PROJECT EMPLOYMENT

CASE 1:
ALCATEL PHILIPPINES, INC., G.R. No. 164315

The Case

Before the Court is a petition for review[if !supportFootnotes][1][endif] of the 31 March 2004 Decision[if
!supportFootnotes][2][endif]
and 14 June 2004 Resolution[if !supportFootnotes][3][endif] 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[if !supportFootnotes][4][endif] of the National Labor Relations Commission (NLRC) and reinstated the 24
September 1998 Decision[if !supportFootnotes][5][endif] 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. [if !supportFootnotes][6][endif] On 1 March 1988,
Alcatel again offered respondent temporary employment as Estimator/Draftsman to assist in the PLDTs X-
4 IOT project for the period 1 March 1988 to 30 April 1988. [if !supportFootnotes][7][endif]

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.[if !supportFootnotes][8][endif] 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. [if
!supportFootnotes][9][endif]
Respondent was offered temporary employment in the same capacity five more times
from 1 October 1991 to 31 July 1992.[if !supportFootnotes][10][endif] 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.[if !supportFootnotes][11][endif] Alcatel renewed respondents contract twice from 1
August 1993 to 31 December 1993.[if !supportFootnotes][12][endif] In a letter dated 22 December 1993,[if
!supportFootnotes][13][endif]
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 respondents employment for another three months or until 31 March
1994. Thereafter, Alcatel employed respondent as a Site Inspector until 31 December 1995. [if
!supportFootnotes][14][endif]

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. [if !supportFootnotes][15][endif] 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 attorneys 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 Arbiters 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:

[if !supportLists]1.[endif] 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;

[if !supportLists]2.[endif] Money claims in the total amount of FOURTEEN THOUSAND

TWO HUNDRED FORTY PESOS (P14,240.00);

[if !supportLists]3.[endif] Attorneys fees of ten (10%) percent of the total monetary award.

SO ORDERED.[if !supportFootnotes][16][endif]

Alcatel appealed to the NLRC.

In its 20 February 2002 Decision, the NLRC reversed the Labor Arbiters Decision and dismissed
respondents 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, [if !supportFootnotes][17][endif] the
NLRC denied respondents motion.

Respondent appealed to the Court of Appeals.

In its 31 March 2004 Decision, the Court of Appeals set aside the NLRCs Decision and reinstated the
Labor Arbiters Decision.

Alcatel filed a motion for reconsideration. In its 14 June 2004 Resolution, the Court of Appeals denied
Alcatels 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 respondents employment contracts did not specify the
projects completion date. The Labor Arbiter said that a short extension of respondents 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 Alcatels 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 Arbiters 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
Alcatels 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 NLRCs decision and reinstated the Labor Arbiters 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
respondents 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:

[if !supportLists]1. [endif]Whether respondent was a regular employee or a project employee; and
[if !supportLists]2. [endif]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 respondents 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 Alcatels 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 Alcatels 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. [if
!supportFootnotes][18][endif]
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.[if
!supportFootnotes][19][endif]

In our review of respondents 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,[if !supportFootnotes][20][endif] 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.[if !supportFootnotes][21][endif] (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 respondents 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. Alcatels 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.

SO ORDERED.

2. BELLE CORPORATION, G.R. No. 168116

The instant petition seeks to annul the Decision[if !supportFootnotes][1][endif] dated August 31, 2004, as
well as the Resolution[if !supportFootnotes][2][endif] dated May 10, 2005, of the Court of Appeals in CA-G.R. SP
No. 76648. The appellate court modified the Decision[if !supportFootnotes][3][endif] 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[if !supportFootnotes][4][endif] and required
to explain in writing why the equipment broke.
On June 21, 1999, respondent received a Memorandum[if !supportFootnotes][5][endif] 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[if !supportFootnotes][6][endif] 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 attorneys 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
habituality 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 [if
!supportFootnotes][7][endif]
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
respondents first offense. To be a just cause for dismissal, the employees 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 13 th

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.[if !supportFootnotes][8][endif]
On appeal, the NLRC affirmed in toto the decision of the Labor Arbiter.[if !supportFootnotes][9][endif]
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, 13 th month pay and full
backwages.
In dismissing the petition, the Court of Appeals ruled that, first, under Article 282 (b)[if
!supportFootnotes][10][endif]
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 respondents 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 respondents 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.[if !supportFootnotes][11][endif]
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

[if !supportLists]A. [endif]RESPONDENT WAS A PROJECT EMPLOYEE, CONSIDERING THAT

[if !supportLists]1. [endif]RESPONDENTS WRITTEN CONTRACT FOR PROJECT EMPLOYMENT
WAS NEVER DISPUTED;
[if !supportLists]2. [endif]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;
[if !supportLists]3. [endif]NON-COMPLIANCE WITH DEPARTMENT ORDER NO. 19 DOES NOT
PROVIDE CONCLUSIVE EVIDENCE OF REGULAR EMPLOYMENT; AND
[if !supportLists]4. [endif]EMPLOYMENT FOR SUCCESSIVE PERIODS DOES NOT PROVIDE
CONCLUSIVE EVIDENCE OF REGULAR EMPLOYMENT.
[if !supportLists]B. [endif]RESPONDENT WAS LEGALLY DISMISSED, CONSIDERING THAT
[if !supportLists]1. [endif]RESPONDENTS GROSS NEGLIGENCE WAS SUFFICIENTLY
ESTABLISHED BY SUBSTANTIAL EVIDENCE;
[if !supportLists]2. [endif]RESPONDENTS ACTS CONSTITUTE GROSS NEGLIGENCE UNDER
PREVAILING LAW AND JURISPRUDENCE; AND
[if !supportLists]3. [endif]THE BASIS FOR THE COURT OF APPEALS FINDING WAS
ARBITRARY AND BASED ON MERE ASSUMPTION AND CONJECTURE, WITHOUT ANY
EVIDENCE TO SUPPORT THE SAME.

[if !supportLists]C. [endif]RESPONDENT WAS ENTITLED TO SEPARATION PAY AND FULL

BACKWAGES, CONSIDERING THAT
[if !supportLists]1. [endif]RESPONDENT DID NOT PRAY FOR SEPARATION PAY,
REINSTATEMENT NOR FULL BACKWAGES; AND
[if !supportLists]2. [endif]RESPONDENT WAS LEGALLY DISMISSED.

II.
PETITIONER IS ENTITLED TO THE ISSUANCE OF A TEMPORARY RESTRAINING
ORDER AND/OR WRIT OF PRELIMINARY INJUNCTION. [if
!supportFootnotes][12][endif]

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. [if !supportFootnotes][13][endif] 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. [if !supportFootnotes][14][endif]
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, respondents
job assignment[if !supportFootnotes][15][endif] 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.[if !supportFootnotes][16][endif] 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 respondents
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.[if !supportFootnotes][17][endif]
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.
SO ORDERED.

FIXED PERIOD EMPLOYMENT

3. 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.

SEASONAL EMPLOYMENT

4. 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.

PROBATIONARY EMPLOYMENT

5. 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.