19. Tomas Lao Construction v. NLRC
Abesco Construction and Development Corporation
Facts: Respondents were hired for various periods as
construction workers in different capacities by the
petitioner known as Lao Group of Companies engaged in
the construction of public roads and bridges.
Sometime in 1989, the company issued a memorandum
requiring all workers and company personnel to sign
employment contract, forms and clearances. These were to
be used allegedly for audit purposes. To ensure compliance
with the directive, the company ordered the withholding of
the salary of any employee who refused to sign. Quite
notably, the contracts expressly described the construction
workers as project employees whose employments were for
a definite period, i.e., upon the expiration of the contract
period or the completion of the project for which the
workers was hired.
All private respondents, except for one, refused to sign
such contending that this scheme was designed by their
employer to downgrade their status from regular employees
to mere project employees. As a consequence, their salaries
were withheld and were eventually terminated.
The LA denied the complaint while the NLRC reversed.
Issue: W/N the employees are project employees.
Held: No. The workers were initially hired for specific
projects or undertakings of the company and hence can be
classified as project employees, the repeated re-hiring and
the continuing need for their services over a long span of
time (the shortest, at seven [7] years) have undeniably
made them regular employees. Thus, we held that where
the employment of project employees is extended long after
the supposed project has been finished, the employees are
removed from the scope of project employees and
considered regular employees. Their employments became
non-coterminous with specific projects when they started to
be continuously re-hired due to the demands of petitioners
business and were re-engaged for many more projects
without interruption.
Moreover, there was no submission of a report of
termination to the nearest public employment office every
time their employment was terminated due to completion of
each construction project.
1 | Page
20.
v. Ramirez
Facts: Petitioner company was engaged in a construction
business where respondents were hired on different dates
from 1976 to 1992 either as laborers, road roller operators,
painters or drivers.
In 1997, respondents filed two separate complaints for
illegal dismissal against the company. Petitioners allegedly
dismissed them without a valid reason and without due
process of law. This includes also non-payment of benefits.
Petitioners denied liability to respondents and countered
that respondents were project employees since their
services were necessary only when the company had
projects to be completed. Petitioners argued that, being
project employees, respondents employment was
coterminous with the project to which they were assigned.
They were not regular employees who enjoyed security of
tenure and entitlement to separation pay upon termination
from work.
Issue: W/N respondents were project employees or regular
employees.
Held: The SC held that respondents were regular
employees. The principal test for determining whether
employees are project employees or regular employees
is whether they are assigned to carry out a specific project
or undertaking, the duration and scope of which are
specified at the time they are engaged for that project. Such
duration, as well as the particular work/service to be
performed, is defined in an employment agreement and is
made clear to the employees at the time of hiring.
In this case, petitioners did not have that kind of agreement
with respondents. Neither did they inform respondents of
the nature of the latter are work at the time of hiring.
Hence, for failure of petitioners to substantiate their claim
that respondents were project employees, we are
constrained to declare them as regular employees.
21. Pasos v. PNCC (Philippine National Construction
Corporation)
Facts: Petitioner was designated as Clerk II
(Accounting) and was assigned to the NAIA II
Project. However, his employment did not end on the
expiration but was extended until for more than two years.
He was rehired, his employment was extended, rehired, and
finally, his project employment was terminated. However,
his superior required him still to report.
For purposes of re-employment, he underwent medical
examination which revealed that he has pneumonitis. He
was asked to take sick leave. After the sick leave, he was
diagnosed to have Kochs disease and was required again to
have sick leave. However, upon his return after 74 days, he
was informed that he was already dismissed despite the fact
that he was checked to be fit to work.
Petitioner argued that he is deemed a regular employee of
PNCC due to his prolonged employment as a project
employee as well as the failure on the part of PNCC to
report his termination every time a project is completed. He
further contended that his termination without the benefit of
an administrative investigation was tantamount to an illegal
dismissal.
On the other hand, respondent said that he was a project
employee with specific dates of employment and
termination. It further contended that it complied with the
reportorial requirements.
Issue: W/N the petitioner is a regular employee.
Held: Yes. Duration of project employment should be
determined at the time of hiring. While for first three
months, petitioner can be considered a project employee of
PNCC, his employment thereafter, when his services were
extended without any specification of as to the duration,
made him a regular employee of PNCC. His status as a
regular employee was not affected by the fact that he was
assigned to several other projects and there were intervals
in between said projects since he enjoys security of tenure.
Moreover, failure of an employer to file termination reports
after every project completion proves that an employee is
not a project employee. Records clearly showed that
PNCC did not report the termination of petitioners
supposed project employment for the NAIA II Project to
the DOLE. Department Order No. 19, or the Guidelines
Governing the Employment of Workers in the Construction
Industry, requires employers to submit a report of an
employees termination to the nearest public employment
office every time an employees employment is terminated
due to a completion of a project. PNCC submitted as
evidence of its compliance with the requirement supposed
photocopies of its termination reports, each listing
2 | Page
petitioner as among the employees affected. Unfortunately,
none of the reports submitted pertain to the NAIA II
Project. Moreover, DOLE NCR verified that petitioner is
not included in the list of affected workers based on the
termination reports filed by PNCC. This certification from
DOLE was not refuted by PNCC.
Thus, petitioner was illegally dismissed and according to
Article 279 of the Labor Code, he is entitled to
reinstatement, full back wages, inclusive of allowances, and
to his other benefits or their monetary equivalent from the
time his compensation was withheld from him up to the
time of his actual reinstatement.
22. Raycor Aircontrol Systems, Inc. v. San Pedro
Facts: Petitioner hired respondent as tinsmith operator
subject to the condition that his employment shall
commence on August 24, 1995 and effective only for the
duration of the contract at the Uniwide Las Pinas project
after completion of which on November 18, 1995
(automatically terminates with no need of further notice).
The project lasted for one year so petitioner extended the
contract.
When the project was completed, petitioner extended
respondents employment by assigning him to its Olivarez
Plaza project until December 1996. Respondent was
rehired for a third project (Laguna) until April 1997 and a
fourth project (Alabang), then to a fifth project (Uniwide
Coastal).
Petitioner did not issue new contracts each time the
employment was extended.
In a Memorandum dated October 30, 1997, petitioner
declared that the contract was set to expire on November 1,
1997. When respondent reported for work on November 3,
he was informed that he had been terminated.
Respondent filed a complaint and the LA, NLRC and CA
sided with the petitioner.
Issue: W/N the petitioner is a regular employee.
Held: Yes. Petitioner insists that respondent was only a
project employee due to the nature of his business
(installation of air conditioning units). However, there
exists a reasonable connection between respondents
regular activity and the business, based on the fact that the
petitioner repeatedly engaged respondents services in 5
successive projects for 23 continuous months.
Aside from the 1995 employment contract, petitioner failed
to adduce evidence to prove: (1) each time it rehired
respondent, it intended for him to accomplish specific tasks
in a particular project, (2) that this was for a limited time
and (3) that it made such restrictions known to respondent
and the same were freely accepted by the latter. Petitioner's
failure to present such evidence is inexcusable, given its
access to such documents as project contracts, payment
remittances, employment records and payslips.
23. Macarthur Malicdem and Hermenigildo Flores vs.
Marulas Industrial Corporation
Facts: Petitioners Malicdem and Flores were hired by
Respondent Corporation as extruder operators in 2006.
Every year thereafter, they would sign a
Resignation/Quitclaim in favor of Marulas a day after their
contracts ended, and then sign another contract for one (1)
year until such time that they were told not to report to
work anymore. They were asked to sign a paper
acknowledging the completion of their contractual status.
After 4 years, they were informed that they are already
dismissed.
Claiming that they were illegally dismissed, the corporation
countered that their contracts showed that they were fixed
term employees for a specific undertaking which was to
work on a particular order of a customer for a specific
period. Their severance from employment then was due to
the expiration of their contracts.
Issue: W/N petitioners are regular employees.
Held: Yes.
Once a project or work pool employee has been: (1)
continuously, as opposed to intermittently, rehired by the
same employer for the same tasks or nature of tasks; and
(2) these tasks are vital, necessary and indispensable to the
3 | Page
usual business or trade of the employer, then the employee
must be deemed a regular employee, pursuant to Article
280 of the Labor Code and jurisprudence. To rule otherwise
would allow circumvention of labor laws in industries not
falling within the ambit of Policy Instruction No.
20/Department Order No. 19, hence allowing the
prevention of acquisition of tenurial security by project or
work pool employees who have already gained the status of
regular employees by the employers conduct.
Even granting that petitioners were project employees, they
can still be considered as regular as they were continuously
hired by the same employer for the same position as
extruder operators. Being responsible for the operation of
machines that produced sacks, their work was vital and
indispensable the business of the employer.
Moreover, there is no actual project. The only stipulations
in the contracts were the dates of their effectivity, the duties
and responsibilities of the petitioners as extruder operators,
the rights and obligations of the parties, and the petitioners
compensation and allowances. As there was no specific
project or undertaking to speak of, the respondents cannot
invoke the exception in Article 280 of the Labor Code.
The respondents cannot use the alleged expiration of the
employment contracts of the petitioners as a shield of their
illegal acts. The project employment contracts that the
petitioners were made to sign every year since the start of
their employment were only a stratagem to violate their
security of tenure in the company.
Note: The respondents invocation of William Uy
Construction Corp. v. Trinidad is misplaced because it is
applicable only in cases involving the tenure of project
employees in the construction industry. It is widely known
that in the construction industry, a project employees work
depends on the availability of projects, necessarily the
duration of his employment. It is not permanent but
coterminous with the work to which he is assigned. It
would be extremely burdensome for the employer, who
depends on the availability of projects, to carry him as a
permanent employee and pay him wages even if there are
no projects for him to work on. The rationale behind this is
that once the project is completed it would be unjust to
require the employer to maintain these employees in their
payroll.
24. Caramol v. NLRC
Facts: Petitioner, Rogelio Caramol, was hired by the
private respondent (Atlantic Gulf) as a project employee.
His employment contract was renewed 44 times by the
company.

