GMA NETWORK, INC., v.

PABRIGA
(G.R. NO. 176419 NOVEMBER 27, 2013)
PONENTE: LEONARDO-DE CASTRO, J.
FACTS:
Respondents are television technicians assigned to the following tasks: (a) manning of
Technical Operations Center; (b) acting as Transmitter/VTR men; (c) acting as Maintenance staff; and
(d) acting as cameramen.
Due to the miserable working conditions private respondents, television technicians, were
forced to file a complaint against GMA before the NLRC Regional Arbitration Branch No. VII Cebu
City and subsequently GMA received a notice of hearing of the complaint. The following day,
petitioner’s Engineering Manager confronted the private respondents about said complaint.
Private respondents were summoned to the office of GMA’s Area Manager and they were
made to explain why they filed the complaint. The next day, private respondents were barred from
entering and reporting for work without any notice stating the reasons therefor. Then the respondents,
through their counsel, wrote a letter to the Area Manager, requesting that they be recalled back to
work.
A reply from GMA’s head of Personal and Labor Relations Division, admitted the non-
payment of benefits but did not mention the request of private respondents to be allowed to return to
work. Private respondents sent another letter to Mr. Bustria reiterating their request to work but the
same was totally ignored. This prompted the private respondents to file an amended complaint raising
the following additional issues: 1) Unfair Labor Practice; 2) Illegal dismissal; and 3) Damages and
Attorney’s fees.
A mandatory conference was set to amicably settle the dispute between the parties, however,
the same proved to be futile. As a result, both of them were directed to file their respective position
papers.
Private respondents filed their position paper and then they received a copy of petitioner’s
position paper. The following day, the Labor Arbiter issued an order considering the case submitted
for decision.
Labor Arbiter dismissed the complaint for illegal dismissal and unfair labor practice, but held
petitioner liable for 13th month pay.
Respondents appealed to NLRC. NLRC reversed Labor Arbiter, saying a) All complainants
are regular employees with respect to the particular activity to which they were assigned, until it
ceased to exist. As such, they are entitled to payment of separation pay computed at one (1) month
salary for every year of service; b) They are not entitled to overtime pay and holiday pay; and c) They
are entitled to 13th month pay, night shift differential and service incentive leave pay. For purposes of
accurate computation, the entire records are REMANDED to the Regional Arbitration Branch of origin
which is hereby directed to require from respondent the production of additional documents where
necessary.

ISSUE/S:
1. WHETHER OR NOT THE RESPONDENTS ARE REGULAR EMPLOYEES AND NOT
PROJECT EMPLOYEES.
2. WHETHER OR NOT THERE IS A VALID FIXED TERM EMPLOYMENT.

