12 --------- G.R. No.

164078, 2007 November 23

AMA COMPUTER COLLEGE, PARAÑAQUE, versus ROLANDO A. AUSTRIA

NACHURA, J.:

Facts:

The respondent, Rolando Austria, was appointed as Dean of AMA Computer College, Parañaque
(AMA) from April to September 2000. The Memorandum of his appointment states that he shall be
evaluated by his superior and must the standard set by the latter; otherwise he shall be reverted back
to his faculty position. Moreover, the school handbook provides that respondent must complete the
three-month probationary period before he may be deemed a regular employee.

Sometime in August 2000, respondent was charged with leaking test questions, failure to monitor
general requirements vital to the operations of the company and gross inefficiency. Such charges
were refuted by the respondent in a memorandum. He was first placed on a preventive suspension
until such time his services was terminated on September of 2000. Thereafter, respondent filed a
complaint for illegal dismissal.

The Labor Arbiter, the NLRC and the Court of Appeals are one in finding that the respondent was a
regular employee and that he has sufficiently refuted the charges against him; as such, there was no
ground for the petitioner to dismiss him.

Issues:

1. What is the nature of respondent's employment?

2. Was he lawfully dismissed?

Ruling:

(1) The nature of respondent's employment as dean is one with a FIXED TERM.

There is nothing essentially contradictory between a definite period of employment and the nature of
the employee’s duties. Even if the duties of the employee consist of activities necessary or desirable
in the usual business of the employer, the parties are free to agree on a fixed period of time for
the performance of such activities.

The decisive determinant in term employment should not be the activities that the employee i
s called upon to perform, but the day certain agreed upon by the parties for the commence
ment and termination of their employment relationship, a day certain being understood to be
"that which must necessarily come, although it may not be known when."

Moreover, the Court took notice that appointments of administrative offices in educational
institutions, such as deanship, are by practice or tradition, with a fixed term as it is rotated among
the faculty members.

In this case, when the respondent assumed the position and performed the functions of a dean, it
clearly indicated that he voluntarily accepted the employment and consented to the terms and
conditions thereof; Hence, a recognition that his employment was for a fixed term. The application of
the probationary period is thus in misplaced; the respondent has not attained regular status. The
tenured status of his employment co-exists and is co-terminous only with the definite term fixed in his
contract of employment, which is from April to September 2000.

(2) In view of the fixed-term employment of the respondent, it is gainsaid that his services as a dean
is deemed validly terminated upon expiration of its designated period.

It is axiomatic that a contract of employment for a definite period terminates on its own force at the
end of such period. The lack of notice of termination is of no consequence because when the contract
specifies the length of its duration, it comes to an end upon the expiration of such period.

Thus, the finding of the Labor Arbiter, the NLRC and the CA that respondent adequately refuted all
the charges against him assumes relevance only insofar as respondent’s dismissal from the service
was effected by petitioners before expiration of the fixed period of employment. Hence, respondent
cannot claim entitlement to any benefit flowing from such employment after September 17, 2000,
because the employment, which is the source of the benefits, had, by then, already ceased to exist.
13 --------- G.R. No. 160905 July 4, 2008

BIENVENIDO D. GOMA versus PAMPLONA PLANTATION INCORPORATED

NACHURA, J.:

Facts:

Petitioner claimed that he was a regular employee working as a carpenter at the Hacienda Pamplona
since 1995; that he worked daily with a salary paid on a weekly basis; that he worked continuously
until 1997 when the respondent to refused without just cause give him work assignment; and that, as
such, he has been illegally dismissed. Respondent countered that it was the former owner of the
Hacienda who employed the petitioner and that they were not obliged to absorb.

The Labor Arbiter concluded that petitioner was hired by the former owner, hence, was not an
employee of the respondent. The NLRC upheld the existence of an employer-employee relationship
and found that there was illegal dismissal. The CA concluded that there was no employer-employee
relationship.

Issues:

1. Is the petitioner a regular employee of the respondent?

2. Was he illegally dismissed from employment?

Ruling:

(1) The petitioner is a regular employee of respondent.

To establish the fact of employment, the Supreme Court probed into the existence of an employer-
employee relationship between the parties in the case. Although such matter is a question of fact and
is actually within the jurisdiction of the lower courts, the Court proceeded to answer the same
considering that the findings of the CA are at odds with those of the NLRC.

