Mantle Trading vs NLRC G.R. No.

166705, July 28, 2009

FACTS
Petitioner company, Mantle Trading Services, Inc., is engaged in the fishing business. Sometime in
June 1989, Madriaga was hired by petitioner company as a batilyo or fish hauler. Subsequently, he became
a tagapuno (someone who filled up tubs with fish). He worked from 6:00 p.m. up to 6:00 a.m. the following
day with a daily pay ofP150.00.
On August 10, 1999, Madriaga was reported by one Henry Gallos, a fish broker, to have received money
from a fish trader, Mr. Edwin Alfaro. As consideration, Madriaga would put more fish in Alfaros tubs. On
August 25, 1999, Madriaga was again reported to have received money from Alfaro for the same illicit purpose.
In both incidents, formal incident reports were submitted to the petitioner company.
On September 11, 1999, Madriaga was allegedly barred by the payroll master, Mr. Charlie Baqued, from
reporting for work. Petitioner company, on the other hand, alleged that Madriaga abandoned his work when he
was about to be investigated for the two incident reports.
On February 7, 2001, Madriaga filed a complaint with the Regional Office of the Department of Labor
and Employment (DOLE)National Capital Region (NCR) against petitioners, for illegal dismissal,
underpayment of wages and nonpayment of holiday pay, 13 th month pay, overtime pay, service incentive leave
pay and night shift differential pay.
On June 20, 2001, the DOLE-NCR Regional Office endorsed the complaint to the NCR Arbitration
Branch. Petitioner company alleged, among others, that Madriaga was a seasonal employee and he was not
dismissed. In a decision rendered on August 26, 2002, Labor Arbiter Melquiades Sol D. Del Rosario found
Madriaga to be a regular employee who was illegally dismissed.
ISSUE
RULING
We affirm the award of salary differentials, 13 th month pay and holiday pay, awarded by the NLRC and
the Court of Appeals. We note that although petitioner company had cause to terminate Madriaga, this has no
bearing on the issue of award of salary differentials, holiday pay and 13 th month pay because prior to his valid
dismissal, he performed work as a regular employee of petitioner company, and he is entitled to the benefits
provided under the law. Thus, in the case of Agabon, even while the Court found that the dismissal was for a
just cause, the employee was still awarded his monetary claims.
An employee should be compensated for the work he has rendered in accordance with the minimum
wage, and must be appropriately remunerated when he was suffered to work on a regular holiday during the
time he was employed by the petitioner company. As regards the 13 th month pay, an employee who was
terminated at any time before the time for payment of the 13 th month pay is entitled to this monetary benefit in

proportion to the length of time he worked during the year, reckoned from the time he started working during
the calendar year up to the time of his termination from the service.
As a general rule, one who pleads payment has the burden of proving it. Even where the employee
must allege nonpayment, the general rule is that the burden rests on the employer to prove payment, rather
than on the employee to prove nonpayment. The reason for the rule is that the pertinent personnel files,
payrolls, records, remittances and other similar documents which will show that overtime, differentials,
service incentive leave and other claims of workers have been paid are not in the possession of the
employee but in the custody and absolute control of the employer. Since in the case at bar petitioner company
has not shown any proof of payment of the correct amount of salary, holiday pay and 13 th month pay, we affirm
the award of Madriagas monetary claims.
IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals in C.A.-G.R. SP No.
84796, dated August 31, 2004, annulling and setting aside the Decision of the NLRC dated January 30, 2004
and reinstating the Decision dated August 26, 2002 of the Labor Arbiter finding respondent Pablo S. Madriaga
a regular employee and ordering the petitioner company to pay the amount of twenty-four thousand, two
hundred forty pesos (P24,240.00) as salary differentials, five thousand, one hundred forty-eight pesos
(P5,148.00) as 13th month pay, and one thousand, nine hundred eighty pesos (P1,980.00) as holiday pay, is
hereby AFFIRMED. In accordance with the ruling inAgabon, the award for backwages is deleted, but in
addition, the amount of thirty thousand pesos as nominal damages (P30,000.00) is awarded to the respondent.
The aggregate sum of the award to Madriaga shall be the total of sixty-one thousand, three hundred twentyeight pesos (P61,328.00).
Kimberly-Clark Phils. Vs Secretay of Labor, 538 SCRA 353
FACTS
On June 30, 1986, the Collective Bargaining Agreement (CBA) executed by and between
Kimberly-Clark (Phils.), Inc., (Kimberly), a Philippine-registered corporation engaged in the
manufacture, distribution, sale and exportation of paper products, and United Kimberly-Clark
Employees Union-Philippine Transport and General Workers Organization (UKCEO-PTGWO)
expired. Within the freedom period, on April 21, 1986, KILUSAN-OLALIA, then a newly-formed
labor organization, challenged the incumbency of UKCEO-PTGWO, by filing a petition for
certification election with the Ministry (now Department) of Labor and Employment (MOLE),
Regional Office No. IV, Quezon City.
A certification election was subsequently conducted on July 1, 1986 with UKCEOPTGWO winning by a margin of 20 votes over KILUSAN-OLALIA. Remaining as uncounted
were 64 challenged ballots cast by 64 casual workers whose regularization was in question.
KILUSAN-OLALIA filed a protest.
On November 13, 1986, MOLE issued an Order stating, among others, that the casual
workers not performing janitorial and yard maintenance services had attained regular status on
even date. UKCEO-PTGWO was then declared as the exclusive bargaining representative of
Kimberlys employees, having garnered the highest number of votes in the certification election.

On March 16, 1987, KILUSAN-OLALIA filed with this Court a petition for certiorari which
was docketed as G.R. No. 77629 assailing the Order of the MOLE with prayer for a temporary
restraining order (TRO).
During the pendency of G.R. No. 77629, Kimberly dismissed from service several
employees and refused to heed the workers grievances, impelling KILUSAN-OLALIA to stage a
strike on May 17, 1987. Kimberly filed an injunction case with the National Labor Relations
Commission (NLRC), which prompted the latter to issue temporary restraining orders (TROs).
The propriety of the issuance of the TROs was again brought by KILUSAN-OLALIA to this Court
via a petition for certiorari and prohibition which was docketed as G.R. No. 78791.
ISSUE
RULING
The law [thus] provides for two kinds of regular employees, namely: (1) those who are engaged
to perform activities which are usually necessary or desirable in the usual business or trade of
the employer; and (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. The individual petitioners
herein who have been adjudged to be regular employees fall under the second category. 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 KILUSAN-OLALIA.
Owing to their length of service with the company, these workers became regular
employees, by operation of law, one year after they were employed by KIMBERLY through
RANK. 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 worker on the day immediately after the
end of his first year of service. To rule otherwise, and to instead make their regularization
dependent on the happening of some contingency or the fulfillment of certain requirements, is to
impose a burden on the employee which is not sanctioned by law.
That the first stated position is the situation contemplated and sanctioned by law is
further enhanced by the absence of a statutory limitation before regular status can be acquired
by a casual employee. 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.

Considering that an employee becomes regular with respect to the activity in which he is employed one
year after he is employed, the reckoning date for determining his regularization is his hiring date. Therefore, it
is error for petitioner Kimberly to claim that it is from April 21, 1986 that the one-year period should be counted.
While it is a fact that the issue of regularization came about only when KILUSAN-OLALIA filed a petition for
certification election, the concerned employees attained regular status by operation of law.
Further, the grant of the benefit of regularization should not be limited to the employees who questioned
their status before the labor tribunal/court and asserted their rights; it should also extend to those similarly

situated. There is, thus, no merit in petitioner's contention that only those who presented their circumstances of
employment to the courts are entitled to regularization.
As to Kimberlys assertions that some of the employees were already recalled, reassigned or replaced
by the RANK Manpower Services, and that some did not return to work, the Court notes that these are
questions of fact. Basic is the rule that, in petitions for review on certiorari under Rule 45 of the Rules of
Court, only questions of law may be raised, except, if the factual findings of the appellate court are mistaken,
absurd, speculative, conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings
culled by the court of origin, which is not so in the instant case. The DOLE and the appellate court herein are
uniform in their findings.
Finally, oft-repeated is the rule that appellate courts accord the factual findings of the labor tribunal not
only respect but also finality when supported by substantial evidence, unless there is showing that the labor
tribunal arbitrarily disregarded evidence before it or misapprehended evidence of such nature as to compel a
contrary conclusion if properly appreciated. Likewise, the appellate court cannot substitute its own judgment or
criterion for that of the labor tribunal in determining wherein lies the weight of evidence or what evidence is
entitled to belief.
Baguio Countryclub vs NLRC, 206 SCRA 643
FACTS
Petitioner Baguio Country Club Corporation (corporation) is a recreational establishment certified by the
Ministry of Labor and Employment as an" entertainment-service" establishment. Respondent National Labor
Relations Commission (Commission) is a government instrumentality created by law, impleaded in its official
capacity, while private respondent Associated Labor Union (union) is a duly registered labor organization and
private respondent Jimmy Calamba is an employee of the petitioner corporation as laborer, dishwasher, and
gardener.
Private respondent Jimmy Calamba was employed on a day to day basis in various capacities as laborer and
dishwasher for a period of ten (10) months from October 1, 1979 to July 24, 1980. On September 1, 1980 to
October 1, 1980, private respondent Calamba was hired as a gardener and rehired as such on November 15,
1980 to January 4, 1981 when he was dismissed by the petitioner corporation. (see Rollo, pp. 28-36)
On August 3, 1981, private respondent Jimmy Calamba assisted by private respondent union instituted a
complaint against petitioner corporation with the Ministry of Labor (now Department of Labor and
Employment), Baguio District Office, Baguio City for unfair labor practice, illegal dismissal and non-payment of
13th month pay for 1979 and 1980.
The Executive Labor Arbiter Sotero L. Tumang rendered a decision on September 15, 1982 declaring private
respondent Calamba as a regular employee and ordering petitioner to reinstate private respondent to the
position of gardener without loss of seniority and with full backwages, benefits and privileges from the time of
his dismissal up to reinstatement including 13th month pay.
ISSUE
Illegal dismissal

