G.R. No. 153832.

March 18, 2005

FILIPINAS PRE-FABRICATED BUILDING SYSTEMS (FILSYSTEMS), INC., and FELIPE A. CRUZ

JR., Petitioners,
vs.
ROGER D. PUENTE,1 Respondent.

DECISION

PANGANIBAN, J.:

Without a valid cause, the employment of project employees cannot be terminated prior to expiration.
Otherwise, they shall be entitled to reinstatement with full back wages. However, if the project or work
is completed during the pendency of the ensuing suit for illegal dismissal, the employees shall be
entitled only to full back wages from the date of the termination of their employment until the actual
completion of the project or work.

The Case

Before us is a Petition for Review2 under Rule 45 of the Rules of Court, seeking to annul and reverse the
April 16, 2002 Decision3 and the May 30, 2002 Resolution4 of the Court of Appeals (CA) in CA-GR SP No.
66756. The assailed Decision disposed as follows:

"WHEREFORE, premises considered, the petition is GRANTED and the decision dated May 18, 2001 and
resolution dated June 29, 2001 of the NLRC are hereby annulled and set aside. [Petitioner] Filsystems,
Inc. is hereby ordered to reinstate [respondent] immediately to his former position without loss of
seniority and privileges with full back wages from the date of his dismissal until his actual reinstatement,
plus 10% of the total monetary award as attorney’s fees."5

The assailed Resolution denied petitioners’ Motion for Reconsideration.

The Facts

The factual antecedents are summarized by the CA as follows:

"[Respondent] avers that he started working with [Petitioner] Filsystems, Inc., a corporation engaged in
construction business, on June 12, 1989; that he was initially hired by [petitioner] company as an
‘installer’; that he was later promoted to mobile crane operator and was stationed at the company
premises at No. 69 Industria Road, Bagumbayan, Quezon City; that his work was not dependent on the
completion or termination of any project; that since his work was not dependent on any project, his
employment with the [petitioner-]company was continuous and without interruption for the past ten
(10) years; that on October 1, 1999, he was dismissed from his employment allegedly because he was a
project employee. He filed a pro forma complaint for illegal dismissal against the [petitioner] company
on November 18, 1999.

"The [petitioner-]company however claims that complainant was hired as a project employee in the
company’s various projects; that his employment contracts showed that he was a project worker with
specific project assignments; that after completion of each project assignment, his employment was
likewise terminated and the same was correspondingly reported to the DOLE.
"Labor Arbiter Veneranda C. Guerrero dismissed the complaint for lack of merit, ruling thus:

‘WHEREFORE, premises considered, judgment is hereby rendered dismissing the complaint for illegal
dismissal for lack of merit.

‘[Petitioner] Filsystems, Inc. is hereby ordered to pay complainant Roger D. [F]uente the amount of
FOUR THOUSAND TWO HUNDRED TWELVE PHILIPPINE PESOS (₱4,212.00) representing his pro-rata 13th
month pay for 1999, plus ten percent (10%) thereof as and for attorney’s fees.

‘SO ORDERED.’

"[Respondent] appealed. However, [the] National Labor Relations Commission (NLRC) dismissed the
same and the subsequent motion for reconsideration."6

Ruling of the Court of Appeals

The Court of Appeals reversed the NLRC and the labor arbiter thus:

"The employment contracts signed by petitioner Puente do not have the specified duration for each
project contrary to the provision of Article 280 of the Labor Code, nor did petitioner work in the project
sites, but had always been assigned at the company plant attending to the maintenance of all mobile
cranes of the company, performing tasks vital and desirable in the employer’s usual business for ten (10)
continuous years."7

The CA concluded that respondent was a regular employee of petitioners.

Hence, this Petition.8

The Issues

In its Memorandum, petitioners raise the following issues for our consideration:

"1. Whether or not the Court of Appeals erred and committed grave abuse of discretion in finding that:

‘The employment contracts signed by private respondent Puente do not have the specified duration for
each project contrary to the provision of Art. 280 of the Labor Code, nor did petitioner work in the
project sites, but had always been assigned at the company plant attending to the maintenance of all
mobile cranes of the company, performing tasks vital and desirable in the company’s usual business for
ten (10) continuous years.’

"2. Whether or not the Court a quo erred and committed grave abuse of discretion in finding that the
private respondent is a regular employee and not a project employee?

"3. Whether or not the Court a quo erred and committed grave abuse of discretion in giving due course
to the private respondent’s petition for certiorari under Rule 65 of the 1997 Rules on Civil Procedure;
and in annulling and setting aside the Decision dated May 18, 2001 and the Resolution dated June 29,
2001 of the NLRC?

"4. Whether or not the Court a quo erred and committed grave abuse of discretion in ruling that the
evidence submitted by the petitioners proving that there was retrenchment program implemented by
the petitioner company, as a defense that the private respondent’s services was terminated due to
absence if not lack of construction project contract, where he may be redeployed or reinstated?

"5. Whether or not the Court a quo erred and committed grave abuse of discretion in ordering the
reinstatement of the private respondent, with full back wages plus payment of 10% attorney’s fees?"9

In the main, the issues boil down to (1) whether Roger Puente is a project employee, and (2) whether he
is entitled to reinstatement with full back wages.

This Court’s Ruling

The Petition is partly meritorious.

First Issue:

Project Employee

In general, the factual findings of the Court of Appeals are binding on the Supreme Court. One exception
to this rule, however, is when the factual findings of the former are contrary to those of the trial court
(or the lower administrative body, as the case may be).10 The question of whether respondent is a
regular or a project employee is essentially factual in nature; nonetheless, the Court is constrained to
resolve it due to the incongruent findings of the NLRC and the CA.

