G.R. No.

74246 January 26, 1989

MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners,

vs.
HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment judgment, and JOAQUIN A.
DEQUILA, respondents.

Cruz, Agabin, Atienza & Alday for petitioners.

The Solicitor General of public respondent.

Norberto M. Alensuela, Sr. for private respondent.

NARVASA, J.:

There is no dispute about the facts in this case, and the only question for the Court is whether or not, Article 282 of the Labor Code
notwithstanding, probationary employment may validly be extended beyond the prescribed six-month period by agreement of the employer and
the employee.

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. 1

Dequila thereupon filed with the Ministry of Labor against Mariwasa and its Vice-President for Administration, Angel T. Dazo, a complaint for illegal
dismissal and violation of Presidential Decrees Nos. 928 and 1389.2 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. 5

Mariwasa and Dazo, now petitioners, thereafter be sought this Court to review Hon. Leogardo's decision on certiorari and prohibition, urging its
reversal for having been rendered with grave abuse of discretion and/or without or in excess of jurisdiction. 6

The petition, as well as the parties' comments subsequently submitted all underscore the fact that the threshold issue here is, as first above stated,
the legal one of whether employer and employee may by agreement extend the probationary period of employment beyond the six months
prescribed in Art. 282 of the Labor Code, which provides that:

Art. 282. Probationary Employment. — Probationary employment shall not exceed six (6) months from the date the employee
started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee
who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after probationary period shall be considered a regular employee.'

The Court agrees with the Solicitor General, who takes the same position as the petitioners, that such an extension may lawfully be covenanted,
notwithstanding the seemingly restrictive language of the cited provision. Buiser vs. Leogardo, Jr . 7 recognized agreements stipulating longer
probationary periods as constituting lawful exceptions to the statutory prescription limiting such periods to six months, when it upheld as valid an
employment contract between an employer and two of its employees that provided for an eigthteen-month probation period. This Court there
held:

'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.

xxx

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.

WHEREFORE, the petition is granted. The orders of the public respondent complained of are reversed and set aside. Private respondent's complaint
against petitioners for illegal dismissal and violation of Presidential Decrees 928 and 1389 is dismissed for lack of merit, without pronouncement as
to costs.

SO ORDERED.
G.R. No. 192571 July 23, 2013

ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN
G. ALMAZAR, Petitioners,
vs.
PEARLIE ANN F. ALCARAZ, Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated December 10,2009 and Resolution3 dated June 9, 2010 of the Court of
Appeals (CA) in CA-G.R. SP No. 101045 which pronounced that the National Labor Relations Commission (NLRC) did not gravely abuse its discretion
when it ruled that respondent Pearlie Ann F. Alcaraz (Alcaraz) was illegally dismissed from her employment.

The Facts

On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott) caused the publication in a major broadsheet newspaper of its need for a
Medical and Regulatory Affairs Manager (Regulatory Affairs Manager) who would: (a) be responsible for drug safety surveillance operations,
staffing, and budget; (b) lead the development and implementation of standard operating procedures/policies for drug safety surveillance and
vigilance; and (c) act as the primary interface with internal and external customers regarding safety operations and queries. 4 Alcaraz - who was
then a Regulatory Affairs and Information Manager at Aventis Pasteur Philippines, Incorporated (another pharmaceutical company like Abbott) –
showed interest and submitted her application on October 4, 2004.5

On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position which was an item under the company’s Hospira Affiliate
Local Surveillance Unit (ALSU) department. 6 In Abbott’s offer sheet.7 it was stated that Alcaraz was to be employed on a probationary basis.8 Later
that day, she accepted the said offer and received an electronic mail (e-mail) from Abbott’s Recruitment Officer, petitioner Teresita C. Bernardo
(Bernardo), confirming the same. Attached to Bernardo’s e-mail were Abbott’s organizational chart and a job description of Alcaraz’s work.9

On February 12, 2005, Alcaraz signed an employment contract which stated, inter alia, that she was to be placed on probation for a period of six (6)
months beginning February 15, 2005 to August 14, 2005. The said contract was also signed by Abbott’s General Manager, petitioner Edwin Feist
(Feist):10

PROBATIONARY EMPLOYMENT

Dear Pearl,

After having successfully passed the pre-employment requirements, you are hereby appointed as follows:

Position Title : Regulatory Affairs Manager

Department : Hospira

The terms of your employment are:

Nature of Employment : Probationary

Effectivity : February 15, 2005 to August 14, 2005

Basic Salary : ₱110,000.00/ month

It is understood that you agree to abide by all existing policies, rules and regulations of the company, as well as those, which may be hereinafter
promulgated.

Unless renewed, probationary appointment expires on the date indicated subject to earlier termination by the Company for any justifiable reason.

If you agree to the terms and conditions of your employment, please signify your conformity below and return a copy to HRD.

Welcome to Abbott!
Very truly yours,

Sgd.
EDWIN D. FEIST
General Manager

CONFORME:

Sgd.
PEARLIE ANN FERRER-ALCARAZ

During Alcaraz’s pre-employment orientation, petitioner Allan G. Almazar (Almazar), Hospira’s Country Transition Manager, briefed her on her
duties and responsibilities as Regulatory Affairs Manager, stating that: (a) she will handle the staff of Hospira ALSU and will directly report to
Almazar on matters regarding Hopira’s local operations, operational budget, and performance evaluation of the Hospira ALSU Staff who are on
probationary status; (b) she must implement Abbott’s Code of Good Corporate Conduct (Code of Conduct), office policies on human resources and
finance, and ensure that Abbott will hire people who are fit in the organizational discipline; (c) petitioner Kelly Walsh (Walsh), Manager of the
Literature Drug Surveillance Drug Safety of Hospira, will be her immediate supervisor; (d) she should always coordinate with Abbott’s human
resource officers in the management and discipline of the staff; (e) Hospira ALSU will spin off from Abbott in early 2006 and will be officially
incorporated and known as Hospira, Philippines. In the interim, Hospira ALSU operations will still be under Abbott’s management, excluding the
technical aspects of the operations which is under the control and supervision of Walsh; and (f) the processing of information and/or raw material
data subject of Hospira ALSU operations will be strictly confined and controlled under the computer system and network being maintained and
operated from the United States. For this purpose, all those involved in Hospira ALSU are required to use two identification cards: one, to identify
them as Abbott’s employees and another, to identify them as Hospira employees.11

On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s Human Resources (HR) Director, sent Alcaraz an e-mail which contained
an explanation of the procedure for evaluating the performance of probationary employees and further indicated that Abbott had only one
evaluation system for all of its employees. Alcaraz was also given copies of Abbott’s Code of Conduct and Probationary Performance Standards and
Evaluation (PPSE) and Performance Excellence Orientation Modules (Performance Modules) which she had to apply in line with her task of
evaluating the Hospira ALSU staff.12

Abbott’s PPSE procedure mandates that the job performance of a probationary employee should be formally reviewed and discussed with the
employee at least twice: first on the third month and second on the fifth month from the date of employment. The necessary Performance
Improvement Plan should also be made during the third-month review in case of a gap between the employee’s performance and the standards
set. These performance standards should be discussed in detail with the employee within the first two (2) weeks on the job. It was equally required
that a signed copy of the PPSE form must be submitted to Abbott’s Human Resources Department (HRD) and shall serve as documentation of the
employee’s performance during his/her probationary period. This shall form the basis for recommending the confirmation or termination of the
probationary employment.13

During the course of her employment, Alcaraz noticed that some of the staff had disciplinary problems. Thus, she would reprimand them for their
unprofessional behavior such as non-observance of the dress code, moonlighting, and disrespect of Abbott officers. However, Alcaraz’s method of
management was considered by Walsh to be "too strict."14 Alcaraz approached Misa to discuss these concerns and was told to "lie low" and let
Walsh handle the matter. Misa even assured her that Abbott’s HRD would support her in all her management decisions.15

On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on the staff’s performance evaluation as their probationary
periods were about to end. This Alcaraz eventually submitted.16

On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible (Terrible), Abbott’s former HR Director, to discuss certain issues regarding
staff performance standards. In the course thereof, Alcaraz accidentally saw a printed copy of an e-mail sent by Walsh to some staff members
which essentially contained queries regarding the former’s job performance. Alcaraz asked if Walsh’s action was the normal process of evaluation.
Terrible said that it was not.17

On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager.18 Thereafter, Walsh and Terrible requested Alcaraz to tender her resignation, else they be
forced to terminate her services. She was also told that, regardless of her choice, she should no longer report for work and was asked to surrender
her office identification cards. She requested to be given one week to decide on the same, but to no avail. 19

On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales (Gonzales), that she would be on leave for that day. However,
Gonzales told her that Walsh and Terrible already announced to the whole Hospira ALSU staff that Alcaraz already resigned due to health
reasons.20

On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to Alcaraz a letter stating that her services had been terminated effective May
19, 2005.21 The letter detailed the reasons for Alcaraz’s termination – particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed to
gain the trust of her staff and to build an effective rapport with them; (c) failed to train her staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on case processing and article review which were necessary for the proper performance of her
duties.22 On May 27, 2005, Alcaraz received another copy of the said termination letter via registered mail.23

Alcaraz felt that she was unjustly terminated from her employment and thus, filed a complaint for illegal dismissal and damages against Abbott and
its officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible, and Feist. 24 She claimed that she should have already been considered as a regular
and not a probationary employee given Abbott’s failure to inform her of the reasonable standards for her regularization upon her engagement as
required under Article 29525 of the Labor Code. In this relation, she contended that while her employment contract stated that she was to be
engaged on a probationary status, the same did not indicate the standards on which her regularization would be based. 26 She further averred that
the individual petitioners maliciously connived to illegally dismiss her when: (a) they threatened her with termination; (b) she was ordered not to
enter company premises even if she was still an employee thereof; and (c) they publicly announced that she already resigned in order to humiliate
her.27

On the contrary, petitioners maintained that Alcaraz was validly terminated from her probationary employment given her failure to satisfy the
prescribed standards for her regularization which were made known to her at the time of her engagement. 28

The LA Ruling

In a Decision dated March 30, 2006,29 the LA dismissed Alcaraz’s complaint for lack of merit.

The LA rejected Alcaraz’s argument that she was not informed of the reasonable standards to qualify as a regular employee considering her
admissions that she was briefed by Almazar on her work during her pre-employment orientation meeting30 and that she received copies of
Abbott’s Code of Conduct and Performance Modules which were used for evaluating all types of Abbott employees. 31 As Alcaraz was unable to
meet the standards set by Abbott as per her performance evaluation, the LA ruled that the termination of her probationary employment was
justified.32 Lastly, the LA found that there was no evidence to conclude that Abbott’s officers and employees acted in bad faith in terminating
Alcaraz’s employment.33

Displeased with the LA’s ruling, Alcaraz filed an appeal with the National Labor Relations Commission (NLRC).

The NLRC Ruling

On September 15, 2006, the NLRC rendered a Decision,34 annulling and setting aside the LA’s ruling, the dispositive portion of which reads:

WHEREFORE, the Decision of the Labor Arbiter dated 31 March 2006 [sic] is hereby reversed, annulled and set aside and judgment is hereby
rendered:

1. Finding respondents Abbot [sic] and individual respondents to have committed illegal dismissal;
2. Respondents are ordered to immediately reinstate complainant to her former position without loss of seniority rights immediately
upon receipt hereof;
3. To jointly and severally pay complainant backwages computed from 16 May 2005 until finality of this decision. As of the date hereof
the backwages is computed at

a. Backwages for 15 months - PhP 1,650,000.00

b. 13th month pay - 110,000.00

TOTAL PhP 1,760,000.00

4. Respondents are ordered to pay complainant moral damages of ₱50,000.00 and exemplary damages of ₱50,000.00.
5. Respondents are also ordered to pay attorney’s fees of 10% of the total award.
6. All other claims are dismissed for lack of merit.

SO ORDERED.35

The NLRC reversed the findings of the LA and ruled that there was no evidence showing that Alcaraz had been apprised of her probationary status
and the requirements which she should have complied with in order to be a regular employee. 36 It held that Alcaraz’s receipt of her job description
and Abbott’s Code of Conduct and Performance Modules was not equivalent to her being actually informed of the performance standards upon
which she should have been evaluated on.37 It further observed that Abbott did not comply with its own standard operating procedure in
evaluating probationary employees.38 The NLRC was also not convinced that Alcaraz was terminated for a valid cause given that petitioners’
allegation of Alcaraz’s "poor performance" remained unsubstantiated.39
Petitioners filed a motion for reconsideration which was denied by the NLRC in a Resolution dated July 31, 2007. 40

Aggrieved, petitioners filed with the CA a Petition for Certiorari with Prayer for Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction, docketed as CA G.R. SP No. 101045 (First CA Petition), alleging grave abuse of discretion on the part of NLRC when it ruled
that Alcaraz was illegally dismissed.41

Pending resolution of the First CA Petition, Alcaraz moved for the execution of the NLRC’s Decision before the LA, which petitioners strongly
opposed. The LA denied the said motion in an Order dated July 8, 2008 which was, however, eventually reversed on appeal by the NLRC.42 Due to
the foregoing, petitioners filed another Petition for Certiorari with the CA, docketed as CA G.R. SP No. 111318 (Second CA Petition), assailing the
propriety of the execution of the NLRC decision.43

The CA Ruling

With regard to the First CA Petition, the CA, in a Decision44 dated December 10, 2009, affirmed the ruling of the NLRC and held that the latter did
not commit any grave abuse of discretion in finding that Alcaraz was illegally dismissed.

It observed that Alcaraz was not apprised at the start of her employment of the reasonable standards under which she could qualify as a regular
employee.45 This was based on its examination of the employment contract which showed that the same did not contain any standard of
performance or any stipulation that Alcaraz shall undergo a performance evaluation before she could qualify as a regular employee.46 It also found
that Abbott was unable to prove that there was any reasonable ground to terminate Alcaraz’s employment. 47 Abbott moved for the
reconsideration of the aforementioned ruling which was, however, denied by the CA in a Resolution 48 dated June 9, 2010.

The CA likewise denied the Second CA Petition in a Resolution dated May 18, 2010 (May 18, 2010 Resolution) and ruled that the NLRC was correct
in upholding the execution of the NLRC Decision.49 Thus, petitioners filed a motion for reconsideration.

While the petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution was pending, Alcaraz again moved for the issuance of a writ
of execution before the LA. On June 7, 2010, petitioners received the LA’s order granting Alcaraz’s motion for execution which they in turn
appealed to the NLRC – through a Memorandum of Appeal dated June 16, 2010 (June 16, 2010 Memorandum of Appeal ) – on the ground that the
implementation of the LA’s order would render its motion for reconsideration moot and academic. 50

Meanwhile, petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution in the Second CA Petition was denied via a Resolution
dated October 4, 2010.51 This attained finality on January 10, 2011 for petitioners’ failure to timely appeal the same. 52 Hence, as it stands, only the
issues in the First CA petition are left to be resolved.

Incidentally, in her Comment dated November 15, 2010, Alcaraz also alleges that petitioners were guilty of forum shopping when they filed the
Second CA Petition pending the resolution of their motion for reconsideration of the CA’s December 10, 2009 Decision i.e., the decision in the First
CA Petition.53 She also contends that petitioners have not complied with the certification requirement under Section 5, Rule 7 of the Rules of Court
when they failed to disclose in the instant petition the filing of the June 16, 2010 Memorandum of Appeal filed before the NLRC.54

The Issues Before the Court

The following issues have been raised for the Court’s resolution: (a) whether or not petitioners are guilty of forum shopping and have violated the
certification requirement under Section 5, Rule 7 of the Rules of Court; (b) whether or not Alcaraz was sufficiently informed of the reasonable
standards to qualify her as a regular employee; (c) whether or not Alcaraz was validly terminated from her employment; and (d) whether or not the
individual petitioners herein are liable.

The Court’s Rulin

A. Forum Shopping and

Violation of Section 5, Rule 7
of the Rules of Court.

At the outset, it is noteworthy to mention that the prohibition against forum shopping is different from a violation of the certification requirement
under Section 5, Rule 7 of the Rules of Court. In Sps. Ong v. CA,55 the Court explained that:

x x x The distinction between the prohibition against forum shopping and the certification requirement should by now be too elementary to be
misunderstood. To reiterate, compliance with the certification against forum shopping is separate from and independent of the avoidance of the
act of forum shopping itself. There is a difference in the treatment between failure to comply with the certification requirement and violation of
the prohibition against forum shopping not only in terms of imposable sanctions but also in the manner of enforcing them. The former constitutes
sufficient cause for the dismissal without prejudice to the filing of the complaint or initiatory pleading upon motion and after hearing, while the
latter is a ground for summary dismissal thereof and for direct contempt. x x x. 56
As to the first, forum shopping takes place when a litigant files multiple suits involving the same parties, either simultaneously or successively, to
secure a favorable judgment. It exists where the elements of litis pendentia are present, namely: (a) identity of parties, or at least such parties who
represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c)
the identity with respect to the two preceding particulars in the two (2) cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other case.57

In this case, records show that, except for the element of identity of parties, the elements of forum shopping do not exist. Evidently, the First CA
Petition was instituted to question the ruling of the NLRC that Alcaraz was illegally dismissed. On the other hand, the Second CA Petition pertains to
the propriety of the enforcement of the judgment award pending the resolution of the First CA Petition and the finality of the decision in the labor
dispute between Alcaraz and the petitioners. Based on the foregoing, a judgment in the Second CA Petition will not constitute res judicata insofar
as the First CA Petition is concerned. Thus, considering that the two petitions clearly cover different subject matters and causes of action, there
exists no forum shopping.

As to the second, Alcaraz further imputes that the petitioners violated the certification requirement under Section 5, Rule 7 of the Rules of
Court58 by not disclosing the fact that it filed the June 16, 2010 Memorandum of Appeal before the NLRC in the instant petition.

In this regard, Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff who files a case should provide a complete statement of the present
status of any pending case if the latter involves the same issues as the one that was filed. If there is no such similar pending case, Section 5(a) of the
same rule provides that the plaintiff is obliged to declare under oath that to the best of his knowledge, no such other action or claim is pending.