RULING:
1. YES. The respondents are regular employees and not just a mere project employee.
Respondents claim that they are regular employees of petitioner GMA Network, Inc.
The latter, on the other hand, interchangeably characterize respondents’ employment as
project and fixed period/fixed term employment. There is thus the need to clarify the foregoing
terms.
Pursuant to the above-quoted Article 280 of the Labor Code, employees performing
activities which are usually necessary or desirable in the employer’s usual business or trade
can either be regular, project or seasonal employees, while, as a general rule, those
performing activities not usually necessary or desirable in the employer’s usual business or
trade are casual employees. The reason for this distinction may not be readily
comprehensible to those who have not carefully studied these provisions: only employers who
constantly need the specified tasks to be performed can be justifiably charged to uphold the
constitutionally protected security of tenure of the corresponding workers. The consequence
of the distinction is found in Article 279 of the Labor Code.
 The principal test for determining whether particular employees are properly
characterized as "project employees" as distinguished from "regular employees," is whether
or not the "project employees" were assigned to carry out a "specific project or undertaking,"
the duration (and scope) of which were specified at the time the employees were engaged for
that project.
Employers claiming that their workers are project employees should not only prove
that the duration and scope of the employment was specified at the time they were engaged,
but also that there was indeed a project. The project could either be (1) a particular job or
undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company;
or (2) a particular job or undertaking that is not within the regular business of the corporation.
In the case at bar, respondents’ jobs and undertakings are clearly within the regular
or usual business of GMA, and are not identifiably distinct or separate from the other
undertakings of the company.
Petitioner’s allegation that respondents were merely substitutes or what they call
pinch-hitters (which means that they were employed to take the place of regular employees of
petitioner who were absent or on leave) does not change the fact that their jobs cannot be
considered projects within the purview of the law. Every industry, even public offices, has to
deal with securing substitutes for employees who are absent or on leave. Such tasks, whether
performed by the usual employee or by a substitute, cannot be considered separate and
distinct from the other undertakings of the company. While it is management’s prerogative to
device a method to deal with this issue, such prerogative is not absolute and is limited to
systems wherein employees are not ingeniously and methodically deprived of their
constitutionally protected right to security of tenure. We are not convinced that a big
corporation such as petitioner cannot device a system wherein a sufficient number of
technicians can be hired with a regular status who can take over when their colleagues are
absent or on leave, especially when it appears from the records that petitioner hires so-called
pinch-hitters regularly every month.
Nowhere in the records is there any showing that petitioner reported the completion
of its projects and the dismissal of private respondents in its finished projects to the nearest
Public Employment Office as per Policy Instruction No. 2015 of the Department of Labor and
Employment [DOLE]. Jurisprudence abounds with the consistent rule that the failure of an
employer to report to the nearest Public Employment Office the termination of its workers’
services everytime a project or a phase thereof is completed indicates that said workers are
not project employees.
A project employee may also attain the status of a regular employee if there is a
continuous rehiring of project employees after the stoppage of a project; and the activities
performed are usual [and] customary to the business or trade of the employer. The
circumstances set forth by law and jurisprudence is present in this case. Even if private
respondents are to be considered as project employees, they attained regular employment
status, just the same.
2. NO. The requirements for a fixed-term employment is not met.
Petitioner interchangeably characterizes respondents’ service as project and fixed
term employment. These types of employment, however, are not the same. While the former
requires a project as restrictively defined above, the duration of a fixed-term employment
agreed upon by the parties may be any day certain, which is understood to be "that which
must necessarily come although it may not be known when." 
The decisive determinant in fixed-term employment is not the activity that the
employee is called upon to perform but the day certain agreed upon by the parties for the
commencement and termination of the employment relationship. Cognizant of the possibility
of abuse in the utilization of fixed-term employment contracts, we emphasized that where
from the circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down as contrary to
public policy or morals. We thus laid down indications or criteria under which "term
employment" cannot be said to be in circumvention of the law on security of tenure, namely:
o 1) The fixed period of employment was knowingly and voluntarily agreed upon by the
parties without any force, duress, or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent; or
 o 2) It satisfactorily appears that the employer and the employee dealt with each other
on more or less equal terms with no moral dominance exercised by the former or the
latter
It could not be supposed that private respondents KNOWINGLY and VOLUNTARILY
agreed to the 5-month employment contract. Cannery workers are never on equal terms with
their employers. Almost always, they agree to any terms of an employment contract just to get
employed considering that it is difficult to find work given their ordinary qualifications. Their
freedom to contract is empty and hollow because theirs is the freedom to starve if they refuse
to work as casual or contractual workers. Indeed, to the unemployed, security of tenure has
no value. It could not then be said that petitioner and private respondents "dealt with each
other on more or less equal terms with no moral dominance whatever being exercised by the
former over the latter.
Similarly, in the case at bar, we find it unjustifiable to allow petitioner to hire and
rehire workers on fixed terms, ad infinitum, depending upon its needs, never attaining regular
employment status. To recall, respondents were repeatedly rehired in several fixed term
contracts from 1996 to 1999.
Respondents are regular employees of petitioner. As regular employees, they are
entitled to security of tenure and therefore their services may be terminated only for just or
authorized causes. Since petitioner failed to prove any just or authorized cause for their
termination, we are constrained to affirm the findings of the NLRC and the Court of Appeals
that they were illegally dismissed. Respondents entitled to separation pay, night shift
differentials.

