1.) G.R. No.

114337 September 29, 1995

NITTO ENTERPRISES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.

KAPUNAN, J.:

This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the decision  rendered by public
1

respondent National Labor Relations Commission, which reversed the decision of the Labor Arbiter.

Briefly, the facts of the case are as follows:

Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Roberto Capili
sometime in May 1990 as an apprentice machinist, molder and core maker as evidenced by an apprenticeship
agreement  for a period of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75
2

which was 75% of the applicable minimum wage.

At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he was working on,
accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital.

Later that same day, after office hours, private respondent entered a workshop within the office premises which was
not his work station. There, he operated one of the power press machines without authority and in the process
injured his left thumb. Petitioner spent the amount of P1,023.04 to cover the medication of private respondent.

The following day, Roberto Capili was asked to resign in a letter  which reads:
3

August 2, 1990

Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano gamitin
and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang paggamit ng tool at may disgrasya
at nadamay pa ang isang sekretarya ng kompanya.

Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya ay pumasok sa
shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot ang makina at
nadisgrasya niya ang kanyang sariling kamay.

Nakagastos ang kompanya ng mga sumusunod:

Emergency and doctor fee P715.00

Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi ng
kanyang kamay.

Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng Agosto, 1990.

Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay,
pagkatapos ng siyam na araw mula ika-2 ng Agosto.

Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama ng

kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.

Labor 1
  

Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala sa hindi
pagsunod sa alintuntunin ng kompanya.

(Sgd.) Roberto Capili

Roberto Capili

On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and in
consideration of the sum of P1,912.79. 4

Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration Branch,
National Capital Region a complaint for illegal dismissal and payment of other monetary benefits.

On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private respondent as valid
and dismissing the money claim for lack of merit. The dispositive portion of the ruling reads:

WHEREFORE, premises considered, the termination is valid and for cause, and the money claims
dismissed for lack of merit.

The respondent however is ordered to pay the complainant the amount of P500.00 as financial
assistance.

SO ORDERED. 5

Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian was valid. First,
private respondent who was hired as an apprentice violated the terms of their agreement when he acted with gross
negligence resulting in the injury not only to himself but also to his fellow worker. Second, private respondent had
shown that "he does not have the proper attitude in employment particularly the handling of machines without
authority and proper training.
6

On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision of the Labor
Arbiter, the dispositive portion of which reads:

WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby directed to
reinstate complainant to his work last performed with backwages computed from the time his wages
were withheld up to the time he is actually reinstated. The Arbiter of origin is hereby directed to
further hear complainant's money claims and to dispose them on the basis of law and evidence
obtaining.

SO ORDERED. 7

The NLRC declared that private respondent was a regular employee of petitioner by ruling thus:

As correctly pointed out by the complainant, we cannot understand how an apprenticeship

agreement filed with the Department of Labor only on June 7, 1990 could be validly used by the
Labor Arbiter as basis to conclude that the complainant was hired by respondent as a plain
"apprentice" on May 28, 1990. Clearly, therefore, the complainant was respondent's regular
employee under Article 280 of the Labor Code, as early as May 28,1990, who thus enjoyed the
security of tenure guaranteed in Section 3, Article XIII of our 1987 Constitution.

The complainant being for illegal dismissal (among others) it then behooves upon respondent,
pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March 5,
1993, 3rd Div., Feliciano, J.) to prove that the dismissal of complainant was for a valid cause. Absent
such proof, we cannot but rule that the complainant was illegally dismissed. 8

Labor 1
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private respondent's
representative was present.

On April 22, 1994, a Writ of Execution was issued, which reads:

NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of the Writ, you are
hereby commanded to proceed to the premises of [petitioner] Nitto Enterprises and Jovy Foster
located at No. l 74 Araneta Avenue, Portero, Malabon, Metro Manila or at any other places where
their properties are located and effect the reinstatement of herein [private respondent] to his work
last performed or at the option of the respondent by payroll reinstatement.

You are also to collect the amount of P122,690.85 representing his backwages as called for in the
dispositive portion, and turn over such amount to this Office for proper disposition.

Petitioner filed a motion for reconsideration but the same was denied.

Hence, the instant petition — for certiorari.

The issues raised before us are the following:

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF

DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.

II

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF

DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE
EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.

We find no merit in the petition.

Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be considered an
apprentice since no apprenticeship program had yet been filed and approved at the time the agreement was
executed.

Petitioner further insists that the mere signing of the apprenticeship agreement already established an employer-
apprentice relationship.

Petitioner's argument is erroneous.

The law is clear on this matter. Article 61 of the Labor Code provides:

Contents of apprenticeship agreement. — Apprenticeship agreements, including the main rates

of apprentices, shall conform to the rules issued by the Minister of Labor and Employment.
The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for
wage rates below the legal minimum wage, which in no case shall start below 75% per cent of
the applicable minimum wage, may be entered into only in accordance with apprenticeship
program duly approved by the Minister of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship. (emphasis supplied)

In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed on
May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder." On the same
date, an apprenticeship program was prepared by petitioner and submitted to the Department of Labor and

Labor 1
Employment. However, the apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding the
absence of approval by the Department of Labor and Employment, the apprenticeship agreement was enforced the
day it was signed.

Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated
that apprenticeship agreements entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is,
therefore, a condition sine quo non before an apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a
preliminary step towards its final approval and does not instantaneously give rise to an employer-
apprentice relationship.

Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program through
the participation of employers, workers and government and non-government agencies" and "to establish
apprenticeship standards for the protection of apprentices." To translate such objectives into existence, prior
approval of the DOLE to any apprenticeship program has to be secured as a condition sine qua non before any
such apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship programs and
agreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force and effect in
the absence of a valid apprenticeship program duly approved by the DOLE, private respondent's assertion that he
was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves credence. He should
rightly be considered as a regular employee of petitioner as defined by Article 280 of the Labor Code:

Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of service, whether
such service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity exists.
(Emphasis supplied)

and pursuant to the constitutional mandate to "protect the rights of workers and promote their welfare." 9

Petitioner further argues that, there is a valid cause for the dismissal of private respondent.

