BRENT SCHOOL, INC.DIMACHE vs.

RONALDO ZAMORA was executed on July 18, 1971, at a time when the Labor
and DOROTEO R. ALEGRE Code of the Philippines (P.D. 442) had not yet been
G.R. No. L-48494 February 5, 1990 en banc promulgated. At that time, the validity of term employment was
impliedly recognized by the Termination Pay Law, R.A. 1052,
FACTS: as amended by R.A. 1787. Prior, thereto, it was the Code of
Commerce (Article 302) which governed employment without a
Private respondent Doroteo R. Alegre was engaged as athletic fixed period, and also implicitly acknowledged the propriety of
director by petitioner Brent School, Inc. at a yearly employment with a fixed period. The Civil Code of the
compensation of P20,000.00. The contract fixed a specific Philippines, which was approved on June 18, 1949 and
term for its existence, five (5) years, i.e., from July 18, 1971, became effective on August 30,1950, itself deals with
the date of execution of the agreement, to July 17, 1976. obligations with a period. No prohibition against term-or fixed-
Subsequent subsidiary agreements dated March 15, 1973, period employment is contained in any of its articles or is
August 28, 1973, and September 14, 1974 reiterated the same otherwise deducible therefrom.
terms and conditions, including the expiry date, as those
contained in the original contract of July 18, 1971.  It is plain then that when the employment contract was signed
between Brent School and Alegre, it was perfectly legitimate
On April 20,1976, Alegre was given a copy of the report filed for them to include in it a stipulation fixing the duration thereof
by Brent School with the Department of Labor advising of the Stipulations for a term were explicitly recognized as valid by
termination of his services effective on July 16, 1976. The this Court. 
stated ground for the termination was "completion of contract,
expiration of the definite period of employment." Although The status of legitimacy continued to be enjoyed by fixed-
protesting the announced termination stating that his services period employment contracts under the Labor Code (PD 442),
were necessary and desirable in the usual business of his which went into effect on November 1, 1974. The Code
employer, and his employment lasted for 5 years - therefore he contained explicit references to fixed period employment, or
had acquired the status of regular employee - Alegre accepted employment with a fixed or definite period. Nevertheless,
the amount of P3,177.71, and signed a receipt therefor obscuration of the principle of licitness of term employment
containing the phrase, "in full payment of services for the began to take place at about this time.
period May 16, to July 17, 1976 as full payment of contract."
Article 320 originally stated that the "termination of
The Regional Director considered Brent School's report as an employment of probationary employees and those employed
application for clearance to terminate employment (not a report WITH A FIXED PERIOD shall be subject to such regulations
of termination), and accepting the recommendation of the as the Secretary of Labor may prescribe." Article 321
Labor Conciliator, refused to give such clearance and instead prescribed the just causes for which an employer could
required the reinstatement of Alegre, as a "permanent terminate "an employment without a definite period." And
employee," to his former position without loss of seniority rights Article 319 undertook to define "employment without a fixed
and with full back wages.  period" in the following manner: …where the employee has
been engaged to perform activities which are usually
ISSUE:  necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a
Whether or not the provisions of the Labor Code, as amended, specific project or undertaking the completion or termination of
have anathematized "fixed period employment" or employment which has been determined at the time of the engagement of
for a term. the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of
RULING: the season.

Respondent Alegre's contract of employment with Brent Subsequently, the foregoing articles regarding employment
School having lawfully terminated with and by reason of the with "a definite period" and "regular" employment were
expiration of the agreed term of period thereof, he is declared amended by Presidential Decree No. 850, effective December
not entitled to reinstatement. 16, 1975.

The employment contract between Brent School and Alegre 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 BRENT SCHOOL vs. ZAMORA
(becoming Article 271). 

As it is evident that Article 280 of the Labor Code, under a BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA
narrow and literal interpretation, not only fails to exhaust the and DOROTEO R. ALEGRE
gamut of employment contracts to which the lack of a fixed G.R. No. L-48494 February 5, 1990 en banc
period would be an anomaly, but would also appear to restrict,
without reasonable distinctions, the right of an employee to FACTS:
freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal interpretation Private respondent Doroteo R. Alegre was engaged as athletic
should be eschewed or avoided. The law must be given a director by petitioner Brent School, Inc. at a yearly
reasonable interpretation, to preclude absurdity in its compensation of P20,000.00. The contract fixed a specific
application. Outlawing the whole concept of term employment term for its existence, five (5) years, i.e., from July 18, 1971,
and subverting to boot the principle of freedom of contract to the date of execution of the agreement, to July 17, 1976.
remedy the evil of employer's using it as a means to prevent Subsequent subsidiary agreements dated March 15, 1973,
their employees from obtaining security of tenure is like cutting August 28, 1973, and September 14, 1974 reiterated the same
off the nose to spite the face or, more relevantly, curing a terms and conditions, including the expiry date, as those
headache by lopping off the head. contained in the original contract of July 18, 1971. 

Such interpretation puts the seal on Bibiso upon the effect of On April 20,1976, Alegre was given a copy of the report filed
the expiry of an agreed period of employment as still good rule by Brent School with the Department of Labor advising of the
—a rule reaffirmed in the recent case of Escudero vs. Office of termination of his services effective on July 16, 1976. The
the President (G.R. No. 57822, April 26, 1989) where, in the stated ground for the termination was "completion of contract,
fairly analogous case of a teacher being served by her school expiration of the definite period of employment." Although
a notice of termination following the expiration of the last of protesting the announced termination stating that his services
three successive fixed-term employment contracts, the Court were necessary and desirable in the usual business of his
held: employer, and his employment lasted for 5 years - therefore he
Reyes (the teacher's) argument is not persuasive. It loses sight had acquired the status of regular employee - Alegre accepted
of the fact that her employment was probationary, contractual the amount of P3,177.71, and signed a receipt therefor
in nature, and one with a definitive period. At the expiration of containing the phrase, "in full payment of services for the
the period stipulated in the contract, her appointment was period May 16, to July 17, 1976 as full payment of contract."
deemed terminated and the letter informing her of the non-
renewal of her contract is not a condition sine qua non before The Regional Director considered Brent School's report as an
Reyes may be deemed to have ceased in the employ of application for clearance to terminate employment (not a report
petitioner UST. The notice is a mere reminder that Reyes' of termination), and accepting the recommendation of the
contract of employment was due to expire and that the contract Labor Conciliator, refused to give such clearance and instead
would no longer be renewed. It is not a letter of termination.  required the reinstatement of Alegre, as a "permanent
employee," to his former position without loss of seniority rights
Paraphrasing Escudero, respondent Alegre's employment was and with full back wages. 
terminated upon the expiration of his last contract with Brent
School on July 16, 1976 without the necessity of any notice. ISSUE: 
The advance written advice given the Department of Labor
with copy to said petitioner was a mere reminder of the Whether or not the provisions of the Labor Code, as amended,
impending expiration of his contract, not a letter of termination, have anathematized "fixed period employment" or employment
nor an application for clearance to terminate which needed the for a term.
approval of the Department of Labor to make the termination of
his services effective. In any case, such clearance should RULING:
properly have been given, not denied.
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 amended by Presidential Decree No. 850, effective December
not entitled to reinstatement. 16, 1975.

The employment contract between Brent School and Alegre Article 320, dealing with "Probationary and fixed period
was executed on July 18, 1971, at a time when the Labor employment," was altered by eliminating the reference to
Code of the Philippines (P.D. 442) had not yet been persons "employed with a fixed period," and was renumbered
promulgated. At that time, the validity of term employment was (becoming Article 271). 
impliedly recognized by the Termination Pay Law, R.A. 1052,
as amended by R.A. 1787. Prior, thereto, it was the Code of As it is evident that Article 280 of the Labor Code, under a
Commerce (Article 302) which governed employment without a narrow and literal interpretation, not only fails to exhaust the
fixed period, and also implicitly acknowledged the propriety of gamut of employment contracts to which the lack of a fixed
employment with a fixed period. The Civil Code of the period would be an anomaly, but would also appear to restrict,
Philippines, which was approved on June 18, 1949 and without reasonable distinctions, the right of an employee to
became effective on August 30,1950, itself deals with freely stipulate with his employer the duration of his
obligations with a period. No prohibition against term-or fixed- engagement, it logically follows that such a literal interpretation
period employment is contained in any of its articles or is should be eschewed or avoided. The law must be given a
otherwise deducible therefrom. reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment
It is plain then that when the employment contract was signed and subverting to boot the principle of freedom of contract to
between Brent School and Alegre, it was perfectly legitimate remedy the evil of employer's using it as a means to prevent
for them to include in it a stipulation fixing the duration thereof their employees from obtaining security of tenure is like cutting
Stipulations for a term were explicitly recognized as valid by off the nose to spite the face or, more relevantly, curing a
this Court.  headache by lopping off the head.

The status of legitimacy continued to be enjoyed by fixed- Such interpretation puts the seal on Bibiso upon the effect of
period employment contracts under the Labor Code (PD 442), the expiry of an agreed period of employment as still good rule
which went into effect on November 1, 1974. The Code —a rule reaffirmed in the recent case of Escudero vs. Office of
contained explicit references to fixed period employment, or the President (G.R. No. 57822, April 26, 1989) where, in the
employment with a fixed or definite period. Nevertheless, fairly analogous case of a teacher being served by her school
obscuration of the principle of licitness of term employment a notice of termination following the expiration of the last of
began to take place at about this time. three successive fixed-term employment contracts, the Court
held:
Article 320 originally stated that the "termination of Reyes (the teacher's) argument is not persuasive. It loses sight
employment of probationary employees and those employed of the fact that her employment was probationary, contractual
WITH A FIXED PERIOD shall be subject to such regulations in nature, and one with a definitive period. At the expiration of
as the Secretary of Labor may prescribe." Article 321 the period stipulated in the contract, her appointment was
prescribed the just causes for which an employer could deemed terminated and the letter informing her of the non-
terminate "an employment without a definite period." And renewal of her contract is not a condition sine qua non before
Article 319 undertook to define "employment without a fixed Reyes may be deemed to have ceased in the employ of
period" in the following manner: …where the employee has petitioner UST. The notice is a mere reminder that Reyes'
been engaged to perform activities which are usually contract of employment was due to expire and that the contract
necessary or desirable in the usual business or trade of the would no longer be renewed. It is not a letter of termination. 
employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of Paraphrasing Escudero, respondent Alegre's employment was
which has been determined at the time of the engagement of terminated upon the 
the employee or where the work or service to be performed is expiration of his last contract with Brent School on July 16,
seasonal in nature and the employment is for the duration of 1976 without the necessity of any notice. The advance written
the season. advice given the Department of Labor with copy to said
petitioner was a mere reminder of the impending expiration of
Subsequently, the foregoing articles regarding employment his contract, not a letter of termination, nor an application for
with "a definite period" and "regular" employment were clearance to terminate which needed the approval of the
Department of Labor to make the termination of his services The disputed contract reads, as follows:
effective. In any case, such clearance should properly have
been given, not denied. “TERM/DURATION
INNODATA VS QUEJADA-LOPEZ
1. The EMPLOYER hereby employs, engages and hires the
Facts:   Innodata Philippines, Inc., is engaged in the EMPLOYEE, and the EMPLOYEE hereby accepts
encoding/data conversion business. It employs encoders, such appointment as FORMATTER effective March
indexers, formatters, programmers, quality/quantity staff, and 04, 1997 to March 03, 1998, a period of one (1) year.
others, to maintain its business and do the job orders of its xxxxxxxxx
clients.
“TERMINATION
Estrella G. Natividad and Jocelyn L. Quejada were employed
as formatters by Innodata Philippines, Inc. They [worked] from 7.1 This Contract shall automatically terminate on March 03,
March 4, 1997, until their separation on March 3, 1998. They 1998 without need of notice or demand.
believed that their job was necessary and desirable to the
usual business of the company which is data xxxxxxxxx
processing/conversion and that their employment is regular
pursuant to Article 280 of the Labor Code,they filed a 7.4 The EMPLOYEE acknowledges that the EMPLOYER
complaint for illegal dismissal and for damages as well as for entered into this Contract upon his express representation that
attorney’s fees against Innodata Phils., Incorporated. he/she is qualified and possesses the skills necessary and
desirable for the position indicated herein. Thus, the
Innodata contended that their employment contracts expired, EMPLOYER is hereby granted the right to pre-terminate this
having a fixed period of one (1) year. Since the period expired, Contract within the first three (3) months of its duration upon
their employment was likewise terminated applying the ruling failure of the EMPLOYEE to meet and pass the qualifications
in the Brent School case. and standards set by the EMPLOYER and made known to the
EMPLOYEE prior to execution hereof. Failure of the
Labor Arbiter Donato G. Quinto rendered a judgment in favor EMPLOYER to exercise its right hereunder shall be without
of complainants holding complainants Estella G. Natividad and prejudice to the automatic termination of the EMPLOYEE’s
Jocelyn Quejada to have been illegally dismissed by Innodata employment upon the expiration of this Contract or
Philippines Incorporated and Innodata Processing Corporation cancellation thereof for other causes provided herein and by
and ordering reinstatement to their former position without loss law.”
of seniority rights, or to a substantially equivalent position, and
to pay them jointly and severally, backwages computed from The contract provided two periods. Aside from the fixed one-
the time they were illegally dismissed on March 3, 1998 up to year term set in paragraph 1, paragraph 7.4 provides for a
the date of this decision in the amount of P112,535.28 EACH, three-month period during which petitioner has the right to pre-
or in the total amount of P225,070.56 for the two of them; and terminate the employment for the “failure of the employees to
further ordered to pay them attorney’s fees in the amount meet and pass the qualifications and standards set by the
equivalent to 10% of their respective awards. employer and made known to the employee prior to” their
employment. In effect, the paragraph 7.4 is a probationary
Innodata appealed to NLRC which reversed and set aside the period.
Labor Arbiter’s decision declaring that the contract was for a
fixed term and therefore, the dismissal at the end of their one Innodata claims that it was constrained by the nature of its
year term agreed upon was valid. An MR was filed but was business to enter into fixed-term employment contracts with
denied. employees assigned to job orders. It relies on the availability of
job orders or undertakings from its clients. Thus, the continuity
The CA ruled that respondents were regular employees in of work cannot be ascertained.
accordance with Section 280 of the Labor Code. It said that the
fixed-term contract prepared by petitioner was a crude attempt Hence, this petition.
to circumvent respondents’ right to security of tenure.
 