However, when the petitioner joined the union strike, he
was not re-admitted.
Petitioner filed a complaint for illegal dismissal.
On the other hand, respondent said that the petitioner is a
project employee, and that the contract expired already.
LA ruled in favor of the petitioner but the NLRC reversed
the decision.
Issue: W/N the petitioner is a regular employee.
Held: Yes. The successive renewal of contracts makes the
petitioner a regular employee.
The respondent asserted that being in the construction
industry, it is not unusual for private respondent and other
similar companies to hire employees or workers for a
definite period only, or whose employment is co-terminus
with the completion of a specific project. However, with
the successive contracts of employment where petitioner
continued to perform the same kind of work, i.e., as rigger
throughout his period of employment, it is clearly manifest
that petitioner's tasks were usually necessary or desirable in
the usual business or trade of private respondent. There can
therefore be no escape from the conclusion that petitioner is
a regular employee of private respondent ATLANTIC
GULF.
Moreover, the respondent failed to present any report of
termination everytime the project is completed.
Hence, the employee is entitled to restatement and full
payment of backwages.
25. Price v. Innodata Phils, Inc.
Facts: Respondent was a domestic corporation engaged in
the data encoding and data conversion business. Petitioners
were employed as formatters by Innodata. They entered
into a contract denominated as a Contract of Employment
4 | Page
for a Fixed Period stipulating that the contract shall be for
a period of 1 year (February 16, 1999 to February 16,
2000).
During their employment, petitioners were assigned to
handle jobs for various clients of Innodata and once they
finished the job for one client, they were immediately
assigned to do a new job for another client. On February
16, 2009, the Human Resource Manager of Innodata wrote
to petitioners informing them of their last day of work
(February 16, 2000). According to Innodata, this was due to
the end of their contract.
Petitioners then filed a complaint for illegal dismissal
claiming that they should be considered regular employees
since their positions as formatters were necessary and
desirable to the usual business of Innodata as an encoding,
conversion and data processing company. They were also
neither considered project employees since their
employment was not coterminous with any project or
undertaking.
On the other hand, respondents contended that Innodata
was engaged in the business of data processing which
include wide array of services. Moreover, they claimed that
the petitioners were estopped since they entered into the
contracts knowingly and voluntarily.
The LA decided in favor of the petitioner. The NLRC and
the CA decided otherwise.
Issue: W/N the petitioners are regular employees.
Held: Yes. The applicable test to determine whether an
employment should be considered regular or non-regular is
the reasonable connection between the particular activity
performed by the employee in relation to the usual business
or trade of the employee.
In this case, petitioners were employed as formatters while
the primary business of Innodata is encoding. The
formatting of the data entered into the computers is an
essential part of the process of data encoding. Formatting
organizes the data encoded, making it easier to understand
for the clients and/or the intended users, and therefore
necessary and desirable in the business or trade of Innodata.
Secondly, the terms of the contracts of employment of the
petitioners were found to be meant only to circumvent
petitioners right of tenure and are therefore valid. This is
supported by the fact that the contracts were not only
ambiguous but also appeared to be tampered with.
Petitioners alleged and the contracts themselves state that
the petitioners were employed on February 17, 1999.
However, respondents asserted before the Labor Arbiter
that the contracts were effective only on September 6,
1999.
Thirdly, the employment contracts did not mention what
specific project or undertakings the petitioners were hired
for.
26. Olongapo Maintenance Services, Inc. v. Chantengco
Facts: OMSI is a corporation engaged in the business of
providing janitorial and maintenance services to various
clients, including GOCCs.
On various dates beginning 1986, OMSI hired the
respondents as janitors, grass cutters, and degreasers, and
assigned them at the NAIA.
In 1999, OMSI terminated their employment.
Petitioners claim that their termination was without just
cause and asked for payment of benefits.
On the other hand, the respondent said that the termination
was due to the expiration of the contract as they were
project employees.
LA denied but NLRC and CA reversed.
Issue: W/N the respondents are regular employees.
Held: Without question, respondents, as janitors, grass
cutters, and degreasers, performed work necessary or
desirable in the janitorial and maintenance service
business of OMSI.
5 | Page
The principal test in determining whether an employee is a
project employee is whether he/she is assigned to carry out
a specific project or undertaking, the duration and scope
of which are specified at the time the employee is engaged
in the project, or where the work or service to be performed
is seasonal in nature and the employment is for the duration
of the season. A true project employee should be assigned
to a project which begins and ends at determined or
determinable times, and be informed thereof at the time of
hiring.
In the instant case, the record is bereft of proof that the
respondents engagement as project employees has been
predetermined, as required by law. OMSI did not provide
convincing evidence that respondents were informed that
they were to be assigned to a specific project or
undertaking when OMSI hired them. Notably, the
employment contracts for the specific project signed by the
respondents were never presented. All that OMSI submitted
in the proceedings a quo are the service contracts between
OMSI and the MIAA.
Evidently cognizant of such neglect, OMSI attempted to
correct the situation by attaching copies of the application
forms of the respondents to its motion for reconsideration
of the Court of Appeals' Decision. Such practice cannot be
tolerated. This practice of submitting evidence late is
properly rejected as it defeats the speedy administration of
justice involving poor workers. It is also unfair.
27. PNOC-EDC v. NLRC
Facts: Petitioner PNOC-Energy Development Corporation
is a government-owned and controlled corporation engaged
in the exploration, development, and utilization of energy.
To augment its manpower requirement occasioned by the
increased activities in the development of its project (PAL
II), petitioner hired the respondents. The
termination/expiration of their respective employment were
specified in their initial employment contracts, which,
however, were renewed and extended on their respective
expiry dates. Upon expiration of the contract, they were
terminated.
The respondents filed a case for illegal dismissal. They
averred that they had rendered continuous and satisfactory
services from the dates of their respective employment.
Respondents further contended that their dismissal from
employment was a clear case of union busting for they had
previously sought union membership and actually filed a
notice of strike.
On the other hand, the petitioner said that they were
contractual employees.
LA dismissed the case. NLRC reversed. CA dismissed the
appeal.
Issue: W/N the respondents are regular employees.
Held: Yes. 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 the
engagement of the employee.12 However, petitioner failed
to substantiate its claim that respondents were hired merely
as project employees. A perusal of the records of the case
reveals that the supposed specific project or undertaking of
petitioner was not satisfactorily identified in the contracts
of respondents. Unmistakably, the alleged projects stated in
the employment contracts were either too vague or
imprecise to be considered as the "specific undertaking"
contemplated by law.
Moreover, petitioners act of repeatedly and continuously
hiring respondents to do the same kind of work belies its
contention that respondents were hired for a specific
project or undertaking.
Furthermore, there is likewise no proof that the project, or
the phase of work to which respondents had been assigned,
was already completed at the time of their dismissal.
28. Fegurin v. NLRC
Facts: The respondent company is engaged in the
construction business which hired petitioners either as
carpenters, masons or laborers on different dates.
The petitioners alleged that they were illegally dismissed
by the company for union activities. They asked for
reinstatement with full backwages. They said that they were
regular employees (a) as they had been employed since
1968 or 1969; (b) that they are members of the SSS; and (c)
that in the Collective Bargaining Agreement between the
Union to which petitioners are affiliated and the Company,
they were considered as permanent and regular
construction workers.
6 | Page
On the other hand, the respondent said that they were
project workers. As stated in their individual contracts of
employment and that pursuant to the same, their
employment was ipso facto terminated upon completion of
the project or the phase of work requiring the services of
mason/carpenter/laborer
LA dismissed the complaint. NLRC affirmed but ordered to
rehire the petitioners in future projects.
Issue: W/N the petitioners are regular employees
Held: Yes. In the case, the petitioners had been working
with the Company for 3-9 years. The company did not
rebut it. The Notices of Employment, therefore, do not
reflect accurately petitioners' respective lengths of service
as they give the starting point of petitioners' employment
Moreover, they performed activities usually necessary or
desirable in the usual business of the Company, their
employer, hence, their employment is deemed regular.
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 any particular
project.
Considering the nature of the work of petitioners, that of
carpenter, laborer or mason, their respective jobs would
actually be continuous and on-going. When a project to
which they are individually assigned is completed, they
would be assigned to the next project or a phase thereof. In
other words, they belonged to a "work pool" from which
the Company would draw workers for assignment to other
