G.R. No. 155651.

July 28, 2005

COCA-COLA BOTTLERS PHILIPPINES, INC., SALES FORCE UNION-PTGWO-BALAIS, Petitioners, vs. COCA-COLA
BOTTLERS, PHILIPPINES, INC., Respondents.

FACTS: The Coca-Cola Bottlers Philippines, Inc. Sales Force Union-PTGWO is a legitimate labor organization duly registered with the
Department of Labor and Employment, and is the sole and exclusive bargaining representative of all regular route salesmen, regular
relief route salesmen, regular lead helpers, regular relief lead helpers, regular route helpers, regular relief route helpers and order-taker
collectors who are assigned in various sales offices specified in the parties’ collective bargaining agreement. On the other hand, the
respondent company is a domestic corporation duly organized and existing under the laws of the Philippines and is engaged in the
manufacture and distribution of its soft drink products.

In January 1989, the UNION filed a Notice of Strike with the National Conciliation and Mediation Board raising certain issues for
conciliation. As a result of said dispute, the UNION staged a strike.

Subsequently, the Board succeeded in making the parties agree to a voluntary settlement of the case via a Memorandum of Agreement
signed by them on February 9, 1989. Among others, the petitioner and the respondent agreed, as follows:

1. Christmas Bonus- fifty (50%) percent of their average commission for the last six (6) months. However, in December 1999, the
respondent granted a fixed amount of P4,000.00 only, eliminating thereby the said 50% employee’s average commission for the last six
months for members of the union. Thus, claiming the same as violation of the MOA, the union submitted its grievance to the
respondent. No settlement was reached, hence, the case was then referred to a Panel of Voluntary Arbitrators.

The union hereby acknowledges that the granting of a Christmas bonus is purely a Management prerogative and as such, in
determining the amount thereof the same is solely a discretion of Management. The parties however agree that henceforth whenever
Management exercises this prerogative, the same shall include the average commission for the last six (6) months prior to the grant.

Petitioner claimed that the MOA establishes the company’s obligation to pay additionally 50% of the average commission whenever it
decides to grant a bonus and that the fixed amount of P4,000.00 granted in December 1999, although denominated as "ex-gratia" was
actually a Christmas bonus.

On the other hand, the respondent company countered that in 1999 it suffered its worst financial performance in its history; Four
Thousand Pesos (P4,000.00) to all its permanent employees, . .

In these circumstances the CCBPI Executive Committee has decided that the CCBPI is not able to pay bonuses to any staff in 1999.

After hearing and the submission of evidence and position papers, the Arbitration Panel composed of Apron Mangabat and Noel
Sanchez, as chairman and member, respectively, denied petitioner’s claim and declared that the P4,000.00 given as ex gratia is not a
bonus, while Arnel Dolendo, another member dissented. The dispositive portion of the decision reads as follows:

On 30 May 2001, the Panel denied petitioner’s motion for reconsideration.

In dealing with the controversy, the Court of Appeals adopted a two-tiered approach. First, it held that contrary to the view of the Panel,
the ₱4,000.00 "special ex gratia" payment is a Christmas bonus, hence, petitioner’s members are entitled to the additional 50%
average commission for the last six months prior to the grant pursuant to the Memorandum of Agreement entered into between
petitioner and respondent Coca-Cola Bottlers Philippines, Inc. This notwithstanding, the Court of Appeals dismissed the petition on the
ground that petitioner’s motion for reconsideration dated 12 March 2001 of the Decision of the Panel that was originally received on 20
February 2001 was filed out of time; hence, the said Decision already became final and executory after ten (10) calendar days from
receipt of the copy of the Decision by the parties pursuant to Article 262-A of the Labor Code.

ISSUE: W/N the ₱4,000.00 "special ex gratia" payment is a Christmas bonus, hence, petitioner’s members are entitled to the additional
50% average commission for the last six months prior to the grant pursuant to the Memorandum of Agreement entered into between
petitioner and respondent Coca-Cola Bottlers Philippines, Inc.