ISSUE: whether the alleged fixed-term employment contracts several unauthorized withdrawals amounting to Php500,000.00
are valid. from its bank in violation of the trust and confidence reposed in
her. Further, the Petitioner interposed that the letter received
HELD:  No, Innodata’s contract of employment failed to comply by the Respondent was a mere notice of the expiration of her
with the standards set by law and by this Court. “ A contract of contract, and not a termination notice.
employment is impressed with public interest. For this reason,
provisions of applicable statutes are deemed written into the Labor Arbiter: The LA found that the Respondent was illegally
contract. Hence, the “parties are not at liberty to insulate dismissed after having found that her employment contract
themselves and their relationships from the impact of labor was only signed on April 21, 2008, and not on January 21,
laws and regulations by simply contracting with each other.” 2008, the date when she actually started working for the
Moreover, in case of doubt, the terms of a contract should be Petitioner.  Although initially deemed as a probationary
construed in favor of labor.” contract, by extending the same for another year, she attained
the status of a regular employee.
RATIO: The applicable laws are Article 1700 of the Civil Code 
which declares: NLRC: The NLRC reversed and set aside the LA’s decision
and found that there was no factual basis to support the
“Art. 1700. The relations between capital and labor are not conclusion that the first contract was for a probationary
merely contractual. They are so impressed with public interest employment.
that labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions, CA: The Court of Appeals reinstated the decision of the LA.
collective bargaining, strikes and lockouts, closed shop, The CA ruled that the terms and conditions of the first contract
wages, working conditions, hours of labor and similar and the second contract negated a fixed-term employment
subjects.” since they state that respondent’s employment may be
terminated prior to the expiration thereof for “just or authorized
And Section 280 of the Labor Code. cause or when the EMPLOYEE fails to meet the reasonable
standards made known to him by the EMPLOYER.”
DISPOSITIVE: Petition is DENIED, and the assailed Decision
ISSUE:
and Resolution are AFFIRMED. Costs against petitioner.
Whether or not the Respondent was a fixed-period employee.
OKS DESIGNTECH, INC. represented by ZAMBY O. RULING:
PONGAD vs. MARY JAYNE L. CACCAM
YES. The Supreme Court held that  even if an employee is
FACTS: engaged to perform activities that are necessary or desirable in
the usual trade or business of the employer, the same does
Petitioner hired Respondent as an accountant under a not preclude the fixing of employment for a definite period.
Contract of Employment for a Fixed Period for 6 months. Her Article 280 [now, Article 294] of the Labor Code does not
contract was thereafter renewed for another 6 months. About proscribe or prohibit an employment contract with a fixed
nineteen days before the expiration of her second contract, period provided the same is entered into by the parties, without
Respondent received a letter from Company Manager Pongad any force, duress or improper pressure being brought to bear
informing her of the impending expiration of her contract.  As upon the employee and absent any other circumstance
Respondent felt that she was summarily dismissed by the vitiating consent. 
aforestated letter, she filed a complaint for illegal dismissal.

Respondent claimed that she was a regular employee and

argued that the nature of her work was necessary and
In fact, the Court, in Brent, had already pronounced that the
desirable to the business of the Petitioner. On the other hand,
decisive determinant in fixed-term employment should not be
herein Petitioner claims that the present labor case was only
the activities that the employee is called upon to perform, but
filed in retaliation of the criminal case of Qualified Theft and
the day certain agreed upon by the parties for the
Falsification of Private Documents after having discovered
commencement and termination of their employment
relationship. probationary teacher in the second semester of school year
UNIVERSIDAD DE STA. ISABEL, Petitioner, v. MARVIN- 2002-2003. By October 2004, you will be completing four (4)
JULIAN L. SAMBAJON, JR., Respondent. semesters (two school years) of service. Even permanent
teachers are re-ranked only every two years, and you are not
VILLARAMA, JR., J.: even a permanent teacher. I am informed that you have been
told several times and made to read the Provision in the
FACTS: Faculty Manual by the personnel office that you cannot be re-
ranked because you are still a probationary teacher.
Universidad de Sta. Isabel (petitioner) is a non-stock, non-
profit religious educational institution in Naga City. Petitioner Respondent insisted on his demand for retroactive pay.
hired Marvin-Julian L. Sambajon, Jr. (respondent) as a full-time Petitioner reiterated the school policy on re-ranking of
college faculty member with the rank of Assistant Professor on teachers.
probationary status, as evidenced by an Appointment
Contract4 dated November 1, 2002, effective November 1, However, respondent found the above explanation insufficient
2002 up to March 30, 2003. and not clear enough. In his letter dated January 12, 2005, he
pointed out the case of another faculty member --whom he did
After the aforesaid contract expired, petitioner continued to not name --also on probationary status whose salary was
give teaching loads to respondent who remained a full-time supposedly adjusted by petitioner at the start of school year
faculty member of the Department of Religious Education for (June) after he/she had completed his/her masters degree in
the two semesters of school-year (SY) 2003-2004 (June 1, March. Respondent thus pleaded for the release of his salary
2003 to March 31, 2004); and two semesters of SY 2004-2005 differential, or at the very least, that petitioner give him
(June 2004 to March 31, 2005). categorical answers to his questions. A dialogue between the
parties ensued but led to conflict.
Sometime in June 2003, after respondent completed his
course in Master of Arts in Education, major in Guidance and On February 26, 2005, respondent received his letter of
Counseling, he submitted the corresponding Special Order termination. On April 14, 2005, respondent filed a complaint for
from the Commission on Higher Education (CHED), together illegal dismissal against the petitioner.
with his credentials for the said masters degree, to the Human
Resources Department of petitioner for the purpose of salary Labor Arbiter Jesus Orlando M. Quinones ruled that there was
adjustment/increase. Subsequently, respondents salary was no just or authorized cause in the termination of respondents
increased, as reflected in his pay slips starting October 1-15, probationary employment. The NLRC rendered its Decision
2004. He was likewise re-ranked from Assistant Professor to affirming the Labor Arbiter and holding that respondent had
Associate Professor. acquired a permanent status pursuant to Sections 91, 92 and
93 of the 1992 Manual of Regulations for Private Schools, in
In a letter dated October 15, 2004 addressed to the President relation to Article 281 of the Labor Code, as amended.
of petitioner, Sr. Ma. Asuncion G. Evidente, D.C., respondent
vigorously argued that his salary increase should be made Both parties filed separate appeals before the CA. On motion
effective as of June 2003 and demanded the payment of his by respondent, the two cases were consolidated (CA-G.R. SP
salary differential. The school administration thru Sr. Purita Nos. 108103 and 108168).
Gatongay, D.C., replied by explaining its policy on re-ranking
of faculty members, viz: Please be informed that teachers in The CA sustained the conclusion of the NLRC that respondent
the Universidad are not re-ranked during their probationary had already acquired permanent status when he was allowed
period. The Faculty Manual as revised for school year 2002- to continue teaching after the expiration of his first
2003 provides Re-ranking is done every two years, hence the appointment-contract on March 30, 2003. However, the CA
personnel hold their present rank for two years. Those found it necessary to modify the decision of the NLRC to
undergoing probationary period and those on part-time basis of include the award of back wages to respondent.
employment are not covered by this provision. This provision is
found also in the 2000-2001 Operations Manual. ISSUES: 

(1) Whether the NLRC correctly resolved an issue not raised in

Your personnel file shows that you were hired as a petitioners appeal memorandum; and
 Commission in their appeal. This opened the said issues for
(2) whether respondents probationary employment was validly review and any action taken thereon by the Commission was
terminated by petitioner. well within the parameters of its jurisdiction.

HELD: The petition is partly meritorious. LABOR LAW: probationary employment period

LABOR LAW: NLRC revised rules of procedure A probationary employee is one who is on trial by the employer
during which the employer determines whether or not said
Section 4(d), Rule VI of the 2005 Revised Rules of Procedure employee is qualified for permanent employment. A
of the NLRC, which was in force at the time petitioner probationary appointment is made to afford the employer an
appealed the Labor Arbiters decision, expressly provided that, opportunity to observe the fitness of a probationary employee
on appeal, the NLRC shall limit itself only to the specific issues while at work, and to ascertain whether he will become a
that were elevated for review, to wit: proper and efficient employee. The word probationary as used
to describe the period of employment implies the purpose of
Section 4. Requisites for perfection of appeal. the term or period, but not its length.

(d) Subject to the provisions of Article 218 of the Labor Code, It is well settled that the employer has the right or is at liberty to
once the appeal is perfected in accordance with these Rules, choose who will be hired and who will be denied employment.
the Commission shall limit itself to reviewing and deciding only In that sense, it is within the exercise of the right to select his
the specific issues that were elevated on appeal. employees that the employer may set or fix a probationary
period within which the latter may test and observe the conduct
We have clarified that the clear import of the aforementioned of the former before hiring him permanently. The law, however,
procedural rule is that the NLRC shall, in cases of perfected regulates the exercise of this prerogative to fix the period of
appeals, limit itself to reviewing those issues which are raised probationary employment. While there is no statutory cap on
on appeal. As a consequence thereof, any other issues which the minimum term of probation, the law sets a maximum trial
were not included in the appeal shall become final and period during which the employer may test the fitness and
executory. efficiency of the employee.

