CABAHUG_laborCases: Contract with fixed period/ fixed term Employment

7/28/2019 CABAHUG_laborCases: Contract with fixed period/ fixed term Employment

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Name: Cabahug, Sheila Mae

Topic: Contract with fixed period/ fixed term Employment

Case Title: BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE vs.RONALDO ZAMORA, the Presidential Assistant for Legal

Affairs, Office of the President, and DOROTEO R.ALEGRE

G.R No.: L-48494

Date of Judgement: February 5, 1990

Petitioner: BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE

Respondent: RONALDO ZAMORA, the Presidential Assistant for LegalAffairs, Office of the President, and DOROTEO R.

ALEGREPonente: NARVASA, J.

Facts:

Doroteo R. Alegre was the athletic director at Brent, at a yearly compensation of20, 000. His contract fixed a specific term of 5 years for its existence, from July, 1971,to July, 1976. Subsequent subsidiary agreements in March 1973, August 1973,and Sep t . 1974 reiterated the same terms and conditions, including the expiry date,as those contained in the original contract of July, 1971. 3 months before theexpiration of the stipulated period, in April 1976, he was given a copy of the reportfiled by Brent w i th t h e D e pa r tm e nt o f L a bo u r a d vi s in g o f t h e

te rmi nat i on o f hi s s e r v i c e s , e f f e c t i v e J u l y 1 6 , 1 9 7 6 . T h e s t a t e dg r o u n d f o r termination was completion of contract, expiration of thedefinite period of employment. He p r o t e s t e d t h e a n n o u n c e dt e r m i n a t i o n o f h i s employment. He argued that although his contract didstipulate t h a t t h e s a m e w o ul d t e r m i n a t e o n J ul y 17 , 19 7 6 , s i n c e h i sservices were necessary and desirable in the usual business of his employer, and hisemployment had lasted for five years, he had acquired the status of regular employeeand could not be removed except for valid cause. The employment contract of 1971was ex ecuted when the Labor Code of the Phil ippi nes had not yet beenpromulgated, which came into effect some 3 years after the perfection of the contract.

Issue:

W h e t h e r o r n o t t h e p r o v i s i o n s o f t h e L a b o u rC o d e r e g a r d i n g probationary and regular employees haveanathematized fixed period employment or employment for a term?


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Held:

YES. Before the Labor Code, there was no doubt about the validity of term

employment. It was impliedly but clearly recognized by the Termination Pay law (RA

1052). 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, andimposes 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. Under

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. Where

from the circumstances it is apparent that periods have been imposed to preclude

acquisition of tenurial security by the employee, they should be struck down or

disregarded as contrary to public policy, morals good customs, public order or publicpolicy. But where no such intent to circumvent the law is shown, 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 project, a definite date of terminations a sine qua non, would an agreement

fixing a period be essentially evil or illicit, therefore anathema.

Article 280 of the Labor Code, under a narrow and literal interpretation would

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 areasonable 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 headache by lopping off the head. Familiar examples of employment

contracts which may be neither for seasonal work nor for specific projects, but to which

fixed term is essential. Overseas employment contracts to which, the concept of regular

employment will all that it implies does not appear ever to have been applied, Article

280 of the Labor Code not withstanding; 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. Despite the provisions of Article 280, Policy, Instructions No. 8 of the

Minister of Labor implicitly recognize that certain company officials may be elected for

what would amount to fixed periods, at the expiration of which they would have to stand


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down, in providing that these officials may lose their jobs as president, executive

vicepresident or vice-president and the like because the stockholders or the board of

directors for one reason or another did not re-elect them. Since the entire purpose

behind the development of legislation culminating in the present Article 280 of the

Labor Code clearly appears to have been 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.


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Case Title: ZOSIMO CIELO vs.THE HONORABLE NATIONAL LABOR RELATIONS

COMMISSION, HENRY LEI and/or HENRY LEITRUCKING

G.R No.: 78693

Date of Judgement:

Petitioner: ZOSIMO CIELO

Respondent: THE HONORABLE NATIONAL LABOR RELATIONSCOMMISSION, HENRY LEI and/or HENRY LEI TRUCKING

Ponente: CRUZ, J.:p

Facts:

The petitioner is a truck driver who claims he was illegally dismissed by theprivate respondent, the Henry Lei Trucking Company. The Labor Arbiter found for himand ordered his reinstatement with back wages. On appeal, the decision was reversed bythe National Labor Relations Commission, which held that the petitioner's employmenthad expired under a valid contract. The petitioner then came to us on certiorari under

Rule 65 of the Rules of Court. The Solicitor General defended the public respondent andagreed that the contract between the petitioner and the private respondent was abinding agreement not contrary to law, morals or public policy. The petitioner's servicescould be legally terminated upon the expiration of the period agreed upon, which wasonly six months. The petitioner could therefore not complain that he had been illegallydismissed. As an examination of the claimed agreement was necessary to the resolutionof this case, the Court required its production by the petitioner. But he could not complybecause he said he had not been given a copy by the private respondent.

In his position paper, the petitioner claimed he started working for the privaterespondent on June 16, 1984, and having done so for more than six months hadacquired the status of a regular employee. As such, he could no longer be dismissedexcept for lawful cause. He also contended that he had been removed because of hisrefusal to sign, as required by the private respondent, an affidavit.

