G.R. No.
211892, December 06, 2017 The NLRC, on May 31, 2011, affirmed the LA Ruling with modification, to wit:
INNODATA KNOWLEDGE SERVICES, INC., Petitioner, v. SOCORRO D'MARIE T.
INTING, ISMAEL R. GARAYGAY, EDSON S. SOLIS, MICHAEL A. REBATO, JAMES
HORACE BALONDA, STEPHEN C. OLINGAY, DENNIS C. RIZON, JUNETH A.
RENTUMA, HERNAN ED NOEL I. DE LEON, JR., JESS VINCENT A. DELA PEÑA,
RONAN V. ALAMILLO, ENNOH CHENTIS R. FERNANDEZ, FRITZ J. SEMBRINO,
DAX MATTHEW M. QUIJANO, RODOLFO M. VASQUEZ, MA. NAZELLE B.
MIRALLES, MICHAEL RAY B. MOLDE, WENDELL B. QUIBAN, ALDRIN O.
TORRENTIRA, AND CARL HERMES CARSKIT, Respondents.
DECISION
PERALTA, J.:
This is a petition for review seeking the reversal of the Decision1 of the Court of
Appeals (CA), Cebu, Twentieth (20th) Division, dated August 30, 2013 and its
Resolution2 dated March 12, 2014 in CA-G.R. CEB-SP No. 06443 which reversed
and set aside Decision3 of the National Labor Relations Commission (NLRC) on
May 31, 2011.
The factual and procedural antecedents, as evidenced by the records of the case,
are the following:
Petitioner Innodata Knowledge Services, Inc. (IKSI) is a company engaged in data
processing, encoding, indexing, abstracting, typesetting, imaging, and other
processes in the capture, conversion, and storage of data and information. At
one time, Applied Computer Technologies (ACT), a company based in the United
States of America, hired IKSI to review various litigation documents. Due to the
nature of the job, ACT required IKSI to hire lawyers, or at least, law graduates, to
review various litigation documents, classify said documents into the prescribed
categories, and ensure that outputs are delivered on time. For this purpose, IKSI
engaged the services of respondents Socorro D'Marie Inting, Ismael R. Garaygay,
Edson S. Solis, Michael A. Rebato, James Horace Balonda, Stephen C. Olingay,
Dennis C. Rizon, Juneth A. Rentuma, Hernan Ed Noel I. de Leon, Jr., Jess Vincent
A. dela Peña, Ronan V. Alamillo, Ennoh Chentis R. Fernandez, Wendell B. Quiban,
Aldrin O. Torrentira, Michael Ray B. Molde, Fritz J. Sembrino, Dax Matthew M.
Quijano, Rodolfo M. Vasquez, Ma. Nazelle B. Miralles and Carl Hermes Carskit as
senior and junior reviewers with a contract duration of five (5) years.
On January 7, 2010, however, respondents received a Notice of Forced Leave
from IKSI informing them that they shall be placed on indefinite forced leave
effective that same day due to changes in business conditions, client
requirements, and specifications. Hence, respondents filed a complaint for illegal
dismissal, reinstatement or payment of separation pay, backwages, and damages
against IKSI.
Subsequently, IKSI sent respondents separate notices dated May 27, 2010
informing them that due to the unavailability of new work related to the product
stream and uncertainties pertaining to the arrival of new workloads, their project
employment contracts would have to be terminated.
On November 10, 2010, the Labor Arbiter (LA), in the consolidated cases of NLRC
RAB VII Case No. 01-0159-10, NLRC RAB VII Case No. 01-0182-10, and NLRC RAB
VII Case No. 02-0301-10, declared that there was no illegal dismissal, thus:
WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring
that complainants were not constructively dismissed but were placed on forced
leave as a cost-saving measure. Consequently, herein respondents are directed
to recall complainants back to work as soon as work becomes available.
Complainants are likewise directed to report back to work within ten (10) days
from receipt of the order of respondents to report back to work, otherwise, their
failure to do so would be construed as an abandonment. In the event that
reinstatement is no longer feasible, in lieu thereof, separation pay is granted
equivalent to one (1) month salary for every year of service, a fraction of six (6)
months is considered as one (1) whole year, sans backwages.
The claim for moral and exemplary damages as well as attorney's fees are
DISMISSED for lack of merit.
SO ORDERED.4
WHEREFORE, the Decision of the Labor Arbiter is hereby AFFIRMED WITH
MODIFICATION, in that in lieu of reinstatement, to pay the twelve (12)
complainants-appellants namely: Michael A. Rebato, Hernan Ed Noel L. de Leon,
Jr., Wendell B. Quiban, Fritz Sembrino, Ismael R. Garaygay III, Edson S. Solis,
Stephen Olingay, Ronan Alamillo, Jess Vincent A. dela Peña, Dax Matthew M.
Quijano, Juneth A. Rentuma and Socorro D'Marie T. Inting, the total amount of
Php563,500.00.
SO ORDERED.5
Undaunted, the employees elevated the matter to the CA Cebu, alleging grave
abuse of discretion on the NLRC's part. On August 30, 2013, the CA granted their
petition and reversed the assailed NLRC ruling, thus:
WHEREFORE, premises considered, this petition is GRANTED. The
assailed Decisiondated May 31, 2011 and Resolution dated August 26, 2011 of
public respondent in NLRC Case No. VAC-01-000042-2011 are REVERSED and SET
ASIDE. Petitioners Socorro D'Marie Inting, Ismael R. Garaygay, Edson S. Solis,
Michael A. Rebato, James Horace Balonda, Stephen C. Olingay, Dennis C. Rizon,
Juneth A. Rentuma, Hernan Ed Noel I. de Leon, Jr., Jess Vincent A. dela Peña,
Ronan V. Alamillo, Ennoh Chentis R. Fernandez, Wendell B. Quiban, Aldrin O.
Torrentira, Michael Ray B. Molde, Fritz J. Sembrino, Dax Matthew M. Quijano,
Rodolfo M. Vasquez, Ma. Nazelle B. Miralles and Carl Hermes Carskit are
declared to have been illegally dismissed by Innodata and hence, each of them is
entitled to the payment of the following:
a) Backwages reckoned from the start of their employment up to the finality of
this Decision with interest as six percent (6%) per annum, and 12% legal interest
thereafter until fully paid;
(b) Separation pay equivalent to one (1) month salary for every year of service,
with a fraction of at least six (6) months to be considered as one (1) whole year,
to be computed from the date of their employment up to the finality of this
decision;
(c) Moral damages of Php50,000 and exemplary damages of Php25,000; and
(d) Attorney's fees equivalent to 10 percent (10%) of the total award.
The case is hereby ordered REMANDED to the labor arbiter for the computation
of the amounts due each petitioner.
Costs on private respondent Innodata.
SO ORDERED.6
IKSI then filed a Motion for Reconsideration, but the same was denied in a
Resolution dated March 12, 2014. Hence, the instant petition.
The main issue in this case is whether or not the CA committed an error when it
reversed the NLRC, which declared that respondent employees, as mere project
employees, were validly placed on floating status and, therefore, were not
illegally dismissed.
The Court rules in the negative.
Substantive Issues
Nature of respondents' employment contracts
It is true that factual findings of administrative or quasi-judicial bodies which are
deemed to have acquired expertise in matters within their respective
jurisdictions are generally accorded, not only respect, but even finality, and bind
the Court when supported by substantial evidence. However, the Court may take
cognizance of factual issues when the findings of fact and conclusions of law of
the LA and/or the NLRC are inconsistent with those of the CA,7 as in the case at
bar.
Here, the NLRC ruled that respondents were project employees. It ratiocinated
that their contracts specifically indicated that they were to hold their positions
for the duration of the project which was expected to be completed after a
maximum of five (5) years, or on or before July 2, 2013.8 But the CA found that
respondents' employment contracts are fixed-term, which are contrary to the
Constitution and labor laws. It then cited several cases9 that supposedly involved
IKSI itself and would reveal that its fixed term employment contracts have been
consistently held as a form of circumvention to prevent employees from
acquiring tenurial rights and benefits.
The employment status of a person is defined and prescribed by law and not by
what the parties say it should be. Equally important to consider is that a contract
of employment is impressed with public interest such that labor contracts must
yield to the common good. Thus, provisions of applicable statutes are deemed
written into the contract, and the parties are never at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations
by simply entering into contracts with each other.10
Article 29511 of the Labor Code provides the distinction between a regular and a
project employment:
Art. 295. Regular and casual employment. - The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
The aforecited provision contemplates four (4) kinds of employees: (1) regular
employees or those who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer;
(2) project employees or those whose 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; (3) seasonal
employees or those who work or perform services which are seasonal in nature,
and the employment is for the duration of the season; and (4) casual
employees or those who are not regular, project, or seasonal employees.
Jurisprudence later added a fifth (5th) kind, the fixed-term employee. Based on
Article 295, the law determines the nature of the employment, regardless of any
agreement expressing otherwise. The supremacy of the law over the
nomenclature of the contract and its pacts and conditions is to bring life to the
policy enshrined in the Constitution to afford full protection to labor. Thus, labor
contracts are placed on a higher plane than ordinary contracts since these are
imbued with public interest and, therefore, subject to the police power of the
State. 12
Project employment contracts, which fix the employment for a specific project or
undertaking, are valid under the law. By entering into such a contract, an
employee is deemed to understand that his employment is coterminous with the
project. He may no longer be employed after the completion of the project for
which he was hired. But project employment contracts are not lopsided
agreements in favor of only one party. The employer's interest is equally
important as that of the employees'. While it may be true that it is the employer
who drafts project employment contracts with its business interest as overriding
consideration, such contracts must not prejudice the employee.13
As stated in IKSI's petition itself, the following are the basic provisions of the
employment contracts which respondents signed with the company:
(a) the contracts are entitled "Project-Based Employment Contracts";
(b) the first Whereas clause states "the Company [IKSI] desires the services of a
Project Employee for the Content Supply Chain Project";
(c) Clause 1 on Term of Employment provides:
The Employee shall hold the position of [Junior/Senior] Reviewer and shall
perform the duties and responsibilities of such for the duration of the Project,
which is expected to be completed after a maximum of five (5) years, or on or
before ______, (the "Term").
. . . Further, the Employee is granted one Saturday off per month on a scheduled
basis for the duration of this PROJECT-BASED EMPLOYMENT CONTRACT...
(d) The second paragraph of Clause 2 on Work Description provides:
The Employee shall render work in accordance with the schedule and/or
program to which he/she may be assigned or reassigned from time to time, in
accordance with the operational requirements for the completion of the
Project. In addition, the Employee shall perform such other duties, functions,
and services related or incidental to the Project which, for purposes of
expediency, convenience, economy, customer interest, may be assigned by the
Company.
(e) Clause 5 on Termination of Employment provides:
At any time during the Term of this Contract, or any extension thereof, the
Company may terminate this Contract, upon thirty (30) days' prior notice to the
Employee.. .in the following instances:
a. the services contracted for by the Company under the Project is completed
prior to the agreed upon completion date; or
b. the specific phase of the Project requiring the Employee's services is sooner
completed; or
c. substantial decrease in the volume of work for the Project; or
d. the contract for the Project is cancelled, indefinitely suspended or
terminated;
(e) the first paragraph of Clause 6 on Compensation and Benefits provides:
The Employee shall receive a gross salary of ... In addition to his/her basic pay,
Management may grant an additional incentive pay should the Employee exceed
the Project quota.14
IKSI argued that based on the contract, it is undeniable that respondents'
employment was fixed for a specific project or undertaking, with its completion
or termination clearly determined at the time of the employee's engagement.
Indeed, records would disclose that respondents signed employment contracts
specifically indicating the Content Supply Chain Project,15 also known as the ACT
Project, as the project for which they were being hired, which was expected to
be completed after a maximum of five (5) years. However, sometime in
November 2008, IKSI required respondents to work on another project called
"Bloomberg," which was not included in the original contracts that they signed
and without entering into a new project employment contracts. Such fact was
never refuted by IKSI. During that time, respondents were required to read and
review decided cases in the United States of America and they were no longer
called Senior or Junior Reviewers, but referred to as Case Classifiers.
Respondents initially opposed working on said project but eventually agreed, in
fear of losing their employment altogether. Months later, they were again
required to work on the ACT Project and reverted to their previous designation
as Document Reviewers.16
In the case of ALU-TUCP v. NLRC,17 the Court made a pronouncement on the two
(2) categories of project employees. The project for which project employees are
hired would ordinarily have some relationship to the usual business of the
employer. There should be no difficulty in distinguishing the employees for a
certain project from ordinary or regular employees, as long as the duration and
scope of the project were determined or specified at the time of engagement of
said project employees.18
In order to safeguard the rights of workers against the arbitrary use of the word
"project" which prevents them from attaining regular status, employers claiming
that their workers are project employees have the burden of showing that: (a)
the duration and scope of the employment was specified at the time they were
engaged; and (b) there was indeed a project. 19 Therefore, as evident in Article
295, the litmus test for determining whether particular employees are properly
characterized as project employees, as distinguished from regular employees, 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 the
employees were engaged for that project.20
Here, while IKSI was able to show the presence of a specific project, the ACT
Project, in the contract and the alleged duration of the same, it failed to prove,
however, that respondents were in reality made to work only for that specific
project indicated in their employment documents and that it adequately
informed them of the duration and scope of said project at the time their
services were engaged. It is well settled that a party alleging a critical fact must
support his allegation with substantial evidence, as allegation is not evidence.
The fact is IKSI actually hired respondents to work, not only on the ACT Project,
but on other similar projects such as the Bloomberg. When respondents were
required to work on the Bloomberg project, without signing a new contract for
that purpose, it was already outside of the scope of the particular undertaking
for which they were hired; it was beyond the scope of their employment
contracts. The fact that the same happened only once is inconsequential. What
matters is that IKSI required respondents to work on a project which was
separate and distinct from the one they had signed up for. This act by IKSI
indubitably brought respondents outside the realm of the project employees
category.
IKSI likewise fell short in proving that the duration of the project was reasonably
determinable at the time respondents were hired. As earlier mentioned, the
employment contracts provided for "the duration of the Project, which is
expected to be completed after a maximum of five (5) years, or on or before
______ ." The NLRC upheld the same, finding that the contracts clearly provided
for the duration of the project which was expected to end after a maximum of
five (5) years, or on or before July 2, 2013. It is interesting to note, however, that
the five (5)-year period is not actually the duration of the project but merely that
of the employment contract. Naturally, therefore, not all of respondents'
employment would end on July 2, 2013, as the completion of the five (5)-year
period would depend on when each employee was employed, thus:21
Hiring Date Completion Date
Thus, while the CA erred in simply relying on the Court's rulings on previous
cases involving Innodata Phils., Inc. since there is no substantial proof that
Innodata Phils., Inc. and herein petitioner, IKSI, are one and the same entity, it
would appear, however, that respondents indeed entered into fixed-term
employment contracts with IKSI, contracts with a fixed period of five (5) years.
But project employment and fixed-term employment are not the same. While
the former requires a particular project, the duration of a fixed-term
employment agreed upon by the parties may be any day certain, which is
understood to be "that which must necessarily come although it may not be
known when." The decisive determinant in fixed-term employment is not the
activity that the employee is called upon to perform but the day certain agreed
upon by the parties for the commencement and termination of the employment
relationship.22
The Court has previously recognized the validity of fixed-term employment
contracts, but it has consistently held that this is more of an exception rather
than the general rule. Aware of the possibility of abuse in the utilization of fixed-
term employment contracts, the Court has declared that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down as
contrary to public policy or morals.23
It is evident that IKSI's contracts of employment are suspect for being highly
ambiguous. In effect, it sought to alternatively avail of project employment and
employment for a fixed term so as to preclude the regularization of respondents'
status. The fact that respondents were lawyers or law graduates who freely and
with full knowledge entered into an agreement with the company is
inconsequential. The utter disregard of public policy by the subject contracts
negates any argument that the agreement is the law between the parties24 and
that the fixed period was knowingly and voluntarily agreed upon by the parties.
