7.01-7.

06
GLORY PHILIPPINES, INC. vs VERGARA
(Recognition and Types)
FACTS:
Petitioner Glory Philippines, Inc. manufactures money-counting machines.
In June !!", it created a Parts Inspection #ection (PI#) tas$ed to inspect the
machine parts for e%portation to its e%clusive &uyer, Glory 'imited Japan
(Glory Japan).
Petitioner hired respondents on ()*)!!", as mem&ers of the PI#.
+o,ever, the employment contracts ,hich they signed only on ")")!!",
indicated them as Production -perators in the Production #ection ,ith a daily
,age of Php""....
The contracts covered the period from July / to 0ugust /., !!". Thereafter,
respondents1 employment contracts ,ere e%tended on a monthly &asis.
-n 2)3()!!!, ho,ever, they ,ere each made to sign employment contracts
covering the period from 4e&ruary 3" to 0pril /., !!!.
-n 2)3*)!!!, 5r. Ta$eo -shima (President) informed the 0ssistant 5anager
that the contractual employees in the PI# ,ould no longer &e needed &y the
company as Glory Japan had cancelled its orders.
6evertheless, petitioner e%tended respondents1 employment due to their
insistent pleas and for the period from 5ay to 5ay 7, !!!, respondents
signed employment contracts ,ith a higher ,age of Php3..... a day.
Respondents claimed that they continued to ,or$ until 7)37)!!! ,hen, at
the close of ,or$ing hours, petitioner1s security guard advised them that their
employment had &een terminated and that they ,ould no longer &e allo,ed
to enter the premises.
8onse9uently, on 5ay 3(, !!!, they :led separate complaints for illegal
dismissal ,ith the ;-'<. T
he cases ,ere su&se9uently referred to the 6'R8.
-n .)3!)!!!, the 'a&or 0r&iter rendered a decision :nding that
respondents ,ere regular employees &ecause they performed activities
desira&le to the usual &usiness or trade of petitioner for almost months
Page 1 of 122
and that they ,ere illegally dismissed for lac$ of =ust cause and non-
o&servance of due process.
-n appeal, the 6'R8 a>rmed the :ndings of the 'a&or 0r&iter.
+o,ever, upon motion for reconsideration, the 6'R8 reversed and set aside
its earlier decision and dismissed the complaint for lac$ of merit.
o The 6'R8 ruled that respondents ,ere pro=ect employees and that
their employment ,as terminated upon e%piration of their employment
contracts.
Respondents1 motion for reconsideration ,as denied hence, they :led a
petition for certiorari &efore the 80.
-n !)")3..*, the appellate court granted the petition.
Petitioner1s motion for reconsideration ,as denied hence, this petition.
ISSUE: ?hether or not respondents ,ere regular employees.
Held: YES.
The 8ourt notes that there are three $inds of employees as provided under
0rticle 3". of the 'a&or 8ode, thus@
() Regl!" e#$l%&ee' %" ()%'e *)% )!+e ,ee- e-g!ged
(% $e".%"# !/(0+0(0e' *)0/) !"e '!ll& -e/e''!"& %"
de'0"!,le 0- ()e '!l ,'0-e'' %" ("!de %. ()e
e#$l%&e"A
(3) Pro=ect employees or those ,hose employment has &een
:%ed for a speci:c pro=ect or underta$ing, the completion or
termination of ,hich has &een determined at the time of the
engagement of the employee or ,here the ,or$ or service to
&e performed is seasonal in nature and the employment is for
the duration of the seasonA and
(/) 8asual employees or those ,ho are neither regular nor
pro=ect employees
There is no merit in petitioner1s claim that respondents ,ere pro=ect
employees ,hose employment ,as coterminous ,ith the transaction ,ith
Glory Japan.
Respondents1 e#$l%&#e-( /%-("!/(' .!0led (% '(!(e ()e '$e/01/ $"%2e/(
%" -de"(!30-g .%" *)0/) ()e& *e"e !llegedl& e-g!ged.
Page 2 of 122
?hile petitioner claims that respondents ,ere hired for the transaction ,ith
Glory Japan, the same ,as not indicated in the contracts.
0s o&served &y the 80, nothing therein suggested that their employment ,as
dependent on the continuous patronage of Glory Japan.
4urther, the employment contracts did not indicate the d"!(0%- !-d '/%$e
of the pro=ect or underta$ing as re9uired &y la,.
It is not enough that an employee is hired for a speci:c pro=ect or phase of
,or$ to 9ualify as a pro=ect employee.
T)e"e #'( !l'% ,e ! de(e"#0-!(0%- %., %" ! /le!" !g"ee#e-( %-, ()e
/%#$le(0%- %" (e"#0-!(0%- %. ()e $"%2e/( !( ()e (0#e ()e e#$l%&ee
*!' e-g!ged, ,hich is a&sent in this case.
The factual circumstances negate petitioner1s claim that respondents ,ere
pro=ect employees.
<mployment contracts of respondents ,ere repeatedly rene,ed and
e%tended &y petitioner. It &ears stressing that from 3))!!" to 2)3()!!!,
respondents reported for ,or$ despite the a&sence of employment
contracts.
0lthough petitioner1s transaction ,ith Glory Japan ,as terminated sometime
in 0pril !!!, yet respondents ,ere allo,ed to ,or$ ,ithout interruption until
7)37)!!!.
In fact, petitioner even paid them higher salaries of Php3..... a day.
'i$e,ise, ,e cannot give credence to petitioner1s claim that respondents
,ere :%ed term employees.
Petitioner1s reliance on our ruling in Philippine Village Hotel v. National Labor
Relations Commission is misplaced &ecause the facts in the said case are not
in all fours ,ith the case at &ar.
In said case, the employees ,ere hired only for a one-month period and their
employment contracts ,ere never rene,ed.
I- ()e 0-'(!-( /!'e, respondents1 original employment contracts ,ere
rene,ed four times.
In the last instance, their contracts ,ere e%tended despite the cessation of
petitioner1s alleged transaction ,ith Glory Japan.
Thus, "e'$%-de-(' *e"e /%-(0-%'l& -de" ()e e#$l%& %. $e(0(0%-e",
$e".%"#0-g ()e '!#e d(0e' !-d "e'$%-'0,0l0(0e'.
In Philips Semiconductors (Phils.), nc. v. !adri"uela, ,e held that such !
/%-(0-0-g -eed .%" "e'$%-de-('4 'e"+0/e' 0' '5/0e-( e+0de-/e %.
()e -e/e''0(& !-d 0-d0'$e-'!,0l0(& %. ()e0" 'e"+0/e' (% $e(0(0%-e"4'
,'0-e''.
8onse9uently, ,e :nd that respondents ,ere regular employees de:ned
under 0rticle 3". of the 'a&or 8ode as ()%'e *)% )!+e ,ee- e-g!ged (%
$e".%"# !/(0+0(0e' *)0/) !"e '!ll& -e/e''!"& %" de'0"!,le 0- ()e
'!l ,'0-e'' %" ("!de %. $e(0(0%-e".
Page 6 of 122
7ISPOSITION: The petition is 7ENIE7. The 801s decisions are AFFIR8E7 ,ith
8O7IFICATIONS.
P!-g0l0-!- +' Ge-e"!l 80l0-g C%"$ 969 SCRA 1:;
FACTS:
Respondent General 5illing 8orporation is a domestic corporation engaged in
the production and sale of livestoc$ and poultry. It is, li$e,ise, the distri&utor
of dressed chic$en to various restaurants and esta&lishments nation,ide.
Petitioners ,ere employed &y the respondent as emergency ,or$ers under
separate Btemporary)casual contracts of employmentB for a period of :ve
months.
Cpon the e%piration of their respective contracts, their services ,ere
terminated.
They later :led separate complaints for illegal dismissal and non-payment of
holiday pay, /th month pay, night-shift diDerential and service incentive
leave pay against the respondent &efore the 0r&itration Eranch of 6'R8.
Petitioners alleged that their ,or$ as chic$en dressers ,as necessary and
desira&le in the usual &usiness of the respondent, and added that although
they ,or$ed from .@.. p.m. to *@.. a.m., they ,ere not paid night-shift
diDerential.
They stressed that &ased on the nature of their ,or$, they ,ere regular
employees of the respondentA hence, could not &e dismissed from their
employment unless for =ust cause and after due notice.
'a&or 0r&iter rendered a decision in favor of the petitioners declaring that
they ,ere regular employees.
4inding that the termination of their employment ,as not &ased on any of the
=ust causes provided for in the 'a&or 8ode, the 'a&or 0r&iter declared that
they ,ere allegedly illegally dismissed.
6'R8 rendered a decision reversing that of the 'a&or 0r&iter. The 6'R8 held
that the petitioners, ,ho ,ere temporary or contractual employees of the
respondent, ,ere legally terminated upon the e%piration of their respective
contracts.
8iting the case of #rent School, nc. vs. $amora, the 6'R8 e%plained that
,hile the petitionersF ,or$ ,as necessary and desira&le in the usual &usiness
of G58, they cannot &e considered as regular employees since they agreed
to a :%ed term.
Page 9 of 122
The petitionersF motion for reconsideration of the decision having &een
denied &y the 6'R8, they :led a petition for certiorari &efore the 8ourt of
0ppeals.
The 80 rendered a decision a>rming decision of the 6'R8.
The 80 ruled that ,here the duties of the employee consist of activities
usually necessary or desira&le in the usual &usiness of the employer, it does
not necessarily follo, that the parties are for&idden from agreeing on a
period of time for the performance of such activities.
ISSUE: ?hether or not the petitioners ,ere regular employees of the respondent
G58 ,hen their employment ,as terminated.
HEL7: NO.
The petitioners ,ere employees ,ith a :%ed period, and, as such, ,ere not
regular employees.
0rticle 3". of the 'a&or 8ode comprehends three $inds of employees@
(a) regular employees or those ,hose ,or$ is necessary or
desira&le to the usual &usiness of the employerA
(&) pro=ect employees or those ,hose employment has &een
:%ed for a speci:c pro=ect or underta$ing the completion or
termination of ,hich has &een determined at the time of the
engagement of the employee or ,here the ,or$ or services
to &e performed is seasonal in nature and the employment is
for the duration of the seasonA and,
(c) casual employees or those ,ho are neither regular nor
pro=ect employees.
0 regular employee is one ,ho is engaged to perform activities ,hich are
necessary and desira&le in the usual &usiness or trade of the employer as
against those ,hich are underta$en for a speci:c pro=ect or are seasonal.
There are t,o separate instances ,here&y it can &e determined that an
employment is regular@
() if the particular activity performed &y the employee is
necessary or desira&le in the usual &usiness or trade of the
employerA and,
(3) if the employee has &een performing the =o& for at least a
year.
Indeed, in the leading case of #rent School nc. v. $amora, ,e laid do,n the
guideline &efore a contract of employment may &e held as valid, to ,it@
Page : of 122
<=S>(0$l!(0%-' 0- e#$l%&#e-( /%-("!/(' $"%+0d0-g .%" (e"#
e#$l%&#e-( %" 1?ed $e"0%d e#$l%&#e-( !"e +!l0d *)e- ()e
$e"0%d *e"e !g"eed $%- 3-%*0-gl& !-d +%l-(!"0l& ,& ()e
$!"(0e' *0()%( .%"/e, d"e'' %" 0#$"%$e" $"e''"e, ,e0-g
,"%g)( (% ,e!" $%- ()e e#$l%&ee !-d !,'e-( !-& %()e"
/0"/#'(!-/e' +0(0!(0-g )0' /%-'e-(, %" *)e"e 0( '!(0'.!/(%"0l&
!$$e!"' ()!( ()e e#$l%&e" !-d e#$l%&ee de!l( *0() e!/) %()e"
%- #%"e %" le'' e@!l (e"#' *0() -% #%"!l d%#0-!-/e
*)!(e+e" ,e0-g e?e"/0'ed ,& ()e .%"#e" %+e" ()e l!((e".
0n e%amination of the contracts entered into &y the petitioners sho,ed that
their employment ,as limited to a :%ed period, usually :ve or si% months,
and did not go &eyond such period.
The records reveal that the stipulations in the employment contracts ,ere
$no,ingly and voluntarily agreed to &y the petitioners ,ithout force, duress
or improper pressure, or any circumstances that vitiated their consent.
#imilarly, nothing therein sho,s that these contracts ,ere used as a
su&terfuge &y the respondent G58 to evade the provisions of 0rticles 3(!
and 3". of the 'a&or 8ode.
0rticle 3". of the 'a&or 8ode does not proscri&e or prohi&it an employment
contract ,ith a :%ed period.
?e furthered that it does not necessarily follo, that ,here the duties of the
employee consist of activities usually necessary or desira&le in the usual
&usiness of the employer, the parties are for&idden from agreeing on a period
of time for the performance of such activities.
There is thus nothing essentially contradictory &et,een a de:nite period of
employment and the nature of the employeeFs duties.
The petitioners ,ere hired as Bemergency ,or$ersB and assigned as chic$en
dressers, pac$ers and helpers at the 8ainta Processing Plant.
?hile the petitionersF employment as chic$en dressers is necessary and
desira&le in the usual &usiness of the respondent, they ,ere employed on a
mere temporary &asis, since their employment ,as limited to a :%ed period.
0s such, they cannot &e said to &e regular employees, &ut are merely
Bcontractual employees.B
There ,as no illegal dismissal ,hen the petitionersF services ,ere terminated
&y reason of the e%piration of their contracts.
Page 6 of 122
'ac$ of notice of termination is of no conse9uence, &ecause ,hen the
contract speci:es the period of its duration, it terminates on the e%piration of
such period.
0 contract for employment for a de:nite period terminates &y its o,n term at
the end of such period.
UNIVERSAL ROAINA e(/. +'. CAAALLE7A
FACTS:
Respondent 0gripino 8a&alleda (0gripino) ,or$ed as ,elder for Cniversal
Ro&ina from 5arch !"! until June 3/, !!( ,ith a salary of P32... per day,
,hile respondent 0le=andro 8adalin (0le=andro) ,or$ed as crane operator
from !(* up to June 7, !!( ,ith a salary of P3.!./. per day.
In !!, the President of Cniversal Ro&ina, issued a 5emorandum
esta&lishing the company policy on B8ompulsory RetirementB (5emorandum)
of its employees.
It provides that any employee of Cniversal Ro&ina shall &e considered retired
/. days after he attains age *..
#u&se9uently, in !!3, R0 6o. (*2 ,as enacted into la,, and it too$ eDect
in !!/, amending 0rticle 3"( of the 'a&or 8ode, to read@
0rt. 3"(. Retirement. -- 0ny employee may &e retired upon
reaching the retirement age esta&lished in the collective
&argaining agreement or other applica&le employment contract.
In 0pril !!/, Cniveral Ro&ina and the 6ational 4ederation of 'a&or (64'), a
legitimate la&or organiGation and e%clusive &argaining representative of
Cniversal Ro&ina, of ,hich 0le=andro ,as a mem&er, entered into a 8ollective
Eargaining 0greement (8E0).
0rticle HI of the said 8E0 particularly provided that the retirement &ene:ts of
the mem&ers of the collective &argaining unit shall &e in accordance ,ith la,.
0gripino and 0le=andro, having reached the age of *., ,ere allegedly forced
to retire &y Cniveral Ro&ina.
0gripino and 0le=andro :led a 8omplaint for illegal dismissal.
The '0 rendered a ;ecision declaring the Cniversal Ro&ina guilty of illegal
dismissal.
The 6'R8 held that 0le=andro voluntarily retired and ,ith respect to 0gripino,
the 6'R8 held that 0gripino ,as not a mere casual employee.
The 80 declared that Cniversal Ro&ina illegally dismissed the respondents.
The 80 found that there is no e%isting 8E0 or employment contract &et,een
the parties that provides for early compulsory retirement.
Page 7 of 122
Petitioners su&mit that there is a need to revie, the records and evidence in
this case since the factual :ndings of the '0 and the 80 are in conJict ,ith
those of the 6'R8.
ISSUE: ?hether 0gripino is a seasonal or pro=ect employee.
HEL7:
I( 0' ! *ell-e'(!,l0')ed "le ()!( ! $e(0(0%- .%" "e+0e* %- certiorari
-de" Rle 9: %. ()e Rle' %. C%"( ')%ld "!0'e %-l& @e'(0%-' %.
l!*, su&=ect to certain e%ceptions.
B)e()e" %" -%( Ag"0$0-% *!' ! 'e!'%-!lC$"%2e/( e#$l%&ee %" !
"egl!" e#$l%&ee 0' ! @e'(0%- %. .!/(.
0s such, ()0' C%"( 0' -%( !( l0,e"(& (% "e+0e* ()e '!0d .!/(!l 0''e
,e/!'e %" 2"0'd0/(0%- 0' ge-e"!ll& l0#0(ed (% "e+0e*0-g e""%"' %.
l!* ()!( ()e CA #!& )!+e /%##0((ed.
Time and again, ,e have held that ()0' C%"( 0' -%( ! ("0!l %. .!/(', and 0(
0' -%( .%" ' (% "e-e?!#0-e !-d "e-e+!l!(e ()e $"%,!(0+e +!le %.
e+0de-/e $"e'e-(ed ,e.%"e ()e LA, ()e NLRC !-d ()e CA, ,hich formed
the &asis of the assailed decision.
I-deed, *)e- ()e0" 1-d0-g' !"e 0- !,'%l(e !g"ee#e-(, ()e '!#e !"e
!//%"ded -%( %-l& "e'$e/( ,( e+e- 1-!l0(& !' l%-g !' ()e& !"e !#$l&
'$$%"(ed ,& ','(!-(0!l e+0de-/e.
In this case, it is note,orthy that the '0, the 6'R8 and the 80 are one in
ruling that 0gripino ,as not a casual employee much less a seasonal or
pro=ect employee.
In their :ndings, 0gripino ,as considered a regular employee of CR#C58-.
8onse9uently, such uniform :nding of the '0, the 6'R8, and the 80 &inds this
8ourt.
?e :nd no cogent reason to depart from this ruling.
SAN 8IGUEL CORP V. NLRC 2;7 SCRA 277 D1;;EF
FACTS:
In 6ovem&er !!., 4rancisco ;e GuGman Jr. ,as hired &y #58 as
helper)&ric$layer for a speci:c pro=ect, the repair and upgrading of furnace 8
at its 5anila Glass Plant.
+is contract of employment provided that said temporary employment ,as
for a speci:c period of appro%imately 2 months.
Page E of 122
-n 0pril /., !!, ;e GuGman ,as a&le to complete the repair and upgrading
of furnace 8.
Thus, his services ,ere terminated on that same day as there ,as no more
,or$ to &e done. +is employment contract also ended that day.
-n 5ay ., !!, ;e GuGman ,as again hired for a speci:c =o& ,hich
involved the draining)cooling do,n of furnace 4 and the emergency repair of
furnace <.
This pro=ect ,as for a speci:c period of appro%imately / months. 0fter the
completion of this tas$, at the end of July !!, ;e GuGmanFs services ,ere
terminated.
-n 0ug., !!, complainant sa, his name in a 5emorandum posted at the
8ompanyFs Eulletin Eoard as among those ,ho ,ere considered dismissed.
-n 0ug.3, !!2, or after the lapse of more than / years from the completion
of the last underta$ing for ,hich ;e GuGman ,as hired, he :led a complaint
for illegal dismissal against #58.
-n June /., !!7, '0 rendered the decision dismissing said complaint for lac$
of merit, sustaining #58Fs argument that ;e GuGman ,as a pro=ect
employee.
o The position of a helper does not fall ,ithin the classi:cation of regular
employees.
+ence, complainant never attained regular employment status. 5oreover, his
silence for more than three (/) years ,ithout any reasona&le e%planation
tended to ,ea$en his claim.
Cpon appeal, 6'R8 reversed '0 decision.
o In its ruling, 6'R8 stated that #581s scheme of su&se9uently re-hiring
complainant after only . days from the last day of the e%piration of
his contract of employment for a speci:c period, and giving him again
another contract of employment for another speci:c period cannot &e
countenanced.
o This is one ,ay of doing violence to the employeeFs constitutional right
to security of tenure under ,hich even employees under pro&ationary
status are amply protected.
ISSUES: ?-6 ;< GCK506 ?0# 0 R<GC'0R <5P'-L<< -4 #58.
HEL7: 6o. 0rt. 3". of the 'a&or 8ode de:nes regular, pro=ect and casual
employment.
The a&ove mentioned provision reinforces the 8onstitutional mandate to
protect the interest of la&or as it sets the legal frame,or$ for ascertaining
oneFs nature of employment, and distinguishing diDerent $inds of employees.
Its language manifests the intent to safeguard the tenurial interest of ,or$er
,ho may &e denied the en=oyment of the rights and &ene:ts due to an
employee, regardless of the nature of his employment, &y virtue of lopsided
Page ; of 122
agreements ,hich the economically po,erful employer ,ho can maneuver to
$eep an employee on a casual or contractual status for as long as it is
convenient to the employer.
M?hile the 8onstitution is committed to the policy of social =ustice and the
protection of the ,or$ing class, it should not &e supposed that every dispute
,ill &e automatically decided in favor of la&or.
5anagement has also rights, ,hich, as such, are entitled to respect and
enforcement in the interest of fair play.
0lthough the #upreme 8ourt has inclined more often than not to,ard the
,or$er and has upheld his cause in his conJicts ,ith the employer, such
favoritism has not &linded the 8ourt to the rule that =ustice is in every case
for the deserving, to &e dispensed in the light of the esta&lished facts and the
applica&le la, and doctrine.N
The nature of one1s employment does not depend on the ,ill or ,ord of the
employer nor on the procedure of hiring and the manner of designating the
employee, &ut on the nature of the activities to &e performed &y the
employee, considering the employer1s nature of &usiness and the duration
and scope of the ,or$ to &e done.
Private respondent ,as hired for a speci:c pro=ect that ,as not ,ithin the
regular &usiness of the corporation.
4or petitioner is not engaged in the &usiness of repairing furnaces.
0lthough the activity ,as necessary to ena&le petitioner to continue
manufacturing glass, the necessity therefor arose only ,hen a particular
furnace reached the end of its life or operating cycle.
-r, as in the second underta$ing, ,hen a particular furnace re9uired an
emergency repair. In other ,ords, the underta$ings ,here private respondent
,as hired primarily as helper)&ric$layer have speci:ed goals and purposes,
,hich are ful:lled once the designated ,or$ ,as completed.
5oreover, such underta$ings ,ere also identi:a&ly separate and distinct from
the usual, ordinary or regular &usiness operations of petitioner, ,hich is glass
manufacturing.
These underta$ings, the duration and scope of ,hich had &een determined
and made $no,n to private respondent at the time of his employment,
clearly indicated the nature of his employment as a pro=ect employee.
Thus, his services ,ere terminated legally after the completion of the pro=ect.
Pu&lic respondent 6'R81s decision (that Private respondent is a regular
employee), if upheld, ,ould amount to negating the distinctions made in
0rticle 3". 'a&or 8ode.
It ,ould shunt aside the rule that since a pro=ect employee1s ,or$ depends
on the availa&ility of a pro=ect, necessarily, the duration of his employment is
coterminous ,ith the pro=ect to ,hich he is assigned. It ,ould &ecome a
Page 10 of 122
&urden for an employer to retain an employee and pay him his corresponding
,ages if there ,as no pro=ect for him to ,or$ on.
TAAAS vs CALIFORNIA 8ANUFACTURING CO. and NLRC
FACTS:

-n ()3)!"*, ()3/)!"*, and ()3")!"*, the petitioners petitioned the 6'R8

for reinstatement and payment of various &ene:ts against the respondent,
the 8alifornia 5anufacturing 8ompany.

-n .)()!"*, after the cases had &een consolidated, the 8alifornia :led a
motion to dismiss as ,ell as a position paper denying the e%istence of an
employer-employee relation &et,een the petitioners and the company. -n
motion of the petitioners, 'ivi 5anpo,er #ervices, Inc. ,as impleaded as a
party-respondent.

Petitioners ,ere employees of 'ivi ,hich assigned them to ,or$ as

Bpromotional merchandisersB for 8alifornia $"'!-( (% ! #!-$%*e"
'$$l& !g"ee#e-(.

Portions of the contract e%pressly stipulated the follo,ing@ assignment of

,or$ers to 8alifornia shall &e on a Bseasonal and contractual &asisB and that
Bcost of living allo,ance and the . legal holidays ,ill &e charged directly to
8alifornia at cost.B

Thereafter, petitioners signed employment contracts ,ith durations of si%

months and upon e%piration, they signed ne, agreements ,ith the same
period.

Cnli$e regular 8alifornia employees, ,ho received not less than P3,"3/... a
month in addition to a host of fringe &ene:ts and &onuses, they received
P/".7* plus P7... in allo,ance daily.

Petitioners allege that upon the rene,al of the contract, they had &ecome
regular 8alifornia employee entitled similar &ene:ts.

+o,ever, during the pendency of the proceedings, they ,ere noti:ed &y
8alifornia that they ,ould not &e rehired.

0s a result, they :led an amended complaint charging 8alifornia ,ith illegal

dismissal.
Page 11 of 122

4or 8alifornia1s defense, they deny lia&ility &ecause 'ivi is the petitionersF
employer and that the retrenchment ,as due to &usiness losses and
e%piration of contracts.

It appears that thereafter, 'ivi re-a&sor&ed them into its la&or pool on a B,ait-
in or stand&yB status.

The la&or ar&iterFs decision, a decision a>rmed on appeal, ruled against the
e%istence of any employer-employee relation &et,een the petitioners and
8alifornia ostensi&ly in the light of the manpo,er supply contract.

+o,ever, the la&or ar&iter a&solved 'ivi from any o&ligation &ecause the
retrenchment in 9uestion ,as allegedly B&eyond its control.B

+e assessed against the :rm, nevertheless, separation pay and attorneyFs

fees.
ISSUE: ?hether the petitioners are 8aliforniaFs or 'iviFs employees.
Held: YES.

Petitioners are employees of 8alifornia. Records sho, that the petitioners

signed an initial si%-month contract, &ut it ,as rene,ed for another si%
months.

They had &ecome regular employees of 8alifornia and had ac9uired a secure
tenure.

The fact that the petitioners have &een hired on a Btemporary or seasonalB
&asis is no argument.

0s ,e held in Philippine #an% o& Communications v. NLRC, a (e#$%"!"& %"

/!'!l e#$l%&ee, under 0RTI8'< 3" of the 'a&or 8ode, ,e/%#e' "egl!"
!.(e" 'e"+0/e %. %-e &e!", unless he has &een contracted for a speci:c
pro=ect.

5erchandising is not a speci:c pro=ect, &ut is an underta$ing that is related to

the day-to-day operations of 8alifornia.

'ivi, as a placement agency, supplied the manpo,er necessary to carry out

8aliforniaFs merchandising activities, using 8aliforniaFs premises and
e9uipment.

Petitioners have &een made to perform merchandiGing promotion or sale of

8alifornia1s products, an activity that is an integral part of 8aliforniaFs
manufacturing &usiness.

The e%istence of an employer-employees relation is a 9uestion of la, and

&eing such, it /!--%( ,e #!de ()e ',2e/( %. !g"ee#e-(.
Page 12 of 122

The designation of 'ivi as the petitioner1s employer and the a&solution of

8alifornia from any lia&ility as an employer in the supply agreement *0ll -%(
e"!'e e0()e" $!"(&G' %,l0g!(0%-' !' !- e#$l%&e".

0t any rate, since the agreement ,as &et,een 'ivi and 8alifornia, they alone
are &ound &y it, and the petitioners cannot &e made to suDer from its adverse
conse9uences.

4urther, the 8ourt notes that neither 'ivi nor 8alifornia can escape lia&ility,
&ecause &ased on 0rticle .*, 0- '$0(e ()e !,'e-/e %. ! d0"e/( e#$l%&e"-
e#$l%&ee "el!(0%-')0$ ,e(*ee- ()e e#$l%&e" in ,hose favor ,or$ had
&een contracted out &y a Bla&or-onlyB contractor and the employees, ()e
.%"#e" )!' ()e "e'$%-'0,0l0(& , (%ge()e" *0() ()e Hl!,%"-%-l&H
/%-("!/(%", .%" !-& +!l0d l!,%" /l!0#', ,& %$e"!(0%- %. l!*.

The reason is that the Bla&or-onlyB contractor is considered Bmerely an agent

of the employer,B

and lia&ility must &e shouldered &y either one or shared &y
&oth.

The fact that the petitioners have allegedly admitted &eing 'iviFs Bdirect
employeesB in their complaints is nothing conclusive.

4or one thing, the fact that the petitioners ,ere, ,ill not a&solve 8alifornia
since lia&ility has &een imposed &y legal operation.

4or another, and as ,e indicated, ()e "el!(0%-' %. $!"(0e' #'( ,e 2dged

."%# /!'e (% /!'e !-d ()e de/"ee %. l!*, !-d -%( ,& de/l!"!(0%-' %.
$!"(0e'.

It is not that &y dismissing the terms and conditions of the manpo,er supply
agreement, ,e have, hence, considered it illegal.

U-de" ()e L!,%" C%de, ge-0-e 2%, /%-("!/(' !"e $e"#0''0,le,

$"%+0ded ()e& !"e ge-0-e 2%, /%-("!/('.

Eut, as ,e held in Philippine #an% o& Communications, supra, ,hen such

arrangements are resorted to Bin anticipation of, and for the very purpose of
ma$ing possi&le, the secondment of the employees from the true employer,
the 8ourt ,ill &e =usti:ed in e%pressing its concern.

