1. Purefoods v.

NLRC,
GR 122653, Dec. 12, 1997

FACTS: The private respondents were hired by petitioner Pure Foods to work for a fixed period
of five months at its tuna cannery plant in General Santos City. After the expiration of their
respective contracts of employment, their services were terminated. They forthwith executed a
"Release and Quitclaim" stating that they had no claim whatsoever against the petitioner.
Private respondents then filed before the NLRC a complaint for illegal dismissal against the
petitioner.

The Labor Arbiter dismissed the complaint on the ground that the private respondents were
mere contractual workers, and not regular employees; hence, they could not avail of the law on
security of tenure. The termination of their services by reason of the expiration of their contracts
of employment was, therefore, justified.

The private respondents appealed the decision to the NLRC which affirmed the LA’s decision.
However, on private respondents' motion for reconsideration, the NLRC rendered another
decision holding that the private respondent and their co-complainants were regular employees.
It declared that the contract of employment for five months was a "clandestine scheme
employed by the petitioner to stifle private respondents' right to security of tenure" and should
therefore be struck down and disregarded for being contrary to law, public policy, and morals.
Hence, their dismissal on account of the expiration of their respective contracts was illegal. Its
motion for reconsideration having been denied, the petitioner came to this Court contending that
respondent NLRC committed grave abuse of discretion amounting to lack of jurisdiction in
reversing the decision of the Labor Arbiter.

ISSUE: Whether or not private respondents are regular employees of petitioner company or mere
contractual employees.

RULING: The employees are regular employees. Their line of work is UND to the employer’s
company.

In the instant case, the private respondents' activities consisted in the receiving, skinning,
loining, packing, and casing-up of tuna fish which were then exported by the petitioner.
Indisputably, they were performing activities which were necessary and desirable in petitioner's
business or trade. Contrary to petitioner's submission, the private respondents could not be
regarded as having been hired for a specific project or undertaking. The term "specific project or
undertaking" under Article 280 of the Labor Code contemplates an activity which is not
commonly or habitually performed or such type of work which is not done on a daily basis but
only for a specific duration of time or until completion; the services employed are then
necessary and desirable in the employer's usual business only for the period of time it takes to
complete the project. The fact that the petitioner repeatedly and continuously hired
workers to do the same kind of work as that performed by those whose contracts had
expired negates petitioner's contention that those workers were hired for a specific
project or undertaking only.
Although, this Court has upheld the legality of fixed-term employment, none of the criteria had
been met in the present case. It could not be supposed that private respondents and all other
so-called "casual" workers of the petitioner 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.

The petitioner does not deny or rebut private respondents' averments (1) that the main bulk of
its workforce consisted of its so-called "casual" employees; (2) that as of July 1991, "casual"
workers numbered 1,835; and regular employee, 263; (3) that the company hired "casual" every
month for the duration of five months, after which their services were terminated and they were
replaced by other "casual" employees on the same five-month duration; and (4) that these
"casual" employees were actually doing work that were necessary and desirable in petitioner's
usual business. This scheme of the petitioner was apparently designed to prevent the private
respondents and the other "casual" employees from attaining the status of a regular employee.
It was a clear circumvention of the employees' right to security of tenure and to other benefits
like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay.
Indeed, the petitioner succeeded in evading the application of labor laws. Also, it saved itself
from the trouble or burden of establishing a just cause for terminating employees by the simple
expedient of refusing to renew the employment contracts.

To uphold the contractual arrangement between the petitioner and the private respondents
would, in effect, permit the former 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.

2. Supreme Steel Corporation v. NMS-IND-APL,

GR 185556, March 28, 2011

11 Violations in the CBA but only dwell on Contracting-out labor

FACTS: Respondent filed a notice of strike with the National Conciliation and Mediation Board
(NCMB) on the ground that petitioner violated certain provisions of the CBA. The parties failed
to settle their dispute. Consequently, the Secretary of Labor certified the case to the NLRC for
compulsory arbitration pursuant to Article 263(g) of the Labor Code.

