GMA Network vs. Carlos Pabriga (Case)
GMA Network vs. Carlos Pabriga (Case)
GMA Network vs. Carlos Pabriga (Case)
SUPREME COURT
Manila
FIRST DIVISION
DECISION
This is a Petition for Review on Certiorari filed by petitioner GMA Network Inc. assailing the
Decision1 of the Court of Appeals dated September 8, 2006 and the subsequent
Resolution2 dated January 22 2007 denying reconsideration in CA-G.R. SP No. 73652.
On July 19 1999 due to the miserable working conditions private respondents were forced to file
a complaint against petitioner before the National Labor Relations Commission Regional
Arbitration Branch No. VII Cebu City assailing their respective employment circumstances as
follows:
Private respondents were engaged by petitioner to perform the following activities, to wit:
4) Acting as Cameramen
On 4 August 1999, petitioner received a notice of hearing of the complaint. The following day,
petitioners Engineering Manager, Roy Villacastin, confronted the private respondents about the
said complaint.
On 9 August 1999, private respondents were summoned to the office of petitioners Area
Manager, Mrs. Susan Alio, and they were made to explain why they filed the complaint. The
next day, private respondents were barred from entering and reporting for work without any
notice stating the reasons therefor.
On 13 August 1999, private respondents, through their counsel, wrote a letter to Mrs. Susan
Alio requesting that they be recalled back to work.
On 23 August 1999, a reply letter from Mr. Bienvenido Bustria, petitioners head of Personnel
and Labor Relations Division, admitted the non-payment of benefits but did not mention the
request of private respondents to be allowed to return to work.
On 15 September 1999, private respondents sent another letter to Mr. Bustria reiterating their
request to work but the same was totally ignored. On 8 October 1999, private respondents filed
an amended complaint raising the following additional issues: 1) Unfair Labor Practice; 2) Illegal
dismissal; and 3) Damages and Attorneys fees.
On 23 September 1999, a mandatory conference was set to amicably settle the dispute between
the parties, however, the same proved to be futile. As a result, both of them were directed to file
their respective position papers.
On 10 November 1999, private respondents filed their position paper and on 2 March 2000, they
received a copy of petitioners position paper. The following day, the Labor Arbiter issued an
order considering the case submitted for decision. 3
In his Decision dated August 24, 2000, the Labor Arbiter dismissed the complaint of respondents
for illegal dismissal and unfair labor practice, but held petitioner liable for 13th month pay. The
dispositive portion of the Labor Arbiters Decision reads:
WHEREFORE, the foregoing premises considered, judgment is hereby rendered dismissing the
complaints for illegal dismissal and unfair labor practice.
Respondents are, however, directed to pay the following complainants their proportionate 13th
month pay, to wit:
All other claims are, hereby, dismissed for failure to substantiate the same. 4
Respondents appealed to the National Labor Relations Commission (NLRC). The NLRC
reversed the Decision of the Labor Arbiter, and held thus:
a) All complainants are regular employees with respect to the particular activity to which they
were assigned, until it ceased to exist. As such, they are entitled to payment of separation pay
computed at one (1) month salary for every year of service;
b) They are not entitled to overtime pay and holiday pay; and
c) They are entitled to 13th month pay, night shift differential and service incentive leave pay.
For purposes of accurate computation, the entire records are REMANDED to the Regional
Arbitration Branch of origin which is hereby directed to require from respondent the production of
additional documents where necessary.
Respondent is also assessed the attorneys fees of ten percent (10%) of all the above awards. 5
Petitioner elevated the case to the Court of Appeals via a Petition for Certiorari. On September 8,
2006, the appellate court rendered its Decision denying the petition for lack of merit.
Petitioner filed the present Petition for Review on Certiorari, based on the following grounds:
I.
II.
III.
THE COURT OF APPEALS GRAVELY ERRED IN AWARDING NIGHT SHIFT
DIFFERENTIAL PAY CONSIDERING THE ABSENCE OF EVIDENCE WHICH WOULD
ENTITLE THEM TO SUCH AN AWARD.
