SEASONAL EMPLOYMENT
Sometimes Jaime Fulo is allowed to work in the farm as
G.R. No. 193493 June 13, 2013
JAIME N. GAPAYAO, Petitioner, vs. ROSARIO FULO,
SOCIAL SECURITY SYSTEM and SOCIAL SECURITY
COMMISSION, Respondents.
DECISION
SERENO, CJ.:
This is a Rule 45 Petition1 assailing the Decision2 and
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP. No.
101688, affirming the Resolution4 of the Social Security
Commission (SSC). The SSC held petitioner Jaime N.
Gapayao liable to pay the unpaid social security contributions
due to the deceased Jaime Fulo, and the Social Security
System (SSS) to pay private respondent Rosario L. Fulo, the
widow of the deceased, the appropriate death benefits
pursuant to the Social Security Law.
The antecedent facts are as follows:
On 4 November 1997, Jaime Fulo (deceased) died of "acute
renal failure secondary to 1st degree burn 70% secondary
electrocution"5 while doing repairs at the residence and
business establishment of petitioner located at San Julian,
Irosin, Sorsogon.
Allegedly moved by his Christian faith, petitioner extended
some financial assistance to private respondent. On 16
November 1997, the latter executed an Affidavit of
Desistance6 stating that she was not holding them liable for
the death of her late husband, Jaime Fulo, and was thereby
waiving her right and desisting from filing any criminal or civil
action against petitioner.
On 14 January 1998, both parties executed a Compromise
Agreement,7 the relevant portion of which is quoted below:
We, the undersigned unto this Honorable Regional
Office/District Office/Provincial Agency Office respectfully
state:
1. The undersigned employer, hereby agrees to pay the sum
of FORTY THOUSAND PESOS (₱40,000.00) to the surviving
spouse of JAIME POLO, an employee who died of an
accident, as a complete and full payment for all claims due the
victim.
2. On the other hand, the undersigned surviving spouse of the
victim having received the said amount do [sic] hereby release
and discharge the employer from any and all claims that
maybe due the victim in connection with the victim’s
employment thereat.
Thereafter, private respondent filed a claim for social security
benefits with the Social Security System (SSS)–Sorosogon
Branch.8 However, upon verification and evaluation, it was
discovered that the deceased was not a registered member of
the SSS.9
Upon the insistence of private respondent that her late
husband had been employed by petitioner from January 1983
up to his untimely death on 4 November 1997, the SSS
conducted a field investigation to clarify his status of
employment. In its field investigation report,10 it enumerated
its findings as follows:
In connection with the complaint filed by Mrs. Rosario Fulo,
hereunder are the findings per interview with Mr. Leonor
Delgra, Santiago Bolanos and Amado Gacelo:
1. That Mr. Jaime Fulo was an employee of Jaime Gapayao
as farm laborer from 1983 to 1997.
2. Mr. Leonor Delgra and Santiago Bolanos are coemployees
of Jaime Fulo.
3. Mr. Jaime Fulo receives compensation on a daily basis
ranging from ₱5.00 to ₱60.00 from 1983 to 1997.
Per interview from Mrs. Estela Gapayao, please be informed
that:
1. Jaime Fulo is an employee of Mr. & Mrs. Jaime Gapayao
on an extra basis.
2.
abaca harvester and earn 1/3 share of its harvest as his
income.
3. Mr. & Mrs. Gapayao hired the services of Jaime Fulo not
only in the farm as well as in doing house repairs whenever it
is available. Mr. Fulo receives his remuneration usually in the
afternoon after doing his job.
4. Mr. & Mrs. Gapayao hires 50-100 persons when necessary
to work in their farm as laborer and Jaime Fulo is one of them.
Jaime Fulo receives more or less ₱50.00 a day. (Emphases
in the original)
Consequently, the SSS demanded that petitioner remit the
social security contributions of the deceased. When petitioner
denied that the deceased was his employee, the SSS required
private respondent to present documentary and testimonial
evidence to refute petitioner’s allegations.11
Instead of presenting evidence, private respondent filed a
Petition12 before the SSC on 17 February 2003. In her
Petition, she sought social security coverage and payment of
contributions in order to avail herself of the benefits accruing
from the death of her husband.
On 6 May 2003, petitioner filed an Answer13 disclaiming any
liability on the premise that the deceased was not the former’s
employee, but was rather an independent contractor whose
tasks were not subject to petitioner’s control and
supervision.14 Assuming arguendo that the deceased was
5
petitioner’s employee, he was still not entitled to be paid his
SSS premiums for the intervening period when he was not at
work, as he was an "intermittent worker who was only
summoned every now and then as the need arose."15 Hence,
petitioner insisted that he was under no obligation to report the
former’s demise to the SSS for social security coverage.
Subsequently, on 30 June 2003, the SSS filed a Petition-
inIntervention16 before the SSC, outlining the factual
circumstances of the case and praying that judgment be
rendered based on the evidence adduced by the parties.
On 14 March 2007, the SSC rendered a Resolution,17 the
dispositive portion of which provides:
WHEREFORE, PREMISES CONSIDERED, this Commission
finds, and so holds, that Jaime Fulo, the late husband of
petitioner, was employed by respondent Jaime N. Gapayao
from January 1983 to November 4, 1997, working for nine (9)
months a year receiving the minimum wage then prevailing.
Accordingly, the respondent is hereby ordered to pay
₱45,315.95 representing the unpaid SS contributions due on
behalf of deceased Jaime Fulo, the amount of ₱217,710.33
as 3% per month penalty for late remittance thereof,
computed as of March 30, 2006, without prejudice to the
collection of additional penalty accruing thereafter, and the
sum of ₱230,542.20 (SSS) and ₱166,000.00 (EC) as
damages for the failure of the respondent to report the
deceased Jaime Fulo for SS coverage prior to his death
pursuant to Section 24(a) of the SS Law, as amended.
The SSS is hereby directed to pay petitioner Rosario Fulo the
appropriate death benefit, pursuant to Section 13 of the SS
Law, as amended, as well as its prevailing rules and
regulations, and to inform this Commission of its compliance
herewith.
SO ORDERED.
On 18 May 2007, petitioner filed a Motion for
Reconsideration,18 which was denied in an Order19 dated 16
August 2007.
Aggrieved, petitioner appealed to the CA on 19 December
2007.20 On 17 March 2010, the CA rendered a Decision21 in
favor of private respondent, as follows:
In fine, public respondent SSC had sufficient basis in
concluding that private respondent’s husband was an
1
employee of petitioner and should, therefore, be entitled to
compulsory coverage under the Social Security Law.
Having ruled in favor of the existence of employer-employee
relationship between petitioner and the late Jaime Fulo, it is
no longer necessary to dwell on the other issues raised.
Resultantly, for his failure to report Jaime Fulo for compulsory
social security coverage, petitioner should bear the
consequences thereof. Under the law, an employer who fails
to report his employee for social security coverage is liable to
[1] pay the benefits of those who die, become disabled, get
sick or reach retirement age; [2] pay all unpaid contributions
plus a penalty of three percent per month; and [3] be held
liable for a criminal offense punishable by fine and/or
imprisonment. But an employee is still entitled to social
security benefits even is (sic) his employer fails or refuses to
remit his contribution to the SSS.
WHEREFORE, premises considered, the Resolution
appealed from is AFFIRMED in toto.
SO ORDERED.
In holding thus, the CA gave credence to the findings of the
SSC. The appellate court held that it "does not follow that a
person who does not observe normal hours of work cannot be
deemed an employee."22 For one, it is not essential for the
employer to actually supervise the performance of duties of
the employee; it is sufficient that the former has a right to wield
the power. In this case, petitioner exercised his control
through an overseer in the person of Amado Gacelo, the
tenant on petitioner’s land.23 Most important, petitioner
entered into a Compromise Agreement with private
respondent and expressly admitted therein that he was the
employer of the deceased.24The CA interpreted this
admission as a declaration against interest, pursuant to
Section 26, Rule 130 of the Rules of Court.25
Hence, this petition.
Public respondents SSS26 and SSC27 filed their Comments
on 31 January 2011 and 28 February 2011, respectively, while
private respondent filed her Comment on 14 March 2011.28
On 6 March 2012, petitioner filed a "Consolidated Reply to the
Comments of the Public Respondents SSS and SSC and
Private Respondent Rosario Fulo."29
ISSUE
The sole issue presented before us is whether or not there
exists between the deceased Jaime Fulo and petitioner an
employer-employee relationship that would merit an award of
benefits in favor of private respondent under social security
laws.
THE COURT’S RULING
In asserting the existence of an employer-employee
relationship, private respondent alleges that her late husband
had been in the employ of petitioner for 14 years, from 1983
to 1997.30 During that period, he was made to work as a
laborer in the agricultural landholdings, a harvester in the
abaca plantation, and a repairman/utility worker in several
business establishments owned by petitioner.31 To private
respondent, the "considerable length of time during which [the
deceased] was given diverse tasks by petitioner was a clear
indication of the necessity and indispensability of her late
husband’s services to petitioner’s business."32 This view is
bolstered by the admission of petitioner himself in the
Compromise Agreement that he was the deceased’s
employer.33
Private respondent’s position is similarly espoused by the
SSC, which contends that its findings are duly supported by
evidence on record.34 It insists that pakyaw workers are
considered employees, as long as the employer exercises
control over them. In this case, the exercise of control by the
employer was delegated to the caretaker of his farm, Amado
6 upheld.54
Gacelo. The SSC further asserts that the deceased rendered
services essential for the petitioner’s harvest. While these
services were not rendered continuously (in the sense that
they were not rendered every day throughout the year), still,
the deceased had never stopped working for petitioner from
year to year until the day the former died.35 In fact, the
deceased was required to work in the other business ventures
of petitioner, such as the latter’s bakery and grocery store.36
The Compromise Agreement entered into by petitioner with
private respondent should not be a bar to an employee
demanding what is legally due the latter.37
The SSS, while clarifying that it is "neither adversarial nor
favoring any of the private parties x x x as it is only tasked to
carry out the purposes of the Social Security Law,"38 agrees
with both private respondent and SSC. It stresses that factual
findings of the lower courts, when affirmed by the appellate
court, are generally conclusive and binding upon the Court.39
Petitioner, on the other hand, insists that the deceased was
not his employee. Supposedly, the latter, during the
performance of his function, was not under petitioner’s control.
Control is not necessarily present even if the worker works
inside the premises of the person who has engaged his
services.40 Granting without admitting that petitioner gave
rules or guidelines to the deceased in the process of the
latter’s performing his work, the situation cannot be
interpreted as control, because it was only intended to
promote mutually desired results.41
Alternatively, petitioner insists that the deceased was hired by
Adolfo Gamba, the contractor whom he had hired to construct
their building;42 and by Amado Gacelo, the tenant whom
petitioner instructed to manage the latter’s farm.43 For this
reason, petitioner believes that a tenant is not beholden to the
landlord and is not under the latter’s control and supervision.
So if a worker is hired to work on the land of a tenant – such
as petitioner – the former cannot be the worker of the landlord,
but of the tenant’s.44
Anent the Compromise Agreement, petitioner clarifies that it
was executed to buy peace, because "respondent kept on
pestering them by asking for money."45 Petitioner allegedly
received threats that if the matter was not settled, private
respondent would refer the matter to the New Peoples’
Army.46 Allegedly, the Compromise Agreement was
"extortion camouflaged as an agreement."47 Likewise,
petitioner maintains that he shouldered the hospitalization and
burial expenses of the deceased to express his "compassion
and sympathy to a distressed person and his family," and not
to admit liability.48
Lastly, petitioner alleges that the deceased is a freelance
worker. Since he was engaged on a pakyaw basis and worked
for a short period of time, in the nature of a farm worker every
season, he was not precluded from working with other
persons and in fact worked for them. Under Article 280 of the
Labor Code,49 seasonal employees are not covered by the
definitions of regular and casual employees.50 Petitioner cites
Mercado, Sr. v. NLRC,51 in which the Court held that
seasonal workers do not become regular employees by the
mere fact that they have rendered at least one year of service,
whether continuous or broken.52
We see no cogent reason to reverse the CA.
I
Findings of fact of the SSC are given weight and credence.
At the outset, it is settled that the Court is not a trier of facts
and will not weigh evidence all over again. Findings of fact of
administrative agencies and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect but
finality when affirmed by the CA.53 For as long as these
findings are supported by substantial evidence, they must be
2
II
Farm workers may be considered regular seasonal
employees.