Issue:

Whether or not the petitioner's employment had expired under a valid contract?

Held:


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NO. Because while insisting that it is the agreement that regulates its relations

with the petitioner, the private respondent is ensnared by its own words. The agreement

specifically declared that there was no employer-employee relationship between the

parties. Yet the affidavit the private respondent prepared required the petitioner to

acknowledge that "I have received my salary and allowances from Mr. Henry Lei,"

suggesting an employment relationship. Under these arrangements, the private

respondent hoped to be able to terminate the services of the drivers without the

inhibitions of the Labor Code. All it had to do was refuse to renew the agreements,

which, significantly, were uniformly limited to a six-month period. No cause had to be

established because such renewal was subject to the discretion of the parties. In fact, the

private respondent did not even have to wait for the expiration of the contract as it was

there provided that it could be "earlier terminated at the option of either party."

By this clever scheme, the private respondent could also prevent the drivers from

becoming regular employees and thus be entitled to security of tenure and other

benefits, such as a minimum wage, cost-of-living allowances, vacation and sick leaves,holiday pay, and other statutory requirements. The private respondent argues that there

was nothing wrong with the affidavit because all the affiant acknowledged therein was

full payment of the amount due him under the agreement. Viewed in this light, such

acknowledgment was indeed not necessary at all because this was already embodied in

the vouchers signed by the payee-driver. But the affidavit, for all its seeming

innocuousness, imported more than that. What was insidious about the document was

the waiver the affiant was unwarily making of the statutory rights due him as an

employee of the trucking company.The Court looks with stern disapproval at the

contract entered into by the private respondent with the petitioner (and who knows with

how many other drivers). The agreement was a clear attempt to exploit the unwitting

employee and deprive him of the protection of the Labor Code by making it appear that

the stipulations of the parties were governed by the Civil Code as in ordinary private

transactions. They were not, to be sure. The agreement was in reality a contract of

employment into which were read the provisions of the Labor Code and the social

justice policy mandated by the Constitution. It was a deceitful agreement cloaked in the

habiliments of legality to conceal the selfish desire of the employer to reap undeserved

profits at the expense of its employees. The fact that the drivers are on the whole

practically unlettered only makes the imposition more censurable and the avarice more

execrable.


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G.R. No. 106331 March 9, 1998INTERNATIONAL PHARMACEUTICALS, INC., petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC), FOURTHDIVISION, and DR. VIRGINIA CAMACHO QUINTIA, respondents.

MENDOZA, J.:

Topic: Contract with fixed period/ Fixed term Employment

Case Title: INTERNATIONAL PHARMACEUTICALS, INC. vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC),

FOURTH DIVISION, and DR. VIRGINIA CAMACHOQUINTIA

G.R No.: 106331

Date of Judgement: March 9, 1998

Petitioner: INTERNATIONAL PHARMACEUTICALS, INC.

Respondent: NATIONAL LABOR RELATIONS COMMISSION (NLRC),FOURTH DIVISION, and DR. VIRGINIA CAMACHO QUINTIA

Ponente:MENDOZA, J.

Facts:

Petitioner International Pharmaceuticals, Inc. (IPI) is a corporation engaged inthe manufacture, production and sale of pharmaceutical products. In March 1983, itemployed private respondent Virginia Camacho Quintia as Medical Director of itsResearch and Development department, replacing one Diana Villaraza. Thegovernment, in that year, launched a program encouraging the development of herbalmedicine and offering incentives to interested parties. Petitioner decided to venture intothe development of herbal medicine, although it is now alleged that this was merely

experimental, to find out if it would be feasible to include herbal medicine in itsbusiness. One of the government requirements was the hiring of a pharmacologist.Petitioner avers that it was only for this purpose that private respondent was hired,hence its contention that private respondent was a project employee.

The contract of employment provided for a term of one year from the date of itsexecution on March 19, 1983, subject to renewal by mutual consent of the parties at leastthirty days before its expiration. It provided for a monthly compensation of P4,000.00.


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It was agreed that Quintia could continue teaching at the Cebu Doctor's Hospital,whereshe was, at that time, a full-time member of the faculty.

Quintia claimed that when her contract of employment was about to expire, she wasinvited by Xavier University in Cagayan de Oro City to be the chairperson of itspharmacology department. However, Pio Castillo, the president and general manager,

prevailed upon her to stay, assuring her of security of tenure. Because of this assurance,she declined the offer of Xavier University. Indeed, after her contract expired on March19, 1984, she remained in the employ of petitioner where she not only performed thework of Medical Director of its Research and Development department but also that ofcompany physician. This continued until her termination on July 12, 1986.

In her complaint, private respondent alleges that the reason for her termination "washer taking up the cudgels for the rank and file employees when she felt they were given araw deal by the officers of their own Savings and Loan Association." She claimed thatsometime in June 1986, while Pio Castillo was in China, the Association declareddividends to its members. Due to complaints of the employees, meetings were heldduring which private respondent pointed out the "inequality in the imposition of

interest rate to the low-salaried employees" and led them in the demand for a fulldisclosure of the association's financial status. Her participation was resented by theassociation's officers, all of whom were appointed by management, so that when Castilloarrived, private respondent was summoned to Castillo's office where she was berated forher acts and humiliated in front of some laborers. When she sought permission toexplain her side, she was arrogantly turned down and told to leave.