The Labor Code defines regular, project and casual employees as follows:

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

With particular reference to the construction industry, to which Petitioner Filsystems belongs,
Department (of Labor and Employment) Order No. 19,11 Series of 1993, states:

2.1 Classification of employees. – The employees in the construction industry are generally categorized
as a) project employees and b) non-project employees. Project employees are those employed in
connection with a particular construction project or phase thereof and whose employment is co-
terminous with each project or phase of the project to which they are assigned.

xxxxxxxxx

2.2 Indicators of project employment. – Either one or more of the following circumstances, among
other, may be considered as indicators that an employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment
agreement and is made clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection with the particular
project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his services to any
other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the
Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace
within 30 days following the date of his separation from work, using the prescribed form on employees’
terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project
employee as practiced by most construction companies.

The above-quoted provisions make it clear that a project employee is one whose "employment has been
fixed for a specific project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season." In D.M. Consunji, Inc. v.
NLRC,12 this Court has ruled that "the length of service of a project employee is not the controlling test
of employment tenure but whether or not ‘the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the
engagement of the employee.’"

In the present case, the contracts of employment13 of Puente attest to the fact that he was hired for
specific projects. His employment was coterminous with the completion of the projects for which he had
been hired. Those contracts expressly provided that his tenure of employment depended on the
duration of any phase of the project or on the completion of the construction projects. Furthermore,
petitioners regularly submitted to the labor department reports of the termination of services of project
workers. Such compliance with the reportorial requirement confirms that respondent was a project
employee.14

With regard specifically to the last employment contract executed by the parties, a contract that
respondent accepted on August 26, 1996, we find that he worked at the site of the World Finance Plaza
project. That he did is amply proven by the Affidavit of Eduardo Briagas,15 another employee who was
also stationed at the World Finance Plaza project, as well as by respondent’s Travel Trip Reports.16

Furthermore, respondent’s Complaint17 specified the address of Filsystems, as "69 INDUSTRIA ROAD,

B.BAYAN Q.C.," but specified his place of work as "PROJECT TO PROJECT." These statements, coupled
with the other pieces of evidence presented by petitioners, convinces the Court that -- contrary to the
subsequent claims of respondent -- he performed his work at the project site, not at the company’s
premises.

That his employment contract does not mention particular dates that establish the specific duration of
the project does not preclude his classification as a project employee. This fact is clear from the
provisions of Clause 3.3(a) of Department Order No. 19, which states:

a) Project employees whose aggregate period of continuous employment in a construction company is

at least one year shall be considered regular employees, in the absence of a "day certain" agreed upon
by the parties for the termination of their relationship. Project employees who have become regular
shall be entitled to separation pay.

A "day" as used herein, is understood to be that which must necessarily come, although is may not be
known exactly when. This means that where the final completion of a project or phase thereof is in fact
determinable and the expected completion is made known to the employee, such project employee may
not be considered regular, notwithstanding the one-year duration of employment in the project or
phase thereof or the one-year duration of two or more employments in the same project or phase of
the object. (Italicization and emphasis supplied)

Respondent’s employment contract provides as follows:

"x x x employment, under this contract is good only for the duration of the project unless employee’s
services is terminated due to completion of the phase of work/section of the project or piece of work to
which employee is assigned:

"We agree clearly that employment is on a Project to Project Basis and that upon termination of services
there is no separation pay:

POSITION : Mobil Crane Operator

PROJECT NAME : World Finance Plaza

LOCATION : Meralco Ave., Ortigas Center, Pasig City

ASSIGNMENT : Lifting & Hauling of Materials

(Phase of Work/Piece of Work)"18

Evidently, although the employment contract did not state a particular date, it did specify that the
termination of the parties’ employment relationship was to be on a "day certain" -- the day when the
phase of work termed "Lifting & Hauling of Materials" for the "World Finance Plaza" project would be
completed. Thus, respondent cannot be considered to have been a regular employee. He was a project
employee.

That he was employed with Petitioner Filsystems for ten years in various  projects did not ipso
facto make him a regular employee, considering that the definition of regular employment in Article 280
of the Labor Code makes a specific exception with respect to project employment. The mere rehiring of
respondent on a project-to-project basis did not confer upon him regular employment status.19 "The
practice was dictated by the practical consideration that experienced construction workers are more
preferred."20 It did not change his status as a project employee.

Second Issue:

Reinstatement

In termination cases, the burden of proving that an employee has been lawfully dismissed lies with the
employer.21 Thus, employers who hire project employees are mandated to state and, once its veracity is
challenged, to prove the actual basis for the latter’s dismissal.22
In the present case, petitioners claim that respondent’s services were terminated due to the completion
of the project.23 There is no allegation or proof, however, that the World Finance Plaza project -- or the
phase of work therein to which respondent had been assigned -- was already completed by October 1,
1999, the date when he was dismissed. The inescapable presumption is that his services were
terminated for no valid cause prior to the expiration of the period of his employment; hence, the
termination was illegal. Reinstatement with full back wages, inclusive of allowances and other benefits
or their monetary equivalents -- computed from the date of his dismissal until his reinstatement -- is
thus in order.24

However, if indeed the World Finance Plaza project has already been completed during the pendency of
this suit, then respondent -- being a project employee -- can no longer be reinstated.25 Instead, he shall
entitled to the payment of his salary and other benefits corresponding to the unexpired portion of his
employment,26 specifically from the time of the termination of his employment on October 1, 1999, until
the date of the completion of the World Finance Plaza project.

WHEREFORE, the Petition is PARTLY GRANTED. Respondent Roger D. Puente is DECLARED to be a

project employee, whose employment was terminated without any valid cause prior to its expiration
and is thus entitled to reinstatement with full back wages. However, if reinstatement is no longer
possible due to the completion of the World Finance Plaza project during the pendency of this case,
Petitioner Filipinas Pre-Fabricated Building Systems (Filsystems), Inc. is ORDERED to PAY respondent the
equivalent of his salaries and other employment benefits, computed from October 1, 1999, until the
date of the project’s actual completion. No costs.