HELD: YES. Rule VII, Section 1 of the "Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings" provides the key.
Therein, what constitutes the voluntary arbitrator’s decision (and, by extension, that of the Panel of voluntary arbitrators) is defined with
precision, to wit:

Section 1. Decision Award. -- The final arbitral disposition of issue/s submitted to voluntary arbitration is the Decision. The disposition
may take the form of a dismissal of a claim or grant of specific remedy, either by way of prohibition of particular acts or specific
performance of particular acts. In the latter case the decision is called an Award.

In herein case, the Decision of the Panel was in the form of a dismissal of petitioner’s complaint. Naturally, this dismissal was contained
in the main decision and not in the dissenting opinion. Thus, under Section 6, Rule VII of the same guidelines implementing Article 262-
A of the Labor Code, this Decision, as a matter of course, would become final and executory after ten (10) calendar days from receipt of
copies of the decision by the parties even without receipt of the dissenting opinion unless, in the meantime, a motion for
reconsideration5 or a petition for review to the Court of Appeals under Rule 43 of the Rules of Court6 is filed within the same 10-day
period. As correctly pointed out by the Court of Appeals, a dissenting opinion is not binding on the parties as it is a mere expression of
the individual view of the dissenting member from the conclusion held by the majority of the Court, following our ruling in Garcia v.
Perez7 as reiterated in National Union of Workers in Hotels, Restaurants and Allied Industries v. NLRC.8

As we declared in Nacuray v. National Labor Relations Commission12 --

. . . Nothing is more settled in law than that when a judgment becomes final and executory it becomes immutable and unalterable. The
same may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and whether made by the highest court of the land. The reason is grounded on the fundamental
considerations of public policy and sound practice that, at the risk of occasional error, the judgments or orders of courts must be final at
some definite date fixed by law.

WHEREFORE, premises considered, the Court of Appeals Decision dated 22 May 2002 and its Resolution dated 03 October 2002 are
hereby AFFIRMED. No costs.
Page 1 of 5
ROSITA PANGILINAN - versus - GENERAL MILLING CORPORATION,

FACTS: The respondent General Milling Corporation is a domestic corporation engaged in the production and sale of livestock and
poultry.[2] It is, likewise, the distributor of dressed chicken to various restaurants and establishments nationwide.[3] As such, it employs
hundreds of employees, some on a regular basis and others on a casual basis, as emergency workers.

The petitioners[4] were employed by the respondent on different dates as emergency workers at its poultry plant in Cainta, Rizal, under
separate temporary/casual contracts of employment for a period of five months.[5] Most of them worked as chicken dressers, while the
others served as packers or helpers.[6] Upon the expiration of their respective contracts, their services were terminated. They later filed
separate complaints for illegal dismissal and non-payment of holiday pay, 13th month pay, night-shift differential and service incentive
leave pay against the respondent before the Arbitration Branch of the National Labor Relations Commission.

The petitioners alleged that their work as chicken dressers was necessary and desirable in the usual business of the respondent, and
added that although they worked from 10:00 p.m. to 6:00 a.m., they were not paid night-shift differential.[8] They stressed that based on
the nature of their work, they were regular employees of the respondent; hence, could not be dismissed from their employment unless
for just cause and after due notice.

On August 18, 1997, Labor Arbiter (LA) Voltaire A. Balitaan rendered a decision in favor of the petitioners declaring that they were
regular employees. Finding that the termination of their employment was not based on any of the just causes provided for in the Labor
Code, the LA declared that they were allegedly illegally dismissed.

ISSUE: Whether or not the petitioners were regular employees of the respondent GMC when their employment was terminated.

HELD: The SC held the petitioners were employees with a fixed period, and, as such, were not regular employees. Article 280 of the
Labor Code comprehends three kinds of employees: (a) regular employees or those whose work is necessary or desirable to the usual
business of the employer; (b) project employees or those whose employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or where the work or services
to be performed is seasonal in nature and the employment is for the duration of the season; and, (c) casual employees or those who
are neither regular nor project employees.

