CLASSES OF EMPLOYEES (PROBATIONARY EMPLOYEES)
Abbott Laboratories v. Alcaraz 2013 RULING+RATIO:
Digest Author: FABI
DOCTRINE: If the employer fails to inform the probationary employee of the reasonable
standards upon which the regularization would be based on at the time of the engagement, then
the said employee shall be deemed a regular employee.
FACTS:
1. Abbott Laboratories, Philippines published in major broadsheet that it is in need of
Medical and Regulatory Affairs Manager stating therein the responsibilities and
qualifications of said position.
2. Abbott formally offered Alcaraz the abovementioned position which was an item
under the company’s Hospira Affiliate Local Surveillance Unit (ALSU) department.
3. Alcaraz signed an employment contract which stated, inter alia, that she was to
be placed on probation for a period of six (6) months beginning February 15, 2005
to August 14, 2005.
4. She underwent pre-employment orientation where she was briefed on her duties and
responsibilities.
5. Alcaraz received an e-mail from the HR Director explaining the procedure for
evaluating the performance of probationary employees and further indicated that
Abbott had only one evaluation system for all of its employees.
6. Alcaraz was also given copies of Abbott’s Code of Conduct and Probationary
Performance Standards and Evaluation and Performance Excellence Orientation
Modules which she had to apply in line with her task of evaluating the Hospira ALSU
staff.
7. Alcaraz received an e-mail from Misa requesting immediate action on the staff’s
performance evaluation as their probationary periods were about to end.
8. Alcaraz was called to a meeting with her immediate supervisor and the former
HR Director where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager.
9. Thereafter she was asked to tender her resignation, else they be forced to
terminate her services.
10. She filed a case of illegal dismissal against Abott and its officers.
DECISIONS:
1. Labor Arbiter dismissed her complaint for lack of merit.
2. NLRC reversed and set aside the LA’s ruling and ordered Abott to reinstate and pay
Alcaraz moral and exemplary damages.
3. CA affirmed NLRC decision.
ISSUES:
1. W/N Alcaraz was sufficiently informed of the reasonable standards to qualify her
as a regular employee.
2. W/N Alcaraz was validly terminated from her employment.
1.) YES, Alcaraz was sufficiently informed of the reasonable standards.
LB: The employer is made to comply with two (2) requirements when dealing with a
probationary employee:
• first, the employer must communicate the regularization standards to the
probationary employee; and
• second, the employer must make such communication at the time of the
probationary employee’s engagement.
If the employer fails to comply with either, the employee is deemed as a regular and not a
probationary employee.
AP: In this case, Abbott complied with the above-stated requirements.
• This conclusion is largely impelled by the fact that Abbott clearly conveyed to
Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to,
during the time of her engagement, and the incipient stages of her employment.
2.) YES, Alcaraz was validly terminated from her employment.
LB: A probationary employee, like a regular employee, enjoys security of tenure. However, in
cases of probationary employment, aside from just or authorized causes of termination, an
additional ground is provided under Article 295 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular employee in accordance
with the reasonable standards made known by the employer to the employee at the time of
the engagement.
A different procedure is applied when terminating a probationary employee; the usual two-notice
rule does not govern.
Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that "if the
termination is brought about by the failure of an employee to meet the standards of the
employer in case of probationary employment, it shall be sufficient that a written notice is
served the employee, within a reasonable time from the effective date of termination."
AP: As the records show, Alcaraz's dismissal was effected through a letter dated May 19, 2005
which she received on May 23, 2005 and again on May 27, 2005.
• Stated therein were the reasons for her termination, i.e., that after proper
evaluation, Abbott determined that she failed to meet the reasonable standards
for her regularization considering her lack of time and people management and
decision-making skills, which are necessary in the performance of her functions
as Regulatory Affairs Manager.
• This written notice sufficiently meets the criteria set forth above, thereby
legitimizing the cause and manner of Alcaraz’s dismissal as a probationary
employee under the parameters set by the Labor Code.
DISPOSITION: Petition Granted
 CLASSES OF EMPLOYEES (PROBATIONARY EMPLOYEES)
Abbott Laboratories v. Alcaraz 2014
Digest Author: FABI
DOCTRINE: Probationary Employees; Termination of Employment; As the Supreme Court
observed, an employee’s failure to perform the duties and responsibilities which have been
clearly made known to him constitutes a justifiable basis for a probationary employee’s non-
regularization.
If the probationary employee had been fully apprised by his employer of these duties and
responsibilities, then basic knowledge and common sense dictate that he must adequately
perform the same, else he fails to pass the probationary trial and may therefore be subject to
termination.
Aliling v. Feliciano not applicable
Respondent’s contention: By way of example, Alcaraz cites the case of a probationary
salesperson and asks how does such employee achieve regular status if he does not know how
much he needs to sell to reach the same.
LB: The employee in Aliling, a sales executive, was belatedly informed of his quota requirement.
Thus, considering the nature of his position, the fact that he was not informed of his sales quota
at the time of his engagement changed the complexion of his employment.
AP: Contrarily, the nature of Alcaraz’s duties and responsibilities as Regulatory Affairs Manager
negates the application of the foregoing.

Standards for regularization; conceptual under pinnings. Records show that Alcaraz was terminated because she

(a) did not manage her time effectively;

Respondent’s contention: Alcaraz posits that, contrary to the Court’s Decision, one’s job (b) failed to gain the trust of her staff and to build an effective rapport with them;
description cannot by and of itself be treated as a standard for regularization as a standard (c) failed to train her staff effectively; and
denotes a measure of quantity or quality. (ISSUE) (d) was not able to obtain the knowledge and ability to make sound judgments
on case processing and article review which were necessary for the proper
RULING: performance of her duties.

(1) D: it is not the probationary employee’s job description but the adequate performance of his
duties and responsibilities which constitutes the inherent and implied standard for regularization
(2) If the probationary employee had been fully apprised by his employer of these duties and
responsibilities, then basic knowledge and common sense dictate that he must adequately
perform the same, else he fails to pass the probationary trial and may therefore be subject to
termination.
AP: The determination of “adequate performance” is not, in all cases, measurable by
quantitative specification, such as that of a sales quota in Alcaraz’s example. It is also hinged
on the qualitative assessment of the employee’s work; by its nature, this largely rests on the
reasonable exercise of the employer’s management prerogative.
Due to the nature and variety of these managerial functions, the best that Abbott could have
done, at the time of Alcaraz’s engagement, was to inform her of her duties and responsibilities,
the adequate performance of which, to repeat, is an inherent and implied standard for
regularization; this is unlike the circumstance in Aliling where a quantitative regularization
standard, in the term of a sales quota, was readily articulable to the employee at the
outset.
CONCLUSION: Hence, since the reasonableness of Alcaraz’s assessment clearly appears from
the records, her termination was justified.
DISPOSITION: MR denied, decision is affirmed.

The employer cannot bear out in exacting detail at the beginning of the engagement what
he deems as “quality work” especially since the probationary employee has yet to submit
the required output.

The same logic applies to a probationary managerial employee who is tasked to supervise a
particular department, as Alcaraz in this case.

It is hardly possible for the employer, at the time of the employee’s engagement, to map into
technical indicators, or convey in precise detail the quality standards by which the latter should
effectively manage the department.