On July 10, 1986, Quintia was replaced as head of the Research and Developmentdepartment by Paz Wong. Two days later, on July 12, 1986, she received an inter-officememorandum officially terminating her services allegedly because of the expiration ofher contract of employment.

Issue:

Whether or not there is clearly no legal or factual basis to support respondent

NLRC's reliance on the absence of a new written contract as indicating that respondent

Quintia became a regular employee?

Held:

No, because it is argued that "the mere fact that there was no subsequent written

contract does not mean that the original agreement was abandoned and/or that

respondent became a regular employee due to the absence thereof and/or that the

parties had executed a new agreement, in the absence of evidence showing intent to

abandon and/or novate the same." It posits that, based on the acts of the parties, animplied renewal was entered into, or, at the very least, petitioner claims, the absence of

a written contract only indicates that the parties impliedly agreed to extend their written

contract.

There is absolutely no principle of law to support the proposition urged by

petitioner. On the other hand the written contract in this case provided that it was


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subject to renewal by mutual consent of the parties at least thirty days before its

expiration on March 18, 1984. There is no evidence to show that the parties mutually

agreed to renew their contract. On the other hand, to sustain petitioner's contention that

there was an implied extension after the expiration of the original contract would make

it possible for employers like petitioner to circumvent Art. 280 of the Labor Code and

thus prevent an employee from becoming regular through the simple expedient of

making him sign a contract for a term and then extend to him a contract term, after

term, after term.

Moreover, assuming that petitioner is correct that there was at least an implied

renewal of the written contract containing the same terms and conditions, then

Quintia's termination should have been effective in March of 1986 or March of 1987

rather than July of 1986. It should be noted that the fixed term stated in the written

contract allegedly renewed is one year. Considering that the said contract was executed

on March 19, 1983, then if there really were implied renewals with the same terms and

conditions, private respondent's employment should not have been terminated in Julyof 1986. As discussed earlier, the decision of the NLRC is based not alone on inference

drawn from the expiration of the contract but on facts which, in light of Art. 280, show

that private respondent's work was in pursuance of the business of petitioner.


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Case Title: ST. THERESA'S SCHOOL OF NOVALICHES FOUNDATION andADORACION ROXASvs.

NATIONAL LABOR RELATIONS COMMISSION and ESTHER

REYESG.R No.: 122955

Date of Judgement: April 15, 1998

Petitioner: ST. THERESA'S SCHOOL OF NOVALICHES FOUNDATION and

ADORACION ROXAS

Respondent: NATIONAL LABOR RELATIONS COMMISSION and ESTHERREYES

Ponente: PURISIMA, J.

Facts:

Petitioner Adoracion Roxas is the president of St. Theresa's School of NovalichesFoundation. She hired private respondent, Esther Reyes, on a contract basis, for theperiod from June 1, 1991 to March 31, 1992. However, private respondent commencedwork on May 2, 1991. During the said period of employment, private respondent becameill. She went on a leave of absence from February 17 to 21 and from February 24 to 28,1992, such leave of absence having been duly approved by petitioner Roxas. On March 2,1992, private respondent reported for work, but she only stayed in her place of workfrom 6:48 to 9:38 a.m. Thereafter, she never returned. For what reason did privaterespondent stop working?

Petitioners theorize that the private respondent abandoned her work. On theother hand, the latter maintains that she was replaced. When she went back to work onFebruary 20, 1992, she found out that her table, chair, and other belongings were movedto a corner of their office, and she was replaced by Annie Roxas, daughter of petitionerAdoracion Roxas. She tried to contact her employer but the latter could not be foundwithin the school premises.

On March 25, 1992, petitioners sent private respondent a letter by registered

mall, informing her that her contract, due to expire on March 31, 1992, would not be


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renewed. Prior thereto, or on March 3, 1992, to be precise, the private respondent

instituted NLRC NCR Case No. 00-033-01481-92 against the herein petitioners for

unfair labor practice based on harassment, illegal dismissal, 13th month pay,

allowances, removal of desk and chair form place of work, and refusal to communicate,

moral and exemplary damages.

Issue:

Whether or not the award of backwages in favor of private respondent, is properin light of the finding that her dismissal was valid?

Held:

No. The term "backwages" has been defined as that for earnings lost by a worker

due to his illegal dismissal. Backwages are generally granted on grounds of equity.

Payment thereof is a form of relief that restores the income lost by reason of such

unlawful dismissal. It is not private compensation or damages, but is awarded in

furtherance and effectuation of the public objectives of the labor Code. Nor is it a redress

of a private right but, rather, in the nature of a command to the employer to make public

reparation for dismissing an employee, either due to the former's unlawful act or bad

faith.

Jurisprudence is filled to the brim with cases wherein backwages were awarded to an

employee illegally dismissed. But where, as in this case of a pitiful employee rendered

hapless by her lawyer's inaction or ignorance, the dismissal has been adjudged valid and

lawful, the challenged award of backwages is decidedly improper and contrary to law

and jurisprudence.