In the interpretation of contracts, obscure words and provisions shall not favor
the party that caused the obscurity. Consequently, the terms of the present
contract should be construed strictly against the employer, for being the party
who prepared it.25 Verily, the private agreement of the parties can never prevail
over Article 1700 of the Civil Code, which states:
Art. 1700. The relation 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 special laws on labor
unions, collective bargaining, strikes and lockouts, closed shops, wages, working
conditions, hours of labor and similar subjects.

Carl Hermes R. Carskit Nov. 1, '07 May 31, '12 Thus, there were no valid fixed-term or project contracts and respondents were
Ismael R. Garaygay III Mar. 5, '08 Mar. 4, '13 IKSI's regular employees who could not be dismissed except for just or
Socorro D' Marie T. Inting Apr. 7, '08 Apr. 6, '13 authorized causes. Any ambiguity in said contracts must be resolved against the
James Horace A. Balonda May 12, '08 May 11, '13 company, especially because under Article 1702 of the Civil Code, in case of
Wendell B. Quiban May 12, '08 May 11, '13 doubt, all labor contracts shall be construed in favor of the worker. The Court
Fritz J. Sembrino May 12, '08 May 11, '13 cannot simply allow IKSI to construe otherwise what appears to be clear from
Edson S. Solis May 12, '08 May 11, '13 the wordings of the contract itself. The interpretation which IKSI seeks to conjure
Rodolfo M. Vasquez, Jr. May 12, '08 May 11, '13 is wholly unacceptable, as it would result in the violation of respondents' right to
Stephen C. Olingay May 16, '08 May 15, '13 security of tenure guaranteed in Section 3 of Article XIII of the Constitution and
Michael A. Rebato May 19, '08 May 18, '13 in Article 29426of the Labor Code.27
Ma. Nazelle B. Miralles May 21, '08 May 20, '13
Dennis C. Rizon July 3, '08 July 2, '13
Ronan V. Alamillo July 10, '08 July 9, '13 Presence of Just or Authorized Causes for Termination of Employment
Juneth A. Rentuma July 17, '08 July 16, '13
Jess Vincent A. Dela Peña Aug. 12, '08 Aug. 11, '13 Here, IKSI placed respondents on forced leave, temporary lay-off, or floating
Dax Matthew M. Quijano Nov. 17, '08 Nov. 16, '13 status in January 2010 for the alleged decline in the volume of work in the
Michael Ray B. Molde May 18, '09 May 17 ,'14 product stream where they were assigned. When respondents filed a complaint
Aldrin O. Torrentira May 25, '09 May 24, '14 for illegal dismissal, the LA dismissed the same for having been filed prematurely,
Ennoh Chentis R. Fernandez May 28, '09 May 27, '14 since placing employees on forced leave or floating status is a valid exercise of
Hernan Ed Noel L. De Leon, Jr. June 3, '09 June 2, '14 management prerogative and IKSI never really had an intention to terminate
their employment. It relied on the memoranda28 which IKSI issued to
This is precisely the reason why IKSI originally left a blank for the termination respondents, the tenor of which would show the intention to recall the affected
date because it varied for each employee. If respondents were truly project employees back to work once the company's condition improves. The NLRC
employees, as IKSI claims and as found by the NLRC, then the termination date affirmed the LA's ruling and declared that the fact of dismissal, whether legal or
would have been uniform for all of them. illegal, is absent in this case.
Among the authorized causes for termination under Article 29829 of the Labor
Code is retrenchment, or what is sometimes referred to as a lay-off, thus:
Art. 298. Closure of Establishment and Reduction of Personnel. The employer
may also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In case of termination due to
the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1)
month pay or to at least one (1) month pay for every year of service, whichever
is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to
one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one
(1) whole year.
Retrenchment is the severance of employment, through no fault of and without
prejudice to the employee, which management resorts to during the periods of
business recession, industrial depression, or seasonal fluctuations, or during lulls
caused by lack of orders, shortage of materials, conversion of the plant to a new
production program or the introduction of new methods or more efficient
machinery, or of automation. In other words, lay-off is an act of the employer of
dismissing employees because of losses in the operation, lack of work, and
considerable reduction on the volume of its business. However, a lay-off would
amount to dismissal only if it is permanent. When it is only temporary, the
employment status of the employee is not deemed terminated, but merely
suspended.30
Article 298, however, speaks of permanent retrenchment as opposed to
temporary lay-off, as in the present case. There is no specific provision of law
which treats of a temporary retrenchment or lay-off and provides for the
requisites in effecting it or a specific period or duration.31 Notably, in both
permanent and temporary lay-offs, the employer must act in good faith - that is,
one which is intended for the advancement of the employer's interest and not
for the purpose of defeating or circumventing the rights of the employees under
the law or under valid agreements.32
Certainly, the employees cannot forever be temporarily laid-off. Hence, in order
to remedy this situation or fill the hiatus, Article 30133 may be applied to set a
specific period wherein employees may remain temporarily laid-off or in floating
status.34 Article 301 states:
Art. 301. When Employment not Deemed Terminated. The bona-fide suspension
of the operation of a business or undertaking for a period not exceeding six (6)
months, or the fulfillment by the employee of a military or civic duty shall not
terminate employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates his
desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.
The law set six (6) months as the period where the operation of a business or
undertaking may be suspended, thereby also suspending the employment of the
employees concerned. The resulting temporary lay-off, wherein the employees
likewise cease to work, should also not last longer than six (6) months. After the
period of six (6) months, the employees should either then be recalled to work
or permanently retrenched following the requirements of the law. Failure to
comply with this requirement would be tantamount to dismissing the
employees, making the employer responsible for such dismissal.35 Elsewise
stated, an employer may validly put its employees on forced leave or floating
status upon bona fide suspension of the operation of its business for a period not
exceeding six (6) months. In such a case, there is no termination of the
employment of the employees, but only a temporary displacement. When the
suspension of the business operations, however, exceeds six (6) months, then
the employment of the employees would be deemed terminated,36 and the
employer would be held liable for the same.
Indeed, closure or suspension of operations for economic reasons is recognized
as a valid exercise of management prerogative. But the burden of proving, with
sufficient and convincing evidence, that said closure or suspension is bona
fide falls upon the employer. In the instant case, IKSI claims that its act of placing
respondents on forced leave after a decrease in work volume, subject to recall
upon availability of work, was a valid exercise of its right to lay-off, as an
essential component of its management prerogatives. The Court agrees with the
LA's pronouncement that requiring employees on forced leave is one of the cost-
saving measures adopted by the management in order to prevent further losses.
However, IKSI failed to discharge the burden of proof vested upon it. Having the
right should not be confused with the manner in which that right is exercised;
the employer cannot use it as a subterfuge to run afoul of the employees'
guaranteed right to security of tenure. The records are bereft of any evidence of
actual suspension of IKSI's business operations or even of the ACT Project alone.
In fact, while IKSI cited Article 301 to support the temporary lay-off of its
employees, it never alleged that it had actually suspended the subject
undertaking to justify such lay-off. It merely indicated changes in business
conditions and client requirements and specifications as its basis for the
implemented forced leave/lay-off.37
In light of the well-entrenched rule that the burden to prove the validity and
legality of the termination of employment falls on the employer, IKSI should have
established the bona fide suspension of its business operations or undertaking
that could legitimately lead to the temporary lay-off of its employees for a period
not exceeding six (6) months, in accordance with Article 301.38 The LA severely
erred when it sustained respondents' temporary retrenchment simply because
the volume of their work would sometimes decline, thus, several employees at
the ACT Project stream experienced unproductive time.39Considering the grave
consequences occasioned by retrenchment, whether permanent or temporary,
on the livelihood of the employees to be dismissed, and the avowed policy of the
State to afford full protection to labor and to assure the employee's right to
enjoy security of tenure, the Court stresses that not every loss incurred or
expected to be incurred by a company will justify retrenchment The losses must
be substantial and the retrenchment must be reasonably necessary to avert such
losses. The employer bears the burden of proving this allegation of the existence
or imminence of substantial losses, which by its nature is an affirmative defense.
It is the employer's duty to prove with clear and satisfactory evidence that
legitimate business reasons exist in actuality to justify any retrenchment. Failure
to do so would inevitably result in a finding that the dismissal is unjustified.
Otherwise, such ground for termination would be susceptible to abuse by
scheming employers who might be merely feigning business losses or reverses in
their business ventures to dispose of their employees.40
Here, IKSI never offered any evidence that would indicate the presence of a bona
fide suspension of its business operations or undertaking. IKSI's paramount
consideration should be the dire exigency of its business that compelled it to put
some of its employees temporarily out of work. This means that it should be able
to prove that it faced a clear and compelling economic reason which reasonably
constrained it to temporarily shut down its business operations or that of the
ACT Project, incidentally resulting in the temporary lay-off of its employees
assigned to said particular undertaking. Due to the grim economic repercussions
to the employees, IKSI must likewise bear the burden of proving that there were
no other available posts to which the employees temporarily put out of work
could be possibly assigned.41 Unfortunately, IKSI was not able to fulfill any of the
aforementioned duties. IKSI cannot simply rely solely on the alleged decline in
the volume of work for the ACT Project to support the temporary retrenchment
of respondents. Businesses, by their very nature, exist and thrive depending on
the continued patronage of their clients. Thus, to some degree, they are subject
to the whims of clients who may suddenly decide to discontinue patronizing
their services for a variety of reasons. Being inherent in any enterprise,
employers should not be allowed to take advantage of this entrepreneurial risk
and use it in a scheme to circumvent labor laws. Otherwise, no worker could
ever attain regular employment status.42 In fact, IKSI still continued its operations
and retained several employees who were also working on the ACT Project even
after the implementation of the January 2010 forced leave. Much worse, it
continued to hire new employees, with the same qualifications as some of
respondents, through paid advertisements and placements in Sunstar Cebu,43 a
local newspaper, dated February 24, 2010 and March 7, 2010. The placing of an
employee on floating status presupposes, among others, that there is less work
than there are employees. But if IKSI continued to hire new employees then it
can reasonably be assumed that there was a surplus of work available for its
existing employees. Hence, placing respondents on floating status was
unnecessary. If any, respondents - with their experience, knowledge, and
familiarity with the workings of the company - should be preferred to be given
new projects and not new hires who have little or no experience working for
IKSI.44
There being no valid suspension of business operations, IKSI's act amounted to
constructive dismissal of respondents since it could not validly put the latter on
forced leave or floating status pursuant to Article 301. And even assuming,
without admitting, that there was indeed suspension of operations, IKSI did not
recall the employees back to work or place them on valid permanent
retrenchment after the period of six (6) months, as required of them by law. IKSI
could not even use the completion of the duration of the alleged project as an
excuse for causing the termination of respondents’ employment. It must be
pointed out that the termination was made in 2010 and the expected
completion of the project in respondents' contracts was still in 2012 to 2014.
Also, if the Court would rely on IKSI's own Notice of Partial Appeal and
Memorandum on Partial Appeal45 before the NLRC dated December 10, 2010,
respondents might even had been put on floating status for a period exceeding
the required maximum of six (6) months. Evidence reveal that the assailed forced
leave took effect on January 7, 2010 and IKSI eventually sent its termination
letters four (4) months after, or on May 27, 2010, with the effectivity of said
termination being on July 7, 2010. But as of December 10, 2010, IKSI was still
insisting that respondents were never dismissed and were merely placed on
forced leave. It was only in its Comment on Complainants' Motion for
Reconsideration dated August 3, 2011 did IKSI admit the fact of dismissal when it
appended its own termination letters dated May 27, 2010.
But even on May 27, 2010, there was still no basis for IKSI to finally make the
retrenchment permanent. While it acknowledged the fact that respondents
could not be placed on an indefinite floating status, it still failed to present any
proof of a bona fide closing or cessation of operations or undertaking to warrant
the termination of respondents' employment. The termination letter46 reads:
As you are probably already been aware by now, our Product Stream ACTDR of
Project CSP, have been experiencing a considerably downward trend in terms of
workload. The Company has undertaken every effort to obtain new
commitments from its clients abroad in order to proceed with the expected
volume of work under the same product stream.
Unfortunately, however, it has become evident that despite said efforts being
exerted by the Company, the prospect of new work related to the product
stream coming in, remains uncertain at this point. Management has already
utilized all available options, which include placing its project employees on
forced leave. This, however, cannot go on indefinitely.
It is therefore, with deep regret, that we inform you that in view of the
unavailability of work of the aforementioned product stream as well as the
uncertainties pertaining to the arrival of new workloads thereof, we are
constrained to terminateyour Project Employment Contract in accordance with
the terms and conditions stated under the Termination of Employment of your
Project Employment Contract, effective 7/7/2010.
xxx
It bears to point out that said termination letter did not even state any of the
following valid grounds under the law as anchor for the dismissal:
Art. 297. Termination by Employer. An employer may terminate an employment
for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.47
Art. 298. Closure of Establishment and Reduction of Personnel. The employer
may also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In case of termination due to
the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1)
month pay or to at least one (1) month pay for every year of service, whichever
is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to
one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one
(1) whole year.
The NLRC likewise committed a grave error when it held that there was no basis
for respondents' reliance on the case of Bontia v. NLRC48 on the sole ground that,
in the present case, the employees were neither actually nor constructively
dismissed. The Court affirms respondents' contention that when IKSI feigned
suspension of operations and placed respondents on forced leave, the same had
already amounted to constructive dismissal. And when IKSI sent letters informing
them that they would be terminated effective July 7, 2010, respondents then
had been actually dismissed. In Bontia, the manner by which the employer
severed its relationship with its employees was remarkably similar to the one in
the case at bar, which was held to be an underhanded circumvention of the law.
Consolidated Plywood Industries summarily required its employees to sign
applications for forced leave deliberately crafted to be without an expiration
date, like in this case. This consequently created an uncertain situation which
necessarily discouraged, if not altogether prevented, the employees from
reporting, or determining when or whether to report for work. The Court further
ruled that even assuming that the company had a valid reason to suspend
operations and had filed the necessary notice with the Department of Labor and
Employment (DOLE), it still would not be a legitimate excuse to cursorily dismiss
employees without properly informing them of their rights and status or paying
their separation pay in case they were eventually laid off. Under the Labor Code,
separation pay is payable to an employee whose services are validly terminated
as a result of retrenchment, suspension, closure of business or disease. Thus, the
Court held that Consolidated Plywood's employees should, at the very least,
have been given separation pay and properly informed of their status so as not
to leave them in a quandary as to how they would properly respond to such a
situation.49 Similarly, respondents never received any separation pay when they
were terminated in July of 2010 since IKSI had been denying the existence of a
dismissal, whether actual or constructive.
Withal, in both permanent and temporary lay-offs, jurisprudence dictates that
the one (1)-month notice rule to both the DOLE and the employee under Article
298 is mandatory.50 Here, both the DOLE and respondents did not receive any
prior notice of the temporary lay-off. The DOLE Region VII Office was only
informed on January 11, 201051 or four (4) days after the forced leave had
already taken effect. On the other hand, respondents received the notice52 of
forced leave on January 7, 2010, after the business day of which the same forced
leave was to take effect. Respondents also pointed out that when they received
said notice, they were told to no longer report starting the next day, made to
completely vacate their workstations and surrender their company identification
cards, and were not even allowed to use their remaining unused leave credits,
which gave them the impression that they would never be returning to the
company ever again.
