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PHILIPS SEMICONDUCTORS INC.

vs other hand, petitioner contends that
FADRIQUELA Case Digest respondent was not dismissed; her
contract merely expired.
[G.R. No. 141717. April 14, 2004]

PHILIPS SEMICONDUCTORS (PHILS.), INC.,
petitioner, vs. ELOISA FADRIQUELA, The Labor Arbiter and the NLRC based
respondent. their decision on the CBA between the
petitioner and the labor union which
provides that a contractual employee
FACTS: The petitioner Philips would only be considered a regular
Semiconductors is a domestic employee if he has completed 17
corporation engaged in the production months of service and a performance
and assembly of semiconductors such rating of at least 3.0. The respondent
as power devices, RF modules, CATV filed a motion for reconsideration but
modules, RF and metal transistors and the NLRC denied the same. On appeal,
glass diods. It caters to domestic and the CA reversed the decision of the
foreign corporations that manufacture NLRC. Hence, this petition.
computers, telecommunications
equipment and cars. Aside from
contractual employees, the petitioner ISSUE: Whether or not respondent was
employed 1,029 regular workers. The still a contractual employee of the
employees were subjected to periodic company.
performance appraisal based on
output, quality, attendance and work
attitude.[2] One was required to obtain HELD: The SC agreed with the appellate
a performance rating of at least 3.0 for court. Article 280 of the Labor Code of
the period covered by the performance the Philippines was emplaced in our
appraisal to maintain good standing as statute books to prevent the
an employee. circumvention by unscrupulous
employers of the employee’s right to be
secure in his tenure by indiscriminately
Respondent, during her 5 consecutive and completely ruling out all written
contracts, got the following ratings: 3.15, and oral agreements inconsistent with
3.8, 3.4, and 2.8. The reason for her the concept of regular employment
failed mark on the last contract was her defined therein. The language of the
absences. She was then asked to law manifests the intent to protect the
explain such absences but she failed to tenurial interest of the worker who may
do the same. Subsequently, be denied the rights and benefits due a
respondent’s supervisor recommended regular employee because of lopsided
that her employment be terminated agreements with the economically
due to habitual absenteeism. Thus, her powerful employer who can maneuver
contract of employment was no longer to keep an employee on a casual or
renewed. Respondent then filed a temporary status for as long as it is
complaint for illegal dismissal. On the convenient to it. In tandem with Article

281 of the Labor Code, Article 280 was In this case, the original contract of
designed to put an end to the employment had been extended or
pernicious practice of making renewed four times, to the same
permanent casuals of our lowly position, with the same chores. Such a
employees by the simple expedient of continuing need for the services of the
extending to them temporary or respondent is sufficient evidence of the
probationary appointments, ad necessity and indispensability of her
infinitum. services to the petitioner’s business. By
operation of law, then, the respondent
had attained the regular status of her
The two kinds of regular employees employment with the petitioner, and is
under the law are (1) those engaged to thus entitled to security of tenure as
perform activities which are necessary provided for in Article 279 of the Labor
or desirable in the usual business or Code.
trade of the employer; and (2) those
The limited period specified in
casual employees who have rendered
petitioner’s employment contract
at least one year of service, whether
having been imposed precisely to
continuous or broken, with respect to
circumvent the constitutional guarantee
the activities in which they are
on security of tenure should, therefore,
employed. The primary standard to
be struck down or disregarded as
determine a regular employment is the
contrary to public policy or morals. To
reasonable connection between the
uphold the contractual arrangement
particular activity performed by the
would, in effect, permit the former to
employee in relation to the business or
avoid hiring permanent or regular
trade of the employer. The test is
employees by simply hiring them on a
whether the former is usually necessary
temporary or casual basis, thereby
or desirable in the usual business or
violating the employee’s security of
trade of the employer. If the employee
tenure in their jobs.
has been performing the job for at least
one year, even if the performance is not Under Section 3, Article XVI of the
continuous or merely intermittent, the Constitution, it is the policy of the State
law deems the repeated and to assure the workers of security of
continuing need for its performance as tenure and free them from the
sufficient evidence of the necessity, if bondage of uncertainty of tenure
not indispensability of that activity to the woven by some employers into their
business of the employer. Hence, the contracts of employment. The
employment is also considered regular, guarantee is an act of social justice.
but only with respect to such activity When a person has no property, his job
and while such activity exists. The law may possibly be his only possession or
does not provide the qualification that means of livelihood and those of his
the employee must first be issued a dependents. When a person loses his
regular appointment or must be job, his dependents suffer as well. The
declared as such before he can worker should therefor be protected
acquire a regular employee status.

to the unemployed. et al. Such being the case. employees. The ruling in Brent School. It is the express considered a regular employee. petitioner as well as other contractual Petition is denied. The agreement always. to law not only because contractual Indeed. shall be also misplaced. It could not then collective bargaining unit which be said that petitioner and private entered into the CBA with private respondents “dealt with each other on respondent but also because of the more or less equal terms with no moral Labor Code provision on regularization. Pabriga. The contractual employees within its seventeen months provided by the coverage.R. Such a provision runs contrary work as casual or contractual workers. Arias. we see “Minutes of Meeting” is obviously much no reason why an agreement between longer. delaying the regularization every contract without the need for the of contractual employees. The principle is well settled that the representative union and private the law forms part of and is read into respondent. they agree to any terms of an embodied in the “Minutes of Meeting” employment contract just to get between the representative union and employed considering that it is difficult private respondent. Zamora The CBA. No. whether such The petitioner’s reliance on the CBA is service is continuous or broken. Indeed. v. constitutes is also not applicable in this case the law between the parties. should bind parties expressly making reference to it. employee who had rendered at least one year of service. Such because it could not be supposed that being the rule. The mandate of the CBA not to include period set by law is one year. 2013 on the premise that the same contains an exclusionary clause while at the same time invoke a collateral agreement entered into between the FACTS: Private respondents were parties to the CBA to prevent a engaged by petitioner for the latters operations in the Technical Operations . dominance whatever being exercised The law explicitly states that an by the former over the latter. nothing could be more unjust than to exclude contractual GMA Network v. security of employees do not form part of the tenure has no value. during its lifetime. the aforementioned CBA private respondents and all other so. employees from the benefits of the CBA G. Almost bargaining union.and insulated against any arbitrary contractual employee from attaining deprivation of his job. the status of a regular employee. Inc. cannot bind the freedom to starve if they refuse to petitioner. providing that to find work given their ordinary contractual employees shall become qualifications. 176419 : November 27. Their freedom to contract regular employees only after seventeen is empty and hollow because theirs is months of employment. should be binding only upon private called “casual” workers of the petitioner respondent and its regular employees KNOWINGLY and VOLUNTARILY agreed who were duly represented by the to the employment contract.