Respondent alleged eleven CBA violations, enumerated as follows: (1) denial to four employees
of the CBA-provided wage increase, (2) contracting-out labor, (3) failure to provide shuttle
service, (4) refusal to answer for medical expenses incurred by three employees, (5) failure to
comply with time-off provision, (6) visitors free access to company premises, (7) failure to
comply with reporting time-off provision, (8) dismissal of an employee supposedly due to
disease, (9) denial of paternity leave benefit to two employees, (10) discrimination and
harassment, and (11) non-implementation of COLA

B. Contracting-out labor. Article II, Section 6 of the CBA provides:

Section 6. Prohibition of Contracting Out of Work of Members of Bargaining Unit. Thirty
(30) days from the signing of this CBA, contractual employees in all departments, except
Warehouse and Packing Section, shall be phased out. Those contractual employees
who are presently in the workforce of the COMPANY shall no longer be allowed to work
after the expiration of their contracts without prejudice to being hired as probationary
employees of the COMPANY.

Respondent claimed that, contrary to this provision, petitioner hired temporary workers for five
months based on uniformly worded employment contracts, renewable for five months, and
assigned them to almost all of the departments in the company; that temporary workers are
allowed only in the Warehouse and Packing Section; Employment of contractual employees
outside this section, whether direct or agency-hired, was absolutely prohibited. Petitioner never
regularized them even if the position they occupied and the services they performed were
necessary and desirable to its business. Upon the expiration of their contracts, these workers
would be replaced with other workers with the same employment status. This scheme is a clear
circumvention of the laws on regular employment.

Petitioner admitted that it hired temporary workers. It purportedly did so to cope with the
seasonal increase of the job orders from abroad. It purportedly did so to cope with the seasonal
increase of the job orders from abroad. In order to comply with the job orders, petitioner hired
the temporary workers to help the regular workers in the production of steel pipes. Petitioner
insisted that the hiring of temporary workers is a management prerogative.
NLRC rendered a decision in favor of the respondents and order the petitioner to regularize
workers Dindo Buella and 60 other workers and to respect CBA provision on contracting-out
labor. The CA affirmed the ruling of NLRC and dismissed the petition of the petitioner.

ISSUE: WoN the respondents are temporary employees

RULING: Regular employees, petitioner is guilty of contacting-out labor.

The exercise of management prerogative is not unlimited. Managerial prerogatives are subject
to limitations provided by law, collective bargaining agreements, and general principles of fair
play and justice. The CBA is the norm of conduct between the parties and, as previously stated,
compliance therewith is mandated by the express policy of the law.

The CBA is clear in providing that temporary employees will no longer be allowed in the
company except in the Warehouse and Packing Section. Petitioner is bound by this provision. It
cannot exempt itself from compliance by invoking management prerogative. Management
prerogative must take a backseat when faced with a CBA provision. If petitioner needed
additional personnel to meet the increase in demand, it could have taken measures without
violating the CBA.

Respondent claims that the temporary employees were hired on five-month contracts,
renewable for another five months. After the expiration of the contracts, petitioner would hire
other persons for the same work, with the same employment status.

Plainly, petitioner’s scheme seeks to prevent employees from acquiring the status of regular
employees. But the Court has already held that, where from the circumstances it is apparent
that the periods of employment have been imposed to preclude acquisition of security of tenure
by the employee, they should be struck down or disregarded as contrary to public policy and
morals. The primary standard to determine a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the business or trade of
the employer. The test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. 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 of the employer. Hence, the employment is also
considered regular, but only with respect to such activity and while such activity exists.

3. Magsalin & Coca-Cola v. NOWM,

GR 148492, May 9, 2003

FACTS: Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent
workers as "sales route helpers" for a limited period of five months. After five months,
respondent workers were employed by petitioner company on a day-to-day basis and were
hired to substitute for regular sales route helpers whenever the latter would be unavailable or
when there would be an unexpected shortage of manpower in any of its workplaces or an
unusually high volume of work. The practice was for the workers to wait every morning outside
the gates of the sales office of petitioner company. If thus hired, the workers would then be paid
their wages at the end of the day.

Respondent workers asked petitioner company to extend to them regular appointments.

Petitioner company refused. Subsequently, 23 of the "temporary" workers (herein respondents)
filed with the NLRC a complaint for the regularization of their employment with petitioner
company. The complaint was amended a number of times to include other complainants that
ultimately totaled 58 workers. Claiming that petitioner company meanwhile terminated their
services, respondent workers filed a notice of strike and a complaint for illegal dismissal and
unfair labor practice with the NLRC.

NLRC rendered a decision that respondents (then complainants) were not regular employees of
petitioner company. CA then reversed and set aside the decision of NLRC, declaring the
respondents regular employees.