Factors which gauge the ability of the managerial employee to either deal with his
subordinates (e.g., how to spur their performance, or command respect and obedience from
them), or to organize office policies, are hardly conveyable at the outset of the engagement
since the employee has yet to be immersed into the work itself.
 Topic: Probationary Employees
Philippine National Oil Company – Energy Development Corporation v. Buenviaje
Doctrine:
1. As an employer, it has an exclusive management prerogative to hire someone
for the position, either on a permanent status right from the start or place him first on
probation. In either case, the employee’s right to security of tenure immediately
attaches at the time of hiring.
 As a permanent employee, he may only be validly dismissed for a just or
authorized cause. As a probationary employee, he may also be validly
dismissed for a just or authorized cause, or when he fails to qualify as a
regular employee in accordance with reasonable standards made known to
him by the employer at the time of his engagement. Apart from the protection
this last ground in the dismissal of a probationary employee affords the
employee, it is also in line with the right or privilege of the employer to
choose who will be accorded with regular or permanent status and who will
be denied.
2. A probationary employee is defined as one who is on trial by an employer
during which the employer determines whether or not he is qualified for permanent
employment.
 In general, probationary employment cannot exceed six (6) months, otherwise
the employee concerned shall be considered a regular employee. It is also
indispensable in probationary employment that the employer informs the
employee of the reasonable standards that will be used as a basis for his or her
regularization at the time of his or her engagement. If the employer fails to
comply with this, then the employee is considered a regular employee.
3. Aside from just and authorized causes, a probationary employee may also be
dismissed due to failure to qualify in accordance with the standards of the employer
made known to him at the time of his engagement
Facts:
 PNOC-EDC hired Buenviaje as Assistant to the then Chairman/President CEO
Apostol, her father.
 Buenviaje’s employment contract provided that she will serve until June 30, 2004
or coterminous with the tenure of Apostol, whichever comes first
 Buenviaje assumed the position of Marketing Division Manager as early as the
time of the creation of the Marketing Division
 Apostol filed his Certificate of Candidacy as Governor for the province of Leyte,
yet continued to discharge his functions as President in PNOC-EDC
 Paul Aquino (Aquino), the new President of PNOC-EDC, appointed Buenviaje to
the position of Senior Manager for Marketing Division
 Buenviaje was subjected to a performance appraisal during the first week- She
received a satisfactory grade of three (3).
 In her subsequent performance appraisal, she received an unsatisfactory grade
of four (4).
 Thus, the VP for Corporate Affairs of PNOC informed Buenviaje that she did
not qualify for regular employment
 Buenviaje gave her written comments on the results of her second performance
appraisal
 In reply, PNOC-EDC sent her two (2) more letters reiterating her non-
confirmation and separation from the company and issued a Memorandum to
Buenviaje instructing her to prepare a turnover report before her physical move-
out
 Buenviaje responded by filing a complaint before the Labor Arbiter for illegal
dismissal among other money claims
 LA ruled in favor of Buenviaje. NLRC affirmed LA that Buenviaje is a regular
employee.CA Affirmed.
Issue: (1) W/N Buenviaje was a permanent employee? YES
(2) W/N Buenviaje is a probationary employee? NO
Held: Yes.
LB: As an employer, PNOC-EDC has an exclusive management prerogative to hire
someone for the position, either on a permanent status right from the start or place him
first on probation. In either case, the employee’s right to security of tenure immediately
attaches at the time of hiring.
As a permanent employee, he may only be validly dismissed for a just or authorized
cause.
AP:
 PNOC-EDC exercised its prerogative to hire Buenviaje as a permanent employee right
from the start or on February 1, 2004, the effectivity date of her appointment.
 In her appointment letter, PNOC-EDC’s President expressly instructed the HRMD to amend
Buenviaje’s status from coterminous to regular
 He also informed her that her regular status shall be retroactive
 Nowhere in the appointment letter did PNOC-EDC say that Buenviaje was being hired
on probationary status.
 Upon evaluation on two (2) occasions, PNOC-EDC used a performance appraisal form
intended for permanent managerial employees, even if the company had a form for
probationary employees.
 The intention, therefore, all along was to grant Buenviaje regular or permanent
employment.
Note: This intention was clear notwithstanding the clause in the appointment letter saying that
Buenviaje’s appointment was subject to confirmation by her immediate superior based on her
performance during the next six (6) months. This clause did not make her regularization
conditional, but rather, effectively informed Buenviaje that her work performance will be
evaluated later on
(2) LB: A probationary employee is defined as one who is on trial by an employer during
which the employer determines whether or not he is qualified for permanent employment.
 In general, probationary employment cannot exceed six (6) months,
otherwise the employee concerned shall be considered a regular employee.
 It is also indispensable in probationary employment that the employer
informs the employee of the reasonable standards that will be used as
a basis for his or her regularization at the time of his or her engagement.
 If the employer fails to comply with this, then the employee is
considered a regular employee.
AP: (IN RELATION TO ABBOTT CASE)
The receipt by Buenviaje of her job description does not make this case on all fours with
Abbott. The receipt of job description and the company’s code of conduct in that case was just
one of the attendant circumstances which we found equivalent to being actually informed of the
performance standards upon which a probationary employee should be evaluated. What was
significant in that case was that both the offer sheet and the employment contract
specifically stated that respondent was being employed on a probationary status. Thus,
the intention of Abbott was to hire Alcaraz as a probationary employee. This
circumstance is not obtaining in this case and the opposite, as we have already
discussed, is true.
LB: The employer, however, must still observe due process of law in the form of:
1) informing the employee of the reasonable standards expected of him during his probationary
period at the time of his engagement; and
2) serving the employee with a written notice within a reasonable time from the effective date of
termination
AP:

HERE, the job description attached to Buenviaje’s appointment letter merely answers the PNOC-EDC failed to inform Buenviaje of the reasonable standards for her regularization at the
question: “what duties and responsibilities does the position entail?” but fails to provide time of her engagement.
the answer/s to the question: “how would the employer gauge the performance of the
probationary employee?”  The unfairness of this failure became apparent with the results of Buenviaje’s
appraisals. In her first appraisal covering a three-month period, Buenviaje received a
There is no question that performance of duties and responsibilities is a necessary standard for satisfactory rating.
qualifying for regular employment.  It was in her second appraisal covering a two-month period that led to her dismissal.
 There was no proof, however, that per PNOC-EDC’s standards, receiving an
 There must be a measure as to how poor, fair, satisfactory, or excellent the unsatisfactory rating of four (4) from a satisfactory rating of three (3) will result
performance has been. to failure to qualify for regularization.
 PNOCEDC, in fact, used an appraisal form when it evaluated the performance of  Neither would PNOC-EDC’s reason for dismissing Buenviaje qualify as a just cause-
Buenviaje twice. A copy of this appraisal form, unlike in Abbott, was not given to an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross
Buenviaje at any time prior to, during the time of her engagement, and the and habitual neglect of duties.
incipient stages of her employment.
 A comparison of the job description and the standards in the appraisal form reveals Disposition: Affirmed.
that they are distinct. The job description is just that, an enumeration of the
duties and responsibilities of Buenviaje.
 On the other hand, the appraisal form appraises the elements of performance,
which are categorized into results-based factors, individual effectiveness and
coworker effectiveness.
 Pertinently, the results-based factors, are rated according to expected outputs or key
result areas, performance standards, and actual accomplishments.
 PNOC-EDC knew the job description and the performance appraisal form are not one
and the same, having specifically used the latter when it evaluated Buenviaje and not
the job description attached to the appointment letter.

Thus, Buenviaje is a permanent employee, not a probationary employee. Hence, she was
illegally dimissed.

Alternatively: But even if we were to assume that she was, she would still be illegally dismissed
in light of PNOC-EDC’s violation of the provisions of the Labor Code in dismissing a
probationary employee.

