10

MANILA HOTEL COMPANY, Petitioner, -versus- G.R. No. L-18873 September 30, 1963 COURT OF INDUSTRIAL RELATIONS, ET AL., Respondents. x---------------------------------------------------x D E C I S I O N BAUTISTA ANGELO, J.:

The Pines Hotel Employees Association filed on February 24, 1960 before the Court of Industrial Relations a petition praying, among other things, that its employees who were working at the Pines Hotel be paid additional compensation for overtime service rendered due to the exigencies of the business, as well as additional compensation for Sunday, legal holiday and night time work.

The Manila Hotel filed its answer denying the material averments of the petition and alleging, among others, that if overtime service was rendered the same was not authorized but was rendered voluntarily, for the employees were interested in the tips offered by the patrons of the hotel.

Presiding Judge Jose S. Bautista, to whom the petition was assigned, after trial, rendered judgment stating that the employees were entitled to the additional compensation demanded, including that for overtime work, because an employee who renders overtime service is entitled to compensation even if he rendered it without prior authority. A motion for reconsideration was filed on the ground that the order was contrary to law and the evidence, but the same was denied by the industrial court En Banc.

In compliance with the order of the court, the Examining Division of the Court of Industrial Relations submitted a report in which it stated that the amount due the employees as additional compensation for overtime and night services rendered from January to December 31, 1958 was P32,950.69. The management filed its objection to the report on the ground that it included 22 names of employees who were not employees of the Pines Hotel at the time the petition was filed so that insofar as said employees are concerned the petition merely involves a money claim which comes under the jurisdiction of the regular courts. The trial judge, however, overruled this objection holding that, while the 22 employees were actually not in the service at the time of the filing of the petition, they were however subsequently employed even during the pendency of the incident, and so their claim comes within the jurisdiction of the Court of Industrial Relations. Hence the present petition for review.

There is no merit in this appeal it appearing that while it is true that the 22 employees whose claim is objected to were not actually in their service at the time the instant petition was filed, they were however subsequently re-employed even while the present incident was pending consideration by the trial court. Moreover, it appears that the questioned employees were never separated from the service. Their status is that of regular seasonal employees who are called to work from time to time, mostly during summer season. The nature of their relationship with the hotel is such that during off season they are temporarily laid off but during summer season they are re-employed, or when their services may be needed. They are not strictly speaking separated from the services but are merely considered as on leave of absence without pay until they are re- employed. Their employment relationship is never severed but only suspended. As such, these employees can be considered as in the regular employment of the hotel.

WHEREFORE, the Order appealed from is affirmed. No costs

Bengzon, C.J., Padilla, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur. Reyes, J., took no part.

BRENT SCHOOL vs. ZAMORA (G.R. No. L-48494 - February 5, 1990)

FACTS:

Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. The contract was fixed for five (5) years,i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Three months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was given a copy of the report filed by Brent School advising of the termination of his services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the definite period of employment."

Alegre protested and argued that although his contract did stipulate that the same would terminate on July 17, 1976, sincehis services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the status of a regular employee and could not be removed except for valid cause.6The Regional Director considered Brent School's report as anapplicationfor clearance to terminate employment (not a report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back wages.

Brent School filed a motion for reconsideration but was denied. The School is now before this Court in a last attempt at vindication. That it will get here.

ISSUE:

WON the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or employment for a term.

RULING:

On one hand, there is the gradual and progressive elimination of references to term or fixed-period employment in the Labor Code, and the specific statement of the rulethat:

Regular and Casual Employment. The provisions of written agreement to thecontrary 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 service to be employed 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.

On the other hand, the Civil Code, which has always recognized, and continues to recognize, the validity and propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on the freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services, except the general admonition against stipulations contrary to law, morals, good customs, public order or public policy.26Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with pre-determined dates of completion; they also include those to which the parties by free choice have assigned a specific date of termination.

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

Accordingly, 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.

Alegre's employment was terminated upon the expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the Department of Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of termination, nor an application for clearance to terminate which needed the approval of the Department of Labor to make the termination of his services effective.

