G.R. No. 149440. January 28, 2003.* The facts are stated in the opinion of the Court.

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE PANGANIBAN, J.:
SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD
Although the employers have shown that respondents performed work that was
AND GENERAL TRADE, respondents.
seasonal in nature, they failed to prove that the latter worked only for the duration of
Labor Law; Employment; Regular Employee; Definition.[T]he test of whether or one particular season. In fact, petitioners do not deny that these workers have served
not an employee is a regular employee has been laid down in De Leon v. NLRC, in them for several years already. Hence, they are regularnot seasonalemployees.
which this Court held: The primary standard, therefore, of determining regular
The Case
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 Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking
whether the former is usually necessary or desirable in the usual trade or business of to set aside the February 20, 2001 Decision of the Court of Appeals1 (CA) in CA-GR SP
the employer. The connection can be determined by considering the nature of the No. 51033. The dispositive part of the Decision reads:
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 WHEREFORE, premises considered, the instant special civil action for certiorari is
if the performance is not continuous and merely intermittent, the law deems hereby DENIED.
repeated and continuing need for its performance as sufficient evidence of the
On the other hand, the National Labor Relations Commission (NLRC) Decision, upheld
necessity if not indispensability of that activity to the business. Hence, the
by the CA, disposed in this wise:
employment is considered regular, but only with respect to such activity and while
such activity exists. x x x x x x x x x x x x [T]he fact that [respondents] do not work WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET
continuously for one whole year but only for the duration of the x x x season does not ASIDE and VACATED and a new one entered declaring complainants to have been
detract from considering them in regular employment since in a litany of cases this illegally dismissed. Respondents are hereby ORDERED to reinstate complainants
Court has already settled that seasonal workers who are called to work from time to except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their
time and are temporarily laid off during off-season are not separated from service in previous position and to pay full backwages from September 1991 until reinstated.
said period, but merely considered on leave until re-employed. Respondents being guilty of unfair labor practice are further ordered to pay
complainant union the sum of P10,000.00 as moral damages and P5,000.00 as
Same; Same; Same; Dismissals; The burden is on the employer to prove that the
exemplary damages.4
termination was for a valid and authorized cause.Where there is no showing of
clear, valid and legal cause for the termination of employment, the law considers the The Facts
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. In the case at bar, petitioners Contrary to the findings of the Labor Arbiter that complainants [herein respondents]
failed to prove any such cause for the dismissal of respondents who, as discussed refused to work and/or were choosy in the kind of jobs they wanted to perform, the
above, are regular employees. records is replete with complainants persistence and dogged determination in going
back to work.
PETITION for review on certiorari of a decision of the Court of Appeals.
Indeed, it would appear that respondents did not look with favor workers having Whereas the union staged a strike against management on January 2, 1992
organized themselves into a union. Thus, when complainant union was certified as grounded on the dismissal of the union officials and members;
the collective bargaining representative in the certification elections, respondents
Whereas parties to the present dispute agree to settle the case amicably once and
under the pretext that the result was on appeal, refused to sit down with the union
for all;
for the purpose of entering into a collective bargaining agreement. Moreover, the
workers including complainants herein were not given work for more than one Now therefore, in the interest of both labor and management, parties herein agree
month. In protest, complainants staged a strike which was however settled upon the as follows:
signing of a Memorandum of Agreement which stipulated among others that:
1. That the list of the names of affected union members hereto attached and made
a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 part of this agreement shall be referred to the Hacienda payroll of 1990 and
and will endeavor to conclude the same within thirty (30) days. determine whether or not this concerned Union members are hacienda workers;
b) The management will give priority to the women workers who are members of 2. That in addition to the payroll of 1990 as reference, herein parties will use as guide
the union in case work relative x x x or amount[ing] to gahit and [dipol] arises. the subjects of a Memorandum of Agreement entered into by and between the
parties last January 4, 1990;
c) Ariston Eruela, Jr. will be given back his normal work load which is six (6) days in a
week. 3. That herein parties can use other employment references in support of their
respective claims whether or not any or all of the listed 36 union members are
d) The management will provide fifteen (15) wagons for the workers and that
employees or hacienda workers or not as the case may be;
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 4. That in case conflict or disagreement arises in the determination of the status of
workers to supplement them. the particular hacienda workers subject of this agreement herein parties further
agree to submit the same to voluntary arbitration;
e) The management will not anymore allow the scabs, numbering about eighteen
(18) workers[,] to work in the hacienda; and 5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby
created to be composed of three representatives each and is given five working days
f) The union will immediately lift the picket upon signing of this agreement.
starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers. (Union
However, alleging that complainants failed to load the fifteen wagons, respondents representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea, Jr.)
reneged on its commitment to sit down and bargain collectively. Instead, respondent
Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation
employed all means including the use of private armed guards to prevent the
Meeting showed as follows:
organizers from entering the premises.
The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko
Moreover, starting September 1991, respondents did not any more give work
based on who received their 13th month pay. The following are deemed not
assignments to the complainants forcing the union to stage a strike on January 2,
considered employees:
1992. But due to the conciliation efforts by the DOLE, another Memorandum of
Agreement was signed by the complainants and respondents which provides: 1. Luisa Rombo
2. Ramona Rombo A. Whether or not the Court of Appeals erred in holding that respondents,
admittedly seasonal workers, were regular employees, contrary to the clear
3. Bobong Abrega
provisions of Article 280 of the Labor Code, which categorically state that seasonal
4. Boboy Silva 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
The name Orencio Rombo shall be verified in the 1990 payroll. have served for at least one year.
The following employees shall be reinstated immediately upon availability of work: B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, x x
x, and relying instead on rulings which are not directly applicable to the case at
When respondents again reneged on its commitment, complainants filed the
bench, viz., Philippine Tobacco, BacolodMurcia, and Gaco, x x x.
present complaint.
C. Whether or not the Court of Appeals committed grave abuse of discretion in
But for all their persistence, the risk they had to undergo in conducting a strike in
upholding the NLRCs conclusion that private respondents were illegally dismissed,
the face of overwhelming odds, complainants in an ironic twist of fate now find
that petitioner[s were] guilty of unfair labor practice, and that the union be awarded
themselves being accused of refusing to work and being choosy in the kind of work
moral and exemplary damages.8
they have to perform. 5 (Citations omitted)
Consistent with the discussion in petitioners Memorandum, we shall take up Items A
The CA affirmed that while the work of respondents was seasonal in nature, they
and B as the first issue and Item C as the second.
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 The Courts Ruling
infringement upon this right was deemed by the CA to be tantamount to illegal
dismissal. The Petition has no merit.

The appellate court found neither rhyme nor reason in petitioners argument that it First Issue: Regular Employment
was the workers themselves who refused to or were choosy in their work. As found
At -the outset, we must stress that only errors of law are generally reviewed by this
by the NLRC, the record of this case is replete with complainants persistence and
Court in petitions for review on certiorari of CA decisions. Questions of fact are not
dogged determination in going back to work.6
entertained. The Court is not a trier of facts and, in labor cases, this doctrine applies
The CA likewise concurred with the NLRCs finding that petitioners were guilty of with greater force. Factual questions are for labor tribunals to resolve. In the present
unfair labor practice. case, these have already been threshed out by the NLRC. Its findings were affirmed
by the appellate court.
Hence this Petition.7
Contrary to petitioners contention, the CA did not err when it held that respondents
Issues were regular employees.
Petitioners raise the following issues for the Courts consideration: Article 280 (now 295) of the Labor Code, as amended, states:
Art. 280. Regular and Casual Employment.The provisions of written agreement to employer. The connection can be determined by considering the nature of the work
the contrary notwithstanding and regardless of the oral agreement of the parties, an performed and its relation to the scheme of the particular business or trade in its
employment shall be deemed to be regular where the employee has been engaged to entirety. Also if the employee has been performing the job for at least a year, even if
perform activities which are usually necessary or desirable in the usual business or the performance is not continuous and merely intermittent, the law deems repeated
trade of the employer, except where the employment has been fixed for a specific and continuing need for its performance as sufficient evidence of the necessity if not
project or undertaking the completion or termination of which has been determined indispensability of that activity to the business. Hence, the employment is considered
at the time of the engagement of the employee or where the work or services to be regular, but only with respect to such activity and while such activity exists.
performed is seasonal in nature and the employment is for the duration of the
x x x [T]he fact that [respondents] do not work continuously for one whole year but
season.
only for the duration of the x x x season does not detract from considering them in
An employment shall be deemed to be casual if it is not covered by the preceding regular employment since in a litany of cases this Court has already settled that
paragraph: Provided, That, any employee who has rendered at least one year of seasonal workers who are called to work from time to time and are temporarily laid
service, whether such service is continuous or broken, shall be considered a regular off during off-season are not separated from service in said period, but merely
employee with respect to the activity in which he is employed and his employment considered on leave until re-employed.
shall continue while such activity exist. (Italics supplied)
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the
For respondents to be excluded from those classified as regular employees, it is not case at bar. In the earlier case, the workers were required to perform phases of
enough that they perform work or services that are seasonal in nature. They must agricultural work for a definite period of time, after which their services would be
have also been employed only for the duration of one season. The evidence proves available to any other farm owner. They were not hired regularly and repeatedly for
the existence of the first, but not of the second, condition. The fact that the same phase/s of agricultural work, but on and off for any single phase thereof. On
respondentswith the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga the other hand, herein respondents, having performed the same tasks for petitioners
and Boboy Silvarepeatedly worked as sugarcane workers for petitioners for several every season for several years, are considered the latters regular employees for their
years is not denied by the latter. Evidently, petitioners employed respondents for respective tasks. Petitioners eventual refusal to use their serviceseven if they were
more than one season. Therefore, the general rule of regular employment is ready, able and willing to perform their usual duties whenever these were available
applicable. and hiring of other workers to perform the tasks originally assigned to respondents
amounted to illegal dismissal of the latter.
In Abasolo v. National Labor Relations Commission,13 the Court issued this
clarification: 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
[T]he test of whether or not an employee is a regular employee has been laid down
assignments reeked of bad faith. These changes were implemented immediately after
in De Leon v. NLRC, in which this Court held:
respondents had organized themselves into a union and started demanding
The primary standard, therefore, of determining regular employment is the collective bargaining. Those who were union members were effectively deprived of
reasonable connection between the particular activity performed by the employee in their jobs. Petitioners move actually amounted to unjustified dismissal of
relation to the usual trade or business of the employer. The test is whether the respondents, in violation of the Labor Code.
former is usually necessary or desirable in the usual trade or business of the
Where there is no showing of clear, valid and legal cause for the termination of Note.Just because a worker was, for short periods of time, hired on pakyaw basis
employment, the law considers the matter a case of illegal dismissal and the burden does not necessarily mean that he was not employed to do other tasks for the
is on the employer to prove that the termination was for a valid and authorized remainder of the year. (SSS vs. CA, 348 SCRA 1 [2000])
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.
G.R. No. 100518. January 24, 2000.*
Second Issue: Unfair Labor Practice
ASSOCIATION OF TRADE UNIONS (ATU), RODOLFO MONTECLARO and EDGAR
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as
JUESAN, petitioners, vs. HON. COMMISSIONERS OSCAR N. ABELLA, MUSIB N. BUAT,
follows:
LEON GONZAGA, JR., ALGON ENGINEERING CONSTRUCTION CORP., ALEX GONZALES
Indeed, from respondents refusal to bargain, to their acts of economic inducements and EDITHA YAP, respondents.
resulting in the promotion of those who withdrew from the union, the use of armed
Same; Employer-Employee Relationships; Words and Phrases; Regular Employees,
guards to prevent the organizers to come in, and the dismissal of union officials and
and Project Employees, Explained.Regular employees are those who have been
members, one cannot but conclude that respondents did not want a union in their
engaged to perform activities which are usually necessary or desirable in the usual
haciendaa clear interference in the right of the workers to self-organization.
business or trade of the employer even if the parties enter into an agreement stating
We uphold the CAs affirmation of the above findings. Indeed, factual findings of otherwise. In contrast, project employees are those whose employment has been
labor officials, who are deemed to have acquired expertise in matters within their fixed for a specific project or undertaking the completion or termination of which has
respective jurisdictions, are generally accorded not only respect but even finality. been determined at the time of the engagement of the employee, or where the work
Their findings are binding on the Supreme Court.18 Verily, their conclusions are or services to be performed is seasonal in nature and the employment is for the
accorded great weight upon appeal, especially when supported by substantial duration of the season.
evidence.19 Consequently, the Court is not duty-bound to delve into the accuracy of
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
their factual findings, in the absence of a clear showing that these were arbitrary and
bereft of any rational basis.20 The facts are stated in the opinion of the Court.
The finding of unfair labor practice done in bad faith carries with it the sanction of Antonio A. Billones, Sr. for petitioners.
moral and exemplary damages.
Libron, Gaspar & Associates for private respondents.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners. QUISUMBING, J.:

SO ORDERED. This special civil action for certiorari under Rule 65 of the Rules of Court assails the
resolution of the National Labor Relations Commission promulgated on May 17,
Puno (Chairman), Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur. 1991, which modified the decision of the labor arbiter.
Petition denied, judgment affirmed.
Respondent company is a domestic corporation engaged in road construction Meanwhile, the aggrieved workers filed with the Regional Arbitration Branch of the
projects of the government. From 1968 to 1989, it engaged the services of workers to NLRC their individual complaints against private respondent company for illegal
work on various projects on different dates. Their contracts indicate the particular dismissal, unfair labor practice, underpayment of wages, 13th month pay, holiday pay
project they are assigned, the duration of their employment and their daily wage. and overtime pay. They also sought reinstatement with back wages. The cases were
consolidated and assigned to Labor Arbiter Nicolas Sayon for arbitration. However,
In February 1989, the above-named workers joined petitioner union as members.
noting that a similar case had been filed before the regional office of the labor
Accordingly, petitioner union filed a petition for certification election with the
department, the labor arbiter refrained from resolving the issue of underpayment of
regional office of the labor department. Respondent company opposed the petition
monetary benefits. He also found the charge of unfair labor practice untenable. But,
on the ground that the workers were project employees and therefore not qualified
on the charge of illegal dismissal, he ruled on October 31, 1989, as follows:
to form part of the rank and file collective bargaining unit. Not for long, the Med-
Arbiter dismissed the petition for certification election. On appeal, the Secretary of WHEREFORE in view of the foregoing, judgment is hereby rendered declaring the
Labor and Employment reversed the Med-Arbiters decision and ordered the dismissal of the following complainants illegal; namely:
immediate holding of a certification election.
1. Victorio C. Lunzaga
Meanwhile, the national president of petitioner union sent a demand letter to
2. Julito C. Macabodbod
respondent company seeking the payment of wage differentials to some affected
union members. As said demand was unheeded, petitioner union and the concerned 3. Alfredo E. Jalet
workers filed a complaint for payment of wage differentials and other benefits before
the Regional Office of the Department of Labor and Employment. 4. Gerundio F. Asejo

