REGULAR VS.

SEASONAL EMPLOYEES

1. FORTUNATO MERCADO, SR. vs. NLRC, STO. NIÑO REALTY, INCORPORATED

G.R. No. 79869 September 5, 1991

Summary: 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. Thus, Petitioners did not acquire the status of regular employees.

Facts: Petitioners were agricultural workers for a sugar plantation. Their employment with the
private respondent was seasonal which means their services are usually utilized during the
planting season and during harvest season of sugar cane. Petitioners filed 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 against
private respondents. Petitioners alleged in their complaint that they were agricultural workers
utilized by private respondents in all the agricultural phases of work on the sugar land of the
respondents and that they worked in the farm since 1949 to 1979. 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.

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 sugarcane production
business of the private respondents citing Art. 280 of the Labor Code specifically on paragraph
2.

The Labor Arbiter, as affirmed by the NLRC, 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.

Issue: Whether or not petitioners are regular and permanent farm workers and therefore
entitled to the benefits which they pray for? (Seasonal Ee)

Held: Seasonal Ee.

The Court held, petitioners contention that the provision in the second paragraph of Art.
280’s applicability to their case and should have been considered as regular employees
by virtue of said provision is without merit. The first paragraph of Art. 280 of the Labor Code
answered the question of who employees are. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular where he is engaged in necessary
or desirable activities in the usual business or trade of the employer, except for project
employees.

A project employee has been defined to be one whose employment has been fixed for a
specific project or undertaking, the completion or termination of which has been determined at
the time of the engagement of the employee, or where the work or service to be performed
is seasonal in nature and the employment is for the duration of the season as in the
present case.

The 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. The SC ruled that they are 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. Thus, Petitioners did not acquire the
status of regular employees.

2. UNIVERSAL ROBINA SUGAR MILLING CORP. (URSUMCO) V. ACIBO

G.R. No. 186439, January 15, 2014

FACTS: URSUMCO hired employees on different capacities, i.e., drivers, crane operators,
bucket hookers, welders, mechanics, laboratory attendants and aides, steel workers, laborers,
carpenters and masons, among others. At the start of their respective engagements, the
employees signed contracts of employment for a period of one (1) month or for a given season.
URSUMCO repeatedly hired them to perform the same duties and, for every engagement,
required the latter to sign new employment contracts for the same duration of one month or a
given season.

ISSUE: Are the employees considered regular employees? (YES)

HELD: Regular Seasonal Ee.

However, the designation must be qualified. They are regular seasonal employees.
To exclude the asserted “seasonal” employee from those classified as regular employees, the
employer must show that: (1) the employee must be performing work or services that are
seasonal in nature; and (2) he had been employed for the duration of the season.

Hence, when the “seasonal” workers are continuously and repeatedly hired to perform
the same tasks or activities for several seasons or even after the cessation of the
season, this length of time may likewise serve as a badge of regular employment. Even
though denominated as “seasonal workers”, if these workers are called to work from time to
time and are only temporarily laid off during the off-season, the law does not consider them
separated from the service during the off-season period. The law simply considers these
seasonal workers on leave until re-employed.

3. Abasolo v. NLRC,
GR 118475, Nov. 29, 2000

FACTS: The private respondent La Union Tobacco (Lutorco), is engaged in buying/processing

of tobacco and its by-products. The petitioners worked in respondent company, but work was
interrupted when Tabacalera took over the Lutorco operations due to alleged losses. Aggrieved,
the petitioners filed a complaint for separation pay and dismissal. The respondent contended
that it is exempt from payment of separation pay and denied that there was termination of
employees' services.
The Labor Arbiter dismissed the complaint and held that the petitioners are not entitled to
separation benefits since Lutorco ceased operations due to serious business losses. The NLRC
affirmed said ruling.

ISSUE: W/N the petitioners are seasonal workers

RULING: No, the petitioners are considered regular and seasonal employees. They
performed services necessary and indispensable to Lutorco's business. The nature of one's
employment does not depend solely on the will or word of the employer nor on the procedure of
hiring and manner of designating the employee but on the nature of the activity to be performed
considering the employer's nature of business and the duration and scope of work to be done.

As held in previous decisions, seasonal workers are those 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.

4.Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade,

GR 196936, July 2, 2014

FACTS: When union (respondents) was certified as the collective bargaining representative,
petitioners refused to sit down w/ the union for the purpose of entering into a CBA.

The workers including complainants were not given work for more than 1 month. In protest, they
staged a strike w/c was however settled upon the signing of a MOA which contained a list of
those considered as regular employees for the payroll. Subsequently, alleging that
complainants failed to load some wagons, petitioners reneged on its commitment to bargain
collectively & employed all means including the use of private armed guards to prevent the
organizers from entering the premises.

No work assignments were given to complainants w/c forced the union to stage a strike. Due to
conciliation efforts by the DOLE, another MOA was signed by the parties & they met in a
conciliation meeting. When petitioners again reneged on its commitment, complainants filed a
complaint. Petitioner accused respondents of refusing to work & being choosy in the kind of
work they have to perform.

The NLRC ruled that petitioners were guilty of Unfair Labor Practice & that the respondents
were illegally dismissed.

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 & were therefore still employed by
petitioners.

ISSUE: W/N the respondents are seasonal employees.

RULING: No, they are regular seasonal 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 proves the existence of the
first, but not of the second, condition. The fact that respondents 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. If the employee has been performing the job for at
least a year, even if the performance is not continuous & merely intermittent, the law
deems the repeated & 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 w/ respect to such activity & while such activity exists.
Seasonal workers who are called to work from time to time & are temporarily laid off during off-
season are not separated from service in said period, but merely considered on leave until re-
employed.

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.

5. Ampeloquio v. Jaka Distribution, Inc.,

GR 196936, July 2, 2014

FACTS: Ampeloquio is a reinstated employee of respondent Jaka Distribution, Inc. (JAKA)

formerly RMI. Ampeloquio filed a complaint for illegal dismissal against RMI before the NLRC.
Subsequently, the LA found RMI guilty of illegal dismissal.

Ampeloquio resumed work as merchandiser at JAKA and reported at JAKA’s outlets within
Metro Manila, Makati and Alabang. He received a daily wage of P252.00, without meal and
transportation allowance. Ampeloquio was transferred to Lucena City and subsequently to San
Pablo City.

Ampeloquio wrote JAKA reiterating his request for salary adjustment and payment of benefits.
Ampeloquio based his request on what other merchandisers of JAKA received. Because of the
discrepancy in wages, Ampeloquio filed anew before the NLRC, a complaint for underpayment
of wages, COLA, non-payment of meal and transportation allowances. LA granted Ampeloquio’s
complaint.

The NLRC modified the amounts ordered by the LA. JAKA’s contention that Ampeloquio is not
entitled to reimbursement of transportation expenses from the latter’s house to the outlet where
he was assigned and back is impressed with merit as JAKA as reflected in a submitted copy of
their policies. Ampeloquio filed a petition for certiorari before the CA and the latter dismissed
Ampeloquio’s petition.

ISSUE: WoN Apeloquio is only entitled to wages or salary scale that governs the minimum
wage rate then prevailing or his actual daily wage rate (Seasonal Ee)

RULING: He is entitled to receive a salary under the same terms and conditions
prevailing prior to his dismissal. Ampeloquio is correct in asserting that he is a senior
employee compared to the other merchandisers whom he himself designates as casual or
contractual merchandisers. He is likewise senior to other regular employees subsequently hired
by JAKA, specifically two regular messenger employees which Ampeloquio claims
receive wages higher than what he is receiving from JAKA.

