PHILIPS SEMICONDUCTORS (PHILS.), INC., petitioner, vs. ELOISA FADRIQUELA, respondent.

FACTS: The petitioner Philips Semiconductors is a domestic corporation engaged in the production and
assembly of semiconductors such as power devices, RF modules, CATV modules, RF and metal
transistors and glass diods. It caters to domestic and foreign corporations that manufacture computers,
telecommunications equipment and cars. Aside from contractual employees, the petitioner employed 1,029
regular workers. The employees were subjected to periodic performance appraisal based on output,
quality, attendance and work attitude.[2] One was required to obtain a performance rating of at least 3.0 for
the period covered by the performance appraisal to maintain good standing as an employee.

Respondent, during her 5 consecutive contracts, got the following ratings: 3.15, 3.8, 3.4, and 2.8. The
reason for her failed mark on the last contract was her absences. She was then asked to explain such
absences but she failed to do the same. Subsequently, respondent’s supervisor recommended that her
employment be terminated due to habitual absenteeism. Thus, her contract of employment was no longer
renewed. Respondent then filed a complaint for illegal dismissal. On the other hand, petitioner contends
that respondent was not dismissed; her contract merely expired.

The Labor Arbiter and the NLRC based their decision on the CBA between the petitioner and the labor
union which provides that a contractual employee would only be considered a regular employee if he has
completed 17 months of service and a performance rating of at least 3.0. The respondent filed a motion for
reconsideration but the NLRC denied the same. On appeal, the CA reversed the decision of the NLRC.
Hence, this petition.

ISSUE: Whether or not respondent was still a contractual employee of the company.

HELD: The SC agreed with the appellate court. Article 280 of the Labor Code of the Philippines was
emplaced in our statute books to prevent the circumvention by unscrupulous employers of the employee’s
right to be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements
inconsistent with the concept of regular employment defined therein. The language of the law manifests the
intent to protect the tenurial interest of the worker who may be denied the rights and benefits due a regular
employee because of lopsided agreements with the economically powerful employer who can maneuver to
keep an employee on a casual or temporary status for as long as it is convenient to it. In tandem with
Article 281 of the Labor Code, Article 280 was designed to put an end to the pernicious practice of making
permanent casuals of our lowly employees by the simple expedient of extending to them temporary or
probationary appointments, ad infinitum.

The two kinds of regular employees under the law are (1) those engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who
have rendered at least one year of service, whether continuous or broken, with respect to the activities in
which they are employed. The primary standard to determine a regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the business or trade of
the employer. The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. If the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and continuing need for
its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business
of the employer. Hence, the employment is also considered regular, but only with respect to such activity
and while such activity exists. The law does not provide the qualification that the employee must first be
issued a regular appointment or must be declared as such before he can acquire a regular employee
status.

In this case, the original contract of employment had been extended or renewed four times, to the same
position, with the same chores. Such a continuing need for the services of the respondent is sufficient
evidence of the necessity and indispensability of her services to the petitioner’s business. By operation of
law, then, the respondent had attained the regular status of her employment with the petitioner, and is thus
entitled to security of tenure as provided for in Article 279 of the Labor Code.

The limited period specified in petitioner’s employment contract having been imposed precisely to
circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or
disregarded as contrary to public policy or morals. To uphold the contractual arrangement would, in effect,
permit the former to avoid hiring permanent or regular employees by simply hiring them on a temporary or
casual basis, thereby violating the employee’s security of tenure in their jobs.
Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers of security
of tenure and free them from the bondage of uncertainty of tenure woven by some employers into their
contracts of employment. The guarantee is an act of social justice. When a person has no property, his job
may possibly be his only possession or means of livelihood and those of his dependents. When a person
loses his job, his dependents suffer as well. The worker should therefor be protected and insulated against
any arbitrary deprivation of his job.

The ruling in Brent School, Inc. v. Zamora is also not applicable in this case because it could not be
supposed that private respondents and all other so-called “casual” workers of the petitioner KNOWINGLY
and VOLUNTARILY agreed to the employment contract. Almost always, they agree to any terms of an
employment contract just to get employed considering that it is difficult to find work given their ordinary
qualifications. Their freedom to contract is empty and hollow because theirs is the freedom to starve if they
refuse to work as casual or contractual workers. Indeed, to the unemployed, security of tenure has no
value. It could not then be said that petitioner and private respondents “dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former over the latter.

