Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 114337 September 29, 1995

NITTO ENTERPRISES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.

KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision 1 rendered by public respondent National Labor Relations Commission, which reversed the
decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired
Roberto Capili sometime in May 1990 as an apprentice machinist, molder and core maker as
evidenced by an apprenticeship agreement 2 for a period of six (6) months from May 28, 1990 to
November 28, 1990 with a daily wage rate of P66.75 which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he
was working on, accidentally hit and injured the leg of an office secretary who was treated at a
nearby hospital.
Later that same day, after office hours, private respondent entered a workshop within the office
premises which was not his work station. There, he operated one of the power press machines
without authority and in the process injured his left thumb. Petitioner spent the amount of P1,023.04
to cover the medication of private respondent.
The following day, Roberto Capili was asked to resign in a letter 3 which reads:
August
2, 1990
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang

paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng

kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya
ay pumasok sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at
kinalikot ang makina at nadisgrasya niya ang kanyang sariling kamay.
Nakagastos ang kompanya ng mga sumusunod:
Emergency and doctor fee P715.00
Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang
matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng
Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang
kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon,
kasama ng kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.

Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking

pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.) Roberto
Capili
Roberto Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for
and in consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration
Branch, National Capital Region a complaint for illegal dismissal and payment of other monetary
benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit. The dispositive portion of the
ruling reads:
WHEREFORE, premises considered, the termination is valid and for cause, and the
money claims dismissed for lack of merit.

The respondent however is ordered to pay the complainant the amount of P500.00
as financial assistance.
SO ORDERED. 5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian
was valid. First, private respondent who was hired as an apprentice violated the terms of their
agreement when he acted with gross negligence resulting in the injury not only to himself but also to
his fellow worker. Second, private respondent had shown that "he does not have the proper attitude
in employment particularly the handling of machines without authority and proper training. 6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision
of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby
directed to reinstate complainant to his work last performed with backwages
computed from the time his wages were withheld up to the time he is actually
reinstated. The Arbiter of origin is hereby directed to further hear complainant's
money claims and to dispose them on the basis of law and evidence obtaining.
SO ORDERED. 7
The NLRC declared that private respondent was a regular employee of petitioner by
ruling thus:

As correctly pointed out by the complainant, we cannot understand how an

apprenticeship agreement filed with the Department of Labor only on June 7, 1990
could be validly used by the Labor Arbiter as basis to conclude that the complainant
was hired by respondent as a plain "apprentice" on May 28, 1990. Clearly, therefore,
the complainant was respondent's regular employee under Article 280 of the Labor
Code, as early as May 28,1990, who thus enjoyed the security of tenure guaranteed
in Section 3, Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among others) it then behooves upon
respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al.
(G.R. No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of
complainant was for a valid cause. Absent such proof, we cannot but rule that the
complainant was illegally dismissed. 8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private
respondent's representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of
the Writ, you are hereby commanded to proceed to the premises of [petitioner] Nitto

Enterprises and Jovy Foster located at No. l 74 Araneta Avenue, Portero, Malabon,
Metro Manila or at any other places where their properties are located and effect the
reinstatement of herein [private respondent] to his work last performed or at the
option of the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85 representing his backwages as
called for in the dispositive portion, and turn over such amount to this Office for
proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition for certiorari.
The issues raised before us are the following:
I
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN
APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY
PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE
OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be
considered an apprentice since no apprenticeship program had yet been filed and approved at the
time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement already established
an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. Apprenticeship agreements, including the
main rates of apprentices, shall conform to the rules issued by the Minister of Labor
and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75% per cent of the applicable minimum wage,

may be entered into only in accordance with apprenticeship program duly approved
by the Minister of Labor and Employment. The Ministry shall develop standard model
programs of apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care
maker/molder." On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship Agreement
was filed only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor
and Employment, the apprenticeship agreement was enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the Minister of Labor
and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship program
is, therefore, a condition sine quo non before an apprenticeship agreement can be validly entered
into.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise to
an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can be fully
enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as a regular employee of petitioner
as defined by Article 280 of the Labor Code:
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)
and pursuant to the constitutional mandate to "protect the rights of workers and promote their
welfare." 9
Petitioner further argues that, there is a valid cause for the dismissal of private respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements of due process,
substantive and procedural, must be complied with, before valid dismissal exists. 10 Without which, the
dismissal becomes void.
The twin requirements of notice and hearing constitute the essential elements of due process. This
simply means that the employer shall afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must accord the employee to
enable him to prepare adequately for his defense including legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
The law requires that the employer must furnish the worker sought to be dismissed
with two (2) written notices before termination of employee can be legally effected:
(1) 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 employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V,
Rules and Regulations Implementing the Labor Code as amended). Failure to
comply with the requirements taints the dismissal with illegality. This procedure is
mandatory, in the absence of which, any judgment reached by management is void
and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp.
vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days
after he was made to sign a Quitclaim, a clear indication that such resignation was not voluntary and
deliberate.
Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador"
or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation
letter and quitclaim without explaining to him the contents thereof. Petitioner made it clear to him that
anyway, he did not have a choice. 13

Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's
alleged resignation and subsequent execution of a Quitclaim and Release. A judicious examination
of both events belies any spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent National Labor
Relations Commission, the appealed decision is hereby AFFIRMED.
SO ORDERED.

CENTURY CANNING CORPORATION, vs COURT OF APPEALS and

GLORIA C. PALAD(G.R. No. 152894

)
The Facts
cralawOn 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C.
Palad (Palad) as fish cleaner atpetitioners tuna and sardines factory. Palad signed on
17 July 1997 an apprenticeship agreement with petitioner.Palad received an
apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted its
apprenticeshipprogram for approval to the Technical Education and Skills
Development Authority (TESDA) of the Department of Labor and Employment
(DOLE). On 26 September 1997, the TESDA approved petitioners apprenticeship
program. According to petitioner, a performance evaluation was conducted on 15
November 1997, where petitioner gavePalad a rating ofN.I. or needs improvement
since she scored only27.75% based on a 100% performance indicator.Furthermore,
according to the performance evaluation, Palad incurred numerous tardiness and
absences. As aconsequence, petitioner issued a termination notice dated 22
November 1997 to Palad, informing her of hertermination effective at the close of
business hours of 28 November 1997. Palad then filed a complaint for
illegaldismissal, underpayment of wages, and non-payment of pro-rated 13
th
month pay for the year 1997.
ISSUES:1)

WHETHER OR NOT THE APPRENTICESHIP AGREEMENT WAS VALID AND

BINDINGBETWEEN THE PARTIES2)

WHETHER OR NOT PALAD WAS ILLEGALLY DISMISSED BY THE PETITIONERHELD:

1)

The Court held that the apprenticeship agreement which Palad signed was not valid
andbinding because it was executed more than two months before the TESDA
approvedpetitioners apprenticeship program.The Court cited
Nitto Enterprises v. National Labor Relations Commission
,

where it was heldthat an apprenticeship program should first be approved by the

DOLE before an apprenticemay be hired, otherwise the person hired will be
considered a regular employee. It ismandated that apprenticeship agreements
entered into by the employer and apprentice shall beentered only in accordance
with the apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the Department of Labor and Employment of
theproposed apprenticeship program is, therefore, a condition
sine qua non
before anapprenticeship agreement can be validly entered into. The Labor Code
defines an apprenticeas a worker who is covered by a written apprenticeship
agreement with an employer.Since Palad is not considered an apprentice because
the apprenticeship agreement wasenforced before the TESDAs approval of
petitioners apprenticeship program, Palad is deemeda regular employee performing
the job of a fish cleaner. Clearly, the job of a fish cleaner isnecessary in petitioners
business as a tuna and sardines factory. Under Article 280 of theLabor Code, an
employment is deemed regular where the employee has been engaged toperform
activities which are usually necessary or desirable in the usual business or trade of
the employer.2)

