THIRD DIVISION

[G.R. No. 154185. November 22, 2005.]

AMELIA J. DELOS SANTOS, petitioner,vs.JEBSEN MARITIME,

INC., respondent.

Linsangan Linsangan & Linsangan Law Office for petitioner.

Del Rosario & Del Rosario for respondent.

SYLLABUS

 
1. LABOR AND SOCIAL LEGISLATION; AN EMPLOYMENT CONTRACT
NOT CONTRARY TO STATUTES, PUBLIC POLICY, PUBLIC ORDER OR
MORALS HAS THE FORCE OF LAW BETWEEN THE CONTRACTING
PARTIES. — As a rule, stipulations in an employment contract not contrary to
statutes, public policy, public order or morals have the force of law between the
contracting parties. An employment with a period is generally valid, unless the
term was purposely intended to circumvent the employee's right to his security of
tenure. Absent a covering specific agreement and unless otherwise provided by
law, the terms and conditions of employment of all employees in the private
sector shall be governed by the Labor Code and such rules and regulations as
may be issued by the Department of Labor and Employment and such agencies
charged with the administration and enforcement of the Code.
2. ID.; ID.; THE PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION-STANDARD EMPLOYMENT CONTRACT (POEA-SEC) IS
NOT APPLICABLE IN CASE AT BAR; REASONS. — The Court of Appeals ruled
against the governing applicability of the POEA-SEC and, on that basis, deleted
the NLRC's award of US$60,000.00 and US$2,452.00 by way of disability
benefits and sickness allowance, respectively. An excerpt of the appellate court's
explanation: . . . Both parties do not dispute the existence of the POEA approved
contract signed by the parties. The said contract is the law between the
contracting parties and absent any showing that its provisions are wholly or in
part contrary to law, morals, good policy, it shall be enforced to the letter by the
contracting parties (Metropolitan Bank and Trust Co. vs. Wong, G.R. No. 120859,
June 26, 2001). The contract in question is for a duration of one (1) month. Being
a valid contract between Delos Santos and the [respondent], the provisions
thereof, specifically with respect to the one (1)-month period of employment has
the force of law between them (D.M. Consunji vs. NLRC, G.R. No. 116572,
December 18, 2000). Perforce, the said contract has already expired and is no
longer in effect. The fact that Delos Santos continued to work in the same vessel
which sailed within Philippine waters does not mean that the POEA standard
employment contract continues to be enforced between the parties. The
employment of Delos Santos is within the Philippines, and not on a foreign shore.
As correctly pointed out by [respondent], the provisions of the Labor Code shall
govern their employer-employee relationship. . . . The Court agrees with the
conclusion of the Court of Appeals for two (2) main reasons. First, we start with
something elementary, i.e., POEA was created primarily to undertake a
systematic program for overseas employment of Filipino workers and to protect
their rights to fair and equitable employment practices. And to ensure that
overseas workers, including seafarers on board ocean-going vessels, are amply
protected, the POEA is authorized to formulate employment standards in
accordance with welfare objectives of the overseas employment program. Given
this consideration, the Court is at a loss to understand why the POEA-SEC
should be made to continue to apply to domestic employment, as here, involving
a Filipino seaman on board an inter-island vessel.
3. ID.; ID.; AFTER THE LAPSE OF THE PERIOD AGREED UPON IN THE
POEA APPROVED CONTRACT, THE SAID EMPLOYMENT CONTRACT
BECAME FUNCTUS OFFICIO AND THE EMPLOYMENT PURSUANT
THERETO IS CONSIDERED AUTOMATICALLY TERMINATED, THERE BEING
NO MUTUALLY-AGREED RENEWAL OR EXTENSION OF THE EXPIRED
CONTRACT. — Just as basic as the first reason is the fact that Delos Santos'
POEA-approved employment contract was for a definite term of one (1) month
only, doubtless fixed to coincide with the pre-determined one-month long
Philippines-Japan-Philippines conduction-voyage run. After the lapse of the said
period, his employment under the POEA-approved contract may be deemed as
functus officio and Delos Santos' employment pursuant thereto considered
automatically terminated, there being no mutually-agreed renewal or extension of
the expired contract. This is as it should be. For, as we have held in the landmark
case of Millares v. National Labor Relations Commission: From the foregoing
cases, it is clear that seafarers are considered contractual employees. . . . Their
employment is governed by the contracts they sign every time they are rehired
and their employment is terminated when the contract expires. Their employment
is contractually fixed for a certain period of time. They fall under the exception of
Article 280 [of the Labor Code] whose employment has been fixed for a specific
project or undertaking . . . We need not depart from the rulings of the Court in the
two aforementioned cases which indeed constitute stare decisis with respect to
the employment status of seafarers.
4. ID.; ID.; A SEAMAN NEED NOT PHYSICALLY DISEMBARK FROM A
VESSEL AT THE EXPIRATION OF HIS EMPLOYMENT CONTRACT TO HAVE
SUCH CONTRACT CONSIDERED TERMINATED; REPATRIATION ASSUMES
SIGNIFICANCE ONLY WHERE THE VESSEL IS IN A FOREIGN PORT. —
Petitioner's posture, citing Section 2 (A) in relation to Section 18 of the POEA-
SEC about the POEA approved contract still subsisting since Delos Santos was
never signed off from the vessel and repatriated to Manila, the point of hire, is
untenable. With the view we have of things, Delos Santos is deemed to have
been signed off when he acceded to a new employment arrangement offered by
the respondent. A seaman need not physically disembark from a vessel at the
expiration of his employment contract to have such contract considered
terminated. And the repatriation aspect of the contract assumes significance only
where the vessel remains in a foreign port. For, repatriation presupposes a return
to one's country of origin or citizenship. In the case at bar, however, there can be
quibbling that MV Wild Iris returned to the port of Cebu with Delos Santos on
board. Parenthetically, while the parties are agreed that their underlying contract
was executed in the country, the records do not indicate what city or province of
the Philippines is the specific point of hire. While petitioner says it is Manila, she
did not bother to attach to her petition a copy of the contract of employment in
question.
 5. ID.; ID.; FACTORS AGAINST THE NOTION THAT RESPONDENT
CONSENTED TO CONTRACT EXTENSION UNDER THE SAME TERMS AND
CONDITIONS PREVAILING WHEN THE ORIGINAL CONTRACT EXPIRED. —
The fact that respondent retained Delos Santos and allowed him to remain on
board the vessel cannot plausibly be interpreted, in context, as evidencing an
intention on its part to continue with the POEA-SEC. In the practical viewpoint,
there could have been no sense in consenting to renewal since the rationale for
the execution of the POEA-approved contract had already been served and
achieved. At any rate, factors obtain arguing against the notion that respondent
consented to contract extension under the same terms and conditions prevailing
when the original contract expired. Stated a bit differently, there are compelling
reasons to believe that respondent retained the services of the
acceding Delos Santos, as the Court of Appeals aptly observed, but under
domestic terms and conditions. We refer first to the reduced salary
of Delos Santos payable in Philippine peso which, significantly enough, he
received without so much of a protest. As respondent stated in its Comment,
without any controverting response from petitioner, Delos Santos, for the period
ending October 31, 1995, was drawing a salary at the rate of P8,475.00 a month,
whereas the compensation package stipulated under the POEA-approved
contract provided for a US$613 basic monthly salary and a US$184 fixed
monthly overtime pay. And secondly, MV Super RoRo 100 was no longer
engaged in foreign trading as it was no longer intended as an ocean-going ship.
Accordingly, it does not make sense why a seafarer of goodwill or a manning
agency of the same disposition would insist on being regulated by an overseas
employment agency under its standard employment contract, which governs
employment of Filipino seamen on board ocean-going vessels.
6. ID.;ID.;DELETION OF ATTORNEY'S FEES IN PROPER ORDER; THE
FACTUAL, LEGAL OR EQUITABLE JUSTIFICATION FOR THE AWARD MUST
BE SET FORTH IN THE TEXT OF DECISION AND CANNOT BE TOUCHED
ONCE AND ONLY IN THE FALLO OF THE DECISION. — Likewise legally
correct is the deletion of the award of attorney's fees, the NLRC having failed to
explain petitioner's entitlement thereto. As a matter of sound policy, an award of
attorney's fee remains the exception rather than the rule. It must be stressed, as
aptly observed by the appellate court, that it is necessary for the trial court, the
NLRC in this case, to make express findings of facts and law that would bring the
case within the exception. In fine, the factual, legal or equitable justification for
the award must be set forth in the text of the decision. The matter of attorney's
fees cannot be touched once and only in the fallo of the decision, else, the award
should be thrown out for being speculative and conjectural. In the absence of a
stipulation, attorney's fees are ordinarily not recoverable; otherwise a premium
shall be placed on the right to litigate. They are not awarded every time a party
wins a suit.
 

DECISION

GARCIA, J  :p
 Petitioner Amelia J. Delos Santos seeks in this petition for review
on certiorari under Rule 45 of the Rules of Court to nullify and set aside the
decision and resolution dated 21 March 2002 1 and 03 July 2002 2 ,respectively,
of the Court of Appeals in CA-G.R. SP No. 62229.
From the petition and its annexes, the respondent's comment thereto, and
the parties' respective memoranda, the Court gathers the following factual
antecedents:
On 10 August 1995, or thereabout, herein respondent Jebsen Maritime,
Inc.,for and in behalf of Aboitiz Shipping Co. (Aboitiz Shipping, for short),hired
petitioner's husband, Gil R. Delos Santos (hereinafter, Delos Santos) as third
engineer of MV Wild Iris. The corresponding contract of employment, as
approved by the Philippine Overseas Employment Administration (POEA), was
for a fixed period of one (1) month and for a specific undertaking of conducting
said vessel to and from Japan. It quoted Delos Santos' basic monthly salary and
other monetary benefits in US currency. Under POEA rules, all employers and
principals are required to adopt the POEA — standard employment contract
(POEA-SEC) without prejudice to their adoption of terms and conditions over and
above the minimum prescribed by that agency. 3
On the vessel's return to the Philippines a month
after, Delos Santos remained on board, respondent having opted to retain his
services while the vessel underwent repairs in Cebu. After its repair, MV Wild
Iris,this time renamed/registered as MV Super RoRo 100,sailed within domestic
waters, having been meanwhile issued by the Maritime Industry Authority a
Certificate of Vessel Registry and a permit to engage in coastwise trade on the
Manila-Cebu-Manila-Zamboanga-General Santos-Manila route. 4 During this
period of employment, Delos Santos was paid by and received from respondent
his salary in Philippine peso thru a payroll-deposit arrangement with the
Philippine Commercial & Industrial Bank. 5
Some five months into the vessel's inter-island
voyages, Delos Santos experienced episodes of chest pain, numbness and body
weakness which eventually left him temporarily paralyzed. On 17 February 1996,
he was brought to the Manila Doctor's Hospital — a duly accredited hospital of
respondent — where he underwent a spinal column operation. Respondent
shouldered all operation-related expenses, inclusive of his post operation
confinement. HEacDA

As narrated in the assailed decision of the Court of Appeals, the following

events next transpired:
1. After his discharge from the Manila Doctor's, Delos Santos was
made to undergo physical therapy sessions at the same hospital, which
compelled the Batangas-based Delos Santoses to rent a room near the
hospital at P3,000.00 a month;
2. Delos Santos underwent a second spinal operation at the non-
accredited Lourdes Hospital at the cost of P119,536.00; and
3. After Lourdes,Delos Santos was confined in a clinic in San
Juan, Batangas where P20,000.00 in hospitalization expenses was
incurred.
It would appear that the spouses Delos Santos paid all the expenses
attendant the second spinal operation as well as for the subsequent medical
treatment. Petitioner's demand for reimbursement of these expenses was
rejected by respondent for the reason that all the sickness benefits
of Delos Santos under the Social Security System (SSS) Law had already been
paid.
Thus, on 25 January 1997, petitioner filed a complaint 6 with the Arbitration
Branch of the National Labor Relations Commission (NLRC) against respondent
and Aboitiz Shipping for recovery of disability benefits, and sick wage allowance
and reimbursement of hospital and medical expenses. She also sought payment
of moral damages and attorney's fees.
After due proceedings, the labor arbiter rendered, on 08 January
1999, 7 judgment finding for petitioner and ordering respondent and Aboitiz
Shipping to jointly and severally pay the former the following:
(1) P119,536.01, representing reimbursement of medical, surgical
and hospital expenses;
(2) P9,000, representing reasonable cost of board and lodging;
(3) P500,000, representing moral damages;
(4) US$60,000, representing disability benefits corresponding to
Total Permanent Disability;
(5) US$2,452, representing Sick Wage allowance;
(6) P62,853.60, representing attorney's fees; and,
(7) US$6,245.20, also representing attorney's fees.
On appeal, the NLRC, in a decision 8 dated 29 August 2000, modified that
of the labor arbiter, as follows:
WHEREFORE, the decision appealed from is MODIFIED to the
extent that respondents Jebsen Maritime, Inc.,and Aboitiz Shipping
Company are hereby ordered jointly and severally liable to pay
Gil delos Santos through Amelia delos Santos the Philippine peso
equivalent at the time of actual payment of US DOLLARS SIXTY
THOUSAND (US$60,000.00) and US DOLLARS TWO THOUSAND
FOUR HUNDRD (sic) FIFTY TWO (US$2,452.00) representing total
disability compensation benefits and sickness wages, and the amount of
ONE HUNDRED THREE THOUSAND EGHT (sic) HUNDRED FOUR
AND 87/100 PHILIPPINE PESOS (P103,804.87) representing
reimbursement of surgical, medical and hospital expenses, plus the
equivalent of five percent (5%) of the aggregate award as and for
attorney's fees.
All other dispositions are SET ASIDE.
SO ORDERED.
Like the labor arbiter, the NLRC predicated its ruling mainly on the theory
that the POEA-approved contract of employment continued to
govern Delos Santos' employment when he contracted his illness. In specific
terms, the NLRC states that the same contract was still effective
when Delos Santos fell ill, thus entitling him to the payment of disability and like
benefits provided in and required under the POEA-SEC.
Following the denial of its motion for reconsideration per NLRC
Resolution 9 of 31 October 2000, respondent went to the Court of Appeals on a
petition for certiorari,thereat docketed as CA-G.R. No. 62229,imputing on the
NLRC grave abuse of discretion. In its petition, respondent scored the NLRC for,
among other things, extending the application of the expired POEA-approved
employment contract beyond the one-month limit stipulated therein.
On 21 March 2002, the Court of Appeals rendered judgment 10 ,modifying
the NLRC's decision by deleting altogether the award of disability compensation
benefits, sickness wages and attorney's fees, thus:
WHEREFORE, premises considered, the instant petition
for certiorari is hereby DENIED, finding no grave abuse of discretion on
the part of the NLRC. The Decision of the National Labor Relations
Commission (NLRC) dated August 29, 2000 and the Resolution of
October 31, 2000 denying petitioner's Motion for Reconsideration are
hereby AFFIRMED with MODIFICATION, that the disability
compensation benefits of US$60,000.00 and the sickness wages of
US$2,452.00 are hereby deleted, without prejudice to claiming the same
from the proper government agency. The award of attorney's fees is
likewise deleted. 
cDTHIE

In time, petitioner moved for reconsideration, but the appellate court

denied the motion per its resolution of 03 July 2002. 11
Hence, petitioner's present recourse on the grounds that the Court of
Appeals seriously erred: 12
I
IN DELETING THE AWARD OF US$60,000.00 REPRESENTING
THE MAXIMUM DISABILITY BENEFITS APPLYING THE PROVISIONS
OF THE POEA STANDARD EMPLOYMENT CONTRACT.
(A) PRIOR TO HIS ACCIDENT, THE EMPLOYMENT
CONTRACT OF SEAFARER DELOS SANTOS HAS NOT YET BEEN
TERMINATED, IN RELATION TO SECTION 2, PARAGRAPHS (A) AND
(B) AND SECTION 18 (A), POEA STANDARD EMPLOYMENT
CONTRACT.
(B) THE CONTRACT OF EMPLOYMENT AT THE TIME OF
SEAFARER DELOS SANTOS' ACCIDENT HAS NOT YET EXPIRED
BECAUSE IT WAS MUTUALLY EXTENDED BY THE PARTIES
WHEN DELOS SANTOS WAS NOT SIGNED OFF AND REPATRIATED
PRIOR TO SAID ACCIDENT.
II
IN CONCLUDING THAT NOTWITHSTANDING THE
CONTINUATION OF DELOS SANTOS' EMPLOYMENT ON BOARD
THE SAME VESSEL AND UNDER THE SAME CONTRACT, IT IS THE
PROVISIONS OF THE LABOR CODE, AS AMENDED, THAT SHALL
GOVERN HIS EMPLOYMENT RELATIONS.
III
IN DELETING THE AWARD OF SICKNESS ALLOWANCE IN
THE AMOUNT OF US$2,452.00.
(A) THERE IS NO BASIS IN THE DELETION OF THE AWARD
OF SICKNESS ALOWANCE (sic) SINCE PAYMENT OF SOCIAL
SECURITY SYSTEM SICK LEAVE BENEFIT IS INDEPENDENT,
SEPARATE AND DISTINCT FROM THE SICKNESS ALLOWANCE
PROVIDED FOR UNDER THE POEA STANDARD EMPLOYMENT
CONTRACT.
 The petition is devoid of merit.
As a rule, stipulations in an employment contract not contrary to statutes,
public policy, public order or morals have the force of law between the
contracting parties. 13 An employment with a period is generally valid, unless the
term was purposely intended to circumvent the employee's right to his security of
tenure. 14 Absent a covering specific agreement and unless otherwise provided
by law, the terms and conditions of employment of all employees in the private
sector shall be governed by the Labor Code 15 and such rules and regulations as
may be issued by the Department of Labor and Employment and such agencies
charged with the administration and enforcement of the Code.
The differing conclusions arrived at by the NLRC, finding for the herein
petitioner, and the Court of Appeals, siding in part with the herein respondent,
on Delos Santos' entitlement to disability benefits and sickness allowance are
veritably attributable to the question of applicability, under the premises, of
the POEA-SEC. The principal issue to be resolved here, therefore, boils down to:
which, between the POEA-SEC and the Labor Code, governs the employer-
employee relationship between Delos Santos and respondent after MV Wild
Iris,as later renamed Super RoRo 100,returned to the country from its one-month
conduction voyage to and from Japan.
The Court of Appeals ruled against the governing applicability of
the POEA-SEC and, on that basis, deleted the NLRC's award of US$60,000.00
and US$2,452.00 by way of disability benefits and sickness allowance,
respectively. An excerpt of the appellate court's explanation:
 
...Both parties do not dispute the existence of the POEA approved
contract signed by the parties. The said contract is the law between the
contracting parties and absent any showing that its provisions are wholly
or in part contrary to law, morals, good policy, it shall be enforced to the
letter by the contracting parties (Metropolitan Bank and Trust Co. vs.
Wong, G.R. No. 120859, June 26, 2001).The contract in question is for a
duration of one (1) month. Being a valid contract
between Delos Santos and the [respondent],the provisions thereof,
specifically with respect to the one (1) month period of employment has
the force of law between them (D.M. Consunji vs. NLRC, G.R. No.
116572, December 18, 2000).Perforce, the said contract has already
expired and is no longer in effect. 
ADCETI

The fact that Delos Santos continued to work in the same vessel

which sailed within Philippine waters does not mean that the POEA
standard employment contract continues to be enforced between the
parties. The employment of Delos Santos is within the Philippines, and
not on a foreign shore. As correctly pointed out by [respondent], the
provisions of the Labor Code shall govern their employer-employee
relationship. . . . . (Words in bracket added.)
The Court agrees with the conclusion of the Court of Appeals for two (2)
main reasons. First, we the start with something elementary, i.e.,POEA was
created primarily to undertake a systematic program for overseas employment of
Filipino workers and to protect their rights to fair and equitable employment
practices. 16 And to ensure that overseas workers, including seafarers on board
ocean-going vessels, are amply protected, the POEA is authorized to formulate
employment standards in accordance with welfare objectives of the overseas
employment program. 17 Given this consideration, the Court is at a loss to
understand why the POEA-SEC should be made to continue to apply to domestic
employment, as here, involving a Filipino seaman on board an inter-island
vessel.
Just as basic as the first reason is the fact that Delos Santos' POEA-
approved employment contract was for a definite term of one (1) month only,
doubtless fixed to coincide with the pre-determined one-month long Philippines-
Japan-Philippines conduction-voyage run. After the lapse of the said period, his
employment under the POEA-approved contract may be deemed as functus
oficio and Delos Santos' employment pursuant thereto considered automatically
terminated, there being no mutually-agreed renewal or extension of the expired
contract. 18 This is as it should be. For, as we have held in the landmark case
of Millares v. National Labor Relations Commission: 19
From the foregoing cases, it is clear that seafarers
are considered contractual employees....Their employment is governed
by the contracts they sign every time they are rehired and their
employment is terminated when the contract expires. Their employment
is contractually fixed for a certain period of time. They fall under the
exception of Article 280 [of the Labor Code] whose employment has
been fixed for a specific project or undertaking . . . We need not depart
from the rulings of the Court in the two aforementioned cases which
indeed constitute stare decisis with respect to the employment status of
seafarers. (Underscoring and words in bracket added)
Petitioner's posture, citing Section 2 (A) 20 in relation to Section 18 21 of
the POEA-SEC about the POEA approved contract still subsisting
since Delos Santos was never signed off from the vessel and repatriated to
Manila, the point of hire, is untenable. With the view we have of
things, Delos Santos is deemed to have been signed off when he acceded to a
new employment arrangement offered by the respondent. A seaman need not
physically disembarked from a vessel at the expiration of his employment
contract to have such contract considered terminated. And the repatriation
aspect of the contract assumes significance only where the vessel remains in a
foreign port. For, repatriation presupposes a return to one's country of origin or
citizenship. 22 In the case at bar, however, there can be quibbling that MV Wild
Iris returned to the port of Cebu with Delos Santos on board. Parenthetically,
while the parties are agreed that their underlying contract was executed in the
country, the records do not indicate what city or province of the Philippines is the
specific point of hire. While petitioner says it is Manila, she did not bother to
attach to her petition a copy of the contract of employment in question.
Petitioner next submits, echoing the NLRC's holding, that the POEA-
approved contract remained in full force and effect even after the expiry thereof
owing to the interplay of the following circumstances: 1) Delos Santos, after such
contract expiration, did not conclude another contract of employment with
respondent, but was asked to remain and work on board the same vessel just the
same; and 2) If the parties intended their employer-employee relationship to be
under the aegis of a new contract, such intention should have been embodied in
a new agreement.
Contract extension or continuation by mutual consent appears to be
petitioner's thesis.
We are not persuaded.
 The fact that respondent retained Delos Santos and allowed him to remain
on board the vessel cannot plausibly be interpreted, in context, as evidencing an
intention on its part to continue with the POEA-SEC. In the practical viewpoint,
there could have been no sense in consenting to renewal since the rationale for
the execution of the POEA-approved contract had already been served and
achieved. TDcAaH

At any rate, factors obtain arguing against the notion that respondent
consented to contract extension under the same terms and conditions prevailing
when the original contract expired. Stated a bit differently, there are compelling
reasons to believe that respondent retained the services of the
acceding Delos Santos, as the Court of Appeals aptly observed, but under
domestic terms and conditions. We refer first to the reduced salary
of Delos Santos payable in Philippine peso 23 which, significantly enough, he
received without so much of a protest. As respondent stated in
its Comment,without any controverting response from petitioner, Delos Santos,
for the period ending October 31, 1995, was drawing a salary at the rate of
P8,475.00 a month, whereas the compensation package stipulated under the
POEA-approved contract provided for a US$613 basic monthly salary and a
US$184 fixed monthly overtime pay. And secondly, MV Super RoRo 100 was no
longer engaged in foreign trading as it was no longer intended as an ocean-going
ship. Accordingly, it does not make sense why a seafarer of goodwill or a
manning agency of the same disposition would insist on being regulated by an
overseas employment agency under its standard employment contract, which
governs employment of Filipino seamen on board ocean-going vessels. 24
Petitioner's submission about the parties not having entered into another
employment contract after the expiration of the POEA-approved employment
contract, ergo,the extension of the expired agreement, is flawed by the logic
holding it together. For, it presupposes that an agreement to do or to give does
not bind, unless it is embodied in a written instrument. It is elementary, however,
that, save in very rare instances where certain formal requisites go into its
validity, a contract, to be valid and binding between the parties, need not be in
writing. A contract is perfected when the contracting minds agree on the object
and cause thereof. 25 And, as earlier discussed, several
circumstantial indicia tended to prove that a new arrangement under domestic
terms was agreed upon by the principal players to govern the employment
of Delos Santos after the return of MV Wild Iris to the country to engage in
coastwise trading.
Given the foregoing perspective, the disallowance under the decision
subject of review of the petitioner's claim for maximum disability benefits and
sickness allowance is legally correct. As it were, Delos Santos' right to such
benefits is predicated on the continued enforceability of POEA-SEC when he
contracted his illness, which, needless to stress, was not the case.
Likewise legally correct is the deletion of the award of attorney's fees, the
NLRC having failed to explain petitioner's entitlement thereto. As a matter of
sound policy, an award of attorney's fee remains the exception rather than the
rule. It must be stressed, as aptly observed by the appellate court, that it is
necessary for the trial court, the NLRC in this case, to make express findings of
facts and law that would bring the case within the exception. In fine, the factual,
legal or equitable justification for the award must be set forth in the text of the
decision. 26 The matter of attorney's fees cannot be touched once and only in
the fallo of the decision, else, the award should be thrown out for being
speculative and conjectural. 27 In the absence of a stipulation, attorney's fees are
ordinarily not recoverable; otherwise a premium shall be placed on the right to
litigate. 28 They are not awarded every time a party wins a suit.  SATDHE

WHEREFORE, the petition is DENIED and the assailed Decision and

Resolution of the Court of Appeals AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Panganiban, Sandoval-Gutierrez, Corona and Carpio Morales, JJ., concur.
 
