Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 70705 August 21, 1989
MOISES DE LEON, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
LA TONDE;A INC., respondents.
Amorito V. Canete for petitioner.
Pablo R. Cruz for private respondent.

FERNAN, C.J.:
This petition for certiorari seeks to annul and set aside:
(1) the majority decision dated January 28, 1985 of the
National Labor Relations Commission First Division in
Case No. NCR- 83566-83, which reversed the Order
dated April 6,1984 of Labor Arbiter Bienvenido S.
Hernandez directing the reinstatement of petitioner
Moises de Leon by private respondent La Tonde;a Inc.
with payment of backwages and other benefits due a
regular employee; and, (2) the Resolution dated March
21, 1985 denying petitioner's motion for reconsideration.
It appears that petitioner was employed by private
respondent La Tonde;a Inc. on December 11, 1981, at
the Maintenance Section of its Engineering Department
in Tondo, Manila. 1 His work consisted mainly of painting
company building and equipment, and other odd jobs
relating to maintenance. He was paid on a daily basis
through petty cash vouchers.
In the early part of January, 1983, after a service of more
than one (1) year, petitioner requested from respondent
company that lie be included in the payroll of regular
workers, instead of being paid through petty cash
vouchers. Private respondent's response to this request
was to dismiss petitioner from his employment on
January 16, 1983. Having been refused reinstatement
despite repeated demands, petitioner filed a complaint
for illegal dismissal, reinstatement and payment of
backwages before the Office of the Labor Arbiter of the
then Ministry now Department of Labor and
Employment.

Petitioner alleged that he was dismissed following his

request to be treated as a regular employee; that his
work consisted of painting company buildings and
maintenance chores like cleaning and operating
company equipment, assisting Emiliano Tanque Jr., a
regular maintenance man; and that weeks after his
dismissal, he was re-hired by the respondent company
indirectly through the Vitas-Magsaysay Village Livelihood
Council, a labor agency of respondent company, and
was made to perform the tasks which he used to do.
Emiliano Tanque Jr. corroborated these averments of
petitioner in his affidavit. 2
On the other hand, private respondent claimed that
petitioner was not a regular employee but only a casual
worker hired allegedly only to paint a certain building in
the company premises, and that his work as a painter
terminated upon the completion of the painting job.
On April 6, 1984, Labor Arbiter Bienvenido S. Hernandez
rendered a decision 3 finding the complaint meritorious
and the dismissal illegal; and ordering the respondent
company to reinstate petitioner with full backwages and
other benefits. Labor Arbiter Hernandez ruled that
petitioner was not a mere casual employee as asserted
by private respondent but a regular employee. He
concluded that the dismissal of petitioner from the
service was prompted by his request to be included in
the list of regular employees and to be paid through the
payroll and is, therefore, an attempt to circumvent the
legal obligations of an employer towards a regular
employee.
Labor Arbiter Hernandez found as follows:
After a thorough examination of the
records of the case and evaluation of
the evidence and versions of the parties,
this Office finds and so holds that the
dismissal of complainant is illegal.
Despite the impressive attempt of
respondents to show that the
complainant was hired as casual and for
the work on particular project, that is the
repainting of Mama Rosa Building,
which particular work of painting and
repainting is not pursuant to the regular
business of the company, according to
its theory, we find differently.
Complainant's being hired on casual
basis did not dissuade from the cold fact
that such painting of the building and the
painting and repainting of the equipment
and tools and other things belonging to

the company and the odd jobs assigned

to him to be performed when he had no
painting and repainting works related to
maintenance as a maintenance man are
necessary and desirable to the better
operation of the business company.
Respondent did not even attempt to
deny and refute the corroborating
statements of Emiliano Tanque Jr., who
was regularly employed by it as a
maintenance man doing same jobs not
only of painting and repainting of
building, equipment and tools and
machineries or machines if the company
but also other odd jobs in the
Engineering and Maintenance
Department that complainant Moises de
Leon did perform the same odd jobs and
assignments as were assigned to him
during the period de Leon was
employed for more than one year
continuously by Id respondent company.
We find no reason not to give credit and
weight to the affidavit and statement
made therein by Emiliano Tanque Jr.
This strongly confirms that complainant
did the work pertaining to the regular
business in which the company had
been organized. Respondent cannot be
permitted to circumvent the law on
security of tenure by considering
complainant as a casual worker on daily
rate basis and after working for a period
that has entitled him to be regularized
that he would be automatically
terminated. ... . 4
On appeal, however, the above decision of the Labor
Arbiter was reversed by the First Division of the National
Labor Relations Commission by virtue of the votes of
two members 5 which constituted a majority.
Commissioner Geronimo Q. Quadra dissented, voting
"for the affirmation of the well-reasoned decision of the
Labor Arbiter below." 6 The motion for reconsideration
was denied. Hence, this recourse.
Petitioner asserts that the respondent Commission erred
and gravely abuse its discretion in reversing the Order of
the Labor Arbiter in view of the uncontroverted fact that
the tasks he performed included not only painting but
also other maintenance work which are usually
necessary or desirable in the usual business of private
respondent: hence, the reversal violates the

Constitutional and statutory provisions for the protection

of labor.
The private respondent, as expected, maintains the
opposite view and argues that petitioner was hired only
as a painter to repaint specifically the Mama Rosa
building at its Tondo compound, which painting work is
not part of their main business; that at the time of his
engagement, it was made clear to him that he would be
so engaged on a casual basis, so much so that he was
not required to accomplish an application form or to
comply with the usual requisites for employment; and
that, in fact, petitioner was never paid his salary through
the regular payroll but always through petty cash
vouchers. 7
The Solicitor General, in his Comment, recommends that
the petition be given due course in view of the evidence
on record supporting petitioner's contention that his work
was regular in nature. In his view, the dismissal of
petitioner after he demanded to be regularized was a
subterfuge to circumvent the law on regular employment.
He further recommends that the questioned decision and
resolution of respondent Commission be annulled and
the Order of the Labor Arbiter directing the reinstatement
of petitioner with payment of backwages and other
benefits be upheld. 8
After a careful review of the records of this case, the
Court finds merit in the petition as We sustain the
position of the Solicitor General that the reversal of the
decision of the Labor Arbiter by the respondent
Commission was erroneous.
The law on the matter is Article 281 of the Labor Code
which defines regular and casual employment as
follows:
Art. 281. Regular and casual
employment. The provisions of a written
agreement to the contrary
notwithstanding and regardless of the
oral agreements 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.
This provision reinforces the Constitutional mandate to
protect the interest of labor. Its language evidently
manifests the intent to safeguard the tenurial interest of
the worker who may be denied the rights and benefits
due a regular employee by virtue of lopsided
agreements with the economically powerful employer
who can maneuver to keep an employee on a casual
status for as long as convenient. Thus, contrary
agreements notwithstanding, an employment is deemed
regular when the activities performed by the employee
are usually necessary or desirable in the usual business
or trade of the employer. Not considered regular are the
so-called "project employment" 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 9 and
seasonal employment which by its nature is only
desirable for a limited period of time. However, any
employee who has rendered at least one year of service,
whether continuous or intermittent, is deemed regular
with respect to the activity he performed and while such
activity actually exists.
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.