4or then that ,ould compromise the rights of the ,or$ers, especially their
right to security of tenure.
7ISPOSITION@ Petition is GR06T<;. Petitioners ,ere R<I6#T0T<; ,ith full status
and rights of regular employees. Respondents ,ere -R;<R<; to pay costs of the
suit and other a,ards.
P)0l0$' Se#0/%-d/(%"' e(/. +' F!d"0@el! 927 SCRA 90E
FACTS:
Page 16 of 122
-n 5ay ", !!3, respondent <loisa 4adri9uela e%ecuted a 8ontract of
<mployment ,ith petitioner Philips #emiconductors as a production operator,
initially for / months.
Eecause her performance constantly met petitioner1s ratings re9uirements,
her contract ,as rene,ed several times, e%tending to 3 months.
+o,ever, over the last fe, months, respondent incurred several a&sences for
,hich she oDered no valid =usti:cation despite a prompting to do so &y the
line supervisor.
0s a conse9uence, her performance rating dropped, and respondent1s
contract ,as no longer rene,ed.
Respondent :led a complaint ,ith the 6'R8 for illegal dismissal, claiming she
had not &een duly noti:edA she ,as already a regular employee and could not
&e terminated ,ithout =ust cause.
Petitioner contended that respondent had not &een dismissedA rather, her
contract merely e%pired and ,as not rene,ed.
The 'a&or 0r&iter dismissed the complaint for lac$ of merit &ut a,arded her
severance of month1s pay.
+e stated that petitioner and its union1s 8E0 re9uired one to render (
months of service to &e considered regular.
+e also added that respondent could not complain of &eing deprived of notice
and hearing as the line supervisor had as$ed her to e%plain her a&sences.
0n appeal ,ith the 6'R8 yielded the same results.
It ,as pointed out that as a contractual employee respondent ,as &ound &y
the stipulations of her contract of employment, ,hich in this case ,as a
satisfactory performance rating.
;issatis:ed, respondent :led a petition for certiorari &efore the 80, ,hich
reversed the decisions of the 6'R8 and the 'a&or 0r&iter.
o The appellate court argued that the 6'R8 and the 'a&or 0r&iter
employed inappropriate &ases for their decisions, since the 8E0 did not
apply to contractual employees li$e 4adri9uela.
o The 80 cited 0rt. 3". of the 'a&or 8ode ,hich states that regardless of
any ,ritten or oral agreements &et,een employer and employee, Man
employment shall &e deemed to &e regular ,here the employee has
&een engaged to perform activities ,hich are usually necessary or
desira&le in the usual &usiness or trade of the employerN.
o Petitioner1s contention that employment ,as o&tained as the need
arose ,as illogical, as this ,ould mean the employee ,ould never
attain regular status. The 80 further held that a less punitive penalty
,ould su>ce for a&senteeism.
o 4inally, it held that the dialogue &et,een the respondent and line
supervisor ,as insu>cient as to amount to notice, and thus the former
,as deprived of due process.
Page 19 of 122
Petitioner :led a motion for reconsideration in ,hich petitioner claimed that
its hiring policy ,as neither ne, nor prohi&ited and that it ,as a valid
e%ercise of its management prerogative since demand for its semiconductors
is cyclical in nature.
It added that it had the prerogative to set reasona&le standards of
employment 9uali:cation as provided &y la,.
The motion ,as denied, hence this petition for revie,.
ISSUE: ?hether or not the respondent ,as still a contractual employee of the
petitioner as of June 2, !!/.
HEL7: The respondent is a regular employee.
0rt. 3".. Regular and Casual 'mplo(ment. O The provisions of ,ritten
agreement to the contrary not,ithstanding and regardless of the oral
argument of the parties, an employment shall &e deemed to &e regular
,here the employee has &een engaged to perform activities ,hich are
usually necessary or desira&le in the usual &usiness or trade of the
employer, e%cept ,here the employment has &een :%ed for a speci:c
pro=ect or underta$ing the completion or termination of ,hich has &een
determined at the time of the engagement of the employee or ,here the
,or$ or services to &e performed is seasonal in nature and the
employment is for the duration of the season.
0n employment shall &e deemed to &e casual if it is not covered &y the
preceding paragraphA Provided, That, any employee ,ho has rendered at
least one year of service, ,hether such service is continuous or &ro$en,
shall &e considered a regular employee ,ith respect to the activity in
,hich he is employed and his employment shall continue ,hile such
activity e%ists.
There are t,o $inds of regular employees under the la,@() those engaged to
perform activities ,hich are necessary or desira&le in the usual &usiness or
trade of the employerA and (3) those casual employees ,ho have rendered at
least one year of service, ,hether continuous or &ro$en, ,ith respect to the
activities in ,hich they are employed.
The primary standard to determine a regular employment is the reasona&le
connection &et,een the particular activity performed &y the employee in
relation to the &usiness or trade of the employer.
The test is ,hether the former is usually necessary or desira&le in the usual
&usiness or trade of the employer.
Page 1: of 122
If the employee has &een performing the =o& for at least one year, even if the
performance is not continuous or merely intermittent, the la, deems the
repeated and continuing need for its performance as su>cient evidence of
the necessity, if not indispensa&ility of that activity to the &usiness of the
employer.
+ence, the employment is also considered regular, &ut only ,ith respect to
such activity and ,hile such activity e%ists.
The la, does not provide the 9uali:cation that the employee must :rst &e
issued a regular appointment or must &e declared as such &efore he can
ac9uire a regular employee status.
The respondent ,as employed &y the petitioner on 5ay ", !!3 as
production operator. #he ,as assigned to ,ire&uilding at the transistor
division.
There is no dispute that the ,or$ of the respondent ,as necessary or
desira&le in the &usiness or trade of the petitioner.
#he remained under the employ of the petitioner ,ithout any interruption
since 5ay ", !!3 to June 2, !!/ or for one () year and t,enty-eight (3")
days.
The original contract of employment had &een e%tended or rene,ed for four
times, to the same position, ,ith the same chores.
#uch a continuing need for the services of the respondent is su>cient
evidence of the necessity and indispensa&ility of her services to the
petitioner1s &usiness.
Ey operation of la,, then, the respondent had attained the regular status of
her employment ,ith the petitioner, and is thus entitled to security of tenure
as provided for in 0rticle 3(! of the 'a&or 8ode ,hich reads@
0rt. 3(!. Securit( o& )enure. O In cases of regular employment,
the employer shall not terminate the services of an employee
e%cept for a =ust cause or ,hen authoriGed &y this Title. 0n
employee ,ho is un=ustly dismissed from ,or$ shall &e entitled
to reinstatement ,ithout loss of seniority rights and other
privileges and to his full &ac$,ages, inclusive of allo,ances, and
to his other &ene:ts or their monetary e9uivalent computed
Page 16 of 122
from the time his compensation ,as ,ithheld from him up to the
time of his actual reinstatement.
0rticle 3". of the 'a&or 8ode of the Philippines ,as emplaced in our statute
&oo$s to prevent the circumvention &y unscrupulous employers of the
employee1s right to &e secure in his tenure &y indiscriminately and
completely ruling out all ,ritten and oral agreements inconsistent ,ith the
concept of regular employment de:ned therein.
The language of the la, manifests the intent to protect the tenurial interest
of the ,or$er ,ho may &e denied the rights and &ene:ts due a regular
employee &ecause of lopsided agreements ,ith the economically po,erful
employer ,ho can maneuver to $eep an employee on a casual or temporary
status for as long as it is convenient to it.
In tandem ,ith 0rticle 3" of the 'a&or 8ode, 0rticle 3". ,as designed to put
an end to the pernicious practice of ma$ing permanent casuals of our lo,ly
employees &y the simple e%pedient of e%tending to them temporary or
pro&ationary appointments, ad in*nitum.
Cnder #ection /, 0rticle HII of the 8onstitution, it is the policy of the #tate to
assure the ,or$ers of security of tenure and free them from the &ondage of
uncertainty of tenure ,oven &y some employers into their contracts of
employment. The guarantee is an act of social =ustice.
?hen a person has no property, his =o& may possi&ly &e his only possession
or means of livelihood and those of his dependents.
?hen a person loses his =o&, his dependents suDer as ,ell.
The ,or$er should therefore &e protected and insulated against any ar&itrary
deprivation of his =o&.
UNIVERSAL ROAINA e(/. +'. CAAALLE7A (please refer to (..3)
8AGSALIN V. NATIONAL ORGANIIATION 906 SCRA 1;; D2006F
FACTS:
8oca-8ola Eottlers Phils. Inc engaged the services of respondent ,or$ers as
Msales route helpersN for a limited period of :ve months.
Page 17 of 122
0fter :ve months, respondent ,or$ers ,ere employed &y Petitioner 8ompany
on a day-to-day &asis to su&stitute for regular sales route helpers ,henever
the latter ,ould &e unavaila&le or ,hen there ,ould &e an une%pected
shortage of manpo,er in any of its ,or$ places or an unusually high volume
of ,or$.
The practice ,as for the ,or$ers to ,ait every morning outside the gates of
the sales o>ce of petitioner company.
If thus hired, the ,or$ers ,ould then &e paid their ,ages at the end of the
day.
Cltimately, respondent ,or$ers as$ed Petitioner 8ompany to e%tend to them
regular appointments.
Pe(0(0%-e" /%#$!-& "e.'ed.
6ovem&er (, !!( - t,enty-three (3/) of the NtemporaryN ,or$ers (herein
respondents) :led ,ith the 6'R8 a /%#$l!0-( .%" ()e "egl!"0J!(0%- %.
()e0" e#$l%&#e-( ,ith petitioner company.
The complaint ,as amended a num&er of times to include other
complainants that ultimately totaled :fty-eight (7") ,or$ers.
8laiming that petitioner company mean,hile terminated their services,
respondent ,or$ers :led a notice of stri$e and a complaint for illegal
dismissal and unfair la&or practice ,ith the 6'R8.
. 0pril !!" - +%l-(!"& !",0("!(0%-
" 5ay !!" - the voluntary ar&itrator rendered a decision d0'#0''0-g the
complaint on the thesis that respondents (then complainants) ,ere not
regular employees of petitioner company.
0ugust 3..., the 8ourt of 0ppeals "e+e"'ed !-d 'e( !'0de the ruling of
the voluntary ar&itrator A (Petitioners ,ere declared regular employees of
8oca 8ola EottlersA dismissal illegalA ordered to reinstate the ,or$ers)
ISSUES:
. ?-6 the nature of ,or$ of respondents in the company is of such nature as
to &e deemed necessary and desira&le in the usual &usiness or trade of
petitioner that could 9ualify them to &e regular employees
3. ?-6 the 9uitclaims e%ecuted &y the /* individual respondents ,ere valid
HEL7:
. L<#. In determining ,hether an employment should &e considered regular or
non-regular, the applica&le test is the reasona&le connection &et,een the
particular activity performed &y the employee in relation to the usual
&usiness or trade of the employer.
Page 1E of 122
. Intentionalist approach - <ven ,hile the language of la, (0rt 3".) might
have &een more de:nitive, the clarity of its spirit and intent, i.e., to ensure
a MregularN ,or$er1s security of tenure, ho,ever, can hardly &e dou&ted.
3. 0lthough the ,or$ to &e performed is only for a speci:c pro=ect or
seasonal, ,here a person thus engaged has &een performing the =o& for at
least one year, even if the performance is not continuous or is merely
intermittent, the la, deems the repeated and continuing need for its
performance as &eing su>cient to indicate the necessity or desira&ility of
that activity to the &usiness or trade of the employer. The employment of
such person is also then deemed to &e regular ,ith respect to such
activity and ,hile such activity e%ists.
/. MThe postproduction activitiesN done &y sales route helpers are important.
The nature of the ,or$ performed must &e vie,ed from a perspective of
the &usiness or trade in its entirety and not on a con:ned scope.
2. The repeated rehiring of respondent ,or$ers and the continuing need for
their services clearly attest to the necessity or desira&ility of their services
in the regular conduct of the &usiness or trade of petitioner company.
7. 0 contract of employment is impressed ,ith pu&lic interest. The provisions
of applica&le statutes are deemed ,ritten into the contract, and Mthe
parties are not at li&erty to insulate themselves and their relationships
from the impact of la&or la,s and regulations &y simply contracting ,ith
each other.N
3. L<#. ?hile 9uitclaims e%ecuted &y employees are commonly fro,ned upon as
&eing contrary to pu&lic policy and are ineDective to &ar claims for the full
measure of their legal rights, there are, ho,ever, legitimate ,aivers that
represent a voluntary and reasona&le settlement of la&orers1 claims ,hich
should &e so respected &y the 8ourt as the la, &et,een the parties.
?here the person ma$ing the ,aiver has done so voluntarily, ,ith a full
understanding thereof, and the consideration for the 9uitclaim is credi&le and
reasona&le, the transaction must &e recogniGed as &eing a valid and &inding
underta$ing.
M;ire necessityN is not an accepta&le ground for annulling the release, ,hen
it is not sho,n that the employee has &een forced to e%ecute it.
HACIEN7A FATI8A and)or PATRICIO VILLEGAS, ALFONSO VILLEGAS !-d
CRISTINE SEGURA vs NATIONAL FE7ERATION OF SUGARCANE BORKERS-
FOO7 and GENERAL TRA7E
FACTS:
Petition for Revie, under Rule 27 of the Rules of 8ourt, see$ing to set aside 801s
decision (3)3.)3..) ,hich declared complainant union to have &een illegally
dismissed.
Page 1; of 122
?or$ers of +acienda 4atima organiGed themselves into a union. +o,ever, the
organiGation ,as not favored &y the petitioners.
Thus, ,hen the union ,as certi:ed as the collective &argaining
representative in the certi:cation elections, petitioners refused to sit do,n
,ith the union for the purpose of entering into a collective &argaining
agreement.
In protest, complainants staged a stri$e ,hich ,as settled upon the signing of
a 5emorandum of 0greement.
0nother dispute arose &et,een the parties, it ,as alleged that respondent
union failed to load the :fteen ,agons, so petitioners reneged on its
commitment to sit do,n and &argain collectively.
Petitioners prevented the organiGers from entering the premises and starting
#eptem&er !!, did not assign any ,or$ forcing the union to stage a stri$e
on )3)!!3.
Eut due to the conciliation eDorts &y the ;-'<, another 5emorandum of
0greement ,as signed &y the complainants.
0mong other things, the 0greement aims to resolve the status of the su&=ect
/* hacienda ,or$ers, to determine ,hether or not the concerned Cnion
mem&ers are hacienda ,or$ers or employees.
Pursuant thereto, the parties su&se9uently met and a list of employees ,as
su&mitted.
4our people are deemed not considered employees, one employee shall &e
veri:ed in the !!. payroll and 3 employees are to &e reinstated
immediately upon availa&ility of ,or$.
+o,ever, despite of the 0greement, petitioners again reneged on its
commitment.
The complaint of the union ,as lodged to 6'R8 and 80.
The appellate courts &oth found that the accusation that the ,or$ers refused
to ,or$ and ,as choosy in the $ind of ,or$ they have to perform are
groundless.
4urther, 80 a>rmed that ,hile the ,or$ of respondents ,as seasonal in
nature, they ,ere considered to &e merely on leave during the oD-season and
,ere therefore still employed &y petitioners.
5oreover, the ,or$ers en=oyed security of tenure.
0ny infringement upon this right ,as deemed &y the 80 to &e tantamount to
illegal dismissal.
The 80 li$e,ise concurred ,ith the 6'R8Fs :nding that petitioners ,ere guilty
of unfair la&or practice.
+ence, this Petition.
ISSUE: ?hether the respondents are seasonal ,or$ers or regular employees.
Page 20 of 122
HEL7: The ,or$ers are regular employees.
The lo,er courts did not err in its :ndings that respondents ,ere regular
employees.
0rticle 3". of the 'a&or 8ode, as amended, states@
B0rt. 3".. Regular and 8asual <mployment. P The provisions of ,ritten agreement
to the contrary not,ithstanding and regardless of the oral agreement of the parties,
an employment shall &e deemed to &e regular ,here the employee has &een
engaged to perform activities ,hich are usually necessary or desira&le in the usual
&usiness or trade of the employer, e%cept ,here the employment has &een :%ed for
a speci:c pro=ect or underta$ing the completion or termination of ,hich has &een
determined at the time of the engagement of the employee or ,here the ,or$ or
services to &e performed is seasonal in nature and the employment is for the
duration of the season.
B0n employment shall &e deemed to &e casual if it is not covered &y the preceding
paragraph@ P"%+0ded, T)!(, !-& e#$l%&ee *)% )!' "e-de"ed !( le!'( %-e
&e!" %. 'e"+0/e, ,hether such service is /%-(0-%' %" ,"%3e-, shall &e
considered ! "egl!" e#$l%&ee ,ith respect to the activity in ,hich he is
employed and his employment shall continue ,hile such activity e%ist.B
4or respondents to &e e%cluded from those classi:ed as regular employees, it
is not enough that they perform ,or$ or services that are seasonal in nature.
T
hey must have also &een employed only for the duration of one season.
The evidence proves the e%istence of the :rst, &ut not of the second,
condition.
The fact that respondents P ,ith the e%ception of 'uisa Rom&o, Ramona
Rom&o, Eo&ong 0&riga and Eo&oy #ilva P repeatedly ,or$ed as sugarcane
,or$ers for petitioners for several years is not denied &y the latter.
<vidently, $e(0(0%-e"' e#$l%&ed "e'$%-de-(' .%" #%"e ()!- %-e
'e!'%-.
Therefore, ()e ge-e"!l "le %. "egl!" e#$l%&#e-( 0' !$$l0/!,le.
The 8ourt cited the ruling in +basolo v. National Labor Relations Commission,
that primary standard, therefore, of determining regular employment is the
reasona&le connection &et,een the particular activity performed &y the
employee in relation to the usual trade or &usiness of the employer.
T)e (e'( 0' *)e()e" ()e .%"#e" 0' '!ll& -e/e''!"& %" de'0"!,le 0-
()e '!l ("!de %" ,'0-e'' %. ()e e#$l%&e".
Page 21 of 122
0lso if the employee has &een performing the =o& for at least a year, even i&
the per&ormance is not continuous and merel( intermittent, the la, deems
"e$e!(ed !-d /%-(0-0-g -eed for its performance as '5/0e-(
e+0de-/e %. ()e -e/e''0(& 0. -%( 0-d0'$e-'!,0l0(& %. ()!( !/(0+0(& (%
()e ,'0-e''.
+ence, the employment is considered regular, &ut only ,ith respect to such
activity and ,hile such activity e%ists.
The 8ourt has already settled that seasonal ,or$ers ,ho are called to ,or$
from time to time and are temporarily laid oD during oD-season are not
separated from service in said period, &ut merely considered on leave until
re-employed.
The 80 did not err ,hen it ruled that ,ercado v. NLRC ,as not applica&le to
the case at &ar.
In the earlier case, the ,or$ers ,ere re9uired to perform phases of
agricultural ,or$ for a de:nite period of time, after ,hich their services ,ould
&e availa&le to any other farm o,ner.
They ,ere not hired regularly and repeatedly for the same phase)s of
agricultural ,or$, &ut on and oD for any single phase thereof.
-n the other hand, herein respondents, having performed the same tas$s for
petitioners every season for several years, are considered the latterFs regular
employees for their respective tas$s. PetitionersF eventual refusal to use their
services P even if they ,ere ready, a&le and ,illing to perform their usual
duties ,henever these ,ere availa&le P and hiring of other ,or$ers to
perform the tas$s originally assigned to respondents amounted to illegal
dismissal of the latter.
The 8ourt :nds no reason to distur& the 80Fs dismissal of ,hat petitioners
claim ,as their valid e%ercise of a management prerogative.
The sudden changes in ,or$ assignments ree$ed of &ad faith.
These changes ,ere implemented immediately after respondents had
organiGed themselves into a union and started demanding collective
&argaining.
Those ,ho ,ere union mem&ers ,ere eDectively deprived of their =o&s.
PetitionersF move actually amounted to un=usti:ed dismissal of respondents,
in violation of the 'a&or 8ode.
?here there is no sho,ing of clear, valid and legal cause for the termination
of employment, the la, considers the matter a case of illegal dismissal and
the &urden is on the employer to prove that the termination ,as for a valid
and authoriGed cause.
In the case at &ar, petitioners failed to prove any such cause for the dismissal
of respondents ,ho, as discussed a&ove, are regular employees.
7ISPOSITION: Petition is 7ENIE7. ;ecision of 80 is AFFIR8E7.
Page 22 of 122
S30$$e"' U-0(ed +' NLRC 9;9 SCRA 661
FACTS:
Private respondent Gervasio Rosaroso ,as employed as a Third <ngineer ,ith
6icola$is #hipping, #.0., a foreign :rm through its recruitment and manning
agency, petitioner #$ippers.
The employment contract ,as for the period of one year &eginning July .,
!!( ,ith a salary of Q".. per month and other &ene:ts.
Rosaroso &oarded 5)I 6aval Gent on July 7, !!(.
+e ,as ho,ever ordered to disem&ar$ in Eulgaria on 0ugust (, !!( and
repatriated to the Philippines.
#oon after arrival in 5anila, respondent :led a complaint for illegal dismissal
and monetary claims.
The 'a&or 0r&iter found the respondent ,as in fact illegally dismissed and
issued an order directing petitioner, #$ippers, to pay Rosaroso separation pay
of Q3,2... or the e9uivalent of P..,..., representing three months pay and
unpaid salary for seven days of Q"*.*! or the e9uivalent of P(,"2..!".
0torney1s fees of P7,... ,as also a,arded.
T)e NLRC !-d ()e CA !5"#ed e- (%(% ()e "l0-g %. ()e A",0(e".
ISSUE: ?hether or not the respondent is entitled to &ac$,age and separation pay
on the &asis of the alleged illegal dismissal.
HEL7:
0 seafarer is not a regular employee as de:ned in 0rticle 3". of the 'a&or
8ode.
+ence, he is not entitled to full &ac$,ages and separation pay in lieu of
reinstatement as provided in 0rticle 3(! of the 'a&or 8ode.
#eafarers are contractual employees ,hose rights and o&ligations are
governed primarily &y the P-<0 #tandard <mployment 8ontract for 4ilipino
#eamen, the Rules and Regulations Governing -verseas <mployment, and,
more importantly, &y Repu&lic 0ct (R.0.) 6o. ".23, or the 5igrant ?or$ers
and -verseas 4ilipinos 0ct of !!7.
?hile the P-<0 #tandard <mployment 8ontract for 4ilipino #eamen and the
Rules and Regulations Governing -verseas <mployment do not provide for
the a,ard of separation or termination pay, #ection . of R.0. ".23 provides
for the a,ard of money claims in cases of illegal dismissals, thus@
Page 26 of 122
#ection .. ,one( Claims. O In case of termination of overseas
employment ,ithout =ust, valid or authoriGed cause as de:ned
&y la, or contract, the ,or$er shall &e entitled to the full
reim&ursement of his placement fee ,ith interest at t,elve
percent (3R) per annum, plus his salaries for the une%pired
portion of his employment contract or for three (/) months for
every year of the une%pired term, ,hichever is less.
The a,ard of salaries for the une%pired portion of his employment contract or
for three (/) months for every year of the une%pired term, ,hichever is less,
is not an a,ard of &ac$,ages or separation pay, &ut a form of indemnity for
the ,or$er ,ho ,as illegally dismissed.
The 'a&or 0r&iter may have misla&eled it as separation pay, nonetheless, the
a,ard ,as made in conformity ,ith la,.
LOPEI vs. 8ETROPOLITAN BATERBORKS AN7 SEBERAGE SYSTE8
FACTS:
Ey virtue of an +greement, petitioners ,ere engaged &y the 5?## as
collectors-contractors, ,herein the former agreed to collect from the
concessionaires of 5?##, charges, fees, assessments of rents for ,ater,
se,er and)or plum&ing services ,hich the 5?## &ills from time to time.
In !!(, 5?## entered into a 8oncession 0greement ,ith 5anila ?ater
#ervice ,herein the collection of &ills ,as transferred to said private
concessionaires, eDectively terminating the contracts of service &et,een
petitioners and 5?##.
Regular employees of the 5?## ,ere paid their retirement &ene:ts, &ut not
petitioners.
5?## relied on a resolution of the 8ivil #ervice 8ommission (8#8) that
contract-collectors of the 5?## are not its employees and therefore not
entitled to the &ene:ts due regular government employees.
Petitioners :led a complaint ,ith the 8#8. 8#8 denied their claims, stating
that petitioners ,ere engaged &y 5?## through a contract of service, ,hich
e%plicitly provides that a &ill collector-contractor is not an 5?## employee.
Relying on Part I of 8#8 5emorandum 8ircular 6o. /", #eries of !!/, the
8#8 stated that contract services)=o& orders are not considered government
services, ,hich do not have to &e su&mitted to the 8#8 for approval, unli$e
contractual and plantilla appointments.
To further strengthen their case, petitioners refer to 8#8 Resolution !3-3.."
dated " ;ecem&er !!3, ,hich states in part@
Page 29 of 122
. . . The fact that they ,ere &eing hired directly and paid on
commission &asis &y 5?## itself is indicative that they are
government employees and should &e entitled to the incentive
a,ards.
ISSUE: ?-6 petitioners ,ere employees of the 5?##.
HEL7: Petitioners are indeed regular employees of the 5?##.
T)e $"0#!"& '(!-d!"d %. de(e"#0-0-g "egl!" e#$l%&#e-( 0' ()e
"e!'%-!,le /%--e/(0%- ,e(*ee- ()e $!"(0/l!" !/(0+0(& $e".%"#ed ,&
()e e#$l%&ee 0- "el!(0%- (% ()e '!l ,'0-e'' %" ("!de %. ()e
e#$l%&e".
T)e /%--e/(0%- /!- ,e de(e"#0-ed ,& /%-'0de"0-g ()e -!("e %. ()e
*%"3 $e".%"#ed !-d 0(' "el!(0%- (% ()e '/)e#e %. ()e $!"(0/l!"
,'0-e'' %" ("!de 0- 0(' e-(0"e(&.
L03e*0'e, ()e "e$e!(ed !-d /%-(0-0-g -eed .%" ()e $e".%"#!-/e %.
()e 2%, )!' ,ee- dee#ed '5/0e-( e+0de-/e %. ()e -e/e''0(&, 0. -%(
0-d0'$e-'!,0l0(& %. ()e !/(0+0(& (% ()e ,'0-e''.
S%#e %. ()e $e(0(0%-e"' )!d "e-de"ed #%"e ()!- (*% de/!de' %.
'e"+0/e (% ()e 8BSS.
T)e /%-(0-%' !-d "e$e!(ed "e)0"0-g %. ()e'e ,0ll /%lle/(%"' 0-d0/!(e
()e -e/e''0(& !-d de'0"!,0l0(& %. ()e0" 'e"+0/e', !' *ell !' ()e
0#$%"(!-/e %. ()e "%le %. ,0ll /%lle/(%"' 0- ()e 8BSS.
V0e*ed 0- ()!( /%-(e?( ()e *%"3 "e-de"ed ,& ()e $e(0(0%-e"' 0'
e''e-(0!l (% ()e /%#$!-&4' '"+0+!l !-d g"%*().
8BSS "el0e' .%" ()e #%'( $!"( %- ()e ,0ll /%lle/(0%-' 0- %"de" (%
''(!0- 0(' %$e"!(0%-'.
It is not intermittent and seasonal, &ut rather continuous and increasing &y
reason of its indisputa&le essentiality.
PNOC-ENERGY 7EVELOP8ENT CORP V. NLRC :21 SCRA 222 D2007F
FACTS:
P6-8-<;8 is a G-88 engaged in the e%ploration, development and utiliGation
of energy. Petitioner1s #outhern 6egros Geothermal Production 4ield in 6egros
-riental is divided into 3 phases@ P0' I and P0' II.
Page 2: of 122
To augment its manpo,er re9uirement occasioned &y the increased activities
in the development of P0' II, P6-8-<;8 hired private respondents in the
administration and maintenance section.
The termination)e%piration of their respective employment ,ere speci:ed in
their initial employment contracts, ,hich, ho,ever, ,ere rene,ed and
e%tended on their respective e%piry dates.
In 5ay !!", P6-8-<;8 furnished respondent employees uniformly ,orded
notices of termination, stating that they ,ere &eing terminated from
employment eDective June 3., !!" due to the su&stantial completion of the
civil ,or$s phase of P0' II.
Private respondents, then, :led &efore 6'R8 a complaint for illegal dismissal
against petitioner and sought the payment of &ac$ ,ages, salary
diDerentials, 8E0 &ene:ts, damages and fees.
o They averred that their dismissal ,as a clear case of union &usting for
they had previously sought union mem&ership and actually :led a
notice of stri$e.
Petitioner contended that respondents ,ere contractual employeesA as such,
they cannot claim to have &een illegally dismissed &ecause upon the
e%piration of the term of the contract or the completion of the pro=ect, their
employer-employee relationship also ended.
'0 dismissed the complaint for lac$ of legal and factual &asis.
6'R8 reversed the decision citing that respondents ,ere regular non-pro=ect
employees for having ,or$ed for more than year in positions that re9uired
them to perform activities necessary and desira&le in the normal &usiness or
trade of petitioner.
Petitioner1s arguments@ respondents are pro=ect employees &ecause as
gleaned from their standard contracts of employment, they ,ere hired for a
speci:c pro=ect, the completion or termination of ,hich had &een determined
at the time of their engagement.
o Their contracts clearly indicated the completion or termination of the
speci:c pro=ect or of the speci:c phase thereof at the time they ,ere
engaged.
Respondents1 argument@ They ,ere undenia&ly performing activities ,hich
are necessary or desira&le in the usual trade or &usiness of petitioner.
o They aver that the completion of their individual employment ,as not
determined at the time of their engagement due to the fact that their
contracts ,ere rene,ed and e%tended over and over again.
o They claim that had the periods of their employment &een determined,
then their ,or$ ,ith petitioner ,ould not have lasted &eyond the
three-month period provided in their respective initial employment
contracts.
Page 26 of 122
o They li$e,ise theoriGed that the contracts they signed ,ere short-term
contracts covering a long period of the same activity, not for a speci:c
pro=ect or underta$ing.
ISSUE: ?-6 private respondents ,ere pro=ect employees.
HEL7: 6o, private respondents ,ere regular employees of P6-8-<;8.
The applica&le formula to ascertain ,hether an employment should &e
considered regular or non-regular is the reasona&le connection &et,een the
particular activity performed &y the employee in relation to the usual
&usiness or trade of the employer.
0s held in Grandspan ;evelopment 8orporation v. Eernardo@
The principal test for determining ,hether particular employees
are properly characteriGed as Bpro=ect employees,B as
distinguished from Bregular employees,B is ,hether or not the
pro=ect employees ,ere assigned to carry out a Bspeci:c pro=ect
or underta$ing,B the duration and scope of ,hich ,ere speci:ed
at the time the employees ,ere engaged for that pro=ect.
0s de:ned, pro=ect employees are those ,or$ers hired () for a speci:c
pro=ect or underta$ing, and (3) the completion or termination of such pro=ect
or underta$ing has &een determined at the time of the engagement of the
employee.
+o,ever, petitioner failed to su&stantiate its claim that respondents ,ere
hired merely as pro=ect employees. 0 perusal of the records of the case
reveals that the supposed speci:c pro=ect or underta$ing of petitioner ,as
not satisfactorily identi:ed in the contracts of respondents.
0nother cogent factor ,hich militates against petitioner1s insistence that the
services of respondents ,ere terminated &ecause the pro=ects for ,hich they
,ere hired had &een completed is the fact that respondents1 contracts of
employment ,ere e%tended a num&er of times for diDerent or ne, pro=ects. It
must &e stressed that a contract that misuses a purported :%ed-term
employment to &loc$ the ac9uisition of tenure &y employees deserves to &e
struc$ do,n for &eing contrary to la,, morals, good customs, pu&lic order
and pu&lic policy.
PAUL V. SANTIAGO vs CF SHARP CREB 8ANAGE8ENT, INC .
FACTS:
Page 27 of 122
Petitioner had &een ,or$ing as a seafarer for #mith Eell 5anagement, Inc. for
a&out :ve years. -n 3)/)!!", petitioner signed a ne, contract of
employment ,ith respondent, ,ith the duration of ! months.
The contract ,as approved &y the P-<0.
Petitioner ,as to &e deployed on &oard the B5#I #easpreadB ,hich ,as
scheduled to leave the port of 5anila for 8anada on 3)/)!!".
Prior to scheduled date of departure, 8apt. Paci:co 4ernandeG (Iice President)
conveyed to the captain that, &ased from a phone call he received from
unidenti:ed persons, petitioner ,ill =ump ship in 8anada li$e his &rother.
#u&se9uently, the 8apt. of B5#I #easpread,B informed petitioner that he
,ould not &e leaving for 8anada anymore, &ut he ,as reassured that he
might &e considered for deployment at some future date.
Thereafter, petitioner :led a complaint for illegal dismissal, damages, and
attorneyFs fees against respondent and its foreign principal, 8a&le and
?ireless (5arine) 'td.
'a&or 0r&iter1s Ruling rendered respondent lia&le for damages.
o Respondent violated the rules and regulations governing overseas
employment ,hen it did not deploy petitioner. <mployment contract
remained valid &ut had not commenced since petitioner ,as not
deployed.
o Petitioner is entitled to damages representing lost salary income for !
months and :%ed overtime fee.
6'R81s Ruling reversed '01s decision.
o 6o employer-employee relationship &et,een petitioner and respondent
&ecause under the P-<0 #tandard 8ontract, the employment contract
shall commence upon actual departure of the seafarer from the Port of
5anila.
8ourt of 0ppeals Ruling a>rmed.
o Petitioner is not entitled to actual damages &ecause damages are not
recovera&le &y a ,or$er ,ho ,as not deployed &y his agency ,ithin
the period prescri&ed in the P-<0 Rules.
o #ince petitioner had not departed from the Port of 5anila, no employer-
employee relationship &et,een the parties arose and claims for
damages against the so-called employer cannot &e recovered.
Petitioner1s su&se9uent motion for reconsideration ,as denied.
+ence, this petition.
ISSUE: ?hether or not petitioner is entitled (a) to recover damages representing
lost salary income and :%ed overtime feeA and (&) to &e considered a regular
employee, having ,or$ed for 7 years on &oard the same vessel.
Page 2E of 122
HEL7:
DAF YES, Petitioner may recover damages &ut he is not entitled to overtime pay.
There is no 9uestion that the parties entered into an employment contract
on 3)/)!!", ,here&y petitioner ,as contracted &y respondent to render
services on &oard B5#I #easpreadB for the consideration of C#Q77...
per month for ! months, plus overtime pay.
+o,ever, respondent failed to deploy petitioner from the port of 5anila to
8anada.
8onsidering that petitioner ,as not a&le to depart from the airport or
seaport in the point of hire, the employment contract did not commence
and no employer-employee relationship ,as created &et,een the parties.
+o,ever, a distinction must &e made &et,een the perfection of the
employment contract and the commencement of the employer-employee
relationship.
The $e".e/(0%- %. ()e /%-("!/( occurred ,hen petitioner and
respondent agreed on the o&=ect and the cause, as ,ell as the rest of the
terms and conditions therein.
The /%##e-/e#e-( %. ()e e#$l%&e"-e#$l%&ee "el!(0%-')0$ ,ould
have ta$en place had petitioner &een actually deployed from the point of
hire.
T)', e+e- ,e.%"e ()e '(!"( %. !-& e#$l%&e"-e#$l%&ee
"el!(0%-')0$, /%-(e#$%"!-e%' *0() ()e $e".e/(0%- %. ()e
e#$l%&#e-( /%-("!/( *!' ()e ,0"() %. /e"(!0- "0g)(' !-d
%,l0g!(0%-' , the &reach of ,hich may give rise to a cause of action
against the erring party.
?hile the P-<0 #tandard 8ontract must &e recogniGed and respected,
neither the manning agent nor the employer can simply prevent a
seafarer from &eing deployed ,ithout a valid reason.
Re'$%-de-(4' !/( %. $"e+e-(0-g $e(0(0%-e" ."%# de$!"(0-g ()e $%"(
%. 8!-0l! !-d ,%!"d0-g H8SV Se!'$"e!dH /%-'(0((e' ! ,"e!/) %.
/%-("!/(, g0+0-g "0'e (% $e(0(0%-e"4' /!'e %. !/(0%-. Respondent
-0l!(e"!ll& !-d -"e!'%-!,l& "e-eged %- 0(' %,l0g!(0%- to deploy
petitioner and must therefore !-'*e" .%" ()e !/(!l d!#!ge' )e
'Le"ed.
A"(0/le 21;; %. ()e C0+0l C%de provides that one is entitled to an
ade9uate compensation only for such pecuniary loss suDered &y him as
he has duly proved.
Respondent is thus lia&le to pay petitioner actual damages in the form of
the loss of ! months1 ,orth of salary as provided in the contract.
+o,ever, the 8ourt ruled that he is not entitled to overtime pay.
Page 2; of 122
?hile the contract indicated a :%ed overtime pay, it is not a guarantee
that he ,ould receive said amount regardless of ,hether or not he
rendered overtime ,or$.
<ven if the amount is stipulated in the contract, it ,ill &e paid only if and
,hen the employee rendered overtime ,or$.
In the case of Stolt-Nielsen ,arine Services (Phils.), nc. v. National Labor
Relations Commission, it ,as discussed that@ The rendition of overtime
,or$ and the su&mission of su>cient proof that said ,or$ ,as actually
performed are conditions to &e satis:ed &efore a seaman could &e entitled
to overtime pay T)e /%-("!/( $"%+0'0%- g!"!-(ee' ()e "0g)( (%
%+e"(0#e $!& ,( ()e e-(0(le#e-( (% '/) ,e-e1( #'( 1"'( ,e
e'(!,l0')ed.
Realistically spea$ing, ! 'e!#!-, ,& ()e +e"& -!("e %. )0' 2%,, '(!&'
%- ,%!"d ! ')0$ %" +e''el ,e&%-d ()e "egl!" e0g)(-)%" *%"3
'/)edle.
4or the e#$l%&e" (% g0+e )0# %+e"(0#e $!& .%" ()e e?("! )%"'
,hen he might &e sleeping or attending to his personal chores or even
=ust lulling a,ay his time *%ld ,e e?("e#el& -.!0" !-d
-"e!'%-!,le.
DAF NO. The 8ourt did not sustain petitioner1s claim that respondent1s failure to
deploy petitioner is an act designed to prevent the latter from attaining the
status of a regular employee.
<ven if petitioner ,as a&le to depart the port of 5anila, he still cannot &e
considered a regular employee, regardless of his previous contracts of
employment ,ith respondent.
In ,illares v. National Labor Relations Commission, the 8ourt ruled that
'e!.!"e"' !"e /%-'0de"ed /%-("!/(!l e#$l%&ee' !-d /!--%( ,e
/%-'0de"ed !' "egl!" e#$l%&ee' -de" ()e L!,%" C%de.
Their employment is governed &y the contracts they sign every time they
are rehired and their employment is terminated ,hen the contract
e%pires.
T)e e?0ge-/0e' %. ()e0" *%"3 -e/e''0(!(e' ()!( ()e& ,e e#$l%&ed
%- ! /%-("!/(!l ,!'0'.
7ISPOSITION: Petition is GR06T<; I6 P0RT. 'a&or 0r&iter1s decision is
R<I6#T0T<; ,ith the 5-;I4I80TI-6 that respondent 84 #harp 8re, 5anagement,
Inc. is ordered to pay actual or compensatory damages.
H!-20- e(/. +' I,!MeJ ::: SCRA 667
FACTS:
Page 60 of 122
Petitioner +06JI6 is a foreign company duly registered ,ith the #ecurities and
<%change 8ommission to engage in the construction &usiness in the
Philippines.
4elicito I&aSeG, 0lig,as 8arolino, <lmer Gacula, <nri9ue ;agotdot, Ruel 8alda,
and four other co-,or$ers :led a complaint &efore the 6'R8 for illegal
dismissal ,ith prayer for reinstatement and full &ac$,ages against
petitioners.
o Respondents alleged that +06JI6 hired them for various positions@
tireman, crane operator, ,elder and ,arehouseman and their tas$s
,ere usual and necessary or desira&le in the usual &usiness or trade of
+06JI6.
o Respondents additionally averred that they ,ere employed as
mem&ers of a ,or$ pool from ,hich +06JI6 dra,s the ,or$ers to &e
dispatched to its various construction pro=ects.
-n 7 0pril 3..3, +an=in dismissed respondents from employment.
Respondents claimed that at the time of their dismissal, +06JI6 had several
construction pro=ects that ,ere still in progress, such as 5etro Rail Transit
(5RT) II and 5RT III, and continued to hire employees to :ll the positions
vacated &y the respondents.
Petitioners denied the respondentsF allegations.
They maintained that respondents ,ere hired as pro=ect employees for the
construction of the 'RT)5RT 'ine 3 Pac$age 3 and / Pro=ect.
+06JI6 and respondents purportedly e%ecuted contracts of employment, in
,hich it ,as clearly stipulated that the respondents ,ere to &e hired as
pro=ect employees for a period of only three months, &ut that the contracts
may &e rene,ed.
'a&or 0r&iter declared that respondents ,ere regular employees ,ho had
&een dismissed ,ithout =ust and valid causes and ,ithout due process.
o It ruled that +06JI6Fs allegation that respondents ,ere pro=ect
employees ,as negated &y its failure to present proof thereof.
o It also noted that a termination report should &e presented after the
completion of every pro=ect or a phase thereof and not =ust the
completion of one of these pro=ects.
o The 'a&or 0r&iter further construed the num&er of years that
respondents rendered their services for +06JI6 as an indication that
respondents ,ere regular, not pro=ect, employees.
The 6'R8 reversed the 'a&or 0r&iterFs ;ecision and pronounced that the
respondents ,ere pro=ect employees ,ho ,ere legally terminated from
employment.
o 6'R8 gave pro&ative value to the Termination Report su&mitted &y
+06JI6 to the ;-'<, receipts signed &y respondents for their
Page 61 of 122
completion &onus upon phase completion, and the Tuitclaims
e%ecuted &y the respondents in favor of +06JI6.
8ourt of 0ppeals reversed the 6'R8 ;ecision, it ad=udged the Termination
Report as inconclusive proof that respondents ,ere pro=ect employees.
o <mphasiGing that the employer had the &urden of proving the legality
of the dismissal, the appellate court ruled that respondents ,ere
regular employees and upheld the 'a&or 0r&iterFs :nding that they
,ere illegally dismissed.
ISSUE: ?hether respondents ,ere regular or pro=ect employees.
HEL7: Respondents are considered regular employees of +an=in.
0rticle 3". of the 'a&or 8ode distinguishes a Bpro=ect employeeB from a
Bregular employeeB thus@
0rticle 3".. Regular and 8asual <mployment--The provisions of
,ritten agreement to the contrary not,ithstanding and
regardless of the oral agreement of the parties, an employment
shall &e deemed to &e regular ,here the employee has &een
engaged to perform activities ,hich are usually necessary or
desira&le in the usual &usiness or trade of the employer, e.cept
/here the emplo(ment has been *.ed &or a speci*c pro0ect or
underta%ing the completion or termination o& /hich has been
determined at the time o& the engagement o& the emplo(ee or
,here the ,or$ or services to &e performed is seasonal in nature
and the employment is for the duration of the season.
0n employment shall &e deemed to &e casual if it is not covered &y the
preceding paragraph,
Provided, that, any employee ,ho has rendered at least one year service,
,hether such service is continuous or &ro$en, shall &e considered a regular
employee ,ith respect to the activity in ,hich he is employed and his
employment shall continue ,hile such activity e%ists.
The principal test for determining ,hether particular employees are properly
characteriGed as Bpro=ect employeesB as distinguished from Bregular
employeesB is ,hether or not the pro=ect employees ,ere assigned to carry
out a Bspeci:c pro=ect or underta$ing,B the duration and scope of ,hich ,ere
speci:ed at the time the employees ,ere engaged for that pro=ect.
#uch duration, as ,ell as the particular ,or$)service to &e performed, ,as
de:ned in an employment agreement and is made clear to the employees at
the time of hiring.
Page 62 of 122
In a num&er of cases, the 8ourt has held that the length of service or the re-
hiring of construction ,or$ers on a pro=ect-to-pro=ect &asis does not confer
upon them regular employment status, since their re-hiring is only a natural
conse9uence of the fact that e%perienced construction ,or$ers are preferred.
<mployees ,ho are hired for carrying out a separate =o&, distinct from the
other underta$ings of the company, the scope and duration o& /hich has
been determined and made %no/n to the emplo(ees at the time o& the
emplo(ment , are properly treated as pro=ect employees and their services
may &e la,fully terminated upon the completion of a pro=ect.
#hould the terms of their employment fail to comply ,ith this standard, they
cannot &e considered pro=ect employees.
Petitioners did not have that $ind of agreement ,ith respondents.
6either did they inform respondents of the nature of the lattersF ,or$ at the
time of hiring.
+ence, for failure of petitioners to su&stantiate their claim that respondents
,ere pro=ect employees, ,e are constrained to declare them as regular
employees.
The 8ourt mar$edly stressed the importance of the employeesF %no/ing
consent to &eing engaged as pro=ect employees ,hen it clari:ed that Bthere
is no 9uestion that stipulation on employment contract providing for a :%ed
period of employment such as Upro=ect-to-pro=ectF contract is valid $"%+0ded
()e $e"0%d *!' !g"eed $%- 3-%*0-gl& !-d +%l-(!"0l& ,& ()e
$!"(0e', *0()%( !-& .%"/e, d"e'' %" 0#$"%$e" $"e''"e ,e0-g
,"%g)( (% ,e!" $%- ()e e#$l%&ee !-d !,'e-( !-& %()e"
/0"/#'(!-/e' +0(0!(0-g )0' /%-'e-( ? ? ?.B
0&sent any other proof that the pro=ect employees ,ere informed of their
status as such, it ,ill &e presumed that they are regular employees in
accordance ,ith 8lause /./(a) of ;epartment -rder 6o. !, #eries of !!/,
,hich states that@
a) P"%2e/( e#$l%&ee' *)%'e !gg"eg!(e $e"0%d %.
/%-(0-%' e#$l%&#e-( 0- ! /%-'("/(0%- /%#$!-& 0' !(
le!'( %-e &e!" ')!ll ,e /%-'0de"ed "egl!" e#$l%&ee', 0-
()e !,'e-/e %. ! Hd!& /e"(!0-H !g"eed $%- ,& ()e
$!"(0e' for the termination of their relationship. Pro=ect
employees ,ho have &ecome regular shall &e entitled to
separation pay.
It also &ears to note that petitioners did not present other Termination
Reports apart from that :led on 0pril 3..3.
Page 66 of 122
The failure of an employer to :le a Termination Report ,ith the ;-'< every
time a pro=ect or a phase thereof is completed indicates that respondents
,ere not pro=ect employees.
<mployers cannot mislead their employees, ,hose ,or$ is necessary and
desira&le in the formerFs line of &usiness, &y treating them as though they are
part of a ,or$ pool from ,hich ,or$ers could &e continually dra,n and then
assigned to various pro=ects and thereafter denied regular status at any time
&y the e%pedient act of :ling a Termination Report.
This ,ould constitute a practice in ,hich an employee is un=ustly precluded
from ac9uiring security of tenure, contrary to pu&lic policy, morals, good
customs and pu&lic order.