He is not entitled to the same terms and conditions of employment as that which was
offered to the other regular employees (not merchandisers) subsequently hired by JAKA.

JAKA's decision to grant or withhold certain benefits to other employees is part of its
management prerogative as a function of an employer's constitutionally protected right to
reasonable return on investments.

Ampeloquio cannot likewise compare his wages to that received by "casual or

contractual merchandisers" or merchandisers who are admittedly outsourced from
manpower agencies or those who are considered seasonal employees hired only during
peak season when JAKA is in need of extra merchandisers.

To say the least, these merchandisers are not employees of JAKA, but of a service provider
company which has a service contract with JAKA. The merchandisers in this case simply
perform the work at JAKA's outlets, wearing uniforms approved by JAKA but provided by the
service company who is actually their employer. There is no employer-employee relationship
between JAKA and these merchandisers.

(In relation to the topic)

In the same vein, seasonal employees hired only for the peak season do not have the
same status as regular employees and do not receive amounts considered as part of a
compensation and benefits scheme for regular employees. These seasonal employees
only receive payment for work rendered during the period for which they were hired, i.e.,
peak season. The wages and other monies seasonal employees may receive for the
duration of their limited employment period constitute bulk or wholesale payment for
services rendered.

Seasonal employment involves work or service that is seasonal in nature or lasting for
the duration of the season. Seasonal employees differ from those classified as regular
employees, in that: (1) the employee must be performing work or services that are
seasonal in nature; and (2) he had been employed for the duration of the season.

The phrase without loss of seniority rights applies with practical and real effect to Ampeloquio
upon his retirement because he will reach earlier than other regular employees of JAKA the
required number of years of service to qualify for retirement.

In all, the labor tribunals were right in using as guidepost the existing statutory minimum wages
and COLA during the three (3) year prescriptive period within which Ampeloquio can make his
money claims.

We are not unaware that reinstatement is the rule and such covers reinstatement to the same or
substantially equivalent position without loss of seniority rights and privileges.

REGULAR VS. CASUAL EMPLOYEES

6. Capule v NLRC
GR 90653, Nov. 12, 1990
FACTS: Private respondent company is engaged in the manufacture of cultured milk which is
sold under the brand name "Yakult."

Petitioners were hired to cut cogon grass and weeds at the back of the factory building used by
private respondents. They were not required to work on a fixed schedule, and they worked on
any day of the week on their own discretion and convenience. The services of the petitioners
were terminated by the private respondent on July 13, 1987.
Petitioners filed a complaint for illegal dismissal with the NLRC. The latter rendered its decision
in favor of petitioners, ruling that they were illegally dismissed and ordered their reinstatement
with full back wages and without loss of seniority rights.
ISSUE: Whether or not petitioners are regular employees of respondent
RULING: No, they are casual employees. The usual business or trade of private respondents
is the manufacture of cultured milk.
The cutting of the cogon grasses in the premises of its factory is hardly necessary or
desirable in the usual business of the private respondents. Thus, petitioners are casual
employees who cannot be considered regular employees under Article 280 of the Labor Code.
Nevertheless, they may be considered regular employees if they have rendered services
for at least one (1) year when, as in this case, they were dismissed from their employment
before the expiration of the one-year period. They cannot lawfully claim that their dismissal was
illegal. Indeed, private respondents had shown that the services of the petitioners were
found to be unsatisfactory, so, their termination.

7. San Miguel Corp. v. National Labor Relations Commission,

G.R. No. 125606, [October 7, 1998]

FACTS: Private respondent was hired by petitioner as helper/brickler for a specific project in
November 1990, the repair and upgrading of furnace C at its Manila Glass Plant. His contract of
employment provided that temporary employment was only for a period of approximately 4
months.

The respondent completed the repair and upgrading of furnace C which resulted in the
termination of his services and employment. For the 2nd time, the respondent was hired again
for a specific job or undertaking, which involved the draining/cooling down of furnace F and the
emergency repair of furnace E. The project was only for a period of 3 months. After the
completion of the tasks, his services were terminated in July 1991.

Subsequently, the complainant was dismissed. The private respondent filed a complaint for
illegal dismissal.

The LA ruled that the private respondent was a project employee and that the position of helper
does not fall within the classification of regular employees.

The NLRC reversed the decision of the LA and ruled that the Respondents scheme of
subsequently re-hiring complainant is one way of doing violence to the employees constitutional
right to security of tenure under which even employees under probationary status are amply
protected. The petitioner then moved for reconsideration.

ISSUE: Whether or not the respondent is a project or a fixed period employee.

RULING: The respondent is a project employee.

An employment shall be deemed to be casual if it is not covered by Art. 280 of LC: 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.
Note that the plant where the private respondent was employed for only seven months is
engaged in the manufacture of glass, an integral component of the packaging and
manufacturing business of petitioner. The process of manufacturing glass requires a furnace,
which has a limited operating life. Petitioner resorted to hiring project or fixed term employees in
having said furnaces repaired since said activity is not regularly performed. Said furnaces are to
be repaired or overhauled only in case of need and after being used continuously for a varying
period of five (5) to ten (10) years.
Upon completion of the undertaking, private respondent's services were terminated. A few days
later, two of the petitioner's furnaces required "draining/cooling down" and "emergency repair".
Private respondent was again hired to help in the new undertaking, which would take
approximately three (3) months to accomplish. Upon completion of the second undertaking,
private respondent's services were likewise terminated. He was not hired a third time, and his
two engagements taken together did not total one full year in order to qualify him as an
exception to the exception falling under the cited proviso in the second paragraph of Art. 280 of
the Labor Code.
Clearly, private respondent was hired for a specific project that was not within the regular
business of the corporation. For petitioner is not engaged in the business of repairing furnaces.
Although the activity was necessary to enable petitioner to continue manufacturing glass, the
necessity therefor arose only when a particular furnace reached the end of its life or operating
cycle. Or, as on the second undertaking, when a particular furnace required an emergency
repair. In other words, the undertakings where private respondent was hired primarily as
helper/bricklayer have specified goals and purpose which are fulfilled once the
designated work was completed. Moreover, such undertakings were also identifiably
separate and distinct from the usual, ordinary or regular business operations of
petitioner, which is glass manufacturing. These undertakings, the duration and scope of
which had been determined and made known to private respondent at the time of his
employment clearly indicated the nature of his employment as a project employee. Thus,
his services were terminated legally after the completion of the project.
8. KILUSAN-OLALIA v. Drilon, GR Nos. 77629 and 78791, May 9, 1990
FACTS: Kimberly-Clark Philippines, Inc. executed a three-year collective bargaining agreement
with United Kimberly-Clark Employees Union-Philippine Transport and General Workers'
Organization which expired eventually. Within the 60-day freedom period prior to the expiration
of and during the negotiations for the renewal of the CBA, some members of the bargaining unit
formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and
Nationalism-Organized Labor Association in Line Industries and Agriculture.
Thereafter, KILUSAN-OLALIA filed a petition for certification election. KIMBERLY and
UKCEU-PTGWO objected to the inclusion of the contractual workers whose employment with
KIMBERLY was coursed through an independent contractor, Rank Manpower Company, as
among the qualified voters. Marasigan, who was handling the certification election case issued
an order declaring the regular rank-and-file laborers/employees of the respondent company;
casuals who have worked at least six (6) months; Contractual employees who are allegedly in
the employ of an independent contractor and who have also worked for at least six (6) months.
During the pre-election conference, 64 casual workers were challenged by KIMBERLY on the
ground that they are not employees of KIMBERLY but of RANK. After the elections, Kimberly
Union won over KILUSAN-OLALIA by 20 votes.
Regarding the status of the 64 employees in relation to the certification election, LA held
that the other casual employees not performing janitorial and yard maintenance services were
deemed labor-only contractual and since labor-only contracting is prohibited, such employees
attained the status of regular employees. Since the members were only considered regular at
the time of the decision, their votes were not re-considered as regards the election. The winning
union and company executed a CBA KIMBERLY-OLALIA filed a TRO on the CBA and included
the question of the status of the 64 members in question.
ISSUE: Whether or not the 64 employees are regular employees
RULING: Yes, they are regular employees. The individual petitioners herein who have
been adjudged to be regular employees fall under the second category of Article 280 of
the Labor Code which is 2) Those who have rendered at least one year of service,
whether continuous or broken with respect to the activity in which they are employed.
These are the mechanics, electricians, machinists, machine shop helpers, warehouse helpers,
painters, carpenters, pipefitters and masons.
It is not disputed that these workers have been in the employ of KIMBERLY for more
than one year at the time of the filing of the petition for certification election by
KILUSANOLALIA.
While the actual regularization of these employees entails the mechanical act of issuing regular
appointment papers and compliance with such other operating procedures as may be adopted
by the employer, it is more in keeping with the intent and spirit of the law to rule that the status
of regular employment attaches to the casual. The law is explicit. As long as the employee
has rendered at least one year of service, he becomes a regular employee with respect to
the activity in which he is employed. The law does not provide the qualification that the
employee must first be issued a regular appointment or must first be formally declared
as such before he can acquire a regular status. Obviously, where the law does not
distinguish, no distinction should be drawn.
9. San Miguel v. Teodosio,
GR 163033, Oct. 2, 2009

