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, Pea & 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 TheThompson 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)."

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.

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

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.

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

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) deletingmention 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:

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.

. . . 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.

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?

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, 24to 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

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. 26Under 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 rulea 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.
Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Corts,
Grio-Aquino, Medialdea and Regalado, JJ., concur.
Fernan, C.J., took no part.
Separate Opinions
SARMIENTO, J., concurring and dissenting:
I am agreed that the Labor Code has not foresaken "term employments", held valid
in Biboso V. Victorias Milling Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA
250). That notwithstanding, I can not liken employment contracts to ordinary civil contracts
in which the relationship is established by stipulations agreed upon. Under the very Civil
Code:
Art. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
xxx xxx xxx
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed
in favor of the safety and decent living for the laborer.

The courts (or labor officials) should nevertheless be vigilant as to whether or not the
termination of the employment contract is done by reason of expiration of the period or to
cheat the employee out of office. The latter amounts to circumvention of the law.
Separate Opinions
SARMIENTO, J., concurring and dissenting:
I am agreed that the Labor Code has not foresaken "term employments", held valid
in Biboso V. Victorias Milling Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA
250). That notwithstanding, I can not liken employment contracts to ordinary civil contracts
in which the relationship is established by stipulations agreed upon. Under the very Civil
Code:
Art. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
xxx xxx xxx
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed
in favor of the safety and decent living for the laborer.
The courts (or labor officials) should nevertheless be vigilant as to whether or not the
termination of the employment contract is done by reason of expiration of the period or to
cheat the employee out of office. The latter amounts to circumvention of the law.

G.R. No. 61594 September 28, 1990

PAKISTAN
INTERNATIONAL
AIRLINES
CORPORATION, petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON. VICENTE
LEOGARDO, JR., in his capacity as Deputy Minister; ETHELYNNE B. FARRALES
and MARIA MOONYEEN MAMASIG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.
Ledesma, Saludo & Associates for private respondents.

FELICIANO, J.:

On 2 December 1978, petitioner Pakistan International Airlines Corporation ("PIA"), a

foreign corporation licensed to do business in the Philippines, executed in Manila two (2)
separate contracts of employment, one with private respondent Ethelynne B. Farrales and
the other with private respondent Ma. M.C. Mamasig. 1 The contracts, which became
effective on 9 January 1979, provided in pertinent portion as follows:

On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration of the
contracts of employment, PIA through Mr. Oscar Benares, counsel for and official of the
local branch of PIA, sent separate letters both dated 1 August 1980 to private
respondents Farrales and Mamasig advising both that their services as flight
stewardesses would be terminated "effective 1 September 1980, conformably to clause 6
(b) of the employment agreement [they had) executed with [PIA]." 2

5. DURATION OF EMPLOYMENT AND PENALTY

This agreement is for a period of three (3) years, but can be extended by
the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided, PIA reserves the
right to terminate this agreement at any time by giving the EMPLOYEE
notice in writing in advance one month before the intended termination or
in lieu thereof, by paying the EMPLOYEE wages equivalent to one
month's salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under and by the laws
of Pakistan, and only the Courts of Karachi, Pakistan shall have the
jurisdiction to consider any matter arising out of or under this agreement.
Respondents then commenced training in Pakistan. After their training period, they began
discharging their job functions as flight attendants, with base station in Manila and flying
assignments to different parts of the Middle East and Europe.

On 9 September 1980, private respondents Farrales and Mamasig jointly instituted a

complaint, docketed as NCR-STF-95151-80, for illegal dismissal and non-payment of
company benefits and bonuses, against PIA with the then Ministry of Labor and
Employment ("MOLE"). After several unfruitful attempts at conciliation, the MOLE hearing
officer Atty. Jose M. Pascual ordered the parties to submit their position papers and
evidence supporting their respective positions. The PIA submitted its position paper, 3 but
no evidence, and there claimed that both private respondents were habitual absentees;
that both were in the habit of bringing in from abroad sizeable quantities of "personal
effects"; and that PIA personnel at the Manila International Airport had been discreetly
warned by customs officials to advise private respondents to discontinue that practice.
PIA further claimed that the services of both private respondents were terminated
pursuant to the provisions of the employment contract.
In his Order dated 22 January 1981, Regional Director Francisco L. Estrella ordered the
reinstatement of private respondents with full backwages or, in the alternative, the
payment to them of the amounts equivalent to their salaries for the remainder of the fixed
three-year period of their employment contracts; the payment to private respondent
Mamasig of an amount equivalent to the value of a round trip ticket Manila-USA Manila;
and payment of a bonus to each of the private respondents equivalent to their one-month
salary. 4 The Order stated that private respondents had attained the status of regular
employees after they had rendered more than a year of continued service; that the
stipulation limiting the period of the employment contract to three (3) years was null and
void as violative of the provisions of the Labor Code and its implementing rules and
regulations on regular and casual employment; and that the dismissal, having been
carried out without the requisite clearance from the MOLE, was illegal and entitled private
respondents to reinstatement with full backwages.

On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo, Jr., Deputy
Minister, MOLE, adopted the findings of fact and conclusions of the Regional Director and
affirmed the latter's award save for the portion thereof giving PIA the option, in lieu of
reinstatement, "to pay each of the complainants [private respondents] their salaries
corresponding to the unexpired portion of the contract[s] [of employment] . . .". 5

Rule XIV, Book No. 5 of the Rules and Regulations Implementing the Labor Code,
made clear that in case of a termination without the necessary clearance, the
Regional Director was authorized to order the reinstatement of the employee
concerned and the payment of backwages; necessarily, therefore, the Regional
Director must have been given jurisdiction over such termination cases:

In the instant Petition for Certiorari, petitioner PIA assails the award of the Regional
Director and the Order of the Deputy Minister as having been rendered without
jurisdiction; for having been rendered without support in the evidence of record since,
allegedly, no hearing was conducted by the hearing officer, Atty. Jose M. Pascual; and for
having been issued in disregard and in violation of petitioner's rights under the
employment contracts with private respondents.

Sec. 2. Shutdown or dismissal without clearance. Any shutdown or

dismissal without prior clearance shall be conclusively presumed to be
termination of employment without a just cause. The Regional Director
shall, in such case order the immediate reinstatement of the employee
and the payment of his wages from the time of the shutdown or dismissal
until the time of reinstatement. (emphasis supplied)

1. Petitioner's first contention is that the Regional Director, MOLE, had no jurisdiction over
the subject matter of the complaint initiated by private respondents for illegal dismissal,
jurisdiction over the same being lodged in the Arbitration Branch of the National Labor
Relations Commission ("NLRC") It appears to us beyond dispute, however, that both at
the time the complaint was initiated in September 1980 and at the time the Orders
assailed were rendered on January 1981 (by Regional Director Francisco L. Estrella) and
August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional Director had
jurisdiction over termination cases.

Policy Instruction No. 14 issued by the Secretary of Labor, dated 23 April 1976,
was similarly very explicit about the jurisdiction of the Regional Director over
termination of employment cases:

Art. 278 of the Labor Code, as it then existed, forbade the termination of the services of
employees with at least one (1) year of service without prior clearance from the
Department of Labor and Employment:
Art. 278. Miscellaneous Provisions . . .
(b) With or without a collective agreement, no employer may shut down
his establishment or dismiss or terminate the employment of employees
with at least one year of service during the last two (2) years, whether
such service is continuous or broken, without prior written authority
issued in accordance with such rules and regulations as the Secretary
may promulgate . . . (emphasis supplied)

Under PD 850, termination cases with or without CBA are now

placed under the original jurisdiction of the Regional Director. Preventive
suspension cases, now made cognizable for the first time, are also
placed under the Regional Director. Before PD 850, termination cases
where there was a CBA were under the jurisdiction of the grievance
machinery and voluntary arbitration, while termination cases where there
was no CBA were under the jurisdiction of the Conciliation Section.
In more details, the major innovations introduced by PD 850 and its
implementing rules and regulations with respect to termination and
preventive suspension cases are:
1. The Regional Director is now required to rule on every application for
clearance, whether there is opposition or not, within ten days from receipt
thereof.
xxx xxx xxx

(Emphasis supplied)
2. The second contention of petitioner PIA is that, even if the Regional Director had
jurisdiction, still his order was null and void because it had been issued in violation of
petitioner's right to procedural due process . 6 This claim, however, cannot be given
serious consideration. Petitioner was ordered by the Regional Director to submit not only
its position paper but also such evidence in its favor as it might have. Petitioner opted to
rely solely upon its position paper; we must assume it had no evidence to sustain its
assertions. Thus, even if no formal or oral hearing was conducted, petitioner had ample
opportunity to explain its side. Moreover, petitioner PIA was able to appeal his case to the
Ministry of Labor and Employment. 7
There is another reason why petitioner's claim of denial of due process must be rejected.
At the time the complaint was filed by private respondents on 21 September 1980 and at
the time the Regional Director issued his questioned order on 22 January 1981,
applicable regulation, as noted above, specified that a "dismissal without prior clearance
shall be conclusively presumed to be termination of employment without a cause", and
the Regional Director was required in such case to" order the immediate reinstatement of
the employee and the payment of his wages from the time of the shutdown or dismiss
until . . . reinstatement." In other words, under the then applicable rule, the Regional
Director did not even have to require submission of position papers by the parties in view
of the conclusive (juris et de jure) character of the presumption created by such applicable
law and regulation. In Cebu Institute of Technology v. Minister of Labor and
Employment, 8 the Court pointed out that "under Rule 14, Section 2, of the Implementing
Rules and Regulations, the termination of [an employee] which was without previous
clearance from the Ministry of Labor is conclusively presumed to be without [just] cause . .
. [a presumption which] cannot be overturned by any contrary proof however strong."
3. In its third contention, petitioner PIA invokes paragraphs 5 and 6 of its contract of
employment with private respondents Farrales and Mamasig, arguing that its relationship
with them was governed by the provisions of its contract rather than by the general
provisions of the Labor Code. 9
Paragraph 5 of that contract set a term of three (3) years for that relationship, extendible
by agreement between the parties; while paragraph 6 provided that, notwithstanding any

other provision in the Contract, PIA had the right to terminate the employment agreement
at any time by giving one-month's notice to the employee or, in lieu of such notice, onemonths salary.
A contract freely entered into should, of course, be respected, as PIA argues, since a
contract is the law between the parties. 10 The principle of party autonomy in contracts is
not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that the
contracting parties may establish such stipulations as they may deem
convenient, "providedthey are not contrary to law, morals, good customs, public order or
public policy." Thus, counter-balancing the principle of autonomy of contracting parties is
the equally general rule that provisions of applicable law, especially provisions relating to
matters affected with public policy, are deemed written into the contract. 11 Put a little
differently, the governing principle is that parties may not contract away applicable
provisions of law especially peremptory provisions dealing with matters heavily impressed
with public interest. The law relating to labor and employment is clearly such an area and
parties are not at liberty to insulate themselves and their relationships from the impact of
labor laws and regulations by simply contracting with each other. It is thus necessary to
appraise the contractual provisions invoked by petitioner PIA in terms of their consistency
with applicable Philippine law and regulations.
As noted earlier, both the Labor Arbiter and the Deputy Minister, MOLE, in effect held that
paragraph 5 of that employment contract was inconsistent with Articles 280 and 281 of the
Labor Code as they existed at the time the contract of employment was entered into, and
hence refused to give effect to said paragraph 5. These Articles read as follows:
Art. 280. 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 to his backwages computed from the time his
compensation was withheld from him up to the time his reinstatement.
Art. 281. Regular and Casual Employment. The provisions of 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 as regular employee with respect to the activity in
which he is employed and his employment shall continue while such
actually exists. (Emphasis supplied)
In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the Court had occasion to
examine in detail the question of whether employment for a fixed term has been outlawed
under the above quoted provisions of the Labor Code. After an extensive examination of
the history and development of Articles 280 and 281, the Court reached the conclusion
that a contract providing for employment with a fixed period was not necessarily unlawful:
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 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 employers" 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.
xxx xxx xxx
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. (emphasis supplied)
It is apparent from Brent School that the critical consideration is the presence or
absence of a substantial indication that the period specified in an employment
agreement was designed to circumvent the security of tenure of regular
employees which is provided for in Articles 280 and 281 of the Labor Code. This
indication must ordinarily rest upon some aspect of the agreement other than the
mere specification of a fixed term of the ernployment agreement, or upon
evidence aliunde of the intent to evade.
Examining the provisions of paragraphs 5 and 6 of the employment agreement between
petitioner PIA and private respondents, we consider that those provisions must be read
together and when so read, the fixed period of three (3) years specified in paragraph 5 will
be seen to have been effectively neutralized by the provisions of paragraph 6 of that
agreement. Paragraph 6 in effect took back from the employee the fixed three (3)-year
period ostensibly granted by paragraph 5 by rendering such period in effect a facultative
one at the option of the employer PIA. For petitioner PIA claims to be authorized to
shorten that term, at any time and for any cause satisfactory to itself, to a one-month
period, or even less by simply paying the employee a month's salary. Because the net
effect of paragraphs 5 and 6 of the agreement here involved is to render the employment
of private respondents Farrales and Mamasig basically employment at the pleasure of
petitioner PIA, the Court considers that paragraphs 5 and 6 were intended to prevent any
security of tenure from accruing in favor of private respondents even during the limited
period of three (3) years, 13 and thus to escape completely the thrust of Articles 280 and
281 of the Labor Code.
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which
specifies, firstly, the law of Pakistan as the applicable law of the agreement and, secondly,
lays the venue for settlement of any dispute arising out of or in connection with the
agreement "only [in] courts of Karachi Pakistan". The first clause of paragraph 10 cannot
be invoked to prevent the application of Philippine labor laws and regulations to the
subject matter of this case, i.e., the employer-employee relationship between petitioner
PIA and private respondents. We have already pointed out that the relationship is much
affected with public interest and that the otherwise applicable Philippine laws and

regulations cannot be rendered illusory by the parties agreeing upon some other law to
govern their relationship. Neither may petitioner invoke the second clause of paragraph
10, specifying the Karachi courts as the sole venue for the settlement of dispute; between
the contracting parties. Even a cursory scrutiny of the relevant circumstances of this case
will show the multiple and substantive contacts between Philippine law and Philippine
courts, on the one hand, and the relationship between the parties, upon the other: the
contract was not only executed in the Philippines, it was also performed here, at least
partially; private respondents are Philippine citizens and respondents, while petitioner,
although a foreign corporation, is licensed to do business (and actually doing business)
and hence resident in the Philippines; lastly, private respondents were based in the
Philippines in between their assigned flights to the Middle East and Europe. All the above
contacts point to the Philippine courts and administrative agencies as a proper forum for
the resolution of contractual disputes between the parties. Under these circumstances,
paragraph 10 of the employment agreement cannot be given effect so as to oust
Philippine agencies and courts of the jurisdiction vested upon them by Philippine law.
Finally, and in any event, the petitioner PIA did not undertake to plead and prove the
contents of Pakistan law on the matter; it must therefore be presumed that the applicable
provisions of the law of Pakistan are the same as the applicable provisions of Philippine
law. 14
We conclude that private respondents Farrales and Mamasig were illegally dismissed and
that public respondent Deputy Minister, MOLE, had not committed any grave abuse of
discretion nor any act without or in excess of jurisdiction in ordering their reinstatement
with backwages. Private respondents are entitled to three (3) years backwages without
qualification or deduction. Should their reinstatement to their former or other substantially
equivalent positions not be feasible in view of the length of time which has gone by since
their services were unlawfully terminated, petitioner should be required to pay separation
pay to private respondents amounting to one (1) month's salary for every year of service
rendered by them, including the three (3) years service putatively rendered.
ACCORDINGLY, the Petition for certiorari is hereby DISMISSED for lack of merit, and the
Order dated 12 August 1982 of public respondent is hereby AFFIRMED, except that (1)
private respondents are entitled to three (3) years backwages, without deduction or
qualification; and (2) should reinstatement of private respondents to their former positions
or to substantially equivalent positions not be feasible, then petitioner shall, in lieu thereof,

pay to private respondents separation pay amounting to one (1)-month's salary for every
year of service actually rendered by them and for the three (3) years putative service by
private respondents. The Temporary Restraining Order issued on 13 September 1982 is
hereby LIFTED. Costs against petitioner.
SO ORDERED.
Fernan (C.J., Chairman), Gutierrez, Jr., Bidin and Corts, JJ., concur.