A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the
employer as against those which are undertaken for a specific project or are seasonal.[41] There are two separate instances whereby it
can be determined that an employment is regular: (1) if the particular activity performed by the employee is necessary or desirable in
the usual business or trade of the employer; and, (2) if the employee has been performing the job for at least a year. Article 280 of the
Labor Code does not proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow that where the
duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are
forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory
between a definite period of employment and the nature of the employee’s duties.

Stipulations in employment contracts providing for term employment or fixed period employment are valid when the period were agreed
upon knowingly and voluntarily by the parties without 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. An examination of
the contracts entered into by the petitioners showed that their employment was limited to a fixed period, usually five or six months, and
did not go beyond such period. The records reveal that the stipulations in the employment contracts were knowingly and voluntarily
agreed to by the petitioners without force, duress or improper pressure, or any circumstances that vitiated their consent. Similarly,
nothing therein shows that these contracts were used as a subterfuge by the respondent GMC to evade the provisions of Articles 279
and 280 of the Labor Code.

The petitioners were hired as “emergency workers” and assigned as chicken dressers, packers and helpers at the Cainta Processing
Plant. While the petitioners’ employment as chicken dressers is necessary and desirable in the usual business of the respondent, they
were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be
regular employees, but are merely “contractual employees.” Consequently, there was no illegal dismissal when the petitioners’ services
were terminated by reason of the expiration of their contracts. Lack of notice of termination is of no consequence, because when the
contract specifies the period of its duration, it terminates on the expiration of such period. A contract for employment for a definite
period terminates by its own term at the end of such period.

Petition is denied.

Page 2 of 5
[G.R. No. 121948. October 8, 2001]

PERPETUAL HELP CREDIT COOPERATIVE, INC., petitioner, vs. BENEDICTO FABURADA, SISINITA VILLAR, IMELDA
TAMAYO, HAROLD CATIPAY, and the NATIONAL LABOR RELATIONS COMMISSION, Fourth Division, Cebu City,
respondents.

On January 3, 1990, Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private respondents, filed a complaint
against the Perpetual Help Credit Cooperative, Inc. (PHCCI), petitioner, with the Arbitration Branch, Department of Labor and
Employment (DOLE), Dumaguete City, for illegal dismissal, premium pay on holidays and rest days, separation pay, wage differential,
moral damages, and attorneys fees.

Forthwith, petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship
between them as private respondents are all members and co-owners of the cooperative. Furthermore, private respondents have not
exhausted the remedies provided in the cooperative by-laws.

On September 3, 1990, petitioner filed a supplemental motion to dismiss alleging that Article 121 of R.A. No. 6939, otherwise known as
the Cooperative Development Authority Law which took effect on March 26, 1990, requires conciliation or mediation within the
cooperative before a resort to judicial proceeding.

On the same date, the Labor Arbiter denied petitioner's motion to dismiss, holding that the case is impressed with employer-employee
relationship and that the law on cooperatives is subservient to the Labor Code.

On November 23, 1993, the Labor Arbiter rendered a decision, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring complainants illegally dismissed, thus respondent is
directed to pay Complainants backwages computed from the time they were illegally dismissed up to the actual reinstatement but
subject to the three year backwages rule, separation pay for one month for every year of service since reinstatement is evidently not
feasible anymore, to pay complainants 13th month pay, wage differentials and Ten Percent (10%) attorneys fees from the aggregate
monetary award. However, complainant Benedicto Faburada shall only be awarded what are due him in proportion to the nine and a
half months that he had served the respondent, he being a part-time employee.

All other claims are hereby dismissed for lack of merit.

The computation of the foregoing awards is hereto attached and forms an integral part of this decision.

That an employer-employee exists between the parties is shown by the averments of private respondents in their respective affidavits,
carefully considered by respondent NLRC in affirming the Labor Arbiter's decision, thus:

Benedicto Faburada -Regular part-time Computer programmer/ operator.

Sisinita Vilar -Clerk.
Imelda C. Tamayo - Clerk.
Harold D. Catipay - Clerk.
All of them were given a memorandum of termination on January 2, 1990, effective December 29, 1989.

Hence, this petition by the PHCCI.