The petitioner’s reliance on the CBA is also misplaced. It is the express mandate of the CBA not to include
contractual employees within its coverage. Such being the case, we see no reason why an agreement
between the representative union and private respondent, delaying the regularization of contractual
employees, should bind petitioner as well as other contractual employees. Indeed, nothing could be more
unjust than to exclude contractual employees from the benefits of the CBA on the premise that the same
contains an exclusionary clause while at the same time invoke a collateral agreement entered into between
the parties to the CBA to prevent a contractual employee from attaining the status of a regular employee.

The CBA, during its lifetime, constitutes the law between the parties. Such being the rule, the
aforementioned CBA should be binding only upon private respondent and its regular employees who were
duly represented by the bargaining union. The agreement embodied in the “Minutes of Meeting” between
the representative union and private respondent, providing that contractual employees shall become
regular employees only after seventeen months of employment, cannot bind petitioner. Such a provision
runs contrary to law not only because contractual employees do not form part of the collective bargaining
unit which entered into the CBA with private respondent but also because of the Labor Code provision on
regularization. The law explicitly states that an employee who had rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee. The period set by
law is one year. The seventeen months provided by the “Minutes of Meeting” is obviously much longer. The
principle is well settled that the law forms part of and is read into every contract without the need for the
parties expressly making reference to it.

Petition is denied.

CASE DIGEST: GMA NETWORK, INC. v. CARLOS P. PABRIGA, et al.

FACTS:

Private respondents were engaged by petitioner for the latters operations in the
Technical Operations Center as Transmitter/VTR men, as Maintenance staff and as
Cameramen On July 19 1999 due to the miserable working conditions private
respondents were forced to file a complaint against petitioner before the NLRC
Regional Arbitration Branch No. VII Cebu City.

Private respondents filed an amended complaint raising the following additional issues
of 1) Unfair Labor Practice; 2) Illegal dismissal; and 3) Damages and Attorneys fees.

An amicable settlement between the parties was set but the same proved to be futile.

The Labor Arbiter dismissed the complaint of respondents for illegal dismissal and
unfair labor practice, but held petitioner liable for 13th month pay.

The NLRC reversed the Decision of the Labor Arbiter, and held that

a) All complainants are regular employees with respect to the particular activity to
which they were assigned, until it ceased to exist. As such, they are entitled to
payment of separation pay computed at one (1) month salary for every year of service;
b) They are not entitled to overtime pay and holiday pay; and
c) They are entitled to 13th month pay, night shift differential and service incentive
leave pay.

When Petitioner elevated the case to the CA via a Petition for Certiorari, it rendered
its Decision denying the petition for lack of merit. Hence, this present Petition for
Review on Certiorari.

ISSUES:

Did the CA err in finding the respondents as regular employees of the petitioner?

Did the CA err in awarding separation pay to the respondents absent a finding
that respondents were illegally dismissed?

HELD:

Respondents claim that they are regular employees of petitioner GMA Network, Inc.
The latter, on the other hand, interchangeably characterize respondents employment as
project and fixed period/fixed term employment.

ARTICLE 280. Regular and casual employment. The provisions of written

agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity actually exist.
Pursuant to the above-quoted Article 280 of the Labor Code, employees performing
activities which are usually necessary or desirable in the employers usual business or
trade can either be regular, project or seasonal employees, while, as a general rule,
those performing activities not usually necessary or desirable in the employers usual
business or trade are casual employees. The consequence of the distinction is found in
Article 279 of the Labor Code, which provides:

ARTICLE 279. Security of tenure. In cases of regular employment, the employer

shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.

On the other hand, the activities of project employees may or may not be usually
necessary or desirable in the usual business or trade of the employer.

The term "project" could also refer to, secondly, a particular job or undertaking that is
not within the regular business of the corporation. Such a job or undertaking must also
be identifiably separate and distinct from the ordinary or regular business operations
of the employer. The job or undertaking also begins and ends at determined or
determinable times. ALU-TUCP v. National Labor Relations Commission, G.R. No.
109902, August 2, 1994

The jobs and undertakings are clearly within the regular or usual business of the
employer company and are not identifiably distinct or separate from the other
undertakings of the company. There is no denying that the manning of the operations
center to air commercials, acting as transmitter/VTR men, maintaining the equipment,
and acting as cameramen are not undertakings separate or distinct from the business of
a broadcasting company.

In sum, we affirm the findings of the NLRC and the Court of Appeals that respondents
are regular employees of petitioner. As regular employees, they are entitled to security
of tenure and therefore their services may be terminated only for just or authorized
causes. Since petitioner failed to prove any just or authorized cause for their
termination, we are constrained to affirm the findings of the NLRC and the Court of
Appeals that they were illegally dismissed.