Footnotes
1.Penned by Associate Justice Juan Q. Enriquez, Jr.,with Associate Justices Delilah
Vidallon Magtolis and Candido V. Rivera, concurring; Rollo,pp. 32-39.
2.Rollo,p. 28.
3.Poquiz, LABOR STANDARDS LAW, 2005 ed., p. 73, citing Rule II, Book V, Rules
and Regulations Governing Overseas Employment.
4.Respondent's memorandum, pp. 18-19, Rollo,pp. 129-130.
5.CA decision, Rollo,p. 33.
6.CA Decision, p. 3, Rollo,p. 34.
 
7.CA Decision, p. 4, Rollo,p. 35.
8.CA Decision, pp. 1-2, Rollo,pp. 32-33.
9.CA Rollo,pp. 56-57.
10.See Note #1, supra.
11.See Note #2, supra.
12.Rollo,pp. 10-11.
13.Art. 1306 of the Civil Code; Lagunsad vs. Soto,92 SCRA 476 and other cases.
14.Brent School vs. Zamora,181 SCRA 702 [1990].
15.PD No. 442, as amended.
16.Art. 17, Labor Code of the Phil.
17.Poquiz, LABOR STANDARDS LAW,2005 ed.,p. 73.
18.(Sec. 2(B) of the POEA Standard Employment Contract provides that "[A]ny
extension of the contract of employment [between the employer and the
seafarer] shall be subject to the mutual consent of both parties.
19.385 SCRA 306 [2002].
20.Sec. 2 (A) — The employment contract between the employer and the seafarer
...shall be effective until the seafarer's date of arrival at the point of hire upon
the termination of his employment pursuant to Section of the Contract. ....
 21.Sec. 18. The employment of the seafarer shall cease when the seafarer completes
his period of contractual service ...signs off from the vessel and arrives at the
point of hire.
22.Black's Law Dictionary, 6th ed.,p. 1299.
23.CA decision, p. 2, Rollo,p. 33.
24.Millares vs. NLRC, supra.
25.Metropolitan Development Authority v. JANCOM Environmental Corporation,375
SCRA 320 [2002];citing Bugatti v. Court of Appeals,343 SCRA 335
[2000];Romago Electric Co., Inc., v. Court of Appeals,333 SCRA 291
[2000];and Royal Lines, Inc. v. Court of Appeals,143 SCRA 608 [1986].
26.PAL vs. Miano,242 SCRA 235 [1995];Scott Consultants & Resource Development
Corp. vs. CA 242 SCRA 393 [1995].
27.DBP vs. CA,262 SCRA 245 [1996],citing Mirasol vs. De la Cruz,84 SCRA 337 and
other cases.
28.Firestone Tire & Rubber Co. vs. Ines Chaves,18 SCRA 356 [1966] and other
cases.
 (Delos Santos v. Jebsen Maritime Inc., G.R. No. 154185, [November 22, 2005],
|||

512 PHIL 301-316)

FIRST DIVISION

[G.R. No. 152427. August 9, 2005.]

INTEGRATED CONTRACTOR AND PLUMBING WORKS,

INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISS
ION and GLEN SOLON, respondents.

Picazo Buyco Tan Fider & Santos for petitioner.

Public Attorney's Office for private respondent.

SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; REGULAR
AND PROJECT EMPLOYMENT; TEST TO DETERMINE WHETHER AN
EMPLOYEE IS A "PROJECT EMPLOYEE" OR "REGULAR EMPLOYEE." — We
held in Tomas Lao Construction v. NLRC that the principal test in determining
whether an employee is a "project employee" or "regular employee," is, whether
he is assigned to carry out a "specific project or undertaking," the duration (and
scope) of which are specified at the time the employee is engaged in the project.
"Project" refers to a particular job or undertaking that is within the regular or usual
business of the employer, but which is distinct and separate and identifiable from
the undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times.
2. ID.; ID.; ID.; A PROJECT OR WORK POOL EMPLOYEE WHO HAS
BEEN CONTINUOUSLY, AS OPPOSED TO INTERMITTENTLY, RE-HIRED BY
THE SAME EMPLOYER FOR THE SAME TASKS OR NATURE OF TASKS
THAT ARE VITAL, NECESSARY AND INDISPENSABLE TO THE USUAL
BUSINESS OR TRADE OF THE EMPLOYER IS DEEMED A REGULAR
EMPLOYEE. — In our review of the employment contracts of private respondent,
we are convinced he was initially a project employee. The services he rendered,
the duration and scope of each project are clear indications that he was hired as
a project employee. We concur with the NLRC that while there were several
employment contracts between private respondent and petitioner, in all of them,
private respondent performed tasks which were usually necessary or desirable in
the usual business or trade of petitioner. A review of private respondent's work
assignments patently showed he belonged to a work pool tapped from where
workers are and assigned whenever their services were needed. In a work pool,
the workers do not receive salaries and are free to seek other employment during
temporary breaks in the business. They are like regular seasonal workers insofar
as the effect of temporary cessation of work is concerned. This arrangement is
beneficial to both the employer and employee for it prevents the unjust situation
of "coddling labor at the expense of capital" and at the same time enables the
workers to attain the status of regular employees. Nonetheless, the pattern of re-
hiring and the recurring need for his services are sufficient evidence of the
necessity and indispensability of such services to petitioner's business or trade.
In Maraguinot, Jr. v. NLRC we ruled that once a project or work pool employee
has been: (1) continuously, as opposed to intermittently, re-hired by the same
employer for the same tasks or nature of tasks; and (2) these tasks are vital,
necessary and indispensable to the usual business or trade of the employer, then
the employee must be deemed a regular employee.
3. ID.; ID.; ID.; PRIVATE RESPONDENT'S EMPLOYMENT CEASED TO
BE COTERMINOUS WITH SPECIFIC PROJECTS WHEN HE WAS
REPEATEDLY RE-HIRED DUE TO THE DEMANDS OF PETITIONER'S
BUSINESS. — The test to determine whether employment is regular or not is the
reasonable connection between the particular activity performed by the employee
in relation to the usual business or trade of the employer. 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. Thus, we held that where the
employment of project employees is extended long after the supposed project
has been finished, the employees are removed from the scope of project
employees and are considered regular employees. While length of time may not
be the controlling test for project employment, it is vital in determining if the
employee was hired for a specific undertaking or tasked to perform functions
vital, necessary and indispensable to the usual business or trade of the
employer. Here, private respondent had been a project employee several times
over. His employment ceased to be coterminous with specific projects when he
was repeatedly re-hired due to the demands of petitioner's business. Where from
the circumstances it is apparent that periods have been imposed to preclude the
acquisition of tenurial security by the employee, they should be struck down as
contrary to public policy, morals, good customs or public order.
4. ID.; ID.; ID.; THE FAILURE OF AN EMPLOYER TO FILE
TERMINATION REPORTS AS REQUIRED BY POLICY INSTRUCTIONS NO. 20
IS AN INDICATION THAT THE EMPLOYEE IS NOT A PROJECT EMPLOYEE.
— Policy Instructions No. 20 requires employers to submit a report of an
employee's termination to the nearest public employment office every time his
employment was terminated due to a completion of a project. The failure of the
employer to file termination reports is an indication that the employee is not a
project employee. Department Order No. 19 superseding Policy Instructions No.
20 also expressly provides that the report of termination is one of the indications
of project employment. In the case at bar, there was only one list of terminated
workers submitted to the Department of Labor and Employment. If private
respondent was a project employee, petitioner should have submitted a
termination report for every completion of a project to which the former was
assigned. Juxtaposing private respondent's employment history, vis the
requirements in the test to determine if he is a regular worker, we are constrained
to say he is.
5. ID.; ID.; ID.; RIGHTS OF ILLEGALLY DISMISSED EMPLOYEES. — As
a regular worker, private respondent is entitled to security of tenure under Article
279 of the Labor Code and can only be removed for cause. We found no valid
cause attending to private respondent's dismissal and found also that his
dismissal was without due process. The failure of the petitioner to comply with
these procedural guidelines renders its dismissal of private respondent, illegal.
An illegally dismissed employee is entitled to reinstatement with full backwages,
inclusive of allowances, and to his other benefits computed from the time his
compensation was withheld from him up to the time of his actual reinstatement,
pursuant to Article 279 of the Labor Code.
6. ID.; ID.; ID.; ID.; PRIVATE RESPONDENT IS ENTITLED TO SERVICE
INCENTIVE LEAVE OF FIVE DAYS FOR EVERY YEAR OF SERVICE, BASED
ON ACTUAL SERVICE RENDERED AND IN ACCORDANCE WITH EACH
CONTRACT OF EMPLOYMENT TO BE COMPUTED UP TO THE DATE OF
REINSTATEMENT. — Article 95 (a) of the Labor Code governs the award of
service incentive leave. It provides that every employee who has rendered at
least one year of service shall be entitled to a yearly service incentive leave of
five days with pay, and Section 3, Rule V, Book III of the Implementing Rules and
Regulations, defines the term "at least one year of service" to mean service
within 12 months, whether continuous or broken reckoned from the date the
employee started working, including authorized absences and paid regular
holidays, unless the working days in the establishment as a matter of practice or
policy, or that provided in the employment contract is less than 12 months, in
which case said period shall be considered as one year. Accordingly, private
respondent's service incentive leave credits of five days for every year of service,
based on the actual service rendered to the petitioner, in accordance with each
contract of employment should be computed up to the date of reinstatement
pursuant to Article 279 of the Labor Code.

DECISION

QUISUMBING, J  : p

This petition for review assails the Decision 1 dated October 30, 2001 of

the Court of Appeals and its Resolution 2 dated February 28, 2002 in CA-G.R.
SP No. 60136, denying the petitioner's motion for reconsideration for lack of
merit. The decision affirmed the National Labor Relations Commission (NLRC)
which declared private respondent Glen Solon a regular employee of the
petitioner and awarded him 13th month pay, service incentive leave pay,
reinstatement to his former position with full backwages from the time his salary
was withheld until his reinstatement.
Petitioner is a plumbing contractor. Its business depends on the number
and frequency of the projects it is able to contract with its clients. 3
Private respondent Solon worked for petitioner. His employment records is
as follows:
December 14, 1994 up to January 14, 1995 St. Charbel Warehouse
February 1, 1995 up to April 30, 1995 St. Charbel Warehouse
May 23, 1995 up to June 23, 1995 St. Charbel Warehouse
August 15, 1995 up to October 31, 1995 St. Charbel Warehouse
November 2, 1995 up to January 31, 1996 St. Charbel Warehouse
May 13, 1996 up to June 15, 1996 Ayala Triangle
August 27, 1996 up to November 30, 1996 St. Charbel Warehouse 4 
July 14, 1997 up to November 1997 ICPWI Warehouse
November 1997 up to January 5, 1998 Cathedral Heights
January 6, 1998 Rockwell Center 5 
On February 23, 1998, while private respondent was about to log out from
work, he was informed by the warehouseman that the main office had instructed
them to tell him it was his last day of work as he had been terminated. When
private respondent went to the petitioner's office on February 24, 1998 to verify
his status, he found out that indeed, he had been terminated. He went back to
petitioner's office on February 27, 1998 to sign a clearance so he could claim his
13th month pay and tax refunds. However, he had second thoughts and refused
to sign the clearance when he read the clearance indicating he had resigned. On
March 6, 1998, he filed a complaint alleging that he was illegally dismissed
without just cause and without due process. 6
In a Decision dated February 26, 1999, the Labor Arbiter ruled that private
respondent was a regular employee and could only be removed for cause.
Petitioner was ordered to reinstate private respondent to his former position with
full backwages from the time his salary was withheld until his actual
reinstatement, and pay him service incentive leave pay, and 13th month pay for
three years in the amount of P2,880 and P14,976, respectively.  TIAEac

Petitioner appealed to the National Labor Relations Commission (NLRC),

which ruled:
WHEREFORE, prescinding from the foregoing and in the interest
of justice, the decision of the Labor Arbiter is hereby AFFIRMED with a
MODIFICATION that the 13th month pay should be given only for the
year 1997 and portion of 1998. Backwages shall be computed from the
time he was illegally dismissed up to the time of his actual reinstatement.
Likewise, service incentive leave pay for three (3) years is also awarded
to appellee in the amount of P2,880.00.
SO ORDERED. 7
Petitioner's Motion for Reconsideration was denied. 8
Petitioner appealed to the Court of Appeals, alleging that
the NLRC committed grave abuse of discretion in finding that the private
respondent was a regular employee and in awarding 13th month pay, service
incentive leave pay, and holiday pay to the private respondent despite evidence
of payment. The said petition was dismissed for lack of merit. 9
Before us now, petitioner raises the following issues: (1) Whether the
respondent is a project employee of the petitioner or a regular employee; and (2)
Whether the Court of Appeals erred seriously in awarding 13th month pay for the
entire year of 1997 and service incentive leave pay to the respondent and without
taking cognizance of the evidence presented by petitioner. 10
The petitioner asserts that the private respondent was a project employee.
Thus, when the project was completed and private respondent was not re-
assigned to another project, petitioner did not violate any law since it was
petitioner's discretion to re-assign the private respondent to other projects. 11
Article 280 of the Labor Code states:
The provisions of written agreement of 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. . . (Italics supplied.)
We held in Tomas Lao Construction v. NLRC  12  that the principal test in
determining whether an employee is a "project employee" or "regular employee,"
is, whether he is assigned to carry out a "specific project or undertaking," the
duration (and scope) of which are specified at the time the employee is engaged
in the project. 13 "Project" refers to a particular job or undertaking that is within
the regular or usual business of the employer, but which is distinct and separate
and identifiable from the undertakings of the company. Such job or undertaking
begins and ends at determined or determinable times. 14
In our review of the employment contracts of private respondent, we are
convinced he was initially a project employee. The services he rendered, the
duration and scope of each project are clear indications that he was hired as a
project employee.  aACHDS

We concur with the NLRC that while there were several employment

contracts between private respondent and petitioner, in all of them, private
respondent performed tasks which were usually necessary or desirable in the
usual business or trade of petitioner. A review of private respondent's work
assignments patently showed he belonged to a work pool tapped from where
workers are and assigned whenever their services were needed. In a work pool,
the workers do not receive salaries and are free to seek other employment during
temporary breaks in the business. They are like regular seasonal workers insofar
as the effect of temporary cessation of work is concerned. This arrangement is
beneficial to both the employer and employee for it prevents the unjust situation
of "coddling labor at the expense of capital" and at the same time enables the
workers to attain the status of regular employees. 15 Nonetheless, the pattern of
re-hiring and the recurring need for his services are sufficient evidence of the
necessity and indispensability of such services to petitioner's business or
trade. 16
 In Maraguinot, Jr. v. NLRC  17  we ruled that once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, re-hired by
the same employer for the same tasks or nature of tasks; and (2) these tasks are
vital, necessary and indispensable to the usual business or trade of the
employer, then the employee must be deemed a regular employee.
In this case, did the private respondent become a regular employee then?
The test to determine whether employment is regular or not is the
reasonable connection between the particular activity performed by the employee
in relation to the usual business or trade of the employer. 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. 18 Thus, we held that where the
employment of project employees is extended long after the supposed project
has been finished, the employees are removed from the scope of project
employees and are considered regular employees. 19
While length of time may not be the controlling test for project employment,
it is vital in determining if the employee was hired for a specific undertaking or
tasked to perform functions vital, necessary and indispensable to the usual
business or trade of the employer. Here, private respondent had been a project
employee several times over. His employment ceased to be coterminous with
specific projects when he was repeatedly re-hired due to the demands of
petitioner's business. 20 Where from the circumstances it is apparent that periods
have been imposed to preclude the acquisition of tenurial security by the
employee, they should be struck down as contrary to public policy, morals, good
customs or public order. 21
Further, Policy Instructions No. 20 requires employers to submit a report of
an employee's termination to the nearest public employment office every time his
employment was terminated due to a completion of a project. The failure of the
employer to file termination reports is an indication that the employee is not a
project employee. 22 Department Order No. 19 superseding Policy Instructions
No. 20 also expressly provides that the report of termination is one of the
indications of project employment. 23 In the case at bar, there was only one list of
terminated workers submitted to the Department of Labor and Employment. 24 If
private respondent was a project employee, petitioner should have submitted a
termination report for every completion of a project to which the former was
assigned.  DAaIEc

Juxtaposing private respondent's employment history, vis the requirements

in the test to determine if he is a regular worker, we are constrained to say he is.
 
As a regular worker, private respondent is entitled to security of tenure
under Article 279 of the Labor Code 25 and can only be removed for cause. We
found no valid cause attending to private respondent's dismissal and found also
that his dismissal was without due process.
Additionally, Article 277(b) of the Labor Code provides that
. . . Subject to the constitutional right of workers to security of
tenure and their right to be protected against dismissal except for a just
and authorized cause and without prejudice to the requirement of notice
 under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice containing
a statement of the causes for termination and shall afford the latter
ample opportunity to be heard and to defend himself with the assistance
of his representative if he so desires in accordance with company rules
and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. . . .
The failure of the petitioner to comply with these procedural guidelines
renders its dismissal of private respondent, illegal. An illegally dismissed
employee is entitled to reinstatement with full backwages, inclusive of
allowances, and to his other benefits computed from the time his compensation
was withheld from him up to the time of his actual reinstatement, pursuant to
Article 279 of the Labor Code.
However, we note that the private respondent had been paid his 13th
month pay for the year 1997. The Court of Appeals erred in granting the same to
him.
Article 95(a) of the Labor Code governs the award of service incentive
leave. It provides that every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay,
and Section 3, Rule V, Book III of the Implementing Rules and Regulations,
defines the term "at least one year of service" to mean service within 12
months, whether continuous or broken reckoned from the date the employee
started working, including authorized absences and paid regular holidays, unless
the working days in the establishment as a matter of practice or policy, or that
provided in the employment contract is less than 12 months, in which case said
period shall be considered as one year. Accordingly, private respondent's service
incentive leave credits of five days for every year of service, based on the actual
service rendered to the petitioner, in accordance with each contract of
employment should be computed up to the date of reinstatement pursuant to
Article 279 of the Labor Code.26
WHEREFORE, the assailed Decision dated October 30, 2001 and
the Resolution dated February 28, 2002 of the Court of Appeals in CA-G.R. SP
No. 60136, are AFFIRMED with MODIFICATION. The petitioner is hereby
ORDERED to (1) reinstate the respondent with no loss of seniority rights and
other privileges; and (2) pay respondent his backwages, 13th month pay for the
year 1998 and Service Incentive Leave Pay computed from the date of his illegal
dismissal up to the date of his actual reinstatement. Costs against petitioner.  aEcSIH

SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.
 
Footnotes
1.Rollo, pp. 36-44. Penned by Associate Justice Marina L. Buzon, with Associate
Justices Buenaventura J. Guerrero, and Alicia L. Santos concurring.
2.Id. at 46-47.
3.Id. at 17.
4.Ibid.
5.CA Rollo, pp. 20-22.
 6.Id. at 20-21.
7.Rollo, p. 38.
8.Ibid.
9.Id. at 38-43.
10.Id. at 20, 27.
11.Id. at 27.
12.G.R. No. 116781, 5 September 1997, 278 SCRA 716, 726, citing ALU-
TUCP v. National Labor Relations Commission, G.R. No. 109902, 2 August
1994, 234 SCRA 678, 685.
13.Uy v. National Labor Relations Commission, G.R. No. 117983, 6 September
1996, 261 SCRA 505, 513.
14.Tomas Lao Construction v. NLRC, supra, note 12.
15.Tomas Lao Construction v. NLRC, supra, note 12 at 727-728.
16.Baguio Country Club Corporation v. NLRC, G.R. No. 71664, 28 February 1992,
206 SCRA 643, 650.
17.G.R. No. 120969, 22 January 1998, 284 SCRA 539, 561.
18.De Leon v. National Labor Relations Commission, G.R. No. 70705, 21 August
1989, 176 SCRA 615, 621.
19.Tomas Lao Construction v. NLRC, supra, note 12 at 726.
20.Id. at 726-727.
21.Samson v. National Labor Relations Commission, G.R. No. 113166, 1 February
1996, 253 SCRA 112, 124.
22.Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, 2 January 1997, 266
SCRA 48, 63-64; Philippine National Construction Corp. v. NLRC, G.R. No.
95816, 27 October 1992, 215 SCRA 204,
211; Philippine National Construction Corporation v. NLRC, G.R. No. 85323,
20 June 1989, 174 SCRA 191,
194; Ochoco v. National Labor Relations Commission, No. L-56363, 24
February 1983, 120 SCRA 774, 777.
23.Tomas Lao Construction v. NLRC, supra, note 12 at 729-730, citing Sec. 2.2 (e),
Department Order No. 19, April 1, 1993.
24.Rollo, p. 18.
25.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.
26.Imbuido v. National Labor Relations Commission, G.R. No. 114734, 31 March
2000, 329 SCRA 357, 368.
 (Integrated Contractor and Plumbing Works Inc. v. National Labor Relations
|||

Commission, G.R. No. 152427, [August 9, 2005], 503 PHIL 875-886)

 SECOND DIVISION

[G.R. No. 164736. October 14, 2005.]