Article 280 of the Labor Code states:
Article 280. Regular and Casual Employment. — The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion
or termination of which has been determined at the time of the
engagement of the employee or where the work or services to
be performed is seasonal in nature and the employment is for
the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in
which he is employed and his employment shall continue
while such actually exists.
Jurisprudence has identified the three types of employees
mentioned in the provision: (1) regular employees or those
who have been engaged to perform activities that are usually
necessary or desirable in the usual business or trade of the
employer; (2) project employees or those whose employment
has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the
time of their engagement, or those whose work or service is
seasonal in nature and is performed for the duration of the
season; and (3) casual employees or those who are neither
regular nor project employees.55
Farm workers generally fall under the definition of seasonal
employees. We have consistently held that seasonal
employees may be considered as regular employees.56
Regular seasonal employees are those called to work from
time to time. The nature of their relationship with the employer
is such that during the off season, they are temporarily laid off;
but reemployed during the summer season or when their
services may be needed.57 They are in regular employment
because of the nature of their job,and not because of the
length of time they have worked.58
7 Pakyaw workers are considered employees for as long as
The rule, however, is not absolute. In Hacienda Fatima v.
National Federation of Sugarcane Workers-Food & General
Trade,59 the Court held that seasonal workers who have
worked for one season only may not be considered regular
employees. Similarly, in Mercado, Sr. v. NLRC,60 it was held
that when seasonal employees are free to contract their
services with other farm owners, then the former are not
regular employees.
For regular employees to be considered as such, the primary
standard used is the reasonable connection between the
particular activity they perform and the usual trade or business
of the employer.61 This test has been explained thoroughly in
De Leon v. NLRC,62 viz:
The primary standard, therefore, of determining a regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to the
usual business or trade of the employer. The test is whether
the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be
determined by considering the nature of the work performed
and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing
the job for at least one year, even if the performance is not
continuous 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. Hence, the employment is also considered regular,
but only with respect to such activity and while such activity
exists.
A reading of the records reveals that the deceased was
indeed a farm worker who was in the regular employ of
petitioner. From year to year, starting January 1983 up until
his death, the deceased had been working on petitioner’s land
by harvesting abaca and coconut, processing copra, and
clearing weeds. His employment was continuous in the sense
that it was done for more than one harvesting season.
Moreover, no amount of reasoning could detract from the fact
that these tasks were necessary or desirable in the usual
business of petitioner.
The other tasks allegedly done by the deceased outside his
usual farm work only bolster the existence of an
employeremployee relationship. As found by the SSC, the
deceased was a construction worker in the building and a
helper in the bakery, grocery, hardware, and piggery – all
owned by petitioner.63 This fact only proves that even during
the off season, the deceased was still in the employ of
petitioner.
The most telling indicia of this relationship is the Compromise
Agreement executed by petitioner and private respondent. It
is a valid agreement as long as the consideration is
reasonable and the employee signed the waiver voluntarily,
with a full understanding of what he or she was entering
into.64 All that is required for the compromise to be deemed
voluntarily entered into is personal and specific individual
consent.65 Once executed by the workers or employees and
their employers to settle their differences, and done in good
faith, a Compromise Agreement is deemed valid and binding
among the parties.66
Petitioner entered into the agreement with full knowledge that
he was described as the employer of the deceased.67This
knowledge cannot simply be denied by a statement that
petitioner was merely forced or threatened into such an
agreement.1âwphi1 His belated attempt to circumvent the
agreement should not be given any consideration or weight by
this Court.
III
Pakyaw workers are regular employees,
provided they are subject to the control of petitioner.
their employers exercise control over them. In Legend Hotel
Manila v. Realuyo,68 the Court held that "the power of the
employer to control the work of the employee is considered
the most significant determinant of the existence of an
employer-employee relationship. This is the so-called control
test and is premised on whether the person for whom the
services are performed reserves the right to control both the
end achieved and the manner and means used to achieve that
end." It should be remembered that the control test merely
calls for the existence of the right to control, and not
necessarily the exercise thereof.69 It is not essential that the
employer actually supervises the performance of duties by the
employee. It is enough that the former has a right to wield the
power.70
In this case, we agree with the CA that petitioner wielded
control over the deceased in the discharge of his functions.
Being the owner of the farm on which the latter worked,
petitioner – on his own or through his overseer – necessarily
had the right to review the quality of work produced by his
laborers. It matters not whether the deceased conducted his
work inside petitioner’s farm or not because petitioner retained
the right to control him in his work, and in fact exercised it
through his farm manager Amado Gacelo. The latter himself
testified that petitioner had hired the deceased as one of the
3
pakyaw workers whose salaries were derived from the gross
proceeds of the harvest.71
We do not give credence to the allegation that the deceased
was an independent contractor hired by a certain Adolfo
Gamba, the contractor whom petitioner himself had hired to
build a building. The allegation was based on the self-serving
testimony of Joyce Gapay Demate,72 the daughter of
petitioner. The latter has not offered any other proof apart from
her testimony to prove the contention.
The right of an employee to be covered by the Social Security
Act is premised on the existence of an employer-employee
relationship.73 That having been established, the Court
hereby rules in h1vor of private respondent.
WHEREFORE, the Petition for Review on Certiorari is hereby
DENIED. The assailed Decision and resolution of the Court of
Appeals in CA-G.R. SP. No. 101688 dated 17 March 2010
and 13 August 2010, respectively, are hereby AFFIRMED.
SO ORDERED.
8 Danny Kadusale and Allyrobyl Olpus.
MARIA LOURDES P. A. SERENO Chief Justice, Chairperson
G.R. No. 186439 January 15, 2014
UNIVERSAL ROBINA SUGAR MILLING CORPORATION
and RENE CABATI, Petitioners, vs. FERDINAND ACIBO,
ROBERTO AGUILAR, EDDIE BALDOZA, RENE ABELLAR,
DIOMEDES ALICOS, MIGUEL ALICOS, ROGELIO AMAHIT,
LARRY AMASCO, FELIPE BALANSAG, ROMEO
BALANSAG, MANUEL BANGOT, ANDY BANJAO, DIONISIO
BENDIJO, JR., JOVENTINO BROCE, ENRICO LITERAL,
RODGER RAMIREZ, BIENVENIDO RODRIGUEZ, DIOCITO
PALAGTIW, ERNIE SABLAN, RICHARD PANCHO,
RODRIGO ESTRABELA, DANNY KADUSALE and
ALLYROBYL OLPUS, Respondents.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari1 the
challenge to the November 29, 2007 decision2 and the
January 22, 2009 resolution3 of the Court of Appeals (CA) in
CA-G.R. CEB-SP No. 02028. This CA decision affirmed with
modification the July 22, 2005 decision4 and the April 28,
2006 resolution5 of the National Labor Relations Commission
(NLRC) in NLRC Case No. V-00006-03 which, in turn,
reversed the October 9, 2002 decision6 of the Labor Arbiter
(LA). The LA’s decision dismissed the complaint filed by
complainants Ferdinand Acibo, et al.7 against petitioners
Universal Robina Sugar Milling Corporation (URSUMCO) and
Rene Cabati.
The Factual Antecedents
URSUMCO is a domestic corporation engaged in the sugar
cane milling business; Cabati is URSUMCO’s Business Unit
General Manager.
The complainants were employees of URSUMCO. They were
hired on various dates (between February 1988 and April
1996) and on different capacities,8 i.e., drivers, crane
operators, bucket hookers, welders, mechanics, laboratory
attendants and aides, steel workers, laborers, carpenters and
masons, among others. At the start of their respective
engagements, the complainants signed contracts of
employment for a period of one (1) month or for a given
season. URSUMCO repeatedly hired the complainants to
perform the same duties and, for every engagement, required
the latter to sign new employment contracts for the same
duration of one month or a given season.
On August 23, 2002,9 the complainants filed before the LA
complaints for regularization, entitlement to the benefits under
the existing Collective Bargaining Agreement (CBA),and
attorney’s fees.
In the decision10 dated October 9, 2002, the LA dismissed the
complaint for lack of merit. The LA held that the complainants
were seasonal or project workers and not regular employees
of URSUMCO. The LA pointed out that the complainants were
required to perform, for a definite period, phases of
URSUMCO’s several projects that were not at all directly
related to the latter’s main operations. As the complainants
were project employees, they could not be regularized since
their respective employments were coterminous with the
phase of the work or special project to which they were
assigned and which employments end upon the completion of
each project. Accordingly, the complainants were not entitled
to the benefits granted under the CBA that, as provided,
covered only the regular employees of URSUMCO.
Of the twenty-two original complainants before the LA, seven
appealed the LA’s ruling before the NLRC, namely:
respondents Ferdinand Acibo, Eddie Baldoza, Andy Banjao,
Dionisio Bendijo, Jr., Rodger Ramirez, Diocito Palagtiw,
The Ruling of the NLRC
4
In its decision11 of July 22, 2005, the NLRC reversed the LA’s
ruling; it declared the complainants as regular URSUMCO
employees and granted their monetary claims under the CBA.
The NLRC pointed out that the complainants performed
activities which were usually necessary and desirable in the
usual trade or business of URSUMCO, and had been
repeatedly hired for the same undertaking every season.
Thus, pursuant to Article 280 of the Labor Code, the NLRC
declared that the complainants were regular employees. As
regular employees, the NLRC held that the complainants were
entitled to the benefits granted, under the CBA, to the regular
URSUMCO employees.
The petitioners moved to reconsider this NLRC ruling which
the NLRC denied in its April 28, 2006 resolution.12 The
petitioners elevated the case to the CA via a petition for
certiorari.13
The Ruling of the CA
In its November 29, 2007 decision,14 the CA granted in part
the petition; it affirmed the NLRC’s ruling finding the
complainants to be regular employees of URSUMCO, but
deleted the grant of monetary benefits under the CBA.
The CA pointed out that the primary standard for determining
regular employment is the reasonable connection between a
particular activity performed by the employee vis-à-vis the
usual trade or business of the employer. This connection, in
turn, can be determined by considering the nature of the work
performed and the relation of this work to the business or trade
of the employer in its entirety.
In this regard, the CA held that the various activities that the
complainants were tasked to do were necessary, if not
indispensable, to the nature of URSUMCO’s business. As the
complainants had been performing their respective tasks for
at least one year, the CA held that this repeated and
continuing need for the complainants’ performance of these
same tasks, regardless of whether the performance was
continuous or intermittent, constitutes sufficient evidence of
the necessity, if not indispensability, of the activity to
URSUMCO’s business.
Further, the CA noted that the petitioners failed to prove that
they gave the complainants opportunity to work elsewhere
during the off-season, which opportunity could have qualified
9 standard that determines regular employment is the
the latter as seasonal workers. Still, the CA pointed out that
even during this off-season period, seasonal workers are not
separated from the service but are simply considered on leave
until they are re-employed. Thus, the CA concluded that the
complainants were regular employees with respect to the
activity that they had been performing and while the activity
continued.
On the claim for CBA benefits, the CA, however, ruled that the
complainants were not entitled to receive them. The CA
pointed out that while the complainants were considered
regular, albeit seasonal, workers, the CBA-covered regular
employees of URSUMCO were performing tasks needed by
the latter for the entire year with no regard to the changing
sugar milling season. Hence, the complainants did not belong
to and could not be grouped together with the regular
employees of URSUMCO, for collective bargaining purposes;
they constitute a bargaining unit separate and distinct from the
regular employees. Consequently, the CA declared that the
complainants could not be covered by the CBA.
The petitioners filed the present petition after the CA denied
their motion for partial reconsideration15 in the CA’s January
22, 2009 resolution.16
The Issues
The petition essentially presents the following issues for the
Court’s resolution: (1) whether the respondents are regular
employees of URSUMCO; and (2) whether affirmative relief
can be given to the fifteen (15) of the complainants who did
not appeal the LA’s decision.17
The Court’s Ruling
We resolve to partially GRANT the petition.
On the issue of the status of the respondents’ employment
The petitioners maintain that the respondents are contractual
or project/seasonal workers and not regular employees of
URSUMCO. They thus argue that the CA erred in applying the
legal parameters and guidelines for regular employment to the
respondents’ case. They contend that the legal standards –
length of the employee’s engagement and the desirability or
necessity of the employee’s work in the usual trade or
business of the employer – apply only to regular employees
under paragraph 1, Article 280 of the Labor Code, and, under
paragraph 2 of the same article, to casual employees who are
deemed regular by their length of service.
