TERM EMPLOYMENT

C1 BRENT SCHOOL, INC. DIMACHE vs. RONALDO ZAMORA and DOROTEO R. ALEGRE G.R. No. L-48494 February
5, 1990 en banc

FACTS:Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at a yearly
compensation of P20,000.00. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the
date of execution of the agreement, to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28,
1973, and September 14, 1974 reiterated the same terms and conditions, including the expiry date, as those contained in
the original contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the
termination of his services effective on July 16, 1976. The stated ground for the termination was “completion of contract,
expiration of the definite period of employment.” Although protesting the announced termination stating that his services
were necessary and desirable in the usual business of his employer, and his employment lasted for 5 years – therefore he
had acquired the status of regular employee – Alegre accepted the amount of P3,177.71, and signed a receipt therefor
containing the phrase, “in full payment of services for the period May 16, to July 17, 1976 as full payment of contract.”

The Regional Director considered Brent School’s report as an application for clearance to terminate employment (not a
report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance and
instead required the reinstatement of Alegre, as a “permanent employee,” to his former position without loss of seniority
rights and with full back wages.

ISSUE:Whether or not the provisions of the Labor Code, as amended, have anathematized “fixed period employment” or
employment for a term.

RULING:Respondent Alegre’s contract of employment with Brent School having lawfully terminated with and by reason of
the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code
of the Philippines (P.D. 442) had not yet been promulgated. At that time, the validity of term employment was impliedly
recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Prior, thereto, it was the Code of Commerce
(Article 302) which governed employment without a fixed period, and also implicitly acknowledged the propriety of
employment with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became
effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or fixed-period
employment is contained in any of its articles or is otherwise deducible therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre, it was perfectly legitimate
for them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by
this Court.

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (PD 442),
which went into effect on November 1, 1974. The Code contained explicit references to fixed period employment, or
employment with a fixed or definite period. Nevertheless, obscuration of the principle of licitness of term employment began
to take place at about this time.

Article 320 originally stated that the “termination of employment of probationary employees and those employed WITH A
FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may prescribe.” Article 321 prescribed the
just causes for which an employer could terminate “an employment without a definite period.” And Article 319 undertook to
define “employment without a fixed period” in the following manner: …where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.

Subsequently, the foregoing articles regarding employment with “a definite period” and “regular” employment were amended
by Presidential Decree No. 850, effective December 16, 1975.

Article 320, dealing with “Probationary and fixed period employment,” was altered by eliminating the reference to persons
“employed with a fixed period,” and was renumbered (becoming Article 271).

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the
gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to restrict,
without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be given a
reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and
subverting to boot the principle of freedom of contract to remedy the evil of employer’s using it as a means to prevent their
employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a
headache by lopping off the head.

Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of employment as still good
rule—a rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in
the fairly analogous case of a teacher being served by her school a notice of termination following the expiration of the last
of three successive fixed-term employment contracts, the Court held:
Reyes (the teacher’s) argument is not persuasive. It loses sight of the fact that her employment was probationary,
contractual in nature, and one with a definitive period. At the expiration of the period stipulated in the contract, her
appointment was deemed terminated and the letter informing her of the non-renewal of her contract is not a condition sine
qua non before Reyes may be deemed to have ceased in the employ of petitioner UST. The notice is a mere reminder that
Reyes’ contract of employment was due to expire and that the contract would no longer be renewed. It is not a letter of
termination.

Paraphrasing Escudero, respondent Alegre’s employment was terminated upon the

expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written
advice given the Department of Labor with copy to said petitioner was a mere reminder of the impending expiration of his
contract, not a letter of termination, nor an application for clearance to terminate which needed the approval of the
Department of Labor to make the termination of his services effective. In any case, such clearance should properly have
been given, not denied.
C2 230 SCRA 423 - Philippine Village Hotel vs. NLRC G R NO 105033
FACTS: Private respondents were employees of petitioner Philippine Village Hotel. However, on May 19, 1986, petitioner
had to close and totally discontinue its operations due to serious financial and business reverses resulting in the termination
of the services of its employees. Thereafter, the Philippine Village Hotel employees and workers union filed against
petitioner a complaint for separation pay, unfair labor practice and illegal lock-out. The Labor Arbiter issued and order
finding the losses suffered by petitioner to be actual, genuine and of such magnitude as to validly terminate the services of
private respondents but directed petitioner to give priority to the complainants /herein private respondents0 in 1the2 hiring of
personnel should they resume their business operations in the future. The NLRC affirmed the validity of the closure of
petitioner but ordered petitioner to pay private respondent separation pay at the rate of 1/2 month pay every year of service.
However, there is nothing in the records to show that private respondents received their separation pay. Petitioner decided
to have a one (1) month dry run operation to ascertain the feasibility of resuming its business operations. In order to carry
out its dry run operation, petitioner hired casual workers, including private respondents, for a one (1) month period, or from
February 1, to March 1, 1989 as evidenced by the latter’s Contract of employment.
After evaluating the individual performance of all the employees and upon the lapse of the contractual one-month
period or on March 2, 1989 petitioner terminated the services of private respondents. Private respondents and Tupas Local
Chapter No. 1362 filed a complaint against petitioner for illegal dismissal and unfair labor practice with the NLRC+NCR
Arbitration Branch which was dismissed. on appeal to NLRC, it reversed the decision of the Labor Arbiter and ordered to
reinstate the above-named complainants to their former or substantially equivalent positions without loss of seniority rights
plus full back wages from the time they were actually dismissed on 02 March 1989 up to the time of their actual
reinstatement.
ISSUE : whether or not the private respondents are deemed to be regular employees.