RULING
In the case at bar, the petitioner corporation, which is certified by the Ministry of Labor and Employment as an
"entertainment-service" establishment, claims that private respondent was contracted for a fixed and specific
period. However, the records are that the private respondent was repeatedly re-hired to perform tasks ranging
from dishwashing and gardening, aside from performing maintenance work.
Such repeated rehiring and the continuing need for his service are sufficient evidence of the necessity and
indispensability of his service to the petitioner's business or trade.
The law demands that the nature and entirety of the activities performed by the employee be considered. It is
not tenable to argue that the aforementioned tasks of private respondent are not necessary in petitioner's
business as a recreational establishment, just as it cannot be said that only those who are directly involved in
providing entertainment service may be considered as necessary employees. Otherwise, there would have
been no need for the regular maintenance section of petitioner corporation.
Furthermore, the private respondent performed the said tasks which lasted for more than one year, until early
January, 1981 when he was terminated. Certainly, by this fact alone he is entitled by law to be considered a
regular employee.
Owing to private respondent's length of service with the petitioner corporation, he became a regular employee,
by operation of law, one year after he was employed. It is more in consonance with the intent and spirit of the
law to rule that the status of regular employment attaches to the casual employee on the day immediately after
the end of his first year of service. To rule otherwise is to impose a burden on the employee which is not
sanctioned by law. (see Kimberly Independent Labor Union for Solidarity, Activism and Nationalism in Line
Industries and Agriculture v. Drilon, G.R. No. 77629, May 9, 1990, 185 SCRA 190, 203-204)
It is of no moment that private respondent was told when he was hired that his employment would only be "on
a day to day basis for a temporary period" and may be terminated at any time subject to the petitioner's
discretion. Precisely, the law overrides such conditions which are prejudicial to the interest of the worker.
Evidently, the employment contracts entered into by private respondent with the petitioner have the purpose of
circumventing the employee's security of tenure. The Court therefore, rigorously disapproves said contracts
which demonstrate a clear attempt to exploit the employee and deprive him of the protection sanctioned by the
Labor Code.
It is noteworthy that what determines whether a certain employment is regular or casual is not the will and word
of the employer, to which the desperate worker often accedes. It is the nature of the activities performed in
relation to the particular business or trade considering all circumstances, and in some cases the length of time
of its performance and its continued existence. (see De Leon v. NLRC, Ibid)
All premises considered, the Court is convinced that the assailed resolution of the respondent Commission is
not tainted with arbitrariness that would amount to grave abuse of discretion or lack of jurisdiction and
therefore, We find no reason to disturb the same.

Paguio vs NLRC, 403 SCRA 190

FACTS
On 22 June 1992, respondent Metromedia Times Corporation entered, for the fifth time, into an agreement with
petitioner Efren P. Paguio, appointing the latter to be an account executive of the firm.[1]

Again, petitioner was to solicit advertisements for The Manila Times, a newspaper of general circulation,
published by respondent company. Petitioner, for his efforts, was to receive compensation consisting of a 15%
commission on direct advertisements less withholding tax and a 10% commission on agency advertisements
based on gross revenues less agency commission and the corresponding withholding tax. The commissions,
released every fifteen days of each month, were to be given to petitioner only after the clients would have paid
for the advertisements. Apart from commissions, petitioner was also entitled to a monthly allowance of
P2,000.00 as long as he met the P30,000.00-monthly quota. Basically, the contentious points raised by the
parties had something to do with the following stipulations of the agreement.
On 15 August 9992, barely two months after the renewal of his contract, petitioner received a termination
notice from the respondent firm.
Apart from vague allegations of misconduct on which he was not given the opportunity to defend himself, i.e.,
pirating clients from his co-executives and failing to produce results, no definite cause for petitioners
termination was given
ISSUE
Whether or not the petitioner Efren Paguio is one of the regular employee.
RULING
An indicum of regular employment, rightly taken into account by the labor arbiter, was the reservation by
respondent Metromedia Times Corporation not only of the right to control the results to be achieved but
likewise the manner and the means used in reaching that end.[10] Metromedia Times Corporation exercised
such control by requiring petitioner, among other things, to submit a daily sales activity report and also a
monthly sales report as well. Various solicitation letters would indeed show that Robina Gokongwei, company
president, Alda Iglesia, the advertising manager, and Frederick Go, the advertising director, directed and
monitored the sales activities of petitioner. Thus defined, a regular employee is one who is engaged to perform
activities which are necessary and desirable in the usual business or trade of the employer as against those
which are undertaken for a specific project or are seasonal. Even in these latter cases, where such person has
rendered at least one year of service, regardless of the nature of the activity performed or of whether it is
continuous or intermittent, the employment is considered regular as long as the activity exists, it not being
indispensable that he be first issued a regular appointment or be formally declared as such before acquiring a
regular status.[11] chanroblespublishingcompanyThat petitioner performed activities which were necessary and
desirable to the business of the employer, and that the same went on for more than a year, could hardly be
denied. Petitioner was an account executive in soliciting advertisements, clearly necessary and desirable, for
the survival and continued operation of the business of respondent corporation. Robina Gokongwei, its
President, herself admitted that the income generated from paid advertisements was the lifeblood of the
newspapers existence. Implicitly, respondent corporation recognized petitioners invaluable contribution to the
business

when

it

renewed,

not

just

once

but

five

times,

its

contract

with

petitioner.

chanroblespublishingcompany Respondent company cannot seek refuge under the terms of the agreement it
has entered into with petitioner. The law, in defining their contractual relationship, does so, not necessarily or
exclusively upon the terms of their written or oral contract, but also on the basis of the nature of the work
petitioner has been called upon to perform.[12] The law affords protection to an employee, and it will not
countenance any attempt to subvert its spirit and intent. A stipulation in an agreement can be ignored as and

when it is utilized to deprive the employee of his security of tenure.[13] The sheer inequality that characterizes
employer-employee relations, where the scales generally tip against the employee, often scarcely provides him
real and better options.
The evidence, however, found by the appellate court is wanting that would indicate bad faith or malice on the
part of respondents, particularly by respondent Liberato I. Gomez, and the award of moral damages must thus
be deleted.
Mariwasa vs Leogardo, 169 SCRA 465
FACTS
Private respondent Joaquin A. Dequila (or Dequilla) was hired on probation by petitioner Mariwasa
Manufacturing, Inc. (hereafter, Mariwasa only) as a general utility worker on January 10, 1979. Upon the
expiration of the probationary period of six months, Dequila was informed by his employer that his work had
proved unsatisfactory and had failed to meet the required standards. To give him a chance to improve his
performance and qualify for regular employment, instead of dispensing with his service then and there, with his
written consent Mariwasa extended his probation period for another three months from July 10 to October 9,
1979. His performance, however, did not improve and on that account Mariwasa terminated his employment at
the end of the extended period.
His complaint was dismissed after hearing by Director Francisco L. Estrella, Director of the Ministry's National
Capital Region, who ruled that the termination of Dequila's employment was in the circumstances justified and
rejected his money claims for insufficiency of evidence. 3 On appeal to the Office of the Minister, however, said
disposition was reversed. Respondent Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a
regular employee at the time of his dismissal, therefore, could not have been lawfully dismissed for failure to
meet company standards as a probationary worker. He was ordered reinstated to his former position without
loss of seniority and with full back wages from the date of his dismissal until actually reinstated. 4 This last order
appears later to have been amended so as to direct payment of Dequila's back wages from the date of his
dismissal to December 20, 1982 only.
ISSUE
Whether or not probationary employment may validly be extended beyond the prescribed six-month period by
agreement of the employer and the employee.
RULING
'It is petitioners' submission that probationary employment cannot exceed six (6) months, the only exception
being apprenticeship and learnership agreements as provided in the Labor Code; that the Policy Instruction of
the Minister of Labor and Employment nor any agreement of the parties could prevail over this mandatory
requirement of the law; that this six months prescription of the Labor Code was mandated to give further
efficacy to the constitutionally-guaranteed security of tenure of workers; and that the law does not allow any
discretion on the part of the Minister of Labor and Employment to extend the probationary period for a longer
period except in the aforecited instances. Finally, petitioners maintain that since they are regular employees,
they can only be removed or dismissed for any of the just and valid causes enumerated under Article 283. of
the Labor Code.
We reject petitioners' contentions. They have no basis in law.

Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule
is when the parties to an employment contract may agree otherwise, such as when the same is established by
company policy or when the same is required by the nature of work to be performed by the employee. In the
latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where the probationary period was set for eighteen (18)
months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular
kind of work such as selling, or when the job requires certain qualifications, skills experience or training.
We therefore, hold and rule that the probationary employment of petitioners set to eighteen (18)
months is legal and valid and that the Regional Director and the Deputy Minister of Labor and
Employment committed no abuse of discretion in ruling accordingly.
The single difference between Buiser and the present case: that in the former involved an eighteen-month
probationary period stipulated in the original contract of employment, whereas the latter refers to an extension
agreed upon at or prior to the expiration of the statutory six-month period, is hardly such as to warrant or even
suggest a different ruling here. In both cases the parties' agreements in fact resulted in extensions of the
period prescribed by law. That in this case the inability of the probationer to make the grade became apparent
only at or about the end of the six-month period, hence an extension could not have been pre-arranged as was
done in Buiser assumes no adverse significance, given the lack, as pointed out by the Solicitor General, of any
indication that the extension to which Dequila gave his agreement was a mere stratagem of petitioners to avoid
the legal consequences of a probationary period satisfactorily completed.
For aught that appears of record, the extension of Dequila's probation was ex gratia, an act of liberality on the
part of his employer affording him a second chance to make good after having initially failed to prove his worth
as an employee. Such an act cannot now unjustly be turned against said employer's account to compel it to
keep on its payroll one who could not perform according to its work standards. The law, surely, was never
meant to produce such an inequitable result.
By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit
attaching to the completion of said period if he still failed to make the grade during the period of extension. The
Court finds nothing in the law which by any fair interpretation prohibits such a waiver. And no public policy
protecting the employee and the security of his tenure is served by prescribing voluntary agreements which, by
reasonably extending the period of probation, actually improve and further a probationary employee's
prospects of demonstrating his fitness for regular employment.
Having reached the foregoing conclusions, the Court finds it unnecessary to consider and pass upon the
additional issue raised in the Supplemental Petition 8 that the back wages adjudged in favor of private
respondent Dequila were erroneously computed.
Lacuesta vs ADMU, 477 SCRA 217
FACTS
Respondent Ateneo de Manila University (Ateneo) hired, on a contractual basis, petitioner Lolita R. Lacuesta
as a part-time lecturer in its English Department for the second semester of school year 1988-1989. She was
re-hired, still on a contractual basis, for the first and second semesters of school year 1989-1990.
On July 13, 1990, the petitioner was first appointed as full-time instructor on probation, in the same
department effective June 1, 1990 until March 31, 1991. Thereafter, her contract as faculty on probation was
renewed effective April 1, 1991 until March 31, 1992. She was again hired for a third year effective April 1,
1992 until March 31, 1993. During these three years she was on probation status.

In a letter dated January 27, 1993, respondent Dr. Leovino Ma. Garcia, Dean of Ateneos Graduate
School and College of Arts and Sciences, notified petitioner that her contract would no longer be renewed
because she did not integrate well with the English Department. Petitioner then appealed to the President of
the Ateneo at the time, Fr. Joaquin Bernas, S.J.
In a letter dated February 11, 1993, Fr. Bernas explained to petitioner that she was not being terminated,
but her contract would simply expire. He also stated that the university president makes a permanent
appointment only upon recommendation of the Dean and confirmation of the Committee on Faculty Rank and
Permanent Appointment. He added that any appointment he might extend would be tantamount to a midnight
appointment.
In another letter dated March 11, 1993, Fr. Bernas offered petitioner the job as book editor in the
University Press under terms comparable to that of a faculty member.
On March 26, 1993, petitioner applied for clearance to collect her final salary as instructor. Petitioner
also signed a Quitclaim, Discharge and Release on April 16, 1993.[4]
Petitioner worked as editor in the University Press from April 1, 1993 to March 31, 1994 including an
extension of two months after her contract expired. Upon expiry of her contract, petitioner applied for
clearance to collect her final salary as editor. Later, she agreed to extend her contract from June 16, 1994 to
October 31, 1994. Petitioner decided not to have her contract renewed due to a severe back problem. She
did not report back to work, but she submitted her clearance on February 20, 1995.
On December 23, 1996, petitioner filed a complaint for illegal dismissal with prayer for reinstatement,
back wages, and moral and exemplary damages. Dr. Leovino Ma. Garcia and Dr. Marijo Ruiz were sued in
their official capacities as the previous and present deans of the College of Arts and Sciences, respectively.
Labor Arbiter Manuel P. Asuncion held that petitioner may not be terminated by mere lapse of the
probationary period but only for just cause or failure to meet the employers standards. Moreover, said the
Labor Arbiter, the quitclaim, discharge and release executed by petitioner was not a bar to filing a complaint for
illegal dismissal.[5]Thus, he ordered reinstatement with payment of full back wages.
ISSUE
Whether or not the petitioner was illegally dismissed
RULING
The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a faculty
member in an educational institution has attained regular or permanent status. [10] In University of Santo Tomas
v. National Labor Relations Commission the Court en banc said that under Policy Instructions No. 11 issued by
the Department of Labor and Employment, the probationary employment of professors, instructors and
teachers shall be subject to the standards established by the Department of Education and Culture. Said
standards are embodied in paragraph 75[11] (now Section 93) of the Manual of Regulations for Private Schools.
[12]

Section 93[13] of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who
have satisfactorily completed their probationary period shall be considered regular or permanent. [14] Moreover,
for those teaching in the tertiary level, the probationary period shall not be more than six consecutive regular
semesters of satisfactory service.[15] The requisites to acquire permanent employment, or security of tenure,
are (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of
service; and (3) such service must have been satisfactory.[16]
As previously held, a part-time teacher cannot acquire permanent status. [17] Only when one has served
as a full-time teacher can he acquire permanent or regular status. The petitioner was a part-time lecturer
before she was appointed as a full-time instructor on probation. As a part-time lecturer, her employment as
such had ended when her contract expired. Thus, the three semesters she served as part-time lecturer could
not be credited to her in computing the number of years she has served to qualify her for permanent status.

Petitioner posits that after completing the three-year probation with an above-average performance, she
already acquired permanent status. On this point, we are unable to agree with petitioner.
Completing the probation period does not automatically qualify her to become a permanent employee
of the university. Petitioner could only qualify to become a permanent employee upon fulfilling the reasonable
standards for permanent employment as faculty member.[18] Consistent with academic freedom and
constitutional autonomy, an institution of higher learning has the prerogative to provide standards for its
teachers and determine whether these standards have been met. [19] At the end of the probation period, the
decision to re-hire an employee on probation, belongs to the university as the employer alone.
We reiterate, however, that probationary employees enjoy security of tenure, but only within the period of
probation. Likewise, an employee on probation can only be dismissed for just cause or when he fails to qualify
as a regular employee in accordance with the reasonable standards made known by the employer at the time
of his hiring. Upon expiration of their contract of employment, academic personnel on probation cannot
automatically claim security of tenure and compel their employers to renew their employment contracts. [20] In
the instant case, petitioner, did not attain permanent status and was not illegally dismissed. As found by the
NLRC, her contract merely expired.
Lastly, we find that petitioner had already signed a valid quitclaim, discharge and release which bars the
present action. This Court has held that not all quitclaims are per se invalid or against public policy, except (1)
where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or (2) where
the terms of settlement are unconscionable on their face. [21] In this case, there is no showing that petitioner
was coerced into signing the quitclaim. In her sworn quitclaim, she freely declared that she received to her full
satisfaction all that is due her by reason of her employment and that she was voluntarily releasing respondent
Ateneo from all claims in relation to her employment. [22] Nothing on the face of her quitclaim has been shown
as unconscionable.
PDI vs Magtibay, G.R. No. 164532, July 24, 2007
FACTS
On February 7, 1995, PDI hired Magtibay, on contractual basis, to assist, for a period of five months
from February 17, 1995, the regular phone operator. Before the expiration of Magtibays contractual
employment, he and PDI agreed to a fifteen-day contract extension, or from July 17, 1995 up to July 31, 1995,
under the same conditions as the existing contract.
After the expiration of Magtibays contractual employment, as extended, PDI announced the creation
and availability of a new position for a second telephone operator who would undergo probationary
employment. Apparently, it was PDIs policy to accord regular employees preference for new vacancies in the
company. Thus, Ms. Regina M. Layague, a PDI employee and member of respondent PDI Employees Union
(PDIEU), filed her application for the new position. However, she later withdrew her application, paving the way
for outsiders or non-PDI employees, like Magtibay in this case, to apply.
After the usual interview for the second telephone operator slot, PDI chose to hire Magtibay on a
probationary basis for a period of six (6) months. The signing of a written contract of employment followed.
On March 13, 1996, or a week before the end the agreed 6-month probationary period, PDI officer
Benita del Rosario handed Magtibay his termination paper, grounded on his alleged failure to meet company
standards. Aggrieved, Magtibay immediately filed a complaint for illegal dismissal and damages before the
Labor Arbiter. PDIEU later joined the fray by filing a supplemental complaint for unfair labor practice.