SEPARATE OPINION

SARMIENTO,J.,concurring and dissenting:

I am agreed that the Labor Code has not foresaken "term employments", held valid inBiboso V. Victorias Milling Company,Inc. (No. L-44360, March 31, 1977, 76 SCRA 250). That notwithstanding, I can not liken employment contracts to ordinary civil contracts in which the relationship is established by stipulations agreed upon. Under the very Civil Code:

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

xxx xxx xxx

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

The courts (or labor officials) should nevertheless be vigilant as to whether or not the termination of the employment contract is done by reason of expiration of the period or to cheat the employee out of office. The latter amounts to circumvention of the law.

ASSOCIATED LABOR UNIONS (ALU)-TUCP in behalf of its members at AMS FARMING CORPORATION, petitioner,vs.VOLUNTARY ARBITRATOR ROSALINA LETRONDO-MONTEJO and AMS FARMING CORPORATION, respondent.

Seno, Mendoza and Associates for petitioner.

Castro, Enriquez, Carpio, Guillen and Associates for private respondents.

D E C I S I O N

MENDOZA, J.:

This is a petition for certiorari to set aside the decision dated July 19, 1993 of public respondent Voluntary Arbitrator Rosalina Letrondo-Montejo insofar as it dismissed the claim of petitioners members for holiday pay for December 4, 1992, which had been declared a special day for the holding of Sangguniang Kabataan election.

The facts are as follows:

On December 27, 1990, petitioner Associated Labor Unions (ALU-TUCP and private respondent AMS Farming Corporation entered into a five-year Collective Bargaining Agreement beginning November 1, 1990 and ending midnight of October 31, 1995. The CBA covers the regular daily-paid rank-and-file employees of private respondent AMS Farming Corp. at Sampao, Kapalong, Davao del Norte and Magatos, Asuncion, Davao del Norte.

Art. VII, sec 3. of the CBA provides:

New Year, Maundy Thursday, Good Friday, Araw ng Kagitingan, 1st of May, 12th of June, Araw ng Dabaw, 4th of July, Last Sunday of August, 1st November, 30th of November, 25th of December, 30th of December and the days designated by law for holding referendum and local/national election shall be considered paid regular holidays. Consequently, they shall receive their basic pay even if they do not work on those days. Any employee required to work on these holidays shall be paid at last TWO HUNDRED PERCENT (200%) of his daily wage. Covered employees performing overtime work on these days shall be entitled to another THIRTY PERCENT (30%) overtime pay. It is understood however, that any covered employee who shall be absent for more than one day immediately preceding the paid holiday shall not be entitled to the holiday pay.

The President of the Philippines declared December 4, 1992 a special day for the holding of election for Sangguniang Kabataan (SK) throughout the nation. Employees covered by the CBA subsequently filed claims for the payment to them of holiday pay for that day. Private respondent, however, refused their claims on the ground that December 4, 1992 was not a regular holiday within the contemplation of the CBA.

The matter was eventually submitted to voluntary arbitration. At the conference held on February 19, 1993, the parties agreed, among others things, to submit the following issue:

Is the Sangguniang Kabataan Election Day considered a regular holiday for purpose of said Section 3, Article VII of the CBA?

In connection with this issue, they agreed that the Sangguniang Kabataan Election Day was a holiday as decreed by the President of the Philippines.

The parties presented position papers and thereafter submitted the case for resolution.

On July 19, 1993, public respondent rendered an Award 1 in which, while holding employees who had become regular employees on November 1, 1990 entitled to salary increases under the CBA, nonetheless dismissed their claim for holiday pay for December 4, 1992 on the ground that the Sangguniang Kabataan election by any stretch of the imagination cannot be considered as a local election within the meaning of CBA because not all people can vote in the said election but only qualified youths. According to the Voluntary Arbitrator, A local election is generally understood to mean the election by the people of their local leaders like the governors, mayors, members of the provincial and municipal councils, and barangay officials. And when a local election is held, the day is declared a non-working holiday. This is our experience in local and national elections. In the case of the Sangguniang Kabataan (SK) elections, it was a working holiday. Except for the qualified youthful voters, not everybody noticed said election as not everyone voted in the said election.