Shortly thereafter, respondent company terminated the employment of 5. Ramon R. Tabada

aforementioned workers owing to the completion of its projects or the expiration of
Respondent ALGON Engineering Construction Corporation and Alex Gonzales and
workers contracts. Respondent company explained the circumstances surrounding
Edith Yap, are hereby ordered to reinstate the above-named complainants to their
the separation of the workers from the service as follows:
former positions without loss of seniority rights plus six months backwages based on
However, the affected workers claim that they were dismissed because of their union their latest salary rate at the time of their dismissal, which is P65.00 per day
activities. In view of the alleged illegal dismissals and harassment by their employer, equivalent to monthly rate of P1,700.83, a total of P10,204.99 per complainant or in
the workers staged a strike on May 17, 1989. Upon complaint of respondent the total amount of P51,024.95.
company, Labor Arbiter Newton Sancho declared said strike illegal and decreed
The case of illegal dismissal filed by Armand Acero, Lordito Tatad, Teodoro Tabio,
further that Victorio Lunzaga, Alfred Jalet, Julito Macabodbod, Ramon Tabada and
Ramon Olivar, Valeriano Miyas, Jose Noval, Felimon Lagbao, Pedro Roche, Remsy
Remsy Asensi, who had participated in the strike, were deemed to have lost their
Asensi, Rodolfo Monteclaro, Edgar Juesan and Justiniano Sollano are hereby ordered
employment status.
dismissed for lack of merit.
On appeal, the National Labor Relations Commission affirmed said decision.
SO ORDERED.7
Petitioner union then elevated the matter to this Court by way of petition for
certiorari which was eventually dismissed.
Petitioners and private respondents separately appealed the Labor Arbiters ruling to respondents. Here, the plain and adequate remedy expressly provided by law was a
the National Labor Relations Commission. motion for reconsideration of the impugned resolution, based on palpable or patent
errors, to be made under oath and filed within ten (10) days from receipt of the
On May 17, 1991, the NLRC promulgated its resolution modifying the decision of
questioned resolution of the NLRC, a procedure which is jurisdictional. Further, it
Labor Arbiter Nicolas Sayon. It held that the labor arbiter erred in not resolving the
should be stressed that without a motion for reconsideration seasonably filed within
issue of underpayment of wages because not all of the original complainants filed the
the ten-day reglementary period, the questioned order, resolution or decision of
same money claims with the labor department.8 Thus, it awarded monetary benefits
NLRC, becomes final and executory after ten (10) calendar days from receipt thereof.
(wage differentials and 13th month pay) to qualified workers. The NLRC disposed of
Moreover, even if procedural lapses were to be set aside, we find no cogent reason
the case as follows:
sufficient to justify a departure from public respondents decision, as hereafter
2. The complaints of Edgar Juezon (sic), Lordito Tadtad and Ramon Tabada are elucidated.
hereby dismissed as prayed for by said complainants.
In this recourse, petitioners impute the following errors on the part of public
3. The complainants for illegal dismissal filed by Victorio Lunzaga (Lonzaga) and respondent:
Alfredo Jalet (Jalit) are hereby dismissed for having been rendered moot and
[I]
academic by Our decision in Case No. RAB-11-05-00352-89.
THAT THE HONORABLE COMMISSION ERRED IN HOLDING THAT THE DISMISSAL OF
4. The complaints of Macabodbod and Asejo for illegal dismissal are hereby
FIVE COMPLAINANTS WERE JUSTIFIED IN VIEW OF THE FACT THAT THEIR COMPLAINT
DISMISSED for lack of merit.
HAVE BEEN RENDERED MOOT AND ACADEMIC BY ITS DECISION IN CASE NO. RAB-05-
5. The charge of unfair labor practice is hereby dismissed for lack of merit. 00353-89.

SO ORDERED.9 [II]

As noted by the Solicitor General, private respondents filed their motion for THAT HONORABLE COMMISSION AGAIN ERRED IN DISMISSING THE COMPLAINT OF
reconsideration, which was denied. We find, however, that herein petitioners did not THE COMPLAINANTS MACABODBOD AND ASEJO FOR LACK OF MERIT.
move for reconsideration, as the petition did not so indicate and none appears on the
[III]
records before us.
THE HONORABLE COMMISSION SERIOUSLY ERRED IN AFFIRMING THE DECISION OF
Filing a petition for certiorari under Rule 65 without first moving for reconsideration
THE LABOR ARBITER DISMISSING PETITIONERS CHARGE OF UNFAIR LABOR PRACTICE
of the assailed resolution generally warrants the petitions outright dismissal. As we
AGAINST THE RESPONDENT CORPORATION.
consistently held in numerous cases, a motion for reconsideration by a concerned
party is indispensable for it affords the NLRC an opportunity to rectify errors or [IV]
mistakes it might have committed before resort to the courts can be had.
QUESTION OF LAW.15
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy
In petitions for certiorari under Rule 65 of the Rules of Court, it may be noted that
and adequate remedy in the ordinary course of law against acts of public
want of jurisdictionand grave abuse of discretion,16 and not merely
reversible error, are the proper grounds for review. The respondent acts without specific project or undertaking the completion or termination of which has been
jurisdiction if he does not have the legal authority to decide a case. There is excess of determined at the time of the engagement of the employee, or where the work or
jurisdiction if the respondent, having the power to determine the case, oversteps his services to be performed is seasonal in nature and the employment is for the
lawful authority. And there is grave abuse of discretion where the respondent acts in duration of the season.19
a capricious, whimsical, arbitrary or despotic manner, in effect equivalent to lack of
Furthermore, Policy Instruction No. 20, which was in force during the period of
jurisdiction.17 Here, petitioners neither assail the jurisdiction of public respondent
petitioners employment, stated:
nor attribute any grave abuse of discretion on the part of the labor tribunal.
Necessarily, this petition must fail, for lack of substantial requisites under Rule 65. Project employees are those employed in connection with a particular construction
project. Non-project (regular) employees are those employed by a construction
Nevertheless, if only to cast aside all doubts for the benefit of the concerned workers,
company without reference to any particular project.
we assayed into the merits of the case. As properly stated by the Solicitor General,
the point of inquiry here is whether petitioners are regular or project employees of Project employees are not entitled to termination pay if they are terminated as a
respondent company. result of the completion of the project or any phase thereof in which they are
employed, regardless of the number of projects in which they have been employed
The Labor Code defines regular, project and casual employees as follows:
by a particular construction company. Moreover, the company is not required to
ART. 280. Regular and Casual EmploymentThe provisions of written agreement to obtain clearance from the Secretary of Labor in connection with such termination.
the contrary notwithstanding and regardless of the oral agreement of the parties, an What is required of the company is report to the nearest Public Employment Office
employment shall be deemed to be regular where the employee has been engaged to for statistical purposes.
perform activities which are usually necessary or desirable in the usual business or
In the case at bar, the contracts of employment of the petitioners attest to the fact
trade of the employer, except where the employment has been fixed for a specific
that they had been hired for specific projects, and their employment was
project or undertaking the completion or termination of which has been determined
coterminous with the completion of the project for which they had been hired. Said
at the time of the engagement of the employee or where the work or services to be
contracts expressly provide that the workers tenure of employment would depend
performed is seasonal in nature and the employment is for the duration of the
on the duration of any phase of the project or the completion of the awarded
season.
government construction projects in any of their planned phases. Further, petitioners
And employment shall be deemed to be casual if it is not covered by the preceding were informed in advance that said project or undertaking for which they were hired
paragraph: Provided, That, any employee who has rendered at least one year of would end on a stated or determinable date. Besides, public respondent noted that
service, whether such service is continuous or broken, shall be considered a regular respondent company regularly submitted reports of termination of services of project
employee with respect to the activity in which he is employed and his employment workers to the regional office of the labor department as required under Policy
shall continue while such activity exists.(Italics supplied.) Instruction No. 20. This compliance with the reportorial requirement confirms that
petitioners were project employees.
Thus, regular employees are those who have been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the Considering that petitioners were project employees, whose nature of employment
employer even if the parties enter into an agreement stating otherwise.18 In they were fully informed about, at the time of their engagement, related to a specific
contrast, project employees are those whose employment has been fixed for a project, work or undertaking, their employment legally ended upon completion of
said project. The termination of their employment could not be regarded as illegal the Labor Code provides: ART. 280. REGULAR AND CASUAL EMPLOYMENT.The
dismissal. 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
WHEREFORE, the instant petition is DISMISSED, and the assailed RESOLUTION of
where the employee has been engaged to perform activities which are usually
respondent NLRC dated May 17, 1991, is AFFIRMED.
necessary or desirable in the usual business or trade of the employer except where
No pronouncement as to costs. 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
SO ORDERED. employee or where the work or services to be performed is seasonal in nature and
the employment is for the duration of the season.
Bellosillo (Chairman), Mendoza, Buena and De Leon, Jr., JJ., concur.
Same; Same; Same; Same; Respondents cannot be considered talents because they
Petition dismissed, resolution affirmed.
are not actors or actresses or radio specialists or mere clerks or utility employees
they are regular employees who perform several different duties under the control
and direction of the broadcast company executives and supervisors.It is of no
G.R. No. 164156. September 26, 2006.* moment that petitioner hired respondents as talents. The fact that respondents
ABS-CBN BROADCASTING CORPORATION, petitioner, vs. MARLYN NAZARENO, received pre-agreed talent fees instead of salaries, that they did not observe the
MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN, respondents. required office hours, and that they were permitted to join other productions during
their free time are not conclusive of the nature of their employment. Respondents
Same; Broadcast Industry; Regular Employees; Project Employees; While the question cannot be considered talents because they are not actors or actresses or radio
of whether respondents are regular or project employees or independent contractors specialists or mere clerks or utility employees. They are regular employees who
is essentially factual in nature, the Court is constrained to resolve it due to its perform several different duties under the control and direction of ABS-CBN
tremendous effects on the legions of production assistants working in the Philippine executives and supervisors.
broadcasting industry.Case law is that this Court has always accorded respect and
finality to the findings of fact of the CA, particularly if they coincide with those of the Same; Same; Same; Same; There are two kinds of regular employees under the law
Labor Arbiter and the National Labor Relations Commission, when supported by (1) those engaged to perform activities which are necessary or desirable in the usual
substantial evidence. The question of whether respondents are regular or project business or trade of the employer, and, (2) those casual employees who have
employees or independent contractors is essentially factual in nature; nonetheless, rendered at least one year of service, whether continuous or broken, with respect to
the Court is constrained to resolve it due to its tremendous effects to the legions of the activities in which they are employed. The law overrides such conditions which
production assistants working in the Philippine broadcasting industry. We agree with are prejudicial to the interest of the worker whose weak bargaining situation
respondents contention that where a person has rendered at least one year of necessitates the succor of the State. What determines whether a certain employment
service, regardless of the nature of the activity performed, or where the work is is regular or otherwise is not the will or word of the employer, to which the worker
continuous or intermittent, the employment is considered regular as long as the oftentimes acquiesces, much less the procedure of hiring the employee or the
activity exists, the reason being that a customary appointment is not indispensable manner of paying the salary or the actual time spent at work. It is the character of the
before one may be formally declared as having attained regular status. Article 280 of activities performed in relation to the particular trade or business taking into account
all the circumstances, and in some cases the length of time of its performance and its
continued existence. It is obvious that one year after they were employed by contractors. Program employees, or project employees, are different from
petitioner, respondents became regular employees by operation of law. independent contractors because in the case of the latter, no employer-employee
relationship exists.
Same; Same; Same; Same; Words and Phrases; Under existing jurisprudence,
project could refer to two distinguishable types of activitiesfirst, a project may Same; Same; Same; Same; The presumption is that when the work done is an integral
refer to a particular job or undertaking that is within the regular or usual business of part of the regular business of the employer and when the worker, relative to the
the employer, but which is distinct and separate, and identifiable as such, from the employer, does not furnish an independent business or professional service, such work
other undertaking of the company, and second, the term project may also refer to a is a regular employment of such employee and not an independent contractor. The
particular job or undertaking that is not within the regular business of the Court will peruse beyond any such agreement to examine the facts that typify the
employer.Respondents cannot be considered as project or program employees parties actual relationship.
because no evidence was presented to show that the duration and scope of the
PETITION for review on certiorari of the decision and resolution of the Court of
project were determined or specified at the time of their engagement. The principal
Appeals.
test 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 facts are stated in the opinion of the Court.
the employees were engaged for that project.
De Mesa, Zaballero & Partners Law Offices for petitioner.
Same; Same; Same; Same; While length of time may not be a sole controlling test for
project employment, it can be a strong factor to determine whether the employee Amorito V. Caete for respondents.
was hired for a specific undertaking or in fact tasked to perform functions which are
CALLEJO, SR., J.:
vital, necessary and indispensable to the usual trade or business of the employer.It
is undisputed that respondents had continuously performed the same activities for Before us is a petition for review on certiorari of the Decision1 of the Court of
an average of five years. Their assigned tasks are necessary or desirable in the usual Appeals (CA) in CA-G.R. SP No. 76582 and the Resolution denying the motion for
business or trade of the petitioner. The persisting need for their services is sufficient reconsideration thereof. The CA affirmed the Decision and Resolution of the National
evidence of the necessity and indispensability of such services to petitioners business Labor Relations Commission (NLRC) in NLRC Case No. V-000762-2001 (RAB Case No.
or trade. We note further that petitioner did not report the termination of VII-10-1661-2001) which likewise affirmed, with modification, the decision of the
respondents employment in the particular project to the Department of Labor and Labor Arbiter declaring the respondents Marlyn Nazareno, Merlou Gerzon, Jennifer
Employment Regional Office having jurisdiction over the workplace within 30 days Deiparine and Josephine Lerasan as regular employees.
following the date of their separation from work, using the prescribed form on
employees termination/dismissals/suspensions. The Antecedents