Magtibay anchored his case principally on the postulate that he had become a regular employee by
operation of law, considering that he had been employed by and had worked for PDI for a total period of ten
months, i.e., four months more than the maximum six-month period provided for by law on probationary
employment. He also claimed that he was not apprised at the beginning of his employment of the performance
standards of the company, hence, there was no basis for his dismissal. Finally, he described his dismissal as
tainted with bad faith and effected without due process.
PDI, for its part, denied all the factual allegations of Magtibay, adding that his previous contractual
employment was validly terminated upon the expiration of the period stated therein. Pressing the point, PDI
alleged that the period covered by the contractual employment cannot be counted with or tacked to the period
for probation, inasmuch as there is no basis to consider Magtibay a regular employee. PDI additionally claimed
that Magtibay was dismissed for violation of company rules and policies, such as allowing his lover to enter
and linger inside the telephone operators booth and for failure to meet prescribed company standards which
were allegedly made known to him at the start through an orientation seminar conducted by the company.
ISSUE
Whether or not Magtibay was illegally dismissed
RULING
We do not agree with the appellate court when it cleared the NLRC of commission of grave abuse of
discretion despite the latters disregard of clear and convincing evidence that there were reasonable standards
made known by PDI to Magtibay during his probationary employment. It is on record that Magtibay committed
obstinate infractions of company rules and regulations, which in turn constitute sufficient manifestations of his
inadequacy to meet reasonable employment norms. The suggestion that Magtibay ought to have been made
to understand during his briefing and orientation that he is expected to obey and comply with company rules
and regulations strains credulity for acceptance. The CAs observation that nowhere can it be found in the list
of Basic Responsibility and Specific Duties and Responsibilities of respondent Magtibay that he has to abide
by the duties, rules and regulations that he has allegedly violated is a strained rationalization of an
unacceptable conduct of an employee. Common industry practice and ordinary human experience do not
support the CAs posture. All employees, be they regular or probationary, are expected to comply with
company-imposed rules and regulations, else why establish them in the first place. Probationary employees
unwilling to abide by such rules have no right to expect, much less demand, permanent employment. We,
therefore find sufficient factual and legal basis, duly established by substantial evidence, for PDI to legally
terminate Magtibays probationary employment effective upon the end of the 6-month probationary period.
It is undisputed that PDI apprised Magtibay of the ground of his termination, i.e., he failed to qualify as
a regular employee in accordance with reasonable standards made known to him at the time of engagement,
only a week before the expiration of the six-month probationary period. Given this perspective, does this make
his termination unlawful for being violative of his right to due process of law?

It does not.
Unlike under the first ground for the valid termination of probationary employment which is for just
cause, the second ground does not require notice and hearing. Due process of law for this second ground
consists of making the reasonable standards expected of the employee during his probationary period known
to him at the time of his probationary employment. By the very nature of a probationary employment, the
employee knows from the very start that he will be under close observation and his performance of his
assigned duties and functions would be under continuous scrutiny by his superiors. It is in apprising him of
the standards against which his performance shall be continuously assessed where due process regarding the
second ground lies, and not in notice and hearing as in the case of the first ground.
Even if perhaps he wanted to, Magtibay cannot deny as he has not denied PDIs assertion that he
was duly apprised of the employment standards expected of him at the time of his probationary employment
when he underwent a one-on-one orientation with PDIs personnel assistant, Ms. Rachel Isip-Cuzio. Neither
has he denied nor rebutted PDIs further claim that his direct superior, Benita del Rosario, briefed him
regarding his responsibilities in PDI.
Lest it be overlooked, Magtibay had previously worked for PDI as telephone operator from February 7,
1995 to July 31, 1995 as a contractual employee. Thus, the Court entertains no doubt that when PDI took him
in on September 21, 1995, Magtibay was already very much aware of the level of competency and
professionalism PDI wanted out of him for the entire duration of his probationary employment.
PDI was only exercising its statutory hiring prerogative when it refused to hire Magtibay on a permanent
basis upon the expiration of the six-month probationary period. This was established during the proceedings
before the labor arbiter and borne out by the records and the pleadings before the Court. When the NLRC
disregarded the substantial evidence establishing the legal termination of Magtibays probationary employment
and

rendered

judgment

grossly

and

directly

contradicting

such

clear

evidence, the NLRC commits grave abuse of discretion amounting to lack or excess of jurisdiction. It was,
therefore, reversible error on the part of the appellate court not to annul and set aside such void judgment of
the NLRC.
Yolanda et al vs AMA Computer College Paraaque 618 SCRA 218
FACTS
AMACC is an educational institution engaged in computer-based education in the country. One of AMACCs
biggest schools in the country is its branch at ParaaqueCity. The petitioners were faculty members who
started teaching at AMACC on May 25, 1998. The petitioner Mercado was engaged as a Professor 3, while
petitioner Tonog was engaged as an Assistant Professor 2. On the other hand, petitioners De Leon, Lachica
and Alba, Jr., were all engaged as Instructor 1.[5] The petitioners executed individual Teachers Contracts for
each of the trimesters that they were engaged to teach.

For the school year 2000-2001, AMACC implemented new faculty screening guidelines, set forth in its
Guidelines on the Implementation of AMACC Faculty Plantilla. [7] Under the new screening guidelines, teachers
were to be hired or maintained based on extensive teaching experience, capability, potential, high academic
qualifications and research background. The performance standards under the new screening guidelines were
also used to determine the present faculty members entitlement to salary increases.The petitioners failed to
obtain a passing rating based on the performance standards; hence AMACC did not give them any
salary increase.[8]
Because of AMACCs action on the salary increases, the petitioners filed a complaint with the
Arbitration Branch of the NLRC on July 25, 2000, for underpayment of wages, non-payment of overtime and
overload compensation, 13th month pay, and for discriminatory practices.[9]
On September 7, 2000, the petitioners individually received a memorandum from AMACC, through
Human Resources Supervisor Mary Grace Beronia, informing them that with the expiration of their contract to
teach, their contract would no longer be renewed.
The petitioners amended their labor arbitration complaint to include the charge of illegal dismissal
against AMACC. In their Position Paper, the petitioners claimed that their dismissal was illegal because it was
made in retaliation for their complaint for monetary benefits and discriminatory practices against AMACC. The
petitioners also contended that AMACC failed to give them adequate notice; hence, their dismissal was
ineffectual.[12]
AMACC contended in response that the petitioners worked under a contracted term under a nontenured appointment and were still within the three-year probationary period for teachers. Their contracts were
not renewed for the following term because they failed to pass the Performance Appraisal System for Teachers
(PAST) while others failed to comply with the other requirements for regularization, promotion, or increase in
salary. This move, according to AMACC, was justified since the school has to maintain its high academic
standards.
ISSUE
Whether or not the petitioners were illegally dismissed
RULING
Given the clear constitutional and statutory intents, we cannot but conclude that in a situation where the
probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article
281 should assume primacy and the fixed-period character of the contract must give way. This conclusion is
immeasurably strengthened by the petitioners and the AMACCs hardly concealed expectation that the
employment on probation could lead to permanent status, and that the contracts are renewable unless the
petitioners fail to pass the schools standards.