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Case Title: JOAQUIN T. SERVIDADvs.NATIONAL LABOR RELATIONS COMMISSION, INNODATA PHILIPPINES,INC./ INNODATA CORPORATION, TODD SOLOMON

G.R No.: 128682

Date of Judgement: March 18, 1999

Petitioner: JOAQUIN T. SERVIDAD

Respondent: NATIONAL LABOR RELATIONS COMMISSION, INNODATAPHILIPPINES, INC. / INNODATA CORPORATION, TODD SOLOMON

Ponente: PURISIMA, J.

Facts:

Petitioner Joaquin T. Servidad was employed on May 9, 1994 by respondentINNODATA as a "Data Control Clerk", under a contract of employment. On November9, 1995, or after working for six (6) months, he was made to sign a three-monthprobationary employment and later, an extended three-month probationaryemployment good until May 9, 1995.

On July 7, 1994, the petitioner was given an overall rating of 100% and 98% inthe work evaluations conducted by the company. In another evaluation, petitionerreceived a rating of 98.5% given by the private respondent.

On May 9, 1995, petitioner was dismissed from the service on the ground of allegedtermination of contract of employment.

Such happening prompted petitioner to institute a case for illegal dismissal against the

private respondent.

Issue:

Whether or not the contract of employment of petitioner is to be for a definite orfixed period?

Held:


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No because the private respondent did not specify the criteria for the termination

or retention of the services of petitioner. Such a wide leeway for the determination of the

tenure of an employee during a one year period of employment is a violation of the right

of the employee against unwarranted dismissal. Certainly, favorable interpretation of

the contract in the case under scrutiny should be for petitioner and not for the private

respondent which caused the preparation of said contract.

If the contract was really for a fixed term, the private respondent should not have been

given the discretion to dismiss the petitioner during the one year period of employment

for reasons other than the just and authorized causes under the Labor Code. Settled is

the rule that an employer can terminate the services of an employee only for valid and

just causes which must be shown by clear and convincing evidence. According to the

private respondent, the one-year period stipulated in subject contract was to enable

petitioner to acquire the skill necessary for the job. In effect, what respondent employer

theorized upon is that the one-year term of employment is probationary. If the nature of

the job did actually necessitate at least one year for the employee to acquire the requisitetraining and experience, still, the same could not be a valid probationary employment as

it falls short of the requirement of Article 281 of the Labor Code. It was not brought to

light that the petitioner was duly informed at the start of his employment, of the

reasonable standards under which he could qualify as a regular employee. The

rudiments of due process demand that an employee should be apprised before hand of

the conditions of his employment and the basis for his advancement.

The language of the contract in dispute is truly a double-bladed scheme to block the

acquisition of the employee of tenurial security. Thereunder, private respondent has two

options. It can terminate the employee by reason of expiration of contract, or it may use"failure to meet work standards" as the ground for the employee's dismissal. In either

case, the tenor of the contract jeopardizes the right of the worker to security of tenure

guaranteed by the Constitution.


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Case Title: PURE FOODS CORPORATIONvs.NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA,

VIOLETA CRUSIS, ET AL.

G.R No.: 122653

Date of Judgement: December 12, 1997

Petitioner: PURE FOODS CORPORATION

Respondent: NATIONAL LABOR RELATIONS COMMISSION, RODOLFOCORDOVA, VIOLETA CRUSIS, ET AL.

Ponente: DAVIDE, JR., J.

Facts:

The private respondents (numbering 906) were hired by petitioner Pure FoodsCorporation to work for a fixed period of five months at its tuna cannery plant inTambler, General Santos City. After the expiration of their respective contracts ofemployment in June and July 1991, their services were terminated. They forthwithexecuted a "Release and Quitclaim" stating that they had no claim whatsoever againstthe petitioner.

On 29 July 1991, the private respondents filed before the National Labor

Relations Commission (NLRC) Sub-Regional Arbitration Branch No. XI, General Santos

City, a complaint for illegal dismissal against the petitioner and its plant manager,

Marciano Aganon.

Issue:


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Whether or not the contracts with a specific period of employment may be given legal

effect provided, however, that they are not intended to circumvent the constitutional

guarantee on security of tenure?

Held:

Yes. This scheme of the petitioner was apparently designed to prevent the private

respondents and the other "casual" employees from attaining the status of a regular

employee. It was a clear circumvention of the employees' right to security of tenure and

to other benefits like minimum wage, cost-of-living allowance, sick leave, holiday pay,

and 13th month pay. Indeed, the petitioner succeeded in evading the application of labor

laws. Also, it saved itself from the trouble or burden of establishing a just cause for

terminating employees by the simple expedient of refusing to renew the employment

contracts. The five-month period specified in private respondents' employment

contracts having been imposed precisely to circumvent the constitutional guarantee on

security of tenure should, therefore, be struck down or disregarded as contrary to publicpolicy or morals. To uphold the contractual arrangement between the petitioner and the

private respondents would, in effect, permit the former to avoid hiring permanent or

regular employees by simply hiring them on a temporary or casual basis, thereby

violating the employees' security of tenure in their jobs. The execution by the private

respondents of a "Release and Quitclaim" did not preclude them from questioning the

termination of their services. Generally, quitclaims by laborers are frowned upon as

contrary to public policy and are held to be ineffective to bar recovery for the full

measure of the workers' rights. The reason for the rule is that the employer and the

