Cherry Price Et Al Vs Innodata

Cherry Price et al vs Innodata
-Petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita Arbilera were employed as formatters by
INNODATA. The parties executed an employment contract denominated as a "Contract of Employment for a
Fixed Period," stipulating that the contract shall be for a period of one year
-(Leo Rabang was Human Resources and Development (HRAD) Manager, while respondent Jane Navarette was
its Project Manager of INNODATA) INNODATA had since ceased operations due to business losses in June
2002.
-Petitioners filed a Complaint for illegal dismissal and damages against respondents.
They argued that they should be considered regular employees since their positions as formatters were necessary
and desirable to the usual business of INNODATA as an encoding, conversion and data processing company.
Petitioners also averred that the decisions in Villanueva v. National Labor Relations Commission and Servidad
v. National Labor Relations Commission, in which the Court already purportedly ruled "that the nature of
employment at Innodata Phils., Inc. is regular," constituted stare decisis to the present case. finally argued that
they could not be considered project employees considering that their employment was not coterminous with
any project or undertaking, the termination of which was predetermined.
-respondents explained that INNODATA was engaged in the business of data processing, typesetting, indexing,
and abstracting for its foreign clients. The bulk of the work was data processing, which involved data encoding.
Almost half of the employees of INNODATA did data encoding work, while the other half monitored quality
control. Due to the wide range of services rendered to its clients, INNODATA was constrained to hire new
employees for a fixed period of not more than one year. Respondents asserted that petitioners were not illegally
dismissed, for their employment was terminated due to the expiration of their terms of employment. Petitioners’
contracts of employment with INNODATA were for a limited period only, commencing on 6 September 1999
and ending on 16 February 2000.
-The Labor Arbiter held that as formatters, petitioners occupied jobs that were necessary, desirable, and
indispensable to the data processing and encoding business of INNODATA. By the very nature of their work as
formatters, petitioners should be considered regular employees of INNODATA, who were entitled to security of
tenure. Thus, their termination for no just or authorized cause was illegal.
-NLRC reversed LA. It found that petitioners were not regular employees, but were fixed-term employees as
stipulated in their respective contracts of employment.
-CA sustained the ruling of the NLRC that petitioners were not illegally dismissed. even though petitioners were
performing functions that are necessary or desirable in the usual business or trade of the employer, petitioners
did not become regular employees because their employment was for a fixed term, periods in petitioners’
contracts of employment were not imposed to preclude petitioners from acquiring security of tenure; and,
applying the ruling of this Court in Brent, declared that petitioners’ fixed-term employment contracts were valid.
Issue: whether petitioners were hired by INNODATA under valid fixed-term employment contracts.
Held: No. The terms fixed therein were meant only to circumvent petitioners’ right to security of tenure and are,
therefore, invalid. Petitioners should be considered regular employees of INNODATA by the nature of the work
they performed as formatters, which was necessary in the business or trade of INNODATA. Hence, the total
period of their employment becomes irrelevant. The provisions in their employment contract are repugnant to
the basic tenet in labor law that no employee may be terminated except for just or authorized cause.
- The employment status of a person is defined and prescribed by law and not by what the parties say it should
be. Equally important to consider is that a contract of employment is impressed with public interest such that
labor contracts must yield to the common good…
- Thus, provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to
insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting
with each other.
- Art 280. LC, the following employees are accorded regular status: (1) those who are engaged to perform
activities which are necessary or desirable in the usual business or trade of the employer, regardless of the length
of their employment; and (2) those who were initially hired as casual employees, but have rendered at least one
year of service, whether continuous or broken, with respect to the activity in which they are
employed. Undoubtedly, petitioners belong to the first type of regular employees.
- Under Article 280 of the Labor Code, the applicable test to determine whether an employment should be
considered regular or non-regular is the reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the employer.
- The primary business of INNODATA is data encoding, and the formatting of the data entered into the
computers is an essential part of the process of data encoding. Formatting organizes the data encoded, making it
easier to understand for the clients and/or the intended end users thereof. Undeniably, the work performed by
petitioners was necessary or desirable in the business or trade of INNODATA.
- However, it is also true that while certain forms of employment require the performance of usual or
desirable functions and exceed one year, these do not necessarily result in regular employment under
Article 280 of the Labor Code. Under the Civil Code, fixed-term employment contracts are not limited, as they
are under the present Labor Code, to those by nature seasonal or for specific projects with predetermined dates
of completion; they also include those to which the parties by free choice have assigned a specific date of
termination.
- The decisive determinant in term employment is the day certain agreed upon by the parties for the
commencement and termination of their employment relationship, a day certain being understood to be that
which must necessarily come, although it may not be known when. Seasonal employment and employment for a
particular project are instances of employment in which a period, where not expressly set down, is necessarily
implied
- where, from the circumstances, it is apparent that the period was imposed to preclude the acquisition of
tenurial security by the employee, then it should be struck down as being contrary to law, morals, good
customs, public order and public policy.
- respondents wanted to make it appear that petitioners worked for INNODATA for a period of less than one
year. The only reason the Court can discern from such a move on respondents’ part is so that they can preclude
petitioners from acquiring regular status based on their employment for one year.
- Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers of security of
tenure and free them from the bondage of uncertainty of tenure woven by some employers into their contracts of
employment. This was exactly the purpose of the legislators in drafting Article 280 of the Labor Code – to
prevent the circumvention by unscrupulous employers of the employee’s right to be secure in his tenure by
indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of
regular employment.
-petitioners, being regular employees of INNODATA, are entitled to security of tenure. In the words of
Article 279 of the Labor Code
- an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges,
with full back wages computed from the time of dismissal up to the time of actual reinstatement. Considering
that reinstatement is no longer possible
the proper award is separation pay equivalent to one month pay for every year of service, to be computed from
the commencement of their employment up to the end of their employment(or when case has been given finality
by the court)
- unless they have exceeded their authority, corporate officers are, as a general rule, not personally liable for
their official acts. in the absence of evidence that they acted with malice or bad faith herein, the Court exempts
the individual respondents, Leo Rabang and Jane Navarette, from any personal liability for the illegal dismissal
of petitioners.
-CA reversed

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