In the case at bar, the respondent company, which is

engaged in the business of manufacture and distillery of
wines and liquors, claims that petitioner was contracted
on a casual basis specifically to paint a certain company
building and that its completion rendered petitioner's
employment terminated. This may have been true at the
beginning, and had it been shown that petitioner's
activity was exclusively limited to painting that certain
building, respondent company's theory of casual
employment would have been worthy of consideration.
However, during petitioner's period of employment, the
records reveal that the tasks assigned to him included
not only painting of company buildings, equipment and
tools but also cleaning and oiling machines, even
operating a drilling machine, and other odd jobs
assigned to him when he had no painting job. A regular
employee of respondent company, Emiliano Tanque Jr.,
attested in his affidavit that petitioner worked with him as
a maintenance man when there was no painting job.
It is noteworthy that, as wisely observed by the Labor
Arbiter, the respondent company did not even attempt to
negate the above averments of petitioner and his coemployee. Indeed, the respondent company did not only
fail to dispute this vital point, it even went further and
confirmed its veracity when it expressly admitted in its
comment that, "The main bulk of work and/or activities
assigned to petitioner was painting and other related
activities. Occasionally, he was instructed to do other
odd things in connection with maintenance while he was
waiting for materials he would need in his job or when he
had finished early one assigned to him. 10
The respondent Commission, in reversing the findings of
the Labor Arbiter reasoned that petitioner's job cannot be
considered as necessary or desirable in the usual
business or trade of the employer because, "Painting the
business or factory building is not a part of the
respondent's manufacturing or distilling process of wines
and liquors. 11
The fallacy of the reasoning is readily apparent in view of
the admitted fact that petitioner's activities included not
only painting but other maintenance work as well, a fact
which even the respondent Commission, like the private
respondent, also expressly recognized when it stated in
its decision that, 'Although complainant's (petitioner)
work was mainly painting, he was occasionally asked to
do other odd jobs in connection with maintenance
work. 12 It misleadingly assumed that all the petitioner did
during his more than one year of employment was to
paint a certain building of the respondent company,
whereas it is admitted that he was given other

assignments relating to maintenance work besides

painting company building and equipment.
It is self-serving, to say the least, to isolate petitioner's
painting job to justify the proposition of casual
employment and conveniently disregard the other
maintenance activities of petitioner which were assigned
by the respondent company when he was not painting.
The law demands that the nature and entirety of the
activities performed by the employee be considered. In
the case of petitioner, the painting and maintenance
work given him manifest a treatment consistent with a
maintenance man and not just a painter, for if his job
was truly only to paint a building there would have been
no basis for giving him other work assignments In
between painting activities.
It is not tenable to argue that the painting and
maintenance work of petitioner are not necessary in
respondent's business of manufacturing liquors and
wines, just as it cannot be said that only those who are
directly involved in the process of producing wines and
liquors may be considered as necessary employees.
Otherwise, there would have been no need for the
regular Maintenance Section of respondent company's
Engineering Department, manned by regular employees
like Emiliano Tanque Jr., whom petitioner often worked
with.
Furthermore, the petitioner performed his work of
painting and maintenance activities during his
employment in respondent's business which lasted for
more than one year, until early January, 1983 when he
demanded to be regularized and was subsequently
dismissed. Certainly, by this fact alone he is entitled by
law to be considered a regular employee. And
considering further that weeks after his dismissal,
petitioner was rehired by the company through a labor
agency and was returned to his post in the Maintenance
Section and made to perform the same activities that he
used to do, it cannot be denied that as activities as a
regular painter and maintenance man still exist.
It is of no moment that petitioner was told when he was
hired that his employment would only be casual, that he
was paid through cash vouchers, and that he did not
comply with regular employment procedure. Precisely,
the law overrides such conditions which are prejudicial to
the interest of the worker whose weak bargaining
position needs the support of the State. That determines
whether a certain employment is regular or casual is not
the will and word of the employer, to which the desperate
worker often accedes, much less the procedure of hiring
the employee or the manner of paying his salary. It is the

nature of the activities performed in relation to the

particular business or trade considering all
circumstances, and in some cases the length of time of
its performance and its continued existence.
Finally, considering its task to give life and spirit to the
Constitutional mandate for the protection of labor, to
enforce and uphold our labor laws which must be
interpreted liberally in favor of the worker in case of
doubt, the Court cannot understand the failure of the
respondent Commission to perceive the obvious attempt
on the part of the respondent company to evade its
obligations to petitioner by dismissing the latter days
after he asked to be treated as a regular worker on the
flimsy pretext that his painting work was suddenly
finished only to rehire him indirectly weeks after his
dismissal and assign him to perform the same tasks he
used to perform. The devious dismissal is too obvious to
escape notice. The inexplicable disregard of established
and decisive facts which the Commission itself admitted
to be so, in justifying a conclusion adverse to the
aggrieved laborer clearly spells a grave abuse of
discretion amounting to lack of jurisdiction.
WHEREFORE, the petition is GRANTED. The assailed
Decision and Resolution of the National Labor Relations
Commission are hereby annulled and set aside. The
Order of Labor arbiter Bienvenido S. Hernandez dated
April 6, 1984 is reinstated. Private respondent is ordered
to reinstate petitioner as a regular maintenance man and
to pay petitioner 1) backwages equivalent to three years
from January 16,1983, in accordance with the Aluminum
Wage Orders in effect for the period covered, 2) ECOLA
3) 13th Month Pay, 4) and other benefits under pertinent
Collective Bargaining Agreements, if any.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 71664 February 28, 1992

BAGUIO COUNTRY CLUB CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION,
ASSOCIATED LABOR UNION (ALU) and JIMMY
CALAMBA,respondents.
Guillermo B. Bandonill and A.N. Bolinao, Jr. for
petitioner.
Jose C. Evangelista for Jimmy Calamba.

complaint against petitioner corporation with the Ministry

of Labor (now Department of Labor and Employment),
Baguio District Office, Baguio City for unfair labor
practice, illegal dismissal and non-payment of 13th
month pay for 1979 and 1980.
The Executive Labor Arbiter Sotero L. Tumang rendered
a decision on September 15, 1982 declaring private
respondent Calamba as a regular employee and
ordering petitioner to reinstate private respondent to the
position of gardener without loss of seniority and with full
backwages, benefits and privileges from the time of his
dismissal up to reinstatement including 13th month pay.
Labor Arbiter Tumang found as follows:

MEDIALDEA, J.:
This petition for certiorari seeks to annul and set aside
the resolution issued by the respondent National Labor
Relations Commission dated June 10, 1985 dismissing
the appeal of petitioner for lack of merit and affirming in
toto the decision of the Executive Labor Arbiter dated
September 15, 1982 declaring private respondent
Calamba as a regular employee entitled to reinstatement
to the position of gardener without loss of seniority and
with full backwages, benefits and privileges from the
time of his dismissal up to reinstatement including 13th
month pay.
The antecedent facts are as follows:
Petitioner Baguio Country Club Corporation (corporation)
is a recreational establishment certified by the Ministry of
Labor and Employment as an" entertainment-service"
establishment. Respondent National Labor Relations
Commission (Commission) is a government
instrumentality created by law, impleaded in its official
capacity, while private respondent Associated Labor
Union (union) is a duly registered labor organization and
private respondent Jimmy Calamba is an employee of
the petitioner corporation as laborer, dishwasher, and
gardener.
Private respondent Jimmy Calamba was employed on a
day to day basis in various capacities as laborer and
dishwasher for a period of ten (10) months from October
1, 1979 to July 24, 1980. On September 1, 1980 to
October 1, 1980, private respondent Calamba was hired
as a gardener and rehired as such on November 15,
1980 to January 4, 1981 when he was dismissed by the
petitioner corporation. (see Rollo, pp. 28-36)
On August 3, 1981, private respondent Jimmy Calamba
assisted by private respondent union instituted a

After a careful perusal of the facts

presented by the parties, we find the
complaint for illegal dismissal and nonpayment of thirteenth (13th) month pay,
meritorious for the following reasons:
1. Complainant Jimmy Calamba has
attained regular status as an employee
of the Club on account of the nature of
the job he was hired, to perform
continuously and on staggered basis for
a span of thirteen months. True that
there were employment contracts
executed between the Club and the
complainant indicating the period or the
number of days the complainant is being
needed but what is to be considered is
not the agreement, written or otherwise,
of the parties in determining the
regularity or casualness of job but it
should be the nature of the job. Clearly,
the work of a gardener is not a seasonal
or for a specific period undertaking but it
is a whole year round activity. We must
not lose sight of the fact that the Baguio
Country Club Corporation is an
exclusive Club with sustaining members
who avails (sic) of its facilities the whole
year round and it is necessary, is has
been observed and of common
knowledge, that the gardens including
the green of its golf course where the
complainant was assigned must be
properly kept and maintained.
2. Being a regular employee with more
than one (1) year length of service with
the respondent, Jimmy Calamba could

not be terminated without a just or valid

cause. This is so explicit in our
Constitution that the security of tenure of
a worker must be safeguarded and
protected and Jimmy Calamba should
enjoy no less protection.
3. Jimmy Calamba was dismissed
without any written clearance from the
Ministry of Labor and Employment prior
to his termination. Worse, the
respondent fired the complainant from
his job due to the a (sic) alleged
expiration of his employment contract
ten (10) times but not even a single
report of his dismissal as mandated by
law was submitted to the Ministry of
Labor and Employment.
4. The Company did not refute the claim
of Jimmy Calamba for payment of his
thirteenth (13th) month pay under P.D.
851 nor presented any report of
compliance to that effect with the
Ministry of Labor and Employment and,
therefore, he must be paid
correspondingly. (Rollo, pp. 39-40)
Hence, the petitioner interposed an appeal to the
respondent Commission.
On June 10, 1985, after finding that there existed no
sufficient justification to disturb the appealed decision,
the respondent Commission rendered a resolution
dismissing the appeal for lack of merit.
Hence, this present petition raising four (4) assignments
of errors, which are as follows:

THAT THE RESPONDENT

COMMISSION GRAVELY ERRED IN
HOLDING THAT THE CONCLUSIONS
OF THE EXECUTIVE LABOR ARBITER
WERE FULLY SUPPORTED BY THE
EVIDENCE AND IN UPHOLDING THE
REINSTATEMENT OF PRIVATE
RESPONDENT JIMMY CALAMBA.
III
THAT THE RESPONDENT
COMMISSION GRAVELY ERRED IN
HOLDING THAT THE DISMISSAL OF
PRIVATE RESPONDENT JIMMY
CALAMBA REQUIRED PRIOR
CLEARANCE FROM THE MINISTRY
OF LABOR AND EMPLOYMENT EACH
TIME HIS CONTRACT OF
EMPLOYMENT EXPIRED.
IV
THAT THE RESPONDENT
COMMISSION GRAVELY ERRED IN
NOT HOLDING THAT PRIVATE
RESPONDENT ASSOCIATED LABOR
UNION HAS NO LEGAL
PERSONALITY TO FILE THIS CASE
FOR PRIVATE RESPONDENT JIMMY
CALAMBA BEFORE THE REGIONAL
OFFICE OF THE NATIONAL LABOR
RELATIONS COMMISSION, AS SAID
PRIVATE RESPONDENT BEING A
CONTRACTUAL EMPLOYEE IS
EXPRESSLY EXCLUDED FROM THE
BARGAINING UNIT UNDER THE
COLLECTIVE BARGAINING
AGREEMENT (Rollo, pp. 98-99)

I
THAT THE RESPONDENT
COMMISSION GRAVELY ERRED IN
HOLDING THAT PRIVATE
RESPONDENT JIMMY CALAMBA WAS
A "CASUAL" EMPLOYEE AND HAD
ATTAINED THE STATUS OF A
REGULAR EMPLOYEE, DESPITE THE
INCONTROVERTIBLE FACT THAT
SAID PRIVATE RESPONDENT WAS A
CONTRACTUAL AND SEASONAL
EMPLOYEE.
II

Petitioner maintains that private respondent Calamba

was a contractual employee whose employment was for
a fixed and specific period as set forth and evidenced by
the private respondent's contracts of employment, the
pertinent portions of which are quoted as follows:
xxx xxx xxx
. . . the employment may be terminated
any time without liability to the Baguio
Country Club other than for salary
actually earned up to and including the
date of last service.

His/her employment shall be on a day to

day BASIS for a temporary period . . .
subject to termination at any time at the
discretion of the Baguio Country Club
Corporation.
xxx xxx xxx
(Rollo, p. 7)
In addition, petitioner stresses that there was absolutely
no oral or documentary evidence to support the
conclusion of the Executive Labor Arbiter which was
subsequently affirmed by the respondent Commission
that private respondent Calamba has rendered thirteen
(13) months of continuous service.
On the contrary, respondent Commission through the
Solicitor General argues that private respondent
Calamba, having rendered services as laborer, gardener
and dishwasher for more than one (1) year, was a
regular employee at the time his employment was
terminated.
Moreover, the nature of private respondent Calamba's
employment as laborer, gardener, and dishwasher
pertains to a regular employee because they are
necessary or desirable in the usual business of petitioner
as a recreational establishment.
The pivotal issue therefore in whether or not the private
respondent Jimmy Calamba has acquired the status of a
regular employee at the time his employment was
terminated.
After a careful review of the records of this case the
Court finds no merit in the petition and holds that the
respondent Commission did not gravely abuse its
discretion when it affirmed in toto the decision of the
labor arbiter.
The law on the matter is Article 280 of the Labor Code
which defines regular and casual employment as
follows:
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
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.
This provision reinforces the
Constitutional mandate to protect the
interest of labor. Its language evidently
manifests the intent to safeguard the
tenurial interest of the worker who may
be denied the rights and benefits due a
regular employee by virtue of lopsided
agreements with the economically
powerful employer who can maneuver
to keep an employee on a casual status
for as long as convenient. Thus,
contrary agreements notwithstanding,
an employment is deemed regular when
the activities performed by the employee
are usually necessary or desirable in the
usual business or trade of the employer.
Not considered regular are the so-called
"project employment" 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 employment which by its
nature is only desirable for a limited
period of time. However, any employee
who has rendered at least one year of
service, whether continuous or
intermittent, is deemed regular with
respect to the activity he performed and
while such activity actually exits.
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. (De Leon v. National
Labor Relations Commission, G.R. No.
70705, August 21, 1989. 176 SCRA
615, 620-621)
In the case at bar, the petitioner corporation, which is
certified by the Ministry of Labor and Employment as an
"entertainment-service" establishment, claims that
private respondent was contracted for a fixed and
specific period. However, the records are that the private
respondent was repeatedly re-hired to perform tasks
ranging from dishwashing and gardening, aside from
performing maintenance work.
Such repeated rehiring and the continuing need for his
service are sufficient evidence of the necessity and
indispensability of his service to the petitioner's business
or trade.
The law demands that the nature and entirety of the
activities performed by the employee be considered. It is
not tenable to argue that the aforementioned tasks of
private respondent are not necessary in petitioner's
business as a recreational establishment, just as it
cannot be said that only those who are directly involved
in providing entertainment service may be considered as
necessary employees. Otherwise, there would have
been no need for the regular maintenance section of
petitioner corporation.
Furthermore, the private respondent performed the said
tasks which lasted for more than one year, until early

January, 1981 when he was terminated. Certainly, by

this fact alone he is entitled by law to be considered a
regular employee.
Owing to private respondent's length of service with the
petitioner corporation, he became a regular employee,
by operation of law, one year after he was employed. It
is more in consonance with the intent and spirit of the
law to rule that the status of regular employment
attaches to the casual employee on the day immediately
after the end of his first year of service. To rule otherwise
is to impose a burden on the employee which is not
sanctioned by law. (see Kimberly Independent Labor
Union for Solidarity, Activism and Nationalism in Line
Industries and Agriculture v. Drilon, G.R. No. 77629, May
9, 1990, 185 SCRA 190, 203-204)
It is of no moment that private respondent was told when
he was hired that his employment would only be "on a
day to day basis for a temporary period" and may be
terminated at any time subject to the petitioner's
discretion. Precisely, the law overrides such conditions
which are prejudicial to the interest of the worker.
Evidently, the employment contracts entered into by
private respondent with the petitioner have the purpose
of circumventing the employee's security of tenure. The
Court therefore, rigorously disapproves said contracts
which demonstrate a clear attempt to exploit the
employee and deprive him of the protection sanctioned
by the Labor Code.
It is noteworthy that what determines whether a certain
employment is regular or casual is not the will and word
of the employer, to which the desperate worker often
accedes. It is the nature of the activities performed in
relation to the particular business or trade considering all
circumstances, and in some cases the length of time of
its performance and its continued existence. (see De
Leon v. NLRC, Ibid)
All premises considered, the Court is convinced that the
assailed resolution of the respondent Commission is not
tainted with arbitrariness that would amount to grave
abuse of discretion or lack of jurisdiction and therefore,
We find no reason to disturb the same.
ACCORDINGLY, the petition is DISMISSED for lack of
merit.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION
G.R. No. 72222 January 30, 1989
INTERNATIONAL CATHOLIC MIGRATION
COMMISSION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
BERNADETTE GALANG, respondents.