There is an abundance of cases wherein the Court ruled that the twin requirements of due process, substantive and
procedural, must be complied with, before valid dismissal exists.   Without which, the dismissal becomes void.
10

The twin requirements of notice and hearing constitute the essential elements of due process. This simply means
that the employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of
his representative, if he so desires.

Ample opportunity connotes every kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation.  11

As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC:  12

Labor 1
 The law requires that the employer must furnish the worker sought to be dismissed with two (2)
written notices before termination of employee can be legally effected: (1) notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the employer's decision to dismiss him (Sec. 13,
BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the Labor Code as
amended). Failure to comply with the requirements taints the dismissal with illegality. This procedure
is mandatory, in the absence of which, any judgment reached by management is void and in existent
(Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp. vs. NLRC, 168 SCRA 122;
Ruffy vs. NLRC. 182 SCRA 365 [1990]).

The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days after he was
made to sign a Quitclaim, a clear indication that such resignation was not voluntary and deliberate.

Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador" or
"pahinante").

He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation letter and
quitclaim without explaining to him the contents thereof. Petitioner made it clear to him that anyway, he did not have
a choice. 13

Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's alleged
resignation and subsequent execution of a Quitclaim and Release. A judicious examination of both events belies
any spontaneity on private respondent's part.

WHEREFORE, finding no abuse of discretion committed by public respondent National Labor Relations
Commission, the appealed decision is hereby AFFIRMED.

Labor 1
2.) G.R. No. 75112 August 17, 1992

FILAMER CHRISTIAN INSTITUTE, petitioner,

vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as Judge of the
Regional Trial Court, Branch XIV, Roxas City and POTENCIANO KAPUNAN, SR., respondents.

Bedona & Bedona Law Office for petitioner.

Rhodora G. Kapunan for private respondents.

GUTIERREZ, JR., J.:

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision rendered by
this Court on October 16, 1990 (Filamer Christian Institute v. Court of Appeals, 190 SCRA 477) reviewing the
appellate court's conclusion that there exists an employer-employee relationship between the petitioner and its co-
defendant Funtecha. The Court ruled that the petitioner is not liable for the injuries caused by Funtecha on the
grounds that the latter was not an authorized driver for whose acts the petitioner shall be directly and primarily
answerable, and that Funtecha was merely a working scholar who, under Section 14, Rule X, Book III of the Rules
and Regulations Implementing the Labor Code is not considered an employee of the petitioner.

The private respondents assert that the circumstances obtaining in the present case call for the application of Article
2180 of the Civil Code since Funtecha is no doubt an employee of the petitioner. The private respondents maintain
that under Article 2180 an injured party shall have recourse against the servant as well as the petitioner for whom,
at the time of the incident, the servant was performing an act in furtherance of the interest and for the benefit of the
petitioner. Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge of the
school authorities.

After a re-examination of the laws relevant to the facts found by the trial court and the appellate court, the Court
reconsiders its decision. We reinstate the Court of Appeals' decision penned by the late Justice Desiderio Jurado
and concurred in by Justices Jose C. Campos, Jr. and Serafin E. Camilon. Applying Civil Code provisions, the
appellate court affirmed the trial court decision which ordered the payment of the P20,000.00 liability in the Zenith
Insurance Corporation policy, P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and P3,000.00
attorney's fees.

It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer.
He was, in relation to the school, an employee even if he was assigned to clean the school premises for only two (2)
hours in the morning of each school day.

Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to take over the
vehicle while the latter was on his way home one late afternoon. It is significant to note that the place where Allan
lives is also the house of his father, the school president, Agustin Masa. Moreover, it is also the house where
Funtecha was allowed free board while he was a student of Filamer Christian Institute.

Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp dangerous curb,
and viewing that the road was clear. (TSN, April 4, 1983, pp. 78-79) According to Allan's testimony, a fast moving
truck with glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. Upon swerving,
they heard a sound as if something had bumped against the vehicle, but they did not stop to check. Actually, the
Pinoy jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the direction
against vehicular traffic, and hit him. Allan affirmed that Funtecha followed his advise to swerve to the right. (Ibid., p.
79) At the time of the incident (6:30 P.M.) in Roxas City, the jeep had only one functioning headlight.

Labor 1
Allan testified that he was the driver and at the same time a security guard of the petitioner-school. He further said
that there was no specific time for him to be off-duty and that after driving the students home at 5:00 in the
afternoon, he still had to go back to school and then drive home using the same vehicle.

Driving the vehicle to and from the house of the school president where both Allan and Funtecha reside is
an act in furtherance of the interest of the petitioner-school. Allan's job demands that he drive home the
school jeep so he can use it to fetch students in the morning of the next school day.

It is indubitable under the circumstances that the school president had knowledge that the jeep was routinely driven
home for the said purpose. Moreover, it is not improbable that the school president also had knowledge of
Funtecha's possession of a student driver's license and his desire to undergo driving lessons during the time that he
was not in his classrooms.