Since the respondents were illegally dismissed, they entitled to separation pay in lieu
of reinstatement.

As regards night shift differential, the Labor Code provides that every employee shall
be paid not less than ten percent (10%) of his regular wage for each hour of work
performed between ten o'clock in the evening and six o'clock in the morning. LABOR
CODE, Article 86

As employees of petitioner, respondents are entitled to the payment of this benefit in

accordance with the number of hours they worked from 10:00 p.m. to 6:00 a.m., if
any.

The matter of attorney's fees cannot be touched once and only in the fallo of the
decision, else, the award should be thrown out for being speculative and conjectural.
In the absence of a stipulation, attorney's fees are ordinarily not recoverable; otherwise
a premium shall be placed on the right to litigate. They are not awarded every time a
party wins a suit.

In the case at bar, the factual basis for the award of attorney's fees was not discussed
in the text of NLRC Decision. Thus, the Court constrained to delete the same.

Abasolo v. NLRC

Facts:
1. The private respondent La Union Tobacco (Lutorco), owned by See Lun Chan is
engaged in buying/processing of tobacco and its by-products. The petitioners worked
in respondent company but work was interrupted when Tabacalera took over the
Lutorco operations due to alleged losses. Aggrieved, the petitioners filed a complaint
for separation pay and dismissal. The respondent contended that it is exempt from
payment of separation pay and denied that there was termination of employees'
services.

2. The Labor Arbiter dismissed the complaint and held that the petitioners are not
entitled to separation benefits since Lutorco ceased operations due to serious
business losses. The NLRC affirmed said ruling.

Issue: W/N the petitioners are seasonal workers

RULING: No, the petitioners are considered regular and seasonal employees. They
performed services necessary and indispensable to Lutorco's business. The nature
of one's employment does not depend solely on the will or word of the employer nor
on the procedure of hiring and manner of designating the employee but on the
nature of the activity to be performed considering the employer's nature of business
and the duration and scope of work to be done.

As held in previous decisions, seasonal workers are those who are called to work
from time to time and are temporarily laid off during off-season are not separated
from service in said period but merely considered on-leave until re-employed.

FUJI TELEVISION NETWORK, INC. VS. ARLENE S. ESPIRITU

G.R. NO. 204944-45 DECEMBER 3, 2014

J. Leonen

FACTS: Arlene S. Espiritu (Arlene) was engaged by Fuji Television Network, Inc. (Fuji) as a
news correspondent/producer tasked to report Philippine news to Fuji through its Manila
Bureau field office. The employment contract was initially for one year, but was successively
renewed on a yearly basis with salary adjustments upon every renewal.

In January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her
condition, and the Chief of News Agency of Fuji, Yoshiki Aoki, informed the former that the
company had a problem with renewing her contract considering her condition. Arlene
insisted she was still fit to work as certified by her attending physician.

After a series of verbal and written communications, Arlene and Fuji signed a non-renewal
contract. In consideration thereof, Arlene acknowledged the receipt of the total amount of
her salary from March-May 2009, year-end bonus, mid-year bonus and separation pay.
However, Arlene executed the non-renewal contract under protest.

Arlene filed a complaint for illegal dismissal with the NCR Arbitration Branch of the NLRC,
alleging that she was forced to sign the non-renewal contract after Fuji came to know of her
illness. She also alleged that Fuji withheld her salaries and other benefits when she refused
to sign, and that she was left with no other recourse but to sign the non-renewal contract to
get her salaries.

ISSUES:

1. Was Arlene an independent contractor?

2. Was Arlene a regular employee?
3. Was Arlene illegally dismissed?
4. Did the Court of Appeals correctly awarded reinstatement, damages and
attorney’s fees?

LAWS:
Art. 280. Regular and casual employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph; Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while
such activity exist.

Art. 279. Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause of when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement.

Thus, on the right to security of tenure, no employee shall be dismissed, unless there are just
or authorized causes and only after compliance with procedural and substantive due
process is conducted.

Art. 284. Disease as ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month
salary or to one-half (1/2) month salary for every year of service, whichever is greater, a
fraction of at least six (6) months being considered as one (1) whole year.