FERNAN, C.J.:
The issue to be resolved in the instant case is whether
or not an employee who was terminated during the
probationary period of her employment is entitled to her
salary for the unexpired portion of her six-month
probationary employment.
The facts of the case are undisputed.
Petitioner International Catholic Migration Commission
(ICMC), a non-profit organization dedicated to refugee
service at the Philippine Refugee Processing Center in
Morong, Bataan engaged the services of private
respondent Bernadette Galang on January 24, 1983 as
a probationary cultural orientation teacher with a monthly
salary of P2,000.00.
Three (3) months thereafter, or on April 22, 1983, private
respondent was informed, orally and in writing, that her
services were being terminated for her failure to meet
the prescribed standards of petitioner as reflected in the
performance evaluation of her supervisors during the
teacher evaluation program she underwent along with
other newly-hired personnel.
Despite her termination, records show that private
respondent did not leave the ICMC refugee camp at
Morong, Bataan, but instead stayed thereat for a few
days before leaving for Manila, during which time, she
was observed by petitioner to be allegedly acting
strangely.
On July 24, 1983, private respondent returned to
Morong, Bataan on board the service bus of petitioner to
accomplish the clearance requirements. In the evening
of that same day, she was found at the Freedom Park of
Morong wet and shivering from the rain and acting
bizarrely. She was then taken to petitioner's hospital
where she was given the necessary medical attention.

Two (2) days later, or on July 26, 1983, she was taken to
her residence in Manila aboard petitioner's service bus.
Thru a letter, her father expressed appreciation to
petitioner for taking care of her daughter. On that same
day, her father received, on her behalf, the proportionate
amount of her 13th month pay and the equivalent of her
two week pay.
On August 22, 1983, private respondent filed a
complaint 1 for illegal dismissal, unfair labor practice and
unpaid wages against petitioner with the then Ministry of
Labor and Employment, praying for reinstatement with
backwages, exemplary and moral damages.
On October 8, 1983, after the parties submitted their
respective position papers and other pleadings, Labor
Arbiter Pelagio A. Carpio rendered his decision
dismissing the complaint for illegal dismissal as well as
the complaint for moral and exemplary damages but
ordering the petitioner to pay private respondent the sum
of P6,000.00 as payment for the last three (3) months of
the agreed employment period pursuant to her verbal
contract of employment. 2
Both parties appealed the decision to the National Labor
Relations Commission. In her appeal, private respondent
contended that her dismissal was illegal considering that
it was effected without valid cause. On the other hand,
petitioner countered that private respondent who was
employed for a probationary period of three (3) months
could not rightfully be awarded P6,000.00 because her
services were terminated for failure to qualify as a
regular employee in accordance with the reasonable
standards prescribed by her employer.
On August 22, 1985, the NLRC, by a majority vote of
Commissioners Guillermo C. Medina and Gabriel M.
Gatchalian, sustained the decision of the Labor Arbiter
and thus dismissed both appeals for lack of merit.
Commissioner Miguel Varela, on the other hand,
dissented and voted for the reversal of the Labor
Arbiter's decision for lack of legal basis considering that
the termination of services of complainant, now private
respondent, was effected during her probationary period
on valid grounds made known to her. 3
Dissatisfied, petitioner filed the instant petition.
Petitioner maintains that private respondent is not
entitled to the award of salary for the unexpired threemonth portion of the probationary period since her
services were terminated during such period when she
failed to qualify as a regular employee in accordance
with the reasonable standards prescribed by petitioner;

that having been terminated on valid grounds during her

probationary period, or specifically on April 24, 1983,
petitioner is not liable to private respondent for services
not rendered during the unexpired three-month period,
otherwise, unjust enrichment of her part would result;
that under Article 282 (now Article 281) of the Labor
Code, if the employer finds that the probationary
employees does not meet the standards of employment
set for the position, the probationary employee may be
terminated at any time within the six-month period,
without need of exhausting raid entire six-month term. 4
The Solicitor General, on the other hand, contends that a
probationary employment for six (6) months, as in the
case of herein private respondent, is an employment for
a definite period of time and, as such, the employer is
duty-bound to allow the probationary employee to work
until the termination of the probationary employment
before her re- employment could be refused; that when
petitioner disrupted the probationary employment of
private respondent, without giving her the opportunity to
improve her method of instruction within the said period,
it held itself liable to pay her salary for the unexpired
portion of such employment by way of damages
pursuant to the general provisions of civil law that he
who in any manner contravenes the terms of his
obligation without any valid cause shall be liable for
damages; 5 that, as held in Madrigal v. Ogilvie, et
al, 6 the damages so awarded are equivalent to her
salary for the unexpired portion of her employment for a
fixed period. 7
We find for petitioner.
There is justifiable basis for the reversal of public
respondent's award of salary for the unexpired threemonth portion of private respondent's six-month
probationary employment in the light of its express
finding that there was no illegal dismissal. There is no
dispute that private respondent was terminated during
her probationary period of employment for failure to
qualify as a regular member of petitioner's teaching staff
in accordance with its reasonable standards. Records
show that private respondent was found by petitioner to
be deficient in classroom management, teacher-student
relationship and teaching techniques. 8 Failure to qualify
as a regular employee in accordance with the
reasonable standards of the employer is a just cause for
terminating a probationary employee specifically
recognized under Article 282 (now Article 281) of the
Labor Code which provides thus:
ART. 281. 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 employer
who has been engaged in a
probationary basis may be terminated
for a just cause or when he fails to
qualify as a regular employer in
accordance with reasonable standard
made known by the employer to the
employer at the time of his engagement.
An employee who is allowed to work
after a probationary period shall be
considered a regular
employee. (Emphasis supplied.)
It must be noted that notwithstanding the finding of
legality of the termination of private respondent, public
respondent justified the award of salary for the unexpired
portion of the probationary employment on the ground
that a probationary employment for six (6) months is an
employment for a "definite period" which requires the
employer to exhaust the entire probationary period to
give the employee the opportunity to meet the required
standards.
The legal basis of public respondent is erroneous. A
probationary employee, as understood under Article 282
(now Article 281) of the Labor Code, is one who is on
trial by an employer during which the employer
determines whether or not he is qualified for permanent
employment. A probationary appointment is made to
afford the employer an opportunity to observe the fitness
of a probationer while at work, and to ascertain whether
he will become a proper and efficient employee. 9 The
word "probationary", as used to describe the period of
employment, implies the purpose of the term or period,
but not its length. 10
Being in the nature of a "trial period" 11 the essence of a
probationary period of employment fundamentally lies in
the purpose or objective sought to be attained by both
the employer and the employee during said period. The
length of time is immaterial in determining the correlative
rights of both in dealing with each other during said
period. While the employer, as stated earlier, observes
the fitness, propriety and efficiency of a probationer to
ascertain whether he is qualified for permanent
employment, the probationer, on the other, seeks to
prove to the employer, that he has the qualifications to
meet the reasonable standards for permanent
employment.

It is well settled that the employer has the right or is at

liberty to choose who will be hired and who will be
denied employment. In that sense, it is within the
exercise of the right to select his employees that the
employer may set or fix a probationary period within
which the latter may test and observe the conduct of the
former before hiring him permanently. The equality of
right that exists between the employer and the employee
as to the nature of the probationary employment was
aptly emphasized by this Court in Grand Motor Parts
Corporation v. Minister of Labor, et al., 130 SCRA 436
(1984), citing the 1939 case of Pampanga Bus. Co., Inc.
v. Pambusco Employees Union, Inc. 68 Phil. 541, thus:
The right of a laborer to sell his labor to
such persons as he may choose is, in its
essence, the same as the right of an
employer to purchase labor from any
person whom it chooses. The employer
and the employee have thus an equality
of right guaranteed by the Constitution.
If the employer can compel the
employee to work against the latter's
will, this is servitude. If the employee
can compel the employer to give him
work against the employer's will, this is
oppression.
As the law now stands, Article 281 of the Labor Code
gives ample authority to the employer to terminate a
probationary employee 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. There is
nothing under Article 281 of the Labor Code that would
preclude the employer from extending a regular or a
permanent appointment to an employee once the
employer finds that the employee is qualified for regular
employment even before the expiration of the
probationary period. Conversely, if the purpose sought
by the employer is neither attained nor attainable within
the said period, Article 281 of the Labor Code does not
likewise preclude the employer from terminating the
probationary employment on justifiable causes as in the
instant case.
We find unmeritorious, therefore, public respondents
argument that the security of tenure of probationary
employees within the period of their probation, as in the
case of herein private respondent, justified the award of
salary for the unexpired portion of her probationary
employment. The termination of private respondent
predicated on a just cause negates the application in this
case of the pronouncement in the case of Biboso v.