employee do not stand on the same footing. Notably, the private respondents lost not

time in filing a complaint for illegal dismissal. This act is hardly expected fromemployees who voluntarily and freely consented to their dismissal. The NLRC was, thus,

correct in finding that the private respondents were regular employees and that they

were illegally dismissed from their jobs. Under Article 279 of the Labor Code and the

recent jurisprudence,the legal consequence of illegal dismissal is reinstatement without

loss of seniority rights and other privileges, with full back wages computed from the

time of dismissal up to the time of actual reinstatement, without deducting the earnings

derived elsewhere pending the resolution of the case. However, since reinstatement is

no longer possible because the petitioner's tuna cannery plant had, admittedly, been

close in November 1994, the proper award is separation pay equivalent to one month

pay or one-half month pay for every year of service, whichever is higher, to be computed

from the commencement of their employment up to the closure of the tuna cannery

plant.


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Topic: Seasonal Employees

Case Title: PHILIPPINE TOBACCO FLUE-CURING & REDRYINGCORPORATION,

vs.

NATIONAL LABOR RELATIONS COMMISSION, LIGAYA LUBAT,MARY JANE ESTARIS, EUFRECINA JAVIER, OFELIA PLANDEZ,EDGARDO FORMENTO, CRESCENCIA TIU, MA. VICTORIA LEON, GELLENEULALIA, AIDA LICUDO, LUCINA LURIS, ERLINDA BORCE, DOMINGA

AYALA, CARMELITA APANTO, AIDA ALBANIEL, SALVACION SORIO,PETRONILA SAMSON, ERLINDA CARANAY, ROSALIE TIU,MILAGROS QUISMUNDO, LUZ DELA CRUZ, VIVIAN DERLA, IRENEENIEGO, VICENTA GARCIA, YOLANDA IGNACIO, ADORACION LADERA,GLORIA MENDEZ, LEONILA MENDOZA, REBECCA MORALES,TERESITA TIU, EMELITA QUILANO, JULIETA PEDRIGAL, ANTONIAREYES, JOSEFA ROSALES, FRANCISCA TISMO, NORMA AGUIRRE,CAROLINA AVISO, AMELIA BAUTISTA, ROSA BORJA, APOLONIACASTILLO, CARMELITA CAYETANO, ROSELFIDA CENTINA, PATRIABUSTILLO, FELICIAD CIPRIANO, MARINA CORPUZ, MATILDECORPUZ, JOSEFINA CUENZA, BIENVENIDA DE GUZMAN,

EUGENIA DELA CRUZ, MARIA PINEDA, PANCHITA NARCA,CRISANTA MULAWIN, VIRGINIA MENGOLIO, ROSARIO OSMA, ARCELIMADRILEJO, CRISTOPHER LABADOR, CANDELARIA LAZONA,

ANGELITA LESTINGYO, CARMELITA ESPIRITU, HELEN ESTARIS,ROSA JAPSON, ARDIONELA LAZONA, ARIEL ULTRA, REYNANTETUMBUCON, ANTENOR REMOLLINO, ALEXANDER REMOLLINO,

ARNALDO NAPALIT, MACARIO MORIEL, JOSELITO LICUDO,PATERNO LAVALLA, JERRY LICUDO, CESAR SAMSON, EDUARDO

ESGUERRA JR., RAMISES CENTARAN, JUAN BUSTILLO, ROLANDOALBANIEL, REYNALDO AQUINO, JAIME ESGUERRA, ARMANDOJAPSON, FERNANDO ESGUERRA, CARLITO ENIEGO, REYNALDODAYOT, MARCELO DAYOT, RODOLFO CERBITE, ARTEMIO BOQUILLA,PASCUAL AGUJA, ERIC AGUJA, CELESTINA AQUINO, REYNALDOBARQUIN, FELOMENA BEGONIA, ROSITA BAGONIA, REGINABENITEZ, EDGARDO BERGANO, RODOLFO BORROMEO, LUDIVICODALAY, ASCILIPIADES GOYENA, REMEDIO GOYENA, OSCAR EMNACE,


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GERTRUDES GUIAO, LOLITA MUSNE, ALBERTO PARAMA,LUNINGNING PERALTA, AMELIA RANCHES, ERNESTO SAN JUAN,LIWAYWAY SAN JUAN, RICARDO TRIUMFANTE, LORENA

TORCIDO, PRISCILLA VILLASIN, LUZVIMINDA VILLEGAS,ROSILE VERSOZA, \CHARITO ISIDRO, PETER LABAYNE, and

SHIRLEY LUBAT

G.R No.: 127395

Date of Judgement: December 10, 1998

Petitioner: PHILIPPINE TOBACCO FLUE-CURING & REDRYING

CORPORATION,

Respondent: NATIONAL LABOR RELATIONS COMMISSION, LIGAYALUBAT, MARY JANE ESTARIS, EUFRECINA JAVIER, OFELIA PLANDEZ,EDGARDO FORMENTO, CRESCENCIA TIU, MA. VICTORIA LEON, GELLENEULALIA, AIDA LICUDO, LUCINA LURIS, ERLINDA BORCE, DOMINGA