Since dismissal is the ultimate penalty that can be meted to an employee, the
requisites for a valid dismissal from employment must always be met, namely:
(1) it must be for a just or authorized cause; and (2) the employee must be
afforded due process,53 meaning, he is notified of the cause of his dismissal and
given an adequate opportunity to be heard and to defend himself. Our rules
require that the employer be able to prove that said requisites for a valid
dismissal have been duly complied with. Indubitably, IKSI's intent was not merely
to put respondents' employment on hold pending the existence of the
unfavorable business conditions and call them back once the same improves, but
really to sever the employer-employee relationship with respondents right from
the very start. The Court cannot just turn a blind eye to IKSI's manifest bad faith
in terminating respondents under the guise of placing them on a simple floating
status. It is positively aware of the unpleasant practice of some employers of
violating the employees' right to security of tenure under the pretense of a
seemingly valid employment contract and/or valid termination. We must abate
the culture of employers bestowing security of tenure to employees, not on the
basis of the latter's performance on the job, but on their ability to toe the
line.54 Unfortunately for IKSI, they chanced upon respondents who, unlike the
ordinary workingman who always plays an easy prey to these perfidious
companies, are fully aware of their rights under the law and simply refuse to
ignore and endure in silence the flagrant irruption of their rights, zealously
safeguarded by the Constitution and our labor laws.
Procedural Issues
Tested against the above-discussed considerations, the Court finds that the CA
correctly granted respondents' certiorari petition before it, since the NLRC
gravely abused its discretion in ruling that respondents were merely IKSI's
project employees and that they were validly put on floating status as part of
management prerogative, when they had satisfactorily established by substantial
evidence that they had become regular employees and had been constructively
dismissed.55 Grave abuse of discretion connotes judgment exercised in a
capricious and whimsical manner that is tantamount to lack of jurisdiction. 56 In
labor disputes, grave abuse of discretion may be ascribed to the NLRC
when, inter alia, its findings and conclusions, as in the case at bar, are not
supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.57
In the NLRC's Decision, only the following petitioners were included: Michael A.
Rebato, Hernan Ed Noel L. de Leon, Jr., Wendell B. Quiban, Fritz Sembrino,
Ismael R. Garaygay III, Edson S. Solis, Stephen Olingay, Ronan Alamillo, Jess
Vincent A. dela Peña, Dax Matthew M. Quijano, Juneth A. Rentuma and Socorro
D'Marie T. Inting. On the other hand, James Horace Balonda, Dennis C. Rizon,
Ennoh Chentis R. Fernandez, Aldrin O. Torrentira, Michael Ray B. Molde, Rodolfo
M. Vasquez, Ma. Nazelle B. Miralles, and Carl Hermes Carskit were excluded. IKSI
argued that those eight (8) who were excluded did not sign the required
Verification and Certification of Non-Forum Shopping of the Appeal
Memorandum before the NLRC, and some of them also failed to execute the
Verification in the Petition for Certiorari before the CA.
The Court has previously set the guidelines pertaining to non-compliance with
the requirements on, or submission of defective, verification and certification
against forum shopping:58
1) A distinction must be made between non-compliance with the requirement on
or submission of defective verification, and non-compliance with the
requirement on or submission of defective certification against forum shopping;
2) As to verification, non-compliance therewith or a defect therein does not
necessarily render the pleading fatally defective. The court may order its
submission or correction, or act on the pleading if the attending circumstances
are such that strict compliance with the Rule may be dispensed with in order
that the ends of justice may be served;
3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition
signs the verification, and when matters alleged in the petition have been made
in good faith or are true and correct;
4) As to certification against forum shopping, non-compliance therewith or a
defect therein, unlike in verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need to relax the Rule on the
ground of substantial compliance or the presence of special circumstances or
compelling reasons;
5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as
parties to the case. Under reasonable or justifiable circumstances, however, as
when all the plaintiffs or petitioners share a common interest and invoke a
common cause of action or defense, the signature of only one of them in the
certification against forum shopping substantially complies with the Rule; and
6) Finally, the certification against forum shopping must be executed by the
party-pleader, not by his counsel. If, however, for reasonable or justifiable
reasons, the party-pleader is unable to sign, he must execute a Special Power of
Attorney designating his counsel of record to sign on his behalf.
In the case at hand, only twelve (12) of respondents were able to sign the
Verification and Certification Against Forum Shopping since they were only given
ten (10) days from the receipt of the LA's decision to perfect an appeal. Some of
them were even no longer based in Cebu City. But it does not mean that those
who failed to sign were no longer interested in pursuing their case.
In view of the circumstances of this case and the substantive issues raised by
respondents, the Court finds justification to liberally apply the rules of procedure
to the present case. Rules of procedure should be viewed as mere tools designed
to facilitate the attainment of justice; their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote
substantial justice, must always be eschewed.59
In a similar case, the Court found that the signing of the Verification by only 11
out of the 59 petitioners already sufficiently assured the Court that the
allegations in the pleading were true and correct and not the product of the
imagination or a matter of speculation; that the pleading was filed in good faith;
and that the signatories were unquestionably real parties-in-interest who
undoubtedly had sufficient knowledge and belief to swear to the truth of the
allegations in the petition.60 In the same vein, the twelve (12) respondents who
signed the Verification in the instant case had adequate knowledge to swear to
the truth of the allegations in their pleadings, attesting that the matters alleged
therein have been made in good faith or are true and correct. With respect to
the failure of some of respondents to sign the Certification Against Forum
Shopping, IKSI cited the case of Altres, et al. v. Empleo61 which ruled that the
non-signing petitioners were dropped as parties to the case. However, the
reason of the Court for removing said petitioners from the case was not because
of the failure to sign per se, but actually because of the fact that they could no
longer be contacted or were indeed no longer interested in pursuing the
case.62 Here, as mentioned earlier, those who failed to sign the certification
against forum shopping will not be dropped as parties to the case since
reasonable or justifiable circumstances are extant, as all respondents share a
common interest and invoke a common cause of action or defense; the
signatures of some or even only one of them substantially complies with the
Rule.
The Court previously held that the signature of only one of the petitioners
substantially complied with the Rules if all the petitioners share a common
interest and invoke a common cause of action or defense. In cases, therefore,
where it is highly impractical to require all the plaintiffs to sign the certificate of
non-forum shopping, it is sufficient, in order not to defeat the ends of justice, for
one of the plaintiffs, acting as representative, to sign the certificate, provided
that the plaintiffs share a common interest in the subject matter of the case or
filed the case as a "collective" raising only one common cause of action or
defense.63 Thus, when respondents appealed their case to the NLRC and the CA,
they pursued the same as a collective body, raising only one argument in support
of their rights against the illegal dismissal allegedly committed by IKSI. There was
sufficient basis, therefore, for the twelve (12) respondents to speak and file the
Appeal Memorandum before the NLRC and the petition in the CA for and in
behalf of their co-respondents.
Clearly, verification, like in most cases required by the rules of procedure, is a
formal requirement, not jurisdictional.64 Such requirement is simply a condition
affecting the form of pleading, the non-compliance of which does not necessarily
render the pleading fatally defective.65 It is mainly intended to secure an
assurance that matters which are alleged are done in good faith or are true and
correct and not of mere speculation. Thus, when circumstances so warrant, as in
this case, the court may simply order the correction of the unverified pleadings
or act on it and waive strict compliance with the rules in order that the ends of
justice may be served.66 Moreover, no less than the Labor Code directs labor
officials to use all reasonable means to ascertain the facts speedily and
objectively, with little regard to technicalities or formalities, while Section 10,
Rule VII of the New Rules of Procedure of the NLRC provides that technical rules
are not binding. Indeed, the application of technical rules of procedure may be
relaxed in labor cases to serve the demand of substantial justice. Labor cases
must be decided according to justice and equity and the substantial merits of the
controversy. After all, the policy of our judicial system is to encourage full
adjudication of the merits of an appeal. Procedural niceties should be avoided in
labor cases in which the provisions of the Rules of Court are applied only in
suppletory manner. Indeed, rules of procedure may be relaxed to relieve a part
of an injustice not commensurate with the degree of non-compliance with the
process required. For this reason, the Court cannot indulge IKSI in its tendency to
nitpick on trivial technicalities to boost its self-serving arguments.67
The CA, however, erred when it still considered Atty. Ennoh Chentis Fernandez
as one of the petitioners before it and included him in the dispositive portion of
its decision. It must be noted that Fernandez was one of those who filed the
Motion for Execution of Decision68 dated May 28, 2012, which prayed for the
issuance of a writ of execution of the LA and NLRC's rulings. The movants
likewise admitted therein that while some of them elevated the case to the
NLRC, they, however, did not. Corollarily, Fernandez should have been dropped
as one of the parties to the case before the CA since the rulings of the labor
tribunals had already attained finality with respect to him.
Award of Damages
Inasmuch as IKSI failed to adduce clear and convincing evidence to support the
legality of respondents' dismissal, the latter is entitled to reinstatement without
loss of seniority rights and backwages computed from the time compensation
was withheld up to the date of actual reinstatement, as a necessary
consequence. However, reinstatement is no longer feasible in this case because
of the palpable strained relations between the parties and the possibility that
the positions previously held by respondents are already being occupied by new
hires. Thus, separation pay equivalent to one (1) month salary for every year of
service should be awarded in lieu of reinstatement.69
The Court sustains the CA's award of moral and exemplary damages. Award of
moral and exemplary damages for an illegally dismissed employee is proper
where the employee had been harassed and arbitrarily terminated by the
employer. Moral damages may be awarded to compensate one for diverse
injuries such as mental anguish, besmirched reputation, wounded feelings, and
social humiliation occasioned by the unreasonable dismissal. The Court has
consistently accorded the working class a right to recover damages for unjust
dismissals tainted with bad faith, where the motive of the employer in dismissing
the employee is far from noble. The award of such damages is based, not on the
Labor Code, but on Article 2220 of the Civil Code. In line with recent
jurisprudence, the Court finds the amount of P50,000.00 for each of moral and
exemplary damages adequate.70
The award of attorney's fees is likewise due and appropriate since respondents
incurred legal expenses after they were forced to file an action to protect their
rights.71 The rate of interest, however, has been changed to 6% starting July 1,
2013, pursuant to the Bangko Sentral ng Pilipinas Circular No. 799, Series of
2013.72
WHEREFORE, IN VIEW OF THE FOREGOING, the Court DISMISSES the petition,
and AFFIRMS with MODIFICATIONS the Decision of the Court of Appeals Cebu,
Twentieth (20th) Division, dated August 30, 2013 and Resolution dated March 12,
2014 in CA-G.R. CEB-SP No. 06443. Respondents Socorro D'Marie Inting, Ismael
R. Garaygay, Edson S. Solis, Michael A. Rebato, James Horace Balonda, Stephen
C. Olingay, Dennis C. Rizon, Juneth A. Rentuma, Hernan Ed Noel I. de Leon, Jr.,
Jess Vincent A. dela Peña, Ronan V. Alamillo, Wendell B. Quiban, Aldrin O.
Torrentira, Michael Ray B. Molde, Fritz J. Sembrino, Dax Matthew M. Quijano,
Rodolfo M. Vasquez, Ma. Nazelle B. Miralles and Carl Hermes Carskit are
declared to have been illegally dismissed by petitioner Innodata Knowledge
Services, Inc. and hence, the latter is hereby ORDERED to PAY each of them the
following:
a) Backwages and all other benefits from the time compensation was withheld
on January 8, 2010 until finality of this Decision;
b) Separation pay equivalent to one (1) month salary for every year of service,
with a fraction of at least six (6) months to be considered as one (1) whole year,
to be computed from the date of their employment up to the finality of this
Decision;
c) Moral and exemplary damages, each in the amount of P50,000.00;
d) Attorney's fees equivalent to ten percent (10%) of the total awards; and
e) Legal interest of twelve percent (12%) per annum of the total monetary
awards computed from January 8, 2010 up to June 30, 2013 and six percent
(6%) per annumfrom July 1, 2013 until their full satisfaction.
The case is hereby ordered REMANDED to the labor arbiter for the computation
of the amounts due each respondent.
Costs on petitioner Innodata Knowledge Services, Inc.
SO ORDERED.
[G.R. No. 122327. August 19, 1998]
ARTEMIO J. ROMARES, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and PILMICO FOODS CORPORATION, respondents.
DECISION
MARTINEZ, J.:
This is a case of illegal dismissal. The decision of the Executive Labor
Arbiter[1] einstating petitioner was reversed by the National Labor Relations
Commission. Hence, this appeal.
The antecedent facts as summarized in the decision of the Executive Labor
Arbiter are as follows:
Complainant in his Complaint and Position Paper alleged that he was hired by
respondent in its Maintenance/Projects/Engineering Department during the
periods and at respective rates as follows:
1. Sept. 1, 1989 to Jan. 31, 1990 - P 89.00/day
2. Jan.16, 1991 to Jun. 15, 1991 - 103.00/day
3. Aug. 16, 1992 to Jan. 15, 1993 - 103.00/day
That having rendered a total service of more than one (1) year and by operation
of law, complainant has become a regular employee of respondent; That
complainant has performed tasks and functions which were necessary and
desirable in the operation of respondents business which include painting,
maintenance, repair and other related jobs; That complainant was never
reprimanded nor subjected to any disciplinary action during his engagement
with the respondent; That without any legal cause or justification and in the
absence of any time to know of the charge or notice nor any opportunity to be
heard, respondent terminated him; That his termination is violative to security of
tenure clause provided by law; That complainant be awarded damages and prays
that he be reinstated to his former position, be awarded backwages, moral and
exemplary damages and attorneys fees.
Respondent on the other hand maintains that complainant was a former
contractual employee of respondent and as such his employment was covered
by contracts; That complainant was hired as mason in the Maintenance/Project
Department and that he was engaged only for a specific project under such
department; That complainants services as mason was not continuous, in fact,
he was employed with International Pharmaceuticals, Inc. in Opol, Misamis
Oriental from January to April 1992; That when his last contract expired on
January 15, 1993, it was no longer renewed and thereafter, complainant filed
this instant complaint; he prays that this instant petition be dismissed for lack of
merit.[2]
In finding that petitioner is a regular employee, the Executive Labor Arbiter said:
The records reveal that complainant has been hired and employed by
respondent PILMICO since September 1, 1989 to January 15, 1993, in a broken
tenure but all in all totalled to over a years service. Complainants period of
employment started on September 1, 1989 up to January 31, 1990 or for a
period of five (5) months. Then on January 16, 1991, he was hired again up to
June 15, 1991, or for a period covering another five (5) months. Then on August
16, 1992, he was hired again up to January 15, 1993 or for a period of another
five (5) months. Thus, from September 1, 1989 up to January 15, 1993,
complainant has worked for fifteen (15) months more or less and has been hired
and terminated three times. But in all his engagements by respondent, he was
assigned at respondents Maintenance/Projects/Engineering Department
performing maintenance work, particularly the painting of company buildings,
maintenance chores, like cleaning and sometimes operating company equipment
and sometimes assisting the regulars in the Maintenance/Engineering
Department. The fact that complainant was hired, terminated and rehired again
for three times in a span of more than three (3) years and performing the same
functions, only bolstered our findings that complainant is already considered a
regular employee and therefore covered by security of tenure and cannot be
removed except for lawful and valid cause as provided by law and after due
process. There is no dispute that complainant, in the case at bar, has already
served respondent for more than six (6) months, the period allowable for
probationary period and even more than one year service which under the law
shall be considered a regular employee. This finding and conclusion finds
application in the case of Kimberly Independent Labor Union for Solidarity,
Activism and Nationalism - Olalia v. Hon. Franklin M. Drilon, G.R. No. 77629 and
78791, promulgated last May 9, 1990, wherein the Honorable Supreme Court
has classified the two kinds of regular employees as:
1. those who are engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer; and,
2. those who have rendered at least one (1) year of service whether continuous
or broken with respect to the activity in which they are employed.
While the actual regularization of the employees entails the mechanical act of
issuing regular appointment papers and compliance with such other operating
procedures, as may be adopted by the employer, it is more in keeping with the
intent and spirit of the law to rule that the status of regular employment
attaches to the casual employee on the day immediately after the end of his first
year of service.