UNIVERSAL ROBINA CORPORATION and/or RANDY

GREGORIO, petitioners, vs. BENITO CATAPANG, CARLOS
ARARAO, ALVIN ALCANTARA, RESTY ALCORAN,
REYNALDO ARARAO, JUAN ARISTADO, LITO CABRERA,
ONOFRE CASANO, BEN CERVAS, JOSEPH CHUIDIAN,
IRENEO COMENDADOR, ANGELITO CONCHADA, RICHARD
CORONADO, ELMER HILING, RAMON JOYOSA, JOSE LORIA,
JR., VICTORIANO LORIA, RUEL MARIKIT, RODERICK PANG-
AO, QUIRINO PLATERO, PABLITO REDONDO, RAMIL ROXAS,
RESTY SALAZAR, NOEL TRINIDAD, FELICISIMO VARELA,
BALTAZAR VILLANUEVA, ELPIDIO VILLANUEVA, JOEL
VILLANUEVA, JONATHAN VILLANUEVA, and JAIME
VILLEGAS, respondents.

DECISION

CALLEJO, SR., J  : p

Petitioner Universal Robina Corporation is a corporation duly organized

and existing under the Philippine laws, while petitioner Randy Gregorio is the
manager of the petitioner company's duck farm in Calauan, Laguna. 1
The individual respondents were hired by the petitioner company on
various dates from 1991 to 1993 to work at its duck farm in Barangay Sto.
Tomas, Calauan, Laguna. The respondents were hired under an employment
contract which provided for a five-month period. After the expiration of the said
employment contracts, the petitioner company would renew them and re-employ
the respondents. This practice continued until sometime in 1996, when the
petitioners informed the respondents that they were no longer renewing their
employment contracts. 2
In October 1996, the respondents filed separate complaints for illegal
dismissal, reinstatement, backwages, damages and attorney's fees against the
petitioners. The complaints were later consolidated.
On March 30, 1999, after due proceedings, the Labor Arbiter rendered a
decision in favor of the respondents:
WHEREFORE, premises considered, judgment is hereby
rendered declaring that complainants have indeed been illegally
dismissed from their employment.
Accordingly, respondents are hereby ordered to reinstate
individual complainants to their former positions without loss of seniority
rights and to pay them their backwages as follows:
  Complainants Amount
1. Reynaldo Ararao P113,703.20
2. Carlos Ararao P100,372.48
3. Resty Alcoran P100,372.48
4. Richard Coronado P113,703.20
5. Quirino Platero P113,703.20
6. Benito Catapang P113,703.20
7. Jose Loria, Jr. P100,372.48
8. Elpidio Villanueva P113,703.20
9. Jonathan Villanueva P113,703.20
10. Baltazar Villanueva P113,703.20
11. Victoriano Loria P144,881.10
12. Roderick Pangao P100,372.48
13. Lito Cabrera P113,703.20
14. Elmer Hiling P113,703.20
15. Jaime Villegas P113,703.20
16. Angelito Conchada P119,192.20
17. Juan Aristado P113,703.20
18. Joel Villanueva P113,703.20
19. Ben Cervas P113,703.20
20. Ruel Marikit P113,703.20
21. Ireneo Comendador P113,703.20
    ––––––––––
  Total P2,339,933.44
Respondents are likewise ordered to pay fifteen percent (15%) of
the total amount due, or P350,990.01, as and by way of attorney's fees.
SO ORDERED. 3
On May 17, 1999, the petitioners filed an Appeal Memorandum with the
National Labor Relations Commission (NLRC) on the ground that the Labor
Arbiter erred in ruling that the respondents are the petitioner company's regular
employees.  ScTaEA

Meanwhile, on May 18, 1999, the respondents filed a Motion for

Enforcement of Reinstatement Order with the Labor Arbiter. On June 3, 1999,
the latter issued an Order, which reads in full:
Finding the "Motion for Enforcement of Reinstatement Order"
dated 18 May 1999, filed by the complainants to be in order,
 respondents are hereby directed to immediately comply in good faith to
the reinstatement aspect of the Decision of this Office dated 30 March
1999.
Furthermore, it appearing from the records that several individuals
in this case were inadvertently omitted as party-complainants in the
aforesaid Decision, clarification is hereby made that the complainants
hereinbelow set forth are to be deemed included in the coverage of the
said decision with the corresponding right(s) to their backwages, to wit:
1. Alvin Alcantara P129,126.40
2. Onofre Casano P106,917.20
3. Joseph Chuidian P104,165.10
4. Ramon Joyosa P128,029.20
5. Pablito Redondo P105,409.20
6. Ramil Roxas P109,330.00
7. Resty Salazar P105,296.10
8. Noel Trinidad P108,312.10
9. Felicisimo Varela P119,358.20
    ––––––––––
  TOTAL P1,015,943.50
SO ORDERED. 4
On June 21, 1999, the Labor Arbiter issued a Writ of Execution enforcing
the immediate reinstatement of the respondents as mandated in the March 30,
1999 Decision.
On July 13, 1999, the petitioners manifested to the Labor Arbiter that they
can reinstate only 17 of the 30 employees in view of the phase out of the
petitioner company's Agricultural Section as early as 1996. They averred that
there were no other available positions substantially similar to the positions
previously occupied by the other 13 respondents, but that 10 of them could be
accommodated at the farm's Duck Dressing Section which operates at an
average of three days a week only. 5
On August 2, 1999, the Sheriff filed a Report stating that the petitioners
had not yet reinstated the respondents. 6 The respondents then urged the Labor
Arbiter to order their physical or payroll reinstatement and to cite the petitioners
in contempt. On November 26, 1999, the Labor Arbiter issued an
Order 7 directing the petitioners, under pain of contempt, to comply with the
March 30, 1999 Decision.
On December 16, 1999, 17 employees were reinstated to their former
positions. Thereafter, the respondents moved for the immediate reinstatement of
the remaining 13 respondents. In the meantime, the petitioners manifested to the
Labor Arbiter about the closure of the duck farm effective March 15, 2000. 8
On February 9, 2000, the Labor Arbiter issued an Order 9 directing the
petitioners to immediately effect the actual or payroll reinstatement of the
remaining 13 respondents. In the said Order, the petitioners were likewise
directed to settle whatever financial accountabilities they may have with the said
respondents due to the delay in complying with the reinstatement aspect of the
March 30, 1999 Decision.
On February 16, 2000, the respondents manifested that the petitioners still
failed and refused to comply with the February 9, 2000 Order. That same day,
the Labor Arbiter issued an Alias Writ of Execution commanding the Sheriff to
cause the immediate reinstatement of the 13 respondents and to collect their
withheld salaries. 10
On February 21, 2000, the respondents moved for the issuance of a notice
of garnishment to collect the accumulated withheld wages of the 17 respondents
who were reinstated on December 16, 1999 amounting to P649,400.00. The
Labor Arbiter granted the motion and issued a Second Alias Writ of Execution
directing the Sheriff to proceed to collect the said amount plus execution fees. 11
Thereafter, the petitioners filed an urgent motion to reconsider the
February 9, 2000 Order and to quash the Alias Writ of Execution. They reiterated
their previous contention that they are unable to comply with the order either
because the section to which the 13 respondents were previously assigned had
been phased out or the positions previously held by them have already been
filled up. 12
On March 1, 2000, the Labor Arbiter issued an Order 13 denying the
petitioners' motion to quash insofar as the reinstatement aspect is concerned as
well as the motion to reconsider and set aside the February 9, 2000 Order. In
case of failure to comply with the reinstatement of the 13 respondents, the Labor
Arbiter directed the petitioner company to pay them separation pay instead. 14
On March 13, 2000, the petitioners filed a Memorandum and Notice of
Appeal with Prayer for the Issuance of a Temporary Restraining Order 15 with the
NLRC, assailing the February 9, 2000 and March 1, 2000 Orders and the two
Alias Writs of Execution issued by the Labor Arbiter.
On November 22, 2000, the NLRC affirmed the decision of the Labor
Arbiter with the modification that the award of attorney's fees was reduced to
10% of the total monetary award. 16
Aggrieved, the petitioners filed a petition for certiorari with the Court of
Appeals (CA). On August 21, 2003, the CA denied the petition for lack of
merit. 17 The CA held that after rendering more than one year of continuous
service, the respondents became regular employees of the petitioners by
operation of law. Moreover, the petitioners used the five-month contract of
employment as a convenient subterfuge to prevent the respondents from
becoming regular employees and such contractual arrangement should be struck
down or disregarded as contrary to public policy or morals. The petitioners' act of
repeatedly and continuously hiring the respondents in a span of three to five
years to do the same kind of work negates their assertion that the respondents
were hired for a specific project or undertaking only. As to the issue of the failure
to reinstate the 13 respondents pending appeal, the CA opined that the
petitioners should have at least reinstated them in the payroll if there were indeed
no longer any available positions for which they could be
accommodated. 18 Finally, the CA did not believe that the petitioners' counsel
was not furnished with copies of the assailed orders and the alias writs of
execution considering that, after the issuance of the said orders, the petitioners
were able to file several pleadings questioning the same. 19
On September 23, 2003, the petitioners filed a Manifestation and Motion
for Additional Time to File a Motion for Reconsideration of the CA
Decision. 20 They alleged therein that they received a copy of the decision on
September 8, 2003 and had until September 23, 2003 to file a motion for
reconsideration. They then prayed for an extension of 10 days, or until October 3,
2003, to submit a motion for reconsideration.  ITDHcA
 Realizing their error, the petitioners filed their Motion for Reconsideration
two days later. In a Resolution 21 dated September 30, 2003, the CA denied the
petitioners' earlier motion for extension of time for being a prohibited pleading.
Subsequently, the petitioners filed their Urgent Motion to Admit Petitioners'
Motion for Reconsideration, but the CA merely noted the petitioners' motion for
reconsideration in its April 15, 2004 Resolution. This prompted the petitioners to
file a Motion to Resolve Petitioners' Motion for Reconsideration. 22 Finding no
cogent reason to depart from its previous resolution denying the motion for
extension of time to file a motion for reconsideration, the CA denied the said
motion for lack of merit on July 19, 2004. 23
 
Hence, this petition for review wherein the petitioners raise the following
grounds:
I.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED
THAT THE RESPONDENTS ATTAINED THE STATUS OF REGULAR
EMPLOYMENT AFTER THE LAPSE OF ONE YEAR FROM THE DATE
OF THEIR EMPLOYMENT.
II.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED
THAT DESPITE THE UNAVAILABILITY OF POSITIONS WHERE THE
THIRTEEN (13) RESPONDENTS ARE TO BE REINSTATED THEY
SHOULD STILL BE REINSTATED THROUGH PAYROLL.
III.
THE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO
RESOLVE THE ISSUE OF WHETHER OR NOT THE PETITIONERS
SHOULD BE HELD LIABLE FOR THE PAYMENT OF THE ALLEGED
WITHHELD SALARIES OF THE RESPONDENTS FROM THE DATE
OF ISSUANCE OF THE WRIT DESPITE THAT RESPONDENTS'
BELATED OR NON-REINSTATEMENT CANNOT BE ATTRIBUTED TO
THE PETITIONERS.
IV.
THE COURT OF APPEALS SHOULD HAVE RESOLVED
PETITIONERS' MOTION FOR RECONSIDERATION CONSIDERING
THAT THE DELAY WAS ONLY FOR TWO (2) DAYS AND WAS THE
RESULT OF AN HONEST MISTAKE. 24
The petitioners submit that the respondents are not regular employees.
They aver that it is of no moment that the respondents have rendered service for
more than a year since they were covered by the five-month individual contracts
to which they duly acquiesced. The petitioners contend that they were free to
terminate the services of the respondents at the expiration of their individual
contracts. The petitioners maintain that, in doing so, they merely implemented
the terms of the contracts. 25
The petitioners assert that the respondents' contracts of employment were
not intended to circumvent security of tenure. They point out that the respondents
knowingly and voluntarily agreed to sign the contracts without the petitioners
having exercised any undue advantage over them. Moreover, there is no
evidence showing that the petitioners exerted moral dominance on the
respondents. 26
The petitioners further assert that they cannot be compelled to actually
reinstate, or merely reinstate in the payroll the 13 respondents considering there
are no longer any available positions in the company. They submit that
reinstatement presupposes that the previous positions from which the
respondents had been removed still exist or that there are unfilled positions,
more or less, of similar nature as the ones previously occupied by the said
employees. Consequently, they cannot be made to pay the salaries of these
employees from the time the writ of execution was issued. 27
Finally, the petitioners aver that their motion for reconsideration of the CA
Decision should have been admitted by the CA considering that the delay was
only for two days and such delay was due to an honest mistake. They maintain
that the ends of substantial justice would have been better served if the motion
for reconsideration was resolved since it raised critical issues previously raised in
the petition but not resolved by the CA. 28
For their part, the respondents aver that the instant petition should be
dismissed outright because the CA Decision has already become final since the
petitioners filed their motion for reconsideration beyond the reglementary 15-day
period. They also aver that the motion for extension of time to file a motion for
reconsideration, a prohibited pleading, did not suspend the running of the period
to file a motion for reconsideration, which is also the period for filing an appeal
with this Court. Hence, at the time the present petition was filed with this Court,
the period for filing the appeal had already lapsed. 29 The respondents further
aver that the petition should likewise be dismissed for lack of a verified statement
of material dates. They assert that the Rules of Court requires a separate verified
statement of material dates and its incorporation in the body of the petition is not
substantial compliance of such requirement. 30
The respondents aver that they acquired the status as regular employees
after rendering one year of service to the petitioner company. They contend that
the contracts providing for a fixed period of employment should be struck down
as contrary to public policy, morals, good customs or public order as it was
designed to preclude the acquisition of tenurial security. 31
The respondents contend that the order directing their payroll
reinstatement was proper considering that the petitioners have failed to actually
reinstate them. 32 They assert that the delay in the reinstatement of the 13
respondents could only be attributed to the petitioners; hence, they are liable for
withheld salaries to these employees. 33
It appears that the present petition has, indeed, been filed beyond the
reglementary period for filing a petition for review under Rule 45 of the Rules of
Court. This period is set forth in Section 2, Rule 45, which provides as follows:
SEC. 2. Time for filing; extension. — The petition shall be filed
within fifteen (15) days from notice of the judgment or final order or
resolution appealed from, or of the denial of the petitioner's motion for
new trial or reconsideration filed in due time after notice of judgment. . . .
(Emphasis supplied.)
In conjunction with the said provision, Section 1, Rule 52 of the same
Rules provides:
 SEC. 1. Period for filing. — A party may file a motion for
reconsideration of a judgment or final resolution within fifteen (15) days
from notice thereof, with proof of service on the adverse party.
Clearly, the period for filing a motion for reconsideration and a petition for
review with this Court are the same, that is, 15 days from notice of the judgment.
When an aggrieved party files a motion for reconsideration within the said period,
the period for filing an appeal is suspended. If the motion is denied, the
aggrieved party is given another 15-day period from notice of such denial within
which to file a petition for review under Rule 45. It must be stressed that the
aggrieved party will be given a fresh 15-day period only when he has filed his
motion for reconsideration in due time — on or before the expiration of the
original 15-day period. Otherwise, if the motion for reconsideration is filed out of
time and no appeal has been filed, the subject decision becomes final and
executory. 34 As such, it becomes immutable and can no longer be attacked by
any of the parties or be modified, directly or indirectly, even by the highest court
of the land. 35
The petitioners received the CA Decision on September 8, 2003; hence,
they had until September 23, 2003 within which to file a motion for
reconsideration, or an appeal, through a petition for review, with this Court.
Instead, the petitioners filed a motion for extension of time to file a motion for
reconsideration on September 23, 2003, which is a prohibited pleading. 36 Thus,
it did not suspend the running of the period for filing an appeal. Consequently,
the period to file a petition for review with this Court also expired on September
23, 2003. Instead of going straight to this Court to attempt to file a petition for
review (which had already expired), the petitioners pursued recourse in the CA
by filing their motion for reconsideration two days later, or on September 25,
2003. The CA merely noted the same. Dissatisfied, the petitioners subsequently
filed a motion to resolve their motion for reconsideration. The CA acted on this
motion only on July 19, 2004 and denied the same for lack of merit.  CacEIS

In filing their petition for review with this Court, the petitioners counted the
15-day period from their receipt of the July 19, 2004 CA Resolution on August 4,
2004. Hence, according to their Motion for Extension of Time to File Petition for
Review which they filed on August 19, 2004, they had until that day within which
to file a petition for review. They then asked the Court that they be granted an
extension of 30 days, or until September 21, 2004 within which to file their
petition. The Court granted the motion on the belief that the petitioners' motion for
reconsideration before the CA was duly filed and that the assailed July 19, 2004
CA Resolution had denied the said motion. Thereafter, the petitioners filed their
petition for review on September 20, 2004.
It is, therefore, evident from the foregoing that the present petition was filed
way beyond the reglementary period. Hence, its outright dismissal would be
proper. The perfection of an appeal in the manner and within the period
prescribed by law is not only mandatory but jurisdictional, and failure to perfect
an appeal has the effect of rendering the judgment final and executory. 37 Just as
a losing party has the privilege to file an appeal within the prescribed period, so
does the winner also have the correlative right to enjoy the finality of the
decision. 38
Anyone seeking exemption from the application of the reglementary period
for filing an appeal has the burden of proving the existence of exceptionally
meritorious instances warranting such deviation. 39 In this case, the petitioners
failed to prove the existence of any fact which would warrant the relaxation of
the rules. In fact, they have not even acknowledged that their petition was filed
beyond the reglementary period.
In any case, we find that the CA, the NLRC and the Labor Arbiter correctly
categorized the respondents as regular employees of the petitioner company.
In Abasolo v. National Labor Relations Commission, 40 the Court reiterated the
test in determining whether one is a regular employee:
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 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. 41
 
Thus, we quote with approval the following excerpt from the decision of the
CA:
It is obvious that the said five-month contract of employment was
used by petitioners as a convenient subterfuge to prevent private
respondents from becoming regular employees. Such contractual
arrangement should be struck down or disregarded as contrary to public
policy or morals. To uphold the same would, in effect, permit petitioners
to avoid hiring permanent or regular employees by simply hiring them on
a temporary or casual basis, thereby violating the employees' security of
tenure in their jobs. 
HSTCcD

xxx xxx xxx

Petitioners' act of repeatedly and continuously hiring private
respondents in a span of . . . 3 to 5 years to do the same kind of work
negates their contention that private respondents were hired for a
specific project or undertaking only. 42
Further, factual findings of labor officials who are deemed to have acquired
expertise in matters within their respective jurisdiction are generally accorded not
only respect but even finality, and bind us when supported by substantial
evidence. 43
WHEREFORE, premises considered, the petition is DENIED DUE
COURSE. The Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Puno, Austria-Martinez, Tinga and Chico-Nazario, JJ., concur.
 
Footnotes
1.Rollo, p. 13.
2.CA Rollo, pp. 45-46.
3.Rollo, pp. 51-52.
4.Rollo, pp. 110-111.
5.Id. at 112-113.
6.CA Rollo, p. 92.
7.Rollo, p. 122
8.Id. at 126.
9.Id. at 129-130.
10.Rollo, pp. 133-134.
11.Id. at 140-142.
12.Id. at 137.
13.Id. at 144-150.
14.Id. at 150.
15.Rollo, pp. 151-166.
16.Id. at 189.
17.Id. at 36-56.
18.Rollo, pp. 49-53.
19.Id. at 55.
20.CA Rollo, pp. 519-522.
21.Id. at 523.
22.Id. at 592-596.
23.Rollo, pp. 60-62.
24.Id. at 18.
25.Rollo, pp. 19-20.
26.Id. at 21-22.
27.Id. at 24-26.
28.Rollo, pp. 29-30.
29.Id. at 321-326.
30.Id. at 332-336.
31.Id. at 340-342.
32.Rollo, p. 351.
33.Id. at 355.
34.Santos v. Court of Appeals, G.R. No. 135481, 23 October 2001, 368 SCRA 91.
35.Teodoro v. Court of Appeals, G.R. No. 140799, 10 September 2002, 388 SCRA
527.
36.Habaluyas Enterprises, Inc. v. Japson, G.R. No. L-70895, 30 May 1986, 142
SCRA 208.
 37.Producers Bank of the Philippines v. Court of Appeals, G.R. No. 126620, 17 April
2002, 381 SCRA 185.
38.Cuevas v. Bais Steel Corporation, G.R. No. 142689, 17 October 2002, 391 SCRA
192.
39.Neplum, Inc. v. Orbeso, G.R. No. 141986, 11 July 2002, 384 SCRA 466.
40.G.R. No. 118475, 29 November 2000, 346 SCRA 293.
41.Id. at 304.
42.Rollo, pp. 51-52.
43.Abalos v. Philex Mining Corporation, G.R. No. 140374, 27 November 2002, 393
SCRA 134.
 (Universal Robina Corp. v. Catapang, G.R. No. 164736, [October 14, 2005],
|||

509 PHIL 765-780)

SECOND DIVISION

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

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 C
OMMISSION (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.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE

EXECUTIVE BRANCH OF GOVERNMENT; RULE AND EXCEPTION. — 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; 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; 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.
2. LABOR AND SOCIAL LEGISLATION; STATUS OF EMPLOYMENT;
REGULAR AND CASUAL EMPLOYEES; DISTINGUISHED. — The first
paragraph answers the question of who are regular 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.
The second paragraph of Art. 280 demarcates as "casual" employees, all
other employees who do not fall 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.
3. ID.; ID.; PURPOSE OF THE PROVISO IN THE SECOND
PARAGRAPH OF ARTICLE 280 OF THE LABOR CODE. — 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 so-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. 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.
4. ID.; ID.; PROJECT EMPLOYEES; DEFINED. — 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. (Philippine National Construction
Corporation vs. National Labor Relations Commission, G.R. No. 85323, 20
June 1989, 174 SCRA 191.
5. STATUTORY CONSTRUCTION; "PROVISO"; RULE AND
EXCEPTION. — 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. 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
section thereof. 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.

DECISION

PADILLA, J  :p

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.  cdrep

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 above-named 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 rice 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. prLL

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 rice 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
Fortunato 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 all 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
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 this
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 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. 12 15 of the Department
of Labor and Employment clearly lends support to this contention, when it
states: LLpr

"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 regular for the duration of the definite period.
This concept of regular 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 affirmed 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 of the
respondents. The very nature of the terms and conditions of their hiring
reveal that the petitioners were required to perform phases of agricultural
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 planting 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.
 cdphil

"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 afore-mentioned 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 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."
The first paragraph answers the question of who are regular
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.  LexLib

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, 26 as in the present case.
 The second paragraph of Art. 280 demarcates as "casual" employees,
all other employees who do not fall 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. 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 so-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.
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 termination of their employment
cannot and should not constitute an illegal dismissal. 30
WHEREFORE, the petition is DISMISSED. The decision of
the National Labor Relations Commission affirming that of the Labor Arbiter,
under review, is AFFIRMED. No pronouncement as to costs.  cdrep

SO ORDERED.
Melencio-Herrera, Paras and Regalado, JJ., concur.
Sarmiento, J., is on leave.
 