projects at its discretion. They are, therefore, actually "non-
project employees".
29. PNOC-EDC v. NLRC
Facts: In 1981, petitioner hired private respondent as
service driver. In 1985, the employment was terminated due
to contract expiration.
Private respondent complained of illegal dismissal, and
accused petitioners of withholding his backwages, overtime
pay, and separation pay.
Petitioner said that the respondent was a project employee
and was dismissed due to expiration of contract. Moreover,
it was entered voluntarily and knowingly.
The LA dismissed the case for lack of jurisdiction because
the petitioner is a GOCC which is not governed by the
Labor Law but by the Civil Service Code. However, the LA
assumed jurisdiction upon appeal.
Issue: W/N the respondent is a regular employee.
Held: No.
1. The fixed period of employment was knowingly and
voluntarily agreed upon 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:
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.
Petitioner's fixed contract of employment with private
respondent satisfy any of the guidelines above
However, the SC said that while they have reversed the
decision of the public respondent, they still affirm the
granting of backwages and separation pay due to the fact
that petitioners did not secure the necessary written
clearance from the Secretary of Labor in terminating
private respondent Mata.
30. Maraguinot, Jr. v. NLRC
FACTS:
- Alejandro Maraguinot (Maraguinot) alleges that he
was employed by Viva Films (Viva) as part of the
filming crew. He was later designated as Assistant
Electrician and then later promoted to Electrician.
- Paulinmo Enero (Enero) likewise claims that Viva
hired him as a member of the shooting crew.
- Maraguinot and Eneros tasks consisted of loading,
unloading and arranging movie equipment in the
shooting area.
- They later asked the company that their salaries be
adjusted in accordance with the minimum wage law.
In response, the company said that they would grant
the adjustment provided they signed a blank
employment contract. When they refused, they were
forced to go on leave. Upon his return, the company
refused to take Enero back. As regards Maraguinot,
he was dropped from the company payroll, but was
7 | Page
later returned. When again he refused to sign the
blank contract, his services were terminated.
- Maraguinot and Enero then sued for illegal dismissal.
- VIVA CLAIMS that they contract persons called
producers/assistant producers to make movies and
contend that Maraguinot and Enero are project
employees of these producers who act as independent
contractors. Hence there is no employer-employee
relationship between them. In addition, Viva claims
that Maraguinot was hired for the movie Mahirap
Maging Pogi, while Enero was hired for the movie
Sigaw ng Puso.
- LABOR ARBITER: ruled in favor of Maraguinot and
Enero and held that they were employees of Viva and
as such were illegally dismissed by the latter.
- NLRC: reversed the LA and ruled that the
circumstances of the case showed that they were only
project employees of Viva.
ISSUES:
- WON Maraguinot and Enero are employees of Viva.
- WON they were illegally dismissed.
HELD:
- They were regular employees.
- They were illegally dismissed.
RATIO:
ISSUE 1
- Viva claims that the producers were job contractors.
o However, under Section 8 of Rule VIII, Book
III of the Omnibus Rules Implementing the
Labor Code, to be considered a job
contractor, such associate producers must
have tools, equipment, machinery, work
premises and other materials necessary to
make motion picture. The associate producers
had none of these, and that in fact, the movie
making equipment is owned by Viva.
o Given that, these producers can be considered
only as labor-only contractors. As such is
prohibited, the law considers the person or
entity engaged in the same a mere agent or
intermediary of the direct employer.
- BUT EVEN GIVEN THAT, these producers cannot
be considered as job contractors, much less labor-
only contractors as they did not supply, recruit nor
hire the workers. In this case, it was Viva who
recruited the crew members from an available groups
of freelance workers which include the complainants.
- The relationship between Viva and its producers seem
to be that of agency as the latter makes movies on
behalf of Viva whose business is that of making
movies.
- The existence of an employer-employee relationship
between Maraguinot & Enero and Viva is further
supported by the following:
o The four elements under 4-fold test are
present.
o CONTROL: Viva has a Supervising Producer
that monitors the progress of the producers.
Viva, in effect, controls the outcome of the
film and the means through which it is
produced.
o SELECTION AND SUPERVISION: Viva
issued appointment slips with their corporate
name as the heading.
o SALARIES: It was likewise Viva who paid
the employees salaries.
ISSUE 2
- While Maraguinot and Enero were possibly initially
hired as project employees, they had attained the
status of regular employees.
- A project employee or a member of a work pool
may acquire the status of a regular employee when
the ff. concur:
o There is a continuous rehiring of project
employees even after cessation of the
project.
o The tasks performed are vital, necessary
and indispensable to the usual business or
trade of the employer.
- The length of time during which the employee was
continuously rehired is not controlling, but merely
serves as a badge of regular employment.
- In this case, Enero was employed for 2 years and
engaged in at least 18 projects; while Maragunot was
employed for 3 years and worked on at least 23
projects.
- Citing Lao vs. NLRC, the could held that a work
pool may exist although the workers in the pool do
not receive salaries and are free to seek other
employment during temporary breaks in the business,
provided that the workers shall be available when
called to report for a project. Although primarily
applicable to regular seasonal workers, this setup
can likewise be applied to project workers in so far
as the effect of temporary cessation of work is
concerned.
- Once a project or work pool employee has been (a)
continuously, as opposed to intermittently, rehired
by the same employer for the same tasks or nature
of tasks; (b) these tasks are vital, necessary, and
indispensable to the usual business or trade of the
employer, then the employee must be deemed a
regular employee, pursuant to Article 280 of the
Labor Code and jurisprudence.
- As Maraguinot and Enero have already gained the
status of regular employees, their dismissal was
unwarranted since the cause invoked for their
dismissal (completion of the project) is not one of the
valid causes for termination under Article 282 of the
Labor Code.
31. D.M. Consunji Construction Corp. v. Bello
FACTS:
Bello brought a complaint for illegal dismissal and
damages against DMCI and/or Rachel Consunji. In his
position paper, he claimed that DMCI had employed him as
a mason without any interruption from February 1, 1990
until October 10, 1997. He alleged that he had been a very
diligent and devoted worker and had served DMCI as best
as he could and without any complaints. He had never
violated any company rules and that his job as a mason had
been necessary and desirable in the usual business or trade
of DMCI.
Bello had been diagnosed to be suffering from pulmonary
tuberculosis, thereby necessitating his leave of absence.
Upon his recovery, he had reported back to work, but
DMCI had refused to accept him and had instead handed to
him a termination paper, stating that he had been
terminated due to "RSD" effective November 5, 1997
Bello did not know the meaning of "RSD" as the cause of
his termination and that such cause had not been explained
to him. He also claims that he had not been given prior
notice of his termination and he had not been paid
separation pay as mandated by law. At the time of his
dismissal, DMCIs projects had not yet been completed and
that even if he had been terminated due to an authorized
cause, he should have been given at least one month pay or
at least one-half month pay for every year of service he had
rendered, whichever was higher.
8 | Page
DMCI contended that Bello had only been a project
employee, as borne out by his contract of employment and
appointment papers and that although his last project
employment contract had been set to expire on October 7,
1997, he had tendered his voluntary resignation on October
4, 1997 for health reasons that had rendered him incapable
of performing his job, per his resignation letter.
The LA ruled that Bello has been illegally dismissed. The
NLRC reversed the LA decision. On appeal, the CA
reversed the NLRC decision and ruled that Bello had
already acquired the status of a regular employee although
he was only a project employee. Petitioner sought for
reconsideration but the same was denied. Hence, this
petition.
ISSUE: Whether or not Bello is a regular employee and
he voluntarily resigned
HELD: CA decision affirmed
Labor Law- regularization of a project employee
In the context of the law, Bello was a project employee of
DMCI at the beginning of their employer-employee
relationship. The project employment contract they then
entered into clearly gave notice to him at the time of his
engagement about his employment being for a specific
project or phase of work. He was also thereby notified of
the duration of the project, and the determinable
completion date of the project.
However, the history of Bellos appointment and
employment showed that he performed his tasks as a mason
in DMCIs various constructions projects. The work of a
mason like him a skilled workman working with stone or
similar material was really related to building or
constructing, and was undoubtedly a function necessary
and desirable to the business or trade of one engaged in the
construction industry like DMCI. His being hired as a
mason by DMCI in not one, but several of its projects
revealed his necessity and desirability to its construction
business.
It is settled that the extension of the employment of a
project employee long after the supposed project has been
completed removes the employee from the scope of a
project employee and makes him a regular employee. In
this regard, the length of time of the employees service,
while not a controlling determinant of project employment,
is a strong factor in determining whether he was hired for a
specific undertaking or in fact tasked to perform functions
vital, necessary and indispensable to the usual business or
trade of the employer.