Applying the above classification in this particular case, there is no doubt that
herein complainant falls within the second classification and as such, he is a
regular employee of respondent PILMICO. And being a regular employee, he is
vested with his constitutional right to due process before he can be terminated
from his work and only for valid and lawful cause as provided by law. xxx. In the
case of National Service Corporation v. NLRC, 168 SCRA 122, the Court has laid
down the guidelines or requisites to be complied in order that termination of
employment can be legally effected, to wit:
These are:
1. the notice which apprises the employee of the particular acts or omissions for
which his dismissal is sought, and
2. the subsequent notice which informs the employee of the employers decision
to dismiss him.
xxxxxxxxx
In the case at bar, respondent did not comply with the above guidelines for the
dismissal of herein complainant. The procedure prescribed by law is
mandatory. Unless followed, the employees right to due process of law is
breached and vitiates managements decision to terminate the employment.
This ELA having declared herein complainant as a regular employee as above
stated, then his separation or termination from respondent company not being
in consonance with the guidelines enunciated by law, his termination is
therefore illegal.[3]
and thereafter disposed of the case as follows:
WHEREFORE, in the light of the above-discussion, it is hereby declared and
ordered that complainant ARTEMIO J. ROMARES is a regular employee of
respondent PILMICO FOODS CORPORATION since January 16, 1993 and his
termination on the same date is illegal as contrary to law and public policy and
therefore, he would be reinstated to his former position as if he was not
terminated and to be entitled to all benefits, allowances accruing thereto and
without loss of seniority rights.
Likewise, respondent PILMICO in consonance with the above-discussion is
hereby ordered to pay complainant the following, to wit:
1. Backwages in the amount of P34,814.00;
2. Attorneys fees representing 5% of the amount awarded for backwages,
allowances and other benefits.
3. All other claims are hereby dismissed for lack of merit.
SO ORDERED.[4]
On appeal, the NLRC[5] set aside the decision of the Executive Labor Arbiter and
ruled:
Respondent argues that even if the employee was performing work which is
related to the business or trade of the employer, the employee cannot be
considered a regular employee if his employment is for a specific project or
undertaking and for a fixed period (Vol. 1, p. 26, supra), hence, the applicable
provision is paragraph 1 and not paragraph 2 of Article 280 of the Labor Code, as
amended (Vol. 2, p. 5, supra).
With the given circumstances, we cannot agree with the pronouncement of the
Executive Labor Arbiter that it is the intent and spirit of the law that the status of
regular employment is attached to the worker on the day immediately after the
end of his first year of service (Vol. 1, p. 50, supra).
What is apparently applicable in the case at bar is paragraph 1 of Article 280 of
the Labor Code, as amended. As clearly shown by evidence, complainants
employment contracts (Vol. 1, pp.39-40, supra), were for fixed or temporary
periods. Thus, when complainants employment with respondent was terminated
(Vol. 1, p. 41, supra), such cannot be considered as illegal since the termination
was due to the expiration of the contract.
WHEREFORE, the assailed decision is Vacated and Set Aside. The complaint is
hereby Dismissed for lack of merit.
SO ORDERED.[6]
The motion for reconsideration having been denied, petitioner interposed this
petition for certiorariand prohibition.
We find the petition meritorious.
Petitioner seeks to traverse the NLRC's ruling that the applicable provision in the
case at bar is paragraph 1 of Article 280 of the Labor Code, as amended. In this
regard, the NLRC concluded that since petitioner's employment contracts were
for fixed or temporary periods, as an exception to the general rule, he was validly
terminated due to expiration of the contract of employment.
In determining the status of petitioner as a regular employee, reference is made
to Article 280 of the Labor Code, as amended.[7] Thus, the two kinds of regular
employees are (1) those who are 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 activity in which they are employed.[8]
Construing the aforesaid provision, the phrase usually necessary or desirable in
the usual business or trade of the employer should be emphasized as the
criterion in the instant case. Facts show that petitioners work with PILMICO as a
mason was definitely necessary and desirable to its business. PILMICO cannot
claim that petitioners work as a mason was entirely foreign or irrelevant to its
line of business in the production of flour, yeast, feeds and other flour products.
The language of the law evidently manifests the intent to safeguard the tenurial
interest of the worker who may be denied the rights and benefits due a regular
employee by virtue of lopsided agreements with the economically powerful
employer who can maneuver to keep an employee on a casual status for as long
as convenient.[9] It is noteworthy that during each rehiring, the summation of
which exceeded one (1) year, petitioner was assigned to PILMICOs
Maintenance/Projects/Engineering Department performing the same kind of
maintenance work such as painting of company buildings, cleaning and operating
company equipment, and assisting the other regular employees in their
maintenance works. Such a continuing need for the services of petitioner is
sufficient evidence of the necessity and indispensability of his services to
PILMICOs business or trade.[10] The fact that petitioner was employed with
another company in the interregnum from January to April, 1992 is of no
moment.
To expound further, granting arguendo that petitioner was regarded as a
temporary employee, he had been converted into a regular employee by virtue
of the proviso in the second paragraph of Article 280 for having worked with
PILMICO for more than one (1) year. We held in Baguio Country Club Corporation
vs. NLRC[11] that:
x x x 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. Hence, the
employment is also considered regular but only with respect to such activity and
while such activity exists.
Succinctly put, in rehiring petitioner, employment contracts[12] ranging from two
(2) to three (3) months with an express statement that his temporary job/service
as mason shall be terminated at the end of the said period or upon completion
of the project was obtrusively a convenient subterfuge utilized to prevent his
regularization. It was a clear circumvention of the employees right to security of
tenure and to other benefits.[13] It likewise evidenced bad faith on the part of
PILMICO.
The limited period specified in petitioners 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.[14] To uphold the contractual arrangement between PILMICO
and petitioner 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 employees security of tenure in their jobs.[15]
Article 280 was emplaced in our statute books to prevent the circumvention of
the employees 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.[16] Where an employee has been
engaged to perform activities which are usually necessary or desirable in the
usual business of the employer, such employee is deemed a regular employee
and is entitled to security of tenure notwithstanding the contrary provisions of
his contract of employment.[17]
We cannot subscribe to the erroneous ruling of the NLRC that the applicable
provision is paragraph 1 of Article 280 of the Labor Code, as amended, which
makes petitioners employment contracts for fixed or temporary periods. Stated
otherwise, NLRC erred in finding that the contract of employment of petitioner
was for a fixed or specified period.
At this juncture, the leading case of Brent School, Inc. vs . Zamora[18] proves
instructive. As reaffirmed in subsequent cases,[19] this Court has upheld the
legality of fixed-term employment. It ruled that the decisive determinant in term
employment should not be the activities that the employee is called upon to
perform but the day certain agreed upon by the parties for the commencement
and termination of their employment relationship. But this Court went on to say
that where from the circumstances it is apparent that the periods have been
imposed to preclude acquisition of tenurial security by the employee, they
should be struck down or disregarded as contrary to public policy and morals.
The Brent ruling[20] also laid down the criteria under which term employment
cannot be said to be in circumvention of the law on security of tenure:
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.
None of these requisites were complied with.
WHEREFORE, prescinding from the foregoing disquisition, the present petition is
GRANTED.The challenged Resolution dated February 21, 1995 of the NLRC is
REVERSED and SET ASIDE, and the Decision dated February 15, 1994 of the
Executive Labor Arbiter is hereby REINSTATED.
SO ORDERED.
[G.R. No. 121071. December 11, 1998]
PHIL. FEDERATION OF CREDIT COOPERATIVES, INC. (PECCI) and FR. BENEDICTO
JAYOMA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (First
Division) and VICTORIA ABRIL, respondents.
DECISION
ROMERO, J.:
It is an elementary rule in the law on labor relations that a probationary
employee who is engaged to work beyond the probationary period of six
months, as provided under Art. 281 of the Labor Code, as amended, or for any
length of time set forth by the employer, shall be considered a regular employee.
Sometime in September 1982, private respondent Victoria Abril was employed
by petitioner Philippine Federation of Credit Cooperatives, Inc. (PFCCI), a
corporation engaged in organizing services to credit and cooperative entities, as
Junior Auditor/Field Examiner and thereafter held positions in different
capacities, to wit: as office secretary in 1985 and as cashier-designate for four (4)
months ending in April 1988.Respondent, shortly after resuming her position as
office secretary, subsequently went on leave until she gave birth to a baby
girl. Upon her return sometime in November 1989, however, she discovered that
a certain Vangie Santos had been permanently appointed to her former
position. She, nevertheless, accepted the position of Regional Field Officer as
evidenced by a contract which stipulated, among other things, that respondents
employment status shall be probationary for a period of six (6) months. Said
period having elapsed, respondent was allowed to work until PFCCI presented to
her another employment contract for a period of one year commencing on
January 2, 1991 until December 31, 1991, after which period, her employment
was terminated.
In a complaint for illegal dismissal filed by respondent against PFCCI on April 1,
1992, Labor Arbiter Cornelio L. Linsangan rendered a decision on March 10, 1993
dismissing the same for lack of merit but ordered PFCCI to reimburse her the
amount of P2,500.00 which had been deducted from her salary.
On appeal, however, the said decision was reversed by the National Labor
Relations Commission (NLRC), the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondents are
hereby directed to reinstate complainant to her position last held, which is that
of a Regional Field Officer, or to an equivalent position if such is no longer
feasible, with full backwages computed from January 1, 1992 until she is actually
reinstated.
SO ORDERED. That the employer hires the employee on contractual basis to the position of
Regional Field Officer of Region 4 under PFCCI/WOCCU/Aid Project No. 8175 and
We find no merit in the petition. to do the function as stipulated in the job description assigned to him (her): on
probationary status effective February 17/90 for a period not to exceed six (6)
Article 281 of the Labor Code, as amended, allows the employer to secure the
months from said effectivity, subject to renewal of this contract should the
services of an employee on a probationary basis which allows him to terminate
employees performance be satisfactory.
the latter for just cause or upon failure to qualify in accordance with reasonable
standards set forth by the employer at the time of his engagement. As defined in While the initial statements of the contract show that respondents employment
the case of International Catholic Migration v. NLRC,[1] a probationary employee was for a fixed period, the succeeding provisions thereof contradicted the same
is one who is on trial by an employer during which the employer determines when it provided that respondent shall be under probationary status
whether or not he is qualified for permanent employment. A probationary commencing on February 17, 1990 and ending six (6) months
employment is made to afford the employer an opportunity to observe the thereafter. Petitioner manifested that respondents employment for a period of
fitness of a probationer while at work, and to ascertain whether he will become one year, from January until December 1991, having been fixed for a specified
a proper and efficient employee. period, could not have converted her employment status to one of regular
employment. Conversely, it likewise insisted that respondent was employed to
Probationary employees, notwithstanding their limited tenure, are also entitled
perform work related to a project funded by the World Council of Credit Unions
to security of tenure.Thus, except for just cause as provided by law,[2] or under
(WOCCU) and hence, her status is that of a project employee. The Court is, thus,
the employment contract, a probationary employee cannot be terminated.[3]
confronted with a situation under which the terms of the contract are so
In the instant case, petitioner refutes the findings of the NLRC arguing that, after ambiguous as to preclude a precise application of the pertinent labor laws.
respondent had allegedly abandoned her secretarial position for eight (8)
Amidst the muddled assertions by petitioner, we adhere to the pronouncement
months, she applied for the position of Regional Field Officer for Region IV,
stated in the recent case of Villanueva v. NLRC,[6] where the Court ruled that
which appointment, as petitioner would aptly put it, had been fixed for a specific
where a contract of employment, being a contract of adhesion, is ambiguous,
project or undertaking the completion or termination of which had been
any ambiguity therein should be construed strictly against the party who
determined at the time of the engagement of said private respondent and
prepared it.Furthermore, Article 1702 of the Civil Code provides that, in case of
therefore considered as a casual or contractual employment under Article 280 of
doubt, all labor contracts shall be construed in favor of the laborer. It added:
the Labor Code.[4]
We cannot allow the respondent company to construe otherwise what appears
The contention that respondent could either be classified as a casual or
to be clear from the wordings of the contract. The interpretation which the
contractual employee is utterly misplaced; thus, it is imperative for the Court to
respondent company seeks to wiggle out is wholly unacceptable, as it would
elucidate on the kinds of employment recognized in this jurisdiction. The
result in a violation of petitioners right to security of tenure guaranteed in
pertinent provision of the Labor Code, as amended, states:
Section 3 of Article XIII of the Constitution and in Articles 279 and 281 of the
Art. 280. Regular and casual employment. - The provisions of written agreement Labor Code.
to the contrary notwithstanding and regardless of the oral agreement of the
After a careful scrutiny of the subject contract, we arrive at the conclusion that
parties, an employment shall be deemed to be regular where the employee has
there was no grave abuse of discretion on the part of the NLRC and, thus, affirm
been engaged to perform activities which are usually necessary or desirable in
the finding that respondent has become a regular employee entitled to
the usual business or trade of the employer, except where the employment has
security of tenure guaranteed under the Constitution and labor laws.
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 Regardless of the designation petitioner may have conferred upon respondents
where the work or services to be performed is seasonal in nature and the employment status, it is, however, uncontroverted that the latter, having
employment is for the duration of the season. completed the probationary period and allowed to work thereafter, became a
regular employee who may be dismissed only for just or authorized causes under
An employment shall be deemed to be casual if it is not covered by the
Articles 282, 283 and 284 of the Labor Code, as amended. Therefore, the
preceding paragraph: Provided, That, any employee who has rendered at least
dismissal, premised on the alleged expiration of the contract, is illegal and
one year of service, whether such service is continuous or broken, shall be
entitles respondent to the reliefs prayed for.
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists. WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED and the
decision of the National Labor Relations Commission dated November 28, 1994
This provision of law comprehends three kinds of employees: (a) regular
is AFFIRMED. No costs.
employees or those whose work is necessary or desirable to the usual business
of the employer; (b) project employees or those whose employment has been SO ORDERED.
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 ATOK BIG WEDGE COMPANY, INC., G.R. No. 169510
the work or services to be performed is seasonal in nature and the employment
is for the duration of the season; and (c) casual employees or those who are Petitioner,
neither regular nor project employees. With regard to contractual employees,
Present:
the Court in the leading case of Brent School, Inc. v. Zamora,[5] laid down the
guidelines before a contract of employment may be held as valid, to wit:
stipulations in employment contracts providing for term employment or fixed
period employment are valid when the period were agreed upon knowingly and CARPIO,* J.,
voluntarily by the parties without force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating - versus - VELASCO, JR., J., Cha
his consent, or where it satisfactorily appears that the employer and employee
BRION,**
dealt with each other on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter. PERALTA, and
Having expounded on the various types of employees, the Court is constrained SERENO,*** JJ.
to review the contract of employment entered into between the party-
litigants. The said contract reads:

JESUS P. GISON,
Respondent.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
PERALTA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the
Decision[1] dated May 31, 2005 of the Court of Appeals (CA) in CA-G.R. SP No.
87846, and the Resolution[2] dated August 23, 2005 denying petitioners motion
for reconsideration.
The procedural and factual antecedents are as follows:
Sometime in February 1992, respondent Jesus P. Gison was engaged as part-time
consultant on retainer basis by petitioner Atok Big Wedge Company, Inc. through
its then Asst. Vice-President and Acting Resident Manager, Rutillo A. Torres. As a
consultant on retainer basis, respondent assisted petitioner's retained legal
counsel with matters pertaining to the prosecution of cases against illegal
surface occupants within the area covered by the company's mineral
claims. Respondent was likewise tasked to perform liaison work with several
government agencies, which he said was his expertise.
Petitioner did not require respondent to report to its office on a regular basis,
except when occasionally requested by the management to discuss matters
needing his expertise as a consultant. As payment for his services, respondent
received a retainer fee of P3,000.00 a month,[3] which was delivered to him
either at his residence or in a local restaurant. The parties executed a retainer
agreement, but such agreement was misplaced and can no longer be found.
The said arrangement continued for the next eleven years.
Sometime thereafter, since respondent was getting old, he requested that
petitioner cause his registration with the Social Security System (SSS), but
petitioner did not accede to his request. He later reiterated his request but it was
ignored by respondent considering that he was only a
retainer/consultant. On February 4, 2003, respondent filed a Complaint[4] with
the SSS against petitioner for the latter's refusal to cause his registration with the
SSS.