Center as Transmitter/VTR men. Labor contracts. additional issues of 1) Unfair Labor Practice. employees of petitioner GMA Network. VII Cebu City. entitled to payment of separation pay interchangeably characterize computed at one (1) month salary for respondents employment as project every year of service. finding the respondents as regular employees of the petitioner and 2)the CA erred in awarding separation pay to Private respondents filed an amended the respondents absent a finding that complaint raising the following respondents were illegally dismissed. and 3) Damages and Attorneys fees. we should note that the parties was set but the same proved to nature of the employment is determined be futile. and fixed period/fixed term b) They are not entitled to overtime pay employment. but enshrined in the Constitution to afford held petitioner liable for 13th month full protection to labor. petitioner before the NLRC Regional ISSUES: Whether or not 1) the CA erred in Arbitration Branch No. Regular and casual night shift differential and service employment. HELD: An amicable settlement between the At the outset. as When Petitioner elevated the case to Maintenance staff and as Cameramen. The provisions of written incentive leave pay. and c) They are entitled to 13th month pay. it On July 19 1999 due to the miserable rendered its Decision denying the working conditions private respondents petition for lack of merit. and held that subject to the police power of the State. the CA via a Petition for Certiorari. on the other hand. As such. ARTICLE 280. and holiday pay. Hence. are placed on a higher The NLRC reversed the Decision of the plane than ordinary contracts and are Labor Arbiter. by law. they are Inc. pay. until it ceased to exist. 2) Illegal dismissal. this were forced to file a complaint against present Petition for Review on Certiorari. agreement to the contrary . being imbued with public interest. The supremacy of the law over the nomenclature of the The Labor Arbiter dismissed the contract and the stipulations contained complaint of respondents for illegal therein is to bring to life the policy dismissal and unfair labor practice. a) All complainants are regular employees with respect to the particular Respondents claim that they are regular activity to which they were assigned. The latter. regardless of any contract expressing otherwise.

which provides: the operations center to air commercials. An usually necessary or desirable in the employee who is unjustly dismissed from usual business or trade of the employer. an of regular employment. That. ALU-TUCP v. An employment shall be deemed to be On the other hand. 109902. least one year of service. whether such service is continuous or broken. work shall be entitled to reinstatement except where the employment has without loss of seniority rights and other been fixed for a specific project or privileges and to his full backwages. necessary or desirable in the employers G. undertaking the completion or inclusive of allowances. those The jobs and undertakings are clearly performing activities not usually within the regular or usual business of necessary or desirable in the employers the employer company and are not usual business or trade are casual identifiably distinct or separate from the employees. while. Such a job continue while such activity actually or undertaking must also be identifiably exist. distinction is found in Article 279 of the There is no denying that the manning of Labor Code. as a general rule. The job or undertaking also Pursuant to the above-quoted Article begins and ends at determined or 280 of the Labor Code.notwithstanding and regardless of the ARTICLE 279. In cases oral agreement of the parties. project or seasonal employees. the activities of casual if it is not covered by the project employees may or may not be preceding paragraph: Provided. separate and distinct from the ordinary or regular business operations of the employer.R. 1994 usual business or trade can either be regular. the employer employment shall be deemed to be shall not terminate the services of an regular where the employee has been employee except for a just cause or engaged to perform activities which are when authorized by this Title. usually necessary or desirable in the any employee who has rendered at usual business or trade of the employer. and to his other termination of which has been benefits or their monetary equivalent determined at the time of the computed from the time his engagement of the employee or where compensation was withheld from him the work or services to be performed is up to the time of his actual seasonal in nature and employment is reinstatement. employees determinable times. No. August 2. performing activities which are usually National Labor Relations Commission. acting as transmitter/VTR . shall be The term "project" could also refer to. considered a regular employee with secondly. a particular job or respect to the activity in which he is undertaking that is not within the regular employed and his employment shall business of the corporation. Security of tenure. The consequence of the other undertakings of the company. for the duration of the season.

(Fuji) as a news 2. of tobacco and its by-products. Leonen that it is exempt from payment of separation pay and denied that there was termination of employees' services.R. 204944-45 DECEMBER 3. when Tabacalera took over the Lutorco ARLENE S. Aggrieved. seasonal Abasolo v. NLRC workers are those who are called to Facts: work from time to time and are temporarily laid off during off-season are 1. ESPIRITU operations due to alleged losses. we affirm the findings of the Issue: W/N the petitioners are seasonal NLRC and the Court of Appeals that workers respondents are regular employees of petitioner.men. maintaining the equipment. 2014 complaint for separation pay and dismissal. FACTS: Arlene S. As regular employees. company. they RULING: No. owned by See Lun period but merely considered on-leave Chan is engaged in buying/processing until re-employed. NO. The Labor Arbiter dismissed the correspondent/producer tasked to complaint and held that the petitioners report Philippine news to Fuji through its Manila Bureau field office. The respondent contended J. INC. They performed services terminated only for just or authorized necessary and indispensable to causes. we are constrained to the will or word of the employer nor on affirm the findings of the NLRC and the the procedure of hiring and manner of Court of Appeals that they were illegally designating the employee but on the dismissed. they entitled to separation work to be done. VS. the petitioners are are entitled to security of tenure and considered regular and seasonal therefore their services may be employees. The petitioners worked in respondent company but work was interrupted FUJI TELEVISION NETWORK. the petitioners filed a G. The . The nature of one's any just or authorized cause for their employment does not depend solely on termination. pay in lieu of reinstatement. Inc. In sum. The NLRC the business of a broadcasting affirmed said ruling. Espiritu (Arlene) was engaged by Fuji Television Network. Since petitioner failed to prove Lutorco's business. and are not entitled to separation benefits acting as cameramen are not since Lutorco ceased operations due to undertakings separate or distinct from serious business losses. As held in previous decisions. nature of the activity to be performed considering the employer's nature of Since the respondents were illegally business and the duration and scope of dismissed. The private respondent La Union not separated from service in said Tobacco (Lutorco).