Footnotes
*Penned by Presiding Commissioner of the NLRC, Guillermo C. Medina and
concurred in by Commissioners Gabriel M. Gatchalian and Miguel B. Varela.
1.Rollo, p. 23.
2.Rollo, pp. 23-24.
3.Rollo, p. 24.
4.Rollo, pp. 24-25.
5.Rollo, p. 25.
6.Ibid.
7.Ibid.
8.Rollo, pp. 25-26.
9.Rollo, p. 26 and Article 291, Labor Code of the Philippines.
10.Rollo, p. 26.
11.Rollo, pp. 27-30.
12.Rollo, pp. 31-33.
13.Rollo, p. 13.
14.Rollo, pp. 13-14.
15.The Labor Code of the Philippines and its Implementing Rules and Regulations
compiled, edited and published by Vicente B. Foz, p. 364 cited in Rollo, p. 14.
16.Policy instruction No. 12, The Labor Code of the Philippines and Its Implementing
Rules and Regulations compiled, edited and published by Vicente B. Foz, 1991
Edition, p. 364.
17.Rollo, p. 15.
18.Rollo, pp. 151-152.
19.Rollo, pp. 152-153.
20.Rollo, p. 169.
21.Article 280 of the Labor Code of the Philippines cited in Rollo, pp. 169-170.
22.Ang Tibay vs. CIR, 69 Phil. 635 as cited in Feliciano Timbancaya vs. Vicente, G.R.
No. L-19100, December 27, 1963, 9 SCRA 852.
23.Lao Tang Bun vs. Fabre, 81 Phil. 682 as cited in Feliciano Timbancaya vs. Vicente,
G.R. No. L-19100, December 27, 1963, 9 SCRA 852.
24.Lovina vs. Moreno, G.R. No. L-17821, November 29, 1963, 9 SCRA 557.
25.Rollo, pp. 24-26.
26.Philippine National Construction
Corporation vs. National Labor Relations Commission, G.R. No. 85323, 20
June 1989, 174 SCRA 191.
27.Statutory Construction by Ruben Agpalo, 1986 ed., p. 173.
28.Chinese Flour Importers Association vs. Price Stabilization Board, 89 Phil. 469
(1951); Arenas v. City of San Carlos, G.R. No. 24024, April 5, 1978, 82 SCRA
318 (1978).
29.Commissioner of Internal Revenue v. Filipinas Compania de Seguros, 107 Phil.
1055 (1960).
30.PNOC — Exploration Corporation vs. National Labor Relations Commission, G.R.
No. 71711, 18 August 1988, 164 SCRA 501.
  (Mercado, Sr. v. National Labor Relations Commission, G.R. No. 79869,
|||

[September 5, 1991], 278 PHIL 345-357)

SECOND DIVISION

[G.R. No. 118475. November 29, 2000.]

ELVIRA ABASOLO, ANTONIO ABAY, PURIFICACION ABAY,

CATALINA ABELLERA, DANIEL ABELLERA, ELSIE
ABELLERA, LOURDES ADUSE, PACITA ALAMAN, REYNALDO
ALBAY, ROGELIO ALBAY, EMERITA ALCOY, ERLINDA
ALEGRE, CORAZON ALOOT, IMELDA ALOOT, ROWENA
ALOOT, SHIRLEY JULIANA ALOOT, ADORACION ANTALAN,
ESTRELLA ANTOLIN, EPIFANIA ANTONIO, CARMELITA
AQUINO, CECENIA ASPIRAS, EMILIANA ASPIRAS, ANA
BELEN ASPREC, MELENCIO ASPURIA, ILUMINADA ASTRO,
CARMELITA ASUNCION, FLORENTINA AVENA, EMILIA
BACQUIL, GLORIA BAGALAN, BENJAMIN BALANAG,
CLARITA BALANAG, CONSUELO BALANAG, DOLORES
BALANAG, CANDIDA BALANGA, CLARITA BALANGA,
FRANCISCA BALANGA, CORAZON BALANGUE, MILDRED
BALANGUE, ERLINDA BALDERAS, MANUEL BALLESIL,
ERLINDA BAMBAO, ROSEMARIE BASIO, AMALIA BATARIO,
CONCHITA BATARIO, CORAZON BATARIO, ERLINDA
BATARIO, GLORIA BATARIO, PEDRO BATARIO, JR.,
REBECCA BATARIO, PERLA BAUTISTA, SHIRLEY BAUTISTA,
ANGELISA BAYANI, MORGAN BEGALAN, FRANCISCA
BERBON, BERNARD VISITACION, EVELYN BIASON,
VERONICA BLANDO, UFENIA BLANZA, AMBROSIA BOADO,
CARLOS BOADO, LOLITA BORJE, MARILOU BUNGAY,
RODRIGO BURGOS, AMELITA CABALBAG, ERNESTO
CABALBAG, ELVIRA CABUGON, JOSEFINA CACANINDIN,
CORAZON CACAYARA, JAIME CACHERO, JULIET CALLANO,
ANDRES CALUZA, TERESITA CALUZA, ISABEL COMADRO,
EDITA CARBONEL, LOLITA CARILLA, BIENVENIDA CARINO,
DELIA CARINO, LOLITA CARINO, AMARIO CARREON,
ARMELINDA CARREON, ERLINDA CARREON, FECIDAD
CARREON, JOSE CARREON, MA. VICTORIA CARREON,
BENJAMIN CASALLO, DEMETRIA CASEM, ALBERTO CASIM,
GLORIA CASIM, FLORIDA CATUNGAL, ESTER CAVINTA,
REMEDIOS CAVINTA, ROSALINDA CAVINTA, JULITA
CAYABYAB, IRENE CELESTE CARMELITA CHAN, ESMENIA
CORDERO, LYDIA CORPUZ, JOVA CORTEZ, NORA CORTEZ,
MAGDALENA CUDAL, GENOVA DACANAY, SABINA BACLAN,
CORAZON DANAO, ELISA DASALLA, AGNES BIBIANA DE
CASTRO, ANITA DE CASTRO, EDITHA DE CASTRO, NIDA DE
CASTRO, CORAZON DE JESUS, JOSE DE JESUS, MERLA DE
JESUS, MILAGROS DE VERA, APOLINARIO DOLATRE,
CAMILO DOLOR, JR., LOLITA DOLOR, WILMA DOMINGO,
OLYMPIA DOMONOON, BASILIO DULATRE, BASILIO
DULATRE, IMELDA DULATRE, LETICIA DULATRE, MARTINA
DULATRE, RODRIGO DULATRE, JR., ROGELIO DULATRE,
TRIFONA DULATRE, CONSOLACION DULAY, CRESILDA
DULAY, DANILO DULAY, EDITHA DULAY, ELENA G. DULAY,
ERLINDA DULAY, ESTRELLA DULAY, ESTELITA DULAY,
ESTRELITA P. DULAY, EVANGELINE DULAY, FELICIDAD
DULAY, FELISA DULAY, GINA DULAY, GINA DULAY, GLORIA
DULAY, GUILLERMO DULAY, JAIME DULAY, LETICIA DULAY,
LOLITA DULAY, LUIS DULAY, MARIA G. DULAY, MILAGROS
DULAY, REMEDIOS DULAY, ROBERTO DULAY, SOTERO
DULAY, TERESITA DULAY, TERESITA G. DULAY, TERESITA
M. DULAY, THERESITA DULAY, VALENTIN DULAY, EDITHA
DUMO, REMEDIOS DY, RIA MAPILI, VICTORIO MAPILI,
ROBERTO MARAMBA, SUSANA MARAMBA, ANDRES
MARCOS, LANIA MARCOS, AURORA MARGASA, ARSENIA
MARIGZA, LOLITA MARQUEZ, ANA MARIA MARZAN,
ANGELITA MEDINA, ADELINA MEDRIANO, ELIZABETH
MEDRIANO, HERMINIA M. MEDRIANO, ROSALINDA
MEDRIANO, CLEOFE MELANA, LOLITA MELENDEZ,
LOURDES MIGUEL, EMILIA G. MILANES, JOSE MILANES,
LILIA MILO, LILIAN MILO, FELICIDA MORION, EVELYN
MOSTER, ADORACION MUNAR, ELEONORA MUNAR,
IMELDRA NAVARRO, TERESITA NAVERIDA, ANITA NINOBLA,
AURELIA NINOBLA, CARMELITA NINOBLA, MARCELA
NINOBLA, MYRNA NISPERO, JOSEFINA NUTO, LANY OBSRA,
ELENA OCAMPO, SYLVIA OLINARES, ROSITA OPENIANO,
TRINIDAD ORDUNA, ROSALINDA ORDONEZ, JESSIE
ORIBELLO, REMEDIOS ORIBELLO, TERESITA ORIBELLO,
HILARIO ORACION, AVELINA ORTILLA, MAGDALENA
ORTILLA, MARIETTA ORTILLA, LEONORA PADER, AMALIA
PADILLA, ARCELITA PADILLA, EVELYN PADILLA, FELICIDA
ORTILLA, JOSELYN PADILLA, JOSEPHINE PADILLA,
VIRGINIA PADILLA, CLARITA PAIS, EDUARDO PANIS, JESUS
PANIS, JOSE PANIS, TEOFILA PANIS, VIOLETA PARADO,
ROSITA PAROCHA, CARMELITA PASCUA, LUCIA PAYUMO,
MARIA PICAR, REYNALDA PILARCA, LUZVIMINDA QUERO,
ALEJANDRA QUEZADA, TEODORO QUEZADA, ARLENE
QUIBAN, AIDA QUINDARA, JUANITA QUINONES, GLORIA
RABOT, EFREN RACELIS, ERLINDA RACELIS, IMELDA
RACELIS, REMEDIOS RACELIS, SUSANA RACELIS,
TERESITA RACELIS, FLORITA RAQUEL, ALMA RAMIREZ,
CARMEN RAMIREZ, ROSEMARIE RAMIREZ, GEMMA RAMOS,
JUANITA RAMOS, IMELITA REYES, VICTORIA A. RIVERA,
VIRGINIA RIVERA, LYDIA ROBLES, EMILIA RONQUILLO,
ROSALLA ROSETE, FORTUNATO RUIZ, GLORIA RUIZ,
RICARDO RUIZ, ROSALINDA RUIZ, ROLIE RUIZ, DANILO
RULLA, EDITHA RULLA, MARITES RULLA, ANTONIO
RULLAMOS, BERNADETEE RULLAMAS, JULITA R.
RULLAMAS, SOLEDAD RULLAMAS, CELILIA RULLAN,
NAPOLEON RULLAN, NORA RULLAN, WARLITO RULLAN,
AURORA RULLODA, GLORIA RULLODA, REMEDIOS
RULLODA, LETICIA RUMATAY, FELY RUNAS, RIZALITO
RUNAS, DOMINGA SABADO, JOSE SACDAL, CLARITA
SALAZAR, GLORIA SALTING, PURITA SAMSON, ESTRELLITA
SERRANO, GEMMA SIABABA, SUSANA SIABANA, PERLITA
SOBREMONTE, CARMEN SOBREVILLA, RUBIE SOLOMON,
MONICA SORIANO, ERLINDA SUGUITAN, JULITA SUCNET,
FEDEL TACIO, LETICIA TAGARA, JOSEFINA TALENG,
MARILY TAMONDON, NIEVEZ TAMONDON, GLORI
TANGALIN, LEONARDO TANGALIN, MYRNA TANGALIN,
NOEMA TANGALIN, NORMA TANGALIN, CRISTETA TEANAN,
RUFINA TRANCIA, ALMA TRINIDAD, GLORIA TUGADE,
TERESITA TUMBAGA, ALICIA UBONGEN, ZENAIDA UCOL,
ADELA UGAY, AMALIA UGAY, ESTELLA UGAY, HONORATO
UGAY, JULIETA UGAY, LOURDES UGAY, PURIFICACION
UGAY, ROSEMARIE UGAY, RUFINA UGAY, ANGELITO UMEL,
JOSEFINA VALDEZ, ALFREDO VERCELES, JOSIE
VERCELES, HELEN VILLANUEVA, SALVACION VILLAROSA,
DOMINGO YARANON, FELIMON YARANON, FELIX YARANON,
MONICA YARES, CONSOLACION YARIZ, DEMETRIA YARIZ,
IMELDA YARIZ, MARGARITA ZARATE, ESMERALDA ABAD,
LOURDES ABELLERA, MILAGROS ADUBE, JOSEPHINE
ARIAS, ERLINDA ASPERIN, EMELDA ASUNCION, LILIA
ASUNCION, VIOLETA ASUNCION, ROSA BALAGOT,
ADORACION BALANAG, ALICA J. BALANAG, GLECERIA
BALANGA, CORAZON BAMBICO, RICARDO BAIARIO, ADELA
BAUTISTA, CORAZON BRAVO, DINAH BULATAO, MARILOU
BUNGAY, LORETO BURGOS, EVELYN CABUNIAS, CARLITO
CACAYURAN, ISABEL CAMACHO, LUCRECIA CARREON,
ALFREDO CASEM, HERA CASEM, MELY CASEM, NATIVIDAD
CASIPIT, MARILYN CASTILLO, NENITA CASTANEDA,
CARMELITA CAVINTA, LEONIDA CAVINTA, LEONILA
CAVINTA, MELANIE CHAVEZ, LORETO CORTEZ, HERMANA
DACANAY, MARIETTA DACANAY, MARITES G. DACANAY,
MARIO DALAZA, AIDA DANAO, EVA DANAO, MARGIE DE
GUZMAN, NATIVIDAD DE CASTRO, NATIVIDAD DELA CRUZ,
LORETA DIFUNTORUM, LOLITA DISTOR, ADELINA
DOMONDON, HELEN DULATRE, IMELDA M. DULATRE, JOSE
N. DULATRE, LYDIA A. DULATRE, MERLY DULATRE,
CONCEPCION DULAY, DOMINGA DULAY, ELENA C. DULAY,
ERLINDA DULAY, ORPILINA R. DULAY, PABLO A. DULAY,
RENATO DULAY, NORMA EISMA, EDNA ESTOQUE, TEOFILO
FAJARDO, ADELINA FONTANILLA, TERESITA FORONDA,
MARGARITA FREDELUCES, RUFINA GALESTE, MARISSA
GALI, LUZVIMINDA GAMBOA, CLEOFE GARCIA, ERLINDA
GAPASIN, JULITA GATCHALIAN, MARISSA GATCHALIAN,
ALFONSO HALOG, TERESITA IBASAN, RICARDO JUGO,
ELMA JULOYA, ELENITA LACUATA, EPIFANIA LACUATA,
SEBASTIAN LACUATA, JOSEFINA LARON, PEDRO LEGASPI,
DOLORES LUCENA, FLORDELIZA MABANTA, PERLITA
MACAGBA, CESAR MAGLAYA, ERNA MAGNO, GLORIA
MAGNO, BONA P. MAMARIL, CONCEPCION MAMARIL,
MARCELINA MAMARIL, TERESITA MAMARIL, ESTINILIE
MANGADANG, HERMOGENES MANGADANG, LETICIA
MANGADANG, LYDIA MANGADANG, SHIRLEY MANGADANG,
SONIA MANGADANG, TRINIDAD MANGADANG, VICTORIANO
MANGADANG, CRESTITA D. MANZANO, ERLINDA MAPALO,
FABIAN F. MAPANAO, LYDIA MAPILE, RUMO MASON,
SUSANA MEDRIANO, DOLORES MILAN, ANTONIO G. MUNAR,
MARINA NINIALBA, CORAZON B. NINOBLE, SUSAN
ORIBELLO, JOVENCIO ORLINO, CHARITO ORPILLA,
FERDINAND PADILLA, LETECIA PAGADUAN, BERLINA
PALMONES, ARISTON PANIS, PATRICIO PANIS, PRIMO
PANIS, REMEDIOS B. PANIS, EMELITO PERALTA, GLORIA
RAMIREZ, DOMINGA RAMOS, GERTRUDES RAMOS,
DOROTEO REFUERZO, JR., JUANITA REFUERZO,
FLORENCIO REGACHO, MAGDALENA REBACHO, ADELINA
REYES, DELIA REYES, EUFENIA RIVERA, LEONORA RIVERA,
ROSEMARIE ROSIMO, VICTORIA RUALO, DANILO RULLAN,
AURORA RULLODA, SERAFICA RULLODA, ZENAIDO P.
RULLODA, IMELDA RUNAS, REMEDIOS SANTOS,
DOMINADOR TABABA, ROSENDA TABAO, JOSEFINA
TALENS, REVELINA TORCEDO, RUFINA TUMBANGA, JULITA
 F. UGAY, BRENDA VILLANUEVA, GLORIA VILORIA, FLORIDA
YARIS, MARGARITA ZARATE, FERNANDO SACDAL, ANICETA
MANONGDO and BEATRIZ UGAY, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION, LABOR ARBITER
RICARDO N. OLAIREZ, LA UNION TOBACCO REDRYING
CORPORATION and SEE LIN CHAN, respondents.

Sycip Salazar Hernandez & Gatmaitan for petitioners.

The Solicitor General for public respondent.
Froilan M. Bacungan & Associates for private respondents.

SYNOPSIS

Private respondent La Union Tobacco Redrying Corporation (LUTORCO),

owned by private respondent See Lin Chan, is engaged in the business of
buying, selling, redrying and processing of tobacco leaves and its by-products.
Petitioners have been under the employ of LUTORCO for several years until their
employment with LUTORCO was abruptly interrupted sometime in March 1993
when Compania General de Tabacos de Filipinas (also known as
TABACALERA) took over LUTORCO's tobacco operations. The disgruntled
employees instituted before the NLRC Regional Arbitration Branch No. 1, San
Fernando, La Union a complaint for separation pay against private respondent
LUTORCO on the ground that there was a termination of their employment due
to the closure of LUTORCO as a result of the sale and turnover to
TABACALERA. Private respondent corporation contended that it is exempt from
paying separation pay and denied that it terminated the services of the
petitioners; and that it stopped its operations due to the absence of capital and
operating funds caused by losses incurred from 1990 to 1992 and absence of
operating funds for 1993, coupled with adverse financial conditions and downfall
of prices. The labor arbiter dismissed the complaint and declared that the
petitioners are not entitled to the benefits under Article 283 of the Labor Code
since LUTORCO ceased to operate due to serious business losses and,
furthermore, TABACALERA, the new employer of the petitioner, has assumed
the seniority rights of the petitioners and other employment liabilities of
LUTORCO. On appeal, the National Labor Relations Commission (NLRC)
affirmed the dismissal of the consolidated complaints for separation pay. Public
respondent held that petitioners are not entitled to the protection of Article 283 of
the Labor Code providing for separation pay since there was no closure of the
establishment or termination of services to speak of. It declared that there was no
dismissal but a "non-hiring due mainly to [petitioners) own volition." Moreover,
the benefits under Article 283 of the Labor Code apply only to regular employees,
not seasonal workers like petitioners. Hence, the present petition.
The Supreme Court reversed and set aside the decision of the NLRC. The
Court ruled that the employment of petitioners with respondent LUTORCO was
technically terminated when TABACALERA took over LUTORCO's tobacco re-
drying operations in 1993 and therefore the public respondent NLRC erred in its
total affirmance of the dismissal of the consolidated complaints, for separation
pay, against private respondents LUTORCO and See Lin Chan considering that
petitioners are regular seasonal employees entitled to the benefits of Article 283
of the Labor Code which applies to closures or cessation of an establishment or
undertaking, whether it be a complete or partial cessation or closure of business
operation. The Court also ruled that 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 off-season are not separated from service in said
period, but are merely considered on leave until re-employed.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF

EMPLOYMENT; SALE OF COMPANY TECHNICALLY TERMINATED
PETITIONERS' EMPLOYMENT. — Upon a thorough review, the records speak
of a sale to TABACALERA in 1993 under conditions evidently so concealed that
petitioners were not formally notified of the impending sale of LUTORCO's
tobacco re-drying operations to TABACALERA and its attendant consequences
with respect to their continued employment status under TABACALERA. They
came to know of the fact of that sale only when TABACALERA took over the said
tobacco re-drying operations. Thus, under those circumstances, the employment
of petitioners with respondent LUTORCO was technically terminated when
TABACALERA took over LUTORCO's tobacco re-drying operations in 1993.
Moreover, private respondent LUTORCO's allegation that TABACALERA
assured the seniority rights of petitioners deserves scant consideration inasmuch
as the same is not supported by documentary evidence nor was it confirmed by
TABACALERA. Besides, there is no law requiring that the purchaser of an entire
company should absorb the employees of the selling company. The most that the
purchasing company can do, for reasons of public policy and social justice, is to
give preference to the qualified separated employees of the selling company,
who in its judgment are necessary in the continued operation of the business
establishment. In the instant case, the petitioner employees were clearly required
to file new applications for employment. In reality then, they were hired as new
employees of TABACALERA.
2. ID.; ID.; PETITIONERS' UNTIMELY SEPARATION CANNOT BE
CONSTRUED AS RESIGNATION. — Private respondent LUTORCO's
contention that petitioners themselves severed the employer-employee
relationship by choosing to work with TABACALERA is bereft of merit
considering that its offer to return to work was made more as an afterthought
when private respondent LUTORCO later realized it still had tobacco leaves for
processing and redrying. The fact that petitioners ultimately chose to work with
TABACALERA is not adverse to petitioners' cause. To equate the more stable
work with TABACALERA and the temporary work with LUTORCO is illogical.
Petitioners' untimely separation in LUTORCO was not of their own making and
therefore, not construable as resignation therefrom inasmuch as resignation must
be voluntary and made with the intention of relinquishing the office, accompanied
with an act of relinquishment.
3. ID.; ID.; NATURE OF ONE'S EMPLOYMENT DOES NOT DEPEND
SOLELY ON THE WILL OR WORD OF THE EMPLOYER; EMPLOYEES WHO
ARE PERFORMING SERVICES NECESSARY AND INDISPENSABLE TO THE
COMPANY'S BUSINESS ARE REGULAR EMPLOYEES. — 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 off-season are not separated from service in said period, but are
merely considered on leave until re-employed.  DCcSHE

4. ID.; ID.; RIGHTS OF SEPARATED REGULAR SEASONAL

EMPLOYEES; AMOUNT OF SEPARATION PAY; ATTORNEY'S FEES. — The
public respondent NLRC in the case at bar erred in its total affirmance of the
dismissal of the consolidated complaint, for separation pay, against private
respondents LUTORCO and See Lin Chan considering that petitioners are
regular seasonal employees entitled to the benefits of Article 283 of the Labor
Code which applies to closures or cessation of an establishment or undertaking,
whether it be a complete or partial cessation or closure of business operation. In
the case of Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC this
Court, when faced with the question of whether the separation pay of a seasonal
worker, who works for only a fraction of a year, should be equated with the
separation pay of a regular worker, resolved that question in this wise: 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 case at bar, we hold that the amount of separation pay which
respondent members . . . 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. Thus, in the said case, the employees were
awarded separation pay equivalent to one (1) month, or to one-half (1/2) month
pay for every year they rendered service, whichever is higher, provided they
rendered service for at least six (6) months in a given year. As explained in the
text of the decision in the said case, "month pay" shall be understood as
"average monthly pay during the last season they worked." An award of ten
percent (10%) of the total amount due petitioners as attorney's fees is legally and
morally justifiable under Art. 111 of the Labor Code, Sec. 8, Rule VIII, Book III of
its Implementing Rules, and par. 7, Art. 2208 of the Civil Code.