INNODATA KKNOWLEDGE SERVICES, INC. v. INTING

(G.R. NO. 211892, DECEMBER 6, 2017)
PONENTE: PERALTA, J.
FACTS:
Petitioner Innodata Knowledge Services, Inc. (IKSI) is a company engaged in data
processing, encoding, indexing, abstracting, typesetting, imaging, and other processes in the capture,
conversion, and storage of data and information.
At one time, Applied Computer Technologies (ACT), a company based in the United States of
America, hired IKSI to review various litigation documents and because of the nature of the job, ACT
required the petitioner (IKSI) to hire lawyers, or law graduates to review litigation documents.
For this purpose, IKSI engaged the services of respondents Inting, and others as senior and
junior reviewers with a contract duration of 5 years. However, the respondents received a Notice of
Forced Leave from the petitioner and that they are placed on an indefinite forced leave effective that
day due to the changes in the business conditions, client requirement and specifications. This
prompted the respondents to file a complaint for illegal dismissal, reinstatement or payment of
separation pay, backwages, and damages against the petitioner.
Subsequently, IKSI sent respondents separate notices informing the respondents that due to
the unavailability of new work related to the product stream and uncertainties pertaining to the arrival
of new workloads, their project employment contracts would have to be terminated.
The Labor Arbiter (LA), in the consolidated cases and declared that there was no illegal
dismissal.
The employees elevated the matter to the CA and the CA granted their petition and reversed
the ruling of the NLRC which declared that the employees are illegally dismissed and are entitled to
the to the payment of the following: (a) backwages reckoned from the start of their employment up to
the finality of this Decision with interest as six percent (6%) per annum, and 12% legal interest
thereafter until fully paid; (b) separation pay equivalent to one (1) month salary for every year of
service, with a fraction of at least six (6) months to be considered as one (1) whole year, to be
computed from the date of their employment up to the finality of this decision; (c) moral damages of
Php50,000 and exemplary damages of Php25,000; and (d) attorney's fees equivalent to 10 percent
(10%) of the total award.
The case is hereby ordered remanded to the labor arbiter for the computation of the amounts
due each petitioner and that the private respondent Innodata shall bear the costs.
The petitioner filed for a motion for reconsideration which was dismissed.
ISSUE:
Whether or not the CA committed an error when it reversed the NLRC, which declared
that respondent employees, as mere project employees, were validly placed on floating
status and, therefore, were not illegally dismissed.
RULING:
No. The employment status of a person is defined and prescribed by law and not by what the
parties say it should be. Equally important to consider is that a contract of employment is impressed
with public interest such that labor contracts must yield to the common good. Thus, provisions of
applicable statutes are deemed written into the contract, and the parties are never at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply entering
into contracts with each other.
Article 295 of the Labor Code provides the distinction between a regular and a project
employment:
Art. 295. 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.
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 aforecited provision contemplates four (4) 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; (3) seasonal employees or those who work or perform
services which are seasonal in nature, and the employment is for the duration of the season; and
(4) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence
later added a fifth (5 th) kind, the fixed-term employee. Based on Article 295, the law determines the
nature of the employment, regardless of any agreement expressing otherwise. The supremacy of the
law over the nomenclature of the contract and its pacts and conditions is to bring life to the policy
enshrined in the Constitution to afford full protection to labor. Thus, labor contracts are placed on a
higher plane than ordinary contracts since these are imbued with public interest and, therefore,
subject to the police power of the State.
Project employment contracts, which fix the employment for a specific project or undertaking,
are valid under the law. By entering into such a contract, an employee is deemed to understand that
his employment is coterminous with the project. He may no longer be employed after the completion
of the project for which he was hired. But project employment contracts are not lopsided agreements
in favor of only one party. The employer's interest is equally important as that of the employees'.
While it may be true that it is the employer who drafts project employment contracts with its business
interest as overriding consideration, such contracts must not prejudice the employee.
Here, while IKSI was able to show the presence of a specific project, the ACT Project, in the
contract and the alleged duration of the same, it failed to prove, however, that respondents were in
reality made to work only for that specific project indicated in their employment documents and that it
adequately informed them of the duration and scope of said project at the time their services were
engaged. It is well settled that a party alleging a critical fact must support his allegation with
substantial evidence, as allegation is not evidence. The fact is IKSI actually hired respondents to
work, not only on the ACT Project, but on other similar projects such as the Bloomberg. When
respondents were required to work on the Bloomberg project, without signing a new contract for that
purpose, it was already outside of the scope of the particular undertaking for which they were hired; it
was beyond the scope of their employment contracts. The fact that the same happened only once is
inconsequential. What matters is that IKSI required respondents to work on a project which was
separate and distinct from the one they had signed up for. This act by IKSI indubitably brought
respondents outside the realm of the project employees’ category.
IKSI likewise fell short in proving that the duration of the project was reasonably determinable
at the time respondents were hired. As earlier mentioned, the employment contracts provided for "the
duration of the Project, which is expected to be completed after a maximum of five (5) years, or on or
before______ ."The NLRC upheld the same, finding that the contracts clearly provided for the
duration of the project which was expected to end after a maximum of five (5) years, or on or before
July 2, 2013. It is interesting to note, however, that the five (5)-year period is not actually the duration
of the project but merely that of the employment contract. Naturally, therefore, not all of respondents'
employment would end on July 2, 2013, as the completion of the five (5)-year period would depend on
when each employee was employed.