SO ORDERED.
G.R. No. 157788. March 08, 2005

SAINT MARY’S UNIVERSITY, represented by its President REV. JESSIE M. HECHANOVA,

CICM, Petitioners,
vs.
COURT OF APPEALS (Former Special Twelfth Division), NATIONAL LABOR RELATIONS COMMISSION
(Second Division) and MARCELO A. DONELO, Respondents.

DECISION

QUISUMBING, J.:

For review on certiorari are the Decision1 dated May 21, 2002 and the Resolution2 dated February 12,
2003 of the Court of Appeals in CA-G.R. SP No. 63240 which dismissed the petition for certiorari of St.
Mary’s University and its motion for reconsideration, respectively.

Respondent Marcelo Donelo started teaching on a contractual basis at St. Mary’s University in 1992. In
1995, he was issued an appointment as an Assistant Professor I. Later on, he was promoted to Assistant
Professor III. He taught until the first semester of school year 1999-2000 when the school discontinued
giving him teaching assignments. For this, respondent filed a complaint for illegal dismissal against the
university.

In its defense, petitioner St. Mary’s University showed that respondent was merely a part-time
instructor and, except for three semesters, carried a load of less than eighteen units. Petitioner argued
that respondent never attained permanent or regular status for he was not a full-time teacher. Further,
petitioner showed that respondent was under investigation by the university for giving grades to
students who did not attend classes. Petitioner alleged that respondent did not respond to inquiries
relative to the investigation. Instead, respondent filed the instant case against the university.

The Labor Arbiter ruled that respondent was lawfully dismissed because he had not attained permanent
or regular status pursuant to the Manual of Regulations for Private Schools. The Labor Arbiter held that
only full-time teachers with regular loads of at least 18 units, who have satisfactorily completed three
consecutive years of service qualify as permanent or regular employees. 3

On appeal by respondent, the National Labor Relations Commission (NLRC) reversed the Decision of the
Labor Arbiter and ordered the reinstatement of respondent without loss of seniority rights and
privileges with full backwages from the time his salaries were withheld until actual reinstatement.4 It
held that respondent was a full-time teacher as he did not appear to have other regular remunerative
employment and was paid on a regular monthly basis regardless of the number of teaching hours. As a
full-time teacher and having taught for more than 3 years, respondent qualified as a permanent or
regular employee of the university.

Petitioner sought for reconsideration and pointed out that respondent was also working for the
Provincial Government of Nueva Vizcaya from 1993 to 1996. Nevertheless, the NLRC denied petitioner’s
Motion for Reconsideration. Aggrieved, petitioner elevated the matter to the Court of Appeals, which
affirmed the Decision of the NLRC.

Hence, this petition with a motion for temporary restraining order, alleging that the Court of Appeals
erred in:
…FINDING THAT THE RESPONDENT DONELO ATTAINED A PERMANENT STATUS, THE SAID FINDING
BEING CLEARLY CONTRARY TO THE EVIDENCE AT HAND AND DEVOID OF BASIS IN LAW.

…HOLDING THAT THE TWIN-NOTICE REQUIREMENT IMPOSED BY LAW BEFORE TERMINATION OF

EMPLOYMENT CAN BE LEGALLY EFFECTED MUST BE COMPLIED WITH BY THE PETITIONER.

…AFFIRMING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IN ORDERING THE
PETITIONER TO REINSTATE RESPONDENT DONELO TO HIS FORMER POSITION WITHOUT LOSS OF
SENIORITY RIGHTS AND PRIVILEGES WITH FULL BACKWAGES FROM THE TIME OF HIS DISMISSAL UNTIL
ACTUALLY REINSTATED.5

Plainly, the ultimate questions before us are:

1. Was respondent a full-time teacher?

2. Had he attained permanent status?

3. Was he illegally dismissed?

Petitioner contends that respondent did not attain permanent status since he did not carry a load of at
least 18 units for three consecutive years; and that only full-time teachers can attain permanent status.
Further, since respondent was not a permanent employee, the twin-notice requirement in the
termination of the latter’s employment did not apply.

Respondent argues that, as early as 1995, he had a permanent appointment as Assistant Professor, and
he was a permanent employee regardless of the provisions of the Manual of Regulations for Private
Schools. He asserts that he should not be faulted for not carrying a load of at least 18 units since the
university unilaterally controls his load assignment in the same manner that the university has the
prerogative to shorten his probationary period. He points out also that the present Manual allows full-
time teachers to hold other remunerative positions as long as these do not conflict with the regular
school day. Since he is a permanent employee, respondent insists that petitioner’s failure to give him
the required notices constitutes illegal dismissal.

Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers who
have satisfactorily completed their probationary period shall be considered regular or
permanent.6 Furthermore, the probationary period shall not be more than six consecutive regular
semesters of satisfactory service for those in the tertiary level. 7 Thus, the following requisites must
concur before a private school teacher acquires permanent status: (1) the teacher is a full-time
teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service
must have been satisfactory.8

In the present case, petitioner claims that private respondent lacked the requisite years of service with
the university and also the appropriate quality of his service, i.e., it is less than satisfactory. The basic
question, however, is whether respondent is a full-time teacher.

Section 45 of the 1992 Manual of Regulations for Private Schools provides that full-time academic
personnel are those meeting all the following requirements:

a. Who possess at least the minimum academic qualifications prescribed by the Department under
this Manual for all academic personnel;
b. Who are paid monthly or hourly, based on the regular teaching loads as provided for in the policies,
rules and standards of the Department and the school;

c. Whose total working day of not more than eight hours a day is devoted to the school;

d. Who have no other remunerative occupation elsewhere requiring regular hours of work that will
conflict with the working hours in the school; and

e. Who are not teaching full-time in any other educational institution.