;ue to petitionersF failure to adduce any evidence sho,ing that petitioners
,ere pro=ect employees ,ho had &een informed of the duration and scope of
their employment, they ,ere una&le to discharge the &urden of proof
re9uired to esta&lish that respondentsF dismissal ,as legal and valid.
4urthermore, it is a ,ell-settled doctrine that if dou&ts e%ist &et,een the
evidence presented &y the employer and that &y the employee, the scales of
=ustice must &e tilted in favor of the latter. 4or these reasons, respondents are
to &e considered regular employees of +06JI6.
SAN 8IGUEL CORP. V. NLRC
FACTS:

-cto&er !!., Rafael 5. 5ali$si :led a complaint #58 and P+I'##<8 to
recogniGe him as a regular employee. +e amended the complaint on 3
6ovem&er !!. to include the charge of illegal dismissal &ecause his services
,ere terminated.
The complainantFs employment record indicates that he rendered service
,ith 'ipercon #ervices from !" to !"3 as &udget head assigned to #58-
Eeer ;ivision, then from !"/ to !"7 ,ith #$illpo,er, Inc., as accounting
cler$ assigned to #58-5agnolia ;ivision, then from !"" to !"! also ,ith
#$illpo,er, Inc. as acting cler$ assigned to #58-5agnolia 4inance, and from
-cto&er !"! to / -cto&er !!. ,ith P+I'##<8 assigned to 5agnolia
4inance as accounting cler$.
The complainant considered himself as an employee of #58-5agnolia.
L0$e"/%- Se"+0/e', S30ll$%*e", I-/. !-d PHILSSEC !"e l!,%"-%-l&
/%-("!/(%"' !-d !-& %-e %. *)0/) )!d -e+e" ,ee- )0' e#$l%&e".
P+I'##<8 disclaimed lia&ility. it has contracted ,ith #58-5agnolia to
computeriGe the latterFs manual accounting reporting systems of its
provincial sales.
Page 69 of 122
8omplainant 5ali$si ,as one of those employed &y P+I'##<8 ,hose principal
function ,as the manual control of data needed during the computeriGation.
'i$e all assigned to the pro=ect, the complainantFs ,or$ ,as controlled &y
P+I'##<8 supervisors, his salary paid &y the agency and he reported directly
to P+I'##<8.
The 'a&or 0r&iter declared 5ali$si a regular employee of P+I'##<8 and
a&solved #58 from lia&ility.
The 6'R8 reversed that of the 'a&or 0r&iter &y declaring 5ali$si a regular
employee of #58.The 80 a>rmed in toto that of the 6'R8.
ISSUE: ?-6 respondent 5ali$si is a regular employee of #58.
HEL7: Ye'.
The e%istence of an employer-employee relationship is factual and ,e give
due deference to the factual :ndings of &oth the 6'R8 and the 80 that an
employer-employee relationship e%isted &et,een #58 and 5ali$si.
I-deed, )!+0-g 'e"+ed S8C .%" !- !gg"eg!(e $e"0%d %. #%"e ()!-
()"ee D6F &e!"' ()"%g) e#$l%&#e-( /%-("!/(' *0() ()e'e (*% l!,%"
/%-("!/(%"', 8!l03'0 ')%ld ,e /%-'0de"ed !' S8CG' "egl!"
e#$l%&ee.
T)e )!"d .!/( 0' ()!( )e *!' )0"ed !-d "e-)0"ed ,& S8C (% $e".%"#
!d#0-0'("!(0+e !-d /le"0/!l *%"3 ()!( *!' -e/e''!"& (% S8CG'
,'0-e'' %- ! d!0l& ,!'0'.
5ali$siFs ,or$ under the P+I'##<8 pro=ect ,as mainly administrative in
nature and necessary to the development of #58Fs &usiness.
#imply put, the data gathered &y #58 on a daily &asis through 5ali$siFs ,or$
,ould &e su&mitted for analysis and evaluation, there&y allo,ing #58 to
ma$e the necessary &usiness decisions that ,ould ena&le it to mar$et its
products &etter, or monitor its sales and collection ,ith e>ciency.
?ithout the data gatherer or encoder, no analysis could occur.
T)e !/( %. )0"0-g !-d "e-)0"0-g *%"3e"' %+e" ! $e"0%d %. (0#e *0()%(
/%-'0de"0-g ()e# !' "egl!" e#$l%&ee' e+0de-/e' ,!d .!0() %- ()e
$!"( %. ()e e#$l%&e".
?here, from the circumstances, 0( 0' !$$!"e-( ()!( $e"0%d' )!+e ,ee-
0#$%'ed (% $"e/lde ()e !/@0'0(0%- %. (e-"0!l 'e/"0(& ,& ()e
e#$l%&ee, ()e $%l0/&, !g"ee#e-( %" $"!/(0/e ')%ld ,e '("/3 d%*-
!' /%-("!"& (% $,l0/ $%l0/&, #%"!l', g%%d /'(%#' %" $,l0/ %"de".
In point of la,, any person ,ho ,illfully causes loss or in=ury to another in a
manner that is contrary to morals, good customs or pu&lic policy shall &e
lia&le for the damage.
Page 6: of 122

RAYCOR AIRCON SYSTE8 V. SAN PE7RO :26 SCRA 92; D2007F
FACTS:
Raycor 0ircontrol systems hired #an Pedro as tinsmith operator su&=ect to the
condition that his employment shall commence on 0ugust !!7 until the
completion of the Cni,ide 'as Pinas pro=ect.
?hen the :rst pro=ect ,as completed, petitioner again e%tended respondent1s
employment until ;ecem&er !!* (second pro=ect).
#u&se9uently, petitioner rehired respondent as ducting man and assigned
him to a third pro=ect until 0pril !!(. Thereafter, respondent1s employment
,as e%tended several times ,ithout any issuance of a ne, contract every
time his employment ,as e%tended.
In 6ovem&er !!(, Raycor informed #an Pedro that his contract ,as set to
e%pire on 6ovem&er , !!( and ,as to ta$e eDect on 6ovem&er /, !!(.
?hen he reported for ,or$ on 6ovem&er /, he ,as informed that he had
&een terminated. #an Pedro, then :led, a complaint for illegal dismissal.
'0 held in favor of respondent citing that the complainant ,as illegally
dismissed ,ithout =ust cause and ,ithout due process of la,.
6'R8 a>rmed the same.
o 6'R8 found #an Pedro to &e a regular employee of petitioner &ecause
of the e%istence of a reasona&le connection &et,een the formerFs
regular activities in relation to the latterFs &usiness. They &ased this
:nding on the uncontroverted fact that petitioner repeatedly rehired
respondent in :ve successive pro=ects for 3/ continuous months
ISSUE: ?-6 #an Pedro ,as a regular employee of Raycor.
HEL7: Les.
0s held in an earlier case decided &y the #8, petitioner utterly failed to
adduce additional evidence that@
) each time it hired and rehired respondent, it intended for him
to accomplish speci:c tas$s in the particular pro=ect to ,hich he
,as assignedA
3) it intended for respondent to carry out these speci:c tas$s in
accordance ,ith the pro=ect plan it had dra,n out and ,ithin the
limited time it had to complete the sameA and
/) it made such restrictions on each engagement $no,n to
respondent, and the same ,ere freely accepted &y him.
Page 66 of 122
PetitionerFs failure to present such evidence is ine%cusa&le, given its access
to such documents as pro=ect contracts, payment remittances, employment
records and pay slips.
0s such, the respondent &ecame a regular employee after 3/ months of
rehiring.
PAUL V. SANTIAGO vs CF SHARP CREB 8ANAGE8ENT, INC .
ISSUE: ?hether or not the petitioner1s continuous employment on &oard the same
vessel and su&se9uent e%tension of the contract to ! months merits his claim
that he should &e considered a regular employee.
HEL7: NO.
The 8ourt did not sustain petitioner1s claim that respondent1s failure to
deploy petitioner is an act designed to prevent the latter from attaining the
status of a regular employee.
4or 7 years, Petitioner ,or$ed on &oard the same vessel o,ned &y the same
principal and manned &y the same local agent.
The e%ecution of the ne, contract for another term of ! months constitutes
an e%tension. +o,ever, even if petitioner ,as a&le to depart the port of
5anila, he still cannot &e considered a regular employee, regardless of his
previous contracts of employment ,ith respondent.
In ,illares v. National Labor Relations Commission, the 8ourt ruled that
'e!.!"e"' !"e /%-'0de"ed /%-("!/(!l e#$l%&ee' !-d /!--%( ,e
/%-'0de"ed !' "egl!" e#$l%&ee' -de" ()e L!,%" C%de.
Their e#$l%&#e-( 0' g%+e"-ed ,& ()e /%-("!/(' ()e& '0g- e+e"& (0#e
()e& !"e "e)0"ed !-d ()e0" e#$l%&#e-( 0' (e"#0-!(ed *)e- ()e
/%-("!/( e?$0"e'. T)e e?0ge-/0e' %. ()e0" *%"3 -e/e''0(!(e' ()!( ()e&
,e e#$l%&ed %- ! /%-("!/(!l ,!'0'.
Ae(! Ele/("0/ C%"$. +' NLRC 1E2 SCRA 6E9
FACTS:
The petitioner hired the private respondent as cler$ typist for one month,
,hich appointment ,as e%tended :ve times in :ve months (one month
)contract).
+er appointments ,ere covered &y corresponding ,ritten contracts. -n June
33, !"(, her services ,ere terminated ,ithout notice or investigation.
Page 67 of 122
-n the same day, she ,ent to the la&or ar&iter on a complaint for illegal
dismissal. Eoth the la&or ar&iter and the respondent 6'R8 ruled for her.
Petitioner claims the private respondent1s appointment ,as temporary and
hence she may &e terminated at ,ill.
ISSUE: ?hether or not the fact that private respondent1s employment has &een a
contract-to-contract &asis alters the character of her employment as a regular
employee.
HEL7: 6o.
The fact that her employment has &een a contract-to-contract &asis cannot
alter the character of employment, &ecause contracts cannot override the
mandate of la,.
+ence, &y operation of la,, she has &ecome a regular employee.
That she had &een hired merely on a Mtemporary &asisN Mfor purposes of
meeting the seasonal or pea$ demands of the &usiness,N and as such, her
services may la,fully &e terminated Mafter the accomplishment of VherW tas$N
is untena&le.
The private respondent ,as to all intents and purposes, and at the very least,
a pro&ationary employee, ,ho &ecame regular upon the e%piration of si%
months.
Cnder 0rticle 3" of the 'a&or 8ode, a pro&ationary employee is Mconsidered
a regular employeeN if he has &een Mallo,ed to ,or$ after the pro&ationary
period.N
The private employee ,as employed from ;ecem&er 7, !"* until June 33,
!"( ,hen she ,as ordered laid-oD. +er tenure having e%ceeded si% months,
she attained regular employment.
The petitioner cannot rightfully say that since the private respondent1s
employment hinged from contract to contract, it ,as ergo, MtemporaryN,
depending on the term of each agreement.
Cnder the 'a&or 8ode, an employment may only &e said to &e MtemporaryN
M,here it has &een :%ed for a speci:c underta$ing the completion of or
termination of ,hich has &een determined at the time of the engagement of
the employee or ,here the ,or$ or services to &e performed is seasonal in
nature and the employment is for the duration of the season.N
Tuite to the contrary, the private respondent1s ,or$, that of Mtypist-cler$N is
far from &eing Mspeci:cN or MseasonalN, &ut rather, one, according to the
8ode, M,here the employee has &een engaged to perform activities ,hich are
usually necessary or desira&le in the usual &usiness.N
Page 6E of 122
0nd under the 8ode, ,here one performs such activities, he is a regular
employee, MVtWhe provisions of ,ritten agreement to the contrary
not,ithstanding.
U-0+e"'!l R%,0-! +. C!(!$!-g
FACTS:
Respondents ,ere hired &y the petitioner company to ,or$ at its duc$ farm.
The respondents ,ere hired under an employment contract ,hich provided
for a :ve-month period.
0fter the e%piration of the said employment contracts, the petitioner
company ,ould rene, them and re-employ the respondents.
This practice continued for more than / years until sometime in !!*, ,hen
the petitioners informed the respondents that they ,ere no longer rene,ing
their employment contracts.
Respondents :led complaints for illegal dismissal.
The '0 rendered a decision declaring that complainants illegally dismissed
from their employment and in ,hich the 6'R8 and the 80 a>rmed.
-n appeal, petitioners su&mit that the respondents are not regular
employees.
o That they ,ere free to terminate the services of the respondents at the
e%piration of their individual contracts.
o That they merely implemented the terms of the contracts.

ISSUE: ?-6 the respondents are regular employees and their termination for
causes outside the 'a&or 8ode is patently illegal.
HEL7: Ye'.
0n employee shall &e deemed to &e of regular status ,hen he has &een
performing a =o& for at least year even if the performance is not continuous
and merely intermittent.
In any case, ,e :nd that the 80, the 6'R8 and the 'a&or 0r&iter correctly
categoriGed the respondents as regular employees of the petitioner company.
T)e $"0#!"& '(!-d!"d, ()e"e.%"e, %. de(e"#0-0-g "egl!" e#$l%&#e-(
0' ()e "e!'%-!,le /%--e/(0%- ,e(*ee- ()e $!"(0/l!" !/(0+0(&
$e".%"#ed ,& ()e e#$l%&ee 0- "el!(0%- (% ()e '!l ("!de %" ,'0-e''
%. ()e e#$l%&e".
T)e (e'( 0' *)e()e" ()e .%"#e" 0' '!ll& -e/e''!"& %" de'0"!,le 0-
()e '!l ,'0-e'' %" ("!de %. ()e e#$l%&e".
Page 6; of 122
T)e /%--e/(0%- /!- ,e de(e"#0-ed ,& /%-'0de"0-g ()e -!("e %. *%"3
$e".%"#ed !-d 0(' "el!(0%- (% ()e '/)e#e %. ()e $!"(0/l!" ,'0-e''
%" ("!de 0- 0(' e-(0"e(&.
Al'%, 0. ()e e#$l%&ee )!' ,ee- $e".%"#0-g ()e 2%, .%" !( le!'( ! &e!",
e+e- 0. ()e $e".%"#!-/e 0' -%( /%-(0-%' !-d #e"el& 0-(e"#0((e-(,
()e l!* dee#' "e$e!(ed !-d /%-(0-0-g -eed .%" 0(' $e".%"#!-/e !'
'5/0e-( e+0de-/e %. ()e -e/e''0(& 0. -%( 0-d0'$e-'!,0l0(& %. ()!(
!/(0+0(& (% ()e ,'0-e''.
He-/e, ()e e#$l%&#e-( 0' /%-'0de"ed "egl!", ,( %-l& *0() "e'$e/(
(% '/) !/(0+0(& !-d *)0le '/) !/(0+0(& e?0'('.
Thus, ,e 9uote ,ith approval the follo,ing e%cerpt from the decision of the
80@

I( 0' %,+0%' ()!( ()e '!0d 1+e-#%-() /%-("!/( %.
e#$l%&#e-( *!' 'ed ,& $e(0(0%-e"' !' ! /%-+e-0e-(
',(e".ge (% $"e+e-( $"0+!(e "e'$%-de-(' ."%#
,e/%#0-g "egl!" e#$l%&ee'. S/) /%-("!/(!l
!""!-ge#e-( ')%ld ,e '("/3 d%*- %" d0'"eg!"ded !'
/%-("!"& (% $,l0/ $%l0/& %" #%"!l'. T% $)%ld ()e '!#e
*%ld, 0- eLe/(, $e"#0( $e(0(0%-e"' (% !+%0d )0"0-g
$e"#!-e-( %" "egl!" e#$l%&ee' ,& '0#$l& )0"0-g ()e#
%- ! (e#$%"!"& %" /!'!l ,!'0', ()e"e,& +0%l!(0-g ()e
e#$l%&ee'4 'e/"0(& %. (e-"e 0- ()e0" 2%,'.
Petitioners1 act of repeatedly and continuously hiring private respondents in a
span of /-7 years to do the same $ind of ,or$ negates their contention that
private respondents ,ere hired for a speci:c pro=ect or underta$ing only.
8ARAGUINOT V. NLRC 2E9 SCRA :6; D1;;EF
FACTS:
Petitioner 0le=andro 5araguinot, Jr. maintains that he ,as employed &y
private respondents as part of the :lming cre,.
0&out 2 months later, he ,as designated 0sst. <lectrician. +e ,as then
promoted to the ran$ of <lectrician. Petitioner Paulino <nero claims that
private respondents employed him as a mem&er of the shooting cre,.
Petitioners1 tas$s consisted of loading, unloading and arranging movie
e9uipment in the shooting area as instructed &y the cameraman, returning
the e9uipment to Iiva 4ilms1 ,arehouse, assisting in the M:%ingN of the
lighting system, and performing other tas$s that the cameraman and)or
director may assign.
Page 90 of 122
Petitioners re9uested that private respondents ad=ust their salary in
accordance ,ith the minimum ,age la,. Petitioners ,ere informed that 5r.
Iic del Rosario ,ould agree to increase their salary only if they signed a &lan$
employment contract.
0s petitioners refused to sign, private respondents forced <nero to go on
leave then refused to ta$e him &ac$ ,hen he reported for ,or$.
5ean,hile, 5araguinot ,as dropped from the company payroll &ut ,as
returned and again as$ed to sign a &lan$ employment contract, and ,hen he
still refused, private respondents terminated his services.
Petitioners thus sued for illegal dismissal.
Private respondents claim that Iiva 4ilms is primarily engaged in the
distri&ution and e%hi&ition of movies, &ut not in the &usiness of ma$ing
moviesA in the same vein, private respondent Iic del Rosario is merely an
e%ecutive producerA that they contract persons called MproducersN to
MproduceN or ma$e movies for private respondentsA and that petitioners are
pro=ect employees of the associate producers ,ho, in turn, act as
independent contractors.
0s such, there is no employer-employee relationship &et,een petitioners and
private respondentsA that it ,as the associate producer of a :lm ,ho hired
5araguinot and he ,as released upon payment of his last salary, as his
services ,ere no longer neededA that <nero ,as hired for a movie, ,ent on
vacation and &y the time he reported &ac$ to ,or$ the move had &een
completed.
'0 held in favor of 5araguinot and found the petitioners to have &een
illegally dismissed &y private respondents.
6'R8 reversed the decision, citing that petitioners ,ere pro=ect employees
&ased on the facts presented and the nature of their ,or$
ISSUE: ?-6 5araguinot and <nero ,ere regular employees of private respondents.
HEL7: Ye'.
0 pro=ect employee or a mem&er of a ,or$ pool may ac9uire the status of a
regular employee ,hen the follo,ing concur@
1. There is a continuous rehiring of pro=ect employees even after cessation of a
pro=ectA

andA
2. The tas$s performed &y the alleged Bpro=ect employeeB are vital, necessary
and indispensa&le to the usual &usiness or trade of the employer.
+o,ever, the length of time during ,hich the employee ,as continuously re-
hired is not controlling, &ut merely serves as a &adge of regular employment.

Page 91 of 122
In the instant case, the evidence on record sho,s that petitioner <nero ,as
employed for a total of t,o (3) years and engaged in at least eighteen (")
pro=ects, ,hile petitioner 5araguinot ,as employed for some three (/) years
and ,or$ed on at least t,enty-three (3/) pro=ects.
5oreover, as petitionersF tas$s involved, among other chores, the loading,
unloading and arranging of movie e9uipment in the shooting area as
instructed &y the cameramen, returning the e9uipment to the Iiva 4ilmsF
,arehouse, and assisting in the B:%ingB of the lighting system, it may not &e
gainsaid that these tas$s ,ere vital, necessar( and indispensable to the
usual business or trade o& the emplo(er.
0s regards the underscored phrase, it has &een held that this is ascertained
&y considering the nature of the ,or$ performed and its relation to the
scheme of the particular &usiness or trade in its entirety.
It may not &e ignored, ho,ever, that private respondents e%pressly admitted
that petitioners ,ere part of a ,or$ poolA and, ,hile petitioners ,ere initially
hired possi&ly as pro=ect employees, they had attained the status of regular
employees in vie, of III01s conduct.
The import of this decision is not to impose a positive and s,eeping
o&ligation upon the employer to re-hire pro=ect employees.
?hat this decision merely accomplishes is a =udicial recognition of the
employment status of a pro=ect or ,or$ pool employee in accordance ,ith
,hat is &ait accompli, i.e., the continuous re-hiring &y the employer of pro=ect
or ,or$ pool employees ,ho perform tas$s necessary or desira&le to the
employer1s usual &usiness or trade.
'et it not &e said that this decision McoddlesN la&or, for as 'ao v. 6'R8 has
ruled, pro=ect or ,or$ pool employees ,ho have gained the status of regular
employees are su&=ect to the Mno ,or$-no payN principle.
AAESCO CONSTRUCTION AN7 7EVELOP8ENT CORP. vs RA8IREI
FACTS:
0&esco ,as engaged in a construction &usiness ,here respondents ,ere
hired on diDerent dates from !(* to !!3 either as la&orers, road roller
operators, painters or drivers.
In !!(, respondents :led t,o separate complaints for illegal dismissal
against the company and -scar EanGon (G5) &efore the 'a&or 0r&iter ('0).
Page 92 of 122
The '0 later on ordered the consolidation of the t,o complaints.
#u&se9uently, petitioners denied lia&ility to respondents and countered that
respondents ,ere Bpro=ect employeesB since their services ,ere necessary
only ,hen the company had pro=ects to &e completed.
Petitioners argued that, &eing pro=ect employees, respondentsF employment
,as coterminous ,ith the pro=ect to ,hich they ,ere assigned.
They ,ere not regular employees ,ho en=oyed security of tenure and
entitlement to separation pay upon termination from ,or$.
-n )()!!", the '0 declared respondents as regular employees &ecause
they &elonged to a B,or$ poolB from ,hich the company dre, ,or$ers for
assignment to diDerent pro=ects.
o Respondents ,ere hired and re-hired over a period of " years.
-n appeal, &oth 6'R8 and the 80 a>rmed the '0Fs decision.
5otion for reconsideration ,as :led &y petitioners &ut it ,as dismissed &y the
80 for lac$ of merit.
+ence, this petition.
ISSUE: ?hether respondents ,ere pro=ect employees or regular employees.
HEL7: YES.
The 8ourt ruled that respondents ,ere regular employees.
+o,ever, contrary to the reasons &ehind the '01s ruling (,hich &oth the 6'R8
and the 80 a>rmed), employees (li$e respondents) ,ho ,or$ under diDerent
pro=ect employment contracts for several years do not automatically &ecome
regular employeesA they can remain as pro=ect employees regardless of the
num&er of years they ,or$.
Le-g() %. 'e"+0/e 0' -%( ! /%-("%ll0-g .!/(%" 0- de(e"#0-0-g ()e
-!("e %. %-eG' e#$l%&#e-(.
5oreover, employees ,ho are mem&ers of a B,or$ poolB from ,hich a
company dra,s ,or$ers for deployment to its diDerent pro=ects do not
&ecome regular employees &y reason of that fact alone.
The 8ourt has enunciated in some cases that mem&ers of a B,or$ poolB can
either &e pro=ect employees or regular employees.
The $"0-/0$!l (e'( .%" de(e"#0-0-g ,hether employees are H$"%2e/(
e#$l%&ee'H %" H"egl!" e#$l%&ee'H is *)e()e" ()e& !"e !''0g-ed (%
/!""& %( ! '$e/01/ $"%2e/( %" -de"(!30-g, ()e d"!(0%- !-d '/%$e %.
*)0/) !"e '$e/01ed !( ()e (0#e ()e& !"e e-g!ged .%" ()!( $"%2e/(.
#uch d"!(0%-, as ,ell as the $!"(0/l!" *%"3C'e"+0/e (% ,e $e".%"#ed,
0' de1-ed 0- !- e#$l%&#e-( !g"ee#e-( !-d 0' #!de /le!" (% ()e
e#$l%&ee' !( ()e (0#e %. )0"0-g.
Page 96 of 122
In the case at &ar, petitioners did not have that $ind of agreement, neither
did they inform respondents of the nature of the latterFs ,or$ at the time of
hiring.
+ence, .%" .!0l"e %. $e(0(0%-e"' (% ','(!-(0!(e ()e0" /l!0# ()!(
"e'$%-de-(' *e"e $"%2e/( e#$l%&ee', *e !"e /%-'("!0-ed (% de/l!"e
()e# !' "egl!" e#$l%&ee'.
7ISPOSITION: The petition is ;<6I<;.
XIssue of illegal dismissal@ Petitioners failed to adhere to the Bt,o-notice ruleB ,hich
re9uires that ,or$ers to &e dismissed must &e furnished ,ith@ () a notice informing
them of the particular acts for ,hich they are &eing dismissed and (3) a notice
advising them of the decision to terminate the employment. Respondents ,ere
never given such notices.
7el! C"J +' 8!e"'3 e(/. ::1 SCRA 2E:
FACTS:
Respondent <lite #hipping 0.#. hired petitioner ;ante ;. de la 8ruG as third
engineer for the vessel 5)# 0r$tis 5orning through its local agency in the
Philippines, co-respondent 5aers$ 4ilipinas 8re,ing Inc.
The contract of employment ,as for a period of nine months, starting 0pril
!, !!!. Petitioner ,as deployed to Je&el 0li, Cnited 0ra& <mirates and
&oarded 5)# 0r$tis 5orning on 5ay 2, !!!.
In a log&oo$ entry dated June ", !!!, chief engineer 6ormann Per 6ielsen
e%pressed his dissatisfaction over petitionerFs performance@
/
rd
<ng. ;ante ;. de la 8ruG has, since he signed on, not &een
a&le to live up to the companyFs #5# =o& descri&tion for /
rd
<ngineer. Today he has &een informed that if he does not
improve his Jo&)?or$ing performance ,ithin a short time he ,ill
&e signed oD according to 8E0 0rticle .
0rticle (() of the collective &argaining agreement (8E0) &et,een
respondent <lite #hipping 0.#. and its employees reads@
(() The :rst si%ty (*.) days of service is to &e considered a
pro&ationary period ,hich entitles a shipo,ner or his
Page 99 of 122
representative, i.e.V,W the master of the vesselV,W to terminate the
contract &y giving fourteen (2) days of ,ritten notice.
-n June 3(, !!!, petitioner ,as informed of his discharge through a notice.
Petitioner ,as then made to disem&ar$ at the port of +ouston, Te%as and ,as
repatriated to 5anila on July (, !!!.
Petitioner thereafter :led a complaint for illegal dismissal ,ith claims for the
monetary e9uivalent of the une%pired portion of his contract, damages and
attorneyFs fees in the 6'R8 on #eptem&er 3, !!!.
'0 ruled that petitioner ,as dismissed ,ithout =ust cause and due process as
the log&oo$ entry (,hich respondents claimed to &e the :rst notice to
petitioner) ,as vague.
o It failed to e%pound on or state the details of petitionerFs shortcomings
or infractions.
The 6'R8 upheld the '0Fs :nding of illegal dismissal.
The 80 deemed the log&oo$ entries to &e su>cient compliance ,ith the :rst
notice re9uirement of the la,. It ,as a ,ritten appraisal of petitionerFs poor
=o& performance coupled ,ith a ,arning that should he fail to improve his
performance, he ,ould &e signed oD in accordance ,ith the provisions of the
8E0.
It reasoned that a pro&ationary employee may &e dismissed at anytime
during the pro&ationary period for failure to live up to the e%pectations of the
employer.
ISSUE: ?hether or not petitioner ,as illegally dismissed &y respondents.
HEL7: The petitioner ,as illegally dismissed &y respondents.

0n employer has the &urden of proving that an employeeFs dismissal ,as for
a =ust cause. 4ailure to sho, this necessarily means that the dismissal ,as
un=usti:ed and therefore illegal.

4urthermore, not only must the dismissal &e for a cause provided &y la,, it
should also comply ,ith the rudimentary re9uirements of due process, that
is, the opportunity to &e heard and to defend oneself.

These re9uirements are of e9ual application to cases of 4ilipino seamen

recruited to ,or$ on &oard foreign vessels.

Procedural due process re9uires that a seaman must &e given a ,ritten
notice of the charges against him and aDorded a formal investigation ,here
he can defend himself personally or through a representative &efore he can
&e dismissed and disem&ar$ed from the vessel.

The employer is &ound to furnish him t,o notices@ () the ,ritten charge and
(3) the ,ritten notice of dismissal (in case that is the penalty imposed).
Page 9: of 122

This is in accordance ,ith the P-<0 Revised #tandard <mployment Terms and
8onditions Governing the <mployment of 4ilipino #eafarers on Eoard -cean-
Going Iessels (P-<0 Revised #tandard <mployment Terms and 8onditions).

8ontrary to respondentsF claim, the log&oo$ entries did not su&stantially

comply ,ith the :rst notice, or the ,ritten notice of charge(s).

It did not state the particular acts or omissions for ,hich petitioner ,as
charged.

#eafarers are not covered &y the term regular emplo(ment , as de:ned under
0rticle 3". of the 'a&or 8ode. Instead, they are considered contractual
employees ,hose rights and o&ligations are governed primarily &y the P-<0
#tandard <mployment 8ontract for 4ilipino #eamen (P-<0 #tandard
<mployment 8ontract), the Rules and Regulations Governing -verseas
<mployment, and, more importantly, &y Repu&lic 0ct 6o. ".23, other,ise
$no,n as The 5igrant ?or$ers and -verseas 4ilipinos 0ct of !!7. <ven the
P-<0 #tandard <mployment 8ontract itself mandates that in no case shall a
contract of employment concerning seamen e%ceed 3 months.

It is an accepted maritime industry practice that the employment of seafarers

is for a :%ed period only.

The 8ourt ac$no,ledges this to &e for the mutual interest of &oth the
seafarer and the employer.

#eafarers cannot stay for a long and inde:nite period of time at sea as limited
access to shore activity during their employment has &een sho,n to
adversely aDect them.

4urthermore, the diversity in nationality, culture and language among the

cre, necessitates the limitation of the period of employment.

?hile ,e recogniGe that petitioner ,as a registered mem&er of the

0ssociated 5arine ->cers and #eamenFs Cnion of the Philippines ,hich had a
8E0 ,ith respondent <lite #hipping 0.#. providing for a pro&ationary period of
employment, the 8E0 cannot override the provisions of the P-<0 #tandard
<mployment 8ontract.