Same; Same; Same; Same; Program employees, or project employees, are different Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the
from independent contractors because in the case of the latter, no employer- broadcasting business and owns a network of television and radio stations, whose
employee relationship exists.As gleaned from the records of this case, petitioner operations revolve around the broadcast, transmission, and relay of
itself is not certain how to categorize respondents. In its earlier pleadings, petitioner telecommunication signals. It sells and deals in or otherwise utilizes the airtime it
classified respondents as program employees, and in later pleadings, independent generates from its radio and television operations. It has a franchise as a
broadcasting company, and was likewise issued a license and authority to operate by programs, and that the DYAB studio operations would be handled by the studio
the National Telecommunications Commission. technician. Thus, their schedule were revised and other assignments were given.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as Respondent Gerzon was assigned as the full-time PA of the TV News Department
production assistants (PAs) on different dates. They were assigned at the news and reporting directly to Leo Lastimosa.
public affairs, for various radio programs in the Cebu Broadcasting Station, with a
On October 12, 2000, respondents filed a Complaint for Recognition of Regular
monthly compensation of P4,000. They were issued ABS-CBN employees
Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay,
identification cards and were required to work for a minimum of eight hours a day,
Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the
including Sundays and holidays. They were made to perform the following tasks and
petitioner before the NLRC. The Labor Arbiter directed the parties to submit their
duties:
respective position papers. Upon respondents failure to file their position papers
a) Prepare, arrange airing of commercial broadcasting based on the daily operations within the reglementary period, Labor Arbiter Jose G. Gutierrez issued an Order
log and digicart of respondent ABS-CBN; dated April 30, 2001, dismissing the complaint without prejudice for lack of interest
to pursue the case. Respondents received a copy of the Order on May 16, 2001.
b) Coordinate, arrange personalities for air interviews;
Instead of re-filing their complaint with the NLRC within 10 days from May 16, 2001,
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead- they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with Motion to
in or incoming reports; Admit Position Paper and Motion to Submit Case For Resolution. The Labor Arbiter
granted this motion in an Order dated June 18, 2001, and forthwith admitted the
d) Facilitate, prepare and arrange airtime schedule for public service announcement position paper of the complainants. Respondents made the following allegations:
and complaints;
1. Complainants were engaged by respondent ABS-CBN as regular and full-time
e) Assist, anchor program interview, etc.; and employees for a continuous period of more than five (5) years with a monthly salary
rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this
f) Record, log clerical reports, man based control radio.
complaint on November 20, 2000.
The PAs were under the control and supervision of Assistant Station Manager Dante
Machine copies of complainants ABS-CBN Employees Identification Card and salary
J. Luzon, and News Manager Leo Lastimosa.
vouchers are hereto attached.
On December 19, 1996, petitioner and the ABS-CBN Rank-and File Employees
Respondents insisted that they belonged to a work pool from which petitioner
executed a Collective Bargaining Agreement (CBA) to be effective during the period
chose persons to be given specific assignments at its discretion, and were thus under
from December 11, 1996 to December 11, 1999. However, since petitioner refused to
its direct supervision and control regardless of nomenclature. They prayed that
recognize PAs as part of the bargaining unit, respondents were not included to the
judgment be rendered in their favor, thus:
CBA.
WHEREFORE, premises considered, this Honorable Arbiter is most respectfully
On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing
prayed, to issue an order compelling defendants to pay complainants the following:
the PAs that effective August 1, 2000, they would be assigned to non-drama
1. One Hundred Thousand Pesos (P100,000.00) each and by way of moral damages;
2. Minimum wage differential; may also be assigned to new programs upon the cancellation of one program and the
commencement of another. As such program employees, their compensation is
3. Thirteenth month pay differential;
computed on a program basis, a fixed amount for performance services irrespective
4. Unpaid service incentive leave benefits; of the time consumed. At any rate, petitioner claimed, as the payroll will show,
respondents were paid all salaries and benefits due them under the law.
5. Sick leave;
Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA
6. Holiday pay; and interpret the same, especially since respondents were not covered by the
bargaining unit.
7. Premium pay;
On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents,
8. Overtime pay;
and declared that they were regular employees of petitioner; as such, they were
9. Night shift differential. awarded monetary benefits plus ten (10%) percent Attorneys Fees or a TOTAL
aggregate amount of PESOS: FIFTY TWO THOUSAND NINE HUNDRED TEN
Complainants further pray of this Arbiter to declare them regular and permanent (P52,910.00).
employees of respondent ABS-CBN as a condition precedent for their admission into
the existing union and collective bargaining unit of respondent company where they SO ORDERED.13
may as such acquire or otherwise perform their obligations thereto or enjoy the
However, the Labor Arbiter did not award money benefits as provided in the CBA on
benefits due therefrom.
his belief that he had no jurisdiction to interpret and apply the agreement, as the
For its part, petitioner alleged in its position paper that the respondents were PAs same was within the jurisdiction of the Voluntary Arbitrator as provided in Article 261
who basically assist in the conduct of a particular program ran by an anchor or talent. of the Labor Code. Respondents counsel received a copy of the decision on August
Among their duties include monitoring and receiving incoming calls from listeners 29, 2001. Respondent Nazareno received her copy on August 27, 2001, while the
and field re-porters and calls of news sources; generally, they perform leg work for other respondents received theirs on September 8, 2001. Respondents signed and
the anchors during a program or a particular production. They are considered in the filed their Appeal Memorandum on September 18, 2001.
industry as program employees in that, as distinguished from regular or station
For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter
employees, they are basically engaged by the station for a particular or specific
denied and considered as an appeal, conformably with Section 5, Rule V, of the NLRC
program broadcasted by the radio station. Petitioner asserted that as PAs, the
Rules of Procedure. Petitioner forthwith appealed the decision to the NLRC, while
complainants were issued talent information sheets which are updated from time to
respondents filed a partial appeal.
time, and are thus made the basis to determine the programs to which they shall
later be called on to assist. In its appeal, petitioner alleged the following:
Petitioner maintained that PAs, reporters, anchors and talents occasionally sideline 1. That the Labor Arbiter erred in reviving or re-opening this case which had long
for other programs they produce, such as drama talents in other productions. As been dismissed without prejudice for more than thirty (30) calendar days;
program employees, a PAs engagement is coterminous with the completion of the
program, and may be extended/renewed provided that the program is on-going; a PA
2. That the Labor Arbiter erred in depriving the respondent of its Constitutional right jurisdiction over the complaint of respondents because they acted in their individual
to due process of law; capacities and not as members of the union. Their claim for monetary benefits was
within the context of Article 217(6) of the Labor Code. The validity of respondents
3. That the Labor Arbiter erred in denying respondents Motion for Reconsideration
claim does not depend upon the interpretation of the CBA.
on an interlocutory order on the ground that the same is a prohibited pleading;
The NLRC ruled that respondents were entitled to the benefits under the CBA
4. That the Labor Arbiter erred when he ruled that the complainants are regular
because they were regular employees who contributed to the profits of petitioner
employees of the respondent;
through their labor.
5. That the Labor Arbiter erred when he ruled that the complainants are entitled to
Petitioner filed a motion for reconsideration, which the NLRC denied.
13th month pay, service incentive leave pay and salary differential; and
Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court
6. That the Labor Arbiter erred when he ruled that complainants are entitled to
before the CA, raising both procedural and substantive issues, as follows: (a) whether
attorneys fees.14
the NLRC acted without jurisdiction in admitting the appeal of respondents; (b)
On November 14, 2002, the NLRC rendered judgment modifying the decision of the whether the NLRC committed palpable error in scrutinizing the reopening and revival
Labor Arbiter. The fallo of the decision reads: of the complaint of respondents with the Labor Arbiter upon due notice despite the
lapse of 10 days from their receipt of the July 30, 2001 Order of the Labor Arbiter; (c)
WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez whether respondents were regular employees; (d) whether the NLRC acted without
dated 30 July 2001 is SET ASIDE and VACATED and a new one is entered ORDERING jurisdiction in entertaining and resolving the claim of the respondents under the CBA
respondent ABS-CBN Broadcasting Corporation, as follows: instead of referring the same to the Voluntary Arbitrators as provided in the CBA; and
(e) whether the NLRC acted with grave abuse of discretion when it awarded
1. To pay complainants of their wage differentials and other benefits arising from the
monetary benefits to respondents under the CBA although they are not members of
CBA as of 30 September 2002 in the aggregate amount of P2,561,948.22;
the appropriate bargaining unit.
2. To deliver to the complainants 233 sacks of rice as of 30 September 2002
On February 10, 2004, the CA rendered judgment dismissing the petition. It held that
representing their rice subsidy in the CBA;
the perfection of an appeal shall be upon the expiration of the last day to appeal by
3. To grant to the complainants all the benefits of the CBA after 30 September 2002. all parties, should there be several parties to a case. Since respondents received their
copies of the decision on September 8, 2001 (except respondent Nazareno who
SO ORDERED.15 received her copy of the decision on August 27, 2001), they had until September 18,
The NLRC declared that the Labor Arbiter acted conformably with the Labor Code 2001 within which to file their Appeal Memorandum. Moreover, the CA declared that
when it granted respondents motion to refile the complaint and admit their position respondents failure to submit their position paper on time is not a ground to strike
paper. Although respondents were not parties to the CBA between petitioner and the out the paper from the records, much less dismiss a complaint.
ABS-CBN Rank and-File Employees Union, the NLRC nevertheless granted and Anent the substantive issues, the appellate court stated that respondents are not
computed respondents monetary benefits based on the 1999 CBA, which was mere project employees, but regular employees who perform tasks necessary and
effective until September 2002. The NLRC also ruled that the Labor Arbiter had desirable in the usual trade and business of petitioner and not just its project
employees. Moreover, the CA added, the award of benefits accorded to rank-and-file They assert that although the appeal was filed 10 days late, it may still be given due
employees under the 1996-1999 CBA is a necessary consequence of the NLRC ruling course in the interest of substantial justice as an exception to the general rule that
that respondents, as PAs, are regular employees. the negligence of a counsel binds the client. On the issue of the late filing of their
position paper, they maintain that this is not a ground to strike it out from the
Finding no merit in petitioners motion for reconsideration, the CA denied the same
records or dismiss the complaint.
in a Resolution dated June 16, 2004.
We find no merit in the petition.
Petitioner thus filed the instant petition for review on certiorari and raises the
following assignments of error: We agree with petitioners contention that the perfection of an appeal within the
statutory or reglementary period is not only mandatory, but also jurisdictional; failure
1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND
to do so renders the assailed decision final and executory and deprives the appellate
GRAVELY ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS COMMISSION
court or body of the legal authority to alter the final judgment, much less entertain
NOTWITHSTANDING THE PATENT NULLITY OF THE LATTERS DECISION AND
the appeal. However, this Court has time and again ruled that in exceptional cases, a
RESOLUTION.
belated appeal may be given due course if greater injustice may occur if an appeal is
2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING not given due course than if the reglementary period to appeal were strictly
OF THE NLRC FINDING RESPONDENTS REGULAR EMPLOYEES. followed.19 The Court resorted to this extraordinary measure even at the expense of
sacrificing order and efficiency if only to serve the greater principles of substantial
3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING justice and equity.20
OF THE NLRC AWARDING CBA BENEFITS TO RESPONDENTS.18
In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving
Considering that the assignments of error are interrelated, the Court shall resolve Article 22321 of the Labor Code a liberal application to prevent the miscarriage of
them simultaneously. justice. Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties.22 We have held in a
Petitioner asserts that the appellate court committed palpable and serious error of
catena of cases that technical rules are not binding in labor cases and are not to be
law when it affirmed the rulings of the NLRC, and entertained respondents appeal
applied strictly if the result would be detrimental to the workingman.23
from the decision of the Labor Arbiter despite the admitted lapse of the reglementary
period within which to perfect the same. Petitioner likewise maintains that the 10day Admittedly, respondents failed to perfect their appeal from the decision of the Labor
period to appeal must be reckoned from receipt of a partys counsel, not from the Arbiter within the reglementary period therefor. However, petitioner perfected its
time the party learns of the decision, that is, notice to counsel is notice to party and appeal within the period, and since petitioner had filed a timely appeal, the NLRC
not the other way around. Finally, petitioner argues that the reopening of a acquired jurisdiction over the case to give due course to its appeal and render the
complaint which the Labor Arbiter has dismissed without prejudice is a clear violation decision of November 14, 2002. Case law is that the party who failed to appeal from
of Section 1, Rule V of the NLRC Rules; such order of dismissal had already attained the decision of the Labor Arbiter to the NLRC can still participate in a separate appeal
finality and can no longer be set aside. timely filed by the adverse party as the situation is considered to be of greater
benefit to both parties.
Respondents, on the other hand, allege that their late appeal is a non-issue because it
was petitioners own timely appeal that empowered the NLRC to reopen the case.
We find no merit in petitioners contention that the Labor Arbiter abused his Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-
discretion when he admitted respondents position paper which had been belatedly opened the dismissed case without prejudice beyond the ten (10) day reglementary
filed. It bears stressing that the Labor Arbiter is mandated by law to use every period had inadvertently failed to follow Section 16, Rule V, Rules Procedure of the
reasonable means to ascertain the facts in each case speedily and objectively, NLRC which states:
without technicalities of law or procedure, all in the interest of due process. Indeed,
A party may file a motion to revive or re-open a case dismissed without prejudice
as stressed by the appellate court, respondents failure to submit a position paper on
within ten (10) calendar days from receipt of notice of the order dismissing the same;
time is not a ground for striking out the paper from the records, much less for
otherwise, his only remedy shall be to re-file the case in the arbitration branch of
dismissing a complaint.26 Likewise, there is simply no truth to petitioners assertion
origin.
that it was denied due process when the Labor Arbiter admitted respondents
position paper without requiring it to file a comment before admitting said position the same is not a serious flaw that had prejudiced the respondents right to due
paper. The essence of due process in administrative proceedings is simply an process. The case can still be refiled because it has not yet prescribed. Anyway,
opportunity to explain ones side or an opportunity to seek reconsideration of the Article 221 of the Labor Code provides:
action or ruling complained of. Obviously, there is nothing in the records that would
suggest that petitioner had absolute lack of opportunity to be heard.27 Petitioner In any proceedings before the Commission or any of the Labor Arbiters, the rules of
had the right to file a motion for reconsideration of the Labor Arbiters admission of evidence prevailing in courts of law or equity shall not be controlling and it is the
respondents position paper, and even file a Reply thereto. In fact, petitioner filed its spirit and intention of this Code that the Commission and its members and the Labor
position paper on April 2, 2001. It must be stressed that Article 280 of the Labor Code Arbiters shall use every and all reasonable means to ascertain the facts in each case
was encoded in our statute books to hinder the circumvention by unscrupulous speedily and objectively and without regard to technicalities of law or procedure, all
employers of the employees right to security of tenure by indiscriminately and in the interest of due process.
absolutely ruling out all written and oral agreements inharmonious with the concept
The admission by the Labor Arbiter of the complainants Position Paper and
of regular employment defined therein.28
Supplemental Manifestation which were belatedly filed just only shows that he acted
We quote with approval the following pronouncement of the NLRC: within his discretion as he is enjoined by law to use every reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
The complainants, on the other hand, contend that respondents assailed the Labor technicalities of law or procedure, all in the interest of due process. Indeed, the
Arbiters order dated 18 June 2001 as violative of the NLRC Rules of Procedure and as failure to submit a position paper on time is not a ground for striking out the paper
such is violative of their right to procedural due process. That while suggesting that from the records, much less for dismissing a complaint in the case of the
an Order be instead issued by the Labor Arbiter for complainants to refile this case, complainant. (University of Immaculate Conception vs. UIC Teaching and Non-
respondents impliedly submit that there is not any substantial damage or prejudice Teaching Personnel Employees, G.R. No. 144702, July 31, 2001, 362 SCRA 242)
upon the refiling, even so, respondents suggestion acknowledges complainants right
to prosecute this case, albeit with the burden of repeating the same procedure, thus, In admitting the respondents position paper albeit late, the Labor Arbiter acted
entailing additional time, efforts, litigation cost and precious time for the Arbiter to within her discretion. In fact, she is enjoined by law to use every reasonable means to
repeat the same process twice. Respondents suggestion, betrays its notion of ascertain the facts in each case speedily and objectively, without technicalities of law
prolonging, rather than promoting the early resolution of the case. or procedure, all in the interest of due process. (Panlilio vs. NLRC, 281 SCRA 53)
The respondents were given by the Labor Arbiter the opportunity to submit position usual business or trade of the employer except where the employment has been
paper. In fact, the respondents had filed their position paper on 2 April 2001. What is fixed for a specific project or undertaking the completion or termination of which has
material in the compliance of due process is the fact that the parties are given the been determined at the time of the engagement of the employee or where the work
opportunities to submit position papers. or services to be performed is seasonal in nature and the employment is for the
duration of the season.
Due process requirements are satisfied where the parties are given the
opportunities to submit position papers. (Laurence vs. NLRC, 205 SCRA 737) In Universal Robina Corporation v. Catapang,31 the Court reiterated the test in
determining whether one is a regular employee:
Thus, the respondent was not deprived of its Constitutional right to due process of
law.29 The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the employee in
We reject, as barren of factual basis, petitioners contention that respondents are
relation to the usual trade or business of the employer. The test is whether the
considered as its talents, hence, not regular employees of the broadcasting company.
former is usually necessary or desirable in the usual business or trade of the
Petitioners claim that the functions performed by the respondents are not at all
employer. The connection can be determined by considering the nature of work
necessary, desirable, or even vital to its trade or business is belied by the evidence on
performed and its relation to the scheme of the particular business or trade in its
record.
entirety. Also, if the employee has been performing the job for at least a year, even if
Case law is that this Court has always accorded respect and finality to the findings of the performance is not continuous and merely intermittent, the law deems repeated
fact of the CA, particularly if they coincide with those of the Labor Arbiter and the and continuing need for its performance as sufficient evidence of the necessity if not
National Labor Relations Commission, when supported by substantial evidence.30 indispensability of that activity to the business. Hence, the employment is considered
The question of whether respondents are regular or project employees or regular, but only with respect to such activity and while such activity exists.32
independent contractors is essentially factual in nature; nonetheless, the Court is
As elaborated by this Court in Magsalin v. National Organization of Working Men:33
constrained to resolve it due to its tremendous effects to the legions of production
assistants working in the Philippine broadcasting industry. Even while the language of law might have been more definitive, the clarity of its
spirit and intent, i.e., to ensure a regular workers security of tenure, however, can
We agree with respondents contention that where a person has rendered at least
hardly be doubted. In determining whether an employment should be considered
one year of service, regardless of the nature of the activity performed, or where the
regular or non-regular, the applicable test is the reasonable connection between the
work is continuous or intermittent, the employment is considered regular as long as
particular activity performed by the employee in relation to the usual business or
the activity exists, the reason being that a customary appointment is not
trade of the employer. The standard, supplied by the law itself, is whether the work
indispensable before one may be formally declared as having attained regular status.
undertaken is necessary or desirable in the usual business or trade of the employer, a
Article 280 of the Labor Code provides:
fact that can be assessed by looking into the nature of the services rendered and its
ART. 280. REGULAR AND CASUAL EMPLOYMENT.The provisions of written relation to the general scheme under which the business or trade is pursued in the
agreement to the contrary notwithstanding and regardless of the oral agreement of usual course. It is distinguished from a specific undertaking that is divorced from the
the parties, an employment shall be deemed to be regular where the employee has normal activities required in carrying on the particular business or trade. But,
been engaged to perform activities which are usually necessary or desirable in the although the work to be performed is only for a specific project or seasonal, where a
person thus engaged has been performing the job for at least one year, even if the time spent at work. It is the character of the activities performed in relation to the
performance is not continuous or is merely intermittent, the law deems the repeated particular trade or business taking into account all the circumstances, and in some
and continuing need for its performance as being sufficient to indicate the necessity cases the length of time of its performance and its continued existence.36 It is
or desirability of that activity to the business or trade of the employer. The obvious that one year after they were employed by petitioner, respondents became
employment of such person is also then deemed to be regular with respect to such regular employees by operation of law.37
activity and while such activity exists.34
Additionally, respondents cannot be considered as project or program employees
Not considered regular employees are project employees, the completion or because no evidence was presented to show that the duration and scope of the
termination of which is more or less determinable at the time of employment, such project were determined or specified at the time of their engagement. Under existing
as those employed in connection with a particular construction project, and jurisprudence, project could refer to two distinguishable types of activities. First, a
seasonal employees whose employment by its nature is only desirable for a limited project may refer to a particular job or undertaking that is within the regular or usual
period of time. Even then, any employee who has rendered at least one year of business of the employer, but which is distinct and separate, and identifiable as such,
service, whether continuous or intermittent, is deemed regular with respect to the from the other undertakings of the company. Such job or undertaking begins and
activity performed and while such activity actually exists. ends at determined or determinable times. Second, the term project may also refer
to a particular job or undertaking that is not within the regular business of the
It is of no moment that petitioner hired respondents as talents. The fact that
employer. Such a job or undertaking must also be identifiably separate and distinct
respondents received pre-agreed talent fees instead of salaries, that they did not
from the ordinary or regular business operations of the employer. The job or
observe the required office hours, and that they were permitted to join other
undertaking also begins and ends at determined or determinable times.38
productions during their free time are not conclusive of the nature of their
employment. Respondents cannot be considered talents because they are not The principal test is whether or not the project employees were assigned to carry out
actors or actresses or radio specialists or mere clerks or utility employees. They are a specific project or undertaking, the duration and scope of which were specified at
regular employees who perform several different duties under the control and the time the employees were engaged for that project.39
direction of ABS-CBN executives and supervisors.
In this case, it is undisputed that respondents had continuously performed the same
Thus, there are two kinds of regular employees under the law: (1) those engaged to activities for an average of five years. Their assigned tasks are necessary or desirable
perform activities which are necessary or desirable in the usual business or trade of in the usual business or trade of the petitioner. The persisting need for their services
the employer; and (2) those casual employees who have rendered at least one year is sufficient evidence of the necessity and indispensability of such services to
of service, whether continuous or broken, with respect to the activities in which they petitioners business or trade.40 While length of time may not be a sole controlling
are employed.35 test for project employment, it can be a strong factor to determine whether the
employee was hired for a specific undertaking or in fact tasked to perform functions
The law overrides such conditions which are prejudicial to the interest of the worker
which are vital, necessary and indispensable to the usual trade or business of the
whose weak bargaining situation necessitates the succor of the State. What
employer.41 We note further that petitioner did not report the termination of
determines whether a certain employment is regular or otherwise is not the will or
respondents employment in the particular project to the Department of Labor and
word of the employer, to which the worker oftentimes acquiesces, much less the
Employment Regional Office having jurisdiction over the workplace within 30 days
procedure of hiring the employee or the manner of paying the salary or the actual
following the date of their separation from work, using the prescribed form on ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to
employees termination/dismissals/suspensions.42 MJMDC. SONZA asserts that this mode of fee payment shows that he was an
employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits and
As gleaned from the records of this case, petitioner itself is not certain how to
privileges which he would not have enjoyed if he were truly the subject of a valid job
categorize respondents. In its earlier pleadings, petitioner classified respondents as
contract.
program employees, and in later pleadings, independent contractors. Program
employees, or project employees, are different from independent contractors All the talent fees and benefits paid to SONZA were the result of negotiations that led
because in the case of the latter, no employer-employee relationship exists. to the Agreement. If SONZA were ABS-CBNs employee, there would be no need for
the parties to stipulate on benefits such as SSS, Medicare, x x x and 13th month pay
Petitioners reliance on the ruling of this Court in Sonza v. ABSCBN Broadcasting
which the law automatically incorporates into every employer-employee contract.
Corporation 43 is misplaced. In that case, the Court explained why Jose Sonza, a well-
Whatever benefits SONZA enjoyed arose from contract and not because of an
known television and radio personality, was an independent contractor and not a
employer-employee relationship.
regular employee:
SONZAs talent fees, amounting to P317,000 monthly in the second and third year,
A.Selection and Engagement of Employee
are so huge and out of the ordinary that they indicate more an independent
ABS-CBN engaged SONZAS services to co-host its television and radio programs contractual relationship rather than an employer-employee relationship. ABS-CBN
because of SONZAS peculiar skills, talent and celebrity status. SONZA contends that agreed to pay SONZA such huge talent fees precisely because of SONZAs unique
the discretion used by respondent in specifically selecting and hiring complainant skills, talent and celebrity status not possessed by ordinary employees. Obviously,
over other broadcasters of possibly similar experience and qualification as SONZA acting alone possessed enough bargaining power to demand and receive such
complainant belies respondents claim of independent contractorship. huge talent fees for his services. The power to bargain talent fees way above the
salary scales of ordinary employees is a circumstance indicative, but not conclusive,
Independent contractors often present themselves to possess unique skills, expertise of an independent contractual relationship.
or talent to distinguish them from ordinary employees. The specific selection and
hiring of SONZA, because of his unique skills, talent and celebrity status not The payment of talent fees directly to SONZA and not to MJMDC does not negate the
possessed by ordinary employees, is a circumstance indicative, but not conclusive, of status of SONZA as an independent contractor. The parties expressly agreed on such
an independent contractual relationship. If SONZA did not possess such unique skills, mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to whom
talent and celebrity status, ABSCBN would not have entered into the Agreement with MJMDC would have to turn over any talent fee accruing under the Agreement.44
SONZA but would have hired him through its personnel department just like any
In the case at bar, however, the employer-employee relationship between petitioner
other employee.
and respondents has been proven.
In any event, the method of selecting and engaging SONZA does not conclusively
First. In the selection and engagement of respondents, no peculiar or unique skill,
determine his status. We must consider all the circumstances of the relationship,
talent or celebrity status was required from them because they were merely hired
with the control test being the most important element.
through petitioners personnel department just like any ordinary employee.
B. Payment of Wages
Second. The so-called talent fees of respondents correspond to wages given as a As earlier stated, it is not the will or word of the employer which determines the
result of an employer-employee relationship. Respondents did not have the power to nature of employment of an employee but the nature of the activities performed by
bargain for huge talent fees, a circumstance negating independent contractual such employee in relation to the particular business or trade of the employer.
relationship. Considering that We have clearly found that private respondents are regular
employees of petitioner, their exclusion from the said CBA on the misplaced belief of
Third. Petitioner could always discharge respondents should it find their work
the parties to the said agreement that they are project employees, is therefore not
unsatisfactory, and respondents are highly dependent on the petitioner for continued
proper. Finding said private respondents as regular employees and not as mere
work.
project employees, they must be accorded the benefits due under the said Collective
Fourth. The degree of control and supervision exercised by petitioner over Bargaining Agreement.
respondents through its supervisors negates the allegation that respondents are
A collective bargaining agreement is a contract entered into by the union
independent contractors.
representing the employees and the employer. However, even the non-member
The presumption is that when the work done is an integral part of the regular employees are entitled to the benefits of the contract. To accord its benefits only to
business of the employer and when the worker, relative to the employer, does not members of the union without any valid reason would constitute undue
furnish an independent business or professional service, such work is a regular discrimination against non-members. A collective bargaining agreement is binding on
employment of such employee and not an independent contractor.45 The Court will all employees of the company. Therefore, whatever benefits are given to the other
peruse beyond any such agreement to examine the facts that typify the parties employees of ABS-CBN must likewise be accorded to private respondents who were
actual relationship.46 regular employees of petitioner.48

