Article 280 of the Labor Code reads in full:

Article 280. Regular and Casual Employment. The provisions of written

agreement to the contrar notwithstanding and regardless of the oral
agreement of the parties! an emploment shall be deemed to be regular
where the emploee has been engaged to perform activities which are
usuall necessar or desirable in the usual business or trade of the
emploer! e"cept where the emploment has been #"ed for a speci#c
pro$ect or underta%ing the completion or termination of which has been
determined at the time of the engagement of the emploee or where the
wor% or services to be performed is seasonal in nature and the emploment
is for the duration of the season.
An emploment shall be deemed to be casual if it is not covered b the
preceding paragraph: &rovided! That! an emploee who has rendered at
least one ear of service whether such service is continuous or bro%en! shall
be considered a regular emploee with respect to the activit in which he is
emploed and his emploment shall continue while such actuall e"ists.
G.R. No. 79869 September 5, 1991
FORTUNATO MERCADO vs.NATIONAL LAOR RELATIONS COMMISSION
!NLRC"
This petition originated from a complaint for illegal dismissal! underpament of
wages! non'pament of overtime pa! holida pa! service incentive leave
bene#ts! emergenc cost of living allowances and ()th month pa! #led b above'
named petitioners against private! with *egional Arbitration +ranch ,o. ---!
,ational Labor *elations Commission in .an /ernando! &ampanga.
#et$t$o%er& '((e)e* $% t+e$r ,omp('$%t t+'t t+e- .ere ')r$,/(t/r'(
.or0er& /t$($1e* b- pr$2'te re&po%*e%t& $% '(( the agricultural phases of
wor% on the 0 (12 hectares of rice land and (0 hectares of sugar land owned b
the latter2 that /ortunato 3ercado! .r. and Leon .antillan wor%ed in the farm of
private respondents since (454! /ortunato 3ercado! 6r. and Antonio 3ercado since
(402 and the rest of the petitioners since (470 up to April (404! when the were
'(( '((e)e*(- *$&m$&&e* 3rom t+e$r emp(o-me%t.
&rivate re&po%*e%t A/ror' Cr/1 in her answer to petitioners8 complaint denied
that said petitioners were her regular emploees and instead averred that she
engaged their services! through .pouses /ortunato 3ercado! .r. and *osa
3ercado! their 9mandarols9! that is! persons who ta%e charge in suppling the
number of wor%ers needed b owners of various farms! but onl to do a particular
phase of agricultural wor% necessar in rice production and1or sugar cane
production! after which the would be free to render services to other farm
owners who need their services.
*espondent Labor Arbiter ruled in favor of private respondents and held that
petitioners were %ot re)/('r '%* perm'%e%t .or0er& of the private
respondents! for the nature of the terms and conditions of their hiring reveal that
the were re:uired to perform phases of agricultural wor% for a de#nite period of
time after which their services would be available to an other farm owner.
*espondent Labor Arbiter further held that onl mone claims from ears (407'
(400! (400'(408 and (408'(404 ma be properl considered since all the other
mone claims have prescribed for having accrued beond the three ;)< ear
period prescribed b law. =n grounds of e:uit! however! respondent Labor
Arbiter awarded petitioners #nancial assistance in the amount of Ten Thousand
&esos to be e:uitabl divided among an the petitioners e"cept petitioner
/ortunato 3ercado! 6r. who had manifested his disinterest in the further
prosecution of his complaint against private respondent.

+oth parties #led their appeal with the ,ational Labor *elations Commissions
;,L*C<. &etitioners :uestioned respondent Labor Arbiter8s #nding that the were
not regular and permanent emploees of private respondent Aurora Cru> while
private respondents :uestioned the award of #nancial assistance granted b
respondent Labor Arbiter.
The ,L*C ruled in favor of private respondents a?rming the decision of the
respondent Labor Arbiter! with the modi#cation of the deletion of the award for
#nancial assistance to petitioners.
@ence! This petition.
-..AB: Chether or not petitioners are regular and permanent farm wor%ers and
therefore entitled to the bene#ts which the pra for. And corollar to this!
whether or not said petitioners were illegall dismissed b private respondents.