Victories Milling Co., Inc., 12 on the right of security of

tenure of probationary employees.
Upon inquiry by the then Ministry of Labor and
Employment as a consequence of the illegal dismissal
case filed by private respondent before it, docketed as
Case No. NLRC NCR-8-3786-83, it was found that there
was no illegal dismissal involved in the case, hence, the
circumvention of the rights of the probationary
employees sought to be regulated as pointed out
in Biboso v. Victorias Milling Co., Inc., 13 is wanting.
There was no showing, as borne out by the records, that
there was circumvention of the rights of private
respondent when she was informed of her termination.
Her dismissal does not appear to us as arbitrary, fanciful
or whimsical. Private respondent was duly notified, orally
and in writing, that her services as cultural orientation
teacher were terminated for failure to meet the
prescribed standards of petitioner as reflected in the
performance evaluation conducted by her supervisors
during the teacher evaluating program. The
dissatisfaction of petitioner over the performance of
private respondent in this regard is a legitimate exercise
of its prerogative to select whom to hire or refuse
employment for the success of its program or
undertaking. More importantly, private respondent failed
to show that there was unlawful discrimination in the
dismissal.
It was thus a grave abuse of discretion on the part of
public respondent to order petitioner to pay private
respondent her salary for the unexpired three-month
portion of her six-month probationary employment when
she was validly terminated during her probationary
employment. To sanction such action would not only be
unjust, but oppressive on the part of the employer as
emphasized in Pampanga Bus Co., Inc., v. Pambusco
Employer Union, Inc. 14
WHEREFORE, in view of the foregoing, the petition is
GRANTED. The Resolution of the National Labor
Relations Commission dated August 22, 1985, is hereby
REVERSED and SET ASIDE insofar as it ordered
petitioner to pay private respondent her P6,000.00 salary
for the unexpired portion of her six-month probationary
employment. No cost.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

The present Constitution of expanding the mandate of

protection to labor specifically casts on the State the
obligation to assure workers security of tenure. 1 The
decisive question in the controversy now before this
Court is wether the mantle of such guarantee covers the
case of the nine petitioners, whose employment
admittedly were on a basis. It was the rulling of the
respondent Presidential Executive Assistant Jacobo C.
Clave that its benificent effects could not be invoked by
them that is assailed before this Court. While they are
pleading by captioned petition for review, this Court
considered it as a cetiorari proceeding in view on his
part, the issue of an alleged unfair labor pratice indulged
in by private respondent public official, who acted
serious accusation against respondent public, who acted
on behalf of the Office of the President. The petition is
not impressed with the merit.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-44360 March 31, 1977
REGINA S. BIBOSO, NENITA B. BISO, FE CUBIN,
MAGELENDE H. DEMEGILLDO, EMERITA O.
PANALIGAN, NILDA P. TAYO, NELDA TORMON,
ARDE M. VALENCIANO, MA. LINDA E. VILLA and the
VICMICO SUPERVISORY EMPLOYEES
ASSOCIATION (VICSEA), petitioners,
vs.
VICTORIAS MILLING COMPANY, INC. and the
OFFICE OF THE PRESIDENT OF THE
PHILIPPINES,respondents.

FERNANDO, J.:t.hqw

The order of respondent Jacobo C. Clave, who asss

Presidential Executive Assistant acted on an appeal by
private respondent from a decision of the Secretary of
Labor dismissed the complaint of petitioners for
reinstatement. He noted at the outset of such challenged
order: "Individual complainants herein were employed by
respondent as academic teachers in respondent's
school, the St. Mary Mazzarello School, which is
operated by respondent. On or about April 14, 1973,
complainants were notified by the school Directress that
they (complainants) were not going to be rehired for the
school year 1973-74.sllF The necessary report for
such action was filed by respondent with the Department
of Labor on May 28, 1973, informing that complainants'
services were thus terminated after the business hours
on June 30, 1973. 2 He then pointed out that petitioners
were quite successful with the Arbitrator, the former
National Labor Relations Commission under Presidential
Decree No. 21, and the Secretary of Labor. It was
private respondent that appealed to the Office of the
President. After which, his order went into the basic
issue thus: "This Office had examined and analyzed the
various contracts Identified during the hearing below and
admitted by the complainants to have been signed by
them which clearly show that the complainants were
hired as teachers of the school on a year-to-year basis
and that they reapplied before the expiration of the
contracts and/or signed new ones, as the case may be,
if the school decided to renew the same. None of the
complainants who testified disputed the fact that they all
signed Identical contracts of employment which provided
for a definite period of employment which provided for a
definite period of employment expiring June 30 of the
particular school year. Thus, under 'Status of
Employment' of said contracts, the complainants were
hired as 'temporary as and when required until June 30,
1973,' or whatever year the contract is supposed to
terminate. To he specific, Exhs. '4', '5' and '6' signed by
complainant Arde Valenciano show that she was hired
on a yearly basis for school year 1970-71, and 1971-72.
The same is true with Exhs. '13' and '14' signed by Linda
Villa; Exhs. '16', '17','18' and '19', signed by Emerita 0.
Panaligan; and Exhs.'22' and '23', signed by Magelinde
Demegillo all showing that they were hired on a year-to-

year basis. 3 Reference was then made to "the official

stand of the Department of Labor respecting recognition
by the Labor Code of the policy of the Bureau of Private
Schools settling the maximum probationary period for
teachers at three years. Of pertinence hereto is the
official letter dated March 12, 1975, of Undersecretary of
Labor Amado G. Inciong to the President of the
Coordinating Council of Private Educational Associations
touching on the probationary period for teachers at three
years, to wit: ... This refers to your letter of 5 March 1975
in connection with the probationary period for teachers.
The Labor Code does not set the maximum probationary
period at six months. Under the Labor Code, the
probationary period is the period required to learn a skill,
trade. occupation or profession. In other words, the
Labor Code recognizes the policy of the Bureau of
Private Schools settling the maximum probationary
period for teachers at three years.4 It was likewise made
plain therein that as regards the allegation of unfair labor
practice, the Office of the President "finds the same
untenable. 5
The petition, as noted at the outset, cannot proper.
1. It is to be noted that in Philippine Air Lines, Inc. v.
Philippine Air Lines Employees Association, 6 after
reference was made to the specific provision in the
present Constitution not found in the 1935 Charter
requiring the State to assure workers security of tenure,
it was stressed that there should be fealty to [such]
constitutional command. 7 Such a mandate was
construed in the subsequent case of Almira v. B. F.
Goodrich Philippines, Inc., 8 that even in cases affording
justification for disciplinary action to be taken by
management against an employee, "where a penalty
less punitive [than dismissal] would suffice, whatever
missteps may be committed by [the latter ought not to be
visited with a consequence so severe." 9 The opinion
then went on to state: "It is not only because of the law's
concern for the workingman. There is, in addition, his
family to consider. Unemployment brings untold
hardships and sorrows on those dependent on the
wage-earner. The misery and pain attendant on the loss
of jobs then could be avoided if there be acceptance of
the view that under all the circumstance of this case,
petitioners should not be deprived of their means of
livelihood. Nor is this to condone what had been paid.
From the strictly juridical standpoint, it cannot be too
strongly stressed, to follow Davis in his masterly work,
Discretionary Justice, that were a decision may be made
to rest on informed judgment rather than rigid rules, all
the equities of the case must be accorded their due
weight. Finally, labor law determinations, to quote from
Bultmann, should be notsecundum rationem but
also secundum caritatem. " 10 That is a doctrine to which
this case is whether it applies to the case of petitioner.
The Office of the President answered in the negative.
Thus it exercised its discretion. It cannot be said that an
abuse could rightfully be imputed by it, much less one
that is of such gravity that calls fir judicial correction.
What is decisive is that petitioners were well aware all
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. It was
the decision of private respondent that it should cease.
The Office of the President could find nothing
objectionable when it determined that the will of the
parties as to the limited duration thereof should be
respected. That was all that was decided.
2. This is by no means to assert that the security of
tenure protection of the constitution does not apply t
probationary employees. The Labor code has wisely
provided for such a case thus: "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 priscribe to
prevent the circum\vention of the right of the employees
to be secured in their employment as provided
herein." 11 There is no question here, as noted in the
assailed order of Presidential Executive Assistant Clave,
that petitioners did not enjoy a permanent status. During
such period they could remian in their positions and any
circumvention of their of the rights, in accordance with
the statutory statutory scheme, subject to inquirey and
therafter correction by the Department of Labor. Thus
there was the safeguard as to the duration of their
employment being respected. To that extent, their tenure
was secure. The moment, however, the period expired in
accordance with contracts freely entered into, they could
no longer invoke the constitutional protection. To repeat,
that was what transpired in this case.sllF The ruling
of the Office of the President, now assailed, is not
without support in law.
3. It would be a different matter of course had the failure
to renew the contracts of petitioners been justly
attributable to their joining petitioner labor union, Vicmico
Supervisoyr Employees Association. That would be a
clear case of an unfair labor practice. 12 There was such
an allegation by them. The Office of the President found
"the same untenable." 13 Nor did it stop there. It
explained why: "The records disclose, and it is a fact
admitted by the union, that the teachers of Don Bosco
Technical Institute, also run and operated by respondent,
are all members of the VICSEA. The allegation that the
Company refused re-employment of complainants
simply because they joined the VICSEA isnegated by the
fact that in a much bigger school, the Don bosco
Technical Institute, respondent has allowed the members
of the faculty to join the CIVSEA without any serious
objection or reprisal. If at all the respondent had objected
to the teachers of the St. Mary Mazzarello school being
considered within the same bargaining unit as the otgher
employees of the company, it was for the reason that the
exemption from coverage of employes hired for a
definite period of employment, like the complainants
herein, who were indisputably shown that the term of
their contract of employment prior to the time that they
become permanent under the Manual of the Bureau of
Private Schools, was temporary in nature or for a definite
period." 14