The respondents, the petitioners point out, were specifically
engaged for a fixed and predetermined duration of, on the
average, one (1) month at a time that coincides with a
particular phase of the company’s business operations or
sugar milling season. By the nature of their engagement, the
respondents’ employment legally ends upon the end of the
predetermined period; thus, URSUMCO was under no legal
obligation to rehire the respondents.
In their comment,18 the respondents maintain that they are
regular employees of URSUMCO. Relying on the NLRC and
the CA rulings, they point out that they have been
continuously working for URSUMCO for more than one year,
performing tasks which were necessary and desirable to
URSUMCO’s business. Hence, under the above-stated legal
parameters, they are regular employees.
We disagree with the petitioners’ position.1âwphi1 We find the
respondents to be regular seasonal employees of
URSUMCO.
As the CA has explained in its challenged decision, Article 280
of the Labor Code provides for three kinds of employment
arrangements, namely: regular, project/seasonal and casual.
Regular employment refers to that arrangement whereby the
employee "has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer[.]"19 Under the definition, the primary
reasonable connection between the particular activity
performed by the employee and the usual business or trade
of the employer;20 the emphasis is on the necessity or
desirability of the employee’s activity. Thus, when the
employee performs activities considered necessary and
desirable to the overall business scheme of the employer, the
law regards the employee as regular.
By way of an exception, paragraph 2, Article 280 of the Labor
Code also considers regular a casual employment
arrangement when the casual employee’s engagement has
lasted for at least one year, regardless of the engagement’s
continuity. The controlling test in this arrangement is the
length of time during which the employee is engaged.
A project employment, on the other hand, contemplates on
arrangement whereby "the employment has been fixed for a
specific project or undertaking whose completion or
termination has been determined at the time of the
engagement of the employee[.]"21 Two requirements,
therefore, clearly need to be satisfied to remove the
engagement from the presumption of regularity of
employment, namely: (1) designation of a specific project or
undertaking for which the employee is hired; and (2) clear
determination of the completion or termination of the project
at the time of the employee’s engagement.22 The services of
the project employees are legally and automatically
terminated upon the end or completion of the project as the
employee’s services are coterminous with the project.
5
Unlike in a regular employment under Article 280 of the Labor
Code, however, the length of time of the asserted "project"
employee’s engagement is not controlling as the employment
may, in fact, last for more than a year, depending on the needs
or circumstances of the project. Nevertheless, this length of
time (or the continuous rehiring of the employee even after the
cessation of the project) may serve as a badge of regular
employment when the activities performed by the purported
"project" employee are necessary and indispensable to the
usual business or trade of the employer.23 In this latter case,
the law will regard the arrangement as regular employment.24
Seasonal employment operates much in the same way as
project employment, albeit it involves work or service that is
seasonal in nature or lasting for the duration of the season.25
As with project employment, although the seasonal
employment arrangement involves work that is seasonal or
periodic in nature, the employment itself is not automatically
considered seasonal so as to prevent the employee from
attaining regular status. To exclude the asserted "seasonal"
employee from those classified as regular employees, the
employer must show that: (1) the employee must be
10
performing work or services that are seasonal in nature; and
(2) he had been employed for the duration of the season.26
Hence, when the "seasonal" workers are continuously and
repeatedly hired to perform the same tasks or activities for
several seasons or even after the cessation of the season, this
length of time may likewise serve as badge of regular
employment.27 In fact, even though denominated as
"seasonal workers," if these workers are called to work from
time to time and are only temporarily laid off during the
offseason, the law does not consider them separated from the
service during the off-season period. The law simply
considers these seasonal workers on leave until
reemployed.28
Casual employment, the third kind of employment
arrangement, refers to any other employment arrangement
that does not fall under any of the first two categories, i.e.,
regular or project/seasonal.
Interestingly, the Labor Code does not mention another
employment arrangement – contractual or fixed term
employment (or employment for a term) – which, if not for the
fixed term, should fall under the category of regular
employment in view of the nature of the employee’s
engagement, which is to perform an activity usually necessary
or desirable in the employer’s business.
In Brent School, Inc. v. Zamora,29 the Court, for the first time,
recognized and resolved the anomaly created by a narrow
and literal interpretation of Article 280 of the Labor Code that
appears to restrict the employee’s right to freely stipulate with
his employer on the duration of his engagement. In this case,
the Court upheld the validity of the fixed-term employment
agreed upon by the employer, Brent School, Inc., and the
employee, Dorotio Alegre, declaring that the restrictive clause
in Article 280 "should be construed to refer to the substantive
evil that the Code itself x x x singled out: agreements entered
into precisely to circumvent security of tenure. It should have
no application to instances where [the] fixed period of
employment was agreed upon knowingly and voluntarily by
the parties x x x absent any x x x circumstances vitiating [the
employee’s] consent, or where [the facts satisfactorily show]
that the employer and [the] employee dealt with each other on
more or less equal terms[.]"30 The indispensability or
desirability of the activity performed by the employee will not
preclude the parties from entering into an otherwise valid fixed
term employment agreement; a definite period of employment
does not essentially contradict the nature of the employees
duties31 as necessary and desirable to the usual business or
trade of the employer.
Nevertheless, "where the circumstances evidently show that
the employer imposed the period precisely to preclude the
employee from acquiring tenurial security, the law and this
Court will not hesitate to strike down or disregard the period
as contrary to public policy, morals, etc."32 In such a case,
the general restrictive rule under Article 280 of the Labor Code
will apply and the employee shall be deemed regular.
Clearly, therefore, the nature of the employment does not
depend solely on the will or word of the employer or on the
procedure for hiring and the manner of designating the
employee. Rather, the nature of the employment depends on
the nature of the activities to be performed by the employee,
considering the nature of the employer’s business, the
duration and scope to be done,33 and, in some cases, even
the length of time of the performance and its continued
existence.
In light of the above legal parameters laid down by the law and
applicable jurisprudence, the respondents are neither project,
seasonal nor fixed-term employees, but regular seasonal
workers of URSUMCO. The following factual considerations
from the records support this conclusion:
First, the respondents were made to perform various tasks
that did not at all pertain to any specific phase of URSUMCO’s
strict milling operations that would ultimately cease upon
completion of a particular phase in the milling of sugar; rather,
they were tasked to perform duties regularly and habitually
needed in URSUMCO’s operations during the milling season.
The respondents’ duties as loader operators, hookers, crane
operators and drivers were necessary to haul and transport
the sugarcane from the plantation to the mill; laboratory
attendants, workers and laborers to mill the sugar; and
welders, carpenters and utility workers to ensure the smooth
and continuous operation of the mill for the duration of the
milling season, as distinguished from the production of the
sugarcane which involves the planting and raising of the
sugarcane until it ripens for milling. The production of
sugarcane, it must be emphasized, requires a different set of
workers who are experienced in farm or agricultural work.
Needless to say, they perform the activities that are necessary
and desirable in sugarcane production. As in the milling of
sugarcane, the plantation workers perform their duties only
during the planting season.
Second, the respondents were regularly and repeatedly hired
to perform the same tasks year after year. This regular and
repeated hiring of the same workers (two different sets) for
two separate seasons has put in place, principally through
jurisprudence, the system of regular seasonal employment in
the sugar industry and other industries with a similar nature of
operations.
Under the system, the plantation workers or the mill
employees do not work continuously for one whole year but
only for the duration of the growing of the sugarcane or the
milling season. Their seasonal work, however, does not
detract from considering them in regular employment since in
a litany of cases, this Court has already settled that seasonal
workers who are called to work from time to time and are
temporarily laid off during the off-season are not separated
from the service in said period, but are merely considered on
leave until re-employment.34 Be this as it may, regular
seasonal employees, like the respondents in this case, should
not be confused with the regular employees of the sugar mill
such as the administrative or office personnel who perform
their tasks for the entire year regardless of the season. The
NLRC, therefore, gravely erred when it declared the
respondents regular employees of URSUMCO without
qualification and that they were entitled to the benefits
granted, under the CBA, to URSUMCO’S regular employees.
Third, while the petitioners assert that the respondents were
free to work elsewhere during the off-season, the records do
not support this assertion. There is no evidence on record
6
showing that after the completion of their tasks at URSUMCO, CBA between petitioner URSUMCO and the authorized
the respondents sought and obtained employment elsewhere. bargaining representative of the regular and permanent
Contrary to the petitioners’ position, Mercado, Sr. v. NLRC, employees."44 Citing jurisprudential standards,45 it then
3rd Div.35 is not applicable to the respondents as this case proceeded to explain that the respondents cannot be lumped
was resolved based on different factual considerations. In with the regular employees due to the differences in the nature
11 of their duties and the duration of their work vis-a-vis the
operations of the company.
Mercado, the workers were hired to perform phases of the The NLRC was well aware of these distinctions as it
agricultural work in their employer’s farm for a definite period acknowledged that the respondents worked only during the
of time; afterwards, they were free to offer their services to any milling season, yet it ignored the distinctions and declared
other farm owner. The workers were not hired regularly and them regular employees, a marked departure from existing
repeatedly for the same phase(s) of agricultural work, but only jurisprudence. This, to us, is grave abuse of discretion, as it
intermittently for any single phase. And, more importantly, the gave no reason for disturbing the system of regular seasonal
employer in Mercado sufficiently proved these factual employment already in place in the sugar industry and other
circumstances. The Court reiterated these same observations industries with similar seasonal operations. For upholding the
in Hda. Fatima v. Nat’l Fed. of Sugarcane Workers-Food and NLRC’s flawed decision on the respondents’ employment
Gen. Trade36 and Hacienda Bino/Hortencia Starke, Inc. v. status, the CA committed a reversible error of judgment.
Cuenca.37 In sum, we find the complaint to be devoid of merit. The issue
At this point, we reiterate the settled rule that in this of granting affirmative relief to the complainants who did not
jurisdiction, only questions of law are allowed in a petition for appeal the CA ruling has become academic.
review on certiorari.38 This Court’s power of review in a Rule WHEREFORE, premises considered, the petition is
45 petition is limited to resolving matters pertaining to any PARTIALLY GRANTED. Except for the denial of the
perceived legal errors, which the CA may have committed in respondents' claim for CBA benefits, the November 29, 2007
issuing the assailed decision.39 In reviewing the legal decision and the January 22, 2009 resolution of the Court of
correctness of the CA’s Rule 65 decision in a labor case, we Appeals are SET ASIDE. The complaint is DISMISSED for
examine the CA decision in the context that it determined, i.e., lack of merit.
the presence or absence of grave abuse of discretion in the
NLRC decision before it and not on the basis of whether the
NLRC decision on the merits of the case was correct.40 In
other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of the
NLRC decision challenged before it.41
Viewed in this light, we find the need to place the CA’s
affirmation, albeit with modification, of the NLRC decision of
July 22, 2005 in perspective. To recall, the NLRC declared the
respondents as regular employees of URSUMCO.42With
such a declaration, the NLRC in effect granted the
respondents’ prayer for regularization and, concomitantly,
their prayer for the grant of monetary benefits under the CBA
for URSUMCO’s regular employees. In its challenged ruling,
the CA concurred with the NLRC finding, but with the
respondents characterized as regular seasonal employees of
URSUMCO.
The CA misappreciated the real import of the NLRC ruling.
The labor agency did not declare the respondents as regular
seasonal employees, but as regular employees. This is the
only conclusion that can be drawn from the NLRC decision’s
dispositive portion, thus:
WHEREFORE, premises considered, the appeal is hereby
GRANTED. Complainants are declared regular employees of
respondent.1âwphi1 As such, they are entitled to the
monetary benefits granted to regular employees of
respondent company based on the CBA, reckoned three (3)
years back from the filing of the above-entitled case on 23
August 2002 up to the present or to their entire service with
respondent after the date of filing of the said complaint if they
are no longer connected with respondent company.43
It is, therefore, clear that the issue brought to the CA for
resolution is whether the NLRC gravely abused its discretion
in declaring the respondents regular employees of
URSUMCO and, as such, entitled to the benefits under the
CBA for the regular employees.
Based on the established facts, we find that the CA grossly
misread the NLRC ruling and missed the implications of the
respondents’ regularization. To reiterate, the respondents are
regular seasonal employees, as the CA itself opined when it
declared that "private respondents who are regular workers
with respect to their seasonal tasks or activities and while
such activities exist, cannot automatically be governed by the

7

12
[ G.R. No. 199554, February 18, 2015 ]
ZENAIDA PAZ, PETITIONER, VS. NORTHERN TOBACCO
REDRYING CO., INC., AND/OR ANGELO ANG,
RESPONDENTS.