Book VI, Rule 1, Section 8 of the Omnibus Rules Implementing the Labor Code. Disease as
a ground for dismissal. – Where the employee suffers from a disease and his continued
employment is prohibited by law or prejudicial to his health or to the health of his co-
employees, the employer shall not terminate his employment unless there is a certification
by a competent public health authority that the disease is of such nature or at such a stage
that it cannot be cured within a period of six (6) months even with proper medical
treatment. If the disease or ailment can be cured within the period, the employer shall not
terminate the employee but shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately upon the restoration of his
normal health.

CASE HISTORY:

Labor Arbiter dismissed the complaint and held that Arlene was not a regular employee but
an independent contractor.

The NLRC reversed the Labor Arbiter’s decision and ruled that Arlene was a regular
employee since she continuously rendered services that were necessary and desirable to
Fuji’s business.

The Court of Appeals affirmed that NLRC ruling with modification that Fuji immediately
reinstate Arlene to her position without loss of seniority rights and that she be paid her
backwages and other emoluments withheld from her. The Court of Appeals agreed with the
NLRC that Arlene was a regular employee, engaged to perform work that was necessary or
desirable in the business of Fuji, and the successive renewals of her fixed-term contract
resulted in regular employment. The case of Sonza does not apply in the case because Arlene
was not contracted on account of a special talent or skill. Arlene was illegally dismissed
because Fuji failed to comply with the requirements of substantive and procedural due
process. Arlene, in fact, signed the non-renewal contract under protest as she was left
without a choice.

Fuji filed a petition for review on certiorari under Rule 45 before the Supreme Court,
alleging that Arlene was hired as an independent contractor; that Fuji had no control over
her work; that the employment contracts were renewed upon Arlene’s insistence; that there
was no illegal dismissal because she freely agreed not to renew her fixed-term contract as
evidenced by her email correspondences.
Arlene filed a manifestation stating that the SC could not take jurisdiction over the case since
Fuji failed to authorize Corazon Acerden, the assigned attorney-in-fact for Fuji, to sign the
verification.

RULING:

1. Arlene was not an independent contractor.

Fuji alleged that Arlene was an independent contractor citing the Sonzacase. She was hired
because of her skills. Her salary was higher than the normal rate. She had the power to
bargain with her employer. Her contract was for a fixed term. It also stated that Arlene was
not forced to sign the non-renewal agreement, considering that she sent an email with
another version of her non-renewal agreement.

Arlene argued (1) that she was a regular employee because Fuji had control and supervision
over her work; (2) that she based her work on instructions from Fuji; (3) that the successive
renewal of her contracts for four years indicated that her work was necessary and desirable;
(4) that the payment of separation pay indicated that she was a regular employee; (5) that
the Sonzacase is not applicable because she was a plain reporter for Fuji; (6) that her illness
was not a ground for her dismissal; (7) that she signed the non-renewal agreement because
she was not in a position to reject the same.

Distinctions among fixed-term employees, independent contractors, and regular

employees

Fixed Term Employment

1) The fixed period of employment was knowingly and voluntarily agreed upon by
the parties without any force, duress, or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent; or

2) It satisfactorily appears that the employer and the employee dealt with each other
on more or less equal terms with no moral dominance exercised by the former or the
latter.
These indications, which must be read together, make the Brent doctrine applicable
only in a few special cases wherein the employer and employee are on more or less
in equal footing in entering into the contract. The reason for this is evident: when a
prospective employee, on account of special skills or market forces, is in a position to
make demands upon the prospective employer, such prospective employee needs
less protection than the ordinary worker. Lesser limitations on the parties’ freedom
of contract are thus required for the protection of the employee. 155 (Citations
omitted)

For as long as the guidelines laid down in Brent are satisfied, this court will
recognize the validity of the fixed-term contract. (GMA Network, Inc. vs. Pabriga)
Independent Contractor

One who carries on a distinct and independent business and undertakes to perform
the job, work, or service on its own account and under one’s own responsibility
according to one’s own manner and method, free from the control and direction of
the principal in all matters connected with the performance of the work except as to
the results thereof.

No employer-employee relationship exists between the independent contractors and

their principals.

Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract

with another person for the performance of the former’s work, the employees of the
contractor and of the latter’s subcontractor, if any, shall be paid in accordance with
the provisions of this Code.

XXX
The Secretary of Labor and Employment may, by appropriate regulations, restrict or
prohibit the contracting-out of labor to protect the rights of workers established
under this Code. In so prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job contracting as well as
differentiations within these types of contracting and determine who among the
parties involved shall be considered the employer for purposes of this Code, to
prevent any violation or circumvention of any provision of this Code.