Hence, this petition, the only issue in which is whether the election for the Sangguniang Kabataan on December 4, 1992 was a local/national election within the contemplation of Art. VII, sec. 3 of the CBA so as to entitle petitioners members, who are employed at the AMS Farming Corp. to the payment of holiday pay for that day.

We hold that it is and that, in denying petitioners claim, respondent Voluntary Arbitrator denied members of petitioner union substantial justice as a result of her erroneous interpretation of the CBA, thereby justifying judicial review. 2

First. The Sangguniang Kabataan (SK) is part of the local government structure. The Local Government Code (Rep. Act. No. 7160) creates in every barangay a Sangguniang Kabataan composed of a chairman, seven (7) members, a secretary and a treasurer. 3 The chairman and the seven members are elected by the Katipunan ng Kabataan, which is composed of citizens of the Philippines residing in the barangay for at least six (6) months, who are between the ages of 15 and 21 and who are registered as members. 4 The chairman of the SK is an ex officio member of the Sangguniang Baranggay with the same powers duties, functions and privileges as the regular members of the Sangguniang Barangay. 5 The President of the Pederasyon ng mga Sangguniang Kabataan, which is imposed of the SK chairmen of the Sangguniang Kabataan of the barangays in the province, city, or municipality, is an ex officio member of the Sangguniang Panlalawigan, Sangguniang Panlungsod, and Sangguniang Bayan. 6

Hence, as the Solicitor General points out, the election for members of the SK may properly be considered a local election within the meaning of Art. VII, sec 3 of the CBA and the day on which it is held to be a holiday, thereby entitling petitioners members at the AMS Farming Corp. to the payment of holiday on such day.

Second. The Voluntary Arbitrator held, however, that the election for members of the SK cannot be considered a local election as the election for Governors , Vice Governors, Mayors and Vice Mayors and the various local legislative assemblies (Sanggunians) because the SK election is participated in only by the youth who are between the ages of 15 and 21 and for this reason the day is not a nonworking holiday.

To begin with, it is not true that December 4, 1992 was not a nonworking holiday. It was a nonworking holiday and this was announced in the media. 7 In Proclamation No. 118 dated December 2, 1992 President Ramos declared the day as a special day through the country on the occasion of the Sangguniang Kabataan Elections and enjoined all local government units through their respective Chief Local Executives [to] extend all possible assistance and support to ensure the smooth conduct of the general elections.

A special day is a special day, as provided by the Administrative Code of 1987. 8 On the other hand, the term general elections means, in the context of SK elections, the regular elections for members of the SK, as distinguished from the special elections for such officers. 9

Moreover, the fact that only those between 15 and 21 take part in the election for members of the SK does not make such election any less a regular local election. The Constitution provides, for example, for the sectoral representatives in the House of Representatives of, among others, women and youth. 10 Only voters belonging to the relevant sectors can take part in the election of their representatives. Yet it cannot be denied that such election is a regular national election and the day set for its holding, a holiday.

Third. Indeed, the CBA provision in question merely reiterates the provision on paid holidays. Thus, the Labor Code provides:

Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and

(c) As used in this Article, holiday includes: New Years Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and the thirtieth of December, and the day designated by law for holding a general election.

As already explained, the phrase general election means regular local and national elections.

Consequently, whether in the context of the CBA or the Labor Code, December 4, 1992 was a holiday for which holiday pay should be paid by respondent employer.

WHEREFORE, the decision dated July 19, 1993 of public respondent Rosalina Letrondo-Montejo, insofar as it dismissed petitioners claim for holiday pay, is SET ASIDE and private respondent is ORDERED to pay petitioners members their regular holiday pay for December 4, 1992 in accordance with Art. VII, sec. 3 of the Collective Bargaining Agreement.

SO ORDERED.

Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.