DECISION
LEONEN, J.:
Zenaida Paz filed this Petition[1] praying that "the computation
of Petitioner's Retirement Pay as determined by the National
Labor Relations Commission in its Decision dated 08
December 2008 be reinstated."[2]
Northern Tobacco Redrying Co., Inc. (NTRCI), a flue-curing
and redrying of tobacco leaves business,[3] employs
approximately 100 employees with seasonal workers "tasked
to sort, process, store and transport tobacco leaves during the
tobacco season of March to September."[4]
NTRCI hired Zenaida Paz (Paz) sometime in 1974 as a
seasonal sorter, paid P185.00 daily. NTRCI regularly re-hired
her every tobacco season since then. She signed a seasonal
job contract at the start of her employment and a pro-forma
application letter prepared by NTRCI in order to qualify for the
next season.[5]
On May 18, 2003,[6] Paz was 63 years old when NTRCI
informed her that she was considered retired under company
policy.[7] A year later, NTRCI told her she would receive
P12,000.00 as retirement pay.[8]
Paz, with two other complainants, filed a Complaint for illegal
dismissal against NTRCI on March 4, 2004.[9] She amended
her Complaint on April 27, 2004 into a Complaint for payment
of retirement benefits, damages, and attorney's fees[10] as
P12,000.00 seemed inadequate for her 29 years of
service.[11] The Complaint impleaded NTRCI's Plant
Manager, Angelo Ang, as respondent.[12] The Complaint
was part of the consolidated Complaints of 17 NTRCI
workers.[13]
NTRCI countered that no Collective Bargaining Agreement
(CBA) existed between NTRCI and its workers. Thus, it
computed the retirement pay of its seasonal workers based
on Article 287 of the Labor Code.[14]
NTRCI raised the requirement of at least six months of service
a year for that year to be considered in the retirement pay
computation. It claimed that Paz only worked for at least six
months in 1995, 1999, and 2000 out of the 29 years she
rendered service. Thus, Paz's retirement pay amounted to
P12,487.50 after multiplying her ?185.00 daily salary by 22½
working days in a month, for three years.[15]
The Labor Arbiter in his Decision[16] dated July 26, 2005
"[c]onfirm[ed] that the correct retirement pay of Zenaida M.
Paz [was] ?12,487.50."[17]
The National Labor Relations Commission in its Decision[18]
dated December 8, 2008 modified the Labor Arbiter's
Decision. It likewise denied reconsideration. The Decision's
dispositive portion reads:
WHEREFORE, premises considered, the decision of the labor
arbiter is hereby MODIFIED. Complainant Appellant Zenaida
Paz['s] retirement pay should be computed pursuant to RA
7641 and that all the months she was engaged to work for
respondent for the last twenty eight (28) years should be
added and divide[d] by six (for a fraction of six months is
considered as one year) to get the number of years [for] her
retirement pay[.] Complainant Teresa Lopez is hereby
entitled to her separation pay computed at one half month pay
for every year of service, a fraction of six months shall be
considered as one year, plus backwages from the time she
was illegally dismissed up to the filing of her complaint.
The rest of the decision stays.
SO ORDERED.[19]
The Court of Appeals in its Decision[20] dated May 25, 2011
dismissed the Petition and modified the National Labor
Relations Commission's Decision in that "financial assistance
is awarded to . . . Zenaida Paz in the amount of
P60,356.25":[21]
WHEREFORE, the Petition is hereby DISMISSED. The
Decision dated 8 December 2008 and Resolution dated 16
September 2009 of the National Labor Relations Commission
in NLRC CA No. 046642-05(5) are MODIFIED in that (1)
financial assistance is awarded to private respondent Zenaida
Paz in the amount of P60,356.25; and (2) the dismissal of
private respondent Teresa Lopez is declared illegal, and thus,
she is awarded backwages and separation pay, in accordance
with the foregoing discussion.
SO ORDERED.[22]
The Court of Appeals found that while applying the clear text
of Article 287 resulted in the amount of P12,487.50 as
retirement pay, "this amount [was] so meager that it could
hardly support . . . Paz, now that she is weak and old, unable
to find employment."[23] It discussed jurisprudence on
financial assistance and deemed it appropriate to apply the
formula: One-half-month pay multiplied by 29 years of service
divided by two yielded P60,356.25 as Paz's retirement
pay.[24]
Paz comes before this court seeking to reinstate the National
Labor Relations Commission's computation.[25] NTRCI filed
its Comment,[26] and this court deemed waived the filing of a
Reply.[27]
Petitioner Paz contends that respondent NTRCI failed to
prove the alleged company policy on compulsory retirement
for employees who reached 60 years of age or who rendered
30 years of service, whichever came first.[28] Consequently,
Article 287, as amended by Republic Act No. 7641,[29]
applies and entitles her to "retirement pay . . . equivalent to [at
least] one-half month salary for every year of service, a
fraction of at least six (6) months being considered as one
whole year."[30] She adds that she was then 63 years old,
and while one may opt to retire at 60 years old, the compulsory
retirement age is 65 years old under Article 287, as
amended.[31]
Petitioner Paz then argues respondent NTRCI's misplaced
reliance on Philippine Tobacco Flue-Curing & Redrying Corp.
v. National Labor Relations Commission[32] as that case
involved separation pay computation.[33]
Lastly, petitioner Paz contends lack of legal basis that "an
employee should have at least worked for six (6) months for a
particular season for that season to be included in the
computation of retirement pay[.]"[34] She submits that regular
8
seasonal employees are still considered employees during
offseason, and length of service determination should be
applied
13
in retiree's favor.[35]
Respondent NTRCI counters that in retirement pay
computation this court should consider its ruling in Philippine
Tobacco on computing separation pay of seasonal
employees. It submits that the proviso "a fraction of at least
six (6) months being considered as one (1) whole year"
appears in both Article 287 on retirement pay and Articles 283
and 284 on separation pay.[36]
Respondent NTRCI argues that unlike regular employees,
seasonal workers like petitioner Paz can offer their services to
other employers during off-season. Thus, the six-month rule
avoids the situation where seasonal workers receive
retirement pay twice an even more favorable position
compared with regular employees.[37]
Both parties appear to agree on petitioner Paz's entitlement to
retirement pay. The issue before this court involves its proper
computation. We also resolve whether there was illegal
dismissal.
We affirm the Court of Appeals' decision with modification.
Regular seasonal employees
Article 280[38] of the Labor Code and jurisprudence identified
three types of employees, namely: "(1) regular employees or
those who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer; (2) project employees or those whose
employment has been fixed for a specific project or
undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season;
and (3) casual employees or those who are neither regular nor
project employees."[39]
Jurisprudence also recognizes the status of regular seasonal
employees.[40]
Mercado, Sr. v. National Labor Relations Commission[41] did
not consider as regular employees the rice and sugar
farmland workers who were paid with daily wages. This was
anchored on the Labor Arbiter's findings that "petitioners were
required to perform phases of agricultural work for a definite
period, after which their services [were] available to any farm
owner."[42]
This court explained that the proviso in the second paragraph
of Article 280 in that "any employee who has rendered at least
one year of service, whether such service is continuous or
broken, shall be considered a regular employee" applies only
to "casual" employees and not "project" and regular
employees in the first paragraph of Article 280.[43]
On the other hand, the workers of La Union Tobacco Redrying
Corporation in Abasolo v. National Labor Relations
Commission[44] were considered regular seasonal
employees since they performed services necessary and
indispensable to the business for over 20 years, even if their
work was only during tobacco season.[45] This court applied
the test laid down in De Leon v. National Labor Relations
Commission[46] for determining regular employment status:
[T]he test of whether or not an employee is a regular employee
has been laid down in De Leon v. NLRC, in which this Court
held:
The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to the
usual trade or business of the employer. The test is whether
the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be
determined by considering the nature of the work performed
and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing
the job for at least 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.
Thus, the nature of one's employment does not depend solely
on the will or word of the employer. Nor on the procedure for
hiring and the manner of designating the employee, but on the
nature of the activities to be performed by the employee,
considering the employer's nature of business and the
duration and scope of work to be done.
In the case at bar, while it may appear that the work of
petitioners is seasonal, inasmuch as petitioners have served
the company for many years, some for over 20 years,
performing services necessary and indispensable to
LUTORCO's business, serve as badges of regular
employment. Moreover, the fact that petitioners do not work
continuously for one whole year but only for the duration of the
tobacco season does not detract from considering them in
regular employment since in a litany of cases this Court has
already settled that seasonal workers who are called to work
from time to time and are temporarily laid off during offseason
are not separated from service in said period, but are merely
considered on leave until re-employed.
Private respondent's reliance on the case of Mercado v. NLRC
is misplaced considering that since in said case of Mercado,
although the respondent company therein consistently availed
of the services of the petitioners therein from year to year, it
was clear that petitioners therein were not in respondent
company's regular employ. Petitioners therein performed
different phases of agricultural work in a given year. However,
during that period, they were free to contract their services to
work for other farm owners, as in fact they did. Thus, the
Court ruled in that case that their employment would naturally
end upon the completion of each project or phase of farm work
for which they have been contracted.[47] (Emphasis supplied,
citations omitted)
The sugarcane workers in Hacienda Fatima v. National
Federation of Sugarcane Workers-Food and General
Trade[48] were also considered as regular employees since
they performed the same tasks every season for several
years:
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. . . .
Evidently, petitioners employed respondents for more than
9
one season. Therefore, the general rule of regular
employment is applicable.
....
The CA did not err when it ruled that Mercado v. NLRC was
14
not applicable to the case at bar. In the earlier case, the
workers were required to perform phases of agricultural work
for a definite period of time, after which their services would
be available to any other farm owner. They were not hired
regularly and repeatedly for the same phase/s of agricultural
work, but on and off for any single phase thereof. On the other
hand, herein respondents, having performed the same tasks
for petitioners every season for several years, are considered
the latter's regular employees for their respective tasks.
Petitioners' eventual refusal to use their services even if they
were ready, able and willing to perform their usual duties
whenever these were available and hiring of other workers to
perform the tasks originally assigned to respondents
amounted to illegal dismissal of the latter.[49] (Emphasis
supplied, citation omitted)
Respondent NTRCI engaged the services of petitioner Paz as
a seasonal sorter[50] and had been regularly rehired from
1974,[51] until she was informed in 2003 that she was being
retired under company policy.[52]
The services petitioner Paz performed as a sorter were
necessary and indispensable to respondent NTRCI's
business of flue-curing and redrying tobacco leaves. She was
also regularly rehired as a sorter during the tobacco seasons
for 29 years since 1974. These considerations taken together
allowed the conclusion that petitioner Paz was a regular
seasonal employee, entitled to rights under Article 279[53] of
the Labor Code:
Art. 279. Security of Tenure. In cases of regular employment,
the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Illegal dismissal and backwages
Petitioner Paz initially filed a Complaint for illegal dismissal
seeking separation pay, but later amended her Complaint into
one for payment of retirement pay.[54] Despite the
amendment, she maintained in her subsequent pleadings that
she had been made to retire even before she reached the
compulsory retirement age of 65 under Article 287, as
amended.[55]
Petitioner Paz alleged that respondent NTRCI required her to
report on March 18, 2003 for the 2003 tobacco season, but
she suffered a mild stroke sometime in April. Nevertheless,
respondent NTRCI extended her employment contract until
May 18, 2003 when she was informed that she was retired
under company policy.[56]
Since petitioner Paz was "unlearned and not knowledgeable
in law, [she] just accepted such fact and waited to be paid her
separation/retirement benefit as promised by . . . NTRCI."[57]
Unfortunately, after a year of waiting, respondent NTRCI only
offered her around P12,000.00 for all her services since
1974.[58]
The National Labor Relations Commission recognized that
like the other complainants against respondent NTRCI,
petitioner Paz "was at a loss in what cause of action to take
whether illegal dismissal or payment of retirement pay."[59]
Petitioner Paz's amendment of her Complaint was not fatal to
her cause of action for illegal dismissal.
First, petitioner Paz never abandoned her argument that she
had not reached the compulsory retirement age of 65
pursuant to Article 287, as amended, when respondent
NTRCI made her retire on May 18, 2003.