Records show that the issues raised in the instant petition and those in the June 16, 2010 Memorandum of Appeal filed with the NLRC likewise
cover different subject matters and causes of action. In this case, the validity of Alcaraz’s dismissal is at issue whereas in the said Memorandum of
Appeal, the propriety of the issuance of a writ of execution was in question.

Thus, given the dissimilar issues, petitioners did not have to disclose in the present petition the filing of their June 16, 2010 Memorandum of
Appeal with the NLRC. In any event, considering that the issue on the propriety of the issuance of a writ of execution had been resolved in the
Second CA Petition – which in fact had already attained finality – the matter of disclosing the June 16, 2010 Memorandum of Appeal is now moot
and academic.

Having settled the foregoing procedural matter, the Court now proceeds to resolve the substantive issues.

B. Probationary employment;
grounds for termination.

A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the probationary employee may also
be terminated for failure to qualify as a regular employee in accordance with the reasonable standards made known by the employer to the
employee at the time of the engagement.59 Thus, the services of an employee who has been engaged on probationary basis may be terminated for
any of the following: (a) a just or (b) an authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer.60

Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the employer fails to inform the
probationary employee of the reasonable standards upon which the regularization would be based on at the time of the engagement, then the said
employee shall be deemed a regular employee, viz.:

(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular
employee.

In other words, the employer is made to comply with two (2) requirements when dealing with a probationary employee: first, the employer must
communicate the regularization standards to the probationary employee; and second, the employer must make such communication at the time of
the probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary
employee.

Keeping with these rules, an employer is deemed to have made known the standards that would qualify a probationary employee to be a regular
employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or accomplish during the trial period of
probation. This goes without saying that the employee is sufficiently made aware of his probationary status as well as the length of time of the
probation.

The exception to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or messengers. 61 Also,
in Aberdeen Court, Inc. v. Agustin,62 it has been held that the rule on notifying a probationary employee of the standards of regularization should
not be used to exculpate an employee who acts in a manner contrary to basic knowledge and common sense in regard to which there is no need to
spell out a policy or standard to be met. In the same light, an employee’s failure to perform the duties and responsibilities which have been clearly
made known to him constitutes a justifiable basis for a probationary employee’s non-regularization.

In this case, petitioners contend that Alcaraz was terminated because she failed to qualify as a regular employee according to Abbott’s standards
which were made known to her at the time of her engagement. Contrarily, Alcaraz claims that Abbott never apprised her of these standards and
thus, maintains that she is a regular and not a mere probationary employee.

The Court finds petitioners’ assertions to be well-taken.

A punctilious examination of the records reveals that Abbott had indeed complied with the above-stated requirements. This conclusion is largely
impelled by the fact that Abbott clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to, during the time
of her engagement, and the incipient stages of her employment. On this score, the Court finds it apt to detail not only the incidents which point out
to the efforts made by Abbott but also those circumstances which would show that Alcaraz was well-apprised of her employer’s expectations that
would, in turn, determine her regularization:

(a) On June 27, 2004, Abbott caused the publication in a major broadsheet newspaper of its need for a Regulatory Affairs Manager,
indicating therein the job description for as well as the duties and responsibilities attendant to the aforesaid position; this prompted
Alcaraz to submit her application to Abbott on October 4, 2004;

(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be employed on a probationary status;

(c) On February 12, 2005, Alcaraz signed an employment contract which specifically stated, inter alia, that she was to be placed on
probation for a period of six (6) months beginning February 15, 2005 to August 14, 2005;

(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her copies of Abbott’s organizational structure and her job
description through e-mail;

(e) Alcaraz was made to undergo a pre-employment orientation where Almazar informed her that she had to implement Abbott’s Code of
Conduct and office policies on human resources and finance and that she would be reporting directly to Walsh;

(f) Alcaraz was also required to undergo a training program as part of her orientation;

(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules from Misa who explained to her the procedure for
evaluating the performance of probationary employees; she was further notified that Abbott had only one evaluation system for all of its
employees; and

(h) Moreover, Alcaraz had previously worked for another pharmaceutical company and had admitted to have an "extensive training and
background" to acquire the necessary skills for her job.63

Considering the totality of the above-stated circumstances, it cannot, therefore, be doubted that Alcaraz was well-aware that her regularization
would depend on her ability and capacity to fulfill the requirements of her position as Regulatory Affairs Manager and that her failure to perform
such would give Abbott a valid cause to terminate her probationary employment.

Verily, basic knowledge and common sense dictate that the adequate performance of one’s duties is, by and of itself, an inherent and implied
standard for a probationary employee to be regularized; such is a regularization standard which need not be literally spelled out or mapped into
technical indicators in every case. In this regard, it must be observed that the assessment of adequate duty performance is in the nature of a
management prerogative which when reasonably exercised – as Abbott did in this case – should be respected. This is especially true of a
managerial employee like Alcaraz who was tasked with the vital responsibility of handling the personnel and important matters of her department.

In fine, the Court rules that Alcaraz’s status as a probationary employee and her consequent dismissal must stand. Consequently, in holding that
Alcaraz was illegally dismissed due to her status as a regular and not a probationary employee, the Court finds that the NLRC committed a grave
abuse of discretion.

To elucidate, records show that the NLRC based its decision on the premise that Alcaraz’s receipt of her job description and Abbott’s Code of
Conduct and Performance Modules was not equivalent to being actually informed of the performance standards upon which she should have been
evaluated on.64 It, however, overlooked the legal implication of the other attendant circumstances as detailed herein which should have warranted
a contrary finding that Alcaraz was indeed a probationary and not a regular employee – more particularly the fact that she was well-aware of her
duties and responsibilities and that her failure to adequately perform the same would lead to her non-regularization and eventually, her
termination.
Accordingly, by affirming the NLRC’s pronouncement which is tainted with grave abuse of discretion, the CA committed a reversible error which,
perforce, necessitates the reversal of its decision.

C. Probationary employment;
termination procedure.

A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not govern.65 Section 2, Rule I, Book VI
of the Implementing Rules of the Labor Code states that "if the termination is brought about by the x x x failure of an employee to meet the
standards of the employer in case of probationary employment, it shall be sufficient that a written notice is served the employee, within a
reasonable time from the effective date of termination."

As the records show, Alcaraz's dismissal was effected through a letter dated May 19, 2005 which she received on May 23, 2005 and again on May
27, 2005. Stated therein were the reasons for her termination, i.e., that after proper evaluation, Abbott determined that she failed to meet the
reasonable standards for her regularization considering her lack of time and people management and decision-making skills, which are necessary in
the performance of her functions as Regulatory Affairs Manager. 66 Undeniably, this written notice sufficiently meets the criteria set forth above,
thereby legitimizing the cause and manner of Alcaraz’s dismissal as a probationary employee under the parameters set by the Labor Code. 67

D. Employer’s violation of
company policy and
procedure.

Nonetheless, despite the existence of a sufficient ground to terminate Alcaraz’s employment and Abbott’s compliance with the Labor Code
termination procedure, it is readily apparent that Abbott breached its contractual obligation to Alcaraz when it failed to abide by its own procedure
in evaluating the performance of a probationary employee.

Veritably, a company policy partakes of the nature of an implied contract between the employer and employee. In Parts Depot, Inc. v.
Beiswenger,68 it has been held that:

Employer statements of policy . . . can give rise to contractual rights in employees without evidence that the parties mutually agreed that the policy
statements would create contractual rights in the employee, and, hence, although the statement of policy is signed by neither party, can be
unilaterally amended by the employer without notice to the employee, and contains no reference to a specific employee, his job description or
compensation, and although no reference was made to the policy statement in pre-employment interviews and the employee does not learn of its
existence until after his hiring. Toussaint, 292 N.W .2d at 892. The principle is akin to estoppel. Once an employer establishes an express personnel
policy and the employee continues to work while the policy remains in effect, the policy is deemed an implied contract for so long as it remains in
effect. If the employer unilaterally changes the policy, the terms of the implied contract are also thereby changed.1âwphi1 (Emphasis and
underscoring supplied.)

Hence, given such nature, company personnel policies create an obligation on the part of both the employee and the employer to abide by the
same.

Records show that Abbott’s PPSE procedure mandates, inter alia, that the job performance of a probationary employee should be formally
reviewed and discussed with the employee at least twice: first on the third month and second on the fifth month from the date of employment.
Abbott is also required to come up with a Performance Improvement Plan during the third month review to bridge the gap between the
employee’s performance and the standards set, if any.69 In addition, a signed copy of the PPSE form should be submitted to Abbott’s HRD as the
same would serve as basis for recommending the confirmation or termination of the probationary employment.70

In this case, it is apparent that Abbott failed to follow the above-stated procedure in evaluating Alcaraz. For one, there lies a hiatus of evidence that
a signed copy of Alcaraz’s PPSE form was submitted to the HRD. It was not even shown that a PPSE form was completed to formally assess her
performance. Neither was the performance evaluation discussed with her during the third and fifth months of her employment. Nor did Abbott
come up with the necessary Performance Improvement Plan to properly gauge Alcaraz’s performance with the set company standards.

While it is Abbott’s management prerogative to promulgate its own company rules and even subsequently amend them, this right equally demands
that when it does create its own policies and thereafter notify its employee of the same, it accords upon itself the obligation to faithfully
implement them. Indeed, a contrary interpretation would entail a disharmonious relationship in the work place for the laborer should never be
mired by the uncertainty of flimsy rules in which the latter’s labor rights and duties would, to some extent, depend.

In this light, while there lies due cause to terminate Alcaraz’s probationary employment for her failure to meet the standards required for her
regularization, and while it must be further pointed out that Abbott had satisfied its statutory duty to serve a written notice of termination, the fact
that it violated its own company procedure renders the termination of Alcaraz’s employment procedurally infirm, warranting the payment of
nominal damages. A further exposition is apropos.
Case law has settled that an employer who terminates an employee for a valid cause but does so through invalid procedure is liable to pay the
latter nominal damages.

In Agabon v. NLRC (Agabon),71 the Court pronounced that where the dismissal is for a just cause, the lack of statutory due process should not nullify
the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory
rights.72 Thus, in Agabon, the employer was ordered to pay the employee nominal damages in the amount of ₱30,000.00. 73

Proceeding from the same ratio, the Court modified Agabon in the case of Jaka Food Processing Corporation v. Pacot (Jaka) 74 where it created a
distinction between procedurally defective dismissals due to a just cause, on one hand, and those due to an authorized cause, on the other.

It was explained that if the dismissal is based on a just cause under Article 282 of the Labor Code (now Article 296) but the employer failed to
comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect,
initiated by an act imputable to the employee; if the dismissal is based on an authorized cause under Article 283 (now Article 297) but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the
employer’s exercise of his management prerogative.75 Hence, in Jaka, where the employee was dismissed for an authorized cause of
retrenchment76 – as contradistinguished from the employee in Agabon who was dismissed for a just cause of neglect of duty 77 – the Court ordered
the employer to pay the employee nominal damages at the higher amount of ₱50,000.00.

Evidently, the sanctions imposed in both Agabon and Jaka proceed from the necessity to deter employers from future violations of the statutory
due process rights of employees.78 In similar regard, the Court deems it proper to apply the same principle to the case at bar for the reason that an
employer’s contractual breach of its own company procedure – albeit not statutory in source – has the parallel effect of violating the laborer’s
rights. Suffice it to state, the contract is the law between the parties and thus, breaches of the same impel recompense to vindicate a right that has
been violated. Consequently, while the Court is wont to uphold the dismissal of Alcaraz because a valid cause exists, the payment of nominal
damages on account of Abbott’s contractual breach is warranted in accordance with Article 2221 of the Civil Code. 79

Anent the proper amount of damages to be awarded, the Court observes that Alcaraz’s dismissal proceeded from her failure to comply with the
standards required for her regularization. As such, it is undeniable that the dismissal process was, in effect, initiated by an act imputable to the
employee, akin to dismissals due to just causes under Article 296 of the Labor Code. Therefore, the Court deems it appropriate to fix the amount of
nominal damages at the amount of ₱30,000.00, consistent with its rulings in both Agabon and Jaka.

E. Liability of individual
petitioners as corporate
officers.

It is hornbook principle that personal liability of corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful
act of the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting
in damages to the corporation, its stockholders or other persons; (b) they consent to the issuance of watered down stocks or when, having
knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; (c) they agree to hold themselves personally
and solidarily liable with the corporation; or (d) they are made by specific provision of law personally answerable for their corporate action.80

In this case, Alcaraz alleges that the individual petitioners acted in bad faith with regard to the supposed crude manner by which her probationary
employment was terminated and thus, should be held liable together with Abbott. In the same vein, she further attributes the loss of some of her
remaining belongings to them.81

Alcaraz’s contention fails to persuade.

A judicious perusal of the records show that other than her unfounded assertions on the matter, there is no evidence to support the fact that the
individual petitioners herein, in their capacity as Abbott’s officers and employees, acted in bad faith or were motivated by ill will in terminating

Alcaraz’s services. The fact that Alcaraz was made to resign and not allowed to enter the workplace does not necessarily indicate bad faith on
Abbott’s part since a sufficient ground existed for the latter to actually proceed with her termination. On the alleged loss of her personal
belongings, records are bereft of any showing that the same could be attributed to Abbott or any of its officers. It is a well-settled rule that bad
faith cannot be presumed and he who alleges bad faith has the onus of proving it. All told, since Alcaraz failed to prove any malicious act on the
part of Abbott or any of its officers, the Court finds the award of moral or exemplary damages unwarranted.

WHEREFORE, the petition is GRANTED. The Decision dated December 10, 2009 and Resolution dated June 9, 2010 of the Court of Appeals in CA-
G.R. SP No. 101045 are hereby REVERSED and SET ASIDE. Accordingly, the Decision dated March 30, 2006 of the Labor Arbiter is REINSTATED with
the MODIFICATION that petitioner Abbott Laboratories, Philippines be ORDERED to pay respondent Pearlie Ann F. Alcaraz nominal damages in the
amount of ₱30,000.00 on account of its breach of its own company procedure.

SO ORDERED.
G.R. No. 164156 September 26, 2006

ABS-CBN BROADCASTING CORPORATION, petitioner,

vs.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN, respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 76582 and the Resolution denying the
motion for reconsideration thereof. The CA affirmed the Decision2 and Resolution3 of the National Labor Relations Commission (NLRC) in NLRC Case
No. V-000762-2001 (RAB Case No. VII-10-1661-2001) which likewise affirmed, with modification, the decision of the Labor Arbiter declaring the
respondents Marlyn Nazareno, Merlou Gerzon, Jennifer Deiparine and Josephine Lerasan as regular employees.

The Antecedents

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and owns a network of television and radio
stations, whose operations revolve around the broadcast, transmission, and relay of telecommunication signals. It sells and deals in or otherwise
utilizes the airtime it generates from its radio and television operations. It has a franchise as a broadcasting company, and was likewise issued a
license and authority to operate by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They were assigned
at the news and public affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly compensation of P4,000. They were
issued ABS-CBN employees’ identification cards and were required to work for a minimum of eight hours a day, including Sundays and holidays.
They were made to perform the following tasks and duties:

a) Prepare, arrange airing of commercial broadcasting based on the daily operations log and digicart of respondent ABS-CBN;
b) Coordinate, arrange personalities for air interviews;
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or incoming reports;
d) Facilitate, prepare and arrange airtime schedule for public service announcement and complaints;
e) Assist, anchor program interview, etc; and
f) Record, log clerical reports, man based control radio.4

Their respective working hours were as follows:

Name Time No. of Hours

1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7 ½

8:00 A.M.-12:00 noon
2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7 ½
3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs.
9:00 A.M.-6:00 P.M. (WF) 9 hrs.
4. Merlou Gerzon 9:00 A.M.-6:00 P.M. 9 hrs.5

The PAs were under the control and supervision of Assistant Station Manager Dante J. Luzon, and News Manager Leo Lastimosa.

On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective
during the period from December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining
unit, respondents were not included to the CBA.6

On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing the PAs that effective August 1, 2000, they would be assigned
to non-drama programs, and that the DYAB studio operations would be handled by the studio technician. Thus, their revised schedule and other
assignments would be as follows:

Monday – Saturday
4:30 A.M. – 8:00 A.M. – Marlene Nazareno.
Miss Nazareno will then be assigned at the Research Dept.
From 8:00 A.M. to 12:00
4:30 P.M. – 12:00 MN – Jennifer Deiparine
Sunday
5:00 A.M. – 1:00 P.M. – Jennifer Deiparine
1:00 P.M. – 10:00 P.M. – Joy Sanchez

Respondent Gerzon was assigned as the full-time PA of the TV News Department reporting directly to Leo Lastimosa.

On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay,
Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. The Labor Arbiter
directed the parties to submit their respective position papers. Upon respondents’ failure to file their position papers within the reglementary
period, Labor Arbiter Jose G. Gutierrez issued an Order dated April 30, 2001, dismissing the complaint without prejudice for lack of interest to
pursue the case. Respondents received a copy of the Order on May 16, 2001.7 Instead of re-filing their complaint with the NLRC within 10 days
from May 16, 2001, they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with Motion to Admit Position Paper and Motion to Submit
Case For Resolution.8 The Labor Arbiter granted this motion in an Order dated June 18, 2001, and forthwith admitted the position paper of the
complainants. Respondents made the following allegations:

1. Complainants were engaged by respondent ABS-CBN as regular and full-time employees for a continuous period of more than five (5) years with
a monthly salary rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this complaint on November 20, 2000.