RULING: In the instant case, private respondents were validly terminated by the petitioner when the latter had to close its
business due to financial losses. Following the directives of the NLRC to give priority in hiring private respondents should it
resume its business, petitioner hired private respondents during their one (1) month dry-run operation. However, this does
not mean that private respondents were deemed to have continued their regular employment status, which they had
enjoyed before their aforementioned termination due to petitioners financial losses. As stated by the Labor Arbiter in his
decision: It should be borne in mind that when complainants were first terminated as a result of the company’s cessation
from operation in May 1986 the employer-employee relationship between the parties herein was totally and completely
severed. Such being the case, respondent acted well within its discretion when in rehiring the complainants /herein private
respondents it made them casual and for a specific period. The complainants are no better than the new employees of
respondent /petitioner for the matter of what status or designation to be given them exclusively rests in the discretion of
management. The prior employment which was terminated cannot be joined or tacked to the new employment for purposes
of security of tenure. while it is true that security of tenure is a constitutionally guaranteed right of the employees, it does not,
however, mean perpetual employment for the employee because our law, while affording protection to the employee, does
not authorize oppression or destruction of an employer. The questioned of the order of
C3 PAKISTAN INTERNATIONAL AIRLINES (PIA) CORPORATION vs HON. BLAS F. OPLE, in his capacity as Minister of
Labor; HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister; ETHELYNNE B. FARRALES and MARIA
MOONYEEN MAMASIG
G.R. No. 61594 September 28, 1990

FACTS: On 2 December 1978, petitioner Pakistan International Airlines Corporation (PIA), a foreign corporation licensed to
do business in the Philippines, executed in Manila 2 separate contracts of employment, one with private respondent
Farrales and the other with private respondent Mamasig. 1 The contracts, which became effective on 9 January 1979,
provided in pertinent portion as follows:

5. DURATION OF EMPLOYMENT AND PENALTY

This agreement is for a period of 3 years, but can be extended by the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by
giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying
the EMPLOYEE wages equivalent to one month’s salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi,
Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.

Farrales & Mamasig (employees) were hired as flight attendants after undergoing training. Base station was in Manila and
flying assignments to different parts of the Middle East and Europe.

roughly 1 year and 4 months prior to the expiration of the contracts of employment, PIA through Mr. Oscar Benares, counsel
for and official of the local branch of PIA, sent separate letters, informing them that they will be terminated effective
September 1, 1980.
Farrales and Mamasig jointly instituted a complaint, for illegal dismissal and non-payment of company benefits and
bonuses, against PIA with the then Ministry of Labor and Employment (MOLE).

PIA’s Contention: The PIA submitted its position paper, but no evidence, and there claimed that both private respondents
were habitual absentees; that both were in the habit of bringing in from abroad sizeable quantities of “personal effects”; and
that PIA personnel at the Manila International Airport had been discreetly warned by customs officials to advise private
respondents to discontinue that practice. PIA further claimed that the services of both private respondents were terminated
pursuant to the provisions of the employment contract.

Favorable decision for the respondents. The Order stated that private respondents had attained the status of regular
employees after they had rendered more than a year of continued service; that the stipulation limiting the period of the
employment contract to 3 years was null and void as violative of the provisions of the Labor Code and its implementing rules
and regulations on regular and casual employment; and that the dismissal, having been carried out without the requisite
clearance from the MOLE, was illegal and entitled private respondents to reinstatement with full backwages.
Decision sustained on appeal. Hence, this petition for certiorari

ISSUE: (Relative to the subject) Which law should govern over the case? Which court has jurisdiction?