ISSUE: whether or not there is an employer-employee relationship between the parties and that private respondents were illegally
dismissed.

Article 280 of the Labor Code provides for three kinds of employees: (1) regular employees or those who have been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or
those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been
determined at the time of 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; and (3) casual employees or those who are neither regular nor project employees.[3] The
employees who are deemed regular are: (a) those who have been engaged to perform activities which are usually necessary or
desirable in the usual trade or business of the employer; and (b) those casual employees who have rendered at least one (1) year of
service, whether such service is continuous or broken, with respect to the activity in which they are employed.[4] Undeniably, private
respondents were rendering services necessary to the day-to-day operations of petitioner PHCCI. This fact alone qualified them as
regular employees.

All of them, except Harold D. Catipay, worked with petitioner for more than one (1) year: Benedicto Faburada, for one and a half (1 1/2)
years; Sisinita Vilar, for two (2) years; and Imelda C. Tamayo, for two (2) years and two (2) months. That Benedicto Faburada worked
only on a part-time basis, does not mean that he is not a regular employee. Ones regularity of employment is not determined by the
number of hours one works but by the nature and by the length of time one has been in that particular job.[5] Petitioner's contention that
private respondents are mere volunteer workers, not regular employees, must necessarily fail. Its invocation of San Jose City Electric
Cooperative vs. Ministry of Labor and Employment (173 SCRA 697, 703 (1989 ) is misplaced. The issue in this case is whether or not
the employees-members of a cooperative can organize themselves for purposes of collective bargaining, not whether or not the
members can be employees. Petitioner missed the point.

As regular employees or workers, private respondents are entitled to security of tenure. Thus, their services may be terminated only for
a valid cause, with observance of due process.

The valid causes are categorized into two groups: the just causes under Articles 282 of the Labor Code and the authorized causes
under Articles 283 and 284 of the same Code. The just causes are: (1) serious misconduct or willful disobedience of lawful orders in
connection with the employees work; (2) gross or habitual neglect of duties; (3) fraud or willful breach of trust; (4) commission of a crime
or an offense against the person of the employer or his immediate family member or representative; and, analogous cases. The
authorized causes are: (1) the installation of labor-saving devices; (2) redundancy; (3) retrenchment to prevent losses; and (4) closing
or cessation of operations of the establishment or undertaking, unless the closing is for the purpose of circumventing the provisions of
law. Article 284 provides that an employer would be authorized to terminate the services of an employee found to be suffering from any
disease if the employees continued employment is prohibited by law or is prejudicial to his health or to the health of his fellow
employees[6]
Page 3 of 5
Private respondents were dismissed not for any of the above causes. They were dismissed because petitioner considered them to be
mere voluntary workers, being its members, and as such work at its pleasure. Petitioner thus vehemently insists that their dismissal is
not against the law.

Procedural due process requires that the employer serve the employees to be dismissed two (2) written notices before the termination
of their employment is effected: (a) the first, to apprise them of the particular acts or omissions for which their dismissal is sought and
(b) the second, to inform them of the decision of the employer that they are being dismissed.[7] In this case, only one notice was served
upon private respondents by petitioner. It was in the form of a Memorandum signed by the Manager of the Cooperative dated January
2, 1990 terminating their services effective December 29, 1989. Clearly, petitioner failed to comply with the twin requisites of a valid
notice.

We hold that private respondents have been illegally dismissed.

As illegally dismissed employees, private respondents are therefore entitled to reinstatement without loss of seniority rights and other
privileges and to full backwages, inclusive of allowances, plus other benefits or their monetary equivalent computed from the time their
compensation was witheld from them up to the time of their actual reinstatement.[9] Since they were dismissed after March 21, 1989,
the effectivity date of R.A. 6715[10] they are granted full backwages, meaning, without deducting from their backwages the earnings
derived by them elsewhere during the period of their illegal dismissal.[11] If reinstatement is no longer feasible, as when the relationship
between petitioner and private respondents has become strained, payment of their separation pay in lieu of reinstatement is in
order.[12]

Page 4 of 5
[G.R. No. 149440. January 28, 2003]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners, vs. NATIONAL
FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents.