Labor Law- An employer must prove that the
resignation was voluntary, and its evidence thereon
must be clear, positive and convincing. The employer
cannot rely on the weakness of the employee's evidence.
DMCI claims that Bello voluntarily resigned from work. It
presented his supposed handwritten resignation letter to
support the claim. However, Bello denied having resigned,
explaining that he had signed the letter because DMCI had
made him believe that the letter was for the purpose of
extending his sick leave.
In resolving the matter against DMCI, the CA relied on the
conclusion by ELA Panganiban-Ortiguerra that she could
not give credence to the voluntary resignation for health
reasons in the face of Bellos declaration that he had been
led to sign the letter to obtain the extension of his leave of
absence due to illness, and on her observation that "the
handwriting in the supposed resignation letter is undeniably
different from that of complainant," something that she said
DMCI had not rebutted.
The CAs reliance on the conclusion and finding by ELA
Panganiban-Ortiguerra was warranted. Her observation that
the handwriting in the resignation letter was "undeniably
different" from that of Bello could not be ignored or
shunted aside simply because she had no expertise to make
such a determination, as the NLRC tersely stated in its
decision. To begin with, her supposed lack of expertise did
not appear in the records, rendering the NLRC's statement
speculative and whimsical. If we were now to outrightly
discount her competence to make that observation, we
would disturb the time-honored practice of according
respect to the findings of the first-line trier of facts in order
to prefer the speculative and whimsical statement of an
appellate forum like the NLRC. Yet, even had the letter
been actually signed by him, the voluntariness of the
resignation could not be assumed from such fact alone.
His claim that he had been led to believe that the letter
would serve only as the means of extending his sick leave
from work should have alerted DMCI to the task of proving
the voluntariness of the resignation. It was obvious that, if
his claim was true, then he did not fully comprehend the
import of the letter, rendering the resignation farcical. The
doubt would then be justifiably raised against the letter
being at all intended to end his employment. Under the
circumstances, DMCI became burdened with the obligation
to prove the due execution and genuineness of the
document as a letter of resignation.
It is axiomatic in labor law that the employer who
interposes the defense of voluntary resignation of the
employee in an illegal dismissal case must prove by clear,
positive and convincing evidence that the resignation was
voluntary; and that the employer cannot rely on the
weakness of the defense of the employee. The requirement
rests on the need to resolve any doubt in favor of the
working man.
AFFIRMED.
32. Millenium Erectors Corporation v. Magallanes
FACTS:
Magallanes is a utility man working for Tiu, the CEO of
Respondent. In July 2004, he was dismissed because of old
age, which prompted him to file an illegal dismissal
complaint before the Labour Arbiter. Petitioner filed a
position paper arguing that respondent was a project
employee whom it hired for a building project in Libis on
January 30, 2003, to prove which it submitted the
employment contract signed by him;that on August 3, 2004,
respondents services were terminated as the project was
nearing completion;and he was given financial assistance in
the amount ofP2,000, for which he signed a quitclaim and
waiver.
The Labour Arbiter ruled in favour of petitioner, holding
that respondent knew of his status as project employee, and
that the project was completed. On appeal to the NLRC, it
held that Respondent was a regular employee, and because
of the payrolls, it is evident that Respondent was employed
for 16 years. The NLRC thus concluded that while
respondents work as a utility man may not have been
9 | Page
necessary or desirable in the usual business of petitioner as
a construction company, that he performed the same
functions continuously for 16 years converted an otherwise
casual employment to regular employment, hence, his
termination without just or authorized cause amounted to
illegal dismissal.
Petitioner filed an MR which was denied, alleging that
motion for reconsideration which it treated as an appeal
was not perfected, it having been belatedly filed. The CA
affirmed this stance, on appeal by Petitioner.
The petitioners file a petition for review on certiorari.
ISSUE:
1. Whether or not the dismissal of the Labour Arbiter has
become final and executor because of the failure of the
requirements for the perfection of appeal
HELD:
No. Petition fails.
Labor Law: Procedural Rules and Technicalities
In labor cases, rules of procedure should not be applied in a
very rigid and technical sense.They are merely tools
designed to facilitate the attainment of justice, and where
their strict application would result in the frustration rather
than promotion of substantial justice, technicalities must be
avoided.
The requirement regarding verification of a pleading is
formal, not jurisdictional. Such requirement is simply a
condition affecting the form of pleading, the non-
compliance of which does not necessarily render the
pleading fatally defective.
As for the requirement on proof of service, it may also be
dispensed with since in appeals in labor cases, non-service
of copy of the appeal or appeal memorandum to the adverse
party is not a jurisdictional defect which calls for the
dismissal of the appeal.
Labor Law: Project employees
The repeated and continuing need for respondent's services
is sufficient evidence of the necessity, if not
indispensability, of services to petitioner's business and, as
a regular employee, he could only be dismissed from
employment for a just or authorized cause.
Petition DENIED.
33. Caseres v. Universal Robina Milling Corporation
FACTS: Universal Robina Sugar Milling Corporation
(respondent) is a corporation engaged in the cane sugar
milling business. Petitioners were employees.
At the start of their respective employments, they were
made to sign a Contract of Employment for Specific
Project or Undertaking. Petitioners contracts were renewed
from time to time, until May 1999 when they were
informed that their contracts will not be renewed anymore.
Petitioners filed a complaint for illegal dismissal,
regularization, incentive leave pay, 13th month pay,
damages and attorneys fees.
LABOR ARBITER: They were not regular employees
NLRC and CA: affirmed
ISSUE: WON they are regular employees
HELD: They are NOT regular employees
ART. 280. Regular and Casual Employees. The provision
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 principal test for determining whether an employee is a
project employee or a regular employee is whether 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.
A true project employee should be assigned to a project
which begins and ends at determined or determinable
times, and be informed thereof at the time of hiring.
The very nature of the terms and conditions of
complainants hiring reveals that they were required to
perform phases of special projects for a definite period
after, their services are available to other farm owners. This
is so because the planting of sugar does not entail a whole
year operation, and utility works are comparatively small
during the off-milling season.
It must be noted that there were intervals in petitioners
respective employment contracts, and that their work
depended on the availability of such contracts or projects.
10 | P a g e
Consequently, the employment of URSUMCOs work force
was not permanent but co-terminous with the projects to
which the employees were assigned and from whose
payrolls they were paid
The fact that petitioners were constantly re-hired does not
ipso facto establish that they became regular employees.
Their respective contracts with respondent show that there
were intervals in their employment. In petitioner Caseress
case, while his employment lasted from August 1989 to
May 1999, the duration of his employment ranged from one
day to several months at a time, and such successive
employments were not continuous. With regard to
petitioner Pael, his employment never lasted for more than
a month at a time. These support the conclusion that they
were indeed project employees, and since their work
depended on the availability of such contracts or projects,
necessarily the employment of respondents work force was
not permanent but co-terminous with the projects to which
they were assigned and from whose payrolls they were
paid.
Moreover, even if petitioners were repeatedly and
successively re-hired, still it did not qualify them as regular
employees, as length of service is not the controlling
determinant of the employment tenure of a project
employee, but whether the employment has been fixed for a
specific project or undertaking, its completion has been
determined at the time of the engagement of the employee.
Further, the proviso in Article 280, stating that an employee
who has rendered service for at least one (1) year shall be
considered a regular employee, pertains to casual
employees and not to project employees.
34. Hanjin Heavy Industries and Construction Co., Ltd.
v. Ibanez
HANJIN HEAVY INDUSTRIES vs. IBANEZ| GR 170181
| June 26 2008FACTS
: Felicito Ibanez (tireman), Elmer Gacula (Crane Operator),
ElmerDagotdot (Welder), Aligwas Carolino (Welder), Ruel
Calda (Warehouseman)filed a complaint at the NLRC for
illegal dismissal with prayer forreinstatement and payment
of backwages. The group alleged that thecontract they have
is good for three months, subject to automatic renewalif
there is no notice of termination from Hanjin, and that the
contract wouldautomatically terminate upon the completion
of the project. They furtheraverred that during the time they
were dismissed, the project was still ongoing and Hanjin
hired people for the positions that they had vacated.Lastly,
they also allege that they are entitled to a completion bonus
as partof the industry practice and this was substantiated by
past payrollpayments. Hanjin failed to furnish a copy of the
contract agreements withthe dismissed group. Instead it
showed the quitclaims that had beenexecuted by the group
that released Hanjin and its representatives fromany claims
with their employment. It contained clearance certificates
thatshow that respondents are free from accountability.
ISSUE
: WON the members of the dismissed group are project
employees?