Under Article 279 of the Labor Code, an employer may terminate the services of an
employee for justcauses or for authorized causes. under Article 277(b) of the Labor
Code, the employer must send theemployee who is about to be terminated, a
written notice stating the causes for termination and mustgive the employee the
opportunity to be heard and to defend himself. Thus, to constitute valid
dismissal from employment, two requisites must concur: (1) the dismissal must be
for a just orauthorized cause; and (2) the employee must be afforded an opportunity
to be heard and to defendhimself.Palad was not accorded due process. Even if

petitioner did conduct a performance evaluation on Palad,petitioner failed to warn

Palad of her alleged poor performance. In fact, Palad denies any knowledgeof the
performance evaluation conducted and of the result thereof. Petitioner likewise
admits thatPalad did not receive the notice of termination because Palad allegedly
stopped reporting for work.The records are bereft of evidence to show that
petitioner ever gave Palad the opportunity to explainand defend herself. Clearly, the
two requisites for a valid dismissal are lacking in this case

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 152894

August 17, 2007

CENTURY CANNING CORPORATION, Petitioner,

vs.
COURT OF APPEALS and GLORIA C. PALAD, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Decision2 dated 12 November 2001 and the Resolution dated 5
April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.
The Facts
On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish
cleaner" at petitioners tuna and sardines factory. Palad signed on 17 July 1997 an apprenticeship
agreement3 with petitioner. Palad received an apprentice allowance of P138.75 daily. On 25 July
1997, petitioner submitted its apprenticeship program for approval to the Technical Education and
Skills Development Authority (TESDA) of the Department of Labor and Employment (DOLE). On 26
September 1997, the TESDA approved petitioners apprenticeship program. 4
According to petitioner, a performance evaluation was conducted on 15 November 1997, where
petitioner gave Palad a rating of N.I. or "needs improvement" since she scored only 27.75% based
on a 100% performance indicator. Furthermore, according to the performance evaluation, Palad
incurred numerous tardiness and absences. As a consequence, petitioner issued a termination
notice5 dated 22 November 1997 to Palad, informing her of her termination effective at the close of
business hours of 28 November 1997.

Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of prorated 13th month pay for the year 1997.
On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but ordered
petitioner to pay Palad her last salary and her pro-rated 13th month pay. The dispositive portion of
the Labor Arbiters decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the complaint for
illegal dismissal filed by the complainant against the respondents in the above-entitled case should
be, as it is hereby DISMISSED for lack of merit. However, the respondents are hereby ordered to
pay the complainant the amount of ONE THOUSAND SIX HUNDRED THIRTY-TWO PESOS
(P1,632.00), representing her last salary and the amount of SEVEN THOUSAND TWO HUNDRED
TWENTY EIGHT (P7,228.00) PESOS representing her prorated 13th month pay.
All other issues are likewise dismissed.
SO ORDERED.6
On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the Labor
Arbiters decision, thus:
WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is hereby
MODIFIED in that, in addition, respondents are ordered to pay complainants backwages for two (2)
months in the amount ofP7,176.00 (P138.75 x 26 x 2 mos.). All other dispositions of the Arbiter as
appearing in the dispositive portion of his decision are AFFIRMED.
SO ORDERED.7
Upon denial of Palads motion for reconsideration, Palad filed a special civil action for certiorari with
the Court of Appeals. On 12 November 2001, the Court of Appeals rendered a decision, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE
and a new one entered, to wit:
(a) finding the dismissal of petitioner to be illegal;
(b) ordering private respondent to pay petitioner her underpayment in wages;
(c) ordering private respondent to reinstate petitioner to her former position without loss of
seniority rights and to pay her full backwages computed from the time compensation was
withheld from her up to the time of her reinstatement;
(d) ordering private respondent to pay petitioner attorneys fees equivalent to ten (10%) per
cent of the monetary award herein; and

(e) ordering private respondent to pay the costs of the suit.

SO ORDERED.8
The Ruling of the Court of Appeals
The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and
binding because it was executed more than two months before the TESDA approved petitioners
apprenticeship program. The Court of Appeals cited Nitto Enterprises v. National Labor Relations
Commission,9 where it was held that prior approval by the DOLE of the proposed apprenticeship
program is a condition sine qua non before an apprenticeship agreement can be validly entered into.
The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals ruled
that petitioner failed to show that Palad was properly apprised of the required standard of
performance. The Court of Appeals likewise held that Palad was not afforded due process because
petitioner did not comply with the twin requirements of notice and hearing.
The Issues
Petitioner raises the following issues:
1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE; and
2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A
VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.10
The Ruling of the Court
The petition is without merit.
Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring
of Apprentices
The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship
agreement with an employer.11 One of the objectives of Title II (Training and Employment of Special
Workers) of the Labor Code is to establish apprenticeship standards for the protection of
apprentices.12 In line with this objective, Articles 60 and 61 of the Labor Code provide:
ART. 60. Employment of apprentices. Only employers in the highly technical industries may
employ apprentices and only in apprenticeable occupations approved by the Minister of
Labor and Employment. (Emphasis supplied)
ART. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage
rates of apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The

period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for
wage rates below the legal minimum wage, which in no case shall start below 75 percent of
the applicable minimum wage, may be entered into only in accordance with apprenticeship
programs duly approved by the Minister of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship. (Emphasis supplied)
In Nitto Enterprises v. National Labor Relations Commission,13 the Court cited Article 61 of the Labor
Code and held that an apprenticeship program should first be approved by the DOLE before an
apprentice may be hired, otherwise the person hired will be considered a regular employee. The
Court held:
In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care
maker/molder." On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship agreement
was filed only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor
and Employment, the apprenticeship agreement was enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice shall
be entered only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship
program is, therefore, a condition sine qua non before an apprenticeship agreement can be
validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise to
an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can be fully
enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondents assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as a regular employee of petitioner
as defined by Article 280 of the Labor Code x x x. (Emphasis supplied) 14
Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority over
apprenticeship programs from the Bureau of Local Employment of the DOLE to the TESDA. 16 RA

7796 emphasizes TESDAs approval of the apprenticeship program as a pre-requisite for the hiring
of apprentices. Such intent is clear under Section 4 of RA 7796:
SEC. 4. Definition of Terms. As used in this Act:
xxx
j) "Apprenticeship" training within employment with compulsory related theoretical
instructions involving acontract between an apprentice and an employer on an approved
apprenticeable occupation;
k) "Apprentice" is a person undergoing training for an approved apprenticeable
occupation during an established period assured by an apprenticeship agreement;
l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to
train the apprentice who in turn accepts the terms of training for a recognized
apprenticeable occupation emphasizing the rights, duties and responsibilities of each
party;
m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body
and approved for apprenticeship by the Authority [TESDA]; (Emphasis supplied)
In this case, the apprenticeship agreement was entered into between the parties before petitioner
filed its apprenticeship program with the TESDA for approval. Petitioner and Palad executed the
apprenticeship agreement on 17 July 1997 wherein it was stated that the training would start on 17
July 1997 and would end approximately in December 1997.17 On 25 July 1997, petitioner submitted
for approval its apprenticeship program, which the TESDA subsequently approved on 26 September
1997.18 Clearly, the apprenticeship agreement was enforced even before the TESDA approved
petitioners apprenticeship program. Thus, the apprenticeship agreement is void because it lacked
prior approval from the TESDA.
The TESDAs approval of the employers apprenticeship program is required before the employer is
allowed to hire apprentices. Prior approval from the TESDA is necessary to ensure that only
employers in the highly technical industries may employ apprentices and only in apprenticeable
occupations.19 Thus, under RA 7796, employers can only hire apprentices for apprenticeable
occupations which must be officially endorsed by a tripartite body and approved for apprenticeship
by the TESDA. This is to ensure the protection of apprentices and to obviate possible abuses by
prospective employers who may want to take advantage of the lower wage rates for apprentices and
circumvent the right of the employees to be secure in their employment.
1avvphil