but was successively renewed correctly awarded reinstatement. 280. mid-year bonus determined at the time of the and separation pay. In cases of 1. the employer shall contractor? not terminate the services of an 2. However. and that she was left considered a regular employee with with no other recourse but to sign the respect to the activity in which he is non-renewal contract to get her employed and his employment shall salaries. seasonal in nature and the employment is for the duration of the season. employment shall be deemed to be Arlene insisted she was still fit to work as regular where the employee has been certified by her attending physician. The provisions of written News Agency of Fuji. Arlene filed a complaint for illegal dismissal with the NCR Arbitration An employment shall be deemed to be Branch of the NLRC. continue while such activity exist. Arlene engagement of the employee or where executed the non-renewal contract the work or services to be performed is under protest. Arlene been fixed for a specific project or acknowledged the receipt of the total undertaking the completion or amount of her salary from March-May termination of which has been 2009. Did the Court of Appeals one year. Arlene was diagnosed LAWS: with lung cancer. Was Arlene an independent regular employment. 279. Provided.employment contract was initially for 4. That. Security of tenure. Was Arlene illegally dismissed? when authorized by this Title. alleging that she casual if it is not covered by the was forced to sign the non-renewal preceding paragraph. a non-renewal contract. whether such her salaries and other benefits when she service is continuous or broken. Arlene and Fuji signed usual business or trade of the employer. Regular and casual about her condition. In except where the employment has consideration thereof. Was Arlene a regular employee? employee except for a just cause of 3. on a yearly basis with salary adjustments damages and attorney’s fees? upon every renewal. contract after Fuji came to know of her any employee who has rendered at illness. She informed Fuji Art. an contract considering her condition. ISSUES: Art. An employee who is unjustly dismissed from . agreement to the contrary informed the former that the company notwithstanding and regardless of the had a problem with renewing her oral agreement of the parties. and the Chief of employment. Yoshiki Aoki. engaged to perform activities which are After a series of verbal and written usually necessary or desirable in the communications. In January 2009. She also alleged that Fuji withheld least one year of service. shall be refused to sign. year-end bonus.

the employer shall not renewals of her fixed-term contract terminate his employment unless there is resulted in regular employment. a fraction of at least six (6) The Court of Appeals affirmed that NLRC months being considered as one (1) ruling with modification that Fuji whole year. The Court of Appeals agreed with – Where the employee suffers from a the NLRC that Arlene was a regular disease and his continued employment employee. continuously rendered services that That he is paid separation pay were necessary and desirable to Fuji’s equivalent to at least one (1) month business. Section 8 of the and that she be paid her backwages Omnibus Rules Implementing the Labor and other emoluments withheld from Code. terminate the services of an employee who has been found to be suffering from any disease and whose continued The NLRC reversed the Labor Arbiter’s employment is prohibited by law or is decision and ruled that Arlene was a prejudicial to his health as well as to the regular employee since she health of his co-employees: Provided. the up to the time of his actual employer shall not terminate the reinstatement. CASE HISTORY: Labor Arbiter dismissed the complaint and held that Arlene was not a regular Art. position immediately upon the no employee shall be dismissed. whichever is greater. salary or to one-half (1/2) month salary for every year of service. unless restoration of his normal health. If the disease or ailment can compensation was withheld from him be cured within the period. Disease as a ground for dismissal. immediately reinstate Arlene to her position without loss of seniority rights Book VI. engaged to perform work is prohibited by law or prejudicial to his that was necessary or desirable in the health or to the health of his co. business of Fuji. employee but shall ask the employee to take a leave. 284. The . there are just or authorized causes and only after compliance with procedural and substantive due process is conducted. The employer shall reinstate such employee to his former Thus. and the successive employees. on the right to security of tenure. her. An employer may contractor. and to his other cannot be cured within a period of six benefits or their monetary equivalent (6) months even with proper medical computed from the time his treatment.work shall be entitled to reinstatement a certification by a competent public without loss of seniority rights and other health authority that the disease is of privileges and to his full backwages. Disease as ground for employee but an independent termination. Rule 1. such nature or at such a stage that it inclusive of allowances.

Arlene was illegally she sent an email with another version dismissed because Fuji failed to comply of her non-renewal agreement. or Fuji alleged that Arlene was an 2) It satisfactorily appears that the independent contractor citing the employer and the employee dealt with Sonza case. considering that talent or skill. She was hired because of each other on more or less equal terms with no moral dominance exercised by her skills. Arlene was not an independent any other circumstances vitiating his contractor. to sign the verification. the assigned Fixed Term Employment attorney-in-fact for Fuji. employee. consent. Her salary was higher than the the former or the latter. It also stated that case because Arlene was not Arlene was not forced to sign the non- contracted on account of a special renewal agreement. signed the non-renewal contract Arlene argued (1) that she was a regular under protest as she was left without a employee because Fuji had control and choice. in fact. duress. Arlene filed a manifestation stating that Distinctions among fixed- the SC could not take jurisdiction over term employees. which must be read bargain with her employer. that reporter for Fuji. normal rate. (3) that the successive renewal of her Fuji filed a petition for review on contracts for four years indicated that certiorari under Rule 45 before the her work was necessary and desirable. Supreme Court. (7) that she freely agreed not to renew her she signed the non-renewal agreement fixed-term contract as evidenced by because she was not in a position to her email correspondences. She had the power to These indications. alleging that Arlene was (4) that the payment of separation pay hired as an independent contractor. and regular employees Corazon Acerden. Her contract . Arlene.case of Sonza does not apply in the was for a fixed term. 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force. indicated that she was a regular that Fuji had no control over her work. (6) that her illness was there was no illegal dismissal because not a ground for her dismissal. supervision over her work. independent the case since Fuji failed to authorize contractors. (2) that she based her work on instructions from Fuji. (5) that the Sonza case is not that the employment contracts were applicable because she was a plain renewed upon Arlene’s insistence. reject the same. with the requirements of substantive and procedural due process. RULING: or improper pressure being brought to bear upon the employee and absent 1.

is in a position to make prohibiting or restricting. make the Brent doctrine applicable only in a few special cases XXX wherein the employer and employee The Secretary of Labor and Employment are on more or less in equal footing in may. (GMA Network. (Citations omitted) 155 of this Code. In so market forces. shall be paid in whether such job. work or former’s work. The reason or prohibit the contracting-out of labor for this is evident: when a prospective to protect the rights of workers employee.together. extent as if the latter were directly employed by him. this court will recognize the validity of the fixed-term There is “labor-only” contracting where contract. work One who carries on a distinct and premises. regardless of subcontractor. among others. free from the cases. outside the premises of the principal. Contractor or (c) . and the independent business and undertakes workers recruited and placed by such to perform the job. . Whenever an employer principal agrees to put out or farm out enters into a contract with another with a contractor the performance or person for the performance of the completion of a specific job. 18-A. restrict entering into the contract. on account of special skills or established under this Code. Series of contractors and their principals. or service on its person are performing activities which own account and under one’s own are directly related to the principal responsibility according to one’s own business of such employer. . to prevent any violation or circumvention of any provision of this For as long as the guidelines laid down Code. 2011. Lesser limitations on the parties’ of contracting and determine who freedom of contract are thus required among the parties involved shall be for the protection of the considered the employer for purposes employee. Inc. 106. the person supplying workers to an Pabriga) employer does not have substantial Independent Contractor capital or investment in the form of tools. machineries. Section 3 Art. . he may make demands upon the prospective appropriate distinctions between labor- employer. such prospective employee only contracting and job contracting as needs less protection than the ordinary well as differentiations within these types worker. by appropriate regulations. the person or intermediary shall control and direction of the principal in be considered merely as an agent of all matters connected with the the employer who shall be responsible performance of the work except as to to the workers in the same manner and the results thereof. the employees of the service within a definite or contractor and of the latter’s predetermined period. work. an arrangement whereby a subcontractor. No employer-employee relationship exists between the independent Department Order No. vs. In such manner and method. work or service is to accordance with the provisions of this be performed or completed within or Code. in Brent are satisfied. if any. equipment.