Second, the National Labor Relations Commission found that
respondent NTRCI failed to prove a valid company retirement
policy, yet it required its workers to retire after they had
reached the age of 60.[60] The Court of Appeals also
discussed that while respondent NTRCI produced guidelines
on its retirement policy for seasonal employees, it never
submitted a copy of its Collective Bargaining Agreement and
even alleged in its Position Paper that none existed.[61]
Petitioner Paz was only 63 years old on May 18, 2003 with
two more years remaining before she would reach the
compulsory retirement age of 65.
"Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee
whereby the latter, after reaching a certain age, agrees to
sever his or her employment with the former."[62] Article 287,
as amended, allows for optional retirement at the age of at
least 60 years old.
Consequently, if "the intent to retire is not clearly established
or if the retirement is involuntary, it is to be treated as a
discharge."[63]
The National Labor Relations Commission considered
petitioner Paz's amendment of her Complaint on April 27,
2004 akin to an optional retirement when it determined her as
illegally dismissed from May 18, 2003 to April 27, 2004, thus
being entitled to full backwages from May 19, 2003 until April
26, 2004.[64]
Again, petitioner Paz never abandoned her argument of illegal
dismissal despite the amendment of her Complaint. This
implied lack of intent to retire until she reached the compulsory
age of 65. Thus, she should be considered as illegally
dismissed from May 18, 2003 until she reached the
compulsory retirement age of 65 in 2005 and should be
entitled to full backwages for this period.
An award of full backwages is "inclusive of allowances and
other benefits or their monetary equivalent, from the time their
actual compensation was withheld. . . ."[65]
Backwages, considered as actual damages,[66] requires
proof of the loss suffered. The Court of Appeals found "no
positive proof of the total number of months that she actually
rendered work."[67] Nevertheless, petitioner Paz's daily pay
of P185.00 was established. She also alleged that her
employment periods ranged from three to seven months.[68]
Since the exact number of days petitioner Paz would have
worked between May 18, 2003 until she would turn 65 in 2005
could not be determined with specificity, this court thus
awards full backwages in the amount of P22,200.00 computed
10
by multiplying P185.00 by 20 days, then by three months, then
by two years.
Due process and nominal damages
The Labor Code requires employers to comply with both
procedural and substantive due process in dismissing
employees. Agabon v. National Labor Relations
15
Commission[69] discussed these rules and enumerated the
four possible situations considering these rules:
Dismissals based on just causes contemplate acts or
omissions attributable to the employee while dismissals based
on authorized causes involve grounds under the Labor Code
which allow the employer to terminate employees. A
termination for an authorized cause requires payment of
separation pay. When the termination of employment is
declared illegal, reinstatement and full backwages are
mandated under Article 279. If reinstatement is no longer
possible where the dismissal was unjust, separation pay may
be granted.
Procedurally, (1) if the dismissal is based on a just cause
under Article 282, the employer must give the employee two
written notices and a hearing or opportunity to be heard if
requested by the employee before terminating the
employment: a notice specifying the grounds for which
dismissal is sought a hearing or an opportunity to be heard
and after hearing or opportunity to be heard, a notice of the
decision to dismiss; and (2) if the dismissal is based on
authorized causes under Articles 283 and 284, the employer
must give the employee and the Department of Labor and
Employment written notices 30 days prior to the effectivity of
his separation.
From the foregoing rules four possible situations may be
derived: (1) the dismissal is for a just cause under Article 282
of the Labor Code, for an authorized cause under Article 283,
or for health reasons under Article 284, and due process was
observed; (2) the dismissal is without just or authorized cause
but due process was observed; (3) the dismissal is without just
or authorized cause and there was no due process; and (4)
the dismissal is for just or authorized cause but due process
was not observed.
In the first situation, the dismissal is undoubtedly valid and the
employer will not suffer any liability.
In the second and third situations where the dismissals are
illegal, Article 279 mandates that the employee is entitled to
reinstatement without loss of seniority rights and other
privileges and full backwages, inclusive of allowances, and
other benefits or their monetary equivalent computed from the
time the compensation was not paid up to the time of actual
reinstatement.
In the fourth situation, the dismissal should be upheld. While
the procedural infirmity cannot be cured, it should not
invalidate the dismissal. However, the employer should be
held liable for non-compliance with the procedural
requirements of due process.[70] (Emphasis in the original)
Agabon focused on the fourth situation when dismissal was
for just or authorized cause, but due process was not
observed.[71] Agaboninvolved a dismissal for just cause, and
this court awarded P30,000.00 as nominal damages for the
employer's non-compliance with statutory due process.[72]
Jaka Food Processing Corporation v. Pacot[73] involved a
dismissal for authorized cause, and this court awarded
P50,000.00 as nominal damages for the employer's non-
compliance with statutory due process.[74] The difference in
amounts is based on the difference in dismissal ground.[75]
Nevertheless, this court has sound discretion in determining
the amount based on the relevant circumstances.[76] In De
Jesus v. Aquino,[77] this court awarded P50,000.00 as
nominal damages albeit the dismissal was for just cause.[78]
Petitioner Paz's case does not fall under the fourth situation
but under the third situation on illegal dismissal for having no
just or authorized cause and violation of due process.
Respondent NTRCI had considered petitioner Paz retired at
the age of 63 before she reached the compulsory age of 65.
This does not fall under the just causes for termination in
Article 282 of the Labor Code, the authorized causes for
termination in Article 283, or disease as a ground for
termination in Article 284.
As regards due process, the Omnibus Rules Implementing the
Labor Code provides:
Section 2. Standard of due process: requirements of notice.
In all cases of termination of employment, the following
standards of due process shall be substantially observed.
I. For termination of employment based on just causes as
defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the
ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his
side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and
(c) A written notice [of] termination served on the employee
indicating that upon due consideration of all the circumstance,
grounds have been established to justify his termination. . .
.[79]
There was no showing that respondent NTRCI complied with
these due process requisites. Thus, consistent with
jurisprudence,[80]petitioner Paz should be awarded
P30,000.00 as nominal damages.
Retirement pay
An employer may provide for retirement benefits in an
agreement with its employees such as in a Collective
Bargaining Agreement. Otherwise, Article 287 of the Labor
Code, as amended, governs.
Since respondent NTRCI failed to present a copy of a
Collective Bargaining Agreement on the alleged retirement
policy,[81] we apply Article 287 of the Labor Code, as
amended by Republic Act No. 7641. This provides for the
proper computation of retirement benefits in the absence of a
retirement plan or agreement:[82]
In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (60) years or more,
11
but not beyond sixty-five (65) years which is hereby declared
the compulsory retirement age, who has served at least five
(5) years in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six
(6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term
16
'one-half (1/2) month salary' shall mean fifteen (15) days plus
one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive
leaves.[83] (Emphasis supplied)
Respondent NTRCI followed the formula in Article 287 and
offered petitioner Paz the amount of P12,487.50[84] as
retirement pay based on the three years she worked for at
least six months in 1995, 1999, and 2000.[85]
The Labor Arbiter agreed with respondent NTRCI's
computation based on these three years and reached the
same amount as petitioner Paz's retirement pay.[86]
On appeal, the National Labor Relations Commission found
that petitioner Paz "became a regular seasonal employee by
virtue of her long years of service and the repetitive hiring of
her services by respondent NTRCI every season."[87] It then
considered her as having worked for every tobacco season
from 1974 to 2003 or for a total of 29 years.[88]
The National Labor Relations Commission discussed that "[i]t
would be a great injustice if [petitioner Paz's] services which
did not last long for six months be disregarded in computing
her retirement pay especially so that it is upon the sole
discretion of the respondent company on how long her
services for a given season was required."[89] Thus, it
explained that "Zenaida Paz's retirement pay should be
computed pursuant to RA 7641 and that all the months she
was engaged to work for respondent for the last twenty eight
(28) years should be added and divide[d] by six (for a fraction
of six months is considered as one year) to get the number of
years her retirement pay should be computed."[90]
The National Labor Relations Commission also discussed that
applying the computation of separation pay in Philippine
Tobacco to this case "would render nugatory the very purpose
of RA 7641, which seeks to reward employees of their long
and dedicated service to their employer, as well as its
humanitarian purpose to provide for the retiree's sustenance
and hopefully even comfort, when he no longer has the
stamina to continue earning his livelihood."[91]
This court in Philippine Tobacco explained its computation of
separation pay as follows:
The amount of separation pay is based on two factors: the
amount of monthly salary and the number of years of service.
Although the Labor Code provides different definitions as to
what constitutes "one year of service," Book Six does not
specifically define "one year of service" for purposes of
computing separation pay. However, Articles 283 and 284
both state in connection with separation pay that a fraction of
at least six months shall be considered one whole year.
Applying this to the case at bar, we hold that the amount of
separation pay which respondent members of the Lubat and
Luris groups should receive is one-half (1/2) their respective
average monthly pay during the last season they worked
multiplied by the number of years they actually rendered
service, provided that they worked for at least six months
during a given year.
The formula that petitioner proposes, wherein a year of work
is equivalent to actual work rendered for 303 days, is both
unfair and inapplicable, considering that Articles 283 and 284
provide that in connection with separation pay, a fraction of at
least six months shall be considered one whole year. Under
these provisions, an employee who worked for only six
months in a given year which is certainly less than 303 days
is
considered to have worked for one whole year.
. . . . Finally, Manila Hotel Company v. CIR did not rule that
seasonal workers are considered at work during off-season
with regard to the computation of separation pay. Said case
merely held that, in regard to seasonal workers, the
employeremployee relationship is not severed during off-
season but merely suspended.[92] (Citations omitted)
Philippine Tobacco considered Articles 283 and 284 of the
Labor Code on separation pay, and these articles include the
proviso "a fraction of at least six (6) months shall be
considered one (1) whole year."
While the present case involves retirement pay and not
separation pay, Article 287 of the Labor Code on retirement
pay similarly provides that "a fraction of at least six (6) months
being considered as one whole year."
Thus, this court's reading of this proviso in the Labor Code in
Philippine Tobacco applies in this case. An employee must
have rendered at least six months in a year for said year to be
considered in the computation.
Petitions for review pursuant to Rule 45 of the Rules of Court
can raise only questions of law.[93] Generally, this court
accords great respect for factual findings by quasi-judicial
bodies, even according such findings with finality when
supported by substantial evidence.[94]
The Court of Appeals found "no positive proof o[n] the total
number of months [petitioner Paz] actually rendered work [for
respondent NTRCI]."[95] On the other hand, both the Labor
Arbiter and the Court of Appeals established from the records
that she rendered at least six months of service for 1995,
1999, and 2000 only.[96]
Based on these factual findings, retirement pay pursuant to
Article 287 of the Labor Code was correctly computed at
P12,487.50 and was awarded to petitioner Paz.
Financial assistance
In addition, this court agrees with the Court of Appeals' award
of financial assistance in the amount of P60,356.25[97] by
applying the following formula: one-half-month pay[98]
multiplied by 29 years in service and then divided by 2.[99]
The amount of P12,487.50 is indeed too meager to support
petitioner Paz who has become old, weak, and unable to find
employment.[100]
Republic Act No. 7641 is a social legislation[101] with the
purpose of "provid[ing] for the retiree's sustenance and
hopefully even comfort, when he [or she] no longer has the
stamina to continue earning his [or her] livelihood."[102]
The Court of Appeals recognized and emphasized petitioner
Paz's three decades of hard work and service with respondent
12
NTRCI. However, it disagreed with the National Labor
Relations Commission's retirement pay computation for lack
of factual basis:
Private respondent Paz rendered almost three decades of
dedicated service to petitioner, and to that, she gave away the
prime of her life. In those long years of hard work, not a single
transgression or malfeasance of any company rule or
regulation was ever reported against her. Old age and
17
infirmity now weaken her chances of employment. Veritably,
We can call upon the same "social and compassionate
justice" allowing financial assistance in special circumstances.
These circumstances indubitably merit equitable
concessions, via the principle of "compassionate justice" for
the working class.
In awarding retirement benefits, the NLRC deemed it proper
to add all the months of service rendered by private
respondent Paz, then divide it by six to arrive at the number
of years of service. We cannot, however, subscribe to this
computation because there is no positive proof of the total
number of months that she actually rendered work.[103]
(Emphasis supplied, citations omitted)
At most, the Petition alleges that "[p]etitioner [was] regularly
hired every season by respondents, her employment periods
ranging from three (3) to seven (7) months."[104] None of the
lower courts, not even the National Labor Relations
Commission that proposed the formula, made a factual
determination on the total number of months petitioner Paz
rendered actual service.