All teaching personnel who do not meet the foregoing qualifications are considered part-time.

A perusal of the various orders of the then Department of Education, Culture and Sports prescribing
teaching loads shows that the regular full-time load of a faculty member is in the range of 15 units to 24
units a semester or term, depending on the courses taught. Part-time instructors carry a load of not
more than 12 units.9

The evidence on record reveals that, except for four non-consecutive terms, respondent generally
carried a load of twelve units or less from 1992 to 1999. There is also no evidence that he performed
other functions for the school when not teaching. These give the impression that he was merely a part-
time teacher.10 Although this is not conclusive since there are full-time teachers who are allowed by the
university to take fewer load, in this case, respondent did not show that he belonged to the latter group,
even after the university presented his teaching record. With a teaching load of twelve units or less, he
could not claim he worked for the number of hours daily as prescribed by Section 45 of the Manual.
Furthermore, the records also indubitably show he was employed elsewhere from 1993 to 1996.

Since there is no showing that respondent worked on a full-time basis for at least three years, he could
not have acquired a permanent status.11 A part-time employee does not attain permanent status no
matter how long he has served the school.12 And as a part-timer, his services could be terminated by the
school without being held liable for illegal dismissal. Moreover, the requirement of twin-notice
applicable only to regular or permanent employees could not be invoked by respondent.

Yet, this is not to say that part-time teachers may not have security of tenure. The school could not
lawfully terminate a part-timer before the end of the agreed period without just cause. But once the
period, semester, or term ends, there is no obligation on the part of the school to renew the contract of
employment for the next period, semester, or term.

In this case, the contract of employment of the respondent was not presented. However, judicial notice
may be taken that contracts of employment of part-time teachers are generally on a per semester or
term basis. In the absence of a specific agreement on the period of the contract of employment, it is
presumed to be for a term or semester. After the end of each term or semester, the school does not
have any obligation to give teaching load to each and every part-time teacher. That petitioner did not
give any teaching assignment to the respondent during a given term or semester, even if factually true,
did not amount to an actionable violation of respondent’s rights. It did not amount to illegal dismissal of
the part-time teacher.

The law, while protecting the rights of the employees, authorizes neither the oppression nor destruction
of the employer.13 And when the law tilts the scale of justice in favor of labor, the scale should never be
so tilted if the result would be an injustice to the employer.14
WHEREFORE, the petition is GRANTED. The Decision dated May 21, 2002 and the Resolution dated
February 12, 2003 of the Court of Appeals in CA-G.R. SP No. 63240, which sustained those of the NLRC,
are NULLIFIED and SET ASIDE. The Decision of the Executive Labor Arbiter of the Regional Arbitration
Branch II, Tuguegarao City, Cagayan, is hereby REINSTATED.

SO ORDERED.
G.R. No. 168052             February 20, 2006

POSEIDON FISHING/TERRY DE JESUS, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and JIMMY S. ESTOQUIA, Respondents.

DECISION

CHICO-NAZARIO, J.:

Article 280 of the Labor Code, in its truest sense, distinguishes between regular and casual employees to
protect the interests of labor. Its language evidently manifests the intent to safeguard the tenurial
interest of the worker who may be denied the rights and benefits due a regular employee by virtue of
lopsided agreements with the economically powerful employer who can maneuver to keep an employee
on a casual status for as long as convenient.1

This petition assails the Decision2 of the Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140
entitled, "Poseidon Fishing/Terry De Jesus v. National Labor Relations Commission and Jimmy S.
Estoquia" which affirmed that of the National Labor Relations Commission (NLRC). The NLRC had
affirmed with modification the Decision dated 5 December 2000 of Labor Arbiter Melquiades Sol D. Del
Rosario in NLRC-NCR Case No. 00-07-03625-00, declaring private respondent to have been illegally
dismissed and entitled to backwages and separation pay.

As thoroughly told by the Court of Appeals and the Labor Arbiter, the particulars are beyond dispute:

Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry. Its various
vessels catch fish in the outlying islands of the Philippines, which are traded and sold at the Navotas Fish
Port. One of its boat crew was private respondent Jimmy S. Estoquia.3 Petitioner Terry de Jesus is the
manager of petitioner company.

Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five years,
he was promoted to Boat Captain. In 1999, petitioners, without reason, demoted respondent from Boat
Captain to Radio Operator of petitioner Poseidon.4 As a Radio Operator, he monitored the daily activities
in their office and recorded in the duty logbook the names of the callers and time of their calls.5

On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he
was able to record the same in the other logbook. Consequently, when he reviewed the two logbooks,
he noticed that he was not able to record the said call in one of the logbooks so he immediately
recorded the 7:25 a.m. call after the 7:30 a.m. entry.6

Around 9:00 o’clock in the morning of 4 July 2000, petitioner Terry de Jesus detected the error in the
entry in the logbook. Subsequently, she asked private respondent to prepare an incident report to
explain the reason for the said oversight.7

At around 2:00 o’clock in the afternoon of that same day, petitioner Poseidon’s secretary, namely Nenita
Laderas, summoned private respondent to get his separation pay amounting to Fifty-Five Thousand
Pesos (₱55,000.00). However, he refused to accept the amount as he believed that he did nothing illegal
to warrant his immediate discharge from work.8
Rising to the occasion, private respondent filed a complaint for illegal dismissal on 11 July 2000 with the
Labor Arbiter, alleging nonpayment of wages with prayer for back wages, damages, attorney’s fees, and
other monetary benefits.

In private respondent’s position paper, he averred that petitioner Poseidon employed him as a Chief
Mate sometime in January 1988. He claimed that he was promoted to the position of Boat Captain five
years after. However, in 1999, he was demoted from Boat Captain to Radio Operator without any reason
and shortly, he was terminated without just cause and without due process of law.