IV.
The parties having extensively elaborated on their positions in their respective memoranda, we
proceed to dispose of the issues raised.
At the outset, we should note that the nature of the employment is determined by law, regardless
of any contract expressing otherwise. The supremacy of the law over the nomenclature of the
contract and the stipulations contained therein is to bring to life the policy enshrined in the
Constitution to afford full protection to labor. Labor contracts, being imbued with public interest,
are placed on a higher plane than ordinary contracts and are subject to the police power of the
State.7
Respondents claim that they are regular employees of petitioner GMA Network, Inc. The latter,
on the other hand, interchangeably characterize respondents employment as project and fixed
period/fixed term employment. There is thus the need to clarify the foregoing terms.
The terms regular employment and project employment are taken from Article 280 of the Labor
Code, which also speaks of casual and seasonal employment:
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 employment is for the duration of the
season.
A fifth classification, that of a fixed term employment, is not expressly mentioned in the Labor
Code. Nevertheless, this Court ruled in Brent School, Inc. v. Zamora, 8 that such a contract, which
specifies that employment will last only for a definite period, is not per se illegal or against public
policy.
Pursuant to the above-quoted Article 280 of the Labor Code, employees performing activities
which are usually necessary or desirable in the employers usual business or trade can either be
regular, project or seasonal employees, while, as a general rule, those performing activities not
usually necessary or desirable in the employers usual business or trade are casual employees.
The reason for this distinction may not be readily comprehensible to those who have not carefully
studied these provisions: only employers who constantly need the specified tasks to be
performed can be justifiably charged to uphold the constitutionally protected security of tenure of
the corresponding workers. The consequence of the distinction is found in Article 279 of the
Labor Code, which provides:
ARTICLE 279. Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
On the other hand, the activities of project employees may or may not be usually necessary or
desirable in the usual business or trade of the employer, as we have discussed in ALU-TUCP v.
National Labor Relations Commission,9 and recently reiterated in Leyte Geothermal Power
Progressive Employees Union-ALU-TUCP v. Philippine National Oil Company-Energy
Development Corporation.10 In said cases, we clarified the term "project" in the test for
determining whether an employee is a regular or project employee:
It is evidently important to become clear about the meaning and scope of the term "project" in the
present context. The "project" for the carrying out of which "project employees" are hired would
ordinarily have some relationship to the usual business of the employer. Exceptionally, the
"project" undertaking might not have an ordinary or normal relationship to the usual business of
the employer. In this latter case, the determination of the scope and parameters of the "project"
becomes fairly easy. It is unusual (but still conceivable) for a company to undertake a project
which has absolutely no relationship to the usual business of the company; thus, for instance, it
would be an unusual steel-making company which would undertake the breeding and production
of fish or the cultivation of vegetables. From the viewpoint, however, of the legal characterization
problem here presented to the Court, there should be no difficulty in designating the employees
who are retained or hired for the purpose of undertaking fish culture or the production of
vegetables as "project employees," as distinguished from ordinary or "regular employees," so
long as the duration and scope of the project were determined or specified at the time of
engagement of the "project employees." For, as is evident from the provisions of Article 280 of
the Labor Code, quoted earlier, the principal test for determining whether particular employees
are properly characterized as "project employees" as distinguished from "regular employees," is
whether or not the "project employees" were assigned to carry out a "specific project or
undertaking," the duration (and scope) of which were specified at the time the employees were
engaged for that project.
In the realm of business and industry, we note that "project" could refer to one or the other of at
least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or
undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company. Such
job or undertaking begins and ends at determined or determinable times. The typical example of
this first type of project is a particular construction job or project of a construction company. A
construction company ordinarily carries out two or more [distinct] identifiable construction
projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio
City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of
one of these separate projects, the scope and duration of which has been determined and made
known to the employees at the time of employment, are properly treated as "project employees,"
and their services may be lawfully terminated at completion of the project.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within
the regular business of the corporation. Such a job or undertaking must also be identifiably
separate and distinct from the ordinary or regular business operations of the employer. The job
or undertaking also begins and ends at determined or determinable times. x x x.11 (Emphases
supplied, citation omitted.)