In this case, petitioner sets forth the following issues in its Article 281 of the Labor Code provides:
appeal memorandum: WHETHER THE MARVIN JULIAN L.
SAMBAJON, JR. WAS ILLEGALLY DISMISSED FROM THE ART. 281. Probationary Employment Probationary
UNIVERSIDAD DE STA. ISABEL. WHETHER THE employment shall not exceed six (6) months from the date the
UNIVERSIDAD DE STA. ISABEL SHORTENED THE employee started working, unless it is covered by an
PROBATIONARYPERIOD OF SAMBAJON. WHETHER apprenticeship agreement stipulating a longer period. The
RESPONDENTS-APPELLANTS ARE ENTITLED TO services of an employee who has been engaged on a
DAMAGES. probationary basis may be terminated for a just cause or when
he fails to qualify as a regular employee in accordance with
In reviewing the Labor Arbiters finding of illegal dismissal, the reasonable standards made known by the employer to the
NLRC concluded that respondent had already attained regular employee at the time of his engagement. An employee who is
status after the expiration of his first appointment contract as allowed to work after a probationary period shall be considered
probationary employee. Such conclusion was but a logical a regular employee.
result of the NLRCs own interpretation of the law. Since
petitioner elevated the questions of the validity of respondents LABOR LAW: manual of regulations for private schools
dismissal and the applicable probationary period under the
aforesaid regulations, the NLRC did not gravely abuse its The probationary employment of teachers in private schools is
discretion in fully resolving the said issues. not governed purely by the Labor Code. The Labor Code is
supplemented with respect to the period of probation by
There is no merit to this contention. The records show that the special rules found in the Manual of Regulations for Private
petitioners elevated the issues regarding the correctness of the Schools. On the matter of probationary period, Section 92 of
award of damages, reinstatement with backpay, retirement the 1992 Manual of Regulations for Private Schools
benefits and the cost-saving bonus to the respondent regulations states:
 period may be incorporated in a collective bargaining
Section 92. Probationary Period. Subject in all instances to agreement. But absent any circumstances which unmistakably
compliance with the Department and school requirements, the show that an abbreviated probationary period has been agreed
probationary period for academic personnel shall not be more upon, the three-year probationary term governs.
than three (3) consecutive years of satisfactory service for
those in the elementary and secondary levels, six (6) As to the Certificate of Employment issued by Sr. Real on
consecutive regular semesters of satisfactory service for those January 31, 2005, it simply stated that respondent was a full
in the tertiary level, and nine (9) consecutive trimesters of time faculty member in the Religious Education Department of
satisfactory service for those in the tertiary level where this same institution and that he holds the rank of Associate
collegiate courses are offered on a trimester basis. Professor. There was no description or qualification of
respondents employment as regular or permanent. Neither did
Thus, it is the Manual of Regulations for Private Schools, and the similar Certification also issued by Sr. Real on March 18,
not the Labor Code, that determines whether or not a faculty 2005 prove respondents status as a permanent faculty
member in an educational institution has attained regular or member of petitioner.
permanent status. Section 9326 of the 1992 Manual of
Regulations for Private Schools provides that full-time teachers It bears stressing that full-time teaching primarily refers to the
who have satisfactorily completed their probationary period extent of services rendered by the teacher to the employer
shall be considered regular or permanent. school and not to the nature of his appointment. Its
significance lies in the rule that only full-time teaching
Respondent nonetheless claims that subsequently, the personnel can acquire regular or permanent status.
probationary period of three years under the regulations was
shortened by petitioner as relayed to him by Sr. Evidente The circumstance that respondents services were hired on
herself. However, the latter, together with Sr. Real, semester basis did not negate the applicable probationary
categorically denied having informed respondent that his period, which is three school years or six consecutive
probationary period was abbreviated, allegedly the reason his semesters. In Magis Young Achievers Learning Center the
salary adjustment was not made retroactive. Apart from his Court explained the three years probationary period rule in this
bare assertion, respondent has not adduced proof of any wise:
decision of the school administration to shorten his
probationary period. The common practice is for the employer and the teacher to
enter into a contract, effective for one school year. At the end
In Rev. Fr. Labajo v. Alejandro, we held that: of the school year, the employer has the option not to renew
the contract, particularly considering the teachers
The three (3)-year period of service mentioned in paragraph 75 performance. If the contract is not renewed, the employment
of the Manual of Regulations for Private Schools is of course relationship terminates. If the contract is renewed, usually for
the maximum period or upper limit, so to speak, of another school year, the probationary employment continues.
probationary employment allowed in the case of private school Again, at the end of that period, the parties may opt to renew
teachers. This necessarily implies that a regular or permanent or not to renew the contract. If renewed, this second renewal of
employment status may, under certain conditions, be attained the contract for another school year would then be the last
in less than three (3) years. By and large, however, whether or year since it would be the third school year of probationary
not one has indeed attained permanent status in ones employment. At the end of this third year, the employer may
employment, before the passage of three (3) years, is a matter now decide whether to extend a permanent appointment to the
of proof. employee, primarily on the basis of the employee having met
the reasonable standards of competence and efficiency set by
There can be no dispute that the period of probation may be the employer.
reduced if the employer, convinced of the fitness and efficiency
of a probationary employee, voluntarily extends a permanent For the entire duration of this three-year period, the teacher
appointment even before the three-year period ends. remains under probation. Upon the expiration of his contract of
Conversely, if the purpose sought by the employer is neither employment, being simply on probation, he cannot
attained nor attainable within the said period, the law does not automatically claim security of tenure and compel the employer
preclude the employer from terminating the probationary to renew his employment contract. It is when the yearly
employment on justifiable ground; or, a shorter probationary contract is renewed for the third time that Section 93 of the
Manual becomes operative, and the teacher then is entitled to new hires have to meet during the probationary period, and to
regular or permanent employment status. be judged on the basis of these standards, aside from the
usual standards applicable to employees after they achieve
LABOR LAW: probationary status and fixed-term employment permanent status. Under the terms of the Labor Code, these
standards should be made known to the teachers on
The existence of the term-to-term contracts covering the probationary status at the start of their probationary period, or
petitioners employment is not disputed, nor is it disputed that at the very least under the circumstances of the present case,
they were on probationary status not permanent or regular at the start of the semester or the trimester during which the
status from the time they were employed on May 25, 1998 and probationary standards are to be applied. Of critical importance
until the expiration of their Teaching Contracts on September in invoking a failure to meet the probationary standards, is that
7, 2000. As the CA correctly found, their teaching stints only the school should show as a matter of due process how these
covered a period of at least seven (7) consecutive trimesters or standards have been applied. This is effectively the second
two (2) years and three (3) months of service. This case, notice in a dismissal situation that the law requires as a due
however, brings to the fore the essential question of which, process guarantee supporting the security of tenure provision,
between the two factors affecting employment, should prevail and is in furtherance, too, of the basic rule in employee
given AMACCs position that the teachers contracts expired dismissal that the employer carries the burden of justifying a
and it had the right not to renew them. In other words, should dismissal. These rules ensure compliance with the limited
the teachers probationary status be disregarded simply security of tenure guarantee the law extends to probationary
because the contracts were fixed-term? employees.