@eld:
The invariable rule set b the Court in reviewing administrative decisions of the
B"ecutive +ranch of the Dovernment is that the #ndings of fact made therein are
respected! so long as the are supported b substantial evidence! even if not
overwhelming or preponderant and that the administrative decision in matters
within the e"ecutive8s $urisdiction can onl be set aside upon proof of gross abuse
of discretion! fraud! or error of law.
A pro$ect emploee has been de#ned to be one whose emploment has been
#"ed for a speci#c pro$ect or underta%ing! the completion or termination of which
has been determined at the time of the engagement of the emploee! or where
the wor% or service to be performed is seasonal in nature and the emploment is
for the duration of the season '& $% t+e pre&e%t ,'&e.
The second paragraph of Art. 280 demarcates as 9casual9 emploees! all other
emploees who do not fan under the de#nition of the preceding paragraph. The
proviso! in said second paragraph! deems as regular emploees those 9casual9
emploees who have rendered at least one ear of service regardless of the fact
that such service ma be continuous or bro%en.
The general rule is that the o?ce of a proviso is to :ualif or modif onl the
phrase immediatel preceding it or restrain or limit the generalit of the clause
that it immediatel follows. Thus! it has been held that a proviso is to be
construed with reference to the immediatel preceding part of the provision to
which it is attached! and not to the statute itself or to other sections thereof.
Clearl! therefore! petitioners being pro$ect emploees! or! to use the correct
term! seasonal employees, their emploment legall ends upon completion of the
pro$ect or the season. The termination of their emploment cannot and should not
constitute an illegal dismissal.
C@B*B/=*B! the petition is E-.3-..BE. The decision of the ,ational Labor
*elations Commission a?rming that of the Labor Arbiter! under review! is
A//-*3BE.
TACLOBAN SAGKAHAN RICE and CORN MILLS, CO., and/or TAN CHENG PIAN (alias
PIANA), Ownr,petitioners, vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, SECON! !I"ISION,
Private respondents, before their termination on, were all regular employees of petitioners.
Carlito Codilan and Maximo Docena started working in 1!"# $ugenio %o in 1&1# 'eofilo
'rangria in 1&"# and (eynaldo 'ulin in 1)). *n +uly ,!, 1"-, petitioner 'an Cheng
Pian alias .Piana. told private respondents .to look for another /ob. without giving any reason.
Private respondents thus filed their complaint for illegal dismissal. 0t the hearing, private
respondents, who had been employed elsewhere, demanded payment of separation pay
instead of seeking reinstatement.
'he 1abor 0rbiter rendered the Decision ordering petitioners to pay private respondents their
s#ara$ion #a%. Petitioners appealed said decision to the respondent Commission which
dismissed the appeal and affirmed the decision in its (esolution 2ence, this petition
for certiorari.
0ccording to petitioner, the 31(C resolution is against the law and has no factual basis
insofar as it 'he 1abor 0biter4s finding that petitioners became liable for the payment of
termination pay is not /ustified becuase private respondents were orally advised by petitioner
'an Cheng Pian that the miling operation would be temporarily stopped for lack of palay to be
miled for the season and such temporary stoppage of operation is a right which is perfectly
within his management prerogative to preserve the existence of the company.
Petitioner also aver that the private respondents are seasonal workers whose work with the
mill solely depends on the availability of items or products to be worked upon in the mill and
who could, therefore, be temporarily laid5off or considered on leave of absence without pay.
6778$9 :hether or not private respondents are regular employees. 2ence, illegally
dismissed.
2$1D9
0side from their lengthy service, it should be noted that private respondents4 employment
was not fixed for a specific pro/ect or undertaking the completion or termination of which has
been determined at the time of their appointment or hiring. 1ikewise, it must be borne in mind
that petitioners never rebutted private respondents4 claim that they performed activities
usually necessary or desirable in the usual business of the former.
