BRENT SCHOOL vs.

ZAMORA
G.R. No. L-48494 February 5, 1990

FACTS:

Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc.
at a yearly compensation of P20,000.00. The contract fixed a specific term for its existence, five (5)
years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent
subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated
the same terms and conditions, including the expiry date, as those contained in the original contract
of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of
Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the
termination was "completion of contract, expiration of the definite period of employment." Although
protesting the announced termination stating that his services were necessary and desirable in the
usual business of his employer, and his employment lasted for 5 years - therefore he had acquired the
status of regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor
containing the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full
payment of contract."

The Regional Director considered Brent School's report as an application for clearance to terminate
employment (not a report of termination), and accepting the recommendation of the Labor
Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a
"permanent employee," to his former position without loss of seniority rights and with full back
wages.

ISSUE:

Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period
employment" or employment for a term.

HELD:

Respondent Alegre's contract of employment with Brent School having lawfully terminated with and
by reason of the expiration of the agreed term of period thereof, he is declared not entitled to
reinstatement.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time
when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. At that time, the
validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as
amended by R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed
employment without a fixed period, and also implicitly acknowledged the propriety of employment
with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and
became effective on August 30,1950, itself deals with obligations with a period. No prohibition against
term-or fixed-period employment is contained in any of its articles or is otherwise deducible
therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre, it
was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations
for a term were explicitly recognized as valid by this Court.

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the
Labor Code (PD 442), which went into effect on November 1, 1974. The Code contained explicit
references to fixed period employment, or employment with a fixed or definite period. Nevertheless,
obscuration of the principle of licitness of term employment began to take place at about this time.
PAKISTAN INTERNATIONAL AIRLINES vs. OPLE
G.R. No. 61594, September 28, 1990

FACTS:

Pakistan International Airlines Corporation (“PIA”), a foreign corporation licensed to do business in

the Philippines, executed in Manila two (2) separate contracts of employment, one with private
respondent Ethelynne B. Farrales and the other with private respondent Ma. M.C. Mamasig.

The contracts provided that (1) the Duration of Employment is for a period of 3 years, (2) PIA reserves
the right to terminate this agreement at any time by giving the EMPLOYEE notice in writing in advance
one month before the intended termination or in lieu thereof, by paying the EMPLOYEE wages
equivalent to one month’s salary; and (3) the agreement shall be construed and governed under and
by the laws of Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to consider
any matter arising out of or under this agreement.

Farrales and Mamasig then commenced training in Pakistan and after such, they began discharging
their job functions as flight attendants with base station in Manila and flying assignments to different
parts of the Middle East and Europe.

Roughly one (1) year and four (4) months prior to the expiration of the contracts of employment, PIA
sent separate letters to private respondents advising both that their services as flight stewardesses
would be terminated. PIA claimed that both were habitual absentees, were in the habit of bringing in
from abroad sizeable quantities of “personal effects”.

Prior Proceedings:  Regional Director of MOLE ordered the reinstatement of private respondents with

full backwages or, in the alternative, the payment to them of the amounts equivalent to their salaries
for the remainder of the fixed three-year period of their employment contracts having attained the
status of regular employees.

On appeal the Deputy Minister of MOLE, adopted the findings of fact and conclusions of the Regional
Director and affirmed the latter’s award save for the portion thereof giving PIA the option, in lieu of
reinstatement, “to pay each of the complainants [private respondents] their salaries corresponding to
the unexpired portion of the contract[s] [of employment] . . .”
Hence, this instant Petition for Certiorari by PIA.

ISSUE:

Whether or not the provisions of the contract superseded the general provisions of the Labor Code

HELD:

No. The principle of freedom to contract is not absolute. Art. 1306 provides that stipulations by the
parties may be allowed provided they are not contrary to law, morals, good customs, public order &
policy. Thus, the principle of autonomy of contracting parties must be counterbalanced with the
general rule that provisions of the applicable law are deemed written into the contract.

In this case, the law relating to labor and employment is an area which the parties are not at liberty to
insulate themselves and their relationship from by simply contracting with each other.