It follows then that respondents are entitled to the benefits provided for in the Besides, only talent-artists were excluded from the CBA and not production assistants
existing CBA between petitioner and its rank-and-file employees. As regular who are regular employees of the respondents. Moreover, under Article 1702 of the
employees, respondents are entitled to the benefits granted to all other regular New Civil Code: In case of doubt, all labor legislation and all labor contracts shall be
employees of petitioner under the CBA.47 We quote with approval the ruling of the construed in favor of the safety and decent living of the laborer.
appellate court, that the reason why production assistants were excluded from the
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
CBA is precisely because they were erroneously classified and treated as project
assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76582 are
employees by petitioner:
AFFIRMED. Costs against petitioner.
x x x The award in favor of private respondents of the benefits accorded to rank-and-
SO ORDERED.
file employees of ABS-CBN under the 1996-1999 CBA is a necessary consequence of
public respondents ruling that private respondents as production assistants of Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.
petitioner are regular employees. The monetary award is not considered as claims
Panganiban (C.J., Chairperson), In the result.
involving the interpretation or implementation of the collective bargaining
agreement. The reason why production assistants were excluded from the said Petition denied, assailed decision and resolution affirmed.
agreement is precisely because they were classified and treated as project employees
by petitioner.
Notes.The proviso in the second paragraph of Article 280 of the Labor Code, employment without just cause, may hold the employee liable for damages. The
providing that an employee who has served for at least one year, shall be considered employee, upon whom no such notice was served in case of termination of
a regular employee, relates only to casual employees and not to project employees. employment without just cause, shall be entitled to compensation from the date of
(Villa vs. National Labor Relations Commission, 284 SCRA 105 [1998]) termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice. There was, to repeat, clear albeit
Ones regularity of employment is not determined by the number of hours one works
implied recognition of the licitness of term employment. RA 1787 also enumerated
but by the nature and by the length of time one has been in that particular job.
what it considered to be just causes for terminating an employment without a
(Perpetual Help Credit Cooperative, Inc. vs. Faburada, 366 SCRA 693 [2001])
definite period, either by the employer or by the employee without incurring any
liability therefor.