There is “labor-only” contracting where the person supplying workers to an

employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers recruited
and placed by such person are performing activities which are directly related to the
principal business of such employer. In such cases, the person or intermediary shall
be considered merely as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly employed by
him.

Department Order No. 18-A, Series of 2011, Section 3

(c) . . . an arrangement whereby a principal agrees to put out or farm out with a
contractor the performance or completion of a specific job, work or service within a
definite or predetermined period, regardless of whether such job, work or service is
to be performed or completed within or outside the premises of the principal.

This department order also states that there is a trilateral relationship in legitimate
job contracting and subcontracting arrangements among the principal, contractor,
and employees of the contractor. There is no employer-employee relationship
between the contractor and principal who engages the contractor’s services, but
there is an employer-employee relationship between the contractor and workers
hired to accomplish the work for the principal.162chanRoblesvirtualLawlibrary

Jurisprudence has recognized another kind of independent contractor: individuals

with unique skills and talents that set them apart from ordinary employees. There is
no trilateral relationship in this case because the independent contractor himself or
herself performs the work for the principal. In other words, the relationship is
bilateral.

XXX

There are different kinds of independent contractors: those engaged in legitimate job
contracting and those who have unique skills and talents that set them apart from
ordinary employees.

Since no employer-employee relationship exists between independent contractors

and their principals, their contracts are governed by the Civil Code provisions on
contracts and other applicable laws.
Regular Employees

Contracts of employment are different and have a higher level of regulation because
they are impressed with public interest. Article 13, Section 3 of the 1987 Constitution
provides full protection to labor.

Apart from the Constitutional guarantee, Article 1700 of the Civil Code states that
:The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.

In contracts of employment, the employer and the employee are not on equal
footing. Thus, it is subject to regulatory review by the labor tribunals and courts of
law. The law serves to equalize the unequal. The labor force is a special class that is
constitutionally protected because of the inequality between capital and labor.176 This
presupposes that the labor force is weak.

The level of protection to labor should vary from case to caese. When a prospective
employee, on account of special skills or market forces, is in a position to make demands
upon the prospective employer, such prospective employee needs less protection than the
ordinary worker.

The level of protection to labor must be determined on the basis of the nature of the work,
qualifications of the employee, and other relevant circumstances such as but not limited to
educational attainment and other special qualifications.

Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is
contradictory. Employees under fixed-term contracts cannot be independent contractors
because in fixed-term contracts, an employer-employee relationship exists. The test in this
kind of contract is not the necessity and desirability of the employee’s activities, “but the day
certain agreed upon by the parties for the commencement and termination of the
employment relationship.” For regular employees, the necessity and desirability of their
work in the usual course of the employer’s business are the determining factors. On the
other hand, independent contractors do not have employer-employee relationships with
their principals.

To determine the status of employment, the existence of employer-employee relationship

must first be settled with the use of the four-fold test, especially the qualifications for the
power to control.

The distinction is in this guise:

Rules that merely serve as guidelines towards the achievement of a mutually desired result
without dictating the means or methods to be employed creates no employer-employee
relationship; whereas those that control or fix the methodology and bind or restrict the party
hired to the use of such means creates the relationship.

In appliacation, Arlene was hired by Fuji as a news producer, but there was no evidence that
she was hired for her unique skills that would distinguish her from ordinary employees. Her
monthly salary appeared to be a substantial sum. Fuji had the power to dismiss Arlene, as
provided for in her employment contract. The contract also indicated that Fuji had control
over her work as she was rquired to report for 8 hours from Monday to Friday. Fuji gave her
instructions on what to report and even her mode of transportation in carrying out her
functions was controlled.

Therefore, Arlene could not be an independent contractor.

2. Arlene was a regular employee with a fixed-term contract.

In determining whether an employment should be considered regular or non-regular, the

applicable test is the reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The standard, supplied
by the law itself, is whether the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed by looking into the nature of
the services rendered and its relation to the general scheme under which the business or
trade is pursued in the usual course. It is distinguished from a specific undertaking that is
divorced from the normal activities required in carrying on the particular business or trade.

However, there may be a situation where an employee’s work is necessary but is not always
desirable in the usual course of business of the employer. In this situation, there is no regular
employment.

Fuji’s Manila Bureau Office is a small unit213 and has a few employees. Arlene had to do all
activities related to news gathering.