CRUZ, J.:
The petitioner is a truck driver who claims he was illegally dismissed by the private
respondent, the Henry Lei Trucking Company. The Labor Arbiter found for him and
ordered his reinstatement with back wages. 1 On appeal, the decision was reversed by
the National Labor Relations Commission, which held that the petitioner's employment
had expired under a valid contract. 2 The petitioner then came to us on certiorari under
Rule 65 of the Rules of Court.
Required to submit a Comment (not to file a motion to dismiss), the private respondent
nevertheless moved to dismiss on the ground that the petition was filed sixty-eight days
after service of the challenged decision on the petitioner, hence late. The motion was
untenable, of course. Petitions for certiorari under Rule 65 may be instituted within a
reasonable period, which the Court has consistently reckoned at three months.**
In his own Comment, the Solicitor General defended the public respondent and agreed
that the contract between the petitioner and the private respondent was a binding
agreement not contrary to law, morals or public policy. The petitioner's services could be
legally terminated upon the expiration of the period agreed upon, which was only six
months. The petitioner could therefore not complain that he had been illegally dismissed.

G.R. No. 78693

As an examination of the claimed agreement was necessary to the resolution of this case,
the Court required its production by the petitioner. But he could not comply because he
said he had not been given a copy by the private respondent. A similar requirement
proved fruitless when addressed to the private respondent, which explained it could not
locate the folder of the case despite diligent search. It was only on October 15, 1990, that
the records of the case, including the subject agreement, were finally received by the
Court from the NLRC, which had obtained them from its Cagayan de Oro regional office. 3

January 28, 1991

ZOSIMO
CIELO, petitioner,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, HENRY LEI
and/or HENRY LEI TRUCKINGrespondents.

The said agreement reads in full as follows:

Francisco
D.
Alas
Mateo G. Delegencia for private respondent.

KNOW ALL MEN BY THESE PRESENTS:

for

petitioner.

AGREEMENT

This Agreement made and executed by and between:

HENRY LEI, of legal age, Filipino citizen, married, and a resident of Digos, Davao del Sur,
now and hereinafter called the FIRST PARTY,

IN WITNESS WHEREOF, the parties hereunto affixed their signature on this 30th day of
June, 1984, at Digos, Davao del Sur, Philippines.

a n d

(Sgd.)
HENRY
ZOSIMO CIELO, of legal age, married, Filipino citizen, and a resident of Agusan, Canyon,First Party
Camp Philipps, now and hereinafter called the SECOND PARTY,
SIGNED IN THE PRESENCE OF:
WITNESSETH

(Sgd.)
VICTOR CHAN

(Sgd.)
LEI ZOSIMO
Second Party

CIELO

(Sgd.)
AMALFE M. NG

That the FIRST PARTY is an owner of some cargo trucks.

WHEREAS, the SECOND PARTY desires to operate one of the said cargo trucks which
he himself shall drive for income;
NOW, THEREFORE, for the foregoing premises, the FIRST PARTY does hereby assign
one cargo truck of his fleet to the SECOND PARTY under the following conditions and
stipulations:
1. That the term of this Agreement is six (6) months from and after the
execution hereof, unless otherwise earlier terminated at the option of
either party;
2. That the net income of the said vehicle after fuel and oil shall be
divided by and between them on ninety/ten percent (90/10%) basis in
favor of the FIRST PARTY;
3. That there is no employer/employee relationship between the parties,
the nature of this Agreement being contractual;
4. In the event the SECOND PARTY needs a helper the personnel so
employed by him shall be to his personal account, who shall be
considered his own employee;
5. That the loss of or damage to the said vehicle shall be to account of
the SECOND PARTY; he shall return the unit upon the expiration or
termination of this contract in the condition the same was received by
him, fair wear and tear excepted.

The agreement was supposed to have commenced on June 30, 1984, and to end on
December 31, 1984. On December 22, 1984, however, the petitioner was formally notified
by the private respondent of the termination of his services on the ground of expiration of
their contract. Soon thereafter, on January 22, 1985, the petitioner filed his complaint with
the Ministry of Labor and Employment.
In his position paper, the petitioner claimed he started working for the private respondent
on June 16, 1984, and having done so for more than six months had acquired the status
of a regular employee. As such, he could no longer be dismissed except for lawful cause.
He also contended that he had been removed because of his refusal to sign, as required
by the private respondent, an affidavit reading as follows:
AF F I DAV I T
That I, ZOSIMO CIELO, Filipino, of legal age, married/single and a resident of Agusan
Canyon, Camp Philipps, after having been duly sworn to in accordance with law, hereby
depose and say:
That I am one of the drivers of the trucks of Mr. HENRY LEI whose hauling trucks are
under contract with the Philippine Packing Corporation;
That I have received my salary and allowances from Mr. HENRY LEI the sum of
P1,421.10 for the month of October 1984. That I have no more claim against the said Mr.
Henry Lei.
IN WITNESS WHEREOF, I have hereunto affixed my signature this 15th day of November
1984.

Driver
The private respondent rests its case on the agreement and maintains that the labor laws
are not applicable because the relations of the parties are governed by their voluntary
stipulations. The contract having expired, it was the prerogative of the trucking company
to renew it or not as it saw fit.
The writ will issue.
While insisting that it is the agreement that regulates its relations with the petitioner, the
private respondent is ensnared by its own words. The agreement specifically declared
that there was no employer-employee relationship between the parties. Yet the affidavit
the private respondent prepared required the petitioner to acknowledge that "I have
received my salary and allowances from Mr. Henry Lei," suggesting an employment
relationship. According to its position paper, the petitioner's refusal to sign the affidavit
constituted disrespect or insubordination, which had "some bearing on the renewal of
his contract of employment with the respondent." Of this affidavit, the private respondent
had this to say:
. . . Since October 1984, respondent adopted a new policy to require all their
employees to sign an affidavit to the effect that they received their salaries. Copy
of which is hereto attached as Annex "C," covering the months of October and
November 1984. All other employees of the respondent signed the said affidavit,
only herein complainant refused to do so for reasons known only to him. . . .
It appears from the records that all the drivers of the private respondent have been hired
on a fixed contract basis, as evidenced by the mimeographed form of the agreement and
of the affidavit. The private respondent merely filled in the blanks with the corresponding
data, such as the driver's name and address, the amount received by him, and the date of
the document. Each driver was paid through individual vouchers 4 rather than a common
payroll, as is usual in companies with numerous employees.
The private respondent's intention is obvious. It is remarkable that neither the NLRC nor
the Solicitor General recognized it. There is no question that the purpose behind these
individual contracts was to evade the application of the labor laws by making it appear
that the drivers of the trucking company were not its regular employees.

Under these arrangements, the private respondent hoped to be able to terminate the
services of the drivers without the inhibitions of the Labor Code. All it had to do was refuse
to renew the agreements, which, significantly, were uniformly limited to a six-month
period. No cause had to be established because such renewal was subject to the
discretion of the parties. In fact, the private respondent did not even have to wait for the
expiration of the contract as it was there provided that it could be "earlier terminated at the
option of either party."
By this clever scheme, the private respondent could also prevent the drivers from
becoming regular employees and thus be entitled to security of tenure and other benefits,
such as a minimum wage, cost-of-living allowances, vacation and sick leaves, holiday
pay, and other statutory requirements. The private respondent argues that there was
nothing wrong with the affidavit because all the affiant acknowledged therein was full
payment of the amount due him under the agreement. Viewed in this light, such
acknowledgment was indeed not necessary at all because this was already embodied in
the vouchers signed by the payee-driver.1wphi1 But the affidavit, for all its seeming
innocuousness, imported more than that. What was insidious about the document was the
waiver the affiant was unwarily making of the statutory rights due him as an employee of
the trucking company.
And employee he was despite the innocent protestations of the private respondent. We
accept the factual finding of the Labor Arbiter that the petitioner was a regular employee
of the private respondent. The private respondent is engaged in the trucking business as
a hauler of cattle, crops and other cargo for the Philippine Packing Corporation. This
business requires the services of drivers, and continuously because the work is not
seasonal, nor is it limited to a single undertaking or operation. Even if ostensibly hired for
a fixed period, the petitioner should be considered a regular employee of the private
respondent, conformably to Article 280 of the Labor Code providing 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 usually necessarily 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. (Emphasis supplied)

standards under which he could qualify as a regular employee. It is plain that the
petitioner was hired at the outset as a regular employee. At any rate, even assuming that
the original employment was probationary, the Labor Arbiter found that the petitioner had
completed more than six month's service with the trucking company and so had acquired
the status of a regular employee at the time of his dismissal.

In Brent School, Inc. vs. Zamora, the Court affirmed the general principle 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." Such circumstances have been sufficiently
established in the case at bar and justify application of the following conclusions:

Even if it be assumed that the six-month period had not yet been completed, it is settled
that the probationary employee cannot be removed except also for cause as provided by
law. It is not alleged that the petitioner was separated for poor performance; in fact, it is
suggested by the private respondent that he was dismissed for disrespect and
insubordination, more specifically his refusal to sign the affidavit as required by company
policy. Hence, even as a probationer, or more so as a regular employee, the petitioner
could not be validly removed under Article 282 of the Labor Code, providing as follows:

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.
The agreement in question had such a purpose and so was null and void ab initio.
The private respondent's argument that the petitioner could at least be considered on
probation basis only and therefore separable at will is self-defeating. The Labor Code
clearly provides as follows:
Art. 281. 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 a probationary
period shall be considered a regular employee.
There is no question that the petitioner was not engaged as an apprentice, being already
an experienced truck driver when he began working for the private respondent. Neither
has it been shown that he was informed at the time of his employment of the reasonable

Art. 282. Termination by employer. An employer may terminate an employment

for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
In refusing to sign the affidavit as required by the private respondent, the petitioner was
merely protecting his interests against an unguarded waiver of the benefits due him under
the Labor Code. Such willful disobedience should commend rather than prejudice him for
standing up to his rights, at great risk to his material security, against the very source of
his livelihood.

The Court looks with stern disapproval at the contract entered into by the private
respondent with the petitioner (and who knows with how many other drivers). The
agreement was a clear attempt to exploit the unwitting employee and deprive him of the
protection of the Labor Code by making it appear that the stipulations of the parties were
governed by the Civil Code as in ordinary private transactions. They were not, to be sure.
The agreement was in reality a contract of employment into which were read the
provisions of the Labor Code and the social justice policy mandated by the Constitution. It
was a deceitful agreement cloaked in the habiliments of legality to conceal the selfish
desire of the employer to reap undeserved profits at the expense of its employees. The
fact that the drivers are on the whole practically unlettered only makes the imposition
more censurable and the avarice more execrable.
WHEREFORE, the petition is GRANTED. The decision of the National Labor Relations
Commission is SET ASIDE and that of the Labor Arbiter REINSTATED, with costs against
the private respondents.
SO ORDERED.

ASTULERO, MAGNO DECALSO, NENITA OROSEA, JOSE TIMING, ANTONIO

MANALILI, RODELIO QUERIA and REYNALDO SANTOS, respondents.
Ponce Enrile, Cayetano, Reyes Manalastas for petitioner.
Tupaz & Associates and Alfredo L. Bentulan for private respondents.

NOCON, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court with a prayer for the
issuance of a temporary restraining order to annul and set aside the
decision 1 promulgated November 7, 1991 by the National Labor Relations Commission
(NLRC) of Manila reversing the decision dated December 19, 1989 of the Labor Arbiter
Cornelio L. Linsangan.

Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

It appears on record that private respondents Juanito Acuin, Mamerta Mangubat, Raul
Sonon, Elgar Pemis, Orlando Paraguison, Ferdinand Velasco, Mike Astulero, Magno
Decalso, Nenita Orosea, Jose Timing, Antonio Manalili, Rodelio Queria and Reynaldo
Santos were employees of petitioner Philippine Village Hotel. However, on May 19, 1986,
petitioner had to close and totally discontinue its operations due to serious financial and
business reverses resulting in the termination of the services of its employees.
Thereafter, the Philippine Village Hotel Employees and Workers Union filed against
petitioner a complaint for separation pay, unfair labor practice and illegal lock-out.
G.R. No. 105033 February 28, 1994
PHILIPPINE
VILLAGE
HOTEL, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) AND TUPAS
LOCAL CHAPTER NO. 1362, JUANITO ACUIN, MAMERTA MANGUBAT, RAUL
SONON, ELGAR PEMIS, ORLANDO PARAGUISON, FERDINAND VELASCO, MIKE

On May 27, 1987, the Labor Arbiter issued and Order finding the losses suffered by
petitioner to be actual, genuine and of such magnitude as to validly terminate the services
of private respondents but directed petitioner "to give priority to the complainants (herein
private respondents) in [the] hiring of personnel should they resume their business
operations in the future." 2
On appeal, the NLRC affirmed the validity of the closure of petitioner but ordered
petitioner to pay private respondent separation pay at the rate of 1/2 month pay every

year of service. However, there is nothing in the records to show that private respondents
received their separation pay as the decision of the NLRC remained unenforced as of this
date.
On February 1, 1989, petitioner decided to have a one (1) month dry-run operation to
ascertain the feasibility of resuming its business operations. In order to carry out its dryrun operation, petitioner hired casual workers, including private respondents, for a one (1)
month period, or from February 1, 1989 to March 1, 1989, as evidenced by the latter's
Contract of Employment. 3
After evaluating the individual performance of all the employees and upon the lapse of the
contractual one-month period or on March 2, 1989, petitioner terminated the services of
private respondents.
On April 6, 1989, private respondents and Tupas Local Chapter No. 1362 filed a complaint
against petitioner for illegal dismissal and unfair labor practice with the NLRC-NCR
Arbitration
Branch
in
NLRC
Case
No.
00-04-01665-89.
On December 19, 1989, the Labor Arbiter rendered a decision, the dispositive portion of
which reads, as follows:
WHEREFORE, finding the above-entitled complaint to be without factual
and legal basis, judgment is hereby rendered dismissing the same. 4

actually dismissed on 02 March 1989 up to the time of their actual

reinstatement, but which period of time should not exceed three (3) years.
The complaint for unfair labor practice is hereby dismissed for lack of
adequate factual basis. 5
On March 5, 1992, petitioners Motion for Reconsideration was denied for lack of merit.
Hence, this petition alleging grave abuse of discretion on the part of the public respondent
NLRC in finding that private respondents are regular employees of petitioner considering
that the latter's services were already previously terminated in 1986 and that their
employment contracts specifically provided only for a temporary one-month period of
employment.
The petition is impressed with merit.
An examination of the contents of the private respondents' contracts of employment
shows that indeed private respondents voluntarily and knowingly agreed to be employed
only for a period of one (1) month or from February 1, 1989 to March 1, 1989.
The fact that private respondents were required to render services usually necessary or
desirable in the operation of petitioner's business for the duration of the one (1) month
dry-run operation period does not in any way impair the validity of the contractual nature
of private respondents' contracts of employment which specifically stipulated that the
employment of the private respondents was only for one (1) month.

Thereafter, private respondents appealed to the public respondent NLRC.

On November 7, 1991, public NLRC reversed the decision of the Labor Arbiter, the
dispositive portion of which reads as follows:
WHEREFORE, under the premises, let the decision appealed from be, as
it is hereby reversed, and a new judgment rendered, hereby ordering the
respondent Philippine Village Hotel to reinstate the above-named
complainants to their former or substantially equivalent positions without
loss of seniority rights plus full backwages from the time they were

In upholding the validity of a contract of employment with a fixed or specific period, we

have held that the decisive determinant in term employment should not be the activities
that the employee is called upon to perform, but theday 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. The term period was further defined to be the 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 or the period from one fixed date to another fixed

date. 6 This ruling is only in consonance with Article 280 of the Labor Code which
provides:

brought to bear upon the employee and absent any other circumstances
vitiating his consent; or

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.

2. 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 on the latter."