On the same date, Mario D. Cera, in his capacity as resident manager of
petitioner, issued a Memorandum[5] advising respondent that within 30 days
Promulgated:
from receipt thereof, petitioner is terminating his retainer contract with the
company since his services are no longer necessary.
August 8, 2011
On February 21, 2003, respondent filed a Complaint[6] for illegal dismissal, unfair
labor practice, underpayment of wages, non-payment of 13th month pay,
vacation pay, and sick leave pay with the National Labor Relations Commission
(NLRC), Regional Arbitration Branch (RAB), Cordillera Administrative Region,
against petitioner, Mario D. Cera, and Teofilo R. Asuncion, Jr. The case was
docketed as NLRC Case No. RAB-CAR-02-0098-03.
Respondent alleged that:
x x x [S]ometime in January 1992, Rutillo A. Torres, then the resident manager of
respondent Atok Big Wedge Co., Inc., or Atok for brevity, approached him and
asked him if he can help the companys problem involving the 700 million pesos
crop damage claims of the residents living at the minesite of Atok. He
participated in a series of dialogues conducted with the residents. Mr. Torres
offered to pay him P3,000.00 per month plus representation expenses. It was
also agreed upon by him and Torres that his participation in resolving the
problem was temporary and there will be no employer-employee relationship
between him and Atok. It was also agreed upon that his compensation,
allowances and other expenses will be paid through disbursement vouchers.
On February 1, 1992 he joined Atok. One week thereafter, the aggrieved crop
damage claimants barricaded the only passage to and from the minesite. In the
early morning of February 1, 1992, a dialogue was made by Atok and the crop
damage claimants. Unfortunately, Atoks representatives, including him, were
virtually held hostage by the irate claimants who demanded on the spot
payment of their claims. He was able to convince the claimants to release the
company representatives pending referral of the issue to higher management.
A case was filed in court for the lifting of the barricades and the court ordered
the lifting of the barricade. While Atok was prosecuting its case with the
claimants, another case erupted involving its partner, Benguet Corporation. After
Atok parted ways with Benguet Corporation, some properties acquired by the
partnership and some receivables by Benguet Corporation was the problem. He
was again entangled with documentation, conferences, meetings, planning,
execution and clerical works. After two years, the controversy was resolved and
Atok received its share of the properties of the partnership, which is about 5
million pesos worth of equipment and condonation of Atoks accountabilities
with Benguet Corporation in the amount of P900,000.00.
In the meantime, crop damage claimants lost interest in pursuing their claims
against Atok and Atok was relieved of the burden of paying 700 million pesos. In
between attending the problems of the crop damage issue, he was also assigned
to do liaison works with the SEC, Bureau of Mines, municipal government of
Itogon, Benguet, the Courts and other government offices.
After the crop damage claims and the controversy were resolved, he was
permanently assigned by Atok to take charge of some liaison matters and public
relations in Baguio and Benguet Province, and to report regularly to Atoks office
in Manila to attend meetings and so he had to stay in Manila at least one week a
month.
Because of his length of service, he invited the attention of the top officers of the
company that he is already entitled to the benefits due an employee under the
law, but management ignored his requests. However, he continued to avail of his
representation expenses and reimbursement of company-related expenses. He
also enjoyed the privilege of securing interest free salary loans payable in one
year through salary deduction.
In the succeeding years of his employment, he was designated as liaison officer,
public relation officer and legal assistant, and to assist in the ejection of illegal
occupants in the mining claims of Atok.
Since he was getting older, being already 56 years old, he reiterated his request
to the company to cause his registration with the SSS. His request was again
ignored and so he filed a complaint with the SSS. After filing his complaint with
the SSS, respondents terminated his services.[7]
On September 26, 2003, after the parties have submitted their respective
pleadings, Labor Arbiter Rolando D. Gambito rendered a Decision[8] ruling in
favor of the petitioner.Finding no employer-employee relationship between
petitioner and respondent, the Labor Arbiter dismissed the complaint for lack of
merit.
Respondent then appealed the decision to the NLRC.
On July 30, 2004, the NLRC, Second Division, issued a Resolution[9] affirming the
decision of the Labor Arbiter. Respondent filed a Motion for Reconsideration,
but it was denied in the Resolution[10] dated September 30, 2004.
Aggrieved, respondent filed a petition for review under Rule 65 of the Rules of
Court before the CA questioning the decision and resolution of the NLRC, which
was later docketed as CA-G.R. SP No. 87846. In support of his petition,
respondent raised the following issues:
a) Whether or not the Decision of the Honorable Labor Arbiter and the
subsequent Resolutions of the Honorable Public Respondent affirming the same,
are in harmony with the law and the facts of the case;
b) Whether or not the Honorable Labor Arbiter Committed a Grave Abuse of
Discretion in Dismissing the Complaint of Petitioner and whether or not the
Honorable Public Respondent Committed a Grave Abuse of Discretion when it
affirmed the said Decision.[11]
On May 31, 2005, the CA rendered the assailed Decision annulling and setting
aside the decision of the NLRC, the decretal portion of which reads:
WHEREFORE, the petition is GRANTED. The assailed Resolution of the National
Labor Relations Commission dismissing petitioner's complaint for illegal dismissal
is ANNULLED and SET ASIDE. Private respondent Atok Big Wedge Company
Incorporated is ORDERED to reinstate petitioner Jesus P. Gison to his former or
equivalent position without loss of seniority rights and to pay him full
backwages, inclusive of allowances and other benefits or their monetary
equivalent computed from the time these were withheld from him up to the
time of his actual and effective reinstatement. This case is
ordered REMANDED to the Labor Arbiter for the proper computation of
backwages, allowances and other benefits due to petitioner. Costs against
private respondent Atok Big Wedge Company Incorporated.
SO ORDERED.[12]
In ruling in favor of the respondent, the CA opined, among other things, that
both the Labor Arbiter and the NLRC may have overlooked Article 280 of the
Labor Code,[13] or the provision which distinguishes between two kinds of
employees, i.e., regular and casual employees. Applying the provision to the
respondent's case, he is deemed a regular employee of the petitioner after the
lapse of one year from his employment. Considering also that respondent had
been performing services for the petitioner for eleven years, respondent is
entitled to the rights and privileges of a regular employee.
The CA added that although there was an agreement between the parties that
respondent's employment would only be temporary, it clearly appears that
petitioner disregarded the same by repeatedly giving petitioner several tasks to
perform. Moreover, although respondent may have waived his right to attain a
regular status of employment when he agreed to perform these tasks on a
temporary employment status, still, it was the law that recognized and
considered him a regular employee after his first year of rendering service to
petitioner. As such, the waiver was ineffective.
Hence, the petition assigning the following errors:
I. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE RULINGS OF THIS HONORABLE
COURT WHEN IT GAVE DUE COURSE TO THE PETITION FOR CERTIORARI DESPITE
THE FACT THAT THERE WAS NO SHOWING THAT THE NATIONAL LABOR
RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION.
II. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO THE LAW AND APPLICABLE RULINGS OF THIS
HONORABLE COURT WHEN IT BASED ITS FINDING THAT RESPONDENT IS
ENTITLED TO REGULAR EMPLOYMENT ON A PROVISION OF LAW THAT THIS
HONORABLE COURT HAS DECLARED TO BE INAPPLICABLE IN CASE THE
EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP IS IN DISPUTE OR IS THE
FACT IN ISSUE.
III. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE RULINGS OF THIS HONORABLE
COURT WHEN IT ERRONEOUSLY FOUND THAT RESPONDENT IS A REGULAR
EMPLOYEE OF THE COMPANY.
IV. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE RULINGS OF THIS HONORABLE
COURT WHEN IT ERRONEOUSLY DIRECTED RESPONDENT'S REINSTATEMENT
DESPITE THE FACT THAT THE NATURE OF THE SERVICES HE PROVIDED TO THE
COMPANY WAS SENSITIVE AND CONFIDENTIAL.[14]
Petitioner argues that since the petition filed by the respondent before the CA
was a petition for certiorari under Rule 65 of the Rules of Court, the CA should
have limited the issue on whether or not there was grave abuse of discretion on
the part of the NLRC in rendering the resolution affirming the decision of the
Labor Arbiter.
Petitioner also posits that the CA erred in applying Article 280 of the Labor Code
in determining whether there was an employer-employee relationship between
the petitioner and the respondent. Petitioner contends that where the existence
of an employer-employee relationship is in dispute, Article 280 of the Labor Code
is inapplicable. The said article only set the distinction between a casual
employee from a regular employee for purposes of determining the rights of an
employee to be entitled to certain benefits.
Petitioner insists that respondent is not a regular employee and not entitled to
reinstatement.
On his part, respondent maintains that he is an employee of the petitioner and
that the CA did not err in ruling in his favor.
The petition is meritorious.
At the outset, respondent's recourse to the CA was the proper remedy to
question the resolution of the NLRC. It bears stressing that there is no appeal
from the decision or resolution of the NLRC. As this Court enunciated in the case
of St. Martin Funeral Home v. NLRC,[15] the special civil action of certiorari under
Rule 65 of the Rules of Civil Procedure, which is filed before the CA, is the proper
vehicle for judicial review of decisions of the NLRC. The petition should be
initially filed before the Court of Appeals in strict observance of the doctrine on
hierarchy of courts as the appropriate forum for the relief desired.[16] This Court
not being a trier of facts, the resolution of unclear or ambiguous factual findings
should be left to the CA as it is procedurally equipped for that purpose. From the
decision of the Court of Appeals, an ordinary appeal under Rule 45 of the Rules
of Civil Procedure before the Supreme Court may be resorted to by the
parties. Hence, respondent's resort to the CA was appropriate under the
circumstances.
Anent the primordial issue of whether or not an employer-employee relationship
exists between petitioner and respondent.
Well-entrenched is the doctrine that the existence of an employer-employee
relationship is ultimately a question of fact and that the findings thereon by the
Labor Arbiter and the NLRC shall be accorded not only respect but even finality
when supported by substantial evidence.[17] Being a question of fact, the
determination whether such a relationship exists between petitioner and
respondent was well within the province of the Labor Arbiter and the
NLRC. Being supported by substantial evidence, such determination should have
been accorded great weight by the CA in resolving the issue.
To ascertain the existence of an employer-employee relationship jurisprudence
has invariably adhered to the four-fold test, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee's conduct, or the so-called
"control test."[18] Of these four, the last one is the most important.[19] The so-
called control test is commonly regarded as the most crucial and determinative
indicator of the presence or absence of an employer-employee relationship.
Under the control test, an employer-employee relationship exists where the
person for whom the services are performed reserves the right to control not
only the end achieved, but also the manner and means to be used in reaching
that end.[20]
Applying the aforementioned test, an employer-employee relationship is
apparently absent in the case at bar. Among other things, respondent was not
required to report everyday during regular office hours of
petitioner. Respondent's monthly retainer fees were paid to him either at his
residence or a local restaurant. More importantly, petitioner did not prescribe
the manner in which respondent would accomplish any of the tasks in which his
expertise as a liaison officer was needed; respondent was left alone and given
the freedom to accomplish the tasks using his own means and
method. Respondent was assigned tasks to perform, but petitioner did not
control the manner and methods by which respondent performed these
tasks. Verily, the absence of the element of control on the part of the petitioner
engenders a conclusion that he is not an employee of the petitioner.
Moreover, the absence of the parties' retainership agreement notwithstanding,
respondent clearly admitted that petitioner hired him in a limited capacity only
and that there will be no employer-employee relationship between them. As
averred in respondent's Position Paper:[21]
2. For the participation of complainant regarding this particular problem of Atok,
Mr. Torres offered him a pay in the amount of Php3,000.00 per month plus
representation expenses. It was also agreed by Mr. Torres and the complainant
that his participation on this particular problem of Atok will be temporary since
the problem was then contemplated to be limited in nature, hence, there will be
no employer-employee relationship between him and Atok.Complainant agreed
on this arrangement. It was also agreed that complainant's compensations,
allowances, representation expenses and reimbursement of company- related
expenses will be processed and paid through disbursement vouchers;[22]
Respondent was well aware of the agreement that he was hired merely as a
liaison or consultant of the petitioner and he agreed to perform tasks for the
petitioner on a temporary employment status only. However, respondent
anchors his claim that he became a regular employee of the petitioner based on
his contention that the temporary aspect of his job and its limited nature could
not have lasted for eleven years unless some time during that period, he became
a regular employee of the petitioner by continually performing services for the
company.
Contrary to the conclusion of the CA, respondent is not an employee, much
more a regular employee of petitioner. The appellate court's premise that
regular employees are those who perform activities which are desirable and
necessary for the business of the employer is not determinative in this case. In
fact, any agreement may provide that one party shall render services for and in
behalf of another, no matter how necessary for the latter's business, even
without being hired as an employee.[23] Hence, respondent's length of service
and petitioner's repeated act of assigning respondent some tasks to be
performed did not result to respondent's entitlement to the rights and privileges
of a regular employee.
Furthermore, despite the fact that petitioner made use of the services of
respondent for eleven years, he still cannot be considered as a regular employee
of petitioner. Article 280 of the Labor Code, in which the lower court used to
buttress its findings that respondent became a regular employee of the
petitioner, is not applicable in the case at bar. Indeed, the Court has ruled that
said provision is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two kinds of
employees, i.e., regular employees and casual employees, for purposes of
determining the right of an employee to certain benefits, to join or form a union,
or to security of tenure; it does not apply where the existence of an employment
relationship is in dispute.[24] It is, therefore, erroneous on the part of the Court of
Appeals to rely on Article 280 in determining whether an employer-employee
relationship exists between respondent and the petitioner
Considering that there is no employer-employee relationship between the
parties, the termination of respondent's services by the petitioner after due
notice did not constitute illegal dismissal warranting his reinstatement and the
payment of full backwages, allowances and other benefits.
WHEREFORE, premises considered, the petition is GRANTED. The Decision and
the Resolution of the Court of Appeals in CA-G.R. SP No. 87846,
are REVERSED and SET ASIDE. The Resolutions dated July 30,
2004 and September 30, 2004 of the National Labor Relations Commission
are REINSTATED.
SO ORDERED.
G.R. No. 227734, August 09, 2017
ROMEO ALBA, Petitioner, v. CONRADO G. ESPINOSA, ET AL., Respondents.
DECISION
REYES, JR., J.:
This resolves the Petition for Review on Certiorari1 filed under Rule 45 of the
Rules of Court by petitioner Romeo Alba (Alba) to assail the Decision2 dated July
14, 2016 and Resolution3 dated October 17, 2016 of the Court of Appeals (CA) in
CA-G.R. SP No. 144043, wherein the CA affirmed the Decision4 dated November
27, 2015 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 09-
002460-15 that declared Alba guilty of illegal dismissal and liable for monetary
claims.
The Antecedents
The case stems from two complaints for illegal dismissal and monetary claims
filed against Alba Construction and its owner, Alba, by herein respondents with
the Arbitration Branch of the NLRC. The first labor complaint, docketed as NLRC
NCR Case No. 06-07959-14,5 was filed by Conrado Gabe Espinosa (Conrado),
Eusebio Mojica, Jaime Ocfemia, Jr. (Jaime, Jr.), Remy Diama, Ross Florencio, Jr.,
Gerry U. Milo, Rodolfo Benoza, Rolando Benoza, Marcelino Macindo, Nikko
Benosa, Felix Taperla, Landirico Taperla, Arturo Nebrida, Jr. and Bongbong
Delumpines.6 The second complaint, docketed as NLRC NCR Case No. 06-07960-
14,7 was filed by Nilo Abrencillo (Nilo), Freddie Abrencillo, Robert Manimtiin,
Ronaldo Hernandez, Jr., William Janer, Ronie Tuparan, Samuel Nabas (Samuel),
Eufrecino B. Jemina, Ruben Caleza, Hermel Caringal, Phamer Mandeoya,
Alexander Barbacena, Roily Abrencillo, Rene Barbacena, Jr., Jolito Cabillo and
Roger Nebrida.8
It was alleged by the respondents that on various dates, Alba hired them as
construction workers for his projects in several residential villages within Metro
Manila and nearby provinces. The respondents were Alba's regular employees
who were paid different wage rates that ranged from P350.00 to P500.00 a day,
but were deprived of some statutorily-mandated benefits such as their overtime
pay, 13th month pay, holiday pay, and service incentive leave (SIL) pay.9 On
different dates in 2013, some of the respondents10 confronted Alba regarding
their benefits, but such action eventually resulted in their dismissal.11
In 2014, the other respondents again questioned Alba for his non-payment of
their benefits. Alba still took it against them and began treating them harshly, as
he would shout at them while at the job site, and would find scheming ways to
extend their working hours. The foregoing prompted these respondents to seek
the assistance of media personality Raffy Tulfo (Tulfo) in his Radyo
Singko Program. As he addressed the respondents' dilemma, Tulfo personally
called Alba, who was reminded to pay the respondents their full benefits. The
action, however, proved to create more harm than good for the respondents
because when they reported back for work the following day, they were
informed of their dismissal.12 Feeling aggrieved, all the respondents filed their
complaints for illegal dismissal and monetary claims with the NLRC. The two
complaints were later consolidated before the Labor Arbiter (LA).