Machine copies of complainants’ ABS-CBN Employee’s Identification Card and salary vouchers are hereto attached as follows, thus:

I. Jennifer Deiparine:

Exhibit "A" - ABS-CBN Employee’s Identification Card

Exhibit "B", - ABS-CBN Salary Voucher from Nov.
Exhibit "B-1" & 1999 to July 2000 at P4,000.00
Exhibit "B-2"
Date employed: September 15, 1995
Length of service: 5 years & nine (9) months

II. Merlou Gerzon - ABS-CBN Employee’s Identification Card

Exhibit "C"
Exhibit "D"
Exhibit "D-1" &
Exhibit "D-2" - ABS-CBN Salary Voucher from March
1999 to January 2001 at P4,000.00
Date employed: September 1, 1995
Length of service: 5 years & 10 months

III. Marlene Nazareno

Exhibit "E" - ABS-CBN Employee’s Identification Card

Exhibit "E" - ABS-CBN Salary Voucher from Nov.
Exhibit "E-1" & 1999 to December 2000
Exhibit :E-2"
Date employed: April 17, 1996
Length of service: 5 years and one (1) month

IV. Joy Sanchez Lerasan

Exhibit "F" - ABS-CBN Employee’s Identification Card

Exhibit "F-1" - ABS-CBN Salary Voucher from Aug.
Exhibit "F-2" & 2000 to Jan. 2001
Exhibit "F-3"
Exhibit "F-4" - Certification dated July 6, 2000

Acknowledging regular status of

Complainant Joy Sanchez Lerasan
Signed by ABS-CBN Administrative
Officer May Kima Hife
Date employed: April 15, 1998
Length of service: 3 yrs. and one (1) month9
Respondents insisted that they belonged to a "work pool" from which petitioner chose persons to be given specific assignments at its discretion,
and were thus under its direct supervision and control regardless of nomenclature. They prayed that judgment be rendered in their favor, thus:

WHEREFORE, premises considered, this Honorable Arbiter is most respectfully prayed, to issue an order compelling defendants to pay
complainants the following:

1. One Hundred Thousand Pesos (P100,000.00) each and by way of moral damages;
2. Minimum wage differential;
3. Thirteenth month pay differential;
4. Unpaid service incentive leave benefits;
5. Sick leave;
6. Holiday pay;
7. Premium pay;
8. Overtime pay;
9. Night shift differential.

Complainants further pray of this Arbiter to declare them regular and permanent employees of respondent ABS-CBN as a condition precedent for
their admission into the existing union and collective bargaining unit of respondent company where they may as such acquire or otherwise perform
their obligations thereto or enjoy the benefits due therefrom.

Complainants pray for such other reliefs as are just and equitable under the premises. 10

For its part, petitioner alleged in its position paper that the respondents were PAs who basically assist in the conduct of a particular program ran by
an anchor or talent. Among their duties include monitoring and receiving incoming calls from listeners and field reporters and calls of news
sources; generally, they perform leg work for the anchors during a program or a particular production. They are considered in the industry as
"program employees" in that, as distinguished from regular or station employees, they are basically engaged by the station for a particular or
specific program broadcasted by the radio station. Petitioner asserted that as PAs, the complainants were issued talent information sheets which
are updated from time to time, and are thus made the basis to determine the programs to which they shall later be called on to assist. The program
assignments of complainants were as follows:

a. Complainant Nazareno assists in the programs:

1) Nagbagang Balita (early morning edition)
2) Infor Hayupan
3) Arangkada (morning edition)
4) Nagbagang Balita (mid-day edition)

b. Complainant Deiparine assists in the programs:

1) Unzanith
2) Serbisyo de Arevalo
3) Arangkada (evening edition)
4) Balitang K (local version)
5) Abante Subu
6) Pangutana Lang

c. Complainant Gerzon assists in the program:

1) On Mondays and Tuesdays:
(a) Unzanith
(b) Serbisyo de Arevalo
(c) Arangkada (evening edition)
(d) Balitang K (local version)
(e) Abante Sugbu
(f) Pangutana Lang

2) On Thursdays
Nagbagang Balita

3) On Saturdays
(a) Nagbagang Balita
(b) Info Hayupan
(c) Arangkada (morning edition)
(d) Nagbagang Balita (mid-day edition)
4) On Sundays:
(a) Siesta Serenata
(b) Sunday Chismisan
(c) Timbangan sa Hustisya
(d) Sayri ang Lungsod
(e) Haranahan11

Petitioner maintained that PAs, reporters, anchors and talents occasionally "sideline" for other programs they produce, such as drama talents in
other productions. As program employees, a PA’s engagement is coterminous with the completion of the program, and may be extended/renewed
provided that the program is on-going; a PA may also be assigned to new programs upon the cancellation of one program and the commencement
of another. As such program employees, their compensation is computed on a program basis, a fixed amount for performance services irrespective
of the time consumed. At any rate, petitioner claimed, as the payroll will show, respondents were paid all salaries and benefits due them under the
law.12

Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA and interpret the same, especially since respondents were not
covered by the bargaining unit.

On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents, and declared that they were regular employees of petitioner; as
such, they were awarded monetary benefits. The fallo of the decision reads:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered declaring the complainants regular employees of the respondent
ABS-CBN Broadcasting Corporation and directing the same respondent to pay complainants as follows:

I - Merlou A. Gerzon P12,025.00

II - Marlyn Nazareno 12,025.00

III - Jennifer Deiparine 12,025.00

IV - Josephine Sanchez Lerazan 12,025.00

_________

P48,100.00

plus ten (10%) percent Attorney’s Fees or a TOTAL aggregate amount of PESOS: FIFTY TWO THOUSAND NINE HUNDRED TEN (P52,910.00).

Respondent Veneranda C. Sy is absolved from any liability.

SO ORDERED.13

However, the Labor Arbiter did not award money benefits as provided in the CBA on his belief that he had no jurisdiction to interpret and apply the
agreement, as the same was within the jurisdiction of the Voluntary Arbitrator as provided in Article 261 of the Labor Code.

Respondents’ counsel received a copy of the decision on August 29, 2001. Respondent Nazareno received her copy on August 27, 2001, while the
other respondents received theirs on September 8, 2001. Respondents signed and filed their Appeal Memorandum on September 18, 2001.

For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter denied and considered as an appeal, conformably with Section 5,
Rule V, of the NLRC Rules of Procedure. Petitioner forthwith appealed the decision to the NLRC, while respondents filed a partial appeal.

In its appeal, petitioner alleged the following:

1. That the Labor Arbiter erred in reviving or re-opening this case which had long been dismissed without prejudice for more than thirty (30)
calendar days;

2. That the Labor Arbiter erred in depriving the respondent of its Constitutional right to due process of law;

3. That the Labor Arbiter erred in denying respondent’s Motion for Reconsideration on an interlocutory order on the ground that the same is a
prohibited pleading;
4. That the Labor Arbiter erred when he ruled that the complainants are regular employees of the respondent;

5. That the Labor Arbiter erred when he ruled that the complainants are entitled to 13th month pay, service incentive leave pay and salary
differential; and

6. That the Labor Arbiter erred when he ruled that complainants are entitled to attorney’s fees.14

On November 14, 2002, the NLRC rendered judgment modifying the decision of the Labor Arbiter. The fallo of the decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez dated 30 July 2001 is SET ASIDE and VACATED and a new one is
entered ORDERING respondent ABS-CBN Broadcasting Corporation, as follows:

1. To pay complainants of their wage differentials and other benefits arising from the CBA as of 30 September 2002 in the aggregate amount of
Two Million Five Hundred, Sixty-One Thousand Nine Hundred Forty-Eight Pesos and 22/100 (P2,561,948.22), broken down as follows:

a. Deiparine, Jennifer - P 716,113.49

b. Gerzon, Merlou - 716,113.49

c. Nazareno, Marlyn - 716,113.49

d. Lerazan, Josephine Sanchez - 413,607.75

Total - P 2,561,948.22

2. To deliver to the complainants Two Hundred Thirty-Three (233) sacks of rice as of 30 September 2002 representing their rice subsidy in the CBA,
broken down as follows:

a. Deiparine, Jennifer - 60 Sacks

b. Gerzon, Merlou - 60 Sacks

c. Nazareno, Marlyn - 60 Sacks

d. Lerazan, Josephine Sanchez - 53 Sacks

Total 233 Sacks; and

3. To grant to the complainants all the benefits of the CBA after 30 September 2002.

SO ORDERED.15

The NLRC declared that the Labor Arbiter acted conformably with the Labor Code when it granted respondents’ motion to refile the complaint and
admit their position paper. Although respondents were not parties to the CBA between petitioner and the ABS-CBN Rank-and-File Employees
Union, the NLRC nevertheless granted and computed respondents’ monetary benefits based on the 1999 CBA, which was effective until September
2002. The NLRC also ruled that the Labor Arbiter had jurisdiction over the complaint of respondents because they acted in their individual
capacities and not as members of the union. Their claim for monetary benefits was within the context of Article 217(6) of the Labor Code. The
validity of respondents’ claim does not depend upon the interpretation of the CBA.

The NLRC ruled that respondents were entitled to the benefits under the CBA because they were regular employees who contributed to the profits
of petitioner through their labor. The NLRC cited the ruling of this Court in New Pacific Timber & Supply Company v. National Labor Relations
Commission.16

Petitioner filed a motion for reconsideration, which the NLRC denied.

Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court before the CA, raising both procedural and substantive issues, as
follows: (a) whether the NLRC acted without jurisdiction in admitting the appeal of respondents; (b) whether the NLRC committed palpable error in
scrutinizing the reopening and revival of the complaint of respondents with the Labor Arbiter upon due notice despite the lapse of 10 days from
their receipt of the July 30, 2001 Order of the Labor Arbiter; (c) whether respondents were regular employees; (d) whether the NLRC acted without
jurisdiction in entertaining and resolving the claim of the respondents under the CBA instead of referring the same to the Voluntary Arbitrators as
provided in the CBA; and (e) whether the NLRC acted with grave abuse of discretion when it awarded monetary benefits to respondents under the
CBA although they are not members of the appropriate bargaining unit.

On February 10, 2004, the CA rendered judgment dismissing the petition. It held that the perfection of an appeal shall be upon the expiration of
the last day to appeal by all parties, should there be several parties to a case. Since respondents received their copies of the decision on September
8, 2001 (except respondent Nazareno who received her copy of the decision on August 27, 2001), they had until September 18, 2001 within which
to file their Appeal Memorandum. Moreover, the CA declared that respondents’ failure to submit their position paper on time is not a ground to
strike out the paper from the records, much less dismiss a complaint.

Anent the substantive issues, the appellate court stated that respondents are not mere project employees, but regular employees who perform
tasks necessary and desirable in the usual trade and business of petitioner and not just its project employees. Moreover, the CA added, the award
of benefits accorded to rank-and-file employees under the 1996-1999 CBA is a necessary consequence of the NLRC ruling that respondents, as PAs,
are regular employees.

Finding no merit in petitioner’s motion for reconsideration, the CA denied the same in a Resolution17 dated June 16, 2004.

Petitioner thus filed the instant petition for review on certiorari and raises the following assignments of error:

1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND GRAVELY ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS
COMMISSION NOTWITHSTANDING THE PATENT NULLITY OF THE LATTER’S DECISION AND RESOLUTION.

2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING OF THE NLRC FINDING RESPONDENTS REGULAR EMPLOYEES.

3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING OF THE NLRC AWARDING CBA BENEFITS TO RESPONDENTS. 18

Considering that the assignments of error are interrelated, the Court shall resolve them simultaneously.

Petitioner asserts that the appellate court committed palpable and serious error of law when it affirmed the rulings of the NLRC, and entertained
respondents’ appeal from the decision of the Labor Arbiter despite the admitted lapse of the reglementary period within which to perfect the
same. Petitioner likewise maintains that the 10-day period to appeal must be reckoned from receipt of a party’s counsel, not from the time the
party learns of the decision, that is, notice to counsel is notice to party and not the other way around. Finally, petitioner argues that the reopening
of a complaint which the Labor Arbiter has dismissed without prejudice is a clear violation of Section 1, Rule V of the NLRC Rules; such order of
dismissal had already attained finality and can no longer be set aside.

Respondents, on the other hand, allege that their late appeal is a non-issue because it was petitioner’s own timely appeal that empowered the
NLRC to reopen the case. They assert that although the appeal was filed 10 days late, it may still be given due course in the interest of substantial
justice as an exception to the general rule that the negligence of a counsel binds the client. On the issue of the late filing of their position paper,
they maintain that this is not a ground to strike it out from the records or dismiss the complaint.

We find no merit in the petition.

We agree with petitioner’s contention that the perfection of an appeal within the statutory or reglementary period is not only mandatory, but also
jurisdictional; failure to do so renders the assailed decision final and executory and deprives the appellate court or body of the legal authority to
alter the final judgment, much less entertain the appeal. However, this Court has time and again ruled that in exceptional cases, a belated appeal
may be given due course if greater injustice may occur if an appeal is not given due course than if the reglementary period to appeal were strictly
followed.19 The Court resorted to this extraordinary measure even at the expense of sacrificing order and efficiency if only to serve the greater
principles of substantial justice and equity.20

In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving Article 22321 of the Labor Code a liberal application to prevent
the miscarriage of justice. Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of
the parties.22 We have held in a catena of cases that technical rules are not binding in labor cases and are not to be applied strictly if the result
would be detrimental to the workingman.23

Admittedly, respondents failed to perfect their appeal from the decision of the Labor Arbiter within the reglementary period therefor. However,
petitioner perfected its appeal within the period, and since petitioner had filed a timely appeal, the NLRC acquired jurisdiction over the case to give
due course to its appeal and render the decision of November 14, 2002. Case law is that the party who failed to appeal from the decision of the
Labor Arbiter to the NLRC can still participate in a separate appeal timely filed by the adverse party as the situation is considered to be of greater
benefit to both parties.24
We find no merit in petitioner’s contention that the Labor Arbiter abused his discretion when he admitted respondents’ position paper which had
been belatedly filed. It bears stressing that the Labor Arbiter is mandated by law to use every reasonable means to ascertain the facts in each case
speedily and objectively, without technicalities of law or procedure, all in the interest of due process. 25 Indeed, as stressed by the appellate court,
respondents’ failure to submit a position paper on time is not a ground for striking out the paper from the records, much less for dismissing a
complaint.26 Likewise, there is simply no truth to petitioner’s assertion that it was denied due process when the Labor Arbiter admitted
respondents’ position paper without requiring it to file a comment before admitting said position paper. The essence of due process in
administrative proceedings is simply an opportunity to explain one’s side or an opportunity to seek reconsideration of the action or ruling
complained of. Obviously, there is nothing in the records that would suggest that petitioner had absolute lack of opportunity to be
heard.27 Petitioner had the right to file a motion for reconsideration of the Labor Arbiter’s admission of respondents’ position paper, and even file a
Reply thereto. In fact, petitioner filed its position paper on April 2, 2001. It must be stressed that Article 280 of the Labor Code was encoded in our
statute books to hinder the circumvention by unscrupulous employers of the employees’ right to security of tenure by indiscriminately and
absolutely ruling out all written and oral agreements inharmonious with the concept of regular employment defined therein.28

We quote with approval the following pronouncement of the NLRC:

The complainants, on the other hand, contend that respondents assailed the Labor Arbiter’s order dated 18 June 2001 as violative of the NLRC
Rules of Procedure and as such is violative of their right to procedural due process. That while suggesting that an Order be instead issued by the
Labor Arbiter for complainants to refile this case, respondents impliedly submit that there is not any substantial damage or prejudice upon the
refiling, even so, respondents’ suggestion acknowledges complainants right to prosecute this case, albeit with the burden of repeating the same
procedure, thus, entailing additional time, efforts, litigation cost and precious time for the Arbiter to repeat the same process twice. Respondent’s
suggestion, betrays its notion of prolonging, rather than promoting the early resolution of the case.

Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-opened the dismissed case without prejudice beyond the ten (10)
day reglementary period had inadvertently failed to follow Section 16, Rule V, Rules Procedure of the NLRC which states:

"A party may file a motion to revive or re-open a case dismissed without prejudice within ten (10) calendar days from receipt of notice of the order
dismissing the same; otherwise, his only remedy shall be to re-file the case in the arbitration branch of origin."

the same is not a serious flaw that had prejudiced the respondents’ right to due process. The case can still be refiled because it has not yet
prescribed. Anyway, Article 221 of the Labor Code provides:

"In any proceedings before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the
interest of due process."

The admission by the Labor Arbiter of the complainants’ Position Paper and Supplemental Manifestation which were belatedly filed just only shows
that he acted within his discretion as he is enjoined by law to use every reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure, all in the interest of due process. Indeed, the failure to submit a position paper on
time is not a ground for striking out the paper from the records, much less for dismissing a complaint in the case of the complainant. (University of
Immaculate Conception vs. UIC Teaching and Non-Teaching Personnel Employees, G.R. No. 144702, July 31, 2001).

"In admitting the respondents’ position paper albeit late, the Labor Arbiter acted within her discretion. In fact, she is enjoined by law to use every
reasonable means to ascertain the facts in each case speedily and objectively, without technicalities of law or procedure, all in the interest of due
process". (Panlilio vs. NLRC, 281 SCRA 53).

The respondents were given by the Labor Arbiter the opportunity to submit position paper. In fact, the respondents had filed their position paper
on 2 April 2001. What is material in the compliance of due process is the fact that the parties are given the opportunities to submit position papers.

"Due process requirements are satisfied where the parties are given the opportunities to submit position papers". (Laurence vs. NLRC, 205 SCRA
737).

Thus, the respondent was not deprived of its Constitutional right to due process of law. 29

We reject, as barren of factual basis, petitioner’s contention that respondents are considered as its talents, hence, not regular employees of the
broadcasting company. Petitioner’s claim that the functions performed by the respondents are not at all necessary, desirable, or even vital to its
trade or business is belied by the evidence on record.

Case law is that this Court has always accorded respect and finality to the findings of fact of the CA, particularly if they coincide with those of the
Labor Arbiter and the National Labor Relations Commission, when supported by substantial evidence. 30 The question of whether respondents are
regular or project employees or independent contractors is essentially factual in nature; nonetheless, the Court is constrained to resolve it due to
its tremendous effects to the legions of production assistants working in the Philippine broadcasting industry.

We agree with respondents’ contention that where a person has rendered at least one year of service, regardless of the nature of the activity
performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being
that a customary appointment is not indispensable before one may be formally declared as having attained regular status. Article 280 of the Labor
Code provides:

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

In Universal Robina Corporation v. Catapang,31 the Court reiterated the test in determining whether one is a regular employee:

The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by
the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can be determined by considering the nature of 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.32

As elaborated by this Court in Magsalin v. National Organization of Working Men: 33

Even while the language of law might have been more definitive, the clarity of its spirit and intent, i.e., to ensure a "regular" worker’s 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.34

Not considered regular employees are "project employees," the completion or termination of which is more or less determinable at the time of
employment, such as those employed in connection with a particular construction project, and "seasonal employees" whose employment by its
nature is only desirable for a limited period of time. Even then, any employee who has rendered at least one year of service, whether continuous or
intermittent, is deemed regular with respect to the activity performed and while such activity actually exists.