In any event, this court has awarded financial assistance "as
a measure of social justice [in] exceptional circumstances,
and as an equitable concession."[105]
In Eastern Shipping Lines, Inc. v. Sedan,[106] Sedan was
granted equitable assistance equal to one-half-month pay for
each year of his 23 years of service with no derogatory
record.[107] This court discussed jurisprudence on the grant
of financial assistance:
We are not unmindful of the rule that financial assistance is
allowed only in instances where the employee is validly
dismissed for causes other than serious misconduct or those
reflecting on his moral character. Neither are we unmindful of
this Court's pronouncements in Arc-Men Food Industries
Corporation v. NLRC, and Lemery Savings and Loan Bank v.
NLRC, where the Court ruled that when there is no dismissal
to speak of, an award of financial assistance is not in order.
But we must stress that this Court did allow, in several
instances, the grant of financial assistance. In the words of
Justice Sabino de Leon, Jr., now deceased, financial
assistance may be allowed as a measure of social justice and
exceptional circumstances, and as an equitable concession.
The instant case equally calls for balancing the interests of the
employer with those of the worker, if only to approximate what
Justice Laurel calls justice in its secular sense.
In this instance, our attention has been called to the following
circumstances: that private respondent joined the company
when he was a young man of 25 years and stayed on until he
was 48 years old; that he had given to the company the best
years of his youth, working on board ship for almost 24 years;
that in those years there was not a single report of him
transgressing any of the company rules and regulations; that
he applied for optional retirement under the company's
noncontributory plan when his daughter died and for his own
health reasons; and that it would appear that he had served
the company well, since even the company said that the
reason it refused his application for optional retirement was
that it still needed his services; that he denies receiving the
telegram asking him to report back to work; but that
considering his age and health, he preferred to stay home
rather than risk further working in a ship at sea.
In our view, with these special circumstances, we can call
upon the same "social and compassionate justice" cited in
several cases allowing financial assistance. These
circumstances indubitably merit equitable concessions, via
the principle of "compassionate justice" for the working class.
Thus, we agree with the Court of Appeals to grant financial
assistance to private respondent.[108] (Citations omitted)
We agree with the Court of Appeals that petitioner Paz's
circumstances "indubitably merit equitable concessions, via
the principle of 'compassionate justice' for the working
class."[109]
Petitioner Paz worked for respondent NTRCI for close to three
decades. She had no record of any malfeasance or violation
of company rules in her long years of service.[110] Her
advanced age has rendered her weak and lessened her
employment opportunities.
Eastern Shipping Lines awarded Sedan with financial
assistance equal to one-half-month pay for every year of
service. Sedan was hired as a 3rd marine engineer and oiler
from 1973 until his last voyage in 1997.[111] On the other
hand, petitioner Paz was a seasonal employee who worked
for periods ranging from three to seven months a year.[112]
This court thus finds the following Court of Appeals formula
for financial assistance as equitable: one-half-month pay
multiplied by 29 years in service and then divided by 2.
This court has discussed that "labor law determinations are
not only secundum rationem but also secundum
caritatem."[113] The award of P60,356.25 as financial
assistance will serve its purpose in providing petitioner Paz
sustenance and comfort after her long years of service.
Finally, legal interest of 6% per annum shall be imposed on
the award of full backwages beginning May 18, 2003 when
petitioner Paz was deemed retired, until 2005 when she
reached compulsory retirement age, in the amount of
P2,664.00[114] Legal interest of 6% per annum shall also be
imposed on the award of retirement pay beginning 2005 until
full satisfaction.
WHEREFORE, the Court of Appeals Decision is AFFIRMED
with MODIFICATION in that respondent Northern Tobacco
Redrying Co., Inc. is hereby ordered to pay petitioner Zenaida
Paz the following:
(1) P22,200.00 as full backwages;
(2) P30,000.00 as nominal damages for non-compliance with
due process;
(3) P12,487.50 as retirement pay;
(4) P60,356.25 as financial assistance; and
(5) P2,664.00 as legal interest for the award of full backwages,
and legal interest of 6% per annum for the award of retirement
pay beginning 2005 until full satisfaction.
13
G.R. No. 79869 September 5, 1991
18
FORTUNATO MERCADO, SR., ROSA MERCADO,
FORTUNATO MERCADO, JR., ANTONIO MERCADO, JOSE
CABRAL, LUCIA MERCADO, ASUNCION GUEVARA,
ANITA MERCADO, MARINA MERCADO, JULIANA
CABRAL, GUADALUPE PAGUIO, BRIGIDA ALCANTARA,
EMERLITA MERCADO, ROMEO GUEVARA, ROMEO
MERCADO and LEON SANTILLAN, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC),
THIRD DIVISION; LABOR ARBITER LUCIANO AQUINO,
RAB-III; AURORA L. CRUZ; SPOUSES FRANCISCO DE
BORJA and LETICIA DE BORJA; and STO. NIÑO REALTY,
INCORPORATED, respondents.
Servillano S. Santillan for petitioners. Luis R. Mauricio for
private respondents.
PADILLA, J.:
Assailed in this petition for certiorari is the decision * of the
respondent national Labor Relations Commission (NLRC)
dated 8 August 1984 which affirmed the decision of
respondent Labor Arbiter Luciano P. Aquino with the slight
modification of deleting the award of financial assistance to
petitioners, and the resolution of the respondent NLRC dated
17 August 1987, denying petitioners' motion for
reconsideration.
This petition originated from a complaint for illegal dismissal,
underpayment of wages, non-payment of overtime pay,
holiday pay, service incentive leave benefits, emergency cost
of living allowances and 13th month pay, filed by abovenamed
petitioners against private respondents Aurora L. Cruz,
Francisco Borja, Leticia C. Borja and Sto. Niño Realty
Incorporated, with Regional Arbitration Branch No. III,
National Labor Relations Commission in San Fernando,
Pampanga.1
Petitioners alleged in their complaint that they were
agricultural workers utilized by private respondents in all the
agricultural phases of work on the 7 1/2 hectares of ace land
and 10 hectares of sugar land owned by the latter; that
Fortunato Mercado, Sr. and Leon Santillan worked in the farm
of private respondents since 1949, Fortunato Mercado, Jr.
and Antonio Mercado since 1972 and the rest of the
petitioners since 1960 up to April 1979, when they were all
allegedly dismissed from their employment; and that, during
the period of their employment, petitioners received the
following daily wages:
From 1962-1963 — P1.50 1963-1965 — P2.00 1965-1967 —
P3.00 1967-1970 — P4.00 1970-1973 — P5.00 1973-1975 —
P5.00 1975-1978 — P6.00 1978-1979 — P7.00
Private respondent Aurora Cruz in her answer to petitioners'
complaint denied that said petitioners were her regular
employees and instead averred that she engaged their
services, through Spouses Fortunato Mercado, Sr. and Rosa
Mercado, their "mandarols", that is, persons who take charge
in supplying the number of workers needed by owners of
various farms, but only to do a particular phase of agricultural
work necessary in rice production and/or sugar cane
production, after which they would be free to render services
to other farm owners who need their services.2
The other private respondents denied having any relationship
whatsoever with the petitioners and state that they were
merely registered owners of the land in question included as
corespondents in this case.3
The dispute in this case revolves around the issue of whether
or not petitioners are regular and permanent farm workers and
therefore entitled to the benefits which they pray for. And
corollary to this, whether or not said petitioners were illegally
dismissed by private respondents.
Respondent Labor Arbiter Luciano P. Aquino ruled in favor of
private respondents and held that petitioners were not regular
and permanent workers of the private respondents, for the
nature of the terms and conditions of their hiring reveal that
they were required to perform phases of agricultural work for
a definite period of time after which their services would be
available to any other farm owner.4 Respondent Labor Arbiter
deemed petitioners' contention of working twelve (12) hours a
day the whole year round in the farm, an exaggeration, for the
reason that the planting of lice and sugar cane does not entail
a whole year as reported in the findings of the Chief of the
NLRC Special Task Force.5 Even the sworn statement of one
of the petitioners, Fortunato Mercado, Jr., the son of spouses
Fortunato Mercado, Sr. and Rosa Mercado, indubitably show
that said petitioners were hired only as casuals, on an "on and
off" basis, thus, it was within the prerogative of private
respondent Aurora Cruz either to take in the petitioners to do
further work or not after any single phase of agricultural work
had been completed by them.6
Respondent Labor Arbiter was also of the opinion that the real
cause which triggered the filing of the complaint by the
petitioners who are related to one another, either by
consanguinity or affinity, was the filing of a criminal complaint
for theft against Reynaldo Mercado, son of spouses Fortunate
Mercado, Sr. and Rosa Mercado, for they even asked the help
of Jesus David, Zone Chairman of the locality to talk to private
respondent, Aurora Cruz regarding said criminal case.7 In his
affidavit, Jesus David stated under oath that petitioners were
never regularly employed by private respondent Aurora Cruz
but were, on-and-off hired to work and render services when
needed, thus adding further support to the conclusion that
petitioners were not regular and permanent employees of
private respondent Aurora Cruz.8
Respondent Labor Arbiter further held that only money claims
from years 1976-1977, 1977-1978 and 1978-1979 may be
properly considered since all the other money claims have
prescribed for having accrued beyond the three (3) year
period prescribed by law.9 On grounds of equity, however,
respondent Labor Arbiter awarded petitioners financial
assistance by private respondent Aurora Cruz, in the amount
of Ten Thousand Pesos (P10,000.00) to be equitably divided
among an the petitioners except petitioner Fortunato
Mercado, Jr. who had manifested his disinterest in the further
prosecution of his complaint against private respondent.10
Both parties filed their appeal with the National Labor
Relations Commissions (NLRC). Petitioners questioned
19
respondent Labor Arbiter's finding that they were not regular
and permanent employees of private respondent Aurora Cruz
while private respondents questioned the award of financial
assistance granted by respondent Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the
decision of the respondent Labor Arbiter, with the modification
of the deletion of the award for financial assistance to
petitioners. The dispositive portion of the decision of the
NLRC reads:
WHEREFORE, the Decision of Labor Arbiter Luciano P.
Aquino dated March 3, 1983 is hereby modified in that the
award of P10,000.00 financial assistance should be deleted.
The said Decision is affirmed in all other aspects.
SO ORDERED.11
Petitioners filed a motion for reconsideration of the Decision
of the Third Division of the NLRC dated 8 August 1984;
however, the NLRC denied tills motion in a resolution dated
17 August 1987.12
In the present Petition for certiorari, petitioners seek the
reversal of the above-mentioned rulings. Petitioners contend
that respondent Labor Arbiter and respondent NLRC erred
when both ruled that petitioners are not regular and
14
permanent employees of private respondents based on the
terms and conditions of their hiring, for said findings are
contrary to the provisions of Article 280 of the Labor Code.13
They submit that petitioners' employment, even assuming
said employment were seasonal, continued for so many years
such that, by express provision of Article 280 of the Labor
Code as amended, petitioners have become regular and
permanent employees.14
Moreover, they argue that Policy Instruction No. 1215 of the
Department of Labor and Employment clearly lends support
to this contention, when it states:
PD 830 has defined the concept of regular and casual
employment. What determines regularity or casualness is not
the employment contract, written or otherwise, but the nature
of the job. If the job is usually necessary or desirable to the
main business of the employer, then employment is regular. If
not, then the employment is casual. Employment for a definite
period which exceeds one (1) year shall be considered re for
the duration of the definite period.
This concept of re and casual employment is designed to put
an end to casual employment in regular jobs which has been
abused by many employers to prevent so-called casuals from
enjoying the benefits of regular employees or to prevent
casuals from joining unions.