For his defense, Alba argued that the respondents could not be deemed his
regular employees. He claimed to be a mere taker of small-scale construction
projects for house repairs and renovations. In the construction industry, he was
deemed a mere mamamakyaw, who would pool a team of skilled and semi-
skilled carpenters and masons for specific projects that usually lasted from one
to two weeks. The respondents were paid daily wages ranging from P600.00 to
P1,000.00, depending on their skill, and could take on projects with their own
clients after Alba's projects had terminated.13 For succeeding projects, Alba
would only take in construction workers who were still available for the duration
of the new work.14
As he denied any liability for the respondents' claims, Alba likewise presented
certifications from clients indicating that the latter directly paid the salaries of
the workers provided by Alba for the projects. He also argued that the
respondents used their own tools at work, and received instructions from either
the architect or foreman engaged by the project owner.15
The respondents were displeased by Alba's explanations. To disprove Alba's
claim that he was a mere mamamakyaw, they presented gate passes, issued by
the villages where Alba had construction projects, which indicated that Alba was
a "contractor."16
Ruling of the LA
The LA dismissed the complaints via a Decision17 dated July 31, 2015.
For the LA, no employer-employee relationship existed between Alba and the
respondents. The LA referred to the following circumstances affecting the
parties' payment of wages and the element of control, and which negated the
claim that the respondents should be deemed employees of Alba: first, the
wages of the respondents were paid directly by the project owners; second, the
respondents applied their own methodology and used their own tools and
equipment as they discharged their work; and third, the respondents obtained
their work instructions from architects or the foreman directly hired by the
owners or clients.18 The supposed gate passes issued by village representatives
did not qualify as substantial evidence to show that Alba was indeed a
contractor.19
The LA's decision ended with the following dispositive
portion:chanRoblesvirtualLawlibrary
WHEREFORE, this Labor Arbitration Branch resolves to DISMISS the complaint
for lack of merit.
SO ORDERED.20
Dissatisfied, the respondents appealed to the NLRC.
Ruling of the NLRC
The respondents' appeal was partly granted by the NLRC. On November 27,
2015, the NLRC rendered its Decision21 that ended with the following decretal
portion:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, this instant Appeal is PARTLY GRANTED. The
assailed Decision dated 31 July 2015 is AFFIRMED with respect to
[respondents] CONRADO GABE ESPINOSA, and JAIME OCFEMIA, JR. The same
assailed Decision is REVERSED AND SET ASIDE with respect to the remaining
[respondents]. [Alba and Alba Construction] are hereby ordered to:
1. Reinstate the remaining [respondents] and pay full backwages
computed from the time of their dismissal up to the time of actual
reinstatement. In case reinstatement is no longer possible due to
strained relations between the parties, [Alba and Alba Construction]
shall be liable for separation pay in lieu of reinstatement equivalent
to one month salary for every year of service reckoned from the
[respondents'] respective time of employment to the finality of this
decision;
2. Pay the remaining [respondents] moral and exemplary damages in
the total amount of P200,000.00;
3. Pay the remaining [respondents] their 13th month pay computed from
the last three years;
4. Pay the remaining [respondents], excluding Nilo Abrencillo, [SIL]
benefits computed from their respective date[s] of employment; and
5. Pay attorney's fees equivalent to 10 percent of the final judgment
award.
The monetary awards are as follows:
xxxx
P 14,459,613.28
ADD: Moral and Exemplary Damages 200,000.00
TOTAL 1[4],659,613.28
PLUS: 10% ATTORNEY'S FEES 1.465,961.33
TOTAL AWARD P16,125,574.61
SO ORDERED.22
The NLRC justified the dismissal of Jaime, Jr.'s complaint by citing sufficient
evidence that Alba engaged him as an independent contractor, specifically as
excavation contractor.23 Conrado's complaint, on the other hand, was dismissed
given his admission that he was employed as a tanod in Barangay Almanza Dos,
Las Piñas City.24
As to the remaining respondents, the NLRC rejected the LA's finding on the lack
of employer-employee relationship. The association between Alba and the
respondents was established after Alba readily proclaimed that the respondents
were part of his pool of workers. Alba had the power to determine who would
remain in or be terminated from his projects. He also admitted that he paid the
respondents their wages on a daily basis.
The claim that the respondents used their own methods and tools for the
construction remained unsubstantiated by convincing evidence. On the contrary,
it was established that Alba exercised his authority at the respondents' job sites.
The four-fold test in determining the existence of an employer-employee
relationship was duly satisfied, particularly: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer's power to control the employee on the means and methods by which
the work is accomplished.25 Their employment was deemed regular given that
they had been continuously rehired for Alba's projects for several years. More
importantly, they performed tasks which were necessary and indispensable to
the usual business or trade of Alba.26
The NLRC also addressed the evidentiary weight of the documents that were
considered by the LA. By the gate passes that formed part of the respondents'
evidence, it was shown that even the management of the villages that issued
them recognized Alba to be the employer of the respondents. On the other
hand, the certifications presented by Alba were either unsigned, defective or
proven to contain false statements.27
In the end, Alba was declared liable for illegal dismissal given his failure to
allocate further work assignments to the respondents. It did not appear that the
termination was founded on any just or valid cause, and neither was it
established that Alba duly satisfied the demands of due process for an
employee's termination.28 The illegally dismissed employees were declared
entitled to reinstatement and backwages, plus moral damages, exemplary
damages and attorney's fees.29
As regards the other monetary claims, the NLRC ordered the payment of
13th month pay and SIL pay, in view of Alba's failure to prove that the said
benefits had been paid to his employees. Nilo, however, was declared not
entitled to SIL pay because he worked as a personal driver who, pursuant to
Article 82 of the Labor Code, was not entitled to the benefit.30
Undaunted, Alba sought relief with the CA through a Petition for Certiorari,31 as
he imputed grave abuse of discretion upon the NLRC and reiterated the
arguments that he presented during the proceedings with the LA.
Ruling of the CA
On July 14, 2016, the CA rendered its Decision32 dismissing Alba's petition. The
CA reiterated the satisfaction of the four-fold test that is considered in finding
employer-employee relationship. The appellate court likewise assessed the
nature of work that the respondents were required to accomplish, vis-a-vis the
type of Alba's business, which prompted the CA to also affirm the finding that
the illegally dismissed respondents were regular employees.
The dispositive portion of the CA decision provides:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the instant Petition for Certiorari is hereby
DISMISSED.
SO ORDERED.33
Alba moved to reconsider, but his motion was denied by the CA in its
Resolution34 dated October 17, 2016. Hence, this petition.
The Present Petition
Alba restates the same grounds cited in his petition for certiorari with the CA.
Specifically assailed are the finding of employer-employee relationship, and the
ruling that the respondents were regular employees illegally dismissed by Alba
from employment. Alba likewise disputes the order upon him to pay the
monetary claims totalling P16,125,574.61.
Ruling of the Court
At the outset, the Court explains that it shall no longer delve on the correctness
of the NLRC's and CA's ruling to, first, dismiss the complaints of Conrado and
Jaime, Jr. for illegal dismissal and monetary claims, and, second, deny Nilo of his
claim for SIL pay. The NLRC's pronouncements thereon did not appear to have
been assailed by said parties, making the pronouncements on the matter already
final. Moreover, the Court's disposition in this case needs to be confined to the
issues that are assailed in the petition. Hence, the Court's further reference to,
or use of, the term "respondents" shall be limited by these qualifications.
Upon review, the Court finds no cogent reason to disturb the ruling of the CA
that affirmed the decision of the NLRC.
The respondents were regular employees of Alba
Contrary to Alba's contention, the existence of an employer-employee
relationship between him and the respondents was sufficiently established. The
Court reiterates its ruling in South East International Rattan, Inc., et al. v.
Coming35 on the established measure for such determination,
particularly:chanRoblesvirtualLawlibrary
To ascertain the existence of an employer-employee relationship[,]
jurisprudence has invariably adhered to the four-fold test, to wit: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employee's conduct, or the
so-called "control test." In resolving the issue of whether such relationship exists
in a given case, substantial evidence - that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion - is sufficient.
Although no particular form of evidence is required to prove the existence of the
relationship, and any competent and relevant evidence to prove the relationship
may be admitted, a finding that the relationship exists must nonetheless rest on
substantial evidence.36 (Citations omitted)
Alba's relationship with the respondents satisfies the four-fold test.
The presence of the first element is beyond dispute. Alba himself admitted that
he was the one who selected and engaged the workers that comprised his pool
of semi-skilled and skilled workers, for placement in his several construction
projects obtained from various clients. It was equally significant that Alba
determined to which projects the respondents were to be assigned, or whether
they would be assigned at all. As it established Alba's power to select and
engage, the circumstance likewise rendered concomitant the power of Alba to
dismiss any of the respondents. Notwithstanding the length of time that his
workers had been working for his projects, he could opt to simply drop them off
any assignment, effectively dismissing them from employment, albeit with
necessary consequences if the dismissal was proved to be illegal.
Alba's payment of the respondents' wages was likewise established by his plain
admission. As the LA cited in its decision, "[Alba] would pay the [respondents] a
daily fee ranging from [P]600.00 to [P]1,000.00. They were also given bonuses
from savings that [Alba and Alba Construction] made."37 As against this
statement from Alba and the certifications that he later presented to dispute his
direct payment of the wages, the latter deserves nil consideration. The
evidentiary weight of the supposed certifications on this issue even remained
questionable. While the documents appeared to have been subscribed before a
Notary Public, the requirements for a valid notarization were not satisfied
because proof of each affiant's identity was not indicated in the jurat. Taken in
light of Alba's declaration, it could be reasonably deduced that the arrangement
on his clients' direct payment of the workers' wages was by a mere concession
between Alba and the clients in order to facilitate payment, yet it was still Alba
who ultimately bore liability for the payment of the wages.
Specifically on the "control test," this power to control is oft-repeated in
jurisprudence as the most important and crucial among the four tests.38 The
Court explained in Gapayao v. Fulo, et al.:39
In Legend Hotel Manila v. Realuyo, the Court held that "the power of the
employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship. This is the
so-called control test and is premised on whether the person for whom the
services are performed reserves the right to control both the end achieved and
the manner and means used to achieve that end." It should be remembered that
the control test merely calls for the existence of the right to control, and not
necessarily the exercise thereof. It is not essential that the employer actually
supervises the performance of duties by the employee. It is enough that the
former has a right to wield the power.40 (Citations omitted)
From the records, it is clear that Alba possessed this power to control, and had in
fact freely exercised it over the respondents. Alba failed to satisfactorily rebut
the respondents' direct assertions that Alba frequented the work sites, and
would reprimand his workers whom he believed were idle or sluggish. He even
controlled the time when they had to stay at work.41 The respondents relied
upon instructions coming from Alba, as their work was for projects obtained by
the latter. He controlled the results of the work that the respondents had to
perform, along with the means and methods by which to accomplish them. His
control was not negated by any instructions that came from a foreman or an
architect, as directives that came from them, if there were at all, were
understandably limited. The respondents worked for Alba who held the project,
and the latter was the one who exercised authority over them.
Even Alba's allegation that the respondents were independent contractors was
not amply substantiated. Time and again, the Court has emphasized that "the
test of independent contractorship is 'whether one claiming to be an
independent contractor has contracted to do the work according to his own
methods and without being subject to the control of the employer, except only
as to the results of the work.'"42The Court has explained Alba's exercise of
control over the respondents. For a worker to be deemed an independent
contractor, it is further necessary to establish several indicators. In Television
and Production Exponents, Inc. and/or Tuviera v. Servaña,43 the Court
explained:chanRoblesvirtualLawlibrary
Aside from possessing substantial capital or investment, a legitimate job
contractor or subcontractor carries on a distinct and independent business and
undertakes to perform the job, work or service on its own account and under its
own responsibility according to its manner and method, and 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. x x x.44 (Citation
omitted)
"It is the burden of the employer to prove that a person whose services it pays
for is an independent contractor rather than a regular employee with or without
a fixed term."45 Undeniably, Alba failed to discharge this burden.
As the Court affirms the finding of illegal dismissal, it underscores the fact that
the respondents were regular employees, and not project employees as Alba
asserts. The mere fact that the respondents worked on projects that were time-
bound did not automatically characterize them as project employees. The nature
of their work was determinative, as the Court considers its ruling in DM.
Consunji, Inc., et al. v. Jamin46 that "[o]nce a project or work pool employee has
been: (1) continuously, as opposed to intermittently, rehired by the same
employer for the same tasks or nature of tasks; and (2) these tasks are vital,
necessary and indispensable to the usual business or trade of the employer, then
the employee must be deemed a regular employee."47
As construction workers, the respondents performed tasks that were crucial and
necessary in Alba's business. Their work was the core of his trade. His enterprise
could not have thrived through the years without their service. The fact that the
respondents had been engaged to work for long periods of time, and across
several construction projects, further substantiate the finding that their work
was vital in the business. Most respondents were separately employed beginning
way back to the 1990s to 2006.48 One employee, Samuel, even began working for
Alba in 1982.49 "[A]n employment ceases to be co-terminus with specific projects
when the employee is continuously rehired due to the demands of the
employer's business and re-engaged for many more projects without
interruption."50
Given the respondents' regular employment, their employment could not have
been validly terminated by Alba without just or valid cause, and without
affording them their right to due process. In cases affecting an employee's
dismissal, the burden is on the employer to prove that the dismissal was legal, a
matter that in this case, Alba miserably failed to establish. There were no
adequate explanations from Alba as to why the respondents had ceased
obtaining assignments in his construction projects. In view of the illegal
dismissal, the respondents were rightfully entitled to the ordered reinstatement
and award of backwages, or separation pay in case of strained relations.51
Alba is liable for the payment of the other monetary claims
The awards of 13th month pay, SIL pay, moral and exemplary damages, and
attorney's fees are sustained.
Article 95 of the Labor Code provides that "[e]very employee who has rendered
at least one year of service shall be entitled to a yearly [SIL] of five days with
pay." On the other hand, the respondents derive their right to the 13th month
pay from Presidential Decree No. 851, otherwise known as the 13thMonth Pay
Law, as amended.
After the respondents alleged non-payment of the 13th month and SIL pays, it
became incumbent upon Alba to prove payment of the statutory monetary
benefits when he opted to deny further liability therefor. Instead of doing so,
however, Alba could only harp on his argument that the respondents, in the first
place, could not be considered as his employees.
The award of P200,000.00 as total moral and exemplary damages for the
respondents is reasonable under the circumstances. When it declared such
award, the NLRC aptly referred to the dismissal as a retaliatory action by Alba
after his employees had asked for their benefits as employees. The NLRC
sufficiently explained:chanRoblesvirtualLawlibrary
A dismissed employee is entitled to moral damages 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.