It is of no moment that petitioner hired respondents as "talents." The fact that respondents received pre-agreed "talent fees" instead of salaries,
that they did not observe the required office hours, and that they were permitted to join other productions during their free time are not
conclusive of the nature of their employment. Respondents cannot be considered "talents" because they are not actors or actresses or radio
specialists or mere clerks or utility employees. They are regular employees who perform several different duties under the control and direction of
ABS-CBN executives and supervisors.

Thus, there are two kinds of regular employees under the law: (1) those engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken,
with respect to the activities in which they are employed.35

The law overrides such conditions which are prejudicial to the interest of the worker whose weak bargaining situation necessitates the succor of
the State. What determines whether a certain employment is regular or otherwise is not the will or word of the employer, to which the worker
oftentimes acquiesces, much less the procedure of hiring the employee or the manner of paying the salary or the actual time spent at work. It is
the character of the activities performed in relation to the particular trade or business taking into account all the circumstances, and in some cases
the length of time of its performance and its continued existence.36 It is obvious that one year after they were employed by petitioner, respondents
became regular employees by operation of law.37

Additionally, respondents cannot be considered as project or program employees because no evidence was presented to show that the duration
and scope of the project were determined or specified at the time of their engagement. Under existing jurisprudence, project could refer to two
distinguishable types of activities. First, a project may refer to a particular job or undertaking that is within the regular or usual business of the
employer, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins
and ends at determined or determinable times. Second, the term project may also refer to a particular job or undertaking that is not within the
regular business of the employer. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business
operations of the employer. The job or undertaking also begins and ends at determined or determinable times. 38

The principal test is whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of
which were specified at the time the employees were engaged for that project.39

In this case, it is undisputed that respondents had continuously performed the same activities for an average of five years. Their assigned tasks are
necessary or desirable in the usual business or trade of the petitioner. The persisting need for their services is sufficient evidence of the necessity
and indispensability of such services to petitioner’s business or trade. 40 While length of time may not be a sole controlling test for project
employment, it can be a strong factor to determine whether the employee was hired for a specific undertaking or in fact tasked to perform
functions which are vital, necessary and indispensable to the usual trade or business of the employer. 41 We note further that petitioner did not
report the termination of respondents’ employment in the particular "project" to the Department of Labor and Employment Regional Office having
jurisdiction over the workplace within 30 days following the date of their separation from work, using the prescribed form on employees’
termination/ dismissals/suspensions.42

As gleaned from the records of this case, petitioner itself is not certain how to categorize respondents. In its earlier pleadings, petitioner classified
respondents as program employees, and in later pleadings, independent contractors. Program employees, or project employees, are different from
independent contractors because in the case of the latter, no employer-employee relationship exists.

Petitioner’s reliance on the ruling of this Court in Sonza v. ABS-CBN Broadcasting Corporation43 is misplaced. In that case, the Court explained why
Jose Sonza, a well-known television and radio personality, was an independent contractor and not a regular employee:

A. Selection and Engagement of Employee

ABS-CBN engaged SONZA’S services to co-host its television and radio programs because of SONZA’S peculiar skills, talent and celebrity status.
SONZA contends that the "discretion used by respondent in specifically selecting and hiring complainant over other broadcasters of possibly similar
experience and qualification as complainant belies respondent’s claim of independent contractorship."

Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The
specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a
circumstance indicative, but not conclusive, of an independent contractual relationship. If SONZA did not possess such unique skills, talent and
celebrity status, ABS-CBN would not have entered into the Agreement with SONZA but would have hired him through its personnel department
just like any other employee.

In any event, the method of selecting and engaging SONZA does not conclusively determine his status. We must consider all the circumstances of
the relationship, with the control test being the most important element.

B. Payment of Wages

ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC. SONZA asserts that this mode of fee payment shows
that he was an employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits and privileges "which he would not have enjoyed
if he were truly the subject of a valid job contract."

All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA were ABS-CBN’s employee, there
would be no need for the parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th month pay which the law automatically
incorporates into every employer-employee contract. Whatever benefits SONZA enjoyed arose from contract and not because of an employer-
employee relationship.

SONZA’s talent fees, amounting to P317,000 monthly in the second and third year, are so huge and out of the ordinary that they indicate more an
independent contractual relationship rather than an employer-employee relationship. ABS-CBN agreed to pay SONZA such huge talent fees
precisely because of SONZA’S unique skills, talent and celebrity status not possessed by ordinary employees. Obviously, SONZA acting alone
possessed enough bargaining power to demand and receive such huge talent fees for his services. The power to bargain talent fees way above the
salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship.

The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of SONZA as an independent contractor. The parties
expressly agreed on such mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to whom MJMDC would have to turn over any
talent fee accruing under the Agreement.44

In the case at bar, however, the employer-employee relationship between petitioner and respondents has been proven.
First. In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them because they
were merely hired through petitioner’s personnel department just like any ordinary employee.

Second. The so-called "talent fees" of respondents correspond to wages given as a result of an employer-employee relationship. Respondents did
not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship.

Third. Petitioner could always discharge respondents should it find their work unsatisfactory, and respondents are highly dependent on the
petitioner for continued work.

Fourth. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that
respondents are independent contractors.

The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the
employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an
independent contractor.45 The Court will peruse beyond any such agreement to examine the facts that typify the parties’ actual relationship. 46

It follows then that respondents are entitled to the benefits provided for in the existing CBA between petitioner and its rank-and-file employees. As
regular employees, respondents are entitled to the benefits granted to all other regular employees of petitioner under the CBA.47 We quote with
approval the ruling of the appellate court, that the reason why production assistants were excluded from the CBA is precisely because they were
erroneously classified and treated as project employees by petitioner:

x x x The award in favor of private respondents of the benefits accorded to rank-and-file employees of ABS-CBN under the 1996-1999 CBA is a
necessary consequence of public respondent’s ruling that private respondents as production assistants of petitioner are regular employees. The
monetary award is not considered as claims involving the interpretation or implementation of the collective bargaining agreement. The reason why
production assistants were excluded from the said agreement is precisely because they were classified and treated as project employees by
petitioner.

As earlier stated, it is not the will or word of the employer which determines the nature of employment of an employee but the nature of the
activities performed by such employee in relation to the particular business or trade of the employer. Considering that We have clearly found that
private respondents are regular employees of petitioner, their exclusion from the said CBA on the misplaced belief of the parties to the said
agreement that they are project employees, is therefore not proper. Finding said private respondents as regular employees and not as mere
project employees, they must be accorded the benefits due under the said Collective Bargaining Agreement.

A collective bargaining agreement is a contract entered into by the union representing the employees and the employer. However, even the non-
member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid reason
would constitute undue discrimination against non-members. A collective bargaining agreement is binding on all employees of the company.
Therefore, whatever benefits are given to the other employees of ABS-CBN must likewise be accorded to private respondents who were regular
employees of petitioner.48

Besides, only talent-artists were excluded from the CBA and not production assistants who are regular employees of the respondents. Moreover,
under Article 1702 of the New Civil Code: "In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and
decent living of the laborer."

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 76582 are AFFIRMED. Costs against petitioner.

SO ORDERED.
G.R. No. 78591 March 21, 1989

PURE FOODS CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, REMIGIO CLAVIO, ANDRES CATUBAY, VIRGILIO UMALI, ORLANDO REY and JORGE DEL
ROSARIO, respondents.

Hilario, Go & De la Cruz for petitioner.

The Solicitor General for public respondent.

Teofilo C. Villarico for private respondents.

REGALADO, J.:

Petitioner corporation seeks, in this special civil action for certiorari, the annulment of the following:

(1) Decision 1 of the respondent National Labor Relations Commission in Case No. NCR-4-1947-81, promulgated on March 23, 1987, which modified
the decision of the labor arbiter by ordering petitioner to reinstate private respondents Virgilio Umali, Jorge del Rosario, Orlando Rey and Andres
Catubay to their former positions without loss of seniority rights and to pay their backwages equivalent to three years each without qualifications
and deductions, 2 and its resolution of May 20, 1987 denying petitioner's motion for reconsideration: and

(2) Decision of the labor arbiter, Raymundo R. Valenzuela, in NLRC-NCR Case No. 11-5333-83-A, dated May 16, 1986, insofar as it ordered the
reinstatement of private respondent Remigio Clavio and the payment of his backwages of one and a half years. 3

The facts as stated in the Comment of the Solicitor General and which appear to be supported by the records are as follows: 4

Private respondents Remigio Clavio, Andres Catubay, Virgilio Umali, Orlando Rey and Jorge del Rosario were employees of petitioner Pure Foods
Corporation.

Petitioner hired private respondents Clavio and Catubay as drivers, starting 1979 and 1976, respectively; Umali as utility man, starting 1978; Rey as
delivery man, starting 1973; and Del Rosario as checker, starting 1978. Despite their specific appointments, there were times when respondents
Umali and Del Rosario were required by their superiors to perform the duties of a dispatcher.

As drivers, the only duties of Clavio and Catubay were to drive and take care of the trucks assigned to them, such as making minor repairs or fixing
tires. During the dispatching of goods from the packaging section, as drivers, they were not allowed to hang around or wait in the area, but they
had to go elsewhere leaving their trucks behind. During deliveries, they had no knowledge where their goods would ultimately go and, upon
reaching their routes, they would park the trucks in certain areas where they would wait and keep watch that nobody got the products inside the
trucks other than the delivery man.

As delivery man, the duties of respondent Rey required him to get the original of the invoices from the table of his supervisor and give the same to
the checker, a lady guard. Before loading the goods on the delivery truck for delivery, he had to detach the duplicates and triplicates of the invoices
attached to the sealed boxes and baskets which were to be loaded on the truck. Thereafter, the checker would also count the same boxes and
baskets and, after checking, sign the blue copy of the invoice and give the same to respondent Rey who, after closing the delivery truck, had to
bring all the invoices to the clerk in the office. The clerk, in turn, computed the total load of the delivery truck on the delivery remittance report
(DRR). After such computation, respondent Rey would bring the report to the supervisor for signature and, thereafter, the driver brings the delivery
truck to the Toledo weighing ramp. Whenever the said weighing ramp registers an overweight or underweight, the checker inventories the load of
the delivery truck. After the discrepancy is remedied or when there is no discrepancy in the total load listed in the DRR and the weight registered in
the weighing ramp, respondent Rey and the driver would proceed to deliver the goods to the customers. In the course thereof, this respondent
also collected payment from the customers. Should he discover that there are extra goods in the package, he returns the same to petitioner's plant.

When assigned as dispatchers, respondents Umali and Del Rosario had to segregate by order per route the sealed carton boxes, coming from the
packing section of the production department, which contain packed products like hotdogs. In making such segregation, they had to get the
topmost carton. They were not at liberty to open these sealed boxes unless the order is less than six (6) packages.

During the first shift of duty on March 17, 1981, respondents Umali and Del Rosario were assigned by their superiors as dispatchers. There were
ten (10) other employees who were assigned as dispatchers in the area during that time.

When respondent Catubay, who was assigned to the first shift, reported for work on March 17, 1981 at around 5:00 o'clock in the morning, he saw
a truck at the ramp being loaded with products by one Donato Monteroso. After it was loaded, he was assigned to drive the said truck and they
proceeded to the abattoir to load fresh meat. From the abattoir, he noticed that his right rear tire was deflated, so be proceeded to the motor pool
to inflate it, dropping Donato Monteroso, the delivery man, at the billing office. Thereafter, he fetched said Monteroso and they proceeded to the
Toledo scale for weighing, from where they were allowed to go out for delivery.

On the same date during the first shift, respondent Rey reported for work at 3:41 o'clock in the morning. At 5:00 A.M., after the truck was weighed,
he loaded the same with sealed boxes coming from the packing section with the help of casual laborers. After the loading, he proceeded to the
billing section while the delivery truck was parked at the delivery parking area. After the receipts were finished at the billing section, he returned to
the truck and saw that the driver, respondent Clavio, was already at the driver's seat.

Respondent Clavio had reported for work at 3:41 A.M. on March 17, 1981. Then he inquired from his supervisor, Antonio Manuel, for his truck
assignment, he was told of the possible trucks that may be assigned to him if the corresponding driver would not be available. He knew of his
definite truck assignment only after the receipts at the billing section were finished.

From the delivery parking area, respondents Rey and Clavio brought the truck directly to the Toledo scale for weighing. Clavio knew that there was
an overweight of 20 kilos when he was told by Rey to go down the scale for inventory of their cargoes. They helped the guards unload the cargoes
of the delivery truck.

Of all the employees involved from the packaging to the delivery of the goods, only private respondents were indefinitely suspended for alleged
pilferage as early as March 18, 1981, immediately after the aforesaid incident and without prior investigation. Thereafter, their suspension was
continued until their dismissal without any notice to them or clearance from the then Ministry of Labor and Employment.

The aforesaid Comment 5 further establishes that on April 2, 1982, private respondents filed a complaint for illegal dismissal and unpaid wages
against petitioner.

On May 13, 1983, an order was issued by Director Severo M. Pucan directing petitioner to reinstate private respondents to their former position
with full backwages from the date of their dismissal until actual reinstatement, and to pay said complainants their unpaid wages prior to their
dismissal.

Petitioner appealed the order to the Office of the then Minister, Ministry of Labor and Employment. Acting on said appeal, former Deputy Minister
Vicente Leogardo, Jr. issued an order setting aside the aforesaid order of Director Pucan and indorsing the complaint to the NLRC-NCR-Arbitration
Branch for compulsory arbitration as the nature of the case was not suited for summary proceeding, the issues involved being evidentiary in nature
which could be threshed out in a formal hearing.

The case was assigned to Labor Arbiter Raymundo R. Valenzuela who conducted several hearings. The labor arbiter rendered a decision 6 on May
16, 1986, the Dispositive portion of which reads:

WHEREFORE, finding that except for Remigio Clavio, the dismissal of the other complainants to be justified, their complaint
impugning the same should be, as it is hereby DISMISSED. However, for failure to furnish them with a clearance application for
their termination as well as the belated filing of the same with MOLE, respondent Pure Foods Corporation, should, (sic) as it is
hereby, ordered to pay Virgilio Umali, Jorge del Rosario, Orlando Rey and Andres Catubay their separation pay of one-half (In)
month pay for every year of service (sic) their respective services and to reinstate Remigio Clavio to his former position with
one and half (sic) (1-1/2) years of backwages.

Both parties appealed to the National Labor Relations Commission. On March 23, 1987, public respondent NLRC rendered a decision 7 unanimously
holding for the private respondents, to wit:

WHEREFORE, premises considered the Decision appealed from is, as it is hereby modified as aforediscussed. Consequently,
respondent is hereby ordered to reinstate VIRGILIO UMALI, JORGE DEL ROSARIO, ORLANDO REY and ANDRES CATUBAY to their
former positions without loss of seniority rights and to pay their backwages equivalent to three (3) years each without
qualifications and deductions. Further, respondent is directed to show proof of immediate compliance to the mandate of this
Decision after ten (10) days from receipt thereof.

As pointed out by public respondent, 8 based on its records the aforesaid decision was received on April 15, 1987 by the respective counsels of
both parties. It became final without any motion for reconsideration or any other remedy having been filed or taken by petitioner.

On April 28, 1987, private respondents moved for the issuance of a writ of execution with a copy of the motion furnished counsel for petitioner on
the same date.

On April 30, 1987, petitioner opposed the above motion, filing at the same time its motion for reconsideration. On May 18, 1987, public
respondent issued a resolution denying petitioner's motion for reconsideration for having been filed out of time and for lack of merit.

Thus has spawned the present petition.

Petitioner contends that respondent commission committed a grave abuse of discretion in totally reversing the findings of facts of the labor arbiter.

On the other hand, respondents pre-emptively contend that the questioned decision of the public respondent has long become final and
executory, for failure of petitioner to file its motion for reconsideration within the 10-day reglementary period, hence the same is no longer legally
susceptible of any amendment, alteration and/or modification. Respondents consequently pray for the dismissal of this special civil action
for certiorari.

We find merit in respondent's contentions.

Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, formerly granted, under Article 223 thereof, an aggrieved party
the remedy of appeal from a decision of the National Labor Relations Commission to the Secretary of Labor. Presidential Decree No. 1391,
however, amended said Article 223 and abolished appeals to the Secretary of Labor.

But, the losing party is not without recourse. Under the New Rules of the National Labor Relations Commission, a party is allowed to file a motion
for reconsideration of any order, resolution or decision of the commission based on palpable or patent errors, provided that the motion is under
oath and filed within ten (10) calendar days from receipt of the order, resolution or decision. 9 In addition, the party may also seasonably avail of
the special civil action for certiorari, where the tribunal, board or officer exercising judicial functions has acted without or in excess of its
jurisdiction, or with grave abuse of discretion, and praying that judgment be rendered annulling or modifying the proceedings, as the law requires,
of such tribunal, board or officer. 10

In the case at bar, a motion for reconsideration was belatedly filed by petitioner by reason of which the motion was denied by public respondent.
In a futile attempt to elide and gloss over an obvious mistake or fatal omission, petitioner then filed this special civil action for certiorari by
imputing to public respondent a supposed grave abuse of discretion in reversing the findings of facts of the labor arbiter.

This procedural maneuver is fatally flawed and unavailing on both counts. The unquestioned rule in this jurisdiction is that certiorari will lie only if
there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law against the acts of respondent. In the present
case, the plain and adequate remedy expressly provided by law was a motion for reconsideration of the assailed decision and the resolution
thereof, which was not only expected to be but would actually have provided adequate and more speedy remedy than the present petition
for certiorari. 11 This remedy was actually sought to be availed of by petitioner when it filed a motion for reconsideration albeit beyond the 10-day
reglementary period. For all intents and purposes, petitioner cannot now be heard to say that there was no plain, speedy and adequate remedy
available to it and that it must, therefore, be allowed to seek relief by certiorari. This contention is not only untenable but would even place a
premium on a party's negligence or indifference in availing of procedural remedies afforded by law.