Conversely, petitioners Poseidon and Terry de Jesus strongly asserted that private respondent was a
contractual or a casual employee whose services could be terminated at the end of the contract even
without a just or authorized cause in view of Article 280 of the Labor Code, which provides:

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

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

Petitioners further posited that when the private respondent was engaged, it was made clear to him
that he was being employed only on a "por viaje" or per trip  basis and that his employment would be
terminated at the end of the trip for which he was being hired. As such, the private respondent could
not be entitled to separation pay and other monetary claims.

On 5 December 2000, following the termination of the hearing of the case, the Labor Arbiter decided in
favor of private respondent. The Labor Arbiter held that even if the private respondent was a casual
employee, he became a regular employee after a period of one year and, thereafter, had attained
tenurial security which could only be lost due to a legal cause after observing due process. The
dispositive portion of the Decision reads:

CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding complainant to have been
illegally dismissed and so must immediately be reinstated to his former position as radio operator and
paid by respondent[s] in solidum his backwages which as of December 3, 2000 had already accumulated
in the sum of ₱35,880.00 plus his unpaid one (1) week salary in the sum of ₱1,794.00.

Respondents are further ordered to pay attorney’s fees in a sum equivalent to 10% of the awarded
claims.9

Consequently, the petitioners filed their Memorandum of Appeal with the NLRC for the reversal of the
aforesaid decision. On 24 September 2002, the NLRC affirmed the decision of the Labor Arbiter with the
modification, inter alia, that: (a) the private respondent would be paid his separation pay equivalent to
one-half of his monthly pay for every year of service that he has rendered in lieu of reinstatement; and
(b) an amount equivalent to six months salary should be deducted from his full backwages because it
was his negligence in the performance of his work that brought about his termination. It held:

WHEREFORE, the decision is modified as follows:

1. The amount equivalent to six (6) months salary is to be deducted from the total award of backwages;

2. The respondent is ordered to pay complainant separation pay equivalent to one-half (1/2) month pay
for every year of service counted from 1998; x x x

3. The respondent is ordered to pay complainant’s unpaid wages in the amount of P1,794.00; and

4. Respondent is ordered to pay attorney’s fees in a sum equivalent to ten percent (10%) of the awarded
claims.10

Petitioners moved for the reconsideration of the NLRC decision, but were denied in a Resolution dated
29 August 2003.

Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse of discretion,
but the Court of Appeals found none. The following is the fallo of the decision:

WHEREFORE, the foregoing premises considered, the instant petition is hereby DENIED.11

In a last attempt at vindication, petitioners filed the present petition for

reviewhttp://elibrary.supremecourt.gov.ph/dtSearch/ - _ftn with the following assignment of errors:

I.

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT WAS A REGULAR
EMPLOYEE WHEN IN TRUTH HE WAS A CONTRACTUAL/PROJECT/SEASONAL EMPLOYEE.

II.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT WAS ILLEGALLY
DISMISSED FROM EMPLOYMENT.

III.

THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING THE RESPONDENT A SEASONAL
EMPLOYEE AND APPLYING THE RULING IN RJL MARTINEZ FISHING CORPORATION vs. NLRC THAT "the
activity of fishing is a continuous process and could hardly be considered as seasonal in nature."

IV.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT IS ENTITLED TO
BACKWAGES, SEPARATION PAY, ATTORNEY’S FEES AND OTHER MONETARY BENEFITS.

V.

THE HONORABLE COURT OF APPEALS ERRED IN NOT RESOLVING THE PRAYER FOR THE ISsuance of
preliminary injunction and/or temporary restraining order.12
The fundamental issue entails the determination of the nature of the contractual relationship between
petitioners and private respondent, i.e., was private respondent a regular employee at the time his
employment was terminated on 04 July 2000?

Asserting their right to terminate the contract with private respondent per the "Kasunduan" with him,
petitioners pointed to the provision thereof stating that he was being employed only on a ‘’por
viaje’’  basis and that his employment would be terminated at the end of the trip for which he was being
hired, to wit:

NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA ng mga gawaing magmula sa pag-alis ng

lantsa sa pondohan sa Navotas patungo sa palakayahan; pabalik sa pondohan ng lantsa sa Navotas
hanggang sa paghango ng mga kargang isda.13

Petitioners lament that fixed-term employment contracts are recognized as valid under the law
notwithstanding the provision of Article 280 of the Labor Code. Petitioners theorize that the Civil Code
has always recognized the validity of contracts with a fixed and definite period, and imposes no
restraints on the freedom of the parties to fix the duration of the contract, whatever its object, be it
species, goods or services, except the general admonition against stipulations contrary to law, morals,
good customs, public order and public policy. Quoting Brent School Inc. v. Zamora,14 petitioners are
hamstrung on their reasoning that under the Civil Code, fixed-term employment contracts are not
limited, as they are under the present Labor Code, to those that by their nature are seasonal or for
specific projects with pre-determined dates of completion as they also include those to which the
parties by free choice have assigned a specific date of termination. Hence, persons may enter into such
contracts as long as they are capacitated to act, petitioners bemoan.

We are far from persuaded by petitioners’ ratiocination.

Petitioners’ construal of Brent School, Inc. v. Zamora, has certainly gone astray. The subject of scrutiny in
the Brent case was the employment contract inked between the school and one engaged as its Athletic
Director. The contract fixed a specific term of five years from the date of execution of the agreement.
This Court upheld the validity of the contract between therein petitioner and private respondent, fixing
the latter’s period of employment. This Court laid down the following criteria for judging the validity of
such fixed-term contracts, to wit:

Accordingly, and since the entire purpose behind the development of legislation culminating in the
present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent
circumvention of the employee’s right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed to refer to the substantive evil that the
Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should
have no application to instances where a fixed period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter. Unless thus limited in its
purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences.15 (Emphasis supplied.)