Maraguinot v. NLRC

FACTS

Petitioner maintains that he was employed by respondents as part of the filming crew. He was later promoted as anelectrician. Petitioners tasks contained of loading movie equipment in the shoothing area. Petitioners sought the assistance of theirsupervisor, Cesario, to facilitate their request that respondents adjust their salary in accordance with the minimum wage law. Mrs.Cesario informed petitioners that del Rosario would agree to increase their salary only if they signed a blank employment contract.As petitioner refused to sign, respondents forced Enero (the other petitioner who worked as a crew member) to go on leave.However, when he reported to work, respondent refused to take him back. Maraguinot was dropped from the company payroll butwhen he returned, he was again asked to sign a blank employment contract, and when he still refused, respondents terminated hisservices. Petitioners thus sued for illegal dismissal.Private respondents assert that they contract persons called producers to produce or make movies for private respondentsand contend that petitioners are project employees of the associate producers, who act as independent contractors. Thus, there isno ER-EE relationship.However, petitioners cited that their performance of activities is necessary in the usual trade or business of respondentsand their work in continuous.

ISSUE: W/N ER-EE relationship existsHELD: Yes.With regards to VIVAs contention that it does not make movies but merely distributes motion pictures, there is no sufficientproof to prove this contention.In respect to respondents allegation that petitioners are project employees, it is a settled rule that the contracting out oflabor is allowed only in case of job contracting. However, assuming that the associate producers are job contactors, they must thenbe engaged in the business of making motion pictures. Associate producers must have tools necessary to make motion pictures.However, the associate producers in this case have none of these. The movie-making equipment are supplied to the producers andowned by VIVA. Thus, it is clear that the associate producer merely leases the equipment from VIVA.In addition, the associate producers of VIVA cannot be considered labor-only contractors as they did not supply, recruit norhire the workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew members. Thus, the relationship betweenVIVA and its producers or associate producers seems to be that of agency.With regards to the issue of illegal dismissal, petitioners assert that they were regular employees who were illegallydismissed. Petitioners in this case had already attained the status of regular employees in view of VIVAs conduct. Thus, petitionersare entitled to back wages. A project employee or a member of a work pool may acquire the status of a regular employee when: a. there is a continuous rehiring of project employees even after a cessation of projectb. the tasks performed by the alleged project employee are vital and necessary to the business of employerThe tasks of petitioners in loading movie equipment and returning it to VIVAs warehouse and fixing the lighting systemwere vital, necessary and indispensable to the usual business or trade of the employer.

Wherefore, petition is granted.

Phil Tobacco Flue Curing v. NLRC, 300 SCRA 37

These refer to the consolidated cases for payment of separation pay lodged by[the] Lubat Group, and for illegal dismissal and underpayment of separation payby [the] Luris group, with prayers for damages and attorneys fees against theabove respondents.

Facts:

There are two groups of employees, namely, the Lubat group and the Lurisgroup. The Lubat group is composed of petitioners seasonal employees whowere not rehired for the 1994 tobacco season. At the start of that season, theywere merely informed that their employment had been terminated at the end of the 1993 season. They claimed that petitioners refusal to allow them to reportfor work without mention of any just or authorized cause constituted illegaldismissal. In their Complaint, they prayed for separation pay, back wages,attorneys fees and moral damages.On the other hand, the Luris group is made up of seasonal employees whoworked during the 1994 season. On August 3, 1994, they received a noticeinforming them that, due to serious business losses, petitioner planned to closeits Balintawak plant and transfer its tobacco processing and redrying operationsto Ilocos Sur. Although the closure was to be effective September 15, 1994,they were no longer allowed to work starting August 4, 1994. Instead, petitionerawarded them separation pay computed according to the following formula:total no. of days actually worked----------------------------------------------------- x daily rate x 15 daystotal no. of working days in one yearIn their Complaint, they claimed that the computation should be based not onthe above mathematical equation, but on the actual number of years served. Inaddition, they contended that they were illegally dismissed, and thus theyprayed for back wages.Against these factual antecedents, the labor arbiter ordered the petitioner topay complainants separation pay differential plus attorneys fees in the totalamount of P3,092,896.76. Dissatisfied with said Decision, Philippine Tobaccoand the complainants filed their respective appeals before the NLRC.As noted earlier, the NLRC affirmed the labor arbiters Decision. Before thisCourt, only Philippine Tobacco filed the present recourse, as the complainantsdid not question the NLRC Decision.