In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha definitely was not
having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a "frolic of his own" but ultimately,
for the service for which the jeep was intended by the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1
D.L.R. 577, 80 ALR 722 [1932]; See also Association of Baptists for World Evangelism, Inc. v. Fieldmen's Insurance
Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is constrained to conclude that the act of Funtecha in
taking over the steering wheel was one done for and in behalf of his employer for which act the petitioner-
school cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties.
The clause "within the scope of their assigned tasks" for purposes of raising the presumption of liability of
an employer, includes any act done by an employee, in furtherance of the interests of the employer or for
the account of the employer at the time of the infliction of the injury or damage. (Manuel Casada, 190 Va 906,
59 SE 2d 47 [1950]) Even if somehow, the employee driving the vehicle derived some benefit from the act, the
existence of a presumptive liability of the employer is determined by answering the question of whether or
not the servant was at the time of the accident performing any act in furtherance of his master's business.
(Kohlman v. Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner anchors its defense,
was promulgated by the Secretary of Labor and Employment only for the purpose of administering and enforcing the
provisions of the Labor Code on conditions of employment. Particularly, Rule X of Book III provides guidelines on
the manner by which the powers of the Labor Secretary shall be exercised; on what records should be kept;
maintained and preserved; on payroll; and on the exclusion of working scholars from, and inclusion of resident
physicians in the employment coverage as far as compliance with the substantive labor provisions on working
conditions, rest periods, and wages, is concerned.

In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The Court, thus, makes
the distinction and so holds that Section 14, Rule X, Book III of the Rules is not the decisive law in a civil suit for
damages instituted by an injured person during a vehicular accident against a working student of a school and
against the school itself.

The present case does not deal with a labor dispute on conditions of employment between an alleged employee
and an alleged employer. It invokes a claim brought by one for damages for injury caused by the patently negligent
acts of a person, against both doer-employee and his employer. Hence, the reliance on the implementing rule on
labor to disregard the primary liability of an employer under Article 2180 of the Civil Code is misplaced. An
implementing rule on labor cannot be used by an employer as a shield to avoid liability under the substantive
provisions of the Civil Code.

There is evidence to show that there exists in the present case an extra-contractual obligation arising from the
negligence or reckless imprudence of a person "whose acts or omissions are imputable, by a legal fiction, to
other(s) who are in a position to exercise an absolute or limited control over (him)." (Bahia v. Litonjua and Leynes,
30 Phil. 624 [1915])

Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver's
position in order that the petitioner may be held responsible for his grossly negligent act, it being sufficient
that the act of driving at the time of the incident was for the benefit of the petitioner. Hence, the fact that
Funtecha was not the school driver or was not acting within the scope of his janitorial duties does not
Labor 1
relieve the petitioner of the burden of rebutting the presumption juris tantum that there was negligence on
its part either in the selection of a servant or employee, or in the supervision over him. The petitioner has
failed to show proof of its having exercised the required diligence of a good father of a family over its
employees Funtecha and Allan.

The Court reiterates that supervision includes the formulation of suitable rules and regulations for the guidance of its
employees and the issuance of proper instructions intended for the protection of the public and persons with whom
the employer has relations through his employees. (Bahia v. Litonjua and Leynes, supra, at p. 628; Phoenix
Construction, v. Intermediate Appellate Court, 148 SCRA 353 [1987])

An employer is expected to impose upon its employees the necessary discipline called for in the performance of any
act indispensable to the business and beneficial to their employer.

In the present case, the petitioner has not shown that it has set forth such rules and guidelines as would prohibit any
one of its employees from taking control over its vehicles if one is not the official driver or prohibiting the driver and
son of the Filamer president from authorizing another employee to drive the school vehicle. Furthermore, the
petitioner has failed to prove that it had imposed sanctions or warned its employees against the use of its vehicles
by persons other than the driver.

The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled manner by which
Funtecha drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772 [1918]). In the absence of evidence
that the petitioner had exercised the diligence of a good father of a family in the supervision of its employees, the
law imposes upon it the vicarious liability for acts or omissions of its employees. (Umali v. Bacani, 69 SCRA 263
[1976]; Poblete v. Fabros, 93 SCRA 200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v.
Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc. v. Baesa, 179 SCRA 384
[1989]) The liability of the employer is, under Article 2180, primary and solidary. However, the employer shall have
recourse against the negligent employee for whatever damages are paid to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not made a party defendant in the civil
case for damages. This is quite understandable considering that as far as the injured pedestrian, plaintiff Potenciano
Kapunan, was concerned, it was Funtecha who was the one driving the vehicle and presumably was one authorized
by the school to drive. The plaintiff and his heirs should not now be left to suffer without simultaneous recourse
against the petitioner for the consequent injury caused by a janitor doing a driving chore for the petitioner even for a
short while. For the purpose of recovering damages under the prevailing circumstances, it is enough that the plaintiff
and the private respondent heirs were able to establish the existence of employer-employee relationship between
Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an act not for an independent purpose
of his own but in furtherance of the business of his employer. A position of responsibility on the part of the petitioner
has thus been satisfactorily demonstrated.

WHEREFORE, the motion for reconsideration of the decision dated October 16, 1990 is hereby GRANTED. The
decision of the respondent appellate court affirming the trial court decision is REINSTATED.

Labor 1
 3.) [G.R. NO. 152894 : August 17, 2007]

CENTURY CANNING CORPORATION, Petitioner, v. COURT OF APPEALS and GLORIA C.

PALAD, Respondents.

DECISION

CARPIO, J.:

The Case

This is a Petition for Review 1 of the Decision2 dated 12 November 2001 and the Resolution dated 5
April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.

The Facts

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish
cleaner" at petitioner's tuna and sardines factory. Palad signed on 17 July 1997 an apprenticeship
agreement3 with petitioner. Palad received an apprentice allowance of P138.75 daily. On 25 July
1997, petitioner submitted its apprenticeship program for approval to the Technical Education and
Skills Development Authority (TESDA) of the Department of Labor and Employment (DOLE). On 26
September 1997, the TESDA approved petitioner's apprenticeship program.4

According to petitioner, a performance evaluation was conducted on 15 November 1997, where

petitioner gave Palad a rating of N.I. or "needs improvement" since she scored only 27.75% based
on a 100% performance indicator. Furthermore, according to the performance evaluation, Palad
incurred numerous tardiness and absences. As a consequence, petitioner issued a termination
notice5 dated 22 November 1997 to Palad, informing her of her termination effective at the close of
business hours of 28 November 1997.

Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-
rated 13th month pay for the year 1997.

On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but ordered
petitioner to pay Palad her last salary and her pro-rated 13th month pay. The dispositive portion of
the Labor Arbiter's decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the complaint for
illegal dismissal filed by the complainant against the respondents in the above-entitled case should
be, as it is hereby DISMISSED for lack of merit. However, the respondents are hereby ordered to pay
the complainant the amount of ONE THOUSAND SIX HUNDRED THIRTY-TWO PESOS (P1,632.00),
representing her last salary and the amount of SEVEN THOUSAND TWO HUNDRED TWENTY EIGHT
(P7,228.00) PESOS representing her prorated 13th month pay.

All other issues are likewise dismissed.

SO ORDERED.6

On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the Labor
Arbiter's decision, thus:

Labor 1
WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is hereby
MODIFIED in that, in addition, respondents are ordered to pay complainant's backwages for two (2)
months in the amount of P7,176.00 (P138.75 x 26 x 2 mos.). All other dispositions of the Arbiter as
appearing in the dispositive portion of his decision are AFFIRMED.

SO ORDERED.7

Upon denial of Palad's motion for reconsideration, Palad filed a special civil action for certiorari with
the Court of Appeals. On 12 November 2001, the Court of Appeals rendered a decision, the
dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE and
a new one entered, to wit:

(a) finding the dismissal of petitioner to be illegal;

(b) ordering private respondent to pay petitioner her underpayment in wages;

(c) ordering private respondent to reinstate petitioner to her former position without loss of seniority
rights and to pay her full backwages computed from the time compensation was withheld from her
up to the time of her reinstatement;

(d) ordering private respondent to pay petitioner attorney's fees equivalent to ten (10%) per cent of
the monetary award herein; and cralawlibrary

(e) ordering private respondent to pay the costs of the suit.

SO ORDERED.8

The Ruling of the Court of Appeals

The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and
binding because it was executed more than two months before the TESDA approved petitioner's
apprenticeship program. The Court of Appeals cited Nitto Enterprises v. National Labor Relations
Commission,9 where it was held that prior approval by the DOLE of the proposed apprenticeship
program is a condition sine qua non before an apprenticeship agreement can be validly entered into.

The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals ruled
that petitioner failed to show that Palad was properly apprised of the required standard of
performance. The Court of Appeals likewise held that Palad was not afforded due process because
petitioner did not comply with the twin requirements of notice and hearing.

The Issues

Petitioner raises the following issues:

1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT

PRIVATE RESPONDENT WAS NOT AN APPRENTICE; and cralawlibrary

2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT

PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING
THE SERVICE OF PRIVATE RESPONDENT.10

Labor 1
 The Ruling of the Court

The petition is without merit.

Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring
of Apprentices

The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship
agreement with an employer.11 One of the objectives of Title II (Training and Employment of Special
Workers) of the Labor Code is to establish apprenticeship standards for the protection of
apprentices.12 In line with this objective, Articles 60 and 61 of the Labor Code provide:

ART. 60. Employment of apprentices. - Only employers in the highly technical industries may
employ apprentices and only in apprenticeable occupations approved by the Minister of
Labor and Employment. (Emphasis supplied) cralawlibrary

ART. 61. Contents of apprenticeship agreements. - Apprenticeship agreements, including the wage

rates of apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The
period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for
wage rates below the legal minimum wage, which in no case shall start below 75 percent
of the applicable minimum wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Minister of Labor and Employment. The
Ministry shall develop standard model programs of apprenticeship. (Emphasis supplied) cralawlibrary

In Nitto Enterprises v. National Labor Relations Commission,13 the Court cited Article 61 of the Labor
Code and held that an apprenticeship program should first be approved by the DOLE before an
apprentice may be hired, otherwise the person hired will be considered a regular employee. The
Court held:

In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care
maker/molder." On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship agreement was
filed only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor and
Employment, the apprenticeship agreement was enforced the day it was signed.

Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice
shall be entered only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed

apprenticeship program is, therefore, a condition sine qua non before an apprenticeship
agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously
give rise to an employer-apprentice relationship.

Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any apprenticeship program has to be

Labor 1
secured as a condition sine qua non before any such apprenticeship agreement can be fully enforced.
The role of the DOLE in apprenticeship programs and agreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as a regular employee of petitioner
as defined by Article 280 of the Labor Code x x x. (Emphasis supplied)14

Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority over
apprenticeship programs from the Bureau of Local Employment of the DOLE to the TESDA.16 RA 7796
emphasizes TESDA's approval of the apprenticeship program as a pre-requisite for the hiring of
apprentices. Such intent is clear under Section 4 of RA 7796:

SEC. 4. Definition of Terms. - As used in this Act:

xxx

j) "Apprenticeship" training within employment with compulsory related theoretical instructions

involving a contract between an apprentice and an employer on an approved apprenticeable
occupation;

k) "Apprentice" is a person undergoing training for an approved apprenticeable

occupation during an established period assured by an apprenticeship agreement;

l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to train the
apprentice who in turn accepts the terms of training for a recognized apprenticeable
occupation emphasizing the rights, duties and responsibilities of each party;

m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body

and approved for apprenticeship by the Authority [TESDA]; (Emphasis supplied) cralawlibrary

In this case, the apprenticeship agreement was entered into between the parties before petitioner
filed its apprenticeship program with the TESDA for approval. Petitioner and Palad executed the
apprenticeship agreement on 17 July 1997 wherein it was stated that the training would start on
17 July 1997 and would end approximately in December 1997.17 On 25 July 1997, petitioner
submitted for approval its apprenticeship program, which the TESDA subsequently
approved on 26 September 1997.18 Clearly, the apprenticeship agreement was enforced even
before the TESDA approved petitioner's apprenticeship program. Thus, the apprenticeship agreement
is void because it lacked prior approval from the TESDA.