The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was
further emphasized by the DOLE with the issuance of Department Order No. 68-04 on 18 August
2004. Department Order No. 68-04, which provides the guidelines in the implementation of the
Apprenticeship and Employment Program of the government, specifically states that no enterprise
shall be allowed to hire apprentices unless its apprenticeship program is registered and
approved by TESDA.20

Since Palad is not considered an apprentice because the apprenticeship agreement was enforced
before the TESDAs approval of petitioners apprenticeship program, Palad is deemed a regular
employee performing the job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioners business as a tuna and sardines factory. Under Article 28021 of the Labor Code, an
employment is deemed 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.
Illegal Termination of Palad
We shall now resolve whether petitioner illegally dismissed Palad.
Under Article 27922 of the Labor Code, an employer may terminate the services of an employee for
just causes23or for authorized causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the
employer must send the employee who is about to be terminated, a written notice stating the causes
for termination and must give the employee the opportunity to be heard and to defend himself. Thus,
to constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be
for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard
and to defend himself.26
In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and
poor efficiency of performance. Under Section 25, Rule VI, Book II of the Implementing Rules of the
Labor Code, habitual absenteeism and poor efficiency of performance are among the valid causes
for which the employer may terminate the apprenticeship agreement after the probationary period.
However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palads
termination:
As to the validity of complainants dismissal in her status as an apprentice, suffice to state that the
findings of the Arbiter that complainant was dismissed due to failure to meet the standards is
nebulous. What clearly appears is that complainant already passed the probationary status of the
apprenticeship agreement of 200 hours at the time she was terminated on 28 November 1997 which
was already the fourth month of the apprenticeship period of 1000 hours. As such, under the Code,
she can only be dismissed for cause, in this case, for poor efficiency of performance on the job or in
the classroom for a prolonged period despite warnings duly given to the apprentice.
We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice
during the agreed period. Besides the absence of any written warnings given to complainant
reminding her of "poor performance," respondents evidence in this respect consisted of an
indecipherable or unauthenticated xerox of the performance evaluation allegedly conducted
on complainant. This is of doubtful authenticity and/or credibility, being not only incomplete
in the sense that appearing thereon is a signature (not that of complainant) side by side with
a date indicated as "1/16/98". From the looks of it, this signature is close to and appertains to
the typewritten position of "Division/Department Head", which is below the signature of
complainants immediate superior who made the evaluation indicated as "11-15-97."

The only conclusion We can infer is that this evaluation was made belatedly, specifically,
after the filing of the case and during the progress thereof in the Arbitral level, as shown that
nothing thereon indicate that complainant was notified of the results. Its authenticity therefor,
is a big question mark, and hence lacks any credibility. Evidence, to be admissible in
administrative proceedings, must at least have a modicum of authenticity. This, respondents
failed to comply with. As such, complainant is entitled to the payment of her wages for the remaining
two (2) months of her apprenticeship agreement.27 (Emphasis supplied)
Indeed, it appears that the Labor Arbiters conclusion that petitioner validly terminated Palad was
based mainly on the performance evaluation allegedly conducted by petitioner. However, Palad
alleges that she had no knowledge of the performance evaluation conducted and that she was not
even informed of the result of the alleged performance evaluation. Palad also claims she did not
receive a notice of dismissal, nor was she given the chance to explain. According to petitioner, Palad
did not receive the termination notice because Palad allegedly stopped reporting for work after being
informed of the result of the evaluation.
Under Article 227 of the Labor Code, the employer has the burden of proving that the termination
was for a valid or authorized cause.28 Petitioner failed to substantiate its claim that Palad was
terminated for valid reasons. In fact, the NLRC found that petitioner failed to prove the authenticity of
the performance evaluation which petitioner claims to have conducted on Palad, where Palad
received a performance rating of only 27.75%. Petitioner merely relies on the performance
evaluation to prove Palads inefficiency. It was likewise not shown that petitioner ever apprised Palad
of the performance standards set by the company. When the alleged valid cause for the termination
of employment is not clearly proven, as in this case, the law considers the matter a case of illegal
dismissal.29
Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance
evaluation on Palad, petitioner failed to warn Palad of her alleged poor performance. In fact, Palad
denies any knowledge of the performance evaluation conducted and of the result thereof. Petitioner
likewise admits that Palad did not receive the notice of termination30 because Palad allegedly
stopped reporting for work. The records are bereft of evidence to show that petitioner ever gave
Palad the opportunity to explain and defend herself. Clearly, the two requisites for a valid dismissal
are lacking in this case.
WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5 April
2002 of the Court of Appeals in CA-G.R. SP No. 60379.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

ATLANTA INDUSTRIES, INC. G.R. No. 187320

and/or ROBERT CHAN,
Petitioners,
Present:
CARPIO MORALES, J., Chairperson,
BRION,
BERSAMIN,
- versus - VILLARAMA, JR., and
SERENO, JJ.
Promulgated:
APRILITO R. SEBOLINO,
KHIM V. COSTALES, January 26, 2011
ALVIN V. ALMOITE, and
JOSEPH S. SAGUN,
Respondents.
x----------------------------------------------------------------------------------------x
DECISION
BRION, J.:
For resolution is the petition for review on certiorari[1] assailing the decision[2] and
the resolution[3] of the Court of Appeals (CA) rendered on November 4,
2008 and March 25, 2009, respectively, in CA-G.R. SP. No. 99340.[4]
The Antecedents
The facts are summarized below.
In the months of February and March 2005, complainants Aprilito R. Sebolino,
Khim V. Costales, Alvin V. Almoite, Joseph S. Sagun, Agosto D. Zao, Domingo S.
Alegria, Jr., Ronie Ramos, Edgar Villagomez, Melvin Pedregoza, Teofanes B.
Chiong, Jr., Leonardo L. dela Cruz, Arnold A. Magalang, and Saturnino M.
Mabanag filed several complaints for illegal dismissal, regularization,

underpayment, nonpayment of wages and other money claims, as well as claims

for moral and exemplary damages and attorneys fees against the petitioners Atlanta
Industries, Inc. (Atlanta) and its President and Chief Operating Officer Robert
Chan. Atlanta is a domestic corporation engaged in the manufacture of steel pipes.
The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig,
but were later transferred to Labor Arbiter Dominador B. Medroso, Jr.
The complainants alleged that they had attained regular status as they were allowed
to work with Atlanta for more than six (6) months from the start of a purported
apprenticeship agreement between them and the company. They claimed that they
were illegally dismissed when the apprenticeship agreement expired.
In defense, Atlanta and Chan argued that the workers were not entitled to
regularization and to their money claims because they were engaged as apprentices
under a government-approved apprenticeship program. The company offered to
hire them as regular employees in the event vacancies for regular positions occur in
the section of the plant where they had trained. They also claimed that their names
did not appear in the list of employees (Master List) [5] prior to their engagement as
apprentices.
On May 24, 2005, dela Cruz, Magalang, Zao and Chiong executed a Pagtalikod at
Pagwawalang Saysay before Labor Arbiter Cajilig.
The Compulsory Arbitration Rulings
On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to
dela Cruz, Magalang, Zao and Chiong, but found the termination of service of the
remaining nine to be illegal.[6] Consequently, the arbiter awarded the dismissed
workers backwages, wage differentials, holiday pay and service incentive leave
pay amounting toP1,389,044.57 in the aggregate.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the
meantime, or on October 10, 2006, Ramos, Alegria, Villagomez, Costales and
Almoite allegedly entered into a compromise agreement with Atlanta.[7] The
agreement provided that except for Ramos, Atlanta agreed to pay the workers a