The Court has previously recognized the validity of fixed-term employment contracts, but it
has consistently held that this is more of an exception rather than the general rule. Aware of the
possibility of abuse in the utilization of fixed-term employment contracts, the Court has declared that
where from the circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down as contrary to public
policy or morals.
It is evident that IKSI’s contracts of employment are suspect for being highly ambiguous. In
effect, it sought to alternatively avail of project employment and employment for a fixed term so as to
preclude the regularization of respondents' status. The fact that respondents were lawyers or law
graduates who freely and with full knowledge entered into an agreement with the company is
inconsequential. The utter disregard of public policy by the subject contracts negates any argument
that the agreement is the law between the parties and that the fixed period was knowingly and
voluntarily agreed upon by the parties. In the interpretation of contracts, obscure words and provisions
shall not favor the party that caused the obscurity. Consequently, the terms of the present contract
should be construed strictly against the employer, for being the party who prepared it.
Thus, there were no valid fixed-term or project contracts and respondents were IKSI’s regular
employees who could not be dismissed except for just or authorized causes. Any ambiguity in said
contracts must be resolved against the company, especially because under Article 1702 of the Civil
Code, in case of doubt, all labor contracts shall be construed in favor of the worker. The Court cannot
simply allow IKSI to construe otherwise what appears to be clear from the wordings of the contract
itself. The interpretation which IKSI seeks to conjure is wholly unacceptable, as it would result in the
violation of respondents' right to security of tenure guaranteed in Section 3 of Article XIII of the
Constitution and in Article 294 of the Labor Code.

CONSUNJI v. GOBRES
(G.R. NO. 169170 AUGUST 08, 2010)
PONENTE: PERALTA, J.
FACTS:
Respondents worked as carpenters in the construction projects of petitioner D.M. Consunji,
Inc. Their termination from employment for each project was reported to the Department of Labor and
Employment.
Respondents' last assignment was at Quad 4-Project in Glorietta, Ayala, Makati, respondents
saw their names included in the Notice of Termination posted on the bulletin board at the project
premises. Respondents filed a Complaint with the Arbitration Branch of the National Labor Relations
Commission (NLRC) against petitioner D.M. Consunji, Inc. and David M. Consunji for illegal dismissal,
and non-payment of 13th month pay, five (5) days service incentive leave pay, damages and
attorney's fees.
Petitioner D.M. Consunji, Inc. and David M. Consunji countered that respondents, being
project employees, are covered by Policy Instruction No. 20 with respect to their separation or
dismissal. Respondents were employed per project undertaken by petitioner company and within
varying estimated periods indicated in their respective project employment contracts.
Petitioner and David M. Consuji averred that respondents' services were terminated when
their phases of work for which their services were engaged were completed or when the projects
themselves were completed. Petitioner contended that since respondents were terminated by reason
of the completion of their respective phases of work in the construction project, their termination was
warranted and legal. Moreover, petitioner claimed that respondents have been duly paid their service
incentive leave pay and 13th month pay through their respective bank accounts, as evidenced by
bank remittances.
Respondents replied that the Quad 4-Project at Glorietta, Ayala, Makati City was estimated to
take two years to finish, but they were dismissed within the two-year period. They had no prior notice
of their termination. Labor Arbiter rendered a Decision dismissing respondents' complaint.
Labor Arbiter found that respondents were project employees that they were dismissed from
the last project they were assigned to when their respective phases of work were completed, and that
petitioner D.M. Consunji, Inc. and David M. Consunji reported their termination of services to the
DOLE in accordance with the requirements of law. NLRC affirmed the decision of the Labor Arbiter,
and dismissed the appeal for lack of merit.
Respondents' motion for reconsideration was denied by the NLRC. Court of Appeals
sustained the findings of the NLRC that respondents are project employees. Labor Arbiter and [the]
NLRC correctly applied Article 280 of the Labor Code when it ruled that petitioners' employment,
which is fixed for [a] specific project and the completion of which has been determined at the time that
their services were engaged, makes them project employees. CA stated that although respondents
were project employees, they were entitled to know the reason for their dismissal and to be heard on
whatever claims they might have.
It held that respondents' right to statutory due process was violated for lack of advance notice
of their termination, even if they were validly terminated for having completed the phases of work for
which they were hired. Hence, the Court of Appeals ordered petitioner and David M. Consunji to pay
respondents P20,000.00 each as nominal damages for lack of advance notice of their termination.
Petitioner and David M. Consunji filed a partial motion for reconsideration and prayed that deleting the
award of nominal damages to each respondent. Court of Appeals denied the partial motion for
reconsideration. Court ruled that even if the dismissal is legal, the employer should still indemnify the
employee for the violation of his statutory rights. Petitioner D.M. Consunji, Inc. filed this petition raising
this question of law.
Petitioner contends that the award of nominal damages in the amount of P20,000.00 to each
respondent is unwarranted under Section 2 (III), Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code. "If the termination is brought about by the completion of the contract or
phase thereof, no prior notice is required." Petitioner also contends that the termination therein was
for just cause due to abandonment of work, while in this case, respondents were terminated due to
the completion of the phases of work.