FACTS: Teodisio was hired by SMC as casual forklift operator in Bacolod city brewery. He
continuously worked until a year after he was “asked to rest” for a while. Month after, Teodisio
was rehired to the same position and served for 5 to 6 months and again “asked to rest.” After 3
weeks he was again rehired, and he continued to work. On Aug 1993 he was made to sign an
“Employment with a fixed Period” contract by SMC where it was stipulated that Teodisio’s
employment would be from Aug 7, 1993 to Aug 30, 1995 or upon cessation of the
instability/fluctuation on the market demand, whichever comes first.” Teodisio worked at the
plant without interruption.

Teodisio was transferred to the bottling section as a case piler. In a letter, Teodisio formally
informed SMC of his opposition to the transfer. Teodisio informed SMC that he was applying
for the vacant position of bottling crew because he wanted to become a regular
employee of SMC. SMC notified Teodisio that his employment shall be terminated in
compliance with the Employment with a Fixed period contract and his termination was due to
the reorganization and streamlining operation.

Teodisio filed a complaint against SMC before the NLRC for illegal dismissal and
underpayment of wages and other benefits. LA dismissed the complaint for lack of merit.
The said contract of employment with fixed period was a legitimate exercise of management
prerogative and termination is in accordance with employment contract. Also, he is not a regular
employee, therefore not entitled to benefit under CBA. The NLRC affirmed the LA’s decision.

CA granted the petition to annul and set aside the decision of NLRC. CA ratiocinated that
the Employment with a Fixed period contract was just a scheme of SMC to circumvent the
respondent’s security of tenure and concluded that before Teodisio signed the employment
contracts he already attained the status of a regular employee. SMC filed for MR but was
denied. Hence, this petition.

ISSUE: W/N Teodisio was a regular employee? YES

HELD: Under Art. 280, Labor Code, there are 2 kinds of regular employees: 1) regular
employees by nature of work – refers to those employees who perform a particular activity
which is necessary or desirable in the usual business or trade of the employer, regardless of
their length or service 2) regular employees by years of service – refers to employees who have
been performing the job, regardless of the nature, for at least a year, even if 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.

The court is convinced that Teodisio has attained the status of regular employee long
before he executed the employment contract with a fixed period. Teodisio was rehired for
several periods. When he signed the Employment with fixed period contract. He has already
been in the employment of SMC for 23 months. The labor code provides that a casual
employee shall be considered as regular employee if said casual employee has rendered at
least one year of service regardless of the fact that such service may be continuous or broken.
The nature of Teodisio’s work is necessary for business in which SMC is engaged. SMC
maintains a brewery while Teodisio is a forklift operator whose task is to lift and transfer pallets
and pile them from the bottling section to piling area. SMC also wanted the court to believe that
its full automation o the brewery and new marketing distribution systems resulted the reduction
of personnel and termination of employees with a fixed period contract. However after
installation of automated palletizers, SMC did not leave the position of forklift operator vacant.
This shows the necessity and indispensability of hiring a forklift operator to the business of
SMC.

Teodisio is a regular employee of SMC and employment contract with a fixed period was
meant only to circumvent respondent’s right to security of tenure and therefore invalid.
In the case of Brent School, Inc. v. Zamora, the court made it clear that a contract of
employment stipulating a fixed term is invalid if it can be shown that it was executed with
intention of circumventing an employee’s right to security of tenure and should thus be ignored.
Moreover, that the period that was imposed to preclude the acquisition of tenurial security by the
employee should struck down as contrary to law, morals, good customs, public order and public
policy. Teodisio having gained a status of a regular employee is entitled to security of
tenure and could only be dismissed on just or authorized causes after he has been
accorded due process.

The termination of respondents employment based on the fixed contract and giving
Teodisio opportunity to become a regular employee when he was transferred to bottling
section do not constitute just or authorized cause. The burden of proving that the quitclaim
or waiver was voluntarily entered rests on the employer. SMC failed to discharge this burden, in
effect Teodisio did not waive his right to question his dismissal and claims to employment
benefits.
10. Romares v. NLRC
G.R. No. 122327, [August 19, 1998]

FACTS: Artemio Rosares was hired by PILMECO as a mason for its line of business in the
production of flour products. He rendered services for PILMICO from 1989 to 1993, but his
employment was not continuous. His employment contracts ranged from 4-6 months with
the express statement that his job would terminate at the end of the period. Artemio filed a
case for illegal dismissal.

LA ruled that having rendered a total service of more than one (1) year and by operation of law,
complainant has become a regular employee of respondent. PILMICO argued that Artemio
was merely a contractual employee, as such Artemio’s employment ended when the period
stipulated for employment ended. On appeal, the NLRC set aside the decision of the LA and
ruled that the employee cannot be considered a regular employee if his employment is for a
specific project or undertaking and for a fixed period.

ISSUE: Whether or not the petitioner is a regular employee

RULING: Yes, the petitioner is a regular employee.
In determining the status of petitioner as a regular employee, reference is made to
Article 280 of the Labor Code, as amended. Thus, the two kinds of regular employees are (1)
those who are engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer; and (2) those casual employees who have rendered at
least one year of service, whether continuous or broken, with respect to the activity in
which they are employed.
Construing the aforesaid provision, the phrase "usually necessary or desirable in the usual
business or trade of the employer" should be emphasized as the criterion in the instant case.
Facts show that petitioner's work with PILMICO as a mason was definitely necessary and
desirable to its business. PILMICO cannot claim that petitioner's work as a mason was
entirely foreign or irrelevant to its line of business in the production of flour, yeast, feeds
and other flour products.
To expound further, granting arguendo that petitioner was regarded as a temporary employee,
he had been converted into a regular employee by virtue of the proviso in the second
paragraph of Article 280 for having worked with PILMICO for more than one (1) year. In
rehiring petitioner, employment contracts ranging from two (2) to three (3) months with an
express statement that his temporary job/service as mason shall be terminated at the end of the
said period or upon completion of the project was obtrusively a convenient subterfuge utilized to
prevent his regularization. It was a clear circumvention of the employee's right to security
of tenure and to other benefits. It likewise evidenced bad faith on the part of PILMICO.
Therefore, the contract shall be struck down or disregarded as contrary to public policy or
morals.
REGULAR VS. FIXED TERM EMPLOYEES

11. Brent School, Inc. v. Alegre, GR 48494, Feb. 5, 1990

FACTS: Private respondent Alegre was engaged as athletic director by petitioner Brent
School. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18,
1971, the date of execution of the agreement, to July 17, 1976. Thereafter, 3 subsequent
subsidiary agreements reiterated the same terms and conditions, including the expiry date,
as those contained in the original contract.