ISSUE: WoN the respondents are regular employees of the company

RULING: Yes, regular employees.

Respondent workers, when hired, would go with route salesmen on board delivery trucks and
undertake the laborious task of loading and unloading softdrink products of petitioner company
to its various delivery points. The argument of petitioner that its usual business or trade is
softdrink manufacturing and that the work assigned to respondent workers as sales route
helpers so involves merely "postproduction activities," one which is not indispensable in the
manufacture of its products, scarcely can be persuasive. If, as so argued by petitioner company,
only those whose work are directly involved in the production of softdrinks may be held
performing functions necessary and desirable in its usual business or trade, there would have
then been no need for it to even maintain regular truck sales route helpers. The nature of the
work performed must be viewed from a perspective of the business or trade in its entirety 4 and
not on a confined scope.

The repeated rehiring of respondent workers and the continuing need for their services clearly
attest to the necessity or desirability of their services in the regular conduct of the business or
trade of petitioner company. The Court of Appeals has found each of respondents to have
worked for at least one year with petitioner company. While this Court, in Brent School, Inc. vs.
Zamora, has upheld the legality of a fixed-term employment, it has done so, however, with a
stern admonition that where from the circumstances it is apparent that the period has been
imposed to preclude the acquisition of tenurial security by the employee, then it should be struck
down as being contrary to law, morals, good customs, public order and public policy.

The pernicious practice of having employees, workers and laborers, engaged for a fixed period
of few months, short of the normal six-month probationary period of employment, and,
thereafter, to be hired on a day-to-day basis, mocks the law. Any obvious circumvention of the
law cannot be countenanced. The fact that respondent workers have agreed to be employed on
such basis and to forego the protection given to them on their security of tenure, demonstrate
nothing more than the serious problem of impoverishment of so many of our people and the
resulting unevenness between labor and capital. A contract of employment is impressed with
public interest. The provisions of applicable statutes are deemed written into the contract, and
"the parties are not at liberty to insulate themselves and their relationships from the impact of
labor laws and regulations by simply contracting with each other."

4. AMA Computer College, Paranaque v. Austria,

GR 164078, Nov. 23, 2007

FACTS: Petitioner AMA Computer College, Parañaque (AMA) is an educational institution

duly organized under the laws of the Philippines. The rest of the petitioners are principal officers
of AMA. Respondent Rolando A. Austria (respondent) was hired by AMA on probationary
employment as a college dean on April 24, 2000.

On August 22, 2000, respondent’s appointment as dean was confirmed by AMA’s Officer-in-
Charge (OIC), Academic Affairs. In the event that Mr. Austria gives up the Dean position or fails
to meet the standards of the (sic) based on the evaluation of his immediate superior, he shall be
considered for a faculty position and the appointee agrees that he shall lose the transportation
allowance he enjoys as Dean and be entitled to his faculty rate.

Sometime in August 2000, respondent was charged with violating AMA’s Employees’ Conduct
and Discipline provided in its Orientation Handbook leaking of test questions; failure to monitor
general requirements vital to the operations of the company; and gross inefficiency. This
resulted in the loss of trust and confidence in your credibility as a company officer holding a
highly sensitive position.

In view of this, your services as Dean of AMA Parañaque is hereby terminated

effective immediately. You are hereby instructed to report to the branch HR
Personnel for further instructions. Please bear in mind that as a company policy you are
required to accomplish your clearance and turn over all documents and responsibilities to the
appropriate officers. You are barred from entering the company premises unless with clearance
from the HRD. On October 27, 2000, respondent filed a Complaint for Illegal Dismissal, Illegal
Suspension, Non-Payment of Salary and 13th Month Pay with prayer for Damages and
Attorney's Fees against AMA and the rest of the petitioners. Trial on the merits
ensued. In his Decision dated December 6, 2000, the Labor Arbiter held that petitioners
accorded respondent due process.

On March 31, 2003, the NLRC, in its Decision, found merit in the respondent's appeal. The
NLRC stated that the petitioners did not contravene respondent's allegation that he had attained
regular status after serving the three (3)-month probationary period required under the
Handbook. On March 29, 2004, the CA held that based on the Handbook and on respondent's
appointment, it can be inferred that respondent was a regular employee, and as such, his
employment can only be terminated for any of the causes provided under Article 28 of the Labor
Code and after observance of the requirements of due process.