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.

FACTS: Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or were choosy in the
kind of jobs they wanted to perform, the records is replete with complainants persistence and dogged determination in going back to
work.

Indeed, it would appear that respondents did not look with favor workers having organized themselves into a union. Thus, when
complainant union was certified as the collective bargaining representative in the certification elections, respondents under the pretext
that the result was on appeal, refused to sit down with the union for the purpose of entering into a collective bargaining agreement.
Moreover, the workers including complainants herein were not given work for more than one month. In protest, complainants staged a
strike which was however settled upon the signing of a Memorandum of Agreement which stipulated among others that:

a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to conclude the
same within thirty (30) days.
b) The management will give priority to the women workers who are members of the union in case work relative x x x or
amount[ing] to gahit and [dipol] arises.
c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.
d) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to the actual
strike will be given priority. However, in case the said workforce would not be enough, the management can hire
additional workers to supplement them.
e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to work in the
hacienda; and
f) The union will immediately lift the picket upon signing of this agreement.
However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its commitment to sit down and bargain
collectively. Instead, respondent employed all means including the use of private armed guards to prevent the organizers from entering
the premises.

Moreover, starting September 1991, respondents did not any more give work assignments to the complainants forcing the union to
stage a strike on January 2, 1992. But due to the conciliation efforts by the DOLE, another Memorandum of Agreement was signed by
the complainants and respondents which provides:

Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of the union officials and
members;

Whereas parties to the present dispute agree to settle the case amicably once and for all

The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who received their 13th month pay. The
following are deemed not considered employees:
1. Luisa Rombo; 2. Ramona Rombo; 3. Bobong Abrega; 4. Boboy Silva

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

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

1. Jose Dagle 7. Alejandro Tejares; 2. Rico Dagle 8. Gaudioso Rombo; 3. Ricardo Dagle 9. Martin Alas-as Jr.; 4. Jesus Silva 10.
Cresensio Abrega; 5. Fernando Silva 11. Ariston Eruela Sr.; 6. Ernesto Tejares 12. Ariston Eruela Jr.

When respondents again reneged on its commitment, complainants filed the present complaint.

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

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.

ISSUE: Whether or not the 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.

HELD: 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.
Page 5 of 5
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.

xxxxxxxxx
x x x [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the x x x 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 latters 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 CAs 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.

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]

Page 6 of 5
FIRST DIVISION
[G.R. No. 157373. July 27, 2004]

PENTAGON INTERNATIONAL SHIPPING, INC., petitioner, vs. WILLIAM B. ADELANTAR,

FACTS: On August 16, 1997, respondent William B. Adelantar was hired by Dubai Ports Authority of Jebel Ali under an employment
contract (first contract) which provided for an unlimited period of employment with a monthly salary of five thousand five hundred
dirhams (Dhs 5,500).

On September 3, 1997, Adelantar and petitioner Pentagon International Shipping, Inc. (Pentagon), for and in behalf of Dubai Ports
Authority of Jebel Ali, entered into a Philippine Overseas Employment Administration (POEA) standard employment contract (second
contract), this time providing for a 12-month period with basic monthly salary of US$380.00 and fixed overtime pay of US$152.00.

Upon completion of his probationary period on April 5, 1998, Adelantars basic salary was increased to five thousand eight hundred
ninety dirhams (Dhs 5,890), while his overtime pay was increased to two thousand three hundred fifty-six dirhams (Dhs 2,356) effective
April 1, 1998.

On June 11, 1998, however, the management barred Adelantar from entering the port due to a previous dispute with his superior. He
was asked to hand in his health and employment card. On the same date, he received a letter from his employer, stating that he was
being terminated for assaulting his superior officer, although he was promised employment in another company.

Adelantar was eventually repatriated after nine (9) months and seven (7) days of service. After almost a year of waiting with no work
forthcoming, Adelantar filed a complaint for illegal dismissal with money claim against Pentagon International Shipping, Inc. with the
NLRC.

