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Project Employee vs Regular Employee

ALCATEL PHILIPPINES, INC., and YOLANDA DELOS REYES, Petitioners, versus RENE R. RELOS, Respondent,
G.R. No. 164315, 2009 July 3, 1st Division

CARPIO, J.:

The Case

Before the Court is a petition for review [1] of the 31 March 2004 Decision [2] and 14 June 2004
Resolution [3] of the Court of Appeals in CA-G.R. SP No. 75965. In its 31 March 2004 Decision, the Court
of Appeals set aside the 20 February 2002 Decision [4] of the National Labor Relations Commission
(NLRC) and reinstated the 24 September 1998 Decision [5] of the Labor Arbiter which declared
respondent Rene R. Relos (respondent) a regular employee of petitioner Alcatel Philippines, Inc.
(Alcatel). In its 14 June 2004 Resolution, the Court of Appeals denied the motion for reconsideration of
Alcatel and petitioner Yolanda Delos Reyes (petitioner Delos Reyes).

The Facts

Alcatel is a domestic corporation primarily engaged in the business of installation and supply of
telecommunications equipment. Petitioner Delos Reyes was a former Administrative Officer of Alcatel.

On 4 January 1988, Alcatel offered respondent “temporary employment as Estimator/Draftsman – Civil


Works to assist in the preparation of manholes and conduit design for the proposal preparation for PLDT
X-5 project for the period 4 January 1988 to 28 February 1988.”[6] On 1 March 1988, Alcatel again
offered respondent “temporary employment as Estimator/Draftsman to assist in the PLDT’s X-4 IOT
project for the period 1 March 1988 to 30 April 1988.”[7]

Subsequently, Alcatel undertook the PLDT 1342 project (project) which involved the installation of
microwave antennas and towers in Eastern Visayas and Eastern Mindanao for the Philippine Long
Distance Company. On 1 February 1991, Alcatel offered respondent “temporary employment as Civil
Works Inspector, to assist in the implementation of the PLDT 1342 Project, for the period 1 February
1991 to 31 March 1991.”[8] Upon the expiration of his contract, respondent was again offered
temporary employment this time as Civil Works Engineer from 1 April 1991 to 30 September 1991.[9]
Respondent was offered temporary employment in the same capacity five more times from 1 October
1991 to 31 July 1992.[10] Then, on 1 August 1992, Alcatel hired respondent as “project employee for
the PLDT 1342 project to work as Civil Engineer from the period of 1 August 1992 to 31 July 1993.”[11]
Alcatel renewed respondent’s contract twice from 1 August 1993 to 31 December 1993.[12] In a letter
dated 22 December 1993,[13] Alcatel informed respondent that the civil works portion of the project
was near completion; however, the remaining works encountered certain delays and had not been
completed as scheduled. Alcatel then extended respondent’s employment for another three months or
until 31 March 1994. Thereafter, Alcatel employed respondent as a Site Inspector until 31 December
1995.[14]

On 11 December 1995, Alcatel informed respondent that the project would be completed on 31
December 1995 and that his contract with Alcatel would expire on the same day.[15] Alcatel asked
respondent to settle all his accountabilities with the company and advised him that he would be called if
it has future projects that require his expertise.
In March 1997, respondent filed a complaint for illegal dismissal, separation pay, unpaid wages, unpaid
overtime pay, damages, and attorney’s fees against Alcatel. Respondent alleged that he was a regular
employee of Alcatel and that he was dismissed during the existence of the project.

In its 24 September 1998 Decision, the Labor Arbiter declared that respondent was a regular employee
of Alcatel. The Labor Arbiter also ruled that respondent was illegally dismissed and, therefore, entitled
to back wages. The Labor Arbiter’s Decision provides:

WHEREFORE, premises considered, judgment is hereby rendered, finding that [sic] complainant to be a
regular employee and finding further that [sic] complainant to have been illegally dismissed from
employment and ordering respondents, jointly and severally, to pay complainant the following:

1. Backwages from the time he was illegally dismissed until his actual reinstatement in the amount of
THREE HUNDRED FORTY EIGHT THOUSAND PESOS (P348,000.00). The award of backwages shall be re-
computed once this decision has become final;

2. Money claims in the total amount of FOURTEEN THOUSAND TWO HUNDRED FORTY PESOS
(P14,240.00);

3. Attorney’s fees of ten (10%) percent of the total monetary award.

SO ORDERED.[16]

Alcatel appealed to the NLRC.