ISSUE: 1. Whether or not he is a regular employee

RULING: (Type of employment-FIXED TERM)

The basis of the court’s decision in this case is that the respondent voluntarily accepted
the employment, assumed the position, and performed the functions of dean is clear
indication that he knowingly and voluntarily consented to the terms and conditions of
the appointment, including the fixed period of his deanship. Other than the handwritten
notes made in the letter of appointment, no evidence was ever presented to show that
respondent’s consent was vitiated, or that respondent objected to the said appointment
or to any of its conditions.

For a valid fixed-term employment, the following requisites must be present:

a. 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
b. 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

We agree. We held that Article 280 of the Labor Code does not proscribe or prohibit an
employment contract with a fixed period. Even if the duties of the employee consist of activities
necessary or desirable in the usual business of the employer, the parties are free to agree on a
fixed period of time for the performance of such activities. There is nothing essentially
contradictory between a definite period of employment and the nature of the employee’s duties.

Thus, this Court's ruling in Brent School, Inc. v. Zamora is instructive: The question immediately
provoked is whether or not a voluntary agreement on a fixed term or period would be valid
where the employee "has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer." The definition seems non sequitur.
From the premise — that the duties of an employee entail "activities which are usually
necessary or desirable in the usual business or trade of the employer" — the conclusion does
not necessarily follow that the employer and employee should be forbidden to stipulate any
period of time for the performance of those activities. There is nothing essentially contradictory
between a definite period of an employment contract and the nature of the employee's duties
set down in that contract as being "usually necessary or desirable in the usual business or trade
of the employer."

The concept of the employee's duties as being "usually necessary or desirable in the
usual business or trade of the employer" is not synonymous with or identical to
employment with a fixed term. Logically, the decisive determinant in term employment
should not be the activities that the employee is called upon to perform, but the day
certain agreed upon by the parties for the commencement and termination of their
employment relationship, a day certain being understood to be "that which must
necessarily come, although it may not be known when." Seasonal employment, and
employment for a particular project are merely instances of employment in which a
period, where not expressly set down, is necessarily implied. The instant case involves
the respondent's position as dean, and comes within the purview of the Brent School
doctrine. First. The letter of appointment was clear. Respondent was confirmed as Dean of
AMA College, Parañaque, effective from April 17, 2000 to September 17, 2000. In numerous
cases decided by this Court, we had taken notice that by way of practice and tradition, the
position of dean is normally an employment for a fixed term.
Although it does not appear on record─ and neither was it alleged by any of the parties─ that
respondent, other than holding the position of dean, concurrently occupied a teaching position, it
can be deduced from the last paragraph of said letter that the respondent shall be considered
for a faculty position in the event he gives up his deanship or fails to meet AMA's
standards. Such provision reasonably serves the intention set forth in Brent School that the
deanship may be rotated among the other members of the faculty.

Second. The fact that the respondent did not sign the letter of appointment is of no moment. We
held in Brent School, to wit: Accordingly, and since the entire purpose behind the development
of legislation culminating in the present Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of the employee's right to be secure in his
tenure, the clause in said article indiscriminately and completely ruling out all written or oral
agreements conflicting with the concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has singled out: agreements
entered into precisely to circumvent security of tenure. It should have no application to
instances where a fixed period of employment was agreed upon knowingly and
voluntarily 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
where it satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless, thus, limited in its purview, the law
would be made to apply to purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and
unintended consequences.

Furthermore, in his status as dean, there can be no valid inference that he was shackled by any
form of moral dominance exercised by AMA and the rest of the petitioners.

5. Millares v. NLRC,
GR 110524, July 29, 2002

FACTS: Millares was employed by ESSO International Shipping Company LTD (ESSO) through
its local manning agency, Trans-global in November 1968 as a machinist, in 1975 he was
promoted as chief engineer until he retired in 1989.

Millares applied for leave of absence for one month which was approved by trans-global. Then
Millares wrote to the operations manager informing him of his intention to avail the optional
retirement considering that he rendered more than 20 years of service to the company. But
ESSO denied the retirement for the following grounds: (1) he was employed on a contractual
basis (2) his contract of enlistment did not provide for retirement before age of 60 and (3) he did
not comply with requirement for claiming benefits under CEIP.