Alegre was given a copy of the report filed by Brent School with the Department of Labor
advising of the termination of his services for the "completion of contract, expiration of the
definite period of employment." Alegre protesting the announced termination stating that his
services were necessary and desirable in the usual business of his employer, and his
employment lasted for 5 years - therefore he had acquired the status of regular employee.

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

ISSUE: Whether or not the provisions of the Labor Code, as amended, have anathematized
"fixed period employment" or employment for a term. (No, it is considered valid by the SC)

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

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

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

The status of legitimacy continued to be enjoyed by fixed-period employment contracts

under the Labor Code (PD 442), which went into effect on November 1, 1974. The Code
contained explicit references to fixed period employment, or employment with a fixed or definite
period. Nevertheless, obscuration of the principle of licitness of term employment began to take
place at about this time.
In the case of Escudero vs. Office of the President , in the fairly analogous case of a teacher
being served by her school a notice of termination following the expiration of the last of three
successive fixed-term employment contracts, the Court held:
“At the expiration of the period stipulated in the contract, her appointment was deemed
terminated and the letter informing her of the non-renewal of her contract is not a condition sine
qua non before Reyes may be deemed to have ceased in the employ of petitioner UST. The
notice is a mere reminder that Reyes' contract of employment was due to expire and that the
contract would no longer be renewed. It is not a letter of termination.”

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

12. Philips Semiconductors (Phils.), Inc. v Fadriquela

(GR 141717, April 14, 2004)

FACTS: The petitioner Philips Semiconductors Inc. is a domestic corporation engaged in the
production and assembly of semiconductors. It caters to domestic and foreign corporations
that manufacture computers, telecommunications equipment and cars. Aside from contractual
employees, the petitioner employed 1,029 regular workers. The employees were subjected
to periodic performance appraisal based on output, quality, attendance and work attitude.

Respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in

which she was hired as a production operator. Her initial contract was for a period of three
months but was extended for 4 times because of her performance rating.

She, however, incurred several absences in the months of April, May and June. The Line
supervisor asked the respondent why she incurred the said absences, but then, she
failed to explain her side. The respondent was warned that if she offered no valid justification
for her absences, would result to the non-renewal of her contract. The respondent still failed to
respond, as a consequence of which her performance rating declined. The respondent’s
employment was terminated due to habitual absenteeism, in accordance with the Company
Rules and Regulations. Thus, the respondent’s contract of employment was no longer renewed.

ISSUE: Whether or not the respondent is a contractual employee

RULING: No, she is a regular employee.

The two kinds of regular employees under the law are (1) those engaged to perform activities
which are necessary or desirable in the usual business or trade of the employer; and (2) those
casual employees who have rendered at least one year of service, whether continuous or
broken, with respect to the activities in which they are employed. 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. The
law does not provide the qualification that the employee must first be issued a regular
appointment or must be declared as such before he can acquire a regular employee status. In
this case, the respondent was employed by the petitioner on May 8, 1992 as production
operator. She was assigned to wirebuilding at the transistor division. There is no dispute
that the work of the respondent was necessary or desirable in the business or trade of
the petitioner. She remained under the employ of the petitioner without any interruption
for one (1) year and twenty-eight (28) days. The original contract of employment had
been extended or renewed for four times, to the same position, with the same chores.
Such a continuing need for the services of the respondent is sufficient evidence of the
necessity and indispensability of her services to the petitioner’s business. By operation
of law, then, the respondent had attained the regular status of her employment with the
petitioner.

13. Innodata Philippines, Inc. v. Quejada-Lopez,

GR 162839, October 12, 2006
(NOT VALIID, bc 2 probationary periods)

FACTS: Innodata Philippines, Inc., is engaged in the encoding/data conversion business. It

employs encoders, indexers, formatters, programmers, quality/quantity staff, and others, to
maintain its business and do the job orders of its clients.

Natividad and Quejada were employed as formatters by Innodata Philippines, Inc. They
worked for 1 year. They believed that their job was necessary and desirable to the usual
business of the company which is data processing/conversion and that their employment is
regular pursuant to Article 280 of the Labor Code, they filed a complaint for illegal dismissal and
for damages as well as for attorney’s fees against Innodata Phils., Incorporated.

Innodata contended that their employment contracts expired, having a fixed period of one (1)
year. Since the period expired, their employment was likewise terminated applying the ruling in
the Brent School case.

Labor Arbiter rendered a judgment in favor of complainants holding complainants Natividad

and Quejada to have been illegally dismissed by Innodata Philippines Incorporated and
Innodata Processing Corporation. Innodata appealed to NLRC which reversed and set aside
the LA’s decision declaring that the contract was for a fixed term and therefore, the dismissal
at the end of their one-year term agreed upon was valid. An MR was filed but was denied. The
CA ruled that respondents were regular employees in accordance with Section 280 of the
Labor Code. It said that the fixed-term contract prepared by petitioner was a crude attempt to
circumvent respondents’ right to security of tenure.

The contract provided two periods. Aside from the fixed one-year term set in paragraph 1,
paragraph 7.4 provides for a three-month period during which petitioner has the right to pre-
terminate the employment for the “failure of the employees to meet and pass the qualifications
and standards set by the employer and made known to the employee prior to” their
employment. In effect, paragraph 7.4 is a probationary period.

ISSUE: whether the alleged fixed-term employment contracts are valid. (NO)
HELD: No, Innodata’s contract of employment failed to comply with the standards set by
law and by this Court.

Sec. 7.4 of the present employment contract clearly shows an intent to circumvent the security
of tenure. Said section provides: “the EMPLOYER is hereby granted the right to pre-
terminate this Contract within the first three (3) months of its duration upon failure of the
EMPLOYEE to meet and pass the qualifications and standards set by the EMPLOYER and
made known to the EMPLOYEE prior to execution hereof. Failure of the EMPLOYER to
exercise its right hereunder shall be without prejudice to the automatic termination of the
EMPLOYEE’s employment upon the expiration of this Contract or cancellation thereof for other
causes provided herein and by law.”

It is evident that this paragraph actually refers to a probationary period. This shows the
intent of the employer to avoid the regularization of the employees.

The applicable laws are Article 1700 of the Civil Code which declares:

“Art. 1700. The relations between capital and labor are not merely contractual. They are
so impressed with public interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar
subjects.”

The SC cited Pakistan Airlines v. Ople and Phil Federation Cooperative v. NLRC “A contract
of employment is impressed with public interest. For this reason, provisions of applicable
statutes are deemed written into the contract. Hence, 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.” Moreover, in case of doubt, the terms of a contract
should be construed in favor of labor.”

The claims of petitioner that the nature of its business (service contractor so it relies on
availability of job orders from its clients) limits it to enter into fixed-term employment
contracts is untenable. The SC says that: “By their very nature, businesses exist and thrive
depending on the continued patronage of their clients. Thus, to some degree, they are subject
to the whims of clients who may decide to discontinue patronizing their products or services for
a variety of reasons. Being inherent in any enterprise, this entrepreneurial risk may not be
used as an excuse to circumvent labor laws; otherwise, no worker could ever attain
regular employment status.