LB:

A probationary employee also enjoys security of tenure, although it is not on the same
plane as that of a permanent employee.

 aside from just and authorized causes, a probationary employee may also be
dismissed due to failure to qualify in accordance with the standards of the employer
made known to him at the time of his engagement

AP:

PNOC-EDC dismissed Buenviaje on this latter ground; that is, Buenviaje allegedly failed to meet
the standards set by the company. In dismissing probationary employees on this ground, there is
no need for a notice and hearing.
 CLASSES OF EMPLOYEES (PROBATIONARY EMPLOYEES)
Umali v. Hobbywing Solutions Inc.
Digest Author: FABI
DOCTRINE: A probationary employee is defined as one who is on trial by an employer during
which the employer determines whether or not he is qualified for permanent employment.
Aside from just and authorized causes, a probationary employee may also be dismissed due to
failure to qualify in accordance with the standards of the employer made known to him at the
time of his engagement.
FACTS:
1. Petitioner started working for the respondent, an online casino gaming establishment,
as a Pitboss Supervisor.
2. Her main duties and responsibilities involve, among others, supervising online casino
dealers as well as the operations of the entire gaming area or studio of the respondent
company. She, however, never signed any employment contract before the
commencement of her service but regularly received her salary every month.
3. After seven (7) months since she started working for the respondent, the petitioner
was asked to sign two employment contracts. The first employment contract was for a
period of five (5) months. On the other hand, the second contract was for a period of
three (3) months. She signed both contracts as directed.
4. However, the petitioner was informed by the respondent that her employment has
already ended and was told to just wait for advice whether she will be rehired or
regularized.
5. She was also required to sign an exit clearance from the company apparently to clear
her from accountabilities. She was no longer allowed to work thereafter. Thus, the
filing of a complaint for illegal dismissal against the respondent.
ISSUES: W/N Umali had already attained the status of regular employment after she was
suffered to work for more than six months of probationary employment and was
terminated without just cause.
RULING+RATIO: YES.
LB: ART. 281. Probationary Employment. - Probationary employment shall not exceed six
(6) months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is allowed to
work after a probationary period shall be considered a regular employee.
In Dusit Hotel vs. Gatbonton, the Court held that a probationary employee engaged to
work beyond the probationary period of six months, as provided under Article 281 of the
Labor Code, or for any length of time set forth by the employer (in this case, three
months), shall be considered a regular employee.
AP: In this case, the petitioner commenced working fur the respondent on June 19, 2012 until
February 18, 2013. By that time, however, she has already become a regular employee, a status
which accorded her protection from arbitrary termination.
RULES IN EXTENDING PROBATIONARY EMPLOYMENT
CA RULING: The CA, however, believes that the probationary period of employment was validly
extended citing Mariwasa vs. Leogardo. In the said case, the Court upheld as valid the
extension of the probationary period for another three (3) months in order to give the
employee a chance to improve his performance and qualify for regular employment, upon
agreement of the parties. Upon conclusion of the period of extension, however, the employee
still failed to live up to the work standards of the company and was thereafter terminated.
AP: The mentioned case, however, finds no application in the instant case for two reasons:
1. there was no evaluation upon the expiration of the period of probationary
employment;
2. the supposed extension of the probationary period was made after the lapse of
the original period agreed by the parties.
Based on the evidence on record, the respondent only evaluated the performance of the
petitioner for the period of June 2012 to November 2013 on February 1, 2013, wherein she
garnered a rating of 88.3%, which translates to a satisfactory performance according to
company standards.
At the time of the evaluation, the original period of probationary employment had already
lapsed on November 18, 2012 and the petitioner was allowed to continuously render
service without being advised that she failed to qualify for regular employment.
Clearly then, there is no reason to justify the extension since the petitioner had a
commendable rating and, apart from this, there is no more period to be extended since
the probationary period had already lapsed.
LB: Buiser vs. Leogardo,the Court stated, thus:
Generally, the probationary period of employment is limited to six (6) months. The
exception to this general rule is when the parties to an employment contract may
agree otherwise, such as when the same is established by company policy or when
the same is required by the nature of work to be performed by the employee.
Since extension of the period is the exception, rather than the rule, the employer has the
burden of proof to show that the extension is warranted and not simply a stratagem to
preclude the worker's attainment of regular status. Without a valid ground, any extension of
the probationary period shall be taken against the employer especially since it thwarts the
attainment of a fundamental right, that is, security of tenure.
AP: Here, there was no valid extension of the probationary period since the same had
lapsed long before the company thought of extending the same. More significantly, there is
no justifiable reason for the extension since, on the basis of the Performance Evaluation
dated February 1, 2013, the petitioner had a commendable performance all throughout the
probationary period.
Having rendered service even after the lapse of the probationary period, the petitioner had
attained regular employment, with all the rights and privileges pertaining thereto. Clothed with
security of tenure, she may not be terminated from employment without just or
authorized cause and without the benefit of procedural due process. Since the petitioner's
case lacks both, she is entitled to reinstatement with payment of full backwages, as correctly
held by the NLRC.
DISPOSITION: CA decision reversed.
 CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Kimberly-Clark (Phils.), Inc. vs. Secretary of Labor
Digest Author: FABI
DOCTRINE: The law (thus) provides for two kinds of regular employees, namely: (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 year of service, whether
continuous or broken, with respect to the activity in which they are employed.
FACTS:
1. The CBA executed by and between Kimberly and United Kimberly-Clark Employees
Union (UKCEO-PTGWO) expired.
2. Within the freedom period, KILUSAN-OLALIA, a newly formed labor organization,
challenged the incumbency of UKCEO-PTGWO, by filing a petition for certification
election.
3. UKCEO-PTGWO won. KILUSAN filed a protest. The former was declared as the
exclusive bargaining representative of Kimberly Corp.
4. KILUSAN filed a petition for certiorari against the order of the Ministry of Labor.
5. During the pendency of G.R. No. 77629, Kimberly dismissed from service several
employees and refused to heed the workers grievances, impelling KILUSAN-OLALIA
to stage a strike
6. Kimberly, in this case, contends that the reckoning point in determining who among its
casual employees are entitled to regularization should be April 21, 1986, the date
KILUSAN-OLALIA filed a petition for certification election to challenge the incumbency
of UKCEO-PTGWO
7. Kimberly also argues that the employees who are not parties in G.R. No. 77629
should not be included in the implementation orders.
ISSUES: W/N the contentions of Kimberly-Clark Phils are correct.
RULING+RATIO: NO.
LB: The law (thus) provides for two kinds of regular employees, namely: (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 year of service, whether
continuous or broken, with respect to the activity in which they are employed.
AP: Considering that an employee becomes regular with respect to the activity in which he is
employed one year after he is employed, the reckoning date for determining his
regularization is his hiring date. Therefore, it is error for petitioner Kimberly to claim that it
is from April 21, 1986 that the one-year period should be counted. While it is a fact that the
issue of regularization came about only when KILUSAN-OLALIA filed a petition for certification
election, the concerned employees attained regular status by operation of law.
Further, the grant of the benefit of regularization should not be limited to the employees
who questioned their status before the labor tribunal/court and asserted their rights; it
should also extend to those similarly situated. There is, thus, no merit in petitioner's
contention that only those who presented their circumstances of employment to the courts are
entitled to regularization.
DISPOSITION: Petition for review Denied.
CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Rowell Industrial Corporation vs. Court of Appeals
Digest Author: FABI