In its 20 February 2002 Decision, the NLRC reversed the Labor Arbiter’s Decision and dismissed
respondent’s complaint for illegal dismissal. The NLRC declared that respondent was a project
employee and that respondent was not illegally dismissed but that his employment contract expired.

Respondent filed a motion for reconsideration. In its 19 December 2002 Order,[17] the NLRC denied
respondent’s motion.

Respondent appealed to the Court of Appeals.

In its 31 March 2004 Decision, the Court of Appeals set aside the NLRC’s Decision and reinstated the
Labor Arbiter’s Decision.

Alcatel filed a motion for reconsideration. In its 14 June 2004 Resolution, the Court of Appeals denied
Alcatel’s motion.

Hence, this petition.

The Ruling of the Labor Arbiter

The Labor Arbiter declared that, since respondent was repeatedly hired by Alcatel, respondent
performed functions that were necessary and desirable in the usual business or trade of Alcatel. The
Labor Arbiter concluded that respondent belonged to the “work pool of non-project employees” of
Alcatel.

As to the project, the Labor Arbiter noted that respondent’s employment contracts did not specify the
project’s completion date. The Labor Arbiter said that a short extension of respondent’s employment
contract was believable, but an extension up to 1995, when respondent was originally engaged only
from 1 February to 31 March 1991, was unbelievable. The Labor Arbiter also said that Alcatel’s
unsubstantiated claim, that the project was merely extended for “unavoidable causes,” was absurd. The
Labor Arbiter concluded that there was really no fixed duration of the project and that Alcatel used the
periods of employment as a facade to show that respondent was only a project employee.

The Ruling of the NLRC

The NLRC set aside the Labor Arbiter’s ruling and declared that respondent was a project employee. The
NLRC said respondent was assigned to carry out a specific project or undertaking and the duration of his
services was always stated in his employment contracts. The NLRC also pointed out that, by the nature
of Alcatel’s business, respondent would remain a project employee regardless of the number of projects
for which he had been employed. Since respondent was a project employee, the NLRC said he was not
illegally dismissed, but that his dismissal was brought about by the expiration of his employment
contract.

The Ruling of the Court of Appeals

The Court of Appeals set aside the NLRC’s decision and reinstated the Labor Arbiter’s ruling. The Court
of Appeals declared that respondent was a regular employee of Alcatel because (1) respondent was
assigned to positions and performed tasks that were necessary to the main line and business operations
of Alcatel; (2) respondent was repeatedly hired and contracted, continuously and for prolonged periods,
with his employment contracts renewed each time they fell due; and (3) Alcatel did not report the
termination of the projects with the nearest public employment office. The Court of Appeals also said
that, although respondent’s employment contracts specified that he was being engaged for a specific
period, there was no clear provision on the actual scope of the project for which respondent was
engaged or the actual length of time that the project was going to last. The Court of Appeals concluded
that Alcatel imposed the periods of employment to preclude respondent from acquiring tenurial
security.

The Issues

Alcatel raises the following issues:

1. Whether respondent was a regular employee or a project employee; and


2. Whether respondent was illegally dismissed.

The Ruling of the Court

The petition is meritorious.

Alcatel argues that respondent was a project employee because he worked on distinct projects with the
terms of engagement and the specific project made known to him at the time of the engagement.
Alcatel clarifies that respondent’s employment was coterminous with the project for which he was hired
and, therefore, respondent was not illegally dismissed but was validly dismissed upon the expiration of
the term of his project employment. Alcatel explains that its business relies mainly on the projects it
enters into and thus, it is constrained to hire project employees to meet the demands of specific
projects.

On the other hand, respondent insists that he is a regular employee because he was assigned by Alcatel
on its various projects since 4 January 1988 performing functions desirable or necessary to Alcatel’s
business. Respondent adds that his employment contracts were renewed successively by Alcatel for
seven years. Respondent contends that, even assuming that he was a project employee, he became a
regular employee because he was re-hired every termination of his employment contract and he
performed functions necessary to Alcatel’s business. Respondent also claims that he was illegally
dismissed because he was dismissed during the existence of the project.