The provision on employment on probationary status under the To be sure, nothing is illegitimate in defining the school-
Labor Code is a primary example of the fine balancing of teacher relationship in this manner. The school, however,
interests between labor and management that the Code has cannot forget that its system of fixed-term contract is a system
institutionalized pursuant to the underlying intent of the that operates during the probationary period and for this
Constitution. reason is subject to the terms of Article 281 of the Labor Code.
Unless this reconciliation is made, the requirements of this
On the one hand, employment on probationary status affords Article on probationary status would be fully negated as the
management the chance to fully scrutinize the true worth of school may freely choose not to renew contracts simply
hired personnel before the full force of the security of tenure because their terms have expired. The inevitable effect of
guarantee of the Constitution comes into play. Based on the course is to wreck the scheme that the Constitution and the
standards set at the start of the probationary period, Labor Code established to balance relationships between labor
management is given the widest opportunity during the and management.
probationary period to reject hirees who fail to meet its own
adopted but reasonable standards. These standards, together Given the clear constitutional and statutory intents, we cannot
with the just and authorized causes for termination of but conclude that in a situation where the probationary status
employment the Labor Code expressly provides, are the overlaps with a fixed-term contract not specifically used for the
grounds available to terminate the employment of a teacher on fixed term it offers, Article 281 should assume primacy and the
probationary status. For example, the school may impose fixed-period character of the contract must give way. This
reasonably stricter attendance or report compliance records on conclusion is immeasurably strengthened by the petitioners
teachers on probation, and reject a probationary teacher for and the AMACCs hardly concealed expectation that the
failing in this regard, although the same attendance or employment on probation could lead to permanent status, and
compliance record may not be required for a teacher already that the contracts are renewable unless the petitioners fail to
on permanent status. At the same time, the same just and pass the schools standards.
authorized causes for dismissal under the Labor Code apply to
probationary teachers, so that they may be the first to be laid- LABOR LAW: illegal dismissal
off if the school does not have enough students for a given
semester or trimester. Termination of employment on this Notwithstanding the limited engagement of probationary
basis is an authorized cause under the Labor Code. employees, they are entitled to constitutional protection of
security of tenure during and before the end of the
Labor, for its part, is given the protection during the probationary period. The services of an employee who has
probationary period of knowing the company standards the been engaged on probationary basis may be terminated for
any of the following: (a) a just or (b) an authorized cause; and renewed on a yearly basis with salary adjustments upon every
(c) when he fails to qualify as a regular employee in renewal.
accordance with reasonable standards prescribed by the
employer. In January 2009, Arlene was diagnosed with lung cancer. She
informed Fuji about her condition, and the Chief of News
Thus, while no vested right to a permanent appointment had Agency of Fuji, Yoshiki Aoki, informed the former that the
as yet accrued in favor of respondent since he had not company had a problem with renewing her contract
completed the prerequisite three-year period (six consecutive considering her condition. Arlene insisted she was still fit to
semesters) necessary for the acquisition of permanent status work as certified by her attending physician.
as required by the Manual of Regulations for Private Schools
--which has the force of law --he enjoys a limited tenure. After a series of verbal and written communications, Arlene
and Fuji signed a non-renewal contract. In consideration
During the said probationary period, he cannot be terminated thereof, Arlene acknowledged the receipt of the total amount of
except for just or authorized causes, or if he fails to qualify in her salary from March-May 2009, year-end bonus, mid-year
accordance with reasonable standards prescribed by petitioner bonus and separation pay. However, Arlene executed the non-
for the acquisition of permanent status of its teaching renewal contract under protest.
personnel.
Arlene filed a complaint for illegal dismissal with the NCR
In a letter dated February 26, 2005, petitioner terminated the Arbitration Branch of the NLRC, alleging that she was forced to
services of respondent stating that his probationary sign the non-renewal contract after Fuji came to know of her
employment as teacher will no longer be renewed upon its illness. She also alleged that Fuji withheld her salaries and
expiry on March 31, 2005, respondents fifth semester of other benefits when she refused to sign, and that she was left
teaching. No just or authorized cause was given by petitioner. with no other recourse but to sign the non-renewal contract to
Prior to this, respondent had consistently achieved above get her salaries.
average rating based on evaluation by petitioners officials and Labor Arbiter dismissed the complaint and held that Arlene
students. He had also been promoted to the rank of Associate was not a regular employee but an independent contractor.
Professor after finishing his masters degree course on his third
semester of teaching. Clearly, respondents termination after The NLRC reversed the Labor Arbiter’s decision and ruled that
five semesters of satisfactory service was illegal. Arlene was a regular employee since she continuously
rendered services that were necessary and desirable to Fuji’s
Respondent therefore is entitled to continue his three-year business.
probationary period, such that from March 31, 2005, his
probationary employment is deemed renewed for the following The Court of Appeals affirmed that NLRC ruling with
semester (1st semester of SY 2005-2006). However, given the modification that Fuji immediately reinstate Arlene to her
discordant relations that had arisen from the parties dispute, it position without loss of seniority rights and that she be paid her
can be inferred with certainty that petitioner had opted not to backwages and other emoluments withheld from her. The
retain respondent in its employ beyond the three-year period. Court of Appeals agreed with the NLRC that Arlene was a
regular employee, engaged to perform work that was
WHEREFORE, the petition for review on certiorari is PARTLY necessary or desirable in the business of Fuji, and the
GRANTED. successive renewals of her fixed-term contract resulted in
regular employment. The case of Sonza does not apply in the
FUJI TELEVISION NETWORK, INC. VS. ARLENE S. case because Arlene was not contracted on account of a
ESPIRITU special talent or skill. Arlene was illegally dismissed because
G.R. NO. 204944-45 DECEMBER 3, 2014 Fuji failed to comply with the requirements of substantive and
J. Leonen procedural due process. Arlene, in fact, signed the non-
renewal contract under protest as she was left without a
FACTS: Arlene S. Espiritu (Arlene) was engaged by Fuji choice.
Television Network, Inc. (Fuji) as a news
correspondent/producer tasked to report Philippine news to 1. Arlene was a regular employee with a fixed-term
Fuji through its Manila Bureau field office. The employment contract.
contract was initially for one year, but was successively
In determining whether an employment should be considered As such, it employs hundreds of employees, some on a regular
regular or non-regular, the applicable test is the reasonable basis and others on a casual basis, as “emergency workers.”
connection between the particular activity performed by the The petitioners were employed by the respondent on different
employee in relation to the usual business or trade of the dates as emergency workers at its poultry plant in Cainta,
employer. The standard, supplied by the law itself, is whether Rizal, under separate “temporary/casual contracts of
the work undertaken is necessary or desirable in the usual employment” for a period of five months. Most of them worked
business or trade of the employer, a fact that can be assessed as chicken dressers, while the others served as packers or
by looking into the nature of the services rendered and its helpers. Upon the expiration of their respective contracts, their
relation to the general scheme under which the business or services were terminated. They later filed separate complaints
trade is pursued in the usual course. It is distinguished from a for illegal dismissal and non-payment of holiday pay, 13th
specific undertaking that is divorced from the normal activities month pay, night-shift differential and service incentive leave
required in carrying on the particular business or trade. pay against the respondent before the Arbitration Branch of the
National Labor Relations Commission. 
However, there may be a situation where an employee’s work
is necessary but is not always desirable in the usual course of The petitioners alleged that their work as chicken dressers was
business of the employer. In this situation, there is no regular necessary and desirable in the usual business of the
employment. respondent, and added that although they worked from 10:00
p.m. to 6:00 a.m., they were not paid night-shift differential.
Fuji’s Manila Bureau Office is a small unit 213 and has a few They stressed that based on the nature of their work, they
employees. Arlene had to do all activities related to news were regular employees of the respondent; hence, could not
gathering. be dismissed from their employment unless for just cause and
after due notice. They asserted that the respondent GMC
A news producer “plans and supervises newscast [and] works terminated their contract of employment without just cause and
with reporters in the field planning and gathering information, due notice. They further argued that the respondent could not
including monitoring and getting news stories, rporting rely on the nomenclature of their employment as “temporary or
interviewing subjects in front of a video camera, submission of casual.” 
news and current events reports pertaining to the Philippines,
and traveling to the regional office in Thailand.” She also had ISSUE: Whether or not the petitioners were regular employees
to report for work in Fuji’s office in Manila from Mondays to of the respondent GMC when their employment was
Fridays, eight per day. She had no equipment and had to use terminated. 
the facilities of Fuji to accomplish her tasks.
HELD: The SC held the petitioners were employees with a
The successive renewals of her contract indicated the fixed period, and, as such, were not regular employees. Article
necessity and desirability of her work in the usual course of 280 of the Labor Code comprehends three kinds of
Fuji’s business. Because of this, Arlene had become a regular employees: (a) regular employees or those whose work is
employee with the right to security of tenure. necessary or desirable to the usual business of the employer;
(b) project employees or those whose employment has been
Arlene’s contract indicating a fixed term did not automatically fixed for a specific project or undertaking the completion or
mean that she could never be a regular employee. For as long termination of which has been determined at the time of the
as it was the employee who requested, or bargained, that the engagement of the employee or where the work or services to
contract have a “definite date of termination,” or that the fixed- be performed is seasonal in nature and the employment is for
term contract be freely entered into by the employer and the the duration of the season; and, (c) casual employees or those
employee, then the validity of the fixed-term contract will be who are neither regular nor project employees. 
upheld.
A regular employee is one who is engaged to perform activities
Pangilinan vs. General Milling Corp which are necessary and desirable in the usual business or
trade of the employer as against those which are undertaken
FACTS: The respondent General Milling Corporation is a for a specific project or are seasonal.[41] There are two
domestic corporation engaged in the production and sale of separate instances whereby it can be determined that an
livestock and poultry. It is, likewise, the distributor of dressed employment is regular: (1) if the particular activity performed
chicken to various restaurants and establishments nationwide. by the employee is necessary or desirable in the usual
business or trade of the employer; and, (2) if the employee has . Poseidon Fishing/Terry De Jesus v. NLRC, G.R. No. 168052,
been performing the job for at least a year. Article 280 of the February 20. 2006
Labor Code does not proscribe or prohibit an employment
contract with a fixed period. It does not necessarily follow that Facts:
where the duties of the employee consist of activities usually
necessary or desirable in the usual business of the employer, Petitioner Poseidon Fishing is a fishing company engaged in
the parties are forbidden from agreeing on a period of time for the deep-sea fishing industry with Terry de Jesus as the
the performance of such activities. There is thus nothing manager.
essentially contradictory between a definite period of Jimmy S. Estoquia was employed as Chief Mate in January
employment and the nature of the employee’s duties.  1988 and after five years. The contract with Eustoqia per the
"Kasunduan", there was a provision stating that he was being
Stipulations in employment contracts providing for term employed only on a ‘’por viaje’’  basis and that his employment
employment or fixed period employment are valid when the would be terminated at the end of the trip for which he was
period were agreed upon knowingly and voluntarily by the being hired.
parties without force, duress or improper pressure, being He was promoted to Boat Captain but was later demoted to
brought to bear upon the employee and absent any other Radio Operator. As a Radio Operator, he monitored the daily
circumstances vitiating his consent, or where it satisfactorily activities in their office and recorded in the duty logbook the
appears that the employer and employee dealt with each other names of the callers and time of their calls.
on more or less equal terms with no moral dominance On 3 July 2000, Estoquia failed to record a 7:25 a.m. call in
whatever being exercised by the former over the latter. An one of the logbooks. When he reviewed the two logbooks, he
examination of the contracts entered into by the petitioners noticed that he was not able to record the said call in one of
showed that their employment was limited to a fixed period, the logbooks so he immediately recorded the 7:25 a.m. call
usually five or six months, and did not go beyond such period. after the 7:30 a.m. entry.
The records reveal that the stipulations in the employment In the morning of 4 July 2000, petitioner detected the error in
contracts were knowingly and voluntarily agreed to by the the entry in the logbook. Estoquia was asked to prepare an
petitioners without force, duress or improper pressure, or any incident report to explain the reason for the said oversight. On
circumstances that vitiated their consent. Similarly, nothing the same day, Poseidon’s secretary summoned Estoquia to
therein shows that these contracts were used as a subterfuge get his separation pay
by the respondent GMC to evade the provisions of Articles 279 Estoquia filed a complaint for illegal dismissal with the Labor
and 280 of the Labor Code.  Arbiter.
Poseidon and Terry de Jesus asserted that Estoquia was a
The petitioners were hired as “emergency workers” and contractual or a casual employee employed only on a"por
assigned as chicken dressers, packers and helpers at the viaje" or per trip  basis and that his employment would be
Cainta Processing Plant. While the petitioners’ employment as terminated at the end of the trip for which he was being hired.
chicken dressers is necessary and desirable in the usual
business of the respondent, they were employed on a mere Issue:S:
temporary basis, since their employment was limited to a fixed
period. As such, they cannot be said to be regular employees, WON Eustoqia was a regular employee
but are merely “contractual employees.” Consequently, there WON deep -sea fishing is a seasonal industry
was no illegal dismissal when the petitioners’ services were WON Eustoqia was illegally dismissed
terminated by reason of the expiration of their contracts. Lack
of notice of termination is of no consequence, because when Ruling:
the contract specifies the period of its duration, it terminates on
the expiration of such period. A contract for employment for a Yes, Eustoquia was a regular employee.
definite period terminates by its own term at the end of such Article 280 draws a line between regular and casual
period.  employment. The provision enumerates two (2) kinds of
employees, the regular employees and the casual employees.
Petition is denied. The regular employees consist of the following:
1) those engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the
employer; and
2) those who have rendered at least one year of service Once a project or work pool employee has been: (1)
whether such service is continuous or broken. continuously, as opposed to intermittently, re-hired by the
In a span of 12 years, Eustoquia worked for petitioner first as a same employer for the same tasks or nature of tasks; and (2)
Chief Mate, then Boat Captain, and later as Radio Operator. these tasks are vital, necessary and indispensable to the usual
His job was directly related to the deep-sea fishing business of business or trade of the employer, then the employee must be
petitioner Poseidon. His work was, therefore, necessary and deemed a regular employee.
important to the business of his employer. Such being the
scenario involved, Eustoquia is considered a regular Eustoquia’s functions were usually necessary or desirable in
employee. the usual business or trade of petitioner fishing company and
There is nothing in the contract that says complainant is a he was hired continuously for 12 years for the same nature of
casual, seasonal or a project worker. The date July 1 to 31, tasks. Hence, he was of regular employee.
1998 under the heading "Pagdating" had been placed there
merely to indicate the possible date of arrival of the vessel and Yes, Eustoqia was illegally dismissed.
is not an indication of the status of employment of the crew of
the vessel. There is no sufficient evidence on record to prove Eustoqia’s
negligence, gross or simple, in the performance of his duties to
The test to determine whether employment is regular or not is warrant a reduction of six months salary and be summarily
the reasonable connection between the particular activity dismissed. At best, the simple negligence is punishable only
performed by the employee in relation to the usual business or with admonition or suspension for a day or two.
trade of the employer. And, if the employee has been His dismissal was without valid cause and where illegal
performing the job for at least one year, even if the dismissal is proven, the worker is entitled to back wages and
performance is not continuous or merely intermittent, the law other similar benefits without deductions or conditions.
deems the repeated and continuing need for its performance
as sufficient evidence of the necessity, if not indispensability of
that activity to the business.  Purefoods v. NLRC 283 SCRA 136 [1997]
In the case at bar, the act of hiring and re-hiring in various
capacities is a mere gambit employed by petitioner to thwart Facts:
the tenurial protection of private respondent. Such pattern of
re-hiring and the recurring need for his services are testament The private respondents (numbering 906) were hired by
to the necessity and indispensability of such services to petitioner Pure Foods Corporation to work for a fixed period of
petitioners’ business or trade. five months at its tuna cannery plant. After the expiration of
their respective contracts of employment, their services were
No, the activity of catching fish is a continuous process and terminated. They thenexecuted a “Release and Quitclaim”
could hardly be considered as seasonal in nature. stating that they had no claim whatsoever against Pure Foods.
The private respondents filed before the NLRC Sub-Regional
Project employees is defined as those workers hired: Arbitration Branch, a complaint for illegal dismissal against the
(1) for a specific project or undertaking, and petitioner and its plant manager.
(2) the completion or termination of such project has been
determined at the time of the engagement of the employee. Pure Foods Corp submits that the private respondents are now
estopped from questioning their separation from petitioner’s
The principal test for determining whether particular employees employ in view of their express conformity with the five-month
are "project employees" as distinguished from "regular duration of their employment contracts. Besides, they fell
employees," is whether or not the "project employees" were within the exception provided in Article 280 of the Labor Code
assigned to carry out a "specific project or undertaking," the which reads: “[E]xcept where the employment has been fixed
duration and scope of which were specified at the time the for a specific project or undertaking the completion or
employees were engaged for that project. termination of which has been determined at the time of the
engagement of the employee.
In this case, Eustoquia was never informed that he will be
assigned to a "specific project or undertaking” at the time of Moreover, the first paragraph of the said article must be read
their engagement. 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 which he is employed and his employment shall continue while
continuous or broken, shall be considered a regular employee such activity exists.
with respect to the activity in which he is employed....”  In the
instant case, the private respondents were employed for a Thus, the two kinds of regular employees are (1) those who
period of five months only.  In any event, private respondents' are engaged to perform activities which are  necessary or
prayer for reinstatement is well within the purview of the desirable in the usual business or trade of the employer; and
“Release and Quitclaim” they had executed wherein they (2) those casual employees who have rendered at least one
unconditionally released the petitioner from any and all other year of service, whether continuous or broken, with respect to
claims which might have arisen from their past employment the activity in which they are employed.
with the petitioner.
In the instant case, the private respondents’ activities
The private respondents, on the other hand, argue that consisted in the receiving, skinning, loining, packing, and
contracts with a specific period of employment may be given casing-up of tuna fish which were then exported by the
legal effect provided, however, that they are not intended to petitioner.  Indisputably, they were performing activities which
circumvent the constitutional guarantee on security of were necessary and desirable in petitioner’s business or trade.
tenure.  They submit that the practice of the petitioner in hiring
workers to work for a fixed duration of five months only to xxx
replace them with other workers of the same employment
duration was apparently to prevent the regularization of these Contrary to petitioner's submission, the private respondents
so-called “casuals,” which is a clear circumvention of the law could not be regarded as having been hired for a specific
on security of tenure. project or undertaking.  The term “specific project or
undertaking” under Article 280 of the Labor Code contemplates
Issue: an activity which is not commonly or habitually performed or
such type of work which is not done on a daily basis but only
Whether employees hired for a definite period and whose for a specific duration of time or until completion; the services
services are necessary and desirable in the usual business or employed are then necessary and desirable in  the
trade of the employer are regular employees. employer’s  usual business only for the period of time it takes
to complete the project.
Ruling: We find the petition devoid of merit.
The fact that the petitioner repeatedly and continuously hired
Article 280 of the Labor Code defines regular and casual workers to do the same kind of work as that performed by
employment as follows: those whose contracts had expired negates petitioner’s
ART. 280. Regular and Casual Employment.-- The provisions contention that those workers were hired  for a specific project
of written agreement to the contrary notwithstanding and or undertaking only.
regardless of the oral argument of the parties, an employment
shall be deemed to be regular where the employee has been xxx
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, Where from the circumstances it is apparent that the periods
except where the employment has been fixed for a specific have been imposed to preclude acquisition of tenurial security
project or undertaking the completion or termination of which by the employee, they should be struck down or disregarded
has been determined at the time of the engagement of the as contrary to public policy and morals.
employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of xxx
the season.
…criteria under which term employment cannot be said to be
An employment shall be deemed to be casual if it is not in circumvention of the law on security of tenure:
covered by the preceding paragraph;  Provided, That, any 1) The fixed period of employment was knowingly and
employee who has rendered at least one year of service, voluntarily agreed upon by the parties without any force,
whether such service is continuous or broken, shall be duress, or improper pressure being brought to bear upon the
considered a regular employee with respect to the activity in employee and absent any other circumstances vitiating his
consent; or
2) It satisfactorily appears that the employer and the employee petitioner; while the issue on visitors free access to company
dealt with each other on more or less equal terms with no premises was deemed settled during the mandatory
moral dominance exercised by the former or the latter. conference. Petitioners appeal to the CA was dismissed.