DOCTRINE: The primary standard of determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the casual business or trade of the employer.
FACTS:
1. Rowell Industrial is engaged in manufacturing tin cans for use in packaging of consumer products,
e.g., foods, paints, among other things.
2. Taripe was employed by petitioner on November 8, 1999 as a “rectangular power press machine
operator”.
3. Taripe alleged that upon employment, he was made to sign a document, which was not explained
to him but which was made a condition for him to be taken in and for which he was not furnished a
copy.
ISSUES: W/N Respondent Taripe is a regular employee and thus illegally dismissed.
RULING+RATIO: YES.
LB: Under Art 280 regular employees are classified into:
(1) regular employees by nature of work - those employees who perform a particular activity which is
necessary or desirable in the usual business or trade of the employer, regardless of their length of service;
(2) regular employees by years of service - those employees who have been performing the job, regardless
of the nature thereof, for at least a year.
Article 280 of the Labor Code, as amended, however, does not proscribe or prohibit an employment
contract with a fixed period. There is nothing essentially contradictory between a definite period of
employment and the nature of the employee’s duties.
AP: In the case at bar, Taripe signed a contract of employment good only for a period of five months
unless the said contract is renewed by mutual consent. Along with other contractual employees, he was
hired only to meet the increase in demand for packaging materials for the Christmas season and to
build up stock levels for the early part of the year.
LB: Standards for valid fixed term employment:
1. the fixed period of employment was knowingly and voluntarily agreed upon by the parties,
without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent; or
2. it satisfactorily appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former on the latter.
AP: 1) The employment contract signed by respondent Taripe did not mention that he was hired only
for a specific undertaking, the completion of which had been determined at the time of his engagement. The
said employment contract neither mentioned that respondent Taripe’s services were seasonal in nature
and that his employment was only for the duration of the Christmas season as purposely claimed by
petitioner RIC. What was stipulated in the said contract was that Taripe’s employment was contractual for the
period of five months.
2) Also RIC failed to controvert the claim that Taripe was made to sign the contract of employment,
prepared by RIC, as a condition for his hiring. Such contract in which the terms are prepared by only one
party and the other party merely affixes his signature signifying his adhesion thereto is called contract of
adhesion. It is an agreement in which the parties bargaining are not on equal footing, the weaker party’s
participation being reduced to the alternative “to take it or leave it.” In the present case, respondent Taripe, in
need of a job, was compelled to agree to the contract, including the five-month period of employment,
just so he could be hired.
3) As a power press operator, a rank and file employee, he can hardly be on equal terms with petitioner RIC.
As the Court of Appeals said, “almost always, employees agree to any terms of an employment contract just to
get employed considering that it is difficult to find work given their ordinary qualifications.” He was a regular
employee, As a rectangular power press machine operator, a position which is necessary and
desirable in the usual business or trade of petitioner RIC, which was the manufacture of tin cans.
 CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Philippine Long Distance Telephone Company, Inc. vs. Arceo
Digest Author: FABI
DOCTRINE: Under the foregoing provision, a regular employee is (1) one who is either engaged to perform
activities that are necessary or desirable in the usual trade or business of the employer or (2) a casual
employee who has rendered at least one year of service, whether continuous or broken, with respect to the
activity in which he is employed.
FACTS:
1. ARCEO applied for the position of telephone operator with PLDT. She, however, failed the pre-
employment qualifying examination.
2. Having failed the test, ARCEO requested PLDT to allow her to work at the latter’s office even
without pay. PLDT agreed and assigned her to its commercial section where she was made
to perform various tasks like photocopying documents, sorting out telephone bills and notices
of disconnection, and other minor assignments and activities.
3. PLDT saw no further need for ARCEO's services and decided to fire her but, through the
intervention of PLDT’s commercial section supervisor, she was recommended for an on-the-job
training on minor traffic work. When she failed to assimilate traffic procedures, the company
transferred her to auxiliary services, a minor facility.
4. Subsequently, ARCEO took the pre-qualifying exams for the position of telephone operator
two more times but again failed in both attempts.
5. PLDT discharged ARCEO from employment. She then filed a case for illegal dismissal before
the labor arbiter which ruled in her favor. PLDT was ordered to reinstate ARCEO to her “former
position or to an equivalent position.”
6. ARCEO was reinstated as casual employee with a minimum wage of P106 per day. She was
assigned to photocopy documents and sort out telephone bills.
7. More than three years after her reinstatement , ARCEO filed a complaint for unfair labor practice,
underpayment of salary, underpayment of overtime pay, holiday pay, rest day pay and other
monetary claims.
8. She alleged in her complaint that, since her reinstatement, she had yet to be regularized and
had yet to receive the benefits due to a regular employee.
ISSUES: W/N Arceo eligible to become a regular employee of PLDT?
RULING+RATIO: YES.
LB: Under the foregoing provision, a regular employee is
(1) one who is either engaged to perform activities that are necessary or desirable in the usual trade or
business of the employer or
(2) a casual employee who has rendered at least one year of service, whether continuous or broken, with
respect to the activity in which he is employed.
AP: Under the first criterion, respondent is qualified to be a regular employee. Her work, consisting mainly of
photocopying documents, sorting out telephone bills and disconnection notices, was certainly “necessary or
desirable” to the business of PLDT. But even if the contrary were true, the uncontested fact is that she
rendered service for more than one year as a casual employee. Hence, under the second criterion, she is still
eligible to become a regular employee.
ISSUE ON ABOLISHMENT:
Petitioner’s argument that respondent’s position has been abolished, if indeed true, does not preclude Arceo’s
becoming a regular employee. The order to reinstate her also included the alternative to reinstate her to “a
position equivalent thereto.” Thus, PLDT can still “regularize” her in an equivalent position.
CLASSES OF EMPLOYEES (PROBATIONARY EMPLOYEES)
Abbott Laboratories v. Alcaraz 2013
Digest Author: FABI
DOCTRINE: If the employer fails to inform the probationary employee of the reasonable
standards upon which the regularization would be based on at the time of the engagement, then
the said employee shall be deemed a regular employee.
FACTS:
11. Abbott Laboratories, Philippines published in major broadsheet that it is in need of
Medical and Regulatory Affairs Manager stating therein the responsibilities and
qualifications of said position.
12. Abbott formally offered Alcaraz the abovementioned position which was an item
under the company’s Hospira Affiliate Local Surveillance Unit (ALSU) department.
13. Alcaraz signed an employment contract which stated, inter alia, that she was to
be placed on probation for a period of six (6) months beginning February 15, 2005
to August 14, 2005.
14. She underwent pre-employment orientation where she was briefed on her duties and
responsibilities.
15. Alcaraz received an e-mail from the HR Director explaining the procedure for
evaluating the performance of probationary employees and further indicated that
Abbott had only one evaluation system for all of its employees.
16. Alcaraz was also given copies of Abbott’s Code of Conduct and Probationary
Performance Standards and Evaluation and Performance Excellence Orientation
Modules which she had to apply in line with her task of evaluating the Hospira ALSU
staff.
17. Alcaraz received an e-mail from Misa requesting immediate action on the staff’s
performance evaluation as their probationary periods were about to end.
18. Alcaraz was called to a meeting with her immediate supervisor and the former
HR Director where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager.
19. Thereafter she was asked to tender her resignation, else they be forced to
terminate her services.
20. She filed a case of illegal dismissal against Abott and its officers.
DECISIONS:
4. Labor Arbiter dismissed her complaint for lack of merit.
5. NLRC reversed and set aside the LA’s ruling and ordered Abott to reinstate and pay
Alcaraz moral and exemplary damages.
6. CA affirmed NLRC decision.
ISSUES:
3. W/N Alcaraz was sufficiently informed of the reasonable standards to qualify her
as a regular employee.
4. W/N Alcaraz was validly terminated from her employment.