HELD: Philippine Law and Philippine courts

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, the law of Pakistan
as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute arising out of or in
connection with the agreement “only [in] courts of Karachi Pakistan”.
We have already pointed out that the relationship is much affected with public interest and that the otherwise applicable
Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their
relationship.
the contract was not only executed in the Philippines, it was also performed here, at least partially; private respondents are
Philippine citizens and respondents, while petitioner, although a foreign corporation, is licensed to do business (and actually
doing business) and hence resident in the Philippines; lastly, private respondents were based in the Philippines in between
their assigned flights to the Middle East and Europe. All the above contacts point to the Philippine courts and administrative
agencies as a proper forum for the resolution of contractual disputes between the parties.
Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust Philippine
agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did
not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the
applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law.
[DOCTRINE OF PROCESSUAL PRESUMPTION, eh?]
Petition denied.
_______
NOTES:

Another Issue: petitioner PIA invokes paragraphs 5 and 6 of its contract of employment with private respondents Farrales
and Mamasig, arguing that its relationship with them was governed by the provisions of its contract rather than by the
general provisions of the Labor Code.
A contract freely entered into should, of course, be respected, as PIA argues, since a contract is the law between the
parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of our
Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, “provided they are
not contrary to law, morals, good customs, public order or public policy.” Thus, counter-balancing the principle of autonomy
of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters
affected with public policy, are deemed written into the contract. Put a little differently, the governing principle is that parties
may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed
with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. It is
thus necessary to appraise the contractual provisions invoked by petitioner PIA in terms of their consistency with applicable
Philippine law and regulations.
C4 ALFREDO B. FELIX vs. DR. BRIGIDA BUENASEDA, in her capacity as Director, and ISABELO BAÑEZ, JR., in his
capacity as Administrator, both of the National Center for Mental Health, and the CIVIL SERVICE COMMISSION G.R. No.
109704 January 17, 1995 By Richard Troy A. Colmenares
USA College of Law Start: 6/30/14 10:07:12 PM Finish: 6/30/14 11:12:53 PM
Nature of the Case
A direct appeal seeking to annul the Resolution issued by the Civil Service Commission (CSC) which Felix claims to be in
violation of his constitutional right to security of tenure.

Facts
Felix worked as Medical Specialist I for the government [National Center of Mental Health (NCMH)]. He started as a
Resident Physician with an annual salary. Later he got promoted to Senior Resident Physician [permanent], which he held
for some time, and thereafter accepted the appointment as Medical Specialist I [temporary] – which Felix held for three
years without remonstrations. Pursuant to an Executive Order [EO No. 119] a general reorganization in the government
ensued. In view of this, DoH effected a reorganization, and one of the guidelines [DoH DO No. 478] made Felix unfit for the
position [he was not yet accredited by the Psychiatry Specilaty Board]. His appointment was extended pending review of the
Medical Committee [of NCMH], which eventually recommended non-renewal of Felix’s appointment and informed him of the
same. Nevertheless, Felix was still allowed to continue his service even after he was informed of his termination. The Chief
of Service [of NCMH] conducted an emergency to discuss, inter alia, Felix’s performance. The overall consensus expressed
non-renewal of Felix’s contract [due to poor performance, frequent tardiness and inflexibility]. The matter was referred to
CSC which ruled that appointment of Felix can be terminated at any time and that renewal was within the discretion of the
appointing authority [NCMH] by virtue of the incidental power of the power to appoint [the power to renew a temporary
appointment] and further. The removal of Felix has thus been affirmed by CSC. Felix’s appeal was dismissed and his
subsequent motion for reconsideration has been denied by CSC. Petitioner now questions the validity of such removal.
Hence, this direct appeal.

Issue(s)
(1). Is the position held by Felix as Resident Physician a permanent one? (2). Is an employee, after not challenging his
appointment from a permanent to a temporary position within a reasonable period, deemed to have accepted his
appointment?
Held
(1). No. Residency is never meant to be a permanent position. It is a step taken by a physician right after post-graduate
internship (and after hurdling the Medical Licensure Examinations) prior to his recognition as a specialist or sub-specialist in
a given field. To specialize on a medical field [be it Psychiatry or Cardiology], one has to go through a stringent process.
This process is to guarantee the specialist’s minimum standards and skills – which is an assurance to the community that a
specialist is not set loose without the basic knowledge and skills of his specialty as lives are ultimately at stake. The purpose
is thus geared towards training the resident physician. (2). Yes. Felix’s acceptance as temporary Medical Specialist I for
three years was subject to peer and superior evaluation, for which Felix fell short. Regardless, Felix never questioned his
temporary assignment [for three years] until DoH, as a result of his performance evaluation, ordered non-renewal of his
temporary position. In view of his silence to question his appointment from permanent to temporary, warrants the
presumption that Felix has either given up his claim or that he has already settled into the new position, which is the concept
of laches, which therefore estops him from questioning the same [three years later]. Stated otherwise, Felix has abandoned
his right to claim to question his conversion from permanent employee to temporary employee through laches, and
henceforth, is deemed to have accepted his appointment from permanent to temporary position
C5 Purefoods Corporation vs. NLRC, et. al
G.R. No. 122653
December 12, 1997