The la, is read into, and forms part of, contracts. 0nd provisions in a contract
are valid only if they are not contrary to la,, morals, good customs, pu&lic
order or pu&lic policy.
PNOC-ENERGY 7EVELOP8ENT CORP. vs. NLRC
FACTS:
Petitioner P6-8-<nergy ;evelopment 8orporation underta$es several
pro=ects.
<ach pro=ect undergoes the stages of e%ploration, development, and
utiliGation or production.
Page 96 of 122
Petitioner1s Geothermal Production 4ield in 6egros -riental is divided into t,o
phases@ Palinpinon I (P0' I) and Palinpinon II (P0' II). To augment its
manpo,er re9uirement in the development of P0' II, petitioner hired the
respondents.
The termination)e%piration of their employment ,ere speci:ed in their initial
employment contracts, ,hich, ho,ever, ,ere rene,ed and e%tended on their
respective e%piry dates.
In !!", petitioner su&mitted reports to the ;-'< stating that si% of its
employees ,ere &eing terminated.
Petitioner furnished the respondents notices of termination, stating that they
,ere &eing terminated due to the su&stantial completion of the civil ,or$s
phase of P0' II.
Respondents, :led &efore 6'R8 a complaint for illegal dismissal against
petitioner.
The 'a&or 0r&iter ruled that the employer-employee relationship &et,een the
parties ,as severed upon the e%piration of the respective contracts of
respondents and the completion of the pro=ects concerned.
The 6'R8 reversed the decision of the 'a&or 0r&iter. The 6'R8 ratiocinated
that respondents ,ere regular non-pro=ect employees.
The 80 044IR5<; the decision of the 6'R8.
ISSUE: ?hether respondents ,ere pro=ect employees or regular employees.
HEL7: Re'$%-de-(' !"e "egl!" e#$l%&ee'.
0rticle 3".. R<GC'0R 06; 80#C0' <5P'-L<<#. O The provisions of ,ritten
agreement to the contrary not,ithstanding and regardless of the oral agreement of
the parties, an employment shall &e deemed to &e regular ,here the employee has
&een engaged to perform activities ,hich are usually necessary or desira&le in the
usual &usiness or trade of the employer, e%cept ,here the employment has &een
:%ed for a speci:c pro=ect or underta$ing the completion or termination of ,hich
has &een determined at the time of the engagement of the employee or ,here the
,or$ or services to &e performed is seasonal in nature and the employment is for
the duration of the season.
0s ,e held in Grandspan ;evelopment 8orporation v. Eernardo@
T)e $"0-/0$!l (e'( .%" de(e"#0-0-g *)e()e" $!"(0/l!"
e#$l%&ee' !"e $"%$e"l& /)!"!/(e"0Jed !' H$"%2e/(
e#$l%&ee',H !' d0'(0-g0')ed ."%# H"egl!" e#$l%&ee',H
0' *)e()e" %" -%( ()e $"%2e/( e#$l%&ee' *e"e !''0g-ed (%
/!""& %( ! H'$e/01/ $"%2e/( %" -de"(!30-g,H ()e d"!(0%-
Page 97 of 122
!-d '/%$e %. *)0/) *e"e '$e/01ed !( ()e (0#e ()e
e#$l%&ee' *e"e e-g!ged .%" ()!( $"%2e/(.
A' de1-ed, $"%2e/( e#$l%&ee' !"e ()%'e *%"3e"' )0"ed
D1F .%" ! '$e/01/ $"%2e/( %" -de"(!30-g, !-d D2F ()e
/%#$le(0%- %" (e"#0-!(0%- %. '/) $"%2e/( %" -de"(!30-g
)!' ,ee- de(e"#0-ed !( ()e (0#e %. ()e e-g!ge#e-( %.
()e e#$l%&ee.
+o,ever, petitioner failed to su&stantiate its claim that respondents ,ere
hired merely as pro=ect employees.
0 perusal of the records of the case reveals that the supposed speci:c pro=ect
or underta$ing of petitioner ,as not satisfactorily identi:ed in the contracts
of respondents.
The alleged pro=ects stated in the employment contracts ,ere either too
vague or imprecise to &e considered as the Bspeci:c underta$ingB
contemplated &y la,.
ALU-TUCP V. NLRC 269 SCRA 67E D1;;9F
FACTS:
Petitioners claim that they have &een employed &y respondent 6ational #teel
8orporation (6#8) in connection ,ith its 4ive Lear <%pansion Program (40L<P I
and II) for varying lengths of time ,hen they ,ere separated from 6#81s
service.
Petitioners :led separate complaints for unfair la&or practice, regulariGation
and monetary &ene:ts.
'0 declared petitioners Mregular pro0ect emplo(ees ,ho shall continue their
employment as such for as long as such (pro=ect) activity e%ists,N &ut entitled
to the salary of a regular emplo(ee pursuant to the provisions in the 8E0. It
also ordered payment of salary diDerentials.
Eoth parties appealed.
Petitioners argued they ,ere regular, not pro=ect employees. 6#8 claimed
petitioners are pro=ect employees as they ,ere employed to underta$e a
speci:c pro=ect.
6'R8 modi:ed '0 decision, a>rming the holding that they ,ere pro0ect
emplo(ees since they ,ere hired to perform ,or$ in a speci:c underta$ing.
o It, ho,ever, set aside the a,ard to petitioners of the same &ene:ts
en=oyed &y regular employees for lac$ of legal and factual &asis.
Petitioners appealed to the #8, arguing that they are MregularN employees of
6#8 &ecause@ (i) their =o&s are Mnecessary, desira&le and ,or$-related to
Page 9E of 122
private respondent1s main &usiness, steel-ma$ingNA and (ii) they have
rendered service for si% (*) or more years to 6#8.
ISSUE: ?-6 petitioners are properly characteriGed as Mpro=ect employeesN rather
than Mregular employeesN of 6#8.
SC4' NOTE:
The issue relates to an important conse9uence@ the services of pro=ect
employees are co-terminus ,ith the pro=ect and may &e terminated upon the
end or completion of the pro=ect for ,hich they ,ere hired.
Regular employees, in contrast, are legally entitled to remain in the service of
their employer until that service is terminated &y one or another of the
recogniGed modes of termination of service under the 'a&or 8ode.
HEL7: Les, petitioners are pro=ect employees.
0s evident in 0rt 3". 'a&or 8ode, the principal test for determining ,hether
particular employees are properly characteriGed as Mpro=ect employeesN as
distinguished from Mregular employeesN is ,hether or not the Mpro=ect
employeesN ,ere assigned to carry out a Mspeci:c pro=ect or underta$ing, the
duration (and scope) of ,hich ,ere speci:ed at the time the employees ,ere
engaged for that pro=ect.
In &usiness and industry, Mpro=ectN could refer to one or the other of at least
t,o distinguisha&le types of activities.
4irstly, a pro=ect could refer to a particular =o& or underta$ing that is ,ithin
the regular or usual &usiness of the employer company, &ut ,hich is distinct
and separate, and identi:a&le as such, from the other underta$ings of the
company.
#uch =o& or underta$ing &egins and ends at determined or determina&le
times.
#econdly, the term Mpro=ectN could also refer to a particular =o& or
underta$ing that is not ,ithin the regular &usiness of the corporation.
#uch =o& or underta$ing must also &e identi:a&ly separate and distinct from
the ordinary or regular &usiness operations of the employer.
The =o& or underta$ing also &egins and ends at determined ordetermina&le
times.
?hichever type of pro=ect employment is found in a particular case, a
common &asic re9uisite is that the designation of named employees as
Mpro=ect employeesN and their assignment to a speci:c pro=ect, are eDected
and implemented in good faith, and not merely as a means of evading
other,ise applica&le re9uirements of la&or la,s.
Page 9; of 122
The particular component pro=ects em&raced in the 40L<P, to ,hich
petitioners ,ere assigned, ,ere distinguisha&le from the regular or ordinary
&usiness of 6#8, ,hich is the production or ma$ing and mar$eting of steel
products.
;uring the time petitioners rendered services to 6#8, their ,or$ ,as limited
to one or another of the speci:c component pro=ects ,hich made up the
40L<P I and II.
It is not sho,n that petitioners ,ere hired for or assigned to other purposes.
Re: Le-g() %. Se"+0/e
#8 a>rmed the '0 and 6'R81s &asic :nding that the length of service of a
pro=ect employee is not the controlling test of employment tenure &ut
,hether or not Ythe employment has &een :%ed for a speci:c pro=ect or
underta$ing the completion or termination of ,hich has &een determined at
the time of the engagement of the employee1.
The simple fact that the employment of petitioners as pro=ect employees had
gone &eyond one year does not detract from, or legally dissolve, their status
as pro=ect employees.
KIA8CO vs NLRC
FACTS:
-n ())!!3 private respondent P6-8-<;8 hired petitioner 8isell Ziamco as a
pro=ect employee in its Geothermal 0gro-Industrial Plant Pro=ect in Ialencia,
6egros -riental.
The 8ontracts of <mployment

stipulated among others that Ziamco ,as &eing
hired &y the company as a technician in said plant. The terms of the
contracts stipulate the follo,ing periods of employment@
D1F
4irst 8ontract@ 7 months from ())!!3 to )/.)!!3 or up to
the completion of the pro=ect, ,hich ever ,ould come :rst.
D2F
#econd 8ontract@ 3))!!3 to 2)/.)!!/.

D6F
Third 8ontract@ 7))!!/ to )/.)!!/.

-n .)3.)!!/ Ziamco received a 5emo demanding an e%planation from him

on certain infractions he allegedly committed.

In a letter, he tried to e%plain his side &ut private respondents found his
e%planation unsatisfactory.

Thereafter, he ,as placed under preventive suspension from ))!!/ to

)/.)!!/, pending further investigation.
Page :0 of 122

+o,ever, no investigation ,as ever conducted. Private respondents

contended that an investigation ,as not necessary since Ziamco had /e!'ed
(% ,e !- e#$l%&ee ipso facto $%- ()e e?$0"!(0%- %. )0' e#$l%&#e-(
/%-("!/( %- 11C60C1;;6.

?hen Ziamco reported &ac$ to ,or$ after &eing suspended, he ,as

prevented &y security guards from entering the company premises.

#u&se9uently, private respondent P6-8-<;8 reported to the ;-'< that

petitioner Ziamco ,as terminated on ))!!/ due to the e%piration of his
employment contract and the a&olition of his position.

Thus, prompting Ziamco to :le a 8omplaint for illegal suspension and

dismissal against the P6-8.

The 'a&or 0r&iter Iillahermosa dismissed the complaint for lac$ of merit
&ecause the employment contracts stated that Ziamco ,as &eing hired for a
speci:c pro=ect and for a :%ed term.

Therefore Ziamco could not 9uestion his dismissal since it ,as in accordance
,ith his employment contract.

Cpon appeal to 6'R8, the decision ,as reversed, &ut ,as later modi:ed ,hen
private respondent :led a 5otion for Reconsideration.

It ruled that Ziamco ,as a pro=ect employee &ut he ,as illegally dismissed
and it ordered for the reinstatement of the complainant.

+ence, this petition.

ISSUE: ?hether petitioner Ziamco is a regular employee or a pro=ect employee.
Held: Ziamco is a pro=ect employee.

0rticle 3". of the 'a&or 8ode provides@ The provisions of ,ritten agreement
to the contrary not,ithstanding and regardless of the oral agreement of the
parties, an employment shall &e deemed to &e regular ,here the employee
has &een engaged to perform activities ,hich are usually necessary or
desira&le in the usual &usiness or trade of the employer, e?/e$( *)e"e ()e
e#$l%&#e-( )!' ,ee- 1?ed N .%" ! '$e/01/ $"%2e/( %" -de"(!30-g
()e /%#$le(0%- %" (e"#0-!(0%- %. *)0/) )!' ,ee- de(e"#0-ed !( ()e
(0#e %. ()e e-g!ge#e-( %. ()e e#$l%&ee %" *)e"e ()e *%"3 %"
'e"+0/e (% ,e $e".%"#ed 0' 'e!'%-!l 0- -!("e !-d ()e e#$l%&#e-( 0'
.%" ()e d"!(0%- %. ()e 'e!'%-.
Page :1 of 122

In Violeta v. NLRC, the 8ourt ruled that the principal test for determining
,hether employees are Bpro=ect employees,B or Bregular employees,B is
,hether or not the H$"%2e/( e#$l%&ee'H *e"e !''0g-ed (% /!""& %( !
H'$e/01/ $"%2e/( %" -de"(!30-g,H ()e d"!(0%- !-d '/%$e %. *)0/)
*e"e '$e/01ed !( ()e (0#e ()e e#$l%&ee' *e"e e-g!ged .%" ()!(
$"%2e/(.

Pro=ect employees are those ,or$ers hired () for a speci:c pro=ect or

underta$ing, and (3) the completion or termination of such pro=ect or
underta$ing has &een determined at the time of engagement of the
employee.

Cnder Policy Instruction 6o. 3. of the #ecretary of 'a&or, $"%2e/(

e#$l%&ee' are those employed in connection ,ith a particular pro=ect.

6on-pro=ect or regular employees are those employed /ithout re&erence to

any particular pro=ect.

0ll the employment contracts of Ziamco '(0$l!(ed )e *!' e#$l%&ed 0-

()e0" Ge%()e"#!l Ag"%-I-d'("0!l 7e#%-'("!(0%- Pl!-( pursuant to the
pro=ect of the company Mrelated to applied research and development,
technical consultancy, training, information and planning services on energy
and related technologies that include the implementation and completion of
the Geothermal 0groindustrial ;emonstration Plant Pro=ect.N

Ziamco ,as assigned to a speci:c pro=ect and the duration and completion of
such pro=ect had also &een determined at the time of his employment.
Pursuant to his contract, he ,as hired as a Pro=ect <mployee for a period
Mcommencing on 12323445 to 3625323445 or up to the completion of the
PROJECT, whichever comes frst.N