A news producer “plans and supervises newscast [and] works with reporters in the field
planning and gathering information, including monitoring and getting news stories,
rporting interviewing subjects in front of a video camera, submission of news and current
events reports pertaining to the Philippines, and traveling to the regional office in
Thailand.” She also had to report for work in Fuji’s office in Manila from Mondays to
Fridays, eight per day. She had no equipment and had to use the facilities of Fuji to
accomplish her tasks.
The successive renewals of her contract indicated the necessity and desirability of her work
in the usual course of Fuji’s business. Because of this, Arlene had become a regular employee
with the right to security of tenure.

Arlene’s contract indicating a fixed term did not automatically mean that she could never be
a regular employee. For as long as it was the employee who requested, or bargained, that the
contract have a “definite date of termination,” or that the fixed-term contract be freely
entered into by the employer and the employee, then the validity of the fixed-term contract
will be upheld.

3. Arlene was illegally dismissed.

As a regular employee, Arlene was entitled to security of tenure under Article 279 of the
Labor Code and could be dismissed only for just or authorized causaes and after observance
of due process.

The expiration of the contract does not negate the finding of illegal dismissal. The manner by
which Fuji informed Arlene of non-renewal through email a month after she informed Fuji
of her illness is tantamount to constructive dismissal. Further, Arlene was asked to sign a
letter of resignation prepared by Fuji. The existence of a fixed-term contract should not mean
that there can be no illegal dismissal. Due process must still be observed.

Moreoever, disease as a ground for termination under Article 284 of the Labor Code and
Book VI, Rule 1, Section 8 of the Omnibus Rules Implementing the Labor Code require two
requirements to be complied with: (1) the employee’s disease cannot be cured within six
months and his continued employment is prohibited by law or prejudicial to his health as
well as to the health of his co-employees; and (2) certification issued by a competent public
health authority that even with proper medical treatment, the disease cannot be cured
within six months. The burden of proving compliance with these requisites is on the
employer. Non-compliance leads to illegal dismissal. blesvirtualLawlibrary

Arlene was not accorded due process. After informing her employer of her lung cancer, she
was not given the chance to present medical certificates. Fuji immediately concluded that
Arlene could no longer perform her duties because of chemotherapy. Neither did it suggest
for her to take a leave. It did not present any certificate from a competent public health
authority.

Therefore, Arlene was illegally dismissed.

4. The Court of Appeals correctly awarded reinstatement, damages and

attorney’s fees.

The Court of Appeals awarded moral and exemplary damages and attorney’s fees. It also
ordered reinstatement, as the grounds when separation pay was awarded in lieu of
reinstatement were not proven.

The Labor Code provides in Article 279 that illegally dismissed employees are entitled to
reinstatement, backwages including allowances, and all other benefits.

Separation pay in lieu of reinstatement is allowed only (1) when the employer has ceased
operations; (2) when the employee’s position is no longer available; (3) strained relations;
and (4) a substantial period has lapsed from date of filing to date of finality.

The doctrine of strained relations should be strictly applied to avoid deprivation of the right
to reinstatement. In the case at bar, no evidence was presented by Fuji to prove that
reinstatement was no longer feasible. Fuji did not allege that it ceased operations or that
Arlene’s position was no longer feasible. Nothing showed that the reinstatement would
cause an atmosphere of antagonism in the workplace.

Moral damages are awarded “when the dismissal is attended by bad faith or fraud or
constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good
customs or public policy.” On the other hand, exemplary damages may be awarded when
the dismissal was effected “in a wanton, oppressive or malevolent manner.

After Arlene had informed Fuji of her cancer, she was informed that there would be
problems in renewing her contract on account of her condition. This information caused
Arlene mental anguish, serious anxiety, and wounded feelings. The manner of her dismissal
was effected in an oppressive approach with her salary and other benefits being withheld
until May 5, 2009, when she had no other choice but to sign the non-renewal contract.

With regard to the award of attorney’s fees, Article 111 of the Labor Code states that “[i]n
cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees
equivalent to ten percent of the amount of wages recovered.” In actions for recovery of
wages or where an employee was forced to litigate and, thus, incur expenses to protect his
rights and interest, the award of attorney’s fees is legally and morally justifiablen.”Due to
her illegal dismissal, Arlene was forced to litigate.

Therefore, the awards for reinstatement, damages and attorney’s fees were proper.

ABS-CBN BROADCASTING CORPORATION vs. MARLYN NAZARENO et al.

G.R. No. 164156
September 26, 2006

Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business
and owns a network of television and radio stations, whose operations revolve around the broadcast,
transmission, and relay of telecommunication signals. It sells and deals in or otherwise utilizes the airtime it
generates from its radio and television operations. It has a franchise as a broadcasting company, and was
likewise issued a license and authority to operate by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants
(PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in
the Cebu Broadcasting Station. On December 19, 1996, petitioner and the ABS-CBN Rank-and-File
Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from
December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of
the bargaining unit, respondents were not included to the CBA.