AYALA, CARMELITA APANTO, AIDA ALBANIEL, SALVACION SORIO,PETRONILA SAMSON, ERLINDA CARANAY, ROSALIE TIU, MILAGROSQUISMUNDO, LUZ DELA CRUZ, VIVIAN DERLA, IRENE ENIEGO,

VICENTA GARCIA, YOLANDA IGNACIO, ADORACION LADERA, GLORIAMENDEZ, LEONILA MENDOZA, REBECCA MORALES, TERESITA TIU,EMELITA QUILANO, JULIETA PEDRIGAL, ANTONIA REYES, JOSEFAROSALES, FRANCISCA TISMO, NORMA AGUIRRE, CAROLINA AVISO,

AMELIA BAUTISTA, ROSA BORJA, APOLONIA CASTILLO, CARMELITACAYETANO, ROSELFIDA CENTINA, PATRIA BUSTILLO, FELICIADCIPRIANO, MARINA CORPUZ, MATILDE CORPUZ, JOSEFINA CUENZA,

BIENVENIDA DE GUZMAN, EUGENIA DELA CRUZ, MARIA PINEDA,PANCHITA NARCA, CRISANTA MULAWIN, VIRGINIA MENGOLIO,ROSARIO OSMA, ARCELI MADRILEJO, CRISTOPHER LABADOR,CANDELARIA LAZONA, ANGELITA LESTINGYO, CARMELITA ESPIRITU,HELEN ESTARIS, ROSA JAPSON, ARDIONELA LAZONA, ARIEL ULTRA,REYNANTE TUMBUCON, ANTENOR REMOLLINO, ALEXANDERREMOLLINO, ARNALDO NAPALIT, MACARIO MORIEL, JOSELITOLICUDO, PATERNO LAVALLA, JERRY LICUDO, CESAR SAMSON,EDUARDO ESGUERRA JR., RAMISES CENTARAN, JUAN BUSTILLO,ROLANDO ALBANIEL, REYNALDO AQUINO, JAIME ESGUERRA,

ARMANDO JAPSON, FERNANDO ESGUERRA, CARLITO ENIEGO,

REYNALDO DAYOT, MARCELO DAYOT, RODOLFO CERBITE, ARTEMIOBOQUILLA, PASCUAL AGUJA, ERIC AGUJA, CELESTINA AQUINO,REYNALDO BARQUIN, FELOMENA BEGONIA, ROSITA BAGONIA,REGINA BENITEZ, EDGARDO BERGANO, RODOLFO BORROMEO,LUDIVICO DALAY, ASCILIPIADES GOYENA, REMEDIO GOYENA, OSCAREMNACE, GERTRUDES GUIAO, LOLITA MUSNE, ALBERTO PARAMA,LUNINGNING PERALTA, AMELIA RANCHES, ERNESTO SAN JUAN,LIWAYWAY SAN JUAN, RICARDO TRIUMFANTE, LORENA TORCIDO,


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PRISCILLA VILLASIN, LUZVIMINDA VILLEGAS, ROSILE VERSOZA,CHARITO ISIDRO, PETER LABAYNE, and SHIRLEY LUBAT

Ponente: PANGANIBAN, J.

Facts:

This case involves two groups of seasonal workers who claimed separationbenefits after the closure of petitioner's tobacco processing plant in Balintawak, MetroManila and the transfer of its tobacco operations to Candon, Ilocos Sur. Petitionerrefuses to grant separation pay to the workers belonging to the first batch (referred to asthe Lubat group), because they had not been given work during the preceding year and,hence, were no longer in its employ at the time it closed its Balintawak plant. Likewise,it claims exemption from awarding separation pay to the second batch (the Luris group),because the closure of its plant was due to "serious business losses," as defined in Article283 of the Labor Code.

Issue:Whether or not the Luris and Lubat group has been illegally dismissed?

Held:

Yes, serious business losses were not proven. To justify retrenchment: (1) losses

expected should be substantial and not merely de minimise. (2) Substantial loss must be

reasonably imminent. (3) Retrenchment must be reasonably necessary. Employer

should have taken other measures. (4) Alleged losses must be proven by sufficient and

convincing evidence. Here, we consider the fact that the petitioner did not actually close

its operations but merely transferred its processing and redrying operations. It was also

engaged in corn and rental operations. Notice of termination, though issued, violated

the one month prior notice requisite. Seasonal workers who are called from time to time

and are temporary laid off during off-season are not separated from service in said

period, but are merely considered on leave until reemployed. The employer-employee

relationship between petitioner and Lubat group was not terminated at the end of 1993

season.


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Topic: Seasonal Employees

Case Title: SAN MIGUEL CORPORATIONvs.NATIONAL LABOR RELATIONS COMMISSION and RUSTICO VEGA

G.R No.: 80774

Date of Judgement: May 31, 1988

Petitioner: SAN MIGUEL CORPORATION

Respondent: NATIONAL LABOR RELATIONS COMMISSION and RUSTICOVEGA

Ponente: FELICIANO, J.

Facts:

In line with an Innovation Program sponsored by petitioner San MiguelCorporation ("Corporation;" "SMC") and under which management undertook to grantcash awards to all SMC employees except [ED-HO staff, Division Managers and higher-ranked personnel who submit to the Corporation Ideas and suggestions found to bebeneficial to the Corporation, private respondent Rustico Vega submitted on 23September 1980 an innovation proposal. Mr. Vega's proposal was entitled "ModifiedGrande Pasteurization Process," and was supposed to eliminate certain alleged defectsin the quality and taste of the product, San Miguel Beer Grande.