They are so impressed with who engages the contractor’s services. working conditions. Jurisprudence has recognized another kind of independent contractor: In contracts of employment. the relationship protected because of the inequality is bilateral. Article 1700 of the Civil employees of the contractor. it is subject to employees. hours of labor and similar subjects. The labor force is herself performs the work for the a special class that is constitutionally principal. There are different kinds of independent contractors: those engaged in The level of protection to labor should legitimate job contracting and those vary from case to caese. Section 3 of the 1987 This department order also states that Constitution provides full protection to there is a trilateral relationship in labor. collective work for the bargaining.176 This presupposes that the labor force is XXX weak. The level of protection to labor must be Regular Employees determined on the basis of the nature of the work. contractors and their principals. There is no Code states that : The relations between employer-employee relationship capital and labor are not merely between the contractor and principal contractual. There is no trilateral regulatory review by the labor tribunals relationship in this case because the and courts of law. chanRoblesvirtualLawlibrary 162 shop. Thus. wages. qualifications of the Contracts of employment are different employee. such prospective Since no employer-employee employee needs less protection than relationship exists between independent the ordinary worker. and other relevant and have a higher level of regulation circumstances such as but not limited to because they are impressed with public educational attainment and other . When a who have unique skills and talents that prospective employee. interest. is in a employees. Article 13. legitimate job contracting and subcontracting arrangements among Apart from the Constitutional the principal. on account of set them apart from ordinary special skills or market forces. and guarantee. between capital and labor. In other words. contractor. the individuals with unique skills and talents employer and the employee are not on that set them apart from ordinary equal footing. The law serves to independent contractor himself or equalize the unequal. their contracts are governed by the Civil Code provisions on contracts and other applicable laws. relationship between the contractor such contracts are subject to the and workers hired to accomplish the special laws on labor unions. strikes and lockouts. Therefore. public interest that labor contracts must but there is an employer-employee yield to the common good. position to make demands upon the prospective employer. closed principal.

whereas those that control nature of the services rendered and its or fix the methodology and bind or relation to the general scheme under restrict the party hired to the use of such which the business or trade is pursued in means creates the relationship.special qualifications. supplied by the law itself. Arlene was hired by Fuji as a news producer. In appliacation. Fuji had the power to dismiss cannot be independent contractors Arlene. is towards the achievement of a mutually whether the work undertaken is desired result without dictating the necessary or desirable in the usual means or methods to be employed business or trade of the employer. indicated that Fuji had control over her The test in this kind of contract is not the work as she was rquired to report for 8 necessity and desirability of the hours from Monday to Friday. as provided for in her because in fixed-term contracts. especially the regular. It is distinguished from a specific undertaking that is divorced from the normal activities required in . To determine the status of employment. the existence of employer-employee In determining whether an employment relationship must first be settled with the should be considered regular or non- use of the four-fold test. Fuji gave employee’s activities. Arlene could not be an the determining factors. the usual course. the necessity and desirability of their work in the usual course of the employer’s business are Therefore. “but the day her instructions on what to report and certain agreed upon by the parties for even her mode of transportation in the commencement and termination of carrying out her functions was the employment relationship. On the other independent contractor. Arlene was a regular employee with a fixed-term contract.” For controlled. 2. an employment contract. the applicable test is the qualifications for the power to control. a fact creates no employer-employee that can be assessed by looking into the relationship. The contract also employer-employee relationship exists. but there was no evidence that she was hired for her Fuji’s argument that Arlene was an unique skills that would distinguish her independent contractor under a fixed- from ordinary employees. regular employees. hand. Her monthly term contract is contradictory. The Rules that merely serve as guidelines standard. independent contractors do not have employer-employee relationships with their principals. reasonable connection between the particular activity performed by the employee in relation to the usual The distinction is in this guise: business or trade of the employer. salary appeared to be a substantial Employees under fixed-term contracts sum.

camera. Arlene was asked to from Mondays to Fridays. and traveling to the regional month after she informed Fuji of her office in Thailand. the field planning and gathering information. 3. Due process must still be observed. Because of this. that the contract have a “definite date of However. there is no regular upheld. The existence of a fixed-term the facilities of Fuji to accomplish her contract should not mean that there tasks. Arlene was had to do all activities related to news entitled to security of tenure under gathering. or bargained. as long as it was the employee who requested. 8 of the Omnibus Rules Implementing the Labor Code require two requirements to be complied with: (1) Arlene’s contract indicating a fixed term the employee’s disease cannot be did not automatically mean that she cured within six months and his . submission of news and current The manner by which Fuji informed events reports pertaining to the Arlene of non-renewal through email a Philippines. In validity of the fixed-term contract will be this situation. employment. Article 279 of the Labor Code and could be dismissed only for just or authorized A news producer “plans and supervises causaes and after observance of due newscast [and] works with reporters in process. disease as a ground for business. Rule 1. Further. Section right to security of tenure.carrying on the particular business or could never be a regular employee. then the course of business of the employer. For trade. rporting The expiration of the contract does not interviewing subjects in front of a video negate the finding of illegal dismissal. Fuji’s Manila Bureau Office is a small unit213 and has a few employees.” or that the fixed-term where an employee’s work is necessary contract be freely entered into by the but is not always desirable in the usual employer and the employee. Arlene had termination under Article 284 of the become a regular employee with the Labor Code and Book VI. there may be a situation termination. including monitoring and getting news stories. sign a letter of resignation prepared by She had no equipment and had to use Fuji. can be no illegal dismissal.” She also had to illness is tantamount to constructive report for work in Fuji’s office in Manila dismissal. Arlene was illegally dismissed. The successive renewals of her contract indicated the necessity and desirability of her work in the usual course of Fuji’s Moreoever. eight per day. Arlene As a regular employee.