specified amount as settlement, and to acknowledge them at the same time as

regular employees.
On December 29, 2006,[8] the NLRC rendered a decision, on appeal, modifying the
ruling of the labor arbiter, as follows: (1) withdrawing the illegal dismissal finding
with respect to Sagun, Mabanag, Sebolino and Pedregoza; (2) affirming the
dismissal of the complaints of dela Cruz, Zao, Magalang and Chiong; (3)
approving the compromise agreement entered into by Costales, Ramos,
Villagomez, Almoite and Alegria, and (4) denying all other claims.
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the
decision, but the NLRC denied the motion in its March 30, 2007[9] resolution. The
four then sought relief from the CA through a petition for certiorari under Rule 65
of the Rules of Court. They charged that the NLRC committed grave abuse of
discretion in: (1) failing to recognize their prior employment with Atlanta; (2)
declaring the second apprenticeship agreement valid; (3) holding that the dismissal
of Sagun, Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding the
compromise agreement involving Costales, Ramos, Villagomez, Almoite and
Alegria.
The CA Decision
The CA granted the petition based on the following findings:[10]
1.
The respondents were already employees of the company before they
entered into the first and second apprenticeship agreements Almoite and Costales
were employed as early as December 2003 and, subsequently, entered into a first
apprenticeship agreement from May 13, 2004 to October 12, 2004; before this first
agreement expired, a second apprenticeship agreement, from October 9, 2004 to
March 8, 2005 was executed. The same is true with Sebolino and Sagun, who were
employed by Atlanta as early as March 3, 2004. Sebolino entered into his first
apprenticeship agreement with the company from March 20, 2004 to August 19,
2004, and his second apprenticeship agreement from August 20, 2004 to January
19, 2005. Sagun, on the other hand, entered into his first agreement from May 28,
2004 to October 8, 2004, and the second agreement from October 9, 2004 to March
8, 2005.

2.
The first and second apprenticeship agreements were defective as
they were executed in violation of the law and the rules. [11] The agreements did not
indicate the trade or occupation in which the apprentice would be trained; neither
was the apprenticeship program approved by the Technical Education and Skills
Development Authority (TESDA).
3.
The positions occupied by the respondents machine operator,
extruder operator and scaleman are usually necessary and desirable in the
manufacture of plastic building materials, the companys main business. Costales,
Almoite, Sebolino and Sagun were, therefore, regular employees whose dismissals
were illegal for lack of a just or authorized cause and notice.
4.
The compromise agreement entered into by Costales and Almoite,
together with Ramos, Villagomez and Alegria, was not binding on Costales and
Almoite because they did not sign the agreement.
The petitioners themselves admitted that Costales and Almoite were initially
planned to be a part of the compromise agreement, but their employment has been
regularized as early as January 11, 2006; hence, the company did not pursue their
inclusion in the compromise agreement.[12]
The CA faulted the NLRC for failing to appreciate the evidence regarding
the respondents prior employment with Atlanta. The NLRC recognized the prior
employment of Costales and Almoite on Atlantas monthly report for December
2003 for the CPS Department/Section dated January 6, 2004.[13] This record shows
that Costales and Almoite were assigned to the companys first shift from 7:00
a.m. to 3:00 p.m. The NLRC ignored Sebolino and Saguns prior employment
under the companys Production and Work Schedule for March 7 to 12, 2005 dated
March 3, 2004,[14] as they had been Atlantas employees as early as March 3, 2004,
with Sebolino scheduled to work on March 7-12, 2005 at 7:00 a.m. to 7:00 p.m.,
while Sagun was scheduled to work for the same period but from 7:00 p.m. to 7:00
a.m. The CA noted that Atlanta failed to challenge the authenticity of the two
documents before it and the labor authorities.
Atlanta and Chan moved for reconsideration, but the CA denied the motion
in a resolution rendered on March 25, 2009.[15] Hence, the present petition.

The Petition
Atlanta seeks a reversal of the CA decision, contending that the appellate
court erred in (1) concluding that Costales, Almoite, Sebolino and Sagun were
employed by Atlanta before they were engaged as apprentices; (2) ruling that a
second apprenticeship agreement is invalid; (3) declaring that the respondents were
illegally dismissed; and (4) disregarding the compromise agreement executed by
Costales and Almoite. It submits the following arguments:
First. The CAs conclusion that the respondent workers were company
employees before they were engaged as apprentices was primarily based on the
Monthly Report[16]and the Production and Work Schedule for March 7-12, 2005,
[17]
in total disregard of the Master List[18] prepared by the company accountant,
Emelita M. Bernardo. The names of Costales, Almoite, Sebolino and Sagun do not
appear as employees in the Master List which contained the names of all the
persons who were employed by and at petitioner.[19]
Atlanta faults the CA for relying on the Production and Work Schedule and
the Monthly Report which were not sworn to, and in disregarding the Master List
whose veracity was sworn to by Bernardo and by Alex Go who headed the
companys accounting division. It maintains that the CA should have given more
credence to the Master List.
Second. In declaring invalid the apprenticeship agreements it entered into
with the respondent workers, the CA failed to recognize the rationale behind the
law on apprenticeship. It submits that under the law,[20] apprenticeship agreements
are valid, provided they do not exceed six (6) months and the apprentices are paid
the appropriate wages of at least 75% of the applicable minimum wage.
The respondents initially executed a five-month apprenticeship program
with Atlanta, at the end of which, they voluntarily and willingly entered into
another apprenticeship agreement with the petitioner for the training of a second
skill[21] for five months; thus, the petitioners committed no violation of the
apprenticeship period laid down by the law.

Further, the apprenticeship agreements, entered into by the parties, complied

with the requisites under Article 62 of the Labor Code; the companys authorized
representative and the respondents signed the agreements and these were ratified
by the companys apprenticeship committee. The apprenticeship program itself was
approved and certified by the TESDA.[22] The CA, thus, erred in overturning the
NLRCs finding that the apprenticeship agreements were valid.
Third. There was no illegal dismissal as the respondent workers tenure
ended with the expiration of the apprenticeship agreement they entered into. There
was, therefore, no regular employer-employee relationship between Atlanta and the
respondent workers.
The Case for Costales, Almoite, Sebolino and Sagun
In a Comment filed on August 6, 2009,[23] Costales, Almoite, Sebolino and
Sagun pray for a denial of the petition for being procedurally defective and for lack
of merit.
The respondent workers contend that the petition failed to comply with
Section 4, Rule 45 of the Rules of Court which requires that the petition be
accompanied by supporting material portions of the records. The petitioners failed
to attach to the petition a copy of the Production and Work Schedule despite their
submission that the CA relied heavily on the document in finding the respondent
workers prior employment with Atlanta. They also did not attach a copy of the
compromise agreement purportedly executed by Costales and Almoite. For this
reason, the respondent workers submit that the petition should be dismissed.
The respondents posit that the CA committed no error in holding that they were
already Atlantas employees before they were engaged as apprentices, as confirmed
by the companys Production and Work Schedule.[24] They maintain that the
Production and Work Schedule meets the requirement of substantial evidence as
the petitioners failed to question its authenticity. They point out that the schedule
was prepared by Rose A. Quirit and approved by Adolfo R. Lope, head of the
companys PE/Spiral Section. They argue that it was highly unlikely that the head
of a production section of the company would prepare and assign work to the
complainants if the latter had not been company employees.