Petition is DENIED, and the assailed Decision and Resolution are AFFIRMED. Costs against
petitioner

14. OKS Designtech, Inc. v. Caccam,

G.R. No. 211263, August 5, 2015
(VALID bc 1 PROBATIONARY PERIOD ONLY)

FACTS: Petitioner hired Respondent as an accountant under a Contract of Employment

for a Fixed Period for 6 months. Her contract was thereafter renewed for another 6 months.
Days before the expiration of her second contract, Respondent received a letter from
Company informing her of the impending expiration of her contract. As Respondent felt
that she was summarily dismissed by the aforestated letter, she filed a complaint for illegal
dismissal.

Respondent claimed that she was a regular employee and argued that the nature of her work
was necessary and desirable to the business of the Petitioner. On the other hand, herein
Petitioner claims that the present labor case was only filed in retaliation of the criminal case of
Qualified Theft and Falsification of Private Documents after having discovered several
unauthorized withdrawals from its bank in violation of the trust and confidence reposed in her.
Further, the Petitioner interposed that the letter received by the Respondent was a mere
notice of the expiration of her contract, and not a termination notice.

The LA ruled that the respondent was illegally dismissed after finding out that her
employment contract was signed on a later date and not on the date when she actually started
working for the petitioner. Although initially deemed as a probationary contract, by
extending the same for another year, she attained the status of a regular employee.

The NLRC reversed the LA decision stating that there’s no basis for concluding that the first
contract was for a probationary employment.

The CA reinstated the decision of the LA. The CA ruled that the terms and conditions of the
first contract and the second contract negated a fixed-term employment since they state that
respondent’s employment may be terminated prior to the expiration thereof.

ISSUE: Whether or not the the respondent is a fixed-period employee

RULING: Yes, he is a fixed-period employee.

The Supreme Court held that even if an employee is engaged to perform activities that are
necessary or desirable in the usual trade or business of the employer, the same does not
preclude the fixing of employment for a definite period. Article 280 of the Labor Code does
not proscribe or prohibit an employment contract with a fixed period provided the same is
entered into by the parties, without any force, duress or improper pressure being brought to
bear upon the employee and absent any other circumstance vitiating consent.

In fact, the Court, in Brent, had already pronounced that the decisive determinant in fixed-
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.

15. Innodata Knowledge Service, Inc. v. Inting

G.R. No. 211892. December 6, 2017

FACTS: 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 and was hired by a company based in the US
to review various litigation documents. For this purpose, IKSI engaged the services of
respondents with a contract duration of five (5) years.

IKSI argued that based on the contract, respondents’ employment was fixed for a
specific project or undertaking, with its completion or termination clearly determined at
the time of the employee’s engagement. However, IKSI required respondents to work on
another project called "Bloomberg," which was not included in the original contracts that they
signed and without entering into a new project employment contract. Respondents initially
opposed working on said project but eventually agreed, in fear of losing their employment
altogether. Months later, they were again required to work on their assigned project and
reverted to their previous designation.

Respondents received a Notice of Forced Leave from IKSI effective on that same day due to
changes in business conditions, client requirements, and specifications. Hence, respondents
filed a complaint for illegal dismissal, reinstatement or payment of separation pay,
backwages, and damages against IKSI. Subsequently, IKSI informed them 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 declared that there was no illegal dismissal. The NLRC affirmed the
decision of LA but with modification. On appeal to the CA reversed and set aside the
decision of NLRC and that petitioners were illegally dismissed by Innodata.

ISSUES:
1. WoN the respondents are project employees (reg ee)
2. WoN the respondents were validly placed on floating status and not illegally dismissed.
(no)

RULING: Not project employees but they are regular employees.

1. The respondents are not project employees.

IKSI failed to show that respondents worked for a specific project and the duration of the
same as stated in their contract. 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.

With regard to the duration, it can be gleaned in their respective contract that the 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 the same date, as the
completion of the 5-year period would depend on when each employee was employed. This is
precisely the reason why IKSI originally left a blank for the termination date because it varied for
each employee. If respondents were truly project employees, then the termination date
would have been uniform for all of them. In effect, respondents entered into fixed-term
employment contracts with IKSI with a fixed period of 5 years.

In other words, IKSI 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. Considering that there
were no valid fixed-term or project contracts, they are considered as regular employees
who could not be dismissed except for just or authorized causes.
2. Respondents were constructively dismissed when petitioner put them under floating
status.

Requiring employees on forced leave is one of the cost-saving measures adopted by the
management in order to prevent further losses but IKSI failed to discharge the burden of
proof vested upon it. The records are bereft of any evidence of actual suspension of IKSI's
business operations or even of the ACT Project alone. In fact, while IKSI cited Article 301 to
support the temporary lay-off of its employees, it never alleged that it had actually suspended
the subject undertaking to justify such lay-off.

The burden to prove the validity and legality of the termination of employment falls on
the employer, IKSI should have established the bona fide suspension of its business
operations or undertaking that could legitimately lead to the temporary layoff of its employees
for a period not exceeding six (6) months, in accordance with Article 301. This means that it
should be able to prove that it faced a clear and compelling economic reason which
reasonably constrained it to temporarily shut down its business operations or that of the ACT
Project, incidentally resulting in the temporary lay-off of its employees assigned to said
particular undertaking. IKSI must likewise bear the burden of proving that there were no other
available posts to which the employees temporarily put out of work could be possibly assigned.
Unfortunately, IKSI was not able to fulfill any of the aforementioned duties.

In fact, IKSI still continued its operations and retained several employees who were also
working on the ACT Project even after the implementation of the forced leave. Much
worse, it continued to hire new employees, with the same qualifications as some of
respondents. The placing of an employee on floating status presupposes that there is less
work than there are employees. Hence, placing respondents on floating status was
unnecessary. If any, respondents - with their experience, knowledge, and familiarity with the
workings of the company - should be preferred to be given new projects and not new hires who
have little or no experience working for IKSI. And even assuming, without admitting, that there
was indeed suspension of operations, IKSI did not recall the employees back to work or place
them on valid permanent retrenchment after the period of 6 months, as required of them by law.

There being no valid suspension of business operations, IKSI’s act amounted to

constructive dismissal of respondents since it could not validly put the latter on forced
leave or floating status pursuant to Article 301.

16. Universidad de Sta. Isabel v. Sambajon, Jr.,

GR 196280 & 196286, April 2, 2014

FACTS: Petitioner, Universidad de Sta. Isabel is a non-stock, non-profit religious

educational institution in Naga City. Petitioner hired respondent Sambajon, Jr. as a full-time
college faculty member with the rank of Assistant Professor on probationary status.

After the contract expired, petitioner continued to give teaching loads to respondent who
remained a full-time faculty member of the Department of Religious Education for the two
semesters of school-year (SY) 2003-2004 and two semesters of SY 2004-2005.

In 2003, the respondent submitted the corresponding Special Order from the CHED, together
with his credentials for the said masters degree, to the HR Department of petitioner for the
purpose of salary increase. Subsequently, the respondent's salary was increased.
He was likewise re-ranked from Assistant Professor to Associate Professor. Respondent
vigorously argued that his salary increase should be made effective and demanded the payment
of his salary differential but was denied. Respondent insisted on his demand for retroactive
pay. Sr. Evidente denied and reiterated the school policy on re-ranking of teachers.
However, the respondent found the explanation insufficient and not clear enough. He pointed
out the case of another faculty member. A dialogue was held between respondent and Sr.
Evidente and the parties gave conflicting accounts. Respondent received his letter of
termination. Respondent filed a complaint for illegal dismissal against the petitioner.