On August 1989 Millares requested for an extension of his leave of absence and the crewing
manager then wrote to Millares advising him that respondent ESSO "has corrected the
deficiency in its manpower requirement specifically in the Chief Engineer rank by promoting a
First Assistant Engineer to this position as a result of (his) previous leave of absence which
expired last August 8, 1989. The adjustment in said rank was required in order to meet
manpower schedules as a result of (his) inability."

On September 26, 1989, ESSO advised MIllares that in view of his absence without leave,
which is equivalent to abandonment of his position, he had been dropped from the roster of
crew members effective September 1, 1989.

On the other hand. Lagda was employed by ESSO as a wiper and was promoted as Chief
engineer until his last COE expired in 1989. Lagda applied for a leave of absence which was
approved by Trans-global and advised him to report for re-assignment.

Lagda wrote to ESSO through the Trans-global president informing him of his intention to avail
of the optional retirement plan in view of his 20 years of service. It was denied by Trans-global
on the same grounds as with Millares. He requested to extend his leave of absence and was
approved but later informed by ESSO that in view of his "unavailability for contractual sea
service" he had been dropped from the roster of crew members.

Millares and Lagda filed a complaint-affidavit before POEA for illegal dismissal and non-
payment of employee benefits against ESSO and Trans-global. POEA dismissed the complaint
for lack of merit, which was affirmed by NLRC. Petitioners appealed the decision to the NLRC
dismissing petitioners' appeal and denying their motion for new trial for lack of merit. Hence, the
instant petition for certiorari.

ISSUE: Whether or not the petitioners are regular or contractual employees.

RULING: Contractual employees.

Petitioners contends that they performed activities which are usually necessary to the usual
business or trade of the company and the fact that they served for 20 years already is an
express acknowledgment that they are regular employees by the private respondents.
Respondents invoke that under the POEA rules and regulation governing overseas employment
seafarers are not regular employees based on international maritime practice. While intervenor
FAME avers that our decision of not reconsidered will have negative consequences on the
manning industry in the Philippines.

The contention of the petitioner is untenable, it is clear that seafarers are considered contractual
employees. They can not be considered as regular employees under Article 280 of the Labor
Code. Their employment is governed by the contracts they sign everytime 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 whose employment
has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of 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. 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.

From all the foregoing, we hereby state that petitioners are not considered regular or permanent
employees under Article 280 of the Labor Code. Petitioners' employment have automatically
ceased upon the expiration of their contracts of enlistment (COE). Since there was no dismissal
to speak of, it follows that petitioners are not entitled to reinstatement or payment of separation
pay or backwages, as provided by law.

With respect to the benefits under the Consecutive Enlistment Incentive Plan (CEIP), we hold
that the petitioners are still entitled to receive 100% of the total amount credited to him under the
CEIP. Considering that we have declared that petitioners are contractual employees, their
compensation and benefits are covered by the contracts they signed and the CEIP is part and
parcel of the contract.
In our March 14, 2000 Decision, we, however, found that petitioners Millares and Lagda were
not guilty of "abandonment" or "unavailability for contractual sea service," as we have stated:
The absence of petitioners was justified by the fact that they secured the approval of
private respondents to take a leave of absence after the termination of their last
contracts of enlistment. Subsequently, petitioners sought for extensions of their
respective leaves of absence. Granting arguendo that their subsequent requests for
extensions were not approved, it cannot be said that petitioners were unavailable or had
abandoned their work when they failed to report back for assignment as they were still
questioning the denial of private respondents of their desire to avail of the optional early
retirement policy, which they believed in good faith to exist.

Neither can we consider petitioners guilty of poor performance or misconduct since they were
recipients of Merit Pay Awards for their exemplary performances in the company.

Partially granted. Petitioners reinstated with modification.

6. Unica v. Anscor Swire Ship Management Corp.

GR 184318, Feb. 12, 2014

FACTS: Respondent Anscor Swire Ship Management Corporation is a manning agency.

Petitioner was employed by the respondent under various contracts. In his last contract,
petitioner was deployed for a period of nine (9) months from January 29, 2000 to October 25,
2000. However, since the vessel was still at sea, petitioner was only repatriated on November
14, 2000, or twenty (20) days after the expiration of his contract of employment. Petitioner
averred that since he was allowed to stay in the vessel for another twenty (20) days, there was
an implied renewal of his contract of employment. Hence, when he was repatriated on
November 14, 2000 without a valid cause, he was illegally dismissed.