DECISION
DE LEON, JR., J  :p

Before us is a petition for certiorari seeking to annul two Resolutions of the

National Labor Relations Commission (NLRC), Third Division, dated July 6,
1994 1 and September 23, 1994, 2 in its affirmance of the Decision 3 of Labor
Arbiter Ricardo N. Olairez dated December 29, 1993 dismissing petitioners'
consolidated complaint for separation pay for lack of merit. cdll

The facts are as follows:

Private respondent La Union Tobacco Redrying Corporation (LUTORCO),
which is owned by private respondent See Lin Chan, is engaged in the business
of buying, selling, redrying and processing of tobacco leaves and its by-products.
Tobacco season starts sometime in October of every year when tobacco farmers
germinate their seeds in plots until they are ready for replanting in November.
The harvest season starts in mid-February. Then, the farmers sell the harvested
tobacco leaves to redrying plants or do the redrying themselves. The redrying
plant of LUTORCO receives tobacco for redrying at the end of February and
starts redrying in March until August or September.
Petitioners have been under the employ of LUTORCO for several years
until their employment with LUTORCO was abruptly interrupted sometime in
March 1993 when Compania General de Tabaccos de Filipinas (also known as
TABACALERA) took over LUTORCO's tobacco operations. New signboards
were posted indicating a change of ownership and petitioners were then asked
by LUTORCO to file their respective applications for employment with
TABACALERA. Petitioners were caught unaware of the sudden change of
ownership and its effect on the status of their employment, though it was alleged
that TABACALERA would assume and respect the seniority rights of the
petitioners.
On March 17, 1993, the disgruntled employees instituted before the NLRC
Regional Arbitration Branch No. 1, San Fernando, La Union a complaint 4 for
separation pay against private respondent LUTORCO on the ground that there
was a termination of their employment due to the closure of LUTORCO as a
result of the sale and turnover to TABACALERA. Other equally affected
employees filed two additional complaints, 5 also for separation pay, which were
consolidated with the first complaint.
Private respondent corporation raised as its defense that it is exempt from
paying separation pay and denied that it terminated the services of the
petitioners; and that it stopped its operations due to the absence of capital and
operating funds caused by losses incurred from 1990 to 1992 and absence of
operating funds for 1993, coupled with adverse financial conditions and downfall
of prices. 6 It alleged further that LUTORCO entered into an agreement with
TABACALERA to take over LUTORCO's tobacco operations for the year 1993 in
the hope of recovering from its serious business losses in the succeeding
tobacco seasons and to create a continuing source of income for the
petitioners. 7 Lastly, it manifested that LUTORCO, in good faith and with sincerity,
is willing to grant reasonable and adjusted amounts to the petitioners, as financial
assistance, if and when LUTORCO could recover from its financial crisis. 8
On December 29, 1993, Labor Arbiter Ricardo N. Olairez rendered his
decision dismissing the complaint for lack of merit. In upholding private
respondent LUTORCO's position, the Labor Arbiter declared that the petitioners
are not entitled to the benefits under Article 283 9 of the Labor Code since
LUTORCO ceased to operate due to serious business losses and, furthermore,
TABACALERA, the new employer of the petitioner has assumed the seniority
rights of the petitioners and other employment liabilities of the LUTORCO. 10
Petitioners appealed 11 then the decision of the Labor Arbiter to the public
respondent NLRC where it was assigned to the Third Division.
In its Opposition to Appeal 12 dated February 5, 1994 private respondent
LUTORCO presented new allegations and a different stand for denying
separation pay. It alleged that LUTORCO never ceased to operate but continues
to operate even after TABACALERA took over the operations of its redrying
plaint in Aringay, La Union. Petitioners were not terminated from employment but
petitioners instead refused to work with TABACALERA, despite the notice to
petitioners to return to work in view of LUTORCO's need for workers at its Agoo
plant which had approximately 300,000 kilos of Virginia tobacco for processing
and redrying. Furthermore, petitioners are not entitled to separation pay because
petitioners are seasonal workers.
Adopting these arguments of private respondent, the NLRC, in a
Resolution 13 dated July 6, 1994, affirmed the dismissal of the consolidated
complaints for separation pay. Public respondent held that petitioners are not
entitled to the protection of Article 283 of the Labor Code providing for separation
pay since there was no closure of establishment or termination of services to
speak of. It declared that there was no dismissal but a "non-hiring due mainly to
[petitioners] own volition." 14 Moreover, the benefits of Article 283 of the Labor
Code apply only to regular employees, not seasonal workers like
petitioners. 15 Inasmuch as public respondent in its Resolution 16 dated
September 23, 1994 denied petitioners' motion for reconsideration, petitioners
now assail the correctness of the NLRC's resolution via the instant petition.
Petitioners anchor their petition on the following grounds, to wit:
I. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO EXCESS OR LACK OF
JURISDICTION IN RULING THAT THERE WAS NO DISMISSAL
OR TERMINATION OF SERVICES.
II. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO EXCESS OR LACK OF
JURISDICTION IN RULING THAT PETITIONERS WERE NOT
REGULAR EMPLOYEES.
III. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO EXCESS OR LACK OF
JURISDICTION IN NOT AWARDING SEPARATION PAY TO
THE PETITIONERS.
Petitioners vigorously maintain that they are regular workers of respondent
LUTORCO since they worked continuously for many years with LUTORCO,
some of them even for over 20 years, and that they performed functions
necessary and desirable in the usual business of LUTORCO. 17 According to
them, the fact that some of them work only during the tobacco season does not
affect their status as regular workers since they have been repeatedly called
back to work for every season, year after year. 18 Thus, petitioners take
exception to the factual findings and conclusions of the NLRC, stressing that the
conclusions of the NLRC were based solely on the new theory advanced by
private respondent LUTORCO only on appeal, that is, that it was only
LUTORCO's tobacco re-drying operation that was sold, and hence, diametrically
opposed to its theory before the Labor Arbiter, i.e., that it is the entire company
(LUTORCO) itself that was sold.
Private respondent LUTORCO, on the other hand, insists that petitioners'
employment was not terminated; that it never ceased to operate, and that it was
petitioners themselves who severed their employer-employee relationship when
they chose employment with TABACALERA because petitioners found more
stability working with TABACALERA than with LUTORCO. 19 It likewise insists
that petitioners are seasonal workers since almost all of petitioners never
continuously worked in LUTORCO for any given year 20 and they were required
to reapply every year to determine who among them shall be given work for the
season. To support its argument that petitioners are seasonal workers, private
respondent LUTORCO cites the case of Mercado, Sr. v. NLRC 21 wherein this
Court held that "the employment of [seasonal workers] legally ends upon the
completion of the . . . season."
Clearly, the crux of the dispute boils down to two issues, namely, (a)
whether petitioners' employment with LUTORCO was terminated, and (b)
whether petitioners are regular or seasonal workers, as defined by law. Both
issues are clearly factual in nature as they involved appreciation of evidence
presented before the NLRC whose finding of facts and conclusions thereon are
entitled to respect and finality in the absence of proof that they were arrived at
arbitrarily or capriciously. 22 In the instant case, however, cogent reasons exist to
apply the exception, to wit:
First, upon a thorough review, the records speak of a sale to
TABACALERA in 1993 under conditions evidently so concealed that petitioners
were not formally notified of the impending sale of LUTORCO's tobacco re-drying
operations to TABACALERA and its attendant consequences with respect to
their continued employment status under TABACALERA. They came to know of
the fact of that sale only when TABACALERA took over the said tobacco re-
drying operations. Thus, under those circumstances, the employment of
petitioners with respondent LUTORCO was technically terminated when
TABACALERA took over LUTORCO's tobacco re-drying operations in 1993. 23
Moreover, private respondent LUTORCO's allegation that TABACALERA
assured the seniority rights of petitioners deserves scant consideration inasmuch
as the same is not supported by documentary evidence nor was it confirmed by
TABACALERA. Besides, there is no law requiring that the purchaser of an entire
company should absorb the employees of the selling company. The most that the
purchasing company can do, for reasons of public policy and social justice, is to
give preference to the qualified separated employees of the selling company,
who in its judgment are necessary in the continued operation of the business
establishment. In the instant case, the petitioner employees were clearly required
to file new applications for employment. In reality then, they were hired as new
employees of TABACALERA.
Second, private respondent LUTORCO's contention that petitioners
themselves severed the employer-employee relationship by choosing to work
with TABACALERA is bereft of merit considering that its offer to return to work
was made more as an afterthought when private respondent LUTORCO later
realized it still had tobacco leaves for processing and redrying. The fact that
petitioners ultimately chose to work with TABACALERA is not adverse to
petitioners' cause. To equate the more stable work with TABACALERA and the
temporary work with LUTORCO is illogical. Petitioners' untimely separation in
LUTORCO was not of their own making and therefore, not construable as
resignation therefrom inasmuch as resignation must be voluntary and made with
the intention of relinquishing the office, accompanied with an act of
relinquishment. 24
Third, the test of whether or not an employee is a regular employee has
been laid down in De Leon v. NLRC, 25 in which this Court held:  DCAHcT

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. 26
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. 27 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 28 this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily
laid off during off-season 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.
All the foregoing considered, the public respondent NLRC in the case at
bar erred in its total affirmance of the dismissal of the consolidated complaints,
for separation pay, against private respondents LUTORCO and See Lin Chan
considering that petitioners are regular seasonal employees entitled to the
benefits of Article 283 of the Labor Code which applies to closures or cessation
of an establishment or undertaking, whether it be a complete or partial cessation
or closure of business operation. 29
In the case of Philippine Tobacco Flue-Curing & Redrying Corporation v.
NLRC 30 this Court, when faced with the question of whether the separation pay
of a seasonal worker, who works for only a fraction of a year, should be equated
with the separation pay of a regular worker, resolved that question in this wise:
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 31 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
case at bar, we hold that the amount of separation pay which respondent
members . . . 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.
Thus, in the said case, the employees were awarded separation pay
equivalent to one (1) month, or to one half (1/2) month pay for every year they
rendered service, whichever is higher, provided they rendered service for at
least six (6) months in a given year. As explained in the text of the decision in
the said case, "month pay" shall be understood as "average monthly pay
during the last season they worked." 32 An award of ten percent (10%) of the
total amount due petitioners as attorney's fees is legally and morally justifiable
under Art. 111 of the Labor Code, 33 Sec. 8, Rule VIII, Book III of its
Implementing Rules, 34 and par. 7, Art. 2208 35 of the Civil Code. 36
WHEREFORE, the petition is hereby GRANTED, and the assailed
Resolutions dated July 6, 1994 and September 23, 1994 of public respondent
NLRC are REVERSED and SET ASIDE. Private respondent La Union Tobacco
Redrying Corporation is ORDERED: (a) to pay petitioners separation pay
equivalent to one (1) month, or one-half (1/2) month pay for each year that they
rendered service, whichever is higher, provided that they rendered service for at
least six (6) months in a given year, and; (b) to pay ten percent (10%) of the total
amount due to petitioners, as and for attorney's fees. Consequently, public
respondent NLRC is ORDERED to COMPUTE the total amount of separation
pay which each petitioner who has rendered service to private respondent
LUTORCO for at least six (6) months in a given year is entitled to receive in
accordance with this decision, and to submit its compliance thereon within forty-
five (45) days from notice of this decision.
SO ORDERED.
Bellosillo, Mendoza, Quisumbing, and Buena, JJ., concur.
 
Footnotes
1.Penned by Commissioner Ireneo B. Bernardo and concurred in by Presiding
Commissioner Lourdes C. Javier and Commissioner Joaquin A. Tanodra in
NLRC CN. RAB-I-03-1055-93, RAB-I-03-1056-93 and RAB-I-03-1100-93 CA
No. L-001300, Rollo, pp. 37-55.
2.Rollo, pp. 27-36.
3.Rollo, pp. 56-64.
4.Docketed as NLRC Case No. RAB-I-03-1055-93, Rollo, pp. 69-75.
5.Filed on March 25, 1993 and June 15, 1993, docketed as NLRC Case Nos. RAB-I-
03-1056-93 and RAB-I-03-1100-93, respectively, Rollo, pp. 65-68.
6.Rollo, pp. 85-86.
7.Ibid.
8.Rollo, p. 87.
9.Article 283. Closure of establishment and reduction of personnel.
 . . . in cases of closure and cessation of operations of establishment
or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered as one (1) whole year.
10.Rollo, pp. 61-64.
11.Rollo, pp. 90-102.
12.Rollo, pp. 103-109.
13.See Note No. 1, supra.
14.Rollo, p. 50.
15.Rollo, pp. 51-52.
16.See Note No. 2, supra.
17.Rollo, p. 304.
18.Rollo, p. 305.
19.Rollo, pp. 239-240.
20.Rollo, p. 236.
21.201 SCRA 332, 343 [1991].
22.PASVIL/Pascual Liner, Inc., Workers Union-NAFLU v. NLRC, 311 SCRA 444, 457
[1999].
23.See San Felipe Neri School of Mandaluyong, Inc. v. NLRC, 201 SCRA 478 [1991]
citing Central Azucarera del Danao v. Court of Appeals, 137 SCRA 295 [1985].
24.Pascua v. NLRC (Third Division), 287 SCRA 554, 567 [1998]; see Tacloban
Sagkahan Rice and Corn Mills Co. v. NLRC, 183 SCRA 425 [1990].
25.De Leon v. NLRC, 176 SCRA 615, 621 [1989].
26.Bernardo v. NLRC, 310 SCRA 186, 201 [1999].
27.Maraguinot, Jr. v. NLRC (Second Division), 284 SCRA 539, 556 [1998].
28.Bacolod-Murcia Milling Co., Inc. v. NLRC, 204 SCRA 155, 158 [1991]; Visayan
Stevedore Transportation Company v. CIR, 19 SCRA 426 [1967]; Industrial-
Commercial Agricultural Workers' Organization (ICAWO) v. CIR, 16 SCRA 562,
565-566 [1966], Manila Hotel Company v. Court of Industrial Relations, 9 SCRA
184, 186 [1963].
29.Coca-Cola Bottlers (Phils.), Inc. v. NLRC, 194 SCRA 592, 599 [1991].
30.300 SCRA 37, 63-65 [1998].
 31.Book Six of the Labor Code contains the provisions pertaining to termination of
employment and computation of separation pay.
32.See Note No. 30.
33.(a) In cases of unlawful withholding of wages the culpable party may be assessed
attorney's fees equivalent to ten percent of the amount of wages recovered.
 (b) It shall be unlawful for any person to demand or accept, in any judicial or
administrative proceedings for the recovery of the wages, attorney's fees, which
exceed ten percent of the amount of wages recovered.
34.Attorney's fees in any judicial or administrative proceedings for the recovery of
wages shall not exceed 10% of the amount awarded. The fees may be
deducted from the total amount due the winning party.
35.In absence of stipulation, attorney's fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
 . . . (7) In actions for the recovery of wages of household helpers, laborers and skilled
workers . . . .
36.Marsaman Manning Agency Inc. v. NLRC, 313 SCRA 88, 99-100 [1999]
citing Philippine National Construction Corporation v. NLRC, 277 SCRA 91, 105
[1997]; Sebuguero v. NLRC, 248 SCRA 532, 548 [1995].
 (Abasolo v. National Labor Relations Commission, G.R. No. 118475,
|||

[November 29, 2000], 400 PHIL 86-106)

SECOND DIVISION

[G.R. No. 151827. April 29, 2005.]

JOSEFINA BENARES, petitioner, vs. JAIME PANCHO,
RODOLFO PANCHO, JR., JOSELITO MEDALLA, PAQUITO
MAGALLANES, ALICIA MAGALLANES, EVELYN
MAGALLANES, VIOLETA VILLACAMPA, MARITESS PANCHO,
ROGELIO PANCHO AND ARNOLFO PANCHO, respondents.

DECISION

TINGA, J  : p

Assailed in this Petition for Review on Certiorari 1 is the Decision 2 of the

Court of Appeals which affirmed the National Labor Relations Commission's
(NLRC) decision 3 holding that respondents were illegally dismissed and ordering
petitioner to pay respondents separation pay, backwages, 13th month pay, Cost
of Living Allowance (COLA), emergency relief allowance (ERA), salary
differentials and attorney's fees. The NLRC reversed the Labor Arbiter's finding
that respondents failed to lay down the facts and circumstances surrounding their
dismissal and to prove their entitlement to monetary awards. 4
The antecedents, as narrated by the NLRC, follow.
 Complainants alleged to have started working as sugar farm
workers on various dates, to wit:
1. Jaime Pancho November 15, 1964
2. Rodolfo Pancho, Jr. February 1, 1975
3. Joselito Medalla November 15, 1964
4. Paquito Magallanes March 10, 1973
5. Felomino Magallanes November 15, 1964
6. Alicia Magallanes January 15, 1964
7. Evelyn Magallanes January 1, 1974
8. Violeta Villacampa December 1, 1979
9. Maritess Pancho December 15, 1985
10. Rogelio Pancho December 1, 1979
11. Arnolfo Pancho February 1, 1975
Respondent Hda. Maasin II is a sugar cane plantation located in
Murcia, Negros Occidental with an area of 12-24 has. planted, owned
and managed by Josefina Benares, individual co-respondent.
On July 24, 1991, complainants thru counsel wrote the Regional
Director of the Department of Labor and Employment, Bacolod City for
intercession particularly in the matter of wages and other benefits
mandated by law.
On September 24, 1991, a routine inspection was conducted by
personnel of the Bacolod District Office of the Department of Labor and
Employment. Accordingly, a report and recommendation was made,
hence, the endorsement by the Regional Director of the instant case to
the Regional Arbitration Branch, NLRC, Bacolod City for proper hearing
and disposition. 
EcaDCI

On October 15, 1991, complainants alleged to have been

terminated without being paid termination benefits by respondent in
retaliation to what they have done in reporting to the Department of
Labor and Employment their working conditions viz-a-viz (sic) wages
and other mandatory benefits.
On July 14, 1992, notification and summons were served to the
parties wherein complainants were directed to file a formal complaint.
On July 28, 1992, a formal complaint was filed for illegal dismissal
with money claims.
From the records, summons and notices of hearing were served
to the parties and apparently no amicable settlement was arrived, hence,
the parties were directed to file their respective position papers.
On January 22, 1993, complainant submitted their position paper,
while respondent filed its position paper on June 21, 1993.
On March 17, 1994, complainants filed their reply position paper
and affidavit. Correspondingly, a rejoinder was filed by respondent on
May 16, 1994.
On August 17, 1994, from the Minutes of the scheduled hearing,
respondent failed to appear, and that the Office will evaluate the records
of the case whether to conduct a formal trial on the merits or not, and
that the corresponding order will be issued.
On January 16, 1996, the Labor Arbiter issued an order to the
effect that the case is now deemed submitted for resolution.
 On April 30, 1998, the Labor Arbiter a quo issued the assailed
decision dismissing the complaint for lack of merit.
On June 26, 1998, complainants not satisfied with the aforecited
ruling interposed the instant appeal anchored on the ground that:
THE HONORABLE LABOR ARBITER GRAVELY ABUSED ITS
DISCRETION AND SERIOUSLY ERRED IN HOLDING THAT THE
COMPLAINANTS FAILED TO DISCUSS THE FACTS AND
CIRCUMSTANCES SURROUNDING THEIR DISMISSAL, HENCE,
THERE IS NO DISMISSAL TO SPEAK OF AND THAT
COMPLAINANTS FAILED TO ALLEGE AND PROVE THAT THEIR
CLAIMS ARE VALID, HENCE THE DISMISSAL OF THEIR COMPLAINT
WOULD CAUSE GRAVE AND IRREPARABLE DAMAGE TO HEREIN
COMPLAINANTS. 5
The NLRC held that respondents attained the status of regular seasonal
workers of Hda. Maasin II having worked therein from 1964-1985. It found that
petitioner failed to discharge the burden of proving that the termination of
respondents was for a just or authorized cause. Hence, respondents were
illegally dismissed and should be awarded their money claims.
Petitioner's motion for reconsideration 6 dated May 12, 1999 was denied in
the resolution 7 dated October 29, 1999.
The Court of Appeals affirmed the NLRC's ruling, with the modification that
the backwages and other monetary benefits shall be computed from the time
compensation was withheld in accordance with Article 279 of the Labor Code,as
amended by Republic Act No. 6715.  TaCDIc

In its Resolution 8 dated November 28, 2001, the appellate court denied

petitioner's motion for reconsideration for lack of merit.
Petitioner is now before this Court averring that the Court of Appeals erred
in affirming the decision of the NLRC. While petitioner concedes that the factual
findings of the NLRC are generally binding on the appellate court, petitioner
insists that the findings of the NLRC are vague and contradictory, thereby
necessitating review.
According to petitioner, the fact that she was able to present sufficient
proof to rebut the claim of illegal dismissal should be considered in light of the
NLRC's admission that there are gray areas in the case which require
clarification. Petitioner avers that the NLRC should have at least remanded the
case to the labor arbiter to thresh out these gray areas. She further claims that
the NLRC was overly zealous in awarding COLA and ERA despite the fact that
respondents did not even pray for these awards in their complaint. She also
questions the NLRC's general statement to the effect that the payroll she
submitted is not convincing asserting that she submitted 235 sets of payroll, not
just one, and that the NLRC did not even bother to explain why it found the
payroll unconvincing.
Respondents filed a Comment 9 dated May 10, 2002 alleging that
petitioner failed to submit certified true copies of the assailed decisions and
resolutions, and that the petition lacks proof of service and raises questions of
fact.
In her Reply to Comment 10 dated September 17, 2002, petitioner points
out that the Rules of Court do not require that all copies of the petition contain
certified true copies of the questioned decisions and resolutions. Further, all
copies of the petition filed with the Court contain an affidavit of service.
Respondents' copy does not have an affidavit of service because the sworn
declaration can not be executed before service of the petition is actually made.
Petitioner also maintains that the rule on review of findings of fact by the
Supreme Court admits of certain exceptions such as when the conclusions
arrived at are grounded entirely on speculation, surmises and conjectures as in
this case.
The petition was given due course and the parties were required to submit
their respective memoranda in the Resolution 11 dated March 3, 2003. Petitioner
filed a Manifestation and Compliance 12 dated April 22, 2003 adopting the
allegations in her Petition for Review on Certiorari and Reply to Comment as her
memorandum. For their part, respondents filed a Memoranda For Private
Respondents 13 dated May 7, 2003 alleging that the Court of Appeals correctly
relied upon the factual findings of the NLRC after having found the same to be
supported by substantial evidence. They insist that they are regular seasonal
employees of the sugar plantation. As such, petitioner has the burden of proving
that their dismissal was for a just or authorized cause.
As regards the contention that the NLRC erroneously awarded COLA and
ERA, respondents cite Osias Academy v. DOLE, 14 which provides that the
NLRC can extend monetary awards even if these are not prayed for if the
monetary benefits are statutory grants intended to alleviate the laborer's plight
like the COLA and ERA.
The main question raised by the present petition is whether respondents
are regular employees of Hacienda Maasin and thus entitled to their monetary
claims. Related to this is the issue of whether respondents were illegally
terminated.
This case presents a good opportunity to reiterate the Court's rulings on
the subject of seasonal employment. The Labor Code defines regular and casual
employment, viz:
Art. 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 service to be performed is seasonal in
nature and the employment is for the duration of the season. aHESCT

