixth month probationary period

Mitsubishi motors vs Chrysler

Doctrine: Applying Article 13 of the Civil Code, the probationary period ofsix (6) months consists of one hundred eighty (180) days.

Facts: Nelson Paras was first employed by MMPC as a shuttle bus driveron March 19, 1976. He resigned on June 16, 1982. He applied for and was

hired as a diesel mechanic and heavy equipment operator in Saudi Arabia

from 1982 to 1993. When he returned to the Philippines, he was re-hired as

a welder-fabricator at the MMPC tooling shop from October 3, 1994 to

October 31, 1994. On October 29, 1994, his contract was renewed from

November 1, 1994 up to March 3, 1995.

Sometime in May of 1996, Paras was re-hired on a probationary basis as a

manufacturing trainee at the Plant Engineering Maintenance Department.

He and the new and re-hired employees were given an orientation on May

15, 1996

They unanimously agreed, along with Paras immediate supervisors, that the

performance of Paras was unsatisfactory. As a consequence, Paras was not

considered for regularization.

According to CPLU and Paras, the latters dismissal was an offshoot of the

heated argument during the CBA negotiations between MMPC Labor

Relations Manager, Atty. Carlos S. Cao, on the one hand, and Cecille Paras,

the President of the Chrysler Philippines Salaried Employees Union (CPSU)

and Paras wife, on the other.

CPLU posited that Paras was dismissed on his one hundred eighty third

(183rd) day of employment, or three (3) days after the expiration of the

probationary period of six (6) months. It was contended that Paras was

already a regular employee on the date of the termination of his

probationary employment.

Issue: WoN Paras has worked after the expiration of the probationary period of six months thus entitling him to be deem as a regular employee

Held: Respondent Paras was employed as a management trainee on a probationary basis. During the orientation conducted on May 15, 1996, he

was apprised of the standards upon which his regularization would be

based. He reported for work on May 27, 1996. As per the company’s policy,

the

probationary period was from three (3) months to a maximum of six (6)

months.

Applying Article 13 of the Civil Code, the probationary period of six (6)

months consists of one hundred eighty (180) days. This is in conformity

with paragraph one, Article 13 of the Civil Code, which provides that the

months which are not designated by their names shall be understood asconsisting of thirty (30) days each. The number of months in the

probationary period, six (6), should then be multiplied by the number of

days within a month, thirty (30); hence, the period of one hundred eighty

(180) days.

As clearly provided for in the last paragraph of Article 13, in computing a

period, the first day shall be excluded and the last day included. Thus, th

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Labor Law Relevant Cases