The TESDA's approval of the employer's apprenticeship program is required before the employer is
allowed to hire apprentices. Prior approval from the TESDA is necessary to ensure that only
employers in the highly technical industries may employ apprentices and only in apprenticeable
occupations.19 Thus, under RA 7796, employers can only hire apprentices for apprenticeable
occupations which must be officially endorsed by a tripartite body and approved for apprenticeship by
the TESDA. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

This is to ensure the protection of apprentices and to obviate possible abuses by prospective
employers who may want to take advantage of the lower wage rates for apprentices and circumvent
the right of the employees to be secure in their employment.

The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was
further emphasized by the DOLE with the issuance of Department Order No. 68-04 on 18 August
Labor 1
2004. Department Order No. 68-04, which provides the guidelines in the implementation of the
Apprenticeship and Employment Program of the government, specifically states that no enterprise
shall be allowed to hire apprentices unless its apprenticeship program is registered and
approved by TESDA.20

Since Palad is not considered an apprentice because the apprenticeship agreement was
enforced before the TESDA's approval of petitioner's apprenticeship program, Palad is
deemed a regular employee performing the job of a "fish cleaner." Clearly, the job of a
"fish cleaner" is necessary in petitioner's business as a tuna and sardines factory. Under
Article 28021 of the Labor Code, an employment is deemed regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade
of the employer.

Illegal Termination of Palad

We shall now resolve whether petitioner illegally dismissed Palad.

Under Article 27922 of the Labor Code, an employer may terminate the services of an employee for
just causes23 or for authorized causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the
employer must send the employee who is about to be terminated, a written notice stating the causes
for termination and must give the employee the opportunity to be heard and to defend himself. Thus,
to constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be
for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard
and to defend himself.26

In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and
poor efficiency of performance. Under Section 25, Rule VI, Book II of the Implementing Rules of the
Labor Code, habitual absenteeism and poor efficiency of performance are among the valid causes for
which the employer may terminate the apprenticeship agreement after the probationary period.

However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palad's
termination:

As to the validity of complainant's dismissal in her status as an apprentice, suffice to state that the
findings of the Arbiter that complainant was dismissed due to failure to meet the standards is
nebulous. What clearly appears is that complainant already passed the probationary status of the
apprenticeship agreement of 200 hours at the time she was terminated on 28 November 1997 which
was already the fourth month of the apprenticeship period of 1000 hours. As such, under the Code,
she can only be dismissed for cause, in this case, for poor efficiency of performance on the job or in
the classroom for a prolonged period despite warnings duly given to the apprentice.

We noted that no clear and sufficient evidence exist to warrant her dismissal as an
apprentice during the agreed period. Besides the absence of any written warnings given to
complainant reminding her of "poor performance," respondents' evidence in this respect
consisted of an indecipherable or unauthenticated xerox of the performance evaluation
allegedly conducted on complainant. This is of doubtful authenticity and/or credibility,
being not only incomplete in the sense that appearing thereon is a signature (not that of
complainant) side by side with a date indicated as "1/16/98". From the looks of it, this
signature is close to and appertains to the typewritten position of "Division/Department
Head", which is below the signature of complainant's immediate superior who made the
evaluation indicated as "11-15-97."

The only conclusion We can infer is that this evaluation was made belatedly, specifically,
after the filing of the case and during the progress thereof in the Arbitral level, as shown
Labor 1
that nothing thereon indicate that complainant was notified of the results. Its authenticity
therefor, is a big question mark, and hence lacks any credibility. Evidence, to be admissible
in administrative proceedings, must at least have a modicum of authenticity. This,
respondents failed to comply with. As such, complainant is entitled to the payment of her wages for
the remaining two (2) months of her apprenticeship agreement.27 (Emphasis supplied) cralawlibrary

Indeed, it appears that the Labor Arbiter's conclusion that petitioner validly terminated Palad was
based mainly on the performance evaluation allegedly conducted by petitioner. However, Palad
alleges that she had no knowledge of the performance evaluation conducted and that she was not
even informed of the result of the alleged performance evaluation. Palad also claims she did not
receive a notice of dismissal, nor was she given the chance to explain. According to petitioner, Palad
did not receive the termination notice because Palad allegedly stopped reporting for work after being
informed of the result of the evaluation.

Under Article 227 of the Labor Code, the employer has the burden of proving that the termination
was for a valid or authorized cause.28 Petitioner failed to substantiate its claim that Palad was
terminated for valid reasons. In fact, the NLRC found that petitioner failed to prove the authenticity
of the performance evaluation which petitioner claims to have conducted on Palad, where Palad
received a performance rating of only 27.75%. Petitioner merely relies on the performance
evaluation to prove Palad's inefficiency. It was likewise not shown that petitioner ever apprised Palad
of the performance standards set by the company. When the alleged valid cause for the termination
of employment is not clearly proven, as in this case, the law considers the matter a case of illegal
dismissal.29

Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance
evaluation on Palad, petitioner failed to warn Palad of her alleged poor performance. In fact, Palad
denies any knowledge of the performance evaluation conducted and of the result thereof. Petitioner
likewise admits that Palad did not receive the notice of termination30 because Palad allegedly stopped
reporting for work. The records are bereft of evidence to show that petitioner ever gave Palad the
opportunity to explain and defend herself. Clearly, the two requisites for a valid dismissal are lacking
in this case.

WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5 April
2002 of the Court of Appeals in CA-G.R. SP No. 60379.

Labor 1
4.) G.R. No. 122917 July 12, 1999

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL

ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON GEORGE P. LIGUTAN JR.,
CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE
CABANDUCOS, COCOY NOBELLO, DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q.
MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY V.
GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPCION,
DINDO VALERIO, ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA
SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA,
ELIZABETH VENTURA, GRACE S. PARDO and TIMOSA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST COMPANY, respondents.