G.R. No. 48494. February 5, 1990.* Same; Same; The decisive determinant in term employment is not the nature of the
activities performed by the employee, but the day certain agreed upon by the
BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners, vs. RONALDO parties for the commencement and termination of their employment relationship.
ZAMORA, the Presidential Assistant for Legal Affairs, Office of the President, and The question immediately provoked by a reading of Article 319 is whether or not a
DOROTEO R. ALEGRE, respondents. voluntary agreement on a fixed term or period would be valid where the employee
has been engaged to perform activities which are usually necessary or desirable in
Labor Relations; Termination of Employment; R.A. 1052; Before the advent of the
the usual business or trade of the employer. The definition seems a non sequitur.
Labor Code, term employment was impliedly but clearly recognized under R.A. 1052,
From the premisethat the duties of an employee entail activities which are usually
as amended by R.A. 1787.The employment contract between Brent School and
necessary or desirable in the usual business or trade of the employerthe
Alegre was executed on July 18, 1971, at a time when the Labor Code of the
conclusion does not necessarily follow that the employer and employee should be
Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code did not come
forbidden to stipulate any period of time for the performance of those activities.
into effect until November 1, 1974, some three years after the perfection of the
There is nothing essentially contradictory between a definite period of an
employment contract, and rights and obligations thereunder had arisen and been
employment contract and the nature of the employees duties set down in that
mutually observed and enforced. At that time, i.e., before the advent of the Labor
contract as being usually necessary or desirable in the usual business or trade of the
Code, there was no doubt whatever about the validity of term employment. It was
employer. The concept of the employees duties as being usually necessary or
impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052,
desirable in the usual business or trade of the employer is not synonymous with or
as amended by R.A. 1787. Basically, this statute provided thatIn cases of
identical to employment with a fixed term. Logically, the decisive determinant in term
employment, without a definite period, in a commercial, industrial, or agricultural
employment should not be the activities that the employee is called upon to perform,
establishment or enterprise, the employer or the employee may terminate at any
but the day certain agreed upon by the parties for the commencement and
time the employment with just cause; or without just cause in the case of an
termination of their employment relationship, a day certain being understood to be
employee by serving written notice on the employer at least one month in advance,
that which must necessarily come, although it may not be known when. Seasonal
or in the case of an employer, by serving such notice to the employee at least one
employment, and employment for a particular project are merely instances of
month in advance or one-half month for every year of service of the employee,
employment in which a period, where not expressly set down, is necessarily implied.
whichever is longer, a fraction of at least six months being considered as one whole
year. The employer, upon whom no such notice was served in case of termination of
Same; Same; Same; Stipulations in employment contracts providing for term Some three months before the expiration of the stipulated period, or more precisely
employment or fixed period employment are valid when the period where agreed on April 20, 1976, Alegre was given a copy of the report filed by Brent School with the
upon knowingly, and voluntarily by the parties without force, duress or improper Department of Labor advising of the termination of his services effective on July 16,
pressure exerted on the employee; and when such stipulations were not designed to 1976. The stated ground for the termination was completion of contract, expiration
circumvent the laws on security of tenure.Accordingly, and since the entire purpose of the definite period of employment. And a month or so later, on May 26, 1976,
behind the development of legislation culminating in the present Article 280 of the Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing
Labor Code clearly appears to have been, as already observed, to prevent the phrase, in full payment of services for the period May 16, to July 17, 1976 as full
circumvention of the employees right to be secure in his tenure, the clause in said payment of contract.
article indiscriminately and completely ruling out all written or oral agreements
However, at the investigation conducted by a Labor Conciliator of said report of
conflicting with the concept of regular employment as defined therein should be
termination of his services, Alegre protested the announced termination of his
construed to refer to the substantive evil that the Code itself has singled out:
employment. He argued that although his contract did stipulate that the same would
agreements entered into precisely to circumvent security of tenure. It should have no
terminate on July 17, 1976, since his services were necessary and desirable in the
application to instances where a fixed period of employment was agreed upon
usual business of his employer, and his employment had lasted for five years, he had
knowingly and voluntarily by the parties, without any force, duress or improper
acquired the status of a regular employee and could not be removed except for valid
pressure being brought to bear upon the employee and absent any other
cause. The Regional Director considered Brent Schools report as an application for
circumstances vitiating his consent, or where it satisfactorily appears that the
clearance to terminate employment (not a report of termination), and accepting the
employer and employee dealt with each other on more or less equal terms with no
recommendation of the Labor Conciliator, refused to give such clearance and instead
moral dominance whatever being exercised by the former over the latter. Unless thus
required the reinstatement of Alegre, as a permanent employee, to his former
limited in its purview, the law would be made to apply to purposes other than those
position without loss of seniority rights and with full back wages. The Director
explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its
pronounced the ground relied upon by the respondent (Brent) in terminating the
effects and apt to lead to absurd and unintended consequences.
services of the complainant (Alegre) x x x (as) not sanctioned by P.D. 442, and, quite
NARVASA, J.: oddly, as prohibited by Circular No. 8, series of 1969, of the Bureau of Private
Schools.7
The question presented by the proceedings at bar is whether or not the provisions of
the Labor Code,2 as amended,3 have anathematized fixed period employment or Brent School filed a motion for reconsideration. The Regional Director denied the
employment for a term. motion and forwarded the case to the Secretary of Labor for review.8 The latter
sustained the Regional Director.9 Brent appealed to the Office of the President. Again
The root of the controversy at bar is an employment contract in virtue of which
it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed the
Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly
Labor Secretarys decision, ruling that Alegre was a permanent employee who could
compensation of P20,000.00. The contract fixed a specific term for its existence, five
not be dismissed except for just cause, and expiration of the employment contract
(5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17,
was not one of the just causes provided in the Labor Code for termination of
1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973,
services.10
and September 14, 1974 reiterated the same terms and conditions, including the
expiry date, as those contained in the original contract of July 18, 1971.
The School is now before this Court in a last attempt at vindication. That it will get Prior, thereto, it was the Code of Commerce which governed employment without a
here. fixed period, and also implicitly acknowledged the propriety of employment with a
fixed period. Its Article 302 provided that
The employment contract between Brent School and Alegre was executed on July 18,
1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet been In cases in which the contract of employment does not have a fixed period, any of the
promulgated. Indeed, the Code did not come into effect until November 1, 1974, parties may terminate it, notifying the other thereof one month in advance.
some three years after the perfection of the employment contract, and rights and
The factor or shop clerk shall have a right, in this case, to the salary corresponding to
obligations thereunder had arisen and been mutually observed and enforced.
said month.
At that time, i.e., before the advent of the Labor Code, there was no doubt whatever
The salary for the month directed to be given by the said Article 302 of the Code of
about the validity of term employment. It was impliedly but nonetheless clearly
Commerce to the factor or shop clerk, was known as the mesada (from mes, Spanish
recognized by the Termination Pay Law, R.A. 1052,11 as amended by R.A. 1787.12
for month). When Article 302 (together with many other provisions of the Code of
Basically, this statute provided that
Commerce) was repealed by the Civil Code of the Philippines, Republic Act No. 1052
In cases of employment, without a definite period, in a commercial, industrial, or was enacted avowedly for the precise purpose of reinstating the mesada.
agricultural establishment or enterprise, the employer or the employee may
Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and
terminate at any time the employment with just cause; or without just cause in the
became effective on August 30, 1950, itself deals with obligations with a period in
case of an employee by serving written notice on the employer at least one month in
section 2, Chapter 3, Title I, Book IV; and with contracts of labor and for a piece of
advance, or in the case of an employer, by serving such notice to the employee at
work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of Book IV. No prohibition
least one month in advance or one-half month for every year of service of the
against term- or fixed-period employment is contained in any of its articles or is
employee, whichever is longer, a fraction of at least six months being considered as
otherwise deducible therefrom.
one whole year.
It is plain then that when the employment contract was signed between Brent School
The employer, upon whom no such notice was served in case of termination of
and Alegre on July 18, 1971, it was perfectly legitimate for them to include in it a
employment without just cause, may hold the employee liable for damages.
stipulation fixing the duration thereof. Stipulations for a term were explicitly
The employee, upon whom no such notice was served in case of termination of recognized as valid by this Court, for instance, in Biboso v. Victorias Milling Co., Inc.,
employment without just cause, shall be entitled to compensation from the date of promulgated on March 31, 1977,13 and J. Walter Thompson Co. (Phil.) v. NLRC,
termination of his employment in an amount equivalent to his salaries or wages promulgated on December 29, 1983.14 The Thompson case involved an executive
corresponding to the required period of notice. who had been engaged for a fixed period of three (3) years. Biboso involved teachers
in a private school as regards whom, the following pronouncement was made:
There was, to repeat, clear albeit implied recognition of the licitness of term
employment. RA 1787 also enumerated what it considered to be just causes for What is decisive is that petitioners (teachers) were well aware all the time that their
terminating an employment without a definite period, either by the employer or by tenure was for a limited duration. Upon its termination, both parties to the
the employee without incurring any liability therefor. employment relationship were free to renew it or to let it lapse. (p. 254)
Under American law the principle is the same. Where a contract specifies the period necessary or desirable in the usual business or trade of the employerthe
of its duration, it terminates on the expiration of such period. A contract of conclusion does not necessarily follow that the employer and employee should be
employment for a definite period terminates by its own terms at the end of such forbidden to stipulate any period of time for the performance of those activities.
period. There is nothing essentially contradictory between a definite period of an
employment contract and the nature of the employees duties set down in that
The status of legitimacy continued to be enjoyed by fixed-period employment
contract as being usually necessary or desirable in the usual business or trade of the
contracts under the Labor Code (Presidential Decree No. 442), which went into effect
employer. The concept of the employees duties as being usually necessary or
on November 1, 1974. The Code contained explicit references to fixed period
desirable in the usual business or trade of the employer is not synonymous with or
employment, or employment with a fixed or definite period. Nevertheless,
identical to employment with a fixed term. Logically, the decisive determinant in term
obscuration of the principle of licitness of term employment began to take place at
employment should not be the activities that the employee is called upon to perform,
about this time.
but the day certain agreed upon by the parties for the commencement and
Article 320, entitled Probationary and fixed period employment, originally stated termination of their employment relationship, a day certain being understood to be
that the termination of employment of probationary employees and those that which must necessarily come, although it may not be known when.19 Seasonal
employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary employment, and employment for a particular project are merely instances of
of Labor may prescribe. The asserted objective was to prevent the circumvention of employment in which a period, where not expressly set down, is necessarily implied.
the right of the employee to be secured in their employment as provided x x x (in the
Of course, the term period has a definite and settled signification. It means, Length
Code).
of existence; duration. A point of time marking a termination as of a cause or an
Article 321 prescribed the just causes for which an employer could terminate an activity; an end, a limit, a bound; conclusion; termination. A series of years, months
employment without a definite period. And Article 319 undertook to define or days in which something is completed. A time of definite length. x x x the period
employment without a fixed period in the following manner: from one fixed date to another fixed date x x.20 It connotes a space of time which
has an influence on an obligation as a result of a juridical act, and either suspends its
An employment shall be deemed to be without a definite period for purposes of this demandableness or produces its extinguishment.21 It should be apparent that this
Chapter where the employee has been engaged to perform activities which are settled and familiar notion of a period, in the context of a contract of employment,
usually necessary or desirable in the usual business or trade of the employer, except takes no account at all of the nature of the duties of the employee; it has absolutely
where the employment has been fixed for a specific project or undertaking the no relevance to the character of his duties as being usually necessary or desirable to
completion or termination of which has been determined at the time of the the usual business of the employer, or not.
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. Subsequently, the foregoing articles regarding employment with a definite period
and regular employment were amended by Presidential Decree No. 850, effective
The question immediately provoked by a reading of Article 319 is whether or not a December 16, 1975.
voluntary agreement on a fixed term or period would be valid where the employee
has been engaged to perform activities which are usually necessary or desirable in Article 320, dealing with Probationary and fixed period employment, was altered by
the usual business or trade of the employer. The definition seems a non sequitur. eliminating the reference to persons employed with a fixed period, and was
From the premisethat the duties of an employee entail activities which are usually renumbered (becoming Article 271). The article22 now reads:
x x. Probationary employment.Probationary employment shall not exceed six employment for a definite period. Indeed, not only is the concept of regular
months from the date the employee started working, unless it is covered by an employment not essentially inconsistent with employment for a fixed term, as above
apprenticeship agreement stipulating a longer period. The services of an employee pointed out, Article 272 of the Labor Code, as amended by said PD 850, still impliedly
who has been engaged in a probationary basis may be terminated for a just cause or acknowledged the propriety of term employment: it listed the just causes for which
when he fails to qualify as a regular employee in accordance with reasonable an employer may terminate employment without a definite period, thus giving rise
standards made known by the employer to the employee at the time of his to the inference that if the employment be with a definite period, there need be no
engagement. An employee who is allowed to work after a probationary period shall just cause for termination thereof if the ground be precisely the expiration of the
be considered a regular employee. term agreed upon by the parties for the duration of such employment.

Also amended by PD 850 was Article 319 (entitled Employment with a fixed period, Still later, however, said Article 272 (formerly Article 321) was further amended by
supra) by (a) deleting mention of employment with a fixed or definite period, (b) Batas Pambansa Bilang 130, to eliminate altogether reference to employment
adding a general exclusion clause declaring irrelevant written or oral agreements to without a definite period. As lastly amended, the opening lines of the article
the contrary, and (c) making the provision treat exclusively of regular and casual (renumbered 283), now pertinently read: An employer may terminate an
employment. As revised, said article, renumbered 270,23 now reads: employment for any of the following just causes: x x. BP 130 thus completed the
elimination of every reference in the Labor Code, express or implied, to employment
x x Regular and Casual Employment.The provisions of written agreement to the
with a fixed or definite period or term.
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 It is in the light of the foregoing description of the development of the provisions of
perform activities which are usually necessary or desirable in the usual business or the Labor Code bearing on term or fixed-period employment that the question posed
trade of the employer except where the employment has been fixed for a specific in the opening paragraph of this opinion should now be addressed. Is it then the
project or undertaking the completion or termination of which has been determined legislative intention to outlaw stipulations in employment contracts laying down a
at the time of the engagement of the employee or where the work or service to be definite period therefor? Are such stipulations in essence contrary to public policy
employed is seasonal in nature and the employment is for the duration of the season. and should not on this account be accorded legitimacy?

An employment shall be deemed to be casual if it is not covered by the preceding On the one hand, there is the gradual and progressive elimination of references to
paragraph: provided, that, any employee who has rendered at least one year of term or fixed-period employment in the Labor Code, and the specific statement of
service, whether such service is continuous or broken, shall be considered a regular the rule25 that
employee with respect to the activity in which he is employed and his employment
x x Regular and Casual Employment.The provisions of written agreement to the
shall continue while such actually exists.
contrary notwithstanding and regardless of the oral agreement of the parties, an
The first paragraph is identical to Article 319 except that, as just mentioned, a clause employment shall be deemed to be regular where the employee has been engaged to
has been added, to wit: The provisions of written agreement to the contrary perform activities which are usually necessary or desirable in the usual business or
notwithstanding and regardless of the oral agreements of the parties . . . The clause trade of the employer except where the employment has been fixed for a specific
would appear to be addressed inter alia to agreements fixing a definite period for project or undertaking the completion or termination of which has been determined
employment. There is withal no clear indication of the intent to deny validity to
at the time of the engagement of the employee or where the work or service to be There can of course be no quarrel with the proposition that where from the
employed is seasonal in nature and the employment is for the duration of the season. circumstances it is apparent that periods have been imposed to preclude acquisition
of tenurial security by the employee, they should be struck down or disregarded as
An employment shall be deemed to be casual if it is not covered by the preceding
contrary to public policy, morals, etc. But where no such intent to circumvent the law
paragraph: provided, that, any employee who has rendered at least one year of
is shown, or stated otherwise, where the reason for the law does not exist, e.g.,
service, whether such service is continuous or broken, shall be considered a regular
where it is indeed the employee himself who insists upon a period or where the
employee with respect to the activity in which he is employed and his employment
nature of the engagement is such that, without being seasonal or for a specific
shall continue while such actually exists.
project, a definite date of termination is a sine qua non, would an agreement fixing a
There is, on the other hand, the Civil Code, which has always recognized, and period be essentially evil or illicit, therefore anathema? Would such an agreement
continues to recognize, the validity and propriety of contracts and obligations with a come within the scope of Article 280 which admittedly was enacted to prevent the
fixed or definite period, and imposes no restraints on the freedom of the parties to fix circumvention of the right of the employee to be secured in x x (his) employment?
the duration of a contract, whatever its object, be it specie, goods or services, except
As it is evident from even only the three examples already given that Article 280 of
the general admonition against stipulations contrary to law, morals, good customs,
the Labor Code, under a narrow and literal interpretation, not only fails to exhaust
public order or public policy.26 Under the Civil Code, therefore, and as a general
the gamut of employment contracts to which the lack of a fixed period would be an
proposition, fixed-term employment contracts are not limited, as they are under the
anomaly, but would also appear to restrict, without reasonable distinctions, the right
present Labor Code, to those by nature seasonal or for specific projects with pre-
of an employee to freely stipulate with his employer the duration of his engagement,
determined dates of completion; they also include those to which the parties by free
it logically follows that such a literal interpretation should be eschewed or avoided.
choice have assigned a specific date of termination.
The law must be given a reasonable interpretation, to preclude absurdity in its
Some familiar examples may be cited of employment contracts which may be neither application. Outlawing the whole concept of term employment and subverting to
for seasonal work nor for specific projects, but to which a fixed term is an essential boot the principle of freedom of contract to remedy the evil of employers using it as
and natural appurtenance: overseas employment contracts, for one, to which, a means to prevent their employees from obtaining security of tenure is like cutting
whatever the nature of the engagement, the concept of regular employment with all off the nose to spite the face or, more relevantly, curing a headache by lopping off
that it implies does not appear ever to have been applied, Article 280 of the Labor the head.
Code notwithstanding; also appointments to the positions of dean, assistant dean,
It is a salutary principle in statutory construction that there exists a valid
college secretary, principal, and other administrative offices in educational
presumption that undesirable consequences were never intended by a legislative
institutions, which are by practice or tradition rotated among the faculty members,
measure, and that a construction of which the statute is fairly susceptible is favored,
and where fixed terms are a necessity without which no reasonable rotation would
which will avoid all objectionable, mischievous, undefensible, wrongful, evil, and
be possible. Similarly, despite the provisions of Article 280, Policy Instructions No. 8
injurious consequences.28
of the Minister of Labor27 implicitly recognize that certain company officials may be
elected for what would amount to fixed periods, at the expiration of which they Nothing is better settled than that courts are not to give words a meaning which
would have to stand down, in providing that these officials, x x may lose their jobs as would lead to absurd or unreasonable consequences. That is a principle that goes
president, executive vice-president or vice-president, etc. because the stockholders back to In re Allen decided on October 27, 1903, where it was held that a literal
or the board of directors for one reason or another did not reelect them. interpretation is to be rejected if it would be unjust or lead to absurd results. That is a
strong argument against its adoption. The words of Justice Laurel are particularly apt. Reyes (the teachers) argument is not persuasive. It loses sight of the fact that her
Thus: The fact that the construction placed upon the statute by the appellants would employment was probationary, contractual in nature, and one with a definitive
lead to an absurdity is another argument for rejecting it. x x 29 period. At the expiration of the period stipulated in the contract, her appointment
was deemed terminated and the letter informing her of the non-renewal of her
x x We have, here, then a case where the true intent of the law is clear that calls for
contract is not a condition sine qua non before Reyes may be deemed to have ceased
the application of the cardinal rule of statutory construction that such intent of spirit
in the employ of petitioner UST. The notice is a mere reminder that Reyes contract of
must prevail over the letter thereof, for whatever is within the spirit of a statute is
employment was due to expire and that the contract would no longer be renewed. It
within the statute, since adherence to the letter would result in absurdity, injustice
is not a letter of termination. The interpretation that the notice is only a reminder is
and contradictions and would defeat the plain and vital purpose of the statute.30
consistent with the courts finding in Labajo, supra. x x x32
Accordingly, and since the entire purpose behind the development of legislation
Paraphrasing Escudero, respondent Alegres employment was terminated upon the
culminating in the present Article 280 of the Labor Code clearly appears to have
expiration of his last contract with Brent School on July 16, 1976 without the
been, as already observed, to prevent circumvention of the employees right to be
necessity of any notice. The advance written advice given the Department of Labor
secure in his tenure, the clause in said article indiscriminately and completely ruling
with copy to said petitioner was a mere reminder of the impending expiration of his
out all written or oral agreements conflicting with the concept of regular employment
contract, not a letter of termination, nor an application for clearance to terminate
as defined therein should be construed to refer to the substantive evil that the Code
which needed the approval of the Department of Labor to make the termination of
itself has singled out: agreements entered into precisely to circumvent security of
his services effective. In any case, such clearance should properly have been given,
tenure. It should have no application to instances where a fixed period of
not denied.
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 WHEREFORE, the public respondents Decision complained of is REVERSED and SET
absent any other circumstances vitiating his consent, or where it satisfactorily ASIDE. Respondent Alegres contract of employment with Brent School having
appears that the employer and employee dealt with each other on more or less equal lawfully terminated with and by reason of the expiration of the agreed term of period
terms with no moral dominance whatever being exercised by the former over the thereof, he is declared not entitled to reinstatement and the other relief awarded
latter. Unless thus limited in its purview, the law would be made to apply to purposes and confirmed on appeal in the proceedings below. No pronouncement as to costs.
other than those explicitly stated by its framers; it thus becomes pointless and
SO ORDERED.
arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences. Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Corts, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed
period of employment as still good rulea rule reaffirmed in the recent case of Fernan, (C.J.), No part, related to counsel for petitioners.
Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the
fairly analogous case of a teacher being served by her school a notice of termination Sarmiento, J., Please see separate opinion, concurring in part and dissenting in
following the expiration of the last of three successive fixed-term employment part.
contracts, the Court held:
G.R. Nos. 114858-59. September 7, 2001.* adjudged that private respondents Roman and Zenaida Domasig were illegally
dismissed by petitioner Columbus Philippines Bus Corporation from their positions as
COLUMBUS PHILIPPINES BUS CORPORATION, petitioner, vs. NATIONAL LABOR
driver and bus conductress, respectively.
RELATIONS COMMISSION, ZENAIDA DOMASIG and ROMAN DOMASIG,
respondents. Petitioner Columbus Philippines Bus Corporation is engaged in the business of
operating passenger buses. Since the start of its operations in 1990, it has maintained
Labor Law; Labor Code; Classification of Employment; Whether the employment is
a list of drivers and conductors who rendered service in its bus units allegedly on a
regular or casual has nothing to do with the manner of computing and paying the
first come first served basis and compensated purely on commission. The drivers
employees wages or compensation.To determine whether the employment of an
and conductors/conductress worked for about ten (10) to fifteen (15) days a month
employee is regular or casual, Article 280 of the Labor Code is definitive; and whether
and were allegedly not required to work everyday.
such employment is regular or casual has nothing to do with the manner of
computing and paying the employees wages or compensation. Private respondent Roman Domasig started working as a driver with the petitioner on
August 30, 1990 with a daily income ranging from Three Hundred Fifty Pesos
Same; Same; Same; Standard test for determining a regular employment.The
(P350.00) to Six Hundred Fifty Pesos (P650.00), while his wife and co-respondent,
primary standard, x x x of determining a regular employment is the reasonable
Zenaida Domasig, was employed as a bus conductress on October 1, 1990 with a daily
connection between the particular activity performed by the employee in relation to
income of Two Hundred Fifty Pesos (P250.00) to Five Hundred Pesos (P500.00). The
the usual business or trade of the employer. The test is whether the former is usually
employment of private respondents Roman and Zenaida Domasig with the petitioner
necessary or desirable in the usual business or trade of the employer. The connection
was abruptly terminated on January 21 and 22, 1992, respectively, for their having
can be determined by considering the nature of the work performed and its relation
allegedly formed a labor union.
to the scheme of the particular business or trade in its entirety. Also, if the employee
has been performing the job for at least one year, even if the performance is not Thus, these two (2) related cases of unfair labor practice, illegal dismissal, illegal
continuous or merely intermittent, the law deems the repeated and continuing need deductions from salary, and non-payment of service incentive leave pay and 13th
for its performance as sufficient evidence of the necessity, if not indispensability of month pay were instituted by private respondents against petitioner Columbus
that activity to the business. Hence, the employment is also considered regular, but Philippines Bus Corporation and its officers, Atty. Ferdinand Catabian and Mrs. Amelia
only with respect to such activity and while such activity exists. de Dios, before the Department of Labor and Employment (DOLE), Arbitration Branch
in Manila, National Capital Region. The said related cases were assigned to Labor
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
Arbiter Ceferina J. Diosa.
The facts are stated in the opinion of the Court.
In his Sinumpaang Salaysay private respondent Roman Domasig alleged, among
Ernesto Arellano for private respondents. others, the following in his affidavitcomplaint, to wit:

DE LEON, JR., J.: x x x xxx xxx

This is a petition for certiorari which seeks to nullify the Resolution2 dated October 3. Sa tindi ng galit ng pangasiwaan at upang hindi mabuo ang itinatayo naming
29, 1993 of the National Labor Relations Commission (NLRC) affirming the Decision unyon, akoy basta na lamang pinababa mula sa aking regular na bus na may
dated September 8, 1992 of the Labor Arbiter Ceferina J. Diosana who found and numerong 109 nuong ika-21 ng Enero 1992, bandang alas 4:30 ng madaling araw
nang akoy papalabas na sa garahe at bumiyahe na sana. Simula na noon hindi na ako ebidensiya na kayoy nagtatayo ng unyon at ikaw ay kasama, titiyakin ko sa iyo na
pinalabas sa biyahe. Ibinigay na sa iba ang aking regular na bus. tanggal ka agad.

4. Kamiy napilitang magtayo ng unyon dahil sa mahirap na kalagayan namin sa 7. Dumating ang araw namin noong ika-21 ng Enero. Noong araw na iyon, humigit
trabaho. Hinaharap namin ang sumusunod: kumulang alas 4:30 ng madaling araw, akoy papalabas ng garahe. Dala-dala ko ang
aking regular bus No. 109. Pinahinto ako ni Legorio Vellesar, dating dispatcher at
(a) Mahabang oras sa trabaho. Umaabot sa higit kumulang 19 hanggang 20 oras ang
ngayon ay traffic Supervisor at sinabihan na itabi ko ang bus dahil kakausapin daw
ginugugol namin sa trabaho. Kailangang nasa garahe na kami at lumabas ng alas-4 ng
ako ni Atty. Catabian. Kinabahan na ako nang ibigay sa iba ang aking minamanehong
madaling araw at makaalis lamang pagkatapos makapag-engreso ng collection
bus.
bandang hatinggabi na.
8. Pagpasok ko sa opisina ni Atty. Catabian, sinabihan agad ako ni Atty. Catabian ng
(b) Illegal deductions. Tuwing may labas kami, sapilitang kinakaltasan ang aming
ganito: Domasig, Hindi ka na makakalusot pa. Tingnan mo ito. Mayroon siyang
sahod para daw sa pulis. Hindi na nga kami binibigyan ng mga benepisyong itinatakda
ipinakitang xerox copy ng aming pinapipirmahan Sama-Samang Pahayag. Sa xerox na
ng batas gaya ng 13th month pay at service incentive leave, kinakaltasan pa kami
ito nakita ko ang pirma ni Zenaida Domasig. Domasig, ito ang ebidensiya na ikaw ay
para daw sa pulis.
kasama sa unyon. Alam mo Domasig, akoy, mabuting kaibigan ngunit masamang
(k) Wala kaming kaseguruhan sa trabaho. Kapag kamiy nagreklamo, kami agad nilang kaaway. Sinabi ko sa iyo noon na kapag may mahawakan akong ebidensiya na
tatanggalin. Napakadali nilang gawin. Hindi ka lang bibigyan ng bus assignment, wala nagtatayo kayo ng unyon maghihiwalay tayo. Ayaw na ayaw ko ng unyon. Pagkasabi
ka ng magagawa. nito ni Atty. Catabian, akoy kanyang pinalabas na dahil marami pang driver at
konductor na nakapila sa labas.
5. Tulad ng ganitong kalagayan namin sa trabaho, inumpisahan naming
mangumbinsi sa kapwa naming empleyado noong Disyembre pa ng nakaraang taon. 9. Katunayan, bago kinausap ni Atty. Catabian, marami na sa mga kapwa ko
Ang ilan sa mga kasama ko ay sina Leon Agarao, Santiago Tagum, Alejandro Bayroon empleyado ang kinausap ni Atty. Catabian. Pinapipirma sila sa isang kasulatan na
at Zenaida Domasig. Silay tinanggal din sa trabaho. Kumuha kami ng Sama-Samang kung saan binabawi nila ang kanilang pirma sa Sama-Samang Pahayag. Ang hindi
Pahayag mula sa National Federation of Labor para papirmahan sa mga nais sumapi pumirma ay Hindi na pinalabas sa biyahe.
sa Unyon. Columbus Workers Union ang aming lokal at itoy isinapi namin sa National
10. Ganon man ang nangyari, pinagpasiyahan pa rin ng mga kasama kong
Federation of Labor (NFL).
namumuno, kasama ako, na ipagpatuloy pa rin ang pagtatayo ng unyon. Dahil dito,
6. Pagpasok ng bagong taon, 1992, mayroon na kaming napapirma na higit sa ipinasiya ng mga namumuno, kasama ako at si Zenaida Domasig, na huwag pumirma
limampu (50). Mahigit tatlong daan kami, drayber at konduktor. Sa unang linggo pa sa kasulatan at ihain na ang petition for certification election.
lamang ng Enero 1992. Natutunan ng kompanya ang kilos namin. Tinawag na ako ni
11. Nagdulot na matinding pagkabalisa at takot sa amin ni Zenaida Domasig ang
Atty. Ferdinand Catabian, General Manager ng CPBC bago akoy tuluyan niyang
biglang pagtanggal nila sa amin. Wala na kaming aasahan para sa araw-araw na
tinanggal noong ika-21 ng Enero 1992 at tinanong kung totoo na mayroon kaming
pangangailangan ng aming pamilya. Nabaon kami sa utang at malaking kahihiyan sa
itinatatag na unyon. Tinanggihan ko noon at akoy kanyang binigyan ng babala ng
mga kapit-bahay at kaibigan namin. Tuloy hating-gabi na kung minsan, pinag-iisipan
ganito: Domasig, ayaw ko ng unyon. Kapag mayroon akong mapapanghawakang
pa rin namin ang kinabukasan ng mga bata: ano kaya ang kanilang kinabukasan. Kung
kami o isa sa amin ay tatalikod sa aming pinirmahan, mapapahamak din ang kapwa 5. Ang hindi nila pagfile agad ng aking sick leave ay ginawa ng kompanya upang
naming empleyado at tuluyang mawasak ang unyon. magipit kaming mga nangungunang kasapi ng unyon.

12. Sadyang napakalupit at hindi makatao ang ginawa ng kompanya sa aming mag- 6. Sa layuning mapabuti ang aming kalagayan, inumpisahan naming buuin ang unyon
asawa at sa kapwa namin empleyado. Wala man lamang notice sa amin. Hindi man noong mga huling buwan ng 1991. Kumuha kami ng application for membership sa
lang kami pinagpaliwanag. Wala naman anumang violations na nagawa namin kundi National Federation of Labor (NFL). Itoy ang Sama-samang Pahayag. Bago matapos
ang pagtatayo ng unyon. ang taong 1991, kamiy nakapagpapirma ng hindi kukulangin sa tatlumpu. Sa una o
pangalawang linggong Enero 1992, umabot na malamang sa 70 ang nakapirma.
13. Dahil dito, hinihingi ko sa Tanggapan ito na ibalik sa akin, para sa pamilya, ang
Ngunit sa unang linggo pa lamang ng Enero 1992, mukhang natutunogan ng
nawalang sahod ko sa panahon na akoy tanggal sa trabaho. Tuwing labas kumikita
pangasiwaan na mayroong nagtatayo ng unyon. Inumpisahan na ni Atty. Ferdinand
ako mula P350 hanggang P650.00 sa loob ng 20 oras humigit kumulang. Hinihingi ko
Catabian na isa-isang pagtatanungin ang kanilang pinaghihinalaang lider ng unyon.
rin na ibalik ako sa trabaho at pagbayarin ang kompanya ng damages bunga ng
pinsalang tinamasa namin. Isa sa aking asawa sa mga tinatawag at pinagtatanong ni Atty. Catabian. Silay
binigyan ng mahigpit na babala. Tinawag uli si Ginoong Domasig noong ika-21 ng
Private respondent Zenaida Domasig also made the following allegations in her
Enero 1992. Bago siya tinawag marami ng drayber at konduktor/konduktora na
affidavit-complaint, to wit:
pinatawag ni Atty. Catabian at silay naghihintay na kausapin ni Atty. Catabian. Ang
3. Kamiy nagtayo ng unyon dahil sa api naming kalagayan sa trabaho. Napakahaba mga kinausap ay hindi pinalalabas hanggang hindi sila pumirma sa kasulatan na
ang oras ng trabaho namin. Kailangan pumasok kami ng alas-4 ng madaling araw at kanilang binabawi ang kanilang pagsapi sa unyon, ang Columbus Workers Union.
makakuwi kami ng alas-12 ng hatinggabi. Salitan ng trabaho at pahinga ang aming Hindi na pinalabas si Ginoong Domasig mula ng araw na iyon dahil hindi siya pumirma
pagtatarabaho: dalawang (2) araw na labas at dalawang (2) araw na pahinga. sa kasulatan.
Maraming sapilitang kaltas mula sa sahod namin. Tuwing labas namin kinakaltasan
7. Kinabukasan, ika-22 ng Enero 1992, akoy hindi na rin binigyan ng bus assignment.
kami ng halagang P18.50 ngunit hindi maliwanag kung para saan ito. Mayroon P300
Wala namang ibinibintang na violation laban sa akin. Gaya ng nasabi ko na, wala
namang resibong ibinibigay. Kapag magreklamo kami, hindi naman kami
namang memorandum na ibinigay sa akin. Basta na lamang hindi ako binibigyan ng
pasasampahin sa bus.
bus assignment mula noon magpahanggang ngayon. Ang tanging dahilan ng
4. Ang benepisyong itinatakda ng batas ay hindi pa ibinibigay. Akoy nagkasakit mula pagtanggal nila sa akin ay ang aking pagsapi sa unyon. Akoy isa sa mga naunang
ika-15 ng Nobyembre 1991 hanggang ika-14 ng Disyembre 1991. Gumawa ako ng sick pumirma sa Sama-Samang Pahayag ng pagsapi sa unyon na kinuha namin mula sa
leave applications: isa para sa SSS at isa para sa Employees Compensation National Federation.
Commission. Si Ginoong Roman Domasig ang nagpapirma ng aking applications sa
8. Agad agad na pinag-usapan ng liderato ng unyon ang panggigipit ng isinagawa ng
kompanya. Ngunit, hindi nila ibinalik kay Ginoong Domasig and aking applications.
pangasiwaan. Nagpasiya ang iba na para makalabas sila at may makain ang pamilya
Noong lamang ika-12 ng Enero 1992 nila ibinigay sa SSS ang aking sick leave
nila na pumirma sa kasulatan ng pagbawi ng pagiging kasapi nila ng CWU. Silay
application. Hindi nila ibinigay sa ECC ang isang application ko at ibinalik na lang basta
pinalabas. Si Felipe Madrid, isa sa lider namin, ay inilipat pa nga sa Air Conditioned
sa akin.
bus pagkatapos niyang pumirma sa kasulatan. Ang dati niyang bus ay No. 109. Hindi
ito Air Con. Ngayon, ang kanyang minamaneho ay Bus No. 17 isang Air Con Bus. Ang motion for reconsideration. The petitioner now challenges the correctness of the
mga hindi pumirma ay hindi na pinalabas. NLRCs decision via the instant petition.