The filing of such a motion is intended to afford public respondent an opportunity to correct any actual or fancied error attributed to it by way of a
re-examination of the legal and factual aspects of the case. Petitioner's inaction or negligence under the circumstances is tantamount to a
deprivation of the right and opportunity of the respondent commission to cleanse itself of an error unwittingly committed or to vindicate itself of
an act unfairly imputed. An improvident resort to certiorari cannot be used as a tool to circumvent the right of public respondent to review and
purge its decision of an oversight, if any. Neither should this special civil action be resorted to as a shield from the adverse consequences of
petitioner's own negligence or error in the choice of remedies. Having allowed the decision to become final and executory, petitioner cannot by an
overdue strategy question the correctness of the decision of the respondent commission when a timely motion for reconsideration was the legal
remedy indicated.

Petitioner further argues that public respondent committed a grave abuse of discretion in reversing the findings of facts of the labor arbiter.
Assuming ex gratia argumenti that this is true, its petition can neither prosper nor subserve its purpose.

In asserting that there was grave abuse of discretion, petitioner adverts to alleged variances in the factual findings of the labor arbiter and the
respondent commission. This is inapt and erroneous. Firstly, errors of judgment, as distinguished from errors of jurisdiction, are not within the
province of a special civil action for certiorari. Secondly, a careful perusal of the records of this case readily reveals that if there is any error by
public respondent in its analysis of the facts and its evaluation of the evidence, it is not of such a degree as may be stigmatized as a grave abuse of
discretion. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, 12 and
it must be shown that the discretion was exercised arbitrarily or despotically. 13 For certiorari to lie, there must be a capricious, arbitrary and
whimsical exercise of power, the very antithesis of the judicial prerogative in accordance with certuries of both civil law and common law
traditions. 14

It is settled to the point of being elementary that the only question involved in certiorari is jurisdiction, either the want or excess thereof, and
abuse of discretion warrants the issuance of the extraordinary remedy of certiorari only when the same is so grave, as when the power is exercised
in an arbitrary or despotic manner by reason of passion, prejudice or personal hostility, and it must be so patent and so gross as to amount to an
evasion of positive duty, or to a virtual refusal to perform a duty enjoined, or to act at all, in contemplation of law, 15 as to be equivalent to having
acted without jurisdiction.

It is, therefore, incumbent upon petitioner to adduce a sufficiently strong demonstration that the respondent commission acted whimsically in
total disregard of evidence material to and even decisive of the controversy, before certiorari will lie. In this, petitioner has failed.
It must emphatically be reiterated, since so often is it overlooked, that the special civil action for certiorari is a remedy designed for the correction
of errors of jurisdiction and not errors of judgment. 16 The reason for the rule is simple. When a court exercises its jurisdiction, an error committed
while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. If it did, every error committed by a court
would deprive it of its jurisdiction and every erroneous judgment would be a void judgment. This cannot be allowed. The administration of justice
would not survive such a rule. Consequently, an error of judgment that the court may commit in the exercise of its jurisdiction is not correctible
through the original civil action of certiorari. 17

At any rate, in rejecting the decision of the labor arbiter and in finding that there was no pilferage committed, respondent commission held that:

After a painstaking scrutiny and diligent review of the record of the instant case giving due consideration to the points raised by
the complainants in relation to the supporting documents submitted and relied upon by the respondent, it is Our considered
view that the Labor Arbiter below was careless, short of being remiss in his duty, for his failure to analyze and appreciate the
import of the evidence on record specially so that in the resolution of the issue of whether complainants are guilty of the
charge of pilferage or not hinges on mere affidavits of the Security guards as well as the Lady Security guard-checkers. ... 18

Respondent commission noted serious discrepancies in the affidavits of the witnesses presented by herein petitioner, 19 to wit:

Lorna Manriquez a lady guard, alleged that the truck with Plate No. 757 of respondent Andres Catubay was stopped at the gate and found with an
excess of 12 bags of hotdogs; whereas, Crispulo Migano another guard, alleged that the truck with Plate No. 757 was parked at the motor pool;
while Capt. Gonzales, of the security detachment, stated that the truck driven by respondent Catubay had left the company premises.

The two lady security guard-checkers, Lorna Manriquez and Fe Somera, and security guard Crispulo Magano stated in their affidavits that upon
discovering the suspicious activities of herein private respondents, they reported the matter to the security detachment. Respondent commission's
factual finding is that their reporting to the security detachment was orchestrated. It is noteworthy that the affidavits of said lady security guard-
checkers are identical in their allegations regarding the incident except as to the names of those involved, their places of assignment, and truck
plate numbers.

Security guard Crispulo Magano stated that he saw several persons bringing down a package at the motor pool, whereas the investigation
conducted by the security detachment revealed that respondent Catubay was the only person went to the motor pool.

As pointedly commented by the Solicitor General, "to sustain the petitioner would lead the court to speculate on the possibilities of the
commission of pilferage by private respondents as a ground for their dismissal. There is no clear, positive and convincing evidence to point that
private respondents were guilty as charged." 20

The foregoing considerations convince Us that the decision and resolution complained of should not be disturbed.

WHEREFORE, the petition for certiorari is DISMISSED. The decision of Labor Arbiter Raymundo R. Valenzuela, dated May 16, 1986, insofar as it
orders the reinstatement of private respondent Remigio Clavio and the payment of his backwages of one and a half years is AFFIRMED. The
decision of respondent National Labor Relations Commission of March 23, 1987 and its resolution of May 20, 1987 are likewise AFFIRMED.

Should the reinstatement of the private respondents to their previous or substantially equivalent positions without loss of seniority rights as herein
ordered be rendered impossible by the supervention of circumstances which prevent the same, the petitioner is further ordered to pay private
respondents separation pay equivalent to one (1) month's salary for every year of service rendered by them to petitioner, computed at the rate of
their respective salaries on March 18, 1981.

SO ORDERED.

G.R. No. 170351 March 30, 2011

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, Petitioner,

vs.
PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, Respondent.
DECISION

NACHURA, J.:

Under review is the Decision1 dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 65760, which dismissed the petition for certiorari
filed by petitioner Leyte Geothermal Power Progressive Employees Union – ALU―TUCP (petitioner Union) to annul and set aside the
decision2 dated December 10, 1999 of the National Labor Relations Commission (NLRC) in NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

[Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and controlled
corporation engaged in exploration, development, utilization, generation and distribution of energy resources like geothermal energy.

Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE) Regional Office No. VIII,
Tacloban City.

Among [respondent’s] geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in
Leyte. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which
provide the power and electricity needed not only in the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the
island of Luzon as well. Thus, the [respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was
only good up to the completion or termination of the project and would automatically expire upon the completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that
circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a
CBA negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when the project was about to
be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the
petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported commission by the
latter of unfair labor practice for "refusal to bargain collectively, union busting and mass termination." On the same day, the petitioner declared a
strike and staged such strike.

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying
the labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12)
hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment prior to the
strike. Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation.

However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner remained
adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect, the petitioner did not
abide by [the] assumption order issued by the Secretary of Labor.

Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the
NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition for Cancellation of Petitioner’s Certificate of Registration with DOLE, Regional
Office No. VIII. The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as
NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to the NLRC
4th Division in Cebu City on June 21, 1999 for the proper disposition thereof.3

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows:

1. Declaring the officers and members of [petitioner] Union as project employees;

2. Declaring the termination of their employment by reason of the completion of the project, or a phase or portion thereof, to which they
were assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union through its officers and members on December 28, 1998 to January 6,
1999 as illegal for failure to comply with the mandatory requirements of the law on strike[;]
 4. Declaring all the officers and members of the board of [petitioner] Union who instigated and spearheaded the illegal strike to have lost
their employment[;]

5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice for lack of merit[;]

6. Dismissing both parties’ claims against each other for violation of the Assumption Order dated January 4, 1999 for lack of factual
basis[;]

7. Dismissing all other claims for lack of merit.4

Petitioner Union filed a motion for reconsideration of the NLRC decision, which was subsequently denied. Posthaste, petitioner Union filed a
petition for certiorari before the CA, alleging grave abuse of discretion in the decision of the NLRC. As previously adverted to, the CA dismissed the
petition for certiorari, thus:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the Petition. The assailed Decision dated
December 10, 1999 of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99) and
its Order dated March 30, 2001 are hereby AFFIRMED.

Costs against the Petitioner.5

Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of law:

1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT ARE DESIGNED TO DENY AND DEPRIVE THE EMPLOYEES’
THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT EMPLOYEES?

2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES’ CONTRACT, SUCH THAT THE SO-CALLED UNDERTAKING WAS CONTINUOUS, ARE THE
EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES?

3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRM’S OWN ESTIMATE OF JOB COMPLETION, PROVING THAT THERE IS STILL 56.25%
CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED FOR COMPLETION [OF] THE "PROJECT?"

4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO DISMISS EN MASSE THE EMPLOYEES WHO HAVE ORGANIZED
AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS?

5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY TO ITS CONCEPTUAL DEFINITION
UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE UNION, IS THIS UNION BUSTING? 6

Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of respondent; and

2. Whether the officers and members of petitioner Union engaged in an illegal strike.

On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and desirable to
respondent’s usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the Construction Department of
respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually necessary and desirable to the department.
Petitioner Union likewise points out that there was no interval in the employment contract of its officers and members, who were all employees of
respondent, which lack of interval, for petitioner Union, "manifests that the ‘undertaking’ is usually necessary and desirable to the usual trade or
business of the employer."

We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:

ART. 280. Regular and Casual Employment.— The provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or
service 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 actually exists. 7

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer"; (b) project employees or those "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"; (c) seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of
the season;8 and (d) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind— a fixed-
term employee.9

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any contract
expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the
policy enshrined in the Constitution to "afford full protection to labor."10 Thus, labor contracts are placed on a higher plane than ordinary contracts;
these are imbued with public interest and therefore subject to the police power of the State.11

However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or undertaking
remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not
expect to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual
services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for
bestowing special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in
favor of only one party thereto. The employer’s interest is equally important as that of the employee[s’] for theirs is the interest that propels
economic activity. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding
consideration, such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment
contract. After all, under the law, the interest of the worker is paramount.12

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific
project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue:

A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the [employment contracts] freely
and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or undue influence when they entered, perfected
and consummated [the employment] contracts. In fact, it was clearly established in the course of the trial of this case, as explained by no less than
the President of [petitioner] Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them. x x x.

xxxx

As clearly shown by [petitioner] Union’s own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts
tending to vitiate the worker[s’] consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. x x
x.13

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in
matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by
substantial evidence.14 Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases. 15 We may take cognizance of
and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the
CA.16

In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were project
employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was usually necessary or
desirable to the usual business or trade of the Construction Department of respondent.

The landmark case of ALU-TUCP v. NLRC17 instructs on the two (2) categories of project employees:
It is evidently important to become clear about the meaning and scope of the term "project" in the present context. The "project" for the carrying
out of which "project employees" are hired would ordinarily have some relationship to the usual business of the employer. Exceptionally, the
"project" undertaking might not have an ordinary or normal relationship to the usual business of the employer. In this latter case, the
determination of the scope and parameters of the "project" becomes fairly easy. x x x. From the viewpoint, however, of the legal characterization
problem here presented to the Court, there should be no difficulty in designating the employees who are retained or hired for the purpose of
undertaking fish culture or the production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as
the duration and scope of the project were determined or specified at the time of engagement of the "project employees." For, as is evident from
the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether particular employees are properly
characterized as "project employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry
out a "specific project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project.

In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2) distinguishable types of activities.
Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times. The typical example of this first type of project is a particular construction job or project of a construction
company. A construction company ordinarily carries out two or more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel in
Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of
one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of
employment, are properly treated as "project employees," and their services may be lawfully terminated at completion of the project.

The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a
job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or
undertaking also begins and ends at determined or determinable times.18

Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific
undertaking which completion or termination has been determined at the time of the particular employee’s engagement.

In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project employees for
respondent’s Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the
completion of the project or substantial phase thereof, the officers and the members of petitioner Union could be validly terminated.

Petitioner Union is adamant, however, that the lack of interval in the employment contracts of its officer and members negates the latter’s status

as mere project employees. For petitioner Union, the lack of interval further drives home its point that its officers and members are regular
employees who performed work which was usually necessary or desirable to the usual business or trade of respondent.

We are not persuaded.

Petitioner Union’s members’ employment for more than a year does equate to their regular employment with respondent. In this regard, Mercado,
Sr. v. NLRC19 illuminates:

The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It states that, regardless of any written
or oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual business or
trade of the employer, except for project employees.

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

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under the definition of the preceding
paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who have rendered at least one year of
service regardless of the fact that such service may be continuous or broken.

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.

The 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. 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. 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.
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.

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 [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.

Considering our holding that the officers and the members of petitioner Union were project employees, its claim of union busting is likewise
dismissed.

On the second issue, petitioner Union contends that there was no stoppage of work; hence, they did not strike. Euphemistically, petitioner Union
avers that it "only engaged in picketing,"20 and maintains that "without any work stoppage, [its officers and members] only engaged in xxx protest
activity."

We are not convinced. Petitioner Union splits hairs.

To begin with, quite evident from the records is the undisputed fact that petitioner Union filed a Notice of Strike on December 28, 1998 with the
Department of Labor and Employment, grounded on respondent’s purported

unfair labor practices, i.e., "refusal to bargain collectively, union busting and mass termination." On even date, petitioner Union declared and
staged a strike.

Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-Work Order21 dated January 4, 1999, certifying the
labor dispute to the NLRC for compulsory arbitration. The Order narrates the facts leading to the labor dispute, to wit:

On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing unfair labor practices, specifically: refusal to bargain
collectively, union busting and mass termination as the grounds [therefor]. On the same day, [petitioner] Union went on strike and took control
over [respondent’s] facilities of its Leyte Geothermal Project.

Attempts by the National Conciliation and Mediation Board –RBVIII to forge a mutually acceptable solution proved futile.

In the meantime, the strike continues with no settlement in sight placing in jeopardy the supply of much needed power supply in the Luzon and
Visayas grids.

xxxx

The on-going strike threatens the availability of continuous electricity to these areas which is critical to day-to-day life, industry, commerce and
trade. Without doubt, [respondent’s] operations [are] indispensable to the national interest and falls (sic) within the purview of Article 263 (g) of
the Labor Code, as amended, which warrants (sic) the intervention of this Office.

Third, petitioner Union itself, in its pleadings, used the word "strike."

Ultimately, petitioner Union’s asseverations are belied by the factual findings of the NLRC, as affirmed by the CA:

The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record. Hence, it is undisputed
that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day strike ban after the submission of the strike
vote was not complied with since there was no strike vote taken.

xxxx

The factual issue of whether a notice of strike was timely filed by [petitioner] Union was resolved by the evidence on record. The evidence revealed
that [petitioner] Union struck even before it could file the required notice of strike. Once again, this relied on [petitioner] Union’s proof.
[Petitioner] Union[’s] witness said:

Atty. Sinsuat : You stated that you struck on 28 December 1998 is that correct?
Witness : Early in the morning of December 1998.

xxxx

Atty. Sinsuat : And you went there to conduct the strike did you not?

Witness : Our plan then was to strike at noon of December 28 and the strikers will be positioned at their respective areas. 22

Article 263 of the Labor Code enumerates the requisites for holding a strike:

Art. 263. Strikes, picketing, and lockouts. – (a) x x x.

x x x x.

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a
notice of lockout with the Department at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of
notice shall be 15 days and in the absence of a duly certified bargaining agent, the notice of strike may be filed by any legitimate labor
organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with
the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union may take action immediately.

(d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and Employment may
promulgate.

(e) During the cooling-off period, it shall be the duty of the Department to exert all efforts at mediation and conciliation to effect a
voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of
the notice, the labor union may strike or the employer may declare a lockout.

(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned,
obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority
of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting
called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered
when the strike or lockout vote was taken. The Department may, at its own initiative or upon the request of any affected party, supervise
the conduct of the secret balloting. In every case, the union or the employer shall furnish the Department the results of the voting at least
seven days before the intended strike or lockout, subject to the cooling-off period herein provided.

In fine, petitioner Union’s bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that petitioner Union indeed
struck against respondent. In fact, and more importantly, petitioner Union failed to comply with the requirements set by law prior to holding a
strike.1avvphi1

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against petitioner Union.

SO ORDERED.

G.R. No. 116781 September 5, 1997

TOMAS LAO CONSTRUCTION, LVM CONSTRUCTION CORPORATION, THOMAS and JAMES DEVELOPERS (PHIL.), INC., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, MARIO O. LABENDIA, SR., ROBERTO LABENDIA, NARCISO ADAN, FLORENCIO GOMEZ, ERNESTO
BAGATSOLON, SALVADOR BABON, PATERNO BISNAR, CIRPRIANO BERNALES, ANGEL MABUHAY, SR., LEO SURIGAO, and ROQUE
MORILLO, respondents.

BELLOSILLO, J.:

From October to December 1990 private respondents individually filed complaints for illegal dismissal against petitioners with the National Labor
Relations Commission Regional Arbitration Branch No. VIII (NLRC — RAB VIII), Tacloban City. Alleging that they were hired for various periods as
construction workers in different capacities they described their contractual terms as follows: (a) Roberto Labendia, general construction foreman,
from 1971 to 17 October 1990 at P3,700/month; (b) Narciso Adan, tireman, from October 1981 to November 1990 at P75.00/day; (c) Florencio
Gomez, welder, from July 1983 to July 1990 at P260.00/day; (d) Ernesto Bagatsolon leadman/checker, from June 1982 to October 1990 at
P2,800/month; (e) Salvador Babon, clerk/timekeeper/paymaster, from June 1982 to October 1990 at P3,200/month; (f) Paterno Bisnar, road grader
operator, from January 1979 to October 1990 at 105/day; (g) Cipriano Bernales, instrument man, from February 1980 to November 1990 at
P3,200/month; (h) Angel Mabulay, Sr., dump truck driver, from August 1974 to October 1990 at P90/day; (I) Leo Surigao, payloader operator, from
March 1975 to January 1978 at P100/day; (J) Mario Labendia, Sr. surveyor/foreman, from August 1971 to July 1990 at P2,900/month; and, (k)
Roque Morillo, company watchman, from August 1983 to October 1990 at P3,200/month.1

Within the periods of their respective employments, they alternately worked for petitioners Tomas Lao Corporation (TLC), Thomas and James
Developers (T&J) and LVM Construction Corporation (LVM), altogether informally referred to as the "Lao Group of Companies," the three (3)
entities comprising a business conglomerate exclusively controlled and managed by members of the Lao family.