reinstatement. It did ceased operations or that Arlene’s not present any certificate from a position was no longer feasible. serious anxiety. entitled to reinstatement. The ceased operations. It also ordered dismissal was effected “in a wanton. a substantial period has lapsed from blesvirtualLawlibrary date of filing to date of finality.” On the other hand. available. the disease allowed only (1) when the employer has cannot be cured within six months.continued employment is prohibited by including allowances. In the case immediately concluded that Arlene at bar. or is done in a manner contrary to good morals. Nothing competent public health authority. labor. to the health of his co-employees. and (2) certification issued by a competent public health authority that even with Separation pay in lieu of reinstatement is proper medical treatment. she was informed that there The Labor Code provides in Article 279 would be problems in renewing her that illegally dismissed employees are contract on account of her condition. (2) when the burden of proving compliance with employee’s position is no longer these requisites is on the employer. Neither did longer feasible. Fuji did not allege that it it suggest for her to take a leave. Therefore. Moral damages are awarded “when 4. good customs or public The Court of Appeals awarded moral policy. Fuji of the right to reinstatement. The Court of Appeals correctly the dismissal is attended by bad faith or awarded reinstatement. as the grounds when oppressive or malevolent manner. showed that the reinstatement would cause an atmosphere of antagonism in the workplace. The manner of her dismissal was . (3) strained relations. and wounded feelings. and all other law or prejudicial to his health as well as benefits. no evidence was presented by could no longer perform her duties Fuji to prove that reinstatement was no because of chemotherapy. she was not given the chance be strictly applied to avoid deprivation to present medical certificates. Arlene was not accorded due process. backwages This information caused Arlene mental anguish. After Arlene had informed Fuji of her cancer. and (4) compliance leads to illegal dismissal. Arlene was illegally dismissed. separation pay was awarded in lieu of reinstatement were not proven. After informing her employer of her lung The doctrine of strained relations should cancer. Non. fraud or constitutes an act oppressive to damages and attorney’s fees. exemplary and exemplary damages and damages may be awarded when the attorney’s fees.

2006 filed a motion for reconsideration but CA dismissed it. The Labor Arbiter rendered judgment in ABS-CBN vs NAZARENO Case Digest favor of the respondents. against the petitioner before the NLRC. and Lerasan as production assistants (PAs) on different dates. NLRC affirmed the G. Holiday Pay. However. and declared ABS-CBN BROADCASTING that they were regular employees of CORPORATION vs. whose operations revolve around the broadcast. fees is legally and morally justifiablen. the award of attorney’s included to the CBA. Petitioner September 26. Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in Issue: Whether or not the respondents the broadcasting business and owns a were considered regular employees of network of television and radio stations. 1996 to December 11. since petitioner refused employee was forced to litigate and. to recognize PAs as part of the thus. 2000. Sick Leave damages and attorney’s fees were Pay. the employment is considered regular as long as the . 2009. withheld until May 5. transmission. ABS-CBN. Nazareno. respondents filed forced to litigate. regardless of the operations.” Due to her illegal dismissal. It sells and employees of ABS-CBN. they were awarded et al. petitioner and the ABS-CBN Rank- party may be assessed attorney’s fees and-File Employees executed a Collective Bargaining Agreement (CBA) equivalent to ten percent of the to be effective during the period from amount of wages recovered. It has a franchise as a nature of the activity performed. Article 111 of the Labor Code various radio programs in the Cebu states that “[i]n cases of unlawful Broadcasting Station. Premium Therefore. Pay.effected in an oppressive approach operate by the National with her salary and other benefits being Telecommunications Commission. for recovery of wages or where an 1999. and was where the work is continuous or likewise issued a license and authority to intermittent. withholding of wages. the awards for reinstatement. when she had no other choice but to sign the Petitioner employed respondents non-renewal contract. 164156 decision of the Labor Arbiter. incur expenses to protect his rights bargaining unit. Deiparine. It was held that deals in or otherwise utilizes the airtime it where a person has rendered at least generates from its radio and television one year of service. monetary benefits.” In actions December 11. a Complaint for Recognition of Regular Employment Status. On December 19. and relay of Ruling: The respondents are regular telecommunication signals. No. Underpayment of Overtime Pay. and 13th Month Pay with Damages proper. Service Incentive Pay. Gerzon. Arlene was On October 12. the culpable 1996. respondents were not and interest. or broadcasting company. They were assigned With regard to the award of attorney’s at the news and public affairs. MARLYN NAZARENO petitioner as such. for fees.R.

of exercised by petitioner over determining regular employment is the respondents through its supervisors reasonable connection between the negates the allegation that respondents particular activity performed by the are independent contractors. no peculiar or unique skill. the petitioner for continued work. respondents. but Civil Code: “In case of doubt. does can be determined by considering the not furnish an independent business or nature of work performed and its professional service.R. Respondents are highly dependent on In Universal Robina Corporation v.. No. 186439 : JANUARY 15. that activity to the business. if and not an independent contractor. In the MIGUEL ALICOS. independent contractual relationship. therefore.activity exists. The connection worker. the reason being that a department just like any ordinary customary appointment is not employee. talent or celebrity status was required ANDY BANJAO. In the case at bar.” Additionally. ENRICO LITERAL. under Article 1702 of the New employment is considered regular. be construed in favor of the safety and decent living of the laborer. determined or specified at the time of Petitioners. the Moreover. MANUEL BANGOT. a circumstance negating regular status. employee in relation to the usual trade or business of the employer. 2014 presented to show that the duration UNIVERSAL ROBINA SUGAR MILLING and scope of the project were CORPORATION and RENE CABATI. however. FERDINAND ACIBO. respondents cannot be considered as project or program employees because no evidence was G. ROBERTO AGUILAR. such work is a relation to the scheme of the particular regular employment of such employee business or trade in its entirety. ROGELIO AMAHIT. Respondents did not have indispensable before one may be the power to bargain for huge talent formally declared as having attained fees. only talent- repeated and continuing need for its artists were excluded from the CBA and performance as sufficient evidence of not production assistants who are the necessity if not indispensability of regular employees of the respondents. The test is The presumption is that when the work whether the former is usually necessary done is an integral part of the regular or desirable in the usual business or business of the employer and when the trade of the employer. hired through petitioner’s personnel . As the employee has been performing the regular employees. FELIPE BALANSAG. Besides. all labor only with respect to such activity and legislation and all labor contracts shall while such activity exists. DIONISIO BENDIJO. relative to the employer. The Catapang. respondents are job for at least a year. ROMEO BALANSAG. Also. JR. the employer-employee relationship between petitioner and RENE ABELLAR. Hence. their engagement. the Court states that the degree of control and supervision primary standard. even if the entitled to the benefits granted to all performance is not continuous and other regular employees of petitioner merely intermittent. respondents has been proven. from them because they were merely JOVENTINO BROCE. DIOMEDES ALICOS. the law deems under the CBA . v. EDDIE BALDOZA. selection and engagement of LARRY AMASCO.