Article 320 originally stated that the "termination of employment of probationary employees and
those employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor
may prescribe." Article 321 prescribed the just causes for which an employer could terminate "an
employment without a definite period." And Article 319 undertook to define "employment without a
fixed period" in the following manner: …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
service to be performed is seasonal in nature and the employment is for the duration of the season.

Subsequently, the foregoing articles regarding employment with "a definite period" and "regular"
employment were amended by Presidential Decree No. 850, effective December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the
reference to persons "employed with a fixed period," and was renumbered (becoming Article 271).

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only
fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an
anomaly, but would also appear to restrict, without reasonable distinctions, the right of an employee
to freely stipulate with his employer the duration of his engagement, it logically follows that such a
literal interpretation should be eschewed or avoided. The law must be given a reasonable
interpretation, to preclude absurdity in its application. Outlawing the whole concept of term
employment and subverting to boot the principle of freedom of contract to remedy the evil of
employer's using it as a means to prevent their employees from obtaining security of tenure is like
cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head.

Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of
employment as still good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the
President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being
served by her school a notice of termination following the expiration of the last of three successive
fixed-term employment contracts, the Court held:

Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was
probationary, contractual in nature, and one with a definitive period. At the expiration of the period
stipulated in the contract, her appointment was deemed terminated and the letter informing her of
the non-renewal of her contract is not a condition sine qua non before Reyes may be deemed to have
ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes' contract of
employment was due to expire and that the contract would no longer be renewed. It is not a letter of
termination.

Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his
last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance
written advice given the Department of Labor with copy to said petitioner was a mere reminder of the
impending expiration of his contract, not a letter of termination, nor an application for clearance to
terminate which needed the approval of the Department of Labor to make the termination of his
services effective. In any case, such clearance should properly have been given, not denied.

CIELO vs. NLRC

G.R. No. 78693, January 28, 1991

FACTS:

The petitioner is a truck driver who claims he was illegally dismissed by the private respondent, the
Henry Lei Trucking Company. Petitioner were made to sign an agreement with the private respondent
that they don’t have an employer-employee relationship but in an affidavit that petitioner is being
forced to sign states that he received his salary and allowanced from the private respondent.

Upon refusal to sign, private respondent dismissed petitioner on the basis of disrespect and
insubordination.

ISSUE:

Whether or not petitioner was legally dismissed.

HELD:

The private respondent's argument that the petitioner could at least be considered on probation basis
only and therefore separable at will is self-defeating.

The Labor Code clearly provides as follows:

Art. 281. Probationary employment. — Probationary employment shall not exceed six (6) months
from the date the employee started working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has been engaged on a probationary
basis may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of
his engagement. An employee who is allowed to work after a probationary period shall be considered
a regular employee.

There is no question that the petitioner was not engaged as an apprentice, being already an
experienced truck driver when he began working for the private respondent. Neither has it been
shown that he was informed at the time of his employment of the reasonable standards under which
he could qualify as a regular employee. It is plain that the petitioner was hired at the outset as a
regular employee. At any rate, even assuming that the srcinal employment was probationary, the
Labor Arbiter found that the petitioner had completed more than six month's service with the
trucking company and so had acquired the status of a regular employee at the time of his dismissal.

CARTAGENAS vs. ROMAGO ELECTRIC COMPANY

G.R. No. 82973, September 15, 1989

FACTS:

Respondent Romago is a general contractor engaged in contracting and subcontracting of specific

building construction projects or undertaking such as electrical, mechanical and civil engineering
aspects in the repair of buildings and from other kindred services. 2. Individual complainants and
Lawrence Deguit were temporarily laid-off by virtue of a memorandum issued by the respondent. In
said memorandum they were also informed that a meeting regarding the resumption of operation
will be held on July 16, 1986 and that they will be notified as to when they will resume work. 3. On
July 28, 1986, complainants filed the instant case for illegal dismissal but before the respondent could
receive a copy of the complaint and the notification and summons issued by the NLRC National
Capital Region (actually received only on August 22, 1986, page 4, records) individual complainants re-
applied with the respondent and were assigned to work with its project at Robinson-EDSA.

ISSUE:

Whether the petitioners are project employees of the private respondent Romago Electric Company,
Inc., as found by the National Labor Relations Commission, or regular employees as found by the
Labor Arbiter.