Mr. Vega at that time had been in the employ of petitioner Corporation forthirteen (1 3) years and was then holding the position of mechanic in the BottlingDepartment of the SMC Plant Brewery situated in Tipolo, Mandaue City.

Petitioner Corporation, however, did not find the aforequoted proposalacceptable and consequently refused Mr. Vega's subsequent demands for a cash awardunder the Innovation Program. On 22 February 1983, a Complaint was filed againstpetitioner Corporation with Regional Arbitration Branch No. VII (Cebu City) of the thenMinistry of Labor and Employment. Private respondent Vega alleged there that hisproposal [had] been accepted by the methods analyst and implemented by theCorporation [in] October 1980, and that the same ultimately and finally solved theproblem of the Corporation in the production of Beer Grande. Private respondent thus


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claimed entitlement to a cash prize of P60, 000.00 (the maximum award per proposaloffered under the Innovation Program) and attorney's fees.

Issue:

Whether or not the the money claim of private respondent Vega arose out of or in

connection with his employment relation with petitioner Corporation?

Held:

Yes. The SMC Innovation Program was essentially an invitation from petitionerCorporation to its employees to submit innovation proposals, and that petitionerCorporation undertook to grant cash awards to employees who accept such invitationand whose innovation suggestions, in the judgment of the Corporation's officials,satisfied the standards and requirements of the Innovation Program and which,therefore, could be translated into some substantial benefit to the Corporation. Suchundertaking, though unilateral in origin, could nonetheless ripen into an enforceable

contractual (facio ut des) obligation on the part of petitioner Corporation under certaincircumstances. Thus, whether or not an enforceable contract, albeit implied aridinnominate, had arisen between petitioner Corporation and private respondent Vega inthe circumstances of this case, and if so, whether or not it had been breached, arepreeminently legal questions, questions not to be resolved by referring to laborlegislation and having nothing to do with wages or other terms and conditions ofemployment, but rather having recourse to our law on contracts.


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Topic: Employees Right to Set Period/ Obligation

Case Title:GRAND MOTOR PARTS CORPORATIONvs.THE MINISTER OF LABOR, THE REGIONAL DIRECTOR, MINISTRY OFLABOR, REGION VI, and NARCISO BELICENA, JR.

G.R No.: L-58958

Date of Judgement: July 16, 1984

Petitioner: GRAND MOTOR PARTS CORPORATION

Respondent: THE MINISTER OF LABOR, THE REGIONAL DIRECTOR,MINISTRY OF LABOR, REGION VI, and NARCISO BELICENA, JR.

Ponente: GUERRERO, J.

Facts:

R e s p o n d e n t B a l i c e n a w a s t h e B r a n c h M a n a g e r o f t h e

petitioners company in Iloilo Branch. He was the Finance Officer of Warner, Barnes, &Co. (no.2 of the company) when allegedly, Mr. Alfredo Cisneros (the then actingbranch manager of the comp an y i n I lo i lo ) i nduce d h im to app ly f o r th ep os i t io n o f Branch Manager, as their company (petitioner) was looking for a CPA .He appl ied for the job and was accepted. He s tar ted working for thepetitioner company on April 1 but resigned from his position in Warner, Barnes, & Co.only on April 28. Howe ve r, he was ter min ate d onl y aft er wor kin g fo r t hecompany for 4 months (April to August). Petitioner company alleged thathe fai led to subm it promp tly the month ly Income and Loss Statement,Comparative Projections & Actual Sa les Report and the Comp arative PerformanceReport dated July 8, 1980 on the operation of the Iloilo Branch for the month of June

and May, 1980, the Cash Sales of the Iloilo Branch went down to 91, 318.41 for June,1980, as compared with the sales for the month of May, 1980 in the sum of17 4 , 6 9 7 . 7 7 .

Balicena in violation of company policy and without clearance from the headoffice in Cebu, extended personal accounts inflator of 15 persons which aso f No ve mb e r, 198 0 pr o du c ed delinquent accounts amounting to 18, 435.80.He claimed lack of knowledge of the vehicular accident caused by a subo rdi nate an dfailed to provide prompt administrative disciplinary action against the erring


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employee. They claimed that he is only a probationary employee, who would beobserved by the company for 4-6 months and that he knew that there is apossibility that he would not get the job. He o n th e o th er h an d al le ge d th a t h eis a reg ula r employee, although he was not able to present any contractestablishing his status as a regular employee. That the mishap involving the

company's vehicle which was used without his permission and knowledge couldnot be blamed upon him and that the alleged reports which he failed to send were notreminded to him, verbally or in writing that his sales for the period April to August,1980 is higher compared to that for the same period in 1979, also that the allegedaccounts remaining unpaid as of November 6, 1980 would have been collected in full ifhe were still the Manager, among other things. Regional Director and Ministero f L abo ur rule d i n f avo ur o f B a l i c e n a , o r d e r i n g h i sr e i n s t a t e m e n t , p a y m e n t o f h i s back wages, and other privileges.

Issue:

Whether or not the private respondent's employment as Branch Manager was

probationary?