To highlight what we mean by a fixed-term contract specifically used for the fixed term it offers, a
replacement teacher, for example, may be contracted for a period of one year to temporarily take the place of a
permanent teacher on a one-year study leave. The expiration of the replacement teachers contracted term,
under the circumstances, leads to no probationary status implications as she was never employed on
probationary basis; her employment is for a specific purpose with particular focus on the term and with every
intent to end her teaching relationship with the school upon expiration of this term.
If the school were to apply the probationary standards (as in fact it says it did in the present case),
these standards must not only be reasonable but must have also been communicated to the teachers at the
start of the probationary period, or at the very least, at the start of the period when they were to be
applied. These terms, in addition to those expressly provided by the Labor Code, would serve as the just
cause for the termination of the probationary contract. As explained above, the details of this finding of just
cause must be communicated to the affected teachers as a matter of due process.
AMACC, by its submissions, admits that it did not renew the petitioners contracts because they failed
to pass the Performance Appraisal System for Teachers (PAST) and other requirements for regularization that
the school undertakes to maintain its high academic standards. [47] The evidence is unclear on the exact terms
of the standards, although the school also admits that these were standards under the Guidelines on the
Implementation of AMACC Faculty Plantilla put in place at the start of school year 2000-2001.
While we can grant that the standards were duly communicated to the petitioners and could be applied
beginning the 1st trimester of the school year 2000-2001, glaring and very basic gaps in the schools evidence
still exist. The exact terms of the standards were never introduced as evidence; neither does the evidence
show how these standards were applied to the petitioners.[48] Without these pieces of evidence (effectively, the
finding of just cause for the non-renewal of the petitioners contracts), we have nothing to consider and pass
upon as valid or invalid for each of the petitioners. Inevitably, the non-renewal (or effectively, the termination of
employment of employees on probationary status) lacks the supporting finding of just cause that the law
requires and, hence, is illegal.
In this light, the CA decision should be reversed. Thus, the LAs decision, affirmed as to the results by
the NLRC, should stand as the decision to be enforced, appropriately re-computed to consider the period of
appeal and review of the case up to our level.
Given the period that has lapsed and the inevitable change of circumstances that must have taken
place in the interim in the academic world and at AMACC, which changes inevitably affect current school
operations, we hold that - in lieu of reinstatement - the petitioners should be paid separation pay computed on
a trimestral basis from the time of separation from service up to the end of the complete trimester preceding
the finality of this Decision.[49] The separation pay shall be in addition to the other awards, properly
recomputed, that the LA originally decreed.
WHEREFORE,

premises

considered,

we

hereby GRANT the

petition,

and,

consequently, REVERSE and SET ASIDE the Decision of the Court of Appeals dated November 29, 2007 and
its Resolution dated June 20, 2008 in CA-G.R. SP No. 96599. The Labor Arbiters decision of March 15, 2002,

subsequently affirmed as to the results by the National Labor Relations Commission, stands and should be
enforced with appropriate re-computation to take into account the date of the finality of this Decision.

In lieu of reinstatement, AMA Computer College-Paraaque City, Inc. is hereby DIRECTED to pay
separation pay computed on a trimestral basis from the time of separation from service up to the end of the
complete trimester preceding the finality of this Decision. For greater certainty, the petitioners are entitled to:
backwages and 13th month pay computed from September 7, 2000 (the date AMA

(a)

Computer College-Paraaque City, Inc. illegally dismissed the petitioners) up to the finality
of this Decision;
(b)

monthly honoraria (if applicable) computed from September 7, 2000 (the time of
separation from service) up to the finality of this Decision; and

(c)

separation pay on a trimestral basis from September 7, 2000 (the time of separation from
service) up to the end of the complete trimester preceding the finality of this Decision.

COCOMANGAS HOTEL BEACH

RESORT
FACTS
The present controversy stemmed from five individual complaints[3] for illegal
dismissal filed on June 15, 1999 by Federico F. Visca (Visca), Johnny G. Barredo, Ronald Q. Tibus, Richard
G. Visca and Raffie G. Visca (respondents) against Cocomangas Hotel Beach Resort and/or its ownermanager, Susan Munro (petitioners) before Sub-Regional Arbitration Branch No. VI of the National Labor
Relations Commission (NLRC) in Kalibo, Aklan.

In their consolidated Position Paper,[4] respondents alleged that they were regular employees of petitioners,
with designations and dates of employment as follows:

Name

Designation

Date Employed

Federico F. Visca

Foreman

October 1, 1987

Johnny G. Barredo

Carpenter

April 23, 1993

Ronald Q. Tibus

Mason

November 9, 1996

Richard G. Visca

Carpenter

April 1988

Raffie G. Visca

Mason/Carpenter

March 27, 1993

tasked with the maintenance and repair of the resort facilities; on May 8, 1999, Maria Nida Iigo-Taala, the
Front Desk Officer/Sales Manager, informed them not to report for work since the ongoing constructions and
repairs would be temporarily suspended because they caused irritation and annoyance to the resort's guests;
as instructed, they did not report for work the succeeding days; John Munro, husband of petitioner Susan
Munro, subsequently visited respondent foreman Visca and informed him that the work suspension was due to
budgetary constraints; when respondent Visca later discovered that four new workers were hired to do
respondents' tasks, he confronted petitioner Munro who explained that respondents' resumption of work was
not possible due to budgetary constraints; when not less than ten workers were subsequently hired by
petitioners to do repairs in two cottages of the resort and two workers were retained after the completion
without respondents being allowed to resume work, they filed their individual complaints for illegal dismissal. In
addition to reinstatement with payment of full backwages, respondents prayed for payment of premium pay for
rest day, service incentive leave pay, 13th month pay, and cost-of-living allowance, plus moral and exemplary
damages and attorney's fees.

In their Position Paper,[5] petitioners denied any employer-employee relationship with respondents and
countered that respondent Visca was an independent contractor who was called upon from time to time when
some repairs in the resort facilities were needed and the other respondents were selected and hired by him.

ISSUE
RULING
Respondents are regular employees and not project employees.
At any rate, after a careful examination of the records, the Court finds that the CA did not err in finding that
respondents were regular employees, not project employees.
A project employee is 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." Before an employee hired on a per-project basis can be dismissed, a report must be made to the
nearest employment office, of the termination of the services of the workers every time completes a project,
pursuant to Policy Instruction No. 20.
In the present case, respondents cannot be classified as project employees, since they worked continuously
for petitioners from three to twelve years without any mention of a "project" to which they were specifically
assigned. While they had designations as "foreman," "carpenter" and "mason," they performed work other than
carpentry or masonry. They were tasked with the maintenance and repair of the furniture, motor boats,
cottages, and windbreakers and other resort facilities.
There is likewise no evidence of the project employment contracts covering respondents' alleged periods of
employment. More importantly, there is no evidence that petitioners reported the termination of respondents'
supposed project employment to the DOLE as project employees. Department Order No. 19, as well as the old
Policy Instructions No. 20, requires employers to submit a report of an employee's termination to the nearest
public employment office every time his employment is terminated due to a completion of a project. Petitioners'
failure to file termination reports is an indication that the respondents were not project employees but regular
employees.
This Court has held that an employment ceases to be coterminous with specific projects when the employee is

continuously rehired due to the demands of employer's business and re-engaged for many more projects
without interruption.
The Court is not persuaded by petitioners' submission that respondents' services are not necessary or
desirable to the usual trade or business of the resort. The repeated and continuing need for their services is
sufficient evidence of the necessity, if not indispensability, of their services to petitioners' resort business.
That respondents were regular employees is further bolstered by the following evidence:
(a) the SSS Quarterly Summary of Contribution Payments listing respondents as employees of petitioners;
(b) the Service Record Certificates stating that respondents were employees of petitioners for periods ranging
from three to twelve years and all have given "very satisfactory performance"; (c) petty cash vouchers showing
payment of respondents' salaries and holiday and overtime pays.
Thus, substantial evidence supported the CA finding that respondents were regular employees. Being regular
employees, they were entitled to security of tenure, and their services may not be terminated except for causes
provided by law.
Article 279 of the Labor Code, as amended, provides that an illegally dismissed employee shall be entitled to
reinstatement, full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
The Court notes that the NLRC, in its earlier Decision which was affirmed by the CA, computed the award for
backwages from May 8, 1999 to July 31, 2002 only. It is evident that respondents' backwages should not be
limited to said period. The backwages due respondents must be computed from the time they were unjustly
dismissed until actual reinstatement to their former positions. Thus, until petitioners implement the
reinstatement aspect, its obligation to respondents, insofar as accrued backwages and other benefits are
concerned, continues to accumulate.
Hanjin Heavy Industries vs Ibanez, G.R. No. 170181, June 26, 2008
FACTS
Petitioner HANJIN is a foreign company duly registered with the Securities and Exchange Commission to
engage in the construction business in the Philippines. Petitioners Hak Kon Kim and Jhunie Adajar were
employed as Project Director and Supervisor, respectively, by HANJIN.
On 11 April 2002, respondents Felicito Ibaez, Aligwas Carolino, Elmer Gacula, Enrique Dagotdot, Ruel Calda,
and four other co-workers filed a complaint before the NLRC, docketed as NLRC Case No. RAB-IV-04-1551502-RI, for illegal dismissal with prayer for reinstatement and full backwages against petitioners. In their
Position Paper dated 29 July 2002, respondents alleged that HANJIN hired them for various positions on
different dates. Respondents stated that their tasks were usual and necessary or desirable in the usual
business or trade of HANJIN. Respondents additionally averred that they were employed as members of a
work pool from which HANJIN draws the workers to be dispatched to its various construction projects; with the
exception of Ruel Calda, who as a warehouseman was required to work in HANJINs main office.[4] Among the
various

construction

projects

to

which

they

were

supposedly

assigned,

respondents

named the North Harborproject in 1992-1994; Manila International Port in 1994-1996; Batangas Port in 19961998; the Batangas Pier, and La Mesa Dam.[5]