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 activity exists.
The law provides for three kinds of employees: (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. 15
 
In Mercado v. NLRC,  16 the Court ruled 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, because the proviso in the second
paragraph of Article 280 demarcates as "casual" employees, all other employees
who do not fall under the definition of the preceding paragraph. It 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.
The factual circumstances obtaining in the Mercado case, however, are
peculiar. In that case, the workers were engaged to do a particular phase of
agricultural work necessary for rice and/or sugarcane production, after which
they would be free to render services to other farm workers who need their
services.
In contrast, in the case of Hacienda Fatima v. National Federation of
Sugarcane Workers-Food and General Trade, 17 respondents performed the
same tasks for petitioners every season for several years. Thus, they were
considered the latter's regular employees for their respective tasks. The fact that
they do not work continuously for one whole year but only for the duration of the
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 off-season are
not separated from service in that period, but merely considered on leave until re-
employed. 18
Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule
that the primary standard for determining regular employment is the reasonable
connection between the particular activity performed by the employee vis-à-
vis the usual trade or business of the employer. This 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. 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. 19
In this case, petitioner argues that respondents were not her regular
employees as they were merely "pakiao" workers who did not work continuously
in the sugar plantation. They performed such tasks as weeding, cutting and
loading canes, planting cane points, fertilizing, cleaning the drainage, etc. These
functions allegedly do not require respondents' daily presence in the sugarcane
field as it is not everyday that one weeds, cuts canes or applies fertilizer. In
support of her allegations, petitioner submitted "cultivo" and milling payrolls. 
aSIHcT

The probative value of petitioner's evidence, however, has been passed

upon by the labor arbiter, the NLRC and the Court of Appeals. Although the labor
arbiter dismissed respondents' complaint because their "position paper is
completely devoid of any discussion about their alleged dismissal, much less of
the probative facts thereof," 20 the ground for the dismissal of the complaint
implies a finding that respondents are regular employees.
The NLRC was more unequivocal when it pronounced that respondents
have acquired the status of regular seasonal employees having worked for more
than one year, whether continuous or broken in petitioner's hacienda.
According to petitioner, however, the NLRC's conclusion is highly suspect
considering its own admission that there are "gray areas which requires (sic)
clarification." She alleges that despite these gray areas, the NLRC "chose not to
remand the case to the Labor Arbiter. . . . as this would unduly prolong the agony
of the complainants in particular." 21
Petitioner perhaps wittingly omitted mention that the NLRC "opted to
appreciate the merits of the instant case based on available
documents/pleadings." 22 That the NLRC chose not to remand the case to the
labor arbiter for clarificatory proceedings and instead decided the case on the
basis of the evidence then available to it is a judgment call this Court shall not
interfere with in the absence of any showing that the NLRC abused its discretion
in so doing.
The Court of Appeals, in fact, found no such grave abuse of discretion on
the part of the NLRC. Accordingly, it dismissed the petition for certiorari and
affirmed with modification the findings of the NLRC. It is well to note at this point
that in quasi-judicial proceedings, the quantum of evidence required to support
the findings of the NLRC is only substantial evidence or that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion. 23
The issue, therefore, of whether respondents were regular employees of
petitioner has been adequately dealt with. The labor arbiter, the NLRC and the
Court of Appeals have similarly held that respondents were regular employees of
petitioner. Since it is a settled rule that the factual findings of quasi-judicial
agencies which have acquired expertise in the matters entrusted to their
jurisdiction are accorded by this Court not only respect but even finality, 24 we
shall no longer disturb this finding.
Petitioner next underscores the NLRC decision's mention of the "payroll"
she presented despite the fact that she allegedly presented 235 sets of payroll,
not just one payroll. This circumstance does not in itself evince any grave abuse
of discretion on the part of the NLRC as it could well have been just an
innocuous typographical error.
Verily, the NLRC's decision, affirmed as it was by the Court of Appeals,
appears to have been arrived at after due consideration of the evidence
presented by both parties.
We also find no reason to disturb the finding that respondents were
illegally terminated. When there is no showing of clear, valid and legal cause for
the termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for
a just or authorized cause. 25 In this case, as found both by the NLRC and the
Court of Appeals, petitioner failed to prove any such cause for the dismissal of
respondents.  dctai
 WHEREFORE, the instant petition is DENIED. The
assailed Decision and Resolution of the Court of Appeals respectively dated
June 29, 2001 and November 28, 2001 are hereby AFFIRMED. Costs against
petitioner.
SO ORDERED.
Puno, Austria-Martinez, Callejo Sr. and Chico-Nazario, JJ., concur.
 
Footnotes
1.Rollo, pp. 5-18. Dated January 14, 2002.
2.Id. at 23-29. Penned by Associate Justice Conchita Carpio Morales (now Associate
Justice of this Court) and concurred in by Associate Justices Candido V. Rivera
and Rebecca De Guia-Salvador.
3.Records, pp. 243-252.
4.Id. at 203-206.
5.Id. at 243-246.
6.Id. at 253-258.
7.Id. at 272-273.
8.Supra note 1 at 32-33.
9.Id. at 84-85.
10.Id. at 89-92.
11.Id. at 95.
12.Id. at 96-97.
13.Id. at 99-111.
14.192 SCRA 612.
15.Perpetual Help Credit Cooperative, Inc. v. Faburada, G.R. No. 121948, October 8,
2001, 366 SCRA 693, 699-700.
16.G.R. No. 79869, September 5, 1991, 201 SCRA 332.
17.G.R. No. 149440, January 28, 2003, 396 SCRA 518.
18.Ibid, citing Abasolo v. NLRC, 346 SCRA 293, November 29, 2000.
19.Ibid.
20.Supra note 3 at 205.
21.Supra note 3 at 247.
22.Ibid.
23.Sec. 5, Rule 133, Rules of Court.
24.Falguera v. Linsangan, G.R. No. 118448, December 14, 1995, 251 SCRA 364.
25.Supra note 17.
|||  (Benares v. Pancho, G.R. No. 151827, [April 29, 2005], 497 PHIL 180-193)
 THIRD DIVISION

[G.R. No. 149440. January 28, 2003.]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO

VILLEGAS and CRISTINE SEGURA, petitioners, vs. NATIONAL
FEDERATION OF SUGARCANE WORKERS-FOOD AND
GENERAL TRADE, respondents.

Teodoro V. Cortes for petitioners.

Yap Law Offices for respondent.

SYNOPSIS

Respondents worked as sugarcane workers for petitioners and had

organized themselves into a union. When the union was certified as the collective
bargaining representative in the certification elections, petitioners refused to sit
down with the union for the purpose of entering into a collective bargaining
agreement. Moreover, the petitioners did not any more give work assignments to
respondents. Respondents staged a strike for petitioners' failure to comply with
their commitment and filed the present complaint. The National Labor Relations
Commission (NLRC) set aside the decision of the Labor Arbiter and declared
respondents to have been illegally dismissed. The Court of Appeals (CA) upheld
the decision of the NLRC, ruling that while the work of respondents was seasonal
in nature, they were considered to be merely on leave during the off-season and
were, therefore, still employed by petitioners. Moreover, the workers enjoyed
security of tenure. Any infringement upon this right is deemed tantamount to
illegal dismissal. The CA likewise concurred with the NLRC'S finding that
petitioners were guilty of unfair labor practice. Hence, this petition.
The Supreme Court ruled that the CA did not err when it held that
respondents were 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 also been employed only
for the duration of one season. The evidence proved the existence of the first, but
not of the second, condition. The fact that respondents — with the exception of
some — 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. 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.
The Court further ruled that where there is no showing of clear, valid and
legal cause for the termination of employment, the law considers the matter a
case of illegal dismissal and the burden is on the employer to prove that the
termination was for a valid and authorized cause. In the case at bar, petitioners
failed to prove any such cause for the dismissal of respondents who are regular
employees. Consequently, the finding of unfair labor practice done in bad faith
carries with it the sanction of moral and exemplary damages.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; PETITIONS FOR

REVIEW ON CERTIORARI; ONLY ERRORS OF LAW ARE GENERALLY
REVIEWED THEREIN. — [O]nly errors of law are generally reviewed by this
Court in petitions for review on certiorari of CA decisions. Questions of fact are
not entertained. The Court is not a trier of facts and, in labor cases, this doctrine
applies with greater force. Factual questions are for labor tribunals to resolve. In
the present case, these have already been threshed out by the NLRC. Its
findings were affirmed by the appellate court.
2. ID.; EVIDENCE; CREDIBILITY; FACTUAL FINDINGS OF LABOR
OFFICIALS WHO ARE DEEMED TO HAVE ACQUIRED EXPERTISE IN
MATTERS WITHIN THEIR RESPECTIVE JURISDICTIONS, GENERALLY
ACCORDED GREAT WEIGHT ON APPEAL. — [F]actual findings of labor
officials, who are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality.
Their findings are binding on the Supreme Court. Verily, their conclusions are
accorded great weight upon appeal, especially when supported by substantial
evidence. Consequently, the Court is not duty-bound to delve into the accuracy
of their factual findings; in the absence of a clear showing that these were
arbitrary and bereft of any rational basis."
3. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; WORK OR
SERVICES THAT ARE SEASONAL IN NATURE; CONDITIONS; NOT
PRESENT IN CASE AT BAR. — 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.  DCScaT

4. CIVIL LAW; DAMAGES; MORAL AND EXEMPLARY DAMAGES;

AWARDED IN CASE OF A FINDING OF UNFAIR LABOR PRACTICE. — The
finding of unfair labor practice done in bad faith carries with it the sanction of
moral and exemplary damages.
5. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; ILLEGAL
DISMISSAL; COMMITTED WHERE THERE IS NO SHOWING OF CLEAR,
VALID AND LEGAL CAUSE FOR THE TERMINATION OF EMPLOYMENT;
CASE AT BAR. — The sudden changes in work assignments reeked of bad faith.
These changes were implemented immediately after respondents had organized
themselves into a union and started demanding collective bargaining. Those who
were union members were effectively deprived of their jobs. Petitioners' move
actually amounted to unjustified dismissal of respondents, in violation of the
Labor Code. "Where there is no showing of clear, valid and legal cause for the
termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for
a valid and authorized cause."

DECISION

PANGANIBAN, J  : p

Although the employers have shown that respondents performed work that
was seasonal in nature, they failed to prove that the latter worked only for the
duration of one particular season. In fact, petitioners do not deny that these
workers have served them for several years already. Hence, they are regular —
not seasonal — employees.  cDIHES

The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of
Court, seeking to set aside the February 20, 2001 Decision of the Court of
Appeals 1 (CA) in CA-GR SP No. 51033. The dispositive part of the Decision
reads:
"WHEREFORE, premises considered, the instant special civil
action for certiorari is hereby DENIED." 2
On the other hand, the National Labor Relations Commission (NLRC)
Decision, 3 upheld by the CA, disposed in this wise:
"WHEREFORE, premises considered, the decision of the Labor
Arbiter is hereby SET ASIDE and VACATED and a new one entered
declaring complainants to have been illegally dismissed. Respondents
are hereby ORDERED to reinstate complainants except Luisa Rombo,
Ramona Rombo, Bobong Abriga and Boboy Silva to their previous
position and to pay full backwages from September 1991 until reinstated.
Respondents being guilty of unfair labor practice are further ordered to
pay complainant union the sum of P10,000.00 as moral damages and
P5,000.00 as exemplary damages." 4
The Facts
The facts are summarized in the NLRC Decision as follows:
"Contrary to the findings of the Labor Arbiter that complainants
[herein respondents] refused to work and/or were choosy in the kind of
jobs they wanted to perform, the records is replete with complainants'
persistence and dogged determination in going back to work.
"Indeed, it would appear that respondents did not look with favor
workers' having organized themselves into a union. Thus, when
complainant union was certified as the collective bargaining
representative in the certification elections, respondents under the
pretext that the result was on appeal, refused to sit down with the union
for the purpose of entering into a collective bargaining agreement.
Moreover, the workers including complainants herein 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 which stipulated among others that:
 'a) The parties will initially meet for CBA negotiations on
the 11th day of January 1991 and will endeavor to conclude the
same within thirty (30) days.
'b) The management will give priority to the women
workers who are members of the union in case work relative . . .
or amount[ing] to gahit and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his normal work
load which is six (6) days in a week.
'd) The management will provide fifteen (15) wagons for
the workers and that existing workforce prior to the actual strike
will be given priority. However, in case the said workforce would
not be enough, the management can hire additional workers to
supplement them.
'e) The management will not anymore allow the scabs,
numbering about eighteen (18) workers[,] to work in the hacienda;
and
'f) The union will immediately lift the picket upon signing of
this agreement.'
"However, alleging that complainants failed to load the fifteen
wagons, respondents reneged on its commitment to sit down and
bargain collectively. Instead, respondent employed all means including
the use of private armed guards to prevent the organizers from entering
the premises.
"Moreover, starting September 1991, respondents did not any
more give work assignments to the complainants forcing the union to
stage a strike on January 2, 1992. But due to the conciliation efforts by
the DOLE, another Memorandum of Agreement was signed by the
complainants and respondents which provides:
'Whereas the union staged a strike against management
on January 2, 1992 grounded on the dismissal of the union
officials and members;
'Whereas parties to the present dispute agree to settle the
case amicably once and for all;
'Now therefore, in the interest of both labor and
management, parties herein agree as follows:
'1. That the list of the names of affected union members
hereto attached and made part of this agreement shall be referred
to the Hacienda payroll of 1990 and determine whether or not this
concerned Union members are hacienda workers;
'2. That in addition to the payroll of 1990 as reference,
herein parties will use as guide the subjects of a Memorandum of
Agreement entered into by and between the parties last January
4, 1990;
'3. That herein parties can use other employment
references in support of their respective claims whether or not any
or all of the listed 36 union members are employees
or hacienda workers or not as the case may be;
'4. That in case conflict or disagreement arises in the
determination of the status of the particular hacienda workers
 subject of this agreement herein parties further agree to submit
the same to voluntary arbitration;
'5. To effect the above, a Committee to be chaired by Rose
Mengaling is hereby created to be composed of three
representatives each and is given five working days starting Jan.
23, 1992 to resolve the status of the subject 36 hacienda workers.
(Union representatives: Bernardo Torres, Martin Alas-as, Ariston
Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the Minutes
of the Conciliation Meeting showed as follows:
'The meeting started at 10:00 A.M. A list of employees was
submitted by Atty. Tayko based on who received their 13th month
pay. The following are deemed not considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
'The name Orencio Rombo shall be verified in the 1990
payroll.
'The following employees shall be reinstated immediately
upon availability of work:
1. Jose Dagle 7. Alejandro Tejares
2. Rico Dagle 8. Gaudioso Rombo
3. Ricardo Dagle 9. Martin Alas-as Jr.
4. Jesus Silva 10. Cresensio Abrega
5. Fernando Silva 11. Ariston Eruela Sr.
6. Ernesto Tejares 12. Ariston Eruela Jr.'
"When respondents again reneged on its commitment;
complainants filed the present complaint.
"But for all their persistence, the risk they had to undergo in
conducting a strike in the face of overwhelming odds, complainants in an
ironic twist of fate now find themselves being accused of 'refusing to
work and being choosy in the kind of work they have to
perform'." 5 (Citations omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was seasonal in
nature, they were considered to be merely on leave during the off-season and
were therefore still employed by petitioners. Moreover, the workers enjoyed
security of tenure. Any infringement upon this right was deemed by the CA to be
tantamount to illegal dismissal.
The appellate court found neither "rhyme nor reason in petitioner's
argument that it was the workers themselves who refused to or were choosy in
their work." As found by the NLRC, the record of this case is "replete with
complainants' persistence and dogged determination in going back to work." 6
The CA likewise concurred with the NLRC's finding that petitioners were
guilty of unfair labor practice.
Hence this Petition. 7
 Issues
Petitioners raise the following issues for the Court's consideration:
"A. Whether or not the Court of Appeals erred in holding that
respondents, admittedly seasonal workers, were regular
employees, contrary to the clear provisions of Article 280 of
the Labor Code, which categorically state that seasonal
employees are not covered by the definition of regular employees
under paragraph 1, nor covered under paragraph 2 which refers
exclusively to casual employees who have served for at least one
year.
"B. Whether or not the Court of Appeals erred in rejecting the ruling
in Mercado, . . . and relying instead on rulings which are not
directly applicable to the case at bench, viz, Philippine Tobacco,
Bacolod-Murcia, and Gaco, . . ..
"C Whether or not the Court of Appeals committed grave abuse of
discretion in upholding the NLRC's conclusion that private
respondents were illegally dismissed, that petitioner[s were] guilty
of unfair labor practice, and that the union be awarded moral and
exemplary damages." 8
Consistent with the discussion in petitioners' Memorandum, we shall take
up Items A and B as the first issue and Item C as the second.
The Court's Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed
by this Court in petitions for review on certiorari of CA decisions. 9 Questions of
fact are not entertained. 10 The Court is not a trier of facts and, in labor cases,
this doctrine applies with greater force. 11 Factual questions are for labor
tribunals to resolve. 12 In the present case, these have already been threshed out
by the NLRC. Its findings were affirmed by the appellate court.
Contrary to petitioners' contention, the CA did not err when it held that
respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"Art. 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 activity exist." (Italics supplied)
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.
In Abasolo v. National Labor Relations Commission, 13 the Court issued
this clarification:
"[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 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.
xxx xxx xxx
". . . [T]he fact that [respondents] do not work continuously
for one whole year but only for the duration of the . . . 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 off-season are not separated from
service in said period, but merely considered on leave until re-
employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was 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.
 The Court finds no reason to disturb the CA's dismissal of what petitioners
claim was their valid exercise of a management prerogative. The sudden
changes in work assignments reeked of bad faith. These changes were
implemented immediately after respondents had organized themselves into a
union and started demanding collective bargaining. Those who were union
members were effectively deprived of their jobs. Petitioners' move actually
amounted to unjustified dismissal of respondents, in violation of the Labor Code.
"Where there is no showing of clear, valid and legal cause for the
termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for
a valid and authorized cause." 16 In the case at bar, petitioners failed to prove any
such cause for the dismissal of respondents who, as discussed above, are
regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It
ruled as follows:
"Indeed, from respondents' refusal to bargain, to their acts of
economic inducements resulting in the promotion of those who withdrew
from the union, the use of armed guards to prevent the organizers to
come in, and the dismissal of union officials and members, one cannot
but conclude that respondents did not want a union in their hacienda—a
clear interference in the right of the workers to self-organization." 17
We uphold the CA's affirmation of the above findings. Indeed, factual
findings of labor officials, who are deemed to have acquired expertise in matters
within their respective jurisdictions, are generally accorded not only respect but
even finality. Their findings are binding on the Supreme Court. 18 Verily, their
conclusions are accorded great weight upon appeal, especially when supported
by substantial evidence. 19 Consequently, the Court is not duty-bound to delve
into the accuracy of their factual findings, in the absence of a clear showing that
these were arbitrary and bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries with it the
sanction of moral and exemplary damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed Decision
AFFIRMED. Costs against petitioners.
SO ORDERED.
Puno, Sandoval-Gutierrez and Corona, JJ., concur.
 
Footnotes
1.Eighth Division, composed of Justices Ramon A. Barcelona (chairman
and ponente), Rodrigo V. Cosico and Alicia L. Santos (members).
2.Assailed CA Decision, p. 7; rollo, p. 36.
3.Fourth Division, composed of Commissioner Bernabe S. Batuhan (ponente),
Presiding Commissioner Irenea E. Ceniza and Commissioner Amorito V.
Cañete.
 4.NLRC Decision, pp. 9–10; rollo, pp. 63–64; records, pp. 28–29.
5.NLRC Decision, pp. 5–9; rollo, pp. 59-63; records, pp. 24-28. Italics provided.
6.Assailed CA Decision, p. 6; rollo, p. 35.
7.This case was deemed submitted for resolution on April 30, 2002, upon receipt by
the Court of petitioners' Memorandum, which was signed by Atty. Teodoro V.
Cortes. Respondents' Memorandum, signed by Attys. Francisco D. Yap and
Whelma F. Siton-Yap, was received by the Court on March 7, 2002.
8.Petitioners' Memorandum, p. 6; rollo, p. 275.
9.Viloria v. Court of Appeals, 309 SCRA 529, June 30, 1999.
10.Cebu Shipyard and Engineering Works, Inc. v. William Lines, Inc., 306 SCRA 762,
May 5, 1999; Villarico v. Court of Appeals, 309 SCRA 193, June 28,
1999; Alipoon v. Court of Appeals, 305 SCRA 118, March 22, 1999; Baguio v.
Republic, 301 SCRA 450, January 21, 1999.
11.Ropali Trading Corporation v. National Labor Relations Commission, 296 SCRA
309, September 25, 1998.
12.Chua v. National Labor Relations Commission, 267 SCRA 196, January 30, 1997.
13.346 SCRA 293, November 29, 2000.
14.Id., pp. 304-305, per De Leon Jr., J.
15.201 SCRA 332, September 5, 1991.
16.Valiant Machinery and Metal Corp. v. National Labor Relations Commission, 252
SCRA 369, January 25, 1996, per Mendoza, J.
17.NLRC Decision, p. 9; rollo, p. 63; records, p. 28.
18.C. Planas Commercial v. National Labor Relations Commission, 303 SCRA 49,
February 11, 1999.
19.Barros v. National Labor Relations Commission, 315 SCRA 23, September 22,
1999.
20.Tan v. National Labor Relations Commission, supra.
21.Nueva Ecija I Electric Cooperative, Inc. v. National Labor Relations
Commission, 323 SCRA 86, January 24, 2000.
 (Hacienda Fatima v. National Federation of Sugarcane Workers-Food and
|||

General Trade, G.R. No. 149440, [January 28, 2003], 444 PHIL 587-599)
 FIRST DIVISION

[G.R. No. 152777. December 9, 2005.]

LOLITA R. LACUESTA, petitioner, vs. ATENEO DE MANILA

UNIVERSITY, DR. LEOVINO MA. GARCIA and DR. MARIJO
RUIZ, respondents.