;urthermore, the services performed or to be performed by private respondents are not
seasonal in nature. &'il i$ (a% ) $r* $'a$ $' 'ar+s$ o, #ala% is sasonal, $' (illin-
o#ra$ions w'i.' is $' (ain )*sinss o, #$i$ionrs ar no$ sasonal. 'he fact is that
big rice mills such as the one owned by petitioners continue to operate and do business
throughout the year even if there are only two or three harvest seasons within the year. 6t is a
common practice among farmers and rice dealers to store their palay and to have the same
milled as the need arises. 'hus, the milling operations have no let5up.
0nd finally, considering the number of years that they have worked for petitioners <the lowest
is & years=, private respondents have long attained the status of regular employees as defined
under 0rt. ,"> of the 1abor Code.
& s*s$ain #ri+a$ rs#ondn$s/ .lai( $'a$ $'% wr dis(issd ill-all%. ;or, their
termination does not fall under any of the /ust causes provided for in 0rts. ,", and ,"- of the
1abor Code which read as follows9
0rt. ,",. ? Termination of employer. ? 0n employer may terminate an
employment for any of the following /ust causes9
<a= 7erious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work#
<b= %ross and habitual neglect by the employee of his duties#
<c= ;raud or willful breach by the employee of the trust reposed in him by his
employer or duly authori@ed representative#
<d= Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authori@ed
representative# and
<e= *ther causes analogous to the foregoing. <0s amended by Aatas Pambansa
Alg. 1->.=
8nder 0rt. ,"-, an employer may terminate the employment of any employee by reason of
the installation of labor5saving devices, redundancy, retrenchment to prevent losses or the
closure or cessation of operation of the establishment or undertaking.
6n the case at bar, it has not been established that petitioners4 rice mill has completely ceased
operation. 3either has it been shown that petitioners4 business was losing or having financial
reverses in its operations that necessitated reduction in the work force. 'he evidence on
record thus reveals that private respondents were illegally terminated. T'is is +idn$ ,ro(
$' ,a.$ $'a$ on 0*l% 12, 3456, #ri+a$ rs#ondn$s wr $old )% #$i$ionr Tan C'n-
Plan $o s$o# wor7in- and loo7 ,or o$'r 8o)s wi$'o*$ -i+in- an% +alid rason ,or $'
$r(ina$ion.
'his Court ruled in the case of Unitran Bachelor Express, Inc. v. Olvis citing the case
of Bachiller v. NLRC, " 7C(0 --, <1&! 7C(0 ,&)= that .while the right to dismiss or lay5off
an employee is management4s prerogative, it must be done without abuse of discretion, for
what is at stake is not only private respondents4 position but also their means of livelihood..
'he refusal of private respondents to return to work despite petitioners4 offer of reinstatement
does not constitute voluntary abandonment of work.
:2$($;*($, the (esolution dated December ,", 1") of respondent 31(C is hereby
0;;6(M$D and this petition is accordingly hereby D67M677$D.
HACIEN!A 9ATIMA +s. NATIONAL 9E!ERATION O9 S:GARCANE &ORKERS;9OO!
AN! GENERAL TRA!E, rs#ondn$s.
9ACTS< 6n the course of a labor dispute between the petitioner and respondent union, the
union members were not given work for more than one month. 6n protest, complainants
staged a strike which was however settled upon the signing of a Memorandum of 0greement.
0 conciliation meeting was conducted wherein 1uisa (ombo, (amona (ombo, Aobong
0brega, and Aoboy 7ilva were not considered by the company as employees, and thus may
not be members of the union. 6t was also agreed that a number of other employees will be
reinstated. :hen respondents again reneged on its commitment, complainants filed the
present complaint. 6t is alleged by the petitioners that the above employees are mere
seasonal employees.
ISS:E< :hether or not the seasonal employees have become regular employees.
HEL!< 'he 7C held that for respondents to be excluded from those classified as regular
employees, it is not enough that they perform work or services that are seasonal in nature.