The principal test for determining whether a particular employee is a project employee or a regular
employee is whether the project employee was assigned to carry out a specific project or undertaking,
the duration and scope of which were specified at the time the employee is engaged for the project.[18]
“Project” may refer to a particular job or undertaking that is within the regular or usual business of the
employer, but which is distinct and separate and identifiable as such from the undertakings of the
company. Such job or undertaking begins and ends at determined or determinable times.[19]

In our review of respondent’s employment contracts, we are convinced that respondent was a project
employee. The specific projects for which respondent was hired and the periods of employment were
specified in his employment contracts. The services he rendered, the duration and scope of each
employment are clear indications that respondent was hired as a project employee.

We do not agree with respondent that he became a regular employee because he was continuously
rehired by Alcatel every termination of his contract. In Maraguinot, Jr. v. NLRC,[20] we said:

A project employee or a member of a work pool may acquire the status of a regular employee when
the following concur:

1) There is a continuous rehiring of project employees even after the cessation of a project; and

2) The tasks performed by the alleged “project employee” are vital, necessary and indispensable to the
usual business or trade of the employer.[21] (Emphasis ours)

While respondent performed tasks that were clearly vital, necessary and indispensable to the usual
business or trade of Alcatel, respondent was not continuously rehired by Alcatel after the cessation of
every project. Records show that respondent was hired by Alcatel from 1988 to 1995 for three projects,
namely the PLDT X-5 project, the PLDT X-4 IOT project and the PLDT 1342 project. On 30 April 1988,
upon the expiration of respondent’s contract for the PLDT X-4 IOT project, Alcatel did not rehire
respondent until 1 February 1991, or after a lapse of 33 months, for the PLDT 1342 project. Alcatel’s
continuous rehiring of respondent in various capacities from February 1991 to December 1995 was done
entirely within the framework of one and the same project, The PLDT 1342 project. This did not make
respondent a regular employee of Alcatel as respondent was not continuously rehired after the
cessation of a project. Respondent remained a project employee of Alcatel working on the PLDT 1342
project.
The employment of a project employee ends on the date specified in the employment contract.
Therefore, respondent was not illegally dismissed but his employment terminated upon the expiration
of his employment contract. Here, Alcatel employed respondent as a Site Inspector until 31 December
1995.

WHEREFORE, we GRANT the petition. We SET ASIDE the 31 March 2004 Decision and 14 June 2004
Resolution of the Court of Appeals and REINSTATE the 20 February 2002 Decision and 19 December
2002 Order of the National Labor Relations Commission.

BELLE CORPORATION, Petitioner, vs ARTURO N. MACASUSI, Respondent.


G.R. No. 168116 April 22, 2008

Present:
QUISUMBING, J., Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.

DECISION
QUISUMBING, J.:

The instant petition seeks to annul the Decision[1] dated August 31, 2004, as well as the Resolution[2]
dated May 10, 2005, of the Court of Appeals in CA-G.R. SP No. 76648. The appellate court modified the
Decision[3] dated October 15, 2002 of the National Labor Relations Commission (NLRC) and ordered
petitioner to pay respondent separation pay equivalent to one month salary for every year of service,
and full backwages from the time he was illegally dismissed on June 21, 1999, until finality of the
decision.

In September 1997, petitioner Belle Corporation employed respondent Arturo N. Macasusi as a grader
operator of a Caterpillar-14G in its Tagaytay Midlands Golf Course.

On June 10, 1999, while respondent was operating the equipment, he heard a loud cracking sound
followed by several cracking sounds. He stopped the equipment and called the mechanic from the
Motor Pool. On the same day, he was issued a Disciplinary Action Form [4] and required to explain in
writing why the equipment broke.