Brent cited some familiar examples of employment contracts which may neither be for seasonal work
nor for specific projects, but to which a fixed term is an essential and natural appurtenance, i.e.,
overseas employment contracts, appointments to the positions of dean, assistant dean, college
secretary, principal, and other administrative offices in educational institutions, which are by practice or
tradition rotated among the faculty members, and where fixed terms are a necessity without which no
reasonable rotation would be possible.16 Thus, in Brent, the acid test in considering fixed-term contracts
as valid is: if from the circumstances it is apparent that periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be disregarded for being contrary to public
policy.

On the same tack as Brent, the Court in Pakistan International Airlines Corporation v. Ople,17 ruled in this
wise:

It is apparent from Brent School that the critical consideration is the presence or absence of a substantial
indication that the period specified in an employment agreement was designed to circumvent the
security of tenure of regular employees which is provided for in Articles 280 and 281 of the Labor Code.
This indication must ordinarily rest upon some aspect of the agreement other than the mere
specification of a fixed term of the employment agreement, or upon evidence aliunde of the intent to
evade.

Consistent with the pronouncements in these two earlier cases, the Court, in Cielo v. National Labor
Relations Commission,18 did not hesitate to nullify employment contracts stipulating a fixed term after
finding that "the purpose behind these individual contracts was to evade the application of the labor
laws."

In the case under consideration, the agreement has such an objective - to frustrate the security of
tenure of private respondent- and fittingly, must be nullified. In this case, petitioners’ intent to evade
the application of Article 280 of the Labor Code is unmistakable. In a span of 12 years, private
respondent worked for petitioner company first as a Chief Mate, then Boat Captain, and later as Radio
Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon. His work
was, therefore, necessary and important to the business of his employer. Such being the scenario
involved, private respondent is considered a regular employee of petitioner under Article 280 of the
Labor Code, the law in point, which provides:

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

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

Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, note
that in the case at bar, the terms of employment of private respondent as provided in the Kasunduan
was not only vague, it also failed to provide an actual or specific date or period for the contract. As
adroitly observed by the Labor Arbiter:

There is nothing in the contract that says complainant, who happened to be the captain of said vessel, is
a casual, seasonal or a project worker. The date July 1 to 31, 1998 under the heading "Pagdating" had
been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of
the status of employment of the crew of the vessel.

Actually, the exception under Article 280 of the Labor Code in which the respondents have taken refuge
to justify its position does not apply in the instant case. The proviso, "Except where the employment has
been fixed for a specific project or undertaking the completion or determination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season." (Article 280
Labor Code), is inapplicable because the very contract adduced by respondents is unclear and uncertain.
The kasunduan does not specify the duration that complainant had been hired x x x.19 (Emphasis
supplied.)

Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent
was repeatedly hired as part of the boat’s crew and he acted in various capacities onboard the vessel. In
Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission,20 we held that
the test to determine whether employment is regular or not is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or trade of the employer.
And, if the employee has been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need for its performance
as sufficient evidence of the necessity, if not indispensability of that activity to the business. 21

In Bustamante v. National Labor Relations Commission,22 the Court expounded on what are regular
employees under Article 280 of the Labor Code, viz:

It is undisputed that petitioners were illegally dismissed from employment. Article 280 of the Labor
Code, states:

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

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

This provision draws a line between regular and casual employment, a distinction however often
abused by employers. The provision enumerates two (2) kinds of employees, the regular employees
and the casual employees. 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 whether such service is continuous or
broken.23

Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate,
Boat Captain, and Radio Operator. In petitioners’ interpretation, however, this act of hiring and re-hiring
actually highlight private respondent’s contractual status saying that for every engagement, a fresh
contract was entered into by the parties at the outset as the conditions of employment changed when
the private respondent filled in a different position. But to this Court, the act of hiring and re-hiring in
various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private
respondent. Such pattern of re-hiring and the recurring need for his services are testament to the
necessity and indispensability of such services to petitioners’ business or trade.24

Petitioners would brush off private respondent’s length of service by stating that he had worked for the
company merely for several years25 and that in those times, his services were not exclusive to
petitioners. On the other hand, to prove his claim that he had continuously worked for petitioners from
1988 to 2000, private respondent submitted a copy of his payroll26 from 30 May 1988 to October 1988
and a copy of his SSS Employees Contributions27 as of the year 2000. These documents were submitted
by private respondent in order to benchmark his claim of 12 years of service. Petitioners, however,
failed to submit the pertinent employee files, payrolls, records, remittances and other similar
documents which would show that private respondent’s work was not continuous and for less than 12
years. Inasmuch as these documents are not in private respondent’s possession but in the custody and
absolute control of petitioners, their failure to refute private respondent’s evidence or even
categorically deny private respondent’s allegations lead us to no other conclusion than that private
respondent was hired in 1988 and had been continuously in its employ since then. Indeed, petitioners’
failure to submit the necessary documents, which as employers are in their possession, gives rise to the
presumption that their presentation is prejudicial to its cause.28