'hey must have also been employed only for the duration of one season. 'he evidence
proves the existence of the first, but not of the second, condition. 'he fact that respondents 55
with the exception of 1uisa (ombo, (amona (ombo, Aobong 0briga and Aoboy 7ilva 55
repeatedly worked as sugarcane workers for petitioners for several years is not denied by the
latter. $vidently, petitioners employed respondents for more than one season. 'herefore, the
general rule of regular employment is applicable.
'he primary standard of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or
business of the employer. 'he test is whether the former is usually necessary or desirable in
the usual trade or business of the employer. 'he connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. 0lso if the employee has been performing the /ob for at least a
year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. 2ence, the employment is considered regular,
but only with respect to such activity and while such activity exists.
Petition is denied.
ELVIRA ABASOLO vs. NATIONAL LABOR RELATIONS COMMISSION
Private respondent 1a 8nion 'obacco (edrying Corporation <18'*(C*=, which is owned by
private respondent 7ee 1in Chan, is engaged in the business of buying, selling, redrying and
processing of tobacco leaves and its by5products. Petitioners have been under the employ of
18'*(C* for several years until their employment with 18'*(C* was abruptly interrupted when
Compania %eneral de 'abaccos de ;ilipinas <also known as '0A0C01$(0= took over 18'*(C*Bs
tobacco operations. 3ew signboards were posted indicating a change of ownership and petitioners
were then asked by 18'*(C* to file their respective applications for employment with
'0A0C01$(0. Petitioners were caught unaware of the sudden change of ownership and its effect
on the status of their employment, though it was alleged that '0A0C01$(0 would assume and
respect the seniority rights of the petitioners.
'he disgruntled employees instituted before the 31(C (egional a complaint
CDE
for separation pay
against private respondent 18'*(C* on the ground that there was a termination of
their employment due to the closure of 18'*(C* as a result of the sale and turnover to
'0A0C01$(0
Private respondent corporation raised as its d,ns $'a$ i$ is =(#$ ,ro( #a%in- s#ara$ion
#a% and dnid $'a$ i$ $r(ina$d $' sr+i.s o, $' #$i$ionrs> and $'a$ i$ s$o##d i$s
o#ra$ions d* $o $' a)sn. o, .a#i$al and o#ra$in- ,*nds .a*sd )% losss. 6t alleged
further that 18'*(C* entered into an agreement with '0A0C01$(0 to take over 18'*(C*Bs
tobacco operations for the year 1- in the hope of recovering from its serious business losses in the
succeeding tobacco seasons and to create a continuing source of income for the petitioners.
C)E
1astly,
it manifested that 18'*(C*, in good faith and with sincerity, is willing to grant reasonable and
ad/usted amounts to the petitioners, as financial assistance, if and when 18'*(C* could recover
from its financial crisis.
*n December ,, 1-, 1abor 0rbiter (icardo 3. *laire@ rndrd 'is d.ision dis(issin- $'
.o(#lain$ ,or la.7 o, (ri$. In *#'oldin- #ri+a$ rs#ondn$ L:TORCO?s #osi$ion, $' La)or
Ar)i$r d.lard $'a$ $' #$i$ionrs ar no$ n$i$ld $o $' )n,i$s *ndr Ar$i.l 156 o, $'
La)or Cod sin. L:TORCO .asd $o o#ra$ d* $o srio*s )*sinss losss and,
furthermore, '0A0C01$(0, the new employer of the petitioner has assumed the seniority rights of
the petitioners and other employment liabilities of the 18'*(C*.
P$i$ionrs a##ald $'n $' d.ision o, $' La)or Ar)i$r $o $' #*)li. rs#ondn$.
6n its *pposition to 0ppeal
E
18'*(C* presented new allegations and a different stand for
denying separation pay. 6t alleged that 18'*(C* never ceased to operate but continues to operate
even after '0A0C01$(0 took over the operations of its redrying plant. Petitioners were not
terminated from employment but petitioners instead refused to work with '0A0C01$(0, despite the
notice to petitioners to return to work in view of 18'*(C*Bs need for workers;urthermore, petitioners
are not entitled to separation pay because petitioners are seasonal workers.