TLC, T&J and LVM are engaged in the construction of public roads and bridges. Under joint venture agreements they entered into among each
other, they would undertake their projects either simultaneously or successively so that, whenever necessary, they would lease tools and
equipment to one another. Each one would also allow the utilization of their employees by the other two (2). With this arrangement, workers were
transferred whenever necessary to on-going projects of the same company or of the others, or were rehired after the completion of the project or
project phase to which they were assigned. Soon after, however, TLC ceased its operations2 while T&J and LVM stayed on.

Sometime in 1989 Andres Lao, Managing Director of LVM and President of T&J,3 issued a memorandum4 requiring all workers and company
personnel to sign employment contract forms and clearances which were issued on 1 July 1989 but antedated 10 January 1989. These were to be
used allegedly for audit purposes pursuant to a joint venture agreement between LVM and T&J. To ensure compliance with the directive, the
company ordered the withholding of the salary of any employee who refused to sign. Quite notably, the contracts expressly described the
construction workers as project employees whose employments were for a definite period, i.e., upon the expiration of the contract period or the
completion of the project for which the workers was hired.

Except for Florencio Gomez5 all private respondents refused to sign contending that this scheme was designed by their employer to downgrade
their status from regular employees to mere project employees. Resultantly, their salaries were withheld. They were also required to explain why
their services should not be terminated for violating company rules and warned that failure to satisfactorily explain would be construed as
"disinterest" in continued employment with the company. Since the workers stood firm in their refusal to comply with the directives their services
were terminated.

NLRC RAB VIII dismissed the complaints lodged before it, finding that private respondents were project employees whose employments could be
terminated upon completion of the projects or project phase for which they were hired. It upheld petitioners' contention that the execution of
their employment contracts was to forestall the eventuality of being compelled to pay the workers their salaries even if there was no more work to
be done due to the completion of the projects or project phases. The labor court however granted each employee a separation pay of P6,435.00
computed at one-half (1/2) month salary for every year of service, uniformly rounded at five (5) years.6

The decision of Labor Arbiter Gabino A. Velasquez, Jr., was reversed on appeal by the Fourth Division of the National Labor Relations Commission
(NLRC) of Cebu City which found that private respondents were regular employees who were dismissed without just cause and denied due process.
The NLRC also overruled the fixing by the Labor Arbiter of the term of employment of complainants uniformly at five (5) years since the periods of
employment of the construction workers as alleged in their complaints were never refuted by petitioners. In granting monetary awards to
complainants, NLRC disregarded the veil of corporate fiction and treated the three (3) corporations as forming only one entity on the basis of the
admission of petitioners that "the three (3) operated as one (1), intermingling and commingling all its resources, including manpower facility."7

Petitioners now lay their cause before us and assign the following errors: (a) NLRC erred in classifying the employees as regular instead of project
employees; (b) assuming that the workers were regular employees, NLRC failed to consider that they were terminated for cause; (c) assuming
further that the employees were illegally dismissed, NLRC erred in awarding back wages in excess of three (3) years; and, (d) assuming finally that
the decision is correct, NLRC erred when it pierced the veil of corporate personality of petitioner-corporations.

The main thrust of petitioners' expostulation is that respondents have no valid cause to complain about their employment contracts since these
documents merely formalized their status as project employees. They cite Policy Instruction No. 20 of the Department of Labor which defines
project employees as those employed in connection with a particular construction project, adding that the ruling in Sandoval Shipyards,
Inc. v. NLRC8 applies squarely to the instant case because there the Court declared that the employment of project employees is co-terminous with
the completion of the project regardless of the number of projects in which they have worked. And as their employment is one for a definite
period, they are not entitled to separation pay nor is their employer required to obtain clearance from the Secretary of Labor in connection with
their termination. Petitioners thus argue that their dismissal from the service of private respondents was legal since the projects for which they
were hired had already been completed. As additional ground, they claim that Mario Labendia and Roberto Labendia had absented themselves
without leave giving management no choice but to sever their employment.

We are not convinced. The principal test in determining whether particular employees are "project employees" distinguished from "regular
employees" is whether the "project employees" are assigned to carry out "specific project or undertaking," the duration (and scope) of which are
specified at the time the employees are engaged for the project. "Project" in the realm of business and industry refers to a particular job or
undertaking that is within the regular or usual business of employer, but which is distinct and separate and identifiable as such from the
undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. 9

While it may be allowed that in the instant case the workers were initially hired for specific projects or undertakings of the company and hence can
be classified as project employees, the repeated re-hiring and the continuing need for their services over a long span of time (the shortest, at seven
[7] years) have undeniably made them regular employees. Thus, we held that where the employment of project employees is extended long after
the supposed project has been finished, the employees are removed from the scope of project employees and considered regular employees. 10

While length of time may not be a controlling test for project employment, it can be a strong factor in determining whether the employee was
hired for a specific undertaking or in fact tasked to perform functions which are vital, necessary and indispensable to the usual business or trade of
the employer. In the case at bar, private respondents had already gone through the status of project employees. But their employments became
non-coterminous with specific projects when they started to be continuously re-hired due to the demands of petitioners' business and were re-
engaged for many more projects without interruption. We note petitioners' own admission —

[t]hese construction projects have been prosecuted by either of the three petitioners, either individually or in a joint venture with one
another. Likewise, these construction projects have been prosecuted by either of the three petitioners, either simultaneously, one
construction project overlapping another and/or one project commencing immediately after another project has been completed or
terminated. Perhaps because of their capacity to prosecute government projects and their good record and performance, at least one of
the three petitioners had an on-going construction project and/or one of the three petitioners' construction project overlapped that of
another.11

The denial by petitioners of the existence of a work pool in the company because their projects were not continuous is amply belied by petitioners
themselves who admit that —

All the employees of either of the three petitioners were actually assigned to a particular project to remain in said project until the
completion or termination of that project. However, after the completion of that particular project or when their services are no longer
needed in the project or particular phase of the project where they were assigned, they were transferred and rehired in another on-going
project.12

A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in
the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal
workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial
to both the employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital" and at the same time enables
the workers to attain the status of regular employees. Clearly, the continuous rehiring of the same set of employees within the framework of the
Lao Group of Companies is strongly indicative that private respondents were an integral part of a work pool from which petitioners drew its
workers for its various projects.

In a final attempt to convince the Court that private respondents were indeed project employees, petitioners point out that the workers were not
regularly maintained in the payroll and were free to offer their services to other companies when there were no on-going projects. This argument
however cannot defeat the workers' status of regularity. We apply by analogy the case of Industrial-Commercial-Agricultural Workers Organization
v. CIR13 which deals with regular seasonal employees. There we held —

That during the temporary layoff the laborers are free to seek other employment is natural, since the laborers are not being paid, yet
must find means of support. A period during which the Central is forced to suspend or cease operation for a time . . . should not mean
starvation for employees and their families (emphasis supplied).

Truly, the cessation of construction activities at the end of every project is a foreseeable suspension of work. Of course, no compensation can be
demanded from the employer because the stoppage of operations at the end of a project and before the start of a new one is regular and expected
by both parties to the labor relations. Similar to the case of regular seasonal employees, the employment relation is not severed by merely being
suspended.14 The employees are, strictly speaking, not separated from services but merely on leave of absence without pay until they are
reemployed.15 Thus we cannot affirm the argument that non-payment of salary or non-inclusion in the payroll and the opportunity to seek other
employment denote project employment.
Contrary to petitioners' assertion, our ruling in Sandoval Shipyards is inapplicable considering the special circumstances attendant to the present
case. In Sandoval, the hiring of construction workers, unlike in the instant case, was intermittent and not continuous for the "shipyard merely
accepts contracts for shipbuilding or for repair of vessels from third parties and, only on occasions when it has work contract of this nature that it
hires workers to do the job which, needless to say, lasts only for less than a year or longer."16

Moreover, if private respondents were indeed employed as "project employees," petitioners should have submitted a report of termination to the
nearest public employment office every time their employment was terminated due to completion of each construction project. 17 The records
show that they did not. Policy Instruction No. 20 is explicit that employers of project employees are exempted from the clearance requirement but
not from the submission of termination report. We have consistently held that failure of the employer to file termination reports after every
project completion proves that the employees are not project employees. 18 Nowhere in the New Labor Code is it provided that the reportorial
requirement is dispensed with. The fact is that Department Order No. 19 superseding Policy Instruction No. 20 expressly provides that the report of
termination is one of the indicators of project employment.19

We agree with the NLRC that the execution of the project employment contracts was "farcical." 20 Obviously, the contracts were a scheme of
petitioners to prevent respondents' from being considered as regular employees. It imposed time frames into an otherwise flexible employment
period of private respondents some of whom were employed as far back as 1969. Clearly, here was an attempt to circumvent labor laws on tenurial
security. Settled is the rule that when periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be
struck down as contrary to public morals, good customs or public order.21 Worth noting is that petitioners had engaged in various joint venture
agreements in the past without having to draft project employment contracts. That they would require execution of employment contracts and
waivers at this point, ostensibly to be used for audit purposes, is a suspect excuse, considering that petitioners enforced the directive by
withholding the salary of any employee who spurned the order.

We likewise reject petitioners' justification in re-hiring private respondents i.e., that it is much cheaper and economical to re-hire or re-employ the
same workers than to train a new set of employees. It is precisely because of this cost-saving benefit to the employer that the law deems it fair that
the employees be given a regular status. We need not belabor this point.

The NLRC was correct in finding that the workers were illegally dismissed. The rule is that in effecting a valid dismissal, the mandatory requirements
of substantive and procedural due process must be strictly complied with. These were wanting in the present case. Private respondents were
dismissed allegedly because of insubordination or blatant refusal to comply with a lawful directive of their employer. But willful disobedience of the
employer's lawful orders as a just cause for the dismissal of the employees envisages the concurrence of at least two (2) requisites: (a) the
employee's assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and, (b)
the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to
discharge.22 The refusal of private respondents was willful but not in the sense of plain and perverse insubordination. It was dictated by necessity
and justifiable reasons — for what appeared to be an innocent memorandum was actually a veiled attempt to deny them their rightful status as
regular employees. The workers therefore had no option but to disobey the directive which they deemed unreasonable and unlawful because it
would result in their being downsized to mere project workers. This act of self-preservation should not merit them the extreme penalty of
dismissal.

The allegation of petitioners that private respondents are guilty of abandonment of duty is without merit. The elements of abandonment are: (a)
failure to report for work or absence without valid or justifiable reason, and, (b) a clear intention to sever the employer-employee relationship,
with the second element as the more determinative factor manifested by some overt acts.23 In this case, private respondents Roberto Labendia
and Mario Labendia were forced to leave their respective duties because their salaries were withheld. They could not simply sit idly and allow their
families to starve. They had to seek employment elsewhere, albeit temporarily, in order to survive. On the other hand, it would be the height of
injustice to validate abandonment in this particular case as a ground for dismissal of respondents thereby making petitioners benefit from a gross
and unjust situation which they themselves created. 24 Private respondents did not intend to sever ties with petitioner and permanently abandon
their jobs; otherwise, they would not have filed this complaint for illegal dismissal. 25

Petitioners submit that since private respondents were only project employees, they are not entitled to security of tenure. This is incorrect.
In Archbuild Masters and Construction, Inc. v. NLRC26 we held —

. . . a project employee hired for a specific task also enjoys security of tenure. A termination of his employment must be for a lawful cause
and must be done in a manner which affords him the proper notice and hearing . . . . To allow employers to exercise their prerogative to
terminate a project worker's employment based on gratuitous assertions of project completion would destroy the constitutionally
protected right of labor to security of tenure (emphasis supplied).

The burden of proving that an employee has been lawfully dismissed therefore lies with the employer. In the case at bar, the assertions of
petitioners were self-serving and insufficient to substantiate their claim of proximate project completion. The services of the employees were
terminated not because of contract expiration but as sanction for their refusal to sign the project employment forms and quitclaims.

Finding that the dismissal was without just cause, we find it unnecessary to dwell on the non-observance of procedural due process. Suffice it to
state that private respondents were not priorly notified of their impending dismissal and that they were not provided ample opportunity to defend
themselves.
Petitioners charge as erroneous the grant to private respondents by NLRC of back wages in excess of three (3) years or, in the alternative, to an
award of separation pay if reinstatement is no longer feasible.

We disagree. Since the illegal dismissal was made in 1990 or after the effectivity of the amendatory provision of RA No. 6715 on 21 March 1989,
private respondents' back wages should be computed on the basis of Art. 279 of the Labor Code which states that "(a)n employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, 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."

Conformably with our ruling in Bustamante v. NLRC27 the illegally dismissed employees are entitled to full back wages, undiminished by earnings
derived elsewhere during the period of their illegal dismissal. In the event that reinstatement is no longer feasible, back wages shall be computed
from the time of illegal termination until the time of the finality of the decision.28 The award shall be based on the documents submitted by private
respondents, i.e. affidavits, SSS and Medicare documents, since petitioners failed to adduce competent evidence to the contrary. The separation
pay shall be equivalent to "at least one (1) month salary or to one (1) month salary for every year of service, whichever is higher, a fraction of at
least six (6) months being considered as one whole year."29

Finally, public respondent NLRC did not err in disregarding the veil of separate corporate personality and holding petitioners jointly and severally
liable for private respondents' back wages and separation pay. The records disclose that the three (3) corporations were in fact substantially owned
and controlled by members of the Lao family composed of Lao Hian Beng alias Tomas Lao, Chiu Siok Lian (wife of Tomas Lao), Andrew C. Lao, Lao Y.
Heng, Vicente Lao Chua, Lao E. Tin, Emmanuel Lao and Ismaelita Maluto. A majority of the outstanding shares of stock in LVM and T&J is owned by
the Lao family. T&J is 100% owned by the Laos as reflected in its Articles of Incorporation. The Lao Group of Companies therefore is a closed
corporation where the incorporators and directors belong to a single family. Lao Hian Beng is the same Tomas Lao who owns Tomas Lao
Corporation and is the majority stockholder of T&J. Andrew C. Lao is the Managing Director of LVM Construction, and President and Managing
Director of the Lao Group of Companies. Petitioners are engaged in the same line of business under one management and use the same equipment
including manpower services. Where it appears that [three] business enterprises are owned, conducted and controlled by the same parties, both
law and equity will, when necessary to protect the rights of third persons, disregard the legal fiction that the [three] corporations are distinct
entities, and treat them as identical.30

Consonant with our earlier ruling,31 we hold that the liability of petitioners extends to the responsible officers acting in the interest of the
corporations. In view of the peculiar circumstances of this case, we disregard the separate personalities of the three (3) corporations and at the
same time declare the members of the corporations jointly and severally liable with the corporations for the monetary awards due to private
respondents. It should always be borne in mind that the fiction of law that a corporation as a juridical entity has a distinct and separate personality
was envisaged for convenience and to serve justice; therefore it should not be used as a subterfuge to commit injustice and circumvent labor laws.

WHEREFORE, the petition is DENIED and the decision of the National Labor Relations Commission dated 05 August 1994 is AFFIRMED. Petitioners
are ordered to reinstate private respondents to their former positions without loss of seniority rights and other privileges with full back wages,
inclusive of allowances, computed from the time compensation was withheld up to the time of actual reinstatement. In the event that
reinstatement is no longer feasible, petitioners are directed to pay private respondents separation pay equivalent to one month salary for every
year of service, a fraction of at least six (6) months being considered one (1) year in the computation thereof, and full back wages computed from
the time compensation was withheld until the finality of this decision. All other claims of the parties are DISMISSED for lack of merit. Costs against
petitioners.

SO ORDERED.

G.R. No. L-21465 March 31, 1966

INDUSTRIAL-COMMERCIAL-AGRICULTURAL WORKERS' ORGANIZATION (ICAWO), petitioner-appellant,
vs.
COURT OF INDUSTRIAL RELATIONS, CENTRAL AZUCARERA DE PILAR and/or ANTONIO BELZARENA as Manager, CENTRAL AZUCARERA DE PILAR
ALLIED WORKERS ASSOCIATION (CAPAWA), respondents-appellees.

A. Velez for the petitioner.

Tirol and Tirol for the respondent.

REYES, J.B.L., J.:

Appeal from a decision of the Court of Industrial Relations (Case No.

44-ULP-Iloilo) dismissing charges for unfair labor practice.

On 9 February 1956, the petitioner, Industrial-Commercial-Agricultural Workers' Organization (hereinafter referred to as the "ICAWO"), declared a
strike against the respondent Central Azucarera de Pilar. The strike was amicably settled the following day, and among the provisions of the
"Amicable Settlement" (Exhibit "C") reads:

That the company shall not discriminate against any worker and the same treatment shall be accorded to workers (ICAWO affiliates) who
declared a strike or not. A petition for Certification Election will be filed by the ICAWO in view of the other labor union, CAPAWA, with
whom the company has an existing collective bargaining contract, a union which is considered by the ICAWO as a company union.

The CAPAWA therein referred to is the herein respondent Central Azucarera de Pilar Allied Workers Association and the collective bargaining
contract, likewise therein referred to, entered into in 1955, provided:

The EMPLOYER agrees that in hiring unskilled employees and laborers, the members of the WORKERS ASSOCIATION should be given
preference and the management should notify accordingly the WORKERS ASSOCIATION of any vacancy existing in all Departments. New
employees and laborers hired who are members of the WORKERS ASSOCIATION will be on TEMPORARY STATUS and the EMPLOYER
agrees that before they will be considered regular employees and laborers they have to become members of the CENTRAL AZUCARERA
DE PILAR ALLIED WORKERS' ASSOCIATION within thirty (30) days from the date of employment and if they refuse to affiliate with the said
labor organization within this time they will be immediately dismissed by the EMPLOYER;

Among the strikers were 101 seasonal workers, some of whom have worked as such for the company since pre-war years.