It is apparent that Ziamco ,as a pro=ect employee &ecause@

(a) he ,as speci:cally assigned to ,or$ for a particular pro=ect,
,hich ,as the Geothermal 0gro-Industrial ;emonstration Plant
Pro=ect of private respondentsA and
(&) the termination and the completion of the pro=ect or underta$ing
,as determined and stipulated in the contract at the time of his
employment.
7ISPOSITION: The assailed Resolution of 6'R8 is 5-;I4I<;. Private respondents
are -R;<R<; to R<I6#T0T< petitioner.
N%(e: -ther issues include reinstatement and recovery of moral damages due to
illegal dismissal. The court ruled that even if petitioner is a pro=ect employee, he
,as illegally dismissed. Illegal dismissal is not &ased on the status of employment,
&ut on the failure of private respondents to comply ,ith the re9uirements of due
process. Reinstatement ,as ordered &ecause private respondents failed to present
proof ,hich ,ould ,arrant his dismissal prior to the completion of the pro=ect.
Page :2 of 122
P)0l O!0-Al!0 !-d A#'e#e-( C%"$. +' Cl!+e 126 SCRA 2;;
FACTS:
Petitioner is a corporation operating a =ai-alai fronton for sport and
amusement. It has its o,n maintenance group for the up$eep of its
premises.
4or the renovation of its main &uilding, ,hich ,or$ is not included in
maintenance, it hired private respondents, 8adatal, Jr., a plum&er, and
;elgra, a mason, together ,ith /. other ,or$ers on 4e&ruary 3, !(* for a
period of one month, open to e%tension should the need for the arise in the
course of the renovation.
Renovation ,as completed &y -cto&er !(*.
5anagement then decided to construct an anne% to the &uilding and private
respondents ,or$ed on the :re escape.
6ovem&er 3(, !(* O 6otice of termination given to the respondents eDective
6ovem&er 3! &ut they still continued to ,or$ nonetheless.
They ,or$ed until ;ecem&er and ,ere fully paid for the ,or$ they
rendered up to that date.
;ecem&er /, !(* - Petitioner :led ,ith the former ;epartment of 'a&or a
report of termination of the services of private respondents and /. others,
listing them as casual emergency ,or$ers.
Private ,or$ers alleged illegal termination.
0ssistant 5inister 'eogardo ordered the reinstatement of the ,or$ers ,ith full
&ac$,ages &efore petitioner could :le a reply to the letter-complaint of the
respondents.
'eogardo said that the respondents ,ere already regular employees
according to 0rt. (. (no, 0rt. 3") of the 'a&or 8ode and that termination
,as un=ust.
0n appeal ,as :led ,hich 8lave, in his capacity as Presidential <%ecutive
0ssistant, dismissed it.
ISSUE: ?hether or not private respondents are regular employees entitled to
security of tenure.
HEL7: NO.
Private respondents ,ere hired for a speci:c pro=ect to renovate the main
&uilding, ,here ma=or repairs such as painting the main &uilding, repair of the
roof, cleaning of clogged ,ater pipes and drains, and other necessary repairs
,ere re9uired.
Page :6 of 122
It ,as made $no,n, and so understood at the start of the hiring, that their
services ,ould last until the completion of the renovation.
They rendered service from 4e&ruary 3 to ;ecem&er , !(*, almost
months, &ut less than a year.
Petitioner gave the reason for termination as Bdue to termination of pro=ect.
There could &e no other reason, ho,ever, than that the termination of private
respondents ,as &ecause their services ,ere no longer needed and they had
nothing more to do since the pro=ect for ,hich they ,ere hired had &een
completed.
The fact ,as not that private respondents ,ere hired as maintenance
helpers, &ecause petitioner corporation had a regular maintenance force.
Private respondents, as ,ell as the other /. ,or$ers, ,ere needed as
additional hands for the other small =o&s after the renovation cannot &e
deemed maintenance &ut more of casual ,or$.
The casual or limited character of private respondentsF employment,
therefore, is evident.
They ,ere engaged for a speci:c pro=ect or underta$ing and fall ,ithin the
e%ception provided for in 0rticle 3" of the 'a&or 8ode, supra.
6ot &eing regular employees, it cannot &e =usti:a&ly said that petitioner had
dismissed them ,ithout =ust cause. They are not entitled to reinstatement
,ith full &ac$ ,ages.
0rt. 3". Regular and Casual 'mplo(ment. P The provisions of ,ritten agreement
to the contrary not,ithstanding and regardless of the oral agreements of the
parties, an employment shall &e deemed to &e regular ,here the employee has
&een engaged to perform activities ,hich are usually necessary or desira&le in the
usual &usiness or trade of the employer, e%cept ,here the employment has &een
:%ed for a speci:c pro=ect or underta$ing, the completion or termination of ,hich
has &een determined at the time of the engagement of the employee or ,here the
,or$ or services to &e performed is seasonal in nature and the employment is for
the duration of the season.
SAN7OVAL SHIPYAR7S, INC., +. NLRC
FACTS:
#andoval #hipyards, Inc. has &een engaged in the &uilding and repair of
vessels.
It contends that each vessel is a separate pro=ect and that the employment of
the ,or$ers is terminated ,ith the completion of each pro=ect.
The ,or$ers claim to &e regular ,or$ers and that the termination of one
pro=ect does not mean the end of their employment since they can &e
assigned to un:nished pro=ects.
Page :9 of 122
Respondents ,ere assigned to the construction of the LC) Catarman, Pro=ect
6o. (7. 0fter three months of ,or$, the pro=ect ,as completed.
The :ve ,or$ers ,ere served a termination notice.
The termination ,as reported to the 5inistry of 'a&or.
In 7.R. No. 81894, Respondents ;iamante, Pacres, #aputalo and 8ervales
:led a complaint for illegal dismissal.
The 6'R8 a>rmed the decision of the '0 ordering the reinstatement of the
complainants.
In 7.R. No. 88334, respondents ;anilo de la 8ruG, et al., ( in all, ,ere
assigned to ,or$ in Pro=ect 6o. (!. for the construction of a tan$er ordered
&y 5o&il -il Philippines, Inc.
There ,ere 77 ,or$ers in that pro=ect. The tan$er ,as launched on January
/, !".. #andoval #hipyards terminated the services of the ,elders, helpers
and construction ,or$ers.
The termination ,as duly reported to the 5inistry of 'a&or and <mployment.
Three days later, 3( out of the 77 ,or$ers ,ere hired for a ne, pro=ect. The
3( included four of the ( respondents ,ho :led a complaint for illegal
dismissal.
0fter hearing, the ;irector of the 5inistryFs 8apital Region ordered the
reinstatement of the complainants. The ;eputy 5inister of 'a&or a>rmed
that order.
ISSUE: ?-6 respondents are mere pro=ect employees.
HEL7: Be )%ld ()!( $"0+!(e "e'$%-de-(' *e"e $"%2e/( e#$l%&ee' *)%'e
*%"3 *!' /%(e"#0-%' *0() ()e $"%2e/( .%" *)0/) ()e& *e"e )0"ed.
Policy Instructions 6o. 3. of the #ecretary of 'a&or, ,hich ,as issued to
sta&iliGe employer-employee relations in the construction industry, provides@
P"%2e/( e#$l%&ee' !"e ()%'e e#$l%&ed 0- /%--e/(0%- *0()
! $!"(0/l!" /%-'("/(0%- $"%2e/(. 6on-pro=ect (regular)
employees are those employed &y a construction company
,ithout reference to any particular pro=ect.
P"%2e/( e#$l%&ee' !"e -%( e-(0(led (% (e"#0-!(0%- $!& 0.
()e& !"e (e"#0-!(ed !' ! "e'l( %. ()e /%#$le(0%- %. ()e
$"%2e/( %" !-& $)!'e ()e"e%. 0- *)0/) ()e& !"e e#$l%&ed,
"eg!"dle'' %. ()e -#,e" %. $"%2e/(' 0- *)0/) ()e& )!+e
,ee- e#$l%&ed ,& ! $!"(0/l!" /%-'("/(0%- /%#$!-&.
5oreover, the company is not re9uired to o&tain clearance from
the #ecretary of 'a&or in connection ,ith such termination.
Page :: of 122
I8AUI7O V. NLRC 62; SCRA 6:7 D2000F
FACTS:
Petitioner ,as employed as a data encoder &y private respondent
International Information #ervices, Inc., a domestic corporation engaged in
the &usiness of data encoding and $eypunching, from 0ugust 3*, !"" until
-cto&er ", !! ,hen her services ,ere terminated due to Blo, volume of
,or$B.
Petitioner :led a complaint for illegal dismissal ,ith prayer for service
incentive leave pay and /th month diDerential ,ith 6'R8 alleging that her
employment ,as terminated not due to the lo, volume of ,or$ &ut &ecause
she Bsigned a petition for certi:cation election among the ran$ and :le
employees of respondents,B thus charging private respondent ,ith
committing unfair la&or practices.
Private respondent maintained that it had valid reasons to terminate
petitionerFs employment and disclaimed any $no,ledge of the e%istence or
formation of a union among its ran$-and-:le employees at the time
petitionerFs services ,ere terminated.
o Private respondent stressed that its &usiness B[relies heavily on
companies availing of its services.
o Its retention &y client companies ,ith particular emphasis on data
encoding is on a pro=ect to pro=ect &asis,B usually lasting for a period of
Bt,o to :ve months.B
o Private respondent further argued that petitionerFs employment ,as
for a Bspeci:c pro=ect ,ith a speci:ed period of engagement.B
o 0ccording to private respondent, M[the certainty of the e%piration of
complainantFs engagement has &een determined at the time of its
engagement (until 3( 6ovem&er !!) or ,hen the pro=ect is earlier
completed or ,hen the client ,ithdra,s,B as provided in the contract.
o BThe happening of the second event Vcompletion of the pro=ectW has
materialiGed, thus, her contract of employment is deemed terminated.
ISSUE: ?-6 petitioner is a Bpro=ect employeeB and not a Bregular employeeB ,ho
has security of tenure.
HEL7: 6'R8 is correct in holding that petitioner is a pro=ect employee.
The principal test for determining ,hether an employee is a pro=ect employee
or a regular employee is ,hether the pro=ect employee ,as assigned to carry
out a speci:c pro=ect or underta$ing, the duration and scope of ,hich ,ere
speci:ed at the time the employee ,as engaged for that pro=ect.
0 pro=ect employee is one ,hose employment has &een :%ed for a speci:c
pro=ect or underta$ing, the completion or termination of ,hich has &een
determined at the time of the engagement of the employee or ,here the
Page :6 of 122
,or$ or service to &e performed is seasonal in nature and the employment is
for the duration of the season.
I- ()e 0-'(!-( /!'e, petitioner ,as engaged to perform activities ,hich
,ere usually necessary or desira&le in the usual &usiness or trade of the
employer, as admittedly, petitioner ,or$ed as a data encoder for private
respondent, a corporation engaged in the &usiness of data encoding and
$eypunching, and her employment ,as :%ed for a speci:c pro=ect or
underta$ing the completion or termination of ,hich had &een determined at
the time of her engagement, as may &e o&served from the series of
employment contracts &et,een petitioner and private respondent, all of
,hich contained a designation of the speci:c =o& contract and a speci:c
period of employment.
+o,ever, even as ,hen petitioner is a pro=ect employee, according to
=urisprudence BVaW pro=ect employee or a mem&er of a ,or$ pool may ac9uire
the status of a regular employee ,hen the follo,ing concur@
1) There is a continuous rehiring of pro=ect employees even after the cessation
of a pro=ectA and
2) The tas$s performed &y the alleged Bpro=ect employeeB are vital, necessary
and indispensa&le to the usual &usiness or trade of the employer.
The evidence on record reveals that petitioner ,as employed &y private
respondent as a data encoder, performing activities ,hich are usually
necessary or desira&le in the usual &usiness or trade of her employer,
continuously for a period of more than three (/) years, from 0ugust 3*, !""
to -cto&er ", !! and contracted for a total of thirteen (/) successive
pro=ects.
It ,as previously ruled that BVhWo,ever, the length of time during ,hich the
employee ,as continuously re-hired is not controlling, &ut merely serves as a
&adge of regular employment.B
Eased on the foregoing, the petitioner has attained the status of a regular
employee of private respondent.
Eeing a regular employee, petitioner is entitled to security of tenure and
could only &e dismissed for a =ust or authoriGed cause, as provided in 0rt 3(!
'a&or 8ode.
The alleged causes of petitionerFs dismissal (lo, volume of ,or$ and
&elatedly, completion of pro=ect) are not valid causes for dismissal under
0rticles 3"3 and 3"/ 'a&or 8ode.
Thus, petitioner is entitled to reinstatement ,ithout loss of seniority rights
and other privileges, and to her full &ac$ ,ages, inclusive of allo,ances, and
to her other &ene:ts or their monetary e9uivalent computed from the time
her compensation ,as ,ithheld from her up to the time of her actual
reinstatement.
Page :7 of 122
+o,ever, complying ,ith the principles of Bsuspension of ,or$B and Bno ,or$,
no payB &et,een the end of one pro=ect and the start of a ne, one, in
computing petitionerFs &ac$ ,ages, the amounts corresponding to ,hat could
have &een earned during the periods from the date petitioner ,as dismissed
until her reinstatement ,hen private respondent ,as not underta$ing any
pro=ect, should &e deducted.
+aving already ,or$ed for more than three (/) years at the time of her
un,arranted dismissal, petitioner is undou&tedly entitled to service incentive
leave &ene:ts, computed from !"! until the date of her actual
reinstatement.
CHUA d&a PRI8E 8OVER CONSTRUCTION 7EV4T vs COURT OF APPEALS
FACTS:
-n ")3.)!"7, private respondents 0ndres Paguio, Pa&lo 8anale, Ruel Pangan,
0urelio Paguio, Rolando Trinidad, Romeo Tapang and 8arlos 5ali,at :led a
Petition ,ith the ##8 for ### coverage and contri&utions against petitioner
Reynaldo 8hua, o,ner of Prime 5over 8onstruction ;evelopment, claiming
that they ,ere all regular employees of the petitioner in his construction
&usiness.
-n the other hand, the petitioner claimed that private respondents ,ere
pro=ect employees, assigned &y petitioner in his various construction pro=ects
continuously, ,hose ,or$ had &een :%ed for a speci:c pro=ect or underta$ing
the completion of ,hich ,as determined at the time of their engagement.
This &eing the case, he concluded that said employees ,ere not entitled to
coverage under the #ocial #ecurity 0ct.
Thus, he claimed, no employer-employee relation e%isted &et,een the
parties. There &eing no employer-employee relationship, private respondents
are not entitled to coverage under the #ocial #ecurity 0ct.
5oreover, petitioner invo$es the defense of good faith, or his honest &elief
that pro=ect employees are not regular employees under 0rticle 3". of the
'a&or 8ode.
The ##8 and 80 ruled in favor of the respondents, declaring them all to &e
regular employees of the petitioner.
ISSUE: ?hether or not private respondents ,ere regular employees of the
petitioner.
Held: YES.
Page :E of 122
Private respondents ,ere regular employees and that 80 did not err in their
:nding.
;espite the insistence of petitioner that they ,ere pro=ect employees, facts
sho, that as masons, carpenters and :ne graders in petitioner1s various
construction pro=ects, they performed ,or$ ,hich ,as usually necessary and
desira&le to petitioner1s &usiness ,hich involves construction of roads and
&ridges.
In Violeta v. NLRC, this 8ourt ruled ()!( (% ,e e?e#$(ed ."%# ()e
$"e'#$(0%- %. "egl!"0(& %. e#$l%&#e-(, the agreement &et,een a
pro=ect employee and his employer must strictly conform to the re9uirements
and conditions under 0rticle 3". of the 'a&or 8ode.
I( 0' -%( e-%g) ()!( !- e#$l%&ee 0' )0"ed .%" ! '$e/01/ $"%2e/( %"
$)!'e %. *%"3. T)e"e #'( !l'% ,e ! de(e"#0-!(0%- %., %" ! /le!"
!g"ee#e-( %-, ()e /%#$le(0%- %" (e"#0-!(0%- %. ()e $"%2e/( !( ()e
(0#e ()e e#$l%&ee *!' e-g!ged. This second re9uirement ,as not met in
this case.
5oreover, ,hile it may &e true that private respondents ,ere initially hired
for speci:c pro=ects or underta$ings, the repeated re-hiring and continuing
need for their services over a long span of timePthe shortest &eing t,o years
and the longest &eing eightPhave undenia&ly made them regular employees.
This 8ourt has held that !- e#$l%&#e-( /e!'e' (% ,e /%-(e"#0-' *0()
'$e/01/ $"%2e/(' *)e- ()e e#$l%&ee 0' /%-(0-%'l& "e)0"ed de (%
()e de#!-d' %. ()e e#$l%&e"4' ,'0-e'' !-d "e-e-g!ged .%" #!-&
#%"e $"%2e/(' *0()%( 0-(e""$(0%-.
The 8ourt li$e,ise ta$es note of the fact that, as cited &y the ##8, even the
6'R8 in a la&or case involving the same parties, found that private
respondents ,ere regular employees of the petitioner.
In the proceedings &efore the ##8 and the 80, petitioner failed to prove that
private respondents ,ere pro=ect employees &ecause it ,as ,as una&le to
sho,@
o that private respondents ,ere appraised of ()e $"%2e/( -!("e %.
()e0" e#$l%&#e-(P
o the '$e/01/ $"%2e/(' %" !-& $)!'e -de"(!3e- ,& $e(0(0%-e" !-d
.%" *)0/) $"0+!(e "e'$%-de-(' *e"e )0"edP
o any d%/#e-( (i.e. employment contracts \ employment records)
0-d0/!(0-g ()e d!(e' %. )0"0-g !-d (e"#0-!(0%- 0- "el!(0%- (%
()e $!"(0/l!" /%-'("/(0%- $"%2e/( or phases in ,hich they ,ere
employedA
o any proof that he su&mitted reports of termination after the completion
of his construction pro=ects, considering that he alleges that private
respondents ,ere hired and rehired for various pro=ects or phases of
,or$ therein.
Page :; of 122
7ISPOSITION: The Petition is ;<6I<;. The ;ecision and Resolution of the 80 are
044IR5<;.
7e O/!#$% +' NLRC 1E6 SCRA 660
FACTS:
-n #eptem&er /., !"., the services of *7 employees of private respondent
5a$ati ;evelopment 8orporation ,ere terminated on the ground of the
e%piration of their contracts.
The said employees :led a complaint for illegal dismissal against the 5;8 on
-cto&er , !".A -n -cto&er ", !"., as a result of the aforementioned
termination, the Philippine Transport and General ?or$ers 0ssociation, of
,hich the complainants ,ere mem&ers, :led a notice of stri$e on the grounds
of union-&usting, su&contracting of pro=ects ,hich could have &een assigned
to the dismissed employees, and unfair la&or practiceA that on -cto&er 2,
!"., the PTG?0 declared a stri$e and esta&lished pic$et lines in the
perimeter of the 5;8 premises.
-n 6ovem&er 2, !"., the 5;8 :led ,ith the Eureau of 'a&or Relations a
motion to declare the stri$e illegal and restrain the ,or$ers from continuing
the stri$eA that on that same day and several days thereafter the 5;8 :led
applications for clearance to terminate the employment of !. of the stri$ing
,or$ers, ,hom it had mean,hile preventively suspendedA that of the said
,or$ers, (2 ,ere pro=ect employees under contract ,ith the 5;8 ,ith :%ed
terms of employmentA and that on 0ugust /, !"3, 'a&or 0r&iter 0polinar '.
#evilla rendered a decision denying the applications for clearance :led &y the
5;8 and directing it to reinstate the individual complainants ,ith t,o months
&ac$ ,ages each.
This is the decision modi:ed &y the 6'R8 ,hich is no, faulted &y the
petitioners for grave a&use of discretion.
The contention is that the pu&lic respondent acted ar&itrarily and erroneously
in ruling that@ a) the motion for reconsideration ,as :led out of timeA &) the
stri$e ,as illegalA and c) the separation of the pro=ect employees ,as
=usti:ed.
ISSUE:
. ?hether or not the contract ,or$ers are considered regular employees.
3. ?hether or not the pro=ect ,or$ers are entitled to separation pay.
HEL7:
. 6o. The contract ,or$ers are not considered regular employees, their services
&eing needed only ,hen there are pro=ects to &e underta$en.
Page 60 of 122
FThe rationale of this rule is that if a pro=ect has already &een completed, it
,ould &e un=ust to re9uire the employer to maintain them in the payroll
,hile they are doing a&solutely nothing e%cept ,aiting until another
pro=ect is &egun, if at all.
In eDect, these stand-&y ,or$ers ,ould &e en=oying the status of
privileged retainers, collecting payment for ,or$ not done, to &e dis&ursed
&y the employer from pro:ts not earned. This is not fair &y any standard
and can only lead to a coddling of la&or at the e%pense of management.
3. Les. ?e hold that the pro=ect ,or$ers in the case at &ar, ,ho ,ere separated
even &efore the completion of the pro=ect at the 6e, 0la&ang Iillage and not
really for the reason that their contracts had e%pired, are entitled to separation
pay.
The record sho,s that although the contracts of the pro=ect ,or$ers had
indeed e%pired, the pro=ect itself ,as still on-going and so continued to
re9uire the ,or$ersF services for its completion.
It is o&vious that the real reason for the termination of their services-
,hich, to repeat, ,ere still needed-,as the complaint the pro=ect ,or$ers
had :led and their participation in the stri$e against the private
respondent.
These ,ere the acts that rendered them persona non grata to the
management. Their services ,ere discontinued &y the 5;8 not &ecause
of the e%piration of their contracts, ,hich had not prevented their
retention or rehiring &efore as long as the pro=ect they ,ere ,or$ing on
had not yet &een completed.
The real purpose of the 5;8 ,as to retaliate against the ,or$ers, to
punish them for their de:ance &y replacing them ,ith more tracta&le
employees.
Policy Instruction 6o. 3. of the ;epartment of 'a&or, providing that
Bpro=ect employees are not entitled to separation pay if they are
terminated as a result of the completion of the pro=ect or any phase
thereof in ,hich they are employed, regardless of the pro=ects in ,hich
they had &een employed &y a particular construction company.B
The rule ,ould then entitle pro=ect employees to separation pay if the
pro=ects they are ,or$ing on have not yet &een completed ,hen their
services are terminated.
Page 61 of 122
It is the policy of the 8onstitution to aDord protection to la&or in
recognition of its role in the improvement of our ,elfare and the
strengthening of our democracy.
0n e%ploited ,or$ing class is a discontented ,or$ing class. It is a treadmill
to progress and a threat to freedom.
Zno,ing this, ,e must e%ert all eDort to dignify the lot of the employee,
elevating him to the same plane as his employer, that they may &etter
,or$ together as e9ual partners in the 9uest for a &etter life.
HANOIN e(/. +'. IAANEI
FACTS:
Respondents and four other co-,or$ers :led a complaint &efore the 6'R8 for
illegal dismissal &y +an=in. Respondents alleged that +06JI6 hired them for
various positions on diDerent dates.
Respondents stated that their tas$s ,ere usual and necessary or desira&le in
the usual &usiness or trade of +06JI6.
Respondents additionally averred that they ,ere dispatched to its various
construction pro=ects.
Petitioners maintained that respondents ,ere hired as pro=ect employees for
the construction of the 'RT)5RT Pro=ect.
+06JI6 and respondents purportedly e%ecuted contracts of employment, in
,hich it ,as clearly stipulated that the respondents ,ere to &e hired as
pro=ect employees for a period of only three months, &ut that the contracts
may &e rene,ed.
Page 62 of 122
+o,ever, petitioners failed to furnish the 'a&or 0r&iter a copy of said
contracts of employment.
Petitioners further emphasiGed that respondents ,ere among the pro=ect
employees ,ho ,ere laid oD, as sho,n in the <sta&lishment Termination
Report :led &y +06JI6 &efore the ;-'<.
The 'a&or 0r&iter declared respondents ,ere regular employees.
The 6'R8 reversed the 'a&or 0r&iterFs ;ecision and pronounced that the
respondents ,ere pro=ect employees.
The 8ourt of 0ppeals reversed the 6'R8 ;ecision.
ISSUE: ?-6 respondents are pro=ect employees.
HEL7: The Petition is ,ithout merit.
Pe(0(0%-e"' /!ll !((e-(0%- (% ()e .!/( ()!( ()e& /%#$l0ed *0() (*% %.
()e 0-d0/!(%"' %. $"%2e/( e#$l%&#e-(, as prescri&ed under #ection 3.3(e)
and (f) of ;epartment -rder 6o. !, #eries of !!/, entitled Guidelines
Governing the <mployment of ?or$ers in the 8onstruction Industry, issued &y
the ;-'<@
2.2 I-d0/!(%"' %. $"%2e/( e#$l%&#e-(. - <ither one or more
of the follo,ing circumstances, among others, may &e
considered as indicators that an employee is a pro=ect
employee.
(a) The duration of the speci:c)identi:ed underta$ing for ,hich
the ,or$er is engaged is reasona&ly determina&le.
(&) #uch duration, as ,ell as the speci:c ,or$)service to &e
performed, is de:ned in an employment agreement and is made
clear to the employee at the time of hiring.
(c) The ,or$)service performed &y the employee is in connection
,ith the particular pro=ect)underta$ing for ,hich he is engaged.
(d) The employee, ,hile not employed and a,aiting
engagement, is free to oDer his services to any other employer.
DeF T)e (e"#0-!(0%- %. )0' e#$l%&#e-( 0- ()e $!"(0/l!"
$"%2e/(C-de"(!30-g 0' "e$%"(ed (% ()e 7e$!"(#e-( %.
L!,%" !-d E#$l%&#e-( D7OLEF Reg0%-!l O5/e )!+0-g
2"0'd0/(0%- %+e" ()e *%"3$l!/e *0()0- 60 d!&' .%ll%*0-g
()e d!(e %. )0' 'e$!"!(0%- ."%# *%"3, '0-g ()e
Page 66 of 122
$"e'/"0,ed .%"# %- e#$l%&ee'G
(e"#0-!(0%-'Cd0'#0''!l'C''$e-'0%-'.
D.F A- -de"(!30-g 0- ()e e#$l%&#e-( /%-("!/( ,& ()e
e#$l%&e" (% $!& /%#$le(0%- ,%-' (% ()e $"%2e/(
e#$l%&ee !' $"!/(0/ed ,& #%'( /%-'("/(0%- /%#$!-0e'.
T)e .!0l"e %. !- e#$l%&e" (% 1le ! Te"#0-!(0%- Re$%"( *0() ()e 7OLE
e+e"& (0#e ! $"%2e/( 0' /%#$le(ed 0-d0/!(e' ()!( "e'$%-de-(' *e"e
-%( $"%2e/( e#$l%&ee'. In this case, only the last and :nal termination of
petitioners ,as reported to the ;-'<.
Petitioners insist that the payment to the respondents of a completion &onus
indicates that respondents ,ere pro=ect employees.
The amount paid to each employee ,as e9uivalent to his :fteen-day salary.
A /%#$le(0%- ,%-' 0' $!0d 0- /%--e/(0%- *0() ()e /%#$le(0%- %. ()e
$"%2e/(, !-d 0' -%( ,!'ed %- ! 1.(ee--d!& $e"0%d.
#ection /.2 of ;epartment -rder 6o. !, #eries of !!/, provides that the
completion &onus is at least the employeeFs one-half month salary for every
t,elve months of service.
;epartment -rder 6o. !, #eries of !!/, provides that 0- ()e !,'e-/e %.
!- -de"(!30-g ()!( ()e /%#$le(0%- ,%-' *0ll ,e $!0d (% ()e
e#$l%&ee, !' 0- ()0' /!'e, ()e e#$l%&ee #!& ,e /%-'0de"ed ! -%--
$"%2e/( e#$l%&ee.
;ue to petitionersF failure to adduce any evidence sho,ing that petitioners
,ere pro=ect employees ,ho had &een informed of the duration and scope of
their employment, they ,ere una&le to discharge the &urden of proof
re9uired to esta&lish that respondentsF dismissal ,as legal and valid.
4urthermore, it is a ,ell-settled doctrine that if dou&ts e%ist &et,een the
evidence presented &y the employer and that &y the employee, the scales of
=ustice must &e tilted in favor of the latter.
4or these reasons, respondents are to &e considered regular employees of
+06JI6.
4inally, in the instant case, records failed to sho, that +06JI6 aDorded
respondents, as regular employees, due process prior to their dismissal,
through the t,in re9uirements of notice and hearing. Respondents ,ere not
served notices informing them of the particular acts for ,hich their dismissal
,as sought.
6or ,ere they re9uired to give their side regarding the charges made against
them. 8ertainly, the respondentsF dismissal ,as not carried out in accordance
,ith la, and ,as, therefore, illegal.
A.8. ORETA AN7 CO V. NLRC 176 SCRA 21E D1;E;F
Page 69 of 122
FACTS:
Private respondent Grulla ,as engaged &y <ngineering 8onstruction and
Industrial ;evelopment 8ompany (<6;<8-) through 0.5. -reta and 8o., Inc.
as a carpenter in its pro=ect in Jeddah, #audi 0ra&ia.
The contract of employment, ,hich ,as entered into on June , !". ,as
for a period of 3 months. Respondent Grulla left the Philippines for Jeddah,
#audi 0ra&ia on 0ugust 7, !"..
-n 0ugust 7, !"., Grulla met an accident ,hich fractured his lum&ar
verte&rae ,hile ,or$ing at the =o&site. +e ,as rushed to the 6e, Jeddah
8linic and ,as con:ned there for 3 days.
-n 0ugust 3(, !"., Grulla ,as discharged from the hospital and ,as told
that he could resume his normal duties after undergoing physical therapy for
t,o ,ee$s.
-n #eptem&er ", !"., respondent Grulla reported &ac$ to his Pro=ect
5anager and presented to the latter a medical certi:cate declaring the
former already physically :t for ,or$.
#ince then, he stated ,or$ing again until he received a notice of termination
of his employment on -cto&er !, !"..
Grulla :led a complaint for illegal dismissal, recovery of medical &ene:ts,
unpaid ,ages for the une%pired ten (.) months of his contract and the sum
of P,...... as reim&ursement of medical e%penses against 0.5. -reta and
8ompany, Inc. and <6;<8- ,ith the P-<0.
The petitioner 0.5. -reta and 8ompany, Inc. and <6;<8- :led their ans,er
and alleged that the contract of employment entered into &et,een
petitioners and Grulla provides, as one of the grounds for termination of
employment, violation of the rules and regulations promulgated &y the
contractorA and that Grulla ,as dismissed &ecause he has not performed his
duties satisfactorily ,ithin the pro&ationary period of three months.
P-<0 held that complainantFs dismissal ,as illegal and ,arrants the a,ard of
his ,ages for the une%pired portion of the contract.
Petitioner appealed from the adverse decision to the respondent 8ommission.
Respondent 8ommission dismissed the appeal for lac$ of merit and a>rmed
in toto the decision of the P-<0.
Petitioner contends that the respondent Grulla ,as validly dismissed &ecause
the latter ,as still a pro&ationary employeeA and that his dismissal ,as
=usti:ed on the &asis of his unsatisfactory performance of his =o& during the
pro&ationary period.
ISSUE: ?-6 the employment of respondent Grulla ,as illegally terminated &y the
petitioner
HEL7: NO.
Page 6: of 122
0 perusal of the employment contract reveals that although the period of
employment of respondent Grulla is 3 months, the contract period is
rene,a&le su&=ect to future agreement of the parties.
It is clear from the employment contract that the respondent Grulla ,as hired
&y the company as a regular employee and not =ust a mere pro&ationary
employee.
The la, is clear to the eDect that in all cases involving employees engaged
on pro&ationaryF &asis, the employer shall ma$e $no,n to the employee at
the time he is hired, the standards &y ,hich he ,ill 9ualify as a regular
employee.
6o,here in the employment contract e%ecuted &et,een petitioner company
and respondent Grulla is there a stipulation that the latter shall undergo a
pro&ationary period for three months &efore he can 9uality as a regular
employee.
There is also no evidence on record sho,ing that the Grulla had &een
apprised of his pro&ationary status and the re9uirements ,hich he should
comply in order to &e a regular employee.
In the a&sence of these re9uisites, there is =usti:cation in concluding that
respondent Grulla ,as a regular employee at the time he ,as dismissed &y
petitioner.
0s such, he is entitled to security of tenure during his period of employment
and his services cannot &e terminated e%cept for =ust and authoriGed causes
enumerated under the 'a&or 8ode and under the employment contract.
Granting, in gratia argumenti, that respondent is a pro&ationary employee, he
cannot, li$e,ise, &e removed e%cept for cause during the period of pro&ation.
0lthough a pro&ationary or temporary employee has limited tenure, he still
en=oys security of tenure.
;uring his tenure of employment or &efore his contract e%pires, he cannot &e
removed e%cept for cause as provided for &y la,.
The alleged ground of unsatisfactory performance relied upon &y petitioner
for dismissing respondent Grulla is not one of the =ust causes for dismissal
provided in the 'a&or 8ode.
6either is it included among the grounds for termination of employment
under 0rticle III of the contract of employment e%ecuted &y petitioner
company and respondent Grulla.
Grulla ,as not, in any manner, noti:ed of the charges against him &efore he
,as outrightly dismissed.
6either ,as any hearing or investigation conducted &y the company to give
the respondent a chance to &e heard concerning the alleged unsatisfactory
performance of his ,or$.
Page 66 of 122
GLORY PHILIPPINES, INC. vs VERGARA
FACTS:
Petitioner Glory Philippines, Inc. manufactures money-counting machines.
In June !!", it created a Parts Inspection #ection (PI#) tas$ed to inspect the
machine parts for e%portation to its e%clusive &uyer, Glory 'imited Japan
(Glory Japan).
Petitioner hired respondents on ()*)!!", as mem&ers of the PI#. +o,ever,
the employment contracts ,hich they signed only on ")")!!", indicated
them as Production -perators in the Production #ection ,ith a daily ,age of
Php""....
The contracts covered the period from July / to 0ugust /., !!". Thereafter,
respondents1 employment contracts ,ere e%tended on a monthly &asis.
-n 2)3()!!!, ho,ever, they ,ere each made to sign employment contracts
covering the period from 4e&ruary 3" to 0pril /., !!!. -n 2)3*)!!!, 5r.
Ta$eo -shima (President) informed the 0ssistant 5anager that the
contractual employees in the PI# ,ould no longer &e needed &y the company
as Glory Japan had cancelled its orders.
6evertheless, petitioner e%tended respondents1 employment due to their
insistent pleas and for the period from 5ay to 5ay 7, !!!, respondents
signed employment contracts ,ith a higher ,age of Php3..... a day.
Respondents claimed that they continued to ,or$ until 7)37)!!! ,hen, at
the close of ,or$ing hours, petitioner1s security guard advised them that their
employment had &een terminated and that they ,ould no longer &e allo,ed
to enter the premises.
8onse9uently, on 5ay 3(, !!!, they :led separate complaints for illegal
dismissal ,ith the ;-'<. The cases ,ere su&se9uently referred to the 6'R8.
-n .)3!)!!!, the 'a&or 0r&iter rendered a decision :nding that
respondents ,ere regular employees &ecause they performed activities
desira&le to the usual &usiness or trade of petitioner for almost months
and that they ,ere illegally dismissed for lac$ of =ust cause and non-
o&servance of due process. -n appeal, the 6'R8 a>rmed the :ndings of the
'a&or 0r&iter.
Page 67 of 122
+o,ever, upon motion for reconsideration, the 6'R8 reversed and set aside
its earlier decision and dismissed the complaint for lac$ of merit.
The 6'R8 ruled that respondents ,ere pro=ect employees and that their
employment ,as terminated upon e%piration of their employment contracts.
Respondents1 motion for reconsideration ,as denied hence, they :led a
petition for certiorari &efore the 80.
-n !)")3..*, the appellate court granted the petition. Petitioner1s motion
for reconsideration ,as denied hence, this petition.
ISSUE: ?hether the respondents ,ere regular employees or pro=ect employees.
HEL7: Respondents are regular employees of the company.
The 8ourt notes that there are three $inds of employees as provided under
0rticle 3". of the 'a&or 8ode, thus@
() Regular employees or those ,ho have &een engaged to
perform activities ,hich are usually necessary or desira&le in
the usual &usiness or trade of the employerA
(3) P"%2e/( e#$l%&ee' %" ()%'e *)%'e e#$l%&#e-( )!'
,ee- 1?ed .%" ! '$e/01/ $"%2e/( %" -de"(!30-g, ()e
/%#$le(0%- %" (e"#0-!(0%- %. *)0/) )!' ,ee-
de(e"#0-ed !( ()e (0#e %. ()e e-g!ge#e-( %. ()e
e#$l%&ee %" *)e"e ()e *%"3 %" 'e"+0/e (% ,e
$e".%"#ed 0' 'e!'%-!l 0- -!("e !-d ()e e#$l%&#e-(
0' .%" ()e d"!(0%- %. ()e 'e!'%-P !-d
(/) 8asual employees or those ,ho are neither regular nor
pro=ect employees.
In 7randspan :evelopment Corporation v. #ernardo, the 8ourt held that
the principal test for determining ,hether employees are $"%2e/(
e#$l%&ee' or "egl!" e#$l%&ee' is *)e()e" %" -%( ()e Q$"%2e/(
e#$l%&ee'4 *e"e !''0g-ed (% /!""& %( ! Q'$e/01/ $"%2e/( %"
-de"(!30-g,4 ()e d"!(0%- !-d '/%$e %. *)0/) *e"e '$e/01ed !(
()e (0#e ()e e#$l%&ee' *e"e e-g!ged .%" ()!( $"%2e/(.
0s de:ned, pro=ect employees are those ,or$ers hired () for a speci:c
pro=ect or underta$ing, and (3) the completion or termination of such
pro=ect or underta$ing has &een determined at the time of engagement of
the employee.
Page 6E of 122
There is no merit in petitioner1s claim that respondents ,ere pro=ect
employees ,hose employment ,as coterminous ,ith the transaction ,ith
Glory Japan.
Respondents1 e#$l%&#e-( /%-("!/(' .!0led (% '(!(e ()e '$e/01/
$"%2e/( %" -de"(!30-g .%" *)0/) ()e& *e"e !llegedl& e-g!ged.
?hile petitioner claims that respondents ,ere hired for the transaction
,ith Glory Japan, the same ,as not indicated in the contracts.
0s o&served &y the 80, nothing therein suggested that their employment
,as dependent on the continuous patronage of Glory Japan.
4urther, the employment contracts did not indicate the d"!(0%- !-d
'/%$e of the pro=ect or underta$ing as re9uired &y la,.
It is not enough that an employee is hired for a speci:c pro=ect or phase of
,or$ to 9ualify as a pro=ect employee.
T)e"e #'( !l'% ,e ! de(e"#0-!(0%- %., %" ! /le!" !g"ee#e-( %-,
()e /%#$le(0%- %" (e"#0-!(0%- %. ()e $"%2e/( !( ()e (0#e ()e
e#$l%&ee *!' e-g!ged, ,hich is a&sent in this case.
The factual circumstances negate petitioner1s claim that respondents ,ere
pro=ect employees.
<mployment contracts of respondents ,ere repeatedly rene,ed and
e%tended &y petitioner. That from 3))!!" to 2)3()!!!, respondents
reported for ,or$ despite the a&sence of employment contracts and even
after the termination of transaction ,ith Glory Japan, respondents ,ere
allo,ed to ,or$ until 7)37)!!! ,ith higher salaries of Php3..... a day.
'i$e,ise, ,e cannot give credence to petitioner1s claim that respondents
,ere :%ed term employees.
Petitioner1s reliance on our ruling in Philippine Village Hotel v. National
Labor Relations Commission is misplaced &ecause the facts in the said
case are not in all fours ,ith the case at &ar.
In said case, the employees ,ere hired only for a one-month period and
their employment contracts ,ere never rene,ed.
I- ()e 0-'(!-( /!'e, respondents1 original employment contracts ,ere
rene,ed four times. In the last instance, their contracts ,ere e%tended
despite the cessation of petitioner1s alleged transaction ,ith Glory Japan.
Thus, "e'$%-de-(' *e"e /%-(0-%'l& -de" ()e e#$l%& %.
$e(0(0%-e", $e".%"#0-g ()e '!#e d(0e' !-d "e'$%-'0,0l0(0e'.
In Philips Semiconductors (Phils.), nc. v. !adri"uela, ,e held that such !
/%-(0-0-g -eed .%" "e'$%-de-('4 'e"+0/e' 0' '5/0e-( e+0de-/e %.
()e -e/e''0(& !-d 0-d0'$e-'!,0l0(& %. ()e0" 'e"+0/e' (% $e(0(0%-e"4'
,'0-e''.
8onse9uently, ,e :nd that respondents ,ere regular employees de:ned
under 0rticle 3". of the 'a&or 8ode as those ,ho have &een engaged to
Page 6; of 122
perform activities ,hich are usually necessary or desira&le in the usual
&usiness or trade of petitioner.
7ISPOSITION: The petition is 7ENIE7. The 801s decisions are AFFIR8E7 ,ith
8O7IFICATIONS.
P"e.%%d' C%"$ +' NLRC
FACTS:
Private respondents (num&ering !.*) ,ere hired &y Pure 4oods 8orporation
(P48) to ,or$ for a :%ed period of 7 months at its tuna cannery plant in
Tam&ler, General #antos 8ity.
0fter the e%piration of their respective contracts of employment in June and
July !!, their services ,ere terminated.
They forth,ith e%ecuted a BRelease and TuitclaimB stating that they had no
claim ,hatsoever against P48.
3! July !!@ private respondents :led &efore the 6'R8 #u&-Regional
0r&itration Eranch a complaint for illegal dismissal against P48 and its plant
manager, 5arciano 0ganon.
'0 dismissed the complaint on the ground that the private respondents ,ere
mere contractual ,or$ers, and not regular employeesA hence, they could not
avail of the la, on security of tenure.
The termination of their services &y reason of the e%piration of their contracts
of employment ,as, therefore, =usti:ed.
-n appeal, 6'R8 a>rmed the '01s decision.
Eut on 5R, 6'R8 held that the private respondent and their co-complainants
,ere regular employees.
o It declared that the contract of employment for :ve months ,as a
Bclandestine scheme employed &y P48 to stiJe private respondentsF
right to security of tenureB and should therefore &e struc$ do,n and
disregarded for &eing contrary to la,, pu&lic policy, and morals.
o +ence, their dismissal on account of the e%piration of their respective
contracts ,as illegal.
0ccordingly, the 6'R8 ordered P48 to reinstate the private respondents to
their former position ,ithout loss of seniority rights and other privileges, ,ith
full &ac$ ,agesA and in case their reinstatement ,ould no longer &e feasi&le,
P48 should pay them separation pay e9uivalent to one-month pay or one-
halfmonth pay for every year of service, ,hichever is higher, ,ith &ac$ ,ages
and .R of the monetary a,ard as attorneyFs fees.
Purefoods Corp's Contention:
Page 70 of 122
That the private respondents are no, estopped from 9uestioning their
separation from petitionerFs employ in vie, of their e%press conformity ,ith
the :ve-month duration of their employment contractsA that the BRelease and
TuitclaimB private respondents had e%ecuted has unconditionally released
P48 from any and all other claims ,hich might have arisen from their past
employment ,ith P48.
O!'s Comment:
The private respondents ,ere regular employees, since they performed
activities necessary and desira&le in the &usiness or trade of P48.
The period of employment stipulated in the contracts of employment ,as null
and void for &eing contrary to la, and pu&lic policy, as its purpose ,as to
circumvent the la, on security of tenure.
The e%piration of the contract did not, therefore, =ustify the termination of
their employment.
0lso, private respondentsF 9uitclaim ,as ineDective to &ar the enforcement
for the full measure of their legal rights.
Private Respondent's "rgument:
8ontracts ,ith a speci:c period of employment may &e given legal eDect
provided, ho,ever, that they are not intended to circumvent the
constitutional guarantee on security of tenureA the practice of P48 in hiring
,or$ers to ,or$ for a :%ed duration of :ve months only to replace them ,ith
other ,or$ers of the same employment duration ,as apparently to prevent
the regulariGation of these so-called Bcasuals,B ,hich is a clear circumvention
of the la, on security of tenure.
ISSUES:
. ?-6 employees hired for a de:nite period and ,hose services are necessary and
desira&le in the usual &usiness or trade of the employer are regular employees
3. ?-6 the private respondentsF :ve-month contracts of employment are valid
HEL7:
. Les. 0rticle 3". of the 'a&or 8ode de:nes regular and casual employment.
There are t,o $inds of regular employees are () those ,ho are engaged to
perform activities ,hich are necessary or desira&le in the usual &usiness or
trade of the employerA and (3) those casual employees ,ho have rendered at
least one year of service, ,hether continuous or &ro$en, ,ith respect to the
activity in ,hich they are employed.
Page 71 of 122
The private respondents1 activities consisted in the receiving, s$inning,
loining, pac$ing, and casing-up of tuna :sh ,hich ,ere then e%ported &y the
petitioner.
Indisputa&ly, they ,ere performing activities ,hich ,ere necessary and
desira&le in petitioner1s &usiness or trade.
The private respondents could not &e regarded as having &een hired for a
speci:c pro=ect or underta$ing.
The term Mspeci:c pro=ect or underta$ingN under 0rticle 3". of the 'a&or
8ode contemplates an activity ,hich is not commonly or ha&itually
performed or such type of ,or$ ,hich is not done on a daily &asis &ut only for
a speci:c duration of time or until completionA the services employed are
then necessary and desira&le in the employer1s usual &usiness only for the
period of time it ta$es to complete the pro=ect.
The fact that the petitioner repeatedly and continuously hired ,or$ers to do
the same $ind of ,or$ as that performed &y those ,hose contracts had
e%pired negates petitioner1s contention that those ,or$ers ,ere hired for a
speci:c pro=ect or underta$ing only.
3. 6o. 8riteria under ,hich term employment cannot &e said to &e in circumvention
of the la, on security of tenure@
) The :%ed period of employment ,as $no,ingly and voluntarily agreed
upon &y the parties ,ithout any force, duress, or improper pressure &eing
&rought to &ear upon the employee and a&sent any other circumstances
vitiating his consentA or
3) It satisfactorily appears that the employer and the employee dealt ,ith
each other on more or less e9ual terms ,ith no moral dominance e%ercised
&y the former or the latter.
It could not &e supposed that private respondent and all other so-called
McasualN ,or$ers of Vthe petitionerW Z6-?I6G'L and I-'C6T0RI'L agreed
to the 7-month employment contract.
8annery ,or$ers are never on e9ual terms ,ith their employers.
0lmost al,ays, they agree to any terms of an employment contract =ust to
get employed considering that it is di>cult to :nd ,or$ given their
ordinary 9uali:cations.
Their freedom to contract is empty and hollo, &ecause theirs is the
freedom to starve if they refuse to ,or$ as casual or contractual ,or$ers.
Indeed, to the unemployed, security of tenure has no value.
Page 72 of 122
It could not then &e said that petitioner and private respondents Bdealt
,ith each other on more or less e9ual terms ,ith no moral dominance
,hatever &eing e%ercised &y the former over the latter.
The :ve-month period speci:ed in private respondents1 employment
contracts having &een imposed precisely to circumvent the constitutional
guarantee on security of tenure should, therefore, &e struc$ do,n or
disregarded as contrary to pu&lic policy or morals.
To uphold the contractual arrangement &et,een the petitioner and the
private respondents ,ould, in eDect, permit the former to avoid hiring
permanent or regular employees &y simply hiring them on a temporary or
casual &asis, there&y violating the employees1 security of tenure in their
=o&s.
LAAAYOG V. 8.Y. SAN AISCUITS, INC.
FACTS:
-n various dates in !!3, petitioners entered into contracts of employment
,ith respondent company as mi%ers, pac$ers and machine operators for a
:%ed term.
-n the e%piration of their contracts, their services ,ere terminated.
4orth,ith, they each e%ecuted a 9uitclaim.
-n 0pril 7, !!/, petitioners :led complaints for illegal dismissal,
underpayment of ,ages, non-payment of overtime, night diDerential and
/th month pay, damages and attorneyFs fees.
The '0 ruled their dismissal to &e illegal on the ground that they had &ecome
regular employees ,ho performed duties necessary and desira&le in
respondent companyFs &usiness.
-n appeal to the 6'R8, the decision of the '0 ,as set aside. +aving entered
into their employment contracts freely and voluntarily, they $ne, that their
employment ,as only for a :%ed period and ,ould end on the prescri&ed
e%piration date.
In a petition for certiorari, the 80 ruled that, ,hile petitioners performed
tas$s ,hich ,ere necessary and desira&le in the usual &usiness of
respondent company, their employment contracts providing for a :%ed term
remained valid.
ISSUE: ?-6 respondents are regular employees of petitioner.
Page 76 of 122
+<';@ Respondents are not regular employees.
3
nd
paragraph of 0rt. 3". of the la&or code states that@
Regular and 8asual <mployment -
?here the duties of the employee consist of activities ,hich are
necessary or desira&le in the usual &usiness of the employer,
the parties are not prohi&ited from agreeing on the duration of
employment. 0rticle 3". does not proscri&e or prohi&it an
employment contract ,ith a :%ed period provided it is not
intended to circumvent the security of tenure.
T*% /"0(e"0! +!l0d!(e ! /%-("!/( %. e#$l%&#e-( *0() ! 1?ed $e"0%d:
D1F ()e 1?ed $e"0%d %. e#$l%&#e-( *!' 3-%*0-gl& !-d +%l-(!"0l&
!g"eed $%- ,& ()e $!"(0e' *0()%( !-& .%"/e, d"e'' %" 0#$"%$e"
$"e''"e ,e0-g ,"%g)( (% ,e!" %- ()e e#$l%&ee !-d *0()%( !-&
/0"/#'(!-/e' +0(0!(0-g /%-'e-( %", D2F 0( '!(0'.!/(%"0l& !$$e!"' ()!(
()e e#$l%&e" !-d e#$l%&ee de!l( *0() e!/) %()e" %- #%"e %" le''
e@!l (e"#' *0() -% #%"!l d%#0-!-/e *)!(e+e" ,e0-g e?e"/0'ed ,&
()e .%"#e" %- ()e l!((e". Ag!0-'( ()e'e /"0(e"0!, $e(0(0%-e"'G /%-("!/('
%. e#$l%&#e-( *0() ! 1?ed $e"0%d *e"e +!l0d.
E!/) /%-("!/( $"%+0ded .%" !- e?$0"!(0%- d!(e. Pe(0(0%-e"' 3-e* ."%#
()e ,eg0--0-g ()!( ()e e#$l%&#e-( %Le"ed (% ()e# *!' -%(
$e"#!-e-( ,( %-l& .%" ! /e"(!0- 1?ed $e"0%d. They ,ere free to accept
or to refuse the oDer. ?hen they e%pressed their acceptance, they &ound
themselves to the contract.
In this case, there ,as no allegation of vitiated consent. Respondents did not
e%ercise moral dominance over petitioners.
o The contracts ,ere mutually advantageous to the parties. ?hile
respondents ,ere a&le to augment increased demand in production &y
hiring petitioners on an as-needed &asis, petitioners found gainful
employment if only for a fe, months.
S0#$l& $(, $e(0(0%-e"' *e"e -%( "egl!" e#$l%&ee'. B)0le ()e0"
e#$l%&#e-( !' #0?e"', $!/3e"' !-d #!/)0-e %$e"!(%"' *!'
-e/e''!"& !-d de'0"!,le 0- ()e '!l ,'0-e'' %. "e'$%-de-(
/%#$!-&, ()e& *e"e e#$l%&ed (e#$%"!"0l& %-l&, d"0-g $e"0%d' *)e-
()e"e *!' )e0g)(e-ed de#!-d .%" $"%d/(0%-.
8onse9uently, there could have &een no illegal dismissal ,hen their services
,ere terminated on e%piration of their contracts.
Page 79 of 122
T)e"e *!' e+e- -% -eed .%" -%(0/e %. (e"#0-!(0%- ,e/!'e ()e& 3-e*
e?!/(l& *)e- ()e0" /%-("!/(' *%ld e-d. C%-("!/(' %. e#$l%&#e-(
.%" ! 1?ed $e"0%d (e"#0-!(e %- ()e0" %*- !( ()e e-d %. '/) $e"0%d.
8ontracts of employment for a :%ed period are not unla,ful. ?hat is
o&=ectiona&le is the practice of some scrupulous employers ,ho try to
circumvent the la, protecting ,or$ers from the capricious termination of
employment.
<mployers have the right and prerogative to choose their ,or$ers.
BThe la,, ,hile protecting the rights of the employees, authoriGes neither the
oppression nor destruction of the employer.
?hen the la, angles the scales of =ustice in favor of la&or, the scale should
never &e so tilted if the result is an in=ustice to the employer.
CANO CHUA V. CA 990 SCRA 121 D2009F
FACTS:
-n 3. 0ugust !"7, private respondents 0ndres Paguio, Pa&lo 8anale, Ruel
Pangan, 0urelio Paguio, Rolando Trinidad, Romeo Tapang and 8arlos 5ali,at
(hereinafter referred to as respondents) :led a Petition ,ith the ##8 for ###
coverage and contri&utions against petitioner Reynaldo 8hua, o,ner of Prime
5over 8onstruction ;evelopment, claiming that they ,ere all regular
employees of the petitioner in his construction &usiness.
Private respondents alleged that petitioner dismissed all of them ,ithout
=usti:a&le grounds and ,ithout notice to them and to the then 5inistry of
'a&or and <mployment.
They further alleged that petitioner did not report them to the ### for
compulsory coverage in Jagrant violation of the #ocial #ecurity 0ct.
-n the other hand, the petitioner claimed that private respondents ,ere
pro=ect employees, ,hose periods of employment ,ere terminated upon
completion of the pro=ect.
Thus, he claimed, no employer-employee relation e%isted &et,een the
parties. There &eing no employer-employee relationship, private respondents
are not entitled to coverage under the #ocial #ecurity 0ct.
5oreover, petitioner invo$es the defense of good faith, or his honest &elief
that pro=ect employees are not regular employees under 0rticle 3". of the
'a&or 8ode.
The ##8 and 80 ruled in favor of the respondents.
ISSUE: ?-6 private respondents ,ere regular employees of petitioner
Page 7: of 122
HEL7: There is no dispute that private respondents ,ere employees of petitioner.
Petitioner himself admitted that they ,or$ed in his construction pro=ects,
although the period of their employment ,as allegedly co-terminus ,ith their
phase of ,or$.
It is clear that private respondents are employees of petitioner, the latter
having control over the results of the ,or$ done, as ,ell as the means and
methods &y ,hich the same ,ere accomplished.
#u>ce it to say that regardless of the nature of their employment, ,hether it
is regular or pro=ect, private respondents are su&=ect of the compulsory
coverage under the ### 'a,, their employment not falling under the
e%ceptions provided &y the la,.
This rule is in accord ,ith the 8ourt1s ruling in Lu;on Stevedoring Corp. v. SSS
to the eDect that all employees, regardless of tenure, ,ould 9ualify for
compulsory mem&ership in the ###, e%cept those classes of employees
contemplated in #ection "(=) of the #ocial #ecurity 0ct.
In Violeta v. NLRC, this 8ourt ruled that to &e e%empted from the presumption
of regularity of employment, the agreement &et,een a pro=ect employee and
his employer must strictly conform to the re9uirements and conditions under
0rticle 3". 'a&or 8ode.
It is not enough that an employee is hired for a speci:c pro=ect or phase of
,or$. There must also &e a determination of, or a clear agreement on, the
completion or termination of the pro=ect at the time the employee ,as
engaged if the o&=ectives of 0rticle 3". are to &e achieved.
T)0' 'e/%-d "e@0"e#e-( *!' -%( #e( 0- ()0' /!'e.
This 8ourt has held that an employment ceases to &e co-terminus ,ith
speci:c pro=ects ,hen the employee is continuously rehired due to the
demands of the employer1s &usiness and re-engaged for many more pro=ects
,ithout interruption.
The 8ourt li$e,ise ta$es note of the fact that, as cited &y the ##8, even the
6ational 'a&or Relations 8ommission in a la&or case involving the same
parties, found that private respondents ,ere regular employees of the
petitioner.
5oreover, ,hile it may &e true that private respondents ,ere initially hired
for speci:c pro=ects or underta$ings, the repeated re-hiring and continuing
need for their services over a long span of timePthe shortest &eing t,o years
and the longest &eing eightPhave undenia&ly made them regular employees.
This 8ourt has held that an employment ceases to &e co-terminus ,ith
speci:c pro=ects ,hen the employee is continuously rehired due to the
demands of the employer1s &usiness and re-engaged for many more pro=ects
,ithout interruption.
The 8ourt li$e,ise ta$es note of the fact that, as cited &y the ##8, even the
6ational 'a&or Relations 8ommission in a la&or case involving the same
Page 76 of 122
parties, found that private respondents ,ere regular employees of the
petitioner.
0nother cogent factor militates against the allegations of the petitioner. In the
proceedings &efore the ##8 and the 8ourt of 0ppeals, petitioner ,as una&le
to sho, that private respondents ,ere appraised of the pro=ect nature of their
employment, the speci:c pro=ects themselves or any phase thereof
underta$en &y petitioner and for ,hich private respondents ,ere hired.
+e failed to sho, any document such as private respondents1 employment
contracts and employment records that ,ould indicate the dates of hiring and
termination in relation to the particular construction pro=ect or phases in
,hich they ,ere employed.
5oreover, it is peculiar that petitioner did not sho, proof that he su&mitted
reports of termination after the completion of his construction pro=ects,
considering that he alleges that private respondents ,ere hired and rehired
for various pro=ects or phases of ,or$ therein.
C.E. CONSTRUCTION CORPORATION vs ISAAC CIOCO , et al
FACTS:
Isaac 8ioco, Jr., Re&ie 0. 5ercado, Eenito I. Galvadores, 8ecilio #olver,
8armelo JuanGo, Een=amin Eaysa, and Rodrigo 6apoles (?-RZ<R#) ,ere
hired &y 8.<. 8onstruction, a domestic corporation engaged in the
construction &usiness.
The ?-RZ<R# ,ere hired as carpenters and la&orers in +!"0%'
/%-'("/(0%- $"%2e/(' ."%# 1;;0 (% 1;;;, the latest of ,hich ,as the GTI
To,er in 5a$ati.
Prior to the start of every pro=ect, the ,or$ers signed individual employment
contracts ,hich provided that the period of employment shall &e co-terminus
,ith the completion of the pro=ect, unless sooner terminated &y the employer
prior to the completion of the pro=ect.
#ometime in 5ay and June !!!, the ?-RZ<R#, along ,ith ** others, ,ere
terminated &y the 8-5P06L on the ground of completion of the phases of the
GTI To,er pro=ect for ,hich they had &een hired. The ?-RZ<R# allege that
they ,ere regular employees, so they :led complaints for illegal dismissal
,ith 6'R8.
-n 2)()3..., the 'a&or 0r&iter rendered =udgment in favor of the 8-5P06L.
o +e ruled that the ?-RZ<R# ,ere pro=ect employees as evident from
their individual employment contractsA that due notices of termination
,ere given to themA and, that the re9uired termination reports ,ere
su&mitted to the ;-'<.
-n appeal, the decision ,as a>rmed &y 6'R8 and su&se9uent motion for
reconsideration ,as denied.
Page 77 of 122
+o,ever, the ?-RZ<R# :led a special civil action for certiorari ,ith the 80
and thus, it rendered that although petitioners ,ere pro=ect employees, their
dismissal as such pro=ect employees is here&y declared I''<G0'.
The parties :led separate motions for reconsideration ,hich ,ere denied.
+ence, the present petitions for revie,.
ISSUE: ?hether or not the ?-RZ<R# ,ere regular employees of the 8-5P06L.
Held: NO.
The 'a&or 0r&iter, the 6'R8, and the 80, unanimously found that the
?-RZ<R# ,ere pro=ect employees of the 8-5P06L.
This :nding is &inding on this 8ourt.
The 8ourt again holds that the fact that the ?-RZ<R# have &een employed
,ith the 8-5P06L for several years on various pro=ects, the longest &eing !
years, did not automatically ma$e them regular employees considering that
regular emplo(ment in +rticle <96 o& the Labor Code speci*es the e.ception
/ith respect to pro0ect emplo(ment.
T)e "e-)0"0-g %. $e(0(0%-e"' %- ! $"%2e/(-(%-$"%2e/( ,!'0' d0d -%(
/%-.e" $%- ()e# "egl!" e#$l%&#e-( '(!('.
The practice ,as dictated &y the practical consideration that e%perienced
construction ,or$ers are more preferred. It did not change their status as
pro=ect employees.
7ISPOSITION: The ;ecision of the 8ourt of 0ppeals is 5-;I4I<;. The termination
from employment of pro=ect employees Isaac 8ioco, et al. is declared valid and
legal. Their a,ard of &ac$,ages computed from the date of their termination is set
aside.
8!"!g0-%( +' NLRC 2E9 SCRA :6;
FACTS:
Petitioner 0le=andro 5araguinot, Jr. maintains that he ,as employed &y
private respondents as part of the :lming cre,. 0&out 2 months later, he ,as
designated 0sst. <lectrician.
+e ,as then promoted to the ran$ of <lectrician. Petitioner Paulino <nero
claims that private respondents employed him as a mem&er of the shooting
cre,.
Petitioners1 tas$s consisted of loading, unloading and arranging movie
e9uipment in the shooting area as instructed &y the cameraman, returning
the e9uipment to Iiva 4ilms1 ,arehouse, assisting in the M:%ingN of the
Page 7E of 122
lighting system, and performing other tas$s that the cameraman and)or
director may assign.
Petitioners re9uested that private respondents ad=ust their salary in
accordance ,ith the minimum ,age la,.
Petitioners ,ere informed that 5r. Iic del Rosario ,ould agree to increase
their salary only if they signed a &lan$ employment contract.
0s petitioners refused to sign, private respondents forced <nero to go on
leave then refused to ta$e him &ac$ ,hen he reported for ,or$.
5ean,hile, 5araguinot ,as dropped from the company payroll &ut ,as
returned and again as$ed to sign a &lan$ employment contract, and ,hen he
still refused, private respondents terminated his services. Petitioners thus
sued for illegal dismissal &efore the 'a&or 0r&iter.
P"0+!(e "e'$%-de-(' claim that Iiva 4ilms is primarily engaged in the
distri&ution and e%hi&ition of movies, &ut not in the &usiness of ma$ing
moviesA in the same vein, private respondent Iic del Rosario is merely an
e%ecutive producer, i.e., the :nancier ,ho invests a certain sum of money for
the production of movies distri&uted and e%hi&ited &y III0A that they
contract persons called MproducersN -- also referred to as Massociate
producersN-- to MproduceN or ma$e movies for private respondentsA and that
petitioners are pro=ect employees of the associate producers ,ho, in turn, act
as independent contractors.
0s such, there is no employer-employee relationship &et,een petitioners and
private respondentsA that it ,as the associate producer of a :lm ,ho hired
5araguinot and he ,as released upon payment of his last salary, as his
services ,ere no longer neededA that <nero ,as hired for a movie, ,ent on
vacation and &y the time he reported &ac$ to ,or$ the movie had &een
completed.
The 'a&or 0r&iter found that@ -- complainants are the employees of the
respondents.
o The producer cannot &e considered as an independent contractor &ut
should &e considered only as a la&or-only contractor and as such, acts
as a mere agent of the real employer, the herein respondents.
o 0lso, it is an admitted fact that the complainants received their salaries
from the respondents.
o It is very clear also that complainants are doing activities ,hich are
necessary and essential to the &usiness of the respondents, that of
moviema$ing.
o 8omplainant 5araguinot ,or$ed as an electrician ,hile complainant
<nero ,or$ed as a cre, mem&er.
o +ence, the complainants ,ere illegally dismissed.
Private respondents appealed to the 6'R8.
In its decision, it said that@
Page 7; of 122
o 8omplainants ,ere hired for speci:c movie pro=ects and their
employment ,as co-terminus ,ith each movie pro=ect the
completion)termination of ,hich are pre-determined, such fact &eing
made $no,n to complainants at the time of their engagement.
o <ach shooting unit ,or$s on one movie pro=ect at a time. 0nd the ,or$
of the shooting units, ,hich ,or$ independently from each other, are
not continuous in nature &ut depends on the availa&ility of movie
pro=ects.
o 4urther sho,n &y respondents is the irregular ,or$ schedule of
complainants on a daily &asis. 5araguinot ,as supposed to report on
.7 0ugust !! &ut reported only on /. 0ugust !!, or a gap of 37
days.
o 8omplainant <nero ,or$ed on . #eptem&er !! and his ne%t
scheduled ,or$ing day ,as 3" #eptem&er !!, a gap of " days.
o The e%tremely irregular ,or$ing days and hours of complainants1 ,or$
e%plain the lump sum payment for complainants1 services for each
movie pro=ect.
o +ence, complainants ,ere paid a standard ,ee$ly salary regardless of
the num&er of ,or$ing days and hours they logged in.
o -ther,ise, if the principle of Mno ,or$ no payN ,as strictly applied,
complainants1 earnings for certain ,ee$s ,ould &e very negligi&le.
o Respondents also alleged that complainants ,ere not prohi&ited from
,or$ing ,ith other movie companies. The 6'R8, in reversing the 'a&or
0r&iter, then concluded that these circumstances, ta$en together,
indicated that complainants (herein petitioners) ,ere Mpro=ect
employees.N
Petitioners# Claim To support their claim that they ,ere regular (and not pro=ect)
employees of private respondents, petitioners cited their performance of activities
that ,ere necessary or desira&le in the usual trade or &usiness of private
respondents and added that their ,or$ ,as continuous, i.e., after one pro=ect ,as
completed they ,ere assigned to another pro=ect.
Respondents reiterate their version of the facts and stress that their evidence
supports the vie, that petitioners are pro=ect employeesA point to petitioners1
irregular ,or$ load and ,or$ scheduleA emphasiGe the 6'R81s :nding that
petitioners never controverted the allegation that they ,ere not prohi&ited from
,or$ing ,ith other movie companiesA and as$ that the facts &e vie,ed in the
conte%t of the peculiar characteristics of the movie industry.
ISSUE: ?hether or not the petitioners ,ho are ,or$ pool employees can &e
considered regular employees.
Page E0 of 122
HEL7: Les.
Private respondents e%pressly admitted that petitioners ,ere part of a ,or$
poolA and, ,hile petitioners ,ere initially hired possi&ly as pro=ect employees,
they had attained the status of regular employees in vie, of III01s conduct.
0 pro=ect employee or a mem&er of a ,or$ pool may ac9uire the status of a
regular employee ,hen the follo,ing concur@
) There is a continuous rehiring of pro=ect employees even after
cessation of a pro=ectA and
3) The tas$s performed &y the alleged Mpro=ect employeeN are
vital, necessary and indispensa&le to the usual &usiness or trade
of the employer.
+o,ever, the length of time during ,hich the employee ,as continuously re-
hired is not controlling, &ut merely serves as a &adge of regular employment.
The evidence on record sho,s that petitioner <nero ,as employed for a total
of t,o (3) years and engaged in at least eighteen (") pro=ects, ,hile
petitioner 5araguinot ,as employed for some three (/) years and ,or$ed on
at least t,enty-three (3/) pro=ects.
5oreover, as petitioners1 tas$s involved, among other chores, the loading,
unloading and arranging of movie e9uipment in the shooting area as
instructed &y the cameramen, returning the e9uipment to the Iiva 4ilms1
,arehouse, and assisting in the M:%ingN of the lighting system, it may not &e
gainsaid that these tas$s ,ere vital, necessary and indispensa&le to the usual
&usiness or trade of the employer.
0 ,or$ pool may e%ist although the ,or$ers in the pool do not receive
salaries and are free to see$ other employment during temporary &rea$s in
the &usiness, provided that the ,or$er shall &e availa&le ,hen called to
report for a pro=ect.
0lthough primarily applica&le to regular seasonal ,or$ers, this set-up can
li$e,ise &e applied to pro=ect ,or$ers insofar as the eDect of temporary
cessation of ,or$ is concerned.
This is &ene:cial to &oth the employer and employee for it prevents the
un=ust situation of Mcoddling la&or at the e%pense of capitalN and at the same
time ena&les the ,or$ers to attain the status of regular employees.
The cessation of construction activities at the end of every pro=ect is a
foreseea&le suspension of ,or$.
Page E1 of 122
-f course, no compensation can &e demanded from the employer &ecause
the stoppage of operations at the end of a pro=ect and &efore the start of a
ne, one is regular and e%pected &y &oth parties to the la&or relations.
#imilar to the case of regular seasonal employees, the employment relation is
not severed &y merely &eing suspended.
The employees are, strictly spea$ing, not separated from services &ut merely
on leave of a&sence ,ithout pay until they are reemployed.
Thus ,e cannot a>rm the argument that non-payment of salary or non-
inclusion in the payroll and the opportunity to see$ other employment denote
pro=ect employment.
-nce a pro=ect or ,or$ pool employee has &een@ () continuously, as
opposed to intermittently, re-hired &y the same employer for the same tas$s
or nature of tas$sA and (3) these tas$s are vital, necessary and indispensa&le
to the usual &usiness or trade of the employer, then the employee must &e
deemed a regular employee, pursuant to 0rticle 3". of the 'a&or 8ode and
=urisprudence.
To rule other,ise ,ould allo, circumvention of la&or la,s in industries not
falling ,ithin the am&it of Policy Instruction 6o. 3.);epartment -rder 6o. !,
hence allo,ing the prevention of ac9uisition of tenurial security &y pro=ect or
,or$ pool employees ,ho have already gained the status of regular
employees &y the employer1s conduct.
AGUILAR CORP. vs . NLRC
FACTS:
Respondent Romeo 0cedillo &egan ,or$ing for petitioner in 4e&ruary !"! as
a helper-electrician.
January !!3, he received a letter from petitioner informing him of his
severance from the company allegedly due to lac$ of availa&le pro=ects and
e%cess in the num&er of ,or$ers needed.
+e decided to :le a case for illegal dismissal &efore the 6'R8 after learning
that ne, ,or$ers ,ere &eing hired &y petitioner ,hile his re9uest to return to
,or$ ,as &eing ignored.
In reply, petitioner contended that its ,or$ers are hired on a contractual or
pro=ect &asis, and their employment is deemed terminated upon completion
of the pro=ect for ,hich they ,ere hired.
Page E2 of 122
4inally, petitioner argued that 0cedillo ,as not a regular employee &ecause
his employment ,as for a de:nite period and apparently made only to
augment the regular ,or$ force.
The '0 rendered =udgment declaring 0cedilloFs dismissal to &e illegal, :nding
him to &e a mem&er of the regular ,or$ pool. The 6'R8 a>rmed '01s
decision..
ISSUE: ?-6 respondent is a regular employee.
HEL7: 0cedillo is a regular employee.