Exemplary damages, on the other hand, may be awarded if the dismissal is
effected in a wanton, oppressive or malevolent manner. Dismissing the
[respondents] as an act of retaliation and after they requested to be given their
rightful benefits as employees constitute an act oppressive to labor and displays
x x x wanton exercise of authority.52
Finally, attorney's fees in labor cases are sanctioned "when the employee is
illegally dismissed in bad faith and is compelled to litigate or incur expenses to
protect his rights by reason of the unjustified acts of his employer."53
WHEREFORE, the petition is DENIED. The Decision dated July 14, 2016 and
Resolution dated October 17, 2016 of the Court of Appeals in CA-G.R. SP No.
144043 are AFFIRMED.
SO ORDERED.
G.R. No. 86408 February 15, 1990
BETA ELECTRIC CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER CRESENCIO
INIEGO, BETA ELECTRIC EMPLOYEES ASSOCIATION, and LUZVIMINDA
PETILLA, respondents.
Ermitaño, Asuncion, Manzano & Associates for petitioner.
Leonardo C. Fernandez for private respondents.
SARMIENTO, J.:
The petitioner questions the decision of the National Labor Relations
Commission affirming the judgment of the labor arbiter reinstating the private
respondent with backwages.
The petitioner hired the private respondent as clerk typist III 1 effective
December 15, 1986 until January 16, 1987. 2
On January 16, 1987, the petitioner gave her an extension up to February 15,
1987.3
On February 15, 1987, it gave her another extension up to March 15, 1987. 4
5
On March 15, 1987, it gave her a further extension until April 30, 1987.
On May 1, 1987, she was given until May 31, 1987. 6
On June 1, 1987, she was given up to June 30, 1987. 7
Her appointments were covered by corresponding written contracts. 8
On June 22, 1987, her services were terminated without notice or investigation.
On the same day, she went to the labor arbiter on a complaint for illegal
dismissal. As the court has indicated, both the labor arbiter and the respondent
National Labor Relations Commission ruled for her.
The Court likewise rules in her favor.
The petitioner argues mainly that the private respondent's appointment was
temporary and hence she may be terminated at will.
That she had been hired merely on a "temporary basis" "for purposes of meeting
the seasonal or peak demands of the business," 9 and as such, her services may
lawfully be terminated "after the accomplishment of [her] task" 10 is untenable.
The private respondent was to all intents and purposes, and at the very least, a
probationary employee, who became regular upon the expiration of six months.
Under Article 281 of the Labor Code, a probationary employee is "considered a
regular employee" if he has been "allowed to work after [the] probationary
period." 11 The fact that her employment has been a contract-to-contract basis
can not alter the character of employment, because contracts can not override
the mandate of law. Hence, by operation of law, she has become a regular
employee.
In the case at bar, the private employee was employed from December 15, 1986
until June 22, 1987 when she was ordered laid off. Her tenure having exceeded
six months, she attained regular employment.
The petitioner can not rightfully say that since the private respondent's
employment hinged from contract to contract, it was ergo, "temporary",
depending on the term of each agreement. Under the Labor Code, an
employment may only be said to be "temporary" "where [it] has been fixed for a
specific undertaking the completion of 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." 12 Quite to the contrary, the private respondent's work,
that of "typist-clerk" is far from being "specific" or "seasonal", but rather, one,
according to the Code, "where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business." 13 And
under the Code, where one performs such activities, he is a regular employee,
"[t]he provisions of written agreement to the contrary notwithstanding . . . 14
It is true that in Biboso v. Victorias Milling Company, Inc., 15 we recognized the
validity of contractual stipulations as to the duration of employment, we can not
apply it here because clearly, the contract-to-contract arrangement given to the
private respondent was but an artifice to prevent her from acquiring security of
tenure and to frustrate constitutional decrees.
The petitioner can not insist that the private respondent had been hired "for a
specific undertaking i.e. to handle the backlogs brought about by the seasonal
increase in the volume of her work." 16 The fact that she had been employed
purportedly for the simple purpose of unclogging the petitioner's files does not
make such an undertaking "specific" from the standpoint of law because in the
first place, it is "usually necessary or desirable in the usual business or trade of
the employer," 17 a development which disqualifies it outrightly as a "specific
undertaking", and in the second place, because a "specific undertaking" is
meant, in its ordinary acceptation, a special type of venture or project whose
duration is coterminous with the completion of the project, 18 e.g., project work.
It is not the case in the proceeding at bar.
WHEREFORE, the petition is DISMISSED. The private respondent is ordered
REINSTATED with backwages equivalent to three years with no qualification or
deductions.
SO ORDERED.
MENDOZA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking the annulment of the March 27, 2013 Decision[1] and the March 26, 2015
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 123413, which
affirmed the September 30, 2011 Decision[3] and the December 7, 2011
Resolution[4] of the National Labor Relations Commission (NLRC), in a case of
illegal dismissal filed by petitioners Marvin G. Felipe (Felipe) and Reynante L.
Velasco (Velasco) against respondents Danilo Divina Tamayo Konstract, Inc.
(DDTKI) and its president/owner, Danilo Divina Tamayo (Tamayo).
The Antecedents:
DDTKI hired Felipe as Formworks Aide on December 19, 2005, and Velasco as
Warehouse Aide on March 14, 2007. Felipe and Velasco claimed regular
employment status for having continuously worked for DDTKI until September
2010 when they were no longer given working assignments. They wrote a letter,
dated September 28, 2010, to the respondents inquiring about their
employment status and why they were not transferred to the Glorietta Project
which supposedly started on September 17, 2010, based on a document
denominated as a Manpower Requisition Form (MRF). The respondents,
however, did not reply to their letter.[5]
On October 12, 2010, Felipe and Velasco filed their complaint for illegal dismissal
and non-payment of service incentive leave and 13th month pay against the
respondents before the arbitration branch of the NLRC.[6]
The respondents, on the other hand, claimed that the petitioners were former
project employees of DDTKI who were hired for a particular project. They
presented various project employment contracts duly signed by Felipe and
Velasco to support their claim that these employees were hired for specific
construction projects for a specific period, and that they were informed of the
nature and duration of their employment from the beginning of their
engagement.[7]
The respondents further averred that as of September 2010, Felipe and Velasco
were not rehired as the company "did not need any more workers after the
completion of their respective projects." After the completion of their last
project, the US Embassy New Office Annex 1 Project (MNOX-1), Felipe and
Velasco were not rehired and their termination was reported to the Department
of Labor and Employment (DOLE) as "completion of phase of work." DDTKI
stressed that they were never employed for the Glorietta Project and the illegally
obtained MRF, a confidential document of DDTKI, did not serve as its
employment contract with Felipe and Velasco.[8]
At the Labor Level
[9]
On March 28, 2011, the Labor Arbiter (LA) rendered his decision dismissing the
complaint for utter lack of merit. The LA found that Felipe and Velasco were
project employees as borne out by their contracts of employment and, thus,
ruled that they were not illegally dismissed. It was pointed out that:
A close examination of their respective employment contracts would readily
reveal that they specifically mention the duration of the contract for a specific
client. On the last part thereof, there is a specific provision that the period
indicated shall serve as a notice to the employee for the termination of the
project employment.[10] [Emphasis supplied]
On appeal, the NLRC affirmed the ruling of the LA that the termination of the
services of Felipe and Velasco on the ground of the expiration of their project
employment contracts was legitimate and valid. The decision was, however,
modified as DDTKI was directed to pay Felipe and Velasco their proportionate
13th month pay. The latter moved for reconsideration, but their motion was
denied.
At the CA Level
Aggrieved, petitioners filed their petition for certiorari before the CA. In its
assailed Decision, dated March 27, 2013, the CA denied the petition after finding
that the NLRC did not act whimsically or arbitrarily to warrant the nullification of
its judgment. Further, the CA reiterated that the length of service and the
continuous rehiring of petitioners did not automatically accord them regular
status. DDTKI contracted petitioners for specific undertakings, the scope and
duration of which had been determined and made known to them. Their
termination from work was found by the CA not illegal, as the specific project for
which they were hired merely expired. The CA stated that the MRF, an internal
memo for administrative purposes, did not constitute a project employment
contract between DDTKI and petitioners. It, therefore, could not serve as basis
for the rehiring of petitioners.[11] Thus, the CA disposed the case as follows:
WHEREFORE, the instant Petition is DENIED and the assailed Decision dated 30
September 2011 and Resolution dated 07 December 2011 of the National Labor
Relations Commission are hereby AFFIRMED in toto.
SO ORDERED.[12]
Unsatisfied, petitioners moved for reconsideration, but their motion was denied
in the assailed CA Resolution, dated March 26, 2015, for being a mere rehash of
the arguments that were already raised and passed upon in their petition.
Hence, the present petition raising the following
ISSUES
I.
WHETHER OR NOT PETITIONERS WERE REGULAR (WORK POOL) EMPLOYEES OF
THE PRIVATE RESPONDENTS.
II.
WHETHER OR NOT PETITIONERS WERE ILLEGALLY DISMISSED.
III.
WHETHER OR NOT PETITIONERS ARE ENTITLED TO ALL THEIR MONETARY
CLAIMS, INCLUDING MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S
FEES.[13]
Petitioners contend that there was grave abuse of discretion amounting to lack
or in excess of jurisdiction on the part of the CA in denying their petition
for certiorari and their motion for reconsideration despite the evidence they
presented in support of their petition. They argue that contrary to the findings of
the CA, it cannot be said that their employment was project-based because there
was no project contract presented by the respondents supporting the one (1)
month duration of their employment contract and stating that the phase of the
project ended on particular dates mentioned in their employment contracts.
They insist that they were regular employees considering that they had been
employed to perform activities which were usually necessary or desirable in the
usual business or trade of their employer, continuously for a period of four (4)
years, and contracted for a total of seven (7) successive projects. Felipe's
position as Formworks Aide and Velasco's as Warehouse Aide clearly required
them to perform tasks inculcated in the usual operation of DDTKI's construction
business. As regular employees, they claim that they were entitled to security of
tenure and could only be dismissed for a just or authorized cause. The alleged
cause of dismissal (completion of project) was not a valid cause under Articles
282 and 283 of the Labor Code. Thus, petitioners posit that they were entitled to
reinstatement to their former or equivalent positions without loss of seniority
rights and other privileges; to their full back wages, inclusive of allowances; and
to their other benefits or their monetary equivalent computed from the time
their compensations were withheld up to the time of their actual reinstatement.
Petitioners also argue that having rendered uninterrupted service for four (4)
years, they were, under the law, entitled to service incentive leave pay three (3)
years backward from the filing of the case.[14]
Respondents' Position

Respondents DDKTI and Tamayo (respondents), in their Comment,[15] dated
August 24, 2015, counter that the petition should be dismissed because grave
abuse of discretion is not the proper subject matter of a petition under Rule 45.
Even assuming that grave abuse of discretion may be used as basis, petitioners
failed to show grave abuse on the part of the CA. Respondents insist that
petitioners were project employees because they were contracted to work for a
specific task not permanently continuing within a particular period that was
already determined at the time of their hiring. An uninterrupted service for four
(4) years did not automatically make them regular employees. Hence, they were
not entitled to reinstatement, back wages, moral and exemplary damages, and
attorney's fees.
Basically, petitioners are asking the Court to resolve whether the CA correctly
ruled that there was no grave, abuse of discretion on the part of the NLRC, thus,
affirming the finding that petitioners were project employees.
The Court's Ruling
The issue as to whether petitioners were project employees or regular
employees is factual in nature. Well-entrenched is the rule in our jurisdiction
that only questions of law may be entertained by this Court in a petition for
review on certiorari. Moreover, the factual findings of quasi-judicial bodies like
the NLRC, if supported by substantial evidence, are accorded respect and even
finality by this Court, more so when they coincide with those of the LA.[16] Such
factual findings are given more weight when the same are affirmed by the CA as
in this case.
There is no reason to depart from these rules. The CA did not err in affirming the
findings of the NLRC that petitioners were project employees of DDTKI. Article
280 of the Labor Code, which distinguishes a project employee from a regular
employee, provides:
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 exists.
[Emphasis supplied]
A project employee is assigned to a project which begins and ends at determined
or determinable times. Unlike regular employees who may only be dismissed for
just and/or authorized causes under the Labor Code, the services of employees
who are hired as "project employees" may be lawfully terminated at the
completion of the project. According to jurisprudence, the principal test for
determining if particular employees are properly characterized as "project
employees," as distinguished from "regular employees," is whether or not the
employees are assigned to carry out a "specific project or undertaking," the
duration (and scope) of which are specified at the time they are engaged for that
project. The project can either be (1) 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 (2) a particular job or undertaking that is not within the regular
business of the corporation.[17]
In this case, the LA, the NLRC and the CA were one in finding that petitioners
were project employees hired by DDTKI for a specific task within a particular
period already determined at the time of their hiring as evidenced by their
employment contracts.
As correctly noted by the CA, petitioners' employment was terminated due to
the expiration of the period for which they were contracted. Considering that
their employment contract for the US Embassy New Office Annex 1 Project
(MNOX-1) had been terminated on September 18, 2010, the CA correctly ruled
that their termination from work was not illegal but that the project for which
they were hired merely expired.
On their contention that they were regular employees due to their uninterrupted
service for DDTKI for four (4) years and the continuous employment contract
renewal every month, petitioners are mistaken. In Aro v. NLRC,[18] the Court
explained:
[T]he length of service or the re-hiring of construction workers on a project-to-
project basis does not confer upon them regular employment status, since
their, re-hiring is only a natural consequence of the fact that experienced
construction workers are preferred. Employees who are hired for carrying out a
separate job, distinct from the other undertakings of the company, the scope
and duration of which has been determined and made known to the employees
at the time of the employment, are properly treated as project employees and
their services may be lawfully terminated upon the completion of a project.
xxx.[19] [Emphasis supplied]
Therefore, being project employees who have been validly terminated by reason
of the completion of the specific project, MNOX-1, for which they were hired,
petitioners Felipe and Velasco are not entitled to reinstatement and back wages.
On the issue of non-payment of service incentive leave, the Court rules that
petitioners are not entitled to this benefit either. Based on records and as
correctly noted by respondents, they have not rendered at least one year of
continuous service.
WHEREFORE, the petition is DENIED.
SO ORDERED.
FIRST DIVISION
G.R. No. 221897, November 07, 2016
ISIDRO QUEBRAL, ALBERTO ESQUILLO, RENANTE SALINSAN, JEROME
MACANDOG, EDGARDO GAYORGOR, JIM ROBERT PERFECTO, NOEL PERFECTO,
DENNIS PAGAYON, AND HERCULANO MACANDOG Petitioners, v. ANGBUS
CONSTRUCTION, INC. AND ANGELO BUSTAMANTE, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated July 27,
2015 and the Resolution3 dated November 2, 2015 of the Court of Appeals (CA)
in CA-G.R. SP No. 138885, which annulled and set aside the Decision4 dated
December 26, 2013 of the National Labor Relations Commission (NLRC) in NLRC
NCR Case Nos. 07-10288-12, 07-10636-12, 07-10708-12, and 07-10992-12,
declaring that petitioners Isidro Quebral, Alberto Esquillo, Renante Salinsan,
Jerome Macandog, Edgardo Gayorgor, Jim Robert Perfecto, Noel Perfecto,
Dennis Pagayon, and Herculano Macandog (petitioners) are regular employees
of respondent Angbus Construction, Inc. (Angbus) and were illegally dismissed
from employment.chanroblesvirtuallawlibrary
The Facts
Petitioners alleged that Angbus employed them as construction workers on
various dates from 2008 to 2011. They claimed to be regular employees since
they were engaged to perform tasks which are necessary and desirable to the
usual business of Angbus, and that they have rendered services to the latter's
construction business for several years already.5 They were, however, summarily
dismissed from work on June 28, 2012 and July 14, 2012 without any just or
authorized cause and due process. Thus, they filed consolidated cases for illegal
dismissal with prayer for reinstatement and payment of full backwages, salary
differential, ECOLA, 13th month pay, service incentive leave pay, overtime and
holiday pay, including moral and exemplary damages as well as attorney's fees.6
For their part, respondents maintained that petitioners were first employed by
Angelfe Management and Consultancy (Angelfe) for a one time project only. Two
or three years after the completion of the Angelfe project, they were then hired
by Angbus, which is a separate and distinct business entity from the former.