FACTS:

The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a fixed period of five
months at its tuna cannery plant in Tambler, General Santos City. After the expiration of their respective contracts of employment in
June and July 1991, their services were terminated. They forthwith executed a “Release and Quitclaim” stating that they had no claim
whatsoever against the petitioner. On December 1992, Private respondents filed before the NLRC a complaint for illegal dismissal
against the petitioner and its plant manager, Marciano Aganon.
The Labor Arbiter dismissed the complaint on the ground that the private respondents were mere contractual workers,
and not regular employees; hence, they could not avail of the law on security of tenure. The private respondents appealed from
the decision to the NLRC which affirmed the Labor Arbiter's decision. On private respondents’ motion for reconsideration, the
NLRC rendered another decision on 30 January 1995 vacating and setting aside its earlier decision and held that the private
respondents and their co-complainants were regular employees. It declared that the contract of employment for five months was
a “clandestine scheme employed by [the petitioner] to stifle [private respondents’] right to security of tenure” and should therefore be
struck down and disregarded for being contrary to law, public policy, and morals. Hence, their dismissal on account of the expiration of
their respective contracts was illegal.

Petitioner’s motion for reconsideration was denied; hence, this appeal.

Petitioner’s submission before the Court: the private respondents are now estopped from questioning their separation from
petitioner’s employ in view of their express conformity with the five-month duration of their employment contracts. In the
instant case, the private respondents were employed for a period of five months only. In any event, private respondents' prayer for
reinstatement is well within the purview of the “Release and Quitclaim” they had executed wherein they unconditionally released the
petitioner from any and all other claims which might have arisen from their past employment with the petitioner.
ISSUE: Whether or not the 5-month period specified in private respondents’ employment contract is invalid and is therefore violative of
their constitutional right to security of tenure.

Ruling:

The five-month period specified in private respondents’ employment contract is invalid. In

the leading case of Brent School, Inc. v. Zamora, although the Court has upheld the legality of fixed-term employment, the Court also
held that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or disregarded as contrary to public policy and morals.

Brent also laid down the criteria under which term employment cannot be said to be in circumvention of the law on
security of tenure: 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating
his consent; or 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal
terms with no moral dominance exercised by the former or the latter.

None of these criteria had been met in the present case. It could not be supposed that private respondents and all other so-
called “casual” workers of [the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month employment contract.
The petitioner does not deny or rebut private respondents' averments (1) that the main bulk of its workforce consisted of its so-
called “casual” employees; (2) that as of July 1991, “casual” workers numbered 1,835; and regular employees, 263; (3) that the
company hired “casual” every month for the duration of five months, after which their services were terminated and they were replaced
by other “casual” employees on the same five-month duration; and (4) that these “casual” employees were actually doing work that
were necessary and desirable in petitioner’s usual business.
This scheme of the petitioner was apparently designed to prevent the private respondents and the other “casual”
employees from attaining the status of a regular employee. It was a clear circumvention of the employees’ right to security
of tenure and to other benefits like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the
petitioner succeeded in evading the application of labor laws. Also, it saved itself from the trouble or burden of establishing a just
cause for terminating employees by the simple expedient of refusing to renew the employment contracts.
The five-month period specified in private respondents’ employment contracts having been imposed precisely to circumvent the
constitutional guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or
morals. To uphold the contractual arrangement between the petitioner and the private respondents would, in effect, permit the former
to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the employees’
security of tenure in their jobs.
The NLRC was correct in finding that the private respondents were regular employees and that they were illegally dismissed from
their jobs. Under Article 279 of the Labor Code and the recent jurisprudence, the legal consequence of illegal dismissal is
reinstatement without loss of seniority rights and other privileges, with full back wages computed from the time of dismissal
up to the time of actual reinstatement, without deducting the earnings derived elsewhere pending the resolution of the case.
However, since reinstatement is no longer possible because the petitioner's tuna cannery plant had, admittedly, been closed in
November 1994, the proper award is separation pay equivalent to one month pay or one-half month pay for every year of service,
whichever is higher, to be computed from the commencement of their employment up to the closure of the tuna cannery plant. The
amount of back wages must be computed from the time the private respondents were dismissed until the time petitioner's cannery plant
ceased operation.

Decision: WHEREFORE, for lack of merit, the instant petition is DISMISSED and the challenged decision of 30 January 1995 of the
National Labor Relations Commission in NLRC CA No. M-001323-93 is hereby AFFIRMED subject to the above modification on the
computation of the separation pay and back wages.