Issues

: In the Courts view, three issues must be tackled:

First

, did petitionerprove serious business losses, its justification for the nonpayment of separation pay?

Second

, was the dismissal of the employees valid?

Third

, howshould the separation pay of illegally dismissed seasonal employees becomputed?

Held:

First Issue:

Serious Business Losses Not Proven

Article 283 of the Labor Code prescribes the requisites and the procedure for anemployees dismissal arising from the closure or cessation of operation of theestablishment.It must be noted that the present case involves the closure of merely a unit ordivision, not the whole business of an otherwise viableenterprise. Although Article 283 uses the phrase closure or cessation of operation of an establishment or undertaking, this Court previously ruled inCoca-Cola Bottlers (Phils.), Inc. v.NLRCthat said statutory provision applies incases of both complete and partial cessation of the business operation.Petitioner did not actually close its entire business. It merely transferred orrelocated its tobacco processing and redrying operations. Moreover, it was alsoengaged in, among others, corn and rental operations, which were unaffectedby the closure of its Balintawak plant. Tested against the aforecited standards, we hold that herein petitioner was notable to prove serious financial losses arising from its tobacco operations. Aclose examination of its Statement of Income and Expenses and its recastedversion thereof, which were presented in support of its contention, suggests itsfailure to show business losses.On the contrary, the Statement of Income and Expenses shows that the sellingand administrative expenses pertain not only to the tobacco business of petitioner, but also to its corn and rental operations, and that the interestexpenses pertain to all of its business operations. In fact, the aforementionedStatement shows that there was a net gain from operations in each yearcovered by the report. In other words, the recasted financial statementeffectively modified the Statement of Income and Expenses by deducting fromthe tobacco operations alone the operating costs pertaining toall

businesses of petitioner. The contention of petitioner that tobacco was its main business doesnot justify the devious contents of the recasted financial statement. It is difficultto accept that it could not have incurred any expense in its otheroperations. Common sense revolts against such proposition.

Second Issue:

Lubat Group Illegally Dismissed

Petitioner illegally dismissed the members of the Lubat group when it refused toallow them to work during the 1994 season. It follows that the employer-employee relationship between herein petitioner and members of the Lubatgroup was not terminated at the end of the 1993 season. From the end of the1993 season until the beginning of the 1994 season, they were considered onlyon leave but nevertheless still in the employ of petitioner.Petitioner is liable for illegal dismissal and should be responsible for thereinstatement of the Lubat group and the payment of their backwages. However, since reinstatement is no longer possible as petitioner hasalready closed its Balintawak plant, respondent members of the said groupshould instead be awarded normal separation pay (in lieu of reinstatement)equivalent to at least one month pay, or one month pay for every year of service, whichever is higher. It must be stressed that the separation pay beingawarded to the Lubat group is due to illegal dismissal; hence, it is different fromthe amount of separation pay provided for in Article 283 in case of retrenchment to prevent losses or in case of closure or cessation of theemployers business, in either of which the separation pay is equivalent to atleast one (1) month or one-half (1/2) month pay for every year of service,whichever is higher.

Third Issue:

Amount of Separation Pay

The amount of separation pay is based on two factors: the amount of monthlysalary and the number of years of service. Although the Labor Code providesdifferent definitions as to what constitutes one year of service, Book Six doesnot specifically define one year of service for purposes of computingseparation pay. However, Articles 283 and 284 both state in connection withseparation pay that a fraction of at least six months shall be considered onewhole year. Applying this to the case at bar, we hold that the amount of separation pay which respondent members of the Lubat and Luris groups shouldreceive is one-half (1/2) their respective average monthly pay during the lastseason they worked multiplied by the number of years they actually renderedservice, provided that they worked for at least six months during a given year. The formula that petitioner proposes, wherein a year of work is equivalent toactual work rendered for 303 days, is both unfair and inapplicable, consideringthat Articles 283 and 284 provide that in connection with separation pay, afraction of at least six months shall be considered one whole year. Under theseprovisions, an employee who worked for only six months in a given year -- whichis certainly less than 303 days -- is considered to have worked for one wholeyear. NLRC Decision is affirmed with modifications.