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.
Inasmuch as private respondents' contracts of employment categorically provided a fixed
period and their termination had already been agreed upon at the time of their
engagement, private respondents' employment was one with a specific period or day
certain agreed upon by the parties. In Philippine National Oil Company-Energy
Development Corporation vs. NLRC, 7 we held that:
As can be gleaned from the said case (Brent School, Inc. vs. Zamora,
181 SCRA 702), the two guidelines by which fixed contracts of
employments can be said NOT to circumvent security of tenure, are
either:
1. The fixed period of employment was knowingly and voluntarily agreed
upon by the parties, without any force, duress or improper pressure being

In the instant case, private respondents were validly terminated by the petitioner when the
latter had to close its business due to financial losses. Following the directives of the
NLRC to give priority in hiring private respondents should it resume its business,
petitioner hired private respondents during their one (1) month dry-run operation.
However, this does not mean that private respondents were deemed to have continued
their regular employment status, which they had enjoyed before their aforementioned
termination due to petitioner's financial losses. As stated by the Labor Arbiter in his
decision:
It should be borne in mind that when complainants were first terminated
as a result of the company's cessation from operation in May, 1986 the
employer-employee relationship between the parties herein was totally
and completely severed. Such being the case, respondent acted well
within its discretion when in rehiring the complainants (herein private
respondents) it made them casual and for a specific period. The
complainants are no better than the new employees of respondent
(petitioner) for the matter of what status or designation to be given them
exclusively rests in the discretion of management. 8
Besides, the previous decision of the public respondent NLRC in Case No. 8-3277-86
finding the termination of private respondents' employment to be valid has long become
final and executory. Public respondent NLRC cannot anymore argue that the temporary
cessation of the petitioner's operation due to financial reverses merely suspended private
respondents' employment. The employee-employer relationship had come to an end
when the employer had closed its business and ceased operations. The hiring of new
employees when it re-opened after three (3) years is valid and to be expected. The prior
employment which was terminated cannot be joined or tacked to the new employment for
purposes of security of tenure.

While it is true that security of tenure is a constitutionally guaranteed right of the

employees, it does not, however, mean perpetual employment for the employee because
our law, while affording protection to the employee, does not authorize oppression or
destruction of an employer. 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. 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 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. 9
Thus, public respondent NLRC had indubitably committed grave abuse of discretion when
it modified the final decision of the NLRC Case No. 8-3277-86 which remain unenforced
as of this date. Private respondents' remedy is to file a motion for execution, if it is still
within the reglementary 5-year period, or to file an action to enforce said decision. (Article
224(a), Labor Code)
WHEREFORE, this petition for certiorari is GRANTED and the questioned of the public
respondent NLRC is hereby SET ASIDE thereby dismissing the complaint against
petitioner.

G.R. No. 119523 October 10, 1997

ISABELO
VIOLETA
and
JOVITO
BALTAZAR, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, Fifth Division, and DASMARIAS
INDUSTRIAL AND STEEL WORKS CORPORATION, respondents.

SO ORDERED.

REGALADO, J.:

Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.

Petitioners Isabelo Violeta and Jovito Baltazar were former employees of private
respondent Dasmarias Industrial and Steelworks Corporation (DISC). Their records of
service and employment, insofar as the same are material to this case, are not in dispute.
Petitioner Violeta worked in Construction and Development Corporation of the Philippines
(CDCP), a sister corporation of private respondent, at its project in CDCP Mines, Basay,
Negros Oriental from December 15, 1980 up to February 15, 1981. Private respondent
then hired him as Erector II at the former's project for Philphos in Isabel, Leyte on
November 10, 1982 until the termination of the project on December 3, 1984. On January
21, 1985, he was reassigned as Erector II for Five Stand TCM Project, with vacation and
sick leaves, and was designated as a regular project employee at private respondent's

project for National Steel Corporation (NSC) in Iligan City. After receiving a salary
adjustment, he was again hired on June 6, 1989 as Handyman for the civil works of a
construction project for NSC. 1 On February 10, 1992, he was appointed for project
employment, again as Handyman, to NSC ETL #3 Civil Works by private respondent. Due
to the completion of the particular item of work he was assigned to, private respondent
terminated the services of petitioner Violeta on March 15, 1992. 2
Petitioner Baltazar started in the employ of CDCP on June 23, 1980. He was hired by
private respondent as Lead Carpenter for project Agua VII on October 1, 1981. Like
petitioner Violeta, he was transferred from one project to another as a regular project
employee. 3 On November 28, 1991, he was hired as Leadman II in ETL #3 Civil Works by
private respondent in its project for NSC, but he was separated from such employment on
December 20, 1991 as a result of the completion of said item of work. 4
Upon their separation, petitioners executed a quitclaim wherein they declared that they
have no claim against private respondent and supposedly discharged private respondent
from any liability arising from their employment. 5
Contending that they are already regular employees who cannot be dismissed on the
ground of completion of the particular project where they are engaged, petitioners filed
two separate complaints for illegal dismissal against private respondent, with a prayer for
reinstatement and back wages plus damages.
Private respondent admitted that it is engaged in the development and construction of
infrastructure projects and maintained that Violeta was hired on June 6, 1989 to March 15,
1992 as Handyman while Baltazar was employed on June 6, 1989 to December 20, 1991
as Leadman II. 6 It argued that both are project employees based on their declaration in
their Appointments for Project Employment that they are employed only for the period and
specific works stated in their respective appointments, in addition to their admission that
they are project employees who are subject to the provisions of Policy Instruction No. 20. 7
Labor Arbiter Guardson A. Siao dismissed the claims of petitioners for lack of merit but
ordered private respondent to grant them separation pay. 8 The labor arbiter concluded
that petitioners are project employees based on their admission that they are regular
project employees. Thus, their employment was deemed coterminous with the project for

which their employer engaged them. Their separation was declared valid and their claims
for reinstatement and back wages were denied. The award of separation pay was based
on the findings of the labor arbiter that it is the policy of private respondent to pay
employees who have rendered at least one year of continuous service.
Petitioners and private respondent duly appealed the ruling of the labor arbiter to
respondent NLRC.
Finding petitioners to be non-project employees in its resolution dated August 17,
1994, 9 the Fifth Division of the NLRC reversed the decision of the labor arbiter and
declared petitioners' dismissal as illegal. Private respondent company was thereafter
ordered to reinstate petitioners to their former positions without loss of seniority rights and
to pay them back wages operative from the date of petitioners' dismissal. In the event that
reinstatement can no longer be made due to any lawful supervening event, the labor
tribunal directed private respondent to further give petitioners the corresponding
separation pay. Private respondent was also required to pay attorney's fees to petitioners.
According to the NLRC, although the appointment contracts of petitioners specified fixed
terms or periods of employment, the fact that they were hired and transferred from one
project to another made both petitioners non-project employees who cannot be
terminated by reason alone of the completion of the project. They were hired not only for
one particular project but different projects, one after the other.
However, on November 15, 1994, 10 the same division of the NLRC reversed itself upon
motion of private respondent and set aside its earlier resolution. Reportedly, a
reexamination of the same evidence before it led the labor court to conclude that the
employment of petitioners in ETL #3 Civil Works was allegedly for a specific or fixed
period thus making petitioners project employees. This time, it held that since the
termination of petitioners' employment was due to the completion of the project,
petitioners are therefore not entitled to separation pay. It ruled that this would hold true
even if petitioners were categorized as regular project employees because their
employment was not permanent but coterminous with the projects to which they were
assigned. No other substantial reason was given for the adjudicative turnabout.

In this petition for certiorari, petitioners contend that public respondent (NLRC) committed
grave abuse of discretion amounting to lack of jurisdiction when it granted the motion for
reconsideration of private respondents in its November 15, 1994 resolution. Such
novatory resolution, petitioners contend, was not only too abbreviated but actually
disregarded applicable laws and jurisprudence governing the characterization of
employees in the construction industry.
We have held that the services of project employees are coterminous with the project and
may be terminated upon the end or completion of that project for which they were hired.
Regular employees, in contrast, are legally entitled to remain in the service of their
employer until their services are terminated by one or another of the recognized modes of
termination of service under the Labor Code. 11
Foremost for our resolution then is the issue of whether petitioners are regular (nonproject) employees or project employees. Upon the resolution of this query rests the
validity of petitioners' dismissal.
The source of the definition of a regular employee vis-a-vis a project employee is found in
Article 280 of the Labor Code which provides:
Art. 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has
beendetermined 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 employee shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in

which he is employed and his employment shall continue while such

activity exists. (Emphases ours).
Article 280 was emplaced in our statute books to prevent the circumvention of the
employee's right to be secure in his tenure by indiscriminately and completely ruling out
all written and oral agreements inconsistent with the concept of regular employment
defined therein. 12 Where an employee has been engaged to perform activities which are
usually necessary or desirable in the usual business of the employer, such employee is
deemed a regular employee and is entitled to security of tenure notwithstanding the
contrary provisions of his contract of employment. 13
As Handyman and Erector II, respectively, petitioners' services are both necessary and
vital to the operation of the business of private respondent. This is not at all traversed, but
is even confirmed by the fact that they were continually and successively assigned to the
different projects of private respondent and its sister company, CDCP.
In order to properly characterize petitioners' employment, we now proceed to ascertain
whether or not their employment falls under the exceptions provided in Article 280 of the
Code.
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. 14 As defined, project employees are those workers hired (1) for a specific
project or undertaking, and (2) the completion or termination of such project or
undertaking has been determined at the time of engagement of the employee. 15
Based on the above criteria, we find petitioners to be regular employees of private
respondent, and not project employees as postulated by respondent NLRC. Petitioners'
dismissal, therefore, could not be justified by the completion of their items of work.
The predetermination of the duration or period of a project employment is important in
resolving whether one is a project employee or not. On this score, the term period has
been defined to be "a 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 or the
period from one fixed date to another fixed date." 16
There is no debate that petitioners were hired for a specific project or undertaking. Their
Appointments for Project Employment clearly state that their employment is for NSC ETL
#3 Civil Works. The fact of the completion of said item of work is also undisputed.
However, the records are barren of any definite period or duration for the expiration of the
assigned items of work of petitioners at the time of their engagement. An examination of
said appointments reveal that the completion or termination of the project for which
petitioners were hired was not determined at the start of their employment. There is no
specific mention of the period or duration when the project will be completed or
terminated. In fact, the lines for "DATE OF COVERAGE" in the appointments (referring to
the particular items of work for which petitioners are engaged) are left blank.
While the word "co-terminus" was adopted in the appointments of petitioners, it cannot
readily be concluded that their employment with private respondent is for a definite
duration, that is, until the completion of their items of work, because there are other words
used in the aforesaid appointments affecting their entitlement to stay in their job. To be
concrete, the pertinent terms of the Appointments For Project Employment of petitioners
are quoted below, thus:
Your herein Appointments will be co-terminus with the need of _________
as it will necessitate personnel in such number and duration contingent
upon the progress accomplishment from time to time. The company shall
determine the personnel and the number as work progresses.
An interpretation of the above provisions is important for the correct labeling of petitioners'
employment with private respondent. Propitiously, this Court has already been confronted
with contracts of employment of the same and exact tenor as above in De Jesus
vs. Philippine National Construction Corp. and National Labor Relations Commission, et
al. 17 The contracts involved in said case also provided as follows:
Your herein Appointment Employment will be co-terminus with the need
of Structures [of North Luzon Expressway (Stage) II] as it will necessitate

personnel in such number and duration contingent upon the progress

accomplishment from time to time. The company shall determine the
personnel and the number as the work progresses.
On such premises, the Court declared:
Without question, the petitioner, a carpenter, performs work "necessary,
or desirable" in the construction business, the corporation's field of
activity. The fact however that he had been involved in project works will
not alter his status because the law requires "specific project or
undertaking the completion or termination of which has been determined
at the time of engagement" in order to make a project employee a true
project employee. . . . we can not say that the petitioner's engagement
has been predetermined because the duration of the work is "contingent
upon the progress accomplishment" and secondly, the company, under
the contract, is free to "determine the personnel and the number as the
work progresses." Clearly, the employment is subject to no term but
rather, a condition, that is, "progress accomplishment." It can not
therefore be said to be definite that will therefore exempt the respondent
company from the effects of Article 280.
Following the rule on precedents, we once again hold that the respective employments of
the present petitioners is not subject to a term but rather to a condition, that is, "progress
accomplishment." As we have stated in De Jesus, it cannot be said that their employment
had been pre-determined because, firstly, the duration of their work is "contingent upon
the progress accomplishment" and, secondly, the contract gives private respondent the
liberty to "determine the personnel and the number as the work progresses." It is
ineluctably not definite so as to exempt private respondent from the strictures and effects
of Article 280.
To add our own observation, the appointments of petitioners herein were not coterminous
with NSC ETL #3 Civil Works but with the "need" for such particular items of work as were
assigned to them, as distinguished from the completion of the project.

With such ambiguous and obscure words and conditions, petitioners' employment was not
co-existent with the duration of their particular work assignments because their employer
could, at any stage of such work, determine whether their services were needed or not.
Their services could then be terminated even before the completion of the phase of work
assigned to them.

Jurisprudence abounds with the consistent rule that the failure of an employer to report to
the nearest Public Employment Office the termination of its workers' services every time a
project or a phase thereof is completedindicates that said workers are not project
employees. 19 In the case at bar, only the last and final termination of petitioners was
reported to the aforementioned labor office.

We find this explication necessary and in accord with the principle that in controversies
between a laborer and his master, doubts reasonably arising from the evidence, or in the
interpretation of agreements and writings should be resolved in the former's favor. 18

Private respondent should have filed as many reports of termination as there were
construction projects actually finished if petitioners were indeed project employees,
considering that petitioners were hired and again rehired for various projects or the
phases of work therein. Its failure to submit reports of termination cannot but sufficiently
convince us further that petitioners are truly regular employees. Just as important, the fact
that petitioners had rendered more than one year of service at the time of their dismissal
overturns private respondent's allegations that petitioners were hired for a specific or a
fixed undertaking for a limited period of time. 20

To be exempted from the presumption of regularity of employment, therefore, the

agreement between a project employee and his employer must strictly conform with the
requirements and conditions provided in Article 280. It is not enough that an employee is
hired for a specific project or phase of work. There must also be a determination of or a
clear agreement on the completion or termination of the project at the time the employee
is engaged if the objective of Article 280 is to be achieved. Since this second requirement
was not met in petitioners' case, they should be considered as regular employees despite
their admissions and declarations that they are project employees made under
circumstances unclear to us.
Parenthetically, it is relevant to observe that the similarities in the stipulations of the
employment/appointment contracts can be explained by the indirect relationship of the
Philippine National Construction Corporation (PNCC) and private respondent. CDCP was
the predecessor of PNCC which, in turn, is an existing sister company of private
respondent. Apparently, private respondent ignored the mistake committed by its said
sister company. Also, if only the NLRC had thoroughly read the De Jesus decision, it
would have discovered that the PNCC also raised as a defense the admission of therein
petitioner De Jesus that he was a project employee, but to no avail.
There is another reason why we should rule in favor of petitioners. Nowhere in the
records is there any showing that private respondent reported the completion of its
projects and the dismissal of petitioners in its finished projects to the nearest Public
Employment Office in compliance with Policy Instruction No. 20 of then Labor Secretary
Bias F. Ople.

Even if we disregard the stints of petitioners with CDCP, it cannot be disclaimed that they
have rendered long years of service in private respondent's business affairs. Beginning
his service in 1982, petitioner Violeta served in the employ of private respondent up to
1992. In the case of petitioner Baltazar, he worked for private respondent from 1981 to
1991. Private respondent repeatedly appointed petitioners to new projects after the
completion of every project or item of work in which they were previously employed, each
over a span of about 10 years.
Public respondent contends that the gaps in the employment of petitioners, consisting of
the periods in between the completion of one project and the engagement of petitioners in
the next, show that they could not have been regular employees under the control of
private respondent, and that petitioners could have applied for or accepted employment
from other employers during those periods. This is puerile and speculative.
In the first place, Article 280 of the Labor Code contemplates both continuous and broken
services. In the second place, there is absolutely no evidence of petitioners having
applied for or accepted such other or outside employment during the brief interregna in
the continuity of their work with private respondent. Their undertaking in the "Employment
Terms and Conditions" of their service to private respondent bound them "to work in such
place of work or project as DISC may assign or transfer" them, with the further agreement

that they would so "work during rest day, holidays, night time and night shift or during
emergencies. 21
These are self-evident refutations of private respondent's theory and further bolster
petitioners' position that they were not mere employees engaged for a single or particular
project. They were thus removed from the scope of project employment and considered
as regular employees since their employment as so-called project employees was
extended long after the termination of different projects. 22
The fact that petitioners signed quitclaims will not bar them from pursuing their claims
against private respondent because quitclaims executed by laborers are frowned upon as
contrary to public policy, and are ineffective to bar claims for the full measure of the
workers' legal rights. 23 The so-called quitclaims signed by petitioners were actuallypro
forma provisions printed in the clearance certificate they had to get from private
respondent. These were not in the nature of a compromise but a compulsory general
release required from them, for which no consideration was either given or even stated.
In answer to private respondent's reliance on Department of Labor and Employment
(DOLE) Order No. 19, Series of 1993, which took effect on April 1, 1993, we have ruled
in Samson vs. National Labor Relations Commission, et al. 24 that said administrative
order does not have retroactive effect. Since the termination of petitioners' services and
the filing of their complaints took place long before the effectivity of the said regulation, it
cannot be applied in favor of private respondent.
Besides, as expounded earlier, contrary to private respondent's insistence, the following
badges of project employment are lacking in this particular case, viz.: (1) the duration of
the specific/identified undertaking for which the worker is engaged is reasonably
determinable, and (2) such duration, as well as the specific work/service to be performed,
is defined in an employment agreement and made clear to the employee at the time of
hiring. Hence, even assuming for the moment that DOLE Order No. 19 is effectual in the
case at bar, private respondent cannot successfully invoke the Order in its favor because
the absence of the above indicia persuades us all the more that petitioners are really
regular employees of private respondent.