Accordingly, the Court found that an employment relationship existed between the respondent and
the petitioner when the former eventually admitted having hired the latter as a project employee.
Instead of specifically and squarely denying that the petitioner was its regular employee, the
respondent qualified the nature of his employment as a project employee. The allegation of the
respondent being a negative pregnant, it is deemed admitted.

An employer-employee relationship having established, the Court pronounced that the petitioner is a
regular employee by operation of law, owing to the length of service he has rendered for the
Hacienda.

From the provision of Article 280 of the labor Code, there are two kinds of regular employees,
namely: (1) A Regular Employee by the Nature of his Work – those who are engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; and
(2) A Regular Employee by Years of Service – those who have rendered at least one year of service,
whether continuous or broken, with respect to the activity in which they are employed.
In his case, the petitioner was engaged to perform carpentry work from 1995 to 1997; until the
respondent decided not to give him work assignment anymore. In working for the respondent for a
period of two years, petitioner became a regular employee, by operation of law.

In contrast to the allegation of the respondent that it hired the petitioner as a project employee, they
were not able to show that the latter was informed that he was informed that he would be assigned to
undertake a specific project as well as its duration. Also, there was no report on the termination of
petitioner’s supposed project employment to the DOLE. The attendant circumstances indicate that the
petitioner was not a project but a regular employee.

(2) The petitioner was illegally dismissed.

Well-established is the rule that regular employees enjoy security of tenure and they can only be
dismissed for just cause and with due process, i.e., after notice and hearing. In cases involving an
employee’s dismissal, the burden is on the employer to prove that the dismissal was legal.

The respondent was not able to discharge the burden of proving that the dismissal of the petitioner
was based on any just or authorized causes and that the right to procedural due process of the
employee was not violated. In view of the non-observance of both substantive and procedural due
process, the petitioner’s dismissal from employment is illegal.

Having shown that petitioner is a regular employee and that his dismissal was illegal, he is entitled to:
(1) full backwages, computed from the date of his illegal dismissal until the finality of this decision,
and (2) either reinstatement, if viable, or separation pay if reinstatement is no longer viable. In the
instant case, petitioner may be awarded separation pay considering the impracticality of
reinstatement. The separation pay shall be equivalent to petitioner’s one month pay, or one-half (1/2)
month pay for every year of service, whichever is higher, reckoned from his first day of employment
up to finality of the Court’s decision.
14 --------- G.R. No. 209499 January 28, 2015

MA. CHARITO C. GADIA, et. al., vs. SYKES ASIA, INC

PERLAS-BERNABE, J.:

Facts:

Sykes Asia (Sykes) is engaged in Business Process Outsourcing (BPO) with international clients whom they
enter into service contracts with. In 2003, Sykes hired petitioners as customer service representatives, team
leaders, and trainers for their project with Alltel Communications.

In 2009, Alltel informed Sykes of the termination of all support services it provides for the Alltel Project.
Thereafter, end-of-life notices were sent to the petitioners which prompted them to file separate complaints for
illegal dismissal against Sykes. Petitioners alleged that their dismissal from service was unjust as the same
was effected without substantive and procedural due process. In their defense, respondents averred that
petitioners were project-based employees, and as such, the termination of their project served as a valid
ground for the dismissal.

The LA found that petitioners are project-based employees, as indubitably stated in their employment contract;
and that their dismissal was based on a valid ground. On the hand, the NLRC ruled that the employment was
not project-based since the date of the termination of their project was neither determined nor made known to
petitioners beforehand. However, the CA reinstated the decision of the LA, adding that it is sufficient that the
date of the termination of employment be determinable, without need for the project-based employees to be
appraised of the actual date thereof.

Issues:

(1) Whether or not the petitioners are project-based employees; and

(2) Whether or not they are validly dismissed from service.

Ruling:

(1) The petitioners are project-based employees. Sykes has established by substantial evidence that the
petitioners were merely project-based employees.

In distinguishing between a project-based employee from a regular employee, Article 294 of the Labor Code
provides that: 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,
notwithstanding and regardless of a written or an oral agreement of the parties to the contrary. Meanwhile,
where such 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, the same is deemed to be one
with a fixed-term.

On the one hand, jurisprudence provides, the principal test for determining whether particular employees are
properly characterized as "project-based" is whether or not the employees were assigned to carry out a
"specific project or undertaking," the duration and scope of which were specified at the time they were engaged
for that project. Although the project could either be a particular job or undertaking that is within the regular or
usual business of the employer company, but which is distinct and separate, and identifiable as such, from the
other undertakings of the company, or, not within the regular business of the corporation.