Due to the foregoing, petitioner filed a case against the respondent for illegal dismissal,
payment of retirement, disability and medical benefits, separation and holiday pay. In its
defense, respondent argued that petitioner was hired for a fixed period, the duration of which
depends upon the mutual agreement of the parties. Petitioner's employment was, therefore, co-
terminus with the term of his contract. Hence, the claim of petitioner that he was illegally
dismissed must fail, because he was repatriated due to the completion of the term of his
contract.

The Labor Arbiter (LA) ruled in favor of the petitioner. Since petitioner was not repatriated at the
expiration of his contract on October 25, 2000, and was allowed by respondent to continue
working on board its vessel up to November 14, 2000, his contract with respondent was
impliedly renewed for another nine months. The LA directed respondent to pay petitioner his
salary for the unexpired portion of his impliedly renewed contract, his medical benefits and
attorney's fees.
Respondent appealed to the NLRC. The NLRC affirmed with modification the LA's decision. The
NLRC, however, deleted the award of medical benefits and reduced the amount of attorney's
fees.

Respondent filed a Petition for Certiorari with the CA. The CA ruled that there was no implied
renewal of contract and the 20 days extension was due to the fact that the ship was still at sea.
Petitioner filed a motion for reconsideration, which was denied by the CA Hence, the present
petition.

ISSUE: Was there an implied renewal of petitioner's contract of employment with respondent?

RULING: (TYPE OF EMPLOYMENT - CONTRACTUAL EMPLOYEE)

In the case at bar, although the petitioner's employment contract with respondent ended on
October 25, 2000 and he disembarked only on November 14, 2000 or barely 20 days after the
expiration of his employment contract, such late disembarkation was not without valid reason.
Respondent could not have disembarked petitioner on the date of the termination of his
employment contract, because the vessel was still in the middle of the sea. Clearly, it was
impossible for the petitioner to safely disembark immediately upon the expiration of his contract,
since he must disembark at a convenient port. Thus, the petitioner's stay in the vessel for
another 20 days should not be interpreted as an implied extension of his contract. A
seaman need not physically disembark from a vessel at the expiration of his employment
contract to have such contract considered terminated.

It is a settled rule that seafarers are considered contractual employees. Their

employment is governed by the contracts they sign everytime they are rehired and their
employment is terminated when the contract expires. Their employment is contractually
fixed for a certain period of time. Thus, when the petitioner's contract ended on October 25,
2000, his employment was deemed automatically terminated, there being no mutually-agreed
renewal or extension of the expired contract.

7. Rowell Industrial Corporation v. Court of Appeals,

G.R. No. 167714, [March 7, 2007]

Petitioner Rowell Industrial is engaged in manufacturing tin cans for packaging consumer
products. Respondent Joel Taripe was employed by petitioner as a “rectangular power press
machine operator”. Taripe alleged that upon employment, he was made to sign a document,
which was not fully explained to him but was a condition for him to be hired and for which he
was not given a copy. Apparently, the contract of employment was only good for a period of five
(5) months unless it is renewed by mutual consent. Taripe was dismissed and subsequently he
filed a complaint for regularization and holiday pay.

Petitioner RIC, claims that Taripe was a contractual employee, he was hired only to meet the
increase in demand for packaging materials for the Christmas season and to build up stock
levels for the early part of the year and that his employment contract has expired. Hence, Taripe
has knowledge about being employed by contract contrary to his allegation that the document
he was signing was not explained to him.

The LA dismissed his complaint. The NLRC reversed the LA. The CA affirmed the resolution of
the NLRC.

ISSUE: WoN Taripe is are regular or contractual employee

RULING: Regular employee.

Taripe’s work as a rectangular power press machine operator is UND to the principal business
of the company. The purported contract of employment providing that Taripe was hired as
contractual employee for five (5) months only, cannot prevail over the undisputed fact that he
was hired to perform the function of power press operator, a function necessary or desirable in
petitioner’s business of manufacturing tin cans.

Petitioner’s contention that the four (4) months length of service of Taripe did not grant him a
regular status is inconsequential, considering that length of service assumes importance only
when the activity in which the employee has been engaged to perform is not necessary or
desirable to the usual business or trade of the employer.