Ado#$in- $'s ar-*(n$s o, #ri+a$ rs#ondn$, $' NLRC, in a Rsol*$ion, a,,ir(d $'
dis(issal o, $' .onsolida$d .o(#lain$s ,or s#ara$ion #a%. Hn., $'is #$i$ion.
6778$9 :hether or not 31(C committed grave abuse of discretion in ruling that petitioners are not
regular employees and therefore not illegally terminated.
2$1D9 yes.
;irst, upon a thorough review, the records speak of a sale to '0A0C01$(0 in 1- under
conditions evidently so .on.ald $'a$ #$i$ionrs wr no$ ,or(all% no$i,id o, $' i(#ndin-
sal o, L:TORCO?s $o)a..o r;dr%in- o#ra$ions $o TABACALERA and its attendant
conseFuences with respect to their continued employment status under '0A0C01$(0. 'hey came
to know of the fact of that sale only when '0A0C01$(0 took over the said tobacco re5drying
operations. 'hus, under those circumstances, the employment of petitioners with respondent
18'*(C* was technically terminated when '0A0C01$(0 took over 18'*(C*Bs tobacco re5drying
operations in 1-.
7econd, private respondent 18'*(C*Bs contention that petitioners themselves severed the
employer5employee relationship by choosing to work with '0A0C01$(0 is bereft of merit considering
that its offer to r$*rn $o wor7 was (ad (or as an a,$r$'o*-'$ w'n #ri+a$ rs#ondn$
L:TORCO la$r rali@d i$ s$ill 'ad $o)a..o la+s ,or #ro.ssin- and rdr%in-.
'he fact that petitioners ultimately chose to work with '0A0C01$(0 is not adverse to petitionersB
cause. 'o eFuate the more stable work with '0A0C01$(0 and the temporary work with 18'*(C*
is illogical. PetitionersB untimely separation in 18'*(C* was not of their own making and therefore,
not construable as resignation therefrom inasmuch as resignation must be voluntary and made with
the intention of relinFuishing the office, accompanied with an act of relinFuishment.
C,DE
'hird, the test of whether or not an employee is a regular employee has been laid down in De
Leon v. NLRC,
'he test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. 'he connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular business or trade in its
entirety. 0lso if the employee has been performing the /ob for at least a year, even if the
performance is not continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. 2ence, the employment is considered
regular, but only with respect to such activity, and while such activity exists.
6n the case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as
petitioners have served the company for many years, some for over ,> years, performing services
necessary and indispensable to 18'*(C*Bs business, serve as badges of regular employment.
Moreover, the fact that petitioners do not work continuously for one whole year but only for the
duration of the tobacco season does not detract from considering them in regular employment since
in a litany of cases this Court has already settled that sasonal wor7rs w'o ar .alld $o wor7
,ro( $i( $o $i( and ar $(#oraril% laid o,, d*rin- o,,;sason ar no$ s#ara$d ,ro( sr+i.
in said #riod, )*$ ar (rl% .onsidrd on la+ *n$il r;(#lo%d.
Private respondentBs reliance on the case of ercar!o v. NLRC is misplaced considering that
since in said case of erca!o, although the respondent company therein consistently availed of the
services of the petitioners therein from year to year, it was clear that petitioners therein were not in
respondent companyBs regular employ.
0ll the foregoing considered, the public respondent 31(C in the case at bar erred in its total
affirmance of the dismissal of the consolidated complaint, for separation pay, against private
respondents 18'*(C* and 7ee 1in Chan considering that petitioners are regular seasonal
employees entitled to the benefits of 0rticle ,"- of the 1abor Code which applies to closures or
cessation of an establishment or undertaking, whether it be a complete or partial cessation or closure
of business operation.
&HERE9ORE, the petition is hereby %(03'$D, and the assailed (esolutions dated +uly &,
1D and 7eptember ,-, 1D of public respondent 31(C are ($G$(7$D and 7$' 076D$.
7ometime in 1)1, private respondent Peronila was employed as a driver of Pantranco 3orth
$xpress, 6nc., a domestic corporation engaged in the public transportation business as a
common carrier, and of which its co5petitioner 0belardo de 1eon is a manager.