The respondent workers reiterate their mistrust of the Master List [25] as evidence
that they were not employees of the company at the time they became apprentices.
They label the Master List as self-serving, dubious and even if considered as
authentic, its content contradicts a lot of petitioners claim and allegations,[26] thus 1.
Aside from the fact that the Master List is not legible, it contains only
the names of inactive employees. Even those found by the NLRC to have been
employed in the company (such as Almoite, Costales and Sagun) do not appear in
the list. If Costales and Almoite had been employed with Atlanta since January 11,
2006, as the company claimed,[27] their names would have been in the list,
considering that the Master List accounts for all employees as of May 2006 the
notation carried on top of each page of the document.
2.
There were no entries of employees hired or resigned in the years
2005 and 2006 despite the as of May 2006 notation; several pages making up the
Master List contain names of employees for the years 1999 - 2004.
3.
The fact that Atlanta presented the purported Master List instead of
the payroll raised serious doubts on the authenticity of the list.
In sum, the respondent workers posit that the presentation of the Master List
revealed the intention of the herein petitioner[s] to perpetually hide the fact of
[their] prior employment.[28]
On the supposed apprenticeship agreements they entered into, Costales,
Almoite, Sebolino and Sagun refuse to accept the agreements validity, contending
that the companys apprenticeship program is merely a ploy to continually deprive
[them] of their rightful wages and benefits which are due them as regular
employees.[29] They submit the following indubitable facts and ratiocinations:[30]
1.
The apprenticeship agreements were submitted to TESDA only in
2005 (with dates of receipt on 1/4/05 & 2/22/05[31]), when the agreements were
supposed to have been executed in April or May 2004. Thus, the submission was
made long after the starting date of the workers apprenticeship or even beyond the
agreements completion/termination date, in violation of Section 23, Rule VI, Book
II of the Labor Code.

2.
The respondent workers were made to undergo apprenticeship for
occupations different from those allegedly approved by TESDA. TESDA
approved Atlantas apprenticeship program on Plastic Molder[32] and not for
extrusion molding process, engineering, pelletizing process and mixing process.
3.
The respondents were already skilled workers prior to the
apprenticeship program as they had been employed and made to work in the
different job positions where they had undergone training. Sagun and Sebolino,
together with Mabanag, Pedregoza, dela Cruz, Chiong, Magalang and Alegria were
even given production assignments and work schedule at the PE/Spiral Section
from May 11, 2004 to March 23, 2005, and some of them were even assigned to
the 3:00 p.m. 11:00 p.m. and graveyard shifts (11:00 p.m. 7:00 a.m.) during the
period.[33]
4.
The respondent workers were required to continue as apprentices
beyond six months. The TESDA certificate of completion indicates that the
workers apprenticeship had been completed after six months. Yet, they were
suffered to work as apprentices beyond that period.
Costales, Almoite, Sebolino and Sagun resolutely maintain that they were
illegally dismissed, as the reason for the termination of their employment notice of
the completion of the second apprenticeship agreement did not constitute either a
just or authorized cause under Articles 282 and 283 of the Labor Code.
Finally, Costales and Almoite refuse to be bound by the compromise
agreement[34] that Atlanta presented to defeat the two workers cause of action. They
claim that the supposed agreement is invalid as against them, principally because
they did not sign it.
The Courts Ruling
The procedural issue
The respondent workers ask that the petition be dismissed outright for the
petitioners failure to attach to the petition a copy of the Production and Work
Schedule and a copy of the compromise agreement Costales and Almoite allegedly

entered into material portions of the record that should accompany and support the
petition, pursuant to Section 4, Rule 45 of the Rules of Court.
In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J.
Garchitorena[35] where the Court addressed essentially the same issue arising from
Section 2(d), Rule 42 of the Rules of Court, [36] we held that the phrase of the
pleadings and other material portions of the record xxx as would support the
allegation of the petition clearly contemplates the exercise of discretion on the part
of the petitioner in the selection of documents that are deemed to be relevant to the
petition. The crucial issue to consider then is whether or not the documents
accompanying the petition sufficiently supported the allegations therein.[37]
As in Mariners, we find that the documents attached to the petition sufficiently
support the petitioners allegations. The accompanying CA decision[38] and
resolution,[39] as well as those of the labor arbiter[40] and the NLRC,[41] referred to
the parties position papers and even to their replies and rejoinders. Significantly,
the CA decision narrates the factual antecedents, defines the complainants cause of
action, and cites the arguments, including the evidence the parties adduced. If any,
the defect in the petition lies in the petitioners failure to provide legible copies of
some of the material documents mentioned, especially several pages in the
decisions of the labor arbiter and of the NLRC. This defect, however, is not fatal as
the challenged CA decision clearly summarized the labor tribunals rulings. We,
thus, find no procedural obstacle in resolving the petition on the merits.
The merits of the case
We find no merit in the petition. The CA committed no reversible error in
nullifying the NLRC decision[42] and in affirming the labor arbiters ruling,[43] as it
applies to Costales, Almoite, Sebolino and Sagun. Specifically, the CA correctly
ruled that the four were illegally dismissed because (1) they were already
employees when they were required to undergo apprenticeship and (2)
apprenticeship agreements were invalid.
The following considerations support the CA ruling.

First. Based on company operations at the time material to the case, Costales,
Almoite, Sebolino and Sagun were already rendering service to the company as
employees before they were made to undergo apprenticeship. The company itself
recognized the respondents status through relevant operational records in the case
of Costales and Almoite, the CPS monthly report for December 2003 [44] which the
NLRC relied upon and, for Sebolino and Sagun, the production and work schedule
for March 7 to 12, 2005[45] cited by the CA.
Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first
shift (7:00 a.m. to 3:00 p.m.) of the Sections work. The Production and Work
Schedules, in addition to the one noted by the CA, showed that Sebolino and
Sagun were scheduled on different shifts vis--vis the production and work of the
companys PE/Spiral Section for the periods July 5-10, 2004; [46] October 25-31,
2004;[47] November 8-14, 2004;[48] November 16-22, 2004;[49] January 3-9, 2005;
[50]
January 10-15, 2005;[51] March 7-12, 2005[52] and March 17-23, 2005.[53]
We stress that the CA correctly recognized the authenticity of
the operational documents, for the failure of Atlanta to raise a challenge against
these documents before the laborarbiter, the NLRC and the CA itself.
The appellate court, thus, found the said documents sufficient to establish the
employment of the respondents before their engagement as apprentices.
Second. The Master List[54] (of employees) that the petitioners heavily rely upon as
proof of their position that the respondents were not Atlantas employees, at the
time they were engaged as apprentices, is unreliable and does not inspire belief.
The list, consisting of several pages, is hardly legible. It requires extreme effort to
sort out the names of the employees listed, as well as the other data contained in
the list. For this reason alone, the list deserves little or no consideration. As the
respondents also pointed out, the list itself contradicts a lot of Atlantas claims and
allegations, thus: it lists only the names of inactive employees; even the names of
those the NLRC found to have been employed by Atlanta, like Costales and
Almoite, and those who even Atlanta claims attained regular status on January 11,
2006,[55] do not appear in the list when it was supposed to account for
all employees as of May 6, 2006. Despite the May 6, 2006 cut off date, the list

contains no entries of employees who were hired or who resigned in 2005 and
2006. We note that the list contains the names of employees from 1999 to 2004.
We cannot fault the CA for ignoring the Master List even if Bernardo, its head
office accountant, swore to its correctness and authenticity.[56] Its substantive
unreliability gives it very minimal probative value. Atlanta would have been better
served, in terms of reliable evidence, if true copies of the payroll (on which the list
was based, among others, as Bernardo claimed in her affidavit) were presented
instead.
Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering
service to the company when they were made to undergo apprenticeship (as
established by the evidence) renders the apprenticeship agreements irrelevant as far
as the four are concerned. This reality is highlighted by the CA finding that the
respondents occupied positions such as machine operator, scaleman and extruder
operator - tasks that are usually necessary and desirable in Atlantas usual business
or trade as manufacturer of plastic building materials. [57] These tasks and their
nature characterized the four as regular employees under Article 280 of the Labor
Code. Thus, when they were dismissed without just or authorized cause, without
notice, and without the opportunity to be heard, their dismissal was illegal under
the law.[58]
Even if we recognize the companys need to train its employees through
apprenticeship, we can only consider the first apprenticeship agreement for the
purpose. With the expiration of the first agreement and the retention of the
employees, Atlanta had, to all intents and purposes, recognized the completion of
their training and their acquisition of a regular employee status. To foist upon them
the second apprenticeship agreement for a second skill which was not even
mentioned in the agreement itself,[59] is a violation of the Labor Codes
implementing rules[60] and is an act manifestly unfair to the employees, to say the
least. This we cannot allow.
Fourth. The compromise agreement[61] allegedly entered into by Costales and
Almoite, together with Ramos, Villagomez and Alegria, purportedly in settlement
of the case before the NLRC, is not binding on Costales and Almoite because they
did not sign it. The company itself admitted [62] that while Costales and Almoite

were initially intended to be a part of the agreement, it did not pursue their
inclusion due to their regularization as early as January 11, 2006.[63]
WHEREFORE, premises considered, we hereby DENY the petition for lack of
merit. The assailed decision and resolution of the Court of Appeals
are AFFIRMED. Costs against the petitioner Atlanta Industries, Inc.
SO ORDERED.
Atlanta Industries vs. Sebolino Digest
G.R. No. 187320, January 26, 2011

ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, petitioners, vs. APRILITO R.

SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMONTE, and JOSEPH H. SAGUN,
respondents.

BRION, J.:

FACTS:

Sebolino et al. filed several complaints for illegal dismissal, regularization,

underpayment, nonpayment of wages and other money claims as well as damages.
They alleged that they had attained regular status as they were allowed to work
with Atlanta for more than six (6) months from the start of a purported
apprenticeship agreement between them and the company. They claimed that they
were illegally dismissed when the apprenticeship agreement expired.

In defense, Atlanta and Chan argued that the workers were not entitled to
regularization and to their money claims because they were engaged as apprentices
under a government-approved apprenticeship program. The company offered to
hire them as regular employees in the event vacancies for regular positions occur in
the section of the plant where they had trained. They also claimed that their names
did not appear in the list of employees (Master List) prior to their engagement as
apprentices.

The Labor Arbiter found the dismissal to be illegal with respect to nine out of the
twelve complainants. Atlanta appealed the decision to the NLRC which reversed the
illegal dismissal decision with respect to Sebolino and three others. They moved for
reconsideration but this was denied. They then brought the case up to the Court of
Appeals, which held that Sebolino and the three others were illegally dismiised.

The CA ruled that Sebolino and the three others were already employees of the
company before they entered into the first and second apprenticeship agreements.
For example, Sebolino was employed by Atlanta on March 3, 2004 then he entered
into his first apprenticeship agreement with the company on March 20, 2004 to
August 19, 2004. The second apprenticeship agreement was from May 28, 2004 to
October 8, 2004. However, the CA found the apprenticeship agreements to be void
because they were executed in violation of the law and the rules. Therefore, in the
first place, there were no apprenticeship agreements.

Also, the positions occupied by the respondents machine operator, extruder

operator and scaleman are usually necessary and desirable in the manufacture of
plastic building materials, the companys main business. Sebolino and the three
others were, therefore, regular employees whose dismissals were illegal for lack of a
just or authorized cause and notice.

ISSUE: Whether or not the CA erred in ruling that Sebolino and three others were
illegally dismissed.

HELD: The petition is unmeritorious.

LABOR LAW - Illegal dismissals

The CA committed no reversible error in nullifying the NLRC decision and in

affirming the labor arbiters ruling, as it applies toCostales, Almoite, Sebolino and
Sagun. Specifically, the CA correctly ruled that the four were illegally dismissed
because (1) they were already employees when they were required to undergo
apprenticeship and (2) apprenticeship agreements were invalid.

The following considerations support the CA ruling.

FBased on company operations at the time material to the case, Costales, Almoite,
Sebolino and Sagun were already rendering service to the company as employees
before they were made to undergo apprenticeship. The company itself recognized
the respondents status through relevant operational records in the case of Costales
and Almoite, the CPS monthly report for December 2003 which the NLRC relied
upon and, for Sebolino and Sagun, the production and work schedule for March 7 to
12, 2005 cited by the CA.

The CA correctly recognized the authenticity of the operational documents, for the
failure of Atlanta to raise a challenge against these documents before the labor
arbiter, the NLRC and the CA itself. The appellate court, thus, found the said
documents sufficientto establish the employment of the respondents before their
engagement as apprentices.

The fact that Sebolino and the three others were already rendering service to the
company when they were made to undergo apprenticeship (as established by the
evidence) renders the apprenticeship agreements irrelevant as far as the four are
concerned. This reality is highlighted by the CA finding that the respondents
occupied positions such as machine operator, scaleman and extruder operator tasks that are usually necessary and desirable in Atlantas usual business or trade as
manufacturer of plastic building materials. These tasks and their nature
characterized the four as regular employees under Article 280 of the Labor
Code.Thus, when they were dismissed without just or authorized cause, without
notice, and without the opportunity to be heard, their dismissal was illegal under
the law.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 122917 July 12, 1999

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL,

RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON
GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN,
ROWENA M. TABAQUERO, CORAZON C. DELOS REYES, ROBERT G. NOORA, MILAGROS O.
LEQUIGAN, ADRIANA F. TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E. SALES, ISABEL
MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY V. GRUELA, BERNADETH D.
AGERO, CYNTHIA DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPCION, DINDO
VALERIO, ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA
SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY
BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO and TIMOSA,petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST
COMPANY, respondents.

PANGANIBAN, J.:
The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the
same terms and conditions of employment as qualified able-bodied employees. Once they have
attained the status of regular workers, they should be accorded all the benefits granted by law,
notwithstanding written or verbal contracts to the contrary. This treatments is rooted not merely on
charity or accomodation, but on justice for all.
The Case
Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision 2 of the National Labor
Relations Commission (NLRC), 3 which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L.
Linsangan. The labor arbiter's Decision disposed as follows: 4
WHEREFORE, judgment is hereby rendered dismissing the above-mentioned
complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the Motion for
Reconsideration.
The Facts
The facts were summarized by the NLRC in this wise:

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
"Employment Contract for Handicapped Workers". (pp. 68 & 69, Records) The full
text of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR
HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking
corporation duly organized and existing under and by virtue of the
laws of the Philippines, with business address at FEBTC Building,
Muralla, Intramuros, Manila, represented herein by its Assistant Vice
President, MR. FLORENDO G. MARANAN, (hereinafter referred to
as the "BANK");
-and, years old, of legal age, , and
residing at (hereinafter referred to as the ("EMPLOYEE").
WITNESSETH : That
WHEREAS, the BANK, cognizant of its social responsibility, realizes
that there is a need to provide disabled and handicapped persons
gainful employment and opportunities to realize their potentials, uplift
their socio-economic well being and welfare and make them
productive, self-reliant and useful citizens to enable them to fully
integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be
filled-up by disabled and handicapped persons, particularly deafmutes, and the BANK ha[s] been approached by some civic-minded
citizens and authorized government agencies [regarding] the
possibility of hiring handicapped workers for these positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers
who [were] recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing
premises and in compliance with Article 80 of the Labor Code of the
Philippines as amended, the BANK and the EMPLOYEE have
entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the
EMPLOYEE agrees to diligently and faithfully work with the BANK,
as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties
and responsibilities:
i. Sort out bills according to color;
ii. Count each denomination per
hundred, either manually or with the
aid of a counting machine;
iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles;

and
v. Submit bundled bills to the bank
teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month,
after which the BANK shall determine whether or not he/she should
be allowed to finish the remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of
P118.00 per day, subject to adjustment in the sole judgment of the
BANK, payable every 15th and end of the month.
1wphi1.nt

5. The regular work schedule of the EMPLOYEE shall be five (5)

days per week, from Mondays thru Fridays, at eight (8) hours a day.
The EMPLOYEE may be required to perform overtime work as
circumstance may warrant, for which overtime work he/she [shall] be
paid an additional compensation of 125% of his daily rate if
performed during ordinary days and 130% if performed during
Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13th month pay based
on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply
with all the BANK Rules and Regulations and Policies, and to conduct
himself/herself in a manner expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been
employed under a special employment program of the BANK, for
which reason the standard hiring requirements of the BANK were not
applied in his/her case. Consequently, the EMPLOYEE
acknowledges and accepts the fact that the terms and conditions of
the employment generally observed by the BANK with respect to the
BANK's regular employee are not applicable to the EMPLOYEE, and
that therefore, the terms and conditions of the EMPLOYEE's
employment with the BANK shall be governed solely and exclusively
by this Contract and by the applicable rules and regulations that the
Department of Labor and Employment may issue in connection with
the employment ofdisabled and handicapped workers. More
specifically, the EMPLOYEE hereby acknowledges that the provisions
of Book Six of the Labor Code of the Philippines as amended,
particularly on regulation of employment and separation pay are not
applicable to him/her.