As stated in the contract: “That my employment shall be contractual for the period of five (5)
months which means that the end of the said period, I can (sic) discharged unless this contract
is renewed by mutual consent or terminated for cause.”

It cannot be denied that the employment contract signed by respondent Taripe did not mention
that he was hired only for a specific undertaking, the completion of which had been determined
at the time of his engagement. The said employment contract neither mentioned that
respondent Taripe's services were seasonal in nature and that his employment was only for the
duration of the Christmas season as purposely claimed by petitioner. What was stipulated in the
said contract was that respondent Taripe's employment was contractual for the period of five
months. Petitioner RIC failed to substantiate such claim with any other evidence. Petitioner RIC
did not present any evidence which might prove that respondent Taripe was employed for a
fixed or specific project or that his services were seasonal in nature.

Also, petitioner RIC failed to controvert the claim of respondent Taripe that he was made to sign
the contract of employment, prepared by petitioner RIC, as a condition for his hiring. Such
contract in which the terms are prepared by only one party and the other party merely affixes his
signature signifying his adhesion thereto is called contract of adhesion. It is an agreement in
which the parties bargaining are not on equal footing, the weaker party's participation being
reduced to the alternative "to take it or leave it."

As a rank-and-file employee, Taripe can hardly be on equal terms with petitioner as ‘almost
always, employees agree to any terms of employment just to get employed’.
 8. FVR Skills and Services Exponents, Inc. (SKILLEX), et al. v. Jovert Seva, et al.
(G.R. No. 200857, October 22, 2014)

FACTS: 28 respondents were employees of Skillex, an independent contractor engaged in the

business of providing janitorial and other manpower services. Some respondents had already
been under the petitioner’s employ since 1998.

Skillex entered into a Contract of Janitorial Service with Robinsons Land Corp., wherein they
agreed that Skillex shall supply janitorial, manpower and sanitation services to Robinsons Place
Ermita for a period of 1 year, from Jan 1, 2008 to Dec 31, 2008. Respondents were deployed to
Robinsons.

Halfway through the service contract, the petitioner asked the respondents to execute individual
contracts which stipulated that their respective employment shall end on December 31, 2008,
unless earlier terminated. Respondents were also threatened that they would not be given their
salaries if they would not sign the contracts.

The petitioner and Robinsons no longer extended their contract of janitorial services.
Respondents were dismissed by petitioner Skillex as they were project employees whose
duration of employment was dependent on the service contract with Robinsons.

Respondents filed a complaint for illegal dismissal, arguing that they were not project
employees, but regular employees who may only be dismissed for just or authorized causes.
The LA ruled in favor of Skillex and held that respondents were not regular employees, but
granted the respondents’ money claims (wage differential pay, 13 th month differential pay and
holiday pay)

The NLRC reversed the LA’s ruling and held that they were regular employees. The CA
dismissed the petitioner’s certiorari petition and affirmed the NLRC’s decision.

ISSUE: W/N the CA erred in ruling that the respondents were regular employees and that they
had been illegally dismissed

RULING: (TYPE OF EMPLOYMENT - REGULAR EMPLOYEES)

No. The respondent’s line of work in this case is UND to the principal business of the petitioner.

The court ruled that the employees were illegally dismissed. The respondents’ work as
janitors, service crews and sanitation aides, are necessary or desirable to the
petitioner’s business of providing janitorial and manpower services to its clients as an
independent contractor. Also, the respondents had already been working for the
petitioner as early as 1998. Even before the service contract with Robinsons, the
respondents were already under the petitioner's employ. They had been doing the same
type of work and occupying the same positions from the time they were hired and until
they were dismissed in January 2009.
The primary standard in determining regular employment is the reasonable connection
between the particular activity performed by the employee and the employer's business or
trade. This connection can be ascertained by considering the nature of the work performed
and its relation to the scheme of the particular business, or the trade in its entirety. Guided by
this test, we conclude that the respondents' work as janitors, service crews and sanitation
aides, are necessary or desirable to the petitioner's business of providing janitorial and
manpower services to its clients as an independent contractor.

The petitioner did not present any evidence to refute the respondents' claim that from the time
of their hiring until the time of their dismissal, there was no gap in between the projects where
they were assigned to. The petitioner continuously availed of their services by constantly
deploying them to its clients.