On June 21, 1999, respondent received a Memorandum [5] containing the findings of Rodolfo Vocal, the
Motor Pool Supervisor. Vocal reported that the damage to the equipment was caused by the sudden
and severe shifting of the gear from forward to reverse and vice versa while it was in motion. Once the
gear is damaged, the operator would hear a loud sound warning him to stop the equipment. Thereupon,
petitioner found respondent guilty of gross negligence and dismissed him from employment effective
July 1, 1999.
Respondent filed a complaint [6] for illegal dismissal, non-payment of wages, premium pay for holiday
and rest day, separation pay, holiday pay, service incentive leave pay and 13th month pay with prayer
for attorney’s fees. He alleged that there was no basis for finding him guilty of gross negligence.

Petitioner countered that respondent was guilty of gross negligence since he continued operating the
equipment although he heard the warning sounds. It added that the requisite element of habitually may
be disregarded since respondents negligence caused it to suffer P504,000 as actual damages.

On August 1, 2001, Labor Arbiter Pablo C. Espiritu, Jr. rendered a Decision [7] in respondents favor. First,
he ruled that the mechanical failure could not be attributed solely to respondent since other factors
such as ordinary wear and tear and use by other grader operators must be considered. There was no
evidence also that respondent operated the equipment wantonly and without the slightest care.
Second, he noted that the penalty of dismissal was too harsh since this was respondent’s first offense.
To be a just cause for dismissal, the employee’s negligence must be both gross and habitual. Third, he
held that respondent was a regular and not a project employee for the following reasons: (1)
respondent was employed since 1997 and there was no proof that his employment was co-terminous
with any project; (2) petitioner failed to show that upon the termination of respondents project
employment, the same was reported to the Department of Labor and Employment (DOLE); and (3)
respondents job assignment did not indicate that he was a project employee. In sum, Labor Arbiter
Espiritu disposed, as follows:

WHEREFORE, judgment is hereby rendered ordering respondent Corporation to pay complainant full
backwages and separation pay in lieu of reinstatement to the amounts of P234,000.00 and P18,720.00,
respectively.

Respondent is further ordered to pay complainant proportionate 13th month pay and service incentive
leave in the amounts of P4,680.00 and P1,800.00, respectively.

The [complaint] for holiday pay, unpaid wages, and premium pay for holiday and rest day are hereby
disallowed for want of merit.

SO ORDERED.[8]

On appeal, the NLRC affirmed in toto the decision of the Labor Arbiter. [9] Petitioner filed a petition for
certiorari with the Court of Appeals contending that the NLRC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when it ruled that respondent was illegally dismissed and
entitled to separation pay, service incentive leave pay, 13th month pay and full backwages.

In dismissing the petition, the Court of Appeals ruled that, first, under Article 282 (b)[10] of the Labor
Code, negligence must be both gross and habitual to justify the dismissal of an employee. In this case,
there was lack of substantial evidence to prove that respondent was guilty of gross negligence. While
respondent heard a loud cracking sound, there was doubt when he heard the succeeding cracking
sounds. These may have come immediately after the first, such that there was not enough time to stop
the equipment immediately. Any doubt should be considered in respondents favor. Second, petitioner
never denied respondent’s allegation that the equipment was replaced in April 1999 since it was already
old and not functioning properly. Third, respondent was entitled to separation pay and backwages since
he was a regular and not a project employee. There was no proof that he was hired as a project
employee in September 1997. His job assignment did not even indicate that his employment was for a
specific project. There was also no evidence that upon the termination of respondent’s project
employment, the same was reported to the DOLE. Thus, the appellate court ordered:

WHEREFORE, premises considered, the instant petition is DENIED. The decision of the National Labor
Relations Commission dated 15 October 2002 affirming the finding of illegal dismissal and granting
monetary awards to private respondent Macasusi is MODIFIED in that petitioner is ordered to pay
private respondent Macasusi separation pay equivalent to one (1) month salary for every year of
service, a fraction of at least six (6) months being considered as one (1) whole year, and full backwages
from the time of his illegal dismissal on 21 June 1999 until the finality of the decision favoring private
respondent.

SO ORDERED.[11]

Petitioner now submits the following issues for our consideration:

I.