None of these criteria had been met in the present case. According to the CA, petitioner failed to show that the NLRC
committed grave abuse of discretion in finding that it violated
This scheme of the petitioner was apparently designed to certain provisions of the CBA.With regard to wage increase,
prevent the private respondents and the other “casual” The CA concluded that, based on the wording of the CBA,
employees from attaining the status of a regular employee.  It which uses the words "general increase" and "over and
was a clear circumvention of the employees’ right to security of above," it cannot be said that the parties have intended the
tenure and to other benefits like minimum wage, cost-of-living anniversary increase to be given in lieu of the CBA wage
allowance, sick leave, holiday pay, and 13th month increase. The CA declared that the withdrawal of the COLA
pay. Indeed, the petitioner succeeded in evading the under Wage Order No. RBIII-10 from the employees who were
application of labor laws.  Also, it  saved itself from the trouble not minimum wage earners amounted to a diminution of
or burden of establishing a just cause for terminating benefits because such grant has already ripened into a
employees by the simple expedient of refusing to renew the company practice. Based on the principle of liberal
employment contracts. construction of the CBA, the CA likewise sustained the NLRCs
rulings on theissues pertaining to medical expenses, the
The five-month period specified in private respondents’ shuttle service, time-off for attendance in grievance
employment contracts having been imposed precisely to meetings/hearings, and time-off due to brownouts. Finally, the
circumvent the constitutional guarantee on security of tenure CA affirmed the NLRCs finding that Madayags dismissal was
should, therefore, be struck down or disregarded as contrary to illegal. It emphasized that the burden to prove that the
public policy or morals employees disease is of such nature or at such stage that it
cannot be cured within a period of six months rests on the
SUPREME STEEL CORPORATION v. NAGKAKAISANG employer, who failed to prove such.
MANGGAGAWA NG SUPREME INDEPENDENT UNION
(NMS-IND-APL). (G.R. No. 185556; March 28, 2011). ISSUE: Did the CA err in affirming the NLRC?

FACTS: On July 27, 2005, respondent filed a notice of strike HELD: It is a familiar and fundamental doctrine in labor law
with the National Conciliation and Mediation Board (NCMB) on that the CBA is the law between the parties and compliance
the ground that petitioner violated certain provisions of the therewith is mandated by the express policy of the law. If the
CBA. The parties failed to settle their dispute. Consequently, terms of aCBA are clear and there is no doubt as to the
the Secretary of Labor certified the case to the NLRC for intention of the contracting parties, the literal meaning of its
compulsory arbitration pursuant to Article 263(g) of the Labor stipulation shall prevail. Moreover, the CBA must be construed
Code. liberally rather than narrowly and technically and the Court
must place a practical and realistic construction upon it. Any
Respondent alleged eleven CBA violations, enumerated as doubt in the interpretation of any law or provision affecting
follows: (1) denial to four employees of the CBA- provided labor should be resolved in favor of labor. Upon these well-
wage increase, (2) contracting-out labor, (3) failure to provide established precepts, the CAs findings and conclusions on all
shuttle service, (4) refusal to answer for medical expenses the issues are sustained, except the issue pertaining to the
incurred by three employees, (5) failure to comply with time-off denial of the COLA under Wage Order No. RBIII-10 and 11 to
provision, (6) visitors free access to company premises, (7) the employees who are not minimum wage earners, which
failure to comply with reporting time-off provision, (8) dismissal respondent avers as a diminution of benefits.
of an employee supposedly due to disease, (9) denial of
paternity leave benefit to two employees, (10) discrimination Diminution of benefits is the unilateral withdrawal by the
and harassment, and (11) non-implementation of COLA in employer of benefits already enjoyed by the employees. There
Wage Order Nos. RBIII-10 and 11. is diminution of benefits when it is shown that:

Out of the eleven issues raised by respondent, eight were

decided in its favor; two (denial of paternity leave benefit and
discrimination of union members) were decided in favor of [1] the grant or benefit is founded on a policy or has ripened
into a practice over a long period of time;  desirable in the usual business or trade of petitioner that could
[2] the practice is consistent and deliberate;  qualify them to be regular employees. 
[3] the practice is not due to error in the construction or
application of a doubtful or difficult question of law; and  HELD: The SC ruled that he argument of petitioner that its
[4] the diminution or discontinuance is done unilaterally by the usual business or trade is softdrink manufacturing and that the
employer. work assigned to respondent workers as sales route helpers
so involves merely “postproduction activities,” one which is not
The implementation of the COLA under Wage Order No. RBIII- indispensable in the manufacture of its products, scarcely can
10 across the board, which only lasted for less than a year, be persuasive. If, as so argued by petitioner company, only
cannot be considered as having been practiced "over a long those whose work are directly involved in the production of
period of time." While it is true that jurisprudence has not laid softdrinks may be held performing functions necessary and
down any rule requiring a specific minimum number of years in desirable in its usual business or trade, there would have then
order for a practice to be considered as a voluntary act of the been no need for it to even maintain regular truck sales route
employer, under existing jurisprudence on this matter, an act helpers. The nature of the work performed must be viewed
carried out within less than a year would certainly not qualify from a perspective of the business or trade in its entirety and
as such. Hence, the withdrawal of the COLA Wage Order No. not on a confined scope. 
RBIII-10 from the salaries of non-minimum wage earners did
not amount to a "diminution of benefits" under the The repeated rehiring of respondent workers and the
law. PARTIALLY GRANTED. continuing need for their services clearly attest to the necessity
or desirability of their services in the regular conduct of the
Magsalin vs. National Organization of Working Men business or trade of petitioner company. The Court of Appeals
has found each of respondents to have worked for at least one
FACTS: Coca-Cola Bottlers Phils., Inc., herein petitioner, year with petitioner company. While this Court, in Brent
engaged the services of respondent workers as "sales route School, Inc. vs. Zamora, has upheld the legality of a fixed-term
helpers" for a limited period of five months. After five months, employment, it has done so, however, with a stern admonition
respondent workers were employed by petitioner company on that where from the circumstances it is apparent that the
a day-to-day basis. According to petitioner company, period has been imposed to preclude the acquisition of tenurial
respondent workers were hired to substitute for regular sales security by the employee, then it should be struck down as
route helpers whenever the latter would be unavailable or being contrary to law, morals, good customs, public order and
when there would be an unexpected shortage of manpower in public policy. The pernicious practice of having employees,
any of its work places or an unusually high volume of work. workers and laborers, engaged for a fixed period of few
The practice was for the workers to wait every morning outside months, short of the normal six-month probationary period of
the gates of the sales office of petitioner company. If thus employment, and, thereafter, to be hired on a day-to-day basis,
hired, the workers would then be paid their wages at the end of mocks the law. Any obvious circumvention of the law cannot
the day.  be countenanced. 

Ultimately, respondent workers asked petitioner company to The fact that respondent workers have agreed to be employed
extend to them regular appointments. Petitioner company on such basis and to forego the protection given to them on
refused. Subsequently, the respondents filed with the NLRC a their security of tenure, demonstrate nothing more than the
complaint for the regularization of their employment with serious problem of impoverishment of so many of our people
petitioner company. Claiming that petitioner company and the resulting unevenness between labor and capital. A
meanwhile terminated their services, respondent workers filed contract of employment is impressed with public interest. The
a notice of strike and a complaint for illegal dismissal and provisions of applicable statutes are deemed written into the
unfair labor practice with the NLRC. The parties, later on, contract, and “the parties are not at liberty to insulate
agreed to submit the controversy, for voluntary arbitration but themselves and their relationships from the impact of labor
the VA dismissed the complaint on the ground that the laws and regulations by simply contracting with each other.” 
respondent workers were not employees of Coca-cola. 
Petition is dismissed.
ISSUE: Whether or not the nature of work of respondents in
the company is of such nature as to be deemed necessary and
Millares vs. NLRC
 On the other hand. Lagda was employed by ESSO as wiper in
Facts: June 1969, promoted as Chief engineer in 1980 until his last
On March 14, 2000, the court promulgated its decision ruling in COE expired on April 10, 1989. On May 1989, Lagda applied
favor of the petitioners setting aside and reversing the decision for a leave of absence which was approved by Trans-global
of NLRC over the case of the case between parties. and advised him to report for re-assignment on July 21, 1989.

A motion for reconsideration was filed by the private On June 26, 1989 Lagda wrote to ESSO through Trans-global
respondents to which petitioners filed an opposition. oresident informing him of his intention to avail of the optional
retirement plan in vies of his 20 years of service. It was denied
Court resolve to deny the motion for reconsideration with by Trans-global on the same grounds as with Millares. He
finality. Subsequently, FAME filed a motion for leave to requested to extend his leave of absence and was approved
intervene and to admit a motion for reconsideration in but later informed by ESSO that in view of his "unavailability for
intervention. Private respondents also filed a motion for leave contractual sea service" he had been droppped from the roster
to file a second motion for reconsideration of our decision. of crew memebers effective September 1, 1989.