?hat is clear is that 0cedilloFs ,or$ as a helper-electrician ,as an activity

Bnecessary or desira&le in the usual &usiness or trade Bof petitioner, since
refrigeration re9uires considera&le electrical ,or$. This necessity is further
&olstered &y the fact that petitioner ,ould hire him ane, after the completion
of each pro=ect, a practice ,hich persisted throughout the duration of his
tenure.

The petitioner admits that it maintains t,o sets of ,or$ers, vi;., those ,ho
are permanently employed and get paid regardless of the availa&ility of ,or$
and those ,ho are hired on a pro=ect &asis.

T)0' $"!/(0/e %. 3ee$0-g ! *%"3 $%%l ."()e" "e-de"' -(e-!,le

$e(0(0%-e"G' $%'0(0%- ()!( A/ed0ll% 0' -%( ! "egl!" e#$l%&ee.

0s ,e held in the case of Philippine 6ational 8onstruction 8orporation v .

6'R8,
B$em%ers of a wor& pool ."%# *)0/) ! /%-'("/(0%-
/%#$!-& d"!*' 0(' $"%2e/( e#$l%&ee', 0. /%-'0de"ed
e#$l%&ee' %. ()e /%-'("/(0%- /%#$!-& *)0le 0- ()e *%"3
$%%l, are non'pro(ect emplo)ees or emplo)ees for an
indefnite period* I. ()e& !"e e#$l%&ed 0- ! $!"(0/l!"
$"%2e/(, ()e /%#$le(0%- %. ()e $"%2e/( %" !-& $)!'e
()e"e%. *0ll -%( #e!- 'e+e"!-/e %. D()eF e#$l%&e"-
e#$l%&ee "el!(0%-')0$.
AAESCO CONSTRUCTION AN7 7EVT CORP V. RA8IREI 9E7 SCRA ; D2006F
Page E6 of 122
ISSUE: ?-6 the respondents ,ere regular employees.
HEL7: Les.
In determining the nature of one1s employment, length of service is not a
controlling factor.
The #8 ruled that respondents ,ere regular employees &ut not for the
reasons given &y the '0 (,hich &oth the 6'R8 and the 80 a>rmed).
8iting Palomar, et al. v. NLRC, the #8 held that contrary to the dis9uisitions of
the '0, employees (li$e respondents) ,ho ,or$ under diDerent pro=ect
employment contracts for several years do not automatically &ecome regular
employeesA they can remain as pro=ect employees regardless of the num&er
of years they ,or$.
'ength of time is not a controlling factor in determining the nature of one1s
employment.
5oreover, employees ,ho are mem&ers of a M,or$ poolN from ,hich a
company (li$e petitioner corp.) dra,s ,or$ers for deployment to its diDerent
pro=ects do not &ecome regular employees &y reason of that fact alone.
The 8ourt has enunciated in the cases of Ra(cor +ircontrol S(stems, nc. v.
NLRC, and +L=-)=CP v. NLRC, that mem&ers of a R*%"3 $%%lS can either &e
pro=ect employees or regular employees@
The principal test for determining ,hether employees are Mpro=ect
employeesN or Mregular employeesN is ,hether they are assigned to carry out
a speci:c pro=ect or underta$ing, the duration and scope of ,hich are
speci:ed at the time they are engaged for that pro=ect. #uch duration, as ,ell
as the particular ,or$)service to &e performed, is de:ned in an employment
agreement and is made clear to the employees at the time of hiring.
Petitioners did not have that $ind of agreement ,ith respondents.
6either did they inform the respondents of the nature of their ,or$ at the
time of hiring. +ence, for failure of petitioners to su&stantiate their claim that
respondents ,ere pro=ect employees, ,e are constrained to declare them as
regular employees.
4urthermore, petitioners cannot &elatedly argue that respondents continue to
&e their employees (so as to escape lia&ility for illegal dismissal).
Eefore the '0, petitioners staunchly postured that respondents ,ere only
Mpro=ect employeesN ,hose employment tenure ,as coterminous ,ith the
pro=ects they ,ere assigned to.
+o,ever, &efore the 80, they too$ a diDerent stance &y insisting that
respondents continued to &e their employees.
Petitioners1 inconsistent and conJicting positions on their true relation ,ith
respondents ma$e it all the more evident that the latter ,ere indeed their
regular employees.
Page E9 of 122
FER7INAN7 PALO8ARES \ TEO7ULO 8UTIA vs NLRC \ NAT4L STEEL CORP .
FACTS:
Petitioners 4erdinand Palomares and Teodulo 5utia ,ere hired &y respondent
6#8 &y virtue of contracts of employment for its 4ive Lear <%pansion Program
or 4L<P, Phase I and II-0, for varying lengths of time.
Petitioners, along ,ith other employees, petitioned for regulariGation, ,age
diDerential, 8E0 coverage and other &ene:ts.
-n 2)3!)!!3, the 'a&or 0r&iter ruled in favor of petitioners and ,ere
ad=udged as regular employees of the corporation.
-n appeal, the 6'R8 reversed the :ndings of the 'a&or 0r&iter, on the
account that petitioners ,ere pro=ect employees and that their assumption of
regular =o&s ,ere mainly due to pea$loads or the a&sence of regular
employees during the latter1s temporary leave.
0fter their motion for reconsideration ,as denied, petitioners :led this
petition.
Petitioner contends that contracted employees should, &y operation of la,,
&e considered regular employees ,ith regard to functions and duration of
,or$.
-n the other hand, 6#8 maintains that petitioners are mere pro=ect
employees, engaged to ,or$ on the latter1s 4L<P Phases I and II-0, hence,
dismissi&le upon the e%piration of every particular pro=ect.
ISSUE: ?hether or not petitioners should &e considered regular employees of the
company.
Held: NO.
The principal test for determining ,hether an employee is a pro=ect employee
and not a regular employee is ,hether he ,as assigned (% /!""& %( !
'$e/01/ $"%2e/( or -de"(!30-g, ()e d"!(0%- !-d '/%$e %. *)0/) *e"e
'$e/01ed !( ()e (0#e )e *!' e-g!ged .%" ()!( $"%2e/(.
It should &e noted that there ,ere intervals in petitioners1 respective
employment contracts ,ith 6#8, thus &olstering the latter1s position that,
indeed, petitioners are pro=ect employees.
S0-/e 0(' *%"3 de$e-d' %- !+!0l!,0l0(& %. '/) /%-("!/(' %" $"%2e/(',
-e/e''!"0l& ()e e#$l%&#e-( %. 0(' *%"3 .%"/e 0' -%( $e"#!-e-( ,(
Page E: of 122
/%-(e"#0-%' *0() ()e $"%2e/(' (% *)0/) ()e& !"e !''0g-ed !-d ."%#
*)%'e $!&"%ll' ()e& !"e $!0d.
It ,ould &e e%tremely &urdensome for their employer to retain them as
permanent employees and pay them ,ages even if there are no pro=ects to
,or$ on.
T)e .!/( ()!( $e(0(0%-e"' *%"3ed .%" NSC -de" d0Le"e-( $"%2e/(
e#$l%&#e-( /%-("!/(' .%" 'e+e"!l &e!"' CANNOT ,e #!de ! ,!'0' (%
/%-'0de" ()e# !' "egl!" e#$l%&ee', .%" ()e& "e#!0- $"%2e/(
e#$l%&ee' "eg!"dle'' %. ()e -#,e" %. $"%2e/(' 0- *)0/) ()e& )!+e
*%"3ed.
Eased from the facts, petitioners ,ere employed for a speci:c pro=ect or
pro=ects underta$en &y 6#8 for varying lengths of time.
The records sho, that petitioners ,ere hired to ,or$ on pro=ects for 4L<P I
and II-0.
-n account of the e%piration of their contracts of employment and)or pro=ect
completion, petitioners ,ere terminated from their employment.
They ,ere, ho,ever, rehired for other component pro=ects of the 4L<P
&ecause they ,ere 9uali:ed.
Thus, the 8ourt is convinced that petitioners ,ere engaged only to augment
the ,or$force of 6#8 for its aforesaid e%pansion program.
<ven if petitioners ,ere repeatedly and successively re-hired on the &asis of a
contract of employment for more than one year, they cannot &e considered
regulariGed.
Le-g() %. 'e"+0/e 0' -%( ()e /%-("%ll0-g de(e"#0-!-( %. ()e
e#$l%&#e-( (e-"e %. ! $"%2e/( e#$l%&ee.
0s stated earlier, 0( 0' ,!'ed %- *)e()e" %" -%( ()e e#$l%&#e-( )!'
,ee- 1?ed .%" ! '$e/01/ $"%2e/( %" -de"(!30-g, ()e /%#$le(0%- %.
*)0/) )!' ,ee- de(e"#0-ed !( ()e (0#e %. ()e e-g!ge#e-( %. ()e
e#$l%&ee.
The second paragraph of 0rticle 3"., ,hich provides that an employee ,ho
has rendered service for at least year, shall &e considered a regular
employee, is not applica&le &ecause pertains to casual employees and not to
pro=ect employees such as petitioners.
Regulation of manpo,er &y the company clearly falls ,ithin management
prerogative. <ven as the la, is solicitous of the ,elfare of employees, it must
also protect the right of an employer to e%ercise ,hat are clearly
management prerogatives, su&=ect to the constitutional re9uirement for the
protection of la&or and the promotion of social =ustice ,hich tilts the scales of
=ustice, ,henever there is dou&t, in favor of the ,or$er.
I- ()e /!'e !( ,!", *e /%-/lde ()!( NSC !/(ed *0()0- ()e $!"!#e(e"'
%. ! +!l0d e?e"/0'e %. #!-!ge#e-( $"e"%g!(0+e.
Page E6 of 122
7ISPOSITION: The petition is ;I#5I##<;. The decision and resolution of 6'R8 are
044IR5<;.
F0l0$0-!' P"e-F!,"0/!(ed A0ld0-g S&'(e#' I-/ +' Pe-(e 9:6 SCRAT E20
FACTS:
Respondent Puente#s contention@
That he &egan ,or$ing ,ith Petitioner 4ilsystems, Inc., a corporation engaged
in construction &usiness, on June 3, !"!A that he ,as initially hired &y
petitioner company as an Yinstaller1A that he ,as later promoted to mo&ile
crane operator and ,as stationed at the company premises in TueGon 8ityA
that his ,or$ ,as not dependent on the completion or termination of any
pro=ectA that since his ,or$ ,as not dependent on any pro=ect, his
employment ,ith the 4ilsystems ,as continuous and ,ithout interruption for
the past . yearsA that on -ct. , !!!, he ,as dismissed from his
employment allegedly &ecause he ,as a pro=ect employee.
+e :led complaint for illegal dismissal against the petitioner.
Petitioner'compan)#s claims:
That complainant ,as hired as a pro=ect employee in the company1s various
pro=ectsA that his employment contracts sho,ed that he ,as a pro=ect ,or$er
,ith speci:c pro=ect assignmentsA that after completion of each pro=ect
assignment, his employment ,as li$e,ise terminated and the same ,as
correspondingly reported to the ;-'<.
'a&or 0r&iter dismissed complaint.
6'R8 a>rmed.
80 reversed '0 and 6'R8 rulings holding that respondent ,as a regular
employee of petitioners.
ISSUE: ?hether or not respondent Roger Puente is a pro=ect employee.
HEL7: Respondent Roger Puente is a pro=ect employee.
Provisions of ;epartment (of 'a&or and <mployment) -rder 6o. !, #eries of
!!/, ma$e it clear that a pro=ect employee is one ,hose Memployment has
&een :%ed for a speci:c pro=ect or underta$ing the completion or termination
of ,hich has &een determined at the time of the engagement of the
employee or ,here the ,or$ or services to &e performed is seasonal in nature
and the employment is for the duration of the season.N
The contracts of employment of Puente attest to the fact that he ,as hired
for speci:c pro=ects. +is employment ,as coterminous ,ith the completion of
the pro=ects for ,hich he had &een hired.
Page E7 of 122
Those contracts e%pressly provided that his tenure of employment depended
on the duration of any phase of the pro=ect or on the completion of the
construction pro=ects.
4urthermore, petitioners regularly su&mitted to the la&or department reports
of the termination of services of pro=ect ,or$ers.
#uch compliance ,ith the reportorial re9uirement con:rms that respondent
,as a pro=ect employee.
Respondent1s employment contract provides as follo,s@
M% % % employment, under this contract is good only for the
duration of the pro=ect unless employee1s services is terminated
due to completion of the phase of ,or$)section[
0lthough the employment contract did not state a particular date, it did
specify that the termination of the parties1 employment relationship ,as to
&e on a Mday certainN -- the day ,hen the phase of ,or$ termed M'ifting \
+auling of 5aterialsN for the M?orld 4inance PlaGaN pro=ect ,ould &e
completed.
Thus, respondent cannot &e considered to have &een a regular employee.
+e ,as a pro=ect employee.
MThe length of service of a pro=ect employee is not the controlling test of
employment tenure &ut ,hether or not Ythe employment has &een :%ed for a
speci:c pro=ect or underta$ing the completion or termination of ,hich has
&een determined at the time of the engagement of the employee.1N
That he ,as employed ,ith Petitioner 4ilsystems for ten years in various
pro=ects did not ipso facto ma$e him a regular employee, considering that the
de:nition of regular employment in 0rticle 3". of the 'a&or 8ode ma$es a
speci:c e%ception ,ith respect to pro=ect employment.
The mere rehiring of respondent on a pro=ect-to-pro=ect &asis did not confer
upon him regular employment status.
MThe practice ,as dictated &y the practical consideration that e%perienced
construction ,or$ers are more preferred.N
It did not change his status as a pro=ect employee.
PNOC-ENERGY 7EVELOP8ENT CORP. vs. NLRC
FACTS:
Petitioner P6-8-<nergy ;evelopment 8orporation underta$es several
pro=ects.
Page EE of 122
<ach pro=ect undergoes the stages of e%ploration, development, and
utiliGation or production.
Petitioner1s Geothermal Production 4ield in 6egros -riental is divided into t,o
phases@ Palinpinon I (P0' I) and Palinpinon II (P0' II). To augment its
manpo,er re9uirement in the development of P0' II, petitioner hired the
respondents.
The termination)e%piration of their employment ,ere speci:ed in their initial
employment contracts, ,hich, ho,ever, ,ere rene,ed and e%tended on their
respective e%piry dates.
In !!", petitioner su&mitted reports to the ;-'< stating that si% of its
employees ,ere &eing terminated.
Petitioner furnished the respondents notices of termination, stating that they
,ere &eing terminated due to the su&stantial completion of the civil ,or$s
phase of P0' II.
Respondents, :led &efore 6'R8 a complaint for illegal dismissal against
petitioner.
The 'a&or 0r&iter ruled that the employer-employee relationship &et,een the
parties ,as severed upon the e%piration of the respective contracts of
respondents and the completion of the pro=ects concerned.
The 6'R8 reversed the decision of the 'a&or 0r&iter. The 6'R8 ratiocinated
that respondents ,ere regular non-pro=ect employees. The 80 044IR5<; the
decision of the 6'R8.
ISSUE: ?hether respondents ,ere pro=ect employees or regular employees.
HEL7: Re'$%-de-(' !"e "egl!" e#$l%&ee'.
0nother factor ,hich militates against petitioner1s insistence that the services
of respondents ,ere terminated &ecause the pro=ects for ,hich they ,ere
hired had &een completed is the fact that "e'$%-de-('4 /%-("!/(' %.
e#$l%&#e-( *e"e e?(e-ded ! -#,e" %. (0#e' .%" d0Le"e-( %" -e*
$"%2e/('.
It must &e stressed that a contract that misuses a purported :%ed-term
employment to &loc$ the ac9uisition of tenure &y employees deserves to &e
struc$ do,n for &eing contrary to la,, morals, good customs, pu&lic order
and pu&lic policy.
I- F0l0$0-!' P"e-F!,"0/!(ed A0ld0-g S&'(e#' DF0l'&'(e#'F, I-/. +.
Pe-(e, ()e C%"( "led ()!( H()e le-g() %. 'e"+0/e %. ! $"%2e/(
e#$l%&ee 0' -%( ()e /%-("%ll0-g (e'( %. e#$l%&#e-( (e-"e ,(
*)e()e" %" -%( ()e e#$l%&#e-( )!' ,ee- 1?ed .%" ! '$e/01/ $"%2e/(
%" -de"(!30-g ()e /%#$le(0%- %" (e"#0-!(0%- %. *)0/) )!' ,ee-
de(e"#0-ed !( ()e (0#e %. ()e e-g!ge#e-( %. ()e e#$l%&ee.H
Page E; of 122
Indeed, ,hile le-g() %. (0#e may not &e the controlling test for pro=ect
employment, it 0' +0(!l 0- de(e"#0-0-g 0. ()e e#$l%&ee *!' )0"ed .%" !
'$e/01/ -de"(!30-g %" (!'3ed (% $e".%"# .-/(0%-' +0(!l, -e/e''!"&
!-d 0-d0'$e-'!,le (% ()e '!l ,'0-e'' %" ("!de %. ()e e#$l%&e".
+ere, respondents had &een pro=ect employees several times over. T)e0"
e#$l%&#e-( /e!'ed (% ,e /%(e"#0-%' *0() '$e/01/ $"%2e/(' *)e-
()e& *e"e "e$e!(edl& "e-)0"ed ,& $e(0(0%-e".
?here the employment of pro=ect employees is e%tended long after the
supposed pro=ect has &een :nished, ()e e#$l%&ee' !"e "e#%+ed ."%#
()e '/%$e %. $"%2e/( e#$l%&ee' !-d !"e /%-'0de"ed "egl!"
e#$l%&ee'.
0s regular ,or$ers, respondents are entitled to security of tenure under 0rticle 3(!
of the 'a&or 8ode and can only &e dismissed for a =ust or authoriGed cause.
A.8. ORETA U CO A. NLRC 176 SCRA 21E D1;E;F
80#C0' <5P'-L<<#-60TCR< -4 ?-RZ
FACTS:
Private respondent Grulla ,as engaged &y <ngineering 8onstruction and
Industrial ;evelopment 8ompany (<6;<8-) through 0.5. -reta and 8o., Inc.
as a carpenter in its pro=ect in Jeddah, #audi 0ra&ia.
The contract of employment, ,hich ,as entered into on June , !". ,as
for a period of 3 months. Respondent Grulla left the Philippines for Jeddah,
#audi 0ra&ia on 0ugust 7, !"..
-n 0ugust 7, !"., Grulla met an accident ,hich fractured his lum&ar
verte&rae ,hile ,or$ing at the =o&site.
+e ,as rushed to the 6e, Jeddah 8linic and ,as con:ned there for 3 days.
-n 0ugust 3(, !"., Grulla ,as discharged from the hospital and ,as told
that he could resume his normal duties after undergoing physical therapy for
t,o ,ee$s.
-n #eptem&er ", !"., respondent Grulla reported &ac$ to his Pro=ect
5anager and presented to the latter a medical certi:cate declaring the
former already physically :t for ,or$.
#ince then, he stated ,or$ing again until he received a notice of termination
of his employment on -cto&er !, !"..
Grulla :led a complaint for illegal dismissal, recovery of medical &ene:ts,
unpaid ,ages for the une%pired ten (.) months of his contract and the sum
Page ;0 of 122
of P,...... as reim&ursement of medical e%penses against 0.5. -reta and
8ompany, Inc. and <6;<8- ,ith the P-<0.
The petitioner 0.5. -reta and 8ompany, Inc. and <6;<8- :led their ans,er
and alleged that the contract of employment entered into &et,een
petitioners and Grulla provides, as one of the grounds for termination of
employment, violation of the rules and regulations promulgated &y the
contractorA and that Grulla ,as dismissed &ecause he has not performed his
duties satisfactorily ,ithin the pro&ationary period of three months.
P-<0 held that complainantFs dismissal ,as illegal and ,arrants the a,ard of
his ,ages for the une%pired portion of the contract.
Petitioner appealed from the adverse decision to the respondent 8ommission.
Respondent 8ommission dismissed the appeal for lac$ of merit and a>rmed
in toto the decision of the P-<0.
Petitioner contends that the respondent Grulla ,as validly dismissed &ecause
the latter ,as still a pro&ationary employeeA and that his dismissal ,as
=usti:ed on the &asis of his unsatisfactory performance of his =o& during the
pro&ationary period.
ISSUE: ?-6 Grulla ,as a regular employee.
HEL7:
Policy Instructions 6o. 3 of the then 5inister of 'a&or (6o, #ecretary of
'a&or and <mployment) ,hich provides@
P; "7. has de:ned the concept of regular and casual
employment. ?hat determines regularity or casualness is not
employment contract, ,ritten or other,ise, &ut the nature of the
=o&. If the =o& is usually necessary or desira&le to the main
&usiness of the employer, the employment is regular[
Petitioner admitted that respondent Grulla ,as employed in the company as
carpenter for a period of t,elve (3) months &efore he ,as dismissed on
-cto&er !, !"..
0 perusal of the employment contract reveals that although the period of
employment of respondent Grulla is t,elve (3) months, the contract is
rene,a&le su&=ect to future agreements of the parties.
It is clear from the employment contract that the respondent Grulla ,as hired
&y the company as a regular employee and not =ust mere pro&ationary
employee.
KI8AERLY vs 7RILON
Page ;1 of 122
FACTS:
Zim&erly-8lar$ Philippines, Inc. e%ecuted a /-year 8E0 ,ith Cnited Zim&erly-
8lar$ <mployees Cnion-Philippine Transport and General ?or$ersF
-rganiGation (CZ8<C-PTG?-) ,hich e%pired on *)/.)!"*.
?ithin the *.-day freedom period prior to the e%piration of and during the
negotiations for the rene,al of the aforementioned 8E0, some mem&ers of
the &argaining unit formed another union called BZim&erly Independent 'a&or
Cnion for #olidarity, 0ctivism and 6ationalism--rganiGed 'a&or 0ssociation in
'ine Industries and 0griculture (ZI'C#06--'0'I0).B
-n 2)3)!"*, ZI'C#06--'0'I0 :led a petition for certi:cation election in
5inistry of 'a&or and <mployment (5-'<).
ZI5E<R'L and CZ8<C-PTG?- did not o&=ect to the holding of a certi:cation
election &ut o&=ected to the inclusion of the so-called contractual ,or$ers
,hose employment ,ith ZI5E<R'L ,as coursed through an independent
contractor, Ran$ 5anpo,er 8ompany (R06Z for short), as among the
9uali:ed voters.
-n June 3, !"*, 5ed-0r&iter Eonifacio I. 5arasigan issued an order ,hich
declared the follo,ing as eligi&le to vote in the certi:cation election@
o Regular ran$-and-:le la&orers)employees of the respondent company
o 8asuals ,ho have ,or$ed at least * months
o 8ontractual employees ,ho are allegedly in the employ of an
independent contractor and ,ho have also ,or$ed for at least *
months
;uring the pre-election conference, *2 casual ,or$ers ,ere challenged &y
ZI5E<R'L and CZ8<C-PTG?- on the ground that they are not employees of
ZI5E<R'L &ut of R06Z.
It ,as agreed &y all the parties that the *2 voters shall &e allo,ed to cast
their votes &ut that their &allots shall &e segregated and su&=ect to challenge
proceedings. 0fter the elections, CZ8<C-PTG?- ,on over ZI'C#06--'0'I0 &y
3. votes.
This count considered the votes of the *2 employees as separate.
In a case regarding the status of the *2 employees in relation to the
certi:cation election, it ,as held &y med-ar&iter #ancheG that@
o 8asual employees not performing =anitorial and yard maintenance
services ,ere deemed la&or-only contractuals and since la&or-only
contracting is prohi&ited, such employees ,ere held to have attained
the status of regular employees, the regulariGation &eing eDective as
of the date of the decision
Page ;2 of 122
o CZ8<C-PTG?-, having garnered more votes than ZI'C#06--'0'I0,
,as certi:ed as the e%clusive &argaining representative of Zl5E<R'LFs
employees
#ince the mem&ers ,ere only considered regular at the time of the decision,
their votes ,ere not re-considered as regards the election.
In the meantime, ZI5E<R'L and CZ8<C-PTG?- continued ,ith the
negotiations on the ne, 8E0 and a ne, 8E0 ,as concluded and rati:ed &y
22. out of 7( mem&ers of the &argaining unit.
Thereafter, ZI5E<R'L--'0'I0 :led for a TR-, on ,hich the court granted, on
the 8E0 and included the 9uestion of the status of the *2 mem&ers in
9uestion.
ISSUE: ?hether or not the *2 employees &ecame regular employees of ZI5E<R'L
at the time of the certi:cation election.
HEL7: YES.
0rticle 3". of the 'a&or 8ode provides for t,o $inds of regular employees@
Those ,ho are engaged to perform activities ,hich are usually necessary or
desira&le in the usual &usiness or trade of the employerA and
Those ,ho have rendered at least one year of service, ,hether continuous or
&ro$en, ,ith respect to the activity in ,hich they are employed
The individual petitioners herein ,ho have &een ad=udged to &e regular
employees &y la, fall under the second category.
These are the mechanics, electricians, machinists, machine shop helpers,
,arehouse helpers, painters, carpenters, pipe:tters and masons.
It is not disputed that these ,or$ers have &een in the employ of ZI5E<R'L for
more than one year at the time of the :ling of the petition for certi:cation
election &y ZI'C#06--'0'I0.
-,ing to their length of service ,ith the company, these ,or$ers &ecame
regular employees, &y operation of la,, one year after they ,ere employed
&y ZI5E<R'L through R06Z.
?hile the actual regulariGation of these employees entails the mechanical act
of issuing regular appointment papers and compliance ,ith such other
operating procedures as may &e adopted &y the employer, it is more in
$eeping ,ith the intent and spirit of the la, to rule that the status of "egl!"
e#$l%&#e-( !((!/)e' (% ()e /!'!l *%"3e" %- ()e d!& 0##ed0!(el&
!.(e" ()e e-d %. )0' 1"'( &e!" %. 'e"+0/e.
Page ;6 of 122
The la, is e%plicit. A' l%-g !' ()e e#$l%&ee )!' "e-de"ed !( le!'( %-e
&e!" %. 'e"+0/e, )e ,e/%#e' ! "egl!" e#$l%&ee *0() "e'$e/( (% ()e
!/(0+0(& 0- *)0/) )e 0' e#$l%&ed.
The la, does not provide the 9uali:cation that the employee must :rst &e
issued a regular appointment or must :rst &e formally declared as such
&efore he can ac9uire a regular status.
-&viously, ,here the la, does not distinguish, no distinction should &e
dra,n.
-n the &asis of the foregoing circumstances, and as a conse9uence of their
status as regular employees, those ,or$ers not perforce =anitorial and yard
maintenance service ,ere performance entitled to the payment of salary
diDerential, cost of living allo,ance, /th month pay, and such other &ene:ts
e%tended to regular employees under the 8E0, from the day immediately
follo,ing their :rst year of service in the company.
These regular employees are li$e,ise entitled to vote in the certi:cation
election held in ())!"*.
8onse9uently, the votes cast &y those employees not performing =anitorial
and yard maintenance service, ,hich forms part of the *2 challenged votes,
should &e opened, counted and considered for the purpose of determining
the certi:ed &argaining representative.
S!- 80gel C%"$ +' A,!ll! 961 SCRA 6;2
FACTS:
Petitioner #an 5iguel 8orporation (#58) and #unJo,er 5ulti-Purpose
8ooperative (#unJo,er), entered into a one-year 8ontract of #ervices
commencing on January , !!/, to &e rene,ed on a month to month &asis
until terminated &y either party.
The pertinent provisions of the contract are@
. The cooperative agrees and underta$es to perform and)or
provide for the company, on a non-e%clusive &asis for a period of
one year the follo,ing services for the Eacolod #hrimp
Processing Plant@
0. 5essengerial)Janitorial
E. #hrimp +arvesting)Receiving
8. #anitation)?ashing)8old #torage
3. There is no employer-employee relationship &et,een the
company and the cooperative, or the cooperative and any of its
mem&ers, or the company and any mem&ers of the cooperative.
Page ;9 of 122
The cooperative is an association of self-employed mem&ers, an independent
contractor, and an entrepreneur.
It is su&=ect to the control and direction of the company only as to the result
to &e accomplished &y the ,or$ or services herein speci:ed, and not as to
the ,or$ herein contracted.
The cooperative and its mem&ers recogniGe that it is ta$ing a &usiness ris$ in
accepting a :%ed service fee to provide the services contracted for and its
realiGation of pro:t or loss from its underta$ing, in relation to all its other
underta$ings, ,ill depend on ho, e>ciently it deploys and :elds its mem&ers
and ho, they perform the ,or$ and manage its operations.
Pursuant to the contract, #unJo,er engaged private respondents to, as they
did, render services at #581s Eacolod #hrimp Processing Plant at #ta. 4e,
Eacolod 8ity.
The contract ,as deemed rene,ed &y the parties every month after its
e%piration on January , !!2 and private respondents continued to perform
their tas$s until #eptem&er , !!7.
In July !!7, private respondents :led a complaint &efore the 6'R8, praying
to &e declared as regular employees of #58, ,ith claims for recovery of all
&ene:ts and privileges en=oyed &y #58 ran$ and :le employees.
Private respondents su&se9uently :led on #eptem&er 37, !!7 an 0mended
8omplaint to include illegal dismissal as additional cause of action follo,ing
#581s closure of its Eacolod #hrimp Processing Plant on #eptem&er 7, !!7
,hich resulted in the termination of their services.
#58 :led a 5otion for 'eave to 4ile 0ttached Third Party 8omplaint to
implead #unJo,er as Third Party ;efendant ,hich, granted &y 'a&or.
In the meantime, #58 :led &efore the Regional ->ce at Iloilo 8ity of the
;-'< a 6otice of 8losure of its a9uaculture operations eDective on even date
citing serious &usiness losses.
'a&or 0r&iter dismissed private respondents1 complaint for lac$ of merit.
Private respondents appealed to the 6'R8.
6'R8 dismissed the appeal for lac$ of merit, it :nding that third party
respondent #unJo,er ,as an independent contractor in light of its
o&servation that Min all the activities of private respondents, they ,ere under
the actual direction, control and supervision of third party respondent
#unJo,er, as ,ell as the payment of ,ages, and po,er of dismissal.
The 80 reversed the 6'R8 decision and accordingly found for private
respondents. Justifying its reversal of the :ndings of the la&or ar&iter and the
6'R8, the appellate court reasoned@
o 0lthough the terms of the non-e%clusive contract of service &et,een
#58 and V#unJo,erW sho,ed a clear intent to a&stain from esta&lishing
an employer-employee relationship &et,een #58 and V#unJo,erW or
the latter1s mem&ers, the e%tent to ,hich the parties successfully
Page ;: of 122
realiGed this intent in the light of the applica&le la, is the controlling
factor in determining the real and actual relationship &et,een or
among the parties.
o There &eing a :nding of Mla&or-onlyN contracting, lia&ility must &e
shouldered either &y #58 or V#unJo,erW or shared &y &oth. #58
ho,ever should &e held solely lia&le for V#unJo,erW &ecame non-
e%istent ,ith the closure of the a9uaculture &usiness of #58.
ISSUE: ?hether or not the respondents are regular employee of #58.
HEL7: Respondents are regular employee of #58.
#ince private respondents ,ho ,ere engaged in shrimp processing performed
tas$s usually necessary or desira&le in the a9uaculture &usiness of #58, they
should &e deemed regular employees of the latter and as such are entitled to
all the &ene:ts and rights appurtenant to regular employment.
They should thus &e a,arded diDerential pay corresponding to the diDerence
&et,een the ,ages and &ene:ts given them and those accorded #581s other
regular employees.
Those performing =anitorial and messengerial services ho,ever ac9uired
regular status only after rendering one-year service pursuant to 0rticle 3". of
the 'a&or 8ode.
0lthough =anitorial and messengerial services are considered directly related
to the a9uaculture &usiness of #58, they are deemed unnecessary in the
conduct of its principal &usinessA
The la, of course provides for t,o $inds of regular employees, namely@ ()
those ,ho are engaged to perform activities ,hich are usually necessary or
desira&le in the usual &usiness or trade of the employerA and (3) those ,ho
have rendered at least one year of service, ,hether continuous or &ro$en,
,ith respect to the activity in ,hich they are employed.
0s for those of private respondents ,ho ,ere engaged in =anitorial and
messengerial tas$s, they fall under the second category and are thus entitled
to diDerential pay and &ene:ts e%tended to other #58 regular employees
from the day immediately follo,ing their :rst year of service.
INTEGRATE7 CONTRACTOR AN7 PLU8AING BORKS, INC., +'. NLRC
FACTS:
Petitioner is a plum&ing contractor.
Its &usiness depends on the num&er and fre9uency of the pro=ects it is a&le to
contract ,ith its clients.
Page ;6 of 122
Respondent #olon ,or$ed for petitioner. +is employment records sho,ed that
$"0+!(e "e'$%-de-( )!d ,ee- ! $"%2e/( e#$l%&ee 'e+e"!l (0#e' ."%#
7e/. 1;;9 V O!-. 1;;E.
In 4e&. !!", he ,as informed &y the ,arehouseman that the main o>ce had
instructed them to tell him it ,as his last day of ,or$ as he had &een
terminated.
?hen respondent ,ent to petitioner1s o>ce to sign a clearance, he had
second thoughts and refused to sign the clearance ,hen he read the
clearance indicating he had resigned.
+e :led a complaint alleging that he ,as illegally dismissed ,ithout =ust
cause and ,ithout due process.
The '0 ruled that private respondent ,as a regular employee.
The 6'R8 044IR5<; '01s decision. Petitioner :led a 5R in the 80 &ut ,as
denied.
ISSUE: ?hether the respondent is a pro=ect employee of the petitioner or a regular
employee.
HEL7:
The test to determine ,hether employment is regular or not is the reasona&le
connection &et,een the particular activity performed &y the employee in
relation to the usual &usiness or trade of the employer.
0lso, 0. ()e e#$l%&ee )!' ,ee- $e".%"#0-g ()e 2%, .%" !( le!'( %-e
&e!", e+e- 0. ()e $e".%"#!-/e 0' -%( /%-(0-%' %" #e"el&
0-(e"#0((e-(, ()e l!* dee#' ()e "e$e!(ed !-d /%-(0-0-g -eed .%" 0('
$e".%"#!-/e !' '5/0e-( e+0de-/e %. ()e -e/e''0(&, 0. -%(
0-d0'$e-'!,0l0(& %. ()!( !/(0+0(& (% ()e ,'0-e''.
Thus, ,e held that *)e"e ()e e#$l%&#e-( %. $"%2e/( e#$l%&ee' 0'
e?(e-ded l%-g !.(e" ()e '$$%'ed $"%2e/( )!' ,ee- 1-0')ed, ()e
e#$l%&ee' !"e "e#%+ed ."%# ()e '/%$e %. $"%2e/( e#$l%&ee' !-d !"e
/%-'0de"ed "egl!" e#$l%&ee'.
?hile length of time may not &e the controlling test for pro=ect employment,
it is vital in determining if the employee ,as hired for a speci:c underta$ing
or tas$ed to perform functions vital, necessary and indispensa&le to the usual
&usiness or trade of the employer.
He"e, $"0+!(e "e'$%-de-( )!d ,ee- ! $"%2e/( e#$l%&ee 'e+e"!l (0#e'
%+e". H0' e#$l%&#e-( /e!'ed (% ,e /%(e"#0-%' *0() '$e/01/
$"%2e/(' *)e- )e *!' "e$e!(edl& "e-)0"ed de (% ()e de#!-d' %.
$e(0(0%-e"4' ,'0-e''.
?here from the circumstances it is apparent that periods have &een imposed
to preclude the ac9uisition of tenurial security &y the employee, they should
Page ;7 of 122
&e struc$ do,n as contrary to pu&lic policy, morals, good customs or pu&lic
order.
ARENT SCHOOL V. IA8ORA 1E1 SCRA 702 D1;;0F
FACTS:
0legre ,as athletic director at Erent, at a yearly compensation of P3.,....
+er contract :%ed a speci:c term of 7 years for its e%istence, from July, !(,
to July, !(*.
#u&se9uent su&sidiary agreements in 5arch !(/, 0ugust !(/, and #ept.
!(2 reiterated the same terms and conditions, including the e%piry date, as
those contained in the original contract of July, !(.
/ months &efore the e%piration of the stipulated period, in 0pril !(*, 0legre
,as given a copy of the report :led &y Erent ,ith ;-'< advising of the
termination of his services, eDective July *, !(*. The stated ground for
termination ,as Mcompletion of contract, e%piration of the de:nite period of
employment.N
0legre protested the announced termination of his employment. +e argued
that although his contract did stipulate that the same ,ould terminate on July
(, !(*, since his his emplo(er, and his emplo(ment had lasted &or *ve
(ears, he had ac9uired the status of regular employee and could not &e
removed e%cept for valid cause.
The employment contract of !( ,as e%ecuted ,hen the 'a&or 8ode of the
Philippines had not yet &een promulgated, ,hich came into eDect some /
years after the perfection of the contract.
ISSUE: ?-6 the provisions of the 'a&or 8ode (regarding pro&ationary)regular
employees) have anathematiGed M:%ed period employmentN or employment
for a term.
HEL7: 6o.
Eefore the 'a&or 8ode, there ,as no dou&t a&out the validity of term
employment. It ,as impliedly &ut clearly recogniGed &y the Termination Pay
la,, R0 .73.
Eut ,here no such intent to circumvent the la, is sho,n, ,here the reason
for the la, does not e%ist, e.g., ,here it is indeed the employee himself ,ho
insists upon a period or ,here the nature of the engagement is such that,
,ithout &eing seasonal or for a speci:c pro=ect, a de:nite date of termination
is a sine "ua non, ,ould an agreement :%ing a period &e essentially evil or
illicit, therefore anathema]
Page ;E of 122
?ould such an agreement come ,ithin the scope of 0rt 3". ,hich admittedly
,as enacted Bto prevent the circumvention of the right of the employee to &e
secured in (his) employment]B
0rt 3". 'a&or 8ode, under a narro, and literal interpretation ,ould appear to
restrict, ,ithout reasona&le distinctions, the right of an employee to freely
stipulate ,ith his employer the duration of his engagement, it logically
follo,s that such a literal interpretation should &e esche,ed or avoided.
The la, must &e given a reasona&le interpretation, to preclude a&surdity in
its application.
-utla,ing the ,hole concept of term employment and su&verting to &oot the
principle of freedom of contract to remedy the evil of employerFs using it as a
means to prevent their employees from o&taining security of tenure is li$e
cutting oD the nose to spite the face or, more relevantly, curing a headache
&y lopping oD the head.
4amiliar e%amples of employment contracts ,hich may &e neither for
seasonal ,or$ nor for speci:c pro=ects, &ut to ,hich a :%ed term is essential@
overseas employment contracts to ,hich, the concept of regular employment
,ill all that it implies does not appear ever to have &een applied, 0rticle 3".
'a&or 8ode not ,ithstandingA appointments to the positions of dean,
assistant dean, college secretary, principal, and other administrative o>ces
in educational institutions, ,hich are &y practice or tradition rotated among
the faculty mem&ers, and ,here :%ed terms are a necessity, ,ithout ,hich
no reasona&le rotation ,ould &e possi&le.
;espite the provisions of 0rt 3"., Policy, Instructions 6o. " of the 5inister of
'a&or implicitly recogniGe that certain company o>cials may &e elected for
,hat ,ould amount to :%ed periods, at the e%piration of ,hich they ,ould
have to stand do,n, in providing that these o>cials, M[ may lose their =o&s
as president, e%ecutive vice-president or vice-president, etc. &ecause the
stoc$holders or the &oard of directors for one reason or another did not re-
elect them.B
#ince the entire purpose &ehind the development of legislation culminating in
the present 0rticle 3". of the 'a&or 8ode clearly appears to have &een to
prevent circumvention of the employeeFs right to &e secure in his tenure, the
clause in said article indiscriminately and completely ruling out all ,ritten or
oral agreements conJicting ,ith the concept of regular employment as
de:ned therein should &e construed to refer to the su&stantive evil that the
8ode itself has singled out@ agreements entered into precisely to circumvent
security of tenure.
It should have no application to instances ,here a :%ed period of
employment ,as agreed upon $no,ingly and voluntarily &y the parties,
,ithout any force, duress or improper pressure &eing &rought to &ear upon
the employee and a&sent any other circumstances vitiating his consent, or
,here it satisfactorily appears that the employer and employee dealt ,ith
Page ;; of 122
each other on more or less e9ual terms ,ith no moral dominance ,hatever
&eing e%ercised &y the former over the latter.
Cnless thus limited in its purvie,, the la, ,ould &e made to apply to
purposes other than those e%plicitly stated &y its framersA it thus &ecomes
pointless and ar&itrary, un=ust in its eDects and apt to lead to a&surd and
unintended conse9uences.
LAAAYOG, e(. !l vs 8.Y. SAN AISCUITS, INC. and 8EB BAH LI8
FACTS:
-n various dates in !!3, petitioners entered into contracts of employment
,ith respondent company as mi%ers, pac$ers and machine operators for a
:%ed term.
Cpon e%piration of their contracts, their services ,ere terminated and they
each e%ecuted a 9uitclaim.
-n 2)7)!!/, petitioners :led complaints for illegal dismissal. The la&or
ar&iter ruled their dismissal to &e illegal &ecause they had &ecome regular
employees ,ho performed duties necessary and desira&le in respondent
companyFs &usiness.
It ordered the reinstatement of petitioners ,ith a,ard of &ac$,ages, /th
month pay and service incentive leave pay.
The claim for moral and e%emplary damages ,as denied for failure to
esta&lish &ad faith on the part of respondents. 0ll other claims ,ere li$e,ise
denied.
-n appeal to 6'R8, the decision of the la&or ar&iter ,as set aside and
su&se9uent motion for reconsideration ,as denied.
In a petition for certiorari :led &y petitioners, the 80 set aside the 6'R8
decision and reinstated the la&or ar&iter1s decision.
+o,ever, on respondentsF motion for reconsideration, the 80 reversed itself