THE COURT OF APPEALS DECIDED THE CASE IN A WAY NOT IN ACCORD WITH LAW AND APPLICABLE
DECISIONS OF THE SUPREME COURT BY NOT HOLDING THAT

A. RESPONDENT WAS A PROJECT EMPLOYEE, CONSIDERING THAT

1. RESPONDENTS WRITTEN CONTRACT FOR PROJECT EMPLOYMENT WAS NEVER DISPUTED;

2. RESPONDENT PRAYED FOR UNPAID WAGES FOR THE PERIOD BEGINNING 01 JULY 1999 (TIME OF
HIS DISMISSAL) UNTIL 16 JULY 1999 (LAST DAY OF PROJECT EMPLOYMENT) ONLY;

3. NON-COMPLIANCE WITH DEPARTMENT ORDER NO. 19 DOES NOT PROVIDE CONCLUSIVE EVIDENCE
OF REGULAR EMPLOYMENT; AND

4. EMPLOYMENT FOR SUCCESSIVE PERIODS DOES NOT PROVIDE CONCLUSIVE EVIDENCE OF REGULAR
EMPLOYMENT.

B. RESPONDENT WAS LEGALLY DISMISSED, CONSIDERING THAT

1. RESPONDENTS GROSS NEGLIGENCE WAS SUFFICIENTLY ESTABLISHED BY SUBSTANTIAL EVIDENCE;

2. RESPONDENTS ACTS CONSTITUTE GROSS NEGLIGENCE UNDER PREVAILING LAW AND


JURISPRUDENCE; AND

3. THE BASIS FOR THE COURT OF APPEALS FINDING WAS ARBITRARY AND BASED ON MERE
ASSUMPTION AND CONJECTURE, WITHOUT ANY EVIDENCE TO SUPPORT THE SAME.

C. RESPONDENT WAS ENTITLED TO SEPARATION PAY AND FULL BACKWAGES, CONSIDERING THAT

1. RESPONDENT DID NOT PRAY FOR SEPARATION PAY, REINSTATEMENT NOR FULL BACKWAGES; AND
2. RESPONDENT WAS LEGALLY DISMISSED.

II.

PETITIONER IS ENTITLED TO THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER AND/OR WRIT OF


PRELIMINARY INJUNCTION.[12]

Simply, the issues are: (1) Was respondent a project employee? and (2) Was respondent legally
dismissed on the ground of gross negligence?

The petition must fail.

At the outset, it must be stressed that the issues raise questions of fact which are not proper subjects of
a petition for review on certiorari under Rule 45 of the Rules of Court. It is axiomatic that in an appeal by
certiorari, only questions of law may be reviewed. [13] Furthermore, factual findings of administrative
agencies that are affirmed by the Court of Appeals are conclusive on the parties and not reviewable by
this Court. This is so because of the special knowledge and expertise gained by these quasi-judicial
agencies from presiding over matters falling within their jurisdiction. So long as these factual findings are
supported by substantial evidence, this Court will not disturb the same. [14]

In this case, the Labor Arbiter, the NLRC and the Court of Appeals were unanimous in their factual
conclusions that respondent was a regular and not a project employee. When petitioner employed
respondent in September 1997, there was no indication that he was merely a project employee.
Petitioner never presented respondents employment contract for the alleged specific project.
Meanwhile, respondent’s job assignment [15] did not indicate that he was a project employee nor that
his employment was co-terminous with a specific project. What petitioner should have done was to
present respondents successive employment contracts for the different projects or phases thereof for
which he was employed. Notably, petitioner presented only respondents latest contract of employment
for March to July 1999.[16] Petitioner also failed to show that it reported to the DOLE respondents
dismissal after the completion of each project or any phase thereof, in which he was employed. Since
respondent had provided petitioner with continuous and uninterrupted services since September 1997,
we see his latest contract of employment for March to July 1999 as a mere subterfuge to prevent him
from acquiring regular status and deriving benefits therefrom.

On the other hand, the Labor Arbiter, the NLRC and the Court of Appeals were unanimous in their
findings that respondent was illegally dismissed on the ground of gross negligence.

Under Article 282 (b) of the Labor Code, negligence must be both gross and habitual to justify the
dismissal of an employee. As borne out by the records, there was lack of substantial evidence to prove
that respondent was grossly negligent. Petitioner failed to submit evidence to disprove respondent’s
allegation that the equipment was replaced in April 1999 since it was already old and not functioning
properly. Neither did it show that the equipment was operated solely by respondent so as to attribute
the equipments failure to him. Thus, the mechanical failure could have been brought about by factors
such as ordinary wear and tear and use by other grader operators. Furthermore, there was no evidence
that respondent operated the equipment without even the slightest care. While respondent heard a
loud cracking sound, there was doubt when he heard the succeeding cracking sounds. These may have
come immediately after the first such that there was not enough time to stop the equipment
immediately. In any event, respondent stopped the equipment after the succeeding sounds.