HELD

: No, Hanjin was unable to prove they were not regular

employees The rehiring of construction workers on a
project to project basis does notconfer upon them regular
employment status, since their re-hiring is only anatural
consequence of the fact that experienced construction
workers arepreferred. Employees who are hired for
carrying out a separate job, distinctfrom the other
undertakings of the company,

the scope and duration of which has been determined and

made known to the employees at the timeof the
employment

, are properly treated as project employees and theirservices

may be lawfully terminated upon the completion of a
project.Should the terms of their employment fail to
comply with this standard,they cannot be considered
project employees. Hanjin was unable to showthe written
contracts it had with the workers. White the absence of
thecontract does not grant permanent status it is the burden
of the employerto prove that the employees were aware that
their contract with thecompany is for per project only.
While Hanjin submitted a terminationreport including the
workers names to prove that the services of theirservices
were only contracted for a per project basis, Hanjin only
submittedone report. It was unable to disprove the
allegation of the workers thatthey were part of a pool that
Hanjin contacts once a project is to becompleted.
Employers cannot mislead their employees, whose work
isnecessary and desirable in the former's line of business,
by treating themas though they are part of a work pool from
which workers could becontinually drawn and then
assigned to various projects and thereafterdenied regular
status at any time by the expedient act of filing
a Termination Report. This would constitute a practice in
which an employeeis unjustly precluded from acquiring
security of tenure, contrary to publicpolicy, morals, good
customs and public order.Hanjin alleged that per
Department Order 19, Series of 1993 of DOLE, thepayment
of completion bonus is further proof that the workers were
onlyproject employees as Hanjin is mandated by law to pay
it to the temporaryworkers whose contracts are about to end
upon the completion of theproject. SC views the
completion bonus terminology here reflects the factthat the
project has already been completed and that is the premium
theywished to pay. Quitclaims are viewed with disfavor,
especially when a. There is clear proof that the waiver was
wangled from an unsuspectingor gullible personb. Where
the terms are unconscionable in its face. For quitclaims to
bevalid, it must constitute a reasonable settlement
commensurate to theirlegal rights. It does not preclude
them from seeking benefits they wereentitled to such as
back wages. The respondents were also not granted thetwin
requirements of notice and hearing.
Seasonal Employment
1. Mercado v. NLRC, GR 79869, Sept. 5, 1991
Facts: Petitioners were agricultural workers of the private
respondent's sugar land who were dismissed. They had
worked in all agriculture phases for several years in the said
sugar land.
The respondent denied that petitioners were regular
employees alleging that their services were engaged
through 'mandarols' or supply workers to do a particular
phase of the 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.
As a result, the petitioners filed a complaint for illegal
dismissal, underpayment and non-payment of benefits.
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.
The Labor Arbiter held that the petitioners were not regular
employees. It is of their opinion that the filing of the
complaint was triggered by allegations of theft on the son
of one of the petitioners. 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.
However, as a matter of equity the NLRC allowed the
petitioners to get financial assistance to be divided among
them. The NLRC affirmed this ruling.
Issue: W/N the petitioners are regular and permanent farm
workers

Held: No, they are project/seasonal employees. A project

employee is one whose employment has been fixed for a
specific project or undertaking, the completion has been
determined at the time of engagement, or where work or
service is seasonal in nature and employment is for the
duration of the season.