DECISION

QUISUMBING, J  : p

This petition for review on certiorari assails the Decision 1 dated October

12, 2001 of the Court of Appeals in CA-G.R. SP No. 61173 and
its Resolution 2 dated February 21, 2002, denying the motion for
reconsideration. The appellate court affirmed the Decision 3 dated February 24,
2000 of the National Labor Relations Commission (NLRC), which had reversed
the Decision dated March 20, 1998 of the Labor Arbiter.
The facts are undisputed.
Respondent Ateneo de Manila University (Ateneo) hired, on a contractual
basis, petitioner Lolita R. Lacuesta as a part-time lecturer in its English
Department for the second semester of school year 1988-1989. She was re-
hired, still on a contractual basis, for the first and second semesters of school
year 1989-1990.
On July 13, 1990, the petitioner was first appointed as full-time instructor
on probation, in the same department effective June 1, 1990 until March 31,
1991. Thereafter, her contract as faculty on probation was renewed effective
April 1, 1991 until March 31, 1992. She was again hired for a third year effective
April 1, 1992 until March 31, 1993. During these three years she was on
probation status.
In a letter dated January 27, 1993, respondent Dr. Leovino Ma. Garcia,
Dean of Ateneo's Graduate School and College of Arts and Sciences, notified
petitioner that her contract would no longer be renewed because she did not
integrate well with the English Department. Petitioner then appealed to the
President of the Ateneo at the time, Fr. Joaquin Bernas, S.J.
 In a letter dated February 11, 1993, Fr. Bernas explained to petitioner that
she was not being terminated, but her contract would simply expire. He also
stated that the university president makes a permanent appointment only upon
recommendation of the Dean and confirmation of the Committee on Faculty Rank
and Permanent Appointment. He added that any appointment he might extend
would be tantamount to a midnight appointment.
In another letter dated March 11, 1993, Fr. Bernas offered petitioner the
job as book editor in the University Press under terms comparable to that of a
faculty member. DAETcC

On March 26, 1993, petitioner applied for clearance to collect her final
salary as instructor. Petitioner also signed a Quitclaim, Discharge and Release
on April 16, 1993. 4
Petitioner worked as editor in the University Press from April 1, 1993 to
March 31, 1994 including an extension of two months after her contract expired.
Upon expiry of her contract, petitioner applied for clearance to collect her final
salary as editor. Later, she agreed to extend her contract from June 16, 1994 to
October 31, 1994. Petitioner decided not to have her contract renewed due to a
severe back problem. She did not report back to work, but she submitted her
clearance on February 20, 1995.
On December 23, 1996, petitioner filed a complaint for illegal dismissal
with prayer for reinstatement, back wages, and moral and exemplary damages.
Dr. Leovino Ma. Garcia and Dr. Marijo Ruiz were sued in their official capacities
as the previous and present deans of the College of Arts and Sciences,
respectively.
Labor Arbiter Manuel P. Asuncion held that petitioner may not be
terminated by mere lapse of the probationary period but only for just cause or
failure to meet the employer's standards. Moreover, said the Labor Arbiter, the
quitclaim, discharge and release executed by petitioner was not a bar to filing a
complaint for illegal dismissal. 5 Thus, he ordered reinstatement with payment of
full back wages.
The NLRC upon appeal of respondents reversed the Labor Arbiter's
decision and ruled that petitioner was not illegally dismissed, and that her
quitclaim was valid. Petitioner sought reconsideration but it was denied. She then
filed a petition for certiorari before the Court of Appeals assailing the NLRC
decision. The appellate court dismissed the petition saying there was no grave
abuse of discretion and affirmed the NLRC decision. It ruled:
WHEREFORE, the petition is hereby denied and
accordingly DISMISSED. 6
Hence, this instant petition where petitioner assigns the following as errors:
1. The Court of Appeals erred in ruling that it is the Manual of
Regulations For Private Schools, not the Labor Code, that determines
the acquisition of regular or permanent status of faculty members in an
educational institution;
2. The Court of Appeals erred in upholding the Quitclaim that was
signed by the Petitioner and in taking that against her claims for illegal
dismissal and for moral and exemplary damages against the
respondents. 7
 Simply put, the issue in this case is whether the petitioner was illegally
dismissed.
Petitioner contends that Articles 280 and 281 of the Labor Code, 8 not
the Manual of Regulations for Private Schools, is the applicable law to determine
whether or not an employee in an educational institution has acquired regular or
permanent status. She argues that (1) under Article 281, probationary
employment shall not exceed six (6) months from date of employment unless a
longer period had been stipulated by an apprenticeship agreement; (2) under
Article 280, if the apprenticeship agreement stipulates a period longer than one
year and the employee rendered at least one year of service, whether continuous
or broken, the employee shall be considered as regular employee with respect to
the activity in which he is employed while such activity exists; and (3) it is with
more reason that petitioner be made regular since she had rendered services as
part-time and full-time English teacher for four and a half years, services which
are necessary and desirable to the usual business of Ateneo. 9
Furthermore, the petitioner contends that her clearance was granted and
completed only after she signed the quitclaim on April 16, 1993. She contends
also that the respondents failed to show that her quitclaim was voluntary.
Respondents, for their part, contend that the Manual of Regulations for
Private Schools is controlling. In the Manual, full-time teachers who have
rendered three consecutive years of satisfactory service shall be considered
permanent. Respondents also claim that the petitioner was not terminated but
her employment contract expired at the end of the probationary period. Further,
institutions of higher learning, such as respondent Ateneo, enjoy the freedom to
choose who may teach according to its standards. Respondents also argue that
the quitclaim, discharge and release by petitioner is binding and should bar her
complaint for illegal dismissal. 
ICcaST

After considering the contentions of the parties in the light of the

circumstances in this case, we find for respondents.
The Manual of Regulations for Private Schools, and not the Labor Code,
determines whether or not a faculty member in an educational institution has
attained regular or permanent status. 10 In University of Santo Tomas v. National
Labor Relations Commission the Court en banc said that under Policy
Instructions No. 11 issued by the Department of Labor and Employment, "the
probationary employment of professors, instructors and teachers shall be subject
to the standards established by the Department of Education and Culture." Said
standards are embodied in paragraph 75 11 (now Section 93) of the Manual of
Regulations for Private Schools. 12
Section 93 13 of the 1992 Manual of Regulations for Private
Schools provides that full-time teachers who have satisfactorily completed their
probationary period shall be considered regular or permanent. 14 Moreover, for
those teaching in the tertiary level, the probationary period shall not be more than
six consecutive regular semesters of satisfactory service. 15 The requisites to
acquire permanent employment, or security of tenure, are (1) the teacher is a full-
time teacher; (2) the teacher must have rendered three consecutive years of
service; and (3) such service must have been satisfactory. 16
As previously held, a part-time teacher cannot acquire permanent
status. 17 Only when one has served as a full-time teacher can he acquire
permanent or regular status. The petitioner was a part-time lecturer before she
was appointed as a full-time instructor on probation. As a part-time lecturer, her
employment as such had ended when her contract expired. Thus, the three
semesters she served as part-time lecturer could not be credited to her in
computing the number of years she has served to qualify her for permanent
status.
Petitioner posits that after completing the three-year probation with an
above-average performance, she already acquired permanent status. On this
point, we are unable to agree with petitioner.
Completing the probation period does not automatically qualify her to
become a permanent employee of the university. Petitioner could only qualify to
become a permanent employee upon fulfilling the reasonable standards for
permanent employment as faculty member. 18 Consistent with academic freedom
and constitutional autonomy, an institution of higher learning has the prerogative
to provide standards for its teachers and determine whether these standards
have been met. 19 At the end of the probation period, the decision to re-hire an
employee on probation, belongs to the university as the employer alone.
We reiterate, however, that probationary employees enjoy security of
tenure, but only within the period of probation. Likewise, an employee on
probation can only be dismissed for just cause or when he fails to qualify as a
regular employee in accordance with the reasonable standards made known by
the employer at the time of his hiring. Upon expiration of their contract of
employment, academic personnel on probation cannot automatically claim
security of tenure and compel their employers to renew their employment
contracts. 20 In the instant case, petitioner, did not attain permanent status and
was not illegally dismissed. As found by the NLRC, her contract merely expired.
 
Lastly, we find that petitioner had already signed a valid quitclaim,
discharge and release which bars the present action. This Court has held that not
all quitclaims are per se invalid or against public policy, except (1) where there is
clear proof that the waiver was wangled from an unsuspecting or gullible person,
or (2) where the terms of settlement are unconscionable on their face. 21 In this
case, there is no showing that petitioner was coerced into signing the quitclaim.
In her sworn quitclaim, she freely declared that she received to her full
satisfaction all that is due her by reason of her employment and that she was
voluntarily releasing respondent Ateneo from all claims in relation to her
employment. 22 Nothing on the face of her quitclaim has been shown as
unconscionable.  ACcaET

WHEREFORE, the petition is DENIED for lack of merit. The Decision

dated October 12, 2001 of the Court of Appeals in CA-G.R. SP No. 61173 and its
Resolution dated February 21, 2002 are AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.
 
Footnotes
1.Rollo, pp. 160-168. Penned by Associate Justice Delilah Vidallon-Magtolis, with
Associate Justices Teodoro P. Regino, and Josefina Guevarra-Salonga
concurring.
2.Id. at 178.
3.Id. at 100-105.
4.Id. at 91-92.
5.Id. at 103.
6.Id. at 168.
7.Id. at 15.
8.ART. 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 activity exists.
  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.
9.Rollo, pp. 249-251.
10.University of Sto. Tomas v. NLRC, G.R. No. 85519, 15 February 1990, 182 SCRA
371, 376.
11.75. Full time teachers who have rendered three consecutive years of satisfactory
service shall be considered permanent.
12.Supra, note 10 at 376-377, cited in La Salette of Santiago, Inc. v. NLRC, G.R. No.
82918, 11 March 1991, 195 SCRA 80, 81-82.
13.Section 93. Regular or Permanent Status. Those who have served the
probationary period shall be made regular or permanent. Full-time teachers
who have satisfactorily completed their probationary period shall be considered
regular or permanent.
14.Saint Mary's University v. Court of Appeals, G.R. No. 157788, 8 March 2005, 453
SCRA 61, 65.
15.Section 92. Probationary Period. Subject in all instances to compliance with
Department and school requirements, the probationary period for academic
personnel shall not be more than three (3) consecutive years of satisfactory
service for those in the elementary and secondary levels, six (6) consecutive
regular semesters of satisfactory service for those in the tertiary level, and nine
(9) consecutive trimesters of satisfactory service for those in the tertiary level
where collegiate courses are offered on the trimester basis.
 16.Supra, note 10 at 377, cited in Saint Mary's University v. Court of Appeals, G.R.
No. 157788, 8 March 2005, 453 SCRA 61, 66.
17.Ibid.
18.Escorpizo v. University of Baguio, G.R. No. 121962, 30 April 1999, 306 SCRA 497,
507.
19.Cagayan Capitol College v. NLRC, G.R. Nos. 90010-11, 14 September 1990, 189
SCRA 658, 665.
20.Supra, note 18.
21.Bogo-Medellin Sugarcane Planters Association, Inc. v. NLRC, G.R. No. 97846, 25
September 1998, 296 SCRA 108, 125.
22.Rollo, p. 92.
 (Lacuesta v. Ateneo de Manila University, G.R. No. 152777, [December 9,
|||

2005], 513 PHIL 329-338)

FIRST DIVISION

[G.R. No. 159828. April 19, 2006.]

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA
(KASAMMA-CCO)-CFW LOCAL 245, petitioner, vs. THE
HON. COURT OF APPEALS and COCA-COLA BOTTLERS'
PHILS., INC., respondents.

DECISION

CHICO-NAZARIO, J  : p

Before Us is a Petition for Review on Certiorari under Rule 45 of the

Rules of Civil Procedure assailing the
Decision 1 of the Court of Appeals which affirmed the Decision 2 of public
respondent National Labor Relations Commission (NLRC) dismissing
petitioner's complaint against private respondent for violations of the
Memorandum of Agreement (MOA)/Collective Bargaining Agreement (CBA),
nonpayment of overtime pay and 13th month pay, illegal dismissal, unfair
labor practice, recovery of moral and exemplary damages and attorney's fees.
On 30 June 1998, the CBA for the years 1995-1998 executed between
petitioner union and private respondent company expired. As the duly certified
collective bargaining agent for the rank-and-file employees of private
respondent's Manila and Antipolo plants, petitioner submitted its demands to
the company for another round of collective bargaining negotiations. However,
said negotiations came to a gridlock as the parties failed to reach a mutually
acceptable agreement with respect to certain economic and non-economic
issues.
 Thereafter, petitioner filed a notice of strike on 11 November 1998 with
the National Conciliation and Mediation Board (NCMB), National Capital
Region, on the ground of CBA negotiation deadlock. With the aim of resolving
the impasse, several conciliation conferences were conducted but to no avail
as the parties failed to reach a settlement. On 19 December 1998, petitioner
held the strike in private respondent's Manila and Antipolo plants.
Subsequently, through the efforts of NCMB Administrator Buenaventura
Magsalin, both parties came to an agreement settling the labor dispute. Thus,
on 26 December 1998, both parties executed and signed a MOA providing for
salary increases and other economic and non-economic benefits. It likewise
contained a provision for the regularization of contractual, casual and/or
agency workers who have been working with private respondent for more
than one year. Said MOA was later incorporated to form part of the 1998-2001
CBA and was thereafter ratified by the employees of the company.  HSTAcI

Pursuant to the provisions of the MOA, both parties identified 64 vacant

regular positions that may be occupied by the existing casual, contractual or
agency employees who have been in the company for more than one year.
Fifty-eight (58) 3 of those whose names were submitted for regularization
passed the screening and were thereafter extended regular employment
status, while the other five failed the medical examination and were granted
six months within which to secure a clean bill of health. Within the six-month
period, three 4 of the five employees who have initially failed in the medical
examination were declared fit to work and were accorded regular employment
status. Consequently, petitioner demanded the payment of salary and other
benefits to the newly regularized employees retroactive to 1 December 1998,
in accord with the MOA. However, the private respondent refused to yield to
said demands contending that the date of effectivity of the
regularization of said employees were 1 May 1999 and 1 October 1999. Thus,
on 5 November 1999, petitioner filed a complaint before the NLRC for the
alleged violations of the subject MOA by the private respondent.
Meanwhile, a certification election was conducted on 17 August 1999
pursuant to the order of the Department of Labor and Employment (DOLE)
wherein the KASAMMA-CCO Independent surfaced as the winning union and
was then certified by the DOLE as the sole and exclusive bargaining
agent of the rank-and-file employees of private respondent's Manila and
Antipolo plants for a period of five years from 1 July 1999 to 30 June 2004. On
23 August 1999, the KASAMMA-CCO Independent demanded the
renegotiation of the CBA which expired on 30 June 1998. Such request was
denied by private respondent on the contention that there was no basis for
said demand as there was already an existing CBA which was negotiated and
concluded between petitioner and private respondent, thus, it was untimely to
reopen the said CBA which was yet to expire on 30 June 2001.
On 9 December 1999, despite the pendency of petitioner's complaint
before the NLRC, private respondent closed its Manila and Antipolo plants
resulting in the termination of employment of 646 employees. On the same
day, about 500 workers were given a notice of termination effective 1 March
2000 on the ground of redundancy. The affected employees were considered
on paid leave from 9 December 1999 to 29 February 2000 and were paid their
corresponding salaries. On 13 December 1999, four days after its
closure of the Manila and Antipolo plants, private respondent served a
notice of closure to the DOLE.
 As a result of said closure, on 21 December 1999, petitioner amended
its complaint filed before the NLRC to include" union busting, illegal
dismissal/illegal lay-off, underpayment of salaries, overtime, premium pay for
holiday, rest day, holiday pay, vacation/sick leaves, 13th month pay, moral
and exemplary damages and attorney's fees."
On 14 January 2000, KASAMMA-CCO Independent filed a
notice of strike due to unfair labor practice with the NCMB-NCR. Failing to
arrive at an amicable settlement of the labor dispute with the private
respondent, KASAMMA-CCO Independent held a strike from 9 March 2000 to
4 May 2000. On 4 May 2000, the Secretary of Labor issued an order
assuming jurisdiction over the labor dispute subject of the strike and certified
the case to the NLRC for compulsory arbitration.  IEDHAT

On 9 July 2001, the NLRC rendered its Decision dismissing the

complaint for lack of merit. According to the Commission:
Evaluating, with utmost caution, both parties' contrasting factual
version, supporting proofs, related legal excerpts and applicable
jurisprudential citations, we discern that, under the
Memorandum of Agreement (MOA) dated December 26, 1998, the 61
regularized employees are not entitled to their claims for the P60.00 per
day salary increase, mid-year gratuity pay of P5,000.00, one
sack of rice, and overtime and thirteenth month differentials effective
December 1, 1998 onward.
Initially, under the MOA, only the employees who were regular on
July 1998 and continued being such upon the signing of the MOA on
December 26, 1998 deserve retroactive payment of the MOA benefits
amounting to a lump sum of P35,000.00.
This entitlement springs from the following pertinent
provisions of the MOA:
"All covered employees who were regular as of July 1,
1998 and upon the signing of this Agreement shall each be
entitled to a lump sum in the amount of THIRTY FIVE
THOUSAND PESOS (P35,000.00) which shall, subject to the
ratification of the employees within the bargaining unit, be
released on or before 31 December 1998.
"The aforesaid amount shall be in lieu of the wage
increase as well as THE Operation Performances
Incentive DESCRIBED UNDER Item 11(B) hereof, all premium
pay, the 13th month and 14th month pay differentials, sick
leave and vacation leave credits for the period July 1, 1998 to
December 31, 1999." Underscoring supplied)
In the case at bar, since the 61 regularized employees were
regularized only on May 1, 1999 and October 1, 1999, as the case may
be, they therefore have no right whatsoever to claim entitlement to the
MOA benefits.
Moreover, CFW Local 245's insistence that the 61 regularized
employees became regular on December 1, 1998 is non sequitor. It
merely flows from its specious interpretation of the MOA provisions. The
MOA does not provide that non-regular employees who would be
deployed to fill up vacant plantilla positions covered by the 1998 and
1999 manpower budget of CCBPC should be automatically considered
regular effective December 1, 1998. What the MOA stipulates are that:
1) effective December 1, 1998, non-regular employees who have been
occupying the position to be filled up for at least one year shall be given
priority in filling up the positions; and 2) that in that case, they will not
undergo the company's regular recruitment procedures, like interviews
and qualifying examinations.  DTSIEc

The only importance of the date of December 1, 1998 is its being

the reckoning date from which the one year employment requirement
should be computed. Consequently, under the MOA, only the non-
regular employees who had worked with the company for at least a year
counted retroactively from December 1, 1998 should be given priority in
the filling up of vacant plantilla positions.
Anyway, even assuming ex gratia argumenti that the 61
regularized employees were regularized effective December 1, 1998,
they, still, are not entitled to the MOA benefits. As discussed above, only
employees who were regular on July 1, 1998 and were still so until the
signing of the MOA on December 26, 1998 could be covered by the
retroactivity clause.
Furthermore, entitling the 61 regularized employees to the MOA
benefits would certainly infringe the well-entrenched principle of "no-
work-no-pay". Since such employees started becoming regular only on
May 1, 1999 and October 1, 1999, as the case may be, it would thus be
most unfair to require CCBPI to pay them for their unworked period, for
they would certainly, be unjustly enriched at the expense of CCBPI.
We also hold that the allegedly redundant six hundred thirty-nine
(639) employees were not illegally dismissed.
Initially, there was just cause for the employees' dismissal.
It bears to stress that, aimed at 1) attaining efficiency and cost
effectiveness, 2) maximizing its production capacity and 3) ensuring that
its customers obtain products manufactured only under the most
stringent quality standards of CCBPI's modern, technologically advanced
production plants, CCBPI conducted an extensive study on the
operational mechanics of its Manila and Antipolo plants.
From this study, it was established that there was inadequate
water supply at CCBPI's Manila and Antipolo plants. As a consequence,
the company was constrained to transport water from several sources to
its production line in Manila in 1998 and 1999. Worse, it was discovered
that the quality of water supply was fast deteriorating due to the
rise of its salt level. This reality prompted the company to reduce its
production capacity. Moreover, the bottling process of treating this
water of decadent quality resulted in higher production costs. Under
these twin conditions, the company could not thus efficiently continue on
with its operations.
The study also reveals the decadent state of the production
equipment of CCBPI's Manila and Antipolo Plants. Their production lines
were among the oldest and hence, had very low line efficiency. In
comparison with the line efficiency of 71.18% of the company's other
plants, the Manila and Antipolo Plants had only efficiency
ratings of 61.09% and 58.39%, respectively. Whereas the other
production lines had an average wastage rating of 1.01%, the twin plants
had a higher average wastage ratings of 2.05% and 1.77%, respectively.
The company's production studies in 1998 and 1999 likewise reveal
substantial issues on Good Manufacturing Practice (GMP) and process
control for such plants. 
SDAcaT
 From this study, the impracticability of rehabilitating the twin
plants was also found out. Although the problems cited may be remedied
by way of a major reconstruction, this would, however, entail an
investment of huge capital. Further, the congestion of the twin plants'
sites would render impracticable such a major reconstruction. Besides,
there was utter lack of effective solution to the retrograding water supply.
The foregoing significant facts are substantially evidenced by the
Technical Evaluation of Production Requirements, Annex "20", CCBPI's
Rejoinder; Affidavit of its Operations Manager dated 3 March 2000,
Annex "1", its Position Paper dated 20 July 2000; and Certification dated
May 21, 2001 of Mr. Bruce A. Herbert, its Sur-Rejoinder.
To solve the problems cited, however, CCBPI, as soundly
recommended by the study, integrated the production capacities of the
different CCBPI modern and technologically advanced production
facilities. This imperative integration indispensably prompted CCBPI to
close, its production lines at the Manila and Antipolo Plants.
This measure taken by CCBPI indeed draws jurisprudential
justification from the following sound pronouncement of the
Supreme Court:
"Business enterprises today are faced with the
pressures of economic recession, stiff competition and labor
unrest. Thus, businessmen are always pressured to adopt certain
changes and programs in order to enhance their profits and
protect their investments. Such changes may take various forms.
Management may even choose to close a branch, department, a
plant, or a shop." (Philippine Engineering Corp. vs. CR, 41 SCRA
89)
Urgently propelled by this closure, CCBPI inevitably redundated
the services of 639 employees based at the Manila and Antipolo Plants.
The fact that their services became superfluous or in excess of what
were reasonably demanded by the actual requirements of the company
as a consequence of the closure certainly shows the undertone of good
faith on CCBPI's part in resorting to the redundation measure.
Well in support of this urgent economic measure taken is the
following postulation of the Supreme Court in the case of Wiltshire File
Co., Inc. vs. NLRC, et al., 193 SCRA 665:
"We believe that redundancy, for purposes of our Labor
Code, exists where the services of an employee are in
excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is
redundant where it is a superfluity, and superfluity of a
position or positions may be the outcome of a
number of facets, such as overhiring of workers, decreased
volume of business, or dropping of a particular product line
or service activity previously manufactured or undertaken by
the enterprises. The employer has no legal obligation to keep
in its payroll more employees than are necessary for the
operation of its business.  IHCSTE

"xxx xxx xxx.