To recapitulate, it was after 12 long years of having private respondent under its wings when petitioners,
possibly sensing a brewing brush with the law as far as private respondent’s employment is concerned,
finally found a loophole to kick private respondent out when the latter failed to properly record a 7:25
a.m. call. Capitalizing on this faux pas, petitioner summarily dismissed private respondent. On this note,
we disagree with the finding of the NLRC that private respondent was negligent on account of his failure
to properly record a call in the log book. A review of the records would ineluctably show that there is no
basis to deduct six months’ worth of salary from the total separation pay that private respondent is
entitled to. We note further that the NLRC’s finding clashes with that of the Labor Arbiter which found
no such negligence and that such inadvertence on the part of private respondent, at best, constitutes
simple negligence punishable only with admonition or suspension for a day or two.
As the records bear out, private respondent himself seasonably realized his oversight and in no time
recorded the 7:25 a.m. call after the 7:30 a.m. call. Gross negligence under Article 282 of the Labor
Code, 29 as amended, connotes want of care in the performance of one’s duties, while habitual neglect
implies repeated failure to perform one’s duties for a period of time, depending upon the
circumstances.30 Here, it is not disputed that private respondent corrected straight away the recording
of the call and petitioners failed to prove the damage or injury that such inadvertence caused the
company. We find, as the Labor Arbiter31 had found, that there is no sufficient evidence on record to
prove private respondent’s negligence, gross or simple for that matter, in the performance of his duties
to warrant a reduction of six months salary from private respondent’s separation pay. Moreover,
respondent missed to properly record, not two or three calls, but just a single call. It was also a first
infraction on the part of private respondent, not to mention that the gaffe, if at all, proved to be
innocuous. Thus, we find such slip to be within tolerable range. After all, is it not a rule32 that in carrying
out and interpreting the provisions of the Labor Code and its implementing regulations, the
workingman's welfare should be primordial?

Petitioners next assert that deep-sea fishing is a seasonal industry because catching of fish could only be
undertaken for a limited duration or seasonal within a given year. Thus, according to petitioners, private
respondent was a seasonal or project employee.

We are not won over.

As correctly pointed out by the Court of Appeals, the "activity of catching fish is a continuous process
and could hardly be considered as seasonal in nature."33 In Philex Mining Corp. v. National Labor
Relations Commission,34 we defined project employees as those workers hired (1) for a specific project
or undertaking, and (2) the completion or termination of such project has been determined at the time
of the engagement of the employee. The principal test for determining whether particular employees
are "project employees" as distinguished from "regular employees," is whether or not the "project
employees" were assigned to carry out a "specific project or undertaking," the duration and scope of
which were specified at the time the employees were engaged for that project. In this case, petitioners
have not shown that private respondent was informed that he will be assigned to a "specific project or
undertaking." As earlier noted, neither has it been established that he was informed of the duration and
scope of such project or undertaking at the time of their engagement.

More to the point, in Maraguinot, Jr. v. National Labor Relations Commission,35 we ruled that once a
project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the
same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer, then the employee must be deemed a
regular employee.

In fine, inasmuch as private respondent’s functions as described above are no doubt "usually necessary
or desirable in the usual business or trade" of petitioner fishing company and he was hired continuously
for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular
employee. Being one, private respondent’s dismissal without valid cause was illegal. And, where illegal
dismissal is proven, the worker is entitled to back wages and other similar benefits without deductions
or conditions.36
Indeed, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of some of our
entrepreneurs, primarily aimed at maximizing their return on investments at the expense of the lowly
workingman.37

WHEREFORE, the present petition is hereby DENIED. The Decision of the Court of Appeals dated 14
March 2005 in CA-G.R. SP No. 81140 is hereby AFFIRMED WITH MODIFICATION by deleting the
reduction of an amount equivalent to six months of pay from private respondent’s separation pay. The
case is remanded to the Labor Arbiter for further proceedings solely for the purpose of determining the
monetary liabilities of petitioners in accordance with the decision. The Labor Arbiter is ORDERED to
submit his compliance thereon within thirty (30) days from notice of this decision, with copies furnished
to the parties. Costs against petitioners.

SO ORDERED.
G.R. No. 149985             May 5, 2006

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., Petitioner,

vs.
ROSALINA C. ARCEO,* Respondent.

RESOLUTION

CORONA, J.:

This is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure assailing the decision1 of
the Court of Appeals (CA) dismissing the petition for certiorari filed by petitioner.

In May 1990, respondent Rosalina Arceo (Arceo) applied for the position of telephone operator with
petitioner Philippine Long Distance Telephone Company, Inc. – Tarlac Exchange (PLDT). She, however,
failed the pre-employment qualifying examination. Having failed the test, Arceo requested PLDT to allow
her to work at the latter’s office even without pay. PLDT agreed and assigned her to its commercial
section where she was made to perform various tasks like photocopying documents, sorting out
telephone bills and notices of disconnection, and other minor assignments and activities. After two
weeks, PLDT decided to pay her the minimum wage.

On February 15, 1991, PLDT saw no further need for Arceo’s services and decided to fire her but,
through the intervention of PLDT’s commercial section supervisor, Mrs. Beatriz Mataguihan, she was
recommended for an on-the-job training on minor traffic work. When she failed to assimilate traffic
procedures, the company transferred her to auxiliary services, a minor facility.

Subsequently, Arceo took the pre-qualifying exams for the position of telephone operator two more
times but again failed in both attempts.

Finally, on October 13, 1991, PLDT discharged Arceo from employment. She then filed a case for illegal
dismissal before the labor arbiter.2 On May 11, 1993, the arbiter ruled in her favor. PLDT was ordered to
reinstate Arceo to her "former position or to an equivalent position." This decision became final and
executory.

On June 9, 1993, Arceo was reinstated as casual employee with a minimum wage of P106 per day. She
was assigned to photocopy documents and sort out telephone bills.

On September 3, 1996 or more than three years after her reinstatement, Arceo filed a complaint for
unfair labor practice, underpayment of salary, underpayment of overtime pay, holiday pay, rest day pay
and other monetary claims. She alleged in her complaint that, since her reinstatement, she had yet to be
regularized and had yet to receive the benefits due to a regular employee.