On 15 April 2002, Hanjin dismissed respondents from employment. Respondents claimed that at the
time of their dismissal, HANJIN had several construction projects that were still in progress, such as Metro Rail
Transit (MRT) II and MRT III, and continued to hire employees to fill the positions vacated by the respondents.
[6]

Petitioners denied the respondents allegations. They maintained that respondents were hired as project

employees for the construction of the LRT/MRT Line 2 Package 2 and 3 Project. HANJIN and respondents
purportedly executed contracts of employment, in which it was clearly stipulated that the respondents were to
be hired as project employees for a period of only three months, but that the contracts may be renewed.
ISSUE
Whether or not respondents were regular or project employees
RULING
Given the particular facts established in this case, petitioners argument fails to persuade this
Court. Petitioners were not able to offer evidence to refute or controvert the respondents claim that they were
assigned to various construction projects, particularly the North Harbor Project in 1992-1994; Manila
International Port in 1994-1996; BatangasPort in 1996-1998; the Batangas Pier; and La Mesa Dam.[36] Had
respondents allegations been false, petitioners could simply present as evidence documents and records in
their custody to disprove the same, i.e., payroll for such projects or termination reports, which do not bear
respondents names. Petitioners, instead, chose to remain vague as to the circumstances surrounding the
hiring of the respondents. This Court finds it unusual that petitioners cannot even categorically state the exact
year when HANJIN employed respondents.
It also bears to note that petitioners did not present other Termination Reports apart from that filed
on 11 April 2002. The failure of an employer to file a Termination Report with the DOLE every time a project or
a phase thereof is completed indicates that respondents were not project employees. [37] Employers cannot
mislead their employees, whose work is necessary and desirable in the formers line of business, by treating
them as though they are part of a work pool from which workers could be continually drawn and then assigned
to various projects and thereafter denied regular status at any time by the expedient act of filing a Termination
Report. This would constitute a practice in which an employee is unjustly precluded from acquiring security of
tenure, contrary to public policy, morals, good customs and public order.[38]
In this case, only the last and final termination of petitioners was reported to the DOLE. If respondents
were actually project employees, petitioners should have filed as many Termination Reports as there were
construction projects actually finished and for which respondents were employed.

Thus, a lone Termination

Report filed by petitioners only upon the termination of the respondents final project, and after their previous
continuous employment for other projects, is not only unconvincing, but even suspicious.
Petitioners insist that the payment to the respondents of a completion bonus indicates that respondents
were project employees. To support their claim, petitioners presented payroll records for the period 4 April
2002 to 20 April 2002, with the words completion bonus written at the lower left corner of each page. [39] The

amount paid to each employee was equivalent to his fifteen-day salary. Respondents, however, deny receiving
any such amount.
Assuming that petitioners actually paid respondents a completion bonus, petitioners failed to present
evidence showing that they undertook to pay respondents such a bonus upon the completion of the project, as
provided under Section 2.2(f) of Department Order No. 19, Series of 1993. [40] Petitioners did not even allege
how the completion bonus was to be computed or the conditions that must be fulfilled before it was to be
given. A completion bonus, if paid as a mere afterthought, cannot be used to determine whether or not the
employment was regular or merely for a project. Otherwise, an employer may defeat the workers security of
tenure by paying them a completion bonus at any time it is inclined to unjustly dismiss them.
Department Order No. 19, Series of 1993, provides that in the absence of an undertaking that the
completion bonus will be paid to the employee, as in this case, the employee may be considered a non-project
employee, to wit:
3.4 Completion of the project. Project employees who are separated from work as a result of
the completion of the project or any phase thereof in which they are employed are entitled to the
pro-rata completion bonus if there is an undertaking by for the grant of such
bonus. An undertaking by the employer to pay a completion bonus shall be an indicator
that an employee is a project employee. Where there is no such undertaking, the
employee may be considered a non-project employee. The pro-rata completion bonus may
be based on the industry practice which is at least the employees one-half (1/2) month salary
for every 12 months of service and may be put into effect for any project bid (in case of bid
projects) or tender submitted (in case of negotiated projects) thirty (30) days from the date of
issuances of these Guidelines. (Emphasis supplied.)

Furthermore, after examining the payroll documents submitted by petitioners, this Court finds that the
payments termed as completion bonus are not the completion bonus paid in connection with the termination
of the project. First of all, the period from 4 April 2002 to 20 April 2002, as stated in the payrolls, bears no
relevance to a completion bonus. A completion bonus is paid in connection with the completion of the project,
and is not based on a fifteen-day period. Secondly, the amount paid to each employee as his completion
bonus was uniformly equivalent to his fifteen-day wages, without consideration of the number of years of
service rendered. Section 3.4 of Department Order No. 19, Series of 1993, provides that based on industry
practice, the completion bonus is at least the employees one-half month salary for every twelve months of
service.
Finally, the Quitclaims which the respondents signed cannot bar them from demanding what is legally
due them as regular employees. As a rule, quitclaims and waivers or releases are looked upon with disfavor
and frowned upon as contrary to public policy. They are thus ineffective to bar claims for the full measure of a
workers legal rights, particularly when the following conditions are applicable: 1) where there is clear proof that
the waiver was wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are
unconscionable on their face.[41] To determine whether the Quitclaims signed by respondents are valid, one

important factor that must be taken into account is the consideration accepted by respondents; the amount
must constitute a reasonable settlement equivalent to the full measure of their legal rights. [42] In this case, the
Quitclaims

signed

by

the

respondents

do

not

appear

to

have

been

made

for

valuable

consideration. Respondents, who are regular employees, are entitled to backwages and separation pay and,
therefore, the Quitclaims which they signed cannot prevent them from seeking claims to which they are
entitled.[43]
Due to petitioners failure to adduce any evidence showing that petitioners were project employees who
had been informed of the duration and scope of their employment, they were unable to discharge the burden of
proof required to establish that respondents dismissal was legal and valid. Furthermore, it is a well-settled
doctrine that if doubts exist between the evidence presented by the employer and that by the employee, the
scales of justice must be tilted in favor of the latter.[44] For these reasons, respondents are to be considered
regular employees of HANJIN.
Finally, in the instant case, records failed to show that HANJIN afforded respondents, as regular
employees, due process prior to their dismissal, through the twin requirements of notice and
hearing. Respondents were not served notices informing them of the particular acts for which their dismissal
was sought. Nor were they required to give their side regarding the charges made against them. Certainly, the
respondents dismissal was not carried out in accordance with law and was, therefore, illegal.
Mercado vs NLRC, 201 SCRA 332
FACTS
Petitioners alleged in their complaint that they were agricultural workers utilized by private respondents in all
the agricultural phases of work on the 7 hectares of rice land and 10 hectares of sugar land owned by the
latter; that Fortunato Mercado, Sr. and Leon Santillan worked in the farm of private respondents since 1949,
Fortunato Mercado, Jr. and Antonio Mercado since 1972 and the rest of the petitioners since 1960 up to April
1979, when they were all allegedly dismissed from their employment; and that, during the period of their
employment, petitioners received the following daily wages: From 1962-1963 P1.50 1963-1965 P2.00
1965-1967 P3.00 1967-1970 P4.00 1970-1973 P5.00 1973-1975 P5.00 1975-1978 P6.00 19781979 P7.00 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.
The other private respondents denied having any relationship whatsoever with the petitioners and state that
they were merely registered owners of the land in question included as correspondents in this case.
ISSUE
whether or not petitioners are regular and permanent farm workers

RULING
Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case
and that the Labor Arbiter should have considered them regular by virtue of said proviso. The contention is
without merit. chanroblespublishingcompanyThe general rule is that the office of a proviso is to qualify or
modify only the phrase immediately preceding it or restrain or limit the generality of the clause that it
immediately follows.[27] Thus, it has been held that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached, and not to the statute itself or to other
sections thereof.[28] The only exception to this rule is where the clear legislative intent is to restrain or qualify
not only the phrase immediately preceding it (the proviso) but also earlier provisions of the statute or even the
statute itself as a whole.[29] chanroblespublishingcompany Policy Instruction No. 12 of the Department of
Labor and Employment discloses that the concept of regular and casual employees was designed to put an
end to casual employment in regular jobs, which has been abused by many employers to prevent so-called
casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same
instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale
businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or
industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners
would have us believe, to prevent small-scale businesses from engaging in legitimate methods to realize profit.
Hence, the proviso is applicable only to the employees who are deemed casuals but not to the project
employees nor the regular employees treated in paragraph one of Art. 280. chanroblespublishingcompany
Clearly, therefore, petitioners being project employees, or, to use the correct term, 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.
Hacienda Fatima vs Nat'l Federation of Sugarcane Workers, 396 SCRA 518
FACTS
"Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or
were choosy in the kind of jobs they wanted to perform, the records is replete with complainants' persistence
and dogged determination in going back to work.
"Indeed, it would appear that respondents did not look with favor workers' having organized themselves into a
union. Thus, when complainant union was certified as the collective bargaining representative in the
certification elections, respondents under the pretext that the result was on appeal, refused to sit down with the
union for the purpose of entering into a collective bargaining agreement. Moreover, the workers including
complainants herein were not given work for more than one month. In protest, complainants staged a strike
which was however settled upon the signing of a Memorandum of Agreement which stipulated among others
that:
'a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor
to conclude the same within thirty (30) days.
'b) The management will give priority to the women workers who are members of the union in case
work relative . . . or amount[ing] to gahit and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.
'd) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to
the actual strike will be given priority. However, in case the said workforce would not be enough, the
management can hire additional workers to supplement them.