PANGANIBAN, J.:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and
conditions of employment as qualified able-bodied employees. Once they have attained the status of regular
workers, they should be accorded all the benefits granted by law, notwithstanding written or verbal contracts to the
contrary. This treatments is rooted not merely on charity or accomodation, but on justice for all.

The Case

Challenged in the Petition for Certiorari   before us is the June 20, 1995 Decision  of the National Labor Relations
1 2

Commission (NLRC),   which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor
3

arbiter's Decision disposed as follows: 

4

WHEREFORE, judgment is hereby rendered dismissing the above-mentioned complaint for lack of
merit.

Also assailed is the August 4, 1995 Resolution   of the NLRC, which denied the Motion for Reconsideration.
5

The Facts

The facts were summarized by the NLRC in this wise:  6

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various
periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and
Counters through a uniformly worded agreement called "Employment Contract for Handicapped
Workers". (pp. 68 & 69, Records) The full text of said agreement is quoted below:

EMPLOYMENT CONTRACT FOR

HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented

Labor 1
 herein by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter
referred to as the "BANK");

-and-

—————, ————— years old, of legal age, ————, and residing at (hereinafter
referred to as the ("EMPLOYEE").

WITNESSETH : That

WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a
need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
welfare and make them productive, self-reliant and useful citizens to enable them to
fully integrate in the mainstream of society;

WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s]
been approached by some civic-minded citizens and authorized government
agencies [regarding] the possibility of hiring handicapped workers for these positions;

WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]

recommended for possible employment with the BANK;

NOW, THEREFORE, for and in consideration of the foregoing premises and in

compliance with Article 80 of the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this Employment Contract as follows:

1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK, as Money Sorter and Counter.

2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:

i. Sort out bills according to color;

ii. Count each denomination per hundred, either

manually or with the aid of a counting machine;

iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles; and

v. Submit bundled bills to the bank teller for

verification.

3. The EMPLOYEE shall undergo a training period of one (1) month, after which the
BANK shall determine whether or not he/she should be allowed to finish the
remaining term of this Contract.

4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,

subject to adjustment in the sole judgment of the BANK, payable every 15th and end
of the month.1âwphi1.nêt

Labor 1
 5. The regular work schedule of the EMPLOYEE shall be five (5) days per week,
from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be
required to perform overtime work as circumstance may warrant, for which overtime
work he/she [shall] be paid an additional compensation of 125% of his daily rate if
performed during ordinary days and 130% if performed during Saturday or [a] rest
day.

6. The EMPLOYEE shall likewise be entitled to the following benefits:

i. Proportionate 13th month pay based on his basic

daily wage.

ii. Five (5) days incentive leave.

iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK
Rules and Regulations and Policies, and to conduct himself/herself in a manner
expected of all employees of the BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been employed
under a special employment program of the BANK, for which reason the standard
hiring requirements of the BANK were not applied in his/her case. Consequently, the
EMPLOYEE acknowledges and accepts the fact that the terms and conditions of the
employment generally observed by the BANK with respect to the BANK's regular
employee are not applicable to the EMPLOYEE, and that therefore, the terms and
conditions of the EMPLOYEE's employment with the BANK shall be governed solely
and exclusively by this Contract and by the applicable rules and regulations that the
Department of Labor and Employment may issue in connection with the employment
of disabled and handicapped workers. More specifically, the EMPLOYEE hereby
acknowledges that the provisions of Book Six of the Labor Code of the Philippines as
amended, particularly on regulation of employment and separation pay are not
applicable to him/her.

9. The Employment Contract shall be for a period of six (6) months or from —— to
—— unless earlier terminated by the BANK for any just or reasonable cause. Any
continuation or extension of this Contract shall be in writing and therefore this
Contract will automatically expire at the end of its terms unless renewed in writing by
the BANK.

IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
—— day of ———, ——— at Intramuros, Manila, Philippines.

In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in 1990,
nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one (21). Their employment[s]
were renewed every six months such that by the time this case arose, there were fifty-six (56)
deaf-mutes who were employed by respondent under the said employment agreement. The last one
was Thelma Malindoy who was employed in 1992 and whose contract expired on July 1993.

xxx xxx xxx

Disclaiming that complainants were regular employees, respondent Far East Bank and Trust
Company maintained that complainants who are a special class of workers — the hearing
impaired employees were hired temporarily under [a] special employment arrangement which
was a result of overtures made by some civic and political personalities to the respondent Bank; that
complainant[s] were hired due to "pakiusap" which must be considered in the light of the context

Labor 1
 career and working environment which is to maintain and strengthen a corps of professionals trained
and qualified officers and regular employees who are baccalaureate degree holders from excellent
schools which is an unbending policy in the hiring of regular employees; that in addition to this,
training continues so that the regular employee grows in the corporate ladder; that the idea of hiring
handicapped workers was acceptable to them only on a special arrangement basis; that it was
adopted the special program to help tide over a group of workers such as deaf-mutes like the
complainants who could do manual work for the respondent Bank; that the task of counting and
sorting of bills which was being performed by tellers could be assigned to deaf-mutes that the
counting and sorting of money are tellering works which were always logically and naturally part and
parcel of the tellers' normal functions; that from the beginning there have been no separate items in
the respondent Bank plantilla for sortes or counters; that the tellers themselves already did the
sorting and counting chore as a regular feature and integral part of their duties (p. 97, Records); that
through the "pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting and sorting
bills in favor of deaf-mutes without creating new positions as there is no position either in the
respondent or in any other bank in the Philippines which deals with purely counting and sorting of
bills in banking operations.