Purefoods v. NLRC 283 SCRA 136 [1997]

Facts:

The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a fixed period of five months at its tuna
cannery plant. After the expiration of their respective contracts of employment, their services were terminated. They thenexecuted a “Release and
Quitclaim” stating that they had no claim whatsoever against Pure Foods. The private respondents filed before the NLRC Sub-Regional Arbitration
Branch, a complaint for illegal dismissal against the petitioner and its plant manager.

Pure Foods Corp submits that the private respondents are now estopped from questioning their separation from petitioner’s employ in view of their
express conformity with the five-month duration of their employment contracts. Besides, they fell within the exception provided in Article 280 of the
Labor Code which reads: “[E]xcept where the employment has been fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee.

Moreover, the first paragraph of the said article must be read and interpreted in conjunction with the proviso in the second paragraph, which reads:
“Provided that any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed....” In the instant case, the private respondents were employed for a period of
five months only. In any event, private respondents' prayer for reinstatement is well within the purview of the “Release and Quitclaim” they had
executed wherein they unconditionally released the petitioner from any and all other claims which might have arisen from their past employment with
the petitioner.

The private respondents, on the other hand, argue that contracts with a specific period of employment may be given legal effect provided, however,
that they are not intended to circumvent the constitutional guarantee on security of tenure. They submit that the practice of the petitioner in hiring
workers to work for a fixed duration of five months only to replace them with other workers of the same employment duration was apparently to
prevent the regularization of these so-called “casuals,” which is a clear circumvention of the law on security of tenure.

Issue:

Whether employees hired for a definite period and whose services are necessary and desirable in the usual business or trade of the employer are
regular employees.

Ruling: We find the petition devoid of merit.

Article 280 of the Labor Code defines regular and casual employment as follows:
ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the contrary notwithstanding and regardless of the oral
argument of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph; Provided, That, any employee who has rendered at
least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity exists.

Thus, the two kinds of regular employees are (1) those who are engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken,
with respect to the activity in which they are employed.

In the instant case, the private respondents’ activities consisted in the receiving, skinning, loining, packing, and casing-up of tuna fish which were
then exported by the petitioner. Indisputably, they were performing activities which were necessary and desirable in petitioner’s business or trade.

xxx

Contrary to petitioner's submission, the private respondents could not be regarded as having been hired for a specific project or undertaking. The
term “specific project or undertaking” under Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or
such type of work which is not done on a daily basis but only for a specific duration of time or until completion; the services employed are then
necessary and desirable in the employer’s usual business only for the period of time it takes to complete the project.

The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that performed by those whose contracts had
expired negates petitioner’s contention that those workers were hired for a specific project or undertaking only.

xxx

Where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they
should be struck down or disregarded as contrary to public policy and morals.

xxx

…criteria under which term employment cannot be said to be in circumvention of the law on security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised
by the former or the latter.

None of these criteria had been met in the present case.

This scheme of the petitioner was apparently designed to prevent the private respondents and the other “casual” employees from attaining the status
of a regular employee. It was a clear circumvention of the employees’ right to security of tenure and to other benefits like minimum wage, cost-of-
living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the petitioner succeeded in evading the application of labor laws. Also,
it saved itself from the trouble or burden of establishing a just cause for terminating employees by the simple expedient of refusing to renew the
employment contracts.

The five-month period specified in private respondents’ employment contracts having been imposed precisely to circumvent the constitutional
guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or morals
D5 Mercado, Sr. v. NLRC
GR No. 76869| 201 SCRA 332 | September 25, 1991

Petition: Petition for certiorari to review

Petitioner: FORTUNATO MERCADO SR. et. Al Respondent: NLRC, AUROA CRUZ, SPS. FRANCISO DE BORJA and
LETICIA DE BORJA; and STO. NIÑO REALTY, INCORPORATED

DOCTRINE

FACTS

- Mercado filed a complaint for illegal dismissal and other incentives against Aurora Cruz, Sps. De Borja and Sto.
Nino Realty.
- Mercado alleged that they were agricultural workers utilized by Aurora Cruz in their 7 ½ hectares of rice land and 10
hectares of sugar land.
o Mercado worked in the farm since 1949 until 1979, when they were all allegedly dismissed from
employment.
- Aurora Cruz denied that Mercado et al. were her regular employees and instead averred that she engaged their
service through Mercado, who take charge in supplying the number of workers needed in the farms to do a
particular phase of agricultural work.
- LA: ruled in favor of Aurora Cruz
o Held that Mercado et al. were not regular and permanent workers of Cruz because they were required to
perform phases of agricultural work for a definite period of time after which their services would be available
to any other farm owner.
o LA awarded financial assistance of 10,000 to be divided among the petitioners.
o Both Mercado and Cruz appealed.
- NLRC: Affirmed and ruled in favor of Aurora Cruz
o Deleted the Financial Assistance of 10,000

Hence, this petition.