6n 1)-, Peronila was administratively investigated by the corporation for his absence from
work of more than two and one5half months without leave. 0ccording to an investigation report
of petitioners4 area manager, dated March 1>, 1)-, Peronila claimed that he went on
absence without leave from his work from 3ovember 1, 1), up to ;ebruary 1&, 1)- which
was date of the investigation, or one hundred seven calendar days continuously, because .he
went to Cotabato, Mindanao to visit his dead grandfather during the period of his unofficial
absence..
1
;inding the belated explanation of Peronila insufficient, the petitioner declared that private
respondent had .grossly violated the provisions of <its= existing company policies, CG' Policy
3o. )151>,. and it conseFuently .dismissed the respondent from service upon receipt of the
approved clearance from the 31(C..
6
6n an order
A
dated March ,>, 1)-, Mediator5;actfinder 1oreto G. Poblete of the 3ational
(elations Commission, (egional *ffice 3o. 66 in 'uguegarao, Cagayan, affirmed the dismissal
made by petitioner for being duly supported by the evidence and made in accordance with
law.
;ifteen years after such termination of his employment, Peronila reappeared in 1"" and
implored petitioner to reconsider his dismissal, which plea was initially denied by petitioner.
2owever, due to insistent appeals by Peronila, petitioner eventually acceded and hired him as
a driver, but on a contractual basis for a fixed period of one month.
2
'he terms and conditions of that new employment on a contractual basis are contained in a
letter, dated 0pril !, 1"", signed by the general manager of the company and voluntarily
conformed to by Peronila, thus9
'his will confirm your assignment as Driver5Aaler 1ine on a contractual basis under the
following terms and conditions9
1. $;;$C'6G6'H
'his assignment shall take effect on 0pril !, 1"" and shall be for a period of one month.
,. ;$$
Hou shall receive a compensation of P&D.>>Iday.
-. 2*8(7 *; :*(J
Hou shall work in accordance with the schedule given by your immediate supervisor.
D. '$(M630'6*3
'his contract is automatically terminated after one <1= month or at the close of office hours on
May !, 1"".
!. M67C$1103$*87
'here is no employer5employee relationship between us hence you are not entitled to any privilege of an employee vi"9
sick leave, vacation leave, holiday pay, overtime pay and others.
B
Aarely fifteen days from such employment as a contractual driver, or on 0pril ,>, 1"", private
respondent was involved in a vehicular mishap in 3ueva Gi@caya wherein the bus he was
driving hit another vehicle.
C
0fter an administrative investigation conducted by petitioner
corporation, Peronila was found guilty thereof, hence his employment contract was terminated
and was no longer renewed thereafter.
*n +anuary 1", 1", private respondent filed a case for illegal dismissal against petitioner in
the 0rbitration Aranch of the 31(C53C( wherein he argued that he was refused assignment
after May !, 1"", which refusal was tantamount to constructive dismissal. 0ccordingly, he
sought his reinstatement and the payment of his back wages.
5
1abor 0rbiter Patricio P. 1ibo5on dismissed the case on ;ebruary 1,, 11, ruling that
.<a=lthough as a driver, his services <are= usual and necessary to the business of the
respondent, yet it is also true that complainant4s case falls within one of the exceptions. :hen
he was rehired, it was clear to him that he would be working only for one <1= month. . . .
0pparently, the reason for this is to fill or to stop5gap the reFuirements of the
employe<r=Irespondent during the period <when= he was rehired, and which it foresees to ease
up in May 1"".. 'he labor arbiter also upheld the aforestated contract signed by Peronila.
4
*n appeal, public respondent 31(C set aside the decision of the labor arbiter declaring that
the dismissal was illegal since there was no /ust cause, with the decretal portion of its
resolution on appeal disposing as follows9
:2$($;*($, premises considered, the decision appealed from is hereby set aside and a new *rder promulgated
ordering the reinstatement of complainant with one <1= year backwages.