WHEREFORE, the instant petition for certiorari is GRANTED. The challenged resolution
of the Fifth Division of respondent National Labor Relations Commission dated November
15, 1994 in NLRC CA No. M-001233 is REVERSED and SET ASIDE, and its earlier
resolution therein dated August 17, 1994 is hereby REINSTATED.
SO ORDERED.
Puno, Mendoza and Torres, Jr., JJ., concur.

On 20 August 1985, private respondents Andres Paguio, Pablo Canale, Ruel Pangan,
Aurelio Paguio, Rolando Trinidad, Romeo Tapang and Carlos Maliwat (hereinafter
referred to as respondents) filed a Petition4 with the SSC for SSS coverage and
contributions against petitioner Reynaldo Chua, owner of Prime Mover Construction
Development, claiming that they were all regular employees of the petitioner in his
construction business.5
Private respondents claimed that they were assigned by petitioner in his various
construction projects continuously in the following capacity, since the period indicated,
and with the corresponding basic salaries,6 to wit:

G.R. No. 125837

October 6, 2004

REYNALDO CANO CHUA, doing business under the name & style PRIME MOVER
CONSTRUCTION
DEVELOPMENT, petitioner,
vs.
COURT OF APPEALS, SOCIAL SECURITY COMMISSION, SOCIAL SECURITY
SYSTEM, ANDRES PAGUIO, PABLO CANALE, RUEL PANGAN, AURELIO PAGUIO,
ROLANDO TRINIDAD, ROMEO TAPANG and CARLOS MALIWAT, respondents.
DECISION
TINGA, J.:
This is a petition for review of the Decision1 of the Court of Appeals in CA-G.R. CV No.
38269 dated 06 March 1996, and its Resolution dated 30 July 1996 denying
petitioners Motion for Reconsideration,2 affirming the Order of the Social Security
Commission (SSC) dated 1 February 1995 3 which held that private respondents were
regular employees of the petitioner and ordered petitioner to pay the Social Security
System (SSS) for its unpaid contributions, as well as penalty for the delayed remittance
thereof.

Andres Paguio

Carpenter

1977

P 42/day

Pablo Canale

Mason

1977

42/day

Ruel Pangan

Mason

1979

39/day

Aurelio Paguio

Fine grading

1979

42/day

Romeo Tapang

Fine grading

1979

42/day

Rolando Trinidad

Carpenter

1983 (Jan.)

39/day

Carlos Maliwat

Mason

1977

42/day

Private respondents alleged that petitioner dismissed all of them without justifiable
grounds and without notice to them and to the then Ministry of Labor and Employment.
They further alleged that petitioner did not report them to the SSS for compulsory
coverage in flagrant violation of the Social Security Act. 7
In his Answer,8 petitioner claimed that private respondents had no cause of action against
him, and assuming there was any, the same was barred by prescription and laches. In
addition, he claimed that private respondents were not regular employees, but project
employees whose work had been fixed for a specific project or undertaking the
completion of which was determined at the time of their engagement. This being the case,
he concluded that said employees were not entitled to coverage under the Social Security
Act.9
Meanwhile, the SSS filed a Petition in Intervention10 alleging that it has an interest in the
petition filed by private respondents as it is charged with the implementation and
enforcement of the provisions of the Social Security Act. The SSS stated that it is the

mandatory obligation of every employer to report its employees to the SSS for coverage
and to remit the required contribution, including the penalty imposed for late premium
remittances.
On 01 February 1995, the SSC issued its Order11 which ruled in favor of private
respondents. The SSC, relying on NLRC Case No. RAB-III-8-2373-85, 12 declared private
respondents to be petitioners regular employees. 13 It ordered petitioner to pay the SSS
the unpaid SS/EC and Medicare contributions plus penalty for the delayed remittance
thereof, without prejudice to any other penalties which may have accrued. 14 The SSC
denied theMotion for Reconsideration15 of petitioner for lack of merit.16
Petitioner elevated the matter to the Court of Appeals via a Petition for Review.17 He
claimed that private respondents were project employees, whose periods of employment
were terminated upon completion of the project. Thus, he claimed, no employer-employee
relation existed between the parties. 18 There being no employer-employee relationship,
private respondents are not entitled to coverage under the Social Security Act. 19In
addition, petitioner claimed that private respondents length of service did not change their
status from project to regular employees.20
Moreover, granting that private respondents were entitled to coverage under the Act,
petitioner claimed that the SSC erred in imposing penalties since his failure to include
private respondents under SSS coverage was neither willful nor deliberate, but due to the
honest belief that project employees are not regular employees. 21 Likewise, he claimed
that the SSC erred in ordering payment of contributions and penalties even for long
periods between projects when private respondents were not working. 22
Petitioner also questioned the failure to apply the rules on prescription of actions and of
laches, claiming that the case, being one for the injury to the rights of the private
respondents, should have been filed within four (4) years from the time their cause of
action accrued, or from the time they were hired as project employees. He added that
private respondents "went into a long swoon, folded their arms and closed their
eyes"23 and filed their claim only in 1985, or six (6) years or eight (8) years after they were
taken in by petitioner.24
In resolving the petition, the Court of Appeals synthesized the issues in the petition, to wit:
(1) whether private respondents were regular employees of petitioner, and whether their
causes of action as such are barred by prescription or laches; (2) if so, whether petitioner
is now liable to pay the SSS contributions and penalties during the period of
employment.25

The Court of Appeals, citing Article 280 of the Labor Code, 26 declared that private
respondents were all regular employees of the petitioner in relation to certain activities
since they all worked either as masons, carpenters and fine graders in petitioners various
construction projects for at least one year, and that their work was necessary and
desirable to petitioners business which involved the construction of roads and bridges. 27 It
cited the case ofMehitabel Furniture Company, Inc. v. NLRC,28 particularly the ruling
therein which states:
By petitioners own admission, the private respondents have been hired to work
on certain special orders that as a matter of business policy it cannot decline.
These projects are necessary or desirable in its usual business or trade,
otherwise they would not have accepted . Significantly, such special orders are
not really seasonal but more or less regular, requiring the virtually continuous
services of the "temporary workers." The NLRC also correctly observed that "if we
were to accept respondents theory, it would have no regular workers because all
of its orders would be special undertakings or projects." The petitioner could then
hire all its workers on a contract basis only and prevent them from attaining
permanent status.
Furthermore, the NLRC has determined that the private respondents have
worked for more than one year in the so-called "special projects" of the petitioner
and so fall under the second condition specified in the above-quoted provision
(Article 280, Labor Code).29
The Court of Appeals rejected the claim of prescription, stating that the filing of private
respondents claims was well within the twenty (20)-year period provided by the Social
Security Act.30 It found that the principle of laches could not also apply to the instant case
since delay could not be attributed to private respondents, having filed the case within the
prescriptive period, and that there was no evidence that petitioner lacked knowledge that
private respondents would assert their rights.31
Petitioner filed a Motion for Reconsideration,32 claiming that the Court of Appeals
overlooked (1) the doctrine that length of service of a project employee is not the
controlling test of employment tenure, and (2) petitioners failure to place private
respondents under SSS coverage was in good faith. The motion was denied for lack of
merit.33
In the present Petition for Review, petitioner again insists that private respondents were
not regular, but project, employees and thus not subject to SSS coverage. In addition,

petitioner claims that assuming private respondents were subject to SSS coverage, their
petition was barred by prescription and laches. Moreover, petitioner invokes the defense
of good faith, or his honest belief that project employees are not regular employees under
Article 280 of the Labor Code.lawphil.net
Petitioners arguments are mere reiterations of his arguments submitted before the SSC
and the Court of Appeals. More importantly, petitioner wants this Court to review factual
questions already passed upon by the SSC and the Court of Appeals which are not
cognizable by a petition for review under Rule 45. Well-entrenched is the rule that the
Supreme Courts jurisdiction in a petition for review is limited to reviewing or revising
errors of law allegedly committed by the appellate court, the findings of fact being
generally conclusive on the Court and it is not for the Court to weigh evidence all over
again.34
Stripped of the lengthy, if not repetitive, disquisition of the private parties in the case, and
also of the public respondents, on the nature of private respondents employment, the
controversy boils down to one issue: the entitlement of private respondents to compulsory
SSS coverage.
The Social Security Act was enacted pursuant to the policy of the government "to develop,
establish gradually and perfect a social security system which shall be suitable to the
needs of the laborers throughout the Philippines, and shall provide protection against the
hazards of disability, sickness, old age and death." 35 It provides for compulsory coverage
of all employees not over sixty years of age and their employers. 36
Well-settled is the rule that the mandatory coverage of Republic Act No. 1161, as
amended, is premised on the existence of an employer-employee relationship, the
essential elements of which are: (a) selection and engagement of the employee; (b)
payment of wages; (c) the power of dismissal; and (d) the power of control with regard to
the means and methods by which the work is to be accomplished, with the power of
control being the most determinative factor.37
There is no dispute that private respondents were employees of petitioner. Petitioner
himself admitted that they worked in his construction projects, 38 although the period of
their employment was allegedly co-terminus with their phase of work. 39 Even without such
admission from petitioner, the existence of an employer-employee relationship between
the parties can easily be determined by the application of the "control test," 40 the elements
of which are enumerated above. It is clear that private respondents are employees of
petitioner, the latter having control over the results of the work done, as well as the means

and methods by which the same were accomplished. Suffice it to say that regardless of
the nature of their employment, whether it is regular or project, private respondents are
subject of the compulsory coverage under the SSS Law, their employment not falling
under the exceptions provided by the law.41 This rule is in accord with the Courts ruling
in Luzon Stevedoring Corp. v. SSS 42 to the effect that all employees, regardless of tenure,
would qualify for compulsory membership in the SSS, except those classes of employees
contemplated in Section 8(j) of the Social Security Act. 43
This Court also finds no reason to deviate from the finding of the Court of Appeals
regarding the nature of employment of private respondents. Despite the insistence of
petitioner that they were project employees, the facts show that as masons, carpenters
and fine graders in petitioners various construction projects, they performed work which
was usually necessary and desirable to petitioners business which involves construction
of roads and bridges. In Violeta v. NLRC,44 this Court ruled that to be exempted from the
presumption of regularity of employment, the agreement between a project employee and
his employer must strictly conform to the requirements and conditions under Article 280 of
the Labor Code. It is not enough that an employee is hired for a specific project or phase
of work. There must also be a determination of, or a clear agreement on, the completion
or termination of the project at the time the employee was engaged if the objectives of
Article 280 are to be achieved.45 This second requirement was not met in this case.
Moreover, while it may be true that private respondents were initially hired for specific
projects or undertakings, the repeated re-hiring and continuing need for their services
over a long span of timethe shortest being two years and the longest being eighthave
undeniably made them regular employees. 46 This Court has held that an employment
ceases to be co-terminus with specific projects when the employee is continuously rehired
due to the demands of the employers business and re-engaged for many more projects
without interruption.47 The Court likewise takes note of the fact that, as cited by the SSC,
even the National Labor Relations Commission in a labor case involving the same parties,
found that private respondents were regular employees of the petitioner.48
Another cogent factor militates against the allegations of the petitioner. In the proceedings
before the SSC and the Court of Appeals, petitioner was unable to show that private
respondents were appraised of the project nature of their employment, the specific
projects themselves or any phase thereof undertaken by petitioner and for which private
respondents were hired. He failed to show any document such as private respondents
employment contracts and employment records that would indicate the dates of hiring and
termination in relation to the particular construction project or phases in which they were
employed.49 Moreover, it is peculiar that petitioner did not show proof that he submitted
reports of termination after the completion of his construction projects, considering that he

alleges that private respondents were hired and rehired for various projects or phases of
work therein.
Anent the issue of prescription, this Court rules that private respondents right to file their
claim had not yet prescribed at the time of the filing of their petition, considering that a
mere eight (8) years had passed from the time delinquency was discovered or the proper
assessment was made. Republic Act No. 1161, as amended, prescribes a period of
twenty (20) years, from the time the delinquency is known or assessment is made by the
SSS, within which to file a claim for non-remittance against employers. 50
Likewise, this Court is in full accord with the findings of the Court of Appeals that private
respondents are not guilty of laches. The principle of laches or "stale demands" ordains
that the failure or neglect, for an unreasonable and unexplained length of time, to do that
which by exercising due diligence could or should have been done earlier, or the
negligence or omission to assert a right within a reasonable time, warrants a presumption
that the party entitled to assert it either has abandoned it or declined to assert it. 51 In the
instant case, this Court finds no proof that private respondents had failed or neglected to
assert their right, considering that they filed their claim within the period prescribed by
law.1avvphi1.net
This Court finds no merit in petitioners protestations of good faith. In United Christian
Missionary Society v. Social Security Commission,52 this Court ruled that good faith or bad
faith is irrelevant for purposes of assessment and collection of the penalty for delayed
remittance of premiums, since the law makes no distinction between an employer who
professes good reasons for delaying the remittance of premiums and another who
deliberately disregards the legal duty imposed upon him to make such remittance. 53 For
the same reasons, petitioner cannot now invoke the defense of good faith.
WHEREFORE, the Petition is DENIED. The Decision and Resolution of the Court of
Appeals promulgated on 6 March 1996 and 30 July 1996 respectively, are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Puno, Austria-Martinez, Callejo, Sr.*, and Chico-Nazario*, JJ., concur.

Individual complainants are employed by the respondent in connection

with particular construction projects and they are as follows:
1. Jesus N. Miraballes Project Assigned Period Covered
L. Towers 4/23/79-2/26/80
Nat'l Bookstore 2/26/80-8/28/80
G.R. No. 82973 September 15, 1989
MARIO CARTAGENAS, JESUS N. MIRABALLES, VICTOR C. MONSOD and VICENTE
BARROA, petitioners,
vs.
ROMAGO ELECTRIC COMPANY, INC., NATIONAL LABOR RELATIONS
COMMISSION (Fifth Division),respondents.

PNRC-MHQ Bldg. 8/29/80-9/09/80

A. Payumo's Res. 9/10/80
State Center 3/05/81-7/13/81
FEBTC Bldg. 7/14/81-9/21/81

Isidro G. Pasana for petitioners.

SMC Complex 9/22/81-9/10/84

Constantino B. de Jesus & Associates for private respondent.

PNB Finance Complex 9/11/84-7/12/86

(Annexes 1 to 25, respondent's Position Paper)

GRINO-AQUIO, J.:

2. Victor C. Monsod

he issue in this case is whether the petitioners are project employees of the private
respondent Romago Electric Company, Inc., as found by the National Labor Relations
Commission, or regular employees as found by the Labor Arbiter.

Project Assigned Period Covered

The facts are recited in the decision of the NLRC as follows:

Manila Hotel 2/03/80-7/19/81

Respondent Romago is a general contractor engaged in contracting and

sub-contracting of specific building construction projects or undertaking
such as electrical, mechanical and civil engineering aspects in the repair
of buildings and from other kindred services.

MMRH Project 4/13/76-2/02/80

PNB Project 7/20/81-7/16/84

Manila Hotel 7/17/84-7/02/84
PNB Finance Center 10/3/84-7/12/86

(Annexes 30 to 41, Ibid)

3. Vicente Barroa
Project Assigned Period Covered
SMC Hoc. Project 7/5/82-1/21/85

2. Barroa

August 11/86

3. Cartagenas

August 4/86

PNB Finance Complex 1/22/85-7/12/86

(Annexes 42 to 47, Ibid)
4. Mario Cartagenas
(Annexes 26 to 29-B; '39-4l'; 48 to 51 -B; '55 to 58-A', Ibid)
Project Assigned Period Covered
In hiring the herein complainants to be assigned to a particular project
they have to fill up an employment application form and are subjected to
a pre-hiring examination. If evaluated to be qualified they sign at the end
portion of their employment application form that:

PNB Finance Complex 3/26/82-7/12/86

(Annexes 52 to 54, Ibid)

AGREEMENT

Effective July 12,1986, individual complainants and Lawrence Deguit

were temporarily laid-off by virtue of a memorandum issued by the
respondent. In said memorandum they were also informed that a meeting
regarding the resumption of operation will be held on July 16, 1986 and
that they will be notified as to when they will resume work.
On July 28, 1986, complainants filed the instant case for illegal dismissal
but before the respondent could receive a copy of the complaint and the
notification and summons issued by the NLRC National Capital Region
(actually received only on August 22, 1986, page 4, records) individual
complainants re-applied with the respondent and were assigned to work
with its project at Robinson-EDSA, specifically on the following dates, to
wit:

1. Mirabelles and Monsod

August 2/86

I hereby agree to the foregoing conditions and accept my employment for

a fixed period and from the above mentioned Project/Assignment only.
The conditions of employment to which the complainant agreed are
mentioned in the right upper portion of the same page of said application
form, an example of which reads:

Assigned to

FEBTC
Project

Position

Electrician

G.P.