'e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to
work in the hacienda; and
'f) The union will immediately lift the picket upon signing of this agreement.'
"However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its
commitment to sit down and bargain collectively. Instead, respondent employed all means including the use of
private armed guards to prevent the organizers from entering the premises.
"Moreover, starting September 1991, respondents did not any more give work assignments to the
complainants forcing the union to stage a strike on January 2, 1992. But due to the conciliation efforts by the
DOLE, another Memorandum of Agreement was signed by the complainants and respondents which provides:
'Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of the
union officials and members;
'Whereas parties to the present dispute agree to settle the case amicably once and for all;
'Now therefore, in the interest of both labor and management, parties herein agree as follows:
'1. That the list of the names of affected union members hereto attached and made part of this
agreement shall be referred to the Hacienda payroll of 1990 and determine whether or not this
concerned Union members are hacienda workers;
'2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the subjects of a
Memorandum of Agreement entered into by and between the parties last January 4, 1990;
'3. That herein parties can use other employment references in support of their respective claims
whether or not any or all of the listed 36 union members are employees or hacienda workers or not as
the case may be;
'4. That in case conflict or disagreement arises in the determination of the status of the particular
hacienda workers subject of this agreement herein parties further agree to submit the same to voluntary
arbitration;
'5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be
composed of three representatives each and is given five working days starting Jan. 23, 1992 to
resolve the status of the subject 36 hacienda workers. (Union representatives: Bernardo Torres, Martin
Alas-as, Ariston Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as
follows:
'The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who
received their 13th month pay. The following are deemed not considered employees:

1. Luisa Rombo

2. Ramona Rombo

3. Bobong Abrega

4. Boboy Silva

'The name Orencio Rombo shall be verified in the 1990 payroll.

'The following employees shall be reinstated immediately upon availability of work:

1. Jose Dagle

7. Alejandro Tejares

2. Rico Dagle

8. Gaudioso Rombo

3. Ricardo Dagle

9. Martin Alas-as Jr.

4. Jesus Silva

10. Cresensio Abrega

5. Fernando Silva

11. Ariston Eruela Sr.

6. Ernesto Tejares

12. Ariston Eruela Jr.'

"When respondents again reneged on its commitment; complainants filed the present complaint.
"But for all their persistence, the risk they had to undergo in conducting a strike in the face of overwhelming
odds, complainants in an ironic twist of fate now find themselves being accused of 'refusing to work and being
choosy in the kind of work they have to perform.
ISSUE
Whether or not the respondents were considered as regular employees
RULING
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review
on certiorari of CA decisions. 9 Questions of fact are not entertained. 10 The Court is not a trier of facts and, in
labor cases, this doctrine applies with greater force. 11 Factual questions are for labor tribunals to resolve. 12 In
the present case, these have already been threshed out by the NLRC. Its findings were affirmed by the
appellate court.

Contrary to petitioners' contention, the CA did not err when it held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"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 exist." (Italics supplied)
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 with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva
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.
In Abasolo v. National Labor Relations Commission, 13 the Court issued this clarification:
"[T]he test of whether or not an employee is a regular employee has been 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 trade or
business of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity and while such activity exists.
xxx

xxx

xxx

". . . [T]he fact that [respondents] do not work continuously for one whole year but only for the duration
of the . . . season does not detract from considering them in regular employment since in a litany of
cases this Court has already settled that seasonal workers 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." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the case at bar. In the earlier
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. On the other hand, herein
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.
"Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers
the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a
valid and authorized cause." 16 In the case at bar, petitioners failed to prove any such cause for the dismissal of
respondents who, as discussed above, are regular employees.
Magsalin et al vs Nat'l Organization of Working Men 403 SCRA 199
FACTS
Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent workers as sales
route helpers for a limited period of five months. After five months, respondent workers were employed by
petitioner company on a day-to-day basis. According to petitioner company, respondent workers were hired to
substitute for regular sales route helpers whenever the latter would be unavailable or when there would be an
unexpected shortage of manpower in any of its work places or an unusually high volume of work. The practice
was for the workers to wait every morning outside the gates of the sales office of petitioner company. If thus
hired, the workers would then be paid their wages at the end of the day.
Ultimately, respondent workers asked petitioner company to extend to them regular
appointments. Petitioner company refused. On 07 November 1997, twenty-three (23) of the temporary
workers (herein respondents) filed with the National Labor Relations Commission (NLRC) a complaint for the
regularization of their employment with petitioner company. The complaint was amended a number of times to
include other complainants that ultimately totaled fifty-eight (58) workers. Claiming that petitioner company
meanwhile terminated their services, respondent workers filed a notice of strike and a complaint for illegal
dismissal and unfair labor practice with the NLRC.

ISSUE

RULING
Even while the language of law might have been more definitive, the clarity of its spirit and intent, i.e., to
ensure a regular workers security of tenure, however, can hardly be doubted. In determining whether an
employment should be considered regular or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of the

employer. The standard, supplied by the law itself, is whether the work undertaken is necessary or desirable in
the usual business or trade of the employer, a fact that can be assessed by looking into the nature of the
services rendered and its relation to the general scheme under which the business or trade is pursued in the
usual course. It is distinguished from a specific undertaking that is divorced from the normal activities required
in carrying on the particular business or trade. But, although the work to be performed is only for a specific
project or seasonal, where a person thus engaged has been performing the job for at least one year, even if
the performance is not continuous or is merely intermittent, the law deems the repeated and continuing need
for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or
trade of the employer. The employment of such person is also then deemed to be regular with respect to such
activity and while such activity exists.[3]
The argument of petitioner that its usual business or trade is softdrink manufacturing and that the work
assigned to respondent workers as sales route helpers so involves merely postproduction activities, one
which is not indispensable in the manufacture of its products, scarcely can be persuasive. If, as so argued by
petitioner company, only those whose work are directly involved in the production of softdrinks may be held
performing functions necessary and desirable in its usual business or trade, there would have then been no
need for it to even maintain regular truck sales route helpers. The nature of the work performed must be
viewed from a perspective of the business or trade in its entirety[4] and not on a confined scope.
The repeated rehiring of respondent workers and the continuing need for their services clearly attest to the
necessity or desirability of their services in the regular conduct of the business or trade of petitioner
company. The Court of Appeals has found each of respondents to have worked for at least one year with
petitioner company. While this Court, in Brent School, Inc. vs. Zamora,[5] has upheld the legality of a fixed-term
employment, it has done so, however, with a stern admonition that where from the circumstances it is apparent
that the period has been imposed to preclude the acquisition of tenurial security by the employee, then it
should be struck down as being contrary to law, morals, good customs, public order and public policy. The
pernicious practice of having employees, workers and laborers, engaged for a fixed period of few months,
short of the normal six-month probationary period of employment, and, thereafter, to be hired on a day-to-day
basis, mocks the law. Any obvious circumvention of the law cannot be countenanced. The fact that
respondent workers have agreed to be employed on such basis and to forego the protection given to them on
their security of tenure, demonstrate nothing more than the serious problem of impoverishment of so many of
our people and the resulting unevenness between labor and capital. A contract of employment is impressed
with public interest. The provisions of applicable statutes are deemed written into the contract, and the parties
are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by
simply contracting with each other.[6]
WHEREFORE, above premises considered, the herein complaint is hereby DISMISSED for lack of merit.
However, we cannot completely negate the fact that complainants did and do actually render services to the
Company. It is with this in mind and considering the difficulty the complainants may face in looking for another
job in case they are no longer re-engaged that we direct the company to pay complainants Fifteen Thousand
Pesos each (P15,000.00) as financial assistance. It is however understood that the financial assistance
previously extended by the Company to some of the complainants shall be deducted from the financial
assistance herein awarded.[7]
The receipt of the amount awarded by the voluntary arbitrator, as well as the execution of a release, waiver
and quitclaim, is, in effect, an acceptance of said decision. There is nothing on record which could indicate
that the execution thereof by thirty-six (36) of the respondent workers has been attended by fraud or
deceit. While quitclaims executed by employees are commonly frowned upon as being contrary to public

policy and are ineffective to bar claims for the full measure of their legal rights, there are, however, legitimate
waivers that represent a voluntary and reasonable settlement of laborers claims which should be so respected
by the Court as the law between the parties. [8] Where the person making the waiver has done so voluntarily,
with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as being a valid and binding undertaking. Dire necessity is not an acceptable
ground for annulling the release, when it is not shown that the employee has been forced to execute it.