This new concept should be strictly enforced to give meaning
to the constitutional guarantee of employment tenure.16
Tested under the laws invoked, petitioners submit that it would
be unjust, if not unlawful, to consider them as casual workers
since they have been doing all phases of agricultural work for
so many years, activities which are undeniably necessary,
desirable and indispensable in the rice and sugar cane
production business of the private respondents.17
In the Comment filed by private respondents, they submit that
the decision of the Labor Arbiter, as aimed by respondent
NLRC, that petitioners were only hired as casuals, is based
on solid evidence presented by the parties and also by the
Chief of the Special Task Force of the NLRC Regional Office
and, therefore, in accordance with the rule on findings of fact
of administrative agencies, the decision should be given great
weight.18 Furthermore, they contend that the arguments used
by petitioners in questioning the decision of the Labor Arbiter
were based on matters which were not offered as evidence in
the case heard before the regional office of the then Ministry
of Labor but rather in the case before the Social Security
Commission, also between the same parties.19
Public respondent NLRC filed a separate comment prepared
by the Solicitor General. It submits that it has long been settled
that findings of fact of administrative agencies if supported by
substantial evidence are entitled to great weight.20 Moreover,
it argues that petitioners cannot be deemed to be permanent
and regular employees since they fall under the exception
stated in Article 280 of the Labor Code, which reads:
The provisions of written agreements to the contrary
notwithstanding and regardless of the oral agreements of the
parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion
or termination of which has been determined at the time of the
engagement of the employee or where the work or services to
be performed is seasonal in nature and the employment is for
the duration of the season.21(emphasis supplied)
The Court resolved to give due course to the petition and
required the parties to submit their respective memoranda
after which the case was deemed submitted for decision.
The petition is not impressed with merit.
The invariable rule set by the Court in reviewing administrative
decisions of the Executive Branch of the Government is that
the findings of fact made therein are respected, so long as
they are supported by substantial evidence, even if not
overwhelming or preponderant;22 that it is not for the
reviewing court to weigh the conflicting evidence, determine
the credibility of the witnesses or otherwise substitute its own
judgment for that of the administrative agency on the
sufficiency of the evidence;23 that the administrative decision
in matters within the executive's jurisdiction can only be set
aside upon proof of gross abuse of discretion, fraud, or error
of law.24
The questioned decision of the Labor Arbiter reads:
Focusing the spotlight of judicious scrutiny on the evidence on
record and the arguments of both parties, it is our well-
discerned opinion that the petitioners are not regular and
permanent workers
20
of the respondents. The very nature of the terms and
conditions of their hiring reveal that the petitioners were
required to perform p of cultural work for a definite period, after
which their services are available to any farm owner. We
cannot share the arguments of the petitioners that they
worked continuously the whole year round for twelve hours a
day. This, we feel, is an exaggeration which does not deserve
any serious consideration inasmuch as the plan of rice and
sugar cane does not entail a whole year operation, the area in
question being comparatively small. It is noteworthy that the
findings of the Chief of the Special Task Force of the Regional
Office are similar to this.
In fact, the sworn statement of one of the petitioners Fortunato
Mercado, Jr., the son of spouses Fortunato Mercado, Sr. and
Rosa Mercado, indubitably shows that said petitioners were
only hired as casuals, on-and-off basis. With this kind of
relationship between the petitioners and the respondent
Aurora Cruz, we feel that there is no basis in law upon which
the claims of the petitioners should be sustained, more
specially their complaint for illegal dismissal. It is within the
prerogative of respondent Aurora Cruz either to take in the
petitioners to do further work or not after any single phase of
agricultural work has been completed by them. We are of the
opinion that the real cause which triggered the filing of this
complaint by the petitioners who are related to one another,
either by consanguinity or affinity was due to the filing of a
criminal complaint by the respondent Aurora Cruz against
Reynaldo Mercado, son of spouses Fortunato Mercado, Sr.
and Rosa Mercado. In April 1979, according to Jesus David,
Zone Chairman of the locality where the petitioners and
respondent reside, petitioner Fortunato Mercado, Sr. asked
for help regarding the case of his son, Reynaldo, to talk with
respondent Aurora Cruz and the said Zone Chairman also
stated under oath that the petitioners were never regularly
employed by respondent Aurora Cruz but were on-and-off
hired to work to render services when needed.25
A careful examination of the foregoing statements reveals that
the findings of the Labor Arbiter in the case are ably supported
by evidence. There is, therefore, no circumstance that would
warrant a reversal of the questioned decision of the Labor
Arbiter as affirmed by the National Labor Relations
Commission.
The contention of petitioners that the second paragraph of
Article 280 of the Labor Code should have been applied in
their case presents an opportunity to clarify the
aforementioned provision of law.
Article 280 of the Labor Code reads in full:
Article 280. Regular and Casual Employment. — The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer, except where the
15
employment has been fixed for a specific project or termination of their employment cannot and should not
undertaking the completion or termination of which has been constitute an illegal dismissal.30
determined at the time of the engagement of the employee or WHEREFORE, the petition is DISMISSED. The decision of
where the work or services to be performed is seasonal in the National Labor Relations Commission affirming that of the
nature and the employment is for the duration of the season. Labor Arbiter, under review, is AFFIRMED. No
An employment shall be deemed to be casual if it is not pronouncement as to costs.
covered by the preceding paragraph: Provided, That, any Facts: 1. Petitioners were agricultural workers of the private
employee who has rendered at least one year of service respondent's sugar land who were dismissed. They had
whether such service is continuous or broken, shall be worked in all agriculture phases for several years in the said
considered a regular employee with respect to the activity in sugar land. The respondent denied that petitioners were
which he is employed and his employment shall continue regular employees alleging that their services were engaged
while such actually exists. through 'mandarols' or supply workers to do a particular
The first paragraph answers the question of who are phase of the agricultural work.
employees. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular 2. As a result, the petitioners filed a complaint for illegal
where he is engaged in necessary or desirable activities in the dismissal. The Labor Arbiter held that the petitioners were not
usual business or trade of the employer, except for project regular employees and the NLRC affirmed this ruling.
employees.
A project employee has been defined to be one whose Issue: W/N the petitioners are regular and permanent farm
employment has been fixed for a specific project or workers
undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee, or RULING: No, they are project/seasonal employees. A project
where the work or service to be performed is seasonal in employee is one whose employment has been fixed for a
nature and the employment is for the duration of the season26 specific project or undertaking, the completion has been
as in the present case. determined at the time of engagement, or where work or
The second paragraph of Art. 280 demarcates as "casual" service is seasonal in nature and employment is for the
employees, all other employees who do not fan under the duration of the season.
definition of the preceding paragraph. The proviso, in said
second paragraph, deems as regular employees those As such, the termination of employment cannot be considered
"casual" employees who have rendered at least one year of as illegal dismissal. The petitioners are free to contract their
service regardless of the fact that such service may be services to work for other farm owners.
continuous or broken.
Petitioners, in effect, contend that the proviso in the second
paragraph of Art. 280 is applicable to their case and that the
Labor Arbiter should have considered them regular by virtue
of said proviso. The contention is without merit.
The general rule is that the office of a proviso is to qualify or
modify only the phrase immediately preceding it or restrain or
limit the generality of the clause that it immediately follows.27
Thus, it has been held that a proviso is to be construed with
reference to the immediately preceding part of the provision
to which it is attached, and not to the statute itself or to other
sections thereof.28 The only exception to this rule is where
the clear legislative intent is to restrain or qualify not only the
phrase immediately preceding it (the proviso) but also earlier
provisions of the statute or even the statute itself as a
whole.29
Policy Instruction No. 12 of the Department of Labor and
Employment discloses that the concept of regular and casual
employees was designed to put an end to casual employment
in regular jobs, which has been abused by many employers to
prevent called casuals from enjoying the benefits of regular
employees or to prevent casuals from joining unions. The
same instructions show that the proviso in the second
paragraph of Art. 280 was not designed to stifle small-scale
businesses nor to oppress agricultural land owners to further
the interests of laborers, whether agricultural or industrial.
21

What it seeks to eliminate are abuses of employers against

their employees and not, as petitioners would have us believe,
to prevent small-scale businesses from engaging in legitimate
methods to realize profit. Hence, the proviso is applicable only
to the employees who are deemed "casuals" but not to the
"project" employees nor the regular employees treated in
paragraph one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to
use the correct term, seasonal employees, their employment
legally ends upon completion of the project or the season. The

16

HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA
L. STARKE, petitioners, vs. CANDIDO CUENCA,
FRANCISCO ACULIT, ANGELINA ALMONIA, DONALD
ALPUERTO, NIDA BANGALISAN, ROGELIO CHAVEZ,
ELMO DULINGGIS, MERCEDES EMPERADO, TORIBIO
EMPERADO, JULIANA ENCARNADO, REYNALDO
ENCARNADO, GENE FERNANDO, JOVEN FERNANDO,
HERNANI FERNANDO, TERESITA FERNANDO,
BONIFACIO GADON, JOSE GALLADA, RAMONITO
KILAYKO, ROLANDO KILAYKO, ALFREDO LASTIMOSO,
ANTONIO LOMBO, ELIAS LOMBO, EMMA LOMBO,
LAURENCIA LOMBO, LUCIA LOMBO, JOEL MALACAPAY,
ADELA MOJELLO, ERNESTO MOJELLO, FRUCTOSO
MOJELLO, JESSICA MOJELLO, JOSE MOJELLO,
MARITESS MOJELLO, MERLITA MOJELLO, ROMEO
MOJELLO, RONALDO MOJELLO, VALERIANA MOJELLO,
JAIME NEMENZO, RODOLFO NAPABLE, SEGUNDIA
OCDEN, JARDIOLINA PABALINAS, LAURO PABALINAS,
NOLI PABALINAS, RUBEN PABALINAS, ZALDY
PABALINAS, ALFREDO PANOLINO, JOAQUIN PEDUHAN,
JOHN PEDUHAN, REYNALDO PEDUHAN, ROGELIO
PEDUHAN, JOSEPHINE PEDUHAN, ANTONIO PORRAS,
JR., LORNA PORRAS, JIMMY REYES, ALICIA ROBERTO,
MARCOS ROBERTO, JR., MARIA SANGGA, RODRIGO
SANGGA, ARGENE SERON, SAMUEL SERON, SR.,
ANGELINO SENELONG, ARMANDO SENELONG, DIOLITO
SENELONG, REYNALDO SENELONG, VICENTE
SENELONG, FEDERICO STA. ANA, ROGELIO SUASIM,
EDNA TADLAS, ARTURO TITONG, JR., JOSE TITONG, JR.,
NANCY VINGNO, ALMA YANSON, JIMMY YANSON,
MYRNA VILLANUEVA BELENARIO, SALVADOR
MALACAPAY, and RAMELO TIONGCO, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review of the Decision[1] of the Court
of Appeals (CA), dated July 31, 2001, and the Resolution
dated September 24, 2001 denying the petitioners motion for
reconsideration. The assailed decision modified the decision
of the National Labor Relations Commission (NLRC) in NLRC
Case No. V-000099-98.
Hacienda Bino is a 236-hectare sugar plantation located at
Barangay Orong, Kabankalan City, Negros Occidental, and
represented in this case by Hortencia L. Starke, owner and
operator of the said hacienda.
The 76 individual respondents were part of the workforce of
Hacienda Bino consisting of 220 workers, performing various
works, such as cultivation, planting of cane points, fertilization,
watering, weeding, harvesting, and loading of harvested
sugarcanes to cargo trucks.[2]
On July 18, 1996, during the off-milling season, petitioner
Starke issued an Order or Notice which stated, thus:
To all Hacienda Employees:
Please bear in mind that all those who signed in favor of CARP
are expressing their desire to get out of employment on their
own volition.
Wherefore, beginning today, July 18, only those who did not
sign for CARP will be given employment by Hda. Bino.
( Labor Arbiter is AFFIRMED WITH MODIFICATIONS.
Sgd.) Hortencia Starke[3]
The respondents regarded such notice as a termination of
their employment. As a consequence, they filed a complaint
for illegal dismissal, wage differentials, 13th month pay,
holiday pay and premium pay for holiday, service incentive
leave pay, and moral and exemplary damages with the NLRC,
Regional Arbitration Branch No. VI, Bacolod City, on
September 17, 1996.[4]
In their Joint Sworn Statement, the respondents as
complainants alleged inter alia that they are regular and
permanent workers of the hacienda and that they were
dismissed without just and lawful cause. They further alleged
that they were dismissed because they applied as
beneficiaries under the Comprehensive Agrarian Reform
Program (CARP) over the land owned by petitioner Starke.[5]
For her part, petitioner Starke recounted that the companys
Board of Directors petitioned the Sangguniang Bayan of
Kabankalan for authority to re-classify, from agricultural to
industrial, commercial and residential, the whole of Hacienda
Bino, except the portion earmarked for the CARP. She
asserted that half of the workers supported the reclassification
but the others, which included the herein respondents, opted
to become beneficiaries of the land under the CARP.