Mercado’s Contention:

- That LA and NLRC erred when both ruled that Mercado et al. are not regular and permanent employees. Thus,
contrary to the provision of Art. 280 of Labor Code.
- That they were seasonal employees, continued for so many years such that, they become regular and permanent
employees as provided by Labor Code.
NLRC’s Comment:

- That Mercado et al. fall under the exception provided by Art. 280, which provided that where the work or services to
be performed is seasonal in nature and the employment is for the duration of the season.
ISSUE/S

1. W/N Mercado et al. should be considered as seasonal employees.

RULING & RATIO

1. YES

- Art. 280 Par. 1, answers the question of who are REGULAR EMPLOYEES. Regardless of any written or oral
agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities
in the usual business or trade of the employer, except for project employees.
- A PROJECT EMPLOYEEShas been defined to be one whose employment has been fixed for a specific project, the
completion or termination of which has been determined at the time of the engagement of the employee, or where
the work or service to be performed is seasonal in nature and the employment is for the duration of the season, as
in the present case.
- The second paragraph of Art. 280 demarcates as CASUAL EMPLOYEES, all other employees who do not fall
under the definition of the preceding paragraph;
-
- Policy Instruction No. 12 of the DOLE discloses that the concept of regular and casual employees was designed to
put an end to casual employment in regular jobs
- applicable only to the employees who are deemed “casuals'” but not to the “project” employees nor the
regular employees treated in paragraph one of Art. 280.

DISPOSITION

WHEREFORE, the petition is DISMISSED. The decision of the National Labor Relations Commission affirming that of the
Labor Arbiter, under review, is AFFIRMED. No pronouncement as to costs.
D7Ricardo Fernandez vs. NLRC and DM Consunji, Inc. (1994, Nocon)
FACTS: Fernandez was hired by DM Consunji (November 1974). He worked for the latter until March 1936, when his
employment was terminated on the ground that the project to which he was assigned was already completed. He thus
filed a complaint for illegal dismissal with the Labor Arbiter. The Labor Arbiter (May 1988) found that Fernandez worked
continuously in various projects ranging from 5 to 20 years and belonged to a workpool (i.e. his dismissal was illegal).
DM Consunji appealed, on the ground that Fernandez was a project employee hired on a project-to-project basis,
depending on the availability of projects. It pointed to the gaps in Fernandezâ employment history to show that he was
hired on an âoff-and-onâ basis. The NLRC (September 1989), in view of (1) lack of evidence to prove the continuous
employment of Fernandez, and (2) the intermittent nature of their work as shown by project contracts, ruled that
Fernandez was a project employee. Fernandez interposed a MFR which was denied for lack of merit (July 1991). The
NLRC also noted that the MFR was filed only on January 29, 1990, which was beyond the 10d reglementary period from
date of receipt of decision (November 13, 1989). Without mentioning the denial of the MFR, Ricardo Fernandez filed a
petition before the SC, assailing the NLRC Decision, arguing that it is more in keeping with the intent and spirit of the law
to consider him as regular employees.

ISSUE: W/N the NLRC acted with GAD in reversing the Labor Arbiterâs decision by dismissing the complaint for illegal
dismissal on the finding that they were project employees. NO.