ISSUE:
Whether or not the respondents, as project employees, are entitled to nominal
damages for lack of advance notice of their dismissal.

RULING:
The petition is meritorious.
A project employee is defined under Article 280 of the Labor Code as 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
services to be performed is seasonal in nature and the employment is for the duration of the season."
In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that respondents,
as project employees, were validly terminated due to the completion of the phases of work for which
their services were engaged.
However, the Court of Appeals held that respondents were entitled to nominal damages,
because petitioner failed to give them advance notice of their termination. Respondents, in this case,
were not terminated for just cause under Article 282 of the Labor Code.
Instead, respondents were terminated due to the completion of the phases of work for which
their services were engaged. As project employees, respondents' termination is governed by Section
1 (c) and Section 2 (III), Rule XXIII (Termination of Employment), Book V of the Omnibus Rules
Implementing the Labor Code.
Section 1.  Security of tenure (a) In cases of regular employment, the employer shall
not terminate the services of an employee except for just or authorized causes as
provided by law, and subject to the requirements of due process.

(c) In cases of project employment or employment covered by legitimate contracting

or sub-contracting arrangements, no employee shall be dismissed prior to the
completion of the project or phase thereof for which the employee was engaged, or
prior to... the expiration of the contract between the principal and contractor, unless
the dismissal is for just or authorized cause subject to the requirements of due
process or prior notice, or is brought about by the completion of the phase of the
project or contract for which... the employee was engaged.
Hence, the cited provision's requirements of due process or prior notice when an employee is
dismissed for just or authorized cause... prior to the completion of the project or phase thereof for
which the employee was engaged do not apply to  this case.
 Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code
provides
III. If the termination is brought about by the completion of the contract or phase
thereof, no prior notice is required.  If the termination is brought about by the failure of
an employee to meet the standards of the employer in the case of probationary...
employment, it shall be sufficient that a written notice is served the employee within a
reasonable time from the effective date of termination.
In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that respondents
were validly terminated due to the completion of the phases of work for which respondents’
services were engaged. "If the termination is brought about by the completion of the contract or phase
thereof, no prior notice is required.
Hence, prior or advance notice of termination is not part of procedural due process if the
termination is brought about by the completion of the contract or phase thereof for which the
employee was engaged.

PAZ v. NORTHERN TOBACCO REDRYING CO., INC.