Millares & Lagda vs NLRC

DOUGLAS MILLARES and ROGELIO LAGDA, petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION, TRANS-GLOBAL MARITIME AGENCY, INC. and ESSO INTERNATIONAL SHIPPING CO., LTD., respondents.

G.R. No. 110524

March 14, 2000

Facts:

Petitioners Douglas Millares and Rogelio Lagda seek the nullification of the decision, dated June 1, 1993, of the public respondent National Labor Relations Commission (NLRC) dismissing for lack of merit petitioners' appeal and motion for new trial and affirming the decision, dated July 17, 1991, rendered by the Philippine Overseas Employment Administration (POEA).

Petitioner Douglas Millares and Lagda were employed by private respondent ESSO International Shipping Company Ltd. (Esso International, for brevity) through its local manning agency, private respondent Trans-Global Maritime Agency, Inc.

Petitioner Millares applied for a leave of absence and Michael J. Estaniel, President of private respondent Trans-Global, approved the request for leave of absence. Subsequently,informing him of his intention to avail of the optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more than twenty (20) years of continuous service but denied petitioner Millares' request for optional retirement on the following grounds, to wit: (1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide for retirement before the age of sixty (60) years; and (3) he did not comply with the requirement for claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention to terminate his employment within thirty (30) days from his last disembarkation date.

Petitioner Millares requested for an extension of his leave of absence and C. Palomar, Crewing Manager, Ship Group A, Trans-Global, wrote petitioner Millares advising him that respondent Esso International "has corrected the deficiency in its manpower requirements specifically in the Chief Engineer rank by promoting a First Assistant Engineer to this position as a result of (his) previous leave of absence which expired last August 8, 1989. The adjustment in said rank was required in order to meet manpower schedules as a result of (his) inability." Personnel Administrator, advised petitioner Millares that in view of his absence without leave, which is equivalent to abandonment of his position, he had been dropped from the roster of crew members effective September 1, 1989.

On October 5, 1989, petitioners Millares and Lagda filed a complaint-affidavit, docketed as POEA (M) 89-10-9671, for illegal dismissal and non-payment of employee benefits against private respondents Esso International and Trans-Global, before the POEA.

On July 17, 1991, the POEA rendered a decision dismissing the complaint for lack of merit. 12Petitioners appealed the decision to the NLRC dismissing petitioners' appeal and denying their motion for new trial for lack of merit. Hence, the instant petition for certiorari.

Issue:

Whether or not the public respondent gravely abused its discretion in ruling that petitioners were not regular employees, the termination of the petitioners were valid and failing to rule that even in the absence of an optional early retirement policy, petitioners were still entitled to receive 100% of their total credited contributions to the CEIP as expressly provided in paragraph 2 (g) and (h) of the letter memorandum.

Held:

The definition of regular and casual employment in Art 280 of the labor code provides that the primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer.

In the case at bar, it is undisputed that petitioners were employees of private respondents until their services were terminated. They served in their capacity as Chief Engineers, performing activities which were necessary and desirable in the business of private respondents Esso International, a shipping company; and Trans-Global, its local manning agency which supplies the manpower and crew requirements of Esso International's vessels.Verily, as petitioners had rendered 20 years of service, performing activities which, were necessary and desirable in the business or trade of private respondents, they are, by express provision of Article 280 of the Labor Code, considered regular employees. Petitioners may not be dismissed except for a valid or just cause under Article 282 of the Labor Code. In the instant case, clearly, there was no valid cause for the termination of petitioners.

It will be recalled, that petitioner Millares was dismissed for allegedly having "abandoned" his post; and petitioner Lagda, for his alleged "unavailability for contractual sea service." However, that petitioners did not abandon their jobs such as to justify the unlawful termination of their employment is borne out by the records.