The Labor Arbiter found that the dismissal of Adelantar was illegal. Adelantar appealed to the NLRC arguing that the Labor Arbiter
erred in granting backwages of only three (3) months and in not granting attorney’s fees, moral and exemplary damages and
reinstatement.

The NLRC affirmed the Labor Arbiters decision and held that under Section 10 of R.A. 8042, otherwise known as the Migrant Workers
and Overseas Filipinos Act of 1995, an illegally dismissed contract worker is entitled to the salaries corresponding to the unexpired
portion of his contract, or for three (3) months for every year of the unexpired term, whichever is less. Thus, the NLRC awarded
backwages to Adelantar equivalent to three (3) months of his basic salary, but exclusive of overtime pay.[4]

Aggrieved, Adelantar filed a petition for certiorari with the Court of Appeals.
On September 26, 2002, the Court of Appeals rendered judgment modifying the amounts awarded by the Labor Arbiter and the NLRC.

ISSUE: whether or NOT the Court of Appeals properly used as basis Article 279 of the Labor Code in its award for backwages to
Adelantar.

HELD: YES. As early as the case of Coyoca v. NLRC,[9] we held that Filipino seamen are governed by the Rules and Regulations of
the POEA. The Standard Employment Contract governing the Employment of All Filipino Seamen on Board Ocean-Going Vessels of
the POEA, particularly in Part I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. In no case should
the contract of seamen be longer than 12 months. It reads:
Section C. Duration of Contract.

The period of employment shall be for a fixed period but in no case to exceed 12 months and shall be stated in the Crew contract. Any
extension of the Contract period shall be subject to the mutual consent of the parties.

Under the circumstances, the Court of Appeals erred in resolving the issue of backwages based on the first contract which provided for
an unlimited period of employment as this violated the explicit provision of the Rules and Regulations of the POEA. While we recognize
that Adelantar executed a contract with Dubai Ports Authority of Ali Jebel and might even have applied said contract in his overseas
station, this contract was not sanctioned by the POEA. We agree with the NLRC when it observed thus:

It should be stressed that whatever status of employment or increased benefits that the complainant may have gained while under the
employ of Dubai Ports Authority, the undisputed fact remains that prior to his deployment, he agreed to be hired under a 12-month
POEA contract, the duration of which is the basis for the determination of the extent of the respondents liability.[10]

The Court of Appeals erred when it adjudged the first contract as the basis for Pentagons liability instead of the second contract, which
is in conformity with the POEAs Standard Employment Contract. As such, there would have been no need to resort to statutory
construction where the rules and jurisprudence are clear.

Besides, in Millares v. NLRC,[11] we held that:

. . . [I]t is clear that seafarers are considered contractual employees. They can not be considered as regular employees under Article
280 of the Labor Code. Their employment is governed by the contracts they sign every time they are rehired and their employment is
terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception
of Article 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of 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.

Therefore, Adelantar, a seafarer, is not a regular employee as defined in Article 280 of the Labor Code. Hence, he is not entitled to full
backwages and separation pay in lieu of reinstatement as provided in Article 279 of the Labor Code. As we held in Millares, Adelantar is
a contractual employee whose rights and obligations are governed primarily by Rules and Regulations of the POEA and, more
importantly, by R.A. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995.
We find, however, that the Court of Appeals correctly awarded ten percent (10%) of the monetary award in Adelantars favor as
attorneys fees, as he was forced to litigate and hence incurred expenses to protect his rights and interest.[12]

Page 7 of 5
EN BANC [G.R. No. 154472. June 30, 2005]

ALEXANDER R. LOPEZ vs. METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM,

“Take not from the mouth of labor the bread it has earned. The constitutional protection to labor, a uniform feature of the last
three Constitutions including the present one, is outstanding in its uniqueness and as a mandate for judicial activism.”