RODGER RAMIREZ.e. NLRC different capacities. welders. laboratory attendants and aides. 1 month or for a given season. steel workers. and were The CA granted in part the petition. regardless of Bargaining Agreement (CBA). entitlement to the their respective tasks for at least one benefits under the existing Collective year. and granted their dates between 1988 and 1996. out of the 22 original complainants. and whether the performance was attorneys fees. they could not be URSUMCO performing tasks needed by regularized since their respective the latter for the entire year with no . complainants SABLAN. DIOCITO PALAGTIW. for every engagement. not indispensability. and that they were project the CBA covered regular employees of employees. employees because they performed activities which were usually necessary The complainants were employees of and desirable in the usual trade or URSUMCO. NLRC reversed the engaged in the sugarcane milling Labor Arbiter's ruling. i. J. On the claim for complainants were required to perform CBA benefits. it declared the business. and were hired on various business of URSUMCO. BIENVENIDO employments end upon the completion RODRIGUEZ. CA pointed out that operations. however. covered only the regular employees of URSUMCO. drivers. of the activity to The Labor Arbiter pointed out that the URSUMCOs business. as ALLYROBYL OLPUS. provided. employee vis-vis the usual trade or On August 23. BRION. 2002. As the filed before the Labor Arbiter complaints complainants have been performing for regularization. 2002. crane denied petitioners motion for operators. for lack of merit. bucket hookers. It repeatedly hired to perform the same pointed out that the primary standard duties and. reconsideration. RODRIGO were not entitled to the benefits ESTRABELA.. constitutes dismissed the complaint in the decision sufficient evidence of the necessity. The Labor Arbiter continuous or intermittent. if dated October 9.: 7. for determining regular employment is were required to sign new employment the reasonable connection between a contracts for the same duration of one particular activity performed by the month or given season. carpenters. RICHARD PANCHO. mechanics. DANNY KADUSALE and granted under the CBA that. Also. the complainants business of the employer. ERNIE of each project. the CA ruled several projects that were not at all that the complainants were not entitled directly related to URSUMCOs main to receive them. Respondents. FACTS: appealed the Labor Arbiters ruling URSUMCO is a domestic corporation before the NLRC. these same tasks. The complainants signed Court of Appeals (CA) via a petition for contracts of employment for a period of certiorari. Cabati is URSUMCOs Business complainants are regular URSUMCO Unit General Manager. and on monetary claims under the CBA. among Petitioners elevated the case to the others.

Article 280 of the Labor not fall under any of the first two Code also considers regular a casual categories. they were Project employment. coterminous with the project. employment arrangement that does paragraph 2. same tasks or activities for several seasons or even after the cessation of Regular employment refers to that the season. albeit it involves work or service that is seasonal in nature or lasting for the ISSUE: Whether or not the respondents duration of the season. To exclude the are regular employees of URSUMCO? asserted seasonal employee from those HELD: The respondents are regular classified as regular employees. tasked to perform duties regularly and contemplates on arrangement whereby habitually needed in URSUMCO's the employment has been fixed for a operations during the milling season. crane operators and drivers determined at the time of the were necessary to haul and transport engagement of the employee. they constitute a bargaining upon the end or completion of the unit separate and distinct from the project as the employees services are regular employees. The the sugarcane from the plantation to . which are usually necessary or desirable in the usual business or trade of the Casual employment refers to any other employer. namely: regular. the seasonal employees of URSUMCO employer must show that: (1) the employee must be performing work or LABOR LAW : regular seasonal services that are seasonal in nature. The petitioner filed a petition for review Seasonal employment operates much in on certiorari after the CA denied their the same way as project employment. rather. For collective bargaining legally and automatically terminated purposes. completion or termination has been hookers. The phase of URSUMCO's strict milling controlling test in this arrangement is the operations that would ultimately cease length of time during which the upon completion of a particular phase employee is engaged. in the milling of sugar. Hence. this length of time may arrangement whereby the employee likewise serve as badge of regular has been engaged to perform activities employment. employment arrangement when the In the case at bar. the respondents casual employees engagement has were made to perform various tasks that lasted for at least one year.regard to the changing sugar milling services of the project employees are season. By way of an exception. when for three kinds of employment the seasonal workers are continuously arrangements. The specific project or undertaking whose respondents duties as loader operators. regardless did not at all pertain to any specific of the engagements continuity. and employees (2) he had been employed for the Article 280 of the Labor Code provides duration of the season. and repeatedly hired to perform the project/seasonal and casual. motion for partial reconsideration. on the other hand.

et. No. and the respondents are regular seasonal welders. The NLRC acted in grave abuse of On December 1992. the Purefoods Corporation vs. the nature of the employment Corporation to work for a fixed period of depends on the nature of the activities five months at its tuna cannery plant in to be performed by the employee. NLRC. December 12. We also find that the The Labor Arbiter dismissed the CA grossly misread the NLRC ruling and complaint on the ground that the missed the implications of the private respondents were mere . done. representative of the regular and Also. even the their services were terminated. al system of regular seasonal employment G. 122653 in the sugar industry and other industries with a similar nature of operations. to URSUMCO's regular employees. carpenters and utility workers employees. They the CBA between petitioner URSUMCO perform activities that are necessary and the authorized bargaining and desirable in sugarcane production. After the considering the nature of the employers expiration of their respective contracts business. and repeated hiring of the same workers (two different sets) for two separate seasons has put in place. To reiterate. the duration and scope to be of employment in June and July 1991. as distinguished from with respect to their seasonal tasks or the production of the sugarcane which activities and while such activities exist. as the CA itself opined to ensure the smooth and continuous when it declared that private operation of the mill for the duration of respondents who are regular workers the milling season. and. Quitclaim” stating that they had no claim whatsoever against the petitioner.R. and repeatedly hired to perform the Petition for review on certiorari is same tasks year after year. This regular partially granted. Private respondents discretion when it declared the filed before the NLRC a complaint for respondents regular employees of illegal dismissal against the petitioner URSUMCO without qualification and and its plant manager. and laborers to mill the sugar. granted under the CBA.the mill. principally through jurisprudence. workers respondents regularization. the respondents were regularly permanent employees. General Santos City. Tambler. the nature of the employment does not depend solely on FACTS: the will or word of the employer or on the procedure for hiring and the The private respondents (numbering manner of designating the employee. Marciano that they were entitled to the benefits Aganon. in some cases. They length of time of the performance and forthwith executed a “Release and its continued existence. laboratory attendants. involves the planting and raising of the cannot automatically be governed by sugarcane until it ripens for milling. 906) were hired by petitioner Pure Foods Rather. 1997 Therefore.