On the opening of the milling season for the year 1956-1957, the respondent company refused to re-admit these 101 seasonal workers of the
ICAWO on the ground that it was precluded by the closed-shop clause in its collective bargaining agreement with the CAPAWA. Thus, on 8 May
1958, the ICAWO filed an unfair labor practice charge against the company. The Court of Industrial Relations, in its decision dated 27 November
1961, ordered the reinstatement, with back wages, of these laborers; but on a motion for reconsideration, the said court, en banc, reversed the
said decision in its resolution dated 13 August 1962.

Not satisfied with the reversal, the ICAWO filed the present petition for certiorari to review the industrial court's resolution.

The arguments gravitate around the status of the seasonal workers, the petitioner contending that they are regular and old employees and, as
such, they should have been re-hired at the start, in the month of October, of each milling season, which usually lasts 5 months. The respondents,
on the other hand, urge that these laborers are new, their employment terminating at the end of each milling season and, therefore, could not be
re-admitted without the company violating the closed-shop agreement with the CAPAWA.1äwphï1.ñët

In an almost identical case, involving practically the same parties, G.R. No. L-17422, 28 February 1962, the Court interpreted the closed shop
agreement, jam quot, as referring "to future or new employees or laborers". This interpretation, however, does not resolve the present issue
because it does not classify the seasonal workers one way or the other. A direct precedent, however, exists in the case of Manila Hotel Company vs.
Court of Industrial Relations, et al., L-18873, 30 September 1963, wherein this Court, alluding to certain employees in the Pines Hotel in Baguio,
stated:

x x x x Their status is that of regular seasonal employees who are called to work from time to time, mostly during summer season. The
nature of their relationship with the hotel is such that during off season they are temporarily laid off but during summer season they are
reemployed, or when their services may be needed. They are not strictly speaking separated from the service but are merely considered
as on leave of absence without pay until they are re-employed. Their employment relationship is never severed but only suspended. As
such, these, employees can be considered as in the regular employment of the hotel.

The respondent company, however, relies upon the case of Hind Sugar Company vs. Court of Industrial Relations, et al., L-13364, 26 July 1960. This
citation cannot be considered authoritative in the present case because the Hind case did not actually rule on the temporary character of the
employment of seasonal workers; instead, it affirmed their reinstatement, which the labor court had ordered under Section 10 of the Industrial
Peace Act as a solution to a strike, without regard to the permanent or seasonal nature of the employment of the strikers. Definitely, the Hind case
did not deal with seasonal employees that had been recalled to work year after year during the milling season, thereby creating a reasonable
expectation of continued employment; and for this reason, the Manila Hotel case (supra) sets a rule more in accord with justice and equity under
the conditions shown by the record now before us.

Our conclusion is that petitioners, even if seasonal workers, were not "new workers" within the scope of the closed shop contract between the
sugar central and the CAPAWA union; hence their discharge was illegal.

In filing the unfair labor practice complaint on 8 May 1958, the petitioner union, under the circumstances, did not incur laches, because there was
no work for these seasonal workers during the off-season, from March to October. Moreover, the seat of the prosecutor's office was in Cebu, not
in Panay, and a certification election had intervened to absorb the attention of the complainants.

For the foregoing reasons, the resolution under review is hereby set aside, and the court of origin is directed to order the reinstatement of the 101
seasonal workers to their former positions in the respondent sugar milling company.

With regard to the petitioners' claim for backpay, this matter should be threshed out in the court below where the parties must be given
opportunity to submit evidence to prove or disprove the employer's good faith as well as the amounts that petitioners have earned or should have
earned during their wrongful lay off, such amounts being deductible from the backpay due to petitioners (National Labor Union vs. Zip Venetian
Blind Co., L-15827, 31 May 1961; Aboitiz & Co. vs. C.I.R., L-8418, 29 Nov. 1962).

Let the records be returned to the Court of Industrial Relations for further proceedings, in consonance with this opinion. So ordered.

Bengzon, C.J., Concepcion, Barrera, Regala, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.
Dizon, J., is on leave.

RESOLUTION

August 23, 1966

REYES, J.B.L., J.:

Respondents Central Azucarera de Pilar and its manager have asked this Court to reconsider and reverse its decision of March 31, 1966. They insist
that the seasonal character of the milling activities of the respondent Central each year necessarily implies that the employment of petitioners
ceases after each milling season.

We do not find this position tenable. The cessation of the Central's milling activities at the end of the season is certainly not permanent or
definitive; it is a foreseeable suspension of work, and both Central and laborers have reason to expect that such activities will be resumed, as they
are in fact resumed, when sugar cane ripe for milling is again available. There is, therefore, merely a temporary cessation of the manufacturing
process due to passing shortage of raw material that by itself alone is not sufficient, in the absence of other justified reasons, to sever the
employment or labor relationship between the parties, since the shortage is not permanent. The proof of this assertion is the undenied fact that
many of the petitioner members of the ICAWO Union have been laboring for the Central, and reengaged for many seasons without interruption.
Nor does the Central interrupt completely its operations in the interval between milling seasons; the office and sales force are maintained,
precisely because operations are to be later resumed.

That during the temporary layoff the laborers are considered free to seek other employment is natural, since the laborers are not being paid yet
must find means of support. A period during which the Central is forced to suspend or cease operation for a time (whether by reason of lack of
cane or by some accident to its machinery) should not mean starvation for the employees and their families. Of course, the stopping of the milling
at the end of each season, and before the next sugar crop is ready, being regular and foreseen by both parties to the labor relation, no
compensation is expected nor demanded during the seasonal layoff.

Neither does the fact that the laborers assent to their medical examination at the beginning of each milling season indicate that a new labor
contract is being entered into, in the absence of stipulation to such effect. Said examination is in the interest not only of the Central but also of the
labor force itself and is a mere precautionary measure.

The seasonal stoppage of work does not, therefore, negate the reasonable expectation of the laborers to be subsequently allowed to resume work
unless there be other justifiable reasons for acting otherwise. We note again that in the Hind case (Hind Sugar Go. vs. C.I.R., L-13364, July 26, 1960)
the pronouncement of the Industrial Court that reemployment of the seasonal laborers was discretionary in the employer was not in issue before
this Court. All that was declared therein was that the Company should not be compelled to pay for work not done as it would be inconsistent with
the C.I.R.'s own pronouncement, the legal correctness of which was not being contested. In Manila Hotel Co. vs. C.I.R., L-18873, September 30,
1963, on the contrary, it was squarely ruled that the employment of the seasonal laborers is not severed, but only suspended, during the seasonal
layoff.
In remanding the case to the Court of Industrial Relations for determination whether the Central acted in good faith and the employees should be
declared entitled to backpay, and the amount due the latter, this Court took into account that these are matters dependent upon circumstances
that the C.I.R. had not previously inquired into, and particularly the requirement of the Industrial Peace Act (Republic Act 875) in its section 5(c),
that where a person is found engaging in any unfair labor practice, the Industrial Court, besides issuing a cease and desist order, must.

take such affirmative action as will effectuate the policies of this Act,

a rule that implies exercise of judgment and discretion by the Industrial Court, based on facts and considerations not now brought to our attention.

Wherefore, the motion for reconsideration is denied.

G.R. No. 193493 June 13, 2013

JAIME N. GAPAYAO, Petitioner,
vs.
ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, Respondents.

DECISION

SERENO, CJ.:

This is a Rule 45 Petition1 assailing the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP. No. 101688, affirming the
Resolution4 of the Social Security Commission (SSC). The SSC held petitioner Jaime N. Gapayao liable to pay the unpaid social security contributions
due to the deceased Jaime Fulo, and the Social Security System (SSS) to pay private respondent Rosario L. Fulo, the widow of the deceased, the
appropriate death benefits pursuant to the Social Security Law.

The antecedent facts are as follows:

On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure secondary to 1st degree burn 70% secondary electrocution"5 while doing
repairs at the residence and business establishment of petitioner located at San Julian, Irosin, Sorsogon.

Allegedly moved by his Christian faith, petitioner extended some financial assistance to private respondent. On 16 November 1997, the latter
executed an Affidavit of Desistance6 stating that she was not holding them liable for the death of her late husband, Jaime Fulo, and was thereby
waiving her right and desisting from filing any criminal or civil action against petitioner.

On 14 January 1998, both parties executed a Compromise Agreement,7 the relevant portion of which is quoted below:

We, the undersigned unto this Honorable Regional Office/District Office/Provincial Agency Office respectfully state:

1. The undersigned employer, hereby agrees to pay the sum of FORTY THOUSAND PESOS (₱40,000.00) to the surviving spouse of JAIME
POLO, an employee who died of an accident, as a complete and full payment for all claims due the victim.

2. On the other hand, the undersigned surviving spouse of the victim having received the said amount do [sic] hereby release and
discharge the employer from any and all claims that maybe due the victim in connection with the victim’s employment thereat.

Thereafter, private respondent filed a claim for social security benefits with the Social Security System (SSS)–Sorosogon Branch.8 However, upon
verification and evaluation, it was discovered that the deceased was not a registered member of the SSS.9

Upon the insistence of private respondent that her late husband had been employed by petitioner from January 1983 up to his untimely death on 4
November 1997, the SSS conducted a field investigation to clarify his status of employment. In its field investigation report,10 it enumerated its
findings as follows:

In connection with the complaint filed by Mrs. Rosario Fulo, hereunder are the findings per interview with Mr. Leonor Delgra, Santiago Bolanos and
Amado Gacelo:

1. That Mr. Jaime Fulo was an employee of Jaime Gapayao as farm laborer from 1983 to 1997.

2. Mr. Leonor Delgra and Santiago Bolanos are co-employees of Jaime Fulo.

3. Mr. Jaime Fulo receives compensation on a daily basis ranging from ₱5.00 to ₱60.00 from 1983 to 1997.

Per interview from Mrs. Estela Gapayao, please be informed that:

1. Jaime Fulo is an employee of Mr. & Mrs. Jaime Gapayao on an extra basis.

2. Sometimes Jaime Fulo is allowed to work in the farm as abaca harvester and earn 1/3 share of its harvest as his income.

3. Mr. & Mrs. Gapayao hired the services of Jaime Fulo not only in the farm as well as in doing house repairs whenever it is available. Mr.
Fulo receives his remuneration usually in the afternoon after doing his job.

4. Mr. & Mrs. Gapayao hires 50-100 persons when necessary to work in their farm as laborer and Jaime Fulo is one of them. Jaime Fulo
receives more or less ₱50.00 a day. (Emphases in the original)
Consequently, the SSS demanded that petitioner remit the social security contributions of the deceased. When petitioner denied that the deceased
was his employee, the SSS required private respondent to present documentary and testimonial evidence to refute petitioner’s allegations.11

Instead of presenting evidence, private respondent filed a Petition 12 before the SSC on 17 February 2003. In her Petition, she sought social security
coverage and payment of contributions in order to avail herself of the benefits accruing from the death of her husband.

On 6 May 2003, petitioner filed an Answer13 disclaiming any liability on the premise that the deceased was not the former’s employee, but was
rather an independent contractor whose tasks were not subject to petitioner’s control and supervision. 14 Assuming arguendo that the deceased
was petitioner’s employee, he was still not entitled to be paid his SSS premiums for the intervening period when he was not at work, as he was an
"intermittent worker who was only summoned every now and then as the need arose." 15 Hence, petitioner insisted that he was under no
obligation to report the former’s demise to the SSS for social security coverage.

Subsequently, on 30 June 2003, the SSS filed a Petition-in-Intervention16 before the SSC, outlining the factual circumstances of the case and praying
that judgment be rendered based on the evidence adduced by the parties.

On 14 March 2007, the SSC rendered a Resolution,17 the dispositive portion of which provides:

WHEREFORE, PREMISES CONSIDERED, this Commission finds, and so holds, that Jaime Fulo, the late husband of petitioner, was employed by
respondent Jaime N. Gapayao from January 1983 to November 4, 1997, working for nine (9) months a year receiving the minimum wage then
prevailing.

Accordingly, the respondent is hereby ordered to pay ₱45,315.95 representing the unpaid SS contributions due on behalf of deceased Jaime Fulo,
the amount of ₱217,710.33 as 3% per month penalty for late remittance thereof, computed as of March 30, 2006, without prejudice to the
collection of additional penalty accruing thereafter, and the sum of ₱230,542.20 (SSS) and ₱166,000.00 (EC) as damages for the failure of the
respondent to report the deceased Jaime Fulo for SS coverage prior to his death pursuant to Section 24(a) of the SS Law, as amended.

The SSS is hereby directed to pay petitioner Rosario Fulo the appropriate death benefit, pursuant to Section 13 of the SS Law, as amended, as well
as its prevailing rules and regulations, and to inform this Commission of its compliance herewith.

SO ORDERED.

On 18 May 2007, petitioner filed a Motion for Reconsideration,18 which was denied in an Order19 dated 16 August 2007.

Aggrieved, petitioner appealed to the CA on 19 December 2007.20 On 17 March 2010, the CA rendered a Decision21 in favor of private respondent,
as follows:

In fine, public respondent SSC had sufficient basis in concluding that private respondent’s husband was an employee of petitioner and should,
therefore, be entitled to compulsory coverage under the Social Security Law.

Having ruled in favor of the existence of employer-employee relationship between petitioner and the late Jaime Fulo, it is no longer necessary to
dwell on the other issues raised.

Resultantly, for his failure to report Jaime Fulo for compulsory social security coverage, petitioner should bear the consequences thereof. Under
the law, an employer who fails to report his employee for social security coverage is liable to [1] pay the benefits of those who die, become
disabled, get sick or reach retirement age; [2] pay all unpaid contributions plus a penalty of three percent per month; and [3] be held liable for a
criminal offense punishable by fine and/or imprisonment. But an employee is still entitled to social security benefits even is (sic) his employer fails
or refuses to remit his contribution to the SSS.

WHEREFORE, premises considered, the Resolution appealed from is AFFIRMED in toto.

SO ORDERED.

In holding thus, the CA gave credence to the findings of the SSC. The appellate court held that it "does not follow that a person who does not
observe normal hours of work cannot be deemed an employee."22 For one, it is not essential for the employer to actually supervise the
performance of duties of the employee; it is sufficient that the former has a right to wield the power. In this case, petitioner exercised his control
through an overseer in the person of Amado Gacelo, the tenant on petitioner’s land.23 Most important, petitioner entered into a Compromise
Agreement with private respondent and expressly admitted therein that he was the employer of the deceased.24 The CA interpreted this admission
as a declaration against interest, pursuant to Section 26, Rule 130 of the Rules of Court.25

Hence, this petition.

Public respondents SSS26 and SSC27 filed their Comments on 31 January 2011 and 28 February 2011, respectively, while private respondent filed her
Comment on 14 March 2011.28 On 6 March 2012, petitioner filed a "Consolidated Reply to the Comments of the Public Respondents SSS and SSC
and Private Respondent Rosario Fulo."29

ISSUE

The sole issue presented before us is whether or not there exists between the deceased Jaime Fulo and petitioner an employer-employee
relationship that would merit an award of benefits in favor of private respondent under social security laws.

THE COURT’S RULING

In asserting the existence of an employer-employee relationship, private respondent alleges that her late husband had been in the employ of
petitioner for 14 years, from 1983 to 1997.30 During that period, he was made to work as a laborer in the agricultural landholdings, a harvester in
the abaca plantation, and a repairman/utility worker in several business establishments owned by petitioner. 31 To private respondent, the
"considerable length of time during which [the deceased] was given diverse tasks by petitioner was a clear indication of the necessity and
indispensability of her late husband’s services to petitioner’s business."32 This view is bolstered by the admission of petitioner himself in the
Compromise Agreement that he was the deceased’s employer. 33

Private respondent’s position is similarly espoused by the SSC, which contends that its findings are duly supported by evidence on record. 34 It
insists that pakyaw workers are considered employees, as long as the employer exercises control over them. In this case, the exercise of control by
the employer was delegated to the caretaker of his farm, Amado Gacelo. The SSC further asserts that the deceased rendered services essential for
the petitioner’s harvest. While these services were not rendered continuously (in the sense that they were not rendered every day throughout the
year), still, the deceased had never stopped working for petitioner from year to year until the day the former died. 35 In fact, the deceased was
required to work in the other business ventures of petitioner, such as the latter’s bakery and grocery store. 36 The Compromise Agreement entered
into by petitioner with private respondent should not be a bar to an employee demanding what is legally due the latter. 37

The SSS, while clarifying that it is "neither adversarial nor favoring any of the private parties x x x as it is only tasked to carry out the purposes of the
Social Security Law,"38 agrees with both private respondent and SSC. It stresses that factual findings of the lower courts, when affirmed by the
appellate court, are generally conclusive and binding upon the Court.39

Petitioner, on the other hand, insists that the deceased was not his employee. Supposedly, the latter, during the performance of his function, was
not under petitioner’s control. Control is not necessarily present even if the worker works inside the premises of the person who has engaged his
services.40 Granting without admitting that petitioner gave rules or guidelines to the deceased in the process of the latter’s performing his work,
the situation cannot be interpreted as control, because it was only intended to promote mutually desired results.41

Alternatively, petitioner insists that the deceased was hired by Adolfo Gamba, the contractor whom he had hired to construct their building;42 and
by Amado Gacelo, the tenant whom petitioner instructed to manage the latter’s farm. 43 For this reason, petitioner believes that a tenant is not
beholden to the landlord and is not under the latter’s control and supervision. So if a worker is hired to work on the land of a tenant – such as
petitioner – the former cannot be the worker of the landlord, but of the tenant’s.44

Anent the Compromise Agreement, petitioner clarifies that it was executed to buy peace, because "respondent kept on pestering them by asking
for money."45 Petitioner allegedly received threats that if the matter was not settled, private respondent would refer the matter to the New
Peoples’ Army.46 Allegedly, the Compromise Agreement was "extortion camouflaged as an agreement."47 Likewise, petitioner maintains that he
shouldered the hospitalization and burial expenses of the deceased to express his "compassion and sympathy to a distressed person and his
family," and not to admit liability.48

Lastly, petitioner alleges that the deceased is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short period of time, in
the nature of a farm worker every season, he was not precluded from working with other persons and in fact worked for them. Under Article 280 of
the Labor Code,49 seasonal employees are not covered by the definitions of regular and casual employees. 50 Petitioner cites Mercado, Sr. v.
NLRC,51 in which the Court held that seasonal workers do not become regular employees by the mere fact that they have rendered at least one
year of service, whether continuous or broken.52

We see no cogent reason to reverse the CA.