11 | P a g e

It is not correct that they be deemed regular employees
despite working for more than 1 year because the proviso
only applies to casual employee. They are deemed as
project or more correctly seasonal employees.
As such, the termination of employment cannot be
considered as illegal dismissal. The petitioners are free to
contract their services to work for other farm owners.
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.
2. Universal Robina Sugar Milling Corp. v. Acibo, G.R.
No. 186439, [January 15, 2014]
Facts: The petitioner is a domestic corporation engaged in
the sugarcane milling business.
The complainants were employees of the petitioner and
were hired on various dates and on different capacities, i.e.,
drivers, crane operators, bucket hookers, welders,
mechanics, laboratory attendants and aides, steel workers,
carpenters, among others. The complainants signed
contracts of employment for a period of 1 month or for a
given season, and were repeatedly hired to perform the
same duties and, for every engagement, were required to
sign new employment contracts for the same duration of
one month or given season.
On August 23, 2002, the complainants filed before the
Labor Arbiter complaints for regularization, entitlement to
the benefits under the existing Collective Bargaining
Agreement (CBA), and attorneys fees.
LA dismissed the case because they were project
employees performing duties not directly related to the
petitioners main operations; hence, they were not entitled
to the benefits granted under the CBA that, as provided,
covered only the regular employees of URSUMCO. 7 out
of 22 complainants appealed. NLRC reversed the decision.
CA partially ruled in favor of them as regular employees
but cannot get benefits from the CBA because their tasks
were not indispensable.
Issue: W/N the respondents are regular employees.
Held: The respondents are regular seasonal employees of
URSUMCO.
12 | P a g e
Article 280 of the Labor Code provides for three kinds of
employment arrangements, namely: regular,
project/seasonal and casual.
Regular employment refers to that arrangement whereby
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer. By way of an exception, paragraph
2, Article 280 of the Labor Code also considers regular a
casual employment arrangement when the casual
employees engagement has lasted for at least one year,
regardless of the engagements continuity. The controlling
test in this arrangement is the length of time during which
the employee is engaged.
Project employment, on the other hand, contemplates on
arrangement whereby the employment has been fixed for a
specific project or undertaking whose completion or
termination has been determined at the time of the
engagement of the employee. The services of the project
employees are legally and automatically terminated upon
the end or completion of the project as the employees
services are coterminous with the project.
Seasonal employment operates much in the same way as
project employment, albeit it involves work or service that
is seasonal in nature or lasting for the duration of the
season. To exclude the asserted seasonal employee from
those classified as regular employees, the employer must
show that: (1) the employee must be performing work or
services that are seasonal in nature; and (2) he had been
employed for the duration of the season. Hence, when the
seasonal workers are continuously and repeatedly hired to
perform the same tasks or activities for several seasons or
even after the cessation of the season, this length of time
may likewise serve as badge of regular employment.
Casual employment refers to any other employment
arrangement that does not fall under any of the first two
categories.
In the case at bar, the respondents were made to perform
various tasks that did not at all pertain to any specific phase
of URSUMCO's strict milling operations that would
ultimately cease upon completion of a particular phase in
the milling of sugar; rather, they were tasked to perform
duties regularly and habitually needed in URSUMCO's
operations during the milling season. The respondents
duties as loader operators, hookers, crane operators and
drivers were necessary to haul and transport the sugarcane
from the plantation to the mill; laboratory attendants,
workers and laborers to mill the sugar; and welders,
carpenters and utility workers to ensure the smooth and
continuous operation of the mill for the duration of the
milling season, as distinguished from the production of the
sugarcane which involves the planting and raising of the
sugarcane until it ripens for milling. They perform
activities that are necessary and desirable in sugarcane
production. Also, the respondents were regularly and
repeatedly hired to perform the same tasks year after year.
This regular and repeated hiring of the same workers (two
different sets) for two separate seasons has put in place,
principally through jurisprudence, the system of regular
seasonal employment in the sugar industry and other
industries with a similar nature of operations. They did not
also have any employment in other places during off-
season.
To reiterate, the respondents are regular seasonal
employees, as the CA itself opined when it declared that
private respondents who are regular workers with respect to
their seasonal tasks or activities and while such activities
exist, cannot automatically be governed by the CBA
between petitioner URSUMCO and the authorized
bargaining representative of the regular and permanent
employees.
3. Abasolo v. NLRC, GR 118475, Nov. 29, 2000
Facts: The private respondent La Union Tobacco Redrying
Corporation (Lutorco) engaged in buying/processing of
tobacco and its by-products. They worked during the
tobacco season.
The petitioners worked in respondent company but work
was interrupted when Compania General de Tabaccos de
Filipinas (Tabacalera) took over the Lutorco operations due
to alleged losses.
Aggrieved, the petitioners filed a complaint for separation
pay and dismissal because they are regular employees and
that they work for many years in the company. According
to them, the fact that some of them work only during the
tobacco season does not affect their status as regular
workers since they have been repeatedly called back to
work for every season, year after year.
On the other hand, the respondent contended that it is
exempt from payment of separation pay and denied that
there was termination of employees' services (petitioners
were the one who refused to report for work), and that it
stopped its operations due to the absence of capital and
operating funds caused by losses incurred from 1990 to
1992 and absence of operating funds for 1993, coupled
with adverse financial conditions and downfall of prices
The Labor Arbiter dismissed the complaint and held that
the petitioners are not entitled to separation benefits since
Lutorco ceased operations due to serious business losses.
The NLRC affirmed said ruling.
Issue: W/N the petitioners are seasonal workers
Held: No, the petitioners are considered regular and
seasonal employees. They performed services necessary
and indispensable to Lutorco's business which is a badge
of regular employment.
13 | P a g e
The nature of one's employment does not depend solely on
the will or word of the employer nor on the procedure of
hiring and manner of designating the employee but on the
nature of the activity to be performed considering the
employer's nature of business and the duration and scope of
work to be done.
As held in previous decisions, seasonal workers are those
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.
Since they are regular and seasonal employees, they are
entitled to separation pay.
Note: Private respondents reliance on the case of Mercardo
v. NLRC is misplaced considering that since in said case of
Mercado, although the respondent company therein
consistently availed of the services of the petitioners therein
from year to year, it was clear that petitioners therein were
not in respondent companys regular employ. Petitioners
therein performed different phases of agricultural work in a
given year. However, during that period, they were free to
contract their services to work for other farm owners, as in
fact they did. Thus, the Court ruled in that case that their
employment would naturally end upon the completion of
each project or phase of farm work for which they have
been contracted.
4. Hacienda Fatima v. National Federation of Sugarcane
Workers Food and General Trade, GR 149440, Jan.
28, 2003
Facts: The petitioner disfavored the fact that the private
respondent employees have formed a union. When the
union became the collective bargaining representative in
the certification election, the petitioner refused to sit down
to negotiate a CBA. Moreover, the respondents were not
given work for a month amounting to unjustified dismissal.
As a result, the complainants staged a strike to protest but
were settled through a memorandum of agreement.
Subsequently, alleging that complainant failed to load some
wagons as provided in the agreement, the petitioners
revoke the agreement. No work assignment was given to
them.
Another agreement was entered again. The company also
produced a list which contained those considered as regular
employees for the payroll.
The petitioners again revoked the agreement after accusing
them that they were choosy in their work.
The NLRC held that there was illegal dismissal and this
was affirmed by the Court of Appeals.
Issue: W/N the employees are regular workers
Held: Yes, they are regular and not seasonal employees.
The SC held that for respondents to be excluded from those
classified as regular employees, it is not enough (a) that
they perform work or services that are seasonal in nature
and that (b) 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.
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.
Notes: In Abasolo v. National Labor Relations
Commission, 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.
14 | P a g e
The ruling in Mercado v. NLRC is not applicable since in
that case, the workers were merely required to perform
phases of agricultural work for a definite period of time,
after which, their services are available to other employers.
The management's sudden change of assignment reeks of
bad faith. It is likewise guilty of ULP.
5. Ampeloquio v. Jaka Distribution, Inc., GR 196936,
July 2, 2014
Facts: The petitioner previously filed a case against the
respondent for illegal dismissal. He was reinstated by the
Labor Arbiter; hence, resuming work as a merchandiser
receiving daily wage of 252 pesos without meal and
transportation allowance. A year after, he was transferred
outside Metro Manila. At that time, he was receiving the
same daily wage. He then requested for his salary to be
adjusted through a letter. He alleged that other employees
were receiving wages higher than what he receives
notwithstanding that he is the most senior among his co-
employees. Unheeded, he filed a case again to NLRC.
The petition was affirmed by the LA and the NLRC but
was reversed upon appeal. The NLRC stated that the
respondent company was granted exemption in the
implementation of wage orders.
Issue: W/N the petitioner is entitled to salary adjustment.
Held: No. He is not entitled to the same terms and
conditions of employment as that which was offered to the
other regular employees (not merchandisers) subsequently
hired by JAKA. Ampeloquio cannot likewise compare his
wages to that received by "casual or contractual
merchandisers" or merchandisers who are admittedly
outsourced from manpower agencies or those who are
considered seasonal employees hired only during peak
season when JAKA is in need of extra merchandisers.
Receipt by these merchandisers of a benefit such as
transportation or meal allowance is part of the monies they
receive from their employer and embedded in the contract
price of the service agreement the employer has with
JAKA.
In the same vein, seasonal employees hired only for the
peak season do not have the same status as regular
employees and do not receive amounts considered as part
of a compensation and benefits scheme for regular
employees. These seasonal employees only receive
payment for work rendered during the period for which
they were hired, i.e., peak season. The wages and other
monies seasonal employees may receive for the duration of
their limited employment period constitute bulk or
wholesale payment for services rendered.