". . . The characterization of (the employee's) service as no
longer necessary or sustainable, and therefore properly
terminable, was an exercise of business judgment on the
 part of (the employer). The wisdom or soundness of such
characterizing or decision was not subject to discretionary review
on the part of the Labor Arbiter nor of the NLRC so
long, of course, as violation of law or merely arbitrary and
malicious action is not shown. . . . The determination of the
continuing necessity of a particular officer or position in a
business corporation is management's prerogative, and the courts
will not interfere with the exercise of such so long as no
abuse of discretion or merely arbitrary or malicious action on the
part of management is shown."
Another reason why the dismissal of the 639 employees was legal
is that the same was attended by the observance of the
requirements of due process. Indeed, as early as 9 December 1999,
more than thirty (30) days prior to their actual dismissal on 1 March
2000, CCBPI served on the affected employees a written notice
informing them of the closure of the two plants and subsequent
redundation. Later, by 13 December 1999, CCBPI filed with the DOLE
the required written notice informing it of the subject closure and
consequent redundation.
This finding is perfectly in line with the following applicable legal
excerpts:
"ART. 283. Closure of establishment and
reduction of personnel. — The employer may also terminate the
employment of any employee due to . . . . redundancy. . . . or the
closing or cessation of operation of the establishment or
undertaking . . . by serving a written notice on the workers and the
Department of Labor and Employment at least one (1) month
before the intended date thereof."
"For termination of employment based on just causes
defined in Article 282 of the Labor Code:
(1) A written notice served [on] the employee specifying the
ground or grounds for termination, and giving said employee
reasonable opportunity within which to explain his side;
(ii) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence or
rebut the evidence presented against him; and
(iii) a written notice of termination served on the employee,
indicating that upon, due consideration of all the circumstances,
grounds have been established to justify his termination.
"For termination of employment as defined in Article
283 of the Labor Code, the requirement of due process shall be
deemed complied with upon the service of a written notice to the
employee and the appropriate Regional Office of the
Department of Labor and Employment at least thirty days before
[effectivity] of the termination, specifically the ground or grounds
for termination." (Par. D, Section 2, Rule 1, Book VI, Omnibus
Rules Implementing the Labor Code)  CDHacE

Needless to state, having been lawfully redundated, as

comprehensively discussed above, the affected employees are entitled
to payment of separation pay equivalent to one (1) month pay for every
 year of service, pursuant to Article 283 of the Labor Code which
provides:
"In case of termination due to the installation of labor
saving devices or redundancy, the worker affected thereby shall
be entitled to separation pay equivalent to at least his one (1)
month pay or to at least One (1) month pay for every
year of service, whichever is higher."
However, due to the economic adversity besetting our workers
today brought about by the ever increasing standards of living, CCBPI
realized that such a legal package was no longer conformable with such
on obtaining economic reality. Accordingly, CCBPI granted the affected
employees separation package much bigger than that legal separation
package. Specifically, CCBPI paid affected employees with less than
fifteen (15) years of service 150% monthly salary for every
year of service and those with fifteen (15) years and above of service
195%.
xxx xxx xxx
We, moreover, view that CCBPI is not guilty of unfair labor
practice.
Contrary to KASAMMA-CCO-Independent's contention, CCBPI
did not resort to the closure of Manila and Antipolo plants and resultant
redundation of their 637 employees just to prevent the
renegotiation of the CBA entered into between CCBPI and CFW Local
245. First, there is no substantial evidence on record supporting this
claim. Secondly, as exhaustively explained supra, CCBPI's decision to
undertake the subject closure and subsequent redundation was due to
legitimate business considerations, namely 1) the production lines at the
two plants had very low line efficiency; 2) the quality of water supply at
such plants was rapidly deteriorating; and 3) the rehabilitation of such
plants was not feasible due to the huge capital investment required as
well as the congestion of their areas.
xxx xxx xxx
WHEREFORE, premises considered, KASAMMA-CCO
Independent, and CFW Local 245's charges in the instant labor dispute
for non-grant of the CBA salary increase, mid-year gratuity, one
sack of rice, overtime pay and thirteenth (13th) month pay; illegal
dismissal; unfair labor practice; and recovery of moral and exemplary
damages and attorney's fees are hereby DISMISSED for
lack of merit. 
ScaHDT

Petitioner Coca-Cola Bottlers Phils., Inc., however, is directed to

grant the separation package adverted above to the affected employees
who have not yet received the same. Further, the company is ordered to
accord the affected employees priority in rehiring in the event the
company needs, in the future, additional personnel. 5
Petitioner's motion for reconsideration was denied in a resolution dated
24 September 2001, thus on 22 November 2001 petitioner filed a petition
for certiorari before the Court of Appeals, which was disposed by the
appellate court in this wise:
After painstaking efforts and a careful examination of the records,
we rule against the contention of the petitioner. The conflicting factual
submissions of the parties in the case at bar cannot close our eyes to
the fact that the instant case pose upon an obligation on this Court to
review and re-examine the factual findings and to re-evaluate the
pieces of evidence which supported the conclusion of the public
respondent in its disposition of the present controversy. This issue has
already been settled in Deles, Jr. vs. NLRC [327 SCRA 540 (2000)],
where the Supreme Court ruled:
"On its face, petitioner's contention would require
the Court to delve into the findings of fact a quo. This we cannot
do. In the review of NLRC decisions through a special civil action
for certiorari, we are confined only to
issues of want of jurisdiction and grave abuse of discretion on
the part of the labor tribunal. We are precluded from inquiring
unto the correctness of the evaluation of that evidence that
underpins the labor tribunal's conclusion on matters of fact. Nor
could we examine the evidence, re-evaluate the credibility of the
witnesses, nor substitute our findings of fact for those of an
administrative body which has the authority and expertise in its
specialized field. Arguably, there may even be an error in
judgment. This however is not within the ambit of the
extraordinary remedy of certiorari."
Moreover, the pronouncement of the High Tribunal in Dela Salle
University v. Dela Salle University Employees Association [330 SCRA
363 (2000)], citing established jurisprudence, has clarified the guidelines
in the resolution of petitions for certiorari involving labor cases in this
wise:
"As we reiterated in the case of Caltex Refinery
Employees Association (CREA) vs. Jose S. Brillantes, the
following are the well-settled rules in a petition for certiorari
involving labor cases.
First, the factual findings of quasi-judicial agencies (such
as the DOLE), when supported by substantial evidence, are
binding on this Court and entitled to great respect, considering
the expertise of these agencies in their respective fields. It is well
established that findings of these administrative agencies are
generally accorded not only respect but even finality.
Second, substantial evidence in labor cases is such
amount of relevant evidence which a reasonable mind will accept
as adequate to justify a conclusion.  CcADHI

Third, in Flores vs. NLRC, we explained the role and

function of Rule 65 as an extraordinary remedy. It should be
noted, in the first place, that the instant petition is a special civil
action for certiorari under Rule 65 of the Rules of Court. An
extraordinary remedy, its use is available only and restrictively in
truly exceptional cases — those wherein the action of an
inferior court, board or officer performing judicial or quasi-judicial
acts is challenged for being wholly void on grounds of jurisdiction.
The sole office of the writ of certiorari is the
correction of errors of jurisdiction including the
commission of grave abuse of discretion amounting to lack or
excess of jurisdiction. It does not include correction of public
respondent NLRC's evaluation of the evidence and the factual
findings based thereon, which are generally accorded not only
great respect but even finality."
 In the light of the rulings established under the abovecited cases,
we find no ground for disturbing the factual findings of the public
respondent vis-à-vis its resolution with regard to the issue of the
validity of the claims of the newly-regularized members of the petitioner
union, as the same is supported by substantial evidence and in accord
with established jurisprudence herein cited. It must be stressed that
factual findings of labor officials are conclusive and binding on the
Supreme Court when supported by substantial evidence.
Anent the issue of the closure of the Manila and Antipolo
plants of the private respondent which resulted in the termination from
employment of 639 or 646 employees working under the said facilities,
we find the same in order and in accord with law.
xxx xxx xxx
It must be noted that in sustaining the contention of the private
respondent on the said issue, the public respondent has relied on the
grounds asserted by the private respondent as basis in effecting the
closure and the resultant cessation of business operations in the
aforesaid plants. The recent accretion to the corpus of our jurisprudence
is the principle enunciated in National Federation of Labor vs.
NLRC [327 SCRA 158 (2000)] which holds the view that:
The closure of establishment contemplated under Article
283 of the Labor Code is a unilateral and voluntary act on the
part of the employer to close the business establishment as may
be gleaned from the use of the word " may" — it does not
contemplate a situation where the closure of the business
establishment is forced upon the employer and ultimately for the
benefit of the employees.  CEDScA

Although the Constitution provides for protection to labor,

capital and management must also be protected under a
regime of justice and the rule of law.
Hence, the claim of the petitioner that the technical
evaluation of the private respondent which served as basis for the
closure of the said facilities must be presented to the petitioner union
first before the private respondent can implement the said action is
bereft of legal basis. The same fate must suffer with respect to the
claim of the petitioner that a prior consultation is a condition sine qua
non as required under the Labor Code vis-à-vis the provision on the
participation of the employees in the decision-making processes of the
employer private respondent, before the latter can effectuate the said
closure, is devoid of legal and jurisprudential basis.
As aptly stated by an authority in labor laws [Cesario A. Azucena,
Jr., Everyone's Labor Code, 2001 Edition, p. 302], the author opined that
even if the business is not losing but its owner, for reasons of his own,
wants to stop doing business, he can lawfully do so anytime provided he
is in good faith. He further lamented in saying that "just as no law forces
anyone to go into business, no law compels anybody to stay in
business."
Moreover, the private respondent has complied with the aforesaid
requirements of the law when it decided to close the said
establishments. The records disclose that the alleged redundant, or
more appropriately, separated employees affected by the said closure
were in fact individually served with a notice of termination. All of the
subject employees were offered and given a separation package by the
 private respondent more than what is provided by the law and more than
what is stipulated under their CBA, although, some refused to accept the
said benefits, and insisted on their being reinstated. We take note that
as of the present, 546 of the 639 terminated or separated employee-
members of the petitioner union were ale to receive the said separation
benefits. Moreover, the receipt of the said separation benefits was
admitted by the petitioner. The Department of Labor and Employment
(DOLE) was also notified of such closure through a letter sent by the
private respondent dated December 10, 1999.  SEDICa

The petitioner claims that the private respondent failed to comply

with the one-month notice requirement as required under the said legal
provision since the subject employees were no longer allowed to report
for work effective immediately upon receipt of their termination notice.
However, they were still paid their salaries effective from December 9,
1999 until February 29, 2000, although they did not anymore render
service for the period. Significantly, this peculiar fact which petitioner
claims as an indirect circumvention of the said law has already been
addressed, albeit by analogy, in the recent case of Serrano v.
NLRC [331 SCRA 341 (2000)]. In the said case, the
Supreme Court held:
In that case (Associate Labor Unions-VIMCONTU vs.
NLRC [204 SCRA 913]), the employees and the then
Ministry of Labor and Employment (MOLE) were notified in
writing on August 5, 1983 that the employees' services would
cease on august 31, 1983 but that they would be paid their
salaries and other benefits until September 5, 1983. It was held
that such written notice was "more than substantial compliance
with the notice requirement of the Labor Code."
Indeed, there was more than substantial compliance with
the law in that case because, in addition to the advance written
notice required under Art. 284 (now Art. 283) of the Labor Code,
the employees were paid for five days, from September 1 to 5,
1993, even if they rendered no service for the period.
Had private respondent given a written notice to the
petitioner on October 1, 1991, at the latest, that effective October
31, 1991 his employment would cease although from October 1
he would no longer be required to work, there would be basis for
private respondent's boast that '[p]ayment of this salary even [if
he is] no longer working is effective notice and is much better
than 30 days formal notice but working until the end of the 30
days period." This is not the case here, however. What happened
here was that on October 11, 1991, petitioner was given a
memorandum terminating his employment effective on the same
day on the ground of retrenchment (actually redundancy).
xxx xxx xxx
WHEREFORE, premises considered, the instant petition is
DISMISSED for lack of merit. The assailed decision dated July 9, 2001
and the Order dated September 24, 2001 issued by public respondent
National Labor Relations Commission (NLRC) are hereby AFFIRMED.
No costs. 6
Petitioner's motion for reconsideration was denied in a resolution dated
5 September 2003. Hence, the instant petition.
 Petitioner presents before this Court two issues for resolution, namely:
1) whether or not private respondent violated the terms and conditions
contained in the MOA dated 26 December 1998 when it did not recognize the
regularization of the 61 employees as effective on 1 December 1998; and 2)
whether or not the closure of private respondent's Manila and Antipolo plants,
resulting in the termination of employment of 646 employees, was legal.  DAEIC 

In dismissing the petition before it, the Court of Appeals opined that the

resolution of the validity of the claims of the newly regularized employees
would entail a review and re-examination of the factual findings and the re-
evaluation of the pieces of evidence which supported the conclusion of the
NLRC in the latter's disposition of the instant controversy. We do not agree
with the Court of Appeals. The said issue is not a question of fact which will
necessitate the appellate court to again examine the evidence. It is, rather, a
question of law. There is a question of law when the issue does not call for an
examination of the probative value of evidence presented, the truth or
falsehood of facts being admitted and the doubt concerns the correct
application of law and jurisprudence on the matter. 7 On the other hand, there
is a question of fact when the doubt or controversy arises as to the truth or
falsity of the alleged facts. When there is no dispute as to fact, the
question of whether or not the conclusion drawn therefrom is correct is a
question of law. 8
What is necessary in determining whether the private respondent
violated the provisions of the MOA with respect to the
date of regularization of the 61 employees is an interpretation of the pertinent
provision of the MOA as agreed upon by the parties. It must be noted that
both parties admit the existence of said MOA and that they have voluntarily
entered into said agreement. Furthermore, neither of the parties deny that the
61 employees have indeed been regularized by private respondent. Clearly,
as the facts are admitted by the parties, the appellate court does not have to
inquire into the veracity of any fact in order to establish the rights of the
parties. All that the Court of Appeals must do is to interpret the
provisions of the MOA and resolve whether said regularization must be made
retroactive to 1 December 1998, which according to petitioner is provided for
under the said MOA. The MOA, being a contract freely entered into by the
parties, now constitute as the law between them, and the interpretation of its
contents purely involves an evaluation of the law as applied to the facts
herein.
Thus, the issue being a question of law, this Court will now endeavor to
resolve such matter. According to the pertinent provision of the MOA:
1. Non-economic issues
A. Filling-up of vacant regular plantilla positions; regularization
The company shall fill-up all vacant plantilla positions covered by
the 1998 manpower budget as already identified by the Task Force
created by the parties for the purpose following the following procedures:
1. Non-regular employee (casual, contractual or agency worker)
who has already served the company and is presently occupying or has
occupied the position to be filled-up for at least one (1) year shall be
given priority in filling-up the position by converting his non-regular
employment status to regular employment status, effective 01 December
1998 without need of undergoing through the company's regular
 recruitment procedures such as interview and qualifying
examination. . . 9
It is the contention of petitioner that the date 1 December 1998 refers to
the effective date of regularization of said employees, while private
respondent maintains that said date is merely the reckoning date from which
the one year employment requirement shall be computed. We agree with
petitioner. It is erroneous for the NLRC to conclude that the
regularization of the 61 employees does not retroact to 1 December 1998. A
fastidious reading of the above quoted provision will clearly point to the
conclusion that what is pertained to by the phrase "effective December 1,
1998" is the phrase immediately preceding it which is "converting his non-
regular employment status to regular employment status." It will be defying
logic to adopt private respondent's contention that the phrase "effective
December 1, 1998" designates the period when the non-regular employees
will be given priority in filling-up the positions, simply because the MOA was
signed only on 26 December 1998. Therefore, it is logically absurd that the
company will only begin to extend priority to these employees on a date that
has already passed, when in fact they have already extended priority to these
employees by agreeing to the contents of the MOA and signing said
agreement. Consequently, we hold that the effectivity date of the
regularization of the 61 employees was 1 December 1998.  cASIED

We, too, cannot agree with the NLRC's rationale that entitling the 61
regularized employees to the MOA benefits would certainly infringe the well-
entrenched principle of "no-work-no-pay," since they only became regular,
according to private respondent, on 1 May 1999 and 1 October 1999. As
stated in the MOA, only those who have worked with the company for one
year as of 1 December 1998 and are still working for the company as of the
signing of the MOA, will be considered for regularization. Evidently, it is
erroneous for the NLRC to conclude that extending to them the benefits of the
MOA would violate the principle of "no-work-no-pay" as they are actually
rendering service to the company even before 1 December 1998, and
continued to do so thereafter. Truly, they were accorded the status of regular
employees precisely because they were rendering service to the company for
the required period.
Moreover, at this point it must be stressed that under Article 280 of the
Labor Code, 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 activity exists. Also, under the law, a
casual employee is only casual for one year, and it is the passage of time that
gives him a regular status. Hence, even without the subject MOA provision,
the 61 employees must be extended regular employment status after the
lapse of one year. Even if we were to follow private respondent's contention
that the date 1 December 1998 provided in the MOA is merely a reckoning
date to determine who among the non-regular employees have rendered one
year of service as of said date, all those who have been with the company for
one year by said date must automatically be considered regular employees by
operation of law. Therefore, contrary to the interpretation of the NLRC, private
respondent violated the provision of the MOA when it did not consider the
regularization of the 61 employees effective 1 December 1998, and accorded
to them the full benefits of the MOA.
 Relative to the issue of whether the closure of private respondent's
Manila and Antipolo plants was legal, we agree in the conclusions of the
NLRC and the Court of Appeals that the closure of said plants is for an
authorized cause.
As correctly pointed out by the NLRC, the Court has already resolved
that the characterization of the employee's service as no longer necessary or
sustainable, and therefore properly terminable, is an exercise of business
judgment on the part of the employer. 10 The wisdom or soundness of such
characterizing or decision is not subject to discretionary review on the
part of the Labor Arbiter nor of the NLRC so long, of course, as
violation of law or merely arbitrary and malicious action is not shown. 11 The
determination of the continuing necessity of a particular officer or position in a
business corporation is management's prerogative, and the courts will not
interfere with the exercise of such so long as no abuse of discretion or merely
arbitrary or malicious action on the part of management is shown. 12 In the
case at bar, the closure of the Manila and Antipolo plants and the resulting
termination of the employment of 646 employees is not tainted with bad faith.
As found by the NLRC, the private respondent's decision to close the plant
was a result of a study conducted which established that the most prudent
course of action for the private respondent was to stop operations in said
plants and transfer production to other more modern and technologically
advanced plants of private respondent.  AaDSTH

Other than its mere allegations, petitioner union failed to show that the
closure of the two plants was without factual basis and done in utter bad faith.
No evidence was presented by petitioner to prove its assertion that private
respondent resorted to the closure of the Manila and Antipolo plants to
prevent the renegotiations of the CBA entered into between the parties. As
adequately explained by the NLRC, the subject closure and the resulting
termination of the 639 employees was due to legitimate business
considerations, as evidenced by the technical study conducted by private
respondent.
Anent the allegation that private respondent failed to comply with the
notice requirements as provided by the Labor Code in the cessation of its
operations, we have already settled this matter in a similar case which was
accordingly cited by the appellate court. In the case of Serrano v. National
Labor Relations Commission, 13 we held that:
In that case [Associate Labor Unions-VIMCONTU v. NLRC (204
SCRA 913)], the employees and the then Ministry of Labor and
Employment (MOLE) were notified in writing on August 5, 1983 that the
employees' services would cease on August 31, 1983 but that they
would be paid their salaries and other benefits until September 5, 1983.
It was held that such written notice was "more than substantial
compliance" with the notice requirement of the Labor Code.
Indeed, there was "more than substantial compliance" with the
law in that case because, in addition to the advance written notice
required under Art. 284 (now Art. 283) of the Labor Code, the employees
were paid for five days, from September 1 to 5, 1993, even if they
rendered no service for the period. . . . Had private respondent given a
written notice to the petitioner on October 1, 1991, at the latest, that
effective October 31, 1991 his employment would cease although from
October 1 he would no longer be required to work, there would be basis
 for private respondent's boast that '[p]ayment of this salary even [if he is]
no longer working is effective notice and is much better than 30 days
formal notice but working until the end of the 30 days period." This is not
the case here, however. What happened here was that on October 11,
1991, petitioner was given a memorandum terminating his employment
effective on the same day on the ground of retrenchment (actually
redundancy). 14
In the instant case, the employees were served notice on 9 December
1999 that their employment were being severed effective 1 March 2000;
however they were no longer required to report for work but they will continue
to receive their salary up to 29 February 2000. Therefore, as enunciated in the
ruling in Serrano v. NLRC, said act of private respondent constitutes
substantial compliance with the notice requirement of the Labor Code.  EcTIDA

WHEREFORE, premises considered, the assailed

Decisions of the Court of Appeals in CA-G.R. SP No. 67775 and of the
National Labor Relations Commission in NLRC Case No. 30-11-00466-99 and
NLRC CC No. 000182-00 are hereby AFFIRMED with MODIFICATION. The
61 subject employees are hereby declared regular employees as of 1
December 1998 and are entitled to the CBA salary increase, mid-year gratuity
pay, one sack of rice, overtime pay and thirteenth (13th) month pay as
provided for in the Memorandum of Agreement. No costs.
SO ORDERED.
Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Callejo, Sr.,
JJ., concur.
 
Footnotes
1.CA-G.R. SP No. 67775, dated 16 May 2003, penned by Associate Justice Amelita
G. Tolentino with Associate Justices Mariano C. Del Castillo and Rosemari
Declaro Carandang, concurring.
2.NLRC-NCR Case No. 30-11-00466-99 and NLRC CC No. 000182-00, dated 9 July
2001.
3."Esteban P. Ababao, Jose P. Abinado, Rustom P. Butlay, Edwin C. Cac, Ruben N.
Casanares, Elmer Cerna, Hermie R. Crisostomo, Herminio R. de los Reyes,
Orlando R. Binfotan, Rene B. Dumadag, Virgilio B. Enriquez, Dominador P.
Gapac, Joselito D. Ilrao, Sol Jr. S. Ibuyan, Nazarito A. Clariosa, Julio C. Laurio,
Antonio Lontoc, Romulo S. Macandili, Marlon C. Palomado, Marcelo S. Rapiz,
Gerry Raza, Richard Rutor, Rolando P. Samoy, Cesar S. Sarmiento, Johathan
B. Segura, Ramon A. Subang, Rommel Aguirre, Silverio Amo, Rodrigo Antonio,
Rolando Antonio, Edwin Aumentado, Alejandro Austria, Noel Bagos, Edilberto
Bantigue, Virgilio Belmores, Marcelino Benitez, Nelson Canta, Eddie Casimiro,
Ferdinand Cruz, Crisanto de Jesus, Nicolas de la Rosa, Raul Bianopra, Ronnie
Dizon, Elino Endrina, Antoner Isla, Edwin Janohan, Marvin Magistrado,
Eugenio Maniacup, Virgilio Marquez, Noel Medina, Larry Navarro, Edwin
Olaviaga, Noel Pontojas, Leopoldo Sagaral, Angelito San Diego, Wilfredo
Tablan, Joseph Teves, and Arnold Tungol."
4.Gregorio Alipio, Eduardo Flores and Ramilo Guevarra.
5.Rollo, pp. 79-89.
6.Id., pp. 79-88.
 7.Morales v. The Board of Regents of the University of the Philippines, G.R. No.
161172, 13 December 2004, 446 SCRA 227, 237, citing Roman Catholic
Archbishop of Manila v. Court of Appeals, 327 Phil. 810, 825-826 (1996).
8.Id. citing Far East Marble (Philippines), Inc. v. Court of Appeals, G.R. No. 94093,
10 August 1993, 225 SCRA 249, 255.
9.Rollo, p. 134.
10.Wiltshire File Co., Inc. v. National Labor Relations Commission, G.R. No. 82249, 7
February 1991, 193 SCRA 665, 673.
11.Id.
12.Id.
13.387 Phil. 345 (2000).
14.Id., pp. 355-356.
 (Kasapian ng Malayang Manggagawa sa Coca-Cola v. Court of Appeals, G.R.
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No. 159828, [April 19, 2006], 521 PHIL 606-627)