Verily, the employer must show compliance with two requisites for his particular employees to be considered
as project-based employees, namely that: (1) the employee was assigned to carry out a specific project or
undertaking; and (2) the duration and scope of which were specified at the time they were engaged for such
project.
In this case, the employment contracts of the petitioners state that they were hired in connection with the Alltel
Project and that their positions were “project-based and as such is co-terminus to the project”. Considering that
they were hired to carry out a specific project, the Alltel Project and that they were adequately informed of the
scope and duration of their employment status at the time of their engagement, the petitioner are, therefore,
properly characterized as project-based employees.

(1) The petitioners are validly dismissed from service. Being merely project-based employees, the services
of the petitioners were lawfully terminated upon the cessation of the Alltel Project.

A project employee is assigned to a project which begins and ends at determined or determinable times. The
services of employees who are hired as project-based may be lawfully terminated at the completion of the
project. The phrase ‘determinable times’ simply means capable of being determined or fixed."

In this case, since the petitioners’ employment contracts expressly indicated in that their positions were "co-
terminus with the project", it is deemed that petitioners were sufficiently apprised that their security of tenure
with Sykes would only last as long as the Alltel Project was subsisting. Accordingly, when the Alltel Project was
terminated, petitioners no longer had any project to work on, and hence, Sykes may validly terminate them
from employment. Further, Sykes duly submitted to DOLE a report regarding the cessation of the project and
the list of employees that would be affected; such is an indication that the employment was indeed project-
based.

In sum, respondents have shown by substantial evidence that petitioners were merely project-based
employees, and as such, their services were lawfully terminated upon the cessation of the Alltel Project.
15 --------- G.R. No. 204406 February 26, 2014

MALICDEM and FLORES vs. MARULAS INDUSTRIAL CORPORATION and MIKE MANCILLA

MENDOZA, J.:

Facts:

Malicdem and Flores were first hired by Marulas as extruder operators in 2006 under an employment
contract for a period of one year. Every year thereafter, they would sign a Resignation/Quitclaim in
favor of Marulas a day after their contracts ended, and then sign another contract for one (1) year.
Until in 2010 and in 2011, respectively, Flores and Malicdem were told not to report for work anymore
after being asked to sign a paper to the effect that they acknowledged the completion of his
contractual status. Thus, both claimed to have been illegally dismissed.

In their defense, Marulas countered that their contracts showed that petitioners were fixed-term
employees for a specific undertaking which was to work on a particular order of a customer for a
specific period. Their severance from employment was due to the expiration of their contracts

The LA and the NLRC were one in saying that petitioners were project employees, that their services
were terminated upon the expiration of their employment contracts, and that, corollarily, there was no
illegal dismissal. The CA accorded due consideration to the factual findings of both tribunals.

Issue:

Whether or not the repeated and successive rehiring of petitioners as project employees
qualify them as regular employees.

Ruling:

The petitioners have convincingly shown that they should be considered regular employees.

Under Article 281 of the Labor Code, however, "an employee who is allowed to work after a
probationary period shall be considered a regular employee." When an employer renews a contract of
employment after the lapse of the six-month probationary period, the employee thereby becomes a
regular employee. While length of time is not the controlling test for project employment, it is vital in
determining if the employee was hired for a specific undertaking or tasked to perform functions vital,
necessary and indispensable to the usual business of trade of the employer.

It was ruled in the earlier case of Maraguinot, Jr. v. NLRC that a project or work pool employee, who
has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same
tasks or nature of tasks; and (2) those tasks are vital, necessary and indispensable to the usual
business or trade of the employer, must be deemed a regular employee.

In this case, the contract of employment states no specific project or undertaking. The only
stipulations in the contracts were the dates of their effectivity, the duties and responsibilities of the
petitioners, compensation and allowances, and the rights and obligations of the parties. The
petitioners were also repeatedly hired by respondent from 2006 to 2010 and 2011 as extruder
operators, a task that is necessary and indispensable to the business of the employer in the
manufacturing of sacks.
Furthermore, the court viewed the arrangement under the employment contract of the petitioners and
the respondent was an indication of a deliberate intent of the latter to prevent the regularization of
their employees. The project employment contracts that the petitioners were made to sign every year
since the start of their employment were only a stratagem to violate their security of tenure in the
company. The respondents cannot use the alleged expiration of the employment contracts of the
petitioners as a shield of their illegal acts.

At any rate, the petitioners therefore must be deemed as regular employee since there was no actual
project and that were continuously rehired by the same employer for the same position.