Held:For the first issue, the SC ruled in affirmative. The employer has the right or

is at liberty to choose as to who will be hired and who will be declined. It iswithin the exercise of this right to select his employees that the employer may set or fix aprobationary period within which the latter may test and observe the conduct ofthe former before hiring him permanently. The right of a labourer to sell his labour tosuch persons as he may choose is, in its essence, the same as the right of an employer topurchase labour from any person whom it chooses. The employer and the employeehave thus an e q u a l i t y o f r i g h t g u a r a n t e e d b y t h e C o n s t i t u t i o n . I f

t h e employer can compel the employee to work against the latters will, this isservitude. If the employee can compel the employer t o g i v e h i m w o r ka g a i n s t t h e e m p l o y e r ' s w i l l , t h i s i s oppression. F ir st , B al ic en acould not present any written proof of his appointment or employment asregular and permanent Branch Manager of Petitioners Corporation. Then there was thefact that h e a s s u m e d h i s w o r k a s o f A p r i l 1 b u t r e s i g n e d f r o m h i sprevious company only on April 28, meaning that if he was really appointed asregular and permanent then he would have resigned immediately from his old company.But since he was not yet sure of his statu s in the peti t ion er corp orat ion,he resigned late.

Second, he claims that there was no written contract because the

contracts were given only to those who will pass the probationary period and therank-and-file employees, not to those managerial ones. This practice is notsupported and contrary to usual business practice. Also, being a CPA and FinanceOfficer in his former company, he should have insisted on a written contract for thesecurity of his tenure in his new position. In short, he already had a stable position in hisformer company and in not insisting on a written contract, he took the risk of beingjobless fo r he may be terminated as Branch Manager. Third, he had neve rbeen hired as manager, and the p et i t i o ne r co mpa ny a nd hes fo rme r


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comp an y are engaged in different kinds of business so it was necessary for h i m t ou n d e r g o a p e r i o d o f p r o b a t i o n t o t e s t h i s qualifications, skillsand experience since managing is a new experience for him.


Topic: Employees Right to Set Period/ Obligation

Case Title: ORIENT EXPRESS PLACEMENT PHILIPPINESvs.NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE

OVERSEAS EMPLOYMENT ADMINISTRATION andANTONIO F. FLORES

G.R No.:113713

Date of Judgement: June 11, 1997

Petitioner: ORIENT EXPRESS PLACEMENT PHILIPPINES

Respondent: NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE

OVERSEAS EMPLOYMENT ADMINISTRATION and

ANTONIO F. FLORES

Ponente: BELLOSILLO, J.

Facts:Antonio Flores was hi red as crane operator with a monthly sa lary of

US$500 for 1year subject to a 3month probationary period. After 1monthand 5days, he was repatriated to the Philippines. He filed a complaint toPOEA for having been terminated for no valid reason. His employers OrientE x p r e s s a n d N a d r i c o t h e f o r e i g n p r i n c i p a l c l a i m e d t h a t h e w a st e r m i n a t e d f o r p o o r j o b p e r f o r m a n c e a s s h o w n i n h i sperformance evaluation sheet. POEA decided in favour of Flores held that whenthe ground invoked for dismissal of an employee was incompetence or poor j o bp e r f o r m a n c e , i t m u s t b e s h o w n t h a t t h e r e a s o n a b l e s t an da rd s o f wo rk p re sc r ib ed by th e emp loy e r we re made kn o wn to th e emp loy e e.T h e d i s m i s s a l w a s un w a r r a n t e d b e c a us e t h e e m p l o y e r s f a i l e d t o p o i n t

o ut t he r e aso n able standards of work required. NLRC affirmed POEA decision onappeal. It also ruled that the designation of Flores as floor man instead of crane operatorfor which he was hired violated his employment contract. Orient Express andNadrico filed for motion for reconsideration but it was denied.


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Issue:

Whether or not NLRC and POEA committed grave abuse of discretion for ruling

that poor job performance and uncooperative work attitude did not justify his

dismissal?

Held:

NO, Flores was not validly dismissed, the petition is denied. The services of an

employee hired on probationary basis may be terminated when he fails to qualify as a

regular employee in accordance with reasonable standards made known by the

employer to the employee at the time of the engagement. The Court cannot sustain

dismissal on this ground because petitioner failed to specify the reasonable standards bywhich Flores was alleged to have been evaluated to have poor performance. Neither of

the 2 original petitioners provided ever made mention that he must first take and pass a

Crane Operators License Examination before he would be allowed to touch a crane.

Neither did he know that he was to be assigned as floor man pending the release of the

exam results. He also did not know that if he failed the exam, he would be subject to a

performance evaluation 1 month after his hiring to determine whether the company was

amenable in continuing misemployment. Flores could not be faulted for harbouring the

impression that he was hired as crane operator for a definite period of 1 year to

commence upon his arrival at the work-site and to terminate at the end of 1 year. No

other condition was laid out except that he was to be on probation for 3 months. Dueprocess dictates that an employee be apprised beforehand of the condition of his

employment and of the terms of advancement therein. Even if unsatisfactory

performance was true, it is not one of the just causes for dismissal under the Labor

Code. There was no standard by which such probationary period was made known to

him.

Documents

CABAHUG_laborCases: Contract with fixed period/ fixed term Employment