In the comment submitted on behalf of respondent public

official, reference was made to the admission by
individual petitioners that before they joined such labor
union, "they had serious differences with the school
officials respecting their methods of teaching and
conduct in school." 15 That was followed by a recital of
what was testified to by some of the petitioners. Then
came this portion of the comment: "The above-quoted
testimonies of individual petitioners clearly show that
their competence, efficiency, loyalty and integrity were in
question long before they became members of petitioner
union VICSEA and it was because of these failings on
their part that their contracts to teach were not renewed.
This also shown by Exhibit 39, ... (3) Some of the
teachers retained to teach in the school were also
members of petitioner union VICSEA.... If respondent
VICMICO was against individual petitioners joining the
union, why did it not terminate the employment of these
two teachers as well? (4) Don Bosco of Bacolod City,
another school run by respondent VICMICO, is manned
by teachers who are members of petitioner union
VICSEA ... Considering "he foregoing circumstances, it
is difficult to believe the submission of individual
petitioners that they were terminated from employment
because they joined petitioner union VICSEA It would
appear that it was the other way around. Knowing that
their contracts were about to expire and that they would
probably not be extended new ones, petitioners sought
membership in petitioner union VICSEA to render it more
difficult for respondent VICMICO to remove them from
their teaching positions. This is indicated by the fact that
petitioners became members of petitioner union VICSEA
only in January, 1973. Before this date, individual
petitioners were already being closely observed to
gauge their performance for purposes of determining
who shall be accorded permanent status. Thus,
individual petitioners knew that they would either be
made permanent or will be dropped from the faculty
roster at the end of the school year 1972-73. So they
joined the union. That the purpose of individual
petitioners in joining the union is to avert their
forthcoming removal from the faculty roster was
impliedly admitted by one of the individual petitioners in
her testimony: 'Q But according to you, precisely, the
reason why you joined the union was because it would
be very hard for the school toterminate you if you are
already a member of the union, did you not say that? A
I said it!" 16 The memorandum for petitioners did
stress testimony coming from the Directress of the
school in question to show that the refusal to retain them
in employment was due to their membership in the
union. Certainly, it cannot be assumed that the Office of
the President in the evaluation of the conflicting
evidence did not take it into consideration. The
conclusion it reached was adverse to petitioners. It is
now well-settled that the certiorari jurisdiction of this
Tribunal extends only to a grave abuse of discretion.
There must be the element of arbitrariness or caprice. In
the light of what appears of record, the conclusion that
the decision reached by it is tainted by such infirmity is
unwarranted.

WHEREFORE, the petition for certiorari is dismissed.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-57822 April 26, 1989
FR. PEDRO ESCUDERO, O.P. JOSEFINA AGUILAR
and UNIVERSITY OF SANTO TOMAS, petitioners,
vs.
OFFICE OF THE PRESIDENT OF THE PHILIPPINES
and CARMELITA B. REYES, respondents.
Augusta K Aligada Jr. for petitioners.
The Solicitor General for public respondent.
Bonifacio R. Reyes, Jr. for private respondent.

CORTES, J.:
This special civil action for certiorari stemmed from a
complaint for reinstatement and backwages filed by
private respondent Carmelita B. Reyes against the
petitioners University of Santo Tomas (UST), Friar Pedro
Escudero and Josefina Aguilar, the Assistant Regent and
Principal, respectively, of the Elementary School
Department of UST.
Carmelita B. Reyes was appointed by petitioner UST on
June 17, 1972 as a teacher with a "probationary rank" in
the latter's Elementary School Department," "with all the
duties, rights and privileges appertaining thereto in
accordance with the Statutes and Faculty Code of the
University and other existing rules and regulations"
[Rollo, p. 7.] This appointment expressly provided that it
was to take effect on July 5, 1972 and will terminate at
the end of the 1972-1973 school year.
On June 7,1973, Reyes's appointment was renewed
effective on June 4, 1973 and to terminate at the end of
the school year 1973-1974. Her appointment was again
renewed on April 2, 1974, to take effect on June 3, 1974
and to terminate at the end of schoolyear 1974-1975.
There was no mention in these two renewals whether
her appointment was permanent or still probationary.

On February 7,1975, private respondent Reyes received

from petitioners a notice of termination of her services,
advising her that she filed not be given a new contract of
appointment for the ensuing schoolyear. Claiming that
she was illegally terminated she filed on February 14,
1975 a complaint for reinstatement with backwages with
Regional Office No. IV of the Department of Labor.
On November 13,1975, Labor Arbiter Ricarte T. Soriano
rendered a decision upholding the termination of Reyes
but ordering petitioner to grant her separation pay,
equivalent to one and one-half months pay. The Labor
Arbiter justified the award in this wise:

appellant Carmelita B. Reyes to her

former position with full back wages
from the time her services were
terminated on February 7, 1975 up to
her actual reinstatement, without loss of
seniority rights, as well as to other
pertinent benefits. [Rollo, p. 36.]
Hence, petitioner filed the instant special civil action for
certiorari seeking to annul the decision of the respondent
Office of the President on the principal ground that the
private respondent Reyes has not been illegally
terminated and therefore, the order for her reinstatement
with full backwages had no legal basis.

xxx xxx xxx

Although the respondents have shown
by overwhelming evidence to the
satisfaction of the undersigned that the
dismissal was justified, hence,
reinstatement of the complainant is
unwarranted, the undersigned Arbiter
finds it rather still reasonable to order
respondents to pay complainant onehalf month pay for every year of service.
The same is in line with the goals of the
Labor Code to be more sympathetic to
the cause of the laborers. [Rollo, p. 68.]
From this decision of the Labor Arbiter, both parties
appealed to the National Labor Relations Commission
(NLRC). The NLRC however found no valid cause for
the termination and ordered petitioners to reinstate
Reyes to her former position with full backwages from
the time her services were terminated on February
7,1975 up to her actual reinstatement without loss of
seniority rights and other benefits appertaining thereto.
On appeal to the Secretary of Labor, the then Acting
Secretary of Labor, Amado G. Inciong, issued an Order
dated November 22,1977 modifying the NLRC decision
by deleting the order for the reinstatement of Reyes and
ordering petitioners to instead pay her separation pay
equivalent to one-half month salary for every year of
service.
Private respondent appealed to the Office of the
President and on May 27, 1980, the Office of the
President rendered a decision reversing that of the
Acting Secretary of Labor, the decretal portion of which
reads:
In view of the foregoing, respondentsappellees should reinstate complainant-