HELD:

As an electrical contractor, the private respondent depends for its business on the contracts it is able
to obtain from real estate developers and builders of buildings. Since its work depends on the
availability of such contracts or "projects," necessarily the duration of the employment of its work
force is not permanent but co-terminus with the projects to which they are assigned and from whose
payrolls they are paid. It would be extremely burdensome for their employer who, like them, depends
on the availability of projects, if it would have to carry them as permanent employees and pay them
wages even if there are no projects for them to work on. We hold, therefore, that the NLRC did not
abuse its discretion in finding, based on substantial evidence in the records, that the petitioners are
only project workers of the private respondent
ALU-TUCP vs. NLRC and NSC
G.R. No. 109902, August 02, 1994

FACTS:

Petitioners, as employees of private respondent National Steel Corporation (NSC), filed separate
complaints for unfair labor practice, regularization and monetary benefits with the NLRC, Sub-
Regional Arbitration Branch XII, Iligan City. The complaints were consolidated and after hearing, the
Labor Arbiter declared petitioners “regular project employees who shall continue their employment
as such for as long as such [project] activity exists,” but entitled to the salary of a regular
employee pursuant to the provisions in the collective bargaining agreement. It also ordered payment
of salary differentials.

The NLRC in its questioned resolutions modified the Labor Arbiter’s decision. It affirmed the Labor
Arbiter’s holding that petitioners were project employees since they were hired to perform work in a
specific undertaking — the Five Years Expansion Program, the completion of which had been
determined at the time of their engagement and which operation was not directly related to the
business of steel manufacturing. The NLRC, however, set aside the award to petitioners of the same
benefits enjoyed by regular employees for lack of legal and factual basis.

The law on the matter is Article 280 of the Labor Code, where the petitioners argue that they are
“regular” employees of NSC because: (i) their jobs are “necessary, desirable and work-related to
private respondent’s main business, steel-making”; and (ii) they have rendered service for six (6) or
more years to private respondent NSC.

ISSUE:

Whether or not petitioners are considered “permanent employees” as opposed to being only “project
employees” of NSC.

HELD:

NO. Petition for Certiorari dismissed for lack of merit. NLRC Resolutions affirmed.

Function of the proviso. Petitioners are not considered “permanent employees”. However, contrary
to petitioners’ apprehensions, the designation of named employees as “project employees” and their
assignment to a specific project are effected and implemented in good faith, and not merely as a
means of evading otherwise applicable requirements of labor laws.

On the claim that petitioners’ service to NSC of more than six (6) years should qualify them as “regular
employees”, the Supreme Court believed this claim is without legal basis. The simple fact that the
employment of petitioners as project employees had gone beyond one (1) year, does not detract
from, or legally dissolve, their status as “project employees”. The second paragraph of Article 280 of
the Labor Code, quoted above, providing that an employee who has served for at least one (1) year,
shall be considered a regular employee, relates to casual employees, not to project employees.

MERCADO SR. VS. NLRC

G.R. No. 79869, September 5, 1991

FACTS:

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 Aurora L. Cruz, Francisco Borja, Leticia C. Borja and Sto. Niño Realty
Incorporated.

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.

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.

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.

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.

ISSUE:

Whether or not petitioners’ employment that continued for so many years could be considered
regular and permanent by express provision of Article 280.

HELD:

NO. 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.

The first paragraph of Article 280 answers the question of who are employees. It states that,
regardless of any written or oral agreement to the contrary, an employee is deemed regular where
he is engaged in necessary or desirable activities in the usual business or trade of the employer,
except for project employees.

A project employee has been defined to be one 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 as in the present case.

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not
fan under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as
regular employees those "casual" employees who have rendered at least one year of service
regardless of the fact that such service may be 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. 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 termination of their employment cannot and
should not constitute an illegal dismissal.
HACIENDA FATIMA vs. NAT'L FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE
G.R. No. 149440, January 28, 2003

FACTS: 

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

ISSUE: 

Whether or not the seasonal employees have become regular employees. 

HELD: 

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

The primary standard of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or desirable in the usual trade or
business of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity
exists. 

Petition is denied.