Seasonal employment involves work or service that is
seasonal in nature or lasting for the duration of the season.
Seasonal employees differ from those classified as regular
employees, in that: (1) the employee must be performing
work or services that are seasonal in nature; and (2) he had
been employed for the duration of the season.
Casual Employment
6. Capule v. NLRC, et al., GR 90653, Nov. 12, 1990
Facts: Petitioners are employees of Yakult. They were
hired to cut cogon grass and weeds at the back of the
factory building used by the private respondents. They
were not required to work on fixed schedule and they
worked on any day of the week on their own discretion and
convenience.
The services of the petitioners were terminated by the
private respondent; thus, petitioners filed a case for illegal
dismissal.
The LA rendered a decision in favor of petitioners which
was reversed by the NLRC.
Issue: W/N the petitioners are regular employees.
Held: No. The usual business or trade of private
respondents is the manufacture of cultured milk. The
cutting of the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business of the
private respondents. Moreover, they were dismissed before
the expiration of 1-year period which can make them as
regular employees.
7. San Miguel Corp. v. National Labor Relations
Commission, G.R. No. 125606, [October 7, 1998]
Facts: Private respondent, Francisco De Guzman, was
hired by the petitioner to repair and upgrade of furnace for
a period of 4 months. Later, he re-hired for the same task
for a period of 3 months.
August 1, 1991, complainant saw his name in a
Memorandum posted at the Companys Bulletin Board as
among those who were considered dismissed.
He filed a case in the LA which was denied. NLRC
reversed it. Accordingly, respondents scheme of
subsequently re-hiring complainant after only ten (10) days
15 | P a g e
from the last day of the expiration of his contract of
employment for a specific period, and giving him again
another contract of employment for another specific period
cannot be countenanced. This is one way of doing violence
to the employees constitutional right to security of tenure
under which even employees under probationary status are
amply protected.
Issue: W/N the private respondent is a regular employee.
Held: No.
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 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. x x x (Italics supplied)
The respondents employment clearly falls within the
definition of project employees under the second kind of
project employment in the ALU-TUCP case discussed
above. Clearly, private respondent was hired for a specific
project that was not within the regular business of the
corporation. For petitioner is not engaged in the business of
repairing furnaces but manufacturing of glasses. Although
the activity was necessary to enable petitioner to continue
manufacturing glass, the necessity therefor arose only when
a particular furnace needs a repair.
While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not
be supposed that every dispute will be automatically
decided in favor of labor. Management has also rights,
which, as such, are entitled to respect and enforcement in
the interest of fair play.
Moreover, his employment is not at least 1 year of service
albeit being broken.
8. KILUSAN-OLALIA v. Drilon, GR Nos. 77629 and
78791, May 9, 1990.
Facts: KILUSAN-OLALIA filed a notice of strike against
Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity)
for unfair labor practices based on the following alleged
acts: (1) dismissal of union members (KILUSAN-
OLALIA); (2) non-regularization of casuals/contractuals
with over six months service; (3) non-implementation of
appreciation bonus for 1982 and 1983; (4) non-payment of
minimum wages; (5) coercion of employees; and (6)
engaging in CBA negotiations despite the pendency of a
petition for certification election. This was later amended to
withdraw the charge of coercion but to add, as new charges,
the dismissal of Roque Jimenez and the non-payment of
backwages of the reinstated Emerito Fuentes.
On the other hand, KIMBERLY asserted that there is no
employer-employee relationship between the casual
workers and the company because the employees are under
the employ of Rank Manpower Company (RANK for
short), and that the med-arbiter has no jurisdiction to rule
on the issue of the status of the challenged workers which
is one of the issues covered by the assumption order.
9. San Miguel v. Teodosio, GR 163033, Oct. 2, 2009
Facts: In 1991, respondent was hired by petitioner as
casual forklift operator. He continuously worked from
September 1991 to March 1992 until he was notified to
rest. He was re-hired for 2 more times.

The MOLE rendered decision against KIMBERLY and

ordered for the regularization of casual employees.
Issue: W/N said workers, not performing janitorial or yard
maintenance service, became regular employees of
KIMBERLY.
Sometime in August 1993, respondent was made to sign an
employment with a fixed period contract which provides
when his term will end (from August 7, 1993 to August 30,
1995 or upon cessation of the instability/fluctuation of the
market demand, which comes first).

Held: The law thus provides for two. kinds of regular

After sometime, he was transferred as case piler in the
employees, namely: (1) those who are engaged to perform
bottling section due to automation. He expressed his
activities which are usually necessary or desirable in the
opposition through a letter but to no avail. He also
usual business or trade of the employer; and (2) those who
expressed that he like to be a bottler as he was interested in
have rendered at least one year of service, whether
becoming a regular crew of the company.
continuous or broken, with respect to the activity in which
they are employed.