In both petitions of respondent and FAME pray to reconsider On October 5, 1989, Millares and LAgda filed a complaint-
the court's ruling that"Filipino seafarers are considered regular affidavit before POEA for illegal dismissal and non-payment of
employees within the context of Article 280 of the Labor Code." employee benefits against ESSO and Trans-global.POEA
They claim that the decision may establish a precedent that dismissed the complaint for lack of merit, which was affirmed
will adversely affect the maritime industry. by NLRC. So petitioners elevated their case to this court and
obtained favorable action.
Millares was employed by ESSO through its local manning
agency, Trans-global on November 1968 as a machinist, in Issues: (1) are the petitioners regular or contractual
1975 he was promoted as chief engineer until he retired in employees? (2) assuming that they are regular employees,
1989. were they dismissed without just cause? (3) does provision of
POEA standard contract for sea farers on board foreign
On June 1989, Millares applied for leave of absence for one vessels preclude the attainment by seamen of the status of
month which was approved byt trans-globa. Then Millares regular employees? (4) does the decision to contravene
wrote to the operations managerinforming hijm of his intention international maritime las, allegedly part of the land?
to avail the optional retirement considering that he rendered
more than 20 years of service to the company. But ESSO Ruling:
denied the  retirement for the following grounds: (1) he was (1) Petitioners contends that they performed activities which
employed on a contractual basis (2) his contract of enlistment are usually necessary to the usual business or trade of the
did not provide for retirement before age of 60 and (3) he did company and the fact that they served for 20 years already is
not comply with requirement for claiming benefits under CEIP. an express acknowledgment that they are regular employees
by the private respondents.Respondents invoke that under the
On August 1989 Millares requested for an extension of his POEA rules and regulation governing overseas employment
leave of absence and the crewing manager then wrote to seafarers are not regular employees based on international
Millares advising him that respondent ESSO "has corrected the maritime practice. While intervenor FAME avers that our
deficiency in its manpower requirement specifically in the Chief decision of not reconsidered will have negative consequence
Engineer rank by promoting a First Assistant Engineer to this of the manning industry in the Philippines.
position as a result of (his) previous leave of absence which
expired last August 8, 1989. The adjustment in said rank was From the foregoing cases, it is clear that seafarers are
required in order to meet manpower schedules as a result of considered contractual employees. They can not be
(his) inability." considered as regular employees under Article 280 of the
Labor Code. Their employment is governed by the contracts
On September 26, 1989, ESSO advised MIllares that in view of they sign everytime they are rehired and their employment is
his absence without leave, which is equivalent to abandonment terminated when the contract expires. Their employment is
of his position, he had been dropped from the roster of crew contractually fixed for a certain period of time. They fall under
members effective September 1, 1989. the exception of Article 280 whose employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of petitioner was deployed for a period of nine (9) months from
engagement of the employee or where the work or services to January 29, 2000 to October 25, 2000. However, since the
be performed is seasonal in nature and the employment is for vessel was still at sea, petitioner was only repatriated on
the duration of the season.19 We need not depart from the November 14, 2000, or twenty (20) days after the expiration of
rulings of the Court in the two aforementioned cases which his contract of employment. Petitioner averred that since he
indeed constitute stare decisis with respect to the employment was allowed to stay in the vessel for another twenty (20) days,
status of seafarers. there was an implied renewal of his contract of employment.
Hence, when he was repatriated on November 14, 2000
From all the foregoing, we hereby state that petitioners are not without a valid cause, he was illegally dismissed.
considered regular or permanent employees under Article 280
of the Labor Code. Petitioners' employment have automatically Due to the foregoing, petitioner filed a case against the
ceased upon the expiration of their contracts of enlistment respondent for illegal dismissal, payment of retirement,
(COE). Since there was no dismissal to speak of, it follows that disability and medical benefits, separation and holiday pay. In
petitioners are not entitled to reinstatement or payment of its defense, respondent argued that petitioner was hired for a
separation pay or backwages, as provided by law. fixed period, the duration of which depends upon the mutual
agreement of the parties. Petitioner's employment was,
With respect to the benefits under the Consecutive Enlistment therefore, co-terminus with the term of his contract. Hence, the
Incentive Plan (CEIP), we hold that the petitioners are still claim of petitioner that he was illegally dismissed must fail,
entitled to receive 100% of the total amount credited to him because he was repatriated due to the completion of the term
under the CEIP. Considering that we have declared that of his contract.
petitioners are contractual employees, their compensation and
benefits are covered by the contracts they signed and the The Labor Arbiter (LA) ruled in favor of petitioner. Since
CEIP is part and parcel of the contract. petitioner was not repatriated at the expiration of his contract
on October 25, 2000, and was allowed by respondent to
In our March 14, 2000 Decision, we, however, found that continue working on board its vessel up to November 14,
petitioners Millares and Lagda were not guilty of 2000, his contract with respondent was impliedly renewed for
"abandonment" or "unavailability for contractual sea service," another nine months. The LA directed respondent to pay
as we have stated: petitioner his salary for the unexpired portion of his impliedly
The absence of petitioners was justified by the fact that they renewed contract, his medical benefits and attorney's fees.
secured the approval of private respondents to take a leave of
absence after the termination of their last contracts of Respondent appealed to the NLRC. The NLRC affirmed with
enlistment. Subsequently, petitioners sought for extensions of modification the LA's decision. The NLRC, however, deleted
their respective leaves of absence. Granting arguendo that the award of medical benefits and reduced the amount of
their subsequent requests for extensions were not approved, it attorney's fees.
cannot be said that petitioners were unavailable or had
abandoned their work when they failed to report back for Respondent filed a Petition for Certiorari with the CA. The CA
assignment as they were still questioning the denial of private ruled that there was no implied renewal of contract and the 20
respondents of their desire to avail of the optional early days extension was due to the fact that the ship was still at
retirement policy, which they believed in good faith to exist.26 sea. Petitioner filed a motion for reconsideration, which was
Neither can we consider petitioners guilty of poor performance denied by the CA Hence, the present petition.
or misconduct since they were recipients of Merit Pay Awards
for their exemplary performances in the company. ISSUE:

Partial grant. Petitioners reinstated with modification.  Was there an implied renewal of petitioner's contract of
employment with respondent?
ANTONIO E. UNICA, Petitioner,v. ANSCOR SWIRE SHIP HELD: In the case at bar, although petitioner's employment
MANAGEMENT CORPORATION, Respondent. contract with respondent ended on October 25, 2000 and he
disembarked only on November 14, 2000 or barely 20 days
FACTS: Respondent Anscor Swire Ship Management after the expiration of his employment contract, such late
Corporation is a manning agency. Petitioner was employed by disembarkation was not without valid reason. Respondent
respondent under various contracts. In his last contract, could not have disembarked petitioner on the date of the
termination of his employment contract, because the vessel
was still in the middle of the sea. Clearly, it was impossible for Issue:
petitioner to safely disembark immediately upon the expiration Whether respondent was a regular employee
of his contract, since he must disembark at a convenient port.
Thus, petitioner's stay in the vessel for another 20 days should Held:
not be interpreted as an implied extension of his contract. A Under Art 280 regular employees are classified into:
seaman need not physically disembark from a vessel at the (1) regular employees by nature of work - those employees
expiration of his employment contract to have such contract who perform a particular activity which is necessary or
considered terminated. desirable in the usual business or trade of the employer,
regardless of their length of service;
It is a settled rule that seafarers are considered contractual (2) regular employees by years of service - those employees
employees. Their employment is governed by the contracts who have been performing the job, regardless of the nature
they sign everytime they are rehired and their employment is thereof, for at least a year.
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. Thus, when Article 280 of the Labor Code, as amended, however, does not
petitioner's contract ended on October 25, 2000, his proscribe or prohibit an employment contract with a fixed
employment is deemed automatically terminated, there being period. It does not necessarily follow that where the duties of
no mutually-agreed renewal or extension of the expired the employee consist of activities usually necessary or
contract. desirable in the usual business of the employer, the parties are
forbidden from agreeing on a period of time for the
performance of such activities. There is nothing essentially
However, petitioner is entitled to be paid his wages after the contradictory between a definite period of employment and the
expiration of his contract until the vessel's arrival at a nature of the employee’s duties.
convenient port. Section 19 of the Standard Terms and
Conditions Governing the Employment of Filipino Seafarers  In the case at bar, Taripe signed a contract of employment
On-Board Ocean-Going Vessels is clear on this point: good only for a period of five months unless the said contract
is renewed by mutual consent. Along with other contractual
REPATRIATION. A. If the vessel is outside the Philippines employees, he was hired only to meet the increase in demand
upon the expiration of the contract, the seafarer shall continue for packaging materials for the Christmas season and to build
his service on board until the vessel's arrival at a convenient up stock levels for the early part of the year.
port and/or after arrival of the replacement crew, provided that,
in any case, the continuance of such service shall not exceed Standards for valid fixed term employment:
three months. The seafarer shall be entitled to earned wages (1) the fixed period of employment was knowingly and
and benefits as provided in his contract. voluntarily agreed upon by the parties, without any force,
duress or improper pressure being brought to bear upon the
DENIED employee and absent any other circumstances vitiating his
consent; or