FORMOSO

Engr. C.A. Castro

Project In-Charge
FEFTC
Effectivity

Salary

7-14-81

Name of Project
The bearer, Mr. Jesus N. Miraballes will work under you as electrician
effective 14 July 81. His employment will terminate upon
completion/stoppage of the project or terminated earlier for cause.

P18.50/day & allowance

Signed
Conditions

Hired for above project only

GUDIOSO PLATA
Chief Engineer

Approved:

Signed

CONFORME:
SGD. JESUS N. MIRABALLES

Personnel Manager
(Assignment slip of Jesus N. Miraballes, Annex 17, Ibid.)
7/14/81
xxx xxx xxx
Date
(Employment Application Form of MIRABALLES JESUS NIEVA dated
July 14,1981, Annex 16; 16-A and 16-B, Ibid)
Thereafter the hired employee is given by the respondent an assignment
slip, an example of which reads:
ASSIGNMENT SLIP
DATE: July 14, 1981

... Respondent introduced documentary exhibits that the complainant

have invariably been issued appointment from project to projects and
were issued notice of temporary lay-off when the PNB Finance Center
project was suspended due to lack of funds and that when work was
available particularly respondent's project at Robinson-EDSA they were
rehired and assigned to this project. (pp. 16-19; 21-22, Rollo.)
The NLRC held that the complainants were project employees because their
appointments were "co-terminus with the phase or item of work assigned to them in said
project," It held further:

The fact that the complainants worked for the respondent under different
project employment contracts for so many years could not be made a
basis to consider them as regular employees for they remain project
employees regardless of the number of projects in which they have
worked. (p. 22, Rollo.)
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
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 (Emphasis supplied). (p. 46, Rollo.)
As an electrical contractor, the private respondent depends for its business on the
contracts it is able to obtain from real estate developers and builders of buildings. Since
its work depends on the availability of such contracts or "projects," necessarily the
duration of the employment of its work force is not permanent but co-terminus with the
projects to which they are assigned and from whose payrolls they are paid. It would be
extremely burdensome for their employer who, like them, depends on the availability of
projects, if it would have to carry them as permanent employees and pay them wages
even if there are no projects for them to work on. We hold, therefore, that the NLRC did
not abuse its discretion in finding, based on substantial evidence in the records, that the
petitioners are only project workers of the private respondent.
This case is similar to Sandoval Shipyards, Inc. vs. NLRC, 136 SCRA 675 (1985), where
we held:

We feel that there is merit in the contention of the applicant corporation.

To our mind, the employment of the employees concerned were fixed for
a specific project or undertaking. For the nature of the business the
corporation is engaged into is one which will not allow it to employ
workers for an indefinite period. "It is significant to note that the
corporation does not construct vessels for sale or otherwise which will
demand continuous productions of ships and will need permanent or
regular workers. It merely accepts contracts for ship-building or for repair
of vessels from third parties and, only, on occasion 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.
The completion of their work or project automatically terminates their
employment, in which case, the employer is, under the law, only obliged
to render a report on the termination of the employment. (P. 48, Rollo.)
Petitioners' invocation of the resolution of this Court in Romago Electric Company, Inc, vs.
Romago Electric United Workers Union-Christian Labor Organization, (REWU-CLOP), et
al., G.R. No. 79774, February 1, 1988, where this Court dismissed the petition, is not well
taken. As pointed out by the public respondent, the issue in that case was whether the
members of the union may properly participate in the holding of a certification election.
Since the petitioners in their complaint for illegal dismissal dated July 28, 1986 (Annex A
of petition) averred that they do not belong to any union, the ruling in Romago vs, REWUCLOP may not apply to them. In their Reply to the public respondents' Comment in this
case, they disclosed that they are members and officers of a new union which they
organized on March 13, 1988 (pp. 62-63, Rollo). That supervening fact, however, has no
relevance to this case.
We find no reason to depart from the well-settled rule that findings of fact of labor officials
are generally conclusive and binding upon this Court when supported by substantial
evidence, as in this case (Edi-Staff Builders International, Inc. vs, Leogardo, Jr., 152
SCRA 453; Asiaworld Publishing House, Inc. vs. Ople, 152 SCRA 219; National
Federation of Labor Union vs. Ople, 143 SCRA 124; Dangan vs. NLRC, 127 SCRA 706;
Special Events & Central Shipping Office Workers Union vs. San Miguel Corp., 122 SCRA
557; Mamerto vs. Inciong, 118 SCRA 265; Phil. Labor Alliance Council vs. Bureau of
Labor Relations, 75 SCRA 162).
WHEREFORE, the petition for certiorari is dismissed for lack of merit. No costs.

SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

RICARDO
vs.
NATIONAL LABOR
INC., respondents.

FERNANDEZ, petitioner,
RELATIONS

COMMISSION

and

D.

M.

CONSUNJI,

Gaston V. Taquio for petitioner.

Marcos S. Pagaspas for private respondent.

NOCON, J.:
Forming the crux of the matter in this petition for certiorari is the question of whether or
not the National Labor Relations Commission acted with grave abuse of discretion in
reversing the Labor Arbiter's decision by dismissing the complaints for illegal dismissal,
one of which is petitioner's, on the finding that they were project employees.
Petitioner was hired as a laborer at the D.M. Consunji, Inc., a construction firm, on
November 5, 1974. He became a skilled welder and worked for private respondent until
March 23, 1986 when his employment was terminated on the ground that the project
petitioner had been assigned to was already completed and there was no more work for
him to do.
Skeptic of private respondent's reason, petitioner brought his plight before the Labor
Arbiter who consolidated the same with three (3) other separate complaints for illegal
dismissal and various money claims against private respondent. After filing their
respective position papers and other documents pertinent to their causes/defenses, the
parties agreed to submit the case for decision based on record.
On May 12, 1988, Labor Arbiter Fernando V. Cinco rendered a decision, finding that
complainants worked continuously in various projects ranging from five (5) to twenty (20)
years and belonged to a work pool, the dispositive portion of which states as follows:
G.R. No. 106090 February 28, 1994

WHEREFORE, premises considered, the terminations by respondent of

herein complainants are hereby declared illegal. Consequently,
respondent is ordered to reinstate the complainants, who have not yet
reached the retirement age, to their former positions plus backwages of
one (1) year.
Anent complainants who have already reach the retirement age of sixty
(60) years as of the date of this decision, respondent is thereby ordered
to pay said complainants their retirement/separation benefits equivalent
to one half (1/2) month salary for every year of service, a fraction of at
least six (6) months being considered as one (1) whole year.
Moreover, respondent is ordered to pay all complainants their service
incentive leave for the past three (3) years; and to pay complainants
Ricardo Fernandez, Gaudencio Merhan and Rolando Serona their 13th
month pay likewise for the past three (3) years.
The complaints of Amador Borromeo, Jesus Espiritu and Ramon Celestial
are hereby dismissed in view of their receipt of Separation pay and their
execution of quitclaims in favor of herein respondent.
The other claims are likewise dismissed for lack of merit.
SO ORDERED.
Metro Manila, Philippines. 12 May 1988. 1
Private respondent questioned on appeal the aforesaid decision of the Labor Arbiter on
the ground that the complainants were all project employees who were hired on a projectto-project basis, depending on the availability of projects that the former was able to close
with its clients. Respondent pointed to the gaps in complainants' respective employment
histories to show that they were indeed hired on an "off-and-on" basis.
In view of the lack of evidence on record to prove the continuous employment of
complainants-appellees, and that on the contrary, what was proven was the intermittent

nature of their work as shown by the different project contracts, the respondent
Commission concluded that complainants-appellees were project employees. The
dispositive portion of the decision dated September 29, 1989 of respondent Commission
reads:
WHEREFORE, the decision of the Labor Arbiter is hereby set aside and a
new one entered dismissing the complaints filed by complainantsappellees for lack of merit. 2
From said decision, the complainants-appellees interposed a motion for reconsideration
which was denied for lack of merit on July 19, 1991. Respondent Commission affirmed its
finding that complainants-appellees were project employees. As such, the nature of their
employment did not change by the number of projects in which they have rendered
service. Respondent Commission also noted that the motion for reconsideration was filed
only on January 29, 1990 which was beyond the ten-day reglementary period from date of
receipt of the decision on November 13, 1989.
Without any mention of the denial of said motion for reconsideration, petitioner alone
comes before this Court on a petition filed on July 21, 1992 and assails the decision dated
September 29, 1989 of respondent Commission contending that it is more in keeping with
the intent and spirit of the law to consider him and the thirteen (13) other complainants in
the consolidated cases as regular employees.
At the outset, it is obvious that the petition was not filed within a reasonable time from
receipt of the questioned decision on November 13, 1989 as the petition was filed only on
July 21, 1992. Neither does the filing of the petition appear to be reasonable from the date
of receipt of the denial of the motion for reconsideration on August 2, 1991. Reckoned
from this later date, petitioner waited for almost one year before he availed of this
extraordinary remedy of certiorari. We have consistently stated that "the yardstick to
measure the timeliness of a petition for certiorari is the reasonableness of the duration of
time that had expired from the commission of the acts complained of up to the institution
of the proceedings to annul the same." 3 Without doubt, petitioner's negligence or
indifference for such a long period of time has in the meantime rendered the questioned
decision final and no longer assailable.

Even if we were to dispense with the requirement that the petition should be filed within a
reasonable time, the petition would still have to be dismissed on the merits. Private
respondent presented material documents showing that petitioner was hired as a project
employee with the specific dates of hiring, the duration of hiring, the dates of his lay-offs,
including the lay-off reports and the termination reports submitted to the then Ministry of
Labor and Employment. Such data covered the period from November 5, 1974 to March
23, 1986.
Inasmuch as the documentary evidence clearly showed gaps of a month or months
between the hiring of petitioner in the numerous projects wherein he was assigned, the
ineluctable conclusion is that petitioner has not continuously worked with private
respondent but only intermittently as he was hired solely for specific projects. As such, he
is governed by Policy Instruction No. 20, the pertinent portions of which read as follows:
Generally, there are two types of employees in the construction industry,
namely 1) Project Employees and 2) Non-project Employees.
Project employees are those employed in connection with a particular
construction project. Non-project employees are those employed by a
construction company without reference to a particular project.
Project employees are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of projects
in which they have been employed by a particular construction company.
Petitioner cites Article 280 of the Labor Code as legal basis for the decision of the Labor
Arbiter in his favor. The text of Article 280 states 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
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.
Petitioner claims that the above-quoted proviso in Article 280 of the Labor Code supports
his claim that he should be regarded as a regular employee.
We disagree. The proviso in the second paragraph of Article 280 of the Labor Code has
recently been explained in Mercado v. NLRC, 4 where it was held that said proviso deems
as regular employees only those "casual" employees who have rendered at least one
year of service regardless of the fact that such service may be continuous or broken. It is
not applicable to "project" employees, who are specifically excepted therefrom. Thus, the
Court therein said:
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. (Statutory Construction by Ruben
Agpalo, 1986 ed., p. 173). 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. (Chinese Flour Importers Association v. Price
Stabilization Board, 89 Phil. 469 (1951); Arenas v. City of San Carlos,
G.R. No. 24024, April 5, 1978, 82 SCRA 318 (1978). The only exception
to the 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.

(Commissioner of Internal Revenue v. Filipinas Compania de Seguros,

107 Phil. 1055 (1960)

Project employees are not entitled to termination pay if they are

terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of projects
in which they have been employed by a particular construction company.
Moreover, the company is not required to obtain a clearance from the
Secretary of Labor in connection with such termination. What is required
of the company is a report to the nearest Public Employment Office for
statistical purposes.

Indeed, a careful reading of the proviso readily discloses that the same relates to
employment where the employee is engaged to perform activities that are usually
necessary or desirable in the usual business or trade of the employer but hastens to
qualify that project employment is specifically exempted therefrom.
Finally, petitioner relies on Policy Instruction No. 20 which was issued by then Secretary
Blas F. Ople to stabilize employer-employee relations in the construction industry to
support his contention that workers in the construction industry may now be considered
regular employees after their long years of service with private respondent. The pertinent
provision of Policy Instruction No. 20 reads:
Members of a work pool from which a construction company draws its
project employees, if considered employees of the construction company
while in the work pool, are non-project employees or employees for an
indefinite period. If they are employed in a particular project, the
completion of the project or of any phase thereof will not mean severance
of employer-employee relationship.
Respondent Commission correctly observed in its decision that complainants, one of
whom petitioner, failed to consider the requirement in Policy Instruction No. 20 that to
qualify as member of a work pool, the worker must still be considered an employee of the
construction company while in the work pool. In other words, there must be proof to the
effect that petitioner was under an obligation to be always available on call of private
respondent and that he was not free to offer his services to other employees.
Unfortunately, petitioner miserably failed to introduce any evidence of such nature during
the times when there were no project.
Noteworthy in this case is the fact that herein private respondent's lay-off reports and the
termination reports were duly submitted to the then Ministry of Labor and Employment
everytime a project was completed in accordance with Policy Instruction No. 20, which
provides:

The presence of this factor makes this case different from the cases decided by the Court
where the employees were deemed regular employees. The cases of Ochoco v. National
Labor Relations Commission, 5 Philippine National Construction Corporation v. National
Labor
Relations
Commission, 6 Magante
v.
National
Labor
Relations
7
Commission, and Philippine National Construction Corporation v. National Labor
Relations, et al., 8 uniformly held that the failure of the employer to report to the nearest
employment office the termination of workers everytime a project is completed proves that
the employees are not project employees. Contrariwise, the faithful and regular effort of
private respondent in reporting every completion of its project and submitting the lay-off
list of its employees proves the nature of employment of the workers involved therein as
project employees. Given this added circumstance behind petitioner's employment, it is
clear that he does not belong to the work pool from which the private respondent would
draw workers for assignment to other projects at its discretion.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED in view of the
foregoing reasons.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.