on account the fact that, ,hile petitioners performed tas$s ,hich ,ere
necessary and desira&le in the usual &usiness of respondent company, their
employment contracts providing for a :%ed term remained valid.
6o force, duress, intimidation or moral dominance ,as e%erted on them.
Respondents dealt ,ith petitioners in good faith and ,ithin the valid
parameters of management prerogatives. PetitionersF motion for
reconsideration ,as denied.
+ence, this recourse.
ISSUE: ?hether or not the contract ,ith a :%ed period is valid.
HEL7: YES, it is valid.
Page 100 of 122
The 8ourt notes that (*% /"0(e"0! +!l0d!(e ! /%-("!/( %. e#$l%&#e-(
*0() ! 1?ed $e"0%d@
() the :%ed period of employment ,as $no,ingly and
voluntarily agreed upon &y the parties ,ithout any force,
duress or improper pressure &eing &rought to &ear on the
employee and ,ithout any circumstances vitiating consent or
(3) it satisfactorily appears that the employer and employee
dealt ,ith each other on more or less e9ual terms ,ith no
moral dominance ,hatever &eing e%ercised &y the former on
the latter.
0gainst these criteria, petitionersF contracts of employment ,ith a
:%ed period ,ere valid.
C%-("!/(' %. e#$l%&#e-( .%" ! 1?ed $e"0%d !"e -%( -l!*.l.
?hat is o&=ectiona&le is the practice of some scrupulous employers
,ho try to circumvent the la, protecting ,or$ers from the capricious
termination of employment.
<mployers have the right and prerogative to choose their ,or$ers.
4urther, ,here the duties of the employee consist of activities ,hich
are necessary or desira&le in the usual &usiness of the employer, the
parties are not prohi&ited from agreeing on the duration of
employment.
0rticle 3". does not proscri&e or prohi&it an employment contract ,ith
a :%ed period provided it is not intended to circumvent the security of
tenure.
E!/) /%-("!/( $"%+0ded .%" !- e?$0"!(0%- d!(e.
Petitioners $ne, from the &eginning that the employment oDered to
them ,as not permanent &ut only for a certain :%ed period. In this
case, there ,as no allegation of vitiated consent.
Respondents did not e%ercise moral dominance over petitioners. The
contracts ,ere mutually advantageous to the parties.
#imply put, petitioners ,ere not regular employees. ?hile their
employment as mi%ers, pac$ers and machine operators ,as necessary
and desira&le in the usual &usiness of respondent company, they ,ere
employed temporarily only, during periods ,hen there ,as heightened
demand for production.
8onse9uently, there could have &een no illegal dismissal ,hen their
services ,ere terminated on e%piration of their contracts.
There ,as even no need for notice of termination &ecause they $ne,
e%actly ,hen their contracts ,ould end. C%-("!/(' %. e#$l%&#e-(
Page 101 of 122
.%" ! 1?ed $e"0%d (e"#0-!(e %- ()e0" %*- !( ()e e-d %. '/)
$e"0%d.
7ISPOSITION: The petition is ;<6I<;. The resolution of the 8ourt of 0ppeals is
044IR5<;.
C0el% +' NLRC 1;6 SCRA 910
FACTS:
+enry 'ei Truc$ing hired Kosimo 8ielo as a truc$ driver under *-month
0greement ,ith stipulations that the term can &e earlier terminated at the
option of either party.
The 0greement also stipulated that there ,as no employer-employee
relationship &et,een the parties and that the nature of the relationship is
merely contractual.
'ei as$ed 8ielo to sign an a>davit of having received full payment of ,ages,
,hich 8ielo refused to sign.
0 ,ee$ &efore the 0greement ,as supposed to end, 'ei noti:ed 8ielo of the
termination of his services.
0pparently in the 0greements ,ith the drivers, 'ei merely :lls in the &lan$s
,ith the corresponding data such as the driver1s name and address, etc.
ISSUE: ?hether or not the 0greement ,as valid.
HEL7: The agreement in 9uestion ,as null and void ab initio.
The general principle that B,here from the circumstances it is apparent that
periods have &een imposed to preclude ac9uisition of tenurial security &y the
employee, they should &e struc$ do,n or disregarded as contrary to pu&lic
policy, morals, etc.B
It appears from the records that all the drivers of the private respondent have
&een hired on a :%ed contract &asis, as evidenced &y the mimeographed
form of the agreement and of the a>davit.
The private respondent merely :lled in the &lan$s ,ith the corresponding
data, such as the driverFs name and address, the amount received &y him,
and the date of the document.
Page 102 of 122
<ach driver ,as paid through individual vouchers rather than a common
payroll, as is usual in companies ,ith numerous employees.
The purpose &ehind these individual contracts ,as to evade the application
of the la&or la,s &y ma$ing it appear that the drivers of the truc$ing
company ,ere not its regular employees.
Cnder these arrangements, the private respondent hoped to &e a&le to
terminate the services of the drivers ,ithout the inhi&itions of the 'a&or
8ode.
0ll it had to do ,as refuse to rene, the agreements, ,hich, signi:cantly,
,ere uniformly limited to a si%-month period.
6o cause had to &e esta&lished &ecause such rene,al ,as su&=ect to the
discretion of the parties.
In fact, the private respondent did not even have to ,ait for the e%piration of
the contract as it ,as there provided that it could &e Bearlier terminated at
the option of either party.B
Cnder these arrangements, the private respondent hoped to &e a&le to
terminate the services of the drivers ,ithout the inhi&itions of the 'a&or
8ode.
0ll it had to do ,as refuse to rene, the agreements, ,hich, signi:cantly,
,ere uniformly limited to a si%-month period.
6o cause had to &e esta&lished &ecause such rene,al ,as su&=ect to the
discretion of the parties.
In fact, the private respondent did not even have to ,ait for the e%piration of
the contract as it ,as there provided that it could &e Bearlier terminated at
the option of either party.B
?e accept the factual :nding of the 'a&or 0r&iter that the petitioner ,as a
regular employee of the private respondent.
The private respondent is engaged in the truc$ing &usiness as a hauler of
cattle, crops and other cargo for the Philippine Pac$ing 8orporation.
This &usiness re9uires the services of drivers, and continuously &ecause the
,or$ is not seasonal, nor is it limited to a single underta$ing or operation.
Page 106 of 122
<ven if ostensi&ly hired for a :%ed period, the petitioner should &e considered
a regular employee of the private respondent, conforma&ly to 0rticle 3". of
the 'a&or 8ode.
The 8ourt loo$s ,ith stern disapproval at the contract entered into &y the
private respondent ,ith the petitioner (and ,ho $no,s ,ith ho, many other
drivers).
The agreement ,as a clear attempt to e%ploit the un,itting employee and
deprive him of the protection of the 'a&or 8ode &y ma$ing it appear that the
stipulations of the parties ,ere governed &y the 8ivil 8ode as in ordinary
private transactions.
The agreement ,as in reality a contract of employment into ,hich ,ere read
the provisions of the 'a&or 8ode and the social =ustice policy mandated &y
the 8onstitution.
It ,as a deceitful agreement cloa$ed in the ha&iliments of legality to conceal
the sel:sh desire of the employer to reap undeserved pro:ts at the e%pense
of its employees.
CAPAROSO +. CA
FACTS:
<milio 5. 8aparoso (8aparoso) and Joeve P. Tuindipan (Tuindipan) ,ere
8omposite1s deliverymen.
8aparoso alleged that he ,as hired on " 6ovem&er !!" ,hile Tuindipan
alleged that he ,as hired on intermittent &asis since !!(.
Tuindipan further alleged that he had &een ,or$ing continuously ,ith
8omposite since 0ugust !!".
!!!, 8aparoso and Tuindipan (petitioners) ,ere dismissed from the service.
They :led a complaint of illegal dismissal &efore the '0.
8omposite and Tan (respondents) alleged that petitioners ,ere &oth hired on
5ay !!! as deliverymen, initially for three months and then on a month-
to-month &asis.
Respondents alleged that petitioners1 termination from employment resulted
from the e%piration of their contracts of employment.
The '0 ruled that petitioners are regular employees.
The 6'R8 set aside the 'a&or 0r&iter1s ;ecision.
Page 109 of 122
The 6'R8 held that petitioners1 contracts of employment are valid and
&inding &et,een the contracting parties and shall &e considered as the la,
&et,een them.
The 80 a>rmed the 6'R81s ;ecision.
ISSUE: ?hether petitioners are regular employees of respondents.
HEL7: Pe(0(0%-e"' !"e N%( Regl!" E#$l%&ee'.
The 8ourt thus laid do,n the criteria under ,hich :%ed-term employment
could not &e said to &e in circumvention of the la, on security of tenure,
thus@
1. T)e 1?ed $e"0%d %. e#$l%&#e-( *!' 3-%*0-gl& !-d +%l-(!"0l&
!g"eed $%- ,& ()e $!"(0e' *0()%( !-& .%"/e, d"e'', %" 0#$"%$e"
$"e''"e ,e0-g ,"%g)( (% ,e!" $%- ()e e#$l%&ee !-d !,'e-( !-&
%()e" /0"/#'(!-/e' +0(0!(0-g )0' /%-'e-(P %"
2. I( '!(0'.!/(%"0l& !$$e!"' ()!( ()e e#$l%&e" !-d ()e e#$l%&ee de!l(
*0() e!/) %()e" %- #%"e %" le'' e@!l (e"#' *0() -% #%"!l
d%#0-!-/e e?e"/0'ed ,& ()e .%"#e" %" ()e l!((e".
?e agree ,ith the 8ourt of 0ppeals that in this case, the :%ed period of
employment ,as $no,ingly and voluntarily agreed upon &y the parties.
T)e C%"( %. A$$e!l' -%(ed ()!( ()e"e *!' -% 0-d0/!(0%- %. .%"/e,
d"e'', %" 0#$"%$e" $"e''"e e?e"(ed %- $e(0(0%-e"' *)e- ()e&
'0g-ed ()e /%-("!/('.
F"()e", ()e"e *!' -% $"%%. ()!( "e'$%-de-(' *e"e "egl!"l&
e-g!ged 0- )0"0-g *%"3e"' .%" *%"3 .%" ! #0-0## $e"0%d %. 1+e
#%-()' (% $"e+e-( ()e "egl!"0J!(0%- %. ()e0" e#$l%&ee'.
Petitioners# Emplo)ment is a&in to Pro%ationar) Emplo)ment*
o 0t most, petitioners1 employment for less than si% months can &e
considered pro&ationary.
Petitioners ,ere hired on 5ay !!!, initially for three months. 0fter the
e%piration of their contracts, petitioners ,ere hired on a month-to-month
&asis.
Their contracts of employment ended on " -cto&er !!!. He-/e, ()e& *e"e
e#$l%&ed .%" ! (%(!l %. 1+e #%-()'.
Their employment did not even e%ceed si% months to entitle them to &ecome
regular employees.
Page 10: of 122
FAAELA V. SAN 8IGUEL CORP :1: SCRA 2EE D2007F
FACTS:
Petitioners, along ,ith Joselito ;e 'ara and John 0lovera, ,ere hired &y
respondent #an 5iguel 8orp (#58) as Mrelief salesmenN for G50 under
separate &ut similarly ,orded contracts of employment ,ith :%ed period.
0fter having entered into successive contracts of the same nature ,ith #58,
petitioners ,ith de 'ara and 0lovera ,ere terminated after #58 no longer
agreed to enter into another contract ,ith them.
Respondent #58 claimed that that hiring of petitioners ,as not intended to
&e permanent, &ut ,as only occasioned &y the need to :ll in a vacuum
arising from #581s gradual transition to a ne, system of selling and
delivering its products.
#58 previously operated under the Mroute systemN &ut &egan in !!/ the
Mpre-selling system M under ,hich the salesmen of the route system ,ould &e
replaced &y account specialists ,hich called for upgraded 9uali:cations.
Respondents also claimed that it still had to sell its products using the
conventional routing system during the transition stage, thus the need for
temporary employees
Petitioners, on the other hand, claimed they ,ere illegally dismissed and :led
for complaints against #58.
'0 held favor of petitioners, 6'R8 a>rmed the same.
80 reversed the decision and held in favor of #58.
ISSUE: ?-6 the respondents ,ere hired for a :%ed period.
HEL7: 6o, petitioner ,ere considered regular employees.
Pro=ect employment is distinct from casual employment referred to in the
second paragraph of 0rt 3". 'a&or 8ode ,hich states that Many employee
,ho has rendered at least one year of service[shall &e considered a regular
employeeN does not apply to pro=ect employees, &ut only to casual
employees.
0lthough 0rt 3". does not e%pressly recogniGe employment for a :%ed period,
,hich is distinct from employment ,hich has &een :%ed for a speci:c period,
Erent v. Kamora clari:ed that employment for a :%ed period itself is not a
illegal.
There can of course &e no 9uarrel ,ith the proposition that *)e"e ."%# ()e
/0"/#'(!-/e' 0( 0' !$$!"e-( ()!( $e"0%d' )!+e ,ee- 0#$%'ed (%
$"e/lde !/@0'0(0%- %. (e-"0!l 'e/"0(& ,& ()e e#$l%&ee, ()e&
')%ld ,e '("/3 d%*- %" d0'"eg!"ded !' /%-("!"& (% $,l0/ $%l0/&,
#%"!l', e(/.
Page 106 of 122
A( *)e"e -% '/) 0-(e-( (% /0"/#+e-( ()e l!* 0' ')%*-, %" '(!(ed
%()e"*0'e, *)e"e ()e "e!'%- .%" ()e l!* d%e' -%( e?0'(, e.g., *)e"e
0( 0' 0-deed ()e e#$l%&ee )0#'el. *)% 0-'0'(' $%- ! $e"0%d %" *)e"e
()e -!("e %. ()e e-g!ge#e-( 0' '/) ()!(, *0()%( ,e0-g 'e!'%-!l
%" .%" ! '$e/01/ $"%2e/(, ! de1-0(e d!(e %. (e"#0-!(0%- 0' ! sine +ua
non , *%ld !- !g"ee#e-( 1?0-g ! $e"0%d e''e-(0!ll& e+0l %" 0ll0/0(,
()e"e.%"e !-!()e#!W
?ould such an agreement come ,ithin the scope of 0rticle 3". ,hich
admittedly ,as enacted Bto prevent the circumvention of the right of the
employee to &e secured in % % (his) employment]B
0ccordingly, and since the entire purpose &ehind the development of
legislation culminating in the present 0rticle 3". of the 'a&or 8ode clearly
appears to have &een,. as already o&served, to prevent circumvention of the
employee1s right to &e secure in his tenure, ()e /l!'e in said article
indiscriminately and completely ruling out all ,ritten or oral agreements
conJicting ,ith the concept of regular employment as de:ned therein should
&e construed to refer to the su&stantive evil that the 8ode itself has singled
out@ agreements entered into precisely to circumvent security of tenure.
It should have no application to instances ,here a :%ed period of
employment ,as agreed upon $no,ingly and voluntarily &y the parties,
,ithout any force, duress or improper pressure &eing &rought to &ear upon
the employee and a&sent any other circumstances vitiating his consent, or
,here it satisfactorily appears that the employer and employee dealt ,ith
each other on more or less e9ual terms ,ith no moral dominance ,hatever
&eing e%ercised &y the former over the latter.
Thus, even if the duties of an employee consist of activities usually necessary
or desira&le in the usual &usiness of the employer, it does not necessarily
follo, that the parties are for&idden from agreeing on a period of time for the
performance of such activities through a contract of employment for a :%ed
term.
The 6'R8, therefore, had su>cient &asis to &elieve that the shift of #58 to
the Pre-#elling #ystem ,as not the real &asis for the forging of :%ed-term
contracts of employment ,ith petitioners and that the periods ,ere :%ed only
as a means to preclude petitioners from ac9uiring security of tenure.
PNOC ENERGY 7EV4T CORP. vs NLRC
ISSUE: ?hether respondents ,ere pro=ect employees or regular employees
HEL7: Respondents ,ere regular employees of the company.
Page 107 of 122
The 8ourt cited the ruling in 7randspan :evelopment Corporation v.
#ernardo, that the principal test for determining ,hether employees are
$"%2e/( e#$l%&ee' or "egl!" e#$l%&ee' is *)e()e" %" -%( ()e
Q$"%2e/( e#$l%&ee'4 *e"e !''0g-ed (% /!""& %( ! Q'$e/01/ $"%2e/( %"
-de"(!30-g,4 ()e d"!(0%- !-d '/%$e %. *)0/) *e"e '$e/01ed !( ()e
(0#e ()e e#$l%&ee' *e"e e-g!ged .%" ()!( $"%2e/(.
0s de:ned, pro=ect employees are those ,or$ers hired () for a speci:c
pro=ect or underta$ing, and (3) the completion or termination of such pro=ect
or underta$ing has &een determined at the time of engagement of the
employee.
In the case at &ar, petitioner failed to su&stantiate its claim that respondents
,ere hired merely as pro=ect employees. Records disclose that the supposed
speci:c pro=ect or underta$ing of petitioner ,as not satisfactorily identi:ed in
the contracts of respondents.
The !lleged $"%2e/(' '(!(ed 0- ()e e#$l%&#e-( /%-("!/(' *e"e e0()e"
(%% +!ge %" 0#$"e/0'e (% ,e /%-'0de"ed !' ()e H'$e/01/
-de"(!30-gH /%-(e#$l!(ed ,& l!*.
Petitioner1s act of repeatedly and continuously hiring respondents to do the
same $ind of ,or$ &elies its contention that respondents ,ere hired for a
speci:c pro=ect or underta$ing.
T)e !,'e-/e %. ! de1-0(e d"!(0%- .%" ()e $"%2e/(C' )!' led ()e C%"(
(% /%-/lde ()!( "e'$%-de-(' !"e, 0- .!/(, "egl!" e#$l%&ee'.
In !ilipinas Pre-!abricated #uilding S(stems (!ils(stems), nc. v. Puente, the
8ourt ruled that Bthe le-g() %. 'e"+0/e %. ! $"%2e/( e#$l%&ee 0' -%( ()e
/%-("%ll0-g (e'( of employment tenure &ut ,hether or not the employment
has &een :%ed for a speci:c pro=ect or underta$ing the completion or
termination of ,hich has &een determined at the time of the engagement of
the employee.B
Indeed, *)0le le-g() %. (0#e #!& -%( ,e ()e /%-("%ll0-g (e'( .%"
$"%2e/( e#$l%&#e-(, 0( 0' +0(!l 0- de(e"#0-0-g 0. ()e e#$l%&ee *!'
)0"ed .%" ! '$e/01/ -de"(!30-g %" (!'3ed (% $e".%"# .-/(0%-' +0(!l,
-e/e''!"& !-d 0-d0'$e-'!,le (% ()e '!l ,'0-e'' %" ("!de %. ()e
e#$l%&e".
In the case at &ar, respondents had &een pro=ect employees several times
over. Their e#$l%&#e-( /e!'ed (% ,e /%(e"#0-%' *0() '$e/01/
$"%2e/(' ,hen they ,ere repeatedly re-hired &y petitioner.
B)e"e ()e e#$l%&#e-( %. $"%2e/( e#$l%&ee' 0' e?(e-ded l%-g !.(e"
()e '$$%'ed $"%2e/( )!' ,ee- 1-0')ed, ()e e#$l%&ee' !"e "e#%+ed
."%# ()e '/%$e %. $"%2e/( e#$l%&ee' !-d !"e /%-'0de"ed "egl!"
e#$l%&ee'.
Page 10E of 122
0s regular ,or$ers, respondents are entitled to security of tenure under
0rticle 3(! of the 'a&or 8ode and can only &e dismissed for a =ust or
authoriGed cause.
7ISPOSITION: The petition is ;<6I<;. The ;ecision of the 8ourt of 0ppeals and the
Resolution are 044IR5<;. 6o costs.
8!g/!l!' +' NLRC 26; SCRA 9:6
FACTS:
8omplainants alleged that they ,ere all regular employees of the respondent
company, having rendered continuous services in various capacities, ranging
from lead man, tinsmith, trade helper to general cler$.
The complainants have ,or$ed for a num&er of years, the minimum of ,hich
,as .7 years and the ma%imum ,as " years under several supervisors.
0ugust /., !""@ they ,ere dismissed ,ithout prior notice and investigation,
and that their dismissals ,ere eDected for no other cause than their
persistent demands for payment of money claims as mandated &y la,.
Respondent company averred that the manufacturing aspect of its operation
is handled &y its regular employees, ,hile the installation aspect, &y reason
of its intermittence, is carried out &y its pro=ect or contract employees.
The complainants herein ,ere among the contract employees hired &y the
respondent to install the air-conditioning e9uipment at the 0;E and Inter&an$
pro=ects.
?ith the completion of their tas$ in their respective pro=ects, the employment
of the complainants e%pired as they had no more ,or$ to do.
'a&or ar&iter ordered petitioners to &e reinstated and to &e paid &ac$,ages
from the time of their dismissal)termination to their actual reinstatement.
6'R8 reversed decision and ordered respondent to pay the petitioners their
separation pay.
ISSUE: ?hether or not petitioners ,ere regular ,or$ers under the contemplation
of 0rticle 3". of the 'a&or 8ode.
HEL7:
. L<#
Ratio The services of pro=ect employees are co-terminous ,ith the pro=ect and may
&e terminated upon the end or completion of the pro=ect for ,hich they ,ere hired.
Regular employees, in contrast, are legally entitled to remain in the service of their
employer until that service is terminated &y one or another of the recogniGed modes
of termination of service under the 'a&or 8ode.
Page 10; of 122
Reasoning
0 mere provision in the 8E0 recogniGing contract employment does not
su>ciently esta&lish that petitioners ,ere ipso &acto contractual or pro=ect
employees.
In the same vein, the invocation of Policy 6o. 3. governing the employment
of pro=ect mployees in the construction industry does not, &y itself,
automatically classify private respondent as part of the construction industry
and entitle it to dismiss petitioners at the end of each pro=ect.
These facts cannot &e presumedA they must &e supported &y su&stantial
evidence.
The record discloses that the complainants ,or$ed not only in one special
pro=ect &ut also varia&ly in other pro=ects)=o&sites contracted &y Zoppel
Incorporated.
Some o& them, a&ter their tour o& dut( on these di>erent 0obsites /ere
reassigned to the respondent?s plant at @oppel Compound, ParaAa"ue, ,etro
,anila.
0 close e%amination of the record further reveals that the Bspecial pro=ectsB at
the 0;E and Inter&an$ to ,hich the complainants ,ere last assigned &y the
respondent ,ere still in operation &efore their alleged termination from
employment.
=nder these &actual milieu, /e believe that the( had been engaged to /or%
and per&orm activities /hich /ere necessar( and desirable in the air-
conditioning and re&rigeration installation2repair business o& the respondent
emplo(er, especiall( /here, as in this case, the ver( nature o& such trade
indicates that it can hardl( &all under the e.ception o& Polic( nstruction No.
<6 /hich applies onl( to the construction industr(. !or this reason, and
considering the &acts narrated in the complainants? s/orn statements /ere
neither disputed nor re&uted b( contrar( evidence b( the respondent, it
becomes apparent and increasingl( clear that indeed the( /ould and ought
to be classi*ed as regular emplo(ees.
Regular employees cannot at the same time &e pro=ect employees. 0rticle
3". of the 'a&or 8ode states that regular employees are those ,hose ,or$ is
necessary or desira&le to the usual &usiness of the employer.
The t,o e%ceptions follo,ing the general description of regular employees
refer to either pro=ect or seasonal employees.
In the realm of &usiness and industry, ,e note that Bpro=ectB could refer to
one or the other of at least t,o distinguisha&le types of activities.
4irstly, a pro=ect could refer to particular =o& or underta$ing that is ,ithin the
regular or usual &usiness of the employer company, &ut ,hich is distinct and
separate, and identi:a&le as such, from the other underta$ings of the
company.
Page 110 of 122
#uch =o& or underta$ing &egins and ends at determined or determina&le
times.
<mployees ,ho are hired for the carrying out of one of these separate
pro=ects, the scope and duration of ,hich has &een determined and made
$no,n to the employees at the time of employment, are properly treated as
Bpro=ect employees,B and their services may &e la,fully terminated at
completion of the pro=ect.
The employment of seasonal employees, on the other hand, legally ends
upon completion of the pro=ect or the season.
The over,helming fact of petitionersF continuous employment as found &y
the la&or ar&iter ineludi&ly sho,s that the petitioners ,ere regular
employees.
-n the other hand, ,e :nd that su&stantial evidence, applica&le la,s and
=urisprudence do not support the ruling in the assailed ;ecision that
petitioners ,ere pro=ect employees.
The 8ourt here reiterates the rule that all dou&ts, uncertainties, am&iguities
and insu>ciencies should &e resolved in favor of la&or. It is a ,ell-entrenched
doctrine that in illegal dismissal cases, the employer has the &urden of proof.
This &urden ,as not discharged in the present case.
PHILIPPINE TOAACCO V NLRC
FACTS:
This involves 3 groups of seasonal ,or$ers@ 'u&at group and 'uris group.
They claimed separation &ene:ts after closure of processing plant and
transfer of to&acco operations to Ilocos.
The 'u&at group is composed of petitioners seasonal employees ,ho ,ere
not rehired for the !!2 to&acco season.
0t the start of that season, they ,ere merely informed that their employment
had &een terminated at the end of the !!/ season.
They claimed that petitioners refusal to allo, them to report for ,or$ ,ithout
mention of any =ust or authoriGed cause constituted illegal dismissal.
?hile 'uris group is made up of seasonal employees ,ho ,or$ed during the
!!2 season. -n 0ugust /, !!2, they received a notice informing them that,
due to serious &usiness losses, petitioner planned to close its Ealinta,a$
plant and transfer its to&acco processing and redrying operations to Ilocos
#ur.
0lthough the closure ,as to &e eDective #eptem&er 7, !!2, they ,ere no
longer allo,ed to ,or$ starting 0ugust 2, !!2.
Page 111 of 122
Philippine to&acco e%plains that complainants1 nature of ,or$ is seasonal as
they are employed every year only during the to&acco season ,hich may fall
,ithin the months of 4e&ruary to 6ovem&er &ut actually ,or$ for a period of
less VthanW si% (*) months for each season.
The la, 9uali:es tenure for purposes of separation &ene:ts as &ased on
service and not employment.
ISSUES:
. ?-6 the 'uris group has &een illegally dismissed
3. ?-6 the 'u&at group has &een illegally dismissed
HEL7
. L<#
#erious &usiness losses ,ere not proven.
To =ustify retrenchment@
() losses e%pected should &e su&stantial and not merely de minimis.
(3) su&stantial loss must &e reasona&ly imminent.
(/) retrenchment must &e reasona&ly necessary. <mployer should have ta$en
other measures. (2) alleged losses must &e proven &y su>cient and
convincing evidence.
+ere, ,e consider the fact that the petitioner did not actually close its
operations &ut merely transferred its processing and redrying operations.
It ,as also engaged in corn and rental operations.
6otice of termination, though issued, violated the one month prior notice
re9uisite.
3. L<#
#<0#-60' ?-RZ<R# ?+- 0R< 80''<; 4R-5 TI5< T- TI5< 06; 0R<
T<5P-R0RI'L '0I; -44 ;CRI6G -44-#<0#-6 0R< 6-T #<P0R0T<; 4R-5
#<RII8< I6 #0I; P<RI-;, ECT 0R< 5<R<'L 8-6#I;<R<; -6 '<0I< C6TI'
R<<5P'-L<;.
The employer-employee relationship &et,een petitioner and 'u&at group ,as
not terminated at the end of !!/ season.
Petitioner relies upon our ruling in 5ercado v. 6'R8 that the Memployment Vof
seasonal employeesW legally ends upon completion of the % % % season,N a
statement ,hich ,as su&se9uently reiterated in 5agcalas v. 6'R8.
Page 112 of 122
Thus, petitioner argues that it ,as not o&liged to rehire the mem&ers of the
'u&at group for the !!2 season, &ecause their employment had &een
terminated at the end of the !!/ season.
#ince they ,ere not employed for the !!2 season ,hen the Ealinta,a$
plant ,as closed, it follo,s that petitioner has no o&ligation to a,ard them
separation pay due to the said closure.
?e are not persuaded.
F"%# ()e .!/(', *e !"e /%-+0-/ed ()!( $e(0(0%-e" 0lleg!ll& d0'#0''ed
()e #e#,e"' %. ()e L,!( g"%$ *)e- 0( "e.'ed (% !ll%* ()e# (%
*%"3 d"0-g ()e 1;;9 'e!'%-.
The nature of their relationship % % % is such that during oD season they are
temporarily laid oD &ut during summer season they are re-employed, or ,hen
their services may &e needed.
They are not strictly spea$ing separated from the service &ut are merely
considered as on leave of a&sence ,ithout pay until they are re-employed.
SAN 8IGUEL CORP V. NLRC 2;7 SCRA 277 D1;;EF
FACTS:
In 6ovem&er !!., 4rancisco ;e GuGman Jr. ,as hired &y #58 as
helper)&ric$layer for a speci:c pro=ect, the repair and upgrading of furnace 8
at its 5anila Glass Plant. +is contract of employment provided that said
temporary employment ,as for a speci:c period of appro%imately 2 months.
-n 0pril /., !!, ;e GuGman ,as a&le to complete the repair and upgrading
of furnace 8. Thus, his services ,ere terminated on that same day as there
,as no more ,or$ to &e done. +is employment contract also ended that day.
-n 5ay ., !!, ;e GuGman ,as again hired for a speci:c =o& ,hich
involved the draining)cooling do,n of furnace 4 and the emergency repair of
furnace <. This pro=ect ,as for a speci:c period of appro%imately / months.
0fter the completion of this tas$, at the end of July !!, ;e GuGmanFs
services ,ere terminated.
-n 0ug., !!, complainant sa, his name in a 5emorandum posted at the
8ompanyFs Eulletin Eoard as among those ,ho ,ere considered dismissed.
-n 0ug.3, !!2, or after the lapse of more than / years from the completion
of the last underta$ing for ,hich ;e GuGman ,as hired, he :led a complaint
for illegal dismissal against #58.
-n June /., !!7, '0 rendered the decision dismissing said complaint for lac$
of merit, sustaining #58Fs argument that ;e GuGman ,as a pro=ect
employee.
o The position of a helper does not fall ,ithin the classi:cation of regular
employees.
Page 116 of 122
o +ence, complainant never attained regular employment status.
o 5oreover, his silence for more than three (/) years ,ithout any
reasona&le e%planation tended to ,ea$en his claim.
Cpon appeal, 6'R8 reversed '0 decision.
o In its ruling, 6'R8 stated that #581s scheme of su&se9uently re-hiring
complainant after only . days from the last day of the e%piration of
his contract of employment for a speci:c period, and giving him again
another contract of employment for another speci:c period cannot &e
countenanced.
o This is one ,ay of doing violence to the employeeFs constitutional right
to security of tenure under ,hich even employees under pro&ationary
status are amply protected.
ISSUE: ?-6 private respondent ,as hired for a :%ed period.
HEL7: Les.
Cnder 0rticle 3". of the 'a&or 8ode, an employment is deemed regular ,hen
the activities performed &y the employee are usually necessary or desira&le
in the usual &usiness or trade of the employer even if the parties enter into
an agreement stating other,ise.
Eut considered not regular under said 0rticle are () the so-called Mpro=ect
employmentN the termination of ,hich is more or less determina&le at the
time of employment, such as those connected ,ith a particular construction
pro=ectA and (3) seasonal employment, ,hich &y its nature is only for one
season of the year and the employment is limited for the duration of that
season, such as the 8hristmas holiday season.
6evertheless, an e%ception to this e%ception is made@ any employee ,ho has
rendered at least one () year of service, ,hether continuous or intermittent,
,ith respect to the activity he performed and ,hile such activity actually
e%ists, must &e deemed regular.
4ollo,ing 0rticle 3"., ,hether one is employed as a pro=ect employee or not
,ould depend on ,hether he ,as hired to carry out a Mspeci:c pro=ect or
underta$ingN, the duration and scope of ,hich ,ere speci:ed at the time his
services ,ere engaged for that particular pro=ect.
0nother factor that may &e considered is the reasona&le connection &et,een
the particular activity underta$en &y the employee in relation to the usual
trade or &usiness of the employerA if ,ithout specifying the duration and
scope, the ,or$ to &e underta$en is usually necessary or desira&le in the
usual &usiness or trade of the employer, then it is regular employment and
not =ust Mpro=ectN much less McasualN employment.
Thus, the nature of one1s employment does not depend on the ,ill or ,ord of
the employer.
Page 119 of 122
6or on the procedure of hiring and the manner of designating the employee,
&ut on the nature of the activities to &e performed &y the employee,
considering the employer1s nature of &usiness and the duration and scope of
the ,or$ to &e done.
8ANILA HOTEL vs COURT OF IN7USTRIAL RELATIONS
FACTS:
-n 3)32)!*., Pines +otel <mployees 0ssociation :led a petition &efore the
8IR against 5anila +otel for overtime pay, as ,ell as additional compensation
for #unday, legal holiday and night time ,or$.
The 5anila +otel :led its ans,er denying the material averments of the
petition and alleged that the overtime service ,as not authoriGed and ,as
rendered voluntarily due to the MtipsN oDered &y the patrons of the hotel.
The Judge ruled in favor of the employees and noted that an employee ,ho
renders overtime service is entitled to compensation even if he rendered it
,ithout prior authority.
0 motion for reconsideration ,as :led on the ground that the order ,as
contrary to la, and the evidence, &ut the same ,as denied &y the industrial
court <n Eanc.
In compliance ,ith the order of the court, the <%amining ;ivision of the 8IR
has determined that the amount due the employees from January to
;ecem&er /, !7" ,as P/3,!7..*!.
#u&se9uently, the management :led its o&=ection, alleging that it included 33
names of employees ,ho ,ere not employees of the Pines +otel at the time
the petition ,as :led.
+o,ever, the trial =udge overruled this o&=ection holding that, ,hile the 33
employees ,ere actually not in the service at the time of the :ling of the
petition, they ,ere ho,ever su&se9uently employed even during the
pendency of the incident, and so their claim comes ,ithin the =urisdiction of
the 8IR.
+ence the present petition for revie,.
ISSUE: ?hether or not the season employees are entitled to the additional
compensation.
Held:
?hile it is true that the 33 employees ,hose claim is o&=ected to ,ere not
actually in their service at the time the instant petition ,as :led, they ,ere
Page 11: of 122
ho,ever su&se9uently re-employed even ,hile the present incident ,as
pending consideration &y the trial court.
5oreover, it appears that the 9uestioned employees ,ere never separated
from the service.
Their '(!(' 0' ()!( %. "egl!" 'e!'%-!l e#$l%&ee' *)% !"e /!lled (%
*%"3 ."%# (0#e (% (0#e, #%'(l& d"0-g '##e" 'e!'%-. The -!("e %.
()e0" "el!(0%-')0$ *0() ()e )%(el is such that during oD season they are
temporarily laid oD &ut during summer season they are re-employed, or ,hen
their services may &e needed.
T)e& !"e -%( '("0/(l& '$e!30-g 'e$!"!(ed ."%# ()e 'e"+0/e' ,( !"e
#e"el& /%-'0de"ed !' %- le!+e %. !,'e-/e *0()%( $!& -(0l ()e& !"e
"e- e#$l%&ed. T)e0" e#$l%&#e-( "el!(0%-')0$ 0' -e+e" 'e+e"ed ,(
%-l& ''$e-ded. 0s such, these employees can &e considered as in the
regular employment of the hotel.
7ISPOSITION: ?+<R<4-R<, the -rder appealed from is a>rmed. 6o costs.
I-d'("0!l e(/. +' CIR
FACTS:
Petitioner, Industrial-8ommercial- 0gricultural ?or$ersF -rganiGation (I80?-),
declared a stri$e against the respondent 8entral 0Gucarera de Pilar.
The stri$e ,as amica&ly settled thefollo,ing day, and among the provisions
of the B0mica&le #ettlementB reads@
BThat the company shall not discriminate against any ,or$er
and the same treatment shall &e accorded to ,or$ers (I80?-
a>liates) ,ho declared a stri$e or not. 0 petition for 8erti:cation
<lection ,ill &e :led &y the I80?- in vie, of the other la&or
union, 80P0?0, ,ith ,hom the company has an e%isting
collective &argaining contract, a union ,hich is considered &y
the I80?- as a company union.B
The 80P0?0 therein referred to is the herein respondent 8entral 0Gucarera
de Pilar 0llied ?or$ers 0ssociation and the collective &argaining contract,
li$e,ise therein referred to, entered into in !77, provided@
BThe <5P'-L<R agrees that in hiring uns$illed employees and
la&orers, the mem&ers of the ?-RZ<R# 0##-8I0TI-6 should &e
given preference and the management should notify accordingly
to the ?-RZ<R# 0##-8I0TI-6 of any vacancy e%isting in all
;epartments. 6e, employees and la&orers hired ,ho are
Page 116 of 122
mem&ers of the ?-RZ<R# 0##-8I0TI-6 ,ill &e on T<5P-R0RL
#T0TC# and the <5P'-L<R agrees that &efore they ,ill &e
considered regular employees and la&orers they have to &ecome
mem&ers of the 8<6TR0' 0KC80R<R0 ;< PI'0R 0''I<;
?-RZ<R#F 0##-8I0TI-6 ,ithin thirty (/.) days from the date of
employment and if they refuse to a>liate ,ith the said la&or
organiGation ,ithin this time they ,ill &e immediately dismissed
&y the <5P'-L<RAB
0mong the stri$ers ,ere . seasonal ,or$ers, some of ,hom have ,or$ed
as such for the company since pre-,ar years. -n the opening of the milling
season for the year !7*-!7(, the respondent company refused to re-admit
those . seasonal ,or$ers of the I80?- on the ground that it ,as precluded
&y the closed shop clause in its collective &argaining agreement ,ith the
80P0?0.
Thus, the I80?- :led an unfair la&or practice charge against the company.
The 8ourt of Industrial Relations in a decision ordered the reinstatement, ,ith
&ac$ ,ages, of these la&orersA &ut on a motion for reconsideration, the said
court, reversed the said decision. 6ot satis:ed ,ith the reversal, the I80?-
:led the present petition for certiorari to revie, the industrial courtFs
resolution.
The petitioner contends that they are regular and old employees and, as
such, they should have &een re-hired at the start, in the month of -cto&er, of
each milling season, ,hich usually last 7 months.
The respondents, on the other hand, urge that these la&orers are ne,, their
employment terminating at the end of each milling season and, therefore,
could not &e readmitted ,ithout the company violating the closed shop
agreement ,ith the 80P0?0.
ISSUE: ?hether or not seasonal ,or$ers are ne, ,or$ers.
HEL7: 6-
Ratio ?here from the circumstances it is apparent that the periods ,ere imposed
in order to preclude the ac9uisition of tenurial security &y the employee, they
should &e struc$ do,n or disregarded for &eing contrary to pu&lic policy, morals,
etc.
Reasoning
The 0greement is void a& initio for having a purpose contrary to pu&lic policy.
The agreement ,as a clear attempt to e%ploit the employee and deprive him
of the protection of the 'a&or 8ode &y ma$ing it appear that the stipulations
are governed &y the 8ivil 8ode as in ordinary private transactions.
Page 117 of 122
In reality the agreement ,as a contract of employment into ,hich ,ere read
the provisions of the 'a&or 8ode and the social =ustice policy of the
8onstitution.
That 8ielo refused to sign the a>davit ,as not a =ust cause for his
termination as he ,as only protecting his interest against unguarded ,aiver
of the &ene:ts due him under the 'a&or 8ode.
#aid a>davit ,hich stipulated payment of ,ages even suggested that there
,as indeed an employer-employee relationship.
HACIEN7A AINO +'. CUENCA
FACTS:
+acienda Eino (+E) is a 3/*-hectare sugar plantation in 6egros -cc, o,ned
and operated &y +ortencia #tar$e.
+E consists of 33. ,or$ers performing various ,or$s, such as cultivation,
planting of cane points, fertiliGation, ,atering, ,eeding, harvesting, and
loading of harvested sugarcanes to cargo truc$s. -n July " !!*, #tar$e
issued a notice that those ,ho signed in favor of 80RP are e%pressing their
desire to get out of employment.
(* ,or$ers ,ere aDected@ they regarded the notice as a notice of their
termination.
They :led a complaint for illegal dismissal, ,age diDerentials, /th month
pay, holiday pay and premium pay for holiday, service incentive leave pay,
and moral and e%emplary damages.
tar&e#s side:
+E1s &oard of directors ,ere petitioning for reclassi:cation of the hacienda
(e%cept the portion earmar$ed for 80RP) from agricultural to industrial,
residential and commercial.
#he ,as merely giving priority to those ,ho supported the reclassi:cation.
July !!* ,as oD-season, so not so many ,or$ers neededA the ,or$ ,as
seasonal in nature.
#he relies on the ruling in ,ercado Sr. v. NLRC ,here sugar farm ,or$ers
,ere classi:ed as seasonal employees, and not regular employees. The
,or$ers ,ere free to oDer their services to neigh&oring haciendas.
Respondents# side:
They are regular employees.
The hacienda ,as so &ig that they ,or$ there year-round and that they do
not oDer their services to neigh&oring haciendas.
Page 11E of 122
The 5ercado case dealt ,ith a (.7-heactare hacienda, considera&le smaller
than +E.
ISSUE: ?-6 the respondents are seasonal employees.
HEL7: NO.

