G.R. No.

122917, July 12, 1999

Constitutional Law | Declaration of Principles and Sate Policies | Protection to

labor |Labor law | Regularization | Qualified disabled persons

FACTS:

The 43 petitioners 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.”

The said contract provided, among others, that: (1) “there are certain positions in
the bank which may be filled-up by disabled and handicapped persons, particularly
deafmutes, and the bank has been approached by some civic-minded citizens and
authorized government agencies regarding the possibility of hiring handicapped
workers for these positions”; (2) “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”; (3) “the Employment Contract shall be for a period of six (6) months
unless earlier terminated by the bank for any just or reasonable cause.”

The employments of the said deaf-mute were renewed every six (6) months such
that by the time the present case arose, there were fifty-six (56) deaf-mutes who
were employed by respondent bank under the said employment agreement.

However, sometime in 1993 and 1994, respondent bank decided not to renew the
contracts anymore and hence terminated petitioners’ employments.

Petitioners then filed a case with the Labor Arbiter, arguing that they were illegally
dismissed.

Contentions of the respondent bank: (1) Petitioners were hired only as “special
workers” and should not in any way be considered as part of the regular
complement of the Bank; (2) 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; (3) Their contracts were renewed
several times, not because of need “but merely for humanitarian reasons”; (4) From
the beginning, there have been no separate items in the respondent bank’s plantilla
for sorters or counters and the tellers themselves already did the sorting and
counting chore as an integral part of their duties; and (5) As of the present, the
“special position” that was created for the petitioners no longer exists in private
respondent bank, after the latter had decided not to renew anymore their special
employment contracts.

The Labor Arbiter dismissed the case filed by petitioners for lack of merit, which
the NLRC affirmed upon appeal, ratiocinating that, “petitioners were hired as an
accommodation to the recommendation of civic oriented personalities whose
employments were covered by the Employment Contracts 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.”

Petitioners then went to the SC via petition for certiorari.

Issues:

(1) Whether or not petitioners are regular employees;

(2) Whether or not petitioners were illegally dismissed.

RULING:

(1) Yes. 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 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. 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; (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 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: “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 that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity, and while
such activity exists.” Without a doubt, the task of counting and sorting bills is
necessary and desirable to the business of respondent bank. Petitioners performed
these tasks for more than six (6) months. Thus, petitioners should be deemed
regular employees. 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 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 determine indefinitely the fitness of its employees.

(2) Yes. As regular employees, petitioners are entitled to security of tenure; that is,
their services may be terminated only for a just or authorized cause. Because
respondent bank failed to show such cause, 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 longer available because it has been assigned back
to the tellers to whom it originally belonged, petitioners are hereby awarded
separation pay in lieu of reinstatement.

Held:

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.
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:
“Section 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, x x x”
“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 indispensability of
that activity to the business.  Hence, the employment is considered regular, but only
with respect to such activity, and while such activity exists.”
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.
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. 
Petition granted