3D
'he finding of the labor arbiter regarding the dismissal of Peronila was reversed by public
respondent on these considerations9
2owever, we do not agree with the finding of the 1abor 0rbiter that complainant4s re5
employment was an exception to 0rticle ,"> of the 1abor Code.
xxx xxx xxx
7uffice it to state that the Constitution recogni@es the need to afford protection to labor and assures security of tenure to
workers. 6n consonance thereto, the 1abor Code was enacted to give special attention to the relationship between labor
and management. 6ndeed, the 1abor Code is a special law, and well settled in this /urisdiction is the rule that as between a
special law and a general law, the former prevails. :ithout further belaboring their distinction, to eFuate and apply the
present case to an ordinary contract with a fixed term and period destroys the spirit and intention of the labor laws to give
special treatment to labor and management relationship. 'o uphold the findings a #$o of the 1abor 0rbiter would put to
naught the benefits that the 7tate has intended for labor, since by the mere expedience of defining the terms and
conditions of employment in a well prepared contract, no employee shall ever attain a regular employment.
33
2owever, respondent commission re/ected the argument of Peronila that he was not afforded
the opportunity to adduce evidence before the labor arbiter. 'he 31(C maintained that there
was no error in the procedure conducted by the labor arbiter because he is given ample
discretion to determine whether there is a need to conduct further hearings after the parties
have submitted their position papers and supporting proofs.
31
*n 0ugust 11, 1,,
36
petitioner4s motion for reconsideration was denied for lack of merit,
hence this petition alleging grave abuse of discretion on the part of the 31(C in ordering the
reinstatement of private respondent and the payment to him of one year back wages.
:e find adeFuate and compelling merit in the petition.
'he determinative issue in this case is whether or not the employment contract which
stipulates that there is no employer5employee relationship between petitioner and Peronila is
valid. (elevant to this issue, we are persuaded to hold that the re5employment of Peronila as
a contractual bus driver was merely an act of generosity on the part of petitioner.
0lthough we have ruled in a number of cases applying 0rticle ,"> of the 1abor Code
3A
that
when the activities performed by the employee are usually necessary or desirable in the usual
trade of the employer, the employment is deemed regular notwithstanding a contrary
agreement,
32
there are exceptions to this rule especially if circumstances peculiar to the case
warrant a departure therefrom.
:hat said 0rticle ,"> seeks to prevent is the practice of some unscrupulous and covetous
employers who wish to circumvent the law that protects lowly workers from capricious
dismissal from their employment. 'he aforesaid provision, however, should not be interpreted
in such a way as to deprive employers of the right and prerogative to choose their own
workers if they have sufficient basis to refuse an employee a regular status. Management has
rights which should also be protected.
'he petitioner had validly dismissed Peronila long before he entered into the contested
employment contract. 6t was Peronila who earnestly pleaded with petitioner to give him a
second chance. 'he re5hiring of private respondent was out of compassion and not because
the petitioner was impressed with the credentials of Peronila. Peronila4s previous violations of
company rules explains the reluctant attitude to the petitioner in re5hiring him. :hen the bus
driven by Peronila figured in a road mishap, that incident finally prompted petitioner to sever
any further relationship with said private respondent.
:e have recently held in %hilippine &illa'e (otel vs. National La)or Relations Commission, et
al.
3B
that the fact that the private respondents therein were reFuired to render services
necessary or desirable in the operation of the petitioner4s business for a duration of the one
month dry5run operation period did not in any way impair the validity of the contractual nature
of private respondents4 contracts of employment which specifically stipulated that their
employment was only for one month.
6n upholding the validity of a contract of employment with fixed or specific period in a number
of cases, we explained therein that .the decisive determinant in term employment should not
be the activities that the employee is called upon to perform, but the day certain agreed upon
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. . . . 'his ruling is only in consonance with 0rticle ,"> of the 1abor Code..