RULING+RATIO:
1.) YES, Alcaraz was sufficiently informed of the reasonable standards.
LB: The employer is made to comply with two (2) requirements when dealing with a
probationary employee:
• first, the employer must communicate the regularization standards to the
probationary employee; and
• second, the employer must make such communication at the time of the
probationary employee’s engagement.
If the employer fails to comply with either, the employee is deemed as a regular and not a
probationary employee.
AP: In this case, Abbott complied with the above-stated requirements.
• This conclusion is largely impelled by the fact that Abbott clearly conveyed to
Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to,
during the time of her engagement, and the incipient stages of her employment.
2.) YES, Alcaraz was validly terminated from her employment.
LB: A probationary employee, like a regular employee, enjoys security of tenure. However, in
cases of probationary employment, aside from just or authorized causes of termination, an
additional ground is provided under Article 295 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular employee in accordance
with the reasonable standards made known by the employer to the employee at the time of
the engagement.
A different procedure is applied when terminating a probationary employee; the usual two-notice
rule does not govern.
Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that "if the
termination is brought about by the failure of an employee to meet the standards of the
employer in case of probationary employment, it shall be sufficient that a written notice is
served the employee, within a reasonable time from the effective date of termination."
AP: As the records show, Alcaraz's dismissal was effected through a letter dated May 19, 2005
which she received on May 23, 2005 and again on May 27, 2005.
• Stated therein were the reasons for her termination, i.e., that after proper
evaluation, Abbott determined that she failed to meet the reasonable standards
for her regularization considering her lack of time and people management and
decision-making skills, which are necessary in the performance of her functions
as Regulatory Affairs Manager.
• This written notice sufficiently meets the criteria set forth above, thereby
legitimizing the cause and manner of Alcaraz’s dismissal as a probationary
employee under the parameters set by the Labor Code.
DISPOSITION: Petition Granted
CLASSES OF EMPLOYEES (PROBATIONARY EMPLOYEES)
Abbott Laboratories v. Alcaraz 2014
Digest Author: FABI
DOCTRINE: Probationary Employees; Termination of Employment; As the Supreme Court
observed, an employee’s failure to perform the duties and responsibilities which have been
clearly made known to him constitutes a justifiable basis for a probationary employee’s non-
regularization.
If the probationary employee had been fully apprised by his employer of these duties and
responsibilities, then basic knowledge and common sense dictate that he must adequately
perform the same, else he fails to pass the probationary trial and may therefore be subject to
termination.
Standards for regularization; conceptual under pinnings.
Respondent’s contention: Alcaraz posits that, contrary to the Court’s Decision, one’s job
description cannot by and of itself be treated as a standard for regularization as a standard
denotes a measure of quantity or quality. (ISSUE)
RULING:
(1) D: it is not the probationary employee’s job description but the adequate performance of his
duties and responsibilities which constitutes the inherent and implied standard for regularization
(2) If the probationary employee had been fully apprised by his employer of these duties and
responsibilities, then basic knowledge and common sense dictate that he must adequately
perform the same, else he fails to pass the probationary trial and may therefore be subject to
termination.
AP: The determination of “adequate performance” is not, in all cases, measurable by
quantitative specification, such as that of a sales quota in Alcaraz’s example. It is also hinged
on the qualitative assessment of the employee’s work; by its nature, this largely rests on the
reasonable exercise of the employer’s management prerogative.
The employer cannot bear out in exacting detail at the beginning of the engagement what
he deems as “quality work” especially since the probationary employee has yet to submit
the required output.
The same logic applies to a probationary managerial employee who is tasked to supervise a
particular department, as Alcaraz in this case.
It is hardly possible for the employer, at the time of the employee’s engagement, to map into
technical indicators, or convey in precise detail the quality standards by which the latter should
effectively manage the department.
Factors which gauge the ability of the managerial employee to either deal with his
subordinates (e.g., how to spur their performance, or command respect and obedience from
them), or to organize office policies, are hardly conveyable at the outset of the engagement
since the employee has yet to be immersed into the work itself.
Aliling v. Feliciano not applicable
Respondent’s contention: By way of example, Alcaraz cites the case of a probationary
salesperson and asks how does such employee achieve regular status if he does not know how
much he needs to sell to reach the same.
LB: The employee in Aliling, a sales executive, was belatedly informed of his quota requirement.
Thus, considering the nature of his position, the fact that he was not informed of his sales quota
at the time of his engagement changed the complexion of his employment.
AP: Contrarily, the nature of Alcaraz’s duties and responsibilities as Regulatory Affairs Manager
negates the application of the foregoing.
Records show that Alcaraz was terminated because she
(a) did not manage her time effectively;
(b) failed to gain the trust of her staff and to build an effective rapport with them;
(c) failed to train her staff effectively; and
(d) was not able to obtain the knowledge and ability to make sound judgments
on case processing and article review which were necessary for the proper
performance of her duties.
Due to the nature and variety of these managerial functions, the best that Abbott could have
done, at the time of Alcaraz’s engagement, was to inform her of her duties and responsibilities,
the adequate performance of which, to repeat, is an inherent and implied standard for
regularization; this is unlike the circumstance in Aliling where a quantitative regularization
standard, in the term of a sales quota, was readily articulable to the employee at the
outset.
CONCLUSION: Hence, since the reasonableness of Alcaraz’s assessment clearly appears from
the records, her termination was justified.
DISPOSITION: MR denied, decision is affirmed.
CLASSES OF EMPLOYEES (PROBATIONARY EMPLOYEES)
Umali v. Hobbywing Solutions Inc.
Digest Author: FABI
DOCTRINE: A probationary employee is defined as one who is on trial by an employer during
which the employer determines whether or not he is qualified for permanent employment.
Aside from just and authorized causes, a probationary employee may also be dismissed due to
failure to qualify in accordance with the standards of the employer made known to him at the
time of his engagement.
FACTS:
6. Petitioner started working for the respondent, an online casino gaming establishment,
as a Pitboss Supervisor.
7. Her main duties and responsibilities involve, among others, supervising online casino
dealers as well as the operations of the entire gaming area or studio of the respondent
company. She, however, never signed any employment contract before the
commencement of her service but regularly received her salary every month.
8. After seven (7) months since she started working for the respondent, the petitioner
was asked to sign two employment contracts. The first employment contract was for a
period of five (5) months. On the other hand, the second contract was for a period of
three (3) months. She signed both contracts as directed.
9. However, the petitioner was informed by the respondent that her employment has
already ended and was told to just wait for advice whether she will be rehired or
regularized.
10. She was also required to sign an exit clearance from the company apparently to clear
her from accountabilities. She was no longer allowed to work thereafter. Thus, the
filing of a complaint for illegal dismissal against the respondent.
ISSUES: W/N Umali had already attained the status of regular employment after she was
suffered to work for more than six months of probationary employment and was
terminated without just cause.
RULING+RATIO: YES.
LB: ART. 281. Probationary Employment. - Probationary employment shall not exceed six
(6) months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is allowed to
work after a probationary period shall be considered a regular employee.
In Dusit Hotel vs. Gatbonton, the Court held that a probationary employee engaged to
work beyond the probationary period of six months, as provided under Article 281 of the
Labor Code, or for any length of time set forth by the employer (in this case, three
months), shall be considered a regular employee.
AP: In this case, the petitioner commenced working fur the respondent on June 19, 2012 until
February 18, 2013. By that time, however, she has already become a regular employee, a status
which accorded her protection from arbitrary termination.
RULES IN EXTENDING PROBATIONARY EMPLOYMENT
CA RULING: The CA, however, believes that the probationary period of employment was validly
extended citing Mariwasa vs. Leogardo. In the said case, the Court upheld as valid the
extension of the probationary period for another three (3) months in order to give the
employee a chance to improve his performance and qualify for regular employment, upon
agreement of the parties. Upon conclusion of the period of extension, however, the employee
still failed to live up to the work standards of the company and was thereafter terminated.
AP: The mentioned case, however, finds no application in the instant case for two reasons:
3. there was no evaluation upon the expiration of the period of probationary
employment;
4. the supposed extension of the probationary period was made after the lapse of
the original period agreed by the parties.
Based on the evidence on record, the respondent only evaluated the performance of the
petitioner for the period of June 2012 to November 2013 on February 1, 2013, wherein she
garnered a rating of 88.3%, which translates to a satisfactory performance according to
company standards.
At the time of the evaluation, the original period of probationary employment had already
lapsed on November 18, 2012 and the petitioner was allowed to continuously render