The respondents are regular employees.
#tar$e1s reliance on 5ercado is misplaced &ecause in that case, the ,or$ers
,ere classi:ed as seasonal employees &ecause they ,ere employed for a
de:nite period of time since the hacienda ,as much smaller, and they oDered
their services to and ,or$ed at the neigh&oring haciendas.
The 8ourt reiterated the same o&servations in Hacienda !atima v. National
!ederation o& Sugarcane Bor%ers-!ood and 7eneral )rade and added that the
petitioners in the 5ercado case ,ere Bnot hired regularly and repeatedly for
the same phase)s of agricultural ,or$, &ut on and oD for any single phase
thereof.B #tar$e did not present any evidence that the respondents ,ere
re9uired to perform certain phases of agricultural ,or$ for a de:nite period of
time.
0lthough she asserted that the respondents made their services availa&le to
the neigh&oring haciendas, the records do not, ho,ever, support such
assertion.
T)e $"0#!"& '(!-d!"d .%" de(e"#0-0-g "egl!" e#$l%&#e-( 0' ()e
"e!'%-!,le /%--e/(0%- ,e(*ee- ()e $!"(0/l!" !/(0+0(& $e".%"#ed ,&
()e e#$l%&ee 0- "el!(0%- (% ()e '!l ("!de %" ,'0-e'' %. ()e
e#$l%&e".
T)e"e 0' -% d%,( ()!( ()e "e'$%-de-(' *e"e $e".%"#0-g *%"3
-e/e''!"& !-d de'0"!,le 0- ()e '!l ("!de %" ,'0-e'' %. !-
e#$l%&e".
+ence, they can properly &e classi:ed as regular employees.
F%" "e'$%-de-(' (% ,e e?/lded ."%# ()%'e /l!''01ed !' "egl!"
e#$l%&ee', 0( 0' -%( e-%g) ()!( ()e& $e".%"# *%"3 %" 'e"+0/e' ()!(
!"e 'e!'%-!l 0- -!("e. T)e& #'( )!+e ,ee- e#$l%&ed %-l& .%" ()e
d"!(0%- %. %-e 'e!'%-.
B)0le ()e "e/%"d' '5/0e-(l& ')%* ()!( ()e "e'$%-de-('G *%"3 0- ()e
)!/0e-d! *!' 'e!'%-!l 0- -!("e, ()e"e *!', )%*e+e", -% $"%%. ()!(
()e& *e"e )0"ed .%" ()e d"!(0%- %. %-e 'e!'%- %-l&.
I- .!/(, ()e $!&"%ll', ',#0((ed 0- e+0de-/e ,& ()e $e(0(0%-e"', ')%*
()!( ()e& !+!0led ()e 'e"+0/e' %. ()e "e'$%-de-(' '0-/e 1;;1. A,'e-(
!-& $"%%. (% ()e /%-("!"&, ()e ge-e"!l "le %. "egl!" e#$l%&#e-(
')%ld, ()e"e.%"e, '(!-d. I( ,e!"' '("e''0-g ()!( ()e e#$l%&e" )!'
()e ,"de- %. $"%+0-g ()e l!*.l-e'' %. )0' e#$l%&eeG' d0'#0''!l.
Page 11; of 122
,isposition Petition denied. Reinstate ,or$ers ,ithout loss of seniority, pay
&ac$,ages and ,age diDerentials, and pay attys. fees.
POSEI7ON FISHING V. NLRC 9E2 SCRA 717 D2006F
FACTS:
<sto9uia ,as :rst hired &y P4 as a 8hief 5ate in !"". +e later on &ecame
Eoat 8aptainA &ut ,as demoted still later to Radio -perator.
In 3..., he failed to log a (@37am call in one log&oo$, &ut ,as a&le to record
it in another one. ?hen he realiGed his mista$e, he logged the (@37 call after
a (@/. am call (same day).
The manager noticed this mista$e and summoned <sto9uia to get his
separation pay.
<sto9uia refused to accept the separation pay &ecause he &elieved he had
done nothing illegal to ,arrant his immediate discharge from ,or$.
. Poseidon 4ishing argued that <sto9uia ,as a casual)contractual employee
,hose services could &e terminated at the end of contract. P4 contends that
<sto9uia ,as hired on a por via=e &asis, &ased on the Zasunduan ,hich reads@
CN+, %ami a( sumasang-a(on na ,+7LN7@D: at 7=,+B+ ng
mga ga/aing magmula sa pag-alis ng lantsa sa pondohan sa
Navotas patungo sa pala%a(ahanE pabali% sa pondohan ng lantsa
sa Navotas hanggang sa paghango ng mga %argang isda.F
3. Petitioners further posited that ,hen the private respondent ,as engaged, it
,as made clear to him that he ,as &eing employed only on a Gpor via0eG or
per trip &asis and that his employment ,ould &e terminated at the end of the
trip for ,hich he ,as &eing hired. 0s such, the private respondent could not
&e entitled to separation pay and other monetary claims.
/. In private respondent1s position paper, he averred that petitioner Poseidon
employed him as a 8hief 5ate sometime in January !"". +e claimed that he
,as promoted to the position of Eoat 8aptain :ve years after. +o,ever, in
!!!, he ,as demoted from Eoat 8aptain to Radio -perator ,ithout any
reason and shortly, he ,as terminated ,ithout =ust cause and ,ithout due
process of la,.
2. '0 and 6'R8 found for <sto9uia.
ISSUE: ?-6 <sto9uia ,as a regular employee ,hen he ,as discharged from ,or$.
HEL7: YES.
Page 120 of 122
P4Fs intent to evade the application of 0rt 3". 'a&or 8ode is unmista$a&le. In
a span of 3 years, <sto9uia ,or$ed for petitioner company :rst as a 8hief
5ate, then Eoat 8aptain, and later as Radio -perator.
+is =o& ,as directly related to the deep-sea :shing &usiness of petitioner
Poseidon. +is ,or$ ,as, therefore, necessary and important to the &usiness
of his employer.
#uch &eing the scenario involved, private respondent is considered a regular
employee of petitioner under 0rt 3". of the 'a&or 8ode.
5oreover, unli$e in the #rent case ,here the period of the contract ,as :%ed
and clearly stated, the terms of employment of private respondent as
provided in the Zasunduan ,as not only vague, it also .!0led (% $"%+0de !-
!/(!l %" '$e/01/ d!(e %" $e"0%d .%" ()e /%-("!/(.
4urthermore, as petitioners themselves admitted, private respondent ,as
repeatedly hired as part of the &oatFs cre, and he acted in various capacities
on&oard the vessel.
I- -ntegrated Contractor and Plum%ing .or&s, -nc* v* /0RC , 0( *!'
)eld ()!( ()e (e'( (% de(e"#0-e *)e()e" e#$l%&#e-( 0' "egl!" %"
-%( 0' ()e "e!'%-!,le /%--e/(0%- ,e(*ee- ()e $!"(0/l!" !/(0+0(&
$e".%"#ed ,& ()e e#$l%&ee 0- "el!(0%- (% ()e '!l ,'0-e'' %" ("!de
%. ()e e#$l%&e".
A-d, 0. ()e e#$l%&ee )!' ,ee- $e".%"#0-g ()e 2%, .%" !( le!'( %-e
&e!", e+e- 0. ()e $e".%"#!-/e 0' -%( /%-(0-%' %" #e"el&
0-(e"#0((e-(, ()e l!* dee#' ()e "e$e!(ed !-d /%-(0-0-g -eed .%" 0('
$e".%"#!-/e !' '5/0e-( e+0de-/e %. ()e -e/e''0(&, 0. -%(
0-d0'$e-'!,0l0(& %. ()!( !/(0+0(& (% ()e ,'0-e''.
The act of hiring and re-hiring in various capacities is a mere gam&it
employed &y petitioner to th,art the tenurial protection of private
respondent. #uch pattern of re-hiring and the recurring need for his services
are testament to the necessity and indispensa&ility of such services to
petitionersF &usiness or trade.
'S)DH=+ S ND) PRDI'C)2S'+SDN+L ',PLDJ''
The activity of catching :sh is a continuous process and could hardly &e
considered as seasonal in nature. In Phile. ,ining Corp. v. NLRC, $"%2e/(
e#$l%&ee' ,ere de:ned as those ,or$ers hired () for a speci:c pro=ect or
underta$ing, and (3) the completion or termination of such pro=ect has &een
determined at the time of the engagement of the employee.
The principal test for determining ,hether particular employees are Bpro=ect
employeesB as distinguished from Bregular employees,B is ,hether or not the
Bpro=ect employeesB ,ere assigned to carry out a Bspeci:c pro=ect or
Page 121 of 122
underta$ing,B the duration and scope of ,hich ,ere speci:ed at the time the
employees ,ere engaged for that pro=ect.
I- ()0' /!'e, $e(0(0%-e"' )!+e -%( ')%*- ()!( $"0+!(e "e'$%-de-( *!'
0-.%"#ed ()!( )e *0ll ,e !''0g-ed (% ! H'$e/01/ $"%2e/( %"
-de"(!30-g.H
6either has it &een esta&lished that he ,as informed of the duration and
scope of such pro=ect or underta$ing at the time of their engagement.
5ore to the point, in ,araguinot, Ir. v. NLRC, the #8 ruled that once a pro=ect
or ,or$ pool employee has &een@
() continuously, as opposed to intermittently, re-hired &y the
same employer for the same tas$s or nature of tas$sA !-d
(3) these tas$s are vital, necessary and indispensa&le to the
usual &usiness or trade of the employer, then the employee
must &e deemed a regular employee.
In :ne, inasmuch as private respondentFs functions as descri&ed a&ove are no
dou&t Busually necessary or desira&le in the usual &usiness or tradeB of
petitioner :shing company and he ,as hired continuously for 3 years for the
same nature of tas$s, ,e are constrained to say that he &elongs to the il$ of
regular employee.
Eeing one, private respondentFs dismissal ,ithout valid cause ,as illegal.
0nd, ,here illegal dismissal is proven, the ,or$er is entitled to &ac$ ,ages
and other similar &ene:ts ,ithout deductions or conditions.
Page 122 of 122