9. The Employment Contract shall be for a period of six (6) months or

from to unless earlier terminated by the BANK for any just
or reasonable cause. Any continuation or extension of this Contract
shall be in writing and therefore this Contract will automatically expire
at the end of its terms unless renewed in writing by the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their
signature[s] this day of , at Intramuros, Manila,
Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one
(21). Their employment[s] were renewed every six months such that by the time this
case arose, there were fifty-six (56) deaf-mutes who were employed by respondent
under the said employment agreement. The last one was Thelma Malindoy who was
employed in 1992 and whose contract expired on July 1993.
xxx xxx xxx
Disclaiming that complainants were regular employees, respondent Far East Bank
and Trust Company maintained that complainants who are a special class of workers
the hearing impaired employees were hired temporarily under [a] special
employment arrangement which was a result of overtures made by some civic and
political personalities to the respondent Bank; that complainant[s] were hired due to
"pakiusap" which must be considered in the light of the context career and working
environment which is to maintain and strengthen a corps of professionals trained and
qualified officers and regular employees who are baccalaureate degree holders from
excellent schools which is an unbending policy in the hiring of regular employees;
that in addition to this, training continues so that the regular employee grows in the
corporate ladder; that the idea of hiring handicapped workers was acceptable to
them only on a special arrangement basis; that it was adopted the special program to
help tide over a group of workers such as deaf-mutes like the complainants who
could do manual work for the respondent Bank; that the task of counting and sorting
of bills which was being performed by tellers could be assigned to deaf-mutes that
the counting and sorting of money are tellering works which were always logically
and naturally part and parcel of the tellers' normal functions; that from the beginning
there have been no separate items in the respondent Bank plantilla for sortes or
counters; that the tellers themselves already did the sorting and counting chore as a
regular feature and integral part of their duties (p. 97, Records); that through the
"pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting and
sorting bills in favor of deaf-mutes without creating new positions as there is no
position either in the respondent or in any other bank in the Philippines which deals
with purely counting and sorting of bills in banking operations.
Petitioners specified when each of them was hired and dimissed, viz: 7

NAME OF PETITIONER

1. MARITES BERNARDO

WORKPLACE

Intramuros

Date Hired

12-Nov-90

Date Dismissed

17-Nov-93

2. ELVIRA GO DIAMANTE

Intramuros

24-Jan-90

11-Jan-94

3. REBECCA E. DAVID

Intramuros

16-Apr-90

23-Oct-93

4. DAVID P. PASCUAL

Bel-Air

15-Oct-88

21-Nov-94

5. RAQUEL ESTILLER

Intramuros

2-Jul-92

4-Jan-94

6. ALBERT HALLARE

West

4-Jan-91

9-Jan-94

7. EDMUND M. CORTEZ

Bel-Air

15-Jan-91

3-Dec-93

8. JOSELITO O. AGDON

Intramuros

5-Nov-90

17-Nov-93

9. GEORGE P. LIGUTAN JR.

Intramuros

6-Sep-89

19-Jan-94

10. CELSO M. YAZAR

Intramuros

8-Feb-93

8-Aug-93

11. ALEX G. CORPUZ

Intramuros

15-Feb-93

15-Aug-93

12. RONALD M. DELFIN

Intramuros

22-Feb-93

22-Aug-93

13. ROWENA M. TABAQUERO

Intramuros

22-Feb-93

22-Aug-93

14. CORAZON C. DELOS REYES

Intramuros

8-Feb-93

8-Aug-93

15. ROBERT G. NOORA

Intramuros

15-Feb-93

15-Aug-93

16. MILAGROS O. LEQUIGAN

Intramuros

1-Feb-93

1-Aug-93

17. ADRIANA F. TATLONGHARI

Intramuros

22-Jan-93

22-Jul-93

18. IKE CABUNDUCOS

Intramuros

24-Feb-93

24-Aug-93

19. COCOY NOBELLO

Intramuros

22-Feb-93

22-Aug-93

20. DORENDA CATIMBUHAN

Intramuros

15-Feb-93

15-Aug-93

21. ROBERT MARCELO

West

31 JUL 93 8

1-Aug-93

22. LILIBETH Q. MARMOLEJO

West

15-Jun-90

21-Nov-93

23. JOSE E. SALES

West

6-Aug-92

12-Oct-93

24. ISABEL MAMAUAG

West

8-May-92

10-Nov-93

25. VIOLETA G. MONTES

Intramuros

2-Feb-90

15-Jan-94

26. ALBINO TECSON

Intramuros

7-Nov-91

10-Nov-93

27. MELODY B. GRUELA

West

28-Oct-91

3-Nov-93

28. BERNADETH D. AGERO

West

19-Dec-90

27-Dec-93

29. CYNTHIA DE VERA

Bel-Air

26-Jun-90

3-Dec-93

30. LANI R. CORTEZ

Bel-Air

15-Oct-88

10-Dec-93

31. MARIA ISABEL B.CONCEPCION

West

6-Sep-90

6-Feb-94

32. DINDO VALERIO

Intramuros

30-May-93

30-Nov-93

33. ZENAIDA MATA

Intramuros

10-Feb-93

10-Aug-93

34. ARIEL DEL PILAR

Intramuros

24-Feb-93

24-Aug-93

35. MARGARET CECILIA CANOZA

Intramuros

27-Jul-90

4-Feb-94

36. THELMA SEBASTIAN

Intramuros

12-Nov-90

17-Nov-93

37. MA. JEANETTE CERVANTES

West

6-Jun-92

7-Dec-93

38. JEANNIE RAMIL

Intramuros

23-Apr-90

12-Oct-93

39. ROZAIDA PASCUAL

Bel-Air

20-Apr-89

29-Oct-93

40. PINKY BALOLOA

West

3-Jun-91

2-Dec-93

41. ELIZABETH VENTURA

West

12-Mar-90

FEB 94 [sic]

42. GRACE S. PARDO

West

4-Apr-90

13-Mar-94

43. RICO TIMOSA

Intramuros

28-Apr-93

28-Oct-93

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence,
this recourse to this Court. 9
The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular
employees under Article 280 of the Labor Code, as amended, Respondent Commission ratiocinated
as follows:
We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
recommendation of civic oriented personalities whose employment[s] were covered
by . . . Employment Contract[s] with special provisions on duration of contract as
specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the
terms of the contract shall be the law between the parties. 10
The NLRC also declared that the Magna Carta for Disabled Persons was not applicable,
"considering the prevailing circumstances/milieu of the case."
Issues
In their Memorandum, petitioners cite the following grounds in support of their cause:
I. The Honorable Commission committed grave abuse of discretion in holding that
the petitioners money sorters and counters working in a bank were not regular
employees.
II. The Honorable Commission committed grave abuse of discretion in holding that
the employment contracts signed and renewed by the petitioners which provide
for a period of six (6) months were valid.
III. The Honorable Commission committed grave abuse of discretion in not applying
the provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on
proscription against discrimination against disabled persons. 11
In the main, the Court will resolve whether petitioners have become regular employees.
This Court's Ruling
The petition is meritorious. However, only the employees, who worked for more than six months and
whose contracts were renewed are deemed regular. Hence, their dismissal from employement was
illegal.
Preliminary Matter:
Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the
NLRC is not allowed in a petition for certiorari. Specifically, it maintains that the Court cannot pass
upon the findings of public respondent that petitioners were not regular employees.
True, the Court, as a rule, does not review the factual findings of public respondents in
a certiorari proceeding. In resolving whether the petitioners have become regular employees, we
shall not change the facts found by the public respondent. Our task is merely to determine whether
the NLRC committed grave abuse of discretion in applying the law to the established facts, as
above-quoted from the assailed Decision.