RULING: [Procedural] The yardstick to measure the timeliness of a petition for certiorari is the reasonableness of the
duration of time that had expired from the commission of the acts complained of up to the institution of the
proceedings to annul the same. Here, Fernandezâ negligence or indifference for such a long period of time (November
13, 1989 - receipt of Decision; Agusut 2, 1991 - receipt of denial of MFR; July 21, 1992 - filing of petition for certiorari)
has in the meantime rendered the questioned decision final and no longer assailable. [Substantive] DM Consunji
presented material documents (covering November 5, 1974 - March 23, 1986) showing that Fernandez was hired as a
project employee with the specific dates of hiring, duration of hiring, dates of his lay-offs, and the termination reports
submitted to the Minister of Labor. Such documents clearly showed gaps of month/s between the hiring of Fernandez in
numerous projects where he was assigned. Thus, he is governed by Policy Instruction No. 20: Project employees are
those employed in connection with a particular construction project. They are not entitled to termination pay if they are
terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of
the number of projects in which they have been employed by a particular construction company. The proviso in the
second par. of Art. 280 (LC) (refer to your codal) deems as regular employees only those casual employees who have
rendered at least one year of service regardless of the fact that such service may be continuous or broken. It is NOT
applicable to project employees who are specifically exempt therefrom. (Mercado vs. NLRC): GR: Office of a proviso is to
qualify or modify only the phrase immediately preceding it or restrain or limit the generality of the clause that it
immediately follows. A proviso is to be construed with reference to the immediately preceding part of the provision to
which it is attached, and not to the statute itself or to other sections thereof. EXC: Where the clear legislative intent is to
restrain or qualify not only the phrase immediately preceding it (the proviso) but also earlier provisions of the statute or
even the statute itself as a whole. A careful reading of the proviso discloses that the same relates to employment where
the employee is engaged to perform activities that are usually necessary or desirable in the usual business or trade of
the employer but hastens to qualify that project employment is specifically exempted therefrom. The NLRC correctly
observed that Fernandez failed to consider the requirement in Policy Instruction No. 20 that to qualify as a member of a
work pool, the worker must still be considered an employee of the construction company while in the work pool. There
must be proof to the effect that Fernandez was under an obligation to be always available on call of DM Consunji and
that he was not free to offer his services to other employers. However, Fernandez failed to introduce such evidence
during the times when there were no projects. Lastly, Fernandezâ layoff and the termination reports were duly
submitted to the Minister of Labor in accordance with Policy Instruction No. 20: Moreover, the company is not required
to obtain a clearance from the Secretary of Labor in connection with such termination. What is required of the company
is a report to the nearest Public Employment Office for statistical purposes. In other cases, it was uniformly held that the
failure of the employer to report to the nearest employment office the termination of workers everytime a project is
completed proves that the employees are not project employees. Contrariwise, the faithful and regular effort of DM
Consunji in reporting every completion of its project and submitting the lay-off list of its employees proves the nature of
employment of the workers involved therein as project employees. Thus, it is clear that Fernandez does not belong to
the workpool from which DM Consunji would draw workers for assignment to other projects at its discretion.
E1 Hacienda Fatima v. National Federation of Sugarcane Workers – Food & General TradeGR No. 149440, 28 Jan
2003

Facts: When complainant union (respondents) was certified as the collective bargainingrepresentative, petitioners
refused to sit down w/ the union for the purpose of enteringinto a CBA. The workers including complainants were not
given work for more than 1month. In protest, they staged a strike w/c was however settled upon the signing of aMOA.
Subsequently, alleging that complainants failed to load some wagons, petitionersreneged on its commitment to bargain
collectively & employed all means including theuse of private armed guards to prevent the organizers from entering the
premises. Nowork assignments were given to complainants w/c forced the union to stage a strike. Dueto conciliation
efforts by the DOLE, another MOA was signed by the parties & they metin a conciliation meeting. When petitioners
again reneged on its commitment,complainants filed a complaint. Petitioner accused respondents of refusing to work
& being choosy in the kind of work they have to perform.The NLRC ruled that petitioners were guilty of ULP & that the
respondents were illegallydismissed. The CA affirmed that while the work of respondents was seasonal in nature,they
were considered to be merely on leave during the off-season & were therefore stillemployed by petitioners.

Issue:Whether the CA erred in holding that respondents, admittedly seasonal workers, wereregular employees, contrary
to the clear provisions of Article 280 of the Labor Code,which categorically state that seasonal employees are not
covered by the definition of regular employees under paragraph 1, nor covered under paragraph 2 which
refersexclusively to casual employees who have served for at least one year

Held: No. For respondents to be excluded from those classified as regular employees, it is notenough that they perform
work or services that are seasonal in nature. They must havealso been employed only for the duration of one season.
The evidence proves theexistence of the first, but not of the second, condition. The fact that respondentsrepeatedly
worked as sugarcane workers for petitioners for several years is not denied bythe latter. Evidently, petitioners employed
respondents for more than one season.Therefore, the general rule of regular employment is applicable.If the employee
has been performing the job for at least a year, even if the performance isnot continuous & merely intermittent, the law
deems the repeated & continuing need for its performance as sufficient evidence of the necessity if not indispensability
of thatactivity to the business. Hence, the employment is considered regular, but only w/respect to such activity & while
such activity exists. Seasonal workers who are called towork from time to time & are temporarily laid off during off-
season are not separatedfrom service in said period, but merely considered on leave until re-employed (De Leon
E3 Abasolo vs NLRC
[G.R. No. 118475. November 29, 2000]

Facts:
Private respondent La Union Tobacco Redrying Corporation (LUTORCO), which is owned by private respondent See Lin Chan, is engaged in the
business of buying, selling, redrying and processing of tobacco leaves and its by-products. Petitioners have been under the employ of
LUTORCO for several years until their employment with LUTORCO was abruptly interrupted sometime in March 1993 when Compania General de
Tabaccos de Filipinas (also known as TABACALERA) took over LUTORCO’s tobacco operations. Petitioners were caught unaware of the
sudden change of ownership and its effect on the status of their employment, though it was alleged that TABACALERA would
assume and respect the seniority rights of the petitioners.