Petitioners specified when each of them was hired and dimissed, viz:  7

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93
2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94
3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93
4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94
5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-94
6. ALBERT HALLARE West 4-Jan-91 9-Jan-94
7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93
8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93
9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94
10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93
11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93
12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93
13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93
14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93
15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-93
16. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93
17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93
18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93
19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93
20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93
21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93
22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93
23. JOSE E. SALES West 6-Aug-92 12-Oct-93
24. ISABEL MAMAUAG West 8-May-92 10-Nov-93
25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94
26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93
27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93
28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93

Labor 1
 29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93
30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93
31. MARIA ISABEL B.CONCEPCION West 6-Sep-90 6-Feb-94
32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93
33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93
34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93
35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94
36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93
37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93
38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93
39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93
40. PINKY BALOLOA West 3-Jun-91 2-Dec-93
41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic]
42. GRACE S. PARDO West 4-Apr-90 13-Mar-94
43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence, this recourse to
this Court. 
9

The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular employees under
Article 280 of the Labor Code, as amended, Respondent Commission ratiocinated as follows:

We agree that Art. 280 is not controlling herein. We give due credence to the conclusion that
complainants were hired as an accommodation to [the] recommendation of civic oriented
personalities whose employment[s] were covered by . . . Employment Contract[s] with special
provisions on duration of contract as specified under Art. 80. Hence, as correctly held by the Labor
Arbiter a quo, the terms of the contract shall be the law between the parties. 
10

The NLRC also declared that the Magna Carta for Disabled Persons was not applicable, "considering the prevailing
circumstances/milieu of the case."

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:

I. The Honorable Commission committed grave abuse of discretion in holding that the
petitioners — money sorters and counters working in a bank — were not regular employees.

II. The Honorable Commission committed grave abuse of discretion in holding that the employment
contracts signed and renewed by the petitioners — which provide for a period of six (6) months —
were valid.

III. The Honorable Commission committed grave abuse of discretion in not applying the provisions of
the Magna Carta for the Disabled (Republic Act No. 7277), on proscription against discrimination
against disabled persons.  11

In the main, the Court will resolve whether petitioners have become regular employees.

This Court's Ruling

Labor 1
The petition is meritorious. However, only the employees, who worked for more than six months and whose
contracts were renewed are deemed regular. Hence, their dismissal from employement was illegal.

Preliminary Matter:

Propriety of Certiorari

Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is not
allowed in a petition for certiorari. Specifically, it maintains that the Court cannot pass upon the findings of public
respondent that petitioners were not regular employees.

True, the Court, as a rule, does not review the factual findings of public respondents in a certiorari proceeding. In
resolving whether the petitioners have become regular employees, we shall not change the facts found by the public
respondent. Our task is merely to determine whether the NLRC committed grave abuse of discretion in applying the
law to the established facts, as above-quoted from the assailed Decision.

Main Issue

Are Petitioners Regular Employee?

Petitioners maintain that they should be considered regular employees, because their task as money sorters and
counters was necessary and desirable to the business of respondent bank. They further allege that their contracts
served merely to preclude the application of Article 280 and to bar them from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as "special workers and should not
in any way be considered as part of the regular complement of the Bank."   Rather, they were "special" workers
12

under Article 80 of the Labor Code. Private respondent contends that it never solicited the services of petitioners,
whose employment was merely an "accommodation" in response to the requests of government officials and civic-
minded citizens. They were told from the start, "with the assistance of government representatives," that they could
not become regular employees because there were no plantilla positions for "money sorters," whose task used to be
performed by tellers. Their contracts were renewed several times, not because of need "but merely for humanitarian
reasons." Respondent submits that "as of the present, the "special position" that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew anymore their special
employment contracts."

At the outset, let it be known that this Court appreciates the nobility of private respondent's effort to provide
employment to physically impaired individuals and to make them more productive members of society. However, we
cannot allow it to elude the legal consequences of that effort, simply because it now deems their employment
irrelevant. The facts, viewed in light of the Labor Code and the Magna Carta for Disabled Persons, indubitably show
that the petitioners, except sixteen of them, should be deemed regular employees. As such, they have acquired
legal rights that this Court is duty-bound to protect and uphold, not as a matter of compassion but as a consequence
of law and justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of one month,
after which the employer shall determine whether or not they should be allowed to finish the 6-month term of the
contract. Furthermore, the employer may terminate the contract at any time for a just and reasonable cause. Unless
renewed in writing by the employer, the contract shall automatically expire at the end of the term. 1âwphi1.nêt

According to private respondent, the employment contracts were prepared in accordance with Article 80 of the
Labor code, which provides;

Art. 80. Employment agreement. — Any employer who employs handicapped workers shall enter
into an employment agreement with them, which agreement shall include:

(a) The names and addresses of the handicapped workers to be employed;

Labor 1
 (b) The rate to be paid the handicapped workers which shall be not less than seventy
five (75%) per cent of the applicable legal minimum wage;

(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives.

The stipulations in the employment contracts indubitably conform with the aforecited provision. Succeeding events
and the enactment of RA No. 7277 (the Magna Carta for Disabled Persons),   however, justify the application of
13

Article 280 of the Labor Code.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the
contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the
handicapped workers and the hiring of others lead to the conclusion that their tasks were beneficial and necessary
to the bank. More important, these facts show that they were qualified to perform the responsibilities of their
positions. In other words, their disability did not render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the
same terms and conditions of employment as a qualified able-bodied person. Section 5 of the Magna Carta
provides:

Sec. 5. Equal Opportunity for Employment. — No disabled person shall be denied access to
opportunities for suitable employment. A qualified disabled employee shall be subject to the
same terms and conditions of employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able bodied person.

The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-bodied
persons, they are thus covered by Article 280 of the Labor Code, which provides:

Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

Provided, That, any employee who has rendered at least one year of service, whether such service
is continuous or broken, shall be considered as regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity exists.