Thus, in order to safeguard the rights of workers against the arbitrary use of the word "project" to
prevent employees from attaining the status of regular employees, employers claiming that their
workers are project employees should not only prove that the duration and scope of the
employment was specified at the time they were engaged, but also that there was indeed a
project. As discussed above, the project could either be (1) 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; or (2) a particular job or
undertaking that is not within the regular business of the corporation. As it was with regard to the
distinction between a regular and casual employee, the purpose of this requirement is to
delineate whether or not the employer is in constant need of the services of the specified
employee. If the particular job or undertaking is within the regular or usual business of the
employer company and it is not identifiably distinct or separate from the other undertakings of the
company, there is clearly a constant necessity for the performance of the task in question, and
therefore said job or undertaking should not be considered a project.
Brief examples of what may or may not be considered identifiably distinct from the business of
the employer are in order. In Philippine Long Distance Telephone Company v. Ylagan, 12 this
Court held that accounting duties were not shown as distinct, separate and identifiable from the
usual undertakings of therein petitioner PLDT. Although essentially a telephone company, PLDT
maintains its own accounting department to which respondent was assigned. This was one of the
reasons why the Court held that respondent in said case was not a project employee. On the
other hand, in San Miguel Corporation v. National Labor Relations Commission, 13 respondent
was hired to repair furnaces, which are needed by San Miguel Corporation to manufacture glass,
an integral component of its packaging and manufacturing business. The Court, finding that
respondent is a project employee, explained that San Miguel Corporation is not engaged in the
business of repairing furnaces. Although the activity was necessary to enable petitioner to
continue manufacturing glass, the necessity for such repairs arose only when a particular furnace
reached the end of its life or operating cycle. Respondent therein was therefore considered a
project employee.
In the case at bar, as discussed in the statement of facts, respondents were assigned to the
following tasks:
4) Acting as Cameramen14
These jobs and undertakings are clearly within the regular or usual business of the employer
company and are not identifiably distinct or separate from the other undertakings of the
company. There is no denying that the manning of the operations center to air commercials,
acting as transmitter/VTR men, maintaining the equipment, and acting as cameramen are not
undertakings separate or distinct from the business of a broadcasting company.
Petitioners allegation that respondents were merely substitutes or what they call pinch-hitters
(which means that they were employed to take the place of regular employees of petitioner who
were absent or on leave) does not change the fact that their jobs cannot be considered projects
within the purview of the law. Every industry, even public offices, has to deal with securing
substitutes for employees who are absent or on leave. Such tasks, whether performed by the
usual employee or by a substitute, cannot be considered separate and distinct from the other
undertakings of the company. While it is managements prerogative to device a method to deal
with this issue, such prerogative is not absolute and is limited to systems wherein employees are
not ingeniously and methodically deprived of their constitutionally protected right to security of
tenure. We are not convinced that a big corporation such as petitioner cannot device a system
wherein a sufficient number of technicians can be hired with a regular status who can take over
when their colleagues are absent or on leave, especially when it appears from the records that
petitioner hires so-called pinch-hitters regularly every month.
In affirming the Decision of the NLRC, the Court of Appeals furthermore noted that if respondents
were indeed project employees, petitioner should have reported the completion of its projects
and the dismissal of respondents in its finished projects:
There is another reason why we should rule in favor of private respondents. Nowhere in the
records is there any showing that petitioner reported the completion of its projects and the
dismissal of private respondents in its finished projects to the nearest Public Employment Office
as per Policy Instruction No. 2015 of the Department of Labor and Employment [DOLE].
Jurisprudence abounds with the consistent rule that the failure of an employer to report to the
nearest Public Employment Office the termination of its workers services everytime a project or
a phase thereof is completed indicates that said workers are not project employees.