G.R. No. 109902 August 2, 1994

ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others, namely:
ENGR. ALAN G. BARINQUE, ENGR. DARRELL LEE ELTAGONDE, EDUARD H.
FOOKSON, JR., ROMEO R. SARONA, RUSSELL GACUS, JERRY BONTILAO,
EUSEBIO MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR S.
BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B. DANDASAN, and GERRY I.
FETALVERO,petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL
CORPORATION (NSC), respondents.
Leonard U. Sawal for petitioners.
Saturnino Mejorada for private respondent.
FELICIANO, J.:

In this Petition for Certiorari, petitioners assail the Resolution of the National Labor
Relations Commission ("NLRC") dated 8 January 1993 which declared petitioners to be
project employees of private respondent National Steel Corporation ("NSC"), and the
NLRC's subsequent Resolution of 15 February 1993, denying petitioners' motion for
reconsideration.
Petitioners plead that they had been employed by respondent NSC in connection with its
Five Year Expansion Program (FAYEP I & II) 1 for varying lengths of time when they were
separated from NSC's service:
Employee Date Nature of Separated
Employed Employment
1.
Alan
Barinque
5-14-82
Engineer
1
8-31-91
2.
Jerry
Bontilao
8-05-85
Engineer
2
6-30-92
3.
Edgar
Bontuyan
11-03-82
Chairman
to
present
4.
Osias
Dandasan
9-21-82
Utilityman
1991
5.
Leonido
Echavez
6-16-82
Eng.
Assistant
6-30-92
6.
Darrell
Eltagonde
5-20-85
Engineer
1
8-31-91
7.
Gerry
Fetalvero
4-08-85
Mat.
Expediter
regularized
8.
Eduard
Fookson
9-20-84
Eng.
Assistant
8-31-91
9.
Russell
Gacus
1-30-85
Engineer
1
6-30-92
10.
Jose
Garguena
3-02-81
Warehouseman
to
present
11.
Eusebio
Mejos
11-17-82
Survey
Aide
8-31-91
12.
Bonifacio
Mejos
11-17-82
Surv.
Party
Head
1992
13. Romeo Sarona 2-26-83 Machine Operator 8-31-91 2
On 5 July 1990, petitioners filed separate complaints for unfair labor practice,
regularization and monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII,
Iligan City.
The complaints were consolidated and after hearing, the Labor Arbiter in a Decision dated
7 June 1991, declared petitioners "regular project employees who shall continue their
employment as such for as long as such [project] activity exists," but entitled to the salary

of a regular employee pursuant to the provisions in the collective bargaining agreement. It

also ordered payment of salary differentials. 3
Both parties appealed to the NLRC from that decision. Petitioners argued that they were
regular, not project, employees. Private respondent, on the other hand, claimed that
petitioners are project employees as they were employed to undertake a specific project
NSC's Five Year Expansion Program (FAYEP I & II).
The NLRC in its questioned resolutions modified the Labor Arbiter's decision. It affirmed
the Labor Arbiter's holding that petitioners were project employees since they were hired
to perform work in a specific undertaking the Five Years Expansion Program, the
completion of which had been determined at the time of their engagement and which
operation was not directly related to the business of steel manufacturing. The NLRC,
however, set aside the award to petitioners of the same benefits enjoyed
by regular employees for lack of legal and factual basis.
Deliberating on the present Petition for Certiorari, the Court considers that petitioners
have failed to show any grave abuse of discretion or any act without or in excess of
jurisdiction on the part of the NLRC in rendering its questioned resolutions of 8 January
1993 and 15 February 1993.
The law on the matter is Article 280 of the Labor Code which reads in full:
Art. 280. Regular and Casual Employment The provisions of the
written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, and 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 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. (Emphasis supplied)

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.

Petitioners argue that they are "regular" employees of NSC because: (i) their jobs are
"necessary, desirable and work-related to private respondent's main business, steelmaking"; and (ii) they have rendered service for six (6) or more years to private
respondent NSC. 4

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 discrete identifiable construction projects: e.g., a twenty-fivestorey 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 basic issue is thus whether or not petitioners are properly characterized as "project
employees" rather than "regular employees" of NSC. This issue relates, of course, to an
important consequence: the services of project employees are co-terminous with the
project and may be terminated upon the end or completion of the project for which they
were hired. 5 Regular employees, in contract, are legally entitled to remain in the service
of their employer until that service is terminated by one or another of the recognized
modes of termination of service under the Labor Code. 6
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 parameeters of the "project" becomes fairly easy. It is unusual (but still
conceivable) for a company to undertake a project which has absolutely no relationship to
the usual business of the company; thus, for instance, it would be an unusual steelmaking company which would undertake the breeding and production of fish or the
cultivation of vegetables. 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." 7 For, as is evident from

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. The case at bar presents what appears to our mind as a typical example of this
kind of "project."
NSC undertook the ambitious Five Year Expansion Program I and II with the ultimate end
in view of expanding the volume and increasing the kinds of products that it may offer for
sale to the public. The Five Year Expansion Program had a number of component
projects: e.g., (a) the setting up of a "Cold Rolling Mill Expansion Project"; (b) the
establishment of a "Billet Steel-Making Plant" (BSP); (c) the acquisition and installation of
a "Five Stand TDM"; and (d) the "Cold Mill Peripherals Project." 8 Instead of contracting
out to an outside or independent contractor the tasks of constructing the buildings with

related civil and electrical works that would house the new machinery and equipment,
the installation of the newly acquired mill or plant machinery and equipment and
the commissioning of such machinery and equipment, NSC opted to execute and carry
out its Five Yeear Expansion Projects "in house," as it were, by administration. The
carrying out of the Five Year Expansion Program (or more precisely, each of its
component projects) constitutes a distinct undertaking identifiable from the ordinary
business and activity of NSC. Each component project, of course, begins and ends at
specified times, which had already been determined by the time petitioners were
engaged. We also note that NSC did the work here involved the construction of
buildings and civil and electrical works, installation of machinery and equipment and the
commissioning of such machinery only for itself. Private respondent NSC was not in
the business of constructing buildings and installing plant machinery for the general
business community, i.e., for unrelated, third party, corporations. NSC did not hold itself
out to the public as a construction company or as an engineering corporation.
Which ever type of project employment is found in a particular case, a common basic
requisite is that the designation of named employees as "project employees" and their
assignment to a specific project, are effected and implemented in good faith, and not
merely as a means of evading otherwise applicable requirements of labor laws.
Thus, the particular component projects embraced in the Five Year Expansion Program,
to which petitioners were assigned, were distinguishable from the regular or ordinary
business of NSC which, of course, is the production or making and marketing of steel
products. During the time petitioners rendered services to NSC, their work was limited to
one or another of the specific component projects which made up the FAYEP I and II.
There is nothing in the record to show that petitioners were hired for, or in fact assigned
to, other purposes, e.g., for operating or maintaining the old, or previously installed and
commissioned, steel-making machinery and equipment, or for selling the finished steel
products.
We, therefore, agree with the basic finding of the NLRC (and the Labor Arbiter) that the
petitioners were indeed "project employees:"
It is well established by the facts and evidence on record that herein 13
complainants were hired and engaged for specific activities or

undertaking the period of which has been determined at time of hiring or

engagement. It is of public knowledge and which this Commission can
safely take judicial notice that the expansion program (FAYEP) of
respondent NSC consist of various phases [of] project components which
are being executed or implemented independently or simultaneously from
each other . . .
In other words, the employment of each "project worker" is dependent
and co-terminous with the completion or termination of the specific
activity or undertaking [for which] he was hired which has been predetermined at the time of engagement. Since, there is no showing that
they (13 complainants) were engaged to perform work-related activities to
the business of respondent which is steel-making, there is no logical and
legal sense of applying to them the proviso under the second paragraph
of Article 280 of the Labor Code, as amended.
xxx xxx xxx
The present case therefore strictly falls under the definition of "project
employees" on paragraph one of Article 280 of the Labor Code, as
amended. Moreover, it has been held that the length of service of a
project employee is not the controlling test of employment tenure but
whether or not "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". (See Hilario Rada v.
NLRC, G.R. No. 96078, January 9, 1992; and Sandoval Shipping, Inc. v.
NLRC, 136 SCRA 674 (1985). 9
Petitioners next claim that their service to NSC of more than six (6) years should qualify
them as regular employees. We believe this claim is without legal basis. The simple fact
that the employment of petitioners as project employees had gone beyond one (1) year,
does not detract from, or legally dissolve, their status as project employees. 10 The second
paragraph of Article 280 of the Labor Code, quoted above, providing that an employee
who has served for at least one (1) year, shall be considered a regular employee, relates
to casual employees, not to project employees.

In the case of Mercado, Sr. vs. National Labor Relations Commission, 11 this Court ruled
that the proviso in the second paragraph of Article 280 relates only to casual
employees and is not applicable to those who fall within the definition of said Article's first
paragraph, i.e., project employees. The familiar grammatical rule is 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 other sections thereof, unless the clear legislative intent is to restrict
or qualify not only the phrase immediately preceding the proviso but also earlier
provisions of the statute or even the statute itself as a whole. No such intent is observable
in Article 280 of the Labor Code, which has been quoted earlier.
ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby DISMISSED
for lack of merit. The Resolutions of the NLRC dated 8 January 1993 and 15 February
1993 are hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Cruz, Padilla, Bidin, Regalado, Davide, Jr., Romero, Melo,
Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur.
Bellosillo, J., is on leave.

G.R. No. 79869 September 5, 1991

FORTUNATO MERCADO, SR., ROSA MERCADO, FORTUNATO MERCADO, JR.,
ANTONIO MERCADO, JOSE CABRAL, LUCIA MERCADO, ASUNCION GUEVARA,
ANITA MERCADO, MARINA MERCADO, JULIANA CABRAL, GUADALUPE PAGUIO,

BRIGIDA ALCANTARA, EMERLITA MERCADO, ROMEO GUEVARA, ROMEO

MERCADO
and
LEON
SANTILLAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD DIVISION; LABOR
ARBITER LUCIANO AQUINO, RAB-III; AURORA L. CRUZ; SPOUSES FRANCISCO
DE BORJA and LETICIA DE
BORJA;
and STO. NIO REALTY,
INCORPORATED, respondents.

From
1962-1963
1963-1965

1965-1967

1967-1970

1970-1973

1973-1975

1975-1978

1978-1979 P7.00

P1.50
P2.00
P3.00
P4.00
P5.00
P5.00
P6.00

Servillano S. Santillan for petitioners.

Luis R. Mauricio for private respondents.
PADILLA, J.:p
Assailed in this petition for certiorari is the decision * of the respondent national Labor
Relations Commission (NLRC) dated 8 August 1984 which affirmed the decision of
respondent Labor Arbiter Luciano P. Aquino with the slight modification of deleting the
award of financial assistance to petitioners, and the resolution of the respondent NLRC
dated 17 August 1987, denying petitioners' motion for reconsideration.

Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said
petitioners were her regular employees and instead averred that she engaged their
services, through Spouses Fortunato Mercado, Sr. and Rosa Mercado, their "mandarols",
that is, persons who take charge in supplying the number of workers needed by owners of
various farms, but only to do a particular phase of agricultural work necessary in rice
production and/or sugar cane production, after which they would be free to render
services to other farm owners who need their services. 2
The other private respondents denied having any relationship whatsoever with the
petitioners and state that they were merely registered owners of the land in question
included as corespondents in this case. 3

This petition originated from a complaint for illegal dismissal, underpayment of wages,
non-payment of overtime pay, holiday pay, service incentive leave benefits, emergency
cost of living allowances and 13th month pay, filed by above-named petitioners against
private respondents Aurora L. Cruz, Francisco Borja, Leticia C. Borja and Sto. Nio Realty
Incorporated, with Regional Arbitration Branch No. III, National Labor Relations
Commission in San Fernando, Pampanga. 1

The dispute in this case revolves around the issue of whether or not petitioners are
regular and permanent farm workers and therefore entitled to the benefits which they pray
for. And corollary to this, whether or not said petitioners were illegally dismissed by private
respondents.

Petitioners alleged in their complaint that they were agricultural workers utilized by private
respondents in all the agricultural phases of work on the 7 1/2 hectares of ace land and
10 hectares of sugar land owned by the latter; that Fortunato Mercado, Sr. and Leon
Santillan worked in the farm of private respondents since 1949, Fortunato Mercado, Jr.
and Antonio Mercado since 1972 and the rest of the petitioners since 1960 up to April
1979, when they were all allegedly dismissed from their employment; and that, during the
period of their employment, petitioners received the following daily wages:

Respondent Labor Arbiter Luciano P. Aquino ruled in favor of private respondents and
held that petitioners were not regular and permanent workers of the private respondents,
for the nature of the terms and conditions of their hiring reveal that they were required to
perform phases of agricultural work for a definite period of time after which their services
would be available to any other farm owner. 4 Respondent Labor Arbiter deemed
petitioners' contention of working twelve (12) hours a day the whole year round in the
farm, an exaggeration, for the reason that the planting of lice and sugar cane does not
entail a whole year as reported in the findings of the Chief of the NLRC Special Task
Force. 5 Even the sworn statement of one of the petitioners, Fortunato Mercado, Jr., the

son of spouses Fortunato Mercado, Sr. and Rosa Mercado, indubitably show that said
petitioners were hired only as casuals, on an "on and off" basis, thus, it was within the
prerogative of private respondent Aurora Cruz either to take in the petitioners to do further
work or not after any single phase of agricultural work had been completed by them. 6

WHEREFORE, the Decision of Labor Arbiter Luciano P. Aquino dated

March 3, 1983 is hereby modified in that the award of P10,000.00
financial assistance should be deleted. The said Decision is affirmed in all
other aspects.

Respondent Labor Arbiter was also of the opinion that the real cause which triggered the
filing of the complaint by the petitioners who are related to one another, either by
consanguinity or affinity, was the filing of a criminal complaint for theft against Reynaldo
Mercado, son of spouses Fortunate Mercado, Sr. and Rosa Mercado, for they even asked
the help of Jesus David, Zone Chairman of the locality to talk to private respondent,
Aurora Cruz regarding said criminal case. 7 In his affidavit, Jesus David stated under oath
that petitioners were never regularly employed by private respondent Aurora Cruz but
were, on-and-off hired to work and render services when needed, thus adding further
support to the conclusion that petitioners were not regular and permanent employees of
private respondent Aurora Cruz. 8

SO ORDERED. 11

Respondent Labor Arbiter further held that only money claims from years 1976-1977,
1977-1978 and 1978-1979 may be properly considered since all the other money claims
have prescribed for having accrued beyond the three (3) year period prescribed by
law. 9 On grounds of equity, however, respondent Labor Arbiter awarded petitioners
financial assistance by private respondent Aurora Cruz, in the amount of Ten Thousand
Pesos (P10,000.00) to be equitably divided among an the petitioners except petitioner
Fortunato Mercado, Jr. who had manifested his disinterest in the further prosecution of his
complaint against private respondent. 10
Both parties filed their appeal with the National Labor Relations Commissions (NLRC).
Petitioners questioned respondent Labor Arbiter's finding that they were not regular and
permanent employees of private respondent Aurora Cruz while private respondents
questioned the award of financial assistance granted by respondent Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the decision of the respondent
Labor Arbiter, with the modification of the deletion of the award for financial assistance to
petitioners. The dispositive portion of the decision of the NLRC reads:

Petitioners filed a motion for reconsideration of the Decision of the Third Division of the
NLRC dated 8 August 1984; however, the NLRC denied tills motion in a resolution dated
17 August 1987. 12
In the present Petition for certiorari, petitioners seek the reversal of the above-mentioned
rulings. Petitioners contend that respondent Labor Arbiter and respondent NLRC erred
when both ruled that petitioners are not regular and permanent employees of private
respondents based on the terms and conditions of their hiring, for said findings are
contrary to the provisions of Article 280 of the Labor Code. 13 They submit that petitioners'
employment, even assuming said employment were seasonal, continued for so many
years such that, by express provision of Article 280 of the Labor Code as amended,
petitioners have become regular and permanent employees. 14
Moreover, they argue that Policy Instruction No. 12 15 of the Department of Labor and
Employment clearly lends support to this contention, when it states:
PD 830 has defined the concept of regular and casual employment. What
determines regularity or casualness is not the employment contract,
written or otherwise, but the nature of the job. If the job is usually
necessary or desirable to the main business of the employer, then
employment is regular. If not, then the employment is casual.
Employment for a definite period which exceeds one (1) year shall be
considered re for the duration of the definite period.
This concept of re and casual employment is 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.

This new concept should be strictly enforced to give meaning to the

constitutional guarantee of employment tenure. 16

nature and the employment is for the duration of the season. 21 (emphasis
supplied)

Tested under the laws invoked, petitioners submit that it would be unjust, if not unlawful,
to consider them as casual workers since they have been doing all phases of agricultural
work for so many years, activities which are undeniably necessary, desirable and
indispensable in the rice and sugar cane production business of the private
respondents. 17

The Court resolved to give due course to the petition and required the parties to submit
their respective memoranda after which the case was deemed submitted for decision.

In the Comment filed by private respondents, they submit that the decision of the Labor
Arbiter, as aimed by respondent NLRC, that petitioners were only hired as casuals, is
based on solid evidence presented by the parties and also by the Chief of the Special
Task Force of the NLRC Regional Office and, therefore, in accordance with the rule on
findings of fact of administrative agencies, the decision should be given great
weight. 18Furthermore, they contend that the arguments used by petitioners in questioning
the decision of the Labor Arbiter were based on matters which were not offered as
evidence in the case heard before the regional office of the then Ministry of Labor but
rather in the case before the Social Security Commission, also between the same
parties. 19
Public respondent NLRC filed a separate comment prepared by the Solicitor General. It
submits that it has long been settled that findings of fact of administrative agencies if
supported by substantial evidence are entitled to great weight. 20 Moreover, it argues that
petitioners cannot be deemed to be permanent and regular employees since they fall
under the exception stated in Article 280 of the Labor Code, which reads:
The provisions of written agreements 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

The petition is not impressed with merit.