Thus, petitioners were hired only for two project employment contracts - one
each with Angelfe and Angbus. Respondents further stated that a long period of
time between the first project employment and the other intervened, which
meant that petitioners were not re-hired repeatedly and continuously.7
However, respondents failed to present petitioners' employment contracts,
payrolls, and job application documents either at Angelfe or Angbus. They
averred that these documents were completely damaged by the flood caused by
the "habagat" on August 6 to 12, 2012, as evinced by a Certification issued by
the Chairman of Barangay Rosario, Pasig City, (Brgy. Rosario Certification) where
Angelfe and later, Angbus purportedly held offices.8
The LA Ruling
In a Decision9 dated March 27, 2013, the Labor Arbiter (LA) found that
petitioners were not illegally dismissed. The LA observed that despite the non-
submission of the project employment contracts between the parties (which
were completely damaged by flood as stated in the Brgy. Rosario Certification),
there was still sufficient basis to support respondents' claim that petitioners
were hired for specific projects with specific durations by two different
companies, i.e., Angbus and Angelfe. In this relation, the LA gave credence to the
Establishment Employment Reports submitted to the Department of Labor and
Employment (DOLE Reports) which showed that the cause for petitioners'
termination was project completion. Finally, the LA pointed out that the hiring of
petitioners for a definite period for a certain phase of a project was an industry
practice in the construction business.10
Separately, however, the LA ordered Angbus and Angelfe to pay petitioners their
salary differentials and claims for 13th month pay and holiday pay as these
liabilities were admitted by them. Meanwhile, individual respondent Angelo
Bustamante, Jr. (Bustamante) was relieved of any liability for want of basis.11
Aggrieved, petitioners filed an appeal to the NLRC.chanroblesvirtuallawlibrary
The NLRC Ruling
In a Decision12 dated December 26, 2013, the NLRC reversed the LA's ruling and
declared that petitioners were regular employees who were illegally dismissed
on June 14, 2012; hence, they are entitled to reinstatement and full backwages,
including their other monetary claims.
The NLRC stressed that respondents had control over the company records but
failed to present the project employment contracts signed by the workers to
rebut petitioners' claim that they were regular employees. The Brgy. Rosario
Certification attempting to justify the contracts' non submission was not given
credence as respondents' business address was in Quezon City and not in
Rosario, Pasig. Instead, the NLRC observed that a certification from the barangay
captain of the place where their business address is located should have been
presented.13
Moreover, the NLRC noted that Angbus hired all the petitioners almost at the
same time in 2012, giving the impression that these workers were continuously
hired in one project after another and that their employment, first with Angelfe
and then with Angbus, was uninterrupted. The NLRC did not give any credence
to the allegation that Angbus and Angelfe were separate and distinct companies
considering that they maintained the same business address, are owned by the
same owner, and are engaged in the same construction business, where
petitioners were continuously employed. Neither did the NLRC give merit to the
DOLE Reports as these were not submitted within 30 days prior to the
displacement of the workers.14
In a Resolution15 dated December 29, 2014, the NLRC denied the motion for
reconsideration filed by Angbus and Bustamante. On the allegation that
petitioners' appeal was filed out of time, the NLRC pointed out that the dates
appearing on the mailing envelope on record and on the registry receipt show
that the appeal memorandum was mailed on May 20, 2013, which was the last
day of the reglementary period. It gave credence to the certification of
Postmaster Larry S. Laureta (Laureta's certification), the custodian of records at
the Philippine Overseas Employment Administration (POEA) Post Office at the
time the mail matter was posted, that confirmed the said mailing date.16
On the merits, the NLRC still refused to give weight to the Brgy. Rosario
Certification. It added that although the project site is in Pasig City, the employer
is required to keep employment records in its main office, not in the temporary
project site or extension office. It also upheld the finding that petitioners were
regular employees in view of Angbus' failure to substantiate its claim that they
were project employees. In examining the entries in the DOLE Reports, the NLRC
deduced that the real reason for petitioners' termination from work is
retrenchment and not project completion. Thus, Angbus should have filed a
notice of retrenchment to the DOLE thirty (30) days prior to the employees'
actual termination in observance of procedural due process, failing in which
amounted to illegal dismissal.17
Dissatisfied, respondents elevated their case to the CA
on certiorari.chanroblesvirtuallawlibrary
The CA Ruling
In a Decision18 dated July 27, 2015, the CA held that the NLRC gravely abused its
discretion when it: (a) gave due course to petitioners' appeal even though it was
filed out of time; and (b) ruled that petitioners were regular employees of
Angbus.
On the timeliness of the appeal's filing, the CA ascribed no evidentiary value to
Registry Receipt No. 2468 (registry receipt) due to the lack of an authenticating
affidavit by the person who mailed it. Petitioners presented the registry receipt
to prove that they filed their memorandum of appeal together with the appeal
fee on the last day of the reglementary period on May 20, 2013. The CA refused
to give weight to Laureta's certification that the document covered by the
registry return was indeed mailed at the POEA Post Office on the said date. In so
ruling, the CA explained that Laureta's certification was issued without authority
because it was issued only on February 17, 2014 when Laureta was no longer
assigned at the POEA Office. Thus, the NLRC erred in considering the registry
receipt as conclusive proof of petitioners' timely filing of their appeal.19
On the substantive aspect, the CA reinstated the LA's finding that petitioners
were project employees, noting that the absence of a project employment
contract does not automatically confer regular status to the employees. It also
observed that the Brgy. Rosario Certification adequately explained the non-
submission of the employment contracts, and that the DOLE Reports showed
petitioners' status as project employees. Likewise, the CA pointed out that the
NLRC erred in treating Angelfe and Angbus as one and the same entity just
because the two companies have the same business address, the same owner,
and were engaged in the same construction business. Consequently, it ordered
respondents to return to petitioners whatever amount the former has received
by virtue of the NLRC Decision.20
Petitioners filed a motion for reconsideration, which was, however, denied in a
Resolution21 dated November 2, 2015; hence, this
petition.chanroblesvirtuallawlibrary
The Issue Before the Court

The core issue for the Court's resolution is whether the CA erred in (a) holding
that petitioners' appeal before the NLRC was filed out of time and (b) declaring
petitioners as project employees of Angbus and consequently, holding their
dismissal to be valid.chanroblesvirtuallawlibrary
The Court's Ruling
The petition is meritorious.
Preliminarily, the Court stresses the distinct approach in reviewing a CA's ruling
in a labor case. In a Rule 45 review, the Court examines the correctness of the
CA's Decision in contrast with the review of jurisdictional errors under Rule 65.
Furthermore, Rule 45 limits the review to questions of law. In ruling for legal
correctness, the Court views the CA Decision in the same context that the
petition for certiorariwas presented to the CA. Hence, the Court has to examine
the CA's Decision from the prism of whether the CA correctly determined the
presence or absence of grave abuse of discretion in the NLRC decision.22
Grave abuse of discretion connotes judgment exercised in a capricious and
whimsical manner that is tantamount to lack of jurisdiction. To be considered
"grave," discretion must be exercised in a despotic manner by reason of passion
or personal hostility, and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined by or
to act at all in contemplation of law.23
In labor cases, grave abuse of discretion may be ascribed to the NLRC when its
findings and conclusions are not supported by substantial evidence,24 which
refers to that amount of relevant evidence that a reasonable mind might accept
as adequate to justify a conclusion.25 Thus, if the NLRC's ruling has basis in the
evidence and the applicable law and jurisprudence, then no grave abuse of
discretion exists and the CA should so declare and, accordingly, dismiss the
petition.26
Viewed from these lenses, the Court finds that the NLRC's Decision in this case
was supported by substantial evidence and is consistent with law and
jurisprudence as to the issues raised in the petition. Hence, the CA incorrectly
held that the NLRC gravely abused its discretion in giving due course to
petitioners' appeal filed before it and in declaring that the petitioners were
regular employees of Angbus. Accordingly, the NLRC's ruling must be reinstated.
On the procedural aspect, the Court notes that the issue of the timeliness of the
filing of the appeal is a factual issue that requires a review of the evidence
presented on when the appeal was actually filed.27Thus, it is generally not
covered by a Rule 45 review. In this case, however, the conflicting findings of the
CA and the NLRC on this matter pave the way for the Court to review this factual
issue even in a Rule 45 review.28
In this case, the CA held that the NLRC should not have given due course to
petitioners' appeal for being filed out of time. Although both the registry receipt
and the date stamped on the envelope showed that the date of posting was May
20, 2013 or the last day of the reglementary period, the CA was not convinced
that the appeal was actually mailed on that date at the POEA Post Office. The CA
held that petitioners should have submitted, together with the registry receipt,
an authenticating affidavit of the person who mailed the memorandum of
appeal. It also refused to give credence to Laureta's certification on the ground
that it was issued without authority, having been issued only on February 17,
2014 when Laureta was no longer assigned at the POEA Post Office. It therefore
concluded that the NLRC erred in considering the registry receipt as conclusive
proof that May 20, 2013 is the date of filing the appeal.
After reviewing the evidence on record, the Court disagrees with the CA that the
appeal was not timely filed.
Section 3, Rule 13 of the Rules of Court provides that where pleadings are filed
by registered mail, the date of mailing as shown by the post office stamp on the
envelope or the registry receipt shall be considered as the date of filing. Based
on this provision, the date of filing is determinable from two sources: (1) from
the post office stamp on the envelope or (2) from the registry receipt, either of
which may suffice to prove the timeliness of the filing of the pleadings.29
The Court previously ruled that if the date stamped on one is earlier than the
other, the former may be accepted as the date of filing.30 This presupposes,
however, that the envelope or registry receipt and the dates appearing thereon
are duly authenticated before the tribunal where they are presented.31 When
the photocopy of a registry receipt bears an earlier date but is not authenticated,
the Court held that the later date stamped on the envelope shall be considered
as the date of filing.32
In the present case, the petitioners submitted these pieces of evidence to show
the timeliness of their appeal: (a) the registry receipt; (b) a copy of the envelope
that contained the memorandum of appeal and appeal fee; and (c) Laureta's
certification. As the CA noted, all three documents indicate May 20, 2013 as the
date of mailing at the POEA Post Office in Mandaluyong City. Considering that
there is no variance in the dates stated on these documents, there is no reason
for the Court to mark another date as the date of mailing.
Laureta's certification corroborates the date of filing specified in the registry
receipt and on the envelope. The Court recognizes that, ideally, the incumbent
postmaster in the POEA Post Office should be the one to certify the date of
mailing based on the post office records, considering that he or she is the person
duly authorized to do so. Nevertheless, the Court finds that Laureta's
certification as the postmaster at the time of mailing, together with the pieces of
evidence earlier mentioned, constitutes substantial compliance with the
authentication requirement.
On the substantive aspect, Article 29533 of the Labor Code,34 as amended,
distinguishes a project employee from a regular employee, to
wit:chanRoblesvirtualLawlibrary
Art. 295 [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 projector 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.
x x x x (Emphasis and underscoring supplied)
A project-based employee is assigned to a project which begins and ends at
determined or determinable times.35 Unlike regular employees who may only be
dismissed for just and/or authorized causes under the Labor Code, the services
of employees who are hired as project-based employees may be lawfully
terminated at the completion of the project.36
To safeguard the rights of workers against the arbitrary use of the word "project"
to preclude them from attaining regular status, jurisprudence provides that
employers claiming that their workers are project-based employees have the
burden to prove that these two requisites concur: (a) the employees were
assigned to carry out a specific project or undertaking; and (b) the duration and
scope of which were specified at the time they were engaged for such project.37
In this case, Angbus failed to discharge this burden. Notably, Angbus did not
state the specific project or undertaking assigned to petitioners. As to the second
requisite, not only was Angbus unable to produce petitioners' employment
contracts, it also failed to present other evidence to show that it informed
petitioners of the duration and scope of their work.
The Court previously ruled that although the absence of a written contract does
not by itself grant regular status to the employees, it is evidence that they were
informed of the duration and scope of their work and their status as project
employees at the start of their engagement.38 When no other evidence is
offered, the absence of employment contracts raises a serious question of
whether the employees were sufficiently apprised at the start of their
employment of their status as project employees.39 Absent such proof, it is
presumed that they are regular employees, thus, can only be dismissed for just
or authorized causes upon compliance with procedural due process.40
The Court agrees with the NLRC that the Brgy. Rosario Certification cannot be
given credence as it was issued by the barangay captain in Rosario, Pasig City
rather than in Quezon City.
Section 11, Rule X, Book III of the Omnibus Rules Implementing the Labor
Code41 (Rules) requires the employer to keep all employment records in the main
or branch office where the employees are assigned. It also prohibits the keeping
of employees' records elsewhere. In the present case, Angbus has consistently
declared in its pleadings, in its General Information Sheet, and the DOLE Reports
that its main office is located at 16 Pratt Street, Filinvest 2, Batasan Hills, Quezon
City. As aptly ruled by the NLRC, the extension office in the project site in Brgy.
Rosario, Pasig City is not a branch office contemplated by the Rules where
employees' records may be kept but merely a temporary office. Hence, the Brgy.
Rosario Certification, stating that petitioners' employment records were
destroyed by flood, does not justify the non-presentation of the employment
contracts. Besides, Angbus could still have presented other evidence to prove
project employment but it did not do so, relying on the convenient excuse that
the documents were destroyed by flood.42
indicators of project employment in the same DOLE issuance above-cited.
All told, since Angbus failed to discharge its burden to prove that petitioners
were project employees, the NLRC correctly ruled that they should be
considered as regular employees. Thus, the termination of petitioners'
employment should have been for a just or authorized cause, the lack of which,
as in this case, amounts to illegal dismissal.
As a final point, it may not be amiss to state that petitioners' entitlement to their
monetary claims, such as salary differentials, thirteenth month pay, and holiday
pay,43 was not contested further by the parties. Neither did they question the
NLRC's computation of the monetary awards due to petitioners. Hence, the
Court finds no reason to disturb it.
WHEREFORE, the petition is GRANTED. The Decision dated July 27, 2015 and the
Resolution dated November 2, 2015 of the Court of Appeals in CA-G.R. SP No.
138885 are hereby REVERSED and SET ASIDE. The Decision dated December 26,
2013 and the Resolution dated December 29, 2014 of the National Labor
Relations Commission in NLRC Case Nos. 07-10288-12, 07-10636-12, 07-10708-
12 and 07-10992-12 are REINSTATED.
SO ORDERED.

The Court further observes that the CA placed unwarranted emphasis on the
DOLE Reports or termination reports submitted by Angbus as basis to rule that
petitioners were project employees.

Section 2.2 of Department Order No. 19, Series of 1993, entitled "Guidelines
Governing the Employment of Workers in the Construction industry," issued by
the DOLE, provides that:chanRoblesvirtualLawlibrary

2.2 Indicators of project employment. - Either one or more of the following

circumstances, among others, may be considered as indicators that an
employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker is
engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is

defined in an employment agreement and is made clear to the employee at the
time of hiring.

(c) The work/service performed by the employee is in connection with the

particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer
his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is

reported to the Department of Labor and Employment (DOLE) Regional Office
having jurisdiction over the workplace within 30 days following the date of his
separation from work, using the prescribed form on employees'
terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay

completion bonus to the project employee as practiced by most construction
companies. (Emphases supplied)

Based on the foregoing, it is clear that the submission of the termination report
to the DOLE "may be considered" only as an indicator of project employment. By
the provision's tenor, the submission of this report, by and of itself, is therefore
not conclusive to confirm the status of the terminated employees as project
employees, especially in this case where there is a glaring absence of evidence to
prove that petitioners were assigned to carry out a specific project or
undertaking, and that they were informed of the duration and scope of their
supposed project engagement, which are, in fact, attendant to the first two (2)