On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status,
Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and
13th Month Pay with Damages against the petitioner before the NLRC. The Labor Arbiter rendered
judgment in favor of the respondents, and declared that they were regular employees of petitioner as such,
they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter. Petitioner filed a
motion for reconsideration but CA dismissed it.

Issue: Whether or not the respondents were considered regular employees of ABS-CBN.

Ruling: The respondents are regular employees of ABS-CBN. It was held that where a person has
rendered at least one year of service, regardless of the nature of the activity performed, or where the work
is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason
being that a customary appointment is not indispensable before one may be formally declared as having
attained regular status.

In Universal Robina Corporation v. Catapang, the Court states that the primary standard, therefore, of
determining regular employment is the reasonable connection between the particular activity performed by
the employee in relation to the usual trade or business of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The connection can be
determined by considering the nature of work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing the job for at least a year, even
if the performance is not continuous and merely intermittent, the law deems repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but only with respect to such activity and while
such activity exists.

Additionally, respondents cannot be considered as project or program employees because no evidence

was presented to show that the duration and scope of the project were determined or specified at the time
of their engagement. In the case at bar, however, the employer-employee relationship between petitioner
and respondents has been proven. In the selection and engagement of respondents, no peculiar or unique
skill, talent or celebrity status was required from them because they were merely hired through petitioner’s
personnel department just like any ordinary employee. Respondents did not have the power to bargain for
huge talent fees, a circumstance negating independent contractual relationship. Respondents are highly
dependent on the petitioner for continued work. The degree of control and supervision exercised by
petitioner over respondents through its supervisors negates the allegation that respondents are
independent contractors.

The presumption is that when the work done is an integral part of the regular business of the employer and
when the worker, relative to the employer, does not furnish an independent business or professional
service, such work is a regular employment of such employee and not an independent contractor. As
regular employees, respondents are entitled to the benefits granted to all other regular employees of
petitioner under the CBA . Besides, only talent-artists were excluded from the CBA and not production
assistants who are regular employees of the respondents. Moreover, under Article 1702 of the New Civil
Code: “In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety
and decent living of the laborer.”

Universal Robina Sugar Milling & Cabati v. Acibo, et al. G.R. No. 186439 : JANUARY 15, 2014 UNIVERSAL
ROBINA SUGAR MILLING CORPORATION and RENE CABATI, Petitioners, v. FERDINAND ACIBO,
ROBERTO AGUILAR, EDDIE BALDOZA, RENE ABELLAR, DIOMEDES ALICOS, MIGUEL ALICOS, ROGELIO
AMAHIT, LARRY AMASCO, FELIPE BALANSAG, ROMEO BALANSAG, MANUEL BANGOT, ANDY BANJAO,
DIONISIO BENDIJO, JR., JOVENTINO BROCE, ENRICO LITERAL, RODGER RAMIREZ, BIENVENIDO
RODRIGUEZ, DIOCITO PALAGTIW, ERNIE SABLAN, RICHARD PANCHO, RODRIGO ESTRABELA, DANNY
KADUSALE and ALLYROBYL OLPUS, Respondents. BRION, J.:

FACTS: URSUMCO is a domestic corporation engaged in the sugarcane milling business; Cabati is URSUMCOs
Business Unit General Manager. The complainants were employees of URSUMCO, and were hired on various
dates between 1988 and 1996, and on different capacities, i.e., drivers, crane operators, bucket hookers,
welders, mechanics, laboratory attendants and aides, steel workers, carpenters, among others. The
complainants signed contracts of employment for a period of 1 month or for a given season, and were repeatedly
hired to perform the same duties and, for every engagement, were required to sign new employment contracts for
the same duration of one month or given season. On August 23, 2002, the complainants filed before the Labor
Arbiter complaints for regularization, entitlement to the benefits under the existing Collective Bargaining
Agreement (CBA), and attorneys fees. The Labor Arbiter dismissed the complaint in the decision dated October
9, 2002, for lack of merit. The Labor Arbiter pointed out that the complainants were required to perform several
projects that were not at all directly related to URSUMCOs main operations, and that they were project
employees, they could not be regularized since their respective employments end upon the completion of each
project. Also, complainants were not entitled to the benefits granted under the CBA that, as provided, covered
only the regular employees of URSUMCO. 7, out of the 22 original complainants, appealed the Labor Arbiters
ruling before the NLRC. NLRC reversed the Labor Arbiter's ruling; it declared the complainants are regular
URSUMCO employees because they performed activities which were usually necessary and desirable in the
usual trade or business of URSUMCO, and granted their monetary claims under the CBA. NLRC denied
petitioners motion for reconsideration. Petitioners elevated the case to the Court of Appeals (CA) via a petition for
certiorari. The CA granted in part the petition. It pointed out that the primary standard for determining regular
employment is the reasonable connection between a particular activity performed by the employee vis-vis the
usual trade or business of the employer. As the complainants have been performing their respective tasks for at
least one year, these same tasks, regardless of whether the performance was continuous or intermittent,
constitutes sufficient evidence of the necessity, if not indispensability, of the activity to URSUMCOs business. On
the claim for CBA benefits, however, the CA ruled that the complainants were not entitled to receive them. CA
pointed out that the CBA covered regular employees of URSUMCO performing tasks needed by the latter for the
entire year with no regard to the changing sugar milling season. For collective bargaining purposes, they
constitute a bargaining unit separate and distinct from the regular employees. The petitioner filed a petition for
review on certiorari after the CA denied their motion for partial reconsideration.

ISSUE: Whether or not the respondents are regular employees of URSUMCO?

HELD: The respondents are regular seasonal employees of URSUMCO LABOR LAW : regular seasonal
employees Article 280 of the Labor Code provides for three kinds of employment arrangements, namely: regular,
project/seasonal and casual. Regular employment refers to that arrangement whereby the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer. By way of an exception, paragraph 2, Article 280 of the Labor Code also considers regular a casual
employment arrangement when the casual employees engagement has lasted for at least one year, regardless of
the engagements continuity. The controlling test in this arrangement is the length of time during which the
employee is engaged. Project employment, on the other hand, contemplates on arrangement whereby the
employment has been fixed for a specific project or undertaking whose completion or termination has been
determined at the time of the engagement of the employee. The services of the project employees are legally and
automatically terminated upon the end or completion of the project as the employees services are coterminous
with the project. Seasonal employment operates much in the same way as project employment, albeit it involves
work or service that is seasonal in nature or lasting for the duration of the season. To exclude the asserted
seasonal employee from those classified as regular employees, the employer must show that: (1) the employee
must be performing work or services that are seasonal in nature; and (2) he had been employed for the duration
of the season. Hence, when the seasonal workers are continuously and repeatedly hired to perform the same
tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise
serve as badge of regular employment. Casual employment refers to any other employment arrangement that
does not fall under any of the first two categories. In the case at bar, the respondents were made to perform
various tasks that did not at all pertain to any specific phase of URSUMCO's strict milling operations that would
ultimately cease upon completion of a particular phase in the milling of sugar; rather, they were tasked to perform
duties regularly and habitually needed in URSUMCO's operations during the milling season. The respondents
duties as loader operators, hookers, crane operators and drivers were necessary to haul and transport the
sugarcane from the plantation to the mill; laboratory attendants, workers and laborers to mill the sugar; and
welders, carpenters and utility workers to ensure the smooth and continuous operation of the mill for the duration
of the milling season, as distinguished from the production of the sugarcane which involves the planting and
raising of the sugarcane until it ripens for milling. They perform activities that are necessary and desirable in
sugarcane production. Also, the respondents were regularly and repeatedly hired to perform the same tasks year
after year. This regular and repeated hiring of the same workers (two different sets) for two separate seasons has
put in place, principally through jurisprudence, the system of regular seasonal employment in the sugar industry
and other industries with a similar nature of operations. Therefore, the nature of the employment does not
depend solely on the will or word of the employer or on the procedure for hiring and the manner of designating
the employee. Rather, the nature of the employment depends on the nature of the activities to be performed by
the employee, considering the nature of the employers business, the duration and scope to be done, and, in
some cases, even the length of time of the performance and its continued existence. The NLRC acted in grave
abuse of discretion when it declared the respondents regular employees of URSUMCO without qualification and
that they were entitled to the benefits granted under the CBA, to URSUMCO's regular employees. We also find
that the CA grossly misread the NLRC ruling and missed the implications of the respondents regularization. To
reiterate, the respondents are regular seasonal employees, as the CA itself opined when it declared that private
respondents who are regular workers with respect to their seasonal tasks or activities and while such activities
exist, cannot automatically be governed by the CBA between petitioner URSUMCO and the authorized
bargaining representative of the regular and permanent employees.