The invariable rule set by the Court in reviewing administrative decisions of the Executive
Branch of the Government is that the findings of fact made therein are respected, so long
as they are supported by substantial evidence, even if not overwhelming or
preponderant; 22 that it is not for the reviewing court to weigh the conflicting evidence,
determine the credibility of the witnesses or otherwise substitute its own judgment for that
of the administrative agency on the sufficiency of the evidence; 23 that the administrative
decision in matters within the executive's jurisdiction can only be set aside upon proof of
gross abuse of discretion, fraud, or error of law. 24
The questioned decision of the Labor Arbiter reads:
Focusing the spotlight of judicious scrutiny on the evidence on record and
the arguments of both parties, it is our well-discerned opinion that the
petitioners are not regular and permanent workers of the respondents.
The very nature of the terms and conditions of their hiring reveal that the
petitioners were required to perform p of cultural work for a definite
period, after which their services are available to any farm owner. We
cannot share the arguments of the petitioners that they worked
continuously the whole year round for twelve hours a day. This, we feel, is
an exaggeration which does not deserve any serious consideration
inasmuch as the plan of rice and sugar cane does not entail a whole year
operation, the area in question being comparatively small. It is noteworthy
that the findings of the Chief of the Special Task Force of the Regional
Office are similar to this.
In fact, the sworn statement of one of the petitioners Fortunato Mercado,
Jr., the son of spouses Fortunato Mercado, Sr. and Rosa Mercado,

indubitably shows that said petitioners were only hired as casuals, onand-off basis. With this kind of relationship between the petitioners and
the respondent Aurora Cruz, we feel that there is no basis in law upon
which the claims of the petitioners should be sustained, more specially
their complaint for illegal dismissal. It is within the prerogative of
respondent Aurora Cruz either to take in the petitioners to do further work
or not after any single phase of agricultural work has been completed by
them. We are of the opinion that the real cause which triggered the filing
of this complaint by the petitioners who are related to one another, either
by consanguinity or affinity was due to the filing of a criminal complaint by
the respondent Aurora Cruz against Reynaldo Mercado, son of spouses
Fortunato Mercado, Sr. and Rosa Mercado. In April 1979, according to
Jesus David, Zone Chairman of the locality where the petitioners and
respondent reside, petitioner Fortunato Mercado, Sr. asked for help
regarding the case of his son, Reynaldo, to talk with respondent Aurora
Cruz and the said Zone Chairman also stated under oath that the
petitioners were never regularly employed by respondent Aurora Cruz but
were on-and-off hired to work to render services when needed. 25
A careful examination of the foregoing statements reveals that the findings of the Labor
Arbiter in the case are ably supported by evidence. There is, therefore, no circumstance
that would warrant a reversal of the questioned decision of the Labor Arbiter as affirmed
by the National Labor Relations Commission.
The contention of petitioners that the second paragraph of Article 280 of the Labor Code
should have been applied in their case presents an opportunity to clarify the aforementioned provision of law.
Article 280 of the Labor Code reads in full:
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.
The first paragraph answers the question of who are 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 26 as in the present case.
The second paragraph of Art. 280 demarcates as "casual" employees, all other
employees who do not fan 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. 27 Thus, it has been held that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached, and not to the statute
itself or to other sections thereof. 28 The only exception to this rule is where the clear
legislative intent is to restrain or qualify not only the phrase immediately preceding it (the
proviso) but also earlier provisions of the statute or even the statute itself as a whole. 29
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 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 season. The termination of their employment cannot and should not constitute an
illegal dismissal. 30
WHEREFORE, the petition is DISMISSED. The decision of the National Labor Relations
Commission affirming that of the Labor Arbiter, under review, is AFFIRMED. No
pronouncement as to costs.

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and

CRISTINE
SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL
TRADE, respondents.
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was seasonal
in nature, they failed to prove that the latter worked only for the duration of one particular
season. In fact, petitioners do not deny that these workers have served them for several
years already. Hence, they are regular not seasonal employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to
set aside the February 20, 2001 Decision of the Court of Appeals 1 (CA) in CA-GR SP No.
51033. The dispositive part of the Decision reads:
"WHEREFORE, premises considered, the instant special civil action for certiorari
is hereby DENIED." 2
On the other hand, the National Labor Relations Commission (NLRC)
Decision, 3 upheld by the CA, disposed in this wise:
"WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby
SET ASIDE and VACATED and a new one entered declaring complainants to
have been illegally dismissed. Respondents are hereby ORDERED to reinstate
complainants except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy
Silva to their previous position and to pay full backwages from September 1991
until reinstated. Respondents being guilty of unfair labor practice are further
ordered to pay complainant union the sum of P10,000.00 as moral damages and
P5,000.00 as exemplary damages." 4

SO ORDERED.
G.R. No. 149440

January 28, 2003

The Facts

The facts are summarized in the NLRC Decision as follows:

"Contrary to the findings of the Labor Arbiter that complainants [herein
respondents] refused to work and/or were choosy in the kind of jobs they wanted
to perform, the records is replete with complainants' persistence and dogged
determination in going back to work.
"Indeed, it would appear that respondents did not look with favor workers' having
organized themselves into a union. Thus, when complainant union was certified
as the collective bargaining representative in the certification elections,
respondents under the pretext that the result was on appeal, refused to sit down
with the union for the purpose of entering into a collective bargaining agreement.
Moreover, the workers including complainants herein were not given work for
more than one month. In protest, complainants staged a strike which was
however settled upon the signing of a Memorandum of Agreement which
stipulated among others that:
'a) The parties will initially meet for CBA negotiations on the 11th day of
January 1991 and will endeavor to conclude the same within thirty (30)
days.
'b) The management will give priority to the women workers who are
members of the union in case work relative . . . or amount[ing] to gahit
and [dipol] arises.

"However, alleging that complainants failed to load the fifteen wagons,

respondents reneged on its commitment to sit down and bargain collectively.
Instead, respondent employed all means including the use of private armed
guards to prevent the organizers from entering the premises.
"Moreover, starting September 1991, respondents did not any more give work
assignments to the complainants forcing the union to stage a strike on January 2,
1992. But due to the conciliation efforts by the DOLE, another Memorandum of
Agreement was signed by the complainants and respondents which provides:
'Whereas the union staged a strike against management on January 2, 1992
grounded on the dismissal of the union officials and members;
'Whereas parties to the present dispute agree to settle the case amicably once
and for all;
'Now therefore, in the interest of both labor and management, parties
herein agree as follows:
'1. That the list of the names of affected union members hereto attached
and made part of this agreement shall be referred to the Hacienda payroll
of 1990 and determine whether or not this concerned Union members are
hacienda workers;

'c) Ariston Eruela Jr. will be given back his normal work load which is six
(6) days in a week.

'2. That in addition to the payroll of 1990 as reference, herein parties will
use as guide the subjects of a Memorandum of Agreement entered into
by and between the parties last January 4, 1990;

'd) The management will provide fifteen (15) wagons for the workers and
that existing workforce prior to the actual strike will be given priority.
However, in case the said workforce would not be enough, the
management can hire additional workers to supplement them.

'3. That herein parties can use other employment references in support of
their respective claims whether or not any or all of the listed 36 union
members are employees or hacienda workers or not as the case may be;

'e) The management will not anymore allow the scabs, numbering about
eighteen (18) workers[,] to work in the hacienda; and

'4. That in case conflict or disagreement arises in the determination of the

status of the particular hacienda workers subject of this agreement herein
parties further agree to submit the same to voluntary arbitration;

'f) The union will immediately lift the picket upon signing of this
agreement.'

'5. To effect the above, a Committee to be chaired by Rose Mengaling is

hereby created to be composed of three representatives each and is

given five working days starting Jan. 23, 1992 to resolve the status of the
subject 36 hacienda workers. (Union representatives: Bernardo Torres,
Martin Alas-as, Ariston Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the Minutes of the
Conciliation Meeting showed as follows:

3. Ricardo Dagle

9. Martin Alas-as Jr.

4. Jesus Silva

10. Cresensio Abrega

1. Luisa Rombo

5. Fernando Silva

11. Ariston Eruela Sr.

2. Ramona Rombo

6. Ernesto Tejares

12. Ariston Eruela Jr.'

'The meeting started at 10:00 A.M. A list of employees was submitted by

Atty. Tayko based on who received their 13th month pay. The following
are deemed not considered employees:

"When respondents again reneged on its commitment; complainants filed the

present complaint.

3. Bobong Abrega

"But for all their persistence, the risk they had to undergo in conducting a strike in
the face of overwhelming odds, complainants in an ironic twist of fate now find
themselves being accused of 'refusing to work and being choosy in the kind of
work they have to perform'." 5 (Citations omitted)

4. Boboy Silva

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

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

1. Jose Dagle

2. Rico Dagle

7. Alejandro Tejares

8. Gaudioso Rombo

Ruling of the Court of Appeals

The CA affirmed that while the work of respondents was seasonal in nature, they were
considered to be merely on leave during the off-season and were therefore still employed
by petitioners. Moreover, the workers enjoyed security of tenure. Any infringement upon
this right was deemed by the CA to be tantamount to illegal dismissal.
The appellate court found neither "rhyme nor reason in petitioner's argument that it was
the workers themselves who refused to or were choosy in their work." As found by the
NLRC, the record of this case is "replete with complainants' persistence and dogged
determination in going back to work." 6

The CA likewise concurred with the NLRC's finding that petitioners were guilty of unfair
labor practice.
Hence this Petition. 7

entertained. 10 The Court is not a trier of facts and, in labor cases, this doctrine applies
with greater force. 11 Factual questions are for labor tribunals to resolve. 12 In the present
case, these have already been threshed out by the NLRC. Its findings were affirmed by
the appellate court.
Contrary to petitioners' contention, the CA did not err when it held that respondents were
regular employees.

Issues
Petitioners raise the following issues for the Court's consideration:
"A. Whether or not the Court of Appeals erred in holding that respondents,
admittedly seasonal workers, were regular employees, contrary to the clear
provisions of Article 280 of the Labor Code, which categorically state that
seasonal employees are not covered by the definition of regular employees under
paragraph 1, nor covered under paragraph 2 which refers exclusively to casual
employees who have served for at least one year.
"B. Whether or not the Court of Appeals erred in rejecting the ruling in
Mercado, . . . and relying instead on rulings which are not directly applicable to
the case at bench, viz, Philippine Tobacco, Bacolod-Murcia, and Gaco, . . .
"C Whether or not the Court of Appeals committed grave abuse of discretion in
upholding the NLRC's conclusion that private respondents were illegally
dismissed, that petitioner[s were] guilty of unfair labor practice, and that the union
be awarded moral and exemplary damages." 8
Consistent with the discussion in petitioners' Memorandum, we shall take up Items A and
B as the first issue and Item C as the second.
The Court's Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this Court
in petitions for review on certiorari of CA decisions. 9 Questions of fact are not

Article 280 of the Labor Code, as amended, states:

"Art. 280. Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
"An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exist." (Italics
supplied)
For respondents to be excluded from those classified as regular employees, it is not
enough that they perform work or services that are seasonal in nature. They must have
also been employed only for the duration of one season. The evidence proves the
existence of the first, but not of the second, condition. The fact that respondents with
the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva
repeatedly worked as sugarcane workers for petitioners for several years is not denied by
the latter. Evidently, petitioners employed respondents for more than one season.
Therefore, the general rule of regular employment is applicable.
In Abasolo v. National Labor Relations Commission, 13 the Court issued this clarification:

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

xxx

xxx

". . . [T]he fact that [respondents] do not work continuously for one whole year but
only for the duration of the . . . season does not detract from considering them in
regular employment since in a litany of cases this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily
laid off during off-season are not separated from service in said period, but merely
considered on leave until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the case
at bar. In the earlier case, the workers were required to perform phases of agricultural
work for a definite period of time, after which their services would be available to any
other farm owner. They were not hired regularly and repeatedly for the same phase/s of
agricultural work, but on and off for any single phase thereof. On the other hand, herein
respondents, having performed the same tasks for petitioners every season for several
years, are considered the latter's regular employees for their respective tasks. Petitioners'
eventual refusal to use their services even if they were ready, able and willing to
perform their usual duties whenever these were available and hiring of other workers to
perform the tasks originally assigned to respondents amounted to illegal dismissal of the
latter.
The Court finds no reason to disturb the CA's dismissal of what petitioners claim was their
valid exercise of a management prerogative. The sudden changes in work assignments

reeked of bad faith. These changes were implemented immediately after respondents had
organized themselves into a union and started demanding collective bargaining. Those
who were union members were effectively deprived of their jobs. Petitioners' move
actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.
"Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden is on
the employer to prove that the termination was for a valid and authorized cause." 16 In the
case at bar, petitioners failed to prove any such cause for the dismissal of respondents
who, as discussed above, are regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:
"Indeed, from respondents' refusal to bargain, to their acts of economic
inducements resulting in the promotion of those who withdrew from the union, the
use of armed guards to prevent the organizers to come in, and the dismissal of
union officials and members, one cannot but conclude that respondents did not
want a union in their haciendaa clear interference in the right of the workers to
self-organization." 17
We uphold the CA's affirmation of the above findings. Indeed, factual findings of labor
officials, who are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality. Their findings are
binding on the Supreme Court. 18 Verily, their conclusions are accorded great weight upon
appeal, especially when supported by substantial evidence. 19 Consequently, the Court is
not duty-bound to delve into the accuracy of their factual findings, in the absence of a
clear showing that these were arbitrary and bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries with it the sanction of moral
and exemplary damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.

SO ORDERED.
Puno, Sandoval-Gutierrez and Corona, JJ., concur.

[G.R. No. 124841. July 31, 1998]

PEFTOK
INTEGRATED
SERVICES,
INC., petitioner, vs. NATIONAL
LABOR
RELATIONS COMMISSION and EDUARDO ABUGHO, ET. AL., respondents.
DECISION
PURISIMA, J.:
Pacta privata juri publico derogare non possunt. Private agreements (between
parties) cannot derogate from public right.
Filed on May 22, 1996, this petition for certiorari under Rule 65 of the Revised Rules
of Court seeks to set aside the decision of the National Labor Relations
Commission (NLRC) dismissing the appeal of petitioner. The case stemmed from the
decision handed down by Labor Arbiter Noel Augusto S. Magbanua, disposing, as follows:

WHEREFORE, in view of the foregoing premises, respondents-PEFTOK Security Agency

and Timber Industries of the Philippines, Inc. (TIPI) and Union Plywood Corporation are
hereby ordered to pay, jointly and solidarily the claims of complainants as previously
computed as follows:
1. Eduardo Abugho P49,397.83
2. Clenio Macanoquit 31,596.12
3. Claro Mendez 49,308.83
4. Leov8emin Lumban 16,666.45
5. Crispin Balingkit 44,772.34
6. Ulysses Labis 43,812.64
7. Fidel Sabellina 23,666.90
8. Leonardo Daluperi 27,026.59
9. Valentine Adame 17,084.92
10. Gonzalo Ernero 18,018.56
11. Celso Niluag 18,670.00
12. Reynaldo Maasin 19,499.28[1]
GRAND TOTAL - 342,598.52
Other claims are hereby dismissed for failure to substantiate and for lack of merit.
SO ORDERED.