(2) it satisfactorily appears that the employer and employee

Rowell Industrial Corporation vs CA dealt with each other on more or less equal terms with no
(EXCEPTION TO THE RULE ON REGULAR EMPLOYMENT) moral dominance whatever being exercised by the former on
the latter.
Facts:
Rowell Industrial is engaged in manufacturing tin cans for use
in packaging of consumer products, e.g., foods, paints, among Application of these standards to this case:
other things. Taripe was employed by petitioner on November 1) The employment contract signed by respondent Taripe did
8, 1999 as a “rectangular power press machine operator” not mention that he was hired only for a specific undertaking,
Taripe alleged that upon employment, he was made to sign a the completion of which had been determined at the time of his
document, which was not explained to him but which was engagement. The said employment contract neither mentioned
made a condition for him to be taken in and for which he was that respondent Taripe’s services were seasonal in nature and
not furnished a copy. that his employment was only for the duration of the Christmas
season as purposely claimed by petitioner RIC. What was RULING: We do not sustain public respondent’s theory that
stipulated in the said contract was that Taripe’s employment private respondent should not be made to compensate
was contractual for the period of five months. petitioners for backwages because its termination of their
2) Also RIC failed to controvert the claim that Taripe was made employment was not made in bad faith. The act of hiring and
to sign the contract of employment, prepared by RIC, as a re-hiring the petitioners over a period of time without
condition for his hiring. Such contract in which the terms are considering them as regular employees evidences bad faith on
prepared by only one party and the other party merely affixes the part of private respondent. The public respondent made a
his signature signifying his adhesion thereto is called contract finding to this effect when it stated that the subsequent rehiring
of adhesion.It is an agreement in which the parties bargaining of petitioners on a probationary status “clearly appears to be a
are not on equal footing, the weaker party’s participation being convenient subterfuge on the part of management to prevent
reduced to the alternative “to take it or leave it.” In the present complainants (petitioners) from becoming regular employees.”
case, respondent Taripe, in need of a job, was compelled to
agree to the contract, including the five-month period of In the case at bar, there is no valid cause for dismissal. The
employment, just so he could be hired. employees (petitioners) have not performed any act to warrant
3) 2) As a power press operator, a rank and file employee, he termination of their employment. Consequently, petitioners are
can hardly be on equal terms with petitioner RIC. As the Court entitled to their full backwages and other benefits from the time
of Appeals said, “almost always, employees agree to any their compensation was withheld from them up to the time of
terms of an employment contract just to get employed their actual reinstatement.
considering that it is difficult to find work given their ordinary
qualifications.” He was a regular employee As a rectangular
power press machine operator, in charge of manufacturing
covers for “four liters rectangular tin cans,” was holding a
position which is necessary and desirable in the usual Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union, G.R.
business or trade of petitioner RIC, which was the manufacture No. 148738, June 29, 2004
of tin cans.Thus, he was a regular employee.
Facts:
Bustamante vs. NLRC
Nelson Paras first worked for Mitsubishi Motors Philippines
FACTS: Respondent company is engaged in the business of Corporation (MMPC) as a shuttle bus driver from March 19,
producing high grade bananas in its plantation in Davao del 1976 to June 16, 1982, when he resigned to work abroad.
Norte. Petitioners Paulino Bantayan, Fernando Bustamante, After working in Saudi Arabia from 1982 to 1993, he was re-
Mario Sumonod and Osmalik Bustamante were employed as hired as a welder-fabricator at the MMPC tooling shop from
laborers and harvesters while petitioner Sabu Lamaran was October 3, 1994 to October 31, 1994. On October 29, 1994, his
employed as a laborer and sprayer in respondent company’s contract was renewed from November 1, 1994 up to March 3,
plantation. All the petitioners signed contracts of employment 1995. Paras was later re-hired on a probationary basis as a
for a period of six (6) months from 2 January 1990 to 2 July manufacturing trainee at the Plant Engineering Maintenance
1990, but they had started working sometime in September Department sometime in May of 1996. He and the new and re-
1989. Previously, they were hired to do the same work for hired employees were then given an orientation about the
periods lasting a month or more, from 1985 to 1989. Before the company’s history, corporate philosophy, organizational
contracts of employment expired on 2 July 1990, petitioners’ structure, and company rules and regulations, including the
employments were terminated on 25 June 1990 on the ground company standards for regularization, code of conduct and
of poor performance on account of age, as not one of them company-provided benefits. On May 27, 1996, Paras started
was allegedly below forty (40) years old. reporting for work. He was assigned at the paint ovens, air
make-up and conveyors. As part of the MMPC’s policy, Paras
Petitioners filed a complaint for illegal dismissal. was evaluated by his immediate supervisors after six (6)
  months, and received an average rating. Later, the supervisors
ISSUE: Whether or not private respondent exercises its power informed Paras that based on his performance rating, he would
to terminate in good faith so as to make the award of be regularized. However, the Department and Division
backwages improper in this case. Managers reviewed the performance evaluation made on
Paras. They unanimously agreed, along with Paras’ immediate
supervisors, that his performance was unsatisfactory. As a
consequence, Paras was not considered for regularization. On (6), should then be multiplied by the number of days within a
November 26, 1996, he received a Notice of Termination dated month, thirty (30); hence, the period of one hundred eighty
November 25, 1996, informing him that his services were (180) days. As clearly provided for in the last paragraph of
terminated effective the said date since he failed to meet the Article 13, in computing a period, the first day shall be
required company standards for regularization. excluded and the last day included. Thus, the one hundred
eighty (180) days commenced on May 27, 1996, and ended on
CPLU, a legitimate labor organization and the duly certified November 23, 1996. The termination letter dated November
bargaining agent of the hourly-paid regular rank and file 25, 1996 was served on respondent Paras only at 3:00 a.m. of
employees of MMPC in which Paras was a member, argued November 26, 1996. He was, by then, already a regular
that Paras was dismissed on his one hundred eighty third employee of the petitioner under Article 281 of the Labor Code.
(183rd) day of employment, or three (3) days after the
expiration of the probationary period of six (6) months, hence, Mariwasa Manufacturing vs Leogardo
he was already a regular employee on the date of the
termination of his probationary employment. Meanwhile, FACTS:
MMPC argued that under Article 13 of the New Civil Code,
Paras’ probationary employment which commenced on May
27, 1996 would expire on November 27, 1996. Since he Joaquin A. Dequila (or Dequilla) was hired on probation by
received the notice of termination of his employment on Mariwasa Manufacturing, Inc. as a general utility worker on
November 25, 1996, the same should be considered to have January 10, 1979. After 6 months, he was informed that his
been served within the six-month probationary period. work was unsatisfactory and had failed to meet the required
standards. To give him another chance, and with Dequila’s
Issue: written consent, Mariwasa extended Dequila’s probationary
period for another three months: from July 10 to October 9,
Whether or not Paras was already a regular employee when 1979. Dequila’s performance, however, did not improve and
he was terminated. Mariwasa terminated his employment at the end of the
extended period.
Ruling:
Dequila filed a complaint for illegal dismissal against Mariwasa
Yes. Indeed, an employer, in the exercise of its management and its VP for Administration, Angel T. Dazo, and violation of
prerogative, may hire an employee on a probationary basis in Presidential Decrees Nos. 928 and 1389.
order to determine his fitness to perform work. Under Article
281 of the Labor Code, the employer must inform the
employee of the standards for which his employment may be DIRECTOR OF MINISTRY OF LABOR: Complaint is
considered for regularization. Such probationary period, unless dismissed. Termination is justified. Thus, Dequila appeals to
covered by an apprenticeship agreement, shall not exceed six the Minister of Labor.
(6) months from the date the employee started working. The
employee’s services may be terminated for just cause or for MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr.
his failure to qualify as a regular employee based on held that Dequila was already a regular employee at the time
reasonable standards made known to him. Respondent Paras of his dismissal, thus, he was illegally dismissed. (Initial order:
was employed as a management trainee on a probationary Reinstatement with full backwages. Later amended to direct
basis. During the orientation conducted on May 15, 1996, he payment of Dequila’s backwages from the date of his dismissal
was apprised of the standards upon which his regularization to December 20, 1982 only.)
would be based. He reported for work on May 27, 1996. As per
the company’s policy, the probationary period was from three
(3) months to a maximum of six (6) months. Applying Article ISSUE: WON employer and employee may, by agreement,
13 of the Civil Code, the probationary period of six (6) months extend the probationary period of employment beyond the six
consists of one hundred eighty (180) days.This is in conformity months prescribed in Art. 282 of the Labor Code?
with paragraph one, Article 13 of the Civil Code, which
provides that the months which are not designated by their
RULING:  YES, agreements stipulating longer probationary
names shall be understood as consisting of thirty (30) days
periods may constitute lawful exceptions to the statutory
each. The number of months in the probationary period, six
prescription limiting such periods to six months. In Abbotts offer sheet, it was stated that Alcaraz was to be
employed on a probationary basis. Later that day, she
accepted the said offer and received an electronic mail (e-mail)
The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said from Abbotts Recruitment Officer, petitioner Teresita C.
that “Generally, the probationary period of employment is Bernardo (Bernardo), confirming the same. Attached to
limited to six (6) months. The exception to this general rule is Bernardos e-mail were Abbotts organizational chart and a job
when the parties to an employment contract may agree description of Alcarazs work.
otherwise, such as when the same is established by company
policy or when the same is required by the nature of work to be During Alcarazs pre-employment orientation, petitioner Allan
performed by the employee. In the latter case, there is G. Almazar (Almazar), Hospiras Country Transition Manager,
recognition of the exercise of managerial prerogatives in briefed her on her duties and responsibilities as Regulatory
requiring a longer period of probationary employment, such as Affairs Manager. Petitioner Kelly Walsh (Walsh), Manager of
in the present case where the probationary period was set for the Literature Drug Surveillance Drug Safety of Hospira, will be
eighteen (18) months, i.e. from May, 1980 to October, 1981 her immediate supervisor. Petitioner Maria Olivia T. Yabut-
inclusive, especially where the employee must learn a Misa (Misa), Abbotts Human Resources (HR) Director, sent
particular kind of work such as selling, or when the job requires Alcaraz an e-mail which contained an explanation of the
certain qualifications, skills experience or training.” procedure for evaluating the performance of probationary
employees.
In this case, the extension given to Dequila could not have
been pre-arranged to avoid the legal consequences of a During the course of her employment, Alcaraz noticed that
probationary period satisfactorily completed.  In fact, it was ex some of the staff had disciplinary problems. Thus, she would
gratia, an act of liberality on the part of his employer affording reprimand them for their unprofessional behavior such as non-
him a second chance to make good after having initially failed observance of the dress code, moonlighting, and disrespect of
to prove his worth as an employee. Such an act cannot now Abbott officers. However, Alcarazs method of management
unjustly be turned against said employer’s account to compel it was considered by Walsh to be "too strict."
to keep on its payroll one who could not perform according to
its work standards. Alcaraz was called to a meeting with Walsh and Terrible,
Abbotts former HR Director, where she was informed that she
failed to meet the regularization standards for the position of
By voluntarily agreeing to an extension of the probationary Regulatory Affairs Manager. Walsh, Almazar, and Bernardo
period, Dequila in effect waived any benefit attaching to the personally handed to Alcaraz a letter stating that her services
completion of said period if he still failed to make the grade had been terminated effective May 19, 2005. The letter
during the period of extension. By reasonably extending the detailed the reasons for Alcarazs termination. Alcaraz felt that
period of probation, the questioned agreement actually she was unjustly terminated from her employment and thus,
improved the probationary employee’s prospects of filed a complaint for illegal dismissal and damages against
demonstrating his fitness for regular employment. Abbott and its officers, namely, Misa, Bernardo, Almazar,
Walsh, Terrible, and Feist. She claimed that she should have
Petition granted. Order of Deputy Minister Leogardo reversed. already been considered as a regular and not a probationary
employee given Abbotts failure to inform her of the reasonable
standards for her regularization upon her engagement as
Abbott Laboratories vs. Alcaraz required under Article 295of the Labor Code.

LA dismissed Alcarazs complaint for lack of merit. The LA

FACTS: Petitioner Abbott Laboratories, Philippines (Abbott)
rejected Alcarazs argument that she was not informed of the
caused the publication in a major broadsheet newspaper of its
reasonable standards to qualify as a regular employee. The
need for a Medical and Regulatory Affairs Manager. Alcaraz -
NLRC reversed the findings of the LA and ruled that there was
who was then a Regulatory Affairs and Information Manager at
no evidence showing that Alcaraz had been apprised of her
Aventis Pasteur Philippines, Incorporated (another
probationary status and the requirements which she should
pharmaceutical company like Abbott) showed interest and
have complied with in order to be a regular employee. On
submitted her application.
appeal, CA affirmed the NLRC decision. Hence, this petition.
ISSUE: Was Alcaraz illegally dismissed? notified that Abbott had only one evaluation system for all of its
employees.
HELD: The probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with the
reasonable standards made known by the employer to the Considering the totality of the above-stated circumstances, it
employee at the time of the engagement. cannot, therefore, be doubted that Alcaraz was well-aware that
her regularization would depend on her ability and capacity to
A probationary employee, like a regular employee, enjoys fulfill the requirements of her position as Regulatory Affairs
security of tenure. However, in cases of probationary Manager and that her failure to perform such would give
employment, aside from just or authorized causes of Abbott a valid cause to terminate her probationary
termination, an additional ground is provided under Article 295 employment.
of the Labor Code, i.e., the probationary employee may also
be terminated for failure to qualify as a regular employee in An employer who terminates an employee for a valid cause but
accordance with the reasonable standards made known by the does so through invalid procedure is liable to pay the latter
employer to the employee at the time of the engagement. nominal damages.
Thus, the services of an employee who has been engaged on
probationary basis may be terminated for any of the following: Despite the existence of a sufficient ground to terminate
(a) a just or (b) an authorized cause; and (c) when he fails to Alcarazs employment and Abbotts compliance with the Labor
qualify as a regular employee in accordance with reasonable Code termination procedure, it is readily apparent that Abbott
standards prescribed by the employer. breached its contractual obligation to Alcaraz when it failed to
abide by its own procedure in evaluating the performance of a
probationary employee.
A punctilious examination of the records reveals that Abbott
had indeed complied with the above-stated requirements. This Records show that Abbotts PPSE procedure mandates, inter
conclusion is largely impelled by the fact that Abbott clearly alia, that the job performance of a probationary employee
conveyed to Alcaraz her duties and responsibilities as should be formally reviewed and discussed with the employee
Regulatory Affairs Manager prior to, during the time of her at least twice: first on the third month and second on the fifth
engagement, and the incipient stages of her employment. On month from the date of employment. Abbott is also required to
this score, the Court finds it apt to detail not only the incidents come up with a Performance Improvement Plan during the
which point out to the efforts made by Abbott but also those third month review to bridge the gap between the employees
circumstances which would show that Alcaraz was well- performance and the standards set, if any. In addition, a
apprised of her employers expectations that would, in turn, signed copy of the PPSE form should be submitted to Abbotts
determine her regularization. HRD as the same would serve as basis for recommending the
confirmation or termination of the probationary employment.

Abbott caused the publication in a major broadsheet In this case, it is apparent that Abbott failed to follow the
newspaper of its need for a Regulatory Affairs Manager, above-stated procedure in evaluating Alcaraz. For one, there
indicating therein the job description for as well as the duties lies a hiatus of evidence that a signed copy of Alcarazs PPSE
and responsibilities attendant to the aforesaid position. In form was submitted to the HRD. It was not even shown that a
Abbotts December 7, 2004 offer sheet, it was stated that PPSE form was completed to formally assess her
Alcaraz was to be employed on a probationary status. On the performance. Neither was the performance evaluation
day Alcaraz accepted Abbotts employment offer, Bernardo discussed with her during the third and fifth months of her
sent her copies of Abbotts organizational structure and her job employment. Nor did Abbott come up with the necessary
description through e-mail. Alcaraz was made to undergo a Performance Improvement Plan to properly gauge Alcarazs
pre-employment orientation where Almazar informed her that performance with the set company standards.
she had to implement Abbotts Code of Conduct and office
policies on human resources and finance and that she would In this light, while there lies due cause to terminate Alcarazs
be reporting directly to Walsh. Alcaraz received copies of probationary employment for her failure to meet the standards
Abbotts Code of Conduct and Performance Modules from Misa required for her regularization, and while it must be further
who explained to her the procedure for evaluating the pointed out that Abbott had satisfied its statutory duty to serve
performance of probationary employees; she was further a written notice of termination, the fact that it violated its own
company procedure renders the termination of Alcarazs by respondent and perform satisfactorily in order to attain
employment procedurally infirm, warranting the payment of regular status.  Even the NLRC upheld the petitoner’s
nominal damages. A further exposition is apropos. GRANTED. probationary status, stating that reinstatement is not
synonymous to regularization.