By virtue of an Agreement,[3] petitioners were engaged by the Metropolitan Waterworks and Sewerage System (MWSS) as collectors-
contractors, wherein the former agreed to collect from the concessionaires of MWSS, charges, fees, assessments of rents for water,
sewer and/or plumbing services which the MWSS bills from time to time.[4]

In 1997, MWSS entered into a Concession Agreement with Manila Water Service, Inc. and Benpress-Lyonnaise, wherein the collection
of bills was transferred to said private concessionaires, effectively terminating the contracts of service between petitioners and MWSS.
Regular employees of the MWSS, except those who had retired or opted to remain with the latter, were absorbed by the
concessionaires. Regular employees of the MWSS were paid their retirement benefits, but not petitioners. Instead, they were refused
said benefits, MWSS relying on a resolution[5] of the Civil Service Commission (CSC) that contract-collectors of the MWSS are not its
employees and therefore not entitled to the benefits due regular government employees.

Petitioners filed a complaint with the CSC. In its Resolution dated 1 July 1999,[6] the CSC denied their claims, stating that petitioners
were engaged by MWSS through a contract of service, which explicitly provides that a bill collector-contractor is not an MWSS
employee.[7] Relying on Part V of CSC Memorandum Circular No. 38, Series of 1993, the CSC stated that contract services/job orders
are not considered government services, which do not have to be submitted to the CSC for approval, unlike contractual and plantilla
appointments.[8] Moreover, it found that petitioners were unable to show that they have contractual appointments duly attested by the
CSC.[9] In addition, the CSC stated that petitioners, not being permanent employees of MWSS and not included in the list .submitted to
the concessionaire, are not entitled to severance pay.[10] Petitioners claims for retirement benefits and terminal leave pay were
likewise denied.

Petitioners sought reconsideration of the CSC Resolution, which was however denied by the CSC.

Aggrieved, petitioners filed a petition for review under Rule 43 of the Rules of Court with the Court of Appeals.

Affirming and generally reiterating the ruling of the CSC, the Court of Appeals held that the Agreement entered into by petitioners and
MWSS was clear and unambiguous, and should be read and interpreted according to its literal sense.[16] Hence, as per the terms of
the agreement, petitioners were not MWSS employees.

ISSUE: Whether or not the CSC erred in finding that petitioners are not contractual employees of the government and, hence, are not
entitled to retirement and separation benefits?

HELD: YES. The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to the labor class for no less than the
Constitution dictates that the State . . . shall protect the rights of workers and promote their welfare.[50] It is committed to this policy and
has always been quick to rise to defense in the rights of labor, as in this case.[51]

Protection to labor, it has been said, extends to all of laborlocal and overseas, organized and unorganized, in the public and private
sectors.[52] Besides, there is no reason not to apply this principle in favor of workers in the government. The government, including
government-owned and controlled corporations, as employers, should set the example in upholding the rights and interests of the
working class.

The MWSS is a government owned and controlled corporation with its own charter, Republic Act No. 6234.[53] As such, it is covered by
the civil service[54] and falls under the jurisdiction of the Civil Service Commission.[55]
CSC Memorandum Circular No. 38, Series of 1993, categorically made the distinction between contract of services/job orders and
contractual and plantilla appointment, declaring that services rendered under contracts of services and job orders are non-government
services which do not have to be submitted to the CSC for approval. This was followed by CSC Memorandum Circular No. 4, Series of
1994, which allowed the crediting of services for purposes of retirement only for such services supported by duly approved
appointments. Subsequently, the CSC issued other resolutions applying the above-mentioned circulars, stating that while some
functions may have been contracted out by a government agency, the persons contracted are not entitled to the benefits due to regular
government employees.[56]

For purposes of determining the existence of employer-employee relationship, the Court has consistently adhered to the four-fold test,
namely: (1) whether the alleged employer has the power of selection and engagement of an employee; (2) whether he has control of
the employee with respect to the means and methods by which work is to be accomplished; (3) whether he has the power to dismiss;
and (4) whether the employee was paid wages.[57] Of the four, the control test is the most important element.

A review of the circumstances surrounding the case reveals that petitioners are employees of MWSS. Despite the obvious attempt of
MWSS to categorize petitioners as mere service providers, not employees, by entering into contracts for services, its actuations show
that they are its employees, pure and simple. MWSS wielded its power of selection when it contracted with the individual petitioners,
undertaking separate contracts or agreements. The same goes true for the power to dismiss. Although termed as causes for
termination of the Agreement, a review of the same shows that the grounds indicated therein can similarly be grounds for termination of
employment.