The timing of the execution of the respondents’ respective employment contracts is indicative of
the petitioner’s calculated plan to evade the respondents’ right to security of tenure. If the
petitioner really intended the respondents to be project employees, then the contracts should
have been executed right from the time of hiring, or when the respondents were first assigned to
Robinsons, not when the petitioner’s service contract was winding up.·Under Article 1390 of the
Civil Code, contracts where the consent of a party was vitiated by mistake, violence,
intimidation, undue influence or fraud, are voidable or annullable. The threat of non-payment of
the respondents’ salaries clearly to intimidation. The employment contracts were voidable.

Also, the respondents are entitled for the rights and benefits even though they were assigned as
contractual employees since, Department Order (DO) 18-02 - grants contractual employees all
the rights and privileges due a regular employee, including the following:
a) safe and healthful working conditions;
b) labor standards such as service incentive leave, rest days, overtime pay, holiday pay,
13th month pay and separation pay;
c) social security and welfare benefits;
d) self-organization, collective bargaining and peaceful concerted action; and
e) security of tenure

Having already determined that the respondents are regular employees and not project
employees, and that the respondents’ belated employment contracts could not be given any
binding effect, the Court ruled that the respondents were illegally dismissed. The respondents’
work as janitors, service crews and sanitation aides, are necessary or desirable to the
petitioner’s business of providing janitorial and manpower services to its clients as an
independent contractor.

Bustamante v. National Labor Relations Commission

G.R. No. 111651, [March 15, 1996]

FACTS: Respondent company is engaged in the business of producing high grade bananas in
its plantation in Davao del Norte. Petitioners were employed as laborers and harvesters while
petitioner Sabu Lamaran was employed as a laborer and sprayer in respondent company’s
plantation. All the petitioners signed contracts of employment for a period of six (6) months from
2 January 1990 to 2 July 1990, but they had started working sometime in September 1989.
Previously, they were hired to do the same work for periods lasting a month or more, from 1985
to 1989. Before the contracts of employment expired on 2 July 1990, petitioners’ employments
were terminated on the ground of poor performance on account of age, as not one of them was
allegedly below forty (40) years old.

Petitioners filed a complaint for illegal dismissal. The LA rendered a decision in favor of the
petitioner and ruled that they were illegally dismissed. The NLRC affirmed the decision of the
LA.

ISSUE: whether or not petitioners are regular employees

RULING: SC ruled in favor of the petitioners: they are regular employees and was
illegally dismissed.

The law distinguishes between the two (2) kinds of employees to protect the interests of labor.
Thus, in the case of Baguio Country Club Corporation vs. NLRC, the Court declared: "Its
language evidently manifests the intent to safeguard the tenurial interest of the worker who may
be denied the rights and benefits due a regular employee by virtue of lopsided agreements with
the economically powerful employer who can maneuver to keep an employee on a casual status
for as long as convenient".

In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same
kind of work they were hired to perform in 1989. Both the labor arbiter and the respondent
NLRC agree that petitioners were employees engaged to perform activities necessary in the
usual business of the employer. As laborers, harvesters or sprayers in an agricultural
establishment which produces high grade bananas, petitioners' tasks are indispensable to the
year-round operations of respondent company. This belies the theory of respondent company
that the employment of petitioners was terminated due to the expiration of their probationary
period in June 1990. If at all significant, the contract for probationary employment was utilized
by respondent company to deny petitioners their status as regular employees and to evade
paying them the benefits attached to such status. Some of the petitioners were hired as far back
as 1985, although the hiring was not continuous. They were hired and re-hired in a span of from
two to four years to do the same type of work which conclusively shows the necessity of
petitioners' service to the respondent company's business. Petitioners have, therefore, become
regular employees after performing activities which are necessary in the usual business of their
employer. But, even assuming that the activities of petitioners in respondent company's
plantation were not necessary or desirable to its business, we affirm the NLRC’s finding
that all of the petitioners have rendered non-continuous or broken service for more than
one (1) year and are consequently considered regular employees.

We do not sustain public respondent's theory that private respondent should not be made to
compensate petitioners for backwages because its termination of their employment was not
made in bad faith. The act of hiring and re-hiring the petitioners over a period of time without
considering them as regular employees evidences bad faith on the part of private respondent.
The public respondent made a finding to this effect when it stated that the subsequent rehiring
of petitioners on a probationary status "clearly appears to be a convenient subterfuge on the
part of management to prevent complainants (petitioners) from becoming regular employees."