The individual petitioners herein who have been adjudged

to be regular employees fall under the second category. However, the company notified him that his employment
These are the mechanics, electricians, machinists machine will be terminated earlier due to reorganization and
shop helpers, warehouse helpers, painters, carpenters, streamlining of its operations.
pipefitters and masons. It is not disputed that these workers
have been in the employ of KIMBERLY for more than one
year at the time of the filing of the Petition for certification
election by KILUSAN-OLALIA. The respondent then expressed his dismay. He signed a
release document and accepted his separation pay with
Owing to their length of service with the company, these
protest. He then filed a complaint in the NLRC for illegal
workers became regular employees, by operation of law,
dismissal and underpayment of wages and other benefits.
one year after they were employed by KIMBERLY through
He contended that he is a regular employee considering that
RANK. While the actual regularization of these employees
he has been working as a forklift operator for several years
entails the mechanical act of issuing regular appointment
before he signed the employment contract.
papers and compliance with such other operating
procedures as may be adopted by the employer, it is more
in keeping with the intent and spirit of the law to rule that
the status of regular employment attaches to the casual
worker on the day immediately after the end of his first SMC said that it has no slightest intention to circumvent the
year of service. To rule otherwise, and to instead make their law. Further, since petitioner was not able to perform, he
regularization dependent on the happening of some was not able to be regularized. Furthermore, because he is
contingency or the fulfillment of certain requirements, is to only a casual employee, he is not entitled to the benefits
impose a burden on the employee which is not sanctioned accorded to regular employees. Moreover, the petitioner
by law. was terminated due to legal ground, i.e. termination of
contract.
That the first stated position is the situation contemplated
and sanctioned by law is further enhanced by the absence
of a statutory limitation before regular status can be
acquired by a casual employee. The law is explicit. As long LA and NLRC denied. CA reversed.
as the employee has rendered at least one year of service,
he becomes a regular employee with respect to the activity
in which he is employed. The law does not provide the
qualification that the employee must first be issued a Issue: W/N the petitioner is a regular employee.
regular appointment or must first be formally declared as
such before he can acquire a regular status. Obviously,
where the law does not distinguish, no distinction should be
drawn.
Held: Yes; hence, he is entitled to security of tenure and
could only be dismissed on just or authorized causes.

16 | P a g e

Based on the circumstances surrounding respondents
employment by SMC, this Court is convinced that he has
attained the status of a regular employee long before he
executed the employment contract with a fixed period.
Although respondent was initially hired by SMC as a
casual employee, respondent has attained the status of a
regular employee. Respondent was initially hired by SMC
on September 5, 1991 until March 1992. He was rehired for
the same position in April 1992 which lasted for five to six
months. After three weeks, he was again rehired as a
forklift operator and he continued to work as such until
August 1993. Thus, at the time he signed the Employment
with a Fixed Period contract, respondent had already been
in the employ of SMC for at least twenty-three (23)
months.
The Labor Code provides that a casual employee can be
considered as a regular employee if said casual employee
has rendered at least one year of service regardless of the
fact that such service may be continuous or broken.
Moreover, since respondent was already a regular
employee months before the execution of the Employment
with a Fixed Period contract, its execution was merely a
ploy on SMCs part to deprive respondent of his tenurial
security. Hence, no valid fixed-term contract was executed.
Furthermore, SMC cannot take refuge in the Receipt and
Release document signed by the respondent. Generally,
deeds of release, waivers, or quitclaims cannot bar
employees from demanding benefits to which they are
legally entitled or from contesting the legality of their
dismissal, since quitclaims are looked upon with disfavor
and are frowned upon as contrary to public policy.
Fixed Term Employment
10. Brent School, Inc. v. Alegre, GR 48494, Feb. 5, 1990
Facts: Private respondent (Alegre) was engaged as athletic
director by petitioner Brent School, Inc. at a yearly
compensation of P20,000.00. The contract fixed a specific
term for its existence, i.e. 5 years.
3 months before the expiration of the contract, respondent
was termination due to completion of contract. He
accepted such with protest. According to him, he is already
deemed as regular employee since his services were
necessary and desirable in the usual business of his
employer, and his employment had lasted for five years.
The Regional Director and Secretary of Labor allowed his
reinstatement with full backwages.
Issue: W/N he is a regular employee.
17 | P a g e
Held: No. The employment contract between them began
in 1971 before the Labor Code was promulgated
(November 1, 1974). At that time, the validity of term
employment was impliedly recognized by the Termination
Pay Law. Under the present Labor Code, article 320
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." Article 321 prescribed
the just causes for which an employer could terminate "an
employment without a definite period." And Article 319
undertook to define "employment without a fixed period"
in the following manner: 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.
It is plain then that when the employment contract was
signed between Brent School and Alegre, 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.
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.
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.
Note:
1. The fixed period of employment was knowingly
and voluntarily agreed upon 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:
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.
11. Innodata Philippines, Inc. v. Quejada-Lopez, GR
162839, October 12, 2006
Facts: Respondent was a domestic corporation engaged in
the data encoding and data conversion business. Petitioners
were employed as formatters by Innodata. They entered
into a contract denominated as a Contract of Employment
for a Fixed Period stipulating that the contract shall be for
a period of 1 year (February 16, 1999 to February 16,
2000).
During their employment, petitioners were assigned to
handle jobs for various clients of Innodata and once they
finished the job for one client, they were immediately
assigned to do a new job for another client. On February
16, 2009, the Human Resource Manager of Innodata wrote
to petitioners informing them of their last day of work
(February 16, 2000). According to Innodata, this was due to
the end of their contract.
Petitioners then filed a complaint for illegal dismissal
claiming that they should be considered regular employees
since their positions as formatters were necessary and
desirable to the usual business of Innodata as an encoding,
conversion and data processing company. They were also
neither considered project employees since their
employment was not coterminous with any project or
undertaking.
On the other hand, respondents contended that Innodata
was engaged in the business of data processing which
include wide array of services. Moreover, they claimed that
the petitioners were estopped since they entered into the
contracts knowingly and voluntarily.
The LA decided in favor of the petitioner. The NLRC and
the CA decided otherwise.
Issue: W/N the petitioners are fixed-term employees.
18 | P a g e
Held: No.
The issue of whether petitioners were illegally dismissed
by respondents is ultimately dependent on the question
of whether petitioners were hired by INNODATA under
valid fixed-term employment contracts.
After a painstaking review of the arguments and
evidences of the parties, the Court finds merit in the
present Petition. There were no valid fixed-term
contracts and petitioners were regular employees of the
INNODATA who could not be dismissed except for just
or authorized cause.
The employment status of a person is defined and
prescribed by law and not by what the parties say it
should be.19 Equally important to consider is that a
contract of employment is impressed with public
interest such that labor contracts must yield to the
common good.20 Thus, provisions of applicable statutes
are deemed written into the contract, and the parties
are not at liberty to insulate themselves and their
relationships from the impact of labor laws and
regulations by simply contracting with each other.21
While this Court has recognized the validity of fixed-term
employment contracts, it has consistently held that this is
the exception rather than the general rule. More
importantly, a fixed-term employment is valid only under
certain circumstances. In Brent, the very same case invoked
by respondents, the Court identified several circumstances
wherein a fixed-term is an essential and natural
appurtenance,
12. OKS Designtech, Inc. v. Caccam, G.R. No. 211263,
August 5, 2015
13. Universidad de Sta. Isabel v. Sambajon, Jr., GR 196280
& 196286, April 2, 2014
14. Fuji Television v. Espiritu
15. Pantranco North Express, Inc. v. NLRC; GR 106654,
Dec. 16, 1994
17. Medenilla v. PVB, GR 127673, March 13, 2000
18. Pangilinan v. GMC; GR 149329, July 12, 2004
19. Labayog v. M.Y. San Biscuits, Inc., GR 148102, July
11, 2006
20. Poseidon Fishing v. NLRC, GR 168052, Feb. 20, 2006
21. Basan, et. al. vs. Coca-Cola Bottlers Philippines; G.R.
No. 174365-66, February 4, 2015
22. Purefoods v. NLRC, GR 122653, Dec. 12, 1997
23. Supreme Steel Corporation v. NMS-IND-APL, GR
185556, March 28, 2011
24. Magsalin & Coca-Cola v. NOWM, GR 148492, May 9,
2003
25. AMA Computer College, Paranaque v. Austria, GR
164078, Nov. 23, 2007
26. Millares v. NLRC, GR 110524, July 29, 2002
27. Unica v. Anscor Swire Ship Management Corp.; GR
184318, Feb. 12, 2014