Petitioner Starke alleged that in July 1996, there was little
work in the plantation as it was off-season; and so, on account
of the seasonal nature of the work, she issued the order giving
preference to those who supported the reclassification. She
pointed out that when the milling season began in October
1996, the work was plentiful again and she issued notices to
all workers, including the respondents, informing them of the
availability of work. However, the respondents refused to
report back to work. With respect to the respondents money
claims, petitioner Starke submitted payrolls evidencing
payment thereof.
On October 6, 1997, Labor Arbiter Ray Allan T. Drilon
rendered a Decision,[6] finding that petitioner Starkes notice
dated July 18, 1996 was tantamount to a termination of the
respondents services, and holding that the petitioner company
was guilty of illegal dismissal. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered declaring the dismissal of the complainants illegal
and ordering respondent Hortencia L. Starke, Inc. represented
by Hortencia L. Starke, as President, to:
1. Reinstate the complainants to their former position without
loss of seniority rights immediately upon receipt of this
decision;
2. PAY the backwages and wage differentials of the
complainants, to wit:
23
in the total amount of Four Hundred NinetyFive Thousand
Eight Hundred Fifty-Two and 72/100 (P495,852.72) Pesos;
and
3. TO PAY the complainants attorney's fee in the amount of
Forty-Nine Thousand Five Hundred Eighty-Five and 27/100
(P49,585.27) Pesos.
Respondents are further directed to deposit to this Office the
total judgment award of FIVE HUNDRED FORTY-FIVE
THOUSAND AND FOUR HUNDRED THIRTY-SEVEN AND
99/100 (P545,437.99) PESOS within ten (10) days from
receipt of this decision.
All other claims are hereby DISMISSED for lack of merit.
SO ORDERED.[7]
Both the petitioners and the respondents appealed the case
to the NLRC. On July 24, 1998, the NLRC affirmed with
modification the decision of the Labor Arbiter. The dispositive
part of its decision reads:
WHEREFORE, premises considered, the Decision of the
Respondent is further ordered to pay the complainants listed
in the Holiday Pay Payroll the amounts due them.
SO ORDERED.[8]
A motion for reconsideration of the said decision was denied
by the NLRC.[9] Dissatisfied, the respondents appealed the
case to the CA where the following issues were raised:
A. THE HONORABLE COMMISSION GRAVELY ABUSED
ITS DISCRETION AND POWER BY VIOLATING THE
DOCTRINE OF STARE DECISIS LAID DOWN BY THE
SUPREME COURT AND THE APPLICABLE LAWS AS TO
THE STATUS OF THE SUGAR WORKERS.
17
B. THE HONORABLE COMMISSION COMMITTED
SERIOUS ERRORS BY ADMITTING THE MOTION TO
DISMISS AND/OR ANSWER TO PETITIONERS APPEAL
MEMORANDUM DATED MARCH 26, 1998 FILED BY
COUNSEL FOR THE HEREIN RESPONDENTS INSPITE OF
THE FACT THAT IT WAS FILED WAY BEYOND THE
REGLEMENTARY PERIOD.
C. THE HONORABLE COMMISSION COMMITTED GRAVE
ERROR IN GIVING CREDENCE TO THE SWEEPING
ALLEGATIONS OF THE COMPLAINANTS AS TO THE
AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT
ANY BASIS.[10]
On July 31, 2001, the CA rendered a Decision,[11] the
dispositive portion of which reads:
WHEREFORE, the decision of the National Labor Relations
Commission is hereby MODIFIED by deleting the award for
holiday pay and premium pay for holidays. The rest of the
Decision is hereby AFFIRMED.
SO ORDERED.[12]
The CA ruled that the concept of stare decisis is not relevant
to the present case. It held that the ruling in Mercado, Sr. v.
NLRC[13] does not operate to abandon the settled doctrine
that sugar workers are considered regular and permanent
farm workers of a sugar plantation owner, considering that
there are facts peculiar in that case which are not present in
the case at bar. In the Mercado case, the farm laborers
worked only for a definite period for a farm owner since the
area of the land was comparatively small, after which they
offer their services to other farm owners. In this case, the area
of the hacienda, which is 236 hectares, simply does not allow
for the respondents to work for a definite period only.
The CA also held that the petitioners reliance on Bacolod-
Murcia Milling Co. Inc. v. NLRC[14] was misplaced, as it in
fact, bolstered the respondents' posture that they are regular
employees. In that case, the Court held that a sugar worker
may be considered as in regular employment even during
those years when he is merely a seasonal worker where the
issues concern the determination of an employeremployee
relationship and security of tenure.
Further, the CA held that the respondents appeal to the NLRC
was not perfected since they failed to accompany their notice
of appeal with a memorandum of appeal, or to timely file a
memorandum of appeal. Thus, as to them, the decision of the
Labor Arbiter became final and executory. The NLRC,
therefore, gravely abused its discretion when it modified the
decision of the Labor Arbiter and awarded to the respondents
holiday pay and premium for holiday pay. Finally, the CA
affirmed the award of backwages, finding no circumstance
that would warrant a reversal of the findings of the Labor
Arbiter and NLRC on this point. [15]
On September 24, 2001, the CA denied the motion for
reconsideration filed by the petitioners due to their failure to
indicate the date of the receipt of the decision to determine the
timeliness of the motion.[16]
Hence, this petition for review.
The petitioners submit the following issues:
A. WHETHER OR NOT THE HONORABLE COURT OF
APPEALS GRAVELY ABUSED ITS DISCRETION AND
POWER BY VIOLATING THE DOCTRINE OF "STARE
DECISIS" LAID DOWN BY THE SUPREME COURT AND
THE APPLICABLE LAWS AS TO THE STATUS OF THE
SUGAR WORKERS.
B. WHETHER OR NOT THE HONORABLE COURT OF
APPEALS GRAVELY ERRED IN DISMISSING THE MOTION
FOR RECONSIDERATION FOR FAILURE TO STATE THE
DATE OF THE RECEIPT OF THE DECISION IN THE
MOTION FOR RECONSIDERATION.[17]
Petitioner Starke contends that the established doctrine that
seasonal employees are regular employees had been
overturned and abandoned by Mercado, Sr. v. NLRC.[18] She
stresses that in that case, the Court held that petitioners
therein who were sugar workers, are seasonal employees and
24
their employment legally ends upon completion of the project
or the season. Petitioner Starke argues that the CA violated
the doctrine of stare decisis in not applying the said ruling. She
asserts that the respondents, who are also sugar workers, are
seasonal employees; hence, their employment can be
terminated at the end of the season and such termination
cannot be considered an illegal dismissal. Petitioner Starke
maintains that the determination of whether the workers are
regular or seasonal employees is not dependent on the
number of hectares operated upon by them, or the number of
workers, or the capitalization involved, but rather, in the nature
of the work. She asserts that the respondents also made their
services available to the neighboring haciendas. To buttress
her contention that the respondents are seasonal employees,
petitioner Starke cites Rep. Act 6982, An Act Strengthening
the Social Amelioration Program in the Sugar Industry,
Providing the Mechanics for its Implementation, and for other
Purposes, which recognizes the seasonal nature of the work
in the sugar industry.[19]
Petitioner Starke also takes exception to the denial of her
motion for reconsideration due to failure to state the date of
the receipt of the decision. She asserts that a denial of a
motion for reconsideration due to such cause is merely
directory and not mandatory on the part of the CA.
Considering that the amount involved in this case and the fact
that the motion was filed within the reglementary period, the
CA should have considered the motion for reconsideration
despite such procedural lapse.[20]
On the other hand, the respondents aver that the petitioners
erroneously invoke the doctrine of stare decisis since the
factual backdrop of this case and the Mercado case is not
similar. The respondents posit that the Mercado case ruled on
the status of employment of farm laborers who work only for
a definite period of time for a farm owner, after which they offer
their services to other farm owners. Contrarily, the
respondents contend that they do not work for a definite
period but throughout the whole year, and do not make their
services available to other farm owners. Moreover, the land
involved in the Mercado case is comparatively smaller than
the sugar land involved in this case. The respondents insist
that the vastness of the land involved in this case requires the
workers to work on a yearround basis, and not on an on-and-
off basis like the farm workers in the Mercado case.
Finally, the respondents maintain that the requirement that the
date of receipt of the decision should be indicated in the
motion for reconsideration is mandatory and jurisdictional and,
if not complied with, the court must deny the motion
outright.[21]
The petition is without merit.
On the substantial issue of whether the respondents are
regular or seasonal employees, the petitioners contend that
the CA violated the doctrine of stare decisis by not applying
the ruling in the Mercado case that sugar workers are
seasonal employees. We hold otherwise. Under the doctrine
of stare decisis, when a court has laid down a principle of law
as applicable to a certain state of facts, it will adhere to that
principle and apply it to all future cases in which the facts are
substantially the same.[22] Where the facts are essentially
different, however, stare decisis does not apply, for a perfectly
sound principle as applied to one set of facts might be entirely
inappropriate when a factual variance is introduced.[23]
The CA correctly found that the facts involved in this case are
different from the Mercado case; therefore, the ruling in that
case cannot be applied to the case at bar, thus:
We do not find the concept of stare decisis relevant in the case
at bench. For although in the Mercado case, the Supreme
18
Court held the petitioners who were sugar workers not to be It bears stressing that the employer has the burden of proving
regular but seasonal workers, nevertheless, the same does the lawfulness of his employees dismissal.[31]
not operate to abandon the settled doctrine of the High Court On the procedural issue, petitioner Starke avers that the CA
that sugar workers are considered regular and permanent should not have denied outright her motion for
farm workers of a sugar plantation owner, the reason being reconsideration, considering its timely filing and the huge
that there are facts present that are peculiar to the Mercado amount involved. This contention is already moot. Petitioner
case. The disparity in facts between the Mercado case and Starke has already aired in this petition the arguments in her
the instant case is best exemplified by the fact that the former motion for reconsideration of the CA decision, which have
decision ruled on the status of employment of farm laborers, been adequately addressed by this Court. Assuming
who, as found by the labor arbiter, work only for a definite arguendo that the CA indeed failed to consider the motion for
period for a farm worker, after which they offer their services reconsideration, petitioner Starke was not left without any
to other farm owners, considering the area in question being other recourse.[32]
comparatively small, comprising of seventeen and a half (17) IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.
hectares of land, such that the planting of rice and sugar cane The Decision of the Court of Appeals, dated July 31, 2001,
thereon could not possibly entail a whole year operation. The and its Resolution dated September 24, 2001 are hereby
herein case presents a different factual condition as the AFFIRMED.
enormity of the size of the sugar hacienda of petitioner, with SO ORDERED.
an area of two hundred thirtysix (236) hectares, simply do not G.R. No. 192394 July 3, 2013
allow for private respondents to render work only for a definite ROY D. P ASOS,
period.
Indeed, in a number of cases, the Court has recognized the
peculiar facts attendant in the Mercado case. In Abasolo v.
NLRC,[24] and earlier, in Philippine Tobacco Flue-Curing &
Redrying Corporation v. NLRC,[25] the Court made the
following observations:
In Mercado, although respondent constantly availed herself of
the petitioners services from year to year, it was clear from the
facts therein that they were not in her regular employ.
Petitioners therein performed different phases of agricultural
work in a given year. However, during that period, they were
free to work for other farm owners, and in fact they did. In other
words, they worked for respondent, but were nevertheless
free to contract their services with other farm owners. The
Court was thus emphatic when it ruled that petitioners were
mere project employees, who could be hired by other farm
owners.[26]
Recently, the Court reiterated the same observations in
Hacienda Fatima v. National Federation of Sugarcane
Workers-Food and General Trade[27] and added that the
petitioners in the Mercado case were not hired regularly and
repeatedly for the same phase/s of agricultural work, but on
and off for any single phase thereof.
In this case, there is no evidence on record that the same
particulars are present. The petitioners did not present any
evidence that the respondents were required to perform
certain phases of agricultural work for a definite period of time.
Although the petitioners assert that the respondents made
their services available to the neighboring haciendas, the
records do not, however, support such assertion.
The primary standard for 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.[28] There is no doubt that the
respondents were performing work necessary and desirable
in the usual trade or business of an employer. Hence, they
can properly be classified as regular employees.
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 been
employed only for the duration of one season.[29] While the
records sufficiently show that the respondents work in the
hacienda was seasonal in nature, there was, however, no
proof that they were hired for the duration of one season only.
In fact, the payrolls,[30] submitted in evidence by the
25

petitioners, show that they availed the services of the

respondents since 1991. Absent any proof to the contrary, the
general rule of regular employment should, therefore, stand.

19