respective contracts was illegal. the NLRC rendered Ruling: another decision on 30 January 1995 vacating and setting aside its earlier The five-month period specified in decision and held that the private private respondents’ employment respondents and their co-complainants contract is invalid. On private respondents’ motion for reconsideration. although the Court has months was a “clandestine scheme upheld the legality of fixed-term employed by [the petitioner] to stifle employment. duress. and not regular ISSUE: Whether or not the 5-month employees. In any event. and tenurial security by the employee. The employment contract is invalid and is private respondents appealed from the therefore violative of their constitutional decision to the NLRC which affirmed the right to security of tenure. this appeal. Labor Arbiter's decision. they could not avail period specified in private respondents’ of the law on security of tenure. Quitclaim” they had executed wherein None of these criteria had been met in they unconditionally released the the present case. public policy. that the contract of employment for five Zamora. [the petitioner] KNOWINGLY and . the private respondents were It satisfactorily appears that the employed for a period of five months employer and the employee dealt with only. v. It could not be petitioner from any and all other claims supposed that private respondents and which might have arisen from their past all other so-called “casual” workers of employment with the petitioner. or improper view of their express conformity with the pressure being brought to bear upon five-month duration of their the employee and absent any other employment contracts. their dismissal on should be struck down or disregarded as account of the expiration of their contrary to public policy and morals. It declared the leading case of Brent School. hence. Brent also laid down the criteria under Petitioner’s motion for reconsideration which term employment cannot be said was denied. to be in circumvention of the law on Petitioner’s submission before the Court: security of tenure: 1) The fixed period of the private respondents are now employment was knowingly and estopped from questioning their voluntarily agreed upon by the parties separation from petitioner’s employ in without any force. or 2) case. In the instant circumstances vitiating his consent. In were regular employees. the Court also held that [private respondents’] right to security of where from the circumstances it is tenure” and should therefore be struck apparent that the periods have been down and disregarded for being imposed to preclude acquisition of contrary to law. they morals.contractual workers. private respondents' each other on more or less equal terms prayer for reinstatement is well within with no moral dominance exercised by the purview of the “Release and the former or the latter. Inc. Hence. hence.

cost-of. (2) temporary or casual basis. To uphold the employment contract.835. privileges. status of a regular employee. in effect. to be computed establishing a just cause for terminating from the commencement of their employees by the simple expedient of employment up to the closure of the refusing to renew the employment tuna cannery plant. be struck down the instant petition is DISMISSED and the or disregarded as contrary to public challenged decision of 30 January 1995 . and 279 of the Labor Code and the recent (4) that these “casual” employees were jurisprudence. with full back wages computed from the time of dismissal up This scheme of the petitioner was to the time of actual reinstatement. for lack of merit. Also. apparently designed to prevent the without deducting the earnings derived private respondents and the other elsewhere pending the resolution of the “casual” employees from attaining the case. tenure should. itself from the trouble or burden of whichever is higher. it saved half month pay for every year of service. the legal consequence actually doing work that were of illegal dismissal is reinstatement necessary and desirable in petitioner’s without loss of seniority rights and other usual business. tuna cannery plant had. since reinstatement is no right to security of tenure and to other longer possible because the petitioner's benefits like minimum wage. the pay. “casual” workers violating the employees’ security of numbered 1. and 13th month pay. sick leave. (3) that the company hired “casual” every month for the The NLRC was correct in finding that the duration of five months. back wages must be computed from the time the private respondents were The five-month period specified in dismissed until the time petitioner's private respondents’ employment cannery plant ceased operation. thereby that as of July 1991. It was a clear circumvention of the employees’ However. contractual arrangement between the petitioner and the private respondents The petitioner does not deny or rebut would. holiday been closed in November 1994. Indeed. and regular tenure in their jobs. living allowance. Under Article on the same five-month duration. after which their private respondents were regular services were terminated and they were employees and that they were illegally replaced by other “casual” employees dismissed from their jobs. 263. permit the former to private respondents' averments (1) that avoid hiring permanent or regular the main bulk of its workforce consisted employees by simply hiring them on a of its so-called “casual” employees. the proper award is separation pay petitioner succeeded in evading the equivalent to one month pay or one- application of labor laws. employees.VOLUNTARILY agreed to the 5-month policy or morals. admittedly. contracts having been imposed precisely to circumvent the constitutional guarantee on security of Decision: WHEREFORE. The amount of contracts. therefore.

yeast. be said to be in circumvention of the law on security of tenure: Issue: .of the National Labor Relations W/N Romares is a regular employee Commission in NLRC CA No. and Romares Brent School. service. Code should be applied]. After rendering 1 year of which they are employed. employment employee and therefore covered by contracts ranging from two (2) to three security of tenure and cannot be (3) months with an express statement removed except for lawful and valid that his temporary job/service as mason cause as provided by law and after due shall be terminated at the end of the process. See Art 280 The two kinds of regular employees are (1) those who are engaged to perform ROMARES v NLRC and PILMICO FOODS activities which are necessary or CORP desirable in the usual business or trade of the employer. notice Romares’ work with PILMICO as a nor opportunity to be heard. performing the same functions. Romares was reinstated to his said period or upon completion of the former position with backwages. with respect to the activity in Department. ruled subterfuge utilized to prevent his that employee cannot be considered a regularization. whether continuous Maintenance/Projects/Engineering or broken. desirable to its business [production of Executive Labor Arbiter found that flour. employee. M-001323- 93 is hereby AFFIRMED subject to the above modification on the Ruling: computation of the separation pay and back wages. Thus. setting aside ELA’s decision. 1989 to January 15. for a fixed period [paragraph 1 and not It likewise evidenced bad faith on the paragraph 2 of Article 280 of the Labor part of PILMICO. feeds and other flour Romares was employed by PILMOCO products]. It was a clear regular employee if his employment is circumvention of the employees right to for a specific project or undertaking and security of tenure and to other benefits. and (2) those casual Facts: employees who have rendered at least Romares was hired as by PILMICO in its one year of service. Regular. for PILMICO for more than a year. he is already considered a regular In rehiring Romares. project was obtrusively a convenient NLRC. vs Zamora . by virtue of the second par 1993. he had been converted into totaled to over a year’s service [ie 15 a regular employee for having worked mos]. he was mason was definitely necessary and terminated. Even if he were a temporary since September 1. without any justification. in a broken tenure but all in all of Art 280.criteria was validly terminated due to expiration under which term employment cannot of contract of employment. Inc.