service without being advised that she failed to qualify for regular employment.
Clearly then, there is no reason to justify the extension since the petitioner had a
commendable rating and, apart from this, there is no more period to be extended since
the probationary period had already lapsed.
LB: Buiser vs. Leogardo,the Court stated, thus:
Generally, the probationary period of employment is limited to six (6) months. The
exception to this general rule is when the parties to an employment contract may
agree otherwise, such as when the same is established by company policy or when
the same is required by the nature of work to be performed by the employee.
Since extension of the period is the exception, rather than the rule, the employer has the
burden of proof to show that the extension is warranted and not simply a stratagem to
preclude the worker's attainment of regular status. Without a valid ground, any extension of
the probationary period shall be taken against the employer especially since it thwarts the
attainment of a fundamental right, that is, security of tenure.
AP: Here, there was no valid extension of the probationary period since the same had
lapsed long before the company thought of extending the same. More significantly, there is
no justifiable reason for the extension since, on the basis of the Performance Evaluation
dated February 1, 2013, the petitioner had a commendable performance all throughout the
probationary period.
Having rendered service even after the lapse of the probationary period, the petitioner had
attained regular employment, with all the rights and privileges pertaining thereto. Clothed with
security of tenure, she may not be terminated from employment without just or
authorized cause and without the benefit of procedural due process. Since the petitioner's
case lacks both, she is entitled to reinstatement with payment of full backwages, as correctly
held by the NLRC.
DISPOSITION: CA decision reversed.
CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Kimberly-Clark (Phils.), Inc. vs. Secretary of Labor
Digest Author: FABI
DOCTRINE: The law (thus) provides for two kinds of regular employees, namely: (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 year of service, whether
continuous or broken, with respect to the activity in which they are employed.
FACTS:
8. The CBA executed by and between Kimberly and United Kimberly-Clark Employees
Union (UKCEO-PTGWO) expired.
9. Within the freedom period, KILUSAN-OLALIA, a newly formed labor organization,
challenged the incumbency of UKCEO-PTGWO, by filing a petition for certification
election.
10. UKCEO-PTGWO won. KILUSAN filed a protest. The former was declared as the
exclusive bargaining representative of Kimberly Corp.
11. KILUSAN filed a petition for certiorari against the order of the Ministry of Labor.
12. During the pendency of G.R. No. 77629, Kimberly dismissed from service several
employees and refused to heed the workers grievances, impelling KILUSAN-OLALIA
to stage a strike
13. Kimberly, in this case, contends that the reckoning point in determining who among its
casual employees are entitled to regularization should be April 21, 1986, the date
KILUSAN-OLALIA filed a petition for certification election to challenge the incumbency
of UKCEO-PTGWO
14. Kimberly also argues that the employees who are not parties in G.R. No. 77629
should not be included in the implementation orders.
ISSUES: W/N the contentions of Kimberly-Clark Phils are correct.
RULING+RATIO: NO.
LB: The law (thus) provides for two kinds of regular employees, namely: (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 year of service, whether
continuous or broken, with respect to the activity in which they are employed.
AP: Considering that an employee becomes regular with respect to the activity in which he is
employed one year after he is employed, the reckoning date for determining his
regularization is his hiring date. Therefore, it is error for petitioner Kimberly to claim that it
is from April 21, 1986 that the one-year period should be counted. While it is a fact that the
issue of regularization came about only when KILUSAN-OLALIA filed a petition for certification
election, the concerned employees attained regular status by operation of law.
Further, the grant of the benefit of regularization should not be limited to the employees
who questioned their status before the labor tribunal/court and asserted their rights; it
should also extend to those similarly situated. There is, thus, no merit in petitioner's
contention that only those who presented their circumstances of employment to the courts are
entitled to regularization.
DISPOSITION: Petition for review Denied.
 CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Rowell Industrial Corporation vs. Court of Appeals
Digest Author: FABI
DOCTRINE: The primary standard of determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the casual business or trade of the employer.
FACTS:
4. Rowell Industrial is engaged in manufacturing tin cans for use in packaging of consumer products,
e.g., foods, paints, among other things.
5. Taripe was employed by petitioner on November 8, 1999 as a “rectangular power press machine
operator”.
6. Taripe alleged that upon employment, he was made to sign a document, which was not explained
to him but which was made a condition for him to be taken in and for which he was not furnished a
copy.
ISSUES: W/N Respondent Taripe is a regular employee and thus illegally dismissed.
RULING+RATIO: YES.
LB: Under Art 280 regular employees are classified into:
(1) regular employees by nature of work - those employees who perform a particular activity which is
necessary or desirable in the usual business or trade of the employer, regardless of their length of service;
(2) regular employees by years of service - those employees who have been performing the job, regardless
of the nature thereof, for at least a year.
Article 280 of the Labor Code, as amended, however, does not proscribe or prohibit an employment
contract with a fixed period. There is nothing essentially contradictory between a definite period of
employment and the nature of the employee’s duties.
AP: In the case at bar, Taripe signed a contract of employment good only for a period of five months
unless the said contract is renewed by mutual consent. Along with other contractual employees, he was
hired only to meet the increase in demand for packaging materials for the Christmas season and to
build up stock levels for the early part of the year.
LB: Standards for valid fixed term employment:
3. 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
4. it satisfactorily appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former on the latter.
AP: 1) The employment contract signed by respondent Taripe did not mention that he was hired only
for a specific undertaking, the completion of which had been determined at the time of his engagement. The
said employment contract neither mentioned that respondent Taripe’s services were seasonal in nature
and that his employment was only for the duration of the Christmas season as purposely claimed by
petitioner RIC. What was stipulated in the said contract was that Taripe’s employment was contractual for the
period of five months.
2) Also RIC failed to controvert the claim that Taripe was made to sign the contract of employment,
prepared by RIC, as a condition for his hiring. Such contract in which the terms are prepared by only one
party and the other party merely affixes his signature signifying his adhesion thereto is called contract of
adhesion. It is an agreement in which the parties bargaining are not on equal footing, the weaker party’s
participation being reduced to the alternative “to take it or leave it.” In the present case, respondent Taripe, in
need of a job, was compelled to agree to the contract, including the five-month period of employment,
just so he could be hired.
3) As a power press operator, a rank and file employee, he can hardly be on equal terms with petitioner RIC.
As the Court of Appeals said, “almost always, employees agree to any terms of an employment contract just to
get employed considering that it is difficult to find work given their ordinary qualifications.” He was a regular
employee, As a rectangular power press machine operator, a position which is necessary and
desirable in the usual business or trade of petitioner RIC, which was the manufacture of tin cans.
CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
ABS-CBN Broadcasting Corporation vs. Nazareno
Digest Author: FABI
DOCTRINE: There are two kinds of regular employees under the law—
(1) those engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer, and,
(2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed.
FACTS:
1. Petitioner ABS-CBN is engaged in the broadcasting business and owns a network of television
and radio stations.
2. Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production
assistants (PAs) on different dates.
3. They were assigned at the news and public affairs, for various radio programs in the Cebu
Broadcasting Station.
4. Petitioner and the ABS-CBN Rank-and-File Employees executed a CBA, however, since petitioner
refused to recognize PAs as part of the bargaining unit, respondents were not included to the
CBA.
5. Respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of
Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month
Pay with Damages against the petitioner before the NLRC.
ISSUE: W/N respondents are regular employees of ABS-CBN and not project employees.
RULING+RATIO: YES.
LB: There are two kinds of regular employees under the law—
(1) those engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer, and,
(2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed.
APP: In this case, it is undisputed that respondents had continuously performed the same activities for an
average of five years.
● Their assigned tasks are necessary or desirable in the usual business or trade of the petitioner.
● The persisting need for their services is sufficient evidence of the necessity and indispensability of
such services to petitioner’s business or trade. While length of time may not be a sole controlling
test for project employment, it can be a strong factor to determine whether the employee was hired
for a specific undertaking or in fact tasked to perform functions which are vital, necessary and
indispensable to the usual trade or business of the employer.
RESPONDENTS ARE NOT PROJECT EMPLOYEES
● Additionally, respondents cannot be considered as project or program employees because no
evidence was presented to show that the duration and scope of the project were determined or
specified at the time of their engagement.
● Petitioner did not report the termination of respondents’ employment in the particular “project” to