On August 18, 1997, labor arbiter Dominador B. Saludares ruled that Arceo was already qualified to
become a regular employee. He also found that petitioner denied her all the benefits and privileges of a
regular employee. The dispositive portion of his decision read:

WHEREFORE, premises considered, judgment is hereby rendered declaring respondent guilty of

wanton disregard of the right of herein complainant to become a regular employee. Concomitantly,
respondent is hereby ordered to pay complainant the following accrued benefits and privileges from
May 11, 1993 up to the present:
1avvphil.net

1. Underpayment -------- P181,395.00

2. Overtime pay -------- 2,598.00

3. Premium pay -------- 753.00

4. Allowance for Uniform -------- 20,000.00

5. Cash gift -------- 9,000.00

6. 13th month pay -------- 45,946.17

7. Mid-year bonus -------- 14,884.57

8. Longevity pay -------- 5, 314.50

9. Sick leave -------- 6,354.30

10. Rice Subsidy -------- 27,250.00

11. Zero backlog -------- 2,000.00

  Total P316,496.24

Likewise, respondent is hereby ordered to pay attorney’s fees in the sum of P31,649.62 which is
equivalent to ten [percent] (10%) of the amount awarded to complainant.

The claim for damages is dismissed for lack of merit.3 (emphasis supplied)

The National Labor Relations Commission (NLRC) took cognizance of the case on appeal. On November
28, 1997, it affirmed the decision of the labor arbiter only insofar as it found Arceo eligible to become a
regular employee. With respect to her monetary claims, the NLRC remanded the case to the arbiter for
reception of evidence.4 It held:

It is evidently a facetious averment emanating from the respondent that the complainant should forever
remain a casual employee. Not only is such argument wanting in merit, it clearly goes against the
principle that the conferment of regular status to an employee is by operation of law. xxx

With respect to the money claims, it is our opinion that the complainant is not entitled thereto insofar
as her claims for 1993 is concerned for having been filed beyond the three year prescriptive period.
However, as it concerns the claims for the period 1994 to 1996, it is Our view that the complainant is
entitled, not only because it is within the prescriptive period but also on account of the continuous and
unabated violation of the respondent in regard to the deprivation to the complainant not only of her
rightful status as a regular employee but more particularly to the grant of the appropriate salaries and
benefits.5
PLDT sought a reconsideration of the decision but the NLRC rejected it for lack of merit.

Rebuffed, PLDT went to the CA via a petition for certiorari6 and ascribed grave abuse of discretion on the
part of the NLRC for considering Arceo a regular employee by operation of law.

On June 29, 2001, the CA affirmed the contested decision of the NLRC. It held:

xxx It is doctrinaire that in determining what constitutes regular employment, what is considered [as]
the reasonable connection between the particular activity performed by the employee in relation to
the usual business or trade of the employer, i.e. if the work is usually necessary or desirable in the
usual business or trade of the employer. xxx And even granting the argument of petitioner that the
nature of Arceo’s work is casual or temporary, still she had been converted into a regular employee by
virtue of the proviso in the second paragraph of Article 280 for having worked with PLDT for more
than one (1) year.7 (emphasis supplied)

The CA likewise denied PLDT’s motion for reconsideration. Hence, this petition.

PLDT argues that while Article 280 of the Labor Code "regularizes" a casual employee who has rendered
at least one year of service (whether continuous or broken) the proviso is subject to the condition that
the employment subsists or the position still exists. Even if Arceo had rendered more than one year of
service as a casual employee, PLDT insisted that this fact alone would not automatically make her a
regular employee since her position had long been abolished. PLDT also argues that it would be an even
greater error if Arceo were to be "regularized" as a telephone operator since she repeatedly failed the
qualifying exams for that position.

Thus, the main issue in this case: is Arceo eligible to become a regular employee of PLDT? Yes.

Article 280 of the Labor Code, as amended, provides:

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

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

Under the foregoing provision,

A REGULAR EMPLOYEE IS (1) ONE WHO IS EITHER ENGAGED TO PERFORM ACTIVITIES THAT ARE
NECESSARY OR DESIRABLE IN THE USUAL TRADE OR BUSINESS OF THE EMPLOYER OR

(2) A CASUAL EMPLOYEE WHO HAS RENDERED AT LEAST ONE YEAR OF SERVICE, WHETHER
CONTINUOUS OR BROKEN, WITH RESPECT TO THE ACTIVITY IN WHICH HE IS EMPLOYED.
Under the first criterion, respondent is qualified to be a regular employee. Her work, consisting mainly
of photocopying documents, sorting out telephone bills and disconnection notices, was certainly
"necessary or desirable" to the business of PLDT. But even if the contrary were true, the uncontested
fact is that she rendered service for more than one year as a casual employee. Hence, under the second
criterion, she is still eligible to become a regular employee.

Petitioner’s argument that respondent’s position has been abolished, if indeed true, does not preclude
Arceo’s becoming a regular employee. The order to reinstate her also included the alternative to
reinstate her to "a position equivalent thereto." Thus, PLDT can still "regularize" her in an equivalent
position.

Moreover, PLDT’s argument does not hold water in the absence of proof that the activity in which Arceo
was engaged (like photocopying of documents and sorting of telephone bills) no longer subsists. Under
Article 280, any employee who has rendered at least one year of service "shall be considered a regular
employee with respect to the activity in which he is employed and his employment shall continue while
such activity exists." For PLDT’s failure to show that the activity undertaken by Arceo has been
discontinued, we are constrained to confirm her "regularization" in that position.

From what date will she be entitled to the benefits of a regular employee? Considering that she has
already worked in PLDT for more than one year at the time she was reinstated, she should be entitled to
all the benefits of a regular employee from June 9, 1993 ― the day of her actual reinstatement.

PLDT’s other contention that the "regularization" of respondent as telephone operator was not possible
since she failed in three qualifying exams for that position is also untenable. It is understood that she
will be regularized in the position she held prior to the filing of her complaint with the labor arbiter, or, if
that position was already abolished, to an equivalent position. The position of telephone operator was
never even considered in any of the assailed decisions of the labor arbiter, the NLRC or the CA.

WHEREFORE, this petition is DENIED.

Costs against petitioner.

SO ORDERED.