Main Issue
Are Petitioners Regular Employee?
Petitioners maintain that they should be considered regular employees, because their task as money
sorters and counters was necessary and desirable to the business of respondent bank. They further
allege that their contracts served merely to preclude the application of Article 280 and to bar them
from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as "special workers
and should not in any way be considered as part of the regular complement of the Bank." 12 Rather,
they were "special" workers under Article 80 of the Labor Code. Private respondent contends that it never
solicited the services of petitioners, whose employment was merely an "accommodation" in response to
the requests of government officials and civic-minded citizens. They were told from the start, "with the
assistance of government representatives," that they could not become regular employees because there
were no plantilla positions for "money sorters," whose task used to be performed by tellers. Their
contracts were renewed several times, not because of need "but merely for humanitarian reasons."
Respondent submits that "as of the present, the "special position" that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew anymore their special
employment contracts."
At the outset, let it be known that this Court appreciates the nobility of private respondent's effort to
provide employment to physically impaired individuals and to make them more productive members
of society. However, we cannot allow it to elude the legal consequences of that effort, simply
because it now deems their employment irrelevant. The facts, viewed in light of the Labor Code and
the Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of them,
should be deemed regular employees. As such, they have acquired legal rights that this Court is
duty-bound to protect and uphold, not as a matter of compassion but as a consequence of law and
justice.
The uniform employment contracts of the petitioners stipulated that they shall be trained for a period
of one month, after which the employer shall determine whether or not they should be allowed to
finish the 6-month term of the contract. Furthermore, the employer may terminate the contract at any
time for a just and reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.
1wphi1.nt

According to private respondent, the employment contracts were prepared in accordance with Article
80 of the Labor code, which provides;
Art. 80. Employment agreement. Any employer who employs handicapped
workers shall enter into an employment agreement with them, which agreement shall
include:
(a) The names and addresses of the handicapped workers to be
employed;
(b) The rate to be paid the handicapped workers which shall be not
less than seventy five (75%) per cent of the applicable legal minimum
wage;
(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor
or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the aforecited provision.
Succeeding events and the enactment of RA No. 7277 (the Magna Carta for Disabled
Persons), 13 however, justify the application of Article 280 of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion
that their tasks were beneficial and necessary to the bank. More important, these facts show that
they were qualified to perform the responsibilities of their positions. In other words, their disability did
not render them unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee
should be given the same terms and conditions of employment as a qualified able-bodied person.
Section 5 of the Magna Carta provides:
Sec. 5. Equal Opportunity for Employment. No disabled person shall be denied
access to opportunities for suitable employment. A qualified disabled employee shall
be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified
able-bodied persons, they are thus covered by Article 280 of the Labor Code, which 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 as regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC, 14 in which this Court
held:
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the former

is usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of 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 and merely intermittent, the law deems repeated and continuing
need for its performance as sufficient evidence of the necessity if not indispensibility
of that activity to the business. Hence, the employment is considered regular, but
only with respect to such activity, and while such activity exist.
Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen of them, petitioners performed these tasks for more
than six months. Thus, the following twenty-seven petitioners should be deemed regular employees:
Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert
Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E.
Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero,
Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma
Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth
Ventura and Grace S. Pardo.
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice
of making permanent casuals of our lowly employees by the simple expedient of extending to them
probationary appointments, ad infinitum." 15 The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees' fitness for the job. When the bank
renewed the contract after the lapse of the six-month probationary period, the employees thereby became
regular employees. 16 No employer is allowed to determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their
services may be terminated only for a just or authorized cause. Because respondent failed to show
such cause, 17 these twenty-seven petitioners are deemed illegally dismissed and therefore entitled to
back wages and reinstatement without loss of seniority rights and other privileges. 18 Considering the
allegation of respondent that the job of money sorting is no longer available because it has been assigned
back to the tellers to whom it originally belonged, 18 petitioners are hereby awarded separation pay in lieu
of reinstatement. 20
Because the other sixteen worked only for six months, they are not deemed regular employees and
hence not entitled to the same benefits.
Applicability of the
Brent Ruling
Respondent bank, citing Brent School v. Zamora 21 in which the Court upheld the validity of an
employment contract with a fixed term, argues that the parties entered into the contract on equal footing.
It adds that the petitioners had in fact an advantage, because they were backed by then DSWD Secretary
Mita Pardo de Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that the petitioners
were disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is
based on Article 80 of the Labor Code. But as noted earlier, petitioners proved themselves to
be qualified disabled persons who, under the Magna Carta for Disabled Persons, are entitled to
terms and conditions of employment enjoyed by qualified able-bodied individuals; hence, Article 80
does not apply because petitioners are qualified for their positions. The validation of the limit

imposed on their contracts, imposed by reason of their disability, was a glaring instance of the very
mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with public
interest. 22 Provisions of applicable statutes are deemed written into the contract, and the "parties are not
at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by
simply contracting with each other." 23 Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled Persons, which mandate
that petitioners must be treated as qualified able-bodied employees.
Respondent's reason for terminating the employment of petitioners is instructive. Because the
Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during
business hours from 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting and counting of
money. Thus, it reasons that this task "could not be done by deaf mutes because of their physical
limitations as it is very risky for them to travel at night." 24 We find no basis for this argument. Travelling
at night involves risks to handicapped and able-bodied persons alike. This excuse cannot justify the
termination of their employment.
Other Grounds Cited by Respondent
Respondent argues that petitioners were merely "accommodated" employees. This fact does not
change the nature of their employment. As earlier noted, an employee is regular because of the
nature of work and the length of service, not because of the mode or even the reason for hiring
them.
Equally unavailing are private respondent's arguments that it did not go out of its way to recruit
petitioners, and that its plantilla did not contain their positions. In L. T. Datu v. NLRC, 25 the Court held
that "the determination of whether employment is casual or regular does not depend on the will or word of
the employer, and the procedure of hiring . . . but on the nature of the activities performed by the
employee, and to some extent, the length of performance and its continued existence."
Private respondent argues that the petitioners were informed from the start that they could not
become regular employees. In fact, the bank adds, they agreed with the stipulation in the contract
regarding this point. Still, we are not persuaded. The well-settled rule is that the character of
employment is determined not by stipulations in the contract, but by the nature of the work
performed. 26 Otherwise, no employee can become regular by the simple expedient of incorporating this
condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC: 27
Art. 280 was emplaced in our statute books to prevent the circumvention of the
employee's right to be secure in his tenure by indiscriminately and completely ruling
out all written and oral agreements inconsistent with the concept of regular
employment defined therein. 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.
xxx xxx xxx
At this juncture, the leading case of Brent School, Inc. v. Zamora proves instructive.
As reaffirmed in subsequent cases, 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 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.
In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the
working class, but also the concern of the State for the plight of the disabled. The noble objectives of
Magna Carta for Disabled Persons are not based merely on charity or accommodation, but on
justice and the equal treatment of qualifiedpersons, disabled or not. In the present case, the
handicap of petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this
statement is the repeated renewal of their employment contracts. Why then should they be
dismissed, simply because they are physically impaired? The Court believes, that, after showing
their fitness for the work assigned to them, they should be treated and granted the same rights like
any other regular employees.
In this light, we note the Office of the Solicitor General's prayer joining the petitioners' cause.

28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision
and the August 4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far
East Bank and Trust Company is hereby ORDERED to pay back wages and separation pay to each
of the following twenty-seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante,
Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O.
Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G.
Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma.
Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC
is hereby directed to compute the exact amount due each of said employees, pursuant to existing
laws and regulations, within fifteen days from the finality of this Decision. No costs.
1wphi1.nt

SO ORDERED.