In addition, the control test merely calls for the existence of the right to control, and not the exercise thereof. It is not essential for the
employer to actually supervise the performance of duties of the employee, it is enough that the former has a right to wield the
power.[68] While petitioners were contract-collectors of MWSS, they were under the latters direction as to where and how to perform
their collection and were even subject to disciplinary measures. Trainings were in fact conducted to ensure that petitioners are
conversant of the procedures of the MWSS.

Contrary to MWSS assertion that petitioners were free to adopt (their) own method/strategy in the matter of collection,[69] the
Agreement clearly provided that the procedure and/or manner of the collection of bills to be followed shall be in accordance with the
provisions of the Manual of Procedures.

Page 8 of 5
Second, the work of the private respondents was directly related to the principal business or operation of the petitioner. Being in the
business of providing water to the consumers in the East Zone, the collection of the charges therefor by private respondents for the
petitioner can only be categorized as clearly related to, and in the pursuit of the latters business.

Lastly, ACGI did not carry on an independent business or undertake the performance of its service contract according to its own
manner and method, free from the control and supervision of its principal, petitioner. Prior to private respondents alleged employment
with ACGI, they were already working for petitioner, subject to its rules and regulations in regard to the manner and method of
performing their tasks. This form of control and supervision never changed although they were already under the seeming employ of
ACGI. These are indications that ACGI was not left alone in the supervision and control of its alleged employees. Consequently, it can
be concluded that ACGI was not an independent contractor since it did not carry a distinct business free from the control and
supervision of petitioner.[79]

Even under the four-fold test, the bill collectors proved to be employees of Manila Water. Thus, the Court held that:

Even the four-fold test will show that petitioner is the employer of private respondents. The elements to determine the existence of an
employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employers power to control the employees conduct. The most important element is the employers control of the employees
conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

We agree with the Labor Arbiter that in the three stages of private respondents services with the petitioner, i.e., (1) from August 1, 1997
to August 31, 1997; (2) from September 1, 1997 to November 30, 1997; and (3) from December 1, 1997 to February 8, 1999, the latter
exercised control and supervision over the formers conduct.

In fine, the Court found that the so-called independent contractor did not have substantial capitalization or investment in the form of
tools, equipment, machineries, work premises and other material to qualify as an independent contractor. Moreover, respondents
therein reported daily to the Manila Water branch office and dealt with the consumers through receipts and I.D.s. issued by the latter.
Likewise, their work was directly related to and in the pursuit of Manila Waters principal business. More importantly, the Court noted
that ACGI did not carry a distinct business free from the control and supervision of Manila Water.

The similarity between this case and the instant petition cannot be denied. For one, the respondents in said case are petitioners in this
case.[81] Second, the work set-up was essentially the same. While the bill collectors were individually hired, or eventually engaged
through ACGI, they were under the direct control and supervision of the concessionaire, much like the arrangement between herein
petitioners and MWSS. Third, they performed the same vital function of collection in both cases. Fourth, they worked exclusively for
their employers. Hence, the bill collectors in the Manila Water case were declared employees of Manila Water despite the existence of
a sham labor contractor. In the present case, petitioners were directly and individually hired by MWSS, the latter not resoting to the
intermediary labor contractor artifice, but a mere a scrap of paper impudently declaring the bill collectors to be not employees of MWSS.
With greater reason, therefore, should the actuality of the employer-employee relationship between MWSS and petitioners be
recognized.

Petitioners are indeed regular employees of the MWSS. The primary standard of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The
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. Likewise, the repeated and continuing need for the performance of the job has been deemed sufficient evidence
of the necessity, if not indispensability of the activity to the business.[84] Some of the petitioners had rendered more than two decades
of service to the MWSS. The continuous and repeated rehiring of these bill collectors indicate the necessity and desirability of their
services, as well as the importance of the role of bill collectors in the MWSS.

Page 9 of 5