Samson vs NLRC, 330 SCRA 460

FACTS
This pertains to the case (NCR-00-01-00652-94) filed by the complainant Rufino Norberto F.
Samson against the respondents Schering Plough Corp. (SPC for brevity) and Mr. Leo C.
Riconalla, National Sales Manager, for money equivalent of rice subsidy for the period April
1990 to December 1992 and holiday pay, now deemed submitted for resolution based on
records available.
On February 1, 1994, said complainant filed another case (NCR-00-02-00887-94) for illegal
preventive suspension raffled to the Honorable Labor Arbiter Donato G. Quinto, Jr. and
consolidated to the above case number.
Likewise, on February 4, 1994, complainant filed a Motion to Amend Complaint and averred
pertinently that x x x complainant was placed under an indefinite preventive suspension on 25
January 1994; and x x x was arbitrarily and summarily terminated from employment on 03
February 1994 on ground of loss of confidence.
As culled from the records of the instant case, what really precipitated complainants preventive
suspension culminating to his dismissal is (sic) the incident that took place on December 17,
1993 as gleaned from the exchange of letters/memoranda from both parties.
In a letter dated 25 January 1994 (Annex A) addressed to the complainant Mr. Samson signed
by one J.L. Estingor, the latter called the attention of (sic) the complainants conduct x x x in a
manner inimical to the interests of SPC and enumerated the following acts committed by the
complainant

ISSUE
whether petitioner was validly dismissed
RULING
Samson was illegally dismissed.
In this case, the alleged misconduct of petitioner, when viewed in its context, is not of such serious and grave
character as to warrant his dismissal. First, petitioner made the alleged offensive utterances and obscene
gesture during an informal Christmas gathering of respondent companys district sales managers and
marketing staff. The gathering was just a casual get-together of employees. It is to be expected during this kind
of gatherings, where tongues are more often than not loosened by liquor or other alcoholic beverages, that

employees freely express their grievances and gripes against their employers. Employees should be allowed
wider latitude to freely express their sentiments during these kinds of occasions which are beyond the
disciplinary authority of the employer. Significantly, it does not appear in the records that petitioner possessed
any ascendancy over the employees who heard his utterances as to cause demoralization in the ranks.
Second, petitioners outburst was in reaction to the decision of the management in the "Cua Lim" case.
Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture to express his dissatisfaction
over said management decision were clearly in bad taste but these acts were not intended to malign or cast
aspersion on the person of respondent companys president and general manager.
Third, respondent company itself did not seem to consider the offense of petitioner serious and grave enough
to warrant an immediate investigation on the matter. It must be recalled that petitioner uttered the alleged
offensive language at an informal gathering on 17 December 1993. He then allegedly made threatening
remarks about the forthcoming sales conference on 3 January 1994. During a meeting on 4 January 1994, Mr.
Titong, Jr., the president and general manager of respondent company and allegedly to whom the offensive
words were directed, merely admonished petitioner stating that, "when there is a disagreement, act in a
professional and civilized manner." Respondent company allowed several weeks to pass before it deemed it
necessary to require petitioner to explain why no disciplinary action should be taken against him for his
behavior. This seeming lack of urgency on the part of respondent company in taking any disciplinary action
against petitioner negates its charge that the latters misbehavior constituted serious misconduct.
Given the environmental circumstances of this case, the acts of petitioner clearly do not constitute serious
misconduct as to justify his dismissal. Neither is his dismissal justified on ground of loss of confidence. As a
ground for dismissal, the term "trust and confidence" is restricted to managerial employees. We share the view
of the Solicitor General that petitioner is not a managerial employee. Before one may be properly considered a
managerial employee, all the following conditions must be met:
(1) Their primary duty consists of the management of the establishment in which they are employed or of a
department or sub-division thereof;
(2) They customarily and regularly direct the work of two or more employees therein;
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to the promotion or any other change of status of other
employees we given particular weight.
Villuga vs NLRC, 225 SCRA 537
FACTS
petitioner Elias Villuga was employed as cutter in the tailoring shop owned by private respondent Rodolfo
Zapanta and known as Broad Street Tailoring located at Shaw Boulevard, Mandaluyong, Metro Manila. As
cutter, he was paid a fixed monthly salary of P840.00 and a monthly transportation allowance of P40.00. In
addition to his work as cutter, Villuga was assigned the chore of distributing work to the shops tailors or sewers
when both the shops manager and assistant manager would be absent. He saw to it that their work conformed
with the pattern he had prepared and if not, he had them redone, repaired or resewn.
The other petitioners were either ironers, repairmen and sewers. They were paid a fixed amount for every item
ironed, repaired or sewn, regardless of the time consumed in accomplishing the task. Petitioners did not fill up
any time record since they did not observe regular or fixed hours of work. They were allowed to perform their
work at home especially when the volume of work, which depended on the number of job orders, could no

longer be coped up with. From February 17 to 22, 1978, petitioner Villuga failed to report for work allegedly due
to illness. For not properly notifying his employer, he was considered to have abandoned his work.
In a complaint dated March 27, 1978, filed with the Regional Office of the Department of Labor, Villuga claimed
that he was refused admittance when he reported for work after his absence, allegedly due to his active
participation in the union organized by private respondents tailors. He further claimed that he was not paid
overtime pay, holiday pay, premium pay for work done on rest days and holidays, service incentive leave pay
and 13th month pay.
Petitioners Renato Abistado, Jill Mendoza, Benjamin Brizuela and David Oro also claimed that they were
dismissed from their employment because they joined the Philippine Social Security Labor Union (PSSLU).
Petitioners Andres Abad, Norlito Ladia, Marcelo Aguilan, Nelia Brizuela, Flora Escobido, Justilita Cabaneg and
Domingo Saguit claimed that they stopped working because private respondents gave them few pieces of work
to do after learning of their membership with PSSLU. All the petitioners laid claims under the different labor
standard laws which private respondent allegedly violated.
ISSUE

RULING
to be a member of a managerial staff, the following elements must concur or co-exist, to wit: (1) that his
primary duty consists of the performance of work directly related to management policies; (2) that he
customarily and regularly exercises discretion and independent judgment in the performance of his functions;
(3) that he regularly and directly assists in the management of the establishment; and (4) that he does not
devote his twenty per cent of his time to work other than those described above.
Applying the above criteria to petitioner Elias Villuga's case, it is undisputed that his primary work or duty is to
cut or prepare patterns for items to be sewn, not to lay down or implement any of the management policies, as
there is a manager and an assistant manager who perform said functions. It is true that in the absence of the
manager the assistant manager, he distributes and assigns work to employees but such duty, though involving
discretion, is occasional and not regular or customary
Consequently, the exclusion of Villuga from the benefits claimed under Article 87 (overtime pay and premium
pay for holiday and rest day work), Article 94, (holiday pay), and Article 95 (service incentive leave pay) of the
Labor Code, on the ground that he is a managerial employee is unwarranted. He is definitely a rank and file
employee hired to perform the work of the cutter and not hired to perform supervisory or managerial functions.
The fact that he is uniformly paid by the month does not exclude him from the benefits of holiday pay as held in
the case ofInsular Bank of America Employees Union v . Inciong. 7 He should therefore be paid in addition to
the 13th month pay, his overtime pay, holiday pay, premium pay for holiday and rest day, and service incentive
leave pay.

For abandonment to constitute a valid cause for dismissal, there must be a deliberate and unjustified refusal of
the employee to resume his employment. Mere absence is not sufficient, it must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want to work anymore. 8 At any rate, dismissal
of an employee due to his prolonged absence without leave by reason of illness duly established by the
presentation of a medical certificate is not justified. 9 In the case at bar, however, considering that petitioner
Villuga absented himself for four (4) days without leave and without submitting a medical certificate to support
his claim of illness, the imposition of a sanction is justified, but surely, not dismissal, in the light of the fact that

this is petitioner's first offense. In lieu of reinstatement, petitioner Villuga should be paid separation pay where
reinstatement can no longer be effected in view of the long passage of time or because of the realities of the
situation. 10 But petitioner should not be granted backwages in addition to reinstatement as the same is not just
and equitable under the circumstances considering that he was not entirely free from blame. 11