0s to whether or not the principle of security of tenure provided in 0rticle ,"> of the 1abor
Code has been violated, we have made the following pronouncements by way of guidelines9
6n Brent *chool, Inc., et al. vs. Ronal!o +amora, etc., et al., the Court had occasion to examine in detail the Fuestion of
whether employment for a fixed term has been outlawed under the above Fuoted provisions of the 1abor Code. 0fter an
extensive examination of the history and development of 0rticles ,"> and ,"1, the Court reached the conclusion that the
contract providing for employment with a fixed period was not necessarily unlawful9 .'here can of course be no Fuarrel
with the proposition that where from the circumstances it is apparent that periods have been imposed to preclude
acFuisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy,
morals, etc. Aut where no such intent to circumvent the law is shown, or stated otherwise, where the reason for the law
does not exist, e.g., where it is indeed the employee himself who insists upon a period or where the nature of the
engagement is such that, without being seasonal or for a specific pro/ect, a definite date of termination is a sine #$a non,
would an agreement fixing a period be essentially evil or illicit, therefore anathemaK :ould such an agreement come
within the scope of 0rticle ,"> which admittedly was enacted .to prevent the circumvention of the right of the employee to
be secured in . . . <his= employmentK. 0s it is evident from even only the three examples already given that 0rticle ,"> of
the 1abor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to
which the lack of a fixed period would be an anomaly but would also appear to restrict, without reasonable distinctions, the
right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a
literal interpretation should be eschewed or avoided. 'he law must be given reasonable interpretation, to preclude
absurdity in its application. *utlawing the whole concept of term employment and subverting to boot the principle of
freedom of contract to remedy the evil of employers4 using it as a means to prevent their employees from obtaining
security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the
head.
3C
6n the case of %hilippine National Oil Company,Ener'y Development Corporation vs. National
La)or Relations Commission, et al.,
35
this Court set down two criteria under which fixed
contracts of employments cannot be said to be in circumvention of security of tenure, to wit9
1. 'he ;ixed period of employment was knowingly and voluntarily agreed upon by the parties,
without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent# or
,. 6t satisfactorily appears that the employer and employee dealt with each other on more or
less eFual terms with no moral dominance whatever being exercised by the former on the
latter.
6n the present dispute, the services of respondent Peronila had been validly terminated by
petitioner, when the latter absented himself without official leave, fifteen years before he was
re5hired as a contractual driver for /ust one month. Definitely, his re5hiring cannot be
construed to mean that Peronila reacFuired his former permanent status.
;urthermore, as correctly pointed out by the 7olicitor %eneral, .there is no evidence on record
that private respondent in fact held the position of a bus driver for nearly seventeen years,
except his bare and unsupported allegations to that effect in his Position Paper. . . . 'here is
ample and unrebutted evidence that private respondent4s employment by P3$6 in 1)1 was
illegally terminated on March ,>, 1)-. 'he *rder issued by the Mediator5;actfinder 1oreto G.
Poblete of the (egional *ffice 3o. 66, 3ational 1abor (elations Commission, 'uguegarao,
Cagayan in the case entitled, 4Pantranco vs. (odolfo Peronila4 docketed as 31(C Case 3o.
"!, attests to this fact.
34
:e once again reiterate that the findings of an administrative agency, to be conclusive and
binding, must be supported by substantial evidence.
1D
0 conflict between the factual findings
of the 31(C and the labor arbiter will necessitate a review of such factual findings. 'he
impugned decision of respondent commission appears to have laid too much stress on the
conceptual principles of social /ustice in labor cases without the corresponding specifics to
support its conclusions.
6t must not be overlooked that along with the inspirational passages on social /ustice
in Calalan' vs. -illiams, et., al.,
13
there is this sobering caveat9 .'he promotion of social
/ustice, however, it is to be achieved not through a mistaken sympathy towards any given
group. since it .means the promotion of the welfare of all the people . . . through the
maintenance of a proper economic and social eFuilibrium in the interrelations of the members
of the community,. and .must be founded on the recognition . . . of the protection that should
be eFually and evenly extended to all groups as a combined force in our social and economic
life, . . . ..
:2$($;*($, the instant petition is %(03'$D, the challenged decision of respondent
3ational 1abor (elations Commission is hereby 7$' 076D$, and the complaint against
petitioners is D67M677$D.
7* *(D$($D.