9. Ganon paman, pinagpasiyahan na ituloy namin ang pagtatayo ng unyon. Kayat The petitioner Columbus Philippines Bus Corporation alleges that the private
naghain na kami ng isang petition for certification election sa Department of Labor respondents like its other drivers and conductors are not regular employees, that the
and Employment. services of private respondents were rendered on a first come first served basis and
compensated purely on commission basis; that they worked for only about ten (10)
10. Ang ginawang pagtanggal sa aming mag-asawa ay nagdulot ng malaking pinsala
to fifteen (15) days a month, and only when they felt like doing so.
sa aming pamilya. Nabalisa kaming mag-asawa dahil wala na kaming maasahang
trabaho. Napilitan kami umutang na sa mga kaibigan at kapit-bahay. Dahil hindi kami To determine whether the employment of an employee is regular or casual, Article
makapagbayad sa takdang araw, malaking kahihiyan ang inaabot namin. 2805 of the Labor Code is definitive; and whether such employment is regular or
Naguguluhan din ang pagiisip namin lalung-lalo na kapag gutom ang mga anak namin casual has nothing to do with the manner of computing and paying the employees
at wala man lang kaming pambili ng panawid-gutom. Hindi naman namin maaaring wages or compensation. Rather the said provision of the Labor Code provides that:
talikuran ang unyon. Kami ang nauna sa pagpapirma sa unyon.
The primary standard, x x x of determining a regular employment is the reasonable
In support of their respective allegations, private respondents submitted connection between the particular activity performed by the employee in relation to
documentary evidence such as the Petition for Certification Election, Sama-samang the usual business or trade of the employer. The test is whether the former is usually
Pahayag ng Pagsapi, Payroll Slips and Parking Fee Slip Receipt. necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation
On the other hand, the petitioner failed to attend the scheduled hearings of the said
to the scheme of the particular business or trade in its entirety. Also, if the employee
cases on the alleged ground that it was not notified. It was only after an adverse
has been performing the job for at least one year, even if the performance is not
judgment of the Labor Arbiter that petitioner finally filed its position papers.
continuous or merely intermittent, the law deems the repeated and continuing need
In her Decision dated September 8, 1992, the Labor Arbiter found for the for its performance as sufficient evidence of the necessity if not indispensability of
complainants, herein private respondents, and ordered the petitioner to reinstate that activity to the business. Hence, the employment is also considered regular, but
private respondents Roman and Zenaida Domasig to their former positions as driver only with respect to such activity and while such activity exists.6
and bus conductress, respectively, without loss of seniority, rights and with backpay
Considering the above-quoted standard for determining a regular employment, it
accruing from January 21, 1992 and January 22, 1992 up to their actual
appears that the employment of private respondents is regular. They perform work
reinstatement. However, private respondents other money claims were dismissed
necessary and desirable in the business of the petitioner. Without the services of the
for lack of merit.
bus drivers and conductors, like the private respondents, the petitioner could not
Aggrieved by the adverse judgment of the Labor Arbiter, petitioner appealed to have operated and managed its business of providing transportation services to the
public respondent National Labor Relations Commission (NLRC) where it was assigned public. However, not all employees paid on commission basis can legally be
to the First Division. On October 29, 1993, the NLRC affirmed in toto the Labor considered as regular employees. In the case of Singer Sewing Machine Company v.
Arbiters decision, and in its Order4 dated January 7, 1994 denied the petitioners Drilon, it was held that while certain individuals were hired to work as collectors or
collecting agents of the company, nevertheless, per a certain written agreement
they were considered as independent contractors and not employees of the Sections 4 and 5 of the Revised Rules of Procedure of the NLRC, provides the rule for
company. the service of summons and notices in NLRC cases, to wit:

As its principal contention, petitioner ascribes grave abuse of discretion on the part of Sec 4. Service of notices and resolutions.a) Notices or summons and copies of
public respondent NLRC in affirming the decision of the Labor Arbiter for being orders, resolutions or decisions shall be served personally by the bailiff or the duly
violative of due process and in not ordering the latter to conduct a formal hearing of authorized public officer or by registered mail on the parties to the case within five
the case. (5) days from receipt thereof by the serving officer; Provided, that where a party is
represented by counsel or authorized representative, service shall be made on the
Petitioner argues that it did not receive any notice for the hearing scheduled on April
latter.
14, 1992. It stressed that the registered mail supposedly containing the notice for the
aforesaid hearing was returned unclaimed and that no registry notice from the post xxx xxx xxx
office was ever delivered to it so that it could claim the same. Petitioner likewise
Sec. 5. Proof and completeness of service.The return is prima facie proof of the
contends that public respondent NLRC disregarded the pronouncement of this Court
facts indicated therein. Service by registered mail is complete upon receipt by the
in the case of Johnson & Johnson (Phils.), Inc. v. Court of Appeals,8 where we held
addressee or his agent.9
that:
Considering the above-quoted provisions of the Revised Rules of Procedure of the
The general rule is that service by registered mail is complete upon actual receipt
NLRC, service by registered mail is complete after five (5) days from the date of first
thereof by the addressee. The exception is where the addressee does not claim his
notice of the postmaster in the event that the addressee fails to claim his registered
mail within 5 days from the date of the first notice of the postmaster, in which case
mail from the post office. In the instant cases, petitioner merely stressed that the
the service takes effect upon the expiration of such period.
registered mail containing the notice for the aforesaid scheduled hearing was
Inasmuch as the exception refers to only constructive and not actual service, such returned unclaimed and that it did not allegedly receive any registry notice from
exception must be applied only upon conclusive proof that a first notice was duly the post office. However, it is a fundamental rule that unless the contrary is proven,
sent by the postmaster to the addressee. The presumption that official duty has been official duty is presumed to have been performed regularly and judicial proceedings
regularly performed is not applicable where there is evidence to the contrary, as in regularly conducted. This presumption of the regularity of the quasi-judicial
the case at bar. proceedings before DOLE includes the presumption of regularity of service of
summons and other notices. It was therefore incumbent upon herein petitioner to
A certification from the postmaster would be the best evidence to prove that the
rebut that legal presumption with competent and proper evidence, for the return of
notice has been validly sent. The mailman may also testify that the notice was
the registered mail as unclaimed is prima facie proof of the facts indicated
actually delivered, as we held in Aldecoa vs. Hon. Arellano and Siquenza. The
therein.10 But petitioner failed to do so.
postmaster should certify not only that the notice was issued or sent but also as to
how, when and to whom the delivery thereof was made. A thorough review of the record of this case discloses the following facts and
circumstances, to wit:
In the light of the record and the evidence adduced in these two (2) related cases,
petitioners argument appears to be without basis. Hence, the petition must be 1. Petitioner was notified of the hearing on March 12, 1992, at 10:30 oclock in the
dismissed. morning, with the following warning:
Failure to appear and submit position paper with affidavit of witness or witnesses and Likewise, notwithstanding petitioners allegation that it has not received the notices
other documentary evidence, if any, will be construed as a waiver of the opportunity of the Labor Arbiter, it, however, admittedly received a copy of the decision of the
to be heard and case will be heard ex-parte. Labor Arbiter, and then seasonably pleaded its case by way of appeal before the
NLRC In the interest of justice, the NLRC considered petitioners position paper, even
2. Since there was no proof of service to petitioner of this scheduled hearing, another
if it was filed late.
hearing was set on March 26, 1992 at 1:30 oclock in the afternoon.
As to the question whether the Labor Arbiter should have conducted a formal
3. However, on March 16, 1992, petitioner through its liason officer, Mr. Napoleon
hearing, Section 4 of Rule V of the New Rules of Procedure of the NLRC, clearly
Pandes, filed a Manifestation and Motion to Reset Schedule Hearing, stating, among
provides that:
other things, that the hearing be reset to April 9, 1992 at 9:30 oclock in the morning
or at a later date and time convenient to this Honorable Commission. Determination of Necessity of Hearing.Immediately after the submission by the
parties of their position papers/memorandum, the Labor Arbiter shall motu proprio
4. Thus another hearing was set on April 14, 1992 at 10:00 oclock in the morning
determine whether there is need for a formal trial or hearing. At this stage, he may,
again with the same warning as above quoted. 5. In the April 14, 1992 hearing,
at his discretion and for the purpose of making such determination, ask clarificatory
private respondents appeared as scheduled and waited up to 11:05 a.m., but
questions to further elicit facts or information, including but not limited to the
petitioner failed to appear and submit the required position paper, hence, upon
subpoena of relevant documentary evidence, if any from any party or witness.
motion of private respondents the case was submitted for decision.
It is clear from the above-quoted procedural rule that the Labor Arbiter has the
As clearly gleaned from the foregoing facts, petitioner was afforded more than an
authority to determine whether or not there is a necessity for conducting formal
adequate opportunity to present its evidence. In fact, on March 16, 1992, petitioner
hearings in cases brought before him for adjudication. In other words, the holding of
through its Liason Officer, Mr. Napoleon Pandes, even filed a Manifestation and
a formal hearing or trial is discretionary with the Labor Arbiter and is something that
Motion, praying that the hearing set on March 26, 1992 be reset to April 9, 1992 or at
the parties cannot demand as a matter of right. It is entirely within the authority of
a later date and time convenient to the Commission. But on the re-scheduled hearing
the Labor Arbiter to decide a labor case before him, based on the position papers and
on April 14, 1992, petitioner again failed to appear nor did it file its position paper. If
supporting documents of the parties, without a trial or formal hearing. The
petitioner were really concerned with the outcome of the instant cases, petitioner
requirement of due process in labor cases before a Labor Arbiter is satisfied when the
should have verified, at the very least whether its Manifestation and Motion was
parties are given the opportunity to submit their position papers to which they are
acted upon. As correctly stated by the NLRC in its Resolution:
supposed to attach all the supporting documents or documentary evidence that
Obviously, respondents were not so inclined as they must have found the same as an would prove their respective claims, in the event the Labor Arbiter determines that
excuse to delay the proceedings in the instant cases. For how else can one explain no formal hearing would be conducted or that such hearing was not necessary.
respondents failure to show up or follow up on their motions requesting for
Equally without merit is petitioners contention that public respondent NLRC
resetting, and their filing of a position paper five (5) long months after filing their
committed grave abuse of discretion amounting to lack of jurisdiction in holding that
motions and only after a Decision not to their liking was rendered by the Labor
private respondents were illegally dismissed. Petitioners contention that the Labor
Arbiter.
Arbiter ruled in favor of private respondents not because of the evidence submitted
by the private respondents but because of petitioners failure to appear in the In termination cases, like the ones before us, the burden of proving that the dismissal
scheduled hearing on April 14, 1992 is without factual basis as shown by the record. of the employees was for a valid and authorized cause rests on the employer. It was
incumbent upon petitioner Columbus Philippines Bus Corporation to show by
The NLRC, in arriving at its decision regarding the illegal dismissal of private
substantial evidence that the termination of the employment of private respondents
respondents, considered the position papers of the parties and the evidence on
was validly made and failure to discharge that duty would mean that the dismissal is
record. The NLRC in its decision agreed with the Labor Arbiters findings and
not justified and therefore illegal.14 On the other hand, abandonment as a just and
conclusions and found nothing substantial in petitioners position paper to warrant a
valid ground for dismissal requires the deliberate, unjustified refusal of the employee
reversal thereof, thus:
to resume his employment. Mere absence or failure to report for work, after notice
At any rate, and in the interest of justice, We have considered respondents Position to return, is not enough to amount to such abandonment.
Paper, although filed belatedly, and We find that the allegations therein and the
For a valid finding of abandonment, two (2) factors must be present, viz.: (a) the
evidence introduced in support thereof (See annexes A to D-12 of respondents
failure to report for work or absence without valid or justifiable reason; and (b) a
Position Paper; pp. 62-73 of the Records) do not suffice to support respondents
clear intention to sever employer-employee relationship, with the second element as
claim that complainants were not dismissed from their employment.
the more determinative factor being manifested by some overt acts.15 The herein
We, therefore, find that the Labor Arbiter did not commit any error in holding that: petitioner failed to present evidence to justify the dismissal of the private
respondents. The position paper of petitioner merely contains bare allegations that
Complainants claim that due to their union activities, as they were the ones the hiring of private respondents was purely on commission basis; that they have no
instrumental in the formation of the union in the respondents premises, enlisted working hours; that they are not required to work everyday and that they work only
employees to be members of the local union, coupled with the fact that a petition for when they wish to earn. It also alleged that private respondents were not dismissed
certification of an election was filed before the Department of Labor and nor suspended, but that they allegedly abandoned their jobs by simply failing to
Employment, in view of which they were not given any bus assignments, which is work.
tantamount to their dismissal from the service, appears to be credible and with basis.
As above stated, respondents miserably failed to controvert this fact, thus, From the factual findings of the Labor Arbiter, the absence of private respondents
complainants should be reinstated to their former positions, Roman Domasig as from work was not without valid or justifiable reason. First, on January 21 and 22,
driver, and Zenaida Domasig as conductress, with full backwages and other benefits 1992, private respondents were asked to relinquish their assigned buses and from
and without loss of seniority rights. that date forward, they were not given bus assignments. Thus, under the
circumstances, we find private respondents absences supported with valid reason.
Well-settled is the jurisprudential rule that factual findings of quasi-judicial agencies, Second, it appeared that private respondents never intended to sever their working
such as the NLRC, which have acquired expertise because their jurisdiction is confined relationship with petitioner. Two weeks after private respondents were not given bus
to specific matters, are generally accorded not only respect but even finality. They are assignments, they filed their subject complaint for illegal dismissal with the DOLE. An
binding upon this Court which is not a trier of facts. Only upon clear showing of grave employee who forthwith takes steps to protest his layoff cannot be said to have
abuse of discretion, or that such factual findings were arrived at arbitrarily or in abandoned his work.
disregard of the evidence on record will this Court step in and proceed to make its
own independent evaluation of the facts.13 No cogent reason exists in the instant
cases to deviate from this settled rule.
It is our view and we hold that the finding and conclusion of the Labor Arbiter and the Labor Law; Employer-Employee Relationship; The following elements are generally
respondent NLRC that private respondents were illegally dismissed are correct and considered in the determination of employer-employee relationship: (1) selection and
not arbitrary. We find no cogent reason to reverse the same. engagement of the employee; (2) payment of wages; (3) the power of dismissal; and
(4) the power to control the employees conduct.The present case mainly calls for
However, the amount of backwages must be properly computed inasmuch as in their
the application of the control test, which if not satisfied, would lead us to conclude
respective complaints, private respondents Roman and Zenaida Domasig alleged that
that no employer-employee relationship exists. Hence, if the union members are not
they received a daily income ranging from Three Hundred Fifty Pesos (P350.00) to Six
employees, no right to organize for purposes of bargaining, nor to be certified as such
Hundred Fifty Pesos (P650.00), and Two Hundred Fifty Pesos (P250.00) to Five
bargaining agent can ever be recognized.
Hundred Pesos (P500.00) respectively. The pronouncement of this Court in the case
of Icawat v. NLRC,16 is relevant and instructive, to wit: Same; Same; Same; Control-test; Independent Contractors; Employer-employee
relationship does not exist between petitioner-company and its collecting agents
x x x, the dismissal of private respondent being illegal, he is entitled to the payment
considering that petitioner-company exercises control only with respect to the result
of backwages. We do not, however, agree with the amount awarded to herein
or amount of collection and not with respect to the means and method of
private respondent in the absence of any factual basis thereof. Private respondent
collection.The Agreement confirms the status of the collecting agent in this case as
has not presented any evidence to warrant such award. The statement in his
an independent contractor not only because he is explicitly described as such but also
complaint that he is earning P800.00 to P1,000.00 when he is driving petitioners
because the provisions permit him to perform collection services for the company
jeepney on a straight basis, or P500.00 when driving on half shift basis, is purely
without being subject to the control of the latter except only as to the result of his
self-serving and speculative.
work. After a careful analysis of the contents of the agreement, we rule in favor of
WHEREFORE, the petition is hereby DISMISSED, and the challenged Resolution of the petitioner. The requirement that collection agents utilize only receipt forms and
public respondent NLRC is AFFIRMED. The computation of the amount of backwages report forms issued by the Company and that reports shall be submitted at least once
to which private respondents Roman Domasig and Zenaida Domasig are entitled is a week is not necessarily an indication of control over the means by which the job of
hereby REMANDED to the Labor Arbiter for appropriate action. collection is to be performed. The agreement itself specifically explains that receipt
forms shall be used for the purpose of avoiding a co-mingling of personal funds of the
SO ORDERED. agent with the money collected on behalf of the Company. Likewise, the use of
standard report forms as well as the regular time within which to submit a report of
Bellosillo (Chairman), Mendoza, Quisumbing and Buena, JJ., concur.
collection are intended to facilitate order in office procedures. Even if the report
Petition dismissed, resolution affirmed. requirements are to be called control measures, any control is only with respect to
the end result of the collection since the requirements regulate the things to be done
after the performance of the collection job or the rendition of the service.
G.R. No. 91307. January 24, 1991.* Same; Same; Same; Same; Same; The language of the agreement reveals that the
SINGER SEWING MACHINE COMPANY, petitioner, vs. HON. FRANKLIN M. DRILON, designation as collection agent does not create an employment relationship and that
MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNION- the applicant is to be considered at all times as an independent contractor.A
BAGUIO (SIMACUB), respondents. thorough examination of the facts of the case leads us to the conclusion that the
existence of an employer-employee relationship between the Company and the
collection agents cannot be sustained. The plain language of the agreement reveals employees, for purposes of determining the right of an employee to certain benefits,
that the designation as collection agent does not create an employment relationship to join or form a union, or to security of tenure. Article 280 does not apply where the
and that the applicant is to be considered at all times as an independent contractor. existence of an employment relationship is in dispute.
This is consistent with the first rule of interpretation that the literal meaning of the
Same; Same; Unions; Since private respondents are not employees of the company,
stipulations in the contract controls (Article 1370, Civil Code; La Suerte Cigar and
they are not entitled to the constitutional right to join or form a labor organization for
Cigarette Factory v. Director of Bureau of Labor Relations, 123 SCRA 679 [1983]). No
purposes of collective bargaining.The Court finds that since private respondents are
such words as to hire and employ are present.
not employees of the Company, they are not entitled to the constitutional right to
Moreover, the agreement did not fix an amount for wages nor the required working join or form a labor organization for purposes of collective bargaining. Accordingly,
hours. Compensation is earned only on the basis of the tangible results produced, i.e., there is no constitutional and legal basis for their union to be granted their petition
total collections made (Sarra v. Agarrado, 166 SCRA 625 [1988]). In Investment for direct certification. This Court made this pronouncement in La Suerte Cigar and
Planning Corp. of the Philippines v. Social Security System, 21 SCRA 924 [1967] which Cigarette Factory v. Director of Bureau of Labor Relations, supra: x x x The question
involved commission agents, this Court had the occasion to rule, thus: We are of whether employer-employee relationship exists is a primordial consideration
convinced from the facts that the work of petitioners agents or registered before extending labor benefits under the workmens compensation, social security,
representatives more nearly approximates that of an independent contractor than medicare, termination pay and labor relations law. It is important in the
that of an employee. The latter is paid for the labor he performs, that is, for the acts determination of who shall be included in a proposed bargaining unit because it is the
of which such labor consists; the former is paid for the result thereof x x x. xxx xxx xxx sine qua non, the fundamental and essential condition that a bargaining unit be
Even if an agent of petitioner should devote all of his time and effort trying to sell its composed of employees. Failure to establish this juridical relationship between the
investment plans he would not necessarily be entitled to compensation therefor. His union members and the employer affects the legality of the union itself. It means the
right to compensation depends upon and is measured by the tangible results he ineligibility of the union members to present a petition for certification election as
produces. well as to vote therein x x x. (At p. 689)