Pertinent sheriffs return shows that the aforesaid decision was partly executed up to
fifty percent (50%), Timber Industries of the Philippines (TIPI) having paid half of their
solidary obligation to the security guards-employees, who quitclaimed and waived fifty
percent (50%) of the benefits adjudged in their favor. On October 13, 1989, [2] Eduardo
Abugho, Claro Mendez and Leonardo Daluperi executed a waiver [3] of all their claims
against Peftok Integrated Services, Inc. (PEFTOK, for brevity) for the period ending on
June 30, 1989. Said waiver [4] appeared to bar all claims they may have had against
PEFTOK before June 30, 1989. Urged by their entitlement to full benefits as provided in
the labor arbiters decision, the private respondents sought the issuance of an alias writ of
execution.
On May 29, 1992, Eduardo Abugho, Fidel Sabellina, Leonardo Daluperi, Claro
Mendez and Reynaldo Maasin executed another waiver and quitclaim [5] purportedly
renouncing whatever claims they may have against PEFTOK for the period ending March
15, 1998. Such waiver or quitclaim was worded to preclude whatever claim they may
have against PEFTOK on or before March 16, 1998. However, Eduardo Abugho, Fidel
Sabellina, Leonardo Daluperi, Reynaldo Maasin and Claro Mendez subsequently
executed affidavits[6]stating that the aforementioned quitclaims were prepared and readied
for their signature by PEFTOK and they were forced to sign the same for fear that they
would not be given their salary on pay day, and worse, their services would be terminated
if they did not sign the said quitclaims under controversy.
Private respondents asserted that the waivers of claims signed by them are contrary
to public policy; the same being written in the English language which they do not
understand and the contents thereof were not explained to them. On June 19, 1995, the
prayer for alias writ of execution was granted by Labor Arbiter Henry F. Te.
In support of its prayer, petitioner PEFTOK theorizes that the quitclaims executed by
the security guards suffer no legal infirmity. Like any other right, the claims in dispute can
be waived and waiver thereof is not prohibited by law. No surety bond is required to
perfect an appeal, in the same manner that no bond is necessary for the issuance of an
alias writ of execution; petitioner maintains.
The comment sent in by the Solicitor General prays that the petition be dismissed
outright for being premature and for non-compliance with the requisite motion for

reconsideration of the NLRC decision before elevating the same to this court. It stressed
that quitclaims by employees are basically against public policy.
There is no quibble over the fact that subject decision of the labor arbiter appealed
from was received by petitioner on June 30, 1995. The appeal therefrom should have
been interposed within 10 days or not later than July 10, 1995. But unfortunately for
petitioner, its appeal was only filed on July 17, 1995. Indeed, it is decisively clear that
petitioners appeal is flawed by late filing. The prescribed period for appeal is both
mandatory and jurisdictional.
Then, too, the petition under consideration is likewise dismissable on the ground of
prematurity. In consonance with the principle of exhaustion of administrative remedies, it
was necessary for a motion for reconsideration of the decision of the National Labor
Relations Commission to be filed in order to give NLRC a chance to correct its mistakes, if
there be any. So also, under Rule 65 of the Revised Rules of Court, petitioner must
establish that it has no plain, speedy and adequate remedy in the ordinary course of law
for its perceived grievance.[7]
It is decisively clear that they (guards) affixed their signatures to subject waivers
and/or quitclaims for fear that they would not be paid their salaries on pay day or worse,
still, their services would be terminated if they did not sign those papers. In short, there
was no voluntariness in the execution of the quitclaim or waivers in question. it should be
borne in mind that in this jurisdiction, quitclaims, waivers or releases are looked upon with
disfavor.[8] Necessitous men are not free men. [9] They are commonly frowned upon as
contrary to public policy and ineffective to bar claims for the full measure of the workers
legal rights.[10]
With respect to the posting of cash or surety bond, the requirement therefor is
mandatory. The bond is sine qua non to the perfection of appeal from the labor arbiters
monetary award.[11] The posting of cash or surety bond is unconditional [12] and cannot
therefore be trifled with. It is the intendment of the law that employees be assured that if
they finally prevail in the case, they will receive the monetary award granted them. The
bond also serves to discourage employers from using the appeal as a ploy to delay or
evade payment of monetary obligations to their employees.

WHEREFORE, the petition is hereby DISMISSED for lack of merit; the decision of
the NLRC dated February 26, 1995 is AFFIRMED and the questioned alias writ of
execution UPHELD.
SO ORDERED.
Narvasa, C.J., (Chairman), Romero, and Kapunan, JJ., concur.

On February 9, 1988, Maria Mila D. Samonte, Properties Administration Head of

ALSONS, requested the petitioner for a "periodic reshuffling" of guards. The pertinent
portion of her letter reads:
Our corporation offers spaces to tenants including services of
maintenance and security. The latter causes us to hire your agency's
services. It is therefore clearly understood that Aldevinco assures tenants
of security of their properties found in Aldevinco's compound, and
likewise Commando Security Service Agency assures Aldevinco the
same.
G.R. No. 95844 July 20, 1992
COMMANDO
vs.
NATIONAL
LABOR
DECIERDO, respondents.

SECURITY
RELATIONS

AGENCY, petitioner,
COMMISSION

and

NEMESIO

GRIO-AQUINO, J.:
Petitioner assails the resolutions of the National Labor Relations Commission dated May
26, 1989 and September 25, 1990, affirming with modification the decision of the Labor
Arbiter in NLRC Case No. 11-0200075-88.
Private respondent Nemesio Decierdo was a security guard of the petitioner since
February 1981. In April 1987, petitioner entered into a contract to provide guarding
services to the Alsons Development and Investment Corporation (ALSONS for brevity) at
its Aldevinco Building on Claro M. Recto Avenue, Davao City, for a period of one year, i.e.,
from April 11, 1987 to April 10, 1988, unless renewed under such terms and conditions as
may be mutually acceptable. The number of guards to be assigned by the petitioner would
depend on ALSON's demand, sometimes two (2) guards on a daily shift, and sometimes
four (4) guards. Decierdo was one of the guards assigned to the Aldevinco Building by the
petitioner.

We hope that the above shall be clearly explained to the incoming

guards, we requested for a period reshuffling. We do extend our gratitude
to your immediate services in response to our request in the past. (pp.
45-A-46, Rollo.)
Pursuant to that reasonable request of its client, petitioner on February 10, 1988 served
the following recall order on Decierdo:
Report to this HQs for instruction. You are hereby recalled from your
present post at Aldevinco Bldg. as per Rotation Policy Order by the
management effective 11 February 1988. (p. 46. Rollo.)
On the same date, February 10, 1988, Detail Order 02-016 was issued to Decierdo
assigning him to the Pacific Oil Company in Bunawan, Davao City, with instruction to
report to the manager, but Decierdo refused to accept the assignment as shown by the
annotation at the bottom of the Order, viz:
Refused to accept assignment he is going to rest for a while. (p.
54, Rollo.)
On February 11, 1988, which was the effective date of the detail order, Decierdo filed a
complaint for illegal dismissal, unfair labor practice, underpayment of wages, overtime
pay, night premium, 13th month pay, holiday pay, rest day pay and incentive leave pay.

On June 28, 1988, the Executive Labor Arbiter rendered a decision, the dispositive portion
of which reads as follows:
WHEREFORE, in consideration of all the foregoing, judgment is hereby
rendered:
1. Ordering respondent Commando Security Agency to pay complainant
Nemesio Decierdo the total amount of THIRTY-THREE THOUSAND
EIGHT HUNDRED SEVENTY-SEVEN AND 92/100 PESOS (P33,877.92),
as salary, holiday and rest day pay differentials, 13th month pay
differentials and service incentive leave pay; and
2. Dismissing the complaint for illegal dismissal, unfair labor practice,
overtime pay and night premium for lack of merit. (pp. 19-20, Rollo.)
Petitioner appealed to the NLRC which on May 26, 1989, affirmed with modification the
decision of the Labor Arbiter, to wit:
WHEREFORE, the appealed Decision is hereby AFFIRMED with the
modification that the amount of P1,498.39 representing complainant's
accountability with (sic) respondent is hereby ordered deducted from the
total award. (p. 58, Rollo.)
Hence, this petition for certiorari alleging that the NLRC gravely abused its discretion;
1. in failing to make a clear pronouncement that Decierdo had abandoned
his employment as he went on AWOL and therefore is considered
resigned;
2. in denying petitioner due process of law, or a right to be heard;
3. in not considering that Decierdo is in estoppel; and

4. in not holding that petitioner is entitled to a 25% share of his monthly

salary as agreed between them.
The petition for certiorari is without merit.
The first ground of the petition is not well taken for the NLRC did find that Decierdo had
given up his job and chose separation pay in lieu of reinstatement.
Anent the first issue, suffice it to state that there was no need for the
Executive Labor Arbiter to fix a period within which to require complainant
to report for work considering that the latter is no longer interested in his
job and had claimed for separation benefits in lieu of reinstatement. Why
respondent has begrudged the Labor Arbiter's "failure" to fix a return-towork period escapes us considering that the Labor Arbiter practically
found complainant to have abandoned his job and, besides,
complainant's claims for separation pay was not granted. If there was
anyone who should have been interested in being recalled to work, it
should have been complainant himself and not respondent. (pp. 5455, Rollo.)
As a result, the NLRC dismissed the charge of illegal dismissal and unfair labor practice
against the petitioner and denied Decierdo's claim for separation pay.
Regarding the petitioner's allegation that it was denied due process, we have time and
again pointed out that procedural due process merely requires notice and opportunity to
be heard (Var Orient Shopping Company vs. Achacoso, 161 SCRA 732; Bermejo vs.
Barrios, 31 SCRA 764) which the petitioner was given then it filed its position paper. The
petitioner was properly notified and even took part in the conciliation conference for the
amicable settlement of the case. It was made aware of the nature and specifics of the
charges against it but failed to refute them expecting that a hearing would be called.
However, the Labor Arbiter proceeded to decide the case based on the parties' position
papers, the records submitted by petitioner, and the report and the computations made by
the Corporate Auditing Examiner regarding the sums which Decierdo was entitled to
recover. That procedure complied with the Revised Rules of the NLRC, particularly
Sections 2 and 3, which provide:

Sec. 2. Submission of position papers. During the initial

conference/hearing, or immediately thereafter. the Labor Arbiter shall
require the parties to simultaneously submit to him their respective
verified position papers, which shall cover only the issues raised in the
complaint, accompanied by all supporting documents then available to
them and the affidavits of their witnesses which shall take the place of
their direct testimony. The parties shall thereafter not be allowed to
allege, or present evidence to prove, facts not referred to and any cause
or causes of action not included in their complaint or position papers,
affidavits and other documents. The parties shall furnish each other with
copies of the position papers, together with the supporting affidavits and
documents submitted by them.
Sec. 3. Determination of necessity of hearing. Immediately after the
submission by the parties of their position papers and supporting
proofs, the Labor Arbiter shall determine whether there is a need for a
formal hearing or investigation. At this state, he may, in his discretion, and
for the purpose of making such determination, elicit pertinent facts or
information, including documentary evidence, if any, from any party or
witness to complete, as far as possible, the facts of the case. Facts or
information so elicited may serve as basis for his clarification or
simplication and limitation of the issues in the case, encouraging for this
purpose the submission by the parties of admissions and stipulations of
fact to abbreviate the proceedings. He shall participate actively in the
preparation of such stipulations, making suggestions on what facts the
parties need not prove. (Emphasis supplied)
The NLRC correctly held that:
. . . the Executive Labor Arbiter did not err when she dispensed with a full
blown hearing there being no necessity for one. Under Section 3 of the
same rule as above-cited, the Labor Arbiter may, in his sound discretion,
dispense with a hearing and require, instead, the parties to file their
respective position papers together with all the supporting proofs. . . . all
that respondent had to do was present its payrolls and other records

which it is required to keep and maintain (see Sec. 6-12, Rule X, Book III
of Omnibus Rules Implementing the Labor Code) and it could already be
determined on the face thereof if complainant's monetary claims had
actually been paid or not . . . complainant's entitlements were computed
by the Corporate Auditing Examiner (p. 63, Records) on the basis of
respondent's records which was secured by virtue of a subpoena duces
tecum (p. 43, record). Respondent should have met bead-on the
accuracy of correctness of the computations and not skirt the issue by
dwelling merely on technicalities by complaining that the records were
irregularly procured. (p. 56,Rollo.)
Petitioner's contention that Decierdo is estopped from complaining about the 25%
deduction from his salary representing petitioner's share in procuring job placement for
him, is not well taken. That provision of the employment contract was illegal and
inequitous, hence, null and void.
The
constitutional provisions on
social justice (Sections 9 and
10,
Article II) and protection to labor (Sec. 18, Article II) in the declaration of Principles and
State Policies, impose upon the courts the duty to be ever vigilant in protecting the rights
of workers who are placed in a contractually disadvantaged position and who sign waivers
or provisions contrary to law and public policy (Mercury Drug Co. Inc. vs. Dayao, 117
SCRA 99, 116). We affirm the NLRC's ruling that:
It goes without saying that respondent may not deduct its so-called
"share" from the salaries of its guards without the latter's express consent
and if such deductions are not allowed by law. This is notwithstanding any
previous agreement or understanding between them. Any such
agreement or contract is void ab initio being contrary to law and public
policy (Mercury Drug Co. vs. Nardo Dayao, G.R. No. 30432, September
30, 1982). (pp. 57-58, Rollo.)
WHEREFORE, finding no abuse of discretion on the part of the National Labor Relations
Commission in rendering the assailed decision, the petition for certiorari is DISMISSED
for lack at merit.

SO ORDERED.

Lorenzo F. Miravite for petitioner.

Cruz, Medialdea and Bellosillo, JJ., concur.

Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

GRIO-AQUINO, J.:
This is a petition for review of the Order dated February 28, 1980 of the Minister of Labor
in Labor Case No. AJML-069-79, approving the private respondent's marketing scheme,
known as the "Complementary Distribution System" (CDS) and dismissing the petitioner
labor union's complaint for unfair labor practice.
On April 17, 1978, a collective bargaining agreement (effective on May 1, 1978 until
January 31, 1981) was entered into by petitioner San Miguel Corporation Sales Force
Union (PTGWO), and the private respondent, San Miguel Corporation, Section 1, of
Article IV of which provided as follows:
Art. IV, Section 1. Employees within the appropriate bargaining unit shall
be entitled to a basic monthly compensation plus commission based on
their respective sales. (p. 6, Annex A; p. 113, Rollo.)
In September 1979, the company introduced a marketing scheme known as the
"Complementary Distribution System" (CDS) whereby its beer products were offered for
sale directly to wholesalers through San Miguel's sales offices.
G.R. No. L-53515 February 8, 1989
SAN
MIGUEL BREWERY SALES
FORCE
vs.
HON. BLAS F. OPLE, as Minister of
CORPORATION, respondents.

UNION
Labor

(PTGWO), petitioner,
and

SAN

MIGUEL

The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry
of Labor, with a notice of strike on the ground that the CDS was contrary to the existing
marketing scheme whereby the Route Salesmen were assigned specific territories within
which to sell their stocks of beer, and wholesalers had to buy beer products from them,
not from the company. It was alleged that the new marketing scheme violates Section 1,
Article IV of the collective bargaining agreement because the introduction of the CDS

would reduce the take-home pay of the salesmen and their truck helpers for the company
would be unfairly competing with them.
The complaint filed by the petitioner against the respondent company raised two issues:
(1) whether the CDS violates the collective bargaining agreement, and (2) whether it is an
indirect way of busting the union.
In its order of February 28, 1980, the Minister of Labor found:

three (3) months back adjustment commissions over and above the
adjusted commission under the complementary distribution system. (p.
26, Rollo.)
The petition has no merit.
Public respondent was correct in holding that the CDS is a valid exercise of management
prerogatives:

... We see nothing in the record as to suggest that the unilateral action of
the employer in inaugurating the new sales scheme was designed to
discourage union organization or diminish its influence, but rather it is
undisputable that the establishment of such scheme was part of its
overall plan to improve efficiency and economy and at the same time gain
profit to the highest. While it may be admitted that the introduction of new
sales plan somewhat disturbed the present set-up, the change however
was too insignificant as to convince this Office to interpret that the
innovation interferred with the worker's right to self-organization.

Except as limited by special laws, an employer is free to regulate,

according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time,
place and manner of work, tools to be used, processes to be
followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of work. ... (NLU vs. Insular La Yebana Co., 2 SCRA
924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V.
Hernandez, Labor Relations Law, 1985 Ed., p. 44.) (Emphasis ours.)

Petitioner's conjecture that the new plan will sow dissatisfaction from its
ranks is already a prejudgment of the plan's viability and effectiveness. It
is like saying that the plan will not work out to the workers' [benefit] and
therefore management must adopt a new system of marketing. But what
the petitioner failed to consider is the fact that corollary to the adoption of
the assailed marketing technique is the effort of the company to
compensate whatever loss the workers may suffer because of the new
plan over and above than what has been provided in the collective
bargaining agreement. To us, this is one indication that the action of the
management is devoid of any anti-union hues. (pp. 24-25, Rollo.)

Every business enterprise endeavors to increase its profits. In the process, it may adopt
or devise means designed towards that goal. In Abbott Laboratories vs. NLRC, 154 SCRA
713, We ruled:

The dispositive part of the Minister's Order reads:

WHEREFORE, premises considered, the notice of strike filed by the
petitioner, San Miguel Brewery Sales Force Union-PTGWO is hereby
dismissed. Management however is hereby ordered to pay an additional

... Even as the law is solicitous of the welfare of the employees, it must
also protect the right of an employer to exercise what are clearly
management prerogatives. The free will of management to conduct its
own business affairs to achieve its purpose cannot be denied.
So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements,
this Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American
Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining Co. vs.
Garcia, 18 SCRA 110). San Miguel Corporation's offer to compensate the members of its
sales force who will be adversely affected by the implementation of the CDS by paying

them a so-called "back adjustment commission" to make up for the commissions they
might lose as a result of the CDS proves the company's good faith and lack of intention to
bust their union.

WHEREFORE, the petition for certiorari is dismissed for lack of merit.

SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.