(G.R. No. 199554               February 18, 2015)
PONENTE: LEONEN, J
FACTS:
Northern Tobacco, a flue-curing and redrying of tobacco leaves business, employs seasonal
workers tasked to sort, process, store and transport tobacco leaves during the tobacco season of
March to September. Paz was hired by Northern Tobacco sometime in 1974 as a seasonal sorter,
paid ₱185.00 daily. She was regularly rehired her every tobacco season (March to September) since
then.
When Paz turned 63 years old, Northern Tobacco informed her that she was considered
retired under company policy. Northern Tobacco told her she would receive ₱12,000.00 as retirement
pay. Paz filed a Complaint for illegal dismissal against Northern Tobacco. She later on amended her
complaint to include payment of retirement benefits, damages, and attorney’s fees and impleaded
Plant Manager Ang. She alleged that ₱12,000.00 seemed inadequate for her 29 years of service.
LA confirmed that Paz‘s correct retirement pay of was ₱12,487.50, same as Northern
Tobacco’s computation. NLRC modified the LA’s Decision. NLRC ruled that Paz’s retirement pay
should be computed pursuant to RA 7641 and that all the months she was engaged to work for
respondent for the last 28 years should be added and divided by six (for a fraction of six months is
considered as one year) to get the number of years for] her retirement pay. Paz was awarded
financial assistance in the amount of P60,356.25.
CA agreed that a computation based on Article 287 would yield an amount of ₱12,487.50 as
retirement pay. However, CA considered such amount so meager that it could hardly support Paz
considering that she is weak and old, unable to find employment. CA deemed it appropriate to apply
the formula: One half-month pay multiplied by 29 years of service divided by two yielded ₱60,356.25
as Paz’s retirement pay. This formula was based on jurisprudence on financial assistance (CA did not
specify which case law it followed).

ISSUE:
1. Whether or not Paz is a regular employee.
2. Whether or not Paz was illegally dismissed.

RULING:
1. YES.
Article 280 of the Labor Code and jurisprudence identified three types of employees,
namely: "(1) regular employees or those who have been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer;
(2) project employees or those whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season; and (3) casual
employees or those who are neither regular nor project employees."
This court explained that the proviso in the second paragraph of Article 280 in that
"any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee" applies only to "casual"
employees and not "project" and regular employees in the first paragraph of Article 280
 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. The services petitioner Paz performed as a sorter were
necessary and indispensable to respondent NTRCI’s business of flue-curing and redrying
tobacco leaves. She was also regularly rehired as a sorter during the tobacco seasons for
29 years since 1974. These considerations taken together allowed the conclusion that
petitioner Paz was a regular seasonal employee, entitled to rights under Article 279.
2. YES.
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain age,
agrees to sever his or her employment with the former."
Article 287, as amended, allows for optional retirement at the age of at least 60 years
old. Consequently, if "the intent to retire is not clearly established or if the retirement is
involuntary, it is to be treated as a discharge."63 The National Labor Relations
Commission considered petitioner Paz’s amendment of her Complaint on April 27, 2004
akin to an optional retirement when it determined her as illegally dismissed from May 18,
2003 to April 27, 2004, thus being entitled to full backwages from May 19, 2003 until April
26, 2004.
Again, petitioner Paz never abandoned her argument of illegal dismissal despite the
amendment of her Complaint. This implied lack of intent to retire until she reached the
compulsory age of 65. Thus, she should be considered as illegally dismissed from May
18, 2003 until she reached the compulsory retirement age of 65 in 2005 and should be
entitled to full backwages for this period.
An award of full backwages is "inclusive of allowances and other benefits or their
monetary equivalent, from the time their actual compensation was withheld. . . ."
Backwages, considered as actual damages,66 requires proof of the loss suffered.
The Court of Appeals found "no positive proof of the total number of months that she
actually rendered work."67 Nevertheless, petitioner Paz’s daily pay of 185.00 was
established. She also alleged that her employment periods ranged from three to seven
months.
Since the exact number of days petitioner Paz would have worked between May 18,
2003 until she would turn 65 in 2005 could not be determined with specificity, this court
thus awards full backwages in the amount of ₱22,200.00 computed by multiplying 185.00
by 20 days, then by three months, then by two years.