ISSUE: W/N the respondent is a regular employee

RULING: NO, the respondent is a fixed-term employee and not a regular one whose
employment may be validly terminated upon expiration of his contract. The fixed-term
character of employment essentially refers to the period agreed upon between the employer
and the employee; employment exists only for the duration of the term and ends on its own
when the term expires.
Employment on probationary status also refers to a period because of the technical meaning
"probation" carries in Philippine labor law - a maximum period of six months, or in the
academe, a period of three years for those engaged in teaching jobs. Their similarity ends
there, however, because of the overriding meaning that being "on probation" connotes, i.e., a
process of testing and observing the character or abilities of a person who is new to a role or
job. In fact, the Court, in Brent, had already pronounced that the decisive determinant in
fixed-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.

Here, respondent undisputedly executed a first employment contract which clearly

states on its face that it was for a fixed period of five (5) months. While it appears that the
said contract was actually signed only on April 21, 2008, the fact remains that respondent was
made well-aware of the fixed period undertaking from the time of her engagement on January
21, 2008. Otherwise, she would not have agreed to the contract's signing. Significantly, nothing
on record shows that respondent's consent thereto was vitiated or that force, duress, or
improper pressure was exerted on her, or that petitioner exercised moral dominance over
the respondent. The same holds true for the second fixed-term contract covering the period
from June 22, 2008 until June 21, 2009 which he voluntarily signed on June 21, 2008.

17. Fuji Television Network, Inc. v Arlene S. Espiritu,

G.R. No. 204944-45, 03 December 2014

Facts: In 2005, Arlene S. Espiritu was engaged by Fuji Television Network, Inc. as a news
correspondent/producer. Arlene’s employment contract initially provided for a term of one (1)
year but was successively renewed on a yearly basis with salary adjustment upon every
renewal.

Arlene was diagnosed with lung cancer. She informed Fuji about her condition. Although
Arlene insisted that she was “still fit to work as certified by her attending physician,” Arlene and
Fuji signed a non-renewal contract where it was stipulated that her contract would no
longer be renewed after its expiration. Arlene affixed her signature on the non-renewal
contract with the initials “U.P.” for “under protest.”

Arlene filed a complaint for illegal dismissal and attorney’s fees with the NLRC. She alleged that
she was forced to sign the non-renewal contract because Fuji withheld her salaries and other
benefits. It was only upon signing that she was given her salaries and bonuses, in addition to
separation pay equivalent to four years.

The Labor Arbiter dismissed the complaint for illegal dismissal and held that Arlene was
not Fuji’s employee but an independent contractor. The NLRC reversed and held that Arlene
was a regular employee. On appeal, the CA affirmed the NLRC decision finding that
Arlene was a regular employee and, having been illegally dismissed, she is entitled to
reinstatement, backwages, damages and attorney's fees. The CA held that the successive
renewals of her fixed-term contract resulted in regular employment. Fuji appealed to the
Supreme Court.

ISSUE: WoN Arlene was a regular employee? Yes

Held: Arlene was a regular employee with a fixed term contract

The test for determining regular employment is whether there is a reasonable connection
between the employee’s activities and the usual business of the employer. Article 280 provides
that the nature of work must be “necessary or desirable in the usual business or trade of the
employer” as the test for determining regular employment.

There may be a situation where an employee’s work is necessary but is not always desirable in
the usual course of business of the employer. In this situation, there is no regular employment.

The successive renewals of Arlene’s contract indicated the necessity and desirability of
her work in the usual course of Fuji’s business. Because of this, Arlene had become a
regular employee with the right to security of tenure.

Arlene’s contract indicating a fixed term did not automatically mean that she could never
be a regular employee. This is precisely what Article 280 seeks to avoid. The ruling in
Brent remains as the exception rather than the general rule.

Further, an employee can be a regular employee with a fixed-term contract. The law does
not preclude the possibility that a regular employee may opt to have a fixed-term contract for
valid reasons. This was recognized in Brent: For as long as it was the employee who requested,
or bargained, that the contract have a “definite date of termination,” or that the fixed-term
contract be freely entered into by the employer and the employee, then the validity of the fixed-
term contract will be upheld.

Fixed Term Employment (Brent doctrine)

Article 280 of the Labor Code classifies employees into regular, project, seasonal, and casual. It
further classifies regular employees into two kinds: (1) those “engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer”; and
(2) casual employees who have “rendered at least one year of service, whether such service is
continuous or broken.”

Another classification of employees, i.e., employees with fixed-term contracts, was

recognized in Brent School, Inc. v. Zamora. The decisive determinant in the 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.”

However, where from the circumstances it is apparent that the periods have been imposed to
preclude acquisition of tenurial security by the employee, the fixed term contract should be
struck down as contrary to public policy or morals. In Brent, the court laid down indications or
criteria under which “term employment” cannot be said to be in circumvention of the law on
security of tenure, namely:

(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

(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.

For as long as the guidelines laid down in Brent are satisfied, this court will recognize the
validity of the fixed-term contract.

Note: (IF EVER TANUNGIN) Four-fold test was proved in this case. Arlene was hired by Fuji as
a news producer, but there was no showing that she was hired because of unique skills that
would distinguish her from ordinary employees. Neither was there any showing that she had a
celebrity status. Therefore, Sonza vs. ABS-CBN does not apply in this case.

Fuji paid the salary of Arlene, wages may also indicate that an employee is able to bargain
with the employer for better pay. However, wages should not be the conclusive factor in
determining whether one is an employee or an independent contractor. Fuji had the power to
dismiss Arlene, as provided in her professional employment contract. Her contract also
indicated that Fuji had control over her work because she was required to work for eight (8)
hours from Monday to Friday, although on flexible time. Fuji have power to control, Arlene
alleged that Fuji gave her instructions on what to report. Even the mode of transportation in
carrying out her functions was controlled by Fuji.

18. Pantranco North Express, Inc. v. NLRC;

GR 106654, Dec. 16, 1994

FACTS: Private respondent Peronila was employed as a driver of Pantranco North

Express, Inc., a domestic corporation engaged in the public transportation business as a
common carrier, and of which its co-petitioner Abelardo de Leon is a manager.

Peronila was dismissed due to unauthorized absences. Fifteen years after such termination
of his employment, Peronila reappeared and implored petitioner to reconsider his dismissal,
which plea was initially denied by petitioner. However, due to his insistent appeals, petitioner
eventually acceded and hired him as a driver, but on a contractual basis for a fixed period of
one month.

Barely fifteen days from such employment as a contractual driver private respondent was
involved in a vehicular mishap and his employment contract was terminated and was no
longer renewed thereafter.
ISSUE: W/N the employment contract which stipulates that there is no employer-employee
relationship is valid.

RULING: Yes, the employment contract entered by Pantranco and Peronila is valid.

The services of respondent Peronila had been validly terminated by petitioner, when the latter
absented himself without official leave, fifteen years before he was re-hired as a contractual
driver for just one month. His re-hiring cannot be construed to mean that Peronila reacquired his
former permanent status.

Art. 280 should not be interpreted in such a way as to deprive employers of the right and
prerogative to choose their own workers if they have sufficient basis to refuse an employee a
regular status. Management has rights which should also be protected.