Same; Same; Same; Art. 280 of the Labor Code is not the yardstick for determining the PETITION for certiorari to review the order and resolution of the Department of Labor
existence of an employment relationship because it merely distinguishes between and Employment.
regular and casual employees.The Court finds the contention of the respondents
The facts are stated in the opinion of the Court.
that the union members are employees under Article 280 of the Labor Code to have
no basis. The definition that regular employees are those who perform activities Misa, Castro, Villanueva, Oposa, Narvasa & Pesigan for petitioner.
which are desirable and necessary for the business of the employer is not
determinative in this case. Any agreement may provide that one party shall render Domogan, Lockey, Orate & Dao-ayan Law Office for private respondent.
services for and in behalf of another for a consideration (no matter how necessary for
GUTIERREZ, JR., J.:
the latters business) even without being hired as an employee. This is precisely true
in the case of an independent contractorship as well as in an agency agreement. The This is a petition for certiorari assailing the order of MedArbiter Designate Felix B.
Court agrees with the petitioners argument that Article 280 is not the yardstick for Chaguile, Jr., the resolution of then Labor Secretary Franklin M. Drilon affirming said
determining the existence of an employment relationship because it merely order on appeal and the order denying the motion for reconsideration in the case
distinguishes between two kinds of employees, i.e., regular employees and casual entitled In Re: Petition for Direct Certification as the Sole and Exclusive Collective
Bargaining Agent of Collectors of Singer Sewing Machine Company-Singer Machine pending the resolution of the case before the DOLE only shows the weakness of
Collectors Union-Baguio (SIMACUB) docketed as OS-MA-A-7-119-89 (IRD Case No. petitioners stand and was for the purpose of frustrating the constitutionally
02-89 MED). mandated rights of the members of private respondent union to self-organization
and collective organization. They also contend that under Section 8, Rule 8, Book No.
On February 15, 1989, the respondent union filed a petition for direct certification as
III of the Omnibus Rules Implementing the Labor Code, which defines job-contracting,
the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine
they cannot legally qualify as independent contractors who must be free from control
Company, Baguio City branch (hereinafter referred to as the Company).
of the alleged employer, who carry independent businesses and who have substantial
The Company opposed the petition mainly on the ground that the union members capital or investment in the form of equipment, tools, and the like necessary in the
are actually not employees but are independent contractors as evidenced by the conduct of the business.
collection agency agreement which they signed.
The present case mainly calls for the application of the control test, which if not
The respondent Med-Arbiter, finding that there exists an employer-employee satisfied, would lead us to conclude that no employer-employee relationship exists.
relationship between the union members and the Company, granted the petition for Hence, if the union members are not employees, no right to organize for purposes of
certification election. On appeal, Secretary of Labor Franklin M. Drilon affirmed it. bargaining, nor to be certified as such bargaining agent can ever be recognized. The
The motion for reconsideration of the Secretarys resolution was denied. Hence, this following elements are generally considered in the determination of the employer-
petition in which the Company alleges that public respondents acted in excess of employee relationship; (1) the selection and engagement of the employee; (2) the
jurisdiction and/or committed grave abuse of discretion in that: payment of wages; (3) the power of dismissal; and (4) the power to control the
employees conductalthough the latter is the most important element (Mafinco
a) the Department of Labor and Employment (DOLE) has no jurisdiction over the case Trading Corporation v. Ople, 70 SCRA 139 [1976]; Development Bank of the
since the existence of employer-employee relationship is at issue; Philippines v. National Labor Relations Commission, 175 SCRA 537 [1989]; Rosario
Brothers, Inc. v. Ople, 131 SCRA 72 [1984]; Broadway Motors Inc. v. NLRC, 156 SCRA
b) the right of petitioner to due process was denied when the evidence of the union
522 [1987]; Brotherhood Labor Unity Movement in the Philippines v. Zamora, 147
members being commission agents was disregarded by the Labor Secretary;
SCRA 49 [1986]).
c) the public respondents patently erred in finding that there exists an employer-
The Collection Agency Agreement defines the relationship between the Company and
employee relationship;
each of the union members who signed a contract. The petitioner relies on the
d) the public respondents whimsically disregarded the well-settled rule that following stipulations in the agreements: (a) a collector is designated as a collecting
commission agents are not employees but are independent contractors. agent who is to be considered at all times as an independent contractor and not
employee of the Company; (b) collection of all payments on installment accounts are
The respondents, on the other hand, insist that the provisions of the Collection to be made monthly or oftener; (c) an agent is paid his compensation for service in
Agency Agreement belie the Companys position that the union members are the form of a commission of 6% of all collections made and turned over plus a bonus
independent contractors. To prove that union members are employees, it is asserted on said collections; (d) an agent is required to post a cash bond of three thousand
that they perform the most desirable and necessary activities for the continuous and pesos (P3,000.00) to assure the faithful performance and observance of the terms
effective operations of the business of the petitioner Company (citing Article 280 of and conditions under the agreement; (e) he is subject to all the terms and conditions
the Labor Code). They add that the termination of the agreement by the petitioner in the agreement; (f) the agreement is effective for one year from the date of its
execution and renewable on a yearly basis; and (g) his services shall be terminated in to be called control measures, any control is only with respect to the end result of the
case of failure to satisfy the minimum monthly collection performance required, collection since the requirements regulate the things to be done after the
failure to post a cash bond, or cancellation of the agreement at the instance of either performance of the collection job or the rendition of the service.
party unless the agent has a pending obligation or indebtedness in favor of the
The monthly collection quota is a normal requirement found in similar contractual
Company.
agreements and is so stipulated to encourage a collecting agent to report at least the
Meanwhile, the respondents rely on other features to strengthen their position that minimum amount of proceeds. In fact, paragraph 5, section b gives a bonus, aside
the collectors are employees. They quote paragraph 2 which states that an agent from the regular commission every time the quota is reached. As a requirement for
shall utilize only receipt forms authorized and issued by the Company. They also note the fulfillment of the contract, it is subject to agreement by both parties. Hence, if the
paragraph 3 which states that an agent has to submit and deliver at least once a week other contracting party does not accede to it, he can choose not to sign it. From the
or as often as required a report of all collections made using report forms furnished records, it is clear that the Company and each collecting agent intended that the
by the Company. Paragraph 4 on the monthly collection quota required by the former take control only over the amount of collection, which is a result of the job
Company is deemed by respondents as a control measure over the means by which performed.
an agent is to perform his services.
The respondents contention that the union members are employees of the Company
The nature of the relationship between a company and its collecting agents depends is based on selected provisions of the Agreement but ignores the following
on the circumstances of each particular relationship. Not all collecting agents are circumstances which respondents never refuted either in the trial proceedings before
employees and neither are all collecting agents independent contractors. The the labor officials nor in its pleadings filed before this Court.
collectors could fall under either category depending on the facts of each case.
1. The collection agents are not required to observe office hours or report to
The Agreement confirms the status of the collecting agent in this case as an Singers office everyday except, naturally and necessarily, for the purpose of
independent contractor not only because he is explicitly described as such but also remitting their collections.
because the provisions permit him to perform collection services for the company
2. The collection agents do not have to devote their time exclusively for SINGER.
without being subject to the control of the latter except only as to the result of his
There is no prohibition on the part of the collection agents from working elsewhere.
work. After a careful analysis of the contents of the agreement, we rule in favor of
Nor are these agents required to account for their time and submit a record of their
the petitioner.
activity.
The requirement that collection agents utilize only receipt forms and report forms
3. The manner and method of effecting collections are left solely to the discretion of
issued by the Company and that reports shall be submitted at least once a week is
the collection agents without any interference on the part of Singer.
not necessarily an indication of control over the means by which the job of collection
is to be performed. The agreement itself specifically explains that receipt forms shall 4. The collection agents shoulder their transportation expenses incurred in the
be used for the purpose of avoiding a co-mingling of personal funds of the agent with collections of the accounts assigned to them.
the money collected on behalf of the Company. Likewise, the use of standard report
forms as well as the regular time within which to submit a report of collection are 5. The collection agents are paid strictly on commission basis. The amounts paid to
intended to facilitate order in office procedures. Even if the report requirements are them are based solely on the amounts of collection each of them make. They do not
receive any commission if they do not effect any collection even if they put a lot of Moreover, the collection agent does his work more or less at his own pleasure
effort in collecting. They are paid commission on the basis of actual collections. without a regular daily time frame imposed on him (Investment Planning Corporation
of the Philippines v. Social Security System, supra; See also Social Security System v.
6. The commissions earned by the collection agents are directly deducted by them
Court of Appeals, 30 SCRA 210 [1969]).
from the amount of collections they are able to effect. The net amount is what is
then remitted to Singer. (Rollo, pp. 7-8) The grounds specified in the contract for termination of the relationship do not
support the view that control exists for the causes of termination thus specified
If indeed the union members are controlled as to the manner by which they are
have no relation to the means and methods of work that are ordinarily required of or
supposed to perform their collections, they should have explicitly said so in detail by
imposed upon employees. (Investment Planning Corp. of the
specifically denying each of the facts asserted by the petitioner. As there seems to be
no objections on the part of the respondents, the Court finds that they miserably The last and most important element of the control test is not satisfied by the terms
failed to defend their position. and conditions of the contracts. There is nothing in the agreement which implies
control by the Company not only over the end to be achieved but also over the
The plain language of the agreement reveals that the designation as collection agent
means and methods in achieving the end (LVN Pictures, Inc. v. Philippine Musicians
does not create an employment relationship and that the applicant is to be
Guild, 1 SCRA 132 [1961]).
considered at all times as an independent contractor. This is consistent with the first
rule of interpretation that the literal meaning of the stipulations in the contract The Court finds the contention of the respondents that the union members are
controls (Article 1370, Civil Code; La Suerte Cigar and Cigarette Factory v. Director of employees under Article 280 of the Labor Code to have no basis. The definition that
Bureau of Labor Relations, 123 SCRA 679 [1983]). No such words as to hire and regular employees are those who perform activities which are desirable and
employ are present. Moreover, the agreement did not fix an amount for wages nor necessary for the business of the employer is not determinative in this case. Any
the required working hours. Compensation is earned only on the basis of the tangible agreement may provide that one party shall render services for and in behalf of
results produced, i.e., total collections made (Sarra v. Agarrado, 166 SCRA 625 another for a consideration (no matter how necessary for the latters business) even
[1988]). In Investment Planning Corp. of the Philippines v. Social Security System, 21 without being hired as an employee. This is precisely true in the case of an
SCRA 924 [1967] which involved commission agents, this Court had the occasion to independent contractorship as well as in an agency agreement. The Court agrees with
rule, thus: the petitioners argument that Article 280 is not the yardstick for determining the
existence of an employment relationship because it merely distinguishes between
We are convinced from the facts that the work of petitioners agents or registered
two kinds of employees, i.e., regular employees and casual employees, for purposes
representatives more nearly approximates that of an independent contractor than
of determining the right of an employee to certain benefits, to join or form a union,
that of an employee. The latter is paid for the labor he performs, that is, for the acts
or to security of tenure. Article 280 does not apply where the existence of an
of which such labor consists; the former is paid for the result thereof x x x.
employment relationship is in dispute.
Even if an agent of petitioner should devote all of his time and effort trying to sell its
Even Section 8, Rule 8, Book III of the Omnibus Rules Implementing the Labor Code
investment plans he would not necessarily be entitled to compensation therefor. His
does not apply to this case. Respondents assert that the said provision on job
right to compensation depends upon and is measured by the tangible results he
contracting requires that for one to be considered an independent contractor, he
produces.
must have substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct employment relationship to the jurisdiction of the DOLE which was faced with a
of his business. There is no showing that a collection agent needs tools and dispute on an application for certification election.
machineries. Moreover, the provision must be viewed in relation to Article 106 of the
The Court finds that since private respondents are not employees of the Company,
Labor Code which provides:
they are not entitled to the constitutional right to join or form a labor organization
Art. 106. Contractor or subcontractor.Whenever an employer enters into a for purposes of collective bargaining. Accordingly, there is no constitutional and legal
contract with another person for the performance of the formers work, the basis for their union to be granted their petition for direct certification. This Court
employees of the contractor and of the latters subcontractor, if any, shall be paid in made this pronouncement in La Suerte Cigar and Cigarette Factory v. Director of
accordance with the provisions Bureau of Labor Relations, supra:

In the event that the contractor or subcontractor fails to pay the wages of his x x x The question of whether employer-employee relationship exists is a primordial
employees in accordance with this Code, the employer shall be jointly and severally consideration before extending labor benefits under the workmens compensation,
liable with his contractor or subcontractor to such employees to the extent of the social security, medicare, termination pay and labor relations law. It is important in
work performed under the contract, in the same manner and extent that he is liable the determination of who shall be included in a proposed bargaining unit because, it
to employees directly employed by him. is the sine qua non, the fundamental and essential condition that a bargaining unit be
composed of employees. Failure to establish this juridical relationship between the
xxx xxx xxx
union members and the employer affects the legality of the union itself. It means the
There is labor-only contracting where the person supplying workers to an employer ineligibility of the union members to present a petition for certification election as
does not have substantial capital or investment in the form of tools, equipment, well as to vote therein x x x. (At p. 689)
machineries, work premises, among others, and the workers recruited and placed by
WHEREFORE, the Order dated June 14, 1989 of Med-Arbiter Designate Felix B.
such persons are performing activities which are directly related to the principal
Chaguile, Jr., the Resolution and Order of Secretary Franklin M. Drilon dated
business of such employer. In such cases, the person or intermediary shall be
November 2, 1989 and December 14, 1989, respectively are hereby REVERSED and
considered merely as an agent of the employer who shall be responsible to the
SET ASIDE. The petition for certification election is ordered dismissed and the
workers in the same manner and extent as if the latter were directly employed by
temporary restraining order issued by the Court on December 21, 1989 is made
him. (p. 20)
permanent.
It can readily be seen that Section 8, Rule 8, Book III and Article 106 are relevant in
SO ORDERED.
determining whether the employer is solidarily liable to the employees of an alleged
contractor and/or sub-contractor for unpaid wages in case it is proven that there is a Fernan (C.J., Chairman), Feliciano and Bidin, JJ., concur.
job-contracting situation.
Resolution and order reversed and set aside.
The assumption of jurisdiction by the DOLE over the case is justified as the case was
brought on appeal by the petitioner itself which prayed for the reversal of the Order
of the MedArbiter on the ground that the union members are not its employees.
Hence, the petitioner submitted itself as well as the issue of existence of an