Furthermore, the absence of petitioners was justified by the fact that they secured the approval of private respondents to take a leave of absence after the termination of their last contracts of enlistment. Subsequently, petitioners sought for extensions of their respective leaves of absence. Granting arguendo that their subsequent requests for extensions were not approved, it cannot be said that petitioners were unavailable or had abandoned their work when they failed to report back for assignment as they were still questioning the denial of private respondents of their desire to avail of the optional early retirement policy, which they believed in good faith to exist.

WHEREFORE, premises considered, the assailed Decision, dated June 1, 1993, of the National Labor Relations Commission is hereby REVERSED and SET ASIDE and a new judgment is hereby rendered ordering the private respondents to:

(1) Reinstate petitioners Millares and Lagda to their former positions without loss of seniority rights, and to pay full backwages computed from the time of illegal dismissal to the time of actual reinstatement;

(2) Alternatively, if reinstatement is not possible, pay petitioners Millares and Lagda separation pay equivalent to one month's salary for every year of service; and,

(3) Jointly and severally pay petitioners One Hundred Percent (100%) of their total credited contributions as provided under the Consecutive Enlistment Incentive Plan.

SO ORDERED.

Magsalin v. National Organization of Working Men

Facts:

1. The private respondents worked as sales route helpers for the petitioner (Coca Cola) for 5 months and thereafter they were hired on a daily basis. According to the petitioner, the respondents were merely hired as substitutes for regular helpers when the latter were unavailable or due to shortage of manpower/high volume of work. These workers would then wait every morning outside the gates and if hired, they would be paid their wages at the end of the day.

2. The respondents asked the petitioner to make them regular but the latter refused. Hence, 23 of these temporary workers filed a case for illegal dismissal.

Issue: W/N the respondents' work is deemed necessary and desirable in the usual business or trade of the petitioner

RULING: Yes. The repeated hiring of the respondent workers and continuing need of their daily services clearly attest to the necessity or desirability of their services in the regular conduct of the business/trade of petitioner.

In determining whether employment is regular or not, the applicable test is the reasonable connection between a particular activity performed in relation to the usual business or trade of the employer. The nature of work must be viewed from the perspective of the business in its entirety and not confined scope.

Philips Semiconductor vs. Fadriquela

Post under case digests, labor law at Wednesday, February 22, 2012 Posted by Schizophrenic Mind

Facts: On May 8, 1992, respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in which she was hired as a production operator with a daily salary of P118. Her initial contract was for a period of three months up to August 8, 1992, but was extended for two months when she garnered a performance rating of 3.15. Her contract was again renewed for two months or up to December 16, 1992, when she received a performance rating of 3.8. After the expiration of her third contract, it was extended anew, for three months, that is, from January 4, 1993 to April 4, 1993.

After garnering a performance rating of 3.4, the respondent?s contract was extended for another three months, that is, from April 5, 1993 to June 4, 1993. She, however, incurred five absences in the month of April, three absences in the month of May and four absences in the month of June. Line supervisor Shirley F. Velayo asked the respondent why she incurred the said absences, but the latter failed to explain her side. The respondent was warned that if she offered no valid justification for her absences, Velayo would have no other recourse but to recommend the non-renewal of her contract. The respondent still failed to respond, as a consequence of which her performance rating declined to 2.8. Velayo recommended to the petitioner that the respondent?s employment be terminated due to habitual absenteeism, in accordance with the Company Rules and Regulations. Thus, the respondents contract of employment was no longer renewed.

LA: dismissed complaint for lack of merit

NLRC: affirmed LA decision and holding that the respondent was a contractual employee whose period of employment was fixed in the successive contracts of employment she had executed with the petitioner. Thus, upon the expiration of her contract, the respondents employment automatically ceased. The respondents employment was not terminated; neither was she dismissed.

CA: reversed LA and NLRC decision

Issue/s:

(1) Whether or not the respondent was still a contractual employee of the petitioner as of June 4, 1993;

(2) Whether or not the petitioner dismissed the respondent from her employment;

(3) If so, whether or not she was accorded the requisite notice and investigation prior to her dismissal; and

(4) Whether or not the respondent is entitled to reinstatement and full payment of backwages as well as attorneys fees.