The petitioner had validity dismissed Peronila long before he entered into the contested
employment contract. It was Peronila who earnestly pleaded with the petitioner to give him a
second chance. The re-hiring of the private respondent was out of compassion and not because
the petitioner was impressed with the credentials of Peronila. Peronila’s previous violations of
company rules explains the reluctant attitude to the petitioner in re-hiring him. When the bus
driven by Peronila figured in a road mishap, that incident finally prompted the petitioner to sever
any further relationship with said private Respondent.

In Philippine Village Hotel vs. National Labor Relations Commission, et al. the fact that the
respondent is required to perform a job that is UND to the business for a duration of the one
month dry-run operation period did not in any way impair the validity of the contractual nature of
private respondents' contracts of employment which specifically stipulated that their employment
was only for one month.

In upholding the validity of a contract of employment with fixed or specific period in a number of
cases, we explained therein that "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 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.

In the case of Philippine National Oil Company-Energy Development Corporation v. National

Labor Relations Commission, this Court set down two criteria under which fixed contracts of
employments cannot be said to be in circumvention of security of tenure, to wit:

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

2. 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 on the latter.

In the present dispute, the services of respondent Peronila had been validly terminated by
petitioner, when the latter absented himself without official leave, fifteen years before he was re-
hired as a contractual driver for just one month. His re-hiring cannot be construed to mean that
Peronila reacquired his former permanent status.
 19. Medenilla v. PVB,
GR 127673, March 13, 2000

FACTS: Petitioners were employees of the Philippine Veterans Bank (PVB). Thereafter, their
services were terminated as a result of the liquidation of PVB pursuant to the order of the
Monetary Board of the Central Bank but immediately rehired on the same day of their
termination by Bank’s liquidator. However, their new employment contracts stipulated that their
employment was strictly temporary and for the duration of the undertaking for which the
employee was hired.

The liquidator also had the right to terminate the employee any time, if the latter was found to be
incompetent or unqualified. Subsequently, the petitioners were dismissed. The reason given for
the dismissal was to reduce costs inherent to the liquidation process. The petitioners then filed
an illegal dismissal case.

LA ruled that petitioners were illegally dismissed. NLRC reversed the decision of LA and
dismissed the petition for lack of merit. MR was also denied. Hence, this petition.

ISSUE: WoN Medenilla et al. were under a fixed-period employment contract (YES)

HELD: Yes, Medenilla and others were employed under the new contract for a fixed period, as
seen in the various stipulations of the agreement.

The SC cited the case of Philippine National Oil Company-Energy Development Corporation
vs. NLRC and held that the two guidelines by which fixed contracts of employment can be said
NOT to circumvent security of tenure, are either:

(1) The fixed period 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

(2) The employer and employee dealt with each other on more or less equal terms, with
no moral dominance exercised by the former on the latter.

Thus, the employment contract entered into by the parties appears to have observed the said
guidelines. However, the reason given by the Liquidator for termination was inadequate. It was
a mere allegation of the need to cut costs, with no concrete proof of actual losses to
substantiate the same. Since the employer in this case did not meet the burden of proving that
the dismissal was in fact valid, the conclusion is that it was an illegal dismissal.

The Court rules that there was illegal dismissal absent just cause, which is one of the facets of a
dismissal. As held by this Court, if the contract is for a fixed term and the employee is dismissed
without just cause, he is entitled to the payment of his salaries corresponding to the unexpired
portion of the employment contract.
20. Pangilinan v. GMC;
GR 149329, July 12, 2004

FACTS: General Milling Corporation is a domestic corporation engaged in the production and
sale of livestock and poultry and is likewise the distributor of dressed chicken to various
restaurants and establishments nationwide. It employs hundreds of employees, some on a
regular basis and others on a casual basis, as “emergency workers”.
Petitioners in this case were employed by GMC on different dates as emergency workers under
separate “temporary/casual contracts of employment” for a period of five months. Upon the
expiration of their respective contracts, their services were terminated. They later filed separate
complaints for illegal dismissal and non-payment of other monetary benefits.

Petitioners allege that their work as chicken dressers was necessary and desirable in the usual
business of GMC. They stressed that based on the nature of their work, they were regular
employees of the respondent, and therefore they could not be dismissed from their employment
unless for just cause and after due notice. They made further assertions that GMC terminated
their contract of employment without just cause and due notice and that GMC could not rely on
the nomenclature of their employment as “temporary casual”.

The LA ruled in favor of the petitioners, holding that they were regular employees and that they
were illegally dismissed. The NLRC reversed the decision of the LA and held that the petitioners
were legally terminated upon the expiration of their respective contracts, while petitioners’ work
was necessary and desirable in the usual business of GMC, they cannot be considered as
regular employees for having agreed to a fixed term. The CA affirmed the decision of the NLRC.

ISSUE: W/N the petitioners are regular employees of GMC when their employment was
terminated.

RULING: No, petitioners were employees with a fixed period, and, as such, were not regular
employees.

In the case of St. Theresa's School of Novaliches Foundation vs. NLRC, Art. 280 does not
proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow
that where the duties of the employee consist of activities usually necessary or desirable in the
usual business of the employer, the parties are forbidden from agreeing on a period of time for
the performance of such activities. There is thus nothing essentially contradictory between a
definite period of employment and the nature of the employee's duties.

The guidelines before a contract of employment may be held as valid, as discussed in Brent
School Inc. v. Zamora, were complied with in the present case.

The petitioners were employees with a fixed period, records reveal that the stipulations in the
employment contracts were knowingly and voluntarily agreed to by the petitioners without force,
duress or improper pressure, or any circumstances that vitiated their consent. While the
petitioners’ employment as chicken dressers is necessary and desirable in the usual business of
the respondent, they were employed on a mere temporary basis, since their employment was
limited to a fixed period. As such, they cannot be said to be regular employees, but are merely
“contractual employees”. Consequently, there was no illegal dismissal when their services were
terminated. Lack of notice of termination is of no consequence, because it was specified in the
contract when it shall expire.

21. Labayog v. M.Y. San Biscuits, Inc.,

GR 148102, July 11, 2006

FACTS: On various dates in 1992, petitioners entered into contracts of employment with
respondent company as mixers, packers and machine operators for a fixed term. On the
expiration of their contracts, their services were terminated. Forthwith, they each executed a
quitclaim.

Petitioners filed complaints for illegal dismissal and other monetary benefits. The labor arbiter
ruled their dismissal to be illegal on the ground that they had become regular employees who
performed duties necessary and desirable in respondent company's business. NLRC set aside
the decision of LA. Having entered into their employment contracts freely and voluntarily, they
knew that their employment was only for a fixed period and would end on the prescribed
expiration date.

The CA set aside the NLRC decision and reinstated the decision of LA. However, on
respondents' motion for reconsideration, the CA reversed itself and reasoned that, while
petitioners performed tasks which were necessary and desirable in the usual business of the
respondent company, their employment contracts providing for a fixed term remained valid. No
force, duress, intimidation or moral dominance was exerted on them. Respondents dealt with
petitioners in good faith and within the valid parameters of management prerogatives. Hence,
this recourse.

ISSUE: W/N the fixed term contracts of petitioners were valid. (YES)

RULING: YES, the employment contracts are valid and they are not regular employees.

Where the duties of the employee consist of activities which are necessary or desirable in the
usual business of the employer, the parties are not prohibited from agreeing on the duration of
employment. Article 280 of the Labor Code does not proscribe or prohibit an employment
contract with a fixed period provided it is not intended to circumvent the security of tenure.

Two criteria validate a contract of employment with a fixed period:

(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 on the
employee and without any circumstances vitiating consent or,
(2) 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 on the latter.

Against these criteria, petitioners' contracts of employment with a fixed period were
valid. Each contract provided for an expiration date. Petitioners knew from the beginning that
the employment offered to them was not permanent but only for a certain fixed period. They
were free to accept or to refuse the offer. When they expressed their acceptance, they bound
themselves to the contract.