In the extant case, petitioner should have filed as many reports of termination as there were
projects actually finished if private respondents were indeed project employees, considering that
the latter were hired and again rehired from 1996 up to 1999. Its failure to submit reports of
termination cannot but sufficiently convince us further that private respondents are truly regular
employees. Important to note is the fact that private respondents had rendered more than one (1)
year of service at the time of their dismissal which overturns petitioners allegations that private
respondents were hired for a specific or fixed undertaking for a limited period of time. 16 (Citations
omitted.)
We are not unaware of the decisions of the Court in Philippine Long Distance Telephone
Company v. Ylagan17and ABS-CBN Broadcasting Corporation v. Nazareno18 which held that the
employers failure to report the termination of employees upon project completion to the DOLE
Regional Office having jurisdiction over the workplace within the period prescribed militates
against the employers claim of project employment, even outside the construction industry. We
have also previously stated in another case that the Court should not allow circumvention of
labor laws in industries not falling within the ambit of Policy Instruction No. 20/Department Order
No. 19, thereby allowing the prevention of acquisition of tenurial security by project employees
who have already gained the status of regular employees by the employers conduct. 19
While it may not be proper to revisit such past pronouncements in this case, we nonetheless find
that petitioners theory of project employment fails the principal test of demonstrating that the
alleged project employee was assigned to carry out a specific project or undertaking, the duration
and scope of which were specified at the time the employee is engaged for the project. 20
The Court of Appeals also ruled that even if it is assumed that respondents are project
employees, they would nevertheless have attained regular employment status because of their
continuous rehiring:
Be that as it may, a project employee may also attain the status of a regular employee if there is
a continuous rehiring of project employees after the stoppage of a project; and the activities
performed are usual [and] customary to the business or trade of the employer. The Supreme
Court ruled that a project employee or a member of a work pool may acquire the status of a
regular employee when the following concur:
2) The tasks performed by the alleged project employee are vital, necessary and
indispensable to the usual business or trade of the employer.
The circumstances set forth by law and the jurisprudence is present in this case. In fine, even if
private respondents are to be considered as project employees, they attained regular
employment status, just the same.21 (Citation omitted.)
Anent this issue of attainment of regular status due to continuous rehiring, petitioner advert to the
fixed period allegedly designated in employment contracts and reflected in vouchers. Petitioner
cites our pronouncements in Brent, St. Theresas School of Novaliches Foundation v. National
Labor Relations Commission,22 and Fabela v. San Miguel Corporation,23 and argues that
respondents were fully aware and freely entered into agreements to undertake a particular
activity for a specific length of time.24 Petitioner apparently confuses project employment from
fixed term employment. The discussions cited by petitioner in Brent, St. Theresas and Fabela all
refer to fixed term employment, which is subject to a different set of requirements.
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 the employee dealt with each other on
more or less equal terms with no moral dominance exercised by the former or the
latter.28 (Citation omitted.)
These indications, which must be read together, make the Brent doctrine applicable only in a few
special cases wherein the employer and employee are on more or less in equal footing in
entering into the contract. The reason for this is evident: when a prospective employee, on
account of special skills or market forces, is in a position to make demands upon the prospective
employer, such prospective employee needs less protection than the ordinary worker. Lesser
limitations on the parties freedom of contract are thus required for the protection of the
employee. These indications were applied in Pure Foods Corporation v. National Labor Relations
Commission,29where we discussed the patent inequality between the employer and employees
therein:
[I]t could not be supposed that private respondents and all other so-called "casual" workers of
[the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month employment contract.
Cannery workers are never on equal terms with their employers. Almost always, they agree to
any terms of an employment contract just to get employed considering that it is difficult to find
work given their ordinary qualifications. Their freedom to contract is empty and hollow because
theirs is the freedom to starve if they refuse to work as casual or contractual workers. Indeed, to
the unemployed, security of tenure has no value. It could not then be said that petitioner and
private respondents "dealt with each other on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter.