Although probationary employees also enjoy security of tenure,

Carvajal vs. Luzon Development Bank he may still be terminated because of just and authorized
causes of termination and the additional ground under Article
FACTS: 281 of the Labor Code, i.e. the probationary employee may
Carvajal was employed as a trainee-teller by Luzon also be terminated for failure to qualify as a regular employee
Development Bank (Bank) under a six-month probationary in accordance to the reasonable standards set by the
employment contract.  Ramirez is the President and CEO of employer.  Punctuality is a reasonable standard imposed on
the Bank.  A month into her employment, she was send a every employee, whether in government or private sector. 
Memorandum directing her to explain in writing why she should This, together with absenteeism, underperformance and
not be subjected to disciplinary action for her eight tardiness mistake in clearing a check are infractions that cannot be
on November 2003.  A second Memorandum was sent to her tantamount to satisfactory standards.
on January for her again chronic tardiness on December
2003.  She submitted her written explanations for both events
and manifested her acceptance of the consequences of her
actions.  She was terminated for three days effective 21 In addition to the abovementioned, it has been previously held
January 2004.  However, on 22 January, her termination was in PDI vs. Magtibay, Jr., that the second requirement under
lifted but at the same time, her services were terminated.  In Article 281 does not require notice and hearing.  Due process
the respondents’ position paper to the LA, they explained that of law for this second ground consists of making the
the reasons for her absence are chronic tardiness, reasonable standards expected of the employee during his
absenteeism and failure to perform satisfactorily as a probationary period known to him at the time of his
probationary employee. engagement.  By the very nature of probationary employment,
the employee knows from the very start that he will be under
LA Decision: The petitioner was illegally dismissed because close observation and continuous scrutiny by his supervisors. 
she was not afforded the notice in writing informing her of what If termination is for cause, it may be done at anytime during the
the Bank would like to bring out to her for the latter to answer probation. 
in writing.

NLRC Decision: NLRC affirmed the decision of the LA.

PDI vs. Magtibay
CA Decision: The CA found that the petitioner was not entitled
to backwages because she was rightfully dismissed for failure FACTS: The Philippine DAily Inquirer (PDI) hired Magtibay,
to meet the employment standards. on contractual basis, to assist, for a period of 5 months, the
regular phone operator.
ISSUE: After the expiration of Magtibay’s contractual employment, PDI
announced the creation and availability of a new position for a
Whether the petitioner can be considered a regular employee 2nd telephone operator who would undergo probationary
at the time of her dismissal. employment.
After the usual interview for the 2nd telephone operator slot,
HELD: PDI chose to hire Magtibay on a probationary basis for a
period of 6 months.  The signing of a written contract of
No. Carvajal’s appointment letter reads that “Possible employment followed.
extension of this contract will depend on the job requirements A  week  before  the  end  the  agreed 6-month probationary
of the Bank and your overall performance.  Performance period,a PDI officer handed Magtibay his termination paper,
review will be conducted before possible renewal can take grounded on his alleged failure to meet company standards.
effect.”  Therefore, petitioner knew, at the time of her Aggrieved, Magtibay immediately filed a complaint for illegal
engagement, that she must comply with the standards set forth dismissal and damages before the LA.
ISSUE: was there illegal dismissal? apprised that she was being hired as a probationary employee
HELD: NO for six months, subject to extension as a regular employee
LABOR CODE, Art. 281. Probationary employment. ̶ conditioned on her meeting the standards of permanent
Probationary employment shall not exceed 6 months from the employment set by the company. Her work performance was
date the employee started working, unless it is covered by an thereafter monitored and evaluated. On February 1, 2007, she
apprenticeship agreement stipulating a longer period.  The was formally informed that her employment would end
services of an employee who has been engaged on a because she failed to meet the company's standards.
probationary basis may be terminated for a (1) just cause or
(2) when he fails to qualify as a regular employee in Sy filed a case for illegal dismissal.
accordance with reasonable standards made known by the
employer to the employee at the time of his engagement.  An The ELA rendered a decision in favor of Sy, stating that a
employee who is allowed to work after a probationary period termination, notwithstanding the probationary status, must be
shall be considered a regular employee. for a just cause.
It is undisputed that PDI apprised Magtibay of the ground of his
termination, i.e.,  he failed to qualify as a regular employee in Dissatisfied, the petitioners appealed to the NLRC. The NLRC
accordance with reasonable standards made known to him at reversed the ELAs finding. The NLRC reasoned out that failure
the time of engagement, only a week before the expiration of to qualify for regular employment is in itself a just cause for
the six-month probationary period. Given this termination of probationary employment.
perspective, does this make his termination unlawful for being
violative of his right to due process of law? The MR having been denied, Sy elevated her case to the CA
It does not. via a petition for certiorari under Rule 65.
Unlike under the first ground for the valid termination of
probationary employment which is for just cause, the second On February 26, 2010, the CA reversed the NLRC. The
ground does not require notice and hearing.  Due process of petitioners sought reconsideration but it was denied.
law for this second ground consists of making the reasonable
standards expected of the employee during his probationary Hence, the present petition before this Court.
period known to him at the time of his probationary
employment. By the very nature of a probationary employment, ISSUE: Was the termination of Sy, a probationary employee,
the employee knows from the very start that he will be under valid?
close observation and his performance of his assigned duties
and functions would be under continuous scrutiny by his HELD: Even if probationary employees do not enjoy
superiors.  It is in apprising him of the standards against  which permanent status, they are accorded the constitutional
his performance shall be continuously assessed where due protection of security of tenure. They may only be terminated
process regarding the second ground lies, and not in notice for a just cause or when they otherwise fail to qualify as regular
and hearing as in the case of the first ground. employees in accordance with reasonable standards made
Tamson’s Enterprise vs. CA known to them by the employer at the time of their
engagement.
FACTS: It appears that on September 1, 2006, Sy was hired
by Tamsons as Assistant to the President. On February 24, One of the conditions before an employer can terminate a
2007, four days before she completed her sixth month of probationary employee is dissatisfaction on the part of the
working in Tamsons, Ng, Sy was informed that her services employer which must be real and in good faith, not feigned so
would be terminated due to inefficiency. as to circumvent the contract or the law. Here, absent any
proof showing that the work performance of petitioner was
Sy claimed that the remarks of her superiors about her alleged unsatisfactory, We cannot conclude that petitioner failed to
inefficiency were ill-motivated and made without any basis. meet the standards. This absence of proof leads Us to infer
She had been rendering services for almost six (6) months that their dissatisfaction with her work performance was
before she was arbitrarily and summarily dismissed.The contrived so as not to regularize her employment.
petitioners did not show her any evaluation or appraisal report The power of the employer to terminate an employee on
regarding her alleged inefficient performance. probation is not without limitations. Here, the petitioners failed
to convey to Sy the standards upon which she should measure
Petitioners asserted that before Sy was hired, she was up to be considered for regularization and how the standards
had been applied in her case. Petitioners dissatisfaction was at held that Ranchez was deprived of due process when she was
best self-serving and dubious as they could not present strip-searched and sent to jail for two weeks because such
concrete and competent evidence establishing her alleged amounted to constructive dismissal, making it impossible for
incompetence. Failure on the part of the petitioners to the respondent to continue under the employment. Even
discharge the burden of proof is indicative that the dismissal though she was merely a probationary employee, the lapse of
was not justified. the probationary contract did not amount to a valid dismissal
because there was already an unwarranted constructive
The law is clear that in all cases of probationary employment, dismissal beforehand.
the employer shall make known to the employee the standards
under which he will qualify as a regular employee at the time of
his engagement. Where no standards are made known to the The NLRC denied Robinson's motion for reconsideration. The
employee at that time, he shall be deemed a regular CA affirmed the decision of the NLRC.
employee. The standards under which she would qualify as a
regular employee not having been communicated to her at the ISSUE: Whether respondent was illegally terminated from
start of her probationary period, Sy qualified as a regular employment by petitioners.
employee.
Assuming that Sy failed to meet the standards that was made HELD: The petition is unmeritorious.
known to her, the termination was still flawed flawed for failure
to give the required notice to Sy. In this case, the petitioners LABOR LAW: Probationary employees; termination of
failed to comply with the requirement of a written notice. employment
Notably, Sy was merely verbally informed that her employment
would be terminated as admitted by the petitioners.
Considering that the petitioners failed to observe due process There is probationary employment when the employee upon
in dismissing her, the dismissal had no legal sanction. It bears his engagement is made to undergo a trial period during which
stressing that a workers employment is property in the the employer determines his fitness to qualify for regular
constitutional sense. employment based on reasonable standards made known to
him at the time of engagement.
Robinsons Galleria vs. Ranchez
A probationary employee, like a regular employee, enjoys
FACTS: security of tenure.However, in cases of probationary
employment, aside from just or authorized causes of
Respondent Ranchez was a probationary employee for 5 termination, an additional ground is provided under Article 281
months. She was hired as a cashier by Robinsons sometime of the Labor Code,i.e., the probationary employee may also be
within that period. Two weeks after she was hired, she terminated for failure to qualify as a regular employee in
reported the loss of cash which she had placed in the company accordance with reasonable standards made known by the
locker. She offered to pay for the lost amount but the employer to the employee at the time of the engagement.Thus,
Operations Manager of Robinsons had her strip-searched then the services of an employee who has been engaged on
reported her to the police even though they found nothing on probationary basis may be terminated for any of the following:
her person. An information for Qualified Theft was filed with the
Quezon City Regional Trial Court. She was detained for 2 (1) a just or
weeks for failure to immediately post bail. Weeks later, (2) an authorized cause; and
respondent Ranchez filed a complaint for illegal dismissal and (3) when he fails to qualify as a regular employee in
damages. A year later, Robinsons sent to respondent by mail a accordance with reasonable standards prescribed by the
notice of termination and/or notice of expiration of probationary employer.
employment.
Article 277(b) of the Labor Code mandates that the employer
The Labor Arbiter dismissed the complaint for illegal dismissal, shall furnish the worker, whose employment is sought to be
alleging that at the time of filing respondent Ranchez had not terminated, a written notice containing a statement of the
yet been terminated. She was merely investigated. However, causes of termination, and shall afford the latter ample
the NLRC reversed this ruling, stating that Ranchez was opportunity to be heard and to defend himself with the
illegally dismissed and that Robinson's should reinstate her. It assistance of a representative if he so desires, in accordance
with company rules and regulations pursuant to the guidelines
set by the Department of Labor and Employment.

In the instant case, based on the facts on record, petitioners

failed to accord respondent substantive and procedural due
process.The haphazard manner in the investigation of the
missing cash, which was left to the determination of the police
authorities and the Prosecutor's Office, left respondent with no
choice but to cry foul.Administrative investigation was not
conducted by petitioner Supermarket.On the same day that the
missing money was reported by respondent to her immediate
superior, the company already pre-judged her guilt without
proper investigation, and instantly reported her to the police as
the suspected thief, which resulted in her languishing in jail for
two weeks.

The due process requirements under the Labor Code are

mandatory and may not be replaced with police investigation
or court proceedings. An illegally or constructively dismissed
employee, respondent is entitled to: (1) either reinstatement, if
viable, or separation pay, if reinstatement is no longer viable;
and (2) backwages. These two reliefs are separate and distinct
from each other and are awarded conjunctively.

In this case, since respondent was a probationary employee at

the time she was constructively dismissed by petitioners, she
is entitled to separation pay and backwages. Reinstatement of
respondent is no longer viable considering the circumstances.

DENIED