The pivotal issue in this case is whether grave abuse of

discretion can be attributed to the respondent Office of
the President in holding that private respondent Reyes
was dismissed illegally.
Petitioners maintain that Reyes' last appointment was
one with a fixed period; i.e., from June 3, 1974 until the
end of the 1974-1975 school year, hence her
employment was not covered by then Article 318 * of the
Labor Code prohibiting dismissals without any just
cause. Petitioners assert that Reyes' appointment
terminates upon expiration of the period fixed therein
such that when Reyes was sent a notice of the
termination of her services as of the end of the 19741975 schoolyear, petitioners were merely enforcing the
provisions of her last appointment. Moreover, Reyes'
employment was subject as well to the UST Faculty
Code which prescribes a three-year probationary period
in accordance with the 1970 Manual of Regulations for
Private Schools. That Code requires a third renewal of
the annual appointment in order that a teacher may be
considered permanent, thus:
xxx xxx xxx
The provisions of Sections 3 and 4
notwithstanding, faculty members who
have rendered three consecutive years
(six semesters) of satisfactory service
on full time basis as determined by the
pertinent rules of the University and of
the Bureau of Private Schools shall
be considered permanent upon the third
renewal of their annual appointment, ...
xxx xxx xxx
[Rollo, p. 16.]

Petitioners maintain that Reyes failed to render three

consecutive years of satisfactory service [Rollo, pp. 1617,] as shown by her poor efficiency rating found
established by the Labor Arbiter, and that it is the third
renewal of the appointment of Reyes which is the
operative act that will confer her a permanent status.
Since her appointment was not renewed for the third
time, petitioners insist that she has not attained
permanent status [Rollo, p. 171].
There is merit in the petition.
The provisions of the Labor Code, in force at the time
the cause of action of Reyes accrued on February 7,
1975 Villones v. Employees' Compensation Commission,
G.R. No. L-46200, July 30, 1979, 92 SCRA 320], states
that "[t]he 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 to prevent the circumvention of the right
of the employees to be secured in their employment as
provided herein" [Section 320; Emphasis supplied].
Under Section 6, Rule I, Book IV of the Rules
Implementing the Labor Code:
Section 6. Probationary and fixed period
employment. -(a) Where the work for
which an employee has been engaged
is learnable or apprenticeable in
accordance with the standards
prescribed by the Department of Labor,
the probationary employment period of
the employee shall be limited to the
authorized learnership or apprenticeable
period, whichever is applicable.
(b) Where the work is neither learnable
nor apprenticeable the probationary
period of employment shall not exceed 6
months from the date the employee
actually started working.
xxx xxx xxx
However, the six-month probationary period prescribed
by the Secretary of Labor is merely the general rule. The
recognized exceptions to this rule, as further set forth in
Policy Instructions No. 11 issued by the Secretary of
Labor on April 23, 1976, are:
xxx xxx xxx

Probationary employment has been the

subject of misunderstanding in some
quarters. Some people believe six (6)
months is the probationary period in all
cases. On the other hand, employees
who have already served the
probationary period are sometimes
required to serve again on probation.
Under the Labor Code, six (6) months is
the general probationary period, but the
probationary period is actually the
period needed to determine fitness for
the job. This period, for lack of a better
measurement, is deemed to be the
period needed to learn the job.
Thus, if the job is apprenticeable, then
the probationary period is the
apprenticeship period, which may be six
(6) months, less than six (6) months, or
more than six (6) months, depending
upon the nature of the job. Therefore,
upon graduation an apprentice may not
be put under probationary employment
in the company in which he trained. In
another company, however, the
probationary period for him would be six
(6) months. The reason is to allow the
employer to test his working habits and
other personal traits with respect to his
fitness for regularization in the
company. If the job is learnable-can be
learned within three months-then the
probationary period is three months or
less. The learner upon completion of the
learning period must be considered
regular.
The probationary employment of
professors, instructors and teachers
shall be subject to standards
established by the Department of
Education and Culture.
xxx xxx xxx
[Rollo, p. 110; Emphasis supplied.]
It is thus clear that the Labor Code authorizes different
probationary periods, according to the requirements of
the particular job. For private school teachers, the period
of probation is governed by the 1970 Manual of
Regulations for Private Schools, adopted by the

Department of Education and Culture pursuant to the

provisions of Act No. 2076, as amended by Act No. 3075
and Commonwealth Act No. 180. Paragraph 75 of the
Manual provides that "[f]ull-time teachers who have
rendered three consecutive years of satisfactory service
shall be considered permanent," while the preceding
paragraph requires that the employment contracts be in
writing with at least one school-year's duration. That the
probationary period for private school teachers is three
years has already been confirmed by this Court in the
recent case of Labajo v. Alejandro [G.R. No. 80383,
September 26, 1988] wherein it was declared:

ELEMENTARY
SCHOOL
DEPARTMENT
I have the pleasure to
appoint you
TEACHER
with all the duties, rights and privileges
appertaining thereto in accordance with
the Statutes and Faculty Code of the
University and other existing rules and
regulations.

xxx xxx xxx

The three (3)-year period of service
mentioned in paragraph 75 [of the
Manual of Regulations for Private
Schools] is of course
the maximum period or upper limit, so to
speak, of probationary employment
allowed in the case of private school
teachers. This necessarily implies that a
regular or permanent employment
status may, under certain conditions, be
attained in less than three (3) years. By
and large, however, whether or not one
has indeed attained permanent status in
one's employment, before the passage
of three (3) years, is a matter of proof.
[at p. 7.]

This appointment takes effect on June

3,1974 and terminates at the end of the
1974-1975 school year.
Sincerely,
(signed)
. EXCELSIO GARCIA, O.P.
Assistant to the Rector
for Academic Affairs
NON-TENURED
APPOINTMENT
ACCEPTED:

xxx xxx xxx

The best proof as to whether Reyes had already attained
permanent status, is her contract with petitioner UST.
That contract which was only the second renewal of her
original probationary appointment reads as follows:
April 2 1974
74
Mrs. Carmelita Reyes
Elementary School
Department
University of Santo
Tomas
Dear Mrs. Reyes,
Upon recommendation
of the Elementary's
Council of the

(signed)
CARMELITA B. REYES
DATED: June 3,1974
The above contract reveals two significant points: 1) that
the contract is one with a definite period to start on June
3, 1974 to end at the close of the 1974- 75 schoolyear
and 2) that Reyes' signature appears underneath the
words "NON-TENURED APPOINTMENT ACCEPTED."
These features in the contract indicate that the
appointment of Reyes subsists only for the 1974- 75
schoolyear. That the contract contained the words "nontenured appointment accepted" reveals the nonpermanent status of her employment. Nothing therein
states that a permanent appointment was extended to
her nor that UST was obliged to extend her one upon the
expiration of the above contract.
Moreover no vested right to a permanent appointment
had as yet accrued in her favor since she had not yet
completed the prerequisite three year period necessary
for the acquisition of permanent status, as required both
by the Manual of Regulations for Private Schools and

the UST Faculty Code. That her appointment was only

for a fixed duration is further evinced by the fact that on
February 7, 1975, before the expiration of the
abovementioned contract, Reyes was served a notice
that she may not expect her appointment to be renewed
the next schoolyear and that her probationary
employment was to terminate at the close of the
schoolyear 1974-75. Although Reyes was allowed to
complete her term according to the stipulated period,
indeed no new contract was extended her. Reyes
however construed the February 7, 1975 notice as a
notice of termination and claims that it constituted
dismissal without just cause and thus filed the instant
case.
Reyes' argument is not persuasive. It loses sight of the
fact that her employment was probationary, contractual
in nature, and one with a definite 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 inLabajo, supra, where
the Court in construing a similar letter sent to private
school teachers whose contracts with San Andres High
School were due to expire said:

G.R. No. 53453, January 22, 1986, 141 SCRA 169;

Euro-Linea, Phils., Inc. v. National Labor Relations
Commission, G.R. No. 75782, December 1, 1987, 156
SCRA 78; Labajo v. Alejandro, et al, supra.]
In the instant case, the probation period provided is
three years covered by three separate written annual
contracts. Reyes as a probationary and contractual
employee was entitled to security of tenure only during
the three year period of her probation and such
protection ended the moment her last employment
contract expired at the close of schoolyear 1974-75 and
she was not extended a renewal of her appointment.
The Office of the President therefore gravely abused its
discretion in finding that Reyes was illegally terminated,
in ordering her reinstatement and in awarding her
backwages "from the time her services were terminated
on February 7, 1975 up to her actual reinstatement"
[Rollo, p. 36.]
WHEREFORE, the decision of the respondent Office of
the President is hereby SET ASIDE, and the Order of the
Assistant Secretary of Labor dated November 22,1977 is
REINSTATED.
SO ORDERED
Republic of the Philippines
SUPREME COURT
Manila

xxx xxx xxx

Such letter was either a formal reminder
to private respondents that their
respective contracts of employment with
petitioners for school year 1984-85 were
due to expire on 31 March 1985, or
advance notice that such contracts
would no longer be renewed for school
year 1985-86, or both. [at p. 10.]
As to the question of the existence of just cause to justify
the dismissal, the Court finds applicable here the case
ofBiboso v. Victorias Milling Company, Inc. [G.R. No. L44360, March 31, 1977, 76 SCRA 250, (1977).] In that
case, the Court held that while probationary employees
enjoy security of tenure such that they cannot be
removed except for cause as provided by law, such
protection extends only during the period of probation.
Once that period expires, the constitutional protection
could no longer be invoked. This has been reiterated in
subsequent cases [Manila Hotel Corporation v. NLRC,

FIRST DIVISION

G.R. No. 109114 September 14, 1993

HOLIDAY INN MANILA and/or HUBERT LINER and
BABY DISQUITADO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION
(Second Division) and ELENA
HONASAN, respondents.
Inocentes, De Leon, Leogardo, Atienza, Manaye &
Azucena Law Office for petitioners.
Florante M. Yambot for private respondent.

CRUZ, J.:

The employer has absolute discretion in hiring his

employees in accordance with his standards of
competence and probity. This is his prerogative. Once
hired, however, the employees are entitled to the
protection of the law even during the probation period
and more so after they have become members of the
regular force. The employer does not have the same
freedom in the hiring of his employees as in their
dismissal.
Elena Honasan applied for employment with the Holiday
Inn and was on April 15, 1991, accepted for "on-the-job
training" as a telephone operator for a period of three
weeks. 1 For her services, she received food and
transportation allowance. 2 On May 13, 1992, after
completing her training, she was employed on a
"probationary basis" for a period of six months ending
November 12,
1991. 3
Her employment contract stipulated that the Hotel could
terminate her probationary employment at any time prior
to the expiration of the six-month period in the event of
her failure (a) to learn or progress in her job; (b) to
faithfully observe and comply with the hotel rules and the
instructions and orders of her superiors; or (c) to perform
her duties according to hotel standards.
On November 8, 1991, four days before the expiration of
the stipulated deadline, Holiday Inn notified her of her
dismissal, on the ground that her performance had not
come up to the standards of the Hotel. 4
Through counsel, Honasan filed a complaint for illegal
dismissal, claiming that she was already a regular
employee at the time of her separation and so was
entitled to full security of tenure. 5 The complaint was
dismissed on April 22, 1992 by the Labor Arbiter, 6 who
held that her separation was justified under Article 281 of
the Labor Code providing as follows:
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 a

probationary period shall be considered
a regular employee.
On appeal, this decision was reversed by the NLRC,
which held that Honasan had become a regular
employee and so could not be dismissed as a
probationer. 7 In its own decision dated November 27,
1992, the NLRC ordered the petitioners to reinstate
Honasan "to her former position without loss of seniority
rights and other privileges with backwages without
deduction and qualification." Reconsideration was
denied in a resolution dated January 26, 1993. 8
The petitioners now fault the NLRC for having
entertained Honasan's appeal although it was filed out of
time and for holding that Honasan was already a regular
employee at the time of her dismissal, which was made
4 days days before the expiration of the probation
period.
The petition has no merit.
On the timeliness of the appeal, it is well-settled that all
notices which a party is entitled to receive must be
coursed through his counsel of record. Consequently,
the running of the reglementary period is reckoned from
the date of receipt of the judgment by the counsel of the
appellant. 9 Notice to the appellant himself is not
sufficient notice. 10Honasan's counsel received the
decision of the Labor Arbiter on May 18, 1992. 11 Before
that, however, the appeal had already been filed by
Honasan herself, on May 8, 1992. 12 The petitioners
claim that she filed it on the thirteenth but this is
irrelevant. Even if the latter date was accepted, the
appeal was nevertheless still filed on time, in fact even
before the start of the reglementary period.
On the issue of illegal dismissal, we find that Honasan
was placed by the petitioner on probation twice, first
during her on-the-job training for three weeks, and next
during another period of six months, ostensibly in
accordance with Article 281. Her probation clearly
exceeded the period of six months prescribed by this
article.
Probation is the period during which the employer may
determine if the employee is qualified for possible
inclusion in the regular force. In the case at bar, the
period was for three weeks, during Honasan's on-the-job
training. When her services were continued after this
training, the petitioners in effect recognized that she had
passed probation and was qualified to be a regular
employee.

Honasan was certainly under observation during her

three-week on-the-job training. If her services proved
unsatisfactory then, she could have been dropped as
early as during that period. But she was not. On the
contrary, her services were continued, presumably
because they were acceptable, although she was
formally placed this time on probation.
Even if it be supposed that the probation did not end with
the three-week period of on-the-job training, there is still
no reason why that period should not be included in the
stipulated six-month period of probation. Honasan was
accepted for on-the-job training on April 15, 1991.
Assuming that her probation could be extended beyond
that date, it nevertheless could continue only up to
October 15, 1991, after the end of six months from the
earlier date. Under this more lenient approach, she had
become a regular employee of Holiday Inn and acquired
full security of tenure as of October 15, 1991.
The consequence is that she could no longer be
summarily separated on the ground invoked by the
petitioners. As a regular employee, she had acquired the
protection of Article 279 of the Labor Code stating as
follows:
Art. 279. Security of Tenure In cases
of regular employment, the employer
shall not terminate the services of an
employee except for a just cause or
when authorized by this Title. An
employee who is unjustly dismissed
from work shall be entitled to
reinstatement without loss of seniority
rights and other privileges and to his full
backwages, inclusive of allowances, and
to his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up
to the time of his actual reinstatement.

The grounds for the removal of a regular employee are

enumerated in Articles 282, 283 and 284 of the Labor
Code. The procedure for such removal is prescribed in
Rule XIV, Book V of the Omnibus Rules Implementing
the Labor Code. These rules were not observed in the
case at bar as Honasan was simply told that her
services were being terminated because they were
found to be unsatisfactory. No administrative
investigation of any kind was undertaken to justify this
ground. She was not even accorded prior notice, let
alone a chance to be heard.
We find in the Hotel's system of double probation a
transparent scheme to circumvent the plain mandate of
the law and make it easier for it to dismiss its employees
even after they shall have already passed probation. The
petitioners had ample time to summarily terminate
Honasan's services during her period of probation if they
were deemed unsatisfactory. Not having done so, they
may dismiss her now only upon proof of any of the legal
grounds for the separation of regular employees, to be
established according to the prescribed procedure.
The policy of the Constitution is to give the utmost
protection to the working class when subjected to such
maneuvers as the one attempted by the petitioners. This
Court is fully committed to that policy and has always
been quick to rise in defense of the rights of labor, as in
this case.
WHEREFORE, the petition is DISMISSED, with costs
against petitioners. It is so ordered.