To recall, it is doctrinally entrenched that in illegal dismissal cases, the employer has the burden
of proving with clear, accurate, consistent, and convincing evidence that the dismissal was
valid.30 It is therefore the employer which must satisfactorily show that it was not in a dominant
position of advantage in dealing with its prospective employee. Thus, in Philips Semiconductors
(Phils.), Inc. v. Fadriquela,31 this Court rejected the employers insistence on the application of the
Brent doctrine when the sole justification of the fixed terms is to respond to temporary albeit
frequent need of such workers:
We reject the petitioners submission that it resorted to hiring employees for fixed terms to
augment or supplement its regular employment "for the duration of peak loads" during short-term
surges to respond to cyclical demands; hence, it may hire and retire workers on fixed terms, ad
infinitum, depending upon the needs of its customers, domestic and international. Under the
petitioner's submission, any worker hired by it for fixed terms of months or years can never attain
regular employment status. x x x.
Similarly, in the case at bar, we find it unjustifiable to allow petitioner to hire and rehire workers
on fixed terms, ad infinitum, depending upon its needs, never attaining regular employment
status. To recall, respondents were repeatedly rehired in several fixed term contracts from 1996
to 1999. To prove the alleged contracts, petitioner presented cash disbursement vouchers signed
by respondents, stating that they were merely hired as pinch-hitters. It is apparent that
respondents were in no position to refuse to sign these vouchers, as such refusal would entail
not getting paid for their services. Plainly, respondents as "pinch-hitters" cannot be considered to
be in equal footing as petitioner corporation in the negotiation of their employment contract.
In sum, we affirm the findings of the NLRC and the Court of Appeals that respondents are regular
employees of petitioner. As regular employees, they are entitled to security of tenure and
1wphi1
therefore their services may be terminated only for just or authorized causes. Since petitioner
failed to prove any just or authorized cause for their termination, we are constrained to affirm the
findings of the NLRC and the Court of Appeals that they were illegally dismissed.
In light, however, of our ruling that respondents were illegally dismissed, we affirm the findings of
the NLRC and the Court of Appeals that respondents are entitled to separation pay in lieu of
reinstatement. We quote with approval the discussion of the Court of Appeals:
However, since petitioner refused to accept private respondents back to work, reinstatement is
no longer practicable. Allowing private respondents to return to their work might only subject
them to further embarrassment, humiliation, or even harassment.
Thus, in lieu of reinstatement, the grant of separation pay equivalent to one (1) month pay for
every year of service is proper which public respondent actually did. Where the relationship
between private respondents and petitioner has been severely strained by reason of their
respective imputations of accusations against each other, to order reinstatement would no longer
serve any purpose. In such situation, payment of separation pay instead of reinstatement is in
order.33 (Citations omitted.)
As regards night shift differential, the Labor Code provides that every employee shall be paid not
less than ten percent (10%) of his regular wage for each hour of work performed between ten
oclock in the evening and six oclock in the morning. 34 As employees of petitioner, respondents
are entitled to the payment of this benefit in accordance with the number of hours they worked
from 10:00 p.m. to 6:00 a.m., if any. In the Decision of the NLRC affirmed by the Court of
Appeals, the records were remanded to the Regional Arbitration Branch of origin for the
computation of the night shift differential and the separation pay. The Regional Arbitration Branch
of origin was likewise directed to require herein petitioner to produce additional documents where
necessary. Therefore, while we are affirming that respondents are entitled to night shift
differential in accordance with the number of hours they worked from 10:00 p.m. to 6:00 a.m., it is
the Regional Arbitration Branch of origin which should determine the computation thereof for
each of the respondents, and award no night shift differential to those of them who never worked
from 10:00 p.m. to 6:00 a.m.