There is nothing essentially contradictory between a Rowell Industrial is engaged in definite period of employment and the manufacturing tin cans for use in nature of the employee’s duties. Issue: Standards for valid fixed term employment: Whether respondent was a regular employee (1) the fixed period of employment was knowingly and voluntarily agreed upon Held: by the parties. the (EXCEPTION TO THE RULE ON REGULAR parties are forbidden from agreeing on EMPLOYMENT) a period of time for the performance of Facts: such activities. with no moral dominance exercised by Article 280 of the Labor Code. alleged that upon employment. of the year. which was employees. regardless of their and absent any other circumstances length of service. however. or (2) regular employees by years of • It satisfactorily appears that the service .those employees who perform a upon by the parties without any force.those employees who have employer and the employee dealt with been performing the job. It does not necessarily follow that where the duties of the employee consist of activities Rowell Industrial Corporation vs CA usually necessary or desirable in the usual business of the employer. e. for at least a year. does not proscribe None of these requisites were complied or prohibit an employment contract with. amended. regardless of each other on more or less equal terms the nature thereof.g. duress Under Art 280 regular employees are or improper pressure being brought to classified into: bear upon the employee and absent . Taripe signed a Taripe was employed by petitioner on contract of employment good only for November 8. foods. packaging of consumer products. with a fixed period. as the former or the latter. without any force.• The fixed period of employment (1) regular employees by nature of work was knowingly and voluntarily agreed . 1999 as a “rectangular a period of five months unless the said power press machine operator” Taripe contract is renewed by mutual consent. he was Along with other contractual made to sign a document. among other things. In the case at bar. or improper pressure being desirable in the usual business or trade brought to bear upon the employee of the employer. particular activity which is necessary or duress. paints. he was hired only to meet not explained to him but which was the increase in demand for packaging made a condition for him to be taken in materials for the Christmas season and and for which he was not furnished a to build up stock levels for the early part copy.. vitiating his consent.

in backwages.” In the deducted from the award of such present case. (2) it satisfactorily appears that the 3) 2) As a power press operator. or could be hired. What was Padilla. the weaker party’s salary earned elsewhere (during the participation being reduced to the period of illegal dismissal) should be alternative “to take it or leave it. J. The said employment desirable in the usual business or trade contract neither mentioned that of petitioner RIC. he can hardly be on each other on more or less equal terms equal terms with petitioner RIC. just so he consent. respondent Taripe. as a condition for his hiring. the completion of which rectangular tin cans.” He was a regular 1) The employment contract signed by employee As a rectangular power press respondent Taripe did not mention that machine operator.” was holding a had been determined at the time of his position which is necessary and engagement. need of a job. prepared by backwages because they were not RIC. a rank employer and employee dealt with and file employee. Such actually dismissed but their probationary contract in which the terms are employment was not converted to prepared by only one party and the permanent employment. was compelled to agree to the contract. computation thereof contract of adhesion. including the five- . Thus. and (b) other party merely affixes his signature assuming that petitioners are entitled to signifying his adhesion thereto is called backwages. NLRC (1996) of the Christmas season as purposely claimed by petitioner RIC. stipulated in the said contract was that FACTS: Taripe’s employment was contractual for the period of five months. Private respondent moves to reconsider the earlier decision of the Supreme 2) Also RIC failed to controvert the claim Court First Division on grounds that (a) that Taripe was made to sign the petitioners are not entitled to recover contract of employment. and that on equal footing. in charge of he was hired only for a specific manufacturing covers for “four liters undertaking. employment contract just to get employed considering that it is difficult Application of these standards to this to find work given their ordinary case: qualifications. being exercised by the former on the employees agree to any terms of an latter. he was a seasonal in nature and that his regular employee. employment was only for the duration BUSTAMANTE vs. which was the respondent Taripe’s services were manufacture of tin cans. As the with no moral dominance whatever Court of Appeals said. “almost always.It is an agreement should not start from cessation of work in which the parties bargaining are not up to actual reinstatement.any other circumstances vitiating his month period of employment.

dismissed employee shall be entitled “to HISTORY: his back wages computed from the time his compensation was withheld Pre-Labor Code from him up to the time of his Under RA 875. 875. the 3-year rule formulated by Therefore. as amended. including the discretion to dismissal. must still earn a living to reduce such award of backwages support himself and family. 279. monetary equivalent. the employee's employment in other establishments during. where their full backwages. from the time their actual compensation was withheld on Post-Labor Code them up to the time of their actual Art. No. inclusive of backwages are always computed for allowances and other benefits or their the fixed period of 3 years. Index animi sermo est. while his whatever earnings were obtained by backwages have to be paid by the the employee elsewhere during the employer as part of the price or penalty period of his illegal dismissal (Itogon- he has to pay for illegally dismissing his Suyoc ruling).A. Under Art. or the HELD: probability that the employee could have realized net earnings from outside The prevailing rule is that backwages to employment if he had exercised due be awarded to an illegally dismissed diligence to search for outside employee. A permutation of the aforementioned rule. the CIR increased or compensation was withheld up to diminished the award of backpay. while amount from the employee's litigating the legality (illegality) of his backwages. the Mercury Drug rule depending on several circumstances. attempted or strained interpretation. petitioners are entitled on Teehankee was adopted.” discretion to determine the amount of Despite the express provision that it backwages. qualifications should be awarded to an plain and free from ambiguity and. for the therefore. the good faith of the computed? employer.ISSUE: How should backwages be among them. Thus. In labor cases decided reduced by the earnings derived by him during the effectivity of R. must be applied without purposes of expediency. . The underlying reason of this upheld the CIR's authority to deduct any ruling is that the employee. Then came the Mercury Drug ruling. the CIR was given wide reinstatement. illegally dismissed employee. 279 provided that an unjustly reinstatement. the where the Court ruled that a fixed provision handling for "full backwages" amount of backwages without further to illegally dismissed employees is clear. should not be diminished or employment. employee. the period of illegal dismissal. in the exercise of its should be computed from the time jurisdiction. reinstatement. the elsewhere during the period of his illegal Supreme Court acknowledged and dismissal.

where the total reinstatement. without any deductions amount derived from employment or limitatations as to period/amount. The rationale in took effect. the Pines City case. This added “other benefits” to unjust enrichment by the employee at the computation of backwages. and adopts as a general rule that employees are entitled In 1993. Republic Act No. amending the Art.with the 3-year constant was still elsewhere by the employee from the applied. the Court in the Pines City to full backwages from the time it was Educational Center went back to the withheld up to the time of pre-Mercury Drug rule. 6715 deducted therefrom. which the expense of the employer. . should also be computed from the time compensation was withheld up to In the present case. 279 of allowing the deduction was to prevent the LC. if any. the Court overrules reinstatement. should be On March 1989. date of dismissal up to the date of reinstatement.