Findings of fact of the SSC are given weight and credence.

At the outset, it is settled that the Court is not a trier of facts and will not weigh evidence all over again. Findings of fact of administrative agencies
and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only
respect but finality when affirmed by the CA.53 For as long as these findings are supported by substantial evidence, they must be upheld. 54
II

Farm workers may be considered regular seasonal employees.

Article 280 of the Labor Code states:

Article 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 actually exists.

Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been engaged to
perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose
employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of their
engagement, or those whose work or service is seasonal in nature and is performed for the duration of the season; and (3) casual employees or
those who are neither regular nor project employees.55

Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees may be considered as
regular employees.56 Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is
such that during the off season, they are temporarily laid off; but reemployed during the summer season or when their services may be
needed.57 They are in regular employment because of the nature of their job,and not because of the length of time they have worked. 58

The rule, however, is not absolute. In Hacienda Fatima v. National Federation of Sugarcane Workers-Food & General Trade,59 the Court held that
seasonal workers who have worked for one season only may not be considered regular employees. Similarly, in Mercado, Sr. v. NLRC, 60 it was held
that when seasonal employees are free to contract their services with other farm owners, then the former are not regular employees.

For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they
perform and the usual trade or business of the employer.61 This test has been explained thoroughly in De Leon v. NLRC,62 viz:

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

A reading of the records reveals that the deceased was indeed a farm worker who was in the regular employ of petitioner. From year to year,
starting January 1983 up until his death, the deceased had been working on petitioner’s land by harvesting abaca and coconut, processing copra,
and clearing weeds. His employment was continuous in the sense that it was done for more than one harvesting season. Moreover, no amount of
reasoning could detract from the fact that these tasks were necessary or desirable in the usual business of petitioner.

The other tasks allegedly done by the deceased outside his usual farm work only bolster the existence of an employer-employee relationship. As
found by the SSC, the deceased was a construction worker in the building and a helper in the bakery, grocery, hardware, and piggery – all owned by
petitioner.63 This fact only proves that even during the off season, the deceased was still in the employ of petitioner.

The most telling indicia of this relationship is the Compromise Agreement executed by petitioner and private respondent. It is a valid agreement as
long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he or she was entering
into.64 All that is required for the compromise to be deemed voluntarily entered into is personal and specific individual consent. 65 Once executed by
the workers or employees and their employers to settle their differences, and done in good faith, a Compromise Agreement is deemed valid and
binding among the parties.66

Petitioner entered into the agreement with full knowledge that he was described as the employer of the deceased. 67 This knowledge cannot simply
be denied by a statement that petitioner was merely forced or threatened into such an agreement.1âwphi1 His belated attempt to circumvent the
agreement should not be given any consideration or weight by this Court.
III

Pakyaw workers are regular employees,

provided they are subject to the control of petitioner.

Pakyaw workers are considered employees for as long as their employers exercise control over them. In Legend Hotel Manila v. Realuyo,68 the
Court held that "the power of the employer to control the work of the employee is considered the most significant determinant of the existence of
an employer-employee relationship. This is the so-called control test and is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and means used to achieve that end." It should be remembered that the
control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. 69 It is not essential that the employer
actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power. 70

In this case, we agree with the CA that petitioner wielded control over the deceased in the discharge of his functions. Being the owner of the farm
on which the latter worked, petitioner – on his own or through his overseer – necessarily had the right to review the quality of work produced by
his laborers. It matters not whether the deceased conducted his work inside petitioner’s farm or not because petitioner retained the right to
control him in his work, and in fact exercised it through his farm manager Amado Gacelo. The latter himself testified that petitioner had hired the
deceased as one of the pakyaw workers whose salaries were derived from the gross proceeds of the harvest. 71

We do not give credence to the allegation that the deceased was an independent contractor hired by a certain Adolfo Gamba, the contractor
whom petitioner himself had hired to build a building. The allegation was based on the self-serving testimony of Joyce Gapay Demate,72 the
daughter of petitioner. The latter has not offered any other proof apart from her testimony to prove the contention.

The right of an employee to be covered by the Social Security Act is premised on the existence of an employer-employee relationship.73 That having
been established, the Court hereby rules in h1vor of private respondent.

WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed Decision and resolution of the Court of Appeals in CA-G.R. SP. No.
101688 dated 17 March 2010 and 13 August 2010, respectively, are hereby AFFIRMED.

SO ORDERED.

G.R. No. L-48494 February 5, 1990

BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners,

vs.
RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of the President, and DOROTEO R. ALEGRE, respondents.
Quasha, Asperilla, Ancheta, Peña & Nolasco for petitioners.

Mauricio G. Domogon for respondent Alegre.

NARVASA, J.:

The question presented by the proceedings at bar 1 is whether or not the provisions of the Labor Code, 2 as amended,3 have anathematized "fixed
period employment" or employment for a term.

The root of the controversy at bar is an employment contract in virtue of which Doroteo R. Alegre was engaged as athletic director by Brent School,
Inc. at a yearly compensation of P20,000.00. 4 The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of
execution of the agreement, to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974
reiterated the same terms and conditions, including the expiry date, as those contained in the original contract of July 18, 1971. 5

Some three months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was given a copy of the report filed
by Brent School with the Department of Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the
termination was "completion of contract, expiration of the definite period of employment." And a month or so later, on May 26, 1976, Alegre
accepted the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16, to July
17, 1976 as full payment of contract."

However, at the investigation conducted by a Labor Conciliator of said report of termination of his services, Alegre protested the announced
termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his
services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the
status of a regular employee and could not be removed except for valid cause. 6 The Regional Director considered Brent School's report as
an application for clearance to terminate employment (not a report of termination), and accepting the recommendation of the Labor Conciliator,
refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee," to his former position without loss of
seniority rights and with full back wages. The Director pronounced "the ground relied upon by the respondent (Brent) in terminating the services of
the complainant (Alegre) . . . (as) not sanctioned by P.D. 442," and, quite oddly, as prohibited by Circular No. 8, series of 1969, of the Bureau of
Private Schools. 7

Brent School filed a motion for reconsideration. The Regional Director denied the motion and forwarded the case to the Secretary of Labor for
review. 8 The latter sustained the Regional Director. 9 Brent appealed to the Office of the President. Again it was rebuffed. That Office dismissed its
appeal for lack of merit and affirmed the Labor Secretary's decision, ruling that Alegre was a permanent employee who could not be dismissed
except for just cause, and expiration of the employment contract was not one of the just causes provided in the Labor Code for termination of
services. 10

The School is now before this Court in a last attempt at vindication. That it will get here.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code of the Philippines (P.D.
442) had not yet been promulgated. Indeed, the Code did not come into effect until November 1, 1974, some three years after the perfection of
the employment contract, and rights and obligations thereunder had arisen and been mutually observed and enforced.

At that time, i.e., before the advent of the Labor Code, there was no doubt whatever about the validity of term employment. It was impliedly but
nonetheless clearly recognized by the Termination Pay Law, R.A. 1052, 11 as amended by R.A. 1787. 12 Basically, this statute provided that—

In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the
employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an
employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving
such notice to the employee at least one month in advance or one-half month for every year of service of the employee,
whichever is longer, a fraction of at least six months being considered as one whole year.

The employer, upon whom no such notice was served in case of termination of employment without just cause, may hold the
employee liable for damages.

The employee, upon whom no such notice was served in case of termination of employment without just cause, shall be
entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.

There was, to repeat, clear albeit implied recognition of the licitness of term employment. RA 1787 also enumerated what it considered to be just
causes for terminating an employment without a definite period, either by the employer or by the employee without incurring any liability therefor.
Prior, thereto, it was the Code of Commerce which governed employment without a fixed period, and also implicitly acknowledged the propriety of
employment with a fixed period. Its Article 302 provided that —

In cases in which the contract of employment does not have a fixed period, any of the parties may terminate it, notifying the
other thereof one month in advance.

The factor or shop clerk shall have a right, in this case, to the salary corresponding to said month.

The salary for the month directed to be given by the said Article 302 of the Code of Commerce to the factor or shop clerk, was known as
the mesada (from mes, Spanish for "month"). When Article 302 (together with many other provisions of the Code of Commerce) was
repealed by the Civil Code of the Philippines, Republic Act No. 1052 was enacted avowedly for the precise purpose of reinstating
the mesada.

Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August 30,1950, itself deals with obligations
with a period in section 2, Chapter 3, Title I, Book IV; and with contracts of labor and for a piece of work, in Sections 2 and 3, Chapter 3, Title VIII,
respectively, of Book IV. No prohibition against term-or fixed-period employment is contained in any of its articles or is otherwise deducible
therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre on July 18, 1971, it was perfectly legitimate for
them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court, for instance,
in Biboso v. Victorias Milling Co., Inc., promulgated on March 31, 1977, 13 and J. Walter Thompson Co. (Phil.) v. NLRC, promulgated on December 29,
1983. 14 The Thompson case involved an executive who had been engaged for a fixed period of three (3) years. Biboso involved teachers in a private
school as regards whom, the following pronouncement was made:

What is decisive is that petitioners (teachers) were well aware an the time that their tenure was for a limited duration. Upon its
termination, both parties to the employment relationship were free to renew it or to let it lapse. (p. 254)

Under American law 15 the principle is the same. "Where a contract specifies the period of its duration, it terminates on the expiration of such
period." 16 "A contract of employment for a definite period terminates by its own terms at the end of such period." 17

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (Presidential Decree No. 442), which
went into effect on November 1, 1974. The Code contained explicit references to fixed period employment, or employment with a fixed or definite
period. Nevertheless, obscuration of the principle of licitness of term employment began to take place at about this time

Article 320, entitled "Probationary and fixed period employment," originally stated that the "termination of employment of probationary
employees and those employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may prescribe." The asserted
objective to was "prevent the circumvention of the right of the employee to be secured in their employment as provided . . . (in the Code)."

Article 321 prescribed the just causes for which an employer could terminate "an employment without a definite period."

And Article 319 undertook to define "employment without a fixed period" in the following manner: 18

An employment shall be deemed to be without a definite period for purposes of this Chapter 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 service to be performed is seasonal in nature
and the employment is for the duration of the season.

The question immediately provoked by a reading of Article 319 is whether or not a voluntary agreement on a fixed term or period would be valid
where the employee "has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer." The definition seems a non sequitur. From the premise — that the duties of an employee entail "activities which are usually necessary
or desirable in the usual business or trade of the employer the" — conclusion does not necessarily follow that the employer and employee should
be forbidden to stipulate any period of time for the performance of those activities. There is nothing essentially contradictory between a definite
period of an employment contract and the nature of the employee's duties set down in that contract as being "usually necessary or desirable in the
usual business or trade of the employer." The concept of the employee's duties as being "usually necessary or desirable in the usual business or
trade of the employer" is not synonymous with or identical to employment with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the
commencement and termination of their employment relationship, a day certain being understood to be "that which must necessarily come,
although it may not be known when." 19 Seasonal employment, and employment for a particular project are merely instances employment in which
a period, where not expressly set down, necessarily implied.
Of course, the term — period has a definite and settled signification. It means, "Length of existence; duration. A point of time marking a
termination as of a cause or an activity; an end, a limit, a bound; conclusion; termination. A series of years, months or days in which something is
completed. A time of definite length. . . . the period from one fixed date to another fixed date . . ." 20 It connotes a "space of time which has an
influence on an obligation as a result of a juridical act, and either suspends its demandableness or produces its extinguishment." 21 It should be
apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no account at all of the nature of the
duties of the employee; it has absolutely no relevance to the character of his duties as being "usually necessary or desirable to the usual business of
the employer," or not.

Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were amended by Presidential
Decree No. 850, effective December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to persons "employed with a fixed
period," and was renumbered (becoming Article 271). The article 22 now reads:

. . . Probationary employment.—Probationary employment shall not exceed six months from the date the employee started
working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has
been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be considered a regular employee.

Also amended by PD 850 was Article 319 (entitled "Employment with a fixed period," supra) by (a) deleting mention of employment with a fixed or
definite period, (b) adding a general exclusion clause declaring irrelevant written or oral agreements "to the contrary," and (c) making the provision
treat exclusively of "regular" and "casual" employment. As revised, said article, renumbered 270, 23 now reads:

. . . 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 service to be employed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to he 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 actually exists.

The first paragraph is identical to Article 319 except that, as just mentioned, a clause has been added, to wit: "The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreements of the parties . . ." The clause would appear to be
addressed inter alia to agreements fixing a definite period for employment. There is withal no clear indication of the intent to deny
validity to employment for a definite period. Indeed, not only is the concept of regular employment not essentially inconsistent with
employment for a fixed term, as above pointed out, Article 272 of the Labor Code, as amended by said PD 850, still impliedly
acknowledged the propriety of term employment: it listed the "just causes" for which "an employer may terminate employment without
a definite period," thus giving rise to the inference that if the employment be with a definite period, there need be no just cause for
termination thereof if the ground be precisely the expiration of the term agreed upon by the parties for the duration of such
employment.

Still later, however, said Article 272 (formerly Article 321) was further amended by Batas Pambansa Bilang 130, 24 to eliminate altogether reference
to employment without a definite period. As lastly amended, the opening lines of the article (renumbered 283), now pertinently read: "An
employer may terminate an employment for any of the following just causes: . . . " BP 130 thus completed the elimination of every reference in the
Labor Code, express or implied, to employment with a fixed or definite period or term.

It is in the light of the foregoing description of the development of the provisions of the Labor Code bearing on term or fixed-period employment
that the question posed in the opening paragraph of this opinion should now be addressed. Is it then the legislative intention to outlaw stipulations
in employment contracts laying down a definite period therefor? Are such stipulations in essence contrary to public policy and should not on this
account be accorded legitimacy?

On the one hand, there is the gradual and progressive elimination of references to term or fixed-period employment in the Labor Code, and the
specific statement of the rule 25 that—

. . . 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 service to be employed 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 actually exists.

There is, on the other hand, the Civil Code, which has always recognized, and continues to recognize, the validity and propriety of contracts and
obligations with a fixed or definite period, and imposes no restraints on the freedom of the parties to fix the duration of a contract, whatever its
object, be it specie, goods or services, except the general admonition against stipulations contrary to law, morals, good customs, public order or
public policy. 26 Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as they are under
the present Labor Code, to those by nature seasonal or for specific projects with pre-determined dates of completion; they also include those to
which the parties by free choice have assigned a specific date of termination.

Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific projects, but to which a
fixed term is an essential and natural appurtenance: overseas employment contracts, for one, to which, whatever the nature of the engagement,
the concept of regular employment will all that it implies does not appear ever to have been applied, Article 280 of the Labor Code not
withstanding; also appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in
educational institutions, which are by practice or tradition rotated among the faculty members, and where fixed terms are a necessity, without
which no reasonable rotation would be possible. Similarly, despite the provisions of Article 280, Policy, Instructions No. 8 of the Minister of
Labor 27 implicitly recognize that certain company officials may be elected for what would amount to fixed periods, at the expiration of which they
would have to stand down, in providing that these officials," . . . may lose their jobs as president, executive vice-president or vice-president, etc.
because the stockholders or the board of directors for one reason or another did not re-elect them."

There can of course be no quarrel with the proposition that where from the circumstances it is apparent that periods have been imposed to
preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy, morals, etc. But
where no such intent to circumvent the law is shown, or stated otherwise, where the reason for the law does not exist, e.g., where it is indeed the
employee himself who insists upon a period or where the nature of the engagement is such that, without being seasonal or for a specific project, a
definite date of termination is a sine qua non, would an agreement fixing a period be essentially evil or illicit, therefore anathema? Would such an
agreement come within the scope of Article 280 which admittedly was enacted "to prevent the circumvention of the right of the employee to be
secured in . . . (his) employment?"

As it is evident from even only the three examples already given that Article 280 of the Labor Code, under a narrow and literal interpretation, not
only fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to restrict,
without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows
that such a literal interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of
employer's using it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the head.

It is a salutary principle in statutory construction that there exists a valid presumption that undesirable consequences were
never intended by a legislative measure, and that a construction of which the statute is fairly susceptible is favored, which will
avoid all objecionable mischievous, undefensible, wrongful, evil and injurious consequences. 28

Nothing is better settled than that courts are not to give words a meaning which would lead to absurd or unreasonable
consequences. That s a principle that does back to In re Allen decided oil October 27, 1903, where it was held that a literal
interpretation is to be rejected if it would be unjust or lead to absurd results. That is a strong argument against its adoption.
The words of Justice Laurel are particularly apt. Thus: "The fact that the construction placed upon the statute by the appellants
would lead to an absurdity is another argument for rejecting it. . . ." 29

. . . We have, here, then a case where the true intent of the law is clear that calls for the application of the cardinal rule of
statutory construction that such intent of spirit must prevail over the letter thereof, for whatever is within the spirit of a statute
is within the statute, since adherence to the letter would result in absurdity, injustice and contradictions and would defeat the
plain and vital purpose of the statute. 30

Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent circumvention of the employee's right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein
should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties,
without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes
other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and
unintended consequences.

Such interpretation puts the seal on Bibiso 31 upon the effect of the expiry of an agreed period of employment as still good rule—a rule reaffirmed
in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being
served by her school a notice of termination following the expiration of the last of three successive fixed-term employment contracts, the Court
held:

Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was probationary, contractual
in nature, and one with a definitive period. At the expiration of the period stipulated in the contract, her appointment was
deemed terminated and the letter informing her of the non-renewal of her contract is not a condition sine qua non before
Reyes may be deemed to have ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes' contract of
employment was due to expire and that the contract would no longer be renewed. It is not a letter of termination. The
interpretation that the notice is only a reminder is consistent with the court's finding in Labajo supra. ...32

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

WHEREFORE, the public respondent's Decision complained of is REVERSED and SET ASIDE. Respondent Alegre's contract of employment with Brent
School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof, he is declared not entitled to
reinstatement and the other relief awarded and confirmed on appeal in the proceedings below. No pronouncement as to costs.

SO ORDERED.