In this case, there was no allegation of vitiated consent. Respondents did not exercise moral
dominance over petitioners. The contracts were mutually advantageous to the parties.

While their employment as mixers, packers and machine operators was necessary and
desirable in the usual business of respondents, they were employed temporarily only, during
periods when there was heightened demand for production. Consequently, there could have
been no illegal dismissal when their services were terminated on expiration of their contracts.
There was even no need for notice of termination because they knew exactly when their
contracts would end. Contracts of employment for a fixed period terminate on their own at the
end of such period.
 22. Poseidon Fishing v. NLRC,
GR 168052, Feb. 20, 2006

FACTS: Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing
industry with Terry de Jesus as the manager. Jimmy S. Estoquia was employed as Chief Mate
in January 1988 and after five years.

The contract with Eustoqia per the "Kasunduan", there was a provision stating that he was
being employed only on a ‘’por viaje’’ basis and that his employment would be terminated at the
end of the trip for which he was being hired.

He was promoted to Boat Captain but was later demoted to Radio Operator. As a Radio
Operator, he monitored the daily activities in their office and recorded in the duty logbook the
names of the callers and time of their calls. Estoquia failed to record his call-in on time.
When he reviewed the two logbooks, he noticed that he was not able to record the said call in
one of the logbooks, so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry. In
the morning of 4 July 2000, petitioner detected the error in the entry in the logbook.

Estoquia was asked to prepare an incident report to explain the reason for the said oversight.
On the same day, Poseidon’s secretary summoned Estoquia to get his separation pay.

Estoquia filed a complaint for illegal dismissal with the Labor Arbiter. Poseidon and Terry de
Jesus asserted that Estoquia was a contractual or a casual employee employed only on a per
trip basis and that his employment would be terminated at the end of the trip for which he was
being hired. The Labor Arbiter decided in favor of the private respondent. The NLRC affirmed
the decision of the Labor Arbiter with the modification. Petitioners filed a Petition for Certiorari
with the CA imputing grave abuse of discretion, but the CA denied the petition.

ISSUE: W/N Eustaquia is a regular employee

- Petitioners contended that fixed-term employment contracts are recognized as valid
under the law.
- Petitioners cited Brent School Inc. v. Zamora, fixed-term employment contracts are not
limited to those that by their nature are seasonal or for specific projects with pre-
determined dates of completion as they also include those to which the parties by free
choice have assigned a specific date of termination.

RULING: Yes, he is a regular employee of Poseidon.

SC did not agree with the contention of the petitioner because the agreement has such an
objective, to frustrate the security of tenure of private respondent and must be nullified.

In Brent, the acid test in considering fixed-term contracts as valid is: if from the circumstances it
is apparent that periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be disregarded for being contrary to public policy. It was consistently
ruled in Pakistan International Airlines Corporation v. Ople, that the critical consideration is the
presence or absence of a substantial indication that the period specified in an employment
agreement was designed to circumvent the security of tenure of regular employees; and in
Cielo v. National Labor Relations Commission, nullified the employment contracts stipulating a
fixed term after finding that "the purpose behind these individual contracts was to evade the
application of the labor laws."

In a span of 12 years, Eustoquia worked for petitioner first as a Chief Mate, then Boat Captain,
and later as Radio Operator. His job was directly related to the deep-sea fishing business of
petitioner Poseidon. His work was, therefore, necessary and important to the business of his
employer.

Such being the scenario involved, Eustoquia is considered a regular employee. There is
nothing in the contract that says the complainant is a casual, seasonal or a project worker.
Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated,
note that in the case at bar, the terms of employment of private respondent as provided in the
Kasunduan was not only vague, but it also failed to provide an actual or specific date or period
for the contract. The date July 1 to 31, 1998 under the heading "Pagdating" had been placed
there merely to indicate the possible date of arrival of the vessel and is not an indication of the
status of employment of the crew of the vessel. The kasunduan does not specify the duration
that complainant had been hired.

In the case at bar, the act of hiring and re-hiring in various capacities is a mere gambit
employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of
re-hiring and the recurring need for his services are testament to the necessity and
indispensability of such services to petitioners’ business or trade. In this case, Eustoquia was
never informed that he will be assigned to a "specific project or undertaking” at the time of their
engagement. 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.

Eustoquia’s functions were usually necessary or desirable in the usual business or trade of
petitioner fishing company and he was hired continuously for 12 years for the same nature of
tasks. Hence, he is a regular employee.

23. Basan, et. al. vs. Coca-Cola Bottlers Philippines;

G.R. No. 174365-66, February 4, 2015

Facts: Petitioners filed a complaint for illegal dismissal with money claims against respondent
Coca-Cola Bottlers Philippines, alleging that respondent dismissed them without just cause and
prior written notice required by law

Respondent corporation, however, countered that it hired petitioners as temporary route

helpers to act as substitutes for its absent regular route helpers merely for a fixed period in
anticipation of the high volume of work in its plants or sales offices. As such, petitioners’ claims
have no basis for they knew that their assignment as route helpers was temporary in duration.

The LA ruled in favor of petitioners and found that since they were performing activities
necessary and desirable to the usual business of petitioner for more than the period for
regularization, petitioners are considered as regular employees, and thus, their dismissal was
done contrary to law in the absence of just cause and prior written notice.

The NLRC affirmed the LA’s decision. It stressed that nowhere in the records of the case
was it shown that petitioners were hired as project or seasonal employees, respondent having
failed to submit any contract of project or other similar proof thereof.

However, the CA reversed the rulings of the NLRC and the LA stating that the respondents'
nature of work is not the only standard for determining the status of one’s employment. Such
fact does not prevent them from being considered as fixed term employees of Coca-Cola whose
engagement was "fixed" for a specific period. Hence, they are not regular employees.

ISSUE: WoN the routine helpers can be fixed-term employees even in the absence of proof of
such agreement (NO)

HELD: No, in the absence of proof showing that petitioners knowingly agreed upon a
fixed term of employment, the petitioners are deemed regular employees.

The SC cited Brent School, Inc. v. Zamora, while it was not expressly mentioned in the Labor
Code, this Court has recognized a fixed-term type of employment embodied in a contract
specifying that the services of the employee shall be engaged only for a definite period, the
termination of which occurs upon the expiration of said period irrespective of the existence of
just cause and regardless of the activity the employee is called upon to perform. Considering,
however, the possibility of abuse by employers in the utilization of fixed-term employment
contracts, this Court, in Brent, laid down the following criteria to prevent the circumvention of the
employee’s security of tenure:

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

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.

Unfortunately, the records of this case are bereft of any proof which will show that
petitioners freely entered into agreements with respondent to perform services for a
specified length of time. In fact, there is nothing in the records to show that there was any
agreement at all, the contracts of employment not having been presented. Indeed,
respondent’s failure to submit the necessary documents, which as employers are in their
possession, gives rise to the presumption that their presentation is prejudicial to its cause.

While fixed term employment is not per se illegal or against public policy, the criteria
above must first be established to the satisfaction of this Court. Yet, the records of this
case reveal that for years, petitioners were repeatedly engaged to perform functions necessary
to respondent’s business for fixed periods short of the six-month probationary period of
employment.

Hence, in the absence of proof showing that petitioners knowingly agreed upon a fixed term of
employment, petitioners are, indeed, regular employees, entitled to security of tenure.
Consequently, for lack of any clear, valid, and just or authorized cause in terminating petitioners'
employment, the SC finds respondent guilty of illegal dismissal.