Held:

(1) NO. In this case, the respondent was employed by the petitioner on May 8, 1992 as production operator. She was assigned to wirebuilding at the transistor division. There is no dispute that the work of the respondent was necessary or desirable in the business or trade of the petitioner. She remained under the employ of the petitioner without any interruption since May 8, 1992 to June 4, 1993 or for one (1) year and twenty-eight (28) days. The original contract of employment had been extended or renewed for four times, to the same position, with the same chores. Such a continuing need for the services of the respondent is sufficient evidence of the necessity and indispensability of her services to the petitioners business. By operation of law, then, the respondent had attained the regular status of her employment with the petitioner, and is thus entitled to security of tenure as provided for in Article 279 of the Labor Code.

(2) YES. The SC agreed with the appellate court that Fadriquela was dismissed by the petitioner without the requisite notice and without any formal investigation. Given the factual milieu in this case, the respondent?s dismissal from employment for incurring five (5) absences in April 1993, three (3) absences in May 1993 and four (4) absences in June 1993, even if true, is too harsh a penalty.

(3) NO. The dismissal is illegal because, first, she was dismissed in the absence of a just cause, and second, she was not afforded procedural due process

(4) YES. In pursuance of Article 279 of the Labor Code, it is proper to order the reinstatement of petitioner to her former job and the payment of her full backwages. Also, having been compelled to come to court to protect her rights, petitioners prayer for attorneys fees is granted.

Doctrine: The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. 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 of the employer. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. The law does not provide the qualification that the employee must first be issued a regular appointment or must be declared as such before he can acquire a regular employee status.

Alcira vs. NLRC G. R. No. 149859, June 9, 2004

Post under case digests, Civil Law at Monday, February 20, 2012 Posted by Schizophrenic Mind

Facts: The petitioner, Radin Alcira, was hired by the respondent Middleby Philippines Corporation as engineering support services supervisor under probationary status for 6 months. Afterwards, the service of the petitioner was terminated by the respondent on the ground that the latter was not satisfied on the performance of the former. As a result, the petitioner filed a complaint foe illegal dismissal in the National Labor Relations Commission (NLRC) against the respondent.

Petitioner contended that his termination in the service tantamount to illegal dismissal since he attained the status of a regular employee as of the time of dismissal. He presented the appointment paper showing that he was hired on May 20, 1996, consequently, his dismissal on November 20, 1996 was illegal because at that time, he was already a regular employee since the 6-month probationary period ended on November 16, 1996.

The respondent, on the other hand, asserted that during the petitioners probationary period, he showed poor performance on his assigned tasks, was late couple of times and violated the companys rule. Thus, the petitioner was terminated and his application to become a regular employment was disapproved. The respondent also insisted that the removal of the petitioner from office was within the probationary period.

The Labor Arbiter dismissed the complaint on the ground that the dismissal of the petitioner was done before his regularization because the 6- month probationary period, counting from May 20, 1996 shall end on November 20, 1996. The NLRC affirmed the decision of the Labor Arbiter. The Court of Appeals affirmed the decision of NLRC. Hence, the present recourse.

Issue: Whether the petitioner was already a regular employee in respondents company at the time of his dismissal from the service

Held: The Supreme Court ruled in the negative. The status of the petitioner at the time of his termination was still probationary. His dismissal on November 20, 1996 was within the 6- month probationary period. Article 13 of the Civil Code provides that when the law speaks of years, months, and days and nights, it shall be understood that years are of 365 days, months of 30 days, days of 24 hours and nights are from sunset to sunrise. Since, one month is composed of 30 days, then, 6 months shall be understood to be composed of 180 days. And the computation of the 6- month period is reckoned from the date of appointment up to the same calendar date of the 6th month following. Since, the number of days of a particular month is irrelevant, petitioner was still a probationary employee at the time of his dismissal. Wherefore, the petition is dismissed.