the Department of Labor and Employment Regional Office having jurisdiction over the workplace
within 30 days following the date of their separation from work, using the prescribed form on
employees’ termination/dismissals/suspensions.
● As gleaned from the records of this case, petitioner itself is not certain how to categorize
respondents. In its earlier pleadings, petitioner classified respondents as program employees, and
in later pleadings, independent contractors. Program employees, or project employees, are
different from independent contractors because in the case of the latter, no employer-employee
relationship exists.
 CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Fulache v. ABS-CBN
Digest Author:
DOCTRINE: Petitioners, as regular rank-and-file employees fall within Collective Bargaining Agreement (CBA)
coverage under the CBA’s express terms and are entitled to its benefits.
FACTS:
The Regularization Case
● Petitioners were drivers/cameramen, editors, PA/ Teleprompter Operator- editing and VTR man.
● They filed complaints for regularization, ULP and several money claims against respondent.
● They alleged that respondent executed a CBA, which they only became aware of when they
obtained copies of it. They learned that they had been excluded from its coverage as ABS-CBN
considered them as temporary and not regular employees.
Respondent’s contention:
- Respondent claimed that to cope with the fluctuating business conditions, it contracts the services
of persons who possess the necessary talent, skills, training ,expertise to meet the requirements of
it programs.
- These contracted persons are called “talents” and are considered independent contractors and are
paid a pre-arranged consideration called “talent fee”
LA held that petitioners were regular employees of ABS-CBN, not independent contractors, and are entitled to
the benefits of regular employees.
ISSUE: W/N petitioners are correct that they should be considered already as regular employees
RULING+RATIO: YES.
As regular employees, the petitioners fall within the coverage of the bargaining unit and are therefore entitled to CBA
benefits as a matter of law and contract. In the root decision (the labor arbiter’s decision of January 17, 2002) that the
NLRC and CA affirmed, the labor arbiter declared:
“WHEREFORE, IN THE LIGHT OF THE FOREGOING, taking into account the factual scenario and the evidence
adduced by both parties, it is declared that complainants in these cases are REGULAR EMPLOYEES of
respondent ABS-CBN and not INDE PENDENT CONTRACTORS and thus henceforth they are entitled to the
benefits and privileges attached to regular status of their employment.”
This declaration unequivocally settled the petitioners’ employment status: they are ABS-CBN’s regular employees
entitled to the benefits and privileges of regular employees. These benefits and privileges arise from entitlements under
the law (specifically, the Labor Code and its related laws), and from their employment contract as regular ABS-CBN
employees, part of which is the CBA if they fall within the coverage of this agreement. Thus, what only needs to be
resolved as an issue for purposes of implementation of the decision is whether the petitioners fall within CBA coverage.
The parties’ 1999-2002 CBA provided in its Article I (Scope of the Agreement) that:
“Section 1. APPROPRIATE BARGAINING UNIT.—The parties agree that the appropriate bargaining unit shall
be regular rank-and-file employees of ABS-CBN BROADCASTING CORPORATION but shall not include:
a) Personnel classified as Supervisor and Confidential employees;
b) Personnel who are on “casual” or “probationary” status as defined in Section 2 hereof;
c) Personnel who are on “contract” status or who are paid for specified units of work such as
writer-producers, talent-artists, and singers.
The inclusion or exclusion of new job classifications into the bargaining unit shall be subject of discussion
between the COMPANY and the UNION.”
Under these terms, the petitioners are members of the appropriate bargaining unit because they are regular rank-
and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows
that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most
importantly, the labor arbiter’s decision of January 17, 2002—affirmed all the way up to the CA level—ruled against
ABS-CBN’s submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall
within CBA coverage under the CBA’s express terms and are entitled to its benefits.
CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Fuji Television Network, Inc. vs. Espiritu
Digest Author:
DOCTRINE: Employees under fixed-term contracts cannot be independent contractors because in fixed-term
contracts, an employeremployee relationship exists.
FACTS:
(1) Espiritu was engaged by Fuji as a news correspondent/producer tasked to report Philippine news
to Fuji through its Manila Bureau field office. The employment contract was initially for one year,
but was successively renewed on a yearly basis with salary adjustments upon every renewal.
(2) Arlene was diagnosed with lung cancer. She informed Fuji about her condition, and the Chief of
News Agency of Fuji, Aoki, informed the former that the company had a problem with renewing her
contract considering her condition. Arlene insisted she was still fit to work as certified by her
attending physician.
(3) After a series of verbal and written communications, Arlene and Fuji signed a non-renewal
contract. In consideration thereof, Arlene acknowledged the receipt of the total amount of her
salary from March-May 2009, year-end bonus, mid-year bonus and separation pay. However,
Arlene executed the non-renewal contract under protest.
(4) Arlene filed a complaint for illegal dismissal, alleging that she was forced to sign the non-renewal
contract after Fuji came to know of her illness. She also alleged that Fuji withheld her salaries and
other benefits when she refused to sign, and that she was left with no other recourse but to sign
the non-renewal contract to get her salaries.
ISSUE: W/N Espiritu is a regular employee and not an independent contractor.
RULING+RATIO: YES, Espiritu is a regular employee. Fuji’s argument that Arlene was an independent
contractor under a fixed-term contract is contradictory.
Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an
employer-employee relationship exists.
The test in this kind of contract is not the necessity and desirability of the employee’s activities, “but the day
certain agreed upon by the parties for the commencement and termination of the employment relationship.”
For regular employees, the necessity and desirability of their work in the usual course of the employer’s
business are the determining factors. On the other hand, independent contractors do not have employer-
employee relationships with their principals.
To determine the status of employment, the existence of employer-employee relationship must first be settled
with the use of the four-fold test, especially the qualifications for the power to control.
The distinction is in this guise:
Rules that merely serve as guidelines towards the achievement of a mutually desired result without dictating
the means or methods to be employed creates no employer-employee relationship; whereas those that control
or fix the methodology and bind or restrict the party hired to the use of such means creates the relationship.
APP:
● In this case, Arlene was hired by Fuji as a news producer, but there was no evidence that she was
hired for her unique skills that would distinguish her from ordinary employees.
● Her monthly salary appeared to be a substantial sum.
● Fuji had the power to dismiss Arlene, as provided for in her employment contract.
● The contract also indicated that Fuji had control over her work as she was required to report for 8
hours from Monday to Friday. (Unlike in SONZA case where Sonza was not required.)
● Fuji gave her instructions on what to report and even her mode of transportation in carrying out her
functions was controlled.
Therefore, as all the elements of four fold test are present, Arlene could not be an independent contractor.
 CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Pier 8 Arrastre & Stevedoring Services, Inc. vs. Boclot
DOCTRINE: The primary standard of determining a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of the
employer—the test is whether the former is usually necessary or desirable in the usual business or trade of
the employer.
FACTS:
1. PASSI has been rendering arrastre and stevedoring services and employs stevedores who assist
in the loading and unloading of cargoes to and from the vessels. Petitioner Cruz is its Vice-
President and General Manager. Respondent Jeff B. Boclot was hired by PASSI to perform the
functions of a stevedore. Philippine Ports Authority (PPA) seized the facilities and took over the
operations of PASSI through its Special Takeover Unit, absorbing PASSI workers as well as their
relievers.
2. Respondent filed a Complaint with the LA, claiming regularizatioN. Respondent alleged that he
was hired by PASSI in October 1999 and was issued company ID No. 304,8 a PPA Pass and SSS
documents. In fact, respondent contended that he became a regular employee by April 2000, since
it was his sixth continuous month in service in PASSI’s regular course of business.
3. According to respondent, he remained a casual employee from the time he was first hired to
perform the services of a stevedore. Thus, respondent claimed he was denied the rights and
privileges of a regular employee, including those granted under the Collective Bargaining
Agreement (CBA).
4. Petitioners alleged that respondent was hired as a mere “reliever” stevedore and could thus not
become a regular employee.
ISSUE: W/N respondent has attained regular status as PASSI’s employee.
RULING+RATIO: YES, respondent is a regular employee NOT BECAUSE OF LAW BUT BECAUSE OF
CBA
LB: CBA PROVISION: “The Company agrees to convert to regular status all incumbent probationary or casual
employees and workers in the Company who have served the Company for an accumulated service term of
employment of not less than six (6) months from his original date of hiring.”
AP: Respondent assents that he is not a member of the union, as he was not recognized by PASSI as its
regular employee, but this Court notes that PASSI adopts a union-shop agreement
• Under a union-shop agreement, although nonmembers may be hired, an employee is required to
become a union member after a certain period, in order to retain employment. This requirement
applies to present and future employees.
LB: The connection can be determined by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for
at least one year, even if the performance is not continuous or merely intermittent, the law deems 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.