GRACE CHRISTIAN SCHOOL v. LAVANDERA

(G.R. NO. 177845 AUGUST 20, 2014)
PONENTE: PERLAS-BERNABE, J.
FACTS:
Filipinas was employed by petitioner Grace Christian High School (GCHS) as high
school teacher since June1977, with a monthly salary of 18,662.00. Filipinas filed a complaint for
illegal (constructive) dismissal, non-payment of service incentive leave (SIL) pay, separation pay,
service allowance, damages, and attorney’s fees against GCHS and/or its principal, Dr. James Tan.
She alleged that on May 11, 2001, she was informed that her services were to be terminated effective
May 31, 2001, pursuant to GCHS’ retirement plan which gives the school the option to retire
a teacher who has rendered at least 20 years of service, regardless of age, with a retirement pay of
one-half (½) month for every year of service.
At that time, Filipinas was only 58 years old and still physically fit to work. She pleaded with
GCHS to allow her to continue teaching but her services were terminated, contrary to the provisions of
Republic Act No. (RA) 7641, otherwise known as the “Retirement Pay Law.”
 LA dismissed the illegal dismissal case but found the retirement benefits payable under
GCHS plan to be deficient. NLRC reversed LA’s award and held that retirement pay should
be computed based on her monthly salary at the time of her retirement. CA modified NLRC’s decision
and ruled that the computation of “one-half month salary” by equating it to”22.5 days”.

ISSUE:
Whether or not the multiplier “22.5 days” is to be used in computing the retirement
pay differentials of Filipinas.

RULING:
YES.
RA 7641, which was enacted on December 9, 1992, amended Article 287 of the Labor Code,
providing for the rules on retirement pay to qualified private sector employees in the absence of any
retirement plan in the establishment. The said law states that “an employee’s retirement benefits
under any collective bargaining [agreement (CBA)] and other agreements shall not be less than those
provided” under the same – that is, at least one-half (½) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year – and that “[u]nless the parties
provide for broader inclusions, the term one-half (½) month salary shall mean fifteen (15) days plus
one-twelfth (1/12) of the 13 th month pay and the cash equivalent of not more than five (5) days of
service incentive leaves.”
The foregoing provision is applicable where (a) there is no CBA or other applicable
agreement providing for retirement benefits to employees, or (b) there is a CBA or other applicable
agreement providing for retirement benefits but it is below the requirement set by law. Verily, the
determining factor in choosing which retirement scheme to apply is still superiority in terms of benefits
provided.
In the present case, GCHS has a retirement plan for its faculty and non-faculty members,
which gives it the option to retire a teacher who has rendered at least 20 years of service, regardless
of age, with a retirement pay of one-half (½) month for every year of service. Considering, however,
that GCHS computed Filipinas’ retirement pay without including one-twelfth (1/12) of her 13 th month
pay and the cash equivalent of her five (5) days SIL, both the NLRC and the CA correctly ruled that
Filipinas’ retirement benefits should be computed in accordance with Article 287 of the Labor Code,
as amended by RA 7641, being the more beneficent retirement scheme. They differ, however, in the
resulting benefit differentials due to divergent interpretations of the term “one-half (½) month salary”
as used under the law.
The Court, in the case of Elegir v. Philippine Airlines, Inc., has recently affirmed that  “one-half
(½) month salary means 22.5 days:  15 days plus 2.5 days representing one-twelfth (1/12) of the 13th
month pay and the remaining 5 days for [SIL].” The Court sees no reason to depart from this
interpretation. GCHS’ argument therefore that the 5 days SIL should be likewise pro-rated to their
1/12 equivalent must fail.
The foregoing rules are, thus, clear that the whole 5 days of SIL are included in the
computation of a retiring employees’ pay, as correctly ruled by the CA.
Nonetheless, the Court finds that the award of legal interest at the rate of 6% per annum on
the amount of P68,150.00 representing the retirement pay differentials due Filipinas  should be
reckoned from the rendition of the LA’s Decision on March 26, 2002 and not from the filing of the
illegal dismissal complaint as ordered by the CA.
Unlike in MLQU v. NLRC, where the retired teachers sued for the payment of the deficiency
in their retirement benefits, Filipinas’ complaint was for illegal (constructive) dismissal, and the
obligation to provide retirement pay was only determined upon the rendition of the LA’s Decision,
which also found the same to be deficient vis-à-vis those provided under RA 7641. As such, it is only
from the date of the LA’s Decision that GCHS’ obligation to pay Filipinas her retirement pay
differentials may be deemed to have been reasonably ascertained and its payment legally adjudged
to be due, although the actual base for the computation of legal interest shall be on the amount finally
adjudged.