Having considered and viewed all arguments in proper perspective, we reiterate the principle that any
doubt should be resolved in favor of the employee, in keeping with the principle of social justice
enshrined in our Constitution.[17]

WHEREFORE, the instant petition is DENIED. The Decision dated August 31, 2004, as well as the
Resolution dated May 10, 2005 of the Court of Appeals in CA-G.R. SP No. 76648 is AFFIRMED. Costs
against petitioner.

POSEIDON FISHING vs NLRC Case Digest


[G.R. No. 168052 February 20, 2006]

POSEIDON FISHING/TERRY DE JESUS, petitioners,- versus - NATIONAL LABOR RELATIONS COMMISSION


and JIMMY S. ESTOQUIA, Respondents.

FACTS: Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five
years, he was promoted to Boat Captain. In 1999, petitioners, without reason, demoted respondent
from Boat Captain to Radio Operator of petitioner Poseidon. As a Radio Operator, he monitored the
daily activities in their office and recorded in the duty logbook the names of the callers and time of their
calls.

On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he
was able to record the same in the other logbook. Consequently, when he reviewed the two logbooks,
he noticed that he was not able to record the said call in one of the logbooks so he immediately
recorded the 7:25 a.m. call after the 7:30 a.m. entry. Around 9:00 o’clock in the morning of 4 July 2000,
petitioner Jesus, the manager, detected the error in the entry in the logbook. Subsequently, she asked
private respondent to prepare an incident report to explain the reason for the said oversight.

At around 2:00 o’clock in the afternoon of that same day, petitioner Poseidon’s secretary, summoned
private respondent to get his separation pay amounting to Fifty-Five Thousand Pesos (P55, 000.00).
However, he refused to accept the amount as he believed that he did nothing illegal to warrant his
immediate discharge from work.

Private respondent then filed a complaint for illegal dismissal with the Labor Arbiter. He averred that
petitioner Poseidon employed him as a Chief Mate sometime in January 1988. He claimed that he was
promoted to the position of Boat Captain five years after. However, in 1999, he was demoted from Boat
Captain to Radio Operator without any reason and shortly, he was terminated without just cause and
without due process of law.

Conversely, petitioners Poseidon and Terry de Jesus strongly asserted that private respondent was a
contractual or a casual employee whose services could be terminated at the end of the contract even
without a just or authorized cause in view of Article 280 of the Labor Code. Petitioners further posited
that when the private respondent was engaged, it was made clear to him that he was being employed
only on a “por viaje” or per trip basis and that his employment would be terminated at the end of the
trip for which he was being hired. As such, the private respondent could not be entitled to separation
pay and other monetary claims.

ISSUE: Whether or not respondent Estoquia is a regular employee of petitioner.

HELD: The SC held that the ruling in the Brent case could not apply in the case at bar. The acid test in
considering fixed-term contracts as valid is: if from the circumstances it is apparent that periods have
been imposed to preclude acquisition of tenurial security by the employee, they should be disregarded
for being contrary to public policy. The SC will not hesitate to nullify employment contracts stipulating a
fixed term after finding that the purpose behind these contracts was to evade the application of the
labor laws, since this is contrary to public policy.

Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, note
that in the case at bar, the terms of employment of private respondent as provided in the Kasunduan
was not only vague, it also failed to provide an actual or specific date or period for the contract. There is
nothing in the contract that says complainant, who happened to be the captain of said vessel, is a
casual, seasonal or a project worker. The date July 1 to 31, 1998 under the heading “Pagdating” had
been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of
the status of employment of the crew of the vessel.

Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent
was repeatedly hired as part of the boat’s crew and he acted in various capacities onboard the vessel.
The test to determine whether employment is regular or not is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or trade of the employer.
And, if the employee has been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability of that activity to the
business. Ostensibly, in the case at bar, at different times, private respondent occupied the position of
Chief Mate, Boat Captain, and Radio Operator. The act of hiring and re-hiring in various capacities is a
mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such
pattern of re-hiring and the recurring need for his services are testament to the necessity and
indispensability of such services to petitioners’ business or trade.

Even if petitioners’ contention that its industry is seasonal in nature, once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for
the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual
business or trade of the employer, then the employee must be deemed a regular employee.

In fine, inasmuch as private respondent’s functions as described above are no doubt “usually necessary
or desirable in the usual business or trade” of petitioner fishing company and he was hired continuously
for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular
employee. Being one, private respondent’s dismissal without valid cause was illegal.

Petition is denied.

HACIENDA FATIMA vs NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE


Case Digest
[G.R. No. 149440. January 28, 2003]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners,
vs. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents.

FACTS: In the course of a labor dispute between the petitioner and respondent union, the union
members were not given work for more than one month. In protest, complainants staged a strike which
was however settled upon the signing of a Memorandum of Agreement. A conciliation meeting was
conducted wherein Luisa Rombo, Ramona Rombo, Bobong Abrega, and Boboy Silva were not considered
by the company as employees, and thus may not be members of the union. It was also agreed that a
number of other employees will be reinstated. When respondents again reneged on its commitment,
complainants filed the present complaint. It is alleged by the petitioners that the above employees are
mere seasonal employees.

ISSUE: Whether or not the seasonal employees have become regular employees.

HELD: The SC held that for respondents to be excluded from those classified as regular employees, it is
not enough that they perform work or services that are seasonal in nature. They must have also been
employed only for the duration of one season. The evidence proves the existence of the first, but not of
the second, condition. The fact that respondents -- with the exception of Luisa Rombo, Ramona Rombo,
Bobong Abriga and Boboy Silva -- repeatedly worked as sugarcane workers for petitioners for several
years is not denied by the latter. Evidently, petitioners employed respondents for more than one
season. Therefore, the general rule of regular employment is applicable.

The primary standard 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 trade or business 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 a 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 indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity and while such activity exists.

Petition is denied.

G.R. No. 74246 January 26, 1989

MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners,


vs.
HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment
judgment, and JOAQUIN A. DEQUILA, respondents.

FACTS:
Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc. as a general
utility worker on January 10, 1979. After 6 months, he was informed that his work was unsatisfactory
and had failed to meet the required standards. To give him another chance, and with Dequila’s written
consent, Mariwasa extended Dequila’s probationary period for another three months: from July 10 to
October 9, 1979. Dequila’s performance, however, did not improve and Mariwasa terminated his
employment at the end of the extended period.

Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration, Angel T.
Dazo, and violation of Presidential Decrees Nos. 928 and 1389.

DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. Thus, Dequila


appeals to the Minister of Labor.

MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular
employee at the time of his dismissal, thus, he was illegally dismissed. (Initial order: Reinstatement with
full backwages. Later amended to direct payment of Dequila’s backwages from the date of his dismissal
to December 20, 1982 only.)

ISSUE: WON employer and employee may, by agreement, extend the probationary period of
employment beyond the six months prescribed in Art. 282 of the Labor Code?

RULING: YES, agreements stipulating longer probationary periods may constitute lawful exceptions to
the statutory prescription limiting such periods to six months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that “Generally, the probationary period of
employment is limited to six (6) months. The exception to this general rule is when the parties to an
employment contract may agree otherwise, such as when the same is established by company policy or
when the same is required by the nature of work to be performed by the employee. In the latter case,
there is recognition of the exercise of managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where the probationary period was set for
eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee
must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills
experience or training.”

In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal
consequences of a probationary period satisfactorily completed. In fact, it was ex gratia, an act of
liberality on the part of his employer affording him a second chance to make good after having initially
failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said
employer’s account to compel it to keep on its payroll one who could not perform according to its work
standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit
attaching to the completion of said period if he still failed to make the grade during the period of
extension. By reasonably extending the period of probation, the questioned agreement actually
improved the probationary employee’s prospects of demonstrating his fitness for regular employment.

Petition granted. Order of Deputy Minister Leogardo reversed.