AP: PASSI is engaged in providing stevedoring and arrastre services in the port area in Manila.
No doubt, serving as a stevedore, respondent performs tasks necessary or desirable to the usual business of
petitioners. However, it should be deemed part of the nature of his work that he can only work as a stevedore
in the absence of the employee regularly employed for the very same function.
The situation of respondent is akin to that of a Seasonal or project or term employee, albeit on a daily basis.
LB: Casual employee can be considered as regular employee if said casual employee has rendered at
least one year of service regardless of the fact that such service may be continuous or broken.
AP: Respondent, who has performed actual stevedoring services for petitioners only for an accumulated
period of 228.5 days does not fall under the classification of a casual turned regular employee after
rendering at least one year of service, whether continuous or intermittent.
CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
The Peninsula Manila vs. Alipio
DOCTRINE: —An employment is deemed regular when the activities performed by the employee are usually
necessary or desirable in the usual business of the employer. However, any employee who has rendered at
least one year of service, even though intermittent, is deemed regular with respect to the activity performed
and while such activity actually exists.
FACTS:
1. Respondent Alipio was hired merely as a reliever nurse by TPM. However, she had been
performing the usual tasks and functions of a regular nurse since the start of her employment,
Hence, after about four years of employment in the hotel, she inquired why she was not receiving
her 13th month pay.
2. After she had submitted the said summary, Alipio was paid P8,000 as her 13th month pay for
1997. Alipio likewise requested for the payment of her 13th month pay for 1993 to 1996, but her
request was denied.
3. When Alipio met with Santos, Alipio was asked regarding her payslip vouchers. She told Santos
that she made copies of her payslip vouchers because Peninsula does not give her copies of the
same.
4. Santos was peeved with Alipio’s response because the latter was allegedly not entitled to get
copies of her payslip vouchers. Santos likewise directed Alipio not to report for work anymore.
5. Aggrieved, Alipio filed a complaint for illegal dismissal against the petitioners.
ISSUE: W/N respondent is a Regular Employee of TPM.
RULING+RATIO: YES.
LB: An employment is deemed regular when the activities performed by the employee are usually necessary
or desirable in the usual business of the employer. However, any employee who has rendered at least one
year of service, even though intermittent, is deemed regular with respect to the activity performed and while
such activity actually exists.
AP: In this case, records show that Alipio’s services were engaged by the hotel intermittently from 1993 up to
1998. Her services as a reliever nurse were undoubtedly necessary and desirable in the hotel’s business of
providing comfortable accommodation to its guests. In any case, since she had rendered more than one year
of intermittent service as a reliever nurse at the hotel, she had become a regular employee as early as
December 12, 1994. Lastly, per the hotel’s own Certification dated April 22, 1997, she was already a “regular
staff nurse” until her dismissal.
MISCONDUCT
LB: Misconduct as any forbidden act or dereliction of duty. It is willful in character and implies a wrongful
intent, not a mere error in judgment. The misconduct, to be serious, must be grave and not merely trivial.
AP: In this case, Alipio’s act of obtaining copies of her payslips cannot be characterized as a misconduct,
much less a grave misconduct. On the contrary, we find it absurd that she had to resort to her own
resourcefulness to get hold of these documents since it was incumbent upon Peninsula, as her employer, to
give her copies of her payslips as a matter of course. We are thus convinced that Alipio’s dismissal was not
based on a just cause.
DISPOSITION: PETITION DENIED
 CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Samonte vs. La Salle Greenhills, Inc.
DOCTRINE: A fixed-term contract is an employment contract, the repeated renewals of which make for a
regular employment.
FACTS:
1. Petitioners are medical professional hired by LSGI under a uniform one-page Contract of Retainer.
The contract specifically provides that the retainer is only temporary in character and exclusively
limited to the undertaking and/or to the job/task assigned to the retainer within the said
undertaking. Furthermore, at any time prior to the expiration or completion date/s, LSGI may upon
written notice to the retainers, terminate the contract should the retainer fail in anyway to perform
his assigned job or task to the satisfaction of the school of for any just cause.
2. Accordingly, after 15 consecutive years of renewal each academic year, the school (LSGI)
informed the petitioner that their contracts will no longer be renewed for the following school year.
3. When petitioners’ requests for payment of their separation pay were denied, they filed a complaint
for illegal dismissal with prayer for separation pay, damages and attorneys’ fees. They alleged that
they were regular employees because received regular benefits, bonuses & more, that they were
subjected to the school’s administrative and disciplinary rules and regulations.
4. On the other hand, LSGI posited that petitioners were independent contractors retained by LSGI
by reason of their medical skills and expertise to provide ancillary medical and dental services to
both students and faculty. More importantly, petitioners were paid retainer fees and not regular
salaries and whose performance is not subject to the control of the school.
ISSUE: W/N petitioners were regular employees who may only be dismissed for just and authorized
causes.
RULING+RATIO: YES.
LB: Brent School, Inc. v. Zamora, a fixed-term employment is allowable under the Labor Code only if the term
was voluntarily and knowingly entered into by the parties who must have dealt with each other on equal terms
not one exercising moral dominance over the other.
A fixed-term contract is an employment contract, the repeated renewals of which make for a regular
employment.
AP: The uniform one-page Contracts of Retainer signed by petitioners were prepared by LSGI alone.
Petitioners, medical professionals as they were, were still not on equal footing with LSGI as they obviously did
not want to lose their jobs that they had stayed in for fifteen (15) years. There is no specificity in the contracts
regarding terms and conditions of employment that would indicate that petitioners and LSGI were on equal
footing in negotiating it.
In all, given the following:
1. repeated renewal of petitioners’ contract for fifteen years, interrupted only by the close of the
school year;
2. the necessity of the work performed by petitioners as school physicians and dentists; and
3. the existence of LSGI’s power of control over the means and method pursued by petitioners
in the performance of their job,
CONCLUSION: The Court ruled that petitioners attained regular employment, entitled to security of tenure
who could only be dismissed for just and authorized causes. Consequently, petitioners were illegally
dismissed and are entitled to the twin remedies of payment of separation pay and full backwages.
DISPOSITION: PETITION GRANTED
CLASSES OF EMPLOYEES (REGULAR AND CASUAL EMPLOYEES)
Basan vs. Coca-Cola Bottlers Philippines
DOCTRINE: It must be noted that the same has already been resolved in Magsalin v. National Organization of Working Men,
403 SCRA 199 (2003), wherein this Court has categorically declared that the nature of work of route helpers hired by Coca-Cola
Bottlers Philippines, Inc. is necessary and desirable in its usual business or trade thereby qualifying them as regular employees.
FACTS:
1. Petitioners filed a complaint for illegal dismissal with money claims against respondent Coca-Cola
Bottlers Philippines, alleging that respondent dismissed them without just cause and prior written
notice required by law.
2. Respondent corporation, however, countered that it hired petitioners as temporary route helpers to
act as substitutes for its absent regular route helpers merely for a fixed period in anticipation of the
high volume of work in its plants or sales offices.
3. As such, petitioners’ claims have no basis for they knew that their assignment as route helpers
was temporary in duration.
ISSUE: W/N petitioners, as route helpers, are regular employees who may only be dismissed for just
and authorized causes.
RULING+RATIO: YES.
LB: The repeated rehiring of respondent workers and the continuing need for their services clearly attest to
the necessity or desirability of their services in the regular conduct of the business or trade of petitioner
company
in Magsalin v. National Organization of Working Men, wherein this Court declared that the nature of work
of route helpers hired by Coca-Cola Bottlers Philippines, Inc. is necessary and desirable in its usual
business or trade thereby qualifying them as regular employees.
AP: Here, respondent, in its position paper, expressly admitted that petitioners were employed as route
helpers in anticipation of the high volume of work in its plants and sales offices. As such, respondent’s
contention that petitioners could not have attained regular employment status for they merely
rendered services for periods of less than a year cannot be sustained in view of the Magsalin doctrine
previously cited.
LB: Regular Employees are classified into:
(1) regular employees by nature of work; and
(2) regular employees by years of service.
AP: Petitioners, in this case, fall under the first kind of regular employee above. As route helpers who are
engaged in the service of loading and unloading softdrink products of respondent company to its various
delivery points, which is necessary or desirable in its usual business or trade, petitioners are considered as
regular employees.
That they merely rendered services for periods of less than a year is of no moment since for as long as they
were performing activities necessary to the business of respondent, they are deemed as regular employees
under the Labor Code, irrespective of the length of their service.
LB: in Brent, laid down the following criteria to prevent the circumvention of the employee’s 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.
AP: The records of this case are bereft of any proof which will show that petitioners freely entered into
agreements with respondent to perform services for a specified length of time. In fact, there is nothing in the
records to show that there was any agreement at all, the contracts of employment not having been presented.