It is also worthwhile to note that in the NLRC Decision, it was herein petitioner GMA Network,
Inc. (respondent therein) which was tasked to produce additional documents necessary for the
computation of the night shift differential. This is in accordance with our ruling in Dansart Security
Force & Allied Services Company v. Bagoy,35where we held that it is entirely within the
employer's power to present such employment records that should necessarily be in their
possession, and that failure to present such evidence must be taken against them.
Petitioner, however, is correct that the award of attorney's fees is contrary to jurisprudence. In De
las Santos v. Jebsen Maritime Inc., 36 we held:
Likewise legally correct is the deletion of the award of attorney's fees, the NLRC having failed to
explain petitioner's entitlement thereto. As a matter of sound policy, an award of attorney's fees
remains the exception rather than the rule. It must be stressed, as aptly observed by the
appellate court, that it is necessary for the trial court, the NLRC in this case, to make express
findings of facts and law that would bring the case within the exception. In fine, the factual, legal
or equitable justification for the award must be set forth in the text of the decision. The matter of
attorney's fees cannot be touched once and only in the fallo of the decision, else, the award
should be thrown out for being speculative and conjectural. In the absence of a stipulation,
attorney's fees are ordinarily not recoverable; otherwise a premium shall be placed on the right to
litigate. They are not awarded every time a party wins a suit. (Citations omitted.)
In the case at bar, the factual basis for the award of attorney's fees was not discussed in the text
of NLRC Decision. We are therefore constrained to delete the same.
WHEREFORE the Decision of the Court of Appeals dated September 8, 2006 and the
subsequent Resolution denying reconsideration dated January 22, 2007 in CA-G.R. SP No.
73652, are hereby AFFIRMED with the MODIFICATION that the award of attorney's fees in the
affirmed Decision of the National Labor Relations Commission is hereby DELETED.
SO ORDERED.
WE CONCUR:
BIENVENIDO L. REYES
Associate Justice
CERTIFICATION
Pursuant to Section 13 Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
Footnotes
1
Rollo, pp. 9-23; penned by Associate Justice Priscilla Baltazar-Padilla with Associate
Justices Isaias P. Dicdican and Romeo F. Barza concurring.
2
Id. at 25-26.
3
Id. at 10-12.
4
Id. at 188-189.
5
Id. at 175-176.
6
Id. at 42-43.
7
Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v. Philippine
National Oil Company-Energy Development Corporation, G.R. No. 170351, March 30,
2011, 646 SCRA 658, 665.
8
260 Phil. 747 (1990).
9
G.R. No. 109902, August 2, 1994, 234 SCRA 678, 684-686.
10
Supra note 7 at 668-669.
11
ALU-TUCP v. National Labor Relations Commission, supra note 9 at 684-685.
12
537 Phil. 840 (2006).
13
357 Phil. 954 (1998).
14
Rollo, pp. 10-11.
15
This has been superseded by Department Order No. 19, series of 1993, which likewise
imposed on the employer a duty to report terminations of project employment in the
construction industry to the DOLE.
16
Rollo, p. 17.
17
Supra note 12.
18
534 Phil. 306 (2006).
19
Maraguinot, Jr. v. National Labor Relations Commission, 348 Phil. 580, 606 (1998).
20
Pasos v. Philippine National Construction Corporation, G.R. No. 192394, July 3, 2013.
21
Rollo, pp. 17-18.
22
351 Phil. 1038 (1998).
23
544 Phil. 223 (2007).
24
Rollo, pp. 378-382.
25
Brent School, Inc. v. Zamora, supra note 8 at 757.
26
Philips Semiconductors (Phils.), Inc. v. Fadriquela, 471 Phil. 355, 372 (2004).
27
Id.
Romares v. National Labor Relations Commission, 355 Phil. 835, 847 (1998); Philips
28
29
347 Phil. 434, 444 (1997).
32
Rollo, pp. 384-387.
33
Id. at 20.
34
LABOR CODE, Article 86.
35
G.R. No. 168495, July 2, 2010, 622 SCRA 694.
36
512 Phil. 301, 315-316 (2005).