The test of whether an employee is regular was laid down in De Leon v. NLRC,   in which this Court held:
14

The primary standard, therefore, of determining regular employment is the reasonable

connection between the particular activity performed by the employee in relation to the usual
trade or business of the employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has been performing the job for at least one
year, even if the performance is not continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the necessity if not indispensibility of
Labor 1
 that activity to the business. Hence, the employment is considered regular, but only with respect to
such activity, and while such activity exist.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen of them, petitioners performed these tasks for more than six
months. Thus, the following twenty-seven petitioners should be deemed regular employees: Marites
Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M.
Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G.
Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B.
Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida
Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making
permanent casuals of our lowly employees by the simple expedient of extending to them probationary
appointments, ad infinitum."  The contract signed by petitioners is akin to a probationary employment, during which
15

the bank determined the employees' fitness for the job. When the bank renewed the contract after the lapse of the
six-month probationary period, the employees thereby became regular employees.   No employer is allowed to
16

determine indefinitely the fitness of its employees.

As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their services may be
terminated only for a just or authorized cause. Because respondent failed to show such cause,   these twenty-seven
17

petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatement without loss of
seniority rights and other privileges.   Considering the allegation of respondent that the job of money sorting is no
18

longer available because it has been assigned back to the tellers to whom it originally belonged,   petitioners are
18

hereby awarded separation pay in lieu of reinstatement.  20

Because the other sixteen worked only for six months, they are not deemed regular employees and hence not
entitled to the same benefits.

Applicability of the

Brent Ruling

Respondent bank, citing Brent School v. Zamora   in which the Court upheld the validity of an employment contract
21

with a fixed term, argues that the parties entered into the contract on equal footing. It adds that the petitioners had in
fact an advantage, because they were backed by then DSWD Secretary Mita Pardo de Tavera and Representative
Arturo Borjal.

We are not persuaded. The term limit in the contract was premised on the fact that the petitioners were disabled,
and that the bank had to determine their fitness for the position. Indeed, its validity is based on Article 80 of the
Labor Code. But as noted earlier, petitioners proved themselves to be qualified disabled persons who, under the
Magna Carta for Disabled Persons, are entitled to terms and conditions of employment enjoyed by qualified able-
bodied individuals; hence, Article 80 does not apply because petitioners are qualified for their positions. The
validation of the limit imposed on their contracts, imposed by reason of their disability, was a glaring instance of the
very mischief sought to be addressed by the new law.

Moreover, it must be emphasized that a contract of employment is impressed with public interest.   Provisions of
22

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."   Clearly, the agreement of the parties regarding the period of employment cannot prevail over the provisions
23

of the Magna Carta for Disabled Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.

Respondent's reason for terminating the employment of petitioners is instructive. Because the Bangko Sentral ng
Pilipinas (BSP) required that cash in the bank be turned over to the BSP during business hours from 8:00 a.m. to
5:00 p.m., respondent resorted to nighttime sorting and counting of money. Thus, it reasons that this task "could not

Labor 1
be done by deaf mutes because of their physical limitations as it is very risky for them to travel at night."   We find
24

no basis for this argument. Travelling at night involves risks to handicapped and able-bodied persons alike. This
excuse cannot justify the termination of their employment.

Other Grounds Cited by Respondent

Respondent argues that petitioners were merely "accommodated" employees. This fact does not change the nature
of their employment. As earlier noted, an employee is regular because of the nature of work and the length of
service, not because of the mode or even the reason for hiring them.

Equally unavailing are private respondent's arguments that it did not go out of its way to recruit petitioners, and that
its plantilla did not contain their positions. In L. T. Datu v. NLRC,   the Court held that "the determination of whether
25

employment is casual or regular does not depend on the will or word of the employer, and the procedure of
hiring . . . but on the nature of the activities performed by the employee, and to some extent, the length of
performance and its continued existence."

Private respondent argues that the petitioners were informed from the start that they could not become regular
employees. In fact, the bank adds, they agreed with the stipulation in the contract regarding this point. Still, we are
not persuaded. The well-settled rule is that the character of employment is determined not by stipulations in the
contract, but by the nature of the work performed.   Otherwise, no employee can become regular by the simple
26

expedient of incorporating this condition in the contract of employment.

In this light, we iterate our ruling in Romares v. NLRC:  27

Art. 280 was emplaced in our statute books to prevent the circumvention of the employee's right to
be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements
inconsistent with the concept of regular employment defined therein. Where an employee has been
engaged to perform activities which are usually necessary or desirable in the usual business of the
employer, such employee is deemed a regular employee and is entitled to security of tenure
notwithstanding the contrary provisions of his contract of employment.

xxx xxx xxx

At this juncture, the leading case of Brent School, Inc. v. Zamora proves instructive. As reaffirmed in
subsequent cases, this Court has upheld the legality of fixed-term employment. It ruled 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. But this Court went on to say that where from the circumstances it
is apparent that the periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to public policy and morals.

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the working class, but
also the concern of the State for the plight of the disabled. The noble objectives of Magna Carta for Disabled
Persons are not based merely on charity or accommodation, but on justice and the equal treatment
of qualified persons, disabled or not. In the present case, the handicap of petitioners (deaf-mutes) is not a hindrance
to their work. The eloquent proof of this statement is the repeated renewal of their employment contracts. Why then
should they be dismissed, simply because they are physically impaired? The Court believes, that, after showing
their fitness for the work assigned to them, they should be treated and granted the same rights like any other regular
employees.

In this light, we note the Office of the Solicitor General's prayer joining the petitioners' cause. 
28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision and the August
4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company
is hereby ORDERED to pay back wages and separation pay to each of the following twenty-seven (27) petitioners,
namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare,

Labor 1
Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales, Isabel
Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R.
Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie
Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby directed to
compute the exact amount due each of said employees, pursuant to existing laws and regulations, within fifteen
days from the finality of this Decision. No costs.
1âwphi1.nêt

Labor 1