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Topic: How to construe the proviso

Petitioners were employed by respondent National Steel Corporation (NSC) in
connection with its Five Year Expansion Program (FAYEP I & II) for varying lengths of
time. Subsequently, they filed before the NLRC, separate complaints for unfair
labour practice, regularization and monetary benefits. The Labor Arbiter decided the
said complaints in declaring petitioners "regular project employees who shall
continue their employment as such for as long as such project/activity exists," but
entitled to the salary of a regular employee pursuant to the provisions in the
collective bargaining agreement. It also ordered payment of salary differentials.

Both the herein petitioners and respondent NSC appealed the decision.
Petitioners contending that they were regular employees. On the other hand, the
NSC claims that they are only project employees. The NLRC then decided the case
by declaring petitioners as project employees.

Hence, this petition in which petitioner claims that they were already
qualified as regular employees of the NSC in view of their service to the latter for 6
years. This contention is based on Article 280 of the Labor Code which reads in full:

Art. 280. Regular and Casual Employment The provisions of the written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, and 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

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 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 actually exists.
(Emphasis supplied)

Issue: Whether petitioners are considered as regular employees of the herein

private respondent.

Rulin: No. In the case of Mercado, Sr. vs. National Labor Relations Commission,
this Court ruled that the proviso in the second paragraph of Article 280 relates only
to casual employees and is not applicable to those who fall within the definition of
said Article's first paragraph, i.e., project employees. The familiar grammatical rule
is that a proviso is to be construed with reference to the immediately preceding part
of the provision to which it is attached, and not to other sections thereof, unless the
clear legislative intent is to restrict or qualify not only the phrase immediately
preceding the proviso but also earlier provisions of the statute or even the statute
itself as a whole. No such intent is observable in Article 280 of the Labor Code,
which has been quoted earlier. In this case, the Court declared the petitioners as
project employees, hence, they are not covered with the 1-year provision under
Article 280 which is only applicable to casual employees.