On March 17, 1993, the disgruntled employees instituted before the NLRC Regional Arbitration Branch No. 1, San
Fernando, La Union a complaint for separation pay against private respondent LUTORCO on the ground that there was a termination of
their employment due to the closure of LUTORCO as a result of the sale and turnover to TABACALERA. Private respondent
corporation raised as its defense that it is exempt from paying separation pay and denied that it terminated the services of
the petitioners; and that it stopped its operations due to the absence of capital and operating funds caused by losses incurred from 1990 to
1992 and absence of operating funds for 1993, coupled with adverse financial conditions and downfall of prices. Respondent
corporation also contends that the employees are seasonal worker, thus not entitled for separation pay. Labor Arbiter Ricardo N.
Olairez rendered his decision dismissing the complaint for lack of merit. The NLRC affirmed the decision of the Labor Arbiter.

Issue: Whether or not petitioners are regular employees entitled to separation pay.

Ruling: The primary standard, therefore, of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether
the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering
the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to such activity, and while such activity exists. In the
case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as petitioners have served the company
for many years, some for over 20 years, performing services necessary and indispensable to LUTORCO’s business, serve as badges of
regular employment. Moreover, the fact that petitioners do not work continuously for one whole year but only for the duration
of the tobacco season does not detract from considering them in regular employment since in a litany of cases this Court has
already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not
separated from service in said period, but are merely considered on leave until re-employed
 B6 Agoy vs. NLRC PICHAY, NIMPA T.
“
Quitclaims; Compromise Agreements
”
AGOY vs. NLRC G.R. No. 112096, January 30, 1996 FRANCISCO,J.

FACTS: This is a petition petition for certiorari , assailing the decision of the NLRC dismissing petitioner’s complaint for
illegal dismissal. Grave abuse of discretion is imputed to respondent NLRC consequent to the assailed resolution which
petitioner maintains was rendered with evident partiality and mental prejudice. Petitioner Marcelino Agoy alleged that he
applied for overseas employment as civil engineer with private respondent EUREKA, and was subsequently accepted to
work as "CE/Road Engineer" for private respondent AL-KHODAR) under a two year contract with a basic salary of
SR1,750.00 per month and food allowance of SR200.00 with free accommodation. On January 28, 1990, petitioner was
deployed by respondent Eureka to Jubail, Saudi Arabia under the category of "Foreman" at a basic monthly salary of
US$460.00, which terms were allegedly different from the original contract. Left with no other choice, petitioner was forced
to accept the position and started to work on February 7, 1990. He was later asked by respondent Al-Khodari to sign a new
contract at a reduced salary rate of SR1,200.00 or suffer termination and repatriation. Complainant's refusal to sign the new
contract eventually resulted in his dismissal from employment on March 26, 1990. After being paid the remaining balance of
his salary, petitioner executed a Final Settlement releasing respondent Al-Khodari from all claims and liabilities. On April 5,
1990, petitioner received a letter dated April 2, 1990 with subject "Termination of Services Within the Probation Period"
which he was forced to sign and consent to. Petitioner was finally repatriated to Manila on April 6, 1990. He filed a complaint
for illegal dismissal with claims for payment of salary for the unexpired portion of his contract, salary differential and
damages against respondents Eureka and Al-Khodari. POEA dismissed petitioner's complaint after finding that the evidence
on record clearly indicated that petitioner himself voluntarily consented to his termination and repatriation. It also found as
self-serving and hardly credible petitioner's allegation that he was merely forced by his employer to indicate "agreed" to his
notice of termination, absent any clear and convincing proof to corroborate the same. Moreover, the POEA upheld
respondent employer's right to dismiss petitioner within the probationary period on the ground that he failed to meet its
performance standard

ISSUE: Whether or not there is illegal dismissal despite the petitioner is only a probationary employee.

HELD Yes, the petitioner was illegally dismissed. Probationary employees, notwithstanding their limited tenure, are also
entitled to security of tenure. Thus, except for just cause as provided by law or under the employment contract, a
probationary employee cannot be terminated. 16 As explicitly provided under Article 281 of the Labor Code, a probationary
employee may be terminated on two grounds: (a) for just cause or (b) when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of his
engagement. ACCORDINGLY, the petition is hereby GRANTED. The assailed Resolution of respondent NLRC dated
September 22, 1993 is hereby SET ASIDE and the Decision dated December 9, 1992 is REINSTATED